IP Law Daily, COPYRIGHT—M.D. Pa.: A non-lawyer’s use of the word ‘exclusive’ does not necessarily convey an exclusive license, court holds, (Apr 4, 2022)

By Matthew Hersh, J.D.

A jury would have to decide what the non-lawyer meant when he wrote the word.

A non-lawyer who offered his former business partner “exclusivity” in the use of a copyrighted image of a dragon did not necessarily intend to convey an exclusive as opposed to a nonexclusive license for the work, the federal district court in Williamsport, Pennsylvania has held. But the court, while rejecting the former business partner’s summary judgment motion on standing grounds, stripped out statutory damages from the case because the artist did not timely register his work (Beard v. Helman, March 31, 2022, Brann, M.).

The case involves a circular image of a dragon that was designed for use as an ornamental button, known as a “boot button,” in certain types of button-up boots. The artwork at issue in this case was designed by Edward Beard and orally licensed, albeit on terms that would be later hotly disputed, to Arik Helman, a footwear manufacturer. When the relationship eventually broke down some 13 years later, the artist sued his former partner for copyright infringement and breach of contract. The former partner moved for summary judgment, leading to this opinion.

Settlement agreement. The court first rejected the former partner’s claim that the litigation was precluded by an earlier settlement agreement. The dispute over the existence of the settlement agreement arose under Pennsylvania law and not copyright law. In short, the court noted, both the original license as well as the later settlement discussions were done by the two parties without the assistance of attorneys and were negotiated either orally or, in the case of the latter, via informal emails and Facebook messages. Moreover, the court noted, the original oral license was done more than a decade earlier and the parties no longer agreed on its terms. “This is why a competent attorney will advise his or her client to reduce any agreement to a signed writing,” the court noted. “The resulting ambiguity in the agreement,” the court noted, as well as “the unsurprising conflicting accounts of that agreement,” made it impossible to conclude that either side was correct as a matter of law.

Statutory damages / VARA. Although the court could not rule in the former partner’s favor on the settlement agreement issue, it did find that statutory damages should no longer be in the case. Because the artist did not register his work until 2020, a full five years after the alleged infringement began, he would not be entitled to statutory damages unless he could show that his work was protected by the Visual Artists’ Rights Act, or VARA. But VARA expressly disclaims protection for “any merchandising item or advertising, promotional, descriptive, covering, or packaging material or container.” Although the dragon image was a single-production drawing and was signed by the artist, it was nonetheless created specifically for use as a merchandising item, in this case as an accessory to commercially sold boots. Thus, the VARA exception could not apply, and the artist would be ineligible for statutory damages.

Exclusive license. Finally, the court declined to rule as a matter of law that the artist granted an exclusive license to the former partner—something that, if true, would have deprived the artist of standing to pursue the infringement lawsuit. The parties agreed that they had entered into an oral license of some kind in 2008 and that they had confirmed in writing the existence of that license in 2020. But they disagreed on whether that license was an exclusive or a nonexclusive license. The court found that the matter would have to be decided by a jury. To be sure, the court noted, the artist did grant his former partner “exclusivity on the use of the image and my art on your boot buttons.” But the artist was not a lawyer, so it was simply not clear whether he had meant to use the work “exclusive” in a legal sense. Thus, the true intent of the parties could not be determined on this summary judgment motion.

The case is No. 4:21-cv-00680-MWB.

Attorneys: Austin White (McCormick Law Firm) for Edward P. Beard, Jr. Michael C. Petock (Petock & Petock, LLC) for Arik Helman.

Cases: Copyright PennsylvaniaNews GCNNews