Defending the Copyright Claim: Some Initial Issues To Evaluate

By Stephen D. Milbrath

In an increasingly digital age in which the Internet is an ever more vital mode of distribution and the products which we buy and sell are themselves morphing into complex combinations of information – in which, for example, written content, images, art, video and music may all be bundled together into a single digital “product” instantaneously available for purchase – handling copyright infringement cases will almost certainly become a stock feature of a litigation practice. The purpose of this article is to suggest a few initial steps to evaluating the typical claim of copyright infringement from the moment the claim has been assigned to defense counsel to the beginning phases of discovery. What is said here is not intended to provide a complete checklist for developing a defense case, but it will hopefully provide some useful guidelines for thinking through the initial issues for the defense, learned from many years in the trenches in the prosecution and defense of such claims.

In copyright disputes it is frequently the case that the plaintiff will assert various claims for “infringement” along with its counts for copyright infringement: claims like unfair competition, deceptive advertising, or “knocking off,” all or some of these theories arising under the Lanham Act. E.g., 15 U.S.C. §1125(a). Such claims are often asserted, however, primarily to assure “advertising injury” and thus insurance coverage. Hyman, supra, n. 1. As you study the complaint and the facts of the case, you will often find that the core issues of the dispute, unfair competition issues notwithstanding, reduce to whether the plaintiff owned something original enough to claim copyright protection for it and, if so, whether that original content was unfairly copied by the defendant. Hence the first step in case evaluation should center upon the matter of originality and what rights the plaintiff has to protect. This will require a very careful study of the copyright registration and related documents. (Sample registrations are available at the Copyright Office website, www.copyright.gov.)

1. Study the Registration Certificate

It is well known, of course, that copyright protects only “original” works of authorship “fixed in any tangible medium of expression.” 17 U.S.C. §102(a). The term “original” is shorthand, however, for two distinct concepts. The first is that of creativity: the work must possess at least some “minimal degree of creativity.” Feist Pub’lns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991). This is not a challenging standard; indeed most works “make the grade quite easily, as they possess some creative spark ‘no matter how crude, humble or obvious.’” Id. The work need not be novel or even clever; it may even be similar or indistinguishable from other works so long as it displays the necessary “creative spark.” Id. But it must display some creativity contributed by the author. Id. See also, Eldred v. Ashcroft, 537 U.S. 186, 211 (2003) (contribution must not be utterly lacking in creativity or so trivial as to be nonexistent). The second aspect of “originality,” Feist at 345-346, is that of independent creation: the work must be original to the author. Id. Originality in this sense means that the portion of the work in which copyright is claimed has not been copied from someone else. Id; Utopia Provider Systems, Inc. v. Pro-Med Clinical Systems, Inc., 596 F.3d 1313, 1319-20 (11th Cir. 2010).

Most works, however, are in at least some sense “derivative” in that they are based upon or incorporate content from some other, preexisting work. See 17 U.S.C. §§101, 103(a); Nimmer on Copyright §3.03[A]. Such derivative works are capable of only limited protection. See Feist, at 499 U.S. 348; Montgomery v. Noga, 168 F.3d 1282, 1290 n. 12 (11th Cir. 1999); L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486 (2d Cir. 1976) (en banc), cert denied, 429 U.S. 857 (1976). For the derivative work, copyright protection extends no further than the content contributed by the derivative author; it does not protect the underlying content obtained from the public domain or contributed by some other author who may have authorized the making of the derivative work. See generally, Alfred Bell & Co. v. Catalida Fine Arts, Inc., 191 F.2d 99 (2d Cir. 1951) (an influential case concerning derivative works). These and related principles make the examination of the registration certificate and related documents a matter of paramount importance for defense counsel.

Remember that the copyright office does not make a detailed examination of the registered work. The examiner studies for the most part only the registration document and the “deposit” or official exemplars of the work in which copyright is claimed. And who prepares the registration certificate? In all too many cases, it is the client, or, if the registration is prepared by the claimant’s lawyer, you will frequently find that the lawyer had but limited experience in intellectual property matters. As a result, copyright registrations are often error-filled and are thus worthy of very exacting study.

In examining the certificate of registration, pay particular attention to block six of the registration form (see standard registration forms at Copyright Office website), in which the applicant must disclose (i) whether the work existed in some prior version, which is almost always the case in computer software cases, and (ii) whether the work is derivative and, if it is, (iii) the content contributed by the derivative author. Each detail is important. Be suspicious if block six of the form is blank. Was there a prior version of the work, as is often the case with software or digital images? If so, why was it not disclosed? Could the work be derivative? If so, why was this information not brought to the attention of the examiner? The author’s failure to disclose that the work was derivative may not have been intentional; but such an omission could be material all the same. Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp. 2d 1146, 1167 (C.D. Cal. 2002); Block State Testing Servs. L.P. v. Kontractor’s Prep Corp., 4 F. Supp. 2d 1365, 1366 (M.D. Fla. 1997). The failure to disclose the preexisting content could strip the work of its presumption of originality, or even invalidate the registration altogether, if deception was involved. Id.; Masquerade Novelty v. Unique Indus., 912 F.2d 663, 667 (3d Cir. 1990); Nimmer on Copyright §720[B]. This is true even though the Copyright Act has been amended recently to limit the range of defense attacks on copyright registrations.

Section 411 (b) (1) of the Copyright Act now provides that a certificate of registration “satisfies the requirements of this section and section 412 ” even if there are inaccuracies in the registration form unless the inaccuracies were included in the registration form “with knowledge that it was inaccurate” and the inaccuracies “would have caused the Register of Copyrights to refuse registration.”

A case illustrating the continued vitality of attacks on registration certificates even in the face of this new amendment is St. Lukes Cataract and Laser Institute, P.A. v. Sanderson, 573 F.3d 1186 (11th Cir. 2009), which sustained a jury verdict that the errors in two successive copyright registrations were sufficiently substantial to meet the statutory test for invalidity. The court interpreted the statute to require proof of “scienter,” consistent with the pre-amendment standard. “Scienter” in this context is, in essence, the intentional or purposeful concealment of material information from the Copyright Office. Id., at 573 F.3d 1201.

Next consider how the work was created. Does the registration certificate show, for example, that the work is one “for hire?” See 17 U.S.C. §201(b) (defining work for hire). If so, an urgent topic for discovery will be whether the real “author” was an employee or, failing that, one who signed a written agreement transferring his or her rights. The “author” in this sense is the one whose creativity is embodied in the work: the “originator” or “maker.” Feist, at 345; Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884). You should look for more detail, for example, if the one who did the programming or contributed the artwork or other creativity to the work was an independent contractor working without an agreement; the employer in such event may have nothing to protect. See Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989); M.G.B. Homes v. Ameron Homes, 903 F.2d 1486, 1490 (11th Cir. 1990). Be suspicious if the persons involved in creating the work are not among the Rule 26 disclosures of the claimant. Obviously if your own client collaborated in the creation of the work, to any significant degree, consideration should also be given to whether the work is a joint work in which the defendant has rights as well. 17 U.S.C.§201(a) (stating that the authors of a joint work are co-owners of copyright in the work); 17 U.S.C. §101 (defining joint work as a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole). This defense is more often asserted than proven, and is disfavored by the courts, and should be invoked only where it is substantially supported by independently verifiable evidence. See Childress v. Taylor, 945 F.2d 500, 505 (2d Cir. 1991) (defining an exacting standard); Thomson v. Larson, 147 F.3d 195 (2d Cir. 1998) (emphasizing the necessity for independent proof of intent to form a co-authorship relationship). If the degree of collaboration in the actual writing of the work was minimal, it is a defense best left unasserted. Yet there are cases which have upheld a defense of joint authorship in a copyright infringement case. A recent example is Janky v. Lake County Convention & Vistors Bureau, 576 F.3d 356 (7th Cir. 2009), in which a song-writer’s contribution to a song, though minimal in percentage of contribution, was found sufficient to uphold a claim of joint authorship as a defense – and one which prevailed on summary judgment.

Study also the matter of assignment. If the work was created by a subcontractor or independent contractor, is there an agreement in writing authorizing the assignment of the author’s work? If not, the plaintiff must cure the error or forfeit the registration. See 17 U.S.C. §201(d) (requiring a written instrument of conveyance absent a work for hire or other acknowledged exception); Nimmer on Copyright §12.02 (discussing standing to sue for infringement).

Two always-important factors in evaluating a copyright defense are the date on which the work was published and the date on which the registration issued. Many copyright registrations are filed with the Copyright Office by angry plaintiffs just before the filing of the complaint, and then only to assure federal jurisdiction for suit; such eleventh-hour registrations are always problematical. Did the infringement commence before the registration? If so, the claimant is statutorily barred from recovering either statutory damages or attorney’s fees on the claim. 17 U.S.C. §412 (defining the conditions for the award of statutory damages or attorneys’ fees). As a practical matter such a belated registration may constrain the claimant’s litigation objective almost entirely to securing an injunction against continued infringement, and should prompt an early mediation or settlement conference. See generally, Nimmer on Copyright §14.02. If the infringement commenced after registration, consider the date on which the work was created and published. If you are dealing with a work that has been around for a few years, you may find that the work was registered more than five years after the work was first “published”. If this is the case, the claimant cannot avail itself of the statutory presumption of validity; and the evidentiary weight to be accorded the certificate will be a matter solely within the discretion of the court. 17 U.S.C. §410(c). The loss of this presumption may, as a practical matter, doom the claimant to affirmatively proving the originality of the work in question, which can be a daunting matter in court. Publication is a thorny issue, but for products like artwork or music or software that are usually published soon after they were created, the matter may be reduced to pinpointing the date on which the product was first in distribution for resale. See 17 U.S.C. §101 (defining publication); Brown v. Tabb, 714 F.2d 1088 (11th Cir. 1983); American Vitagraph, Inc. v. Levy, 659 F.2d 1023 (9th Cir. 1981).

Even if the work was registered in time to provide it with the cloak of originality, careful study of the registration may reveal significant issues over the originality of the content that is truly at issue in the case. For example, if most works are only derivative, it will often prove to be difficult for the claimant to prove that the original content it contributed to the total work can be found in the defendant’s allegedly infringing work. It is not enough to show similarity between the claimant’s work as a whole and the accused work as a whole; the similarity must subsist in the content that is original to the claimant’s registration. Feist, at 345-47; Burroughs v. Metro-Goldwyn-Mayer, Inc., 683 F.2d 610, 632 (2d Cir. 1982); Nimmer on Copyright §3.04[A]. Consider a house plan registration, for example. If the claimant is being honest at all, it must concede that any 3-2 or 4-3 house plan design is in some sense derived from preexisting plans or from code or from functional constraints or from some combination of these elements. The originality of the copyrighted plan will turn, therefore, on the particular elements of the design that the claimant contributed to the preexisting plan or paradigm which possess the necessary modicum of creativity. To win, the copyright claimant must, in the simplest case, show that these creative elements were copied and are present in the accused design of the defendant. Feist, 499 U.S. at 361. The claimant will also often be forced to overcome a defense of independent creation: the defense that the accused plans were not copied but were independently created by or licensed from another. See, e.g., Calhoun v. Lillenas Publ’g, 298 F.3d 1228, 1232 (11th Cir. 2002) (proof of access and substantial similarity raises only a presumption of copying which may be rebutted by evidence of independent creation). In either case the registration is often the key to the defense. Does the registration paper-over preexisting content that the author incorporated? Is the content contributed by others properly accounted for? Is there a basis for inferring that the copyright claimant has itself engaged in improper copying? If the claimant has in fact copied the work of others in its work, the registration is invalid. Murray Hill Publications, Inc. v. ABC Communs., Inc., 67 F. Supp. 2d 754, 759 (E.D. Mich. 1999), aff’d (except as to attorneys’ fees) at 264 F.3d 622 (6th Cir. 2001); Nimmer on Copyright §3.06. This defense of copying-by-the-author can be proven, at least in most jurisdictions, by indirect proof of access and substantial similarity, exactly as the copyright plaintiff may do in mounting an indirect proof case. See, e.g., Boisson v. Banian, Ltd., 273 F.3d 262, 269-70 (2d Cir. 2001); Nimmer on Copyright §12.11[A]. Are the dates of creation and publication unreliable? If so, a prior independent creation defense may be available based upon the true dates of the two works.

More fundamentally, if the work is derivative, the available corpus of original content can often be shown to be “thin,” Feist, at 349, as in most online databases and compilations, in which the bulk of the work is a compilation of facts that cannot be protected by copyright. Id. Increasingly courts are limiting the level of protection available for derivative works as well as compilations to instances of literal or wholesale infringement – cases in which the defendant has copied every feature of the work in total. See, e.g., MiTek Holdings v. Arce Eng’g Co., 89 F.3d 1548, 1558-59 (11th Cir. 1996); Apple Computer v. Microsoft Corp., 35 F.3d 1435, 1446 (9th Cir. 1994). As a policy matter this makes a great deal of sense in a legal system in which the standard for originality is relatively low and the danger of trivializing copyright protection is thus a genuine concern. If, in short, copyright is to be so widely available that anybody with any insubstantial contribution can secure a registration of a work, no matter how mundane, it is appropriate to accord such works only a level of protection commensurate with their level of originality. If the work is largely someone else’s or incorporates much public domain content, it has but limited originality; the claimant should be entitled only to a limited scope of exclusivity: the law should prohibit only the complete and literal copying of the content original to the author. This approach to originality deters the literal copier from “free riding” on the copyright owner’s creativity while still leaving ample room for others to make their own marginal contributions to a crowded field of design without fear of unwarranted infringement claims. See generally, Nimmer on Copyright §3.01. The starting point for the analysis is to focus on the specific content in which copyright is claimed. If the work is a compilation or a derivative work which incorporates much public domain or third-party licensed content, it should be treated legally as a “thin” work with correspondingly limited protection. MiTek, 89 F.3d at 1558-1559; Apple Computer, 35 F.3d at 1446.

Even in the more complex source-code copyright cases, only a “thin” level of protection may be available to the claimant. This is certainly the case if the author incorporated much of the code in which protection is claimed from other sources, such as preexisting source code, or used a rapid application development tool with canned solutions to create the whole program. But it may also prove true even for the more complex programs written from scratch by talented programmers. This is because the court must, except in instances of wholesale, literal line-for-line copying apply some form of abstraction, filtration and comparison process to separate ideas, methods, scenes a faire, interfaces and compatibility requirements and other unprotectable content from whatever genuine expression may be embodied in the source code. Computer Assocs. Int’l v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992) (setting forth abstraction/filtration/comparison test); General Universal Sys. v. Lee., 379 F.3d 131, 143 (5th Cir. 2004) (requiring Altai analysis to establish unlawful copying of nonliteral aspects of programs); Bateman v. Mnemonics, Inc., 79 F.3d 1532 (11th Cir. 1996) (requiring some species of filtration even for literal infringement of source code).

2. Study the Deposit

A copyright claimant must supply, with the registration, a bona fide copy of the original work in which copyright is claimed. This requirement, set forth in Section 408 of the Copyright Act, is satisfied only if the registrant has deposited a copy of the actual original work, as opposed to a later alleged reconstruction of it. For musical works or software source code, this is a requirement which is often bungled, particularly where the application has been submitted by inexperienced counsel. Hence careful study of the deposit is in order. Do not assume that the claimant’s counsel has a “bona fide” copy of the deposit. Instead, go directly to the Copyright Office and request an expedited copy of the deposit, to which you are legally entitled because of the litigation. 37 C.F.R. §205.22(a). You may find, particularly if you are dealing with source code, that the deposit submitted is inadequate, or is the wrong version of the work, or is a mere reconstruction of it that may or may not be genuine. If so, the claimant has failed to satisfy an essential statutory formality, and the copyright should be declared invalid. Coles v. Wonder, 283 F.3d 798, 801 (6th Cir. 2002); Shady Records, Inc. v. Source Enters., 73 U.S.P.Q. 2d 1954 (S.D.N.Y. 2004). If the deposit is not literally the original work, it must be “virtually identical to the original and must have been produced by directly referring to the original.” Kodadek v. MTV Networks, 152 F.3d 1209, 1211 (9th Cir. 1998)

3. The Available Relief

Careful consideration of the factors noted above will lead to an early assessment of the claimant’s potential relief. If the copyright registration occurred after the infringement, the claimant will be limited to recovering (I) actual damages, which is typically limited to lost profits and may be expressed as the loss of a reasonable per-unit royalty for the use of the program, reduced to present net value and (ii) the infringer’s profits, to the extent not already included in the damages model. 17 U.S.C. §504(b). This can, in the proper case, obviously be a large number and should provide an incentive on the part of the defendant to cease any genuine acts of infringement immediately. If the registration was not a belated one, the claimant may also be entitled to seek statutory damages, an election of the form of relief being required only after the jury returns its verdict. 17 U.S.C. §504(c) These damages may prove to be the greater risk to the defense, for the jury can award up to $150,000 per work infringed (Id.) should willfulness be determined – another factor militating in favor of an early termination of any infringement. The timely registrant is also entitled to seek attorneys’ fees if it is found to be the prevailing party. 17 U.S.C. §505. Whether to award such fees is discretionary on the part of the court, Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), and may hinge on your ability to prove good faith on the part of the defendant, particularly in the selection of defenses that seem appropriate and directed to clarifying legitimately contested issues of copyright law. This should be a key factor in your early evaluation of the case. If there are no significant issues to raise in the defense, and no new policy grounds to pursue (such as a viable argument for fair use), cut your losses and seek an early settlement conference; if there are significant issues document them early (which will usually require early resort to an expert) and consider making an offer of judgment that the claimant cannot easily reject. In at least some jurisdictions such an offer may defeat an attorneys’ fee award entirely. Jordan v. Time, Inc., 111 F.3d 102 (11th Cir. 1997); contra: Harbor Motor Co. v. Arnell Chevrolet-Geo, Inc., 265 F.3d 638, 646-647 (7th Cir. 2001); Crossman v. Marcoccio, 806 F.2d 329 (1st Cir. 1986). In other jurisdictions, the making of such an offer can at least be considered by the court in weighing whether to award the claimant its fees.

Conclusion

As the above suggests, an early proactive approach to evaluating the defense of the claim is particularly necessary in copyright litigation, even where preliminary injunctive relief has not been sought. Indeed, your ability to limit the defendant’s exposure to attorneys’ fees may depend upon such an active and prompt approach. Hopefully these comments will provide some useful approaches to mounting a successful defense.