Legal Problem Solving: It's a Wonderful Lifeby John Aquino on 03/20/12
One of the things I especially like about being an attorney is the problem solving aspect. In law school, you study case law, precedent. But very seldom does someone come into your office and you can say, "Open and shut. Goldenberry v. Madison makes it a slam dunk." The facts of that case will be different from your case. The precedent may be strong, but is it strong enough? And what if the precedent appears to go strongly against your case, That's when you take your case apart piece by piece and see what you've got.
As an illustration of legal problem solving, especially as it relates to intellectual property, I like the story about the rebirth of It's a Wonderful Life.
It’s a Wonderful Life was a Christmas movie released the year after World War II ended. It was both wondrous and dark—telling the story of a man who contemplates killing himself on Christmas Eve so that his family will get the insurance money and is shown by an angel what the world would have been like had he not existed. It was also James Stewart’s first movie after four years of military service.
Frank Capra directed it, and Liberty Pictures, an independent production company he co-founded, produced it. When it was released in 1946, while it won Academy Award nominations for best picture, best screenplay, and best actor, It’s a Wonderful Life was not a major hit.
Although the star and director evidently were, audiences were not ready to explore a dark but ultimately redeeming Christmas-time movie. It was, as is said about a number of classics such as Citizen Kane that did poorly at the box office, ahead of its time. Liberty Pictures ultimately disbanded, and Capra spent most of the 1950s retired. He returned to make A Hole in the Head in 1959 and Pocketful of Miracles in 1961 and then retired again for good. He died in 1991.
A company called NTA acquired the rights to It’s a Wonderful Life and other independently-made movies—movies not made by major studios who had their own legal departments and routines.
Under the Copyright Law that was in effect at the time, published works—which included films—could be registered for copyright protection for 28 years and renewed for another 28 years. If the copyright was not renewed, then the work fell into the public domain, which meant that anyone could use it without permission of the former copyright owners.
NTA became Republic Pictures. For whatever reason, Republic did not renew the copyright for It’s a Wonderful Life, and the movie fell into the public domain in 1974. Public television stations especially suddenly found that there was a Class A Christmas movie that they could show for free. It’s a Wonderful Life was rediscovered and embraced.
Soon, the film was being broadcast throughout the country. In 1989, in New York City alone, it was shown 29 times during the Christmas season. But, because the film was in the public domain, Republic Pictures did not make a dime on the film’s revived popularity, all because they had not renewed the copyright.
And so, in the early 1990s, coincidentally, after Capra died, Republic Pictures set itself a task--to see if the copyright could somehow be reclaimed. There were strategy meetings and discussions. They went through every aspect of moviemaking--cinematography, costumes, the music soundtrack, the script. One thing that people need to know about movies is that they are the sum of their parts. A movie is copyrighted as a whole new work. But there are independently-created elements to every film. The creators of those pieces can be employees of a studio, in which case the studio owns the copyright of their work, or the creator can contractually assign the copyright to the studio, or the creator can claim copyright in the work and license it to the studio. In addition, a script can be based on a short story or novel or even another film and be considered a “derivative work” from a copyrighted work. The U.S. Supreme Court had held in 1990 concerning another James Stewart film—Alfred Hitchcock’s Rear Window--that the rights of the underlying work on which a derivative work was based did not themselves expire just because the rights in the derivative work expired—Stewart v. Abend, 495 U.S. 207 (1990).
Republic checked and found it still owned the rights to the story on which the screenplay for It’s a Wonderful Life was based—“The Greatest Gift” by Philip Van Doren Stern. As a backup, in 1993, it purchased the rights to the film’s musical score by Dimitri Timokin from his family, which had been copyrighted separately. Armed with the Supreme Court decision concerning the underlying story and with the copyright in the music that permeated the film’s soundtrack, Republic issued a notification to all concerned and perhaps especially to television stations that broadcast of the film without its permission would violate its copyrights. It then sold exclusive broadcast rights to NBC Television. As of this writing, its claim has not been seriously challenged, and the film has only been shown under Republic’s license.
The story of It’s a Wonderful Life is a lesson in problem-solving. The problem seemed impossible to solve. Republic had let the copyright in the movie expire! The movie was commonly thought to be in the public domain. But the attorneys and executives at Republic sat down and thought it out. They broke the problem into components and realized that the movie itself was broken into components. The idea of buying the copyright for the music and telling public television stations, “Go ahead, show the movie, but you can’t play the music,” is intriguing. But that was only their backup. What they understood was that the movie was a “derivative work” under copyright law. The Supreme Court decision in Stewart confirmed that the rights of the original story—including the right to make, show, and distribute a derivative work—were still protected by the copyright law. Republic owned them and so could claim copyright in the film.
Problem solving, taking the problem apart and laying its parts out, is one of the most fascinating aspects of the practice of law.
Note: This is a response to comment no. 3 below. It took up more space that the comment area allowed: By buying the copyright for the music, Republic was able to say to anyone, like a public television station, by showing the film (which includes the music) you will be violating our copyright. But, that was just to start. Republic then found that the rights to the original story had been purchased when the film was being made and that that copyright had been renewed. And, under a court decision concerning the Hitchcock movie Rear Window, the court ruled that when a movie is adapted from a work that is protected by copyright, even if the movie falls out of copyright protection (in this case through nonrenewal), the copyright for the original work extends to the movie. In other words, Republic determined that It's a Wonderful Life had not really fallen into the public domain after all--they didn't find out for 20 years and so public television stations and others had been allowed to broadcast the film without permission. Republic reasserted their rights, Paramount took over that assertion, and so far no one has successfully contested Paramount's copyright claim. This is why the movie has been broadcast exclusively on NBC, which obtained the rights from Republic/Paramount.
Copyright 2012 by John T. Aquino. This article does not represent a legal opinion. The opinions are those of the author and are presented for educational purposes.