Effects Associates, Inc. v. Cohen
908 F.2d 555 (9th Cir. 1990)
Cohen wrote, directed, and
produced a horror movie. He hired Effects to film some special effects to
be edited into the movie.
The deal was made orally,
and there was no discussion of who would retain the copyright on the
special effects footage.
Cohen was unhappy with
Effect's work and paid them only half the amount he'd agreed to, although
he used the footage in his movie anyway. When the movie was released,
Effects sued for copyright infringement.
Effects argued that there
was no written agreement, and no assignment of rights.
17 U.S.C. §204(a) requires that all assignments of copyright
must be in writing.
Cohen argued that regardless
of what §204(a) says, the
industry standard in the movie business was to have oral agreements.
The Trial Court found for
Cohen. Effects appealed.
The Trial Court found that
Effects had given Cohen an implied license to use the footage.
The Trial Court suggested
that Effects sue Cohen in State court for breach of contract.
The Appellate Court affirmed.
The Appellate Court found
that §204(a) only applies to an exclusive
license (where Effects assigns all interest in the footage to
The Court found that a nonexclusive
license to use the footage doesn't
require a written agreement because it doesn't fall within §204(a).
The Court found that since
Effects made the footage to Cohen's specifications and gave it to him,
there was an implied license to use it. Since Effects couldn't give an
implied exclusive license, they
must have just given Cohen a nonexclusive license.
That means that Effects was
free to sell the footage to other people for use in other movies (if
that's worth anything).