Community Property and the Copyright Act: Rodrigue s Recognition of a Community Interest in Economic Benefits

• Author: Garth R. Backe
• Pages: 655-677

Page 655

I Introduction

George Rodrigue's "Blue Dog" appears in most of his artistic pieces. Modeled after the family pet, George created the vivid and easily recognizable image in 1984 while married to his wife, Veronica. Since then he has seen the image become somewhat of a celebrity in itself. Advertisers have used it to sell products such as Absolute Vodka and Xerox Copiers; and, if you look closely, it can be seen on the wall of the famous coffee shop in the television series Friends. With the tremendous success of the "Blue Dog" image, George achieved both national acclaim and financial prosperity, but behind the scenes, a bitter dispute waged to determine the rights to the popular icon.¹

In 1993, George Rodrigue sought a divorce from his wife of almost thirty years, sparking a boxing match of sorts over the substantial revenues generated from his copyrighted works. In an effort to gain access to the proceeds, each former spouse relied on an opposing legal regime to aid their case. In Veronica's corner, there was Louisiana's community property law² which is based on the fundamental principle that property acquired during the marriage is shared equally between the spouses.³ Louisiana's matrimonial regime, adopted during Spanish colonization, conceptualizes marriage as a team effort. Regardless of which spouse produced the earnings, both are entitled to an undivided half-interest of all community property upon termination of the marriage.⁴ With this in mind, Veronica argued her entitlement to half of "all intellectual property rights generated during the existence of the community and... all post-community artworks that are 'derivative' of that intellectual property."⁵

In George's corner, there was the federal Copyright Act of 1976⁶ which specifies that ownership of a copyright "vests initially in the author" at the time of Page 656 the creation of the work.⁷ A copyright comes into existence when an author fixes an original work of authorship in a tangible medium of expression.⁸ George argued that because federal law grants ownership of a copyright solely to the author, it preempts any state law that attempts to assign any right to his ex-wife. Therefore, he claimed his copyrighted works never became community property, and were thus exempt from division and partition after divorce. He sought a declaration that he alone was the owner of all intellectual property represented in his artwork.

George won the first round when the United States District Court for the Eastern District of Louisiana held that the Copyright Act in fact preempted state law, thus recognizing George as the sole owner of his copyrighted works.⁹ The judge believed that it was not the proper role of a court of law to attempt to make the two regimes compatible.¹⁰ Undaunted, Veronica returned and scored a subsequent victory when the United States Court of Appeals for the Fifth Circuit reversed the district court finding a permissible coexistence between the two sources of law.¹¹ In an elaborate and complex opinion, the court ingeniously harmonized state and federal law such that George maintained exclusive control of his copyrights, while granting Veronica an economic interest in the benefits generated by copyrighted artworks created during the marriage.¹²

This article endorses the appeals court decision, arguing that it promotes Congress' effort to protect former spouses without offending the goals of the Copyright Act.¹³ Indeed, in the past, Congress has decisively reacted to Supreme Court findings of preemption of community property laws by legislatively overruling the decisions to allow for the application of state law in order to safeguard the contributions and financial interests of former spouses. Taking heed of past Congressional reactions, the Rodrigue decision carefully preempts the state community property laws that conflict with the purpose of the Copyright Act while Page 657 harmlessly allowing a revenue-generating community interest to survive. This result not only satisfies the principals of federal preemption but also reflects the will of Congress.¹⁴

After summarizing the holding in Rodrigue, Part II analyzes the Supreme Court cases which found federal preemption of state community property laws, arguing that their holdings display extreme indifference to the fundamental principles of community property. Furthermore, Part II illustrates that the Congressional reactions, in the wake of these Supreme Court decisions, signify a deep concern for former spouses and possible rejection of the majorities' reasoning. Part III addresses the implications of recognizing a community interest in copyrights by quelling objections made by intellectual property scholars. Compiling the logic expressed in Part II and III, Part IV applies the test provided in the Supreme Court case, Hisquierdo v. Hisquierdo,15 to illustrate that the Rodrigue decision not only satisfies Court's express mandate, but also recognizes the sanctity of community property.¹⁶ Finally, Part V offers a brief analysis of the potential problems that might arise when courts try to assign a value to copyrighted works in divorce proceedings. Before proceeding, however, a brief discussion of federal preemption analysis may be useful.

The thrust of George Rodrigue's argument relied on the Supremacy Clause of the United States Constitution which states that "[l]aws of the United States... shall be the supreme Law of the Land."¹⁷ When state and federal law oppose each other, state law must yield.¹⁸ If Congress clearly indicates that federal law governs a particular matter, the Constitution demands preemption of state law.

Most of the time, however, Congressional intent is not so expressly stated and courts are left to determine the precise scope of the federal statute. The Supreme Court has recognized two forms of "implied preemption."¹⁹ Field preemption occurs when "the scope of a statute indicates that Congress intended federal law to occupy a field exclusively."²⁰ Conflict preemption exists when it is impossible for a private party to comply with both state and federal laws, without frustrating the Page 658 purpose and objectives set forth by Congress.²¹ Courts resort to resources such as legislative history, preemption jurisprudence, and federal policy in order to determine a federal statute's effect on state law.

However, there is a strong presumption against preemption.²² The Supreme Court professed this fundamental principle, embedded in the concept of federalism, when it declared:

Where... the field which Congress is said to have pre-empted has been traditionally occupied by the States, 'we start with the assumption that the historic police powers of the States were not to be superceded by the Federal Act unless that was the clear and manifest purpose of Congress.'²³

Furthermore, the Supreme Court requires a heightened standard when it comes to state laws relating to the family.²⁴ The Supreme Court clearly indicated that a substantially greater showing of conflict is required to find federal preemption; indeed "[a] mere conflict in words is not sufficient. State family and family- property law must do 'major damage' to 'clear and substantial' federal interests before the Supremacy Clause will demand that state law be overridden."²⁵Therefore, the issue in Rodrigue hinged on whether Louisiana law-which states that "property acquired during the existence of the legal regime through the effort, skill, or industry of either spouse" becomes community property²⁶-could be amicably reconciled with the Copyright Act's grant of copyright ownership to the author-spouse.

I Rodrigue v. Rodrigue

The Fifth Circuit Court of Appeals began its analysis by dissecting the precise language of ß 201(a) of the Copyright Act which states that ownership of a "[c]opyright in a work... vests initially in the author or authors of the work."²⁷The court wasted no time in highlighting how it believed Veronica could share in the profits from the copyrighted works created during the marriage without offending the express wording of the Act. The court observed that the term "copyright," according to ß 106,²⁸ simply translated into the five exclusive rights: Page 659 reproduction, adaptation, publication, performance, and display. It announced that "none of these rights either expressly or implicitly include the exclusive right to enjoy income or any of the other economic benefits produced by or derived from copyrights."²⁹ Because revenues were not an exclusive right mentioned in the definition of "copyright," the court concluded that Louisiana law did not conflict with federal law by recognizing Veronica's community interest in proceeds from sales or licences of George's artwork. Furthermore, the section only addresses "initial" vesting, leaving open the implication that the copyright could later be shared with non-authors.³⁰

The remainder of the court's opinion elaborated on legal support for its holding. The court began by discussing the Louisiana Civil Code provisions regarding ownership of property in general. Outlining the civilian concepts of usus, abusus, and fructus, the court demonstrated how both Veronica and George could share in the copyrights while still abiding by the provisions of the federal law.³¹The court explained:

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