Can A Copyright Be Assigned By Email?–Hermosilla v. Coca-Cola

By John Ottaviani with comments from Venkat and Eric

Vergara Hermosilla v. The Coca Cola Company, No. 11-11317 (11th Cir. Nov. 3, 2011).

Can a copyright be assigned by an exchange of emails? Section 204(a) of the Copyright Act provides that a transfer of copyright ownership is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or by such owner’s duly authorized agent. The 11th Circuit has recently affirmed a lower court’s decision that an exchange of emails was sufficient to constitute a contract to assign a copyright. The court’s decision, however, does not seem to adequately address whether the email exchange satisfies the “writing” requirement in Section 204.

Background

The dispute arises out of Coca Cola’s worldwide marketing campaign for the 2010 FIFA World Cup soccer tournament. As part of its advertising campaign, Coca Cola enlisted recording artist K’Naan to create a new version of his song “Wavin’ Flag,” and called the new version the “Celebration Mix.” Coca Cola had certain lyrics in the “Celebration Mix” adapted and sung in different languages by local artists and K’Naan. In 2009, Coca Cola contacted Jose Puig, a representative of Universal Music Latin America, to produce a Spanish version of the Celebration Mix. The Spanish lyrics were to be sung by David Bisbal, a Spanish language singer. Puig was referred to the plaintiff, Rafael Vergara Hermosilla, in November 2009. Vergara adapted the Celebration Mix into Spanish, and subsequently delivered the Spanish lyrics to Puig in December 2009. A dispute later arose over Vergara’s compensation for the adaptation.

Puig and Vergara negotiated a settlement. After a phone conversation about the terms of the deal, Vergara wrote this email:

[B]ecause I am a man of my word and honor, that is not moved by economic motives, my only request is the my credits are respected as producer and adapter of the Spanish version (that every time the name of any composer of this version appears, my name appears as adapter), and obviously, the credits for the production that are detailed in the invoice sent for this production, which I have detailed below.

For the adaption, you may consider it a work for hire with no economic compensation to that respect. I believe what’s legal is a dollar.

I hope this leaves clear what my work was and what my good intentions were from the beginning.

The next day, Puig responded by email to Vergara to the effect that “You can count on the credits on the track. I am resending you the contract.”

Puig subsequently sent draft contracts confirming the assignment, but inadvertently omitted the provisions that would give Vergara the credits. So Vergara rejected what he characterized as his “proposal” and filed a lawsuit in the Southern District of Florida to enjoin Coca Cola from using the Spanish version of the Celebration Mix without giving him proper credit.

After initially enjoining Coca Cola in May 2010 from disseminating the Spanish version of the Celebration Mix without giving credit to Vergara as the adapter, in February 2011 the District Court granted a summary judgment in favor of Coca Cola. The district court found that the e-mail exchange constituted an assignment by Vergara of his copyright in the adapted lyrics. The court characterized the exchange of emails as an offer and acceptance, “and at that moment the deal was made irrevocable.” The court determined that Puig’s sending of formal contracts that did not reflect all of the terms of the earlier emails was not a “counteroffer which is labeled as an acceptance, but adds new terms” (which typically is not binding under Restatement (Second) of Contracts §59), but was an offer to modify an existing contract. Although Vergara rejected this offer, the court found that this did not impact the initial agreement to assign the copyright.

In a brief aside, the district court also recognized that Section 204 of the Copyright Act requires a signed writing for a conveyance. However, the district court simply noted without discussion that “Courts have found emails to constitute signed writings.” (citing Lemel v. Mattel, Inc., 394 F.3rd 1355 (Fed. Cir. 2005) and the federal E-Sign Act).

11th Circuit Decision

The 11th Circuit opinion is relatively short and to the point. After reciting the facts, the 11th Circuit found that, under Florida law, “the record established without dispute that Vergara assigned his copyright interests to Universal.” The court used a traditional contract analysis to characterize Vergara’s e-mail as an offer and Puig’s e-mail as an unconditional acceptance, which together were effective to create a contract.

Discussion

Unfortunately, while the 11th Circuit found that the e-mail exchange constituted a binding contract under Florida law, the court did not address whether the e-mail exchange constituted a “writing” for purposes of Section 204 of the Copyright Act. Prior to the adoption of the E-Sign law, courts differed as to whether an e-mail exchange would satisfy the writing requirements of Section 204. Section 7001(a)(2) of the federal E-Sign Act, which was enacted in 2000, provides in relevant part that “a contract relating to [a transaction in or affecting interstate or foreign commerce] may not be denied legal effect, validly or enforceable solely because an electronic signature or an electronic record was used in its formation.”

Few courts have addressed what consitutes a “writing” for purposes of E-Sign. Earlier this year, the Arkansas Supreme Court found that a waiver of coverage in an online insurance application constitutes a “writing” for purposes of the Arkansas insurance law requirng such waivers to be in writing. In 2010, the federal district court in Colorado found that an e-mail summary of a settlement meeting could consitute a “writing” for purposes of the Colorado Statute of Frauds, but that the summary could not be enforced as a contract because it was written by an administrative assistant and was not “subscribed by the party to be charged.”

But does E-Sign apply to transactions involving transfers of copyrights? Professor Nimmer notes that “[n]othing about the ESIGN Act overtly mentions copyrights in particular or other federal enactments in general.” He further notes that E-Sign does purport to apply “to any transaction in or affecting interstate or foreign commerce,” with some exceptions. It remains to be seem, then whether courts will treat e-mail as having sufficient formalities to satisfy the writing requirement in Section 204 of the Copyright Act.

The 11th Circuit decision also ignored the fact that Vergara’s email characterized the adaptation as a “work made for hire.” Would the decision have come out any differently if analyzed under the “work made for hire” provisions? Probably not. Under Section 101 of the Copyright Act, certain works qualify as a work made for hire if “the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.” The court did not discuss the question whether the adaptation qualified as one of these specially ordered works (at best it might be viewed as a part of an audio visual work, or as a translation, but probably not). Even if the adaptation did qualify as a work that could potentially be a “work made for hire,” does the exchange of emails constitute “a written instrument signed by them?” I find it harder to classify the exchange of e-mails as an “instrument’ within the meaning of the work made for hire definition. This may be why the 11th Circuit decided the issue on contract grounds, but it would have been nice to have some analysis of this issue.

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Comment from Venkat:

This is a great post by John that delves into the interplay between the federal ESIGN Act and the Copyright Act. I wonder whether an email disclaimer would have affected the analysis. There’s been a lot written on the efficacy and the desirability of email disclaimers in other contexts, but I wonder if an email disclaimer that said

Nothing in this email is intended as an offer and the author disclaims any intention to make an offer or create an enforceable agreement through any email messages. Any agreement with the author of this email must be in a signed paper document!

would have protected Hermosilla? I’m guessing the court would have said that Hermosilla’s unequivocal intent to reach an agreement trumped anything in an email disclaimer. It may not have been useful here, but it would be useful in other contexts, such as where people exchange email messages in an attempt to settle a dispute and one party tries to use an email along the way to say that the parties reached a settlement and tries to enforce a settlement on this basis. I’m not a fan of email disclaimers, but this type of a disclaimer may be worth exploring.

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Eric’s comments.

To me, the legal doctrine in this case seems pretty straightforward. If the parties formed a contract or did a proper contract amendment, the fact that the contract was made via email should satisfy the Section 204 “writing” requirement per E-SIGN/UETA. After all, Section 204 is a statute of fraud, and E-SIGN/UETA were designed to say that emails satisfy the statute of frauds. See, e.g., the many real estate cases reaching this result and John E. Theuman, Satisfaction of Statute of Frauds by E-Mail, 110 A.L.R.5th 27 (2003). I don’t see any reason why copyright law would be handled differently under E-SIGN or UETA. My analysis is the same for the “work for hire” statute of fraud.

For me, the harder part is whether the email exchange properly formed a contract/contract amendment and, if it did, if Coca-Cola (or its assignor) violated one of the contractual conditions such that their failure to perform negated the contract. If this situation didn’t have a whiff of the content creator changing his mind with venal intent, I think other courts might have been more sympathetic on that point.

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