355 F. Supp. 3d 119
D.R.I.2019Background
- In 1959 toy developer Reuben Klamer conceived an updated Game of Life and hired Bill Markham's firm (CPD) to build a prototype; CPD employees Grace Chambers and Leonard Israel physically constructed the board, box art, and components, and Markham's wife Sue transcribed the rules.
- Klamer paid CPD's costs (billing $2,423.16) and promised to cover expenses even if Milton Bradley passed; he also negotiated a License with Milton Bradley (which paid a $5,000 advance to Link Research) and retained promotional involvement via Art Linkletter.
- Markham assigned his rights to Link (the Assignment Agreement) and received a share of Link's negotiated royalties; the Agreement described Markham as the Game’s "inventor, designer and developer" and contemplated assignment of any copyright he might hold.
- Milton Bradley modified the prototype, manufactured, published the Game of Life in 1960, and registered copyrights identifying Milton Bradley as author; the Game became commercially successful and is now exploited by Hasbro.
- Markham’s heirs sued under 17 U.S.C. § 304(c) seeking a declaratory judgment that they hold termination rights (i.e., that the Game was not a work made for hire). The district court held a bench trial and found the prototype was made at Klamer’s instance and expense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Game prototype was a "work made for hire" under pre-1978 law (1909 Act) | Markham's heirs: Markham/CPD were creators; Assignment shows Markham as inventor/designer so termination applies | Hasbro/Klamer: Prototype was created at Klamer’s instance and expense, so it was a commissioned work for hire and not subject to termination | Held: Prototype was made at Klamer’s instance and expense; thus a work for hire and §304(c) termination does not apply |
| Whether Klamer provided the requisite "instance" (control/impetus) | Plaintiffs: Markham led creation and directed CPD employees | Defendants: Klamer conceived, selected CPD, supervised, visited frequently, and directed changes | Held: Klamer provided impetus and exercised supervisory control; "instance" satisfied |
| Whether Klamer bore the "expense" (financial risk) of creation | Plaintiffs: Royalty-sharing with Markham indicates CPD bore some risk | Defendants: Klamer paid CPD costs, advanced funds, and bore risk if Milton Bradley declined; royalties do not negate expense test | Held: Klamer bore the financial risk; "expense" satisfied |
| Effect of the Assignment Agreement language calling Markham the "inventor, designer and developer" | Plaintiffs: Agreement shows Markham intended to be author and retains rights | Defendants: Contract language cannot override actual instance-and-expense reality | Held: The Agreement’s description is insufficient to rebut the presumption that the commissioning party (Klamer) was the author under the 1909 Act |
Key Cases Cited
- Mills Music, Inc. v. Snyder, 469 U.S. 153 (U.S. 1985) (purpose of termination rights is to give authors a second chance to renegotiate grants)
- Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (U.S. 1989) (work-for-hire contours require factual inquiry into relationship)
- Forward v. Thorogood, 985 F.2d 604 (1st Cir. 1993) (adopting instance-and-expense test under pre-1978 law)
- Brattleboro Publ’g Co. v. Winmill Publ’g Corp., 369 F.2d 565 (2d Cir. 1966) (instance-and-expense formulation)
- Lin-Brook Builders Hardware v. Gertler, 352 F.2d 298 (9th Cir. 1965) (commissioning party treated as author when work done at its instance and expense)
- Marvel Characters, Inc. v. Kirby, 726 F.3d 119 (2d Cir. 2013) (instance test focuses on inducement, supervision, and creative contribution)
- Twentieth Century Fox Film Corp. v. Entm’t Distrib., 429 F.3d 869 (9th Cir. 2005) (expense test examines who bore financial risk of work’s success)
- Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213 (2d Cir. 1972) (power to accept, reject, or modify supports work-for-hire finding)
- Playboy Enters. v. Dumas, 53 F.3d 549 (2d Cir. 1995) (use of royalties as payment weighs against work-for-hire but is not conclusive)