III. Copyright Infringement

It is well established that architectural plans and drawings are entitled to copyright protection under the Federal Copyright Act. 17 U.S.C. § 101 et seq. Section § 101 specifically defines an "architectural work" as "the design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings." Under the Copyright Act, the copyright owner has several exclusive rights, including the  [*12] rights to reproduce, prepare derivative works based upon, and distribute copies of the copyrighted work. 17 U.S.C. § 106. Due to the significance of a copyright, the essential question is who owns the copyright. The parties have raised issues about who owned the architectural plans' copyright at what time. Defendants argue that Seidner initially and solely owned the architectural plans as the copyright author (Dkt. 78; 1:23-25). Furthermore, Defendants argue that he authorized them to copy, display, and use the plans when he owned them (Id.). Plaintiff responds that Seidner did not own the architectural plans in the first place so he could not have intended to grant a license (Dkt. 87, 6:15-17). While Plaintiff questions the relevance of the definitions of "author" and "copyright ownership" (PSOF P 9), the Court finds these terms are at issue. As such, the Court will first address the issue of who was the author and initial owner of the copyright for the architectural plans.

A. Copyright Ownership

Generally, copyright protection vests initially in the "author" of the architectural plans or designs, unless there is a written agreement to the contrary or the work is a "work for hire." 17 U.S.C. § 201(a);  [*13] see S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th Cir. 1989). Many interested parties, such as the client, the developer, the engineer, and the ultimate inhabitants of a project, may have a voice in the design process. Raphael Winick, Copyright Protection for Architecture After the Architectural Works Copyright Protection Act of 1990, 41 Duke L.J. 1598, 1640 (1992). Although all of these parties may have played some part in the design, only in unusual circumstances will someone other than the architect be the author, the one to give spatial expression to the design ideas. Id. "As a general rule, the author is the party who actually creates the work, that is, the person who translates an idea into a fixed, tangible expression entitled to copyright protection." Community for Creative Non-Violence v. Reid, 490 U.S. 730, 737, 109 S. Ct. 2166, 104 L. Ed. 2d 811 (1989) (citing 17 U.S.C. § 102). By definition, the author is usually the architect.

The Copyright Act also recognizes "joint work," which is defined as "work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole." 17 U.S.C. § 101. However, the cases establish that normal  [*14] client participation does not transform a client into an author or joint author of an architectural work. Winick, supra, at 1644-45. "The owner's general assistance and contributions to the fund of knowledge of the author [do] not make [him] a creator of any original work, nor even the co-author." S.O.S., Inc., 886 F.2d at 1087 (internal quotation omitted). When an owner explains to an architect "the type and functions of a building the architect is to design for the owner[,] [t]he architectural drawings are not co-authored by the owner, no matter how detailed the ideas and limitations expressed by the owner." Id.

Here, Fairview alleges it provided a sketch of the custom home design to architect Seidner (PSOF P 87). Although Fairview may have played some part in the design, Fairview has not shown any unusual circumstances that would make it the author of the architectural plans. Indeed, Plaintiffs concede that Seidner "transformed the sketch into working construction documents that became the Plans" (Id.). In other words, Seidner was the author - the person who translated an idea into a fixed, tangible medium of expression entitled to copyright protection. See 17 U.S.C. § 102. In addition,  [*15] Fairview has shown no evidence that it and Seidner intended their contributions  [**1712]  be merged into inseparable parts of a unitary whole as joint authors. See 17 U.S.C. § 101. Furthermore, even if Petracca and Katzin supplied or described the idea, "[a] person who merely describes to an author what the commissioned work should do or look like is not a joint author for purposes of the Copyright Act." S.O.S., Inc., 886 F.2d at 1087. Moreover, when Fairview registered the copyright, it listed Seidner as the only author of the architectural plans (Dkt. 79, Ex. F, U.S. Copyright Office Certificate of Registration). See 17 U.S.C. § 410(c) (a certificate of registration is to "constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate"). Therefore, unless there was a written agreement to the contrary or the plans were a "work for hire," copyright protection only extended initially to Seidner as the author of the plans.

2. Works for Hire

If the architectural plans are considered a "work for hire," then copyright protection may not extend to the author of the architectural plans. When architectural plans are a "work for hire," the employer or other person for whom the work is prepared is considered the author and owner of the copyright, unless the parties have expressly agreed otherwise in a signed written agreement. 17 U.S.C. § 201(b). The applicable part of Section 101 defines a "work made for hire" as "a work prepared by an employee within the scope of his or her employment." 17 U.S.C. § 101. Generally, architects hired by clients for individual projects will usually not be considered to have produced "works for hire." Winick, supra, at 1642.

"To determine whether a work is for hire under the Act, a court first should ascertain, using principles of general common law of agency, whether the work was prepared by an employee or an independent contractor." Reid, 490 U.S. at 750-51. In determining whether a hired party is an employee, the court considers "the hiring  [*21] party's right to control the manner and means by which the product is accomplished." Id. at 751. The court can consider any of these nondeterminative factors: 1) the source of the instrumentalities and tools; 2) the location of the work, 3) the duration of the parties' relationship, 4) whether the hiring party has the right to assign additional projects to the hired party; 5) the extent of the hired party's discretion over when and how long to work; 6) the method of payment; 7) the hired party's role in hiring and paying assistants; 8) whether the work is part of the regular business of the hiring party; 9) whether the hiring party is in business; 10) the provision of employee benefits; and 11) the tax treatment of the hired party. Id. at 751-52.

As architect Mark Seidner was not an employee of Plaintiffs but an independent contractor, the architectural plans were not a work for hire. Although Fairview provided a sketch of the custom home design to Seidner, the extent of control Fairview exercised over the details of the architectural plans is not dispositive. See id., 490 U.S. at 752. Indeed, all the other circumstances weigh heavily against finding an employment relationship. See [*22] id. Seidner is an architect, a skilled occupation. Seidner supplied his own tools and worked in his own office attached to his home (Dkt. 79, Ex. E., Dep. of Mark Seidner 8:13-22). Fairview retained Seidner's services for less than a year, a relatively short period of time (Dkt. 79, Letters dated May 29, 2001 and June 18, 2001, Exs. to Ex. C, Dep. of Christa Petracca; Dkt. 88, Invoices dated July 23, 2001, October 4, 2001, and May 7, 2002, Exs. to Ex. 3, Dep. of Christa Petracca). During and after this time, Fairview had no right to assign additional projects to Seidner. Seidner had absolute freedom to decide when and how long to work. Fairview paid Seidner $ 25,000, a sum dependent on "completion of a specific job, a method by which independent contractors are often compensated." See Reid, 490 U.S. at 753 (quoting Holt v. Winpisinger, 258 U.S. App. D.C. 343, 811 F.2d 1532, 1540 (D.C. Cir. 1987)). Fairview does not create architectural plans as part of its regular business. Importantly, Fairview did not designate Seidner's contribution to the work as a "work made for hire" on the Certificate of Copyright Registration (Dkt. 79, Ex. F). See 17 U.S.C. § 410(c) (a certificate of registration is to "constitute  [*23] prima facie evidence of the validity of the copyright and of the facts stated in the certificate"). [**1714] 

As a matter of law, Seidner initially owned the copyright of the architectural plans as the author. Fairview has produced no evidence of an express agreement clearly setting forth that Seidner did not initially own the copyright. In addition, Fairview has not shown that Seidner created the architectural plans as a work for hire. Because architect Seidner is the author of the architectural plans, he was the original and sole owner of the copyright. Fairview has not demonstrated that it was otherwise initially entitled to the copyright.

§ 201. Ownership of copyright

(a) INITIAL OWNERSHIP.-Copyright in a work protected under this title vests initially in the author or authors of the work. The authors of a joint work are coowners of copyright in the work.

(b) WORKS MADE FOR HIRE.-In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.

[...]

The district court focused on what it termed the "heart of the dispute"--whether Mr. Shaver has a valid claim of copyright infringement. The court noted that a copyright owner may sell or license his ownership rights only in writing. However, a "nonexclusive license" in a copyrighted work may be given either "orally, or ... by law to effect the intent demonstrated by the parties' conduct." R. 78 at 8. It then determined that the facts in this case are very similar to those in Effects Associates, Inc. v. Cohen, 908 F.2d 555 (9th Cir.1990), cert. denied, 498 U.S. 1103, 111 S.Ct. 1003, 112 L.Ed.2d 1086 (1991). Just as the plaintiff in Effects "created a work at defendant's request and handed it over, intending that defendant copy and distribute it," in exchange for $56,000, id. at 558, Mr. Shaver created, for a fee of $10,000, designs for the Airport's air cargo building and handed them over to Joint Venture and the Airport. The court noted that Mr. Shaver contracted to prepare standard design documents that would describe the scope of the Project. In a later letter, Mr. Shaver acknowledged that he would no longer be contributing to the development of the building, but trusted that his ideas, as incorporated in his drawings, would help the Airport to realize its air cargo building. The district court concluded that, just as the Ninth Circuit had found in Effects that the plaintiff had conveyed an implied nonexclusive license to the defendant to use its work, id. at 559, Mr. Shaver's January 14, 1993 letter contract created an implied nonexclusive license allowing the Airport to use Mr. Shaver's drawings when constructing the air cargo building:

As a matter of law, only one conclusion can be drawn from these undisputed facts: Shaver granted the Airport a nonexclusive license to use his drawings as the basis for preparing working drawings and completing the project. Shaver's argument that the Airport can use the drawings only as pieces of paper (wallhangings? placemats?) is untenable.

The district court granted summary judgment on the ground that there was no copyright infringement.

Proof of copyright infringement requires two showings: first, that the claimant has a validly owned copyright, and second, that the "constituent elements of the work that are original" were copied. Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 1295-96, 113 L.Ed.2d 358 (1991). The first element is not in contention; there is no challenge to the validity of Mr. Shaver's copyrights. It is the second prong of infringement that is at issue; Mr. Shaver asserted that his work was copied. The district court determined, however, that the use of his works was permissible because Mr. Shaver had granted an implied nonexclusive license.

Mr. Shaver also asserts that, because only half of the contract sum was paid, the implied license "did not spring into existence." Appellant's Br. at 26. In Effects, the Ninth Circuit rejected a virtually identical argument that there could be no implied license until the full payment of the contract price was made. Effects, 908 F.2d at 559 n. 7. That court recognized that the appellant was treating the complete payment of the contractual consideration as a condition precedent to the use of the copyrighted material. After noting that "conditions precedent are disfavored and will not be read into a contract unless required by plain, unambiguous language," id., it found nothing in the agreement between the parties indicating such an agreement. Similarly, in the case before us, nothing in the contract or in Mr. Shaver's later letter indicates that full payment was a condition precedent to the use of his drawings. In fact, he first distributed his drawings before any payment was made, and next handed them over to the Airport, with no mention of payment, after half the dollar amount of the contract had been tendered. Clearly at that point a license to use the drawings had impliedly been granted. Mr. Shaver did not state that failure to pay would be viewed as copyright infringement until the March 10, 1993 letter from his attorney.

Conclusion

Mr. Shaver created an implied nonexclusive license to use his schematic design drawings in the Airport Project. Accordingly, there was no infringement of Mr. Shaver's copyrighted works. We conclude that, because there are no genuine issues of material fact before us, we must affirm the judgment of the district court.

Original architectural works are normally subject to copyright protection, and

Page 500

may, therefore, form the basis for a copyright infringement suit. 17 U.S.C. §§ 102(a)(5) and (8); Robert R. Jones Associates v. Nino Homes, 858 F.2d 274, 276 (6th Cir.1988). Moreover, "[w]hile the copyright owner can sell or license his rights to someone else, section 204 of the Copyright Act invalidates a purported transfer of ownership unless it is in writing." Effects Associates, Inc. v. Cohen, 908 F.2d 555 (9th Cir.1990), cert. denied 498 U.S. 1103, 111 S.Ct. 1003, 112 L.Ed.2d 1086 (1991). Tosch disputes neither the validity of the copyright nor the absence of a written instrument transferring ownership. In addition, Tosch admits that he copied Johnson's drawings. Despite this, Tosch argues that he cannot be liable for copyright infringement because Johnson granted him an implied non-exclusive license to use the drawings for the Jones house.
Courts have held that the existence of an implied license to use the copyright for a particular purpose precludes a finding of infringement. See, e.g., Effects, 908 F.2d at 559; I.A.E., Inc. v. Shaver, 74 F.3d 768 (7th Cir.1996). It is also well-settled that a non-exclusive license is not a transfer of ownership, and is not, therefore, subject to the writing requirement of § 204. Effects, 908 F.2d at 558; 17 U.S.C. § 101. Thus, "[a] non-exclusive license may be granted orally, or may be implied from conduct." M. Nimmer and D. Nimmer, 3 NIMMER ON COPYRIGHT § 10.03[A], at 10-38 (1994). See also, Silva v. MacLaine, 697 F.Supp. 1423, 1430 (E.D.Mich.1988). Tosch cites Effects and Shaver in support of his claim that he has been granted an implied license, but, unlike the facts in those cases, the facts in this case do not demonstrate that Johnson ever granted Tosch an implied license to use the drawings.

In Effects, defendant, a movie-maker, asked plaintiff, a special effects company, to create footage to enhance action sequences in a film defendant was making. Unhappy with the footage provided by plaintiff, defendant paid only half of the expected amount. Plaintiff repeatedly demanded the balance of the payment, but defendant refused. Subsequently, defendant incorporated plaintiff's footage into the film and released the film to another company for distribution. The Effects Court held that plaintiff had granted defendant an implied non-exclusive license to incorporate the footage into the film and then distribute the film. Effects, 908 F.2d at 558-59.

The circumstances in Effects differ materially from those in the present case. First, the defendant in that case produced a letter of agreement stating that the footage was intended for inclusion into the movie. Second, the plaintiff in Effects delivered the footage directly to the defendant, without ever mentioning the issue of ownership of the copyright. Indeed, the district court in that case stated that "every objective fact concerning the transaction at issue supports a finding that an implied license existed." Id.

By contrast, almost every objective fact in the present case points away from the existence of an implied license. Johnson submitted two AIA contracts, both of which contained express provisions that he would retain ownership of his drawings, and that those drawings would not be used for completion of the Jones house by others, except by written agreement with appropriate compensation. These contractual provisions, although never signed by Jones, speak to Johnson's intent; they demonstrate that Johnson created the drawings with the understanding that he would be the architect in charge of the project. They further demonstrate that Johnson would not have allowed Tosch to finish the project using his drawings without a written agreement, and additional compensation.

Tosch makes much of the fact that Johnson did not object to the ownership provision drafted by Stoepker in the revised edition of the third contract. Johnson testified that his failure to object in the first instance was a mistake and that he had intended to do so. Based on the content of the prior contracts submitted by Johnson, we have no trouble believing him. In any event, one isolated instance of inaction, coming as it did just before the breakdown of negotiations, is not enough to outweigh Johnson's repeated expressions of intent that he retain ownership of his drawings.

The plaintiff in Effects, on the other hand, had always intended that the footage would be incorporated into the movie, and distributed therewith. The dispute in that case arose not from the manner in which the copyrighted material was used, but from the amount paid for the material. Tosch argues that the same is true of the present case. We disagree. The current dispute concerns more than the lack of compensation paid to Johnson; it also involves the way in which Johnson's drawings were used. It is one thing for an architect to allow the owner to hire someone else to build a house from the architect's plans. It is quite another for the architect to allow a competitor to come in and claim the architect's work as his own. Put simply, Johnson's drawings were used in a way he never intended-i.e., a rival architect claimed them as his own work and completed the Jones house without Johnson's involvement.

Moreover, Johnson did not deliver his drawings and site plan to Tosch. Rather, Tosch obtained some of the drawings from Jones, and others from the city inspector. Having acquired the drawings from other sources, Tosch cannot argue that his acquisition created an implied license. Indeed, the evidence demonstrates that Johnson was not even aware that his plans were being used until January, 1994, when he stopped by the Jones house job site.

Thus, the facts in Shaver demonstrate three crucial elements missing from the present case: (1) a written contract precisely describing the work to be done and the price to be paid; (2) a clear expression of Shaver's intent that his schematics be used for the first phase of the project, and that his involvement in any later phases would need to be negotiated in separate contracts; and (3) payment (albeit less than was agreed upon) for the use of Shaver's schematics. While Shaver's contract was "clear, to-the-point, and unambiguous ... [in demonstrating] no expectation of a further role in the Project," Shaver, 74 F.3d at 771, there is no such valid contract in the present case. Indeed, Johnson submitted two contracts, each of which demonstrated his intent that his drawings not be used to finish the project without him. Although Shaver wrote a letter to the airport in which he acknowledged that his schematics would be used to finish the project, Johnson was not aware that his drawings were being used until several months after he was terminated from the project. Finally, Shaver was paid $5,000 (and, presumably, could have pursued a breach of contract claim for the remaining $5,000) for the schematics. Although the contract did not specifically cover the issue of copyright ownership, the contract was clear about the fact that Shaver was being paid for initial schematics only.

In short, neither Effects nor Shaver is factually similar to the case at hand. Most

importantly, the facts in those cases amply demonstrate that the copyright owners intended that their copyrighted works be used in the manner in which they were eventually used. There is no such demonstration of intent in this case. Without intent, there can be no implied license.

For these reasons, the district court was correct to find that there was no implied non-exclusive license.

The effective date provision of the Act further clarifies that an unconstructed architectural work is not to be denied protection. Specifically, Section 706 of the Act provides that architectural works that have not been constructed before the Act's effective date,² but which are embodied in drawings or plans as of the effective date, are protected under the Act against unauthorized copying that occurs on or after the effective date. See Architectural Works Copyright Protection Act of 1990, Pub.L. No. 101-650, § 706(2), 104 Stat. 5133, 5134 (1990); H.R.Rep. No. 101-735, at 23, reprinted in 1990 U.S.C.C.A.N. at 6954.³ A fortiori, unconstructed architectural works created after the Act's effective date are entitled to the same protection. The House Report, in its explanation of the effective date provisions, also makes clear that an unconstructed work, embodied only in plans or drawings, can be infringed

[179 F.3d 686]

by a structure that embodies the copied design. See H.R.Rep. No. 101-735, at 23 n. 53, reprinted in 1990 U.S.C.C.A.N. at 6954.

We have recognized, however, that § 204(a)'s writing requirement applies only to the transfer of exclusive rights; grants of nonexclusive copyright licenses need not be in writing.⁷ Effects Assocs.,

Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990). So we must consider whether Foad granted GenCom a nonexclusive license to copy and modify its revised plot plan and to publish the resulting work. A nonexclusive copyright license may be granted orally or by implication. Effects Associates, 908 F.2d at 558. Defendants argue that Foad granted GenCom an implied license to reproduce, adapt, and publish in the February 1996 contract between the parties. We agree that the contract grants GenCom an implied license to use the revised plot plan to complete development of the project, to hire another firm to create derivative works using the revised plot plan for the purpose of completing the project, and to publish the resulting work.

Foad asks us to consider certain extrinsic evidence in interpreting the contract.⁸ The contract was formed in California, concerns work that was done in California, and contains a choice-of-law clause that identifies California law as governing its interpretation. In contrast to many other states, California has a liberal parol evidence rule: It permits consideration of extrinsic evidence to explain the meaning of the terms of a contract even when the meaning appears unambiguous. Compare City of Manhattan Beach v. Superior Court, 914 P.2d 160, 169 (Cal. 1996) (" `[T]he test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible.' " (quoting Pacific Gas & Elec. Co. v. G.W. Thomas Drayage & Rigging Co., 442 P.2d 641, 644 (1968)) with, e.g., Namad v. Salomon Inc., 543 N.E.2d 722, 723 (N.Y. 1989) ("Parol evidence is inadmissible if a contract is clear on its face and sufficient alone to divine the intent of the parties."). Thus, if state law determines whether an implied, nonexclusive copyright license has been granted, we should consider whether Foad's extrinsic evidence discloses a latent ambiguity in the contract. If state law does not apply, then we will need to consider whether the extrinsic evidence is admissible under federal common law. Cf. Itar-Tass Russian News Agency v. Russian Kurier, Inc., 153 F.3d 82, 90 (2d Cir. 1998) (developing federal common law to decide a conflicts of law issue in a copyright case, where the Copyright Act does not contain a controlling provision). Accordingly, before we interpret the contract between Foad and GenCom, we consider whether federal or state law determines whether a copyright holder has granted an implied, non-exclusive copyright license to another. ⁹

As a general matter, we rely on state law to fill in the gaps Congress leaves in federal statutes. PM Group Life Ins. Co. v. W. Growers Assurance Trust, 953 F.2d 543, 546 (9th Cir. 1992). "The case for adopting state law rules is strongest where Congress legislates interstitially, leaving state law largely undisturbed. Under those circumstances, comity and common sense counsel against exercising the power of federal courts to fashion rules of decision as a matter of federal common law." Id. In enacting the Copyright Act, Congress did not preempt the field. Morseburg v. Balyon, 621 F.2d 972, 977-78 (9th Cir. 1980) (discussing Goldstein v. Cal. , 412 U.S. 546 (1973)). Thus, where the Copyright Act does not address an issue, we turn to state law to resolve the matter, so long as state law does not otherwise conflict with the Copyright Act. See, e.g., Sun Microsys., Inc. v. Microsoft Corp., 188 F.3d 1115, 1122 (9th Cir. 1999) (stating that we "rely on state law to provide the canons of contractual construction provided that such rules do not interfere with federal copyright law or policy" (internal quotation marks and citation omitted)); Rano v. Sipa Press, Inc., 987 F.2d 580, 585 (9th Cir. 1993) (rejecting California rule that "agreements of non-specified duration are terminable at the will of either party" because the rule directly conflicts with federal copyright law); Barris Indus., Inc. v. Worldvision Enters., Inc., 875 F.2d 1446, 1449-50 (9th Cir. 1989) (stating that state contract law determines ownership of federal statutory royalties due copyright owners); Dolch v. United Cal. Bank, 702 F.2d 178, 180 (9th Cir. 1983) (stating that while the assignability of copyright renewal rights is a federal question, the conditions for valid assignment is a question of state law); Topolos v. Caldewey, 698 F.2d 991, 993-94 (9th Cir. 1983) (stating that ownership of a copyright is a matter of state contract law); cf. Aronson v. Quick Point Pencil Co., 440 U.S. 257, 263 (1979) ("State law is not displaced merely because the contract relates to intellectual property which may or may not be patentable; the states are free to regulate the use of such intellectual property in any manner not inconsistent with federal law."). There is no reason we should treat implied copyright licenses any differently. Congress did not choose to regulate the conditions under which a copyright holder can grant a nonexclusive copyright license to another. Thus, so long as it does not conflict with the Copyright Act, state law determines whether a copyright holder has granted such a license.¹⁰

We must ask, then, whether California's parol evidence rule conflicts with federal copyright law or policy. The principle effect of the California parol evidence rule is to lessen the importance of written contracts. It does so because the rule requires courts to consider extrinsic evidence of possible ambiguity even where the terms of the contract appear unequivocal. And if a party's extrinsic evidence creates the possibility of ambiguity, a court may not rely on the text of the contract alone to determine the intent of the parties. See Trident Ctr. v. Conn. Gen. Life Ins. Co., 847 F.2d 564, 568-69 (9th Cir. 1988). The Copyright Act places great emphasis on the necessity of writings to grant exclusive licenses, but not when it comes to granting nonexclusive licenses: As we have noted, nonexclusive licenses may be granted orally. Thus, if a copyright holder and another have a contract that clearly does not grant the other an exclusive copyright license, in a copyright infringement suit the other may nonetheless introduce nonwritten evidence--such as testimony, course of conduct, and custom and practice--to show that the copyright holder orally granted her a nonexclusive license. ¹¹ Since the Copyright Act itself places no particular emphasis on writings in the case of nonexclusive licenses, we conclude that application of California's parol evidence rule in interpreting a contract that a party purports to have granted an implied copyright license does not conflict with the Act or its underlying policies.

9. Cases from other circuits provide little guidance on this issue. Some recognize that the Copyright Act permits copyright holders to grant nonexclusive licenses by implication but fail to discuss what law determines whether such a license has been granted. See, e.g., Johnson v. Jones, 149 F.3d 494, 500 (6th Cir. 1998); Pinkham v. Sara Lee Corp., 983 F.2d 824, 830-31 (8th Cir. 1992); MacLean Assocs., Inc. v. Wm. M. Mercer-Meidinger-Hansen, Inc., 952 F.2d 769, 778-79 (3d Cir. 1991). Others rely on a leading copyright treatise for the principle that a copyright holder grants another a nonexclusive license " `[w]hen the totality of the parties' conduct indicates an intent to grant such permission' " but fail to explain the source of the principle. Lulirama Ltd., Inc. v. Axcess Broadcast Serv., Inc., 128 F.3d 872, 879 (5th Cir. 1997) (quoting 3 MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT § 10.03[A], at 10-41 (1997)). Still others rely on the same treatise for the proposition that the validity and scope of implied copyright licenses are generally determined by state law but provide little or no analysis of the issue. See, e.g., Jacob Maxwell, Inc. v. Veeck, 110 F.3d 749, 752 n.2 (11th Cir. 1997) (citing Fantastic Fakes, Inc. v. Pickwick Int'l, Inc., 661 F.2d 479, 483 (5th Cir. 1981), and NIMMER & NIMMER, supra, § 12.01[A], at 12-8 n.19); I.A.E., Inc. v. Shaver, 74 F.3d 768, 774 n.4 (7th Cir. 1996) (citing NIMMER & NIMMER, supra, § 12.01[A], at 12-8 & n.19).

Foad claims that defendants infringed its reproduction rights to build the project by using the revised plot plan without its permission. We conclude from the terms of the contract that Foad granted GenCom an implied license to do just that. The central purpose of the contract was the production of a set of engineering documents "for `The Grande Plaza' Commercial Center in the city of Arroyo Grande." Under the contract, Foad agreed to create multiple maps, drawings, and plans for the project and to "process" these documents with the city. For this service, GenCom agreed to pay Foad a fee of $175,000. Given the amount of money GenCom paid for Foad's services and because part of the agreement was for Foad to help GenCom with its application to the city, it would be surprising if the parties had intended for GenCom to seek Foad's permission before using the plans to build the project. Had that been the parties' intention, one would

expect to see the requirement spelled out explicitly in the agreement. But nowhere does the contract state that after the city had granted its approval, GenCom would need to obtain Foad's permission before commencing work. We conclude that the contract gives GenCom an implied license to use the revised plot plan to build the project.¹²

As evidence that the contract indicates the parties' intent to restrict GenCom's ability to use the revised plot plan without Foad's approval, Foad asks us to consider a legend that appears on the plan. The legend reads:

All ideas, designs, arrangements and plans indicated or represented by this drawing are owned by, and the property of Foad Consulting Group, Inc. and were created, evolved and developed for use on, and in connection with the specified project. None of such ideas, designs, arrangements or plans shall be used without written permission of Foad Consulting Group, Inc.

This legend does not divulge a latent ambiguity in the contract, much less show that under the contract Foad's permission was required before GenCom could start work. It is patent that the plans were developed for use on the specific project that was built. Although the legend states that no "plans shall be used without written permission of Foad," it appears on a document that was created after the agreement was made, and presumably was written by Foad or its agent. What's more, the legend would apply, if at all, to projects other than the specified project. Foad offers no explanation of how such a statement calls into question the parties' intent, as manifested by the contract, that GenCom would pay Foad for plans that it could use to develop its property. ¹³ Cf. Foster-Gardner, Inc. v. Nat'l Union Fire Ins. Co., 959 P.2d 265, 272 (Cal. 1998) ("The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties." (internal quotation marks and citation omitted) (emphasis added)).

b. License to Adapt

Foad next alleges that defendants infringed its adaptation rights by using much of the revised plot plan in creating the final site plan. But the February 1996 contract contains no language prohibiting others from modifying the revised plot plan. Quite the opposite: The contract contains a clause requiring GenCom to indemnify Foad in the event that others modify the plan and the changes lead to some liability.¹⁴ In addition, that clause does not require GenCom to obtain Foad's consent in order to modify the plans; it only requires consent in order to avoid Foad's waiver of liability. The indemnification clause plus the absence of any prohibition against modification by others indicates that the contract granted GenCom an implied license to hire others to create derivative works using the revised plot plan for the purpose of completing the project.¹⁵

Foad points to paragraph 12 of the contract in support of its argument that it did not grant GenCom a license to hire another company to complete the project using the revised plot plan. Paragraph 12 states:

All original drawings, plans, documents, other papers and copies thereof prepared in connection with this agreement will remain the property of FOAD CONSULTING GROUP, INC. and may be used without the consent of the client and/owner(s). [T]he aforementioned papers will be kept on file by FOAD CONSULTING GROUP, INC. and copies will be provided to the client and/owner(s) at client and/owner(s)'s request, and at client and/owner(s)'s expense.

The paragraph provides Foad no support. It concerns ownership of the original documents and copies prepared by Foad under the agreement. It also makes plain Foad's intention to retain its right to "use" the documents, presumably by reproduction, adaptation, or publication. However, the paragraph is silent about what GenCom may or may not do with the copies prepared for it.

Foad also asks us to consider extrinsic evidence: a declaration from an alleged architectural expert who asserted that, under the custom and practice in the industry, a plan "may not be used to produce a similar plan, without the permission of the original designer."¹⁶ This statement does nothing to undermine our conclusion that the contract grants GenCom an implied license to modify the revised plot plan. The contract protects Foad against any liability that might arise from a plan modified by others while imposing  no restriction on such modifications. Even assuming that industry custom and practice requires a client to obtain an engineer's consent before modifying a plan created by the engineer, we conclude that the contract gave GenCom the requisite permission.

c. License to Publish

Finally, Foad contends that defendants infringed its publication rights by filing the final site plan with the city and circulating it among prospective tenants. The conclusion that the February 1996 contract granted GenCom an implied license to file the final site plan with the city and to use the plan to attract potential tenants follows from our previous analysis. The contract granted GenCom a license to reproduce and adapt the revised plot plan for the purpose of developing the project. It would defy common sense to conclude that the contract at the same time withheld permission to publish the resulting work for the same purpose. In the absence of a contractual provision concerning GenCom's right to circulate any derivative works as part of its development of the project, we conclude that GenCom did not infringe Foad's publication rights.

IV.

The February 1996 contract contains a clause prohibiting either party from assigning any rights under the contract without the written consent of the other.¹⁷ There is no evidence in the record that GenCom obtained Foad's written permission to assign its rights under the contract to its successor. Foad argues that, even assuming that Foad granted GenCom an implied license to reproduce, copy, and publish, in the absence of Foad's written consent to an assignment of rights, GenCom's license was not passed on to its successor. California law, however, is to the contrary. In California, contractual "provisions against assignment . . . are for the benefit of the vendor only, and in no way affect the validity of an assignment without consent as between the assignor and assignee." Johnson v. Landucci, 130 P.2d 405, 408 (Cal. 1942) (in bank); accord Klamath Land & Cattle Co. v. Roemer, 91 Cal. Rptr. 112, 115-16 (Cal. Ct. App. 1970). The limitation on assignment contained in the contract between Foad and GenCom does not affect the validity of GenCom's transfer of its development rights, including its rights concerning the revised plot plan, to its successor-in-interest.¹⁸

CONCLUSION

The Copyright Act permits copyright holders to grant non-exclusive copyright licenses by implication. But whether a copyright holder has properly granted another a nonexclusive license by implication is a matter of state contract law, provided that the state law does not conflict with the Copyright Act or its underlying policies. In this case, the February 1996 contract granted GenCom an implied license to copy and adapt Foad's revised plot plan and to publish the resulting derivative work in aid of constructing the project for which it was designed. The extrinsic evidence which we consider as required by California law reveals no latent ambiguity in the contract. The defendants did not exceed the scope of the license by using the revised plot plan to create a final site plan, build the project, and publish the final site plan. Finally, the clause in the contract limiting assignments does not affect the validity of GenCom's transfer of its development rights. For these reasons, the district court's grant of summary judgment to defendants is

AFFIRMED.¹⁹

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