Golden Oops-iversary

1974 copyright lapse of ‘It’s a Wonderful Life’ begat a wild IP journey

BY REID CREAGER

George Bailey’s life was a mess. The protagonist in the 1946 Christmas movie “It’s a Wonderful Life”—disillusioned and frustrated by betrayal and failure at seemingly every turn—contemplated suicide until an angel showed him what life in his small town would have been without him.

Nearly 80 years later, this iconic serving of Americana holds a more dubious distinction as possibly the most complex intellectual property mess in cinema history. And it’s a reminder that in our pursuit of money, the devil can be in the details in more ways than one.

During holiday seasons from the mid-Seventies to the early 1990s, this $525,000 write-off was shown on cable TV and sometimes locally in a virtually continuous loop—the result of a failure to renew a copyright due in 1974 that left it in the public domain and gave it, well, a wonderful life. The movie eventually became property of NBC, which shows it only a couple times each holiday season and aired it for a 30th consecutive year in 2023.

Not unlike a possibly memorable scene lost to history on the proverbial cutting room floor, the IP saga of “It’s a Wonderful Life” is replete with behind-the-scenes intrigue—driven by mistakes, questionable actors not of the stage variety, and public misconceptions. 

This mess apparently is still not cleaned up. But some clarity is emerging, via recent public comments from an heir to the original literary work that inspired the movie.

As George said when his sweetheart Mary was suddenly sans clothes after her robe slipped off in the bushes: “This is a very interesting situation.”

A book began the story

With the possible exception of the movie’s ending, very little about “It’s a Wonderful Life” has turned out as expected.

Director Frank Capra, who poured his heart and money into the venture—choosing a December 1946 release so it could be eligible for the 1947 Academy Awards—suffered much the same fate as George with the latter’s building and loan company. 

The movie was based on a book by American writer and historian Philip Van Doren Stern, “The Greatest Gift,” completed in 1943. This fact is central to various copyright claims that still exist today.

RKO Pictures became interested and bought the motion picture film rights in 1944 but gradually lost interest, and reportedly sold the rights to Capra for the same amount ($10,000) as its purchase price.  

The movie’s initial disappointing attendance and reviews led banks to threaten foreclosure against Capra, prompting the sale of his company, Liberty Films. According to the carefully detailed, sourced and authoritative itsawonderfullifeplay.com, owned by playwright Jason T. LeBlanc, Capra sold his ownership in “It’s a Wonderful Life” in May 1947. This triggered a dizzying chain of ownership transfers during the next several decades (see sidebar).

National Telefilm Associates (NTA) Studios owned the rights to the film in 1974 when the copyright was set to expire on December 30 under terms of the 1909 Copyright Act—stipulating that this protection lasted 28 years. A clerical error prevented the renewal from being submitted and the film rights lapsed into the public domain, “where they remain today, despite claims to the contrary,” per itsawonderfullifeplay.com.

Conflicts and assumptions

The conflict over rights ownership is tangled by the fact that the movie had separate copyrights involving the musical score, film and radio rights, and the original story. This confusion has been exacerbated by myths and perceptions about legal ownership, fueled by erroneous public perception. 

After the film became public domain, TV broadcasters large and small assumed they could do anything they wanted with the movie—which led to TBS and TNT airing the movie almost nonstop during the holiday season for two decades and giving it angel wings with new audiences.

They assumed wrongly.

Whether misled by the complex nature of copyright law or unaware of the legality of the various “sub-copyrights” involved, broadcasters were airing the movie despite the fact that the originator of the story that became the basis for the movie, Philip Van Doren Stern, had kept up his copyrights.

Stern theoretically would have been owed royalties from the thousands of times the movie aired on TV. But his granddaughter, Sarah Robinson, said during a 2023 iHeart podcast that Stern’s estate did not pursue action against the TV stations (for reasons she did not divulge). Stern died in 1984.

Robinson’s pronouncement contradicts the actions of a Santa Monica, California, prosecutor-turned-entertainment lawyer who was responsible for ending the “It’s a Wonderful Life” TV marathons more than 30 years ago.

In summer 1993—a few years before being sentenced to eight months in prison for his role in a conspiracy to stage the theft of two famous paintings and helping one of his clients collect $17.5 million in a bogus insurance settlement—James Tierney sent a flood of cease-and-desist letters to programmers warning against unauthorized use of the movie unless they paid royalties.

He did so at the behest of Russell Goldsmith, CEO of Republic Pictures (the successor to NTA, the company that had lost the copyright to the movie). Compliance with the demand was reportedly immediate and universal.

According to The Nation, Goldsmith was working toward a $100 million dollar merger between Republic and Spelling Entertainment that would make him president and CEO of Spelling under home video rental giant Blockbuster. The IP he could show was a big part of the deal.

  So Republic bought ownership rights to the film score and music used in “It’s a Wonderful Life” from composer Dimitri Tiomkin, who had renewed the music copyrights. It also still had the exclusive film and radio rights Stern had licensed to RKO in 1944.

Tierney and Goldsmith are said to have told a Los Angeles Times reporter this gave them “two barrels of a shotgun.” Republic leveraged this ownership to negotiate an undoubtedly lucrative licensing arrangement with NBC to show it a few times each holiday season. (It’s now also available on Amazon Prime.)

Even today, Paramount Pictures—which owns Republic Pictures—still warns that “No project relating to ‘It’s a Wonderful Life’ can proceed without a license from Paramount.”

Shotgun, or pop gun?

Although no one is known to have challenged Paramount’s claim in court, Stern’s heirs say the studio’s metaphoric shotgun is firing legal blanks.

“They don’t have a copyright on this story, and they’ve never come to us for copyright on the story,” Robinson said during an iHeart podcast last year.

“The only people who have ever held copyright in the story ‘The Greatest Gift’ are my grandfather Philip, his heirs—his only daughter and three granddaughters [who are] my mother and my two sisters and me—and the small family company that we heirs created to hold and manage ‘The Greatest Gift’ copyright.”

Also of paramount importance: In 2000, The Greatest Gift Corporation, led by Stern’s daughter, Marguerite, knocked a bullet out of Paramount’s holster. The family company, which held complete ownership of the story “The Greatest Gift,” exercised a right of termination and revoked the film and radio that Stern had originally sold to RKO and eventually ended up with Paramount.

Now, Paramount’s only claim to “It’s a Wonderful Life” lay only in the musical score—though its continued warnings about unauthorized use seem to presume much greater ownership. 

Meanwhile, enforcing the copyright of Stern’s works is a full-time and seemingly endless job for his heirs. Per itsawonderfullifeplay.com:

“In theatrical stage works alone, there are at least three dramatic versions, five radio versions, and more than a dozen musical adaptations created since the ’90s. 

“While originally most of these were not officially authorized, The Greatest Gift Corporation has since made six settlement agreements authorizing 12 dramatic/radio or musical stage works by 11 different writers and composers represented by five licensing houses. There have also been a variety of direct requests to create derivative stage productions, which The Greatest Gift Corporation has extended licensing options to.”

As of 2024, Greatest Gift is issuing authorizations to playwrights on a limited, one-calendar year basis. 

One mistake, myriad impacts

Without a fateful clerical error 50 years ago this month, none of this happens.

A long-forgotten movie may well have stayed that way. Generations of Americans would have missed out on what is now an important part of every Christmas. 

A corporate merger would have unfolded differently, if at all. The heirs of Philip Van Doren Stern likely would have led radically different lives, albeit less lucrative.  

Money, and who is entitled to it, is a theme in the movie “It’s a Wonderful Life”—as well as in its IP history. This would doubtless amuse Clarence Odbody, who said: “We don’t use money in heaven.”

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Gotta Bounce

“It’s a Wonderful Life” rights have swung around more than George and Mary doing the Charleston: 

• In 1955, Paramount Pictures Inc. sold its library of films, which included “It’s a Wonderful Life,” to U.M.&M. TY Corp.
• In 1956, shortly after the new organization National Telefilm Associates (NTA) was founded, it bought NTA U.M.&M., which moved the movie to NTA’s ownership.
• In 1984, NTA rebranded to become Republic Pictures Corp. due to the success of the film catalog it bought from Republic Corp. in 1967. Under this rebranding, the ownership and film rights of “It’s a Wonderful Life” were now owned by Republic Entertainment Inc.
• In April 1994, Spelling Entertainment (largely owned by Blockbuster Entertainment as of October 1993) purchased Republic Pictures Corp. and renamed it Republic Entertainment Inc., thus gaining ownership of the movie’s assets as well. This was key to the Tierney and Goldsmith plan.
• In September 1994, Blockbuster Entertainment merged with Viacom to create Viacom Blockbuster. Spelling Entertainment was majority owned by Blockbuster Entertainment, and its catalog was added to Viacom Blockbuster’s.
• By 2000, Viacom Blockbuster had fully acquired the rest of the rights of Republic Pictures’ catalog of titles and placed them under its Paramount Pictures division. Thus, the ownership of “It’s a Wonderful Life” and the film rights Stern had originally sold to RKO studios were now owned by Paramount Pictures.

Courtesy of itsawonderfullifeplay.com

Trivia: Communist What?

• The FBI put “It’s a Wonderful Life” on its list of suspected communist propaganda in 1946 and kept it there until 1956, according to The Wire.

An FBI memo dated May 26, 1947, reads: “With regard to the picture ‘It’s a Wonderful Life,’ [redacted] stated in substance that the film represented rather obvious attempts to discredit bankers by casting Lionel Barrymore as a ‘scrooge-type’ so that he would be the most hated man in the picture. This, according to these sources, is a common trick used by Communists.” (Makes you wonder who “redacted” was.)

• Cary Grant was slated to play the lead role of George Bailey at one point.

According to Digital Spy, Philip Van Doren Stern, who wrote the story that inspired the movie, had his book contents printed onto several Christmas cards and sent it to family and friends. Grant eventually received one of the cards from producer David Hempstead and loved it so much that he brought it to RKO Radio Pictures. But the movie ended up being produced by Liberty Films, which chose Stewart for the main role.

• The role of Mary could have gone to any number of actresses other than Donna Reed. 

According to For Women First, Jean Arthur—who co-starred with Jimmy Stewart in “Mr. Smith Goes to Washington”—was director Frank Capra’s top choice but was resting from performing. Others who were considered included Ginger Rogers and Olivia de Havilland.

• “It’s a Wonderful Life” was Stewart’s first movie after 20 months on the front lines of World War II. He reportedly suffered post-traumatic stress disorder during filming.