The opinion of the court was delivered by: Miriam Goldman Cedarbaum, United States District Judge
Plaintiffs claim ownership of the late Ian Fleming's copyright in the story Chitty Chitty Bang Bang: the Magical Car ("Chitty Chitty Bang Bang," the "Work"), and assert that defendants have infringed the renewed copyright by distributing a movie based on that story. Plaintiffs move for partial summary judgment on the issue of defendants' liability for copyright infringement. Defendants argue that plaintiffs do not own the film rights to Chitty Chitty Bang Bang and, alternatively, that equitable doctrines bar relief. Defendants request dismissal of the claims against Danjaq LLC ("Danjaq") and Eon Productions Limited ("Eon"). For the following reasons, plaintiffs' motion is denied, and defendants' request is granted.
The history of this action begins in 1962 when Ian Fleming, a veteran author and the creator of James Bond, finished writing Chitty Chitty Bang Bang. On December 7, 1962, Fleming assigned rights in the Work to Glidrose Publishing Ltd. ("Glidrose"), a company of which he was the sole owner. The assignment to Glidrose included all of Fleming's rights in the Work except film, television, serial, and cartoon strip rights. One week later, on December 19, 1962, Fleming assigned these remaining rights in the Work to a trust created for the purpose of holding rights in his books (the "Book Trust").
On June 12, 1963, approximately six months after the assignment from Fleming to Glidrose, Glidrose entered into an agreement with a third party to publish the Work in the United Kingdom. On September 18, 1963, Fleming entered into an agreement with Random House to have the Work published in the United States. Fleming proceeded to prepare the Work for publication, including reviewing and revising the publishers' drafts of his story.
On August 12, 1964, two months before the Work was published, Fleming died. His estate passed into the control of another trust (the "Will Trust") that was established for the benefit of his family. Under the law of the United Kingdom, the trustees of the Will Trust are vested with all the rights and responsibilities of executors of Fleming's estate.
After Fleming's death, the Work was published in periodical and book form. Random House registered a periodical version of the Work with the United States Copyright Office on November 24, 1964 and a book version on January 8, 1965. Random House listed Glidrose as the claimant and Fleming as the author.
On May 5, 1965, the Book Trust assigned the film and television rights in the Work to Eon. That assignment purported to include the film and television rights "throughout the World for the entire period of copyright and all extensions and renewals thereof." In a later provision in the same assignment to Eon, the trustees of the Book Trust warranted that "the Trustees are the absolute owners of the rights herein intended to be granted and assigned to the Purchaser hereby" and further agreed to indemnify Eon for any damages arising from a breach of that warranty. Eon assigned its interest in the Work to Danjaq. Danjaq assigned its interest in the Work to United Artists Corporation ("UAC"), MGM's predecessor in interest. In 1968, UAC financed and distributed a film version of the Work.
At the time the Book Trust assigned the film rights, the Book Trust and Will Trust held separate interests in the Work, were governed by separate trust documents, and were controlled by different trustees. The trusts, however, had overlapping beneficiaries. In 1965, the beneficiaries of the Will Trust were Ian Fleming's widow and son as well as Fleming's brother and his brother's three daughters. During the same period, the beneficiaries of the Book Trust included all of the beneficiaries of the Will Trust as well as Fleming's stepdaughter and her family. None of the trustees of the Book Trust also served as a trustee of the Will Trust.
Under the copyright law then in effect, the Work had an initial copyright term of 28 years and was eligible for renewal on January 1, 1993. Raymond Arthur Clanaboy, Baron O'Neill, one of the original trustees of the Will Trust, applied for renewal of the periodical copyright on July 15, 1992 in his role as trustee. He applied for renewal of copyright in the book on August 5, 1992.
By the time the renewal term began on January 1, 1993, the trustees and trust beneficiaries had changed. Ian Fleming's widow, son, and brother had all died. One of Fleming's nieces, for reasons not in the record, no longer benefited from the trusts. The remaining two nieces had married, and their husbands and children also benefited from both trusts. Ian Fleming's stepdaughter and her family continued to benefit from the Book Trust but not the Will Trust and remained the only beneficiaries who did not benefit from both. By this time, the trustees had changed as well. All of the original trustees of the Will Trust except Baron O'Neill had been replaced. Defendants argue that the most significant change was the inclusion of one of Ian Fleming's nieces, Kate Grimond, as a trustee of the Book Trust. At that time, Grimond was a trustee of the Book Trust as well as a beneficiary of both the Book Trust and the Will Trust.
After the renewal term began in 1993, MGM continued to exploit the film version of the Work by assigning television rights and selling VHS and DVD copies. Most significantly, MGM asserts that in 2002 it spent approximately $1.6 million on a special edition DVD version of the Work. MGM currently sells copies of the film and has obligations to assignees that continue until 2012. Between 1993 and the date on which this action was commenced, plaintiffs and defendants were in intermittent contact regarding the Work.
Presently, two of Ian Fleming's nieces, Lucy Williams and Kate Grimond, and their families continue to benefit from both trusts. Ian Fleming's stepdaughter and her family continue to be beneficiaries only of the Book Trust. Kate Grimond and Lucy Williams are now the sole trustees of the Book Trust. The trustees of the Will Trust are Legislator 1357 and Legislator 1358, entities wholly controlled by Kate Grimond and Lucy Williams. Defendants emphasize that both trusts are now controlled by the same two trust beneficiaries. This is in marked contrast to the structure of the trusts in 1964, when there was no overlap among the trustees of the two trusts and when no beneficiary of either trust served as a trustee.
Despite MGM's continuous distribution of a derivative work based on Chitty Chitty Bang Bang, plaintiffs now claim that defendants have had no right to the Work since the first copyright term ended thirteen years ago. Plaintiffs argue that by operation of 17 U.S.C § 304 the renewed copyright vested in the Will Trust, of which they are the trustees. Plaintiffs argue that the trustees of the Book Trust could only grant a contingent interest in the renewal term and since the copyright in the renewal term vested in the trustees of the Will Trust, only a grant by the trustees of the Will Trust could have given defendants rights in the renewed copyright.
Defendants present three arguments in support of their contention that their exploitation of film rights does not infringe the renewed copyright in the Work. First, defendants argue that Chitty Chitty Bang Bang is a posthumous work and that therefore the renewal rights vested in the Book Trust, the then proprietor of the copyright, and not in the Will Trust. Second, defendants argue that the two trusts are so similar that a transfer of renewal rights made by the Book Trust can be attributed to the Will Trust.
Third, defendants argue that equitable principles bar plaintiffs' claim against them.
A motion for summary judgment should be granted if the court determines, from the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue of material fact exists when the evidence is such that a reasonable finder of fact could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Richardson v. Coughlin, 763 F. Supp. 1228, 1234 (S.D.N.Y. 1991). In deciding whether a genuine issue exists, the court must "examine the evidence in the light most favorable to the party opposing the motion, and resolve ambiguities and draw reasonable inferences against the moving party." In re Chateaugay Corp., 10 F.3d 944, 957 (2d Cir. 1993). The moving party bears the initial burden of informing the court of the basis for its motion and proffering evidence that demonstrates the absence of a genuine issue of material fact.
II. Copyright Renewal Rights
In 1962 when Ian Fleming wrote Chitty Chitty Bang Bang, 17 U.S.C. § 24 (the "1909 Act") entitled an author to copyright for an initial 28 year term with a right to renew the copyright for an additional 28 years. In the initial term, an author's interest in a copyrighted work was vested and could be freely assigned to others. An author's interest in the renewal term, however, was only an expectancy until the initial term ended and the renewal term began. Miller Music Corp. v. Charles Daniels, Inc., 362 U.S. 373, 375 (1960). An author could assign his contingent interest in the renewal term, but if the author died before the date of renewal, the copyright passed, by operation of law, to the author's wife, children, executor, or next of kin ...