7th Circuit Addresses Erroneous Copyright Registrations, Assignments, and Works Made for Hire

May 21, 2003. The U.S. Court of Appeals (7thCir) issued its opinion [PDF] in Billy Bob Teeth v. Novelty, a copyright infringement and trade dress infringement case involving novelty teeth. The dispute does not involve technology. Nevertheless, the Court addressed issues, such as authorship, registration, erroneous registration, assignment, and works made for hire, that are applicable in copyright cases involving technology.

This case involves a dispute over novelty teeth. These are phony teeth that are oversized, crooked, and chipped that fit over a person's real teeth. They are purchased and used for the purpose of humor, such as to imitate the movie character, Austin Powers.

Rich Bailey, while a dental student, first made a set of the phony teeth as a gag. He did not register a copyright (that is, as the author of a sculpture work). Bailey and Jonah White later formed a partnership to make and sell the teeth, and operated under the name "Billy Bob Teeth". Sales rose to $5 Million per year. But still, there was no copyright registration. They then formed a corporation. White then designed, or authored, the teeth that are at issue in this case. Belatedly, in 1999, the Billy Bob corporation obtained copyright registrations for "Sculpture and Artwork in Novelty Teeth" and "Sculpture and Artwork in Novelty Teeth with Chip." On the registrations the author was described as "Billy Bob Teeth, Inc., employer for hire of Jonah White."

Novelty began making phony teeth similar to Billy Bob's. Novelty marketed them as Bubba Teeth and Hilljack Teeth. Novelty obtained no license from Billy Bob. Billy Bob asserts that Novelty's teeth were copies, that Novelty used the same packaging, and that Novelty made bad bad teeth. This, asserted Billy Bob, caused some purchasers of Novelty's teeth to complain to Billy Bob.

Billy-Bob filed a complaint in U.S. District Court (SDIll) against Novelty alleging copyright infringement and trade dress infringement. During trial White, as owner, signed a nunc pro tunc copyright assignment, assigning his works to Billy Bob. The jury awarded Billy Bob $105,000 in damages for copyright infringement on Novelty's sale of Bubba Teeth, $30,000 in damages on the sale of Hilljack Teeth, and $7,046.40 in damages for trade dress infringement.

The District Court then granted judgment as matter of law to Novelty on the basis that the copyrights were invalid because neither of the works was a "work made for hire." That is, the Billy Bob corporation did not exist at the time the teeth were authored. The Court also conditionally granted the motion for a new trial. It upheld the damage award for trade dress infringement. This appeal followed.

The Appeals Court reversed the judgment as a matter of law (JMOL) regarding copyright infringement.

The Court first addressed the nature of works made for hire. It wrote that "A copyright ``vests initially in the author or authors of the work.´´ 17 U.S.C. § 201. Under the ``work made for hire´´ provisions in 17 U.S.C. § 101, employers are considered authors. A ``work made for hire´´ is a work prepared by an ``employee within the scope of his or her employment´´ or a ``work specially ordered or commissioned´´ within nine specified categories. Community for Creative Non-Violence v. Reid, 490 U.S. 730, 738 (1989). When a work falls within the nine categories, it can be 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.´´ § 101. For an item to be a commissioned work, then, the parties must agree in advance that that is what it will be."

The Court concluded that Billy Bob cannot claim that the works are works made for hire, because Billy Bob did not exist at the time that they were authored.

The Appeals Court continued, however, that the error on the registration is not fatal to Billy Bob's case. It wrote that inadvertent errors on registration certificates do not bar infringement actions. The Court wrote, "So Jonah White is the author of the teeth in question and, in this case, Billy-Bob, Inc. claims ownership of the copyright by assignment from White. Copyrights, like other property rights, can be transferred from an owner to another entity." And this was accomplished by the mid-trial assignment.

Moreover, the Appeals Court held that Novelty lacks standing to challenge the assignment. It wrote that "The statute is in the nature of a statute of frauds and is designed to resolve disputes among copyright owners and transferees." And since, in this case, there is no dispute between Billy Bob, White and Bailey, there is no reason to set aside the assignment.

Hence, the Appeals Court affirmed in part (the trade dress infringement award), and reversed in part (the JMOL on the copyright infringement awards). Billy Bob gets what the jury awarded it.