NO. 11-444-CV

IN THE

SUPREME COURT OF THE UNITED STATES

LAURA DYSON, NATHAN DYSON, SANDRA DYSON, BONNIE DYSON,

Petitioners,

V.

MIRACLE CHARACTERS, INC., MIRACLE WORLDWIDE, INC., MIRACLE ENTERTAINMENT, INC.,

Respondents.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR PETITIONERS

ORAL ARGUMENT REQUESTED

Team I Counsel for Petitioners

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QUESTIONS PRESENTED

I. Whether the Second Circuit properly found that exercising personal jurisdiction over Laura and Nathan Dyson would violate due process when Laura and Nathan Dyson did not transact business in New York and the maintenance of a lawsuit in New York is unreasonable.

II. Whether the Second Circuit erred when it utilized the instance and expense test, rather than adhering to the plain meaning of the 1909 Act, to find the works of John Dyson works-for-hire.

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TABLE OF CONTENTS QUESTIONS PRESENTED ........................................................................................................... ii TABLE OF AUTHORITIES ........................................................................................................... v STATEMENT REGARDING ORAL ARGUMENT ..................................................................... 1 OPINIONS BELOW ....................................................................................................................... 1 STATUTORY PROVISIONS ......................................................................................................... 1 STATEMENT OF THE CASE ...................................................................................................... 1

A. Factual Background ............................................................................................................. 1

B. Procedural Background ...................................................................................................... 3 STANDARD OF REVIEW ............................................................................................................. 4 STATEMENT OF JURISDICTION ............................................................................................... 4 SUMMARY OF THE ARGUMENT .............................................................................................. 4 ARGUMENT ................................................................................................................................... 6

I. THE SECOND CIRCUIT CORRECTLY DETERMINED THAT IT LACKED PERSONAL JURISDICTION OVER CALIFORNIA RESIDENTS LAURA AND NATHAN DYSON BECAUSE NEW YORK’S LONG-ARM STATUTE DOES NOT AUTHORIZE JURISDICTION, AND THE EXERCISE OF PERSONAL JURISDICTION WOULD VIOLATE DUE PROCESS. .............................................. 6

A. New York’s Long-Arm Statute Does Not Authorize Personal Jurisdiction Over Laura and Nathan Dyson Because Laura and Nathan Dyson Did Not Transact Business in New York; Therefore, the Claim Did Not Arise From the Business Transaction. ........................................................................................................................ 7 1. Personal jurisdiction does not exist as to Laura and Nathan Dyson because mailing

termination notices does not constitute a business transaction in New York. ............... 8

2. Because Laura and Nathan Dyson did not transact business in New York, the claim did not arise from the business transaction. ................................................................. 12

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B. Even If This Court Finds Personal Jurisdiction Exists, the Exercise of Jurisdiction Violates Due Process. ....................................................................................................... 13 1. Laura and Nathan Dyson did not establish minimum contacts with New York. ........ 15

2. Forcing Laura and Nathan Dyson to maintain a lawsuit in New York is

unreasonable. ............................................................................................................... 16 II. THE SECOND CIRCUIT ERRED BY NOT APPLYING THE PLAIN MEANING

OF THE 1909 ACT TO DETERMINE WHETHER THE WORKS OF DYSON WERE WORKS-FOR-HIRE, AND EVEN IF THIS COURT APPLIES THE INSTANCE AND EXPENSE TEST, MIRACLE FAILED TO MEET ITS BURDEN. ......................................................................................................................... 18

A. The Instance and Expense Test is Improper to Determine Whether Dyson’s Works Qualify as Works-For-Hire Because it is Contradictory to the Plain Meaning of the 1909 Act and Supreme Court Precedent. ...................................................................... 19 1. The lower courts misapplied the instance and expense test to determine works-for- hire, which is a recognized misinterpretation of precedent. ......................................... 20 2. The proper interpretation of works-for-hire is the plain language of the 1909 Act. .... 22

B. Even If This Court Applies the Instance and Expense Test, Miracle Failed to Meet Its Burden of Proving That the Works of Dyson Were Works-for-Hire. .................. 24

1. Miracle failed to satisfy the instance prong because Miracle did not meet its burden of proving that Dyson’s works were initiated or engaged by Miracle. ............................. 25 2. Miracle cannot satisfy the expense prong because Dyson shouldered the financial risk of creation in the works and was paid a contingent flat rate. ....................................... 28

CONCLUSION ............................................................................................................................. 31 CERTIFICATE OF SERVICE ...................................................................................................... 32 APPENDICES ............................................................................................................................... 33

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TABLE OF AUTHORITIES UNITED STATES SUPREME COURT CASES Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ............................................................................................................ 4, 25 Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102 (1987) .......................................................................................................... 13, 17 Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) ......................................................................................................... passim Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) ................................................................................................................ 21 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) ................................................................................................................ 14 Int’l News Serv. v. Associated Press, 248 U.S. 215 (1918) ................................................................................................................ 18 Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) .......................................................................................................... 13, 14 Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984) ................................................................................................................ 14 Kulko v. Super. Ct. of Cal., 436 U.S. 84 (1978) .................................................................................................................. 15 Mazer v. Stein, 347 U.S. 201 (1954) ................................................................................................................ 19 Molzof v. United States, 502 U.S. 301 (1992) ................................................................................................................ 23 Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97 (1987) .................................................................................................................... 6 Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189 (1985) ................................................................................................................ 23 Rush v. Savchuk, 444 U.S. 320 (1980) .......................................................................................................... 15, 16

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Shaffer v. Heitner, 433 U.S. 186 (1977) .................................................................................................... 13, 14, 15 Standard Oil Co. of N.J. v. United States, 221 U.S. 1 (1911) .................................................................................................................... 23 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) .......................................................................................................... 15, 16 UNITED STATES COURTS OF APPEALS CASES Beacon Enters., Inc. v. Menzies, 715 F.2d 757 (2d Cir. 1983) ...................................................................................... 8, 9, 10, 13 Bensusan Rest. Corp. v. King, 126 F.3d 25 (2d Cir. 1997) ...................................................................................................... 13 Best Van Lines, Inc. v. Walker, 490 F.3d 239 (2d Cir. 2007) ...................................................................................................... 8 Brattleboro Publ’g Co. v. Winmill Publ’g Corp., 369 F.2d 565 (2d Cir. 1966) .................................................................................. 20, 21, 24, 25 DNT Enters., Inc. v. Technical Sys., 333 Fed. Appx. 611 (2d Cir. 2009) ............................................................................................ 9 Dolman v. Agee, 157 F.3d 708 (9th Cir. 1998) ................................................................................................... 25 Estate of Burne Hogarth v. Edgar Rice Burroughs, Inc., 342 F.3d 149 (2d Cir. 2003) .................................................................................. 20, 21, 22, 23 Fort Knox Music Inc. v. Baptiste, 203 F.3d 193 (2d Cir. 2000) ...................................................................................................... 8 Janmark, Inc. v. Reidy, 132 F.3d 1200 (7th Cir. 1997) ................................................................................................... 6 Lin-Brook Builders Hardware v. Gertler, 352 F.2d 298 (9th Cir. 1965) ................................................................................................... 20 LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369 (Fed. Cir. 2000) ................................................................................................. 7 Mareno v. Rowe, 910 F.2d 1043 (2d Cir. 1990) ................................................................................................ 6, 7

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Martha Graham Sch. & Dance Found., Inc. v. Martha Graham Ctr. of Contemporary Dance, Inc., 380 F.3d 624 (2d Cir. 2004) ............................................................................................. passim Marvel Characters, Inc. v. Kirby, 726 F.3d 119 (2d Cir. 2013) .................................................................................... 9, 19, 28, 29 PDK Labs, Inc. v. Friedlander, 103 F.3d 1105 (2d Cir. 1997) .......................................................................................... 6, 7, 11 Penguin Grp. (USA) Inc. v. Steinbeck, 537 F.3d 193 (2d Cir. 2008) .................................................................................................... 19 Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213 (2d Cir. 1972) ...................................................................................... 21, 26, 27 Playboy Enters., Inc. v. Dumas (“Playboy I”), 53 F.3d 549 (2d Cir. 1995) .................................................................................... 19, 20, 26, 29 Self-Realization Fellowship Church v. Anada Church of Self-Realization, 206 F.3d 1322 (9th Cir. 2000) ........................................................................................... 25, 26 Siegel v. Nat’l Periodical Publ’ns., Inc., 508 F.2d 909 (2d Cir. 1974) .............................................................................................. 26, 27 Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d 100 (2d Cir. 2006) ...................................................................................................... 7 Twentieth Century Fox Film Corp. v. Ent. Distrib., 429 F.3d 869 (9th Cir. 2005) ............................................................................................ passim Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88 (2d Cir. 2000) ...................................................................................................... 15 Yardley v. Houghton Mifflin Co., 108 F.2d 28 (2d Cir. 1939) ...................................................................................................... 20 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373 (Fed. Cir. 1998) ................................................................................................. 4 UNITED STATES DISTRICT COURT CASES Andy Stroud, Inc. v. Brown, No. 08 Civ. 8246, 2009 WL 539863 (S.D.N.Y. Mar. 4, 2009) ......................................... 13, 14

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Arquest, Inc. v. Kimberly-Clark Worldwide, Inc., No. 07 Civ. 11202, 2008 WL 2971775 (S.D.N.Y. July 31, 2008) ............................................ 7 Burrows Paper Corp. v. R.G. Eng’g, Inc., 363 F. Supp. 2d 379 (N.D.N.Y. 2005) ....................................................................................... 9 Carlson v. Cuevas, 932 F. Supp. 76 (S.D.N.Y. 1996) .............................................................................................. 8 IP Co. LLC v. Gen. Commc’n, Inc., No. 07 Civ. 2372, 2007 WL 3254387 (S.D.N.Y. Oct. 31, 2007) ............................................ 12 Overseas Media, Inc. v. Skvortsov, 407 F. Supp. 2d 563 (S.D.N.Y. 2006) ....................................................................................... 7 Playboy Enters., Inc. v. Dumas (“Playboy II”), 831 F. Supp. 295 (S.D.N.Y. 1993) .......................................................................................... 29 Standard Enters., Inc. v. Bag-It, Inc., 673 F. Supp. 1216 (S.D.N.Y. 1987) .......................................................................................... 9 Toledo Peoria & W. Ry. Corp. v. S. Ill. Railcar Co., 84 F. Supp. 2d 340 (N.D.N.Y. 2000) ......................................................................................... 8 STATE COURT CASES Ehrenfeld v. Bin Mahfouz, 881 N.E.2d 830 (N.Y. 2007) ................................................................................................... 10 George Reiner & Co. v. Schwartz, 363 N.E.2d 551 (N.Y. 1977) ..................................................................................................... 8 Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 209 N.E.2d 68 (N.Y. 1965) ..................................................................................................... 13 CONSTITUTIONAL PROVISIONS U.S. Const. art. I, § 8, cl. 17 .......................................................................................................... 19 U.S. Const. amend. XIV .................................................................................................................. 6 STATUTORY PROVISIONS 17 U.S.C. § 101 (2012) .................................................................................................................. 24

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17 U.S.C. § 26 (1909 ed.) (repealed) ....................................................................................... 20, 22 17 U.S.C. § 304(c) (2012) ............................................................................................................ 18 17 U.S.C. § 304(d) (2012) ............................................................................................................ 18 28 U.S.C. § 1331 (2012) .................................................................................................................. 4 N.Y. C.P.L.R. § 302(a)(1) (McKinney 2014) .................................................................................. 7 Fed. R. Civ. P. 56(c) ...................................................................................................................... 25 SECONDARY SOURCES Blacks Law Dictionary, 2d ed. (1910) ........................................................................................... 24 M. Nimmer & D. Nimmer, Nimmer on Copyright (2003) 3 Nimmer § 9.03 ................................ 22 Staff of H. Comm. on Patents, 60th Cong., Rep. on Copyright Act of 1909 1, available at http://ipmall.info/hosted_resources/lipa/copyrights/The%20House%20Report%201%20on%20the%20Copyright%20Act%20of%201909.pdf ................................................................................ 23

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STATEMENT REGARDING ORAL ARGUMENT Petitioners, pursuant to Federal Rules of Appellate Procedure 34(a), request oral

argument. Oral Argument could assist this Court in consideration of the issues raised regarding

personal jurisdiction and the works-for-hire provision of the Copyright Act, 17 U.S.C. § 304(c).

OPINIONS BELOW

The opinion issued by the United States Court of Appeals for the Second Circuit appears

in the record on pages three through twenty-nine. The Order Granting Petitioner’s Petition for

Writ of Certiorari to the Supreme Court of the United States appears in the record on page two.

STATUTORY PROVISIONS

The following statutes are relevant and set forth in Appendices A through C: 17 U.S.C. §

304(c) (2012); 37 C.F.R. § 201.10(d) (2012); N.Y. C.P.L.R. 302(a)(1) (McKinney 2014).

STATEMENT OF THE CASE

A. Factual Background

With a career spanning more than half a century, John Dyson (“Dyson”) is considered

one of the most influential and prolific comic book artists of all time. R. at 4, 5. Between 1940

and 1978, Dyson’s typical output of comics published was approximately 300 pages of work per

year. R. at 5. Dyson often produced drawings for Miracle Comics, a comic book publisher,

which has grown into a multifaceted enterprise: Miracle Characters, Inc., Miracle Worldwide,

Inc., and Miracle Entertainment, Inc. (collectively, “Miracle”). R. at 4.

Prior to 1958, Miracle purchased Dyson’s works relating to characters such as Sergeant

Serbia. R. at 5. However, Dyson subsequently went to work for a competitor, AC Comix. R. at

6. In Dyson’s absence, Miracle hired Stephen Burnside, also known by his pen name Steve

Burns (“Burns”). R. at 6. Burns directed Miracle from 1940 though approximately 1970. R. at

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6. Beginning around 1940, Miracle’s business declined due to poor business decisions. R. at 6.

On his own accord, Dyson left AC Comix and began producing drawings for Miracle again in

1958. R. at 6. By 1961, after nearly two years, Miracle’s business dramatically improved. R. at

6. It is beyond question that Miracle owes many of its triumphs to Dyson. R. at 25.

Furthermore, Dyson was not a formal employee of Miracle. R. at 6. Miracle did not pay

Dyson a fixed wage or salary. R. at 6. Additionally, Dyson never received benefits or

reimbursement for expenses or overhead in creating his drawings. R. at 6. Dyson incurred all

the costs of producing his drawings, including the costs for his time and his tools. R. at 26.

Dyson set his own hours and worked from home. R. at 6, 7. While working for Miracle, Dyson

produced and sold his work to other publishers. R. at 7. Miracle was free to reject Dyson’s

drawings or ask him to redraft them. R. at 7. In fact, it is undisputed that Miracle rejected a

number of Dyson’s works between 1958 and 1963. R. at 24. When Miracle did accept the

drawings, it would pay Dyson by check at a per-page rate. R. at 7.

No formal agreement existed as to the working relationship between Dyson and Miracle.

R. at 7. The Dysons asserted that Dyson could sell or produce work for other publishers between

1958 and 1963. R. at 7. While Burns asserted that artists such as Dyson employed what Miracle

called the “Miracle Method,” Dyson operated more freely than other artists. R. at 7, 8.

Moreover, Burns admitted that the Miracle Method was just a way to “keep a lot of artists busy.”

R. at 7, 8. Distinct from Miracle’s other artists, Dyson often contributed unique characters,

influenced plotlines, and presented ideas. R. at 8, 25.

Petitioners Laura, Nathan, Sandra, and Bonnie Dyson are the children of Dyson

(collectively, the “Dysons”). R. at 4. Laura and Nathan are residents of California, and Sandra

and Bonnie are residents of New York. R. at 9. The dispute before this Court began in

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September 2009, when the Dysons served various Miracle entities with documents entitled

“Notice of Termination of Transfer Covering Extended Renewal Term” (the “Notices”). R. at 8.

The Notices purported to exercise statutory termination rights under section 304(c)(2) of the

Copyright Act of 1976, 17 U.S.C. § 304, with respect to 262 works at issue between 1958 and

1963. R. at 4, 8. The Notices stated an effective future date between 2014 and 2019. R. at 8.

The Copyright Act required the Dysons to send the Notices to Miracle to exercise their rights to

Dyson’s works. R. at 8.

B. Procedural Background

Miracle filed this lawsuit for declaratory judgment on January 8, 2010. R. at 9. Miracle

sought a declaration that the Dysons’ termination rights under § 304(c)(2) were void, and that the

Notices are, therefore, ineffective. R. at 9. Miracle claimed that all of the works were “works-

for-hire” by Dyson for Miracle within the definition of § 304(c). R. at 9. On March 9, 2010, the

Dysons filed a motion to dismiss the complaint. R. at 9. Laura and Nathan Dyson, residents of

California, sought dismissal on the ground that they were not subject to personal jurisdiction in

New York State.1 R. at 9. The district court denied the motion on April 14, 2010, concluding

that it had personal jurisdiction over Laura and Nathan Dyson under New York’s long-arm

statute, and that the exercise of this jurisdiction was consistent with constitutional due process.

R. at 9.

The Dysons answered Miracle’s complaint and asserted several counterclaims of their

own. R. at 9. Miracle moved to dismiss each counterclaim. R. at 9. On November 22, 2010,

the district court dismissed as to all but the Dysons’ counterclaim seeking a declaration that the

Notices were valid. R. at 9. In early 2011, after discovery was complete, Miracle moved for

                                                                                                               1  The other Dyson siblings, Sandra and Bonnie, are residents of New York and do not contest personal jurisdiction.  

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summary judgment, and on July 28, 2011, the district court granted Miracle’s motion. R. at 9.

The court concluded that undisputed facts in the record establish as a matter of law that the

works at issue were made at Miracle’s instance and expense and were works-for-hire. R. at 9-10.

Therefore, the Dysons had no termination rights, and the Notices were ineffective. R. at 10. The

district court entered judgment accordingly on August 8, 2011. R. at 10. The Dysons appeal. R.

at 10.

STANDARD OF REVIEW

This Court reviews legal conclusions concerning the exercise of personal jurisdiction de

novo. 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373, 1376 (Fed. Cir. 1998). This Court

reviews the grant of summary judgment de novo. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

249 (1986).

STATEMENT OF JURISDICTION

The underlying declaratory relief action under the Copyright Act, 17 U.S.C. § 101, relies

on this Court’s federal question jurisdiction for subject-matter jurisdiction. See 28 U.S.C § 1331

(2012).

SUMMARY OF THE ARGUMENT

This Court should affirm the decision of the Second Circuit Court of Appeals because the

Southern District of New York lacked personal jurisdiction over California residents Laura and

Nathan Dyson. The determination of whether a court can exercise personal jurisdiction is two-

fold: (1) whether the state’s long-arm statute authorizes jurisdiction, and (2) whether the

exercise of that jurisdiction violates due process. Under New York law, the long-arm statute

authorizes jurisdiction if a defendant transacts business within the state and if the claim brought

arises out of the transaction. New York’s long-arm statute does not provide for personal

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jurisdiction over Laura and Nathan Dyson. Because the mailing of the Notices to a New York

address does not constitute the transaction of business in New York or purposeful availment of

the benefits and protections of its law. Furthermore, Laura and Nathan Dyson seek no privilege

or benefit conferred by New York law. The Dysons were required to serve Miracle by mail at its

last known address; therefore, the Dysons seek to vindicate purported termination rights under

federal copyright laws. Because the Dysons did not transact business in New York, the claim did

not arise from the business transaction.

If a court finds no personal jurisdiction under the state’s long-arm statute, then the court

does not address the issue of due process. Notwithstanding this, the constitutional due process

requirement for personal jurisdiction is not satisfied here. Due process requires minimum

contacts and the maintenance of the lawsuit in New York must be reasonable. Neither Laura

Dyson nor Nathan Dyson has sufficient minimum contacts with New York because they are not

residents of New York and would not reasonably foresee being haled into court in New York.

Additionally, the maintenance of a lawsuit in New York is not reasonable as to Laura and Nathan

Dyson. If mere service to out-of-state addresses conferred personal jurisdiction, this would

subject heirs to lawsuits in multiple jurisdictions where they have no meaningful contacts,

significantly increasing their legal costs. The decision below places the Dysons in an untenable

position by penalizing them for providing due notice to actual or potential successor grantees.

Additionally, the Second Circuit erred in holding that the works of Dyson were works-

for-hire because the instance and expense test is improper to determine works-for-hire for

freelancers like Dyson. The plain language of the 1909 Act should control. Copyrights were

traditionally viewed as an incentive for authors to create works for public consumption. An

author labors to create some product, such as a comic in this case, and by that labor, the author

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earns the right to own what he has created. Without copyright protections, individual

incentivizes to create are eviscerated. Through the development of the works-for-hire doctrine,

courts have inconsistently applied the instance and expense test to freelancers like Dyson, which

has led to the improper termination of an author’s rights to his creation. Even if this Court

applies the instance and expense test, the works of Dyson were not works-for-hire because the

works were not created at Miracle’s instance and expense. Because Miracle failed to meet its

burden of proving instance and expense, the lower courts improperly granted summary

judgment, and this Court should reverse.

ARGUMENT

I. THE SECOND CIRCUIT CORRECTLY DETERMINED THAT IT LACKED PERSONAL JURISDICTION OVER CALIFORNIA RESIDENTS LAURA AND NATHAN DYSON BECAUSE NEW YORK’S LONG-ARM STATUTE DOES NOT AUTHORIZE JURISDICTION, AND THE EXERCISE OF PERSONAL JURISDICTION WOULD VIOLATE DUE PROCESS.

This Court should affirm the decision of the Second Circuit Court of Appeals because the

Southern District of New York lacked personal jurisdiction over California residents Laura and

Nathan Dyson. Exercising personal jurisdiction requires adherence to the Fourteenth

Amendment Due Process Clause of the United Stated Constitution, the principal constitutional

restraint on potential excesses of state judicial power. U.S. Const. amend. XIV. The Copyright

Act does not authorize nationwide service of process. See, e.g., Janmark, Inc. v. Reidy, 132 F.3d

1200, 1201 (7th Cir. 1997). Where no federal statute exists to govern personal jurisdiction in a

copyright action, “a federal court applies the forum state’s personal jurisdiction rules.” PDK

Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997); see also Omni Capital Int’l, Ltd.

v. Rudolf Wolff & Co., 484 U.S. 97, 103-05 (1987). Therefore, this Court must look to New

York state law as to whether it has personal jurisdiction over Laura and Nathan Dyson. See

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Mareno v. Rowe, 910 F.2d 1043, 1046 (2d Cir. 1990); Overseas Media, Inc. v. Skvortsov, 407 F.

Supp. 2d 563, 567 (S.D.N.Y. 2006). Under New York law, determining personal jurisdiction

involves two parts: (1) whether there is personal jurisdiction under the long-arm statute, and (2)

whether the exercise of jurisdiction is consistent with constitutional standards of due process.

Arquest, Inc. v. Kimberly-Clark Worldwide, Inc., No. 07 Civ. 11202, 2008 WL 2971775, at *5

(S.D.N.Y. July 31, 2008) (citing LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1370

(Fed. Cir. 2000)).

Because no personal jurisdiction exists under New York’s long-arm statute, and the

exercise of jurisdiction violates due process, the Second Circuit properly found a lack of personal

jurisdiction over Laura and Nathan Dyson.

A. New York’s Long-Arm Statute Does Not Authorize Personal Jurisdiction Over Laura and Nathan Dyson Because Laura and Nathan Dyson Did Not Transact Business in New York; Therefore, the Claim Did Not Arise From the Business Transaction.

New York’s long-arm statute, section 302(a)(1), does not provide for personal

jurisdiction over Laura and Nathan Dyson. To determine whether personal jurisdiction exists,

the federal district court first applies the long-arm statute of the state in which the court sits. See

PDK Labs, Inc., 103 F.3d at 1108. Under New York’s long-arm statute, two requirements must

be met to establish personal jurisdiction: (1) the defendant must have transacted business within

the state, and (2) the claim asserted must arise from that business activity. See N.Y. C.P.L.R. §

302(a)(1) (2014); see also Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d 100,

103 (2d Cir. 2006). Therefore, if the defendant transacts business in New York and the claim

arises from that transaction, jurisdiction is conferred by N.Y. C.P.L.R. 302(a)(1). However, if no

business was transacted within the state of New York, the long-arm statute test automatically

fails. The Second Circuit properly found a lack of personal jurisdiction over California residents

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Laura and Nathan Dyson because they did not conduct business in New York.

1. Personal jurisdiction does not exist as to Laura and Nathan Dyson because mailing termination notices does not constitute a business transaction in New York.

New York’s long-arm statute extends the jurisdiction of New York state courts to any

nonresident who has purposely availed him or herself of the privilege of conducting activities

within New York, and thereby invoked the benefits and protections of its laws. See George

Reiner & Co. v. Schwartz, 363 N.E.2d 551, 553 (N.Y. 1977). The question is invariably whether

the defendant’s conduct in New York constitute a sufficient “transaction” to satisfy the statute.

See id. In assessing whether a defendant has transacted business, this Court looks to “the totality

of the defendant’s activities within the forum.” Best Van Lines, Inc. v. Walker, 490 F.3d 239,

246 (2d Cir. 2007). Thus, for section 302(a)(1) to apply, there must be a purposeful availment of

oneself to “the benefits and protections of New York law.” Beacon Enters., Inc. v. Menzies, 715

F.2d 757, 766 (2d Cir. 1983).

It is well established that mailing a legal notice to a New York address is insufficient to

establish specific jurisdiction under section 302(a)(1) because an interstate communication of

one’s rights does not constitute a business transaction. See Fort Knox Music Inc. v. Baptiste, 203

F.3d 193, 197 (2d Cir. 2000); Beacon Enters., Inc., 715 F.2d at 757; Carlson v. Cuevas, 932 F.

Supp. 76, 79 (S.D.N.Y. 1996) (“[A]n interstate communication of one’s [property] rights, does

not constitute a ‘business transaction.’”). Furthermore, purely ministerial acts required by

statute, such as mailing notices of termination to potential successor grantees per 17 U.S.C. §

304(c)(4)(A), are insufficient to support jurisdiction. See Toledo Peoria & W. Ry. Corp. v. S. Ill.

Railcar Co., 84 F. Supp. 2d 340, 343 (N.D.N.Y. 2000) (rejecting as “outlandish” the notion that

any communication of a breach qualifies as a business transaction).

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New York courts have consistently refused to sustain section 302(a)(1) jurisdiction solely

on the basis of “communication from another locale with a party in New York.” Beacon Enters.,

Inc., 715 F.2d at 766. While the state’s long-arm jurisdiction may be invoked even if a

defendant never enters New York, “telephone calls and correspondence sent into New York, by a

nondomiciliary defendant who is outside New York, generally are insufficient to establish

personal jurisdiction.” See Burrows Paper Corp. v. R.G. Eng’g, Inc., 363 F. Supp. 2d 379, 386

(N.D.N.Y. 2005); see also Standard Enters., Inc. v. Bag-It, Inc., 673 F. Supp. 1216, 1220

(S.D.N.Y. 1987) (“Interstate telephone contacts do not generally have any great significance in

section 302(a)(1) analyses.”). Similarly, New York law firmly establishes that cancellation

notices do not create jurisdiction. See DNT Enters, Inc. v. Technical Sys., 333 Fed. Appx. 611,

613-14 n.1 (2d Cir. 2009) (holding no personal jurisdiction over party who sent letter to New

York cancelling contract). Pursuant to 17 U.S.C. § 304(c)(4)(A), the termination notices are not

“self-executing,” and are legally ineffective unless filed with the Copyright Office prior to

termination.

In Marvel Characters, Inc. v. Kirby, comic book publishers sought a declaratory

judgment against the heirs of a freelance artist challenging the validity of the heirs’ termination

notices. 726 F.3d 119, 124 (2d Cir. 2013). The Second Circuit concluded that “a

communication from out-of-state, required for the exercise of rights conferred under a federal

statute, cannot alone constitute a purposeful availment of ‘the benefits and protections of [New

York’s] laws.’”2 Id. at 130. The court also recognized that personal jurisdiction was lacking

because the rights asserted did not arise under New York law. Id.

Also, in Beacon Enterprises, Inc. v. Menzies, the Second Circuit applied section

                                                                                                               2 While the Second Circuit erred in finding Kirby’s works were works-for-hire, it properly held a lack of personal jurisdiction.  

  10

302(a)(1) in a declaratory judgment suit for infringement on trademarks and copyrights in a line

of garments designed to emulate the effects of a sauna. 715 F.2d at 759. Menzies sent a cease

and desist letter and shipped goods to New York. Id. at 760. The Second Circuit held that these

actions were insufficient to give rise to personal jurisdiction on the basis that New York courts

have declined jurisdiction due to the defendant’s communication from another locale with a

party in New York. Id. at 766. The Second Circuit reasoned that “New York courts have

consistently refused to sustain section 302(a)(1) jurisdiction solely on the basis of defendant’s

communication from another locale with a party in New York” because they do not constitute a

business transaction. Id.

In Ehrenfeld v. Bin Mahfouz, a Saudi Arabian citizen obtained a default judgment against

a New York author in a libel lawsuit filed in England. 881 N.E.2d 830, 833 (N.Y. 2007). The

author subsequently filed an action in the Southern District of New York seeking a declaratory

judgment that the Saudi Arabian citizen could not prevail on the libel claim. Id. at 834. The

New York Court of Appeals held that serving documents upon the author in New York that were

required under English procedural rules for defamation actions did not constitute a business

transaction within the meaning of New York’s long-arm statute. Id. at 837. Even though the

threatened future enforcement of the libel judgment would be in New York, the court reasoned

that the Saudi Arabian citizen had not sought to consummate a New York transaction or invoke

the state’s laws, and his contacts with the state stemmed from the English lawsuit. Id.

On the other hand, in PDK Labs, Inc. v. Friedlander, the Second Circuit found that the

defendant transacted business in New York because he “purposefully availed himself of the New

York forum by using [his agent] in New York and apparently elsewhere for many years to

advance his interest in his unique ‘product’ through soliciting funds and negotiating royalty

  11

agreements.” 103 F.3d at 1111. PDK went beyond the mere sending of a letter and extended to

settlement negotiations and a persistent campaign to secure financial investment. Id.

Here, California residents Laura and Nathan Dyson did not transact business in New

York. Like the defendants in Beacon Enterprises and Ehrenfeld, Laura and Nathan Dyson were

not present in New York in connection with the underlying dispute. In fact, the only action that

could have given rise to personal jurisdiction in this case is the mailing of the Notices. But, the

mailing of a legal notice to a New York address neither constitutes a business transaction in New

York nor amounts to purposeful availment of the benefits and protections of its laws. Thus,

similar to Beacon Enterprises, the communication from outside of the forum to the state of New

York fails to establish personal jurisdiction. Additionally, like Ehrenfeld, the Notices asserted

legal rights under another forum’s laws. Laura and Nathan Dyson sought no privilege or benefit

conferred by New York law by mailing the Notices.

What the Dysons did seek to vindicate were purported termination rights under section

304(c) of the federal copyright laws. Pursuant to 17 U.S.C. § 304(c)(4), in order to exercise their

termination rights, the Dysons were required to serve Miracle by mail at its last known address.

The Notices, thus, not only seek to vindicate rights under federal law, they are also a compulsory

feature of that body of law. Unlike in PDK Labs Inc., the Notices were not a communication in

the course of business dealings with Miracle, nor were they negotiating or soliciting business

from Miracle. Instead, the Notices gave no indication that the Dysons were interested in

negotiating with Miracle. Accordingly, the present controversy arose not from the Dysons’ New

York activity, but as a result of mailing the Notices.

Although termination notices may have differing legal consequences as compared to

cease and desist letters, the Notices are not “self-executing,” and are legally ineffective unless

  12

filed with the Copyright Office prior to termination, which has not been done as most of the

Notices do not take effect until 2014 through 2019. The test is not whether notice might prompt

action, as cease and desist letters surely can, but whether such communications constitute

purposeful availment of the benefits and protections of New York law. Merely mailing a

termination notice is insufficient. Even if this Court finds the Notices were self-executing,

creation of personal jurisdiction does not follow. A termination notice puts the recipient on

notice as to the cancellation of a prior contract. As New York law firmly establishes that

cancellation notices do not create jurisdiction, a termination notice cannot create jurisdiction.

Jurisdiction sets limits and boundaries of the appropriate balance between states and the

federal government dictated by federalism. Under Respondent’s theory, any breach of a contract

with a New York citizen would trigger section 302(a)(1) since any communication of that breach

in New York would constitute “transacting business.” Virtually any means of communicating a

contract’s cancellation or revocation, excepting personal hand-delivered notification, would

permit federal courts in the state to become roving national tribunals. This standard is simply

unworkable. Therefore, a communication from out of state, required for the exercise of rights

conferred under a federal statute, cannot alone constitute a purposeful availment of the benefits

and protections of New York’s laws.

2. Because Laura and Nathan Dyson did not transact business in New York, the claim did not arise from the business transaction.

Because the mailing of the Notices is insufficient to constitute a business transaction

under New York law, the claim did not arise from the business transaction. A claim arises out of

a defendant’s transaction of business in New York when there exists a substantial nexus between

the business transacted and the cause of action pursued. IP Co. LLC v. Gen. Commc’n, Inc., No.

07 Civ. 2372, 2007 WL 3254387 (S.D.N.Y. Oct. 31, 2007). A state cannot subject a

  13

nondomiciliary to its jurisdiction without a thread of nexus connecting the state, the

nondomiciliary, and the case. See Shaffer v. Heitner, 433 U.S. 186, 204 (1977). Because Laura

and Nathan Dyson did not transact business within New York, no articulable nexus exists

between the claim and a business transaction, and personal jurisdiction does not exist.

B. Even If This Court Finds Personal Jurisdiction Exists, the Exercise of Jurisdiction Violates Due Process.

In light of the Second Circuit’s decision below that Laura and Nathan Dyson are not

subject to personal jurisdiction under New York law, any due process inquiry becomes

superfluous. If a court finds no personal jurisdiction under the state’s long-arm statute, then the

court does not address the issue of due process. See Bensusan Rest. Corp. v. King, 126 F.3d 25,

27 (2d Cir. 1997). Notwithstanding, the constitutional due process requirement for personal

jurisdiction is not satisfied here.

The Due Process Clause of the Fourteenth Amendment restricts the power of a state court

to exert personal jurisdiction over a nondomiciliary. Asahi Metal Indus. Co. v. Super. Ct. of Cal.,

480 U.S. 102, 108 (1987). The Due Process Clause protects an individual’s liberty interest in not

being subject to the binding judgments of a forum with which he has established no meaningful

“contacts, ties, or relations.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985)

(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). The New York long-arm

statute does not extend to the full limits permitted by the Due Process Clause. See, e.g., Beacon

Enters. Inc., 715 F.2d at 764 (citing Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc.,

209 N.E.2d 68, 76 (N.Y. 1965)). Even if a nonresident defendant is subject to personal

jurisdiction under a state’s long-arm statute, a court located within the forum state may not

exercise jurisdiction over that defendant if doing so would violate the Due Process Clause of the

United States Constitution. See Andy Stroud, Inc. v. Brown, No. 08 Civ. 8246, 2009 WL 539863

  14

(S.D.N.Y. Mar. 4, 2009).

There are two grounds to assert personal jurisdiction over nonresident defendants: (1)

general jurisdiction, which arises from the defendant’s substantial or “continuous and systematic”

forum contacts, and enables a court to hear cases even if they are unrelated to the defendant’s

forum activities; and (2) specific jurisdiction, which is based on forum-related activities of the

defendant that are connected with the particular litigation, and enables the court to hear only

those cases that are related to the defendant’s forum activities. See Burger King Corp., 471 U.S.

at 477-78; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984).

Only specific jurisdiction is at issue in the present case. Where a plaintiff seeks to assert specific

jurisdiction in New York over an out-of-state defendant who has not consented to suit in New

York, this “fair warning” requirement is satisfied if the defendant “purposefully directed” his

activities at residents of the forum and the litigation resulted from alleged injuries that arose from

or are related to those activities.” Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984).

The landmark case of International Shoe v. Washington established that a defendant must

have “minimum contacts” with the forum state such that the maintenance of the action does not

offend “traditional notions of fair play and substantial justice.” 326 U.S. at 316. This Court

explained that there is no simple mechanical or quantitative test to be applied as due process in

each case depends upon “the quality and nature of the activity in relation to the fair and orderly

administration of the laws.” Id. at 319.

By requiring that individuals have “fair warning that a particular activity may subject

[them] to the jurisdiction of a foreign sovereign,” due process provides a degree of predictability

to the legal system that allows potential defendants to structure their primary conduct with some

minimum assurance as to where that conduct will and will not render them liable to suit. Shaffer,

  15

433 U.S. at 218. To establish jurisdiction, a defendant’s activity in the state must be such that it

would be fair and reasonable to require him to defend himself in that state. See Kulko v. Super.

Ct. of Cal., 436 U.S. 84, 92 (1978). Therefore, this analysis involves a two-part inquiry: (1) the

defendant must be shown to have sufficient minimum contacts in New York, and (2) the

maintenance of the lawsuit in New York must be reasonable. See Wiwa v. Royal Dutch

Petroleum Co., 226 F.3d 88, 89 (2d Cir. 2000).

The ultimate purpose of the due process inquiry is to determine whether the defendants

could have foreseen that they would be subject to suit in New York based on their activities in

the state. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). The

minimum contacts test, therefore, looks to the “quality and nature” of the defendant’s contacts in

New York under a totality-of-the-circumstances test, the crucial question being whether the

defendant has “purposefully avail[ed] [himself] of the privilege of conducting activities within

the forum State, thus invoking the benefits and protections of its laws.” Burger King Corp., 471

U.S. at 474-75.

1. Laura and Nathan Dyson did not establish minimum contacts with New York.

Minimum contacts is a legal term of art that is at the heart of many legal disputes over

personal jurisdiction. The minimum contacts test is not susceptible to mechanical application;

rather, the facts of each case must be weighed to determine whether the requisite affiliating

circumstances are present. Kulko, 436 U.S. at 84. In determining whether minimum contacts

exist, this Court considers “the relationship among the defendant, the forum, and the litigation.”

Shaffer, 433 U.S. at 204. While the parties’ relationship with each other may be relevant in

certain instances, the requirements of International Shoe must be met as to each defendant over

whom a state court seeks to exercise jurisdiction. Rush v. Savchuk, 444 U.S. 320, 332 (1980). A

  16

court may not consider defending parties together or aggregate their forum contacts. Id. The test

for minimum contacts has been refined over the years to ask whether a defendant’s “conduct and

connection with the forum State” are such that he or she “should reasonably anticipate being

haled into court there.” World-Wide Volkswagon, 444 U.S. at 297. Activity in the state

satisfying minimum contacts includes an act done in the forum state by which the defendant

“purposefully avails itself of the privilege of conducting activities within the forum state.”

Burger King Corp., 471 U.S. at 474-75. Thus, the decisions under the Due Process Clause are

designed to ensure that a defendant is not dragged into a jurisdiction to answer in litigation

brought there as a result of “random, fortuitous, or attenuated” contacts. Burger King Corp., 471

U.S. at 475.

Here, assertion of personal jurisdiction over Laura and Nathan Dyson does not comport

with due process for the same reasons that it fails to satisfy personal jurisdiction under New

York’s long-arm statute. Laura and Nathan Dyson were not present in New York in connection

with any underlying dispute in the present case. While this factor alone is not dispositive, courts

have even declined to find personal jurisdiction when defendants send communication into the

state along with the shipment of goods. Neither Laura Dyson nor Nathan Dyson had sufficient

minimum contacts with New York because they are not residents of New York and would not

reasonably foresee being “haled into court” in New York. Moreover, merely serving notices has

never been found to establish minimum contacts.

2. Forcing Laura and Nathan Dyson to maintain a lawsuit in New York is unreasonable.

While the exercise of jurisdiction is favored where the plaintiff has made a threshold

showing of minimum contacts at the first stage of the inquiry, it may be defeated where the

defendant presents “a compelling case that the presence of some other considerations would

  17

render jurisdiction unreasonable.” Burger King Corp., 471 U.S. at 477. This is, in essence,

another way of asking what is reasonable. See id. Accordingly, once the plaintiff has

established the defendant’s minimum contacts with New York, the plaintiff must show that an

exercise of jurisdiction by this Court would nevertheless be unreasonable. See id.

The import of the “reasonableness” inquiry varies inversely with the strength of the

minimum contacts showing—a weak showing by the plaintiff on minimum contacts increases the

weight given to reasonableness. Id. Whether it is reasonable to exercise jurisdiction in a

particular case depends on “(1) the burden that the exercise of jurisdiction will impose on the

defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff’s interest

in obtaining convenient and effective relief; (4) the interstate judicial system’s interest in

obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states

in furthering substantive social policies.” Asahi Metal Indus. Co., 480 U.S. at 113-14.

At bar, the foregoing factors favor Laura and Nathan Dyson. First, when balancing the

burden of litigation on both parties, a greater burden is placed on the Dysons to litigate in New

York because they are domiciled in California. Mitigation by telephone or electronic

communication does not dispose of the financial burden placed on the Dysons. This Court

should place the financial burden on Miracle, a corporation with a deeper reserve of resources

because they are better suited to litigate the case elsewhere.

Second, this copyright suit is governed by federal law, and therefore, Laura and Nathan

Dyson’s posture towards New York is not to obtain a benefit or protection from New York’s

laws. While a state generally has an interest in providing its residents with a convenient forum

for redressing injuries inflicted by out-of-state actors, New York has little interest in adjudicating

this matter since the majority of claims are brought pursuant to federal copyright, trademark, and

  18

unfair competition laws. If this Court determines that personal jurisdiction exists over Laura and

Nathan Dyson, it would cause a chilling effect on termination rights in the Copyright Act. If this

Court were to hold that mere service to out-of-state addresses conferred personal jurisdiction, it

would abrogate the minimums contacts standard altogether. Such a standard would penalize the

Dysons for simply providing due notice to actual or potential successor grantees as required by

law.

II. THE SECOND CIRCUIT ERRED BY NOT APPLYING THE PLAIN MEANING OF THE 1909 ACT TO DETERMINE WHETHER THE WORKS OF DYSON WERE WORKS-FOR-HIRE, AND EVEN IF THIS COURT APPLIES THE INSTANCE AND EXPENSE TEST, MIRACLE FAILED TO MEET ITS BURDEN.

The Second Circuit Court of Appeals erred in holding that the works of Dyson were

works-for-hire because it improperly applied the “instance and expense” test. This Court should

adhere to the plain language of the 1909 Act because the plain meaning yields the most

consistent result. However, even if this Court applies the instance and expense test, Dyson’s

works were not made at Miracle’s instance and expense and are, therefore, not works-for-hire.

Traditionally, copyrights were viewed as an incentive for authors to create works for

public consumption. See Int’l News Serv. v. Associated Press, 248 U.S. 215, 250 (1918)

(Brandeis, J., dissenting). In exchange for his or her labors, an author is awarded the exclusive

right to use his or her work for a period of time, after which the work enters the public domain

and becomes “free as the air to common use.” Id. The Copyright Act was designed to address a

broad category of works, including granting the children of a deceased author the right to recover

the author’s copyrights by statutorily terminating prior copyright transfers. 17 U.S.C. § 304(c),

(d) (2012). However, an author’s copyright protections are not without exception. For example,

works that are “made-for-hire” belong to the employer or other entity that commissioned the

  19

work, even though the creator never assigned or bargained away his or her rights in the work.

See Penguin Grp. (USA) Inc. v. Steinbeck, 537 F.3d 193, 203 (2d Cir. 2008).

The analysis begins with determining the applicable body of law governing termination

of transfers and renewal rights. The law existing during the year the work was created governs

which version of the Copyright Act applies. Marvel Characters, Inc., 726 F.3d at 137; Playboy

Enters., Inc. v. Dumas, 53 F.3d 549, 553 (2d Cir. 1995) (“Playboy I”). Works produced before

January 1, 1978 are governed by the Copyright Act of 1909 (“the 1909 Act”). Playboy I, 53 F.3d

at 553. All works created on or after that date are governed by the Copyright Act of 1976. Id.

Dyson’s works were produced between 1958 and 1963. Accordingly, his works are covered

under the 1909 Act. This Court should look to the plain meaning and legislative intent

underlying the 1909 Act to determine whether Dyson’s works qualify as works-for-hire.

A. The Instance and Expense Test is Improper to Determine Whether Dyson’s Works Qualify as Works-For-Hire Because it is Contradictory to the Plain Meaning of the 1909 Act and Supreme Court Precedent.

Copyright finds its origins in Article I, Section 8, Clause 8 of the U.S. Constitution,

known as the Copyright Clause, which empowers Congress “[t]o promote the Progress of

Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive

Right to their respective Writings and Discoveries.” U.S. Const. art. I, § 8, cl. 17. The

Copyright Clause demonstrates that the Founders’ intent was to protect the creator above all

other claimants. As articulated by this Court, “encouragement of individual effort by personal

gain is the best way to advance public welfare through the talents of authors.” Mazer v. Stein,

347 U.S. 201, 219 (1954).

The instance and expense test provides that where one person engages another to create a

“work of an artistic nature,” the presumption arises that the copyright belongs to “the person at

  20

whose instance and expense the work is done.” Lin-Brook Builders Hardware v. Gertler, 352

F.2d 298, 300 (9th Cir. 1965). Instead of relying on the plain language interpretation of works-

for-hire the, the lower courts misapplied precedent and applied the instance and expense test to

works created by independent contractors. The conflicting application of the instance and

expense test exemplifies its inconsistent and improper application to freelance workers like

Dyson, which leads to an improper termination of an author’s rights.

1. The lower courts misapplied the instance and expense test to determine works-for-hire, which is a recognized misinterpretation of precedent.

Works created by independent contractors or freelance artists are distinct from works-for-

hire, and the blatant misinterpretation of implied assignment cases has perpetuated an improper

application of the instance and expense test. This Court should correct this misreading of law

and set the instance and expense test aside, as it is overly broad, inconsistent, and erodes the

purpose of protecting a creator’s rights.

During the first six decades of the 1909 Act, courts interpreted the language of section

263 within the parameters of the traditional employer/employee relationship. See Estate of Burne

Hogarth v. Edgar Rice Burroughs, Inc., 342 F.3d 149, 161 n.15 (2d Cir. 2003); Playboy I, 53

F.3d at 554 (“Until the mid-1960’s, federal courts applied the works-for-hire doctrine only to

cases in which a traditional employer/employee relationship existed between the hiring party and

the creator of the work.”). Separate and distinct from the traditional employment relationship,

commissioned works were recognized as owned by the hiring party via implied assignment. See

Yardley v. Houghton Mifflin Co., 108 F.2d 28, 30 (2d Cir. 1939).

The Second Circuit utilized the instance and expense test in Brattleboro Publishing Co. v.

                                                                                                               3 “In the interpretation and construction of this title[,] . . . the word ‘author’ shall include an employer in the case of works made for hire.” 17 U.S.C. § 26 (1909 ed.) (repealed).

  21

Winmill Publishing Corp., 369 F.2d 565, 567 (2d Cir. 1966). The Second Circuit applied the

test to determine whether a party commissioned to create a work had assigned its copyright in the

original term. Id. at 567-68. The court held that in the absence of an express agreement to the

contrary, the copyright resided in the advertisers paying newspaper employees to create ads, not

in the newspaper itself. Id. at 568. While Brattleboro stated that works-for-hire principles were

applicable to a commissioned work, the court did not classify the work as a works-for-hire. Id.

A few years later, in Picture Music, Inc. v. Bourne, Inc., the Second Circuit departed

from past precedent and extended the instance and expense test to independent contractors. 457

F.2d 1213, 1217 (2d Cir. 1972). However, the court’s decision relied on erroneous

interpretations of the Brattleboro and Yardley implied assignment cases. Id. In 2003, the

Second Circuit acknowledged this critical misreading in Estate of Burne Hogarth v. Edgar Rice

Burroughs, Inc., stating that in fact “Brattleboro never classified the work as work for hire.” 342

F.3d at 160 n.14. Further, the court in Hogarth acknowledged that Yardley was misread in

Picture Music as well. Id. (“[I]n Picture Music, the Court stated that Yardley ‘held that one who

commissions an artist to paint a mural owns all rights to its reproductions’. . . [i]n fact Yardley

had recognized that the executor of the deceased artist, not the commissioning party, held the

renewal right.”). Finally, this Court, in Community for Creative Non-Violence v. Reid

(“CCNV”), discussed the works-for-hire doctrine under the 1909 Act and concluded “as for

commissioned works, the courts generally presumed that the commissioned party had impliedly

agreed to convey the copyright, along with the work itself, to the hiring party.” 490 U.S. 730,

744 (1989).

This Court’s interpretation was labeled as dicta by the lower courts, even though the

statement made clear that, under the 1909 Act, a hiring party owns a commissioned work created

  22

via assignment, but not as its initial proprietor. See, e.g., Estate of Burne Hogarth, 342 F.3d at

163; cf. 3 Nimmer on Copyright § 9.03[D], at 9-28.4 (2003) (referring to the CCNV discussion of

the 1909 Act and commissioned works stating, “the right to renew such a work, in the first

instance, should therefore revert to that author rather than vesting automatically in the hiring

party. To that extent, the holding of Picture Music becomes untenable”). Accordingly, the

misreading of precedent applying the instance and expense test to the works-for-hire doctrine

should be laid to rest. The misapplication of law not only deteriorates the purpose of the 1909

Act, but also causes inconsistent application in the lower courts.

2. The proper interpretation of works-for-hire is the plain language of the 1909 Act.

This Court should utilize a plain meaning approach to adequately interpret the 1909 Act

because the works-for-hire doctrine has far exceeded the scope intended by Congress. Section

26, the “works-for-hire” provision in the 1909 Act, applicable to pre-1978 works, provides,

“[t]he word author shall include an employer in the case of works made for hire.” 17 U.S.C. §

26 (1909 ed.) (repealed). However, the 1909 Act failed to define “employer” or “works made

for hire.” See id. While the 1909 Act includes the phrase “works-for-hire” as part of a definition

of the term “author,” it did not expressly define the phrase works-for-hire. See Twentieth

Century Fox Film Corp. v. Ent. Distrib., 429 F.3d 869, 877 (9th Cir. 2005); Estate of Burne

Hogarth, 342 F.3d at 156.

The 1909 Act simply states that “[i]n the interpretation and construction of this title[,] . . .

the word ‘author’ shall include an employer in the case of works made for hire.” 17 U.S.C. § 26

(1909 ed.) (repealed). In the absence of a definition, the courts erroneously developed what is

commonly called the instance and expense test to determine who is the legal “author” in

potential “works-for-hire” situations under the 1909 Act. Accordingly, when works are found to

  23

qualify as “for hire,” the hiring party “is legally regarded as the ‘author,’ as distinguished from

the creator of the work.” Estate of Burne Hogarth, 342 F.3d at 156-57.

However, it is a well-established canon of statutory construction that “where words are

employed in a statute which had at the time a well-known meaning at common law or in the law

of this country they are presumed to have been used in that sense unless the context compels to

the contrary.” Standard Oil Co. of N.J. v. United States, 221 U.S. 1, 59 (1911). In other words,

Congress means what it says and says what it means. This remains a “cardinal rule of statutory

construction.” Molzof v. United States, 502 U.S. 301, 307 (1992); Park ‘N Fly, Inc. v. Dollar

Park & Fly, Inc., 469 U.S. 189, 194 (1985) (“Statutory construction must begin with the

language employed by Congress and the assumption that the ordinary meaning of that language

accurately expresses the legislative purpose.”).

Furthermore, legislative history assists this Court in its interpretation of the 1909 Act.

President Theodore Roosevelt expressed the need for a complete revision of copyright law as

opposed to amendments, stating in a message to Congress in December 1905:

Our copyright laws urgently need revision. They are imperfect in definition, confused and inconsistent in expression; they omit provision for many articles which, under modern reproductive processes, are entitled to protection; they impose hardships upon the copyright proprietor which are not essential to the fair protection of the public; they are difficult for the courts to interpret and impossible for the Copyright Office to administer with satisfaction to the public.4

The 1909 Act was drafted in response to the urgent need for uniform copyright protection. To

reflect its common law meaning, Congress did not define the term “employer” in section 26.

The common law meaning of “employer,” which connotes traditional employment, is consistent

with its legal definition not only when the 1909 Act was passed, but also in 1958 and 1963 as

                                                                                                               4 Staff of H. Comm. on Patents, 60th Cong., Rep. on Copyright Act of 1909 1, available at http://ipmall.info/hosted_resources/lipa/copyrights/The%20House%20Report%201%20on%20the%20Copyright%20Act%20of%201909.pdf.

  24

well. See, e.g., Blacks Law Dictionary, 2d ed. 421 (1910) (defining “employer” as “one who

employs the services of others . . . who pays their wages or salaries” and defining “employee” as

“a person in some official employment . . . mean[s] some permanent employment”). Nothing in

the text of the 1909 Act’s works-for-hire provision indicates that Congress used the word

“employer” to describe anything less than a conventional employment relationship.

For decades, including from 1958 through 1963, “employer” was duly given its common

law meaning, and works-for-hire applied solely to conventional employment, not to freelancers

like Dyson. If Congress had intended every contracted creator to be classified as an employee

for purposes of the works-for-hire doctrine in copyright law, then Congress would not have

needed to separately classify employees and independent contractors in the 1976 Act. 17 U.S.C.

§ 101 (2012).

It follows then, Dyson was the original owner of the copyrights to the works he authored

and subsequently assigned to Miracle. Furthermore, his children have the right to recapture his

copyrights by termination of such assignments under 17 U.S.C. § 304(c). This Court should

reverse the holding of the Second Circuit, eliminate the improper use of the instance and expense

test, and remand for further fact-finding as to the plain language interpretation.

B. Even If This Court Applies the Instance and Expense Test, Miracle Failed to Meet Its Burden of Proving That the Works of Dyson Were Works-for-Hire.

The Second Circuit erred in holding that the works of Dyson were works-for-hire because

Dyson’s 262 works published by Miracle between 1958 and 1963 were not created at the

instance and expense of Miracle. When determining ownership as to property rights in certain

works, the “copyright belongs to the person at whose ‘instance and expense’ the work was

created.” Martha Graham Sch. & Dance Found., Inc. v. Martha Graham Ctr. of Contemporary

Dance, Inc., 380 F.3d 624, 634-35 (2d Cir. 2004) (citing Brattleboro Publishing Co., 369 F.2d at

  25

567). “A work is made at the hiring party’s ‘instance and expense’ when the employer induces

the creation of the work and has the right to direct and supervise the manner in which the work is

carried out.” Martha Graham, 380 F.3d at 635. If both prongs of the test are met, the

presumption of a works-for-hire relationship arises and the only way to overcome the

presumption is with “evidence that the parties did not intend to create a work for hire.”

Twentieth Century Fox Film Corp., 429 F.3d at 881.

Summary judgment is appropriate only if the record reveals “that there is no genuine

issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(c). The moving party, Miracle, bears the burden of demonstrating the absence

of any genuine issue of material fact for trial. Anderson, 477 U.S. at 256. A fact is “material” if

it affects the outcome under governing substantive law. Id. at 248. On summary judgment, the

court must resolve all ambiguities and draw all reasonable inferences in favor of the non-moving

party. Id. at 249-250. To prove works-for-hire, the moving party must come forth with “credible

evidence that [the] work was done at the ‘instance and expense’ of [the hiring party].” Self-

Realization Fellowship Church v. Ananda Church of Self-Realization, 206 F.3d 1322, 1326 (9th

Cir. 2000). In this case, Miracle bore the burden of proving that Dyson’s work was created at

Miracle’s instance and expense because works-for-hire is a statutory exception, 17 U.S.C. §

304(c), and an affirmative defense. Dolman v. Agee, 157 F.3d 708, 712 (9th Cir. 1998).

However, because Miracle failed to meet its burden in proving that the instance and expense test

was satisfied, this Court should reverse.

1. Miracle failed to satisfy the instance prong because Miracle did not meet its burden of proving that Dyson’s works were initiated or engaged by Miracle.

Dyson’s works were not created at the instance of Miracle because Dyson created

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characters and comics prior to inducement from Miracle. Furthermore, Dyson maintained

artistic freedom in the comics that he sold to Miracle. The instance prong is met “when the

‘motivating factor in producing the work was the employer who induced the creation’” and

where the hiring party has the “right to direct and supervise” the manner in which the hired party

performs his work. Playboy I, 53 F.3d at 554 (citing Picture Music, 457 F.2d at 1216). The

instance prong examines whether the employer is the motivating factor in the work’s creation.

See Twentieth Century Fox Film Corp., 429 F.3d at 879 (quoting Self-Realization Fellowship

Church, 206 F.3d at 1326); see also Siegel v. Nat’l Periodical Publ’ns., Inc., 508 F.2d 909, 914

(2d Cir. 1974). Therefore, instance is determined by the extent “the hiring party provided the

impetus for, participated in, or had the power to supervise the creation of the work.” Martha

Graham, 380 F.3d at 641.

The instance prong is typically satisfied where the employer initiates and engages an

author to create a work and also maintains the right to supervise the creation of the work. See

Picture Music, 457 F.2d at 1217; Twentieth Century Fox Film Corp., 429 F.3d at 879-80. In

contrast, where works were not induced or initially engaged by a hiring party, a works-for-hire

relationship will likely not be found and the work properly belongs to its creator. Martha

Graham, 380 F.3d at 641; Self-Realization Fellowship Church, 206 F.3d at 1326.

In cases finding works-for-hire, such as Twentieth Century Fox Film Corp. and Picture

Music, the hiring parties solicited individuals to create the works they were seeking, thereby

inducing the artist’s involvement. Twentieth Century Fox Film Corp., 429 F.3d at 879-80

(finding that “General Eisenhower’s creation of Crusade in Europe was induced” by the hiring

party); Picture Music, 457 F.2d at 1217 (holding that instance is met where the employer took

“the initiative in engaging” the author to create the work). Further, in Twentieth Century Fox

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Film Corp., the court recognized the increased degree of control the publishing company had

over the manuscript in comparison with their normal procedure for publishing. 429 F.3d at 880.

There, the publishing company drastically altered the publication process to increase the degree

of in-person supervision over General Eisenhower’s works. Id. This demonstrated to the court a

degree of supervision ordinarily not present in their other publishing endeavors. Id.

Conversely, in Martha Graham, choreographed dances by Martha Graham from 1956 to

1966 were not induced by a hiring party while she was employed part-time as a teacher and

supervisor of the education program because the “scope of her employment at the center did not

include choreography.” 380 F.3d at 637-38. The court reasoned that Martha Graham was not

obligated to create the dances through her employment; instead she created them at her own

instance. Id. Similarly, in Siegel, even though the hiring party did have creative and supervisory

powers over Mr. Siegel, the court found that because Mr. Siegel conceived the idea of the

Superman comic series and created the character previous to his relationship with the hiring

party, his works were not created at the instance of the hiring party. 508 F.2d at 914.

Dyson had a freer hand than most artists involved in the “Miracle Method,” a drafting

method admitted by Burns as a way to keep a lot of artists busy. It is wholly undisputed that

Dyson drew the entirety of the comic scenes in his works and made many creative contributions,

including thinking up and drawing characters on his own, influencing plotting, and pitching fresh

ideas.

As a freelance artist, Dyson was in the business of drawing comic books beginning as

early as 1940, some of which he sold to Miracle long before the works created from 1958 to

1963. The Second Circuit over-looked this previously existing relationship, and chose to focus

only on the details of the working relationship between Dyson and Miracle during the five years

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at issue. Miracle did not induce or “actively engage” Dyson to draw the comics when he

returned in 1958. Dyson had 308 pages of his work published in comic books in 1951 alone,

which was a typical output for him in the years between 1940 and 1978.

Furthermore, in the operation of the “Miracle Method,” Dyson was able to draw the

comics any way he wished to coordinate with the plotlines and made many creative

contributions, including thinking up and drawing characters on his own, influencing plotting, and

presenting fresh ideas. Such autonomy by Dyson shows minimal supervision, if any, by Miracle.

This is inapposite to Twentieth Century Fox Film Corp., where the court recognized the

increased degree of control by the publishing company as a reflection of the instance prong.

Moreover, Dyson had little to no supervision or control as he drew the entirety of his

comics from his own home with no artistic directions from Miracle. Dyson had far more artistic

freedom than other comic book artists under the Miracle Method and created many of his own

characters. This Court should reverse and find Miracle failed to satisfy its burden of proving that

Dyson’s works were created at Miracle’s instance because Dyson was not induced or

commissioned by Miracle to create the 262 works.

2. Miracle cannot satisfy the expense prong because Dyson shouldered the financial risk of creation in the works and was paid a contingent flat rate.

The works of Dyson are not works-for-hire because Dyson assumed the risk of creation

and received contingent payments based on the works Miracle selected. The expense prong

involves determining which party invests resources in the creation of the works and the method

of payment for the works. See Marvel Characters, Inc., 726 F.3d at 139-40. The expense prong

“refers to the resources the hiring party invests in the creation of the work.” Id. at 139. There

are two avenues by which the expense prong may be satisfied: (1) where the hiring party invests

resources and shoulders the risk of creation, or (2) where the nature of payment reflects a “sum

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certain.” Id. at 140.

While the provision of tools, resources, or overhead may be persuasive, it is not

dispositive and should be viewed in context with the nature of payment. Martha Graham, 380

F.3d at 634-35. Where a payment method is contingent or found to be a royalty, a works-for-hire

relationship likely does not exist, whereas a fixed-sum payment method reflects a works-for-hire

relationship. Id. (finding that contingent payments weigh heavily against works-for-hire because

the author bears the financial risk of the work's creation). But see Playboy I, 53 F.3d at 555

(finding that although the artist provided his own tools, worked his own hours, hired his own

assistants, and paid his own taxes, the “sum certain” payment method reflected a works-for-hire

relationship and met the expense requirement).

Further, in Playboy I, the Second Circuit recognized that because Playboy paid the artist a

“fixed sum for each of the works published,” the expense requirement was met. Playboy I, 53

F.3d at 555; Playboy Enters., Inc. v. Dumas, 831 F. Supp. 295, 311 (S.D.N.Y. 1993) (“Playboy

II”) (finding that a publisher’s obligation to pay a “turn down fee” for unused work weighs in

favor of works-for-hire). Comparatively, in Martha Graham School & Dance Foundation, Inc.,

a dance choreographer’s works from 1956 through 1965 were not considered for works-for-hire,

even though she was employed at the center because the choreographer created the dances on her

own accord and not under the scope of her employment contract. 380 F.3d at 638. Although the

aforementioned was dispositive on the issue, the court recognized as significant the fact that the

choreographer utilized the resources of the dance center, its dancers and rehearsal space;

therefore, any risk of creation was shouldered by the dance studio. Id. Moreover, her works

through 1956 and 1965 were not considered for hire because the instance prong was not met. Id.

Conversely, in the case of Twentieth Century Fox Film Corp. v. Entertainment

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Distributing, the court determined that the expense prong was met because the publishing

company took on “all of the financial risk of the book’s success” and agreed to pay the author a

“lump sum for writing the book.” 429 F.3d at 881. There, the publishing company shouldered

the expense for the support staff who assisted the author, including secretaries, a fact checker,

and the services of the publishing company’s editorial board. Id.

In the case at hand, Dyson shouldered the financial risk of creation and was only paid for

the works that Miracle selected. Between 1958 and 1963, Dyson produced 262 works for

Miracle. As he was considered a freelancer, Dyson worked from home and set his own hours

and Miracle did not pay him a fixed wage or salary. Miracle also did not reimburse Dyson for

any expenses or overhead in creating his drawings as a typical employer would under a works-

for-hire relationship. Similar to Martha Graham and Twentieth Century Fox Film Corp., where

the provision of tools, resources, or overhead may be controlling; Dyson provided his own

resources, tools, and worked from his own studio pursuant to his own hours. Based on Dyson

fronting his own costs, he therefore shouldered the risk of creation.

Further, Dyson was also paid a contingent flat rate. Dyson created the works at the risk

that Miracle might reject his works. If Miracle declined to buy his work, Dyson would not

receive compensation. This is distinct from Twentieth Century Fox Film Corp. and Playboy I

because the artists in those cases were guaranteed a “sum certain” and the hiring party was

obligated to pay the artist. Here, Dyson’s payment of a per-page flat rate was not certain; rather,

it was contingent at the whim of Miracle accepting or rejecting Dyson’s works. Furthermore,

unlike Playboy I, where the artist also provided his own tools and resources in exchange for a

guaranteed payment, Miracle was never obligated to pay Dyson for a set number of works or the

works Miracle rejected. Miracle paid Dyson a flat rate for the pages it accepted. Therefore, the

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contingent payment agreement between Dyson and Miracle resembles that of a royalty rather

than a “sum certain.” Because Dyson shouldered the financial risk of creation and Miracle made

contingent flat rate payments, the factors weigh in favor of a non-works-for-hire relationship.

The burden of proof resides with Miracle to prove the instance and expense test, and the

evidence must be viewed in the light most favorable to the non-moving party, Dyson. Miracle

failed to meet this burden; therefore, this Court should reverse.

CONCLUSION In conclusion, as to the issue of jurisdiction, this Court should affirm the decision of the

Second Circuit Court of Appeals because the Southern District of New York lacked personal

jurisdiction over California residents Laura and Nathan Dyson. However, this Court should

reverse the Second Circuit as to the copyright issue because Dyson’s works were not works-for-

hire. This case presents a proper vehicle for this Court to address the inconsistencies and overly

broad application of the instance and expense test.

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CERTIFICATE OF SERVICE

The undersigned hereby certify that a true and correct copy of the foregoing brief was on

this date furnished to each competing team and Prof. Miller W. Shealy, Jr. named below by

Federal Express, first class, postage prepaid to the address of:

Prof. Miller W. Shealy, Jr. Charleston School of Law National Moot Court Competition 81 Mary Street Charleston, South Carolina 29403

This, the 12th day of January 2015. /s/ Team I____________________ Respectfully submitted, Team I, Counsel for Petitioners

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APPENDIX A 17 U.S.C. § 304(c) (c) Termination of Transfers and Licenses Covering Extended Renewal Term. In the case of any copyright subsisting in either its first or renewal term on January 1, 1978, other than a copyright in a work made for hire, the exclusive or nonexclusive grant of a transfer or license of the renewal copyright or any right under it, executed before January 1, 1978, by any of the persons designated by subsection (a)(1)(C) of this section, otherwise than by will, is subject to termination under the following conditions:

(1) In the case of a grant executed by a person or persons other than the author, termination of the grant may be effected by the surviving person or persons who executed it. In the case of a grant executed by one or more of the authors of the work, termination of the grant may be effected, to the extent of a particular author’s share in the ownership of the renewal copyright, by the author who executed it or, if such author is dead, by the person or persons who, under clause (2) of this subsection, own and are entitled to exercise a total of more than one-half of that author’s termination interest. (2) Where an author is dead, his or her termination interest is owned, and may be exercised, as follows:

(A) The widow or widower owns the author’s entire termination interest unless there are any surviving children or grandchildren of the author, in which case the widow or widower owns one-half of the author’s interest. (B) The author’s surviving children, and the surviving children of any dead child of the author, own the author’s entire termination interest unless there is a widow or widower, in which case the ownership of one-half of the author’s interest is divided among them.

(C) The rights of the author’s children and grandchildren are in all cases divided among them and exercised on a per stirpes basis according to the number of such author’s children represented; the share of the children of a dead child in a termination interest can be exercised only by the action of a majority of them.

(D) In the event that the author’s widow or widower, children, and grandchildren are not living, the author’s executor, administrator, personal representative, or trustee shall own the author’s entire termination interest.

(3) Termination of the grant may be effected at any time during a period of five years beginning at the end of fifty-six years from the date copyright was originally secured, or beginning on January 1, 1978, whichever is later.

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(4) The termination shall be effected by serving an advance notice in writing upon the grantee or the grantee’s successor in title. In the case of a grant executed by a person or persons other than the author, the notice shall be signed by all of those entitled to terminate the grant under clause (1) of this subsection, or by their duly authorized agents. In the case of a grant executed by one or more of the authors of the work, the notice as to any one author’s share shall be signed by that author or his or her duly authorized agent or, if that author is dead, by the number and proportion of the owners of his or her termination interest required under clauses (1) and (2) of this subsection, or by their duly authorized agents.

(A) The notice shall state the effective date of the termination, which shall fall within the five-year period specified by clause (3) of this subsection, or, in the case of a termination under subsection (d), within the five-year period specified by subsection (d)(2), and the notice shall be served not less than two or more than ten years before that date. A copy of the notice shall be recorded in the Copyright Office before the effective date of termination, as a condition to its taking effect.

(B) The notice shall comply, in form, content, and manner of service, with requirements that the Register of Copyrights shall prescribe by regulation.

(5) Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.

(6) In the case of a grant executed by a person or persons other than the author, all rights under this title that were covered by the terminated grant revert, upon the effective date of termination, to all of those entitled to terminate the grant under clause (1) of this subsection. In the case of a grant executed by one or more of the authors of the work, all of a particular author’s rights under this title that were covered by the terminated grant revert, upon the effective date of termination, to that author or, if that author is dead, to the persons owning his or her termination interest under clause (2) of this subsection, including those owners who did not join in signing the notice of termination under clause (4) of this subsection. In all cases the reversion of rights is subject to the following limitations:

(A) A derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of other derivative works based upon the copyrighted work covered by the terminated grant.

(B) The future rights that will revert upon termination of the grant become vested on the date the notice of termination has been served as provided by clause (4) of this subsection.

(C) Where the author’s rights revert to two or more persons under clause (2) of this subsection, they shall vest in those persons in the proportionate shares

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provided by that clause. In such a case, and subject to the provisions of subclause (D) of this clause, a further grant, or agreement to make a further grant, of a particular author’s share with respect to any right covered by a terminated grant is valid only if it is signed by the same number and proportion of the owners, in whom the right has vested under this clause, as are required to terminate the grant under clause (2) of this subsection. Such further grant or agreement is effective with respect to all of the persons in whom the right it covers has vested under this subclause, including those who did not join in signing it. If any person dies after rights under a terminated grant have vested in him or her, that person’s legal representatives, legatees, or heirs at law represent him or her for purposes of this subclause. (D) A further grant, or agreement to make a further grant, of any right covered by a terminated grant is valid only if it is made after the effective date of the termination. As an exception, however, an agreement for such a further grant may be made between the author or any of the persons provided by the first sentence of clause (6) of this subsection, or between the persons provided by subclause (C) of this clause, and the original grantee or such grantee’s successor in title, after the notice of termination has been served as provided by clause (4) of this subsection.

(E) Termination of a grant under this subsection affects only those rights covered by the grant that arise under this title, and in no way affects rights arising under any other Federal, State, or foreign laws.

(F) Unless and until termination is effected under this subsection, the grant, if it does not provide otherwise, continues in effect for the remainder of the extended renewal term.

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APPENDIX B 37 C.F.R. § 201.10(d) (d) Service.

(1) The notice of termination shall be served upon each grantee whose rights are being terminated, or the grantee’s successor in title, by personal service, or by first-class mail sent to an address which, after a reasonable investigation, is found to be the last known address of the grantee or successor in title. (2) The service provision of section 203, section 304(c), or section 304(d) of title 17, U.S.C., whichever applies, will be satisfied if, before the notice of termination is served, a reasonable investigation is made by the person or persons executing the notice as to the current ownership of the rights being terminated, and based on such investigation:

(i) If there is no reason to believe that such rights have been transferred by the grantee to a successor in title, the notice is served on the grantee; or (ii) If there is reason to believe that such rights have been transferred by the grantee to a particular successor in title, the notice is served on such successor in title.

(3) For purposes of paragraph (d)(2) of this section, a reasonable investigation includes, but is not limited to, a search of the records in the Copyright Office; in the case of a musical composition with respect to which performing rights are licensed by a performing rights society, a “reasonable investigation” also includes a report from that performing rights society identifying the person or persons claiming current ownership of the rights being terminated. (4) Compliance with the provisions of paragraphs (d)(2) and (d)(3) of this section will satisfy the service requirements of section 203, section 304(c), or section 304(d) of title 17, U.S.C., whichever applies. However, as long as the statutory requirements have been met, the failure to comply with the regulatory provisions of paragraph (d)(2) or (d)(3) of this section will not affect the validity of the service.

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APPENDIX C N.Y. C.P.L.R. § 302(a) (a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:

1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or 2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or 3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he

(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; or

4. owns, uses or possesses any real property situated within the state.