United States Court of Appeals

For the First Circuit

Nos. 02-1452

 02-1533

JOHN G. DANIELSON, INC.

Plaintiff, Appellee, Cross-Appellant,

v.

WINCHESTER-CONANT PROPERTIES, INC.;

THE WILLOWS AT WINCHESTER, LLC,

Defendants, Appellants, Cross-Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. William G. Young, Chief U.S. District Judge]

Before

Lynch, Circuit Judge,

Stahl, Senior Circuit Judge,

and Howard, Circuit Judge.

Gary S. Matsko, with whom Paul L. Feldman, Judith

Ashton, and Davis, Malm & D'Agostine, P.C. were on brief for

appellants and cross-appellees

Anthony E. Battelle, with whom Construction Law

Services, Charles R. Heuer, and Heuer Law Group were on brief for

appellee and cross-appellant.

March 6, 2003
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LYNCH, Circuit Judge. This copyright case involves

unusual facts, many dating to the mid-1980s, which greatly

influence its result. A real estate developer acquired a parcel of

land covered by a 30-year restrictive covenant to which a previous

owner had agreed. The covenant required that any residential

development conform with site plans submitted by the previous

owner. The new owner tried to modify these restrictions; when it

failed to do so it built a condominium subdivision that adhered to

the site plans in the covenant. The architectural firm that had

earlier designed those plans then sued for copyright infringement

and unfair competition, and eventually won a jury verdict and a

judgment in the district court for over $1.3 million -- essentially

all the profits from the now-complete condominium project.

The corporation that built the condominiums, WinchesterConant Properties, Inc. ("WCP"), appeals the dismissal of most of

its affirmative defenses. We affirm these dismissals, although in

some instances our reasons for affirmance differ significantly from

the district court's rationale. The plaintiff architectural firm,

John G. Danielson, Inc. ("Danielson") appeals some of the court's

rulings dismissing its unfair competition claims. We affirm these

rulings as well. Finally, both parties appeal aspects of the

damages award. WCP argues that the district court gave erroneous

instructions to the jury concerning the apportionment of profits

between the infringing design and other aspects of the development.
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We agree, vacate the damage award, and remand for a determination

of damages using the correct standards.

I. Background

A. Facts

In the mid-1980s, Louis Farese was co-trustee of a trust

that owned a 7.4 acre parcel of land in Winchester, Massachusetts

(the "site"). Danielson had worked on other projects for Farese,

and Farese hired Danielson to develop plans for the site.

Danielson in turn retained Donald Tellalian, of Tellalian

Associates Architects and Planners ("Tellalian Associates"), as a

subcontractor to assist it in its work on Farese's project.

Danielson, Tellalian Associates, and Farese consulted

with each other, Winchester town officials, and residents who lived

near the site to determine the best course for developing the land.

They settled on a condominium development, and showed some early

drafts of their plans to these stakeholders, some of whom suggested

various changes. This process culminated in the production of

seven drawings, dated June 11, 1987, depicting a 70-unit

condominium development with four residential buildings and a

"clubhouse" for community activities.

Four of these drawings are subjects of Danielson's

infringement claims. Three are site plans (labeled SP-1, SP-2, and

SP-3) which show the layout of the site from a bird's eye view,

including footprints of buildings, roads, parking, and green
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spaces; they bear the logos of both Danielson and Tellalian

Associates. The fourth is an unlabelled artist's rendering of the

buildings (designated A-3). None of these drawings had a copyright

notice on them.

At the time, the site was not zoned for residential

development and was covered by a restrictive covenant between a

previous owner and the Town of Winchester (the "Town"). The

condominium plan could only be completed if both the zoning and the

covenant were amended, and only the Winchester Town Meeting could

approve either change. On June 11, 1987 -- the same date that is

on the seven drawings -- the Winchester Planning Board voted to

recommend that the Town Meeting amend the site's zoning to allow

residential development. The Board also entered into a new

restrictive covenant with Farese, subject to Town Meeting approval.

This covenant would run with the land for 30 years, could be

altered only by a two-thirds vote of the Town Meeting, and required

that any residential development be in accordance with the seven

drawings. (These drawings are therefore referred to by the

litigants as the "covenant drawings.") At the Town Meeting on June

15, 1987, Tellalian showed several of the covenant drawings on an

overhead projector as part of his presentation; some were also

displayed on easels in the lobby. The Town Meeting followed the

Board's recommendations and approved both the rezoning and the
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replacement of the previous covenant with the restrictive covenant

signed by Farese and his co-trustee.

Having cleared this obstacle, Farese and Danielson signed

a written contract for the project on June 29, 1987. The document

is a standard form contract furnished by the American Institute of

Architects (AIA), with some modifications made by the parties. The

contract specifies that all plans remain Danielson's property, that

plans are not to be used on other projects or by other parties

without Danielson's written consent, and that "[s]ubmission or

distribution to meet official regulatory requirements . . . is not

to be construed as publication in derogation of the Architect's

rights."

As work continued, Danielson created numerous

construction drawings; four of these, labeled C-1, C-3, C-4, and L1, are also subjects of this litigation. These four drawings are

marked with several revision dates in 1987 and 1988; they depict

the site layout with some modifications and additions, particularly

engineering details. They all bear logos of both Danielson and

Tellalian Associates but lack copyright notice; two of them also

include the logo of another Danielson subcontractor, Medford

Engineering ("Medford").

Soon after construction began in 1988, Farese encountered

serious financial difficulties. The project was abandoned and lay
1 Pace later formed a subsidiary of WCP, The Willows at

Winchester, LLC, and transferred ownership of the site to that

entity, which Danielson also named as a defendant. In addition,

the condominiums were marketed by WCP under the brand name of an

affiliated company, Starter Sales. We refer to all of these

entities collectively as "WCP."

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dormant until 1994. Danielson has never collected over $226,000

that Farese owes it for work completed under the contract.

In 1993, Robert Pace became interested in buying and

developing the site. He formed WCP and acquired the site in a

foreclosure sale in April 1994.1 Over the next few months, WCP

considered a range of possible development options, including

townhouses, single-family homes, and housing for the elderly.

Several versions of a condominium plan like the one Farese had

pursued were also "on the table." Representatives of WCP met three

times in mid-1994 with Edmond Danielson, by then the only full-time

architect at the Danielson firm, to discuss ideas for the site. At

Edmond Danielson's suggestion, Donald Tellalian joined the second

and third of these meetings. The WCP representatives brought the

disputed drawings to these meetings and the participants looked at

them, but WCP expressed concern that Farese's plan would not be

profitable. WCP commissioned Danielson and Tellalian Associates to

draft a proposed design for the elderly housing concept. By August

1994, WCP chose to pursue a townhouse plan designed by another

architect instead.
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WCP did not have the same luck as Farese in removing

preexisting covenants, however. After failing in several attempts

to persuade the Town to alter the covenant established with Farese,

WCP decided in mid-1995 to develop the site according to the

covenant specifications after all. WCP provided its architects and

engineers (including some, like Medford, who had worked for

Danielson on the earlier project) with construction drawings that

are the subject of this lawsuit. These agents removed the

Danielson and Tellalian Associates logos and produced plans very

similar to the drawings Danielson claims were infringed. These

copied drawings were in turn used to obtain permit approval from

the town in December 1995. WCP included a simplified site plan in

a sales brochure, and also placed a copy of the artist's rendering,

covenant drawing A-3, on its signs. Construction began on the

development, called "The Willows at Winchester," in 1996, and was

finished in 2000.

The parties disagree about some aspects of their

communication at this juncture, but clearly they stopped doing

business together after the elderly housing design was rejected in

August 1994. Sometime in late 1995 or early 1996, a representative

of WCP telephoned Donald Tellalian and told him that the company

now planned to use the site layout embodied in the covenant.

Neither WCP nor Tellalian informed Danielson; WCP says it thought

that Tellalian spoke for Danielson. In any event, Edmond Danielson
2 The authorship and ownership of copyright in the plans

had been an issue at earlier stages in this litigation, but WCP

foregoes these arguments on appeal.

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says he was unaware of WCP's intent to use the old design until

August 1997, when one of the firm's former employees happened to

drive past the site, noticed the buildings under construction, and

informed him. Danielson swiftly contacted attorneys, who sent a

letter to WCP stating Danielson's claim. Danielson also registered

the covenant drawings and construction drawings for copyright in

1999. Finally, Danielson requested and received from Tellalian

written statements indicating that Tellalian Associates made no

claim on the copyright interests in the drawings.2

B. Procedural History

After settlement discussions yielded no fruit, Danielson

filed a complaint in the U.S. District Court for the District of

Massachusetts in May 2000. The suit asserted a claim of copyright

infringement under 17 U.S.C. § 501 (2000). It also asserted three

unfair competition claims: conversion under state law; false

designation of origin under the Lanham Act, 15 U.S.C. § 1125(a)

(2000); and unfair and deceptive trade practices under Mass. Gen.

Laws ch. 93A (2001).

The parties both submitted summary judgment motions. WCP

sought dismissal of the case. Danielson sought summary judgment as

to liability on three of its claims, but not as to the conversion

claim or damages issues. On February 8, 2002, shortly before
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trial, the district court issued an order disposing of these

motions and shaping the case for trial. The district court later

issued a published opinion elaborating on its numerous holdings.

John G. Danielson, Inc. v. Winchester-Conant Props., Inc., 186 F.

Supp. 2d 1 (D. Mass. 2002).

In these pretrial rulings, the court held that there was

no genuine factual dispute that WCP had infringed Danielson's

copyright. Id. at 4, 14. It dismissed five of WCP's affirmative

defenses, which asserted that Danielson's copyright was invalid

because of: (1) publication without statutorily required notice,

(2) disclosure in the covenant which placed the plans in the public

domain, (3) implied license, (4) merger doctrine, and (5)

abandonment. Id. at 14-24. The court also ruled that Danielson's

state-law unfair trade practices claim was preempted by federal

copyright law. Id. at 29. The other motions were denied.

The trial lasted through six days of testimony from

February 19-27, 2002. After plaintiff rested, WCP moved for

directed verdict; the court granted the motion as to Danielson's

conversion claim, but allowed the copyright and false designation

of origin claims to go forward. At the close of all the evidence,

the district court rejected renewed motions for directed verdict on

these matters, but granted Danielson's motion for directed verdict

against WCP's estoppel and waiver defenses.
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Taken together, these rulings considerably narrowed the

questions left for the jury to decide. Two issues often at the

heart of copyright cases, copyrightability and infringement, were

already determined as a matter of law. On the copyright claim, the

jury considered only the two remaining affirmative defenses,

concerning the statute of limitations and coauthorship. The jury

found for Danielson on both of these defenses and neither of these

verdicts is appealed. It awarded damages on the copyright claim of

$1,464,950. The jury also found that Danielson's Lanham Act claim

of false designation of origin was within the statute of

limitations and that WCP was liable under that claim for $120,000

in damages. The jury's total damages award represented essentially

all of the profit WCP made from the development.

The district court disposed of post-trial motions from

the bench at a hearing on March 27, 2002. It denied WCP's motion

for a new trial under Fed. R. Civ. P. 59. The court granted WCP's

renewed motion for judgment as a matter of law under Fed. R. Civ.

P. 59(b) as to the Lanham Act claim, however, because it held there

was no basis in the evidence for the $120,000 in damages the jury

had awarded. The court also reduced the damages under the

copyright claim by $120,000, stating from the bench that it was

"clear to the Court that the $120,000 was simply added onto the
3 As an alternative, in the event that the decision to

reduce the jury's copyright damages award were later reversed, the

district court also ordered a remittitur of the same amount.

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base damages the plaintiff otherwise is entitled to."3 Finally,

the court dealt with Danielson's petition for attorneys' fees,

prejudgment interest, and costs. Danielson was not entitled to

attorneys' fees under the Copyright Act because the drawings were

not registered at the time of infringement. 17 U.S.C. § 412.

Because the Lanham Act verdict was vacated, the district court

ruled that Danielson could not get attorneys' fees from that source

either, but entered a provisional award of fees in case the Lanham

Act dismissal were to be reversed on appeal. Finally, the court

denied prejudgment interest and awarded costs. Judgment for

Danielson was then entered in the amount of $1,344,950. These

cross-appeals followed.

WCP appeals the pretrial dismissal on summary judgment of

four of its affirmative defenses, as well as the directed verdict

against its estoppel and waiver defenses during trial. WCP also

pursues its objections to the jury instructions concerning the

calculation of damages and to the exclusion of certain expert

testimony concerning damages that it attempted to offer at trial.

Finally, WCP appeals the denial of its motion for a new trial.

Danielson appeals the dismissal of its unfair trade practices claim

and its Lanham Act false designation of origin claim, as well as

the denial of attorneys' fees and prejudgment interest.
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II. Affirmative Defenses

Because copyrightability and infringement are not in

serious dispute, WCP's only real hope to avoid liability lies in

its affirmative defenses. It does not appeal those affirmative

defenses rejected by the jury, or its abandonment defense. It does

appeal four affirmative defenses dismissed on summary judgment. We

review such rulings de novo, including when summary judgment is

granted, as here, on cross-motions. Segrets, Inc. v. Gillman

Knitwear Co., 207 F.3d 56, 61 (1st Cir. 2000). In addition, WCP

appeals the dismissal of its estoppel and waiver defenses during

trial. We review this grant of a motion for judgment as a matter

of law under Rule 50(a) de novo, giving inferences to the nonmovant

and affirming only if no reasonable jury could have found in the

nonmovant's favor. Espada v. Lugo, 312 F.3d 1, 2 (1st Cir. 2002).

A. Publication

WCP first argues that Danielson's handling of the

covenant drawings during efforts to secure the zoning change in

1987 constituted their "publication," a term of art under copyright

law. WCP argues that, because copyright law at that time required

notice to accompany publication, and the drawings lacked notice,

Danielson forfeited any copyright it had.

We emphasize at the outset that the relevant events,

which occurred in 1987, fall within a short period between two

major revisions of applicable federal copyright law. The Copyright
4 The 1976 Act also reduced the importance of publication.

Previously, the publication of a work had marked the point at which

its federal copyright protection began, but after the 1976 Act,

federal copyright attached at the moment a work was first created.

See 17 U.S.C. § 301(a) (setting preemption at point when work is

"fixed in a tangible medium"). Copyright attached to the drawings

at issue here when they were first drafted -- in the parlance of

copyright, when they were first "fixed" on paper. See id. at §

101.

5 This case is also not covered by the Architectural Works

Copyright Protection Act of 1990, because the drawings were created

before the statute's effective date. See Pub. L. No. 101-650, §

706, 104 Stat. 5089, 5134 (1990).

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Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 ("1976 Act"), which

became effective on January 1, 1978, included a statutory

definition of publication for the first time.4 See 17 U.S.C. §

101. The Berne Convention Implementation Act, Pub. L. No. 100-568,

102 Stat. 2853 (1988) ("Berne Act"), which became effective on

March 1, 1989, made notice optional rather than mandatory, while

retaining incentives to encourage notice. See 17 U.S.C. § 401.

The overlap of the 1976 Act's publication definition (which remains

in force today) and mandatory notice (now optional) lasted only for

the period between these enactments. If the same facts arose

today, they would not present a significant issue.5

The law in 1987 required that, when works were published,

they include formal notice or lose their copyright. See 17 U.S.C.

§ 401(a) (1982) (amended 1988) ("[A] notice of copyright shall be

placed on all publicly distributed copies"). Sufficient notice

required three elements: a declaration of copyright such as the
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"©" symbol, the year of publication, and an identification of the

copyright holder. Id. at § 401(b). It is undisputed that the

drawings at issue here did not satisfy these requirements.

Although the 1976 Act added some provisions to cure or disregard

the omission of notice at the time of publication, see id. at §§

405-406, it is also undisputed that none of them applies to this

case. See generally Donald Frederick Evans & Assocs. v. Cont'l

Homes, Inc., 785 F.2d 897, 905-12 (11th Cir. 1986) (analyzing

curative provisions from 1976 Act). Congress recognized in 1976

that the penalties for publishing without notice might be unduly

harsh. See H.R. Rep. No. 94-1476, at 143-44 (1976) [hereinafter

"House Report"] ("One of the strongest arguments for revision of

the present statute has been the need to avoid the arbitrary and

unjust forfeitures now resulting from unintentional or relatively

unimportant omissions or errors in the copyright notice."). But it

was not until passage of the Berne Act that this requirement was

eliminated.

Because it is clear that the drawings did not satisfy the

applicable notice requirements, WCP's argument depends on whether

there was a "publication" of the drawings so that notice was

mandated. The statutory definition of publication reads in full:

"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
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publication. A public performance or display of a work

does not of itself constitute publication.

17 U.S.C. § 101.

WCP points to several uses of the covenant drawings to

support its argument that they were published under this

definition. The drawings were shown to neighborhood groups and

town officials during the planning process. At the Town Meeting,

they were displayed on easels and projected onto a screen. The

Town Meeting was videotaped, and the tape was broadcast on local

cable television and placed in the Winchester Public Library. The

plans were filed with the Town as exhibits to the covenant, and

could be copied from those files by anyone. In addition, some

drawings were later shared with Danielson's subcontractors.

The district court granted summary judgment against this

defense by relying on an aspect of the doctrine of "limited

publication." See Danielson, 186 F. Supp. 2d at 15-18. The

statutory definition of publication quoted above "in general

constitutes a codification of the definition evolved by case law"

before the 1976 Act. 1 M.B. Nimmer & D. Nimmer, Nimmer on

Copyright § 4.04, at 4-20 (2001) [hereinafter "Nimmer"]. That case

law includes judicially crafted exceptions for limited publication:

restricted distribution of the work that does not qualify as

publication or trigger the notice requirement. Limited publication

"occurs when tangible copies of the work are distributed, but to a

limited class of persons and for a limited purpose." Burke v. NBC,
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598 F.2d 688, 692 (1st Cir. 1979) (explaining and applying law

before 1976 Act) (citing White v. Kimmel, 193 F.2d 744, 746-47 (9th

Cir. 1952)).

Numerous cases have applied the limited publication

exception to the submission of architectural plans to municipal

authorities for approval, either because the law required this

submission for a limited purpose or because doing so did not

constitute a distribution. See, e.g., Codespoti & Assocs. v.

Bartlett, 51 F. Supp. 2d 125, 128 (D. Conn. 1999); East/West

Venture v. Wurmfeld Assocs., 722 F. Supp. 1064, 1066 (S.D.N.Y.

1989); Edgar H. Wood Assocs. v. Skene, 197 N.E.2d 886, 893-94

(Mass. 1964) (common-law copyright); see also 1 Nimmer, supra, §

4.10, at 4-52 (under 1976 Act, "placing a work in a public file .

. . clearly does not constitute an act of publication"). But see

Certified Eng'g, Inc. v. First Fid. Bank, 849 F. Supp. 318, 323-24

(D.N.J. 1994) (drawings for subdivision published by submission to

authorities, but holding made in context of denying preliminary

injunction). Similarly, the circulation of plans to contractors

for purposes of working on the project has been found a limited

publication. See, e.g., Kunycia v. Melville Realty Co., 755 F.

Supp. 566, 574 (S.D.N.Y. 1990).

At least some of the activities that WCP characterizes as

publication are covered by these limited publication exceptions.

For example, once the covenant was approved and submitted to the
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Town, state law required that the drawings be available as public

records. See Mass. Gen. Laws ch. 66, § 10(a) (2001); Hull Mun.

Lighting Plant v. Mass. Mun. Wholesale Elec. Co., 609 N.E.2d 460,

463-64 (Mass. 1993) (broad definition of public records subject to

disclosure). The exception also covers copies provided to

Danielson's subcontractors or consultants, including Medford, for

work on the project.

Nonetheless, other activities went beyond such limited

groups and limited purposes. The neighborhood meetings and the

Town Meeting were open to the general public, and the broadcast and

videotape of the Town Meeting could also be viewed by a broad group

of people.

The district court responded to this problem by

erroneously extending the boundaries of the exception. It pointed

out that this access to the plans was "helpful" in obtaining

approval of the zoning change, Danielson, 186 F. Supp. 2d at 16

n.2, and "in furtherance of the Town's obligation under state law

to solicit input from the community and make findings regarding the

desirability" of the project, id. at 17. However, the cases cited

by the court concerned putative publications that were required by

law or were otherwise made for narrow purposes. Extending the

exception to everything that is "helpful" in lobbying for municipal

approval of a zoning change, including dissemination to the general

public, effectively removes the "limited" from limited publication.
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Nevertheless, this court may affirm a district court's

grant of summary judgment on any basis that is manifest in the

record. See Burns v. State Police Ass'n, 230 F.3d 8, 9 (1st Cir.

2000). Here, the district court's expansion of the limited

publication doctrine was unnecessary to its result, because the

record indicates that the remaining alleged publications were not

covered by the statutory definition. Rather, Danielson merely

"displayed" the drawings within the meaning of the Act. The

Copyright Act states outright, "A public performance or display of

a work does not of itself constitute publication." 17 U.S.C. §

101.

WCP's own submission of undisputed facts in support of

summary judgment demonstrates that the uses of the drawings at the

neighborhood meeting and the Town Meeting do not qualify as

publications:

In 1986 and early 1987, the Covenant Drawings and

earlier versions thereof were shown to many individuals

and groups by Danielson and Tellalian. They were shown

to neighbors of the Site at several neighborhood meetings

at which representatives of Tellalian and/or Danielson

were present. They were shown to Farese as well. . . .

Numerous meetings were also held with the Town of

Winchester Planning Board by representatives of Farese,

Danielson, and Tellalian. Copies of the Covenant

Drawings and earlier versions thereof were shown to

Planning Board members. . . .

Four of the seven Covenant Drawings were shown to

all present [at the Town Meeting] on a large screen

placed at the front of [the] meeting by D. Tellalian. .

. . [The] drawings were also all placed in public view

on easels in the lobby of the building. 
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(Emphasis added). In addition, one of Danielson's architects said

at his deposition that the plans were only shown, not distributed.

When asked whether those in attendance at neighborhood meetings

could have copied the drawings they were shown, he replied "No. .

. . They were in our possession. They would have to have

permission to copy them."

At most, Danielson or Tellalian "showed" plans to others;

that did not constitute publication under the explicit terms of the

statute. "[A] sine qua non of publication should be the

acquisition by members of the public of a possessory interest in

tangible copies of the work in question." 1 Nimmer, supra, § 4.07,

at 4-42.

The broadcast of the Town Meeting on local cable

television does not constitute publication under the definition in

the 1976 Act either. The definition "makes plain that any form

[of] dissemination in which a material object does not change hands

-- performances or displays on television, for example -- is not a

publication no matter how many people are exposed to the work."

House Report at 138; see Burke, 598 F.2d at 693 ("Publication did

not occur merely because the film was shown [on television] to the

general public."); 1 P. Goldstein, Copyright § 3.3, at 3:31 (2d ed.

1996) (mere broadcast probably not publication, even if home

videotaping would be possible).
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That leaves the fact that the public library held a

videotape of the meeting that patrons could borrow. After viewing

a copy of this video provided by WCP, we are not confident that the

often unfocused image of a blurry projection on a screen in the

high school auditorium actually qualifies as a publication of the

covenant drawings themselves. We put that factual question to one

side, however, because of the absence of any evidence that

Danielson or Tellalian knew that the tape of the Town Meeting would

be loaned at the library, rather than merely broadcast on local

cable television. Publication requires the consent of the

copyright owner. See 1 Nimmer, supra, § 4.04, at 4-20 to 4-21 &

n.8; Goldstein, supra, § 3.3.1, at 3:33 & nn. 19-20. While this

condition is implicit in the publication definition, it is

reiterated explicitly in the notice requirement. See 17 U.S.C. §

401(a) (requiring notice on works published "by authority of the

copyright owner"). Unlike the other actions alleged to be

publication, WCP has not shown that this one was authorized by

Danielson.

On appeal, WCP also argues that the requirements of the

definition of "publication" are fulfilled because it includes the

"offering to distribute copies . . . to a group of persons for

purposes of . . . public display." 17 U.S.C. § 101. According to

this argument, Danielson offered the covenant drawings to Farese

and his associates, and they in turn displayed them. The facts in
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the record do not support this interpretation either. Only

architects working for Danielson or for Tellalian Associates

displayed the plans; there is no indication that Farese or his

agents did so instead. Indeed, WCP's summary judgment submission

noted the plans were "shown to Farese," suggesting he may not even

have possessed copies of them until later.

Congress has provided the courts with an explicit

definition of publication in the 1976 Act that seeks to prevent

much of the litigation and confusion that had previously surrounded

the undefined term. The facts here allow us to apply that

definition without venturing to create any new doctrine about the

murky boundaries of limited publication.

B. Covenant Drawings as "Laws"

WCP next argues that the covenant drawings, by virtue of

their inclusion in the restrictive covenant approved at the Town

Meeting, have become "laws" which are in the public domain and

uncopyrightable.

It is well-established that judicial decisions and

statutes are in the public domain. Bldg. Officials & Code Admin.

Int'l, Inc. v. Code Tech., Inc. ("BOCA"), 628 F.2d 730, 733-34 (1st

Cir. 1980) (reviewing case law); see Banks v. Manchester, 128 U.S.

244 (1888) (judicial opinions are in public domain); Wheaton v.

Peters, 33 U.S. 591 (1834) (judicial opinions are not

copyrightable). This straightforward general rule has proven
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difficult to apply when the material in question does not fall

neatly into the categories of statutes or judicial opinions. A

number of appellate courts have reached arguably inconsistent

results in such cases. See Veeck v. S. Bldg. Code Cong. Int'l,

Inc., 293 F.3d 791, 793 (5th Cir. 2002) (en banc) (model code

enters public domain when legislatively adopted as law of a

jurisdiction), petition for cert. filed, Sept. 4, 2002 (No. 02-

355); Practice Mgmt. Info. Corp. v. Am. Med. Ass'n, 121 F.3d 516,

518-20 (9th Cir. 1997) (incorporation of classification system for

medical procedures in Medicare and Medicaid regulations does not

make them uncopyrightable); CCC Info. Servs., Inc. v. Maclean

Hunter Mkt. Reports, Inc., 44 F.3d 61, 73-74 (2d Cir. 1994)

(incorporation of used-car valuations in insurance statutes and

regulations does not make them uncopyrightable).

The First Circuit faced such a question when it vacated

a preliminary injunction against printing state regulations; the

regulations incorporated material written by a private party, which

was purportedly copyrighted and licensed to the state. BOCA, 628

F.2d at 736. While the court leaned strongly toward a conclusion

that the copyright was invalid, it emphasized just as strongly that

it declined to reach a definitive conclusion. Id. BOCA did not

resolve the issue and this court has not done so since.

WCP cites BOCA and urges us to adopt the rule suggested

there and apply it to the covenant drawings. The district court,
-23-

after noting that BOCA was not binding on it, Danielson, 186 F.

Supp. 2d at 21, adopted the opposite rule. Id. at 23 ("[O]therwise

copyrightable works . . . do not lose copyright protection when

they are adopted by government bodies or incorporated by reference

into public enactments."). We reject both courses of action. We

do not need to consider the broad question we reserved in BOCA,

because the facts here do not present it.

The restrictive covenant is distinct from the zoning law.

The Town Meeting debated and voted on two different measures

concerning the site, which had two different effects. The first

vote changed the zoning law so that the site was zoned for

residential development. We need not consider here whether or not

the zoning law is within the public domain, such that any potential

intellectual property rights to its content would be overridden,

because that law simply sets parameters for the development

permissible in different zones, and designates the site as

belonging to a particular zone. See generally 18A D.A. Randall &

D.E. Franklin, Massachusetts Practice: Municipal Law & Practice,

chs. 17-18 (4th ed. 1993).

The second vote at the Town Meeting approved the

restrictive covenant, which is nothing more than an agreement

between the Town of Winchester and Farese (and his successors in

ownership) concerning the site. A restrictive covenant is "[a]

private agreement, usu[ally] in a deed or lease, that restricts the
-24-

use or occupancy of real property." Black's Law Dictionary 371

(7th ed. 1999) (emphasis added); see Randall & Franklin, supra, §

570, at 18 (change in overall zoning law does not remove conditions

of covenant recorded in deed for particular land). The restrictive

covenant in this case displays the hallmarks of a private contract.

It notes consideration given to Farese and his co-trustee by the

Town and includes notarized signatures of both the trustees and

Town officials. It is this document which incorporates, by

reference, the seven drawings that Danielson provided to Farese.

Farese could just as easily have entered into an

agreement with the site's neighbors to limit development; its

embodiment in a restrictive covenant, recorded as part of the deed,

would not convert such a private contract or easement into a "law"

and thrust it into the public domain. It would not bind the public

at large, but only the parties and their successors in interest.

The fact that the Town was a party to the restrictive covenant here

does not change the analysis.

WCP argues that the Planning Board and Town Meeting

changed the zoning only because they knew the covenant would be

enforced, and that adoption of the two "in tandem" makes them part

of the same "legislative scheme." The logical extension of this

argument, however, is that any undertakings on which lawmakers rely

in passing a statute would become part of the "legislative scheme"

and the public domain. If Farese and the neighbors had entered
-25-

into a private covenant, and the Planning Board and Town Meeting

changed the zoning only because they knew of this contract and it

satisfied their concerns about the site, there would be no argument

that the covenant was thereby part of the public domain.

Similarly, references to the covenant drawings or their features in

the Planning Board's decision and speeches at the Town Meeting do

not thrust the drawings themselves into the public domain, any more

than quoting a poem on the Senate floor would strip the poet's

copyright.

There are compelling arguments on both sides of the

question we reserved in BOCA. They implicate the proper scope of

the public domain and the best means to encourage private

involvement and expertise in lawmaking. But contracts entered into

by government entities do not raise these weighty issues, and we

need not resolve the question we left open in BOCA in order to rule

on this case. Because the covenant drawings were not incorporated

into any generally applicable laws, we affirm the district court's

grant of summary judgment against this defense.

C. Implied License

Usually transfers of copyright must be made in writing,

17 U.S.C. § 204(a), but this requirement does not apply to

nonexclusive licenses where ownership of the copyright is not

transferred, see id. at § 101. A copyright owner may grant such

nonexclusive licenses orally, or they may be implied from conduct
-26-

which indicates the owner's intent to allow a licensee to use the

work. See Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d

1147, 1167 n.35 (1st Cir. 1994); 3 Nimmer, supra, § 10.03(A)(7), at

10-42. Uses of the copyrighted work that stay within the scope of

a nonexclusive license are immunized from infringement suits. See

Graham v. James, 144 F.3d 229, 236 (2d Cir. 1998).

The burden of proving the existence of such a license is

on the party claiming its protection, the licensee. Bourne v. Walt

Disney Co., 68 F.3d 621, 631 (2d Cir. 1995). Implied licenses are

found only in narrow circumstances. See SmithKline Beecham

Consumer Healthcare, L.P. v. Watson Pharms., Inc., 211 F.3d 21, 25

(2d Cir. 2000) (citing Effects Assocs., Inc. v. Cohen, 908 F.2d

555, 558 (9th Cir. 1990)). WCP argues that it has met this burden

and shown that Danielson granted a nonexclusive license to future

owners of the site to use the disputed drawings. It did so, argues

WCP, by permitting the incorporation of the covenant drawings in a

restrictive covenant running with the land.

At least four other circuits have resolved cases in which

an architect sued for copyright infringement and the defendant

answered that it had a nonexclusive license to use the architect's

plans. See Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284 F.3d

505, 514-16 (4th Cir. 2002); Foad Consulting Group v. Musil Govan

Azzalino, 270 F.3d 821, 828-32 (9th Cir. 2001); Johnson v. Jones,

149 F.3d 494, 500-02 (6th Cir. 1998); I.A.E., Inc. v. Shaver, 74
6 Foad Consulting bases its very similar framework on

principles of California contract law, because it holds that state

law governed the interpretation of the contract there. 270 F.3d at

826-28. The author of Effects Associates, writing separately,

criticizes this rationale. Id. at 832-34 (Kozinski, J.,

concurring). The circumstances of that case are different from the

one at hand, and we need not delve into this aspect of the

analysis.

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F.3d 768, 775-76 (7th Cir. 1996). These cases reached different

results on their individual facts: Foad Consulting and I.A.E.

found licenses while Nelson-Salabes and Johnson did not. But they

all applied a similar analytical framework, and we will follow

their lead.

The touchstone for finding an implied license, according

to this framework, is intent. See Nelson-Salabes, 284 F.3d at 515

(calling intent "determinative question"); Johnson, 149 F.3d at 502

("Without intent, there can be no implied license."); see also Data

Gen., 36 F.3d at 1167 n.35 (license is found from copyright owner's

grant of "permission to use"). Two of the cases begin their

analysis with a three-part test originally derived from Effects

Associates, 908 F.2d at 558-59, which requires that the licensee

request the creation of the work, the licensor create and deliver

the work, and the licensor intend that the licensee distribute the

work. See Nelson-Salabes, 284 F.3d at 514-15; I.A.E., 74 F.3d at

776.6 But they quickly pass over the "request" and "delivery"

issues to focus on manifestations of the architects' intent that

plans may be used on a project without their involvement. See
-28-

Nelson-Salabes, 284 F.3d at 515; Johnson, 149 F.3d at 501; I.A.E.,

74 F.3d at 776. We will do the same here, while noting that it was

actually Farese, not WCP, who requested the work and received

delivery of it.

The most recent of the four cases distilled its

predecessors to yield this succinct summary:

Our analysis of these decisions . . . suggests that the

existence of an implied nonexclusive license in a

particular situation turns on at least three factors: (1)

whether the parties were engaged in a short-term discrete

transaction as opposed to an ongoing relationship; (2)

whether the creator utilized written contracts, such as

the standard AIA contract, providing that copyrighted

materials could only be used with the creator's future

involvement or express permission; and (3) whether the

creator's conduct during the creation or delivery of the

copyrighted material indicated that use of the material

without the creator's involvement or consent was

permissible.

Nelson-Salabes, 284 F.3d at 516. This is not an exhaustive list of

factors to consider, but it provides useful guidance in determining

the crucial question of intent.

Here, the first two considerations point away from a

license, because they both suggest Danielson's intent to remain

involved in the job. Danielson was in a long-term relationship

with Farese working on development of the site, not a one-time

arrangement, unlike the architects in I.A.E. and Foad Consulting.

See Nelson-Salabes, 284 F.3d at 516 (comparing cases). This intent

was also manifested by the standard AIA contract signed by Farese

and Danielson, which specifically provided that plans "shall not be
7 Farese had previously paid Danielson for services

rendered through June 5, 1987. Activity from that date until July

3, including completion of the covenant drawings on June 11, was

billed in the first invoice under the contract, dated July 15,

1987. The contract describes the schematic design phase, which

amounted to 15 percent of the contract price, as including site

plans like the covenant drawings.

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used . . . for other projects, for additions to this Project, or

for completion of this Project by others . . . except by agreement

in writing and with appropriate compensation." See Nelson-Salabes,

284 F.3d at 516 (architect asked client to sign AIA contract);

Johnson, 149 F.3d at 500 (same). While this contract was signed

after the date on the covenant drawings, Danielson says that the

contract retroactively included the work done on those drawings as

part of its schematic design phase.7 In any event, we are looking

to the contract for evidence about overall intent, not for an

interpretation of its binding terms -- WCP was not a party to the

contract. See Foad Consulting, 270 F.3d at 834 (Kozinski, J.,

concurring) (noting that contract can be evidence of a relationship

giving rise to implied copyright license, even if the license is

not derived from the contract itself); Johnson, 149 F.3d at 500

(using unsigned contract as evidence of intent). That evidence

strongly suggests that Danielson granted no permission to others to

use the plans.

To evaluate the third, more general consideration, these

cases also look to whether the supposed infringer obtained the

plans directly from the supposed licensor, which would suggest
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permission to use them. See, e.g., Johnson, 149 F.3d at 501;

I.A.E., 74 F.3d at 777. WCP got its copies of the plans from the

foreclosure sale and from Medford, not from Danielson. See

Danielson, 186 F. Supp. 2d at 20.

Danielson's acquiescence to the use of its plans as the

basis for the covenant may indeed point in the other direction, as

WCP argues. It could be seen as evidence that others were allowed

to use the plans, although it is also possible that Danielson never

contemplated the risk that Farese would fail to complete the

development himself. Whatever its import, we do not think this one

fact outweighs all the other indications that no implied license

was intended. See Nelson-Salabes, 284 F.3d at 516 (weighing

factors pointing in both directions and concluding that no license

was granted). Furthermore, giving undue weight to the filing of

plans with the local government could vitiate our earlier holding,

and the majority position among courts, that such filing alone does

not undermine the copyright.

WCP also argues that intent of the grantor is the wrong

standard for determining the existence of an implied nonexclusive

license. This argument misunderstands the intent benchmark as a

subjective inquiry into the mind of the putative licensor. Rather,

it is an objective inquiry into facts that manifest such

contractual intent. See I.A.E., 74 F.3d at 777 (Relevant intent

"is not the parties' subjective intent but their outward
-31-

manifestation of it"). This is a typical task in contract law.

See, e.g., 1 E.A. Farnsworth, Farnsworth on Contracts § 3.13 (2d

ed. 1998) (inferring contractual acceptance from conduct); id. at

§ 8.5 (inferring waiver of condition from conduct). If an

architect worked on a short-term assignment with no outward signs

of expecting to continue involvement with the larger project, and

handed over the requested plans to a client without a contract or

other limitations, it would not matter if he or she harbored

private hopes of working on the next phase of the project. See

I.A.E., 74 F.3d at 777. But that is not what happened here.

Finally, WCP's suggestion that the appropriate standard

is the effect of the architect's behavior on the subjective

perception of the supposed licensee has no basis. It conflates the

affirmative defense of implied license with the affirmative defense

of estoppel, which we consider below. And the argument that our

refusal to find a license would restrain alienation is misplaced;

it is the covenant itself, not Danielson's copyright, that

encumbered the site, and WCP does not challenge the validity of the

covenant.

D. Merger

It is axiomatic that, while "[n]o author may copyright

his ideas or the facts he narrates," an author may copyright the

expression of those ideas. Harper & Row Publishers, Inc. v. Nation

Enters., 471 U.S. 539, 556 (1985); see 17 U.S.C. § 102(b).
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Sometimes, however, an idea can be expressed in so few ways that it

"merges" with its expression, and the expression become

uncopyrightable.

When the uncopyrightable subject matter is very narrow,

so that the topic necessarily requires, if not only one

form of expression, at best only a limited number . . .

the subject matter would be appropriated by permitting

the copyrighting of its expression. We cannot recognize

copyright as a game of chess in which the public can be

checkmated.

Morrissey v. Procter & Gamble Co., 379 F.2d 675, 678-79 (1st Cir.

1967) (internal quotations and citations omitted); see Concrete

Mach. Co. v. Classic Lawn Ornaments Inc., 843 F.2d 600, 606-07 (1st

Cir. 1988). For example, we have held that this doctrine of merger

foreclosed copyright on rules for a sweepstakes contest which could

be effectively communicated using only a limited number of verbal

formulations, Morrissey, 379 F.2d at 679, and on pictures of fruits

and flowers used on labels to indicate the scent of candles, Yankee

Candle Co. v. Bridgewater Candle Co., 259 F.3d 25, 35 (1st Cir.

2001).

WCP argues that the restrictive covenant means there is

only one way to build on the land, and that the covenant drawings

merge with that idea. This contention distorts the purpose of the

merger doctrine. The doctrine aims to prevent the monopolization

of facts or ideas that are present in nature; where ownership of

the expression would remove such facts or ideas from the public

domain, the doctrine disallows copyright. See Yankee Candle, 259
-33-

F.3d at 36 ("In general, the merger doctrine is most applicable

where the idea and the expression are of items found in nature, or

are found commonly in everyday life."). Here, the restrictive

covenant made one method of developing the site legally easier and

cheaper than others, but it did not transform the covenant drawings

into the only physically possible means to express ideas for such

development. WCP's pursuit of several alternative designs

demonstrates the availability of alternatives here -- as does an

expert report proffered by WCP on damages issues, wherein WCP's

expert says an appropriate layout for the site "can be achieved in

many different ways."

WCP relies on Kern River Gas Transmission Co. v. Coastal

Corp., 899 F.2d 1458 (5th Cir 1990), to support its position. In

that case, regulators had given environmental approval to a

proposed 1,000 mile route for a gas pipeline. The company that had

plotted the route claimed copyright over documents depicting it;

these were merely publicly available maps on which the company had

added a line tracing the route. The court denied copyright

protection based on merger. In WCP's view, Kern River based its

merger finding on the fact that regulatory approval limited the

available options for building a pipeline, and the map merged with

the "idea" of an approved route. If that were the only reasoning

in the case, we are not sure the decision would be correct.

However, we think the regulatory approval was, at most, a secondary
-34-

consideration; merger applied, more simply, because the map

markings were "the only effective way to convey the idea of the

proposed location of a pipeline." Id. at 1464. Even if there had

been no regulatory decision in the case, it should have come out

the same way, because the underlying idea was no more than a linked

series of geographical points found in nature, and a line on a map

the only practical method to express that idea. The covenant

drawings, in contrast, express just one of many possible detailed

and complex visions for developing the site. Kern River is

inapposite.

E. Estoppel and Waiver

WCP argues that Danielson is estopped from an

infringement action because it participated in the three 1994

meetings where WCP displayed some of the drawings and indicated

that it might pursue a similar plan for the site. Principles of

equitable estoppel from other areas of the law apply to copyright

actions. See Hampton v. Paramount Pictures Corp., 279 F.2d 100,

104 (9th Cir. 1960); Cherry River Music Co. v. Simitar Entm't,

Inc., 38 F. Supp. 2d 310, 318 (S.D.N.Y. 1999). The district court

granted judgment as a matter of law against this affirmative

defense at the close of evidence at the trial, because it found the

evidence insufficient to give the issue to the jury.

The first element required to show estoppel is that the

plaintiff knew of the defendant's potential infringement. See
-35-

Plumley v. S. Container, Inc., 303 F.3d 364, 374 (1st Cir. 2002)

(party to be estopped must "know the facts"); Hampton, 279 F.2d at

104 (same, applied to copyright). Danielson argues that the

meetings established only that WCP possessed copies of the plans

and considered possibly using them. WCP appeared more enthusiastic

about other alternatives, however, and pursued them for a year.

Indeed, a WCP employee who attended the meetings testified at trial

that WCP expressed serious reservations about the economic

viability of the condominium concept, given the changes in the

market in the seven years since Farese had suspended construction.

Moreover, there was no indication at these exploratory meetings

that WCP would proceed with the Farese plan without Danielson's

participation. When WCP reversed course and began working from the

disputed drawings, it informed Tellalian of this fact, but never

Danielson. In August 1997, when Danielson learned of actual

infringement, it acted promptly to assert its claim.

We agree with the district court that the evidence about

these meetings did not establish the type of knowledge necessary to

estop Danielson from pursuing its claim. We also note that this

conclusion is consistent with the jury's subsequent verdict on the

statute of limitations defense, which necessarily involved a

rejection of the claim that Danielson knew or should have known of

infringing activity before May 1997. Cf. Heinrich v. Sweet, 308

F.3d 48, 69 (1st Cir. 2002) (looking to necessary implications of
-36-

jury verdict on one issue as support for conclusions on a different

but related issue).

WCP advances an arguably distinct waiver defense based on

the same arguments. A waiver must be voluntary and knowing,

however. See Med. Air Tech. Corp. v. Marwan Inv., Inc., 303 F.3d

11, 19 & n.4 (1st Cir. 2002). Since the facts do not support

knowledge sufficient for estoppel, waiver is a fortiori

unsupportable.

III. Unfair Competition Claims

Danielson appeals the summary judgment ruling against its

claim of unfair and deceptive trade practices under Mass. Gen. Laws

ch. 93A, and the post-trial judgment as a matter of law against it

on the Lanham Act false designation of origin claim.

A. Preemption of Chapter 93A Claim

Federal copyright law preempts rights under state law

when they are the equivalent of those granted under the Copyright

Act. 17 U.S.C. § 301(a). The district court granted summary

judgment against Danielson's chapter 93A claim, finding it

preempted by this provision. Danielson, 186 F. Supp. 2d at 29. As

noted earlier, we review summary judgment de novo. See Segrets,

207 F.3d at 61.

WCP first invoked preemption as an affirmative defense in

its answer to Danielson's complaint. Danielson essentially

conceded in its briefs to us that it advanced only cursory legal
8 Danielson attempts to augment its arguments on appeal by

alleging that the element of "rascality" in a chapter 93A claim

adds enough to escape preemption. Normally, we will not entertain

an argument on appeal of summary judgment that was not raised

before the district court. See Ortiz v. Gaston County Dyeing Mach.

Co., 277 F.3d 594, 597 (1st Cir. 2002). In any event, a label such

as "rascality" is a dubious basis for the extra element required to

survive preemption. See Data Gen., 36 F.3d at 1165 (citing Mayer

v. Josiah Wedgwood & Sons, Ltd., 601 F. Supp. 1523, 1535 (S.D.N.Y.

1985)).

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arguments against preemption at the time of summary judgment. The

behavior on which Danielson based its state-law claim is the same

behavior that Danielson alleged gave rise to copyright liability.

The state claim is therefore preempted. See Data Gen., 36 F.3d at

1164-65.8

B. Lanham Act

The district court ruled post-verdict against Danielson's

Lanham Act false designation of origin claim because the damages

found by the jury when it found liability on the claim were too

speculative. On appeal, Danielson argues that the removal of its

logo from the infringed drawings violated the Lanham Act, and that

its contract with Farese provided a basis for the jury to reach the

$120,000 figure. In response, WCP argues not only that the amount

of damages was unproven, but that Danielson failed to demonstrate

any cognizable harm at all. It also argues that other showings
9 Danielson argues that WCP has waived these arguments by

failing to discuss them in its opening brief to us. But these are

cross-appeals, and WCP was the prevailing party on the Lanham Act

issue before the district court. The onus is not on WCP to seek to

have its victory re-examined on the grounds that the district court

awarded it on too narrow a basis. Rather Danielson, in its

capacity as cross-appellant, challenged the district court ruling.

WCP then replied, having attacked the Lanham Act claim under Rule

50 both during and after trial.

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required by the Lanham Act were inadequate, including the

involvement of interstate commerce.9

Section 43(a) of the Lanham Act creates a federal cause

of action for any person "who believes that he or she is likely to

be damaged" by "any false designation of origin" used "in commerce"

which "is likely to cause confusion, or to cause mistake, or to

deceive." 15 U.S.C. § 1125(a) (2000). A typical scenario involves

"passing off," where a defendant sells its own goods or services

while falsely representing that they come from the plaintiff; this

claim is a "close cousin" of other trademark infringement actions,

except that it is available to those with unregistered marks. See

PHC, Inc. v. Pioneer Healthcare, Inc., 75 F.3d 75, 78 (1st Cir.

1996). Danielson's claim is closer to so-called "reverse passing

off," where the defendant falsely attributes the plaintiff's

product to itself or a third party. See Waldman Publ'g Corp. v.

Landoll, Inc., 43 F.3d 775, 780-81 (2d Cir. 1994). The First

Circuit has not recognized this claim under section 43(a) of the

Lanham Act, although other courts have done so. See, e.g., id.;

Smith v. Montoro, 648 F.2d 602, 605-07 (9th Cir. 1981). See
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generally J.T. Cross, Giving Credit Where Credit is Due, 72 Wash.

L. Rev. 709, 716-19 & n.46 (1997) (collecting cases and tracing

history); id. at 736-42 (criticizing recognition of reverse passing

off claims under section 43(a)). We will not decide here whether

we recognize such a claim, but will assume for purposes of this

appeal that we would do so.

Danielson's arguments on the Lanham Act before the

district court, and indeed the jury, were frequently cursory. At

summary judgment, the district court said that it would refrain

from entering judgment on the Lanham Act claim because "the parties

have not adequately briefed the issue, and ought [to] be given an

opportunity further to hone their arguments at trial." Danielson,

186 F. Supp. 2d at 27. But Danielson did little honing at trial;

for example, it did not mention the claim in its closing argument

to the jury (although WCP did).

For the most part, the argument that was made suggested

that Danielson had been damaged by the alleged Lanham Act violation

because it lost the contract value of the drawings as a result.

But there is an insuperable causation problem with that argument.

Danielson has insisted in other contexts that the only possible use

for the infringed drawings was in connection with the site. Surely

the reason that WCP did not hire Danielson for the job, or buy out

the Farese contract, was not that it was deceived by the

misattribution. We do not see how the miscreant and the only
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potential lost customer can be one and the same; WCP would need to

have confused itself. False designation of origin did not cause

this harm.

Danielson notes that others who came in contact with the

drawings would have been misled about its origins as well. Since

exposure to subcontractors, planning officials, and the like would

be good for business, one might expect that Danielson lost an

opportunity to enhance its professional reputation. See Johnson,

149 F.3d at 502 (reverse passing off found where defendant replaced

plaintiff's logo with its own on architectural drawings and

circulated them), quoted in Danielson, 186 F. Supp. 2d at 27; cf.

Attia v. Soc'y of N.Y. Hosp., 201 F.3d 50, 58-60 (2d Cir. 1999)

(considering similar claim and rejecting it because plan at issue

was too general to be protectable). Here, however, Danielson did

nothing whatsoever at trial to show how the misattribution might

have cost it other potential work. We see no evidence in the

record that Danielson even operated outside Massachusetts at this

time, in order to establish the necessary interstate commerce nexus

for the market in which business was allegedly lost. Cf. Johnson,

149 F.3d at 502 (record established that plaintiff was licensed in

three states and did work in all of them). Danielson also admitted

at trial that, in its diminished capacity in the 1990s, the firm

was no longer able to do a job of the type or scale of the Willows

at Winchester. Thus a developer of a similar project who saw
-41-

Danielson's logo on the drawings and considered hiring it would

have been unable to do so anyway.

Perhaps the meager showings of commerce and harm that

Danielson did offer might have been enough to justify nonmonetary

relief in a different case. See Cashmere & Camel Hair Mfrs. Inst.

v. Saks Fifth Ave., 284 F.3d 302, 311 (1st Cir. 2002) (under Lanham

Act, "a plaintiff seeking damages must show actual harm to its

business"); Web Printing Controls Co. v. Oxy-Dry Corp., 906 F.2d

1202, 1204 (7th Cir. 1990) (reversing dismissal of claim for

failure to show harm when injunctive relief was requested). Here,

however, Danielson claimed only money damages and failed to carry

its burden of proof. On the facts of record in this case we

therefore affirm the dismissal of the claim. As a result, we also

affirm the denial of attorneys' fees, because Danielson was not the

"prevailing party" as required by the statute. 15 U.S.C. §

1117(a).

IV. Damages

WCP appeals from the jury instructions on damages, while

Danielson appeals the district court's reduction of copyright

damages and denial of prejudgment interest.

A. Infringer's Profits

The principal damages in this case, on which the parties

focus the most attention, are profits from selling condominium

units in the Willows at Winchester. Damages for copyright
10 If the district court was correct that the jury's

copyright damages included $120,000 of actual damages, then it

appears that the jury deducted the full amount for real estate

commissions and did no apportionment at all.

-42-

infringement include "any profits of the infringer that are

attributable to the infringement." 17 U.S.C. § 504(b). The

copyright owner needs only to present evidence of the infringer's

gross revenues; the burden is then on the defendant to show how

much of its revenues are profits, and what "elements of profit

[are] attributable to factors other than the copyrighted work."

Id.

In this case, stipulations by the parties settled many of

these issues. The parties agreed that the gross revenues from the

sale of all 70 condominium units totaled $19,867,684. They also

stipulated that WCP incurred at least $18,136,667 in deductible

expenses. They disagreed about whether an additional amount of up

to $386,067 for commissions to real estate brokers was also

deductible, a question of fact that was left to the jury and is not

directly before us on appeal. Therefore, depending on the outcome

of that dispute, the total pool of profits from which the jury

could calculate damages was between $1,344,950 and $1,731,017. The

jury awarded Danielson $1,464,950. This figure suggests that the

jury apportioned, at most, a negligible amount of the profits and

awarded all or almost all of WCP's profits to Danielson.10 WCP
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argues that some apportionment is required by law, and that faulty

instructions led the jury not to do the necessary apportionment.

The caselaw is clear on this point: there must be a

rational apportionment of profits. The division of profits between

those portions attributable to the infringement and those

attributable to other sources does not require "mathematical

exactness." Abend v. MCA, Inc., 863 F.2d 1465, 1480 (9th Cir.

1988) (apportionment required where film "Rear Window" infringed

underlying short story, but also earned profit from reputations and

creative contributions of many others, including Grace Kelly, James

Stewart, and Alfred Hitchcock). The Supreme Court held in 1940

that a "reasonable approximation" was enough if it allowed "a

rational separation of the net profits so that neither party may

have what rightfully belongs to the other." Sheldon v. MetroGoldwyn Pictures Corp., 309 U.S. 390, 404 (1940) (internal

quotations omitted) (requiring apportionment where movie infringed

parts of play, but added other content, as well as costumes,

scenery, and the like).

In Data General, this court found some apportionment

required as a matter of law because the defendant showed that,

apart from its infringing activity, customers purchased its

services for reasons such as the price, quality, and breadth of its

service. 36 F.3d at 1174, 1177. We agree with WCP that Data

General controls this case. See also Bruce v. Weekly World News,
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Inc., 310 F.3d 25, 31-32 (1st Cir. 2002) (50-50 apportionment of

profits from sales of T-shirts featuring infringed "generic" photo

of President Clinton shaking hands, retouched to depict him

greeting an alien); Sygma Photo News, Inc. v. High Soc'y Magazine,

Inc., 778 F.2d 89, 96 (2d Cir. 1985) (reducing district court's

apportionment of profits for infringing photo of Raquel Welch on

cover of "Celebrity Skin" magazine because of failure to account

for cover's list of other celebrities pictured inside); Frank Music

Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 518 (9th Cir.

1985) (one percent apportionment for infringing use of songs in Las

Vegas revue was clear error because evidence indicated the songs

were more important to the revue's success); ABKCO Music, Inc. v.

Harrisongs Music, Ltd., 508 F. Supp. 798, 801-02 (S.D.N.Y. 1981)

(apportioning song's profits between infringing melody,

noninfringing lyrics, and fame and appeal of singer George

Harrison).

At trial, WCP presented evidence concerning many

contributing factors that helped the Willows at Winchester turn a

profit besides Danielson's skeletal site plans. It pointed to five

volumes of subsequent and more detailed architectural drawings

necessary to complete the project. Other evidence concerned the

extensive efforts WCP made to coordinate logistics, supervise

subcontractors, choose and install various amenities, market the

development, and sell the condominium units. WCP also argued that
11 On appeal, Danielson challenges the district court's

decision to allow these experts to testify at trial. We review for

abuse of discretion. See Kumho Tire Co. v. Carmichael, 526 U.S.

137, 152 (1999). We find no such abuse; Barsky and Hawkes are both

experienced professionals with relevant expertise. Meanwhile, WCP

appeals the district court's decision to exclude certain parts of

the testimony it wanted to elicit from Hawkes, especially her

estimate that the contribution of a site plan to a condominium

project is no more than 10-15 percent of its total appeal. Given

the lack of foundation offered for this particular number, we think

the district court was within its discretion to limit Hawkes's

testimony in this manner. At a second trial, if one is required,

see infra Part IV.C, WCP might do a better job of establishing the

basis for this opinion, or might offer other experts or evidence to

support it. More importantly, when the jury is given the proper

standard rather than instructed to look for mathematical exactness,

it will be less important for WCP to produce a precise numerical

figure.

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aspects of Danielson's site plans, such as the placement of garages

and parking areas, actually might have detracted from the

development's appeal. WCP supported many of these contentions with

testimony from two experts: David Barsky, an architect, and Sue

Hawkes, a condominium marketing consultant.11

"[T]he defendant may show that the existence and amount

of its profits are not the natural and probable consequences of the

infringement alone, but are also the result of other factors which

either add intrinsic value to the product or have independent

promotional value." Data Gen., 36 F.3d at 1175. Where such a

showing is made, apportionment is required. Id. at 1177; Cream

Records, Inc. v. Jos. Schlitz Brewing Co., 754 F.2d 826, 828 (9th

Cir. 1985) ("[W]here it is clear . . . that not all of the profits

are attributable to the infringing material, the copyright owner is
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not entitled to recover all of those profits merely because the

infringer fails to establish with certainty the portion

attributable to the non-infringing elements."); Orgel v. Clark

Boardman Co., 301 F.2d 119, 121 (2d Cir. 1962) ("[W]here an

infringer's profits are not entirely due to the infringement, and

the evidence suggests some division which may rationally be used as

a springboard it is the duty of the court to make some

apportionment."). Many of the noninfringing elements that

triggered apportionment in the cases we have cited here -- such as

the popularity of a celebrity, the quality of a finished product,

or marketing efforts -- were inchoate. We hold that WCP has

likewise made enough of a showing to require some apportionment as

a matter of law. See Data Gen., 36 F.3d at 1177.

WCP argues that the district court's instructions to the

jury foreordained its refusal to apportion, because they

erroneously stated an extremely high standard to show that an

element of profit was not attributable to the infringement. We

overturn a jury instruction only if it prejudices a party's

substantial rights because it misleads the jury or misstates or

unduly complicates the correct legal standard. See Faigin v.

Kelly, 184 F.3d 67, 87 (1st Cir. 1999). The instructions on

apportionment did all three.

WCP proposed jury instructions that reflected the

precedents reasonably accurately. Parties are entitled to jury
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instructions that reflect the correct legal standards, but not, of

course, the exact phrasing they desire. See Luson Int'l Distribs.,

Inc. v. Fabricating & Prod. Mach., Inc., 966 F.2d 9, 13 (1st Cir.

1992). Here, however, the district court's instructions on

apportionment were misleading and inconsistent with the applicable

law:

[WCP argues it is] entitled to apportion those net

revenues, and if there are portions of those revenues

which were earned completely free of what the site plan

drawings which were infringed were used for, then they

shouldn't have to pay those net revenues over to

Danielson. . . . [This portion] had nothing to do with

the infringement.

Well, they say that. The [WCP] folks have to

prove that, and again by a fair preponderance of the

evidence. So you consider things. Were the design

features wholly separate from the site plan drawings[?]

Was there a marketing plan wholly separate[?] You

consider those aspects, but they have to be wholly

separate.

WCP objected at the end of the instructions: "[W]hen you

defined the burden on apportionment of damages, twice you used the

phrase that the apportionment has to be 'wholly separate,'

'completely free.' . . . That's an overstatement of what we have

to show in the case." We could put it no better ourselves. These

instructions required mathematical exactness and complete

separability to allow apportionment, but the law imposes no such

requirements. In objecting, WCP also referred the court to several

cases that supported its position and were contrary to the

instructions, including ABKCO Music and Sygma News. The trial

judge interrupted, saying "I'm satisfied with the charge."
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The jury, apparently, was less satisfied. After several

hours of deliberation, it sent a note to the judge asking for

clarification:

Trying to understand apportionment. Author writes story.

Movie studio infringes story and turns it into a movie.

Movie makes a hundred million profit. Obviously there

were many added aspects to make movie. Does author

recover a hundred million since story underlies the whole

[movie]? There is [sic] clear creative contributions by

many others. Can this have an impact on the award? We

need more understanding of the law of apportionment with

respect to copyright infringement.

The court responded with a further charge that largely reiterated

its prior one:

In order to prove apportionment [WCP] has to prove by a

fair preponderance of the evidence that some aspect or

aspects of the net revenues are the result of something

other than the copyright infringement. If it's all

intertwined and there can be no separately identifiable

amount, and to give your example, the authors, the book

authors underlies [sic] the entire movie, then there's no

apportionment. But if there is a portion of those net

revenues, net profits, which are apart from, separate

from, identifiably separate from the copyright

infringement, and [WCP] has proved that by a fair

preponderance of the evidence, then it's only fair that

that be apportioned out because that part of it was not

permitted, was not enhanced or allowed or undergirded by

the copyright infringement. . . . If you are going to

apportion you see if [WCP] has identified a separable

amount, and then you deduct that amount or that portion

and the Danielson folks get the remainder.

The judge's response to the jury's hypothetical was

inconsistent with two leading cases presenting similar facts,

Sheldon, 309 U.S. at 404, and Abend, 863 F.2d at 1478-80.

Otherwise, the second charge merely echoed the court's original
12 Danielson argues that WCP waived this issue by failing to

object again to the reiterated instruction. Given that WCP offered

an instruction on apportionment, objected to the original charge,

and raised this issue again in its post-verdict motion for a new

trial, we will consider it preserved for appeal. Even if there

were waiver, it would simply limit our review to clear error, and

that standard would be satisfied here.

13 We are unpersuaded by Danielson's argument that

apportionment is not appropriate because the entire development was

"intertwined" with the infringed site plans. Danielson cites only

one case to us in support of this notion, Business Trends Analysts,

Inc. v. Freedonia Group, 700 F. Supp. 1213, 1241 (S.D.N.Y. 1988),

aff'd 887 F.2d 399 (2d Cir. 1989). That case is simply

inapplicable: the court there found the record "absolutely bereft

of any proof" from defendants on apportionment. Id. Its reference

to intertwining referred to the lack of any evidence that would

"sensibly and responsibly extricate the gold from the dross." Id.

In contrast, the evidence in the case before us allows a sensible

and responsible apportionment.

14 This finding obviates the need for us to consider

separately WCP's appeal of the denial of its motion for a new

trial, which was predicated on damages issues; our holding has the

same effect.

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error, albeit without some of the intensifying adverbs, and it did

nothing to undo the damage.12 WCP did not need to prove that its

noninfringing contributions to the development were "wholly

separate" from Danielson's plans, as the first instruction

repeatedly said. It is also wrong to state, as did the second

instruction, that apportionment is unavailable where the final

product was "enhanced or allowed or undergirded by the copyright

infringement."13

In light of these erroneous instructions on

apportionment, we must vacate the copyright damages.14 See Data

Gen., 36 F.3d at 1177 (citing Allen v. Chance Mfg. Co., 873 F.2d
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465, 470 (1st Cir. 1989)). Apportionment is "ultimately a delicate

exercise informed by considerations of fairness and public policy,

as well as fact." Data Gen., 36 F.3d at 1176. The instructions

here did not fulfill these goals, and the jury's verdict was

distorted as a result.

B. Other Damages Issues

In addition to profits based on the infringement,

Danielson is also entitled to any actual damages it suffered. 17

U.S.C. § 504(b). If, for example, Danielson demonstrated the

amount of compensation that it might have obtained from WCP, but

had lost because WCP unlawfully copied the drawings instead, that

sum would serve as a good measure of actual damages. The district

court determined that the jury had added $120,000 to its award of

copyright damages and that this amount was overly speculative, and

so the court reduced the award commensurately. Danielson appeals

this decision. We are concerned that the court's response may

itself have depended on speculation, but by vacating the damages

award we have eliminated the need to decide this question. We also

vacate the district court's alternative order of remittur.

Danielson may offer evidence to show actual damages in any further

proceedings to calculate damages.

Finally, Danielson appeals the district court's denial of

prejudgment interest. We review this decision for abuse of

discretion. Hogan v. Bangor & Aroostook R.R., 61 F.3d 1034, 1038
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(1st Cir. 1995). In ruling from the bench, the district court

stated that it relied on Murray v. Shaw Industries, Inc., 990 F.

Supp. 46 (D. Mass. 1997). That case found that prejudgment

interest was inappropriate where the entire damages award was

composed of disgorged profits from an infringer, because, unlike

actual damages, the plaintiff never had those funds and so deserved

no compensation for the lost use of the money while the case was

pending. Id. at 48. This reasoning is sound and not an abuse of

discretion. Danielson offers no support for its assertion that the

standards for awarding prejudgment interest and attorneys' fees are

the same, and we find none. We do note, however, that after

further proceedings Danielson's award may include some actual

damages. If so, the district court may, in its discretion, choose

to revisit this issue.

C. Remand

We hope that damages can now be resolved without

requiring the empanelment of another jury for a new proceeding. As

we did in Data General, 36 F.3d at 1177 n.52, we offer some

thoughts to assist the district court in the conduct of further

proceedings. First and foremost, now that WCP's liability is

established and every underlying legal issue is resolved, we urge

the parties to renew their efforts to settle the case.

Alternatively, the parties could agree to allow the district court

to determine damages on the basis of the evidence already presented
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at trial. See 4 Nimmer, supra, § 14.03(D), at 14-41 (parties may

consent to bench trial). The district court might also accept some

further briefing or evidence before ruling on damages. Finally, if

the parties decline all of these invitations, we encourage the

district court to consider, in its discretion, ordering a 

remittitur. Data Gen., 36 F.3d at 1177 n.52. Fifteen years have

passed since the drawings at the center of this case were produced.

There is no advantage to prolonging the litigation any further.

V. Conclusion

For the reasons stated in this opinion, the district

court's decisions dismissing WCP's affirmative defenses and

Danielson's unfair competition claims are affirmed. The damages

award is vacated and the case is remanded for proceedings to

calculate damages consistent with this opinion.