IPL

WEEK 2

CASE DIGEST

Baker v. Selden
Brief Fact Summary. Baker (Defendant) sold forms similar to forms contained in a
bookkeeping system within Selden’s (Plaintiff) copyrighted book.

Synopsis of Rule of Law. The copyright protection for a book explaining an art or
system extends only to the author’s unique explanation of it and does not prevent others
from using the system or the forms incidentally used.

Facts. Selden (Plaintiff) copyrighted a book in which he used in introductory essay

explaining his system of bookkeeping followed by forms to put the system to use. He
had arranged the columns and headings so that the entire operation of a day, week or
month was on a single page or on two pages facing each other. Baker (Defendant)
then began selling forms with columns and headings arranged differently to achieve the
same result. When Plaintiff successfully sued for copyright infringement, Defendant
appealed. He argued that the forms were non-copyrightable.

Issue. Does copyright protection for a book explaining an art or system prevent others
from using the system or the forms incidentally used?

Held. (Bradley, J.) No. The copyright protection for a book explaining an art or
system extends only to the author’s unique explanation of it and does not prevent others
from using the system or the forms incidentally used. Â To find that a copyright
protected against use of the system itself or the forms necessary to such use would be
to grant protection similar to a patent without requiring a showing of novelty. Copyright
is based on originality, not novelty, and protects the explanation of the system and not
the use of the system. In this case, therefore, the copyright Selden (Plaintiff) obtained
could not give him the exclusive right to use the bookkeeping system or the forms
necessary to such use. Reversed and remanded.

Discussion. This case has been interpreted by many as allowing copying for use as
opposed to copying for the purpose of explanation. However, in applying this rule,
some courts have gone rather far and have allowed something to pass as copying for
use when there were alternate ways to arrange the words that could have easily been
chosen to communicate the non-copyrightable system or art. This has provoked much
criticism of the interpretation previously mentioned regarding the rule of this case.

Morrissey v. Procter & Gamble

Brief Fact Summary. Procter & Gamble (Defendant) used a contest rule very similar to
that which Morrissey (Plaintiff) had copyrighted and used in a sales promotion contest.

Synopsis of Rule of Law. A rule incidental to the operation of a noncopyrightable

contest cannot itself be copyrighted if the information it conveys is so simple that there
are only a number of ways in which it can be expressed.

Facts. Morrissey (Plaintiff) copyrighted the rules it had used in a sweepstakes contest
revolving around the contestants’ social security numbers. While conducting a similar
type contest, Procter & Gamble (Defendant) used a very similar rule. It explained that
the name, address, and social security number of the participant should be printed on
paper or a box top; that the official rules were available at local dealers; that the social
security number of another family member could be used if one did not have his own
number, etc. When Morrissey (Plaintiff) brought suit for copyright infringement, the
district court found the contest itself to be noncopyrightable. It then held that the rule
springing from it contained no original creative authorship and was noncopyrightable.Â
Morrissey (Plaintiff) appealed.

Issue. If a rule incidental to the operation of a noncopyrightable contest conveys

information so simple that there are only a number of ways in which it can be
expressed, can the rule be copyrighted?

Held. (Aldrich, C.J.) No. If the information conveyed in a rule incidental to the
operation of a noncopyrightable contest is so simple that there are only a number of
ways in which it can be expressed, the rule cannot be copyrighted. Permitting such
rules to be copyrighted would be like giving a copyright on the contest itself to someone
smart enough to simply copyright the number of rule variations possible for running the
contest. The rule at issue here was of this nature and therefore was not copyrightable
by Morrissey (Plaintiff). Affirmed.

Discussion. The court relied on its interpretation of Baker v. Selden, 101 U.S. 99
(1879), as holding that certain kinds of expression are noncopyrightable, such as
utilitarian forms. This flies in the face of commentators who continue to argue that
Baker v. Selden held only that otherwise prohibited copying that is necessary to make
use of a noncopyrightable system or art does not constitute infringement, whereas
copying for explanatory purposes does.

Brandir International, Inc. v.

Cascade Pacific Lumber Co
Brief Fact Summary.Brandir International, Inc. (Plaintiff) sold a wire sculpture as a
bicycle rack that by was deemed not to be copyrightable because it was an industrial
design not subject to copyright protection.

Synopsis of Rule of Law. Copyrightability ultimately depends on the extent to which

the work reflects artistic expression not restricted by functional considerations.

Facts. After seeing undulating wire sculptures, a friend suggested to the artist, the chief
owner of Brandir International, Inc. (Brandir) (Plaintiff), that the sculptures would make
excellent bicycle racks. Plaintiff then started to manufacture and sell bike racks
derived in part from one or more of the works of art. When Plaintiff discovered that
Cascade Pacific Lumber (Defendant) was selling a similar product, it included a
copyright notice with its products and applied to the Copyright Office for registration.Â
The Copyright Office denied the applications for registration as the bicycle racks did not
include any element that was capable of independent existence as a copyrightability,
and the district court granted summary judgment on the copyright claim. Plaintiff
appealed.

Issue. Should copyrightability ultimately depend on the extent to which the work reflects
artistic expression not restricted by functional considerations?

Held. (Oakes, J.) Yes. Copyrightability ultimately should depend on the extent to
which the work reflects artistic expression not restricted by functional considerations.Â
If design elements reflect a merger of aesthetic and functional considerations, the
artistic aspects of a work cannot be said to be conceptually separable from the utilitarian
elements. The final form of the bicycle rack sold by Brandir (Plaintiff) is basically a
product of industrial design. Form and function are inextricably intertwined in the rack,
its ultimate design being as much the result of utilitarian pressures as aesthetic
choices. The original aesthetic elements have clearly been adapted to accommodate
and further a utilitarian purpose. Affirmed.

Concurrence. (Winter, J.)Â The relevant question should be whether the design of a
useful article, however intertwined with the article’s utilitarian aspects, causes an
ordinary reasonable observer to perceive an aesthetic concept not related to the
article’s use. The answer to this question is clear in this case since any reasonable
observer would easily see the bicycle rack as an ornamental sculpture. The Copyright
Act expressly states that the legal test is how the final article is perceived, not how it
was developed at various stages along the way.

Discussion. The majority in this case adopted a test suggested by Professor Denicola
in his article “Applied Art and Industrial Design,† 67 Min. L. Rev. 707 (1983).Â
The Winter dissent suggested applying a different test and another dissent suggested
using a temporal displacement test. In general, if a work is a useful article, the artistic
elements have to be separate in order for the work to be copyrightable.
Pearl & Dean v. Shoemart
FACTS:

Pearl and Dean (Phil.), Inc. (PDI) is engaged in the manufacture of advertising
display units simply referred to as light boxes. PDI was able to secure a
Certificate of Copyright Registration, the advertising light boxes were
marketed under the trademark “Poster Ads”.

In 1985, PDI negotiated with defendant-appellant Shoemart, Inc. (SMI) for the
lease and installation of the light boxes in certain SM Makati and SM Cubao.
PDI submitted for signature the contracts covering both stores, but only the
contract for SM Makati, however, was returned signed. Eventually, SMI’s
informed PDI that it was rescinding the contract for SM Makati due to non-
performance of the terms thereof.

Years later, PDI found out that exact copies of its light boxes were installed at
different SM stores. It was further discovered that SMI’s sister company North
Edsa Marketing Inc. (NEMI), sells advertising space in lighted display units
located in SMI’s different branches.

PDI sent a letter to both SMI and NEMI enjoining them to cease using the
subject light boxes, remove the same from SMI’s establishments and to
discontinue the use of the trademark “Poster Ads,” as well as the payment of
compensatory damages.

Claiming that both SMI and NEMI failed to meet all its demands, PDI filed this
instant case for infringement of trademark and copyright, unfair competition
and damages.

SMI maintained that it independently developed its poster panels using

commonly known techniques and available technology, without notice of or
reference to PDI’s copyright. SMI noted that the registration of the mark
“Poster Ads” was only for stationeries such as letterheads, envelopes, and
the like. Besides, according to SMI, the word “Poster Ads” is a generic term
which cannot be appropriated as a trademark, and, as such, registration of
such mark is invalid. On this basis, SMI, aside from praying for the dismissal
of the case, also counterclaimed for moral, actual and exemplary damages
and for the cancellation of PDI’s Certification of Copyright Registration, and
Certificate of Trademark Registration.
The RTC of Makati City decided in favour of PDI, finding SMI and NEMI jointly
and severally liable for infringement of copyright and infringement of
trademark

On appeal, however, the Court of Appeals reversed the trial court.

ISSUES:

1. Whether the the light box depicted in such engineering drawings ipso
facto also protected by such copyright.

2. Whether there was a patent infringement.

3. Whether the owner of a registered trademark legally prevent others

from using such trademark if it is a mere abbreviation of a term
descriptive of his goods, services or business?

RULING:

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

The Court of Appeals correctly held that the copyright was limited to the
drawings alone and not to the light box itself.

Although petitioner’s copyright certificate was entitled “Advertising Display

Units” (which depicted the box-type electrical devices), its claim of copyright
infringement cannot be sustained.

Copyright, in the strict sense of the term, is purely a statutory right.

Accordingly, it can cover only the works falling within the statutory
enumeration or description.

Even as we find that P & D indeed owned a valid copyright, the same could
have referred only to the technical drawings within the category of “pictorial
illustrations.” It could not have possibly stretched out to include the
underlying light box. The light box was not a literary or artistic piece which
could be copyrighted under the copyright law.

The Court reiterated the ruling in the case of Kho vs. Court of Appeals,
differentiating patents, copyrights and trademarks, namely:
A trademark is any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise and shall
include a stamped or marked container of goods. In relation thereto, a trade
name means the name or designation identifying or distinguishing an
enterprise. Meanwhile, the scope of a copyright is confined to literary and
artistic works which are original intellectual creations in the literary and
artistic domain protected from the moment of their creation. Patentable
inventions, on the other hand, refer to any technical solution of a problem
in any field of human activity which is new, involves an inventive step and is
industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

Petitioner never secured a patent for the light boxes. It therefore acquired no
patent rights which and could not legally prevent anyone from
manufacturing or commercially using the contraption. To be able to
effectively and legally preclude others from copying and profiting from the
invention, a patent is a primordial requirement. No patent, no protection.

ON THE ISSUE OF TRADEMARK INFRINGEMENT

On the issue of trademark infringement, the petitioner’s president said

“Poster Ads” was a contraction of “poster advertising.” P & D was able to
secure a trademark certificate for it, but one where the goods specified were
“stationeries such as letterheads, envelopes, calling cards and
newsletters.”Petitioner admitted it did not commercially engage in or market
these goods. On the contrary, it dealt in electrically operated backlit
advertising units which, however, were not at all specified in the trademark
certificate.

Assuming arguendo that “Poster Ads” could validly qualify as a trademark,

the failure of P & D to secure a trademark registration for specific use on the
light boxes meant that there could not have been any trademark
infringement since registration was an essential element thereof.

ON THE ISSUE OF UNFAIR COMPETITION

There was no evidence that P & D’s use of “Poster Ads” was distinctive or
well-known. As noted by the Court of Appeals, petitioner’s expert witnesses
himself had testified that ” ‘Poster Ads’ was too generic a name. So it was
difficult to identify it with any company, honestly speaking.”This crucial
admission that “Poster Ads” could not be associated with P & D showed that,
in the mind of the public, the goods and services carrying the trademark
 “Poster Ads” could not be distinguished from the goods and services of other
entities.

“Poster Ads” was generic and incapable of being used as a trademark

because it was used in the field of poster advertising, the very business
engaged in by petitioner. “Secondary meaning” means that a word or phrase
originally incapable of exclusive appropriation with reference to an article in
the market might nevertheless have been used for so long and so exclusively
by one producer with reference to his article that, in the trade and to that
branch of the purchasing public, the word or phrase has come to mean that
the article was his property.

The petition is DENIED

UNILEVER Philippines vs. CA and Procter and Gamble, Phils Inc., G.R.
No. 119280, (August 10, 2006), 498 SCRA 334
F Injunction is resorted to only when there is a pressing necessity to avoid
injurious consequences which cannot be remedied under any standard
compensation.[7] As correctly ruled by the CA, there was an extreme
urgency to grant the preliminary injunction prayed for by P&GP considering
that TV commercials are aired for a limited period of time only. In fact, this
Court takes note of the fact that the TV commercial in issue ― the Kite TV
advertisement ― is no longer aired today, more than 10 years after the
injunction was granted on September 16, 1994.

FRANCISCO G. JOAQUIN, JR. and BJ PRODUCTIONS, INC. vs.

HONORABLE RANKLIN M. DRILON, GABRIEL ZOSA, WILLIAM
ESPOSO, FELIPE MEDINA, JR., and CASEY FRANCISCO

FACTS:

Petitioner BJ Productions, Inc. (BJPI) is the holder / grantee of

Certificate of Copyright No. M922, dated January 28, 1971, of Rhoda and
Me, a dating game show aired from 1970 to 1977.

On June 28, 1973, petitioner BJPI submitted to the National Library

an addendum to its certificate of copyright specifying the show’s format and
style of presentation.

Upon complaint of petitioners, information for violation of PD No. 49

was filed against private respondent Zosa together with certain officers of
RPN 9 for airing It’s a Date. It was assigned to Branch 104 of RTC Quezon
City.

Zosa sought review of the resolution of the Assistant City

Prosecutor before the Department of Justice.

On August 12, 1992, respondent Secretary of Justice Franklin M.

Drilon reversed the Assistant City Prosecutor’s findings and directed him to
move for the dismissal of the case against private respondents.

Petitioner Joaquin filed motion for reconsideration but such was

denied.

ISSUE:

Whether the format or mechanics or petitioner’s television show is

entitled to copyright protection.

HELD:

The Court ruled that the format of the show is not copyrightable.
Sec. 2 of PD No. 49, otherwise known as the Decree on Intellectual
Property, enumerates the classes of work entitled to copyright protection.
The provision is substantially the same as Sec. 172 of the Intellectual
Property Code of the Philippines (RA 8293). The format or mechanics of a
television show is not included in the list of protected works in Sec. 2 of PD
No. 49. For this reason, the protection afforded by the law cannot be
extended to cover them.

Copyright, in the strict sense of the term, is purely a statutory right. It is a

new independent right granted by the statute and not simply a pre-existing
right regulated by the statute. Being a statutory grant, the rights are only
such as the statute confers, and may be obtained and enjoyed only with
respect to the subjects and by the person and on terms and conditions
specified in the statute.

The Court is of the opinion that petitioner BJPI’s copyright covers audio-
visual recordings of each episode of Rhoda and Me, as falling within the
class of works mentioned in PD 49.
 The copyright does not extend to the general concept or format of its dating
game show.

Mere description by words of the general format of the two dating game
shows is insufficient; the presentation of the master videotape in evidence
was indispensable to the determination of the existence of a probable
cause.

A television show includes more than mere words can describe because it
involves a whole spectrum of visuals and effects, video and audio, such
that no similarity or dissimilarity may be found by merely describing the
general copyright / format of both dating game shows.

Sambar vs. Levi Strauss & Co./, GR No. 132604, ( March 6, 2002),
378 SCRA 364
F Did petitioner infringe on private respondents’ arcuate design?
¾ We find no reason to disturb the findings of the Court of Appeals that
Europress’ use of the arcuate design was an infringement of the Levi’s
design.
F Must we hold petitioner solidarily liable with CVS Garments Industrial
Corporation? Both the courts below found that petitioner had a copyright
over Europress’ arcuate design and that he consented to the use of said
design by CVSGIC. We are bound by this finding, especially in the absence of
a showing that it was tainted with arbitrariness or palpable error.[7] It must
be stressed that it was immaterial whether or not petitioner was connected
with CVSGIC. What is relevant is that petitioner had a copyright over the
design and that he allowed the use of the same by CVSGIC.

F To be entitled to copyright, the thing being copyrighted must be original, created

by the author through his own skill, labor and judgment, without directly
copying or evasively imitating the work of another. From the foregoing
discussion, it is clear that the matters raised by petitioner in relation to the
last issue are purely factual, except the matter of nominal and temperate
damages. Petitioner claims that damages are not due private respondents
and his copyright should not be cancelled because he had not infringed on
Levi’s trademark. Both the trial court and the Court of Appeals found
there was infringement. Thus, the award of damages and
cancellation of petitioner’s copyright are appropriate. Award of
damages is clearly provided in Section 23 of the Trademark law,
while cancellation of petitioner’s copyright finds basis on the fact
that the design was a mere copy of that of private respondents’
trademark. To be entitled to copyright, the thing being copyrighted must
be original, created by the author through his own skill, labor and judgment,
without directly copying or evasively imitating the work of another
F However, we agree with petitioner that it was error for the Court of Appeals to
affirm the award of nominal damages combined with temperate damages by
the Regional Trial Court of Makati. What respondents are entitled to is an
award for temperate damages, not nominal damages. For although the
exact amount of damage or loss can not be determined with reasonable
certainty, the fact that there was infringement means they suffered losses
for which they are entitled to moderate damages. We find that the award of
P50,000.00 as temperate damages fair and reasonable, considering the
circumstances herein as well as the global coverage and reputation of
private respondents Levi Strauss & Company and Levi Strauss (Phil.), Inc.

Ching vs. Salinas, GR No. 161295, June 29, 2005, 462 SCRA 241
F The RTC had jurisdiction to delve into and resolve the issue whether the
petitioner ’s utility models are copyrightable and, if so, whether he is the
owner of a copyright over the said models.
F For the RTC to determine whether the crime for infringement under R.A. No.
8293 as alleged in an application is committed, the petitioner-applicant was
burdened to prove that (a) respondents Jessie Ching and Joseph Yu were the
owners of copyrighted material; and (b) the copyrighted material was being
copied and distributed by the respondents. Thus, the ownership of a valid
copyright is essential.
F Ownership of copyrighted material is shown by proof of originality and
copyrightability. By originality is meant that the material was not copied,
and evidence s at least minimal creativity; that it was independently created
by the author and that it possesses at least same minimal degree of
creativity.
F Copying is shown by proof of access to copyrighted material and substantial
similarity between the two works.
F It bears stressing that the focus of copyright is the usefulness of the artistic
design, and not its marketability. The central inquiry is whether the article is
a work of art.] Works for applied art include all original pictorials, graphics,
and sculptural works that are intended to be or have been embodied in
useful article regardless of factors such as mass production, commercial
exploitation, and the potential availability of design patent protection.
F As gleaned from the description of the models and their objectives, these
articles are useful articles which are defined as one having an intrinsic
utilitarian function that is not merely to portray the appearance of the article
or to convey information. Indeed, while works of applied art, original
intellectual, literary and artistic works are copyrightable, useful articles and
works of industrial design are not. A useful article may be copyrightable only
if and only to the extent that such design incorporates pictorial, graphic, or
sculptural features that can be identified separately from, and are capable of
existing independently of the utilitarian aspects of the article.
F In this case, the petitioner’s models are not works of applied art, nor artistic
works. They are utility models, useful articles, albeit with no artistic design
or value.
F A utility model is a technical solution to a problem in any field of human activity
which is new and industrially applicable. It may be, or may relate to, a
product, or process, or an improvement of any of the aforesaid. Essentially, a
utility model refers to an invention in the mechanical field. This is the reason
why its object is sometimes described as a device or useful object.
F UTILITY MODEL v. INVENTION: first, the requisite of “inventive step” in a patent
for invention is not required; second, the maximum term of protection is only
seven years compared to a patent which is twenty years, in a patent for
both reckoned from the date of the application; and third, the provisions on
utility model dispense with its substantive examination and prefer for a less
complicated system.
F No copyright granted by law can be said to arise in favor of the petitioner
despite the issuance of the certificates of copyright registration and the
deposit of the Leaf Spring Eye Bushing and Vehicle Bearing Cushion.
F That the works of the petitioner may be the proper subject of a patent does not
entitle him to the issuance of a search warrant for violation of copyright
laws. In Kho v. Court of Appeals[49] and Pearl & Dean (Phil.), Incorporated v.
Shoemart, Incorporated,[50] the Court ruled that “these copyright and
patent rights are completely distinct and separate from one another, and the
protection afforded by one cannot be used interchangeably to cover items or
works that exclusively pertain to the others.
F In this case, the bushing and cushion are not works of art. They are, as the
petitioner himself admitted, utility models which may be the subject of a
patent.

Feist v. Rural Telephone Service

Co
Citation. 499 U.S. 340, 111 S. Ct. 1282, 113 L. Ed. 2d 358,1991 U.S.

Brief Fact Summary. A publishing company used information from a telephone

directory to publish its own directory.

Synopsis of Rule of Law. To qualify for copyright protection, a work must be original to
the author, which means that the work was independently created by the author, and it
possesses at least some minimal degree of creativity. A work may be original even
thought it closely resembles other works so long as the similarity is fortuitous, not the
result of copying.

Facts. Rural Telephone Service Company, Inc. (Plaintiff) provides telephone service to
several communities. Due to a state regulation, it must issue an annual telephone
directory, so it published a directory consisting of white and yellow pages. The yellow
pages have advertisements that generate revenue. Feist Publications, Inc. (Defendant)
is a publishing company whose directory covers a larger range than a typical directory.
Defendant distributes their telephone books free of charge, and they also generate
revenue through the advertising in the yellow pages. Plaintiff refused to give a license to
Defendant for the phone numbers in the area, so Defendant used them without
Plaintiff’s consent. Rural sued for copyright infringement.

Issue. Are the names, addresses, and phone numbers in a telephone directory able to
be copyrighted?

Held. No.
Facts cannot be copyrighted, however compilations of facts can generally be
copyrighted.
To qualify for copyright protection, a work must be original to the author, which means
that the work was independently created by the author, and it possesses at least some
minimal degree of creativity. A work may be original even thought it closely resembles
other works so long as the similarity is fortuitous, not the result of copying.
Facts are not original. The first person to find and report a particular fact has not created
the fact; he has merely discovered its existence. Facts may not be copyrighted and are
part of the public domain available to every person.
Factual compilations may possess the requisite originality. The author chooses what
facts to include, in what order to place them, and how to arrange the collected date so
they may be effectively used by readers. Thus, even a directory that contains no written
expression that could be protected, only facts, meets the constitutional minimum for
copyright protection if it features an original selection or arrangement. But, even though
the format is original, the facts themselves do not become original through association.
The copyright on a factual compilation is limited to formatting. The copyright does not
extend to the facts themselves.
To establish copyright infringement, two elements must be proven: ownership of a valid
copyright and copying of constituent elements of the work that are original. The first
element is met in this case because the directory contains some forward text. As to the
second element, the information contains facts, which cannot be copyrighted. They
existed before being reported and would have continued to exist if a telephone directory
had never been published. There is no originality in the formatting, so there is no
copyrightable expression. Thus, there is no copyright infringement.

Discussion. Facts cannot be subject to copyright laws; otherwise there would be no

spreading of information or learning. Subjecting facts to copyright laws would mean that
any time a person used a fact found in a book, be it in a school paper, newspaper, or
another book, that person would be guilty of piracy.

Community for Creative Non-

Violence at al. v. Reid

Citation. Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S. Ct. 2166, 104
L. Ed. 2d 811, 1989 U.S. LEXIS 2727, 10 U.S.P.Q.2D (BNA) 1985, 57 U.S.L.W. 4607,
Copy. L. Rep. (CCH) P26,425, 16 Media L. Rep. 1769 (U.S. June 5, 1989)

Brief Fact Summary. Reid (Defendant) created a sculpture on commission from the
Community for Creative Non-Violence (Plaintiff), and contended that since he had not
been employed by it under common law agency principles, he owned the copyright of
the sculpture.

Synopsis of Rule of Law. Under common-law agency principles, one who creates an
artwork at the directive of another retains copyright upon it unless that other had
employed the artist.

Facts.The Community for Creative Non-Violence (CCNV) (Plaintiff) was a nonprofit

organization dedicated to advocacy for the cause of the homeless in the United
States. It negotiated with Reid (Defendant), a sculptor, to create a variation on the
classic nativity scene, depicting homeless persons. Agreement was finally reached
and Defendant made the sculpture out of a bronze-like material. Defendant worked in
his studio with little direction from CCNV (Plaintiff). Following the unveiling, Defendant
registered a copyright on the work. Subsequent to this, a disagreement arose
between Plaintiff and Defendant who had taken custody of the sculpture, over future
exhibition thereof. Plaintiff filed an action seeking to obtain possession of the work.Â
The district court held Plaintiff to have the right to exhibit the statue. The federal circuit
of the court of appeals reversed, and the United States Supreme Court granted review.

Issue.Under common-law agency principles, does one who creates an artwork at the
directive of another retains copyright upon it unless that other had employed the artist?

Held.(Marshall, J.) Yes. Under common-law agency principles, one who creates an
artwork at the directive of another retains copyright upon it unless that other had
employed the artist. 17 U.S.C. § 201 (a) provides that copyright ownership vests
initially in the work’s author, something Reid (Defendant) in this case obviously was.Â
Section 101 of the 1976 Copyright Act creates an exception to this in the case of works
created “for hire.” Section 101(2) mandates copyright vestiture in the case
where the author is an independent contractor of another, in specific instances not
applicable in this case. Section 101(1) provides that the work is one created “for
hire” if the work is created by an employee within the scope of his employment, and
this subsection is the only one that can divest Reid (Defendant) of copyright therein.Â
“Employee” is not defined in the section. This being so, the rule comes into
play that words used in a statute will be presumed to possess their normal meanings.Â
Contrary to CCNV’s (Plaintiff) assertions, “employee† is a narrower term than
one over whom another exercises a measure of control. Rather, “employee”
has a particular meaning, derived from common-law agency principles, wherein one
party performs labor for another under circumstances in which that other exerts
substantial control over the work environment on the laborer, as well as the manner of
performance. Numerous factors figure in this equation, such as the level of skill
required, tax treatment of the putative employee, the singleness of the assignment, and
the source of the instrumentalities of the labor. In this instance, the work was highly
skilled; Reid (Defendant) was retained only for this single assignment, was not treated
as an employee for tax purposes, and provided his own work area and tools. The
conclusion is mandated that, under agency principles, Defendant was not an employee
of P. Therefore, the § 101(1) exception to § 201(a) does not apply, and the
copyright belongs to Reid (Defendant). Affirmed.

Discussion.Sections 101(1) and 101(2) were the result of lengthy debate and
compromise in Congress. Before 19555, any commissioned work belonged to the
hiring party. For the next several years, changes in this rule were proposed many
times. Finally, in 1965 the substantive embodiment of current law was enacted.