by: Patrick Anderson, Chief Technology Officer | May 20, 2018
Why are invitations to negotiate treated as hostile acts?
When Victor Miller, the Friday the 13th (1980) screenwriter, exercised his right to terminate the copyright assignment to his script, the production company chose to sue him, rather than negotiate a deal with him as intended by the statute. As noted previously, 17 U.S.C. § 203 “permits authors to terminate transfers and licenses previously granted to their works, and thus reclaim their Intellectual Property rights.” However, § 203 terminations only apply to agreements dated January 1, 1978 or later, owing to its inclusion in the 1976 Copyright Act.
On the theory that authors typically lack bargaining power when initially selling or licensing their work, US Copyright Law had always granted them the reversionary interests. This is no better exemplified than in the case of Miller, who was paid around $9,200 for a film that went on to be the 18th highest grossing film of 1980, pulling in nearly $40 M (valued at nearly $130 M in 2018 dollars). Naturally, § 203 permits authors a second whack, years down the road, with fair market value of the property more well-defined.
As large publishers and studios consolidated power, they began to require authors to sign advanced waivers of reversionary rights, undermining the policy set forth by Congress. Thus, the ’76 act introduced the concept of transfer termination that very specifically could not be waived or assigned away in advance. Publishers, record labels, and film studios are essentially forced by Congressional policy to re-negotiate to maintain the author’s IP rights after 35 years. However, as the lawsuit against Miller demonstrates, some studios simply will not cooperate.
To those in the patent space, this is no surprise. Large corporate interests regularly disregard the valid intellectual property rights of small entities and inventors. From that same playbook, Horror Inc. and the Manny Company sued Miller, rather than negotiate. Their claim, which we summarized last October, is that Miller’s screenplay was actually a work made for hire. A work for hire is deemed to be ‘authored’ by the one who does the ‘hiring’ rather than the author in the literal sense. Thus, if true, Miller would not be entitled to invoke § 203.
However, as we noted, Miller “claims to be a freelance writer who wrote the first draft ‘on spec’ prior to completing the work pursuant to a screenwriting agreement.” In other words, Miller wrote and provided a first draft to producer Sean Cunningham’s company without any contract or guarantee of payment, enabling Cunningham to raise money and attract talent to proceed with the project. The parties executed a screenwriting agreement on June 4, 1979, but newly discovered evidence suggests that Miller’s first draft was already complete prior to the date of that agreement. Specifically, a memo to Cunningham from his assistant documents a conversation with Tom Savini dated May 22, 1979. For those unfamiliar, Savini is something of a legend in the horror film community, having worked on special effects for classic horror films like Dawn of the Dead (1978), Creepshow (1982), and The Texas Chainsaw Massacre 2 (1986).
Aside from the quaint nature of the memo—referring to Savini as a “very gentle soul” despite his penchant for “prosthetic faces, limbs, and gore” and noting that this now legendary effects artist “[s]eems to know what he’s up to”—its contents are significant because the assistant mentions that Tom requested to see a script and that she will send him the “first draft.” In addition, a letter addressed to Savini dated May 23 states, “I am enclosing the first draft of FRIDAY 13 [the working title at the time], as per our conversation yesterday.” This, of course, begs the existential question of how Cunningham’s assistant could have sent Savini the requested first draft script unless it had already been written.
Copyright experts agree that the law limits works for hire to very narrow terrain. Specifically, that terrain covers authors under traditional employment relationships, and authors of specially commissioned works subject to written agreements in advance of the work’s creation. Nothing can turn a traditionally authored work into a work made for hire after its creation. Thus, the timing of the screenplay relative to Miller’s agreement is relevant if one makes the dubious assumption that the agreement purports to make the screenplay a work for hire.
The agreement itself is notable for its complete and total omission of any ‘work for hire’ language. Thus, Cunningham’s company relies on an “employment” relationship allegedly defined in a contract that offered Miller a flat fee and no traditional employment benefits. Copyright law requires courts to look beyond labels and the determine whether an actual employment relationship exists—a test the Manny Company is likely to fail.
Yet, they persist in their refusal to pay Miller a fair rate for the Intellectual Property that launched a franchise with 12 films, earning more than $800 M in box office gross (adjusted for inflation). Is $9200 a fair price for the original writer, or does the massive success and impact Friday the 13th has had justify additional compensation in accordance with the policy set by Congress?