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IP/Entertainment Case Law Updates

Ennio Morricone Music Inc., v. Bixio Music Group Ltd.

Second Circuit reverses district court’s grant of summary judgment, finding that famed Italian film composer Ennio Morricone can reclaim copyright to scores he composed for six Italian films in the 1970s and 1980s under Copyright Act’s termination right and concluding that works were not “made for hire” under Italian law.

Famed composer Ennio Morricone was commissioned in the late 1970s and early 1980s by the Italian affiliate of defendant, Bixio Music Group Ltd., to compose six scores for six Italian films. Bixio and Morricone entered into written agreements, each of which required Morricone to compose an original music score, arrange said music and conduct the orchestra that was to play each musical score. In return, Morricone received a one-time upfront payment of 3 million Italian lire, limited royalties, a credit in the film and three hundred phonographic disc copies. The agreements contained the transfer to Bixio for the “maximum total duration permitted by laws in force of each country in the world” and “all rights of economic use of the works worldwide.” 

In 2012 and 2013, Morricone sent termination notices to Bixio pursuant to 17 U.S.C. Section 203. Bixio refused to recognize the termination notices, arguing that the scores were works for hire and not subject to termination. Subsequently, the plaintiff filed this declaratory judgment action seeking a declaration that the terminations were effective. 

Under 17 U.S.C. Section 203, an assignment may be terminated after 35 years. The only exception to termination is when a work is made for hire. The parties agreed that Italian law governed both the contracts and the dispute. Bixio claimed that the determinative question was whether Italian law contains a counterpart to the U.S. made for hire doctrine. Bixio argued that the Italian doctrine governing “commissioned” works is sufficiently close to the made for hire doctrine under U.S. law. The district court agreed and granted summary judgment for Bixio, finding that the works were the Italian equivalent of works made for hire. 

The Second Circuit reversed. First, the court focused on the designation of who is considered the “author” (the commissioner or creator), because under Section 203, the assignment of rights by the author is subject to termination. U.S. and Italian law notably differ in how they allocate authorship. For example, in a case of work made for hire under 17 U.S.C. Section 201(b), the person for whom the work is prepared is considered the author unless the parties agree otherwise in writing. The result is that the commissioner of the work is vested as author from the work’s creation with all rights to economic exploitation. In contrast, Article 44 of the Italian Copyright Code determines the composer of music to be a “joint author” of cinematographic work, alongside the writer and artistic director. The composer retains sole authorship of the score itself. 

Next, the court noted that under Italian law, there is no required use of a technical phrase to qualify work as commissioned. Conversely, under 17 U.S.C. Section 101, unless the work was created by an employee for an employer, there must be writing signed by both parties that specifies that the work was made for hire. While the U.S. requirements are easy to apply, the Italian scheme, which does not require a writing in order to qualify a work as commissioned, is missing an important part of the U.S. system. The court determined that this could result in a dangerously overbroad application of the made for hire doctrine. 

Bixio emphasized that Italian law permits an author to assign via contract all rights in a work to the commissioners and that the parties executed this type of contract in this case. Bixio claimed that this contractual assignment demonstrated the parties’ intent to allocate rights as if made for hire under U.S. law. The court took into account that the transfer of “all rights of economic use” was for “the maximum total duration permitted by the laws in force in each country in the world.” But the court found that while the wording is obviously intended to be expansive, it did not foreclose on the application of Section 203 to terminate after 35 years.

Finally, the court explained that the contractual form of assignment is telling because an assignment, no matter how expansively phrased, is still subject to the termination right. And because Italian law does not recognize the commissioning party of a work as an author like the U.S. does under the work for hire doctrine, any contractual assignment under Italian law is subject to termination, and accordingly, it reversed the judgment of the district court. 

Summary prepared by Linna Chen and Mariah Volk