U.S.D.C., E.D.Mich.

“ The video rights given to [VCX] by [M & A] are exclusive for world wide distribution.
[M & A] indemnifies [VCX] for any claims by others that [VCX] through this Agreement does not have the sole video rights to said motion picture, and agrees to pay the costs of any litigtion, including attorney’s fees, that arise from claims by others of ownership of this motion picture or ownership of the video rights of “Debbie Does Dallas.”
13. The contract assigned only the video cassette rights in the film; M & A retained all theatrical rights in the film. ”

“ In short, an employer owns the copyright to a work if (1) the work satisfies the requirements for copyrightability in 17 U.S.C. § 102 (a) ; (2) the work was prepared by an employee; (3) the work was prepared within the scope of the employee’s employment; and (4) the parties have not agreed otherwise in a signed, written instrument. Baltimore Orioles v. Major League Baseball Players, 805 F.2d 663, 667 (7th Cir. 1986) .
6. At issue in this case is the second factor, namely, whether an employer–employee relationship existed between Schoolday and Buckley. ”

“ In order for there to be proper copyright notice, notice had to be added to both the video cassettes and the movie version shown in theatres.
25. In January of 1981, Berger informed Weisberg of the need to add copyright notice to the prints of the picture that had been sent to various theatres. Berger testified that copyright notice was needed to cure the fact that prints had been widely distributed without proper notice prior to that time.
26. The addition of a copyright notice to the prints of a picture is common in the movie industry and simple to accomplish. ”

“ Arno testified, however, that he received a print of the film from Weisberg approximately one month after they entered into the contract. According to Arno, he asked Weisberg for “copyright protection” immediately after he received the print.
20. In April of 1979, Arno became aware of unauthorized copying of the film.
21. Arno, through VCX, retained attorneys John Lappen and Peter Berger for the purpose of bringing civil actions against “dupers” of his video cassettes. “Dupers” are individuals who, without authority from an owner, make duplicate copies of video cassettes. ”

“ VCX lost sales as a result of its inability to enforce its “exclusive” rights to sell video cassette copies of the film.
37. VCX neverthelees continues to the present time producing and selling copies of the film. ”

“ An “employee,” for purposes of the work made for hire doctrine, is any person who acts under an employer’s direction and supervision. See, e.g., Evans Newton, Inc. v. Chicago Systems Software, 793 F.2d 889, 894 (7th Cir.) ”

“ As a result, Buckley owned all rights to the film upon its creation and could transfer those rights to M & A. [1]
8. The next issue involves the determination of what law governs the non-copyright questions in this case. Federal courts in diversity of citizenship cases must apply the choice of law rules for the state in which they sit. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) . In Michigan, the nature and effect of a contract it determined according to the law of the state where the contract was made. ”