Warner Bros. Entertainment Inc. et al v. RDR Books et al

Filing 90

PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW. Document filed by RDR Books.(Ahrens, Julie)

Warner Bros. Entertainment Inc. et al v. RDR Books et al

Doc. 90

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------- x : WARNER BROS. ENTERTAINMENT INC. and : J.K. ROWLING, : Case No. 07 Civ. 9667 (RPP) : Plaintiffs, : : - against : : RDR BOOKS and DOES 1-10 : : Defendants : : ---------------------------------------- x DEFENDANT RDR BOOKS' PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW

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Dockets.Justia.com

Defendant RDR Books ("RDR") respectfully submits these proposed findings of fact and conclusions of law following the non-jury trial on the merits that was held on April 14, 15, and 16, 2008, following consolidation of the trial of this matter with the hearing on Plaintiffs' motion for preliminary injunction pursuant to Federal Rule of Civil Procedure 65. PROPOSED FINDINGS OF FACT Copyrighted Works At Issue A. 1. Harry Potter Novels Plaintiff J.K. Rowling ("Ms. Rowling") wrote and owns the copyright in

seven Harry Potter novels: Harry Potter and the Sorcerer's Stone (1998) (Serial No. TX 4-465-397); Harry Potter and the Chamber of Secrets (1999) (Serial No. TX 4-465-398); Harry Potter and the Prisoner of Azkaban (1999) (Serial No. TX 4-465-399); Harry Potter and the Goblet of Fire (2000) (Serial No. TX 5-122-771); Harry Potter and the Order of the Phoenix (2003) (Serial No. TX-5-705-321); Harry Potter and the HalfBlood Prince (2005) (Serial No. TX-6-179-388); Harry Potter and the Deathly Hallows (2007) (Serial No. TX-6-578-062) (Tr. 43:8-9; EX 12-A). 2. Plaintiff Warner Bros. Entertainment ("Warner Bros.") owns the exclusive

film rights and copyrights to the Harry Potter series (EX 26 (Williams Decl. ¶ 3)) and is the exclusive distributor for worldwide distribution of these films (EX 26 (Williams Decl. ¶ 4)). 3. Warner Bros. released full-length feature films of the first five Harry

Potter novels: Harry Potter and the Sorcerer's Stone (2001) (Serial No. PA0001063646); Harry Potter and the Chamber of Secrets (2002) (Serial No. PA0001105748); Harry 2

Potter and the Prisoner of Azkaban (2003) (Serial No. PA0001222542); Harry Potter and the Goblet of Fire (2005) (Serial No. PA 0001279121); Harry Potter and the Order of the Phoenix (2007) (Serial No. PA 0001355547) (EX 26 (Williams Decl ¶ 3)). In addition, a sixth film, Harry Potter and the Half-Blood Prince, is scheduled for a worldwide release in November 2008. Production of the seventh, Harry Potter and the Deathly Hallows, has been announced but a release date has not yet been set (EX 26 (Williams Decl. ¶ 4)). 4. Plaintiffs have not offered into evidence the copyright registrations for the

Harry Potter films, nor have they offered copies of the Harry Potter films themselves. 5. The Harry Potter novels have achieved tremendous success and

phenomenal sales (Tr. 47:14-18; 433:1-3). Together the Harry Potter novels have sold more than 300 million copies worldwide. The final book in the series Harry Potter and the Deathly Hallows alone has sold over 13 million copies since July 2007, earning its American publisher, Scholastic, over $250 million (Tr. 443:15-20). The books have won many children's literary awards and the British Book Award (Tr. 47:17-20). B. 6. Fantastic Beasts And Quidditch Through The Ages Ms. Rowling wrote and owns the copyright in two Harry Potter

companion books, which are not novels, Quidditch Through the Ages (Serial No. TX-5374-649) and Fantastic Beasts and Where to Find Them (Serial No. TX-5-374-653) (Tr. 49:10-16; EX 12-A). 7. Quidditch Through the Ages and Fantastic Beasts and Where to Find

Them have both sold more than one million copies (Tr. 445:21-446:2) and generated over $30 million in royalties to Ms. Rowling, which she has donated to charity (Tr. 49:25-

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50:10). C. 8. The Daily Prophet Ms. Rowling wrote three newsletters, a fictional newspaper for fans,

called the Daily Prophet, which were sent to fans without charge (Tr. 73:19-25). Ms. Rowling asserts that she owns the copyright in the Daily Prophet Newspapers (Tr. 74:68), but she has offered no copyright registrations or documentary proof of copyright ownership. In addition, Plaintiffs have not offered into evidence copies of the Daily Prophet Newsletters themselves. D. 9. Wizard Cards Ms. Rowling wrote the text of "wizard cards" for use in an Electronic Arts

video game (Tr. 76:8-14). Plaintiffs admit that the copyrights in the video games in which the wizard cards appear are registered solely to Electronic Arts and the registrations from the United States Copyright Office confirm this. (Pursuant to Federal Rule of Evidence 201, the Court takes judicial notice of registration certificates from the United State Copyright Office, all of which identify Electronic Arts Inc. as the sole owner of copyrights bearing the following serial numbers: PA0001062155, PA00160374, PA0001067206, P0001069813, PA 0001217438, PA 0001218122, PA 0001221429, PA0001154042, PA00011255093, PA0001122439, PA0001117142, PA0001117207.) 10. Warner Bros. submitted no evidence that it owns these copyrights, not in

testimony or in the declaration of Jeremy Williams or any other Warner Bros. representative. While Ms. Rowling testified that she "believe[s]" Warner Bros. and Electronic Arts own the copyright to the wizard cards (Tr. 76:15-17) that hearsay testimony is contradicted by the copyright registrations for these works.

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The Lexicon A. 11. Origins Of The Lexicon Website Steven Jan Vander Ark is a former teacher and librarian from Michigan

who owns and is the principal author of the content on the Harry Potter Lexicon website (Tr. 334:4-17). Mr. Vander Ark became an ardent Harry Potter fan after reading the first novel, and while reading the second novel in 1999, he started taking notes to keep track of facts in the books (Tr. 335:1-15). He expanded these notes to include short descriptive lists of spells and character names, which he shared on internet discussion groups for fans (Tr. 336:4-11; EX 502 (Vander Ark Decl. ¶ 5)). 12. Mr. Vander Ark began work on his own website, the Harry Potter

Lexicon, in 1999, and opened the site in August 2000 (Tr. 336:20-337:10). The HTTP address for the Lexicon website is http://www.hp-lexicon.org. Mr. Vander Ark testified that his purpose in establishing the website was to create a comprehensive encyclopedia, a reference tool that organized information from the Harry Potter books and collected numerous facts in one central source for fans to use to find definitions of all the characters, places, spells, creatures and physical objects in the world of Harry Potter. (Tr 338:6-21; EX 502 (Vander Ark Decl. ¶ 13)). 13. For the first three years after he established the Lexicon website, Mr.

Vander Ark worked on it alone. He did so as a hobby, spending his nights and weekends updating it with new information while he worked as a teacher and librarian during the day (Tr. 339:15-17). With the publication in 2003 of the fifth book in the series, Harry Potter and the Order of the Phoenix, the amount of work became too great for Mr. Vander Ark to handle by himself because the book contained a large number of new

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characters, spells and details, as well as new information and facts relating to events and characters that appeared in previous books. Fans were clamoring for Mr. Vander Ark to add this new material to the website, and existing encyclopedia entries needed to be updated and the new information catalogued. Because of these demands, Mr. Vander Ark recruited others to help him edit the website (Tr. 339:18 - 340:8). The Lexicon website currently has an editorial staff of seven or eight people (Tr. 340:12-16). 14. In addition to Mr. Vander Ark, two other website editors are librarians,

whose training and skills have helped them to develop the Lexicon website as a reference tool that collects information for quick and easy access (Tr. 341:2-342:5). Mr. Vander Ark and the editors organize the website so that people who want to locate and identify specific information about the Harry Potter works can use the website's collection of facts as a centralized, quick reference rather than spending considerable time paging through the seven Harry Potter novels and other works to find the information they need (Tr. 342:2-343:1). Other website editors add additional specialized skills, including a teacher of Latin and Greek, who consults on languages (Tr. 341:2-3; 344:2-6). 15. The material on Mr. Vander Ark's website is drawn from the Harry Potter

books, and contains background information drawn from many outside resources to help illuminate what Mr. Vander Ark calls, "the incredibly rich world and hidden meanings" of the Harry Potter texts (Tr. 345:21-346:6). The outside resources Mr. Vander Ark relies on include etymological dictionaries, encyclopedias, historical reference books, and mythological reference books to explicate the facts of the Harry Potter novels (Tr. 346:12-347:19). The reference works Mr. Vander Ark has used include Bullfinch's Mythology, Field Guide to Little People, New Shorter Oxford English Dictionary, and

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online encyclopedias such as Encyclopedia Mythica and Haunted Britain (Tr. 347:11348:19; EX 502 (Vander Ark Decl. ¶ 14)). 16. In addition to the seven Harry Potter novels, Mr. Vander Ark's

encyclopedia entries also draw on material from the Fantastic Beasts and Quidditch Through the Ages companion books, the Daily Prophet newsletters, the magic wizard cards, and interviews of Ms. Rowling (Tr. 348:7-13; EX 502 (Vander Ark Decl. ¶ 14)). 17. The Lexicon website is extremely popular with fans of Harry Potter. It

attracts hundreds of thousands of visitors every month from all over the world (Tr. 352:525; EX 502 (Vander Ark Decl. ¶ 17)). Access to the Lexicon website has always been free and available to everyone; there never has been a fee and/or password needed for entry (Tr. 351:25-4; EX 502 (Vander Ark Decl. ¶ 16)). 18. Since Mr. Vander Ark created the Lexicon website in 2000, it has been a

volunteer effort that earned little money. For the seven year period between August 2000 and October 2007, the website generated approximately $6,500 to $7,000 in total revenue, an average of approximately $1,000 per year (Tr. 350:1-10). The costs associated with running the website were nearly the same or slightly less than the revenue it generated (Tr. 350:20). Since October 2007, when Mr. Vander Ark added additional advertisements to the website to cover anticipated increases in expenses, the site has generated approximately $400 per month in revenue (Tr. 351:6-18). 19. The usefulness of Mr. Vander Ark's website as a reference source has

been acknowledged by the words and actions of numerous fans, Ms. Rowling, representatives of Warner Bros. and Scholastic, Inc., and the makers of the Harry Potter video games at Electronic Arts.

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20.

Ms. Rowling praised the Lexicon website as a "great site" and in 2004

gave it her "fan site award," one of eight such awards she has given. (Tr. 92:1-17). About the Lexicon website Ms. Rowling wrote, "This is such a great site that I have been known to sneak into an internet café while out writing and check a fact rather than go into a bookshop and buy a copy of Harry Potter (which is embarrassing). A website for the dangerously obsessive; my natural home." (Tr. 118:2-119:2). 21. In September of 2006, Warner Bros. flew Mr. Vander Ark to the set of the

film The Order of the Phoenix where he met David Heyman, the producer of all of the Harry Potter movies. Mr. Heyman told Mr. Vander Ark that Warner Bros. used the Lexicon website almost everyday (Tr. 386:8-20; EX 502 (Vander Ark Decl. ¶ 39)). 22. In July 2007, Mr. Vander Ark visited the Electronic Arts studios, where he

saw the walls of the studio covered with printouts from the Lexicon website (Tr. 387:313; EX 502 (Vander Ark Decl. ¶ 39)). 23. In addition, Cheryl Klein, a Senior Editor at Scholastic Inc., wrote Mr.

Vander Ark to thank him and his staff for the help the Lexicon website gave Scholastic publishers during the editing process (EX 502 (Vander Ark Decl. ¶ 39); Ex. 502a)). 24. Fans of the Lexicon website often suggested that Mr. Vander Ark create a

print version of the Lexicon. Beginning around 2003, Mr. Vander Ark considered creating a book from the material on his website (Tr. 355:13-18). At that time, Mr. Vander Ark had two reasons for not creating such a book: (1) the Harry Potter series was not finished yet, so an encyclopedia would not be complete; (2) he believed that publishing such a book would not be allowed under copyright law (Tr. 355:20-356:4). 25. Mr. Vander Ark, who is not a lawyer, is unsure why he formed the belief

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that publishing the Lexicon as a book would be prohibited by copyright law; at the time he had never spoken to an attorney regarding what copyright law would allow (Tr. 356:10) and he did not know then if his belief was accurate or not. (Tr. 356:10-25). B. 26. Decision To Publish The Lexicon Book Roger Rapoport is the president of Defendant RDR Books, a book

publisher based in Michigan. RDR Books seeks to publish the "Harry Potter Lexicon" by Steve Vander Ark (Tr. 150:19-151:2). 27. Mr. Rapoport learned of Mr. Vander Ark and the Lexicon website in

August of 2007, when he read an article in his local paper, The Muskegon Chronicle about Mr. Vander Ark and the Lexicon website (Tr. 153:2-13; EX. 77). Upon reading the article, Mr. Rapoport recognized an opportunity to publish a Harry Potter encyclopedia based on Mr. Vander Ark's website (Tr. 154:7-15). 28. In August 2007, Mr. Rapoport contacted Mr. Vander Ark about publishing

a Harry Potter encyclopedia based on some of the materials from the Lexicon website (Tr. 357:10-19). 29. During their initial meetings and conversations in August, Mr. Vander Ark

raised his concerns regarding the legalities of publishing the Lexicon. Mr. Rapoport assured Mr. Vander Ark that he would look into the legal issue. Mr. Rapoport later informed Mr. Vander Ark that he had determined that publication of content from the Lexicon website in book form would be legal (Tr. 358:25-359:5). 30. Mr. Vander Ark asked Mr. Rapoport to "stand behind" this opinion, by

agreeing that RDR would defend and indemnify him in the event of any lawsuits, and Mr. Rapoport agreed (Tr. 178:8-15; 360:8-21; EX 502 (Vander Ark Decl. ¶ 28)). On August

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23, 2007 RDR Books and Mr. Vander Ark signed a contract ­ which included an indemnification clause protecting Mr. Vander Ark ­ for the publication of a book entitled "The Harry Potter Lexicon" (Tr. 359:6-10; Tr. 360:8-21; EX 502 (Vander Ark Decl. ¶ 28); EX 14-J). 31. Mr. Vander Ark and Mr. Rapoport orally agreed that the book would be

limited to the encyclopedia sections of the Lexicon website, that is the sections of the website that gave descriptions and commentary on individual names, places, spells, creatures, and things from the Harry Potter stories (Tr. 359:14-21; EX 502 (Vander Ark Decl. ¶ 28)). 32. The two men decided on an encyclopedia, organized in the A to Z format

used on the Lexicon website, which they felt would be an easily accessible resource for readers to use rather than sifting through 200 chapters of the original books to track down diffuse facts (Tr. 361:20-362:6; 366:25-367:24). Because the Harry Potter books do not contain footnotes, an index, or glossary of any kind, Mr. Rapoport and Mr. Vander Ark believed an A to Z guide would fill the demand of fans wanting easy access to the facts of Harry Potter, all organized in one central location (Tr. 362:12-17). 33. Mr. Vander Ark and his editors created the manuscript of the book by

using the material from the Lexicon website ­ all of the entries in the book version come from the website (Tr. 365:1-5; EX 502 (Vander Ark Decl. ¶ 30)). But because the book was intended to be a complete but easy-to-use reference guide, there were space limitations for the printed work and about half of the material from the website was not included in the book. (Tr. 365:1-11; 366:9-18; 369:3-14; EX 502 (Vander Ark Decl. ¶¶ 30, 31, 33)).

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34.

All of the material in the Lexicon book is currently on the Lexicon website

(Tr. 365:1-5; EX 502 (Vander Ark Decl. ¶ 30)). Moreover, nearly all of the material was available on the Lexicon website in August 2007, and had been for years, before Mr. Vander Ark began composing the Lexicon book. The only material in the book that did not previously appear on the website was information about the seventh and final Potter novel, Harry Potter and the Deathly Hallows, which was released in 2007. Mr. Vander Ark wrote the material involving the Deathly Hallows book simultaneously for the Lexicon book and the Lexicon website because it had just been released when Mr. Vander Ark began composing the Lexicon book (EX 502 (Vander Ark Decl. ¶ 32)). C. 35. Content Of The Lexicon Book The Lexicon book is an A to Z guide to the facts of the Harry Potter

world, referencing in one place the thousands of things ­ creatures, characters, spells, events, places ­ that exist or are referenced in the Harry Potter works. It contains thousands of citations to the original sources of the information it organizes, referring the reader back to the original works from which the information is drawn. 36. Mr. Vander Ark explained he created the Lexicon to be a "quick reference,

the kind of thing that somebody who's reading would need to look up a fact or, for example, a fan who is writing a story and needs to know some fact about a character for their story. That's the kind of reference this is. So we tried to make a concise, easy-touse reference, but also one that was as complete as possible." (Tr. 369:19-25). 37. Mr. Vander Ark did not intend the Lexicon book to be a substitute or a

replacement for the Harry Potter works, but rather he wrote the Lexicon for fans and readers who are familiar with the names, characters, spells, events, places and storylines

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in the Harry Potter works (Tr. 287:17-19; 307:2-4); EX 502 (Vander Ark Decl. ¶ 41)). 38. Janet Sorensen is a tenured associate professor in the English Department

at the University of California at Berkeley, who has taught and researched at the university faculty level for fourteen years. She received her PhD in English in 1994 from State University of New York at Buffalo (EX 503a). Dr. Sorensen teaches British and American Literature from the seventeenth through twentieth centuries and her field of specialization is eighteenth-century British literary studies, with a particular interest in language, lexicons, and dictionaries (EX 503 (Sorensen Decl. ¶ 1)). Her expert testimony established the long history of lexicons, encyclopedias and other reference guides in English literature, as well as the Lexicon's placement in that context and its value as a reference guide and aid to readers of the Harry Potter works. 39. Dr. Sorensen defined a reference guide to literature as "something that

would help readers understand, access, in some cases illuminate layers of meaning in a particular text." (Tr. 499:14-18). Reference guides have existed for centuries, emerging in the late seventeenth and early eighteenth centuries at the time of a simultaneous expansion in the amount of published, printed material, and literacy rates (Tr. 500:9-20). 40. Dr. Sorensen explained that fantasy literature, literature that "invents very

elaborate universes, creates places, imaginary beings, imaginary flora and fauna, often of a sort of layered and extensive variety," is especially given to generating a large number of reference guides (Tr. 504:4-11). These types of fantasy books, such as those by C.S. Lewis and J.R.R. Tolkien, lend themselves to reference guides because they involve a large number of invented characters, creatures and places introduced over a number of volumes, that readers read over time. Thus, a reference guide is useful because it reminds

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readers of the many characters and their relationships, as well as offer insights into the significance of invented items (Tr. 507:8-18). Works of fantasy literature therefore may generate a large number of companion guides, and Dr. Sorensen found 19 or 20 companion guides to Tolkien's novels, and about 15 guides to Lewis's works (Tr. 507:15). 41. In Dr. Sorensen's opinion, the Harry Potter novels fall within that genre of

fantasy literature because "they create a rich universe of invented beings, places [and] things." (Tr. 504:12-15). Like Lewis and Tolkien's works, the Harry Potter novels may lead a reader to want to use a reference guide because the novels contain an elaborate world, described in thousands of pages of texts, and involving characters, creatures, spells that appear in one book and maybe again hundreds of pages later, or in another book. Having a reference guide that acts as a memory guide to these novels can often be helpful (Tr. 504:16-23). 42. Dr. Sorensen explained that authors often write their own reference guides

to their own literature, at times in response to guides written by third parties with which they disagree (Tr. 502:19-25). One value of having other third-party guides in addition to the author's guide, is that the author may not be the best judge of what in her text needs illumination (Tr. 503:18-504:1). Another value of having multiple guides to a text is that there usually is not a single authoritative way to understand a book (Tr. 508:12-20). (1) 43. The Lexicon Synthesizes And Distills Facts Of The Harry Potter Universe

The seven novels in the Harry Potter series were published over a period

of ten years and released periodically, often with two years elapsing between releases. The series totals several thousands of pages in length and contains hundreds of thousands

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of words (Tr. 653:19-654:5). Together, the novels refer to hundreds of characters, creatures (both real and fanciful), places (both real and fanciful), spells, objects and devices (some of them magical). Not every character or creature appears in every novel. A character may appear in the first book, and then disappear until the fifth or sixth book (Tr. 372:6-13; Tr. 504:18-23; 505:10-22; EX 502 (Vander Ark Decl. ¶ 34)). Additional information about the characters, creatures, places, spells, objects and devices that appear in the Harry Potter novels is scattered across scores of other sources, including dozens of interviews Ms. Rowling has given over the years, and her short companion books, Quidditch Through the Ages and Fantastic Beasts and Where to Find Them (Tr. 373:23374:7). 44. The testimony of Dr. Sorensen and Mr. Vander Ark establish the utility of

the Lexicon as a reference guide to the elaborate world of the Harry Potter works (Tr. 372:14-373:15; Tr. 604:21-23). Mr. Vander Ark testified that a fundamental purpose of the Lexicon is to gather and synthesize information from the thousands of pages and hundreds of chapters of the Harry Potter works, plus hundreds of other sources of information given by Ms. Rowling (Tr. 373:23-374:14; EX 502 (Vander Ark Decl. ¶ 45)). Dr. Sorensen's expert opinion supports Mr. Vander Ark's testimony. Dr. Sorensen explained, "the chief use and value of this text is the way in which it is synthesizing and distilling information for quick reference material for a reader." (Tr. 578:19-21; see also Tr. 509:23-510:3). 45. The facts gathered in the Lexicon are accompanied by thousands of

citations that indicate where they were found within the corpus of the Harry Potter works. These citations are found in parentheses, with a chapter number where applicable (EX

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502 (Vander Ark Decl. ¶ 45); EX 1). Mr. Vander Ark explained that page numbers are excluded from the citations because the various editions of the Harry Potter books have different pagination, but the chapter numbers remain consistent (Tr. 277:19-278:1). 46. The synthesizing function of the Lexicon is evident in any number of

examples that illustrate how the book collects and synthesizes information from the various Harry Potter novels and other sources, and cites to the sources for the facts collected. Such examples include "Rubeus Hagrid" (citing to more than seven different sources); "McKinnon, Marlene" (citing to four different Harry Potter novels in a onesentence entry); "Chudley Cannons" (citing to various Harry Potter novels, Quidditch Through the Ages and the Daily Prophet newsletters); "Medical Magic" (a category created by Mr. Vander Ark to collect facts related to the magic and spells in the book that replace real-world medicine; citing nearly every novel and the Daily Prophet newsletters) (Tr. 375:7-24; Tr. 376:9-23; EX 1; EX 502 (Vander Ark Dec. ¶ 45)). Other examples include the entries for "Moaning Myrtle" and "Polyjuice Potion" each of which collects information gathered from a variety of sources, and synthesizes it into a concise entry (EX 1). 47. In addition to synthesizing information, the Lexicon is also valuable

simply as a memory aid. A reader may, for example, wonder on reading Harry Potter and the Order of the Phoenix (published in 2003) where he or she previously encountered character Dedalus Diggle, a name last mentioned in "Harry Potter and the Philosopher's Stone (published in 1997). The Lexicon provides the answer to this question (Vander Ark Decl. ¶ 34; EX 1) (EX 502 (Vander Ark Decl. ¶ 34); EX 1). 48. Mr. Vander Ark testified that the value of the Lexicon as a ready source

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for such information goes beyond that of a memory aid. As Mr. Vander Ark explained, he created the Lexicon so that readers and fans can easily find information for a number of purposes, such as to research a paper on women in literature, write fan fiction, create art work, write wizard rock songs, or the like based on the Harry Potter works (Tr. 336:12-19; 338:6-11; 342:2-343:1; 351:19-24; 361:25-362:6; 369:10-25; 375:18-25). The Lexicon thus also functions as a resource to support the creative efforts of many Harry Potter fans. 49. Mr. Vander Ark acknowledged that there is substantial linguistic overlap

between many Lexicon entries and the sources from which information is drawn, including the Harry Potter works. But he explained that such overlaps were necessary to accurately report the facts of the novels. Mr. Vander Ark testified that when he identified specific characters, places or spells, he used language similar to the novels simply to make clear what was being described (Tr. 276:1-9; 280:12-19; EX 502 (Vander Ark Decl. ¶ 36)). The alternative would have been to employ very artificial devices, such as nicknames, substitute names, or vague and generic descriptions of the things described. Mr. Vander Ark testified that doing so, however, would have interfered with the purpose and goal of the Lexicon to accurately organize and report information found in the Harry Potter works in an easily accessible format (Tr. 383:11-384:3; EX 502 (Vander Ark Decl. ¶ 36)). 50. While it would be possible to shorten certain Lexicon entries and use

fewer of the words from the original text, doing so would detract from the value of the Lexicon as a comprehensive guide of factual information (Tr. 281:1-23; 286:14-17). Dr. Sorensen testified that other Lexicons and reference guides frequently quote and

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paraphrase liberally from the underlying works (Tr. 510:10 - 511:21). Dr. Sorensen likewise acknowledged that while it may be possible to write shorter entries to remind readers who certain characters are, the longer, more descriptive entries in the Lexicon serve the purpose of illuminating the importance of certain characters and figures (Tr. 545:8-547:4). Dr. Sorensen testified that another reference guide with a different focus might find it appropriate to describe things differently in entries of different length (Tr. 551:2-12). 51. Mr. Vander Ark admitted that certain entries in the present manuscript for

the Lexicon book quote songs and poems verbatim, but he testified that these songs and poems will be deleted from the Lexicon before it is published (Tr. 382:22-383:10). Similarly, after the lawsuit was filed, Mr. Vander Ark revised the Lexicon entries regarding the Fantastic Beast materials to remove a significant amount of overlapping language (Tr. 382:6-382:21; EX 79). 52. Plaintiffs offered several demonstrative exhibits comparing the Lexicon

text to the text of the Harry Potter works. Plaintiffs contend these charts show the extent to which the Lexicon copies Ms. Rowling's words. The reliability of these charts is undermined by the fact that the entries on Plaintiffs' charts often report the text of the Lexicon incorrectly. For example, a comparison of the Lexicon's text in Exhibit 1 to Plaintiffs' Exhibit 48 reveals that Plaintiffs' exhibit misquotes the Lexicon's entries for Aguamenti; apparition; astrology; Binns, Professor Cuthbert; and Decoy Detonators (EX 1; EX 48). Similarly, Plaintiffs' Exhibit 47 inaccurately describes the Lexicon entry for "Hog's Head," and quotes a phrase that is nowhere to be found in the Lexicon entry (EX 1; EX 47).

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53.

The utility and credibility of Plaintiffs' charts are further damaged by the

fact that these charts omit the full text of the Lexicon entries, to make it appear that the entire Lexicon entry is copied from the Harry Potter works, and the charts exclude information contained in the Lexicon entries that comes from sources outside the Harry Potter works. The charts also exclude the Lexicon's numerous citations to source materials and do not include phrases from the Lexicon, such as "According to Ron" or "Dumbledore said," which indicate that the Lexicon is quoting characters' dialogue (Tr. 278:16-279:15; Tr. 381:17-382:3; EX 1; EXs 165-171; EXs 43-38). 54. Plaintiffs also contend that the Lexicon is not valuable as a reference guide

because it provides few citations. This assertion is contradicted by the text of the Lexicon itself, which contains citations to the title and chapter of the relevant Potter books for each entry in the Lexicon (EX 1; Tr. 276:20-277:1; 279:6-20; EX 502 (Vander Ark Decl. ¶ 44 c. (1))). In response to Plaintiffs' complaint that the Lexicon lacks quotation marks, Mr. Vander Ark admitted quotation marks were not always used but he explained that Lexicon entries nevertheless indicate where they are quoting statements of characters; moreover, these indirect quotes are followed by a citation to the source material (Tr. 278:16-279:15). 55. Plaintiffs further contend that the Lexicon reveals a tremendous amount of

the plot lines of the Harry Potter novels, and therefore may discourage children from actually reading the books. (Tr. 103:8-22; Tr. 307:14-17; Tr. 410-411; Tr. 418-419). This contention is not credible. As Ms. Rowling herself admitted, the Lexicon would not be read for entertainment value (Tr. 650:24-651:1). People, particularly children, interested in finding a short-cut substitute for reading the seven novels, could easily watch the

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Harry Potter movies (Tr. 427:11-16). Plaintiffs' objections to the Lexicon on this basis are not persuasive. 56. In sum, the witness testimony and documentary evidence offered confirms

that the Lexicon provides a comprehensive, centralized source where the myriad Harry Potter facts are distilled, explained and organized for ease of reference. (2) 57. The Lexicon Draws On Outside Resources And Adds Insights To The Harry Potter Works

In addition to synthesizing and distilling large amounts of information into

an A to Z reference guide, the Lexicon offers a significant amount of original insight into the Harry Potter texts. 58. The Lexicon provides etymologies for approximately 200 terms (EX 1).

The Harry Potter works themselves do not contain these etymologies (Tr. 512:12-20; EX 587). 59. The Lexicon's etymologies clue readers into the history, sources and

allusions that underlie invented terms in the texts. As Professor Janet Sorensen explained, the Lexicon's etymologies show Ms. Rowling's thoughtfulness in naming her characters, reveal layers of linguistic information, historical information and depth of the characters, as well as provide information about motifs running throughout the novels (Tr. 515:21-516:24; EX 587). The etymologies uncover and illuminate Ms. Rowling's references to a wide range of languages, vernaculars, and "cultural repositories," and in Dr. Sorensen's opinion, ultimately contribute to readers' appreciation of Ms. Rowling's achievement (Tr. 515:16-516:2; Tr. 517:17-23). 60. Plaintiffs' witnesses, Ms. Rowling and Jeri Johnson, criticize the

Lexicon's etymological explanations as wrong, misinformed and sloppy, while also

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complaining that the Lexicon offers too few of them (Tr. 56; 67-73; Tr. 597:12-17). 61. Etymologies, however, are often subject to debate. As Dr. Sorensen

persuasively explained, this is a "rich and interesting terrain that is often fought over." (Tr. 522:10-14). One thing that makes competing etymologies interesting and helpful is that "they point to the very complex history of language which is not usually something that can be established with absolute accuracy." (Tr. 580:16-20). 62. Dr. Sorensen further explained that different authors often find varied

significance and offer diverse meanings of the original works they analyze, and that this is one of the values of having multiple guidebooks published by a variety of authors (Tr. 581:1-7). By adding his non-academic voice to the debate, Mr. Vander Ark offers competing interpretations, which even if subject to debate, contain useful information (Tr. 520:2-20; Tr. 523:1-7). 63. As for the number of etymologies the Lexicon includes, the Lexicon

would not be expected to offer an etymology for every entry, because many entries do not require an etymology. The etymologies that are offered in the Lexicon explain invented terms that are interesting composites of different words or different roots of other languages (Tr. 579:10-16). Again, this is why multiple guidebooks are valuable; different authors offer other interpretations and can add information regarding terms they find significant (Tr. 579:20-580:6). 64. Another way the Lexicon adds material that enhances readers'

understanding of the Harry Potter texts is by including referential material that offers insight into the Ms. Rowling's allusions to literature, mythology, and other cultural sources (Tr. 345:22-346:6; Tr. 347:4-10; Tr. 512:21-514:10; EX 502 (Vander Ark Decl.

20

¶ 44 c. (3)); EX 503 (Sorensen Decl. ¶ 18)). Such examples in the Lexicon include information regarding the allusions to Shakespeare's Macbeth and Norse mythology underlying the name of a rock band in the novels, the "Weird Sisters," (Tr. 523:14524:11; EX 1; EX 587), and to Judaic tradition alluded to in the term "Avada Kadavra" (Tr. 526:23-527:24; EX 1; EX 587). 65. In addition, the Lexicon includes descriptions and discussions of real-

world geographic places that appear in the Harry Potter novels. These entries educate readers about many places in this fictional world that also exist in the real world. Additional entries educate readers regarding the real-world historical significance of the places referenced in the Harry Potter world (Tr. 513:4-14; Tr. 527:25-17; Tr. 529:4-24; EX 587; EX 503 (Sorensen Decl. ¶¶ 15, 20)). 66. The Lexicon also includes entries that illuminate cross-cultural

translations, which translate British vernacular and slang for American readers, and entries that provide descriptions of British cultural references and places. According to Dr. Sorensen, such entries are another way the Lexicon enhances the quality of reading by providing additional information not contained in the Harry Potter novels (Tr. 533:12; EX 587; EX 503 (Sorensen Decl. ¶ 21)). 67. The Lexicon contains entries that note "flints" (mistakes or

inconsistencies) made in the Harry Potter texts, entries that explain how various events are connected, and still others that provide information regarding how the Harry Potter world connects to the author's life experiences and history (Tr. 297:15-298:1; Tr. 533:3535:9; EX 587; EX 503 (Sorensen Decl. ¶¶ 23-26)). 68. While this referential information in the Lexicon often does not contain

21

literary commentary or analysis, Dr. Sorensen testified that it is nevertheless valuable because it provides information that enables readers to draw their own connections and interpretations, and develop their own commentary and analysis regarding the meaning and significance of the Harry Potter texts (Tr. 526:4-19). 69. Professor Sorensen confirmed that in her expert opinion, the additional

referential information provided by the Lexicon will give readers a deeper knowledge and appreciation of what is going in the original novels and contribute to a deeper appreciation of Ms. Rowling's achievement (Tr. 524:12-23). The Court agrees. (3) 70. The Lexicon Offers Critical Interpretation

In addition to the above, the Lexicon offers a limited amount of critical

interpretation of the Harry Potter works. 71. The Lexicon's critical interpretation usually occurs in descriptions of the

characters. The entry for Neville Longbottom, for example, contains extensive observations about the nature of his bravery and leadership (Tr. 535:18 - 536:9; EX 503 (Sorensen Decl. ¶ 28); EX 587; EX 1). The entry for Luna Lovegood likewise includes analytical observations about her nature, each supported by references to actions and events from the Harry Potter works (EX 503 (Sorensen Decl. ¶ 29); EX 1). Similarly, the entry for Draco Malfoy offers hypotheses about his motivations and his nature, and again supports these hypotheses with textual references (Tr. 536:10-10; EX 503 (Sorensen Decl.¶ 30); EX 587; EX 1). Such character entries and the interpretations they offer are useful because they lend interpretation and depth of understanding regarding who these characters are and what makes them tick (Tr. 535:10-15; EX 503 (Sorensen Decl. ¶ 27)). 72. While the entries for major characters are often quite long, and do discuss

22

what happens to the characters in the course of the stories, fictional characters are defined in large part by what happens to them (Tr. 612:2-20). Lengthy entries for major characters are necessary because the Harry Potter works, by definition, provide a large quantity of information about major characters. Thus Mr. Vander Ark explained that "[w]hen entries are longer than a paragraph, it is always because the matter being described requires longer treatment, either to unpack the richness of Ms. Rowling's writing or to provide information about how the matter in question fits into the overall story of the books." (EX 502 (Vander Ark Decl. ¶ 44 (1) c); EX 1). Indeed, Ms. Rowling and Plaintiffs' expert Jeri Johnson both testified that they would expect that the longest entries in the Lexicon would be about the most important characters in the novels (Tr. 143:11-18; Tr. 637:12-20). 73. These lengthy entries do not serve as plot summaries, or abridgements of

Ms. Rowling's work. A summary or abridgement would be organized in the same sequence the story in the Harry Potter works is organized, and would follow the events that take place in a novel in the order in which they take place in the narrative. The character entries in the Lexicon do not do this (Tr. 548:2-19). They tend to organize the information in a manner that is most helpful in learning about the character, and this almost always differs from the sequence of information as it appears in the Harry Potter Works (EX 1 (entry for "Harry Potter" begins with information contained in the seventh and final book)). 74. The evidence demonstrates that the Lexicon book is intended to encourage

fan interest in, and to serve as a reference to, the Harry Potter works. It thus offers no substitute for those works. The Lexicon also adds significant information not found in

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Ms. Rowling's work, including etymologies, referential material and commentary. It synthesizes and distills the myriad facts found in the Harry Potter world and allows the user to quickly find information he or she needs, for many purposes such as a memory aid or to help fans develop their own commentary, write research papers, or fan fiction (Tr. 369:10-25; 370:4-18; Tr. 509:22 - 510:3). Plaintiffs' Criticisms Of RDR's Attempts To Publish The Lexicon Without Permission A. 75. Allegations of Bad Faith Plaintiffs contend that Defendant RDR Books acted in bad faith by trying

to publish the Lexicon without first providing Plaintiffs' counsel with a copy of the manuscript or getting Plaintiffs' approval. While the evidence showed that Mr. Rapoport and Mr. Vander Ark were trying to finish updating and editing the Lexicon manuscript and to publish it within a matter of weeks (Tr. 165:10-21), the evidence does not support Plaintiffs' contentions that RDR was rushing the book to the market before Ms. Rowling could finish her encyclopedia. Both Mr. Rapoport and Mr. Vander Ark testified that they wanted the book to be on the market for the Christmas sales season and before other third-party companion guides were published (Tr. 165:10-21; Tr. 166:21-167:3; Tr. 255:15-25). Both also testified that they never thought the Lexicon would compete with an encyclopedia by Ms. Rowling (Tr. 231:23-25; 389:1-20). Moreover, Ms. Rowling herself conceded she announced her intention to write a companion guide as early as 1998, yet she is at least two to three years away from completing it. (Tr. 51:6-12; Tr. 53:14-18) 76. Plaintiffs elicited additional testimony regarding Mr. Rapoport's

correspondence with Plaintiffs' counsel and Warner Bros. in the weeks leading up to the

24

filing of this lawsuit and Mr. Rapoport's failure to voluntarily provide Plaintiffs with a copy of the manuscript (TR 181:6-18; Tr. 207:18-20; Tr. 211:21-212:3). But Plaintiffs provide no evidence that Mr. Rapoport was under any obligation to produce a prepublication copy of the manuscript for Plaintiffs' review and approval. Thus there is no support for the suggestion that Mr. Rapoport did something wrong by choosing not to request a license or to seek Plaintiffs' approval of the Lexicon. 77. Plaintiffs' evidence demonstrates that before Plaintiffs ever saw the

manuscript, they demanded that Mr. Rapoport halt his plans to publish the book (Tr. 211:11-18). Plaintiffs' evidence suggests that because they did not have pre-publication review of the book, they could not control the quality of the work, and objected to its publication on that basis. B. 78. Plaintiffs' Objections To The Lexicon's Quality Plaintiffs complain that the Lexicon is not a work of scholarship or

research (Tr. 105:305). But the evidence by the defense demonstrated that the Lexicon is not intended to be a scholarly work (Tr. 371:23-5; Tr. 538:4-21). The Lexicon's intended audience is readers and fans of the Harry Potter novels, who are often children. Plaintiffs' expert, Jeri Johnson, admitted that a reference guide might be useful, particularly to children, even if it is not a work of academic scholarship (Tr. 645:6-9). Thus Plaintiffs' criticisms that the Lexicon fails to follow the standards for publishing academic texts, or academic standards for use of quotations, are not relevant. 79. The testimony of Plaintiffs' witnesses demonstrates that Plaintiffs'

objections to the Lexicon concern its quality, and describe why Plaintiffs would not license the Lexicon if they had the choice. While Ms. Rowling claimed that the quality of

25

third-party guidebooks does not matter to the question of whether such books should be allowed (Tr. 655:9-14), her assertion is undercut by her repeated insistence that readers should be protected form "substandard" works (Tr. 54:2-12; Tr. 56:1-18; 106:4-18). Ms. Rowling stated that she demands all licensed works be of the highest quality (EX 25 (Rowling Decl. ¶ 4)); she feels "intensely protective" about the literary world she created (EX 32 (Rowling Supp. Decl. ¶ 14); she cares "very, very deeply" about how her Harry Potter characters are presented and it is her "prime concern" when deciding what works to license (Tr. 48:16-21); and she believes the Lexicon does not measure up to the standards she sets for licensed works (EX 25 (Rowling Decl. ¶ 12). When asked her view of the quality of the Lexicon, Ms. Rowling responded, "I think it's dire. I think it's atrocious." (Tr. 104:17-20). She went on to testify that she does not like the Lexicon and does not believe it is a good book (Tr. 129:9-12). 80. Ms. Murphy, Plaintiffs' expert witness from Scholastic Inc., opined that

the Lexicon was rushed to publication and was of poor quality (Tr. 408:25-409:4; Tr. 411:24; 412:11; EX 22 (Murphy Decl. ¶ 7)), and that she believes the Lexicon's visual layout is boring and pedantic (EX 22 (Murphy Decl. ¶ 7)). 81. Ultimately, Plaintiffs' testimony regarding the Lexicon's quality and

whether they would choose to write it differently has no bearing on whether the Lexicon serves a different purpose than the Harry Potter works. C. 82. Ms. Rowling's Intentions To Create Her Own Encyclopedia Ms. Rowling testified that she intends to write her own A to Z

encyclopedia concerning the Harry Potter works. Although she is in the early stages of writing it and its publication is at least two to three years away, she has stopped working

26

on it recently (Tr. 50:25-51:5; Tr. 53:14-54:25). 83. Ms. Rowling testified that her planned encyclopedia will contain large

quantities of material available exclusively to her. Ms. Rowling has explained that in her encyclopedia, she imagines a layout featuring "facing pages" on which the left-facing pages would have "back story" and "extra details on characters" including for example, "an entry on wands showing what every character's wand was." (EX 504 (Malhotra Decl. ¶¶ 8 ­ 11, Ex. 5.)) The right-facing pages, by contrast, would feature "extra information" such as "discarded plots, characters that didn't make it, [and] problems in the plot." (EX 504 (Malhotra Decl. ¶¶ 8 ­ 11, Ex. 5.)) The testimony of Ms. Murphy confirms this plan (Tr. 430:20 - 431:2). 84. Ms. Rowling's encyclopedia will be drawn from her personal notes, which

she will "turn[] . . . into the definitive encyclopedic Harry Potter companion guide" and augment with additional material of her creation (EX 506; 506a (Hammer Decl. and Plaintiffs' Interrogatory Responses)).

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D. 85.

Evidence Regarding The Effect Of The Lexicon On The Market For Ms. Rowling's Work Ms. Rowling asserts that publication of the Lexicon would harm sales of

the companion guide she intends to write. 86. Suzanne Murphy, Vice President, Publisher, Trade Publishing and

Marketing at Scholastic Inc. (Ms. Rowling's U.S. publisher), opined that publication of the Lexicon would harm sales of the companion guide Ms. Rowling intends to write because there is a distinct advantage in being first to market (Tr. 413:2 - 414:5). Ms. Murphy admitted that her opinion is not supported by any studies, analysis, data, or particular references to other publications (Tr. 431:11 - 432:6). Ms. Murphy also admitted she could not point to any instances in which an encyclopedia's first-to-market advantage was studied. Accordingly, the Court finds Ms. Murphy's opinion to be unsupported. 87. Plaintiffs' evidence demonstrates that there are already at least four books

available on the market that contain an A to Z guide to the Harry Potter works (Tr. 82:287:25; EXs 72, 74, 75, 192). 88. Bruce Harris, a former Publisher at Crown Publishers and President of

Trade Sales and Marketing at Random House, testified that publication of the Lexicon is "extremely unlikely" to affect the sales of any companion guide Ms. Rowling might one day publish (Tr. 442:9-16). Mr. Harris explained that his opinion was based on the way purchasing decisions are made in the major channels of book distribution in this country, including retail stores, wholesalers, libraries and online booksellers (Tr. 442:17-25). 89. Mr. Harris testified that 40 to 50 percent of books are sold at chain stores,

and these stores decide how many books to order based mainly on an author's past sales

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success (Tr. 444:8-22). Given Ms. Rowling's past record of success, he estimated each major chain store would order at least a million copies of the companion guide Ms. Rowling says she plans to write (Tr. 445:7-10). By contrast, he estimated that each chain would order around 1,500 copies of the Lexicon because it was written by Mr. Vander Ark, a first-time author with no track record of success (Tr. 447:9-14). 90. Similarly, Mr. Harris concluded that each major wholesaler would likely

order around 300,000 copies of a companion guide published by Ms. Rowling, versus maybe 500 copies of the Lexicon (Tr. 448:25 - 489:7). Mr. Harris suggested that the disparity would be similar in regard to orders by libraries and online booksellers (Tr. 449:12 - 451:8). Mr. Harris concluded it would be "risky" for RDR to print more than 10,000 copies of the Lexicon (Tr. 452:12-14). 91. While Mr. Harris's testimony is based on initial orders, which could

increase significantly in the event the Lexicon sells well, his testimony demonstrates that the sales of the Lexicon are likely to be insignificant compared to the sales of Ms. Rowling's work, especially since her testimony indicates her companion guide will have new information and new content. Moreover, there is no credible evidence that any particular consumer who would otherwise be inclined to purchase Ms. Rowling's companion guide would forego doing so upon purchasing the Lexicon some years before. 92. Accordingly, the Court concludes that publication of the Lexicon is

unlikely to have any significant effect on the market for Ms. Rowling's companion guide, should she complete and publish it.

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CONCLUSIONS OF LAW Plaintiffs' Copyright Infringement Claims A. Infringement The Copyright Act of 1976 grants copyright owners specific exclusive rights, including the right to "reproduce the copyrighted work in copies" and "to prepare derivative works based upon the copyrighted work." 17 U.S.C. § 106(1)-(2); Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 608 (2d Cir. 2006); Castle Rock Entertainment, Inc. v. Carol Publ. Group, Inc., 150 F.3d 132, 137 (2d Cir. 1998). In order to prove a claim for copyright infringement, a plaintiff must show ownership of a valid copyright, and infringement of one of the exclusive rights granted by the Copyright Act. See id. In order to show the element of infringement, a plaintiff must prove her work was actually copied, and then must show that this copying amounts to "an improper or unlawful appropriation" of her work. Castle Rock, 150 F.3d at 137 (quoting Laureyssens v. Idea Group, Inc., 964 F.2d 131, 139-40 (2d Cir. 1992)). 1. Ownership

Only the "legal or beneficial owner of an exclusive right" has standing to sue for infringement. 17 U.S.C. 501(b); see Eden Toys, Inc. v. Florelee Undergarment Co, Inc., 697 F.2d 27, 32 (2d Cir. 1982) (standing to sue for copyright infringement limited to owner of a copyright, or party that has been granted exclusive license by an owner of a copyright). Beneficial ownership arises where a party that once had legal ownership of the copyright transfers it to another party in exchange for royalties or other consideration. See Cortner v. Israel, 732 F.2d 267, 271 (2d Cir. 1984).

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a.

Harry Potter Novels And Companion Books

Plaintiff Rowling asserts infringement of registered copyrights in the seven Harry Potter Novels1 and two companion books, Quidditch Through The Ages and Fantastic Beasts and Where to Find Them.2 Ms. Rowling has submitted evidence of ownership in the form of registrations from the United States Copyright Office (EX 12-A), and RDR Books does not dispute that Ms. Rowling is, in fact, the owner of these copyrights. Accordingly, Ms. Rowling has satisfied the element of ownership as to the copyrights in these books. b. Daily Prophet Newsletters

Ms. Rowling also asserts infringement of the Daily Prophet, a series of three fictional newsletters she wrote in 1998 that were distributed by her United Kingdom publisher. See Second Amended Complaint ¶ 233; ¶ 8, above. While Ms. Rowling testified she owns the copyrights in these newsletters, she provided no documentary evidence of this fact; nor have the newsletters themselves been received as evidence. Accordingly, Ms. Rowling has not established ownership of the copyrights in these newsletters.4

Harry Potter and the Sorcerer's Stone (1998) (Serial No. TX 4-465-397); Harry Potter and the Chamber of Secrets (1999) (Serial No. TX 4-465-398); Harry Potter and the Prisoner of Azkaban (1999) (Serial No. TX 4-465-399); Harry Potter and the Goblet of Fire (2000) (Serial No. TX 5-122-771); Harry Potter and the Order of the Phoenix (2003) (Serial No. TX-5-705-321); Harry Potter and the Half-Blood Prince (2005) (Serial No. TX-6-179-388); Harry Potter and the Deathly Hallows (2007) (Serial No. TX-6-578-062). See EX 12-A. 2 Quidditch Through the Ages (Serial No. TX-5-374-649) and Fantastic Beasts and Where to Find Them (Serial No. TX-5-374-653). See EX 12-A. 3 Plaintiffs have not filed their second amended complaint. A copy was nevertheless served on defendant and provided to the Court on April 11, 2008. 4 Even if Ms. Rowling had established ownership, she cannot establish infringement of the newsletters because they are not before the Court. 31

1

c.

Harry Potter Video Games And Famous Wizard Cards

Plaintiff Warner Brothers asserts infringement of copyrights in twelve video games, which contain "Famous Wizard Cards," the text of which was allegedly copied here. While Warner Brothers alleges in the Second Amended Complaint that it "owns a joint interest" in these works, it submitted no evidence of such ownership. On the contrary, Warner Brothers expressly alleges that all of these copyrights are registered solely to Electronic Arts Inc., and the registrations from the United States Copyright Office confirm this.5 Although Warner Brothers alleges in its Second Amended Complaint that it has a beneficial interest in these copyrights, it submitted no evidence of any legal or beneficial ownership of the copyrights it asserts. Nor has it introduced any evidence that it is an exclusive licensee of the copyrights registered to Electronic Arts. The only evidence proffered in regard to ownership was the oral testimony of Ms. Rowling, who asserted without explanation that Warner Brothers owns these copyrights. This assertion, however, is contradicted by the registrations themselves. Accordingly, Warner Brothers has failed to establish the element of ownership, and RDR is entitled to judgment in its favor on the infringement claims concerning the Famous Wizard cards. 2. Actual Copying

The parties do not dispute actual copying. Accordingly, Ms. Rowling satisfies this element in regard to the infringement claims she asserts. 3. Improper Or Unlawful Appropriation

Upon showing actual copying, a plaintiff still must show that this copying

5

Registration numbers for the video games are: PA0001062155, PA00160374, PA0001067206, P0001069813, PA 0001217438, PA 0001218122, PA 0001221429, PA0001154042, PA00011255093, PA0001122439, PA0001117142, PA0001117207. 32

amounts to "an improper or unlawful appropriation" of her work. Castle Rock, 150 F.3d at 137 (quoting Laureyssens, 964 F.2d at 139-40); see also Repp v. Webber, 132 F.3d 882, 889 (2d Cir. 1997). In order to show the element of improper or unlawful appropriation, a plaintiff must show the defendant's work bears "substantial similarity to protected expression" in the copyrighted work. See e.g., Castle Rock, 150 F.3d at 137. Copyright protects only an author's original expression. See, e.g., Feist Publications, Inc. v. Rural Telephone Svcs. Co., Inc, 499 U.S. 340, 345 (1991); Nihon Keizai Shimbun, Inc. v. Comline Business Data, Inc., 166 F.3d 65, 70 (2d Cir. 1999). It does not protect facts, ideas or other unprotectable elements of a copyrighted work. See id. The point of substantial similarity analysis is to determine whether the defendant's work copied an actionable amount of protectable expression, or unprotectable elements such as facts. See, e.g., Nihon Keizai, 166 F.3d at 70; Castle Rock, 150 F.3d at 138 (analyzing substantial similarity based on qualitative and quantitative nature of copying). At least one decision in this circuit holds that so-called "fictional facts" are entitled to copyright protection when extracted from the underlying story on the grounds that character attributes, descriptions and the like are the product of an author's creativity and expression. See Castle Rock, 150 F.3d at 139. While fictional facts are indeed the product of an author's imagination, they have a factual dimension nonetheless. It is a fact that James Joyce wrote Ulysses; but he chose the title, so even that fact is the product of Joyce's creativity and expression. That does not, however, stop anyone from reciting this fact. It is likewise a fact that Leopold Bloom begins his walk around Dublin in the fourth chapter of Ulysses. But the copyrights in Joyce's novel cannot stop anyone from saying so, even though this fact is also the product of Joyce's creativity and expression. The

33

very first sentence of Ulysses describes Buck Mulligan as "[s]tately" and "plump" and the first paragraph of chapter four explains that Bloom "liked thick giblet soup" and "nutty gizzards" but "[m]ost of all he liked grilled mutton kidneys." These are also facts, which became true upon publication of Ulysses, and there is no way to accurately recite these facts without using some of Joyce's language.6 At the same time, a novel is a collection of made-up facts presented in a certain order to tell a particular story. If a sufficient number of these facts are identified, reported and arranged in such a way as to tell essentially the same story, we may properly conclude that the reporter of these facts has appropriated the creative expression of the author sufficient to show substantial similarity. See Twin Peaks Prods. v. Publications Int'l, 996 F.2d 1366 (2d Cir. 1992) (holding that summary of television series that recited "[e]very intricate plot twist and element of character development . . . in the same sequence as the teleplays" was substantially similar to copyrighted teleplays); see also Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257 (11th Cir. 2001) (finding substantial similarity where defendant's work used the characters, setting and plot from

Castle Rock's conclusion that fictional facts are protectable is based on the Supreme Court's holding in Feist Publications, 499 U.S. 340. See Castle Rock, 150 F.3d at 138 (quoting Feist). Feist held that telephone numbers were facts, and the selection and arrangement of telephone numbers in an A to Z listing was not sufficiently original to provide copyright protection. Feist, 499 U.S. at 362. In differentiating unprotectable facts from protectable expression, Feist suggested that facts are discovered, while expression is created. See Feist, 499 U.S. at 347. Based on this distinction, Castle Rock concluded that fictional facts are protectable because they owe their origin to an act of authorship. Castle Rock, 150 F.3d at 138-39. Yet this distinction may seem problematic in respect to many facts. Again, it's a fact that Joyce wrote a novel set in Dublin and called it Ulysses. These facts also "owe their origin to an act of authorship" (Castle Rock, 150 F.3d at 138) yet no one suggests the Joyce Estate holds a copyright over this information. Ultimately, this distinction between "discovered" and "created" facts need not be resolved here. The question before the Court is not whether fictional facts are protectable, but the extent of protection. 34

6

Gone With The Wind as a "palette for [a] new story"); Paramount Pictures Corp. v. Carol Publishing Group, 11 F. Supp. 2d 329, 335 (S.D.N.Y. 1998) (finding substantial similarity where defendant's work "simply retells the story of Star Trek" in a condensed version). But it does not follow that every discussion or collection of fictional facts is an improper or unlawful appropriation of the author's expression. See Castle Rock, 150 F.3d at 143 n. 9 (recognizing that a work may not be substantially similar if it transforms the expression of the copyrighted work by using it for a sufficiently different purpose); cf. Well-Made Toy Mfg. Corp. v. Goffa Int'l Corp., 354 F.3d 112 (2d Cir. 2003) (works may not be substantially similar even where one is "based upon" the other). Here, the Lexicon reports thousands of fictional facts from the Harry Potter works. It reports, for instance, that Rubeus Hagrid "lives in a hut on the Hogwarts grounds with his pet boarhound, Fang" and that he was expelled from Hogwarts at the end of his third year, while directing the reader to the specific books and chapters in which this information appears. See EX 1. It reports that Moaning Myrtle offered "to share her toilet with [Harry Potter] if he died" and that this happened in chapter 17 of Harry Potter and the Chamber of Secrets. See id. It explains that Polyjuice Potion is a "muddy brown potion (HBP9) described as `complicated' (CS10)" even though "Hermione managed to brew it during her second year (CS12)" ­ again noting the books and chapters in which this information can be found. See id..7 These facts and many more are arranged in an A to Z listing consisting of roughly

Steven Vander Ark explained that the Lexicon cites to chapters because pagination varies in different editions of the book, whereas chapters remain constant. See ¶ 45, above. While plaintiff's expert Jeri Johnson suggested page numbers could still be used in the form of parallel citations, the fact remains that the Lexicon points the reader to specific places where information can be found. 35

7

2,400 entries. The order in which fictional facts are presented in the Lexicon bears almost no resemblance to the order in which the fictional facts are arranged to create the story of Harry Potter and the universe he inhabits. In other words, the fictional facts used by the Lexicon are arranged to report information and where to find it, rather than to tell the same story told by the Harry Potter works in similar fashion. It is presumably for this reason that Ms. Rowling herself acknowledged that no one would read the Lexicon for entertainment. See ¶ 55, above. In Castle Rock, fictional facts were also extracted from the copyrighted works and rearranged. They were not, however, presented in an organized manner, or in a way that helps readers locate information in the underlying works. See Castle Rock, 150 F.3d at 143. They were simply jumbled up to create a trivia game. See id. Accordingly, they were used primarily in their fictional capacity to entertain and "satisfy" the reader's "craving" for the Seinfeld television series. See id. at 142-43. Here, the fictional facts reported by the Lexicon are being used to report information and where to find it. The Lexicon collects information about the characters, places and things that appear in the imaginary universe of Harry Potter, organizes it into an A to Z listing, and specifies, through thousands of citations, where specific information can be found in the published books. Thus, unlike the trivia book at issue in Castle Rock, the Lexicon uses fictional facts primarily in their factual capacity. In this respect, the qualitative similarity between the Lexicon and the Harry Potter works is significantly diminished. While a large amount of information from the Harry Potter Works is included in the Lexicon, much is also left out, as evidenced by the length of the Lexicon (450 pages) compared to the combined length of the Harry Potter novels (thousands of pages). By

36

necessity, the Lexicon not only organizes fictional facts, it distills a large volume of information into a much shorter summary form. See Nihon Keizai, 166 F.3d at 71 (one paragraph abstract copying approximately 20 percent of a six paragraph article is not substantially similar on a quantitative level). It is unclear from the record how much of the Lexicon is made up of direct quotes from the Harry Potter works. See ¶¶ 52-53, above. Even assuming a significant amount of quotation, the accurate reporting of attributes, characteristics and events will often require linguistic overlap. See ¶ 49, above. Accordingly, the quantitative similarity between the Lexicon and the Harry Potter Works, while significant, is likewise diminished. The substantial similarity inquiry "must be made on a case-by-case basis, as there are no bright line rules for what constitutes substantial similarity." Sandoval v. New Line Cinema Corp., 147 F.3d 215, 217 (2d Cir. 1998); Nihon Keizai, 166 F.3d at 71 (there are no "simple, right-line rules" for substantial similarity). While the fictional universe of Harry Potter is the product of Ms. Rowling's creativity and expression, it appears in books that have been published, printed, sold and consumed by millions of readers. In these books, specific things happen to specific characters in specific chapters of the books; the fact these things occur in specific chapters are facts that are true in the world. While the Lexicon makes extensive use of the fictional f