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SHOPTALK, LTD. v. CONCORDE-NEW HORIZONS CORP.

September 8, 1995

SHOPTALK, LTD. and ALAN MENKEN, Plaintiffs, - v - CONCORDE-NEW HORIZONS CORP., Defendant.


The opinion of the court was delivered by: BATTS

 DEBORAH A. BATTS, U.S.D.J.

 This is a contract action based on diversity jurisdiction. The central issue is whether the expiration of Defendant Concorde-New Horizons Corporation's ("Defendant") copyright in the Motion Picture terminates the obligation of Plaintiffs Shoptalk, Ltd. and Alan Menkin (together "Plaintiffs") to pay royalties pursuant to a contract entered into by the parties in 1983 ("the 1983 Agreement"). Plaintiffs seek a declaration that, as a result of the expiration of the Motion Picture copyright, they are no longer bound by the terms of the 1983 Agreement. Defendant seeks a declaration that Plaintiffs are bound by the terms of the 1983 Agreement, despite the expiration of the Motion Picture copyright. Alleging there are no genuine issues of material fact, both parties have moved for summary judgment *fn1"

 Facts

 In 1959, Charles Byron Griffith ("Griffith") wrote an original screenplay ("the Screenplay") entitled Little Shop of Horrors. The Screenplay was produced as an original motion picture ("the Motion Picture") in 1960. In 1983, the owners of the Motion Picture rights ("Millennium"), Griffith, and The Little Shop Company entered into an agreement to license the musical play version ("the Musical") of the Motion Picture.

  Under the 1983 Agreement, Alan Menken, the Musical's author, and Howard Ashman, the Musical's composer, agreed to pay royalties for the use of the Motion Picture and Screenplay. *fn2" Following the 1983 Agreement, Ashman assigned his rights to Plaintiff Shoptalk. In addition, Defendant became the successor-in-interest to Millennium.

 Paragraph Ninth of the 1983 Agreement provided that the copyright holders would renew their copyright before the expiration period and that "if the Owner should fail . . . to renew or extend such copyright . . . the Author shall have the right to execute or record such document . . . as Owner's irrevocable attorney-in-fact." Neither party renewed the Motion Picture copyright, pursuant to this provision, and in 1988 the Motion Picture passed into the public domain. (3(g) Statement P 40.) Sometime prior to 1991, Plaintiffs discovered that the Motion Picture copyright had expired and ceased paying royalties to Defendant. (3(g) Statement PP 50-51.) Plaintiffs, however, continue to pay royalties to Griffith, who is not a party to this action.

 In 1992, the Plaintiffs brought a separate action in the Central District of California to enforce certain rights under the 1983 Agreement. That action was settled by the parties on May 27, 1993. (3(g) Statement PP 56-57.) On July 23, 1993, Plaintiffs brought the present action seeking relief from their obligations to Defendant under the 1983 Agreement.

 Plaintiffs allege that their obligations to Defendant under the 1983 Agreement terminated upon expiration of Defendant's copyright in the Motion Picture. Plaintiffs, however, do not dispute their continued obligations to Griffith. On the other hand, Defendant claims that although the Motion Picture copyright expired, the 1983 Agreement was not coterminous with copyright protection. Moreover, it claims that the Screenplay copyright operates to preserve its rights under the Agreement. In response, Plaintiffs dispute the validity of the Screenplay's copyright protection, arguing that both works were simultaneously published and therefore expired simultaneously.

 Plaintiffs move for judgment on the pleadings, or, in the alternative, for summary judgment. They seek a declaration that the 1983 Agreement is no longer valid and request the return of royalties paid to Defendant after 1988. Defendant cross-moves for summary judgment on the claim for declaratory relief and asserts a claim for royalties owing pursuant to the 1983 Agreement. Because the parties rely on affidavits, the motion will be treated as one for summary judgment. See Fed. R. Civ. P. 56(e).

 Discussion

 Summary judgment is appropriate under Rule 56 where, as here, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Corselli v. Coughlin, 842 F.2d 23 (2d Cir. 1988).

 The central issue is whether expiration of the Motion Picture copyright terminates Defendant's rights under the 1983 Agreement which were based on that Motion Picture copyright. April Productions, Inc. v. G. Schirmer Inc., 308 N.Y. 366, 126 N.E.2d 283 (1955), is dispositive of this issue.

 In April Productions, the New York Court of Appeals held that contractual royalty agreements cannot survive the expiration of the underlying copyright. The case involved the English version of a German musical play produced in America by the Shubert Theatrical Company. Shubert acquired the rights to the music in the English version, which had been completely rewritten by certain composers, and contracted with Defendant Schirmer for publication of the music. Schirmer paid royalties to Shubert under the agreement until the end of the first statutory copyright period. At that time, Shubert failed to arrange for the copyright's renewal, and as a result ...


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