Alameda Films S a De C v v. Authors Rights Restoration Corp. , 331 F.3d 472 ( 2003 )

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT May 19, 2003
__________________________ Charles R. Fulbruge III
Clerk
No. 01-20869
__________________________
ALAMEDA FILMS S A DE C V; CIMA FILMS S A DE CV;
CINEMATOGRAFICA FILMEX S A DE C V; CINEMATOGRAFICA
JALISCO S A DE C V; CINEMATOGRAFICA SOL S A DE C V,
Plaintiffs - Counter Defendants - Appellees
- Cross Appellants,
CINEPRODUCCIONES INTERNATIONAL S A DE C V; CINEVISION S A DE
CV; DIANA INTERNACIONAL FILMS S A DE C V; FILMADORA MEXICANA
S A DE C V; GAZCON FILMS S A DE C V; GRUPO GALINDO S A DE C V;
MIER S A DE C V; ORO FILMS S A DE C V; PELICULAS Y VIDEOS
INTERNACIONALES S A DE C V; PROCINEMA S A DE C V;
PRODUCCIONES EGA S A DE C V; PRODUCCIONES GALUBI S A DE C V;
PRODUCCIONES MATOUK S A DE C V; PRODUCCIONES ROSA PRIEGO S A;
PRODUCCIONES TORRENTE S A DE C V; PRODUCCIONES VIRGO S A
DE C V; VIDEO UNIVERSAL S A DE C V; SECINE S A DE C V;
CUMBRE FILMS S A DE C V,
Plaintiffs - Appellees - Cross Appellants,
v.
AUTHORS RIGHTS RESTORATION CORPORATION INC; MEDIA RESOURCES
INTERNATIONAL LLP; TELEVISION INTERNATIONAL SYNDICATORS INC;
H JACKSON SHIRLEY, III;
Defendants - Counter Claimants - Appellants
- Cross Appellees.
___________________________________________________
Appeal from the United States District Court for the
Southern District of Texas
___________________________________________________
Before WIENER, BENAVIDES, and DENNIS, Circuit Judges.
Wiener, Circuit Judge:
Plaintiffs-Appellees-Cross-Appellants Alameda Films, S.A., et
al. (collectively, “the Plaintiffs”) are 24 Mexican film production
companies that sued Defendants-Appellants-Cross-Appellees Authors
Rights Restoration Corp., Inc., Media Resources International,
Television International Syndicators, Inc., and H. Jackson Shirley,
III (collectively, “the Defendants”), claiming copyright violations
in 88 Mexican films that the Defendants distributed in the United
States (“U.S.”). Following a lengthy and vociferously disputed
discovery process and the filing of numerous pre-trial motions,
including eight motions filed by the Defendants for partial summary
judgment, the district court eliminated from consideration seven of
the 88 films in question and conducted a jury trial on the
Plaintiffs’ claims concerning the remaining 81 Mexican films. The
jury returned a verdict for the Plaintiffs on all claims.
On appeal, the Defendants proffer myriad issues, but their
principal complaints implicate the district court’s (1) determining
that production companies, such as the Plaintiffs, can hold
copyrights under Mexican law, (2) permitting the Plaintiffs to
recover damages for both copyright infringement and unfair
competition, and (3) awarding attorney fees and costs to the
Plaintiffs. In addition, the Defendants assert a litany of legal
and factual errors purportedly committed by the district court
during the trial. The Plaintiffs cross-appeal the district court’s
grant of partial summary judgment to the Defendants on the
copyright status of seven of the 88 disputed films. We affirm the
district court on all issues advanced on appeal, except for the
2
quantum of attorneys’ fees and costs awarded to the Plaintiffs,
which we remand to the district court for a more precise
determination, per the Johnson factors,1 of the Plaintiffs’
recoverable fees and costs incurred.
I.
FACTS and PROCEEDINGS
In the mid-1980s, the Defendants began distributing a variety
of Mexican films in the U.S. This activity included 88 films that
had been produced and released by the Plaintiffs in Mexico during
that country’s “golden age” of cinema, between the late-1930s and
the mid-1950s. The Plaintiffs acknowledge that, at the time the
Defendants began distributing these 88 films in the U.S., 69 of
them had lost their copyrights here for failure of the authors to
comply with U.S. copyright formalities, such as registering and
renewing copyrights. According to the Plaintiffs, however, the
legal status of these films changed in 1994 when the U.S. adopted
the Uruguay Round Agreement Act (“URAA”),2 thereby amending the
1976 Copyright Act.3 The URAA eliminated many of the formalities
previously required for copyrighting foreign works in the U.S,
including registration and notice. The URAA also provided,
effective January 1, 1996, for the automatic restoration of
1
See Johnson v. Georgia Highway Express, Inc., 488 F.2d
714, 717-19 (5th Cir. 1974).
2
Pub. L. 103-465, 108 Stat. 4809 (1994).
3
See 17 U.S.C. § 104A (codifying the portion of the URAA
pertaining to copyright).
3
copyrights in various foreign works that had fallen into the public
domain in the U.S. as a result of their foreign authors’ failure to
follow U.S. copyright formalities.4
Following Congress’s 1994 adoption of the URAA, the Defendants
began to obtain assignments of “rights” to the films from some
individual “contributors,” such as screenwriters and music
composers. The Defendants did not, however, contact any of the
Plaintiffs to obtain assignments or licenses to these films. The
Defendants continued to distribute Mexican films in the U.S. after
January 1, 1996, the date on which the U.S. copyrights were
automatically restored in those films that were eligible for
copyright restoration under the URAA.
In June 1998, the Plaintiffs filed suit in the U.S. District
Court for the District of Columbia, alleging that the Defendants
violated the Plaintiffs’ (restored) U.S. copyrights in the 88 films
here at issue. The Plaintiffs also alleged unfair competition by
the Defendants in violation of the Lanham Act, as well as several
common-law claims. The Defendants filed a counter-claim, and, a
few months later, the case was transferred to the Southern District
of Texas.
Following discovery, the Plaintiffs filed a motion for partial
summary judgment that they were the “authors” of the films under
Mexican law and thus held the U.S. copyrights that were restored
4
17 U.S.C. § 104A(a)(1)(A) & (h)(2)(A).
4
under the URAA. Defendants filed two cross-motions for partial
summary judgment, claiming that (1) under Mexican law, only natural
persons, such as the individual contributors, and not artificial or
juridical persons, such as film production companies, could be
“authors”; and (2) seven of the 88 films produced by Plaintiffs
were ineligible for copyright restoration under the URAA because
these seven had fallen into the public domain in Mexico. The
Defendants also filed a motion to dismiss the action and another
for partial summary judgment.
The district court eventually denied all motions except one,
granting the Defendants’ second motion for partial summary judgment
concerning the copyright status of the seven particular films that
had fallen into the public domain in Mexico. In denying the
Plaintiffs’ motion for partial summary judgment, the district court
acknowledged that interpretation of Mexican copyright law under 17
U.S.C. § 104A is a question of law for determination by the court.5
On this question, the district court ruled that film production
companies can hold copyrights —— a derecho de autor (“author’s
right”) —— under the Mexican Civil Code. The district court
reserved for trial, though, the disputed issue whether the
Plaintiffs had in fact obtained Mexican copyrights in the 81
5
See 17 U.S.C. § 104A(2)(b) (noting that a “restored work
vests initially in the author or initial rightholder of the work
as determined by the law of the source country of the work”).
See also FED. R. CIV. P. 44.1 (noting that a “court’s
determination [of foreign law] shall be treated as a ruling on a
question of law”).
5
remaining films.
Following these rulings, the parties engaged in extensive
motion practice. The Defendants filed, inter alia, another five
motions for partial summary judgment, for a total of eight such
motions. The Plaintiffs filed a motion for reconsideration of the
denials of its motion for partial summary judgment and a motion to
stay discovery. The district court denied all motions and set the
case for trial.
In the ensuing jury trial, the district court permitted both
sides to adduce testimony about the requirements of Mexican
copyright law; and the district court instructed the jury that a
film production company can be an “author” under Mexican copyright
law for purposes of the URAA. The jury returned a verdict for the
Plaintiffs, finding that (1) the Plaintiffs own the U.S. copyrights
in the 81 films remaining in dispute, (2) the Defendants violated
the copyrights in all 81 films, (3) the Defendants were guilty of
unfair competition, and (4) the Defendants should pay the
Plaintiffs’ attorneys’ fees and costs. The jury awarded the
Plaintiffs copyright infringement damages of $1,512,000, unfair
competition damages of $486,000, and attorneys’ fees and costs of
$984,000.
The Defendants filed several post-verdict motions, requesting
that the district court (1) make its own findings of fact and
conclusions of law, (2) grant a judgment as a matter of law, (3)
grant a new trial, and (4) render a judgment notwithstanding the
6
verdict. The district court denied all these motions and entered
its Amended Final Judgment, which ordered, in addition to the
damages awarded at trial, declaratory and equitable relief in favor
the Plaintiffs. The Defendants and the Plaintiffs each timely
filed notices of appeal.
II.
ANALYSIS
A. Can film production companies hold copyrights under Mexican
law?
1. Standard of review.
We “review questions regarding foreign law de novo. This
analysis is plenary.”6
2. The “author’s right” under Mexican law.
The URAA provides that a “[c]opyright subsists . . . in
restored works, and vests automatically on the date of
restoration.”7 The copyright in a restored work “vests initially
in the author or initial rightholder of the work as determined by
the law of the source country of the work.”8 The URAA thus
6
Karim v. Finch Shipping Co., 265 F.3d 258, 271 (5th Cir.
2001) (quoting Banco de Credito Indus., S.A. v. Tesoreria Gen.,
990 F.2d 827, 832 (5th Cir. 1993)). See also Itar-Tass Russian
News Agency v. Russian Kurier, Inc., 153 F.3d 82, 92 (2d Cir.
1998) (noting, in reviewing a district court’s application of
Russian copyright law under 17 U.S.C. § 104A, that a
“[d]etermination of a foreign country’s law is an issue of law”).
7
17 U.S.C. § 104A(a)(1)(A).
8
17 U.S.C. § 104A(b) (emphasis added). See also Films by
Jove v. Berov, 154 F. Supp. 2d 432, 448 (E.D.N.Y. 2001) (applying
Russian copyright law to determine an “author” under § 104A(b)).
7
establishes two categories for foreign copyright owners whose U.S.
copyrights can be restored: (1) authors, and (2) initial
rightholders. The class of “initial rightholders” includes only
owners of a copyright in a “sound recording,”9 e.g., music
composers; whereas, the class of “authors” includes all other
creators of works originally copyrighted in foreign jurisdictions.
Accordingly, the Plaintiffs can claim restored copyrights in their
films under the URAA only if the Plaintiffs are considered
“authors” under Mexican copyright law —— the law of the source
country of the work.
The Defendants’ principal contention on appeal is that the
Plaintiffs, as film production companies, cannot be “authors” under
the Mexican Civil Code. The Defendants maintain that the Mexican
Civil Code permits only individuals, i.e., natural persons, to be
“authors”; that the law does not permit corporations or other legal
entities to be “authors” for purposes of claiming copyright
entitlements. In contending that only natural persons can hold
copyrights under Mexican law, the Defendants argue that we should
never reach the restoration analysis under the URAA, because the
Plaintiffs fail this threshold determination of qualification to
hold copyrights under the “law of the source country of the work.”10
In response, the Plaintiffs —— and the Government of Mexico,
9
See 17 U.S.C. § 104A(h)(7).
10
17 U.S.C. § 104A(b).
8
as amicus curiae —— urge that the Defendants’ failure even to
mention the Collaboration Doctrine of the Mexican Civil Code is
telling. They note that in Mexican law, the Collaboration Doctrine
covers various provisions regarding copyrights claimed by
corporations, which necessarily create copyrighted works only
through the collaboration of individuals, viz., their agents and
employees. Thus, Article 1,198 of the 1928 Mexican Civil Code
provides:
The person or corporation that imprints or publishes a work
made by various individuals with the consent of such
individuals will have the property in the entire work, except
each individual will retain the right to publish anew their
own composition, independently, or in a collection.11
Subsequent amendments and re-enactments of Mexico’s copyright laws
in 1947 and 1956 specify that “whoever” creates a work with the
“collaboration” of one or more other authors is entitled to the
“author’s right” (derecho de autor) in the entire work, as long as
the contributors are mentioned in the work and are paid for their
respective contributions.12 Finally, the 1963 amendment of the
Mexican copyright laws provides explicitly that “[p]hysical persons
and legal entities who produce a work with the special and
remunerated collaboration of one or more persons shall enjoy with
11
C.C.D.F. art. 1,197 (1928) (emphasis added). The
relevant translations of the Mexican Civil Code were provided in
the record excerpts.
12
Ley Federal de Derecho de Autor art. 60 (1947); Ley
Federal de Derecho de Autor art. 60 (1956).
9
respect to that work the author’s right therein . . . .”13
The Defendants devote a substantial portion of their briefs to
discussing the role of Collective Bargaining Agreements (“CBA”) in
Mexico. The Defendants appear to believe that the Plaintiffs
maintained before the district court (and continue to maintain on
appeal) that they have copyrights in the films by virtue of having
obtained assignments of the copyrights via the CBAs of the “natural
persons” who worked for the production companies. If the
Defendants harbor such a belief, they are mistaken. The CBAs that
the Plaintiffs submitted into evidence were meant to prove only
that the Plaintiffs’ employees had been paid, thereby satisfying
one of the requirements under the Collaboration Doctrine for the
Plaintiffs, as production companies, to claim copyrights in the
films that they produced.
The Defendants’ insistence that an “author’s right” under
Mexican law vests only in a “natural person” is simply wrong. As
amicus, the Government of Mexico explains that “throughout every
iteration of its intellectual property laws, [Mexico] has
recognized the producer as the rightful owner of the copyright of
any film in its entirety.” Provisions of the Mexican Civil Code
identified by the Plaintiffs clearly support this position.14 Thus,
13
Ley Federal de Derecho de Autor art. 59 (1963) (emphasis
added).
14
See C.C.D.F. art. 1,197 (1928); Ley Federal de Derecho de
Autor art. 60 (1947); Ley Federal de Derecho de Autor art. 60
(1956); Ley Federal de Derecho de Autor art. 59 (1963).
10
the district court correctly determined that the Plaintiffs can be
and are “authors” under Mexican law, and thus can hold Mexican
copyrights (derecho de autor) in the films that they have produced.
B. Are the seven films excluded by the district court eligible
for restoration of their U.S. copyrights under the URAA?
The Defendants’ second motion for partial summary judgment
requested that the district court eliminate consideration of seven
of the Plaintiffs’ original 88 claims for copyright infringement,
contending that the films had fallen into the public domain under
Mexican copyright law, thereby precluding restoration of their U.S.
copyrights under the URAA.15 The district court granted that
motion, ruling that the seven films had fallen into the public
domain in Mexico and thus were ineligible for copyright restoration
in the U.S.
1. Standard of review.
We review a grant of summary judgment de novo, applying the
same standard as the district court.16 A motion for summary
judgment is properly granted only if there is no genuine issue as
to any material fact.17 In reviewing all of the evidence, we must
disregard all evidence favorable to the moving party that the jury
15
The seven films are: Besame Mucho, El Corsario Negro,
Tentacion, Aguile o Sol, Canaima, Humo En Los Ojos, and Pasiones
Tormentosas.
16
Morris v. Covan World Wide Moving, Inc., 144 F.3d 377,
380 (5th Cir. 1998).
17
Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986).
11
is not required to believe, and we should give credence to the
evidence favoring the nonmoving party.18 The nonmoving party,
however, cannot satisfy his summary judgment burden with
conclusional allegations, unsubstantiated assertions, or only a
scintilla of evidence.19
2. Registration requirements of Mexican copyright law.
Following the threshold determination whether one who claims
a restored copyright is an “author” under the source country’s law,
the URAA predicates restoration of the work’s U.S. copyright on its
meeting three requirements: The work (1) is not in the public
domain in the source country, (2) is in the public domain in the
U.S. because of noncompliance with copyright formalities, lack of
subject matter protection, or lack of national eligibility, and (3)
was first published in the source country and was not published in
the U.S. within 30 days after its initial foreign publication.20
The district court determined that the seven films in question were
not eligible for copyright restoration under the URAA because they
had fallen into the public domain in the source country —— Mexico.
These seven films were produced and released between 1938 and
1946, and thus were governed by the copyright provisions of the
18
Reeves v. Sanderson Plumbing Products, Inc., 530 U.S.
133, 151 (2000).
19
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.
1994) (en banc).
20
§ 104A(h)(6) (defining conditions for a “restored work”).
12
1928 Mexican Civil Code. Article 1,189 of that Code states:
The author who publishes a work cannot acquire the rights
granted to him by this title if he does not register the work
within a period of three years. At the conclusion of this
term, the work enters the public domain [if not registered].21
It is undisputed that the Plaintiffs never registered their
copyrights in the seven films here at issue. In 1947, though,
Mexico amended its copyright laws to eliminate the registration
requirement. Article 2 of the 1947 Ley Federal de Derecho de Autor
states that:
[copyright] protection provided under this law to authors is
conferred upon the simple creation of the work, without the
necessity of deposit or registry previously [required] for its
protection....22
Thus, for any works originally published in Mexico after the
effective date of the abolition of that country’s registration
requirement (January 14, 1948), authors received automatic
copyright protection.
The 1947 amendment of the Mexican copyright law also contained
a safe harbor for any previously published works that had fallen
into the public domain under the 1928 Code prior to the new law’s
effective date of January 14, 1948. Authors who had failed to
register their works within three years following their
publication, as required under Article 1,189 of Mexico’s 1928 Code,
thereby allowing such works to fall into the public domain, were
21
C.C.D.F. art. 1,189 (1928).
22
Ley Federal de Derecho de Autor art. 2 (1947).
13
given a six-month period of repose following the aforesaid
effective date of the 1947 revision during which to register their
works and thereby restore their copyrights.23
3. Is the restoration provision of the 1947 amendment
applicable to the seven films at issue?
It is undisputed that four of the seven films that the
district court ruled to have fallen into the public domain were
released by the Plaintiffs less than three years before January 14,
1948, when the 1947 copyright provisions went into effect. On
appeal, the Plaintiffs urge us to reverse the summary judgment
concerning these four films, contending that the 1947 law, not the
1928 Code, is applicable. They direct us to that language of the
1947 copyright law stating that authors of works that (1) had been
previously published under the 1928 Code, and (2) had fallen into
the public domain prior to January 14, 1948, were accorded a six-
month safe harbor during which to register these works and restore
their copyrights. The Plaintiffs also note that any work created
after the 1947 law went into effect received automatic copyright
protection, with no registration requirement. Thus, urge the
Plaintiffs, a temporal hiatus results from the effective dates of
these two provisions of Mexico’s 1947 copyright law for works that
were published after 1945, but never registered: Works in this
category had not yet lost their copyrights under the 1928 Code when
the 1947 law went into effect; yet, the 1947 law did not provide
23
Id.
14
for either an automatic copyright in, or a period of repose for
registration of, works published during this short period.
Based on this analysis of the 1947 copyright law, the
Plaintiffs first contend that the four films that they produced
during this three-year gap between 1945 and 1948 should be granted
copyright protection under the terms of the 1947 copyright law. In
so claiming, however, the Plaintiffs are in essence asking us to
rewrite Article 2 of Mexico’s 1947 copyright law to apply
retroactively its automatic copyright date three years earlier than
is specified in the statute. This we decline to do. As the
district court recognized in its summary judgment order, the
automatic copyright provision expressly applies only to those works
first published on or after January 14, 1948. Each of the
Plaintiffs’ four films were produced and released either in 1945 or
1946, and thus, by the plain words of the statute, do not qualify
for the automatic copyright provision of the 1947 law.
The Plaintiffs alternatively maintain that canons of Mexican
constitutional law support their interpretation of the automatic
copyright provision as having retroactive effect, despite the
statute’s express terms to the contrary. They say that canons of
Mexican constitutional law preclude retroactive application of
statutes only when doing so would work to the detriment of a
person’s legal rights; retroactive application is actually
sanctioned when it works in favor of both personal and property
rights. The Plaintiffs thus conclude that retroactive application
15
of the automatic copyright provision to works created after 1945
would advance Mexico’s strong policy interest in favoring the moral
rights of an author over the public interest.
We are not convinced by the Plaintiffs’ alternative request
that we judicially rewrite the 1947 statute to provide for
automatic copyright protection as early as 1945, rather than the
statute’s express effective date of January 14, 1948. In fact,
there is no reason for us to consider the canons of Mexican
constitutional law in retroactive application of statutes because
there is a completely reasonable explanation for the purported
“gap” in the 1947 copyright law: There was simply no need to
provide a safe harbor for works that remained within the three-year
grace period for registration by or later than January 14, 1948,
because authors of those works still had time remaining in which to
register these works. The safe harbor was needed for works that
had already fallen into the public domain: It was only the authors
of these works who were given an explicit second bite at the apple.
Works produced between January 1945 and January 1948 remained
within the three-year grace period specified under the 1928 Code
during which their authors could register them. Thus, Mexico’s
1947 copyright law implicitly recognized that authors of works
created within this three-year period still had time to register
their works, as required under the terms of the 1928 Code, and thus
were not in need of a grace period or safe harbor.
Simply put, the Plaintiffs should have realized in 1947 that
16
they needed to register their copyrights in these four films before
the 1928 Code’s three-year grace period expired. It should have
been obvious to them that, when the 1947 copyright provisions went
into effect the following January, the new automatic copyright
provisions would not apply to these four films. The Plaintiffs do
not dispute the fact that they never registered the four films in
question; neither is there evidence in the record indicating that
they did so. By the plain terms of the applicable 1928 Code, these
films fell into the public domain in Mexico. Thus, they are
ineligible for U.S. copyright restoration under the URAA.
4. Are the registration requirements of the 1928 Code
applicable to all seven films?
The Plaintiffs propose yet another theory for holding that all
seven disputed films retained their copyright protection and thus
did not fall into the public domain after the 1928 Code’s three-
year grace period expired. They note that the 1928 Code’s
registration requirement applied only to works that were
“published.” The Plaintiffs quibble semantically that films are
never “published”; rather, they are “released.” Thus, argue the
Plaintiffs, the literal terms of the 1928 Code’s registration
provision do not apply to films at all.
The Plaintiffs identify no Mexican canon of constitutional law
or statutory interpretation that should guide our construction of
the 1928 Code’s registration requirement. Neither do they identify
any Mexican court opinion or other authoritative Mexican
17
interpretation of the 1928 Code’s registration requirement of films
vis-à-vis books or other “published” works. When there are gaps in
foreign law, though, a U.S. court may use forum law to fill them.24
In this regard, U.S. courts have broadly interpreted the U.S.
copyright statutes to cover new types of works that clearly fall
within the ambit of their protection, even though these new kinds
of works are not covered literally by the terminology employed in
the statutes at the time of their enactment.25 Furthermore, it
would be anomalous for us to exempt films from the duties imposed
on authors by the 1928 Code while affording these same films the
benefits provided to authors by the very same code. Accordingly,
we are satisfied that the term “publishes,” as broadly used in the
1928 Code, was intended to encompass all appropriate forms of
distributing copyrighted works to the public. As, in the mid-
1940s, films could be distributed to the public only by being
“released” to theaters, it would be nonsensical to construe the
24
See Cantieri Navali Rieunitu v. M/V Skyptron, 802 F.2d
160, 163 n.5 (5th Cir. 1986).
25
See, e.g., Sony Corp. v. Universal City Studios, Inc.,
464 U.S. 417 (1984) (applying the 1976 Copyright Act to issues
raised by VCRs, which were invented and distributed after the Act
was enacted and are not mentioned in literal terms in the
statute); Twentieth Century Music Corp. v. Aiken, 422 U.S. 151,
156 (1975) (recognizing that the Copyright Act must be construed
in light of its basic purpose “[w]hen technological change has
rendered its literal terms ambiguous”). See also Micro Star,
Inc. v. FormGen, Inc., 154 F.3d 1107 (9th Cir. 1998) (applying
the 1976 Copyright Act’s provisions regarding “derivative works”
to an innovative 1990s video game, Duke Nukem 3D, although this
term originally applied to novels, films and other literary-based
subject matter).
18
1928 Code’s registration requirement as not applicable to the very
films that benefit from the copyright protections afforded by the
other provisions of that Code. We hold that the 1928 Code’s
registration requirements are applicable to films, necessarily
including the seven disputed here.
C. Do damage awards for both copyright infringement and unfair
competition constitute a “double recovery”?
1. Standard of review.
The Defendants’ effort to obtain a remittitur order from the
district court is grounded in their contention that the Plaintiffs
received a double recovery. We review a denial of remittitur for
abuse of discretion,26 and will only order a remittitur if we are
“left with the perception that the verdict is clearly excessive.”27
2. Does recovery for both copyright infringement and a
Lanham Act violation constitute a clearly excessive
verdict?
Following the jury verdict, the Defendants filed a motion for
remittitur in the district court, insisting that the jury’s award
of damages for both copyright infringement and unfair competition
constituted a “double recovery.” The Defendants insist that the
1976 Copyright Act “preempts” claims for unfair competition. The
district court denied this motion; yet, on appeal, the Defendants
re-urge the same contention. Given this preemption of unfair
26
Thomas v. Texas Dep’t of Criminal Justice, 297 F.3d 361,
368 (5th Cir. 2002).
27
Eiland v. Westinghouse Elec. Corp., 58 F.3d 176, 183 (5th
Cir. 1995).
19
competition claims, they maintain, a plaintiff cannot assert and
recover on both. Accordingly, argue the Defendants, the district
court should not have permitted the jury to award compensatory
damages on both claims in this case: The damages are duplicative
and thus excessive, requiring remittitur.
In response, the Plaintiffs rightly point out that the
Defendants confuse allegations of unfair competition under the
Lanham Act with such allegations under state tort law. This
confusion is revealed in the Defendants’ reliance on those of our
cases in which we have held that the 1976 Copyright Act preempts
state common-law claims for conversion, misappropriation,
plagiarism, disparagement and defamation.28 In this case, though,
the Plaintiffs lodged a federal claim for unfair competition under
the Lanham Act.29
The federal Copyright Act does not preempt the federal Lanham
Act, or vice-versa. In fact, it is common practice for copyright
owners to sue for both infringement under the 1976 Copyright Act
and unfair competition under the Lanham Act. Such a litigation
posture has never been disallowed by the courts on grounds of
either preemption or impermissible double recovery.30 We discern
28
See Daboub v. Gibbons, 42 F.3d 285 (5th Cir. 1995).
29
15 U.S.C. § 1125(a).
30
See, e.g., Veeck v. Southern Bldg. Code Cong. Int’l,
Inc., 293 F.3d 791, 794 (5th Cir. 2002) (en banc) (noting that
“SBCCI counterclaimed for copyright infringement, unfair
competition and breach of contract”); Lyons Partnership v.
20
no basis in law or fact that supports the Defendants’ contention
that the district court abused its discretion in denying their
request for remittitur.
D. Trial errors asserted by the Defendants.
The Defendants on appeal allege a litany of trial errors; yet,
they offer no logically structured arguments in support of these
assertions. The Federal Rules of Appellate Procedure require that
an appellant’s brief set out in its argument section the
“appellant’s contentions and the reasons for them, with citations
to the authorities and parts of the record on which the appellant
relies.”31 “The purpose of the requirements in respect of briefs
is to conserve the time and energy of the court and clearly to
advise the opposite party of the points he is obliged to meet.”32
Beyond rote recitations of the standards of review and erroneous
citations to case law,33 the Defendants do not provide us with any
Giannoulas, 179 F.3d 384, 387 (5th Cir. 1999) (noting that the
plaintiff sued for “unfair competition, and trademark dilution
under the Lanham Act, copyright infringement, and other claims”).
31
FED. R. APP. P. 28(a)(9)(A) (rev. ed. 2002).
32
United States v. Abroms, 947 F.2d 1241, 1250-51 (5th Cir.
1991) (quoting Thys Co. v. Anglo Cal. Nat’l Bank, 219 F.2d 131,
133 (9th Cir. 1955)).
33
For example, in claiming that the trial errors were
cumulatively “unfair,” the Defendants assert in their appellate
brief that the “Constitution . . . does not authorize the
issuance of patents (i.e. copyrights) for works in the public
domain,” and they cite a famous case in patent law. See Graham
v. John Deere Co., 383 U.S. 1 (1966). Patents, however, are not
copyrights, and thus patent cases are inapposite to copyright
cases.
21
basis —— either in their argument or by reference to the voluminous
record —— for determining that the district court committed the
proffered errors. Thus, “[i]n the absence of logical argumentation
or citation to authority, we decline to reach the merits of these
claims.”34
E. Attorneys’ fees and costs.
1. Standard of review.
We review an award of attorneys’ fees for abuse of
discretion.35 “Although attorney’s fees are awarded in the trial
court’s discretion, [in copyright cases] they are the rule rather
34
Meadowbriar Home for Children, Inc. v. Gunn, 81 F.3d 521,
532 (5th Cir. 1996) (finding appellant failed the requirements of
Fed. R. App. P. 28 because the “argument section fails to even
mention §§ 1981, 1982, and 1985, let alone offer grounds for
appeal, citations to authorities, statutes, and arguments in
support”). See also Randall v. Chevron USA, Inc., 13 F.3d 888,
911 (5th Cir. 1994), rev’d on other grounds, Bienvenu v. Texaco,
Inc., 164 F.3d 901 (5th Cir. 1999) (finding violation of Fed. R.
App. P. 28 and refusing to review appeal of attorneys’ fees award
given failure of appellant to cite relevant authority or specific
errors made by district court in its “bald assertion” that the
district court erred); Frazier v. Garrison I.S.D., 980 F.2d 1514,
1527 (5th Cir. 1993) (finding failure of appellate briefing
requirements because appellant’s “argument is nothing more than a
bold, naked assertion that the district court erred”); United
States v. Martinez-Mercado, 888 F.2d 1484, 1492 (5th Cir. 1989)
(noting that “it is not the function of the Court of Appeals to
comb the record for possible error, but rather it is counsel’s
responsibility to point out distinctly and specifically the
precise matters complained of, with appropriate citations to the
pages in the record where the matters appear”); Kemlon Prods. and
Dev. Co. v. United States, 646 F.2d 223, 224 (5th Cir. 1981)
(refusing to reach the merits of a party’s claims when that
party’s brief addressed neither the merits of its own claims nor
the reasoning of the district court).
35
Hogan Systems, Inc. v. Cybresource Int’l, Inc., 158 F.3d
319, 325 (5th Cir. 1998).
22
than the exception and should be awarded routinely.”36
2. Does evidence support the quantum of attorneys’ fees and
costs awarded to the Plaintiffs?
Under 17 U.S.C. § 505 and 15 U.S.C. § 1117, a court may allow
a prevailing party in a copyright infringement and unfair
competition lawsuit to recover reasonable costs and attorneys’
fees.37 In this case, the court allowed the jury to award
attorneys’ fees and costs to the Plaintiffs; and it did so in the
amount of $984,000. The sole basis for the quantum of this award
was the testimony of Steven Reilley, who had reviewed the files of
the three law firms that represented the Plaintiffs in this action.
Reilley testified that the law firms’ files showed that the
Plaintiffs incurred a total of approximately $900,000 in attorneys’
fees and costs. Based only on this testimony, the jury awarded the
Plaintiffs attorneys’ fees and costs of $84,000 more than that
amount.
On appeal, the Defendants urge that such an award by the jury
is excessive and unreasonable. They point out that the Plaintiffs
submitted no time records of their attorneys or documentation
reflecting the rates charged or the billable hours spent in
36
McGaughey v. Twentieth Century Fox Film Corp., 12 F.3d
62, 65 (5th Cir. 1994) (quoting Micromanipulator Co. v. Bough,
779 F.2d 255, 259 (5th Cir. 1985)).
37
17 U.S.C. § 505 (permitting a prevailing party in a suit
under the Copyright Act to recover “full costs” and “reasonable
attorney’s fees”); 15 U.S.C. § 1117 (permitting a plaintiff in a
suit under the Lanham Act to recover for “the costs of the
action”).
23
preparing for and litigating this case. The Plaintiffs respond
that the award is appropriate, because Reilley’s testimony was a
sufficient basis for the jury to determine the proper amount of
attorneys’ fees. The Plaintiffs urge, in the alternative, that if
we adjust the fee award, we not reduce it below $900,000, as that
is the uncontested amount of fees and costs attested to by their
witness.
The Plaintiffs claim to have incurred attorneys’ fees and
costs of $984,000, which is almost exactly one-half the total
amount of compensatory damages awarded by the jury for copyright
infringement and unfair competition.38 In Lanham Act and copyright
cases that are certain to involve large amounts of attorneys’ fees
and costs, considerably more evidence should be required from the
prevailing party than the undocumented testimony of a single
witness as to an admittedly approximate lump-sum value of the time
spent by counsel working on a case. Without substantial, detailed
record evidence, both testimony and documents, we cannot properly
review the amount of the jury’s award. The instant record is
completely devoid of even the basic information needed to determine
the propriety of the jury’s award of fees and costs.39 Even more
38
The jury awarded a total of $1,998,000 in damages ——
$1,512,000 for copyright infringement and $486,000 for unfair
competition —— compared to attorneys’ fees of $984,000.
39
The Plaintiffs cite to a Fifth Circuit case in which they
contend that the district court summarily ordered attorneys’
fees, which we allegedly affirmed. See Hogan Systems, Inc. v.
Cybresource Int’l, Inc., 158 F.3d 319, 325-26 (5th Cir. 1998). A
24
problematical here is an award that exceeds by $84,000 the amount
actually attested to by the Plaintiffs’ lone witness. Without
more, the award appears plainly arbitrary. After all, the function
of fee-shifting statutes is to provide for actual reimbursement,
not additional compensation. Under the circumstances, we have no
choice but to vacate this part of the judgment and remand for
redetermination.
On remand, the district court should require the Plaintiffs to
provide documentation of the “full costs” and the “reasonable fees”
that 17 U.S.C. § 505 and 15 U.S.C. § 1117 permit them to recover in
their successful lawsuit under the 1976 Copyright Act and the
Lanham Act. In fulfilling its mandate under these fee-shifting
statutes, the district court should, among other considerations,
apply the Johnson factors,40 paying special attention to the four
central factors: (1) the time and labor required, (2) the customary
rate, (3) the amount involved and the results obtained, and (4) the
experience, reputation and ability of the attorneys.41
III.
CONCLUSION
closer reading of the opinion, however, reveals that we discuss
and approve of the district court’s “use of the Johnson factors”
in this case. Id. at 325.
40
See Johnson, 488 F.2d at 717-19 (setting out 12 factors
for assessing the reasonableness of an award of attorneys’ fees
and costs).
41
Copper Liquor, Inc. v. Adolph Coors Co., 624 F.2d 575,
583 (5th Cir. 1980).
25
The district court conducted this complex case commendably,
particularly given the difficulties inherent in interpreting and
applying foreign law and the extensive motion practice of these
vigorous litigants. We affirm all rulings of that court, with the
exception of the quantum of attorneys’ fees and costs awarded on
the basis of the jury’s findings. Thus, we vacate and remand only
the portion of the district court’s final judgment that awards
attorneys’ fees and costs to the Plaintiffs, and then only as to
the quantum. Although awarding fees and costs vel non is clearly
appropriate here under 17 U.S.C. § 505 and 15 U.S.C. § 1117, on
remand, the district court should conduct a hearing —— paper or
live —— and apply the Johnson factors to determine a reasonable sum
to award the Plaintiffs for attorneys’ fees and costs.
AFFIRMED in part; VACATED in part; REMANDED with instructions.
S:\OPINIONS\PUB\01\01-20869.CV0
4/28/04 8:56 am
26