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 Cohen).
      • 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).