Re: [CNI-(C) Re: Some advice requested for a minor

We might just have to disagree on this one, but I appreciate the thought-provoking argument.

At 2:14 PM -0500 11/24/05, Vance R. Koven wrote:
>I don't understand what's so important about the commissioner's
>investment that you wouldn't give the minor the one thing that would
>make him/her whole. Allowing someone who, in the worst case, has
>wrested consent from an unknowing person, to keep the fruits of that
>oppression is contrary to everything a system of justice is supposed
>to stand for. Would you allow someone who obtained consent by clear
>fraud to keep the copyright? I can't see any policy justification
>for it. We don't apply that kind of policy to any other form of
>propery, so what's so special about IP? The concept of knowing
>consent is embedded in any concept of contract, and the rules to
>protect minors are a subset of that concept.

Rescission isn't the "one thing" that can make the aggrieved minor whole. The ordinary legal remedy for fraud is damages, plus punitives, which could make him/her more than whole. Even an equitable unjust enrichment claim and constructive trust could make him/her whole without the unsettling consequences of uncertain copyright ownership. It would also take into account actual departures from the conclusive presumption under state law that the minor is an "unknowing person," such as the savvy 17 year-old who was as well-paid as his 18 year-old collaborator; who contributed to a collective work that the commissioner spent a million dollars marketing; and that has been licensed to distributors on the basis of a copyright that was perfectly valid until (and unless) the minor elected to avoid the contract.

>Having a uniform federal rule is not a bad idea, but whatever it is,
>it should acknowledge the underlying rule that all these various
>state manifestations express. If, however, the courts decide to
>defer to the state rules applicable to the particular minor, it
>wouldn't be the first time that federal law filled in from the
>states and permitted a lack of uniformity.

I do think you have to have a uniform federal rule. Federal courts apply state law all the time in diversity cases, but a federal question -- copyright ownership -- that turns on state law strikes me as unworkable, if not an oxymoron. If I had to come up with a federal rule, it would distinguish between voidable executory contracts where a minor sought to avoid a future or continuing contractual obligation (which would never come before a federal court as a federal question), and unavoidable non-executory contracts, which is a WMFH agreement after the work has been done and paid for, and there's nothing left to avoid. That would acknowledge the underlying policy, and track many if not most state rules. Or I would simply resort to equity, ignoring the state codifications -- did the minor know what he/she was doing, did he/she get screwed, is anybody else going to get screwed if we void the agreement and "re-assign" the copyright, is there an adequate remedy at law.

>And the commissioner really can't complain about not being on notice
>unless the minor took pains to conceal his/her age (and even there,
>I think the rule in most states is that the other contracting party
>is the one on whom the risk falls, as the one best able to bear
>it--a harsh result in some cases, but not overall).

That illustrates the problem though. If I hire a programmer to write a computer game, I might ask for his green card, but I'm not going to ask for his birth certificate. I can't even assure myself of the choice of law that applies (16 or 18? Void or voidable?) if the WMFH agreement is unenforceable. The risk might be assigned to the commissioner of the work, but it's also going to fall on the licensed distributor, or the producer who bought the motion picture rights from the putative copyright owner (indeed, not just putative, but actual copyright owner -- until and unless the minor elects to avoid the contract). The risk might even fall on the minor if a parent brings the action to avoid the contract over the minor's objection and against his/her best interests.

This is a special case in that the commissioning of a minor to author a work made for hire would seem to be unusual (and if I had a client who presented the issue, I would join you in recommending that they get a parent to sign off on the contract to moot the issue); but the validity of a contract under state law might arise in other contexts, including lack of mental capacity, mutual mistake, duress, or as you point out, fraud in the inducement -- none of which are peculiar to contracting with a minor, and each of which might warrant rescission under state law. The only thing special about the minor's contract is that the contract might be avoided in law (by statute and without discretion) as well as equity, and might apply to executory as well as non-executory contracts (in some states, sometimes).

It occurs to me that the Copyright Act does not even, in terms, require a valid contract -- only that "the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire." It's not clear that you even need consideration, as required to establish a valid contract under state law. The WMFH agreement might provide: "The parties agree that A's work shall be a work made for hire as a contribution to B for no consideration -- none whatsoever, not even a peppercorn." It's not a valid contract, but doesn't it satisfy the definition of a WMFH? If you don't need consideration, do you need capacity?

John Noble

>On 11/23/05, J. Noble <<mailto:jfnbl[_at_]earthlink.com>jfnbl[_at_]earthlink.com> wrote:
>
>Right, but the federal common law would be a federal court
>construction of the term "parties expressly agree in a written
>instrument signed by them." The one thing we do need is a uniform
>rule so that copyright ownership is settled. So this one is headed
>for the Supreme Court. What should be the federal common law rule on
>the capacity to "agree"?
>
>
>A quick Westlaw search suggests that state laws are all over the
>place. They turn on ages ranging from 14 to 18; they allow from 1
>year to forever to repudiate the contract after the minor reaches
>the age of majority. Most states distinguish between executory and
>non-executory contracts (the WMFH would be executory until the work
>was finished and non-executory after it was done and paid for). Some
>reach non-executory contracts where there is a "deliverable" that
>can be returned (kid delivered the work, not the copyright?). Most
>states exempt contracts for "necessities" but it's a flexible
>concept (an income?). Others distinguish real estate contracts on
>equitable grounds where the buyer has made improvements on the
>property bought from a minor (how about the marketing expense on a
>top-selling computer game created as a WMFH by a 17 year-old?).
>Still others distinguish between void contracts (unfair) and
>voidable contracts (fair enough). Some federal courts hold that
>state law governs the capacity to contract with the federal
>government; but at least one case holds that a minor has capacity,
>notwithstanding state law, to enter a plea agreement on federal
>charges. My favorite is the IRS ruling that minors can't compromise
>a tax debt, and parents can't compromise it for the minor, but who
>cares because the parents are liable for unpaid taxes owed by a
>minor child, so why should the IRS compromise.
><http://www.irstaxattorney.com/offer-in-compromise/minor_child.html>http://www.irstaxattorney.com/offer-in-compromise/minor_child.html.
>
>
>I would avoid this quagmire and go with plain language. If there's
>an express agreement in a written instrument, it's a work made for
>hire and copyright belongs to the hiring party. If the kid got
>screwed he can sue for unjust enrichment, fraud in the inducement,
>and tortious interference with prospective economic advantage. I'll
>give him a constructive trust on future profits. I'll even give him
>punitives. But not the copyright -- when the work may have been
>contributed to a compilation, the owner may have spent a million
>dollars on a marketing campaign, third parties have licensed the
>distribution rights, and somebody bought the motion picture rights,
>before the kid changed his mind.
>
>
>John Noble
>
>
>
>
>At 3:30 PM -0500 11/23/05, Vance R. Koven wrote:
>
>>Well, I think then we have to look at the policy underlying the
>>nullification of contracts by minors. The law frowns on taking
>>advantage of immature persons, and set up this rather rough-justice
>>policy to put people on notice that if they contract with a child,
>>they do so at considerable risk. To deny the minor the benefit of a
>>copyright because (s)he entered into a contract on which almot
>>universal public policy discourages would be a clear violation of
>>that policy. Granted that the policy is a state common-law one
>>(originally, though it may be completely covered by statute now), I
>>think a federal court ruling on a copyright case would look to that
>>policy to inform the federal policy, which I guess is what "federal
>>common law" means nowadays.
>>
>On 11/22/05, J. Noble <<mailto:jfnbl[_at_]earthlink.com>jfnbl[_at_]earthlink.com> wrote:
>
>I was /not/ making the assumption that the WMFH arose in the context
>of employment. To the contrary, I was assuming that it arose in any
>context but employment -- all of which, as you point out, require a
>written agreement. Our disagreement -- and I'm not sure who's right
>-- turns on whether the contract with a minor is void ab initio, or
>subject to rescission. If it is void ab initio, then you are correct
>and the minor is the author, ab initio. But if it is only subject to
>rescission (or enforcement) at the election of the minor or minor's
>guardian, then the work is created pursuant to a written agreement
>as a WMFH in accordance with federal law. Rescission will relieve
>the parties of executory obligations, and restore them to their
>pre-contract position insofar as the contract has not been
>performed, but, as I said, it won't un-mow the lawn -- or divest a
>statutory author of its copyright. At least that's my intuition
>without doing the research.
>
>
>
>
>Where the contract with a minor is void ab initio, I think there is
>a strong case for federal preemption under sec. 301 because you are
>dealing with the rights of the federally defined author under sec.
>106, as to which state law is expressly preempted. The copyright in
>a WMFH should not be void in some states and valid in others.
>
>
>
>
>John Noble
>
>
>
>
>At 4:15 PM -0500 11/22/05, Vance R. Koven wrote:
>
>>I think you're assuming that WMFH "agreements" pertain to
>>employer-employee matters only. It is true that in most places a
>>minor can be an employee, in which case the rule for WMFH would
>>hold. In fact, no agreement is really necessary in an employment
>>situation, since the character of the relationship is determined
>>based on facts and circumstances; an agreement of employment might
>>be powerful evidence of the employee's status, but that's all it
>>would be. There are eight other categories of WMFH under the US
>>law, however, all of which explicitly require an agreement to be
>>effective. If the agreement is voidable, and is then voided, it
>>becomes just that: void, a nullity ab initio. No agreement, no
>>WMFH. In that case, I'd think the minor *would* then become the
>>author, and would be treated as such as from the point of creation
>>of the work. There might be some equitable adjustment, maybe, for
>>the other party's earnings under the copyright, but I doubt that it
>>would go much beyond that.
>>
>
>
>Vance
>
>
>
>On 11/21/05, J. Noble <<mailto:jfnbl[_at_]earthlink.com>jfnbl[_at_]earthlink.com> wrote:
>
>>At 2:18 PM -0500 11/21/05, J. Noble wrote:
>>
>>>(really folks, do we have to
>>>get into federal common law and the preemption issue?).
>>>
>
>
>
>At 1:30 PM -0500 11/21/05, Agenbroad, James \(Civ,ARL/CISD\) wrote:
>
>>If a minor revokes a WMFH contract what happens? Does he become the
>>author? What are the FEDERAL (since copyright is an expressly federal
>>matter) law on revocability of contracts by minors?
>>
>
>
>
>You just had to go there, didn't you. Federal common law, once
>thought not to exist (Erie?), pops up in the strangest places --
>usually because it's essential to have a uniform rule to fill the
>interstices of a comprehensive federal statutory scheme. Here, I
>think it's pretty clear that there is no federal common law of
>contract just for copyrights. Sec. 301 limits the scope of
>preemption to "legal or equitable rights that are equivalent to any
>of the exclusive rights within the general scope of copyright as
>specified by section 106," and expressly does not preempt "any
>rights or remedies under the common law or statutes of any State
>with respect to - . . . (3) activities violating legal or equitable
>rights that are not equivalent to any of the exclusive rights . . .
>." Generally speaking, then, the Copyright Act does not preempt
>state contract law, cf. ProCD v. Zeidenberg. So a minor who authored
>and licensed a work might be able to rescind the license agreement
>under state law.
>
>
>
>
>But the WMFH case is different. Ownership of the copyright would be
>a matter of federal law -- not federal common law but federal
>statute -- depending upon whether there was a written WMFH
>agreement, withal. The court might look to state law to decide
>whether there /ever was/ an agreement, i.e. offer, acceptance and
>consideration; but the minor's right to rescind an agreement isn't
>going to help because it presumes that there /was/ an agreement,
>otherwise valid, but subject to rescission. Rescission of the WMFH
>contract under state law shouldn't divest the statutory "author" of
>its copyright or turn the minor into an "author" under federal law.
>Copyright is not something that rescission can "restore" to the
>minor because the minor didn't have it in the first place. All he
>had was the labor he provided for compensation, and you can't give
>that back. It's like hiring a kid to mow your lawn. His mother might
>rescind the agreement if he's supposed to do it tomorrow, but she
>can't have the court un-mow the lawn if he did it yesterday. That's
>not to say that the kid is without a remedy if the WMFH contract was
>oppressive. He might be entitled to recover the value of his labor
>in quantumn meruit under state law, and maybe even under the Fair
>Labor Standards Act -- but I don't think he gets the copyright.
>
>
>
>
>
>John Noble
>
>>-----Original Message-----
>>From: CNI-COPYRIGHT -- Copyright & Intellectual Property
>>[mailto:<mailto:CNI-COPYRIGHT[_at_]cni.org> CNI-COPYRIGHT[_at_]cni.org] On
>>Behalf Of Bob Panzer
>>Sent: Friday, November 18, 2005 7:45 PM
>>To: CNI-COPYRIGHT -- Copyright & Intellectual Property
>>Subject: [CNI-(C)] Re: Some advice requested for a minor
>>
>>Current copyright term for individuals is life + 70 years NOT life + 75.
>>
>>Sincerely,
>>
>>Robert Panzer
>>
>>VAGA (Visual Artists and Galleries Association, Inc.)
>>350 Fifth Avenue
>>Suite 2820
>>New York, NY 10118
>>Tel: 212 736 6666
>>Fax: 212 736 6767
>><mailto:rpanzer[_at_]vagarights.com>rpanzer[_at_]vagarights.com
>>
>>-----Original Message-----
>>From: CNI-COPYRIGHT -- Copyright & Intellectual Property
>>[mailto:<mailto:CNI-COPYRIGHT[_at_]cni.org>CNI-COPYRIGHT[_at_]cni.org] On
>>Behalf Of J. Noble
>>Sent: Friday, November 18, 2005 3:15 PM
>>To: CNI-COPYRIGHT -- Copyright & Intellectual Property
>>Subject: [CNI-(C)] Re: Some advice requested for a minor
>>
>>Federal law gives you a copyright, and it doesn't matter how old you
>>are -- it's good until you've been dead for 75 years. Astrid
>>Kirchjerr is still collecting on the photos she took of the Beatles
>>while they were playing strip-joints in Hamburg. Whether you can
>>
>license your rights as a minor might be a separate state law issue,
>but it's not obvious, and it doesn't arise unless you or your legal
>
>guardians want to set aside the contract (really folks, do we have to
>get into federal common law and the preemption issue?).
>
>
>Unless the friend raised the issue of competency to enter into a
>contract because he was worried that you would renege, then just
>leave it alone. Don't worry -- be happy. When you give him the
>photographs, he probably gets a non-exclusive, revocable license to
>reproduce and distribute. Without more, i.e. without a written
>agreement, he almost certainly doesn't get any right to modify the
>photos or grant anyone else permission to use them, and you retain
>the right to license anyone else to reproduce and distribute them. If
>you want to get fancy, write it down and get your friend to sign it:
>"Marissa grants ____ the revocable, non-exclusive, non-assignable
>right to reproduce and distribute, without alteration, any photograph
>that she delivers to him, solely for purposes of advertising and
>promoting musical acts that he represents, and that Marissa
>photographs at his request." If he's worried that you might change
>your mind, or that your parents are going to sweep in and revoke his
>rights over your objection, then get your father or mother to add
>"approved" and a signature.
>
>So, just wondering, how much of the music on your iPod is paid for,
>Marissa?
>
>John Noble
>
>At 6:29 PM -0500 11/17/05, Marissa wrote:
>>Hello all,
>>
>>I am 17 years old and am starting my career as a photographer. A
>
> >friend of mine asked me if I would take some pictures for him to help
>>promote some bands. Now obviously I can't enter into a contract, so I
>>have two questions.
>>
>>1) How do I maintain my copyright and integrity of these pictures?
>>
>>2) What are the downfalls of entering into this as a minor?
>>
>>Please, all opinions and advice are welcome.
>>
>>Thanks,
>>
>>Marissa
>>
>><http://www.photographyexposed.com/> www.photographyexposed.com
>>
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>--
>Vance R. Koven
>Boston, MA USA
><mailto:vrkoven[_at_]world.std.com>vrkoven[_at_]world.std.com
>
>
>
>
>
>
>
>--
>Vance R. Koven
>Boston, MA USA
><mailto:vrkoven[_at_]world.std.com>vrkoven[_at_]world.std.com
>
>
>
>
>
>
>
>--
>Vance R. Koven
>Boston, MA USA
><mailto:vrkoven[_at_]world.std.com>vrkoven[_at_]world.std.com
Received on Mon Nov 28 2005 - 21:00:01 GMT