C.A. 2nd

The Second Appellate District affirmed a judgment. The court held that an attorney’s purported “ostensible” authority to enter into a binding contract on behalf of a copyright owner was insufficient under federal law to effect a transfer of the copyright.

MVP Entertainment, Inc. and Mark Frost entered into negotiations for MVP’s purchase of the movie rights to a book Frost had written. In April 2009, counsel for MVP, William Jacobson, sent counsel for Frost, Alan Wertheimer, an email proposing certain terms and stating, “Let me know if this is okay and we’ll send paperwork ….” Wertheimer responded, “done … thanks! Werth.” A few weeks later, Jacobson sent Wertheimer a written agreement. The agreement was never signed.

That summer, Frost met with MVP president Robert Frederick and told him he did not want to enter into a movie deal with MVP.

MVP sued Frost and Wertheimer for breach of contract, promissory estoppel, declaratory relief, and negligent misrepresentation. MVP argued that Frost had already committed to the movie deal. According to MVP, Wertheimer’s email stating “done … thanks! Werth” created a binding contract.

Frost and Wertheimer moved for summary judgment. In their supporting declarations, both averred that although Wertheimer negotiated for Frost, he had no authority to enter into contracts on his behalf. They both further averred that Frost never gave Wertheimer authority to transfer any rights in Frost’s book.

MVP opposed. In their supporting declarations, both Jacobson and Frederick averred their belief both that Wertheimer was Frost’s duly authorized agent and that Wertheimer’s April email had created a binding contract.

The trial court granted summary judgment, finding, under 17 U.S.C. §204, that a purported transfer of ownership in intellectual property is invalid unless signed by the owner or the owner’s duly authorized agent. The court further concluded that even if express authority were not required, Frost and Wertheimer did nothing to suggest that Wertheimer had authority to transfer the property.

The court of appeal affirmed, holding that there was no contract.

It was undisputed, the court found, that Wertheimer did not have actual authority to transfer the copyright in Frost’s book. Further, even though MVP argued that it raised a triable issue of fact as to the existence of ostensible authority, §204 requires actual authority. Ostensible authority is insufficient.

Under Civil Code § 2317, ostensible authority “is such as a principal, intentionally or by want or ordinary care, causes or allows a third person to believe the agent to possess.” Such ostensible authority, however, is insufficient to transfer a copyright because §204 requires a writing signed by the copyright owner or the owner’s duly authorized agent. Based on this requirement, an attorney cannot transfer a copyright without the owner’s signature “or some express authorization” from the owner. Even assuming Wertheimer had ostensible authority, the court found, such authority was insufficient to effectuate a transfer of Frost’s copyright. MVP’s and Jacobson’s belief that Wertheimer was Frost’s duly authorized agent was irrelevant.

MVP’s failure to raise a triable issue of fact as to compliance with §204 defeated all its causes of action. MVP’s cause of action for breach of contract was based on the parties’ alleged agreement, which as explained, MVP could not prove. MVP’s cause of action for promissory estoppel could not stand because estoppel does not apply to save a contract that fails to comply with §204. MVP’s cause of action for declaratory relief was a request for a declaration that there was “a valid enforceable contract” giving MVP an ownership interest in Frost’s copyright, a claim dependent on showing an enforceable contract; because MVP failed to comply with §204, there was no valid enforceable contract. MVP’s negligent misrepresentation claim also failed, the court concluded.