White et al v. West Publishing Corporation et al

Filing 77

TRANSCRIPT of Proceedings re: ARGUMENT held on 11/20/2012 before Judge Jed S. Rakoff. Court Reporter/Transcriber: Eve Giniger, [phone]. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 12/26/2012. Redacted Transcript Deadline set for 1/7/2013. Release of Transcript Restriction set for 3/4/2013.(Rodriguez, Somari)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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EDWARD L. WHITE, et al.,

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Plaintiffs,
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v.

12 Cv. 1340 (JSR)

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WEST PUBLISHING CORPORATION,
et al.,
Defendants.
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November 20, 2012
10:55 a.m.

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Before:
HON. JED S. RAKOFF

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District Judge
APPEARANCES
GREGORY A. BLUE
Attorney for Plaintiffs

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BRAGAR EAGEL & SQUIRE, P.C.
Attorneys for Plaintiffs
BY: RAYMOND A. BRAGAR

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WEIL, GOTSHAL & MANGES LLP
Attorneys for Defendant West Publishing Corp.
BY: BENJAMIN E. MARKS
JONATHAN BLOOM
R. BRUCE RICH

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MORRISON & FOERSTER LLP
Attorneys for Defendant LexisNexis
BY: JAMES E. HOUGH
PAUL GOLDSTEIN
CINDY P. ABRAMSON

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SOUTHERN DISTRICT REPORTERS, P.C.
[phone]

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(Case called)

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THE DEPUTY CLERK:

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themselves for the record.

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MR. BLUE:

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MR. BRAGAR:

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Will the parties please identify

Greg Blue for the plaintiff.
Raymond Bragar, Bragar Eagel & Squire,

also for the plaintiff.
MR. MARKS:

Benjamin Marks, Weil, Gotshal & Manges,

for defendant West Publishing Corporation.
MR. BLOOM:

Jonathan Bloom, Weil, Gotshal & Manges,

also for West Publishing Corporation.
MR. RICH:

Bruce Rich, Weil, Gotshal, also for West

Publishing Corporation.
MR. HOUGH:

James Hough, Morrison & Foerster, for Reed

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Elsevier, herein as LexisNexis.

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MR. GOLDSTEIN:

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Paul Goldstein, Morrison & Foerster,

also for LexisNexis.
MS. ABRAMSON:

Cindy Abramson, Morrison & Foerster,

also for LexisNexis.

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THE COURT:

Good morning.

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I need to apprise you of the Court's policy with

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respect to oral argument.

I have read your briefs.

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all presented many interesting issues.

I do not need anyone to

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repeat anything that's in their brief.

Indeed, I would, with

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apologies, consider it kind of an insult if you repeated

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anything that's in your brief because that would indicate that
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]

You have

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you didn't think I read your brief.
So the purpose of oral argument is really simply to

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respond to arguments you didn't have the chance to respond to,

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because in summary judgment there is always one party that has

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the last reply papers or something that you just think got lost

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in the shuffle, so to speak, that you feel ought to be brought

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to the Court's attention.

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So I think since they are cross-motions, it doesn't
much matter who starts, but let's start with the plaintiff.
MR. BLUE:

THE COURT:

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MR. BLUE:

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Am I fine from here

or would you like me to take the podium?

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Thank you, your Honor.

Whichever you prefer.
Your Honor, thank you for saying we don't

need to repeat anything.
I think we briefed the fair use factors extensively.

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The one thing here, if we step back from the four factors, is I

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think the commerciality gets lost a little bit because it was

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conceded so quickly by the defendants.

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gets lost is in the cases, you don't find any instances where a

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defendant is taking the work itself and simply selling it for a

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profit and you find fair use.

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are not selling it, like Judge Baer's recent HathiTrust case,

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making works available to visually impaired, or you find cases

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where they have made some dramatic change to the work itself.

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The reason I think it

Either you find cases where they

Here what we have got is they are taking the entirety
SOUTHERN DISTRICT REPORTERS, P.C.
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of work that's covered by the copyright act and simply selling

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it.

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business is acquiring content and selling content.

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found this one little vein of very valuable legal content that

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they believe that they can tap for free and turn around and

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sell it.

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cases that suggest that it should be.

In fact, that's their whole business.

Their whole
And they

We submit that that is not fair use and there are no

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THE COURT:

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Let me hear from the defense.

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MR. MARKS:

All right.

Very good.

Benjamin Marks for West Publishing, your

Honor.

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Let me just respond first to the point about

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commercial use because I don't agree it's been lost in the

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shuffle.

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tell us is that where you have a different purpose, as West has

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here, where they are using the words for a different purpose to

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a different audience, the commercial value or the fact that

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there is commercial intent and that the defendant is operating

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a commercial business is relatively unimportant to the overall

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balancing of the fair use factors.

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It's been briefed extensively.

And what the cases

The plaintiffs' argument mischaracterizes what it is

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that West and Lexis do.

It's not a business predicated on

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selling one-offs of the plaintiffs' briefs.

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defendants do is sell integrated research databases.

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why people subscribe to them.

What the
That's

That's the service that's being

SOUTHERN DISTRICT REPORTERS, P.C.
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offered.

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creating the searchable database.

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it's simply we are usurping an existing market or even a

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potential market for the plaintiff by providing access to his

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brief.

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Where the copying takes place is in connection with
And so it's not a case where

We disagree with the premise he has laid out about

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what it is that we are doing.

We don't think the record

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reflects it remotely.

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comfortably within the framework of numerous cases where there

And we think that our conduct is

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has been a commercial purpose by the defendant, where the

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defendant has a business.

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10 and the Kelly case, or any number of others, where the

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defendant has anticipated profits, Bill Graham, the Blanch

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case, nonetheless, courts have recognized that the copying

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falls comfortably within fair use.

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THE COURT:

Whether it's cases like the Perfect

On the issue of the various factors under

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fair use, are you both in agreement that there is no material

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fact in dispute so that the Court has undisputed facts on which

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it could determine the fair use issue?

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MR. MARKS:

I believe that the parties are in

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agreement that there are no material facts in dispute.

I will

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note that there is some argumentation from the plaintiffs' side

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without any evidentiary support whatsoever.

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the purpose for which West and Lexis offer their databases is

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just attorney argumentation; it's not based on any fact in the

Their claims about

SOUTHERN DISTRICT REPORTERS, P.C.
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record.

But we certainly agree that there are no disputed

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evidentiary issues.

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THE COURT:

I should have put that same question to

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your adversary before he sat down.

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I will come back to you.

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MR. BLUE:

So let me put it to him and

Yes, your Honor.

We agree that the Court

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should decide this because there are no material facts in

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dispute.

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THE COURT:

OK.

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MR. HOUGH:

Just to round it out, for LexisNexis, we

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also agree that as to the fair use factors, there are no

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material facts that are in dispute.

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THE COURT:

Back to counsel.

Yes.

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MR. MARKS:

So let me just, consistent with your

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Honor's instruction at the outset, highlight a few points to

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respond to arguments that appeared in the reply briefing.

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The first is that the plaintiff has made issue out of

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the conduct of West's subscribers and Lexis subscribers and

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what they may or may not do with the briefs.

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whatever they do with the briefs, that's not our case.

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is no claim for contributory infringement.

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direct infringement case.

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mind or what they may want to do is simply off point.

I note initially,
There

This was pled as a

So what our subscribers may have in

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I would also note there is no evidence in the record

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to suggest that what plaintiff has described as this practice
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of cutting and pasting briefs and submitting briefs from one

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attorney that they find on West or Lexis in another case, there

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is no evidence that that happened.

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evidence that it ever happened with plaintiffs' briefs.

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there is no evidence that, even if it happened with the

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plaintiffs' briefs, the way that some hypothesized third party

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infringer would have gotten the briefs is either through West

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or through Lexis.

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hypothesized injury is not rooted in the record and not our

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case since they didn't plead that type of claim or injury.

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There is certainly no
And

So I did want to make clear that that

I also wanted to expand briefly on the issue of the

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public availability of the briefs through the PACER system, and

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the federal policy of making briefs available, because I think

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there may have been some talking past each other in the

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briefing.

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publicly available on PACER, or that any copyrighted work has

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been made available to the public in some form or another, is

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enough by itself standing alone to make it clear that it's a

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fair use.

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for at least three reasons.

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We don't contend that the fact that the briefs are

But the public availability is highly relevant here

First of all, it's the public benefit.

It's part of

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the federal policy to have widespread access to knowledge about

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the workings of the court system and arguments that were made

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and not made.

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Secondly, on factor two, the fact that the briefs are
SOUTHERN DISTRICT REPORTERS, P.C.
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publicly available is highly relevant to the Court's

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consideration of factor two because it makes plain that our

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copying does not interfere at all with the defendants' right to

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make the works available to the public for the first time.

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don't interfere with that.

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publicly available, and they don't interfere with any privacy

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interests.

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have found that factor two favors a plaintiff.

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apply here.

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We

They have already been made

Those are the circumstances under which some courts
Those don't

The third point I wanted to mention on the public

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availability is obviously it has a huge impact on factor four

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and the consideration of market harm.

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interference with any possible transaction in which the

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plaintiff would take part.

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If we disappeared and somebody wanted to access his briefs,

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they would go to PACER.

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There is simply no

It has no effect on his incentives.

They wouldn't go to him.

So I did just want to elaborate a little bit more on
the public availability.

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THE COURT:

Anything from counsel for codefendant?

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MR. HOUGH:

Nothing further on the fair use factors.

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We did decide to divide up responsibility a bit so that I would

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focus on the implied license point if your Honor had any

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questions.

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THE COURT:

Let me hear from plaintiffs' counsel on

anything further on fair use that he wants to say and then we
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]

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will turn to other issues.

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MR. BLUE:

Your Honor, on the market harm issue on the

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fair use, there is a bit made in the papers about the fact that

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the plaintiffs are going to write these briefs anyway because

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they have an obligation to the client to right as good a brief

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as possible.

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questions were:

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good a job even if you would never get paid from a license,

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isn't that true?

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And that's certainly true.

The deposition

You would write this and you would do just as

And he said yes.

Of course he said yes.

But

that doesn't mean that they have a right to copy and sell.

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The analogy I can come up with here is movie posters.

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There are Casablanca movie posters and It's a Wonderful Life

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movie posters hanging on the walls of living rooms and dining

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rooms all over the country now.

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out, if you asked the advertising agencies, did you create this

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movie poster so that you could sell them for decades from now?,

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they would say, no, I created these movie posters to sell movie

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tickets.

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good and tried to sell movie tickets if you knew there would

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never be a license?

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At the time those movies came

Well, would you have made that movie poster just as

Of course I would do that job.

Well, it turned out that years later there was a

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market for these.

It doesn't mean that people can copy them

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and sell them with impunity just because at the outset the

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person who created it never imagined there would be a market

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for it and because they would have done just as good of a job
SOUTHERN DISTRICT REPORTERS, P.C.
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if there was no licensing market.

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argument fails.

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So I think that that

Yes, we are in this profession for lots of reasons,

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one of which is because we get paid for what we do.

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great job for our clients.

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our clients whether there is a licensing fee or not.

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We do a

doesn't vitiate rights under the copyright act.

We are going to do a great job for
But that

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MR. MARKS:

May I respond to that?

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THE COURT:

Sure.

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MR. MARKS:

Under factor four, the market has to be

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reasonable, traditional or likely to be developed, and his case

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fails on all three counts.

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licensing of briefs.

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filed for hundreds of years.

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protects them has existed for generations.

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started their databases of these types of materials seven years

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ago.

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a market for this type of licensing.

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license it.

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There is simply no market for the

There never has been.

Briefs have been

Whatever copyright theory
West and Lexis

There is just simply no evidence that there would ever be
He has never tried to

Nobody has ever tried to license it from him.

There is unrebutted testimony in the record that there

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would not be a licensing market even from the defendants.

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even if the Court were to accept, which we don't think it

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should, the circularity of the argument that because we have

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used his materials, we would therefore pay for it, even if that

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logic weren't totally circular, the unrebutted testimony in the
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]

So

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record from Mr. Leighton from West, from Ms. Beauchamp from

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Lexis, from the expert economist David Blackburn representing

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the defendants, is that this market would not exist, nobody

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would pay the licensing fees.

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So with factor four, you have to look to a reasonable,

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traditional or likely to be developed market.

Not, well, would

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somebody sometime make some use and therefore I should get

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paid?

That's just not the test.

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THE COURT:

What is the market that you're seeking to

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reach with these materials?

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MR. MARKS:

What Westlaw offers is an integrated

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research product.

We have subscribers to our product that uses

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it for legal research.

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arguments have been made in past cases, to understand facts

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that may not be clear from an opinion, to improve the quality

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of their advocacy.

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following cases or want to learn about the law or gain

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experience.

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court records and often a more convenient means of accessing

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court records.

It's used by lawyers to understand what

It's used by students and academics who are

It's used by courts as another means to access

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THE COURT:

And they all pay for that, right?

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MR. MARKS:

They pay subscription fees to the

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database, that's correct.
THE COURT:

Maybe I am missing why you think there

wouldn't be a license agreement potentially.

I understand what

SOUTHERN DISTRICT REPORTERS, P.C.
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you're saying about actual.

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MR. MARKS:

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You mean a licensing market whereby West

or Lexis would pay attorneys for the right to include it?

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The reason that there is not a likely market for that

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is that the transaction costs of offering that kind of product

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are insurmountable.

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from West and from Lexis is that they have no interest in that.

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They wouldn't pay for it.

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they had to do it.

The unrebutted testimony from witnesses

The product wouldn't be viable if

You would have the transaction cost of

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figuring out who the proper copyright owner is.

Even on this

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record, it's clear that that's not an easy thing to do.

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many cases, you would have the enormous transaction costs of

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getting the licensing in place, and it's simply not a product

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that they have an interest in doing.

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removed Mr. White's briefs because they are not interested.

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When he objected, they took them out.

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important, and if there had to be a licensing regime, the

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product simply would be unlikely to exist.

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unrebutted testimony of fact witnesses from West and Lexis and

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that's the unrebutted testimony of Dr. Blackburn.

In

Both West and Lexis

No one work is that

Again, that's the

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THE COURT:

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Now, you wanted to say something about implied

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license?

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All right.

MR. HOUGH:
issue.

I have been assigned to focus on that

I am not sure that I have anything to say that would
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meet your Honor's rules for oral argument.

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I think we have

covered it very well in the briefs.

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THE COURT:

That's why I like my rule.

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MR. HOUGH:

Our position is based on the proposition

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that objective conduct, knowledge and silence and acquiescence

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can give rise to an implied license, and we cited the cases in

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the briefs where courts have said that.

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discuss that if your Honor has any questions about it.

I will be happy to

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THE COURT:

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one question for plaintiff.

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infringement.

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facts in issue as to the adequacy of your copyright because of

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the presence of another person and the creation or whatever?

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I am going to pass on that, but I did have
This goes to the question of

Do you agree or disagree that there are material

MR. BLUE:

I think that's, respectfully to the

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defendants, ridiculous.

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acting of counsel to the law firm and his deposition testimony

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very clearly said he created this work for the plaintiff law

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firm Edward L. White, P.C., and that all of the profit,

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intellectual property, work product, whatever it is, is owned

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by the law firm.

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The testimony was that Mr. High was

I think it's not an issue.

Even if it somehow were theoretically an issue, I

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suppose it could be solved in three minutes by a written

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assignment of any copyright he has got to the law firm if we

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had to do that.

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who owns it.

But there is no dispute between those folks

This is a dispute that's cooked up by the
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defendants.
MR. MARKS:

Let me just respond to that.

The work for

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hire rules in the copyright act are clear.

Both Mr. High and

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Mr. White testified Mr. High is not an employee.

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create the drafts of the briefs in any capacity as an employee.

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And there is no written assignment.

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qualify as a work for hire that would automatically confer

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ownership on Edward L. White, P.C.

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assignment in the record.

He didn't

It just simply doesn't

And there is no written

On these facts, there are certainly

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issues about the ownership of the copyright, and it's not

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enough that they may have intended for Mr. White to own it.

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The rules are what the rules are, and without a written

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assignment and without being from an employee, Edward L. White,

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P.C. does not own those copyrights.

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THE COURT:

Well, he testified, the other fellow, that

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everything belonged to them.

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be easily rectifiable, yes?

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MR. MARKS:

So it does sound like this would

It may be rectifiable if there were an

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assignment.

There hasn't been an assignment.

The record as it

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stands now, there is not clear title to the ownership.

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not entitled to the presumption of validity of the copyright

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registration because there are material mistakes in the

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registration form, material inaccuracies.

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it could be fixed in some manner, that's not the facts that we

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have before us now.

He is

And whether or not

What we have before us now are that there

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were drafts prepared by somebody who wasn't an employee and no

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written assignment of the copyright.

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material questions about the validity and the ownership of the

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copyright.

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THE COURT:

So there is certainly

Is the only one that is material that one?

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There were some others you referred to.

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about whether it really was published, things like that.

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MR. MARKS:

There was a question

The issue of whether or not the work was

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published, and I think that West and plaintiffs agree that the

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work has not been published, those go to remedies, not to the

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prima facie case of whether or not there is copyright

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infringement.

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THE COURT:

So let's assume for the sake of argument

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that tomorrow he gets an assignment from Mr. High and the Court

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were to permit that to be presented to the Court, does that

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solve your problem or are you saying there is still a problem?

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MR. MARKS:

If he can prove at trial that he has valid

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ownership of the copyright, then he can establish that at

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trial.

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THE COURT:

I am just wondering whether as to this

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element on summary judgment I have to have a trial, assuming

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that were in the end to be dispositive for some reason.

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sounds like that would be a dumb thing to have a trial just for

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that reason.

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MR. MARKS:

We are not suggesting that it's an

SOUTHERN DISTRICT REPORTERS, P.C.
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It

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incurable defect, if he is in fact able to cure the defect and

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the presentation of ownership.

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record he hasn't established ownership.

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it's an incurable problem, but we are now getting into a

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situation where we are hypothesizing that he will get an

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assignment that he may or may not get.

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THE COURT:

Our position is simply on this
I am not suggesting

So let me go back to the plaintiff.

Can

you get that assignment?
MR. BLUE:

I can represent to you that Mr. High has

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told me that he would execute an assignment, and depending on

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his availability, I could have it before Thanksgiving.

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THE COURT:

I will give you a week to get it and to

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submit it without further argument just so that it is part of

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the record in this case.

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MR. BLUE:

Thank you, your Honor.

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THE COURT:

Anything else any counsel wants to raise?

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All right.

So I very much appreciate your being here.

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I know you had to wait a while.

I will take the matter under

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advisement.

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think I can get you a decision by the end of January.

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think I can do it before then.

There are many interesting issues here, but I

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Very good.

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Thanks very much.

(Adjourned)

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SOUTHERN DISTRICT REPORTERS, P.C.
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I don't