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The Washington Post (25/Apr/1990) - Hitchcock Film Must Split Profit

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Hitchcock Film Must Split Profit

Supreme Court Rules in Favor Of Short-Story Copyright Holder

The Supreme Court, in a case that could cost the movie industry millions of dollars, yesterday ruled that the distributors of Alfred Hitchcock's movie "Rear Window" must share profits from the film's re-release with the man who holds the copyright to the short story on which the 1954 thriller was based.

The court, dividing 6 to 3, said the owners of the film—actor Jimmy Stewart, Hitchcock's heirs and MCA—infringed on the copyright of the short story that inspired the movie when they re-released it in 1983 without obtaining permission.

The movie, starring Stewart and Grace Kelly, was based on a short story, "It Had to Be Murder," published in 1942 in Dime Detective magazine. The story's author, Cornell Woolrich, sold the movie rights in 1945.

The federal copyright law in effect until 1978 established a 28-year copyright term and allowed copyright holders to renew their copyright for another 28 years after the first term expired.

As part of the movie deal, Woolrich sold the original copyright and agreed to assign the renewal copyright when the first term expired. But he died in 1968, before the first term ended.

The executor of Woolrich's estate then sold the story rights to literary agent Sheldon Abend for $650 plus 10 percent of profits from the use of the story. When "Rear Window" was re-released in 1983, Abend sued the distributors, claiming copyright infringement because the distributors no longer held a valid copyright on the short story.

Abend, who asserted his right to share in the $12 million in revenues earned since 1983, said the film's exhibition In movie theaters, on cable television and on video-cassettes interfered with his plans for a new play and television version of the story.

In an opinion for the court yesterday, Justice Sandra Day O'Connor upheld a ruling by the federal appeals court in San Francisco, finding that Abend's copyright had been infringed. The case now goes back to the lower courts to determine the degree to which the movie is indebted to the short story—and what share of the profits Abend is therefore entitled to receive.

Movie industry lawyers said the decision, although it involves a technical aspect of copyright law, could have enormous implications. The lawyers said the ruling could cost distributors of classic movies millions of dollars in payments to the owners of the copyrights on the original works, and possibly dissuade them from putting many old films back on the market.

The consequences are "potentially staggering," said Stephen Kroft, who wrote a friend-of-the-court brief in the case on behalf of seven major motion picture studios. "There are literally thousands of motion pictures based on underlying copyrighted works. Motion picture producers and copyright owners are going to have to research every one of these films to see if they have a problem."

Kroft said that although the appeals court in the "Fear Window" case refused to block distribution of the movie because it was a classic, copyright holders are generally entitled to orders halting the infringement. "What happens if a court says it's not a classic motion picture?" Kroft said. "You're going to turn courts into film critics."

Louis F. Petrich, Stewart's lawyer, said 'the practical problem" with the decision is that "if you've got an old movie or some other work and you're not sure whether or not it's worth your while to redistribute it to the public, and you can't get a license for what you think is a reasonable amount, you might just say, 'I'll shelve it'" and wait until the copyright term expires.

Peter Anderson, Abend's lawyer, disputed such doomsday predictions. He said the ruling will simply "give the full value of the copyright to the people who own it" and estimated that fewer than 700 films would be affected.

Before a 1977 appeals court decision that appeared to dear the way for studios to re-release films in such circumstances, he said, "the movie studios never had any problems. They worked it out ... It's in both the studios' and the heirs' best interests to come to an agreement. The studios' only concern is that their profit is going to be less because they're going to have to pay for the use of other people's materials, but that's only fair."

In finding for Abend, O'Connor said the purpose of the renewal term was to give authors and — if they died before the expiration of the first copyright — their families the chance to profit from their works once the property's value had been established.

"When an author produces a work which later commands a higher price in the market than the original bargain provided, the copyright statute is designed to provide the author the power to negotiate for the realized value of the work," O'Connor said.

"At heart [the movie owners'] true complaint is that they will have to pay more for the use of works they have employed in creating their own works. But such a result was contemplated by Congress and is consistent with the goals of the Copyright Act," she said.

Justice John Paul Stevens, in a dissenting opinion joined by Chief Justice William H. Rehnquist and Justice Antonin Scalia, said once a "derivative" work like "Rear Window" is made, it has independent copyright protection that allows its creators to distribute it for their full copyright term, whether or not the copyright on the underlying material has lapsed.

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