IP/Entertainment Law Weekly Case Update for Motion Picture Studios and Television Networks -- February 10, 2014: Brownstein v. Lindsay

Brownstein v. Lindsay

USCA Third Circuit, January 29, 2014

In declaratory judgment action seeking joint authorship of work, Third Circuit holds that joint authorship claim under Copyright Act accrues, for statute of limitations purposes, when plaintiff’s authorship has been expressly repudiated, and that courts have no authority to cancel copyright registration.

Peter Brownstein commenced a declaratory action against Tina Lindsay and Ethnic Technologies, seeking a declaration of joint authorship of an ethnic identification system for which he wrote the computer code (the “LCID”).  Defendants counterclaimed, seeking to cancel the copyright registration that Brownstein secured for the system’s computer code.  The district court granted judgment as a matter of law to defendants on the joint authorship claim following trial, finding that the statute of limitations had run on Brownstein’s claim, and granted summary judgment to defendants on their counterclaim.  The Third Circuit reversed both decisions and remanded the case for a new trial.

In December 1993, Lindsay began devising the idea and developing rules for categorizing names by ethnicity.  These rules became known as the Ethnic Determinate System (EDS).  In January 1994, Brownstein was enlisted to turn Lindsay’s rules into computer code.  These programs became known as the ETHN programs.  The combined system of the EDS and the ETHN was named the LCID.  In June 1996, Brownstein and Lindsay incorporated TAP Systems, Inc., to commercialize the LCID, and the LCID became known as the TAP system.  Also in 1996, Lindsay received two copyrights for the EDS.  The second registration included a copy of Brownstein’s ETHN programs as a deposit copy, and several fields on the registration referred to a computer process and codes.  These registrations listed Lindsay as the sole author.  Though Brownstein received copies of these registrations, he claims not to have read them until shortly before trial.  He commenced this action in 2010.

The district court granted judgment as a matter of law in favor of defendants on Brownstein’s joint authorship claim, finding that the statute of limitations under the Copyright Act had run because Brownstein had adequate notice of his authorship claim more than three years prior to filing his complaint.  Under the discovery rule, the district court found that the claim accrued upon Lindsay’s act of registering the copyrights in her name only in 1996, the certificates of which Brownstein received.  The court also ruled that there was no evidence to support Brownstein’s claim of co-authorship, and the claim would still fail on its merits.  The Third Circuit reversed, finding that Brownstein and Lindsay were co-authors.  Defendants had conceded as much, and an LCID license agreement noted that the computer programs and Lindsay’s rules were irrevocably entwined and inseparable.  The appellate court also determined that Lindsay’s copyright registrations covered only her rules, the EDS, because Brownstein alone wrote the code, and Lindsay had no rights to his code other than through the LCID as a joint work.  Even if Lindsay’s registration covered the LCID, that act of registration would not vest exclusive ownership of the LCID in her.  Brownstein would remain a co-author and co-owner because copyright registration does not establish the copyright, which attaches at the moment of creation.  Brownstein’s copyrights and ownership interest in his ETHN programs and in the LCID also would not have been affected by license agreements because Lindsay, a co-owner of the LCID, had the right under the Copyright Act to grant nonexclusive licenses of the work. 

With respect to the statute of limitations, a cause of action accrues when the plaintiff discovers or should have discovered with due diligence that his rights had been violated.  The Third Circuit adopted the Ninth, Seventh, and Second Circuits’ express repudiation rule in this case, holding that a joint authorship claim arises and an author is alerted to the potential violation of his rights when his authorship has been expressly repudiated by his co-author.  The express repudiation rule requires evidence that a co-author has acted adversely to the plaintiff’s status as a co-author – here, that Lindsay do something that communicated not merely that she is the author, but that she is the sole author or that Brownstein is not a co-author.  The court found that Lindsay’s copyright registration alone does not serve as a repudiation of joint authorship because, as a matter of law, co-authors are not expected to investigate the copyright register for competing registrations.  Moreover, Lindsay’s subsequent actions in conveying licenses to the LCID do not necessarily negate Brownstein’s ownership rights because as a co-author, Lindsay has the right to grant nonexclusive licenses of the work, and Brownstein’s rights could coexist with the terms of the subsequent licensing agreements.  Because Lindsay’s registrations alone could not have repudiated Brownstein’s authorship as a matter of law, the issue of whether Lindsay committed other acts of repudiation involved factual determinations that should have been left for a jury and were inappropriately decided under Rule 50(a). 

The Third Circuit also reversed the district court’s grant of summary judgment on defendants’ counterclaim, canceling Brownstein’s copyright registrations.  The appellate court found that courts have no inherent or statutory authority to cancel copyright registrations.  The Copyright Act does not give the courts any general authority to cancel copyright registrations, and Section 701 explicitly states that all administrative functions and duties under this title, except as otherwise specified, are the responsibility of the Register of Copyrights.  Although 17 U.S.C. §1324 grants courts cancellation authority with respect to original designs, the Copyright Act gives no such general authority to cancel copyright registrations.  While a federal court can find that a copyright is invalid, a determination of copyright ownership, courts have no authority to cancel copyright registrations.

 

Topics:  Copyright, Entertainment Industry, Motion Picture Industry, The Copyright Act

Published In: Art, Entertainment & Sports Updates, Civil Procedure Updates, Civil Remedies Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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