`
`
`
`EXHIBIT 1
`EXHIBIT 1
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 1 Date Filed: 06/22/2023 Entry ID: 6575457
`
`United States Court of Appeals
`For the First Circuit
`
`
`
`
`
`
`No. 19-1927
`
`MARKHAM CONCEPTS, INC.; LORRAINE MARKHAM, individually and in
`her capacity as trustee of the Bill and Lorraine Markham
`Exemption Trust and the Lorraine Markham Family Trust;
`SUSAN GARRETSON,
`
`Plaintiffs, Appellants,
`
`v.
`
`HASBRO, INC.; BEATRICE PARDO, in her capacity as successor co-
`trustee of the Reuben B. Klamer Living Trust; PAUL GLASS, in his
`capacity as successor co-trustee of the Reuben B. Klamer Living
`Trust; DAWN LINKLETTER GRIFFIN; SHARON LINKLETTER; MICHAEL
`LINKLETTER; LAURA LINKLETTER RICH; DENNIS LINKLETTER; THOMAS
`FEIMAN, in his capacity as co-trustee of the Irvin S. and Ida
`Mae Atkins Family Trust; ROBERT MILLER, in his capacity as co-
`trustee of the Irvin S. and Ida Mae Atkins Family Trust; MAX
`CANDIOTTY, in his capacity as co-trustee of the Irvin S. and Ida
`Mae Atkins Family Trust,
`
`Defendants, Appellees,
`
` IDA MAE ATKINS,
`
`Defendant.
`
`
`
`No. 21-1957
`
` MARKHAM CONCEPTS, INC.; LORRAINE MARKHAM, individually and in
`her capacity as trustee of the Bill and Lorraine Markham
`Exemption Trust and the Lorraine Markham Family Trust;
`SUSAN GARRETSON,
`
`Plaintiffs, Appellees
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 2 Date Filed: 06/22/2023 Entry ID: 6575457
`
`v.
`
`HASBRO, INC.,
`
`Defendant, Appellant.
`
` BEATRICE PARDO, in her capacity as successor co-trustee of the
`Reuben B. Klamer Living Trust; PAUL GLASS, in his capacity as
`successor co-trustee of the Reuben B. Klamer Living Trust; DAWN
`LINKLETTER GRIFFIN; SHARON LINKLETTER; MICHAEL LINKLETTER; LAURA
`LINKLETTER RICH; DENNIS LINKLETTER; THOMAS FEIMAN, in his
`capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family
`Trust; ROBERT MILLER, in his capacity as co-trustee of the Irvin
`S. and Ida Mae Atkins Family Trust; MAX CANDIOTTY, in his
`capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family
`Trust; IDA MAE ATKINS,
`
`Defendants.
`
`
`No. 21-1958
`
`
`MARKHAM CONCEPTS, INC.; LORRAINE MARKHAM, individually and in
`her capacity as trustee of the Bill and Lorraine Markham
`Exemption Trust and the Lorraine Markham Family Trust;
`SUSAN GARRETSON,
`
`Plaintiffs, Appellees
`
`
`
`
`v.
`
`BEATRICE PARDO, in her capacity as successor co-trustee of the
`Reuben B. Klamer Living Trust; PAUL GLASS, in his capacity as
`successor co-trustee of the Reuben B. Klamer Living Trust,
`
`Defendants, Appellants
`
`
`HASBRO, INC., DAWN LINKLETTER GRIFFIN; SHARON LINKLETTER;
`MICHAEL LINKLETTER; LAURA LINKLETTER RICH; DENNIS LINKLETTER;
`THOMAS FEIMAN, in his capacity as co-trustee of the Irvin S. and
`Ida Mae Atkins Family Trust; ROBERT MILLER, in his capacity as
`co-trustee of the Irvin S. and Ida Mae Atkins Family Trust; MAX
`CANDIOTTY, in his capacity as co-trustee of the Irvin S. and Ida
`Mae Atkins Family Trust; IDA MAE ATKINS,
`
`Defendants.
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 3 Date Filed: 06/22/2023 Entry ID: 6575457
`
`
`
`
`
`
`
`
`APPEALS FROM THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF RHODE ISLAND
`
`[Hon. William E. Smith, U.S. District Judge]
`
`
`
`Before
`
`Kayatta, Lipez, and Thompson, Circuit Judges.
`
`
`
`
`Patricia L. Glaser, with whom Erica J. Van Loon, Joshua J.
`
`Pollack, Nixon Peabody LLP, Thomas P. Burke Jr., and Glaser Weil
`Fink Howard Avchen & Shapiro LLP were on brief, for defendants-
`appellants Beatrice Pardo and Paul Glass.
`
`Joshua C. Krumholz, with whom Courtney L. Batliner, Mark T.
`
`Goracke, Holland & Knight LLP, Patricia K. Rocha, and Adler Pollock
`& Sheehan PC were on brief, for defendant-appellant Hasbro, Inc.
`
`David A. Cole, with whom John T. Moehringer and Cadwalader,
`
`Wickersham & Taft LLP were on brief, for plaintiffs-appellees.
`
`
`
`
`
`
`
`June 22, 2023
`
`
`
`
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 4 Date Filed: 06/22/2023 Entry ID: 6575457
`
`LIPEZ, Circuit Judge. In this copyright action
`
`involving ownership rights to the classic board game, The Game of
`
`Life, conveyed more than six decades ago, the prevailing defendants
`
`seek attorney's fees from the unsuccessful plaintiffs. The
`
`district court denied fees for the trial-level proceedings, and
`
`the defendants claim on appeal that the court abused its discretion
`
`in doing so. The defendants also moved in this court for appellate
`
`attorney's fees. The Copyright Act of 1976 permits the award of
`
`reasonable fees and costs to a prevailing party, see 17 U.S.C.
`
`§ 505, and the Supreme Court has endorsed a set of nonexclusive
`
`factors to be considered by courts in evaluating whether to award
`
`fees, see Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 & n.19
`
`(1994). After carefully considering those factors and other
`
`aspects of the record, we affirm the district court's decision to
`
`deny fees and, primarily for the same reasons, decline to award
`
`fees for the appeal.
`
`I.
`
`As detailed in our opinion on the merits, this case arose
`
`
`
`
`
`from a long-running dispute between Reuben Klamer, a toy developer
`
`who originated the idea for The Game of Life, and Bill Markham, a
`
`game designer whom Klamer asked to design and build the game
`
`prototype. See Markham Concepts, Inc. v. Hasbro, Inc., 1 F.4th
`
`74, 77-78 (1st Cir. 2021), cert. denied, 142 S. Ct. 1414 (2022).
`
`The game was a huge success, and for decades following its debut
`
`- 4 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 5 Date Filed: 06/22/2023 Entry ID: 6575457
`
`in 1960, Markham and Klamer clashed over who should receive primary
`
`credit for its creation. In general, Markham "felt that he was
`
`not given proper public recognition for his role" and that the
`
`royalty he received was "unfairly low." Id. at 78-79.
`
`
`
`
`
`Markham died in 1993. This case was brought by his
`
`successors-in-interest against Klamer, who has since died,1 and
`
`others (including Hasbro, Inc., the company that now holds rights
`
`to The Game of Life) in an attempt, inter alia, to renegotiate the
`
`original assignment of rights in the game.2 As the district court
`
`observed, the plaintiffs' copyright claim "boiled down to two
`
`dispositive questions: did Bill Markham create the [p]rototype
`
`(such that he could fairly be considered its author); and was the
`
`[p]rototype a work made for hire?" Markham Concepts, Inc. v.
`
`Hasbro, Inc., No. 15-419 WES, 2021 WL 5161772, at *1 (D.R.I. Nov.
`
`
`1 Klamer died in September 2021, after we issued our merits
`
`decision but before the district court ruled on the fee requests.
`In Klamer's place, this action has been pursued by the co-trustees
`of the Reuben B. Klamer Living Trust. For convenience, we refer
`to Klamer when discussing arguments made in his briefs and motions.
`The Markham parties are Markham's widow, daughter, and Markham
`Concepts, Inc.
`
`2 The litigation originally was brought by the Markham parties
`
`primarily as a contract action against Hasbro seeking
`reinstatement of their royalty payments, which had stopped because
`of an issue with an escrow arrangement. They subsequently amended
`their complaint to add additional causes of action against Klamer
`and other defendants, including the copyright claim adjudicated by
`the district court and addressed in our merits decision. See
`Markham Concepts, 1 F.4th at 77. The escrow issue was resolved,
`and the parties stipulated to dismissal of the non-copyright
`claims.
`
`- 5 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 6 Date Filed: 06/22/2023 Entry ID: 6575457
`
`5, 2021).
`
`
`
`
`
`Answering those questions required application of the
`
`Copyright Acts of 1909 and 1976. Under the Copyright Act of 1976
`
`("1976 Copyright Act"), authors may have "the power to terminate
`
`the grant of a copyright after a certain period of time, see 17
`
`U.S.C. §§ 203, 304(c), 304(d), thereby permitting them to extricate
`
`themselves from 'ill-advised' grants made before the 'true value'
`
`of their work was apparent." Markham Concepts, 1 F.4th at 79
`
`(quoting Mills Music, Inc. v. Snyder, 469 U.S. 153, 172-73 (1985)
`
`(footnote omitted)). However, such "termination rights" do not
`
`extend to "work[s] made for hire." 17 U.S.C. § 304(c). Whether
`
`The Game of Life was "made for hire" is governed by the Copyright
`
`Act of 1909 ("1909 Act"), 17 U.S.C. § 26 (repealed 1978). See
`
`Markham Concepts, 1 F.4th at 81.
`
`
`
`
`
`Following a bench trial that included testimony from
`
`Klamer and two employees of Markham's business who had worked on
`
`The Game of Life, the district court concluded that the prototype
`
`was indeed a work for hire created for Klamer. See Markham
`
`Concepts, Inc. v. Hasbro, Inc., 355 F. Supp. 3d 119, 130 (D.R.I.
`
`2019). That decision meant that Markham was not the prototype's
`
`author for copyright purposes, foreclosing his successors-in-
`
`interest from terminating an assignment agreement that had been in
`
`effect, with minor adjustments, since 1959. Id.; see also Markham
`
`- 6 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 7 Date Filed: 06/22/2023 Entry ID: 6575457
`
`Concepts, 1 F.4th at 79.3
`
`
`
`
`
`In reaching its decision, the district court relied --
`
`over the plaintiffs' objection -- on the "instance and expense"
`
`test that had long been used to evaluate whether a commissioned
`
`work subject to the 1909 Act was made for hire. See Markham
`
`Concepts, 355 F. Supp. 3d at 127-30.4 The district court did not
`
`
`3 Markham's assignment agreement ("the 1959 Assignment
`
`Agreement") was with Link Research Corporation, co-founded by
`Klamer and Art Linkletter (a well-known radio and television
`personality). The agreement, inter alia, required Markham to
`assign to Link any copyright, patent, or trademark rights "to which
`he may be entitled as the inventor, designer and developer of the
`[g]ame." Markham Concepts, 1 F.4th at 85. Link separately entered
`into a license agreement with the Milton Bradley Company, giving
`Milton Bradley exclusive rights to make and sell The Game of Life
`in exchange for a six percent royalty on sales. Id. at 78. Hasbro
`subsequently acquired Milton Bradley, along with the rights to the
`game. Under Markham's initial agreement with Link, he received
`thirty percent of Link's six percent royalty (i.e., 1.8 percent of
`total royalties). Id. Although Markham's royalty on non-U.S.
`sales has varied over time, see infra, the domestic percentage has
`remained the same.
`
`
`4 The 1909 Act codified the longstanding principle that "a
`work created by an employee belongs to the employer, who is then
`viewed as the author and copyright holder." Markham Concepts, 1
`F.4th at 79-80. Courts initially limited this "work for hire"
`concept to "'the traditional employer-employee relationship,' that
`is, to 'a work created by an employee acting within the scope of
`employment.'" Id. at 80 (quoting Forward v. Thorogood, 985 F.2d
`604, 606 (1st Cir. 1993)). However, the work-for-hire concept was
`later expanded via the instance and expense test to include works
`created by independent contractors when the hiring party provided
`both the impetus (the "instance") and funding (the "expense") for
`the work. See id.; see also, e.g., Marvel Characters, Inc. v.
`Kirby, 726 F.3d 119, 139 (2d Cir. 2013) (explaining that "instance"
`"refers to the extent to which the hiring party provided the
`impetus for, participated in, or had the power to supervise the
`creation of the work"). The 1976 Copyright Act contains an
`explicit, two-part definition for works for hire that applies to
`
`- 7 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 8 Date Filed: 06/22/2023 Entry ID: 6575457
`
`address the defendants' alternative theory that the prototype
`
`qualified as a work for hire because it was created for Markham by
`
`his employees within a traditional employer-employee relationship
`
`-- which also would foreclose termination rights for the Markham
`
`parties. On appeal, we endorsed both the district court's approach
`
`and its outcome. We decided that courts within the First Circuit
`
`remain bound by our instance and expense precedent, see Markham
`
`Concepts, 1 F.4th at 81-83, and held that "the evidence amply
`
`support[ed] the district court's conclusion that the game was
`
`created at the instance and expense of Klamer" and was thus a work
`
`for hire, id. at 86.5
`
`
`
`
`
`Months after we issued our decision on the merits, the
`
`district court denied the defendants' pending motions for
`
`attorney's fees and costs for the trial-level proceedings. See
`
`
`works created on or after January 1, 1978. See 17 U.S.C. § 101;
`see also Markham Concepts, 1 F.4th at 80.
`
`5 As described in our opinion on the merits, some cases suggest
`
`that the parties in a work-for-hire relationship can agree that
`authorship rights will belong to the work's actual creator rather
`than to the person at whose instance and expense the work is made.
`See Markham Concepts, 1 F.4th at 85 & n.7. However, work-for-hire
`status is presumed when the elements of the instance and expense
`test are met, and "courts generally demand clear and specific
`evidence" to rebut that presumption. Id. Both the district court
`and our court held that the assignment agreement between Markham
`and Link did not overcome the work-for-hire presumption. See id.
`at 85-86.
`
`
`- 8 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 9 Date Filed: 06/22/2023 Entry ID: 6575457
`
`Markham Concepts, 2021 WL 5161772, at *5.6 Hasbro and Klamer filed
`
`separate appeals of that ruling,7 and each also filed a motion for
`
`an award of attorney's fees on appeal.8 We subsequently
`
`consolidated the district court fee appeals with the motions for
`
`appellate fees.
`
`A. Legal Principles
`
`II.
`
`
`
`
`
`Section 505 of the 1976 Copyright Act allows a court, in
`
`its discretion, to award reasonable attorney's fees to a prevailing
`
`party. See 17 U.S.C. § 505.9 The statute "requir[es] an
`
`'evenhanded' approach under which '[p]revailing plaintiffs and
`
`prevailing defendants are to be treated alike.'" Airframe Sys.,
`
`
`6 Hasbro requested fees in the amount of $1,951,323.63 and
`
`$10,256.45 in costs, plus $9,112.36 for travel. Klamer requested
`fees in the amount of $1,827,393.50 plus costs of $38,953.81.
`
`
`7 Multiple defendants associated with Art Linkletter also were
`defendants in the copyright action and requested $583,709.50 in
`attorney's fees in the district court. They did not appeal the
`denial of those fees and have not requested appellate fees.
`
`8 Hasbro seeks $271,674.20 in attorney's fees on appeal, and
`
`Klamer seeks $238,086.34 in appellate attorney's fees.
`
`9 Although the 1909 Act applies to the substantive issues in
`
`this case, the defendants sought fees under § 505 of the 1976
`Copyright Act rather than under the comparable provision of the
`1909 Act, § 116. In its motion for appellate fees, Hasbro notes
`that it is unclear which fees provision applies to this case.
`However, the plaintiffs have not disputed the applicability of
`§ 505, and the two provisions are in any event similar. See
`Fogerty, 510 U.S. at 523-24. We therefore presume that § 505
`applies.
`
`
`
`- 9 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 10 Date Filed: 06/22/2023 Entry ID: 6575457
`
`Inc. v. L-3 Commc'ns Corp., 658 F.3d 100, 108 (1st Cir. 2011)
`
`(quoting Fogerty, 510 U.S. at 521, 534) (second alteration in
`
`original). Although "[t]here is no precise rule or formula for"
`
`determining whether to award attorney's fees under § 505, Fogerty,
`
`510 U.S. at 534 (quoting Hensley v. Eckerhart, 461 U.S. 424, 436
`
`(1983)), the Supreme Court has endorsed "several nonexclusive
`
`factors to guide" a court's decision: "'frivolousness, motivation,
`
`objective unreasonableness (both in the factual and in the legal
`
`components of the case) and the need in particular circumstances
`
`to advance considerations of compensation and deterrence,'" id. at
`
`534 n.19 (quoting Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156
`
`(3d Cir. 1986)). Courts considering fee requests "should give
`
`substantial weight to the objective reasonableness of the losing
`
`party's position," but "must also give due consideration to all
`
`other circumstances relevant to granting fees." Kirtsaeng v. John
`
`Wiley & Sons, Inc., 579 U.S. 197, 199, 200 (2016).
`
`
`
`
`
`The relevant "other circumstances" include the purpose
`
`of copyright law and its objective of "enriching the general public
`
`through access to creative works." Id. at 204 (quoting Fogerty,
`
`510 U.S. at 527). The 1976 Copyright Act endeavors to achieve
`
`that goal "by striking a balance between two subsidiary aims:
`
`encouraging and rewarding authors' creations while also enabling
`
`- 10 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 11 Date Filed: 06/22/2023 Entry ID: 6575457
`
`others to build on that work." Id.10 Though guided by the Supreme
`
`Court's criteria and the objectives of copyright law, courts
`
`ultimately have "broad discretion . . . in deciding whether to
`
`fee-shift." Id. at 208; see also id. at 209 ("[C]ourts must view
`
`all the circumstances of a case on their own terms, in light of
`
`the Copyright Act's essential goals.").
`
`
`
`
`
`With these principles in mind, we first consider the
`
`district court's fees determination and then address Klamer's and
`
`Hasbro's motions for appellate fees.
`
`B. Appeals from the Denial of Fees
`
`
`
`
`
`
`
`
`
`1. The District Court's Decision
`
`In its ruling on the defendants' fee requests, which it
`
`
`10 As Klamer points out, some circuits take the view that fee
`
`awards under § 505 should be "the rule rather than the exception
`and should be awarded routinely." Bell v. Eagle Mountain Saginaw
`Indep. Sch. Dist., 27 F.4th 313, 326 (5th Cir. 2022) (quoting
`Virgin Records Am., Inc. v. Thompson, 512 F.3d 724, 726 (5th Cir.
`2008)). The Seventh Circuit treats that "rule" as a presumption
`that the prevailing party is entitled to a fee award and, "[i]n
`the case of prevailing defendants, . . . this presumption [is]
`'very strong.'" Mostly Memories, Inc. v. For Your Ease Only, Inc.,
`526 F.3d 1093, 1099 (7th Cir. 2008) (quoting Assessment Techs. of
`WI, LLC v. WIREdata, Inc., 361 F.3d 434, 437 (7th Cir. 2004)).
`However, other circuits have disagreed that the inquiry should
`tilt in favor of a fee award. See, e.g., Designworks Homes, Inc.
`v. Thomson Sailors Homes, L.L.C., 9 F.4th 961, 965 (8th Cir. 2021),
`cert. denied sub nom James v. Thomson Sailors Homes, L.L.C., 143
`S. Ct. 147 (2022); Marshall & Swift/Boeckh, LLC v. Dewberry & Davis
`LLC, 586 F. App'x 448, 449 (9th Cir. 2014); Lava Records, LLC v.
`Amurao, 354 F. App'x 461, 462-63 (2d Cir. 2009). We see no reason
`to depart from our approach of applying the factors without a
`predisposition toward granting fees. See, e.g., Airframe Sys.,
`658 F.3d at 108-110.
`
`- 11 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 12 Date Filed: 06/22/2023 Entry ID: 6575457
`
`characterized as "a close call," the district court focused
`
`primarily on the reasonableness of the Markham parties' copyright
`
`claim. Markham Concepts, 2021 WL 5161772, at *1. After briefly
`
`describing the competing contentions, the court concluded that
`
`"both sides raised plausible arguments and [p]laintiffs' claim,
`
`though unsuccessful, was not so weak as to be objectively
`
`unreasonable to pursue." Id. at *4.
`
`
`
`
`
`With respect to the governing law, the court noted that
`
`the plaintiffs had expert support in arguing that the Supreme
`
`Court, in Community for Creative Non-Violence v. Reid, 490 U.S.
`
`730 (1989), had abrogated the instance and expense test for
`
`identifying works for hire under the 1909 Act. See Markham
`
`Concepts, 2021 WL 5161772, at *2 (citing Melville B. Nimmer & David
`
`Nimmer, Nimmer on Copyright § 9.03[D] (2019)). Primarily for that
`
`reason, the court "hesitate[d] to say that [p]laintiffs 'argue[d]
`
`for an unreasonable extension of copyright protection.'" Id.
`
`(quoting Matthews v. Freedman, 157 F.3d 25, 29 (1st Cir. 1998)
`
`(third alteration and emphasis in district court opinion)).11 The
`
`court similarly concluded that the plaintiffs' factual arguments
`
`were not unreasonable. See id. at *3-4. The court observed that
`
`
`11 The district court also considered it "somewhat telling"
`that the status of the instance and expense test after Reid had
`been raised by other litigants before the Supreme Court, "lend[ing]
`some support to the conclusion that [p]laintiffs' position was
`reasonable." Markham Concepts, 2021 WL 5161772, at *2 n.7 (citing
`Markham Concepts, 1 F.4th at 83 n.4).
`
`- 12 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 13 Date Filed: 06/22/2023 Entry ID: 6575457
`
`"[b]oth sides came to trial with evidence to support their claims
`
`on all theories," id. at *3, and it stated that "[d]efendants'
`
`success turned on how the factfinder interpreted the evidence and
`
`assessed credibility," id. at *4.
`
`
`
`
`
`After finding that the plaintiffs' case was not
`
`"objectively unreasonable," the court "ma[de] quick work" of the
`
`other Fogerty factors. Id. It observed that, "[b]ecause the case
`
`was not objectively unreasonable, it follows that it was not
`
`frivolous." Id. The court also detected "[n]othing in the record"
`
`to show "that [p]laintiffs proceeded with an improper motivation
`
`that justifies an award," and it did not see "any meaningful
`
`deterrence effect" from awarding fees to the defendants. Id.
`
`Based on its assessment of the factors, "the [c]ourt conclude[d]
`
`that the litigation furthered the purposes of the Copyright Act,"
`
`leading it to deny the defendants' fee requests. Id. at *5.
`
`
`
`
`
`
`
`
`
`2. Discussion
`
`On appeal, the defendants insist that the district court
`
`misjudged the strength of both the legal and factual arguments
`
`advanced by the plaintiffs. Hasbro and Klamer assert that the
`
`court did not adequately address the serious flaws in the Markham
`
`parties' contentions, disregarding what they characterize as the
`
`"fundamental problems with [p]laintiffs' legal positions" and
`
`failing to properly weigh the evidence in the record showing that
`
`the prototype was a work made for hire. The court further erred,
`
`- 13 -
`
`

`

`Case: 19-1927 Document: 00118023105 Page: 14 Date Filed: 06/22/2023 Entry ID: 6575457
`
`the defendants claim, by summarily discounting the significance of
`
`other factors -- particularly the plaintiffs' improper motivations
`
`and the need for compensation and deterrence.
`
`
`
`
`
` As we have noted, a district court's ruling on fees may
`
`be reversed only for an abuse of discretion. See Small Just. LLC
`
`v. Xcentric Ventures LLC, 873 F.3d 313, 326 (1st Cir. 2017).
`
`Indeed, we have observed that such rulings are entitled to
`
`"extreme[]" deference, T-Peg, Inc. v. Vt. Timber Works, Inc., 669
`
`F.3d 59, 61 (1st Cir. 2012) (quoting Airframe Sys., 658 F.3d at
`
`109), because "the trial court is in the best position to gauge
`
`the bona fides of a request for fees," Spooner v. EEN, Inc., 644
`
`F.3d 62, 70 (1st Cir. 2011).
`
`
`
`
`
`With that wide berth for the district court's judgment
`
`call on fees, we see no basis for overriding the court's
`
`discretionary decision against fee-shifting in this case. The law
`
`applicable to the Markham parties' copyright claim was not so
`
`black-and-white that the district court acted unjustifiably when
`
`it deemed their argument against the instance and expense test as
`
`within the realm of reasonableness. As we observed in our merits
`
`opinion, the view that the Supreme Court's decision in Reid had
`
`effectively abrogated the instance and expense test "has at least
`
`one influential adherent" (i.e., the Nimmer copyright law
`
`treatise). Markham Concepts, 1 F.4th at 83 & n.3. In addition,
`
`our court's post-Reid decision invoking that test, Forward v.
`
`- 14 -
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`

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`Case: 19-1927 Document: 00118023105 Page: 15 Date Filed: 06/22/2023 Entry ID: 6575457
`
`Thorogood, 985 F.2d 604 (1st Cir. 1993), did not expressly consider
`
`the test's continuing viability after Reid. See Markham Concepts,
`
`1 F.4th at 81-82. With those two factors on their side, the
`
`plaintiffs' attempt to piggyback on the analysis in Reid and
`
`diminish the precedential force of Forward was not as unreasonable
`
`as the defendants depict it to be. The plaintiffs did not ask the
`
`district court to ignore our precedent. Rather, they argued that
`
`their interpretation of Reid should be considered because it had
`
`not been raised by the parties in Forward.
`
`
`
`
`
`A similar assessment applies to the facts. There was
`
`enough ambiguity in the evidence that was before the district court
`
`on how The Game of Life prototype was created, as well as on the
`
`understanding between Markham and Klamer about who should be
`
`designated the prototype's author, that we cannot reject the
`
`court's view that the plaintiffs' factual position was not wholly
`
`unreasonable. Although the district court acknowledged that
`
`factual reasonableness was "a closer call" than legal
`
`reasonableness,
`
`it
`
`noted
`
`that
`
`the
`
`record
`
`contained
`
`"contemporaneous documents" -- including the 1959 Assignment
`
`Agreement and letters between Markham and Klamer -- indicating
`
`that the two men viewed Markham as the prototype's "creator" such
`
`that he was the copyright holder. See Markham Concepts, 2021 WL
`
`- 15 -
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`

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`Case: 19-1927 Document: 00118023105 Page: 16 Date Filed: 06/22/2023 Entry ID: 6575457
`
`5161772, at *3.12
`
`
`
`
`
`Moreover, while testimony from Markham's employees about
`
`their contributions to the prototype unquestionably weakened the
`
`plaintiffs' claims, it was up to the district court -- as it
`
`observed -- to "interpret[] the evidence and assess[]
`
`credibility." Id. at *4; see also Markham Concepts, 1 F.4th at 84
`
`n.6 (noting that "it was the district court's job to sort through
`
`the evidence and decide what and who was credible"). The testimony
`
`of the employees, Grace Falco Chambers and Leonard Israel, was
`
`elicited in November 2017 about events that had transpired more
`
`than a half-century earlier. It was thus not inevitable that the
`
`district court would fully credit the testimony adverse to the
`
`Markham parties' position and construe the contemporaneous written
`
`evidence and prior statements against their view that Markham
`
`
`12 The 1959 Assignment Agreement between Markham and Link
`
`included a provision stating that, "[a]t the request of LINK,
`MARKHAM has invented, designed and developed a game tentatively
`known as 'THE GAME OF LIFE.'" Further, the agreement required
`Markham, upon Link's request, to pursue any intellectual property
`rights "to which he may be entitled as the inventor, designer and
`developer of the [g]ame" and to assign any such rights to Link,
`"provided that said assignments will revert to MARKHAM upon the
`termination of this agreement." Markham Concepts, 1 F.4th at 85.
`Klamer also praised Markham's work in a September 1965 letter,
`stating that "You did a good job. I think that the product you
`. . . came up with was topnotch." In that same letter, Klamer
`reported to Markham that he had asked Milton Bradley to credit
`Markham on the game packaging, but the toy company had declined to
`do so. In another early example of the evidence of Markham's role,
`a 1960 letter to a Link vice president from Milton Bradley's vice
`president referred to "the LIFE game of Bill Markham."
`
`- 16 -
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`

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`Case: 19-1927 Document: 00118023105 Page: 17 Date Filed: 06/22/2023 Entry ID: 6575457
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`should be credited with creating the prototype. Although the
`
`evidence strongly indicated that any such authorship by Markham
`
`was at Klamer's instance and expense, we noted in our merits
`
`decision that it was "a closer question" whether the assignment
`
`agreement between Klamer and Markham rebutted the work-for-hire
`
`presumption created by the instance and expense test. Markham
`
`Concepts, 1 F.4th at 85.
`
`
`
`
`
`Contrary to Klamer's argument, the district court's
`
`observation that the case "turned on how the factfinder interpreted
`
`the evidence and assessed credibility," Markham Concepts, 2021 WL
`
`5161772, at *4, does not reflect legal error or an assumption that
`
`attorney's fees should "not be awarded unless a party succeeds on
`
`summary judgment." Rather, in context, the district court's
`
`statement simply reflects its view that a thorough weighing of the
`
`strengths of both sides' evidence in this case led to its
`
`conclusion that the plaintiffs' claim was not "objectively
`
`unreasonable to pursue." Id.
`
`
`
`
`
`Hasbro and Klamer argue that, even if the instance and
`
`expense test did not apply, the plaintiffs' case was still
`
`factually hopeless because the evidence unequivocally supported
`
`their alternative theory for classifying the prototype as a work
`
`for hire -- i.e., that it was created within a traditional
`
`employer-employee relationship by Chambers and Israel for Markham.
`
`Both defendants emphasize that the Markham parties' counsel
`
`- 17 -
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`Case: 19-1927 Document: 00118023105 Page: 18 Date Filed: 06/22/2023 Entry ID: 6575457
`
`acknowledged in a colloquy with the district court that, if the
`
`court found that Israel and Chambers were Markham's employees,
`
`there would be no termination rights. The attorney made this
`
`comment while attempting to persuade the court, post-judgment, to
`
`reconsider its use of the instance and expense test and adjust its
`
`findings to declare that Markham was the author of the prototype.
`
`
`
`
`
`However, as we have noted, the district court did not
`
`address the alternative work-for-hire theory in its decision on
`
`the merits. Although the court briefly referred to the theory in
`
`its fees decision -- recognizing the force of the defendants'
`
`position in light of Chambers' and Israel's testimony -- it
`
`declined to entirely discredit the plaintiffs' view of the facts.
`
`See Markham Concepts, 2021 WL 5161772, at *3-4 (stating, inter
`
`alia, that "[b]oth sides came to trial with evidence to support
`
`their claims on all theories" (emphasis added)). We, in turn,
`
`decline to override the district court's overall assessment of the
`
`plaintiffs' factual case, particularly in the absence of findings
`
`and a ruling on the alternative theory.
`
`
`
`
`
`To be sure, the evidence shows substantial individual
`
`contributions by Israel and Chambers to the game box and board.
`
`The record is less clear, however, on how the various components
`
`of The Game of Life came together into the protectible creation
`
`defined by the 1976 Copyright Act as an "original work[] of
`
`authorship fixed in a[] tangible medium of expression." 17 U.S.C.
`
`- 18 -
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`

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`Case: 19-1927 Document: 00118023105 Page: 19 Date Filed: 06/22/2023 Entry ID: 6575457
`
`§ 102(a). For example, the record contains Markham's deposition
`
`testimony in 1989 that, before Klamer approached him about The
`
`Game of Life, he had invented a three-dimensional, foldable game-
`
`board format, which was the style ultimately used for the
`
`prototype.13 In the same deposition, Markham described affixing
`
`the "track" to the game board for the first time when he brought
`
`the elements of the prototype to a meeting with Milton Bradley
`
`representatives at a Los Angeles restaurant in August 1959.14
`
`
`13 Markham's 1989 testimony was elicited in a California
`
`state-court action he brought against Milton Bradley and the Link
`partners in a dispute over foreign royalties. The case settled,
`with Markham receiving an increased royalty percentage on overseas
`sales.
`
`14 The record also includes Chambers' testimony that some
`
`parts of the "final" prototype game board -- including the spinner,
`mountains, and "circuitous track" -- were constructed in plastic
`by outside contractors based on the models created in-house in
`paper, cardboard, or wood. She did not say whether she attached
`the plastic versions of those items to the board. Israel's
`testimony about how the prototype was constructed also left room
`for interpretation. At one point, he testified that he had primary
`responsibility for the box cover, Sue Markham had primary
`responsibility for the rules, and Chambers "[a]ssembled the things
`in the proper place and with the proper kind of wording and colors
`. . . on the final board." Following up on re-cross,