Vestron, Inc. v. Home Box Office Inc., and Hbo Video, Inc.

839 F.2d 1380, 6 U.S.P.Q. 2d (BNA) 1016, 1988 U.S. App. LEXIS 2202, 1988 WL 12963
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 24, 1988
Docket87-6229
StatusPublished
Cited by54 cases

This text of 839 F.2d 1380 (Vestron, Inc. v. Home Box Office Inc., and Hbo Video, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vestron, Inc. v. Home Box Office Inc., and Hbo Video, Inc., 839 F.2d 1380, 6 U.S.P.Q. 2d (BNA) 1016, 1988 U.S. App. LEXIS 2202, 1988 WL 12963 (9th Cir. 1988).

Opinion

HUG, Circuit Judge:

This case comes to us on appeal from the district court’s final order dismissing the action for lack of subject matter jurisdiction. The appeal was heard on an expedited basis. We concluded that jurisdiction existed under the Federal Copyright Act, 17 U.S.C. § 101 et seq. (1982), and therefore reversed and remanded to the district court. We issued an unpublished order to this effect immediately to expedite the district court’s consideration of Vestron’s request for a preliminary injunction, and indicated that an opinion would follow. This opinion provides the analysis for the earlier order. The question before us is whether a complaint that pleads a claim for copyright infringement properly invokes federal jurisdiction even though the defendant admits the allegedly infringing use and disputes only the issue of contractual ownership of the copyright. FACTS

Vestron, the plaintiff and appellant, alleges that it owns the exclusive American *1381 videocassette distribution rights to two films, Hoosiers and Platoon, and that HBO has infringed on these rights. Vestron obtained the videocassette rights to both films from their producer, Hemdale Film Corporation and Hemdale Video Corporation (“Hemdale”), through two contracts executed in August 1985 and April 1986. After the films were released for theatrical distribution and their success was evident, Hemdale and Vestron had a dispute that brought the validity of their contracts into question. Hemdale notified Vestron that it was terminating the contracts, and that Vestron no longer held the videocassette rights. Hemdale and Vestron then brought several contract actions in state court, still pending, that have no bearing on the question before us. Subsequently, Hemdale sold the exclusive videocassette rights to both films to HBO, the defendant and appellee here. HBO manufactured and began distribution of videocassettes of Hoosiers and Platoon, and Vestron responded by bringing this action in federal court against HBO’s infringing use. STANDARD OF REVIEW

The district court granted HBO’s Fed.R. Civ.P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction and denied Ves-tron’s motion for a preliminary injunction. We review the district court’s dismissal for lack of subject matter jurisdiction de novo. McIntyre v. McIntyre, 771 F.2d 1316, 1317 (9th Cir.1985). Because the district court dismissed the action before reaching the merits, our review is confined to the jurisdictional issue.

ANALYSIS

In order for Vestron’s action to invoke federal subject matter jurisdiction, it must arise under federal copyright law. We note that federal courts have exclusive jurisdiction over actions that arise under federal copyright law. 28 U.S.C. § 1338(a) (1982). Although the action clearly involves a copyright, this fact alone does not satisfy federal jurisdictional requirements. Effects Assocs., Inc. v. Cohen, 817 F.2d 72, 73 (9th Cir.1987). For example, where a suit is for a naked declaration of copyright ownership without a bona fide infringement claim, federal courts decline jurisdiction. Topolos v. Caldewey, 698 F.2d 991, 994 (9th Cir.1983). However, that is not the case here.

We determine whether an action arises under federal copyright law by reference to the well-pleaded complaint rule. “[W]hether a case is one arising under ... a law ... of the United States ... must be determined from what necessarily appears in the plaintiff’s statement of his own claim in the [complaint], unaided by anything alleged in anticipation or avoidance of defenses....” Franchise Tax Bd. of California v. Construction Laborers Vacation Trust, 463 U.S. 1, 10, 103 S.Ct. 2841, 2846, 77 L.Ed.2d 420 (1983) (quoting Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218 (1914)). Under this rule,' Vestron’s complaint is dispositive initially of the issue of subject matter jurisdiction. Moreover, assertion of defenses by HBO, or anticipation of those defenses by Vestron, does not defeat jurisdiction. Effects Assocs., 817 F.2d at 73. If Vestron’s complaint makes out a bona fide infringement claim, then the federal court has jurisdiction.

We have settled on Judge Friendly’s formulation of copyright jurisdiction law as our test to determine jurisdiction in cases such as this one: “[A]n action arises under the federal copyright laws ‘if and only if the complaint is for a remedy expressly granted by the Act, ... or asserts a claim requiring construction of the Act, ... or, at the very least and perhaps more doubtfully, presents a case where a distinctive policy of the Act requires that federal principles control the disposition of the claim.’ ” Effects Assocs., 817 F.2d at 73 (quoting T.B. Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir.1964) (Friendly, J.), cert. denied, 381 U.S. 915, 85 S.Ct. 1534, 14 L.Ed.2d 435 (1965)). Our test sets forth three independent grounds for sustaining federal jurisdiction in copyright cases. If any of these three grounds is satisfied, the federal courts have jurisdiction.

We need go no further than the first of the three grounds to find that Vestron’s complaint satisfies our pleading requirements and, therefore, that it confers juris *1382 diction on the district court. The complaint makes out an infringement claim and seeks remedies expressly created by federal copyright law. Vestron alleges its ownership of the exclusive rights to make and distribute videocassettes of Hoosiers and Platoon. Vestron alleges, with specificity, unauthorized acts by HBO of copying and distributing videocassettes of the films. Finally, Vestron seeks statutory relief provided by 17 U.S.C. §§ 502 (injunction), 504 (damages and profits), and 505 (costs and attorneys’ fees). Under the well-pleaded complaint rule, these allegations are sufficient to establish federal jurisdiction.

The fact that Vestron claims ownership of the copyrights through a contested contract governed by state law is not fatal to federal jurisdiction. It is well-settled that “[t]he beneficial owner of a copyright ... is entitled to establish the facts supporting his claim of beneficial ownership, even though that may require interpretation of a contract.” Topolos, 698 F.2d at 994.

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839 F.2d 1380, 6 U.S.P.Q. 2d (BNA) 1016, 1988 U.S. App. LEXIS 2202, 1988 WL 12963, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vestron-inc-v-home-box-office-inc-and-hbo-video-inc-ca9-1988.