MVP Entertainment v. Frost

California intermediate court of appeal affirms grant of summary judgment in favor of defendants, author, and holder of copyright in book in plaintiffs’ action alleging breach of contract, among other claims, finding that lawyer for defendants did not have actual authority to transfer the copyright, and his e-mail acknowledging receipt of the general economic terms of the proposed deal was not a written agreement to transfer copyright as required by the Copyright Act.

Plaintiffs, MVP Entertainment and its president, Robert Frederick, brought suit against defendants, Mark Frost, author of the book The Match: The Day the Game of Golf Changed Forever, and Good Comma Ink, to which Frost assigned the copyright and of which Frost is the sole owner, asserting breach of contract, promissory estoppel, declaratory relief, and negligent misrepresentation based on MVP’s claim that defendants entered a contract or promised MVP they would enter into a contract to allow MVP to make a movie of The Match. The lower court granted summary judgment in favor of defendants, and the court of appeal affirmed, concluding that Section 204 of the Copyright Act requires a written agreement to transfer copyright in a work by the holder or a duly authorized agent, that the lawyer for defendants did not have actual authority to transfer the copyright in the book, and that his e-mail acknowledging receipt of the general economic terms of the proposed deal was not a written agreement to transfer the copyright as required by the Copyright Act.

In 2008 and 2009, lawyers for both parties corresponded regarding MVP’s potential acquisition of the copyright in The Match in order to make a movie. On April 30, 2009, William Jacobson, on behalf of plaintiffs, sent Alan Wertheimer, defendants’ lawyer, an e-mail proposing certain deal terms and stating, “Let me know if this is okay and we’ll send paperwork....” Wertheimer responded: “Done...thanks! Werth.” Although Jacobson subsequently sent Wertheimer the proposed agreement and requested that Wertheimer get defendants to sign it, the parties never executed a formal agreement. Shortly thereafter, Frost told Frederick that he did not want MVP to make the movie, and plaintiffs brought suit, alleging that Wertheimer’s e-mail was signed by the lawyer and created a binding contract. The lower court granted summary judgment in favor of Frost and Good Comma Ink, based on section 204 of the Copyright Act, which requires that a transfer of ownership in copyright be in writing and signed by the owner or the owner’s duly authorized agent.

The court of appeal affirmed, holding that Section 204 clearly requires a writing to transfer ownership of copyright by the owner or a duly authorized agent and that the evidence was undisputed that Wertheimer did not have actual authority to transfer the copyright in Frost’s book. According to the affidavits in support of defendants’ motion for summary judgment, the lawyer negotiated deals on behalf of Frost and Good Comma Ink, but did not sign contracts. Wertheimer also stated that he did not intend his e-mail that stated “Done...thanks!” to convey any of Frost’s rights, but to simply note that the parties were in accord on the broad economic terms of a deal and that Wertheimer did not intend his typed nickname “Werth” to constitute a signature or to bind himself or Frost to anything. Frost also stated that he had not given Wertheimer actual authority to transfer rights in his intellectual property, including rights in The Match.

The appellate court also rejected plaintiffs’ argument that Wertheimer had ostensible authority to transfer the copyright in The Match, since ostensible authority is insufficient under Section 204 to transfer the copyright, and plaintiffs’ belief that Wertheimer had this authority was irrelevant. The court concluded that plaintiffs’ failure to raise a triable issue of fact with respect to transfer under Section 204 defeated all their claims.