Jersey Boys! Why Sometimes it's Better to Rent Than to Own Copyright

Four Seasons of Legal Pain

If you are of a certain age, when you’re old enough to be living on your own but young enough to be content with renting rather than owning your abode, you start to get pressure from well-meaning older folks, like your parents, that you really should be considering buying a place. It is always better to own than to rent, they say, as though that were a general rule. And, with real property, at least, it’s usually true.¹But not always. When I lived in Silicon Valley as a new lawyer, rents were very high, but house prices were astronomical. Mortgage payments were so much higher than rents that, even taking tax breaks and home equity into account, you were financially better off renting than owning, provided you didn’t squander the difference.
With copyrights, though, sometimes you don’t want to be the owner—or, more precisely, you don’t want to be a part owner. This crazy Jersey Boys case shows why.

Jersey Boys really was a big hit, but a ghostwriter’s widow might be owed a piece of it.

Ghostwriters Have Rights, Too!

There were, as you might guess, four members of the band. In the 1980’s, one of them, Thomas DeVito, wanted to write an autobiography. He asked an attorney named Rex Woodward to ghostwrite it for him, and they agreed to split the proceeds for any publication or other exploitation of the autobiography 50–50. Just after the autobiography was finished, Woodward died. The autobiography was never published, but DeVito registered the autobiography with the U.S. Copyright Office naming himself as sole author—which, right off the bat, is some pretty dirty pool. Oh, and also fraud.
In the late 1990’s, Valli and another member of the band, Bob Gaudio, had the idea of turning the story of the Four Seasons into a musical. In hindsight, this turned out to be an Extremely Good Idea. They got DeVito to grant them the “exclusive right to use … aspects of his life related to The Four Seasons including … his creative contribution, biographies, events in his life, names and likenesses” in connection with the development of the musical. DeVito also agreed not to sue Valli and Gaudio for copyright infringement. In return, DeVito would receive a share of the profits for the musical.
In 2005, Jersey Boys became a big hit. That reminded Woodward’s widow of the unpublished manuscript. She inherited Woodward’s copyright in the DeVito autobiography, and since Woodward was at least a joint author, he (and now she) was at least a 50% owner of the copyright. Would there now be more interest in an autobiography of one of the Four Seasons? When she asked DeVito about it, he said he wasn’t interested. I wonder why. The widow thought it would nevertheless be prudent to register the copyright in the manuscript, just in case—only to discover that it had already been registered. In DeVito’s sole name. Huh! The widow got the U.S. Copyright Office to correct the registration.

Equitable Accounting

Meanwhile, the widow was learning more and more about how the unpublished autobiography had been used in making Jersey Boys. It appeared to have been heavily influential, to the point where it was plausible to believe that Jersey Boys was, at least in part, an adaptation (or “derivative work”) of the autobiography.
I want to interrupt the narrative here for just a moment to make something clear. The widow, as the owner of Woodward’s copyright, controlled only the expression in the DeVito autobiography. She did not control the facts and events of DeVito’s life. It is, therefore, by no means certain that she will ultimately prove copyright infringement, because she will need to prove that Valli and Gaudio did more than just mine the autobiography for facts, but used the language, characters²Since the characters at issue are real people, the copyright will be limited to DeVito and Woodward’s description of those characters above and beyond who they are factually. It seems to me that this is a difficult line to draw. If X were a 47-year old greedy jerk with a soft spot for orphans, how much of that is fact (his age, at least), and how much of that is personal insight? Would it matter if X had a reputation for being a greedy jerk, or would it make a difference if DeVito alone saw the greedy jerk through some facade? and/or narrative structure. Separating facts from expression will be one of the jury’s chief tasks. This issue was not before the Ninth Circuit, which was concerned only with ownership and licensing issues.
At first, the widow sued DeVito for “equitable accounting,” not copyright infringement. Why? Because DeVito is also a co-author of the autobiography, and co-owners of a copyright can never infringe that copyright. This means any owner of a copyright may exploit the copyright without permission from the other owners. But he or she must “account” to the other owners for the proceeds, i.e., give them a percentage of the proceeds equal to their percentage ownership of the copyright. Since the widow now owns 50% of the copyright, DeVito (she argued) should turn over 50% of the money he received from Valli and Gaudio.³Is it really that simple, though? Putting aside the question of whether any expression material was actually misappropriated, DeVito was giving Valli and Gaudio permission to use much more than just the expressive content of the autobiography. How much is attributable to the copyright in the autobiography and how much to the other things? The good news for the widow is that the burden of whittling down the amount rests with DeVito. I think.
In 2009, Valli got divorced⁴Because of course a divorce would play a prominent role in this case. We’ve had everything else., and it must have been at least somewhat acrimonious, because one of the things that got publicly aired was the proceeds for Jersey Boys. And that meant Valli and Gaudio’s contract with DeVito was revealed. And Woodward’s widow found this very interesting.

“Exclusive Right” ≠ “Exclusive License”

Why? Because up to this point, she had assumed that DeVito had merely licensed the autobiography to Valli and Gaudio, which was his right (he just had to account for the royalties he received). But the agreement actually said it granted the “exclusive right” to use the autobiography to make a musical. And that means that DeVito didn’t merely license the copyright in the autobiography. He actually gave a small sliver of the copyright to Valli and Gaudio, making them owners of a small bit of 50% of the copyright in the autobiography. And that makes a big difference.
To understand why, you need to understand that copyright ownership has, in a sense, two dimensions. You’ve already seen that you can own a portion of the entire copyright, the way DeVito and the widow each own 50% of the copyright in the autobiography. This is like you and a partner owning 50% each of a plot of land. You both have the right to go on the land, live there, exploit it, etc. But you can also own aspects of a copyright, what are called “exclusive rights,” things that you and only you can do with the work. Copyright is often referred to as a “bundle of exclusive rights”: the right to reproduce the work, to adapt it, to distribute copies of it, to publicly perform it, and to publicly display it. It’s the rough equivalent of one person owning the right to cut lumber on a piece of land, another person the right to farm the land, and someone else the right to extract oil from the land.
You can, thus, sell (or license) one of these exclusive rights to someone else, say, the right to adapt your novel. But you can split these exclusive rights even more thinly. There are, for example, many ways to adapt a work: you could make a movie out of it, or you could translate it into a different language, or you incorporate it into a larger work. So you could, say, sell the right to translate your novel, or even just the right to translate your novel into Lithuanian.
Here’s the thing: among copyright lawyers, these aspects of a copyright are called “exclusive rights.” Re-read what DeVito granted to Valli and Gaudio. The “exclusive right to use aspects of life related to The Four Seasons, including … biographies [and] events in his life.” True, a license can be thought of as a “right,”⁵This is how the concurrence read “exclusive right,” which would change the entire complexion of the case. As I’ll explain in a later note, the one thing that a co-owner can’t do on her own is grant an exclusive license. So, if you’re using the word “exclusive” in the copyright context, it’s crucial to make sure you know whether you’re talking about “rights” or “licenses.” The concurrence doesn’t explain why we should read “license” for “right”; it just sort of assumes “license” was meant when “right” was written. but in the context of copyright, you can’t mix the two up. A “right” is something you can own. A “license” is just permission to exercise a right.

Oh, This? I’m Only Holding it for Someone. It’s Not Mine, You See.

If Valli and Gaudio had merely been granted licenses to adapt the autobiography into a musical, they would have been completely off the hook. She would have to look exclusively to DeVito.⁶This shows why co-ownership of a copyright can be disastrous if it’s not governed by contract. Nothing prevents one of your co-owners from making an absolutely stupid deal, and all you can do is collect your share of the measly royalties from the moron who made the bad deal. But if they owned that right, then they too would owe the widow an accounting because she still owned 50% of that little sliver of the copyright—a little sliver that happened to account for pretty much the entire value of the copyright.
Hence, Gaudio and Valli’s counterintuitive argument that they didn’t own any part of the copyright in the autobiography. I mean, normally you want to own things, right? Well, they didn’t want any part of this one.
First, they argued that DeVito didn’t actually transfer the copyright in the autobiography to them because the agreement didn’t so specify. Well, except where it says, “biography.” But that was a reference to DeVito’s life events, not to a class of expressive works. The Ninth Circuit (reversing the district court) disagreed, holding that, while “biography” can mean “life events,” it more normally means a particular type of expressive work.⁷Also, the agreement listed “events in his life” separately from “biographies,” suggesting that they were two different things.
Second, they agued that DeVito’s attempt to transfer this sliver of the copyright failed because … he needed the other owner’s (i.e., the widow’s) permission. Which she’d be more than happy to give now! This is simply not the law, and it violates one of modern copyright law’s key precepts, namely, any owner of a copyright can assign any part of his or her share of the copyright (the fancy legal word is “alienate”).⁸Copyright law dodged a bullet here. The Ninth Circuit has done some very strange things with copyright ownership in the past, and it could have really messed things up here by agreeing with Valli and Gaudio. If you’re really curious, Valli and Gaudio based their argument on Sybersound Records v. UAV, which involved exclusive licenses. Exclusive licenses are neither fish nor fowl in the ownership vs. license distinction. They’re functionally like ownership, but they’re legally licenses. One odd result is that it’s logically impossible for a part owner of copyright to grant an exclusive license on its own because exclusivity means no one else can have that license, but nothing prevents the other owners from doing what they want with their shares of the copyright. That’s all that Sybersound stood for. Valli and Gaudio wanted to expand Sybersound to include any transfers of ownership, but transfers of ownership don’t create the logical paradox that exclusive licenses do.

More Bad News

At this point, the widow still doesn’t have a claim for copyright infringement against Valli and Gaudio, just for “equitable accounting,” because they’re also owners of the crucial sliver of the copyright and (repeat after me) co-owners of a copyright can’t infringe the copyright but must account to their fellow owners. But things might actually be even worse for Valli and Gaudio because their agreement with DeVito included a “reversionary clause” that would have sent their ownership interest back to whence it came (i.e., DeVito) if certain conditions were satisfied. That would leave them with neither a license nor ownership of the copyright—i.e., infringers.
I’m not going to get into details, but the court ended up holding that it’s for the jury to decide whether the reversionary clause was triggered. But even if they avoid that pitfall, they’re still on the hook to the widow for her share of the Jersey Boys proceeds.
Valli and Gaudio have one final straw to grasp at. By delivering the manuscript, they argue, DeVito impliedly gave them a license to use that work. The Ninth Circuit said that was also a question for the jury, but I’m pretty sure it’s a loser. First of all, it would seem the written agreement would control over mere conduct. Second, there’s a big difference between handing someone a pre-existing draft and creating the draft at that someone’s request. We often find implied licenses in the latter case (especially in software cases), because otherwise, why would you have paid money for something you couldn’t use? It would be a pretty awful result if every time you handed your unpublished draft to someone, you were also at risk for accidentally licensing the adaptation rights.
In the end, the Ninth Circuit remanded the case back to the district court. Woodward’s widow is certainly in a much better position than she was. Not only was her case revived, but the defendants have been stripped of their main defense. But the widow still has the task of proving actual infringement before her. That will take effort. She’ll need to convince the jury that the defendants didn’t just mine the manuscript for facts but misappropriated actual copyrightable elements.
Thanks for reading!

Rick Sanders

Rick is an intellectual-property litigator. He handles lawsuits, arbitrations, emergency injunctions and temporary restraining orders, opposition and cancellation proceedings, uniform dispute resolution proceedings (UDRPs), pre-litigation counseling, litigation avoidance, and other disputes, relating to copyrights, trademarks, trade secrets, domain names, technology and intellectual-property licenses, and various privacy rights. He has taught Copyright Law at Vanderbilt University Law School. He co-founded Aaron | Sanders with Tara Aaron-Stelluto in 2011.