Archie MD, Inc. v. Elsevier, Inc.
OPINION. The Court concludes that, while the '274 Registration contained inaccurate information in that it described as unpublished a work that had already been published by virtue of its licensing and delivery to Elsevier, such inaccurate infor mation was not included with knowledge that it was inaccurate, and therefore, under 17 U.S.C. § 411(b) (1), that registration may serve as a prerequisite for Archie's remaining copyright claim. The Court therefore denies Elsevier's mot ion for summary judgment as to that claim, and it directs the parties to convene a joint telephone call to Chambers no later than August 25, 2017, to discuss the scheduling of a trial on the remaining claim. SO ORDERED. (Signed by Judge Jed S. Rakoff on 8/20/17) (yv)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ARCHIE MD, INC.,
OPINION AND ORDER
JED S. RAKOFF, U.S.D.J.
Plaintiff Archie MD,
("Archie") brings this action against
("Elsevier") alleging infringement of its
copyright in hundreds of 3-D medical animations that it had
previously licensed to Elsevier, breach of the parties'
agreement, and misappropriation of its trade secrets. On the
cross motions for summary judgment, the Court granted
summary judgment to Elsevier on all of Archie's claims save for its
claim arising out of Elsevier's alleged derivative use of one of
Archie's animations. See Opinion and Order
(Mar. 13, 2017)
Opinion") at 35, ECF No. 78. Having referred a question bearing on
the validity of Archie's copyright registration for that animation
to the Register of Copyrights pursuant to Section 4ll(b) (2)
Copyright Act, and having received a response that did not
definitively resolve the validity of the registration, the Court now
once again considers Elsevier's motion for summary judgment with
regard to Archie's remaining claim, and,
for the reasons explained
below, denies the motion and instructs the parties to contact the
Court in order to schedule a trial on the remaining claim.
The Court detailed the factual and procedural background of
this case in the SJ Opinion.
In brief, Archie was founded in 2002
and began to build a library of 3-D animations meant to convey
medical principles. Pl.'s Statement of Undisputed Material Facts
Pursuant to Local Rule 56.1
("Pl.'s Rule 56.1 Stmt.")
38; Def. Elsevier's Local Rule 56.1 Statement of Material Facts
Not in Dispute
("Def.'s Rule 56.1 Stmt.")
1, ECF No.
and 2004, Archie sought clients to license the entire library.
Def.'s Rule 56.1 Stmt.
of Def. Elsevier,
19-20; Deel. of David Munkittrick in Supp.
10 at 26-27, ECF No.
33. To that end, on July 29, 2005, Archie and
Elsevier executed the Animation License Agreement
which Archie granted Elsevier a license to use its library of 3-0
medical animations in connection with Elsevier's publications. Pl.'s
Rule 56.1 Stmt.
15-16; Def.'s Rule 56.1 Stmt.
17, 35. Cell
Differentiation was among the animations licensed in the ALA.
Munkittrick Deel. Ex. 17.
In the ALA, Archie agreed to make the animations available to
Elsevier online within five days of the execution of the ALA. Def.'s
Rule 56.1 Stmt.
42. On August 15, 2005,
roughly two weeks after
All citations to the parties' Local Rule 56.1 Statements, which
were submitted with the parties' summary judgment papers, are
undisputed in relevant part, unless otherwise noted.
the parties had executed the ALA, Archie submitted its first
copyright registration for its animations.
94. Archie filed
with the Copyright Office a single registration for a collection of
unpublished works, which consisted of the animations that Archie had
already licensed and delivered to Elsevier pursuant to the ALA.
(Accordingly, the parties do not dispute that Archie licensed
and delivered the animations to Elsevier before it sought to
register the animations.)
The Copyright Office registered the
collection with an effective date of registration of August 15,
2005, and assigned the collection registration number PAu 2-985-274
(the "' 274 Registration").
See Resp. of the Register of Copyrights
Pursuant to 17 U.S.C. § 4ll(b) (2)
2, ECF No.
(June 16, 2017)
In June 2014, Elsevier notified Archie that it intended not to
renew the ALA, and the final term of the agreement concluded as of
July 1, 2015. Pl.'s Rule 56.1 Stmt.
49; Def.'s Rule 56.l Stmt.
77. Thereafter, Archie alleged that Elsevier both continued to
use hundreds of Archie's animations without authorization and
created unauthorized derivative works based on Archie's animations,
and it brought this action alleging,
Upon the parties' cross motions for summary judgment, the Court
granted summary judgment to defendant Elsevier on almost all of
Archie's copyright claims, on the grounds that,
so far as
authorization was concerned, Elsevier's continued use of Archie's
animations was permitted by the terms of the parties'
agreement and that,
so far as copyright infringement was concerned,
all but two of Elsevier's new animations that were allegedly derived
from Archie's animations were not, as matter of law,
similar to Archie's animations. See SJ Opinion at 18, 24. However,
the Court concluded that a reasonable factfinder might consider two
of Elsevier's new animations to be substantially similar to an
Archie animation entitled "Cell Differentiation"
The Court therefore addressed Elsevier's contention that
Archie's infringement claim must be dismissed because Archie did not
possess a valid copyright registration covering the Work.
Specifically, Elsevier argued that the '274 Registration contained
an inaccuracy because the animations registered thereunder were
already published at the time Archie licensed them to Elsevier. The
Copyright Act contains a mandatory referral provision specifying
that "[i]n any case in which inaccurate information [included on a
certificate of registration]
is alleged, the court shall request the
Register of Copyrights to advise the court whether the inaccurate
information, if known, would have caused the Register of Copyrights
to refuse registration." 17 U.S.C.
411(b) (2). Accordingly, the
Court referred to the Register the question of "whether the fact
that Archie had previously licensed its animations to Elsevier
before applying to register them in a collection of unpublished
works would have caused the Register to refuse registration of the
collection including Archie's animation entitled Cellular
Differentiation." SJ Opinion at 30.
On June 16, 2017, the Register provided her response. The
Register noted that,
"[i]n general, had the
[Copyright] Office been
aware that the Work had been published prior to registration, the
Office would have refused registration because the unpublished
collections option is limited to unpublished works." Register's
she stated that there remained questions as to
whether the licensing of the animations effected a publication of
Id. After reviewing this advice, the Court,
in order to
resolve the disputed issues and rule on Elsevier's motion for
summary judgment as to Archie's remaining claim, ordered
supplemental briefing from the parties.
Before turning to the parties' arguments, the Court first
reviews the applicable legal standards. Under Rule 56(a) of the
Federal Rules of Civil Procedure,
summary judgment is appropriate
when the "movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of
law." Fed. R. Civ.
P. 56(a). The movant bears the burden of
demonstrating the absence of a genuine dispute of fact,
v. Liberty Lobby,
477 U.S. 242,
summary judgment, the court must be able to find "after drawing all
reasonable inferences in favor of a non-movant" that "no reasonable
trier of fact could find in favor of that party," Heublein,
996 F.2d 1455, 1461
(2d Cir. 1993). A fact is
considered material "if it might affect the outcome of the suit
under the governing law," and a dispute of fact is deemed "genuine"
where "the evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Holtz v. Rockefeller & Co.,
(2d Cir. 2001)
(internal quotation marks and citations
For Archie to prevail on its claim for copyright infringement,
it must demonstrate "(1) ownership of a valid copyright, and (2)
copying of constituent elements of the work that are original."
Inc., v. Rural Tel. Serv. Co.,
(1991). "[P]roper registration is a prerequisite to an action for
Inc. v. Rubie's Costume Co.,
(2d Cir. 1989); see also 17 U.S.C.
that, with some exceptions, "no civil action for infringement of the
copyright in any United States work shall be instituted until
preregistration or registration of the copyright claim has been made
in accordance with this title").
The Prioritizing Resources and Organization for Intellectual
Property Act of 2008
(the "PRO IP Act"), which amended the Copyright
Act, provides that:
A certificate of registration satisfies the requirements of
[section 411] and section 412, regardless of whether the
certificate contains any inaccurate information, unless ~
(A) the inaccurate information was included on the application
for copyright registration with knowledge that it was
(B) the inaccuracy of the information, if known, would have
caused the Register of Copyrights to refuse registration.
17 U.S.C. § 4ll(b) (1). The condition listed in clause
is not in
dispute here because, as noted above, the Register has already
advised the Court that the Copyright Office would have refused
registration of the Work as part of an unpublished collection had
the Office known that the Work was published. See U.S. Copyright
Office, Compendium of U.S. Copyright Office Practices§ 904(5)
("Where the applicant seeks
registration as an unpublished work and provides the Office with a
statement of facts which clearly show that publication has occurred,
the Off ice will not register a claim to copyright in the work as
Therefore, two issues remain in dispute.
First, the parties
dispute whether Archie indeed included inaccurate information in its
copyright registration, which turns on whether Archie had published
the Work by licensing it to Elsevier. Second, the parties dispute
whether, if the registration included inaccurate information, Archie
included the information "with knowledge that it was inaccurate," 17
U.S.C. § 411 (b) (1) (A), and,
if Archie did not, whether the
materiality of the inaccuracy nonetheless means that such knowledge
is unnecessary to invalidate a registration under § 411 (b) (1).
As to the first of the questions, whether the Work had been
published, the Copyright Act defines publication as follows:
"Publication" is the distribution of copies or phonorecords of
a work to the public by sale or other transfer of ownership, or
by rental, lease, or lending. The offering to distribute copies
or phonorecords to a group of persons for purposes of further
distribution, public performance, or public display,
constitutes publication. A public performance or display of a
work does not of itself constitute publication.
17 U.S.C. § 101. Elsevier, equating licensing with "rental, lease or
lending," contends that Archie's licensing of the Work pursuant to
the ALA amounts to publication under the "distribution" prong. See
Inc.'s Suppl. Br. Regarding Validity of Archie's
McLaren v. Chico's FAS,
4615772, at *2
("Def. Suppl. Br.")
5, ECF No.
10 Civ. 2481
(S.D.N.Y. 2010) ("By licensing the mannequin
illustration to Pucci so that Pucci could produce and sell
mannequins based on that drawing, McLaren 'published' the drawing
within the meaning of the Copyright Act.")).
Archie, by contrast, contends that licensing the Work does not
amount to a distribution "by sale or other transfer of ownership,
101. 2 That is because, Archie
argues, those forms of transfers convey an "exclusive, possessory
In its supplemental brief, Archie first argues that Elsevier, as "a
single corporate entity," is not "the public," and that Elsevier has
conceded as much. See Pl. Archie MD, Inc.'s Suppl. Br. on Copyright
Registration Validity ("Pl. Suppl. Br.") 6, ECF No. 81. While
Elsevier did not argue, in its initial papers in support of its
motion for summary judgment, that the Work was published under the
"distribution" prong, neither did Elsevier concede that the Work was
not. Nor is Archie correct that a single entity cannot be "the
public" for the purposes of the "distribution" prong. See Compendium
§ 1905.1 ("[P]ublication occurs when one or more copies or
phonorecords are distributed to a member of the public who is not
subject to any express or implied restrictions concerning the
disclosure of the content of that work." (emphasis added)). Archie
essentially abandons this argument in its reply brief.
interest in copies of the work," whereas the ALA's conferral of a
license provided Elsevier only a "non-exclusive right to use" the
Pl. Archie MD,
Inc.'s Resp. to Def. Elsevier,
Br. Regarding Archie MD's Copyright Registration
2, ECF No.
("Pl. Reply Br.")
83. However, the authority Archie cites in support of
this position comes from the context of real property law, which is
not directly applicable to the transfer of intellectual property
such as copyrighted works. See id. Archie's focus on an "exclusive"
possessory interest is thus misplaced, since whether Elsevier alone
had a right to reproduce and sell copies of the Work or whether
others did as well is immaterial to whether copies of the Work were
in fact distributed.
See Getaped.com Inc. v. Cangemi, 188 F. Supp.
(noting that the key factor bearing on
whether a work is published through its being posted online is the
ability of a user to "gain a proprietary or possessory interest" in
the work, but never suggesting that that interest need be
Neither the statutory definition of "publication," nor the
guidance in the Compendium, nor the case law cited by the parties
Archie's argument might be reframed in different terms: what Archie
appears to contend is that it did not distribute to Elsevier a copy
of the Work in which Elsevier had a possessory interest, but rather
simply provided Elsevier the right to make copies of the Work. While
the distribution of copies of a work constitutes a publication,
assigning the rights to a work may not. See 1 Nimmer § 4.03 n.54
("[I]t is clear that an assignment per se does not constitute
publication."). Even within this framework, however, the Court
concludes that Archie did distribute a copy, as explained infra.
speaks precisely to the circumstances this case presents. The Court,
concludes that Archie's licensing and delivery of the Work
to Elsevier pursuant to the ALA satisfies the "distribution" prong.
The transfer of a digital copy of a work may amount to distribution
and therefore publication. See id. at 402
(concluding that the
display of a website online amounts to publication because doing so
allows a user to view and copy the code used to create it, and,
"[c]onsequently, when a website goes live, the creator loses the
ability to control either duplication or further distribution of his
or her work."). Here, Archie provided Elsevier with a copy of Work
along with "a worldwide .
license to use,
transmit, and distribute the [Work]
in whole or in part,
in any format or medium,
in and in connection with [Elsevier's]
Publications and otherwise." Munkittrick Deel. Ex. 17
Elsevier had not yet undertaken further distribution of the Work at
the time Archie sought registration,
the initial transfer of a copy
in anticipation of further distribution may nonetheless amount to
publication. See M. Nimmer and D. Nimmer, 1 Nimmer on Copyright
(noting that "the general
principle that a distribution preparatory to ultimate distribution
to the public constitutes general publication" was a part of the
Moreover, the principles underlying the Copyright Act's
definition of publication weigh in favor of concluding that such a
transfer is a distribution. Under the regime of the 1909 Copyright
in which publication of a work without proper notice could
divest a copyright holder of his or her common law rights,
divestiture was justified in part by the fact that "once an author
elected to surrender the privacy of his manuscript, preferring the
more worldly rewards that come from exploitation of his work, he had
to accept the limitations on his monopoly imposed by the public
interest." 1 Nimmer
the time it executed the ALA,
Archie elected to exploit the Work at
and it needed not take any further
steps to effect the Work's broader distribution.
It is therefore
appropriate to find that publication occurred at that time.
Having determined that the Work was published before Archie
registered it in a collection of unpublished works, and thus that
the '274 Registration contained inaccurate information, the Court
turns to the second issue identified above, viz., whether Archie
included inaccurate information "with knowledge that it was
inaccurate." 17 U.S.C. § 411(b) (1) (A). Elsevier contends, however,
While publication was not defined in the 1909 Act, the current
statutory definition of publication represents a "codification of
the definition evolved by case law prior to adoption of the current
Act." 1 Nimmer § 4.03.
Archie's argument that the Work was not ready for further
distribution, and therefore could not have been published, at the
time the ALA was executed is unpersuasive. Archie bases this
argument on the fact that, after it provided Elsevier with the
animations pursuant to the ALA, it delivered voiceovers meant to
accompany the animations. See Pl. Suppl. Br. 8-9. However, Archie
does not dispute that those voiceovers were not registered with the
animations and, moreover, that it was Elsevier's decision whether or
not to include the voiceovers with the animations that accompanied
Elsevier's publications. See Def. Suppl. Br. 8-9; Pl. Reply Br. 2
that the Court need not consider whether Archie had such knowledge,
since an ''innocent-error defense" cannot save registrations from
material errors like the one here.
because, Elsevier argues,
Def. Suppl. Br. 10. That is
inadvertent errors that "render the
registrations completely inaccurate" may invalidate a registration.
Inc.'s Reply Regarding Validity of Archie's Copyright
("Def. Reply Br.")
4-5, ECF No.
259 F.3d 65,
other grounds by Reed Elsevier,
(quoting Morris v.
(2d Cir. 2001)
Inc. v. Muchnick,
( 2010)) .
Before the passage of the PRO IP Act,
courts tended to excuse
inadvertent errors in copyright registrations unless there was
"fraud on the Copyright
a knowing misstatement in a
registration application. See 2 Nimmer§ 7.20[B] [l]. Some courts
also would not excuse inadvertent but material errors: the Second
Circuit indicated that while unintentional "minor technical
misdescriptions" in registrations would not provide grounds to
dismiss an infringement suit,
[that] would render the
registrations completely inaccurate" would justify dismissal.
259 F.3d at 72. With the PRO IP Act, Congress largely "took
the court-made standards underlying the previous discussion and
articulated the applicable standards directly in the Copyright Act,"
in part by "providing that,
at least prospectively, only knowing
errors can serve to invalidate a certificate." 2 Nimmer§
7.20 [l]-. However, this approach appears to depart from the
standard in Morris, which, as noted above,
suggested that even
inadvertent errors that render registrations ''completely inaccurate"
Elsevier argues that Archie's remaining claim must be dismissed
because the registration of a published work as unpublished renders
Archie's registration "completely inaccurate." In support of this
position, Elsevier relies on Family Dollar Stores,
Inc. v. United
Inc., in which the court invalidated the
registration of a collection of unpublished works because they had
been previously published, concluding that "[t]he PRO IP Act d[id]
not apply" because it "solely concerns technical and minor errors
with copyright registrations." Id. 896 F. Supp. 2d 223, 233
(S.D.N.Y. 2012). The error in that case was not technical, the court
explained, because it "would have clearly caused the Register of
Copyrights to refuse to issue a registration." Id.
Yet Family Dollar's conclusion, that the PRO IP Act did not
apply because the error in question would have caused the Copyright
Office to refuse registration,
is hard to square with§ 41l(b) (1)
Family Dollar finds that the condition in clause
materiality of the inaccuracy,
is satisfied, but then takes that
conclusion to entail that the condition in clause
knowledge of the inaccuracy,
is irrelevant. But Section 411(b) (1)
presents a conjunctive test: both conditions must be satisfied in
order for an inaccuracy in a registration to defeat a claim.
Accordingly, another court in this district recently disagreed
with Family Dollar in addressing whether to refer the matter of an
allegedly inaccurate registration -- specifically, the alleged
registration of previously published works as unpublished works
to the Copyright Office under the referral provision contained in §
411 (b) (2). See Palmer/kane LLC v. Gareth Stevens Publ'g, No. 1:15cv-7404
2016 WL 6238612
(S.D.N.Y. Oct. 24, 2016). The court
there noted that Family Dollar's "proposition that a showing of
fraud is required only when the error is technical rather than
material appears to be irreconcilable with the § 411 (b) ( 2)
requirement that the Register of Copyrights be consulted regarding
whether the inaccuracy is material." Id. at *4 n. 2. Similarly, the
court in Palmer/kane concluded that Family Dollar's determination
"that§ 4ll(b) does not apply at all when the inaccuracy is material
seems to be inconsistent with the statute's requirement that
the Register of Copyrights weigh in on the issue of materiality in
all cases." Id.
For reasons similar to those expressed in Palmer/kane, the
Court is persuaded that,
in order to comply with the clear directive
in§ 4ll(b) (1), a copyright infringement claim should not be
dismissed on account of inaccurate information that was
inadvertently included in the copyright registration, whether or not
the inaccurate information is material.
In its briefing, Elsevier suggests that the Court, in the SJ
Opinion, agreed with Family Dollar's conclusion that even
Elsevier does not provide compelling arguments to the contrary.
The case law it cites in support of its position consists
exclusively of Family Dollar and cases that follow it, with which,
for the reasons stated above,
as well as cases that,
the Court must respectfully disagree,
like Morris, were decided before the
enactment of the PRO IP Act in 2008. See Def. Suppl. Br.
4-5. Elsevier appeals as well to a treatise on copyright
law for the proposition that "[w]hether the material error was
deliberate or inadvertent should generally be irrelevant; the only
relevant fact is that the error is material." See 5 William F.
Patry on Copyright§ 17:125
in context, the
author's statement regarding what "should" be relevant is normative,
not descriptive. Whatever the merits of that normative position, the
text of§ 411(b) (1)
suggests that Congress came to a different
Elsevier also argues,
in support of the view that§ 411(b) (1)
should not excuse the kind of material inaccuracy in a registration
that is alleged here, that registration of published works as
unintentional material errors may invalidate registrations. This is
not correct. Although the SJ Opinion did recite Family Dollar's
holding, it did so in the context of distinguishing that case. See
SJ Opinion at 29 (stating that "Family Dollar's discussion of the
PRO IP Act does not bear directly on the analysis here, as the court
there did not discuss the referral provision of§ 4ll(b) (2) ,"and
further noting that making a determination as to the materiality of
an error in a registration, as Family Dollar did, "is not the
province of the district court when it comes to applying the
referral provision of§ 4ll(b) (2)"). As the above discussion makes
clear, the Court disagrees with Family Dollar's conclusion.
unpublished cannot be corrected with a supplementary registration.
See Compendium§ 1402.7. But another section of -the Compendium notes
that that rule is not absolute, and the stated rationale for the
rule concerns the differing requirements for deposit copies filed in
connection with published and unpublished works. See id. §
1802.7(C). Nowhere in its supplemental briefing does Elsevier
discuss the text of
411 (b) (1) (A), and for good reason: that text
compels the result that the dismissal of a claim on account of the
inclusion of inaccurate information in a registration is not
justified if the information was included inadvertently.
Elsevier attempts to argue on reply that "there is no question
that Dr. Levine knew at the time of registration the facts that
precluded registration of Cell Differentiation as unpublished,"
viz., the license and delivery of the animations to Elsevier. Def.
(emphasis in original). But knowledge of the fact that
the animations were licensed does not entail that "the inaccurate
information was included on the application for copyright
registration with knowledge that it was inaccurate." 17 U.S.C.
411 (b) (1)
That conclusion would require another premise: that
Levine knew licensing constituted publication. See Palmer/kane, 2016
WL 6238612 at *4
(noting that the plaintiff "might not have
subjectively known the information that she included on the
application form was inaccurate" for the purposes of Section
From the foregoing discussion of publication, it is
apparent that whether the Work had been published by virtue of its
licensing to Elsevier was an unsettled legal question at the time
Levine sought to register the animations. The Court therefore holds
that there is no dispute that Levine did not state that the
animations in the collection were unpublished "with knowledge that
[that information] was inaccurate." 17 U.S.C.
41l(b) (1) (A).
In sum, the Court concludes that, while the '274 Registration
contained inaccurate information in that it described as unpublished
a work that had already been published by virtue of its licensing
and delivery to Elsevier,
such inaccurate information was not
included with knowledge that it was inaccurate, and therefore, under
17 U.S.C. § 4ll(b) (1),
that registration may serve as a prerequisite
for Archie's remaining copyright claim. The Court therefore denies
Elsevier's motion for summary judgment as to that claim, and it
directs the parties to convene a joint telephone call to Chambers no
later than August 25, 2017, to discuss the scheduling of a trial on
the remaining claim.
New York, NY
August J.Jjr 201 7
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