Horror, Inc. v. Miller underscores the copyright conflict between creators and their employers. In this case, the Second Circuit determined that Victor Miller was an independent contractor when creating the screenplay for the iconic horror film Friday the 13th and thus had the rights to reclaim the copyright to the screenplay. This ruling marks a significant victory for screenwriters and serves as an instructive case for production companies when entering contracts with writers and other creative professionals.
Factual Background – Why Was the Friday the 13th Franchise in Court?
In 1979, Manny, Inc. engaged Victor Miller to write the Friday the 13th screenplay for the film. In 2016, nearly forty years later, Miller invoked copyright termination, a right granted by copyright law, by sending a notice to Manny, Inc. and Horror Inc. (which had acquired the rights from Manny, Inc.) to take back the rights to his work. Subsequently, the companies filed a lawsuit challenging the validity of Miller’s termination notice.
In Horror Inc. v. Miller, the plaintiff companies argued that because the screenplay for this landmark film was created on a “work made for hire” basis, Miller did not have the right to terminate the copyright. After a five-year legal battle, both the U.S. District Court and the 2nd Circuit Court of Appeals have ruled in favor of Miller, affirming that he was an independent contractor. As an independent contractor, Miller had only temporarily assigned the rights to his script and was entitled to terminate the transfer of his copyright.
Statutory Background – Do You Have Termination Right under the Copyright Law?
U.S. copyright law provides creators (or their successors) with the opportunity to regain ownership of rights they transferred to another party under specific conditions (see 17 U.S.C. §§ 203, 304(c), and 304(d)). It allows creators a second chance to benefit from the financial success of their work, but the rules governing this process can be intricate and stringent.
The right to terminate a copyright transfer can be exercised only between 35 and 40 years after the author initially transferred the copyright. The law requires specific information to be included in the termination notice. Generally speaking, whether the copyright termination is valid depends on three factors:
- When the transfer occurred;
- Who executed the transfer;
- When the copyright was first secured for the work
Notably, the copyright termination provision applies exclusively to transfers or assignments of rights and not to works made for hire.
Therefore, the central issue in the Friday the 13th case was whether the screenplay was created as a “work made for hire.”
What Is a Work Made for Hire?
The “work made for hire” doctrine stipulates that the creator does not own the copyright to a work if:
- The work is prepared by an employee within the scope of employment, or
- The work is specially ordered or commissioned, with the caveat that the work falls into one of the nine types of works listed in U.S. Copyright Law, and the parties explicitly agree in a written instrument signed by them that the work is considered a work made for hire.
The production companies argued that Miller had created the work as an employee within the scope of his employment, thereby qualifying it as a work made for hire. They pointed to the fact that Miller was represented by the Writers Guild of America (“WGA”) union in collective bargaining and that he worked closely with the producer in developing the screenplay, implying a lack of substantial control over his work. Furthermore, Manny Inc. had registered the copyright as a work for hire with the U.S. Copyright Office.
However, the Court rejected these arguments, focusing on factors that indicated Miller was an independent contractor, such as:
- The absence of employee benefits;
- Miller being paid in lump sums without tax deductions;
- Miller’s sole writer credit.
Additionally, Miller didn’t work on any other projects for the companies, and the companies were only involved in the general approval of the script rather than its development. The Court noted that registering the work as a work for hire merely created a presumption to that effect, but Miller successfully rebutted this presumption.
What Does This Decision Mean for Screenwriters?
The ruling in Horror Inc. v. Miller holds significant implications for screenwriters. It makes it easier for screenwriters to establish their rights as the original creators of a work, allowing them to terminate the transfer of their rights under copyright law. If termination is successful, anyone looking to use copyrighted work must negotiate with the screenwriter for a new license, which may result in additional revenue for writers.
Going forward, anyone hiring screenwriters must carefully consider how to safeguard their rights. Speak to a member of our team to determine how to navigate legal obligations and rights relating to your copyrighted work.
