Appeals from the United States District Courtfor the Central District of CaliforniaGeorge H. King, District Judge, PresidingArgued and SubmittedMarch 4, 1998--Pasadena, CaliforniaFiled October 5, 1998Before: Melvin Brunetti, David R. Thompson, andThomas G. Nelson, Circuit Judges.Opinion by Judge Brunetti
_____________________________COUNSEL Louis P. Petrich, Vincent Cox, Leopold, Petrich & Smith, LosAngeles, California, for the defendants-appellants.Dian S. Rubanoff, Lane Powell Sears Lubersky, Portland,Oregon, for the plaintiff-appellee.
_____________________________OPINION BRUNETTI, Circuit Judge:In this copyright action, the plaintiff-appellee Mahlon Dol-man alleges that the defendants-appellants, Michael Agee,Michael Agee Productions, L & H Records, and The Nostal-gia Archive, infringed on Dolman's copyrights in motion pic-ture soundtrack musical compositions created by Dolman'sstepfather, Leroy Shield, in the 1930s. The district courtgranted partial summary judgment for Dolman as to twenty-five (25) of the subject songs. After a bench trial, the districtcourt entered an order finding that the defendants infringedDolman's copyrights on all of the songs at issue, and enteredjudgment in favor of Dolman, including a permanent injunc-tion against further infringement. Defendants-appellants nowappeal from that judgment, as well as from the district court'saward of attorney's fees to Dolman. We have jurisdiction pur-suant to 28 U.S.C. S 1291, and we affirm.FACTS AND PROCEEDINGS BELOWLeroy Shield (Shield), the stepfather of plaintiff-appelleeMahlon Dolman (Dolman), was employed by Victor TalkingMachine (Victor) in the 1930s, when Shield authored thesongs at issue in this case. In 1928, Hal Roach Studios (HRS)contracted with Victor to create soundtracks for HRS-produced motion pictures. Shield composed the musical por-tions of the soundtracks for Laurel and Hardy movies pro-duced by HRS and released by Metro-Goldwyn-Mayer(MGM) in the early 1930s. MGM registered copyrights for allof these movies.In January 1932, Shield assigned his interest in the subjectsongs to Southern Music Publishing Company (Southern),which was the music publishing arm of Victor. In the assign-ment, Shield stated that the songs were his own compositions;that they were his property free from any liens or claims; andthat they had not previously been assigned, transferred, orsold.Southern then registered the original term copyrights forthe songs, naming itself as copyright owner and Shield ascomposer, and proceeded to publish the songs as sheet music.Eventually, Southern assigned the copyrights in the songs toPeer International Corp. (Peer), and Peer later assigned thecopyrights back to Southern. Southern also granted a synchro-nization license for the songs to HRS in 1932.In 1958, both Southern and the Songwriters' Guild timelyrenewed the song copyrights in Shield's name. Subsequently,Shield established the Roy Shield Music Company for thepurpose of licensing the songs to third persons during therenewal term.In 1962, Shield died and left his entire estate to his widow,Katherine Shield. Katherine Shield died in February 1976,leaving her entire estate in equal thirds to her sister, Margue-rite Sullivan, and her two sons, Dolman and his brother, Har-old Glaisyer. In December 1976, Sullivan gifted her interestin the songs to Dolman. Dolman has thus held a two-thirds(2/3rds) interest in the songs at all times since 1976. He andhis brother continue to conduct business as the Roy ShieldMusic Company.Defendant-appellant Michael Agee did business under thenames of defendant L & H Records and defendant The Nos-talgia Archive (collectively referred to herein as "Agee").After receiving permission from Hal Roach (Roach) and EarlGlick (Glick), the Chairman of HRS, Agee, a film historianand restorationist, caused to be manufactured and distributed"Music Box" phonorecords containing renditions of the songsat issue in this case. Agee also imported 150 CDs recorded bythe Dutch "Beau Hunks" Orchestra, containing some of thesubject songs.While Agee was assured by Roach and Glick that HRSowned the music at issue, Agee had a copyright attorney,Walter Hurst (Hurst), investigate the copyright status of thesongs prior to the release of the first "Music Box" album.Hurst reported to Agee that the copyright situation was "amess." Nonetheless, Agee went forward with the release.In 1990, Agee learned of the Roy Shield Music Company.Thereafter, he called Dolman and asked for biographicalinformation on Leroy Shield. When Dolman learned about thedistribution of the "Music Box" albums, he twice informedAgee in writing that he expected Agee to arrange for a licensefor use of the songs written by Shield. Agee did not respondto either of Dolman's letters until 1993, when Agee wroteDolman a letter acknowledging Dolman's ownership of themusic. However, Agee never offered to obtain a license fromDolman.In June 1993, Dolman's lawyer sent Agee a letter demand-ing that he pay a license fee and account for sales to date ofthe allegedly infringing albums. In September 1993, the law-yer sent Agee documentation of Dolman's copyright owner-ship. A friend of Agee's then called Dolman's lawyer torequest that, as part of any license, Dolman agree to indem-nify Agee for any claims of ownership by third parties. Dol-man declined to grant a license on those terms. Ageecontinued to sell the albums.Dolman commenced this action on March 14, 1994, alleg-ing a two-thirds (2/3rds) interest in fifty-five (55) song copy-rights for the songs authored by Shield. Dolman moved forpartial summary judgment as to twenty-five (25) songs, andhis motion was granted on March 29, 1995. The district courtthen proceeded to a bench trial on the remaining issues.On October 8, 1996, the district court issued its findings offact and conclusions of law, holding in favor of Dolman.Judgment was entered for Dolman in the amount of$23,333.33 plus costs, and Agee was permanently enjoinedfrom further infringement on October 18, 1996. On June 3,1997, the district court awarded Dolman attorney's fees pur-suant to 17 U.S.C. S 505 as the prevailing party. This appealby Agee followed.DISCUSSIONI. Standards of ReviewA grant of summary judgment is reviewed de novo. Coveyv. Hollydale Mobilehome Estates, 116 F.3d 830, 834, asamended by 125 F.3d 1281 (9th Cir. 1997). We must deter-mine, viewing the evidence in the light most favorable to thenonmoving party, whether there are any genuine issues ofmaterial fact and whether the district court correctly appliedthe relevant substantive law. Id. A district court's findings of fact following a bench trial arereviewed for clear error, and its conclusions of law arereviewed de novo. Fed. R. Civ. P. 52(a); Magnuson v. VideoYesteryear, 85 F.3d 1424, 1427 (9th Cir. 1996).II. The Subject Songs Were Not "Works for Hire"Agee first argues that the district court erred in finding thatthe songs written by Shield were not works for hire. We agreewith the district court.[1] Under the Copyright Act of 1909, Act of March 4,1909, ch. 320, 35 Stat. 1075 (codified at 17 U.S.C.SS 1-216)(repealed), there is a rebuttable presumption that when anemployer hires an employee or independent contractor to pro-duce work of an artistic nature, the employer owns the copy-right in the work. See May v. Morganelli-Heumann &Assocs., 618 F.2d 1363, 1368 (9th Cir. 1980); Lin-BrookBuilders Hardware v. Gertler, 352 F.2d 298, 300 (9th Cir.1965).1 In Lin-Brook, we explained the "works for hire" doc-trine in the following manner: [W]hen one person engages another, whether as employee or as an independent contractor, to pro- duce a work of an artistic nature, that in the absence of an express contractual reservation of the copyright in the artist, the presumption arises that the mutual intent of the parties is that the title to the copyright shall be in the person at whose instance and expense the work is done.Lin-Brook, 352 F.2d at 300.[2] The work for hire presumption can be overcome by evi-dence of an agreement by which the employee or independentcontractor retained the copyright in his work. See May, 618F.2d at 1368-69. The employee-plaintiff bears the burden ofproving by a preponderance of the evidence that such a con-trary agreement was reached. See Id. at 1369.[3] In the district court, Agee asserted the affirmativedefense of work for hire. Before the work for hire presump-tion could be invoked, however, Agee was required to presentsome credible evidence that Shield's work was done at the"instance and expense" of either Hal Roach or Victor.According to Agee, the evidence shows that the subject songswere composed at the "instance and expense" of HRS, and "inthe course and scope of Shield's employment by Victor." Thedistrict court found that Agee failed to meet his initial burdenof production on this issue, and we agree.As evidence of work for hire, Agee points to the fact thatat the time he authored the songs, Shield was working forVictor on HRS-produced movies. As noted above, in 1928,HRS and Victor entered into an agreement for the recordingof sound in connection with the manufacture of motion pic-tures. The agreement remained in place until 1931, and themovies in question here were part of the performance of thatcontract. It is undisputed that Shield was an employee of Vic-tor at the time the movies were produced and the songs inquestion were written.Agee also cites letters from Southern to both Shield andPeer, in which Southern states that Shield's works had beencomposed for HRS. Finally, Agee presents invoices forShield's "services," showing that he worked on the movies atissue.[4] Dolman responds by pointing out that the invoices pre-sented to the district court merely showed that Victor billedHRS for Shield's "services"; however, there was no indica-tion as to what those "services" were. Dolman also notes thaton the back of the allegedly infringing "Music Box" albums,Agee wrote that Leroy Shield was a "consultant " supplied byVictor to HRS. Shield's actual position at Victor as of 1926was "Head of Artists and Repertoire for the Western UnitedStates" and, as of 1932, "Western Musical Director for RCAVictor's National Broadcasting Company." Dolman thusargues, and we agree, that there is neither evidence that com-posing music for HRS was within the scope of Shield'semployment with Victor, nor evidence that the songs werewritten at the instance and expense of HRS. Accordingly, thedistrict court did not err in refusing to apply the work for hiredoctrine.[5] Moreover, even if Agee had established that Shield cre-ated the songs at the instance and expense of Victor or HRS,Dolman rebutted the work for hire presumption, which "isbased on the presumed mutual intent of the parties, and doesnot operate as a matter of law." May, 618 F.2d at 1368.[6] The district court was presented with the following evi-dence of the parties' mutual intent at the time the songs werewritten. First, Shield assigned his rights to the subject songsto Southern, which was owned by Victor. Had the works beenintended to be works for hire for Victor, there would havebeen no reason for Southern to accept an invalid assignmentof rights from Shield, knowing that its parent companyalready owned those rights. Following the assignment, South-ern filed copyright registrations on the songs, naming Shieldas the composer. Moreover, Southern later renewed the copy-rights for some of the songs in Shield's name. Southern alsoassured Shield in writing that "[i]n the event any of theseselections are not actively promoted by us, we agree to assignthem to you on demand." Finally, in 1932, Southern licensedthe synchronization rights in the songs to HRS. Had the songsbeen written for HRS as works for hire, there would havebeen no need for such a license.[7] We hold that the above-cited evidence was sufficient torebut the presumption that the songs composed by Shieldwere intended to be works for hire.2III. Agee Presented Insufficient Evidence of"Publication" of the Motion Pictures Agee next contends that Shield lost his common-law copy-right in the songs when the motion pictures were released.According to Agee, the prior publication of the motion pic-tures by distribution to film exchanges, without Shield's sepa-rate copyright notice for the songs, injected the underlyingmusical compositions into the public domain, and thusdivested the musical compositions of their common-law copy-rights. The district court rejected this argument, holding, as amatter of law, that the publication of a motion picture is nota publication of the underlying musical compositions.Under the Copyright Act of 1909, a properly recorded artis-tic work receives copyright protection for 28 years from thedate of first publication, and the author may renew the copy-right term for an additional 28-year period. 1909 Act, ch.320,S 23, 35 Stat. 1075, 1080. Under the 1909 Act, an unpub-lished work was protected by state common-law copyrightfrom the moment of its creation until it was either publishedor until it received protection under the federal copyrightscheme. La Cienega Music Co. v. ZZ Top, 53 F.3d 950 (9thCir.), cert. denied,
516 U.S. 927
(1995) (citations omitted).When a work was published, it lost common-law protection.Id. at 952-53. However, the owner could obtain federal pro-tection for the published work by complying with the require-ments of the 1909 Act. Id. at 953. If the owner failed to satisfythe Act's requirements, the work was injected irrevocably intothe public domain. Id.[8] We have held that "publication occurs when by consentof the copyright owner, the original or tangible copies of awork are sold, leased, loaned, given away, or otherwise madeavailable to the general public . . . ." American Vitagraph, Inc.v. Levy, 659 F.2d 1023, 1027 (9th Cir. 1981) (quoting Nimmeron Copyright S 4.04 at 4-18 to 4-19). However, "mere perfor-mance or exhibition of a work does not constitute a publica-tion of that work. . . . [A] motion picture exhibition where theviewing audience is merely permitted to see the work is nota publication." Id. at 1027 (citations omitted); see also Nim-mer S 4.11(A) at 4-53 ("[I]t is clear that the projection orexhibition of a motion picture in theatres or elsewhere doesnot in itself constitute a publication").[9] We have also held that "it takes more in the way of pub-lication to invalidate any copyright, whether statutory or com-mon law, than to validate it." American Vitagraph, 659 F.2dat 1027. "[I]n the context where a forfeiture of copyright pro-tection is at stake . . . publication of a motion picture does notoccur until the film is in commercial distribution -- when cop-ies of a film are placed in the regional exchanges for distribu-tion to theatre operators." Id. at 1029 (emphasis added).Thus, under our case law, it takes "more" publication todestroy a common-law copyright than to perfect a statutorycopyright.[10] Turning to the present case, we find no evidence in therecord to support a finding that the movies at issue here were"published," as that term is defined in American Vitagraph.Thus, we must affirm the district court's finding that the sub-ject songs were not injected into the public domain by way ofpublication of the motion pictures.[11] The only evidence of publication presented by Agee tothe district court was the motion picture copyright certificates,with publication dates listed. Putting aside the district court'sconcerns regarding the accuracy and completeness of this evi-dence, Agee is correct that we must afford the copyright reg-istrations a presumption of validity. See Academy of MotionPicture Arts and Sciences v. Creative House Promotions, Inc.,944 F.2d 1446, 1451 (9th Cir. 1991). Section 209 of the 1909Act provides that a certificate of registration shall be primafacie evidence of the facts stated therein. Id. Thus, the certifi-cates of registration for the subject motion pictures create arebuttable presumption that the movies were published forpurposes of investing statutory copyright on the dates listed.They do not, however, prove that the movies were"published," under the American Vitagraph definition, to theextent that they divested the songs of their common-law copy-rights. See American Vitagraph, 659 F.2d at 1027-28.Nonetheless, Agee argues that La Cienega requires us tohold that the "publication" of a motion picture also"publishes" the underlying musical compositions, with thecompositions thereby losing their common-law copyright pro-tection absent a separate copyright notice. In La Cienega, weheld that a record is a "copy" of the work recorded, and thatthe underlying compositions on the record are therefore"published" at the time the recordings are sold to the public.La Cienega, 53 F.3d at 953. Thus, where a composer fails tosatisfy the requirements of the 1909 Act, his compositionsenter the public domain immediately upon sale of recordingsto the public. Id. at 954. But see Rosette v. Rainbo RecordMfg. Co., 354 F. Supp. 1183 (S.D.N.Y. 1973), aff'd percuriam, 546 F.2d 461 (2d Cir. 1976) (holding that a record isnot a "copy" of a musical composition, and sale of a recordis not a publication divesting the composer of his common-law copyright).3[12] Agee's reliance on La Cienega is unavailing. Nothingcontained in that opinion suggests that a copyright certificate,standing alone, is sufficient to demonstrate a publication thatdivests a work of its common-law copyright. To the contrary,the infringer in La Cienega relied on the general release ofa phonorecord to the public in arguing that divestive publica-tion had occurred. La Cienega, 53 F.3d at 953. Here, Agee didnot introduce evidence demonstrating the nature and scope ofthe distribution of the Laurel & Hardy movies. As a result, theevidence is insufficient to establish the standard for publica-tion set forth in American Vitagraph. See American Vita-graph, 659 F.2d at 1028 ("[M]otion picture publication occurswhen prints of a film are made available under a lease or simi-lar arrangement to theatre operators for public exhibition.")Nothing in La Cienega remedies this shortfall in the evidence.4IV. The District Court Did Not Err in FindingWillful InfringementThe district court found, pursuant to 17 U.S.C.S 504(c)(2),that Agee willfully infringed Dolman's copyrights because hecontinued producing and marketing the "Music Box " records,and began importing the Beau Hunks records, despite know-ing that someone owned the copyrights in the music, andbeing presented with evidence regarding Dolman's claim ofownership.[13] In the copyright infringement context, "willful" meansacting "with knowledge that [one's] conduct constitutes copy-right infringement." See Columbia Pictures Television v.Krypton Broadcasting of Birmingham, Inc., 106 F.3d 284,293 (9th Cir. 1997), rev'd on other grounds by Feltner v.Columbia Pictures Television, Inc., 118 S.Ct. 1279 (1998).The district court's finding of willful infringement is reviewedfor clear error. Id. [14] Agee argues that the district court's findings wereclearly erroneous because he demonstrated a reasonable goodfaith belief in the innocence of his conduct. See ColumbiaPictures, 106 F.3d at 293. According to Agee, any infringe-ment was not willful because the title situation regarding thecopyrights for the Shield songs was cloudy. Further, Ageeclaims that he had reason to believe that HRS, which gavehim permission to use the songs, owned the copyrights. Ageedid in fact have the approval of Roach and Glick of HRS todistribute the Music Box records. However, after consultingwith copyright counsel, Agee was told that the situation withrespect to the songs was "a mess."As to the Beau Hunks' recordings, Agee imported thoseCDs after being solicited by a European licensee of HRS,who, it turns out, had rights to the music worldwide, exceptin the United States.Agee also explains that he refused Dolman's offer tolicense the songs because Dolman would not promise toindemnify Agee in the event of a third-party claim. Agee con-tends that if Dolman had been sure that he was the titleholder,Dolman would have had no problem with such an indemnifi-cation agreement.[15] Because Agee continued to infringe on the song copy-rights when he knew that there was a question as to their own-ership, and when he was presented with evidence that Dolmanwas the true owner, the district court did not err in finding thatAgee's infringement was willful.V. The District Court Properly AwardedAttorney's FeesThe district court awarded Dolman attorney's fees pursuantto 17 U.S.C. S 505. That section allows the court, in its discre-tion, to award to the prevailing party reasonable attorney'sfees as part of costs. Because we affirm the district court'sfindings as to Agee's liability, we affirm the attorney's feeaward as well. AFFIRMED. the end
___________________________FOOTNOTES 1 The district court properly applied the 1909 Copyright Act to deter-mine whether the songs created by Shield in the 1930s were "works forhire" whose copyright presumptively vested in his employer. The 1909Act is the applicable law in cases in which creation and publication of awork occurred before January 1, 1978, the effective date of the 1976 Act.See Magnuson, 85 F.3d at 1427.2 Agee also argues that the district court misappropriated the burdens ofproof on the works for hire issue. To the contrary, the trial transcriptshows that district court was well aware that the Dolman bore the ultimateburden of proof to rebut any credible evidence that the songs were com-posed as works for hire.3 Agee also cites Maljack Productions, Inc. v. Goodtimes Home VideoCorp., 81 F.3d 881 (9th Cir. 1996). This case is inapposite because theMaljack court was merely interpreting a contract between the parties as toownership of synchronization rights. Moreover, the court explicitly statedthat it was not deciding "whether the synchronization rights existed as partof the music copyrights, the movie copyrights, or independently . . . ." Id.at 885 n.3.4 Because we hold that there was insufficient evidence of publicationpresented to the district court, we need not reach the still unsettled ques-tion of whether, under the 1909 Act, publication of a motion picture withthe prescribed copyright notice provides copyright protection for themotion picture soundtrack and underlying musical compositions as"component parts" of the copyrighted movie.