Meisner Brem Corp. v. Mitchell, et al CV-03-057-JM 04/15/04 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Meisner Brem Corporation
v. Civil No. 03-057-JM Opinion No. 2004 DNH 067 Eric Mitchell, et al.
O R D E R
Meisner Brem Corporation ("MBC") brought this copyright
infringement action naming Eric Mitchell ("Mitchell"), Richard
Ladd ("Ladd"), Eric Mitchell & Associates, Inc. ("EMA"), and
Harvey G. Blettner ("Blettner") as defendants. MBC alleges that
Mitchell, Ladd and EMA produced, recorded, utilized, and placed
on the market survey plans that are substantially similar to
MBC's copyrighted work. MBC further alleges that defendant
Blettner induced, caused and materially contributed to that
infringement. MBC seeks compensatory damages and a permanent
injunction enjoining the defendants from further infringement.
Defendants Ladd, Mitchell and EMA filed answers to the
complaint denying MBC's allegations of material fact and raising
affirmative defenses based on implied nonexclusive license, the
doctrine of merger, and express retroactive license. Since
defendant Blettner did not file an answer or other responsive pleading, the Clerk of Court entered a default as to Blettner on
April 23, 2003 (document no. 10). The other defendants
subsequently moved for summary judgment under Fed. R. Civ. P. 56
(document nos. 11 and 12). MBC filed an objection.
As discussed herein, the Court finds that defendants Ladd,
Mitchell and EMA have demonstrated that there is no genuine issue
of material fact as to their defense that they cannot be held
liable on MBC's copyright infringement claim because MBC granted
the owner of the project at issue a nonexclusive license to use
MBC's subdivision plans, which extended to defendants' use of the
plans. Therefore, the motions for summary judgment are granted.
Standard of Review
Summary judgment is appropriate only "if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law." Fed. R. Civ. P.
56(c); see Lehman v. Prudential Ins. Co. of Am., 74 F.3d 323, 327
(1st Cir. 1996). A genuine issue is one "that properly can be
resolved only by a finder of fact because [it] . . . may
reasonably be resolved in favor of either party." Anderson v.
2 Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) . A material fact
is one that affects the outcome of the suit. See id. at 248.
"Summary judgment is a procedure that involves shifting
burdens between the moving and the nonmoving parties." LeBlanc
v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993). The
moving party bears the initial burden of establishing that there
is no genuine issue of material fact. See Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986) . If that burden is met, the
opposing party can avoid summary judgment only by providing
properly supported evidence of disputed material facts that would
reguire trial. Id. at 324. Evidence that is "merely colorable,
or is not significantly probative" will not preclude summary
judgment. Anderson, 477 U.S. at 249-50 (citation omitted); see
also, LeBlanc, 6 F.3d at 842 ("the nonmoving party must establish
a trial-worthy issue by presenting enough competent evidence to
enable a finding favorable to the nonmoving party.").
On a motion for summary judgment, the court construes the
record in the light most favorable to the non-moving party,
resolving all inferences in its favor, and determines whether the
moving party is entitled to judgment as a matter of law. Carroll
v . Xerox Corp., 294 F.3d 231, 237 (1st Cir. 2002) . The court
3 does not credit "conclusory allegations, improbable inferences,
and unsupported speculation." Medina-Munoz v. R.J. Reynolds
Tobacco C o ., 896 F.2d 5, 8 (1st Cir. 1990). Applying this
standard, the facts are recited below.
Background Facts
MBC is engaged in the business of providing civil
engineering and surveying services to real estate owners. MBC
prepares subdivision design, roadway, and septic system plans.
Mitchell is engaged in the business of providing civil
engineering and surveying services through EMA. Ladd, sued only
in his individual capacity, is the president of RSL Layout and
Design, Inc. ("RSL"), which provides surveying services.
On or about May 14, 1998, MBC prepared a Proposal and
Professional Service Agreement for the design and preparation of
plans for a residential subdivision development on a parcel of
real estate located off Cluff Road in Salem, New Hampshire. Ex.
C to Pl.'s Objection and Ex. B to the Affidavit of Paul M.
DeCarolis, Esg. ("DeCarolis Aff."). Shortly thereafter,
defendant Blettner, who was then a joint owner of the real
property, engaged MBC to provide engineering and surveying
services for a development referred to as the "Cluff Estates"
4 project (hereinafter the "Project").1
MBC's General Terms and Conditions, Attachment A to the
Professional Service Agreement, provides in paragraph 14 that:
All documents, including Drawings, Specifications, estimates, field noted and other data, prepared or furnished by [MBC] (and [MBC] independent sub consultants) pursuant to this Agreement are instruments of service in respect of the Project and [MBC] shall retain an ownership and property interest therein whether or not the project is completed. Client may make and retain copies for information and reference in connection with the use and occupancy of the Project by the Client and others; however, such documents are not intended or represented to [sic] suitable for reuse by Client or others on extensions of the Project or on any other Project. Any reuse without written verification or adaptation by [MBC] for the specific purpose intended will be at Client's sole risk and without liability or legal exposure to [MBC] or to [MBC] sub consultants, and Client shall indemnify and hold harmless [MBC] and [MBC] sub consultants from all claims, damages, losses and expenses, including attorneys' fees arising out of or resulting therefrom. Any such verification or adaptation will entitle [MBC] to further compensation at rates to be agreed upon by Client and [MBC].
Pl.'s Objection, Ex. C.
Kurt Meisner ("Meisner"), the Vice-President of MBC,
testified in a preceding litigation that MBC contracted to
1The parties do not specify when MBC was engaged, but there is no dispute that an agreement was reached. The Professional Service Agreement attached as Exhibit C to Plaintiff's Objection and as Exhibit B to the Decarolis Affidavit indicates that the total contract amount was $28,800 and that a retainer of $3,900 was paid on June 16, 1998.
5 provide a conceptual plan for the Project and a definitive plan,
which "would be the preliminary final sub-division plans as the
[town] planning board would see them." Deposition of Kurt
Meisner, April 9, 2002, in the matter of Meisner Brem Corp. v.
Blettner, et al., Rockingham Superior Court Docket No. Ol-C-29
("Meisner Dep.") at 45-46, Decarolis Aff., Ex. A. MBC produced,
among other things, several conceptual plans for the subdivision.
Affidavit of Kurt Meisner dated December 29, 2003 ("Meisner
Aff."), 55 7-10, attached to Pl.'s Objection as Ex. B.
MBC's subdivision plans for the Project were submitted to
the Salem Planning Board for approval on or about February 16,
1999. See Letter from Jeffrey A. Brem to Michael Lyons, Chairman
of the Salem Planning Board, dated February 18, 2003, attached as
Ex. A to the Affidavit of Michael S. Owen, Esg. ("Owen Aff.").
Based on MBC's engineering drawings for the Project, the town
planning board conditionally approved the plan for the Project in
the summer of 2000. Meisner Aff., 5 14.; Owen Aff., Ex. A. MBC
prepared all of the reports and documents necessary to gain all
of the necessary permits and approvals from state agencies and
enabled the Project to fulfill all of the town engineer's
conditions for final approval of the subdivision plans. Meisner
6 Aff., 55 17-18.
While MBC was preparing the final engineering documents for
the Project, MBC and the owners of the property reached an
impasse over the payment of MBC's fees. Id., 5 19. In or about
November 2000, Blettner terminated MBC and refused to pay
anything further for its services.
In December 2000, the owners of the property hired Mitchell
and Ladd and provided them copies of MBC's subdivision plans.
RSL re-staked Cluff Road because Blettner's contractors could not
match the location of the center line of the road staked by MBC
with the lot lines and other monuments and landmarks reflected in
the plans. Deposition of Richard S. Ladd, May 23, 2002 in the
matter of Meisner Brem Corp. v. Blettner, et al., Rockingham
County Superior Court Docket No. Ol-C-29 ("Ladd Depo.") at 5. 17-
18, Decarolis Aff., Ex. C. Ladd testified that RSL recreated the
surveying information for the entire subdivision in order to
place the road after MBC refused to provide information Ladd
needed to resolve what he considered to be a discrepancy in the
road layout. Id. at 5. 21-24; 37.
MBC learned of Mitchell's and Ladd's involvement with the
Project when MBC was contacted by Ladd. Meisner Aff., 5 22. MBC
7 informed Ladd that MBC's plans were protected by copyright,2 that
Ladd did not have MBC's permission to use the plans, and that
Ladd's use of the plans should cease immediately. Id., 5 23.
MBC informed Ladd that it was still working on the subdivision,
and that it had not been paid for its work. Id., 5 24.
RSL and Mitchell prepared the final engineering documents
reguired for final approval, which are referred to as mylar
recording documents. Id., 5 21. The RSL/Mitchell plans received
final approval from the Salem Planning Board. Before the
RSL/Mitchell plans were recorded, MBC brought this copyright
infringement action on February 13, 2003. MBC notified the
successor to the original Project owners that the plans could not
be recorded because the plans were the subject of this lawsuit.
See Letter from Michael D. Hatem, Esg. to John D. Mullen dated
April 2, 2003, attached as Exhibit D to the Affidavit of Michael
Owen ("Owen Aff."). As a result, the owner asked the town not to
record the plans. See Letter from John D. Mullen to Ross A.
Moldoff, Planning Director of the Town of Salem, dated March 19,
2003, Owen Aff., Exhibit C. On or about June 16, 2003, however.
20n April 30, 2001, MBC received a certificate of registration from the United States Copyright Office for technical drawings of subdivision plans entitled "Cluff Estates." MBC executed a release agreement granting the owner permission to
record the RSL/Mitchell plans in exchange for a payment of
$25,000. PI. Obj., Ex. D.
_____ In their defense of this lawsuit, defendants deny that they
copied MBC's plans and further deny that their plans are
substantially similar to MBC's. Defendants contend that they
prepared new plans for the subdivision based on a new and
original survey because they considered the work done by MBC
flawed and unusable. For purposes of the motions for summary
judgment, however, defendants argue that MBC's copyright
infringement claims fail based on their affirmative defenses.
Discussion
A. Implied Nonexclusive License
While transfers of copyright must be made in writing under
17 U.S.C. § 204(a), it is well-established that a copyright owner
may orally grant a nonexclusive license where copyright ownership
has not been transferred. John G. Danielson, Inc. v. Winchester-
Conant Props., 322 F.3d 26, 40 (1st Cir. 2003). A nonexclusive
license may also be implied from conduct that indicates the
copyright owner's intent to allow a licensee to use the
copyrighted work. Id. "Uses of the copyrighted work that stay within the scope of a nonexclusive license are immunized from
infringement suits." Id. (citing Graham v. James, 144 F.3d 229,
236 (2d Cir. 1998)). The party claiming the protection of a
license has the burden of proving the existence of a license.
Danielson, 322 F.3d at 40 (citing Bourne v. Walt Disney Co., 68
F .3d 621, 631 (2d Cir. 1995)).
The analytical framework for determining whether an implied
license exists has three parts. Danielson, 322 F.3d at 41
(citing Effects Assoc., Inc., v. Cohen, 908 F.2d 555, 558-59 (9th
Cir. 1990)). First, the licensee must have reguested the
creation of the work. Id. Second, the licensor must have
created and delivered that work to the licensee. Id. And third,
the licensor intended that the licensee distribute the work. Id.
The copyright owner's intent is the "touchstone" for finding that
an implied license exists. I_d. at 40.
In the instant case, the first two prongs of the three-part
analytical test have been satisfied in defendants' favor. There
is no dispute that MBC created subdivision plans for the Project
at defendant Blettner's reguest. Those plans were delivered to
the Project owners, who submitted copies of the plans to the Town
of Salem for conditional approval, and who later provided copies
10 of the plans to the defendants.
MBC's assertion that the Project owners did not fully pay
for MBC's subdivision plans does not affect the implied license
analysis. There is no evidence that full payment was a
contractual precondition for MBC's grant of a license. See
I.A.E., Inc. v. Shaver, 74 F.3d 768, 778 (7th Cir. 1996)
(rejecting plaintiff's argument that an implied license "did not
spring into existence" because only half the contract sum was
paid); Effects Assoc., 908 F.2d at 559 n.7 (refusing to construe
payment in full as a condition precedent to implying a license
where such a condition was not reguired by plain, unambiguous
contract language). The Court further finds inconseguential
MBC's assertion that it did not deliver the "final set" of
subdivision plans to the Project owners. MBC's copyright
infringement claim pertains to the plans that were actually
provided to the Project owners by MBC, not to those plans
considered to be the final set. Therefore, the only issue that
reguires further discussion is whether MBC intended that the
Project owners would use MBC's plans and distribute them for use
by others working on the Project.
The "intent" prong of the three-part test for determining
11 whether an implied nonexclusive license exists itself has at
least three considerations. Danielson, 322 F.3d at 41.
(1) whether the parties were engaged in a short-term discrete transaction as opposed to an ongoing relationship; (2) whether the creator utilized written contracts, such as the standard AIA contract, providing that copyrighted materials could only be used with the creator's future involvement or express permission; and (3) whether the creator's conduct during the creation or delivery of the copyrighted material indicated that use of the material without the creator's involvement or consent was permissible.
Id. (guoting Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284
F.3d 505, 516 (4th Cir. 2002)). In making its determination, the
Court does not focus on the subjective intent of the putative
licensor, but rather makes an objective inguiry into the facts
that manifest contractual intent. Danielson, 322 F.3d at 42.
1. Short-term Discrete Transaction or Ongoing Relationship
MBC contends that it had an ongoing relationship with the
Project owners because MBC was engaged in all stages and aspects
of the design of the subdivision. Pi. Obj., 5 42. MBC claims
that its involvement on the Project lasted approximately one and
one-half years. Id. Defendants neither dispute MBC's assertions
as to extent and length of MBC's participation in the Project
prior to being terminated, nor have they put forth any evidence
that supports a finding that MBC's engagement should be
12 considered short-term. Therefore, the Court finds that the
length of the relationship between MBC and the Project owner in
this case weighs in MBC's favor since it intended to remain
involved in the job.
2. Notice of Use Restriction
A second consideration in determining a copyright owner's
intent to grant a nonexclusive license is whether the owner used
written contracts providing that copyrighted materials could only
be used with the creator's future involvement or express
permission. After reviewing the evidence in the record, the
Court finds that the contract language used here weighs heavily
in the defendants' favor.
MBC concedes, as it must, that the written contracts did
not expressly state that the copyrighted plans could only be used
with the creator's future involvement. Pi. Obj., 5 46. Indeed,
the contract language used recognizes that the Project owner
might use MBC's subdivision plans without MBC's involvement.
Paragraph 14 of the General Terms and Conditions, included as
Attachment A to the Professional Service Agreement, provides that
the Client [Project owners] could "make and retain copies" of all
documents created by MBC "for information and reference in
13 connection with the use and occupancy of the Project by the
Client and others." See MBC General Terms and Conditions, 5 14,
Pi. Obj., Ex. C (emphasis added). That MBC was aware that others
working on the Project would use its documents is further
evidenced in the following sentence where MBC warned that "such
documents are not intended or represented to [sic] suitable for
reuse by Client or others on extensions of the Project or on any
other Project." Id. (emphasis added). MBC further warned in the
same paragraph that "[a]ny reuse without written verification or
adaptation by [MBC] for the specific purpose intended will be at
Client's sole risk and without liability or legal exposure to
[MBC] or to [MBC] sub consultants, and Client shall indemnify and
hold harmless [MBC] and [MBC] sub consultants from all claims,
damages, losses and expenses, including attorneys' fees arising
out of or resulting therefrom." Id. The contract language used
in this case is nearly opposite that used in cases where courts
have held that a nonexclusive license to use copyrighted
architectural plans did not exist. See Danielson, 322 F.3d at 41
(architect and client signed standard AIA contract providing that
the plans "shall not be used . . . for other projects, for
additions to this Project, or for completion of this Project by
14 others . . . except by agreement in writing and with appropriate
compensation"); Nelson-Salabes, 284 F.3d at 516 (plaintiff
architectural firm submitted contracts to client that contained
standard AIA prohibition against use of its drawings without the
plaintiff's future involvement or consent); Johnson v. Jones, 149
F.3d 494, 498-500 (6th Cir. 1998) (AIA contracts provided by
architect showed intent not to grant license for use of the
architect's work by others without express permission).
The facts of the instant case are analogous to those in Foad
Consulting Group, Inc. v. Musil Govan Azzalino, 270 F.3d 821 (9th
Cir. 2001), where an engineering firm that created a plot plan
for a shopping center project sued a developer and a firm hired
by the developer alleging copyright infringement. There the
court found that the inclusion of an indemnification clause
similar to that used by MBC, as well as the absence of any
prohibition in the contract against modification by others,
evidenced the plaintiff's intent to grant an implied license to
hire others to create derivative works for the purpose of
completing the project. Id. at 830. Likewise here, the language
used by MBC evinces an intent to grant the Project owners
permission to use MBC's subdivision plans to complete the
15 Project, and to except MBC from any liability that might arise
from any reuse or adaptation of the plans without MBC's
involvement. The Court finds the language used in the written
contracts in this case is dispositive as to the existence of an
implied nonexclusive license to the Project owner to use MBC's
subdivision plans, with others, in completing the Project.
Therefore, the Court further finds that the defendants are immune
from copyright infringement claims arising from their use of the
plans to complete the Project. See Danielson, 322 F.3d at 40.
3. Creator's Conduct During Creation or Delivery
A third consideration in determining the copyright owner's
intent is whether the copyright owner's conduct during the
creation or delivery of the copyrighted material indicated that
use of the material without the creator's involvement or consent
was permissible. The Court finds that the contract language
discussed above is determinative of this issue. Paragraph 14 of
MBC's General Terms and Conditions provided that the Project
owner could make and retain copies of MBC for use by the Project
owner and others in completion of the Project. While there is no
dispute that MBC objected when it learned that the defendants had
replaced it on the Project, MBC had already expressly granted the
16 Project owner permission to allow others to use MBC's documents
in completing the Project. MBC has not pointed to any evidence
in the record that demonstrates that the Project owner agreed
that MBC would be the only entity providing surveying and
engineering services on the Project, or that MBC evinced any
intent to contract for such a condition in granting the Project
owner permission to use its plans. MBC's subjective intent,
expressed after it was terminated from the Project, is
insufficient to carry the day.
In sum, the Court finds that an implied nonexclusive license
exists that extended to defendants' work on the Project. Where
the issue is the scope of the license, and not its existence, the
copyright owner bears the burden of proving that defendant's use
was unauthorized. Graham, 144 F.3d at 236. Here, MBC has not
offered any evidence that raises a genuine issue of fact as to
whether the defendants exceeded the scope of the implied
nonexclusive license. Accordingly, the Court finds that the
defendants are entitled to summary judgment on MBC's copyright
infringement claim.
B. Doctrine of Merger and Grant of Express Retroactive License
Defendants have further argued that they are entitled to
17 summary judgment based on the affirmative defenses of doctrine of
merger, and because they contend that MBC granted the succeeding
Project owner a retroactive license that should be construed to
apply to the defendants. Because the Court finds that the
defendants are entitled to summary judgment based on the
affirmative defense of implied nonexclusive license, the Court
does not address these alternative arguments.
Conclusion
For the reasons set forth above, defendants' motions for
summary judgment (document nos. 11 and 12) are granted. The
Clerk of Court is directed to dismiss defendants Eric Mitchell,
Richard Ladd and Eric Mitchell & Associates, Inc., from the case.
A damages hearing shall be scheduled as to defendant Harley G.
Blettner, against whom a default was previously entered (document
No. 10) .
SO ORDERED.
James R. Muirhead United States Magistrate Judge
Date: April 15, 2004
cc: Michael D. Hatem, Esg. Paul M. DeCarolis, Esg. Michael S. Owen, Esg.