O'KELLEY, Chief Judge.
This case is presently before the court for consideration of the defendants' motions to dismiss and for summary judgment, and the plaintiffs' motions to withdraw admissions and for leave to file a supplemental brief. On January 26, 1989, the court heard oral argument on all motions save the motion to file a supplemental brief, after which it took the matters under advisement. After careful consideration, the court denies the defendants' motion to dismiss, grants in part and denies in part their motion for summary judgment, and grants the plaintiffs' motions to withdraw admissions and to file a supplemental brief.
Natalie Howard ("Howard") and Custom Home Plans, Inc. ("Custom") brought this action alleging copyright infringement under the Copyright Act of 1976, 17 U.S.C. § 101, et seq. ("the Act"), and other state law pendent claims. Jurisdiction is based upon a federal question. 28 U.S.C. § 1338(b). The defendants are John Sterchi ("Sterchi"), Stonemill Log Homes, Inc. ("Stonemill"), and Mattox Development Co., Inc. ("Mattox").
Howard is a designer of country-style and log homes. She and her husband established Custom to market and promote Howard's designs. Stonemill and Mattox are allegedly joint venturers in the manufacture and supply of materials, components
The oral and written agreements permitted Stonemill to use several of Howard's log cabin designs in its promotion efforts. The plaintiffs submit that the parties intended to create a joint marketing effort in which Stonemill would advertise and otherwise promote the use of Howard's log designs for the benefit of both parties.
Howard developed a log home plan book for Stonemill, using particular designs from Howard's preexisting country home plan books. The plaintiffs further maintain that Stonemill, through Sterchi, its agent, agreed to have the log renderings for the new log plan book redrawn from preexisting designs, and to provide attribution and credit to Howard for any of her log designs or renderings
Howard terminated the contracts by written notice on November 22, 1983. However, the plaintiffs contend that the defendants have continued to use certain of Howard's plans in violation of her copyrights. The defendants have counterclaimed for invalidity of those and other purported copyrights on Howard's designs, and have also asserted various pendent state law counterclaims.
Motion to Dismiss
The defendants have moved to dismiss the plaintiffs' copyright claims pursuant to Fed.R.Civ.P. 12(b)(1). Specifically, the defendants seek dismissal of the plaintiffs' copyright claims regarding floor plan F-1080, and log renderings for floor plans L-10, L-1390, F-780/L-780, maintaining that the complaint as to these designs is jurisdictionally deficient for failure to allege registration of independent copyrights. 17 U.S.C. § 411(a).
The plaintiffs allege that Howard secured copyright registration certificates for certain "books" as "compilations" under the Act.
Section 103(b) indeed provides no additional copyright protection for preexisting material contained in a compilation or derivative work. The copyright interest protected by registration of a compilation typically relates solely to author's "`selection, organization and arrangement of the preexisting materials.'" Southern Bell Tel. & Tel. Co. v. Associated Telephone Directory Publishers, 756 F.2d 801, 809 (11th Cir.1985) (quoting Boorstyn, Copyright Law, § 2:19 at 59 (1981)). Likewise, the protection afforded registration of a derivative work embraces the "non-trivial, original features, if any, contributed by [its] author or creator." Durham Industries, Inc. v. Tomy Corp., 630 F.2d 905, 909 (2d Cir.1980). The registration of a "collective work," a specie of compilation, typically protects the arrangement of separate and independently copyrightable works.
The essence of the plaintiffs' defense to the motion is not that the defendants have infringed the selection, organization and arrangement of the plans in the book, but rather that the defendants have infringed copyrights to the modifications made to the preexisting plans. The chief issue, therefore, is whether Howard properly registered her purported copyrights in independent derivative works by registering the plan books in which they were published.
This is a question of first impression, and one not specifically addressed in the Act. Although registration of a collective work compilation is typically associated with protection of the manner of assemblage of materials, the court fathoms no reason why the "new material contributed by the author" protected under § 103(b) should be limited to organizational contributions.
This conclusion is bolstered by analogy to the notice of copyright provision under the Act. 17 U.S.C. § 404(a). Section 404(a) provides that a single copyright notice on a collective work satisfies the notice requirements with respect to each component of the collective work, regardless of the ownership of the copyrights for the independent components. 17 U.S.C. § 404(a). Section 404(a) further envisions that an author compiling her own separate works in a book need only notice the copyright as to the compilation, and need not place a notice of copyright as to each of the components. See, e.g., Donald Frederick Evans & Assoc., Inc. v. Continental Homes, Inc., 785 F.2d 897, 906-07 (11th Cir.1986) (discussing § 404(a) and the advertising exception thereto). Similarly, the copyright registration for a compilation should arguably serve as registration for its components. Accordingly, the court denies the motion to dismiss.
Motion to Withdraw And/Or Amend Admissions
The plaintiffs have moved to withdraw several admissions of fact made on October 29, 1987. Fed.R.Civ.P. 36(b). These admissions were drafted by the plaintiffs' former counsel, Richard Tunkle, and primarily relate Howard's and Attorney Tunkle's belief that certain floor and log home plans were substantially similar to other plans in the public domain. The motion to withdraw or amend was filed 14 months after the admissions were made and 1 month after the defendants filed their motion for summary judgment. The plaintiffs contend that Attorney Tunkle drafted the admissions at a time when he was upset over a pending motion for rule 11 sanctions for filing meritless infringement claims in this case. The plaintiffs further argue that they acted too hastily in assuming and admitting the similarity of the plans during this pensive time, and claim that subsequent reflection revealed to them that the admissions were incorrect. The plaintiffs now wish to withdraw the admissions to correct their error.
See also Smith v. First Nat'l Bank of Atlanta, 837 F.2d 1575, 1577 (11th Cir.), cert. denied, ___ U.S. ___, 109 S.Ct. 64, 102 L.Ed.2d 41 (1988). Rule 36(b) strikes a balance between the competing interests of having a case resolved on the merits and avoiding prejudice to a party who justifiably relies on an admission. Id. at 1577-78 (citing the advisory committee's note to rule 36(b)). Prejudice under the rule "`relates to the difficulty a party may face in proving its case, e.g., caused by the unavailability of key witnesses, because of the sudden need to obtain evidence with respect to the questions previously answered by the admissions.'" Id. at 1578 (quoting Brook Village North Assoc. v. General Elec. Co., 686 F.2d 66, 70 (1st Cir.1982)).
At the hearing on January 26, 1989, the court intimated that it would grant the motion to the extent the amendments were consistent with Howard's deposition testimony. At that time the court assumed that her deposition was recorded much later than the admissions. In fact, the defendants deposed her 9 days prior to the date of the admissions. Hence, Howard labored under the same pressures during the deposition as she did when conferring with Attorney Tunkle prior to the drafting of the admissions. Hence, she did not enjoy the benefit of detached reflection prior to the deposition. As such, the deposition testimony regarding the subject matter of the admissions provides little assistance to the court in determining whether the amendments are fabrications, or whether the plaintiffs' original admissions were simply based upon a faulty assumption. See Reyes v. Vantage S.S. Co., Inc., 672 F.2d 556, 557 (5th Cir.1982).
The court, however, is aware that the defendants detrimentally relied upon the earlier admissions in preparing their motion for summary judgment on their counterclaims. Accordingly, the court permits them 10 days in which to move for expenses and fees occasioned by their reliance on the original admissions.
Motion for Summary Judgment
The defendants have moved for summary judgment as to various claims and counterclaims in this case. At the outset, the court notes that summary judgment is proper only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to summary judgment as a matter of law." Fed.R.Civ.P. 56(c). Because the procedure deprives parties of a trial on the issues, the court must be careful to ensure that only those claims for which there is no need for a factual determination as to any material fact are disposed of by summary judgment. Celotex v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The summary judgment procedure, however, is not regarded as a "disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.' Fed.Rule Civ.Proc. 1." Id.
Summary judgment will not lie when sufficient evidence exists to cause a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The standard for evaluating summary judgment motions mirrors the standard for a directed verdict under Federal Rule of Civil Procedure 50(a). Id. 106 S.Ct. at 2511. Hence, the trial court may grant summary judgment only when there can be but one reasonable conclusion as to judgment under the applicable law. Id. With these fundamental notions in mind, the court turns its attention to the instant case.
The defendants' motion embraces the following categories of claims: (1) the plaintiffs' copyright infringement claims for log renderings L-10, L-1390, and F-780/L-780, and for floor plan F-1080/L-1080; (2) the plaintiffs' pendent state law claims for breach of contract, breach of implied duty of good faith and fair dealing, and unjust enrichment;
Plaintiffs' Copyright Infringement Claims for Log Renderings L-10, L-1390, and F-780/L-780, and for Floor Plan F-1080/L-1080
The plaintiffs claim that the defendants infringed Howard's copyrights in log renderings L-10, L-1390 and F-780/L-780.
The plaintiffs allege a direct ownership interest in the renderings under the "work made for hire" doctrine. However, their arguments in this regard are cryptic at best, and entirely absent from their briefs in opposition to summary judgment. However, the court determines by implication that the there is a genuine question of material fact regarding whether Matthews was an employee of Sterchi under § 101(1). Neither party has argued this specific issue, although its resolution is critical to the proper application of the "work made for hire" doctrine. If the plaintiffs prove that Matthews was an employee, the renderings might have become "work made for hire," and the property of the plaintiffs through Sterchi's alleged agency relationship with Howard.
Furthermore, the court concludes that additional genuine issues of material fact remain regarding the validity of the plaintiffs' copyrights on these three log renderings, as well as log rendering F-780, and floor plan F-1080/L-1080. The chief question of material fact is whether the renderings and floor plan were sufficiently original to be copyrightable. Durham Industries, Inc. v. Tomy Corp., 630 F.2d 905, 908-11 (2d Cir.1980). Furthermore, regarding floor plan F-1080/L-1080, a genuine issue of material fact exists as to whether the plaintiffs knowingly failed to supply information to the copyright office by omitting certain information from item six on the relevant copyright application. Original Appalachian Artworks, Inc. v. Toy Loft, 684 F.2d 821, 827-28 (11th Cir.1982).
Plaintiffs' Pendent Claims for Breach of Contract, Breach of Implied Duty of Good Faith and Fair Dealing, and Unjust Enrichment
The defendants have moved for summary judgment on the plaintiffs' pendent state law claims for breach of contract (Counts Five and Six), breach of implied duty of good faith and fair dealing (Count Eight), and unjust enrichment (Count Seven). All of these claims relate to the alleged oral contract between Howard and Stonemill. The defendants maintain that these claims are preempted by the Act. 17 U.S.C. § 301.
This circuit has held that § 301 establishes a two-prong test for determination of preemption. See Crow v. Wainright, 720 F.2d 1224, 1225-26 (11th Cir.1983), cert. denied, 469 U.S. 819, 105 S.Ct. 89, 83 L.Ed.2d 35 (1984). That test requires the court to "determine whether the rights at issue fall within the `subject matter of copyright' set forth in sections 102 and 103 and whether the rights at issue are `equivalent to' the exclusive rights of section 106." Id. See also Donald Frederick Evans & Assoc., Inc. v. Continental Homes, Inc., 785 F.2d 897, 914 (11th Cir.1986). Assuming the rights implicated by a state law claim fall within the subject matter of § 102 and § 103, the claim is nevertheless deemed not equivalent to rights under the Act if additional elements must be proven.
The log floor plans and renderings at issue under the oral contract are clearly within the subject matter of the Act inasmuch as they are "pictorial" and "graphic" works under § 102(a)(5). Therefore, the sole issue for determining preemption is whether the rights alleged are equivalent to the exclusive rights under § 106. Section 106 states, in relevant part that
The pendent state claims for breach of contract and breach of implied duty of good faith and fair dealing are not equivalent to any of the exclusive rights listed in § 106. These claims are not based solely upon Stonemill's use of the plans and renderings. Rather, the plaintiffs seek recovery for Stonemill's failure to attribute the designs to Howard. The plaintiffs properly analogize this to a breach of an agreement to pay royalties.
Similarly, the claim for unjust enrichment, Count Seven, requires proof of an additional element beyond unauthorized use. Howard endorsed Stonemill by listing it as exclusive dealer in the log home plan book. Stonemill allegedly failed to attribute authorship of the plans to Howard in return for this benefit, and therefore may have been unjustly enriched. Accordingly, the court concludes that the claim for unjust enrichment is not preempted under the Act.
Defendants' Counterclaims Regarding Construction Plans L-13, L-1252, L-130 and L-1390
The defendants seek summary judgment on their claims for declaratory relief regarding the invalidity of copyrights for construction plans L-13, L-1252, L-130 and L-1390. The plaintiffs have admitted that these plans were published without notice of copyright as required by § 401 of the Act. Specifically, Howard has admitted the following facts regarding publication of the designs for the time period ending on December 31, 1988:
Section 405 of the Act provides that a copyright owner's distribution of a work without notice invalidates the copyright. That section provides exceptions to this general rule, only one of which, embraced in § 405(a)(1), is factually applicable to the instant case.
In an early application of § 405(a)(1), this circuit concluded that 400 of 40,000 items (or 1%) distributed without notice of copyright constituted a relatively small number. Original Appalachian Artworks, Inc. v. Toy Loft, 684 F.2d 821, 827 (11th Cir.1982). The court in that case emphasized the small percentage of works published without notice as important in resolving the issue. Id. In Donald Frederick Evans & Assoc., Inc. v. Continental Homes, Inc., 785 F.2d 897, 910 (11th Cir.1986), the panel held that a court applying § 405(a)(1) must look to both the absolute and relative numbers published, and further instructed that the court must analyze the issue "on a case-by-case basis in light of the totality of the circumstances." Evans, 785 F.2d at 910.
In this case it is clear that significant numbers of each of the plans at issue were distributed without notice of copyright.
Defendants' Counterclaims Regarding Floor Plans L-13, L-1252, L-130 and L-1390
The plaintiffs have conceded the invalidity of the copyrights regarding floor plans
Accordingly, the court denies the defendants' motion to dismiss, and grants in part and denies in part their motion for summary judgment. Specifically, the court grants summary judgment in favor of the defendants as to their counterclaims for declaration of invalidity of copyrights for construction plans L-13, L-1252, L-130 and L-1390, and floor plans L-1252, L-130 and L-1390. Further, the court grants the plaintiffs' motions to withdraw admissions and to file a supplemental brief. The defendants are allowed 10 days to file a motion for fees and expenses for work occasioned by their reliance on the withdrawn admissions. Finally, the clerk is directed to set this case for a pretrial conference on the next available pretrial calendar after the close of discovery.
IT IS SO ORDERED.
2 Nimmer on Copyright § 7.16[B] (emphasis in original) (footnote omitted). See also Rexnord, Inc. v. Modern Handling Systems, Inc., 379 F.Supp. 1190, 1198-99 (D.Del.1974) (same result under 1909 Act).
The defendants have argued in their motion for summary judgment that Howard is not the owner of two of the log renderings at issue. Of course, a different result might obtain as to those renderings if the defendants prove that Howard is not the owner.
L-1390: 64 of 150 sets sold without notice, or 43%
L-130: 169 of 393 sets sold without notice, or 43%
L-1252: 81 of 155 sets sold without notice, or 52%
L-13: 107 of 193 sets sold without notice, or 55%
L-1390: 39 of 98 sets sold without notice by Plaintiff Howard, or 40%
L-130: 98 of 241 sets sold without notice by Plaintiff Howard, or 41%
L-1252: 55 of 100 sets sold without notice by Plaintiff Howard, or 55%
L-13: 71 of 122 sets sold without notice by Plaintiff Howard, or 58%