Cite as 657 F.Supp. 454 (E.D.Mich. 1987)
film, VCX agreed to pay a $10.00 royalty for each video caste copy sold, along with an advance payment of $25,000.00. A rider to the agreement permitted VCX to deduct $2,500.00 each month from the $25,000.00 deposit and credit that amount to the first 10 monthly royalty payments.
39. VCX made royalty payments to M & A until March of 1982.
40. The payments totaled $235,440.00.
41. The market value of non-exclusive video cassette rights to the film is $10,000.00.
42. The parties terminated the contract on November 19, 1982.
CONCLUSIONS OF LAW
1. Both parties assume that the Court may assert jurisdiction over this case on the basis of diversity of citizenship. 28 U.S.C. § 1332(a). The allegations in “plaintiff” M & A’s complaint and VCX’s counterclaim, however, are jurisdictionally defective in that M & A is merely an assumed name and lacks capacity to bring or defend this action. F.R.Civ.P. 9(a). Nonetheless, the failure to name Arthur Weisberg as plaintiff and counter-defendant is at most a formal irregularity, which does not affect the diversity jurisdiction of this Court. See Blanchard v. Terry & Wright, Inc., 331 F.2d 467 (6th Cir.), cert. denied, 379 U.S. 831, 85 S.Ct. 62, 13 L.Ed.2d 40 (1964). Moreover, neither party has been prejudiced by the failure to name Weisberg as plaintiff and counter-defendant. Under these circumstances, both parties may amend their pleadings to conform to the proofs and to this Court’s findings of fact. F.R.Civ.P. 15(b); 28 U.S.C. § 1653; Brandon v. Holt, 469 U.S. 464, 470–71 & n. 19, 105 S.Ct. 873, 877–78 & n. 19, 83 L.Ed.2d 878 (1985). Furthermore, this Court may decide the legal issues prior to the filing of such an amendment. Brandon, 469 U.S. at 471, 105 S.Ct. at 877.
2. The Copyright Act of 1976, 17 U.S.C. § 101 et seq., governs duplication rights in motion pictures.
3. Copyright generally vests in the author of the work. Id. § 201(a). Nevertheless, “[i]n the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author … and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.” Id. § 201(b).
4. The Act defines a “work made for hire” as “a work prepared by an employee within the scope of his or her employment.” Id. § 101.
5. In short, an employer owns the copyright to a work if (1) the work satisfies the requirements for copyrightability in 17 U.S.C. § 102(a); (2) the work was prepared by an employee; (3) the work was prepared within the scope of the employee’s employment; and (4) the parties have not agreed otherwise in a signed, written instrument. Baltimore Orioles v. Major League Baseball Players, 805 F.2d 663, 667 (7th Cir. 1986).
6. At issue in this case is the second factor, namely, whether an employer–employee relationship existed between Schoolday and Buckley. An “employee,” for purposes of the work made for hire doctrine, is any person who acts under an employer’s direction and supervision. See, e.g., Evans Newton, Inc. v. Chicago Systems Software, 793 F.2d 889, 894 (7th Cir.), cert. denied, – U.S. —, 107 S.Ct. 434, 93 L.Ed.2d 383 (1986); Aldon Accessories v. Spiegel, Inc., 738 F.2d 548, 551–53 (2d Cir.), cert. denied, 469 U.S. 982, 105 S.Ct. 387, 83 L.Ed.2d 321 (1984); Murray v. Gelderman, 566 F.2d 1307, 1309–10 (5th Cir.1978).
7. Buckley was not an employee of Schoolday. Buckley, not Schoolday, was the motivating force in producing the film. He exercised complete control of the corporation, which served as his mere alter ego. There simply was no supervision of his work other than his own. As a result, Buckley owned all rights to the film upon
