U.S. Supreme Court Stewart v. Abend, 495
U.S. 207 (1990) Stewart v. Abend No. 88-2102 Argued Jan. 9, 1990 Decided April 24,
1990 495
U.S. 207 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH CIRCUIT Syllabus In 1945, author Cornell Woolrich agreed to assign the motion
picture rights to several of his stories, including the one at
issue, to petitioners' predecessor in interest. He also agreed to
renew the copyrights in the stories at the appropriate time, and to
assign the same motion picture rights to the predecessor in
interest for the 28-year renewal term provided by the Copyright Act
of 1909. The film version of the story in question was produced and
distributed in 1954. Woolrich died in 1968 without a surviving
spouse or child, and before he could obtain the rights in the
renewal term for petitioners as promised. In 1969, his executor
renewed the copyright in the story and assigned the renewal rights
to respondent Abend. Apparently in reliance on Rohauer v.
Killiam Shows, Inc., 551 F.2d 484 (CA2) -- which held that the
owner of the copyright in a derivative work may continue to use the
existing derivative work according to the original grant from the
author of the preexisting work even if the grant of rights in the
preexisting work lapsed -- petitioners subsequently rereleased and
publicly exhibited the film. Abend filed suit, alleging, among
other things, that the rerelease infringed his copyright in the
story because petitioners' right to use the story during the
renewal term lapsed when Woolrich died. The District Court granted
petitioners' motions for summary judgment based on Rohauer and the "fair use" defense. The Court of Appeals reversed,
rejecting the reasoning of Rohauer. Relying on Miller
Music Corp. v. Charles N. Daniels, Inc., 362 U.
S. 373 -- which held that assignment of renewal rights
by an author before the time for renewal arrives cannot defeat the
right of the author's statutory successor to the renewal rights if
the author dies before the right to renewal accrues -- the court
concluded that petitioners received from Woolrich only an
expectancy in the renewal rights that never matured, and that his
executor, as his statutory successor, was entitled to renew the
copyright and to assign it to Abend. The court also determined that
petitioners' use of Woolrich's story in their film was not fair
use. Held: 1. The distribution and publication of a derivative work during
the copyright renewal term of a preexisting work incorporated into
the derivative Page 495 U. S. 208 work infringes the rights of the owner of the preexisting work
where the author of that work agreed to assign the rights in the
renewal term to the derivative work's owner, but died before the
commencement of the renewal period, and the statutory successor
does not assign the right to use the preexisting work to the owner
of the derivative work. Pp. 495 U. S.
216 -236.

															(a) The renewal provisions of the 1909 and 1976 Copyright Acts,
their legislative history, and the case law interpreting them
establish that they were intended both to give the author a second
chance to obtain fair remuneration for his creative efforts and to
provide his family, or his executors, absent surviving family, with
a "new estate" if he died before the renewal period arrived. Under Miller Music, although the author may assign all of his
exclusive rights in the copyrighted work by assigning the renewal
copyright without limitation, the assignee holds nothing if the
author dies before commencement of the renewal period. This being
the rule with respect to all of the renewal rights, it
follows, a fortiori, that assignees such as petitioners of
the right to produce a derivative work or some other portion of the
renewal rights also hold nothing but an unfulfilled and
unenforceable expectancy if the author dies before the renewal
period, unless the assignees secure a transfer of the renewal
rights from the author's statutory successor. Pp. 495 U. S.
216 -221.

															(b) Petitioners' contention that any right the owner of rights
in the preexisting work might have had to sue for infringement that
occurs during the renewal term is extinguished by creation of the
new work is not supported by any express provision of the Act nor
by the rationale as to the scope of protection achieved in a
derivative work, and is contrary to the axiomatic principle that a
person may exploit only such copyrighted literary material as he
either owns or is licensed to use. Section 7 of the 1909 Act and §
103(b) of the 1976 Act made explicit the well settled rule that the
owner of a derivative work receives copyright protection only for
the material contributed by him, and to the extent he has obtained
a grant of rights in the preexisting work. Pp. 495 U. S.
221 -224.

															(c) Nor is petitioners' position supported by the termination
provisions of the 1976 Act, which, for works existing in their
original or renewal terms as of January 1, 1978, empowered the
author to gain an additional 19 years' copyright protection by
terminating any grant of rights at the end of the renewal term,
except, under § 304(c)(6)(A), the right to use a derivative work
for which the owner of the derivative work has held valid rights in
the original and renewal terms. No overarching policy preventing
authors of preexisting works from blocking distribution of
derivative works may be inferred from § 304(c)(6)(A), which was
part of a compromise between competing special interests. Page 495 U. S. 209 In fact, the plain language of the section indicates that
Congress assumed that the owner of the preexisting work continued
to possess the right to sue for infringement even after
incorporation of that work into the derivative work, since,
otherwise, Congress would not have explicitly withdrawn the right
to terminate use rights in the limited circumstances contemplated
by the section. Pp. 495 U. S.
224 -227.

															(d) Thus, the Rohauer theory is supported by neither
the 1909 nor the 1976 Act. Even if it were, however, the "rule" of
that case would make little sense when applied across the
derivative works spectrum. For example, although the contribution
by the derivative author of a condensed book might be little as
compared. to that of the original author, publication of the book
would not infringe the preexisting work under the Rohauer "rule" even though the derivative author has no license or grant of
rights in the preexisting work. In fact, the Rohauer "rule" is considered to be an interest-balancing approach. Pp. 495 U. S.
227 -228.

															(e) Petitioners' contention that the rule applied here will
undermine the Copyright Act's policy of ensuring the dissemination
of creative works is better addressed by Congress than the courts.
In attempting to fulfill its constitutional mandate to "secur[e]
for limited Times to Authors . . . the exclusive Right to their
Respective Writings," Congress has created a balance between the
artist's right to control the work during the term of the copyright
protection and the public's need for access to creative works.
Absent an explicit statement of congressional intent that the
rights in the renewal term of an owner of a preexisting work are
extinguished when his work is incorporated into another work, it is
not the role of this Court to alter the delicate balance Congress
has labored to achieve. Pp. 495 U. S.
228 -230.

															(f) Section 7 of the 1909 Act -- which provides that derivative
works when produced with the consent of the copyright proprietor of
the preexisting work

															"shall be regarded as new works subject to copyright . . . ; but
the publication of any such new works shall not affect the force or
validity of any subsisting copyright upon the matter employed . . .
,"

															or be construed to affect the copyright status of the original
work -- does not, as the dissent contends, give the original author
the power to sell the rights to make a derivative work that, upon
creation and copyright, would be completely independent of the
original work. This assertion is derived from three erroneous
premises. First, since the plain meaning of the "force or validity"
clause is that the copyright in the "matter employed" -- i.e., the preexisting work when it is incorporated into
the derivative work -- is not abrogated by publication of the
derivative work, the dissent misreads § 7 when it asserts that only
the copyright in the "original work" survives the author's
conveyance of derivative rights. Second, the substitution of
"publication" for "copyright" Page 495 U. S. 210 in the final version of the force or validity clause does not,
as the dissent contends, establish that it was the publication of
the derivative work, and not the copyright, that was not to "affect
. . . any subsisting copyright." Since publication of a work
without proper notice sent it into the public domain under the 1909
Act, the language change was necessary to ensure that the
publication of a derivative work without proper notice, including
smaller portions that had not been previously published and
separately copyrighted, would not result in those sections' moving
into the public domain. Third, the dissent errs in interpreting § 3
of the 1909 Act -- which provides that a copyright protects all
copyrightable component parts of a work and "all matter therein in
which copyright is already subsisting, but without extending the
duration or scope of such copyright" -- as indicating, when read
with § 7, that the copyright on derivative work extends to both the
new material and that "in which the copyright is already
subsisting," such that the derivative work proprietor has the right
to publish and distribute the entire work absent permission from
the owner of the preexisting work. When § 7 states that derivative
works "shall be regarded as new works subject to copyright," it
simply confirms that § 3's provision that one can obtain copyright
in a work, parts of which were already copyrighted, extends to
derivative works. More important, § 7's second clause merely
clarifies what might have been otherwise unclear -- that the § 3
principle of preservation of the duration or scope of the
subsisting copyright applies to derivative works, and that neither
the scope of the copyright in the matter employed nor the duration
of the copyright in the derivative work is undermined by
publication of the derivative work. Pp. 495 U. S.
230 -236.

															2. Petitioners' unauthorized use of Woolrich's story in their
film does not constitute a noninfringing "fair use." The film does
not fall into any of the categories of fair use enumerated in 17
U.S.C. § 107; e.g., criticism, comment, news reporting,
teaching, scholarship, or research. Nor does it meet any of the
nonexclusive criteria that § 107 requires a court to consider.
First, since petitioners received $12 million from the film's
rerelease during the renewal term, their use was commercial, rather
than educational. Second, the nature of the copyrighted work is
fictional and creative, rather than factual. Third, the story was a
substantial portion of the film, which expressly used its unique
setting, characters, plot, and sequence of events. Fourth, and most
important, the record supports the conclusion that rerelease of the
film impinged on Abend's ability to market new versions of the
story. Pp. 495 U. S.
236 -238.

															863 F.2d 1465 (CA9 1988), affirmed and remanded. Page 495 U. S. 211 O'CONNOR, J., delivered the opinion of the Court, in which
BRENNAN, MARSHALL, BLACKMUN, and KENNEDY, JJ., joined. WHITE, J.,
filed an opinion concurring in the judgment, post, p. 495 U. S. 238 .
STEVENS, J., filed a dissenting opinion, in which REHNQUIST, C.J.,
and SCALIA, J., joined, post, p. 495 U. S.
239 .

															Justice O'CONNOR delivered the opinion of the Court.

															The author of a preexisting work may assign to another the right
to use it in a derivative work. In this case, the author of a
preexisting work agreed to assign the rights in his renewal
copyright term to the owner of a derivative work, but died before
the commencement of the renewal period. The question presented is
whether the owner of the derivative work infringed the rights of
the successor owner of the preexisting work by continued
distribution and publication of the derivative work during the
renewal term of the preexisting work. I Cornell Woolrich authored the story "It Had to Be Murder," which
was first published in February, 1942, in Dime Detective Magazine.
The magazine's publisher, Popular Publications, Inc., obtained the
rights to magazine publication of the story, and Woolrich retained
all other rights. Popular Publications obtained a blanket copyright
for the issue of Dime Detective Magazine in which "It Had to Be
Murder" was published. Page 495 U. S. 212 The Copyright Act of 1909, 35 Stat. 1075, 17 U.S.C. § 1 et
seq. (1976 ed.) (1909 Act), provided authors a 28-year initial
term of copyright protection plus a 28-year renewal term. See 17 U.S.C. § 24 (1976 ed.). In 1945, Woolrich agreed to
assign the rights to make motion picture versions of six of his
stories, including "It Had to Be Murder," to B.G. De Sylva
Productions for $9,250. He also agreed to renew the copyrights in
the stories at the appropriate time, and to assign the same motion
picture rights to De Sylva Productions for the 28-year renewal
term. In 1953, actor Jimmy Stewart and director Alfred Hitchcock
formed a production company, Patron, Inc., which obtained the
motion picture rights in "It Had to Be Murder" from De Sylva's
successors in interest for $10,000.

															In 1954, Patron, Inc., along with Paramount Pictures, produced
and distributed, "Rear Window," the motion picture version of
Woolrich's story "It Had to Be Murder." Woolrich died in 1968,
before he could obtain the rights in the renewal term for
petitioners as promised and without a surviving spouse or child. He
left his property to a trust administered by his executor, Chase
Manhattan Bank, for the benefit of Columbia University. On December
29, 1969, Chase Manhattan Bank renewed the copyright in the "It Had
to Be Murder" story pursuant to 17 U.S.C. § 24 (1976 ed.). Chase
Manhattan assigned the renewal rights to respondent Abend for $650
plus 10% of all proceeds from exploitation of the story.

															"Rear Window" was broadcast on the ABC television network in
1971. Respondent then notified petitioners Hitchcock (now
represented by cotrustees of his will), Stewart, and MCA Inc., the
owners of the "Rear Window" motion picture and renewal rights in
the motion picture, that he owned the renewal rights in the
copyright and that their distribution of the motion picture without
his permission infringed his copyright in the story. Hitchcock,
Stewart, and MCA nonetheless entered into a second license with ABC
to rebroadcast Page 495 U. S. 213 the motion picture. In 1974, respondent filed suit against these
same petitioners, and others, in the United States District Court
for the Southern District of New York, alleging copyright
infringement. Respondent dismissed his complaint in return for
$25,000.

															Three years later, the United States Court of Appeals for the
Second Circuit decided Rohauer v. Killiam Shows, Inc., 551
F.2d 484, cert. denied, 431 U.S. 949 (1977), in which it
held that the owner of the copyright in a derivative work [ Footnote 1 ] may continue to use the
existing derivative work according to the original grant from the
author of the preexisting work even if the grant of rights in the
preexisting work lapsed. 551 F.2d at 494. Several years later,
apparently in reliance on Rohauer, petitioners rereleased
the motion picture in a variety of media, including new 35 and 16
millimeter prints for theatrical exhibition in the United States,
videocassettes, and videodiscs. They also publicly exhibited the
motion picture in theaters, over cable television, and through
videodisc and videocassette rentals and sales.

															Respondent then brought the instant suit in the United States
District Court for the Central District of California against
Hitchcock, Stewart, MCA, and Universal Film Exchanges, a subsidiary
of MCA and the distributor of the motion picture. Respondent's
complaint alleges that the rerelease of the motion picture
infringes his copyright in the story because petitioners' right to
use the story during the renewal term lapsed when Woolrich died
before he could register for the renewal term and transfer his
renewal rights to them. Respondent also contends that petitioners
have interfered with his rights in the renewal term of the story in
other ways. He alleges that he sought to contract with Home Box Page 495 U. S. 214 Office (HBO) to produce a play and television version of the
story, but that petitioners wrote to him and HBO stating that
neither he nor HBO could use either the title, "Rear Window" or "It
Had to Be Murder." Respondent also alleges that petitioners further
interfered with the renewal copyright in the story by attempting to
sell the right to make a television sequel, and that the rerelease
of the original motion picture itself interfered with his ability
to produce other derivative works.

															Petitioners filed motions for summary judgment, one based on the
decision in Rohauer, supra, and the other based on alleged
defects in the story's copyright. Respondent moved for summary
judgment on the ground that petitioners' use of the motion picture
constituted copyright infringement. Petitioners responded with a
third motion for summary judgment based on a "fair use" defense.
The District Court granted petitioners' motions for summary
judgment based on Rohauer and the fair use defense, and
denied respondent's motion for summary judgment, as well as
petitioners' motion for summary judgment alleging defects in the
story's copyright. Respondent appealed to the United States Court
of Appeals for the Ninth Circuit, and petitioners
cross-appealed.

															The Court of Appeals reversed, holding that respondent's
copyright in the renewal term of the story was not defective. 863
F.2d 1465, 1472 (1988). The issue before the court, therefore, was
whether petitioners were entitled to distribute and exhibit the
motion picture without respondent's permission despite respondent's
valid copyright in the preexisting story. Relying on the renewal
provision of the 1909 Act, 17 U.S.C. § 24 (1976 ed.), respondent
argued before the Court of Appeals that, because he obtained from
Chase Manhattan Bank, the statutory successor, the renewal right
free and clear of any purported assignments of any interest in the
renewal copyright, petitioners' distribution and publication of
"Rear Window" without authorization infringed his renewal
copyright. Petitioners responded that Page 495 U. S. 215 they had the right to continue to exploit "Rear Window" during
the 28-year renewal period, because Woolrich had agreed to assign
to petitioners' predecessors in interest the motion picture rights
in the story for the renewal

															Petitioners also relied, as did the District Court, on the
decision in Rohauer v. Killiam Shows, Inc., supra. In Rohauer, the Court of Appeals for the Second Circuit held
that statutory successors to the renewal copyright in a preexisting
work under § 24 could not

															"depriv[e] the proprietor of the derivative copyright of a right
. . . to use so much of the underlying copyrighted work as already
has been embodied in the copyrighted derivative work, as a matter
of copyright law." Id. at 492. The Court of Appeals in the instant case
rejected this reasoning, concluding that, even if the preexisting
work had been incorporated into a derivative work, use of the
preexisting work was infringing unless the owner of the derivative
work held a valid grant of rights in the renewal term.

															The court relied on Miller Music Corp. v. Charles N.
Daniels, Inc., 362 U. S. 373 (1960), in which we held that assignment of renewal rights by an
author before the time for renewal arrives cannot defeat the right
of the author's statutory successor to the renewal rights if the
author dies before the right to renewal accrues. An assignee of the
renewal rights takes only an expectancy:

															"Until [the time for registration of renewal rights] arrives,
assignees of renewal rights take the risk that the rights acquired
may never vest in their assignors. A purchaser of such an interest
is deprived of nothing. Like all purchasers of contingent
interests, he takes subject to the possibility that the contingency
may not occur." Id. at 362 U. S. 378 .
The Court of Appeals reasoned that

															"[i]f Miller Music makes assignment of the full renewal
rights in the underlying copyright unenforceable when the author
dies before effecting renewal of the copyright, then a
fortiori, an assignment of part of the rights in the
underlying work, the right to produce a movie version, must Page 495 U. S. 216 also be unenforceable if the author dies before effecting
renewal of the underlying copyright."

															863 F.2d at 1476. Finding further support in the legislative
history of the 1909 Act and rejecting the Rohauer court's
reliance on the equities and the termination provisions of the 1976
Act, 17 U.S.C. §§ 203(b)(1), 304(c)(6)(A) (1988 ed.), the Court of
Appeals concluded that petitioners received from Woolrich only an
expectancy in the renewal rights that never matured; upon
Woolrich's death, Woolrich's statutory successor, Chase Manhattan
Bank, became "entitled to a renewal and extension of the
copyright," which Chase Manhattan secured "within one year prior to
the expiration of the original term of copyright." 17 U.S.C. § 24
(1976 ed.). Chase Manhattan then assigned the existing rights in
the copyright to respondent.

															The Court of Appeals also addressed at length the proper remedy,
an issue not relevant to the issue on which we granted certiorari.
We granted certiorari to resolve the conflict between the decision
in Rohauer, supra, and the decision below. 493 U.S. 807
(1989). Petitioners do not challenge the Court of Appeals'
determination that respondent's copyright in the renewal term is
valid, and we express no opinion regarding the Court of Appeals'
decision on this point. II A Petitioners would have us read into the Copyright Act a
limitation on the statutorily created rights of the owner of an
under lying work. They argue in essence that the rights of the
owner of the copyright in the derivative use of the preexisting
work are extinguished once it is incorporated into the derivative
work, assuming the author of the preexisting work has agreed to
assign his renewal rights. Because we find no support for such a
curtailment of rights in either the 1909 Act, the 1976 Act, or the
legislative history of either, we affirm the judgment of the Court
of Appeals. Page 495 U. S. 217 Petitioners and Amicus Register of Copyrights assert,
as the Court of Appeals assumed, that § 24 of the 1909 Act, and the
case law interpreting that provision, directly control the
disposition of this case. Respondent counters that the provisions
of the 1976 Act control, but that the 1976 Act reenacted § 24 in §
304 and, therefore, the language and judicial interpretation of §
24 are relevant to our consideration of this case. Under either
theory, we must look to the language of and case law interpreting §
24.

															The right of renewal found in § 24 provides authors a second
opportunity to obtain remuneration for their works. Section 24
provides:

															"[T]he author of [a copyrighted] work, if still living, or the
widow, widower, or children of the author, if the author be not
living, or if such author, widow, widower, or children be not
living, then the author's executors, or in the absence of a will,
his next of kin shall be entitled to a renewal and extension of the
copyright in such work for a further term of twenty-eight years
when application for such renewal and extension shall have been
made to the copyright office and duly registered therein within one
year prior to the expiration of the original term of
copyright."

															17 U.S.C. § 24 (1976 ed.)

															Since the earliest copyright statute in this country, the
copyright term of ownership has been split between an original term
and a renewal term. Originally, the renewal was intended merely to
serve as an extension of the original term; at the end of the
original term, the renewal could be effected and claimed by the
author, if living, or by the author's executors, administrators or
assigns. See Copyright Act of May 31, 1790, ch. XV, § 1, 1
Stat. 124. In 1831, Congress altered the provision so that the
author could assign his contingent interest in the renewal term,
but could not, through his assignment, divest the rights of his
widow or children in the renewal term. See Copyright Act
of February 3, 1831, ch. XVI, 4 Stat. 436; see also G.
Curtis, Law of Copyright 235 Page 495 U. S. 218 (1847). The 1831 renewal provisions created

															"an entirely new policy, completely dissevering the title,
breaking up the continuance . . . and vesting an absolutely new
title eo nomine in the persons designated." White-Smith Music Publishing Co. v. Goff, 187 F. 247,
250 (CA1 1911). In this way, Congress attempted to give the author
a second chance to control and benefit from his work. Congress also
intended to secure to the author's family the opportunity to
exploit the work if the author died before he could register for
the renewal term. See Bricker, Renewal and Extension of
Copyright, 29 S.Cal.L.Rev. 23, 27 (1955) ("The renewal term of
copyright is the law's second chance to the author and his family
to profit from his mental labors").

															"The evident purpose of [the renewal provision] is to provide
for the family of the author after his death. Since the author
cannot assign his family's renewal rights, [it] takes the form of a
compulsory bequest of the copyright to the designated persons." De Sylva v. Ballentine, 351 U.
S. 570 , 351 U. S. 582 (1956). See Fred Fisher Music Co. v. M. Witmark &
Sons, 318 U. S. 643 , 318 U. S. 651 (1943) (if, at the end of the original copyright period, the author
is not living, "his family stand[s] in more need of the only means
of subsistence ordinarily left to them" (citation omitted)).

															In its debates leading up to the Copyright Act of 1909, Congress
elaborated upon the policy underlying a system comprised of an
original term and a completely separate renewal term. See G.
Ricordi & Co. v. Paramount Pictures, Inc., 189 F.2d 469,
471 (CA2) (the renewal right "creates a new estate, and the . . .
cases which have dealt with the subject assert that the new estate
is clear of all rights, interests or licenses granted under the
original copyright"), cert. denied, 342 U.S. 849 (1951).
"It not infrequently happens that the author sells his copyright
outright to a publisher for a comparatively small sum." H.R.Rep.
No. 2222, 60th Cong., 2d Sess., 14 (1909). The renewal term permits
the author, originally in a poor bargaining position, to
renegotiate Page 495 U. S. 219 the terms of the grant once the value of the work has been
tested.

															"[U]nlike real property and other forms of personal property, [a
copyright] is by its very nature incapable of accurate monetary
evaluation prior to its exploitation."

															2 M. Nimmer & D. Nimmer, Nimmer on Copyright, § 9.02, p.
9-23 (1989) (hereinafter Nimmer).

															"If the work proves to be a great success and lives beyond the
term of twenty-eight years, . . . it should be the exclusive right
of the author to take the renewal term, and the law should be
framed . . . so that [the author] could not be deprived of that
right."

															H.R. Rep. No. 2222, supra, at 14. With these purposes
in mind, Congress enacted the renewal provision of the Copyright
Act of 1909, 17 U.S.C. § 24 (1976 ed.). With respect to works in
their original or renewal term as of January 1, 1978, Congress
retained the two-term system of copyright protection in the 1976
Act. See 17 U.S.C. §§ 304(a) and (b) (1988 ed.)
(incorporating language of 17 U.S.C. § 24 (1976 ed.)).

															Applying these principles in Miller Music Corp. v. Charles
N. Daniels, Inc., 362 U. S. 373 (1960), this Court held that, when an author dies before the
renewal period arrives, his executor is entitled to the renewal
rights, even though the author previously assigned his renewal
rights to another party.

															"An assignment by an author of his renewal rights made before
the original copyright expires is valid against the world, if the
author is alive at the commencement of the renewal period. Fisher Co. v. Witmark & Sons, 318 U. S.
643 , so holds." Id., 362 U.S. at 362 U. S. 375 .
If the author dies before that time, the

															"next of kin obtain the renewal copyright free of any claim
founded upon an assignment made by the author in his lifetime.
These results follow not because the author's assignment is
invalid, but because he had only an expectancy to assign, and his
death prior to the renewal period terminates his interest in the
renewal, which, by § 24, vests in the named classes." Ibid. The legislative history of the 1909 Act echoes
this view:

															"The right of renewal is contingent. It does not vest until the
end [of the original term]. Page 495 U. S. 220 If [the author] is alive at the time of renewal, then the
original contract may pass it, but his widow or children or other
persons entitled would not be bound by that contract."

															5 Legislative History of the 1909 Copyright Act, part K, p. 77
(E. Brylawski & A. Goldman eds. 1976) (statement of Mr. Hale).
[ Footnote 2 ] Thus, the renewal
provisions were intended to give the author a second chance to
obtain fair remuneration for his creative efforts and to provide
the author's family a "new estate" if the author died before the
renewal period arrived.

															An author holds a bundle of exclusive rights in the copyrighted
work, among them the right to copy and the right to incorporate the
work into derivative works. [ Footnote 3 ] By assigning the renewal copyright in the work
without limitation, as in Miller Music, the author assigns
all of these rights. After Miller Music, if the author
dies before the commencement of the renewal period, the assignee
holds nothing. If the assignee of all of the renewal rights holds
nothing upon the death of the assignor before arrival of the
renewal period, Page 495 U. S. 221 then, a fortiori, the assignee of a portion of the
renewal rights, e.g., the right to produce a derivative
work, must also hold nothing. See also Brief for Register
of Copyrights as Amicus Curiae 22 (" [A]ny assignment of renewal rights made during the original term is void
if the author dies before the renewal period"). Therefore, if the
author dies before the renewal period, then the assignee may
continue to use the original work only if the author's successor
transfers the renewal rights to the assignee. This is the rule
adopted by the Court of Appeals below and advocated by the Register
of Copyrights. See 863 F.2d at 1478; Brief for Register of
Copyrights as Amicus Curiae 22. Application of this rule
to this case should end the inquiry. Woolrich died before the
commencement of the renewal period in the story, and, therefore,
petitioners hold only an unfulfilled expectancy. Petitioners have
been

															"deprived of nothing. Like all purchasers of contingent
interests, [they took] subject to the possibility that the
contingency may not occur." Miller Music, supra, 362 U.S. at 362 U. S.
378 . B The reason that our inquiry does not end here, and that we
granted certiorari, is that the Court of Appeals for the Second
Circuit reached a contrary result in Rohauer v. Killiam Shows,
Inc., 551 F.2d 484 (1977). Petitioners' theory is drawn
largely from Rohauer. The Court of Appeals in Rohauer attempted to craft a "proper reconciliation"
between the owner of the preexisting work, who held the right to
the work pursuant to Miller Music, and the owner of the
derivative work, who had a great deal to lose if the work could not
be published or distributed. 551 F.2d at 490. Addressing a case
factually similar to this case, the court concluded that, even if
the death of the author caused the renewal rights in the
preexisting work to revert to the statutory successor, the owner of
the derivative work could continue to exploit that work. The court
reasoned that the 1976 Act and the relevant precedents did not
preclude such a result, Page 495 U. S. 222 and that it was necessitated by a balancing of the equities:

															"[T]he equities lie preponderantly in favor of the proprietor of
the derivative copyright. In contrast to the situation where an
assignee or licensee has done nothing more than print, publicize
and distribute a copyrighted story or novel, a person who, with the
consent of the author, has created an opera or a motion picture
film will often have made contributions literary, musical and
economic, as great as or greater than the original author. . . .
[T]he purchaser of derivative rights has no truly effective way to
protect himself against the eventuality of the author's death
before the renewal period, since there is no way of telling who
will be the surviving widow, children or next of kin or the
executor until that date arrives."

															551 F.2d at 493. The Court of Appeals for the Second Circuit
thereby shifted the focus from the right to use the preexisting
work in a derivative work to a right inhering in the created
derivative work itself. By rendering the renewal right to use the
original work irrelevant, the court created an exception to our
ruling in Miller Music and, as petitioners concede,
created an "intrusion" on the statutorily created rights of the
owner of the preexisting work in the renewal term. Brief for
Petitioners 33.

															Though petitioners do not, indeed could not, argue that its
language expressly supports the theory they draw from Rohauer, they implicitly rely on § 6 of the Act, 17 U.S.C.
§ 7 (1976 ed.), which states that

															"dramatizations . . . of copyrighted works when produced with
the consent of the proprietor of the copyright in such works . . .
shall be regarded as new works subject to copyright under the
provisions of this title."

															Petitioners maintain that the creation of the "new," i.e., derivative, work extinguishes any right the owner of
rights in the preexisting work might have had to sue for
infringement that occurs during the renewal term. Page 495 U. S. 223 We think, as stated in Nimmer on Copyright, that

															"[t]his conclusion is neither warranted by any express provision
of the Copyright Act, nor by the rationale as to the scope of
protection achieved in a derivative work. It is moreover contrary
to the axiomatic copyright principle that a person may exploit only
such copyrighted literary material as he either owns or is licensed
to use."

															1 Nimmer § 3.07[A], pp. 3-23 to 3-24 (footnotes omitted). The
aspects of a derivative work added by the derivative author are
that author's property, but the element drawn from the preexisting
work remains on grant from the owner of the preexisting work. See Russell v. Price, 612 F.2d 1123, 1128 (CA9 1979)
(reaffirming "well-established doctrine that a derivative copyright
protects only the new material contained in the derivative work,
not the matter derived from the underlying work"), cert.
denied, 446 U.S. 952 (1980); see also Harper & Row,
Publishers, Inc. v. Nation Enterprises, 471 U.
S. 539 , 471 U. S. 547 (1985) ("The copyright is limited to those aspects of the work --
termed expression' -- that display the stamp of the author's
originality"). So long as the preexisting work remains out of the
public domain, its use is infringing if one who employs the work
does not have a valid license or assignment for use of the
preexisting work. Russell v. Price, supra, at 1128
("[E]stablished doctrine prevents unauthorized copying or other
infringing use of the underlying work or any part of that work
contained in the derivative product so long as the underlying work
itself remains copyrighted"). It is irrelevant whether the
preexisting work is inseparably intertwined with the derivative
work. See Gilliam v. American Broadcasting Cos., 538 F.2d
14, 20 (CA2 1976) ("[C]opyright in the underlying script survives
intact despite the incorporation of that work into a derivative
work"). Indeed, the plain language of § 7 supports the view that
the full force of the copyright in the preexisting work is
preserved despite incorporation into the derivative work. See 17 U.S.C. § 7 (1976 ed.) (publication of the
derivative work "shall not affect the force or validity of Page 495 U. S. 224 any subsisting copyright upon the matter employed"); see
also 17 U.S.C. § 3 (1976 ed.) (copyright protection of a work
extends to "all matter therein in which copyright is already
subsisting, but without extending the duration or scope of such
copyright"). This well-settled rule also was made explicit in the
1976 Act:

															"The copyright in a compilation or derivative work extends only
to the material contributed by the author of such work, as
distinguished from the preexisting material employed in the work,
and does not imply any exclusive right in the preexisting material.
The copyright in such work is independent of, and does not affect
or enlarge the scope, duration, ownership, or subsistence of, any
copyright protection in the preexisting material."

															17 U.S.C. § 103(b). See also B. Ringer, Renewal of
Copyright (1960), reprinted as Copyright Law Revision Study No. 31,
prepared for the Senate Committee on the Judiciary, 86th Cong., 2d.
Sess., 169-170 (1961) ("[O]n the basis of judicial authority,
legislative history, and the opinions of the commentators, . . .
someone cannot avoid his obligations to the owner of a renewal
copyright merely because he created and copyrighted a new
version' under a license or assignment which terminated at the end
of the first term") (footnotes omitted). Properly conceding there is no explicit support for their theory
in the 1909 Act, its legislative history, or the case law,
petitioners contend, as did the court in Rohauer, that the
termination provisions of the 1976 Act, while not controlling,
support their theory of the case. For works existing in their
original or renewal terms as of January 1, 1978, the 1976 Act added
19 years to the 1909 Act's provision of 28 years of initial
copyright protection and 28 years of renewal protection. See 17 U.S.C. §§ 304(a) and (b) (1988 ed.). For those
works, the author has the power to terminate the grant of rights at
the end of the renewal term and, therefore, to gain the benefit of
that additional 19 years of protection. See Page 495 U. S. 225 § 304(c). In effect, the 1976 Act provides a third opportunity
for the author to benefit from a work in its original or renewal
term as of January 1, 1978. Congress, however, created one
exception to the author's right to terminate: the author may not,
at the end of the renewal term, terminate the right to use a
derivative work for which the owner of the derivative work has held
valid rights in the original and renewal terms. See §
304(c)(6)(A). The author, however, may terminate the right to
create new derivative works. Ibid. For example, if the
petitioners held a valid copyright in the story throughout the
original and renewal terms, and the renewal term in "Rear Window"
were about to expire, petitioners could continue to distribute the
motion picture even if respondent terminated the grant of rights,
but could not create a new motion picture version of the story.
Both the court in Rohauer and petitioners infer from this
exception to the right to terminate an intent by Congress to
prevent authors of preexisting works from blocking distribution of
derivative works. In other words, because Congress decided not to
permit authors to exercise a third opportunity to benefit from a
work incorporated into a derivative work, the Act expresses a
general policy of undermining the author's second opportunity. We
disagree.

															The process of compromise between competing special interests
leading to the enactment of the 1976 Act undermines any such
attempt to draw an overarching policy out of § 304(c)(6)(A), which
only prevents termination with respect to works in their original
or renewal copyright terms as of January 1, 1978, and only at the
end of the renewal period. See Ringer, First Thoughts on
the Copyright Act of 1976, 13 Copyright 187, 188-189 (1977) (each
provision of 1976 Act was drafted through series of compromises
between interested parties). More specifically, § 304(c)

															"was part of a compromise package involving the controversial
and intertwined issues of initial ownership, duration of copyright,
and reversion of rights. The Register, Page 495 U. S. 226 convinced that the opposition . . . would scuttle the proposed
legislation, drafted a number of alternative proposals . . . .
"

															"Finally, the Copyright Office succeeded in urging negotiations
among representatives of authors, composers, book and music
publishers, and motion picture studios that produced a compromise
on the substance and language of several provisions."

															" * * * *" "Because the controversy surrounding the provisions disappeared
once the parties reached a compromise, however, Congress gave the
provisions little or no detailed consideration. . . . Thus, there
is no evidence whatsoever of what members of Congress believed the
language to mean."

															Litman, Copyright, Compromise, and Legislative History, 72
Cornell L. Rev. 857, 865-868 (1987) (footnotes omitted).

															In fact, if the 1976 Act's termination provisions provide any
guidance at all in this case, they tilt against petitioners'
theory. The plain language of the termination provision itself
indicates that Congress assumed that Page 495 U. S. 227 the owner of the preexisting work possessed the right to sue for
infringement even after incorporation of the preexisting work in
the derivative work.

															"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."

															17 U.S.C. § 304(c)(6)(A) (emphasis added). Congress would not
have stated explicitly in § 304(c)(6)(A) that, at the end of the
renewal term, the owner of the rights in the preexisting work may
not terminate use rights in existing derivative works unless
Congress had assumed that the owner continued to hold the right to
sue for infringement even after incorporation of the preexisting
work into the derivative work. Cf. Mills Music, Inc. v.
Snyder, 469 U. S. 153 , 469 U. S. 164 (1985) (§ 304(c)(6)(A) "carves out an exception from the reversion
of rights that takes place when an author exercises his right to
termination").

															Accordingly, we conclude that neither the 1909 Act nor the 1976
Act provides support for the theory set forth in Rohauer. And even if the theory found some support in the statute or the
legislative history, the approach set forth in Rohauer is
problematic. Petitioners characterize the result in Rohauer as a bright-line "rule." The Court of Appeals in Rohauer, however, expressly implemented policy
considerations as a means of reconciling what it viewed as the
competing interests in that case. See 551 F.2d at 493-494.
While the result in Rohauer might make some sense in some
contexts, it makes no sense in others. In the case of a condensed
book, for example, the contribution by the derivative author may be
little, while the contribution by the original author is great.
Yet, under the Rohauer "rule," publication of the
condensed book would not infringe the preexisting work even though
the derivative author has no license or valid grant of rights in
the preexisting work. See Brief for Committee for Literary
Property Studies as Amicus Curiae 29-31; see also Brief for Songwriters Guild of America as Amicus Curiae 11-12 (policy reasons set forth in Rohauer make little
sense when applied to musical compositions). Thus, even if the Rohauer "rule" made sense in terms of policy in that case,
it makes little sense when it is applied across the derivative
works spectrum. Indeed, in the view of the commentators, Rohauer did not announce a "rule," but rather an
"interest-balancing approach." See Jaszi, When Works
Collide: Derivative Motion Pictures, Underlying Rights, and the
Public Interest, 28 UCLA L.Rev. 715, 758-761 (1981); Note,
Derivative Copyright and the 1909 Page 495 U. S. 228 Act -- New Clarity or Confusion?, 44 Brooklyn L.Rev. 905,
926-927 (1978).

															Finally, petitioners urge us to consider the policies underlying
the Copyright Act. They argue that the rule announced by the Court
of Appeals will undermine one of the policies of the Act -- the
dissemination of creative works -- by leading to many fewer works
reaching the public. Amicus Columbia Pictures asserts
that

															"[s]ome owners of underlying work renewal copyrights may refuse
to negotiate, preferring instead to retire their copyrighted works,
and all derivative works based thereon, from public use. Others may
make demands -- like respondent's demand for 50% of petitioners'
future gross proceeds in excess of advertising expenses . . . --
which are so exorbitant that a negotiated economic accommodation
will be impossible."

															Brief for Columbia Pictures et al. as Amicus
Curiae 21. These arguments are better addressed by Congress
than the courts.

															In any event, the complaint that the respondent's monetary
request in this case is so high as to preclude agreement fails to
acknowledge that an initially high asking price does not preclude
bargaining. Presumably, respondent is asking for a share in the
proceeds because he wants to profit from the distribution of the
work, not because he seeks suppression of it.

															Moreover, although dissemination of creative works is a goal of
the Copyright Act, the Copyright Act creates a balance between the
artist's right to control the work during the term of the copyright
protection and the public's need for access to creative works. The
copyright term is limited so that the public will not be
permanently deprived of the fruits of an artist's labors. See
Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417 , 464 U. S. 429 (1984) (the limited monopoly conferred by the Copyright Act "is
intended to motivate creative activity of authors and inventors by
the provision of a special reward, and to allow the public access
to the products of their genius after the limited period of
exclusive control has expired"). But nothing in the copyright
statutes would Page 495 U. S. 229 prevent an author from hoarding all of his works during the term
of the copyright. In fact, this Court has held that a copyright
owner has the capacity arbitrarily to refuse to license one who
seeks to exploit the work. See Fox Film Corp. v. Doyal, 286 U. S. 123 , 286 U. S. 127 (1932).

															The limited monopoly granted to the artist is intended to
provide the necessary bargaining capital to garner a fair price for
the value of the works passing into public use. See Harper
& Row, Publishers, Inc. v. Nation Enterprises, 471 U. S. 539 , 471 U. S. 546 (1985) ("The rights conferred by copyright are designed to assure
contributors to the store of knowledge a fair return for their
labors"); Register of Copyrights, Copyright Law Revision, 87th
Cong., 1st Sess., 6 (Comm.Print 1961) ("While some limitations and
conditions on copyright are essential in the public interest, they
should not be so burdensome and strict as to deprive authors of
their just reward. . . . [T]heir rights should be broad enough to
give them a fair share of the revenue to be derived from the market
for their works"). When an author produces a work which later
commands a higher price in the market than the original bargain
provided, the copyright statute is designed to provide the author
the power to negotiate for the realized value of the work. That is
how the separate renewal term was intended to operate. See Ringer, Renewal of Copyright (1960), reprinted as Copyright Law
Revision Study No. 31, prepared for the Senate Committee on the
Judiciary, 86th Cong., 2d. Sess., 125 (1961) ("Congress wanted to
give [the author] an opportunity to benefit from the success of his
work and to renegotiate disadvantageous bargains . . . made at a
time when the value of the work [wa]s unknown or conjectural and
the author . . . necessarily in a poor bargaining position"). At
heart, petitioners' true complaint is that they will have to pay
more for the use of works they have employed in creating their own
works. But such a result was contemplated by Congress, and is
consistent with the goals of the Copyright Act. Page 495 U. S. 230 With the Copyright Act of 1790, Congress provided an initial
term of protection plus a renewal term that did not survive the
author. In the Copyright Act of 1831, Congress devised a completely
separate renewal term that survived the death of the author so as
to create a "new estate" and to benefit the author's family, and,
with the passage of the 1909 Act, his executors. See supra at 495 U. S.
217 -219. The 1976 Copyright Act provides a single, fixed
term, but provides an inalienable termination right. See 17 U.S.C. §§ 203, 302. This evolution of the duration of copyright
protection tellingly illustrates the difficulties Congress faces in
attempting to "secur[e] for limited Times to Authors . . . the
exclusive Right to their respective Writings." U.S. Const., Art. I,
§ 8, cl. 8. Absent an explicit statement of congressional intent
that the rights in the renewal term of an owner of a preexisting
work are extinguished upon incorporation of his work into another
work, it is not our role to alter the delicate balance Congress has
labored to achieve. C In a creative, though ultimately indefensible, exposition of the
1909 Act, the dissent attempts to breathe life into petitioners'
suggestion that the derivative work is somehow independent of the
preexisting work. Although no Court of Appeals in the 81 years
since enactment of the 1909 Act has held as much, and although the
petitioners have not argued the point, the dissent contends
that

															"§ 7 was intended to . . . give the original author the power to
sell the right to make a derivative work that upon creation and
copyright would be completely independent of the original
work." Post at 495 U. S. 244 ; see also post at 495 U. S. 248 .
This assertion, far removed from the more modest holding of Rohauer, is derived from three erroneous premises.

															First, we think the dissent misreads § 7, which provides:

															"Compilations or abridgments, adaptations, arrangements,
dramatizations, translations, or other versions of Page 495 U. S. 231 works in the public domain or of copyrighted works when produced
with the consent of the proprietor of the copyright in such works,
or works republished with new matter, shall be regarded as new
works subject to copyright under the provisions of this title; but
the publication of any such new works shall not affect the force or
validity of any subsisting copyright upon the matter employed or
any part thereof, or be construed to imply an exclusive right to
such use of the original works, or to secure or extend copyright in
such original works."

															17 U.S.C. § 7 (1976 ed.).

															The provision consists of one sentence with two clauses divided
by a semicolon. The first clause lists the types of works that may
be derivative works, explains that one may incorporate either
copyrighted or public domain works into a derivative work, and
further explains that the derivative work itself is copyrightable.
The clause also expressly limits incorporation of copyrighted works
to instances where the owner of the preexisting work
"consents."

															The second clause explains what publication of the new work does not portend: publication of the derivative work does not
" affect the force or validity of any subsisting copyright upon
the matter employed " (emphasis added); publication of the
derivative work does not mean that use of the original work in
other works is precluded; and publication does not mean that a
copyright in the original work shall be secured, e.g., if
the work was in the public domain, or extended, as where the
original work was copyrighted before the date that the derivative
work is copyrighted. The plain meaning of the italicized sentence
is that the copyright in the "matter employed" -- the preexisting
work when it is incorporated into the derivative work -- is not
abrogated by publication of the new work. The succeeding phrases
preserve the copyright status of the original work: publication
does not operate to prohibit other uses of the original work or
"to Page 495 U. S. 232 secure or extend copyright in such original works." Cf.
post at 495 U. S.
249 .

															The dissent fails to heed § 7's preservation of copyright in
both the "matter employed" and the "original work." Under its
theory, only the latter is preserved. See post at 495 U. S. 253 ("author's right to sell his derivative rights is exercised when
consent is conveyed and completed when the derivative work is
copyrighted"); post at 495 U. S. 250 (underlying work "owner . . . retains full dominion and control
over all other means of exploiting" underlying work). In light of §
7's explicit preservation of the "force and validity" of the
copyright in the "matter employed," the dissent is clearly wrong
when it asserts that § 7 was intended to create a work that is
"completely independent" of the preexisting work. Post at 495 U. S. 245 .
The dissent further errs when it unjustifiably presumes that § 7
"limit[s] the enforceability of the derivative copyright." Post at 495 U. S.
249 .

															According to the dissent, § 7 requires the derivative work
author to obtain "consent of the proprietor of the copyright" in
the preexisting work, because "§ 7 . . . derogate[s] in some manner
from the underlying author's copyright rights." Post at 495 U. S. 241 .
The more natural inference to be drawn from the requirement of
consent is that Congress simply intended that a derivative work
author may not employ a copyrighted work without the author's
permission, although of course he can obtain copyright protection
for his own original additions.

															The text of § 7 reveals that it is not "surplusage." Post at 495 U. S. 244 .
It does not merely stand for the proposition that authors receive
copyright protection for their original additions. It also limits
the effect of the publication of the derivative work on the
underlying work. See supra at 495 U. S. 231 .
Nowhere else in the Act does Congress address the treatment to be
afforded derivative works. The principle that additions and
improvements to existing works of art receive copyright protection
was settled at the time the 1909 Act was enacted, a principle that
Congress simply codified in § 7. Page 495 U. S. 233 Second, the dissent attempts to undercut the plain meaning of §
7 by looking to its legislative history and the substitution of the
term "publication" for "copyright" in the force or validity clause.
According to the dissent, that particular alteration in the
proposed bill

															"made clear that it was the publication of the derivative work,
not the copyright itself, that was not to 'affect the force or
validity of any subsisting copyright.'" Post at 495 U. S. 249 .
Under the 1909 Act, it was necessary to publish the work with
proper notice to obtain copyright. Publication of a work without
proper notice automatically sent a work into the public domain. See generally 2 Nimmer § 7.02[C][1]; 17 U.S.C. § 10 (1976
ed.). The language change was suggested only to ensure that the
publication of a "new compiled work" without proper notice,
including smaller portions that had not been previously published
and separately copyrighted, would not result in those sections'
moving into the public domain. See Note, 44 Brooklyn
L.Rev. at 919-920. Had the bill retained the term "copyright,"
publication alone could have affected the force or validity of the
copyright in the preexisting work. Thus, far from telling us
anything about the copyright in the derivative work, as the dissent
apparently believes it does, the language change merely reflects
the practical operation of the Act.

															Third, we think the dissent errs in its reading of § 3. Section
3 provides:

															"The copyright provided by this title shall protect all the
copyrightable component parts of the work copyrighted, and all
matter therein in which copyright is already subsisting, but
without extending the duration or scope of such copyright."

															17 U.S.C. § 3 (1976 ed.).

															The dissent reasons that § 7,

															"read together with § 3, plainly indicates that the copyright on
a derivative work extends to both the new material and that 'in
which copyright is already subsisting.' The author or proprietor of
the derivative work therefore has the statutory right to publish
and distribute the entire work." Post at 495 U. S. 241 .
Section 3, however, Page 495 U. S. 234 undermines, rather than supports, the dissent's ultimate
conclusion that the derivative work is "completely independent" of
the preexisting work. Post at 495 U. S. 245 .
Section 3 makes three distinct points: (1) copyright protects the
copyrightable parts of the work; (2) copyright extends to parts of
the work in which copyright was already obtained, and (3) the
duration or scope of the copyright already obtained will not be
extended. Important for this case is that § 3 provides that one can
obtain copyright in a work where parts of the work are already
copyrighted. For example, one could obtain a copyright in an opera
even though three of the songs to be used were already copyrighted.
This, and only this, is what is meant in § 7 when it states
that

															"[c]ompilations or abridgments, adaptations, arrangements,
dramatizations, translations or other versions of works . . . or
works republished with new matter shall be regarded as new works
subject to copyright under the provisions of this title."

															More important, however, is that, under the express language of
§ 3, one obtains a copyright on the entire work, but the parts
previously copyrighted get copyright protection only according to
the "duration or scope" of the already existing copyright. Thus, if
an author attempts to obtain copyright in a book derived from a
short story, he can obtain copyright on the book for the full
copyright term, but will receive protection of the story parts only
for the duration and scope of the rights previously obtained.
Correlatively, if an author attempts to copyright a novel, e.g., about Cinderella, and the story elements are already
in the public domain, the author holds a copyright in the novel,
but may receive protection only for his original additions to the
Cinderella story. See McCaleb v. Fox Film Corp., 299 F. 48
(CA5 1924); American Code Co. v. Bensinger, 282 F. 829 (CA2 1922).

															The plain language of the first clause of § 7 ensures that this
scheme is carried out with respect to

															"[c]ompilations or abridgments, adaptations, arrangements,
dramatizations, translations, or other versions of works in the
public domain Page 495 U. S. 235 or of copyrighted works . . . or works republished with new
matter," i.e., derivative works. The second clause of § 7
clarifies what might have been otherwise unclear -- that the
principle in § 3 of preservation of the duration or scope of the
subsisting copyright applies to derivative works, and that neither
the scope of the copyright in the matter employed nor the duration
of the copyright in the original work is undermined by publication
of the derivative work. See Adventures in Good Eating v. Best
Places to Eat, 131 F.2d 809, 813, n. 3 (CA7 1942); G.
Ricordi & Co. v. Paramount Pictures, Inc., 189 F.2d 469
(CA2), cert. denied, 342 U.S. 849 (1951); Russell v.
Price, 612 F.2d 1123, 1128 (CA9 1979); see also 1
Nimmer § 3.07.

															If one reads the plain language of § 7 and § 3 together, one
must conclude that they were enacted in no small part to ensure
that the copyright in the preexisting work would not be abrogated
by the derivative work. Section 7 requires consent by the author of
the preexisting work before the derivative work may be produced,
and both provisions explicitly require that the copyright in the
"subsisting work" will not be abrogated by incorporation of the
work into another work.

															If the dissent's theory were correct, § 3 need only say that

															"copyright provided by this title shall protect all the
copyrightable component parts of the work copyrighted, and all
matter therein in which copyright is already subsisting."

															Instead, § 3 goes on to say that the latter coverage exists
"without extending the duration or scope of such copyright."
Clearly, the 1909 Act's plain language requires that the underlying
work's copyright term exists independently of the
derivative work's term, even when incorporated and even though the
derivative work holder owns copyright in the whole "work." If the
terms must exist separately, each copyright term must be examined
for the validity and scope of its grant of rights.

															In this case, the grant of rights in the preexisting work lapsed
and, therefore, the derivative work owner's rights to Page 495 U. S. 236 use those portions of the preexisting work incorporated into the
derivative work expired. Thus, continued use would be infringing;
whether the derivative work may continue to be published is a
matter of remedy, an issue which is not before us. To say otherwise
is to say that the derivative work nullifies the "force" of the
copyright in the "matter employed." Whether or not we believe that
this is good policy, this is the system Congress has provided, as
evidenced by the language of the 1909 Act and the cases decided
under the 1909 Act. Although the dissent's theory may have been a
plausible option for a legislature to have chosen, Congress did not
so provide. III Petitioners assert that, even if their use of "It Had to Be
Murder" is unauthorized, it is a fair use and, therefore, not
infringing. At common law, "the property of the author . . . in his
intellectual creation [was] absolute until he voluntarily part[ed]
with the same." American Tobacco Co. v. Werckmeister, 207 U. S. 284 , 207 U. S. 299 (1907). The fair use doctrine, which is incorporated into the 1976
Act, evolved in response to this absolute rule. See Harper
& Row, supra, 471 U.S. at 471 U. S.
549 -551. The doctrine is an " equitable rule of
reason,'" Sony Corp. of America v. Universal City Studios,
Inc., supra, 464 U.S. at 464 U. S. 448 ,
which "permits courts to avoid rigid application of the copyright
statute when, on occasion, it would stifle the very creativity
which that law is designed to foster." Iowa State University Research Foundation, Inc. v. American
Broadcasting Cos., 621 F.2d 57, 60 (CA2 1980). Petitioners
contend that the fair use doctrine should be employed in this case
to "avoid [a] rigid applicatio[n] of the Copyright Act." Brief for
Petitioners 42.

															In 17 U.S.C. § 107, Congress provided examples of fair use, e.g., copying "for purposes such as criticism, comment,
news reporting, teaching (including multiple copies for classroom
use), scholarship, or research," and listed four Page 495 U. S. 237 nonexclusive factors that a court must consider in determining
whether an unauthorized use is not infringing:

															"(1) the purpose and character of the use, including whether
such use is of a commercial nature or is for nonprofit educational
purposes;"

															"(2) the nature of the copyrighted work;"

															"(3) the amount and substantiality of the portion used in
relation to the copyrighted work as a whole; and"

															"(4) the effect of the use upon the potential market for or
value of the copyrighted work."

															The Court of Appeals determined that the use of Woolrich's story
in the petitioners' motion picture was not fair use. We agree. The
motion picture neither falls into any of the categories enumerated
in § 107 nor meets the four criteria set forth in § 107.

															"[E]very [unauthorized] commercial use of copyrighted material
is presumptively an unfair exploitation of the monopoly privilege
that belongs to the owner of the copyright." Sony Corp. of America v. Universal Studios, Inc.,
supra, 464 U.S. at 464 U. S. 451 .
Petitioners received $12 million from the rerelease of the motion
picture during the renewal term. 863 F.2d at 1468. Petitioners
asserted before the Court of Appeals that their use was
educational, rather than commercial. The Court of Appeals found
nothing in the record to support this assertion, nor do we.

															Applying the second factor, the Court of Appeals pointed out
that "[a] use is less likely to be deemed fair when the copyrighted
work is a creative product." 863 F.2d at 1481 (citing Brewer v.
Hustler Magazine, Inc., 749 F.2d 527, 529 (CA9 1984)). In
general, fair use is more likely to be found in factual works than
in fictional works. See 3 M. & D. Nimmer § 13.05[A],
pp. 13-77 to 13-78 ("[A]pplication of the fair use defense [is]
greater . . . in the case of factual works than in the case of
works of fiction or fantasy"); Page 495 U. S. 238 cf. Harper & Row, 471 U.S. at 471 U. S. 563 ("The law generally recognizes a greater need to disseminate
factual works than works of fiction or fantasy"). A motion picture
based on a fictional short story obviously falls into the latter
category.

															Examining the third factor, the Court of Appeals determined that
the story was a substantial portion of the motion picture. See
Harper & Row, 471 U.S. at 471 U. S.
564 -565 (finding unfair use where quotation from book
" took what was essentially the heart of the book'"). The motion
picture expressly uses the story's unique setting, characters,
plot, and sequence of events. Petitioners argue that the story
comprised only 20% of the motion picture's story line, Brief for
Petitioners 40, n. 69, but that does not mean that a substantial
portion of the story was not used in the motion picture. "[A]
taking may not be excused merely because it is insubstantial with
respect to the infringing work." Harper & Row, supra, at 565. The fourth factor is the "most important, and indeed, central
fair use factor." 3 Nimmer § 13.05[A], p. 13-81. The record
supports the Court of Appeals' conclusion that rerelease of the
film impinged on the ability to market new versions of the story.
Common sense would yield the same conclusion. Thus, all four
factors point to unfair use.

															"This case presents a classic example of an unfair use: a
commercial use of a fictional story that adversely affects the
story owner's adaptation rights."

															863 F.2d at 1482.

															For the foregoing reasons, the judgment of the Court of Appeals
is affirmed, and the case is remanded for further proceedings
consistent with this opinion. It is so ordered. [ Footnote 1 ]

															The Copyright Act of 1976, 17 U.S.C. § 101 et seq. (1988 ed.) (1976 Act), codified the definition of a " derivative
work,'" as "a work based upon one or more preexisting works, such as a
translation, musical arrangement, dramatization, fictionalization,
motion picture version . . . or any other form in which a work may
be recast, transformed, or adapted."

															17 U.S.C. § 101.

															[ Footnote 2 ]

															Neither Miller Music nor Fred Fisher decided
the question of when the renewal rights vest, i.e., whether the renewal rights vest upon commencement of the
registration period, registration, or the date on which the
original term expires and the renewal term begins. We have no
occasion to address the issue here.

															[ Footnote 3 ]

															17 U.S.C. § 106 (1988 ed.) codifies the various rights a
copyright holder possesses:

															"[T]he owner of copyright under this title has the exclusive
rights to do and to authorize any of the following:"

															"(1) to reproduce the copyrighted work in copies or
phonorecords;"

															"(2) to prepare derivative works based upon the copyrighted
work;"

															"(3) to distribute copies or phonorecords of the copyrighted
work to the public by sale or other transfer of ownership, or by
rental, lease, or lending;"

															"(4) in the case of literary, musical, dramatic, and
choreographic works, pantomimes, and motion pictures and other
audiovisual works, to perform the copyrighted work publicly;
and"

															"(5) in the case of literary, musical, dramatic, and
choreographic works, pantomimes, and pictorial, graphic, or
sculptural works, including the individual images of a motion
picture or other audiovisual work, to display the copyrighted work
publicly."

															Justice WHITE, concurring in the judgment.

															Although I am not convinced, as the Court seems to be, that the
decision in Miller Music Corp. v. Charles N. Daniels,
Inc., 362 U. S. 373 (1960), was required by the Copyright Act, neither am I convinced
that it was an impermissible construction of the statute. And
because Miller Music, in my view, requires the result
reached by the Court in this case, I concur in the judgment of
affirmance. Page 495 U. S. 239 Justice STEVENS, with whom THE CHIEF JUSTICE and Justice SCALIA
join, dissenting.

															The Constitution authorizes the Congress:

															"To 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. 8. Section 7 of the Copyright Act
of 1909, 35 Stat. 1075, furthers that purpose; § 24 of that Act, as
construed by the Court in this case, does not. It is therefore
appropriate to begin with § 7. [ Footnote 2/1 ] I In a copyright case, as in any other case, the language of the
statute provides the starting point. Community for Creative
Non-Violence v. Reid, 490 U. S. 730 , 490 U. S. 739 ,
(1989); Mills Music, Inc. v. Snyder, 469 U.
S. 153 , 469 U. S. 164 (1985).

															Section 7 of the 1909 Act provides in pertinent part:

															"Compilations or abridgments, adaptations, arrangements,
dramatizations, translations, or other versions of Page 495 U. S. 240 works in the public domain or of copyrighted works when produced
with the consent of the proprietor of the copyright in such works .
. . shall be regarded as new works subject to copyright under the
provisions of this title; but the publication of any such new works
shall not affect the force or validity of any subsisting copyright
upon the matter employed or any part thereof, or be construed to
imply an exclusive right to such use of the original works, or to
secure or extend copyright in such original works."

															17 U.S.C. § 7 (1976 ed.).

															This statutory provision deals with derivative works -- works
that include both old material and new material. The plain language
of § 7 confers on the entire derivative work -- not just the new
material contained therein -- the status of all other works of
authorship, that of "new works subject to copyright under the
provisions of this title." Among those rights is that specified in
§ 3 of the Act, which applies both to composite and derivative
works and states that

															"the copyright provided by this Act shall protect all the
copyrightable component parts of the work copyrighted, and all
matter therein in which copyright is already subsisting, but
without extending the duration or scope of such copyright."

															In turn, under § 1, the author or proprietor of the copyright
has the right to distribute and publicly perform the copyrighted
derivative work. §§ 1(a), 1(d). [ Footnote 2/2 ] The statute does not say Page 495 U. S. 241 anything about the duration of the copyright being limited to
the underlying work's original term; rather, derivative works made
with the consent of the author and derivative works based on matter
in the public domain are treated identically. They are both given
independent copyright protection. Section 7, read together with §
3, plainly indicates that the copyright on a derivative work
extends to both the new material and that "in which copyright is
already subsisting." § 3. The author or proprietor of the
derivative work therefore has the statutory right to publish and
distribute the entire work. [ Footnote
2/3 ]

															The structure of § 7 confirms this reading. The statute does not
merely provide the derivative author with a right to copyright, but
goes on to set limitations and conditions on that copyright. The
statute makes "the consent of the proprietor of the [underlying]
copyright" a precondition for copyright of the derivative work, a
provision that would make little sense if the copyright provided by
§ 7 did not derogate in some manner from the underlying author's
copyright rights. [ Footnote 2/4 ]
The Page 495 U. S. 242 statute also directs that the right granted the derivative work
proprietor should not "be construed to imply an exclusive right to
such use of the original works," suggesting, by negative
implication, that it should be read to include a nonexclusive right
to use of the original works. The provision that publication "shall not affect the force or validity of any
subsisting copyright" also suggests that publication would
otherwise have the capacity to affect the force or validity of the
original copyright: by publishing the derivative work Page 495 U. S. 243 without satisfying the notice requirements of the Act, the
derivative author would dedicate to the public not only his own
original contribution but also that of the original author.
Conversely, the limitation that publication . . . does not "secure
or extend copyright in such original works" would be unnecessary if
the copyrighted derivative work did not include within it some of
the material covered by the earlier copyright, or if the term of
the derivative copyright did not extend beyond the life of the
original copyright. [ Footnote 2/5 ]
Although the derivative copyright protects only the new
material contained within the new work, that limitation is not the
product of the limited extent of the copyright -- which encompasses
both new and old material -- but rather of the specific statutory
language restricting its effect against third parties. [ Footnote 2/6 ] Page 495 U. S. 244 Any other interpretation would render, the provision largely
surplusage. The Copyright Act of 1909 elsewhere accords protection
to "all the writings of an author," § 4, including dramatic
composition, § 5, and long before the Act of 1909, it was
recognized that the additions and improvements to existing works of
art were subject to copyright as original works of authorship.
[ Footnote 2/7 ] Congress would
hardly have needed to provide for the copyright of derivative
works, including the detailed provisions on the limit of that
copyright, if it intended only to accord protection to the
improvements to an original work of authorship. In my opinion, § 7
was intended to do something more: to give the original author the
power Page 495 U. S. 245 to sell the right to make a derivative work that, upon creation
and copyright, would be completely independent of the original
work. II The statutory background supports the conclusion that Congress
intended the original author to be able to sell the right to make a
derivative work that could be distributed for the full term of the
derivative work's copyright protection. At the time of the
enactment of § 7, copyright in the right to dramatize a nondramatic
work was a relatively recent innovation with equivocal support.
Until 1870, an author had only the right to prevent the copying or
vending of his work in the identical medium. [ Footnote 2/8 ] The Act of 1870, which gave the author the
"sole liberty of printing, reprinting, publishing, completing,
copying, executing, finishing, and vending," made a limited start
toward further protection, providing that "authors may reserve the
right to dramatize or to translate their own works." Act of 1870,
ch. 230, § 86, 16 Stat. 212. The identical language was carried
over when the statute was revised in 1873. Rev.Stat. § 4952. The
Act of 1891 was a landmark. It gave the same rights to the "author"
as had the previous statutes, but provided further that

															"authors or their assigns shall have exclusive right to
dramatize and translate any of their works for which copyright
shall have been obtained under the laws of the United States."

															Act of 1891, ch. 565, § 4952, 26 Stat. 1107. The case law was in
accord. Although courts were occasionally willing to enjoin
abridgments as infringing, in 1853 Justice Grier wrote that a
dramatization of the novel Uncle Tom's Cabin would not infringe Page 495 U. S. 246 the author's rights in the book, see Stowe v. Thomas, 23 F. Cas. 201, 208 (No. 13,514) (CC ED Pa.1853), [ Footnote 2/9 ] and it was not until after the
passage of the 1909 Act that this Court first held that a copy of a
literary work in another form than the original could infringe the
author's copyright. See Kalem Co. v. Harper Brothers, 222 U. S. 55 (1911). [ Footnote 2/10 ] Page 495 U. S. 247 The drafts of the copyright bill, considered by the Conferences
held by the Register of Copyrights and the Librarian of Congress in
1905 and 1906, [ Footnote 2/11 ]
had three distinctive features with respect to derivative works:
they provided a limited period of protection from the creation of
derivative works during which a derivative work could only be
created with "the consent of the author or his assigns," Brylawski
& Goldman D-LXV; [ Footnote
2/12 ] they distinguished between the copyright term for
original works of authorship and for derivative works, according
the latter a shorter period of protection; [ Footnote 2/13 ] and, finally, they provided that
derivative works produced with the consent of the original author
would be considered new works entitled to copyright. Together,
these provisions reveal a more complicated set of theoretical
premises than is commonly acknowledged. Although originality of
authorship was an essential precondition of copyright, Page 495 U. S. 248 the duration of the copyright term and the extent of copyright
protection rested upon the nature of the work as a whole, rather
than the original expression contributed by the copyright author.
Moreover, the consent of the underlying author to the production of
a derivative work was to be encouraged and, once given, entitled
the derivative work to independence from the work upon which it was
based.

															The first two provisions were not included in the Copyright Act,
which gave authors the right, during the full term of copyright, to
create or consent to the creation of derivative works which would
then enjoy their own copyright protection. But the third provision,
which set the conditions upon which an original author would
consent and the second author would create a derivative work
entitled to protection under the Copyright Act, carried forward the
view that the derivative copyright extended beyond the original
contribution of the derivative author. Throughout the debates on
the provision, the drafters of the Copyright Act evinced their
understanding that the derivative copyright itself encompassed the
whole derivative work. The first draft of § 7, considered by the
second Conference in 1905, would have provided copyright as a new
work for a derivative work "produced with the consent and
authorization of the author of the original," without any
restrictions on the effect of that copyright on the copyright in
the original work. Brylawski & Goldman D-XXXII. By the time of
the third Conference in 1906, the Register of Copyrights expressed
his concern that that provision would be read too broadly, adding
the proviso:

															"That the copyright thus secured shall not be construed to grant
any exclusive right to such use of the original works, except as
that may be obtained by agreement with the author or proprietor
thereof." Id. at E-LI. The implication was that, in the absence
of an agreement, the author of the derivative work would have, as a
matter of copyright law, a nonexclusive right "to such use of the
original works." Page 495 U. S. 249 The final draft presented to Congress at the end of 1906
addressed a parallel problem that the license to use the underlying
material might also detract from the rights of the underlying
copyright if the derivative author did not adequately protect the
material on which the copyright was subsisting. To allay this
concern, the Register added the language "no such copyright shall
affect the force or validity of any subsisting copyright upon the
matter employed or any part thereof." Id. at B-15.

															Two significant changes were made during the congressional
hearings from 1907 through 1909, but with those exceptions the
provision survived intact. First, in response to the objection that
the language of § 6, in conjunction with that of § 3, would be read
to give the derivative work proprietor "a new term of copyright
running on this old matter of his" and, in that way, provide for
perpetual copyright, id. at J-132-13 (statement of Mr.
Porterfeid); see also id. at J-428, Congress limited the
enforceability of the derivative copyright, adding language that
publication of the dramatization would not "secure or extend
copyright in such original works." § 6, 35 Stat. 1077. Second, in
response to the objection that the Register's draft provision did
not address with sufficient precision the possibility that failure
of the derivative copyright would allow the underlying work to
enter the public domain, Congress substituted the word
"publication" for "copyright" in the "force or validity" clause.
Congress thus made clear that it was the publication of the
derivative work, not the copyright itself, that was not to "affect
the force or validity of any subsisting copyright." Ibid. [ Footnote 2/14 ] Page 495 U. S. 250 The legislative history confirms that the copyright in
derivative works not only gives the second creative product the
monopoly privileges of excluding others from the unconsented use of
the new work, but also allows the creator to publish his or her own
work product. The authority to produce the derivative work, which
includes creative contributions by both the original author and the
second artist, is dependent upon the consent of the proprietor of
the underlying copyright. But once that consent has been obtained,
and a derivative work has been created and copyrighted in accord
with that consent, "a right of property spr[ings] into existence," Edmonds v. Stern, 248 F. 897, 898 (CA2 1918), that
Congress intended to protect. Publication of the derivative work
does not "affect the force or validity" of the underlying copyright
except to the extent that it gives effect to the consent of the
original proprietor. That owner -- and in this case, the owner of a
renewal of the original copyright -- retains full dominion and
control over all other means of exploiting that work of art,
including the right to authorize other derivative works. The
original copyright may have relatively little value because the
creative contribution of the second artist is far more significant
than the original contribution, Page 495 U. S. 251 but that just means that the rewards for creativity are being
fairly allocated between the two artists whose combined efforts
produced the derivative work. III Nothing in § 24 of the 1909 Act requires a different result. The
portion of that section dealing with copyright renewals provides
that:

															"[T]he author of such work, if still living, or the widow,
widower, or children of the author, if the author be not living, .
. . shall be entitled to a renewal and extension of the copyright
in such work for a further term of twenty-eight years when
application for such renewal and extension shall have been made to
the copyright office and duly registered therein within one year
prior to the expiration of the original term of copyright."

															17 U.S.C. § 24 (1976 ed.).

															That statute limits the renewal rights in a copyright to the
specified statutory beneficiaries,

															"completely dissevering the title, breaking up the continuance .
. . and vesting an absolutely new title eo nomine in the
persons designated." White-Smith Music Publishing Co. v. Goff, 187 F. 247,
250 (CA1 1911). Since copyright is a creature of statute, and since
the statute gives the author only a contingent estate, with "the
widow, widower, or children" as remaindermen, the author "ha[s]
only an expectancy to assign" for the second term. Miller Music
Corp. v. Charles N. Daniels, Inc., 362 U.
S. 373 , 362 U. S. 375 (1960). The original author may not sell more than he owns. He may
not convey the second-term rights to print or copy the underlying
work or to create additional derivative works from it. See
Gilliam v. American Broadcasting Companies, Inc., 538 F.2d 14,
21 (CA2 1976); G. Ricordi & Co. v. Paramount Pictures
Inc., 189 F.2d 469 (CA2), cert. denied, 342 U.S. 849
(1951). [ Footnote 2/15 ] Nor may
the derivative author dedicate Page 495 U. S. 252 the underlying art to the public by failing to renew his
copyright. See Filmvideo Releasing Corp. v. Hastings, 668
F.2d 91, 93 (CA2 1981); Russell v. Price, 612 F.2d 1123,
1128 (CA9 1979). [ Footnote 2/16 ]
Even if the alienation of second-term rights would be in the
author's best interest, providing funds when he is most in need,
the restriction on sale of the corpus is a necessary consequence of
Congress' decision to provide two terms of copyright.

															Neither § 24 nor any other provision of the Act, however,
expressly or by implication, prevents the author from exercising
any of his other statutory rights during the original term of the
copyright. The author of the underlying work may contract to sell
his work at a bargain price during the original term of the
copyright. That agreement would be enforceable even if performance
of the contract diminished the value of the copyright to the owner
of the renewal interest. Similarly, the original author may create
and copyright his own derivative work; the right of an assignee or
legatee to receive that work by assignment or bequest should not be
limited by the interests of the owners of the renewal copyright in
the underlying work. Section 1 of the Act gives the author the
right to dramatize his own work without any apparent restriction.
Such use might appear, at the time or in retrospect, to be
improvident and a waste of the asset. Whatever harm the proprietor
of the renewal copyright might suffer, however, is a consequence of
the enjoyment by the author of the rights granted him by
Congress.

															The result should be no different when the author exercises his
right to consent to creation of a derivative work by another. By
designating derivative works as "new works" Page 495 U. S. 253 that are subject to copyright and accorded the two terms
applicable to original works, Congress evinced its intention that
the derivative copyright not lapse upon termination of the original
author's interest in the underlying copyright. The continued
publication of the derivative work, after the expiration of the
original term of the prior work, does not infringe any of the
statutory successor's rights in the renewal copyright of the
original work. The author's right to sell his derivative rights is
exercised when consent is conveyed and completed when the
derivative work is copyrighted. At that point, prior to the end of
the first term, the right to prevent publication of the derivative
work is no longer one of the bundle of rights attaching to the
copyright. The further agreement to permit use of the underlying
material during the renewal term does not violate § 24, because, at
the moment consent is given and the derivative work is created and
copyrighted, a new right of property comes into existence
independent of the original author's copyright estate.

															As an ex post matter, it might appear that the original
author could have negotiated a better contract for his consent to
creation of a derivative work, but Congress in § 24 was not
concerned with giving an author a second chance to renegotiate his
consent to the production of a derivative work. [ Footnote 2/17 ] It provided explicitly that, once
consent was given, the derivative work was entitled as a matter of
copyright law to treatment as a "new work." § 7. Ironically, by
restricting the Page 495 U. S. 254 author's ability to consent to creation of a derivative work
with independent existence, the Court may make it practically
impossible for the original author to sell his derivative rights
late in the original term and to reap the financial and artistic
advantage that comes with the creation of a derivative work.
[ Footnote 2/18 ] Unless § 24 is to
overwhelm § 7, the consent of the original author must be given
effect, whether or not it intrudes into the renewal term of the
original copyright.

															A putative author may sell his work to a motion picture company
who will have greater use for it, by becoming an employee and
making the work "for hire." The 1909 Act gave the employer the
right to renew the copyright in such circumstances. [ Footnote 2/19 ] In addition, when an
author intends that his work be used as part of a joint work, the
copyright law gives the joint author common authority to exploit
the underlying work and renew the copyright. [ Footnote 2/20 ] The Court today Page 495 U. S. 255 holds, however, that the independent entrepreneur, who does not
go into the company's employ and who intends to make independent
use of his work, does not also have the same right to sell his
consent to produce a derivative work that can be distributed and
publicly performed during the full term of its copyright
protection. That result is perverse and cannot have been what
Congress intended. [ Footnote
2/21 ]

															The critical flaw in the Court's analysis is its implicit
endorsement of the Court of Appeals reasoning that:

															"'If Miller Music makes assignment of the full renewal
rights in the underlying copyright unenforceable when the author
dies before effecting renewal of the copyright, then, a
fortiori, an assignment of part of the rights in the
underlying work, the right to produce a movie version, must also be
unenforceable if the author dies before effecting renewal of the
underlying copyright.'" Ante at 495 U. S.
215 -216. That reasoning would be valid if the sole basis
for the protection of the derivative work were the contractual
assignment of copyright, but Woolrich did not just assign the
rights to produce a movie version the way an author would assign
the publisher rights to copy and vend his work. Rather, he
expressed his consent to production of a derivative work under § 7.
The possession of a copyright on a properly created derivative work
gives the proprietor rights superior to those of Page 495 U. S. 256 a mere licensee. As Judge Friendly concluded, this position is
entirely consistent with relevant policy considerations. [ Footnote 2/22 ]

															In my opinion, a fair analysis of the entire 1909 Act, with
special attention to § 7, indicates that the statute embodied the
same policy choice that continues to be reflected in the 1976 Act.
Section 101(c)(6)(A) of that Act provides:

															"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."

															17 U.S.C.App. § 304(c)(6)(A) (1976 ed.).

															I respectfully dissent.

															[ Footnote 2/1 ]

															Although the Court of Appeals determined the rights of the
parties by looking to the 1909 Act, respondent now argues that the
1976 Act is applicable. At the time petitioner secured its
copyright in the film in 1954, and respondent renewed its copyright
in the short story in 1969, the Copyright Act of 1909 was in
effect. There is no evidence that Congress in the Copyright Act of
1976 intended to abrogate rights created under the previous Act. I
therefore take it as evident that, while the cause of action under
which respondent sues may have been created by the 1976 Act, the
respective property rights of the parties are determined by the
statutory grant under the 1909 Act. See Roth v. Pritikin, 710 F.2d 934, 938 (CA2), cert. denied, 464 U.S. 961
(1983); International Film Exchange, Ltd. v. Corinth Films,
Inc., 621 F.
Supp. 631 (SDNY 1985); Jaszi, When Works Collide: Derivative
Motion Pictures, Underlying Rights, and the Public Interest, 28
UCLA L.Rev. 715, 746-747 (1981) (hereinafter Jaszi). Cf. 1
M. Nimmer & D. Nimmer, Nimmer on Copyright § 1.11, p. 1-96
(1989) (hereinafter Nimmer) (no explicit statement of a legislative
intent to apply the current Act retroactively).

															[ Footnote 2/2 ]

															Section I of the 1909 Act provides in pertinent part:

															"That any person entitled thereto, upon complying with the
provisions of this Act, shall have the exclusive right:"

															"(a) To print, reprint, publish, copy, and vend the copyrighted
work;"

															" * * * *" "(d) To perform or represent the copyrighted work publicly if it
be a drama . . . ; and to exhibit, perform, represent, produce, or
reproduce it in any manner or by any method whatsoever."

															In its response to this dissent, the Court completely ignores
the plain language of § 1.

															[ Footnote 2/3 ]

															The Court states that this reading of § 7 is "creative," has not
been adopted by any Court of Appeals in the history of the 1909
Act, and has not been argued by petitioner. Ante at 495 U. S. 230 .
Although I am flattered by this comment, I must acknowledge that
the credit belongs elsewhere. In their briefs to this Court,
petitioners and their amici argue that § 7 created an
independent but limited copyright in the entire derivative work
entitled to equal treatment with original works under the renewal
and duration provisions of § 24. Brief for Petitioners 14-15, 17
21, 29-30; Brief for Columbia Pictures Industries, Inc., et
al., as Amicus Curiae 11, 13, 15. That was also the
central argument of Judge Friendly in his opinion for the Second
Circuit Court of Appeals, see Rohauer v. Killiam Shows,
Inc., 551 F.2d 484, 487-488, 489-490, 493-494 (CA2), cert.
denied, 431 U.S. 949 (1977), and Judge Thompson dissenting
from the panel decision below, see Abend v. MCA, Inc., 863
F.2d 1465, 1484 1487 (CA9 1988). Indeed, Judge Friendly only
addressed the equities with great reservation, 551 F.2d at 493,
after "a close reading of the language of what is now § 7." Id. at 489.

															[ Footnote 2/4 ]

															The drafters of the 1909 Act were well aware of the difficulty
of contacting distant authors who no longer wished to enforce their
copyright rights. In § 24 of the Act, for example, Congress
provided that a proprietor could secure and renew copyright on a
composite work when the individual contributions were not
separately registered. The provision was apparently addressed to
the difficulties such proprietors had previously faced in locating
and obtaining the consent of authors at the time of renewal. See H.R.Rep. No. 2222, 60th Cong., 2d Sess., 15 (1909); 1
Legislative History of the 1909 Copyright Act C 56 (E. Brylawski
& A. Goldman eds. 1976) (statement of Elder) (hereinafter
Brylawski & Goldman); id. at K 18-19 (statement of Mr.
Putnam); id. at K77 (statement of Mr. Hale). See
also Elder, Duration of Copyright, 14 Yale L.J. 417, 418
(1905). The effect of the § 7 consent requirement under the Court's
reading should not only be to forbid the author of the derivative
work "to employ a copyrighted work without the author's
permission," ante at 495 U. S. 232 ,
but also to penalize him by depriving him both of the right to use
his own new material and, in theory, of the right to protect that
new material against use by the public. It is most unlikely that a
Congress, which intended to promote the creation of literary works,
would have conditioned the protection of new material in an
otherwise original work on "consent" of an original author who did
not express the desire to protect his own work.

															The Court of Appeals thought that the failure of Congress to
grant an "exemption" to derivative works similar to that it granted
composite works demonstrated its intention that derivative works
lapse upon termination of the underlying author's copyright
interest. 863 F.2d 1465, 1476 (CA9 1988). Section 24, however, does
not exempt composite works from the renewal provision, but merely
provides for their renewal by the proprietor alone when the
individual contributions are not separately copyrighted. See 2 Nimmer § 9.03[B], p. 9-36. Moreover, the "author,"
entitled to renewal under § 24, refers back to the author of the
original work and the derivative work. Congress did not need to
make special provision for the derivative work in § 24, because it
already did so in § 7, making it a new work "subject to copyright
under the provisions of this title." 17 U.S.C. § 7 (1976 ed.).

															[ Footnote 2/5 ]

															It is instructive to compare the language of § 7 of the 1909 Act
to that used by Congress in 1976 to indicate that copyright in a
derivative work under the new Act attached only to the new
material:

															"The copyright in a compilation or derivative work extends only
to the material contributed by the author of such work, as
distinguished from the preexisting material employed in the work,
and does not imply any exclusive right in the preexisting material.
The copyright in such work is independent of, and does not affect
or enlarge the scope, duration, ownership, or subsistence of, any
copyright protection in the preexisting material."

															17 U.S.C. § 103(b) (1976 ed.),

															[ Footnote 2/6 ]

															I thus agree with the Court that publication of a derivative
work cannot extend the scope or duration of the copyright in the
original work, ante at 495 U. S.
234 -235, and that the underlying work's copyright term
exists independently of the derivative work's term. Ante at 495 U. S.
231 -232, 495 U. S. 235 .
As much is clear from the language of § 7, which extends the
copyright to the entire work but then limits the effect of that
copyright. I further agree that the original author's right to
"consent" to the copyright of a derivative work terminates when the
statutory term of the copyright in the underlying work expires. Ante at 495 U. S. 235 .
As I explain infra at 495 U. S.
250 -251, that result follows from the language of § 24.
I do not agree, however, that the statutory right to distribute and
publicly perform a derivative work that has been copyrighted with
the original author's consent during the original term of the
underlying work is limited by the validity and scope of the
original copyright. Ante at 495 U. S. 235 .
Section 7, in conjunction with § 24, gives the derivative author
two full terms of copyright in the entire derivative work both when
the original work is used with the consent of the original author
and when the original work is in the public domain. My conclusion
thus rests upon the language of the statute. The Court's contrary
assertion, that, if the right to publish the derivative work
extended beyond the original term of the underlying work, it would
"nulli[fy] the force' of the copyright in the `matter
employed,'" ante at 495 U. S. 236 ,
simply begs the question of the extent of the original author's
statutory rights. Even after the derivative work has been
copyrighted, the original author retains all of his statutory
rights, including the right to consent to the creation of
additional derivative works during both the original and renewal
terms. Moreover, even if the derivative work did derogate from the
force of the original work, the provision to which the Court
apparently refers states only that " publication " of a
derivative work -- and not consent to its creation -- shall not
affect the force of the copyright in the matter employed. The Court
can avoid making § 7 complete surplus (and allow it to limit the
rights of both the original and the derivative author) only by
distorting the plain language of that provision. [ Footnote 2/7 ] See, e.g., Gray v. Russell, 10 F. Cas. 1035, 1037-1038
(No. 5,728) (CC Mass.1839); Emerson v. Davies, 8 F. Cas.
615, 618-619 (No. 4,436) (CC Mass.1845); Shook v. Rankin, 21 F. Cas. 1335, 1336 (No. 12,804) (CC N.D.111.1875). The Court's
difficulty in explaining away the language of § 7 is not
surprising. The authority upon whom it almost exclusively relies, see ante at 495 U. S. 223 ,
had the same difficulty, stating at one point that "[t]he statutory
text was somewhat ambiguous," 1 Nimmer, at 3-22.2, and admitting at
another that, under his reading of the Copyright Act, the provision
was largely irrelevant. See id. at 3-29, n. 17 ("it is
consent referred to in Sec. 7, but which would have efficacy as a
matter of contract law even without Sec. 7"). At least in the
Copyright Act of 1909, however, Congress knew exactly what it was
doing.

															[ Footnote 2/8 ]

															The Act of 1790, passed by the First Congress, provided "the
sole right and liberty of printing, reprinting, publishing and
vending" the copyrighted work. Act of 1790, § 1, 1 Stat. 124. Its
successor, the Act of 1831, repeated the language that the author
of a copyrighted work "shall have the sole right and liberty of
printing, reprinting, publishing, and vending" the work. Act of
1831, ch. 16, § 1, 4 Stat. 436. Benjamin Kaplan has written that
the Act of 1870 constituted an "enlargement of the monopoly to
cover the conversion of a work from one to another artistic
medium." B. Kaplan, An Unhurried View of Copyright 32 (1967)
(hereinafter Kaplan).

															[ Footnote 2/9 ]

															"By the publication of Mrs. Stowe's book, the creations of the
genius and imagination of the author have become as much public
property as those of Homer or Cervantes. . . . All her conceptions
and inventions may be used and abused by imitators, play-rights and
poetasters. [They are no longer her own -- those who have purchased
her book may clothe them in English doggerel, in German or Chinese
prose. Her absolute dominion and property in the creations of her
genius and imagination have been voluntarily relinquished.] All
that now remains is the copyright of her book; the exclusive right
to print, reprint and vend it, and those only can be called
infringers of her rights, or pirates of her property who are guilty
of printing, publishing, importing or vending without her license,
'copies of her book.'" Stowe v. Thomas, 23 F.Cas., at 208 (footnote omitted).
It appears that, at least as late as 1902, English copyright law
also did not recognize that a dramatization could infringe an
author's rights in a book. See E. MacGillivray, A Treatise
Upon The Law of Copyright 114 (1902); see also Reade v.
Conquist, 9 C.B.N.S. 755, 142 Eng.Rep. 297 (C.P.1861); Coleman v. Wathen, 5 T.R. 245, 101 Eng.Rep. 137
(K.B.1793). Even after the passage of the Act of 1870, one American
commentator flatly declared,

															"Even if the public recitation of a book, in which copyright
exists, is not made from memory, but takes the form of a public
reading, from the work itself, of the whole or portions of it, this
would not amount to an infringement of the author's copyright."

															2 J. Morgan, Law of Literature 700-701 (1875).

															[ Footnote 2/10 ]

															"The American cases reflect no recognition that unauthorized
dramatization could infringe rights in a nondramatic work until the
1870 copyright revision provided authors with the same option to
reserve dramatization rights that they were afforded with respect
to translation. By then, dramatizations -- like other derivative
works -- already had enjoyed almost a century of substantial
independence. During this period, courts construing federal
copyright statutes were willing to extend protection to them, but
were reluctant to interfere with their unauthorized
production."

															Jaszi 783. See also Goldstein, Derivative Rights and
Derivative Works in Copyright, 30 J. Copyright Society 209, 211-215
(1983).

															[ Footnote 2/11 ]

															The history of the Copyright Act of 1909 is recounted in Justice
Frankfurter's opinion for the Court in Fred Fisher Music Co. v.
Witmark & Sons, 318 U. S. 643 , 318 U. S. 652 (1943).

															[ Footnote 2/12 ]

															The first draft of the copyright bill considered in 1905
provided that, if the author or his assigns did not make or
authorize to be made a dramatization within 10 years of the date of
registration, the work could be used for dramatization by other
authors. Brylawski & Goldman D-LXV. A similar provision
appeared in the third draft of the bill considered by the
Conference the following year, id. at E-XL, and in the
bill submitted by the Register of Copyright to Congress. Id. at B-37-38. The provision was eventually dropped
during hearings in Congress, and was never adopted into law.

															[ Footnote 2/13 ]

															The first draft provided identical terms for both original works
of authorship and derivative works, Brylawski & Goldman
D-XXXVII-XXXVIII. Successive drafts gave the copyright in the
original work to the author for his life plus 50 years, but limited
the copyright in a derivative work to 50 years. Id. at
E-LIII-LlV; id. at 34-35. The single term was rejected at
a late date by Congress, and the final Act eventually provided the
same two-term copyright for original and derivative works. See
generally B. Ringer, Renewal of Copyright (1960), reprinted as Copyright Law Revision Study No. 31, prepared
for the Senate Committee on the Judiciary, 86th Cong., 2d Sess.,
115-121 (1961).

															[ Footnote 2/14 ]

															The amendment apparently emerged from dialogue between Mr. W.B.
Hale, representative of the American Law Book Company, and Senator
Smoot:

															"Mr. Hale: There is another verbal criticism I should like to
make in section 6 of the Kittredge bill, which also relates to
compilations, abridgments, etc."

															"The Chairman [Senator Smoot]: I think it is the same in the
other bills."

															"Mr. Hale: Yes; it is the same in all the bills. I heartily
agree with and am in favor of that section; but in line 12, in lieu
of the words 'but no such copyright shall effect the force or
validity,' etc., I would prefer to substitute these words 'and the
publication of any such new work shall not affect the copyright,'
etc. . . . Under the act, as it stands now, it says the copyright
shall not affect it. I would like to meet the case of a new
compiled work, within the meaning of this clause, that is not
copyrighted, or where, by reason of some accident, the copyright
fails. That should not affect the original copyrights in the works
that have entered into and formed a part of this new compiled work.
It does not change the intent of this section in any way."

															Brylawski & Goldman K78.

															[ Footnote 2/15 ]

															In Ricordi, the author of the derivative work not only
produced a new derivative work but also breached his covenant not
to distribute the work after the first term of the underlying
copyright. As JUSTICE WHITE has explained,

															" Ricordi merely held that the licensee of a copyright
holder may not prepare a new derivative work based upon the
copyrighted work after termination of the grant." Mills Music, Inc. v. Snyder, 469 U.
S. 153 , 469 U. S. 183 ,
n. 7 (1985) (dissenting opinion).

															[ Footnote 2/16 ]

															The result follows as well from the "force and validity" clause
of § 7.

															[ Footnote 2/17 ]

															Congress was primarily concerned with the ability of the author
to exploit his own work of authorship:

															"Your committee, after full consideration, decided that it was
distinctly to the advantage of the author to preserve the renewal
period. It not infrequently happens that the author sells his
copyright outright to a publisher for a comparatively small sum. If
the work proves to be a great success and lives beyond the term of
twenty-eight years, your committee felt that it should be the
exclusive right of the author to take the renewal term, and the law
should be framed as is the existing law, so that he could not be
deprived of that right."

															H.R.Rep. No. 2222, 60th Cong., 2d. Sess., at 14.

															[ Footnote 2/18 ]

															The creation of a derivative work often is in the best interests
of both the original author and his statutory successors. As one
commentator has noted:

															"The movie Rear Window became a selling point for anthologies
containing the Woolrich story. The musical play Cats no doubt sent
many people who dimly remembered the Love Song of J. Alfred
Prufrock as the chief, if not the only, oeuvre of T.S. Eliot to the
bookstore for Old Possum's Book of Practical Cats."

															Weinreb, Fair's Fair: A Comment on the Fair Use Doctrine, 103
Harv.L.Rev. 1137, 1147 (1990).

															[ Footnote 2/19 ] See 17 U.S.C. § 24 (1976 ed.) ("in the case of . . .
any work copyrighted by . . . an employer for whom such work is
made for hire, the proprietor of such copyright shall be entitled
to a renewal and extension of the copyright in such work for the
further term of twenty-eight years"). See also Ellingson,
Copyright Exception for Derivative Works and the Scope of
Utilization, 56 Ind.L.J. 1, 11 (1980-1981).

															[ Footnote 2/20 ] See Shapiro, Bernstein & Co. v. Jerry Vogel Music
Co., 161 F.2d 406 (CA2 1946); Edward B. Marks Music Corp.
v. Jerry Vogel Music Co., 140 F.2d 266 (CA2 1944). In the
"12th Street Rag" case, Shapiro, Bernstein & Co. v. Jerry
Vogel Music Co., 221 F.2d 569 (CA2 1955), the Court of Appeals
held that a work of music, intended originally to stand on its own
as an instrumental, could become a joint work when it was later
sold to a publisher who commissioned lyrics to be performed for it.
The decision, which would give the creator of the derivative work
and the underlying author a joint interest in the derivative work,
accomplishes the same result that I believe § 7 does expressly.

															[ Footnote 2/21 ]

															"The effect of the Fred Fisher [ 318 U.S.
643 (1943)] case and other authorities is that, if the author
is dead when the twenty-eighth year comes round, the renewal
reverts, free and clear, to his widow, children, and so forth in a
fixed order of precedency; but if the author is alive in that year,
the original sale holds, and there is no reversion. The distinction
is hard to defend, and may operate in a peculiarly perverse way
where, on the faith of a transfer from the now-deceased author, the
transferee has created a 'derivative work,' say a movie based on
the original novel."

															Kaplan 112.

															[ Footnote 2/22 ]

															"To such extent as it may be permissible to consider policy
considerations, the equities lie preponderantly in favor of the
proprietor of the derivative copyright. In contrast to the
situation where an assignee or licensee has done nothing more than
print, publicize and distribute a copyrighted story or novel, a
person who, with the consent of the author, has created an opera or
a motion picture film will often have made contributions literary,
musical and economic, as great as or greater than the original
author. As pointed out in the Bricker article [Bricker, Renewal and
Extension of Copyright, 29 S.Cal.L.Rev. 23, 33 (1955)], the
purchaser of derivative rights has no truly effective way to
protect himself against the eventuality of the author's death
before the renewal period, since there is no way of telling who
will be the surviving widow, children or next of kin or the
executor until that date arrives. To be sure, this problem exists
in equal degree with respect to assignments or licenses of
underlying copyright, but, in such cases, there is not the
countervailing consideration that large and independently
copyrightable contributions will have been made by the
transferee." Rohauer v. Killiam Shows, Inc., 551 F.2d 484, 493
(CA2), cert. denied, 431 U.S. 949 (1977).

Summary:
Here is a summary of the case:

In Stewart v. Abend, the U.S. Supreme Court ruled on a copyright dispute regarding the renewal term of a pre-existing work incorporated into a derivative work. The Court held that the distribution and publication of a derivative work during the renewal term of a pre-existing work infringe on the rights of the owner of the pre-existing work if the author agreed to assign renewal rights but died before the commencement of the renewal period, and the statutory successor does not assign the right to use the pre-existing work to the derivative work's owner.

In this case, author Cornell Woolrich agreed to assign motion picture rights to a story and to renew the copyright during the renewal term. However, he died before the renewal period, and his executor renewed the copyright and assigned it to respondent Abend. Petitioners, who owned the derivative work (a film based on Woolrich's story), rereleased the film, believing they had the right to do so. The Court ruled in favor of Abend, finding that Woolrich's agreement to assign renewal rights did not override the statutory successor's rights and that the petitioners' use of the story infringed on Abend's copyright.

This case highlights the complexities of copyright renewal and the importance of considering the rights of both the original author and the creator of a derivative work.