‘Rear Window’ Goes to Supreme Court : At Stake Is How Ownership of Original Copyrighted Material Affects Revenue From Films

The Supreme Court, agreeing to hear an appeal from actor Jimmy Stewart, announced Monday it would settle a major copyright dispute that may threaten hundreds of classic motion pictures.

Stewart and the daughter of the late director Alfred Hitchcock are asking the justices to overturn an appellate court ruling that said they must share the profits from the re-release of the 1954 movie “Rear Window” with a New York literary researcher who owns the copyright for the story that the film was based on.

The ruling, from the U.S. 9th Circuit Court of Appeals in Pasadena, stunned movie industry lawyers.

“This decision turns the practices of the studios upside down,” said Stephen Kroft, a Beverly Hills lawyer who, on behalf of the major Hollywood studios, urged the high court to intervene.

Unless this ruling is reversed, Kroft told the court, “hundreds, if not thousands” of movies may face copyright infringement suits from the owners of old copyrights of stories, songs, paintings or literary characters, which were incorporated into the films.

This problem is not likely to arise for recent movies, which, under the Copyright Act of 1976, have one copyright period extending for 75 years.

The film industry had also thought the issue was settled for older movies. The U.S. 2nd Circuit Court of Appeals in New York ruled in 1977 that a movie or play was a “derivative work” with a copyright of its own incorporating all the works that went into it. Under the Copyright Act of 1909, material could be copyrighted for 28 years and renewed for another 28. Under the New York rule, once artists, authors or composers sell their work to movie makers, neither they nor their heirs can benefit further from the completed movie.

But in December, the appeals court in California took a sharply different view. In an opinion by Judge Harry Pregerson of Los Angeles, the court said the author of a work incorporated into a movie held a separate and distinct copyright. After the initial copyright period expired in 28 years, the copyright reverted to the author or the author’s heirs, Pregerson said. With the advent of home video recorders, classic movies can remain money-making properties long after the initial 28-year copyright has expired, creating an obvious potential for conflict between the rules set by New York and California courts.

The Supreme Court typically intervenes when the regional federal appeals courts are in conflict on the meaning of a federal law.

The idea for “Rear Window” dated back to 1942 when author Cornell Woolrich published a story in Dime Detective magazine called “It Had to Be Murder.” Three years later, Woolrich sold the rights to the story to a film production company for $9,250. In 1954, Stewart and Hitchcock formed their own company, bought the rights to the Woolrich story and made it into the movie, starring Stewart and Grace Kelly.

That might have been the end of the matter, except for one other development. In 1968, just before Woolrich was scheduled to sign over the copyright for another 28 years, he died leaving no heirs. His estate, intended for the benefit of Columbia University, later sold his copyright to Sheldon Abend, a self-described “literary researcher,” for $650.

In the early 1980s, Stewart and Hitchcock’s heirs authorized the re-release of “Rear Window” for theaters, television and video sales. It earned an additional $12 million in revenue.

Abend then filed a copyright infringement suit in federal court in Los Angeles, seeking a share of the $12 million. A trial judge, citing the New York rule, dismissed the suit. However, on a 2-1 vote, the 9th Circuit Court said Abend’s copyright had been infringed and returned the case to a trial court to calculate the damages.

Los Angeles attorney Louis Petrich, who appealed to the high court on Stewart’s behalf, said he was not surprised the justices agreed to hear the case.

“This is a problem that won’t go away, and there’s a clear conflict between 2nd Circuit and the 9th Circuit,” Petrich said, referring to the two federal appeals courts that govern most of the nation’s copyright actions.

James P. Tierney, a Santa Monica attorney representing Abend, said the 9th Circuit Court ruling was correct and should be upheld. “It was just a restatement of existing law,” he said.

According to Tierney, Abend has purchased at least 100 other old copyrights, but he also believes the studios have exaggerated the extent of the problem they face.

“All they need to do is sit down with the heirs or whoever holds the copyright and say, ‘Let’s make a deal,’ ” he said.

The high court will likely hear arguments in the case early next year, with a ruling due by July 1.