Markham Concepts v. Hasbro, 1 F.4th 74

In 1959 Rueben Klamer conceived a modernized version of "The Game of Life" and engaged game-designer Bill Markham (and his firm) to design and build a prototype quickly for a Milton Bradley pitch.
Klamer visited Markham’s shop frequently; artists Grace Chambers and Leonard Israel constructed and illustrated the prototype; Sue Markham drafted the rulebook.
Link Research (co-founded by Klamer and Art Linkletter) granted Milton Bradley an exclusive license and received a $5,000 advance plus royalties; Link Research also obtained an assignment from Markham that recited Markham had “invented, designed and developed” the game and assigned his rights to Link.
Milton Bradley published the game in 1960, registered copyrights (naming Milton Bradley as author), and the game became commercially successful; disputes later arose over who held authorship and termination rights.
Plaintiffs (Markham’s successors) sued for a declaration that they hold termination rights under the 1976 Act; defendants argued the game was a work for hire under the 1909 Act.
The district court found the game was a work made for hire under the 1909-era "instance and expense" test (Klamer provided the instance and bore the expense); the First Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Applicability of the 1909 "instance and expense" test post-Reid	Reid requires agency factors; instance & expense should not apply to 1909 commissioned works	Forward controls; instance & expense remains binding for 1909-act works	The panel held Forward binding; instance & expense test applies to works governed by the 1909 Act
Whether Klamer bore the expense (expense prong)	Markham/Successors: expense was not Klamer's; Milton Bradley bore financial risk after acquisition	Defendants: Klamer promised to pay Markham's costs and bore downside during prototype development	Court found Klamer bore the primary expense/risk when the prototype was made; expense prong satisfied
Whether the assignment agreement rebutted the work-for-hire presumption	Markham: assignment language reserved copyright/indicated Markham’s ownership and therefore rebuts presumption	Defendants: the agreement assigns whatever Markham "may be entitled to" and contains no clear contemporaneous reservation	The agreement did not contain the clear, specific contemporaneous reservation required to overcome the presumption; presumption stands
Discovery ruling on late supplemental interrogatory responses and motion to strike	Plaintiffs: defendants introduced a new alternative theory late and plaintiffs were prejudiced	Defendants: no substantial prejudice; plaintiffs could cross-examine and impeach at trial	District court did not abuse discretion; no substantial prejudice shown

Bleistein v. Donaldson Lithographing Co., 188 U.S. 239 (1903) (early recognition that employer can be treated as author for works made within scope of employment)
Mills Music, Inc. v. Snyder, 469 U.S. 153 (1985) (termination provisions permit authors to rescind prior grants made before true value was known)
Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) (employee status under the 1976 Act is governed by general agency-law principles)
Forward v. Thorogood, 985 F.2d 604 (1st Cir. 1993) (applied the 1909-era instance and expense test to determine work-for-hire status)
Marvel Characters, Inc. v. Kirby, 726 F.3d 119 (2d Cir. 2013) (explains expense inquiry and that a presumption of work-for-hire from instance and expense can be rebutted by clear contemporaneous agreement)