Petition for Writ of Certiorari — Feltner v. MCA Television, Ltd.

Supreme Court brief1997

Ask Donna

What actually matters in this document.

Text

SUpremé Court, U.S.

FILED

' 961070 JAN 21997

OFFICE OF THE CLERK

IN THE

Supreme Court of the Anited States

October Term, 1996

C. ELVIN FELTNER, JR.,

Petitioner,

MCA TELEVISION, LTD.,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Eleventh Circuit

PETITION FOR WRIT OF CERTIORARI

H. Scott Hecker, Esq. Richard I. Chaifetz,* Esq.

Philip L. Schwartz, Esq. 9194-B Red Branch Rd

517 Southwest First Ave. Columbia, MD 21045

Fort Lauderdale, FL 33301 (301) 596-5409

(954) 523-3811

*Counsel of Record

_— =

QUESTIONS PRESENTED

I. Whether the decision of the Court of Appeals for the

Eleventh Circuit that a district court has federal copyright

jurisdiction when a party who has contracted to license a

copyrighted work and has a contract dispute with the

decisions of other U.S. Courts of Appeals?

Il. Whether it is possible for a party who has licensed a

copyrighted work, breached the contract, and continued to

display the work to willfully infringe the copyright for

purposes of an award of statutory copyright damages, 17

U.S.C. §504(c)(2), when another U.S. Court of Appeals has

described the issue of whether such conduct even constitutes

infringement as “a complex issue in a ‘murky’ area?”’

III. Whether the decision of the Court of Appeals for the

Eleventh Circuit that for purposes of statutory damages under

the Copyright Act, 17 U.S.C. §504(c)(1), the episodes of a

television series constitute separate works conflicts with

decisions of other U.S. Courts of Appeals?

IV. Whether the decision of the Court of Appeals for the

Eleventh Circuit which affirmed an award of multiple awards

of statutory damages per work infringed conflicts with a

decision of another U.S. Court of Appeals?

V. Whether the Court of Appeals for the Eleventh Circuit

acted contiary to F.R.C.P. Rule 52(a) and decisions of other

Courts of Appeals by not remanding to the District Court to

explain the basis of its award of $10,000 Per Intringement?

‘Schoenberg v. Shapolsky Publishing Co.,971 F.2d 926, 931 (2d Cir. 1992)

PARTIES TO THE PROCEEDING

C. E. Feltner, Jr. - Defendant/Petitioner

MCA Television, Ltd. - Plaintiff/Respondent

Krypton International Corporation

Krypton Broadcasting Corporation

Krypton Broadcasting of Jacksonville, Inc.

Krypton Broadcasting of Fort Pierce, Inc.

Krypton Broadcasting of Birmingham, Inc.

TABLE OF CONTENTS

ce NF NG sims i

Parties to the Proceeding..................... li

ES ce a ili

SE ae Vv

Petition for a Writ of Certiorari ................ l

eS 1

Statement of Jurisdiction ................ 2

co _ 2

I ce 4

Reasons for Granting the Writ ............ 8

I. The decision of the Court of Appeals for the

Eleventh Circuit that a district court has federal

subject matter copyright jurisdiction when a party

who has contracted to license a copyrighted work

and has a contract dispute with the copyright owner

continues to display the work conflicts with

decisions of other U.S. Courts of Appeais....... 8

Ii. A party which has contracted to license a

copyl.ghted work, breached the contract, and

continued to display the work may not be found to

have willfully infringed the copyright for purposes of

an award of statutory copyright damages, 17 U.S.C.

§504(c)(2), because another U.S. Court of Appeals

has described the issue of whether such conduct even

constitutes infringement as “a complex issue in a

EEE SE tant. he i ee TR ct 12

Ill. The decision of the Court of Appeals for the

Eleventh Circuit that for purposes of statutory

damages under the Copyright Act, 17 U.S.C.

§504(c)(1), the episodes of a television series

constitute separate works conflicts with a decision of

another U.S. Court of Appeals .............. 14

IV. The decision of the Court of Appeals for the

Eleventh Circuit that petitioner waived the statutory

limit of one award of statutory damages per work

infringed conflicts with a decision of another U.S.

COMit GF ROGER «5 < 0kGS an Sy SOS ss 17

V. The Court of Appeals fcr the Eleventh Circuit acted

contrary to F.R.C.P. 52(a) and decisions by other

courts of appeals by not remanding to the district

court to explain the basis of its award of $10,000 per

RS re ripe Lara be eae yey 20

CAE Ce ee EE EE ees 23

Appendix:

July 26, 1996 Decision of Court of Appeals ........ la

October 7, 1996 Order Denying Petition for Rehearing . 15a

October 18, 1994 Transcript of Oral Decision of District

Pe ery rr er ore oe 17a

March 2, 1995 Findings of Facts and Conclusions of law

a a ee oe eae 32a

March 6, 1995 Order Correcting Findings of Fact and

a | a ae ere nee 40a

CASES PAGES

Baptiste v. Khoury, 910 F.Supp. 277 (W.D.La. 1996) .

Columbia Pictures Television, Inc. v. Krypton

International Corp., (U.S. Court of Appeals for the

Ninth Circuit, Case No. 94-55816) ........ 12,

Fantastic Fakes, Inc. v. Pickwick International, Inc..,

661 F.2d 479 (5th Cir. RRA peeps. pace

Featherstone v. Brash, 345 F.2d 246 (10th Cir. 1965)

Gamma Audio & Video, Inc. v. Ean-Chea, 11 F.3d 1106

Gere OO pcos sc ec ue 14, 15, 16,

Hanna-Barbera Productions v. Screen Gems-EMI Music,

829 F.Supp. 67 (S.D.N.Y. Ee oo ta

Jobete Music v. Media Broadcasting Corp., 713 F. Supp.

EPO G eee PPD occ chic ee oe

Living Music Records v. Moss Music Group, 827 F.Supp.

PPT aE MO cae ee

Louis Vuitton, S.A. v. Lee, 875 F.2d 584 (7th Cir. 1989)

Louisiana Power & Light Co. v. United Gas Pipeline

Co., 456 F.2d 326 (5th Cir. 1971) rev'sd on other

grounds sub nom., FPC v. Louisiana Power & Light

., ToC. 2G...

tcc ENE EE EN ERMC NM Gh, oh ae

Mason v. Montgomery Data, Inc., 967 F.2d 135 (5th

ie SID os Dn evesocte eee

.10

Morley Music Co. v. Cafe Continental, Inc., 777 F.

mee. 57s GP SOOO) 9 hc eke neseeee 22

Mother Waddles Perpetual Mission, Inc. v. Frazier, 904

F.Supp. 603 (E.D.Mich. 1995)........... 10, 12

National Comics Publications, Inc. v. Fawcett

Publications, Inc., 191 F.2d 594 (2d Cir. 1951)... 9

Nik-O-Val Music Co. v. P.O.S. Radio, Inc., 665 F.

SUG. GEO (ND) Ped > bine cenne sree 21

Paramount Pictures v. Metro Program Network, 962

2 The Ge es SOUS 0. 60. 50 oe aes os eae 12

H. Prang Trucking Co. v. Local Union No. 469, 613

F.26 1235 GE Ga. eee. 6 USS A ee eee 22

Schoenberg v. Shapolsky Publishers, Inc., 971 F.2d

926 GG Ce. BS ev ek ence hb Me Bay Oe

Topolos v. Caldewey, 698 F.2d 991 (9th Cir.) cert den.

Sal U.S. GES (lee oa eke ee eee 12

Twin Peaks Productions, Inc. v. Publications International,

Lid., 996 F.2d 1366 (2d Cir. 1993) ...... 14, 15, 17

USAR Systems, Inc. v. Brain Works, Inc., 897 F.Supp.

163 €.D.N.Y. SRG) se sk OR ee, 10

Warner Bros., Inc. v. Dae Rim Trading,Inc., 877 F.2d

L520 Coe Car. TSG ss vce eee eee 22

Walt Disney Co. v. Powell, 897 F.2d 565 (D.C.Cir.

EGP 6 vce ee hs ee 14, 15, 16, 17

F.W. Woolworth Co. v. Contemporary Artists, Inc., 344

U.S. 228, 73 S.Ct. 222, 97 L.Ed. 276 (1952) ....22

Vil

Statutes:

Section 101 of the Copyright Act, 17 U.S.C. §101. 2, 16, 17

Section 504(c)(1) of the Copyright Act, 17 U.S.C.

§504(c)(1) .... 2, 12, 13, 14, 15, 16, 17, 18, 20, 21

Section 504(c)(2) of the Copyright Act, 17 U.S.C.§

EE ieee ere ire ve 3, 12, 13, 14

Rule 52(a) of the Federal Rules of Civil Procedure 3, 20, 22

OTHER MATERIALS

3 Nimmer on Copyright §10.15 .............. 9,10

ere a cle oe Na oi

io GA

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1996

C. ELVIN FELTNER, JR.,

Petitioner,

MCA TELEVISION, LTD.

Respondent.

Petition for Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

OPINIONS BELOW

This petition seeks review of the opinion issued by the

United States Court of Appeals for the Eleventh Circuit on

July 26, 1996 (App. 1a ) which appears at 89 F.3d 766, which

affirmed the October 18, 1994 oral opinion of the District

Court, (App. 17a) the March 2, 1995 Findings of Facts and

Conclusions of Law and Omnibus Order (App.32a), and the

March 6, 1995 Order Correcting Findings of Fact and

Conclusions of Law. (App. 40a). A timely petition for

rehearing with a suggestion of rehearing en banc was filed.

It was denied on October 7, 1996. (App. 15a).

STATEMENT OF JURISDICTION

In seeking review of the above-referenced decision of the

United States Court of Appeals for the Eleventh Circuit and

its denial of his Petition for Rehearing with a Suggestion of

Rehearing en banc, petitioner invokes certiorari jurisdiction

conferred on this Court by 28 U.S.C. §1254 (1).

STATUTES INVOLVED

Section 101 of the Copyright Act, 17 U.S.C. §101, provides

in relevant part:

* * * * *

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.

A “compilation” is 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” inciudes collective

works.

Section 504(c) of the Copyright Act, 17 U.S.C. §504(c),

provides in relevant part :

Prabha 65 cise seit

( c ) Statutory damages. (1) Except as provided by

clause (2) of this subsection, 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, for which any one

infringer is liable individually, or for which any two or

more infringers are liable jointly and severally, in a sum

of not less than $500 or more than $20,000 as the court

considers just. For the purposes of this subsection, all

the parts of a compilation or derivative work constitute

one work.

(2) In a case where the copyright owner sustains the

burden of proving and the court finds, that infringement

was committed willfully, the court in its discretion may

increase the award of statutory damages to a sum of not

more than $100,000. In a case where the infringer

sustains the burden of proving, and the court finds, that

such infringer was not aware and had no reason to

believe that his or her acts constituted an infringement of

award of statutory damages to a sum of not less than

$200.

Rule 52(a) of the Federal Rules of Civil Procedure,

provides in relevant part :

In all actions tried upon the facts without a jury or with

an advisory jury, the court shall find the facts specifically

and state separately its conclusions of law thereon....

STATEMENT OF CASE

Respondent, MCA Television, Ltd. (MCA), licenses

television programs and motion pictures to television stations.

Through his wholly owned corporation, Krypton

International, petitioner, C. Elvin Feltner, Jr. (Feltner), has

for many years operated a large film library and been in the

business of licensing the films in that library to television

stations. In the early 1990's, Krypton International’s

subsidiary, Krypton Broadcasting, acquired three television

stations - two in Florida and one in Alabama. The two in

Florida were burdened by substantial programming debt

before Krypton Broadcasting acquired them. As a result,

before he caused Krypton Broadcasting to acquire those

stations, Feltner and his subordinates contacted MCA and

other syndicators to determine whether the licenses then in

force at those stations could be restructured. The syndicators,

including MCA, orally agreed to restructure but not until

after the stations had been purchased. After the stations were

purchased, many syndicators, including MCA, refused to

restructure on terms which would permit the stations to

survive financially.

Feltner tried to operate the stations, but they could not

generate sufficient revenues to pay all of the syndicators’

license fees - including those of MCA - and eventually the

syndicators - including MCA - sent letters to the stations

purporting to terminate the licenses. The total amount of

program debt to MCA for both shown and unshown material

was approximately $500,000.* In its termination notices

The total amount of contract debt then outstanding for the MCA programs

that had been used was only a small fraction of this amount.

MCA demanded that the Krypton stations immediately both

stop broadcasting the materials and pay the total amount due

on the contracts. But, it also told Krypton that if payments

were brought up-to-date the licenses would be reinstated.

Acting pursuant to Feltner’s belief based on 30 years in the

licensing business that these letters were only a collection

tactic, the Krypton stations continued to broadcast the MCA

programs. MCA then sued the Krypton stations. When

injunctions were issued, the Krypton stations immediately

ceased broadcasting MCA materials.

In May 1993, MCA and other syndicators filed an

involuntary bankruptcy petition against the Florida stations.

This was later converted to a Chapter XI proceeding involving

all three stations. The stations were then sold at auction, and

MCA was fully compensated for the outstanding program debt

from the proceeds of the bankruptcy sale. MCA has also been

awarded copyright statutory damages against the station

corporations by the bankruptcy court.

MCA filed this suit against Feltner for vicarious and

contributory copyright infringement on November 3, 1993.

On September 26, 1994, the parties entered into a joint

pretrial stipulation. In the stipulation the parties agreed that

there had been 900 showings of copyrighted works. No

specific number of copyrighted works infringed was

mentioned. Among the issues identified as remaining for trial

was the amount of damages. (App. 12a)

On August 22, 1994, MCA moved for summary

judgment on liability. This motion was denied the Friday

before the trial by Judge Davis on the ground that if Feltner

could prove the existence of an oral agreement to modify the

preexisting licenses then there would be no infringement. At

the beginning of proceedings on the morning of trial and

without prior notice, Judge Ryskamp instructed Feltner’s

counsel that since Judge Davis appeared to have found all of

the elements necessary for a finding of infringement and the

only element remaining regarding liability was Feltner’s oral

agreement defense, he would require Feltner to proceed first

with that defense. Judge Ryskamp then stated that if he found

that infringement had occurred he would then hold a hearing

on damages. Feltner’s counsel had no notice that such a

procedure was going to be imposed.

Felmer and MCA then presented evidence regarding the oral

agreement issue. Feltmer moved for judgment at the close of

evidence on liability in the belief that further evidence would be

taken on damages if liability was found by the court. At that point

the court informed Feltner's counsel that no further evidence

would be taken and that he would issue a decision the next

morning. The next morning Judge Ryskamp issued his findings.

(App. 17a) He held for MCA on liability; and after expressing his

dissatisfaction with the lack of evidence on damages, he found that

Feltner had willfully infringed MCA’s copyrights. He then

awarded statutory damages of $10,000 for each of 900 works

($9,000,000) without any explanation of the basis for the per work

amount of the award.’ When it was pointed out that in fact there

were substantially fewer than 900 works involved in the case and

that MCA had introduced no evidence of the number of works

infringed, Judge Ryskamp remarked that the court of appeals

would have to sort this out. Timely motions for a new trial and to

alter judgment were filed; both were denied.

>This is the largest reported award of statutory damages under the Copyright

Act.

Feltner then appealed to the United States Court of

Appeals for the Eleventh Circuit. On appeal Feltner argued

that the complaint failed to state a federal cause of action

because a person with a contract to exhibit a copyrighted work

who notwithstanding a contract dispute with the licensor

displays the work in accordance with the terms of the contract

cannot be held to have infringed. He also argued that the

evidence could not support a finding of willful infringement,

that the episodes of the various television series involved did

not constitute separate works for purposes of an award of

statutory damages under section 504(c)(1) of the Copyright

Act, that the district court had failed to make sufficient

findings supporting the per work award of Statutory damages,

and that the district court erred in making more than one

award of statutory damages per work infringed.

On July 26, 1996, the Eleventh Circuit affirmed with one

judge dissenting in part. (App. 1a) The Court of Appeals held

that the complaint stated a federal claim under the Copyright

Act. The Eleventh Circuit also upheld the finding of

willfulness and held that the episodes of the television series

constituted separate works for purposes of statutory damages.‘

Also, by a two-to-one vote, it held that more than one award

of statutory damages could be awarded per work infringed in

view of the terms of the pretrial stipulation, notwithstanding

the statutory bar against such double awards. A timely

petition for rehearing with a suggestion of rehearing en banc

followed. That petition was denied on October 7, 1996.

(App. 15a).

“It did not address the issue of the adequacy of the findings in its opinion.

REASONS FOR GRANTING THE WRIT

I. The decision of the Court of Appeals for the Eleventh

Circuit that a district court has federal subject matter

license a copyrighted work and has a contract dispute with

the copyright owner continues to display the work conflicts

with decisions of other U.S. Courts of Appeals.

In the Court of Appeals, Feltner contended that the

district court did not have federal subject matter copyright

jurisdiction in a case in which a party who has contracted to

license a copyrighted work and has a contract dispute with

the licensor under the license agreement continues to display

the work during the course of the dispute. The Court of

Appeals disposed of this issue in three short sentences. It

stated:

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 ef 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.

(App 3a) The Court of Appeals’ decision directly conflicts

with prior decisions of the Fifth and Second Circuits. In

Fantastic Fakes, Inc. v. Pickwick International, Inc., 661

F.2d 479 (5th Cir. 1981), the former Fifth Circuit held that a

party with a license to use a copyright who has breached a

covenant of the license agreement may not be sued for

after he has been declared to be in default by the licensor.

The Fifth Circuit stated, at 483-484:

The question emphasized by Pickwick and focused on by

the trial court was whether conformance with section 2(b)

(of the contract) was a condition of Fantastic’s obligations

under the licensing agreement or merely a covenant.

Both parties agree that if a breach of a condition

precedent is found then the authority to manufacture and

distribute copyrighted material granted in the licensing

agreement did not vest. In that case, Pickwick’s actions

in manufacturing records and tapes would be without the

authority of the copyright owner and would render

Pickwick liable for copyright infringement. See National

Comics Publications, Inc. v. Fawcett Publications, Inc.,

191 F.2d 594 (2d Cir. 1951); 3 Nimmer on Copyright §

10.15. A mere breach of covenant may support a claim

of damages for breach of contract but will not disturb the

remaining rights and obligations under the license

including the authority to use the copyrighted material.

Similarly, in Schoenberg v. Shapolsky Publishers, Inc.,

971 F.2d 926 (2d Cir. 1992), the issue presented was

whether district courts have subject matter jurisdiction in

cases in which a party who breached a license agreement

continued to display the work. The Second Circuit set forth

the following standard to be applied by the district courts in

that Circuit. The Second Circuit stated, at 932-933:

...we instruct courts in this Circuit to undertake a three-

part test...to determine whether a complaint states a cause

of action arising under the Copyright Act. A district

court must first ascertain whether the plaintiff's

infringement claim is only ‘incidental’ to the plaintiff's

claim seeking a determination of ownership or contractual

rights under the copyright...If it is determined that the

claim is not merely incidental, then a district court must

next determine whether the complaint alleges a breach of

a condition to, or a covenant of, the contract licensing or

assigning the copyright.... As we noted above, if a

breach of a condition is alleged, then the district court

has subject matter jurisdiction...But if the complaint

merely alleges a breach of a contractual covenant in the

agreement that licenses or assigns the copyright, then the

court must undertake a third step and analyze whether the

breach is so material as to create a right of recission in

the grantor. If the breach would create a right of

recission, then the asserted claim arises under the

This ruling regarding the standards for determining federal

subject matter copyright jurisdiction has been followed by

district courts in the Second Circuit and other circuits in many

cases: see e.g.,Baptiste v. Khoury, 910 F.Supp. 277

(W.D.La. 1996); USAR Systems, Inc. v. Brain Works, Inc.,

897 F.Supp. 163, 165-66 (S.D.N.Y. 1995); Mother Waddles

Perpetual Mission, Inc. v. Frazier, 904 F.Supp. 603, 607-09

(E.D.Mich.1995) (Lanham Act); Hanna-Barbera Productions

v. Screen Gems-EMI Music, 829 F.Supp. 67, 70-73

(S.D.N.Y. 1993); Living Music Records v. Moss Music

Group, 827 F.Supp. 974, 979-81 (S.D.N.Y. 1993).°

‘The leading text in the copyright area, Nimmer on Copyright, agrees with the

holdings of the Second and Fifth Circuits. Nimmer states, at Vol.3, §10.15:

If a grantee under an assignment or license uses the work in

violation of the provisions of the authorizing instrument, depending

upon the nature of such violation the grantor may have an action for

breach of contract, or he may have a right to reclaim the rights granted

and/or to sue for copyright infringement or he may be able to choose

among such alternatives.

If the grantee’s improper conduct constitutes a breach of a

covenant undertaken by the grantee (as distinguished from his failure to

satisfy a condition to his authorization) and if such covenant constitutes

an enforceable contractual obligation, then the grantor will have a cause

of action for breach of contract.

In this case, MCA claimed that Feltner’s stations had

breached the contracts. It asserted that the continued broadcast

of the programs after MCA sent its unilateral notice of

termination but before any judicial finding of breach

constituted infringement and the federal court had copyright

jurisdiction. The Court of Appeals found that federal

jurisdiction existed even though a contract existed and even

though MCA successfully pursued its contract remedies in the

bankruptcy court.

In reaching this result, there is no question that the court

below applied a different standard than that applied by the

Second and Fifth Circuits in similar cases. In particular the

court below did not determine whether the alleged

infringement was incidental to the contract claim, whether

there was a breach of a condition rather than a breach of a

covenant, and if there was a breach of a covenant whether it

was material. Schoenberg, supra.

The decision of the Court of Appeals shifts the relative

bargaining positions of the parties when there is a contract

dispute involving a copyrighted work greatly in favor of the

licensor. It permits licensors to both have their copyright cake

and eat their contract remedy cake too. There is nothing in

the Copyright Act which authorizes such dual relief, and it is

unjust for a party, as here, to be able to stand on its contract

rights and at the same time double recover for copyright

infringement. A licensor’s insistence on being paid the

* * * *

If the nature of a licensee’s violation consists of a failure to

satisfy a condition of the license (as distinguished from a breach of a

covenant), it follows that the rights dependant upon satisfaction of such

condition have not been effectively licensed and therefore any use by

the licensee is without authority from the licensor and may therefore

constitute an infringement of copyright. (Footmotes omitted).

contract price should constitute a waiver of any copyright

claims. This is an issue of great importance in the

broadcasting and publishing industries which the court below

has decided in a cursory manner and contrary to the great

weight of authority including decisions of two other Courts

of Appeals. This question has been present in many cases

involving copyrighted works, e.g., Paramount Pictures v.

Metro Program Network, 962 F.2d 775 (8th Cir. 1992);

Topolos v. Caldewey, 698 F.2d 991 (9th Cir.) cert den. 381

U.S. 915 (1983), and other intellectual property interests,

Mother Waddles Perpetual Mission, Inc. v. Frazier, 904

F.Supp. 603, 607-09 (E.D.Mich. 1995)(trademarks), and

there has been much confusion about the resolution of this

question. Therefore, a grant of certiorari review is warranted

to establish clear standards for federal jurisdiction in this area

of the law.°

II. A party which has contracted to license a copyrighted

work, breached the contract, and continued to display the

work may not be found to have willfully infringed the

damages, 17 U.S.C. §504(c)(2), because another U.S.

Court of Appeals has described the issue of whether such

conduct even constitutes infringement as “a complex issue

in a ‘murky’ area.”

Section 504 (c)(1) of the Copyright Act, 17

U.S.C.§504(c)(1), provides that an award of statutory

than $20,000 per work infringed in the discretion of the court.

Section 504(c)(2) of the Copyright Act, 17 U.S.C. §504(c)(2),

°This question is also pending in the Ninth Circuit in a case involving

petitioner. Columbia Pictures Television, Inc. v. Krypton International

Corp., et al., Case No. 94-55816. That appeal was argued on November 15,

1995 and is still pending.

provides that upon a finding of willful infringement the court

may award statutory damages of up to $100,000 per work

infringed. Here, MCA sought Statutory damages and alleged

that Feltner’s infringement was willful. The district court

agreed and found that his conduct was willful.

The district court held that Feltner knew that MCA’s

revocation of the licenses prevented him from lawfully

broadcasting the programs and therefore he knew his conduct

constituted infringement. However, the evidence was that

Feltner had been in the business of licensing motion pictures

as a licensor for thirty years, that he understood based on his

experience that the mere breach of the agreement doves not

constitute infringement, and that he based his conduct on this

belief He further testified that he conducted his own licensing

business in this fashion.

The court below stated that the proper standard to be

applied in determining whether an infringer has acted willfully

is whether the infringer acted “...with knowledge that (his)

conduct constitutes copyright infringement.” (App. 4a) When

this standard is considered in the light of the Second Circuit’s

statement in Schoenberg, supra, at 931, that:

The question of whether the breach of a contract licensing

Or assigning a copyright gives rise to a federal cause of

action under the Copyright Act is a complex issue in a

‘murky’ area. (Emphasis added),

it is clear that the Eleventh Circuit viewed this determination

in light of its view of the jurisdictional issue. It is also clear

that the Second Circuit would have reached a contrary result.

While this Court might ultimately hold that Feltner’s

conduct constitutes infringement, it is difficult to see how

such conduct could lead to a finding of willfulness when the

Second and Fifth Circuits have held that the conduct here does

not even constitute copyright infringement.’ Certiorari is

appropriate here to determine what the appropriate standard

is to support a finding of willfulness.

III. The decision of the Court of Appeals for the Eleventh

Circuit that for purposes of statutory damages under the

television series constitute separate works conflicts with

decisions of other Courts of Appeals.

A. MCA sought separate awards of statutory damages for

each episode of each television series alleged to have been

infringed. Feltner argued that the episodes were not separate

works but were parts of larger works - the series. Both the

district court and the Court of Appeals found that each

episode was a separate work. Se

It is undisputed and the Court of Appeals correctly noted

that the term “work” is undefined in the Copyright Act. The

Court of Appeals also noted that the circuits which have

considered the issue have generally held that separate

copyrights are not distinct works “unless they can live their

own copyright life.” (App.4a) Gamma Audio & Video v. Ean-

Chea, 11 F.3d 1106 (ist Cir. 1993); Walt Disney Co. v.

Powell, 897 F.2d 565 (D.C.Cir. 1990).°

Thus, in Walt Disney, the court stated, at 569:

The Act does not define ‘work’ but explains that “all parts

of a compilation or derivative work constitute one work.’

...Courts and scholars have gone further, however, in

’The Panel appears to have given this issue short shrift because the district

court did not assess the enhanced damage award permitted under 17 U.S.C.§

504(c)(2) for willful infringement. However, the determination of

willfulness has other adverse consequences for Feltner.

‘The Second Circuit in Twin Peaks Productions, Inc. v. Publications

International, Ltd. , 996 F.2d 1366 (2d Cir. 1993), seemed to apply a literary

analysis standard to this question.

defining ‘work’ for the purpose of determining damages.

The Second Circuit has explained that separate copyrights

are not distinct works unless they can ‘live their own

courts has aetermined that where separate copyrights

‘have no separate economic value, whatever their artistic

value, they must be considered part of [a]...work for

purposes of the copyright statute.’ Nimmer has similarly

Stated that ‘in order to qualify for a separate minimum

award, the work which is the subject of a separate

and citations omitted)

Similarly, in Gamma Audio, the First Circuit Stated, at

1116-17:

The term ‘work’, is undefined under the Copyright

Act. Although the 7win 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.’”....

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.

Although the Eleventh Circuit purported to adopt the

independent copyright life approach of Walt Disney and

Gamma Audio, it in fact strayed far from the principles of

those cases in finding that the individual episodes were

separate works.

First, it pointed to the fact that the episodes were

separately copyrighted. Aside from the fact that there was no

proof of this in the trial record, it is legally irrelevant. For

example, section 504(c)(1) of the Copyright Act, 17 U.S.C.

§504(c)(1), provides that all parts of a compilation are treated

as one work for purposes of statutory damages. (The

definition of “compilation” in 17 U.S.C. §101 provides that

a “collective work” is also a compilation.) This is true, of

course, even if separate portions of the compilation or

collective work are separate works or are separately

copyrighted.

Second, the Court of Appeals completely misconstrued

the First Circuit’s decision in Gamma Audio. In Gamma

Audio, the First Circuit adopted the independent copyright life

approach of the District of Columbia Circuit but held that

since the television series episodes in question were rented

separately by video stores they stood alone from an economic

perspective and therefore lived their own copyright life. By

contrast, the uncontradicted evidence in this case is that

individual episodes of the series in question are never sold or

licensed separately. Thus, the Eleventh Circuit's decision,

while paying lip service to the independent life standard,

adopts the position that, notwithstanding the separate

episode of a series is automatically a separate work for

purposes of statutory damages; in essence the decision of the

court below is contrary to the holdings in Walt Disney and

Gamma Audio. This is an issue of great importance to both

broadcasters and syndicators which has arisen in many

statutory damage cases, and this Court should grant certiorari

to resolve this conflict.

B. In response to MCA's request for an award of statutory

damages for each episode, Feltner alternatively contended that

the series in question were “collective works.” Under section

504 (c)(1) of the Copyright Act all parts of a compilation are

one work for purposes of statutory damages. Section 101 of

the Copyright Act defines the term “compilation” to

include a “collective work”. A “collective work” is then

defined as “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.” The question is

whether the series in question are collective works subject to

only one award of statutory damages.

An anthology, which is one type of collective work, can

be either a collection of works on the same subject by

different authors or a collection of works on different subjects

by one author. Feltner contends that the series here are

anthologies because they are a group of related works by one

author. In rejecting this claim, the Court of Appeals relied

on the Second Circuit’s decision in Twin Peaks Productions,

Inc. v. Publications International, Ltd., 996 F.2d 1366 (2d

Cir. 1993). However, the Twin Peaks court did not consider

the issue of whether the Twin Peaks series was a collective

work. Rather, it considered the issue of whether the episodes

were separate works and rejected the independent copyright

life test of the First and District of Columbia Circuits. This is

an important issue in this industry, and its resolution will

affect every copyright statutory damage case involving the

television industry. As a result a grant of certiorari is

warranted with respect to it.

IV. The decision of the Court of Appeals for the Eleventh

Circuit that awarded respondent more than one award of

statutory damages per work infringed conflicts with a

decision of another U.S. Court of Appeals.

Section 504 (c)(1) of the Copyright Act provides, in

pertinent part:

...the copyright owner may elect...an award of statutory

damages for all infringements involved in the action, with

respect to any one work...in a sum of not less than $500

‘or more than $20,000 as the court considers just.

(Emphasis addec)

It is clear that a court may not make more than one award of

statutory damages per work infringed no matter how many

times it has been infringed. Mason v. Montgomery Data,

Inc., 967 F.2d 135, 143-144 (Sth Cir. 1992). However, in

this case, the district court did just that, and the majority of

the Court of Appeals affirmed over Judge Bright's

strenuous dissent. The majority justified its departure from

settled precedent and express statutory language by its

interpretation of the joint pretrial stipulation. In that

stipulation, the parties agreed that there had been 900

broadcasts of copyrighted materials, but they did not stipulate

to the number of works which had been infringed. At trial,

no evidence was submitted which showed which motion

pictures or series episodes had actually been broadcast, and

none could be presented because the district court improperly

truncated the trial and relieved MCA of its burden of showing

how many works were actually infringed.”

In its findings, the district court stated that it could not

_..discern from the Joint Pretrial Stipulation whether each

of the 900 acts of infringement involved a separate work.

(App. 37a) Then after stating that Feltner had not specifically

raised this issue in the stipulation or before trial, the district

court stated that:

°The district court’s failure to give to Feltner notice of the procedure it

intended to follow and its subsequent failure to adhere to that procedure by

themselves warrant reversal. Louisiana Power & Light Co. v. United Gas

Pipeline Co., 456 F.2d 326, 332 (Sth Cir. 1971) reversed on other grounds

sub nom., FPC v. Louisiana Power & Light Co., 406 U.S. 621 (1972);

Lucas v. Dep’t of Corrections, 66 F.3d 245 (9th Cir. 1995). The dissent

criticized the majority for failing to address this flaw in the proceedings.

(App. 12a, fn.2)

“[it] must accept for the basis of its award of Statutory

damages the parties’ stipulation that Feltner was

responsible for the unauthorized telecasts of MCA’s

programs on 900 separate occasions.”

(App. 37a). On appeal, the majority also focused on the fact

that the parties stipulated that the Krypton stations had

broadcast the works in question at least 900 times after the

notice of termination was sent and that each act “constitutes

a separate act of infringement.” (App. 9a) The majority held

that by agreeing to this formulation Feltner had failed to

preserve for trial the issue of whether there could be more

than one award per work. It also held that Feltner presented

no evidence at trial that the 900 infringing acts in question

involved multiple infringements of the same works.The

majority decision is inconsistent with the facts, distorts the

meaning of the stipulation, and unjustly finds a waiver of the

In his dissent, Judge Bright addressed each of these

issues. First, he noted that the stipulation expressly reserved

the issue of “what statutory damages shall be awarded in

favor of MCA under §504(c) of the Copyright Act.”

(App.12a) He also stated that the issue of one award per

work was necessarily subsumed in this issue because the

amount of the award could not be determined until the number

of works infringed was determined.

Second, Judge Bright pointed out that the burden of proof

on this issue was on MCA. Feltner had no burden, and if

MCA produced no evidence on this issue, it could be awarded

only one award of statutory damages since there would be,

and in fact was, no proof that more than one work had been

infringed. Judge Bright’s parting words on this subject also

bear repeating:

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. (Emphasis in original)

Id. In sum this issue warrants certiorari review because the

majority affirmed a judgment which is contrary to fact, an

express provision of the Copyright Act and a decision of the

Fifth Circuit. In addition, the majority’s holding is

detrimental to the efficient administration of justice because

when attorneys realize that, as in this case, a misconstruction

of a joint pretrial stipulation can result in the loss of legal

rights and millions of dollars (more than $3 million here) they

will be reluctant to stipulate to anything.

V. The Court of Appeals acted contrary to the

requirements of Rule 52 (a) of the Federal Rules of Civil

Procedure and decisions of other courts of appeals by not

remanding to the district court to explain the basis of its

award of $10,000 per infringement.

Section 504(c)(1) limits the amount of the award per work

infringed to “a sum of not less than $500 or more than

$20,000 as the court considers just.” In this case, the District

Court made an award of $10,000 per work which is within the

range permitted by statute. But, since there were 900 such

awards, the total award was $9 million. This is the largest

such award ever made. However, while Judge Ryskamp stated

that in making a statutory damage award the court must

consider the consequences of the infringement and he did find

that MCA did not suffer any loss from the infringement and

that Krypton did get some indeterminate amount of revenue,

he did not explain the basis of the amount of his award. In

particular, he did not explain why in a case where the

plaintiff would receive the full measure of contract damages

(plus retain the value of the unbroadcast programs) and no

distinct harm to the copyright was proved or claimed, it was

proper to an award an amount equal to 1800 percent of the

amount of the contract claim. Thus, the award was totally

random and devoid of any evidentiary basis because, as Judge

Ryskamp himself noted, no evidence was presented on the

issue of the amount of MCA’s loss, if any, or any other

relevant factor. This, of course, was the result of Judge

Ryskamp’s decision to first bifurcate the trial into liability and

damage phases and his later refusal to permit the damage

phase to go forward.

The important point though is that while his finding can

be reviewed only for abuse of discretion, it is impossible to

perform any review when there is no evidence on the issue

and no explanation to support it. This was an issue which

Feltner raised in his briefs before the Court of Appeals, and

it is an issue which the Court of Appeals assiduously ignored.

While the issue of the need for findings to support a

Statutory damages award has not been addressed by any of the

other courts of appeals, the standards to be applied in making

such an award have been addressed by various district courts

and the Second Circuit. These district courts have generally

held that in making a statutory damage determination the court

should consider the following factors: (1) the amount the

infringing; (3) the amount of the infringer’s gain from

infringing; and (4) whether the infringer acted willfully. Nik-

O-Val Music Co. v. P.O.S. Radio, Inc., 665 F. Supp. 826

(N.D.Fla.1987); Morley Music Co. v. Cafe Continental, Inc.,

777 F. Supp. 1579 (S.D.Fla. 1991); Jobete Music v. Media

Broadcasting Corp., 713 F. Supp. 174 (MDNC 1988). And,

in Warner Bros., Inc. v. Dae Rim Trading,Inc., 877 F.2d

1120 (2d Cir. 1989), the court remarked, at 1126:

Statutory damages are awarded when no actual damages

are proven or they are difficult to calculate. F.W.

Woolworth Co. v. Contemporary Artists, Inc., 344 U.S.

228, 231, 73 S.Ct. 222, 224, 97 L.Ed. 276 (1952). In

making a statutory award, the court may consider the

likelihood of profits and losses and may take into account

the attitude and conduct of the parties.

Thus, in reaching its result, the court below has issued a

decision which sub silentio is inconsistent with one by the

Second Circuit. If evidence had been taken on these issues, it

would have been shown that MCA lost about $500,000 but

that it was going to receive approximately this amount from

the bankruptcy proceeding, that the stations gained nothing by

the infringements, and that the stations lost money whenever

they showed the MCA programming.

Further, although the issue of the need for findings in a

bench trial has not been addressed in the specific context of

of Civil Procedure provides in pertinent part that:

In all actions tried upon the facts without a jury or with

an advisory jury, the court shall find the facts specifically

and state separately its conclusions of law thereon....

The requirement of Rule 52(a) that trial courts must make

findings of fact and conclusions of law in bench trials is

mandatory. See, e.g. H. Prang Trucking Co. v. Local Union

No. 469, 613 F.2d 1235, 1238 (3d Cir. 1980); Featherstone

v. Brash, 345 F.2d 246, 249-50(10th Cir. 1965); Louis

Vuitton, S.A. v. Lee, 875 F.2d 584, 587 (7th Cir. 1989). The

failure to make findings and explain the basis for the result is

contrary to law and frustrates the ability of an appellate court

to perform its functions. This failure of the court below to

remand on this issue conflicts with decisions of other circuits,

and in view of the increasing number of copyright statutory

damage cases being filed, this Court should establish the

factors which district courts should consider in making

statutory damage awards and remand to the district court to

make such findings.

CONCLUSION

This case involves numerous substantive questions which

will arise in almost every copyright statutory damage case.

The law is unsettled on all of these questions and the circuits

have resolved them in differing fashions. This Court should

grant the petition for certiorari in order to resolve these

questions. Further, since all of the issues raised in this

Petition are also pending in another case involving petitioner

in the Ninth Circuit,’° petitioner requests that consideration of

this Petition be held in abeyance pending decision by the

Ninth Circuit. This would avoid the possibility of different

results on the same issues for one party.

Respectfully Submitted,

Richard I. Chaifetz

9194-B Red Branch Road

Columbia, MD 21045

410-964-5573

Counsel of Record

'° Colum ia Pictures Television, Inc., supra.

H. Scott Hecker

Philip L. Schwartz

517 Southwest First Ave.

Fort Lauderdale, FL

954-523-3811

APPENDIX

United States Court of Appeals,

Eleventh Circuit.

No. 95-4424.

MCA TELEVISION LTD.,

a Delaware Corporation, Plaintiff-Appellee,

C. Elvin FELTNER, Jr.

Defendant-Appellant,

J. Clifford Curley, et al., Defendants.

July 26, 1996.

Licensor of syndicated television programs brought

licensee continued to broadcast the programs after licensing

agreements were terminated. The United States District Court

for the Southern District of Florida, No. 93-14213-CIV-EBD.,

Edward B. Davis, J., entered $9 million judgment in favor of

licensor, and licensee appealed. The Court of Appeals, Barkett,

Circuit Judge, held that: (1) evidence was sufficient to establish

that licensee willfully infringed licensor’s copyrights, as

required to support award of enhanced statutory damages; (2)

each episode of syndicated television series broadcast by

licensee after licensing agreement expired, rather than series

itself, was a separate “work” for purposes of awarding statutory

damages; and (3) whether district court erred in calculating

statutory damages by awarding damages for multiple airings of

same episode was not properly placed before district court.

Affirmed.

Appeal from the United States District Court

for the Southern District of Florida.

Bright, Senior Circuit Judge, sittng by designation, filed

dissenting opinion.

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

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 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.

*Honorable Myron H. Bright, Senior U.S. Circuit Judge for the

Eighth Circuit, sitting by designation.

Discussion

[1] 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 ef seg. 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).

[2] 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

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

_ 4a

infringement was willful and for a reduced award if the

infringement was innocent. One commentator has stated that

“fiji seems clear that as here used ‘willfully’ means with

knowledge that the defendant’s conduct constitutes copynght

infringement.” 3 Nimmer on Copyright (1990), § 14.04[B], 14-

58-60 (emphasis added).

(3] We note that, although the district court found that

Feltner’s infringements of MCA’s copyrights were “willful, not

‘nnocent. 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.

[4] 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. /d. 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 ea sh series, was individually

copyrighted by MCA.

[5] 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 constitute 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.” Jd.

Feltner points to a clause in the licensing agreements

referring to anthologies and argues that each series at issue here

in an anthology. We are not persuaded. In Twin 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.” Jd.

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.”

[6] 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

Copyr'ght 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 number 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 (Sth

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 Rule of the Southern District of

Florida instructs parties to file a Joint Pretrial Stipulation no

later than five days prior to the pretrial conferences. 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 “[eJach [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.

10a

Fehlhaber, 681 F.2d 1015, 1030 (Sth Cir. Unit B 1982) (“[A]n

argument first raised in a post judgment 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.

lla

BRIGHT, Senior Circuit Judge, dissenting:

The district court assessed Feltner $9,000,000 in statutory

damages — $10,00 for each of the 900 occasions on which

MCA’s programming was improperly aired. Because |

believed 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 the 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 judgement is rendered, to recover, instead of

actual damages and profits, an award of statutory

damages for a// infringements involved in the action,

with respect to any one work, ....

17 U.S.C. § 504(c)(1) (emphasis added)! See Mason v.

Montgomery Data, Inc., 967 F.2d 135, 143-44 (Sth 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)

The legislative history of section 504 provides:

A single infringer of a single work is liable for a single amount

.... MO 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.

12a

(“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 amounied 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 district court and from asserting error in that regard on

appeal.” 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

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

l3a

court, and indeed this court on appeal, properly addressed ifas

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.”

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.’ Although 900 may have been a convenient

: 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.

14a

number, it was not the correct number of “works.” 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 toMCA

and detrimental to the defendant.

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.

. 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.

15a

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 95-4424

MCA TELEVISION LIMITED, a

Delaware Corporation,

Plaintiff-Appellee,

versus

C. ELVIN FELTNER, Jr..

Defendant-Appellant,

J. CLIFFORD CURLEY, ETAL

Defendants.

On Appeal from the United States District Court for the

Southern District of Florida

ON PETITIONS) FOR REHEARING AND

SUGGESTION(S) OF REHEARING EN BANC (Opinion

,11thCir.,19__, F.2d )

Before: COX and BARKETT, Circuit Judges and “BRIGHT,

Senior Circuit Judge.

PER CURIAM:

The Petition(s) for Rehearing are DENIED and no member of

this panel nor other Judge in regular active service on the Court

having requested that the Court be polled on rehearing en banc

Honorable Myron H. Bright, Senior U.S. Circuit Judge for the

Eight Circuit, sitting by designation.

l6a

(Rule 35, Federal Rules of Appellate Procedure; Eleventh

Circuit Rule 35-5), the Suggestion(s) of Rehearing En Banc are

DENIED.

ENTERED FOR THE COURT:

UNITED STATES CIRCUIT JUDGE

ee kd hee ener et he Peet Metso Neate! ~ a>

17a

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

NORTHERN DIVISION

MCA TELEVISION, LTD.,

Plaintiff

Docket No.

3-14213-CIV-RYSKAMP

)

) Ft. Pierce, Fl

v. ) October 18, 1994

) 10:30 a.m.

C. ELVIN FELTNER, )

Defendant. )

)

VOLUME 2

[RANSCRIPT OF TRIAL

BEFORE THE HONORABLE KENNETH L. RYSKAMP

APPEARANCES:

For the Government: CHRISTOPHER K. KAY, ESQ.

MICHAEL BODINE, ESQ.

For the Defendant: H. SCOTT HECKER, ESQ.

PHILIP SCHWARTZ, ESQ.

RICHARD CHAIFETZ, ESQ.

Court Reporter: Richard Greenspan, CSR, RPR, CM, CRR

United States Courthouse

West Palm Beach, FL 33401

18a

THE COURT: Good morning.

At the conclusion of all the evidence and the arguments

that have been submitted by counsel, the court has reviewed all

of the cases that have been submitted, and I appreciate your

help and the good presentation both sides made in focusing on

the issues.

Of course, the issues have been somewhat narrowed by

Judge Davis’ order of last Friday, and out (sic) tthe outset, for

the record, I would adopt all of those findings and conclusions.

I will not restate any of those. He made certain findings as to

undisputed facts for summary judgment. He made some

conclusions of law with regard to the necessary showing for

conclusions are incorporated here.

I have tried to narrow down the issues that remain for the

court to determine and I have identified about six issues here

and I will deal with them in order.

The first one deals with subject matter jurisdiction of this

court. This was raised yesterday by the defendant. It would

seem as though in the prior cases it was raised also and ruled

upon.

I find that I do not have to spend much time at this point.

This is an action for copyright infringement. It’s not an action

for breach of contract. The plaintiff has clearly elected

statutory damages under Section 504 and the court concludes

that it does have subject matter jurisdiction.

The second issue is whether the defendant has established

his affirmative defense of an oral contract to restructure the

debt.

Now, I think it is significant that there are really no

exhibits that have established this particular defense. There are

YL BR SAS eh NR EAN MENT TPO OREN EB

6K erst s des

19a

a number of letters going back and forth, and the most that you

can glean from these letters is that the plaintiff wanted to be

paid and that the defendant wanted more time to pay. There

seems to be no effort at a concerted restructuring, a formalized

restructuring of the debt. The April 13 letter even left open,

and this is the letter that says you have got to stop showing the

particular programming, left open a “payment arrangement.”

So I find that the plaintiff was probably always willing to

work out some reasonable financial arrangement. The

defendant never offered a reasonable financial arrangement.

The letters from Krypton merely refer to a hope that they might

become current in the future. There was no testimony that a

deal was agreed to. There was some testimony that the plaintiff

would consider such a deal.

Mr. Feltner testified he would not have purchased these

stations if there was not an extension agreement. However, he

did purchase the stations and there was no extension agreement.

Mr. Dayton did all of the negotiating with the syndicators.

The most that Mr. Dayton could say was that the plaintiff “gave

him a comfortable feeling” that the debt might be restructured.

He also said that he “was led to believe that the debt would be

restructured.” Dayton denied that Feltner ever stated that he

would not purchase the stations without a restructuring of the

debt, at least he denied that he said it to Mr. Dayton.

I find it rather incredible that somebody could invesi so

many millions of dollars in buying stations if the debt were that

critical and not have a formalized plan, something that the

parties could put their names on and restructure the debt.

It seems to me it’s in the best interests of the plaintiff to

keep licensing agreements going. That is their bread and

butter. That is the way they make their money, and I think they

would have been open to doing it, but it was never done.

20a

Mr. Feltner said that prior to the acquisition of the stations,

that he talked to everyone about restructuring the debt and that

the news was good. That’s still a far cry from saying you have

got an agreement or a new arrangement.

The contention that these letters were mere collection

efforts is really not a defense to this action. Of course these

letters were collection efforts. But when the collection efforts

failed, the plaintiffs used whatever recourse they had available

to them, and that recourse was to terminate the licensing

agreement. It’s no different from a mortgage holder who

continually says your mortgage is in default, please pay, and he

may pay and he doesn’t foreclose, but finally you get to the end

of the line and you say no more extensions, no more demands

for payment, I am foreclosing the mortgage. And the letters

were pretty clear that is what the plaintiff had in mind and a

reasonable person could not construe those letters any

differently.

The defendant’s sole idea of restructuring the debt was

either to pay when he felt like it and not pay and promise

payment in the future. When I say he, there was a corporation.

He was working through other people, but everybody agreed

through Judge Davis’ order that he made all the decisions in

this regard.

He did testify that he left all of the negotiating to Mr.

Dayton, but that he tried to keep himself informed and he

would be bound by the decisions that were made as the 100

percent stockholder of the Krypton Corporation.

So the court finds that the defendant has failed in his

burden of proving a new oral agreement, and that’s even

assuming that this oral agreement could supersede the written

agreement. The written agreement clearly states that all

negotiations have been incorporated in the agreement; that the

2la

written agreement cannot be amended without having it in

writing signed by the parties.

The third issue for the court is was the infringement by the

defendant wilful. In evaluating the conduct of the parties in

this case, the court bears in mind that the defendant was also in

the business of licensing artistic works. He was not unfamiliar

with the business. He knew exactly how it worked. He knew

the value of any of these properties is in the licensing

agreements, and he knew that these syndicated programs were

essential to his business.

He further knew that he had not paid for this programming.

He further knew by the letter, which any reasonable person

could construe, that his license had been revoked and that he

could not continue to use this material in his broadcasting.

He took a calculated risk in running these programs with

the hopes that he would eventually get the money from the

advertising revenue and be able to pay off, assuming the

plaintiff would accept a later payment.

His statement that he would not stop programming until a

court enjoined him to me is a clear indication of a defiant

attitude. I can’t imagine somebody saying that, looking at the

situation and saying well, to get me to stop programming you

are going to have to get an injunction.

The issues did not take a rocket scientist to figure out

where they were, and the defendant gets a little comfort from

the fact that he did not run the program after being enjoined.

The question is why did it take an injunction to stop him from

running the programs after the letters were received. The court

finds that the defendant wilfully infringed on the plaintiff's

The fourth question that I see presented for the court is

what is a work for the purpose of the copyright law. The court

22a

is frank to admit that it has not explored that area before, and

the counsel provided some cases that are helpful in resolving

this issue.

Of course, the defendant contends that each series such as

Rockford Files or Kate and Allie, each series is a work as

opposed to each segment in the series. Now, the evidence

before the court that’s been agreed to is that each segment is

copyrighted.

Now, the court has reviewed the cases cited by counsel and

it seems to me that the case of Twin Peaks Productions v.

Publications International is probably the most instructive. As

you all know, this involved the television series Twin Peaks

and a book that was written by the defendant Publications

International dealing with the plot of that Twin Peaks series.

The court notes, and I quote, “The eight teleplays for Twin

Peaks represents a current television genre in which one or

more plots continue from one episode to another. The style

was popularized by the police series Hill Street Blues and is

still in vogue in the lawyer series LA Law. Twin Peaks carried

the style to its limit by keeping the point of the basic plot, that

is who killed Laura, continuing throughout the first season of

the series beyond the eight episodes at issue in this litigation.”

Then they say, “Whatever the scope of the Stigwood ruling

concerning overlapping copyrights and related components of

single musical production might be under the 1976 Act, we

think it has no application to separately written teleplays

prepared to become episodes of a weekly television series. 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 viewer’s interests without furnishing a resolution.”

ay ase fn dueilted Piss t tual beeen omer ocodisstamahs desl canecea doit ee a eek Se

os scacianhiihin nahn dih dice Ledeen sea

23a

I think that the series that we have talked about here,

although they may have a common theme and common

character development, come nowhere close to the Twin Peaks

or the-LA law or the Hill Street Blues type of series where you

have that continual carryover of a plot. The character

development certainly are repeated, but I think that the Twin

Peaks decision clearly resolves the issue for the court.

The court in Twin Peaks then went to talk about it might

be a different situation if they had one of John LeClair’s Tinker

Tailor Soldier Spy or Smiley’s People, where you took one

work and had six part to it, maybe a production like Roots,

which has one theme but several segments, that might be a

different situation, but the court went on to say, “In any event,

ours is the easy case of infringement of eight separate works

that warrants eight statutory awards whether the registrations

apply to the teleplays or to the televised episodes.” So the court

finds that each segment of the series is a work as defined by the

The fifth issue is how many infringements have been

established. The parties have stipulated that the defendant

authorized the use of plaintiffs material on 900 separate

occasions. This does not to totally resolve the issue because in

the case of Walt Disney v. Powell, which is 897 F.2d 565 at

569 the court said this. “The district court erred in assessing

damages based upon six violations mistakenly focusing on the

number of infringements rather than the number of works

infringed. Both the text of the copyright act and its legislative

history make clear that statutory damages are to be calculated

according to the number or works infringed and not the number

of infringements. 17 U.S.C. Section 504(c)(1) authorizes a

judge to award damages ‘for all infringements with respect to

any one work.’ As the House Report on the bill explains,

however, only one penalty lies for multiple infringements of

one work.”

24a

Then referring tothe United States Code, the court says 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. Moreover, the minimum and

maximum amounts are to be multiplied where multiple works

are involved in the suit. The same is not true with respect to

multiple copyrights or multiple registrations. Then they go on

to say the act does not define a work, but explains that all parts

of the compilation or derivative work constitute one work.

Now, the court cannot tell from the stipulation whether

each infringement, the 900 referred to, involved a separate

work. This issue is further complicated by the fact that there

are three television stations involved. For example, if each

station was running the Rockford Files, and let’s say each one

ran segment 20 of the Rockford Files, is this one infringement

or is it three?

Well, you have got separate corporations that were

infringing, but they were under the direction of one person

becasue we have one defendant here, so if these stations were

parties, the answer might be different from the situation we

have here where we have one party. Can he be guilty of three

infringements on the same particular segment?

Furthermore, does the defendant (sic) have the burden of

proving the separate works infringed or in light of the

stipulation does the defendant have carry that (sic) burden?

Columbia Pictures v. Krypton offers no guidance.

Apparently in that case this issue was never raised. It seems to

me it should have been raised and it seems to me it should have

been raised in this particular case also, but it has not been

raised and so I go back to the pretrial stipulation where no one

says that this is an issue for the court to determine. This is an

issue that came up yesterday in argument, but it is certainly not

25a

an issue that I can find framed by the pretrial stipulation. So

since the parties did not list this as an issue for the court, the

court will accept the stipulation of the parties that there have

been 900 infringements and proceed with that as established.

Issue number 6, what is the proper amount of damages to

be awarded in this case? Now, the plaintiff has elected

Statutory damages. He has the right to do so. The statuture

gives him the right to do so and so the court is not really

concemed about contract damages.

The court has found that there was no innocent

infringements. In fact, to the contrary, the court has found that

the infringement was a wilful violation. Thus, the range for

violation is from $500 to $100,000, obviously quite a

considerable range. Apparently Congress wanted to give the

courts a broad range to deal with any particular unique

situation.

Now, the court has been given very little guidance from the

parties as to what would be the proper amount of damages to

award in a case like this. Such guidance might be evidence

regarding the consequences of this infringement.

It’s clear that the infringement has not destroyed the

plaintiff's right to future licensing. In other words, it hasn’t

diminished the right to use these series or films in the future.

It certainly has diminished to some extent his right to use it in

this market at a given time, but the court is fully aware that

many of these movies and many of these series run over and

over and over again, so the court has to make some

determination of how much diminution of the value of that

right has occurred by running it in violation of the copyright.

It’s also clear that this violation has not limited the

plaintiff's claim to contract damages. The courts seem to be

clear, though, that copyright damages are quite unique and

26a

separate from contract damages and that the proper amount of

contract damages may not govern the proper amount of

Now, from the defendant’s standpoint the defendant was

able to sell advertising time for the programming that it

illegally aired. The court has had no testimony or any evidence

as to the value, average value of advertising received for any

particular segment, so there is not much to instruct the court’s

enlightened conscience in this particular regard. Again, the

Congress has left too (sic) the amount of statutory damages to

the discretion of the court.

After weighing all of the facts and circumstances in this

case, the court has determined that an award of $10,000 per

violation would be a proper amount of damage for each

infringement. This would result in a judgment in the amount

of $9 million.

Now, I’m fully aware of the award made in the Columbia

case of some $20,000 per infringement. I guess I can only

conclude that Judge Rafeedie’s enlightened conscience differes

from mine and that’s what I think would be a proper award in

this case.

I think that attorney’s fees should be awarded and costs.

The cases that deal with attorney’s fees don’t make it

automatic, but when the plantiff’s position is justified, as it has

been in this case, really hardly without dispute, and the court

has found a wilful violation, I believe attorneys’ fees should be

awarded, and plaintiff will make application for those fees by

affidavits and the defense can respond with their affidavits. I

will wait to hear from the parties whether you want to do it by

affidavit or you want an evidentiary hearing or what you feel is

a proper way to dispose of those issues, both costs and

attorney’s fees.

27a

I believe that I have dealt with all issues before the court.

When I make an oral ruling like this I usually ask the parties are

there any other issues you want me to rule upon that I have not

ruled upon that you feel a ruling would be necessary?

First the plaintiff. Do you feel there is anything?

MR. KAY: No, your Honor.

THE COURT: Does the defendant feel there is anything?

MR. CHAIEFTZ: Yes, your Honor, I have one issue that

your Honor addressed, I am not quite sure that you want me to

talk about this, and that was the number of works.

Last night what I did was I sat down with the affidavits that

were submitted in the summary judgment motion and went

through them to see how many of the 900 were repeats.

THE COURT: That must have been an exciting evening

for you.

MR. CHAIFETZ: Your Honor, it was incredible. Some

of them were really difficult to do, particularly those involving

WNFT -

MR. KAY: Your Honor, if I may just interrupt, if I could.

Are we going to now get into an issue that pertains to the

number of issues which were the subject of the stipulation that

was filed by the parties and which serves as the basis for the

court’s decision today? I think what I heard today was that the

court, based upon the pretail stip filed by the parties

acknowledged there were 900 instances of copyright

infringement.

MR. CHAIFETZ: I haven’t read the stipulation. I have

never seen it, your Honor.

THE COURT: Counsel is correct. I am going to allow

you to put this on the record because this is — well, you raised

28a

it yesterday. It hadn’t been raised before. Frankly, I was at a

loss for a while how to deal with it, but in this district we have

a local rule that requires pretrial stipulations as to which issues

are to be tried.

I noticed that in California that issue wasn’t tried either, so

I came to the conclusion that the parties had stipulated to 900

infringements.

MR. CHAIFETZ: Actually —

MR. HECKER: I believe we stipulated to 900 showings.

THE COURT: But nobody had made the issue at that

point that a multiple showing of one segment, that a

copyrighted work constituted only one violation. Nobody had

said that. It didn’t come out until all the evidence was over and

you made your argument, and very effectively, I think, from the

case that I read, but I am going to let you put something on the

record here, but I do feel that at this point we can’t reframe and

reshape the pleadings and the issues really after all the evidence

is in, but I will let you proffer what you found.

MR. CHAIFETZ: Thank you very much.

The affidavits that were submitted with the summary

judgment motion, which is what I was dealing with last night,

show that for Amen at WNFT in Jacksonville, there were 262

separate showings. My review of that filing which lists the

program numbers, each episode has a separate number, so I just

want through comparing it, show that there were 108 episodes

that were actually aired, some of them two or three or even four

times.

Similarly, Airwolf was shown 223 times. There were 85

episodes shown.

Buck Rogers, 20 episodes were shown and there were 20

different episodes.

29a

THE COURT: You are saying at each station?

MR. CHAIFETZ: No, going station by station right now.

Then there are three movie packages. There is the

Universal Miscellaneous, which has 22 showings, but only 14

works; Universal Pictures Debut Network III, which is 11

showings, 8 separate works, and List Of A Lifetime, which had

10 showings and six separate works.

So the affidavit sumbitted by Mr. Kraus showed 548

showings, if you will, and 241 separate works.

At Fort Pierce, it showed for Kojak 90 showings and 83

separate works.

A-Team, 26 showings and 26 works.

I can’t even read my writing on these now.

Give Me A Break was six showings and six works.

The Universal Pictures Debut Network III was 16

showings and 11 works.

One think I didn’t do was to compare this program with

what happened at WNFT. List Of A Lifetime was 10 showings

and nine works.

Then in terms of WABM, we have the affidavit of Mr.

Weisberger, and I just couldn’t make any sense of it

whatsoever. I just couldn’t come to any conclusions from it.

THE COURT: All right, thank you.

As you indicated, you compiled this after the evidence had

closed and after the closing arguments and the case was over

pending the court’s decision. It seemed to interject a new issue

into the case and this gave me some concern, but I felt that

since this issue had never been identified by the parties, I would

try only the issues that were submitted. In fact, the issue of

30a

what is a work was really not defined as an issue, and I dealt

with that, and I think I could properly deal with that even under

the stipulation and the facts, but your statment is made for the

record and I will stand by my ruling.

I am sure that will give you some fertile territory on appeal

to deal with, whether or not the court should be compelled to

reopen the case after all of the evidence is in based upon a

principle of law not on the pretrial stipulation and only raised

in closing argument, but I will stand by my ruling in that

regard.

MR CHAIFETZ: Thank you, your Honor.

MR. HECKER: Judge, Mr. Chaifetz in his closing

argument did say to the court that under the act, one work, one

infringement, no matter how many times —

THE COURT: Where it came up and he cited me the case,

I went to look at the case, and he has a valid point there, but it

wasn’t a part of the pretrial stip, it wasn’t part of the evidence,

it wasn’t part of the evidence.

MR. HECKER: I don’t have the stipulate in front of me.

I don’t know whether I said we stipulated to 900 showings or

900 infringements.

THE COURT: Of course you didn’t say infringement, but

that’s what the court has to determine, how many

infringements, and there is no contrary figure. It seems to me

that if this were an issue at any time with the parties, that you

would have been not working on it the night before the court’s

ruling, but would have come here armed with detail as to those

things.

MR. HECKER: The statute itself, Judge, states that

damages shall be awarded per work, not per showing.

3la

THE COURT: I understand your point and | have dealt

with it and that will be my ruling.

Is there anything else that we need?

MR. KAY: No, your Honor.

THE COURT: All right, court will be in recess.

32a

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 93-14213-CIV-DAVIS-[RYSKAMP]

MCA TELEVISION LIMITED,

a Delaware Corporation

Plaintiff FINDINGS OF FACTS

AND CONCLUSIONS

vs. OF LAW AND

OMNIBUS ORDER

C. ELVIN FELTNER, JR..,

J. CLIFFORD CURLEY,

DANIEL S. DAYTON, and

DOES | through 5.

Defendants.

THIS case was tried before the Court on October 17, 1994.

After considering all of the evidence, the pleadings filed by the

parties, the arguments made by counsel and the legal authorities

submitted to the Court, the Court makes the following Findings

of Fact and Conclusions of Law.

1. The Court adopts the incorporates herein by reference

the findings and conclusions contained in the Order on Motions

for Summary Judgment entered by Judge Davis on October 14,

1994.

2. There are six issues that remain for the Court’s

determination in this case. The court will address each of them

in turn below.

I. SUBJECT MATTER JURISDICTION

3. At the close of the evidence, the defendant, C. Elvin

Feltner, Jr. (“Feltner”), moved to dismiss this case for lack of

subject matter jurisdiction. Feltner argued that the claim

brought by the plaintiff, MCA TELEVISION LIMITED

(“MCA”), was nothing more than a breach of contract action,

such that the Court lacked federal question jurisdiction.

4. The Court finds that this is an action for copyright

infringement, not for breach of contract. MCA has clearly

elected statutory damages under Section 504 of the Copyright

Act, and the Court concludes that it does have subject matter

jurisdiction over this matter. See T B Harms Co. v. Eliscu,

339 F.2d 967 (4th (sic) Cir. 1990); Arthur Young & Co. v. City

of Richmond, 895 F.2d 967 (4th Cir. 1990). Feltner’s Motion

to dismiss is therefore denied.

Il. ORAL AGREEMENT DEFENSE

5. Feltner defends this action on the basis of his claim

that MCA orally agreed to restructure of debt owed by the

Krypton television station to MCA. F eltner, however, has

failed to carry his burden of proof in establishing this defense.

6. First, no exhibits support this defense. None of the

exhibits introduced reflect a concerted effort to formally

restructure the debt owed under the License Agreements.

While MCA was always willing to work out some reasonable

financial arrangement, Feltmer never offered a reasonable

financial arrangement.

7. Further, there was no testimony that a 4eal to

restructure was ever agreed upon by the parties. There certainly

was not any deal in place at the time of Feltner’s purchase of

the stations. The Court finds it rather incredible that someone

like Feltner would invest millions of dollars in buying the

34a

stations and not have a formalized plan to restructure the debt

in place if the debt were as critical as Feltner testified.

8. The most that Feltner has proved is that prior to the

acquisition of the stations, the syndicators, including MCA,

indicated a willingness to discuss a possible restructure of the

license debt owed by the stations. However, Feltner failed to

prove that he and the syndicators reached an agreement or a

new arrangement for the restructuring of the debt.

9. Therefore, the Court finds that Feltner has not fulfilled

his burden of proving a new oral agreement to restructure the

debt. In any event, it is questionable whether any such oral

agreement could supersede the written License Agreements.

Those License Agreements clearly provide that all negotiations

were incorporated in the agreements, and that any amendments

to the agreements must be in writing, signed by both parties.

Ill. WILLFUL COPYRIGHT INFRINGEMENTS

10 The Court next considers whether Feltner’s

infringements of MCA’s copyrights were willful in nature. In

evaluating Feltner’s conduct, the Court bears in mind that he

was also in the business of licensing artistic works;through

Krypton International Corporation. Feltner was familiar with

the business. Feltner knew that the License Agreements gave

tremendous value to these syndicated programs.

11. Feltner knew that the stations had not paid for the

MCA programming. Feltner know (sic) or should have known,

moreover, that upon receipt of the MCA cease and desist letters

dated April 13, 1992 — which any reasonable person could

construe — the stations’ licenses had been revoked and that he

could not continue to broadcast the MCA programs lawfully.

Thus, Feltner took a calculated risk in continuing to telecast the

MCA programs.

35a

12. Feltner’s testimony that he would not stop telecasting

the programs until enjoined by a Court is a clear indication of

a defiant attitude. His position in this regard is unreasonable

and unacceptable. The fact that he did not run the programs

after the injunctions were entered does not eliminate F eltner’s

responsibility for the earlier unauthorized telecasts.

14. The Court finds that Feltner willfully infringed on

MCA’s copyrights.

IV. INFRINGEMENT OF EACH “WORK”

15. The Court must define what a “work” is for purposes

of calculating the statutory copyright damages to be awarded

MCA under 17 U.S.C. § 504(c)(1). Feltner contends that each

television series constitutes one work, as opposed to each

segment in the series. The Court notes, however, that each

such segment is separately copyrighted.

16. The most instructive case in this area is Twin peaks

Productions, Inc. v. Publications Int'l Ltd., 996 F.2d 1366 (2d

Cir. 1993). In Twin Peaks, the Second Circuit reviewed a

ruling by the District Court that the defendant had violated

eight separate copyrights — one for each teleplay (or segment)

of “Twin Peaks” — and that the plaintiff was entitled to an

award of statutory damages in the amount of $15,000 per

teleplay for a total of $120,000. The Second Circuit’s decision

in Twin Peaks contained the following analysis.

The eight teleplays for “Twin Peaks” represent a

current television genre in which one or more plots

continue from one episode to another. The style was

popularized by the police series “Hill Street Blues”

and is still in vogue in the lawyers series “L.A. Law.”

“Twin Peaks” carried the style to its limit by keeping

the point of the basic plot (who killed Laura?)

continuing throughout the first season of the series,

36a

beyond the eight episodes at issue in this litigation.

Whatever the scope of the Stigwood ruling concerning

“overlapping” copyrights in related components of a

single musical production might be under the 1976

Act, we think it has no application to separately

written teleplays prepared to become episodes of a

weekly television series. 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 viewer’s interest without furnishing a

resolution . . . [OJurs is the easy case of infringement

of eight separate works that warrants eight statutory

awards...

Id. at 1381.

17. The decision in Twin Peaks clearly resolves this issue

for the Court. The Court finds that each segment of each

television series licensed by MCA is a “work” as defined by the

V. NUMBER OF INFRINGEMENTS

18. In the parties’ Joint Pretrial Stipulation dated

September 26, 1994, the parties stipulated that Feltner directed

the stations to telecast MCA’s program without MCA’s

authority after April 13, 1992, on 900 separate occasions. In

assessing the amount of statutory damages to be awarded

MCA, the Court is also mindful of the decision in Walt Disney

Co. v. Powell, 897 F.2d 565 (D.C. Cir. 1990):

The district court erred in assessing damages based

upon six “violations,” mistakenly focusing on the

number of infringements rather than on the number of

works infringed. Both thetext of the Copyright Act

and its legislative history made clear that statutory

37a

damages are to be calculated according to the number

of works infringed, not the number of infringements.

17 U.S.C. § 504(c)(1) authorizes a judge to award

damages “for all infringements . . . with respect to any

one work.” As the House Report on the bill explains,

however, only one penalty lies for multiple

infringements of one work. .. (Citation and quotation

omitted).

Id. At 569.

19. The Court cannot discern from the Joint Pretrial

Stipulation whether each of the 900 acts of infringement

involved a separate work. This issue is further complicated by

the fact that there are three television stations involved, with

certain overlapping programs that had been licensed to one or

more of them.

20. The number of separate works infringed upon was not

raised by Feltner in the Joint Pretrial Stipulation as an issue for

the Court to determine. Feltner did not raise this issue at any

time before the trial. Additionally, Feltner did not introduce

evidence until the day after the close of evidence and just

before this Court’s ruling herein.

21. The Court must accept as the basis for its award of

statutory damages the parties’ stipulation that Feltner was

responsible for the unauthorized telecasts of MCA’s programs

on 900 separate occasions.

VI. AMOUNT OF STATUTORY DAMAGES

22. MCA has elected to receive statutory damages

pursuant to 17 U.S.C. § 504(c)(1), which it has the right to do.

Cable/Home Communication Corp. v. Network Productions,

Inc., 902 F.2d 829, 850 (11th Cir. 1990).

38a

23. The Court finds that Feltner’s infringements of

MCA’s copyrights were willful, not innocent, in nature.

Therefore, the statutory range for each such willful violation is

from $500 to $100,000. 17 U.S.C. § 504(c). The award of

damages within this considerable range is left to the discretion

of the Court.

24. In assessing the proper amount of damages to award

in a case like this, the Court considers the consequences of

these infringements by Feltner. First, it is clear that the

infringements have not destroyed MCA’s ability to license the

subject programs in the future. These violations, moreover,

have not limited MCA’s claims to recover contract damages.

However, copyright damages are quite unique and separate

from contract damages, and the proper amount of contract

damages may not govern or influence the proper amount of

Metro Program Network, Inc., 962 F.2d 775 (8th Cir. 1992).

25. At the same time, the Court recognizes that the

stations were able to sell advertising time for the programming

that they illegally aired. However, there was no testimony or

other evidence introduced as to the value of the advertising

received for any particular segment of the programming, so

there is not much to instruct the Court in this regard.

26. After weighing all of the facts and circumstances in

this case, the Court has determined that an award of $10,000

per violation is the proper amount of damage for each

infringement by Feltner. Therefore, MCA is entitled to a

judgment in the total amount of $900,000.

27. Due to the willfulness of Feltner’s infringements,

MCA is also entitled to recover its reasonable attorney’s fees

and costs pursuant to 17 U.S.C. § 505.

39a

In conclusion, the Court hereby makes the following

rulings: i

(1) Feltner’s Motion for Amendment of the Judgment

Order filed on October 28, 1994 is DENIED.

(2) Feltner’s Motion for New Trial filed on October 28,

1994 is DENIED.

DONE AND ORDERED in Chambers at West Palm

Beach Florida, this _2_ day of _March , 1995.

KENNETH L. RYSKAMP

UNITED STATES DISTRICT JUDGE

Copies provided:

Nathan Nason

Michael Beaudine

Philip Schwartz

40a

UNITED STATES DISTRICT COURT

SOL'TTHERN DISTRICT OF FLORIDA

Case No. 93-14213-CIV-DAVIS-[RYSKAMP]

MCA TELEVISION LIMITED, a Delaware Corporation

Plaintiff,

VS.

C. ELVIN FELTNER, JR., J. CLIFFORD CURLEY,

DANIEL S. DAYTON, and DOES 1 through 5.

Defendants.

ORDER CORRECTING FINDINGS OF FACT AND

CONCLUSIONS OF LAW

THIS CAUSE came before the Court upon discovery of

a Clerical error on page eight of the court’s Findings of Fact

and Conclusions of Law and Omnibus Order executed on

March 2, 1995. Please note that paragraph 26 which lists the

amount of judgment as $900,000, should read:

Therefore, MCA is entitled to a judgment in the

total amount of $9,000,000.

DONE AND ORDERED in Chambers at West Palm Beach,

Florida, this_6 day of _March , 1995.

KENNETH L. RYSKAMP

UNITED STATES DISTRICT JUDGE

copies provided:

Michael Beaudine

Philip Barry Schwartz

Nathan Nason

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.