2. Milne and Steinbeck:
A Quick Summary
• Milne:
• In 1930 A.A. Milne granted to Stephen Slesinger, Inc. (“SSI”) the merchandizing rights in
Winnie the Pooh.
• Those rights would have been terminable in 1986 pursuant to §304(c).
• To forestall termination, SSI’s assignee, Disney, proposed a new agreement to Milne’s
son and sole statutory heir, Christopher, and to the Pooh Trust, the beneficial owner of
the Winnie the Pooh copyrights.
• In 1983, without a §304(c) notice of termination ever having been served, the Trust and
Christopher, “using the bargaining power conferred by his termination right,” entered
into an agreement that forfeited his right of termination, revoked A.A. Milne’s prior
grants and re-granted the rights to SSI, resulting “in a net gain of hundreds of millions”
to the Trust.
• In 2002, Clare Milne, Christopher’s only child and by then A.A. Milne’s sole statutory
heir, served notice of termination pursuant to §304(d), arguing that the 1983 re-grant
was an invalid “agreement to the contrary,” and that therefore §304(d) termination was
still available.
• HELD:
• 1983 agreement was not an “agreement to the contrary.”
• Copyright owner negotiated that agreement while “empowered” by his termination
rights.
• “Far from resulting in a termination of 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.”
3. Milne and Steinbeck:
A Quick Summary
• Steinbeck:
• John Steinbeck died in 1968, leaving all his copyrights to his third wife, Elaine, and only
one-time, lump-sum cash bequests to his sons by a former marriage, John IV and
Thomas.
• In 1994, Elaine, then controlling 50% of John Steinbeck’s termination right (with John IV
& Thomas controlling the other 50%), but without a §304(c) notice ever having been
served, entered into a comprehensive new publishing agreement with Penguin that
canceled and superseded John Steinbeck’s pre-1978 grants.
• The new agreement substantially increased the guaranteed annual advance and
royalties paid by Penguin.
• At the time Elaine made the new agreement, the right to terminate under §304(c) had
already expired for some of Steinbeck’s works.
• Elaine died in 2003, and in 2004 Thomas and the by-then deceased John IV’s
theretofore unknown daughter, Blake, served termination notices under §304(d),
arguing that the 1994 agreement was an invalid “agreement to the contrary.”
• HELD:
• 1994 agreement was not an “agreement to the contrary.”
• “Elaine Steinbeck did renegotiate and cancel the 1938 Agreement while wielding
the threat of termination. Indeed, this kind of renegotiation appears to be exactly
what was intended by Congress.” (Emphasis supplied.)
4. In the 9th Circuit Since Milne
Classic Media Inc. v. Mewborn 532 F.3d 978 (2008)
• In 1976, before enactment of the Copyright Act, Mewborn, one of the daughters of the
creator of Lassie, assigned away her renewal-term share of the motion picture, television
and radio rights for $11,000.
• In 1978, she ratified her 1976 agreement and granted away additional merchandizing and
publishing rights for another $3,000.
• In 1996, Mewborn – by then apparently the only surviving statutory heir – served notice to
terminate under §304(c).
• In 2004, Mewborn served a cease-and-desist letter when she learned that the plaintiff
Classic Media was planning a new Lassie Come Home movie, which prompted Classic to file
a declaratory-judgment suit to determine ownership of the rights.
• Classic argued that the 1978 agreement, which ratified the 1976 assignment of motion
picture, television and radio rights, ended Mewborn’s §304(c) termination rights under the
precedent of Milne.
5. In the 9th Circuit Since Milne
Classic Media Inc. v. Mewborn 532 F.3d 978 (2008)
• HELD:
• “[I]nsofar as Classic urges us to hold that the 1978 Assignment transferred the motion
picture, television and radio rights subject to Mewborn’s termination rights, we cannot
so hold because such an assignment would be void as an “agreement to the contrary”
pursuant to §304(c)(5).”
• The court distinguished Milne as a case where the heir could have exercised the
termination right “at any moment,” and used that leverage to negotiate a much more
remunerative deal, thus having presented a situation “tantamount to following the
statutory formalities, and achiev[ing] the exact policy objectives for which §304(c)
was enacted.”
• In contrast, Mewborn made her 1978 agreement six years before she could have even
served a §304(c) notice, and she accordingly “had nothing in hand with which to
bargain.”
• As a result:
6. In the 9th Circuit Since Milne
Lassie Came Home to her Original Family
7. In the 9th Circuit Since Milne
DC Comics v. Pacific Pictures Corp., 545 Fed.Appx. 678
(2013) (unpublished opinion)
• In 1992, the heirs of Joe Schuster, one of the creators of Superman, entered into an agreement in
which they re-granted the rights in Superman to DC Comics, in exchange for lifetime pensions
• In 2003, Schuster’s executor served notice under §304(d) to terminate Schuster’s 1938 grant,
arguing that the 1992 re-grant by the heirs
• did not expressly revoke Schuster’s original 1938 grant, and
• therefore was an invalid “agreement to the contrary.”
• HELD:
• Applying NY law, revocation was implied from the circumstances and contractual language.
• The 1992 agreement therefore validly superseded Schuster’s 1938 grant and, under Milne,
accordingly was not an “agreement to the contrary.”
• Classic Media v. Mewborn was inapposite, “in that it involved an agreement that did not
extinguish the pre–1978 assignment that was the subject of the notice of termination.”
• The court was not empowered to overrule Milne.
• The Man of Steel had thus met his match:
8. In the 9th Circuit Since Milne
Milne
Kryptonite
9. In the 2nd Circuit Since Steinbeck
Baldwin v. EMI Feist Catalog, Inc., 2015 WL 5853739
(Oct. 8, 2015)
• In 1934 and 1951, respectively, songwriter granted music publisher publication rights in
Santa Claus is Coming to Town for the original and renewal terms.
• In 1981, still-living songwriter served timely notice of termination under §304(c), and
purported to record the notice with the Copyright Office.
• Songwriter and music publisher then entered into a 1981 agreement providing for
additional consideration.
• The 1981 agreement repeated the grant of rights stated in the 1934 and 1951 agreements,
but did not expressly revoke those agreements, as was done in Milne and Steinbeck.
• After the parties executed the 1981 agreement, the Copyright Office returned the notice of
termination unrecorded to songwriter’s attorney, but attorney did not inform music
publisher until more than two decades later during later dispute over the rights.
• Beginning in 2004, songwriter’s statutory heirs served notice of termination of the 1934
and 1951 grants under §304(d), in the event the invalidity (for non-recordation) of the 1981
termination voided the 1981 agreement, and alternatively notice of termination of the
1981 grant under §203, which applies to grants made by authors on or after Jan. 1, 1978.
• Heirs then brought declaratory-judgment action against music publisher under §203.
10. In the 2nd Circuit Since Steinbeck
Baldwin v. EMI Feist Catalog, Inc., 2015 WL 5853739
(Oct. 8, 2015)
• Music publisher argued that it still derived its rights from the 1934 and 1951 agreements,
which, being pre-1978, were not subject to termination under §203, because
• Songwriter’s 1981 termination of the earlier grants was invalid because never properly
recorded within the time prescribed by §304(c), and
• 1981 agreement never expressly revoked the earlier grants, as required by Steinbeck.
• HELD:
• At the time songwriter executed the 1981 agreement, he was vested with the future
reversionary rights in the song by virtue of §304(c)(6), and that future right was
defeasible only by the subsequent failure to timely record the notice of termination,
which occurred in this case post-agreement.
• Although Steinbeck involved an express revocation of the prior grants, a court may find
revocation implied from all the circumstances and contractual language.
• The 1981 agreement by implication effectively revoked the songwriter’s earlier grants
and became the sole source of the publisher’s rights, and hence was subject to
termination under §203.
11. Conclusion
• Although criticized by, among others, Nimmer (§11.07[A]) for having “eviscerated”
the statutory scheme intended by Congress in §§203 and 304, the two copyright
Circuits have not retreated from the doctrine of Milne and Steinbeck when dealing
with a claim of an “agreement to the contrary.”
• In such instances, the Court will not apply the statutory language mechanistically, but
will ascertain on a case-by-case basis
• Did the new agreement, expressly or impliedly, effectively revoke the prior grant
and make a new grant of the rights in issue?
• Was the new agreement made under circumstances “tantamount” to
termination, i.e., did the new grantor act with the leverage afforded by the
termination process, even though no formal notice of termination had been
served.
• Regarding leverage, an unspoken consideration in these cases has been the
Court’s opinion of whether the new deal was a good deal.
