One of America’s most beloved holiday movies, It’s a Wonderful Life was once in the center of a copyright controversy caused by a clerical error and resolved with a Supreme Court decision.
In 1946, when It’s a Wonderful Life was filmed, U.S. copyright protection lasted 28 years and could be renewed for another 28 years by paying a small fee and filing paperwork with the copyright office. A clerical error by its owner, National Telefilm Associates (NTA), had prevented the copyright from being renewed properly in 1974. At that point the film entered public domain and began nearly endless royalty-free showings on television and video tapes produced by more than 100 distributors.
The original movie was the first film produced by Liberty Films. Unfortunately, It’s a Wonderful Life was unable to recoup its high production cost at the box office in 1946-7, so the company and its copyright to It’s a Wonderful Life were sold to Paramount Pictures in May 1947. Eight year later, Paramount sold it to U.M.&M. T.V. Corp., along with most of Paramount’s early shorts and Betty Boop cartoons. In 1956 NTA obtained the rights to It’s a Wonderful Life, including the original television syndication rights, the original nitrate film elements, the music score, and the film rights to the short story, "The Greatest Gift" by Philip Van Doren Stern. It was NTA who failed to renew the copyright of It’s a Wonderful Life, opening the gates to its uncontrolled oversaturation on videotape and television.
However, in 1990, the United States Supreme Court issued its opinion in Stewart v. Abend, involving another Jimmy Stewart film, Rear Window. The question presented in that case was whether the owner of a legal derivative work infringes the rights of the successor copyright owner, by continued distribution and publication of the derivative work during the renewal term of the pre-existing work. The Court ruled that that the copyright owner's right to permit the creation of a derivative work passes to the heirs of the author of the work, who are not bound by the original author's agreement to permit such use.
After he wrote the story "The Greatest Gift", Stern was unable to find a publisher and sent the 200 copies he had printed as a 21-page booklet to friends as Christmas present in December 1943. Stern privately published the short story in 1945, and it was copyrighted in 1945. RKO purchased the motion-picture rights for $10,000 in April 1944. RKO sold the rights to the story in 1945 to Frank Capra's production company, Liberty Pictures for the same $10,000.
Since the film’s story was derived from "The Greatest Gift", whose copyright was properly renewed by Philip Van Doren Stern in 1971, NTA’s purchase of the movie rights under the original 1944 agreement with Van Doren, gave their successor, Republic Pictures renewed property rights over the movie itself. It also still owned the copyright to the music. Since the movie was derived upon the copyrighted short story and the copyrighted music, it was once again impossible to show It’s a Wonderful Life without the blessing of the studio. After Republic reclaimed the rights to the film, all unofficial VHS copies of the film in print were destroyed and the televisions rights were exclusively granted to NBC. The renewals and amendments to the Copyright Act protect the rights to the short story and the music for many years. While the movie itself is in public domain, no one has yet tried to edit a version which doesn’t infringe on the story and music copyrights.
The lesson: Happy Holidays and Let Dungan, Kilbourne & Stahl, P.A. handle your copyright and intellectual property issues, before you lose Zuzu’s petals.
Sources: Wikipedia.com, Cox, Stephen. It's a Wonderful Life: A Memory Book. Nashville, Tennessee: Cumberland House, 2003. Alsdorf, Matt. Slate.com: "Why Wonderful Life Comes but Once a Year." slate.com, December 21, 1999. Stewart v. Abend, 495 U.S. 207, 110 S. Ct. 1750; 109 L. Ed. 2d 184 (1990).