Shloss v. Sweeney et al

Filing 84

Declaration of Anthony T. Falzone in Support of 82 Reply to Opposition to Plaintiff's Motion for Attorneys' Fees and Costs filed byCarol Loeb Shloss. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D# 5 Exhibit E)(Related document(s) 82 ) (Olson, David) (Filed on 5/21/2007)

Shloss v. Sweeney et al

Doc. 84 Att. 5

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EXHIBIT E

Dockets.Justia.com

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7

CAROL LOEB SHLOSS,

) )

8 JW 9 2007 10 versus

Plaintiff,

) ) ) ) January 31, No. C 06-03718

SEAN SWEENEY, et al., Defendant.

) )

11

______________________________)

12

13

TRANSCRIPT OF PROCEEDINGS BEFORE THE HONORABLE JAMES WARE

14

UNITED STATES DISTRICT JUDGE

15

16

A-P-P-E-A-R-A-N-C-E-S:

17 Center

For the Plaintiff:

Stanford Law School for Internet and Society

18

By: ANTHONY T. FALZONE DAVID S. OLSON

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19

Crown Quadrangle 559 Nathan Abbott Way

20

Stanford, CA 94305-8610

21

For the Defendants:

Jones Day By: MARIA K. NELSON

22

ANNA E. RAIMER 555 South Flower Street

23

5th Floor Los Angeles, CA 90071

24 Court Reporter: 25 Georgina Galvan Colin License No. 10723

1

GEORGINA GALVAN COLIN, CSR 10723

1 2007

San Jose, California

January 31,

2

P-R-O-C-E-E-D-I-N-G-S

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Carol

3

THE CLERK:

Calling case 06-03718,

4 5 6 7 8 9 10 11 12 13 for 14 associate 15 me 16 17 18 19 20 21

Loeb Shloss versus Sean Sweeney, et al, on for defendant's motion to dismiss. each side. Counsel, please step forward and state your appearances. MR. FALZONE: Professor Carol Shloss. MR. OLSON: Carol Shloss. MS. NELSON: Your Honor, Maria Nelson With me is my David Olson for Professor Anthony Falzone for Fifteen minutes

the estate of James Joyce.

Anna Raimer, and the defendant Sean Sweeney. MR. FALZONE: Your Honor, I have with

the plaintiff, Professor Carol Shloss. THE COURT: all; welcome. Very well, this is your motion, Ms. Nelson, to dismiss. Good morning. Good morning

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22 Honor. 23 you 24 25 2

MS. NELSON: THE COURT:

That is correct, your Do you want to, you can

submit it on the papers or make an argument if wish.

GEORGINA GALVAN COLIN, CSR 10723

1 2 3 Stephen 4 5 6 7 8 on 9 points.

MS. NELSON: argument, your Honor.

I'm happy to make an

First, I would like to clarify a few The Estate, despite the fact that

Joyce is not a party to the Estate, the Estate certainly takes this proceeding very seriously. And Mr. Joyce is not ignoring the proceeding. He does consider these proceedings to be binding on the Estate. The Estate is not covenanted to sue

10 website 11 12 13

the materials that Ms. Shloss added to the after the initial complaint was filed. good reasons for that. There are

There was considerable

material that was added months after the

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14 15 16 from 17 nor 18 present 19 20 the 21 22 23 decision. 24 25 they 3

proceedings were started, but that does not mean that there is a complaint on those materials waiting in the wings either from the Estate or Stephen Joyce. There is not. Neither the Estate its trustees, either one of them, have any intention of suing Ms. Shloss over those 2006 materials. The Estate did covenant not to sue on original materials that were presented to it in 2005. That was actually a very practical

That doesn't mean that the Estate considers those materials to be a fair use, it just means that

GEORGINA GALVAN COLIN, CSR 10723

1 As 2 3 4 making

don't consider them to be worth fighting over. the declaration of Anna Raimer makes very clear, the Estate's position is that the materials that Shloss added to the website in 2005 are only

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the

5 6 7 8 9 10 11 12 13

a very incremental difference over what was in book. THE COURT: Now, you started in the

middle and I appreciate with all this paper it's fair to start in the middle, but let me back up. MS. NELSON: THE COURT: Okay. Because I understand the

thrust of your argument, the Court should dismiss because there is no case or controversy because Estate or anyone who would speak on behalf of the Estate is willing to release and give a covenant not to sue to the plaintiff for the material she plans to publish, is that a correct MS. NELSON: THE COURT: MS. NELSON: Only partially. All right. At this point, your Honor,

the 14 15 16 which 17 statement? 18 19 20 21 22 23 that 24 25 make? MS. NELSON: The difference that that

backing up, there was an original complaint and then later on an amended complaint. THE COURT: So what difference does

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4 GEORGINA GALVAN COLIN, CSR 10723

1 materials 2 3 4 5 of 6 7 8 9 10 11 12 Estate, 13 14 before 15 the the 16

makes is that in 2005 materials, certain were presented to the Estate that Ms. Shloss represented she wanted to publish on a website. Those where the basis of the original declaratory judgment action that Ms. Shloss brought in June 2006. After Ms. Shloss brought that original

complaint she then, through her attorneys, approached me and said that she wanted to add substantial additional materials to that website. The Estate indicated that they had no problem with the original materials, the 2005 materials that Ms. Shloss presented to the and were willing to covenant not to sue on those materials, and that representation was made the amended complaint was filed. Nevertheless,

amended complaint was filed allegedly to cover

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17 add 18 19 20 rule 21 22 23 24 25 5

additional materials that Ms. Shloss wanted to after the complaint, after the original complaint was filed. So right now -Well, our rules permit,

THE COURT:

15 permits her to amend her complaint without leave. And your motion is directed, or has to be

directed to the operative pleading, which is the amended complaint. MS. NELSON: That's correct.

GEORGINA GALVAN COLIN, CSR 10723

is of

1 2 3

THE COURT:

So what I have to consider

whether or not your motion is well made in view what is alleged in the amended complaint. And

your 4 5 6 to the 7 sue on all of the materials that are covered by argument, if it is to hold force, has to be there is no case or controversy because the defendants are willing to give a release and a covenant not

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8 9 10 materials 11 12 13 14 the 15 16 diminished sue 17 18 I 19 20 21 the 22

amended complaint, isn't that true? MS. NELSON: The argument is that the,

there is no case or controversy over the that were added to the lawsuit after the original complaint was filed, there could not be any reasonable apprehension of lawsuit because those materials were never presented to the Estate in first place before the lawsuit, and any kind of reasonable apprehension would have been by the Estate's willingness to covenant not to on the additional materials. THE COURT: Well, see the problem that

have is that I've got to read the amended complaint, and the amended complaint goes all the way back to the research and the effort to put material that we're now talking about in a perhaps in a published book in the first place. And that the threats that are alleged, I don't

23 website, 24 25 know 6

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GEORGINA GALVAN COLIN, CSR 10723

1 2 by 3 4 5 6 7 8 9 or 10 entire 11 plaintiff's 12 the 13 14 15 that 16 with she 17

if any of this is true but the threats that are alleged caused this material to be altered first the publisher being unwilling to allow it to be published and then secondly by being put on a restricted website. All of that was done in

relationship to what is alleged to be threats to assert copyright infringement and privacy claims with respect to that material. And so what I have to judge is whether not there is a case or controversy over that operation because it could be that the real desire here is to publish the material in original form in its unabridged fashion in a book rather than to put it in two different places and trying to get people to put them together, and the question is is there a case or controversy respect to her belief that if she had done that

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18 19 have 20 21 that 22 23 24 materials 25 7

would have been subject to a claim.

That's the Now you

case that I believe I have before me.

to correct me if you think I misstated that. MS. NELSON: Well, we do not believe

there is any case or controversy because whatever case or controversy there would have been was mooted by the covenant not to sue on the that were presented to the Estate in 2005.

GEORGINA GALVAN COLIN, CSR 10723

1 2 3 4 5 therefor 6 But could 9 7 8

THE COURT:

But even as you say that to

me, what you're saying is it was not a full covenant, I don't understand how -- what you're saying is that part of the controversy might be gone but the full controversy has not, and the Court should not take jurisdiction over the part that, over which there is no controversy. it's all one thing to me. I don't know how I There is no

compartmentalize the case that way.

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10 be 11 12 13 14 15 16 17 In 18 the 19

effective way to do it. MS. NELSON: Your Honor, there has to

an active case or controversy during the entire period from the beginning of the lawsuit in 2006. There was no case or controversy. THE COURT: authority for that? Well, what's your case You see, that's the

proposition I haven't quite gotten a handle of. other words, by allowing an amended complaint it seems to me that what you're saying is that by time of the amended complaint a case or has arisen, that I can't consider anything that released prior to that. that? It seems to me that the reason amended complaints are allowed is to allow people to What is your authority

20 controversy 21 was for 22 23 24 bring 8 25

GEORGINA GALVAN COLIN, CSR 10723

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1 2 one 3 4 judge of 7 of 8 covered 9 5 6

to the Court their full case, so that the whole thing can be adjudicated. And it's, a plaintiff

can take a one dollar claim and turn it into a billion dollar claim in that amendment without asking anybody's permission. And I've got to

your motion based upon whether there is a belief threat of copyright, based upon the allegations the amended complaint. MS. NELSON: I can't ignore it. Your Honor, that was

10 11 that 12 13 on 14 15 16 17 18 19 20

in our papers, and if you will give me a moment I will look at the actual legal authority for that. But certainly the Maryland Casualty case says there must be an immediate threat of harm, and certainly when the Estate covenanted not to sue the original materials there was no immediate threat of harm. THE COURT: Why -- while you're looking

for your authority, maybe I'll hear from your opponent in the meantime. MR. FALZONE: Thank you, your Honor. I

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what the

21 22 23

think the Court has already put its finger on I think is the critical issue here, both as to website and the controversy as a whole. And I

have 24 25 website 9 GEORGINA GALVAN COLIN, CSR 10723 a demonstrative that I think captures that. The problem here is that the 2005

1 the to 2 3 4 5 correct, 6 7 not 8 9 10 2006

contains part of the controversy and those are cuts the publisher made. The 2006 additions add

that material that Professor Shloss herself cut from the manuscript out of fear of litigation and due to threat of suit. And your Honor is

there is no doubt that the issue framed by the amended complaint is the 2006 website. And the

fact of the matter is the covenant simply does cover that controversy. The covenant covers only

the 2005 website, and doesn't speak as to the

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11 12 to 13 14 15 16 James 17 18 19 20 21 22 they 23 nexus 24 25 10

website at all. Now, there is also no doubt that the material that was added in 2006 relates directly the threats the Estate made here. In the

correspondence the trustee of the Estate, Stephen James Joyce, told Professor Shloss and her publisher that they may not use anything that Joyce ever wrote, or anything Lucia Joyce ever wrote, drew, painted or recorded, and that's a quote. And if they did there would be

repercussions; the Estate has never lost in a lawsuit; their legal record is crystal clear; put their money where their mouth is. they have in four other litigations. between the two is inescapable. And indeed So the

They are both

GEORGINA GALVAN COLIN, CSR 10723

1 2 additions

deletions from the original manuscript as your Honor has already explained, and the 2006

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made or

3 4 5

relate directly to the threats the Estate has here. And whether you look at the 2005 website

the expanded 2006 website in all events there is clear case or controversy here. THE COURT: Well, let me see if I can

a 6 7 8 9 received 10 11 12 13 14 not 15 16 17 yes. 18 19 but 20 21 certainly not the whole thing. THE COURT: And was the, I don't recall And that would moot the controversy as to that portion of the case that is before your Honor, to sue that the Estate has issued binds it and forever prevents it from bringing an infringement action based upon content of the 2005 website,

probe a little bit on the plaintiff's side. Do you acknowledge that what you with respect to the 2005 version of the website satisfied the plaintiff that if that was the material that was put in the public domain that there would be no copyright or privacy claim? MR. FALZONE: I believe the covenant

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22 that 23 24 25 11

this from the background but was the covenant was received one which would have permitted the 2005 material to be incorporated in a published work that put the two things together?

GEORGINA GALVAN COLIN, CSR 10723

1 future 2 3 4 5 on 6 7 say 8 9 10 11 12 13

MR. FALZONE:

In other words, you're

asking whether the covenant would apply to a book that incorporated the material? THE COURT: Yes. In my view, it's unclear.

MR. FALZONE:

I would argue it would, but I think it's unclear the face of the covenant. THE COURT: It didn't say, it didn't

the website printed versions, derivative works, whatever? I mean, I don't know that I have seen I might have. I just don't

the covenant itself. recall.

MR. FALZONE:

Well, the covenant, quote

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14 actually it's your 17 18 19 20 21 22 that's 23 24 25 12 15 16

unquote, is not a separate document. in the declaration of Mr. Sweeney. paragraph five or six. Honor -THE COURT:

It's

I believe

And I have it here if

But what do we mean by

covenant; there was no contract? MR. FALZONE: No. It was a unilateral

statement by Mr. Sweeney, the trustee, that the Estate would not sue on the 2005 website. THE COURT: sufficient? MR. FALZONE: I worry that it's not in Are you satisfied that

GEORGINA GALVAN COLIN, CSR 10723

1 it, 2 3 4 5 issued

fact, your Honor.

And I think that in order do

in order to properly do away with this case we would need two things; we would need a covenant that clearly and unequivocally applies to the controversy framed by the amended complaint,

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6 7 8 9 10 11 12 13 for 14 15 16 17 18 19 20 21 22 23 24 review 25 13

in such a way that it is clearly binding on the Estate in the future. things here. THE COURT: Counsel, did you find your We have neither of those

reference that you wanted me to consider? MS. NELSON: Yes, your Honor. It's It's

Preiser v. Newkirk, 422 U.S. 395 at 410.

discussed at page nine of our opening papers. THE COURT: And you want to highlight

me what -- your opening papers? MS. NELSON: strike. dismiss. Yes. That's our motion to

I'm sorry, excuse me, our motion to Page nine. That case stands for the fact that an

actual controversy must exist at the time the complaint is filed and be in existence at all stages of review by the Court. And in this instance, your Honor, there has not been a controversy at all stages of by this Court. Any controversy that there might

GEORGINA GALVAN COLIN, CSR 10723

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1 believe 2 in 3 4 Estate 5 6 7 the 8 9 10 11 12 13 14 15 16 17 have 18 19

arguably have been, and of course we do not there was a controversy in the first place, but any event, any controversy there arguably would have been would have been mooted by the clear, clear and clearly expressed intention of the that it had no intention to sue over those 2005 website materials. THE COURT: And that was given before

complaint, the original complaint? MS. NELSON: That was given -- the, the

covenant not to sue was given before the amended complaint. THE COURT: complaint? MS. NELSON: complaint. THE COURT: But at the time of the Not before the original But not before the original

original complaint the plaintiff had reason to apprehension of being sued.

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20 not. 21 believe 22 23 24 25 14

MS. NELSON:

No, your Honor, it did

And the reason for that is, again, we don't that any of the correspondence by Stephen Joyce could be considered threats. And, again, this is

covered thoroughly in our papers, but in fact we don't believe that you can make threats over

GEORGINA GALVAN COLIN, CSR 10723

1 a 2 3 4 5 complaint, 6 not 7 8 9 Honor. when 10

general bodies of information.

You can't divorce

fair use analysis from the specific materials -THE COURT: MS. NELSON: THE COURT: I misasked my question. Okay. At the time of the

the plaintiff could not rely upon the covenant to sue as a basis for any lack of apprehension, because it hadn't been given? MS. NELSON: THE COURT: That is correct, your So after that complaint,

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11 12 I exist 13 14 not 15 16 17 is 18 19 20 is 21 22 the 23 24 and 25 allegations 15

that complaint was filed, at least as far as the covenant is concerned, an actual controversy, if take everything in the complaint as true, did at that time? MS. NELSON: Again, your Honor, we do

believe that there was an actual controversy at that time. The Irish lawyers clearly -I said as to the covenant

THE COURT: concerned.

I realize you don't believe. At least as the covenant

MS. NELSON: concerned. THE COURT:

You know, I read through

complaint and this is a point in the case where I have to accept the factual allegations as true, I do acknowledge that there are lots of

GEORGINA GALVAN COLIN, CSR 10723

1

in this complaint which are upon information and

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And

2 3 4

belief, but that's a permissible way to plead. the statement is that with respect to a request whether or not he would assist, defendant didn't know, he specifically prohibited the plaintiff using any letters, papers by or from Lucia Joyce, and the allegation is notwithstanding he was not legally entitled under the circumstances to Shloss from making use of those writings. There was reference, at least according to the complaint, on page ten, line two, to recent copyright litigation that the Estate engaged in. So there is an implicit use of The next

from

5 6 7 8

prevent 9 10 11 referring 12 had 13 14 15 16 17 runs 18 that 19 Joyce's 20 he's the sole owner of the rights to Lucia works; didn't have permission to use letters the Estate jointly with the trustee, claiming

copyright as a basis for the objection.

day, on November 5, there was a letter written claiming that the writer was the sole beneficial owner of all James Joyce's rights and that he

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21 22 23 24 seems 16 25

written by various people. It just seems to me that the allegation is that there were public and private statements asserting their ownership of copyrights entitling him to protect and enforce these rights. It

GEORGINA GALVAN COLIN, CSR 10723

1 2 3 4 5 6 7 publication 8 9 didn't 10 so 11 12 13

to me that if your argument is that if these allegations are true, it does not satisfy the standard of reasonable apprehension of suit, I disagree with you. The stronger argument is the

one that you are making, that somehow the Estate communicated that it had changed its position and that now the author could proceed with without fear of litigation. And although that

might have happened in a conditional way, it happen sufficiently to satisfy the plaintiff in far as the allegations of the complaint are concerned. If they are true, she remained in fear

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14 15 publish 16 17 18 19 20 21 22 then then 23 24 25 17

that she had to walk a very thin line because of these copyright issues and could not freely the result of her research. And when the limited

release was offered she then put together what I thought, from the allegations, were materials she already had. This wasn't something new that she It was simply expanding the

went out to gather.

materials that were online to include materials which she had self-censored out of fear. And

when that material was presented there wasn't a covenant given saying okay, that's all you got, then you can go ahead.

GEORGINA GALVAN COLIN, CSR 10723

1 2 3 4 5 6

And it seems to me a simple solution to this, if there is a desire to resolve the case, which I sense, and that is to negotiate such a covenant. But if you are unwilling to give it,

that creates a controversy. MS. NELSON: Your Honor, certainly

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Estate

7 8 9

negotiating a covenant is something that the has considered. And you know, quite frankly,

having a substantial amount of new materials into this lawsuit after the Estate had very indicated it had absolutely no interest in litigation, it doesn't seem that the Estate have to give that covenant. won't. THE COURT: Oh, I'm not enforcing it. That doesn't mean it

dumped 10 clearly 11 should 12 13 14 15 16 17 don't 18 I 19 20 21 22 23 24 25 lack desire litigation over this, there are ways to resolve it short of getting the Court involved. do have some concerns because of the mixture of copyright and privacy issues that I haven't quite sorted out but I figure that will happen in the course of litigation. And so it is my

All I'm saying is this is a motion to dismiss the case, and if you want to, if there is no, you

predisposition, and nothing in this argument has changed it, to deny the motion to dismiss for

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18 GEORGINA GALVAN COLIN, CSR 10723

that

1 2 3 4 5 6

of subject matter jurisdiction on the grounds there's no case or controversy. There may be circumstances under which after you get involved might raise affirmative defenses, and one of the ways that I will know whether or not there is a case or controversy is whether or not in your response you file a claim for copyright infringement with respect to the site. If you don't, that might help me to

counter

7 8

say

9 10 11

somebody ought to move for summary judgment. MS. NELSON: Understood, your Honor.

And 12 13 This 14 declaration 15 16 17 is a case, as you can see from Shloss's as of February 6, 2003, Mr. Lessig was already involved, they were already considering a declaratory judgment action, and we would submit just a couple of points, we would appeal to your Honor's discretion also to dismiss this case.

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filed.

18 19 20

that this is a case that never needed to be That this is something that Mr. Lessig and Ms. Shloss have deliberately sought. And so it

this

21 22 23 24 25

really is not an appropriate case to be before court, which we have been telling the other side all along. THE COURT: Well, I don't, I would not

exercise my discretion in response to that

19 GEORGINA GALVAN COLIN, CSR 10723

1 the I 2 3 4 wise 5 6 7 8 9

statement.

I have to accept the allegations of And it sounds to me like what

complaint as true.

have before me is a scholar who started out doing the work and only became advised by lawyers after the work got to be controversial, and that's a thing to do. There is no criticism that I should

issue against the lawyers or Dr. Shloss with respect to how they conducted themselves, nor of the Estate quite frankly. If there is a belief

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10 that, 11 12 I'm 13 14 15 16 17 18 defenses, 19 20 this it 23 24 25 20 21 22

that this material does indeed infringe on copyright issues, it's right to have asserted to have put the case properly before some neutral person to get that resolved. And so as far as

concerned everybody is in the right place right now. MS. NELSON: Your Honor, we would

certainly direct your attention to the Estate's motion to strike the various affirmative in particular copyright misuse, and the 1922 Ulysses status as being in the public domain. is the Estate's position and firm belief that case is really not about the website at all, but is really a pretext to get discovery, broad discovery against the Estate and a bunch, in actions that the Estate, that quite frankly It

GEORGINA GALVAN COLIN, CSR 10723

1

Professor Shloss does not approve of.

And that

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in

2 3 4

certainly would very much complicate the issues the case. And do not go to the very specifics of

what the actual controversy may be, which is the status of the materials on the website as they used. THE COURT: Thank you for raising that, Let me speak

are

5 6 7 8 9 10 11 12 13 14

because I had a concern about that. with your opponent about that.

Counsel, if the plaintiff here were a defendant in the lawsuit where the plaintiff alleged an infringement of a copyright and the plaintiff was alleging infringement didn't have a copyright then an affirmative defense of misuse the copyright would be appropriate. a backwards action. What I have

of is 15

16 actually 17 18 19 20 21

I have someone who's

been threatened with a violation of copyright filing a lawsuit as a declaratory judgment. And I have, I kind of, we had a very lively debate in chambers about this because it seems to me that the copyright misuse issue can

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22 of 23 24 25 this 21

only be raised if indeed there is an allegation violation of copyright and an allegation of violation of copyright is over materials that are not properly protected by a copyright. But in

GEORGINA GALVAN COLIN, CSR 10723

1 claims, 2 3 4 5 may 6 grounds. speak 7 8 9 10 copyright. 11 12 by

case I have a mixture of claims, of privacy as well as copyright claims, and it's hard for me at this stage to figure out whether or not the allegation you shouldn't do this or you can't do this is based on privacy grounds, which may or not be legitimate, as opposed to copyright And so your opponent's comments did to that concern, namely this is sort of like Dr. Shloss saying I'm going to publish this work, you're going to say it's protected by a They haven't quite said that yet, but that's what you're going to say, and I'd like a declaration

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true,

13 14

the Court now that if you say that that's not and it's sort of like I'm ahead of the game already. It seems to me that declaratory

15 judgment 16 17 18 19 20 21 22 23 24 25 22

actions do invite that kind of anticipation of a claim, but until a claim is made, I'm not in the position to declare it. So what I hear is an application to strike the copyright misuse allegations until an assertion of copyright has been made against materials that are protected and then it would be appropriate to have a claim of copyright misuse, but if it's in that early it's as though someone has done something that they really haven't done.

GEORGINA GALVAN COLIN, CSR 10723

they've

1 2

There is no controversy over that, because really not claimed copyright as to any materials that are not copyrighted. that? What's your response

to

3 4

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5 6 7 8 9 10 11 12 13 14 15 16 fact the 19 20 proper 21 22 23 copyright 24 to 25 17 18

MR. FALZONE: that in several ways.

Well, let me respond to First of all, there is no

doubt that it is proper to plead copy, the affirmative defense of copyright misuse in the context of a complaint for declaratory judgment. The Practice Management case in the Ninth Circuit makes that clear, as does the Open Source Yoga case. Both those cases involve exactly that

posture. Now your Honor is absolutely right, copyright misuse is a defense to an infringement claim. But your Honor is also right in the

declaratory relief context the plaintiff is in permitted to plead the affirmative defenses to infringement allegation that hangs out there and needs to be clear. That's exactly why it's

to plead a fair use defense, which is also an affirmative defense to a copyright infringement claim, and it's likewise proper to plead misuse. Now copyright misuse applies not just

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23 GEORGINA GALVAN COLIN, CSR 10723

1 2 3 4 5 6 7 8 me 9 10 plead be 11 12 13 14 15 16 17 a 18

a situation where a plaintiff doesn't have any copyrights but a situation where a plaintiff has copyrights and uses them in a way to extend the protection in a manner that is contrary to the public policy of copyright. THE COURT: Let me try this. I hear

that, but an affirmative defense doesn't get you any money. Claiming copyright misuse sounds to

like the basis of a damages action. MR. FALZONE: I believe the way we To

it is for injunctive and declaratory relief.

honest with you, I don't recall whether we asked for damages on that claim, but I don't believe we do. THE COURT: All right. So what you're

saying is leave it in because all that it is is just a part and parcel to our effort to just get declaration, but it sounds to me like it's

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as

19 20 21

conditional.

If they claim copyright ultimately

to the materials that are not then you should declare that they're not, and that's the part I'm not comfortable with because at this point could simply admit everything and I would be in a position of having to declare something that no has actually claimed.

that 22 they 23 one 24 25 24 GEORGINA GALVAN COLIN, CSR 10723

1 2 3 4 5 6 7 8 on proper 9

MR. FALZONE:

Well, let me put it this

way, I think the request to strike the copyright misuse defense is premature precisely because we don't know if they're going to plead infringement in their respect. I think at this point the very

reason we're here properly on a declaratory judgement action is because the threats and other conduct here create a clear case or controversy the infringement issue, and so it's entirely

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10 11 12 turns 13 14 15 be 16 17 18 19 the 20 would here. 21 22 23 not 24 25 25

to plead any affirmative defense to that infringement claim. Now, I agree with your Honor, if it out that the Estate comes back in its responsive pleading and decides not to allege any copyright infringement against Professor Shloss, there may an occasion to then revisit the propriety of the copyright misuse claim. But right now Practice

Management and Open Source Yoga teaches us rather that it is entirely proper to have the claim in case right now. And none of the grounds that

ordinarily apply to a motion to strike apply That's reserved for situations where a claim clearly fails on the face of the complaint, sua sovereign res judicata bars the action. the case here. That's

GEORGINA GALVAN COLIN, CSR 10723

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1 legal 2 3 infringement, 4 5 it that 8 9 10 for 11 12 13 14 15 16 17 18 19 20 21 status that? status. 6 7

What we have is perhaps a difficult issue, and maybe it remains unclear whether the Estate will follow through and plead but the very reason we're here in a declaratory judgment action is to dispel the threat of the infringement claim that's been implied. And so

is proper to plead any affirmative defense to infringement claim at this point. THE COURT: Very well. Well, I'll take

that under submission.

As I said, it was the

subject of some controversy as I was preparing today's argument. There was one other part that you asked to strike, and I can't recall what that was. MS. NELSON: Yes. The 1922 Ulysses

But I do actually, your Honor, have a

couple of comments on the misuse. THE COURT: I'll come back to you.

What do you want to say with respect to

MR. FALZONE:

As to the copyright

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22 allegation 23 24 is 25 infringement. 26

of Ulysses, there is no doubt that that is properly before the Court. Professor Schloss If Ulysses

quotes from Ulysses on her website. in a public domain there could be no

GEORGINA GALVAN COLIN, CSR 10723

1 is 2 3 4 5 6 7 8 permission 9 And, 10 11 12

So that is clearly relevant to this case. no grounds to strike that allegation. THE COURT:

There

Was there a threat that her

work infringed the copyright in Ulysses? MR. FALZONE: THE COURT: In the correspondence?

Yes. Yeah, absolutely. The

MR. FALZONE:

correspondence is clear that she has no to use anything that James Joyce ever wrote. in fact, the correspondence literally says everything he ever wrote, painted, drew or recorded, so there's no doubt that that falls

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13 14 15 16 17 18 19 20 21 go 22 23 24 25 27

squarely within the threats the Estate issued. THE COURT: Very well. I do need to address two

MR. FALZONE:

other things to clarify the record. THE COURT: What happened to my lights?

I've gone overtime so they stopped using them. What happens is I use this -- I built this at home in my garage -- to control the lawyers, because I lose track of time. ahead. Finish. MR. FALZONE: This will be very brief. And, but

I have to correct what I heard to be a substantial misstatement. I heard Ms. Nelson

GEORGINA GALVAN COLIN, CSR 10723

sue

1 2 3

suggest to your Honor that the covenant not to was issued to us before the amended complaint was filed. That is false. The amended complaint was We received the

4 covenant 5 dismiss,

filed in October of 2006.

in conjunction with the Estate's motion to

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6 amended 7 8 9 10 of 11 12 13 brought, 14 15 16 17 18 for 19 20 to in 23 24 25 21 22

which was filed in November of 2006.

So the

covenant was not issued to us prior to the complaint. It was issued after. Well, actually, I was

THE COURT:

inquiring whether it was issued prior to the original complaint because I thought the thrust Ms. Nelson's argument was that that affected the validity of the case as it was originally and affects the case as it continues to be prosecuted. But thank you for correcting that. Well, perhaps I And if I did I

MR. FALZONE:

misunderstood what she said. apologize.

One either thing I do need to correct the record. We've been talking a bit about the

reasonable apprehension test and I do just want point out for the record that the Supreme Court its recent decision in MedImmune versus Genentech has now stated that the reasonable apprehension test is too stringent here, so the test has been

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28 GEORGINA GALVAN COLIN, CSR 10723

1 2 3 4 5 6 what 7 8 9 10 11 12 13 14 15 16 17 18 it 19

relaxed.

Now, I submit that we meet either test.

We meet the reasonable apprehension test; we meet the MedImmune test. that for the record. THE COURT: Well, we had another lively But I do just want to note

debate about that, because it seems to me that has happened is a lot of a patent context as I'm coming to understand is being brought into the copyright field and the test I will try and articulate in my order is the one that the Court adopts. And at this point I have not found that

there is any lack of allegations that are true to meet any standard for apprehension of suit sufficient to create a case or controversy. Ms. Nelson, you want to have a final word? MS. NELSON: Yes, your Honor.

First of all, the covenant not to sue, is in my declaration that we had given an oral

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20 21 22 23 24 25 29

indication to Mr. Falzone before the amended complaint was filed. So, right, there is nothing

written but certainly they did have that indication. Also to correct, there was no threat

against Ulysses or anything that James Joyce himself ever wrote. The threats, if there were

GEORGINA GALVAN COLIN, CSR 10723

1 2 3 4 5 6 7 8 9 10 11 12 13

such, were directed specifically to any Lucia-related materials. So certainly there were

no threats as to the 1922 Ulysses materials that Ms. Shloss now seeks to put on her website, or incidently to the Finnegans Wake noteman book material that Ms. Shloss now seeks to put on her website. THE COURT: Has there been any judicial

declaration with respect to whether or not the Uylsses work is in the public domain? MS. NELSON: been none. No, your Honor, there has

And, in fact, that in itself would be

an enormous undertaking to make that decision

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14 fact, 15 16 17 wish 18 19 20 21 22 23 24 25 30

because there are numerous issues of law, in that would have to be decided. And so, you know,

that in itself would be a full blown trial. THE COURT: And that's why you would

it stricken from this case? MS. NELSON: Which is why we would wish

it stricken from this case. And then with regard to the copyright misuse issue, I did want to point out that even taking the pleadings on their face, there is no copyright misuse allegation that is viable there. There is no remedy because of course their

GEORGINA GALVAN COLIN, CSR 10723

1 2 recent 3 allegedly 4 5 6

copyright misuse only lasts for as long as the alleged misuse is in existence, and the most allegation is regarding actions that were taken by the Estate back in 2002. And certainly

there is no allegation that rises to the level of any recognized copyright misuse in any circuit,

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7 8 9 10 true. 11 copyright 12 13 you're 14 15 not, 16 17 18 could 19 20 sides. 21 22 23 24 25 31

Ninth Circuit or otherwise. THE COURT: Well, that might be more

appropriate for summary judgement but I have to take the allegations of the complaint here as And the allegations are that the claim of was being asserted against materials over which there was no copyright protection. Now, if

correct, this is noticed pleading, I'm not sure which works were being asserted and which were and so some of that needs to be done between the parties to try and figure out precisely what was being referred to and then perhaps later you bring the matter back to the Court. I appreciate the argument by both The matter is now under submission. MS. NELSON: THE COURT: Thank you, your Honor. Just a moment, Counsel.

I'm reminded that you all submitted to the Court a schedule with respect to events,

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GEORGINA GALVAN COLIN, CSR 10723

1 2 conference 3 4 you 5 6 7 deadlines 8 9 10 11 12 13 14 15 16 17 18 19

anticipating that the case would proceed, and ordinarily we would sit down and have a about that. And what we've determined is we'll

decide the motion and then take the dates that have given us and suggest a schedule for the next conference in the case. What we usually do is give you for completing your discovery and other matters, and your schedule will work. We may have to move

the dates, and so we'll address that in a scheduling order following the order with respect to the motions. MS. NELSON: MR. FALZONE: Thank you, your Honor. Thank you, your Honor.

(Whereupon, proceeding was concluded.) --oOo--

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20 21 22 23 24 25 32 GEORGINA GALVAN COLIN, CSR 10723

1 2 3 4 Reporter 5 6 7 full, 8 9 Case that 10 11

CERTIFICATE OF REPORTER

I, Georgina Galvan Colin, Court for the United States District Court for the Northern District of California, 280 South First Street, San Jose, California, do hereby certify: That the foregoing transcript is a true and correct transcript of the proceeding had in Carol Loeb Shloss vs Sean Sweeney, et al., Number C-06-03718 JW, dated January 31, 2007,

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12 my by 13 14 15 16 17 18 19 20 21 22 23 24 25 33

I reported the same in stenotype to the best of ability, and thereafter had the same transcribed computer-aided transcription as herein appears.

Dated:

(Certified hard copy to follow) ____________________________ GEORGINA GALVAN COLIN, CSR License Number 10723

GEORGINA GALVAN COLIN, CSR 10723 !SIG:45e4964c82921890649246!