Effects Associates v. Cohen

908 F.2d 555 (9th Cir.1990)

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Nature of the Case

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Facts

D wrote, directed and executive produced 'The Stuff,' a horror movie. D asked P, a small special effects company, to create footage to enhance certain action sequences in the film. P offered to prepare seven shots. D agreed orally, but no one said anything about who would own the copyright in the footage. D was not happy with the work on one of the scenes and paid P only half of what was promised. P made demands for the rest of the money (about $8,000 with $56,000 already paid for the entire body of work). Despite the dissatisfaction, D used the footage and turned the finished product over to New World Entertainment for distribution. P sued Ds claiming they had no right to use the special effects footage unless P was paid the full contract price. P also brought pendent state law claims for fraud and conspiracy to infringe copyright. The district court dismissed holding that the suit was primarily a contract dispute that did not arise under federal law. The appeals court reversed and remanded, concluding that plaintiff was 'master of his claim' and could opt to pursue the copyright infringement action instead of suing on the contract. The district court granted summary judgment to Ds holding that P had granted an implied license to use the work. P appealed.