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United States - Endorsements on Checks May Satisfy Writing Requirement for Work for Hire Under Copyright Act of 1976

In Playboy Enterprises v. Dumas, the Court of Appeals for the Second Circuit held that endorsements on checks with properly worded legends may satisfy the writing requirement under the Copyright Act of 1976 ("the 1976 Act").

Playboy brought a declaratory action seeking a judgment that it owned the copyrights in paintings by Patrick Nagel that appeared in PLAYBOY magazine. From 1974 to 1984 many of Nagel's paintings appeared in PLAYBOY magazine. At first, Nagel created paintings specifically tailored to Playboy's requests. Later, Nagel and Playboy settled into a course of conduct whereby Nagel would routinely submit paintings and Playboy would generally publish them. Playboy paid by check for each painting it published.

According to the court, certain of the works, those created prior to 1978, were governed by the prior Copyright Act (the "1909 Act"). Under the 1909 Act, the paintings were works for hire, because they were created at the instance of Playboy and Playboy paid for them. The court found that legends on the checks from this time period, which stated only that the endorser agreed to assign the works to Playboy, did not alter the status of the paintings as works for hire.

As to later created works, under Section 201(b) of the 1976 Act, a work qualifies as a work for hire if (1) created by an employee within the scope of employment or (2) specially ordered or commissioned and the parties agree in writing that the work shall be considered a work for hire. The court explained that the agreement that the works shall be works for hire must be made before the work is created, but the writing memorializing this agreement may be executed later. The court then held that certain legends on the checks, in particular, those stating that the endorser agreed to assign the works to Playboy, failed to satisfy the writing requirement. The court held that other checks, which included a statement that the endorser acknowledged that the services were "rendered on a work-for-hire basis", could satisfy the writing requirement and remanded to the trial court for a determination if checks signed by persons other than Nagel himself were sufficient. In addition to the writing requirement, the lower court must also consider on remand if the works submitted during the later years of Nagel's relationship with Playboy (i.e., when Playboy no longer made specific requests for paintings and had no commitment to purchase Nagel's works) were "specially ordered or commissioned" as required by the 1976 Act.

A petition for review of this case by the Supreme Court has been denied.

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