Opinion ID: 2995865
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: Matter of Law or a New Trial We review the denial of a post-trial motion for judgment as a matter of law de novo but view the evidence in a light most favorable to the nonmoving party. See Am. Nat’l Bank & Trust v. Reg’l Transp. Auth., 125 F.3d 420, 431 (7th Cir. 1997). In applying this de novo standard of review, we evaluate whether any reasonable jury could have reached the same conclusion. See id. If we answer this question affirmatively, then we will not overturn the district court’s denial of the motion. See id. With respect 8 Nos. 01-1744 and 01-2119 to Yang and Liu’s motion for a new trial, we will only overturn the district court’s denial of this motion for an abuse of discretion. See id. Under this standard, “we shall not second-guess the decision of a trial judge that is in conformity with established legal principles and, in terms of its application of those principles to the facts of the case, is within the range of options from which one would expect a reasonable trial judge to select.” Id. (quotation omitted). Yang and Liu do not dispute that Price Waterhouse authorized Yang and the Sky Company programmers to produce a derivative work using the original RevUp32 program. Instead, Yang and Liu contend that contrary to the findings below, the intent of the parties is irrelevant to the question of who owns the copyrights in the derivative work. They assert that even if the parties intended that Price Waterhouse would own the copyrights in the derivative work, Price Waterhouse by law cannot own these copyrights because the derivative work’s authors did not execute a written document assigning ownership of the derivative work to Price Waterhouse pursuant to 17 U.S.C. § 204(a). Section 204(a) provides that “[a] transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.” 17 U.S.C. § 204(a). Yang and Liu’s reasoning is flawed. Price Waterhouse, as the owner of the copyrights in the original RevUp32 program, possesses the exclusive right to prepare derivative works from this original program. See 17 U.S.C. § 106(2); Stewart v. Abend, 495 U.S. 207, 220, 110 S. Ct. 1750, 109 L. Ed. 2d 184 (1990). Because Price Warehouse possesses such an exclusive right, in order for the Sky Company programmers to have lawfully prepared a deNos. 01-1744 and 01-2119 9 rivative work, the programmers needed authorization from Price Waterhouse to use its original program. See S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1088-89 (9th Cir. 1989). The June 7, 1995 letter agreement authorized Yang to recruit the Sky Company programmers to use its original work to prepare a derivative work. Because the trial court found that the language of the June 7, 1995 agreement was ambiguous, it was appropriate to look at the intent of the parties to determine the scope of the Sky Company programmers’ authorization. The June 7, 1995 letter agreement stated that “[u]pon completion of the project, ALL source code will be given back to Price Waterhouse.” Viewing this language in a light most favorable to Price Waterhouse and CLR, the license agreement provided that Price Waterhouse, not the Sky Company programmers, would obtain copyright ownership of the China RevUp32 program. Further, obtaining copyright protection in the derivative work was beyond the scope of the permissible uses authorized by the June 7, 1995 letter agreement. See 1 NIMMER ON COPYRIGHT § 3.06, at 3-34.26 at 26(1) (2002) (“[T]he right to claim copyright in a noninfringing derivative work arises by operation of law, not through authority from the copyright owner of the underlying work. Nonetheless, if the pertinent agreement between the parties affirmatively bars the licensee from obtaining copyright protection even in a licensed derivative work, that contractual provision would appear to govern.”) (emphasis added); see also Gracen v. Bradford Exch., 698 F.2d 300, 303 (7th Cir. 1983) (stating that “[e]ven if [Gracen] was authorized to exhibit her derivative works, she may not have been authorized to copyright them”). Contrary to Yang and Liu’s argument on appeal, because the Sky Company programmers never had any owner- ship interest in the copyrights in the derivative China 10 Nos. 01-1744 and 01-2119 RevUp32 program, 17 U.S.C. § 204(a) is inapplicable. As the district court explained: While the Copyright Act makes authors of derivative works the presumptive owners of copyright rights in their contribution, it also allows parties to adjust those rights by contract. Here, the jury found that the parties to the letter agreement did just that—agreed that Price Waterhouse would hold the copyright in the derivative work. Because of the ambiguity in the letter agreement, it was necessary and proper for the jury to consider “the parties’ ” intent in entering into the letter agreement in order to determine the respective rights of Price Waterhouse, Yang and the subsequent authors of the derivative work, even though those subsequent authors, the Sky Company Programmers, did not sign the letter agreement. Because the jury found that, pursuant to the June 7, 1995 letter agreement, the parties intended that Price Waterhouse would own the copyrights in the derivative work, we find no error in the district court’s denial of Yang and Liu’s motion for judgment as a matter of law and no abuse of discretion in the district court’s denial of Yang and Liu’s motion for a new trial.3
Next, Liu argues that we should reverse the district court’s denial of her motion in limine to exclude the testimony of Price Waterhouse and CLR’s accounting expert, 3 We do not need to reach the merits of Yang and Liu’s second argument on appeal—that the district court erred in denying certain revised jury instructions regarding damages—as it relies upon a finding that Liu was the true owner of the copyright in the China RevUp32 program. Nos. 01-1744 and 01-2119 11 Julie Davis, on the issue of Liu’s alleged damages due to Price Waterhouse and CLR’s copyright infringement. We review a trial court’s ruling on the admission of expert testimony for an abuse of discretion. See Bourelle v. Crown Equip. Corp., 220 F.3d 532, 535 (7th Cir. 2000). However, we note that even if the district court abused its discretion in admitting Davis’s expert testimony, such an error is not grounds “for granting a new trial or for setting aside a verdict or for vacating, modifying, or otherwise disturbing a judgment or order, unless refusal to take such action appears to the court inconsistent with substantial justice.” FED. R. CIV. P. 61; see also Palmquist v. Selvik, 111 F.3d 1332, 1339 (7th Cir. 1997) (“Disturbing the judgment of the district court on evidentiary grounds is necessary only if an erroneous ruling had a substantial influence over the jury.”) (quotation omitted). Accordingly, we will not reverse a jury verdict if an erroneous admission of expert testimony is harmless; we recognize that an error is harmless if it did not contribute to the verdict in a meaningful manner. See Jones v. Lincoln Elec. Co., 188 F.3d 709, 725 (7th Cir. 1999). In the present case, Davis testified to the amount of damages Liu sustained on account of Price Waterhouse and CLR’s alleged infringement of her copyrights. The jury, however, never actually reached this issue when determining their verdict because the jury found that neither Price Waterhouse nor CLR was liable to Liu for any damages for infringement, as neither party was found to have committed copyright infringement. Therefore, Davis’s testimony was irrelevant to the jury’s verdict. Thus, even if we were to assume that the district court did err in denying Liu’s motion in limine, we would not disturb the judgment of the district court as Davis’s testimony cannot be shown to have had any influence at all upon the jury’s verdict. 12 Nos. 01-1744 and 01-2119
Next, Yang argues that the district court’s grant of Price Waterhouse and CLR’s motion for remittitur should be reversed because she claims that she is entitled to excess damages above and beyond the $246,000 under several different theories of tort liability. “[A] jury has wide discretion in determining damages.” Am. Nat’l Bank & Trust, 125 F.3d at 437. And a “trial judge may vacate a jury’s verdict for excessiveness only when the award was ‘monstrously excessive’ or the award has ‘no rational connection to the evidence.’ ” DeBiasio v. Ill. Cent. R.R., 52 F.3d 678, 687 (7th Cir. 1995); see also Frazier v. Norfolk & W. Railway Co., 996 F.2d 922, 925 (7th Cir. 1993). Here, the district court explained that the only evidence Yang submitted in support of her breach-of-contract damages was her invoice to Price Waterhouse for $246,000. Additionally, Yang failed to plead any allegations of tortious conduct; the jury was never instructed on the elements of any torts that Yang now argues support the jury’s $600,000 verdict; and finally, Yang consented to jury instructions that limited her contract damages to $264,000. This last reason standing alone is sufficient to find against Yang on appeal. See Jabat, Inc. v. Smith, 201 F.3d 852, 857 (7th Cir. 2000) (“When parties do not object to jury instructions, these instructions generally become the law of the case.”) (quotation omitted). Once the law of the case is settled, the parties can only argue that the jury did not properly apply the instructions to the facts. See id. Consequently, we find no error in the district court’s determination that a portion of the jury’s award was not rationally connected to the evidence.
Finally, Yang argues that under the Illinois Interest Act, 815 ILCS 205/2 (1998), she is entitled to prejudgment Nos. 01-1744 and 01-2119 13 interest on her breach-of-contract claim.4 Here, the district court denied Yang prejudgment interest because Price Waterhouse had a good-faith dispute with Yang regarding ownership of the source code in the China RevUp32. Yang argues that it does not matter that there was a good-faith dispute over the source code. Rather, Yang asserts that as long as the amount she was owed was readily ascertainable, she is entitled to prejudgment interest. A district court’s decision to award or deny prejudgment interest will not be disturbed unless that decision constitutes an abuse of discretion. See Singer Co. v. Skil Corp., 803 F.2d 336, 341 (7th Cir. 1986). Under the Illinois Interest Act, a creditor is entitled to receive a 5% per annum interest rate on all monies after they become due if they are being withheld by an unreasonable and vexatious delay of payment. 815 ILCS § 205/2. However, if payment is being withheld in good faith, because of a genuine and reasonable dispute, interest will not be awarded. See Gen. Dynamics Corp. v. Zion State Bank & Trust Co., 427 N.E.2d 131, 134 (Ill. 1981). This good-faith exception recognized in General Dynamics has been limited by the Illinois appellate courts. In Weidner v. Szostek, 614 N.E.2d 879, 883-84 (Ill. App. Ct. 1993), the Illinois appellate court explained that when parties’ contracts specifically provide for prejudgment interest on amounts past due, the good-faith exception set out in General Dynamics is inapplicable. However, when a prejudgment interest award is being claimed pursuant to a statute, then the good-faith exception set out in General Dymanics 4 Yang also argues that the district court abused its discretion when it denied her motion for costs. Yang premises this argument on the assumption that we would find Liu to be the proper owner of the copyright in the China RevUp32 program. Because we made no such finding, there is no need to discuss this argument. 14 Nos. 01-1744 and 01-2119 may apply. See id. Although the Illinois Supreme Court has not spoken directly to this issue, we believe that the Illinois appellate court’s position is correct. Here, Yang is claiming prejudgment interest pursuant to the Illinois Interest Act, 815 ILSC § 205/2. The parties themselves, however, never contemplated awarding prejudgment interest on amounts past due in their agreement. Thus, in this instance the General Dynamics goodfaith exception could be applicable. Because Yang failed to turn over the source code pursuant to the June 7, 1995 letter agreement, we believe that the district court did not abuse its discretion in finding that payment was being withheld by Price Waterhouse in good faith because of a genuine and reasonable dispute between the parties and that therefore, Yang was not entitled to an award of prejudgment interest.