January 5, 1994 UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
Nos. 92-2016 92-2132 93-1504 93-1518
GAMMA AUDIO & VIDEO, INC., ET AL.,
Plaintiffs, Appellees, Cross-Appellants,
v.
EAN-CHEA D/B/A OVERSEAS VIDEO, ET AL.,
Defendant, Appellant, Cross-Appellees.
ERRATA SHEET
The opinion of this court issued on December 22, 1993, is
amended as follows:
Page 10, lines 6 and 13: Change "work" to "works."
UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Torruella, Circuit Judge,
Bownes, Senior Circuit Judge,
and Cyr, Circuit Judge.
William F. Spallina on brief for defendant appellant/cross-
appellee Ean-Chea, d/b/a Overseas Video. Philip S. Shaw, with whom Rafferty, Polich & Shaw was on
brief for plaintiffs appellees/cross-appellants Taing Tao, Meng I. Ung and Chen V. Ung and Marvin Feldman and Tetel & Feldman,
P.C. on brief for plaintiff appellee/cross-appellant Gamma Audio
& Video, Inc.
December 22, 1993
BOWNES, Senior Circuit Judge. These cross-appeals BOWNES, Senior Circuit Judge.
involve claims of copyright infringement under the Copyright
Act of 1976, 17 U.S.C. 101, et seq. After a bench trial,
judgment was entered in favor of plaintiffs, Gamma Audio &
Video, Inc., Taing Tao, Meng I. Ung and Cheng K. Ung
(collectively "Gamma"), on their claim that defendant, Ean-
Chea, unlawfully distributed two videotapes containing four
episodes of the Cambodian language version of Jade Fox, a
popular Chinese language soap opera. In addition to
obtaining a permanent injunction against Ean-Chea, Gamma was
awarded $2,500 in statutory damages, as well as costs and
attorney's fees. Both parties appeal from various aspects of
the final judgment entered below and seek to recover
appellate attorney's fees. We affirm the district court on
all issues except one; we reverse the district court's
finding that the four episodes of Jade Fox constitute one
"work" for purposes of computing statutory damages. Because
we hold that four works were infringed, we vacate the
district court's judgment ordering Ean-Chea to pay Gamma
$2,500 for the infringement of only one work, and remand for
a redetermination of damages.
I.
BACKGROUND
Television Broadcasts Ltd. ("TVB") is a producer of
Chinese language television programs and videotapes of those
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programs. The two programs at issue are Jade Fox and Hunters
Prey. They consist, respectively, of twenty-four and twenty
one-hour episodes. Both are Chinese language "Kung Fu"-type
serials created by TVB in Hong Kong and originally broadcast
there. Although considerably more violent, the programs are
of the same genre as American soap operas. It is unclear
whether the episodes were originally broadcast daily or
weekly. TVB holds a valid United States copyright in each of
the programs.
Through a series of four recorded licensing
agreements, Gamma obtained three exclusive rights with
respect to TVB's programs. Gamma obtained the right to dub
TVB videotapes into Cambodian, to duplicate the dubbed
versions, and to distribute by rental the Cambodian versions
in thirty-seven states including Massachusetts. Gamma
assigned all copyrights in the dubbed works to its licensor,
Telefeature, Inc. At the time this action was commenced,
neither Gamma nor anyone else had registered the copyrights
in the derivative works created by Gamma.
Shortly thereafter, Gamma entered into an exclusive
licensing agreement with Taing Tao and his partners, the
other individual plaintiffs. The agreement gave them the
exclusive right to distribute, by rental to the public, the
Cambodian language videotapes created by Gamma, in six states
including Massachusetts. Ean-Chea owns and operates two
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video rental stores in Lowell, Massachusetts. The stores are
named Overseas Video and Overseas Video II. Ean-Chea was the
authorized distributor of the Cambodian versions of TVB's
programs in Massachusetts for Gamma's predecessor.
On February 9, 1991, Chea Sokhoeun, acting on
Gamma's behalf, went to Overseas Video and rented tapes four
through eleven of the Cambodian Jade Fox series. Because
each tape contained two episodes, the rented tapes covered
episodes seven through twenty-two.
On June 13, 1991 Gamma commenced this action in the
United States District Court for the District of
Massachusetts. The complaint contained six causes of action.
Gamma alleged violations of the Copyright Act of 1976, 17
U.S.C. 101, et seq. (the "Copyright Act") and the Lanham
Act, 15 U.S.C. 1051 et seq. It also alleged four state-law
claims: unfair competition, conversion, tortious
interference with advantageous business relations and a
constructive trust. Gamma alleged that Ean-Chea was behind a
massive pirating scheme, and requested millions of dollars in
relief.
Together with the complaint, Gamma submitted a one
page document entitled "Motion For Seizure and Impoundment."
By this motion, Gamma sought an ex parte order allowing it
"to seize and impound any and all video tapes which are owned
or under the control of the defendants and which are
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Cambodian language versions of the TVB programs, produced
under the authority of plaintiff Gamma Audio & Video, Inc.
including any and all such videotapes on the premises of the
respective stores of defendants." Simultaneously, Gamma
moved for a temporary restraining order and preliminary
injunction enjoining Ean-Chea from further acts of
infringement and from disposing any potentially
"incriminating" materials such as business records and
advertising materials. This motion also asked that Ean-Chea
deliver up ... to be impounded during the pendency of this action, all copies of the Gamma TVB Programs and all negatives, prints, matrices, master tapes, all business records relating to the sale and/or rental of video tapes of the Gamma TVB Programs, and all other materials including video recorders, automatic video tape rewinders, and television monitors (collectively "machines") used in the making of such infringing copies and all advertising and materials used in the promotion thereof.
Gamma was authorized to visit Ean-Chea's video stores, in the
company of a U.S. Marshal or Deputy Sheriff, "for the
purposes of inspection, inventorying, and photographing
materials alleged to infringe," and to carry out the
impoundment.
District Judge Mazzone granted the motion for
seizure and impoundment and a T.R.O. and ordered Gamma to
post a bond in the amount of $2,500. On June 24, 1991,
District Judge Zobel, to whom the case was assigned, heard
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argument on Gamma's motion for a preliminary injunction and
granted it.
In the meantime, on June 14, the individual
plaintiffs and their attorneys, accompanied by a local deputy
sheriff, went to Overseas Video to carry out the seizure and
impoundment. The raid yielded nine videotapes containing
episodes three through twenty of Hunters Prey, which were
found in a cardboard box behind the front counter, three
high-speed commercial videotape duplicating machines, and a
notebook containing business records of Overseas Video that
reflected the shipment to Montreal of an unauthorized copy of
a program called Serpentine Romance.
Six months later, on December 13, 1991, Ean-Chea
moved for an order compelling Gamma to return the impounded
video equipment and tapes. On January 13, 1992, Judge Zobel
granted the motion, to which no opposition had been
submitted. On January 17, however, Gamma moved for
reconsideration; and on February 26 Judge Zobel granted
Gamma's motion for reconsideration and then denied Ean-Chea's
motion for return of the impounded material.
On April 28, Gamma elected to recover statutory as
opposed to actual damages, on its claim of copyright
infringement. The next day it voluntarily dismissed counts
two through six of its complaint, leaving only the copyright
claim to be tried. By this time, Gamma realized that the
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copyrights in all but four episodes of Jade Fox, numbers
thirteen through sixteen, as well as the copyright in
Serpentine Romance had not been registered prior to the
commencement of the lawsuit, and therefore could not support
an action seeking statutory damages. These episodes
therefore dropped out of the case, leaving only the four
episodes of Jade Fox and the seized videotapes of Hunters
Prey, as subjects of this litigation.
On May 11, 1992, at the close of a four-day bench
trial, the trial judge stated her findings of fact. In sum,
the court found that Gamma had established infringement with
respect to episodes thirteen through sixteen of Jade Fox, but
had failed to carry its burden of proving infringement with
respect to the seized Hunters Prey tapes.
The court then requested additional submissions by
counsel for both parties on two issues. First, whether Ean-
Chea's unauthorized distribution of the Cambodian version of
four episodes of Jade Fox could support a judgment for
statutory damages. Second, whether each of the four
infringed episodes entitled Gamma to a separate award of
statutory damages. The court held that Ean-Chea had wilfully
infringed upon Gamma's exclusive right to distribute the
video images of the Chinese language version of Jade Fox in
Massachusetts, and that Gamma could therefore recover
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statutory damages. It then found that Gamma could recover
only one award of statutory damages for the infringement.
Meanwhile, on June 8, 1992, Ean-Chea had moved for
the return of its high-speed duplicating machines and
notebook, and for payment of the $2,500 bond posted by Gamma.
On July 3 the court ordered that the materials be returned,
but declined to order payment of the bond.1 On July 15
Gamma moved for costs under the Copyright Act, including
attorney's fees, and on December 12, 1992, Ean-Chea cross-
moved for attorney's fees.
In an opinion dated April 2, 1993, the district
court ruled upon Gamma's motion for costs and attorney's
fees, and Ean-Chea's cross-motion for attorney's fees. The
court awarded Gamma its costs and determined that Gamma, as
the "prevailing party," was eligible for an award of
attorney's fees. It also found that Gamma was entitled to a
fee award because Ean-Chea was a willful infringer. The
court denied Ean-Chea's cross-motion for fees. These appeals
ensued.
II.
DISCUSSION
On their respective appeals each party makes
several arguments. Ean-Chea maintains that: (1) as a matter
1. The articles are still in Gamma's possession pursuant to an order of attachment.
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of law, Gamma could not obtain a judgment for statutory
damages because the copyrights in the Cambodian language
episodes of Jade Fox were not registered; (2) Gamma violated
Ean-Chea's rights guaranteed by the Fourth Amendment in its
search of the premises of Overseas Video; (3) there was a
lack of statutory authority for seizing the duplicating
machines and notebook; and (4) the district court erred in
finding Gamma to be the "prevailing party" under the
Copyright Act, and that Ean-Chea was in fact the prevailing
party.
On its cross-appeal, Gamma contends that: (1) the
district court erred in finding that Ean-Chea had not
unlawfully copied the Hunters Prey videotapes; (2) the
district court erred in limiting Gamma to a single award of
statutory damages; and (3) the district court abused its
discretion in determining Gamma's attorney's fees award.
We review the district court's findings of fact for
clear error, and its conclusions of law de novo. See Lenn v.
Portland Sch. Comm., 998 F.2d 1083, 1087 (1st Cir. 1993).
Mixed questions of law and fact are also reviewed under a
clearly erroneous standard. I.C.C. v. Holmes Transp., Inc.,
983 F.2d 1122, 1128 (1st Cir. 1993).
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A.
Ean-Chea's Appeal
As its first ground on appeal Ean-Chea argues that
Gamma could not obtain a judgment for statutory damages with
respect to the unlawful distribution of episodes thirteen
through sixteen of the Cambodian language version of Jade Fox
because the copyrights in those episodes were not registered.
Gamma argues that Ean-Chea infringed upon the registered
copyrights in the registered Chinese language version of
those episodes, and that it could enforce those copyrights.
The questions before this court are twofold: (1) did Ean-
Chea infringe upon rights that flow from the copyrights in
the Chinese language version of Jade Fox; and (2) could Gamma
enforce those rights.
As the district court recognized, two sets of
copyrights are at issue in this litigation, those in the
underlying works - the Chinese language episodes of Jade Fox,
and those in the derivative works2 created by Gamma - the
Cambodian language episodes of Jade Fox. See 17 U.S.C.
102(a) ("[c]opyright protection subsists ... in original
2. "A `derivative work' is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgement, 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'." 17 U.S.C. 101.
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works ... fixed in any tangible medium of expression ...
from which they can be reproduced"); 17 U.S.C. 103(b)
(derivative works are separately copyrightable).
Gamma owns the copyrights in the derivative works,
and TVB owns the copyrights in the underlying works. Any of
the exclusive rights comprised in a copyright may be
transferred in whole or in part. See 17 U.S.C. 201(d)(1).
By virtue of the licensing agreements, Gamma obtained certain
exclusive rights emanating from the copyrights in the
underlying works. Thus, Gamma owns exclusive rights flowing
from both sets of copyrights.
It is undisputed, however, that the copyrights in
Gamma's derivative works are unregistered. Accordingly,
Gamma cannot recover statutory damages, the only remedy it
sought, for the infringement of its exclusive rights arising
under these unregistered copyrights.3 Instead, Gamma may
only recover statutory damages if Ean-Chea's unauthorized
rental of the Jade Fox videotapes infringed upon exclusive
rights held by Gamma pursuant to the registered copyrights in
the underlying works.
3. To maintain an action for statutory damages, the copyrights in the infringed works must be registered. 17 U.S.C. 412; Melville B. Nimmer and David Nimmer, 3 Nimmer
on Copyright, 14.04[E], at 14-59 (1993) (hereinafter
"Nimmer").
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Ean-Chea maintains that it only infringed upon
rights held by Gamma arising out of the unregistered
copyrights in the derivative works. We disagree.
Although a derivative work may be separately
copyrighted, that copyright does not affect the copyright in
the underlying work. The statute provides that
[t]he copyright in a ... derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in
such a work is independent of, and does
not affect ... any copyright protection
in the preexisting material.
17 U.S.C. 103(b) (emphasis added); see 1 Nimmer,
3.04[A], at 3-17 to -18 (1993). Thus the copyright in a
derivative work only protects the original elements
contributed by the author of the derivative work, in this
case the Cambodian language soundtrack created by Gamma. Any
elements that the author of the derivative work borrowed from
the underlying work, such as the video images in the Chinese
language episodes of Jade Fox, remain protected by the
copyrights in the underlying work. We are led inexorably to
the conclusion that Ean-Chea infringed upon copyrights in the
underlying works by renting out episodes of the Cambodian
version of Jade Fox which contained video images protected by
the registered copyrights in the Chinese version of Jade Fox.
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Next we determine whether Gamma may recover for this
infringement.
Under the Copyright Act, the copyright owner of a
derivative work "has a cause of action for infringement by
reason of the substantial copying from the derivative work of
material which originally appeared in the underlying work."
1 Nimmer 3.05, at 3-30. This means that, if the copyright
owner in a derivative work is the exclusive licensee of
certain rights in the underlying work, it becomes the
copyright owner of the underlying work for the purpose of
exercising those rights. Id.; 17 U.S.C. 201(d)(2)
(transferee of any exclusive right is entitled "to all of the
protection and remedies accorded to the copyright owner").
In the present case, Gamma is the exclusive
licensee of the right to distribute, in Massachusetts, the
video images of the Chinese production of Jade Fox, in
conjunction with a Cambodian language soundtrack. See 17
U.S.C. 106 (exclusive rights include rights to copy the
work, prepare derivative works, and distribute the work to
the public by rental, sale or lease). Accordingly, Gamma may
recover for Ean-Chea's infringement. 17 U.S.C. 501(b)
("[t]he legal or beneficial owner of an exclusive right under
a copyright is entitled ... to institute an action for any
infringement of that particular right committed while he or
she is the owner of it"). It is irrelevant that what was
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actually distributed by Ean-Chea was the derivative and not
the underlying work. See 1 Nimmer 3.05, at 3-31; see also
G. Ricordi & Co. v. Paramount Pictures, Inc., 189 F.2d 469
(2d Cir.), cert. denied, 342 U.S. 849 (1957) (performance of
play in which copyright registration had expired constituted
infringement of the registered copyright in the underlying
story from which play was derived); Grove Press, Inc. v.
Greenleaf Publishing Co., 247 F. Supp. 518 (E.D.N.Y. 1965)
(copying of unregistered English language translation of
French language novel infringed upon the registered copyright
in the underlying French language story).
Taking a somewhat scattershot approach to brief
writing, Ean-Chea identifies a host of infirmities with
respect to the seizure and impoundment order obtained and
executed by Gamma at the outset of this litigation. Ean-Chea
appears to argue that: (1) in executing the orders signed by
Judge Mazzone, Gamma violated Ean-Chea's Fourth Amendment
right to be free from unreasonable searches and seizures;
(2) 503(a) of the Copyright Act does not authorize the
seizure of videotape duplicating machines; (3) 509 does
not authorize the seizure of books and records (i.e., Ean-
Chea's notebook); and (4) although 509 authorizes the
seizure of videotape duplicating machines, Gamma failed to
follow the procedures set forth therein.
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Ean-Chea has, generously speaking, provided a
superficial briefing of the above issues, often dedicating no
more then three or four conclusory sentences to a topic
before moving on. For this and other reasons we reject all
of the above contentions.
First we confront Ean-Chea's constitutional claim
arising under the Fourth Amendment. While there appears to
be some support for the substance of this argument, see
Paramount Pictures Corp. v. Doe, 821 F. Supp. 82, 90-91
(E.D.N.Y. 1993) (proposed seizure and impoundment order in
copyright case must specify with particularity the premises
to be searched and the articles to be seized or run afoul of
Fourth Amendment), Ean-Chea failed to present this argument
to the district court and is thus precluded from raising it
on appeal. See McCoy v. Massachusetts Institute of
Technology, 950 F.2d 13, 22 (1st Cir. 1991), cert. denied,
112 S. Ct. 1939 (1992) ("theories not raised squarely in the
district court cannot be surfaced for the first time on
appeal").
The next argument raised by Ean-Chea, which
implicates the scope of 503(a)4, was not presented at oral
4. Section 503(a) provides as follows: At any time while an action under this title is pending, the court may order the impounding, on such terms as it may deem reasonable, of all copies or phonorecords claimed to have been made or used in violation of the copyright owner's
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argument, takes up a mere handful of sentences in its brief,
and is wholly unaccompanied by any developed argumentation.
We have consistently admonished litigants that they cannot
simply present this court with a shopping list of arguments
and then expect us to both develop and address each one.
Ean-Chea's argument with respect to 503(a) is presented in
such a cursory and mechanical fashion as to render it
unpreserved on appeal. See, e.g., Cohen v. Brown Univ., 991
F.2d 888, 903 (1st Cir. 1993) ("Litigants cannot preserve an
issue for appeal by raising a pennant and then moving on to
another subject"); Ryan v. Royal Ins. Co. of America, 916
F.2d 731, 734 (1st Cir. 1990) ("issues adverted to on appeal
in a perfunctory manner, unaccompanied by some developed
argumentation, are deemed to have been abandoned").
Ean-Chea's argument premised upon 509 is off
base. Although he spends a considerable amount of space on
this point, Ean-Chea fails to realize that 509 has no
bearing on the matter before us. Section 509(a) provides a
list of articles that may be seized and forfeited to the
United States in criminal prosecutions brought to enforce
exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced. 17 U.S.C. 503(a). This provision establishes a discretionary power to order impoundment. Midway Mfg. Co. v.
Omni Video Games, Inc., 668 F.2d 70, 72 (1st Cir. 1981).
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violations of the Copyright Act. The procedures referred to
by Ean-Chea, set forth in 509(b), apply only to seizures
and forfeitures described by subsection (a) of 509. See 17
U.S.C. 509(b). Because 509 is limited to criminal
actions, it is of no use to Ean-Chea in the present case.
Next, Ean-Chea appeals the attorney's fees
component of the district court's judgment. The focus of
Ean-Chea's discontent with the fee allowance in the present
case is that the district court determined that Gamma and not
he was the "prevailing party" below.
Section 505 of the Copyright Act provides as
follows:
In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party .... [T]he court may also award a reasonable attorney's fee to the prevailing party as part of the costs.
17 U.S.C. 505. "Under the Copyright Act, the `prevailing
party is one who succeeds on a significant issue in the
litigation that achieves some of the benefits the party
sought in bringing the suit.'" Video Views, Inc. v. Studio
21, Ltd., 925 F.2d 1010, 1022 (7th Cir.), cert. denied, 112
S. Ct. 181 (1991) (quoting Warner Bros., Inc. v. Dae Rim
Trading, Inc., 877 F.2d 1120, 1126 (2d Cir. 1989) (citation
omitted)).
We review de novo the district court's
determination that Gamma met the "prevailing party" test.
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Domegan v. Ponte, 972 F.2d 401, 406 (1st Cir. 1992), vacated
on other grounds, 113 S. Ct. 1378 (1993) (citing cases).
Although prevailing party determinations are often reviewed
under an abuse of discretion standard, see McDonald v.
Secretary of Health and Human Services, 884 F.2d 1468, 1474
(1st Cir. 1989), such is not the case where, as here, no
facts are in dispute and application of the "prevailing
party" test presents a pure question of law warranting
plenary review. Domegan, 972 F.2d at 406-07 n.8.
Ean-Chea argues that Gamma did not "prevail"
because, prior to trial, it voluntarily dismissed the five
non-copyright claims contained in the complaint, conceded
that it was not entitled to statutory damages on twelve
episodes of Jade Fox whose copyrights had not been registered
prior to the commencement of this action, and failed to prove
infringement with respect to the Hunters Prey videotapes.
Although all of this is true, Gamma did succeed on its
infringement claim with respect to episodes thirteen through
sixteen of Jade Fox. While we recognize that Gamma
downscaled its case as the litigation proceeded, in light of
its victory vis- -vis the four episodes of Jade Fox, we have
little trouble in concluding that Gamma succeeded on a
"significant issue in the litigation." See Langton v.
Johnston, 928 F.2d 1206, 1226 (1st Cir. 1991) (significance
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must be viewed in light of "the scope and tenor of the
litigation as a whole").
Furthermore, by virtue of its success, Gamma was
awarded $2,500 in statutory damages, and Ean-Chea was
permanently enjoined from further acts of infringement. This
restriction on Ean-Chea's future behavior marks a clear
change in the legal relationship between the parties enuring
to Gamma's benefit. In addition, the monetary judgment
recovered by Gamma on the merits of its claim is more than
sufficient to qualify it as a "prevailing party." See, e.g.,
Farrar v. Hobby, U.S. , , 113 S. Ct. 566, 573
(1992) (civil rights plaintiff who won only nominal damages
of one dollar still "prevailing party" and thus eligible for
attorney's fee award).
Ean-Chea points to the poor winning percentage
posted by Gamma and concludes that Gamma cannot possibly be a
"prevailing party." We disagree. In the first place, the
voluntarily dismissed claims were not copyright claims and
thus not germane to the determination of whether Gamma was a
"prevailing party" under the Copyright Act. More importantly,
this court has firmly rejected a "mathematical approach" to
the "prevailing party" determination. See Domegan, 972 F.2d
at 407 n.9. In any event, it is well settled that "the
degree of the plaintiff's overall success goes to the
reasonableness" and not the allowability of an attorney's fee
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award. Farrar, U.S. at , 113 S. Ct. at 574 (quoting
Texas State Teachers Assn. v. Garland Independent School
Dist., 489 U.S. 782, 793 (1989)). We affirm the district
court's determination that Gamma was the "prevailing party,"
and hence eligible for a fee award.
We have considered Ean-Chea's remaining arguments
and find them to be without merit.
B.
Gamma's Cross-Appeal
As its first ground for appeal Gamma argues that
the district court clearly erred by finding that it failed to
prove that Ean-Chea had either reproduced or distributed the
videotapes of Hunters Prey.
We start with the proposition that the plaintiff in
a copyright action carries the burden of proof. Concrete
Machinery Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600,
605 (1st Cir. 1988); Motta v. Samuel Weiser, Inc., 768 F.2d
481, 483 (1st Cir.), cert. denied, 474 U.S. 1033 (1985). To
carry this burden a plaintiff must prove each of the elements
of copyright infringement: (1) ownership of the copyright;
and (2) copying by the defendant. Id. It is undisputed that
Gamma satisfied the first prong of this test, and Gamma
argues that it met the second through circumstantial evidence
presented at trial.
We have recognized that, in a copyright action,
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proof by direct evidence of copying is generally not possible since the actual act of copying is rarely witnessed or recorded. Normally, there is no physical proof of copying other than the offending object itself. Copying therefore is generally established by showing that the defendant had access to the copyrighted work and that the offending and copyrighted articles are "substantially similar."
Concrete Machinery Co., 843 F.2d at 605. "Copying is
demonstrated when someone who has access to a copyrighted
work uses material substantially similar to the copyrighted
work in a manner which interferes with a right protected by
17 U.S.C. 106." Ford Motor Co. v. Summit Motor Products,
Inc., 930 F.2d 277, 291 (3d Cir. 1991) (footnote omitted).
Among the rights protected by 106 are the rights to copy
and distribute the copyrighted work.
Both access and substantial similarity are
undisputed in the present case, and there was no question
that the videotapes of Hunters Prey found in Ean-Chea's store
were piratical copies.5 Ean-Chea, however, disclaimed any
knowledge of the Hunters Prey tapes found at his store, and
denied that he had ever copied or distributed tapes of
Hunters Prey. Ean-Chea testified that a customer must have
rented the tapes at another video store and accidentally
returned them to Overseas Video.
5. "Piratical" copies are copies made without authorization of the copyright owner. H.R. Rep. No. 1476, 94th Cong., 2d Sess. 162, reprinted in 1976 U.S.C.C.A.N. 5659, 5785.
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The function of the district court acting as fact-
finder was to determine, by weighing all of the evidence, if
Gamma had met its ultimate burden of persuasion. The court
concluded that it had not. The court found that "[t]he only
direct evidence with respect to Hunters Prey is that at the
time of the raid there were ... 10 or 11 tapes, in a box near
the counter." Viewing this evidence along with the
circumstantial evidence, which consisted primarily of the
fact that videotape copy machines were found at Ean-Chea's
store, the district court found that either of two
conclusions were possible: either (1) appellant had copied
tapes of Hunters Prey and/or held them out for distribution;
or (2) the tapes belonged to another store and some customer
erroneously returned them to Ean-Chea's store. According to
the district court, the latter "is an equally believable
version on the basis of the evidence ...." Id.
Taken as a whole the court found that the evidence
was ambiguous to the extent that it was "not prepared to draw
the inference" that Gamma wished it to draw, namely, that
Ean-Chea either copied or distributed videotapes of Hunters
Prey.
Although the evidence could have supported a
finding of infringement, the district court credited a
plausible, lawful explanation for the presence of the tapes
at Ean-Chea's store. It is established beyond cavil that the
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trial judge is in the best position to assess the credibility
of witnesses, see Wainwright v. Witt, 469 U.S. 412, 428
(1985) (assessing the credibility of witnesses is peculiarly
within the trial judge's province), and great deference must
be given to a trial court's findings based on credibility
determinations. Rodriguez-Morales v. The Veterans
Administration, 931 F.2d 980, 982 (1st Cir. 1991). "Where
there are two permissible views of the evidence, the
interpretation assigned by the fact-finder must be adopted."
Id. Given the restricted nature of our review of the
district court's findings of fact, we cannot say that it
clearly erred in finding that Gamma failed to carry its
burden of proving that Ean-Chea had either made unauthorized
copies or unauthorized rentals of videotapes of Hunters Prey.
Gamma argues that it is entitled to four awards of
statutory damages for Ean-Chea's willful infringement of
episodes thirteen through sixteen of Jade Fox. Under the
Copyright Act a party may seek an award of statutory damages
"in lieu" of actual damages. 17 U.S.C. 504(c). Section
504(c) provides for an award of statutory damages "for all
infringements involved in the action, with respect to any one
work," and further provides that for "purposes of this
subsection, all the parts of a compilation or derivative work
-23- 23
constitute one work." 17 U.S.C. 504(c)(1) (emphasis
added).
The district court gave Gamma a single award of
statutory damages. Although Ean-Chea was found to have
infringed upon the copyrights in four separate episodes of
Jade Fox, the court found that these episodes constituted one
"work" for purposes of computing statutory damages. Since
the district court's findings on this issue were
substantially influenced by its choice of a different legal
standard than we apply, its determination on this mixed
question of law and fact is entitled to less deference on
review than would be accorded a pure finding of fact. See
United States v. Howard, 996 F.2d 1320, 1327 (1st Cir. 1993);
see also Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213,
1215 n.5 (2d Cir. 1972) (rejecting "clearly erroneous"
standard when reviewing whether work was created "for hire"
under 24 of Copyright Act).
Our discussion is guided by the Second Circuit's
recent decision in Twin Peaks Productions v. Publications
Intern., 996 F.2d 1366 (2d Cir. 1993). The issue in Twin
Peaks was whether eight separately written teleplays (or
videotapes of eight televised episodes)6 of the television
program Twin Peaks constituted eight works or a single work
6. The court indicated that its holding applied whether written teleplays or videotaped television episodes were at issue. Twin Peaks, 996 F.2d at 1381.
-24- 24
under 504(c). The district court found that the
infringement of each episode warranted its own award of
statutory damages, and the court of appeals affirmed.
The eight Twin Peaks episodes, as the Second
Circuit explained, "represent a current television genre in
which one or more plots continue from one episode to
another." Id. at 1381. In fact, Twin Peaks carried the
point of the basic plot - who killed Laura Palmer -
throughout its first season. On the issue of statutory
damages, the court stated:
The author of eight scripts for eight television episodes is not limited to one award of statutory damages just because he or she can continue the plot line from one episode to the next and hold the viewers' interest without furnishing a resolution. We might well have a different situation if a book written as a single work was then adapted for television as a group of episodes, for example, the six-part television adaptations of John LeCarre's "Tinker, Tailor, Soldier, Spy" and "Smiley's People." Even in such circumstances, though there would be but one book infringed, there might be separate awards for infringement of each televised episode.
Id. The Second Circuit found that Twin Peaks was an easy
case, and that the eight teleplays or televised episodes
clearly constituted eight separate works. While our case
strongly resembles Twin Peaks, we pause here to assay some
differences.
-25- 25
First, the copyrights in episodes thirteen through
sixteen of Jade Fox were registered on a single registration
form, while the eight episodes of Twin Peaks were "separately
copyrighted." Id. Second, there was no evidence submitted as
to whether the scripts for episodes thirteen through sixteen
of Jade Fox were separately written, whereas the eight
episodes of Twin Peaks were based upon separately written
teleplays. Id.
We take a step back, at this juncture, to discuss
some background concerning statutory damages in copyright
actions. Unlike the Copyright Act of 1909, under which
statutory damages were available for "each infringement that
was separate," Robert Stigwood Group, Ltd. v. O'Reilly, 530
F.2d 1096, 1102 (2d Cir. 1976), the present Copyright Act
"shifts the unit of damages inquiry from number of
infringements to number of works." Twin Peaks, 996 F.2d at
1381. The House Report concerning 504(C)(1) makes it clear
that,
although the minimum and maximum amounts [of statutory damage awards] are to be multiplied where multiple "works" are involved in the suit, the same is not true with respect to multiple copyrights, multiple owners, multiple exclusive rights, or multiple registrations.
H.R. Rep. No. 1476, 94th Cong., 2d Sess. 162, reprinted in
1976 U.S.C.C.A.N. 5659, 5778.
-26- 26
The term "work," is undefined under the Copyright
Act. Although the Twin Peaks court did not undertake the
task of supplying a definition, one court of appeals has
posited that "separate copyrights are not distinct works
unless they can `live their own copyright life.'" Walt
Disney Co. v. Powell, 897 F.2d 565, 569 (D.C. Cir. 1990)
(quoting Stigwood 530 F.2d at 1105).7 The test set forth in
Walt Disney is a functional one, with the focus on whether
each expression (or in our case, television episode) has an
independent economic value and is, in itself, viable. See
Walt Disney, 897 F.2d at 569; see also 3 Nimmer 14.04[E],
at 14-64.
The district court's determination that all four
episodes of Jade Fox were one "work" for the purpose of
statutory damages was based on two facts: that Gamma sells
or rents only complete sets of the Jade Fox series to video
stores, and the copyrights in the four episodes at issue were
registered on one form. The former fact, according to the
district court, "suggests plaintiffs view the Jade Fox
episodes as one work for economic purposes notwithstanding
7. Walt Disney arose under the Copyright Act of 1976 and
involved the infringement of six copyrights, each protecting a distinct pose of either Mickey or Minnie Mouse. The court held that the defendant had only infringed upon two works, Mickey and Minnie, for purposes of assessing statutory damages. See Walt Disney, 897 F.2d at 570 ("Mickey is still
Mickey whether he is smiling or frowning, running or walking, waving his left hand or his right.").
-27- 27
the rental by consumers of only a few episodes at a time or
its production in separate episodes[,]" while the latter
fact "indicates [that] TVB [the author of Jade Fox]
considered at least these four episodes to be one work." We
do not find the district court's reasoning compelling.
Starting with the district court's second point, we
find that there is simply no authority for drawing such an
inference. Under regulations promulgated by the Copyright
Office, the copyrights in multiple works may be registered on
a single form, and thus considered one work for the purposes
of registration, see 37 C.F.R. 202.3(b)(3)(A), while still
qualifying as separate "works" for purposes of awarding
statutory damages.8 We are unable to find any language in
8. The regulation states in pertinent part: For the purpose of registration on a single application and upon payment of a single registration fee, the following shall be considered a single work: (A) In the case of published works: All copyrightable elements that are otherwise copyrightable as self-contained works, that are included in a single unit of publication, and in which the copyright claimant is the same .... 37 C.F.R. 202.3(b)(3)(A). Although we question whether the four episodes of Jade Fox at issue here were "included in a
single unit of publication," since episodes thirteen through sixteen of Jade Fox are contained on two videotapes, this
goes to the issue of TVB's compliance with the copyright regulations, not whether Gamma is entitled to multiple awards of statutory damages. As the legislative history to 504(c)(1) makes clear, the number of copyright registrations is not the unit of reference for determining the number of awards of statutory damages. Moreover, we note that the Twin
Peaks court did not rely on the number of copyright
registrations in reaching its result. See Twin Peaks, 996
-28- 28
either the statute or the corresponding regulations that
precludes a copyright owner from registering the copyrights
in multiple works on a single registration form while still
collecting an award of statutory damages for the infringement
of each work's copyright.
With regard to the district court's first point,
that Gamma sells or rents only complete Jade Fox sets to
video stores, we do not find this fact persuasive in the
present inquiry. A distributor's decision to sell or rent
complete sets of a series to video stores in no way indicates
that each episode in the series is unable to stand alone.9
More significant for present purposes is the fact that (1)
viewers who rent the tapes from their local video stores may
rent as few or as many tapes as they want, may view one, two,
or twenty episodes in a single sitting, and may never watch
or rent all of the episodes; and (2) each episode in the Jade
Fox series was separately produced.
F.2d at 1381.
9. If the distributor of the Rocky series of motion pictures
required video stores to purchase all five of the movies, or alternatively, packaged the movies as a boxed set for resale, the five movies would not suddenly become one "work" for the purpose of damages. See, e.g., Cormack v. Sunshine Food
Stores, Inc., 675 F. Supp. 374, 377 (E.D. Mich. 1987)
(written tests designed to detect honesty and emotional status, respectively in the workplace are not one "work" for the purpose of statutory damages just because they are packaged and sold together).
-29- 29
While our case arguably falls somewhere between the
Twin Peaks and the hypothetical novel turned television mini-
series scenario presented therein, 996 F.2d at 1381, it more
closely resembles Twin Peaks than the hypothetical. Each
episode of Jade Fox was produced independently from the other
episodes, and each episode of Jade Fox was aired on
television independently from the preceding and subsequent
episodes.10 In addition, unlike the "Tinker, Tailor,
Soldier, Spy" hypothetical in Twin Peaks, our case does not
involve the infringement of a single book, but rather, much
like Twin Peaks, involves the infringement of four
separately-produced television episodes prepared as part of a
weekly (or perhaps daily) series. We conclude that Gamma is
entitled to four awards of statutory damages for Ean-Chea's
infringement of four separate "works."
As its final argument on its cross-appeal, Gamma
contests the district court's attorney's fee award. The fee
application requested a total of $80,198.62 and costs in the
amount of $7,608.87. The district court awarded all of the
requested costs, but substantially reduced Gamma's fee
request, awarding $12,500. This reduction was based on a
multitude of factors.
10. Because no English translation of the episodes was provided below, the district court was unable to study the episodes' plots to gauge their relation to each other.
-30- 30
Generally speaking, the district court found that
Gamma had "over-prosecuted this case, pursued infringement
actions on works that were not registered, and achieved very
limited success." More specifically, the court found that
plaintiffs had originally "filed a six-count complaint
alleging a massive scheme of wrongdoing, ... seeking millions
of dollars in damages," and then, armed with a court order,
raided Ean-Chea's store ... apparently expecting to uncover a huge cache of infringing materials. Instead, what they found was a single set of pirated `Hunters Prey' tapes located under some trash in a cardboard box by the counter, some high speed video copying equipment, and a business record that reflected the shipment of one unauthorized copy of a program entitled `Serpentine Romance' to Montreal.
The court further noted that, as trial neared, Gamma
dismissed the five non-copyright claims, "and conceded that
because [the copyrights in] Serpentine Romance and twelve
episodes of Jade Fox had not been registered prior to the
filing of the lawsuit, they too fell out of the case."
With respect to Gamma's fee request, the court had
much to say:
many of the [time-sheet] entries were extremely vague, making it virtually impossible ... to determine whether requested hours were excessive, redundant (especially with respect to how New York and local counsel divided tasks), or otherwise unnecessary, as well as to parse out attorney time and expenses related to the unsuccessful claims and
-31- 31
[voluntarily] dismissed portion of the case.
The district court then pointed out numerous ambiguities in
the attorneys' records, as well as instances where telephone
conversations between counsel were reflected only in the
records of one of the two attorneys. Finally the court
provided examples of charges that appeared facially
excessive, such as billing the client for leaving a telephone
message when the person telephoned was absent. The court
settled on a fee award that it believed represented
reasonable compensation for the nature of the work performed,
taking into account how much time was actually expended.
The district court found that the time-sheet
entries submitted by Gamma's attorney's were so ambiguous
that it was not clear which claims in the complaint the
entries related to. For example, the district court noted
entries that stated merely "Draft documents," "Work on Case,"
"Review of Discovery," and "study file, legal research re
Mass. case."
We review fee awards for abuse of discretion, see
Foley v. City of Lowell, Mass., 948 F.2d 10, 18-19 (1st Cir.
1991), and "'normally prefer to defer to any thoughtful
rationale and decision developed by a trial court and to
avoid exhaustive second guessing.'" Domegan, 972 F.2d at 421
(quoting Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 950
(1st Cir. 1984)).
-32- 32
Under the circumstances, the district court clearly
acted within the broad limits of its discretion by
substantially discounting Gamma's fee request. Finding no
abuse, we affirm the district court's fee award.
Each party contends that, under 17 U.S.C. 505, it
is entitled to recover its costs, including attorney's fees,
incurred on this appeal. In addition, Gamma seeks sanctions,
in the form of attorney's fees, under Fed. R. App. P. 38.
Rule 38 allows for fees and double costs to be awarded to an
appellee where the appellant has brought a frivolous appeal.
While Ean-Chea did not prevail on his appeal, we do not feel
that this case warrants the imposition of sanctions under
Rule 38.
While it is true that, under 505, the Copyright
Act, this court may make an award of attorney's fees to the
prevailing party for services rendered on appeal, see Twin
Peaks, 996 F.2d at 1383; see also 3 Nimmer 14.10[E], at
14-129 ("An award of attorney's fees may be made for services
rendered on appeal as well as at the trial level"), we
decline to do so. Because he did not prevail on his appeal
or the cross-appeal, Ean-Chea is not entitled to an award of
fees. The appeal, however, was not frivolous, and Gamma only
achieved limited success on its cross-appeal. Therefore, in
the exercise of our discretion we decline to award Gamma
-33- 33
appellate fees. Gamma is, of course, entitled to costs on
appeal.
III.
CONCLUSION
On Ean-Chea's appeal, the judgment of the district
court is affirmed. On Gamma's cross-appeal, the judgment of
the district court is affirmed except that we reverse its
finding as to the number of "works" infringed upon by Ean-
Chea for the purpose of calculating statutory damages. We
hold that Ean-Chea infringed upon four works, not one. We
therefore vacate the district court's judgment ordering Ean-
Chea to pay Gamma $2,500 in statutory damages, and remand to
the district court for a redetermination of damages based
upon our holding.
-34- 34