Source: https://law.justia.com/cases/federal/appellate-courts/F2/876/626/67594/
Timestamp: 2019-10-17 00:53:54
Document Index: 67094017

Matched Legal Cases: ['§ 1', '§ 101', '§ 201', '§ 1505', '§ 5', 'art, 692']

Applied Innovations, Inc., Appellant/cross-appellee, v. Regents of the University of Minnesota and National Computersystems, Inc., Appellees/cross-appellants, 876 F.2d 626 (8th Cir. 1989) :: Justia
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Applied Innovations, Inc., Appellant/cross-appellee, v. Regents of the University of Minnesota and National Computersystems, Inc., Appellees/cross-appellants, 876 F.2d 626 (8th Cir. 1989)
US Court of Appeals for the Eighth Circuit - 876 F.2d 626 (8th Cir. 1989) Submitted April 11, 1988. Decided May 30, 1989
Applied Innovations, Inc. (defendant), appeals from a final judgment entered in the District Court1 for the District of Minnesota, after a bench trial, in favor of the Regents of the University of Minnesota (the university) and National Computer Systems, Inc. (NCS) (together referred to as plaintiffs), finding that AI had infringed the university's copyrights in a psychological test, the Minnesota Multiphasic Personality Inventory (MMPI). Regents of University of Minnesota v. Applied Innovations, Inc., No. 3-86-CIV-683 (D. Minn. Oct. 9, 1987) (reported at 685 F. Supp. 698), amended (Jan. 4, 1988) (order).
In May 1942 Hathaway and McKinley published the Minnesota Multiphasic Personality Schedule (MMP Schedule) . The copyright notice was in the name of the university. The MMP Schedule was a comprehensive work and contained the 550 test statements, scale membership, scoring direction, and t-score conversion data for the hypochondriasis, depression, hysteria, psychopathic deviate, sexual interest, question, truthfulness, and validity scales.
As a preliminary matter we note that the Copyright Act of Mar. 4, 1909 (formerly codified at 17 U.S.C. §§ 1-216 (1972)) (hereinafter 1909 Act), applies in this case because all the MMPI works in question were published before January 1, 1978. The 1909 Act was revised in its entirety and superseded by the Copyright Act of Oct. 19, 1976 (effective date Jan. 1, 1978) (now codified at 17 U.S.C. §§ 101-810 (1988) (hereinafter 1976 Act)).
Defendant first argues the district court erred in holding that the university had standing to sue for infringement of the MMPI works first published as articles in periodicals. According to defendant, the university can only claim a copyright interest as the assignee of either the authors of the articles or the publishers of the periodicals. Defendant argues that, in fact, the university received nothing via these assignments because the authors and the publishers, with the exception of the Journal Press, failed to renew their copyrights and therefore this material is now in the public domain. Defendant argues the district court erroneously extended the constructive trust holding in Goodis v. United Artists Television, Inc., 425 F.2d 397 (2d Cir. 1970) (Goodis), from the author of a work first published in a periodical to a mere assignee of the publisher of the periodical. Defendant further argues that Goodis should not be extended in any event to the copyright renewal term.
The university, as the indirect assignee of a previously registered copyright, had the burden of persuasion and production to establish the chain of title. Once the university presented evidence of its chain of title, the burden of production shifted to defendant to establish invalidity. See 3 M. Nimmer, Nimmer on Copyright Sec. 12.11 [C], at 12.81-.82 (1988) (hereinafter Nimmer). We think the university presented sufficient evidence of its chain of title to the copyright in these articles as the assignee, through the Helen Dwight Reid Educational Foundation, of the Journal Press.
The MMPI articles were first published in the Journal of Psychology bearing a copyright notice in the name of the publisher only. There was no separate notice in the names of the authors. Nor was there any evidence that the authors had registered the unpublished manuscripts or that they had reserved all rights other than the right to reproduce the articles in periodical form. Thus, under the 1909 Act, the Journal Press was the proprietor of the statutory copyright in the entire Journal of Psychology issue, including the individual articles. There was no evidence that the Journal Press had assigned the copyright in any component part of that issue of the Journal of Psychology to the authors. Under these circumstances, the authors had no copyright in the articles, and publication of the articles with a general copyright notice in the name of the publisher prevented the articles from being thrust into the public domain. See generally 3 Nimmer Sec. 10.01 [C]. Compare Sec. 201(c) of the 1976 Act, 17 U.S.C. § 201(c) (absent an express transfer from the author, the publisher of a collective work such as a periodical acquires only the privilege of reproducing and distributing the contribution as part of that collective work).
Under the analysis set forth above, it is not necessary to apply the Goodis holding. The Goodis court was forced to adopt a constructive trust theory in order to avoid the "doctrine of indivisibility of copyright." The doctrine of indivisibility arose because the 1909 Act referred to a single "copyright" and to a single "copyright proprietor," and "it was inferred that the bundle of rights which accrued to a copyright owner were 'indivisible,' that is, incapable of assignment in parts." 3 Nimmer Sec. 10.01 [A] at 10-4. Under this view of the nature of the right of copyright, it was "impossible to 'assign' anything less than the totality of rights commanded by copyright. A transfer of anything less than such a totality was said to be a 'license' rather than an assignment." Id. at 10-4 to -5 (footnotes omitted). Because "only the copyright proprietor (which would include an assignee but not a licensee) had standing to bring an infringement action," the doctrine of indivisibility protected alleged infringers from successive law suits. Id. at 10-5 (footnotes omitted).
Unfortunately, as noted by Professor Nimmer, " [w]hatever justification for indivisibility remained in terms of avoidance of multiplicity of actions was far outweighed by the impeding effect it had upon commerce in copyrighted works.... and produced technical pitfalls for both buyers and sellers." Id. at 10-5 to -6.
Id. Sec. 10.01 [C], at 10-12 (footnotes omitted).
The court in Goodis was confronted with just such a fatal technical pitfall. In that case the author of a novel had arranged to publish the novel and had also sold the motion picture rights. Before the novel was published, however, the author made arrangements for the novel to appear in serial form in a magazine. The book publisher postponed distribution of the novel and the novel was first published in the magazine. Each issue of the magazine contained a copyright notice in the name of the magazine, and there was no notice in the author's name. The defendant, a television network which had produced a successful television series based on the novel, argued that the novel had fallen into the public domain because the magazine was a mere licensee. The court refused to apply the doctrine of indivisibility and held that first publication in a magazine under a general copyright notice in the name of the magazine was sufficient to secure the author's copyright in his or her contribution, even though the author had reserved all rights other than magazine rights. 425 F.2d at 400-01; see, e.g., Saturday Evening Post Co. v. Rumbleseat Press, Inc., 816 F.2d 1191, 1201 (7th Cir. 1987).
In the present case the doctrine of indivisibility did not affect the publisher's copyright. Because the authors had not granted some rights in their articles to one publisher and some rights in the same works to another, the publisher was not a mere licensee and was therefore not in the same position as the magazine in Goodis. Moreover, " [t]he most frequently cited policy for applying the indivisibility rule is to avoid multiple infringement actions, each brought by the holder of a particular right in a literary work without joining as co-plaintiff the author or proprietor of the copyrighted work." Goodis, 425 F.2d at 400, citing New Fiction Publishing Co. v. Star Co., 220 F. 994 (S.D.N.Y. 1915). Because the university had obtained assignments from all of its potential "rival" copyright claimants, there is no possibility of multiple infringement actions.
The WPA regulation was promulgated by WPA as a statement of "general applicability and legal effect." Because it was never published in the Federal Register as required by the Federal Register Act, 44 U.S.C. § 1505 (formerly 44 U.S.C. §§ 5, 7), the WPA regulation was not legally binding in the absence of actual knowledge. See, e.g., Timber Access Industries Co. v. United States, 213 Ct. Cl. 648, 553 F.2d 1250, 1255 (1977) (Forest Service Manual); Andrews v. Knowlton, 509 F.2d 898, 905 (2d Cir.) (Cadet Honor Code), cert. denied, 423 U.S. 873, 96 S. Ct. 142, 46 L. Ed. 2d 105 (1975); United States v. Aarons, 310 F.2d 341, 345-48 (2d Cir. 1962) (Coast Guard order); In re Pacific Far East Line, Inc., 314 F. Supp. 1339, 1348 (N.D. Cal. 1970) (navy port regulations), aff'd, 472 F.2d 1382 (9th Cir. 1973).
As the party seeking to assert the legal effectiveness of the WPA regulation, defendant had the burden of persuasion and production on the issue of actual knowledge. Resolution of this issue necessarily required the reconstruction of events that occurred more than forty-five years ago. There was no direct evidence of actual knowledge and the circumstantial evidence on this issue was not conclusive. There was evidence that, as required by the WPA regulation, the authors used the form of acknowledgement of government support specified by the WPA regulation and made their basic research data accessible to the public. There was also evidence, however, that the WPA supervisors had reviewed a copy of the 1942 MMP Schedule, which contained a copyright notice to the university, and had not raised any objections about its copyrightability. Nor was there any evidence that the WPA regulation restricting copyright had been incorporated into the WPA funding agreement. Cf. S & H Computer Systems, Inc. v. SAS Institute, Inc., 568 F. Supp. 416, 418-19 (M.D. Tenn. 1983) (Department of Agriculture contract funding development of computer software contained provisions restricting copyright and granting "all benefits of all patentable results of all research" to the public). Defendant failed to carry its burden of proof on the issue of actual knowledge.
Nor do we reach defendant's argument that the governmental exception, Sec. 8 of the 1909 Act authorized WPA to promulgate regulations about the copyrightability of works created under government grants. WPA's authority to promulgate regulations such as Operating Procedure No. W-11 was not disputed. In any event, we note that the Copyright Office did accept the MMPI works for registration and did not reject them because the works had been funded in part by the government. Cf. Schnapper v. Foley, 215 U.S.App.D.C. 59, 667 F.2d 102, 108-12 (1981) (governmental exception in 1909 and 1976 Acts does not bar registration of works commissioned by the government or assignment of copyrights in such works to the government; Copyright Office consistently accepted for registration federally commissioned works under 1909 Act), cert. denied, 455 U.S. 948, 102 S. Ct. 1448, 71 L. Ed. 2d 661 (1982).
Computer programs may be protected by copyright. E.g., Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc., 797 F.2d 1222, 1233 (3d Cir. 1986) (Whelan) (overall structure, sequence and organization of computer software), cert. denied, 479 U.S. 1031, 107 S. Ct. 877, 93 L. Ed. 2d 831 (1987); Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1246-47 (3d Cir. 1983) (computer object and source code), cert. dismissed, 464 U.S. 1033, 104 S. Ct. 690, 79 L. Ed. 2d 158 (1984). Defendant's personal computer-based software, MMPI Scoring Program I and II, duplicated first NCS's in-house computerized MMPI scoring and interpreting services and then NCS's own personal computer-based MMPI software, Microtest. Because we have already determined that plaintiffs owned the MMPI copyrights and it is not disputed that defendant's software copied at least some of the test statements (only MMPI Scoring Program I) and all the testing data needed to score and interpret the MMPI (both MMPI Scoring Program I and II), we are concerned only with whether the test statements and testing data are per se uncopyrightable.
To be the original work of an author, a work must be the product of some "creative intellectual or aesthetic labor." However, "a very slight degree of such labor [,] ... almost any ingenuity in selection, combination or expression, no matter how crude, humble or obvious, will be sufficient" to make the work copyrightable.
We think the test statements satisfy the minimal standard for original works of authorship within the meaning of the copyright laws, at least within the context of the administration of the MMPI. Clearly, the test statements that Hathaway and McKinley, and their university colleagues, independently created meet the originality standard. Rubin v. Boston Magazine Co., 645 F.2d 80, 83 (1st Cir. 1981) (particular questions about love and romance held copyrightable as original forms of expression); cf. Educational Testing Service v. Katzman, 793 F.2d 533, 539 (3d Cir. 1986) (questions in scholastic aptitude and achievement tests); Association of American Medical Colleges v. Mikaelian, 571 F. Supp. 144, 150 (E.D. Pa. 1983) (questions in medical school admission test), aff'd without opinion, 734 F.2d 3 (3d Cir. 1984); National Conference of Bar Examiners v. Multistate Legal Studies, Inc., 495 F. Supp. 34, 36 (N.D. Ill. 1980) (questions in bar exam), aff'd in part and rev'd in part, 692 F.2d 478 (7th Cir. 1982), cert. denied, 464 U.S. 814, 104 S. Ct. 69, 78 L. Ed. 2d 83 (1983).
We also think the test statements that are revisions of the questions in pre-existing psychometric tests represent "distinguishable" variations of the prior works. 1 Nimmer Secs. 2.01 [B], 3.01, 3.03. The revisions are recognizable as the work of the authors and thus are sufficiently original to warrant copyright protection as derivative works. See Toro Co. v. R & R Products Co., 787 F.2d 1208, 1213 (8th Cir. 1986) (citations omitted); see generally 1 Nimmer Sec. 3.04.
Copyright protection does not extend to ideas or facts in published works. E.g., Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 547, 105 S. Ct. 2218, 2223, 85 L. Ed. 2d 588 (1985) (Harper & Row) ; Worth v. Selchow & Richter Co., 827 F.2d 569, 572 (9th Cir. 1987) (Worth) (works on trivia), cert. denied, --- U.S. ----, 108 S. Ct. 1271, 99 L. Ed. 2d 482 (1988); Frybarger v. International Business Machines Corp., 812 F.2d 525, 529 (9th Cir. 1987) (Frybarger) (video games). "The discovery of a fact, regardless of the quantum of labor and expense, is simply not the work of an author." 1 Nimmer Sec. 2.11 [E], at 2-169 to -170. "The copyright is limited to those aspects of the work--termed 'expression'--that display the stamp of the author's originality." Harper & Row, 471 U.S. at 547, 105 S. Ct. at 2224. This is particularly true of factual works. "Because authors who wish to express ideas in factual works are usually confined to a 'narrow range of expression ..., similarity of expression may have to amount to verbatim reproduction or very close paraphrasing before a factual work will be deemed infringed.' " Worth, 827 F.2d at 572, citing Landsberg v. Scrabble Crossword Game Players, Inc., 736 F.2d 485, 488 (9th Cir.), cert. denied, 469 U.S. 1037, 105 S. Ct. 513, 83 L. Ed. 2d 403 (1984); see also Wainwright Securities, Inc. v. Wall Street Transcript Corp., 558 F.2d 91 (2d Cir. 1977) (abstracts of financial reports), cert. denied, 434 U.S. 1014, 98 S. Ct. 730, 54 L. Ed. 2d 759 (1978); Toro Co. v. R & R Products Co., 787 F.2d at 1211-12 (parts numbers).
This is a close question. We think the MMPI testing data are copyrightable as expressions of facts or processes. Our conclusion is expressly based upon the district court's findings of fact about the methods the authors used to develop the MMPI testing data. The district court found that although the authors began with certain discovered facts, statistical models and mathematical principles, which cannot be copyrighted, they then made certain adjustments on the basis of their expertise and clinical experience. In other words, the MMPI testing data, at least for purposes of analysis under the copyright law, do not represent pure statements of fact or psychological theory; they are instead original expressions of those facts or processes as applied and as such are copyrightable. Rubin v. Boston Magazine Co., 645 F.2d at 83; see generally 1 Nimmer Sec. 2.03 [E], 2.11.
On cross-appeal plaintiffs argue the district court abused its discretion in refusing to award them reasonable attorney's fees. The decision whether to award attorney's fees in copyright cases is committed to the sound discretion of the district court. See generally id. Sec. 14.10 [D]. In some circuits reasonable attorney's fees are routinely awarded to the prevailing party. See, e.g., Micromanipulator Co. v. Bough, 779 F.2d 255, 259 (5th Cir. 1985). Some circuits distinguish between prevailing plaintiffs and prevailing defendants and award attorney's fees to prevailing defendants only if the plaintiff's claims are not colorable. See, e.g., Original Appalachian Artworks, Inc. v. McCall Pattern Co., 825 F.2d 355, 356 (11th Cir. 1987); Diamond v. Am-Law Publishing Corp., 745 F.2d 142, 148 (2d Cir. 1984). Other circuits require a showing of bad faith or frivolity. See, e.g., Cooling Systems & Flexibles, Inc. v. Stuart Radiator, Inc., 777 F.2d 485, 493 (9th Cir. 1985). It does not appear that this circuit has adopted a definitive standard for awarding attorney's fees in copyright cases. See United Telephone Co. v. Johnson Publishing Co., 855 F.2d 604, 612 (8th Cir. 1988) (reference to abuse of discretion standard in general); Hartman v. Hallmark Cards, Inc., 833 F.2d 117, 122-23 (8th Cir. 1987) (affirming denial of attorney's fees to prevailing defendant where plaintiff's claim was not baseless).
We are reluctant to adopt a particular standard. For purposes of this appeal, it is sufficient to decide that attorney's fees should not be awarded to a prevailing plaintiff as a matter of course. See, e.g., Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (3d Cir. 1986). In the present case the district court decided not to award attorney's fees to plaintiffs because the litigation involved numerous complex or novel questions which defendant had litigated vigorously and in good faith. The district court's assessment of this case is amply supported by the record and the issues raised on appeal and cross-appeal. We cannot say that the district court abused its discretion in refusing to award reasonable attorney's fees to plaintiffs.