Your editor comes to you, the publisher, with an idea: he wants to republish a detective novel originally published by your publishing company in 1968. You are pretty sure Janice Author granted your company all print publication rights in the publishing agreement that was signed in 1967, and you like the idea of republishing the novel. But does the grant of rights clause in Janice Author's agreement really mean what you think it says?
You may not be reading the contract correctly if you are not considering the doctrine of "indivisibility" which was a part of copyright law until 1978 -- the implementation date of the Copyright Act of 1976. Under the doctrine of indivisibility, Janice Author could not have assigned parts of a copyright to different recipients because a copyright was considered a "whole" that could not be divided amongst different owners. Although Janice Author could have granted all print publication rights to your company, that grant might not have made you an owner of the copyright, and in fact the grant may only have been a non-exclusive license. The possibility also existed that the work might already have been injected into the public domain. Unless Janice Author transferred the entire copyright to you, you might not possess the rights you think you have. In fact, the doctrine of indivisibility is the reason why publishers before 1978 made it a practice to include an assignment of all the author's copyright rights to the publisher, including ownership of the copyright, in publishing agreements. It is therefore essential when examining a grant of rights clause for a work published before 1978 that you understand the doctrine of indivisibility to know if the publishing agreement contains a valid grant of rights to the publisher.
The Pitfalls of the Doctrine of Indivisibility
Under the Copyright Act of 1909 the ownership of a copyright could only be transferred in whole, and not in part. If the copyright owner assigned anything less than the entire copyright such transfer was only recognized as a license and not an assignment. The owner of the entire copyright was called the "copyright proprietor."
The purpose of making a copyright indivisible was to protect alleged infringers from the harassment of successive lawsuits since only the copyright proprietor and an assignee, but not a licensee, could initiate a copyright infringement lawsuit. Although this was a legitimate goal, indivisibility only made sense as a solution when exploitation of a copyrighted work mainly consisted of the reproduction of copies of an original work. Therefore, the lack of divisibility of rights was not very harmful when the only right that really mattered was the "reproduction right", because there was relatively little importance to reserving the other exclusive rights. The doctrine of indivisibility began to fall apart when new technologies developed that resulted in the creation of derivative works in many different kinds of media that were based on the original work. When this occurred the doctrine of indivisibility ended up protecting copyright infringers from liability because mere licensees of the original work could not protect their work without the assistance of the copyright proprietor.
The reason why a licensee could not protect his work was because the owner of any rights that consisted of less than the entire copyright was not considered the copyright proprietor, and the licensee could not commence a legal action against a copyright infringer. Therefore, if you were the licensee of print publication rights in a work and you wished to bring suit against an infringer, you could not. Under the 1909 Act, only the copyright proprietor could bring a copyright infringement action. Eventually, the rules were changed so that a licensee could bring suit against an infringer, but the licensee could only do this if the copyright proprietor agreed to join the licensee in the action. However, if you did not have the cooperation of the copyright proprietor you could not proceed with the suit on your own behalf.
Divisibility: Copyright Act of 1976
Ultimately, Congress realized the doctrine of indivisibility was ineffective for a world in which an original work could be used to create derivative works in many different forms. The Copyright Act of 1976 embodied the first explicit statutory recognition of the principle of divisibility in a copyright. Section 201(d)(1) of the Act states that 3the ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law and Section 201(d)(2) states that any of the exclusive rights comprised in a copyright, including any subdivision of any rights ... may be transferred ... and owned separately. While the 1976 Act did not divide a copyright itself, it enabled copyright owners to divide the exclusive rights that comprise the copyright. It was not until 1978 that Janice Author could have granted a publisher only the print publication rights which the publisher could enforce as the copyright owner.
Section 106 of the 1976 Act enumerates the exclusive rights that the copyright owner has in a copyrighted work. Any of these exclusive rights may be divided to any number of recipients. These exclusive rights include:
- preparation of derivative works;
- public performance;
- public display; and
- digital performance in sound recordings.
Section 101 of the 1976 Act states that any of the six exclusive rights may be restricted in scope by limiting the time or place that any right is effective. Some examples of such restricted scope are the following:
- exclusive right to publish an article only in the month of June;
- exclusive right to publish and distribute the book only in the United States;
- exclusive right to the public performance of a play only in New York City; and
- exclusive right to distribute a pamphlet only on Sundays. All the exclusive rights are divisible under the 1976 Act.
There is no limit on how narrow the scope of licensed rights may be and still constitute a transfer of ownership, as long as the rights that are licensed are exclusive.
Under the 1976 Act, an exclusive licensee may bring an action against an infringer. However, because an exclusive licensee of a given right has standing to sue for only the infringement of the particular right the licensee possesses, the more narrowly the exclusive right is drawn, the more limited is the resulting standing to sue. For example, if you have an exclusive right to publish and distribute a book in the United States, you cannot sue for copyright infringement that occurs in Hungary. If you have the exclusive right to distribute a pamphlet on Sundays, you cannot sue an infringer who distributes the pamphlet on Thursdays. Therefore, because a copyright can be almost infinitely divisible, it is essential that an author and publisher carefully define in their publishing agreement the nature and scope of the rights that are to be granted.
The most important thing to remember is that, in order to have a valid exclusive license, the transfer must be in writing. Under the 1976 Act, a non-exclusive license does not have to be in writing, but an exclusive license does. Section 204 of the 1976 Act makes it clear that a transfer of an exclusive right that is not in writing will be invalid. Several courts have upheld this harsh result when transfers were not in writing.
Publisher Be Aware
Returning to the scenario described at the beginning of this article, suppose you are examining the contract for Janice Author's 1968 novel. Even though the doctrine of indivisibility has long since been abandoned, there are still problems when publishers must deal with works that were created and published prior to 1978. The lesson of indivisibility is that one needs to be careful when evaluating the grant of rights clause in the agreement for a work that was first published before 1978. Do not assume that the grant of rights clause actually means what it says.
For example, under the 1909 Act only the copyright proprietor could claim ownership of a copyright, therefore someone such as a licensee of Janice Author could have rendered Janice Author's copyright invalid. Such invalidity could have occurred if Janice Author had first published her work in a magazine. If Janice Author had not granted the entire copyright to the magazine publisher, but only granted the magazine publisher the right to publish her work in a magazine, and reserved all other rights for herself, then the magazine publisher would only be a licensee. If the magazine publisher, upon publication of Janice Author's work had only placed a copyright notice in the name of the magazine publisher, and not in the name of Janice Author, then Janice Author's work was first published without proper copyright notice and under the 1909 Act her work would be injected into the public domain. The reason the work would fall into the public domain was because the doctrine of indivisibility required the copyright proprietor, Janice Author, to have the copyright notice in her name at the time of the first publication of the work. If the copyright notice, upon the first publication of the work, was in a name of a licensee, the magazine publisher, rather than in the name of the copyright proprietor, then the copyright notice was improper and the work was injected into the public domain. The problem for a book publisher who subsequently received a grant of rights from Janice Author to publish her work in book form was that the work was in the public domain and therefore rendered any exclusive right of copyright the publisher thought they had invalid. Therefore, if a publisher now decided to republish the novel the publisher would be publishing a work that any other publisher could also publish because the novel is in the public domain and therefore not copyright protected.
Before you become suspicious of all grant of rights clauses in contracts for works that were first published before 1978, remember that if the copyright was assigned as a whole, indivisibility is not a problem. Furthermore, the judiciary became exasperated with the doctrine of indivisibility long before Congress changed the law, and in many instances the courts found a way to get around the doctrine of indivisibility in order to prevent a "harsh" decision that would inject a copyrighted work into the public domain.