Educational Testing Services v. Katzman

793 F.2d 533, 55 U.S.L.W. 2037
CourtCourt of Appeals for the Third Circuit
DecidedJune 20, 1986
DocketNo. 85-5613
StatusPublished
Cited by41 cases

This text of 793 F.2d 533 (Educational Testing Services v. Katzman) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Educational Testing Services v. Katzman, 793 F.2d 533, 55 U.S.L.W. 2037 (3d Cir. 1986).

Opinion

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Educational Testing Service (ETS), a nonprofit educational organization that prepares and administers numerous standardized tests, sought and was granted a preliminary injunction that enjoined defendants Princeton Review and John Katzman, its sole shareholder and president (collectively referred to as Review unless otherwise noted), from a wide range of activities involving ETS' tests and information therefrom.1 626 F.Supp. 527 (D.N.J.1985). Defendants appeal, challenging ETS’ copyright claims to the material at issue and the propriety and scope of the injunction.

I.

INTRODUCTORY FACTS

ETS develops and administers testing programs, among them the Scholastic Apti[536]*536tude Test (SAT) and Achievement Tests in specific subjects, which are both multiple-choice tests given to high school students for college admission purposes. ETS regards the tests as secret until they have been released by it and attempts to maintain strict secrecy with respect to these tests. It registers them for copyright under “secure test” registration. It makes the tests that it has “retired” available to the public.

Review is a company which charges a fee for preparing students to take the SAT and Achievement Tests offered by ETS. Katz-man ran Review as a sole proprietorship from 1981 until 1984, when it was incorporated in New York.

The present dispute has its genesis in events occurring a number of years ago. In 1982, ETS learned that Review had given to its enrollees copies of a “Math Level I” and of an “English Composition” Achievement test that ETS subsequently administered on November 6, 1982. Although this test was stolen from ETS, ETS does not allege that Katzman or his agents were responsible for the theft. ETS can-celled the scores of those Review students who had been given access to the stolen test.

Following these events, ETS, Katzman, and an associate not involved in this litigation entered into a written agreement in 1983 under which Katzman and his associate promised to return all copies of the purloined tests, to refrain from copying or distributing any ETS copyrighted or copyrightable materials or registering for or attending any test administered by ETS unless it was for bona fide purposes, and to notify ETS if any unlawfully obtained ETS tests came into their possession and provide ETS with information as to their source.

In its complaint in this action, ETS claims that in May 1985 (1) Katzman distributed to Review enrollees a “facsimile” “Math Level I” practice test which was “copied or paraphrased” from the same stolen test book that Review had given its students prior to the November 1982 test, and that Katzman had promised to return, which forced ETS to provide another examination for a June 1985 exam and to retire the exam in question from use; (2) Review landed out a “facsimile” English Composition Achievement Test that contained 53 questions “obviously ... adapted directly” from the test booklet Katzman supposedly hackreturned earlier, forcing ETS to make a last minute substitution for an English Composition Test scheduled to be administered on June 2,1985; and (3) Katzman and Review distributed “facsimile” SATs that contained “verbatim or nearly verbatim” SAT questions, forcing ETS to retire numerous SAT questions. ETS suggests that Review obtained these questions by having its employees register and take the SAT in violation of the 1983 agreement. ETS contends in its brief that defendants’ actions have compelled it to retire from use in “secure” testing at least 289 questions, consisting of 51 Math Achievement questions, 90 English Composition Achievement Test questions, and 148 SAT questions.

ETS contends that defendants’, actions constituted infringement of ETS’ copyrights, breach of the 1983 agreement, and interference with “ETS’ common law right to preserve the integrity of its testing program and the confidentiality of its secure tests and secure test questions.” Relying on documentary evidence, it sought and was granted a temporary restraining order. The parties waived an evidentiary hearing and instead submitted affidavits. After argument, the district court granted the preliminary injunction at issue here. The court reviewed ETS’ contentions and the legal standard for granting an injunction. It ruled that ETS had shown a likelihood of success, stating only:

ETS has presented evidence which should enable it to prove an infringement by the defendants including certain copyright registration certificates. Furthermore, defendants’ actions appear to have breached the 1983 Agreement between these parties.

[537]*537626 F.Supp. at 528. It entered a broad preliminary injunction, discussed in more detail hereafter.

II.

ADEQUACY OF DISTRICT COURT’S ORDER

Defendants’ initial challenge to the district court’s order is that it fails to satisfy Federal Rules of Civil Procedure 52(a) and 65(d) which require the district court’s injunctions to be accompanied by explicit findings of fact and conclusions of law. Rule 52(a) provides that

... in granting or refusing interlocutory injunctions the court shall ... set forth the findings of fact and conclusions of law which constitute the grounds of its action.

Rule 65(d) reinforces the need for specificity in this respect:

Every order granting an injunction and every restraining order shall set forth the reasons for its issuance____

According to the commentators, a principal purpose served by Rule 52(a) is insuring effective appellate review. See 9 C. Wright & A. Miller, Federal Practice & Procedure § 2576 at 695-96 (1971); 5A J. Moore & J.D. Lucas, Moore’s Federal Practice IT 52.06[1] (1986). In Professional Plan Examiners of New Jersey, Inc. v. LeFante, 750 F.2d 282, 289 (3d Cir.1984), we stated the standard as follows:

... if the record does not provide a sufficient basis to ascertain the legal and factual grounds for issuing the injunction or if the findings “are inadequate to explain the basis for that ruling or to permit meaningful review” the appellate court must vacate the injunction and remand to the district court for further findings.

See also H. Prang Trucking Co., Inc. v. Local Union No. 469, 613 F.2d 1235 (3d Cir.1980); Chas. Pfizer & Co., Inc. v. Zenith Laboratories, Inc., 339 F.2d 429 (3d Cir.1964).

This court has held that there are situations in which a party’s failure to object in the district court to the court’s failure to meet Rule 52(a)’s requirement of specific findings of fact and conclusions of law will have waived that party’s objection. Danny Kresky Enterprises Corp. v. Magid, 716 F.2d 206, 214-15 & n. 3 (3d Cir.1983). But see 9 C. Wright & A. Miller, Federal Practice and Procedure § 2574 at 690 & n. 56 (1971). In this case, defendants do not claim that they preserved their objection in the district court to the court’s failure to make specific fact findings.

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Bluebook (online)
793 F.2d 533, 55 U.S.L.W. 2037, Counsel Stack Legal Research, https://law.counselstack.com/opinion/educational-testing-services-v-katzman-ca3-1986.