Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF WASHINGTON
`
` TIM VINING REAL ESTATE
`APPRAISER AND
`CONSULTANTS, INC., a
`Washington corporation,
` Plaintiff,
` vs.
`CLARK JENNINGS & Associates,
`INC, a Washington corporation;
`STEVE WEBER, and his marital
`community; HENRY JOHNSON,
`and his marital community; SCOTT
`ANDERSON, and his marital
`community; and JIM O’CONNOR,
`an his marital community,
`
` Defendants.
`
`NO. CV-04-3110-RHW
`ORDER DENYING PLAINTIFF’S
`PARTIAL SUMMARY JUDGMENT
`MOTION, AND GRANTING IN
`PART AND DENYING IN PART
`DEFENDANT’S SUMMARY
`JUDGMENT MOTION
`
`Before the court are Plaintiff’s Motion for Partial Summary Judgment on
`Liability (Ct. Rec. 13), Defendants’ Cross-Motion for Summary Judgment on Non-
`Infringement (Ct. Rec. 34), Defendants’ Motion to Modestly Exceed Page Limit
`(Ct. Rec. 59), Defendants’ Motion to Strike (Ct. Rec. 61), Defendants’ Motion to
`Strike (Ct. Rec. 64), and the joint Stipulation Regarding Extension of Time for
`Reply Brief and Expert Witness Disclosures (Ct. Rec. 51).
`A hearing was held June 1, 2005, in Yakima, Washington. Plaintiff was
`represented by Patrick Ballew and Quinten Bowman. Gary Luloff and Paul Beattie
`appeared on behalf of the Defendants.
`//
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`SUMMARY JUDGMENT ORDER ~ 1
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`BACKGROUND FACTS
`Plaintiff filed a complaint for copyright infringement, unfair competition,
`civil conspiracy, and unjust enrichment on October 4, 2004. He asserts claims
`against a corporate entity, Clark Jennings & Associates, Inc. and four individual
`Defendants, Steve Weber, Henry Johnson, Scott Anderson, and Jim O’Connor.
`Plaintiff is a Washington State certified general real estate appraiser,
`specializing in appraisals of commercial, industrial, and agricultural real estate.
`On May 3, 2001, Plaintiff completed an Appraisal Report for U.S. Bank and
`MONY Life Insurance, as requested. The Appraisal Report appraised property
`known as the A&B Hop Farms. It was over 250 pages in length, and cost $20,000
`to prepare. Plaintiff alleges that Defendants copied portions of the Appraisal
`Report containing his personal observations and used that copied material to
`prepare real estate sales brochures to advertise, market, and sell A & B Hop Farms.
`On February 20, 2002, Plaintiff was issued a Certificate of Registration No.
`TX5-455-482 for the Appraisal Report in question. In April 2005, he was issued a
`Supplementary Certificate of Registration.
`DISCUSSION
`
`I. Standard of Review:
`Summary judgment is appropriate if 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 judgment as a matter of law.” Fed. R. Civ. P. 56(c). When considering
`a motion for summary judgment, a court may neither weigh the evidence nor assess
`credibility; instead, “the evidence of the non-movant is to be believed, and all
`justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby,
`Inc., 477 U.S. 242, 255 (1986).
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`SUMMARY JUDGMENT ORDER ~ 2
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`Under Rule 56(c), the moving party bears the initial burden of showing the
`absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
`317, 323 (1986). Once the moving party meets its burden, the burden shifts to the
`non-moving party to demonstrate that genuine issues remain for trial. Matsushita
`Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Adickes v.
`S.H. Kress & Co., 398 U.S. 144, 160-61 (1970). Rule 56(e) states that “an adverse
`party may not rest upon the mere allegations or denials of the adverse party’s
`pleadings, but the adverse party’s response . . . must set forth specific facts
`showing that there is a genuine issue for trial. If the party does not so respond,
`summary judgment, if appropriate, shall be entered against the adverse party.”
`Fed. R. Civ. P. 56(e).
`II. Plaintiff’s Motion for Summary Judgment:
`Plaintiff filed his Motion for Summary Judgment as to the joint and several
`liability of all Defendants for direct copyright infringement. In order to establish a
`claim for copyright infringement, a plaintiff must show: (1) ownership of a valid
`copyright; and (2) copying by the defendant of the “original” elements of the work.
` CDN, Inc. v. Kapes, 197 F.3d 1256, 1258 (9th Cir. 1999). Copyright registration
`is considered prima facie evidence of the validity of the copyright, which can be
`challenged by presenting evidence attacking the elements of a valid copyright, such
`as ownership, copyrightable subject matter, and originality. Syntek Semiconductor
`Co. v. Microchip Technology, 307 F.3d 775, 781 (9th Cir. 2002). Plaintiff’s
`Certificate of Registration No. TX 5-455-482 establishes prima facie evidence of a
`valid copyright (Ct. Rec. 45). Thus, Plaintiff has met his burden of establishing
`that he holds a valid copyright.
`A copyright owner has the exclusive rights to copy, distribute, or display the
`copyrighted work publicly. 17 U.S.C. § 106 . Under 17 U.S.C. § 204(a), a
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`SUMMARY JUDGMENT ORDER ~ 3
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`copyright holder may transfer any or all of these rights, but in order for such a
`transfer to be valid it must be in writing. Section 204 applies only to the transfer of
`exclusive rights; grants of nonexclusive licenses need not be in writing.1 Effects
`Assoc., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990); see also Foad Consulting
`Group, Inc. v. Musil Govan Azzalino, 270 F.3d 821 (9th Cir. 2001); Fosson v.
`Palace (Waterland) Ltd., 78 F.3d 1448 (9th Cir. 1996); ITSI T.V. Prod., Inc. v.
`California Authority of Racing Fairs, 70 F.3d 1278 (9th Cir. 1995). In the case of
`an implied nonexclusive license, the licensor-creator of the work, by granting an
`implied nonexclusive license, does not transfer ownership of the copyright to the
`licensee. I.A.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996). The copyright
`owner simply permits the use of a copyrighted work in a particular manner. Id. In
`contrast to an exclusive license, a “nonexclusive license may be granted orally, or
`may even be implied from conduct.” Id. The existence of a nonexclusive license
`creates an affirmative defense to a claim of copyright infringement. Id., (citing
`Effects, 908 F.2d at 559).
`A nonexclusive license may be granted orally or may be implied by conduct.
` See Effects, 908 F.3d at 558 . The court in Effects established a three-part test to
`determine whether a nonexclusive license is granted to a party who commissions a
`work from an author: (1) whether the author created the work at the request of the
`party claiming the license, (2) whether the author “handed the work over” to the
`other party, (3) whether the author intended that the other party copy and distribute
`
`1Section 101 defines transfers of ownership broadly, but expressly removes
`from the scope of § 204 a nonexclusive license. 17 U.S.C. § 101 (“a transfer of
`copyright ownership is an assignment, mortgage, exclusive license, or any other
`conveyance, alienation, or hypothecation of a copyright, whether or not it is limited
`in time or place of effect, but not including a nonexclusive license.”)
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`the work. Effects, 908 F.2d at 558. Effects stands for the proposition that “a seller
`grants a buyer an implied license to use a product for the purpose for which the
`seller sold it to the buyer.” Foad, 270 F.3d at 827.
`The Ninth Circuit held that, in determining whether a copyright holder has
`granted an implied, nonexclusive copyright license, the court must apply state
`contract law, not federal copyright law. Foad, 270 F.3d at 826-27 (holding that
`where the Copyright Act does not address an issue, the court must turn to state law
`to resolve the matter, so long as the state law does not otherwise conflict with the
`Copyright Act). Thus, federal law creates the license, but the determination of
`whether such a license exists in a particular contract requires the application of
`state law. Id.
`In this case, whether Defendants have an implied nonexclusive license
`depends, in part, on the terms of the contract between Plaintiff and MONY/U.S.
`Bank. Under Washington contract law, a person having the exclusive right to sell
`an article may restrict the purchaser’s use of such article within specific boundaries
`of time, place or method, which then become the measure of an implied license
`arising from the sale. See Thys v. State, 31 Wash. 2d 739, 755 (Wash. 1948). In
`Washington, parol or extrinsic evidence is not admissible to add to, subtract from,
`vary, or contradict written instruments that are contractual in nature and that are
`valid, complete, unambiguous, and not affected by fraud, accident, or mistake.
`Buyken v. Ertner, 33 Wash. 2d 334, 341, 205 P.2d 628 (Wash. 1949). However,
`extrinsic evidence of trade usage and course of dealing is admissible despite a lack
`of ambiguity on the face of the contract. Puget Sound Financial, L.L.C. v.
`Unisearch, Inc., 146 Wash. 2d 428, 434. 47 P.3d 940 (Wash. 2002).
`If MONY/U.S. Bank has a nonexclusive license to use the Appraisal to sell
`the property in question and if Defendants were agents of MONY/U.S. Bank, then
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`SUMMARY JUDGMENT ORDER ~ 5
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`Defendants may have a defense to any claim for direct copyright infringement.
`Under Wash. Rev. Code Ann. § 18.86.020(1)(a), a licensee who performs real
`estate brokerage services for a seller and has entered into a written agreement with
`the seller is the seller’s agent. An agent’s actual authority may be express or
`implied. King v. Riverland, 125 Wash. 2d 500, 507 (Wash. 1994). Implied
`authority is actual authority, which the principal is deemed to have actually
`possessed. Id. Implied authority is proved through circumstantial evidence. Id.
`Authority to perform particular services for a principal carries with it the implied
`authority to perform the usual and necessary acts essential to carry out the
`authorized services. Id. (quoting Walker v. Pacific Mobile Homes, Inc., 68 Wash.
`2d 347, 351 (1966)).
`The Court finds that Plaintiff holds a valid copyright in the Appraisal
`Report. Defendants have established that genuine issues of material fact remain
`regarding whether Defendants’ copying and distributing of Plaintiff’s Appraisal
`was permissible under the theory of implied nonexclusive copyright license
`between MONY/U.S. Bank and Defendants, as agents of the former. Thus,
`Plaintiff’s motion for summary judgment on a direct liability theory is denied.
`III. Defendants’ Motion for Summary Judgment:
`Defendants filed a counter-Summary Judgment Motion regarding Plaintiff’s
`claims of (1) direct liability, (2) contributory liability, and (3) vicarious liability.
`A. Direct Infringement
`To establish direct copyright infringement, a plaintiff must show (1)
`ownership of allegedly-infringing material, and (2) that the alleged infringers
`violate at least one exclusive right granted to copyright holders. A&M Records,
`Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001). A copyright owner has
`the exclusive rights to copy, distribute, or display the copyrighted work publicly.
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`17 U.S.C. § 106 (1988).
`As discussed above, Plaintiff has adduced facts to show ownership of the
`copyrighted material through the Registration Certificate (Ct. Rec. 13). Under the
`second prong of direct copyright infringement, Plaintiff asserts that Defendants
`O’Connor and Anderson directly copied and/or distributed, respectively,
`significant portions of the Appraisal Report. Defendant Anderson concedes that he
`sent at least one sales brochure to a potential buyer (Ct. Rec. 48, Deposition of
`Scott Anderson, p. 18),2 and Defendant O’Connor admits to having created the
`allegedly-infringing brochures (Ct. Rec. 48, Deposition of James O’Connor, p. 25).
` To the extent that Defendants O’Connor or Johnson are liable for direct
`infringement, Defendant Clark Jennings, as their employer, also is liable. Thus,
`Plaintiff has produced enough evidence to create a genuine issue of material fact
`regarding his claim for direct infringement for Defendants Anderson, O’Connor,
`and Clark Jennings. Summary judgment for these Defendants is accordingly
`denied.
`For Defendants Weber and Johnson, however, Plaintiff fails to produce any
`fact that would establish direct infringement of the allegedly-copyrighted materials
`(Ct. Rec. 47). Defendants Weber and Johnson declare that they have not engaged
`in the preparation of the sales brochure, nor in any direct copying of the Appraisal
`(Ct. Rec. 48, Deposition of Johnson, Deposition of Weber). Plaintiff does not
`refute these assertions in his reply (Ct. Rec. 47). Summary judgment regarding
`
`2Defendant Scott Anderson recently filed an affidavit averring that he had no
`personal involvement in the distribution of the sales brochures, other than the one
`requested to be mailed (Ct. Rec. 75). This Declaration was filed too late to merit
`consideration, and the Court will not consider it for the purposes of summary
`judgement.
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`direct infringement is, thus, granted for individual Defendants Johnson and Weber.
`B. Vicarious Infringement
`Three elements are required to prove a defendant is vicariously liable for
`copyright infringement: (1) direct infringement by a primary party, (2) a direct
`financial benefit to the defendant, and (3) the right and ability to supervise the
`infringers. Metro-Goldwyn-Mayer Studios v. Grokster Ltd., 380 F.3d 1154, 1164
`(9th Cir. 2004).
`Under the first element, as discussed above, there is a genuine issue of
`material fact regarding direct liability of Defendants Anderson, O’Connor, and
`Clark Jennings. For the second element, Plaintiff presents evidence showing that
`Defendant Clark Jennings, as a corporation, has the right and ability to supervise
`its employees and could have reviewed the sales brochure at issue (Ct. Rec. 48,
`Deposition of Scott Anderson, p. 18); Defendant Weber admitted that he could
`supervise any activity occurring at any of Clark Jennings’s offices (Ct. Rec. 48,
`Deposition of Steven Weber, p. 28); Defendant Johnson delegated the preparation
`of the brochures (Ct. Rec. 48); Defendant O’Connor volunteered to write the
`allegedly-infringing sales brochures (Ct. Rec. 48, Deposition of James O’Connor,
`p. 25); and Defendant Anderson requested the sending of at least one sales
`brochure to potential buyers (Ct. Rec. 48, Deposition of Scott Anderson, p. 18).
`For the third element of vicarious copyright infringement, Plaintiffs contend that
`Defendants received a financial benefit in that Defendant Clark Jennings made
`significant commission from the sale of real estate resulting from the use of the
`Appraisal (Ct. Rec. 48, Exhibit 31 to Deposition of Steven Weber, p. 152); a
`portion of Defendant Weber’s salary is Clark Jennings’s share of commissions
`earned on sale of real estate (Ct. Rec. 48, Deposition of Steve Weber, p. 109); by
`copying the Appraisal, Defendant Johnson saved somewhere between “a few days”
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`and a week that employees could spend on other business (Ct. Rec. 48, Declaration
`of Henry Johnson, p. 85); and Defendant Anderson admits that sales brochures are
`one of the tools used to sell real property and received commission for the sale of
`the real property described in the brochures (Ct. Rec. 48, Deposition of Scott
`Anderson, p. 14).
`The court finds that there is a genuine issue of material fact as to
`Defendants’ liability for vicarious copyright infringement. Therefore, summary
`judgment on this issue is not appropriate at this time.
`C. Contributory Infringement
`In his complaint, Plaintiff argues that all Defendants are liable for
`contributory copyright infringement. Defendants move for summary judgment on
`claims of contributory infringement against each Defendant.
`Contributory copyright infringement requires: (1) direct infringement by the
`primary user, (2) actual or constructive knowledge of the direct infringement, and
`(3) a material contribution to the infringement. Grokster, 380 F.3d at 1160 (9th
`Cir. 2004). A plaintiff bears the burden of showing all elements of contributory
`copyright infringement. Id.
`Plaintiff does not address the issue of contributory liability in his response to
`Defendants’ Cross-Motion for Summary Judgment (Ct. Rec. 47). To the extent that
`(1) the copying of the Appraisal Report by Defendant O’Connor, and (2) the
`distribution of sales brochures by Defendant Anderson constitute two separate
`instances of direct infringement, neither of these two Defendants had any
`knowledge of the direct infringement on the part the other (Ct. Rec. 45). Therefore,
`neither of the two Defendants, O’Connor and Anderson, satisfies the second prong
`of contributory infringement. None of the remaining Defendants, Clark Jennings,
`Weber, or Johnson, had any knowledge of the instances of the alleged direct
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`infringement (Ct. Rec. 45). Thus, there is no dispute of material
`fact regarding the knowledge element of contributory copyright infringement for
`all Defendants. Because Plaintiff has not established any genuine issue of material
`fact, summary judgment for Defendants is appropriate for Plaintiff’s contributory
`copyright infringement claim. The motion for summary judgment on contributory
`copyright infringement is for all Defendants.
`IV. Defendant’s Two Motions to Strike
`On March 23 and March 27, 2005, Defendants filed two (2) Motions to
`Strike (Ct. Rec. 61, 64). The Court finds that both these motions were filed too late
`to merit consideration and will not consider the arguments.
`Having reviewed the record, heard from counsel, and been fully advised in
`this matter, IT IS HEREBY ORDERED:
`1. Plaintiff Tim Vining’s Motion for Summary Judgment Against Defendant
`Clark Jennings (Ct. Rec. 13) is DENIED.
`2. Defendants’ Motion for Summary Judgment (Ct. Rec. 34) is GRANTED
`IN PART and DENIED IN PART. Summary judgment is granted on the claim
`of Direct Copyright Infringement with respect to Defendants Clark Jennings,
`Weber, and Johnson. Summary Judgment is granted on the Claim of Contributory
`Copyright Infringement with respect to all Defendants. Defendants’ remaining
`Summary Judgment Motions are denied.
`3. Defendants’ Clark Jennings’ Motion to Modestly Exceed Page Limit (Ct.
`Rec. 59) is GRANTED.
`4. Defendants’ two (2) Motions to Strike (Ct. Rec. 61 and 64) are
`STRICKEN.
`5. The joint Stipulation Regarding Extension of Time for Reply Brief and
`Expert Witness Disclosures (Ct. Rec. 51) is GRANTED.
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`Case 2:04-cv-03110-RHW Document 77 Filed 06/23/05
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`IT IS SO ORDERED. The District Court Executive is directed to enter this
`Order and forward copies to counsel.
`DATED this 23rd day of June, 2005.
`
`s/ ROBERT H. WHALEY
`United States District Judge
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