Emails Create Binding Transfer of Copyright Interest, Court Finds

November 18th, 2011

Earlier this month, in Rafael Vergara Hermosilla v. The Coca-Coca Company, the 11th Circuit held that a chain of email correspondence created a valid and binding contract of copyright assignment.

The facts begin in 2009.  Coca-Cola created an advertising campaign for the 2010 FIFA World Cup soccer tournament, which featured a new version of the K’naan song “Wavin’ Flag,” the “Celebration Mix,” sung in different languages.  To produce the Spanish version of the Celebration Mix, Coca-Cola enlisted Jose Puig of Universal Music Latin America.  Puig, based on a recommendation from Rafael Artero of Universal Music Publishing Group, reached out to the plaintiff, Vergara, to adapt the lyrics of the song to Spanish.  Vergara knew he would need to negotiate his interest in the adaptation but assumed this would happen after the adaptation was completely.

Vergara adapted the Celebration Mix into Spanish and sent Puig the lyrics and a demo of the song with the Spanish lyrics.  Following Coca-Cola’s approval, Vergara created and delivered to Puig the final production of the song in December 2009.

The following month, Vergara invoiced UMP $6,000 for his production work and UMP began negotiating with the owners of the composition for an “adapter’s share” of the profits for Vergara.  In February 2010, iTunes Mexico began selling the Spanish Celebration Mix without any credit to Vergara for the Spanish adaptation.  The composition owners refused to grant an adapter’s share to Vergara, at which point Vergara threatened to file a lawsuit.

Puig and Vergara negotiated a settlement and confirmed the details via email.  Vergara stated in an email on March 4, 2010 to Puig and Artero that his “only demand” was that his “name as an adapter . . . [was listed] every time the name of any composer of [the Spanish Celebration Mix] [was] shown, . . . along with . . . production credits.” Vergara further wrote that Puig should “consider [the adaptation] a Work for Hire with no economic compensation” other than “one dollar.”  Puig emailed a response the next day, telling Vergara that he could “count on the credits on the track” and that he was resending the contract to Vergara.

The contract Puig sent Vergara did not comply with Vergara’s credit requests, so Vergara sent an email to Puig “revok[ing]” his “proposal” of March 4, 2010. Puig agreed to review the contract and make the necessary changes to the credit provisions.  Universal assigned all of its rights, including Vergara’s assigned copyright interest, to Coca-Cola on March 4, 2010.

In May 2010, Vergara filed a lawsuit against Coca-Cola.  After issuing a preliminary injunction against Coca-Cola from using the song unless it attributed proper credit to Vergara, the district court later granted summary judgment in favor of Coca-Cola.  The court ruled that the email exchange was a contract entered into by Vergara to assign his copyright interest in the adaptation to Universal.

Upon review, the Court of Appeals affirmed the district court decision of summary judgment in favor of Coca-Cola.  It held that the email exchange fulfilled the requirements under Florida law to form a binding contract.  Vergara set forth his “definite proposal” and Puig “unconditionally accepted,” matching the terms of the offer.  The court found that “[t]he two emails were ‘so connected with each other that they may be fairly said to constitute . . . a complete contract.” (quoting Webster Lumber Co.  v. Lincoln , 115 So. at 502).

Even though the parties intended to later execute a formal written contract, the court held that they still intended to be bound immediately by the written negotiations.