Court Opinion

ID: 9492382
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:40:06.961251+00
Date Added: 2024-06-11T17:55:16.933647
License: Public Domain

MANION, Circuit Judge,
concurring in part and dissenting in part.
The court accurately sets out the law governing copyright law but I respectfully dissent from the court’s application of that law. In all other respects I concur.
At this point in the litigation, the defendants do not dispute that Kennedy has a valid copyright interest in his report. As copyright holder, Kennedy has three exclusive rights that are relevant here: the right “to reproduce the copyrighted work,” 17 U.S.C. § 106(1); the right “to prepare derivative works based upon the copyrighted work,” § 106(2); and the right “to distribute copies ... of the copyrighted work,” § 106(3). Kennedy alleges, and the defendants do not dispute, that the report the defendants prepared is a derivative work based upon his report. The issue before us, then, is whether the defendants had a license to make this derivative work.
As the court notes, opn. at 693, the contract between the parties contained two separate clauses granting the defendants rights in works created as part of the study: one clause applied (presumably to non-copyrightable materials) generally, and the other applied to copyrightable works. The general clause stated: “the government has the right to use, duplicate and disclose, in whole or in part, such materials in any manner or for any purpose whatsoever.” The clause for copyrightable works was similar, but different in important respects: “the government reserves a royalty-free non-exclusive and irreversible license to reproduce, publish, and use such materials in whole or in part.” First, the clause governing copyrightable materials does not include the phrase from the general clause “in any manner or for any purpose whatsoever,” so it apparently grants somewhat more limited rights than does the general clause. Second, two of the three verbs describing the rights granted are different. Although the words used in the general clause, “duplicate” and “disclose,” are very similar in meaning to the ones used in the copyrightable clause, “reproduce” and “publish,” the latter two are terms of art taken from the Copyright Act while the former are not. As noted above, a copyright holder has the right to “reproduce” and “distribute” the copyrighted work, and under the Act “publish” means the same as “distribute,” see 17 U.S.C. § 101 (defines “publication” using same language that § 106(3) uses to describe “distribute”). There is no dispute then that the contract unambiguously grants the defendants two of Kennedy’s exclusive statutory rights. But those two don’t include the third, the right to make derivative works, the right at issue here.
So the issue is whether “use,” the third verb in the clause, unambiguously grants to the defendants the right to prepare derivative works. The other two verbs in this clause are unambiguous because they are statutory terms of art. But the drafters of the contract (the defendants) chose not to use the third term of art — “prepare derivative works.” Instead they used the vague term “use.” This suggests that the parties intended “use” to mean something other than simply “prepare derivative works.” They may have intended it to mean something more than prepare derivative works or perhaps something less. It is very possible that they intended it to mean only prepare derivative works. But their intention is not clear from the contract’s text, and so this term is “ambiguous.” Rosplock v. Rosplock, 217 Wis.2d 22, 577 N.W.2d 32, 36 (App.1998) (“A written contract is ambiguous if it is reason*698ably susceptible to more than one meaning.”)- Thus the parties should be given the opportunity to create a record to show what meaning was intended, see Jones v. Jenkins, 88 Wis.2d 712, 277 N.W.2d 815, 819 (1979) (“where an ambiguity exists in a contract which requires resort to extrinsic evidence, the question is one of fact”), and doubts should be construed against the drafters to the extent doing so does not otherwise frustrate the intentions of the parties, Kohler Co. v. Wixen, 204 Wis.2d 327, 555 N.W.2d 640, 645 (App.1996). Thus I would reverse the district court’s dismissal under Fed.R.Civ.P. 12(b)(6).
IJJC also raised an Eleventh Amendment argument that the district court did not decide. (This issue has no impact on NJDA because it is not a state actor.) Whether the Eleventh Amendment bars copyright suits against the states is a difficult issue, but one we need not decide. On April 20, 1999, the Supreme Court heard arguments in two companion cases that raise this issue. College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, No. 98-149; Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, No. 98-531. Were this case remanded, the district court could consider these anticipated Supreme Court decisions.