Under the Copyright Act of 1976 (the "Act"), ownership of a copyright is "distinct from ownership of any material object in which the work is embodied," and "transfer of ownership of any material object . . . does not of itself convey any rights in the copyrighted work embodied in the object." 17 U.S.C. § 202. Hence, if the language of transfer is ambiguous, the contract will be read to transfer only the material object, not ownership of the copyright itself.
While the Act does not require the use of the word "copyright" in a contract to render the contract unambiguous in this respect, see Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 413 (7th Cir. 1992) (although agreement transferring assets did not use the word "copyright," its "wording" left little doubt that all assets, "tangible and intangible alike," including copyrights, were sold), in some instances courts have interpreted the absence of that word to create an issue of intent. In Playboy Enterprises, Inc. v. Dumas, 831 F. Supp. 295 (S.D.N.Y. 1993), aff'd in relevant part and rev'd in other respects, 53 F.3d 549 (2d Cir. 1995), cert. denied, 516 U.S. 1010, 133 L. Ed. 2d 491, 116 S. Ct. 567 (1995), a case involving the transfer of paintings, the Court held that the phrase "all right, title and interest" appearing in a legend stamped on the back of checks used to pay for the paintings was not sufficient, by itself, to transfer the copyrights to the paintings. The Court wrote that "unless there is evidence of an intention to transfer copyright, a writing merely reciting transfer of an object will not transfer the copyright." 831 F. Supp. at 309; see also Kenbrooke Fabrics Inc. v. Soho Fashions Inc., 1989 U.S. Dist. LEXIS 11588, 13 U.S.P.Q.2D (BNA) 1472, 1476 (S.D.N.Y. 1989).
In the context of software, at least one court has held that language similar to "all right, title and interest" was sufficient to transfer the copyright, see Relational Design & Technology, Inc. v. Brock, No. 91-2452- EEO, 1993 WL 191323, at *6 (D. Kan. May 25, 1993) (transfer of "all rights to the completed program with no licensing or royalties fees due" included copyright); cf. S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1088 (9th Cir. 1989) (holding that in "the context of the parties' entire agreement," the phrase "all rights of ownership" "plainly encompasses not only copyright ownership, but also ownership of any copies of the software"), while at least one other court has held it does not. See Friedman v. Stacey Data Processing Servs., Inc., 1990 U.S. Dist. LEXIS 14621, No. 89 C 4444, 1990 WL 172586, at *5 (N.D. Ill. Nov. 1, 1990) (contract stating that plaintiff owned software programs "in their entirety" not sufficiently clear to include copyrights in software).
In the instant case, however, there is no ambiguity. The only reasonable interpretation of the pertinent language of the EASi Stock Agreement is that the parties intended the transfer of all rights, including copyrights, to all of Eastern's programs and software, including the CRS software.
The language of the EASi Stock Agreement is clear and unambiguous. Eastern transferred "all right, title and interest" to "all of [its] computer programs and software." No exception was carved out for copyrights; no rights, titles or interests were retained; and the transfer was not just of a "license." Indeed, another provision of the Agreement provides:
[EASi] and [Eastern] agree that title and ownership of the Software is being transferred to [EASi] and that the software is agreed to be [EASi]'s proprietary information and trade secret, regardless of whether any portion thereof is or may be validly copyrighted or patented.