TMTV, Corp. v. MASS Productions MASS, Product, et al
Filing
OPINION issued by Michael Boudin, Appellate Judge; David H. Souter, Associate Supreme Court Justice and Bruce M. Selya, Appellate Judge. Published. [09-1439, 09-1956]
Case: 09-1439
Document: 00116220076
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Date Filed: 06/13/2011
Entry ID: 5557668
United States Court of Appeals
For the First Circuit
Nos. 09-1439, 09-1956
TMTV, CORP.,
Plaintiff, Appellee/Cross-Appellant,
v.
MASS PRODUCTIONS, INC.; EMMANUEL LOGROÑO, a/k/a Sunshine Logroño;
GILDA SANTINI; CONJUGAL PARTNERSHIP LOGROÑO-SANTINI,
Defendants, Appellants/Cross-Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Raymond L. Acosta, U.S. District Judge]
Before
Boudin, Circuit Judge,
Souter,* Associate Justice,
and Selya, Circuit Judge.
María D. Trelles-Hernández and Néstor M. Méndez-Gómez with
whom Pietrantoni Mendez & Alvarez LLP, John F. Nevares and John F.
Nevares and Associates PSC were on brief for defendants,
appellants/cross-appellees.
Roberto Sueiro-Del Valle with whom Roberto Sueiro Del Valle
Law Offices, Freddie Oscar Torres-Gomez and Law Office of Roberto
Sueiro were on brief for plaintiff, appellee/cross-appellant.
June 13, 2011
*
The Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
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BOUDIN, Circuit Judge.
Date Filed: 06/13/2011
Entry ID: 5557668
Before us are cross-appeals in a
decade-long copyright dispute concerning two sitcoms on Puerto
Rican television.
On one side is TMTV, Corp., a successor in
interest to the first sitcom's production company; on the other,
the second sitcom's production company, Mass Productions, Inc., and
its
principals--including
the
star
of
both
shows,
Emmanuel
"Sunshine" Logroño. The district court granted summary judgment to
TMTV on its claim charging infringement; and a jury granted it
substantial damages, which the district court reduced by an amount
recovered by TMTV in settlement of related litigation.
A summary of events and prior proceedings will suffice.
In 1997, Antonio Mojena--an established television producer in
Puerto Rico--approached two veteran entertainers--Sunshine Logroño
and Iris Chacón--about co-hosting a variety show on Puerto Rican
television.
The show would be called De Noche con Iris y Sunshine
and would begin with four two-hour episodes, continuing thereafter
if
it
proved
popular.
Chacón
and
Logroño
both
agreed
to
participate.
During Mojena's initial pitch, he and Logroño discussed
filling some of the two-hour episodes of De Noche con Iris y
Sunshine with comedy segments.
To that end, Logroño arranged a
meeting in late September or early October 1997 with a team of
comedians
and
scriptwriters,
including
scriptwriters
Roberto
Jiménez and Miguel Morales; Jiménez had worked with Logroño before,
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while Morales had not.
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At the meeting Jiménez suggested a sitcom
centered on a condominium building and its residents.
Logroño
approved of the idea of setting a comedy segment in a condominium
building, and the title 20 Pisos de Historia ("20 Pisos") was
chosen.
The session produced a number of suggestions for dramatis
personae, many modeled on preexisting characters taken from other
projects involving the team.
For example, a focus of the sitcom
was to be a gossipy security guard in the lobby named "Vázquez,"
who was based on a character Logroño played in a comedy segment in
a previous television special, Sunshine a la BBQ. "Soto," an older
woman living alone, was drawn from a character in another prior
Logroño show, La Tripletta.
These and like adaptations were used
when the sitcom was aired.
After this discussion of ideas, Logroño asked Morales to
write scripts for two of the first three episodes of 20 Pisos and
Jiménez to write the third.
Logroño's recollection was that he
framed the plots of all three, and Morales and Jiménez merely
prepared dialogue to conform to Logroño's storylines. By contrast,
Morales claims that he wrote the two scripts at home, by himself,
based on the general concepts aired at the meeting; similarly,
Jiménez claims to have taken the general ideas from the session and
fixed them in writing for the first time.
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The writers delivered their scripts to Logroño, who
retyped all three using special screen-writing software.
On the
cover pages, Logroño listed Morales as the author of episodes one
and three and Jiménez as the author of episode two.
Logroño claims
to have made substantial changes in the scripts given to him, but
the trail of drafts shows only minimal editing.
And while Logroño
appears to have co-written a number of later scripts for 20 Pisos,
these reflected themes and characters set up in the first three
episodes.
The first episode of 20 Pisos aired on the inaugural
broadcast of the variety show, De Noche con Iris y Sunshine, on
November 7, 1997. The show was produced by Creative Relief Corp.-a business wholly owned by Mojena--and broadcast in Puerto Rico by
the WKAQ television station, an affiliate of the Telemundo network.
The early episodes were successful and the variety show--and the 20
Pisos sitcom within it--became a recurring weekly program for
almost two years (although renamed after Chacón left).
In December 1999, Logroño decamped from WKAQ for a rival
television station--WAPA, an affiliate of Televicentro--where he
starred in a new sitcom produced by Mass Productions (a company
controlled by Logroño and his wife), titled El Condominio. The new
show, which began airing on WAPA in March 2000, featured many of
the same actors as 20 Pisos.
The show retained the old characters
and the sitcom unfolded in a virtually identical condominium
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setting,
although
new
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stories
Date Filed: 06/13/2011
were
developed
and
Entry ID: 5557668
some
new
characters added.
On March 15, 2000, TMTV brought a copyright infringement
action in federal district court against Logroño, his wife, and
their production company, Mass Productions.1
declaratory
judgment
and
various
other
The suit sought a
legal
and
equitable
remedies. Logroño filed an answer and counterclaim, asserting that
he was the sole owner of the copyright to the outlines, scripts,
and characters used for 20 Pisos and that he was owed royalty
payments for the use of these properties by TMTV.
In
due
course,
the
district
judgment in the plaintiff's favor.
court
granted
summary
TMTV, Corp. v. Mass Prods.,
Inc. (TMTV I), 345 F. Supp. 2d 196 (D.P.R. 2004).
The court held
that Morales and Jiménez had authored the first three scripts of 20
Pisos
pursuant
to
valid
work-for-hire
agreements
with
TMTV's
predecessor in interest and that all later episodes of 20 Pisos
were derivative of the first three.
Id. at 204-08.
As to
infringement, the district court found 20 Pisos and El Condominio
virtually identical.
Id. at 213.
In December 2004, a month or so after this decision,
Televicentro--the network on which El Condominio was broadcast--
1
TMTV is wholly owned by Mojena, who formed it from a
predecessor entity in January 1999. In February 1999, Creative
Relief--the initial production company for De Noche con Iris y
Sunshine--assigned its putative copyrights to TMTV.
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sought unsuccessfully to intervene and to have the partial summary
judgment set aside. In August 2005, TMTV sought to consolidate its
own suit with two others now pending before another district judge:
an infringement suit by TMTV against Televicentro for broadcasting
El Condominio and a suit against TMTV by a group of actors claiming
copyright in the characters they had portrayed in 20 Pisos.
This
motion too was denied.
Thereafter, Logroño made his own failed attempt to undo
the liability ruling against the defendants by claiming that the
scriptwriters' work-for-hire agreements with TMTV were invalid.
TMTV, Corp. v. Mass Prods., Inc. (TMTV II), 453 F. Supp. 2d 378,
382-83 (D.P.R. 2006). He also sought, unsuccessfully, to forestall
a trial on damages by arguing that a private intervening settlement
of the suit by TMTV against Televicentro meant that any further
award to TMTV would be an impermissible double recovery.
Prior to the trial, TMTV elected to claim only its actual
damages (and not the defendants' profits or statutory damages).
See 17 U.S.C. § 504 (2006).
TMTV's expert witness, economist
Michael Einhorn, estimated damages as at least $4.9 million, based
on licensing fees TMTV allegedly would have earned but for the
infringement by the defendants; this was measured in part by
licensing fees actually earned by another comparable sitcom on
Puerto Rican television.
The jury awarded TMTV $772,079.29.
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Following the verdict, the district court, over TMTV's
objection, reduced the award by $700,000, representing the amount
that TMTV had received in settlement from Televicentro.
The court
awarded TMTV prejudgment interest at the local-court rate of 5
percent per annum on the original jury verdict up through the date
of the Televicentro settlement and, from then on, on the much
smaller balance.
Finally, the court denied TMTV's request for
attorneys' fees as barred by the registration requirement of the
Copyright Act, 17 U.S.C. § 412.
Both parties filed timely appeals, and we begin with
Logroño's challenges to the summary judgment--most importantly, his
attack
on
the
defendants.
infringement
ruling
against
him
and
his
co-
That ruling in turn required that TMTV show both
ownership of a validly copyrighted work and improper copying of the
protected elements of that work.
Yankee Candle Co. v. Bridgewater
Candle Co., 259 F.3d 25, 33 (1st Cir. 2001).
Our review of the
summary judgment ruling is de novo.
Since TMTV's claim to copyright runs through Jiménez and
Morales, the first question is whether they or Logroño should be
viewed as the creator of the original scripts. Jiménez and Morales
say that once the condominium setting was agreed upon, they wrote
the initial three scripts, framing the plots and dialogue and
drawing in part on stock characters used in previous projects in
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which the team had participated. Logroño says that he outlined the
plots and rewrote the scripts.
Ordinarily, a credibility contest means that the case
must be tried but, in this instance, Logroño's claim to have
substantially rewritten the scripts is refuted by comparing the
originals
and
the
final
product.
As
for
Logroño's
supposed
outlining of the plots, he has pointed to no writing--neither any
written outline by him nor any notes taken by anyone at the
original meeting--that reflects anything like an outline of the
scripts.
At best, Logroño's version would mean that he suggested
some general ideas for plots and possible stock characters for the
initial scripts.
One of the axiomatic requirements for copyright is that
the author's work be "fixed."
17 U.S.C. § 102(a).
Copyright is a
protection afforded to the definite expression of ideas but not the
ideas themselves.
See, e.g., Cmty. for Creative Non-Violence v.
Reid, 490 U.S. 730, 737 (1989); Erickson v. Trinity Theatre, Inc.,
13 F.3d 1061, 1071 (7th Cir. 1994).
On this record, the district
court properly found that there was no case on liability for a
jury.
Scott v. Harris, 550 U.S. 372, 380 (2007).2
2
Nimmer raises the possibility of joint authorship in a case
where one party supplies the plot ideas and another writes them
down, 1 M. Nimmer & D. Nimmer, Nimmer on Copyright § 6.07[A][3][a],
at 6-21 (rev. ed. 2009); but it is not certain that this suggestion
is consistent with authorities like Reid and anyway Logroño is not
arguing that the parties aimed at joint authorship.
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Logroño claims to have suggested the security guard and
other characters; but nothing in the record indicates that they had
the delineation needed to make them subject to copyright.
Stock
characters, like stock scènes à faire, are not subject to copyright
protection.
Nichols v. Universal Pictures Corp., 45 F.2d 119, 121
(2d Cir. 1930), cert. denied, 282 U.S. 902 (1931); 1 P. Goldstein,
Goldstein on Copyright § 2.7.2, at 2:91-93 (3d ed. 2005); cf.
Coquico, Inc. v. Rodríguez-Miranda, 562 F.3d 62, 68 (1st Cir.
2009).
So even if Logroño suggested
general plot ideas and stock
characters, his claim to authorship of the scripts still fails.
Positing Jiménez and Morales as the authors, ownership
must still be traced to TMTV.
Although the copyright ordinarily
vests in the initial author or authors, 17 U.S.C. § 201(a), TMTV
claims that the three scripts fall within the work "made for hire"
rubric, id. § 201(b), meaning that the original production company
would be considered the author. The district court agreed and, the
original production company having assigned its rights to TMTV, the
court treated TMTV as the copyright owner.
TMTV II, 453 F. Supp.
2d at 381-82; TMTV I, 345 F. Supp. 2d at 206-07.
Jiménez and Morales confirmed in depositions that this
was their own oral understanding with the production company; but
the
statute
requires
express
agreement
in
a
signed
written
instrument, see 17 U.S.C. § 101 (definition); and the circuits are
divided as to whether the language and policy require the writing
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before the creation or at least the completion of the work.3
But
even assuming that the rights remained with the scriptwriters,
before
this
case
began
they
conveyed
(in
§ 204(a)) whatever rights they had to TMTV.
writing,
17
U.S.C.
We may rely on this
assignment even though the district court did not.
Torres v. E.I.
Dupont de Nemours & Co., 219 F.3d 13, 18 (1st Cir. 2000).
Logroño next argues that he participated heavily in
writing later scripts and that the district court's conclusion that
these scripts were derivative works of the first three was cursory
and unsupported.
See TMTV I, 345 F. Supp. 2d at 207-08.
But this
was not his theory in the district court and so is forfeit,
Santiago-Sepúlveda v. Esso Standard Oil Co. (P.R.), No. 09-2312,
2011 WL 1548933, *3 (1st Cir. Apr. 26, 2011); nor, given the full
scale development of the show in the first three scripts, would
this new take be persuasive.
The
second
element
in
the
liability
claim
is
infringement, which requires proof that actual copying occurred and
that
the
copying
was
"substantially similar."
so
extensive
that
the
two
works
are
Segrets, Inc. v. Gillman Knitwear Co.,
3
Compare Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d
410, 413 (7th Cir. 1992) (written work-for-hire agreement must
precede creation of work), and Gladwell Gov't Servs., Inc. v. Cnty.
of Marin, 265 F. App'x 624, 626 (9th Cir. 2007) (same), with
Playboy Enters., Inc. v. Dumas, 53 F.3d 549, 559 (2d Cir.) (written
agreement might postdate creation if "memorializing" earlier oral
agreement), cert. denied, 516 U.S. 1010 (1995). See also 1 Nimmer
& Nimmer, supra, § 5.03[B][2][b], at 5-56.
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207 F.3d 56, 60 (1st Cir.), cert. denied, 531 U.S. 827 (2000).
However, Logroño obviously had access to the original scripts and
based El Condominio upon them, bringing with him a number of the
actors.
The
initial
characters'
move
to
advertising
campaign
episode
a
new
invited
of
El
building;
viewers
Condominio
and
to
the
mentioned
El
reconnect
the
Condominio
with
their
favorite characters at a new location.
So copying is not in doubt and the issue is substantial
similarity, which requires comparing the expressive elements of the
copyrighted work contributed by the author--the components alone
subject
to
copyright
infringing work.
protection--with
those
of
Yankee Candle, 259 F.3d at 33.
the
allegedly
No infringement
claim lies if the similarity between two works rests necessarily on
non-copyrightable
aspects
of
the
original--for
example,
"the
underlying ideas, or expressions that are not original with the
plaintiff." Matthews v. Freedman, 157 F.3d 25, 27 (1st Cir. 1998);
accord Johnson v. Gordon, 409 F.3d 12, 19 (1st Cir. 2005).
Infringement can occur where--without copying a single
line--the later author borrows wholesale the entire backdrop,
characters, inter-relationships, genre, and plot design of an
earlier work.4
Imagine, for example, that the first Sherlock
4
Such an ensemble may be protected by copyright, when reduced
to expression in a book or script, even though it may itself
contain non-copyrightable elements, such as stock characters
borrowed from prior works. See, e.g., Barris/Fraser Enters. v.
Goodson-Todman Enters., Ltd., No. 86 Civ. 5037 (EW), 1988 WL 3013,
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Holmes stories had been penned and copyrighted last year by Sir
Arthur Conan Doyle, and Logroño had then written his own sequels
carrying everything forward into a new plot.
See, e.g., Anderson
v. Stallone, No. 87-0592 WDKGX, 1989 WL 206431, at *8 (C.D. Cal.
Apr. 25, 1989).
Here, we agree with the district court that
the similarities between the two programs are
so striking that there is no doubt that "El
Condominio"
is
.
.
.
an
unauthorized
derivative work.
In effect . . . both
programs are the same with only a difference
in name and transmitted via a different
channel. Specifically, the setting, character
names,
costumes,
character
interactions,
comedy line, mood, [and] camera angles are
almost identical in both sitcoms.
TMTV I, 345 F. Supp. 2d at 213.
Logroño's claimed differences between the two shows are
not significant. For example, although the action in El Condominio
unfolds largely in a condominium building lobby virtually identical
to the lobby setting in 20 Pisos, the second sitcom also added some
scenes in a laundry room and the handyman's space; so, too, some
characters are given more dialogue or minor variations in character
traits (e.g., a new hearing problem).
are not a defense.
Such trivial modifications
Cf. Coquico, 562 F.3d at 68; Matthews, 157 F.3d
at 28.
at *5 (S.D.N.Y. Jan. 4, 1988) ("[E]ven though a television game
show is made up entirely of stock devices, an original selection,
organization, and presentation of such devices can nevertheless be
protected, just as it is the original combination of words or notes
that leads to a protectible book or song.").
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Liability for copyright violation being established, we
turn to damages. The jury awarded $772,079, but the district judge
reduced this figure by $700,000 for the settlement payment TMTV
received from Televicentro. Logroño argues that all of the damages
awarded by the jury should have been erased by the settlement;
TMTV, as cross-appellant, claims that none of the damages awarded
by the jury should have been reduced by the settlement payment.
The
acts
of
infringement
by
the
defendants
and
by
Televicentro are not identical but they are entangled: Logroño and
his
production
company
produced
the
infringing
programs and Televicentro broadcast them.
El
Condominio
In this case, TMTV's
theory of damages at trial was that the infringement diverted from
TMTV potential licensing royalties; this was patently a claim for
plaintiff's damages rather than defendants' profits.5
We start with the defendants' claims.
The defendants
make two different arguments for their view that the prior TMTVTelevicentro settlement barred any recovery at trial. The first is
that the settlement constituted a release of claims against any
available party who could be charged with infringement based on the
same episode; the second, that the judgment entered upon the
5
The Copyright Act of 1976 allows a party who recovers its
actual damages to recover any profits made by the infringers, at
least to the extent that the infringers' profits are not already
"taken into account in computing the actual damages." 17 U.S.C.
§ 504(b); see also 4 Nimmer & Nimmer, supra, § 14.01[A], at 14-7.
TMTV agreed before trial to drop any claim it may have had to
recover the defendants' profits.
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settlement is res judicata, precluding any further claims against
the defendants.
Older common law doctrine tended toward the view that a
settlement with one tortfeasor extinguished claims against other
joint tortfeasors responsible for the same harm--although who was
a joint tortfeasor and what constituted the same harm could be
fraught questions; but the modern view is strongly in favor of
treating a settlement with one joint tortfeasor as releasing the
others
only
if
the
parties
to
the
settlement
so
intended;
otherwise, the settlement becomes an offset against later judgments
if needed to avoid double recovery.6
The TMTV-Televicentro settlement, as an agreement, is
arguably interpreted under Puerto Rico law, Great Clips, Inc. v.
Hair Cuttery of Greater Bos., L.L.C., 591 F.3d 32, 35 (1st Cir.
2010), although federal law might be thought to bear on whether a
federal judgment incorporating a settlement should reduce a later
federal judgment on a federal claim, Singer v. Olympia Brewing Co.,
878 F.2d 596, 599-600 (2d Cir. 1989), cert. denied, 493 U.S. 1024
(1990).
But the question of which law applies is academic here,
6
See Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S.
321, 343-47 (1971) (release); McDermott, Inc. v. AmClyde, 511 U.S.
202, 207-11 (1994) (credit for settlement).
See generally
Restatement (Second) of Judgments § 50 (1982); Restatement (Second)
of Torts §§ 885-886 (1979); W. Keeton et al., Prosser and Keeton on
the Law of Torts §§ 48-49, at 330-35 (5th ed. 1984).
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because both Puerto Rico and federal law follow the modern approach
in looking to the intent of those who made the settlement.7
The
defendants
claim
that
TMTV's
acceptance
of
the
settlement payment bespeaks an intent to relinquish claims against
non-settling tortfeasors, absent an express reservation of rights.
In some situations, a settlement with a joint tortfeasor might
suggest such an intent, see Keeton, supra, § 49, at 335--for
example, a release discharging "any and all persons" potentially
liable on the stated claims.
But the opposite is often more
plausible: frequently, the plaintiff gives a break to the first
settling defendant, puts some money in the bank, and aims for a
higher judgment against non-settling defendants.
If the release
were for all, a larger settlement would be demanded.
Here, the settlement itself was apparently oral and TMTV
denies any such intent to release others besides Televicentro. The
defendants--on whom the burden of proof falls to prove release,
Fed. R. Civ. P. 8(c)--point to nothing to suggest that Televicentro
had such an intent.
Indeed, the defendants do not even suggest a
7
Compare BUC Int'l Corp. v. Int'l Yacht Council Ltd., 517 F.3d
1271, 1276-79 (11th Cir. 2008), and Screen Gems-Columbia Music,
Inc. v. Metlis & Lebow Corp., 453 F.2d 552, 554 & n.2 (2d Cir.
1972), with Vernet v. Serrano-Torres, 566 F.3d 254, 260-61 (1st
Cir. 2009) (citing Merle v. West Bend Co., 97 P.R. Dec. 403
(1969)), Río Mar Assocs., LP v. UHS of P.R., Inc., 522 F.3d 159,
164-67 (1st Cir. 2008) (citing Szendrey v. Hospicare, 158 P.R. Dec.
648 (2003)), and Ortiz v. Banco Popular de P.R., 934 F. Supp. 29,
32 (D.P.R. 1996) (citing Merle, 97 P.R. Dec. 403).
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plausible reason why Televicentro should have wished to pay a
larger settlement in order to protect the defendants in this case.
Turning then to the judgment entered pursuant to the
Televicentro settlement, it says that the $700,000 payment is made
"in
satisfaction
of
all
causes
of
action
identified
Complaint [against Televicentro] and its amendments."
in
the
The claims
in that complaint identified acts by Televicentro, including the
broadcast of episodes of El Condominio, as alleged violations of
TMTV's copyright based on the original scripts; but the complaint
asserted no claims against the present defendants based on their
production of the shows.
A
judgment
has
the
meaning
(objectively
determined)
intended by the court that framed and entered it, cf. Concilio de
Salud Integral de Loíza, Inc. v. Perez-Perdomo, 625 F.3d 15, 19-20
(1st Cir. 2010); but where the judgment is based on a settlement,
courts may look to the intent of the settling parties, 18A C.
Wright, A. Miller & E. Cooper, Federal Practice and Procedure
§ 4443, at 262 (2d ed. 2002); cf. Hermes Automation Tech., Inc. v.
Hyundai Elecs. Indus. Co., 915 F.2d 739, 751 n.10 (1st Cir. 1990).
Here, nothing shows that either the judge who entered the prior
judgment or the parties to that case intended to release anyone
else.
The result is the same if the settlement aspect is
ignored and formal res judicata rules are applied to the judgment.
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Because no issues were adjudicated in the settled case, issue
preclusion
is
irrelevant
and
the
concern
is
only
with
claim
preclusion. Classically, claim preclusion applies only where there
is (1) a prior final judgment on the merits (2) on the same or
sufficiently identical claims (3) between the same parties or their
privies.
Airframe Sys., Inc. v. Raytheon Co., 601 F.3d 9, 14 (1st
Cir. 2010).
Whether or not the defendants are treated as joint
tortfeasors, they were not parties to the settled case and are not
in privity with Televicentro.
See Taylor v. Sturgell, 553 U.S.
880, 894 (2008). Claim preclusion extends beyond parties and their
privies only in unusual circumstances;8 consider, for example,
a
plaintiff, unsuccessful against an initial defendant, seeking to
litigate
identical
claims
against
new
but
closely
related
defendants. Negrón-Fuentes v. UPS Supply Chain Solutions, 532 F.3d
1, 10 (1st Cir. 2008).
Eliminating entirely the party or privy condition would
require that whenever a plaintiff sued a defendant, the plaintiff
also sue in the same action all other defendants against whom the
plaintiff might have related claims.
No such compulsory joinder
requirement appears in the Federal Rules of Civil Procedure or
8
See FleetBoston Fin. Corp. v. Alt, 638 F.3d 70, 80-81 (1st
Cir. 2011); Airframe Sys., 601 F.3d at 17-18; In re El San Juan
Hotel Corp., 841 F.2d 6, 10-11 (1st Cir. 1988); see also Gambocz v.
Yelencsics, 468 F.2d 837, 842 (3d Cir. 1972).
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elsewhere. Cf. Restatement (Second) of Judgments, supra, § 49. If
such a rule were ever adopted--and this itself would be a debatable
choice--fairness
would
require
advance
warning
to
potential
plaintiffs and probably major qualifications on the requirement
itself.
As for TMTV's objection to the offset, the modern view,
as already stated, is that an offset is conventional where needed
to prevent recovering twice for the same harm.
There are other
solutions apart from a dollar-for-dollar reduction of the judgment
by
the
amount
proportional
of
the
regime
admiralty cases.
settlement,
that
the
including
Supreme
Court
a
has
more
complex
employed
in
See McDermott, 511 U.S. at 211-17; cf. Río Mar
Assocs., 522 F.3d at 166-67 (Puerto Rico law).
But neither side
argues here that some other method should be used.
Rather,
TMTV's
claim
is
that
the
reduction
is
not
warranted because (it asserts) the settlement was for a different
harm, in that Logroño prepared a derivative work, 17 U.S.C. §
106(2), while Televicentro publicly transmitted it, id. § 106(4).
True, some of the infringing acts differed: Logroño acted and wrote
scripts; the television company broadcast the programs.
But the
damages were (on TMTV's own theory) the same harm: the lost
royalties that could have been earned by TMTV for the production
and broadcast of the El Condominio programs if TMTV's right had
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been respected instead of infringed. Production and broadcast were
two necessary, sequential steps needed to cause the same damage.
TMTV also says that the Televicentro settlement was for
Televicentro's profits rather than TMTV's damages. Although damage
liability is joint and several, Screen Gems, 453 F.2d at 554,
liability for profits is several only, MCA, Inc. v. Wilson, 677
F.2d 180, 186 (2d Cir. 1981).9
But nothing supports TMTV's claim
that the Televicentro settlement was, sub silentio, restitution of
profits but not compensation of actual damages. Indeed, the damage
expert in both cases was the same.
In sum, the district court's
treatment of the settlement was correct.
The defendants argue lastly that the district court erred
in its award of prejudgment interest (5 percent on the full jury
damage award up to settlement and thereafter only on the balance).
The defendants say that the Copyright Act does not authorize the
award of prejudgment interest and that, if the statute does permit
such an award, the equities do not favor an award here or at least
the award should have been made at a lower rate of interest.
The
prejudgment
Copyright
interest
but
Act
does
authority
not
for
expressly
such
an
authorize
award
can
be
inferred, where appropriate, from congressional purpose and general
9
While separate profits of two infringers might well be
recovered without duplication, a copyright plaintiff may recover
actual damages and the infringers' profits only to the extent that
profits are not subsumed in actual damages. 17 U.S.C. § 504(b).
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principles.
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Rodgers v. United States, 332 U.S. 371, 373 (1947).
Here, as actual damages were calculated, TMTV was deprived of
royalties that would have been due had the defendants produced the
infringing programs under license.
Prejudgment interest dating
from the infringements compensated the plaintiff for the time value
of monies it should have had--just as if a contract debt had not
been paid on time.
Conversely, the defendants had the use of additional
funds--whatever
portion
of
their
assets
corresponded
to
such
royalties--during the period before the judgment, so an award of
prejudgment interest also avoids unjust enrichment.
Cf. Frank
Music Corp. v. Metro-Goldwyn-Mayer Inc., 886 F.2d 1545, 1552 (9th
Cir. 1989), cert. denied, 494 U.S. 1017 (1990).
Because the
Televicentro settlement provided TMTV with most of the deficiency
from that time forward, the defendants' interest obligations on the
reduced balance give them a slight windfall--although not at TMTV's
expense.
Our own case law treats an award of prejudgment interest
in such cases as a matter for the informed discretion of the
district court.
See John G. Danielson, Inc. v. Winchester-Conant
Props., Inc., 322 F.3d 26, 51 (1st Cir. 2003).10
10
Given the range
The case law in other circuits is too various to summarize,
but broadly speaking a number of circuits support prejudgment
interest awards for copyright infringement; and circuit cases where
such awards have been disallowed do not in general apply a
categorical ban. Compare, e.g., McRoberts Software, Inc. v. Media
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of circumstances and the mix of motives for such awards, this
flexibility may make sense.
Certainly on the present facts there
was no abuse of discretion in making the award or in limiting it in
the fashion adopted by the district judge.
For
post-judgment
interest
on
federal
judgments,
a
uniform federal rate applies by statute, 28 U.S.C. § 1961 (2006)
(weekly
average
yield
bills),
but
default
no
of
one-year
federal
constant
rate
maturity
exists
for
treasury
prejudgment
interest; here, the district judge applied the prevailing rate of
5 percent used in Puerto Rico courts for both pre- and postjudgment interest.
P.R. Laws Ann. tit. 32, App. III, R. 44.3
(2000). The federal post-judgment section 1961 interest rate would
have been approximately 0.5 percent when judgment was entered in
January 2009.
The defendants claim that it was obligatory or at least
more equitable to use the lower federal rate even though it is
designed
for
post-judgment
interest.
The
considerations
are
somewhat different where, absent a stay or bond, the successful
plaintiff can effectively require prompt payment, see Fed. R. Civ.
P. 64(b), and the present federal rate is depressed by current
monetary policy designed to combat recession.
The choice of the
100, Inc., 329 F.3d 557, 572-73 (7th Cir. 2003) (upholding award),
with Robert R. Jones Assocs., Inc. v. Nino Homes, 858 F.2d 274,
277, 282 (6th Cir. 1988) (vacating award). See generally 4 Nimmer
& Nimmer, supra, § 14.02[C][1], at 14-31 to -34.
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local rate, like the award itself, was within the sound discretion
of the district judge.
E.g., Colon Velez v. P.R. Marine Mgmt.,
Inc., 957 F.2d 933, 941 (1st Cir. 1992).
Five percent is by
historical standards hardly exorbitant.
The last issue is attorneys' fees.
Ordinarily, the
prevailing party in a copyright case can be awarded fees "[e]xcept
as otherwise provided by" the statute.
17 U.S.C. § 505.
Here,
such an award was barred by statute because the copyright for the
scripts was not registered in a timely fashion.
Id. § 412; see,
e.g., Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996, 1012 (2d Cir.
1995) (vacating fee award). TMTV does not dispute that the statute
barred such a recovery on TMTV's own claims against the defendants.
Instead, TMTV argues that it was also the prevailing
party as to Logroño's counterclaim, and so entitled to recover its
attorneys' fees attributable to defending against this claim.
The
argument--unpromising in any event--is forfeit, Dillon v. Select
Portfolio Servicing, 630 F.3d 75, 80 (1st Cir. 2011), having first
been made in a motion for reconsideration of the district court's
denial of TMTV's request for attorneys' fees.
The district court's judgment is affirmed.
to bear its own costs on these cross-appeals.
It is so ordered.
-22-
Each side is
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