United States Court of Appeals,
Eleventh Circuit.
No. 95-4424.
MCA TELEVISION LTD. a Delaware Corporation, Plaintiff-Appellee,
v.
C. Elvin FELTNER, Jr., Defendant-Appellant.
J. Clifford Curley, et al., Defendants.
July 26, 1996.
Appeal from the United States District Court for the Southern District of Florida. (No. 93-14213-CIV-EBD), Edward B. Davis, Judge.
Before COX and BARKETT, Circuit Judges, and BRIGHT*, Senior Circuit Judge.
BARKETT, Circuit Judge:
C. Elvin Feltner, Jr., appeals from a $9 million judgment
against him in favor of MCA Television following a non-jury
copyright infringement trial. Feltner contends that the judgment
must be reversed because the district court (1) lacked subject
matter jurisdiction, (2) erred in finding that he breached
licensing agreements when he failed to pay licensing fees that had
become due under those agreements, and, finally (3) erred in
calculating damages. We affirm.
Factual Background
MCA owns syndicated television programs and Feltner owns
television stations. MCA and Feltner entered into an agreement in
which MCA licensed Feltner to show certain programs, such as
"Kojak" and "The A Team." When Feltner failed to pay fees that had
* Honorable Myron H. Bright, Senior U.S. Circuit Judge for the Eighth Circuit, sitting by designation. become due, MCA suspended his right to televise its programs.
Notwithstanding the suspension, Feltner continued to televise the
MCA programs. MCA sued Feltner claiming 900 separate acts of
copyright infringement; one for each unauthorized program that
Feltner aired. The district court found for MCA, awarded $10,000
pursuant to statute for each of the 900 unauthorized programs
aired, and entered a $9 million judgment against Feltner.
Discussion
Feltner initially asserts that the district court lacked
subject matter jurisdiction because this cause did not "arise
under" the Copyright Act. 17 U.S.C. § 501 et seq. Feltner argues
that this case involves a breach of contract claim and that the
federal district court therefore did not have jurisdiction. We
disagree and find that the court had subject matter jurisdiction
over MCA's claim under the Copyright Act. See Sullivan v.
Naturalis, 5 F.3d 1410, 1413 (11th Cir.1993).
Feltner next asserts that the district court erred in finding
that he breached the licensing agreements when he failed to pay the
licensing fees. The licensing agreements provided that, if Feltner
failed to pay the licensing fees, MCA could terminate Feltner's
right to broadcast MCA programs. Feltner does not dispute that he
failed to pay the fees. He argues, rather, that MCA waived its
right to terminate the licensing agreements because MCA treated
prior termination letters merely as collection letters to induce
payment. We conclude that the district court's factual finding
that MCA did not waive its right to terminate the licensing
agreements was not clearly erroneous. Finally, Feltner argues that the district court erred in its
calculation of damages in various ways, only some of which we find
necessary to discuss here. Initially, we reject Feltner's
assertion that the district court erred in finding that Feltner
acted "willfully" in infringing MCA's copyright, which resulted in
a higher statutory damages determination. Section 504(c)(1) of the
Copyright Act, 17 U.S.C. § 504(c), provides that the copyright
owner may elect to recover, instead of actual damages and profits,
an award of statutory damages "in a sum of not less than $500 or
more than $20,000" for each infringement. See 17 U.S.C. §
504(c)(1) (1996). Section 504(c)(2) provides for an enhanced
damages award if the infringement was willful and for a reduced
award if the infringement was innocent. One commentator has stated
that "[i]t seems clear that as here used "willfully' means with
knowledge that the defendant's conduct constitutes copyright
infringement." 3 Nimmer on Copyright (1990), § 14.04[B], 14-58-60
(emphasis added).
We note that, although the district court found that
Feltner's infringements of MCA's copyrights were "willful, not
innocent, in nature," the district court awarded damages of $10,000
per airing, an amount which did not require a finding of
willfulness. In any event, the district court's finding that
Feltner acted willfully was not clearly erroneous. As the court
pointed out, Feltner knew that MCA's revocation of his stations'
license to air MCA programs prevented him from lawfully
broadcasting them. As such, Feltner knew his conduct constituted
copyright infringement. Feltner also argues that the district court erred in
calculating damages because it awarded damages for each episode
broadcast, as opposed to each series, as a separate "work."
Although the federal Copyright Act allows for damages based on each
"work," see 17 U.S.C. § 504(c)(1) (providing that "the copyright
owner may elect, at any time before final judgment is rendered, to
recover, instead of actual damages and profits, an award of
statutory damages for all infringements involved in the action,
with respect to any one work ") (emphasis added), it does not
define the term "work."
The circuits that have defined "work" have held that "separate
copyrights are not distinct "works' unless they can "live their own
copyright life.' " Gamma Audio & Video, Inc. v. Ean-Chea, 11 F.3d
1106 (1st Cir.1993); Robert Stigwood Group, Ltd. v. O'Reilly, 530
F.2d 1096, 1105 (2nd Cir.1976); Walt Disney Co. v. Powell, 897
F.2d 565, 569 (D.C.Cir.1990). This test focuses on whether each
expression has an independent economic value and is, in itself,
viable. 11 F.3d at 1116, 530 F.2d at 1105, 897 F.2d at 568.
Feltner asserts that the industry practice is to enter
contracts for television series, not individual episodes of series,
and that no one would purchase and air just one episode of a
series. He argues that, for these reasons, an individual episode
of a series does not have independent value, is not "commercially
viable," and therefore is not a "work" under the test adopted by
the First, Second, and D.C. Circuits.
Although we agree with the test adopted by other circuits in
defining a "work," we find that Feltner has failed to meet it here. Indeed, in Gamma, the First Circuit rejected the same argument
Feltner now makes. Gamma involved a video rental store, Ean-Chea,
that reproduced and rented unauthorized videotape copies. 11 F.3d
at 1108. The district court found that Ean-Chea infringed the
copyrights of four episodes of a Chinese language television series
owned by Gamma. In calculating statutory damages, the district
court gave Gamma a single award, concluding that although Ean-Chea
had infringed upon the copyrights in four separate episodes of the
series, these episodes constituted only one work based in part on
the fact that Gamma sells or rents only complete sets of the series
to video stores. Id. at 1115. The First Circuit reversed,
reasoning that
[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. 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 [ ] series was separately produced.
Id. at 1117.
Similarly, the decision of a distributor of television
programs to sell television series as a block, rather than as
individual shows, in no way indicates that each episode in a series
is unable to stand alone. Each episode was produced independently
from the other episodes and each was aired independently from
preceding and subsequent episodes. Moreover, each episode, and not
each series, was individually copyrighted by MCA.
Along the same lines, we reject Feltner's argument that each
episode was part of a "collective work." Section 504(c)(1) provides that "all parts of a compilation ... constitute one work."
The Copyright Act defines "compilation" as
a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The term "compilation" includes collective works.
17 U.S.C. § 101 (emphasis added). A "collective work" is "a work,
such as a periodical issue, anthology, or encyclopedia, in which a
number of contributions, constituting separate and independent
works in themselves, are assembled into a collective whole." Id.
Feltner points to a clause in the licensing agreements
referring to anthologies and argues that each series at issue here
is an anthology. We are not persuaded. InTwin Peaks Productions,
Inc. v. Publications International, Ltd., 996 F.2d 1366 (2nd
Cir.1993), the Second Circuit addressed the issue of the
appropriate unit for determining statutory copyright damages.
There, Publications International had published a book containing
a detailed discussion of the plots of eight episodes of the
television show "Twin Peaks." Publications International argued,
as Feltner does here, that, although each episode of "Twin Peaks"
was individually copyrighted, it constituted a single work under
section 504 of the Copyright Act. The Second Circuit rejected this
argument, stating that "[t]he 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." Id. at 1381.
Feltner's argument is not as strong as that rejected by the Second Circuit in Twin Peaks. Whereas "Twin Peaks" involved a
series of eight shows with a plot that linked the shows together
into one cohesive story, the programs at issue here—"The A Team"
and "Kojak"—are series with individual plots in each episode.
Thus, the district court properly awarded damages for each
television episode, rather than for each series, broadcast as a
separate "work."
Finally, Feltner asserts that the district court erred in
calculating damages because it awarded damages for multiple airings
of the same episode. He argues that, under the Copyright Act,
statutory damages are based on each "work" infringed, rather than
each infringement, see 17 U.S.C. § 504(c), and that if the same
episode is aired three times, only one work has been infringed, not
three. MCA responds that Feltner did not properly place this issue
before the district court for determination and that, as a result,
we cannot reach the merits of the issue. We agree with MCA.
Section 504(c)(1) provides that "the copyright owner may elect
... an award of statutory damages for all infringements involved in
the action, with respect to any one work...." (emphasis added).
The Fifth Circuit summarized the effect of section 504(c)(1):
Under this section, the total number of "awards" of statutory damages (each ranging from $500 to $20,000) that a plaintiff may recover in any given action depends on the number of works that are infringed and the number of individually liable infringers, regardless of the number of infringements of those works. So if a plaintiff proves that one defendant committed five separate infringements of one copyrighted work, that plaintiff is entitled to only one award of statutory damages ranging from $500 to $20,000. And if a plaintiff proves that two different defendants each committed five separate infringements of five different works, the plaintiff is entitled to ten awards, not fifty.
Mason v. Montgomery Data, Inc., 967 F.2d 135, 143-44 (5th Cir.1992); see also Walt Disney Company v. Powell, 897 F.2d 565,
569 (D.C.Cir.1990).
In this case, however, the district court determined that the
parties had failed to raise the issue of whether multiple airings
of the same episode were included within the 900 broadcasts of MCA
programs that Feltner agreed he aired after MCA had withdrawn
Feltner's license. The district court concluded that the parties
had agreed in the pretrial stipulation that, if Feltner were found
liable for copyright infringement, the number of works infringed
was 900, one for each of the programs Feltner aired after MCA
withdrew Feltner's license.
Rule 16.1E of the Local Rules of the Southern District of
Florida instructs parties to file a Joint Pretrial Stipulation no
later than five days prior to the pretrial conference. Rule 16.1E
provides that "[t]he pretrial stipulation shall contain ... [a]
concise statement of issues of law which remain for determination
by the court." Rule 16.1G further provides that "the pretrial
stipulation ... will control the course of the trial." We
previously have stated that we owe great deference to the trial
judge's interpretation and enforcement of pretrial stipulations.
See West Peninsular Title Co. v. Palm Beach County, 41 F.3d 1490,
1493 (11th Cir.1995).
In this case, Feltner and MCA agreed in their joint pretrial
stipulation that "[e]ach [of Feltner's] telecasts without MCA's
authority—totalling at least 900 in number—constitutes a separate
act of copyright infringement." In the statement of uncontested
facts, the parties agreed that Feltner's stations "continued to telecast MCA's programs after April 13, 1992 [the date MCA withdrew
Feltner's license to telecast the programs], on a total of at least
900 separate occasions." In the "statement of issues of law which
remain for determination," the parties did not list as a remaining
issue whether multiple airings of a single episode of a program
infringed one work or multiple works. The parties merely stated
generally that "what statutory damages shall be awarded in favor of
MCA under § 504(c) of the Copyright Act" remained to be determined.
Thus, despite agreeing to the fact that 900 acts of copyright
infringement had occurred, nowhere in the pretrial stipulation did
Feltner alert the district court to the specific legal issue of
whether the 900 infringements might include multiple broadcasts of
the same program that did not constitute separate "works" under
section 504(c).
Moreover, Feltner presented no evidence at trial that the 900
"separate act[s] of copyright infringement" he stipulated to in the
pretrial stipulation involved less than 900 infringements under
section 504(c) due to multiple airings of the same program.
Feltner failed even to raise this issue until his closing argument.
As the district judge properly pointed out after announcing his
findings, closing argument simply was too late to raise a new legal
issue for the first time. See Fehlhaber v. Fehlhaber, 681 F.2d
1015, 1030 (5th Cir. Unit B 1982) ("[A]n argument first raised in
a postjudgment motion is simply too late.").
In light of the pretrial stipulation in this case, the
deference we give a district court in interpreting a pretrial
stipulation, and Feltner's failure to offer evidence at trial on the issue, we find that the district court did not err in
interpreting the pretrial stipulation as not placing in issue the
number of works infringed. Although Feltner now argues on appeal
that 900 acts of copyright infringement is not the same as 900
works under section 504(c), the time to raise this issue was in the
issues of law section of the pretrial stipulation, or, at the very
latest, during his case at trial. Because Feltner failed to raise
the issue there, he cannot now raise it here.
Trial courts cannot be expected to try an issue that the
parties have not placed before it. Accordingly, the district court
did not err in refusing to reopen the case after it had announced
its findings to hear evidence on an issue not identified in the
pretrial stipulation. Accordingly, the district court's judgment
is AFFIRMED.
BRIGHT, Senior Circuit Judge, dissenting:
The district court assessed Feltner $9,000,000 in statutory
damages—$10,000 for each of the 900 occasions on which MCA's
programming was improperly aired. Because I believe that the
district court incorrectly assessed statutory damages for each
infringement (including repeat showings) rather than for each work
(i.e. individual episode) infringed, I would remand the case to the
district court for a correct determination of damages.
The court's opinion correctly observes that the text of
section 504(c)(1) of the Copyright Act and the case law
interpreting that Act make clear that the statute allows only one
award of statutory damages for each work infringed. Section
504(c)(1) provides: the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work,....
17 U.S.C. § 504(c)(1) (emphasis added).1 See Mason v. Montgomery
Data, Inc., 967 F.2d 135, 143-44 (5th Cir.1992) ("So if a plaintiff
proves that one defendant committed five separate infringements of
one copyrighted work, that plaintiff is entitled to only one award
of statutory damages...."); Walt Disney Co. v. Powell, 897 F.2d
565, 569 (D.C.Cir.1990) ("Both the text of the Copyright Act and
its legislative history make clear that statutory damages are to be
calculated according to the number of works infringed, not the
number of infringements.")
This court, however, finds this established legal standard
inapposite because of statements included in the pretrial
stipulation. The majority observes that Feltner presented no
evidence at trial that the 900 "showings" he stipulated to in the
pretrial stipulation amounted to less than 900 "works" due to
multiple telecasts of the same program. The majority contends that
because Feltner failed to raise this issue until after the close of
the evidence, he became estopped from raising the issue in the
1 The legislative history of section 504 provides:
A single infringer of a single work is liable for a single amount ..., no matter how many acts of infringement are involved in the action and regardless of whether the acts were separate, isolated, or occurred in a related series.
H.R.Rep. No. 1476, 94th Cong., 2d Sess., at 162 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5778. district court and from asserting error in that regard on appeal.2
The majority decision represents an erroneous interpretation of the
pretrial stipulation, unjustly shifts the burden of establishing
damages from the plaintiff to the defendant, and awards the
plaintiff damages to which it is not entitled under the law.
First, the issue of damages was properly before the district
court. One of the remaining issues of law specified by the
pretrial stipulation was "what statutory damages shall be awarded
in favor of MCA under § 504(c) of the Copyright Act." As developed
above, section 504(c) provides for one award of statutory damages
per work infringed. The first question subsumed in this issue is
thus what constitutes a "work" under the Copyright Act. Although
this sub-issue was not specifically raised in the pretrial
stipulation, the district court, and indeed this court on appeal,
properly addressed it as a necessary aspect of the statutory
damages claim. Having resolved this initial question by
determining that each episode constituted a work, the inquiry
shifted to how many works had been infringed. The district court,
however, held that this second sub-issue had not been properly
raised. To my mind, there exists no basis for determining that the
pretrial stipulation raised the first sub-issue but not the second.
Both are subsumed by the issue "what statutory damages shall be
awarded in favor of MCA under § 504(c) of the Copyright Act."
2 Feltner argues on appeal that he was surprised by the sudden close of the trial and that the district court erred by denying him the opportunity to present evidence on the issue of damages. Although this claim is not the basis of my dissent, I believe the majority should have addressed this alleged irregularity in the proceedings before summarily stating that Feltner "failed to offer evidence" on the damages issue. Second, the plaintiff, MCA, bears the burden of establishing
its right to damages. Once the district court determined that each
episode constituted a "work," it was MCA's obligation to establish
the number of different episodes improperly aired. MCA did not
carry this burden by the pretrial stipulation, and the district
court plainly erred in finding otherwise. The pretrial stipulation
stated only that there had been 900 unauthorized telecasts.
Contrary to the opinion of the court, at no point did the pretrial
stipulation state the number of "works" infringed, nor did it
provide the number of different episodes involved.3 Although 900
may have been a convenient number, it was not the correct number of
"works."4 It was MCA's obligation to establish the number of works
infringed. The district court should not have determined MCA's
failure to fully develop its damages claim in a manner favorable to
MCA and detrimental to the defendant.
3 In fact, what constituted a work was an issue before the district court and indeed before this court on appeal. MCA contended that each episode constituted a work, while Feltner maintained that each television series was a single work. Since the number of different episodes was irrelevant under Feltner's version of the case, he had no reason to develop those facts at trial. Once the district court determined that each episode constituted a work and announced that it would use the 900 infringements established by the pretrial stipulation as the basis of its award, Feltner argued that several of the showings were of the same episodes and thus constituted multiple infringements of a single work. See Tr. of Decision at 13-18. The district court held that the argument came too late and refused to accept evidence on the point. 4 During the hearing at which the district court orally made its judgment, the district court allowed Feltner to put evidence into the record concerning the number of the 900 showings which were repeat broadcasts of the same episodes. Feltner's statements indicated that at least 300 showings were repeats. See Tr. of Decision at 15-17. At $10,000 per infringement this amounts to over $3,000,000 in excess damages. In my view, a court should hold a party to the language of the
stipulation and nothing more. Feltner stipulated only to 900
telecasts of copyrighted material without MCA's authority, not to
900 works. Furthermore, the issues of law raised in the pretrial
stipulation concerned the amount of statutory damages to be
awarded. The $9,000,000 award is grossly unfair under these
circumstances. I dissent and would remand for a proper assessment
of statutory damages based on each work shown to be infringed.