Mario Rivera v. Mendez & Compania et al

Filing 169

OPINION and ORDER granting in part and denying in part 121 motion for summary judgment; denying 124 motion for partial summary judgment. Signed by US Magistrate Judge Bruce J. McGiverin on December 12, 2013. (McGiverin, Bruce)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
DENNIS MARIO RIVERA,
Plaintiff,
v.

Civil No. 11-1530 (BJM)

MÉNDEZ & COMPAÑIA, et al.,
Defendants.
OPINION AND ORDER
In an amended complaint, Dennis Mario Rivera sued Méndez & Compañia
(“Méndez”), HNK Americas, Luis Álvarez, Triple-S Propiedad, Inc. and others, alleging
copyright infringement. Docket No. 83 (“Compl.”). The parties have consented to
proceed before a magistrate judge. Docket No. 107. Before the court is plaintiff’s
motion for summary judgment and defendants’ motion for partial summary judgment.
Docket Nos. 120, 121 (“Pl. Mot.”), 124 (“Def. Mot.”), 125. Each side has opposed the
other, and plaintiff additionally submitted a reply. Docket Nos. 128, 132, 148. In light of
the findings of fact and legal discussion set forth below, plaintiff’s motion for summary
judgment is GRANTED IN PART and DENIED IN PART, and defendants’ motion for
partial summary judgment is DENIED.
SUMMARY JUDGMENT STANDARD
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). A fact is material only if it “might affect the outcome of
the suit under the governing law,” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986), and “[a] ‘genuine’ issue is one that could be resolved in favor of either party.”
Calero-Cerezo v. U.S. Dep’t of Justice, 355 F.3d 6, 19 (1st Cir. 2004). The court does not
weigh facts, but instead ascertains whether the “evidence is such that a reasonable jury

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2

could return a verdict for the nonmoving party.” Leary v. Dalton, 58 F.3d 748, 751 (1st
Cir. 1995).
The movant must first “inform[] the district court of the basis for its motion,” and
identify the record materials “which it believes demonstrate the absence of a genuine
issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); R. 56(c)(1).
If this threshold is met, the opponent “must do more than simply show that there is some
metaphysical doubt as to the material facts” to avoid summary judgment. Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The nonmoving party
may not prevail with mere “conclusory allegations, improbable inferences, and
unsupported speculation” for any element of the claim. Medina-Muñoz v. R.J. Reynolds
Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990). Still, the court draws inferences and evaluates
facts “in the light most favorable to the nonmoving party,” Leary, 58 F.3d at 751, and the
court must not “superimpose [its] own ideas of probability and likelihood (no matter how
reasonable those ideas may be) upon the facts of the record.” Greenburg v. P.R. Maritime
Shipping Auth., 835 F.2d 932, 936 (1st Cir. 1987).
BACKGROUND
This summary of the facts is guided by the parties’ Local Rule 56 statements of
uncontested facts. See Docket Nos. 120 (“Pl. SUF”), 125 (“Def. SUF”), 131, 133, 149.1
Dennis Mario Rivera is an artist of more than 30 years based in Puerto Rico.
Méndez & Compañia is a Puerto Rico company that serves as the exclusive distributor of
Heineken beer in Puerto Rico, and sponsors the annual Puerto Rico Heineken Jazz Fest

1

Local Rule 56 requires parties at summary judgment to supply brief, numbered
statements of facts, supported by citations to admissible evidence. It “relieve[s] the district court
of any responsibility to ferret through the record to discern whether any material fact is genuinely
in dispute,” CMI Capital Market Inv. v. González-Toro, 520 F.3d 58, 62 (1st Cir. 2008), and
prevents litigants from “shift[ing] the burden of organizing the evidence presented in a given case
to the district court.” Mariani-Colón v. Dep’t of Homeland Sec., 511 F.3d 216, 219 (1st Cir.
2007). The rule “permits the district court to treat the moving party’s statement of facts as
uncontested” when not properly opposed, and litigants ignore it “at their peril.” Id.

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(“PRHJF”). Luis Álvarez is a Vice President at Méndez and the Executive Producer of
PRHJF. Pl. SUF ¶¶ 1–5. The Puerto Rico Heineken Jazz Fest is a music festival,
established in 1991, and which raises funds for students of the Berklee College of Music.
Def. SUF ¶ 1.
Sometime before the 1998 festival, Méndez approached Rivera and commissioned
him to create a visual design that included the Heineken logo and featured that year’s
artist, to be used in various promotional and marketing materials (posters, t-shirts, bus
shelters, etc.) for the 1998 PRHJF. Compl. ¶¶ 16–17; Def. SUF ¶¶ 2–3. For each festival
starting in 1998 through 2009, Rivera created one such design (for a total of twelve
pieces). Pl. SUF ¶ 10. Rivera was given a significant amount of artistic freedom to
create these works. Id. ¶¶ 100–02, 104. Upon completion of each piece, Rivera would
deliver to Méndez the original work, framed, and the work in a digital format on a disk.
Def. SUF ¶ 7. For each piece, he charged Méndez $5000 for the original artwork, $4000
for “logo design,” and an additional sum for the original’s framing. See, e.g., Docket No.
125-8, at 10–18. Prior to the festival’s twentieth anniversary in 2010, Álvarez met with
Rivera at a restaurant in San Juan and notified him that another artist would be designing
the artwork for the 2010 PRHJF. Pl. SUF ¶¶ 11–12. During this meeting, Rivera claims
he told Álvarez that he was fine with this change, but that they could no longer use any of
his prior artwork. Id. ¶ 165; Docket No. 146-9. Álvarez claims Rivera never made such
a statement. Docket No. 133-1, at 2.
Although Méndez did not commission Rivera to produce a new piece for the 2010
festival, Méndez used at least six of Rivera’s previous designs in a collage that was
placed on festival programs and commemorative merchandise sold during the 2010
festival. Pl. SUF ¶ 116; Def. SUF ¶ 10. Rivera did not explicitly authorize the creation
of this collage. Pl. SUF ¶ 118. Additionally, Rivera’s artworks are still displayed on the
Méndez

&

Compañia

(www.mendezcopr.com)

and

PRHJF

websites

(www.prheinekenjazz.com). Pl. SUF ¶ 17; Docket Nos. 133-3, 133-4. On the Méndez

Rivera v. Méndez & Compañia, Civil No. 11-1530 (BJM)

4

website, a page describes the history of the Heineken Jazz Fest and allows the user to
scroll through year-by-year, to see the artwork from each annual event, including all
twelve of Rivera’s works. Docket No. 133, Additional Fact ¶ 7.
Rivera registered all twelve artworks at issue with the U.S. Copyright Office on
April 27, 2011. Docket No. 120-4. He brought suit against defendants in June 2011 for
copyright infringement, seeking injunctive relief and damages.
DISCUSSION
Plaintiff Rivera moves for summary judgment on his copyright infringement
claim. To prevail, a plaintiff must demonstrate an absence of a genuine issue of material
fact as to: 1) ownership of copyright, and 2) defendants’ infringement.

Johnson v.

Gordon, 409 F.3d 12, 17 (1st Cir. 2005) (“two elements must be proven: (1) ownership of
a valid copyright, and (2) copying of constituent elements of the work that are original”).
Defendant Méndez argues that its use of Rivera’s artwork is within the scope of implied
licenses Rivera granted to Méndez each time an artwork was commissioned and
delivered. Méndez also asserts a fair use defense with respect to the display of Rivera’s
artwork on the Méndez & Compañia and PRHJF websites. Lastly, Méndez moves for
partial summary judgment on Rivera’s claim for damages. Each issue will be discussed
below in turn.
I.

Copyright Infringement
To establish copyright infringement, a plaintiff must first demonstrate ownership

of a valid copyright. Johnson, 409 F.3d at 17; see also Feist Publ’ns, Inc. v. Rural Tel.
Serv. Co., 499 U.S. 340, 361 (1991). The burden of proving copyright ownership is
borne by the plaintiff. Grubb v. KMS Patriots, L.P., 88 F.3d 1, 3, 5 (1st Cir. 1996).
Registration with the U.S. Copyright Office within five years of the work’s first
publication is prima facie evidence of copyright ownership, and the burden shifts to the
opposing party to demonstrate invalidity of the copyright. 17 U.S.C. § 410(c); Lotus Dev.
Corp. v. Borland Int’l, Inc., 49 F.3d 807, 813 (1st Cir. 1995). Registration obtained after

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five years benefits from no presumption, and the weight given to such a registration is
within the discretion of the court. 17 U.S.C. § 410(c); Brown v. Latin Am. Music Co.,
Inc., 498 F.3d 18, 23–24 (1st Cir. 2007).
In this case, Rivera registered all twelve artworks at issue on April 27, 2011. See
Docket No. 120-4. The first publication date for these pieces range from 1998 to 2009.
Id. Thus, the registrations are prima facie evidence of valid copyright ownership for only
some of the artworks (those with a first publication date on or after April 27, 2006).
However, Méndez has produced no evidence to demonstrate why Rivera’s claimed
copyright is not valid, and in fact it admits that Rivera is the “copyright owner of the
artworks” at issue. SUF ¶ 9. Accordingly, I find that Rivera has established ownership of
valid copyright and has satisfied the first prong of his copyright infringement claim.
Summary judgment as to the issue of copyright ownership is granted. See Fed. R. Civ. P.
56(g) (court may enter order finding any material fact not in dispute and “treating the fact
as established in the case”)
With respect to the second prong, a plaintiff must show “(a) that the defendant
actually copied the work as a factual matter,” and “(b) that the defendant’s copying of the
copyrighted material was so extensive that it rendered the infringing and copyrighted
works ‘substantially similar.’” Airframe Sys., Inc. v. L-3 Comms. Corp., 658 F.3d 100,
105–06 (1st Cir. 2011) (quoting Situation Mgmt. Sys., Inc. v. ASP Consulting LLC, 560
F.3d 53, 58 (1st Cir. 2009)) (further citations omitted).

Absent direct evidence of

copying, actual copying may be inferred where “the alleged infringer had access to the
copyrighted work” and “the offending and copyrighted works are so similar that the court
may infer that there was factual copying (i.e., probative similarity).” Lotus Dev. Corp.,
49 F.3d at 813. The probative similarity inquiry “is somewhat akin to, but different than,
the requirement of substantial similarity.” Johnson, 409 F.3d at 18. Substantial similarity
exists where “a reasonable, ordinary observer, upon examination of the two works, would
‘conclude that the defendant unlawfully appropriated the plaintiff’s protectable

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6

expression.’” T-Peg, Inc. v. Vt. Timber Works, Inc., 459 F.3d 97, 112 (1st Cir. 2006)
(quoting Johnson, 409 F.3d at 18). “Summary judgment on substantial similarity is
‘unusual’ but can be warranted on the right set of facts.” T-Peg, 459 F.3d at 112.
Rivera appears to claim at least two distinct sets of infringing activity: (1) use and
display of his artwork in a collage that commemorates the twentieth anniversary of
PRHJF, and (2) display of his artwork on the Méndez & Compañia and PRHJF websites.
In both instances, there is compelling evidence of copying in-fact. It is undisputed that
Méndez had access to Rivera’s artwork—in the form of the original, and in digital form.
Def. SUF ¶ 7. Méndez also admits to use and reproduction of Rivera’s prior artwork to
create the 2010 anniversary collage. Pl. SUF ¶ 116; Def. SUF ¶ 10. And the websites
clearly reproduce and display substantial portions of the artworks at issue, such that they
could not be reproduced without copying-in-fact. See, e.g., Docket Nos. 133-3, 133-4.
However, Rivera falls short in establishing substantial similarity between the
copyrighted works and the infringing works, as he appears to conflate the concepts of
probative similarity with substantial similarity. After noting defendants’ access to his
works and the “striking similarity” between the copyrighted works and the infringing
works, Rivera asserts in a conclusory fashion that the substantial similarity inquiry is
satisfied. Pl. Mot. at 15–16. Plaintiff does not provide details on how much of the
artworks were copied and used in the allegedly infringing collage or the website. “It is
not enough merely to mention a possible argument in the most skeletal way, leaving the
court to do counsel's work, create the ossature for the argument, and put flesh on its
bones.” United States v. Zannino, 895 F.2d 1 (1st Cir. 1990).

Given this lack of

argumentation, it cannot be said that a reasonable jury must find that the defendants
unlawfully appropriated the plaintiff’s protectable expression. I find that Rivera has not
met his burden of establishing the absence of a genuine issue of material fact with respect
to substantial similarity.
infringement must be denied.

Thus, plaintiff’s motion for summary judgment as to

Rivera v. Méndez & Compañia, Civil No. 11-1530 (BJM)

II.

7

Implied License
Even assuming ownership of copyright and infringement, Méndez argues it is not

liable because Rivera granted it an irrevocable, implied license to use, reproduce, and
display the works.
Federal copyright law provides that a transfer of copyright ownership must
generally be in writing and signed by the copyright owner. 17 U.S.C. § 204(a); see Latin
Am. Music Co. v. Archdiocese, 499 F.3d 32, 42 (1st Cir. 2007).

However, this

requirement does not apply to the grant of nonexclusive licenses. See 17 U.S.C. § 101;
see also John G. Danielson, Inc. v. Winchester-Conant Props., Inc., 322 F.3d 26, 40 (1st
Cir. 2003). The owner of a copyright may grant such nonexclusive licenses orally, or
such licenses may be implied from conduct indicating the owner’s intent to allow a
licensee to use the work. Id. “Uses of a copyrighted work that stay within the bounds of
an implied license do not infringe the copyright.” Estate of Hevia v. Portrio Corp., 602
F.3d 34, 41 (1st Cir. 2010). The burden of proving the existence of such a license is on
the licensee party claiming its protection. Id. Moreover, “implied licenses are found only
in narrow circumstances.” Id.
“The touchstone for finding an implied license is intent.” Id. (internal quotations
omitted). The ultimate inquiry is “whether the totality of the parties’ conduct indicates an
intent to grant such permission.” Id. (internal quotations omitted).

In determining

whether an implied license was granted, courts look to various factors, including: (1)
“whether the licensee requested the work,” (2) “whether the creator made and delivered
that work,” and (3) “whether the creator intended that the licensee would copy and make
use of the work.” Id.
In this case, the evidence clearly indicates Rivera granted Méndez an implied
license to use, reproduce, and display his artworks. It is undisputed that Méndez, the
licensee, requested Rivera to create the twelve artworks at issue. Compl. ¶ 16–17.
Accordingly, Rivera created and delivered the artworks to Méndez, with the intent that

Rivera v. Méndez & Compañia, Civil No. 11-1530 (BJM)

8

Méndez would “reproduce, display, and distribute copies” of the works in marketing
materials to promote each annual PRHJF. Compl. ¶ 18.
The real dispute centers on the scope of the implied license—namely, its duration
and extent. Rivera claims he granted Méndez limited one-year licenses for each of the
artworks, such that the licenses expired at the end of each annual PRHJF; and thus when
Méndez used and reproduced Rivera’s artwork at the 2010 PRHJF, it was infringing on
his exclusive rights under federal copyright laws. Docket No. 148, at 9–10. In response,
Méndez argues that the implied license was of indefinite duration and irrevocable.
Docket No. 132, at 2.
Determining the scope of an implied license is an objective inquiry. Danielson,
322 F.3d at 42. The focus is not on the parties’ subjective intent but their objective
manifestation of it. Id. On the record before me, there exists a genuine issue of material
fact as to whether the parties intended for the implied license to be of a limited or
indefinite duration. The record lacks evidence of statements or conduct that indicate
whether Rivera intended for Méndez to be able to use his artwork beyond the year in
which it was commissioned. It is also unclear whether Méndez objectively manifested an
intent to procure from Rivera a license to use the artworks for more than the year in
which they were made. The record so far only establishes that for each year starting 1998
through 2009, Méndez commissioned Rivera to create one artwork representing that
year’s festival. 2 Both parties were aware and intended that the artwork be used to
promote the event that year. Beyond this base of agreement, it is difficult to say whether
the parties had any other intended uses for the artworks.

2

Méndez points out that it commissioned Rivera to create two works in 1999, because
the musician originally scheduled (Chucho Valdés) was unable to attend. Docket No. 133,
Additional Facts ¶ 2. The Chucho Valdés work was used in a subsequent year. Id. ¶ 4. This
slight twist does not affect the court’s calculus because it does not shed light on the parties’ intent
at the time of contracting for these works.

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9

Méndez notes that Rivera was aware that the artwork would be used to brand each
event, and the artwork would be used on PRHJF merchandise such as posters, t-shirts,
coasters, CDs, that by their nature would be available for sale after the event (at least
until the merchandise sold out). It is true that such awareness would tend to show Rivera
knew his artwork from prior years would still be available in the form of merchandise
past the immediate festival.

But this awareness does not necessarily mean Rivera

intended to allow Méndez to use the artworks indefinitely and create collages therefrom
for future events.

Thus, there is a genuine issue of material fact which precludes

summary judgment on this defense.
In a last ditch effort, Rivera contends that any implied license granted to Méndez
was revoked upon the filing of this action. Docket No. 148, at 10. Méndez counters that
the implied licenses at issue here are supported by consideration, and thus are
irrevocable.3 Docket No. 132, at 6. Rivera’s claim that any implied license granted was
terminated upon the filing of an infringement suit has been squarely rejected by other
circuit courts. See, e.g., Lulirama Ltd. v. Axcess Broad. Servs., Inc., 128 F.3d 872, 882
(5th Cir. 1997).

Those same courts have held that implied licenses supported by

consideration are irrevocable. See Asset Mktg. Sys., Inc. v. Gagnon, 542 F.3d 748, 757
(9th Cir. 2008); Lulirama, 128 F.3d at 882 (“[A] nonexclusive license supported by
consideration is a contract”). In any event, a genuine question remains as to whether

3

Méndez also asserts that termination of transfers of copyright must be made in writing
pursuant to 17 U.S.C. § 203. But that provision is inapplicable here as Rivera is not seeking to
exercise his right of termination under § 203, but rather appears to be asserting an argument for
termination under contract principles. See Korman v. HBC Florida, Inc., 182 F.3d 1291, 1297
(11th Cir. 1999) (noting that § 203 is not meant to convert casual oral licenses into thirty-five
year “straitjacket[s]” and “if state law provides that licenses of indefinite duration may be
terminated in less than 35 years, it is state law and not section 203 that governs the question of
termination”).

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Méndez exceeded the scope of the implied license, and whether its conduct amounted to
infringement of Rivera’s exclusive rights.
III.

Fair Use Defense
Méndez also seeks a determination that its displays of Rivera’s artwork on

Méndez & Compañia and PRHJF’s websites constitute fair use. Docket No. 132, at 10.
“Fair use” is a defense that allows a court to avoid the rigid application of the
Copyright Act when such application would stifle the very creativity the law was
designed to foster. See Stewart v. Abend, 495 U.S. 207, 236 (1990). The “fair use”
defense permits the use of copyrighted materials for certain purposes, including parody,
criticism, comment, teaching, news reporting, or research. Campbell v. Acuff-Rose Music
Co., 510 U.S. 569, 576–77 (1994).
Section 107 of the Copyright Act provides a list of non-exclusive factors that a
court must ponder in determining whether an unauthorized use of a copyrighted work can
be called “fair use,” including “(1) the purpose and character of the use, including
whether such use is of a commercial nature or is for non-profit, educational purposes; (2)
the nature of the copyrighted work; (3) the amount and substantiality of the portion used
in relation to the copyrighted work as a whole; and (4) the effect of its use upon the
potential market for or value of the copyrighted work.” 17 U.S.C. § 107; see Stewart,
495 U.S. at 236–37; Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 549
& 561 (1985). No one factor is dispositive; all are to be explored and weighed together
in light of the purposes of the Copyright Act. See Campbell, 510 U.S. at 578. Since fair
use is an affirmative defense, defendants carry the burden of proof in demonstrating fair
use. Id. at 590. Although fair use is a mixed question of law and fact, a district court
may resolve fair use issues on summary judgment where there is no genuine issue of
material fact relevant to the fair use determination. See Harper & Row, 471 U.S. at 56061.

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A.

11

Purpose and Character of Use

The first factor focuses upon whether the new work “merely supersedes the
objects of the original creation, or instead adds something new, with a further purpose or
different character, altering the first with new expression, meaning, or message; it asks, in
other words, whether and to what extent the new work is ‘transformative.’” Campbell,
510 U.S. at 579. Other factors that may militate against a fair use finding decline in
significance to the extent that a work is more transformative. Id.
Here the use is somewhat transformative.

The purpose of the new use, in

defendant’s words, is “expository, archival” in nature. The display of Rivera’s works on
the two websites is meant to be informational. The artworks appear on both websites on
pages that describe the history of the Heineken Jazz Fest. For example, on the Méndez
website, one page describes the history of the festival and allows the user to scroll
through year-by-year to see the artwork from each annual PRHJF, including all of
Rivera’s works. See, e.g., Docket No. 133-4. But this new use does not add anything to
the works such that it creates a wholly “new expression, meaning, or message.”
Campbell, 510 U.S. at 579. The websites do not alter the artworks in any significant way,
except to resize them so that they fit on the webpage. Moreover, the artworks were
originally created to promote and represent that year’s festival, and the reproduction of
these works on the website also serve as a representation of these past events. Thus, I
find Méndez’s new use only slightly transformative. Cf. Robinson v. Random House,
Inc., 877 F. Supp. 830, 841 (S.D.N.Y. 1995) (finding new biographical use was not
substantially transformative because when “the secondary use involves . . . an
untransformed duplication of the original, it has little or no value that does not exist in the
original work”).
The fact that a use is commercial as opposed to nonprofit is a separate factor that
tends to weigh against a fair use finding. Harper & Row, 471 U.S. at 562. “[E]very
commercial use of copyrighted material is presumptively an unfair exploitation” of a

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12

copyright owner’s monopoly privilege. Id. “The crux of the profit/nonprofit distinction
is not whether the sole motive of the use is monetary gain but whether the user stands to
profit from the exploitation of the copyrighted material without paying the customary
price.” Id. (citations omitted). The court also considers the propriety of defendants’
conduct as part of the “character” of the use. Fair use presupposes good faith and fair
dealing. Id. at 562–63.
The distinction between commercial versus nonprofit use is of limited importance
here, but it could be said to weigh slightly against a finding of fair use. Although PRHJF
is an event intended to raise funds for students of the Berklee College of Music, the event
sponsor, Méndez, is a corporation that stands to commercially benefit from use of
Rivera’s works to promote the jazz festival series and the Heineken brand itself.
Additionally, there is no evidence of bad faith on the part of Méndez in using Rivera’s
works on the two websites. On balance, then, I find that there is a genuine issue as to
whether the purpose and character of the use weighs in favor of or against a fair use
finding.
B.

Nature of the Copyrighted Work

The next factor “calls for recognition that some works are closer to the core of
intended copyright protection than others, with the consequence that fair use is more
difficult to establish when the former works are copied.” Campbell, 510 U.S. at 586.
Creative works of art are traditionally at the core of intended copyright protection, though
the scope for fair use of published works is broader than that for unpublished works.
Reyes v. Wyeth Pharm., Inc., 603 F. Supp. 2d 289, 298 (D.P.R. 2009) (citing Bill Graham
Archives v. Doring Kindersley Ltd., 448 F.3d 605, 612 (2d Cir. 2006). However, the
factor may be of limited usefulness where the creative work of art is being used for a
transformative purpose. See Bill Graham Archives, 448 F.3d at 612; Campbell, 510 U.S.
at 586.

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Here, the works at issue are creative works deserving of protection. Although the
works contain some informative elements, namely, references to the Heineken brand and
the artist or artists performing that year, the works themselves are completely original
creations by Rivera. He enjoyed a great deal of artistic freedom (in color, design, and
medium) when creating these works. Pl. SUF ¶¶ 100–02, 104. Given that the secondary
use is only slightly transformative, this factor clearly weighs against a finding of fair use.
C.

Amount and Substantiality of the Portion Used

The third factor focuses on whether the quantity and value of the materials used
are reasonable in relation to the purpose of the copying. Campbell, 510 U.S. at 586
(citation and quotation omitted). Copying an entire work usually weighs against a fair
use finding, but courts have also found that copying the entirety of a work is sometimes
necessary to make a fair use of it. Reyes, 603 F. Supp. 2d at 299 (citations omitted); Bill
Graham Archives, 448 F.3d at 613. However, copying only an insubstantial portion of
the entire work “in absolute terms” may not help the defendant if that portion constitutes
the “heart” of the work. Harper & Row, 471 U.S. at 564–65 (relatively few words quoted
from unpublished manuscript, but passages used were among the most interesting and
powerful in the book). Thus the inquiry at the third factor must take into account that
“the extent of permissible copying varies with the purpose and character of the use.”
Campbell, 510 U.S. at 586–87.
This factor is relatively neutral in the instant analysis.

Méndez appears to

concede that entire works or substantial portions of the artworks appear on the two
websites. Docket No. 132, at 13. But the displays of entire works or substantial portions
thereof appear to be necessary to effectuate the purpose of the secondary use, i.e. to
memorialize and inform the reader of the past festivals. The websites would not be as
informative of PRHJF history if they displayed only insignificant portions of the
artworks. Thus, this factor does not weigh against a finding of fair use.

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D.

14

Effect of the Use upon the Potential Market for the Works

Lastly, the court must evaluate “the effect of the use upon the potential market for
or value of the copyrighted work.” 17 U.S.C. § 107. This factor “requires courts to
consider not only the extent of market harm caused by the particular actions of the
alleged infringer[s], but also whether unrestricted and widespread conduct of the sort
engaged in by the defendant would result in a substantially adverse impact on the
potential market for the original.” Campbell, 510 U.S. at 590 (punctuation and citation
omitted). This factor “must take account not only of harm to the original but also of harm
to the market for derivative works.” Id. (quoting Harper & Row, 471 U.S. at 568). That
is, this factor focuses upon secondary uses of the copyrighted work that, “by offering a
substitute for the original, usurp a market that properly belongs to the copyright holder.”
Reyes, 603 F. Supp. 2d at 299 (citation and quotation omitted). However, “a copyright
holder cannot prevent others from entering fair use markets merely by developing or
licensing a market for . . . transformative uses of its own creative work.” Bill Graham
Archives, 448 F.3d at 614–15 (citation and quotation omitted). “[C]opyright owners may
not preempt exploitation of transformative markets.” Id. (citation and quotation omitted).
When “the second use is transformative, market substitution is at least less certain, and
market harm may not be so readily inferred.” Campbell, 510 U.S. at 591.
Méndez contends that display of Rivera’s works on its websites do not negatively
affect the potential market for the works as there is no market for these works. It is true
that Méndez owns the originals, but that does not mean there is no market for Rivera’s
twelve works. The originals could be sold in the future to other buyers, and there
certainly may be a market for derivative works. Because fair use is an affirmative
defense, the burden is on defendants to demonstrate fair use, but it is difficult to carry this
burden “without favorable evidence about relevant markets.” Campbell, 510 U.S. at 590.
Defendants have introduced no such evidence except to assert that their use does not

Rivera v. Méndez & Compañia, Civil No. 11-1530 (BJM)

affect the market for plaintiff’s works. Such bald assertions are not evidence.

15

Thus,

defendants have not carried their burden of proof on this factor.
In light of the foregoing, I find defendants have failed to establish the absence of
genuine issues of material fact compelling a finding of fair use. However, defendants
may present evidence in support of a fair use defense at trial.
IV.

Summary Judgment as to Damages
Méndez also moves for partial summary judgment on the issue of damages.

Méndez argues that Rivera’s claim for damages should be dismissed as he has no
evidence of actual damages and is ineligible to elect statutory damages. Def. Mot. 3.
Rivera points to his experts’ reports as evidence of actual damages.
Section 504(b) of the Copyright Act provides that a prevailing plaintiff in an
infringement suit may recover either (1) actual damages suffered by the copyright owner
and any additional profits of the infringer attributable to the infringement, or (2) statutory
damages pursuant to 17 U.S.C. § 504(c). Because Rivera failed to timely register his
works, he is not entitled to seek statutory damages. See 17 U.S.C. § 412(2) (statutory
damages are unavailable where infringement occurs after first publication and before the
effective date of registration). Rivera also does not appear to seek recovery based on
Méndez’s profits attributable to the infringement. See Docket No. 128, at 16. Therefore,
to survive summary judgment, Rivera must offer some proof of actual damages. Actual
damages consist of “all income and profits lost as a consequence of the infringement,”
Bruce v. Weekly World News, Inc., 310 F.3d 25, 28 (1st Cir. 2002), and is generally
measured by the amount that would have accrued to plaintiff but for the defendant’s
infringement, see Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1171
(1st Cir. 1994), abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S.
154 (2010).
In a situation where the plaintiff’s losses are hard to quantify, and the infringer has
not directly profited from the infringement, courts look to the value of the infringing use

Rivera v. Méndez & Compañia, Civil No. 11-1530 (BJM)

16

(i.e. a hypothetical licensing fee) to determine damages. See, e.g., Davis v. The Gap, Inc.,
246 F.3d 152, 160–61, 172 (2d Cir. 2001). The ultimate question is what a willing
licensee would have been reasonably required to pay to a willing copyright licensor.
Real View, LLC. v. 20-20 Techs., Inc., 811 F. Supp. 2d 553, 557 (D. Mass. 2011).
However, the fact that “the fair market value of a reasonable license fee may involve
some uncertainty . . . is not sufficient reason to refuse to consider this as an eligible
measure of actual damages.” Davis, 246 F.3d at 166. Additionally, uncertainty should
not preclude recovery, if the uncertainty is as to amount, not as to the fact that actual
damages are attributable to the infringement. Real View, 811 F. Supp. 2d at 558 (internal
quotations and alterations omitted). At bottom, the “amount of damages must not be
speculative and must be grounded in objective evidence of what a buyer would
reasonably have been charged for the particular use at issue.” Id. (internal quotations
omitted).
Méndez, in its motion for partial summary judgment and an accompanying
motion to strike (Docket No. 123), argues that Rivera’s experts should be stricken under
Rule 702 of the Federal Rules of Evidence. Specifically, Méndez contends that neither
expert is qualified and their opinions are based on flawed methodologies that are
irrelevant to the issue of actual damages. I need not reach a decision on that issue to
resolve defendants’ motion for partial summary judgment. Although Rivera’s method for
computation of a hypothetical licensing fee may be problematic, a wholesale rejection of
Rivera’s claim for damages is inappropriate at this time. Even assuming Rivera’s expert
testimony is inadmissible, Rivera still has some evidence of actual damages. At the very
least, the invoices from 1998 through 2009 suggest that the fair market value to use his
artwork is a minimum of $4000. The fact that the amount of a reasonable license fee is
uncertain should not preclude recovery. The issue here is the amount of actual damages,
not whether there is evidence of actual damages. Davis, 246 F.3d at 166. The situation
at bar is distinguished from Iconbazaar, L.L.C. v. Am. Online, Inc., where the court

Rivera v. Méndez & Compañia, Civil No. 11-1530 (BJM)

17

granted defendant’s motion for summary judgment, because in that case, the plaintiff
failed to offer any evidence to “quantify any license fee it thinks it might be due.” 378 F.
Supp. 2d 592, 594 (M.D.N.C. 2005). Without any evidence, Iconbazaar offered “nothing
more than mere speculation” as to the licensing fees it might be due. 378 F. Supp. 2d
592, 595 (M.D.N.C. 2005).
Similarly, the Fourth Circuit’s recent decision in Dash v. Mayweather, wherein the
court affirmed the district court’s grant of summary judgment for defendants, provides no
relief for Méndez. 731 F.3d 303 (4th Cir. 2013). There, the court noted that the plaintiff,
Dash, “failed to present any evidence—such as an affidavit or a prior contract—that he
had ever sold, offered for sale, or licensed one of his beats” to defendants or anyone else.
Id at 317. Dash’s only evidence to support his damages claim was an expert report that
failed to clearly state the work had a fair market value.

Id. From this, the court

concluded that the expert’s “omission of a clear statement of value suggests that he could
not conclude, either with certainty or sound reasoning,” that plaintiff would have been
paid a licensing fee for use of his work. Id. The Fourth Circuit further noted that
“evidence of a copyright holder's prior licensing or valuation of his work can provide
sufficient support for his actual damages claim,” id., which is the precise situation the
court is confronted with in this case. Here, the invoices between Rivera and Méndez are
evidence of the copyright holder’s prior licensing and valuation of his work. Rivera
clearly has some evidence to support his actual damages claim.
In light of the above, Méndez’s motion for partial summary judgment must be
denied.
CONCLUSION
For the foregoing reasons, plaintiff’s motion for summary judgment is
GRANTED on the issue of copyright ownership and DENIED as to infringement, and
defendants’ motion for partial summary judgment is DENIED.

Rivera v. Méndez & Compañia, Civil No. 11-1530 (BJM)

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IT IS SO ORDERED.
In San Juan, Puerto Rico, this 12th day of December, 2013.
S/Bruce J. McGiverin
BRUCE J. MCGIVERIN
United States Magistrate Judge