Court Opinion

ID: 4533877
Source: CourtListenerOpinion
Date Created: 2020-05-13 17:00:42.573484+00
Date Added: 2024-06-11T12:39:08.921164
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

 DOC’S DREAM, LLC,                                 No. 18-56073
                Plaintiff-Appellee,
                                                     D.C. No.
                     v.                          2:15-CV-02857-
                                                      R-PLA
 DOLORES PRESS, INC. AND MELISSA
 SCOTT,
            Defendants-Appellants.                   OPINION

        Appeal from the United States District Court
           for the Central District of California
         Manuel L. Real, District Judge, Presiding

                    Submitted May 6, 2020 *
                     Pasadena, California

                       Filed May 13, 2020

    *
       The court is of the unanimous opinion that the facts and legal
arguments are adequately presented in the briefs and record, and the
decisional process would not be significantly aided by oral argument.
Accordingly, this case was submitted on the briefs and record, without
oral argument, on Wednesday, May 6, 2020. Fed. R. App. P. 34(a)(2).
2              DOC’S DREAM V. DOLORES PRESS

Before: Consuelo M. Callahan and John B. Owens, Circuit
    Judges, and Edward R. Korman, ** District Judge.

                   Opinion by Judge Callahan

                          SUMMARY ***

                  Copyright / Attorney’s Fees

    The panel vacated the district court’s order denying
defendant’s motion for recovery of attorney’s fees under the
Copyright Act and remanded.

    The district court granted summary judgment in favor of
defendant on a complaint seeking a declaration that the
works at issue were abandoned to the public domain. The
district court denied defendant’s motion for attorney’s fees,
holding that fees were not available under 17 U.S.C. § 505
because the determination of copyright abandonment did not
require construction of the Copyright Act.

    Vacating the district court’s order, the panel held that,
even when asserted as a claim for declaratory relief, any
action that turns on the existence of a valid copyright and
whether that copyright has been infringed invokes the
Copyright Act, thus giving the district court discretion to
award reasonable attorney’s fees pursuant to § 505.

    **
       The Honorable Edward R. Korman, United States District Judge
for the Eastern District of New York, sitting by designation.
    ***
        This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
             DOC’S DREAM V. DOLORES PRESS                 3

                       COUNSEL

Benjamin G. Schatz, Manatt Phelps & Phillips LLP, Los
Angeles, California; Kevin J. Leichter and Andrew E.
Hewitt, The Leichter Firm APC, Los Angeles, California;
Mark S. Lee, Rimon PC, Los Angeles, California; for
Defendants-Appellants.

Carlos A. Leyva and Linda S. McAleer, Digital Business
Law Group PA, Palm Harbor, Florida, for Plaintiff-
Appellee.

                        OPINION

CALLAHAN, Circuit Judge:

    Since 2014, two camps have battled over the ownership
rights and usage of video-recorded sermons created by the
late religious leader Dr. Eugene Scott. One camp—
copyright claimants Dolores Press, Inc. and Melissa Scott
(collectively, Dolores)—alleges that the other camp—
Patrick Robinson, Truth Seekers, Inc., Doc’s Dream, LLC,
and Bobbi Jones (collectively, Doc’s Dream)—infringed
copyrighted broadcasts via the Internet. Amid the litany of
claims, counterclaims, and motions, the district court
granted summary judgment in favor of Dolores on Doc’s
Dream’s complaint seeking a declaration that Dr. Scott
completely abandoned his works to the public domain.
Doc’s Dream appealed and we affirmed. Doc’s Dream, LLC
v. Dolores Press, Inc., 766 F. App’x 467 (9th Cir. 2019).

    Dolores then moved for recovery of attorney’s fees under
the Copyright Act, which allows the court to award “a
reasonable attorney’s fee” to the prevailing party “[i]n any
4            DOC’S DREAM V. DOLORES PRESS

civil action under this title.” 17 U.S.C. § 505. The district
court denied Dolores’ motion, holding that attorney’s fees
were not available under § 505 because the determination of
copyright abandonment in this case did not require
“construction” of the Copyright Act.

    Dolores timely appealed the district court’s denial of
attorney’s fees, and we have jurisdiction under 28 U.S.C.
§ 1291. We hold that, even when asserted as a claim for
declaratory relief, any action that turns on the existence of a
valid copyright and whether that copyright has been
infringed invokes the Copyright Act, and thus attorney’s fees
may be available pursuant to § 505.

                              I.

    The underlying facts are undisputed. Dr. Eugene Scott
worked as an ordained minister for nearly half a century, the
last 35 years as the pastor of the Wescott Christian Center
and Faith Center in Glendale, California. In 1983, he
launched the first 24-hour-a-day religious television
network, reaching audiences throughout North America. In
1995, he licensed Dolores Press, Inc. to distribute his works
to the public, with profits going to his church. During this
time, Dr. Scott made his works available for online viewing
through websites bearing his name. When Dr. Scott died in
2005, he bequeathed all his copyrights to his widow, Pastor
Melissa Scott. Ms. Scott continued the license agreement
with Dolores Press, Inc.

    In 2014, Patrick Robinson, a Georgia minister and sole
owner of Doc’s Dream, requested permission to share
Dr. Scott’s works with his students online. When Ms. Scott
refused his request, Robinson launched a website sharing
Dr. Scott’s works in order “to stick it to the devil” and “get
             DOC’S DREAM V. DOLORES PRESS                    5

the ball rolling in this legal battle.” Robinson succeeded in
the latter.

    Initially, the parties filed four actions. In three of the
lawsuits, Dolores alleged copyright infringement by Doc’s
Dream. Doc’s Dream, 766 F. App’x at 469. In the fourth,
Doc’s Dream claimed that Dr. Scott had abandoned rights to
his works before his death. Id. The district court dismissed
Dolores’ three suits and granted summary judgment in favor
of Dolores as to the fourth. Id. at 469–70. On appeal, we
reversed all three dismissals and affirmed the summary
judgment. Id. at 470.

    As the prevailing party in the summary judgment ruling,
Dolores sought recovery of attorney’s fees under the fee-
shifting provision within the Copyright Act. See 17 U.S.C.
§ 505. Dolores argued that it was eligible for attorney’s fees
because Doc’s Dream’s claim for declaratory relief was:
(1) unreasonable given its slim chance of success;
(2) brought in bad faith because of Doc’s Dream’s
underhanded tactics; and (3) worthy of deterrence as a
meritless claim that forced Dolores to incur defensive legal
costs. See Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct.
1979, 1985 (2016). Dolores also asserted that its request for
$307,689.93 in attorney’s fees was “reasonable.” 17 U.S.C.
§ 505.

    The district court held that attorney’s fees were not
available pursuant to § 505. It reasoned that generally “each
party bears its own litigation expenses absent a statute, rule,
or other ground entitling the moving party to recover
expenses.” The Copyright Act is one such statute, but its
application is not automatic. Noting that the Ninth Circuit
had not explicitly held that attorney’s fees are available
under the Copyright Act in declaratory relief actions, the
district court turned to a leading treatise on copyright law.
6                 DOC’S DREAM V. DOLORES PRESS

See 4 Melville B. Nimmer & David Nimmer, Nimmer on
Copyright (Nimmer). In particular, the district court asserted
“that courts generally award attorneys’ fees under the
Copyright Act in declaratory relief actions so long as the
action requires construction of the Copyright Act.” Nimmer
§14.10[B][1][b].

    The district court read Nimmer to indicate that if a
declaratory relief action is only superficially related to
copyright, it “does not arise under the Copyright Act,” and
“fees could not be awarded under the Copyright Act.”
Addressing the primary issue—whether Dr. Scott had
abandoned his works—the district court explained that
“[c]opyright abandonment is a judicially-created doctrine
based in principles of equity; it is not based on any provision
of the Copyright Act.” It noted that when Congress enacted
the Copyright Act, 25 years after the creation of the
copyright abandonment doctrine, it could have included the
doctrine in the Act—but it did not.

    The district court further asserted that copyright
abandonment, like abandonment in other property contexts,
requires certain elements not enumerated within the
Copyright Act. Here, the critical elements were whether
Dr. Scott displayed “intent to abandon ownership and some
overt act manifesting this intent.” The district court
concluded that determining whether these elements were
met did not require it to construe the Copyright Act. 1

    1
        The district court reasoned:

           [C]opyright abandonment presumes that the creator
           initially enjoyed an intellectual property interest in his
           works. A court’s only task is to determine whether the
           creator subsequently manifested his intent to abandon
             DOC’S DREAM V. DOLORES PRESS                        7

                                II.

    “We review the district court’s decision to award
attorney’s fees under the Copyright Act for an abuse of
discretion.” Fantasy, Inc. v. Fogerty, 94 F.3d 553, 556 (9th
Cir. 1996) (citing Maljack Prods. v. GoodTimes Homes
Video Corp., 81 F.3d 881, 889 (9th Cir. 1996)). However,
“‘any elements of legal analysis and statutory interpretation
which figure in the district court’s decision are reviewable
de novo.’” Id. (quoting Hall v. Bolger, 768 F.2d 1148, 1150
(9th Cir. 1985)).

                                III.

   This appeal raises an issue of first impression in the
Ninth Circuit: whether Doc’s Dream’s underlying action
seeking declaratory relief sufficiently invokes the Copyright
Act as to allow for an award of attorney’s fees under
17 U.S.C. § 505. That statute provides:

       In any civil action under this title, the court in
       its discretion may allow the recovery of full
       costs by or against any party other than the
       United States or an officer thereof. Except as
       otherwise provided by this title, the court

       this interest. Such a task does not require—and in this
       case did not require—the court to construe the
       Copyright Act. See, e.g., Micro Star v. Formgen Inc.,
       154 F.3d 1107, 1114 (9th Cir. 1998) (analyzing
       copyright abandonment without construing Copyright
       Act). . . . Accordingly, the Copyright Act cannot
       provide a basis for costs or fees in this action.
8            DOC’S DREAM V. DOLORES PRESS

       may also award a reasonable attorney’s fee to
       the prevailing party as part of the costs.

17 U.S.C. § 505.

    The district court’s denial of attorney’s fees appears to
be based on two leaps of logic. Neither is persuasive. First,
it held that in order to be a civil action under the Copyright
Act, a declaratory judgment must require “construction” of
the Copyright Act. Second, the district court reasoned that
because copyright abandonment is a judicially created
doctrine based in principles of equity and not on any
provision of the Copyright Act, a declaratory relief action
based on abandonment does not invoke the Copyright Act.

                             A.

    Although § 505 allows for the discretionary award of
attorney’s fees in “any civil action under this title,” the
district court focused on Nimmer’s use of the word
“construction” to limit application of the Copyright Act.
When read in context, Nimmer does not support this
limitation.

    Nimmer states that § 505 “prevents copyright
infringements from going unchallenged” and “serves to
penalize the losing party as well as to compensate the
prevailing party.” Nimmer, supra, §14.10[A]. It then notes
that “[c]lassically, when A sues B for copyright
infringement, the prevailing party is eligible to recover its
attorney’s fees. Accordingly, either A or B may become the
beneficiary of [§ 505], within the court’s discretion.” Id.
§14.10[B][1][a].

   The district court cited Nimmer’s discussion of
declaratory relief in §14.10[B][1][b] to support its
             DOC’S DREAM V. DOLORES PRESS                 9

conclusion that attorney’s fees were not available because
Doc’s Dream’s action did not require construction of the
Copyright Act. A careful reading of the subsection is to the
contrary:

       [I]magine that C sues D for a declaration
       regarding copyright—for instance, that D
       performed her services on a for-hire basis,
       meaning that she has no interest in the
       copyright. In reply, D counterclaims for a
       declaration that she worked outside of
       employment, and accordingly owns the
       copyright in the subject work, either outright
       or as an equal co-owner with C. In that
       instance, jurisdiction in federal court arises
       under the Declaratory Relief Act as well as
       being premised on the need to construe the
       provisions of the Copyright Act. So, the
       Copyright Act allows courts, in their
       discretion, to grant attorney’s fees to the
       prevailing party under those circumstances.

       The same considerations would appear to
       control any time the action at hand requires
       construction of the Copyright Act—such as a
       case in which E sues F for a declaration that
       the work in question falls outside the scope of
       copyright protection or that the exploitation
       at hand falls outside the rights accorded to the
       copyright owner. But, at the limit, one could
       imagine a case requiring no construction of
       the Copyright Act—for instance, one in
       which G sues H for a half share of royalties
       due from exploitation of their shared work.
       In that instance, the case does not appear to
10              DOC’S DREAM V. DOLORES PRESS

         arise under Title 17 of the United States
         Code, and fees therefore may not be awarded
         under the Copyright Act.
Id. §14.10[B][1][b]. 2

     Among Nimmer’s explanatory hypotheticals, the one
involving E and F is nearly identical to this case. Doc’s
Dream sued Dolores alleging that Dr. Scott had abandoned
his works, seeking “a declaration that the work[s] in question
fall[] outside the scope of copyright protection.” Id.
Following Nimmer’s E/F example, this requires
consideration of the Copyright Act.

     Without discussing any of Nimmer’s hypotheticals, the
district court implicitly concluded that Nimmer’s G/H
example—the only hypothetical Nimmer places beyond the
limit of the Copyright Act—applies here. But that
hypothetical involves a contract dispute over royalties due
under an accepted copyright, not a dispute over copyright
ownership. Nimmer notes that such “[a]ccountings between
joint copyright owners are handled strictly under state law.”
Id. at n.18. Doc’s Dream and Dolores contest, at a minimum,
whether Dr. Scott abandoned his copyrights. Thus, the scope
of the copyrights and their possible abandonment are very
much at issue.

    This is the critical distinction between Nimmer’s first
three examples—A/B, C/D, and E/F—in which the parties
dispute copyright ownership or usage, and the fourth, G/H,

     2
      Nimmer’s discussion on declaratory relief contains no citation to
any court decision. Indeed, it recognizes that the contours of “any civil
action under this title” have not been delineated. Nimmer, supra,
§14.10[B][1].
              DOC’S DREAM V. DOLORES PRESS                   11

where they do not. Only in the fourth hypothetical is there
no “construction” of the Copyright Act. We read § 505, as
does Nimmer, to allow the discretionary award of attorney’s
fees in any action where the scope of the copyright is at issue.

                              B.

    We also reject the district court’s assertion that the
genesis of copyright abandonment provides an alternate
ground for denying attorney’s fees. The district court noted
that Judge Learned Hand created the doctrine of copyright
abandonment in Nat’l Comics Publ’ns v. Fawcett Publ’ns,
191 F.2d 594, 598 (2d Cir. 1951) (stating that abandonment
requires “some overt act which manifests [the copyright
holder’s] purpose to surrender his rights in the ‘work,’ and
to allow the public to copy it”). We adopted this standard in
Hampton v. Paramount Pictures Corp., 279 F.2d 100, 104
(9th Cir. 1960). The district court deduced that because this
doctrine predates the Copyright Act by 25 years and
abandonment is not unique to copyright law, the doctrine of
copyright abandonment exists outside the Copyright Act.

    But the judicial origin of the copyright abandonment
doctrine does not mean that an action alleging abandonment
does not invoke the Copyright Act. The district court’s grant
of summary judgment shows that Doc’s Dream’s complaint
raised at least three aspects of the Copyright Act. First, the
district court reasoned that Dr. Scott’s “attribution
requirement is incompatible with copyright abandonment.”
Copyright attribution is governed by 17 U.S.C. § 106A.
Second, the district court stated that Dr. Scott’s free
distribution of his works online “is more consistent with a
license for use” than a relinquishment of his exclusive rights.
The transfer of copyright ownership, including licensing, is
defined within §§ 101 and 204. Third, the district court
explained that because Dr. Scott affixed copyright notices to
12           DOC’S DREAM V. DOLORES PRESS

his works, he did not intend to abandon them. The legal
effect of copyright notices is controlled by § 401. In sum,
the district court’s summary judgment order required
consideration of the Copyright Act.

    Certainly, the elements required for copyright
abandonment—overt acts and intent—parallel other forms
of property abandonment. See United States v. Crawford,
239 F.3d 1086, 1093 (9th Cir. 2001) (physical artwork);
United States v. Orr Water Ditch Co., 256 F.3d 935, 945 (9th
Cir. 2001) (water rights); Pac. Gas & Elec. Co. v.
Zuckerman, 234 Cal. Rptr. 630, 650 (Ct. App. 1987)
(underground gas rights). But it is difficult—if not
impossible—to properly evaluate an intellectual property
creator’s alleged abandonment without invoking the
Copyright Act. The district court asserts that we did so in
Micro Star v. Formgen Inc., 154 F.3d 1107 (9th Cir. 1998).
To the contrary, Micro Star’s finding of partial abandonment
includes an analysis of whether Formgen had granted either
an exclusive or non-exclusive license, requiring reference to
§ 204(a). Id. at 1113–14. Micro Star did not deny that it
was construing the Copyright Act and it did not mention
attorney’s fees.

    In sum, we think that a declaratory relief action alleging
abandonment of a copyright invokes sufficient
“construction” of the Copyright Act to allow for the
discretionary award of attorney’s fees pursuant to 17 U.S.C.
§ 505.

                             C.

   In a final effort to defend the district court’s ruling,
Doc’s Dream asserts that “this is not an action that was
brought under the Copyright Act but rather one that was
brought under the Declaratory Judgment Act (‘DJA’).” This
              DOC’S DREAM V. DOLORES PRESS                    13

assertion fails as it is based on a misunderstanding of the
scope of the DJA and the interplay required between it and
federal questions of law.

    The DJA and Copyright Act work in tandem. In certain
circumstances, “jurisdiction in federal court arises under the
Declaratory Relief Act as well as being premised on the need
to construe the provisions of the Copyright Act.” Nimmer,
supra, §14.10[B][1][b]. The DJA alone does not create
federal jurisdiction. See Skelly Oil Co. v. Phillips Petroleum
Co., 339 U.S. 667, 671 (1950) (“[T]he kinds of issues which
give right of entrance to federal courts . . . was not altered by
the Declaratory Judgment Act.”). It is unclear how, absent
the Copyright Act, Doc’s Dream would have asserted federal
court jurisdiction.

    In any event, Doc’s Dream’s complaint specifically
invoked the Copyright Act. “[A]n action arises under the
federal copyright laws if . . . the complaint is for a remedy
expressly granted by the Act, . . . or asserts a claim requiring
construction of the Act.” Rano v. Sipa Press, Inc., 987 F.2d
580, 584 (9th Cir. 1993) (citations and internal quotations
omitted). Doc’s Dream’s complaint “seeks a declaration
from this Court concerning the Copyright Act,” and alleges
jurisdiction under both 28 U.S.C. §§ 1331 (federal question)
and 1338(a) (copyright). Indeed, in addition to alleging
Dr. Scott’s copyright abandonment, the complaint requested
reasonable attorney’s fees under 17 U.S.C. § 505.

                               D.

    Under § 505, an award of attorney’s fees to a prevailing
party is not automatic and instead lies within the discretion
of the court. See Shame On You Prods., Inc. v. Banks,
893 F.3d 661, 665–66 (9th Cir. 2018). Section 505 gives
“broad leeway” to the district courts, but the Supreme Court
14           DOC’S DREAM V. DOLORES PRESS

has “established several principles and criteria to guide their
decisions.” Kirtsaeng, 136 S. Ct. at 1985 (citing Fogerty v.
Fantasy, Inc., 510 U.S. 517, 519 (1994)). Here, the district
court’s erroneous determination that copyright abandonment
exists beyond the purview of the Copyright Act precluded
such an evaluation.

                             IV.

    The fee-shifting provision of § 505 applies to “any civil
action under” the Copyright Act. We hold that any action
that turns on the existence of a valid copyright and whether
that copyright has been infringed sufficiently invokes the
Copyright Act as to allow for the discretionary award of
attorney’s fees.     This ruling encompasses claims of
copyright abandonment, even when asserted in a claim for
declaratory relief. Accordingly, Doc’s Dream’s claim arises
under the Copyright Act, giving the court discretion to award
reasonable attorney’s fees to Dolores.

    Because the district court’s denial of attorney’s fees was
based on an erroneous view of the law, we vacate and
remand for the district court to consider whether an award of
attorney’s fees is appropriate under the guiding factors. See,
e.g., Fogerty, 510 U.S. at 534 n.19; Shame On You Prods.,
893 F.3d at 665–66.

   Costs on appeal are to be taxed against Doc’s Dream.
See Fed. R. App. P. 39.

     VACATED and REMANDED.