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From Intellectual Property Law Daily, January 29, 2019

Toy developer’s heirs lose in play to reclaim ‘Game of Life’ rights

By Thomas Long, J.D.

The prototype of the popular boardgame was physically created by the toy developer’s employees. Therefore, the game was a work for hire, and exempt from the right to terminate transfers given to authors by Section 304 of the Copyright Act.

The heirs of toy developer Bill Markham could not reacquire copyrights to the boardgame "the Game of Life" from Hasbro, Inc., and heirs of the late radio and television personality Art Linkletter, by terminating under 17 U.S.C. §304 transfers of rights Markham had made to Hasbro’s predecessor-in-interest, the Milton Bradley Company, and a firm co-owned by Linkletter, the federal district court in Providence, Rhode Island, has ruled. The physical creation of the game’s prototype in 1959 was done by Markham’s former employees, Markham’s wife, and unnamed parties hired by Markham to perform finishing touches. This work was done at the instance and expense of Milton Bradley and another toy developer. Therefore, in the court’s view, the facts of the case fell within the "work-for-hire" exception to the termination right given to authors by Section 304 (Markham Concepts, Inc. v. Hasbro, Inc., January 25, 2019, Smith, W.).

The Game of Life. The Game of Life was first released in 1960. In 1959, toy developer Reuben Klamer was engaged by Milton Bradley to develop a product to commemorate the company’s centennial in 1960. Klamer stumbled on a copy of a game created by company namesake Bradley, himself, in 1860, called "the Checkered Game of Life," which Klamer decided to update. For help in transforming his idea into a prototype boardgame, Klamer reached out to Markham. At that time, Markham headed a product development firm that employed two artists named Grace Chambers and Leonard Israel. Chambers and Israel testified that Klaber and Markham provided the "big ideas," such as the board’s circuitous path, the idea that the board would feature three-dimensional elements, the game’s object of achieving various life milestones, and use of a spinner to dictate movement of the players. Chambers worked on the graphical design of the game board, and Israel worked on the box cover. Chambers and Israel both testified that they—not Markham or Klaber—built the prototype, with Chambers stating that she did "most of it." Chambers built the elements of the game board—houses, mountains, and elevated track—from paper, cardboard, and balsa wood, and constructed a prototype cardboard spinner. An outside firm later converted these to plastic replicas for the prototype pitched to Milton Bradley. They testified that creation of the game’s rules was a collaborative and iterative effort.

Linkletter promotional relationship. Klamer also had co-founded, with radio and television personality Art Linkletter, a firm called Link Research Corporation ("Link"), to develop consumer products to be marketed using Linkletter’s celebrity. Linkletter was present at the meeting where the prototype boardgame was shown to Milton Bradley executives, and part of Klamer’s pitch was that Linkletter could help promote the game.

Rights transfer agreements. Milton Bradley decided to market the game, and two agreements regarding rights followed. The first, entered on September 21, 1959, was a License Agreement between Link and Milton Bradley. This agreement gave Milton Bradley the exclusive right to manufacture and market the game, which it stated that Link "had ... designed and constructed." The License Agreement also allowed Milton Bradley to use Linkletter’s name and image in its advertising of the game, and required Linkletter to plug the game 52 times on his nationally televised show. In return, Link received a $5,000 advance and a six percent royalty on sales. The second agreement, executed on October 20, 1959, was an Assignment Agreement between Link and Markham, under which Markham transferred his rights in the game to Link, in exchange for a royalty stream amounting to 30 percent of six percent royalty Link was receiving, along with a small advance and reimbursement of some of Markham’s incidental costs in developing the prototype, including Chambers’s and Israel’s salaries. The Assignment Agreement stated that Markham had "invented, designed and developed" the game. Markham and Klamer had several disputes over the next several years—occasionally in court—over credit for creation of the game and over royalties.

Termination of transfer—works for hire. Markham died in 1993. His heirs and successors in interest filed the instant suit against Hasbro, Klamer, Art Linkletter’s heirs, and others, in an effort to terminate the Assignment Agreement under Section 304 of the Copyright Act. The court determined, however, that termination was not available to Markham’s heirs because the facts of the case fell squarely within the work-for-hire exception to the termination right granted authors in Section 304. Section 304(c) specifically states that transfers of copyrights granted prior to January 1, 1978, are subject to termination, but not if the copyright was one on a work for hire. Because the game was created in 1959, it was governed by the Copyright Act of 1909, which contained the concept of a work for hire but lacked a statutory definition of the term. Turning to case law for guidance, the court noted that the First Circuit had borrowed an "instance-and-expense" test from the Second and Ninth Circuits. This test provided that the presumptive "author" and copyright holder of a commissioned work was the commissioning party as whose "instance and expense" the work was done.

In this case, the work at issue—the prototype boardgame—was prepared for the use and benefit of Klamer, who also paid for the work and therefore was a "commissioning party." Klamer provided the impetus (or "instance") for the prototype’s creation. Klamer’s selection of Markham’s company to help him create the prototype was the sole reason for Markham’s involvement in the project. Klamer had the power to supervise the work’s creation, and this power was reflected in the Assignment Agreement, which provided that, while Markham was to be notified of updates and changes to the game and allowed to provide input, the final decisions rested with either Link or Milton Bradley. Klamer ultimately paid Markham’s expenses incurred in developing the prototype, including the salaries of the artists, Chambers and Israel. Klamer also paid Markham his 30 percent share of Link’s royalties. Accordingly, Klamer was, under the 1909 Act, the game’s "author" and copyright owner, and Markham never held a copyright in the prototype. Accordingly, the court concluded, the Section 304 termination rights were not available to Markham’s heirs.

This case is No. 1:15-cv-00419-WES-PAS.

Attorneys: Joseph V. Cavanagh, Jr. (Blish & Cavanagh, LLP) for Markham Concepts, Inc. Joseph Avanzato (Adler Pollock & Sheehan PC) for Hasbro, Inc.

Companies: Markham Concepts, Inc.; Hasbro, Inc.

MainStory: TopStory Copyright RhodeIslandNews

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