WILLIAM D. QUARLES, JR., District Judge.
Rosebud Entertainment, LLC ("Rosebud") sued Professional Laminating LLC ("Professional Laminating"),
Rosebud
Professional Laminating
This case arises out of Professional Laminating's use — in advertisements (the "Advertisements") and products — of the covers to Baltimore magazine's November 2010 and 2011 issues (the "Works"). ECF No. 25 ¶ 1; see Defs.' Answer to Am. Compl. ¶¶ 22, 31. The Works' covers, featuring "Top Doctors," depicted University of Maryland Hospital for Children Pediatric Oncologist Teresa York and Northwest Hospital's Chief of Minimally Invasive Surgery W. Peter Geis, respectively. ECF No. 25, Exs. E, F. Images of the covers are prominently featured in the Advertisements, next to other images designed by Professional Laminating. See ECF No. 25, Exs. B, C.
The Advertisements were mailed to each of the doctors listed in the relevant issue one month after the issue was published. See Prof'l Laminating Answer to Interrog. No. 5. About 20 plaques and three crystal display pieces were manufactured and sold "using"
On February 10, 2012, Rosebud filed suit against the Defendants for copyright infringement and other claims. ECF No. 1. On March 29, 2012, the Defendants answered the complaint. ECF No. 9. On March 30, 2012, the Court entered a scheduling order. ECF No. 11. On July 31, 2012, the case was referred to U.S. Magistrate Judge Stephanie A. Gallagher for discovery. ECF No. 14. On September 26, 2012, the case was referred to U.S. Magistrate Judge Susan K. Gauvey for a settlement conference. ECF No. 19.
On October 24, 2012, Rosebud moved for summary judgment as to liability on its copyright infringement claims (in Counts One and Four), with damages to be determined at trial. ECF No. 25 ¶¶ 3-4.
Under Rule 56(a), summary judgment "shall [be] grant[ed] ... if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a).
The Court must "view the evidence in the light most favorable to ... the nonmovant, and draw all reasonable inferences in [his] favor," Dennis v. Columbia Colleton Med. Ctr., Inc., 290 F.3d 639, 645 (4th Cir.2002), but the Court must abide by the "affirmative obligation of the trial judge to prevent factually unsupported claims and
Rosebud argues that it is entitled to summary judgment as to liability for copyright infringement, because it owned a valid copyright upon which the Defendants directly (Professional Laminating) and vicariously (the Oertels) infringed. ECF No. 25-1 at 5. The Defendants concede that "there might have been some small minor technical violation of copyright law," but argue that, "to the extent that there may be a technical copyright infringement," it is "a minor part of what Defendant sells." ECF No. 29 at 3-4. The Defendants note that they "never intended to violate or infringe on Plaintiff's copyright." Id. at 4.
The Copyright Act of 1976, 17 U.S.C. § 101, et seq., protects "original works of authorship fixed in any tangible medium of expression." 17 U.S.C. § 102. A copyright holder has exclusive rights to use — and authorize the use of — his work in five ways: (1) to reproduce the work; (2) to prepare "derivative"
Rosebud asserts that "undisputed facts" establish it owns valid copyrights in the Works, and the Defendants directly infringed its exclusive rights to reproduce copies, prepare derivative works, and distribute copies by producing the Advertisements and manufacturing the plaques and crystal displays. ECF No. 25-1 at 5-9.
Copyright owners' exclusive rights are subject to statutory exceptions, including § 107's exception for "fair use." Bond v. Blum, 317 F.3d 385, 393 (4th Cir.2003). "Fair use is a complete defense to infringement." Bouchat v. Bait. Ravens Ltd. P'ship, 619 F.3d 301, 307 (4th Cir.2010). In other words, "the fair use of a copyrighted work ... is not an infringement of copyright." 17 U.S.C. § 107. Congress "meant § 107 to restate the present judicial doctrine of fair use ... and intended that the courts continue the common-law tradition of fair use adjudication." Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) (internal quotation marks omitted). Accordingly, the doctrine constitutes "an equitable rule of reason, for which no generally applicable definition is possible." Sundeman v. Seajay Society, Inc., 142 F.3d 194, 202 (4th Cir.1998) (internal quotation marks omitted).
Section 107's factors "guide the determination" of whether a particular use is "fair." Bond, 317 F.3d at 394. The factors are:
17 U.S.C. § 107. The factors are not to "be treated in isolation," but "[a]ll are to be explored, and the results weighed together, in light of the purposes of copyright." Campbell, 510 U.S. at 578, 114 S.Ct. 1164.
In applying the first factor, courts consider "whether and to what extent the new work is `transformative'": i.e., "whether the new work merely supersedes the objects of the original creation" or "instead adds something new, with a further purpose or different character." Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (internal quotation marks omitted). Although transformative use is not "absolutely necessary" for a finding of fair use, the goal of copyright — to promote science and the arts — is "generally furthered by the creation of transformative works." Id.
Here, Professional Laminating's use of the Works is only minimally transformative: as the Defendants admit, they created the products by laminating magazine covers onto pieces of wood and, with respect to the crystals, by shrinking and inserting copies of the covers into the material. Prof'l Laminating Answer to Interrog. No. 8. Indeed, the Defendants concede that the "nature" of their products is "to showcase the original copyrighted material." ECF No. 29 at 14; see id. (describing the plaques as "another
In considering the second factor, courts are "most receptive to unauthorized use of educational, scientific, and historical works." Triangle, 626 F.2d at 1176. Further, the law "generally recognizes a greater need to disseminate factual works than works of fiction or fantasy .... [and][t]he scope of fair use is also narrower with respect to unpublished works." Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 563-64, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985). "Creative works and unpublished works are closer to the core of works protected by the Copyright Act." Sundeman, 142 F.3d at 204.
Baltimore magazine features news stories about prominent people, arts, culture, and sports in the city. About Us, Baltimore, http://www.baltimoremagazine.net/contact/about (last visited July 19, 2013). The November 2010 and 2011 issues of Baltimore magazine were not only published, but also possess significant educational and factual attributes. At most, the Works are a combination of factual and creative. These considerations weigh in favor of finding fair use.
The third factor considers the amount and substantiality of the portion used by the alleged infringer in relation to the copyrighted work as a whole. 17 U.S.C. § 107(3). "To state it simply, the more the defendant takes of the plaintiff's work, the less likely it is that the taking will qualify as fair use." Bouchat v. NFL Props. LLC, 910 F.Supp.2d 798, 805 (D.Md.2012). Here, the Defendants used the Works' covers and copies of the covers. See ECF No. 25, Exs. B, C. This use of the Works is probably insubstantial compared to the copyrighted Works as a whole, each of which contained roughly 275 pages. See Rosebud's Answer to Interrog. No. 2.
The fourth factor — addressing the "effect of the use upon the potential market for or value of the copyrighted work," 17 U.S.C. § 107(4) — is "undoubtedly the single most important element of fair use." Sundeman, 142 F.3d at 206. Three subsidiary considerations bear noting. First, "[a] use that does not `materially impair' marketability of the copyrighted work generally will be deemed fair." Id. Another "key" consideration is whether the allegedly infringing work is a "market substitute" for the copyrighted work. Id. at 207.
As previously stated, the Defendants' Advertisements and products did not contain entire issues of Baltimore magazine, but rather depicted two issues' cover pages. The Court cannot conclude, on these facts, that this use materially impaired marketability of the Works, acted as a substitute for them in the market, or significantly affected the market for derivative works.
Analysis of the four statutory factors reflects — at the very least — a genuine dispute of material fact about whether the Defendants' use of the Works was "fair" and thus noninfringing. Summary judgment will be denied on this ground.
The first sale doctrine, like fair use, is an exception to copyright owners' exclusive rights. The doctrine is set forth in 17 U.S.C. § 109(a), which provides, in relevant part:
Otherwise stated, "once a copy of [a copyrighted work] has been lawfully sold (or its ownership otherwise lawfully transferred), the buyer of that copy and subsequent owners are free to dispose of it as they wish. In copyright jargon, the `first sale' has `exhausted' the copyright owner's § 106(3) exclusive distribution right." Kirtsaeng v. John Wiley & Sons, Inc., ___ U.S. ___, 133 S.Ct. 1351, 1355, 185 L.Ed.2d 392 (2013) (emphasis in original). Thus, a library may lend an authorized copy of a book that it lawfully owns without violating copyright laws. Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199, 203 (4th Cir. 1997). "[B]y its terms, § 109(a) has no application to the other four rights of a copyright owner, [such as] the right to perform the work publicly." Red Baron-Franklin Park, Inc. v. Taito Corp., 883 F.2d 275, 280 (4th Cir.1989).
The Fourth Circuit does not appear to have decided whether a commemorative plaque is, as a matter of law, a "first sale" under § 109(a) or a derivative work protected by § 106(2). Other courts are divided on the issue. Compare Allison v. Vintage Sports Plaques, 136 F.3d 1443, 1444, 1451 (11th Cir.1998) (first sale doctrine permitted defendant to purchase trading cards and, without altering the cards "in any way," frame them by mounting individual cards between a transparent acrylic sheet and wooden board), and Lee v. Deck the Walls, Inc., 925 F.Supp. 576, 577, 583 (N.D.Ill.1996) (first sale doctrine permitted defendant to purchase notecards and, after trimming the card images, to adhere the cards to a ceramic tile and cover the image with a clear epoxy resin), aff'd sub nom. Lee v. A.R.T. Co., 125 F.3d 580 (7th Cir.1997), with Greenwich Workshop Inc. v. Timber Creations, Inc., 932 F.Supp. 1210, 1215 (C.D.Cal.1996) (defendants' practice of removing from plaintiff's copyrighted book reduced-scale versions of plaintiff's copyrighted artwork, which were intended solely for inclusion in the book, infringed plaintiff's copyrights).
Here, unlike in Allison and Lee, the Defendants have done more than add surrounding materials to Rosebud's Works; instead, they significantly altered the Works by physically separating the magazine covers from the magazines and cutting the cover pages to fit the wooden boards. See Prof'l Laminating Answer to Interrog. Nos. 8, 9. Because of these alterations to the original Works, the first sale doctrine does not apply to any of the Defendants' products — including those that contained original pages.
For the reasons stated above, Rosebud's motion for partial summary judgment will be denied.
For the reasons discussed in the accompanying Memorandum Opinion, it is, this 24th day of July, 2013, ORDERED that:
1. The Plaintiff's motion for partial summary judgment (ECF No. 25) BE, and HEREBY IS, DENIED;
2. The Defendants are PRECLUDED from raising the first sale doctrine as a defense at trial; and
3. The Clerk of the Court shall send copies of this Memorandum Opinion and Order to counsel for the parties.
ECF No. 22 ¶¶ 35-55.
The Defendants erroneously rely on Triangle Publications, Inc. v. Knight-Ridder Newspapers, Inc., 626 F.2d 1171 (5th Cir.1980), to insist that the first factor weighs in favor of fair use. See ECF No. 29 at 9. In Triangle, the court considered a television commercial in which the Miami Herald displayed a cover of the copyrighted magazine, TV Guide, for purposes of comparing it to its own analogous publication. 626 F.2d at 1172-73. The Fifth Circuit observed that the cover of TV Guide was clearly copyrighted, and the Herald had reproduced it for a commercial purpose: to sell its own product. Id. at 1173-74. However, the court found that the reproduction was a fair use. See id. at 1178. With respect to the first factor, the court noted the public benefit of "comparative advertising" as a means of providing more information to the public, and concluded that this factor weighed in the defendant's favor. See id. at 1175-76. Here, the Defendants did not use the covers for comparative advertising; instead, they incorporated them into decorative objects which infringed Rosebud's copyright. Thus, Triangle's analysis does not apply here.
