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COPYRIGHT CASES

Assignment 7/11/16
MALALANG VS MC CULLOUGH
1. JOAQUIN VS DRILON
2. BAKER VS SELDEN
3. PEARL AND DEAN INC. VS SHOEMART
4. ABS-CBN VS FELIPE GOZON
5. MAZER VS STEIN
6. MASON VS MONTOMERY DATA INC
7. BURROW- GILES LITOGRAPHIC VS SARONY
8. LOS ANGELES NEW SERVICE VS TULLO
9. WHELAN ASSOCIATES VS JASLOW DENTAL LAB
10.TAKEALL VS PEPSICO USCA
11.WALDMAN VS LANDOLL
12.CONTRY KIDS VS SHEEN
13.PLAYBOY ENTERPRISES VS GEORGE FRENA

gonzalesvictoriaa.
Protection is on the expression
JOAQUIN VS DRILON
DECISION
MENDOZA, J.:

This is a petition for certiorari. Petitioners seek to annul the resolution of the Department of Justice, dated August
12, 1992, in Criminal Case No. Q-92-27854, entitled Gabriel Zosa, et al. v. City Prosecutor of Quezon City and Francisco
Joaquin, Jr., and its resolution, dated December 3, 1992, denying petitioner Joaquins motion for reconsideration.
Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of Copyright No. M922, dated January 28,
1971, of Rhoda and Me, a dating game show aired from 1970 to 1977.
On June 28, 1973, petitioner BJPI submitted to the National Library an addendum to its certificate of copyright
specifying the shows format and style of presentation.
On July 14, 1991, while watching television, petitioner Francisco Joaquin, Jr., president of BJPI, saw on RPN Channel
9 an episode of Its a Date, which was produced by IXL Productions, Inc. (IXL). On July 18, 1991, he wrote a letter to
private respondent Gabriel M. Zosa, president and general manager of IXL, informing Zosa that BJPI had a copyright
to Rhoda and Me and demanding that IXL discontinue airing Its a Date.
In a letter, dated July 19, 1991, private respondent Zosa apologized to petitioner Joaquin and requested a meeting
to discuss a possible settlement.IXL, however, continued airing Its a Date, prompting petitioner Joaquin to send a second
letter on July 25, 1991 in which he reiterated his demand and warned that, if IXL did not comply, he would endorse the
matter to his attorneys for proper legal action.
Meanwhile, private respondent Zosa sought to register IXLs copyright to the first episode of Its a Date for which it
was issued by the National Library a certificate of copyright on August 14, 1991.
Upon complaint of petitioners, an information for violation of P.D. No. 49 was filed against private respondent Zosa
together with certain officers of RPN Channel 9, namely, William Esposo, Felipe Medina, and Casey Francisco, in the
Regional Trial Court of Quezon City where it was docketed as Criminal Case No. 92-27854 and assigned to Branch 104
thereof. However, private respondent Zosa sought a review of the resolution of the Assistant City Prosecutor before the
Department of Justice.
On August 12, 1992, respondent Secretary of Justice Franklin M. Drilon reversed the Assistant City Prosecutors
findings and directed him to move for the dismissal of the case against private respondents. [1]
Petitioner Joaquin filed a motion for reconsideration, but his motion was denied by respondent Secretary of Justice
on December 3, 1992. Hence, this petition. Petitioners contend that:
1. The public respondent gravely abused his discretion amounting to lack of jurisdiction when he invoked non-
presentation of the master tape as being fatal to the existence of probable cause to prove infringement,
despite the fact that private respondents never raised the same as a controverted issue.
2. The public respondent gravely abused his discretion amounting to lack of jurisdiction when he arrogated
unto himself the determination of what is copyrightable - an issue which is exclusively within the
jurisdiction of the regional trial court to assess in a proper proceeding.
Both public and private respondents maintain that petitioners failed to establish the existence of probable cause
due to their failure to present the copyrighted master videotape of Rhoda and Me. They contend that petitioner BJPIs
copyright covers only a specific episode of Rhoda and Me and that the formats or concepts of dating game shows are
not covered by copyright protection under P. D. No. 49.
Non-Assignment of Error

Petitioners claim that their failure to submit the copyrighted master videotape of the television show Rhoda and
Me was not raised in issue by private respondents during the preliminary investigation and, therefore, it was error for
the Secretary of Justice to reverse the investigating prosecutors finding of probable cause on this ground.
A preliminary investigation falls under the authority of the state prosecutor who is given by law the power to direct
and control criminal actions.[2] He is, however, subject to the control of the Secretary of Justice. Thus, Rule 112, 4 of the
Revised Rules of Criminal Procedure, provides:

SEC. 4. Duty of investigating fiscal. - If the investigating fiscal finds cause to hold the respondent for trial, he
shall prepare the resolution and corresponding information. He shall certify under oath that he, or as shown by
the record, an authorized officer, has personally examined the complainant and his witnesses, that there is
reasonable ground to believe that a crime has been committed and that the accused is probably guilty thereof,
that the accused was informed of the complaint and of the evidence submitted against him and that he was
given an opportunity to submit controverting evidence. Otherwise, he shall recommend dismissal of the
complaint.

In either case, he shall forward the records of the case to the provincial or city fiscal or chief state
prosecutor within five (5) days from his resolution. The latter shall take appropriate action thereon within ten
(10) days from receipt thereof, immediately informing the parties of said action.

No complaint or information may be filed or dismissed by an investigating fiscal without the prior written
authority or approval of the provincial or city fiscal or chief state prosecutor.

Where the investigating assistant fiscal recommends the dismissal of the case but his findings are reversed
by the provincial or city fiscal or chief state prosecutor on the ground that a probable cause exists, the latter
may, by himself, file the corresponding information against the respondent or direct any other assistant fiscal or
state prosecutor to do so, without conducting another preliminary investigation.

If upon petition by a proper party, the Secretary of Justice reverses the resolution of the provincial or city
fiscal or chief state prosecutor, he shall direct the fiscal concerned to file the corresponding information without
conducting another preliminary investigation or to dismiss or move for dismissal of the complaint or
information.

In reviewing resolutions of prosecutors, the Secretary of Justice is not precluded from considering errors, although
unassigned, for the purpose of determining whether there is probable cause for filing cases in court. He must make his
own finding of probable cause and is not confined to the issues raised by the parties during preliminary investigation.
Moreover, his findings are not subject to review unless shown to have been made with grave abuse.

Opinion of the Secretary of Justice

Petitioners contend, however, that the determination of the question whether the format or mechanics of a show
is entitled to copyright protection is for the court, and not the Secretary of Justice, to make. They assail the following
portion of the resolution of the respondent Secretary of Justice:

[T]he essence of copyright infringement is the copying, in whole or in part, of copyrightable materials as defined
and enumerated in Section 2 of PD. No. 49. Apart from the manner in which it is actually expressed, however, the
idea of a dating game show is, in the opinion of this Office, a non-copyrightable material. Ideas, concepts, formats,
or schemes in their abstract form clearly do not fall within the class of works or materials susceptible of copyright
registration as provided in PD. No. 49.[3] (Emphasis added.)
It is indeed true that the question whether the format or mechanics of petitioners television show is entitled to
copyright protection is a legal question for the court to make. This does not, however, preclude respondent Secretary of
Justice from making a preliminary determination of this question in resolving whether there is probable cause for filing
the case in court. In doing so in this case, he did not commit any grave error.

Presentation of Master Tape

Petitioners claim that respondent Secretary of Justice gravely abused his discretion in ruling that the master
videotape should have been presented in order to determine whether there was probable cause for copyright
infringement. They contend that 20th Century Fox Film Corporation v. Court of Appeals,[4] on which respondent Secretary
of Justice relied in reversing the resolution of the investigating prosecutor, is inapplicable to the case at bar because in
the present case, the parties presented sufficient evidence which clearly establish linkages between the copyrighted
show Rhoda and Me and the infringing TV show Its a Date.[5]
The case of 20th Century Fox Film Corporation involved raids conducted on various videotape outlets allegedly
selling or renting out pirated videotapes. The trial court found that the affidavits of NBI agents, given in support of the
application for the search warrant, were insufficient without the master tape. Accordingly, the trial court lifted the
search warrants it had previously issued against the defendants. On petition for review, this Court sustained the action
of the trial court and ruled:[6]

The presentation of the master tapes of the copyrighted films from which the pirated films were allegedly copied, was
necessary for the validity of search warrants against those who have in their possession the pirated films. The
petitioners argument to the effect that the presentation of the master tapes at the time of application may not be
necessary as these would be merely evidentiary in nature and not determinative of whether or not a probable cause
exists to justify the issuance of the search warrants is not meritorious. The court cannot presume that duplicate or
copied tapes were necessarily reproduced from master tapes that it owns.

The application for search warrants was directed against video tape outlets which allegedly were engaged in the
unauthorized sale and renting out of copyrighted films belonging to the petitioner pursuant to P.D. 49.

The essence of a copyright infringement is the similarity or at least substantial similarity of the purported pirated works
to the copyrighted work. Hence, the applicant must present to the court the copyrighted films to compare them with
the purchased evidence of the video tapes allegedly pirated to determine whether the latter is an unauthorized
reproduction of the former. This linkage of the copyrighted films to the pirated films must be established to satisfy the
requirements of probable cause. Mere allegations as to the existence of the copyrighted films cannot serve as basis for
the issuance of a search warrant.

This ruling was qualified in the later case of Columbia Pictures, Inc. v. Court of Appeals[7] in which it was held:

In fine, the supposed pronunciamento in said case regarding the necessity for the presentation of the master tapes of
the copyrighted films for the validity of search warrants should at most be understood to merely serve as a guidepost in
determining the existence of probable cause in copyright infringement cases where there is doubt as to the true nexus
between the master tape and the pirated copies. An objective and careful reading of the decision in said case could lead
to no other conclusion than that said directive was hardly intended to be a sweeping and inflexible requirement in all or
similar copyright infringement cases. . . .[8]

In the case at bar, during the preliminary investigation, petitioners and private respondents presented written
descriptions of the formats of their respective televisions shows, on the basis of which the investigating prosecutor
ruled:

As may [be] gleaned from the evidence on record, the substance of the television productions complainants RHODA
AND ME and Zosas ITS A DATE is that two matches are made between a male and a female, both single, and the two
couples are treated to a night or two of dining and/or dancing at the expense of the show. The major concepts of both
shows is the same. Any difference appear mere variations of the major concepts.

That there is an infringement on the copyright of the show RHODA AND ME both in content and in the execution of the
video presentation are established because respondents ITS A DATE is practically an exact copy of complainants RHODA
AND ME because of substantial similarities as follows, to wit:

RHODA AND ME ITS A DATE

Set I Set I

a. Unmarried participant a. same

of one gender (searcher) appears on one side of a divider, while three (3) unmarried participants of the other
gender are on the other side of the divider. This arrangement is done to ensure that the searcher does not see
the searchees.

b. Searcher asks a question b. same


to be answered by each of the searchees. The purpose is to
determine who among the searchees is the most
compatible with the searcher.

c. Searcher speculates on the c. same

match to the searchee.

d. Selection is made by the d. Selection is

use of compute (sic) methods, based on the


or by the way questions are answer of the
answered, or similar methods. Searchees.

Set 2 Set 2

Same as above with the genders same

of the searcher and searchees interchanged.[9]


Petitioners assert that the format of Rhoda and Me is a product of ingenuity and skill and is thus entitled to
copyright protection. It is their position that the presentation of a point-by-point comparison of the formats of the two
shows clearly demonstrates the nexus between the shows and hence establishes the existence of probable cause for
copyright infringement. Such being the case, they did not have to produce the master tape.
To begin with, the format of a show is not copyrightable. Section 2 of P.D. No. 49,[10] otherwise known as the
DECREE ON INTELLECTUAL PROPERTY, enumerates the classes of work entitled to copyright protection, to wit:

Section 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of the
following classes of works:

(A) Books, including composite and cyclopedic works, manuscripts, directories, and gazetteers;

(B) Periodicals, including pamphlets and newspapers;


(C) Lectures, sermons, addresses, dissertations prepared for oral delivery;

(D) Letters;

(E) Dramatic or dramatico-musical compositions; choreographic works and entertainments in dumb shows, the acting
form of which is fixed in writing or otherwise;

(F) Musical compositions, with or without words;

(G) Works of drawing, painting, architecture, sculpture, engraving, lithography, and other works of art; models or
designs for works of art;

(H) Reproductions of a work of art;

(I) Original ornamental designs or models for articles of manufacture, whether or not patentable, and other works of
applied art;

(J) Maps, plans, sketches, and charts;

(K) Drawings or plastic works of a scientific or technical character;

(L) Photographic works and works produced by a process analogous to photography; lantern slides;

(M) Cinematographic works and works produced by a process analogous to cinematography or any process for making
audio-visual recordings;

(N) Computer programs;

(O) Prints, pictorial illustrations advertising copies, labels, tags, and box wraps;

(P) Dramatizations, translations, adaptations, abridgements, arrangements and other alterations of literary, musical or
artistic works or of works of the Philippine government as herein defined, which shall be protected as provided in
Section 8 of this Decree.

(Q) Collections of literary, scholarly, or artistic works or of works referred to in Section 9 of this Decree which by reason
of the selection and arrangement of their contents constitute intellectual creations, the same to be protected as such in
accordance with Section 8 of this Decree.

(R) Other literary, scholarly, scientific and artistic works.

This provision is substantially the same as 172 of the INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES (R.A. No.
8293).[11] The format or mechanics of a television show is not included in the list of protected works in 2 of P.D. No.
49. For this reason, the protection afforded by the law cannot be extended to cover them.

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted by the
statute, and not simply a pre-existing right regulated by the statute. Being a statutory grant, the rights are only such as
the statute confers, and may be obtained and enjoyed only with respect to the subjects and by the persons, and on
terms and conditions specified in the statute.[12]

Since . . . copyright in published works is purely a statutory creation, a copyright may be obtained only for a work falling
within the statutory enumeration or description.[13]
Regardless of the historical viewpoint, it is authoritatively settled in the United States that there is no copyright
except that which is both created and secured by act of Congress . . . .[14]

P.D. No. 49, 2, in enumerating what are subject to copyright, refers to finished works and not to concepts. The
copyright does not extend to an idea, procedure, process, system, method of operation, concept, principle, or discovery,
regardless of the form in which it is described, explained, illustrated, or embodied in such work.[15] Thus, the new
INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES provides:

Sec. 175. Unprotected Subject Matter. - Notwithstanding the provisions of Sections 172 and 173, no protection shall
extend, under this law, to any idea, procedure, system, method or operation, concept, principle, discovery or mere data
as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other
miscellaneous facts having the character of mere items of press information; or any official text of a legislative,
administrative or legal nature, as well as any official translation thereof.

What then is the subject matter of petitioners copyright? This Court is of the opinion that petitioner BJPIs copyright
covers audio-visual recordings of each episode of Rhoda and Me, as falling within the class of works mentioned in P.D.
49, 2(M), to wit:

Cinematographic works and works produced by a process analogous to cinematography or any process for making
audio-visual recordings;

The copyright does not extend to the general concept or format of its dating game show. Accordingly, by the very nature
of the subject of petitioner BJPIs copyright, the investigating prosecutor should have the opportunity to compare the
videotapes of the two shows.
Mere description by words of the general format of the two dating game shows is insufficient; the presentation of
the master videotape in evidence was indispensable to the determination of the existence of probable cause. As aptly
observed by respondent Secretary of Justice:

A television show includes more than mere words can describe because it involves a whole spectrum of visuals and
effects, video and audio, such that no similarity or dissimilarity may be found by merely describing the general
copyright/format of both dating game shows.[16]

WHEREFORE, the petition is hereby DISMISSED.


SO ORDERED.
BAKER VS SELDEN
U.S. Supreme Court

Baker v. Selden, 101 U.S. 99 (1879)

Baker v. Selden

101 U.S. 99

APPEAL FROM THE CIRCUIT COURT OF THE UNITED

STATES FOR THE SOUTHERN DISTRICT OF OHIO

Syllabus

1. A claim to the exclusive property in a peculiar system of bookkeeping cannot, under the law of copyright, be
maintained by the author of a treatise in which that system is exhibited and explained.

2. The difference between a copyright and letters patent stated and illustrated.

The facts are stated in the opinion of the Court.

MR. JUSTICE BRADLEY delivered the opinion of the Court.

Charles Selden, the testator of the complainant in this case, in the year 1859 took the requisite steps for obtaining the
copyright

Page 101 U. S. 100

of a book, entitled "Selden's Condensed Ledger, or Bookkeeping Simplified," the object of which was to exhibit and
explain a peculiar system of bookkeeping. In 1860 and 1861, he took the copyright of several other books, containing
additions to and improvements upon the said system. The bill of complaint was filed against the defendant, Baker, for an
alleged infringement of these copyrights. The latter, in his answer, denied that Selden was the author or designer of the
books, and denied the infringement charged, and contends on the argument that the matter alleged to be infringed is
not a lawful subject of copyright.

The parties went into proofs, and the various books of the complainant, as well as those sold and used by the defendant,
were exhibited before the examiner, and witnesses were examined to both sides. A decree was rendered for the
complainant, and the defendant appealed.

The book or series of books of which the complainant claims the copyright consists of an introductory essay explaining
the system of bookkeeping referred to, to which are annexed certain forms or banks, consisting of ruled lines, and
headings, illustrating the system and showing how it is to be used and carried out in practice. This system effects the
same results as bookkeeping by double entry, but, by a peculiar arrangement of columns and headings, presents the
entire operation, of a day, a week, or a month on a single page or on two pages facing each other, in an account book.
The defendant uses a similar plan so far as results are concerned, but makes a different arrangement of the columns,
and uses different headings. If the complainant's testator had the exclusive right to the use of the system explained in
his book, it would be difficult to contend that the defendant does not infringe it, notwithstanding the difference in his
form of arrangement; but if it be assumed that the system is open to public use, it seems to be equally difficult to
contend that the books made and sold by the defendant are a violation of the copyright of the complainant's book
considered merely as a book explanatory of the system. Where the truths of a science or the methods of an art are the
common property of the whole world, any author has the right to express the one, or explain and use the other, in

Page 101 U. S. 101

his own way. As an author, Selden explained the system in a particular way. It may be conceded that Baker makes and
uses account books arranged on substantially the same system, but the proof fails to show that he has violated the
copyright of Selden's book, regarding the latter merely as an explanatory work, or that he has infringed Selden's right in
any way, unless the latter became entitled to an exclusive right in the system.

The evidence of the complainant is principally directed to the object of showing that Baker uses the same system as that
which is explained and illustrated in Selden's books. It becomes important, therefore, to determine whether, in
obtaining the copyright of his books, he secured the exclusive right to the use of the system or method of bookkeeping
which the said books are intended to illustrate and explain. It is contended that he has secured such exclusive right
because no one can use the system without using substantially the same ruled lines and headings which he was
appended to his books in illustration of it. In other words, it is contended that the ruled lines and headings, given to
illustrate the system, are a part of the book, and as such are secured by the copyright, and that no one can make or use
similar ruled lines and headings, or ruled lines and headings made and arranged on substantially the same system,
without violating the copyright. And this is really the question to be decided in this case. Stated in another form, the
question is whether the exclusive property in a system of bookkeeping can be claimed under the law or copyright by
means of a book in which that system is explained? The complainant's bill, and the case made under it, are based on the
hypothesis that it can be.

It cannot be pretended, and indeed it is not seriously urged, that the ruled lines of the complainant's account book can
be claimed under any special class of objects, other than books, named in the law of copyright existing in 1859. The law
then in force was that of 1831, and specified only books, maps, charts, musical compositions, prints, and engravings. An
account book, consisting of ruled lines and blank columns, cannot be called by any of these names unless by that of a
book.

There is no doubt that a work on the subject of bookkeeping,

Page 101 U. S. 102


though only explanatory of well known systems, may be the subject of a copyright, but then it is claimed only as a book.
Such a book may be explanatory either of old systems or of an entirely new system, and, considered as a book, as the
work of an author, conveying information on the subject of bookkeeping, and containing detailed explanations of the
art, it may be a very valuable acquisition to the practical knowledge of the community. But there is a clear distinction
between the book as such and the art which it is intended to illustrate. The mere statement of the proposition is so
evident that it requires hardly any argument to support it. The same distinction may be predicated of every other art as
well as that of bookkeeping. A treatise on the composition and use of medicines, be they old or new; on the
construction and use of ploughs, or watches, or churns; or on the mixture and application of colors for painting or
dyeing; or on the mode of drawing lines to produce the effect of perspective -- would be the subject of copyright; but no
one would contend that the copyright of the treatise would give the exclusive right to the art or manufacture described
therein. The copyright of the book, if not pirated from other works, would be valid without regard to the novelty, or
want of novelty, of its subject matter. The novelty of the art or thing described or explained has nothing to do with the
validity of the copyright. To give to the author of the book an exclusive property in the art described therein when no
examination of its novelty has ever been officially made would be a surprise and a fraud upon the public. That is the
province of letters patent, not of copyright. The claim to an invention or discovery of an art or manufacture must be
subjected to the examination of the Patent Office before an exclusive right therein can be obtained, and it can only be
secured by a patent from the government.

The difference between the two things, letters patent and copyright, may be illustrated by reference to the subjects just
enumerated. Take the case of medicines. Certain mixtures are found to be of great value in the healing art. If the
discoverer writes and publishes a book on the subject (as regular physicians generally do), he gains no exclusive right to
the manufacture and sale of the medicine; he gives that to the

Page 101 U. S. 103

public. If he desires to acquire such exclusive right, he must obtain a patent for the mixture as a new art, manufacture,
or composition of matter. He may copyright his book if he pleases, but that only secures to him the exclusive right of
printing and publishing his book. So of all other inventions or discoveries.

The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives no
exclusive right to the modes of drawing described, though they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to the public. The fact that the art described
in the book by illustrations of lines and figures which are reproduced in practice in the application of the art makes no
difference. Those illustrations are the mere language employed by the author to convey his ideas more clearly. Had he
used words of description instead of diagrams (which merely stand in the place of words), there could not be the
slightest doubt that others, applying the art to practical use, might lawfully draw the lines and diagrams which were in
the author's mind, and which he thus described by words in his book.

The copyright of a work on mathematical science cannot give to the author an exclusive right to the methods of
operation which he propounds, or to the diagrams which he employs to explain them, so as to prevent an engineer from
using them whenever occasion requires. The very object of publishing a book on science or the useful arts is to
communicate to the world the useful knowledge which it contains. But this object would be frustrated if the knowledge
could not be used without incurring the guilt of piracy of the book. And where the art it teaches cannot be used without
employing the methods and diagrams used to illustrate the book, or such as are similar to them, such methods and
diagrams are to be considered as necessary incidents to the art, and given therewith to the public -- not given for the
purpose of publication in other works explanatory of the art, but for the purpose of practical application.

Of course these observations are not intended to apply to ornamental designs or pictorial illustrations addressed to the
taste. Of these it may be said that their form is their essence,

Page 101 U. S. 104

and their object, the production of pleasure in their contemplation. This is their final end. They are as much the product
of genius and the result of composition as are the lines of the poet or the historian's period. On the other hand, the
teachings of science and the rules and methods of useful art have their final end in application and use, and this
application and use are what the public derive from the publication of a book which teaches them. But as embodied and
taught in a literary composition or book, their essence consists only in their statement. This alone is what is secured by
the copyright. The use by another of the same methods of statement, whether in words or illustrations, in a book
published for teaching the art would undoubtedly be an infringement of the copyright.

Recurring to the case before us, we observe that Charles Selden, by his books, explained and described a peculiar system
of bookkeeping, and illustrated his method by means of ruled lines and blank columns, with proper headings on a page
or on successive pages. Now whilst no one has a right to print or publish his book, or any material part thereof, as a book
intended to convey instruction in the art, any person may practice and use the art itself which he has described and
illustrated therein. The use of the art is a totally different thing from a publication of the book explaining it. The
copyright of a book on bookkeeping cannot secure the exclusive right to make, sell, and use account books prepared
upon the plan set forth in such book. Whether the art might or might not have been patented is a question which is not
before us. It was not patented, and is open and free to the use of the public. And of course, in using the art, the ruled
lines and headings of accounts must necessarily be used as incident to it.

The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas produced by the
peculiar nature of the art described in the books which have been made the subject of copyright. In describing the art,
the illustrations and diagrams employed happen to correspond more closely than usual with the actual work performed
by the operator who uses the art. Those illustrations and diagrams consist of ruled lines and headings of accounts, and

Page 101 U. S. 105

it is similar ruled lines and headings of accounts which, in the application of the art, the bookkeeper makes with his pen,
or the stationer with his press, whilst in most other cases the diagrams and illustrations can only be represented in
concrete forms of wood, metal, stone, or some other physical embodiment. But the principle is the same in all. The
description of the art in a book, though entitled to the benefit of copyright, lays no foundation for an exclusive claim to
the art itself. The object of the one is explanation; the object of the other is use. The former may be secured by
copyright. The latter can only be secured, if it can be secured at all, by letters patent.

The remarks of Mr. Justice Thompson in the circuit court in Clayton v. Stone & Hall, 2 Paine 392, in which copyright was
claimed in a daily price-current, are apposite and instructive. He says:

"In determining the true construction to be given to the act of Congress, it is proper to look at the Constitution of the
United States to aid us in ascertaining the nature of the property intended to be protected. 'Congress shall have power
to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive
right to their writings and discoveries.' The act in question was passed in execution of the power here given, and the
object, therefore, was the promotion of science; and it would certainly be a pretty extraordinary view of the sciences to
consider a daily or weekly publication of the state of the market as falling within any class of them. They are of a more
fixed, permanent, and durable character. The term 'science' cannot with any propriety be applied to a work of so
fluctuating and fugitive a form as that of a newspaper or price-current, the subject matter of which is daily changing, and
is of mere temporary use. Although great praise may be due to the plaintiffs for their industry and enterprise in
publishing this paper, yet the law does not contemplate their being rewarded in this way; it must seek patronage and
protection from its utility to the public, and not a work of science. The title of the act of Congress is, 'for the
encouragement of learning,' and was not intended for the encouragement of mere industry, unconnected with learning
and the sciences. . . . We are accordingly of opinion that the paper in question is not

Page 101 U. S. 106

a book the copyright to which can be secured under the act of Congress."

The case of Cobbett v. Woodward, Law Rep. 14 Eq. 407, was a claim to copyright in a catalogue of furniture which the
publisher had on sale in his establishment, illustrated with many drawings of furniture and decorations. The defendants,
being dealers in the same business, published a similar book, and copied many of the plaintiff's drawings, though it was
shown that they had for sale the articles represented thereby.

The court held that these drawings were not subjects of copyright. Lord Romilly, M.R., said:

"This is a mere advertisement for the sale of particular articles which any one might imitate, and any one might
advertise for sale. If a man not being a vendor of any of the articles in question were to publish a work for the purpose
of informing the public of what was the most convenient species of articles for household furniture, or the most graceful
species of decorations for articles of home furniture, what they ought to cost, and where they might be bought, and
were to illustrate his work with designs of each article he described -- such a work as this could not be pirated with
impunity, and the attempt to do so would be stopped by the injunction of the Court of Chancery; yet if it were done with
no such object, but solely for the purpose of advertising particular articles for sale, and promoting the private trade of
the publisher by the sale of articles which any other person might sell as well as the first advertiser, and if in fact it
contained little more than an illustrated inventory of the contents of a warehouse, I know of no law which, while it
would not prevent the second advertiser from selling the same articles, would prevent him from using the same
advertisement, provided he did not in such advertisement by any device suggest that he was selling the works and
designs of the first advertiser."

Another case, that of Page v. Wisden, 20 L.T.N.S. 435, which came before Vice-Chancellor Malins in 1869, has some
resemblance to the present. There, a copyright was claimed in a cricket scoring sheet, and the Vice-Chancellor held that
it was not a fit subject for copyright, partly because it was not new, but also because "to say that a particular

Page 101 U. S. 107

mode of ruling a book constituted an object for a copyright is absurd."

These cases, if not precisely in point, come near to the matter in hand, and, in our view, corroborate the general
proposition which we have laid down.

In Drury v. Ewing, 1 Bond, 540, which is much relied on by the complainant, a copyright was claimed in a chart of
patterns for cutting dresses and basques for ladies, and coats, jackets, &c., for boys. It is obvious that such designs could
only be printed and published for information, and not for use in themselves. Their practical use could only be
exemplified in cloth on the tailor's board and under his shears -- in other words, by the application of a mechanical
operation to the cutting of cloth in certain patterns and forms. Surely the exclusive right to this practical use was not
reserved to the publisher by his copyright of the chart. Without undertaking to say whether we should or should not
concur in the decision in that case, we think it cannot control the present.

The conclusion to which we have come is that blank account books are not the subject of copyright, and that the mere
copyright of Selden's book did not confer upon him the exclusive right to make and use account books, ruled and
arranged as designated by him and described and illustrated in said book.

The decree of the circuit court must be reversed and the cause remanded with instructions to dismiss the complainant's
bill, and it is

So ordered.
PEARL AND DEAN INC. VS SHOEMART
DECISION
CORONA, J.:

In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl & Dean (Phil.)
Inc. (P & D) assails the May 22, 2001 decision[1] of the Court of Appeals reversing the October 31, 1996 decision[2] of the
Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516 which declared private respondents Shoemart Inc.
(SMI) and North Edsa Marketing Inc. (NEMI) liable for infringement of trademark and copyright, and unfair competition.

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals[3] contained a summary of this dispute:

Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising display units
simply referred to as light boxes.These units utilize specially printed posters sandwiched between plastic sheets and
illuminated with back lights. Pearl and Dean was able to secure a Certificate of Copyright Registration dated January 20,
1981 over these illuminated display units. The advertising light boxes were marketed under the trademark Poster
Ads. The application for registration of the trademark was filed with the Bureau of Patents, Trademarks and Technology
Transfer on June 20, 1983, but was approved only on September 12, 1988, per Registration No. 41165. From 1981 to
about 1988, Pearl and Dean employed the services of Metro Industrial Services to manufacture its advertising displays.

Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and
installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under construction at that time, SMI
offered as an alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. On September 11, 1985, Pearl and
Deans General Manager, Rodolfo Vergara, submitted for signature the contracts covering SM Cubao and SM Makati to
SMIs Advertising Promotions and Publicity Division Manager, Ramonlito Abano. Only the contract for SM Makati,
however, was returned signed. On October 4, 1985, Vergara wrote Abano inquiring about the other contract and
reminding him that their agreement for installation of light boxes was not only for its SM Makati branch, but also for SM
Cubao. SMI did not bother to reply.

Instead, in a letter dated January 14, 1986, SMIs house counsel informed Pearl and Dean that it was rescinding the
contract for SM Makati due to non-performance of the terms thereof. In his reply dated February 17, 1986, Vergara
protested the unilateral action of SMI, saying it was without basis. In the same letter, he pushed for the signing of the
contract for SM Cubao.

Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to fabricate its display
units, offered to construct light boxes for Shoemarts chain of stores. SMI approved the proposal and ten (10) light boxes
were subsequently fabricated by Metro Industrial for SMI. After its contract with Metro Industrial was terminated, SMI
engaged the services of EYD Rainbow Advertising Corporation to make the light boxes. Some 300 units were fabricated
in 1991. These were delivered on a staggered basis and installed at SM Megamall and SM City.

Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed at SM City and in
the fastfood section of SM Cubao.Upon investigation, Pearl and Dean found out that aside from the two (2) reported SM
branches, light boxes similar to those it manufactures were also installed in two (2) other SM stores. It further
discovered that defendant-appellant North Edsa Marketing Inc. (NEMI), through its marketing arm, Prime Spots
Marketing Services, was set up primarily to sell advertising space in lighted display units located in SMIs different
branches. Pearl and Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and NEMI enjoining
them to cease using the subject light boxes and to remove the same from SMIs establishments. It also demanded the
discontinued use of the trademark Poster Ads, and the payment to Pearl and Dean of compensatory damages in the
amount of Twenty Million Pesos (P20,000,000.00).

Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224) light boxes and NEMI
took down its advertisements for Poster Ads from the lighted display units in SMIs stores. Claiming that both SMI and
NEMI failed to meet all its demands, Pearl and Dean filed this instant case for infringement of trademark and copyright,
unfair competition and damages.

In denying the charges hurled against it, SMI maintained that it independently developed its poster panels using
commonly known techniques and available technology, without notice of or reference to Pearl and Deans copyright. SMI
noted that the registration of the mark Poster Ads was only for stationeries such as letterheads, envelopes, and the
like. Besides, according to SMI, the word Poster Ads is a generic term which cannot be appropriated as a trademark, and,
as such, registration of such mark is invalid. It also stressed that Pearl and Dean is not entitled to the reliefs prayed for in
its complaint since its advertising display units contained no copyright notice, in violation of Section 27 of P.D. 49. SMI
alleged that Pearl and Dean had no cause of action against it and that the suit was purely intended to malign SMIs good
name. On this basis, SMI, aside from praying for the dismissal of the case, also counterclaimed for moral, actual and
exemplary damages and for the cancellation of Pearl and Deans Certification of Copyright Registration No. PD-R-2558
dated January 20, 1981 and Certificate of Trademark Registration No. 4165 dated September 12, 1988.

NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor having engaged in the
business of advertising. It repleaded SMIs averments, admissions and denials and prayed for similar reliefs and
counterclaims as SMI.

The RTC of Makati City decided in favor of P & D:

Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of copyright under Section
2 of PD 49, as amended, and infringement of trademark under Section 22 of RA No. 166, as amended, and are hereby
penalized under Section 28 of PD 49, as amended, and Sections 23 and 24 of RA 166, as amended. Accordingly,
defendants are hereby directed:

(1) to pay plaintiff the following damages:

(a) actual damages - P16,600,000.00,


representing profits
derived by defendants
as a result of infringe-
ment of plaintiffs copyright
from 1991 to 1992

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00

(d) attorneys fees - P1,000,000.00


plus

(e) costs of suit;

(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which were fabricated
by Metro Industrial Services and EYD Rainbow Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the trademark Poster Ads, for
destruction; and

(4) to permanently refrain from infringing the copyright on plaintiffs light boxes and its trademark Poster Ads.

Defendants counterclaims are hereby ordered dismissed for lack of merit.

SO ORDERED.[4]

On appeal, however, the Court of Appeals reversed the trial court:

Since the light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial illustrations,
advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable class O work, we have to agree
with SMI when it posited that what was copyrighted were the technical drawings only, and not the light boxes
themselves, thus:

42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like plaintiff-appellants
will not extend to the actual object.It has so been held under jurisprudence, of which the leading case is Baker vs.
Selden (101 U.S. 841 (1879). In that case, Selden had obtained a copyright protection for a book entitled Seldens
Condensed Ledger or Bookkeeping Simplified which purported to explain a new system of bookkeeping. Included as part
of the book were blank forms and illustrations consisting of ruled lines and headings, specially designed for use in
connection with the system explained in the work. These forms showed the entire operation of a day or a week or a
month on a single page, or on two pages following each other. The defendant Baker then produced forms which were
similar to the forms illustrated in Seldens copyrighted books. The Court held that exclusivity to the actual forms is not
extended by a copyright. The reason was that to grant a monopoly in the underlying art when no examination of its
novelty has ever been made would be a surprise and a fraud upon the public; that is the province of letters patent, not
of copyright. And that is precisely the point. No doubt aware that its alleged original design would never pass the
rigorous examination of a patent application, plaintiff-appellant fought to foist a fraudulent monopoly on the public by
conveniently resorting to a copyright registration which merely employs a recordal system without the benefit of an in-
depth examination of novelty.

The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge Authority [43 F. Supp. 298 (S.D.N.Y.
1942)]. In this case, Muller had obtained a copyright over an unpublished drawing entitled Bridge Approach the drawing
showed a novel bridge approach to unsnarl traffic congestion. The defendant constructed a bridge approach which was
alleged to be an infringement of the new design illustrated in plaintiffs drawings. In this case it was held that protection
of the drawing does not extend to the unauthorized duplication of the object drawn because copyright extends only to
the description or expression of the object and not to the object itself. It does not prevent one from using the drawings
to construct the object portrayed in the drawing.

In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v. Maddox, 379 F. 2d 84, it
was held that there is no copyright infringement when one who, without being authorized, uses a copyrighted
architectural plan to construct a structure. This is because the copyright does not extend to the structures themselves.

In fine, we cannot find SMI liable for infringing Pearl and Deans copyright over the technical drawings of the latters
advertising display units.

xxx xxx xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate Court that the protective
mantle of the Trademark Law extends only to the goods used by the first user as specified in the certificate of
registration, following the clear mandate conveyed by Section 20 of Republic Act 166, as amended, otherwise known as
the Trademark Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a mark or trade-name
shall be prima facie evidence of the validity of the registration, the registrants ownership of the mark or trade-name,
and of the registrants exclusive right to use the same in connection with the goods, business or services specified in the
certificate, subject to any conditions and limitations stated therein. (underscoring supplied)

The records show that on June 20, 1983, Pearl and Dean applied for the registration of the trademark Poster Ads with
the Bureau of Patents, Trademarks, and Technology Transfer. Said trademark was recorded in the Principal Register on
September 12, 1988 under Registration No. 41165 covering the following products: stationeries such as letterheads,
envelopes and calling cards and newsletters.

With this as factual backdrop, we see no legal basis to the finding of liability on the part of the defendants-appellants for
their use of the words Poster Ads, in the advertising display units in suit. Jurisprudence has interpreted Section 20 of the
Trademark Law as an implicit permission to a manufacturer to venture into the production of goods and allow that
producer to appropriate the brand name of the senior registrant on goods other than those stated in the certificate of
registration. The Supreme Court further emphasized the restrictive meaning of Section 20 when it stated, through
Justice Conrado V. Sanchez, that:

Really, if the certificate of registration were to be deemed as including goods not specified therein, then a situation may
arise whereby an applicant may be tempted to register a trademark on any and all goods which his mind may conceive
even if he had never intended to use the trademark for the said goods.We believe that such omnibus registration is not
contemplated by our Trademark Law.

While we do not discount the striking similarity between Pearl and Deans registered trademark and defendants-
appellants Poster Ads design, as well as the parallel use by which said words were used in the parties respective
advertising copies, we cannot find defendants-appellants liable for infringement of trademark. Poster Ads was registered
by Pearl and Dean for specific use in its stationeries, in contrast to defendants-appellants who used the same words in
their advertising display units. Why Pearl and Dean limited the use of its trademark to stationeries is simply beyond
us. But, having already done so, it must stand by the consequence of the registration which it had caused.

xxx xxx xxx

We are constrained to adopt the view of defendants-appellants that the words Poster Ads are a simple contraction of
the generic term poster advertising. In the absence of any convincing proof that Poster Ads has acquired a secondary
meaning in this jurisdiction, we find that Pearl and Deans exclusive right to the use of Poster Ads is limited to what is
written in its certificate of registration, namely, stationeries.

Defendants-appellants cannot thus be held liable for infringement of the trademark Poster Ads.

There being no finding of either copyright or trademark infringement on the part of SMI and NEMI, the monetary award
granted by the lower court to Pearl and Dean has no leg to stand on.

xxx xxx xxx

WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and another is rendered
DISMISSING the complaint and counterclaims in the above-entitled case for lack of merit.[5]

Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the following errors for the
Courts consideration:

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT INFRINGEMENT WAS
COMMITTED BY RESPONDENTS SM AND NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO INFRINGEMENT OF PEARL & DEANS
TRADEMARK POSTER ADS WAS COMMITTED BY RESPONDENTS SM AND NEMI;

C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF THE TRIAL COURT, DESPITE THE
LATTERS FINDING, NOT DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS GUILTY OF
BAD FAITH IN ITS NEGOTIATION OF ADVERTISING CONTRACTS WITH PEARL & DEAN.

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING RESPONDENTS SM AND NEMI LIABLE TO
PEARL & DEAN FOR ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEYS FEES AND COSTS OF SUIT.[6]

ISSUES

In resolving this very interesting case, we are challenged once again to put into proper perspective four main
concerns of intellectual property law patents, copyrights, trademarks and unfair competition arising from infringement
of any of the first three. We shall focus then on the following issues:

(1) if the engineering or technical drawings of an advertising display unit (light box) are granted copyright
protection (copyright certificate of registration) by the National Library, is the light box depicted in such
engineering drawings ipso facto also protected by such copyright?

(2) or should the light box be registered separately and protected by a patent issued by the Bureau of Patents
Trademarks and Technology Transfer (now Intellectual Property Office) in addition to the copyright of the
engineering drawings?

(3) can the owner of a registered trademark legally prevent others from using such trademark if it is a mere
abbreviation of a term descriptive of his goods, services or business?

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioner P & Ds complaint was that SMI infringed on its copyright over the light boxes when SMI had the units
manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously, petitioners position was premised
on its belief that its copyright over the engineering drawings extended ipso facto to the light boxes depicted or
illustrated in said drawings. In ruling that there was no copyright infringement, the Court of Appeals held that the
copyright was limited to the drawings alone and not to the light box itself. We agree with the appellate court.
First, petitioners application for a copyright certificate as well as Copyright Certificate No. PD-R2588 issued by the
National Library on January 20, 1981 clearly stated that it was for a class O work under Section 2 (O) of PD 49 (The
Intellectual Property Decree) which was the statute then prevailing. Said Section 2 expressly enumerated the works
subject to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of the following
works:

xxxxxxxxx

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;

xxxxxxxxx
Although petitioners copyright certificate was entitled Advertising Display Units (which depicted the box-type
electrical devices), its claim of copyright infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the rights are
limited to what the statute confers. It may be obtained and enjoyed only with respect to the subjects and by the
persons, and on terms and conditions specified in the statute.[7] Accordingly, it can cover only the works falling within the
statutory enumeration or description.[8]
P & D secured its copyright under the classification class O work. This being so, petitioners copyright protection
extended only to the technical drawings and not to the light box itself because the latter was not at all in the category of
prints, pictorial illustrations, advertising copies, labels, tags and box wraps. Stated otherwise, even as we find that P & D
indeed owned a valid copyright, the same could have referred only to the technical drawings within the category of
pictorial illustrations. It could not have possibly stretched out to include the underlying light box. The strict
application[9] of the laws enumeration in Section 2 prevents us from giving petitioner even a little leeway, that is, even if
its copyright certificate was entitled Advertising Display Units. What the law does not include, it excludes, and for the
good reason: the light box was not a literary or artistic piece which could be copyrighted under the copyright law. And
no less clearly, neither could the lack of statutory authority to make the light box copyrightable be remedied by the
simplistic act of entitling the copyright certificate issued by the National Library as Advertising Display Units.
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public without license from P & D, then
no doubt they would have been guilty of copyright infringement. But this was not the case. SMIs and NEMIs acts
complained of by P & D were to have units similar or identical to the light box illustrated in the technical drawings
manufactured by Metro and EYD Rainbow Advertising, for leasing out to different advertisers. Was this an infringement
of petitioners copyright over the technical drawings? We do not think so.
During the trial, the president of P & D himself admitted that the light box was neither a literary not an artistic work
but an engineering or marketing invention.[10] Obviously, there appeared to be some confusion regarding what ought or
ought not to be the proper subjects of copyrights, patents and trademarks. In the leading case of Kho vs. Court of
Appeals,[11] we ruled that these three legal rights are completely distinct and separate from one another, and the
protection afforded by one cannot be used interchangeably to cover items or works that exclusively pertain to the
others:

Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one
another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an
enterprise and shall include a stamped or marked container of goods. In relation thereto, a trade name means the name
or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and
artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of
their creation.Patentable inventions, on the other hand, refer to any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

This brings us to the next point: if, despite its manufacture and commercial use of the light boxes without license
from petitioner, private respondents cannot be held legally liable for infringement of P & Ds copyright over its technical
drawings of the said light boxes, should they be liable instead for infringement of patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light boxes. It therefore acquired no patent
rights which could have protected its invention, if in fact it really was. And because it had no patent, petitioner could not
legally prevent anyone from manufacturing or commercially using the contraption. In Creser Precision Systems, Inc. vs.
Court of Appeals,[12] we held that there can be no infringement of a patent until a patent has been issued, since
whatever right one has to the invention covered by the patent arises alone from the grant of patent. x x x (A)n inventor
has no common law right to a monopoly of his invention. He has the right to make use of and vend his invention, but if
he voluntarily discloses it, such as by offering it for sale, the world is free to copy and use it with impunity. A patent,
however, gives the inventor the right to exclude all others. As a patentee, he has the exclusive right of making, selling or
using the invention.[13] On the assumption that petitioners advertising units were patentable inventions, petitioner
revealed them fully to the public by submitting the engineering drawings thereof to the National Library.
To be able to effectively and legally preclude others from copying and profiting from the invention, a patent is a
primordial requirement.No patent, no protection. The ultimate goal of a patent system is to bring new designs and
technologies into the public domain through disclosure.[14] Ideas, once disclosed to the public without the protection of
a valid patent, are subject to appropriation without significant restraint.[15]
On one side of the coin is the public which will benefit from new ideas; on the other are the inventors who must be
protected. As held inBauer & Cie vs. ODonnel,[16] The act secured to the inventor the exclusive right to make use, and
vend the thing patented, and consequently to prevent others from exercising like privileges without the consent of the
patentee. It was passed for the purpose of encouraging useful invention and promoting new and useful inventions by
the protection and stimulation given to inventive genius, and was intended to secure to the public, after the lapse of the
exclusive privileges granted the benefit of such inventions and improvements.
The law attempts to strike an ideal balance between the two interests:

(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure of new useful
and non-obvious advances in technology and design, in return for the exclusive right to practice the invention for a
number of years. The inventor may keep his invention secret and reap its fruits indefinitely. In consideration of its
disclosure and the consequent benefit to the community, the patent is granted. An exclusive enjoyment is guaranteed
him for 17 years, but upon the expiration of that period, the knowledge of the invention inures to the people, who are
thus enabled to practice it and profit by its use.[17]

The patent law has a three-fold purpose: first, patent law seeks to foster and reward invention; second, it promotes
disclosures of inventions to stimulate further innovation and to permit the public to practice the invention once the
patent expires; third, the stringent requirements for patent protection seek to ensure that ideas in the public domain
remain there for the free use of the public.[18]
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth investigation
is required because in rewarding a useful invention, the rights and welfare of the community must be fairly dealt with
and effectively guarded. To that end, the prerequisites to obtaining a patent are strictly observed and when a patent is
issued, the limitations on its exercise are equally strictly enforced. To begin with, a genuine invention or discovery must
be demonstrated lest in the constant demand for new appliances, the heavy hand of tribute be laid on each slight
technological advance in art.[19]
There is no such scrutiny in the case of copyrights nor any notice published before its grant to the effect that a
person is claiming the creation of a work. The law confers the copyright from the moment of creation[20] and the
copyright certificate is issued upon registration with the National Library of a sworn ex-parte claim of creation.
Therefore, not having gone through the arduous examination for patents, the petitioner cannot exclude others
from the manufacture, sale or commercial use of the light boxes on the sole basis of its copyright certificate over the
technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office (IPO) to
scrutinize the light boxs eligibility as a patentable invention. The irony here is that, had petitioner secured a patent
instead, its exclusivity would have been for 17 years only. But through the simplified procedure of copyright-registration
with the National Library without undergoing the rigor of defending the patentability of its invention before the IPO and
the public the petitioner would be protected for 50 years. This situation could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden[21], the United States Supreme Court held that only the expression of an idea
is protected by copyright, not the idea itself. In that case, the plaintiff held the copyright of a book which expounded on a
new accounting system he had developed. The publication illustrated blank forms of ledgers utilized in such a
system. The defendant reproduced forms similar to those illustrated in the plaintiffs copyrighted book. The US Supreme
Court ruled that:
There is no doubt that a work on the subject of book-keeping, though only explanatory of well known systems, may be
the subject of a copyright; but, then, it is claimed only as a book. x x x. But there is a clear distinction between the books,
as such, and the art, which it is, intended to illustrate. The mere statement of the proposition is so evident that it
requires hardly any argument to support it. The same distinction may be predicated of every other art as well as that of
bookkeeping. A treatise on the composition and use of medicines, be they old or new; on the construction and use of
ploughs or watches or churns; or on the mixture and application of colors for painting or dyeing; or on the mode of
drawing lines to produce the effect of perspective, would be the subject of copyright; but no one would contend that
the copyright of the treatise would give the exclusive right to the art or manufacture described therein. The copyright of
the book, if not pirated from other works, would be valid without regard to the novelty or want of novelty of its subject
matter.The novelty of the art or thing described or explained has nothing to do with the validity of the copyright. To give
to the author of the book an exclusive property in the art described therein, when no examination of its novelty has
ever been officially made, would be a surprise and a fraud upon the public. That is the province of letters patent, not
of copyright. The claim to an invention of discovery of an art or manufacture must be subjected to the examination of
the Patent Office before an exclusive right therein can be obtained; and a patent from the government can only
secure it.

The difference between the two things, letters patent and copyright, may be illustrated by reference to the subjects just
enumerated. Take the case of medicines. Certain mixtures are found to be of great value in the healing art. If the
discoverer writes and publishes a book on the subject (as regular physicians generally do), he gains no exclusive right
to the manufacture and sale of the medicine; he gives that to the public. If he desires to acquire such exclusive right,
he must obtain a patent for the mixture as a new art, manufacture or composition of matter. He may copyright his
book, if he pleases; but that only secures to him the exclusive right of printing and publishing his book. So of all other
inventions or discoveries.

The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives no
exclusive right to the modes of drawing described, though they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to the public.

xxx

Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book intended to convey
instruction in the art, any person may practice and use the art itself which he has described and illustrated therein. The
use of the art is a totally different thing from a publication of the book explaining it. The copyright of a book on
bookkeeping cannot secure the exclusive right to make, sell and use account books prepared upon the plan set forth in
such book. Whether the art might or might not have been patented, is a question, which is not before us. It was not
patented, and is open and free to the use of the public. And, of course, in using the art, the ruled lines and headings of
accounts must necessarily be used as incident to it.

The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas produced by the
peculiar nature of the art described in the books, which have been made the subject of copyright. In describing the art,
the illustrations and diagrams employed happened to correspond more closely than usual with the actual work
performed by the operator who uses the art. x x x The description of the art in a book, though entitled to the benefit of
copyright, lays no foundation for an exclusive claim to the art itself. The object of the one is explanation; the object of
the other is use. The former may be secured by copyright. The latter can only be secured, if it can be secured at all, by
letters patent.(underscoring supplied)

ON THE ISSUE OF TRADEMARK INFRINGEMENT

This issue concerns the use by respondents of the mark Poster Ads which petitioners president said was a
contraction of poster advertising. P & D was able to secure a trademark certificate for it, but one where the goods
specified were stationeries such as letterheads, envelopes, calling cards and newsletters.[22] Petitioner admitted it did
not commercially engage in or market these goods. On the contrary, it dealt in electrically operated backlit advertising
units and the sale of advertising spaces thereon, which, however, were not at all specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate Appellate
Court,[23] where we, invoking Section 20 of the old Trademark Law, ruled that the certificate of registration issued by the
Director of Patents can confer (upon petitioner) the exclusive right to use its own symbol only to those goods specified in
the certificate, subject to any conditions and limitations specified in the certificate x x x. One who has adopted and used
a trademark on his goods does not prevent the adoption and use of the same trademark by others for products which are
of a different description.[24] Faberge, Inc. was correct and was in fact recently reiterated inCanon Kabushiki Kaisha vs.
Court of Appeals.[25]
Assuming arguendo that Poster Ads could validly qualify as a trademark, the failure of P & D to secure a trademark
registration for specific use on the light boxes meant that there could not have been any trademark infringement since
registration was an essential element thereof.

ON THE ISSUE OF UNFAIR COMPETITION

If at all, the cause of action should have been for unfair competition, a situation which was possible even if P & D
had no registration.[26]However, while the petitioners complaint in the RTC also cited unfair competition, the trial court
did not find private respondents liable therefor. Petitioner did not appeal this particular point; hence, it cannot now
revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair competition.
By the nature of things, there can be no unfair competition under the law on copyrights although it is applicable to
disputes over the use of trademarks. Even a name or phrase incapable of appropriation as a trademark or tradename
may, by long and exclusive use by a business (such that the name or phrase becomes associated with the business or
product in the mind of the purchasing public), be entitled to protection against unfair competition.[27] In this case, there
was no evidence that P & Ds use of Poster Ads was distinctive or well-known. As noted by the Court of Appeals,
petitioners expert witnesses himself had testified that Poster Ads was too generic a name. So it was difficult to identify it
with any company, honestly speaking.[28] This crucial admission by its own expert witness that Poster Ads could not be
associated with P & D showed that, in the mind of the public, the goods and services carrying the trademark Poster Ads
could not be distinguished from the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary meaning. Poster Ads was generic and
incapable of being used as a trademark because it was used in the field of poster advertising, the very business engaged
in by petitioner. Secondary meaning means that a word or phrase originally incapable of exclusive appropriation with
reference to an article in the market (because it is geographically or otherwise descriptive) might nevertheless have
been used for so long and so exclusively by one producer with reference to his article that, in the trade and to that
branch of the purchasing public, the word or phrase has come to mean that the article was his property.[29] The
admission by petitioners own expert witness that he himself could not associate Poster Ads with petitioner P & D
because it was too generic definitely precluded the application of this exception.
Having discussed the most important and critical issues, we see no need to belabor the rest.
All told, the Court finds no reversible error committed by the Court of Appeals when it reversed the Regional Trial
Court of Makati City.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated May 22, 2001 is
AFFIRMED in toto.
SO ORDERED.
ABS-CBN VS FELIPE GOZON
ABS-CBN CORPORATION, Petitioner, v. FELIPE GOZON, GILBERTO R. DUAVIT, JR., MARISSA L. FLORES, JESSICA A. SOHO,
GRACE DELA PEÑA-REYES, JOHN OLIVER T. MANALASTAS, JOHN DOES AND JANE DOES, Respondents.

DECISION

LEONEN, J.:

The main issue in this case is whether there is probable cause to charge respondents with infringement under Republic
Act No. 8293, otherwise known as the Intellectual Property Code. The resolution of this issue requires clarification of the
concept of "copyrightable material" in relation to material that is rebroadcast live as a news story. We are also asked to
rule on whether criminal prosecution for infringement of copyrightable material, such as live rebroadcast, can be
negated by good faith.

ABS-CBN Corporation (ABS-CBN) filed the Petition for Review on Certiorari1 to assail the November 9, 2010 Decision2 and
the March 3, 2011 Resolution3 of the Court of Appeals. The Court of Appeals reinstated the Department of Justice
Resolution dated August 1, 2005 that ordered the withdrawal of the Information finding probable cause for
respondents' violation of Sections 1774 and 2115 of the Intellectual Property Code.6 Respondents are officers and
employees of GMA Network, Inc. (GMA-7). They are: Felipe Gozon (Gozon), GMA-7 President; Gilberto R. Duavit, Jr.
(Duavit, Jr.), Executive Vice-President; Marissa L. Flores (Flores), Vice-President for News and Public Affairs; Jessica A.
Soho (Soho), Director for News; Grace Déla Peña-Reyes (Dela Peña-Reyes), Head of News and Public Affairs; John Oliver
Manalastas '(Manalastas), Program Manager; and others.

The controversy arose from GMA-7's news coverage on the homecoming of Filipino overseas worker and hostage victim
Angelo dela Cruz on July 22, 2004. As summarized by the Court of Appeals:chanroblesvirtuallawlibrary
Overseas Filipino worker Angelo dela Cruz was kidnapped by Iraqi militants and as a condition for his release, a demand
was made for the withdrawal of Filipino troops in Iraq. After negotiations, he was released by his captors and was
scheduled to return to the country in the afternoon of 22 July 2004. Occasioned by said homecoming and the public
interest it generated, both . . . GMA Network, Inc. . . . and [petitioner] made their respective broadcasts and coverage of
the live event.7
ABS-CBN "conducted live audio-video coverage of and broadcasted the arrival of Angelo dela Cruz at the Ninoy Aquino
International Airport (NAIA) and the subsequent press conference."8 ABS-CBN allowed Reuters Television Service
(Reuters) to air the footages it had taken earlier under a special embargo agreement.9

ABS-CBN alleged that under the special embargo agreement, any of the footages it took would be for the "use of
Renter's international subscribers only, and shall be considered and treated by Reuters under 'embargo' against use by
other subscribers in the Philippines. . . . [N]o other Philippine subscriber of Reuters would be allowed to use ABS-CBN
footage without the latter's consent."10

GMA-7, to which Gozon, Duavit, Jr., Flores, Soho, Dela Peña-Reyes, and Manalastas are connected, "assigned and
stationed news reporters and technical men at the NAIA for its live broadcast and non-live news coverage of the arrival
of dela Cruz."11 GMA-7 subscribes to both Reuters and Cable News Network (CNN). It received a live video feed of the
coverage of Angelo dela Cruz's arrival from Reuters.12

GMA-7 immediately carried the live newsfeed in its program "Flash Report," together with its live broadcast.13 Allegedly,
GMA-7 did not receive any notice or was not aware that Reuters was airing footages of ABS-CBN.14 GMA-7's news
control room staff saw neither the "No Access Philippines" notice nor a notice that the video feed was under embargo in
favor of ABS-CBN.15

On August 13, 2004, ABS-CBN filed the Complaint for copyright infringement under Sections 17716and 21117 of the
Intellectual Property Code.18
On December 3, 2004, Assistant City Prosecutor Dindo Venturanza issued the Resolution19 finding probable cause to
indict Dela Peña-Reyes and Manalastas.20 Consequently, the Information21 for violation of the Intellectual Property Code
was filed on December 17, 2004. It reads:chanroblesvirtuallawlibrary
That on or about the 22nd of July 2004, in Quezon City, Philippines, the above-named accused, conspiring together,
confederating with and mutually helping each other, being the Head of News Operations and the Program Manager,
respectively, for the News and Public Affairs Department of GMA Network, Inc., did then and there, willfully, unlawfully
and feloniously use and broadcast the footage of the arrival of Angelo [d]ela Cruz at the Ninoy Aquino International
Airport of which ABS-CBN holds the exclusive ownership and copyright by then and there using, airing, and broadcasting
the said footage in its news program "FLASH REPORT" without first obtaining the consent or authority of said copyright
owner, to their damage and prejudice.

Contrary to law.22
On January 4, 2005, respondents filed the Petition for Review before the Department of Justice.23 In the Resolution
(Gonzalez Resolution) dated August 1, 2005, Department of Justice Secretary Raul M. Gonzalez (Secretary Gonzalez)
ruled in favor of respondents and held that good faith may be raised as a defense in the case.24 The dispositive portion
of the Resolution reads:chanroblesvirtuallawlibrary
WHEREFORE, THE PETITION FOR REVIEW FILED BY GMA-7 in I.S. No. 04-10458 is considered meritorious and is
hereby GRANTED. This case is hereby Dismissed, the resolution of the City Prosecutor of Quezon City is hereby reversed
and the same is ordered to withdraw the information if any and report action taken to this office within ten (10)
days.25 (Emphasis in the original)
Both parties moved for reconsideration of the Gonzalez Resolution.26

Meanwhile, on January 19, 2005, the trial court granted the Motion to Suspend Proceedings filed earlier by Dela Peña-
Reyes and Manalastas.27 The trial court Order reads:chanroblesvirtuallawlibrary
Perusing the motion, the court finds that a petition for review was filed with the Department of Justice on January 5,
2005 as confirmed by the public prosecutor. Under Section 11 (c), Rule 116 of the Rules of Criminal Procedure, once a
petition for review is filed with the Department of Justice, a suspension of the criminal proceedings may be allowed by
the court.

Accordingly, to allow the Department of Justice the opportunity to act on said petition for review, let the proceedings on
this case be suspended for a period of sixty (60) days counted from January 5, 2005, the date the petition was filed with
the Department of Justice. The arraignment of the accused on February 1, 2005 is accordingly cancelled. Let the
arraignment be rescheduled to March 8, 2005 at 8:30 a.m. The accused through counsel are notified in open court.

SO ORDERED.28
On June 29, 2010, Department of Justice Acting Secretary Alberto C. Agra (Secretary Agra) issued the Resolution (Agra
Resolution) that reversed the Gonzalez Resolution and found probable cause to charge Dela Peña-Reyes and Manalastas
for violation of the Intellectual Property Code.29 Secretary Agra also found probable cause to indict Gozon, Duavit, Jr.,
Flores, and Soho for the same violation.30 He ruled that:chanroblesvirtuallawlibrary
[w]hile good faith may be a defense in copyright infringement, the same is a disputable presumption that must be
proven in a full-blown trial. Disputable presumptions may be contradicted and overcome by other evidence. Thus, a full-
blown trial is the proper venue where facts, issues and laws are evaluated and considered. The very purpose of trial is to
allow a party to present evidence to overcome the disputable presumptions involved.31
The dispositive portion of the Agra Resolution provides:chanroblesvirtuallawlibrary
WHEREFORE, premises considered:

(a) The Motion for Reconsideration filed by appellees ABS-CBN Broadcasting Corporation (ABS-CBN) of our Resolution
promulgated on August 1, 2005 (Resolution No. 364, Series of 2005) and the Petition for Review filed by complainant-
appellant ABS-CBN in I.S. No. 04-10458 on April 10, 2006, are GRANTED and the City Prosecutor of Quezon City is hereby
ordered to file the necessary Information for violation of Section 177 and 211 of Republic Act No. 8293 against GMA-7.
Felipe L. Gozon, Gilberto R. Duavit, Jr., Marissa L. Flores, Jessica A. Soho, Grace Dela Pena-Reyes, John Oliver T.
Manalastas[.]
SO ORDERED.32 (Emphasis in the original)
Respondents assailed the Agra Resolution through the Petition for Certiorari with prayer for issuance of a temporary
restraining order and/or Writ of Preliminary Injunction on September 2, 2010 before the Court of Appeals. In the
Resolution dated September 13, 2010, the Court of Appeals granted the temporary restraining order preventing the
Department of Justice from enforcing the Agra Resolution.33

On November 9, 2010, the Court of Appeals rendered the Decision granting the Petition and reversing and setting aside
the Agra Resolution.34 The Court of Appeals held that Secretary Agra committed errors of jurisdiction in issuing the
assailed Resolution. Resolving the issue of copyright infringement, the Court of Appeals said:chanroblesvirtuallawlibrary
Surely, private respondent has a copyright of its news coverage. Seemingly, for airing said video feed, petitioner GMA is
liable under the provisions of the Intellectual Property Code, which was enacted purposely to protect copyright owners
from infringement. However, it is an admitted fact that petitioner GMA had only aired a five (5) second footage of the
disputed live video feed that it had received from Reuters and CNN as a subscriber. Indeed, petitioners had no notice of
the right of ownership of private respondent over the same. Without notice of the "No Access Philippines" restriction of
the live video feed, petitioner cannot he faulted for airing a live video feed from Reuters and CNN.

Verily, as aptly opined by Secretary Gonzalez in his earlier Resolution, the act of petitioners in airing the five (5) second
footage was undeniably attended by good faith and it thus serves to exculpate them from criminal liability under the
Code. While the Intellectual Properly Code is a special law, and thus generally categorized as malum prohibitum, it
bears to stress that the provisions of the Code itself do not ipso facto penalize a person or entity for copyright
infringement by the mere fact that one had used a copyrighted work or material.

Certainly so, in the exercise of one's moral and economic or copyrights, the very provisions of Part IV of the Intellectual
Property Code provide for the scope and limitations on copyright protection under Section 184 and in fact permit fair
use of copyrighted work under Section 185. With the aforesaid statutory limitations on one's economic and copyrights
and the allowable instances where the other persons can legally use a copyrighted work, criminal culpability clearly
attaches only when the infringement had been knowingly and intentionally committed.35 (Emphasis supplied)
The dispositive portion of the Decision reads:chanroblesvirtuallawlibrary
WHEREFORE, the foregoing considered, the instant petition is hereby GRANTED and the assailed Resolution dated 29
June 2010 REVERSED and SET ASIDE. Accordingly, the earlier Resolution dated 1 August 2005, which ordered the
withdrawal of the Information filed, if any, against the petitioners for violation of Sections 177 and 211 of the
Intellectual Property Code, is hereby REINSTATED. No costs.

SO ORDERED.36 (Emphasis in the original)


ABS-CBN's Motion for Reconsideration was denied.37 It then filed its Petition for Review before this court assailing the
Decision and Resolution of the Court of Appeals.38

The issues for this court's consideration are:

First, whether Secretary Agra committed errors of jurisdiction in the Resolution dated June 29, 2010 and, therefore,
whether a petition for certiorari was the proper remedy in assailing that Resolution;

Second, whether news footage is copyrightable under the law;

Third, whether there was fair use of the broadcast material;

Fourth, whether lack of knowledge that a material is copyrighted is a defense against copyright infringement;

Fifth, whether good faith is a defense in a criminal prosecution for violation of the Intellectual Property Code; and

Lastly, whether the Court of Appeals was correct in overturning Secretary Agra's finding of probable
cause.cralawlawlibrary
I

The trial court granted respondents' Motion to Suspend Proceedings and deferred respondents Dela Peña-Reyes and
Manalastas' arraignment for 60 days in view of the Petition for Review filed before the Department of Justice.

Rule 116, Section 11 (c) of the Rules of Criminal Procedure allows the suspension of the accused's arraignment in certain
circumstances only:chanroblesvirtuallawlibrary
SEC. 11. Suspension of arraignment.-Upon motion by the proper party, the arraignment shall be suspended in the
following cases:

(a) The accused appears to be suffering from an unsound mental condition which effectively renders him unable to fully
understand the charge against him and to plead intelligently thereto. In such case, the court shall order his mental
examination and, if necessary, his confinement for such purpose;

(b) There exists a prejudicial question; and

(c) A petition for review of the resolution of the prosecutor is pending at either the Department of Justice, or the Office of
the President; provided, that the period of suspension shall not exceed sixty (60) days counted from the filing of the
petition with the reviewing office. (12a) (Emphasis supplied)
In Samson v. Daway,39 this court acknowledged the applicability of Rule 116, Section (c) in a criminal prosecution for
infringement under the Intellectual Property Code. However, this court emphasized the limits of the order of deferment
under the Rule:

While the pendency of a petition for review is a ground for suspension of the arraignment, the . . . provision limits the
deferment of the arraignment to a period of 60 days reckoned from the filing of the petition with the reviewing office. It
follows, therefore, that after the expiration of said period, the trial court is bound to arraign the accused or to deny the
motion to defer arraignment.40

We clarify that the suspension of the arraignment should always be within the limits allowed by law. In Crespo v. Judge
Mogul,41 this court outlined the effects of filing an information before the trial court, which includes initiating a criminal
action and giving this court "authority to hear and determine the case":42ChanRoblesVirtualawlibrary
The preliminary investigation conducted by the fiscal for the purpose of determining whether a prima facie case exists
warranting the prosecution of the accused is terminated upon the filing of the information in the proper court. In turn,
as above stated, the filing of said information sets in motion the criminal action against the accused in Court. Should the
fiscal find it proper to conduct a reinvestigation of the case, at such stage, the permission of the Court must be
secured. After such reinvestigation the finding and recommendations of the fiscal should be submitted to the Court for
appropriate action. While it is true that the fiscal has the quasi judicial discretion to determine whether or not a criminal
case should be filed in court or not, once the case had already been brought to Court whatever disposition the fiscal may
feel should be proper in the case thereafter should be addressed for the consideration of the Court, the only
qualification is that the action of the Court must not impair the substantial rights of the accused or the right of the
People to due process of law.

Whether the accused had been arraigned or not and whether it was due to a reinvestigation by the fiscal or a review by
the Secretary of Justice whereby a motion to dismiss was submitted to the Court, the Court in the exercise of its discretion
may grant the motion or deny it and require that the trial on the merits proceed for the proper determination of the case.

However, one may ask, if the trial court refuses to grant the motion to dismiss filed by the fiscal upon the directive of
the Secretary of Justice will there not be a vacuum in the prosecution? A state prosecutor to handle the case cannot
possibly be designated by the Secretary of Justice who does not believe that there is a basis for prosecution nor can the
fiscal be expected to handle the prosecution of the case thereby defying the superior order of the Secretary of Justice.

The answer is simple. The role of the fiscal or prosecutor as We all know is to see that justice is done and not necessarily
to secure the conviction of the person accused before the Courts. Thus, in spite of his opinion to the contrary, it is the
duty of the fiscal to proceed with the presentation of evidence of the prosecution to the Court to enable the Court to
arrive at its own independent judgment as to whether the accused should be convicted or acquitted. The fiscal should
not shirk from the responsibility of appearing for the People of the Philippines even under such circumstances much less
should he abandon the prosecution of the case leaving it to the hands of a private prosecutor for then the entire
proceedings will be null and void. The least that the fiscal should do is to continue to appear for the prosecution
although he may turn over the presentation of the evidence to the private prosecutor but still under his direction and
control.

The rule therefore in this jurisdiction is that once a complaint or information is filed in Court any disposition of the case as
to its dismissal or the conviction or acquittal of the accused rests in the sound discretion of the Court. Although the fiscal
retains the direction and control of the prosecution of criminal cases even while the case is already in Court he cannot
impose his opinion on the trial court. The Court is the best and sole judge on what to do with the case before it. The
determination of the case is within its exclusive jurisdiction and competence. A motion to dismiss the case filed by the
fiscal should be addressed to the Court who has the option to grant or deny the same. It does not matter if this is done
before or after the arraignment of the accused or that the motion was filed after a reinvestigation or upon instructions
of the Secretary of Justice who reviewed the records of the investigation.43 (Emphasis supplied, citations omitted)
The doctrine in Crespo was reiterated in Mayor Balindong v. Court of Appeals,44 where this court reminded the
Department of Justice Secretary to refrain from entertaining petitions for review when the case is already pending with
this court:chanroblesvirtuallawlibrary
[I]n order to avoid a situation where the opinion of the Secretary of Justice who reviewed the action of the fiscal may be
disregarded by the trial court, the Secretary of Justice should, as far as practicable, refrain from entertaining a petition
for review or appeal from the action of the fiscal, when the complaint or information has already been filed in the Court.
The matter should be left entirely for the determination of the Court.45
The trial court should have proceeded with respondents Dela Peña-Reyes and Manalastas' arraignment after the 60-day
period from the filing of the Petition for Review before the Department of Justice on March 8, 2005. It was only on
September 13, 2010 that the temporary restraining order was issued by the Court of Appeals. The trial court erred when
it did not act on the criminal case during the interim period. It had full control and direction of the case. As Judge Mogul
reasoned in denying the motion to dismiss in Crespo, failure to proceed with the arraignment "disregards the
requirements of due process [and] erodes the Court's independence and integrity."46

II

According to ABS-CBN, the Court of Appeals erred in finding that: a motion for reconsideration was not necessary before
a petition for certiorari could be filed; the Department of Justice Secretary committed errors of jurisdiction since the
Agra Resolution was issued within its authority and in accordance with settled laws and jurisprudence; and respondents
were not liable for copyright infringement.

In its assailed Decision, the Court of Appeals found that respondents committed a procedural error when they failed to
file a motion for reconsideration before filing the Petition for Certiorari. However, the Court of Appeals held that a
motion for reconsideration was unnecessary since the Agra Resolution was a patent nullity and it would have been
useless under the circumstances:chanroblesvirtuallawlibrary
Given that a reading of the assailed Resolution and the instant records readily reveals errors -of jurisdiction on the part
of respondent Secretary, direct judicial recourse is warranted under the circumstances. Aside from the fact that said
Resolution is a patent nullity having been issued in grave abuse of discretion amounting to lack or excess of jurisdiction,
the filing of a motion for reconsideration is evidently useless on account of the fact that the issues and arguments before
this Court have already been duly raised and accordingly delved into by respondent Secretary in his disposition of the
petition a quo.47 (Emphasis in the original)
In Elma v. Jacobi,48 this court ruled that a petition for certiorari under Rule 65 of the Rules of Court is proper when
assailing adverse resolutions of the Department of Justice stemming from the determination of probable
cause.49 However, grave abuse of discretion must be alleged.50

In Sanrio Company Limited v. Lim,51 this court stressed the prosecutor's role in determining probable cause. Judicial
review will only lie when it is shown that the prosecutor acted with grave abuse of discretion amounting to lack or
excess of jurisdiction:chanroblesvirtuallawlibrary
A prosecutor alone determines the sufficiency of evidence that will establish probable cause justifying the filing of a
criminal information against the respondent. By way of exception, however, judicial review is allowed where respondent
has clearly established that the prosecutor committed grave abuse of discretion. Otherwise stated, such review is
appropriate only when the prosecutor has exercised his discretion in an arbitrary, capricious, whimsical or despotic
manner by reason of passion or personal hostility, patent and gross enough to amount to an evasion of a positive duty
or virtual refusal to perform a duty enjoined by law.52 (Citations omitted)
Grave abuse of discretion refers to:chanroblesvirtuallawlibrary
such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must
be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility
and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined by or to act at all in contemplation of law.53
Resorting to certiorari requires that there be there be "no appeal, or any plain, speedy, and adequate remedy in the
ordinary course of law[,]"54 such as a motion for reconsideration. Generally, "a motion for reconsideration is a
condition sine qua non before a petition for certiorari may lie, its purpose being to grant an opportunity for the [tribunal
or officer] to correct any error attributed to it by a re-examination of the legal and factual circumstances of the case."55

However, exceptions to the rule exist:chanroblesvirtuallawlibrary


(a) where the order is a patent nullity, as where the Court a quo had no jurisdiction; (b) where the questions raised in
the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and
passed upon in the lower court; (c) where there is an urgent necessity for the resolution of the question and any further
delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is
perishable; (d) where, under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was
deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case, relief from an order of
arrest is urgent and the granting of such relief by the trial Court is improbable; (g) where the proceedings in the lower
court are a nullity for lack of due process; (h) where the proceedings was ex parte or in which the petitioner had no
opportunity to object; and (i) where the issue raised is one purely of law or where public interest is involved.56 (Emphasis
in the original, citations omitted)
As argued by respondents, "[a] second motion for reconsideration would have been useless and futile since the
Department] [of] J[ustice] had already passed upon the same issues twice."57 Equally pressing under the circumstances
was the need to resolve the matter, as the Information's filing would lead to respondents' imminent arrest.58

Moreover, Department of Justice Department Circular No. 70 dated July 3, 2000, or the 2000 NPS Rules on Appeal,
provides that no second motion for reconsideration of the Department of Justice Secretary's resolution shall be
entertained:chanroblesvirtuallawlibrary
SECTION 13. Motion for reconsideration. The aggrieved party may file a motion for reconsideration within a non-
extendible period of ten (10) days from receipt of the resolution on appeal, furnishing the adverse party and the
Prosecution Office concerned with copies thereof and submitting proof of such service. No second or further motion for
reconsideration shall be entertained.
The Agra Resolution was the result of respondents' Motion for Reconsideration assailing the Gonzalez Resolution. To file
a motion for reconsideration of the Agra Resolution would be superfluous. Respondents were, therefore, correct in filing
the Petition for Certiorari of the Agra Resolution before the Court of Appeals.cralawlawlibrary

III

The Court of Appeals ruled that Secretary Agra committed errors of jurisdiction, which then required the grant of the
writ of certiorari:chanroblesvirtuallawlibrary
So viewed, by ordering the filing of information without proof that probable cause exists to charge petitioners with a
crime, respondent Secretary clearly committed an error of jurisdiction thus warranting the issuance of the writ of
certiorari. Surely, probable cause cannot be had when the very provisions of the statute exculpates criminal liability in
cases classified as fair use of copyrighted materials. The fact that they admittedly used the Reuters live video feed is not,
as a matter of course, tantamount to copyright infringement that would justify the filing of an information against the
petitioners.59
Error of jurisdiction must be distinguished from error of judgment:

A line must be drawn between errors of judgment and errors of jurisdiction. An error of judgment is one which the court
may commit in the exercise of its jurisdiction. An error of jurisdiction renders an order or judgment void or voidable.
Errors of jurisdiction are reviewable on certiorari; errors of judgment, only by appeal.60

In People v. Hon. Sandiganbayan61:chanroblesvirtuallawlibrary


An error of judgment is one which the court may commit in the exercise of its jurisdiction. An error of jurisdiction is one
where the act complained of was issued by the court without or in excess of jurisdiction, or with grave abuse of
discretion, which is tantamount to lack or in excess of jurisdiction and which error is correctible only by the
extraordinary writ of certiorari. Certiorari will not be issued to cure errors of the trial court in its appreciation of the
evidence of the parties, or its conclusions anchored on the said findings and its conclusions of law.62 (Emphasis supplied)
This court has adopted a deferential attitude towards review of the executive's finding of probable cause.63 This is based
"not only upon the respect for the investigatory and [prosecutorial] powers granted by the Constitution to the executive
department but upon practicality as well."64 Review of the Department of Justice Secretary's decision or resolution will
be allowed only when grave abuse of discretion is alleged:chanroblesvirtuallawlibrary
The full discretionary authority to determine probable cause in a preliminary investigation to ascertain sufficient ground
for the filing of information rests with the executive branch. Hence, judicial review of the resolution of the Secretary of
Justice is limited to a determination whether there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction. Courts cannot substitute the executive branch's judgment.

. . . .

It is only where the decision of the Justice Secretary is tainted with grave abuse of discretion amounting to lack or excess
of jurisdiction that the Court of Appeals may take cognizance of the case in a petition for certiorari under Rule 65 of the
Revised Rules of Civil Procedure. The Court of Appeals decision may then be appealed to this Court by way of a petition
for review on certiorari.65 (Emphasis supplied, citations omitted)
In this case, it must be shown that Secretary Agra exceeded his authority when he reversed the findings of Secretary
Gonzalez. This court must determine whether there is probable cause to file an information for copyright infringement
under the Intellectual Property Code.cralawlawlibrary

IV

Probable cause pertains to "such facts as are sufficient to engender a well-founded belief that a crime has been
committed and that respondent is probably guilty thereof." 66 Preliminary investigation is the inquiry or proceeding to
determine whether there is probable cause.67

In Webb v. De Leon,68 this court ruled that determination of probable cause during preliminary investigation does not
require trial-like evaluation of evidence since existence of probable cause does not equate to
guilt:chanroblesvirtuallawlibrary
It ought to be emphasized that in determining probable cause, the average man weighs facts and circumstances without
resorting to the calibrations of our technical rules of evidence of which his knowledge is nil. Rather, he relies on the
calculus of common sense of which all reasonable men have an abundance.

. . . .

. . . A finding of probable cause merely binds over the suspect to stand trial. It is not a pronouncement of guilt.69
In Reyes v. Pearlbank Securities, Inc.,70 finding probable cause is not equivalent to finding with moral certainty that the
accused committed the crime:

A finding of probable cause needs only to rest on evidence showing that more likely than not a crime has been
committed by the suspects. It need not be based on clear and convincing evidence of guilt, not on evidence establishing
guilt beyond reasonable doubt, and definitely not on evidence establishing absolute certainty of guilt. In determining
probable cause, the average man weighs facts and circumstances without resorting to the calibrations of the rules of
evidence of which he has no technical knowledge. He relies on common sense.71

During preliminary investigation, a public prosecutor does not adjudicate on the parties' rights, obligations, or
liabilities.72

In the recent case of Estrada v. Office of the Ombudsman, et al,73 we reiterated Webb on the determination of probable
cause during preliminary investigation and traced the history of probable cause as borrowed from American
jurisprudence:chanroblesvirtuallawlibrary
The purpose in determining probable cause is to make sure that the courts are not clogged with weak cases that will
only be dismissed, as well as to spare a person from the travails of a needless prosecution.

. . . .

. . . In the United States, from where we borrowed the concept of probable cause, the prevailing definition of probable
cause is this:chanroblesvirtuallawlibrary
In dealing with probable cause, however, as the very name implies, we deal with probabilities. These are not technical;
they are the factual and practical considerations of everyday life on which reasonable and prudent men, not legal
technicians, act. The standard of proof is accordingly correlative to what must be proved.

"The substance of all the definitions" of probable cause "is a reasonable ground for belief of guilt." McCarthy v. De
Armit, 99 Pa. St. 63, 69, quoted with approval in the Carroll opinion. 267 U. S. at 161. And this "means less than evidence
which would justify condemnation" or conviction, as Marshall, C. J., said for the Court more than a century ago in Locke
v. United States, 7 Cranch 339, 348. Since Marshall's time, at any rate, it has come to mean more than bare suspicion:
Probable cause exists where "the facts and circumstances within their [the officers'] knowledge and of which they had
reasonably trustworthy information [are] sufficient in themselves to warrant a man of reasonable caution in the belief
that" an offense has been or is being committed. Carroll v. United States, 267 U. S. 132, 162.

These long-prevailing standards seek to safeguard citizens from rash and unreasonable interferences with privacy and
from unfounded charges of crime. They also seek to give fair leeway for enforcing the law in the community's
protection. Because many situations which confront officers in the course of executing their duties are more or less
ambiguous, room must be allowed for some mistakes on their part. But the mistakes must be those of reasonable men,
acting on facts leading sensibly to their conclusions of probability. The rule of probable cause is a practical, nontechnical
conception affording the best compromise that has been found for accommodating these often opposing interests.
Requiring more would unduly hamper law enforcement. To allow less would be to leave law-abiding citizens at the
mercy of the officers' whim or caprice.
In the Philippines, there are four instances in the Revised Rules of Criminal Procedure where probable cause is needed
to be established:

(1) In Sections 1 and 3 of Rule 112: By the investigating officer, to determine whether there is sufficient ground
to engender a well-founded belief that a crime has been committed and the respondent is probably guilty
thereof, and should be held for trial. A preliminary investigation is required before the filing of a complaint
or information for an offense where the penalty prescribed by law is at least four years, two months and
one day without regard to the fine;

(2) In Sections 6 and 9 of Rule 112: By the judge, to determine whether a warrant of arrest or a commitment
order, if the accused has already been arrested, shall be issued and that there is a necessity of placing the
respondent under immediate custody in order not to frustrate the ends of justice;

(3) In Section 5(b) of Rule 113: By a peace officer or a private person making a warrantless arrest when an
offense has just been committed, and he has probable cause to believe based on personal knowledge of
facts or circumstances that the person to be arrested has committed it; and

(4) In Section 4 of Rule 126: By the judge, to determine whether a search warrant shall be issued, and only upon
probable cause in connection with one specific offense to be determined personally by the judge after
examination under oath or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the things to be seized which may be anywhere in the
Philippines.

In all these instances, the evidence necessary to establish probable cause is based only on the likelihood, or probability,
of guilt.74
Estrada also highlighted that a "[preliminary investigation is not part of the criminal action. It is merely preparatory and
may even be disposed of in certain situations."75

To determine whether there is probable cause that respondents committed copyright infringement, a review of the
elements of the crime, including the existing facts, is required.cralawlawlibrary

ABS-CBN claims that news footage is subject to copyright and prohibited use of copyrighted material is punishable under
the Intellectual Property Code. It argues that the new footage is not a "newsworthy event" but "merely an account of
the arrival of Angelo dela Cruz in the Philippines — the latter being the newsworthy
event":76ChanRoblesVirtualawlibrary
To be clear, it is the event itself or the arrival of Angelo dela Cruz which is not copyrightable because that is the
newsworthy event. However, any footage created from the event itself, in this case the arrival of Angelo dela Cruz, are
intellectual creations which are copyrightable. Thus, the footage created by ABS-CBN during the arrival of Angelo dela
Cruz, which includes the statements of Dindo Amparo, are copyrightable and protected by the laws on copyright.77
On the other hand, respondents argue that ABS-CBN's news footage of Angelo dela Cruz's arrival is not copyrightable or
subject to protection:chanroblesvirtuallawlibrary
Certainly, the arrival of Angelo [d]ela Cruz, which aroused public attention and the consciousness of the Filipino people
with regard to their countrymen, OFWs working in foreign countries and how the Philippine government responds to the
issues concerning them, is "news". There is no ingenuity or inventiveness added in the said news footage. The video
footage of this "news" is not copyrightable by any legal standard as facts of everyday life depicted in the news and items
of press information is part of the public domain.78 (Emphasis in the original)
The news footage is copyrightable.

The Intellectual Property Code is clear about the rights afforded to authors of various kinds of work. Under the Code,
"works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well as of their
content, quality and purpose."79 These include "[audio-visual works and cinematographic works and works produced by
a process analogous to cinematography or any process for making audiovisual recordings."80

Contrary to the old copyright law,81 the Intellectual Property Code does not require registration of the work to fully
recover in an infringement suit. Nevertheless, both copyright laws provide that copyright for a work is acquired by an
intellectual creator from the moment of creation.82

It is true that under Section 175 of the Intellectual Property Code, "news of the day and other miscellaneous facts having
the character of mere items of press information" are considered unprotected subject matter.83 However, the Code
does not state that expression of the news of the day, particularly when it underwent a creative process, is not entitled
to protection.

An idea or event must be distinguished from the expression of that idea or event. An idea has been likened to a ghost in
that it "must be spoken to a little before it will explain itself."84 It is a concept that has eluded exact legal definition.85 To
get a better grasp of the idea/expression dichotomy, the etymology of the term "idea" is
traced:chanroblesvirtuallawlibrary
The word "idea" is derived from a Greek term, meaning "a form, the look or appearance of a thing as opposed to its
reality, from idein, to see." In the Timaeus,Plato saw ideas as eternal paradigms, independent objects to which the
divine demiurge looks as patterns in forming the world. This was later modified to the religious conception of ideas as
the thoughts of God. "It is not a very long step to extend the term 'idea' to cover patterns, blueprints, or plans in
anyone's mind, not only in God's." The word entered the French and English vernacular in the 1600s and possessed two
meanings. The first was the Platonic meaning of a perfect exemplar or paradigm. The second, which probably has its
origin with Descartes, is of a mental concept or image or, more broadly, any object of the mind when it is active. Objects
of thought may exist independently. The sun exists (probably) before and after you think of it. But it is also possible to
think of things that have never existed, such as a unicorn or Pegasus. John Locke defined ideas very comprehensively, to
include: all objects of the mind. Language was a way of translating the invisible, hidden ideas that make up a person's
thoughts into the external, perceptible world of articulate sounds and visible written symbols that others can
understand.86 (Citations omitted)
There is no one legal definition of "idea" in this jurisdiction. The term "idea" is mentioned only once in the Intellectual
Property Code.87 In Joaquin, Jr. v. Drilon,88 a television format (i.e., a dating show format) is not copyrightable under
Section 2 of Presidential Decree No. 49;89 it is a mere concept:chanroblesvirtuallawlibrary
P.D. No. 49, §2, in enumerating what are subject to copyright, refers to finished works and not to concepts. The copyright
does not extend to an idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless
of the form in which it is described, explained, illustrated, or embodied in such work. Thus, the new INTELLECTUAL
PROPERTY CODE OF THE PHILIPPINES provides:chanroblesvirtuallawlibrary
SEC. 175. Unprotected Subject Matter.—Notwithstanding the provisions of Sections 172 and 173, no protection shall
extend, under this law, to any idea, procedure, system, method or operation, concept, principle, discovery or mere data
as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other
miscellaneous facts having the character of mere items of press information; or any official text of a legislative,
administrative or legal nature, as well as any official translation thereof.
What then is the subject matter of petitioners' copyright? This Court is of the opinion that petitioner BJPFs copyright
covers audio-visual recordings of each episode of Rhoda and Me, as falling within the class of works mentioned in P.D.
49, §2(M), to wit:chanroblesvirtuallawlibrary
Cinematographic works and works produced by a process analogous to cinematography or any process for making
audio-visual recordings;
The copyright does not extend to the general concept or format of its dating game show. Accordingly, by the very nature
of the subject of petitioner BJPI's copyright, the investigating prosecutor should have the opportunity to compare the
videotapes of the two shows.

Mere description by words of the general format of the two dating game shows is insufficient; the presentation of the
master videotape in evidence was indispensable to the determination of the existence of probable cause. As aptly
observed by respondent Secretary of Justice:

A television show includes more than mere words can describe because it involves a whole spectrum of visuals and
effects, video and audio, such that no similarity or dissimilarity may be found by merely describing the general
copyright/format of both dating game shows90 (Emphasis supplied, citations omitted)
Ideas can be either abstract or concrete.91 It is the concrete ideas that are generally referred to as
expression:chanroblesvirtuallawlibrary
The words "abstract" and "concrete" arise in many cases dealing with the idea/expression distinction. The Nichols
court, for example, found that the defendant's film did not infringe the plaintiffs play because it was "too generalized an
abstraction from what plaintiff wrote . . . only a part of her ideas." In Eichel v. Marcin, the court said that authors may
exploit facts, experiences, field of thought, and general ideas found in another's work, "provided they do not
substantially copy a concrete form, in which the circumstances and ideas have been developed, arranged, and put into
shape." Judge Hand, in National Comics Publications, Inc. v. Fawcett Publications, Inc.said that "no one infringes, unless
he descends so far into what is concrete as to invade. . . 'expression.'"

These cases seem to be distinguishing "abstract" ideas from "concrete" tangible embodiments of these abstractions that
may be termed expression. However, if the concrete form of a work means more than the literal expression contained
within it, it is difficult to determine what is meant by "concrete." Webster's New Twentieth Century Dictionary of the
English Language provides several meanings for the word concrete. These include: "having a material, perceptible
existence; of, belonging to, or characterized by things or events that can be perceived by the senses; real; actual;" and
"referring to a particular; specific, not general or abstract."92
In Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,93 this court, citing the American case of Baker v.
Selden, distinguished copyright from patents and illustrated how an idea or concept is different from the expression of
that idea:chanroblesvirtuallawlibrary
In the oft-cited case of Baker vs. Selden, the United States Supreme Court held thatonly the expression of an idea is
protected by copyright, not the idea itself. In that case, the plaintiff held the copyright of a book which expounded on a
new accounting system he had developed. The publication illustrated blank forms of ledgers utilized in such a system.
The defendant reproduced forms similar to those illustrated in the plaintiffs copyrighted book. The US Supreme Court
ruled that:chanroblesvirtuallawlibrary
"There is no doubt that a work on the subject of book-keeping, though only explanatory of well known systems, may be
the subject of a copyright; but, then, it is claimed only as a book, x x x But there is a clear distinction between the books,
as such, and the art, which it is, intended to illustrate. The mere statement of the proposition is so evident that it
requires hardly any argument to support ii. The same distinction may be predicated of every other art as well as that of
bookkeeping.

A treatise on the composition and use of medicines, be they old or new; on the construction and use of ploughs or
watches or churns; or on the mixture and application of colors for painting or dyeing; or on the mode of drawing lines to
produce the effect of perspective, would be the subject of copyright; but no one would contend that the copyright of
the treatise would give the exclusive right to the art or manufacture described therein. The copyright of the book, if not
pirated from other works, would be valid without regard to the novelty or want of novelty of its subject matter. The
novelty of the art or thing described or explained has nothing to do with the validity of the copyright. To give to the
author of the book an exclusive property in the art described therein, when no examination of its novelty has ever been
officially made, would be a surprise and a fraud upon the public. That is the province of letters patent, not of copyright.
The claim to an invention of discovery of an art or manufacture must be subjected to the examination of the Patent
Office before an exclusive right therein can be obtained; and a patent from the government can only secure it.

The difference between the two things, letters patent and copyright, may be illustrated by reference to the subjects just
enumerated. Take the case of medicines. Certain mixtures are found to be of great value in the healing art. If the
discoverer writes and publishes a book on the subject (as regular physicians generally do), he gains no exclusive right to
the manufacture and sale of the medicine; he gives that to the public. If he desires to acquire such exclusive right, he
must obtain a patent for the mixture as a new art, manufacture or composition of matter. He may copyright his book, if
he pleases; but that only secures to him the exclusive right of printing and publishing his book. So of all other inventions
or discoveries.

The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives no
exclusive right to the modes of drawing described, though they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to the public.

. . . .

Now, whilst no one has a right to print or publish his book or any material part thereof, as a hook intended to convey
instruction in the art, any person may practice and use the, art itself which he has described and illustrated therein. The
use of the art is a totally different thing from a publication of the book, explaining it. The copyright of a book on
bookkeeping cannot secure the exclusive right to make, sell and use account books prepared upon the plan set forth in
such book. Whether the art might or might not have been patented, is a question, which is not before us. It was not
patented, and is open and free to the use of the public. And, of course, in using the art, the ruled lines and headings of
accounts must necessarily be used as incident to it.

The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas produced by the
peculiar nature of the art described in the books, which have been made the subject of copyright. In describing the art,
the illustrations and diagrams employed happened to correspond more closely than usual with the actual work
performed by the operator who uses the art. x x x The description of the art in a book, though entitled to the benefit of
copyright, lays no foundation for an exclusive claim to the art itself. The object of the one is explanation; the object of
the other is use. The former may be secured by copyright. The latter can only be secured, if it can be secured at all, by
letters patent."94 (Emphasis supplied)
News or the event itself is not copyrightable. However, an event can be captured and presented in a specific medium. As
recognized by this court in Joaquin, television "involves a whole spectrum of visuals and effects, video and
audio."95 News coverage in television involves framing shots, using images, graphics, and sound effects. It involves
creative process and originality. Television news footage is an expression of the news.

In the United States, a line of cases dwelt on the possibility of television newscasts to be copyrighted.97 Most of these
cases focused on private individuals' sale or resale of tapes of news broadcasts. Conflicting decisions were rendered by
its courts. Noteworthy, however, is the District Court's pronouncement in Pacific & Southern Co. v. Duncan,98 which
involves a News Monitoring Service's videotaping and sale of WXIA-TVs news broadcasts:chanroblesvirtuallawlibrary
It is axiomatic that copyright protection does not extend to news "events" or the facts or ideas which are the subject
of news reports. Miller v. Universal City Studios, Inc., 650 F.2d 1365, 1368 (5th Cir. 1981); Wainwright Securities, Inc. v.
Wall Street Transcript Corp., 558 F.2d 91, 95 (2d Cir. 1977), cert, denied, 434 U.S. 1014, 98 S.Ct. 730, 54 L.Ed.2d 759
(1978). But it is equally well-settled that copyright protection does extend to the reports themselves, as distinguished
from the substance of the information contained in the reports. Wainwright, 558 F.2d at 95; International News Service
v. Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211 (1918); see Chicago Record-Herald Co. v. Tribune Assn., 275 F.
797 (7th Cir.1921); 1 Nimmer on Copyright § 2.11[B] (1983). Copyright protects the manner of expression of news
reports, "the particular form or collocation of words in which the writer has communicated it" International News
Service, 248 U.S. at 234, 39 S.Ct. at 70. Such protection extends to electronic news reports as well as written
reports. See 17 U.S.C. § 102(a) (5), (6), and (7); see also Iowa State University Research Foundations, Inc. v. American
Broadcasting Cos., 621 F.2d 57, 61 (2d Cir. 1980)." (Emphasis supplied)
The idea/expression dichotomy has long been subject to debate in the field of copyright law. Abolishing the dichotomy
has been proposed, in that non-protectibility of ideas should be re-examined, if not stricken, from decisions and the
law:chanroblesvirtuallawlibrary
If the underlying purpose of the copyright law is the dual one expressed by Lord Mansfield, the only excuse for the
continuance of the idea-expression test as a judicial standard for determining protectibility would be that it was or could
be a truly useful method of determining the proper balance between the creator's right to profit from his work and the
public's right that the "progress of the arts not be retarded."

. . . [A]s used in the present-day context[,] the dichotomy has little or no relationship to the policy which it should
effectuate. Indeed, all too often the sweeping language of the courts regarding the nonprotectibility of ideas gives the
impression that this is of itself a policy of the law, instead of merely a clumsy and outdated tool to achieve a much more
basic end.100
The idea/expression dichotomy is a complex matter if one is trying to determine whether a certain material is a copy of
another.101 This dichotomy would be more relevant in determining, for instance, whether a stage play was an
infringement of an author's book involving the same characters and setting. In this case, however, respondents admitted
that the material under review — which is the subject of the controversy — is an exact copy of the original. Respondents
did not subject ABS-CBN's footage to any editing of their own. The news footage did not undergo any transformation
where there is a need to track elements of the original.

Having established the protectible nature of news footage, we now discuss the concomitant rights accorded to authors.
The authors of a work are granted several rights in relation to it, including copyright or economic
rights:chanroblesvirtuallawlibrary
SECTION 177. Copyright or Economic Rights. — Subject to the provisions of Chapter VIII, copyright or economic rights
shall consist of the exclusive right to carry out, authorize or prevent the following acts:chanroblesvirtuallawlibrary
177.1. Reproduction of the work or substantial portion of the work;

177.2. Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work;

177.3. The first public distribution of the original and each copy of the work by sale or other forms of transfer of
ownership;

177.4. Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound
recording, a computer program, a compilation of data and other materials or a musical work in graphic form,
irrespective of the ownership of the original or the copy which is the subject of the rental; (n)

177.5. Public display of the original or a copy of the work;

177.6. Public performance of the work; and

177.7. Other communication to the public of the work. (Sec. 5, P. D. No. 49a) (Emphasis supplied)
Under Section 211 of the Intellectual Property Code, broadcasting organizations are granted a more specific set of rights
called related or neighboring rights:chanroblesvirtuallawlibrary
SECTION 211. Scope of Right. — Subject to the provisions of Section 212, broadcasting organizations shall enjoy the
exclusive right to carry out, authorize or prevent any of the following acts:
211.1. The rebroadcasting of their broadcasts;

211.2. The recording in any manner, including the making of films or the use of video tape, of their broadcasts for the
purpose of communication to the public of television broadcasts of the same; and

211.3. The use of such records for fresh transmissions or for fresh recording. (Sec. 52, P.D. No. 49) (Emphasis
supplied)
Section 212 of the Code provides:

CHAPTER XV
LIMITATIONS ON PROTECTION

Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply where the acts referred to in those
Sections are related to:chanroblesvirtuallawlibrary
212.1. The use by a natural person exclusively for his own personal purposes;

212.2. Using short excerpts for reporting current events;

212.3. Use solely for the purpose of teaching or for scientific research; and

212.4. Fair use of the broadcast subject to the conditions under Section 185. (Sec. 44, P.D. No. 49a)
The Code defines what broadcasting is and who broadcasting organizations include:chanroblesvirtuallawlibrary
202.7. "Broadcasting" means the transmission by wireless means for the public reception of sounds or of images or of
representations thereof; such transmission by satellite is also "broadcasting" where the means for decrypting are
provided to the public by the broadcasting organization or with its consent;

202.8. "Broadcasting organization" shall include a natural person or a juridical entity duly authorized to engage in
broadcasting[.]
Developments in technology, including the process of preserving once ephemeral works and disseminating them,
resulted in the need to provide a new kind of protection as distinguished from copyright.102 The designation
"neighboring rights" was abbreviated from the phrase "rights neighboring to copyright."103 Neighboring or related rights
are of equal importance with copyright as established in the different conventions covering both kinds of rights.104

Several treaties deal with neighboring or related rights of copyright.105 The most prominent of these is the "International
Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations" (Rome
Convention).106
The Rome Convention protects the rights of broadcasting organizations in relation to their broadcasts. Article XIII of the
Rome Convention enumerates the minimum rights accorded to broadcasting organizations:chanroblesvirtuallawlibrary
Article 13
Minimum Rights for Broadcasting Organizations

Broadcasting organisations shall enjoy the right to authorize or prohibit:

(a) the rebroadcasting of their broadcasts;

(b) the fixation of their broadcasts;

(c) the reproduction:

(i) of fixations, made without their consent, of their broadcasts;

(ii) of fixations, made in accordance with the provisions of Article 15, of their broadcasts, if the reproduction is
made for purposes different from those referred to in those provisions;

(d) the communication to the public of their television broadcasts if such communication is made in places accessible
to the public against payment of an entrance fee; it shall be a matter for the domestic law of the State where
protection of this right is claimed to determine the conditions under which it may be exercised.
With regard to the neighboring rights of a broadcasting organization in this jurisdiction, this court has discussed the
difference between broadcasting and rebroadcasting:chanroblesvirtuallawlibrary
Section 202.7 of the IP Code defines broadcasting as "the transmission by wireless means for the public reception of
sounds or of images or of representations thereof; such transmission by satellite is also 'broadcasting' where the means
for decrypting are provided to the public by the broadcasting organization or with its consent."

On the other hand, rebroadcasting as defined in Article 3(g) of the International Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting Organizations, otherwise known as the 1961 Rome Convention,
of which the Republic of the Philippines is a signatory, is "the simultaneous broadcasting by one broadcasting
organization of the broadcast of another broadcasting organization."

. . . .

Under the Rome Convention, rebroadcasting is "the simultaneous broadcasting by one broadcasting organization of the
broadcast of another broadcasting organization." The Working Paper prepared by the Secretariat of the Standing
Committee on Copyright and Related Rights defines broadcasting organizations as "entities that take the financial and
editorial responsibility for the selection and arrangement of, and investment in, the transmitted content."107 (Emphasis
in the original, citations omitted)
Broadcasting organizations are entitled to several rights and to the protection of these rights under the Intellectual
Property Code. Respondents' argument that the subject news footage is not copyrightable is erroneous. The Court of
Appeals, in its assailed Decision, correctly recognized the existence of ABS-CBN's copyright over the news
footage:chanroblesvirtuallawlibrary
Surely, private respondent has a copyright of its news coverage. Seemingly, for airing said video feed, petitioner GMA is
liable under the provisions of the Intellectual Property Code, which was enacted purposely to protect copyright owners
from infringement.108
News as expressed in a video footage is entitled to copyright protection. Broadcasting organizations have not only
copyright on but also neighboring rights over their broadcasts. Copyrightability of a work is different from fair use of a
work for purposes of news reporting.cralawlawlibrary

VI
ABS-CBN assails the Court of Appeals' ruling that the footage shown by GMA-7 falls under the scope of Section 212.2 and
212.4 of the Intellectual Property Code:chanroblesvirtuallawlibrary
The evidence on record, as well as the discussions above, show that the footage used by [respondents] could hardly be
characterized as a short excerpt, as it was aired over one and a half minutes.

Furthermore, the footage used does not fall under the contemplation of Section 212.2 of the Intellectual Property Code.
A plain reading of the provision would reveal that copyrighted material referred to in Section 212 are short portions of
an artist's performance under Section 203, or a producer's sound recordings under Sections 208 and 209. Section 212
does not refer to actual use of video footage of another as its own.

. . . .

The Angelo dela Cruz footage does not fall under the rule on Section 212.4 of the Intellectual Property Code on fair use
of the broadcast.

In determining fair use, several factors are considered, including the nature of the copyrighted work, and the amount
and substantiality of the person used in relation to the copyrighted work as a whole.

In the business of television news reporting, the nature of the copyrighted work or the video footages, are such that,
footage created, must be a novelty to be a good report. Thus, when the . . . Angelo dela Cruz footage was used by
[respondents], the novelty of the footage was clearly affected.

Moreover, given that a substantial portion of the Angelo dela Cruz footage was utilized by GMA-7 for its own, its use can
hardly be classified as fair use.

Hence, [respondents] could not be considered as having used the Angelo dela Cruz [footage] following the provisions on
fair use.

It is also worthy to note that the Honorable Court of Appeals seem to contradict itself when it relied on the provisions of
fair use in its assailed rulings considering that it found that the Angelo dela Cruz footage is not copyrightable, given that
the fair use presupposes an existing copyright. Thus, it is apparent that the findings of the Honorable Court of Appeals
are erroneous and based on wrong assumptions.109(Underscoring in the original)
On the other hand, respondents counter that GMA-7's use of ABS-CBN's news footage falls under fair use as defined in
the Intellectual Property Code. Respondents, citing the Court of Appeals Decision, argue that a strong statutory defense
negates any finding of probable cause under the same statute. The Intellectual Property Code provides that fair use
negates infringement.

Respondents point out that upon seeing ABS-CBN's reporter Dindo Amparo on the footage, GMA-7 immediately shut off
the broadcast. Only five (5) seconds passed before the footage was cut. They argue that this shows that GMA-7 had no
prior knowledge of ABS-CBN's ownership of the footage or was notified of it. They claim that the Angelo dela Cruz
footage is considered a short excerpt of an event's "news" footage and is covered by fair use.111

Copyright protection is not absolute.112 The Intellectual Property Code provides the limitations on copyright:

CHAPTER VIII
LIMITATIONS ON COPYRIGHT

Section 184. Limitations on Copyright. - 184.1. Notwithstanding the provisions of Chapter V, the following acts shall not
constitute infringement of copyright:

. . . .
184.2. The provisions of this section shall be interpreted in such a way as to allow the work to be used in a manner
which does not conflict with the normal exploitation of the work and does not unreasonably prejudice the right holder's
legitimate interests.

. . . .cralawlawlibrary

CHAPTER XV
LIMITATIONS ON PROTECTION

Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply where the acts referred to in those
Sections are related to:

. . . .

212.2. Using short excerpts for reporting current events;

212.4. Fair use of the broadcast subject to the conditions under Section 185. (Sec. 44, P.D. No. 49a) (Emphasis supplied)
The determination of what constitutes fair use depends on several factors. Section 185 of the Intellectual Property Code
states:

SECTION 185. Fair Use of a Copyrighted Work. —


185.1. The fair use of a copyrighted work for criticism, comment, news reporting, teaching including multiple copies for
classroom use, scholarship, research, and similar purposes is not an infringement of copyright. ... In determining
whether the use made of a work in any particular case is fair use, the factors to be considered shall
include:chanroblesvirtuallawlibrary

a. The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit
educational purposes;
b. The nature of the copyrighted work;
c. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
d. The effect of the use upon the potential market for or value of the copyrighted work.

Respondents allege that the news footage was only five (5) seconds long, thus falling under fair use. ABS-CBN belies this
contention and argues that the footage aired for two (2) minutes and 40 seconds.113 According to the Court of Appeals,
the parties admitted that only five (5) seconds of the news footage was broadcasted by GMA-7.114

This court defined fair use as "a privilege to use the copyrighted material in a reasonable manner without the consent of
the copyright owner or as copying the theme or ideas rather than their expression."115 Fair use is an exception to the
copyright owner's monopoly of the use of the work to avoid stifling "the very creativity which that law is designed to
foster."116

Determining fair use requires application of the four-factor test. Section 185 of the Intellectual Property Code lists four
(4) factors to determine if there was fair use of a copyrighted work:

a. The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit
educational purposes;

b. The nature of the copyrighted work;

c. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

d. The effect of the use upon the potential market for or value of the copyrighted work.
First, the purpose and character of the use of the copyrighted material must fall under those listed in Section 185, thus:
"criticism, comment, news reporting, teaching including multiple copies for classroom use, scholarship, research, and
similar purposes."117 The purpose and character requirement is important in view of copyright's goal to promote
creativity and encourage creation of works. Hence, commercial use of the copyrighted work can be weighed against fair
use.

The "transformative test" is generally used in reviewing the purpose and character of the usage of the copyrighted
work.118 This court must look into whether the copy of the work adds "new expression, meaning or message" to
transform it into something else.119 "Meta-use" can also occur without necessarily transforming the copyrighted work
used.120

Second, the nature of the copyrighted work is significant in deciding whether its use was fair. If the nature of the work is
more factual than creative, then fair use will be weighed in favor of the user.

Third, the amount and substantiality of the portion used is important to determine whether usage falls under fair use.
An exact reproduction of a copyrighted work, compared to a small portion of it, can result in the conclusion that its use
is not fair. There may also be cases where, though the entirety of the copyrighted work is used without consent, its
purpose determines that the usage is still fair.121 For example, a parody using a substantial amount of copyrighted work
may be permissible as fair use as opposed to a copy of a work produced purely for economic gain.

Lastly, the effect of the use on the copyrighted work's market is also weighed for or against the user. If this court finds
that the use had or will have a negative impact on the copyrighted work's market, then the use is deemed unfair.

The structure and nature of broadcasting as a business requires assigned values for each second of broadcast or airtime.
In most cases, broadcasting organizations generate revenue through sale of time or timeslots to advertisers, which, in
turn, is based on market share: 122ChanRoblesVirtualawlibrary
Once a news broadcast has been transmitted, the broadcast becomes relatively worthless to the station. In the case of
the aerial broadcasters, advertising sales generate most of the profits derived from news reports. Advertising rates are,
in turn, governed by market share. Market share is determined by the number of people watching a show at any
particular time, relative to total viewers at that time. News is by nature time-limited, and so re-broadcasts are generally
of little worth because they draw few viewers. Newscasts compete for market share by presenting their news in an
appealing format that will capture a loyal audience. Hence, the primary reason for copyrighting newscasts by
broadcasters would seem to be to prevent competing stations from rebroadcasting current news from the station with
the best coverage of a particular news item, thus misappropriating a portion of the market share.

Of course, in the real world there are exceptions to this perfect economic view. However, there are also many caveats
with these exceptions. A common exception is that some stations rebroadcast the news of others. The caveat is that
generally, the two stations are not competing for market share. CNN, for example, often makes news stories available to
local broadcasters. First, the local broadcaster is often not affiliated with a network (hence its need for more
comprehensive programming), confining any possible competition to a small geographical area. Second, the local
broadcaster is not in competition with CNN. Individuals who do not have cable TV (or a satellite dish with decoder)
cannot receive CNN; therefore there is no competition. . . . Third, CNN sells the right of rebroadcast to the local stations.
Ted Turner, owner of CNN, does not have First Amendment freedom of access argument foremost on his mind. (Else he
would give everyone free cable TV so everyone could get CNN.) He is in the business for a profit. Giving away resources
does not a profit make.123 (Emphasis supplied)
The high value afforded to limited time periods is also seen in other media. In social media siteInstagram, users are
allowed to post up to only 15 seconds of video.124 In short-video sharing website Vine,125 users are allowed a shorter
period of six (6) seconds per post. The mobile application 1 Second Everyday takes it further by capturing and stitching
one (1) second of video footage taken daily over a span of a certain period.126

Whether the alleged five-second footage may be considered fair use is a matter of defense. We emphasize that the case
involves determination of probable cause at the preliminary investigation stage. Raising the defense of fair use does not
automatically mean that no infringement was committed. The investigating prosecutor has full discretion to evaluate
the facts, allegations, and evidence during preliminary investigation. Defenses raised during preliminary investigation
are subject to further proof and evaluation before the trial court. Given the insufficiency of available evidence,
determination of whether the Angelo dela Cruz footage is subject to fair use is better left to the trial court where the
proceedings are currently pending.

GMA-7's rebroadcast of ABS-CBN's news footage without the latter's consent is not an issue. The mere act of
rebroadcasting without authority from the owner of the broadcast gives rise to the probability that a crime was
committed under the Intellectual Property Code.cralawlawlibrary

VII

Respondents cannot invoke the defense of good faith to argue that no probable cause exists.

Respondents argue that copyright infringement is malum in se, in that "[c]opying alone is not what is being prohibited,
but its injurious effect which consists in the lifting from the copyright owners' film or materials, that were the result of
the latter's creativity, work and productions and without authority, reproduced, sold and circulated for commercial use
to the detriment of the latter."127

Infringement under the Intellectual Property Code is malum prohibitum. The Intellectual Property Code is a special law.
Copyright is a statutory creation:chanroblesvirtuallawlibrary
Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted by the
statute, and not simply a pre-existing right regulated by the statute. Being a statutory grant, the rights are only such as
the statute confers, and may be obtained and enjoyed only with respect to the subjects and by the persons, and on
terms and conditions specified in the statute.128
The general rule is that acts punished under a special law are malum prohibitum.129 "An act which is declared malum
prohibitum, malice or criminal intent is completely immaterial."130

In contrast, crimes mala in se concern inherently immoral acts:chanroblesvirtuallawlibrary


Not every criminal act, however, involves moral turpitude. It is for this reason that "as to what crime involves moral
turpitude, is for the Supreme Court to determine". In resolving the foregoing question, the Court is guided by one of the
general rules that crimes mala in se involve moral turpitude, while crimes mala prohibita do not, the rationale of which
was set forth in "Zari v. Flores" to wit:chanroblesvirtuallawlibrary
It (moral turpitude) implies something immoral in itself, regardless of the fact that it is punishable by law or not. It must
not be merely mala prohibita, but the act itself must be inherently immoral. The doing of the act itself, and not its
prohibition by statute fixes the moral turpitude.Moral turpitude does not, however, include such acts as are not of
themselves immoral but whose illegality lies in their being positively prohibited. (Emphasis supplied)
[These] guidelines nonetheless proved short of providing a clear-cut solution, for inInternational Rice Research Institute
v. NLRC, the Court admitted that it cannot always be ascertained whether moral turpitude does or does not exist by
merely classifying a crime as malum in se or as malum prohibitum. There are crimes which are mala in se and yet but
rarely involve moral turpitude and there are crimes which involve moral turpitude and are mala prohibita only. In the
final analysis, whether or not a crime involves moral turpitude is ultimately a question of fact and frequently depends on
all the circumstances surrounding the violation of the statue.131 (Emphasis in the original)
"Implicit in the concept of mala in se is that of mens rea."132Mens rea is defined as "the nonphysical element which,
combined with the act of the accused, makes up the crime charged. Most frequently it is the criminal intent, or the guilty
mind[.]"133

Crimes mala in se presuppose that the person who did the felonious act had criminal intent to do so, while crimes mala
prohibita do not require knowledge or criminal intent:chanroblesvirtuallawlibrary
In the case of mala in se it is necessary, to constitute a punishable offense, for the person doing the act to have
knowledge of the nature of his act and to have a criminal intent; in the case of mala prohibita, unless such words as
"knowingly" and "willfully" are contained in the statute, neither knowledge nor criminal intent is necessary. In other
words, a person morally quite innocent and with every intention of being a law-abiding citizen becomes a criminal, and
liable to criminal penaltes, if he does an act prohibited by these statutes.134 (Emphasis supplied)
Hence, "[i]ntent to commit the crime and intent to perpetrate the act must be distinguished. A person may not have
consciously intended to commit a crime; but he did intend to commit an act, and that act is, by the very nature of things,
the crime itself[.]"135 When an act is prohibited by a special law, it is considered injurious to public welfare, and the
performance of the prohibited act is the crime itself.136

Volition, or intent to commit the act, is different from criminal intent. Volition or voluntariness refers to knowledge of
the act being done. On the other hand, criminal intent — which is different from motive, or the moving power for the
commission of the crime137 — refers to the state of mind beyond voluntariness. It is this intent that is being punished by
crimes mala in se.

Unlike other jurisdictions that require intent for a criminal prosecution of copyright infringement, the Philippines does
not statutorily support good faith as a defense. Other jurisdictions provide in their intellectual property codes or
relevant laws that mens rea, whether express or implied, is an element of criminal copyright infringement.138

In Canada, criminal offenses are categorized under three (3) kinds: "the full mens rea offence,meaning the accused's
actual or subjective state of mind has to be proved; strict liability offenceswhere no mens rea has to be proved but the
accused can avoid liability if he can prove he took all reasonable steps to avoid the particular event; [and] absolute
liability offences where Parliament has made it clear that guilt follows proof of the prescribed act only."139 Because of
the use of the word "knowingly" in Canada's Copyright Act, it has been held that copyright infringement is a full mens
reaoffense.140

In the United States, willful intent is required for criminal copyright infringement.141 Before the passage of the No
Electronic Theft Act, "civil copyright infringements were violations of criminal copyright laws only if a defendant willfully
infringed a copyright 'for purposes of commercial advantage or private financial gain.'"142 However, the No Electronic
Theft Act now allows criminal copyright infringement without the requirement of commercial gain. The infringing act
may or may not be for profit.143

There is a difference, however, between the required liability in civil copyright infringement and that in criminal
copyright infringement in the United States. Civil copyright infringement does not require culpability and employs a
strict liability regime144 where "lack of intention to infringe is not a defense to an action for infringement."145

In the Philippines, the Intellectual Property Code, as amended, provides for the prosecution of criminal actions for the
following violations of intellectual property rights: Repetition of Infringement of Patent (Section 84); Utility Model
(Section 108); Industrial Design (Section 119); Trademark Infringement (Section 155 in relation to Section 170); Unfair
Competition (Section 168 in relation to Section 170); False Designations of Origin, False Description or Representation
(Section 169.1 in relation to Section 170); infringement of copyright, moral rights, performers' rights, producers' rights,
and broadcasting rights (Section 177, 193, 203, 208 and 211 in relation to Section 217); and other violations of
intellectual property rights as may be defined by law.

The Intellectual Property Code requires strict liability for copyright infringement whether for a civil action or a criminal
prosecution; it does not require mens rea or culpa:146ChanRoblesVirtualawlibrary
SECTION 216. Remedies for Infringement. —

216.1. Any person infringing a right protected under this law shall be liable:

a. To an injunction restraining such infringement. The court may also order the defendant to desist from an
infringement, among others, to prevent the entry into the channels of commerce of imported goods that involve
an infringement, immediately after customs clearance of such goods.

b. Pay to the copyright proprietor or his assigns or heirs such actual damages, including legal costs and other
expenses, as he may have incurred due to the infringement as well as the profits the infringer may have made
due to such infringement, and in proving profits the plaintiff shall be required to prove sales only and the
defendant shall be required to prove every element of cost which he claims, or, in lieu of actual damages and
profits, such damages which to the court shall appear to be just and shall not be regarded as penalty.

c. Deliver under oath, for impounding during the pendency of the action, upon such terms and conditions as the
court may prescribe, sales invoices and other documents evidencing sales, all articles and their packaging
alleged to infringe a copyright and implements for making them.

d. Deliver under oath for destruction without any compensation all infringing copies or devices, as well as all
plates, molds, or other means for making such infringing copies as the court may order.

e. Such other terms and conditions, including the payment of moral and exemplary damages, which the court
may deem proper, wise and equitable and the destruction of infringing copies of the work even in the event of
acquittal in a criminal case.

216.2. In an infringement action, the court shall also have the power to order the seizure and impounding of any article
which may serve as evidence in the court proceedings. (Sec. 28. P.D. No. 49a)

SECTION 217, Criminal Penalties. —

217.1. Any person infringing any right secured by provisions of Part IV of this Act or aiding or abetting such
infringement shall be guilty of a crime punishable by:

a. Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand pesos (P50,000) to One
hundred fifty thousand pesos (P150,000) for the first offense.

b. Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from One hundred fifty
thousand pesos (P150,000) to Five hundred thousand pesos (P500,000) for the second offense.

c. Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from Five hundred thousand
pesos (P500,000) to One million five hundred thousand pesos (P1,500,000) for the third and subsequent
offenses.

d. In all cases, subsidiary imprisonment in cases of insolvency.

217.2. In determining the number of years of imprisonment and the amount of fine, the court shall consider the value of
the infringing materials that the defendant has produced or manufactured and the damage that the copyright owner has
suffered by reason of the infringement.

217.3. Any person who at the time when copyright subsists in a work has in his possession an article which he knows, or
ought to know, to be an infringing copy of the work for the purpose of:

a. Selling, letting for hire, or by way of trade offering or exposing for sale, or hire, the article;

b. Distributing the article for purpose of trade, or for any other purpose to an extent that will prejudice the rights
of the copyright owner in the work; or

c. Trade exhibit of the article in public, shall be guilty of an offense and shall be liable on conviction to
imprisonment and fine as above mentioned. (Sec. 29, P.D. No. 49a) (Emphasis supplied)

The law is clear. Inasmuch as there is wisdom in prioritizing the flow and exchange of ideas as opposed to rewarding the
creator, it is the plain reading of the law in conjunction with the actions of the legislature to which we defer. We have
continuously "recognized the power of the legislature . . . to forbid certain acts in a limited class of cases and to make
their commission criminal without regard to the intent of the doer. Such legislative enactments are based on the
experience that repressive measures which depend for their efficiency upon proof of the dealer's knowledge or of his
intent are of little use and rarely accomplish their purposes."147

Respondents argue that live broadcast of news requires a different treatment in terms of good faith, intent, and
knowledge to commit infringement. To argue this point, they rely on the differences of the media used in Habana et al.
v. Robles, Columbia Pictures v. Court of Appeals, and this case:chanroblesvirtuallawlibrary
Petitioner ABS-CBN argues that lack of notice that the Angelo dela Cruz was under embargo is not a defense in copyright
infringement and cites the case of Columbia Pictures vs. Court of Appeals and Habana et al. vs. Robles (310 SCRA 511).
However, these cases refer to film and literary work where obviously there is "copying" from an existing material so
that the copier knew that he is copying from an existing material not owned by him. But, how could respondents know
that what they are "copying was not [theirs]" when they were not copying but merely receiving live video feed from
Reuters and CNN which they aired? What they knew and what they aired was the Reuters live video feed and the CNN
feed which GMA-7 is authorized to carry in its news broadcast, it being a subscriber of these companies[.]

It is apt to stress that the subject of the alleged copyright infringement is not a film or literary work but live broadcast of
news footage. In a film or literary work, the infringer is confronted face to face with the material he is allegedly copying
and therefore knows, or is presumed to know, that what he is copying is owned by another. Upon the other hand, in live
broadcast, the alleged infringer is not confronted with the fact that the material he airs or re-broadcasts is owned by
another, and therefore, he cannot be charged of knowledge of ownership of the material by another. This specially
obtains in the Angelo dela Cruz news footage which GMA-7 received from Reuters and CNN. Reuters and CNN were
beaming live videos from the coverage which GMA-7 received as a subscriber and, in the exercise of its rights as a
subscriber, GMA-7 picked up the live video and simultaneously re-broadcast it. In simultaneously broadcasting the live
video footage of Reuters, GMA-7 did not copy the video footage of petitioner ABS-CBN[.]148 (Emphasis in the original)
Respondents' arguments must fail.

Respondents are involved and experienced in the broadcasting business. They knew that there would be consequences
in carrying A.BS-CBN's footage in their broadcast. That is why GMA-7 allegedly cut the feed from Reuters upon seeing
ABS-CBN's logo and reporter. To admit a different treatment for broadcasts would mean abandonment of a
broadcasting organization's minimum rights, including copyright on the broadcast material and the right against
unauthorized re broadcast of copyrighted material. The nature of broadcast technology is precisely why related or
neighboring rights were created and developed. Carving out an exception for live broadcasts would go against our
commitments under relevant international treaties and agreements, which provide for the same minimum rights.149

Contrary to respondents' assertion, this court in Habana,150 reiterating the ruling in Columbia Pictures,151 ruled that lack
of knowledge of infringement is not a valid defense. Habana and Columbia Pictures may have different factual scenarios
from this case, but their rulings on copyright infringement are analogous. In Habana, petitioners were the authors and
copyright owners of English textbooks and workbooks. The case was anchored on the protection of literary and artistic
creations such as books. In Columbia Pictures, video tapes of copyrighted films were the subject of the copyright
infringement suit.

In Habana, knowledge of the infringement is presumed when the infringer commits the prohibited
act:chanroblesvirtuallawlibrary
The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its gravity by an
appropriate understanding thereof. Infringement of a copyright is a trespass on a private domain owned and occupied
by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the doing by any person, without the consent of the owner of the
copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright.

. . . .

A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such cases, did not know
whether or not he was infringing any copyright; he at least knew that what he was copying was not his, and he copied at
his peril.
. . . .

In cases of infringement, copying alone is not what is prohibited. The copying must produce an "injurious effect". Here,
the injury consists in that respondent Robles lifted from petitioners' book materials that were the result of the latter's
research work and compilation and misrepresented them as her own. She circulated the book DEP for commercial use
and did not acknowledge petitioners as her source.152 (Emphasis supplied)
Habana and Columbia Pictures did not require knowledge of the infringement to constitute a violation of the copyright.
One does not need to know that he or she is copying a work without consent to violate copyright law. Notice of fact of
the embargo from Reuters or CNN is not material to find probable cause that respondents committed infringement.
Knowledge of infringement is only material when the person is charged of aiding and abetting a copyright infringement
under Section 217 of the Intellectual Property Code.153

We look at the purpose of copyright in relation to criminal prosecutions requiring willfulness:chanroblesvirtuallawlibrary


Most importantly, in defining the contours of what it means to willfully infringe copyright for purposes of criminal
liability, the courts should remember the ultimate aim of copyright. Copyright is not primarily about providing the
strongest possible protection for copyright owners so that they have the highest possible incentive to create more
works. The control given to copyright owners is only a means to an end: the promotion of knowledge and learning.
Achieving that underlying goal of copyright law also requires access to copyrighted works and it requires permitting
certain kinds of uses of copyrighted works without the permission of the copyright owner. While a particular defendant
may appear to be deserving of criminal sanctions, the standard for determining willfulness should be set with reference
to the larger goals of copyright embodied in the Constitution and the history of copyright in this country.154
In addition, "[t]he essence of intellectual piracy should be essayed in conceptual terms in order to underscore its gravity
by an appropriate understanding thereof. Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy,
which is a synonymous term in this connection, consists in the doing by any person, without the consent of the owner of
the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright."155

Intellectual property rights, such as copyright and the neighboring right against rebroadcasting, establish an artificial and
limited monopoly to reward creativity. Without these legally enforceable rights, creators will have extreme difficulty
recovering their costs and capturing the surplus or profit of their works as reflected in their markets. This, in turn, is
based on the theory that the possibility of gain due to creative work creates an incentive which may improve efficiency
or simply enhance consumer welfare or utility. More creativity redounds to the public good.

These, however, depend on the certainty of enforcement. Creativity, by its very nature, is vulnerable to the free rider
problem. It is easily replicated despite the costs to and efforts of the original creator. The more useful the creation is in
the market, the greater the propensity that it will be copied. The most creative and inventive individuals are usually
those who are unable to recover on their creations.

Arguments against strict liability presuppose that the Philippines has a social, historical, and economic climate similar to
those of Western jurisdictions. As it stands, there is a current need to strengthen intellectual property protection.

Thus, unless clearly provided in the law, offenses involving infringement of copyright protections should be
considered malum prohibitum. It is the act of infringement, not the intent, which causes the damage. To require or
assume the need to prove intent defeats the purpose of intellectual property protection.

Nevertheless, proof beyond reasonable doubt is still the standard for criminal prosecutions under the Intellectual
Property Code.cralawlawlibrary

VIII

Respondents argue that GMA-7's officers and employees cannot be held liable for infringement under the Intellectual
Property Code since it does not expressly provide direct liability of the corporate officers. They explain that "(i)
a corporation may be charged and prosecuted for a crime where the penalty is fine or both imprisonment and fine, and
if found guilty, may be fined; or (ii) a corporation may commit a crime but if the statute prescribes the penalty therefore
to be suffered by the corporate officers, directors or employees or other persons, the latter shall be responsible for the
offense."156

Section 217 of the Intellectual Property Code states that "any person" may be found guilty of infringement. It also
imposes the penalty of both imprisonment and fine:chanroblesvirtuallawlibrary
Section 217. Criminal Penalties. - 217.1. Any person infringing any right secured by provisions of Part IV of this Act or
aiding or abetting such infringement shall be guilty of a crime punishable by:
(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand pesos (P50,000) to One
hundred fifty thousand pesos (P150,000) for the first offense.

(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from One hundred fifty
thousand pesos (P150,000) to Five hundred thousand pesos (P500,000) for the second offense.

(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from five hundred thousand
pesos (P500,000) to One million five hundred thousand pesos (P1,500,000) for the third and subsequent offenses.

(d) In all cases, subsidiary imprisonment in cases of insolvency. (Emphasis supplied)


Corporations have separate and distinct personalities from their officers or directors.157 This court has ruled that
corporate officers and/or agents may be held individually liable for a crime committed under the Intellectual Property
Code:158ChanRoblesVirtualawlibrary
Petitioners, being corporate officers and/or directors, through whose act, default or omission the corporation commits a
crime, may themselves be individually held answerable for the crime. . . . The existence of the corporate entity does not
shield from prosecution the corporate agent who knowingly and intentionally caused the corporation to commit a crime.
Thus, petitioners cannot hide behind the cloak of the separate corporate personality of the corporation to escape
criminal liability. A corporate officer cannot protect himself behind a corporation where he is the actual, present and
efficient actor.159
However, the criminal liability of a. corporation's officers or employees stems from their active participation in the
commission of the wrongful act:chanroblesvirtuallawlibrary
The principle applies whether or not the crime requires the consciousness of wrongdoing. It applies to those corporate
agents who themselves commit the crime and to those, who, by virtue of their managerial positions or other similar
relation to the corporation, could be deemed responsible for its commission, if by virtue of their relationship to the
corporation, they had the power to prevent the act. Moreover, all parties active in promoting a crime, whether agents or
not, are principals. Whether such officers or employees are benefited by their delictual acts is not a touchstone of their
criminal liability. Benefit is not an operative fact. 160 (Emphasis supplied)
An accused's participation in criminal acts involving violations of intellectual property rights is the subject of allegation
and proof. The showing that the accused did the acts or contributed in a meaningful way in the commission of the
infringements is certainly different from the argument of lack of intent or good faith. Active participation requires a
showing of overt physical acts or intention to commit such acts. Intent or good faith, on the other hand, are inferences
from acts proven to have been or not been committed.

We find that the Department of Justice committed grave abuse of discretion when it resolved to file the Information
against respondents despite lack of proof of their actual participation in the alleged crime.

Ordering the inclusion of respondents Gozon, GMA-7 President; Duavit, Jr., Executive Vice-President; Flores, Vice-
President for News and Public Affairs; and Soho, Director for News, as respondents, Secretary Agra overturned the City
Prosecutor's finding that only respondents Dela Peña-Reyes and Manalastas are responsible for the crime charged due
to their duties.161 The Agra Resolution reads:chanroblesvirtuallawlibrary
Thus, from the very nature of the offense and the penalty involved, it is necessary that GMA-7's directors, officers,
employees or other officers thereof responsible for the offense shall be charged and penalized for violation of the
Sections 177 and 211 of Republic Act No. 8293. In their complaint for libel, respondents Felipe L Gozon, Gilberto R.
Duavit, Jr., Marissa L. Flores, Jessica A. Soho, Grace Dela Pena-Reyes, John Oliver T. Manalastas felt they were aggrieved
because they were "in charge of the management, operations and production of news and public affairs programs of the
network" (GMA-7). This is clearly an admission on respondents' part. Of course, respondents may argue they have no
intention to infringe the copyright of ABS-CBN; that they acted in good faith; and that they did not directly cause the
airing of the subject footage, but again this is preliminary investigation and what is required is simply probable cause.
Besides, these contentions can best be addressed in the course of trial.162 (Citation omitted)
In contrast, the Office of the City Prosecutor, in the Resolution dated December 3, 2004, found that respondents Gozon,
Duavit, Jr., Flores, and Soho did not have active participation in the commission of the crime
charged:chanroblesvirtuallawlibrary
This Office, however, does not subscribe to the view that respondents Atty. Felipe Gozon, Gilberto Duavit, Marissa
Flores and Jessica Soho should be held liable for the said offense. Complainant failed to present clear and convincing
evidence that the said respondents conspired with Reyes and Manalastas. No evidence was adduced to prove that these
respondents had an active participation in the actual commission of the copyright infringement or they exercised their
moral ascendancy over Reyes and Manalastas in airing the said footage. It must be stressed that, conspiracy must be
established by positive and conclusive evidence. It must be shown to exist as clearly and convincingly as the commission
of the offense itself.163 (Emphasis supplied, citations omitted)
The City Prosecutor found respondents Dela Peña-Reyes and Manalastas liable due to the nature of their work and
responsibilities. He found that:chanroblesvirtuallawlibrary
[t]his Office however finds respondents Grace Déla Peña-Reyes and John Oliver T. Manalastas liable for copyright
infringement penalized under Republic Act No. 8293. It is undisputed that complainant ABS-CBN holds the exclusive
ownership and copyright over the "Angelo [d]ela Cruz news footage". Hence, any airing and re-broadcast of the said
footage without any consent and authority from ABS-CBN will be held as an infringement and violation of the
intellectual property rights of the latter. Respondents Grace Dela Peña-Reyes as the Head of the News Operation and
John Oliver T. Manalastas as the Program Manager cannot escape liability since the news control room was under their
direct control and supervision. Clearly, they must have been aware that the said footage coming from Reuters or CNN has
a "No Access Philippines" advisory or embargo thus cannot be re-broadcast. We find no merit to the defense of ignorance
interposed by the respondents. It is simply contrary to human experience and logic that experienced employees of an
established broadcasting network would be remiss in their duty in ascertaining if the said footage has an
embargo.164 (Emphasis supplied)
We agree with the findings as to respondents Dela Peña-Reyes and Manalastas. Both respondents committed acts that
promoted infringement of ABS-CBN's footage. We note that embargoes are common occurrences in and between news
agencies and/or broadcast organizations.165 Under its Operations Guide, Reuters has two (2) types of embargoes:
transmission embargo and publication embargo.166 Under ABS-CBN's service contract with Reuters, Reuters will embargo
any content contributed by ABS-CBN from other broadcast subscribers within the same geographical
location:chanroblesvirtuallawlibrary
4a. Contributed Content

You agree to supply us at our request with news and sports news stones broadcast on the Client Service of up to three
(3) minutes each for use in our Services on a non-exclusive basis and at a cost of US$300.00 (Three Hundred United
States Dollars) per story. In respect of such items we agree to embargo them against use by other broadcast subscribers
in the Territory and confirm we will observe all other conditions of usage regarding Contributed Content, as specified in
Section 2.5 of the Reuters Business Principles for Television Services. For the purposes of clarification, any geographical
restriction imposed by you on your use of Contributed Content will not prevent us or our clients from including such
Contributed Content in online transmission services including the internet. We acknowledge Contributed Content is your
copyright and we will not acquire any intellectual property rights in the Contributed Content.167(Emphasis supplied)
Respondents Dela Peña-Reyes and Manalastas merely denied receiving the advisory sent by Reuters to its clients,
including GMA-7. As in the records, the advisory reads:chanroblesvirtuallawlibrary
ADVISORY - - +++LIVE COVER PLANS+++
PHILIPPINES: HOSTAGE RETURN

* *ATTENTION ALL CLIENTS**

PLEASE BE ADVISED OF THE FOLLOWING LIVE COVER PLANNED FOR THURSDAY, JULY 22:
. . . .

SOURCE: ABS-CBN
TV AND WEB RESTRICTIONS: NO ACCESS PHILIPPINES.168
There is probable cause that respondents Dela Peña-Reyes and Manalastas directly committed copyright infringement of
ABS-CBN's news footage to warrant piercing of the corporate veil. They are responsible in airing the embargoed Angelo
dela Cruz footage. They could have prevented the act of infringement had they been diligent in their functions as Head
of News Operations and Program Manager.

Secretary Agra, however, committed grave abuse of discretion when he ordered the filing of the Information against all
respondents despite the erroneous piercing of the corporate veil. Respondents Gozon, Duavit, Jr., Flores, and Soho
cannot be held liable for the criminal liability of the corporation.

Mere membership in the Board or being President per se does not mean knowledge, approval, and participation in the
act alleged as criminal. There must be a showing of active participation, not simply a constructive one.

Under principles of criminal law, the principals of a crime are those "who take a direct part in the execution of the act;
[t]hose who directly force or induce others to commit it; [or] [t]hose who cooperate in the commission of the offense by
another act without which it would not have been accomplished."169 There is conspiracy "when two or more persons
come to an agreement concerning the commission of a felony and decide to commit it":170ChanRoblesVirtualawlibrary
Conspiracy is not presumed. Like the physical acts constituting the crime itself, the elements of conspiracy must be
proven beyond reasonable doubt. While conspiracy need not be established by direct evidence, for it may be inferred
from the conduct of the accused before, during and after the commission of the crime, all taken together, however, the
evidence must
be strong enough to show the community of criminal design. For conspiracy to exist, it is essential that there must be a
conscious design to commit an offense. Conspiracy is the product of intentionality on the part of the cohorts.

It is necessary that a conspirator should have performed some overt act as a direct or indirect contribution to the
execution of the crime committed. The overt act may consist of active participation in the actual commission of the crime
itself or it may consist of moral assistance to his co-conspirators by being present at the commission of the crime or by
exerting moral ascendancy over the other co-conspirators[.]171 (Emphasis supplied, citations omitted)
In sum, the trial court erred in failing to resume the proceedings after the designated period. The Court of Appeals erred
when it held that Secretary Agra committed errors of jurisdiction despite its own pronouncement that ABS-CBN is the
owner of the copyright on the news footage. News should be differentiated from expression of the news, particularly
when the issue involves rebroadcast of news footage. The Court of Appeals also erroneously held that good faith, as.
well as lack of knowledge of infringement, is a defense against criminal prosecution for copyright and neighboring rights
infringement. In its current form, the Intellectual Property Code is malum prohibitum and prescribes a strict liability for
copyright infringement. Good faith, lack of knowledge of the copyright, or lack of intent to infringe is not a defense
against copyright infringement. Copyright, however, is subject to the rules of fair use and will be judged on a case-to-
case basis. Finding probable cause includes a determination of the defendant's active participation, particularly when
the corporate veil is pierced in cases involving a corporation's criminal liability.cralawred

WHEREFORE, the Petition is partially GRANTED. The Department of Justice Resolution dated June 29, 2010 ordering the
filing of the Information is hereby REINSTATED as to respondents Grace Dela Peña-Reyes and John Oliver T. Manalastas.
Branch 93 of the Regional Trial Court of Quezon City is directed to continue with the proceedings in Criminal Case No. Q-
04-131533.

SO ORDERED.chanroblesvirtuallawlibrary
Mazer v. Stein, 347 U.S. 201 (1954)

No. 228

Argued December 3, 1953

Decided March 8, 1954

347 U.S. 201

Syllabus

Respondents are engaged in the manufacture and sale of electric lamps. One of the respondents created original works
of sculpture, from the models of which china statuettes were made. The statuettes were used as bases for fully
equipped electric lamps, which respondents sold. Respondents submitted the statuettes, without any lamp components
added, for registration under the copyright law as "works of art" or reproductions thereof.

Held: the statuettes were copyrightable. Pp. 347 U. S. 202-219.

(a) The successive Copyright Acts, the legislative history of the 1909 Act, and the practice of the Copyright Office show
that "works of art" and "reproductions of works of art" were intended by Congress to include the authority to copyright
such statuettes. Pp. 347 U. S. 208-214.

(b) That the statuettes, fitted as lamps or unfitted, may be patentable does not bar their copyright as works of art.
Pp. 347 U. S. 215-217.

(c) The intended or actual use in industry of an article eligible for copyright does not bar or invalidate its registration.
P. 347 U. S. 218.

(d) The subsequent registration of a work of art published as an element in a manufactured article is not a misuse of the
copyright. Pp. 347 U. S. 218-219.

204 F.2d 472 affirmed.

Respondents sued petitioners for copyright infringement, and the District Court dismissed the complaint. 111 F.Supp.
359. The Court of Appeals reversed. 204 F.2d 472. This Court granted certiorari. 346 U.S. 811. Affirmed,p. 347 U. S. 219.
MASON VS MONTOMERY DATA INC

Hodge E. MASON and Hodge E. Mason Engineers, Inc., Plaintiffs,


v.
MONTGOMERY DATA, INC., et al., Defendants.
Civ. A. No. H-88-3135.

United States District Court, S.D. Texas, Houston Division.


June 1, 1990.

*1283 Baker & Botts, Martin L. McGregor, Houston, Tex., for plaintiffs.

James B. Gambrell and Marc L. Delflache, Houston, Tex., for Montgomery Data.

Lionel M. Schooler, Houston, Tex., for Landata, Inc. of Houston.

*1284 MEMORANDUM OPINION

HOYT, District Judge.

Plaintiffs Hodge E. Mason and Hodge E. Mason Engineers, Inc. have filed suit contending copyright infringement
pursuant to Copyright Act of 1976, as amended, 17 U.S.C. §§ 101-914 (1977 and Supp.1990) (hereinafter referred to as
1976 Act) and seeking statutory damages pursuant to sec. 504(c) of the 1976 Act. Plaintiffs contend that defendants
infringed 234 of their copyrights and are seeking damages in the amount of $11,700,000.

Defendants have moved for partial summary judgment. Three motions are before the Court (instrument numbers 44,
46, and 63). The three motions present only two issues: 1) whether the 1987 registrations of copyrights in map sheets
first published in 1968 and during the 1970's would bar recovery of statutory damages and 2) whether statutory
damages are recoverable for only two infringements because the 234 separate registrations are in fact part of two
compilations. These two issues will be referred to as the first motion and second motion, respectively. Having
considered the motions and responses thereto, the record on file, and the applicable law, the Court is of the opinion
that partial summary judgment should be granted as to the first motion, rendering the second motion moot.

FACTUAL BACKGROUND

In 1967, Plaintiffs began creating land ownership maps for Montgomery County, Texas based upon United States
Geological Survey maps and using title data obtained from public records as well as data supplied by an agreement with
Conroe Title & Abstract Co., Inc., a defendant herein. By July 1969, 118 individual map sheets that Plaintiffs created were
published with copyright notices. The map sheets contain identification, location, and relative position, size, and shape
of land grants and real property in Montgomery County and representations of survey lines, tract boundaries,
identification of deeds, abstract numbers, and other information that was allegedly Plaintiffs' original work of
authorship. Plaintiffs made revisions to the original map sheets, and 115 revised map sheets were published with
copyright notices during the period from 1970 to 1980.

Plaintiffs contend that Defendants made an unauthorized derivative edition of the original maps by cutting and pasting
Plaintiffs' copyrighted map sheets into new configurations. The Defendants then copied the surveys, tract boundaries,
topography, and other features from Plaintiffs' copyrighted maps on transparent overlays. Defendant Landata, Inc. of
Houston ("Landata") had bought a set of Plaintiffs' pre-registered map sheets in a public store for use without any
constraints. Landata then did its own updating of the map sheets for distribution by Defendant Montgomery Data, Inc.
("MDI") to its subscribers. Plaintiffs learned of this activity in September 1985, when Landata sought permission, which
was denied, to use the copyrighted map sheets in a computer title plant to be made available to other title companies.

Registration of Plaintiffs' copyright in one original map sheet was filed in October 1968 (copyright certificate F 47925);
copyrights in the remaining 117 original map sheets were registered in October 1987. Registrations of the copyrights in
the 115 revised maps were filed in October, November, and December of 1987.

SUMMARY JUDGMENT

Summary judgment is appropriate when there is evidence on file that specifically shows that there is no genuine issue as
to any material fact and that the movant is entitled to judgment as a matter of law. F.R.Civ.P. 56(c);Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). Resolution of the two issues presented depends on
this Court's interpretation of the applicable provisions of the 1976 Act. It is the function of the courts to interpret
statutes in a way that effectuates the disclosed intent of Congress. Sutton v. United States, 819 F.2d 1289, 1292 (5th Cir.
1987). In determining legislative intent, consideration is given to the plain wording of the statute as well as to the
language and design of the statute*1285 as a whole. See Nupulse, Inc. v. Schlueter Co., 853 F.2d 545, 548-49 (7th
Cir.1988) (citing K-Mart Corp. v. Cartier, Inc., 486 U.S. 281, 108 S. Ct. 1811, 100 L. Ed. 2d 313 (1988)). If the intent of
Congress is not disclosed on the face of the statute, and the intent appears ambiguous, then legislative history of the
statute must be considered. American Trucking Associations, Inc. v. Interstate Commerce Commission, 659 F.2d 452, 459
(5th Cir.1981), cert. denied, 460 U.S. 1022, 103 S. Ct. 1272, 75 L. Ed. 2d 493 (1983).

It is clear that legislative history and statutory interpretation are questions of law that are properly decided on a motion
for summary judgment. Saroyan v. William Saroyan Foundation, 675 F. Supp. 843, 844 (S.D.N.Y.1987), aff'd, 862 F.2d 304
(2d Cir.1988). See Tarka v. Franklin, 891 F.2d 102, 105 (5th Cir.1989);Oklahoma ex rel. Department of Human Services v.
Weinberger, 741 F.2d 290, 291 (10th Cir.1983).

Statutory damages under the 1976 Act are recoverable pursuant to sections 504(c) and 412(2). Section 504(c) (1)
provides as follows:
[T]he copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages
and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for
which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a
sum of not less than $500 or more than $20,000 as the court considers just. For the purpose of this subsection, all the
parts of a compilation or derivative work constitute one work.

Section 412(2) provides that neither statutory damages nor attorney's fees are available for "any infringement of
copyright commenced after first publication of the work and before the effective date of its registration, unless such
registration is made within three months after the first publication of the work."

BELATED REGISTRATIONS

The issue in the first motion is whether Plaintiffs' late registrations would bar recovery of statutory damages, if there is
an ultimate finding of infringement. Defendants assert that pursuant to sec. 412(2) of the 1976 Act, there is no
entitlement to statutory damages as provided in sec. 504(c) for infringements of 233 of the copyrights because
registration did not take place until more than three months after their publication. The plain language of sec. 412(2)
means that no statutory damages would be available, in the instant case, because infringement began after the various
publication dates in 1968 and in the 1970's but before registration in 1987. It is clear that the registrations did not occur
until more than three months after the first publication.

In addition to the plain language of sec. 412(2) of the 1976 Act, Defendants rely on the holding in Business Trends
Analysts, Inc. v. Freedonia Group, Inc.,887 F.2d 399 (2d Cir.1989). Where a work is not registered until after the
infringement, the copyright holder is not eligible for statutory damages and is limited to actual damages and profits
under sec. 504(b) of the 1976 Act. Id.at 404. Furthermore, where the alleged infringing activity commences prior to the
registration of a copyright, the copyright claimant may not claim statutory damages for continued post-registration
activity. See Singh v. Famous Overseas, Inc., 680 F. Supp. 533, 536 (E.D.N.Y.1988); Johnson v. University of Virginia, 606 F.
Supp. 321, 325 (W.D.Va. 1985). A "new" or "separate" basis for the award of statutory damages is created, however,
only where there is a difference between pre- and post-registration infringing activities. Whelan Associates, Inc. v.
Jaslow Dental Laboratory, Inc., 609 F. Supp. 1325, 1331 (E.D.Pa.1985), aff'd on other grounds, 797 F.2d 1222 (3d Cir.
1986), cert. denied, 479 U.S. 1031, 107 S. Ct. 877, 93 L. Ed. 2d 831 (1987).

Plaintiffs concede that no statutory damages can be awarded for pre-registration infringements, but they contend that a
distinction exists between pre- and post-registration *1286 infringements. Plaintiffs accuse Defendants of revising,
copying, and distributing overlays in 1985, 1988, and 1989. Because these activities were not of a continuous nature,
Plaintiffs urge application of the doctrine of multiple infringements. Under this doctrine, where a party has committed
many widely separated, distinct acts of infringement commencing after registration of the copyrights, then statutory
damages must be awarded if Plaintiff so elects. In arguing for the application of this doctrine, Plaintiffs rely on a number
of cases decided under the Copyright Act, ch. 320, 35 Stat. 1075 (1909) (current version at 17 U.S.C. § 101et seq. (1977))
(hereinafter 1909 Act). See e.g., Westermann v. Dispatch Printing Co., 249 U.S. 100, 39 S. Ct. 194, 63 L. Ed. 499
(1918); Universal Statuary Corp. v. Gaines, 310 F.2d 647 (5th Cir.1962). In urging application of the 1909 Act, which did
not contain sec. 412(2), rather than the 1976 Act, Plaintiffs argue that the doctrine of multiple infringements makes
better sense because the copyright holder is not penalized for continued infringement following registration.

Plaintiffs would have us believe that because sec. 412(2) does not mention post-registration infringements, the statute is
ambiguous. The plain language of the statute does not reveal that Congress intended to distinguish between pre- and
post-registration infringements. Where there is an allegation of ambiguity in a statute, one looks also to the legislative
history but does not resort to previous, superseded legislation. This Court must therefore examine the legislative history
of the applicable statute.

When one considers the legislative history behind sec. 412(2), the doctrine of multiple infringements does not make
better sense. Although copyright registration is not required under the 1976 Act, Congress clearly recognized a need for
registration and sought to encourage prompt registration by denying statutory damages in cases of belated registration.
Moreover, it is clear that Congress did not intend for the doctrine of multiple infringements to be applicable in cases
arising under the 1976 Act. By enacting sec. 412, Congress sought to establish registration as a pre-requisite to the
extraordinary remedy of statutory damages and provided that this remedy is to be denied where infringement
commences before registration. The only exception Congress provided was to allow for a grace period to take care of
newsworthy or suddenly popular works which could be infringed before the copyright owner has a reasonable
opportunity to register his claim. H.R.Rep. 1476, 94th Con.2d Sess., reprinted in 1976 U.S.Code Cong. & Admin.News
5659, 5774.

Taking Plaintiffs' argument to its logical conclusion would mean another exception would be needed by inserting the
words "and continues after registration" to sec. 412(2). Considering that Congress was seeking to provide an incentive,
in the form of statutory damages, for prompt registration, this Court cannot discern a need for the language "and
continues after registration". Interpreting "commencement of infringement" in a way most in keeping with
congressional intent is the duty of this Court. See Sutton, 819 F.2d at 1295. This Court, therefore, interprets the words
"commencement of infringement" to mean the first act of infringement in a series of on-going separate
infringements. See Whelan, 609 F. Supp. at 1331. In the instant case, a new copyright infringement has not commenced
each time defendants have used any of the map sheets.

Plaintiffs' arguments are not acceptable, because Defendants are accused of committing the same activity each time, for
the same purpose, and using the same copyrighted material. The acts of alleged infringement clearly constitute a series
of on-going separate infringements, with the first act occurring before registration, with registration occurring more
than three months after first publication. In the Singh, Johnson, and Whelan cases, supra,defendants committed
infringements before registration; in the case at bar, defendants allegedly infringed also before registration. This Court
agrees with the reasoning expressed in those cases that there *1287 is no incentive to register early if the owner may
obtain statutory damages for acts of infringement continuing after belated registration.
Plaintiffs further argue that the copyright owner is penalized and the infringer is favored by application of the 1976 Act.
The penalty, however, is imposed by delayed registration and the copyright owner penalizes himself by not promptly
making a public record of his copyright claim. The copyright holder is still permitted, however, to recover actual
damages plus any applicable profits not used as a measure of damages. Sec. 504(b), 1976 Act. Plaintiff has filed this
lawsuit pursuant to the 1976 Act and it is clearly the applicable statute; it is curious, however, that Plaintiffs now seek
application of the 1909 Act. When considering the legislative history as set forth in H.R.Rep. 1476 and the reasoning
already set forth on this issue in other districts, Plaintiffs' position is totally untenable.

Plaintiffs first became aware of Defendants' alleged infringement in 1985, but Plaintiffs did not register their map sheets
until 1987 even though they had been published more than 8 years before registration. Plaintiffs are therefore not
entitled to statutory damages for any continued infringement, by Defendants herein, because of the late registrations of
their copyrights. The first motion should be granted.

TWO COMPILATIONS

In the second motion, Defendants contend that statutory damages are recoverable for only two infringements, because
the 234 registrations are part of two compilations. This motion is moot because of the Court's ruling on the first motion
that Plaintiffs are not entitled to statutory damages due to the belated registrations.

Defendants contend that Plaintiffs published one compilation, consisting of 118 registrations, in 1968 and a second
compilation, consisting of 115 registrations, in 1972. If this Court were to find that there were indeed two compilations,
statutory damages would not be allowed because the compilations were published and infringements commenced
before registration. On the other hand, if this Court were to find that Defendants would be liable for 234 infringements,
an award of statutory damages could only be imposed for infringement of the one registration made at the time of first
publication.

CONCLUSION

It is the finding of this Court that upon proof of infringement, Plaintiffs may be entitled to statutory damages for the one
map sheet registered in 1968 (copyright certificate F 47925). As for the remaining 233 registrations, upon proof of
infringement, Plaintiffs' recovery will be limited to actual damages and Defendants' profits.

It is therefore ORDERED that the first motion for partial summary judgment (instrument numbers 44 and 46) be, and the
same is hereby, GRANTED. The second motion (instrument number 63) is MOOT
BURROW- GILES LITOGRAPHIC VS SARONY

United States Supreme Court


BURROW-GILES LITHOGRAPHIC CO. v. SARONY, (1884)
No. 18
Argued: Decided: March 17, 1884

BRIEF: Napoleon Sarony, the plaintiff in this case, was America's most famous portrait photographer in the latter half of
the 19th Century. Before picking up the camera, he was already well-known as an accomplished lithographer.

Oscar Wilde is one of the most famous Irish authors of all time, renowned for works like The Picture of Dorian
Grayand The Importance of Being Earnest. In the early 1880's, before these books were even published, Wilde had
already become famous for his public lectures. In 1882, Wilde crossed the U.S. on a wildly successful speaking tour.
During this time, he posed for the infamous photo. (Another picture from the same shoot can be seen here.)

A retail store in New York City, Ehrich Brothers, commissioned Burrow-Giles Lithographic Co. to print an
advertisement for hats, in which it used this photo. Over 85,000 copies of the ad were made by the time Sarony brought
the publishers to court.

The Supreme Court's opinion firmly resolved the question of whether a photograph could be copyrighted. It is unknown
if Wilde ever knew of his involvement in one of the biggest copyright cases in United States history. Unfortunately, years
later, Wilde was publicly disgraced after being convicted and jailed for "gross indecency" (i.e. having a homosexual
relationship). After being released from prison, he died penniless in a Paris hotel.

[111 U.S. 53, 54] David Calman, for plaintiff in error.

Augustus T. Gurlitz, for defendant in error.

MILLER, J.

This is a writ of error to the circuit court for the southern district of New York. Plaintiff is a lithographer, and defendant a
photographer, with large business in those lines in the city of New York. The suit was commenced by an action at law in
which Sarony was plaintiff and the lithographic company was defendant, the plaintiff charging the defendant with
violating his copyright in regard to a photograph, the title of which is 'Oscar Wilde, No. 18.' A jury being waived, the
court made a finding of facts on which a judgment in favor of the plaintiff was rendered for the sum of $600 for the
plates and 85,000 copies sold and exposed to sale, and $10 for copies found in his possession, as penalties under section
4965 of the Revised Statutes. Among the finding of facts made by the court the following presents the principal question
raised by the assignment of errors in the case:

'(3) That the plaintiff, about the month of January, 1882, under an agreement with Oscar Wilde, became and was the
author, inventor, designer, and proprietor of the photograph in suit, the title of which is 'Oscar Wilde, No. 18,' being the
number used to designate this particular photograph and of the negative thereof; that the same is a useful, new,
harmonious, characteristic, and graceful picture, and that said plaintiff made the same at his place of business in said
city of New York, and within the United States, entirely from his own [111 U.S. 53, 55] original mental conception, to
which he gave visible form by posing the said Oscar Wilde in front of the camera, selecting and arranging the costume,
draperies, and other various accessories in said photograph, arranging the subject so as to present graceful outlines,
arranging and disposing the light and shade, suggesting and evoking the desired expression, and from such disposition,
arrangement, or representation, made entirely by the plaintiff, he produced the picture in suit, Exhibit A, April 14, 1882,
and that the terms 'author,' 'inventor,' and 'designer,' as used in the art of photography and in the complaint, mean the
person who so produced the photograph.'

Other findings leave no doubt that plaintiff had taken all the steps required by the act of congress to obtain copyright of
this photograph, and section 4952 names photographs, among other things, for which the author, inventor, or designer
may obtain copyright, which is to secure him the sole privilege of reprinting, publishing, copying, and vending the same.
That defendant is liable, under that section and section 4965, there can be no question if those sections are valid as they
relate to photographs.

Accordingly, the two assignments of error in this court by plaintiff in error are: (1) That the court below decided that
congress had and has the constitutional right to protect photographs and negatives thereof by copyright. The second
assignment related to the sufficiency of the words 'Copyright, 1882, by N. Sarony,' in the photographs, as a notice of the
copyright of Napoleon Sarony, under the act of congress on that subject.

With regard to this latter question it is enough to say that the object of the statute is to give notice of the copyright to
the public by placing upon each copy, in some visible shape, the name of the author, the existence of the claim of
exclusive right, and the date at which this right was obtained. This notice is sufficiently given by the words 'Copyright,
1882, by N. Sarony,' found on each copy of the photograph. It clearly shows that a copyright is asserted, the date of
which is 1882, and if the name Sarony alone was used, it would be a* [111 U.S. 53, 56] sufficient designation of the
author until it is shown that there is some other Sarony. When, in addition to this, the initial letter of the Christian name
Napoleon is also given, the notice is complete.

The constitutional question is not free from difficulty. The eighth section of the first article of the constitution is the
great repository of the powers of congress, and by the eight clause of that section congress is authorized 'to promote
the progress of science and useful arts, by securing, for limited times to authors and inventors the exclusive right to their
respective writings and discoveries.' The argument here is that a photograph is not a writing nor the production of an
author. Under the acts of congress designed to give effect to this section, the persons who are to be benefited are
divided into two classes-authors and inventors. The monopoly which is granted to the former is called a copyright: that
given to the latter, letters patent, or, in the familiar language of the present day, patent-right. We have then copyright
and patent-right, and it is the first of these under which plaintiff asserts a claim for relief. It is insisted, in argument, that
a photograph being a reproduction, on paper, of the exact features of some natural object, or of some person, is not a
writing of which the producer is the author. Section 4952 of the Revised Statutes places photographs in the same class
as things which may be copyrighted with 'books, maps, charts, dramatic or musical compositions, engravings, cuts,
prints, paintings, drawings, statues, statuary, and models or designs intended to be perfected as works of the fine arts.'
'According to the practice of legislation in England and America, (says Judge BOUVIER, 2 Law Dict. 363,) the copyright is
confined to the exclusive right secured to the author or proprietor of a writing or drawing which may be multiplied by
the arts of printing in any of its branches.'

The first congress of the United States, sitting immediately after the formation of the constitution, enacted that the
'author or authors of any map, chart, book, or books, being a [111 U.S. 53, 57] citizen or resident of the United States,
shall have the sole right and liberty of printing, reprinting, publishing, and vending the same for the period of fourteen
years from the recording of the title thereof in the clerk's office, as afterwards directed.' 1 St. p. 124, 1. This statute not
only makes maps and charts subjects of copyright, but mentions them before books in the order of designation. The
second section of an act to amend this act, approved April 29, 1802, (2 St. 171,) enacts that from the first day of January
thereafter he who shall invent and design, engrave, etch, or work, or from his own works shall cause to be designed and
engraved, etched, or worked, any historical or other print or prints, shall have the same exclusive right for the term of 14
years from recording the title thereof as prescribed by law.
By the first section of the act of February 3, 1831, (4 St. 436,) entitled 'An act to amend the several acts respecting
copyright, musical compositions, and cuts, in connection with prints and engravings,' are added, and the period of
protection is extended to 28 years. The caption or title of this act uses the word 'copyright' for the first time in the
legislation of congress.

The construction placed upon the constitution by the first act of 1790 and the act of 1802, by the men who were
contemporary with its formation, many of whom were members of the convention which framed it, is of itself entitled
to very great weight, and when it is remembered that the rights thus established have not been disputed during a period
of nearly a century, it is almost conclusive. Unless, therefore, photographs can be distinguished in the classification of
this point from the maps, charts, designs, engravings, etchings, cuts, and other prints, it is difficult to see why congress
cannot make them the subject of copyright as well as the others. These statutes certainly answer the objection that
books only, or writing, in the limited sense of a book and its author, are within the constitutional provision. Both these
words are susceptible of a more enlarged definition than this. An author in [111 U.S. 53, 58] that sense is 'he to whom
anything owes its orign; originator; maker; one who completes a work of science or literature.' Worcester. So, also, no
one would now claim that the word 'writing' in this clause of the constitution, though the only word used as to subjects
in regard to which authors are to be secured, is limited to the actual script of the author, and excludes books and all
other printed matter. By writings in that clause is meant the literary productions of those authors, and congress very
properly has declared these to include all forms of writing, printing, engravings, etchings, etc., by which the ideas in the
mind of the author are given visible expression. The only reason why photographs were not included in the extended list
in the act of 1802 is, probably, that they did not exist, as photography, as an art, was then unknown, and the scientific
principle on which it rests, and the chemicals and machinery by which it is operated, have all been discovered long since
that statute was enacted. Nor is it supposed that the framers of the constitution did not understand the nature of
copyright and the objects to which it was commonly applied, for copyright, as the exclusive right of a man to the
production of his own genius or intellect, existed in England at that time, and the contest in the English courts, finally
decided, by a very close vote in the house of lords, whether the statute of 8 Anne, c. 19, which authorized copyright for
a limited time, was a restraint to that extent on the common law or not, was then recent. It had attracted much
attention, as the judgment of the king's bench, delivered by Lord MANSFIELD, holding it was not such a restraint, in
Millar v. Taylor, 4 Burr. 2303, decided in 1769, was overruled on appeal in the house of lords in 1774. Id. 2408. In this
and other cases the whole question of the exclusive right to literary and intellectual productions had been freely
discussed.

We entertain no doubt that the constitution is broad enough to cover an act authorizing copyrigth of photographs, so far
as they are representatives of original intellectual conceptions of the author.

But it is said that an engraving, a painting, a print, does em- [111 U.S. 53, 59] body the intellectual conception of its
author, in which there is novelty, invention, originality, and therefore comes within the purpose of the constitution in
securing its exclusive use or sale to its author, while a photograph is the mere mechanical reproduction of the physical
features or outlines of some object, animate or inanimate, and involves no originality of thought or any novelty in the
intellectual operation connected with its visible reproduction in shape of a picture. That while the effect of light on the
prepared plate may have been a discovery in the production of these pictures, and patents could properly be obtained
for the combination of the chemicals, for their application to the paper or other surface, for all the machinery by which
the light reflected from the object was thrown on the prepared plate, and for all the improvements in this machinery,
and in the materials, the remainder of the process is merely mechanical, with no place for novelty, invention, or
originality. It is simply the manual operation, by the use of these instruments and preparations, of transferring to the
plate the visible representation of some existing object, the accuracy of this representation being its highest merit. This
may be true in regard to the ordinary production of a photograph, and that in such case a copyright is no protection. On
the question as thus stated we decide nothing.
In regard, however, to the kindred subject of partents for invention, they cannot, by law, be issued to the inventor until
the novelty, the utility, and the actual discovery or invention by the claimant have been established by proof before the
commissioner of patents; and when he has secured such a patent, and undertakes to obtain redress for a violation of his
right in a court of law, the question of invention, of novelty, of originality is always open to examination. Our copyright
system has no such provision for previous examination by a proper tribunal as to the originality of the book, map, or
other matter offered for copyright. A deposit of two copies of the article or work with the librarian of congress, with the
name of the author and its title page, is all that is necessary to secure a copyright. It is therefore much more important
that when the supposed author sues for a violation of his copyright, the [111 U.S. 53, 60] existence of those facts of
originality, of intellectual production, of thought, and conception on the part of the author should be proved than in the
case of a patent-right. In the case before us we think this has been done.

The third finding of facts says, in regard to the photograph in question, that it is a 'useful, new, harmonious,
characteristic, and graceful picture, and that plaintiff made the same ... entirely from his own original mental
conception, to which he gave visible form by posing the said Oscar Wilde in front of the camera, selecting and arranging
the costume, draperies, and other various accessories in said photograph, arranging the subject so as to present graceful
outlines, arranging and disposing the light and shade, suggesting and evoking the desired expression, and from such
disposition, arrangement, or representation, made entirely by plaintiff, he produced the picture in suit.' These findings,
we think, show this photograph to be an original work of art, the product of plaintiff's intellectual invention, of which
plaintiff is the author, and of a class of inventions for which the constitution intended that congress should secure to him
the exclusive right to use, publish, and sell, as it has done by section 4952 of the Revised Statutes.

The question here presented is one of first impression under our constitution, but an instructive case of the same class is
that of Nottage v. Jackson, 11 Q. B. Div. 627, decided in that court on appeal, August, 1883. The first section of the act of
25 & 26, Vict. c. 68, authorizes the author of a photograph, upon making registry of it under the copyright act of 1882, to
have a monoply of its reproduction and multiplication during the life of the author. The plaintiffs in that case described
themselves as the authors of the photograph which was pirated in the registration of it. It appeared that they had
arranged with the captain of the Australian cricketers to take a photograph of the whole team in a group, and they sent
one of the artists in their employ from London to some country town to do it. The question in the case was whether the
plaintiffs, who owned the establishment in London, where the photographs [111 U.S. 53, 61] were made from the
negative, and were sold, and who had the negative taken by one of their men, were the authors, or the man who, for
their benefit, took the negative. It was held that the latter was the author, and the action failed, because plaintiffs had
described themselves as authors. BRETT, M. R., said, in regard to who was the author: 'The nearest I can come to is that
it is the person who effectively is as near as he can be the cause of the picture which is produced; that is, the person
who has superintended the arrangement, who has actually formed the picture by putting the persons in position, and
arranging the place where the people are to be-the man who is the effective cause of that.' Lord Justice COTTON said: 'In
my opinion, 'author' involves originating, making, producing, as the inventive or master mind, the thing which is to be
protected, whether it be a drawing, or a painting, or a photograph;' and Lord Justice BOWEN says that photography is to
be treated for the purposes of the act as an art, and the author is the man who really represents, creates, or gives effect
to the idea, fancy, or imagination. The appeal of plaintiffs from the original judgment against them was accordingly
dismissed.

These views of the nature of authorship and of originality, intellectual creation, and right to protection, confirm what we
have already said.

The judgment of the circuit court is accordingly affirmed.


United States Supreme Court
BURROW-GILES LITHOGRAPHIC CO. v. SARONY, (1884)
No. 18
Argued: Decided: March 17, 1884

BRIEF: Napoleon Sarony, the plaintiff in this case, was America's most famous portrait photographer in the latter half of the
19th Century. Before picking up the camera, he was already well-known as an accomplished lithographer.

Oscar Wilde is one of the most famous Irish authors of all time, renowned for works like The Picture of Dorian Grayand The
Importance of Being Earnest. In the early 1880's, before these books were even published, Wilde had already become famous
for his public lectures. In 1882, Wilde crossed the U.S. on a wildly successful speaking tour. During this time, he posed for the
infamous photo. (Another picture from the same shoot can be seen here.)

A retail store in New York City, Ehrich Brothers, commissioned Burrow-Giles Lithographic Co. to print an advertisement for
hats, in which it used this photo. Over 85,000 copies of the ad were made by the time Sarony brought the publishers to court.

The Supreme Court's opinion firmly resolved the question of whether a photograph could be copyrighted. It is unknown if
Wilde ever knew of his involvement in one of the biggest copyright cases in United States history. Unfortunately, years later,
Wilde was publicly disgraced after being convicted and jailed for "gross indecency" (i.e. having a homosexual relationship).
After being released from prison, he died penniless in a Paris hotel.

[111 U.S. 53, 54] David Calman, for plaintiff in error.

Augustus T. Gurlitz, for defendant in error.

MILLER, J.

This is a writ of error to the circuit court for the southern district of New York. Plaintiff is a lithographer, and defendant a
photographer, with large business in those lines in the city of New York. The suit was commenced by an action at law in
which Sarony was plaintiff and the lithographic company was defendant, the plaintiff charging the defendant with
violating his copyright in regard to a photograph, the title of which is 'Oscar Wilde, No. 18.' A jury being waived, the court
made a finding of facts on which a judgment in favor of the plaintiff was rendered for the sum of $600 for the plates and
85,000 copies sold and exposed to sale, and $10 for copies found in his possession, as penalties under section 4965 of the
Revised Statutes. Among the finding of facts made by the court the following presents the principal question raised by the
assignment of errors in the case:

'(3) That the plaintiff, about the month of January, 1882, under an agreement with Oscar Wilde, became and was the
author, inventor, designer, and proprietor of the photograph in suit, the title of which is 'Oscar Wilde, No. 18,' being the
number used to designate this particular photograph and of the negative thereof; that the same is a useful, new,
harmonious, characteristic, and graceful picture, and that said plaintiff made the same at his place of business in said city
of New York, and within the United States, entirely from his own [111 U.S. 53, 55] original mental conception, to which he
gave visible form by posing the said Oscar Wilde in front of the camera, selecting and arranging the costume, draperies,
and other various accessories in said photograph, arranging the subject so as to present graceful outlines, arranging and
disposing the light and shade, suggesting and evoking the desired expression, and from such disposition, arrangement, or
representation, made entirely by the plaintiff, he produced the picture in suit, Exhibit A, April 14, 1882, and that the terms
'author,' 'inventor,' and 'designer,' as used in the art of photography and in the complaint, mean the person who so
produced the photograph.'

Other findings leave no doubt that plaintiff had taken all the steps required by the act of congress to obtain copyright of
this photograph, and section 4952 names photographs, among other things, for which the author, inventor, or designer
may obtain copyright, which is to secure him the sole privilege of reprinting, publishing, copying, and vending the same.
That defendant is liable, under that section and section 4965, there can be no question if those sections are valid as they
relate to photographs.

Accordingly, the two assignments of error in this court by plaintiff in error are: (1) That the court below decided that
congress had and has the constitutional right to protect photographs and negatives thereof by copyright. The second
assignment related to the sufficiency of the words 'Copyright, 1882, by N. Sarony,' in the photographs, as a notice of the
copyright of Napoleon Sarony, under the act of congress on that subject.

With regard to this latter question it is enough to say that the object of the statute is to give notice of the copyright to the
public by placing upon each copy, in some visible shape, the name of the author, the existence of the claim of exclusive
right, and the date at which this right was obtained. This notice is sufficiently given by the words 'Copyright, 1882, by N.
Sarony,' found on each copy of the photograph. It clearly shows that a copyright is asserted, the date of which is 1882, and
if the name Sarony alone was used, it would be a* [111 U.S. 53, 56] sufficient designation of the author until it is shown
that there is some other Sarony. When, in addition to this, the initial letter of the Christian name Napoleon is also given,
the notice is complete.

The constitutional question is not free from difficulty. The eighth section of the first article of the constitution is the great
repository of the powers of congress, and by the eight clause of that section congress is authorized 'to promote the
progress of science and useful arts, by securing, for limited times to authors and inventors the exclusive right to their
respective writings and discoveries.' The argument here is that a photograph is not a writing nor the production of an
author. Under the acts of congress designed to give effect to this section, the persons who are to be benefited are divided
into two classes-authors and inventors. The monopoly which is granted to the former is called a copyright: that given to
the latter, letters patent, or, in the familiar language of the present day, patent-right. We have then copyright and patent-
right, and it is the first of these under which plaintiff asserts a claim for relief. It is insisted, in argument, that a
photograph being a reproduction, on paper, of the exact features of some natural object, or of some person, is not a writing
of which the producer is the author. Section 4952 of the Revised Statutes places photographs in the same class as things
which may be copyrighted with 'books, maps, charts, dramatic or musical compositions, engravings, cuts, prints,
paintings, drawings, statues, statuary, and models or designs intended to be perfected as works of the fine arts.' 'According
to the practice of legislation in England and America, (says Judge BOUVIER, 2 Law Dict. 363,) the copyright is confined to
the exclusive right secured to the author or proprietor of a writing or drawing which may be multiplied by the arts of
printing in any of its branches.'

The first congress of the United States, sitting immediately after the formation of the constitution, enacted that the 'author
or authors of any map, chart, book, or books, being a [111 U.S. 53, 57] citizen or resident of the United States, shall have
the sole right and liberty of printing, reprinting, publishing, and vending the same for the period of fourteen years from
the recording of the title thereof in the clerk's office, as afterwards directed.' 1 St. p. 124, 1. This statute not only makes
maps and charts subjects of copyright, but mentions them before books in the order of designation. The second section of
an act to amend this act, approved April 29, 1802, (2 St. 171,) enacts that from the first day of January thereafter he who
shall invent and design, engrave, etch, or work, or from his own works shall cause to be designed and engraved, etched, or
worked, any historical or other print or prints, shall have the same exclusive right for the term of 14 years from recording
the title thereof as prescribed by law.
By the first section of the act of February 3, 1831, (4 St. 436,) entitled 'An act to amend the several acts respecting
copyright, musical compositions, and cuts, in connection with prints and engravings,' are added, and the period of
protection is extended to 28 years. The caption or title of this act uses the word 'copyright' for the first time in the
legislation of congress.

The construction placed upon the constitution by the first act of 1790 and the act of 1802, by the men who were
contemporary with its formation, many of whom were members of the convention which framed it, is of itself entitled to
very great weight, and when it is remembered that the rights thus established have not been disputed during a period of
nearly a century, it is almost conclusive. Unless, therefore, photographs can be distinguished in the classification of this
point from the maps, charts, designs, engravings, etchings, cuts, and other prints, it is difficult to see why congress cannot
make them the subject of copyright as well as the others. These statutes certainly answer the objection that books only, or
writing, in the limited sense of a book and its author, are within the constitutional provision. Both these words are
susceptible of a more enlarged definition than this. An author in [111 U.S. 53, 58] that sense is 'he to whom anything owes
its orign; originator; maker; one who completes a work of science or literature.' Worcester. So, also, no one would now
claim that the word 'writing' in this clause of the constitution, though the only word used as to subjects in regard to which
authors are to be secured, is limited to the actual script of the author, and excludes books and all other printed matter. By
writings in that clause is meant the literary productions of those authors, and congress very properly has declared these to
include all forms of writing, printing, engravings, etchings, etc., by which the ideas in the mind of the author are given
visible expression. The only reason why photographs were not included in the extended list in the act of 1802 is, probably,
that they did not exist, as photography, as an art, was then unknown, and the scientific principle on which it rests, and the
chemicals and machinery by which it is operated, have all been discovered long since that statute was enacted. Nor is it
supposed that the framers of the constitution did not understand the nature of copyright and the objects to which it was
commonly applied, for copyright, as the exclusive right of a man to the production of his own genius or intellect, existed in
England at that time, and the contest in the English courts, finally decided, by a very close vote in the house of lords,
whether the statute of 8 Anne, c. 19, which authorized copyright for a limited time, was a restraint to that extent on the
common law or not, was then recent. It had attracted much attention, as the judgment of the king's bench, delivered by
Lord MANSFIELD, holding it was not such a restraint, in Millar v. Taylor, 4 Burr. 2303, decided in 1769, was overruled on
appeal in the house of lords in 1774. Id. 2408. In this and other cases the whole question of the exclusive right to literary
and intellectual productions had been freely discussed.

We entertain no doubt that the constitution is broad enough to cover an act authorizing copyrigth of photographs, so far as
they are representatives of original intellectual conceptions of the author.

But it is said that an engraving, a painting, a print, does em- [111 U.S. 53, 59] body the intellectual conception of its
author, in which there is novelty, invention, originality, and therefore comes within the purpose of the constitution in
securing its exclusive use or sale to its author, while a photograph is the mere mechanical reproduction of the physical
features or outlines of some object, animate or inanimate, and involves no originality of thought or any novelty in the
intellectual operation connected with its visible reproduction in shape of a picture. That while the effect of light on the
prepared plate may have been a discovery in the production of these pictures, and patents could properly be obtained for
the combination of the chemicals, for their application to the paper or other surface, for all the machinery by which the
light reflected from the object was thrown on the prepared plate, and for all the improvements in this machinery, and in
the materials, the remainder of the process is merely mechanical, with no place for novelty, invention, or originality. It is
simply the manual operation, by the use of these instruments and preparations, of transferring to the plate the visible
representation of some existing object, the accuracy of this representation being its highest merit. This may be true in
regard to the ordinary production of a photograph, and that in such case a copyright is no protection. On the question as
thus stated we decide nothing.

In regard, however, to the kindred subject of partents for invention, they cannot, by law, be issued to the inventor until the
novelty, the utility, and the actual discovery or invention by the claimant have been established by proof before the
commissioner of patents; and when he has secured such a patent, and undertakes to obtain redress for a violation of his
right in a court of law, the question of invention, of novelty, of originality is always open to examination. Our copyright
system has no such provision for previous examination by a proper tribunal as to the originality of the book, map, or other
matter offered for copyright. A deposit of two copies of the article or work with the librarian of congress, with the name of
the author and its title page, is all that is necessary to secure a copyright. It is therefore much more important that when
the supposed author sues for a violation of his copyright, the [111 U.S. 53, 60] existence of those facts of originality, of
intellectual production, of thought, and conception on the part of the author should be proved than in the case of a patent-
right. In the case before us we think this has been done.

The third finding of facts says, in regard to the photograph in question, that it is a 'useful, new, harmonious, characteristic,
and graceful picture, and that plaintiff made the same ... entirely from his own original mental conception, to which he
gave visible form by posing the said Oscar Wilde in front of the camera, selecting and arranging the costume, draperies,
and other various accessories in said photograph, arranging the subject so as to present graceful outlines, arranging and
disposing the light and shade, suggesting and evoking the desired expression, and from such disposition, arrangement, or
representation, made entirely by plaintiff, he produced the picture in suit.' These findings, we think, show this photograph
to be an original work of art, the product of plaintiff's intellectual invention, of which plaintiff is the author, and of a class
of inventions for which the constitution intended that congress should secure to him the exclusive right to use, publish,
and sell, as it has done by section 4952 of the Revised Statutes.

The question here presented is one of first impression under our constitution, but an instructive case of the same class is
that of Nottage v. Jackson, 11 Q. B. Div. 627, decided in that court on appeal, August, 1883. The first section of the act of 25
& 26, Vict. c. 68, authorizes the author of a photograph, upon making registry of it under the copyright act of 1882, to have
a monoply of its reproduction and multiplication during the life of the author. The plaintiffs in that case described
themselves as the authors of the photograph which was pirated in the registration of it. It appeared that they had arranged
with the captain of the Australian cricketers to take a photograph of the whole team in a group, and they sent one of the
artists in their employ from London to some country town to do it. The question in the case was whether the plaintiffs,
who owned the establishment in London, where the photographs [111 U.S. 53, 61] were made from the negative, and were
sold, and who had the negative taken by one of their men, were the authors, or the man who, for their benefit, took the
negative. It was held that the latter was the author, and the action failed, because plaintiffs had described themselves as
authors. BRETT, M. R., said, in regard to who was the author: 'The nearest I can come to is that it is the person who
effectively is as near as he can be the cause of the picture which is produced; that is, the person who has superintended the
arrangement, who has actually formed the picture by putting the persons in position, and arranging the place where the
people are to be-the man who is the effective cause of that.' Lord Justice COTTON said: 'In my opinion, 'author' involves
originating, making, producing, as the inventive or master mind, the thing which is to be protected, whether it be a
drawing, or a painting, or a photograph;' and Lord Justice BOWEN says that photography is to be treated for the purposes
of the act as an art, and the author is the man who really represents, creates, or gives effect to the idea, fancy, or
imagination. The appeal of plaintiffs from the original judgment against them was accordingly dismissed.

These views of the nature of authorship and of originality, intellectual creation, and right to protection, confirm what we
have already said.

The judgment of the circuit court is accordingly affirmed.


LOS ANGELES NEW SERVICE VS TULLO

LOS ANGLES NEW SERVICE vs FRANK TULLO

Los Angeles News Service ("LANS") records newsworthy events on videotape and licenses television stations and
networks to use all or segments of the unedited ("raw") footage in edited broadcast news stories. Audio Video
Reporting Services ("AVRS") provides a video "news clipping" service: It monitors television news programs, records
them on videotape and sells copies of all or segments of the tapes to interested individuals and businesses.

2
LANS videotaped the sites of an airplane crash and a train wreck, registered its copyrights to the tapes, and licensed
certain Los Angeles-area television stations to use them on news programs. AVRS made video recordings of these
news programs, which included portions of LANS's footage, and marketed the recordings.

3
LANS sued, claiming copyright infringement. AVRS counterclaimed, alleging LANS had fraudulently induced AVRS to
provide LANS with copies of AVRS recordings by falsely promising to pay for the tapes.1 After a bench trial, the
district court entered judgment for LANS on the copyright infringement claims and awarded statutory damages of
$10,000 for each infringement, a total of $20,000. The court found for AVRS on its fraud claim and awarded AVRS
$346.13.
4
AVRS appeals, making the following claims: (1) the raw videotapes are not sufficiently original to merit copyright
protection; (2) the public's First Amendment right of access to videotapes of newsworthy events, such as the crash
and the wreck, precludes copyright protection for the tapes; (3) even if the tapes are copyrightable, AVRS made "fair
use" of them and is therefore shielded from liability for copyright infringement; (4) even if AVRS would otherwise be
liable for copyright infringement, LANS's "unclean hands" barred recovery; (5) having found AVRS liable for copyright
infringement, the court should have permanently enjoined AVRS from copying LANS's copyrighted material without
license from LANS, fixed the terms of a license that would permit AVRS to copy LANS's copyrighted material, and
required LANS to notify AVRS when LANS's copyrighted material was broadcast; (6) the damage award was excessive;
and (7) a videotape of the train wreck should not have been admitted into evidence. We affirm.

5
II. Raw Videotapes as Original Works of Authorship

6
AVRS claims LANS's raw videotapes, as opposed to the edited news stories in which portions of those tapes were
combined with other footage, narrative, interview excerpts and graphics to form a television news "package," are not
"original works of authorship" and thus do not merit copyright protection under § 102(a) of the Copyright Act of
1976, 17 U.S.C. §§ 101-914. Whether the raw tapes are sufficiently original to merit copyright protection is a mixed
question of law and fact that we examine de novo. See Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 201
(9th Cir.1989).
7
AVRS argues LANS's tapes merely captured whatever was before the camera, involved no creativity or intellectual
input, and so are not original works deserving copyright protection. The Supreme Court rejected a similar argument
more than 100 years ago. In Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 4 S.Ct. 279, 28 L.Ed. 349 (1884), the
plaintiff argued a photograph of the author Oscar Wilde was not original and therefore not copyrightable because a
"photograph is the mere mechanical reproduction of the physical features or outlines of some object animate or
inanimate, and involves no originality of thought or any novelty in the intellectual operation connected with its
visible reproduction in shape of a picture." Id. at 59, 4 S.Ct. at 281. The Court did not decide whether all photographs
reflected the necessary originality, id., but held the Wilde photograph clearly was original because of the creative and
intellectual decisions involved in producing it:

8
[The court below found that the photograph was] a "useful, new, harmonious, characteristic, and graceful picture,
and that plaintiff made the same ... entirely from his own original mental conception, to which he gave visible form
by posing the said Oscar Wilde in front of the camera, selecting and arranging the costume, draperies, and other
various accessories in said photograph, arranging the subject so as to present graceful outlines, arranging and
disposing the light and shade, [and] suggesting and evoking the desired expression...."

9
These findings, we think, show this photograph to be an original work of art, the product of plaintiff's intellectual
invention, of which plaintiff is the author

10
....

11
Id. at 60, 4 S.Ct. at 282.

12
Thirty-seven years later, Judge Learned Hand suggested the question left open in Burrow-Giles--whether all
photographs are sufficiently original by their nature to merit copyright protection--had been answered in the
affirmative by Bleistein v. Donaldson Lithographing Co.,188 U.S. 239, 23 S.Ct. 298, 47 L.Ed. 460 (1903), which held
that chromolithographs that depicted real scenes and people, as photographs do, were copyrightable because they
were "the personal reaction of an individual upon nature. Personality always contains something unique. It expresses
its singularity even in handwriting, and a very modest grade of art has in it something irreducible, which is one man's
alone. That something he may copyright...." Id. at 250, 23 S.Ct. at 300. In Jewelers' Circular Publishing Co. v. Keystone
Publishing Co., 274 F. 932, 934 (S.D.N.Y.1921), aff'd, 281 F. 83 (2d Cir.1922), Judge Hand said, "Burrow-Giles
[Lithographic] Co. v. Sarony ... left open an intimation that some photographs might not be protected.... I think that
... Bleistein v. Donaldson Lithographing Co. ... rules, because no photograph, however simple, can be unaffected by
the personal influence of the author, and no two will be absolutely alike."Professor Nimmer's treatise reports that
Judge Hand's statement of the law "has become the prevailing view, so that [almost] any ... photograph may claim
the necessary originality to support a copyright merely by virtue of the photographers' personal choice of subject
matter, angle of photograph, lighting, and determination of the precise time when the photograph is to be taken." 1
Melville B. Nimmer & David Nimmer, Nimmer on Copyright ("Nimmer") § 2.08[E], at 2-126.3 (1992 ed.) (footnote
omitted).2 We have stated before that the courts have recognized repeatedly that the creative decisions involved in
producing a photograph may render it sufficiently original to be copyrightable and "have carefully delineated
selection of subject, posture, background, lighting, and perhaps even perspective alone as protectible elements of a
photographer's work." United States v. Hamilton, 583 F.2d 448, 452 (9th Cir.1978); see also Time, Inc. v. Bernard Geis
Assocs., 293 F.Supp. 130, 142-43 (S.D.N.Y.1968) (amateur photographer's raw footage of the assassination of
President John Kennedy was sufficiently original because of the creative effort involved in selecting type of camera,
film, lens, area in which to shoot, time to film, and position of camera).
13
Whether or not every photograph or raw videotape is original and therefore copyrightable, it is clear from the record
in this case that the preparation of the two videotapes at issue required the intellectual and creative input entitled to
copyright protection.3 The district court so concluded after hearing testimony, from the operator of the video camera
and the pilot of the helicopter in which the camera operator flew, regarding the production of LANS's news
videotapes in general and the tapes in this case in particular. The witnesses described the initial decisions about the
newsworthiness of the events and how best to tell the stories succinctly and effectively; the selections of camera
lenses, angles and exposures; the choices of the heights and directions from which to tape and what portions of the
events to film and for how long. The camera operator described herself as "an artist. I use a paintbrush. I use the
camera to tell a story."
14
AVRS's reliance on Cable News Network, Inc. v. Video Monitoring Services of America, Inc. ("CNN"), 940 F.2d 1471,
vacated, 949 F.2d 378 (11th Cir.1991), to support its contention that under Feist Publications, Inc. v. Rural Telephone
Service Co., Inc., --- U.S. ----, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991), the videotapes did not possess the required
originality, is misplaced.4 Feist stated the "requisite level of creativity is extremely low; even a slight amount will
suffice. The vast majority of works make the grade quite easily, as they possess some creative spark, 'no matter how
crude, humble or obvious' it might be." Feist, --- U.S. at ----, 111 S.Ct. at 1287 (citation omitted). Feist held only that a
"garden-variety" telephone directory listing subscribers alphabetically by surname was not sufficiently original
because the selection and arrangement was "entirely typical" and "devoid of even the slightest trace of creativity."
Id. --- U.S. at ----, 111 S.Ct. at 1296-97. The Court did not disavow the century-old proposition that photographs may
be copyrightable as the original products of creative and artistic decisions; rather, the Court explicitly reaffirmed
Burrow-Giles, stating that "[t]he originality requirement articulated [therein] remains the touchstone of copyright
protection today." Id., --- U.S. at ----, 111 S.Ct. at 1288.
15
III. First Amendment Preclusion of Copyright Protection

16
AVRS contends that even if the tapes are original enough to merit copyright protection, we should adopt a bright-line
rule that no videotape of a newsworthy event is copyrightable because its creator's proprietary interest must give
way to the public's First Amendment right of access to information.

17
Copyright law incorporates First Amendment goals by ensuring that copyright protection extends only to the forms in
which ideas and information are expressed and not to the ideas and information themselves. "[T]he idea-expression
dichotomy ... serves to accommodate the competing interests of copyright and the first amendment. The
'marketplace of ideas' is not limited by copyright because copyright is limited to protection of expression." Sid &
Marty Krofft Television Prods., Inc. v. McDonald's Corp. ("Krofft"), 562 F.2d 1157, 1170 (9th Cir.1977); see also Harper
& Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 556, 105 S.Ct. 2218, 2228, 85 L.Ed.2d 588 (1985) ("copyright's
idea/expression dichotomy 'strike[s] a definitional balance between the First Amendment and the Copyright Act by
permitting free communication of facts while still protecting an author's expression' " (citation omitted)).
18
First Amendment concerns are also addressed in the copyright field through the "fair use" doctrine, discussed in part
IV of this opinion. As we will note, First Amendment considerations are relevant in determining whether the purpose
of copying a work and the nature of the work copied militate in favor of finding a given use of a particular work to be
a "fair use," for which no liability should be imposed.

19
Professor Nimmer has suggested the idea-expression dichotomy and the fair use doctrine may not adequately
protect First Amendment interests in some circumstances. 1 Nimmer § 1.10[C], at 1-81. Citing the exclusive
photographs of the My Lai massacre during the Vietnam War and the Zapruder home movie of the assassination of
President John Kennedy as examples, Nimmer proposes that "where the 'idea' of a work contributes almost nothing
to the democratic dialogue, and it is only its expression which is meaningful," copyright protection of the expression
should be limited in the interest of public access to information necessary to effective public dialogue. Id. at 1-82--1-
84. Nimmer explains:

20
No amount of words describing the "idea" of the massacre could substitute for the public insight gained through the
photographs. The photographic expression, not merely the idea, became essential if the public was to fully
understand what occurred in that tragic episode. It would be intolerable if the public's comprehension of the full
meaning of My Lai could be censored by the copyright owner of the photographs....

21
Similarly, in the welter of conflicting versions of what happened that tragic day in Dallas, the Zapruder film gave the
public authoritative answers that it desperately sought; answers that no other source could supply with equal
credibility. Again, it was only the expression, not the idea alone, that could adequately serve the needs of an
enlightened democratic dialogue.

22
Id. at 1-83--1-84.

23
Nimmer recognizes, however, that denying copyright protection to news pictures might defeat the ultimate First
Amendment goal of greater public access to information by inhibiting or destroying the business of news
photography. Id. at 1-84.1--1-85. The treatise therefore suggests a news photograph in which idea and expression
are inseparable should be subject to a compulsory licensing scheme unless within a month of its making, the
photograph appears in the newspapers, magazines or television news programs servicing a given area. Id. at 1-85.5
24
Because there was no showing that other depictions and reports of the plane crash and train wreck were unavailable
or omitted information vital to the public understanding of the events, and because the record establishes that
LANS's tapes were shown on local television programs immediately after the events and thus were freely available to
the public, we conclude the problem perceived by Professor Nimmer was not present in this case, and we reject, as
indeed would Professor Nimmer, AVRS's contention that the First Amendment precludes liability for infringement of
LANS's copyrights.

IV. Fair Use

25
AVRS contends that if the videotapes are copyrightable, AVRS's use of them is protected by the doctrine of fair use,
which " 'allows a holder of the privilege to use copyrighted material in a reasonable manner without the consent of
the copyright owner.' " Lewis Galoob Toys, Inc. v. Nintendo of America, Inc., 964 F.2d 965, 969 (9th Cir.1992) (citation
omitted). Fair use is a mixed question of law and fact. Harper & Row, 471 U.S. at 560, 105 S.Ct. at 2230. Where the
district court has found facts sufficient to evaluate each of the statutory factors considered in determining fair use, as
did the court here, we may determine as a matter of law whether the challenged use is a fair one. Id.
26
Congress has identified four nonexclusive factors as "especially relevant" in determining fair use. Id. The Copyright
Act provides:
27
[T]he fair use of a copyrighted work ... for purposes such as criticism, comment, news reporting, teaching ...,
scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any
particular case is a fair use the factors to be considered shall include--

28
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit
educational purposes;

29
(2) the nature of the copyrighted work;

30
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

31
(4) the effect of the use upon the potential market for or value of the copyrighted work.

32
17 U.S.C. § 107.

33
(1) AVRS argues the district court erred in finding AVRS's use of the tapes was not a fair use because the use was
commercial in character. AVRS maintains its clients used the tapes for "research, scholarship and private study," and
therefore AVRS's use must be considered fair in light of Sony Corp. of America v. Universal City Studios, Inc., 464 U.S.
417, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984).
34
Even assuming AVRS's representation of its clients' use of the tapes to be accurate, Sony does not dictate the result
for which AVRS argues. Sony held distributors of videotape recorders ("VTRs") were not vicariously liable for
copyright infringements allegedly committed by VTR purchasers because VTRs could be used for "private,
noncommercial time-shifting [taping for later viewing] in the home," id. at 442, 104 S.Ct. at 789, and such a private,
noncommercial, nonprofit activity is presumptively a fair use, id. at 449, 104 S.Ct. at 792.

35
Unlike the claim against the VTR distributors involved in Sony, LANS's claim against AVRS is not that AVRS is
vicariously liable for alleged infringements by its customers but that it is directly liable for its own infringements. The
difference is crucial: Under Sony, a VTR owner who tapes a copyrighted movie broadcast over a public television
station to watch at home at a later time is protected by the fair use doctrine, but a VTR owner who tapes the movie
to sell copies to others without the copyright owner's consent is subject to a range of civil and criminal sanctions.
See, e.g., id. at 434 n. 15, 104 S.Ct. at 784 n. 15 ("anyone who willfully infringes the copyright to reproduce a motion
picture for purposes of commercial advantage or private financial gain is subject to substantial criminal penalties").
The fact that the VTR owner's customer buys the tape to watch the movie at home at a convenient time will not
shield the VTR owner from liability; the ultimate use to which the customer puts the tape is irrelevant, as is the use
AVRS's customers make of the tapes AVRS sells.

36
Moreover, if AVRS had been sued on a theory of vicarious liability, AVRS's clients' use of LANS's footage for "research,
scholarship and private study" would not automatically be deemed fair. The four statutory factors must still be
considered. For the same reason, AVRS's argument that its use of the tapes was fair as a matter of law because its
purpose was "private news reporting" is unavailing. Even if AVRS's characterization of its purpose was correct, it
would not be dispositive:

37
News reporting is one of the examples enumerated in § 107 to "give some idea of the sort of activities the courts
might regard as fair use under the circumstances." This listing was not intended ... to single out any particular use as
presumptively a "fair" use.... The fact that an article arguably is "news" and therefore a productive use is simply one
factor in a fair use analysis.

38
Harper & Row, 471 U.S. at 561, 105 S.Ct. at 2231 (citations omitted). In any case, AVRS is no more a "news reporter"
than the VTR owner who tapes a publicly broadcast movie is a filmmaker.

39
AVRS's purposes are "unabashedly commercial." Pacific & S. Co., Inc. v. Duncan ("Duncan"), 744 F.2d 1490, 1496
(11th Cir.1984) ("Of course, every commercial exchange of goods and services involves both the giving of the good or
service and the taking of the purchase price. The fact that [the defendant] focuses on the giving rather than the
taking cannot hide the fact that profit is its primary motive for making the exchange."). In Sony, the Court
emphasized that if a VTR owner copied material previously broadcast over the public airwaves for a commercial or
profit-making purpose, that use "would presumptively be unfair." Sony, 464 U.S. at 449, 104 S.Ct. at 792. This factor
weighs against AVRS.
40
(2) The second factor bearing on the availability of the fair use exception is the nature of the copyrighted work--here,
videotapes of news events. "The law generally recognizes a greater need to disseminate factual works than works of
fiction or fantasy." Harper & Row, 471 U.S. at 563, 105 S.Ct. at 2232; see also Sony, 464 U.S. at 454, 104 S.Ct. at 795
(interest in expanding public access to television broadcasting is factor to be considered in determining fair use);
Duncan, 744 F.2d at 1497 (the "importance to society of the news could affect the definition of a fair use for a
number of reasons"). This factor weighs in AVRS's favor.6
41
(3) AVRS contends the third factor, the amount and substantiality of the portion used in relation to the copyrighted
work as a whole, also weighs in its favor because AVRS copied only a small portion of LANS's copyrighted footage: the
"clips" included in the television newscasts AVRS recorded. Copying even a small portion of a copyrighted work may
exceed the boundaries of fair use if the material taken is the "heart" of the work. See Harper & Row, 471 U.S. at 564-
65, 105 S.Ct. at 2232-33 (while words quoted by copyright infringers were "an insubstantial portion" of President
Ford's unpublished memoirs, they were the "heart of the book" in that they were among the most "interesting,"
"moving" and "powerful" passages).

42
Although AVRS copied only a small part of the raw footage shot by LANS, it was the most valuable part of that
footage. In preparing a newscast, a television station selects the most effective and illustrative shots from the raw
footage available. Thus the news programs AVRS copied included what LANS's customers thought was the best of the
LANS footage--its "heart." The third factor weighs against AVRS.7
43
(4) The fourth factor, the effect of the use upon the potential market for or value of the copyrighted work, "is
undoubtedly the single most important element of fair use." Harper & Row, 471 U.S. at 566, 105 S.Ct. at 2233. This
factor militates against a finding of fair use if there is a "showing by a preponderance of the evidence that some
meaningful likelihood of future harm exists. If the intended use is for commercial gain, that likelihood may be
presumed." Sony, 464 U.S. at 451, 104 S.Ct. at 793 (emphasis deleted).

44
Although the AVRS and LANS markets are not identical--AVRS sells edited news stories copied from television news
programs to individuals and businesses while LANS licenses television stations to use its raw footage in producing
news programs--there is an overlap between the AVRS market and the potential LANS market. At least some AVRS
customers might choose to buy raw footage from LANS if they could not purchase edited news stories from AVRS,
and LANS might choose to sell the raw footage to them. Cf. Duncan, 744 F.2d at 1496 ("[The news clipping service]
uses the broadcasts for a purpose that [the broadcaster] might use for its own benefit. The fact that [the
broadcaster] does not actively market copies of the news programs does not matter, for Section 107 [of the
Copyright Act] looks to the 'potential market' in analyzing the effects of an alleged infringement."). This factor also
weighs against AVRS.

45
Only one of the four statutory factors (the nature of the copyrighted work) argues in favor of classifying AVRS's
unauthorized use of LANS's copyrighted material as fair. The remainder (the commercial character of the use, the use
of the most valuable part of the material, and the adverse impact upon LANS's potential market) argue strongly to
the contrary. On balance, we conclude that the doctrine of fair use does not protect AVRS from liability for infringing
LANS's copyrights.8
V. Unclean Hands

46
AVRS contends the district court erred by failing to find LANS was barred from prevailing on its copyright claim
because of its "unclean hands." "The application of the unclean hands doctrine raises primarily a question of fact."
Dollar Sys., Inc. v. Avcar Leasing Sys., Inc.,890 F.2d 165, 173 (9th Cir.1989). We review factual findings for clear error.
Lewis Galoob Toys, at 967.
47
AVRS maintains LANS should be barred from recovering for AVRS's copyright infringement because LANS induced
AVRS to provide LANS with copies of videotapes at issue in this litigation by giving AVRS a check for $346.13 on which
LANS then stopped payment. Arguably, this behavior could constitute unclean hands. See 3 Nimmer § 13.09[B], at
13-149--13-150 (defense of unclean hands has been recognized where plaintiff "obtained information as to the
nature of defendant's work through unfair means"). However, the defense is rarely effective, id. at 13-148, and is
properly denied when the "plaintiff's transgression is of an ... inconsequential nature," id. at 13-150 (footnote
omitted). The district court did not err in concluding LANS's behavior was not sufficiently serious to bar it from
recovery.

VI. Injunctive Relief

48
AVRS contends the district court should have granted LANS's request for an injunction barring AVRS from copying
LANS's copyrighted material without a license, and should have fixed the terms of a license that would permit AVRS
to copy LANS's copyrighted material and ordered LANS to notify AVRS when LANS's copyrighted material was
broadcast. AVRS opposed LANS's request initially but changed its position when the district court ruled in LANS's
favor on the merits. LANS now opposes the injunctive relief it originally sought.

49
The district court had discretion to grant the injunction LANS requested but had no obligation to do so after LANS
abandoned its request. Cf. Universal City Studios, Inc. v. Sony Corp. of America, 659 F.2d 963, 976 (9th Cir.1981)
(citing Nimmer for proposition it would be abuse of discretion to deny plaintiff's request for permanent injunction
after liability and threat of continuing infringement had been established), rev'd on other grounds, 464 U.S. 417, 104
S.Ct. 774, 78 L.Ed.2d 574 (1984). Neither was the court required to compel LANS to grant AVRS license to copy LANS's
copyrighted material nor to protect AVRS from the possibility that without the notification provision AVRS sought, it
might inadvertently copy LANS's copyrighted material and thus become liable for further substantial damages. See
Universal City Studios, 659 F.2d at 976 ("In fashioning relief, the district court should not be overly concerned with
the prospective harm to [defendant]. A defendant has no right to expect a return on investment from activities which
violate the copyright laws. Once a determination has been made that an infringement is involved, the continued
profitability of [defendant's] business[ ] is of secondary concern.").9
VII. Damages

50
AVRS claims that because it had a good faith belief in the legality of copying the newscasts containing LANS's
copyrighted material, the district court erred by awarding more than minimal damages. AVRS relies on 17 U.S.C. §
504(c)(2), which provides that "[i]n a case where the infringer sustains the burden of proving, and the court finds,
that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of
copyright, the court i[n] its discretion may reduce the award of statutory damages to a sum of not less than $200."
The district court did not find AVRS "had no reason to believe" its acts did not constitute infringement. Even if the
court had so found, § 504(c)(2) does not mandate a nominal award. On this record, the district court did not abuse its
discretion by declining to reduce the award.10
VIII. Evidentiary Ruling

51
Finally, AVRS argues the district court erred by admitting a videotape of the train wreck into evidence. "[E]videntiary
rulings are reviewed for abuse of discretion and will not be reversed absent prejudice." Roberts v. College of the
Desert, 870 F.2d 1411, 1418 (9th Cir.1988). AVRS argues it was prejudiced because there would have been no
evidence that AVRS infringed LANS's copyright to the footage of the train wreck without the tape. AVRS is incorrect.
The videographer who shot the footage testified at trial that she saw her video broadcast on a local channel; another
LANS employee testified the station that broadcast on that channel had been licensed to use the footage; and AVRS's
log sheets showed AVRS sold a copy of that station's newscast from the day in question to the Southern Pacific
Transportation Company, whose train derailed in the wreck. This evidence was sufficient to permit the trier of fact to
infer AVRS sold a copy of a news program containing LANS's copyrighted footage of the train wreck without LANS's
consent, thus infringing LANS's copyright. Assuming error, AVRS was not prejudiced.
AFFIRMED.11
1
LANS obtained copies of the infringing tapes by presenting AVRS with a $346.13 check on which LANS later stopped
payment

2
The exceptions Nimmer would recognize do not apply in this case. See id. at 2-126.3--2-126.7 (suggesting a photograph
of a copyrighted photograph would not be copyrightable, nor would a photograph that duplicated exactly every single
element of a copyrighted photograph)

3
We do not imply the mere time and effort LANS invested in making the videotapes entitle the tapes to copyright
protection; originality in the work product is required. See Feist Publications, Inc. v. Rural Tel. Serv. Co., Inc., --- U.S. ----, -
--- - ----, 111 S.Ct. 1282, 1291-92, 113 L.Ed.2d 358 (1991) (rejecting the "sweat of the brow" doctrine that held mere
industrious compilation deserving of copyright even if the compilation was not original)

4
CNN is not precedential even in the Eleventh Circuit since it was vacated for reconsideration by the en banc court. See
Ierna v. Arthur Murray Int'l, Inc., 833 F.2d 1472, 1475 n. 4 (11th Cir.1987) (opinion vacated on rehearing is not binding
precedent). The en banc court dismissed the appeal. Cable News Network, Inc. v. Video Monitoring Servs. of America,
Inc., 959 F.2d 188 (11th Cir.1992) (en banc) (district court had entered permanent injunction which was not before the
court so appeal was dismissed as it would not be judicious to grant relief sought)
In any case, the CNN panel considered an injunction barring the copying of any portion of an entire newscast, which
consisted of "various news stories, prerecorded segments, interviews, and weather reports" which themselves were
"preexisting, collected and assembled" works, CNN, 940 F.2d at 1485, a very different issue from the copyrightability of
raw footage that may be used in such a newscast. CNN found the injunction too broad because the newscast was a
compilation of preexisting materials, see 17 U.S.C. § 101, and so merited copyright protection only to the extent the
selection and arrangement of those materials was original. CNN, 940 F.2d at 1485-86; see also 17 U.S.C. § 103(b) ("The
copyright in a compilation ... extends only to the material contributed by the author of such work, as distinguished from
the preexisting material employed in the work...."). The tapes at issue in this case were not compilations of preexisting
works or data; they were preexisting creative works that were incorporated into the kind of compilatory news programs
the CNN panel discussed.

5
No court has adopted Nimmer's proposal. Those that have discussed it have found it inapplicable to the facts before
them. See, e.g., Krofft, 562 F.2d at 1171 & n. 16 (defendants infringed by producing "McDonaldland" television
commercials substantially similar to plaintiffs' "H.R. Pufnstuf" children's television show; court found there "may be
certain rare instances when first amendment considerations will operate to limit copyright protection for graphic
expressions of newsworthy events" but Nimmer exception was inapplicable because plaintiffs' work did not fit Nimmer's
definition of a news photograph); Roy Export Co. Estab. of Vaduz v. Columbia Broadcasting Sys., Inc., 672 F.2d 1095,
1100 (2d Cir.1982) (defendant CBS infringed by including copyrighted film clips from several Charlie Chaplin movies in a
television biography of the comedian; court stated "even if we were inclined to recognize some narrow exception [such
as the one Nimmer suggests] on extraordinary facts, we would still conclude that the facts in this case could not support
the invention or application of even a limited privilege" because the "showing of copyrighted films was not essential to
CBS's news report of Charlie Chaplin's death or to its assessment of his place in history"); Iowa State Univ. Research
Found., Inc. v. American Broadcasting Cos., Inc., 621 F.2d 57, 61 n. 6 (2d Cir.1980) (defendant ABC infringed by including
in its film biography of an Olympic wrestler portions of an earlier film biography of the wrestler produced by two
university students; court recognized that in the "almost unique instance" of the Zapruder film, "it is at least arguable
that the informational value of that film cannot be separated from the photographer's expression" but "such situations
are rare" and the student film at issue "does not fall within this limited category"); Pacific & S. Co., Inc. v. Duncan, 572
F.Supp. 1186, 1193 (N.D.Ga.1983) (defendant, a video monitoring service like AVRS, infringed television station's
copyright in a news feature about a "fitness trail" at a local college; court found Nimmer's hypothesis "theoretically
provocative" but inapplicable because the "soft news" story, "though informational, hardly fits in a category with film of
the My Lai massacre" and because both the story and the trail itself were available for viewing), aff'd in part and rev'd in
part, 744 F.2d 1490(11th Cir.1984)
6
AVRS cites the Supreme Court's statement in Sony that "[c]opying a news broadcast may have a stronger claim to fair
use than copying a motion picture," 464 U.S. at 455 n. 40, 104 S.Ct. at 795, to support its contention that the nature of
the copyrighted work at issue in this case outweighs the commercial use to which it was put. AVRS takes the Sony
Court's statement out of context. The Court was explaining that some copyrights are more valuable because they
"govern material with broad potential secondary markets. Such material may well have a broader claim to protection
because of the greater potential for commercial harm." Id. Thus, "[c]opying a news broadcast may have a stronger claim
to fair use than copying a motion picture" because the potential market for copies of news broadcasts is not as great as
that for copies of movies. This discussion concerns not the second factor, the nature of the copyrighted work, but the
fourth factor, the effect upon the potential market for the copyrighted work

7
AVRS argues that because its service is essentially one of time-shifting, the third factor would not count against a finding
of fair use even if AVRS had copied all of LANS's copyrighted footage of the train wreck and plane crash. AVRS relies on
the statement in Sony that because "time-shifting merely enables a viewer to see [a televised copyrighted audiovisual
work] which he had been invited to witness in its entirety free of charge, the fact that the entire work is reproduced
does not have its ordinary effect of militating against a finding of fair use." Sony, 464 U.S. at 449-50, 104 S.Ct. at 792
(citation omitted). Again, AVRS's reliance on Sony is misplaced. While a viewer is "invited to witness [a telecast program]
in its entirety free of charge" and may therefore do so at a time the viewer finds convenient, the viewer is not invited to
sell copies of the program

8
AVRS does not qualify for the exemption from liability provided by 17 U.S.C. § 109(a), which allows the lawful owner of a
copy of a copyrighted work to sell the copy. AVRS did not purchase from LANS the copies of the tapes AVRS sold, and the
television stations that broadcast the tapes were only licensed to use them and could not authorize AVRS to sell them.
See 17 U.S.C. § 109(d) (privilege of selling copy does not "extend to any person who has acquired possession of the copy
... from the copyright owner, by rental, lease, loan, or otherwise, without acquiring ownership of it"); Duncan, 744 F.2d
at 1494 n. 6 (for purposes of 17 U.S.C. § 109, the defendant video news monitoring service "cannot be considered a
newspaper clipping service because it does not purchase the copy that it sells to its clients"); see also United States v.
Wise, 550 F.2d 1180, 1190-91 (9th Cir.1977) (for purposes of 17 U.S.C. § 27, predecessor to 17 U.S.C. § 109, theaters
granted license to exhibit films did not own the films and so could not lawfully have sold them)
9
Nonetheless, to avoid unnecessary litigation in the future, it would be prudent for LANS to require its licensees to
identify LANS's footage when it is broadcast

10
We also reject AVRS's argument that the court erred in awarding statutory damages of $10,000 rather than $5,000 for
the infringement of the copyright to the plane crash footage. The argument hinges on AVRS's theory that the district
court believed each of the two infringements was worth half the statutory maximum of $20,000, but that because the
statutory maximum for the plane crash tape was actually $10,000, the court should have awarded LANS only $5,000 for
that infringement

There is no evidence the district court awarded $10,000 for the plane crash footage infringement based on a belief the
infringement was worth half the statutory maximum; the court could simply have believed the infringement merited a
$10,000 damage award.

In any case, the statutory maximum for the infringement of the copyright to the plane crash footage was $20,000. The
court found the infringement occurred on March 1, 1989, the date the statutory maximum increased from $10,000 to
$20,000 under the Berne Convention. See Historical and Statutory Notes to 17 U.S.C.A. § 504 (West Supp.1992).

11
AVRS's motion to supplement the excerpts of record with material previously stricken as outside the record is denied.
LANS's request for sanctions against AVRS for bringing the motion is also denied
WHELAN ASSOCIATES VS JASLOW DENTAL LAB
Whelan Associates Inc. v. Jaslow Dental Laboratory, Inc., et al
U.S. Court of Appeals, Third Circuit
August 4, 1986
797 F.2d 1222, 230 USPQ 481
[Editor's note: This case is discussed in Legal Protection of Digital Information in:
Chapter 2, Section III.A. (Structure, Sequence, and Organization), and
Chapter 2, Section V. (Reverse Engineering Of Software).]

Becker, Circuit Judge.

This appeal involves a computer program for the operation of a dental laboratory, and calls upon us to apply the
principles underlying our venerable copyright laws to the relatively new field of computer technology to determine the
scope of copyright protection of a computer program. More particularly, in this case of first impression in the courts of
appeals, we must determine whether the structure (or sequence and organization)1 of a computer program is
protectible by copyright, or whether the protection of the copyright law extends only as far as the literal computer code.
The district court found that the copyright <797 F.2d 1225> law covered these non-literal elements of the program, and
we agree. This conclusion in turn requires us to consider whether there was sufficient evidence of substantial similarity
between the structures of the two programs at issue in this case to uphold the district court’s finding of copyright
infringement. Because we find that there was enough evidence, we affirm.

I. Factual Background

Appellant Jaslow Dental Laboratory, Inc. (“Jaslow Lab”) is a Pennsylvania corporation in the business of
manufacturing dental prosthetics and devices. Appellant Dentcom, Inc. (“Dentcom”) is a Pennsylvania corporation in the
business of developing and marketing computer programs for use by dental laboratories. Dentcom was formed out of
the events that gave rise to this suit, and its history will be recounted below. Individual appellants Edward Jaslow and his
son Rand Jaslow are officers and shareholders in both Jaslow Lab and Dentcom. Appellants were defendants in the
district court. Plaintiff-appellee Whelan Associates, Inc. (“Whelan Associates”) is also a Pennsylvania corporation,
engaged in the business of developing and marketing custom computer programs.
Jaslow Lab, like any other small- or medium-sized business of moderate complexity, has significant bookkeeping
and administrative tasks. Each other for equipment must be registered and processed; inventory must be maintained;
customer lists must be continually updated; invoicing, billing, and accounts <230 USPQ 482> receivable, must be dealt
with. While many of these functions are common to all businesses, the nature of the dental prosthetics business
apparently requires some variations on the basic theme.
Although Rand Jaslow had not had extensive experience with computers, he believed that the business operations
of Jaslow Lab could be made more efficient if they were computerized. In early 1978, he therefore bought a small
personal computer and tried to teach himself how to program it so that it would be of use to Jaslow Lab. Although he
wrote a program for the computer, he was ultimately not successful, limited by both his lack of expertise and the
relatively small capacity of his particular computer.
A few months later, stymied by his own lack of success but still confident that Jaslow Lab would profit from
computerization, Rand Jaslow hired the Strohl Systems Group, Inc. (“Strohl”), a small corporation that developed
custom-made software to develop a program that would on Jaslow Lab’s new IBM Series One computer and take care of
the lab’s business needs. Jaslow Lab and Strohl entered into an agreement providing that Strohl would design a system
for Jaslow Lab’s needs and that after Strohl had installed the system Strohl could market it to other dental laboratories.
Jaslow Lab would receive a 10% royalty on all such sales.2 The person at Strohl responsible for the Jaslow Labs account
was Elaine Whelan, an experienced programmer who was an officer and half-owner of Strohl.
Ms. Whelan’s first step was to visit Jaslow Lab and interview Rand Jaslow and others to learn how the laboratory
worked and what its needs were. She also visited other dental laboratories and interviewed people there, so that she
would better understand <797 F.2d 1226> the layout, workflow, and administration of dental laboratories generally.
After this education into the ways of dental laboratories – and Jaslow Lab, in particular – Ms. Whelan wrote a program
called Dentalab for Jaslow Lab. Dentalab was written in a computer language known as EDL (Even Driven Language), so
that it would work with IBM Series One machines. The program was completed and was operative at Jaslow Lab around
March 1979.
Presumably with an eye towards exploiting the economic potential of the Dentalab program, Ms. Whelan left
Strohl in November, 1979, to form her own business, Whelan Associates, Inc., which acquired Strohl’s interest in the
Dentalab program. Shortly thereafter, Whelan Associates entered into negotiations with Jaslow Lab for Jaslow Lab to be
Whelan Associates’ sales representative for the Dentalab program. Whelan Associates and Jaslow Lab entered into an
agreement on July 30, 1980, according to which Jaslow Lab agreed to use its “best efforts and to act diligently in the
marketing of the Dentalab package,” and Whelan Associates agreed to “use its best efforts and to act diligently to
improve and augment the previously successfully designed Dentalab package.” App. at 1779. The agreement stated that
Jaslow Lab would receive 35% of the gross price of any programs sold and 5% of the price of any modifications to the
programs. The agreement was for one year and was then terminable by either party on thirty days’ notice.
The parties’ business relationship worked successfully for two years.3 During this time, as Rand Jaslow became
more familiar with computer programming, he realized that because Dentalab was written in EDL it could not be used
on computers that many of the smaller dental prosthetics firms were using, for which EDL had not been implemented.
Sensing that there might be a market for a program that served essentially the same function as Dentalab but that could
be used more widely, Rand Jaslow began in May or June of 1982 to develop in his spare time a program in the BASIC
language for such computers. That program, when completed, became the alleged copyright infringer in this suit; it was
called <230 USPQ 483> the Dentcom PC program (“Dentcom program”).4
It appears that Rand Jaslow was sanguine about the prospects of his program for smaller computers. After
approximately a year of work, on May 31, 1983, his attorney sent a letter to Whelan Associates giving one month notice
of termination of the agreement between Whelan Associates and Jaslow Lab.5 The letter stated that Jaslow Lab
considered itself to be the exclusive marketer of the Dentalab program which, the letter dated, “contains valuable trade
secrets of Jaslow Dental Laboratory.” The letter concluded with a thinly veiled threat to Whelan Associates: “I . . . look
for your immediate response confirming that you will respect the rights of Jaslow and not use or disclose to others the
trade secrets of Jaslow.” App. at 1221.
Approximately two months later, on about August 1, Edward and Rand Jaslow, Paul Mohr, and Joseph Cerra
formed defendant-appellant Dentcom to sell the <797 F.2d 1227> Dentcom program.6 At about the same time, Rand
Jaslow and Jaslow Lab employed a professional computer programmer, Jonathan Novak, to complete the Dentcom
program. The program was soon finished, and Dentcom proceeded to sell it to dental prosthetics companies that had
personal computers. Dentcom sold both the Dentalab and Dentcom programs, and advertised the Dentcom program as
“a new version of the Dentlab computer system.” App. at 178: 1766-69; 1567-73. Despite Jaslow Lab’s May 31 letter
warning Whelan Associates not to sell the Dentalab program, Whelan Associates continued to market Dentalab. This
precipitated the present litigation.

II. Procedural History

On June 30, 1983, Jaslow Lab filed suit in the Court of Common Pleas of Montgomery County (Pennsylvania),
alleging that Whelan Associates had misappropriated its trade secrets. Whelan Associates responded by filing the instant
suit in the United States District Court for the Eastern District of Pennsylvania on September 21, 1983. As set forth in its
amended complaint, Whelan Associates alleged that Dentcom’s licensing of the Dentalab and Dentcom programs
infringed Whelan Associates’ copyright in Dentalab, App. at 452-53; that Dentcom’s use of the terms “Dentlab” or
“Dentalab,” violated Pennsylvania common law and 15 U.S.C. §1125(a) 15 USC 1125 (Lanham Trademark Act of 1946)
(false designation of origin), App. at 454-57; and that Dentcom’s activities violated various other federal and state laws
pertaining to unfair competition and tortious interference with contractual relations, App. at 457-63. Whelan Associates
sought injunctive relief, as well as compensatory and punitive damages. App. at 464-69.
Jaslow Lab and its co-defendants answered, denying all liability. They claimed that Whelan Associates’ copyright
was invalid for two reasons. First, they said that although he had not been listed in the copyright registration, Rand
Jaslow had been a co-author (with Elaine Whelan) of the Dentalab program. The omission of Rand Jaslow from the
registration form, defendants averred, rendered the copyright defective. App. at 506-09. Second, the defendants
maintained that even if Rand Jaslow had not co-authored the program, he owned the copyright because the program
had been written by someone employed by him. App. at 507. Defendants also averred that Rand Jaslow had developed
the Dentcom system independently, and therefore could not have violated Whelan Associate’s copyright, even if the
copyright were valid.7 Finally,<230 USPQ 484> defendants claimed that their use of “Dentalab” or “Dentlab” violated
neither federal nor state law, for, inter alia those terms are merely general descriptions of goods and services, not
names of particular products. App. at 504. Defendants counterclaimed that Whelan Associates had usurped defendants’
copyright and that by continuing to sell Dentalab, Whelan Associates was engaging in unfair competition. App. at 505-
11. By agreement of the parties, the trade secret action was removed from the Court of Common <797 F.2d 1228> Pleas
to the district court and became a counterclaim. App. at 509-12.
The first procedural blow was struck by the defendants, who moved almost immediately for a preliminary
injunction to enjoin Whelan Associates from using Jaslow Labs’ trade secrets. After a three-day hearing, the district court
denied the motion in a bench opinion delivered on November 2, 1983. The court held that the defendants had not
shown a likelihood of success on the merits because they had failed to prove that any of Jaslow Lab’s trade secrets were
in the Dentalab program. Moreover, the court held that the defendants had not proven irreparable harm and that they
had approached the court with “unclean hands” on account of their use of the term “Dentlab,” which could be and was
confused for Dentalab. App. 443-44; 446-47.
A quick victory proving beyond the defendants’ reach, the parties prepared for a protracted battle. Discovery
proceeded on each side, and a three-day bench trial began on July 9, 1984. At trial, Whelan Associates continued to
press all of its claims – copyright violations, unfair competition, and tortious interference with contractual relations. The
defendants abandoned the trade secret claim that had failed them in the preliminary injunction battle, but maintained
their position that Rand Jaslow owned the copyright to Dentalab. Defendants continued to deny Whelan Associates’
allegations.
The principal witnesses were Elaine Whelan, Rand Jaslow, and two expert witnesses, Dr. Thomas Moore for
Whelan Associates and Stephen Ness on behalf of the defendants. Whelan and Jaslow testified about the dealings and
negotiations between the parties. Dr. Moore and Mr. Ness examined the programs and testified about the programs’
similarities and differences. Dr. Moore testified that although the Dentcom program was not a translation of the
Dentalab system, the programs were similar in three significant respects. He testified that most of the file structures,
and the screen outputs, of the programs were virtually identical. App. at 682-704 (file structures); id. at 681-82 (screen
outputs). He also testified that five particularly important “subroutines” within both programs – order entry, invoicing,
accounts receivable, end of day procedure, and end of month procedure – performed almost identically in both
programs. App. at 704-18.8 Mr. Ness compared the source and object codes9 of the Dentalab, Dentcom, and Datamaster
programs, see supra n.4, and testified at length about the many ways that the programs differed from one another. He
concluded that “substantive differences in programming style, in programming structure, in algorithms and data
structures, all indicate that the Dentcom system is not directly derived from either of the other systems.” App. at 823-
24. In his written report, however, which was entered into evidence, Mr. Ness conceded that the Dentalab and Dentcom
programs had “overall structural similarities.” App. at 1798.
The district court ruled for Whelan Associates on all grounds. Whelan Associates v. Jaslow Dental Laboratory,609
F.Supp. 1307, 225 USPQ 156(E.D. Pa. 1985). It found that Elaine Whelan was the sole author of the Dentalab system
(and, hence, that Rand Jaslow was not a co-author) and that the contract between Strohl and Rand Jaslow, see
supra n.2, made clear that Strohl would retain full ownership over the software. Whelan Associates v. Jaslow Dental
Laboratory, 609 F.Supp. at 1318-19, 225 USPQ at 164. The court thus concluded that Whelan Associates’ copyright in the
Dentalab System was valid, and that Dentcom’s sales of the Dentalab program were violations of that copyright.10 Id. at
1320, 225 USPQ at 165.
The court also found that Rand Jaslow had not created the Dentcom system independently, <797 F.2d 1229> and
that the Dentcom system, although written in a different computer language from the Dentalab, and although not a
direct transliteration of Dentalab, was substantially similar to Dentalab because its structure and overall organization
were substantially similar. Id. at 1321-22. (The district court’s opinion on this point is described infra). This substantial
similarity, in conjunction with Rand Jaslow’s acknowledged access to the Dentalab system, led the district court to
conclude that each sale of the Dentcom program by Dentcom11 violated Whelan Associates’ copyright on the Dentalab
system. The court therefore awarded <230 USPQ 485>Whelan Associates damages for these copyright infringements,
and enjoined Dentcom from selling any more copies of the Dentalab or Dentcom programs. Whelan Associates v. Jaslow
Dental Laboratory, 609 F.Supp. at 1322-23, 225 USPQ at 167. The court also held that plaintiffs had exclusive use of the
term “Dentalab,” and enjoined defendants from using either “Dentalab” or “Dentlab” in their business. Id. at 1324-
25, 225 USPQ at 169.
The parties filed a series of post-trial motions, primarily concerned with damage calculations and attorneys fees.
Upon the district court’s disposition of these motions, Whelan Associates v. Jaslow Dental Laboratory, 609 F.Supp.
1325,225 USPQ at 169 (E.D. Pa. 1985), the defendants filed their notices of appeal.12 On appeal, they raise a single issue:
whether the district court erred in its finding that the Dentcom program infringes the copyright of plaintiffs’ Dentalab
system.

III. Technological Background

We begin with a brief description of computer programs and an explanation of how they are written. This
introduction is necessary to our analysis of the issues in this case.
A computer program is a set of instructions to the computer.13 Most programs accept and process user-supplied
data. The fundamental processes utilized by a program are called algorithms (mechanical computational procedures)
and are at the heart of the program. See Keplinger, Computer Software – Its Nature and its Protection, 30 Emory L. J.
483, 484-85 (1984). These algorithms must be developed by the human creativity of the programmer, and the program
therefore cannot contain any algorithms not already considered by humans. Although a computer cannot think or
develop algorithms, it can execute them faster and more accurately than any human possibly could. See R.
Saltman, Copyright in Computer-Readable Works 59 (1977).
The creation of a program often takes place in several steps, moving from the general to the specific.14 Because
programs are intended to accomplish particular tasks, the first step in creating the program is identifying the problem
that the computer programmer is trying to solve. In this case, Rand Jaslow went to Strohl and stated that his problem
was recordkeeping for his business. Although this was an accurate statement of the problem, it was not specific enough
to guide Elaine Whelan. Before she could write the Dentalab program, she needed to know more about Jaslow Lab’s
business – how orders were processed, what special billing problems might arise, how inventory might be correlated to
orders, and other characteristics of the dental prosthetics trade.<797 F.2d 1230>
As the programmer learns more about the problem, she or he may begin to outline a solution. The outline can
take the form of a flowchart, which will break down the solution into a series of smaller units called “subroutines” or
“modules,”15 each of which deals with elements of the larger problem.See Note, Defining the Scope of Copyright
Protection for Computer Software, 38 Stan.L.Rev. 497, 500-01 (1986). A program’s efficiency depends in large part on the
arrangements of its modules and subroutines; although two programs could produce the same result, one might be
more efficient because of different internal arrangements of modules and subroutines. Because efficiency is a prime
concern in computer programs (an efficient program being obviously more valuable than a comparatively inefficient
one), the arrangement of modules and subroutines is a critical factor for any programmer. In the present case, the
Dentalab program had numerous modules pertaining to inventory, accounts receivable, various dentist-patient matters,
and payroll, among others. See App. at 1588-1698 (showing flowcharts of subroutines). Some of the modules were
simple; others were quite complex and involved fairly elaborate logical development.
As the program structure is refined, the programmer must make decisions about what data is needed, where
along the program’s operations the data should be introduced, how <230 USPQ 486> the data should be inputted, and
how it should be combined with other data. The arrangement of the data is accomplished by means of data files,
discussed infra,and is affected by the details of the program’s subroutines and modules, for different arrangements of
subroutines and modules may require data in different forms. Once again, there are numerous ways the programmer
can solve the data-organization problems she or he faces. Each solution may have particular characteristics – efficiencies
or inefficiencies, conveniences or quirks – that differentiate it from other solutions and make the overall program more
or less desirable. Because the Dentalab program was intended to handle all of the business-related aspects of a dental
laboratory, it had to accommodate and interrelate many different pieces and types of data including patients’ names,
dentists’ names, inventory, accounts receivable, accounts payable, and payroll.16
Once the detailed design of the program is completed, the coding begins.17 Each of the steps identified in the
design must be turned into a language that the computer can understand. This translation process in itself requires two
steps. The programmer first writes in a “source code,” which may be in one of several languages, such as COBOL, BASIC,
FORTRAN, or EDL.18 The choice of language depends upon which computers the programmer intends the program to be
used by, for some computers can read only certain languages.19 Once the program is written in source code, it is
translated into “object code,” which is a binary code, simply a concatenation of <797 F.2d 1231> “O” ‘s and “1” ‘s. In
every program, it is the object code, not the source code, that directs the computer to perform functions. The object
code is therefore the final instruction to the computer.20 21
As this brief summary demonstrates, the coding process is a comparatively small part of programming. By far the
larger portion of the expense and difficulty in creating computer programs is attributable to the development of the
structure and logic of the program, and to debugging, documentation and maintenance, rather than to the
coding. See Frank, Critical Issues in Software 22 (1983) (only 20% of the cost of program development goes into coding);
Zelkowitz, Perspective on Software Engineering, 10 Computing Surveys 197-216 (June, 1978). See also Info World, Nov.
11, 1985 at 13 (“the ‘look and feel’ of a computer software product often involves much more creativity and often is of
greater commercial value than <230 USPQ 487> the program code which implements the product . . .”). The evidence in
this case is that Ms. Whelan spent a tremendous amount of time studying Jaslow Labs, organizing the modules and
subroutines for the Dentalab program, and working out the data arrangements, and a comparatively small amount of
time actually coding the Dentalab program.

IV. Legal Background

A. The elements of a copyright infringement action

To prove that its copyright has been infringed, Whelan Associates must show two things: that it owned the
copyright on Dentalab, and that Rand Jaslow copied Dentalab in making the Dentacom program. Sid & Marty Krofft
Television Prods., Inc. v. McDonald’s Corp., 562 F.2d 1157, 1162, 196 USPQ 97, 100 (9th Cir. 1977); Reyher v. Children’s
Television Workshop, 533 F.2d 87, 90, 190 USPQ 387, 389 (2d Cir. 1985), cert. denied, 429 U.S. 980,192 USPQ 64 (1976);
3 Nimmer On Copyright §13.01 (1985) *referred to hereinafter as “Nimmer”+. Although it was disputed below, see
supra, the district court determined, and it is not challenged here, that Whelan Associates owned the copyright to the
Dentalab program. We are thus concerned only with whether it has been shown that Rand Jaslow copied the Dentalab
program.
As it is rarely possible to prove copying through direct evidence, Roth Greeting Cards v. United Card Co.,429 F.2d
1106, 1110, 166 USPQ 291, 294(9th Cir. 1970), copying may <797 F.2d 1232> be proved inferentially by showing that the
defendant had access to the allegedly infringed copyrighted work and that the allegedly infringing work is substantially
similar to the copyrighted work. Ferguson v. National Broadcasting Co., 584 F.2d 111, 113,200 USPQ 65 (5th Cir.
1978); Sid & Marty Krofft Television Prods. Inc., supra; Universal Athletic Sales Co. v. Salkeld, 511 F.2d 904, 907, 185
USPQ 76,77 (3d Cir.), cert. denied, 423 U.S. 863 (1975); Midway Mfg. Co. v. Strohon, 564 F.Supp. 741, 753, 219 USPQ
42, 52 (N.D. Ill. 1983). The district court found, and there it is uncontested that Rand Jaslow had access to the Dentalab
program, both because Dentalab was the program used in Jaslow Labs and because Rand Jaslow acted as sales
representative for Whelan Associates. See Whelan Associates v. Jaslow Dental Laboratory, 609 F.Supp. at 1314, 225
USPQ at 161.22 Thus, the sole question is whether there was substantial similarity between the Dentcom and Dentalab
programs.23

B. The appropriate test for substantial similarity in computer program cases

The leading case of Arnstein v. Porter,154 F.2d 464, 468-69, 68 USPQ 288, 292-93 (2d Cir. 1946), suggested a
bifurcated substantial similarity test whereby a finder of fact makes two findings of substantial similarity to support a
copyright violation. First, the fact-finder must decide whether there is sufficient similarity between the two works in
question to conclude that the alleged infringer used the copyrighted work in making his own. On this issue expert
testimony may be received to aid the trier of fact. (This is called the “extrinsic” test of substantial similarity. Sid & Marty
Krofft Television Prods., Inc. v. McDonald’s Corp., 562 F.2d at 1164-65, 196 USPQ at 102. Second, if the answer to the
first question is in the affirmative, the fact-finder must decide without the aid of expert testimony, but with the
perspective of the “lay observer,” whether the copying was “illicit,” or “an unlawful appropriation” of the copyrighted
work. (This is called an “intrinsic” test of substantial similarity. Id.) The Arnsteintest has been adopted in this
circuit.See Universal Athletic Sales Co., 511 F.2d at 907, 185 USPQ at 78.
The district court heard expert testimony. See supra 12-13;infra at 58-62. It did not bifurcate its analysis, however,
but made only a single finding of substantial similarity. See Whelan Associates v. Jaslow Dental Laboratory, 609 F.Supp.
at 1321-22, 225 USPQ at 166. It would thus appear to have contravened the law of this circuit. Nevertheless, for the
reasons that follow, we believe that the district court applied an appropriate standard.
The ordinary observer test, which was developed in cases involving novels, plays, and paintings, and which does
not permit expert testimony, is of doubtful value in cases involving computer programs on account of the programs’
complexity and unfamiliarity to most members of the public. SeeNote,Copyright Infringement of Computer Programs: A
Modification of the Substantial Similarity Test, 68 Minn. L. Rev. 1264, 1285-88 (1984). Cf.Note,Copyright Infringement
Actions: The <230 USPQ 488> Proper Role for Audience Reactions in Determining Substantial Similarity, 54 S.Cal. L. Rev.
385 (1981) (criticizing lay observer standard when objects in question are intended for particular, identifiable
audiences). Moreover, the distinction between the two parts of the Arnstein test may be of doubtful value when the
finder of fact is the same person for each step: that person has been exposed to expert <797 F.2d 1233> evidence in the
first step, yet she or he is supposed to ignore or “forget” that evidence in analyzing the problem under the second step.
Especially in complex cases, we doubt that the “forgetting” can be effective when the expert testimony is essential to
even the most fundamental understanding of the objects in question.
On account of these problems with the standard, we believe that the ordinary observer test is not useful and is
potentially misleading when the subjects of the copyright are particularly complex, such as computer programs. We
therefore join the growing number of courts which do not apply the ordinary observer test in copyright cases involving
exceptionally difficult materials, like computer programs, but instead adopt a single substantial similarity inquiry
according to which both lay and expert testimony would be admissible. See E.F. Johnson Co. v. Uniden Corp.,623 F.Supp.
1485, 1493,228 USPQ 891, 896 (D.Minn. 1985); Hubco Data Products Corp. v. Management Assistance Inc., 2Copyright L.
Rep. (CCH) ¶25,529 (D. Idaho Feb. 3, 1983) (enunciating bifurcated test, but relying entirely on expert
testimony); Midway Mfg. Co. v. Strohon, 564 F.Supp. 741, 752-53, 219 USPQ 42, 51-52(N.D. Ill. 1983) (relying entirely on
expert testimony to find substantial similarity); see also Fed.R. Evid. 702 (“If *expert testimony+ will assist the trier of fact
to understand the evidence or to determine a fact in issue, a witness . . . may testify thereto in the form of an opinion or
otherwise.”). That was the test applied by the district court in this case.24

C. The arguments on appeal

On appeal, the defendants attack on two grounds the district court’s holding that there was sufficient evidence of
substantial similarity. First, the defendants argue that because the district court did not find any similarity between the
“literal” elements (source and object code) of the programs, but only similarity in their overall structures, its finding of
substantial similarity was incorrect, for the copyright covers only the literal elements of computer programs, not their
overall structures. Defendants’ second argument is that even if the protection of copyright law extends to “non-literal”
elements such as the structure of computer programs, there was not sufficient evidence of substantial similarity to
sustain the district court’s holding in this case. We consider these arguments in turn.25

V. The Scope Of Copyright Protection Of Computer Programs

It is well, though recently, established that copyright protection extends to a program’s source and object
codes. Stern Elecs., Inc. v. Kaufman, 669 F.2d 852, 855 n.3, 213 USPQ 443, 444 n.3 (2d Cir. 1982) (source code); Apple
Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1246-47, 219 USPQ 113, 118-19 (3d Cir. 1983) (source and
object code), cert. dismissed, 464 U.S. 1033 (1984); Williams Elecs., Inc. v. Artic International, Inc.,685 F.2d 870, 215
USPQ 405 (3d Cir. 1982) (object code). In this case, however, the district court did not find any copying of the source or
object codes, nor did the plaintiff allege such copying. Rather, the district court held that the Dentalab copyright was
infringed because the overall structure of Dentcom was substantially similar to the overall structure of Dentalab. Whelan
Associates v. Jaslow Dental Laboratory, 609 F.Supp. at 1321-22, 225 USPQ at 166. The question therefore <797 F.2d
1234> arises whether mere similarity in the overall structure of programs can be the basis for a copyright infringement,
or, put differently, whether a program’s copyright protection covers the structure of the program or only the program’s
literal elements, i.e., its source and object codes.
Title 17 U.S.C. §102(a)(1) extends copyright protection to “literary works,” and computer programs are classified
as literary works for the purposes of copyright. See H.R. Rep. No. 1476, 94th Cong., 2d Sess. 54, reprinted in <230 USPQ
489> 1976 U.S. Code Cong. & Ad. News 5659, 5667. The copyrights of other literary works can be infringed even when
there is no substantial similarity between the works’ literal elements. One can violate the copyright of a play or book by
copying its plot or plot devices. See, e.g., Twentieth Century-Fox Film Corp. v. MCA, Inc., 715 F.2d 1327, 1329, 217 USPQ
611, 612 (9th Cir. 1983) (13 alleged distinctive plot similarities between Battlestar Galactica andStar Wars may be basis
for a finding of copyright violation); Sid & Marty Krofft Television Productions, Inc., 562 F.2d at 1167, 196 USPQ at
104 (similarities between McDonaldland characters and H.R. Pufnstuf characters can be established by “ ‘total concept
and feel’ “ of the two productions (quoting Roth Greeting Cards v. United Card Co., 429 F.2d 1106, 1110, 166 USPQ
291, 294 (9th Cir. 1970) ); Sheldon v. Metro-Goldwyn Pictures Corp.,81 F.2d 49, 54-55, 28 USPQ 330, 335-36
(1936); Nichols v. Universal Pictures Corp., 45 F.2d 119, 121, 7 USPQ 84, 96 (2d Cir. 1930) (copyright “cannot be limited
literally to the text, else a plagiarist would escape by immaterial variations”). By analogy to other literary works, it would
thus appear that the copyrights of computer programs can be infringed even absent copying of the literal elements of
the program.26 Defendants contend, however, that what is true of other literary works is not true of computer programs.
They assert two principal reasons, which we consider in turn.

A. Section 102(b) and the dichotomy between idea and expression

It is axiomatic that copyright does not protect ideas, but only expressions of ideas. This rule, first enunciated
in Baker v. Selden, 101 U.S. 99 (1879), has been repeated in numerous cases. See, e.g., Mazer v. Stein, 347 U.S. 201,
217, 100 USPQ 325, 332 (1954) (“Unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is
given only to the expression of the idea – not the idea itself.” *citation omitted+); Universal Athletic Sales Co., 511 F.2d at
906, 185 USPQ at 78;Dymow v. Bolton, 11 F.2d 690, 691 (2d Cir. 1926); see generally A. Latman, The Copyright Law 31-
35 (5th ed. 1979); 1 Nimmer §2.03[D]. The rule has also been embodied in statute. Title 17 U.S.C. §102(b) (1982) states:
In no case does copyright protection for an original work of authorship extend to any idea, procedure, process,
system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained,
illustrated, or embodied in such work.
The legislative history of this section, adopted in 1976, makes clear that §102(b) was intended to express the idea-
expression dichotomy.See H.R. Rep. No. 1476 at 57 reprinted in 1976 U.S. Code Cong. & Ad. News at 5670 (§102(b) is
intended to “restate . . . that the basic dichotomy between expression and idea remains unchanged.”) See also Apple
Computer, supra, 714 F.2d at 1252, 219 USPQ at 123. <797 F.2d 1235>
Defendants argue that the structure of a computer program is, by definition, the idea and not the expression of
the idea, and therefore that the structure cannot be protected by the program copyright. Under the defendants’
approach, any other decision would be contrary to §102(b). We divide our consideration of this argument into two parts.
First, we examine the caselaw concerning the distinction between idea and expression, and derive from it a rule for
distinguishing idea from expression in the context of computer programs. We then apply that rule to the facts of this
case.

1. A rule for distinguishing idea from expression in computer programs


It is frequently difficult to distinguish the idea from the expression thereof. No less an authority than Learned
Hand, after a career that included writing some of the leading copyright opinions, concluded that the distinction will
“inevitably be ad hoc.” Peter Pan Fabrics, Inc. v. Martin Weiner Corp.,274 F.2d 487, 489, 124 USPQ 154, 155 (2d Cir.
1960). See also Knowles & Palmieri, Dissecting Krofft: An Expression of New Ideas in Copyright?, 8 San. Fern. Val. L. Rev.
109, 126 (1980) (arguing that there can be no meaningful distinction between idea and expression). Although we
acknowledge the wisdom of Judge Hand’s remark, we feel that a review of relevant copyright precedent will enable us
to formulate a rule applicable in this case. In addition, precisely because the line between idea and expression is elusive,
we must pay particular attention to the pragmatic considerations that underlie the distinction and copyright law
generally. In this regard, we must remember that <230 USPQ 490> the purpose of the copyright law is to create the
most efficient and productive balance between protection (incentive) and dissemination of information, to promote
learning, culture and development. See U.S. Const. Art. 1 §8 cl. 8 [Copyright Clause] (giving Congress the power to
“promote the Progress of Science and useful Arts”).27
We begin our analysis with the case of Baker v. Selden, which, in addition to being a seminal case in the law of
copyright generally, is particularly relevant here because, like the instant case, it involved a utilitarian work, rather than
an artistic or fictional one. In Baker v. Selden, the plaintiff Selden obtained a copyright on his book, “Selden’s Condensed
Ledger, or Bookkeeping Simplified,” which described a new, simplified system of accounting. Included in the book were
certain “blank forms,” pages with ruled lines and headings, for use in Selden’s accounting system. Selden alleged that
Baker had infringed Selden’s copyright by making and selling accounting books that used substantially the same system
as Selden’s and that reproduced Selden’s blank forms. No one disputed that Baker had the right to use and promulgate
Selden’s system of accounting, for all parties agreed that the system could not be copyrighted, although the Court
opined that it might be patentable. Id. at 102. Nor did the parties dispute that the text of Baker’s book on accounting did
not infringe Selden’s copyright. The dispute centered on whether Selden’s blank forms were part of the method (idea) of
Selden’s book, and hence noncopyrightable, or part of the copyrightable text (expression). Id. at 101. <797 F.2d 1236>
In deciding this point, the Court distinguished what was protectible from what was not protectible as follows:
[W]here the art [i.e., the method of accounting] it teaches cannot be used without employing the methods and
diagrams used to illustrate the book, or such as are similar to them, such methods and diagrams are to be considered as
necessary incidents to the art, and given to the public.
Id. at 103. Applying this test, the Court held that the blank forms were necessary incidents to Selden’s method of
accounting, and hence were not entitled to any copyright protection. Id. at 104.
The Court’s test in Baker v. Selden suggests a way to distinguish idea from expression. Just as Baker v.
Selden focused on the end sought to be achieved by Selden’s book, the line between idea and expression may be drawn
with reference to the end sought to be achieved by the work in question. In other words, the purpose or function of a
utilitarian work would be the work’s idea, and everything that is not necessary to that purpose or function would be part
of the expression of the idea. Cf. Apple Computer, Inc. v. Formula Int’l Inc., 562 F.Supp. 775, 783, 218 USPQ 47, 53 (C.D.
Ca. 1983+ *“Apple seeks here not to protect ideas (i.e. making the machine perform particular functions) but rather to
protect their particular expressions . . .”+, aff’d.725 F.2d 521, 221 USPQ 762 (9th Cir. 1984). Where there are various
means of achieving the desired purpose, then the particular means chosen is not necessary to the purpose; hence, there
is expression, not idea.28
Consideration of copyright doctrines related to scenes a faire and fact-intensive works supports our formulation,
for they reflect the same underlying principle. Scenes a faire are “incidents, characters or settings which are as a
practical matter indispensable . . . in the treatment of a given topic.” Atari, Inc. v. North American Philips Consumer
Elecs. Corp., 672 F.2d 607, 616, 214 USPQ 33, 40 (7th Cir.), cert. denied, 459 U.S. 880 (1982). See also See v. Durang,711
F.2d 141, 143, 219 USPQ 771, 772 (9th Cir. 1983). It is well-settled doctrine <230 USPQ 491> that scenes a faire are
afforded no copyright protection.29
Scenes a faire are afforded no protection because the subject matter represented can be expressed in no other
way than through the particular scene a faire. Therefore, granting a copyright “would give the first author a monopoly
on the commonplace ideas behind the scenes a faire.” Landsberg v. Scrabble Crossword Game Players, Inc.,736 F.2d at
489, 221 USPQ at 1143.30 This is merely a restatement of the hypothesis advanced above, that the purpose or function
of a work or literary device is part of that device’s “idea” (unprotectible portion). It follows that anything necessary to
effecting that function is also, necessarily, part of the idea, too.
Fact intensive works are given similarly limited copyright coverage. See, e.g., Landsberg, 736 F.2d at 488, 221
USPQ at 1142;<797 F.2d 1237>Miller v. Universal City Studios, Inc., 650 F.2d 1365, 1372,212 USPQ 345, 350 [5th Cir.
1981]. Once again, the reason appears to be that there are only a limited number of ways to express factual material,
and therefore the purpose of the literary work – telling a truthful story – can be accomplished only by employing one of
a limited number of devices. Landsberg, 736 F.2d at 488, 221 USPQ at 1142.Those devices therefore belong to the idea,
not the expression, of the historical or factual work.
Although the economic implications of this rule are necessarily somewhat speculative, we nevertheless believe
that the rule would advance the basic purpose underlying the idea/expression distinction, “the preservation of the
balance between competition and protection reflected in the patent and copyright laws.” Herbert Rosenthal Jewelry
Corp. v. Kalpakian, 446 F.2d 738, 742,170 USPQ 557, 559 (9th Cir. 1971); see also Apple Computer, 714 F.2d at 1253, 219
USPQ at 123 [quoting Kalpakian); supra n. 27. As we stated above, see supra at 21, among the more significant costs in
computer programming are those attributable to developing the structure and logic of the program. The rule proposed
here, which allows copyright protection beyond the literal computer code, 31 would provide the proper incentive for
programmers by protecting their most valuable efforts, while not giving them a stranglehold over the development of
new computer devices that accomplish the same end.
The principal economic argument used against this position – used, that is, in support of the position that
programs’ literal elements are the only parts of the programs protected by the copyright law – is that computer
programs are so intricate, each step so dependent on all of the other steps, that they are almost impossible to copy
except literally, and that anyone who attempts to copy the structure of a program without copying its literal elements
must expend a tremendous amount of effort and creativity. In the words of one commentator: “One cannot simply
‘approximate’ the entire copyrighted computer program and create a similar operative program without the
expenditure of almost the same amount of time as the original programmer expended.” Note, 68 Minn. L. Rev. at 1290
(footnote omitted). According to this argument, such work should not be discouraged or penalized. A further argument
against our position is not economic but jurisprudential; another commentator argues that the concept of structure in
computer programs is too vague to be useful in copyright cases. Radcliffe, Recent Developments in Copyright Law
Related to Computer Software, 4 Computer L. Rep. 189, 194-97 (1985). He too would therefore appear to advocate
limiting copyright protection to programs’ literal codes.
Neither of the two arguments just described is persuasive. The first argument fails for two reasons. In the first
place, it is simply not true that “approximation” of a program short of perfect reproduction is valueless. To the contrary,
one can approximate a program and thereby gain a significant advantage over competitors even though additional work
is needed to complete the program. Second, the fact that it will take a great deal of effort to copy a copyrighted work
does not mean that the copier is not a copyright infringer. The issue in a copyrighted case is simply whether the
copyright holder’s expression has been copied, not how difficult it was to do the copying. Whether an alleged infringer
spent significant time and <230 USPQ 492> effort to copy an original work is therefore irrelevant to whether he has
pirated the expression of an original work.32
As to the second argument, it is surely true that limiting copyright protection to <797 F.2d 1238> computers’
literal codes would be simpler and would yield more definite answers than does our answer here. Ease of application is
not, however, a sufficient counterweight to the considerations we have adduced on behalf of our position.
Finally, one commentator argues that the process of development and progress in the field of computer
programming is significantly different from that in other fields, and therefore requires a particularly restricted
application of the copyright law. According to this argument, progress in the area of computer technology is achieved by
means of “stepping-stones,” a process that “requires plagiarizing in some manner the underlying copyrighted work.”
Note, 68 Minn. L. Rev. at 1292 [footnote omitted]. As a consequence, this commentator argues, giving computer
programs too much copyright protection will retard progress in the field.
We are not convinced that progress in computer technology or technique is qualitatively different from progress
in other areas of science or the arts. In balancing protection and dissemination, see supra at 31 & n. 27, the copyright
law has always recognized and tried to accommodate the fact that all intellectual pioneers build on the work of their
predecessors.33 Thus, copyright principles derived from other areas are applicable in the field of computer programs.

2. Application of the general rule to this case


The rule proposed here is certainly not problem-free. The rule has its greatest force in the analysis of utilitarian or
“functional” works, for the purpose of such works is easily stated and identified. By contrast, in cases involving works of
literature or “non-functional” visual representations, defining the purpose of the work may be difficult. Since it may be
impossible to discuss the purpose or function of a novel, poem, sculpture or painting, the rule may have little or no
application to cases involving such works. The present case presents no such difficulties, for it is clear that the purpose
of the utilitarian Dentalab program was to aid in the business operations of a dental laboratory.34 See supra 4-5. It is
equally clear that the structure of the program was not essential to that task: there are other programs on the market,
competitors of Dentalab and Dentcom, that perform the same functions but have different structures and designs.
This fact seems to have been dispositive for the district court:
The mere idea or concept of a computerized program for operating a dental laboratory would not in and of itself
be subject to copyright. Copyright law protects the manner in which the author expresses an idea or concept, but not
the idea itself. Albert E. Price v. Metzner, 574 F.Supp. 281, 219 USPQ 1092 (E.D. Pa. 1983). Copyrights do not protect
ideas – only expressions of ideas. Universal Athletic Sales Co. v. Salkeld, 511 F.2d 904, 908,185 USPQ 76, 78 (3d Cir.
1975). There are many ways that the same data may be organized, assembled, held, retrieved and utilized by a
computer. Different computer systems may functionally serve similar purposes without being copies of each other. There
is evidence in the record that there are other software programs for the business management of dental laboratories in
competition with plaintiff’s program. There is no contention that any of them infringe although <797 F.2d 1239> they
may incorporate many of the same ideas and functions. The ‘expression of the idea’ in a software computer program is
the manner in which the program operates, controls and regulates the computer in receiving, assembling, calculating,
retaining, correlating, and producing information either on a screen, print-out or by audio communication.
Whelan Associates v. Jaslow Laboratory,609 F.Supp. at 1320, 225 USPQ at 165 (emphasis <230 USPQ 493> added).
We agree. The conclusion is thus inescapable that the detailed structure of the Dentalab program is part of the
expression, not the idea, of that program.
Our conclusion is supported by SAS Institute, Inc. v. S&H Computer Systems, Inc., 605 F.Supp. 816, 225 USPQ
916 (M.D. Tenn. 1985), the only other case that has addressed this issue specifically, in which the court found that a
program’s copyright could extend beyond its literal elements to its structure and organization. In SAS, plaintiffs
supported their allegation of copyright infringement of their computer program with evidence of both literal and
organizational similarities between its program and the alleged infringer. Id. at 822, 825-26 , 225 USPQ at 919,. The court
found a copyright infringement, and although it did not discuss in detail its evaluation of the evidence, it is apparent that
the organizational similarities of the programs were relevant to its decision. After a brief discussion of the programs’
literal similarities, the court said:
In addition, the copying proven at trial does not affect only the specific lines of code cited by Dr. Peterson in his
testimony. Rather, to the extent that it represents copying of the organization and structural details of SAS, such copying
pervades the entire S&H product.
Id. at 830 ,225 USPQ at 926. Although the SAS court did not analyze the point in great depth, we are encouraged
by its conclusion.
The Copyright Act of 1976 provides further support, for it indicates that Congress intended that the structure and
organization of a literary work could be part of its expression protectible by copyright. Title 17 U.S.C. §103 (1982)
specifically extends copyright protection to compilations and derivative works. Title 17 U.S.C. §101, defines
“compilation” as “a work formed by the collection and assembling of preexisting materials or of data that are
selected, coordinated,or arranged in such a way that the resulting work as a whole constitutes an original work of
authorship,” and it defines “derivative work,” as one “based upon one or more preexisting works, such
as . . . abridgement, condensation, or any other form in which a work may berecast, transformed, or adapted.”
(emphasis added). Although the Code does not use the terms “sequence,” “order” or “structure,” it is clear from the
definition of compilations and derivative works, and the protection afforded them, that Congress was aware of the fact
that the sequencing and ordering of materials could be copyrighted, i.e., that the sequence and order could be parts of
the expression, not the idea, of a work.
Our solution may put us at odds with Judge Patrick Higginbotham’s scholarly opinion in Synercom Technology, Inc.
v. University Computing Co.,462 F.Supp. 1003, 199 USPQ 537 (N.D. Tex. 1978), which dealt with the question whether
the “input formats” of a computer program – the configurations and collations of the information entered into the
program – were idea or expression. The court held that the input formats were ideas, not expressions, and thus not
protectible. Synercom did not deal with precisely the materials at issue here – input formats are structurally simple as
compared to full programs – and it may therefore be distinguishable. However, insofar as the input formats are devices
for the organization of data into forms useful for computers, they are similar to programs; thus, Synercom is relevant
and we must come to grips with it.
Central to Judge Higginbotham’s analysis was his conviction that the organization and structure of the input
formats was inseparable from the idea underlying the formats. Although the court acknowledged that in some cases
structure and <797 F.2d 1240> sequence might be part of expression, not idea, see id. at 1014 , 199 USPQ at 547, it
stated that in the case of input formats, structure and organization were inherently part of the idea. The court put its
position in the form of a powerful rhetorical question: “if sequencing and ordering *are+ expression, what separable idea
is being expressed?” Id. at 1013 , 199 USPQ at 546.
To the extent that Synercom rested on the premise that there was a difference between the copyrightability of
sequence and form in the computer context and in any other context, we think that it is incorrect. As just noted, the
Copyright Act of 1976 demonstrates that Congress intended sequencing and ordering to be protectible in the
appropriate circumstances, see supra, and the computer field is not an exception to this general rule. Although Congress
was aware that computer programs posed a novel set of issues and problems for the copyright law, Congress did not
then make, and has not since made, any special provision for ordering and sequencing in the context of computer
programs. There is thus no statutory basis for treating computer programs differently from other literary works in this
regard.35 <230 USPQ 494>
Despite the fact that copyright protection extends to sequence and form in the computer context, unless we are
able to answer Judge Higginbotham’s powerful rhetorical question – “if sequencing and ordering *are+ expression, what
separable idea is being expressed?” – in our own case, we would have to hold that the structure of the Dentalab
program is part of its idea and is thus not protectible by copyright. Our answer has already been given, however: the
idea is the efficient organization of a dental laboratory (presumably, this poses different problems from the efficient
organization of some other kinds of laboratories or businesses). Because there are a variety of program structures
through which that idea can be expressed, the structure is not a necessary incident to that idea.”36 See supra 39.
B. The CONTU Report – Defendants’ second argument against copyright protection for non-literal elements of
computer programs relies not on venerable principles of copyright law, but on the report of a special congressional
commission. In 1974, concerned that the rapidly developing field of computer technology was outpacing the extant
copyright laws, Congress passed Pub. L. 93-573, §201, 88 Stat. 1873 (1974) creating the National Commission on New
Technological Uses of Copyright Works (CONTU) to study and report on the problems and issues of new technology and
copyright.
In 1976, before CONTU reported its findings to Congress, Congress passed a new copyright law to replace the one
that had prevailed since 1909. Pub.L. No. 94-553, 90 Stat. 2541 (1976) (codified at <797 F.2d 1241> 17 U.S.C. §101 et
seq.). The new law’s only explicit accommodation to computer technology was 17 U.S.C. §117, which dealt with
copyright issues arising upon certain uses of computer programs not in issue here.
The Commission’s Final Report *hereinafter “CONTU Report”+ was delivered to the President on July 31, 1978. The
CONTU Report recommended legislation:
The new copyright law should be amended: (1) to make it explicit that computer programs, to the extent that they
embody an author’s original creation, are proper subject matter for copyright; (2) to apply to all computer uses of
copyrighted programs by the deletion of the present section 117; and (3) to ensure that rightful possessors of copies of
computer programs may use or adapt these copies for their use.
CONTU Report at 1. Congress responded to these suggestions in the 1980 Computer Software Copyright Act by
adding a provision to 17 U.S.C. §101 defining computer programs, see Pub.L. No. 96-517, §10(a), 94 Stat. 3028
(1980) (codified at 17 U.S.C. §101) (quoted supra n.13). It also replaced the old §117 with a new §117 outlining users’
rights of adaptation.
As neither the definition of “computer program” nor 17 U.S.C. §117 is relevant here, it would appear that the
CONTU Report is of marginal relevance, at best. Nevertheless, defendants argue that it is not only relevant, but that it
compels a decision in their favor. Specifically, defendants argue that the CONTU Report recommends that copyright
protection be limited to protection of the literal elements of computer programs, and that the CONTU Report is to be
taken as authoritative legislative history, which this court is bound to follow. Appellants’ Br. at 15-21. This argument is
unpersuasive, however.
In the first place, the CONTU Report never suggests that copyright protection should be limited to the literal code.
To the contrary, in discussing the limits of copyright protection, the Report referred to the dichotomy between idea and
expression discussed above, and said:
[T]he separation of idea from form of expression . . . is better realized through the courts exercising their
judgment in particular cases [than by a per se rule] . . .Flow charts, source codes, and object codes are works of
authorship in which copyright subsists . . .
CONTU Report at 21 (emphasis added). While the first part of this passage suggests that the Commission may
have reserved judgment as to the copyrightabilty of non-literal elements of computer programs, the second <230 USPQ
495> part – particularly the reference to the copyrightability of flowcharts – demonstrates that the Commission
intended copyright protection to extend beyond the literal code. Thus, the CONTU Report does not support defendants’
position in this case.37
Even if the CONTU Report had advocated a strict limitation of the copyrightability of computer programs,
defendants’ argument would still fail, for the CONTU Report is not binding on us in this case. Defendants correctly note
that some courts have treated the CONTU Report as a surrogate legislative history. See, e.g., Micro-Sparc, Inc. v. Amtype
Corp., 592 F.Supp. 33, 35 n.7, 223 USPQ 1210, 1212, n.7 (D. Mass. 1984) (“The CONTU Report . . . comprises the entire
legislative history of §117.”): Midway Mfg. Co. v. Strohon, 564 F.Supp. 741, 750 n.6, 219 USPQ 42, 49 n.6. The courts
have said this because Congress adopted the CONTU Report’s recommendations without alterations and without any
committee reports. Defendants argue that this court, too, is bound by the CONTU Report for the same reason.
The argument fails, however, for the only statutory provision relevant to this case is §102(b) , see supra, in which
no changes were made as a result of the CONTU Report. Therefore, it follows <797 F.2d 1242> that the CONTU Report
cannot be a substitute for legislative history in this case. In effect, defendants ask us to apply the precepts of the CONTU
Report regardless of what legislative provision we are considering. We cannot do this, however, for the CONTU Report
has force only insofar as it can be said to represent the will of Congress. There is no sense in which it represents the will
of Congress with respect to provisions not amended in response to the Report.38

VI. Evidence Of Substantial Similarity

Defendants’ second argument is that even if copyright protection is not limited to computer programs’ literal
elements as a matter of law, there is insufficient evidence of substantial similarity presented in this case to support a
finding of copyright infringement. The defendants claim that all three parts of Dr. Moore’s expert testimony as to the
similarity of the programs, see supra, were flawed, and also that the district court erred in evaluating the relative weight
of Dr. Moore’s and Mr. Ness’ testimony. We consider these arguments in turn.
A. File structures

Defendants claim that Dr. Moore’s examination and conclusions with respect to file structures are irrelevant to
the question whether there was a copyright violation. Defendants analogize files to blank forms, which contain no
information but merely collect and organize information that is entered from another source. They argue, relying
on Baker v. Selden,that, as a matter of law, blank forms cannot be copyrighted. Thus, they conclude, neither can file
structures be part of the copyright of a program. SeeAppellants’ Br. at 34-38; Reply Br. at 7-8.39 <230 USPQ 496>
Defendants’ description of the file structures is indeed correct. Dr. Moore himself described a computer’s file as
“a storage place for data, and it’s really no different in a computer than it is in a file drawer, it’s like a manila folder that
contains all the data on a particular subject category in a computer.” App. at 682. (Another analogy, particularly
accessible to lawyers, is to a very complex cataloging structure like the structure of Lexis or Westlaw without any entries
yet made.) Defendants’ legal conclusion is not correct, however. Although some courts have stated that the meaning
of Baker v. Selden is that blank <797 F.2d 1243> forms cannot be copyrighted,40 this circuit, like the majority of courts
that have considered the issue,41 has rejected this position and instead have held that blank forms may be copyrighted if
they are sufficiently innovative that their arrangement of information is itself informative.Apple Computer, Inc., 714 F.2d
at 1250, 219 USPQ at 121.See also Manpower, Inc. v. Temporary Help of Harrisburg, Inc., 246 F.Supp. 788, 148 USPQ
85(E.D. Pa. 1965) (upholding copyrightability of form for vacation schedules).42
This is not to say that all blank forms or computer files are copyrightable. Only those that by their arrangement
and organization convey some information can be copyrighted. Cf. 1 Nimmer at 2-201: “Thus books intended to record
the events of baby’s first year, or a record of a European trip, or any one of a number of other subjects, may evince
considerable originality in suggestions of specific items of information which are to be recorded, and in the arrangement
of such items.” (footnote omitted). Defendants do not contend, however, that the file structures convey no information,
and it appears to us that the structures are sufficiently complex and detailed that such an argument would not succeed.
As we have noted, supra,there are many ways in which the same goal – the organization of the business aspects of a
dental laboratory – might be accomplished, and several of these approaches might use significantly different file
structures.43 The file structures in the Dentalab and Dentcom systems require certain information and order that
information in a particular fashion. Other programs might require different information or might use the same
information differently. When we compare the comprehensiveness and complexity of the file structures at issue here
with the “blank forms” at issue in the cases mentioned above, we have no doubt that these file structures are
sufficiently informative to deserve copyright protection.

B. Screen outputs

Defendants’ second line of argument is slightly confusing. <797 F.2d 1244> Defendants appear to argue that to
the extent that the district court relied upon the similarity of the screen outputs of Dentalab and Dentcom its finding of
substantial similarity was erroneous because (1) the screen outputs are covered by a different copyright from the
program’s, and/or (2) the screen outputs bear no relation <230 USPQ 497> to the programs that produce them.
Although these arguments are not always clearly distinguished, Appellants’ Br. at 38-41; Reply Br. at 8-10, the distinction
is important because whereas the first argument is weak, we feel that the second is more persuasive.
It is true that screen outputs are considered audio-visual works under the copyright code, see Williams
Electronics, 685 F.2d at 874, 215 USPQ at 408; Midway Manufacturing Co., 564 F.Supp. at 749, 219 USPQ at
48 (distinguishing audiovisual copyright in display of videogame from copyright in program that creates the audiovisual
display), and are thus covered by a different copyright than are programs, which are literary works, see supra at 27. It is
also true that Whelan Associates asserts no claim of copyright infringement with respect to the screen outputs. But the
conclusion to be drawn from this is not, as defendants would have it, that screen outputs are completely irrelevant to
the question whether the copyright in the program has been infringed. Rather, the only conclusion to be drawn from the
fact of the different copyrights is that the screen output cannot be direct evidence of copyright infringement. There is no
reason, however, why material falling under one copyright category could not be indirect, inferential evidence of the
nature of material covered by another copyright.
Thus, the question is whether the screen outputs have probative value concerning the nature of the programs
that render them sufficient to clear the hurdles of Fed.R.Evid. 401 and 403. The defendants argue that the screen
outputs have no probative value with respect to the programs because many different programs can create the same
screen output. Defendants rely on Stern Electronics Inc. v. Kaufman,669 F.2d at 855, 213 USPQ at 444 (“many different
computer programs can produce the same ‘results,’ whether those results are an analysis of financial records or a
sequence of images and sounds.”), and Midway Manufacturing Co., 564 F.Supp. at 749, 219 USPQ at 48 (“it is quite
possible to design a game that would infringe Midway’s audiovisual copyright but would use an entirely different
computer program.”). Neither court, however, was presented with the question that faces us today, the evidentiary
value of screen outputs in a suit for infringement of the underlying program.44
Insofar as everything that a computer does, including its screen outputs, is related to the program that operates
it, there is necessarily a causal relationship between the program and the screen outputs. The screen outputs must
bear some relation to the underlying programs, and therefore they have some probative value. The evidence about the
screen outputs therefore passes the low admissibility threshold of Fed.R.Evid. 401.45
<797 F.2d 1245> It is still possible, of course, that the risk of unfair prejudice would outweigh the probative value
of the evidence, thus contravening Fed.R. Evid. 403. In support of this position one might argue that, because the screen
outputs are vivid and easily understood (at least as compared with the obscure details of computer programs), they
might have disproportionate influence on the trier of fact. However, because the portions of programs that relate to the
screen outputs are often so small a part of the full program, they might say very little about the underlying program.
This combination of ease of perception and slight probative value, the argument concludes, works a Rule 403 violation
because the screen outputs appearsignificantly more probative than they in fact can be.
This argument has force, but we feel that it is ultimately unpersuasive. In the first place, the defendants point to
no place in the record where they objected to testimony about the screens’ similarities. Our independent review of the
record has revealed no such objections. See, e.g.,App. at 681-82 (Dr. Moore testifying about screen similarities without
objection from defendants). Therefore, because this could not be plain error, the objection was <230 USPQ
498> waived. Second, even if the objection had not been waived, we do not believe that admission of the evidence
relating to screen similarity suffices for a Rule 403 exclusion. Screen outputs are not so enticing that a trier of fact could
not evaluate them rationally and with a cool head. The party against whom the screen outputs are introduced can easily
explain their limited probative value. Given the substantial deference with which we review the district court’s decision
on this matter, see McQueeney v. Wilmington Trust Co.,779 F.2d 916, 922 (3d Cir. 1985), and the parties’ ample
opportunities to advance their arguments before the district court, we do not believe that the district court committed
error in considering the evidence relating to screen outputs.

C. The five subroutines

With respect to the final piece of evidence, Dr. Moore’s testimony about the five subroutines found in Dentalab
and Dentcom, defendants state that they “fail to understand how a substantial similarity in structurecan be established
by a comparison of only a small fraction of the two works.” Appellants’ Brief at 43, see also Reply Br. at 12. The premise
underlying this declaration is that one cannot prove substantial similarity of two works without comparing the entirety,
or at least the greater part, of the works. We take this premise to be the defendants’ argument.
The premise does not apply in other areas of copyright infringement. There is no general requirement that most
of each of two works be compared before a court can conclude that they are substantially similar. In the cases of literary
works – novels, movies, or plays, for example – it is often impossible to speak of “most” of the work. The substantial
similarity inquiry cannot be simply quantified in such instances. Instead, the court must make a qualitative, not
quantitative judgment about the character of the work as a whole and the importance of the substantially similar
portions of the work. See, e.g., Harper & Row Publishers, Inc. v. Nation Enterprises, ___ U.S. ___, ___ n.8, 105 S.Ct. 2218,
2233-34 & 2233 n.8, 225 USPQ 1073, 1083 & n.8 (1985); Atari, Inc. v. North American Philips Consumer Electric
Corp., 672 F.2d 607, 618, 214 USPQ 33, 42 (7th Cir.), (“When analyzing two works to determine whether they are
substantially similar, courts should be careful not to lose sight of the forest for the trees.”), cert. denied, 459 U.S. 880
(1982);Hoehling v. Universal City Studios, Inc.,618 F.2d 972, 979-80, 205 USPQ 681, 686-87 (2d Cir.) (warning against
same danger), cert. denied, 449 U.S. 841, 207 USPQ 1064 (1980). See also Universal Pictures v. Harold Lloyd Corp., 162
F.2d 354, 73 USPQ 317 (9th Cir. 1947) (finding copyright violation for copying of 20% of plaintiff’s film); In re Personal
Computers and Components <797 F.2d 1246> Thereof, 1983-84 Copyright L. Dec. (CCH) ¶25,651 at 18,931 (Int’l Trade
Comm’n Mar. 9, 1984) (18%-25% identity is sufficient for substantial similarity). CompareElsmere Music, Inc. v. National
Broadcasting Co., 482 F.Supp. 741, 744, 206 USPQ 913, 914 (S.D.N.Y.), aff’d, 623 F.2d 252, 207 USPQ 277 (2d Cir. 1980)
(similarity uncontested by defendants where four notes out of 100 measures and two words out of 45 were
identical) with Jewel Music Publishing Co. v. Leo Feist, Inc., 62 F.Supp. 596, 597, 66 USPQ 282, 283 (S.D.N.Y. 1945)
(finding no substantial similarity where three bars of an eight-bar line were identical and the line appeared 24 times in
both songs).
Computer programs are no different. Because all steps of a computer program are not of equal importance, the
relevant inquiry cannot therefore be the purely mechanical one of whether most of the programs’ steps are similar.
Rather, because we are concerned with the overall similarities between the programs, we must ask whether the most
significant steps of the programs are similar. See Midway Mfg. Co. v. Strohon, supra 564 F.Supp. at 753, 219 USPQ at 52.
This is precisely what Dr. Moore did. He testified as follows:
What I decided to do was to look at the programs that had the primary, or let’s say most important, tasks of the
system, and also ones which manipulate files, because there are a lot of programs that simply print lists, or answer a
question when you ask him it, but I thought that the programs which actually showed the flow of information, through
the system, would be the ones that would illustrate the system back.
App. at 704. Dr. Moore’s testimony was thus in accord with general principles of copyright law. As we hold today
that these principles apply as well to computer programs, we therefore reject the defendants’ argument on this point.

D. Sufficiency of the evidence

Defendants’ final argument is that the district court erred in evaluating the testimony of Dr. Moore and Mr. Ness.
They contend that, properly evaluated, Mr. Ness’ testimony was sufficiently strong and Dr. Moore’s sufficiently weak,
that there was not sufficient evidence of substantial similarity for plaintiff to prevail.
We have described the testimony of Dr. Moore and Mr. Ness, see supra; see also infra, and it is recounted in the
district court opinion, Whelan Associates v. Jaslow Dental Laboratory, 609 F.Supp. at 1316, 225 USPQ at 162.The district
court explained its evaluation of the evidence as follows:
I conclude . . . that Dr. Moore, plaintiffs’ expert, had greater knowledge as to the <230 USPQ 499> particular
programs at issue. Dr. Hess [sic], the defendants’ expert witness, reviewed only the source and object codes of the IBM-
Series 1 [Dentalab program], the IBM Datamaster [see supra n. 4], and the IBM-PC Dentcom system. He never observed
the computer in operation nor viewed the various screens or the user’s manual. He stated he was not familiar with EDL
coding. More basically, however, his comparison as to dissimilarities was between the IBM Datamaster and the IBM-PC
Dentcom systems. Plaintiff contends that the IBM-PC Dentcom is a copy of the IBM Series 1 System – not the IBM-
Datamaster system. Dr. Hess’s conclusions were that although the overall structures of those systems is similar, the code
in the IBM-PC Dentcom is not “directly derived” from either plaintiff’s IBM Series-1 or its IBM-Datamaster system. To the
extent that Dr. Moore’s testimony supports plaintiff’s contentions of copying, I find his testimony more credible and
helpful because of his detailed and thorough analysis of the many similarities.
Id. at 1321-22 , 225 USPQ at 166. Determinations of credibility and the relative weight to be given expert
witnesses are, of course, left primarily to the discretion of the district court. Our review of the record convinces us that
the district court’s analysis of the two experts’ opinions was far from being erroneous. As the district court pointed out,
Mr. Ness had studied the programs, but he had never observed them at work in computers. Id. at 1321 ,225 USPQ at
166. The district court also pointed out<797 F.2d 1247> that Mr. Ness was unfamiliar with EDL coding. Id. These factors
suffice to support the court’s conclusion.
In addition, we believe, on re-reading the trial transcript, that although Mr. Ness’ testimony was quite competent,
Dr. Moore’s was persuasive on the issues relevant to this appeal. Whereas the greater part of Mr. Ness’ testimony was
concerned with the dissimilarities between the two programs’ source and object codes, see, e.g. App. at 824-32, Dr.
Moore discussed the crucial issue in this case, the similarities and differences in the programs’ structures. For example,
when he discussed the programs’ invoicing subroutine, Dr. Moore testified as follows:
In the DentaLab system, the same kind of thing again, same information is up there, description, unit price,
extension, items and program reads all those things in from te [sic] number of files actually, and displays them and then
gives the operator a number of options to change the order as it appears on the screen to skip this one, to cancel it, or
to accept it.
The same choices are given in Dentalab systems change, skip, cancel.
Assuming that the order is acceptable, both systems then calculate the money, calculate the amount of money
that will be billed, and at this point they use the price code to find which of the four prices are to be charged for this
particular customer. Both systems do that. They pick that one of the four prices and calculate the total amount, write
then the record of this invoice that has been formed to show the invoice’s file, sets the flag in the order’s file to show
that this order has now been invoiced so that it doesn’t get reinvoiced.
Q. What is a flag?
A. Well, a flag would be, in this case, a certain location is marked I for invoices, just an indicator that invoicing has
been done on this record.
Q. Both used it?
A. Both used a flag. I don’t remember whether Dentcom uses a letter I or some other symbol, but there is a flag
there that it’s a field number 12, in which it’s indicated that this file has been invoiced or this order has been invoiced.
Q. Do you have any comment about the invoicing?
A. Well, I think it should be clear, it was clear to me from going through these programs that there is a very
marke[d] similarity between the two, that they, item by item, are doing pretty much the same thing with the same fields
in the same files, and accomplishing roughly the same results.
So there was quite a match, line by line, between these two, flow in these two.
Q. What do you conclude from that?
A. Well, back together with the file’s structure, sort of set up with the – how the programs have to proceed. I
would think that the person who designed or constructed the DentaLab system must have been thoroughly familiar with
the Dentcom system.
The person who constructed the Dentcom system must have been familiar with the series one system, because
the same file structure and same program steps are followed, same overall flow takes place in both systems.
App. at 710-12 (emphasis added). Dr. Moore’s testimony about Dentcom’s and Dentalab’s month-end subroutines
also demon <230 USPQ 500>strates the structural comparisons in which he engaged:
Q. What did you find in month-end?
A. Okay. Month-end, the calling program in Dentcom, this obviously is done at the end of each month.
In the Dentcom system there is a program called MOEND, which chains all these other programs, that is MOEND
calls MOPRDL, and after that program runs, goes back to MEEND, calls the print sale and so on.
In the Dentalab system there is a supervisory program also called MOEND, <797 F.2d 1248> and that system calls
or runs a series of programs doing various functions.
Now if we look at the functions done by the programs in order, we find that they are the same except for a flipping
of the order in the first two things.
The Dentcom system, it first prints product group report, and then prints the monthly customer sales analysis.
In Dentlab, just reverses, prints sales analysis first, product group report second.
After that, both systems do the same thing in the same order.
They now do accounts receivable aging, since a month has gone by they have to update all the 30 days, 60 days,
et cetera, calculate service charges. Then they print the monthly AR reports that had to do with service charges, only
those that involve service charges, they both do that. Then they both print the age file balance, balance report, and
following that they print the month and accounts receivable report. That’s the total accounts receivable rport[sic].
Then they both go through and look for accounts that are not active that month, and print a list of these accounts,
accounts not serviced, an account that doesn’t have any access.
The final think that the Dentcom system does is to calculate the new AR total for the entire lab, which I mentioned
is contained in the company file.
DentaLab doesn’t keep that total, so that’s the last item, that is not as far as I can tell, done by DentaLab. I may
have said – did I say Dentcom keeps that total? DentaLab does not. That’s the only difference.
App. at 716-18 (emphasis added). Dr. Moore testified in similar detail and to similar effect about the other three
subroutines that he felt were particularly important, order entry, account receivable, and day’s end.46 This testimony, in
addition to Dr. Moore’s exhaustive comparison of the two programs’ file structures, see supra 12, and his testimony
about the screen outputs, id., demonstrates the marked similarity between the programs. Defendants’ argument as to
sufficiency of the evidence therefore fails.47

VII. Conclusion

We hold that (1) copyright protection of computer programs may extend beyond the programs’ literal code to
their structure, sequence, and organization, and (2) the district court’s finding of substantial similarity between the
Dentalab and Dentcom programs was not clearly erroneous. The judgment of the district court will therefore be
affirmed.
1
We use the terms “structure,” “sequence,” and “organization” interchangeably when referring to computer programs,
and we intend them to be synonymous in this opinion.

2
A letter of August 31, 1978, explained what the program would do for Jaslow Lab and how much it would cost. See
App. at 1770-75. A letter from Strohl to Jaslow Lab dated September 20, 1978, supplemented the August 31 proposal as
follows:

This communication is a supplement to our proposal letter dated 8/31/78.


We [Strohl] propose that all software developed by us for your dental laboratory system remain
under our ownership. This basic system can then be marketed to similar laboratories by our
organization. A royalty of ten percent of the basic package price would be returned to Jaslow Dental
Laboratory for each system sold.

Whelan Associates v. Jaslow Dental Laboratory, 609 F.Supp. 1307, 1310, 225 USPQ 156, 158 (E.D. Pa. 1985) (the district
court inadvertently identified the letter as dated September 30, 1978). Although no representative of Jaslow Lab ever
signed either agreement, the district court found that Jaslow Lab had, through its conduct, accepted the terms of the
letter. Id. at 1310, 225 USPQ at 158.

3
Rand Jaslow on behalf of Jaslow Lab sent a letter to Whelan Associates on June 22, 1982, stating its intention to
terminate business relations in 30 days. However, the parties continued to do business under the agreement of July 30,
1980 until the termination letter of May 31, 1983, discussed below.

4
The record indicates that Whelan Associates also developed a BASIC version of the Dentalab, written specially for the
IBM-Datamaster 26 computer. That program *the “Datamaster” program+, did not succeed commercially. Whelan
Associates has also written a second program in BASIC for dental laboratories’ business operations. The second program
was intended for use on IBM-PC’s. Neither the Datamaster program nor Whelan Associates’ program for the IBM-PC is
directly in issue here. But see infra 12 (use of Datamaster program by defendants’ expert witness at trial).

5
The district court inadvertently referred to this as the letter of January 31, 1983. See Whelan Associates v. Jaslow
Dental Laboratory, 609 F.Supp. 1307, 1313, 225 USPQ 156, 160 (E.D. Pa. 1985).

6
Joseph Cerra had, from January until June, 1983, been in the employ of Whelan Associates in charge of their marketing.
In this position, he had had close contact with Rand Jaslow. When he left Whelan Associates, he made a verbal promise
to Elaine Whelan that he would not become associated in any business ventures with Rand Jaslow. There was, however,
no written agreement. App. at 1088. Although Mr. Cerra was originally named as a defendant, he settled prior to trial.

The record contains no information about Paul Mohr’s employment history or of his previous associations with
Whelan Associates or any of the defendants.

7
17 U.S.C. §106(1982), which prescribes copyright holders’ exclusive rights, forbids the copying of copyrighted works.
The independent creation of even identical works is therefore not a copyright infringement, and independent creation is
a complete defense to a claim of copyright infringement. See alsoFred Fischer, Inc. v. Dillingham, 298 F. 145, 147
(S.D.N.Y. 1924) (L. Hand, J.) (“the law imposes no prohibition upon those who, without copying, independently arrive at
the precise combination of words or notes which have been copyrighted.”).

8
Dr. Moore’s testimony is discussed in greater detail infra at 59-63.

9
Source and object code are defined infraat 19-20.

10
There were two such sales by Dentcom.
11
There were 23 such sales.

12
The appeal is from the court’s injunction preventing defendants from selling the Dentcom program. The court has not
yet entered a final judgment covering pre- and post-trial damages. Our jurisdiction is thus pursuant to 28 U.S.C. §
1292(a)(1).

13
Title 17 U.S.C. § 101 (1982), gives a more technical rendering, defining 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.”

14
More detailed descriptions of this process can be found in D. Bender, Computer Law – Software Protection §2.06[3]
(1985): Yohe, An Overview of Programming Tactics, 6 Computing Surveys 221 (1974).

15
Technically speaking, modules and subroutines are slightly different. CompareR. Andree, J. Andree & D.
Andree, Computer Programming 336 (1973) (defining subroutines) with R. Coats, Software Engineering for Small
Computers 12 (1983) (modules). For present purposes, however, they may be used synonymously as discrete parts of
programs with readily identifiable tasks.

16
Elaine Whelan’s material on the various elements, files and subroutines of the Dentalab system are voluminous, taking
up over 200 pages of the record.See App. at 1222-1469. The material consisted of detailed outlines on how the program
was to be structured.

17
The discussion in this paragraph draws heavily from Note. Copyright Protection of Computer Program Object Code, 96
Harv. L. Rev. 1723, 1724-25 [1983].

18
We ignore the distinction between “high level language” and “assembly language.” see Note, 96 Harv. L. Rev. 1723,
1725 (1983), which is not relevant to the issues in this case. Both of these may be referred to as “source codes.” See
Apple Computer, Inc. v. Franklin Computer Corp. 714 F.2d 1240, 1243,219 USPQ 113, 115 (3d Cir. 1983), cert.
dismissed, 464 U.S. 1033 (1984).

19
The IBM Series One, for example, can read EDL but not BASIC: the IBM-PC can read BASIC, but not ED.

20
The discussion assumes that the program is “compiled” or “assembled.” If a program is “interpreted,” then the source
and object codes are joined in a single step. Whether a program is compiled or interpreted depends on the program and
the machine on which it is run. The difference is not important in this case.

21
There are three other facets of program creation, debugging, documentation, and maintenance. Although none of
these functions are at issue in this case, in the interest of completeness we shall describe them here. After the object
code has been completed, the program must be “debugged” and documented. Debugging, or error removal, is
frequently a lengthy process, for any moderately difficult task may require a fairly detailed and complex program. See D.
Bender, supra. § 2.06[3][e]. The program demands arduous debugging not only because of its complexity, but also
because of its delicacy. Even slight and perhaps obvious errors can hinder a program, for a computer has no way of
recognizing errors. Like a perfect soldier, it takes instructions without questioning them.

Documentation is the general term for the material that a programmer must give to a user to explain how the
program runs. Programs frequently come with pamphlets that explain the program’s powers and limitations. The
documentation must anticipate as many potential questions and exigencies as the programmer can imagine the user will
face because most people do not understand computers and programs fully, and it would therefore be very difficult for
users to solve their problems themselves. Thus, proper documentation should “document everything, continually
assuming [that the users] are going to have an attack of amnesia next week.” Brown, Programming and Documenting
Software Projects. 6 Computing Surveys 213, 219 (Dec. 1974). See also Yohe, supra n.14 at 221.

Finally, programmers are also usually responsible for the maintenance of their programs. No matter how thorough
the debugging and documentation problems will likely arise as the user develops new needs for the program. The
programmer, like a car manufacturer or dealer, must be prepared to fix latent bugs, adapt the program, or incur other
so-called “life cycle” costs of maintenance.

22
The district court found, inter alia, that Rand Jaslow “had surreptitiously and without consent of either Strohl Systems
or Whelan Associates obtained a copy of the *Dentalab+ source code.” id.,and that he had “utilized the source code in his
attempt to develop the IBM-PC Dentcom program.” id. at 1321,225 USPQ at 166.

23
Although not an issue in this case, see infra n. 47, it is important to note that even the showing of substantial similarity
is not dispositive, for it is still open to the alleged infringer to prove that his work is an original creation, see supra n.7, or
that the similarities between the works was not on account of copying but because both parties drew from common
sources that were part of the public domain. The cause of the substantial similarity – legitimate or not – is a question of
fact.

24
This circuit has once used the single substantial similarity inquiry advocated here in a computer copyright case. See
Williams Electronics v. Arctic International, Inc., 685 F.2d 870, 876 n.6, 215 USPQ 405, 409 n.6 (3d Cir. 1982) (finding
substantial similarity in computer programs without mentioning the Arnstein test). Williams did not explain why it did
not use the bifurcated Arnstein test, nor did it distinguish Universal Athletic Sales. To the extent that Williams did these
things sub silentio, our holding today is merely a ratification of Williams on this point.

25
Because the first argument involves solely a question of law, our review is plenary. The second argument involves
questions of fact, and we therefore apply the “clearly erroneous” standard of review. See Original Appalachian
Artworks, Inc. v. Toy Loft 684 F.2d 821,825 n.4, 215 USPQ 745, 748 n.4 (11th Cir. 1982); International Luggage Registry v.
Avery Products 541 F.2d 830, 831, 192 USPQ 426 (9th Cir. 1976).

26
Professor Nimmer distinguishes two ways that one work might be substantially similar to another; comprehensive
nonliteral similarity, and fragmented literal similarity, 3 Nimmer at § 13.03[A]. See also Warner Bros. v. American
Broadcasting Cos., 720 F.2d 231, 240, 222 USPQ 101, 108 (2nd Cir. 1983) (noting distinction); Smith v. Weinstein, 578
F.Supp. 1297, 1303, 222 USPQ 381, 385 (S.D.N.Y) (Same), aff’d, 738 F.2d 419 (2d Cir. 1984). The titles are suggestive of
their meanings; comprehensive nonliteral similarity means “a similarity not just as to a particular line or paragraph or
other minor segment, but [that] the fundamental essence or structure of one work is duplicated in another.” 3 Nimmer
at 13-20.1, while fragmented literal similarity means occasional, but not complete, word-for-word similarity. Id.In
Professor Nimmer’s terminology, we are concerned here only with comprehensive nonliteral similarity.

27
Achieving the proper incentive has been a long-standing task of courts. See, e.g., Sayre v. Moore, 102 Eng. Rep. 138,
140 n.6 (1785)(Lord Mansfield):

[W]e must take care to guard against two extremes equally prejudicial; the one, that men of ability,
who have employed their time for the service of the community, may not be deprived of their just
merits, and the reward for their ingenuity and labor; the other, that the world may not be deprived
of improvements, nor the progress of the arts be retarded.

See also Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156, 186 USPQ 65, 67 (1975); Apple Computer, 714 F.2d
at 1253, 219 USPQ at 123(Sloviter, J.) (“the line must be a pragmatic one, which also keeps in consideration ‘the
preservation of the balance between competition and protection reflected in the patent and copyright laws.’ “ (quoting
Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738, 742, 170 USPQ 557, 559 (9th Cir. 1971) ).

28
This test is necessarily difficult to state, and it may be difficult to understand in the abstract. It will become more clear
as we discuss and explain it in the textual discussion that follows this footnote. See also infra (discussion of the
copyrightability of file structures that raise many of the issues considered here). As will be seen, see infra, the idea of the
Dentalab program was the efficient management of a dental laboratory (which presumably has significantly different
requirements from those of other businesses). Because that idea could be accomplished in a number of different ways
with a number of different structures, the structure of the Dentalab program is part of the program’s expression, not its
idea.
29
See Landsberg v. Scrabble Crossword Game Players, Inc. 736 F.2d 485, 489, 221 USPQ 1140, 1143 (9th Cir.) cert.
denied, ___ U.S. ___, 105 S.Ct. 513 (1984); See v. Durang, 711 F.2d at 1423, 219 USPQ at 772; Hoehling v. Universal City
Studios, Inc., 618 F.2d 972, 979, 205 USPQ at 686 (2d Cir. 1980).

30
Hoehling, 618 F.2d at 979, 205 USPQ at 686 (explaining the scenes a faire doctrine as follows: “Because it is virtually
impossible to write about a particular historical era or fictional theme without employing certain ‘stock’ or standard
literary devices, we have held that scenes a faire are not copyrightable as a matter of law.”); cf. Dymow v. Bolton, 11
F.2d at 691 (“*I+f the same idea can be expressed in a plurality of totally different manners, a plurality of copyrights may
result . . .”).

31
As we discuss below, see infra n. 34, not all non-literal elements are essential to a given computer program.

32
Even if the product of the alleged infringer’s efforts is a mixture of old and new elements, that would not protect it
from the charge of infringement. Parodies, for example, mix copied elements with originality, yet they can violate the
copyright of the work being parodied. See generally Note, The Parody Defense to Copyright Infringement: Productive Fair
Use After Betamax, 97 Harv. L. Rev. 1395 (1984).

33
Long before the first computer, Sir Issac Newton humbly explained that “if *he+ had seen farther than other men, it
was because *he+ had stood on the shoulders of giants.”

34
We do not mean to imply that the idea or purpose behind every utilitarian or functional work will be precisely what it
accomplishes, and that structure and organization will therefore always be part of the expression of such works. The
idea or purpose behind a utilitarian work may be to accomplish a certain function in a certain way, see, e.g., Baker v.
Selden, 101 U.S. at 100 (referring to Selden’s book as explaining “a peculiar system of book-keeping”), and the structure
or function of a program might be essential to that task. There is no suggestion in the record, however, that the purpose
of the Dentalab program was anything so refined; it was simply to run a dental laboratory in an efficient way.

35
See also Mooers, Computer Software and Copyright. 7 Computing Surveys ____, 50 (March 1975) (“Also included in
the ‘expression’ is the sequence, choice, and arrangement of descriptive elements . . .”). Two commentators have
criticized Synercom for its refusal to permit sequencing and ordering in the computer context to constitute
expression. See Pierce, Copyright Protection for Computer Programs. 30 Copyright Law Symposium 1, 19
(1983)(Synercom “stands alone . . . [in denying] copyright protection when the sequence and arrangement of data had
been expressed by others in different ways.” (footnote omitted) ): Note, Defining the Scope of Copyright Protection for
Computer Software, 38 Stan. L. Rev. 497, 525 (1986) (criticizingSynercomon the ground that “sequence and arrangement
are expression that is separable from the underlying utilitarian purpose of the [input] formats, which is to enable the
user to communicate with the computer program.” (footnote omitted) ). The notewriter concluded that “copyright law
should . . . recognize that organizing and connecting the modules and subroutines is a protectible act of
authorship.” Id. at 526.

36
It is not clear whether the end sought to be accomplished by the input formats involved in Synercom could be
accomplished with different sequences and orders. Compare 462 F.Supp. at 1013, 199 USPQ at 546 (“there are many . . .
possible choices of computer formats, and the decision among them *is+ arbitrary”) with id. at 1014, 199 USPQ at
547 (“The ‘idea or principle’ behind the forms in question, and the ‘method or system’ involved in them, *are+ no more
or less than the formats.”). Moreover, as noted above, the input formats involved in Synercomare not identical to the
structures of computer programs that concern us here.

37
The defendants also rely on statements (not included in the CONTU Report) of individual members of the Commission
and of testimony before the Commission. See Appellants’ Br. at 16-17, 18-21. This extrinsic evidence is weak, however,
and cannot outweigh the explicit statement of the CONTU Report itself.

38
Defendants’ final argument as to the protectability of program structures is that the Copyright Office has taken the
position that the defendants advocate here, and that as the Copyright Office is the agency responsible for the
administration of the copyright laws, we should grant deference to its interpretation. In support of its position, the
defendants refer us to the Copyright Officer’s Circular R61 (May 1983).

EXTENT OF COPYRIGHT PROTECTION


Copyright protection extends to the literary or textual expression contained in the computer
program. Copyright protection is not available for idea, program logic, algorithms, systems, methods,
concepts, or layouts.

Circular R61 (May, 1983). Copyright Office circulars are not technical documents, but are “intended to present simple
explanations of the law,” for lay persons. Declaration of Arthur J. Levine, former Assistant Chief of the Copyright Office
Examining Division and member of CONTU Commission. It is therefore questionable whether the circular deserves great
deference on a matter so complex as this one. At any rate, without analyzing the circular in depth – and its import is far
from clear – we feel that the argument and evidence we have set forth in the text are sufficient support for our position
and that to the extent the Copyright Office’s circular differs, it should not be followed.

39
As will be seen below, defendants’ argument here parallels their argument discussed in V.A. Defendants again rely on
the idea-expression dichotomy and argue that computer files embody ideas and not expressions. The thrust of
defendants’ argument is that mere organization or ordering cannot be expression, but must be idea. Once again, we
reject the argument. We separate the discussion here from the one in V.A. for two reasons. First, whereas defendants’
first argument was that the structure of the whole program was classifiable as idea, not expression, the argument here
is that a certain part of the program – the file structure – is idea, not expression. Thus, although the form of the
arguments is the same, the subject is different. Second, in our analysis of the file structures, we are aided by the clear
precedents and close analogy of blank forms, discussed infra. The law surrounding blank forms is particularly
appropriate to the question of computer file structures.

40
See, e.g. Brown Instrument Co. v. Warner, 161 F.2d 910, 911, 73 USPQ 427 (D.C. Cir.), cert. denied, 332 U.S. 801, 75
USPQ 365 (1947); Taylor Instrument Companies v. Fawley-Brost Co., 139 F.2d 98, 100-01, 59 USPQ 384, 386-87 (7th Cir.
1943), cert. denied, 321 U.S. 785, 60 USPQ 579 (1944).

41
See e.g. Edwin K. Williams & Co. v. Edwin K. Williams & Co. – 542 F.2d 1053, 191 USPQ 563 (9th Cir. 1976) (gas station
account books held copyrightable), cert. denied, 433 U.S. 908 (1977); Baldwin Cooke Co. v. Keith Clarke, Inc., 383 F.Supp.
650, 652, 655, 183 USPQ 209, 211 (N.D. Ill.) (“a combined calendar, appointment, diary and information book” is “much
more than a mere diary,” and is thus copyrightable), aff’d per curiam, 505 F.2d 1250, 183 USPQ 769 (7th Cir.
1974); Harcourt Brace & World Inc. v. Graphic Controls Corp., 329 F.Supp. 517, 171 USPQ 219 (S.D.N.Y. 1971) (answer
sheets for recording multiple choice achievement and intelligence test answers held copyrightable). See also 1 Nimmer
§2.08[D][1]; id. §2.18[C][1](articulating and endorsing the “narrow” reading used by these courts, as contrasted by the
“broad” reading illustrated in Brown, supra, and Taylor Instrument, supra); A. Latman, The Copyright Law 29-31 (5th ed.
1979)(collecting cases).

42
It is unclear whether the Copyright Office’s regulation would permit copyright protection for blank forms or would
impose a per se rule against such protection. Title 37 C.F.R. § 202.1(c) (1985) denies copy protection to

Blank forms such as time cards, graph paper, account books, diaries, bank checks, scorecards,
address books, report forms, order forms and the like, which are designed for recording information
and do not in themselves convey information.

To the extent that regulations do impose a per se rule against the copyrightability of blank forms, they have been
criticized, see 1 Nimmer §2.08[D][1]; id.at § 2.18[C][1], and have not been followed, see supra n. 41 (collecting cases).

43
Defendants’ expert, Mr. Ness, testified that, given the problem to be solved, there were in fact few possible, efficient,
file structures, and that the similarity in the programs’ file structures was therefore neither surprising nor
probative. See App. at 834-37. The district court apparently did not find Mr. Ness persuasive on this point, however, and
we defer to the court’s assessment. Had the defendants offered more evidence to support their position, our answer
might have been different. It is true that for certain tasks there are only a very limited number of file structures
available, and in such cases the structures might be copyrightable and similarity of file structures might not be strongly
probative of similarity of the program as a whole. We are simply not convinced that this is such a case.

44
Stern Electronics was simply explaining a party’s decision to copyright the underlying program rather than the screen
output. Midway Manufacturing’sdiscussion was a part of its holding that a computer program for audiovisual games is
copyrightable separately from the video display. Our analysis is perfectly consistent with this position. See supra.

45
Our holding that evidence of screen outputs may be admissible does not necessarily mean that such evidence would
be alone sufficient to withstand motions of summary judgment or directed verdict. Judge Rosenn believes that ordinarily
and in the circumstances of this case, screen outputs have no probative worth in determining whether one computer
program is copied from another. Different program codes in different computer languages are capable of producing
identical screen outputs. To the extent that the district court relied on the screen outputs as evidence of copying, he
believes it erred. He concludes such error was harmless, however, in light of all the evidence of copying, the access to
and use of the plaintiff’s source code, the similarity in the structure of the programs and in flow charts. This court will
not reverse a district court’s factual determination in a non-jury trial where there is sufficient evidence in the record to
support it, other than the challenged evidence. DeLaval Turbine, Inc. v. West Indies Industries, Inc., 502 F.2d 259, 263-64
(3d Cir. 1974).

46
Dr. Moore’s notes comparing the two program’s modules were introduced as exhibits. His comparison of the order
entry modules in characteristic of his comparisons of the other modules and is reprinted in Appendix A to this opinion.
As we have suggested, this evidence is probative, not dispositive, of copyright infringements.

47
Of course structural similarities between two programs can also arise in completely legitimate ways– e.g., where the
authors of the two programs have included subroutines from common, unprotected subroutine libraries, or where the
authors of both programs have consulted common, public domain, reference books. There can be no bright line rule as
to when similarities are evidence of infringement and when they are legitimate--that is a determination to be made by
the trier of fact. See supra note 23. There is no suggestion in the present case that the similarities between Dentalab and
Dentcom were the result of such common ground, however, and so the court’s inference of copyright infringement from
its finding of substantial similarity was correct
TAKEALL VS PEPSICO USCA

TAKEALL VS PEPSICO

1
This matter comes before the Court on appellant/plaintiff Takeall's appeal from the district court's order granting
summary judgment in favor of defendantPepsico on December 23, 1992. Takeall filed suit against Pepsicoseeking
damages for copyright infringement, "reverse confusion and passing off," breach of contract, unjust enrichment, and
unfair competition. In the instant appeal, Takeall challenges as an abuse of discretion the district court's order
regarding his copyright infringement claim and his state claims. Orders granting summary judgment are reviewed de
novo, M & M Medical Supplies & Service, Inc. v. Pleasant Valley Hospital, Inc., 981 F.2d 160, 163 (4th Cir.1993) and
the standard of review is abuse of discretion. All findings of fact are reviewed under the clearly erroneous rule.
Pizzeria Uno Corp. v. Temple, 747 F.2d 1522, 1526 (4th Cir.1984).
2
This case involves a dispute over conflicting claims to the phrase "You Got the Right One, Uh-Huh."

3
Appellant Takeall is an entertainer who performs a ventriloquist act with a dummy named "Scooter." Beginning in
approximately 1970 and continuing until 1977, Takeall and "Scooter" made radio appearances on 25 radio stations in
12 states. In 1977, Takeall made the transition from radio disc jockey to stand-up performer, and from 1977 to 1983
he appeared as an entertainer in nightclubs and hotels in Las Vegas, Nevada.

4
In 1984, Takeall took his act to the New Orleans World's Fair. His arrival was preceded by a press release from the
Fair stating that the audience would know they were in the correct pavilion when they heard the ventriloquist duo
say "You Got the Right One, Uh-Huh."

5
Following the World's Fair, Takeall began working for the Department of Labor's Job Corp program serving the needs
of under-privileged minority youth. Since 1984, Takeall has performed nearly exclusively at Job Corps centers across
the country, where he has used his ventriloquism skills to convey an anti-drug message. With the exception of one
performance on the Christian Broadcast Network's 700 Club, Takeall's performances beyond the Job Corps centers
have been confined to schools, mostly at the elementary level.

6
Takeall's use of the term "Uh-Huh" as a part of his act began in the 1960's. Takeall testified in deposition that the
phrase "You Got the Right One, Uh-Huh" became "official" as a part of his act in 1984. The earliest videotape of
Takeall using the phrase was in December 1991.

7
On January 29, 1992, Takeall applied for a copyright registration, claiming a copyright in the "words and narration" of
his act. Takeall stated on his application that his ventriloquist act was created in 1984.

8
In January 1991 Pepsico began airing Diet Pepsi commercials featuring a well-known entertainer, Ray Charles, singing
"You Got the Right One, Baby, Uh-Huh." The advertisements followed a predecessor advertising campaign using the
phrase "The Right One" as a "tag line" at the end of the commercials. The phrase"The Right One" was first proposed
for consideration in a Diet Pepsi advertising campaign in late 1988. The first television commercial featuring the
phrase "The Right One" appeared on the air on July 4, 1989. Pepsico's advertising agency experimented with
different refrains for Ray Charles to use in "The Right One" commercial, including "Yeah, Yeah" and "Uh-Huh."
9
Takeall alleges three contacts with Pepsico in support of his contention that Pepsico had access to the phrase in
which he claims copyright. First, Takeall alleges that he travelled to Albany, Georgia to deliver to Mr. Brady Keys a
proposal requesting corporate sponsorship for a proposed "Say No To Drugs" tour. Mr. Keys is a franchisee of KFC
Corporation, a wholly owned subsidiary of Pepsico. Takeall had no appointment with Keys, and in fact never met
with Keys. Rather, Takeall delivered the "promotional package" to an unidentified person in Keys' office. The only
document in the package containing the phrase at issue was the New Orleans World's Fair press release. Keys has
denied ever receiving Takeall's alleged submission.
10
Keys has further stated that he never forwarded the package or communicated its contents to Pepsico or its
advertising agency.
11
Second, Takeall alleges he sent a similar proposal for corporate sponsorship in early 1989 to Barry Johnson, former
Director of Affirmative Action at Pizza Hut. Pizza Hut is also a wholly owned subsidiary of Pepsico. None of the
materials in the package to Johnson contained the phrase "You Got the Right One, Uh-Huh." Johnson has stated that
he has no recollection of ever receiving the materials from Takeall and believes that he did not forward to anyone
at Pepsico or its advertising agency any correspondence from Takeall.
12
Finally, Takeall alleges that he mailed a promotional package and sponsorship proposal to Pepsi Baltimore on June
27, 1989. This mailing, Takeall asserts, was in response to a Pepsi advertisement in Black Enterprise magazine seeking
applicants for Pepsi's Minority Business Enterprise Program. Two of the letters contained in the package mailed to
Pepsi Baltimore contained reference to the phrase in dispute. Pepsico has challenged the authenticity of one of the
letters containing the phrase. The advertisement requested that proposals be mailed to a specific Pepsi official.
Takeall mailed his proposal to the marketing director at Pepsi Baltimore rather than to the individual identified in the
advertisement. Pepsi has no record of having received Takeall's proposal.
13
On March 17, 1993, Takeall filed suit against Pepsico seeking damages for copyright infringement, "reverse confusion
and passing off," as well as other state claims. In granting summary judgment in favor of defendant, the district court
assumed the phrase's copyrightability and ruled on the basis of Takeall's failure to meet his threshold burden of
showing "a reasonable possibility of access" by Pepsico to the property Takeall claims.
14
Summary judgment is properly granted to the moving party when the court determines that "no reasonable jury
could find for the non-moving party on the evidence before it." Perini Corp. v. Perini Construction, Inc., 915 F.2d 121,
124 (4th Cir.1990), citing, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Any inferences from the
underlying facts must be drawn in favor of the party opposing the motion, and when such inferences reveal a
genuine dispute over a material fact summary judgment must be denied. Tuck v. Henkel Corp., 973 F.2d 371 (4th
Cir.1992). A moving party is entitled to summary judgment where the nonmoving party has failed to make a
sufficient showing on an essential element of its case with respect to which it has the burden of proof. Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986).
15
Takeall first argues in this appeal that the district court held him to an improper standard in concluding that Takeall
had not demonstrated a triable issue of fact as to the possibility of access by Pepsico to his work.
16
To establish copyright infringement, two elements must be proven: "(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., 111 S.Ct.
1282, 1296 (1991). In addition, this Circuit has recognized that proof of copying can be established in one of two
ways: direct evidence of copying by the defendant, or circumstantial evidence sufficient to create a presumption of
copying. Keeler Brass Co. v. Continental Brass Co., 862 F.2d 1063, 1065 (4th Cir.1988).
17
As a general matter, a plaintiff seeking to show copying through circumstantial evidence must establish a prima facie
case with respect to two elements of his claim. First, a plaintiff must prove access to his work, or an opportunity to
copy, by the alleged copier, and second, he must prove sufficient similarity between the two works to indicate that
copying has in fact occurred. Id. at 1066.

18
Conceding that his is not a case of direct evidence, Takeall asserts that he established sufficient circumstantial
evidence to create a triable issue on the question of access. Takeall argues that, as a matter of law, the greater the
similarity between the disputed works, the less is the burden to show access. If a "striking similarity" between the
two works is shown, Takeall contends, his burden of showing access is minimal, and copying can be inferred. Evans v.
Wallace Berrie & Co., Inc., 681 F.Supp. 813 (S.D. Fla.1988). Takeall claims that although the district court assumed
striking similarity, it incorrectly demanded greater proof of access than was required. Had the court considered
Takeall's evidence in light of the lesser standard of proof in "striking similarity" cases, so Takeall contends, it could
not have awarded summary judgment in favor of Pepsico.
19
Takeall relies virtually exclusively on Gaste v. Kaiserman, 863 F.2d 1061 (2d Cir.1988) in support of his argument that
he is entitled to a lesser showing of access because of "striking similarity." In Gaste, the Second Circuit upheld a jury
determination that defendants, composer and publisher of the well-known song"Feelings," had infringed the
copyright in an earlier song of a different title. On appeal, defendants argued that the district court's instruction to
the jury on striking similarity was a misstatement of the law. The court instructed the jury that "access ... [did] not
have to be proven" if the plaintiff's work and the allegedly infringing work were "strikingly similar." Id. at 1063. The
Court of Appeals upheld the lower court's instruction as a correct statement of the law.
20
Takeall argues that his case fits squarely within the "striking similarity" context. As such, he argues that the district
court erred in requiring proof of a reasonable possibility of access.

21
Pepsico argues that, to the extent "striking similarity" is a viable doctrine, its application to this case is
inappropriate. Pepsico asserts that, as applied by the courts, "striking similarity" is reserved for similarities of such
breadth or of such an extraordinary nature that no explanation other than copying is plausible. See Selle v. Gibb, 741
F.2d 896, 901 (7th Cir.1984); Ferguson v. National Broadcasting Co., Inc., 584 F.2d 111, 113 (5th
Cir.1978).Pepsico argues that, while there may be a situation in which striking similarity would dispense with the
need for further proof of access, courts are dubious that such a circumstance could ever arise.
22
[S]triking similarity is just one piece of circumstantial evidence tending to show access and must not be considered in
isolation; it must be considered together with other types of circumstantial evidence relating to access ... Thus,
although it has frequently been written that striking similarity alone can establish access, the decided cases suggest
that this circumstance would be most unusual.

23
Selle at 901 (emphasis in original).

24
Further, Pepsico argues that Gaste cannot support Takeall's claim of relief from proving a reasonable possibility of
access. Pepsico asserts that the Second Circuit in Gaste did not hold that a showing of striking similarity alone
automatically precludes any further requirement that the plaintiff show a reasonable possibility of access.
Also, Pepsico notes that the evidence before the district court in Gaste was in fact sufficient to demonstrate a
reasonable possibility of access.
25
Finally, even though the district court in this case was willing to assume striking similarity,Pepsico argues that there is
no striking similarity between the two works as a matter of law.Pepsico contends that the strikingly similar standard
requires that works be virtually identical. Evans v. Wallace Berrie & Co., Inc., 681 F.Supp. 813, 818 (S.D. Fla.1988). The
similarities between Takeall's ventriloquist act and Pepsi's television commercials, Pepsicoargues, do not by any
reasonable standard rise to this level.
26
The district court found that Takeall had submitted sufficient evidence from which a reasonable finder of fact could
conceivably find striking similarity. Nonetheless, the court concluded that such evidence alone is not enough; rather,
there must be some other circumstantial evidence establishing a reasonable possibility of access. Selle at 901. In
effect, Takeall invites this Court to adopt a per se rule regarding the elimination of the need for proof of access in
cases involving "striking similarity." Even assuming, as did the district court, that this is a case of striking similarity, in
our view, such a per se rule is inadvisable and unsupported by law. The Second Circuit in Gaste recognized the
limitations of the inference raised by striking similarity.

27
Though striking similarity alone can raise an inference of copying, that inference must be reasonable in light of all the
evidence. A plaintiff has not proved striking similarity sufficient to sustain a finding of copying if the evidence as a
whole does not preclude any reasonable possibility of independent creation.

28
Gaste at 1068.

29
Here, even under the reduced standard in Gaste, we conclude that the district court did not abuse its discretion in
requiring of Takeall a showing of reasonable possibility of access despite the assumption of striking similarity.

30
Takeall contends that his public appearances since 1968 raise a triable issue as to a determination of access to his
work through wide dissemination. In support of this contention, Takeall points to his appearance on 26 radio stations
between 1970 and 1984. Takeall also argues that his appearances in 1970 and 1972 on two New York City area
stations while the creators of the Pepsi jingle were living in the New York area suggest wide dissemination and
access.

31
Pepsico correctly argues that, while there may be authority to support a finding of access through wide
dissemination of a plaintiff's work, the cases that have found dissemination wide enough to infer access have done
so on the basis of a far stronger record. Pepsicoasserts that the district court's finding that Takeall's work was not
disseminated to such an extent that access by Pepsi's advertising professionals could be presumed should not be
disturbed. Pepsico adds that the mere presence of the creators of the Diet Pepsi commercials in the New York area
some twenty years prior to the Ray Charles commercial but approximately coincident with two performances there
by Takeall cannot reasonably support an inference of access through dissemination.
32
Courts have found that wide dissemination can be the basis for an inference of access. See, e.g., ABKCO Music, Inc. v.
Harrisongs Music, Ltd., 722 F.2d 988 (2d Cir.1983) ("He's So Fine" was the number one best seller in America for five
weeks, and was one of the "Top Thirty" songs in England for seven weeks); Cholvin v. B. & F. Music Co., 253 F.2d
102 (7th Cir.1958) (plaintiff's work sold over 2,000 copies of sheet music, 200,000 records, and was broadcast
nationally on several occasions).
33
The district court based its determination that there was insufficient evidence to support an inference of access
through dissemination on its finding that Takeall's performances were principally confined to Job Centers and
schools. The Court found that there was "absolutely no evidence" that the creators of the Diet Pepsi commercials
had any access to these or other performances.

34
We hold that the district court's finding of insufficient evidence to show dissemination was not clearly erroneous and
must be sustained. At bottom, the district court had before it unsupported claims that "millions" of listeners heard
Takeall's performances "on a daily basis." Moreover, there was no evidence before the district judge to show that
Takeall at any time used the disputed phrase during these performances. Notwithstanding the fact that evidence of
the whereabouts of the creators of the Diet Pepsi commercials was not before the district court, their presence alone
is not enough for a fact finder to infer access. See Intersong-USA v. CBS, Inc., 757 F.Supp. 274 (S.D.N.Y.1991) (radio
broadcasts of plaintiff's song in New York or Miami while composers of allegedly infringing song were there held
insufficient to infer that they heard the song).

35
Takeall further argues that his contacts with Pepsico subsidiaries and, in particular, with Pepsi Baltimore created a
triable issue on the question of access. Takeall asserts that in responding to Pepsi's solicitation to the minority
community in a June 1989 Black Enterprise magazine advertisement, he sent Pepsi a package containing video tapes
of his act and two handwritten letters containing the phrase "You Got the Right One, Uh-Huh." Relying upon the
presumption under Maryland law that a letter mailed is deemed received, he contends that the receipt of his
submission by Pepsi employees in Baltimore was in itself enough evidence of access to create a genuine factual issue.
McFerren v. Gold-Smith Stern Co., 113 A. 107, 109, 137 Md. 573 (1921).
36
Pepsico correctly notes that, regardless of the paucity of evidence showing Pepsi actually received Takeall's package,
Takeall's contention that a letter mailed is deemed received is an incorrect statement of the law. Under the
"corporate receipt doctrine," Pepsico points out that it is necessary to show "physical propinquity" between the
receiving employee and other employees whereby "the latter has the opportunity to view the work in the possession
of the former." 3 M. Nimmer & D. Nimmer, Nimmer on Copyright Sec. 13.02[A], p. 13-17.
37
Pepsico asserts that the alleged copiers are not employees of Pepsi, but rather outside advertising professionals. As
such, a plaintiff can establish the possibility of access only "where there is a 'relationship linking the intermediary
[here an employee of Pepsi Baltimore] and the alleged copier.' " Moore v. Columbia Pictures Indus., Inc., 972 F.2d
939, 942 (8th Cir.1992), quoting Meta-Film Assoc., Inc. v. MCA, Inc., 586 F.Supp. 1346, 1357 (C.D. Cal.1984). In Meta-
Film, the court established that the "key feature" of proof of access through an intermediary is a "close relationship
linking the intermediary and the alleged copier." Meta-Film at 1357. Pepsico argues that in this case the record
shows no evidence of any relationship between Pepsi Baltimore and the creators of the Diet Pepsi commercials.
Thus, even if the receipt by employees of Pepsi Baltimore of Takeall's proposal were presumed, it would not be
enough to establish a reasonable possibility of access to Takeall's work by the alleged copiers.
38
The district court found that Takeall's three alleged proposals to Pepsi subsidiaries and Pepsi Baltimore were
insufficient evidence of a reasonable possibility of access to his work by the creators of the Diet Pepsi commercials--a
finding that we will not disturb. The record reflects no evidence before the trial court establishing access on the part
of the alleged copiers. Further, the district court was not willing to place Takeall's pure speculation as to access
before the deposition testimony establishing that no Pepsi Baltimore employee knew of or forwarded Takeall's
correspondence.

39
Takeall argues that the district court improperly discounted the testimony of Dr. Eugene Secunda. Dr. Secunda
testified that Takeall's conduct in responding to the June 1989 Pepsi advertisement was reasonable and foreseeable
by Pepsi. Dr. Secunda also stated that, given the tendency in the advertising profession of ideas to "percolate up" to
the creative personnel, Mr. Takeall's submission to Pepsi Baltimore provided Pepsico with access to Takeall's
material.
40
Takeall maintains that, once a witness has been qualified as an expert, the court cannot regulate the factors the
expert uses or the mental processes by which the expert arrives at conclusions. These matters, according to Takeall,
can be challenged only by cross examination. Girson v. United States, 88 F.2d 358 (9th Cir.1937). In addition, he
asserts that the expert's testimony was admissible under Federal Rule of Evidence 702.

41
We hold that the district court was not obliged to afford Takeall the opportunity to present Secunda's theory
concerning access to a jury, in light of its lack of any factual basis.Pepsico correctly notes that Takeall, as the party
opposing the motion, bore the burden of producing competent evidence of a genuine, triable issue of material fact
on the question of access. See Celotex at 322-23. Pepsico correctly points out that Secunda admitted that "I have no
facts to substantiate that," referring to the percolation up theory. Further, Pepsicoargues that Secunda
acknowledged that "I don't know what the particular kind of relationships existed between the creative people
at[Pepsi's advertising agency] and the marketing department at Pepsi."
42
We find that the district court properly concluded that Secunda's testimony could not raise a material fact with
respect to access.

43
The district court reasonably discounted Takeall's expert testimony on the "percolation up" theory, noting that Dr.
Secunda's testimony rested "not on any expert analysis of data, any specific fact, or any particular experience, but
simply on his own conjecture." Such an unsupported theory would not have been of any help in deciding the issue.
"[An] affidavit lacking facts does not satisfy the requirements of Fed.R.Civ.P. 56(e)." M & M Medical Supplies and
Service, Inc. v. Pleasant Valley Hospital, Inc., 981 F.2d, 160, 166 (4th Cir.1993). Here, the district court found that the
expert's deposition lacked facts and was not sufficient to satisfy Rule 56 requirements.

44
Takeall claims that his alleged submission of his"protected work" to Pepsi constituted the extra element necessary to
avoid pre-emption. He further contends that the evidence of his mailing of a proposal to Pepsi Baltimore created an
implied-in-fact contract.

45
Pepsico, with whom we agree as to this, argues that this claim represents a clear case for pre-emption.
Here, Pepsico asserts, the rights sought to be vindicated are equivalent to any right encompassed by copyright.
Accordingly, federal pre-emption of state claims is mandatory. 17 U.S.C. Sec. 301. See Kakizaki v. Riedel, 811 F.Supp.
129, 133 (S.D.N.Y.1992). Also, Takeall failed to establish an evidentiary basis for his state claims regarding any of the
elements required by Maryland law for an implied-in-fact contract.
46
The district court's ruling against Takeall on his state claims was premised on the same finding of insufficient
evidence that resulted in the court's disposition of his copyright claims. Concluding that Takeall's state law claims
were unsupported by the record, we find no error in such a conclusion. Further, there is no evidence to suggest that
the conduct of the parties manifested mutual assent necessary for an implied-in-fact contract. As with Takeall's
copyright claims, it cannot be said that the district court erred in its finding of insufficient evidence.

47
Finally, Pepsico argues that, if this Court were to conclude, as we do not, that summary judgment on access grounds
was improperly granted, it should proceed to resolve the question whether the phrase is protectable rather than
remand the issue to the district court.Pepsico contends that material sought to be protected must be independently
created and must possess "at least some minimal degree of creativity." Feist at 1287. In addition, even if a work as a
whole is copyrightable, copyright protection does not extend to its component parts that are not. See Apple
Computer, Inc. v. Microsoft Corp., 799 F.Supp. 1006, 1020 (N.D. Cal.1992). We are of the view that the disputed
phrase fails to evince the requisite degree of originality to entitle it to copyright protection and is a short expression
of the sort that courts have uniformly held uncopyrightable. See Narrell v. Freeman, 872 F.2d 907, 911 (9th Cir.1989);
Alberto-Cluver Co. v. Andrea Dumon, Inc., 466 F.2d 705, 711 (7th Cir.1971). See also 37 C.F.R. Sec. 202.1(a) (1992)
("short phrases such as names, title and slogans" are not subject to copyright). Finding no error in the trial court's
holdings, we affirm.
AFFIRMED
WALDMAN VS LANDOLL
This appeal presents the issue whether the prohibition of "false designation of origin" in section 43(a) of the Lanham Act
of 1946, 15 U.S.C. Sec. 1125(a) (Supp. IV 1992) ("section 43(a)"), applies to a misattribution of authorship of a written
work. The issue arises on the appeal of defendant Landoll, Inc. ("Landoll") from two orders of the United States District
Court for the Southern District of New York, Charles S. Haight, Jr., Judge. The first, that of April 8, 1994, holds that
plaintiffs Waldman Publishing Corp. ("Waldman") and Playmore Inc., Publishers ("Playmore") showed a likelihood of
success on their claim that Landoll violated section 43(a) by publishing books substantially similar to those published by
Waldman without designating Waldman as the source of the books. Waldman Publishing Corp. v. Landoll, Inc., 848
F.Supp. 498 (S.D.N.Y.1994). The second, that of April 21, 1994, grants a preliminary injunction which, inter alia, prohibits
Landoll from publishing or selling any books which copy to a substantial degree books published by Waldman and
distributed by Playmore. We agree that Waldman has shown a likelihood of success on its claim that Landoll falsely
designated the source of its books and that this false designation will cause consumer confusion. However, we remand
for a determination of whether Waldman and Playmore can show irreparable economic harm from the false
designation. The injunction is vacated, and the case is remanded.

1
The facts as found by the district court are as follows, and they are not challenged in this appeal:

2
Waldman publishes a line of children's books. Playmore sells and distributes the books for Waldman. The books are
adaptations of literary works that are in the public domain, including Oliver Twist, The Merry Adventures of Robin
Hood, The Mutiny on Board H.M.S. Bounty, Black Beauty, The Swiss Family Robinson, and David Copperfield. The
Waldman books are abbreviated versions of the classics. They are written in simplified language and have illustrations
on every other page in order to make them more appealing to young children.

3
In creating this series, Waldman contracted with writers to adapt the text of the classics and with artists to create the
illustrations. The writers and artists are credited in the front of each book. Each book also contains a copyright notice
on behalf of Playmore and Waldman for the cover, and on behalf of Waldman for the text.1
4
Waldman and Playmore began selling the softcover line of books called Illustrated Classics in 1979, and introduced
hardcover versions of the same books called Great Illustrated Classics in 1990. There are thirty-six titles currently in
print in the softcover series and thirty-five in hardcover. Waldman and Playmore sell the books to retail outlets such as
discount department stores, toy stores, drug stores and book stores.

5
Defendant Landoll also publishes children's books. In December 1993, Landoll began publishing and selling a line of
books called First Illustrated Classics. The series consists of six softcover books that are illustrated adaptations of
Oliver Twist, The Merry Adventures of Robin Hood, The Mutiny on Board H.M.S. Bounty, Black Beauty, The Swiss
Family Robinson, and David Copperfield. Landoll began publishing and selling hardcover versions of the books in
January 1994.

6
The Landoll books are not exact copies of the Waldman books. It is undisputed by the parties that the cover designs
are not confusingly similar. However, the arrangement of the chapters in the Landoll books mirrors that in the
Waldman books, and the Landoll texts closely follow the Waldman texts. Many of the illustrations in the Landoll books
depict the same events as are illustrated in the Waldman books.

7
Landoll purchased the six adaptations from an English publisher named Peter Haddock on a "camera ready" basis,
meaning that Haddock sent the text and illustrations to Landoll, and Landoll published the books at its facility. Each
book displays the Landoll logo and includes a copyright notice on behalf of Landoll. A writer by whom the story is
"retold" and an illustrator are credited in each book.

8
Waldman and Playmore filed a complaint in the Supreme Court of the State of New York, New York County, on March
21, 1994, alleging that Landoll had violated section 43(a) of the Lanham Act, New York common law, and section 368-
d of New York General Business Law. Waldman and Playmore alleged, inter alia, that the books published by Landoll
entered into the stream of commerce with a false designation of origin because a recipient of the books would likely
think that the books originated with Landoll, when they in fact originated with Waldman. 2 On March 23, 1994, Landoll
removed the action to the United States District Court for the Southern District of New York pursuant to 28 U.S.C. Sec.
1441(a) on the basis of federal question jurisdiction.
9
On March 25, 1994, Waldman and Playmore applied for, and the court issued (1) an order for Landoll to show cause
why a preliminary injunction should not issue, and (2) a temporary restraining order which, inter alia, prohibited Landoll
from publishing or selling its Oliver Twist, The Merry Adventures of Robin Hood, The Mutiny on Board H.M.S. Bounty,
Black Beauty, The Swiss Family Robinson, and David Copperfield. Between March 30 and April 5, 1994, the court
held a four-day hearing during which it heard evidence on the order to show cause.

10
On April 8, 1994, the court ordered that a preliminary injunction issue against Landoll. The court held that Waldman
and Playmore had shown a likelihood of success on their claim of false designation of origin in violation of section
43(a), and that in the absence of a preliminary injunction they would suffer irreparable harm. 3 On April 21, 1994, the
court issued a preliminary injunction which, inter alia, prohibits Landoll from publishing or selling any books which copy
to a substantial degree books published by Waldman and distributed by Playmore. This appeal ensued.
Discussion

Standard of Review

11
A preliminary injunction may be granted only upon a demonstration of "irreparable harm, and 'either (1) a likelihood of
success on the merits of [the] case or (2) sufficiently serious questions going to the merits to make them a fair ground
for litigation and a balance of hardships tipping decidedly in [ ] favor [of the moving party].' " Polymer Technology Corp.
v. Mimran, 37 F.3d 74, 77-78 (2d Cir.1994) (quoting Coca-Cola Co. v. Tropicana Prods., Inc.,690 F.2d 312, 314-15 (2d
Cir.1982)); Jackson Dairy, Inc. v. H.P. Hood & Sons, 596 F.2d 70, 72 (2d Cir.1979) (per curiam). The decision whether
to grant a preliminary injunction is within the discretion of the trial judge, Polymer Technology, 37 F.3d at 78, and if the
moving party has established the requirements for such an injunction, the injunction may be reversed only if the district
court has abused its discretion. Arrow United Indus. v. Hugh Richards, Inc.,678 F.2d 410, 414 (2d Cir.1982). A district
court may abuse its discretion by applying an incorrect legal standard or by basing the preliminary injunction on a
clearly erroneous finding of fact. King v. Innovation Books, 976 F.2d 824, 828 (2d Cir.1992). See also Henry J.
Friendly, Indiscretion About Discretion, 31 Emory L.J. 747 (1982).
12
I. Likelihood of Success on the Lanham Act Claim
13
A false reference to the origin of a work, or a reference which is misleading or likely to confuse, may form the basis of
a claim under section 43(a) of the Lanham Act. King, 976 F.2d at 828. Section 43(a) provides, in relevant part:

14
(1) Any person who, on or in connection with any goods or services ... uses in commerce ... any false designation of
origin ... which--

15
(A) is likely to cause confusion ... as to the origin ... of his or her goods ...

16
.....

17
shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

18
15 U.S.C. 1125(a) (Supp. IV 1992).

19
In order to show likelihood of success on their claim, Waldman and Playmore must show that Landoll affixed a false
designation of origin to its books, that Landoll used the false designation in commerce, that the false designation is
likely to cause consumer confusion, and that Waldman and Playmore are likely to be damaged by the false
designation. The parties do not contest that the designation was used in commerce.

A. False Designation of Origin

20
The first question is whether Landoll's acts constitute a false designation of origin under section 43(a). The section has
been interpreted as prohibiting misrepresentations as to the source of a product in primarily two types of activities: (1)
false advertising and (2) "passing off" (also called "palming off") in which "A" sells its product under "B's" name. See
Roho, Inc. v. Marquis, 902 F.2d 356, 359 (5th Cir.1990). However, section 43(a) also prohibits a practice termed
"reverse passing off," in which "A" sells "B's" product under "A's" name. Id. See generally Restatement (Third) of Unfair
Competition ("Restatement") Sec. 5 (Tent. Draft No. 1 1988).
21
The typical reverse passing off case involves a manufactured product rather than a written work. For example, the
defendant, Richards, in Arrow United Industries v. Hugh Richards, Inc., 678 F.2d 410 (2d Cir.1982), used a product
(an industrial damper) manufactured by the plaintiff, Arrow, reduced it slightly, affixed its own identifying marks, and
represented to a customer that the product was its own. Id. at 412, 415. The court held that this activity constituted
"affixing" a "false designation of origin" in violation of the Lanham Act. Id. at 415. The designation was false because
Arrow was the true manufacturer of the product, and by affixing its name, Richards misappropriated Arrow's
manufacturing talents. Id.; see also Roho, 902 F.2d at 359 ("[t]raditional and reverse palming off activities have both
been recognized as wrongful because they involve attempts to misappropriate another's talents"). This was true even
though Richards had modified the product slightly. Arrow, 678 F.2d at 415.
22
Reverse passing off as applied to a written work involves somewhat different concepts. In the context of written works,
the Lanham Act may be used to prevent "the misappropriation of credit properly belonging to the original creator" of
the work. Restatement Sec. 5, cmt. (c); see also 2 Melville B. Nimmer & David Nimmer, Nimmer on Copyright
("Nimmer on Copyright") Sec. 8.21[E] (1994) (an author may claim violation of section 43(a) if his work is published
without his name). In this context, the Lanham Act prohibits not only, as Landoll suggests, the relabeling of a printed
work, as by tearing the cover off a book and selling it with a false cover, but also the reproduction of a work with a false
representation as to its creator. The misappropriation is of the artistic talent required to create the work, not of the
manufacturing talent required for publication.

23
Landoll asserts that it cannot be held liable for copying Waldman's books because, at the time Waldman and Playmore
sought the preliminary injunction, Waldman had not registered its copyright. This contention, however, misconstrues
the relation between copyright law and the Lanham Act. A claim of reverse passing off is separate and distinct from a
claim of copyright infringement. Dodd v. Fort Smith Special School District No. 100, 666 F.Supp. 1278 (W.D.Ark.1987),
is illustrative. In that case, a school teacher and her students had written a biography of their school's namesake, but
had never affixed a copyright notice to the book or registered with the Copyright Office. Id. at 1279-82. Another
employee of the school had the book published designating the employee as the author and giving no credit to the
teacher and only an acknowledgement to the students for "compiling" the work. Id. at 1281-82. The court held that
although the teacher and the students had no copyright claim, they had a valid Lanham Act claim under section 43(a)
for false designation of origin. Id. at 1284-85. This reasoning is sound because the Copyright Act and the Lanham Act
address different harms. Through a copyright infringement action, a copyright owner may control who publishes, sells
or otherwise uses a work. Through a Lanham Act action, an author may ensure that his or her name is associated with
a work when the work is used.

24
Landoll also asserts that it has not falsely designated the origin of its books because, it contends, two written works
can have the same origin only when the two works are identical. Landoll bases its claim on a line of Ninth Circuit cases
holding that a claim of reverse passing off in the context of written work requires that one work be a "bodily
appropriation" of the other. See Cleary v. News Corp., 30 F.3d 1255, 1261 (9th Cir.1994); Shaw v. Lindheim,919 F.2d
1353, 1364 (9th Cir.1990). The Ninth Circuit's conclusion, however, was based not on an analysis of what constituted
a "false designation of origin" but instead on the Ninth Circuit's determination that only bodily appropriation would
create a likelihood of consumer confusion. Cleary, 30 F.3d at 1261; Shaw, 919 F.2d at 1364. Consumer confusion is a
separate Lanham Act requirement which we will address below, and does not bear on our immediate inquiry into what
makes a designation "false."
25
Whether Landoll falsely designated the origin of its books is a particularly difficult question in light of two circumstances
in this case (1) the underlying classic books are in the public domain, and (2) the Landoll and Waldman books are not
identical. Thus, we face two questions: (1) Given that the underlying works are in the public domain and that
Waldman's books are merely adaptations of the originals, did Waldman add enough of its own work to the underlying
works so that failure to credit Waldman may be considered "false designation of origin"? and (2) Given that the
subsequent Landoll books are not identical to the Waldman books, are they nevertheless similar enough so that
Landoll's failure to credit Waldman constitutes false designation of origin? In pursuing these two inquiries, we find it
appropriate to look for guidance to the law of copyright. See, e.g., King v. Innovation Books, 976 F.2d 824, 829-30 (2d
Cir.1992) (borrowing from copyright concepts to construe Lanham Act claim).
26
1. Are Waldman's books original enough to constitute an "origin" which may be "falsely designated"?

27
Copyright law defines at what point a work becomes an original creation and who should be considered its creator. It is
fair to say that it would constitute a false designation of origin to publish without attribution to its author a work that is
original enough to deserve copyright protection. Therefore, in order to evaluate Waldman's claim, we must determine
whether the Waldman books are original works.

28
Under the Copyright Act, copyright protection subsists only in "original works of authorship." 17 U.S.C. Sec. 102(a)
(Supp. II 1990). Even if a work is completely identical to a prior work, it may be considered original if it is not copied
from the prior work but is rather the product of an independent effort by the author. 1 Nimmer on Copyright Sec.
2.01[A] (citing Novelty Textile Mills, Inc. v. Joan Fabrics Corp., 558 F.2d 1090 (2d Cir.1977)).
29
The Waldman books are adaptations of classic novels and hence are what are termed "derivative works" in copyright
law, meaning that they are adaptations of existing works. Section 101 of the Copyright Act defines a derivative work
as:

30
a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization,
fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form
in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations,
elaborations, or other modifications which, as a whole, represent an original work of authorship, is a "derivative work."

31
17 U.S.C. Sec. 101 (1988). In the case of a derivative work based on an underlying work that is in the public domain,
only the material added to the underlying work is protected by copyright. 1 Nimmer on Copyright Sec. 3.07[C].

32
A derivative work is copyrightable if it is sufficiently original. 4 1 Nimmer on Copyright Sec. 3.03. The law requires more
than a modicum of originality. This has been interpreted to require a distinguishable variation that is more than merely
trivial. L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486 (2d Cir.) (en banc) (requiring some substantial, not just a trivial,
variation), cert. denied, 429 U.S. 857, 97 S.Ct. 156, 50 L.Ed.2d 135 (1976). As we said in Batlin:
33
Originality is ... distinguished from novelty; there must be independent creation, but it need not be invention in the
sense of striking uniqueness, ingeniousness, or novelty, since the Constitution differentiates "authors" and their
"writings" from "inventors" and their "discoveries." Originality means that the work owes its creation to the author and
this in turn means that the work must not consist of actual copying.

34
Id. at 490 (citations omitted).

35
The test of originality is concededly a low threshold. By this definition, the Waldman books are original works. The
selection of which episodes in the classics to include in the books, the redrafting of the text to tailor the books to young
readers and the illustrations add more than a quantum of originality to the original works.

36
2. Are Landoll's books similar enough to Waldman's so that Landoll's failure to credit Waldman constitutes false
designation of origin?

37
Having determined that the author or authors of the Waldman books deserve attribution when their works are used, we
must determine whether the Landoll books are similar enough to Waldman's to create an inference that Landoll has
copied Waldman's books and that Landoll's failure to credit Waldman constitutes a false designation of origin. The
district court found that this was the case. The court held that the similarities between the structure, texts and
illustrations of the books "compel the inference that the Landoll adaptations are copies of the Waldman adaptations,
with the minimal changes intended to disguise the copying." Waldman, 848 F.Supp. at 502-03. The district court
concluded that Landoll falsely designated the origin of its books by placing the Landoll name on what was essentially a
Waldman product.5
38
The standard of comparison used by the district court was essentially the "substantial similarity" standard used to
show copyright infringement. In order to prove infringement of a copyright, the owner of the copyright must show that
the protected work was copied. Kregos v. Associated Press, 3 F.3d 656, 662 (2d Cir.1993), cert. denied, --- U.S. ----,
114 S.Ct. 1056, 127 L.Ed.2d 376 (1994). "Since direct evidence of copying is rarely possible, copying is generally
established by showing (a) that the defendant had access to the copyrighted work and (b) the substantial similarity of
protectible material in the two works." Id.
39
We find this standard an appropriate one for determining false designation of origin under the Lanham Act. A second
work can be said to have the same origin as a first if the second was copied from the first. When the two works are
identical, copying can almost always be assumed. When the works are somewhat different, copying can be
established as it is in copyright infringement.

40
The district court did not abuse its discretion, or make an erroneous finding, let alone a clearly erroneous one, in
finding that the Landoll books were copied from the Waldman books and thus that the books have a common origin.
First, the Waldman books have been on the market since 1979, giving the public, and especially any publisher of
children's books, ample access to them. Counsel for Landoll, in addition, represented to the district court that Peter
Haddock distributed the Waldman Great Illustrated Classics before he created what are now the Landoll books.
(Transcript of Hearing of March 31, 1994, at p. 20). Second, the district court's finding that the Landoll books are
similar to the Waldman books in structure, text and illustration is not challenged on appeal. The similarities between
the books extend beyond the underlying story which is in the public domain. In creating the Waldman adaptations, the
authors had to choose which episodes to summarize, which scenes to illustrate, and what chapter headings to use. All
these aspects of the Waldman books are original to the adaptations and are not taken from the underlying works. The
Landoll books are substantially similar to the Waldman books in all these respects. Thus, absent a showing of
independent creation, the inference is that Landoll falsely designated the origin of its books by indicating its own
authors as the source of the adaptations.

41
The district court ended its inquiry here. It concluded that Waldman and Playmore had shown a likelihood of success
on their claim of reverse passing off because "Landoll is selling the Waldman products as Landoll's own and under
Landoll's name." Waldman, 848 F.Supp. at 503. An additional issue, however, presents itself. False designation of
origin, as applied to written work, deals with false designation of the creator of the work; the "origin" of the work is its
author. The court did not answer the question who the author or authors of the Waldman books were, and hence, who
should be credited on the Landoll books.

42
The Supreme Court, interpreting section 201(a) of the Copyright Act, has held that "the author is the party who actually
created the work." Community for Creative Non-Violence v. Reid, 490 U.S. 730, 737, 109 S.Ct. 2166, 2171, 104
L.Ed.2d 811 (1989). Section 201(b) of the Copyright Act provides further: "In the case of a work made for hire, the
employer or other person for whom the work was prepared is considered the author for purposes of this title...." 17
U.S.C. 201(b) (1988). A work made for hire is defined as:
43
(1) a work prepared by an employee within the scope of his or her employment; or

44
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion
picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text,
as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by
them that the work shall be considered a work made for hire.

45
17 U.S.C. Sec. 101 (1988). If the books were "made for hire," then Waldman is the source of the works, and should be
credited when the works are used. If the books were not "made for hire," then the writers and illustrators should be
credited.

46
The district court found that "Waldman contracted with writers to adapt the text and artists to do the illustrations."
Waldman, 848 F.Supp. at 499. Mr. Hanft, an employee of Waldman, testified at the hearing in the district court that he
had rewritten a classic book in the scope of his employment, although not one of the books at issue.

47
It is unclear from the record whether, as required by part one of the statute, some or all of the books were written by
Waldman employees within the scope of their employment. As this determination is essential to crafting appropriate
preliminary relief, see Section II, and requires further findings of fact, this issue is remanded to the district court for
further consideration.6
B. Consumer Confusion

48
The next issue is whether Waldman and Playmore have shown a likelihood of consumer confusion. The district court
found that consumers will be led to believe falsely that Landoll, and the writers and illustrators credited in the Landoll
books, are the source of the adaptations.

49
As mentioned above, the Ninth Circuit has held that in the context of reverse passing off, consumer confusion is
caused only by the false designation of works that are "bodily appropriations" of the originals. See Cleary v. News
Corp., 30 F.3d 1255, 1261 (9th Cir.1994); Shaw v. Lindheim, 919 F.2d 1353, 1364 (9th Cir.1990). We see no reason
for such a bright-line rule. We concur with the district court's conclusion that consumers are likely to be confused by
Landoll's misrepresentation as to the source of its books, even though the Landoll books are "substantially similar" to
but not "bodily appropriations" of the Waldman books.7
C. Harm

50
We must next consider whether Waldman and Playmore have shown that they have been, and will continue to be,
harmed by Landoll's false designation of its books' origin. Section 43(a) provides that a civil action may be brought by
"any person who believes he or she is or is likely to be damaged by [a violation of this section]." 15 U.S.C. Sec.
1125(a)(1). "[T]his court has limited standing to assert a section 43 claim to a 'purely commercial class' of plaintiffs."
Berni v. International Gourmet Restaurants, Inc., 838 F.2d 642, 648 (2d Cir.1988). In order for a preliminary injunction
to issue, the moving party must show irreparable harm. Polymer Technology Corp. v. Mimran, 37 F.3d 74, 77 (2d
Cir.1994).
51
In Smith v. Montoro, 648 F.2d 602 (9th Cir.1981), the Ninth Circuit discussed the gravamen of the injury in a reverse
passing off case:
52
[T]he originator of the misidentified product is involuntarily deprived of the advertising value of its name and of the
goodwill that otherwise would stem from public knowledge of the true source of the satisfactory product.

53
Id. at 607. This passage describes an injury to the "originator" of the misidentified product. The Restatement of Unfair
Competition describes the potential harm more generally:

54
the misrepresentation may be likely to induce prospective purchasers to buy additional goods or services from the
actor, resulting in a diversion of trade from the party seeking relief.

55
Restatement Sec. 5, cmt. (c).

56
The district court held that Waldman and Playmore were both economically harmed by Landoll. The court found that
"[i]t is reasonable to assume that most of the Landoll adaptations sold at retail would have been Playmore sales if the
Landoll alternative had not been available." Waldman, 848 F.Supp. at 504 (emphasis added). This finding assumes
that Waldman and Playmore could enjoin Landoll from publishing its books altogether by means of a section 43(a)
action. As we will discuss in Section II below, if an injunction is appropriate in this case, it could not prohibit Landoll
from publishing the adapted classics; it could only prohibit them from publishing the books with a false representation
as to their source. Thus, we conclude that the district court erred in determining whether Waldman and Playmore were
harmed by the presence of Landoll in the market. The court should have determined instead whether they were
economically harmed by Landoll's false designation and whether, to meet the requirement for a preliminary injunction,
continuing harm would be irreparable. Because this determination requires further fact finding, this issue is remanded
to the district court.

II. The Scope of the Injunction

57
Injunctive relief should be narrowly tailored to fit specific legal violations. Society For Good Will To Retarded Children,
Inc. v. Cuomo, 737 F.2d 1239, 1251 (2d Cir.1984). Accordingly, an injunction should not impose unnecessary burdens
on lawful activity. Id.
58
The injunction issued by the district court prohibits Landoll from publishing and selling any books that are substantially
similar to Waldman's Great Illustrated Classics. Even if an injunction is warranted, which depends upon whether
Waldman and Playmore can prove an irreparable economic injury, the scope of the district court's injunction is too
broad.

59
At most, Waldman and Playmore can enjoin only Landoll's acts that violate section 43(a). In this case, Landoll's false
designation of the origin of its books is the act potentially violative of the Lanham Act. Therefore, Waldman and
Playmore are only entitled to enjoin Landoll from falsely representing the source of its books. Landoll may in any case
continue to publish its books as long as it correctly credits Waldman's and Playmore's authors.8
60
The issue of whether Landoll can reproduce the Waldman books at all is a copyright issue. At the time Waldman and
Playmore moved for the preliminary injunction, Waldman had not registered its copyright, and therefore could not seek
an injunction based on copyright infringement. It has now registered its copyright and has amended its complaint to
include a cause of action for copyright infringement. Because this was done after this appeal was filed, we have not
considered the copyright claim in this appeal. The district court may consider on remand whether the parties' positions
have changed now that Waldman has registered.

Conclusion

61
Landoll's publication and sale of books substantially similar to those published by Waldman, designating its own
authors as the source of the work instead of designating the author or authors of the Waldman books, constitutes a
false designation of origin under the Lanham Act. The case is remanded for a finding of whether Waldman and
Playmore can show irreparable economic injury as a result of the false designations, and, if appropriate, for the
refashioning of an injunction in accordance with this opinion.

62
Preliminary injunction vacated, and case remanded.

1
At the time the district court issued the preliminary injunction, Waldman and Playmore had not registered their copyrights
with the Copyright Office. They have now done so, and they correspondingly amended their complaint to allege copyright
infringement. As the complaint was amended after this appeal was taken, we cannot consider the copyright claim

2
The complaint also alleged trade dress infringement in violation of section 43(a), and Waldman and Playmore originally
argued for a preliminary injunction on this ground. However, they dropped the trade dress claim as a basis for a
preliminary injunction during their summation at the hearing before the district court, and they have since dropped the
claim from their Second Amended Complaint

3
The court also held that Waldman's and Playmore's common law claims were preempted by Section 301(a) of the
Copyright Act, 17 U.S.C. Sec. 301(a) (1988). This portion of the order was not appealed

4
To be copyrightable, a derivative work must also not infringe the original work, a requirement that is not relevant to the
discussion here because the underlying works are in the public domain

5
Landoll, relying on Kregos v. Associated Press, 937 F.2d 700, 711 (2d Cir.1991), argues that the District Court wrongly
relied on Landoll's use of a copyright symbol in reaching its decision that Landoll falsely designated the origin of its books.
We do not, however, read the District Court's opinion as relying on such reasoning
6
If the Waldman books are not works for hire, the issue then arises whether Waldman and Playmore have standing to bring
a Lanham Act claim against Landoll. The Lanham Act provides that an action may be brought by any person who is
damaged by a violation of the Act. It states in relevant part:

Any person who [violates the Act] shall be liable in a civil action by any person who believes that he or she is or is likely to
be damaged by such act.

15 U.S.C. Sec. 1125(a)(1) (Supp. IV 1992). This Circuit has limited plaintiffs to parties with a reasonable commercial
interest to protect. PPX Enterprises, Inc. v. Audiofidelity, Inc., 746 F.2d 120, 125 (2d Cir.1984). We leave the issue open,
but if the district court on remand finds that Waldman is not the author of the Waldman books, it should then determine
whether Waldman and Playmore were damaged or reasonably believe they were damaged by Landoll's false
representation as to the author of its books, and therefore have or do not have standing to sue in this case.
7
Landoll asserts as well that the district court applied an improper legal standard by failing to determine whether the
structure and text of the Waldman books had attained a secondary meaning. That standard is not appropriate in this case.
It is used in typical passing-off cases involving trademarks or trade dress which are not inherently distinctive; in such a
case, a plaintiff, in order to prove consumer confusion, must generally show that the copied features of its product have
attained a secondary meaning. Restatement Sec. 13 (Tent. Draft No. 2 1990). In this case, Waldman and Playmore allege
the opposite. They contend that because the text and structure of their books do not have a secondary meaning,
consumers will believe that the Landoll books actually originated with Landoll, when in fact they were created by Waldman

8
It is worth noting that the attribution must be accurate and not misleading to satisfy the requirements of section 43(a). See
King v. Innovation Books, 976 F.2d 824, 828 (2d Cir.1992); Follett v. New American Library, Inc., 497 F.Supp. 304, 311-
13 (S.D.N.Y.1980). The credit to the author or authors of the Waldman books should reflect that they rewrote a classic
book authored by someone else
As discussed in Section I.A, this case is remanded for the District Court to determine who the author or authors are of the
Waldman adaptations. It may be the case, because of the "work for hire" doctrine, that Waldman is the author.
CONTRY KIDS VS SHEEN

United States Court of Appeals,Tenth Circuit.


COUNTRY KIDS 'N CITY SLICKS, INC., Plaintiff-Appellant, v. Vicki SHEEN, Bill Sheen, Ladawn Bragg, and Flake Wells,
doing business as Carousel Kids, Defendants-Appellees.

No. 94-6025.
Decided: March 5, 1996
Before BRORBY, EBEL, Circuit Judges and BRATTON,Senior District Judge.* Eric S. Gray of Gray, Goresen, Moriarty &
Wright, Oklahoma City, Oklahoma (Thomas P. Goresen with him, on the briefs) for Plaintiff-Appellant. Kenneth L.
Buettner of McAfee & Taft, Oklahoma City, Oklahoma, for Defendants-Appellees.

The instant appeal arises from the denial of a preliminary injunction in an action for copyright infringement. In this
appeal, Plaintiff-Appellant Country Kids 'N Slicks, Inc. (“Plaintiff”) contends that the district court erred in ruling for
purposes of the preliminary injunction that Defendants-Appellees Vickie Sheen, Bill Sheen, Flake Wells, and LaDawn
Bragg, d/b/a Carousel Kids (collectively “Defendants”) did not establish infringement on its copyrights describing certain
wooden dolls modelled after the traditional paper dolls. Specifically, Plaintiff argues that the district court erred as a
matter of law by:  (1) holding that the medium, size and shape of the dolls are not copyrightable features;  (2)
misinterpreting the standard for copyright infringement by requiring Plaintiff to show that the Defendants' dolls were a
“virtual copy” of Plaintiff's dolls;  and (3) requiring that Plaintiff establish the likelihood of bankruptcy in order to meet
the irreparable injury requirement for issuing a preliminary injunction. We AFFIRM the district court's holding that the
medium, size and shape of the dolls are not copyrightable features. However, with regard to other features of the
dolls, we cannot discern whether the district court utilized the correct legal standard for copyright infringement or
properly determined that Plaintiff was entitled to a presumption of irreparable harm in the event of copyright
infringement. Therefore, on those issues we VACATE the judgment of the district court and REMAND this case for
further proceedings.

BACKGROUND

Plaintiff, who does business under the name Crayon Kids, is a wholesale doll manufacturer that sells wooden dolls
created by Country Kids 'N Slicks, Inc.'s President, Pam Laughlin (“Laughlin”). Plaintiff holds copyrights on the various
dolls it produces. Laughlin conceived of the concept of the wooden doll when she noticed that her five-year-old
daughter had difficulty keeping the clothing on paper Barbie dolls. Based on this concept, Laughlin founded Country
Kids, and began producing a line of wooden dolls. Plaintiff's wooden dolls all employ a similar size and shape to the
traditional paper dolls.

In mid-1993, Plaintiff discovered that Vickie Sheen, a former employee of Country Kids, had begun marketing her own
models of wooden dolls. Ms. Sheen's husband, Bill Sheen, Mr. Sheen's sister, LaDawn Bragg, and Mr. Flake Wells III all
assisted her in this effort. Defendants, who marketed their dolls under the name “Carousel Kids,” did not obtain a
license to use Plaintiff's copyright and clearly had access to the design of Plaintiff's dolls. While employing the basic
concept of Plaintiff's dolls, Defendants claimed that their dolls had distinctly different features (e.g., hair, eyes, nose,
mouth, cheeks, etc.).

After learning of Defendants' dolls, Plaintiff filed suit and requested a preliminary injunction to prevent Defendants from
marketing their Carousel Kids dolls. At a hearing, Plaintiff presented evidence that Defendants lured away some of
Plaintiff's sales representatives, sold their dolls at lower prices, and that some customers could not differentiate
between the two brands of dolls. Defendants, however, dispute the extent of any such confusion. Plaintiff also
suggested that the competition of Defendants' dolls would force both companies into bankruptcy. The district court
denied the motion for a preliminary injunction on the grounds that Plaintiff could not demonstrate either a likelihood of
success on the merits or a threat of irreparable harm. Plaintiff now appeals, and we exercise jurisdiction under 28
U.S.C. § 1292(a).

DISCUSSION

We consider this case on appeal from a denial of a preliminary injunction to restrain an alleged infringement of
Plaintiff's copyright in violation of 17 U.S.C. § 502(a). In order to merit a preliminary injunction, Plaintiff must establish
that:  (1) it has a substantial likelihood of prevailing on the merits;  (2) it will suffer irreparable injury if it is denied the
injunction;  (3) its threatened injury outweighs the injury that the opposing party will suffer under the injunction;  and
(4) an injunction would not be adverse to the public interest. Autoskill, Inc. v. Nat'l Educ. Support Sys., Inc., 994 F.2d
1476, 1487 (10th Cir.) (citation omitted), cert. denied, 510 U.S. 916, 114 S.Ct. 307, 126 L.Ed.2d 254 (1993). The district
court ruled that Plaintiff failed to meet either of the first two requirements, and thus, did not make the required
showing to warrant the issuance of an injunction. Accordingly, the district court declined to rule on whether Plaintiff
had made the necessary showing on the third and fourth requirements necessary to support the issuance of a
preliminary injunction.

We review the district court's denial of Plaintiff's application for a preliminary injunction to determine if the district
court “abuse*d+ its discretion, commit*ted+ an error of law, or *wa+s clearly erroneous in its preliminary factual findings.”
Autoskill, 994 F.2d at 1487;  Atari, Inc. v. North Am. Philips Consumer Electronics Corp., 672 F.2d 607, 613 (7th Cir.), cert.
denied, 459 U.S. 880, 103 S.Ct. 176, 74 L.Ed.2d 145 (1982). Plaintiff does not argue that the district court's factual
findings were clearly erroneous; 1  rather, Plaintiff focuses this appeal on the district court's legal rulings. First, Plaintiff
argues that the district court incorrectly ruled that it was not likely to succeed on the merits because the court
erroneously concluded that the shape and size of the dolls were not copyrightable and because the court erroneously
interpreted the “substantial similarity” test that governs copyright infringement cases to require the accused product to
be a “virtual copy” of the copyrighted product. Second, Plaintiff contends that the district court incorrectly ruled that
Plaintiff would not suffer an irreparable injury if it was denied the requested injunction.

A. Plaintiff's Likelihood of Success on the Merits

In order to prevail on its copyright infringement claim, Plaintiff must establish both:  (1) that it possesses a valid
copyright and (2) that Defendants “copied” 2 protectable elements of the copyrighted work. Feist Pubs., Inc. v. Rural
Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 1295-96, 113 L.Ed.2d 358 (1991);  Gates Rubber Co. v. Bando Chem.
Indus., Ltd., 9 F.3d 823, 831 (10th Cir.1993). This appeal turns on whether Defendants copied protectable elements of
Plaintiff's dolls.3 This examination involves two distinct inquiries:  first, whether Defendants, as a factual matter, copied
Plaintiff's work, and second, whether, as a mixed issue of fact and law, those elements that were copied were protected.
Id. at 832. The second inquiry will require us to determine which elements of Plaintiff's work (e.g., design, shape, size
and concept of Plaintiff's dolls) are protectable.

While the fact of copying is difficult to prove directly, Plaintiff can indirectly prove copying by establishing that
Defendants had access to the copyrighted work and that there are probative similarities between the copyrighted
material and the allegedly copied material.4 Gates Rubber, 9 F.3d at 832;  see also Melville B. Nimmer & David Nimmer,
3 Nimmer on Copyright, § 13.01[B], at 13-10 to 13-12 (1995). A finding that Defendants copied some aspect of
Plaintiff's dolls, however, would not end the court's inquiry, as liability for copyright infringement will attach only where
protected elements of a copyrighted work are copied. Gates Rubber, 9 F.3d at 833 (citing Baker v. Selden, 101 U.S. 99,
101-03, 25 L.Ed. 841 (1879)). To impose such liability, the court must find substantial similarity between those aspects
of Plaintiff's dolls which are legally protectable and the Defendants' dolls. See Autoskill, 994 F.2d at 1490.
Thus, the question of whether Defendants infringed on Plaintiff's copyright turns on whether Defendants' product is
substantially similar to the protectable elements of Plaintiff's product. To make this determination, we find it useful to
apply the “abstraction-filtration-comparison” test. See Autoskill 994 F.2d at 1490-98;  Gates Rubber, 9 F.3d at 834-
842.5 At the abstraction step, we separate the ideas (and basic utilitarian functions), which are not protectable, from
the particular expression of the work. Then, we filter out the nonprotectable components of the product from the
original expression. Finally, we compare the remaining protected elements to the allegedly copied work to determine
if the two works are substantially similar. In the instant case, Plaintiff claims that the district court erred in applying
this test by filtering out the size, shape and medium of the dolls and by interpreting the “substantial similarity” standard
to require virtual identity of products.

1. The Abstraction and Filtration Analysis

The district court ruled that although the dolls' specific features were protected, Plaintiff's copyright did not extend to
the size, shape and medium of the dolls. This ruling stemmed from the court's application of the Copyright Act, which
provides in relevant part that:

[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system,
method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained,
illustrated, or embodied in such work.

17 U.S.C. § 102(b). This provision differentiates between expression and ideas-withholding protection for ideas so that
they can remain in the public domain and provide a general benefit to society. See, e.g., Autoskill, 994 F.2d at 1491
(“One of the fundamentals of copyright law is that a copyright does not protect an idea, but only the expression of the
idea.”). However, this limit on copyright protection, although sound in theory, is often difficult to apply in practice.
See Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738, 742 (9th Cir.1971) (“The critical distinction between
‘idea’ and ‘expression’ is difficult to draw.”).

Because the idea/expression distinction is somewhat elusive, courts often adopt an ad hoc approach, eschewing the
application of any bright line rule or any clear formula. See Peter Pan Fabrics, Inc. v. Martin Weiner Corp., 274 F.2d
487, 489 (2d Cir.1960) (“Obviously, no principle can be stated as to when an imitator has gone beyond copying the
‘idea,’ and has borrowed its ‘expression’ ” so such decisions must “inevitably be ad hoc ”);  see also Gund, Inc. v. Smile
Int'l, Inc., 691 F.Supp. 642, 644 (E.D.N.Y.1988) (noting the absence of any statutory or judicially created criteria for this
determination), aff'd, 872 F.2d 1021 (2d Cir.1989). However, in differentiating between an idea and a specific form of
expression, it is important to remember that copyright law seeks to achieve a proper balance between competition
based on public ideas and incentive to produce original work.6 Hence, to the extent that the idea and the particular
expression cannot be separated, the work cannot be protected by a copyright because “protecting the ‘expression’ in
such circumstances would confer a monopoly of the ‘idea’ upon the copyright owner.” Kalpakian, 446 F.2d at 742;  see
also Atari, 672 F.2d at 616. Indeed, “where the protected work and the accused work express the same idea, the
similarity that inevitably stems solely from the commonality of the subject matter is not proof of unlawful copying.”
Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 913 (2d Cir.1980). Thus, “*s+imilarity as to standard doll features is
not as indicative of copying as would be similarity of features that render the protected toy distinctive.” Id. at 916-17.7

Plaintiff claims that the district court erred in not affording copyright protection to the size, shape and medium of the
doll-that is, in setting the level of abstraction so low as to view the Plaintiff's wooden doll as an idea rather than as a
protectable form of expression. In attempting to focus on the originality of its creation, Plaintiff invokes Fisher-Price
Toys, Div. of Quaker Oats Co. v. My-Toy Co., 385 F.Supp. 218 (S.D.N.Y.1974). However, Fisher-Price fails to advance
Plaintiff's argument. In Fisher-Price, the court stated that even if a doll is composed of a series of different features,
which in and of themselves are nonprotectable, the “original combination of these features” may render the doll
protectable. Id. at 220. However, to the extent that certain similarities between a copyrighted work and an allegedly
infringing work are inherent in a nonprotectable idea-i.e., the general features of a doll-we must filter those similarities
out of the comparison. See North American Bear Co. v. Carson Pirie Scott & Co., No. 91 C 4550, 1991 WL 259031, at *4
(N.D.Ill. Nov. 27, 1991) (“The only features that appear similar to the ordinary observer-such as general size, shape, color
and softness-are the very same features that are so inherent in the abstract idea of a teddy bear that they are not
subject to copyright protection.”).

In the instant case, we conclude that the district court correctly characterized the wooden form of the traditional
paper doll as an idea rather than a protected expression. Plaintiffs cannot demonstrate infringement merely because
Defendants produced wooden paper dolls;  nor may they rely on similarities between their work and Defendants' work
that necessarily stem from this unprotectable idea. See, e.g., Concrete Mach. Co. v. Classic Lawn Ornaments, Inc., 843
F.2d 600, 607 (1st Cir.1988) (appellant cannot prohibit others from appropriating its idea of life-size, “realistic-looking
concrete deer”;  only substantial similarity in specific features could support an infringement claim);  Aliotti v. R. Dakin &
Co., 831 F.2d 898, 901 (9th Cir.1987) (“No copyright protection may be afforded to the idea of producing stuffed
dinosaur toys or to elements of expression that necessarily follow from the idea of such dolls.”);  Atari, 672 F.2d at 617
(maze framework of PAC-MAN is “standard game device* +” and thus not copyrightable under doctrine of scenes a faire;
 only specific characters used in the game are protectable);  Original Appalachian Artworks, Inc. v. Toy Loft, Inc., 684 F.2d
821, 825 n. 5 (11th Cir.1982) (idea of soft sculpture human-figure doll is not copyrightable);  Mattel, Inc. v. Azrak-
Hamway Int'l, Inc., 724 F.2d 357, 360 (2d Cir.1983) (“Though the dolls' bodies are very similar, nearly all of the similarity
can be attributed to the fact that both are artist's renderings of the same unprotectable idea-a superhuman muscleman
crouching in ․ a traditional fighting pose”);  Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 916-17 (2d Cir.1980) (no
infringement although dolls were “mechanically identical and structurally similar,” both were made of plastic and
between three and four inches tall and there was similarity as to “standard doll features”;  mechanical aspects of dolls
not copyrightable and “all dolls attempting to express the same idea will of necessity display at least some similarity”);
 Uneeda Doll Co. v. P & M Doll Co., 353 F.2d 788, 789 (2d Cir.1965) (idea of doll in a display box with its arm around a red
and white striped pole is not copyrightable);  Ideal Toy Corp. v. Kenner Prod. Div. of General Mills Fun Group, Inc., 443
F.Supp. 291, 304 (S.D.N.Y.1977) (producer and licensee of “Star Wars” film not entitled to preliminary injunction against
toy manufacturers, as “*t+he defendants have no more right to a monopoly in the theme of a black-robed, helmeted, evil
figure in outer-space conflict with a humanoid and a smaller non-humanoid robot than Shakespeare would have had in
the theme of a ‘riotous knight who kept wassail to the discomfort of the household’ and who had conflicts with ‘a
foppish steward who became amorous of his mistress.”) (citation omitted).

Moreover, to the extent that the shape and size of Plaintiff's dolls are not inherent in the idea of a wooden paper doll,
they are typical paper doll features found in the public domain and therefore are not copyrightable. See, e.g., Eden
Toys, Inc. v. Marshall Field & Co., 675 F.2d 498, 500-01 (2d Cir.1982) (no infringement where both plaintiff and
defendant produced stuffed snowmen of the same size with traditional snowman features). Plaintiff's dolls come in
three sizes, and have outstretched arms and legs and turned-out feet. At the hearing on Plaintiff's preliminary
injunction motion, Defendants presented numerous paper dolls similar to Plaintiff's dolls in size and shape, as well as
craft books and collectors' books demonstrating that the form of Plaintiff's dolls is the traditional form of paper dolls.
As the district court pointed out, “Plaintiff virtually concedes that she copied the idea herself from the paper dolls with
which her daughter played.” Thus, the paper doll shape and size upon which Plaintiff relies were already in the public
domain and cannot be subject to copyright protection. See Autoskill, 994 F.2d at 1494 (“It is axiomatic that material in
the public domain is not protected by copyright, even when incorporated into a copyrighted work.”) (quoting 3 Nimmer
§ 13.03[F][4], at 13-98);  L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486, 488 (2d Cir.) (design of mechanical “Uncle Sam”
banks, patented in 1886, was in the public domain, as “*t+he banks are well documented in collectors' books and known
to the average person interested in Americana.”), cert. denied, 429 U.S. 857, 97 S.Ct. 156, 50 L.Ed.2d 135 (1976).

Our judgment that the wooden doll is a non-copyrightable idea is reinforced by the Copyright Act's focus on artistic
innovation and its refusal to offer protection to utilitarian qualities. The Copyright Act's definition of protectable
pictorial, graphic and sculptural works sets out this distinction:  “Such works shall include works of artistic craftsmanship
insofar as their form but not their mechanical or utilitarian aspects are concerned.” 17 U.S.C. § 101. Therefore, not
only is the idea of a wooden doll not copyrightable, but any basic and utilitarian aspects of the dolls, such as the shape of
a human body and standard paper doll poses which are both friendly and inviting and also utilitarian in their ease of
manufacture and adaptability to the attachment of various wardrobes, cannot be copyrighted. See Durham Indus., 630
F.2d at 913-16 (because “copyright protection extends only to the artistic aspects, but not the mechanical or utilitarian
features, of a protected work,” neither idea of small, plastic walking or crawling dolls nor the mechanism that made
locomotion possible were copyrightable).

Accordingly, we affirm the district court's holding that the size, shape and medium of Plaintiff's dolls are not protectable,
and that copyright infringement cannot be demonstrated by Defendants' copying of these elements. The issue of
which remaining features of Plaintiff's dolls may be copyrightable has not been raised on appeal, and we therefore do
not address it.8

2. The Proper Test for Infringement

After filtering out the unprotectable elements of a work, a court must determine whether “those protectable portions
of the original work that have been copied constitute a substantial part of the original work-i.e. a matter that is
significant in the plaintiff's *product+.” Gates Rubber, 9 F.3d at 839. This is “primarily a qualitative rather than a purely
quantitative analysis, ․ and must be performed on a case-by-case basis.” Id. (citation omitted);  see also 3 Nimmer §
13.03[A], at 13-54 (“even if the similar material is quantitatively small, if it is qualitatively important, the trier of fact may
properly find substantial similarity.”). Plaintiff contends that, in addition to erroneously filtering out protected
elements, the district court incorrectly concluded that Plaintiff could not prevail unless Defendants' dolls were a “virtual
copy” of Plaintiff's dolls.

The traditional test for substantial similarity is “whether the accused work is so similar to the plaintiff's work that an
ordinary reasonable person would conclude that the defendant unlawfully appropriated the plaintiff's protectible
expression by taking material of substance and value.” Atari, 672 F.2d at 614 (citation omitted). The essence of this
test is whether the “ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them,
and regard their aesthetic appeal as the same.” Peter Pan Fabrics, 274 F.2d at 489. The touchstone of the analysis is
the “overall similarities rather than the minute differences between the two works.” Atari, 672 F.2d at 618.

In this context, we believe the “ordinary observer” test is an appropriate method for the court to use in its comparison
analysis. See, e.g., Concrete Mach. Co., 843 F.2d at 609 (after establishing copying of protected aspects, “the trier of
fact can then assess pursuant to the ‘ordinary observer’ test whether there is substantial similarity between the
protected expression and the accused work”);  Atari, 672 F.2d at 614 (“the ordinary observer test, in application, must
take into account that the copyright laws preclude appropriation of only those elements of the work that are protected
by the copyright”).

Although the district court invoked the ordinary observer test, it does not appear that this test was correctly applied.
At one point in its oral ruling the district court stated that “Defendants would infringe only by copying these appliques
with such detail and particularity that an ordinary observer would ․ confuse a particular Carousel doll with one of the
very Crayon dolls shown in Plaintiff's Exhibits One and Two.” Aplt.App. 183-84. Later in its oral ruling, it ultimately
concluded that an ordinary observer “would not conclude that any current doll in Defendants' production is a virtual
copy of any given, particular doll *manufactured by Plaintiff+.” Aplt.App. 184 (emphasis added). However, a finding of
substantial similarity does not require that an infringing work be a “virtual copy” of a protected one. Nor is the sine
qua non of substantial similarity whether an ordinary observer would “confuse” the two works in their entirety.
Rather, as stated above, the test is whether the accused work is sufficiently similar that an ordinary observer would
conclude that the defendant unlawfully appropriated the plaintiff's protectable expression by taking material of
substance and value. Atari, 672 F.2d at 614;  see also Concrete Mach. Co., 843 F.2d at 607;  Educational Testing Servs.
v. Katzman, 793 F.2d 533, 541 (3d Cir.1986) (quoting Atari, 672 F.2d at 614). We therefore remand this case to the
district court for a comparison between those features of Plaintiff's dolls which it finds protectable and Defendants' dolls
under the appropriate substantial similarity test.

B. The Irreparable Injury Standard

Our decision to reverse the district court's ruling on Plaintiff's likelihood of success on the merits requires us to
consider the court's alternative ruling that Plaintiffs failed to demonstrate that they would suffer an irreparable injury
without the issuance of the injunction. In ruling that Plaintiffs failed to demonstrate that they would suffer an
irreparable injury, the district court found no evidence that “competition from Carousel Kids is causing substantial
financial harm or a danger of Plaintiff's bankruptcy.” Aplt.App. at 111. The district court did not consider whether to
adopt the prevailing view in cases of copyright infringement that a showing of likelihood of success on the merits raises
a presumption of irreparable harm. See, e.g., National Football League v. McBee & Bruno's, Inc., 792 F.2d 726, 729 (8th
Cir.1986) (“Copyright law has long held that irreparable injury is presumed when the exclusive rights of the holder are
infringed.”).9 Because the financial impact of copyright infringement is hard to measure and often involves intangible
qualities such as customer goodwill, we join the overwhelming majority of our sister circuits and recognize a
presumption of injury at the preliminary injunction stage once a copyright infringement plaintiff has demonstrated a
likelihood of success on the merits.10 Because we are remanding on the issue of copyright infringement, we cannot
determine whether the presumption of irreparable injury that arises upon a finding of copyright infringement would
apply here. Thus, we vacate the district court's finding of no irreparable injury and remand this issue for further
proceedings consistent with this opinion.11

CONCLUSION

We AFFIRM the ruling of the district court that the medium, size and shape of Plaintiff's dolls are not copyrightable
features. With regard to other features of the dolls, we VACATE the rulings of the district court on the issues of
substantial similarity and irreparable injury, and we REMAND for further proceedings in accordance with the principles
set forth in this opinion.

FOOTNOTES

1. Despite Plaintiff's counsel's suggestion to the contrary at oral argument, Plaintiff has not appealed the ultimate
factual finding as to whether the actual features of Defendants' dolls infringed on Plaintiff's copyright. Plaintiff's
“Statement of Issues Presented For Review” explicitly limited this appeal to the district court's purported errors of law,
and Plaintiff's Reply Brief explained that “the issues raised on appeal relate to whether the trial court applied the
appropriate legal standards and not whether Carousel Kids introduced evidence to support the erroneous legal tests.”
Rep.Br. at 2. However, as discussed infra, we do consider the district court's application of the law to the facts in order
to discern whether the district court adopted the correct legal standard.

2. “Copying” is regularly used as a shorthand to refer to the infringement of a copyright holder's exclusive rights
under a copyright. Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 832 n. 6 (10th Cir.1993).

3. Defendants briefly argue that Plaintiff was not validly assigned the copyrights at issue, and thus, cannot sue for
infringement. However, because the district court did not rule on this issue below, we do not consider it on appeal.

4. While the basic inquiry looks to whether the allegedly copied work is “substantially” similar to the original work,
Autoskill, 994 F.2d at 1490, we have explained that the degree of similarity required may vary depending on the showing
of access, Gates Rubber, 9 F.3d at 833 n. 9. A greater showing of similarity may allow access to be inferred where it is
not otherwise shown. Id. In the instant case, however, Defendants concede that they had access to the copyrighted
work.

5. The “abstraction-filtration-comparison” test, or the “successive filtration” test, was developed for use in the
context of alleged infringement of computer software, and it is exclusively in that context that we have previously
applied the test. See, e.g., Gates Rubber, 9 F.3d at 834-39;  Autoskill, 994 F.2d at 1491-98. However, we see no
reason to limit the abstraction-filtration-comparison approach to cases involving computer programs. See 3 Nimmer §
13.03[E], at 13-96 to 13-97 (The successive filtration test “should be considered not only for factual compilations and
computer programs, but across the gamut of copyright law”) (footnotes omitted).

6. The relevant caselaw addresses this theme at length. See Sony Corp. of Am. v. Universal City Studios, Inc., 464
U.S. 417, 429 (1984) (explaining that copyright law seeks to achieve a balance between “the interests of authors ․ in the
control and exploitation of their writings ․ on the one hand, and society's competing interests in the free flow of ideas
[and] information ․ on the other hand.”);  Meade v. United States, 27 Fed.Cl. 367, 372 (Ct.Cl.1992) (“*I+n defining
protectable expression, the court should ‘neither draw the line so narrowly that authors, composers and artists will have
no incentive to produce original literary, musical and artistic works, nor [should the court] draw it so broadly that future
authors, composers and artists will find a diminished store of ideas on which to build their works.’ ”) (quoting Paul
Goldstein, Copyright:  Principles, Law, and Practice § 2.3.1.2 (1989)), aff'd, 5 F.3d 1503 (Fed.Cir.1993).

7. This concept, applied here to the copyrightability of dolls, relates to the scenes a faire approach employed in the
literary context. This approach examines “incidents, characters or settings which are as a practical matter
indispensable, or at least standard, in the treatment of a given topic [to determine which] stock literary devices are not
protectible by copyright.” Atari, 672 F.2d at 616 (internal quotations and citations omitted).

8. The district court's order stated that “*t]he expression that is entitled to copyright protection is the hair, eyes, nose,
ears, mouth, underwear and shoes of the dolls.” We decline to pass upon this statement because that issue has not
been raised on this appeal.

9. We have previously reserved this issue as an open question. See Autoskill, 994 F.2d at 1498.

10. See, e.g., Concrete Mach. Co., 843 F.2d at 611;  Hasbro Bradley, Inc. v. Sparkle Toys, Inc., 780 F.2d 189, 192 (2d
Cir.1985);  Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1254 (3d Cir.1983), cert. dismissed, 464 U.S.
1033, 104 S.Ct. 690, 79 L.Ed.2d 158 (1984);  Service & Training, Inc. v. Data Gen. Corp., 963 F.2d 680, 690 (4th Cir.1992);
 Forry, Inc. v. Neundorfer, Inc., 837 F.2d 259, 267 (6th Cir.1988);  Atari, 672 F.2d at 620;  Johnson Controls, Inc. v. Phoenix
Control Sys., Inc., 886 F.2d 1173, 1174 (9th Cir.1989). But see Plains Cotton Coop. Ass'n. v. Goodpasture Computer
Serv., Inc., 807 F.2d 1256, 1261 (5th Cir.) (“Th*e presumption of irreparable injury+ rule ․ is not established in this circuit.
On the contrary, we have made it clear ․ that preliminary injunctions will be denied based on a failure to prove
separately each of the four elements of the four prong test.”) (footnote omitted), cert. denied, 484 U.S. 821, 108 S.Ct.
80, 98 L.Ed.2d 42 (1987).

11. Plaintiffs also contend that the district court erred in requiring a finding that the infringement would lead to a
threat of bankruptcy. Defendants respond that the district court's finding that “*t+he evidence is not at all persuasive
that Plaintiff is in danger of going broke because of Defendant's efforts,” Aplt.App. at 185, was premised on Plaintiff's
theory of the case. We do not address that issue on this appeal. However, we do note that the legal standard of
irreparable injury can be satisfied through a showing lesser than the threat of bankruptcy. See, e.g., Autoskill, 994 F.2d
at 1498 (evidence that plaintiff would suffer “loss of uniqueness in the marketplace,” that defendant's copied product
could “affect *plaintiff's+ reputation” and that plaintiff could not ascertain how many customers were lost to defendant
sufficient to support finding of irreparable harm).

EBEL, Circuit Judge.


his cause is before the Court on Plaintiff's First Motion for Partial Summary Judgment (Copyright Infringement) as to
Defendant Frena (Doc. No. S-1, filed July 26, 1993), and Plaintiff's Second and Third Motions for Partial Summary
Judgment (Trademark Infringement and Lanham Act Violations) as to Defendant Frena (Doc. No. S-3, filed July 29, 1993).
In its First Motion for Partial Summary Judgment, Plaintiff requests that the Court grant partial summary judgment that
Defendant Frena infringed Plaintiff's copyrights and specifically that the 170 image files in question in Exhibit C to the
Tesnakis Affidavit infringed Plaintiff's copyrights in 50 of Plaintiff's copyrighted magazines. In the Second and Third
Motions for Partial Summary Judgment, Plaintiff requests that the Court grant partial summary judgment that
Defendant Frena infringed Plaintiff's federally registered trademarks PLAYBOY (R) and PLAYMATE (R); specifically that
Defendant Frena infringed United States Trademark registration numbers 600,018 and 721,987 and that Defendant
Frena competed unfairly with Plaintiff, violating 15 U.S.C. Section 1125(a). Furthermore, Plaintiff asks for oral argument
on its Motions. Defendant Frena has filed responses to these Motions. (Doc. Nos. S-5 and S-6, filed August 4, 1993).

Defendant George Frena operates a subscription computer bulletin board service, Techs Warehouse BBS ("BBS"), that
distributed unauthorized copies of Plaintiff Playboy Enterprises, Inc.'s ("PEI") copyrighted photographs. BBS is accessible
via telephone modem to customers. For a fee, or to those who purchase certain products from Defendant Frena, anyone
with an appropriately equipped computer can log onto BBS. Once logged on subscribers may browse through different
BBS directories to look at the pictures and customers may also download[1] the high quality computerized copies of the
photographs and then store the copied image from Frena's computer onto their home computer. Many of the images
found on BBS include adult subject matter. One hundred and seventy of the images that were available on BBS were
copies of photographs taken from PEI's copyrighted materials.

Defendant Frena admits that these materials were displayed on his BBS, see Answer at P 23; Defendant's Admissions,
Response No. 8, that he never obtained authorization or consent from PEI, see Answer at PP 38, 39 and 40, and that
each of the accused computer graphic files on BBS is substantially similar to copyrighted PEI
photographs, see Defendant's Admissions, Response No. 5. Defendant Frena also admits that each of the files in
question has been downloaded[2] by one of his customers. See Defendant's Admissions, Response No. 11.

Subscribers can upload[3] material onto the bulletin board so that any other subscriber, by accessing their computer,
can see that material. Defendant Frena states in his Affidavit filed August 4, 1993, that he never uploaded any of PEI's
photographs onto BBS and that subscribers to BBS uploaded the photographs. <isee< i="">Affidavit of George Frena at P
6 (Doc. No. S-7). Defendant Frena states that as soon as he was served with a summons and made aware of this matter,
he removed the photographs from BBS and has since that time monitored BBS to prevent additional photographs of PEI
from being uploaded.See Affidavit of George Frena at P 6.</isee<>

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). The moving party bears the initial burden of showing the
Court, by reference to materials on file that there are no genuine issues of material fact that should be decided at
trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Clark v. Coats & Clark, Inc., 929 F.2d
604 (11th Cir.1991). A moving party discharges its burden on a motion for summary judgment by "showing" or "pointing
out" to the Court that there is an absence of evidence to support the nonmoving party's case. Celotex, 477 U.S. at 325,
106 S.Ct. at 2554. Rule 56 permits the moving party to discharge its burden with or without supporting affidavits and to
move for summary judgment on the case as a whole or on any claim. Id. When a moving party has discharged its burden,
the nonmoving party must then "go beyond the pleadings," and by its own affidavits, or by "depositions, answers to
interrogatories, and admissions on file," designate specific facts showing that there is a genuine issue for trial. Id. at 324.
In determining whether the moving party has met its burden of establishing that there is no genuine issue as to any
material fact and that it is entitled to judgment as a matter of law, the Court must draw inferences from the evidence in
the light most favorable to the nonmovant, Key West Harbor v. City of Key West, 987 F.2d 723, 726 (11th Cir.1993), and
resolve all reasonable doubts in that party's favor. Spence v. Zimmerman, 873 F.2d 256, 257 (11th Cir.1989). The
nonmovant need not be given the benefit of every inference, but only of every "reasonable" inference. Brown v. City of
Clewiston, 848 F.2d 1534, 1540 n. 12 (11th Cir.1988). The Eleventh Circuit has explained the reasonableness standard: In
deciding whether an inference is reasonable, the Court must "cull the universe of possible inferences from the facts
established by weighing each against the abstract standard of reasonableness." [citation omitted]. The opposing party's
inferences need not be more probable than those inferences in favor of the movant to create a factual dispute, so long
as they reasonably may be drawn from the facts. When more than one inference reasonably can be drawn, it is for the
trier of fact to determine the proper one. WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir.1988).

Thus, if a reasonable fact finder evaluating the evidence could draw more than one inference from the facts, and if that
inference introduces a genuine issue of material fact, then the court should not grant the summary judgment
motion. Augusta Iron and Steel Works v. Employers Insurance of Wausau, 835 F.2d 855, 856 (11th Cir.1988). It must be
emphasized that the mere existence of some alleged factual dispute will not defeat an otherwise properly supported
summary judgement motion. Rather, "the requirement is that there be no genuine issue of material fact." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A dispute about a material fact is
"genuine" if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248, 106
S.Ct. at 2510. The inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S.Ct. at 2511-12.

I. COPYRIGHT INFRINGEMENT

The Copyright Act of 1976 gives copyright owners control over most, if not all, activities of conceivable commercial
value. The statute provides that the owner of a copyright ... has the exclusive rights to do and to authorize any of the
following: (1) to reproduce the copyrighted work in copies ...; (2) to prepare derivative works based upon the
copyrighted work; (3) to distribute copies ... of the copyrighted work to the public ... and (5) in the case of ... pictorial ...
works ... to display the copyrighted work publicly. 17 U.S.C. Section 106. Engaging in or authorizing any of these
categories without the copyright owner's permission violates the exclusive rights of the copyright owner and constitutes
infringement of the copyright. See 17 U.S.C. SEction 501(a).

To establish copyright infringement, PEI must show ownership of the copyright and "copying" by Defendant Frena, see
Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991); Southern Bell Tel. & Tel. v. Assoc. Telephone Directory
Publishers, 756 F.2d 801, 810 (11th Cir.1985).

There is no dispute that PEI owns the copyrights on the photographs in question. PEI owns copyright registrations for
each of the 50 issues of Playboy publications that contain the photographs on BBS. See Tesnakis Affidavit at P 9. The
copyright registration certificate constitutes prima facie evidence in favor of Plaintiff. See Southern Bell Tel., 756 F.2d at
811. Once the plaintiff has established his prima facie ownership, the burden then shifts to the defendant to counter this
evidence. See 3 MELVILLE B. NIMMER, Nimmer on Copyright section 13.01[A], at 13-7 (1993). Defendant Frena,
however, failed to rebut the appropriate inference of validity.

Next, PEI must demonstrate copying by Defendant Frena. Since direct evidence of copying is rarely available in a
copyright infringement action, copying may be inferentially proven by showing that Defendant Frena had access to the
allegedly infringed work, that the allegedly infringing work is substantially similar to the copyrighted work, see Howard v.
Sterchi, 974 F.2d 1272 (11th Cir.1992), and that one of the rights statutorily guaranteed to copyright owners is
implicated by Frena's actions. See Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277, 291 (3d Cir.1991), cert.
denied, --- U.S. ----, 112 S.Ct. 373, 116 L.Ed.2d 324.

Access to the copyrighted work is not at issue. Access is essentially undeniable because every month PEI sells over 3.4
million copies of Playboy magazine throughout the United States. See Kent Affidavit at P 4.
Substantial similarity is also a non-issue in this case. Defendant Frena has admitted that every one of the accused images
is substantially similar to the PEI copyrighted photograph from which the accused image was produced. See Defendant's
Admissions at P 5. Moreover, not only are the accused works substantially similar to the copyrighted work, but the
infringing photographs are essentially exact copies. See Exhibits A and B in the Tesnakis Affidavit. In many cases, the only
difference is that PEI's written text appearing on the same page of the photograph has been removed from the
infringing copy.

The next step is to determine whether Defendant Frena violated one of the rights statutorily guaranteed to copyright
owners under 17 U.S.C. Section 106.See 17 U.S.C. Section 501(a).

Public distribution of a copyrighted work is a right reserved to the copyright owner, and usurpation of that right
constitutes infringement. See Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829, 843 (11th
Cir.1990). PEI's right under 17 U.S.C. Section 106(3) to distribute copies to the public has been implicated by Defendant
Frena. Section 106(3) grants the copyright owner "the exclusive right to sell, give away, rent or lend any material
embodiment of his work." 2 MELVILLE B. NIMMER, Nimmer on Copyright Section 8.11[A], at 8-124.1 (1993). There is no
dispute that Defendant Frena supplied a product containing unauthorized copies of a copyrighted work. It does not
matter that Defendant Frena claims he did not make the copies itself. See JAY DRATLER, JR., Intellectual Property Law:
Commercial, Creative and Industrial Property Section 6.01[3], at 6-15 (1991).

Furthermore, the "display" rights of PEI have been infringed upon by Defendant Frena. See 17 U.S.C. Section 106(5). The
concept of display is broad. See17 U.S.C. Section 101. It covers "the projection of an image on a screen or other surface
by any method, the transmission of an image by electronic or other means, and the showing of an image on a cathode
ray tube, or similar viewing apparatus connected with any sort of information storage and retrieval system." H.R.Rep.
No. 1476, 94th Cong., 2d Sess. 64 (Sept. 3, 1976), reprinted in 1976 U.S.Code Cong. & Admin.News 5659, 5677. The
display right precludes unauthorized transmission of the display from one place to another, for example, by a computer
system. See H.R.Rep. No. 1476, 94th Cong., 2d Sess. 80 (Sept. 3, 1976), reprinted in 1976 U.S.Code Cong. & Admin.News
5659, 5694; JAY DRATLER, JR., Intellectual Property Law: Commercial, Creative and Industrial Property Section 6.01[4], at
6-24 (1991).

"Display" covers any showing of a "copy" of the work, "either directly or by means of a film, slide, television image or
any other device or process." 17 U.S.C. Section 101. However, in order for there to be copyright infringement, the
display must be public. A "public display" is a display "at a place open to the public or ... where a substantial number of
persons outside of a normal circle of family and its social acquaintenances is gathered." 2 MELVILLE B. NIMMER, Nimmer
on Copyright s 8.14[C], at 8-169 (1993). A place is "open to the public" in this sense even if access is limited to paying
customers. 2 MELVILLE B. NIMMER, Nimmer on Copyright s 8.14[C], at 8-169 n. 36 (1993); see Columbia Pictures Indus.,
Inc. v. Redd Horne Inc., 749 F.2d 154 (3d Cir.1984).

Defendant's display of PEI's copyrighted photographs to subscribers was a public display. Though limited to subscribers,
the audience consisted of "a substantial number of persons outside of a normal circle of family and its social
acquaintenances." 2 MELVILLE B. NIMMER, Nimmer on Copyright Section 8.14[C], at 8-169 (1993). See also Thomas v.
Pansy Ellen Products, 672 F.Supp. 237, 240 (W.D.North Carolina 1987) (display at a trade show was public even though
limited to members); Ackee Music, Inc. v. Williams, 650 F.Supp. 653 (D.Kan.1986) (performance of copyrighted songs at
defendant's private club constituted a public performance).

Defendant Frena argues that the affirmative defense of fair use precludes a finding of copyright infringement. "Fair use"
describes "limited and useful forms of copying and distribution that are tolerated as exceptions to copyright
protection." Cable/Home Communications Corp., 902 F.2d at 843 (citing Pacific & Southern Co. v. Duncan, 744 F.2d 1490,
1494 (11th Cir.1984), cert. denied, 471 U.S. 1004, 105 S.Ct. 1867, 85 L.Ed.2d 161 (1985)).

The question of fair use constitutes a mixed issue of law and fact. See Harper & Row, Publishers, Inc. v. Nation
Enterprises., 471 U.S. 539, 560, 105 S.Ct. 2218, 2230, 85 L.Ed.2d 588 (1985). Fair use may be addressed on summary
judgment. See Cable/Home Communications Corp., 902 F.2d at 843-45 (affirming summary judgment holding that fair
use doctrine did not apply).
The Copyright Act mandates four nonexclusive factors which courts shall consider case by case in determining fair
use. Cable/Home Communications Corp., 902 F.2d at 843; see 17 U.S.C. Section 107. Section 107 does not attempt to
define "fair use." It merely lists the factors to be considered in determining whether a use made of a work in a particular
case is fair. Section 107 states:

[T]he fair use of a copyrighted work ... for purposes such as criticism, comment, news reporting, teaching (including
multiple copies for classroom use), scholarship or research, is not an infringement of copyright. In determining whether
the use made of a work in any particular case is a fair use the factors to be considered shall include--
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit
educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the work.
17 U.S.C. Section 107.
With respect to the first factor, "every commercial use of copyrighted material is presumptively an unfair exploitation of
the monopoly privilege that belongs to the owner of the copyright ...," Harper & Row, Publishers, Inc., 471 U.S. at 562,
105 S.Ct. at 2231 (quoting Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 451, 104 S.Ct. 774, 793, 78 L.Ed.2d 574
(1984)), so that "any commercial use tends to cut against a fair use defense."Triangle Publications, Inc. v. Knight-Ridder
Newspapers, Inc., 626 F.2d 1171, 1175 (5th Cir.1980).

Defendant Frena's use was clearly commercial. BBS was provided to those paying twenty-five dollars ($25) per month or
to those who purchased products from Defendant Frena. One who distributes copyrighted material for profit is engaged
in a commercial use even if the customers supplied with such material themselves use it for personal use. See Pacific &
Southern Co. v. Duncan, 572 F.Supp. 1186 (N.D.Ga.1983), affirmed, 744 F.2d 1490 (11th Cir.1984), cert. denied, 471 U.S.
1004, 105 S.Ct. 1867, 85 L.Ed.2d 161 (1985).

Implicit in the presumption that every commercial use is presumptively unfair is "some meaningful likelihood that future
market harm exists."Cable/Home Communications Corp., 902 F.2d at 844 (citing Sony, 464 U.S. at 451, 104 S.Ct. at 793).
It is clear that future market harm exists to PEI due to Frena's activities, as will be discussed in more detail under factor
four.

The second factor is the "nature of the copyrighted work." 17 U.S.C. Section 107. "Copyright protection is narrower, and
the corresponding application of fair use defense greater, in the case of factual works than in the case of works of fiction
or fantasy." 3 MELVILLE B. NIMMER, Nimmer on Copyright Section 13.05[A], at 13-102.57 (1993). If a work is more
appropriately characterized as entertainment, it is less likely that a claim of fair use will be accepted. See In New Era
Publications Intern., ApS v. Carol Publishing Group, 904 F.2d 152 (2d Cir.), cert. denied, 498 U.S. 921, 111 S.Ct. 297, 112
L.Ed.2d 251 (1990). The copyrighted works involved in this case are in the category of fantasy and entertainment.
Therefore, the second factor works against Frena's fair use defense.

Regarding the third factor, the amount and substantiality of the portion of the copyrighted work used, the Supreme
Court has directed a qualitative evaluation of the copying of the copyrighted work. Cable/Home Communications Corp.,
902 F.2d at 844 (citing Harper & Row, 471 U.S. at 564- 65, 105 S.Ct. at 2232-33). That is, "a small degree of taking is
sufficient to transgress fair use if the copying is the essential part of the copyrighted work." Id. See, e.g., Meeropol v.
Nizer, 560 F.2d 1061, 1071 (2d Cir.1977) (although copyrighted letters were less than 1% of the infringing work, they
were displayed prominently), cert. denied, 434 U.S. 1013, 98 S.Ct. 727, 54 L.Ed.2d 756 (1978); Roy Export Co.
Establishment of Vaduz, Liechtenstein, Black, Inc. v. Columbia Broadcasting Sys., Inc., 503 F.Supp. 1137, 1145
(S.D.N.Y.1980) (fifty-five seconds taken from a one-hour and twenty- nine-minute film deemed qualitatively substantial
for copyright infringement), aff'd, 672 F.2d 1095 (2d Cir.), cert. denied, 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63
(1982); Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49, 56 (2d Cir.) ("[N]o plagiarist can excuse the wrong by
showing how much of his work he did not pirate."), cert. denied, 298 U.S. 669, 56 S.Ct. 835, 80 L.Ed. 1392 (1936).
There is no doubt that the photographs in Playboy magazine are an essential part of the copyrighted work. The Court is
not implying that people do not read the articles in PEI's magazine. However, a major factor to PEI's success is the
photographs in its magazine. By pirating the photographs for which PEI has become famous, Defendant Frena has taken
a very important part of PEI's copyrighted publications.

The fourth factor, the "effect of the use upon the potential market for or value of the copyrighted work," 17 U.S.C.
Section 107(4), is "undoubtedly the single most important element of fair use, since a proper application of fair use does
not impair materially the marketability of the copied work."Cable/Home Communications Corp., 902 F.2d at 845. This
factor poses the issue of "whether unrestricted and widespread conduct of the sort engaged in by the defendant
(whether in fact engaged in by the defendant or others) would result in a substantially adverse impact on the potential
market for or value of the plaintiff's present work." 3 MELVILLE B. NIMMER, Nimmer on Copyright section 13.05[A], at
13.102.61-62 (1993). "[P]otential market means either an immediate or delayed market, and includes harm to derivative
works." Cable/ Home Communications Corp., 902 F.2d at 845.

Obviously, if this type of conduct became widespread, it would adversely affect the potential market for the copyrighted
work. Such conduct would deny PEI considerable revenue to which it is entitled for the service it provides.

There is irrefutable evidence of direct copyright infringement in this case. It does not matter that Defendant Frena may
have been unaware of the copyright infringement. Intent to infringe is not needed to find copyright infringement. Intent
or knowledge is not an element of infringement, and thus even an innocent infringer is liable for infringement; rather,
innocence is significant to a trial court when it fixes statutory damages, which is a remedy equitable in nature. See D.C.
Comics Inc. v. Mini Gift Shop, 912 F.2d 29 (2d Cir.1990).

Frena argues that his commercial use was so insignificant as to justify holding for him under the principle of de minimis
non curat lex. The Court disagrees. The detrimental market effects coupled with the commercial-use presumption
negates the fair use defense. Defendant Frena infringed Plaintiff's copyrights; specifically, the 170 image files in question
in Exhibit C to the Tesnakis Affidavit infringed Plaintiff's copyrights in 50 of Plaintiff's copyrighted magazines. The Court
finds that the undisputed facts mandate partial summary judgment that Defendant Frena's unauthorized display and
distribution of PEI's copyrighted material is copyright infringement under 17 U.S.C. Section 501.

II. TRADEMARK INFRINGEMENT UNDER 15 U.S.C. Section 1114

In addition to the use of PEI's copyrighted photographs on BBS, PEI's registered trademarks, PLAYBOY (R) and PLAYMATE
(R), were used to identify many of the files containing the photographs. Furthermore, PEI's text was removed from the
photographs and Defendant Frena's name, Techs Warehouse BBS, and telephone number were placed on PEI's
copyrighted photographs. This is uncontested. Therefore, Plaintiff has moved for partial summary judgment on the
issues of trademark infringement under 15 U.S.C. Section 1114 and unfair competition under 15 U.S.C. Section 1125(a).

Defendant Frena admits that the registered trademarks PLAYBOY (R) and PLAYMATE (R) were used in file descriptors for
170 of the images found on BBS and that such file descriptors were displayed to his customers. See Answer at PP 51 and
52. Defendant Frena contends that when a subscriber uploads the material onto BBS, the same subscriber provides a
description of the uploaded material for the BBS index. Defendant Frena contends that he himself has never placed the
words "Playboy" or "Playmate" onto BBS. Defendant Frena further alleges that he, innocently and without malice,
allowed subscribers to upload whatever they wanted onto BBS.

The first issue the Court must address is whether the marks PLAYBOY (R) and PLAYMATE (R) are distinctive enough to
deserve protection under the Trademark Act of 1946 (commonly known as the Lanham Act), 15 U.S.C. Section 1051 et
seq., specifically Section 32(1) of the Lanham Act, 15 U.S.C. Section 1114(1). See Freedom Sav. and Loan Ass'n v. Way,
757 F.2d 1176 n. 1 (11th Cir.), cert. denied, 474 U.S. 845, 106 S.Ct. 134, 88 L.Ed.2d 110 (1985); Ice Cold Auto Air v. Cold
Air & Accessories, 828 F.Supp. 925, 930 (M.D.Fla.1993).

There are four categories of distinctiveness in which a mark may be classified. "In ascending order they are: (1) generic;
(2) descriptive; (3) suggestive; and (4) arbitrary or fanciful." Investacorp, Inc. v. Arabian Investment Banking Corp., 931
F.2d 1519, 1522-23 (11th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 639, 116 L.Ed.2d 657 (1991). The categorization of
a term as generic, descriptive, suggestive or arbitrary typically resolves the issue of whether a mark is protectable, with
generic marks getting the least protection and arbitrary or fanciful marks receiving the highest degree of protection.

PLAYBOY (R) and PLAYMATE (R) are suggestive marks since they implicitly refer to their products qualities. See PEI v.
P.K.Sorren Export Co. Inc. of Florida, 546 F.Supp. 987, 995 (S.D.Fl.1982). They are well known marks and widely
associated with PEI's products. These marks have acquired great distinctiveness among consumers, and are therefore
entitled to a high degree of protection. See Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 486 F.Supp. 414,
419 (S.D.N.Y.1980).

Once the threshold question of whether the mark is distinctive enough to deserve protection is answered affirmatively,
the Court must turn to the central inquiry of whether there is a "likelihood of confusion." See Freedom Sav. and Loan
Ass'n, 757 F.2d at 1179; Ice Cold Auto Air, 828 F.Supp. at 934.

The following factors are highly relevant in deciding whether there is a likelihood of confusion: "(1) the type of mark at
issue; (2) similarity of marks; (3) similarity of product or services; (4) identity of purchasers and similarity of retail
outlets; .... (6) the defendant's intent; and (7) actual confusion." Ice Cold Auto Air, 828 F.Supp. at 935 (citing Freedom
Sav. and Loan Ass'n, 757 F.2d at 1182-83). The Court, however, is not required to specifically mention each of these
factors in making its decision. See Univ. of Georgia Athletic Ass'n v. Laite, 756 F.2d 1535, 1542 (11th Cir.1985) (analyzing
the factors in the context of a claim of unfair competition).

Rather than simply determining whether a majority of these factors indicate a likelihood of confusion, a court must
"evaluate the weight to be accorded the individual factors and then make its ultimate decision." AmBrit, Inc. v. Kraft,
Inc., 812 F.2d 1531, 1538 (11th Cir.1986), cert. denied, 481 U.S. 1041, 107 S.Ct. 1983, 95 L.Ed.2d 822 (1987). An analysis
of fewer than all seven factors may support a finding of likelihood of confusion. See Univ. of Georgia Athletic Ass'n, 756
F.2d at 1543. In the Eleventh Circuit, the type of mark and evidence of actual confusion are the most important
factors. Dieter v. B & H Industries of Southwest Florida, Inc., 880 F.2d 322, 326 (11th Cir.1989), cert. denied, 498 U.S. 950,
(1990).

In analyzing the type of mark, the Court must determine whether the mark is strong or weak in order to determine the
level of protection to be extended to the mark. See Ice Cold Auto Air, 828 F.Supp. at 935. The more distinctive a
plaintiff's servicemark, the greater the likelihood that consumers will associate the registered trademark and all similar
marks with the registered owner. The law therefore provides the greatest protection to strong and distinctive
servicemarks; the strength of a mark depends on the extent of third party usage and the relationship between the name
and the service or good it describes.Freedom Sav. and Loan Assoc., 757 F.2d at 1182.

In analyzing the relationship between the name and the service or good it describes, the Court again considers the
proper categorization of the mark. At this stage of the analysis, the goal is to determine the degree of distinctiveness of
the mark. See Ambrit, Inc., 812 F.2d at 1539 n. 36. Suggestive and arbitrary marks are considered to be the most
distinctive marks, and, as relatively strong marks, entitled to the strongest protection. See Ice Cold Auto Air, 828 F.Supp.
at 935. The Court previously categorized the marks involved as suggestive marks which are, therefore, entitled to the
strongest protection.

There is no issue as to the similarity of the marks in the instant case. Not only are the marks similar, they are exactly the
same.

The greater the similarity between products and services, the greater the likelihood of confusion. See Exxon Corp. v.
Texas Motor Exchange of Houston, Inc., 628 F.2d 500, 505 (5th Cir.1980). Defendant Frena's product consisted of
computer images of nude women. Of course, this is the core of PEI's business. Even though Defendant Frena's
photographs were available in a different medium than Plaintiff's, the services both parties provided were virtually
identical.
A finding that Defendant adopted a mark with the intent of deriving benefit from the reputation of Plaintiff's service or
product may alone be enough to justify an inference that there is confusing similarity. See Ambrit, Inc., 812 F.2d at 1542.
Defendant contends that he did not intend to use Plaintiff's mark. However, a showing of intent or bad faith is
unnecessary to establish a violation of Section 1141(a). See Chanel, Inc. v. Italian Activewear of Florida, Inc., 931 F.2d
1472, 1476 (11th Cir.1991). Intent is just one of the factors to consider in evaluating whether the infringing use is likely
to cause confusion. See Chanel, Inc., 931 F.2d at 1472, 1476 n. 4 (citing Original Appalachian Artworks, Inc. v. The Toy
Loft, 684 F.2d 821, 831-32 (11th Cir.1982)).

Even though a guilty state of mind is relevant evidence of trademark infringement, an innocent state of mind is
irrelevant on the issue of likelihood of confusion since the lack of intent to deceive does nothing to alleviate the
confusion precipitated by similarity of trademarks. See 3A RUDOLF CALLMAN, The Law of Unfair Competition,
Trademarks and Monopolies section 20.49, at 385 (4th ed. 1993).

"Although evidence of actual confusion is not necessary to a finding of likelihood of confusion, it is nevertheless the best
evidence of likelihood of confusion." John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 978 (11th Cir.1983)
(quoting Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 263 (5th Cir.), cert. denied, 449 U.S. 899, 101 S.Ct. 268, 66
L.Ed.2d 129 (1980)). Actual confusion by a few customers is evidence of likelihood of confusion by many customers. See
Freedom Sav. and Loan Ass'n, 757 F.2d at 1185. Therefore, a plaintiff usually will not have to prove more than a few
incidents of actual confusion. See Id.

In its Motion for Summary Judgment, Plaintiff has not shown any evidence of actual confusion among consumers.
However, it is not necessary to prove actual confusion on the part of customers. It is just that if evidence of actual
confusion is available, it is so highly probative of likelihood of confusion that it can rarely be ignored.

An examination of the factors mentioned above indicates that Defendant Frena's use of PEI's marks is likely to confuse
consumers. Defendant Frena is not merely using marks similar to those of Plaintiff, Defendant Frena is using the exact
marks registered to Plaintiff.

This case involves a suggestive mark entitled to the strongest protection, Defendant Frena used the identical mark of
Plaintiff and the services involved were virtually identical. Each of these elements tends to show a likelihood of
confusion. It is likely that customers of Defendant Frena would believe that PEI was the source of Defendant Frena's
images and that PEI either sponsored, endorsed or approved Defendant Frena's use of PEI's images.

It is well established that "falsely suggesting affiliation with the trademark owner in a manner likely to cause confusion
as to source of sponsorship constitutes infringement." Burger King v. Mason, 710 F.2d 1480, 1492 (11th Cir.1983), cert.
denied, 465 U.S. 1102, 104 S.Ct. 1599, 80 L.Ed.2d 130 (1984). Further, "the law is established that falsely suggesting the
existence of affiliation with a well-known business by usurping the latter's good-will constitutes both trademark
infringement and unfair competition." Showtime/The Movie Channel v. Covered Bridge Condominium Assoc., Inc., 693
F.Supp. 1080, 1089 (S.D.Fla.1988) (quoting Volkswagenwerk Aktiengesellschaft v. Tatum, 344 F.Supp. 235, 237
(S.D.Fla.1972)).

The Court finds that Defendant Frena infringed Plaintiff's federally registered trademarks PLAYBOY (R) and PLAYMATE
(R). More specifically, Defendant Frena infringed United States Trademark registration numbers 600,018 and 721,987.

III. UNFAIR COMPETITION UNDER 15 U.S.C. Section 1125(a)

Section 43(a) of the Lanham Act, 15 U.S.C. Section1125(a), provides:

(a)(1) Any person who, or in connection with any goods or services, or any container for goods, uses in commerce any
word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading
description of fact, or false or misleading representation of fact which--
(A) is likely to cause confusion or to cause mistake, or to deceive as to the affiliation, connection, or association of such
person with another person, or as to the origin, sponsorship, or approval of his or her goods, services or commercial
activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of
his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who
believes that he or she is or is likely to be damages by such act.
15 U.S.C. Section 1125(a).

This statutory provision provides a federal cause of action for unfair competition. There are similarities between the
analysis required for trademark infringement and for unfair competition. However, the unfair competition claim is
broader. See Ice Cold Auto Air, 828 F.Supp. at 938 n. 14 (citing Freedom Sav. and Loan Ass'n v. Way, 757 F.2d 1176, 1186
(11th Cir.1985)), cert. denied, 474 U.S. 845, 106 S.Ct. 134, 88 L.Ed.2d 110 (1985).

15 U.S.C. Section1125(a) is designed to protect against a broader range of deceptive or unfair trade practices than 15
U.S.C. Section 1114. In addition, both sections require the same test to determine whether the particular actions
complained of are violative of their terms. See Showtime/The Movie Channel v. Covered Bridge Condo, 693 F.Supp. 1080,
1090 (S.D.Fla.1988). Thus, as a general rule, the same set of facts which support an action for trademark infringement
also support an action for unfair competition. See Babbit Electronics Inc. v. Dynascan Corp., 828 F.Supp. 944, 957
(S.D.Fla.1993); Marathon Mrg. Co. v. Enerlite Products Corp., 767 F.2d 214, 217 (5th Cir.1985). Therefore, it appears that
Defendant Frena violated 15 U.S.C. Section 1125(a).

Defendant Frena has violated 15 U.S.C. Section 1125(a) by falsely inferring and describing the origin of PEI's
photographs. Defendant Frena makes it appear that PEI authorized Defendant Frena's product. Furthermore, the
removal of PEI's trademarks from the photographs constitutes "reverse passing off." See 3A RUDOLF CALLMAN, The Law
of Unfair Competition, Trademarks and Monopolies section 21.18, at 170 (4th ed. 1993).

PEI's trademarks were obliterated from the photographs, and then Defendant Frena attempted to take credit for
Plaintiff's work by placing its own advertisement with its phone number on some of the photographs. Thus, PEI has been
denied the right to public credit for the success and quality of its goods. Reverse passing off is a violation of Section 43(a)
of the Lanham Act. See Roho, Inc. v. Marquis, 902 F.2d 356 (5th Cir.1990); Debs v. Meliopoulos, 1991 U.S.Dist. LEXIS
19864 (N.D.Ga.1991).

There is no liability for reverse passing off when a defendant modifies a product to such an extent that the defendant
converts it into something different in kind from the original product. Defendant Frena, however, did not convert PEI's
product to such an extent that it could be considered different in kind from PEI's product.

In Roho, the defendant purchased the plaintiff's wheelchair cushions on the open market, removed plaintiff's labels
therefrom, and fastened them together to make bed mattresses. It was held that the two products were commercially
distinct, and that therefore defendant was not simply reselling the product of plaintiff. In the instant case, however,
Defendant Frena is simply reselling the product of PEI stripped of its original identity.

Defendant Frena's actions of deleting Plaintiff's text from the photographs, adding his own text to some of the
photographs and appropriating PEI's photographs without attribution to the copyright owner violated Section 43(a) of
the Lanham Act. Defendant Frena competed unfairly with Plaintiff, violating 15 U.S.C. Section 1125(a).

Accordingly,

(1) Plaintiff's Request for Oral Argument on its Motion for Partial Summary Judgment (Doc. No. S-1) is DENIED,

(2) Plaintiff's Request for Oral Argument on its Second and Third Motions for Partial Summary Judgment (Doc. No. S-3) is
DENIED,

(3) Plaintiff's First Motion for Partial Summary Judgment (Copyright Infringement) as to Defendant Frena (Doc. No. S-1)
is GRANTED,
(4) Plaintiff's Second and Third Motions for Partial Summary Judgment (Trademark Infringement and Lanham Act
Violations) as to Defendant Frena (Doc. No. S-3) are GRANTED and

(5) The remaining issues of the injunction and damages are still remaining for the Court to decide.

DONE AND ORDERED.


PLAYBOY ENTERPRISES VS GEORGE FRENA

Playboy Enterprises, Inc. v. Frena


839 F.Supp. 1552 (M.D. Fla. 1993)

In this case, Playboy charged the defendants, operators of a bulletin board system, with copyright and trademark
infringement, as well as unfair competition. Defendants' bulletin board system is accessible via telephone modem to
subscribers. Subscribers uploaded onto the bulletin board various pictures published by Playboy to which Playboy
owned the applicable copyright. In addition, these subscribers, in the description of the material they provided other
bulletin board users, utilized Playboy's trademarks Playboy and Playmate. Lastly, in some instances, Playboy's trademark
was removed from the photograph, and replaced with the name of the bulletin board service and its telephone number.

On these facts, the court granted plaintiff's motion for partial summary judgment, finding defendants guilty of copyright
and trademark infringement, as well as unfair competition. The court reached such conclusion notwithstanding
defendant Frena's claim both that he did not upload the images onto his bulletin board system (subscribers did) and he
was unaware of the presence of such images on his service until such time as he was served with the summons and
complaint in this action, at which time he caused them to be deleted.

Said the court:

It does not matter that Defendant Frena may have been unaware of the copyright infringement. Intent to infringe is not
needed to find copyright infringement. Intent or knowledge is not an element of infringement, and thus even an
innocent infringer is liable for infringement; rather innocence is significant to a trial court when it fixes statutory
damages, which is a remedy equitable in nature." (citation omitted).

The court also held that the display of Playboy's images by Frena to bulletin board subscribers was a public display, and
that the projection of such images on the bulletin board system was a display for copyright purposes.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-19439 October 31, 1964

MAURO MALANG SANTOS, plaintiff-appellant,


vs.
MCCULLOUGH PRINTING COMPANY, defendant-appellee.

Tañada Teehankee & Carreon for plaintiff-appellant.


Esposo & Usison for defendant-appellee.

PAREDES, J.:

This is an action for damages based on the provisions of Articles 721 and 722 of the Civil Code of the Philippines, allegedly on
the unauthorized use, adoption and appropriation by the defendant company of plaintiff's intellectual creation or artistic
design for a Christmas Card. The design depicts "a Philippine rural Christmas time scene consisting of a woman and a child in a
nipa hut adorned with a star-shaped lantern and a man astride a carabao, beside a tree, underneath which appears the
plaintiff's pen name, Malang."

The complaint alleges that plaintiff Mauro Malang Santos designed for former Ambassador Felino Neri, for his personal
Christmas Card greetings for the year 1959, the artistic motif in question. The following year the defendant McCullough
Printing Company, without the knowledge and authority of plaintiff, displayed the very design in its album of Christmas cards
and offered it for sale, for a price. For such unauthorized act of defendant, plaintiff suffered moral damages to the tune of
P16,000.00, because it has placed plaintiff's professional integrity and ethics under serious question and caused him grave
embarrassment before Ambassador Neri. He further prayed for the additional sum of P3,000.00 by way of attorney's fee.

Defendant in answer to the complaint, after some denials and admissions, moved for a dismissal of the action claiming that —

(1) The design claimed does not contain a clear notice that it belonged to him and that he prohibited its use by others;

(2) The design in question has been published but does not contain a notice of copyright, as in fact it had never been
copyrighted by the plaintiff, for which reason this action is barred by the Copyright Law;

(3) The complaint does not state a cause of action.

The documentary evidence submitted were the Christmas cards, as originally designed by plaintiff, the design as printed for
Ambassador Neri, and the subsequent reprints ordered by other parties. The case was submitted an a "Stipulation of Fact" the
pertinent portions of which are hereunder reproduced:

1. That the plaintiff was the artist who created the design shown in Exhibit A, ...

2. That the design carries the pen name of plaintiff, MALANG, on its face ... and indicated in Exhibit A, ...

3. That said design was created by plaintiff in the latter part of 1959 for the personal use of former Ambassador Felino
Neri; ...

4. That former Ambassador Neri had 800 such cards ... printed by the defendant company in 1959, ... which he
distributed to his friends in December, 1959;
5. That defendant company utilized plaintiff's design in the year 1960 in its album of Christmas card samples displayed
to its customers ... .

6. That the Sampaguita Pictures, Inc., placed an order with defendant company for 700 of said cards ... while Raul
Urra & Co. ordered 200 ..., which cards were sent out by them to their respective correspondent, clients and friends
during the Christmas season of 1960;

7. That defendant company's use of plaintiff's design was without knowledge, authority or consent of plaintiff;

8. That said design has not been copyrighted;

9. That plaintiff is an artist of established name, good-will and reputation. ... .

Upon the basis of the facts stipulated, the lower court rendered judgment on December 1, 1961, the pertinent portions of
which are recited below:

As a general proposition, there can be no dispute that the artist acquires ownership of the product of his art. At the
time of its creation, he has the absolute dominion over it. To help the author protect his rights the copyright law was
enacted.

In intellectual creations, a distinction must be made between two classes of property rights; the fact of authorship
and the right to publish and/or distribute copies of the creation. With regard to the first, i.e. the fact of authorship,
the artist cannot be divested of the same. In other words, he may sell the right to print hundred of his work yet the
purchaser of said right can never be the author of the creation.

It is the second right, i.e., the right to publish, republish, multiply and/or distribute copies of the intellectual creation
which the state, through the enactment of the copyright law, seeks to protect. The author or his assigns or heirs may
have the work copyrighted and once this is legally accomplished any infringement of the copyright will render the
infringer liable to the owner of the copyright.

xxx xxx xxx

The plaintiff in this case did not choose to protect his intellectual creation by a copyright. The fact that the design was
used in the Christmas card of Ambassador Neri who distributed eight hundred copies thereof among his friends
during the Christmas season of 1959, shows that the, same was published.

Unless satisfactorily explained a delay in applying for a copyright, of more than thirty days from the date of its
publication, converts the property to one of public domain.

Since the name of the author appears in each of the alleged infringing copies of the intellectual creation, the
defendant may not be said to have pirated the work nor guilty of plagiarism Consequently, the complaint does not
state a cause of action against the defendant.

xxx xxx ;xxx

WHEREFORE, the Court dismisses the complaint without pronouncement as to costs.

In his appeal to this Court, plaintiff-appellant pointed five (5) errors allegedly committed by the trial court, all of which bring to
the fore, the following propositions: (1) whether plaintiff is entitled to protection, notwithstanding the, fact that he has not
copyrighted his design; (2) whether the publication is limited, so as to prohibit its use by others, or it is general publication,
and (3) whether the provisions of the Civil Code or the Copyright Law should apply in the case. We will undertake a collective
discussion of these propositions.
Under the established facts, We find that plaintiff is not entitled to a protection, the provision of the Civil Code,
notwithstanding. Paragraph 33 of Patent Office Administrative Order No. 3 (as amended dated September 18, 1947) entitled
"Rules of Practice in the Philippines Patent Office relating to the Registration of Copyright Claims" promulgated pursuant to
Republic Act 165, provides, among others, that an intellectual creation should be copyrighted thirty (30) days after its
publication, if made in Manila, or within sixty (60) day's if made elsewhere, failure of which renders such creation public
property. In the case at bar, even as of this moment, there is no copyright for the design in question. We are not also prepared
to accept the contention of appellant that the publication of the design was a limited one, or that there was an understanding
that only Ambassador Neri should, have absolute right to use the same. In the first place, if such were the condition then
Ambassador Neri would be the aggrieved party, and not the appellant. In the second place, if there was such a limited
publication or prohibition, the same was not shown on the face of the design. When the purpose is a limited publication, but
the effect is general publication, irrevocable rights thereupon become vested in the public, in consequence of which
enforcement of the restriction becomes impossible (Nutt vs. National Institute, 31 F [2d] 236). It has been held that the effect
of offering for sale a dress, for example manufactured in accordance with an original design which is not protected by either a
copyright or a patent, is to divest the owner of his common law rights therein by virtue of the publication of a 'copy' and
thereafter anyone is free to copy the design or the dress (Fashion Originators Guild of America v. Federal Trade Commission,
114 F [2d] 80). When Ambassador Neri distributed 800 copies of the design in controversy, the plaintiff lost control of his
design and the necessary implication was that there had been a general publication, there having been no showing of a clear
indication that a limited publication was intended. The author of a literary composition has a light to the first publication
thereof. He has a right to determine whether it shall be published at all, and if published, when, where, by whom, and in what
form. This exclusive right is confined to the first publication. When once published, it is dedicated to the public, and the
author loses the exclusive right to control subsequent publication by others, unless the work is placed under the protection of
the copyright law. (See II Tolentino's Comments on the Civil Code, p. 433, citing Wright v. Eisle 83 N.Y. Supp. 887.)

CONFORMABLY WITH ALL THE FOREGOING, We find that the errors assigned have not been committed by the lower court.
The decision appealed from, therefore, should be, as it is hereby affirmed. Costs taxed against plaintiff-appellant.

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