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What’s on first – fair use, plausible pleading ownership of valid copyright or neither?

Abbott and Costello were a popular mid‐Twentieth Century comedy duo. One of their routines, commonly referred to as “Who’s on First?”, has become a treasured piece of American entertainment history.

Abbott and Costello first performed “Who’s on First?” in the late 1930s, notably on a 1938 live radio broadcast of The Kate Smith Hour. The Routine was published for purposes of federal copyright law when Abbott and Costello performed a version of it in their first motion picture, “One Night in the Tropics”. The team appeared in Tropics pursuant to a July 24, 1940 contract with Universal Pictures Company, Inc. The agreement guaranteed Abbott and Costello a minimum of five weeks’ work at a pay rate of $3,500 per week. In turn, Abbott and Costello agreed to grant UPC certain rights and to furnish it with certain items.

On November 6, 1940, only days before Tropics’s public release, Abbott and Costello entered into a new multi‐year/multi‐picture agreement with UPC. That contract terminated the July Agreement without prejudice to, among other things, UPC’s “ownership . . . of all rights heretofore acquired,” including those “in or to any . . . material furnished or supplied by the Artists.”

In the November Agreement, Abbott and Costello agreed “to furnish and make available to the Producer all literary and dramatic material and routines heretofore used by the Artists either on the radio or otherwise and now owned by the Artists,” and acknowledged that “the Producer shall have the right to use said material and routines to such extent as the Producer may desire in connection with any photoplay in which the Artists render their services hereunder and in connection with the advertising and exploitation of such photoplay.”

Abbott and Costello agreed that they would “not use or license, authorize or permit the use of any of the material and/or routines” so referenced “in connection with motion pictures” by others than UPC for specified times. Nevertheless, they reserved the right to use materials and routines created by them (without the assistance of UPC writers) “on the radio and in personal appearances.”

After the death of Abbott and Costello their heirs formed partnership Abbott and Costello Enterprises, this in its turn concluded with Universal Pictures quitclaim agreement dated March 12, 1984. Universal stated that it did so relying upon A & C’s representation that it was “a partnership composed of the successors in interest to the late Bud Abbott and Lou Costello” and, therefore, “the owner of copyright in and to the Routine.” A & C dissolved in 1992, with 50% of its assets transferred to TCA Television Corporation, a California entity owned by Lou Costello’s heirs, and the other 50% divided evenly between Bud Abbott’s heirs, Vickie Abbott Wheeler and Bud Abbott, Jr. Wheeler would later transfer her 25% interest to a California partnership, Hi Neighbor, and Abbott, Jr. would transfer his 25% interest to Diana Abbott Colton.

The heirs through press coverage learned that the play “Hand to God” incorporated part of the Who’s on first routine in one of its “key scenes, without license or permission”. They have sent cease and desist letter, but did not receive required result. Failure to comply with that request prompted lawsuit. In lawsuit plaintiffs alleged that the play infringed their copyright in routine by using its first part.

The court concluded that defendants’ entitlement to a fair use defence was not so clearly established on the face of the amended complaint. The challenged use of piece of routine does not appear to fit within any of statutory categories for fair use. Nevertheless, the district court concluded that defendants’ use was “transformative,” indeed, so “highly transformative” as to be “determinative” of fair use.

The district court explained that by having a single character perform the Routine, the Play’s authors were able to contrast “Jason’s seemingly soft-spoken personality and the actual outrageousness of his inner nature, which he expresses through the sock puppet.” This contrast was “a darkly comedic critique of the social norms governing a small town in the Bible Belt.” This reasoning is flawed in that what it identifies are the general artistic and critical purpose and character of the Play. The district court did not explain how defendants’ extensive copying of a famous comedy routine was necessary to this purpose, much less how the character of the Routine was transformed by defendants’ use.

In sum, even if, as the district court concluded, Hand to God is a “darkly comedic critique of the social norms governing a small town in the Bible Belt,” and even if the Play’s purpose and character are completely different from the vaudevillian humor originally animating “Who’s on First?”, that, by itself, does not demonstrate that defendants’ use of the Routine in the Play was transformative of the original work.

The Play may convey a dark critique of society, but it does not transform Abbott and Costello’s Routine so that it conveys that message. To the contrary, it appears that the Play specifically has its characters perform “Who’s on First?” without alteration so that the audience will readily recognize both the famous Routine and the boy’s false claim to having created it. Indeed, it is only after “Who’s on First?” is performed – at some length, almost verbatim, and with the Play’s characters mimicking the original timing, tone, and delivery of Abbott and Costello – that the boy’s lie about creating the classic Routine – no part of the Routine – becomes the triggering event for the puppet to assume an independent persona.

Moreover, the Play appropriates the Routine’s humor not incidentally, but extensively by having the characters perform some dozen of the original exchanges on the comic ambiguity of the words “who’s on first.” No new dramatic purpose was served by so much copying. The only purpose served by the extent of defendants’ taking is identically comedic to that of the original authors, that is, to have two performers expand on a singular joke in order to generate increasing audience laughter. As the court has recognized, there is “nothing transformative” about using an original work “in the manner it was made to be” used. Defendants’ use of the Routine, not briefly as the basis for a dramatic lie, but extensively for its original comedic effect, cannot be deemed transformative.

There is no question here that defendants’ use of “Who’s on First?” in Hand to God was for a commercial purpose. Plaintiffs also alleged that defendants not only used an unaltered and appreciable excerpt of the Routine in a commercial play but also featured the Routine in the Play’s advertising, conduct which reasonably qualifies as commercial exploitation weighing strongly against fair use. To the extent defendants excessively copied from the Routine even within the Play, their advertising focus on the Routine’s comic exchanges raises particular commercial exploitation concerns.

Thus, defendants’ commercial use of the Routine was not transformative. Rather, it duplicated to a significant degree the comedic purpose of the original work. As such, the first statutory factor, far from weighing in defendants’ favor, weighs in favor of plaintiffs.

The second statutory factor, “the nature of the copyrighted work,” also weighs in plaintiffs’ favor. Defendants argue that their use was justified by the dramatic need to use an instantly recognizable “cultural” touchstone in the relevant scene. But even assuming defendants’ professed dramatic need, they do not explain why the cultural touchstone had to be the Routine – or even a comedy sketch – as opposed to some other readily recognizable exchange, including those already in the public domain. The purpose of such extensive use was to provoke audience laughter in exactly the same way as the Routine’s creators had done.

In sum, because defendants’ use of the Routine cannot be deemed transformative, and because the record is devoid of any persuasive justification for the extent of defendants’ use, the creative nature of the Routine weighs strongly against a fair use defense.

While the portion of the Routine copied by defendants takes less than two minutes to perform, it plainly reveals the singular joke underlying the entire Routine: that words understood by one person as a question can be understood by another as an answer. Moreover, defendants repeatedly exploit that joke through a dozen variations. This manifests substantial copying.

The district court weighed this factor in defendants’ favor, concluding that the Play’s use of the Routine could not reasonably be expected to usurp the market for Abbott and Costello’s original performance. In so doing, however, the district court disregarded the possibility of defendants’ use adversely affecting the licensing market for the Routine. All four statutory factors weigh in favor of plaintiffs and against a defense of fair use.

Defendants asserted that Abbott and Costello’s “Who’s on First?” Routine fell into the public domain in 1968, when the initial copyright term for Tropics expired. Defendants concede that UPC’s registration for that movie protected the Routine – first published therein – from entering the public domain through the term of that copyright, but they asserted that only Abbott and Costello, as the Routine’s authors, could renew the copyright in that work – as distinct from Tropics – which the team failed to do.

As the highlighted language in each agreement makes plain, Abbott and Costello furnished UPC with their routines for a limited purpose: use in any movies in which the team appeared under the respective agreements. This is unmistakably the language of an exclusive, limited‐use license, not the assignment of copyright. Other language in the November Agreement further confirms that Abbott and Costello granted UPC only a license to use their routines. Thus, the language of the July and November Agreements, by itself, clearly belies plaintiffs’ claim that Abbott and Costello therein conveyed their common law copyright in the Routine to UPC.

The Routine was first performed in March 1938, more than two years before Abbott and Costello entered into the July and November Agreements with UPC. Insofar as Abbott and Costello had already performed “Who’s on First?” in 1938, they plainly did not create the Routine at UPC’s “instance and expense” in 1940, as would be required for it to be a work‐for‐hire.

Finally, plaintiffs argued that even if their copyright ownership claim cannot rest on either an assignment or work‐for‐hire theory, it is plausible because “so much of the Routine as was used in the Movies ‘merged’ with the Movies to become a ‘unitary whole.’” Thus, the Routine was not separately registerable; rather it was protected by UPC’s statutory registration and its renewal of the copyrights for movies using the Routine.

This argument also failed because “authors of freestanding works that are incorporated into a film . . . may copyright these ‘separate and independent works.’” “Who’s on First?” was such a freestanding work within Tropics. Plaintiffs acknowledged in the amended complaint that the Routine (1) was prepared and existed on its own for some years before it was performed in Tropics; and (2) was performed independently from the films “thousands of times” on the radio and elsewhere.

“Who’s on First?” is a freestanding comedy routine performed by Abbott and Costello not only years before the first frame of Tropics was ever filmed but also for many years thereafter. Routine did not merge into UPC’s films so as to avoid the need for its creators to renew the copyright.

Plaintiffs failed plausibly to allege that (1) Abbott and Costello assigned their common law copyright in “Who’s on First?” to UPC; (2) the Routine, as appropriated by defendants in Hand to God, was first created for UPC as a work‐for‐hire; or (3) the Routine so merged with the UPC movies in which it was performed as to become a unitary whole, the court concluded that plaintiffs did not plead their possession of a valid copyright in the Routine, as required to pursue their infringement claim.

Even though the district court erred in dismissing plaintiffs’ amended complaint based on defendants’ fair use of the appropriated material, the appellate court affirmed dismissal based on plaintiffs’ failure plausibly to allege a valid copyright. Dismissal is warranted by plaintiffs’ failure plausibly to plead ownership of a valid copyright. Their efforts to do so on theories of assignment, work‐for‐hire, and merger all fail as a matter of law.