United States v. 2005-12-07 | 04-57189 | MILNE VSLESINGER | precedential | opinion |

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 CLARE MILNE, by and through
MICHAEL JOSEPH COYNE, her No. 04-57189
receiver, D.C. No. Plaintiff-Appellant,  CV-02-08508-FMC
v. OPINION
STEPHEN SLESINGER, INC.,
Defendant-Appellee. 
Appeal from the United States District Court
for the Central District of California
Florence-Marie Cooper, District Judge, Presiding
Argued and Submitted
September 13, 2005—Pasadena, California
Filed December 8, 2005
Before: J. Clifford Wallace, Barry G. Silverman, and
Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Callahan
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COUNSEL
David Nimmer, Los Angeles, California, argued the cause for
the plaintiff-appellant. With him on the briefs were Elliot
Brown and Bryce Gee.
Roger L. Zissu, New York, New York, argued the cause for
the defendant-appellee. With him on the briefs were Patrick
T. Perkins, David Donahue, Correne Kristiansen, and Jerome
B. Falk, Jr.
OPINION
CALLAHAN, Circuit Judge:
This copyright action arises from a termination notice sent
by the appellant to the appellee, seeking to recapture rights to
various characters created by her grandfather, Alan Alexander
Milne, who authored the “Winnie-the-Pooh” children’s books.
Milne originally granted various rights in those works to the
appellee in 1930. Then, in 1983, due to a change in copyright
law in 1976, Milne’s heirs considered terminating the 1930
grant outright, but instead entered into a new agreement that
revoked the original grant and re-issued rights in the works to
the appellee. The appellant seeks to invalidate the 1983 agree-
ment based on 1998 legislation. The 1998 legislation only
authorizes the termination of copyright agreements executed
before 1978. Because the 1983 revocation and re-grant were
valid, we affirm the district court’s decision.
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I
A. Historical & Regulatory Background
As part of the enumerated powers vested in the federal gov-
ernment, the Constitution provides Congress with the power
“to promote the Progress of Science and useful Arts, by secur-
ing for limited Times to Authors and Inventors the exclusive
Right to their respective Writings and Discoveries.” U.S.
Const. art. I, § 8, cl. 8. Pursuant to this authority, Congress
enacts copyright legislation.
The first enactment of concern in this case is the 1909
Copyright Act. Act of Mar. 4, 1909, ch. 320, § 23, 35 Stat.
1075 (1909). This enactment responded to authors’ com-
plaints that the existing protection term was inadequate
because many authors were outliving the protection and
thereby being denied the proper fruits of their labor. See
Arguments on S. 6330 & H.R. 19853, Before the Comms. on
Patents, 59th Cong., 1st Sess. 116-21 (1906) (statement by
Samuel Clemens (a/k/a Mark Twain) asserting that the term
of protection was not long enough). Congress addressed those
complaints by extending the renewal period from 14 years to
28 years, making copyright protection possible for a total of
56 years. Act of Mar. 4, 1909, ch. 320, § 23, 35 Stat. 1075
(1909).
Almost seven decades later, Congress enacted the 1976
Copyright Act, which forms the foundation of current copy-
right law. The two-term structure of a fixed term followed by
a renewal term was eliminated. See Copyright Act of 1976,
Pub. L. No. 94-553, 90 Stat. 2541 (1976) (codified at 17
U.S.C. §§ 101-808). In its place, Congress established a single
term for all copyrights created after January 1, 1978; the max-
imum 56-year term under the 1909 Act was replaced with a
term of the author’s life plus 50 years. 17 U.S.C. § 302(a).
Works published or registered before January 1, 1978 would
be protected for a maximum of 75 years from the date of pub-
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lication or 100 years from the date of creation, whichever was
less. 17 U.S.C. § 303.
On October 27, 1998, President Clinton signed into law the
Sonny Bono Copyright Term Extension Act of 1998
(“CTEA”), Pub. L. No. 105-298, 112 Stat. 2827 (1998) (codi-
fied at 17 U.S.C. §§ 108, 203, 301-304). As its name suggests,
the statute further expanded the term of copyright protection,
extending the term of all existing and future copyrights by a
period of 20 years. Specifically, Congress broadened the term
of copyright protection prospectively to works created after its
effective date from the life of the author plus 50 years to the
life of the author plus 70 years.1 17 U.S.C. §§ 302(a), 304(a)-
(b). The statute also enlarged the term of protection retroac-
tively to previously granted copyrights, extending their term
to a maximum of 95 years. Id.
One of the purposes of the CTEA was to harmonize our
copyright term with that of the European Union because,
without the change, U.S. authors would receive 20 fewer
years of protection than their European counterparts. See 141
Cong. Rec. S3390-92 (daily ed. Mar. 2, 1995) (statement of
Sen. Orrin Hatch); see also 141 Cong. Rec. E379 (daily ed.
Feb. 16, 1995) (statement of Rep. Carlos Moorhead). This
threatened to cost the United States vast amounts of revenue
and its favorable position in the global intellectual-property
market. See id. Another reason behind the extension was to
provide greater protections for authors and two succeeding
generations of their heirs. Sen. Orrin Hatch, Toward a Princi-
pled Approach to Copyright Legislation at the Turn of the
Millennium, 59 U. PITT. L. REV. 719, 733-34 (1998). The end
1In the case of a work made for hire — which is “prepared by an
employee within the scope of his or her employment or . . . specially
ordered or commissioned for use as a contribution to a collective work”
(17 U.S.C. § 101) — Congress extended the term of protection from 75
to 95 years from the year of the work’s first publication, or a term of 120
years from the year of its creation, whichever expires first. 17 U.S.C.
§ 304(a)-(b).
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result is that works that otherwise would have entered the
public domain, such as the works at issue in this litigation,
were protected for an additional 20 years. Thus, it appears that
no copyrighted work will enter the public domain for the next
13 years or so, until January 1, 2019.
B. Factual Background
In the 1920s, Alan Alexander Milne (“the author”) created
in his classic children’s books the characters of the boy Chris-
topher Robin and his stuffed bear, Winnie-the-Pooh, as well
as their friends Eeyore, Owl, Piglet, Rabbit, Kanga, Roo, and
Tigger. Four of those works are involved in this action: (1)
When We Were Very Young; (2) Winnie-the-Pooh; (3) Now
We Are Six; and (4) House at Pooh Corner (collectively,
“Pooh works”). U.S. copyrights in the Pooh works were regis-
tered between 1924 and 1928, and renewed between 1952 and
1956.2
Entranced by the then-newly published House at Pooh Cor-
ner, a New Yorker by the name of Stephen Slesinger boarded
a boat for England with the hope of persuading the author to
let him license the rights to the Pooh works for trade purposes
back home. Slesinger was a television-film producer, creator
of comic-book characters, and pioneer in the licensing of
characters for children.
In 1930, the author entered into an agreement with Sles-
inger, granting Slesinger exclusive merchandising and other
rights based on the Pooh works in the United States and Can-
ada “for and during the respective periods of copyright and of
any renewal thereof to be had under the Copyright Act[.]” In
return, the author received a share of royalty income earned
by Slesinger, ranging from three percent of wholesale sales to
67 percent of Slesinger’s receipts, as well as an advanced pay-
2The 1909 Copyright Act was in effect when the Pooh works were
copyrighted in the 1920s and upon their renewal in the 1950s.
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ment against those royalties. After the agreement’s execution,
Slesinger created defendant-appellee Stephen Slesinger, Inc.
(“SSI”), to which he transferred his rights in the Pooh works.
In 1956, the author passed away and was survived by his
widow and their son, Christopher Robin Milne. The author’s
will bequeathed all beneficial interests in the Pooh works to
a trust for the benefit of his widow during her lifetime
(“Milne Trust”), and, after her death, to other beneficiaries
(“Pooh Properties Trust”), which included his son, Christo-
pher, and Christopher’s daughter, Clare. Clare is the author’s
sole grandchild and the plaintiff-appellant in this case.
In 1961, SSI granted exclusively to Walt Disney Produc-
tions (“Disney”)3 the rights it had acquired in the 1930 grant,
and Disney agreed to pay certain royalties to SSI. Around the
same time, Disney also entered into a similar agreement with
the author’s widow and the Milne Trust, granting Disney
exclusive motion-picture rights, foreign-merchandising rights,
and other exclusive rights in the Pooh works in exchange for
royalties.
In 1971, the author’s widow passed away and, in 1972, her
beneficial interests under the Milne Trust were assigned to the
Pooh Properties Trust in accordance with the author’s will.
This meant that the Pooh Properties Trust would receive the
author’s copyright interest in the Pooh works plus the royal-
ties payable under the 1961 Milne-Disney agreement.
Then came the 1976 Copyright Act and, with it, an
extended renewal term of copyright protection. Pub. L. No.
94-553, 90 Stat. 2541, § 304(a) (1976). Most relevant to the
Pooh Properties Trust was the provision that gave the author
or his heirs an opportunity to benefit from the extended
renewal term. Id. Specifically, this new statute enabled an
3While Disney joined this case as a co-plaintiff in the proceedings
below, Disney is not a party to this appeal.
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author or his heirs to terminate a grant of rights to a copy-
righted work made by the author or his heirs to a third party
prior to the statute’s effective date of January 1, 1978. 17
U.S.C. § 304(c).
In 1983, faced with the possibility that Christopher might
seek to terminate the rights Disney had received in 1961 from
SSI, Disney proposed that the parties renegotiate the rights to
the Pooh works. Christopher accepted Disney’s proposal and,
using the bargaining power conferred by his termination right,
negotiated and signed on April 1, 1983 a more lucrative deal
with SSI and Disney that would benefit the Pooh Properties
Trust and its beneficiaries.
The new agreement acknowledged the 1930 grant and the
1961 assignment of rights to Disney, and observed that
although ownership of the copyrights had been transferred to
the Pooh Properties Trust, there were “disputes [which] had
existed[.]” Recognizing that the author’s heir, Christopher,
may well have a right of termination under the 1976 Copy-
right Act, the agreement declared that the parties were
resolved to “clarify certain aspects of their contractual
arrangements and to settle revised agreements.” Christopher
therefore agreed not to seek termination of the existing
arrangements in return for executing the new agreement. The
agreement then provided for the revocation of the 1930 and
1961 agreements in favor of the new agreement, followed by
the re-granting (on the same page) of the rights in the Pooh
works to SSI.4 In exchange for royalties, SSI turned around
and granted Disney the radio, television, motion-picture, and
merchandising rights to those works.
One result of the 1983 agreement was an increase of the
amounts that the Pooh Properties Trust received over the
4The 1983 agreement specifically stated: “The Trustees hereby assign,
grant, and set over unto [SSI] all of the rights in and to [the Pooh works]
which were transferred to [Slesinger by virtue of the 1930 grant.]”
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sums that had been payable under the 1961 Milne-Disney
agreement. The Pooh Properties Trust now received double
SSI’s share of the royalties, compared to about half of SSI’s
share before the 1983 agreement. Thus, the renegotiations
between the parties resulted, by some estimates, in a net gain
of hundreds of millions of dollars to the Pooh Properties
Trust, which included Clare as a prime beneficiary.
On November 4, 2002, motivated by the recent enactment
of the CTEA and its favorable treatment of authors’ heirs,
Clare set out to recapture the rights to the Pooh works.
Toward that end, she served SSI with a notice of termination,
which referenced November 5, 2004 as the effective date for
termination of the 1930 grant of rights to SSI. The same day
that she served the termination notice, Clare entered into an
agreement with Disney, assigning the rights expected to revert
to her in 2004.5
C. Procedural Background
On November 5, 2002, the day after she served the termina-
tion notice, Clare joined by Disney, commenced this action in
the district court, seeking a declaration that her termination
notice was valid and effectively terminated SSI’s rights in the
Pooh works. Thereafter, SSI filed a motion for judgment on
the pleadings or, alternatively, for summary judgment. SSI
asserted, inter alia, that Clare’s termination notice was invalid
because the 1930 grant of rights targeted by the termination
notice had already been revoked under the 1983 agreement,
and therefore was no longer in existence and not subject to
statutory termination under the CTEA. In turn, Clare filed a
cross-motion for summary judgment, seeking a declaration
that the termination notice was valid and that SSI’s rights in
the Pooh works would terminate on November 5, 2004.
5Under Clare’s reversion agreement with Disney, Disney agreed to fund
the instant litigation for her.
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On May 8, 2003, the district court issued an order granting
in part and denying in part SSI’s motion, and denying Clare’s
cross-motion. In essence, the district court declared the termi-
nation notice to be invalid by ruling in SSI’s favor regarding
Clare’s declaratory-relief claim.6
Clare subsequently moved the district court to enter a final
judgment under Federal Rule of Civil Procedure 54(b)
because all claims related to her had been resolved. The dis-
trict court eventually granted Clare’s motion, and entered
judgment as to Clare on December 6, 2004. She filed a timely
appeal from that judgment. See FED. R. APP. P. 4(a).
D. The District Court’s May 8, 2003 Order
When considering the parties’ motions, the district court
asked the question that lies at the very heart of the parties’
dispute: “Should the 1983 SSI Agreement be treated as a pre-
1978 agreement to be governed by the [CTEA’s] termination
provisions of 17 U.S.C. § 304?” Answering the question in
the negative, the district court held that the parties’ 1983
agreement itself revoked the grant of rights under the 1930
agreement that Clare’s notice sought to terminate, and that the
grant made to SSI under the 1983 agreement was not subject
to termination under the CTEA. In reaching its ruling, the dis-
trict court rejected Clare’s argument that the 1983 agreement
was merely an extension of the 1930 grant. The court further
reasoned that the CTEA’s termination provisions apply only
to grants made prior to 1978. The court also opined that the
Copyright Acts did not alter the power of private parties to
contract and that the 1983 agreement “was created in order to
6Other issues were left pending in the district court. For example, the
court had yet to rule on the validity of a copyright termination notice
served by the granddaughter of the Pooh works’ illustrator. Also before
the court was SSI’s declaratory-relief counterclaim, asserting that Disney
was obligated to pay royalties to SSI. Those further proceedings are not
at issue in this appeal.
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protect SSI and Disney from a termination of the rights
granted to them.”
In addition, the district court was not persuaded by Clare’s
argument that “a grantee may not subvert the statutory rule
against obtaining a new grant prior to termination of the origi-
nal grant . . . unless there is at least a moment [of freedom]
when the grantor is bound under neither the prior nor the new
grant.” The court noted that although “§ 304(c)(5) [and]
§ 203(a)(5) . . . provide that termination of a grant may be
effected ‘notwithstanding any agreement to the contrary,’ . . .
[s]ection 304 does not apply[ ] because this is a post-1978
agreement, and § 203 does not apply[ ] because the grant in
question was not made by the author” (quoting 17 U.S.C.
§§ 203(a)(5), 304(c)(5)). Thus, the court concluded that the
1983 agreement was a new contract, effective after January 1,
1978, and that Clare’s termination notice was invalid.
II
This court reviews de novo an award of judgment on the
pleadings. Turner v. Cook, 362 F.3d 1219, 1225 (9th Cir.
2004); Underwood Cotton Co., Inc. v. Hyundai Merch.
Marine, Inc., 288 F.3d 405, 407 (9th Cir. 2002). “ ‘A judg-
ment on the pleadings is properly granted when, taking all the
allegations in the pleadings as true, the moving party is enti-
tled to judgment as a matter of law.’ ” Owens v. Kaiser
Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001)
(quoting Nelson v. City of Irvine, 143 F.3d 1196, 1200 (9th
Cir. 1998)).
A. Right of Termination Under the CTEA
Clare argues that she properly terminated SSI’s rights in the
Pooh works. We hold that the district court’s contrary conclu-
sion is correct.
In a copyright case, as in most cases, the language of the
statute provides the starting point for our analysis. Cmty. for
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Creative Non-Violence v. Reid, 490 U.S. 730, 739 (1989);
Mills Music, Inc. v. Snyder, 469 U.S. 153, 164 (1985). The
CTEA provides in relevant part:
In the case of any copyright other than a work made
for hire, subsisting in its renewal term on the effec-
tive date of the Sonny Bono Copyright Term Exten-
sion Act [effective October 27, 1998] for which the
termination right provided in subsection (c) [of this
section] has expired by such date, where the author
or owner of the termination right has not previously
exercised such termination right, the exclusive or
nonexclusive grant of a transfer or license of the
renewal copyright or any right under it, executed
before January 1, 1978, by any of the persons desig-
nated in subsection (a)(1)(C) of this section, other
than by will, is subject to termination. . . .
17 U.S.C. § 304(d) (emphasis added).
Although Clare’s termination notice purports to terminate
the 1930 grant under the CTEA (section 304(d)), that statute
provides a termination right to only those transfers or licences
“executed before January 1, 1978[.]” Id. (emphasis added).
The only pre-1978 grant of rights to SSI, and the only grant
to SSI specified in the termination notice, was the 1930 grant
made by the author to Slesinger. The 1930 grant, however,
was terminated by the beneficiaries of the Pooh Properties
Trust upon the execution of the 1983 agreement. Accordingly,
there was no pre-1978 grant of rights to SSI in existence when
Congress enacted the CTEA in 1998.
The sole grant of rights to SSI, either at the time of the
CTEA’s enactment or when Clare served her termination
notice, was the grant of rights embodied in the 1983 agree-
ment. As the district court correctly explained, however, this
grant is not subject to termination under section 304(d)
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because it was not “executed before January 1, 1978,” as the
statute expressly requires. 17 U.S.C. § 304(d).
1. “Agreement to the Contrary”
[1] Faced with the reality that she is dealing with a post-
1978 agreement, Clare attempts to circumvent the 1983 agree-
ment by claiming that another provision of the CTEA, 17
U.S.C. § 304(c)(5), requires this court to regard the 1983
agreement as an “agreement to the contrary” that does not
prevent her from terminating SSI’s rights to the Pooh works.
Section 304(c)(5) states that a “[t]ermination . . . may be
effected notwithstanding any agreement to the contrary,
including any agreement to make a will or to make any future
grant.” 17 U.S.C. § 304(c)(5).
[2] The statute does not define the phrase “agreement to the
contrary,” although it does provide two examples of agree-
ments that would constitute an “agreement to the contrary”:
“an agreement to make a will” and an agreement “to make
any future grant.” Id. The undisputed fact that the 1983 agree-
ment does not fall into either category supports the district
court’s finding that the 1983 agreement is not “an agreement
to the contrary.” See Sutton v. Providence St. Joseph Med.
Ctr., 192 F.3d 826, 834 (9th Cir. 1999) (“When a statute con-
tains . . . specific items and a general item, we usually deem
the general item to be of the same category or class as the
more specifically enumerated items.”).
To support her theory that the 1983 agreement falls under
the category of “an agreement to the contrary,” Clare reads
the Supreme Court’s decision in Stewart v. Abend, 495 U.S.
207 (1990), as holding that Congress intended to make the
termination right inalienable for authors and their families.
Stewart, however, did not interpret the “agreement to the con-
trary” language of section 304(c)(5) or its counterpart under
section 203(a)(5).7 In fact, the only discussion in Stewart per-
7Apart from other differences, the counterpart provision found under
section 203 covers transfers effected on or after January 1, 1978, whereas
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taining to inalienability is the Court’s relatively brief portrayal
of the evolution of copyright law, beginning with the Copy-
right Act of 1790 and ending with the 1976 Copyright Act.
See 495 U.S. at 230 (noting only that “[t]he 1976 Copyright
Act provides a single, fixed term, but provides an inalienable
termination right”) (citing 17 U.S.C. § 203). Accordingly,
Stewart does not support the broad “plain meaning” that Clare
attributes to section 304(c)(5).
Clare also relies on the Second Circuit’s decision in Marvel
Characters, Inc. v. Simon, 310 F.3d 280 (2d Cir. 2002), to
support her claim that the 1983 agreement is an “agreement
to the contrary” under section 304(c)(5). The contract at issue
there was a settlement agreement between the parties, which
ended a series of lawsuits filed in the 1960s by the creator of
a copyrighted work. Id. at 283-84. The creator argued that the
settlement agreement should not be given effect because it
contractually changed the nature of the copyrighted work,
labeling it as a “work made for hire” many years after its cre-
ation. Id. at 284-85. The effects of this after-the-fact label
were to make the creator an “employee for hire” rather than
the author of the copyrighted work, and to foreclose his right
to terminate the grant he had made in the copyrighted work.
Id. at 283-84. Thus, unlike the issue presented in the case at
bar, the issue facing the Second Circuit was “whether
§ 304(c)(5)’s phrase ‘any agreement to the contrary’ includes
a settlement agreement stating that a work was created for
hire[.]” Id. at 290 (quoting 17 U.S.C. § 304(c)(5)).
After examining the legislative history and considering the
purpose of section 304(c), the court concluded “that an agree-
ment made subsequent to a work’s creation which retroac-
tively deems it a work for hire constitutes an agreement to the
contrary under § 304(c)(5) of the 1976 Act.” Id. at 292 (inter-
section 304(c) covers transfers before that date. 17 U.S.C. §§ 203(a),
304(c).
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nal quotation marks omitted). The Second Circuit held that an
employer cannot contractually transform a creator or author of
a copyrighted work into an “employee for hire.” Id. The court
expressed concern that if it held otherwise, works not satisfy-
ing the relationship-based “for hire” test could be coerced by
post-facto agreements that designate such works to be some-
thing they are not: “works for hire.” Id. at 291-92.
The facts, reasoning, and holding of Marvel have little rele-
vance to this case because, here, there is no after-the-fact
attempt to recharacterize the work or a prior agreement.
Instead, the 1983 agreement involves contractual provisions
that operated prospectively through the revocation of an exist-
ing grant and the making of a new one. As the district court
recognized, “[t]he parties in the 1983 [a]greement did not
attempt to change or modify the nature of their association
with one another, or alter the character of their long-standing
author/grantee relationship.”
Reinforcing this reasoning are the undisputed facts that the
1930 grant was expressly revoked by the Pooh Properties
Trust, which made a new grant of rights to SSI that, inter alia,
was more lucrative for the author’s heirs. The fact that the
1983 agreement was meant to protect the continuing viability
of the author’s grant of rights to SSI is evident from the agree-
ment itself. In that vein, it is important to note that the parties
describe their 1983 agreement as a “new agreement for the
future which the parties believe would not be subject to any
right of termination under 17 U.S.C. Secs. 203 or 304(c)”
(emphasis added).
Neither Marvel nor any other of Clare’s cited authority sup-
plies a basis for us to question the district court’s decision or
to undo the 1983 agreement, which was freely and intelli-
gently entered into by the parties.8 The beneficiaries of the
8Also not well taken is Clare’s citation of Rano v. Sipa Press, Inc., 987
F.2d 580 (9th Cir. 1993), to support her perspective that section 304(c)
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Pooh Properties Trust were able to obtain considerably more
money as a result of the bargaining power wielded by the
author’s son, Christopher, who was believed to own a statu-
tory right to terminate the 1930 grant under section 304(c) of
the 1976 Copyright Act. Although Christopher presumably
could have served a termination notice, he elected instead to
use his leverage to obtain a better deal for the Pooh Properties
Trust. His daughter, Clare, was a beneficiary of this new
arrangement, and her current dissatisfaction provides no rea-
son to discredit the validity of the 1983 agreement and the
rights conferred thereby.
2. Legislative History of Section 304(c)
The district court stated there was nothing wrong with the
fact that “the 1983 [a]greement was created in order to protect
SSI and Disney from a termination of the rights granted to
them.” Relying on legislative history, the district court read
the House Report for the 1976 Copyright Act as confirming
the rule that “[n]othing in the Copyright Acts has altered the
preempts any right Christopher had in contracting for the termination of
the 1930 grant. Based on Rano, she argues that the 1983 agreement did not
produce an effective termination because the Pooh Properties Trust did not
utilize the statutory termination procedure in place under section 304(c) of
the 1976 Copyright Act. This overlooks the fact that Rano did not address
the effectiveness of a party’s purported exercise of a statutory termination
right under section 304(c). The Rano court only held that the existence of
such a statutory termination mechanism in section 203(a)(5) preempts a
California common-law rule permitting the unilateral termination at will
of an agreement that has a non-specified duration. 987 F.2d at 585-86.
Whatever views one may have regarding the correctness of the narrow
holding of Rano, it cannot be said that Rano suggests a ruling that would
nullify a mutual decision to revoke a grant of rights. See Scholastic
Entm’t, Inc. v. Fox Entm’t Group, Inc., 336 F.3d 982, 988 n.2 (9th Cir.
2003) (observing that “Rano has been called into serious question by
courts as well as commentators”). Moreover, Rano’s narrow facts have no
application here, where the 1930 grant expressly provided for its duration.
See Rano, 987 F.2d at 583, 585 (emphasizing the fact that the subject
agreement was one without a specified duration).
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power of private parties to contract.” H.R. REP. NO. 94-1476,
94th Cong., 2d Sess. (1976), reprinted in 1976 U.S.C.C.A.N.
5659, 5743.
Clare criticizes the district court’s approach to statutory
construction, arguing that section 304(c)’s meaning is clear on
its face and that there was no need for the district court to
consider legislative history. She maintains that the district
court used legislative history to override the statute itself.
[3] We disagree. Section 304(c)(5) states that
“[t]ermination . . . may be effected notwithstanding any agree-
ment to the contrary, including an agreement to make a will
or to make any future grant.” 17 U.S.C. § 304(c)(5). As we
have noted, the phrase “agreement to the contrary” is unclear.
Even Clare agrees that the phrase is not defined by the statute,
and the Second Circuit has expressly found the phrase ambig-
uous and that an analysis of legislative history is required to
glean its meaning. Marvel, 310 F.3d at 290; accord Walthal
v. Rusk, 172 F.3d 481, 484 (7th Cir. 1999) (reviewing legisla-
tive history upon concluding that section 304(c)(5)’s counter-
part termination provision under section 203 “is not perfectly
clear”). This court has recognized that when a statute’s termi-
nology is not clear on its face, it is appropriate to seek guid-
ance in the legislative history. In re BCE West, L.P., 319 F.3d
1166, 1171 (9th Cir. 2003); see also United States v. Buck-
land, 289 F.3d 558, 565 (9th Cir. 2002) (“Where the language
is not dispositive, we look to the congressional intent revealed
in the history and purposes of the statutory scheme.” (internal
quotation marks omitted)).
[4] As Clare concedes, a review of the legislative history
turns up nothing to support her contention that she may termi-
nate SSI’s rights in the Pooh works on the theory that the
1983 agreement is an “agreement to the contrary.” On the
contrary, Congress specifically stated that it did not intend for
the statute to “prevent the parties to a transfer or license from
voluntarily agreeing at any time to terminate an existing grant
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and negotiating a new one[.]” H.R. REP. NO. 94-1476 at 127;
1976 U.S.C.C.A.N. at 5743.9 Congress further stated that
“nothing in this section or legislation is intended to change the
existing state of the law of contracts concerning the circum-
stances in which an author may terminate a license, transfer
or assignment.” H.R. REP. NO. 94-1476 at 142; 1976
U.S.C.C.A.N. at 5758. Congress therefore anticipated that
parties may contract, as an alternative to statutory termination,
to revoke a prior grant by replacing it with a new one. Indeed,
Congress explicitly endorsed the continued right of “parties to
a transfer or license” to “voluntarily agree[ ] at any time to
terminate an existing grant and negotiat[e] a new one.” H.R.
REP. NO. 94-1476 at 127; 1976 U.S.C.C.A.N. at 5743.
The rationale behind the legislation was to “safeguard[ ]
authors against unremunerative transfers” and improve the
“bargaining position of authors” by giving them a second
chance to negotiate more advantageous grants in their works
after the works had been sufficiently “exploited” to determine
their “value.” H.R. REP. NO. 94-1476 at 124; 1976
U.S.C.C.A.N. at 5740. Congress sought to foster this purpose
by permitting an author’s heirs to use the increased bargaining
power conferred by the imminent threat of statutory termina-
tion to enter into new, more advantageous grants. This is
exactly what Christopher and the other beneficiaries of the
Pooh Properties Trust did in 1983.
9To the extent that the legislative record references section 304(c)(5)’s
counterpart provision under section 203(a)(5), we find that history instruc-
tive given Congress’s use of identical language in both provisions. See
Gustafson v. Alloyd Co., 513 U.S. 561, 570 (1995) (recognizing that
“ ‘identical words used in different parts of the same act are intended to
have the same meaning’ ” under the “ ‘normal rule of statutory construc-
tion’ ” (quoting Dep’t of Revenue of Or. v. ACF Indus., Inc., 510 U.S. 332,
342 (1994))); see also Batjac Prods., Inc. v. Goodtimes Home Video
Corp., 160 F.3d 1223, 1228 (9th Cir. 1998) (supporting the “ ‘basic canon
of statutory construction that identical terms within an Act bear the same
meaning’ ” (quoting Estate of Cowart v. Nicklos Drilling Co., 505 U.S.
469, 479 (1992))).
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[5] After more than 50 years of advancement of the Pooh
works in the marketplace, their value was sufficiently demon-
strated, and the 1976 Copyright Act provided Christopher a
window for termination. The Pooh Properties Trust recog-
nized the perceived right to terminate as a valuable bargaining
chip, and used it to obtain an advantageous agreement that
doubled its royalty share relative to SSI’s share. Thus, the
1983 agreement exemplifies the increased bargaining power
that Congress intended to bestow on authors and their heirs by
creating the termination right under the 1976 Copyright Act.
As the 1983 agreement appears to be the type expressly con-
templated and endorsed by Congress, we do not consider it to
be a prohibited “agreement to the contrary” under section
304(c)(5).
In addition, Clare attempts to conjure up a proverbial “pa-
rade of horrors” that she believes would result were we to
uphold the parties’ exercise of free will to enter into the 1983
contract. She argues that judicial recognition of the 1983
agreement “ ‘would provide a blueprint by which publishers
could effectively eliminate an author’s termination right’ ”
(quoting Marvel, 310 F.3d at 291). The strength of a proposed
parade of horrors, however, lies “in direct proportion to (1)
the certitude that the provision in question was meant to
exclude the very evil represented by the imagined parade, and
(2) the probability that the parade will in fact materialize.”
Harmelin v. Michigan, 501 U.S. 957, 986 n.11 (1991) (Scalia,
J., concurring). The application of these factors here shows
that Clare’s imagined parade will never march forward. Clare
presents no authority suggesting that Congress designed the
statutory termination provisions to prevent parties from agree-
ing to a simultaneous revocation and new grant of rights. Cer-
tainly with regard to the instant case, Clare’s concerns are
unfounded. The 1983 agreement came about some seven
years after the copyright owner felt empowered to exercise his
right of termination under the 1976 Copyright Act, and after
he was able to assess the works’ value over the course of
more than five decades. Far from resulting in a termination of
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the grantee’s rights, the 1983 agreement resulted in an
increased royalty stream to the author’s heirs — the very
result envisioned by Congress when it enacted the termination
provisions.
B. “Moment of Freedom”
Clare also advances the theory that the 1983 agreement did
not serve to revoke the 1930 grant to Slesinger because no
“moment of freedom” was built in between the agreement’s
simultaneous revocation and re-granting of rights in the Pooh
works. She claims that section 304(c)(6)(D) requires such a
“moment of freedom” before a re-grant of rights may take
place, and that without such a moment of freedom, the 1983
agreement is nothing more than an amendment to the original
1930 agreement, one that is terminable under the CTEA.
Section 304(c)(6)(D) reads as follows:
A further grant, or agreement to make a further
grant, of any right covered by a terminated grant is
valid only if it is made after the effective date of the
termination. As an exception, however, an agree-
ment for such a further grant may be made between
the author . . . and the original grantee or such grant-
ee’s successor in title, after the notice of termination
has been served. . . .
17 U.S.C. § 304(c)(6)(D) (emphasis added). This provision
sets forth the proper timing mechanism for grants and agree-
ments to make grants where the statutory termination under
section 304(c)(5) has been exercised. Id. But Clare does not
contend and cannot contend that in 1983 anyone exercised a
statutory right of termination with respect to the Pooh works.
Clare’s sole support for her position is found in a treatise
authored by the late-Professor Melville Nimmer. In his trea-
tise, Professor Nimmer expressed his assumption that this
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subsection — which on its face applies only to the statutory
termination of a prior copyright grant — is intended to benefit
authors and should therefore be extended to prohibit a simul-
taneous contractual termination and re-grant of copyright
rights. See 3 M. NIMMER, NIMMER ON COPYRIGHT § 11.07 (6th
ed. 1978). Clare’s counsel, however, conceded at oral argu-
ment that no source of primary authority has endorsed this
assumption. We too decline to do so.
[6] Congress included the general rule in section
304(c)(6)(D) — prohibiting a new grant of rights terminated
by statute until after the effective date of termination — to
avoid trafficking in future interests by third parties, which
would deprive the original grantee of the opportunity to nego-
tiate a further transfer. H.R. REP. NO. 94-1476 at 127; 1976
U.S.C.C.A.N. at 5743. The exception to this rule provides that
once a notice of termination is served, the original grantee or
his successor-in-title, here SSI, is the only party to whom the
author (or author’s heir) may promise a future grant, and is
therefore similarly intended to give the original grantee a
competitive advantage over third parties (like co-plaintiff Dis-
ney) who wish to obtain the rights covered by the terminated
grant. See id. (stating that the exception is “in the nature of a
right of ‘first refusal’ ” in the original grantee’s favor). Thus,
contrary to Clare’s view, section 304(c)(6)(D) was not
intended to protect the author or his heirs, but was instead
intended to protect licensees, such as SSI.
[7] We note that the district court reasonably posited that
if Congress intended to require a “moment of freedom,” it
would have clearly said so. After all, such an implied condi-
tion is difficult to harmonize with the statute’s purpose of
benefitting the original grantee or with other provisions of
Title 17. For example, three other statutory provisions require
advance notice of termination to be served at least two years
before the effective date of the termination. 17 U.S.C.
§§ 203(a)(4)(A), 304(c)(4)(A), 304(d)(1).10 During the two-
10These provisions themselves intend to benefit the original grantee, as
they ensure that the original grantee will have adequate notice of the
impending loss of rights.
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year period between service of the notice and the termina-
tion’s effective date, the original grant remains in effect so
that the holder of the termination right is no freer to walk
away from the to-be-terminated grant than he was before he
served the notice. Thus, contrary to the argument advanced by
Clare and the Nimmer treatise, section 304(c)(6)(D) does not
require a “moment of freedom” between termination of a
grant and the creation of a new grant in its place because it
allows the author or his heirs to enter into a binding agree-
ment with the original grantee after service of the termination
notice but before its effective date.
Even assuming that Congress intended such a “moment of
freedom” between a contractual revocation and re-grant of
rights, we note that Christopher’s ability to exercise his per-
ceived termination right gave him all the freedom he needed
to refrain from entering into a new grant of copyright rights
to SSI. He parlayed that right into a new agreement giving
increased compensation to the Pooh Properties Trust, of
which Clare is a prime beneficiary. In doing so, he fulfilled
the very purposes for which Congress enacted the termination
right. Thus, it defeats common sense to suggest that he needed
to take a walk around the block between the time he revoked
the old agreement and entered into the new one.
Moreover, still assuming a preference for a moment of free-
dom, there is nothing to suggest that the parties would have
come to any other decision than the one they reached. There
is absolutely nothing in the record that would show that the
beneficiaries of the Pooh Properties Trust were prejudiced in
any way by the 1983 agreement. At bottom, Clare contends
that the 1983 agreement did not give her as much money as
she would like to receive. Such a position, however, does not
amount to a viable termination right under the CTEA.
III
[8] For the foregoing reasons, the district court correctly
declared Clare’s termination notice ineffective. The CTEA’s
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termination provision does not apply to post-1978 agreements
such as the parties’ 1983 agreement, which continues to con-
trol the parties’ rights and royalty shares in the Pooh works.
In addition, Clare is unable to show that the 1983 agreement
constitutes an “agreement to the contrary” under section
304(c)(5), and thus the courts cannot disregard the 1983
agreement. Nor are we persuaded by Clare’s “moment of free-
dom” argument. Quite simply, there is no principle of logic,
canon of statutory construction, or consideration of fairness
that supports Clare’s reading of the CTEA. Accordingly, the
decision of the district court is AFFIRMED.
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