230 F. Supp.2d 104 (2002) | Cited 0 times | D. Maine | October 30, 2002


Now before the Court is Defendants' Motion to Reconsider (Pleading No.19) the denial of Defendants' Motion to Dismiss. Defendants Motion toDismiss (Pleading No. 11) invokes Fed.R.Civ.P. 12(b)(1) and 12(b)(6).Plaintiffs timely objected to the Motion to Dismiss (Pleading No. 16) andnow object to the Court's reconsideration of the Motion to Dismiss(Pleading No. 22). After careful review and reconsideration of thepleadings filed with this Court to date, the Court will grant Defendants'Motion to Reconsider and, upon reconsideration, the Court finds thatDefendants' Motion to Dismiss should be granted.

I. Legal Standard for a Motion to Dismiss

When presented with a motion to dismiss, "the district court must takeas true the well-pleaded facts as they appear in the complaint, extendingthe plaintiff every reasonable inference in his favor." Medina-Claudiov. Rodríguez-Mateo, 292 F.3d 31, 34 (1st Cir. 2002) (citation andinternal punctuation omitted). The defendant is entitled to dismissalfor failure to state a claim only when the allegations are such that theplaintiff can prove no set of facts to support the claim for relief. SeeClorox Co. Puerto Rico v. Proctor & Gamble Commercial Co., 228 F.3d 24,30 (1st Cir. 2000) (citation and internal punctuation omitted); see alsoTobin v. University of Maine Sys., 59 F. Supp.2d 87, 89 (D.Me. 1999). Inaddition, an action may be dismissed pursuant to Rule 12(b)(1) when thecourt lacks jurisdiction over the subject matter of the action. It isthe plaintiff's burden to prove the existence of subjectmatterjurisdiction. See Aversa v. United States, 99 F.3d 1200, 1209 (1st Cir.1996). In ruling on a motion to dismiss for lack of subject matterjurisdiction under Fed.R.Civ.P. 12(b)(1), the district court mustconstrue the complaint liberally, treating all well-pleaded facts as trueand indulging all reasonable inferences in favor of the plaintiff. Seeid. at 1209-10 (citation omitted). When the jurisdictional facts aredisputed by a defendant, materials of evidentiary quality outside thepleadings may be offered to and considered by the court. See Valentin v.Hosp. Bella Vista, 254 F.3d 358, 363 (1st Cir. 2001).

II. Facts and Procedural History

Plaintiff Morgan, Inc. brought an action for copyright infringement andconversion against Defendants White Rock Distilleries, Inc. and TheMarketing Group. Complaint (Pleading No. 1). The Complaint alleges thatalthough the parties had an agreement with respect to the use of certainof Morgan, Inc.'s photographs, the Defendants were using Morgan, Inc.'sphotographs in an unauthorized advertising outside the scope of theiragreement. Id. ¶¶ 1, 18. Jurisdiction of the Court was alleged tobe based on the copyright infringement claim, 28 U.S.C. § 1338(a),and supplemental jurisdiction, 28 U.S.C. § 1367. Id. ¶ 3.

Instead of answering the Complaint, Defendants filed a Motion toDismiss, asserting that Morgan, Inc.'s copyright infringement claim wasdefective because it failed to allege the ownership of a copyrightregistration. See Defendants' Motion to Dismiss (Pleading No. 3).Morgan, Inc. responded, stating that the photographs to which it claimedownership were indeed registered with the copyright office. SeeOpposition to Defendants' Motion to Dismiss (Pleading No. 4). Referencedin, and attached to, Plaintiff's response were copies of two copyrightregistrations with the author and copyright owner stated to be MorganHowarth. See Opposition to Defendants' Motion to Dismiss, Exhibit A.Defendants replied that Plaintiff Morgan, Inc. failed to allege ownershipof the copyright registrations. See Reply to Plaintiff's Opposition toDefendants' Motion to Dismiss (Pleading No. 5). The next day, the Courtreceived a letter from Plaintiff's attorney stating that Morgan Howarthhad assigned his interest in the works at issue to Morgan Inc. andattaching a copy of an undated document entitled "Copyright Assignment."See Plaintiffs' Letter (Pleading No. 6). Also in letter form, Defendantsmoved to strike Plaintiff's letter and assignment, asserting that it wasexecuted after the action was commenced and, as such, was ineffective.See Defendants' Letter (Pleading No. 7).

The Court held a conference of counsel to determine the factssurrounding the undated assignment. After admitting that the assignmenthad been executed after Defendants' reply had been filed, Plaintiff'scounsel offered to file an amended complaint. See Transcript of June 6,2002, at 4. The Court agreed to allow Plaintiff to file an amendedcomplaint to clear up the factual record. See id. at 7. Shortlythereafter the First Amended Complaint was filed adding Morgan Howarth asa Plaintiff and, in addition to the copyright infringement claim,Plaintiffs asserted a breach of contract claim instead of the conversionclaim.

The Amended Complaint alleged that Morgan Howarth incorporated Morgan,Inc. in January 1999 to carry out his photography work. See AmendedComplaint (Pleading No. 8) ¶¶ 1, 8, 9. Since the formation ofMorgan, Inc. Mr. Howarth "has performed photography services for Morgan,Inc. as an employee of the company." Id. ¶ 10. The AmendedComplaint made no mention of the copyright assignment but, rather,asserted that Morgan, Inc. was the owner of the photography works atissue in this case under the work-for-hire doctrine. See id. ¶ 19.The Amended Complaint goes on to state that "Morgan Howarth filed thephotographs at issue with the United States Copyright Office and obtainedcopyright registration for the photographs" in the name of MorganHowarth. Id. ¶ 18; see also Opposition to Defendants' Motion toDismiss, Exhibit A. The Amended Complaint later refers to Morgan, Inc.and Morgan Howarth collectively as "Morgan." This amalgamated referenceis the predicate for Plaintiffs' ambiguous allegation that "Morgan owns avalid copyright in each of the photographs." Amended Complaint ¶35.

Defendants again filed a Motion to Dismiss, arguing that Mr. Howarthwas not the owner at the time the works were registered because under thework-for-hire doctrine, the works belong to the employer upon creationand, therefore, the registrations are invalid. See Defendants' Motion toDismiss Amended Complaint (Pleading No. 11). Plaintiffs responded thatMr. Howarth made a mistake when completing the registrations and thatsuch mistake does not make the registrations invalid. See Plaintiffs'Opposition to Defendants' Motion to Dismiss (Pleading No. 16) at 2-3. Inthe alternative, Plaintiff asserts that there is no requirement that theplaintiff filing suit have filed the copyright registration. See id. at4. Plaintiffs go on to make some arguments based on the unpleadedassignment. After Defendants filed their reply, the Court deniedDefendants' Motion to Dismiss. Defendants then moved to have the Courtreconsider its denial of the Motion to Dismiss. See Defendants' Motionto Reconsideration (Pleading No. 19).

III. Copyright Infringement Claim

The Copyright Act makes clear that copyright exists in all works ofauthorship regardless of whether the copyright for such work isregistered. Section 408(a) of the Copyright Act provides:

Registration Permissive. — At any time during the subsistence of the first term of copyright in any published or unpublished work in which the copyright was secured before January 1, 1978, and during the subsistence of any copyright secured on or after that date, the owner of copyright or of any exclusive right in the work may obtain registration of the copyright claim by delivering to the Copyright Office the deposit specified by this section, together with the application and fee specified by sections 409 and 708. Such registration is not a condition of copyright protection.

17 U.S.C. § 408(a) (emphasis added); see also M. Nimmer & D.Nimmer, 2 NIMMER ON COPYRIGHT § 7.16[A] (2002). Pursuant to §411 of the Federal Copyright Act, "no action for infringement of thecopyright in any work shall be instituted until registration of thecopyright claim has been made." 17 U.S.C. § 411(a). Thus, copyrightregistration is a jurisdictional prerequisite to the right of the holderto enforce the copyright in federal court. See, e.g., M.G.B. Homes v.Ameron Homes, 903 F.2d 1486, 1488 (11th Cir. 1990. It is only thecopyright owner that may apply for such registration. See17 U.S.C. § 408(a).1

The Amended Complaint alleges that "Morgan Howarth filed thephotographs at issue with the United States Copyright Office and obtainedcopyright registration for the photographs" in the name of MorganHowarth. Amended Complaint ¶ 18. The issue then becomes whetherMr. Howarth was the owner of the copyright in the subject photographs atthe time he registered them so that the registration had legal effect.See Arthur Rutenberg Homes v. Drew Homes, 29 F.3d 1529, 1532 (11th Cir.1994). The Amended Complaint states that "[p]ursuant to the work forhire doctrine, the copyrights in the photographs at issue belong toMorgan, Inc." Amended Complaint ¶ 19. Under the work-for-hiredoctrine, Morgan, Inc. was the author and owner of the works from themoment of their creation. See 17 U.S.C. § 201(b) ("In the case of awork made for hire, the employer . . . is considered the author . . .,and, unless the parties have expressly agreed otherwise in a writteninstrument signed by them, owns all of the rights comprised in thecopyright."). Therefore, based on the allegations in the AmendedComplaint the copyright registration by Mr. Howarth, in the name of Mr.Howarth, who was not the author or owner of the copyright at the time ofthe registration, has no legal effect.

Plaintiffs attempt to spin this as a misstatement or error on theregistration application, as a result of Mr. Howarth completing thecopyright registration documents without the assistance of counsel.Plaintiffs assert that inaccuracies in a copyright certificate are ofsignificance only in situations involving allegations of intent todefraud the copyright office which, Plaintiff contends, was not the casehere. However, the Amended Complaint does not assert that Mr. Howarthmade a mistake in completing the registration forms and, therefore,although asserted to have been a error by Plaintiffs' counsel in amemoranda, the Court will not assume this unplead fact to be true.

Indeed, this case presents a complicated pleading history replete withevasions and artful omissions that lead the Court not to believe thatMr. Howarth made any mistake when completing the copyrightregistrations. First, given that to date Plaintiffs have founded theircopyright infringement claim on three different factual theories ofcopyright ownership and registration, the Court does not believe that theregistration contains any misstatement. Moreover, the Court finds theinstructions on the registration documents quite clear with respect towho the owner is when the work is created by an employee and specificallyasking if this was a work "made for hire." See Opposition to Defendants'Motion to Dismiss, Exhibit A ("Under the law the "author" of a "work madefor hire" is generally the employer, not the employee (seeinstructions). For any part of this work that was "made for hire" check"Yes" in the space provided, give the employer (or other person for whomthe work was prepared) as "Author" of that part, and leave the space fordates of birth and death blank."). Finally, although Plaintiffs cite tothe section of the copyright statute that permits "supplementaryregistration" to correct mistakes in the registration, there is noevidence in the record that they have filed a supplemental registrationnor have they offered to make such supplemental registration to correctthe alleged error. See 17 U.S.C. § 408(d).

Based on the allegations in the Amended Complaint, Morgan, Inc., thelawful ownerof the copyright, did not register the copyrights. Mr.Howarth registered the copyrights, but again, based on the allegations inthe Amended Complaint, he was not the lawful owner when he did so. Therebeing no lawful registrations of the copyrights at issue, Plaintiffs'copyright infringement claim must be dismissed for lack of subject matterjurisdiction. Because the Court is without jurisdiction to hear thefederal copyright claim, the Court will not exercise supplementaljurisdiction over Plaintiffs' breach of contract claim.

Defendants request that the dismissal be with prejudice. The Courtfinds that the dismissal should be without prejudice since a copyrightowner may register his claim at any time during the life of thecopyright. See 17 U.S.C. § 408(a).

Accordingly, the Court ORDERS that Defendants' Motion forReconsideration (Pleading No. 19) be, and it is hereby, GRANTED. TheCourt FURTHER ORDERS that Defendants' Motion to Dismiss (Pleading No. 11)be, and it is hereby, GRANTED. Defendants request for attorneys' fees isDENIED.

1. In addition to the language of the Copyright Act itself, the Courtfinds that the instructions on the copyright registrations filed in thiscase make it clear that based on the allegations in the Amended Complaintthat the owner of the copyright at the time of the registrations wasMorgan, Inc. The "NOTE" that prefaces section 2 of the copyrightregistration asking for the "name of the author" states:

Under the law the "author" of a "work made for hire" is generally the employer, not the employee (see instructions). For any part of this work that was "made for hire" check "Yes" in the space provided, give the employer (or other person for whom the work was prepared) as "Author" of that part, and leave the space for dates of birth and death blank.

Opposition to Defendants' Motion to Dismiss, Exhibit A.

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