BROWNSTEIN v. LINDSAY et al
Filing
200
OPINION filed. Signed by Judge Freda L. Wolfson on 11/28/2018. (km)
*NOT FOR PUBLICATION*
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
_________________________
:
PETER BROWNSTEIN,
:
:
Plaintiff,
:
Civ. Action No.: 10-1581(FLW)
:
v.
:
OPINION
:
TINA LINDSAY, et al.,
:
:
Defendants.
:
_________________________:
WOLFSON, District Judge:
In
this
protracted
litigation,
Plaintiff
Peter
Brownstein (“Plaintiff” or “Brownstein”) brought this case
under the Copyright Act seeking a declaratory judgment of
joint authorship of an ethnic identification system that he
purportedly created with defendant Tina Lindsay (“Lindsay”). 1
A trial was held in this case; however, before a verdict was
reached
by
the
jury,
Judge
Pisano,
inter
alia,
granted
judgment as a matter of law on the joint authorship claim in
favor of Lindsay and co-defendant Ethnic Technologies, LLC
1
This matter was initially assigned to the now-retired
Hon. Joel A. Pisano, U.S.D.J. The case was transferred to
this Court after the Third Circuit reversed Judge Pisano’s
trial decision granting judgment as a matter of law.
1
(collectively, “Defendants”). 2
On appeal, the Third Circuit
reversed that decision in Brownstein v. Lindsay, 742 F.3d 55
(3d Cir. 2014).
After remand, I directed Plaintiff to amend
his complaint consistent with the undisputed facts that were
determined during the first trial, which were recounted by
the circuit court in its published decision. Upon amendment,
Defendants moved for dismissal pursuant to Fed. R. Civ. P.
12(b)(6),
which
judgment.
submissions.
motion
this
Subsequently,
the
Court
converted
parties
filed
to
summary
supplemental
For the reasons set forth herein, Defendants’
motion for summary judgment is GRANTED.
BACKGROUND and PROCEDURAL HISTORY
I.
The Ethnic Determinant System Copyright
At the outset, I note that the following facts are
undisputed unless otherwise noted, and to understand the
complexity of this case, I start from the filing of the
Complaint in 2010. 3
In March 2010, Brownstein brought this
2
While other substantive decisions were made, the only
relevant one to this Opinion is Judge Pisano’s Rule 50(a)
decision.
3
Since the parties are well acquainted with the facts
after years of litigation, I need not cite to the record with
regards to the undisputed historical facts of this case.
Importantly, these facts are also well documented in various
decisions,
including the
Third
Circuit’s
opinion
in
Brownstein. Furthermore, I note that Plaintiff takes issue
with certain factual findings made during the first trial and
in subsequent decisions, including Brownstein, and argues
2
suit seeking a declaratory judgment that he is a co-author of
a joint work for which Lindsay registered a copyright in 1996.
This copyright, also known as the Ethnic Determinant System
(“EDS”), developed rules for computer programs to predict and
categorize people’s names by ethnicity.
At the time the EDS was conceived, Brownstein and Lindsay
worked
together
at
Future
Prospective
Clients,
a
direct
mailing list company, that later changed its name to List
Services Direct, Inc. (“LSDI”).
Because of their working
relationship, in January 1994, Lindsay enlisted Brownstein’s
expertise to turn her rules into computer codes.
Brownstein,
for his part, created a number of computer programs, which
were known as the ETHN programs, that, inter alia, converted
lists of names into data format and turned EDS rules into
code.
The combined product of the EDS and the ETHN programs
was named the Lindsay Cultural Identification Determinant
(“LCID”).
In
that
regard,
as
the
Third
Circuit
has
recognized, “Lindsay was the sole author of the EDS, as an
independent work of the LCID, Brownstein was the sole author
that this Court should not adopt those facts; however,
Plaintiff cannot now re-litigate issues that have already
been decided. Rather, I am bound by those determinations.
See Pub. Interest Research Grp. of New Jersey, Inc. v.
Magnesium Elektron, Inc., 123 F.3d 111, 116 (3d Cir.
1997)(“The law of the case doctrine directs courts to refrain
from re-deciding issues that were resolved earlier in the
litigation.”).
3
of the ETHN programs, as another independent work of the LCID,
and they both had an equal authorship interest in the LCID as
a joint work of the EDS and ETHN programs.”
Brownstein, 742
F.3d at 59.
In
June
1996,
Lindsay
and
Brownstein
founded
Systems, Inc. (“TAP”) to commercialize the LCID.
TAP
In that
regard, the LCID was licensed to TAP, and in turn, the company
licensed the program to its customers. Each of them owned TAP
equally.
However,
despite
operating
Brownstein continued to work at LSDI.
TAP,
Lindsay
and
Earlier that year, in
February 1996, Lindsay, alone, received her first copyright
registration
December
for
1996,
registration
the
EDS
Lindsay
for
an
(the
“872
also
obtained
updated
registration”).
version
a
second
the
EDS
In
copyright
(the
“127
registration”), which was the derivative work of the first
version.
With that registration, Lindsay included a copy of
Brownstein’s ETHN programs and referenced a computer process
and codes associated with the copyright.
In late 1996, Lindsay and LSDI disputed the ownership
of the EDS copyrights.
the
LCID
were
owned
LSDI demanded that both the EDS and
by
the
company
since
Lindsay
and
Brownstein created those works while working at LSDI. Because
Lindsay vehemently disagreed, tension between LSDI management
and the partners intensified to a point where both Lindsay
4
and Brownstein resigned from LSDI in June 1997.
LSDI
brought
a
lawsuit
against,
inter
Thereafter,
alia,
Lindsay,
Brownstein and Tap over Lindsay’s copyrighted works, claiming
that they were created as works for hire. The suit eventually
settled
in
Agreement”).
September
1998
(the
“1998
LSDI
Settlement
Significantly, the terms of that settlement
agreement substantially impacted the rights of the parties in
this
case
Brownstein.
vis-à-vis
The
the
EDS
pertinent
copyrights,
portions
of
the
particularly
1998
LSDI
Settlement Agreement are set forth as follows:
1. The parties acknowledge and agree that LSDI is
presently using a computer program concerning ethnic
selections (hereinafter called the “LSDI Program”).
Lindsay, Nelson, Brownstein, TAP, CMR 4 and ET agree
not to claim ownership or any of the rights to the
LSDI program, any aspect thereto, nor to any
modifications, nor any derivative work thereof,
and agree not to make any claim that the
LSDI
Program
or
any
aspect
thereto,
any
modifications or derivative work thereof violates
any of their rights, whether involving, but not
limited to copyright, trademark, trade secret,
proprietary property, or infringement of any of the
foregoing, and agree to release LSDI and Raskin 5
from any such claims that may exist, except as
otherwise
provided
herein.
Lindsay,
Nelson,
Brownstein, TAP, CMR and ET acknowledge that Raskin
and/or LSDI are/is the sole owners(s) of the LSDI
Program.
4
Consumer Marketing Research, Inc., also known as CMR,
was one of Lindsay’s former employers. Ginger Nelson was one
of CMR’s executives. I will further explain these parties,
infra.
5
Tom Raskin was an executive at LSDI.
5
2. The parties acknowledge and agree that all parties
have made claim to the right to exclusive ownership
of EDS, a work entitled “An Ethnic Determinant
System
–Knowledge
and
Rule/Exception
Basis”
(hereinafter called “EDS”), any therefore, and
derivative work thereof.
As part of this
settlement, LSDI and Raskin disclaim any ownership
to EDS and any derivative work thereof, except as
otherwise provided herein.
3. The parties acknowledge and agree that Tina Lindsay
obtained a Certificate of Registration . . . for EDS
which may be called LCID.
*
*
*
9.
Lindsay, ET, TAP, CMR, Nelson and Brownstein
disclaim any ownership to
the LSDI Program and
any
aspect
thereto,
any modifications
and
derivative
work
thereof, provided
any
such
derivative work is independently developed by LSDI or
Raskin, or is obtained
with the permission of the
other parties to this settlement Agreement who have
the ownership of such derivative work of EDS, subject
to the agreement that none of the parties to this
Settlement Agreement is under any obligation to
provide
LSDI
with
anything further
than
that
which LSDI has in its possession as of the date
hereof.
10.
LSDI and Raskin relinquish and disclaim any
ownership claims to those items set forth in paragraphs
2,3,4,5, and 6 above, and any aspect thereof, any
modification and derivative work thereof, except as
provided for herein.
*
*
*
13.
Lindsay, TAP Nelson, Brownstein, CMR and ET
relinquish any claims they have against LSDI or
Raskin regarding the use of the LSDI Program,
EDS and E-Tech to the extent presently in the
possession of LSDI or Raskin, and subject to
the provisions of paragraph 19 or any program
used or owned by any of them, including those
items set forth in paragraphs 2, 3, 4, 5, or 6 or any
aspect thereof, any modification or derivative
work thereof or any aspect thereto by LSDI and/or
6
Raskin, unless
agreement.
in
violation
of
this settlement
14. LSDI and Raskin relinquish any claims they have
against Lindsay, ET, TAP, CMR, Nelson and Brownstein
regarding the use of EDS or any program used or owned
by LSDI or Raskin or any derivative work thereof or
any aspect thereof by Lindsay, ET, TAP, CMR, Nelson
and Brownstein unless in violation of this Agreement.
LSDI Settlement Agreement, pp. 1-4. Essentially, based on
these provisions, Lindsay retained sole ownership of the EDS,
but Lindsay and Brownstein both relinquished any interest in
the programs that the pair had created while employed at LSDI,
including any derivative works based upon those programs.
other
words,
pursuant
to
the
terms
of
the
In
settlement,
Brownstein and Lindsay could no longer utilize the version of
the LCID program developed by them while employed at LSDI.
II.
Lindsay and Brownstein’s Business Ventures
Around the same time Lindsay and Brownstein left their
employment at LSDI, Lindsay began to pursue new business
ventures to promote the LCID.
with
CMR
to
create
a
new
In late 1997, TAP partnered
business
venture.
In
that
connection, prior to the LSDI settlement, the parties entered
into a licensing agreement in September 1997, wherein TAP and
CMR agreed to combine CMR’s then-technology with the LCID,
later referred to as “E-Tech.” The new business entity formed
by
the
combination
of
CMR
and
TAP
was
known
as
Ethnic
Technologies, LLC (“ET”), a named defendant in this case.
7
Thereafter, ET began licensing E-Tech to other businesses.
In December 2000, after the LSDI settlement, TAP and CMR
revised their agreement and again set forth the fact that the
two companies have combined TAP’s assets with CMR’s assets to
form ET.
After the signing of this agreement, ET continued
to license E-Tech to other companies, with Plaintiff signing
certain licensing agreements between 2000-2005.
III. The Lawsuits
The
business
relationship
between
Lindsay
and
Brownstein deteriorated some time after their joint business
ventures.
As a result, Brownstein left ET in May 2009, and
filed an oppressed shareholder lawsuit in New Jersey state
court against Lindsay and ET.
May 2010.
This litigation was settled in
Pursuant to the 2010 agreement, 1) the terms of
that settlement would not affect Brownstein’s right to pursue
the current lawsuit, which was pending; 2) Brownstein agreed
to
relinquish
defendants
his
interests
(Lindsay
and
in
ET)
ET,
and
and
3)
Brownstein
released
from
the
related
claims. Specifically, Brownstein agreed to relinquish his
right,
title,
and
interest
as
a
“shareholder,
officer,
employee or director in TAP or as manager, partner, member,
officer, director or employee of E-Tech.”
Agreement, ¶ 2.6.
2010 Settlement
During this period, Brownstein filed for
8
his
own
copyright
registrations
in
December
2009,
which
purportedly covered his ETHN programs.
In March 2010, 14 years after the date of Lindsay’s
copyright registrations, Brownstein filed the present lawsuit
seeking to protect his joint authorship of the LCID.
In his
First Amended Complaint, the operative version that proceeded
to trial, Plaintiff states that “this is an action brought
under
the
federal
copyright
law
seeking
a
declaratory
judgment that plaintiff Peter Brownstein is the co-author of
a joint work for which defendant Tina Lindsay registered two
copyrights
in
1996
and
that
he
is
entitled
to
continue
receiving a reasonable royalty for the exploitation of the
joint work.”
First Am. Compl., ¶1.
In other words, the gist
of this case — prior to trial — centered on Plaintiff’s claim
that he should be declared a joint author of Lindsay’s 1996
copyrights associated with the EDS. 6
The case proceeded to a jury trial before Judge Pisano.
However, at the end of Plaintiff’s case, and prior to the
defense case, Defendants moved for judgment as a matter of
law pursuant to Rule 50, which was granted.
6
Specifically,
Plaintiff also asserted three separate counts, i.e.,
constructive trust, resulting trust and replevin, that were
dismissed at trial by Judge Pisano. Those counts are not at
issue here.
9
Judge Pisano rejected the claim that Brownstein was a joint
author of the EDS based on statute of limitations grounds.
In that regard, it was found that because Brownstein had
adequate notice of his authorship claim more than three years
prior to filing his complaint, under the Copyright Act, he
was timed barred from bringing suit. 7
IV.
Plaintiff appealed.
The Third Circuit’s decision in Brownstein
Regarding the joint authorship claim, the Third Circuit
addressed two factual questions: 1) whether Brownstein is a
co-author of the LCID; and 2) whether his claim is barred by
the
statute
of
limitations.
With
respect
to
the
first
question, the circuit court, relying on a concession made at
oral argument by defense counsel, found that Brownstein and
Lindsay
were
iteration. 8
co-authors
of
the
LCID
up
until
its
1997
The Third Circuit reasoned:
7
Judge Pisano also granted judgment in favor of
Defendants on their counterclaim, which claim sought to
cancel Brownstein’s copyright registered in 2009. The Third
Circuit reversed, reasoning that courts have “no authority to
cancel copyright registrations because there is no statutory
indication whatsoever that courts have such authority.”
Brownstein, 742 F.3d at 75. The cancellation issue is not
relevant here.
8
After remand, the parties, and this Court, questioned
the legitimacy of this particular concession by counsel.
Indeed, Defendants maintained that the circuit court did not
— and cannot — make factual findings in the context of an
appeal proceeding. Notwithstanding the plausibility of such
an argument, I need not address this issue, because this
10
This concession means that Appellees admit that
Brownstein contributed a non-trivial amount of
creative expression to the LCID through his work on
the ETHN programs and that Lindsay intended for the
EDS to be combined with the computer code he drafted
to form the LCID. Moreover, this framework concedes
that
the
EDS
and
the
ETHN
programs
are
interdependent works, which comports with Lindsay's
assertions. In both the 1997 Software License and
her testimony at trial, she admitted that her rules
and Brownstein's code were inseparable. (App. 1050
(Trial Tr. 256:1 (“[The] LCID had to have
programs.”)).) In Schedule A of the license, she
wrote that the “series of computer programs” and
“system data” of the LCID were “irrevocably
entwined”. (App. 668 (Software License Agreement,
Schedule A).)
Brownstein, 742 F.3d at 65.
The Third Circuit went on to find that, as a matter of
law, because the EDS and the LCID are distinct works with
distinct copyrights, Lindsay’s copyright registrations in
1996 did not cover the LCID or Brownstein’s own work in the
ETHN programs.
The court rejected the argument that by
submitting Brownstein’s code in the form of a deposit copy
with her copyright application did not mean that Lindsay could
unilaterally claim rights to the ETHN programs or the LCID.
Indeed, the court found that “Brownstein [] remain[ed] a coauthor
and
registration
co-owner
[of
does
establish
not
the
LCID]
the
because
copyright
copyright
.
.
.
.
Consequently, Lindsay’s copyright registrations, if anything,
factual determination is ultimately immaterial
resolution of the disputes raised on this motion.
11
to
the
are merely placeholders for the indivisible joint rights she
inherently had in the EDS and the LCID with Brownstein.”
Id.
at 67.
Following
that
discussion,
the
Third
Circuit
made
certain legal conclusions regarding Brownstein’s own work and
contribution to the LCID that are critical to the motion here:
Brownstein had copyrights exclusively in his ETHN
programs as an independent work and non-exclusively
in the LCID as a co-author. In addition, he also
had copyrights to whatever new generations of the
ETHN programs and LCID that he created as
“derivative works” of his first set of ETHN
programs and the LCID. Therefore, although LSDI
retained rights to the ETHN programs that were
considered
the
“LSDI
Program”
in
the
1998
Settlement Agreement, the subsequent generations of
ETHN programs that Brownstein developed [would
remain] under his ownership because they were
derivative works of the LSDI Program. Brownstein's
2009 copyright registrations would, therefore,
cover any post-1998 generations of the ETHN
programs that were not covered by the 1998
Settlement Agreement with LSDI.
Id.
Importantly,
the
court
left
open
the
very
factual
question dispositive on this motion: to what extent did the
1998
LSDI
Settlement
Agreement
abrogate
Brownstein’s
ownership of the pre-1998 generations of the LCID.
More
importantly, the court further noted that while it is possible
that the later versions of the LCID continued to employ the
code created by Brownstein, it is incumbent upon him to make
that evidentiary showing.
Id.
12
After finding that Plaintiff is a co-author of the LCID,
the court discussed the issue of statute of limitations.
Although this part of the Third Circuit’s analysis is of
little relevance here, I will nevertheless summarize it.
Judge Pisano found that the operative statute of limitations
started to run when Lindsay registered her copyrights in 1996,
which also served as constructive notice to Plaintiff.
Judge
Pisano also found that Brownstein not only had Lindsay’s
copyright registrations in his possession but that he also
had
“actual
knowledge”
through
the
series
of
licensing
agreements signed by Plaintiff, all of which showed that
Lindsay was holding herself out as the sole author of the
LCID.
The circuit court disagreed.
First, the court held
that a copyright registration, standing alone, does not serve
as repudiation of joint authorship.
Id. at 71.
Second, the
court determined a jury question remains as to whether any of
the agreements signed by Plaintiff, e.g., the 1997 Software
License, the 1997 Agreement the 2000 Agreement, the 2010 state
court
settlement
between
agreement
2000-2005,
served
and
as
ET’s
an
Brownstein’s authorship by Lindsay. 9
9
licensing
express
agreements
repudiation
of
Id. at 75.
After the filing of the Third Amended Complaint, in lieu
of an answer, Defendants moved to dismiss Plaintiff’s
declaratory judgment claim on the merits.
They did not,
however, move on statute of limitations grounds.
13
V.
The Third Amended Complaint
Following remand, Plaintiff’s Complaint, as it was pled,
was no longer viable because Plaintiff’s claim sought a
declaration of joint authorship over the 1996 copyrighted
works registered by Lindsay.
See Am. Compl., ¶¶ 1, 29.
Based
on the Brownstein decision, the Third Circuit found that the
1996 registered works, i.e., EDS, belonged to Lindsay.
Thus,
the remaining question is whether any derivatives of the LCID,
which is the joint work of Brownstein and Lindsay, continued
to being utilized by ET without compensating Plaintiff.
That
is the theory of the case Plaintiff was permitted to amend.
In
his
Third
Amended
Complaint,
which
is
the
operative
Complaint on this motion, Plaintiff changed course.
In the
newly amended declaratory judgment claim, Plaintiff alleges
that the “LCID/TAP System was a joint work, incorporating the
encoding rules and codes authored by Lindsay and the programs
written by Brownstein.
authors
of
the
Brownstein and Lindsay are the co-
copyrighted
work
as
provided
Copyright Act, 17 U.S.C. § 101, et seq.”
¶ 17.
for
by
the
Third Am. Compl.,
Brownstein alleges that Lindsay and ET have expressly
repudiated Brownstein’s joint authorship of the copyrights in
the LCID/TAP System and its derivatives and have failed to
account . . . to Brownstein for the profits derived from the
14
joint work in direct conflict with ownership rights.” 10
Id.
at ¶ 19.
After
Brownstein
filed
his
Third
Amended
Complaint,
rather than answering, Defendants moved for dismissal under
Rule 12(b)(6).
Because the facts are largely undisputed
following remand, I converted the motion to a summary judgment
motion and requested the parties to submit any additional
briefing
or
evidence.
Having
considered
supplemental
submissions, I conclude that Plaintiff has failed to prove
that he is a joint author of the LCID/TAP System following
the 1998 LSDI Settlement Agreement.
Below is my reasoning.
DISCUSSION
I.
Standard of Review
Summary judgment is appropriate “if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
Fed.
R. Civ. P. 56(a); see also Garges v. People’s Light & Theatre
Co., 529 F. App’x 156, 160 (3d Cir. 2013), judgment entered,
No. 13-1160, 2013 WL 3455818 (3d Cir. June 28, 2013) (“Summary
judgment is proper where there is no genuine issue of material
fact to be resolved and the moving party is entitled to
10
While
Plaintiff
also
included
a
new
copyright
infringement claim, he voluntarily withdrew that claim on
this motion, and in an Order dated August 6, 2018, I dismissed
that claim.
15
judgment as a matter of law” (citing Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986))).
the
substantive
“material.”
If a fact is capable of affecting
outcome
of
the
litigation,
it
is
See Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986).
A dispute is “genuine” if the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party.
See Scott v. Harris, 550 U.S. 372, 380
(2007) (“Where the record taken as a whole could not lead a
rational trier of fact to find for the nonmoving party, there
is
no
‘genuine
issue
for
trial’”
omitted)); Anderson, 477 U.S. at 248.
(internal
citations
In deciding a motion
for summary judgment, a court must draw all inferences from
the underlying facts in the light most favorable to the party
opposing the motion.
Garges, 529 F. App’x at 160.
The party
moving for summary judgment bears the burden of establishing
that no genuine issue of material fact remains.
See Celotex
Corp., 477 U.S. at 322–23.
“Once the moving party has properly supported its motion
for summary judgment, the nonmoving party must ‘do more than
simply
show
material
there
is
some
facts.’” Garges,
metaphysical
529
F.
doubt
as
App’x
to
at
the
160
(quoting Matsushita Elec. Indus. Co. v. Zenith Radio, 475
U.S. 574, 586 (1986)). Indeed, the party opposing the motion
may
not
rest
on
mere
allegations
16
or
denials
in
his
pleading, see id. at 160; rather, the nonmoving party must
present actual evidence that creates a genuine issue as to a
material fact for trial, Anderson, 477 U.S. at 248–49; see
also Fed. R. Civ. P. 56(c)(1)(A) (explaining that in order
for the party opposing summary judgment to show “that a fact
cannot
be
particular
or
is
parts
genuinely
of
disputed,”
materials
in
the
he
must
record,
cite
“to
including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those
made
for
purposes
of
the
motion
only),
admissions,
interrogatory answers, or other materials” to support his
factual position).
“[W]ith respect to an issue on which the
nonmoving party bears the burden of proof . . . the burden on
the moving party may be discharged by ‘showing’—that is,
pointing out to the district court—that there is an absence
of evidence to support the nonmoving party’s case.” Celotex,
477
U.S.
pleadings
judgment.”
at
325.
are
“[U]nsupported
insufficient
allegations
to
repel
.
.
.
and
summary
Schoch v. First Fid. Bancorporation, 912 F.2d
654, 657 (3d Cir. 1990).
After discovery, if the nonmoving
party “fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and
on which that party will bear the burden of proof at trial,
. . . there can be ‘no genuine issue of material fact,’ since
17
a complete failure of proof concerning an essential element
of the nonmoving party’s case necessarily renders all other
facts immaterial.” Katz v. Aetna Cas. & Sur. Co., 972 F.2d
53, 55 (3d Cir. 1992) (quoting Celotex, 477 U.S. at 322–
23); see also Giles v. Kearney, 571 F.3d 318, 322 (3d Cir.
2009) (“The mere existence of some evidence in support of the
nonmovant
is
insufficient
to
deny
a
motion
for
summary
judgment; enough evidence must exist to enable a jury to
reasonably
find
(citing Anderson,
for
the
477
nonmovant
U.S.
at
249)).
on
the
issue”
Importantly,
in
circumstances where the nonmoving party is pro se, such as
here, “the court has an obligation to construe the complaint
liberally.” Giles, 571 F.3d at 322 (citing Haines v. Kerner,
404 U.S. 519, 520–21 (1972); Gibbs v. Roman, 116 F.3d 83, 86
n.6 (3d Cir. 1997)).
II.
Joint Authorship
To better understand Plaintiff’s newly minted theory of
joint authorship, I turn first to his Complaint.
to
Plaintiff,
the
LCID,
the
joint
work
of
According
Lindsay
and
Brownstein, was licensed to ET, the company formed by TAP and
CMR,
through
derivative
various
work,
cooperative
E-Tech,
technology and the LCID.
was
agreements
formed
by
with
combining
CMR.
A
CMR’s
Plaintiff maintains that he is the
co-owner of E-Tech because it is a derivative of the LCID.
18
Indeed, Plaintiff acknowledges that since the formation of
TAP in 1996 until 2010, when he sold his shares in TAP and
resigned as a manager of ET pursuant to the terms of the
settlement
in
the
oppressed
shareholder
lawsuit,
he
and
Lindsay shared equally in the profits generated through TAP,
which were derived by the licensing of E-Tech.
Compl., ¶ 22.
Third Am.
Plaintiff claims that since his departure in
2010, ET has continued to create derivative works from E-Tech
for which he did not receive profits; moreover, Plaintiff
asserts that Lindsay has failed and refused to account to
Brownstein
as
the
co-author
of
the
LCID/TAP
System.
Essentially, Plaintiff’s case boils down to his position that
as a co-author of the LCID since 1996, Brownstein is entitled
to profits of any derivative works that were created from the
LCID during the period of 2010 to the present.
persuaded
by
Plaintiff’s
simplistic
view
of
I am not
the
facts,
particularly since he has not carried his burden of proving
that he is a co-author of the later version of the LCID that
was licensed to TAP or ET after the 1998 LSDI Settlement
Agreement.
In Brownstein, the Third Circuit expounded that “[f]or
two or more people to become co-authors, each author must
contribute some non-trivial amount of creative, original, or
intellectual expression to the work and both must intend that
19
their contributions be combined.”
Brownstein, 742 F.3d at 64
(citing Melville B. Nimmer & David Nimmer, Nimmer on Copyright
§ 6.07 and Gaiman v. McFarlane, 360 F.3d 644, 658-59 (7th
Cir. 2004)).
Indeed, as the circuit court put it, “[t]he
components must also be ‘inseparable or interdependent’ parts
of a whole but each co-author's contribution need not be equal
for them to have an equal stake in the work as a whole.” Id.
at 65 (citing 17 U.S.C. § 101 and Nimmer on Copyright § 6.03).
In that regard, when two or more people create a “joint work”,
they become co-authors and co-owners of that work, “each
entitled to undivided ownership in the entire work.”
64 (citations and quotations omitted).
Id. at
Notably, the Third
Circuit, for the first time in Brownstein, explained that
this
type
of
ownership
interest
“vests
from
the
act
of
creating the work, rather than from any sort of agreement
between the authors or any act of registration with the
Copyright Office.”
Id.
Here, in his opposition, citing to the Copyright Act,
Plaintiff argues that he has no obligation to prove that his
code survives to this day; rather, according to Plaintiff, so
long as E-Tech is derived from the joint work of Brownstein
and Lindsay, Plaintiff is entitled to compensation.
In that
connection, Plaintiff claims that because the LCID is a joint
work, he has an undivided interest in the whole as joint
20
tenants for the duration of the copyrights.
I disagree. In
order for Brownstein to defeat summary judgment, he must
present some evidence to show that he is a co-author of the
version
of
the
LCID
derivative works.
that
was
licensed
to
ET
to
create
And, on that point, Brownstein has failed.
While it is undisputed that Brownstein is a co-author of
the LCID, the important distinction that must be drawn — which
was highlighted by the Third Circuit — is that Brownstein coowned the LCID “up until its 1997 iteration,” before he
entered into a settlement agreement with LSDI.
745 F.3d at 65.
Brownstein,
This distinction has a significant legal
implication on Brownstein’s rights as co-owner of the LCID.
As I mentioned earlier in this Opinion, the lawsuit
brought by LSDI was pending around the same time TAP entered
into a Software License Agreement with CMR in September 1997.
In that agreement, signed solely by Lindsay on behalf of TAP,
TAP and CMR formed a new business, and both companies combined
their
licensed
Software
technology
License
to
Agreement,
create
pp.
E-Tech. 11
33-34.
Prior
See
1997
to
that
agreement, in June 1997, Lindsay had independently licensed
the LCID to TAP.
See June 1997 Licensing Agreement, Schedule
11
Although the combined system was not given the name ETech until December 2000, for the purposes of this Opinion,
I will refer to the system as E-Tech for all relevant periods.
21
A.
As a result, the version of E-Tech in 1997 included the
LCID, which was co-authored by Brownstein and Lindsay.
In 1998, however, the settlement with LSDI significantly
changed Brownstein’s ownership in the LCID. 12
LSDI filed suit
against the following parties: 1) Lindsay; 2) Brownstein; 3)
TAP; 4) CMR; 5) ET; and 6) Nelson, an executive of CMR
(collectively,
“LSDI
Defendants”).
In
that
suit,
LSDI
alleged that Lindsay’s copyrights, as well as the LCID, were
owned by LSDI.
The parties eventually settled.
In the
settlement agreement, the LSDI Defendants, which included
Brownstein, agreed not to claim ownership or any of the rights
to the LSDI program or any derivative work thereof.
See 1998
LSDI Settlement Agreement, ¶ 1. Importantly, the LSDI program
refers to the version of LCID that Plaintiff had created
during his employment with LSDI.
Indeed, that version of the
LCID was the same one that Lindsay had licensed to TAP in
12
Plaintiff argues that Defendants do not have standing to
use the 1998 LSDI Settlement Agreement as a defense on their
motion. Plaintiff reasons that because Defendants’ arguments
concerning the agreement are based on the rights of LSDI,
they may not assert them here.
Plaintiff’s argument is
plainly without merit. First, Defendants were signatories to
the agreement, and as such, they may make arguments regarding
how the agreement impacts this case. More importantly, the
examination of the agreement, here, focuses on what
Brownstein had agreed to, in order to settle the LSDI lawsuit;
these considerations have nothing to do with the rights of
LSDI.
Accordingly, I reject Plaintiff’s argument in this
regard.
22
June 1997, which in turn was combined with CMR’s technology
to create E-Tech.
Pursuant to the terms of the settlement,
the LSDI Defendants agreed that LSDI would retain ownership
of the 1998 version of LCID.
However, Lindsay retained her
sole ownership to the EDS copyrights.
sum,
the
ownership
settlement
in
the
agreement
pre-1998
See Id. at ¶ 2.
deprived
version
of
Brownstein
the
LCID.
In
of
See
Brownstein, 742 F.3d at 69 (“Brownstein's copyrights and
ownership interest in his ETHN programs (and, by virtue
thereof,
the
LCID)
were
not
affected
by
the
series
of
agreements, except to the extent that the 1998 LSDI Settlement
Agreement abrogated his ownership of the pre-1998 generations
of the ETHN programs, the ‘LSDI Program.’” (emphasis added)).
Although ET continued to utilize Lindsay’s EDS and/or
later versions of the LCID after the 1998 LSDI settlement,
see December 2000 Agreement, the remaining operative question
is whether the later versions of the LCID, or any derivatives
thereof, continued to use Plaintiff’s computer code or ETHN
programs without compensation flowing to Brownstein.
See
Brownstein, 742 F.3d at 67 (“[i]t is possible that the post1997 versions of the LCID continued to employ the code created
by
Brownstein,
but
such
determination
additional factual development at trial.”)
would
require
In that regard,
to survive summary judgment, Plaintiff must present some
23
evidence to show that E-Tech or the LCID, in their later
versions, contained his work.
Plaintiff has failed to so.
After years of discovery, numerous rounds of motion practice,
and a trial, Plaintiff still has not adduced any cogent
evidence to establish that he is a co-author of any versions
of
the
LCID,
and
in
turn
E-Tech,
after
the
1998
LSDI
settlement. 13
In order to excuse his shortcoming, Plaintiff argues
that Defendants’ argument related to the 1998 LSDI Settlement
Agreement is contradicted by Lindsay’s repeated reference to
the content of the LCID as containing rules and programs.
But, Lindsay’s assertion in that regard referred to the
earlier version of the LICD, prior to the 1998 LSDI Settlement
Agreement.
See Brownstein, 742 F3d at 65.
Plaintiff further
argues that Lindsay cannot seek to avoid the implications of
the unresolved ownership of the LCID by arguing that the LCID
that was licensed by her to TAP was different and better than
13
Grasping at straws, Plaintiff argues that Section 2 of
the 1998 LSDI Settlement Agreement provides that LSDI
disclaimed ownership of the “EDS and any derivative work
thereof.” Because the LCID is a derivative work of the EDS,
Plaintiff contends that LSDI had disclaimed ownership of the
LCID. Plaintiff’s argument is belied by the very language of
section 2.
What Plaintiff fails to cite is the remaining
language of section 2, which states “unless otherwise
provided herein (the settlement agreement).”
Indeed, the
agreement recognizes that the LSDI Program, which refers to
the 1997 version of the LCID, is a derivative work of the
EDS, and that LSDI retained ownership of that program.
24
the LSDI Program referenced in the settlement agreement.
so
arguing,
burden
of
however,
showing
Plaintiff
joint
improperly
authorship
to
transfers
Defendants.
In
his
Put
differently, it is not Defendants’ burden to demonstrate that
the version of the LCID licensed to TAP after the 1998 LSDI
Settlement Agreement did not contain Plaintiff’s computer
codes; instead, Plaintiff must make an affirmative showing
that later versions of the LCID included his work, and he has
come up empty handed in that respect.
Next, Plaintiff, in a certification, states that he made
independent contributions to the LCID after leaving LSDI and
that he personally created a merged system comprised of the
LCID and CMRs name system.
More specifically, Plaintiff
certifies that he created certain programs that represent
updates and revisions that he performed to the LCID, and in
turn E-Tech, between July 1997 and November 1998.
He then
attaches voluminous copies of the programs printed in a word
processor format.
In fact, the majority of exhibits he
attached to his certification are computer codes and rules in
that context.
Having reviewed them, I do not find that
Plaintiff has raised any genuine issue of material fact.
First, to the extent Plaintiff’s revisions and updates
to the LCID occurred prior to September 1998, Plaintiff does
not explain why those updates were not subject to the 1998
25
LSDI Settlement Agreement; after all, Plaintiff agreed to
relinquish his rights to the LCID up until September 1998.
Second, to the extent Plaintiff created new or derivative
works from the LCID or the EDS after September 1998, the
exhibits he attached to his certification, purportedly as
evidence, are not self-evident.
For instance, the word
documents, which contain programs that Plaintiff proffers as
purported revisions, are series of computer codes that this
Court has no expertise to translate.
Plaintiff does not have
an expert to explain those codes or compare them to earlier
versions of the LCID, and Plaintiff, himself, has not done so
in his certification, except for self-serving, conclusory
statements insufficient to defeat summary judgment.
Paladino
v.
Newsome,
885
F.3d
203,
208
(3d
See
Cir.
2018)(“conclusory, self-serving affidavits are insufficient
to withstand a motion for summary judgment”); Kirleis v.
Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 161 (3d Cir.
2009).
Without an explanation or a proper comparison, the
Court has no basis to find that Plaintiff somehow created new
derivative works that are separate and distinct from the pre1998 version of the LCID that he relinquished to LSDI. 14
14
Finally, Plaintiff submits a recent copyright that
registered a version of the LCID, and the copyright identifies
Brownstein and Lindsay as co-authors. Without regard to the
propriety of such copyright, the registration indicates that
26
Accordingly, Plaintiff’s attempt to create issues of fact
fails, and because Plaintiff cannot demonstrate, on this
motion, that he is a co-author of a version of the LCID or ETech licensed by ET after September 1998, Defendants’ motion
for summary judgment is granted.
CONCLUSION
Based on the foregoing reasons, Plaintiff has failed to
raise any genuine issue of material fact to defeat summary
judgment.
Accordingly, Defendants’ motion is granted.
DATED: November 28, 2018
/s/ Freda L. Wolfson
Freda L. Wolfson, U.S.D.J
the date of first publication of the LCID covered by the
copyright was November 1, 1996. See Copyright Registration,
TX 8-545-832. Thus, this registration still does not answer
the relevant question here: whether Plaintiff’s work
contributed to post-1998 versions of the LCID or E-Tech.
27
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