Intellectual Property and Tech Law Reports

PFS Distribution Co. v. Raduechel

PFS Distribution Company (PFS Distribution) and Pilgrim’s Pride Corporation (Pilgrim’s Pride) (collectively, PFS) sued Darrell Raduechel (Raduechel) and Barry Spain (Spain) for breach of fiduciary duties and copyright infringement in connection with the formation and operation of Raduechel’s and Spain’s company, D&B Solutions, Inc. (D&B Solutions). PFS also sued Raduechel; Spain; D&B Solutions; John Pothoven (Pothoven); Richard Donohue (Donohue) and Theobald Donohue & Thompson, P.C. (TD&T) (collectively, Accounting Defendants); and Steven Hicks (Hicks) and MidWestOne Bank and Trust (MidWestOne) (collectively, Banking Defendants) for civil conspiracy, constructive trust and unjust enrichment, misappropriation of trade secrets, and aiding and abetting. D&B Solutions was also added to PFS’s copyright infringement claim. Raduechel counterclaimed against PFS for payment of a salary bonus.

The district court1 dismissed Raduechel’s counterclaim, and granted summary judgment to PFS on the issue of Raduechel’s and Spain’s liability for breach of fiduciary duties and misappropriation of trade secrets. The district court left for trial the remaining claims, as well as the issues of causation and damages for Raduechel’s and Spain’s breach of fiduciary duties and misappropriation of trade secrets. A jury returned a verdict in favor of all defendants on all of PFS’s remaining claims. PFS then moved for equitable relief and a new trial. The district court denied both motions.

PFS now challenges the district court’s (1) denial of PFS’s motion for a new trial; (2) jury instructions on the civil conspiracy, and aiding and abetting claims; (3) expert witness rulings; and (4) denial of equitable relief. Raduechel cross appeals the district court’s dismissal of his counterclaim, and Raduechel and Spain challenge the district court’s summary judgment ruling. We affirm.

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Intercollegiate Broad. Sys. v. Copyright Royalty Bd.

Appellants seek review of a final determination of the Copyright Royalty Judges, setting rates and terms relating to webcasting. See Digital Performance Right in Sound Recordings and Ephemeral Recordings (“Order”), 72 Fed. Reg. 24,084 (May 1, 2007). Webcasting is the process of transmitting sound recordings over the Internet. This case consolidates five separate appeals. A group of “commercial webcaster” appellants led by the Digital Media Association (“DiMA”) argues that the rates for commercial webcasters set by the Judges were unreasonable and that the absence of a cap on minimum fees paid per licensee was arbitrary and capricious. Several “small commercial webcaster” appellants argue that the Judges’ refusal to permit them to pay royalties as a percentage of revenues was arbitrary and capricious. “Noncommercial broadcaster” appellants—including the Collegiate Broadcasters, Inc., Intercollegiate Broadcasting System, Inc., and the National Religious Broadcasters Noncommercial Music License Committee—argue that the Judges set unreasonable rates for noncommercial webcasters, that they established a $500 minimum fee per station without substantial evidence, and that they improperly deferred consideration of record-keeping requirements to a later proceeding. Appellant Royalty Logic, Inc., a contender to serve as the clearinghouse (or “collective”) for royalty payments, argues that the Judges exceeded their statutory authority by naming SoundExchange, Inc. the sole royalty collective. Respondent Copyright Royalty Board defends the Judges’ determination. (The Board is “the institutional entity in the Library of Congress that . . . house[s]” the Judges. 37 C.F.R. § 301.1.) SoundExchange intervened to defend the Judges’ determination.

Months after the briefing schedule had been set, Royalty Logic moved to file supplementary briefs on the issue of whether the appointment of the Copyright Royalty Judges violated the Appointments Clause of the Constitution of the United States. A motions panel of this court granted the motion “without prejudice to the merits panel deciding whether or not to consider” the issue, and set a supplemental briefing schedule, soliciting briefs from Royalty Logic, the Board, and SoundExchange. Royalty Logic argued that the Judges’ appointment violated the Constitution. SoundExchange and the Board argued it did not, and argued further that Royalty Logic had forfeited consideration of the issue by not raising it in initial briefing before this court. We hold that Royalty Logic has forfeited the Appointments Clause issue. We vacate the $500 minimum fee for both noncommercials and commercials, and remand those portions of the determination for reconsideration by the Copyright Royalty Judges. In all other respects, we affirm the determination.

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SoundExchange, Inc. v. Librarian of Congress

In 2008 the Copyright Royalty Judges (CRJ) set the royalty rate that satellite radio services must pay to copyright owners for the use of sound recordings during the years 2007-2012. SoundExchange, an organization established to collect and distribute royalties to the copyright owners, appeals the CRJ’s determination, arguing it is arbitrary, capricious, and not supported by substantial evidence. We affirm the CRJ’s determination with respect to the royalty rate for the use of sound recordings but reverse with respect to the CRJ’s failure to set a royalty rate for “ephemeral copies” of sound recordings.

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St. Luke's Cataract & Laser Inst., P.A. v. Sanderson

On appeal, St. Luke’s argues that the district court erred by: (1) denying its motion for a new trial on its copyright infringement claim; (2) limiting the scope of its copyright to the 2003 version of the LaserSpecialist.com website; (3) finding that the damages awarded on its cyberpiracy and service mark infringement claims were duplicative; and (4) failing to exclude the testimony of Dr. Sanderson’s expert witness Patricia Perzel. Dr. Sanderson cross-appeals and challenges: (1) the district court’s denial of his motion for judgment as a matter of law on St. Luke’s service mark infringement and unfair competition claims; (2) the sufficiency of the evidence to support the award of profits, punitive damages, and attorney’s fees to St. Luke’s; and (3) the number of attorney hours in the district court’s attorney’s fees award. After review and oral argument, we vacate and remand as to the district court’s determination of duplicative damages, but affirm as to all other issues raised in St. Luke’s appeal and Dr. Sanderson’s cross-appeal.

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Dream Games of Ariz., Inc. v. PC Onsite

Dream Games of Arizona (“Dream Games”) prevailed in its lawsuit against PC Onsite for copyright infringement of “Fast Action Bingo,” an electronic video bingo game, and was awarded statutory damages. We must decide whether (1) the district court properly allowed the jury to see unprotectable elements of the game without identifying the protectable elements; (2) the jury should have been allowed to hear evidence that Fast Action Bingo was operated illegally in two states; (3) statutory damages were available to Dream Games despite the illegal operation; and (4) the district court erred in dismissing claims against PC Onsite’s majority owner for lack of evidence of direct infringement. We have jurisdiction, 28 U.S.C. § 1291, and we affirm the district court’s rulings.

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Coquico, Inc. v. Rodríguez-Miranda

A famous fairy tale, of ancient vintage, tells of an ugly frog who, when befriended by a beautiful damsel, turns into a handsome prince, marries his rescuer, and (presumably) lives happily ever after. See Jacob Grimm & Wilhelm Grimm, The Frog-King, reprinted in 17 The Harvard Classics 47 (Charles W. Eliot ed., P.F. Collier & Son 1909). The coquí is a tree frog indigenous to Puerto Rico. Plaintiff-appellee Coquico, Inc. has not yet managed to turn the coquí into an imperial presence. It has, however, fashioned a popular stuffed-animal rendering of the coquí and, thus, turned the frog into dollars.

Coquico secured a copyright on its stuffed animal to protect this amphibian revenue source. When the defendants, Ángel Edgardo Rodríguez-Miranda (Rodríguez) and Identiko, Inc., began selling a competing coquí, Coquico sued for, among other things, copyright infringement. The district court preliminarily enjoined the defendants from infringing Coquico's copyright.

The defendants appeal. Concluding, as we do, that the district court did not abuse its discretion in granting the preliminary injunction, we affirm.

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Situation Management Systems v. ASP Consulting

The plaintiff consulting company, as part of its services to domestic and international clients, uses copyrighted training materials of several hundred pages geared toward teaching techniques for effective communication and negotiation within the workplace. It sued a competitor saying that the competitor had copied and used training materials substantially similar to plaintiff's in violation of the copyright laws.

This case concerns the proper application of two definitional criteria for what subject matter is eligible for copyright protection. The first is the originality requirement, see 17 U.S.C. § 102(a) ("Copyright protection subsists . . . in original works of authorship . . . ."), which is a constitutional prerequisite for copyright protection. See Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 351 (1991). The second is the statutory codification of the exclusion from copyright protection for processes and systems. See 17 U.S.C. § 102(b) ("In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."). Indeed, the statutory restriction in § 102(b) is a codification of "[t]he most fundamental axiom of copyright law . . . that '[n]o author may copyright his ideas or the facts he narrates.'" Feist, 499 U.S. at 344-45 (second alteration in original) (quoting Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 556 (1985)).

Here, the district court considered the plaintiff's works "largely noncopyrightable because they are devoted to describing a process or because they are not original." Situation Mgmt. Sys. v. ASP Consulting Group, 535 F. Supp. 2d 231, 240 (D. Mass. 2008). To reach this conclusion, the district court treated the originality requirement as functionally equivalent to a novelty standard. E.g., id. at 243 (finding that the plaintiff's work "does not constitute original expression because it is merely a summary of common-sense communication skills"). It read the statutory exclusion of processes and systems from copyright protection as barring protection for descriptions of processes and systems. E.g., id. at 240 (finding the plaintiff's works largely unprotected by copyright because "they focus on concepts and teach a noncopyrightable process"). The court also found the plaintiff's works noncopyrightable based upon its own subjective assessment of the works' creative worth. E.g., id. at 239 (describing SMS's works as "fodder for sardonic workplace humor" and as "aggressively vapid").

A brief from amici, an industry association along with another company that produces corporate training materials, argues that the district court's conclusions have implications far beyond the dispute between the parties to this case and put at risk the legitimate copyright expectations of the more than $100 billion management training industry. Indeed, amici argue that under the district court's approach, those in the training industry would have difficulty obtaining effective copyright protection for their works. We vacate the district court's finding of noninfringement and remand for further proceedings consistent with this opinion.

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Jones v. Blige

Plaintiffs-Appellants Leonard Jones and James E. White (collectively, “Plaintiffs”) sued Mary J. Blige, a singer, Asiah Lewis and Luchana M. Lodge, lyricists, and Universal-MCA Music Publishing, Inc. and Universal Music Group, Inc. (“Universal”) (collectively, “Defendants”) for copyright infringement. Plaintiffs claim that a song by Blige, “Family Affair,” infringed a song created by Plaintiffs, “Party Ain’t Crunk,” that Plaintiffs submitted to Universal on a demo compact disc (“CD”) prior to the release of Blige’s song. The district court granted summary judgment to all Defendants. Plaintiffs appeal that ruling, and Defendants Blige and Universal appeal the district court’s denial of their motion for attorneys’ fees. For the reasons set forth below, we AFFIRM the district court’s decisions.

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La Resolana Architects PA v. Reno, Inc.

Plaintiff-Appellant La Resolana Architects, PA, (“La Resolana”) brought an action against Reno, Inc., its president Lance Clay (collectively “Reno, Inc.”), Southwest Investment Trust, and its president Gary Plante (collectively “SWIT”) for copyright infringement, violation of the Lanham Act, and violation of the New Mexico Unfair Trade Practices Act (“UTPA”). After a bench trial, the district court entered judgment in favor of the defendants on all counts. We conclude that the district court did not clearly err in determining that La Resolana failed to establish copying as a matter of fact. Therefore, exercising jurisdiction pursuant to 28 U.S.C. § 1291, we AFFIRM.

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Walton v. US

A federal prisoner seeks to recover from the United States for copyright infringement involving the government’s use of calendars he created as part of his assigned duties in prison. We hold that 28 U.S.C. § 1498(b) (2008), the statute governing copyright infringement suits against the federal government, does not authorize his suit. We therefore affirm the judgment of the Court of Federal Claims that dismissed his complaint.

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