Rip programs are included in the ColorSystem I program marketed
Each of the five copyright registrations lists William Bates
as the author of the work, and KEI as the copyright claimant.
The registration form requires the copyright claimant, if
different from the author, to give a brief statement as to how
the claimant obtained ownership of the copyright. In response
to that direction, each registration contains the phrase
"transfer of all rights by author." Brooks signed each of the
five copyright applications on behalf of KEI on June 5 or 7,
1989. He commenced this action on June 27, 1989.
Brooks alleges in his complaint that prior to April 1988,
Bates had been doing business on his own under the name
"Knowledge Engineering," but had never incorporated under that
name. Brooks alleges that in April 1988, Bates needed money,
from a business standpoint and personally as well. Without
money Bates was unable to develop the ColorSystem I computer
software package. Brooks alleges in substance that he and Bates
formed KEI, Brooks contributing the funds and Bates the
computer expertise. Subsequently, Brooks alleges, he discovered
that Bates, in violation of KEI's corporate existence and in
violation of his fiduciary obligation to the company, set
himself up in a separate business as "Knowledge Engineering"
and began to deal directly with customers of KEI.
Accordingly Brooks commenced this action. The first cause of
action, which lies at the heart of the present motion, alleges
that KEI is the owner of the five copyrighted programs and that
Bates is infringing those copyrights.
Bates interposed an answer consisting of a general denial,
several affirmative defenses, and five counterclaims. Bates'
second affirmative defense alleges that the Court lacks subject
matter jurisdiction under the Copyright Act. The first
counterclaim alleges fraud on the Copyright Office and prays
for an order cancelling the certificates of registration in
KEI's name. The other four counterclaims seek a declaration
that plaintiff and the nominal corporate plaintiff have no
interest in the propriety material; injunctive relief and
compensatory damages; damages for abuse of process; and an
Plaintiff's reply to the counterclaims alleges, inter alia,
that KEI is the registered owner of the copyrights (first
affirmative defense); that Bates' rights to the programs were
transferred to KEI by operation of law (second affirmative
defense); that Bates' claim to trade secrets in the programs
were transferred to KEI by operation of law; that Bates as
author of the program transferred his copyrights to KEI "by his
notice of copyright placed by him on copies of said computer
programs" (fourth affirmative defense); and that Bates as
author of the programs transferred his copyrights to KEI "by
parol agreement . . . prior to the registration of said
copyrights" (fifth affirmative defense).
Brooks also appended to his reply to Bates' counterclaims a
self-styled "first counterclaim" for breach of contract and a
"second counterclaim" for unjust enrichment.
Bates moves for an order of dismissal or summary judgment on
Brooks' first cause of action. Because the parties have
submitted material falling outside the pleadings which the
Court has considered, I treat the motion as one for summary
judgment under Rule 56. Bates also moves for summary judgment
on Brooks' first five affirmative defenses, and to dismiss the
two counterclaims referred in Brooks' reply to Bates'
Copyright protection "subsists . . . in original works of
authorship fixed in any tangible medium of expression."
17 U.S.C. § 102(a). The limited monopoly granted to an author by
the Copyright Act "is a means by which an important public
purpose may be achieved. It is intended to motivate the
creative activity of authors and inventors by the provision of
a special award, and to allow the public access to the products
of their genius after the limited period of exclusive control
has expired." Sony Corp. v. Universal Studios, Inc.,
464 U.S. 417, 429, 104 S.Ct. 774, 782, 78 L.Ed.2d 574 (1984). In
the case at bar, plaintiff concedes that Bates is the author of
the computer programs at issue.
The Copyright Act of 1976 provides at 17 U.S.C. § 204(a):
A transfer of copyright ownership, other than by
operation of law, is not valid unless an
instrument of conveyance, or a note or memorandum
of the transfer, is in writing and signed by the
owner of the rights conveyed or such owner's duly
It is common ground that Bates never executed a written
transfer of his copyright ownership in the computer programs to
KEI, to plaintiff Brooks, or to anyone else. Accordingly the
question is whether the record establishes a transfer of
copyright ownership "by operation of law." If such a transfer
took place, it need not be in writing.