United States Court of Appeals,
Ninth Circuit.

Kip RANO, Plaintiff-Appellant,
v.
SIPA PRESS, INC., Sipa, Inc., Goskin Sipahioglu, Sipa, Defendants-Appellees.

No. 91-55080.

Argued and Submitted Feb. 4, 1992.
Decided March 2, 1993.
As Amended March 24, 1993.

J.D. Sullivan, Pasadena, CA, for plaintiff-appellant.

Kevin J. Stack, Knapp, Petersen & Clarke, Glendale, CA, and Ben C. Friedman, Baker & Friedman, New York City, for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before: BRUNETTI, O'SCANNLAIN, and T.G. NELSON, Circuit Judges.


BRUNETTI, Circuit Judge:

OVERVIEW

This appeal from a dismissal for lack of personal jurisdiction and grant of summary 
judgment in a copyright infringement suit turns on issues of federal preemption of state
law in the copyright field and the termination of copyright licenses. For the reasons 
stated below, we affirm in part, reverse in part, and remand.

FACTS AND PROCEEDINGS BELOW

The parties to this appeal include: Plaintiff-Appellant Kip Rano, a professional 
photographer and citizen of Great Britain who resides and has his principal place of 
business in California; and Defendants-Appellees Sipa Press, a French corporation, Sipa
Press, Inc., a Delaware subsidiary corporation, and Sipa, Inc., a New York subsidiary 
corporation (collectively Sipa), and Goskin Sipahioglu, President and one of three 
owners of Sipa Press. Sipa is a photograph distribution syndicate.

In France, on or before 1978, the parties entered into an oral copyright license 
agreement whereby Rano granted to Sipa a non-exclusive license of unspecified duration 
to reproduce, distribute, sell, and authorize others to reproduce, distribute, and sell 
his photographs. In return, Sipa agreed to store and develop the negatives and to pay 
fifty percent of the net royalties generated from its sales and distributions.

The relationship went smoothly for about eight years. Pursuant to agreement, Rano 
submitted several thousand of his photographs to Sipa, which Sipa distributed and paid 
royalties for. In March of 1986, however, Rano sent a letter to Sipahioglu informing 
him that he was changing agencies and that he would no longer be sending his negatives 
to Sipa. He gave as his reasons Sipa's failure to timely pay royalties, low sales, 
poor photography assignments, and unwillingness to reimburse certain expenses. 
Starting in July of 1986, Rano made several requests that Sipa return all of the 
negatives he had sent to them. Finally, on March 12, 1987, Rano informed Sipahioglu 
that he "did not authorize Sipa to sell any more of [his] photographs."

In July of 1989, Rano sued Sipa and Sipahioglu alleging that Sipa infringed his 
copyright by: (1) failing to credit him for a photograph of the Duchess of York, the 
former Sara Ferguson; (2) failing to pay certain royalties; (3) continuing to 
distribute some of his photographs after he demanded their return and after he had 
attempted to terminate their licensing agreement; (4) failing to return some of his 
photographs upon demand; and (5) placing defective copyright notices on slide mounts 
for his photographs. Rano also alleged state breach of contract, intentional 
interference with economic relationship, and malicious conversion claims. As a remedy 
for the copyright infringement claims, Rano sought an injunction against Sipa's further 
use of his photographs, the delivery of the photographs for impoundment, a declaratory 
judgment as to the rights to his photographs, compensatory and punitive damages, and 
costs of the suit and attorney's fees.

The district court dismissed Rano's pendent claims for malicious conversion and 
intentional interference with economic relationship and granted defendant Sipahioglu's 
motion to dismiss for lack of personal jurisdiction. After reviewing the affidavits 
and memoranda submitted by the parties and conducting a hearing, the district court 
granted Sipa's motion for summary judgment, holding that all but one of Rano's *584 
copyright infringement claims did not constitute copyright claims under the Copyright 
Act, but were merely breach of contract claims. The one claim that did allege 
copyright infringement-- failure to affix a proper copyright notice--was, as a matter of
law, meritless because the notice Sipa did provide was adequate to protect his 
copyright. The district court dismissed the remaining pendent state claims for lack of 
subject matter jurisdiction.

DISCUSSION
I. Jurisdiction in the District Court.

[1][2][3] The district court had subject matter jurisdiction over Rano's action under 
28 U.S.C. <section> 1338(a) because the suit "arises under" federal copyright law. [FN1]
A mere allegation of breach of contract does not create federal jurisdiction, even if 
the contract involves copyright. Under the well-pleaded complaint rule,


FN1. Although Rano is not a citizen of the United States, his work is protected 
under the Copyright Act. A work is subject to copyright if on the date of first 
publication the author was a national of a foreign nation that is a party to a 
copyright treaty to which the United States is also a party. 17 U.S.C. <section> 
104(b)(1); 1 Nimmer on Copyright <section> 5.05[B] (1992). United Kingdom and the 
United States have been treaty partners since 1887. 5 Nimmer, Appendix 20 at 24. 

an action arises under the federal copyright laws "if and only if the complaint is for 
a remedy expressly granted by the Act, ... or asserts a claim requiring construction of
the Act, ... or at the very least and perhaps more doubtfully presents a case where a 
distinctive policy of the Act requires that federal principles control the disposition 
of the claim."

Vestron Inc. v. Home Box Office, 839 F.2d 1380, 1381 (9th Cir.1988) (quoting T.B. Harms
Co. v. Eliscu, 339 F.2d 823 (2d Cir.1964) (Friendly, J.), cert. denied, 381 U.S. 915, 85
S.Ct. 1534, 14 L.Ed.2d 435 (1965)).

In this case, Rano is seeking remedies under several sections of the Copyright Act: 17
U.S.C. <section><section> 502 (injunctive relief), 503 (impoundment), 504 (damages and 
profits), and 505 (attorney's fees and costs). Thus, federal jurisdiction is proper.

II. Jurisdiction Over The Appeal.

[4] Although Rano filed his notice of appeal based on the district court's summary 
judgment order, more than two weeks before the district court issued its final order 
dismissing the remaining pendent state claims, we will treat the notice of appeal as 
timely. See Eastport Assocs. v. City of Los Angeles, 935 F.2d 1071, 1074 (9th 
Cir.1991) (premature notice of appeal will be directed towards a subsequently entered 
final decision dismissing the action); Anderson v. Allstate Ins. Co., 630 F.2d 677, 
680-681 (9th Cir.1980) (subsequent events can validate a prematurely filed appeal). As
in Eastport and Anderson, there is no danger of piecemeal review because no issue or 
claim remains in the district court. Accordingly, we have jurisdiction over this 
appeal pursuant to 28 U.S.C. <section> 1291 (1982).

III. Standard of Review.

[5][6][7] We review grants of summary judgment de novo. S.O.S., Inc. v. Payday, Inc., 
886 F.2d 1081, 1083 (9th Cir.1989). We must determine, viewing the evidence in the 
light most favorable to the nonmoving party, whether there are any genuine issues of 
material fact and whether the district court correctly applied the relevant substantive 
law. Id. We are free to affirm on any ground fairly presented by the record. Jackson 
v. Southern Cal. Gas Co., 881 F.2d 638, 643 (9th Cir.1989).

IV. Allegations of Copyright Infringement.

Rano alleges infringement of two of the rights granted to him, as creator of the 
photographs, by the Copyright Act: the right to reproduce the copyrighted work in 
copies and the right to distribute copies of the work to the public by sale or other 
transfer of ownership. See 17 U.S.C. <section> 106(1) and (3). Rano concedes that, 
under normal circumstances, his licensing *585 agreement with Sipa would provide Sipa 
with a valid defense against his copyright infringement claim. See Effects Assocs., 
Inc. v. Cohen, 908 F.2d 555, 559 (9th Cir.1990), cert. denied sub nom., Danforth v. 
Cohen, 498 U.S. 1103, 111 S.Ct. 1003, 112 L.Ed.2d 1086 (1991) (in granting a copyright 
license, the licensor gives up its right to sue the licensee for infringement); Oddo v.
Ries, 743 F.2d 630 n. 6 (9th Cir.1984) (license is a defense to infringement and must be
affirmatively pleaded). Rano argues, however, that although he and Sipa did at one 
time have a copyright agreement, he terminated the agreement with Sipa. He claims that
the termination deprived Sipa of its right to use the negatives Rano already had sent to
Sipa, and that Sipa's subsequent use of Rano's negatives constituted copyright 
infringement.

It is undisputed that the licensing agreement did not contain any provision, either 
express or implied, regarding its duration. Rano relies on two theories to prove that 
he properly terminated the agreement. First, Rano argues that California law provides 
for termination at will of a contract of unspecified duration. Thus, when he wrote 
Sipahioglu on March 12, 1987, and informed him of his intent to use a different 
photograph distributor, he terminated their licensing agreement. Second, Rano argues 
that California law provides for the termination of a contract upon the material breach 
of the contract by the other party, and that Sipa's alleged actions constituted material
breaches of the licensing agreement, permitting him to terminate the agreement.

Sipa counters that the express provision in the Copyright Act regarding termination 
rights, 17 U.S.C. <section> 203, preempts state law and prevents Rano from terminating 
their license agreement until thirty-five years have elapsed. Thus, Sipa claims, its 
alleged acts of reproducing and distributing Rano's photographs remained licensed at all
times and did not constitute copyright infringement.

A. Termination at Will. [FN2]


FN2. Because the parties did not raise it as an issue on appeal, for purposes of 
this appeal only, we will assume California law governs the interpretation of the 
license agreement. We make no findings as to whether French, rather than 
California, law would apply on remand. See Restatement (First) of Conflict of Laws
<section><section> 332, 358 (1934) (law of the place of making generally controls 
issues of contract validity, while place of performance generally controls issues of
contract performance); Restatement (Second) of Conflict of Laws <section><section> 
188, 206 (1971).


[8][9] Under California contract law, agreements of non-specified duration are 
terminable at the will of either party. Zimco Restaurants, Inc. v. Bartenders and 
Culinary Workers' Union, Local 340, 165 Cal.App.2d 235, 331 P.2d 789, 792-92 (1958); 
but cf. Foley v. Interactive Data Corp., 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373,
385-86 (1988) (noting that this general rule increasingly has given way to courts' 
willingness to "gap fill" a reasonable duration). Rano argues that the non-exclusive 
licensing agreement was a contract of non-specified duration, and as such was terminable
at will. He further argues that he exercised his right to terminate the contract.

However, application of this principle of California contract law here would directly 
conflict with federal copyright law. Under Section 203 of the Copyright Act, licensing
agreements are not terminable at will from the moment of creation; instead, they are 
terminable at the will of the author only during a five year period beginning at the end
of thirty-five years from the date of execution of the license unless they explicitly 
specify an earlier termination date. 17 U.S.C. <section> 203(a). Since California law
and federal law are in direct conflict, federal law must control. See Fidelity Federal
Savings & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 
L.Ed.2d 664 (1982).

Section 203 applies to non-exclusive, as well as exclusive, licenses executed by the 
author on or after January 1, 1978. 17 U.S.C. <section> 203(a). Rano asserts that 
Section 203 is inapplicable because the licensing agreement was oral and thus not 
executed. We disagree. Not only was the agreement evidenced by several letters 
signed by both parties, but it also was successfully operative *586 for approximately 
eight years. Thus, the agreement was executed and is within the purview of Section 203
and is not terminable at will.

Contrary to Rano's allegation, holding that Section 203 preempts California's 
termination at will rule of contract construction would not mean that Sipa, and other 
licensees, would be able to breach the licensing agreement with impunity. Under 
well-settled copyright law, Rano would be able to claim copyright infringement if Sipa 
exceeded the scope of the licensing agreement, see, e.g., S.O.S., 886 F.2d at 1087, 
breached a covenant or condition, see, e.g., Fantastic, 661 F.2d at 483, or breached the
agreement in such a substantial and material way as to justify rescission. See e.g., 
Affiliated Hosp. Prod. Inc. v. Merdel Game Mfg. Co., 513 F.2d 1183, 1186 (2d Cir.1975). 
Moreover, he could sue in state court under a breach of contract theory.

B. Termination for Material Breach.

[10][11][12] Rano argues that Sipa materially breached the licensing agreement and that
the breach gave him the right to terminate the agreement. Although licensing agreements
are not terminable at will, under federal and state law a material breach of a licensing
agreement gives rise to a right of rescission which allows the nonbreaching party to 
terminate the agreement. Costello Publishing Co. v. Rotelle, 670 F.2d 1035, 1045 
(D.C.Cir.1981); 3 Nimmer <section> 10.15[A] at 112. After the agreement is 
terminated, any further distribution would constitute copyright infringement. Costello, 
670 F.2d at 1045.

[13] Here, it is clear that Rano attempted to rescind the agreement. The question is 
whether he had the right to rescind. A breach will justify rescission of a licensing 
agreement only when it is "of so material and substantial a nature that [it] affect[s] 
the very essence of the contract and serve[s] to defeat the object of the parties.... 
[The breach must constitute] a total failure in the performance of the contract." 
Affiliated Hospital Products, 513 F.2d at 1186; Nolan v. Williamson Music, Inc., 300 
F.Supp. 1311, 1317 (S.D.N.Y.1969), aff'd sub. nom. Nolan v. Sam Fox Publishing Co., 499 
F.2d 1394 (2d Cir.1974); 3 Nimmer <section> 10.15[A] at 116-18.

Rano has not provided evidence sufficient to withstand summary judgment on this issue. 
Rano points to a number of acts that he contends constitutes a material breach, but 
only those acts preceding Rano's purported termination on March 12, 1987 are relevant. 
These acts include Sipa's alleged failure to pay royalties, failure to return negatives,
and failure to credit for the Sara Ferguson photograph. The first two breaches claimed
by Rano, upon which he relies most heavily, are not supported by the record. Sipa 
actually paid Rano 99.99% of the royalties due him up to approximately the time Rano 
sought to terminate the licensing agreement, excluding royalties due for photos 
published in the United States from 1985 to 1986. Of the latter, Sipa paid 86.85% of 
the royalties due. As to the second alleged breach, nothing in the letters evidencing 
the oral contract between the parties provided for a return of Rano's negatives on 
demand. Rano merely points to a letter from Sipa stating that the negatives would be 
filed at its offices and "could be returned if necessary, although [Sipa] would want to 
keep them for a while." Finally, Rano provides no evidence to support his claim that 
he was due credit for the photograph of Sara Ferguson. Sipa provided evidence that the
photograph was taken by another journalist; the duty was on Rano to show there was a 
genuine issue as to this fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-24, 106
S.Ct. 2548, 2552-54, 91 L.Ed.2d 265 (1986).

[14] Even if we found Rano's allegations had merit, however, we could not conclude that
Sipa materially breached the licensing agreement in light of the fact that the parties 
enjoyed a harmonious eight-year relationship (in which Rano received royalties and 
credit for his work). "After considerable performance, a slight breach which does not 
go 'to the root' of the contract will not justify termination." Witkin *587 Summary of
California Law <section> 795 (9th ed. 1987); see Whitney Inv. Co. v. Westview Dev. Co.,
273 Cal.App.2d 594, 78 Cal.Rptr. 302, 307 (1969); Restatement (First) of Contracts 
<section> 275 (1932).

V. Failure To Affix a Proper Copyright Notice.

[15] Rano argues Sipa affixed an improper copyright notice on the negatives it 
distributed to various publications. The district court found that although this claim
properly alleged a copyright violation, as a matter of law the notice given was 
adequate. The court, however, relied on Fantastic Fakes, Inc. v. Pickwick Int'l, Inc.,
661 F.2d 479 (5th Cir.1981), a case which is not dispositive. Fantastic Fakes, Inc. 
involved licensee's mistaken designation of itself as copyright proprietor. Id. at 481,
486. In that case, the validity and ownership of the copyright was not affected. Id. 
In the case before us, however, Sipa failed to affix the year of publication on a number
of photographs. Such an omission generally deprives work of copyright protection. 
See 17 U.S.C. <section> 405; 3 Nimmer <section> 7.03. Although Sipa alleges a number 
of possible defenses, because of the factual nature of these issues, we are unable as a 
matter of law to find that there is no material issue of fact as to whether the notice 
was adequate. Accordingly, we reverse the district court's grant of summary judgment 
as to this issue.

VI. Personal Jurisdiction Over Sipahioglu.

A. Standard of Review.

[16][17][18][19][20] A district court's determination that personal jurisdiction cannot
properly be exercised is a question of law reviewable de novo when the underlying facts 
are undisputed. Haisten v. Grass Valley Medical Reimbursement Fund, Ltd., 784 F.2d 
1392, 1396 (9th Cir.1986). A district court's factual findings on jurisdictional 
issues must be accepted unless they are clearly erroneous. Stock West, Inc. v. 
Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir.1989). 
Rano bears the burden of establishing a prima facie case supporting in personam 
jurisdiction. Data Disc, Inc. v. Systems Technology Assocs., Inc., 557 F.2d 1280, 1285 
(9th Cir.1977). [FN3]


FN3. It is well established that where the district court relies solely on 
affidavits and discovery materials, the plaintiff need only establish a prima facie 
case of jurisdiction. See Fields v. Sedgwick Associated Risks, Ltd., 796 F.2d 299,
301 (9th Cir.1986). If the trial court holds an evidentiary hearing or the case 
proceeds to trial, however, the burden on the plaintiff shifts to the preponderance 
of the evidence. Haisten, 784 F.2d at 1396 & n. 1; Forsythe v. Overmyer, 576 F.2d 
779, 781 (9th Cir.), cert. denied, 439 U.S. 864, 99 S.Ct. 188, 58 L.Ed.2d 174 (1978)
. Although in this case the district court did hear oral argument on the issue of 
personal jurisdiction, the argument centered on issues of law and no evidence was 
presented.


B. Analysis.

The district court dismissed the claim against Sipahioglu because it found it lacked 
personal jurisdiction over him. Sipahioglu is a citizen of Turkey and a long-time 
resident of France. His ties to California include three short visits to California in
the last seven years, totaling six days. None of Sipahioglu's visits to California 
involved Rano or his photographs.

[21][22] There is no applicable federal statute governing personal jurisdiction in this
matter, hence the law of the state in which the district court 
sits--California--applies. See Hylwa, M.D., Inc. v. Palka, 823 F.2d 310, 312 (9th 
Cir.1987). California has adopted a typical "long-arm" statute, rendering jurisdiction
coextensive with the outer limits of due process. Data Disc, 557 F.2d at 1286; Cal.Code
Civ.Proc. <section> 410.10.

[23][24][25] A state may assert either general or specific jurisdiction over a 
nonresident defendant. If the defendant's activities in the state are "substantial" or
"continuous and systematic," general jurisdiction may be asserted even if the claim is 
*588 unrelated to the defendant's activities. Data Disc, 557 F.2d at 1287. Rano does 
not argue that Sipa is subject to general jurisdiction; instead, Rano relies on 
specific jurisdiction.

[26][27] Under specific jurisdiction, a court may assert jurisdiction for a cause of 
action that arises out of the defendant's forum- related activities. Haisten, 784 F.2d 
at 1392. In Haisten we established a three-part test for determining when a court can 
exercise specific jurisdiction:

(1) the defendant must perform an act or consummate a transaction within the forum, 
purposefully availing himself of the privilege of conducting activities in the forum and
invoking the benefits and protections of its laws;

(2) the claim must arise out of or result from the defendant's forum-related 
activities;

(3) exercise of jurisdiction must be reasonable. Haisten, 784 F.2d 1392 (citing 
Pacific Atl. Trading Co. v. M/V Main Express, 758 F.2d 1325, 1327 (9th Cir.1985)). 
Rano must show that all three prongs are satisfied for us to assert personal 
jurisdiction. Pacific Atl. Trading Co., 758 F.2d at 1329 (requirements are 
conjunctive).

Rano contends that Sipahioglu caused and profited from Sipa's grant of licenses of 
Rano's photographs to magazine publications that he knew would be distributed in 
California. This is enough, Rano argues, to satisfy the "purposeful availment" and 
"arising out of" requirements of Haisten.

We disagree. Sipahioglu could not have foreseen Rano's fortuitous move from Europe to
California. See Pacific Atl. Trading Co., 758 F.2d at 1329 (no basis to assume 
foreseeability of suit in California based on agreement signed in Malaysia). Further, 
there is no evidence that Sipahioglu invoked any of the benefits or protections of 
California's laws. Rano's argument, if accepted, would render Sipahioglu, and other 
foreign owners of art who sell their products to publications, amenable to personal 
jurisdiction in every state in which their art eventually is displayed. We have held 
that litigation against an alien defendant requires a higher jurisdictional barrier than
litigation against a citizen from a sister state. Frank Sinatra v. National Enquirer, 
Inc., 854 F.2d 1191, 1199 (9th Cir.1988) (citing cases); Pacific Atl. Trading Co., 758 
F.2d at 1330 (" 'foreign-acts-with-forum- effects jurisdictional principle "must be 
applied with caution, particularly in an international context" ' ") (citations 
omitted).

We find that Rano has not satisfied the burden of establishing personal jurisdiction 
over Sipahioglu; hence we affirm the district court's dismissal of the claims against 
Sipahioglu.

VII. State Law Claims.

[28] The district court dismissed Rano's state law claims of malicious conversion and 
intentional interference with economic relationship because it found the "claims would 
predominate in terms of proof or scope of issues raised and in terms of remedies sought;
would likely confuse the jury; and would impede the interests of judicial economy, 
convenience, and fairness to the parties." The district court also dismissed Rano's 
breach of contract claim for lack of pendent jurisdiction. On appeal, Rano has 
abandoned his claim for intentional interference with economic relationship, but asks 
that we order the district court to reconsider his remaining state claims.

[29] Pendent jurisdiction is a discretionary doctrine. Juras v. Aman Collection Serv.,
Inc., 829 F.2d 739, 744 (9th Cir.1987), cert. denied, 488 U.S. 875, 109 S.Ct. 192, 102 
L.Ed.2d 162 (1988). Our decision revives Rano's copyright infringement claim as to 
copyright notice. On remand, the district court should reconsider exercising pendent 
jurisdiction over Rano's state law claims for malicious conversion and breach of 
contract. See id. at 745.

*589 VIII. Attorney's Fees on Appeal.

[30] Rano seeks attorney's fees on appeal based on 17 U.S.C. <section> 505. That 
section of the Copyright Act permits a district court, in its discretion, to award 
attorney's fees to the prevailing party in a copyright action. See McCulloch v. Albert
E. Price, Inc., 823 F.2d 316, 322 (9th Cir.1987). This request is premature. 
Attorney's fees denied.

IX. Costs on Appeal.

No costs allowed.

CONCLUSION

We affirm the district court's grant of summary judgment in favor of Sipa on the issue of copyright infringement as to Rano's claims based on material breach.

We reverse the district court's grant of summary judgment in favor of Sipa as to Rano's claim for improper copyright notice and remand for further proceedings consistent with this opinion.

We affirm the district court's dismissal of Goskin Sipahioglu for lack of personal jurisdiction.

REVERSED IN PART, AFFIRMED IN PART, AND REMANDED.

987 F.2d 580, 1993 Copr.L.Dec. P 27,067, 26 U.S.P.Q.2d 1051