Ambiguity in a contract never favors the drafting party. This basic principle of contract law came back to bite Marvel Comics in a recent Court of Appeals Second Circuit decision, Friedrich v. Marvel, regarding copyright renewal. Gary Friedrich, Plaintiff, allegedly authored or at least co-authored a series of stories and screenplay depicting the fictional Ghost Rider character he created for Defendant Marvel. Friedrich, who claimed ownership in the works, executed a form work-for-hire agreement in 1978, six years after the initial publication of the issue in question. Marvel claimed that the Ghost Rider characters and story were created through a collaborative process with Marvel personnel and resources. They also claimed ownership of the renewal rights asserting an assignment in the work-for-hire agreement.
The Federal District Court in New York granted Marvel’s Motion for Summary Judgment. They ruled that even if Plaintiff solely authored the works in question, he had granted a valid assignment of the copyright in the work-for-hire agreement that included renewal rights. The Court reasoned that the term “forever” clearly indicated the parties’ intent to convey the renewal term to Marvel. The Second Circuit disagreed stating the Agreement was ambiguous and that genuine disputes of material fact existed regarding the parties’ intent to assign renewal rights in the Agreement, along with the timeliness of Friedrich’s ownership claim, and the authorship of the work.
This discussion concerns the renewal rights. Absent the express intent to convey renewal term rights in the assignment, the rights presumptively revert to the Grantor at term expiration. Although words like “forever” may be indicative of intent to convey renewal rights, this intent must be determined by the trier of the facts. Applying the law of the State of New York, the Court found the terms of the Agreement to be ambiguous. First, the Court stated that the agreement’s “opaque cluster of clauses is simply not clear and parsing through its dense provisions does little to elucidate its meaning.” Secondly, the language was ambiguous as to whether it covered the work published six years earlier. Thirdly, the language was ambiguous as to conveyance of the renewal rights, as the contract did not explicitly reference renewal rights. In fact, most of the language merely tracked the 1976 Copyright Act’s definition of “work made for hire.
Lastly, the Court found Marvel’s reliance on the term “forever” misplaced as the clause “Marvel is the sole and exclusive copyright proprietor thereof having all rights of ownership therein,” only suggested Marvel was the statutory author by virtue of the fact that the work was “made for hire.” Thus, the Agreement could reasonably be construed as a form work-for-hire contract having nothing to do with renewal rights. So now the case is sent back to the District Court for trial to sort out the ownership, intent and renewal issues.
Although standard forms are less expensive, there is a risk associated with their use. Here, the risk was compounded by the inconsistent nature of the work-for-hire form constituting an assignment of the renewal term. This created the ambiguity and therefore the opening for “he said, she said” regarding the intent of the parties.
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One thought on “When “Forever” Is Not Forever”
Thank you for the reminder about the importance of reviewing and possibly rewriting things that become “standard forms” to your business. It’s easy to pull out something and say “oh, this will do.” The time it takes to review, edit, analyze the clauses and the situation, and customize something that is “standard” could save you in the long run.
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