Laura Larson v. Warner Bros Entertainment, Inc, et al

Filing 5

Filed (ECF) Appellees DC Comics and Warner Bros. Entertainment, Inc. Motion to dismiss for lack of jurisdiction. Date of service: 06/28/2011. [7801117]--[COURT UPDATE : Spread filing to 11-56034. Resent NDA. 06/28/2011 by TW] (DP)

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EXHIBIT J Cas 2:04-cv-08400-0DW-RZ ( , 1 2 3 4 5 6 Document 339 Filed 07/21/2008 Page 1 of 101 Marc Toberoff �CA State Bar No. 188547) Nicholas C. Wi liamsor:JfA State Bar No. 23 1 124) LAW OFFICES OF M C TOBEROFF, PLC 2049 Century Park East, Suite 2720 Los Angeles, CA 90067 Telephone: �31O) 246-3333 FacsImile: f lO) 246-3101 E-mail: M oberoff@ipwla.com Att�s for Plaintiffs and Counterclaim Defendants JO E SIEGEL and LAURA SIEGEL LARSON 7 UNITED STATES DISTRICT COURT 8 CENTRAL DISTRICT OF CALIFORNIA- EASTERN DIVISION 9 10 11 12 13 ( " 14 15 16 17 18 19 20 21 22 23 24 25 26 SIEGEL, an individual; and LAURA SIEGEL LARSON, an individual, Plaintiffs, vs. JOANNE Case No. CV 04-8400 SGL (RZx) [Honorable Stephen G. Larson] PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES FILED PURSUANT TO THE COURT'S . JULY 3, 2008 ORDER WARNER BROS. ENTERTAINMENT INC., a corporation; TIME WARNER INC.; a [Complaint filed: October 8, 2004] corporation; DC COMICS, a general D�te: AUdWst 1 1, 2008 TIme: 3: p.m. partnership; and DOES 1-10, Place: Courtroom 1 eclaration of Marc Toberoff Defendants. ng to the Dec Wotices of LOdtfiiamson filed faration of Nicholas WI manually; Declaration of Nicholas Williamson and Declaration of Keith Adams filed electronically] DC COMICS, vs. Counterclaimant, JOANNE SIEGEL, an individual; and LAURA SIEGEL LARSON, an individual, Counterclaim Defendants. 27 C 28 PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 499 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 2 of 101 1 TABLE OF CONTENTS 2 INTRODUCTION ................................................................................................ 1 ARGUMENT 3 I. UNDER APPLICABLE STATE LAW GOVERNING TENANCIES IN COMMON, DEFENDANTS MUST ACCOUNT FOR ALL PROFITS FROM SUPERMAN WITHOUT ANY "APPORTIONMENT" .............. 3 A. Plaintiffs' Accounting Claim Is Governed by State Law Re: Tenancies in Common, Not by Federal Copyright Law ................. .4 B. Under California Law Governing Tenancies in Common, Improvements Inures to the Benefit of All Co-Owners.................. .4 C. Defendants Cannot Use Federal Coryright Infringement Law to Reduce Defendants' State-Governea Accounting Obligations ....... 5 1. Apportionment Would Function Inequitably in this Action 7 II. DEFENDANTS BEAR THE BURDEN OF PROVING THE SCOPE OF ANY APPORTIONMENT APPLICABLE TO SUPERMAN PROFITS 8 III. AN ACCOUNTING AND DEFENDANTS' AFFIRMATIVE APPORTIONMENT DEFENSE REQUIRE A JURY TRIAL ............... 10 A. The Right to Jury Trial Attaches to an Accounting for Profits ............................................................................................. 1 0 1. In Federal Court the Fundamental Right to a Jury Trial Is To Be Liberally Construed in All Cases .............................. 1 0 2. Federal Courts Apply Federal Law in Assessing the Right to a Jury Even When the Claim Arises Under State Law ... 1 1 3. An Accounting for Profits Is Legal Both in Terms of the Relief Sought and its Historical Derivation ......................... 1 1 4. Plaintiffs' Claim for Profits Is Functionally Eguivalent to an Accounting of Profits in a Copyright Infringement Case to Which the Constitutional Right to a Jury Trial Applies ................................................................................. 13 B. The Right to Jury Trial Attaches to Defendants' Apportionment Defense, Imported From Section 504(b) of Copyright Act ........... 14 IV. A WORK-BY-WORK APPORTIONMENT ANALYSIS IS PROCEDURALLY IMPROPER, PRACTICALLY UNWORKABLE, AND LEGALLY UNNECESSARy........................................................ 1 5 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 C) ........................................................................................................ .............................................................................. .................................................................................................... 28 1 ; ( ,. �/ C) TABLE OF CONTENTS EXHIBIT J - 500 Cas ( 2:04-cv-08400-0DW-RZ Document 339 A. 1 2 5 2. 6 B. 10 11 13 14 15 16 17 18 19 20 26 27 c 28 Defendants' Proposed Work-by-Work Analysis Would Result in a Tremendous Waste of Judicial Resources ......... 1 8 2. Defendants' Failure to Provide Financial Documents on Individual Works Renders A Work-by-Work Analysis Moot. . . . . 19 t 3. ��\t;�k�"t���t�JE�T��:� s������. ���. ��. ��. ����. �. 20 C. A "Template" Approach to Apportionment Is Appropriate .......... 2 1 1. A "Template" A froach Can Generate an i p i n t � �� &�� {y�w.-�.!.��� .���.���?.���::.�. �. ����. . ��........ 21 2. The Iconic Core Elements of the Superman Character Have Remained Largely Unchanged Since Their Inception .............................................................................. 23 3. Public Polic), and the Legislative Objectives of the Termination Provision Militates Against a Work-By-Work Analysis ............................................................................... 25 4. Plaintiffs Request that the Court Order the Use of a "Template" in Any Apportionment Analysis ...................... 27 DEFENDANTS IMPROPERLY SEEK SUMMARY JUDGMENT ON WORK FOR HIRE ISSUES PRESERVED FOR TRIAL ................ 27 A. Defendants Improperly Seek Partial Summary Judgment on "Work for Hire" Issues Well After The Court-Imposed Deadline for Dispositive Motions ....................................................................... 27 B. Defendants Err in Arguing That They May Move the Court on the "Work for Hire" Issue in the Form of a Motion In Limine ...... 29 The "Works Made for Hire" Issues Implicate Numerous Genuine c. Issues of Material Fact That Prohibit S-ummary Judgment ........... 30 ......... 12 25 �rU��!(y-:��!����������.��.�����.��.��:.����.������ 18 1. 9 24 The Use of a Special Master to Conduct an "Apgortionment" Analysis Would Impn�perly Intrude On The Role Of The Jury In Violation F.R. C.P. 53 .................. 1 6 n�f(ftfo�����k�t�����.i. �. ���. ���. �. ��. �. ������..�. � 17 ... 8 23 of 101 ... 7 22 Page 3 The Appointment of a Special Master to Conduct a Work-by­ Work Apportionment Aitalysis Would Be Completely Improper 16 1. 4 21 07/21/2008 ....................................... .................................................. 3 ( Filed V. ............................. ......................... ....... .......... 11 TABLE OF CONTENTS EXHIBIT J - 501 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 4 of 1 0 1 The "Instance" Component of the Test . 31 32 The "Expense" Component of the Test.. 2. C) 2 3. "Work for Hire" Turns on Mutual Intent of the Parties 33 3 4. Summary Judgment on "Work for Hire" Defense Is 4 Disfavored 34 DEFENDANTS MUST ACCOUNT TO PLAINTIFFS FOR PROFITS 5 VI. FROM ANY "PRE-TERMINATION" DERIVATIVE WORKS 6 THAT ARE ALTERED POST-TERMINATION 35 7 A. Defendants May Not Create New Derivative Works on the Basis of Pre-Termination Works Without Accounting to Plaintiffs 36 8 1. Defendants Must Account for any Derivative Work 9 Comp'leted After April 1 6, 1 999, the Effective Termination Date . 36 () ! 2. Material Change to a Pre-termination Derivative Work 11 Establishes a New Derivative Work for which Defendants Must Account. 37 12 B. Defendants Will Clearly Have to Account for Many Postnnination Releases of Pre-Termination Superman Works 3 8 Common Changes In DVD Releases of Pre-termination 1. 38 Superman Works Result In New Derivative Works C) 511 � Key Examples of DVD Releases of Pre-termination Works Resulting in New Derivative Works ........... . 4 1 The Court Should Set Forth Guidelines Governing The 2. 1711 "Derivative Works Exception" On Which Defendants Bear the Burden ............................................................................42 . (S CANNOT USE THEIR ALLEGED "TRADEMARKS" ,:, vALUE OR ENCUMBER PLAINTIFFS' COPYRIGHTS .43 A. Defendants Cannot Prevent Plaintiffs From Using The Name Superman In Exploiting Action Comics No. 1 or Derivative Works 47 DEFENDANTS MUST ACCOUNT TO PLAINTIFFS FOR THE USES OF COPYRIGHT THAT PERVADE DEFENDANTS' EXPLOITATION OF THEIR ALLEGED TRADEMARKS .49 A. Defendants Must Account for "Mixed Uses" of Copyright and 49 Trademark B. Defendants' Trademarks Are Derivative Works of Action Comics No. 1, Constituting a "Mixed Use" of Copyright and Trademark . . 51 1. 1 ................. ............. ............................. ...... ............................................................................ ................................... ....... ..................................... ( ........................... I ...................................................................... 11 , ........ ........... :1. ....... ........................................................................... ................. ...................................................................................... ................................................................... ...... .... 111 TABLE OF CONTENTS EXHIBIT J - 502 Cas 2:04-cv-OB400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 c 14 15 16 17 18 19 20 21 22 23 24 25 26 27 c 28 1. Document 339 Filed 07/21/200B Page 5 of 101 Defendants' Trademarks in Graphic Depictions of Superman Necessarily Constitute Derivative Copyrights and/or "Mixed Uses" The Telesco)?ing "Superman" Moniker Comprises a "Mixed Use ofTracfemark and Copyright.. ........................................ 2. ....................... 52 53 Defendants Superman "Crest" is a CopY!ighted Derivative Work of Superman's "Crest" in Action Comics No. 1 For Which Defendants Must Account 55 4. Defendants' Merchandise Routinelx Reflects Derivative §gE�g�k� �;g�:��!:a��.?�.�.'.�����.���::.�� 57 The Court Should Rule That Defendants Must Account For c. Mixed Uses of Trademark and Copyright 58 IX. DEFENDANTS' ADS HAVE NO EFFECT ON PLAINTIFFS RECAPTURED COPYRIGHT IN ACTION COMICS NO. 1 58 A. Plaintiffs' Recaptured Copyright In Action Comics No. 1 Is Not Encumbered By The Ads 58 1. Publication of the Ads "Protected" the Underlying GrajJhic Elements in the Cover of Action Comics No. I But Did Not Itself Convey An Exclusive Copyright in Such Underlying Elements 59 2. As the Ads Were Derivative Works of Action Comics No. 1 , They Cannot Encumber It 63 a. The Variations in the Advertisement are Trivial 63 b. An Unwarranted COffi:right In The Ad's "Cover i%?e;����IWO;k� :������.���.���:.���:..i.�.��� 65 c. Because OwnershiIl of the Ads and Action Comics No. 1 Has Diverged, A Derivative Works Analysis Must Apply . . 66 B. Defendants May Exploit The Derivative Ads Which Were Never Subject To Recapture Under Section 304(C), But May Not Create New Superman Derivative Works Based On The Ads 68 C. Defendants, At Best Hold A COIlyright In The "Image" Of The Action Comics No. I Cover "As DepIcted" In The Ad, Devoid Of Superman Context 69 1. The Copyright In A Pictorial Work Protects Only Its Visual Content And Objective Appearance 70 2. Defendants Cannot Own The Basic Ideas Or Subject Matter Depicted In The Ad 70 3. ....................................... ............ ..................................... ................. ............................................................... .............................................................................. ................................................ ...... ...... ... .................................. ...................................... ...... .................................................................... ........................ .................................................. IV TABLE OF CONTENTS EXHIBIT J - 503 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 Document 339 Filed 07/21/2008 Page 6 of 1 0 1 Publicati'On 'Of the Ad Did N'Ot "C'OPyright" Superman Elements D. The Terminati'On N'Otices Pr'Ovided Defendants With Ample N'Otice X. THE ORDER'S HISTORICAL SUMMARY INCLUDES CONTESTED FACTS FOR TRIAL A. The Order C'Oul.d Be Misinterpreted As "Ruling" 'On Genuine Issues of Matenal Fact B. Elements Listed in the Order as Being the Preserve 'Of the Defendants First Appeared in Action Comics No. 1 C. Plaintiffs Did N'Ot Receive Adequate N'Otice D. Defendants Failed t'O Offer Admissible Evidence Sufficient t'O Meet Their Burden 'Of Pr'O'Of Regarding Superman's P'Owers CONCLUSION 3. .............................................................................. ..................................................................... ............ ....................................................... ........... ........................................................ ...................... ................................. ........ ................................................................................................... 71 72 c) 74 74 75 77 78 80 12 13 14 C) 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v (J TABLE OF CONTENTS EXHIBIT J - 504 Cas 2:04-cv-OB400-0DW-RZ ( 1 2 3 4 Filed 07/21/200B Document 339 Page 7 of 101 TABLE OF AUTHORITIES Pages Federal Cases Abkco Music, Inc. v. Harrisongs Music, Ltd, . .. 508 F.Supp. 798 (S.D.N.Y. 1981) ............ ....... � ... . . .......................................... 24 5 Abli, Inc. v. Standard Brands Paint Co. , 6 7 8 9 10 323 F.Supp. 1400 (C.D. Cal. 1970) .................................................................... 56 Aerospace Services Intern. v. LPA Group, Inc. , 57 F.3d l002 (l lth Cir. 1995) ............................................................................ 22 1O:{?3dnti¥'{(9:/8i:.e{fg�r�� ����:. ��' �.. !!.������: .. . ...... . ......... . ...... . ......... 12 Anderson v. Stallone, 1 1 u.S.P.Q.2d (BNA) 1 161 (C.D. Cal. 1989) .................................................... 48 1 1 Associated Press v. Dist. Court/ Fifth Judicial Dist. o or /Col., 12 13 c 14 15 16 542 U.S. 1301 (2004) ......................................................................................... 29 tJff.l�·7g0(6fhvC r.2Jo5r�� �����.���.�.�:�.���:� . 65 .. ....................... ............... t�9{j�s.1P5K��2)�������.���· �.. '!.�����.��.�����:.::.�.' .. . ............................. .. . 1 1 ... B ank Melli Iran v. Pahlavi 58 F.3d 1406 (9th Cir. 1995) .............................................................................. 78 17 Bartlett-Collins Co. v. Surinam Nav. Co. , 18 19 381 F.2d 546 (lOth Cir. 1 967) ............................................................................ 17 Baljac Productions Inc. v. Goodtimes Home Video Corp., . . . 160 F.3d 1223 (9th Cir. 1998) .................. .. .... ......................................... ,passim 20 Beacon Theatres, Inc. v. Westover, 21 22 359 U.S. 500 (1959) ............................................................................................ 10 Beazer East, Inc. v. Mead Corp. , 412 F.3d 429 (3d Cir. 2005) ............................................................................... 17 23 Berlin v. Lloyds Bank 24 25 26 27 c 28 1989 U.S. Dlst. LEXIS 18345 (C.D. Cal. 1 989) ................................................ 79 Berkic v. Crichton 761 F.2d 1289 (9th Cir. 1990) ............................................................................ 7 1 fif1grS;p:.9't(D.£��f9�9) .......................... . ........... . .................................. .. .. 43 . Blackman v. Hustler M agazine, Inc., 620 F.Supp. 792 (D.D.C. 1 985) .......................................................................... 24 vi TABLE OF AUTHORITIES EXHIBIT J - 505 Cas 2:04-cv-08400-0DW-RZ Page 8 of 101 Filed 07/21/2008 Document 339 1 Bose Corp. v. Jbl, Inc. , 2 3 1 12 F.Supp.2d 138 (D. Mass. 2000) ................................................................... 39 ( ) __ . Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514 (4th Cir. 2003) .............................................................................. 15 4 Bouchat v. Bon-Ton Dep't Stores, Inc., 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 506 F.3d 315 (4th Cir. 2007) 26 8 f8t;lp.3"d�ff69 (Fed. Cir. 2000) ......................................................................... .49 f5�1f�a(N5· (�7hC!i:.°r972) .. . . . . . . . . . . . . . . 17 .. .. .. ... . . . . .. .. .. ... ....... .. ...... .. ... ................. .. . . . Bras v. Bras 463 F.2d 4I3 (10th Cir. 1972) .............................................................................. 5 frbd�:fg19¥(��� tn;' 2off):.������.�!.�"!.�: . . . .... . . . . .. . . .. . . . .. . . ... ... ................ . ........ 39 BlJ!ant v. Bell Atl. M d., 288 F.3d 124 (4th Cir. 2002) .............................................................................. 79 �98��!g7'f5v(9�SCir 1993) .............................................................................. 77 . 329 F.3d 923 (7th Cir. 2003) ................................................................................ 8 C 'j Bucklew v. Hawkins, Ash & Baptie, LLP, ��rFlcIh�lo ti�ci21btzr.��:.��:.!.��:: ... ................. ... ..... . .... . . .. . . . . . .. .. ..... .... . . 68 Cambrid Lit. Properties, Ltd. v. W. Goebel Porzellan abrik G.MB.H & ge J fro ��d 77 (1st Cir. 2007) ................................................................................ .40 Camp Beverly Hills, Inc. v. Camp Cent. Park, Inc., 1982 U.S. Dlst. LEXIS 10019 (S.D.N.Y. 1982) ................................................ 54 f6rf.s�;;.el0�5fs.D1f.�.1�lt{�:..����...'...................................................... 52 ff��3l7¥(id�itf�§�),.!.��..:........................................................................... 34 24 Cavalier v. Random House, 25 ................................................................................ 297 F.3d 815 (9th Cir. 2002) .......................................................•...................... 70 Central Mills v. Iced Apparel, 1998 U.S. Dist. LEXIS 1798 (S.D.N.Y. 1998) .................................................. 56 27 Cessna Air. Co. v. Hartford Accident & Indem. Co., 28 900 F.Supp. 1489 (D. Ran. 1995) ..................................................................... .43 vii C TABLE OF AUTHORITIES EXHIBIT J - 506 Cas 2:04-cv-OS400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 23 24 25 26 27 C 28 Document 339 fff��a;19{(9��Ci�ey 9�l;�:: ��:: Filed 07/21/200S Page 9 of 1 01 .. . . 43 Classic Film Museum, Inc. Warner Bros., Inc., . 597 F.2d 13 (1st Cir. 1979) 62 Classic Media, Inc. Mewborn 2008 U.S. App. LEXIS 14755 (9th Cir. July 11, 2008) ..................................... 26 .. ............ ..................................... ... ........... v. ................................................................................. v. f8/f�tli��(91{; Ci/:200����.:.�����: . 44-45 i f46F.2d r /iJ.C. �fr.�9�-�������.�.�:.�.���....................................................4 /ss t f9/fU.S�i!f3t°[I�8§):!.��.����.�������.�.�:.�.��.�: . . 32 ............... ....................................... ................ ............................. ... Cool Fuel, Inc. Connett, 685 F.2d 309 (9th Cir. 1982) ..............................................................................78 Cordon Art B. V. Walker, 40 U.S.P.Q.2d (BNA) 1506 (S.D. Cal. 1996) ....................................................67 Cordon Holding.J3. V. Northwest Publ. Corp., 63 u.S.P.Q.2d ttlNA) 1013 (S.D.N.Y. 2002) .................................................... 67 Corwin Walt Disne)l Co., 2004 WL 5486639 (M.D. Fla. 2004) ..................................................................70 Cosmos Jewelry Ltd Po Sun Han Co., 470 F.Supp.2d 1072 (C.D. Cal. 2006) ................................................................64 Cream Records, Inc. Jos. Schlitz Brewing Co., 754 F.2d 826 (9th Cir. 1985) ................................................................................9 v. v. v. v. v. v. f6jtJ.����� (r962\::..���: . . . 12-13 e �9jSp.���;:54fcs�{5�,g� 1998) ......................................................................12 Darljag LLC Sony Corp, 49 U$.P.Q.2d (BNA) 1341 (C.D. Cal. 1998) ....................................................47 Darden Peters, 488 F.3d 277 (4th Cir. 2007) . 65 a . f3 9w S�2fc26fu)�������.�����:..������'!!:.:.���::...................................passim Davis Blige, 505 F.3d 90 (2d Cir. 2007) ... . .21 ......................................... .......... ................. .... v. v. .......................................................................... ... v. .......................................... . . ............................... . f7F�S����2t)s15·1B6tD., Cal. 1999) ....................................................................4 Vlll TABLE OF AUTHORITIES EXHIBIT J - 507 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Filed 07/21/2008 Document 339 Page 1 0 of 101 Dielsi v. Falk, 916 F.Supp. 985 (C.D. CaL 1996) ........................................................................ 6 (�_) . Dolman v. Agee, 157 F.3d 70!l (9th Cir. 1998) .............................................................................. 29 Donald v. Zack Meyer's TV Sales, 426 F.2d 1027 (5th Cir. 1970) ............................................................................63 f75n(f/�:t63�(�PC{ f96��.��: .:'���� �.����:.���:: . .. ................ . ..................... 31 Dro]2 Dead Co. v. S.c. Johnson & Son, Inc., 326 F.2d 87 (9th Cir. 1963) ....: .....................................................................54, 56 Durham Industries, Inc. v. Tomy Corp., 630 F.2d 905 (2d Cir. 1980) ......................................................................... 10, 63 e �f� F.2l;7t(9ThCi��11��2)�!.��' ���:: . . . 10 .. ....... ............... ........................... .......... �tF�S�r!. �2'(s15�t!y�r914·5L�������: ........................................................21 Edgar Rice Burroughs, Inc. v. Manns Theatres, 195 U.S.P.Q. (BNA.) 159 (C.D. CaL 1976) ........................................................47 fffFfdaJf!(2d�ir�%oof�!!:.!!..�.���:.: :������:..:���.��.����:.!.��:: . 44 C ') Entertainment Research Group, Inc. v. Genesis Creative Group, Inc., 122 F.3d 1211 (9th Cir. 1997) . . . . passim Eprad, Inc. v. DollYv Laboratories, Inc., 209 U.S.P.Q. (BNA) 238 (N.D. Ohio 1980) ...................................................... 39 Ets-Hokin v. Skvv Spirits, Inc., 225 F.3d 1068 (9th Cir. 2000) ............................................................................44 F. W. Woolworth Co. v. Contemporary Arts, Inc., 193 F.2d 162 (1st Cir. 1951)............................................................................... 71 Feist Publ 'ns, Inc v. Rural Tel. Servo Co., 499 U.S. 340 (1991) 63 Feltner Columbia Pictures, TV, 523 U.S. 340 (1998)............................................................................................ 14 .. ... ............................................. ........... ...... . .... ......... ............................................................................................ V. Kb�¥2�1 frt(fddr.�9"dg).:.��: :�:: . .. . . 6 d �85F�2� 6or�1��'ti�. i 993)............................................................................... 34 .. ................................................ IX .. .... ... . C) TABLE OF AUTHORITIES EXHIBIT J - 508 Cas 2:04-cv-OS400-0DW-RZ ( ( c 1 2 3 4 5 6 7 8 9 10 11 Document 339 Filed 07/21/200S Page 1 1 of 1 01 �721.taUtb� f9[Ifdr.¥§�f)?������������:.��.�:: ............................................. 9 Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004) ..........................................................................4, 48 Gamma Audio & Video v. Ean-Chea, 11 F.3d 1106 (lst Cir. 1993).............................................................................. .40 Gardenia Flowers, Inc. v. Joseph Markovits, Inc., 280 F.Supp. 776 (S.D.N.Y. 1968) ...................................................................... 63 Gaste v. Kaiserman 863 F.2d 1061 (2d Cir 1988) ............................................................................. 15 . Yt��3f 8.ff(lst���1��4)���:.�������.:..���:: ............................................ 9, 15 Gen. Universal Sys., Inc. v. Lee, 379 F.3d 131 (5th Cir. 2004) ..............................................................................45 Goodis v. United Artists Tel., Inc., . 12 425 F.2d 397 (2d Cir. 1970) ............................................................................... 59 13 Goodman v. Lee 14 1994 U.S. Dist. Lmas 1846 (E.D. La. 1994) .................................................... 21 Goodman v. 15 78 F.3d 1007Lee, Cir. 1996) ................................................................................4 (5th 16 17 18 19 20 21 22 23 24 25 26 27 28 198F.2(l"3�oa(fth�fr�li83�� ............................................................................ 65 ¥92TIS�3�(i989r.�������'............................................................................... 10 Griesedieck Western Brewery Co. v. Peoples Brewing Co., 56 F.Supp. 600 (D. Minn. 1944)......................................................................... 56 Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542 (9th Cir. 1990) ............................................................................ 79 Hamdad Trust v. Ajit NewSflaper Adver., Mktg. & Communs., Inc., 503 F.Supp.2d 577 (E.D.N.Y. 2007) ..................................................................49 . HaqJer House, Inc. v. Thomas Nelson, Inc., 1987 U.S. Dist. LEXIS 14132 (C.D. Cal. 1987) ................................................ 15 Harris Custom Builders, Inc. v. Hoffineyer, 92 F.3d 517 (7th Cir. 1996) 65 Hearn v. Meyer, 664 F.Supp. 832 (S.D.N.Y. 1987) ................................................................ 64, 65 .................................... ............................................ x TABLE OF AUTHORlTIES EXHIBIT J - 509 Cas 2:04-cv-OS400-0DW-RZ � 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Page 1 2 of 1 0 1 Filed 07/21/200S Document 339 �3�:1d�£ar9th·€t1��ot���:.���·..�!.���· ?f!!.:.�: . . . . . 79 ( ) Hurd v. Williams, 755 F.2d 306 (3d Cir. 1985) ...............................................................................78 In re Armco, Inc., 770 F.2d 103 (8th Cir. 1985) ..............................................................................17 Int'l Film Exchange, Ltd v. Corinth Films, Inc., 621 F.Supp. 631 �:S.D.N.Y. 1985) ......................................................................40 James River Ins. Co. v. Hebert Schenk, P. C., 523 F.3d 915 (9th Cir. 2008) ..............................................................................79 Jarvis v. K2 Inc., 486 F.3d 526 (9th Cir. 2007) ..............................................................................42 JCW Investments, Inc. v. Novelty, Inc., 482 F.3d 910 (7th Cir. 2007) ..............................................................................70 .. ....... .................... ..... .. . {!f�!l'{ifs(2�nt1�ci99����.�� �����:.����:.:.�.�:: . 1 . . .. . . 44 Jer1J!. Vogel Music Co. v. Warner Bros., Inc., 535 F.Supp. 172 (S.D.N.Y. 1982) ......................................................................60 .. . .................... .......... . .. . . . . . ... .49 C ') John G. Danielson, Inc. v. Winchester-Conant Properties, Inc., 322 F.3d 26 (1st Clr. 2003) ........................................................................... 21-22 Johnson v. Jones, 149 F.3d 494 (6th Cir. 1998) 9 Kenny v. Regis Co., 2008 U.S. DlSt. LEXIS 18373 (N.D. Cal. Mar. 10, 2008) ................................. 79 c aa . !fJ�i�2d �f {zici. 195 9) .��?'..����� ���� .: ................................................55 L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486 (2d Cir. 1976) ......................................................................... 63-64 i74��9;F(s�r/N.f�f9ffj .�:.��!�����.��.� ��:: . ... ............ .. .. .. ................... ................................................................................ .. f�ll!.{If9(19#t�.��.��:.' ............................... . ....... . .................................. . 17 .. fgS1r3ag focnidci2rts?�!����������:.:.�.�:� .... 35 Lin-Brook Builders Hardware v. Gertler, 352 F.2d 298 (9th Cir. 1965) ........................................................................31, 33 ............ 28 Xl .. .. .. .......................... (J TABLE OF AUTHORITIES EXHIBIT J - 510 Cas 2:04-cv-08400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 c 14 15 16 17 Document 339 20 21 22 23 24 25 26 27 c 28 Page 1 3 of 1 01 Livingston Morgan, 2007WL 2140900 (N.D. Cal, 2007) .................................................................. 29 Lottie Joplin Thomas Trust Crown Publishers, Inc., 456 F.Supp 531 (S.D.N.Y. 1977) ....................................................................... 24 v. v. t9¥�.i1J�11�dCi:.1';}t�r..�����.����������:.!��:: r.1Jrp v . ................................. 9-10 r Tnitpd Stntp.•. 469 U.S. 38 (1984) 29 Magic Marketing, Inc. Mailing Services of Pittsburgh, Inc., 634-F.Supp. 769 (W.D. Pa. 1980) ......................................................................63 Maljack Productions UAV Corp., 964 F.Supp. 1416 (C.D. Cal, 1997) ........................................................ 38-39. 65 Manufacturing Co. Artic Int'l, Inc., 704 F'.2d 1009 (7th Cir. 1983) ............................................................................ 38 . Marascalco Fanta.sy, Inc., 953 F.2d 469 (9th Clr. 1991) .................................................................. 20-21, 59 Martha Graham Sch. & Dance Found., Inc. Martha Graham Ctr. of Contemporary Dance, Inc., 380 F.3C\ 624 (2d Cir. 2004) .........................................................................31, 61 Marvel Characters Simon, 310 F.3d 280 (2d Cir. 2002) ...............................................................................38 May Morganelli-Heumann & Assoc., 618 F.2d 1363 (9th Cir. 1980) ...................................................................... 33-35 .............................................................................................. v. v. v. v. v. v. v. 18 MrRwpn v ritll nfNnrmnn 19 Filed 07/21 /2008 926 F.2d 1539 (10th Cir. 1991) ..........................................................................29 McRoberts Software, Inc. Media lOa, Inc., 329 F.3d 557 (7th Cir. 2003) ..........................................................................9, 15 Mertens Hewitt Assocs., 508 U.S. 248 (1993) ............................................................................................13 nkln. v. v. ��F.rll�69�9�h Cir. 2002) ............................................................................72 MfigpTct1for(9t�t:�.1�90{���:.�!.��·:..........................................................80 Mills Music Inc. Snyder, 469 U.S. 153 (1985) . .. passim v. ...................... . .... .... . ............................................. ..... Mirage Editions, Inc. Albuquerque A.R.T. Co., 856 F.2d 1341 (9th Cir. 1988) ............................................................................38 v. xii TABLE OF AUTHORITIES EXHIBIT J - 511 Cas 2:04-cv-OB400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Document 339 Filed 07/21/200B Page 1 4 of 1 01 Morrill v. Smashing Pumpkins, 157 F.Supp.2d 1120 (C.D. Cal. 2001) ..................................................................4 C) u �9If�3d £ (ifc?;.e�[f6 6n.�:: : ........................................................... 59 Multitherm CorR. v. Fuhr 1991 U.S. Dist. LEXIS 10475 (E.D. Pa 1991) ................................................... 22 Natural Resources Dej§nse Council v. Rodgers, 2005 WL 1388671 (E.D.Cal. 2005) ................................................................... 29 Nelson-Salabes, Inc., v. Morningside Dev., LLC, 284 F.3d505 (4th Cir. 2002) 9 Neva, Inc. v. Christian Dupl. In!'l, Inc., 743 F.Supp. 1533 (M.D.Fla. 1990) .................................................................... 60 Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d1099 (9th Cir. 2000) ............................................................................79 0 'Connor v. Cindy Gerke & Assoc., 300 F.Supp.2d759 (W.D. Wis. 2002) ................................................................54 Oddo v. Ries, . ..passim 743 F.2d630 (9th Cir. 1984) Pacific Serv. Stat. Co. v. Mobil Oil C0P.., 689 F.2d1055 (Temp.Emer.Ct.App. 1982)........................................................79 C) i v c �27 ¥�d 4ro §fhC!g\�9[):: . . 70 . . 48 fIf:§�;p.Sl�6(�'1N���itj4�����:.��.�:: . Pickett v. Prince, 207 F.3d402 (7th Cif. 2000) ..............................................................................56 Picture Music, Inc. v. Bourne, Inc., 314 F.Supp. 640 (S.D.N.Y. 1970) ........................................................................6 Polar Bear Prods. v. Timex Corp., 384 F.3d700 (9th Clf. 2004) ........................................................................ 14-16 Polar Bear Prods. v. Timex Corp.h 2004 U.S. App. LEXIS 22131 (9t Cir. 2004) ..................................................... 9 ................. ................................................................................ ............. ....................................................... ................ ....................................... ....... ........... �14tf:s. ygg (A�5)��:.����· .��:: . ....... ................... ............................... ................................................................ 45-46 Ouinn-Brown Pub. CorR. v. Chilton Co., rs F.Supp. 213, 214 (S.D.N.Y. 1936) ................................................................60 RDF Media Ltd. v. Fox Broad. Co., 372 F.Supp. 2d556 (C.D. Cal. 2005) .................................................................44 ( ) X11l TABLE OF AUTHORITIES EXHIBIT J - 512 Cas 2:04-cv-OS400-0DW-RZ ( 1 2 3 6 7 8 9 10 11 12 l3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ( 28 Filed 07/21 /200S Page 1 5 of 1 01 Richlin Metro-Gold�)m Mayer Pictures, Inc., 2008 U.S. App. LEXIS 12917 (9th Clr. 2008) ............................................. 61-62 Rondor Music Int'l, Inc. TVT Records LLC, 2006 U.S. Dist. LEXIS 97118 (C D Cal. 2006) .................................................. 9 v. v. . 4 Rnuln v Rus.• 5 Document 339 r.n . 886 F.2d 931 (7th Cir. 1989) .............................................................................. 22 Runge Lee, 44 1 F.2d 579, 581 (9th Cir. 1971) ................................................................ 59-60 Roy Export Co. Establishment o/Vaduz, Liechtenstein, Black Inc., A.G. Columbia Broadcasting System, Inc., 503 F.Supp. 1137 (S.D.N.Y. 1980) ....................................................................38 a ��� F�3d t85�th Cir. 2003) ..............................................................................63 Satyam Computer Services, Ltd. Venture Global Engineering, LLC, 2007 WL 18D6198 (E D Mich. 2007) ............................................................... 18 Schoenthal Irving Trust Co., 287 U.S. 92 (1932) 10 Scosche Industries, Inc. Visor Gear Inc., 121 F.3d 675 (9th Cir. 1997) ..............................................................................78 Sega Enters. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992) ........................................................................... .42 s �o!f:.3(:Ff3q2'(ftf/�i� g/fof/����.�·.������.������.�!.��l(:����������jassim Shapiro Bernstein & Co. Jerry Music Co., 221 F.2d 569 (2d Cir. 1955) .........................................................................31, 34 Shaw Lindheim, 919 F.2d 1353 (9th Cir. 1990) ............................................................................70 o f36Ii�2l4�2� C?r���79) ��������.:..���:: . 10, 24 Sheldon Metro-Goldwyn Pictures, Corp., 309 U.S. 390 (1940)............................................................................................ 13 a u o ��n::211�ts H lt�t:f i98�����.����.�!.����.����.���·� 64 Rprrip & Tnr v. v. v. . . v. .............................................................................................. v. v. v. v. ............... .................................. v. ................................. f��i�l� rJ�·c2Fc��19i�)���.�������� ����·.: 62 ����.�alr5f(� �1��li9j7) �����.��!�.��:.���:.�:.��������.:�.���:.:: passim .. .............................................. ..... XIV TABLE OF AUTHORITIES EXHIBIT J - 513 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 :: 16 17 18 19 20 21 22 23 24 25 26 27 28 Filed 07/21/2008 Document 339 Page 1 6 of 101 Siegel v. National Periodical Publications, Inc., 508 F.2d 909 (2d Cir. 1974) ...............................................................................77 Simler v. Conner, 372 U.S. 221 (1963) 11 Silverman v. CBS Inc., 870 F.2d 40 (2d Cir. 1989) ................................................................................. 63 Sobhani v. (iiJ,Radical.Media Inc., 257 F.Supp:1d 1234 (C.D. CaL 2003) ................................................................66 Spilman v. Mosby'-Yearbook, Inc., 115 F.Supp.2d lL18 (D. Mass. 2000) ...................................................................65 Stewart v. Abend, 495 U.S. 207 (1990)......................................................................................32, 60 Swirsky v. Carey, 376 F.3d 841 (9thCir. 2004) ..............................................................................71 �36f{�2�40g �t[c1�ci'964) ..............................................................................12 Taylor v. List, 880 F.2d 1040 (9th Cir. 1989) ............................................................................78 ) ............................................................................................ r9�lrS�558 �1916) ............................................................................................ 11 Three Boys Music Corp.. v. Bolton, 212 F.3d 477 (9th Cir. 2000) .............................................................. 9, 14-15, 24 Toliver v. Sony Music Ent., 149 F.Supp.2d 909 (D. Alaska 2001) .................................................................71 Towers v. TitusD 5 B.R. 786 (N. . CaL 1979) ...............................................................................12 r3t{J.f.�1(�oO·1��� ���:.!.���' . .. ....................................................................... C) 44 Turtle v. Castle Records Inc., 2004 U.S. Dist. LEXIS 29124 (N.D. CaL 2004) ................................................45 Twentieth Century Fox Film Corp. v. Entertainment Distrib., 429 F.3d 869 (9tli Cir. 2005) . . .passim I20'f.is�;i.e2Ju�t(s.l!frY�200{j .����!.������:: 54 US. v. Higginbotham, Inc., 722 F.Supp. 283 (N.D. Miss. 1989) ................; ..................................................13 ................................ .............. ...................... ....................................... nnminntnr v Fnrtnr1! Shin Rnhprt 768 F.2d I099 (9th Cir. 1985) ............................................................................ 28 C) T T 51 F. Rp.<nff xv TABLE OF AUTHORITIES EXHIBIT J - 514 Cas 2:04-cv-08400-0DW-RZ ( I 2 3 4 5 6 7 8 9 10 II 12 13 ( 14 15 16 17 18 19 20 21 22 23 24 25 26 27 c 28 Document 339 Filed 07/21/2008 Page 1 7 of 1 01 Universal City Studios, Inc. v. Kamar Industries, Inc., 217 U.S.P.Q. (BNA) 1 162 (S.D. Texas 1982) .................................................. .48 Walt Disney Prods. v. Air Pirates, 581 F.2d751 (9th Cir. 1978) .............................................................................. 70 Wang v. Chinese Dail);. News, Inc., 435 F.Supp.2d 1042 tC.D. Cal. 2006) ................................................................ 79 . Williams v . UMG Recordings 281 F. Supp. 2d 1177 (C.D. Cal. 2003) ............................................................. .45 t k . rJ§ ��2d �64 7z:Ci�.' (943) . .. 8 Winfield Coli., Ltd. . Gemmy Indus., Corp., 3 11 F. Supp. 2d 611v(E.D. Mich. 2004) ............................................................. 70 Wooddell v. International Bhd. OIElec. Workers, Local 7 1, 502 U.S. 93 (1991) 11 Woods v. Bourne Co., 60 F.3d 978 (2d Cir. 1995) ............................................................... 42, 49-50, 57 Woods v. Universal Cit;: Studios, Inc., 920 F.Supp. 62 (S.D.N.Y. 1996) ........................................................................ 70 Yang Ming Marine Transp. Corp. v. Oceanbridge Ship. Int'l, Inc., 48 F.Supp.2d 1032 (C.D. Cal. 1999) .................................................................. 78 Zuill v. Shanahan, 80 F.3d 1366 (9th Cir. 1996) ............................................................................ 4-5 ... .. ............................... ......................................... .............................................................................................. State Cases Combs v. Ritter 100 Cal.App.2d' 3 15 (1950) ........................... . ................................. . ................... .5 f4��1�/4fulj8�1999) ................................................................................... 4 Gil/mar v. Gillmor, 694 P.2d 1037 (Utah 1984)................................................................................... 5 Hermit's Glen Prods., Inc. v. Twentieth Century Fox Film Corp., 1997 WL 302292 (Cal. Super. Ct. 1997) ............................................................ 12 �ig��t vifivCi 928) ............................. , ............................................................ 4-5 Michael v. Dyke 41 S.W.3d 746 (Tex. App. 2001) ....................................................................... 12 Palmer v. Protrka, 257 Or. 23 (Or. 1970) ........................................................................................... 5 XVI TABLE OF AUTHORlTIES EXHIBIT J - 515 Document 339 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Filed 07/21/2008 Page 1 8 of 101 Perez Hernandez, v. 658 S. W.2d 697 (Tex.App. 13 Dist. 1 983)........................................................... 5 R&B Auto Center, Inc. Farmers Group, Inc., v. 140 Cal.AppAth 327 (2006) ............................................................................... 29 C) Federal Authorities 1 1 U.S.C. § 1 1 1 1 ................................................................................................. 1 3 17 U.S.C. § 7 (repealed) ..................................................................................... 32 17 U.S.C. § 26 (repealed) ................................................................................... 30 17 U.S.C. § 101 . . . . passim 17 U.S.C. § 102(a) .. .. . passim 17 U.S.C. § 102(b) .............................................................................................. 70 17 U.S.C. § 103(a) .............................................................................................. 40 17 U.S.C. § 103(b) ......... ; .............................................................................. 65-66 17 U.S.C. § 106....................................................................................... 45-46, 48 17 U.S.C. § 1 14(b) ........................................................................................ 39-40 17 U.S.C. § 304(c) . . . passim 17 U.S.C. § 408(b) .............................................................................................. 60 17 U.S.C. § 411(a) .............................................................................................. 55 . . . passim 17 U.S.C. § 504(b) 37 C.F.R. § 202. 1 (a) .................................................................................... .47, 65 37 C.F.R. § 202.10(b) ................................................................................... 52, 68 Berne Convention, Art. 2(3) ............................................................................... 64 F.R.C.P. 1 6(b) .......................................................... . ..................................... 27, 30 F.R.C.P. 53(a) ............................................................................................... 1 6-17 F.R.C.P. 56(e) ..................................................................................................... 78 F.R.E. 901 79 H.R. Rep. No. 94-1476 (1976) . passim S.Rep. 94-473 (1976) .......................................................................................... 37 ..... . .. . . . . . . . . . . ....... . .................................................................. ......... .................. ................. .. .... ................................... .............................. ................. C· './\· ................................ ............... . . . . . . . . . . . .......................................... ... ..... ... ... .............................. ........................................ .................... ................. .............................................. XVll ..................... C) TABLE OF AUTHORITIES EXHIBIT J - 516 Cas 2:04-cv-OB400-0DW-RZ ( 1 2 3 4 5 6 7 Document 339 Filed 07/21 /200B Page 1 9 of 1 01 "Advisory Committee Notes to the 2003 amendment of Rule 53" .................... 16 Compendium o/Copyright Office Practices § 5.03.02(a) (1984) ...................... 62 Compendium II, Compendium 0/Copyright Office Practices 910-04 ............... 65 Other Authorities Dratler & McJohn, � .b'UJ!{3]{�tii oo£������..:.��.�.����.���.:������� .��.� .�����.���!.���:..���.�. 73 Jones, Rosen Wegner, Federal Civil Tria7s and Evidence § 4:319 (2007) ............................................. 29 8 Jnnp.�. R n�p.n Wp.P11p.r. 9 10 11 12 13 (' 14 15 16 17 18 19 20 21 22 23 24 25 26 27 c 28 . Federal Civil Trials and Evidence § 4:46-54 (2007) ............_............................ 29 H. Miller & M. Starr, 3D Miller & Starr California Real Estate § 12:8 (2007) ..................................... 5 M Nimmer & D. Nimmer, 1 Nimmer on Copyright ("Nimmer") § 1.01 ...................................................... .44 1 Nimmer § 2.03[D] ...................................................................................... 70-71 . 53 1 Nimmer § 2.08[B] . 55-56 1 Nimmer § 2.08[G] 1 Nimmer § 2.12 48 1 Nimmer § 3.01 ................................................................................................. 37 1 Nimmer § 3.03[A] ............................................................................................ 48 1 Nimmer § 3.04[A] ............................................................................................ 63 1 Nimmer § 3.06 ................................................................................................. 67 1 Nimmer § 5.03 ................................................................................................. 33 1 Nimmer § 6.03 ................................................................................................. 49 1 Nimmer § 6.10 ................................................................................................. 49 1 Nimmer § 6.12[B] ..................................... : ...................................................... 21 2 Nimmer § 7.16[B] ............................................................................................ 55 3 Nimmer § 9.05[A] ............................................................................................ 73 3 Nimmer § 10.01 [e] .......................................................................................... 60 3 Nimmer § 1 1 .02[B] ............. : ...................................................................... 37-38 .................................................... ........................_.............. ......................_............................................................_ . . . .......................... ..................................................................... xviii TABLE OF AUTHORITIES EXHIBIT J - 517 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 Filed 07/21/2008 Document 339 Page 20 of 1 01 3 Nimmer § 11.02[C] ..........................................................................................42 3 Nimmer § 11.05[B] ..........................................................................................73 ( ) 3 Nimmer § 12.01[A] ............................................................................................4 3 Nimmer § 12.10[A] .................................................................................... 33-34 3 Nimmer § 12.11[F] .............................................................................................9 3 Nimmer § 13.03[B] ..........................................................................................71 3 Nimmer § 14.03[A] ..........................................................................................15 4 Nimmer § 14.03[C] ............................................................................................8 3 Nimmer § 14.03[D] ............................................................................................5 3 Nimmer § 14.03[E] ..........................................................................................14 . W. Patry, 17 1 Patry on Copyright ("Patry") § 2:17 ...............................................................73 1 Patry § 2:21 73 2 Patry § 7:27 .....................................................................................................73 2 Patry § 7:43 .....................................................................................................73 6 Patry § 22:119 ...................................................................................................9 C) 6 Patry § 22:120 .................................................................................................10 6 Patry § 22:121 .................................................................................................10 18 S"Wh"T7P.T T,,�him". W"17�t"f p.. f 11 12 13 14 15 16 19 20 21 22 23 24 25 26 27 28 . . .. . ............ ........................ .... ........................................................ California Practice Guide: Federal Civil Procedure Before Trial, § 14:64 ..... 28 B.E. Witkin et. al., 4 Summary ofCalifornia Law, § 270 (9th Ed. 1990) 5 Am.Jur. 2d Cotenancy and Joint Ownership § 69 ................................................5 75 Am.Jur.2d Trial § 99 (2004) ... 5 16 Cal. Jur.3d Cotenancy and Joint Ownership § 44 (2008) .............................. 5 Corpus Juris Secundum Tenancy § 92 .................................................................5 Corpus Juris Secundum on Accounting § 44...............................'" ...................... 9 Corpus Juris Secundum on Accounting § 52........................................................9 1 Gilson on Trademarks § 2A.I0 .......................................................................44 3 Gilson on Trademarks § 8.06 ..........................................................................58 C) ........................................... ........... .. .. .......................................................... XIX TABLE OF AUTHORITIES EXHIBIT J - 518 Cas 2:04-cv-OB400-0DW-RZ ( 1 2 3 4 5 6 7 10 11 12 13 ( Filed 07/21 /200B Page 21 of 1 01 McCarthy on Trademarks and Unfair Competition § 6:14 ............................ .49 1 McCarthy on Trademarks and Unfair Competition § 6: 17.50 ....................... . 44 8-38 Moore's Federal Practice - Civil § 38.10 ................................................. 1 0 8-38 Moore 's Federal Practice - Civil § 38.3 1 ................................................. 12 3 1 Trials Digest 2d 10 12 9C Wright & Miller: Federal Frac. & Froc. § 2604 ......................................... 1 6 Lauren Beth Emerson, Note, Termination ofTrans er ofCopyright: Able to f Leap Trademarks in a Single Bound? 1 ................... ................. . . . ................................................. 8 75 9 Document 339 FORDHAM L. REv. 207 at 250-5 1 (2006) ............................," ......................... .46 �&S�� r.� t(Wob�f�.�����r::.���������:.!!.�.����: ���, �� ........................ 44 Sheldon W. Halpern, Article, A High Likelihood ofConfusion: Wal-Mart, TrafflX, Moseley, and Dastar - The Supreme Court's JVew Trademark ��rw.-?-tf��. SURV. AM. L. 237 .....................................................................46 Janine V. McNally, Congressional Limits on Technological Alterations to Film: The Public Interest and the Artists' Moral Right, . 14 5 HIGH TECH. L.J. 1 29 (1 990) ............................................................................. 39 15 16 17 18 19 20 21 22 23 24 25 26 27 c 28 xx TABLE OF AUTHORITIES EXHIBIT J - 519 Cas 2:04-cv-08400-0DW-RZ Document 339 1 4 5 6 7 8 9 10 11 12 13 14 . 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 22 of 1 01 C) INTRODUCTION 2 3 Filed 07/21/2008 The Court's March 26, 2008 order ("Order") on the parties' cross-motions for partial summary judgment upheld the validity of Plaintiffs Joanne Siegel and Laura Siegel Larson's ("Plaintiffs") Superman Notices of Termination and Plaintiffs' recapture pursuant to 1 7 U.S.C. § 304(c) ofJerome Siegel's co-authorship share of the original illustrated Superman story published in No. 1"). Action Comics No. 1 ("Action Comics Defendants concede, as they must, that as joint copyright owners, Plaintiffs are entitled to an accounting from April 1 6, 1999, the effective termination date, seek to substantially encumber and reduce the Superman profits payable to Plaintiffs via a draconian "apportionment" analysis, the "promotional announcements" ("Ads") and deflection to alleged trademarks. In its March 3 1 and July 3, 2008 orders, the Court ordered briefing on the following issues: Apportionment: Firstly, no "apportionment" of profits should apply to Plaintiffs' accounting claim. It is well settled that an accounting between copyright · C not governed by federal copyright law, but by state law governing tenancies in common. Under such law, co-tenants must account for all profits from a co-owners is '\., j co-owned property; one co-tenant Gannot be charged, directly or indirectly, for another's unilateral modifications or improvements to co-owned property. Burden of Proof: If "apportionment" is nonetheless applied, Defendants will bear the burden of proof on both "apportionment" and expenses to be deducted from post-termination Superman profits. Jury Determinations: Plaintiffs' claim for Superman profits, and "apportionment," if applicable, must be tried to a jury. The calculation of money owed is "legal" in nature, both in terms of the relief sought and its historical derivation, and the Seventh Amendment guarantees the right to a jury trial on such claims. Such accounting is functionally equivalent to an accounting for profits in a copyright infringement case, in which the determination of profits and any "apportionment" are always tried to a jury. If Defendants are permitted to import 1 C) PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 520 Cas 2:04-cv-08400-0DW-RZ ( Do cument 339 Filed 07/21/2008 Page 23 of 1 0 1 1 "apportionment" from such copyright infringement cases, they cannot "cherry pick" 2 its application. 3 Special Master: If "apportionment" applies, Defendants' proposal that a 4 special master undertake a laborious work-by-work analysis of all post-termination 5 Superman works is unnecessarily burdensome, unworkable and futile. As Plaintiffs . 6 have the right to a jury trial, the appointment of any special master to decide profits 7 and/or "apportionment" would also be constitutionally suspect. Moreover, the trier of 8 fact is not required to make a separate "apportionment" determination for each of the 9 thousands of post-termination Superman products. Instead, if "apportionment" 1 0 applies, the parties should present to the jury a Superman template - weighing and 1 1 comparing Plaintiffs' recaptured Superman elements with any Superman elements 12 exclusively retained by Defendants - as together these elements comprise the 13 Superman mythos that is licensed and exploited. From this evaluation, a ratio (%) can 14 rationally be determined and reasonably be applied to any Superman profits. 15 Works-Made-For-Hire: Defendants are improperly moving for partial 16 summary judgment on outstanding "work-made-for-hire" issues long after the 17 dispositive motion deadline in the guise of a motion in limine. These tactics run afoul 1 8 of the Court's Standing and Scheduling Orders and ignore that such matters present 19 multiple genuine issues of material fact that cannot be decided on summary judgment. 20 Post-Termination Alterations To Pre-Termination Works: As a matter of 2 1 law Defendants must account to Plaintiffs for any pre-termination Superman works 22 that qualify as "new" derivative works due to a "distinguishable variation" that is 23 more than "merely trivial." Specifically, a post-termination DVD release of a pre24 termination work with: (a) new or edited footage; (b) new "pan-and-scan" 25 reformatting; (c) new audio "mixes"; (d) new foreign-language subtitles or "dubbed" 26 foreign language audio tracks; (e) new overlaid "commentary tracks"; or (f) other 27 material modifications/additions to be determined at trial, would constitute, as a c 28 matter of law, a new derivative works, for which Defendants must account. 2 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 521 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Document 339 Filed 07/21/2008 Page 24 of 1 0 1 Firstly, Defendants cannot use their alleged trademarks to devalue or encumber Plaintiffs' recaptured Superman copyrights. The U.S. supreml ) Court clearly held in Dastar, infra, that trademarks may not encroach on the constitutional domain of copyrights. Secondly, Defendants must account for profits from any "mixed uses" of trademark and copyright, where a trademark itself constitutes copyrightable material derivative ofAction Comics No. 1, and/or a trademark is used in conjunction with derivative copyrightable material. Ads: Plaintiffs' recaptured copyrights in Action Comics No. 1 are not in any way encumbered by Defendants' retained copyright in the Ads. Pursuant to well settled copyright precepts concerning "publication" and "derivative works," Defendants' first publication and protective statutory copyright in the Ads do not detract from or encumber Plaintiffs' statutory copyright in Action Comics No. 1, which was published and duly registered with the Copyright Office shortly thereafter. Moreover, as the grantee's derivative works, not authored by Jerome Siegel, the Ads/ \ were never subject to recapture. Under the "derivative works exception" in 17 U.S.� _�) § 304(c)(6)(a), Defendants may exploit the Ads themselves but may not exploit new Superman works based on the Ads without accounting to Plaintiffs. To the extent that Defendants even hold a copyright in the Ads' entirely unoriginal reproduction of Action Comics No. 1 's prior cover, such depiction is devoid of Superman context. The Ads thus do not give Defendants exclusive ownership of any Superman elements. Action Comics No. 1: The historical background section of the Court's Order included a description of the contents of Action Comics No. 1, which Plaintiffs believe was provided as background to orient the reader. Since Defendants misconstrue the Court's statements as a definitive "ruling," Plaintiffs seek confirmation that the Court did not render conclusive findings as to the disputed literary contents of Action Comics No. 1, which constitute genuine issues of material fact for trial. Trademarks: __ 27 (J 28 3 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 522 Cas 2:04-cv-08400-0DW-RZ ( Document 339 Filed 07/21/2008 Page 25 of 101 ARGUMENT 1 2 I. 3 UNDER APPLICABLE STATE LAW GOVERNING TENANCIES IN COMMON DEFENDANTS MUST ACCOUNT FOR ALL PROFITS .. FROM SUrERMAN WITHOUT ANY "APPORTIONMENT" 4 A. 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 Plaintiffs' Accounting Claim Is Governed By State Law Re: Tenancies in Common, Not By Federal Copyright Law The Court has ruled that Plaintiffs and Defendants jointly own at least the Action Comics No. 1 copyright. See Order at 72. It is well settled that a copyright co owner must account to other co-owners for profits derived from exploitation of the copyright pursuant to state common law governing tenancy in common. See Oddo v. Ries, 743 F.2d 630, 633 (9th Cir. 1984).1 Both federal and California courts have consistently held that such an accounting action is governed by state law and does not arise under copyright law. See 3 M. Nimmer & D. Nimmer, Nimmer o n Copyright § 12.01[A][I][b] ("Nimmer")(As there can "be no copyright infringement between coauthors of a work, it follows that state courts have exclusive competence to determine the fact of co-authorship and the rights of . . .accounting that flow therefrom."); Dead Kenned v. Bia ys fra, 37 F.Supp.2d 1 151, 1 153 (N.D. Cal. 1999)("An action for an accounting or determination of ownership as between alleged co-owners is founded in state law and does not arise under the copyright laws."); Durgom v. Janowiak, 74 Cal. App. 4th 178 (1999)(same). 20 B. 21 Under California law governing tenancies in common, Defendants are not 22 Under California Law Governing Tenancies in Common, Improvements Inure to the Benefit of All Co-Owners 23 1 Zuill v. Shanahan, 80 F.3d 1366, 1369 (9th Cir. 1996)("duty to account to other co-owners for profits arises from . . . general [state] principles of co-ownership"); Gaiman v. McFarlane, 24 360 F.3d 644, 652 (7th Cir. 2004)("[A] joint copyright owner is a cotenant."); Community f Creative Non-Violence v. Reid, 846 F.2d 1485, 1498 (D.C. Cir. 1 988)("Joint authors co­ 25 or owning copyright in a work are deemed to be tenants in common."); Goodman v. Lee, 78 F.3d 1 007, 1 0 1 2 (5th Cir. 1996) ("Significantly, 'the duty to account does not derivefrom 26 the copyright law'sproscription of in fringement. Rather, it comesfrom '... general } principles of [state law governing the rights ofco-owners. "'), citing Oddo, 743 F.2d at 633; 27 Morrill v. Smashing Pumpkins, 157 F.Supp.2d 1 120, 1 126 (C.D. Cal. 2001)(same); H.R. 28 Rep. No. 94-1476, at 120 (1 976)("Under the bill, as under the present law, co-owners of a treated copyright would be generally as tenants in common . . . "). 4 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 523 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 16 17 18 19 20 Filed 07/21/2008 Page 26 of 1 0 1 entitled to any "apportionment" or adjustment for their modifications or purported improvements to the Superman character subsequent to Action Comics No. 1. One C) tenant in common may not impose the financial burden of unilateral modifications or improvements on another nor withhold profits attributable to same. See Higgins v. Eva, 204 Cal. 231, 238 (1928); Combs v. Ritter, 100 Cal.App.2d 315, 317 (1950); 4 B.E. Witkin et. al., Summary of California Law, § 270 (9th Ed. 1990)(tenant in common "not ordinarily entitled to [contribution or] compensation for services rendered in care and management of the property"V That state tenancies in common often arise in the real property context is of no legal consequence.3 As the Ninth Circuit has consistently held that an accounting between copyright co-owners is governed by "general principles [of state law] governing the rights of coowners," the parties and this Court are clearly directed to apply such law, not federal copyright law. Oddo, 743 F.2d at 633, Zuill, 80 F.3d at 1369. 14 15 Document 339 C. Defendants Cannot Use Federal Copyright Infringement Law To Reduce Defendants' State-Governed Accounting Obligations ( '; "Apportionment" has evolved over years offede l copyright infringement jurisprudence. See 3 Nimmer § 14.03[D]. Defendants impermissibly seek to import this federal infringement doctrine to dilute Plaintiffs' state-law accounting claims. Defendants cannot cherry-pick the application oflaw on a results-oriented See also 3D Harry D. Miller & Marvin B. Starr, Miller & Starr California Real Estate § ra ' 2 12:8 (2007)(In Califomia,"in the absence of an authorization b y the other cotenant or an agreement between the cotenants, one cotenant is not entitled to contribution and cannot 22 recover . . . against a cotenant for improvements or repairs made on the common property."); 16 44 (2008) ("No personal judgment may be recovered against a cotenant for improvements or repairs made on the common property, in 23 the absence of . . . proper authorizatIOn. "). 21 Cal. Jur.3d Cotenancy and Joint Ownership § 24 25 26 27 3 Non-California law governing tenants in common is the same. See Bras v. Bras, 463 F.2d 413, 4 1 5-16 (10th Cir. 1972)(no right of contribution from co-tenants when improvements were made WIth co-tenant's knowledge but without prior consent); Palmer v. Protrka, 257 Or. 23, 3 1-32, 476 P.2d 1 85 ( 1 970)(same); Perez v. Hernandez, 658 S.W.2d 697 (Tex.App. 1983)(same); Gillmor v. Gillmor, 694 P.2d 1 037 (Utah 1984)(same) ; A mJur. 2d Cotenancy and Joint Ownership § 69 ("Improvements made by one cotenant without the consent of all other cotenants inure to the benefit of all cotenants, but those cotenants cannot later be force to contribute a pail of the cost of improvements if they have ndt given their consent."); 28 92 (same). (. \... Corpus Juris Secundum Tenancy § 5 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 524 ) Cas 2:04-cv-OB400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 Document 339 Filed 07/21/200B Page 27 of 1 01 basis. The Court may recall that on the issue of Plaintiffs' entitlement to foreign profits, Defendants did not hesitate to distinguish the law governing Plaintiffs' state accounting claim from copyright infringement jurisprudence. Under the "predicate act" doctrine, a prevailing plaintiff can recover profits earned abroad which flow from acts of copyright infringement in the United States. Defendants vigorously opposed the application of such doctrine on the basis that this is not a copyright infringement action. 4 See Defendants' Motion for Partial Summary Judgment ("Defs. MSJ") at 25. ("In Oddo Reis, supra, 743 F.2d at 633, the Court held that, as between co-owners of a copyright, 'the duty to account does not derive from the copyright law's proscription of infringement. Rather it comes from ... general principles oflaw governing the rights of co-owners. ''') Despite the analogous "predicate act" doctrine, Plaintiffs were held not entitled to foreign profits from Superman works produced in the United States. See Order at 66:13-25. Defendants obliquely argue that as they have the non-exclusive right to exploit Action Comics No. I they should not be treated worse than an infringer. Firstly, scienter is not an element of copyright infringement, and even an irmacent infringer is liable under copyright law. See Dielsi Falk, 916 F.Supp. 985, 992 (C.D. Cal. I 996)("copyright infringement. ..does not require scienter"); Fitzgerald Pub. Co. Baylor Pub. Co., 807 F.2d 1 1 10, 1 1 14 (2d Cir. 1 986)("Even an innocent infringer is liable for infringement."). Secondly, the application of state substantive law is neither governed nor avoided by analogizing to federal law. The application of state law to a tenancy in common does not tum on whether the parties are being treated "better" or v. v. v. 23 24 25 26 27 28 4 However, the "predicate act" doctrine, like an accounting claim, is grounded in equitable principles of constructive trust. Compare 3 Nimmer § 1 1 .02[B][2] ("When an infringing work IS produced in the United States the copyright owner acquires an equitable interest therein . . . [and] the work is thereafter impressed with a constructive trust so that plaintiff is entitled to profits accruing from the exploitation of the work anywhere in the world.") with 1 970)(ho1ding, as Picture Music, Inc. v. Bourne, Inc., 314 F. Supp. 640, 646-47 between co-owners of music copyrights "compensation obtained from the unilateral exploitation of the joint work by one ofthe co-owners without the permission of the others is held in a 'constructive trust' for the mutual benefit of all co-owners and there is a duty to account therefore.")(citations omitted). (S.D.N.Y. 6 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 525 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Document 339 Filed 07/21/2008 Page 28 of 101 "worse" than under federal copyright law; the relationships and law are categorically "different." Here, under bedrock state law principles governing tenants in common, () Plaintiffs cannot be held financially responsible via the reduction of their profits for Defendants' unilateral modifications or improvements to the Superman property. Defendants have not yet cited a single case allowing "apportionment" between tenants in common, whereas PlaintijJs cite clear state authority that such reductive allocations are never permitted. The apportionment advocated by Defendants should be denied as without legal precedent and contrary to governing state law. As the Court has noted, "Congress placed certain limitations on what authors (or their heirs) gained from exercising the termination right," in large part due to the "objections by publishers." Order at 63:12-17. As the express purpose ofthe termination provisions was to benefit and reward authors, Mills Music Inc. v. Snyder, 469 U.S. 153, 172 (1985), any balancing between authors and their grantees must be found in the statute itself, such as the grantee's ability to continue to exploit preexisting derivative works (§304(c)(6)(A)) and the exclusion of rights arising under other laws (§304(c)(6)(E)). See Order at 68:13-25 (excluding foreign profits); 68:1-4 (excluding "pure" trademark uses and "unaltered" pre-existing derivative works). Defendants cannot import doctrines from non-governing copyright infringement law for self-serving "balancing," when the "balance" has already been struck by Congress. 1. Apportionment Would Function Inequitably in this Action This Court should refrain from applying Defendants' proposed apportionment analysis for the additional reason that it is especially inappropriate in a dispute between joint owners of a copyrighted work, where joint owners are to share equally in all profits. See Oddo, 743 F.2d at 633 (A co-owner "can be required to account to [another co-owner] for any profits he has made from use of those copyrights.") Defendants nonetheless seek to apportion profits for every new aspect of a Superman derivative work. For instance, with respect to a derivative Superman motion picture, Defendants advocate apportioning Plaintiffs' profit share for the plo() __ / 7 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 526 Cas 2:04-cv-08400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 18 Filed 07/21 /2008 Page 29 of 1 01 the director's prowess, the stars, special effects and production values. However, this makes no logical or economic sense, and the results would be extremely inequitable. As profits from a derivative work equals revenues minus expenses, Plaintiffs, as a 50% participant in its profits, if any, e ectively "bears" 50% of its costs. Therefore, ff Plaintiffs' profits already include an allocated share of the fixed and contingent (i.e., "back-end") compensation for the story (screenwriters' compensation), direction (director's compensation), special effects and production values, which in Hollywood are very substantial. Plaintiffs' co-ownership share of the profits from such Superman works thus inherently reflect and are already "apportioned" for such elements. To further reduce Plaintiffs' profits by once again apportioning for such elements would be "double counting" or "double dipping," which is manifestly unfair.5 This problem is further exacerbated by Defendants' inflation oftheir alleged "expenses" by notorious "Studio accounting" practices and the deduction of imputed overhead, imputed interest, and imputed distribution fees (in addition to overhead).6 15 II. 16 17 Document 339 DEFENDANTS BEAR THE BURDEN OF PROVING THE SCOPE OF ANY APPORTIONMENT APPLICABLE TO SUPERMAN PROFITS If Defendants are, contrary to governing state law, allowed to apportion the 5 Copyright law is quite concerned with "double-counting" profits in the calculation of to recover the 19 remedies. See, e.g., 17 U.S.c. § 504(b)("The copyright owner is entitledprofits ofthe actual damages suffered by him or her as a result of the infringement, and any 20 infringer that are attributable to the infringement and are not taken into account in computing the actual dama1:les."); Bouchat v. Bon-Ton Dep't Stores, Inc., 506 F.3d 3 1 5, 328 (4th Cir. 2 1 2007)("In decidIng . . . profits . . , exclude certain amounts calculated as actual damages to avoid double counting."); Bucklew v. Hawkins, Ash. & Baptie, LLP, 329 F.3d 923, 93 1 (7th 22 Cir. 2003)(J. Posner)("That would be double countIng."). The same concern should apply with equal force to Defendants' deduction of massive expenses while advocating additional "apportionment" ofprofits for the expensed items. 23 24 6 The unfairness of Defendants' position is especially heightened insofar as Defendants clai a right "cross-collateralize" their losses - that is, they seek to charge inflated claimed 25 losses on purportedly unprofitable projects (e.g., Superman Returns) against minimized gains on profitable projects (e.g., Smallville). "Cross-collaterization" is improper in itself because PlaIntiffs, as Joint owners of the Superman copyright are not Defendants' partners, as a 26 matter of law, nor accountable for Defendants' losses. See, e.g., Wilkie v. Santly Bros., Inc. , 27 139 F.2d 264, 265 (2d Cir. 1 943); 4 Nimmer § 14.03 [C][3]. When combined with apportionment, such "cross-collateralization" is particularly egregious, as it results in Plaintiffs, who had no say in Defendants' lavish spending, having to pay in full for half such 28 losses while only joining in a reduced part of Defendants' gains. to ( I 8 PLAlNTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 527 Cas 2:04-cv-OB400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Document 339 Filed 07/21/200B Page 30 of 1 01 profits payable to Plaintiffs Defendants would bear the burden of proof as to such "apportionment." As noted above, "apportionment" is a product of copyright infringement cases. When applied, the defendant clearly bears the burden of proving "apportionment" pursuant to 17 U.S.C. § 504(b): "[I]n establishing the infringer's profits, the copyright owner is required to present proof only of the infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and elements of profit attributable to factors other than the copyrighted work." Accordingly, all gross revenue is presumed to be profit "attributable to the infringement," unless the infringer can demonstrate otherwise. Nelson-Salabes, Inc., v. Morningside Dev., LLC, 284 F.3d 505, 512 n.9 (4th Cir. 2002). Thus, "the burden of proving apportionment. . .is the defendant's." Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 518 (9th Cir. 1985). See Cream Records, Inc. v. Jos. Schlitz Brewing Co., 754 F.2d 826, 828 (9th Cir. 1985); Lottie Joplin Thomas Trust v. Crown Publishers, Inc., 592 F.2d 651, 657 (2d Cir. 1978) ("[P]lacing the apportionment burden on defendants best comports with our C) admonition that in apportioning profits 'every indulgence should be granted plaintiff in an attempt to arrive at a sum which is assuredly adequate."')(cit. om.); W. Patry, Patry on Copyright ("Patry") § 22: 1 19("[S]ection 504(b) places the burden on defendant on apportionment and deduction of expenses.,,).7 Moreover, as "apportionment" is an affirmative defense raised by Defendants, they must bear the burden. See Polar Bear Prods. v. Timex Corp., 2004 U.S. App. LEXIS 22131 at *27, *32 (9th Cir. 2004); Three Boys Music Corp. v. Bolton, 212 F.3d 477, 487 (9th Cir. 2000); 3 Nimmer 12.1l[F] ("Of course, as a matter of 24 25 7 See also M cRoberts Sof tware, Inc. v. Media 100, Inc., 329 F.3d 557, 568 (7th Cir. 2003) ("[Defendant] had the burden of proving apportionment to the jury."); Johnson v. Jones, 1 49 26 F.3d (6th Cir. 1998)(same); Rondor Music Int'l, Inc. v. TVT Records LLC, 2006 U.S. Dist. LEXIS 971 1 8 at *25-26 (C.D. Cal. 2006) (same); General Corp. v. Grumman Sys. 27 Support Corp., 36 F.3d 1 147, 1 17 1 , 1 175 (1st Cir. 1994)("The defendant's burden under the primarily to demonstrate the absence of a 28 apportionment provision of Section 504(b) isor part causa1 1ink between the infringement and all of the profits claimed by the p1aintiff.",,--) 494 (I 9 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 528 Cas 2:04-cv-08400-0DW-RZ 1 ( 2 3 4 5 6 7 10 11 12 13 C 14 / 15 16 17 18 19 20 21 22 23 of 1 0 1 AN ACCOUNTING AND DEFENDANTS' AFFIRMATIVE APPORTIONMENT DEFENSE REQUIRE A JURY TRIAL A. The Right to Jury Trial Attaches to an Accounting for Profits l. In Federal Court the Fundamental Right to a Jury Trial Is To Be LIberally Construed All Cases Federal Courts view the right to a jury trial as a fundamental constitutional right that must be liberally construed. See Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 501 (1959) ("Maintenance of the jury as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with the utmost care."); Granfinanciera v. Nordberg, 492 U.S. 33, 48 (1989) ("[T]he long-settled rule that suits in equity will not be sustained where a complete remedy exists at law . . . serves to guard the right of trial by jury preserved by the Seventh Amendment and to that end it should be liberally construed."); Schoenthal v. Irving Trust Co. , 287 U.S. 92, 94 (I 932)("[T]he right oftrial by jury . . . should be liberally construed."). As such, federal courts strongly favor juries on disputed questions offact: III 8 This also comports with the burdens in an accounting action. See C.J.s. Accounting § 44 ("[T]he party seeking to avoid the accounting has the burden as to matters of defense"); 25 c.J.S. Accounting § 52 ("The burden of proving the correctness of an account rests on the party making it, and any doubt created by errors or omissions are resolved against that party. . . "). 26 27 9 Additionally, it must be noted that any doubt in assessing apportionment must be construed against the Defendants. See Sheldon v. M etro-Goldwyn Pictures Corporation, 106 F.2d 45, 51 (2d Cir. 1 939)(J. Hand)("It is not our best guess that must prevail, but a figure which will 28 favor the plaintiffs in every reasonable chance of error."). See also 3 Nimmer § l 4.03[D][1]; Eales v. Environmental Lif estyles, Inc., 958 F.2d 876 (9th Cir 1 992); Patry § 22:120. 10 24 ( Page 31 definition, the defendant bears the burden of proof as to all affirmative defenses. ,,).8 Defendants should also bear this burden "since in most cases all information regarding profits is exclusively in the[ir] possession." Lottie Joplin, 592 F.2d at 657. See Patry, § 22: 12 I ("defendant has the best information about the effects of its own conduct"). Defendants must take the "good" with the "bad." They cannot import "apportionment" from copyright infringement cases while ignoring the burden of proof associated therewith.9 8 III. 9 Filed 07/21 /2008 Document 339 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 529 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 32 of 1 0 1 has been held that the right to jury trial under the Seventh Amendment should be liberally construea, and that when there is doubt, the balance is tilted in favor of a jury trial. The strong federal policy favoring jury trials p Jovides the impetus for finding the right to jury trial in questionable cases. When the court has discretion, It is 'very narrowly limitea, and must, wherever possible, be exercised to preserve jury trial.' " "It 1 2 3 4 8-38 Moore 's Federal Practice - Civil § 38. 10[I][d], quoting Beacon Theatres, 359 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 U.S. at 5 1 0. See Simler v. Conner, 372 U.S. 221, 222 ( 1 963) ("The federal policy favoring jury trials is of historic and continuing strength."); Atlantic &'01111' Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 360 ( 1 962). ... Federal Courts A 1 Federal Law in Assessin ven en t e aIm ArIses Un er tate aw When litigants bring state-law claims in federal court, the court looks to comparable federal law to determine whether the constitutional right to a jury trial attaches. Simler, 372 U.S. at 222. The "characterization of that state-created claim as legal or equitable for purposes of whether a right to jury trial is indicated must be made by recourse to federal law," and is not dependent on whether the state law characterizes the claim as "legal" or "equitable." Id. Thus whether or not Californi( ) law characterizes accounting between co-owners as "equitable" is not determinative of the right to a jury in federal court. For example, in Simler the U.S. Supreme Court ruled that the right to a jury trial applied to a declaratory action in federal court between an attorney and a client over fees, even though the claim arose under Oklahoma state law and the plaintiff would not have enjoyed the jury-trial right in Oklahoma state court. 372 U.S. at 221-22. The Supreme Court nonetheless ruled that the declaratory relief claim was effectively "legal" in nature and that the Seventh Amendment right to a jury applied. Id. An Accounting for Profits Is Legal Both in Terms of the Relief 3. Sought and Itstristoncal DenvatlOn 2. an 10 IO The statement in Oddo, 743 F.2d at 633 ("[S]uch duty to account is derived from 'equitable doctrines relating to unjust enrichIDent and general principles of [state] law 27 goveming the rights of co-owners. ",)(cit. om.) is descriptive of state law and by no means constitutes a ruling regarding the Seventh Amendment right to a jury trial as to monetary ( 28 damages, which is governed by federal law. . '- 11 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 530 ) Cas 2:04-cv-08400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 DoCument 339 Filed 07/21 /2008 Page 33 of 1 0 1 To determine whether the plaintiff has the right to a jury trial, the court looks to (i) the nature ofthe relielsought, Wooddell v. International Bhd. OIElec. Workers, Local 71 , 502 U.S. 93, 97 (1991); Teamsters v. Terry, 494 U.S. 558, 565 (1990), and (ii) comparable 18th century actions brought in the common law courts of England before the merger oflaw and equity. American Express Travel Related Servs. Co. v. Hashemi, 104 F.3d 1 122, 1 124 (9th Cir. 1996). Here, Plaintiffs seek a calculation oftheir monetary damages (i.e., the finder of fact determines the amount of money owed Plaintiffs by calculating Defendants' revenues and allocable expenses). See Sid & Marty Krofft Television Productions, Inc. v. McDonald's Cor , 562 F.2d 1 157, 1 175 (9th Cir. 1977)(federal courts should p. not "deprive the parties of jury on what is basically a money claim for damages."). Plaintiffs' request for a profit "accounting" connotes a remedy more than a cause of action per se. See Dairy Queen, Inc. v. Wood, 369 U.S. 469, 477-78 (1962); Swofford v. B & W, Inc., 336 F.2d 406, 409-10 (5th Cir. 1 964); Towers v. Titus, 5 B.R. 786, 793-94 (N.D. Cal. 1979); Michael v. Dyke, 41 S.W.3d 746, 754 (Tex. App. 2001). Moreover, accounting claims originated in the common law courts, not the courts of equity. 8-38 Moore 's Federal Practice - Civil § 38.3 1 . 12 Plaintiffs' action is also similar to actions for money owed, which originated in the common law courts, not the courts of equity. !d. Plaintiffs' action arises from the duty owed between joint owners to account to one another for profits from the exploitation of their copyright. Oddo, 743 F.2d at 633. Defendants therefore occupy a position similar to that of a guardian or receiver, whose duty to account was originally recognized in the common a II 23 I I Moreover, juries routinely award of the defendant's 24 disputes arising in the entertainmentdamages in the formGlenProds., Inc. v.profits in Twentieth industry. Hermit's Century Fox Film Cor 1997 WL 302292 (Cal. Super. Ct. 1997), 3 1 Trials Digest 2d 10 p., 25 (awarding filmmaker Ron Shelton and his company profit participation moneys for the motion picture "White Men Can't Jump"). 26 ( 12 See also Daisy Group v. Newport News, 999 F. Supp. 548, 552 (S.D.N.Y. 1998) ("Indeed, the action for accounting originated in the common law, not in equity . . . A claim of 28 accounting for profits . . . did not �ive rise to equity jurisdiction."); Towers, 5 B.R. at 793 ("AlthOUgh an action for accountmg originated in common law courts, its availability at law was short-lived."). 12 27 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 531 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Document 339 Filed 07/21/2008 Page 34 of 1 01 law courts. 8-38 Moore 's Federal Practice - Civil § 38.3 1 . Accounting actions evolved into the action of general assumpsit for money had and received, in which at) issues were tried by a jury. Id. Plaintiffs' action is in the nature of an action to collect a debt owed, rather than an action to enforce a fiduciary duty. As courts have recognized, actions on debts have been routinely tried by the courts oflaw, not the equity courts. U.S. v. Higginbotham, Inc. , 722 F. Supp. 283, 285 (N.D. Miss. 1989). 4. Plaintiffs' Claim for Profits Is Functionally Equivalent to an AccountIng of Profits In a CO yn, Infrm�ement Case to Which ht the ConstItutIOnal Right to a R nal App les my Defendants will contend that Plaintiffs are not entitled to a jury on the factintensive issue of profits by arguing that "accounting claims" per se are equitable, not legal. Defendants' form over substance argument is inherently flawed in that it ignores the modem federal trend that rejects such formalistic distinctions, "favor[s] jury trials" and liberally construes the Seventh Amendment. Simler, 372 U.S.at 222. In both copyright and trademark infringement actions, the plaintiff is entitled to actual damages and defendant's profits. See 17 U.S.C. § 504(b) and 1 5 U.S.C. § C ) 1 1 17(a), respectively. Whereas money damages are legal, Mertens v. Hewitt Assocs., 508 U.S. 248, 255 (1993) ("Money damages are, of course, ilie classic form of legal relief."), Defendants will argue that a claim for "profits" is "equitable" as it requires defendants to disgorge profits to avoid unjust enrichment. Sheldon v. Metro-Goldwyn Pictures, Cor 309 U.S. 390, 399-400 (1940) (prior to the 1 909 Act copyright p., owners were awarded infringers' profits "in accordance with the principles governing equity jurisdiction ... to prevent an unjust enrichment"). However, juries decide such accounting claims for profits in federal copyright, trademark and patent infringement cases in light of the modem trend. In the seminal case of Dairy Queen, Inc v. Wood, the U.S. Supreme Court ruled that an accounting claim for profits from trademark infringement was legal. Without dwelling on historical analogs, it reasoned that the claim resembled a common law action for debt despite the casting of the claim as an "accounting." 369 U.S. at 476-C) _. 13 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 532 Cas 2:04-cv-08400-0DW-RZ (� . , 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 23 24 25 26 Document 339 Filed 07/21 /2008 Page 35 of 1 01 77. 13 Likewise, the Ninth Circuit in Sid & Marty Krafft, 562 F.2d at 1 175, ruled that claims for profits in copyright infringement cases are "legal," citing Swofford v. B & W, Inc. , 336 F.2d 406, 410 (5th Cir. 1 964)(holding that accounting claims for profits from patent infringement are legal). The Ninth Circuit reasoned: "(A)n accounting for profits, although a creature of equity, is a rule of administration and not ofj�risdiction_. The court of eguit{ awarded , . comRensatory damages Inclderrtal to an InjUnctIOn to aVOId muJtlOhclty of SUItS and not because the JUry lacked competence. We do not o eheve that thIS practice In patent and copynght Infnngement cases! which was justified historically to av�id m�rtlplicity oflitlgation in a dIvided . ' procedure, should be contInued In a merged system where such multiplicity can be avoided by one civil action. It is a well-settled doctnne that the distinction ofjurisdiction, between law and equity, is constitutional, to the extent to which the Seventh Amendment forbids any infringement of the right of trial by jury, as fixed by the common law. To continue the past practice is to convert an administrative rule into a jurisdictional one so as to deprive the parties of a jury on what is basically a money claim for damages. . . " 562 F.2d at 1 175. The U.S. Supreme Court implicitly affirmed Krafft when it recently held that accounting for profits in copyright infringement cases "generally are thought to constitute legal relief." Feltner v. Columbia Pictures TV, 523 U.S. 340, 346 (1998). See Polar Bear, 384 F.3d at 713, Three Boys Music, 212 F.3d at 487; 3 Nimmer § 14.03[E] ("Particularly after Feltner . . . the danger arises that denying trial by jury on this issue to a party who so requests will be deemed constitutionally suspect."). Thus, modem federal law increasingly classifies previously "equitable" remedies for monetary relief as legal and within the Seventh Amendment right to a jury triaL The determination of Plaintiffs' damages in the form of profits from their recaptured copyrights isfunctionally equivalent to the same determination in a copyright, trademark or patent infringement case. Just as federal courts have looked in such cases past formalistic distinctions between law and equity, so should this Court focus on the practical implications of the monetary relief sought. B. The Right to Jury Trial Attaches to Defendants' Apportionment Defense, Imported From Section 504(b) of Copyrig Act lit 27 ( 13 Similarly, courts have ruled that accounting claims are similar to common law claims when the claim is for a debt owed to the plaintiff by the defendant. See Higginbotham, 722 28 F.Supp. at 285 ("In short, what this lawsuit is all about is whether or not a debt is owing . . . Such actions were routinely triable by juries at common law."). 14 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 533 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Document 339 Filed 07/21/2008 Page 36 of 1 0 1 The "apportionment" defense asserted by Defendants arises from 17 U.S.C. § 504(b). 14 Under Section 504(b), apportionment is always performed by a jury, not t�\._ ) court. See Polar Bear, 384 F.3d at 713 ("[W]e presume that the jury fulfilled its duty to apportion profits."); Three Boys Music, 2 1 2 F.3d at 487 (affirming "the jury's apportionment of the profits"); Harper House, 1 987 U.S. Dist. LEXIS 14132 (affirming jury's apportionment of profits); 3 Nimmer § l4.03[A] ("It is up to the factfinder to weigh evidence about revenues and expenses. Once the factfinder deducts appropriate expenses and apportions the amount due to the infringement, the balance represents defendant's profits. ,,). 15 As on the "burden of proof' discussed above, Defendants want the benefit of borrowing "apportionment" analysis from copyright infringement jurisprudence, whil conveniently ignoring that ajury always decides "apportionment." Defendants cannot "cherry pick" "apportionment," advocating those parts that support Defendants' objectives, while discarding those which may undermine them. If Defendants insist on importing the "apportionment" defense, they cannot leave the jury behind. C) Thus, as "apportionment" is clearly a jury issue, when claims for copyright profits entail "apportionment," both the accounting (i.e., the calculation of profits) and apportionment aspects are routinely determined by the jury. See, e.g., Polar Bear, 384 F.3d at 713 (upholding use of a jury to calculate copyright profits and __ 20 21 22 23 24 25 14 Section 504(b) provides: "The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the mfringement, and any profits of the infringer that are attributable to the infringement and are not taken into account m computing the actual damages. In establishing the infringer's profits, the copyright owner is requITed to present proof only of the infringer's gross revenue, and the infringer is required to prove hIS or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work." 15 See Gaste v. Kaiserman, 863 F.2d 1 06 1 , 1 070 (2d Cir. 1988)(upho1ding the jury's apportionment formula: "We find no grounds to reject the jury's decision to apportion no more than 1 2 percent for the lyrics"); M cRoberts Sof edia 100, Inc., 329 F.3d tware, Inc. v. M 27 557, 568 (7th Cir. 2003)([Defendant] had the burden of proving apportionment to the jury."); 28 John G. Danielson, Inc. v. Winchester-Conant Properties, Inc. , 322 F.3d 26, 49 ( 1 st Cir. 2003)(reversing jury's apportionment decision because of improper jury instructIons). \... ( 26 15 PLAlNTlFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 534 -) Cas 2:04-cv-08400-0DW-RZ 1 2 Document 339 Filed 07/21/2008 Page 37 of 1 01 apportionment). 1 6 It would make little practical sense to have a jury determine an "apportionment" of profits but not profits (i.e., revenues and allocable expenses). 3 IV. 4 A WORK-BY-WORK APPORTIONMENT ANALYSIS IS PROCEDURALLY IMPROPER, PRACTICALLY UNWORKABLE, AND LEGALLY UNNECESSARY 5 A. 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 23 24 25 26 27 c 28 The Appointment of a Special Master to Conduct a Work-by-Work ApportIOnment Analysis Would Be Completely Improper Defendants propose the appointment of a special master to review each one of Defendants' tens of thousands of post-termination Superman works and "apportion" the elements in each work between Action Comics No. 1 and other sources. The appointment of a special master, however, would encroach on the fact-finding role of the jury and violate the limitations in F.R.C.P. 53 to such appointments. 1. The Use of a S§ecial Master to Conduct an "AfePortionment" AnalysIs Woul Im�roper1y Intrude on the Ro e of the Jurv m VIOlatIOn F.R.C.P. 3 Rule 53(a)(1)(B) of the Federal Rules of Civil Procedure provides that a judge may appoint a master to "make or recommend fmdings of fact" without the parties' consent only "on issues to be decided without a jury." F.R.C.P. 53(a)(1)(A)-(B). The Advisory Committee Notes to the 2003 amendment of Rule 53 states that "[t]he use a trial master without party consent is abolished as to matters to be decided by a jury unless a statute provides for this practice." See also 9C Wright & Miller: Federal Prac. & Proc. § 2604 ("Under the current version of Rule 53(a)(1)(A), which carries the 2003 amendment forward, masters now can be appointed injury cases only when the parties have given their consent.") As noted above; "apportionment," if applicable, is decided by a jury. See Polar Bear, 384 F. 3d at 713. Appointment ofa master to "apportion" Superman elements in post-termination works would plainly intrude on the fact-finding role ofthe jury. As 0 16 See also Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 5 14, 525-26 (4th Cir. 2003)(upholdingjury's detennination of both copyright profits and the degree of . "apportIonment"); McRoberts, 329 F.3d at 567-69 Gury detennined copynght profits including "apportionment" and " calculation of fixed and variable expenses, some of which . are deductible and some ofwhich are not"); General Corp. v. Grumman Sys. Supp. Corp., 36 F.3d 1 147, 1 172-76 (lst Cir. 1994)Gury should have detennined profits and apportionment). 16 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 535 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Document 339 Filed 07/21/2008 Page 38 of 1 0 1 Rule 53 and the Advisory Committee Notes state expressly that the court lacks poweL, to appoint a master with regard to jury matters, appointment of a master to decide C ) "apportionment" would be procedurally improper. 2. The Appointment of a S�ecial Master Would Exceed the LImItatIOns ofF.R.C.P. 3 Furthermore, appointment of a special master would exceed the statutory restrictions governing masters even as to non-jury issues. Rule 53(a)(I)(B) provides that a court may appoint a master to make or recommend factual findings on non-jury issues only if "warranted by (i) some exceptional condition; or (ii) the need to perform an accounting or resolve a difficult computation of damages." F.R.C.P. 53(a)(1)(B). Neither exists with regard to apportioning elements in post-termination works. The "exceptional condition" prong of Rule 53(a)(1)(B) is not satisfied by the time required to review the post-termination Superman works. La Buy v. Howes Leather Co., 352 U.S. 249, 258-59 (1957)(ruling that docket congestion, complexity, or length oftime required for trial do not constitute an "exceptional condition"). NO ) C can the "exceptional condition" prong be satisfied by the purported "complexity" of the apportionment issue. Id. at 258-59. In La Buy, the U.S. Supreme Court ruled that the district court judges in two antitrust cases with multiple plaintiffs and defendants abused their discretion in appointing special masters. Id. at 25 1-52. One case was so complicated that 27 pages of the record consisted of docket entries reflecting hearings on preliminary pleas and motions. !d. See also Bartlett-Collins Co. v. Surinam Nav. Co., 381 F.2d 546, 550 (10th Cir. 1967)("That the case involves complex issues of fact and law is no justification for reference to a Master, but rather is an impelling reason for a trial before an experienced judge."). "The overall mandate of Rule 53(b) is that reference to a master is to be the exception and not the rule." Bradshaw v. Thompson, 454 F.2d 75, 80 (6th Cir. 1972). Moreover, the "accounting" prong of Rule 53(b) does not encompass allocation analyses such as the "apportionment" of Superman elements in post-termination ( , works. Beazer East, Inc. v. Mead Corp., 412 F.3d 429, 440-41 (3d Cir. 2005). The "- ) ." 17 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 536 Cas 2:04-cv-08400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ( 28 Document 339 Filed 07/21 /2008 Page 39 of 1 01 "accounting" prong applies to the computation or calculation of damages, after the trier of fact determines accountability, Id. at 440-41 . The "accounting" prong does not apply to difficult allocation analyses even when such is a "predicate" to the calculation of damages. Id. See also In re Armco, Inc., 770 F.2d 103, 105 (8th Cir. 1985) ("Beyond matters of account, difficult computation of damages, and unusual discovery, it is difficult to conceive of a reference of a nonjury case that will meet the rigid standards of the La Buy decision."); Sid & Marty Krafft, 562 F.2d at 1 163, n.22. ("it will be a 'rare case' where a jury could not adequately handle the [profits] issue"). The decision in Beazer East (brought under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA)) is instructive. There, the district court referred the apportionment of costs under CERCLA to a magistrate judg who determined the percentage of Beazer East's costs to be borne by each ofthe responsible parties, "and in doing so, essentially tried part ofthe case." Beazer East, 412 F.3d. at 431-32. The Third Circuit ruled that the district court improperly delegated its traditional adjudicatory function, holding that the appointment of a special master to perform an apportionment of Beazer East's costs without the parties' consent constituted an abuse of discretion. Id. at 440-42. "[The allocation of costs under CERCLA] involves discretion, judgment, and legal reasoning that simply is not connoted by the phrase 'difficult computation of damages,'" because accountings and other damages computations "generally do not call for any peculiar judicial talent or insight." Id. at 44l . See also Satyam Computer Services, Ltd. Venture Global Engineering, LLC, 2007 WL 1 806198, *2 (E.D. Mich. 2007)(allowing appointment of a special master to make factual findings only because the findings would address a party's compliance with the court's order, not the merits ofthe underlying action). Here, the "apportionment," if any, of elements between Superman works recaptured by Plaintiffs and retained by Defendants cannot be construed as an "accounting" or a "difficult computation of damages," for the reason articulated in Beazer East. Such "apportionment" would necessarily involve the careful weighing v. 18 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 537 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Document 339 Filed 07/21/2008 Page 40 of 1 01 and evaluation of evidence and arguments, not mathematical computations. B. ( ) . A Work-by-Work Apportionment Is Unnecessary, Unworkable and'-­ Unduly Burdensome Defendants' Proposed Work-by:Work Analysis Would Result in a Tremendous Waste of JudICial Resources After April 16, 1 999 (the effective termination date) Defendants have exploited Superman - one of the most valuable intellectual properties in the world - in a wide variety of media, from comic books and other publishing, to apparel and other merchandise, to animated and live action television series, motion pictures and computer games. As such, Defendants' "work-by-work" "apportionment" proposal would prove unworkable in practice. It would require examination, briefing, arguments, and decisions as to how to apportion literally tens of thousands of separate articles of merchandise, toys, games, articles of clothing, comic books (e.g., there are over 300 post-termination Superman comic books), graphic novels and other publications, and individual episodes of multiple animated and live action television ' series (e.g., Smallville alone has 1 52 post-termination episodes). See IMDB webpagC for Smallville at http:// .imdb.comltitle/tt0279600/episodes. Such analysis would consume hundreds of hours of the Court's time, and as apportionment is tried to ajury, Defendants' work-by-work approach would require the jury to review each comic book, item of merchandise, TV episode, etc. in a trial that would necessarily last several months. Nor would this problem be alleviated by the Court or a special masterl7 undertaking such analysis; e.g., Smallville's 1 52 episodes alone would require at least 100 hours (14 court days) to simply watch once. 1. www Defendants' Failure to Provide Financial Documents on Individual or - y- or a YS1S Moot Wor s Ren ers Even ifthe fact-finder manage to wade through all of these Superman products, the problems with such analysis have just begun. A work-by-work apportionment 2. 27 1 7 In addition, the use of a special master to separately analyze tens of thousands of individual works and products would impose an unwarranted, devastating financial burden( '\ 28 on the Plaintiffs. \... j 19 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 538 Cas 2:04-cv-OS400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Document 339 Filed 07/21 /200S Page 41 of 1 01 analysis is possible only if Defendants' profits can be ascertained for each such work - i. e. , an apportionment ratio for a particular action figure has meaning, if any, only if it can be applied to the profits from that item. Defendants have not provided work-bywork documentation of their Superman revenues and expenses for the vast majority of their post-termination Superman products, despite Plaintiffs' discovery requests. 18 Defendants produced WBCP statements that show only aggregatefigures for the sums remitted by WBCP to DC for thousands of new Superman merchandise, not for individual products. In sum, Defendants' merchandising statements show aggregate revenue totals on a by-vendor basis, while DC's documents similarly show only aggregate totals for the character as a whole. Because Defendants failed to produce documents showing revenues or expenses for individual merchandising products, it will be impossible for Defendants to conduct a product-by-product apportionment of profits. In other words, Defendants would be incapable of proving with any degree of accuracy how much money a particular derivative product (e.g., a Superman, or Lois Lane action figure) generated, rendering a work-by-work apportionment analysis moot?O 19 17 18 18 There is a multitude of post-termination Superman merchandise, incorporating fra. Generally, most such merchandise copyrighted Superman elements. See Section VIII, in 19 is produced by third-party licensees under a license from Warner Bros. Consumer Products 20 ("WBCP"), which in turn acts as a licensing agent for DC Comics. See Declaration of Marc Toberoff in Support of Plaintiffs' Memorandum of Points and Authorities on Pre-Trial Issues 2 1 ("Toberoff Decl."), Ex. E. 22 23 24 25 26 27 ( 28 19 Defendants have produced consolidated statements indicating revenues from WBCP to DC by property (i.e., DC Superman, Superman Returns, Smallville, etc.) but not by products. ToberoffDecl., Ex. A. Defendants have also produced a consolidated WBCP statement showing "earned royalties" by vendor, but this is not broken down by specific products. ld., Ex. B. DC produced monthly memoranda from WBCP showing revenues only by the total received for a ?iven property, not by product or vendor. ToberoffDecl., � 4, Ex. C. DC has also produced 'Blue Books," which are management reports, indicating DC Comics' profits for individual merchandise produced by DC as well as aggregate revenues/expenses for its "Merchandising" and "Media" divisions, with revenue broken down onlx by property. ld., Ex. D. The "Blue Books" do show figures by product for DC's limited 'direct" merchandising, but not for more prevalent third-party merchandising. ld. 20 Defendants may purport to be able to demonstrate work-by-work revenues/expenses by evidence not produced during discovery. Such would obviously be barred by a simple motion in limine. 20 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 539 Cas 2:04-cv-OS400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 28 Filed 07/21/200S Page 42 of 101 Work-be-Work AP 0rtionment Should Not Be Performed for Works reated by EIcensees . Third-parties licensees which license the right from Defendants to exploit C) Superman usually pay an advance against a royalty, with the expense of developing and producing new derivative "elements" borne by the licensee. See Marascalco v. Fantasy, Inc., 953 F.2d 469, 475 (9th Cir. 1991)(noting usual practice oflicensing copyrights in exchange for advances and royalties); H.R. Rep. No. 94-1476 at 1 59 (noting common practice of licensing copyrights "in exchange for percentage royalties based on sales or license fees"); 1 Nimmer § 6.12[B] at 6-38.5-38.6 ("The problem [of accounting between joint owners] is not here presented because [in licensing] it is the licensee and not the licensor who risks capital in exploiting the work.") Accordingly, there should be no "apportionment" between co-owners for mere licensing of a joint work. It would be nonsensical to examine the elements added by a licensee so as to apportion profits from its product, because DC's consideration is for the license, itself. See Davis v. Blige, 505 F.3d 90, 100 (2d Cir. 2007)("[A] co-owner who grants a non-exclusive license is accountable to his co-owner for income gaineL) by the grant ofthe license."); Goodman v. Lee, 1 994 U.S. Dist. LEXIS 1 846 at *23 (E.D. La. 1994)(awarding one-half of all licensing royalties to co-author ofjoint work) aff'd 78 F.3d 1007, 101 1-12 (5th Cir. 1 996); Edward B. Marks Music Corp. v. Wonnell, 61 F.Supp. 722, 729 (S.D.N.Y. 1 945)(Co-owners "are entitled to share equally in the royalties which were due under the original copyright."). For the same reason, if only DC is held accountable to Plaintiffs at trial, there should be no "apportionment" for elements attributable to Warner Bros. as the sharply reduced licensing royalty paid DC for Warner Bros.' film/television exploitation already reflects "apportionment" for the value ofthe intellectual property (allegedly) as opposed to the value added by Warner Bros. See ToberoffDecl. Exs. F, G. 3. 26 27 Document 339 c. A "Template" Approach to Apportionment Is Appropriate l. A "Template" Af,proach Can Generate an Aowrtionment Figure ) That Can Proper y Be ApplIed to Any GIven ork (_ / 21 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 540 Cas 2:04-cv-08400-0DW-RZ ( Document 339 Page 43 of 1 01 Filed 07/21 /2008 Apportionment, by definition, is not an exact science, for "what is required is 1 2 not mathematical exactness but only a reasonable approximation." Sheldon, 309 U.S. 3 at 402. See Frank Music, 72 F.2d at 5 1 8 ("[M]athematical exactness is not 4 required."); John G. Danielson, Inc. v. Winchester-Conant Props., Inc., 322 F.3d 26, 5 54 ( 1 st Cir. 2003)("The Supreme Court held in [Sheldon, supra] that a 'reasonable 6 approximation' was enough ifit allowed 'a rational separation of the net profits. "') 7 As apportionment requires only a "reasonable approximation," Defendants' insistence 8 on an unnecessary and largely unmanageable work-by-work analysis is little more 9 than a calculated attempt to delay the prosecution of this action by drowning the trier 10 of fact in petty segregated analyses of thousands of Superman products, and saddling 1 1 Plaintiffs with huge additional costs, litigating trivial issues. In the event federal "apportionment" governing copyright infringement i s held 12 l 3 to apply to this accounting governed by state law, Plaintiffs offer a far more rational 14 and manageable apportionment solution. The trier of fact can readily establish a 1 5 template that qualitatively evaluates and weighs Plaintiffs' recaptured "Superman" 16 elements against any additional elements exclusively owned by Defendants within the 17 overall "Superman" mythology. See Roulo v. Russ Berrie & Co., Inc., 886 F.2d 93 1 , 1 8 941 (7th Cir. I 989)(upholding jury's application of a single apportionment figure to 21 19 line of greeting cards, rather than each card individually). The Superman mythos 20 more closely resembles a unified property than a collection of unrelated works. From 2 1 this elemental comparison, a fair percentage (%) can be fixed by the jury that can . 22 then be reasonably applied to the totality of Defendants' Superman profits. Such 23 methodology will fairly satisfy the requirement of a "reasonable approximation" for 24 apportionment purposes, Sheldon, 309 U.s. at 402. Plaintiffs' "template" approach is particularly appropriate given that a large 25 26 c 21 See also Aerospace Services Intern. V. LPA Group, Inc., 57 F.3d 1002 ( 1 1 th Cir. 1995) (upholding apportionment of "total fees allocable to the use of these two [infringing] 27 documents" rather than to each document); Multitherm Cor v. Fuhr, 1991 U.S. Dlst. p. LEXIS 1 0475 at *45 (E.D. PA 1 991)(applying single apportionment figure to profits from 28 multiple infringing "bulletins"). 22 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 541 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 44 of 1 0 1 1 portion of Defendants' Supennan revenues are from licensing the Supennan mythos. , 2 As set forth above, their licensing compensation already reflects an "apportionment � l) 3 of the value ofthe Supennan mythos to the product in question. A "template" 4 approach also more rationally and fairly reflects the fact that a derivative Supennan 5 work is imbued with the "core" Supennan story from Action Comics No. 1 (e.g., 6 Supennan, Clark, Lois, "Champion of the Oppressed," etc.) whether or not each such 7 element is present in that particular derivative work. When the consumer buys, views 8 and appreciates such derivative work , generating profits for Defendants, it is surely 9 not in a vacuum, but in the context ofthis well-known and beloved Supennan story. 10 11 12 2. Thp. Tr.onir. rorp. Flp.mp.ntR ofthp. Sllnp.rm:oln rh:olr:olr.tp.r Have Remained Largely Unchanged Since Their Inception A template approach is further justified by the fact that derivative Supennan 1 3 products necessarily draw heavily on the iconic core of the Supennan character, 1 4 fonnat and mythos recaptured by Plaintiffs in Action Comics No. 1 : "Supennan's 1 5 name, his alter ego, his compatriots, his origins, his mission to serve as a champion 1 6 the oppressed [and] his heroic abilities in general," along with the "entire storyline () 1 7 from Action Comics, Vol. 1 , Supennan' s distinctive blue leotard . . . a red cape and 1 8 boots, and his superhuman ability to leap tall buildings, repel bullets, and run faster 1 9 than a locomotive." Order at 40: 1 0-13, 40:25-4 1 :2. Elements as varied as 20 Supennan's origins on a doomed planet, his superpowers (super-strength, super2 1 senses, invulnerability, and ability to soar through the air), his square-jawed good 22 looks and dynamic costume, Clark's hom-rimmed classes, conservative dress and 23 demeanor, Lois' feisty personality, and the setting of a large metropolis reminiscent 0 24 1 930s New York, were all originally established in Action Comics No. 1 . See 25 Declaration of Keith Adams ("Adams Decl."), Ex. G at 7-8. 26 Action Comics No. 1 contains the key thematic and literary fonnat for further 27 episodic Supennan stories, particularly Supennan's secret dual identity as Clark Kent, e) 28 and "their" consequent "love triangle" with Lois. Action Comics No. 1 animates the 23 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 542 Cas 2:04-cv-08400-0DW-RZ ( Document 339 Filed 07/21/2008 Page 45 of 1 01 1 striking contrast between the awkward mild mannered reporter, with whom audiences 2 can identify, and the masterful Superman - heroic "Champion of the Oppressed." See 3 id. at 8. Clark and Lois' jobs as big city reporters and assigmnents from their gruff 4 editor cleverly inform Superman of crimes and disasters as they happen and provide 5 the framework for future adventures between the "three." Every derivative Superman work is necessarily invested with this iconic 2 7 Superman "core" from Action Comics No. 1 ? These essential visual, story, and 6 8 thematic elements pervade the Superman mythos such that even the most humble use 9 of Superman elements is associated therewith. See Adams Decl., Ex. G at 8 ("All 1 0 Superman-related stories . . . draw heavily on the timeless dramatic formula created by 1 1 Jerry Siegel in Action Comics No. 1 . Regardless of a story's content and handling, 12 audiences from comics to the cinema are ultimately attracted to the character for 13 deeply-rooted psychological reasons, all of which were cleverly and succinctly ( 14 detailed in Jerry Siegel's initial Superman adventure."). Thus when the public views 1 5 Superman work, that work does not stand alone. Rather, the audience brings to bear 1 6 all of its pre-existing Superman associations which are largely derived from and 1 7 driven by the iconic core of the Superman mythos established in Action Comics No. 1 . Despite the weight of Plaintiffs' recaptured copyrights, Defendants will repeat 18 1 9 the mantra of "almost 7 0 years" of contributions to the Superman mythos to generate 20 more lopsided apportionment figure. However, it is uncanny how little the core 2 1 Superman elements have changed in 7 0 years. Apportionment analysis is a two-way 22 23 24 25 26 27 ( 28 22 Given that Action Comics No. 1 established the Superman core, any apportionment of profits will necessarily tip heavil in Plaintiffs' favor. See Sheldon v. M y etro-Goldwyn Pictures Cor poration, 106 F.2d 45, 5 1 (2d. Cir. 1 939)(Hand, J.)("It is not our best guess that must prevail, but a figure which will favor the plaintiff in every reasonable chance of s error."); Three Boys Music Corp. v. Bolton, 212 F.3d 477, 480 (9th Cir. 2000)(66% of profits from song attributed to infringing elements); Abkco Music, Inc. v. Harrisongs Music, Ltd., ff'd, 722 F.2d 988 (2d Cir. 1 983)(apportioning 70% of 508 F. Supp 798 (S.D.N.Y. 198 1), a profits from the song); Blackman v. Hustler Magazine, Inc., 620 F. Supp. 792, 801 (D.D.C. 1 985) a ff'd on this point, rev 'd on other ground 800 F.2d 1 1 60, 1 164-65 (D.C. Cir. 1986) s, (allocating 60% of profits from 136 page magazine based on infringing 6 pages); Lottie ff'd, 722 F.2d Joplin Thomas Trust v. Crown Publishers, Inc., 456 F. Supp 53 1 (S.D.N.Y.), a 9888 (2d Cir. 1983)(50% of profits to Plaintiff for one song on a 1 0-song album.) 24 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 543 Cas 2:04-cv-OB400-0DW-RZ Document 339 Filed 07/21/200B Page 46 of 1 01 1 street: Defendants would have to show for each product which elements they have _ CJ 2 contributed into that product. In so doing, Defendants will surely overstate the "bell 3 and whistles" they have added to the core "Superman" character/format established in 4 Action Comics No. 1 . Subsequent "Superman" elements added by Defendants (e.g., 5 "heat vision") were all derivative and, for the most part, are of lesser import. In a vast 6 array of Superman products such "elements" are not even present. Try as Defendants 7 might, Plaintiffs' recaptured Superman core will be difficult to water down. If one 8 strips away Defendants' additions, the "Superman" of today is still instantly 9 recognizable because Action Comics No. 1 ' s "Superman" IS Superman. See Adams 1 0 Decl., Ex. H at 1 1 .23 At the end of the day, an apportionment ratio arrived at through a comparative 11 1 2 "template," weighing material elements within the Superman mythos, would 13 reasonably approximate the average ratio arrived at through a laborious work-by-work 14 analysis, while rationally crediting Defendants' . contributions. 15 3. 16 The clear legislative objectives and public policy goals behind the Copyright 17 1 8 Act's termination provisions support Plaintiffs' "template" approach and militate 19 against Defendants' "work-by-work" approach. As noted by the U.S. Supreme Court 20 in Mills Music, 469 U.S. at 172, "the concept of a termination right itself' was 2 1 "obviously intended to make the rewards for the creativity of authors more 22 substantial" by allowing authors and their heirs the opportunity to benefit from 23 Congress' extension of the renewal copyright for pre-1 978 works. See also H.R. Rep. 24 As noted by Jerome Siegel in his Creation of a Su p 25 'Superman' comic strip has changed greatly throUgh erhero: "It .has been said that the the years . . . Has it really? Superman still is a being from another world who uses his super-powers, including super-strength, here 26 on Earth to crusade against evil. When not attired ill his famous colorful Superman costume, he masquerades in his secret identity of Clark Kent . He is still admired by reporter Lois 27 Lane , who does not know that he is secretly Clark Kent . Superman still wears his costume. 28 Clark Kent. still wears glasses he r�ally doesn't n�ed. All th� aboye was in th� �oncept I ( '\ dreamt up ill the early 1 930s, and It stIll appears ill the comIc strIp today. ThIS IS the very �) guts, tlIe backbone of the 'Superman' concept." Adams Decl., Ex. M 25 23 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 544 Cas 2:04-cv-OB400-0DW-RZ ( Document 339 Filed 07/21 /200B Page 47 of 1 01 1 No. 94- 1476, at 140 (1 976), reprinted in 1 976 U.S.C.C.A.N. 5659, 5756 ("[T]he / 2 extended tenn represents a completely new property right and there are strong reasons 3 for giving the author, who is the fundamental beneficiary of copyright under the 4 Constitution, an opportunity to share in it."). Indeed, the Supreme Court explained the 5 central goals ofthe tennination provisions as follows: 6 More particularly, the termination right was expressly intended to relieve authors of the consequences of ill-ad vised and umemunerative grants that had been made before the author had a fair opportunity to appreciate the true value ly of his work product. That general purpose is plain defined in the legislative ble from tlie text of § 304 itself. history and, indeed, is fairly infera 7 8 9 Mills Music, 469 U.S. at 1 72-73. To safeguard this invaluable right, Congress provided a number of provisions 10 1 1 to prevent publishers with superior economic power from thwarting it by forcing 12 authors or their heirs to waive or pre-assign such rights. See 17 U.S.C. § 304(c)(5) 13 (tennination rights exercisable "notwithstanding any agreement to the contrary"); § ( 14 304(c)(6)(D)(no assignment ofterrnination expectancy until it vests). In the recent decision, Classic Media, Inc. 15 v. Mewborn , _ F.3d _, 2008 u.S. 16 App. LEXIS 1 4755 (9th Cir., July 1 1 , 2008), involving the recapture under 17 U.S.C. 1 7 § 304(c) of co-ownership of Lassie by the daughter of author Eric Knight, the Ninth 1 8 Circuit was substantially guided by the legislative objectives ofthe tennination 19 provisions which "were in large measure designed to assure that [the 1976 Act's] new 20 benefits would be for the authors and their heirs," quoting H.R. Rep. No. 94-1476, at 2 1 140 ?4 The Ninth Circuit emphasized throughout that the purpose oftennination is to 22 allow authors to reap the financial rewards oftheir creations: 23 "Con�ess enacted the inalienability oftennination rights provision in § ying the two-tiered 304(c)(5) to resurrect the fundamental purrose underf structure of the duration of copyrights It originally adopted: to award to the author, and not to the assignee of the right to exploit the copyright during its initial tenn, the monetary rewards of a work that may have oeen initially undervalued, but which later becomes a commercial success." 24 25 26 27 ( 28 24 "Seventy years after Eric Knight first penned his tale of the devoted Lassie who struggled to come home, at least some of the fruits of his labors will benefit his daughter." Id. at 8548. 26 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 545 Cas 2:04-cv-08400-0DW-RZ 1 Document 339 Filed 07/21/2008 Page 48 of 1 0 1 Classic Media, slip. op. at 8536. These objectives militate against conducting a debilitating work-by-work 2 c) 3 apportionment analysis that is unnecessary, prohibitively expensive, largely 4 unworkable and frustrates the central purpose ofthe termination statute.25 5 4. 6 Plaintiffs Request that the Court Order the Use of a "Template" in Any ApportIOnment AnalYSIS As demonstrated above, Defendants' work-by-work apportionment by a special 7 8 master: (a) is procedurally improper, (b) would overburden the Court, the parties, and 9 the jury; (c) would be futile absent parallel documentation of work-by-work profits 1 0 that Defendants have not provided; (d) i s inapplicable to licensing; and (e) is 1 1 unjustified in light of the "reasonable approximation" standard. In the event the 1 2 Court orders an "apportionment," Plaintiffs respectfully request that it (1) denies 1 3 Defendants' requests for a special master and a work-by-work analysis; (2) directs the 1 4 parties to present to the jury a Superman "template" that qualitatively weighs and 1 5 compares Plaintiffs' recaptured Superman elements with any elements exclusively 1 6 retained by Defendants, and (3) directs the jury to arrive at a reasonable ratio (%) C) 1 7 from this evaluation that can readily be applied to Defendants' Superman profits. 1 8 v. 19 20 21 22 23 24 25 m<'.FRNn ANTS TMPROPF.RT .V SRF.K STTMMARV .TTT1)GMENT ON WORK FOR HIRE ISSUES PRESERVED FOR TRIAL A. Defendants Improperly Seek Partial Summary Judgment on "Work for Hire" Issues Well After The Court-Imposed Deadline for Dispositive Motions Plaintiffs objected in the parties' February 2 1 , 2008 stipulation to Defendants' motion to determine that Siegel and Shuster's Superman stories after Action Comics No. I are purportedly not subject to Plaintiffs' termination under Section 304(c) as alleged "works for hire" because it (a) improperly constitutes a motion for partial 26 25 Defendants' work-by-work approach frustrates the goals of recapture by both erecting 27 impractical hurdles and "drowning" the core elements of an original creation in extraneous details. Ironically, the more successful an author's creation is, the more a work-by-work 28 apportionment functions to his/her detriment by allowing publishers to use their narrow, bur numerous, additions to both dilute the value of the recovered copyrights and to erect � unmanageable barriers to their enforcement. 27 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 546 ) , Cas 2:04-cv-08400-0DW-RZ ( Document 339 Filed 07/21 /2008 Page 49 of 1 01 1 summary judgment well after the dispositive motion deadline in the Court's 2 scheduling order, and (b) presents genuine issues of material fact for trial, barring 3 summary judgment. Adams Decl., Exs. C-E. 4 The Court set April 30, 2007 as the dispositive motion deadline in this matter. 5 Adams Decl., Exs. A, B. (March 19, 2007 Order). A party cannot file a summary 6 judgment motion after the deadline set by the Court, unless the party shows good 7 cause and obtains the court's consent. See F.R.C.P. l 6(b)(3)(A), (b)(4). Here, 8 Defendants improperly seek partial summary judgment on whether numerous 9 Superman stories created by Siegel and Shuster were "works for hire" well over a 1 0 year after the Court-ordered April 30, 2007 deadline for dispositive motions, despite 1 1 Defendants never requesting or showing good cause for the Court to modify its order. ff, 1 2 See US. Dominator v. Factory Ship Robert E. Reso 768 F.2d. 1 099, 1 102 (9th Cir. 13 ( 1 985)("[T]he record reveals that the defendants never requested a modification ofthe 14 pretrial order to allow the filing of their [summary judgment] motion. Accordingly, 1 5 we conclude that the district court properly denied the motion as untimely."); see also ornia Practice Guide: Federal Civil Procedure 16 Schwarzer, Tashima, Wagstaffe, Calif f 17 Be ore Trial, § 1 4:64. Additionally, pursuant to paragraph 4(g)(1) ofthe Court's 1 8 Standing Order, "[n]o party may file more than one motion pursuant to [F.R.C.P.] 56, 1 9 regardless of whether such motion is denominated as a motion for summary judgment 20 or summary adjudication." 21 It would b e manifestly unfair to allow Defendants to unilaterally ignore the 22 Court's scheduling order and Standing Order while holding Plaintiffs to same. 23 Defendants cannot offer any argument why the rules do not apply to them, or why 24 they did not bring a noticed motion to modify such orders. Nor can they demonstrate 25 good cause for bringing a second dispositive motion so long after the Court's 26 deadline. Due to Defendants' failure to file a proper noticed motion to modify the 27 Court's orders, Plaintiffs are placed in the uncomfortable position of not having C '\ 28 proper notice as to the legal standards applicable to Defendants' ad hoc motion (e.g., 28 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 547 Cas 2:04-cv-OB400-0DW-RZ I Page 50 of 1 01 Filed 07/21/200B standards governing partial summary judgment or a motion in limine). __ ( \ Both sides' pleadings contain detailed allegations as to post -Action Comics No. ) 2 3 Document 339 1 "work for hire" issues. See Plaintiffs' First Amended Complaint, � 32; Defendants' 4 First Amended Counterclaims, � 17. Defendants, like Plaintiffs, could have, but chose 5 not to move for partial summary judgment on these issues presumably because they 6 are brimming with genuine questions of material fact for the trier of fact, as further p. 7 discussed below. Twentieth Century Fox Film Cor v. Entertainment Distrib., 429 8 F.3d 869, 874 (9th Cir. 2005)(reversing grant of summary judgment as inappropriate 9 because "work for hire" disputes present genuine issues of material fact). 10 Accordingly, these "work for hire" issues are properly reserved for trial. 11 B. 12 Defendants Err in Arguing That They May Move the Court on the lle "Work for Hire" Issue in t Form of a Motion In Limine Defendants stated in response to Plaintiffs' objections to their motion for partial 13 14 summary judgment that the "work for hire" issue is "properly the subject of a motion 1 5 in limine." Adams Decl., Ex. E. Motions in limine are appropriately used to 1 6 determine whether specific evidence should be admitted or precluded at trial. _ C ') or 17 Associated Press v. Dist. Courtf Fifth Judicial Dist. ofCol., 542 U.S. 1 3 0 1 , 1 3 03 26 1 8 (2004); Jones, Rosen, Wegner, Federal Civil Trials and Evidence § 4:3 1 9 (2007). Motions in limine "address evidentiary questions and are inappropriate devices 19 f 20 for resolving substantive issues." Natural Resources De ense Council v. Rodgers, 2 1 2005 WL 1 38867 1 , * 1 n.2 (E.D. Cal. 2005). See 75 AM. JUR. 2n TRIAL § 99 (2004) 22 (motions in limine are improper vehicles to raise motions for summary judgment 23 because "[m]otions in limine are not to be used as a sweeping means oftesting issues 24 of law"); Provo Lif & Acc. Ins. v. A ddie, 1 76 F.R.D. 246, 250 (D. Mich. 1 997)(motion e 25 26 For instance. a motion in limine is commonly "to exclude anticinated nreiudicial evidence before the evidence is actuallv offered." Luce v. United States. 469 U.S. 3 R . 40 ( ] 9 R4) . 26 Snecificallv. in limine nractice nrevents evidence from beinll submitted at trial as it is imnossible is offered and then 27 Associated to "unrinll the bell" when nreiudicial evidence of Colo . 542 U.S. 1 stricken. See Press v. District Court f Fifth Judicial Dist. or 30 1 . 1 303 (2004): McEwen v. Citv of Norman Okla. . 926 F.2d 1 539. 1 54R (] Otb Cir. 1 99 1 ) ; Jones, 28 Rosen, Wegner, Jones, Federal Civil Trials and Evidence 4-46- 4-54 (2007) . ( "- . 29 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 548 ). Cas 2:04-cv-08400-0DW-RZ ( I Document 339 Filed 07/21 /2008 Page 51 of 1 01 in limine cannot be used as a substitute for a motion. for summary judgment). 27 2 The absurdity of Defendants' tactic is underscored by the fact that "work for 3 hire" in a copyright action is an affirmative defense. See Dolman v. Agee, 1 57 F.3d 4 708, 7 1 2 (9th Cir. 1998)("[Defendant] asserted the affirmative defense of work for 5 hire"); Livingston v. Morgan, 2007 WL 2 140900, *3 (N.D. Ca1 2007)('''work for 6 hire' is an affirmative defense"). As such, De endants have the "initial burden of f 7 production on this issue," and must present "credible evidence" that the work at issue 8 was created at the "instance and expense" oftheir predecessor. Dolman, 157 F.3d at 9 712. A motion in limine is not the mechanism to meet such evidentiary burdens. 10 II "summaryjud gment motions disguised as motions in limine will not be heard." 12 Scheduling Order of the Hon. Stephen G. Larson under F.R.C.P. l 6(b), � 3 (emphasis 13 ( Finally, and perhaps most notably, this Court expressly admonishes that added). Defendants' proposed briefing on this issue represents little more than an 14 end-run around the Federal Rules and this Court's Orders. 15 16 17 18 19 20 21 22 23 24 25 c. The "Works Made for Hire" Issues Implicate Numerous Genuine Issues of Material Fact :rhat Prohibit Summary Judgment Notwithstanding its fatal procedural defects, Defendants' dispositive motion must fail because of the fact-heavy analysis such "work for hire" determinations necessarily entail. This is particularly acute with respect to the early Superman stories created by Siegel and Shuster decades ago. By de finition, whether a work is "made for hire" is a mixed question offact and law. Twentieth Century, 429 F.3d at 874-75. As Siegel and Shuster's Superman stories were created before 1 978, the Copyright Act of 1909 governs. See Self-Realization Fellowship Church v. Ananda Church o Self-Realization, 206 F.3d 1 322, 1326 (9th Cir. 2000). However the 1 909 f Act did not define the terms "work made for hire" or "employer." See 17 U.S.C. § 26 26 ( 27 California state law is in accord. A motion in limine is never an appropriate substitute for a motion for summary judgment or suTth mary adjudication. See R&B Auto Center, Inc. v. 27 Farmers Group, Inc., 140 Cal. App.4' 327, 371-372 (2006)(Rylaarsdam. J., concurring)("To pleading or the existence of triable issues of material fact decided 28 have the sufficiency of the in the guise of a motion in limine is a perversion of the process . . . Motions in limine are properly used to determine whether specific evidence should be admitted or precluded"). 30 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 549 Cas 2:04-cv-OB400-0DW-RZ Document 339 Filed 07/21/200B Page 52 of 1 0 1 1 (repealed)("In the interpretation and construction of this title[,] . . . the word ' author,' _ 2 shall include an employer in the case of works made for hire."). In most cases unde 3 the 1909 Act, federal courts applied the work for hire doctrine only to traditional 4 hierarchical employment relationships. Twentieth Century, 429 F.3d at 877. 5 However, "[i]n the last decade of the [1 909] Act the Courts expanded the doctrine 6 somewhat to include less traditional relationships." !d., quoting Self-Realization, 206 7 F .3d at 133 1 . The Ninth Circuit eventUally formulated an "instance and expense" test 8 for "works for hire" under the 1 909 Act: 9 10 11 12 13 lJ "[W]hen one person engages another, whether as employee or as an independent contractor, to produce a work of an artistic nature, that in the absence of an express contractual reservation of the copyright in the artist, the presumption arises that the mutual intent of the parties is that the title to the copyright shall be in the person at whose instance and expense the work IS done." Lin-Brook Builders Hardware v. Gertler, 352 F.2d 298, 300 (9th Cir. 1 965). 14 Thus the Ninth Circuit has consistently required that the claimant come forth 15 with "credible evidence that the work was done at the 'instance and expense' of the 16 commissioning party." Self-Realization, 206 F.3d at 1326, quoting Dolman, 157 F.3d 17 at 7 1 1 -712. Work-for-hire analysis under the 1 909 Act requires an evaluation of the 18 "actual relationship between the parties, rather than the language of their agreements, 19 in determining authorship ofthe work." Marvel Characters v. Simon, 3 1 0 F.3d 280, 20 291 (2d Cir. 2002), citing Donalson Pub. Co. 21 F.2d 639, 640-42 (2d Cir. 1 967). 22 23 1. v. C) Bregman, Vocco & Conn, Inc., 375 The "Instance" Component of the Test The "instance" prong of the test inquires into "whether the motivating factor in 24 producing the work was the employer who induced the creation." Twentieth Century, 25 429 F.3d at 879. This inquiry focuses not on generalities but on specific historical 26 facts. For instance, even a work created by a traditional employee "as a special job 27 assignment, outside the line of the employee's regular duties" may not be a "work 28 made for hire." Shapiro Bernstein & Co. v. Jerry Music Co., 22 1 F.2d 569, 570 (2d C) 31 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 550 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21 /2008 Page 53 of 1 01 24 25 ( Cir. 1 955) ; Martha Graham Sch. & Dance Found., Inc. v. Martha Graham Center of Contemporary Dance, Inc., 380 F.3d 624, 635 (2d Cir. 2004). The "instance" requirement is also "shaped in part by the degree to which the hiring party had the right to control or supervise the artist's work," as reflective of the work's creation within a defined "employment" relationship. Twentieth Century, 429 F.3d at 879 (emphasis added). This factual inquiry naturally focuses on the contractual right to control and supervise the work's creation, not on the "employer's" conduct. See Martha Graham, 380 F.3d at 635 ("The right to direct and supervise the manner in which the work is created need never be exercised.") (emphasis in original). The fact Defendants owned Action Comics No. I or even Superman is not dispositive, as under the 1 909 Act the additional material contained in Siegel and Shuster's subsequent Supennan stories could be owned by them even though such works were necessarily derivative. 17 U.S.C. §7 (repealed). Thus, under the 1 909 Act "[t]he aspects of a derivative work added by the derivative author are that author's property, but the element drawn from the pre-existing work remains on grant from the owner of the pre-existing work." Stewart v. Abend, 495 U.S. 207, 223 ( 1 990). The right to control a work's creation then, as a matter of law and logic, refers to a contractual right to control the creative process.28 Here, without limitation, other than the March 1, 1 93 8 grant of the Action Comics, No. I story, Siegel and Shuster di . not enter into any agreement regarding further Supennan works until their agreements with Detective Comics and McClure Newspaper Syndicate, both dated September 22, 1 938. Adams Dec!., Ex. L at �� 24, 39. In the interim, Siegel and Shuster created the Supennan stories published in Action Comics Nos. 2-6, from May 25, 1 93 8 to September 26, 1 938,z9 28 28 29 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 23 The "right to accept, reject or modifY" a work necessarily refers to a work's creation, not to a publisher's superior position once a work is substantially completed. See Twentieth 26 Century, 429 F.3d at 880 (contrasting publisher's "typical process for most books [of] waiting for the manuscript to be completed, and then discussing possible improvements with 27 the author.") ( Action Comics No. 2 was published May 25, 1938 (Copyright Reg. No. B379788); Action Comics No. 3 was published June 25, 1938 (Copyright Reg. No. B385466); Action Comics 32 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 551 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Document 339 Filed 07/21/2008 Page 54 of 1 01 2. The "Expense" Component ofthe Test _ A work is created at a party's "expense" if that party takes on "all the financiaL) risk" ofthe creation. Twentieth Century, 429 F.3d at 881 ; see also Communityfor Creative Non-Violence v. Reid, 490 U.S. 730, 741 (1989). The publisher must be on the hook to pay a sum certain to the creator prior to creation regardless of whether the work is accepted or published. Id. The focus is not on whether the sum is "certain" (purchases of non-work for hire material are just as often for a "sum certain") but whether the putative employer must "certainly" pay the sum. 30 The Ninth Circuit, for example, found it critical that the author "had [not] begun drafting the [work] before he reached his agreement" with the publisher spelling out his compensation. Twentieth Century, 429 F .3d at 880. 3. "Work for Hire" Turns on Mutual Intent of the Parties Whether a work was "made for hire" turns on the "mutual intent ofthe parties [] that the title of the copyright shall be in the person whose instance and expense the work was done." Lin-Brook, 352 F.2d at 300. As in this case, the parties' mutual C �\ intent often entails genuine issues of material fact for the trier of fact barring summary judgment. See Twentieth Century, 429 F.3d at 874-75(reversing summary judgment because "there were genuine issues of material fact as to [the parties'] intent on the work-for-hire issue."); May v. Morganelli-Heumann & Assoc., 618 F.2d l 363, 1368 (9th Cir.1 980) (reversing summary judgment due to "questions of fact as to the parties' intent"); 3 Nimmer 12.1O[A] ("[Q]uestions . . . as to the parties' intent . . . are for the trier of fact."). See also Self-Realization, 206 F .3d at l 326 (reversing summary judgment "on the critical issue of intent" with respect to assignment of copyright). Under the 1909 Act, employment of a party to create an artistic work at the _ an 25 No. 4 was published July 25, 1 938 (Copyright Reg. No. B387907); Action Comics No. 5 was (Copyright Reg. No. B394784); Action Comics No. 6 was 26 published August 25, 1 938 published September 26, 1938 lCopyright Reg. No. B394886). 27 30 (- ) The "sum certain" factor arose for purposes of contrasting such fixed payments with contingent "royalty" payments, the latter being held to "generally weigh against finding a 28 ' work-for-hire relationship." Playboy Enterprises v. Dumas, 53 F.3d 549, 535 (2d Cir. 1995 'see also Twentieth Century, 429 F.3d at 8 8 1 . 33 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 552 Cas 2:04-cv-OB400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ( 28 Document 339 Filed 07/21 /200B Page 55 of 1 01 "instance and expense" of the employer gives rise to a ''presumption '' that the parties both intended that title to the copyright belong to the employer. See Lin-Brook, 352 F.2d at 300; May, 618 F.2d at 1368. However, such "work for hire" presumption is entirely rebuttable. Dolman, 157 F.3d at 712 ("[E]ven if [defendant] had established that [plaintiff] created the songs at the instance and expense of [his employer] . . . [plaintiff] rebutted the work for hire presumption."); Twentieth Century, 429 F.3d at 874-75 (work for hire presumption may be rebutted "by evidence that the parties did not intend to create a work-for-hire."); May, 618 F.2d at 1368; 1 Nimmer § 5.03 ("The provision of former Section 26 . . .must be read as creating a presumption of copyright in the employer, which may be rebutted"). It is "proper, then, for the trier of fact to consider extrinsic evidence to determine whether the parties intended to contract contrary to the presumption of the 'works for hire' doctrine" and "[s]uch evidence includes prevailing custom and usage" at the time the work in question was created. May, 618 F.2d at 1368. Thus courts have often refused to apply the work for hire doctrine even in the context of a traditional employer-employee relationship. See e.g., Dolman, 1 57 F.3d at 712 (no evidence that songs written within scope of author's employment); Shapiro, Bernstein, 221 F.2d at 570 (2d Cir. 1955)(same); Forward v. Thorogood, 985 F.2d 604, 606-7 (1st Cir. 1993) (plaintiff paid studio to create ,demo tapes but "neither employed nor commissioned the band members"). 4. Summary Judgment on "Work for Hire" Defense Is Disfavored It is clear from all of the above that "work for hire" analysis is a particularly f intensive inquiry that does not lend itself to disposition by summary judgment. act For this reason summary judgment is disfavored on "work for hire" issues. As noted by Nimmer with regard to the analogous 1976 Copyright Act: "Most court cases present a battle between two versions of the events. It is for the jury to sort out the competing claims and determine where truth lies. Thus, even when the arena of battle arises over a distinctive policy of the Copyright Act - for example does a given work qualify as having er been made for hire? - the questions of historical fact . . . are (or the finG of fact. To the extent that questions arise as to the parties' intent, 34 PLAINTIFFS' MEMORANDUM POlNTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 553 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Document 339 Filed 07/21/2008 Page 56 of 1 01 credibility determinations again are for the trier of fact." 3 Nimmer § 12.1O[A]. Such concerns are no different as to "work for hire" analysis (-) . under the 1909 Act. See Self-Realization, 206 F.3d at 1330 (summary judgment is inappropriate for a work-for-hire determination under the 1 909 Act); Twentieth Century, 429 F.3d at 874-75 (reversing summary judgment under the 1909 Act "because there were genuine issues of material fact"); May, 618 F.2d at 1 368 (same); Simon, 310 F.3d at 292 ("[T]he district court's grant ofs ary judgment to Marvel was erroneous. It will be up to a jury to determine whether Simon was the author of the Works and, therefore, whether he can exercise § 304(c)'s termination right.,,).3 1 Here, the parties will "battle" over Siegel and Shuster's creation of Superman works seventy years ago. At trial Plaintiffs will present numerous exhibits, including voluminous correspondence, notes, business ledgers and receipts to counter Defendants' proffer of evidence in support of their affirmative defense. Plaintiffs will also submit previous testimony from Jerome Siegel and Joseph Shuster. Plaintiffs wil also present live testimony from Joanne Siegel (the original model for Lois Lane) a\ ; experts Mark Evanier and James Steranko as to the circumstances under which SiegeC and Shuster created Superman stories in the late 1930s and the 1 940s and custom and usage at the inception of the comic book industry. May, 618 F.2d at 1368 ("proper, then, to consider extrinsic evidence [as to] . . . prevailing custom and usage"). Genuirie issues of material fact necessarily arise here, and the weighing of evidence and the credibility of witnesses must be undertaken by the trier of fact. Plaintiffs have the inviolate right to cross-examine Defendants' witnesses and to test their credibility in the presence of a jury and vice versa. It is likewise necessary and appropriate for the Court to hear disputed testimony live. The parties' factual allegations concerning the critical "work for hire" issue must be tested in open court. urnm ' See also Dolman, 157 F.3d at 712 (in light of issues of fact, previous summary judgment pear, Inc., ruling on work-for-hire issue reconsidered and tried at trial); Carter v. Helmsley-S 27 7 1 F.3d 77, 87 (2d Cir. 1995)(noting that "work made for hire" analysis is "fact-dependent"); ffCalif orniawear, Inc., 160 F.3d 106, I l l , 1 1 3 (2d Cir. 28 Langman Fabrics v. Gra 31 '\ 1998)("Questions of historical fact relevant to applying each [work for hire] factor are for ( ) � f mder offact. . . . ") . . 35 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 554 Cas 2:04-cv-OB400-0DW-RZ 1 ( 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 , 15 16 17 18 19 20 21 22 23 24 25 26 27 ( 28 VI. Document 339 Filed 07/21 /200B Page 57 of 1 01 DEFENDANTS MUST ACCOUNT TO PLAINTIFFS FOR PROFITS FROM ANY "PRE-TERMINATION" DERIVATIVE WORKS THAT ARE ALTERED POST-TERMINATION A. Defendants May Not Create New Derivative Works on the Basis of Pre-Termination Works Without Accounting to Plaintiffs As Plaintiffs freely admitted and the Court has noted, Plaintiffs are not entitled to profits from unaltered pre-termination derivative works exploited post-termination. Order at 67; 17 U.S.C. § 304(c)(6)(A). However, Defendants must account to Plaintiffs for profits from any new derivative works: "A derivative work prepared under authority ofthe grant before its termination may continue to be utilized under the terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of other derivative works based upon the copyrighted work covered by the terminated grant." 17 U.S.C. § 304(c)(6)(A). See Mills Music, 469 U.S. at 174 n. 42 ("any remake rights covered by the contract would be cut off'), citing H. R. Rep. No. 94-1476, at 127. The Court has therefore ruled that Defendants may exploit "unaltered pre­ termination derivative works" without accounting to Plaintiffs, but has asked for additional briefing regarding the extent to which "[p]ost-termination alterations to pre­ termination derivative works" trigger Defendants duty to account to Plaintiffs. See Order at 68:1-4; March 31, 2008 Order at 2. 1. Defendants Must Account For Any Derivative Work Completed After Apn1 16, 1999, the EffectIve TenmnatlOn Date To begin, it is clear that Defendants must account to Plaintiffs for any "domestic exploitation of the Superman copyright" in any derivative work completed a fter April 1 6, 1 999, the effective termination date. Order at 66:24-25. As Action Comics No. 1 constitutes the first appearance of Superman, including "Superman's name, his alter ego, his compatriots, his origins, his mission to serve as a champion of the oppressed [and] his heroic abilities in general," along with "Superman's distinctiv blue leotard ... a red cape and boots, and his superhuman ability to leap tall buildings, repel bullets, and run faster than a locomotive," any post-termination Superman work 36 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 555 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Document 339 Filed 07/21/2008 Page 58 of 1 0 1 will be derivative, in whole or in part, ofAction Comics No. 1. Order at 40: 10-13, 40:25-41 :2.32 The exploitation of any derivative work "based upon the copyrighted ( ) work [Action Comics No. 1] covered·by the termination grant" requires an accounting to Plaintiffs as its joint owner. 17 U.S.C. § 304(c)(6)(A); see Oddo, 743 F.2d at 633. 33 _ Material Chan e to a Pre-termination Derivative Work Establishes a New Denvatlve Wor or W IC De en ants Must Account While a pre-termination derivative work may "continue to be utilized under the terms of the grant after its termination," Defendants may not exploit derivative works "prepar[ed] after the termination" without accounting to Plaintiffs. 17 U.S.C. § 304(c)(6)(A). The essential question, then, is at what point does the "utilization" ofa pre-termination derivative work amount to a new derivative work? Id. The Copyright Act defmes a derivative work as follows: "A work based upon one or more pre-existing works such as a translation, fictionalization, motion picture version, souna recording, art reproduction, abridgment, condensation; or any other form in which a work may be recast, transformed, or adapted. A worK consisting of editorial revisions, ('\) annotations, elaborationskor other modifications which, as a whole, represent an original wor of authorship, is a 'derivative work.'" 2. 19 17 U.S.C. § 101. Plaintiffs are therefore entitled under 17 U.S.C. § 304(c)(6)(A) and § 101 to receive profits from derivative works modifying, transforming, adapting or recasting pre-termination Superman derivative works. See 1-3 Nimmer § 3.0 l . 20 32 17 18 Defendants clearly could not exploit "new" Supennan derivative works based on prior Supennan derivative works (e.g., the hundreds of Supennan comics from April 17, 1 943 to 21 the present that naturally fall outside the tennination window) without accounting to 22 Plaintiffs as such works are also necessarily derivative of Action Comics No. 1 . 23 24 25 26 33 The House Report on the 1 976 Copyright Act describes the "derivative works exception": "In other words, a film made from a play could continue to be licensed for perfonnance after the motion picture contract had been tenninated but any remake rights covered by the contract would be cut off. For this purpose, a motion picture would be considered a 'derivative work' with respect to every 'preexisting work' incorporated in it, whether the preexisting work was created independently or was prepared expressly for the motion picture." 27 H.R.Rep. No. 94-1476 at 127; S.Rep. 94-473 at 1 1 1 (same). See also 3 Nimmer § 1 1 .02[C][1] at 1 1-21 n.67.1 (a licensee "may not create further derivative works after 28 tennination"}. i) \-. 37 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 556 Cas 2:04-cv-08400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 c 14 15 16 17 18 19 20 21 22 23 24 25 26 27 c 28 Document 339 Filed 07/21 /2008 Page 59 of 1 01 The level of variation required to constitute a "new" derivative work under the Copyright Act is minimal: "[A]U that is needed to satisfy both the Constitution and the statute is that the 'author' contributed something more than a 'merely trivial variation' ...." Ent. Research Group, 122 F.3d at 1221 quoting Sid & Marty Krofft, 562 F.2d at 1 163 n.S. Any "distinguishable variation" of a prior work will constitute a new derivative work, including translations, re-edited motion picture versions, reproductions, abridgments, condensations, and other recasting, transformation or adaptation. 17 U.S.C. § 101; 1-3 Nimmer § 3.01 ("In general, the applicable standard . . . is that ofa 'distinguishable variation' that is more than 'merely trivial."'). See also 3 Nimmer § 1 1.02[C][1] at 1 1-22 ("As with prints of old movies, new copies probably may be printed because this would not constitute 'the preparation after the termination of other derivative works,' but only of other copies of the same derivative work."). As such, even minor alterations of pre-existing material in a new format are considered sufficient to create a derivative work. See Maljack Productions UA V Corp., 964 F. Supp. 1416, 1428 (C.D. Cal. 1997)(holding as a matter oflaw that "pan and scan" changes to a motion picture for its home video release constitute a new derivative work); Manufacturing Co. Artic Int '!, Inc., 704 F.2d 1009, 1013-14 (7th Cir. 1983)(speeded-up version of prior video games qualified as new derivative work)' Mirage Editions, Inc. Albuquerque A.R.T. Co. , 856 F.2d 1 341, 1343 (9th Cir. 1988)(prior art prints encased in a black plastic border resulted in a new derivative work); Roy Export Co. Establishment of Vaduz, Liechtenstein, Black Inc., A. G. Columbia Broadcasting System, Inc., 503 F.Supp. 1 137, 1 149 (S.D.N.Y. 1980)(compiling multiple scenes from prior Charlie Chaplin movies created new derivative work). Thus, any material alteration or addition to a pre-termination Superman work would trigger Defendants' duty to account to Plaintiffs. v. v. v. v. B. Defendants Will Clearly Have to Account for Many Post­ Termination Releases of Pre-Termination Superman Works 38 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 557 Cas 2:04-cv-08400-0DW-RZ 1 1. Document 339 Filed 07/21/2008 Page 60 of 1 0 1 Common Chan es in DVD Releases of Pre-Termination Su erman Wor s Resu t m New DenvatlVe Wor s 2 The release of pre-termination derivative works (e.g., Superman movies and 3 c) animated television series) in a new DVD format will almost invariably result in a 4 "new" derivative work due to the wide variety of changes to the work, including re5 editing, "panning-and-scanning," new audio tracks, the addition of subtitles! foreign- 6 language translations, new commentary tracks, "featurettes," cover art and the 7 collective packaging of all such material associated with a DVD release. 8 As noted above, even the standard "pan-and-scan" process by which the "wide 9 screen" aspect ratios of theatrical films are re-formatted on DVD for the home-video 10 television screen results in a new derivative work.34 Maljack Productions, 964 F. 11 Supp. at 1427-28. Similarly to "pan-and-scan," DVDs contain new audio "mixes" of a film's 5 1 3 soundtrack which materially alter its creative impact and auditory effect. 3 All of 12 ( 14 34 "Panning and scanning" is the process by which a feature film's "aspect ratio" (width in '\ relation to height) is reduced to account for the difference between theatre screens (which i .J 15 "the United States have aspects ratios between 1 .85:1 and 2.40:1) and television screens (which, until quite recently, had aspect ratios of 1 .33: 1). See Maljack Productions, 964 16 F.Supp. at 1 4 1 8 (describing "aspect ratios"); Janine V. McNally, "Congressional Limits on Technological Alterations to Film: The Public Interest and the Artists' Moral Right," 5 High 17 Tech. L.J. 129, 132-33 (1990)(describing "panning and scanning"); Adams Decl., Exs. 0, P. In order to "pan-and-scan" the images, at minimum, portions of the original film image are 18 cut-off to fit onto a television screen, materially affecting the work, itself. Id. In addItion to eliminating part of the picture, the "pan-and-scan process" will often involve creating carner 19 movement where none existed before: for instance, in a "wide shot" in which two characters appear within the frame at the same time, a "pan-and-scan" often "moves" back and forth 20 between the characters, whereas in the original version there was no such movement. Id. A pan-and-scan version can also result in a "cut" where none existed before. All of fuese 21 decisions involve artistic skill and judgment, and are sufficiently "original" to result in the creation of a new derivative work. See M aljack Productions, 964 F.Supp. at 1427-28 22 ("[M]aking artistic decisions about the composition of each frame of the 1963 picture, determining which portions should stay and which should be 'chopped off . . . are sufficiently 23 original to warrant copyright protection for the new pan and scan materiaL") 24 35 For example, many films were originally released in "stereo" sound, which comprises two separate audio "channels," but a DVD release of the film often contains a "Dolby 5 . 1 " audio 25 track, in which there are six different audio "channels" all playing separate sounds that work together to create a new audio effect on the audience. See Bose Corp. v. Jbl, Inc., 1 12 F. 26 Supp. 2d 138, 161 n.5 (D. Mass. 2000)(describing "surround sound"); E prad, Inc. v. Dolby Laboratories, Inc., 209 U.S.P.Q. (BNA) 238, 1980 U.S. Dist. LEXIS 16640 at *927 * 1 3)(describing Dolby's advances in motion picture sound); Adams Decl., Ex. N. Thus, when films are released on DVD, they can and will often contain multiple new audio 28 "tracks." See Williamson Decl., Exs. A (containing new soundtrack mix), B (containing n� . ( "Dolby 5.1" soundtrack mix), C(new presentation ill "Dolby Stereo" in English and "Dolby ) 39 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 558 Cas 2:04-cv-OB400-0DW-RZ Document 339 Filed 07/21 /200B Page 61 of 1 0 1 these re-mixes and adjustments to a film's sound necessarily involve sophisticated 2 artistic decisions about the desired use and effect of the sound that result in the 3 creation of a new derivative work. See 17 U.S.c. § 1 14(b)(a new derivative work 4 results if "the actual sounds fixed in the sound recording are rearranged, remixed or 5 otherwise altered in sequence or quality"); Bridgeport Music, Inc. 6 410 F.3d 792, 804 (6th Cir. 2005)(re-mixes of audio recordings are derivative works); 7 Maljack, 964 F. Supp. at 1 428 ("[Plaintiff! also digitized the soundtrack ofthe 1 963 8 ( 1 movie, remixed it, stereoized the previously monaural sound, and upgraded the quality v. Dimension Films, 9 of the sound, all of which required a creative mixing and balancing of sounds" 10 creating a new derivative work as "[t]he Copyright Office accepts alterations such as 11 remixing and stereoizing as sufficiently original to constitute derivative works."). Similarly, the DVD subtitles feature, which has a choice of several language 12 13 ( translations, also results in a "new" derivative work. 1 7 U.S.C. § 103(a) specifically 14 defines a "translation" of a pre-existing work as a derivative work. The reason for this 15 is clear: Any translation, especially of a creative work, will necessarily result in the 16 exercise of artistic skill and judgment in selecting the most accurate and!or appropriat 17 word to use, and thereby has sufficient originality to constitute a derivative work. A 18 prior film translated in its DVD version thus constitutes a new derivative work by 19 definition. See 1 7 U.S.C. § 1 03(a); Int 'l Film Exchange, Ltd. 20 62 1 F. Supp. 63 1 , 636 (S.D.N.Y. 1985)("[V]alid [derivative] copyrights may [] exist 21 with respect to any English-language, dubbed, or subtitled versions of the Film."); 22 Cambridge Lit. Properties, Ltd. 23 ,, 5 1 0 F.3d 77, 89 n. l l ( l st Cir. 2007)("As a translation, [it] is a derivative work. ).36 v. v. Corinth Films, Inc. , W. Goebel Porzellan abrik G.MB.H. & Co. KG., J 24 25 26 27 28 Mono" in French), D (new Dolby soundtrack mix in re-edited film); Adams Dec!., Ex. N. Even when the original "stereo" soundtrack is included, it can be and usually is upgraded or otherwise altered d uring the process of converting it into a home video format. See Maljack, 964 F.Supp. at 1429. . 36 Similarly, a Superman film or television program "dubbed" in another language also constitutes a new derivative work, as it incorporates both a translated script and performances. See Gamma Audio & Video v. Ean-Chea, 1 1 F.3d 1 1 06, 1 1 09 ( 1 st Cir. 1 993)(holding that dubbed television programs constitute new derivative works). 40 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 559 Cas 2:04-cv-OS400-0DW-RZ Document 339 Filed 07/2 1/200S Page 62 of 1 0 1 Additionally, the common DVD addition of "director's commentary" over the _. 1 () 2 soundtrack of prior works will likewise result in a "new" derivative work. In such 3 commentary, the director (or producer, star, writer, etc.) comments on the movie in a 4 separate audio track that may be played simultaneously with the film, constituting 5 both (a) editorial elaborations on the film itself and (b) a "remix" ofthe film's audio 6 track. See 1 7 U.S.C. § 103(a)(original "editorial revisions, annotations, elaborations, 7 or other modifications" qualify as a derivative work); 17 U.S.C. § 1 14(b)(if "the actua 8 sounds . . . are rearranged, remixed or otherwise altered in sequence or quality," a new 9 derivative work results). DVDs also commonly contain "featurettes" that include film 10 scenes which constitute new derivative works in and of themselves. Any of the above, for the most part, qualitatively alters the film or television 11 12 program itself and does not exist independently of it. Had Defendants merely 13 transferred their Superman films and television series directly to DVDs, without 14 material revisions or additions, the result may be different. However, this clearly is 15 not the case: 16 and television series contain new edits (additions, deletions, rearrangements) ofthe 17 original material, new audio mixes, new foreign-language translations, and new 18 overlaid commentary, which clearly result in a "'distinguishable variation' that is 19 more than 'merely trivial'" and thus qualify as post-termination derivative work for 20 which Defendants must account. 1 Nimmer § 3.03[A] at 3-13 (cit. om.). 21 . Defendants' post-termination DVDs of pre-termination Superman fil£) a. 22 Key Examples of DVD Releases of Pre-termination Works Resultmg m New Denvatlve Works The following notable examples of pre-termination Superman works 23 24 reconfigured for a DVD release amply qualify as "new" derivative works under the 25 legal standards discussed above. 26 • Superman: The Movie (2000): This DVD of the fihn Superman (1978) features 27 eight minutes of additional footage directly incorporated into the DVD version of the 28 film, a restoration of the original footage and soundtrack, a re-mixing of the sound 41 C) PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 560 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 63 of 1 0 1 into Dolby 5 . 1 sound, a commentary track from the director and a creative consultant, 2 and three "featurettes" regarding the production of the film along with screen tests. 3 ( 1 See Williamson Decl., Exs. A, B; Adams Decl., Exs. Q, R. 4 • Superman II: The Richard Donner Cut (2006). This revamped "cut" of the pre- 5 tennination film Superman II (1 980) was edited by director Richard Donner 6 ("Donner"), the original director of Superman: The Movie (1978). See Williamson 7 Decl., Ex. C, D; Adams Decl., Exs. S, T. Donner was fired from Superman II and it 8 was completed by another director, Richard Lester. See Adams Decl., Ex._. This is 9 essentially a different film than the original Superman II, using ample footage not 10 11 the plot, ending, and many ofthe individual scenes contained therein. Adams Decl., 13 "- containing a different ending. Id. Exs. S-V. This "new" version of the film changes · 12 c- ..' used in the original theatrical release, with the scenes edited in a different order and Ex. U at E l . The DVD release also includes an introduction by Donner, a feature- 14 length commentary track, a "featurette" on the making of the movie, deleted scenes, 15 and subtitles in English, French and Spanish. Id. ; Williamson Decl., Exs. C , D. 16 • The Adventures o Superman (2005, 2006): This television series originally ran f 17 on network television (1952-1958). See http://www.amazon.com. The DVD releases 18 include commentary tracks, additional featurettes, "closed captioning" subtitles, and 19 French and Spanish subtitles. !d. 20 21 2. Wor s ExceptIOn 22 23 their accounting obligation, De endants have the burden of proving that their postf 24 tennination exploitation of a Supennan work falls under this statutory exception. See 25 Woods v. Bourne Co., 60 F.3d 978, 993 (2d Cir. 1995) (burden of proving Section 26 304(c)' s "derivative works exception" falls on the grantee, under general rule that the 27 ( To the extent Defendants invoke the "derivative works exception" to reduce burden falls on party claiming rights under a statutory exception); 3 Nimmer § 28 1 1 .02[C][2] at 1 1-28 (2006) (The derivative works exception falls under "the general 42 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 561 Cas 2:04-cv-OB400-0DW-RZ Document 339 Filed 07/21/200B Page 64 of 1 01 1 rule that the burden falls on a party claiming rights under a statutory exception."); 2 Mills Music, 469 U.S. at 1 88 (White, J., dissenting)("In attempting to claim for itsel 3 the benefits ofthe derivative-works exception, Mills bears the burden ofproof."). 4 Given that Defendants have the burden of proving this statutory "derivative . _ L) 5 works exception," Plaintiffs have not presented all post-termination alterations of pre- 6 termination derivative works that will be at issue at trial. !d. However, as "the 7 question of whether [a work] is derivative is a mixed question of law and fact," the 8 Court should establish guidelines based on the implicated questions of law that will 9 govern and simplify the conduct of the trial. Jarvis v. K2 Inc., 486 F.3d 526, 53 1 , n.5 v. 10 (9th Cir. 2007). See Sega Enters. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1 992) 11 ("[D]etermination ofthe correct legal standard to apply . . . is a question of law."); 12 Cessna Air. Co. v . Hartf Accident & Indem. Co. , 900 F.Supp. 1 489, 1 500 (D. Kan. ord 13 1 995)(Court may rule on "purely legal issues" of a "mixed question of law and fact).37 14 Specifically, the Court should order Defendants to account to Plaintiffs for pre- () IS termination derivative works that have been modified post-termination when such 16 alterations constitute a '''distinguishable variation' that is more than 'merely trivial.'" 17 1 Nimmer § 3.0 1 , quoting Entertainment Research Group, 122 F.3d at 1 22 1 . The 18 Court should further order that, without limitation, Defendants must account to 19 Plaintiffs for profits from DVD releases ofpre-termination Superman works that 20 contain one or more of the following, as such clearly results in a new derivative work 21 under this legal standard: (a) new addition or editing of footage; (b) new "pan-and- 22 scan" reformatting; (c) new audio "mixes;" (d) new foreign-language subtitles or 23 "dubbed" foreign-language audio tracks; (e) new overlaid "commentary" track(s); and 24 (f) additional DVD modifications/features determined at trial. 25 26 37 See also Chapman v. Pacific Tel. & Tel. Co., 6 1 3 F.2d 1 93, 1 98 (9th Cir. 1 979)(Courts may issue pre-trial order to "clarify and simplify the issues at trial"); Biggers v. Bankers Bond Co., 1 7 1 F.Supp. 94, 95 (D. Ky. 1 959)(Court may issue ruling "to simplify the issues, 27 clarify the questions of fact on eliminate from the controversy all questions of law .) and to which proof is to be offered and which questions of fact are ultimately to be submitted to tV" 28 jury for its determination."). l 43 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 562 Cas 2:04-cv-OS400-0DW-RZ ( Filed 07/21 /200S Page 65 of 1 01 VII. DEFENDANTS CANNOT USE THEIR ALLEGED "TRADEMARKS" TO DEVALUE OR ENCUMBER PLAINTIFFS' COPYRIGHTS 2 ,, As a preliminary matter, Defendants may not use their alleged "trademarks 38 I 3 4 5 6 7 8 9 10 11 12 13 ( Document 339 14 15 to prevent Plaintiffs' exploitation of their rights as a copyright co-owner, as that woul improperly elevate their trademarks above Plaintiffs' copyright(s) in contravention of the U.S. Supreme Court's decision in Dastar Corp. v. Twentieth Century Fox Film Cor , 539 U.S. 23, 33-34, 123 S. Ct. 204 1 , 156 L. Ed. 2d 1 8 (2003). In Dastar, the p. Supreme Court ruled that trademark owners could not use their trademarks to block others from exploiting a television series in the public domain, holding that trademark law is necessarily subsidiary to copyright law, and should not be construed so as to conflict with copyright law. Id. at 29-3 1 , 37, 38. "The Lanham Act was intended to make 'actionable the deceptive and misleading use of marks,' and to 'protect persons engaged in . . . . commerce against unfair competition.'" Id. at 2 6 citing 15 U.S.C. § 1 127. Dastar holds that when extending trademark protection to communicative products one may not encroach on the constitutional domain of copyright law: 18 "The problem with this argument according special treatment to communicative products is that it causes the Lanham Act to conflict with the law of copynght, which addresses that subject specifically . . . Thus, in construing the Lanham Act, we have been 'careful to caution against misuse or over-extension' of trademark and related protections mto areas traditionally occupied by patent or copyright." 19 Id. at 33-34 (cit. om.). See Tra ffix Devices v. Mktg. Displays, 532 U.S. 23, 29 (2001). 16 17 20 Accordingly, if an assertion of trademark conflicts with copyright, trademark 21 law must yield. See Je ffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27, 22 32 (2d Cir. 1 995)("[C]ourts should proceed with caution in assessing [trademark] 23 claims . . . so as not to undennine the objectives of [copyright law] ."); 1 Nimmer § 24 1 .0 1 ("[T]rademark law itself must be construed in such a way so as not to undennine 25 copyright protection . . . Courts have long limited application of the Lanham Act so as 26 38 Defendants have broadly claimed a trademark in the name "Supennan" across most media and products, including but not limited to "Comic Magazines," "Books," "Motion Pictures, and "Clothing." See 28 Television Programs, Animated Cartoon Films and Water Shows," Declaration of Michael Bergman in Support of Defendants MSJ ("Bergman MSJ Dec!.") Ex. P at 1 6 1 , 1 65, 1 68-170. 44 27 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 563 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 66 of 1 01 f � 1 not to encroach on copyright interests."); 1 McCarthy on Trademarks and Un air th 2 Competition § 6: 1 7.50 (4 Ed.)("[T]rademark law cannot be used as a substitute for . C) 3 copyright."); 1 Gilson on Trademarks § 2A. 1O (same); Laura A. Heymann, Article, 4 The Trademark/Copyright Divide, 60 SMV L. Rev. 55, 8 1 (2007)(Dastar "proceed[s] from a belief that, as between the two, copyright law enjoys a natural preeminence ,, 6 over trademark law. ). 39 5 Similarly, the Ninth Circuit ruled in Comedy III Prods. v. New Line Cinema, 7 8 200 F.3d 593, 595 (9th Cir. 2000) that the owner of trademark interests in the Three 9 Stooges could not use its trademark to block another party from exercising its right 10 under the Copyright Act to exploit a Three Stooges film clip in the public domain: " rTlthe footage at issue here was clearly covered by the Copyright Act, 1 7 U.S.C. § lD6, and the Lanham Act cannot be used to circumvent copyright law. . . .Issues of secondary meaning are not the point here, but ratber the question is whether Comedy III has articulated a trademark interest in the clip which would ]Jrevent New Line from using it in a motion picture wIthout Comedy III's permission." 11 12 13 14 £) While Dastar and Comedy III addressed situations in which copyrighted wor 15 had entered the public domain, their holdings are no less applicable to copyright 0 17 interests recaptured under the Copyright Act. 17 V.S.c. § 3 04(c) .4 Nothing in the 16 18 Copyright Act suggests that a recaptured copyright should be restricted by trademarks 19 39 20 21 22 23 24 25 26 27 28 See Ets-Hokin v. Skyy S pirits, 225 F.3d 1068, 1 080 (9th Cir. 2000)("For good reason, the Supreme Court cautions against mixing the doctrines of trademark and copyright."); EM! CatalolJue P 'ship v. Hill, Holiday, Connors, Cosmopulos, Inc., 228 F.3d 56, 63 (2d. Cir. 2000) (purported trademark use IS an "unwarranted extension into an area already protected by copyright law."); RDF M edia Ltd. v. Fox Broad. Co., 372 F. Supp. 2d 556 (C.D.Cal. 2005)("If . . . 'visual expression' necessarily will form . . . the 'trade dress,' then every incident of visual expression would be subject to copyright and trademark protection and that protection would last in perpetuity. This theory has been rejected on numerous occasions."). 40 The reasoning of Dastar applies with equal force to works that continue to be protected by copyri�ht. See Gen. Universal S s., Inc. v. Lee, 379 F.3d 1 3 1 , 1 48-49 (5th Cir. 2004) y (applymg Dastar to a claim regarding a copyrighted computer program); Williams v. UMG Recordings, 281 F. Supp. 2d 1 177, 1 1 85 (C.D. Cal. 2003)("[T]he Supreme Court's holding did not depend on whether the works were copyrighted or not. While the film footage at issue in Dastar was not copyrighted at the time of distribution by Dastar, the Court's holding is in no way limited to uncopyrighted material."); Turtle v. Castle Records Inc. , 2004 U.S. Dist. LEXIS 29124 (N.D. Cal. 2004)("the broader principles discussed in Dastar make clear that the Court's definition of 'origin' under the Lanham Act was not limited to cases involving [unprotected] work."). ( "45 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 564 ) Cas 2:04-cv-08400-0DW-RZ ( Document 339 Filed 07/21 /2008 Page 67 of 1 01 1 developed by a previous grantee. Id. Indeed, such a notion is antithetical to the strong 2 legislative policies behind the termination right; namely, to give authors an 3 opportunity to reap the financial rewards of their creations' eventual success, despite 4 their unequal bargaining position at the outset. See Mills Music, 469 U.S. at 1 72-173 5 citing H. Rep. No. 94-1476, at 124 (1976). Yet Defendants intend to use their alleged 6 trademarks to devalue the copyrights recaptured by Plaintiffs under the Copyright Act, y 7 much as the trademark owners in Dastar and Comed 111 tried to use their trademarks 8 to prohibit the rightful use of works in the public domain under the Copyright Act. 9 It bears emphasis that trademarks are meant to protect against consumer 1 0 confusion, not to grant proprietary monopolies in perpetuity. See Qualitex Co. v. 1 1 Jacobs. Prod. Co. , 5 1 4 U.S. 1 59, 1 63-64 ( 1 995)(Trademarks "reduce the customer's 1 2 costs of shopping and making purchasing decisions"); Dastar, 539 U.S. at 32_33.4 1 13 C. The clear legislative objectives of the Copyright Act's recapture right will be 1 4 thwarted if misconstrued to apply only to aspects of a copyright that had not been 1 5 trademarked by a prior grantee. Defendants cannot use their trademarks to undercut 1 6 the economic benefits flowing from Plaintiffs' Section 304(c) termination by claiming 1 7 that an unspecified portion of Defendants' profits i s "really" attributable to trademarks 1 8 rather than their jointly-owned Superman copyrights. The Lanham Act may not serve 1 9 as an easy end-around the Copyright Act.42 Dastar, 539 U.S. at 29-3 1 , 37, 38. 20 41 f ffix, See also Sheldon W. Halpern, Article, A High Likelihood of Con usion: Wal-Mart, Tra M oseley, and Dastar - The Supreme Court's New Trademark Jurisprudence, 6 1 N.Y.U. 21 ANN. SURV. AM. L. 237 (Dastar sought to "constrain trademark, or at least the expanding 22 Lanham Act 43(a) version of it, to its traditional consumer focus and away from proprietary interests .... The Court, in clearly restraining expansion of trademark law, seeks to redirect the 23 law's focus to its traditional consumer-related concerns and away from the development of proprietary rights; an attempt to reverse the drift of trademark rights toward a "property-like" 24 construct and away from a limited 'right appurtenant. '''). 25 42 See Lauren Beth Emerson, Note, Termination o Trans er o Copyright: Able to Leap f f f Trademarks in a Single Bound? 75 FORDHAM L. REv. 207 at 250-5 1 (2006) (re: Plaintiffs' Dec!. Relief claim regarding Superman' s "crest" in Action Comics No. 1 (Plaintiffs' First 26 Amen. Complaint, �� 60-64): 27 ( 28 " . . . [the Court] should grant the Siegels the declaratory relief they seek . . . .Where applying trademark law would necessarily conflict with provisions in the Copyright Act, such as the termination provisions, trademark law must yield. Though the Supreme Court [in Dastar] addressed this issue in a different context, the principle 46 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 565 Cas 2:04-cv-08400-0DW-RZ 1 D ocument 339 Filed 07/21/2008 Page 68 of 1 01 Defendants' trademarked communicative works cannot prevent Plaintiffs frOIIl.-. 2 exploiting derivative works based on its jointly owned Superman copyright(s) as 3 () copyright ownership clearly entails the right to prepare and distribute derivative works 4 and/or to authorize others to do so. 1 7 U.S.C. § 106(2), (3). A derivative work is a 5 work in any form in which the underlying work "may be recast, transformed, or 6 adapted." 1 7 U.S.C. § 1 0 1 . Plaintiffs, as co-owners of the Action Comics No. 1 7 copyright, therefore enjoy the full right to prepare and distribute, and to authorize 8 others to prepare and distribute, derivative works of Action Comics No. 1 . 9 10 11 A. Defendants Cannot Prevent Plaintiffs From Using The Name Superman In Exploiting Action Comics No. 1 or Derivative Works The Court correctly ruled that "Superman's name . . . does not remain within 12 defendants' sole possession to exploit." Order at 40:8-1 3 . Defendants were forced to 13 concede this point but continue to hedge: "Plaintiffs as co-owners of [Action Comics 14 No. 1] are free to use the Superman name to accurately and truthfully identify any 1 5 future exploitation oftheir own, so long as such use (1) does not infringe any of the . C) 16 unterminated copyrighted material still held by Defendants, and (2) does not cause a 17 likelihood of confusion as to source, affiliation or sponsorship of such a product with f 1 8 De endants, which would constitute a violation ofthe Lanham Act." Defendants 1 9 Reply in Support of Motion for Clarification/Reconsideration ("Defs. Clr. Reply") at 20 1 1 :21-12:3. Previously, Defendants argued that names are "not the subject matter of 2 1 copyright protection" and that "the word 'Superman' has become a valuable 22 trademark exclusively owned by DC Comics." Defendants Motion for 23 ClarificationlReconsideration ("Defs. Cl. Motion") at 19:25- 20:8. 24 25 26 27 28 as the Court articulated it is broad and equally applicable here. Allowing trademark rights to trump the Copyright Act would render the termination of transfer provisions effectively futile . . . Trademark rights are granted not for the benefit of the commercial entities that exploit them, but for the benefit of the consumers who use trademarks to distinguish merchandise. The scope of the copyright returned to the Siegels, therefore, must be limited only by the four comers of the comics themselves, and not by DC Comics' trademarks." 47 CJ PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 566 Cas 2:04-cv-08400-0DW-RZ ( Document 339 Filed 07/21/2008 Page 69 of 1 01 It is noteworthy that while copyright generally does not apply to names per se, 1 2 or to the isolated use of names, courts have extended copyright protection to names to 3 the extent they serve to de fine well delineated copyrightable characters. "Superman" 4 is plainly such a character. Compare 37 C.F.R. § 202. 1(a): "[The following are not 5 copyrightable:] words and short phrases such as names, titles, and slogans; familiar jaq LLC v. Sony Corp, 49 U.S.P.Q.2d (BNA) 1341 6 symbols or designs ... ") with Dan 7 (C.D. Cal. 1 998)( enjoining Sony from making its own James Bond movie : "First 8 and foremost, the Defendants intend to use the identical character name ( James ' 9 Bond') ... "); Edgar Rice Burroughs, Inc. v. Manns Theatres, 1 95 U.S.P.Q. (BNA) 1 59, 1 0 1976 U.S. Dist. LEXIS 1 1 754 at *9 (C.D. Cal. 1 976)("Famous character names in 1 1 copyrighted works may not be used by others during the life of the copyright without 12 the authorization of the copyright proprietor."); Universal City Studios, Inc. v. Kamar 13 Industries, Inc., 217 U.S.P.Q. (BNA) 1 1 62 (S.D. Texas 1 982)("'E.T.' actually ( 14 constitutes the story being told. The name 'E.T.' itself is highly distinctive and is 15 inseparable from the identity ofthe character."); Patten v. Superior Talking Pictures, 16 Inc., 8 F. Supp. 1 96, 1 97 (S.D.N.Y. 1 934)("[A] name which has become descriptive, 1 7 and is closely identified in the public mind with the work of a particular author, may 1 8 not, during the life of the copyright, be used. . . ,,) .43 Such holdings are consistent with 1 9 the Court's recent ruling "that the name Superman, by itself, is [not] copyrightable," 20 but the name "Superman" may be freely exploited by Plaintiffs is protected within the 2 1 context of exploiting the copyrighted Superman character and story contained in 22 Action Comics No. 1 . See July 8, 2008 Order at p.3, n. l . For the reasons set forth above, Plaintiffs respectfully request a ruling that 23 24 25 26 27 c 28 43 See also Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004)("Although Gaiman's verbal description of Cogliostro may well have been of a stock character, once he was drawn and named and given speech he became sufficiently distinctive to be copyrightable."); Anderson v. Stallone, 1 1 U.S.P.Q.2d (BNA) 1 16 1 (C.D.Cal. 1 989)("Rocky Balboa is such a highly delineated character that his name is the title of all four of the Rocky movies and his character has become identified with specific character traits ... "); 1 Nimmer on Copyright § 2.12, at 2-1 78.30 (2007)("Although copying of a character's name is not in itself decisive, It is a factor to be considered in determinmg whether the character as appropriated is sufficiently distinctive to constitute an infringement.") 48 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 567 Cas 2:04-cv-OS400-0DW-RZ Document 339 Filed 07/21/200S Page 70 of 1 0 1 1 Defendants may not use their alleged trademark in the name "Superman" to prevent OJ . L) 2 discourage Plaintiffs from using Superman's name in connection with the exploitati 3 of the Superman character and story in Action Comics No. 1 and in works derivative 4 of Action Comics No. 1. See 1 7 U.S.C. § 1 06(2), (3). 5 6 7 8 9 VITI. DEFENDANTS MUST ACCOUNT TO PLAINTIFFS FOR THE USES OF COPYRIGHT THAT PERVADE DEFENDANTS' EXPLOITATION OF THEIR ALLEGED TRADEMARKS A. Defendants Must Account for "Mixed Uses" of Copyright and Trademark Under the Copyright Act, the words and illustrations, including pictorial 10 symbols which first appeared in Action Comics No. 1 (e.g., the telescoping moniker 1 1 "Superman," and the rendering of the hero in blue tights, red cape and trunks, with an 12 triangulated "s" crest on his chest) are part and parcel of the copyrighted matter that 13 Plaintiffs recaptured under the Copyright Act. 1 7 U.S.C. §304(c). Plaintiffs are 14 entitled to an accounting of profits from any exploitation by Defendants of any such 15 copyrighted matter. See Oddo, 743 F.2d at 632-633; 1 Nimmer §§ 6.03, 6.10 (2006) C) 16 Plaintiffs are just as clearly entitled to an accounting for any "mixed use" of copyright 17 and trademark featuring text, pictures and/or illustrated symbols from or derivative of 1 8 their copyright in Action Comics No. 1 . !d. 19 Defendants made the straw man argument that as a termination "in no way 20 affects rights under any other Federal [or] State . . .laws," 1 7 U.S.C. §304(c)(6)(E), 2 1 Plaintiffs cannot "recover a share of Defendants' profits attributable to DC's 22 continuing use of the Superman trademarks." See Defendants' Motion for Summary 23 Judgment ("Def. MSJ") at 26:3-6. This is not relevant to "mixed uses" of copyright 24 and trademark as the federal Copyright Act also remains intact under Section 25 304(c)(6)(E). A trademark does not bar the application of copyright law to a 26 recaptured copyright. For instance, a trademark would be no defense to copyright 27 infringement. Boyle v. u.s., 200 F.3d 1369, 1 373-74 (Fed. Cir. 2000) ("possession of () 28 49 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 568 Document 339 Filed 07/21/2008 Page 71 of 1 01 1 a service mark is not a defense to infringement of a valid copyright.") 44 2 The Court ruled that "profits defendants garner from the use of Superman 3 trademarks that 'are purely attributable to [those] trademark rights' . . . are not subject 4 to accounting." Order at 68: 1-4, quoting Defendants' Motion for Summary Judgment 5 Reply ("Def. MSJ Reply") at I I . Defendants carry the burden of proof in applying 6 this alleged statutory exception under Section 304(c)(6)(E). See Woods 60 F.3d at 7 993; 3 Nimmer § 1 1 .02[C][2] at 1 1-28 (2006). Yet, Defendants have never articulated 8 what, if anything, constitutes a "pure" trademark use. Defs. MSJ Reply at 1 1 . 9 Defendants essentially conceded that "mixed uses" of trademark and copyright are 1 0 subject to an accounting: '''mixed use' of copyright and trademark rights . . . can be 1 1 dealt with by the Court either at trial or in a subsequent accounting." Id. at 14:5-10. 12 A review of "The Official Warner Bros. Shop" website reveals that the vast l3 majority of Defendants' Superman merchandising constitutes derivative copyright ( 1 4 exploitation or at least a "mixed use" of copyright and trademark. See Adams Decl., 1 5 Ex. W. For instance, all of the following clearly use and/or are derived from 16 copyrighted material in Action Comics No. 1, specifically the heroic Superman 1 7 character, Superman's costume, its color scheme, crest, telescoping moniker, Lois, or 1 8 a combination thereof: 19 20 21 22 23 Exhibit Exhibit Exhibit ji 24 44 See also Hamdad Trust v. A t Newspaper Adver., Mktg. & Communs., Inc, 503 F.Supp.2d 577, 582 n. 6 (B.D.N.Y. 2007)("Trademark frotection is no defense to copyright infringement, because ' although the grant 0 a service mark registration entitles the registrant to certain rights and privileges under the Trademark Act . . . the right to infringe another's F. 26 copyright is not one ofthose."'); Jewelers ' Circular Pub. Co. v. Keystone Pub. Co., 274no 932, 935-36 (S.D.N.Y. 1921)(Hand, J.)("The fact that one owns a trade-mark gives him the 27 right to copy a picture of that mark, nor can he give another the right to use one l?icture's to copy."); M IS alleged cCarthy on Trademarks and Unf Competition § 6:14 ("When air have infringed another's cOl?yright in a work . . . the fact that the defendant has acquired and 28 registered valid trademark fIghts . . . is no defense to the copyright infringement charge.") 25 c 50 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 569 04-cv-OB400-0DW-RZ Document 339 Filed 07/21/200B Page 72 of 1 01 1 2 3 4 5 6 7 8 Exhibit UTlv;;\ 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Exhibit See Adams Decl., '\1 24, Ex. W. B. Defendants' Trademarks Are Derivative Works of Action Comics No. 1, Constituting a "Mixed Use" of Copyright and Trademark Defendants' Superman merchandising is arguably their most consistently 24 lucrative exploitation of the character. To avoid accounting for this profitable sector, 25 Defendants will argue that Superman merchandising profits "are purely attributable to 26 [their] trademark rights," rather than their jointly owned Superman copyrights, and 27 that their trademarks and/or the material underlying their marks are not copyrightable. 28 Such arguments stray far from reality. Defendants broadly claim trademarks 51 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 570 Cas 2:04-cv-08400-0DW-RZ ( Filed 07/21 /2008 Document 339 Page 73 of 1 01 1 the Supennan crest, the telescoping Supennan moniker, Supennan's costume and 2 various graphic depictions of the Supennan character across most media and products. 3 See Bergman MSJ Decl. Ex. P at pp. 1 6 1 -2 1 8. As explained in detail below, these 4 alleged "trademarks" are copyrighted derivative works based on their copyrighted 5 counterparts in Action Comics No. 1. 45 Thus, such post-tennination merchandise 6 necessarily constitute derivative works under the Copyright Act or derivative "mixed 7 uses" of copyright and trademark, for which Defendants must account. 46 See 1 7 8 U.S.C. § 1 0 1 (derivative work is a work in any fonn in which the underlying work 9 "may be recast, transfonned, or adapted"). A work's qualifications as a trademark and/or a copyright are not mutually 10 1 1 exclusive. The Copyright Office "will register a properly filed copyright claim in a 12 print or label that contains the requisite qualifications for copyright even though there 13 is a trademark on it." 37 C.F.R. § 202. 1 0(b). See, e.g., Car-Freshner Cor p. ( v. Auto g. p., 14 Aid Mf Cor 461 F. Supp. 1 055, 1057 (S.D.N.Y. 1 978) (recognizing in trademark 15 infringement action that defendant was also "the copyright owner of [the] logos and 16 designs.") Thus, the mere fact that Defendants use or registered the Supennan shield, 1 7 the telescoping Supennan moniker or Supennan action illustrations as trademarks 1 8 does not negate their derivative copyright status. 19 1. 20 Defendants' Trademarks in Graphic Depictions of Su ennan Necessanly Constitute Denvatlve Copynghts and/or '� Mixed Uses" Defendants have "trademarked" graphic illustrations ofthe Supennan character 21 22 45 The term "copyrighted" as opposed to "copyrightable" is used because under the 1976 Copyri�ht Act a copyrightable work secures a statutory copyright at inception. 1 7 U.S.C. § 24 l02(a)( 'Copyright protection subsists . . . in original works of authorship fixed in any . tangible medium of expression.") 23 25 46 Defendants have stated that the "vast majority" of their uses of trademark "do not involve mixed uses but only uses of the Superman word mark and the 'S' shield logo which is, 26 similarly, not protected by copyright." Defendants' Reply in Suppory of Motion for Clarification ("Def. Claro Reply") at 1 1 :27-28. Even a cursory review of Defendants' 27 merchandising websites ("WE Shop" and "DC Direct"at http://www.wbshop.comlindex.xml 28 and ht1p:lldccomics.comJdcdirect/, respectively) reveal that this is not true. Moreover, the "s" shield and the telescoping "Superman" logo are both copyrightable and clearly derivative ofthe "s" crest and telescoping "Superman" moniker in Action Comics No. 1 . 52 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 571 CaSE 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 74 of 1 01 1 in a wide variety of media and merchandise from clothing to kitchenware to clocks 2 C) 3 4 5 6 No. 1180292 No. 1 178048 No. 1200387 No. 1200233 7 8 9 ' " 10 No. 1201149 1 1 1������-L ' . . . . No. 1201167 No. 1235769 -L __ __ __ __ __ __ __ � __ __ __ __ __ __ __ __ __ __ __ __ __ __ 12 See Bergman MSJ Decl., Ex. P at pgs. 1 82, 1 84-1 89. Clearly, these graphic 13 depictions of Superman are also, by definition, derivative works under the Copyright 14 Act of the illustrated Superman character in Action Comics No. 1 . See 17 U.S.C. § 15 1 02(a)(5)(pictoria1 works, including "works of graphic art, and illustration," are 16 copyrightable); 1 Nimmer § 2.08[B][ 1 ] at 2-84 ("With respect to works of art C) 17 [including illustrations] . . . the requirement of minimal creativity is applied not as a 1 8 matter of policy, but rather as a matter of definition") and 2-85 ("[T]he courts are 1 9 rightly inclined to accept as a work of art any work which by the most generous 20 standard may arguably be said to evince creativity.") 21 22 23 2. The TelescoRing "Superman" Moniker Comprises a "Mixed Use" of Trademark and Copynght The Court correctly ruled that "Superman's name . . . does not remain within 24 defendants' sole possession to exploit" (Order at 40:8- 13) and, as discussed above, 25 courts have extended copyright protection to names to the extent they help define well 26 delineated copyrightable characters. See Section VII(A), infra. Yet, while forced to 27 concede that Plaintiffs may use the Superman name, Defendants continue to hedge. 28 See Def. Clr. Motion at 19:25- 20:8 and Def. Clr. Reply at 1 1 :2 1 - 1 2:3. 53 (J PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 572 Cas 2:04-cv-OB400-0DW-RZ ( 1 Document 339 Filed 07/21 /200B Page 75 of 1 0 1 Defendants have claimed two sets of trademarks with respect to the word 2 "Superman." The first set relate to the use of the name (only) "Superman" with 3 respect to a wide variety of goods and services. See Bergman MSJ Decl, Ex. P at 1 6 1 4 1 74. While Defendants may claim that the use of the "Superman" name, standing 5 alone, would constitute a "pure" trademark use for which Defendants would not have 6 to account to Plaintiffs, it is rarely exploited in this fashion. Instead, Defendants 7 commonly use the name "Superman" in merchandise that constitutes a "mixed use" of 8 their alleged trademark and Plaintiffs' Superman copyrights (e.g., on apparel that 9 resembles Superman's costume in Action Comics No. 1 or by its color configuration 1 0 (yellow and red on a blue backgroun) "mimics" Superman's copyrighted costume l7 11 The second set of trademarks involves the classic three-dimensional telescoping 1 2 "Superman" moniker. 1d., Ex. X at 175- 1 8 1 , 1 83. Whereas, a name or title alone may l3 not be copyrightable, the graphic depiction or illustration of a name or title is 14 copyrightable. See Twentieth Century Fox Film Cor v. Marvel Enters. , 220 F. Supp. p. 1 5 2 d 289, 292 (S.D.N.Y. 2002)(finding logo consisting of an "X" inside a circle had 1 6 "the requisite degree of originality to be copyrightable as a derivative work,,).48 1 7 Defendants' illustrated telescoping 3-D "Superman" moniker is just as clearly 1 8 derivative bf the illustrated telescoping 3-D "Superman" moniker that first appeared i 1 9 Action Comics No. 1, as demonstrated below. 20 21 22 23 24 47 Of course, such use of the "SupennanTM" name is clearly a "mixed use" in any context in which elements of Supennan's appearance, powers, or parts of the Supennan story appear. 25 48 See also O 'Connor v. Cindy Gerke & Assoc., 300 F.Supp.2d 759, 768 (W.D. Wis. 2002)(a 26 corporate logo spinning onto the screen and coming to a stop in the middle of a red ills, Inc. v. Camp Cent. Park, Inc., 1982 background, was copyrightable); Camp Beverly H 27 U.S. Dist. LEXIS 10019, 2 (S.D.N.Y. 1 982)(granting preliminary �unction in favor of 28 plaintiff in action for infringement of copyright in a logo consistmg of stylized version of "CAMP BEVERLY HILLS") 54 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 573 Document 339 Cas 2:04-cv-08400-0DW-RZ Filed 07/21 /2008 Page 76 of 1 01 1 2 3 4 Action Comics No. 1 5 6 • 7 8 10 No. 1 1 08577 No. 1 1 8 1 537 9 The illustrated "Superman" moniker in Action Comics No. 1 is copyrightable as 1 1 a stylized illustration evincing some originality in its design and appearance. See Drop 1 2 Dead Co. v. S. c. Johnson & Son, lnc. , 326 F.2d 87, 89 (9 th Cir. 1963) (holding that 1 3 when a label "has ' some value' as a composition, it is no longer a 'mere label'" and is 14 copyrightable). Specifically, the unique and striking appearance of the "Superman" () 1 5 moniker, including the stylized telescoping effect ofthe letters growing increasing1y 1 6 smaller, their "arching" alignment and their "blocky" three-dimensional effect, all 1 7 evince sufficient originality to qualify for copyright protection. Other logos or 1 8 emblems have been held to be copyrightable, even when they consisted of little more prises, 220 F. Supp. 2d at 292; 1 9 than a letter within a common shape. See Marvel Enter 20 1 Nimmer § 2.08[G][3] at 2-1 37-38 (Courts have rejected the idea that labels or logos 2 1 are not copyrightable, as "the originality required to support a copyright may be of a /Sara Lee, lnc. 22 most minimal nature); Kitchens o v. Nif Foods Corp., 266 F.2d 541 , ty 23 543 (2d Cir. 1 959)(holding an unimaginative chocolate cake label was sufficiently 24 original). Defendants must therefore account to Plaintiffs for any new post25 termination exploitation of the telescoping "Superman" moniker, notwithstanding that 26 Defendants have also trademarked this copyrighted material. 27 28 3. Defendants' SU,1?erman "Crest" Is a Copvrighted Derivative Work of Suoerman' s Crest" in Action ComiciNO. 1 for Which Defendants Must Account () 55 PLAINTIFFS' MEMORANDUM POlNTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 574 Cas 2:04-cv-OB400-0DW-RZ ( , 1 Document 339 Filed 07/21 /200B Page 77 of 1 01 Under the Copyright Act, Defendants' "s" crest or "shield" is also clearly 2 derivative of Superman's "s" crest as it appeared in Action Comics No. 1 , and such 3 drawings are protected "under the general protection accorded to pictorial, graphic an 4 sculptural works." 1 Nimmer § 2.08[G] [ 1 ] at 2-133. See 17 U.S.c. § 1 02(a)(5)(works 5 of authorship defined as including "pictorial, graphic and sculptural works"). 6 Regardless of whether Defendants have separately registered their Superman shield 7 with the Copyright Office, it is a derivative copyrighted work under the 1976 Act, 8 where registration is not a prerequisite to copyright protection. See 17 U.S.C. § 1 0 1 9 ("A 'derivative work' is a work based upon one or more preexisting works."), § 1 0 1 02(a)("Copyright protection subsists . . . in original works of authorship fixed in any 1 1 tangible medium of expression."); § 41 l (a). See also 2 Nimmer § 7.16 [B] [ l ] [b][iii] 12 ("[R]egistration is a formality . . . [not] a condition for copyright protection."). 13 ( The Superman crest in both Action Comics No. 1 . and in its subsequent 14 derivative form, with its unique and striking design and color combination, is clearly 1 5 copyrighted material. 17 U.S.C. § 1 02(a)(5); see 1 Nimmer § 2.08[G][3] at 2-137-38. 1 6 Provided that a logo or label "has 'some value' as a composition, it is no longer a 17 'mere label''' and is the proper subject of copyright protection. Drop Dead Co. , 326 1 8 F.2d at 89 (internal citations omitted). See Pickett v. Prince, 207 F.3d 402, 404 (7th 1 9 Cir. 2000)(holding "Prince's" symbol is copyrightable).49 20 21 Moreover, Superman's crest as illustrated in Action Comics No. 1 forms part of Superman's copyrighted costume and character furtheririg his traits. The triangular 22 design centered on Superman's muscular "V" chest accentuates his "Super-strength" 23 and harks back to the crests of medieval knights, underscoring Superman as a 24 "Champion of the Oppressed." See Action Comics No. 1 at p. 2. 25 ( Defendants cannot seriously contend that their illustrated Superman crest is not 26 49 See also Abli, Inc. v. Standard Brands Paint Co., 323 F. Supp. 1400, 1403 (C.D. Cal. 1 970) (label copyrightable as long as it "was more than merely descriptive and was dictated 27 by more than functional considerations."); Griesedieck W estern Brewery Co. v. Peoples Brewing Co., 56 F. Supp. 600, 606 (D. Minn. 1 944) ("Stag" brand beer logo showing a 28 picture of a stag's head IS copyrightable); Central Mills v. Iced Apparel, 1998 U.S. Dist. LEXIS 1798 at *3 (S.D.N.Y. 1 998)(logos with a face and "tag line" protected by copyright). 56 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 575 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 78 of 1 0 1 1 derivative of the illustrated Supennan crest in Action Comics No. 1 . Both originate 2 Supennan's classic "blue tights" costume in the center ofSupennan's chest; both 3 an inverted triangular shape containing a "blocky" red "s" on a yellow background 4 with a delineated black-lined border, where the "s" "pushes" against the triangulated 5 shape that contains it (see diagram below). The essential difference is that the top two 6 points of Defendants' crest are cropped and the border is colored red to match the red 7 "S." Thus, it constitutes a "derivative work" of Supennan's crest in Action Comics 8 No. 1 . Just as later Supennan "costumes" are clearly derivative of the original 9 illustrated Supennan costume found in Action Comics No. 1, so too are the SU1JSE:qulent l 1 0 variations of Supennan's costume crests. The derivative nature of Defendants' 11 Supennan crest is clearly demonstrated by the graph below comparing the "s" crest to 1 2 Defendants' trademarked "s" crests. See Bergman MSJ Dec!., Ex. P at 1 90-99. 13 14 15 16 17 No. 1 1404 1 8 18 19 20 21 22 23 As the Defendants' Supennan crest constitutes a derivative work under the Copyright Act, its exploitation in new post-tennination works constitute a "mixed use" of copyright and trademark for which Defendants must account to Plaintiffs.50 4. An examination of Defendants' Supennan merchandise consistently reveals 24 copyright exploitation derivative .of Action Comics No. 1 , alone or with "mixed uses" 25 of copyright and trademark. See Adams Decl., Exs. W. Given that Defendants' "s" 26 crest and telescoping "Supennan" moniker are clearly the subject of copyright and 27 28 50 As with the telescoping "Superman" moniker, Defendants often depict their "s" crest against a bri�t blue background simulating Superman's copyrighted costume that is likewise derIvative of that illustrated in Action Comics No. 1. See Section VII(A), in fra. . 57 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 576 Cas 2:04-cv-08400-0DW-RZ ( Document 339 Filed 07/21/2008 Page 79 of 1 0 1 1 derivative of their counterparts in Action Comics No. 1, it is frankly, hard to imagine 2 Supennan merchandise that constitutes a "pure trademark use." Additionally, 3 Defendants' merchandise often contains graphic depictions of the Supennan character 4 that are also derivative copyrights. It is therefore unlikely that Defendants will be abl 5 to meet their burden of proving "pure trademark uses." With respect to "mixed uses" of trademark and copyright, Defendants must also 6 7 carry the burden of demonstrating to the jury that a portion of their profits are 8 attributable to their alleged Supennan trademarks rather than their jointly-owned 51 9 Supennan copyrightS. See Woods v. Bourne Co., 60 F.3d 978, 993 (2d Cir. 1 995) 1 0 (burden of proving statutory exception to tennination provisions falls on the grantee, 1 1 pursuant to general rule that the burden falls on party claiming rights under a statutory 12 exception); 3 Gilson on Trademarks § 8.06 at 3-8 (Most "issues that arise in trademar 13 [present factual issues for the jury] . . . including secondary meaning, descriptiveness, ( 14 mark strength, and abandonment."). 15 C. 16 The Court Should Rule That Defendants Must Account For Mixed Uses of Trademark and Copyright To streamline the trial of this action, the Court should rule that Defendants must 17 1 8 account to Plaintiffs for post-tennination mixed uses of copyright and trademark in 19 Supennan merchandise and otherwise, including the following "mixed uses": (a) the 20 derivative Supennan crest; (b) the derivative telescoping Supennan moniker; (c) 21 "trademarked" graphic depictions of Supennan� (d) the use of any alleged trademark 22 in conjunction with derivative copyrightable Supennan material. 23 IX. 24 25 DEFENDANTS' ADS HAVE NO EFFECT ON PLAINTIFFS RECAPTURED COPYRIGHT IN ACTION COMICS NO. 1 5 1 This is a heavy, if not insurmountable burden, indeed because unlike situations where a 26 trademark stands for the quality of a particular manufacturer and/or for service (e.g" BMW, Mercedes, Gucci) and, as such, attracts consumption, Defendants license Superman to 27 different manufacturers all over the world. The alleged Superman trademarks attract consumption because they stand for the copyrighted Superman character and story beloved the world over. See Dastar 539 U.S. at 32 (2003)("The words of the Lanham Act should 28 not be stretched to cover matters that are typically of no consequence to purchasers. "). , 58 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 577 Cas 2:04-cv-08400-0DW-RZ 1 2 A. Document 339 Filed 07/21 /2008 Page 80 of 1 0 1 Plaintiffs' Recaptured Copyright In Action Comics No. 1 Is Not Encumbered by the Ads Plaintiffs ask this Court to rule that the derivative "promotional 3 announcements" ("Ads") do not limit Plaintiffs' recaptured copyright in Action () 4 Comics No. 1 . If publication of the Ads gives Defendants an exclusive copyright in 5 the Ads' graphic content (e.g., the "image" of Superman from the cover and interior 6 of Action Comics No. 1), then, contrary to the Court's apparent intent, Defendants 7 might prevent Plaintiffs from effectively exploiting their recovered Superman 8 copyrights. See Defs. Cl. Motion at 19: 1 0-12 (Ads are the "first visual appearance of 9 the Superman character in costume"). 10 11 12 1. �ot Itself ic Publication of the Ads "Protected" the Underlying Gra Elements m the Cover of Action Comics No. 1 But DId Convey An ExclUSIve Copynght m Such Underlymg Elements It is a fundamental principle of copyright law that the simple act ofpublication 1 3 does not alter the underlying ownership of a copyright. See Runge v. Lee, 441 F.2d 14 579, 581 (9th Cir. 1 97 1)(although magazine held first publication rights, original 15 author remained "the beneficial owner of the copyright"). Whereas publication 1 6 "protects" a work from entering the public domain, it does not serve to assign the 17 work or its component parts. !d.; Morris v. Bus. Concepts, Inc., 259 F.3d 65, 67 (2d 1 8 Cir. 2001)(author "retained ownership ofthe copyright in the articles" registered in 1 9 magazine publisher's name); Goodis v. United Artists Tel., Inc., 425 F.2d 397, 399 (2 20 Cir. 1 970) ("[C]opyright notice in the magazine's name is sufficient to obtain a valid 2 1 copyright on behalf ofthe beneficial owner, the author or proprietor [of the work]."). 22 It is often (ifnot usually) the case that the publisher will be the first to publish 23 an unregistered work pursuant to a grant or license from the author. See Marascalco 24 v. Fantasy, Inc., 953 F.2d 469, 475 (9th Cir. 1991)(the "usual practice"); Goodis, 425 25 F.2d at 403 ("[S]erialization will often be the 'first publication' ofa work, since much 26 of the value . . . lies in reaching magazine readers before the complete book has been 27 released.") Such a grant or license is just as frequently for limited rights (e.g., C 28 publication, while reserving film rights) or a limited duration (e.g. , five years). Id. a 59 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 578 ) Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21 /2008 Page 81 of 1 0 1 1 403 (author separately granted "first publication" and movie rights). Thus, the mere ( \ 2 act of f publication of a work (or its parts) by a publisher could not possibly divest rrst 3 the author of his work or transform the publisher into the exclusive owner of the 4 5 work's statutory copyright for the full duration of its term. Order at 38:13-19. That Defendants' predecessor, at the time ofthe Ads' publication, solely owned 6 the Ads, the periodicals in which they appeared and Action Comics No. 1 does not 7 alter applicable copyright principles. More importantly, Defendants no longer own 8 Action Comics No. 1 exclusively. As Plaintiffs now stand in the shoes ofthe original 9 author, Jerome Siegel, ownership ofAction Comics No. 1 and the Ads diverge. 10 The "split" between the initial publisher of a copyrighted work and its author 1 1 often arises in the context of first publication in "collective works," like the 1 2 periodicals in which the Ads were published. 3 Nimmer § 10.01 [C][2] at 10-13 13 ("[F]irst publication in a 'collective work,' such as a magazine or other periodical ( 14 under a general copyright notice in the name ofthe periodical publisher, was found 1 5 sufficient to secure the author's copyright in the work even though the author had 1 6 reserved all [other] rights.") 17 In such cases, first publication of material protected by a common law 1 8 copyright does not divest the author or owner of such material of the copyright 1 9 therein. !d. See also Stewart v. Abend, 495 U.S. 207, 216 (1 990)("no support" for the 20 proposition "that the rights of the owner of the copyright in the derivative use of the 2 1 pre-existing work are extinguished once it is incorporated into the derivative work"); rrst 22 Runge, 441 F.2d at 5 8 1 (author retained copyright where magazine f published and 23 secured statutory copyright in work); Goodis, 425 F.2d at 402-03 (publication in 24 periodical "is sufficient to secure the author's copyright in the underlying work," and 25 "does not affect[] the validity or ownership of the copyright [in underlying work]"). 26 Instead, the publisher is deemed to hold the statutory copyright in the 27 underlying work "in trust for the benefit ofthe contributing author" or the author's C 28 successor. See 3 Nimmer § 10.01 [C][2]; Jerry Vogel Music Co. v. Warner Bros., Inc., 60 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 579 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 82 of 1 01 1 535 F. Supp. 172, 1 74 (S.D.N.Y. 1 982)(whereas the publisher "held the copyright in _ () 2 trust for the author" when it first published the work, the author's successors 3 controlled the copyright). 52 In such a case, the author or his successor can freely 4 register and/or renew the copyright to the underlying work in his name. See 1 7 U.S.C. 5 § 408(b)(4)(author of a component of a collective work may register an independent 6 copyright by depositing "one complete copy" of the work); Self-Realization, 206 F.3d 7 at 1 329 (9th Cir. 2000)(holding that "authors [are free] to renew copyrights in 8 periodical contributions even ifthe only initial copyright on the work existed by virtue 9 of the publisher's blanket copyright"). 10 Thus, while the statutory copyright, if any, in the Ads protected the component 1 1 image of Action Comics No. 1 's cover (the "Cover Image") from falling into the 12 public domain, it did not establish a superior copyright in the actual cover ("Cover") 1 3 or divest the Action Comics No. 1 copyright of its Cover. The statutory copyright 14 protecting the Cover Image was held in trust for the authors and successors of the 1 5 underlying work, Action Comics No. 1 , who, in tum, were entitled to secure, and di d() 1 6 in fact secure, a subsisting statutory copyright in the entirety of Action Comics No. 1 1 7 via publication and registration with the Registrar of Copyrights. See Martha 18 Graham, 380 F.3d at 633 (2d Cir. 2004). 19 This result is also entirely consistent with Batjac Productions Inc. v. Goodtimes p. 20 Home' Video Cor , 1 60 F.3d 1223 (9th Cir. 1 998). In Batjac, the derivative film in 2 1 question "published" and secured statutory copyright protection for the elements of 22 the unpublished underlying screenplay. Id at 1235. The first publication of the 23 movie did not vitiate Batjac's ability to obtain a separate statutory copyright in the 24 screenplay; rather, "Batjac had the opportunity to secure [statutory] copyright in the 25 screenplay separate from the movie but chose not to do so." Id. The published film 26 52 See Runge, 441 F.2d at 581("(author] was the beneficial owner of the copyright" though hilton Co., 1 5 F. 27 granting magazine first publicatIOn rights); Quinn-Brown Pub. Corp. v. C Supp. 213, 214 (S.D.N.Y. 1936)("a [publisher that] takers] out copyright in its own name . . . 28 [is] treated as a trustee" for author.); Neva, Inc. v. Christian Dupf. In!'l, Inc., 743 F. Supp. ( 1533, 1548 (M.D.Fla. 1990)("[p]ublication of [work] with the copyright notice of the [publisher] protected the true copyright owner: [the author].") "- 61 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 580 ) Cas 2:04-cv-08400-0DW-RZ ( 1 Document 339 Filed 07/21/2008 Page 83 of 1 01 was thus the only source of statutory copyright protection and those portions of the 2 underlying screenplay contained therein "fell into the public domain with the motion 3 picture." Id. Similarly, the Ninth Circuit recently held in Richlin v. Metro-Goldwyn 4 Mayer Pictures, Inc. , 2008 U.S. App. LEXIS (9th Cir. 2008) at *39, that a film 5 treatment first published in a derivative film could have "become the subject of 6 statutory copyright as a separate and independent work," but "[author] simply failed to 7 secure federal copyright for it." 8 These rulings in Batjac and Richlin would make no sense ifjirst publication in 9 a derivative work somehow prevented the underlying work from independently 1 0 securing a statutory copyright. This is not and has never been the law as it conflicts 11 with basic copyright precepts governing derivative works and protective copyrights 1 2 discussed herein. Here, unlike in Batjac and Richlin, a separate statutory copyright in 13 the underlying work, Action Comics No. 1 , was secured so the result is assuredly ( 1 4 different.53 The Cover Image first published in the Ads was "protected" from the 15 public domain by the periodical's statutory copyright, see id. at *39, while the 1 6 underlying work remained eligible for and secured an independent statutory copyright 4 17 that was neither altered nor encumbered by the derivative Ads. 5 18 53 To impersonate Batjac, Defendants have previously argued that Plaintiffs seek to extend copyright beyond its permissible term. Defs. Cl. Opp. at 8:3-6. As the copyright term under 19 the 1909 Act runs from the date of publication, the term of whatever minimal copyrightable "elements" are contained in the 20 Action Comics No. 1, days later.Ads would run from the Ads' publication, rather than that of 2 1 54 Batjac and other cases concerned and circumscribed their rulings to unregistered screenplays. Batjac, 160 F.3d at 1225 ("[AJ common law copyright in the underlying 22 screenplay does not survive the motion picture's loss of copyright and falls into the public domain due to a failure to renew the movie's copyright.")(cit. om.). See also Shoptalk, Ltd. 23 p., v. Concorde-New Horizons Cor 1 68 F.3d 586, 59 1-93 (2d Cir. 1999)(motion picture had entered the public domain); Classic Film M useum, Inc. v. Warner Bros., Inc., 597 F.2d 1 3 24 25 26 27 28 ( l st Cir. 1 979) (same). These cases can b e explained b y the fact that screenplays for published motion pictures are treated as a special case by the copyright office, as "[wJhere a preexisting unpublished screenplay is embodied in a motion picture," those elements are published. See Compendium II, Compendium of Copyright Office Practices 91 0-04, cited in Batjac, 1 60 F.3d at 1230. Screenplays are given special attention when registered for copyright, as examiners are directed to "question an application for a feature film or a network television production which is limited to the authorship of the 'script, '" as the Office still regards a motion picture as an "integrated, single work, and [l it is unusual for separate claims in component parts of the motion picture to be submitted." Adams Decl., Ex. K, Copyright Office Board of Appeals decision re: "Husbands," May 14, 2002, at 5. 62 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 581 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Document 339 Filed 07/21/2008 Page 84 of 101 As the ownership of the Ads and Action Comics No. 1 has now diverged, the _. statutory copyright in the earlier-published periodical in which the Ad's Cover Imagl) appeared must be viewed as protecting this component of the underlying work for the benefit ofthe author and his successors, not as divesting it. See Plaintiffs' Motion for Clarification and/or Reconsideration ("PIs. Cl. Mot.") at 1 1 :8-12:10; 15:1-16: 12. A separate statutory copyright was secured soon thereafter for Action Comics No. 1 and duly renewed. As Siegel's March 1 , 1 938 grant of this underlying work was properly terminated by Plaintiffs pursuant to 17 U.S.C. § 304(c), Plaintiffs co-own the renewal copyright to Action Comics No. 1 in its entirety. Order at 72:2-4. 2. As the Ads Were Derivative Works of Action Comics No. 1, They Cannot Encumber It It cannot be reasonably disputed that the Ads are plainly derived from the preexisting Action Comics No. 1 and are thus derivative works. Order at 39:6. The key issue is whether Detective Comics' protective copyright in the Ads gives Defendants a . '\ separate and exclusive copyright in the elements of the Cover Image that were incorporated in the Ads. That issue turns on two prongs: (i) whether the Cover Image was sufficiently "original," and (ii) whether such a copyright would impermissibly entangle or "affect the scope of copyright protection" in the underlying Action Comics No. 1 . Ent. Research Group, 122 F.3d at 1219. This is the governing legal analysis that Defendants strenuously avoid because it undermines their entire Ads claim. a. The Variations in the Advertisement are Trivial / Plaintiffs submit that the differences between the Ad's Cover Image and the actual Cover ofAction Comics No. 1 , namely that it is in black and white, reduced and "fuzzy" do not constitute more than trivial variations ofthe prior Cover, and thus do not satisfy the fundamental "originality" prerequisite to copyright protection. Feist Publ 'ns, Inc v. Rural Tel. Servo Co., 499 U.S. 340, 348 (1991). Moryover, even if the variations in the Cover Image were viewed as sufficiently "original" to merit a copyright, as a matter of law such would extend only to the limited visual difJerencef ) . � 63 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 582 Cas 2:04-cv-08400-0DW-RZ ( , Document 339 Filed 07/21 /2008 Page 85 of 1 01 between the Cover Image and the Cover itself. 1 Nimmer § 3.04[A]. 55 2 A trivial or "miniscule variation" between the underlying and derivative work p. 3 will not suffice. Durham Industries, Inc. v. Tomy Cor , 630 F.2d 905, 910 (2d Cir. 4 1980). See Satava v. Lo ry, 323 F.3d 805, 813 (9th Cir. 2003)("creative input by the ,, 56 5 author required to meet the originality standard . . . is not negligible. ) It is well accepted that reproductions, such as the Cover Image, even those 6 7 involving technical skill, do not merit copyrights. See Ent. Research Group, 122 F.3d 8 at 1222 (even "quite difficult and intricate decisions" that "enable one to reproduce or 9 transform an already existing work into another medium or dimension" are 10 insufficient); L. Batlin & Son, 536 F.2d at 491-93 ("true artistic skill" required "to 1 1 make [a] reproduction copyrightable"); Hearn v. Meyer, 664 F.Supp. 832, 835-40 1 2 (S.D.N.Y. 1987)(No originality in reproductions of illustrations where one is "greener 1 3 than the original," and another "lighter than the original which has a bluer sky and a 1 4 deeper brown."); Durham Industries, 630 F.2d at 910 (no originality through "the 1 5 demonstration of some 'physical,' as opposed to 'artistic' skill.") Derivative works are routinely denied copyright when they involve only minor 16 17 - even if perceptible - variations on the underlying work. See, e.g., L. Batlin & Son, 1 8 536 F.2d at 489 (differences in the shape and elements of design were "minor" and no 1 9 sufficiently original to be afforded copyright protection). The changes here, like those 20 of Hearn, supra, were trivial at best - "the cover is shown in black and white instead 2 1 of color, [and] the scale of the artwork itself is diminished . . .. " Order at 37:22-23. 1 w ( 22 23 24 55 See also Silverman v. CBS Inc., 870 F.2d 40 (2d Cir. 1 989) ("[C]opyrights in derivative works secure protection only for the incremental additions of originality contributed by the authors of the . derivative works."). 56 See also L. Batlin & Son, Inc. v. Snyder 536 F.2d 486, 491 (2d Cir. 1 976) ("there must be at least some substantial variation, not merely a trivial variation"); Donald v. Zack M yer's e TV Sales, 426 F.2d 1 027, 1 030-3 1 (5th Cir. 1 970) ("The variation must be meaningful and 26 must result from original creative work," not a "mere copycat."); Gardenia Flowers, Inc. v. arkovits, Inc., 280 F.Supp. 776, 782 (S.D.N.Y. 1 968) (no originality "[w]hen the Josehp M 27 agic M arketing, Inc. v. copynght claimant has added nothing of his own to a work"); M /Pittsburgh, Inc., 634 F.Supp. 769, 771 (W.D. Pa. 1986) (even M ailing Services a 28 "independent efforts" can be "too trivial" to be original). 25 64 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 583 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Document 339 Filed 07/21/2008 Page 86 of 1 0 1 The Cover Image makes little or no original contribution to the Cover and interior _ panel ofAction Comics No. 1 from which it is derived. Given that more substantial ( ) differences in medium and dimensionality are insufficient for copyright protection, it can hardly be said that mere size reduction constitutes originality.57 Miniscule variations in spacing and position are also insufficient to establish originality.58 Nor does mere printing of the color Cover in black and white merit copyright protection. ,, 37 C.F.R. §202.l (a) ("[M]ere variations . . . of coloring" "not subject to copyright. )59 That this purely derivative material was "published" first is beside the point: under the Copyright Act and prevailing case law the completely unoriginal Cover Image does not merit an independent copyright. An Unwarranted Copyright In The Ad's "Cover Image" Improperly Threatens the Copyright in the Underlying Work The second prong ofthe "originality" analysis is necessary in order to avoid granting the owner of a derivative work a "def monopoly" in the underlying acto b. 57 See, e.g., Cosmos Jewelry Ltd. v. Po Sun Han Co., 470 F.Supp.2d 1 072, 1 082 (C.D. Cal. C) 2006) (no originality in depiction of "flower as having five petals slightly overlapping, slightly longer than they are wide, and with slightly pointed tips," with dif ferent types of "finish"); Past Pluto Prods. Cor v. Dana, 627 F.Supp. 1435, 1 440-43 (S.D.N.Y. 1 986) (no p. originality i n soft foam sculpture of Statue of Liberty). 19 58 See Sherry Manufacturing Co. v. Towel King ofFlorida, Inc., 753 F.2d 1 565, 1 5 68-69 25 59 See Compendium of Copyright Office Practices § 5.03.02(a) ( l 984)(,,[Mlere coloration ( 1 1 th Cir. 1985) (no originality where "variations . . . entail simple, but more obvious, changes in the spacing and dimensions of non-detailed features"); L. Batlin & Son, 536 F.2d at 489 20 (differences in shapes being "smooth" and "rough," a "fatter" base, holding arrows instead 0 2 1 leaves, the "shape" of a face, all insufficient to establish copyright protection). Even noticeable differences are insufficient if "it cannot be said that such variances affect the arrangements of the components or the overall impression;" Gardenia Flowers, Inc., 280 22 F.Supp. at 782 (denying copyright where author "did not create anything new" in floral arrangements). See ATC Dist. Group v. Whatever It Takes Trans. & Parts, 402 F.3d 700, 7 1 2 23 (6th Cir. 2005) (no protection where "[t]he illustrations were . . . a form of slavish copying that is the antithesIs of originality"). 24 26 27 28 cannot support a copyright even though it may enhance the aesthetic appeal or commercial value of a work."); Darden v. Peters, 488 F.3d 277, 287 (4th Cir. 2007)(no originality where derivative works made only slight color variations); S pilman v. Mosby-Yearbook, Inc. , 1 1 5 F. Supp. 2d 148 (D. Mass. 2000)(derivative book lacked minimum degree of originality when changes were only enhancements such as coloration of the text and variations in typographic ornamentation); Hearn, 664 F.Supp. at 835-40 (No originality in illustration reproductions ( '\ where variations were in colors). �) 65 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 584 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 ( Document 339 Filed 07/21 /2008 Page 87 of 1 01 work, thereby foreclosing exploitation ofthe underlying copyright. See Ent. Research Group, 122 F.3d at 1219 (protection for a derivative work "must not in any way affect the scope of any copyright protection in that preexisting material"); Gracen v. Brad ord Exchange, 698 F.2d 300, 305 (7th Cir. 1983)(requiring a "sufficiently gross f difference between the underlying and the derivative work to avoid entangling subsequent artists depicting the underlying work in copyright problems,,).60 See 17 U.S.C. § 103(b) (A derivative work "does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material. ,,)6 1 To grant a copyright in the derivative Cover Image would be contrary to well settled law and invite precisely the situation that the statute and case law governing derivative works are meant to avoid. 62 60 See also Durham Indus. 630 F.2d at 909 (copyright in derivative work "must not in any 1 5 way affect the scope ofany copyright protection in [the] preexisting material"); Harris Custom Builders, Inc. v. Ho ffnieyer, 92 F.3d 5 17, 5 1 9 (7th Cir. 1996) (It is a fundamental precept of copyright law that "publication of a derivative work does not affect the validity of 16 a copyright in the preexisting work, despite the incorporation of the underlying work into the derivative work."); Gracen, 698 F.2d at 304 (7th Cir. 1 983)("[E]specially as applied to 17 derivative works, the concept of originality . . . [has] a legal rather than aesthetic function - to prevent overlapping claims."); M aljackProds., 964 F.Supp. at 1 422 ("[PJublication of a 18 derivative work does not affect the validity of the copyright in a preexistmg work."). 19 61 Section 1 03(b) of the 1 976 Act parallels its predecessor, section 7 of the 1909 Act, 1 7 20 U.S.C. § 7 (repealed) ("[PlublicatlOn of any such new [derivative1 works shall not affect the or force or valIdity of any SUbsisting copyright upon the matter empfoyed any part thereof, or be construed to imply an exclusive nght to such use of the original works ... "); Berne 21 Convention, Art. 2(3) ("[A]lterations of a literary or artistic work" are "without prejudice to 22 the copyright in the original work."). 23 24 25 26 27 28 62 Indeed, Defendants have made detailed arguments that derivative works cannot be allowed to interfere with underlying works, conceding the Entertainment Research Group standard. To counter Plaintiffs' infringement claim in the "Superboy" action, Defendants have argued pursuant to 1 7 U.S.C. § 1 03(b) that Siegel's 1 3 page Superboy story is derivative of Supennan and thus cannot interfere with the Supennan or Smallville copyrights. See Defendants' Supplemental Memorandum of Pomts and Authorities of Derivative Work Issue Pursuant to Court's July 27, 2007 Order, filed September 10, 2007, at 1 5 : 1 8-21 ("[T]he courts must draw the line in such a way that the derivative work author will not be empowered to harass or interfere with the rights ofthe original work owner to use and license the underlying work through actual or threatened lItigation.") and 16:4-6 ("In tenns of methodology, to detennine whether a derivative work possesses the requisite originality, courts must compare the derivative work to the pre-existing work.") Defendants counsel Roger Zissu furthered this entanglement argument at the hearing on the parties' cross 66 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 585 Cas 2:04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Document 339 Filed 07/21 /2008 Page 88 of 1 01 Because Ownership of the Ads and Action Comics No. 1 Ha� . Diverged, A Derivative Works Analysis Must Apply () Defendants have previously claimed, without citation or support, that because the Ads and Action Comics No. 1 had one owner at the time ofpIiblication the laws governing derivative works are inapplicable. Defendants' Opposition to Plaintiffs' Motion for Clarification ("Defs. Cl. Opp.") at 10: 1 9-1 1 :7. This entirely misses the real point. Now that ownership of the original work (Action Comics No. 1) and the derivative Ads has diverged, the law governing derivative works must be properly applied. Defendants have also inexplicably argued, again without any legal support, that because the Ads were published first, they are not derivative of the pre-existing , Action Comics No. 1 . Id. at 5:23-6: 19. The implication of Defendants position is tha Action Comics No. 1 is a derivative work of the Ads. This is absurd: whether a work is original or derivative is determined not by time of publication but by a common­ sense examination of which work is derived from the other. See 1 Nimmer § 3.06 at 334.29.6 ("Note that the requirement [of a derivative work] is not that there be a C) subsisting copyright in that underlying work of authorship - it is enough it be capable­ of copyright protection."). See Defs. Cl. Opp. at 5 :23-6:2 (arguing, again without any legal authority, that the Ads' "colloquial or historical" derivation from Action Comics ,, No. 1 does "not matter in a copyright sense ).63 c. judgment, ,Rad�cal.Media Inc., 257 F.Supp.2d 20 motions for summaryCal. 2003). relying on Sobhani v. � 1234, 1239-40 (C.D. Adams Decl. Ex. F, 5:11-14.25. 21 22 23 24 25 26 27 28 63 The promotional announcements for the pre-existing Action Comics No. 1 remain derivative of Action Comics No. 1 even ifpublished a f days prior. Any work that is ew "based upon one or more pre-existing works" is a derivative work. 1 7 U.S.C. § 1 0 1 . Even if a derivative work is published be ore the pre-existing work is itself published, that ftrst­ f published work is still a "derivative" work. See Cordon Art B. V. v. Walker, 40 U.S.P.Q.2d 1 506, 1 996 WL 672969 at *5 (S.D. Cal. 1996)("The art reproductions that Defendant copied were prepared from and based upon the [unpublished] original drawings and master blocks; as such, the copied works are derivative works under § 1 0 1 ofthe 1976 U.S. Copyright Act.")(emphasls added). See also Batjac, 1 60 F.3d at 1227 (''undisputed that the motion picture . . . qualiftes as a derivative work of the [unpublished] screenplays. } Cordon Holding p., B. V. v. Northwest Publ. Cor 63 U.S.P.Q.2d 1013, 2002 WL 530991 at 7 (S.D.N.Y. 2002)("case involve[d] works which were not directly published . . . and were the basis for a derivative work which was published"). Richlin, at * 18 ("[W]e agree with the district court that when Richlin and Edwards conveyed all present and future interests in the Treatment and derivative works to Mirisch, the parties to the contract could not consistently entertain the intent that Richlin and Edwards would be coauthors of the Motion Picture."J. () 67 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 586 Cas 2:04-cv-08400-0DW-RZ ( 1 2 3 4 5 6 B. 8 10 11 12 13 c 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Filed 07/21 /2008 Page 89 of 1 01 As the Cover Image makes no original contribution to the Cover from which it is derived and a copyright therein would, in any event, impermissibly entangle, the underlying Action Comics No. 1 copyright, the Cover Image does not merit or sustain a copyright. See Ent. Research Group, 122 F.3d at 1219. As such, the Ads give Defendants no basis for asserting exclusive ownership of Superman elements, if any, found in the Ads. 7 9 Document 339 Defendants May Exploit The Derivative Ads Which Were Never Subject To Recapture Under Section 304(C), But May Not Create New Superman Derivative Works Based On The Ads As set forth above Section 304(c) empowers an author's heirs to terminate a grant of copyright in the author 's works - not derivative works created by the grantee; and measures the termination "window" as commencing fifty-six years after statutory copyright was secured by the author's work - not by the grantee's derivative works. 17 U.S.C. §304(c)(3). The grantee clearly may continue to exploit pre-termination derivative works produced under the grant. 17 U.S.C. § 304(c) (6)(A). Plaintiffs' termination properly listed the operative March 1, 1938 grant and subject work, Action Comics No. 1. Jerome Siegel was not an author of the Ads, nor did he grant a copyright in the Ads to Detective Comics. 64 Moreover, it is legally irrelevant that Plaintiffs did not list the derivative Ads in their termination notices because Defendants could continue to exploit the Ads under the derivative works exception. !d. For these reasons Plaintiffs were not required to list the derivative Ads in their termination notices or to set the termination date to encompass the Ads.65 17 U.S.C. § 304(c)(6)(A); 37 C.F.R. § 202.10(b). The omission of the Ads and the setting of the termination date therefore should have no effect on Plaintiffs' successful recapture of 64 This bolsters Plaintiffs' argument that the Ads' omission from the termination notices is harmless error under 3 7 C.F .R. § 20 1 . 1 O(e)(1) as it did not "materially affect the adequacy 0 the inf ormation required to serve the purposes of . . . section 304(c)" 37 C.F.R. § 20 1 . 1 0(e)(I). 65 It is true that Plaintiffs' termination notices, which were completed by prior counsel, listed numerous derivative works created by Defendants or their predecessors out of an abundance of caution. However, Plaintiffs were under no requirement to list derivative works, including the Ads. 68 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 587 Cas 2:04-cv-08400-0DW-RZ I 2 3 4 5 6 7 8 9 10 II 12 13 14 IS 16 . 21 22 23 Page 90 of 1 01 66 . . C. 18 20 Filed 07/21/2008 Jerome Siegel's copyright in Action Comics No. 1 _ Defendants have taken the erroneous position that they can exploit new worksC) based on the derivative Ads without accounting to Plaintiffs. Defs. Cl. Mot. at 20: 1 112; Def. Cl. Opp. at 6:7-7:3. This position, however, directly conflicts with § 304(c)(6)(a) o the Copyright Act ("[T]his privilege does not extend to the preparation f after the termination of other derivative works based upon the copyrighted work covered by the terminated grant."). Accord Order at 40:21-23. The absurdity of Defendants' position is illustrated by the hundreds of Superman derivative works that necessarily fall outside the termination window (April 16, 1938 - April 16, 1943), like Superman comics from 1944 to the present, yet these works could no more be used by Defendants than the derivative Ads as the basis for new derivative works (without a duty to account), or to disrupt Plaintiffs' recaptured copyrights. Defendants' claim is clearly incorrect, while the proper result is clear: Defendants may continue to distribute the derivative Ads as they are, but not new works based thereon without accounting to Plaintiffs; and Defendants-may not use t{) derivative Ads to diminish or encumber Plaintiffs' recaptured copyrights. 17 19 Document 339 Defendants, At Best, Hold A Copyright In The "Image" Of The Action Comics No. 1 Cover "As Depicted" In The Ad, Devoid Of Superman Context By the Court's Order, Defendants have exclusively retained all rights to the Ad, but not any part ofthe Superman story, character, themes or other literary elements contained in Action Comics No. 1, which fell within Plaintiffs' termination. Order at 39:26- 41 :2. Defendants are thus limited to the copyrightable material, ifany, conveyed by such publication. The Ads' vague Cover Image is not the Cover of 24 66 etro-Goldwyn Mayer, 683 F.2d 6 1 0 (2d Cir. Defendants rely heavily on Burroughs v. M 1 982) (Defs. Cl. Opp. at 1 1 :25-28) which is plainly distinguishable. In Burroughs, the grant 26 in question listed fourteen Tarzan novels, all of which had been created and assigned by the author. In tenninating this grant, the author's estate failed to list five of the novels granted, 37 C.F.R. § 20 . 10(b)(I)(ii). Burroughs, 683 27 as required by to exploit these 1five novels. Id. at 622. Here, F.2d at 614. The grantee thus remamed free Plaintiffs tennination notice listed the operative March 1 , 1938 grant and Action Comics No. 1 to which the grant applier-' 28 ( Unlike Burroughs, Siegel and Shuster did not create the derivative Ads. They just as c1ear1-,did not assign the Ads m the March 1 , 1938 grant. 25 69 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 588 ) Cas 2:04-cv-08400-0DW-RZ ( 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 C- . Filed 07/21/2008 Page 9 1 of 1 01 (or the similar interior panel on page 8) nor is it imbued with any part of its Superman story. The undistinguished black and white Cover Image cannot be viewed in the context of the now famous Superman character and mythology thereafter published in Action Comics No. 1 . Thus, as the Court noted, the Ad depicts "a person of extraordinary strength," but not Superman's Super-strength: "What remains ofthe Siegel and Shuster's Superman copyright that is still subject to termination (ana, of course, what defendants truly seek) is the entire storyline from Action Comics, Vol. 1 . . . , none o which is apparentfrom the f 1 Action Comics No. 1 3 (, Document 339 announcement." Order at 40:23-41 :2 (emphasis added). 1 . The Copyriaht In A Pictorial Work Protects Only Its Visual Content An ObJectIve Appearance In copyright infringement cases involving pictorial works, the works are objectively compared in a side-by-side analysis of actual visual content, not literary or thematic elements subjectively invoked by the works. In Cavalier v. Random House, 297 F.3d 815, 826 (9th Cir. 2002), an infringement suit involving illustrated children's stories, the Ninth Circuit noted that the analysis for pictorial works differs from that literary works in that it focuses exclusively on the objective appearance ofthe works: "The precise factors evaluated for literary works do not readily apply: to art works. Rather a court looks to the similarity ofthe objective details in appearance. See McCulloch v. Albert E. Price, Inc., 823 F.2d 316, 319 (9th Cir. 1987) [citing Litchfield v. Spielberg, 736 F.2d 1 352, 1356 (9th Cir. 1 984)]." The Ninth Circuit's methodology in Cavalier which considers only a pictorial work's objective appearance is amply supported.67 2. Defendants Cannot Own The Basic Ideas Or Subject Matter DepIcted In The Ad 0 67 See Pasillas v. McDonald's Corp., 927 F.2d 440, 441-42 (9th Cir. 1 991) (Court analyzed similarity between man-in-the-moon masks by focusing only on their objectIve features); alt Corwin v. W Disney Co., 2004 WL 5486639, at * 1 5 (M.D. Fla. 2004) ("Court will focus d field Call., Ltd. v. Gemmy In us., Corp., 3 1 1 F. on objective details in appearance."); Win Supp. 2d 61 1 , 6 1 7 (E.D. Mich. 2004) (three-dimensional figures of witches "crashing" not 26 substantially similar because witches did not look the same); Woods v. Universal City Studios, Inc., 920 F. Supp. 62, (S.D.N.Y. 1 996) (motion picture "12 Monkeys" copied 27 plaintiffs drawing when comparison showed that film replicated drawing); JCW Investments, Inc. v. Novelty, Inc., 482 F.3d 9 10, 9 1 6 (7th Cir. 2007) (dolls are substantially 28 similar as a matter of law when an objective observer would think they are the same). . 70 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 589 Cas 2:04-cv-OS400-0DW-RZ Document 339 Filed 07/21/200S Page 92 of 1 01 In line with the above case law governing pictorial works, the ideas or sub ject . . 1 2 matter depicted in the Ads - a person in black and white tights and cape, a person 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 0"-- ) extraordinary strength, or a person lifting a car - are not copyrightable. Order at 40:20-21 . See 17 U.S.C. § 1 02(b)("In no case does copyright protection for an original work of authorship extend to any idea . . . concept, principle or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.,,)68 Thus, the Ad's depiction of a man with "extraordinary strength" does not entitle Defendants to lay claim to this concept. Order at 40:20-21 . See Shaw v. Lindheim, 919 F.2d 1 353 (9th Cir. 1 990)("Copyright law protects an author's expression; facts and ideas within a work are not protected."); 1 Nimmer § 2.03 [D] ("Copyright may be claimed only in the 'expression' of a work of authorship, and not in its 'idea."') See also 3 Nimmer § 13.03[B][2][a]; Berkic v. Crichton, 761 F.2d 1289, 1293 (9th Cir. 1990); Swirsky v. Carey, 376 F.3d 841, 845 n.4 (9th Cir. 2004). "Extraordinary strength," outside of its special context in the Superman mythology, is an idea that cannot be copyrighted. See Toliver v. Sony Music Ent. 149 F. Supp. 2d C\. 909, 919 (D. Alaska 2001) ("Were Plaintiff to own the copyright to all other songs depicting the tale of a woman rejecting a man's dominance, she would most certainly be among the wealthiest troubadours in the land."). Therefore, the subject matter ofthe pictorial "image" in the Ad is unprotected by copyright. See F. W. Woolworth Co. v. Contemporary Arts, Inc. , 1 93 F.2d 1 62, 164 (1 st Cir. 1951) ("[C]opyright on a work of art does not protect a subject, but only the treatment ofa subject."); Satava, 323 F.3d at 810 (glass sculpture ofjellyfish consists of unprotectable elements and ideas). As set forth above, Defendants as a matter oflaw do not own an exclusive copyright in the derivative Cover Image. However, even if Defendants owned an interest in the Cover Image, it would necessarily be limited to the particular "image of 68 This provision merely "restate[s], in the context of the new single Federal system of 28 copyright, that the basic dichotomy between expression and idea remains unchanged." ( J H.� .'\ REp. No. 94-1476, at 57 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5670. 71 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 590 Cas 2:04-cv-08400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 23 24 25 26 ( Document 339 Filed 07/21 /2008 Page 93 of 1 01 a person with extraordinary strength who wears a black and white leotard and cape" depicted in the Ads. Order at 40:20-21. And that "person" is not Superman. 3. Publication of the Ad Did Not "Copyright" Superman Elements The Court appears to clearly distinguish the vague black and white Cover Image in the Ads from the Cover ofAction Comics No. 1. Order at 40: 15-23. The Ad makes no reference to Superman, and the Ad's Cover Image could not serve, as matte of law, to have conveyed or "published" any Superman element. The Ad's stand alone, black and white Cover Image, diminished to the point of illegibility, is a far cry from the well articulated color Cover which clearly depicts the "Superman" character, his physical appearance, costume and "s" shield. In contrast, the Cover Image is "fairly limited." Order at 40: 14-21. The Cover, unlike the Cover Image, is not viewed in a vacuum, but in the context of the Action Comics No. 1 story. The Cover no longer depicts "a person with extraordinary strength" (Order at 40:2223), but Superman's "Super-strength" as an inextricable part of Siegel and Shuster's specific expression of the protectable Superman character.69 The Cover, like the interior panel it mimics, is part ofAction Comics No. 1, successfully recaptured on April 16, 1999. Order at 72. Superman's "Super-strength" is inarguably featured on nearly every page ofthe Action Comics No. 1 story, essentially defming the character. The "image" in the Ad clearly does not depict Superman's "Super-strength" or any other Superman traits for the reasons set forth above. Superman's "heroic abilities in general, do not remain within defendants sole possession to exploit." Order at 40: 9-13; 40:23-41 :2. Plaintiffs respectfully ask the Court to confirm that Defendants do not exclusively own any Superman elements by virtue of the Ad's slightly earlier publication and specifically that Superman's "Super-strength" is part of the recaptured 69 See M etcalfv. Bochco, 294 F.3d 1 069, 1074 (9th Cir. 2002) ("[P]rotectable expression includes the specific details of an author' s rendering of ideas. ") See Walt Disne Prods. v. . y 27 Air Pirates, 581 F.2d 75 1, 755 (9th Cir. 1978) (comic book character more likely to contain 28 unique elements of expression, as the "plot of the piece not only centers around the character but IS quite subordinated to the character's role"); I Nimmer § 2.12 character is more readily protectible when depicted in "cartoons . . . rather than 'word portraits. "') (A 72 . PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 591 Cas 2:04-cv-OB400-0DW-RZ 1 Action Comics No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 D. D ocum en t 339 Filed 07/21/200B Page 94 of 1 01 _ character and story. The Termination Notices Provided Defendants With Ample Notice (J As Plaintiffs were not required to list derivative works, Plaintiffs' omission of the obscure Ads qualify as inadvertent harmless error under 37 C.F.R. § 201 . 10(e)(l), and as such did not "materially affect the adequacy of the information in the notice" See Order at 49. The notice unambiguously terminated the operative grant of copyright in Superman to Defendants' predecessors and just as unambiguously provided notice of Plaintiffs' intent to list every even remotely relevant Superman work. Defendants cannot credibly claim that they were not given fair notice under Section 304(c). Given Plaintiffs' comprehensive termination notices, ifthe Ads had shown up in their diligent search of the Copyright Office's records, Plaintiffs would have listed the Ads and set the termination date to encompass them. lethe former is harmless error under 37 C.F.R. § 201 .10(e)(1), so should be the latter. The authorities cited by Defendants regarding renewal notices are inapposite. . See Defs. MSJ at 36:3-10. The harsh enforcement of deadlines for filing renewal (\, applications derives directly from the statutory language for renewals.70 The termination provisions contain no such language. Instead, section 304(c)(4)(B) delegates to the Register of Copyrights to determine the form/content of termination notices, which explicitly provided that harmless errors will not impair the validity of a termination. 37 C.F.R. § 210.10(e)(1).71 70 Section 24 of the 1 909 Copyright Act read: "That in default of the registration of such the shall detennine at the 22 application for renewal and extension,first copyright in any work 992, Section 304(a) of the publication." Before 1 expiration of twenty-eight years from p 23 1 976 Act contained virtually the same language. See 3 Nimmer § 9.05[AJrJJ ('']; e fonnality be of renewal was hence an absolute condition to copyright subsistence past t 28' year. . . . "). 24 25 26 27 28 71 Prior enforcement of strict compliance with renewal applications is not persuasive authority for undennining Section 304(c)'s benefits to authors, or curtailing 37 C.F.R. § 201 . 1 0(e)(I)'s "hannless error" provision. See 2 Patry § 7:27 ("The complete loss of copyright under these circumstances was harsh and unnecessary."); Mills Music, 469 U.S. at 1 72-173 ( 1 985) ("The princi£al purpose of the amendments in § 304 was to provide added benefits to authors.") Plaintiffs had little possibility of ascertaining the Ads. Their failure to include the Ads in choosing a tennination date should not result the kind of prejudice associated with an untimely renewal. The sections from PATRY, Nimmer and Drat/er & . McJohn relied on by the Court do not vitiate the harmless error doctrine. Instead, these � authorities simply remind the reader to calculate the tennination window for a work from the ('\ 73 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 592 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 95 of 1 0 1 17 18 ( Defendants rely on a hollow distinction between errors that render a notice invalid and errors that impair the e ect of a notice, claiming that the language of 37 ff C.F.R. § 201 .10(e)(1) precludes the latter. Yet, when the meaning of statutory language is indeterminate, one should look at the context of the language. 1 Patry §§ 2: 1 7, 2:2 l . The parallel provision, Section 201 . 10(e)(2), offers clarification by providing that good faith errors in the date or registration number of a work will not "affect the validity ofthe notice." 37 C.F.R. § 20 1.1 0(e)(2).72 As Sections 201.1 O(e)(1) and (2) together constitute the "harmless error" provision of Section 201 .10, the use of "validity" in (e)(2) demonstrates the context of the word "invalid" in (e)(l). The drafters of Section 201.10(e)(I) clearly intended that harmless errors would also not render a termination notice invalid as to particular works as well. The Court acknowledged and applied this harmless error policy in rejecting Defendants' arguments regarding Plaintiffs' failure to list the 1948 consent judgment in their notices. Order at 49:21-50: 13. The same reasoning should apply to the Ads: Having terminated the operative March 1, 1 938 grant, Plaintiffs failure to list the Ads, "did not diminish the notice defendants received regarding the nature of the grant that plaintiffs intended to terminate." Id. X. 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 19 20 THE ORDER'S HISTORICAL SUMMARY INCLUDES CONTESTED FACTS FOR TRIAL A. The Order Could Be Misinterpreted As "Ruling" on Genuine Issues of Material Fact 23 their effort to restrict Plaintiffs' recaptured Superman elements, Defendants construe certain passages in the historical background section ofthe Order as a "ruling" by the Court that various Superman elements are not included in Action 24 Comics No. 1. 21 22 In 25 26 actual date of publication, and to not rely on the exp iration of the 28-year renewal tenn at the ; Dratler & McJohn, end of the calendar year. 2 PATRY§ 7:43; Nimmer S l I .05[B][1l 3 6.Q4A[3][a]. 72 The common sense construction is that a good-faith mistake in the publishing date or Intellectual Property Law: Commercial Creative and Industria{Property § 27 c 28 registration number will not affect the application of the tennination notice to that work. 74 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 593 Cas 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21/2008 Page 96 of 1 01 "Many of Superman's powers that are among his most famous today did not appear in Action Comics, Vol. 1, includmg his ability to fly . . .� his super-vision . . . ; his super-hearing . . . .The "scientific" explanation lOr these powers was also altered in ensuing comics . . . " 1 2 c) 3 Order at 14:2-14. Plaintiffs' understanding is that the Court was not ruling on such factual issues, 4 5 but rather was providing historical background and orientation as to the Superman 6 mythos. 73 Plaintiffs believe that certain "powers" described by the Court as not 7 present in Action Comics No. 1 are, in fact, present in that work, and respectfully 8 request that the Court clarify its ruling, so that its statements, while arguably dicta, are 9 not taken as conclusive findings as to Action Comics No. 1 's literary contents. 10 B. 11 12 Elements Listed in the Order as Being the Preserve of the Defendants First Appeared in Action Comics No. 1 Plaintiffs believe that some ofthe elements listed in the Court's Order as among 13 "Superman's powers . . . [that] did not appear in Action Comics, Vol. 1," in fact did 14 appear in that historic work, and are included in the copyrightable elements recaptured [\ 1 5 by Plaintiffs' termination, notably Superman's "super-senses." See Adams Decl., E 1 6 I at p . 25 (referring to "the array of superpowers with which Superman is armed in _ ' 1 7 Action No. 1 " as including "super-senses."), J. Plaintiffs are not requesting that the 1 8 Court now rule on these issues, but are merely providing this evidence to demonstrate 1 9 genuine issues of material fact for trial. 20 73 The part listing elements largely follows Defendants' 2 1 discussion of the opinion in therrthe various literarypage 8:3-22, for which Defendants solely of the "facts" opening pa'pers at 6 and 7 of the declaratlOn of Paul DC 22 relied on paragraphs been designated by Defendants as Levitz, President and Publisher of this Comics who has not an "expert." Plaintiffs objected to 23 testimony in paragraphs 38 and 39 (pages 22- 23) of their Evidentiary Objections In 24 25 26 27 28 endants' Motion for Partial Summary Judgment as well as in paragraphs Opposition to Def 1 4- 1 8 (pages 1 1- 14) of their L.R. 56-2 Statement of Genuine Issues. The Court similarly appeared to conf the substance of Defendants' purported Superman trademarks without rrm Plaintiffs having the opportunity to brief this important issue: "The most notable of these marks that are placed on various items of merchandise are ' Superman's characteristic outfit, comprised of a full length blue leotard with red cape, a yellow belt, the S in Shield Device, as well as certain key identifying phrases[,]" such as " 'Look! ... Up in the sky! ... It's a bird! . . . It's a plane! ... It's Superman!'" Order at 14-15. The discussion of the trademarks also appears to be from Defendants' opening papers at pages 10: 1 3- 1 1 : 16, in which Defendants solely relied on paragraphs 1 0 and 1 1 of the same declaration of Paul Levitz. Plaintiffs objected to this testimony as well, in paragraphs 42-48 (pages 25-29) of their Evidentiary Objections as well as in paragraphs 28-32 (pages 2 1-24) of their L.R. 56-2 Statement. () 75 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 594 Cas 2:04-cv-08400-0DW-RZ 1 ( 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 C 28 ' Document 339 Filed 07/21/2008 Page 97 of 1 01 For example, Superman's "super-hearing" is clearly depicted in panels 4-8 of page 1 1 ofAction Comics No. 1 . Superman is. shown clinging to the outside of a skyscraper, many floors above the street, listening to a conversation inside the building between Senator Barrows and Alex Greer, "the slickest lobbyist in Washington." There is no depiction or indication of an open window. Superman, in panel 4, is described as "an eavesdropper" who "listens in on an interesting conversation!" The next three panels display the lobbyist and the Senator discussing their scheme and the financial kickbacks they contemplate. Senator Barrows says to the lobbyist "I suppose you're going to be well taken care of yourself," to which Superman, again outside the building, sarcastically rejoins, "YOU BET HE WILL!" It appears from these panels that Superman has "super-hearing , he easily hears a conversation inside a skyscraper while outside admidst the bustling noise of the city. Superman's "super-vision," whether described as "telescopic" or "X-ray" vision, .also makes an appearance in Action Comics No. 1 . Lois and Clark's dinner is interrupted by some hoodlums who embarrass Clark. See Action Comics No. 1 at p. 6 (panels 7-8)-7 (panels 1-6). Lois slaps one of the thugs before making her exit in a cab. Id. at p. 7 (panels 3-6). The hoodlums decide they will "show that skirt she can't make a fool out of Butch Mason!" Id. (panel 7). The next panel shows Superman standing on what appears to be the top of a building, at night, staring downf below ar at a car driving past on the street. Id. (panel 8). As it would be from such a perspective, the car windows are depicted as opaque and the passengers are not visible in the passing car. Yet, the panel notes Superman is "observing" Butch and his fellow hoodlums. Id. The hoodlums subsequently force Lois' cab into a ditch and kidnap her in their car. Id. at p. 8 (panels 1-3). In the next panel Superman suddenly appears in front of the speeding car, as he knows Lois is inside. Id. (panel S). Superman seizes the car and rescues Lois. Id. at p. 9 (panels 1-3). Collectively, these panels plainly illustrate Superman's "super-vision" as he is apparently able to see over great distances into darkened cars; he is first able to 76 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 595 Cas 1 2 3 4 2:04-cv-08400-0DW-RZ Document 339 Filed 07/21 /2008 Page 98 of 1 01 discern that the hoodlums are in the car, and then he sees that the hoodlums are holding Lois in the speeding car he stops. In combination with the "eavesdropping scene," Superman's "super-senses" are plainly evident, and without them, his accomplishments would not be possible.74 5 c. c) Plaintiffs Did Not Receive Adequate Notice Defendants disingenuously claimed that the "question of what characters, 7 characteristics and elements were contained in Action Comics No. 1 itself, and what 8 characters, characteristics and elements came later" was "squarely presented to the 9 Court via Defendants' Motion." Defs. Opp. Cl. Mot. at 17:14-20. Yet Defendants' 10 cross-motion for partial summary judgment neither advanced any arguments nor 1 1 sought any judicial relief as to these subjects, as they are rife with genuine issues of 12 material fact. Defendants merely discussed the evolution of Superman in the 1 3 "background" section of their opening brief, citing only two self-serving paragraphs in 14 the declaration of DC Comics' President, Paul Levitz (Defs. MSJ Mot. at 7:18-8:22) 6 jects again in their brie fs· 1 5 and never mentioned these sub 16 17 18 19 20 21 22 23 24 25 26 27 28 . ('\ Notwithstanding that the issue of Superman's powers in Action Comics No. 1 may be resolved in Plaintiffs' favor by the doctrine of resjudicata and collateral estoppel,75 the evolution of Superman's powers and attendant work-for-hire and apportionment issues are riddled with questions of fact for the trier offact, after consideration of expert opinions and documentary evidence.76 Defendants' claim that Whereas, some have opined that in Action Comics No. 1, Superman "leaps" tall buildings and incredible distances, but does not yet "fly," this may be a distinction without a difference as he is seen effortlessly soaring through the air. The result is the same. In fact, in certain panels of Action Comics, No. 1, Superman certainly looks like he is flying as he hovers effortlessly over the Capital dome, with a man tucked under his arm. Action Comics No. 1 , p. 12 (panels 3-5); p. l3 (panels 1-6). See Siegel v. National Periodical Publications, Inc., 508 F.2d 909, 914 (2d Cir. 1974)("In the case before us Superman and his miraculous powers were completely developed long before the employment relationship was instituted.")(emphasis added). 76 In a copyright action the content and associated elements of a literary work are questions of fact properly reserved for the ultimate trier of fact. See Sid & Marty Krofft, 562 F .2d at 1 175 (claims for actual damages requirin& apportionment between literary elements, invohv ) matters of fact and implicate the constitutJ.onal right to jury trial); Sheldon, 309 U.S. at 396,,98 (1940) (trier offact resolved dispute involving allotment ofliterary elements). An 74 75 77 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 596 Cas 2:04-cv-08400-0DW-RZ ( 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Filed 07/21/2008 Document 339 Page 99 of 1 01 this was all "settled" by two inadmissible declaration paragraphs is ridiculous. As Defendants did not move for summary judgment on these issues, and the issues were not raised by the Court on oral argument, Plaintiffs did not receive sufficient notice for due process to be satisfied. See Buckingham v. U.S., 998 F.2d 735, 742 (9th Cir. 1 993)(Sua sponte s ary judgment inappropriate where "facts remained in dispute" or non-movant "did not receive sufficient notice of the district court's potential entry of summary judgment against it and therefore did not have the opportunity to present arguments.") This is a far cry from both a notice and evidentiary perspective from the "scope of the Ads" issue, where Defendants placed this at issue, were queried by the Court at oral argument as to this issue, a full evidentiary record was before the Court (including Defendants' expert opinions) and there were no genuine issues of material fact. See Cool Fuel, Inc. v. Connett, 685 F.2 309, 3 12 (9th Cir. 1 982)("The parties had every opportunity to explore and expound the issues inherent in the prayer. . . . and did so to the extent they deemed advisable.") umm D. Defendants Failed to Offer Admissible Evidence Sufficient to Meet Their Burden of Proof Regarding Superman's Powers Notwithstanding that Defendants never articulated any argument regarding the factual and legal (e.g., work-for-hire) issues pertaining to ownership of Superman's powers, they also utterly failed to proffer any admissible evidence to support their phantom claim. As noted, Mr. Levitz's statements are wholly inadmissible. See Plaintiffs' Evidentiary Objections in Opp. to Defs. MSJ at �� 38-39; Plaintiffs' L.R. 56-2 Statement of Genuine Issues at �� 12-18. Declarations submitted in conjunction with a summary judgment motion must be made on personal knowledge, set forth facts that would be admissible in evidence, and show the affiant is competent to testi as to such facts. FRCP 56(e)(1); FRE 602.77 Mr. Levitz plainly lacks personal analysis of whether Superman's "super-hearing" or "telescopic vision" is found in the ��terary content ofAction Comics No. 1 is a subjective analysis best left to a jury. See Bank Melli Iran v. Pahlavi, 58 F.3d 1406, 14 1 2 (9th Cir. 1995)(declarations on "information and belief' entitled to "no weight" where declarant lacks personal,knowledge); Scosche Industries, Inc. v. Visor Gear Inc., 1 2 1 F.3d 675, 68 1 (9th Cir. 1 997)("[H]earsay evidence in Rule 56 affidavits is entitled to no weight."); Taylor v. List, 880 F.2d 1 040, 1 045 78 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORlTIES ON PRE-TRlAL ISSUES EXHIBIT J - 597 Case :04-cv-08400-0DW-RZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Document 339 Filed 07/21 /2008 Page 1 00 of 1 0 1 knowledge about events that took place 70 years ago, and thus offered an impennissible lay opinion. Id. Defendants did not rely on their experts nor did they() submit any documentary evidence to support Mr. Levitz's bald assertions. Id. Moreover, none of the cases cited by Defendants in their Response to Plaintiffs' Evidentiary Objections support the proposition that a corporate officer is deemed to have "personal knowledge" of events taking place decades before his tenure. An officer's personal knowledge may be supported by inference only where his position, responsibilities and involvement in the matter at issue are such that personal knowledge could reasonably be inferred. See Wang Chinese Daily News, Inc., 435 F.Supp.2d 1042 (C.D.Cal. 2006)(Officer who "collects, coordinates, and analyzes labor contracts" may attest to them.) Here, Defendants overreach,' as there is no indication that Mr. Levitz's corporate duties are such that he can speak with particularity about the development of Superman 70 years ago. Nor was Mr. Levitz designated as an expert. Defendants ask the Court to simply assume that their selfserving view of history is unassailably "correct" without submitting a shred of C \. supporting evidence. Defendants assembled several expert witnesses to discuss the evolution of Superman, Action Comics No. 1 's contents, and the work-for-hire issue. That their opinions were not submitted undercuts Defendants' position that such issues were before the Court or that Mr. Levitz is competent to testify thereto. Thus, even if the "powers" issue had been before the Court, Defendants _ . v. 78 21 22 23 n.3 (9th Cir. 1 989); Hurd v. Williams, 755 F.2d 306, 308 (3d Cir. 1985)(inadmissible lay opinion not considered); Yang Ming Marine Transp. Corp. v. Oceanbrid Ship. Int'!, Inc., ge 48 F.Supp.2d 1032, 1 039 (C.D.Cal. 1999). The case primarily relied on by Defendants, Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1 542 (9th Cir. 1990), is distinguishable as the corporate officer was at the company during the events at issue. Hal Roach does not relieve Mr. Levitz of the burden 25 under F .R.E. 90 I of proving he has sufficient personal knowledge to make the detailed 24 78 statements in his declaration. All the cases cited by the Defendants stand for this exact same proposition. See Pacific Serv. Stat. Co. v. Mobil Oil Corp., 689 F.2d 1 055, 1062 (Temp.Emer.Ct.App. 1 982) (personal knowledge "inferred . . . only because as the 'in house' 27 attomey [he was1 responsible for compliance with the regulations"); Bryant v. Bell Atl. Mel" F}d 124, 1 3 5 n.4 (4th Cir. 2002)(the "affidavits contain sufficient information . . . to 28 288 estabhsh that the affiants' statements were made based on personal knowledge.") 26 · ), C 79 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 598 Case :04-cv-08400-0DW-RZ Document 339 Filed 07/21 /2008 Page'1 01 of 1 0 1 11 12 ( woefully failed to carry their "initial burden of production." As such, Plaintiffs, "the nonmoving party[,] ha[d] no obligation to produce anything" in response. Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1 103-07(9th Cir. 2000). 80 The Court's inclusion of portions ofMr. Levitz's inadmissible statements in the "background" section of the Order also cannot reasonably be construed as "necessary" to any of the Court's decisions on Defendants' or Plaintiffs' cross-motions and, as dicta, may not be considered the "law ofthe case." See Milgard Tempering v. Selas Cor o Am. , 902 F.2d 703, 716 (9th Cir. I 990)("Of course, the law of the case p. f doctrine gives no preclusive effect to dicta."). Plaintiffs should be afforded the full and fair opportunity to present evidence, including expert testimony, in open court as to the Superman elements recaptured by Plaintiffs in Action Comics No. 1 . CONCLUSION 1 2 3 4 5 6 7 8 9 10 13 c 14 15 79 For the foregoing reasons, Plaintiffs respectfully request that the Court grant Plaintiffs' pre-trial motion in its entirety. DATED: July 21, 2008 16 LAW OFFICES OF MARC TOBEROFF, PLC By �/s/ �� Marc Toberoff Attorneys for Plaintiffs, JOANNE SIEGEL and LAURA SIEGEL LARSON __ __ __ __ 17 18 19 __ __ __ __ __ __ _ v. 523 F.3d 20 79 See James River Ins. Co.did Hebert Schenk, P.e.,burden of 915, 924 nA (9th Cir. 2008)("Because [movant] not satisfy its initial production, [non-movant] was f not required to demonstrate a genuine issue of material fact."); High Tech Gays v. De ense 2 1 Indus. Sec. Clear. O 895 F.2d 563, 574 (9th Cir. 1990)("[N]0 defense to an insufficient ff., 22 showin� is required."); Berlin v. Lloyds Bank, 1989 U.S. Dist. LEXIS 1 8345, * 1 6 (C.D.Cai. 1 989)("mconceivable that a summary judgment could be granted on the basis of speculation, hearsay, or evidence lacking foundation"); Kenny v. Regis Co., 2008 U.S. Dist. LEXIS 23 1 8373, *7 (N.D.Cai. Mar. 1 0, 2008)("[Ifmoving party] does not satisfy its initial burden . . . sUlllary judgment must be denied."). l1). 24 80 admissibility, could Mr. Levitz's declaration, 25 Superman's "super-senses" regardless of itsin Action Comics No.not establish that are not present 1 because its actual panels are susceptible to differing reasonable interpretations as set forth above. As this issue is 26 genuinely and reasonably disputed by the parties, factual f mdings could not be made under F.R.C.P. ( at issue." It also 56(d), which 27 remains an unresolvedonly permits a determination of facts "not genuinely Nos. 2-6) by factual issue as to whether later Action Comics (e.g., Siegel and Shuster depicting Superman's "super-senses" were "works-for-hire." See Order 28 at 1 3 :23-14:26. 80 PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES ON PRE-TRIAL ISSUES EXHIBIT J - 599

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