Bankruptcy fraud doesn't pay (again) Intellectual property attorney Pamela Chestek posted a blog entitled "You Still Have to Own the Copyright" about a painter whose copyright infringement case was dismissed because she had transferred her copyrights to family members prior to filing a 1997 Chapter 7 bankruptcy petition.

In Giddings v. Vision House Production, Inc., 2008 WL 4700903 (D. Ariz. 2008), Giddings accused the defendants of violating her copyrights in several paintings by making and distributing prints without a license. In their defense, the defendants produced evidence that Giddings had, in 1996, executed written assignments of the copyrights in the paintings to various relatives just prior to filing her Chapter 7 bankruptcy petition in 1997. The copyrights were not assigned back to Giddings until February 2008 (more than two years after Giddings filed the infringement complaint.) Because Giddings did not hold the copyrights at the time of the claimed infringement, the District Court ruled that she lacked standing to bring the infringement action and dismissed the case on the defendants' motion for summary judgment.

In their pleadings, the defendants claimed Giddings "transferred all her copyrights to keep them out of bankruptcy proceedings and away from her creditors." While Giddings disputed this characterization, she did not dispute the fact that her 1997 bankruptcy schedules did not include any interest in intellectual property, and failed to disclose all but one of the transfers. Since Giddings apparently felt, when she brought the complaint in 2005, that she owned the copyrights even though they had never been reassigned to her, an observer could wonder whether the prior assignments were in fact a sham designed to conceal her assets from her bankruptcy trustee.

If so, she certainly got what she deserved.

Labels: copyright

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