TJOFLAT, Circuit Judge:
The jury in this case found the defendants liable for infringing the plaintiff's copyright in a computer program and for violating section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). The district court entered judgment against the defendants, awarding both actual damages and attorneys' fees to the plaintiff. On appeal, the defendants challenge numerous rulings of the district court. We affirm. In so doing, we endeavor to bring a small measure of clarity to certain "rather swampy"
Plaintiff Robert Montgomery is the author of VPIC, a computer software program that enables users to view pictures on a computer screen. Montgomery integrated several computer programs that he previously had written—each of which was capable of reading different picture file formats—to create the initial version of VPIC in December 1988. VPIC went through several versions during the course of its development, including version 1.3, released on February 2, 1989, and version 1.4, released on March 15, 1989. Montgomery did not register his copyrights in the early versions of VPIC and did not affix a copyright notice when he marketed these early versions on computer bulletin boards. On August 8, 1990, Montgomery registered his copyright in VPIC version 2.9a. VPIC 2.9a and subsequent versions did contain a copyright notice when Montgomery marketed them on computer bulletin board systems.
Upon learning of the defendants' unauthorized use of VPIC, Montgomery—acting through his licensing agent, who sent a letter to the defendants on June 3, 1993—demanded that the defendants cease and desist from using VPIC on FLD products, recall all unsold products containing VPIC, and pay damages for their unauthorized use. The defendants did not comply with these demands; Montgomery therefore filed a complaint against them in the U.S. District Court for the Middle District of Florida on October 25, 1993. The complaint sought damages and injunctive relief for infringement of Montgomery's VPIC copyright in violation of 17 U.S.C. § 101 et seq., and for a violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).
Both Montgomery and the defendants moved for summary judgment on Montgomery's two claims, but the district court denied these motions on January 24, 1995. The case went to trial before a jury on March 20, 1995. At the close of Montgomery's case in chief, the defendants moved for judgment as a matter of law on both claims; the court denied their motion. At the close of all the evidence, Montgomery moved for judgment as a matter of law and the defendants renewed their motion; the court denied these motions as well. The case was then submitted to the jury, which found in favor of Montgomery on both claims and awarded actual damages in the amount of $80,000 for the copyright infringement claim and $30 for the Lanham Act claim.
The district court subsequently entertained several post-trial motions. The court denied the defendants' motion for remittitur or a new trial, as well as their renewed motion for judgment as a matter of law.
The defendants contend that the district court erred in (A) denying their motion for judgment as a matter of law on the copyright infringement claim given that (1) Montgomery's copyright in VPIC 2.9a is invalid because earlier versions of VPIC were injected into the public domain, and (2) the scope of Montgomery's registered copyright in VPIC 2.9a, even if valid, does not extend to protect VPIC 4.3; (B) denying their motion for remittitur or a new trial on the issue of damages with respect to the copyright claim; (C) denying their motion for judgment as a matter of law on the Lanham Act claim; (D) precluding one of their witnesses from testifying as an expert; and (E) awarding Montgomery attorneys' fees on (1) the copyright claim and (2) the Lanham Act claim. We address these contentions seriatim.
In evaluating the defendants' contention that the district court improperly denied their motion for judgment as a matter of law on Montgomery's copyright infringement claim, we proceed from certain basic principles of copyright law. The Copyright Act of 1976, 17 U.S.C. § 101 et seq. (1994), provides protection for computer programs. See Cable/Home Communication Corp. v. Network Prods., Inc., 902 F.2d 829, 842 (11th Cir. 1990); 17 U.S.C. § 102(a) (1994). The Act defines a computer program as "a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result." 17 U.S.C. § 101 (1994). For original computer programs and other original works of authorship created after 1977, copyright automatically inheres in the work at the moment it is created without regard to whether it is ever registered. See Arthur Rutenberg Homes, Inc. v. Drew Homes, Inc., 29 F.3d 1529, 1531 (11th Cir.1994); 17 U.S.C. § 102(a); Melville B. Nimmer & David Nimmer, 2 Nimmer on Copyright § 7.16[A] (1998) [hereinafter Nimmer]. In order to bring an action for copyright infringement, however, the author must first register the copyright. See 17 U.S.C. §§ 411(a), 501(b) (1994); M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486, 1488 & n. 4 (11th Cir.1990) (stating that "[t]he registration requirement is a jurisdictional prerequisite to an infringement suit"). Montgomery's claim of copyright infringement, therefore, necessarily is predicated on the defendants' infringement of VPIC 2.9a—the only version of VPIC that Montgomery had registered at the time he commenced this action.
Once a copyright infringement action has been properly commenced, the copyright holder must prove two elements in order to prevail: "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 1296, 113 L.Ed.2d 358 (1991). Here, the element of copying is not in dispute. The defendants admit that, without obtaining a license from Montgomery, they downloaded VPIC 4.3 from a bulletin board and incorporated it as a utility on four FLD discs.
The defendants challenge the propriety of Montgomery's copyright infringement claim on two grounds. First, they argue that Montgomery does not own a valid copyright in VPIC 2.9a as required by Feist. According to the defendants, Montgomery's copyright in VPIC 2.9a is invalid because earlier versions of VPIC—components of which
The district court rejected these arguments, finding that the jury's verdict was in accordance with both the law and the evidence at trial. We review a district court's denial of a motion for judgment as a matter of law de novo, applying the same standards as the district court. In considering the sufficiency of the evidence that supports the jury's verdict, we review the evidence "in the light most favorable to, and with all reasonable inferences drawn in favor of, the nonmoving party." Walker v. NationsBank of Fla., N.A., 53 F.3d 1548, 1555 (11th Cir.1995). If reasonable and fair-minded persons in the exercise of impartial judgment might reach different conclusions based on the evidence presented, the motion should be denied. See Walls v. Button Gwinnett Bancorp, Inc., 1 F.3d 1198, 1200 (11th Cir. 1993). Questions of law raised by the motion, however, are reviewed de novo. See Morro v. City of Birmingham, 117 F.3d 508, 513 (11th Cir.1997), cert. denied, ___ U.S. ___, 118 S.Ct. 1299, 140 L.Ed.2d 465 (1998). Applying these standards to the two arguments presented by the defendants, we conclude that the district court correctly denied their motion.
The plaintiff in a copyright infringement action normally bears the burden of proving ownership of a valid copyright. In order to meet this burden, the plaintiff must show that the work is original and that the applicable statutory formalities were followed. See Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1541 (11th Cir.1996). Given that Montgomery produced a certificate of copyright registration for VPIC 2.9a at trial, however, he benefited from a rebuttable presumption that the VPIC 2.9a copyright is valid. See 17 U.S.C. § 410(c) (1994).
The defendants' argument that VPIC 2.9a is unprotectable has two parts. Citing 17 U.S.C. § 405(a), the defendants initially claim that VPIC 1.3 and its predecessor versions were injected into the public domain—i.e., that Montgomery forfeited his unregistered copyrights in these versions—because these versions did not contain copyright notices when Montgomery released them to the public prior to March 1, 1989. Second, the defendants assert that the revisions Montgomery made to VPIC in versions 1.4 through 2.9a were not sufficiently original to support a valid copyright in version 2.9a.
We find that the defendants have not met their burden. Assuming arguendo that Montgomery forfeited his copyrights in VPIC 1.3 and its predecessors by publishing them without a copyright notice,
The Copyright Act states that "[a] work consisting of editorial revisions, annotations, elaborations, or other modifications [to a preexisting work that], as a whole, represent an original work of authorship, is a `derivative work.'" 17 U.S.C. § 101. Such a work—if it is non-infringing and sufficiently original—qualifies for a separate copyright, although this copyright does not protect the preexisting material employed in the derivative work. See 17 U.S.C. § 103 (1994); Stewart v. Abend, 495 U.S. 207, 223-24, 110 S.Ct. 1750, 1761-62, 109 L.Ed.2d 184 (1990); 1 Nimmer §§ 3.01, 3.04[A]. In this case, the requirement of non-infringement clearly is satisfied. This is true regardless of whether Montgomery held valid copyrights in VPIC 1.3 and its predecessor versions when he modified them to create version 2.9a (as Montgomery maintains) or he merely took VPIC 1.3 and its predecessor versions from the public domain and modified them in order to create version 2.9a (as the defendants maintain).
With regard to the requirement of originality, all that must be shown is that the work "possesses at least some minimal degree of creativity. . . . To be sure, the requisite level of creativity is extremely low; even a slight amount will suffice." Feist, 499 U.S. at 345, 111 S.Ct. at 1287; see also id. at 348, 111 S.Ct. at 1289.
We now turn to the defendants' alternative argument that the scope of Montgomery's
The defendants' argument, however, mischaracterizes Montgomery's claim of copyright infringement. The evidence at trial showed that VPIC 4.3 incorporated over seventy percent of the original source code from the registered work VPIC 2.9a, and that VPIC 4.3 would not function if the VPIC 2.9a code was removed. By downloading VPIC 4.3 and incorporating it as a utility on FLD discs, therefore, the defendants infringed Montgomery's registered copyright in VPIC 2.9a within the meaning of section 501(a) of the Copyright Act. See 17 U.S.C. § 501(a) (1994) ("Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 118 . . . is an infringer of the copyright . . . ."); 17 U.S.C. § 106(1)-(2) (1994) (noting that a copyright owner has the exclusive right to do and to authorize both reproduction of the copyrighted work in copies and preparation of derivative works based upon the copyrighted work); H.R.Rep. No. 94-1476, at 61 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5675 (noting that under section 106(1), "a copyrighted work would be infringed by reproducing it in whole or in any substantial part, and by duplicating it exactly or by imitation or simulation" (emphasis added)); id. at 62, reprinted in 1976 U.S.C.C.A.N. at 5675 ("The exclusive right to prepare derivative works, specified separately in clause (2) of section 106, overlaps the exclusive right of reproduction [in section 106(1)] to some extent. . . . [T]o constitute a violation of section 106(2), the infringing work must incorporate a portion of the copyrighted work in some form." (emphasis added)). Such infringement is actionable under sections 501(b) and 411(a) of the Act.
We conclude, after considering this question of law de novo, that the district court did not err in rejecting the defendants' argument that the scope of Montgomery's registered copyright in VPIC 2.9a does not extend to protect VPIC 4.3. We therefore affirm the district court's decision to deny the defendants' motion for judgment as a matter of law.
The defendants' next claim of error relates to their motion for remittitur or—if Montgomery rejected a remittitur amount proposed by the court—for a new trial on the issue of damages with respect to Montgomery's copyright claim. In this motion, the defendants contended that the jury's award of $80,000 in damages for copyright infringement—$43,900 for actual damages sustained by Montgomery as a result of the infringement and $36,100 for the defendants' profits attributable to the infringement—was excessive and not supported by the evidence because the award was based on the value of unregistered VPIC versions issued subsequent to the registered version 2.9a. The defendants maintained that no evidence was introduced at trial regarding the value of VPIC 2.9a at the time of the infringement, and that there was no evidence that anyone had ever purchased a license from Montgomery to use VPIC 2.9a. The district court denied the motion, concluding that the verdict was in accordance with the jury instructions and the evidence presented at trial.
Although the defendants' briefs on appeal are somewhat opaque, the defendants apparently contend that the district court erred in two ways when it denied their motion. First, they claim that the court committed an error of law by failing to instruct the jury to base its calculation of actual damages on the reasonable value in the marketplace of the plaintiff's program VPIC 2.9a for commercial use at the time of the infringement.
When reviewing a jury instruction under the plain error standard, we will reverse "only in exceptional cases where the error is `so fundamental as to result in a miscarriage of justice.'" Iervolino v. Delta Air Lines, Inc., 796 F.2d 1408, 1414 (11th Cir.1986) (quoting Delancey v. Motichek Towing Serv., Inc., 427 F.2d 897, 901 (5th Cir.1970)). More specifically, we require appellants to establish "that the challenged instruction was an incorrect statement of the law and that it was probably responsible for an incorrect verdict, leading to substantial injustice." Pate, 819 F.2d at 1083. If the instruction will "`mislead the jury or leave the jury to speculate as to an essential point of law,' the error is sufficiently fundamental to warrant a new trial despite a party's failure to state a proper objection." Id. (quoting Cruthirds v. RCI, Inc., 624 F.2d 632, 636 (5th Cir.1980)).
Applying this standard to the challenged instruction on the calculation of actual damages, we conclude that the defendants have not established that the instruction was fundamentally erroneous. The relevant provision of the Copyright Act states that "[t]he copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement. . . ." 17 U.S.C. § 504(b) (1994). This provision requires the plaintiff to demonstrate a "causal connection" between the defendant's infringement and an injury to the market value of the plaintiff's copyrighted work at the time of infringement.
The defendants' second claim of error relates to the evidentiary basis for the jury's damage award. The defendants point out that versions 2.9a and 4.3 of VPIC contained a statement that those who wished to use VPIC as a utility for another product had to obtain a license from Montgomery and pay a royalty of $1 per copy of the product shipped. Because the evidence established that FLD and an associated company distributed 26,641 discs containing VPIC, the defendants contend that Montgomery should have received at most $26,641 in damages. Indeed, given that Montgomery sold licenses for unlimited use of a subsequent version of VPIC—version 5.1e—to various entities for $2,000, the defendants contend that the damages awarded should have been no higher than $8,000 for the four CD-ROM titles produced by FLD that incorporated VPIC. The defendants therefore argue that the jury's award of $80,000 in damages was both excessive and unsupported by the evidence.
Because motions for a new trial are committed to the discretion of the trial court, we review the district court's rejection of the defendants' argument only to ascertain whether there has been a clear abuse of discretion. See Agro Air Assocs., Inc. v. Houston Cas. Co., 128 F.3d 1452, 1455 n. 5 (11th Cir.1997) (reviewing denial of motion for remittitur or new trial on ground of excessive damages under abuse of discretion standard); United States v. Sullivan, 1 F.3d 1191, 1196 (11th Cir.1993) (reviewing denial of motion for new trial on ground that verdict was against the great weight of the evidence under abuse of discretion standard). We have found that "[t]his level of deference is especially appropriate where a new trial is denied and the jury's determinations are left undisturbed." Insurance Co. of N. Am. v. Valente, 933 F.2d 921, 925 (11th Cir.1991). After reviewing the entire record in light of this standard, we find that there was ample evidence from which the jury could have concluded that an award of $43,900 for actual damages resulting from the infringement and $36,100 for the defendants' profits attributable to the infringement was appropriate.
As to Montgomery's actual damages, the evidence indicated that VPIC 4.3 was not the most current version of VPIC available at the time that FLD produced its four CD-ROM titles. At that time, a license to use the most current version of VPIC as a utility for another product could be obtained in exchange for a royalty of $2 to $3 per copy of the product shipped.
With respect to the defendants' profits, the Copyright Act provides the following computational guidance:
17 U.S.C. § 504(b) (1994). Montgomery provided evidence at trial, however, that went well beyond his statutory obligation to present proof of the defendants' gross revenue. Montgomery initially provided a set of spreadsheets that summarized various business records of FLD produced by the defendants. These spreadsheets showed that FLD's total revenue from sales of the four CD-ROM titles at issue was $255,162, and that FLD's total profit (after expenses) on these sales was $142,802.80. Later in the trial, Montgomery provided an alternative FLD total profit estimate of $158,103 that was based upon profit information elicited from Noga on cross-examination. By determining what percentage of files on each CD-ROM title could be viewed using VPIC, Montgomery estimated that the amount of this profit allocable to VPIC was $107,310.35. While the defendants did seek to discredit Montgomery's profit allocation estimate on cross-examination, they did not question Montgomery's total profit figures and did not offer any allocation estimate of their own. The jury, faced with multiple profit estimates of over $100,000, thus had a sufficient evidentiary basis for its conclusion that Montgomery should recover $36,100 as the defendants' profits attributable to the infringement.
Turning to Montgomery's claim under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A),
The defendants first contend that the district court was required, as a matter of law, to grant their motion because the act of omitting a copyright notice alone cannot constitute a violation of section 43(a). They argue that if such an omission was found to be actionable under section 43(a), virtually every act of copyright infringement would also constitute a violation of the Lanham Act. This argument, however, mischaracterizes the facts of the case before us. While the defendants did activate a certain feature of VPIC that caused Montgomery's copyright notice not to appear when users viewed FLD's CD-ROM discs, this was not the only act upon which the defendants' liability under section 43(a) could have been predicated. Unchallenged testimony at trial established that each of FLD's four CD-ROM titles that contained VPIC, when loaded into a computer and used, would display a CD help menu in which FLD claimed copyright. The copyright notice on one CD-ROM title, for example, stated that the help menu was "copyrighted and owned" by FLD. As part of the help menu on each title, the defendants included a description of how a user with a particular brand of computer video card could set up a viewing program in order to display the picture files that were present on the disc. One such description read, in pertinent part: "Included on this CD-ROM [disc] are two different [picture file] viewing utilities, VPIC and CSHOW, each in its own directory. VPIC is the best one to use . . . ." This description was not the only reference to VPIC that appeared on the defendants' CD-ROM titles; the names of several files present on each title also contained the term "VPIC."
In considering whether Montgomery failed as a matter of law to establish a violation of section 43(a) on these facts, we begin with Montgomery's complaint. In Count Two, Montgomery claimed that the defendants had violated section 43(a) in one of two ways: by "pass[ing] off the VPIC software as their own property" or by "represent[ing] a connection, license, association, or relationship between Plaintiff and Defendants." These two theories of liability correspond to two portions of section 43(a), which we will refer to as the "false designation of origin" prong and the "mistaken affiliation" prong.
With respect to the false designation of origin prong, we are mindful of recent Second Circuit cases that address the question of whether a false copyright notice is actionable under section 43(a). In Lipton v. Nature Co., 71 F.3d 464 (2d Cir.1995), for example, the defendants infringed the plaintiff's copyright in a book of animal terms by creating a line of merchandise that utilized the terms. The merchandise bore copyright notices in the names of both defendants. The plaintiff brought a claim against the defendants for "reverse passing off"
We do not believe that Lipton forecloses Montgomery's claim under the false designation of origin prong of section 43(a). As an initial matter, we note that many courts have disagreed with Lipton's conclusion that the act of placing a copyright notice on an infringing product cannot be a false designation of origin under section 43(a). See, e.g., Southern Bldg. Code Congress Int'l, Inc. v. Florida Constr. Sch., Inc., 14 U.S.P.Q.2d 1846, 1848 (M.D.Fla.1989); Manufacturers Techs., Inc. v. Cams, Inc., 706 F.Supp. 984, 1004 (D.Conn.1989); Sunset Lamp Corp. v. Alsy Corp., 698 F.Supp. 1146, 1153 (S.D.N.Y. 1988); cf. Ladas v. Potpourri Press, Inc., 846 F.Supp. 221, 224 (E.D.N.Y.1994) (responding to claim that defendant had falsely claimed copyright in giftware collections in violation of section 43(a) by directing defendant to place non-removable stickers bearing plaintiff's copyright notice on collection items). We need not decide whether to adopt the holding of Lipton as the law of this circuit, however, because the facts of this case are distinguishable from Lipton. The CD help menu that referred to VPIC was not merely copyrighted by the defendants; they actually stated that they "owned" the menu. We find that this claim of ownership was
As to the mistaken affiliation prong, we are not the first court to use this prong in connection with the false designation of origin prong to hold defendants liable for violating section 43(a). Other courts have reached the same result on facts similar to those before us. In Sega Enterprises Ltd. v. MAPHIA, 948 F.Supp. 923 (N.D.Cal.1996), for example, the defendant used the plaintiff's mark to identify unauthorized copies of plaintiff's video games that the defendant had incorporated into his computer bulletin board system; the plaintiff's mark also appeared when a bulletin board user downloaded and played the counterfeit games. In ruling on the plaintiff's motion for summary judgment, the court found that the defendant had infringed the plaintiff's trademark and violated both the false designation of origin and mistaken affiliation prongs of section 43(a). Id. at 937-39. In particular, the court concluded that the plaintiff had established a likelihood of confusion because "[a]ny member of the public that logged onto [the defendant's bulletin board system] was likely to think that the trademark indicated that the games were sponsored by or affiliated with Sega." Id. at 938 (emphasis added).
In light of the above authorities and the well-established principle that section 43(a) should be broadly construed,
The defendants' two remaining contentions pertain to two of the elements that a plaintiff is required to prove in order to establish a claim for infringement of an unregistered mark under section 43(a) of the Lanham Act, namely: (1) that the plaintiff's mark either is inherently distinctive or has acquired distinctiveness through secondary meaning; and (2) likelihood of confusion. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768-69, 112 S.Ct. 2753, 2757-58, 120 L.Ed.2d 615 (1992); University of Ga. Athletic Ass'n v. Laite, 756 F.2d 1535, 1541 (11th Cir.1985). The district court rejected the defendants' claim that these elements had not been proven, and the jury found them liable for violating section 43(a). Because it is for the trier of fact to decide whether these elements have been proven, we will not reverse the jury's verdict absent clear error. See Bauer Lamp Co. v. Shaffer, 941 F.2d 1165, 1170 (11th Cir.1991); Jellibeans, Inc. v. Skating Clubs of Ga., Inc., 716 F.2d 833, 839-840 & n. 16 (11th Cir.1983); Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1183 n. 12, 1186 (5th Cir.1980).
The defendants also contend that Montgomery failed to demonstrate a likelihood of confusion as to whether the defendants either were the source of VPIC or had a commercial license to use it. Their first argument in support of this contention is that Montgomery could not have shown any likelihood of pre-sale confusion
The defendants also argue, however, that Montgomery did not provide sufficient proof regarding the likelihood of user confusion. They note that Montgomery offered no evidence at trial to indicate that he had been contacted by any confused users who mistakenly thought that he and the defendants
We observe that Montgomery made this statement as part of a discussion of the process that a user would follow in order to view a picture file on one of the defendants' discs. Montgomery testified that when a user selected a picture file from the defendants' CD menu, the menu would utilize VPIC to display the file. Upon pressing a key, the user would be returned to the CD menu and "never would even know that VPIC was on there." Montgomery also testified, however, that users who did not have one specific brand of video card in their computers would need to visit the defendants' CD help menu before engaging in this viewing process. As noted in part II.C.1, supra, this help menu told users of other video cards how to set up one of two available picture file viewing utilities—VPIC ("the best one to use") or CSHOW—in order to view the picture files that were present on the defendants' discs. It is the references to VPIC that appear in this help menu, along with the defendants' omission of the VPIC copyright notice, that Montgomery relies upon to establish a likelihood of user confusion. After placing Montgomery's statement in this context, we conclude that it was not clear error for the jury to find a likelihood of user confusion despite this statement.
With respect to the defendants' argument that no confused users had contacted Montgomery, we have held that a plaintiff is not required to provide evidence of actual confusion in order to prove likelihood of confusion. See Bauer Lamp, 941 F.2d at 1171-72. Instead, actual confusion is merely one of several factors that may be relevant in analyzing whether there is a likelihood of confusion between two marks. See Jellibeans, 716 F.2d at 840 (listing factors); John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 972 (11th Cir.1983). The defendants do not contend that any of the other factors point to the conclusion that users of their CD-ROM discs were unlikely to be confused. We therefore cannot say, based merely on the absence of evidence of actual confusion, that the jury clearly erred in finding a likelihood of confusion.
The defendants' next claim of error relates to the district court's decision to preclude one of their witnesses from testifying as an expert. At trial, the defendants' counsel attempted to qualify Mr. Bahram Yusefzadeh as an expert witness who would provide testimony about computer software licensing practices, the various types of software licenses available, and the pricing of unlimited use licenses. On voir dire, Montgomery's counsel established that Yusefzadeh's knowledge and experience pertained to the development, marketing, and licensing of commercial software used by individual banks. Yusefzadeh had no experience either in negotiating utility licenses for software that was distributed as "shareware"—such as VPIC—or in marketing software through distributors under a "shrink-wrap" license—the method by which the defendants marketed their four CD-ROM titles. Montgomery's counsel then objected to the admission of expert testimony by Yusefzadeh, and the district court sustained the objection on two grounds. First, the court found that Yusefzadeh was not qualified as an expert because the defendants had not shown that his experience with banking software was germane to the issues involved in the case. Second, the court noted that the meaning of the terms used to describe the various types of software licenses (e.g., single-user, multi-user, and unlimited use) would be self-evident to the jury and thus did not require explanation by an expert.
Our consideration of the district court's ruling is informed by Fed.R.Evid. 702, which states:
We review the district court's ruling regarding Yusefzadeh's qualifications under a deferential standard. "A trial court has wide discretion in determining whether to exclude expert testimony, and its action will be sustained unless manifestly erroneous." United States v. Cross, 928 F.2d 1030, 1049 (11th Cir.1991) (internal quotation marks omitted). We find no indication of manifest error here. After considering the defendants' assertion that Yusefzadeh's experience in the commercial software licensing field was also applicable in the shareware and utility licensing field, the district court concluded that these two fields were "totally distinguishable." Because the defendants present no support for their assertion on appeal, we defer to the district court's conclusion.
Finally, the defendants contend that the district court erred in awarding Montgomery $142,289.26 in attorneys' fees on his copyright and Lanham Act claims. Although the district court did not allocate a specific portion of its award to each claim,
In a civil copyright infringement action, 17 U.S.C. § 505 (1994) empowers the court to award a "reasonable attorney's fee to the prevailing party." Such fees "are to be awarded ... only as a matter of the court's discretion." Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, 114 S.Ct. 1023, 1033, 127 L.Ed.2d 455 (1994). Where the record reveals that the district court weighed the relevant factors
The defendants contend that the district court abused its discretion in two ways when it awarded attorneys' fees to Montgomery on his copyright claim. First, they argue that because Montgomery's evidence of damages was based on unregistered versions of VPIC, an award of attorneys' fees was not permitted by 17 U.S.C. § 412 (1994). Section 412 states, in pertinent part, that "no award ... of attorney's fees ... shall be made for ... any infringement of copyright in [a work] commenced before the effective date of its registration...." We reject this argument for the reasons discussed in parts II.A.2 and II.B, supra.
Turning to the issue of fee awards under the Lanham Act, section 35(a) provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a) (1994). Such an award is available in actions under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), that involve unregistered trademarks. See Rickard v. Auto Publisher, Inc., 735 F.2d 450, 458 (11th Cir.1984). The jury found that Montgomery's claim under section 43(a) was an "exceptional" case, and the district court exercised its discretion to award him attorneys' fees on that claim.
On appeal, the defendants argue that Montgomery is not entitled to fees because he was not the "prevailing party" on his Lanham Act claim. We have stated in a related context that the prevailing party is "the party succeeding on a significant litigated issue that achieves some of the benefits sought by that party in initiating the suit." Cable/Home Communication Corp. v. Network Prods., Inc., 902 F.2d 829, 853 (11th Cir.1990) (applying this definition to an award of attorneys' fees in the copyright infringement context). "Where the [party's] success on a legal claim can be characterized as purely technical or de minimis, a district court would be justified in concluding that [this definition] has not been satisfied." Texas State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792, 109 S.Ct. 1486, 1493-94, 103 L.Ed.2d 866 (1989).
The defendants contend that Montgomery's success was de minimis because the jury awarded him only $30 in damages on his Lanham Act claim. Montgomery responds that the jury was instructed not to award him "a double recovery of the same damages" on his copyright and Lanham Act claims. He argues, therefore, that the incremental $30 award is consistent with the conclusion that he prevailed on his Lanham Act claim.
We need not focus solely on this damage award, however, in order to determine whether Montgomery is entitled to attorneys' fees. It is also important to note that the district court, at Montgomery's request, permanently enjoined the defendants from producing or transferring CD-ROM discs containing VPIC under the relevant provisions of both the Lanham and Copyright Acts. See 15 U.S.C. § 1116 (1994); 17 U.S.C. § 502 (1994). Montgomery's success in procuring this injunction achieved a significant benefit—namely, preventing the defendants from falsely designating the origin of VPIC—that he sought in initiating this suit. Considering both the damages and injunctive relief that he received on his Lanham Act claim, therefore, we conclude that Montgomery was a "prevailing party" within the meaning of 15
For the foregoing reasons, the challenged rulings of the district court are AFFIRMED.
See generally Donald Frederick Evans & Assocs., Inc. v. Continental Homes, Inc., 785 F.2d 897, 905-06, 910-12 (11th Cir.1986); 2 Nimmer § 7.16[A].
Montgomery argues that his 1990 registration of, and inclusion of a copyright notice in, VPIC 2.9a occurred less than 5 years after the publication of VPIC 1.3 and its predecessors in the late 1980s. He concludes, therefore, that any potential forfeiture of his rights properly was cured under section 405(a)(2). Montgomery's conclusion might be correct if he had registered, and made a reasonable effort to add notice to subsequent copies of, VPIC version 1.3 and its predecessor versions themselves. Cf. Continental Homes, 785 F.2d at 911 n. 22 (discussing a disagreement among various courts regarding whether section 405(a)(2) requires a copyright owner to add notice to all copies distributed, or only to copies distributed after it is discovered that notice was omitted). We express no opinion, however, on the question of whether the inclusion of a copyright notice in copies of a subsequent version of a work can rescue the copyright of a previous version that was distributed without a copyright notice. Cf. 17 U.S.C. § 101 (1994) ("where the work has been prepared in different versions, each version constitutes a separate work").
Defendants claim that the portion of Montgomery's answer emphasized above establishes that the material added in versions 1.4 through 2.9a was not sufficiently original to support a valid copyright in version 2.9a. It is not clear from this exchange, however, whether Montgomery's comments regarding percentages pertained to the size of the code for these two versions or to the similarity of the code. The following exchange, which occurred shortly after the one quoted above, suggests that the code for version 2.9a was not 100 percent similar to the code for version 1.3:
In this case, we have before us certain tangible exhibits that bear directly on the question of whether Montgomery's modifications were sufficiently original. Some of these exhibits, such as the source code for VPIC 2.9a, are not readily comprehensible by those not trained in computer programming. The VPIC revision history is somewhat more comprehensible, but Montgomery interpreted and expanded upon it at length in his trial testimony. In such circumstances, it is unclear whether Sherry Manufacturing would require that we consider the question of originality de novo. Cf. Malden Mills, Inc. v. Regency Mills, Inc., 626 F.2d 1112, 1113 & n. 2 (2d Cir.1980) (implying, in the context of a copyright infringement analysis, that expert testimony regarding matters not within the knowledge of the lay observer might preclude de novo review); G.R. Leonard & Co. v. Stack, 386 F.2d 38, 40-41 (7th Cir.1967) (applying the clearly erroneous standard in the copyright infringement context where the evidence regarding the parties' respective works consisted mostly of "testimonial analysis and interpretation" of the works). To the extent that Sherry Manufacturing would require de novo review, however, we conclude that Supreme Court precedent prevents us from following it.
Only twenty days after we decided Sherry Manufacturing, the Supreme Court held that factual findings are to be reviewed for clear error "even when the district court's findings do not rest on credibility determinations, but are based instead on physical or documentary evidence or inferences from other facts." Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d 518 (1985). While we recognize that Second Circuit copyright infringement cases continue to apply de novo review to certain factual determinations that are based on tangible exhibits, see, e.g., Folio Impressions, Inc. v. Byer Cal., 937 F.2d 759, 766 (2d Cir.1991) (reviewing district court finding of substantial similarity de novo); Business Trends Analysts, Inc. v. Freedonia Group, Inc., 887 F.2d 399, 402-03 (same), we believe that this standard of review is inappropriate after Anderson. See Wildlife Express Corp. v. Carol Wright Sales, Inc., 18 F.3d 502, 506-07 & n. 1 (7th Cir.1994); cf. AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1541 n. 46 (11th Cir.1986) (citing Anderson and declining to review de novo a finding of similarity of design in trade dress infringement action brought under Lanham Act section 43(a)).
15 U.S.C. § 1125(a) (1994).
These two prongs are part of subsection (A) of section 1125(a)(1), which prescribes liability "for infringement of even unregistered marks, names, and trade dress." J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 27:9 (4th ed.1996). Subsection (B), which is not at issue here, addresses false advertising.
In Roho, the plaintiff manufactured specialized wheelchair cushions and hospital mattresses. Its mattresses were constructed by assembling four wheelchair cushions together. The defendants bought several of the plaintiff's wheelchair cushions, removed the plaintiff's labels, fastened ten of the cushions together to make a mattress, and attached their own tag to the mattress. The plaintiff sued the defendants for, inter alia, reverse passing off under the false designation of origin prong of section 43(a). See id. at 357-58.
The court began its analysis by noting that the doctrine of reverse passing off is applicable in situations where a defendant resells another person's product that has been only "slightly modified." Finding that the essence of the plaintiff's claim was that the defendant had purchased one of the plaintiff's products and sold it in modified form under a different label, the court proceeded to compare the plaintiff's cushions with the defendants' mattress. It found that the defendants had substantially modified the plaintiff's cushions by attaching them together to create a mattress; furthermore, the mattress and cushions were marketed to different consumers for different purposes. Therefore, the court held that the defendants were not simply reselling a relabeled and slightly modified version of the plaintiff's product. Instead, the defendants' mattress was a new product to which they could properly apply their own label. See id. at 360-61.
We assume arguendo that Roho is applicable in our circuit. See J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 27:81 (4th ed.1996) (discussing the level of similarity between the defendant's and plaintiff's works that must be demonstrated in order to bring a reverse passing off claim, including the Second Circuit's requirement (which is similar to Roho's "slightly modified" requirement) of "substantial similarity" and the Ninth Circuit's requirement of "bodily appropriation"); but see Debs v. Meliopoulos, 1993 WL 566011 (N.D.Ga.1991) (rejecting any requirement of either bodily appropriation or substantial similarity and focusing instead on likelihood of confusion). This assumption, however, does not affect our conclusion that Montgomery has stated a claim for false designation of origin. The defendants in Roho escaped liability not because they incorporated the plaintiff's product into their own, but because this incorporation substantially modified both the physical attributes and the purpose of the plaintiff's product. In this case, however, Montgomery created VPIC for the purpose of allowing computer users to view picture files. Without reprogramming VPIC, the defendants incorporated it into their CD-ROM discs for the purpose of allowing users to view the pictures on the discs. Courts have not hesitated to find defendants liable for false designation of origin in such circumstances. See, e.g., F.E.L. Publications, Ltd. v. Catholic Bishop of Chicago, 214 U.S.P.Q. 409, 416-17 (7th Cir.1982) (finding that defendant who excluded plaintiff's name from custom-made hymnals that incorporated plaintiff's songs and bore the names of defendant's parishes would be liable for false designation of origin if the users of the hymnals were likely to be confused as to the origin of the songs); Sega Enters. Ltd. v. MAPHIA, 948 F.Supp. 923, 938-39 (N.D.Cal. 1996); Playboy Enters., Inc. v. Frena, 839 F.Supp. 1552, 1562 (M.D.Fla.1993) (defendant who substituted his own advertisement for plaintiff's trademark on certain photographs and incorporated these photographs into his computer bulletin board system held liable for false designation of origin).