Petition for Writ of Certiorari — Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. & Co. KG (No. 07-1371)

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TM Seo OR eee PRES AE

N z SON uae

O7137 1 APR 30 2008

wo. __ OFFI OF THE CLERK

| | In The |

Supreme Court of the United States

CAMBRIDGE LITERARY PROPERTIES, LTD.,

Petitioner,

Vv.

W. GOEBEL PORZELLANFABRIK G.m.b.H. &

CO. KG., and GOEBEL ART G.m.b.H.,

Respondents.

On Petition for Writ of Certiorari to the United

States Court of Appeals for the First Circuit

PETITION FOR WRIT OF CERTIORARI

HENRY HERRMANN

Counsel of Record

ONE LONGFELLOW PLACE

SUITE 3021

Boston, MA 02114

(617) 423-6096

Attorney for Petitioner

April 30, 2008

Becker Gallagher - Cincinnati, OH + Washington, D.C. - 800.890.5001

QUESTIONS PRESENTED FOR REVIEW

The Copyright Act does not provide for a non-

infringement accounting action by a claimed copyright

co-owner. The Act’s limitations section provides that

it governs actions “maintained under the provisions of”

the Act. The court of appeals (with a dissent) decided

this case was barred by the Act’s three year

limitations, which the majority below held must apply

since the case could “arise under” the Act

jurisdictionally. 3

Accordingly, the questions presented are:

1. Does the Copyright Act’s limitations Section

507(b) govern any action which “arises under” the Act

jurisdictionally, but which is not specifically provided

for in the Act (as per Second, Seventh, Ninth and First

Circuit law), or is the applicability of the Act’s

limitations section not co-extensive with the

jurisdictional scope of the Act, and can only apply to

actions maintained under the provisions of the Act (as

per Fifth Circuit law)?

2. Must a claimed co-owner of copyright in such a

disputed co-owner accounting claim first bring a

declaratory judgment action for co-ownership, or may

she plead co-ownership as an element of her

traditional state law “action of account”?

PARTIES TO THE PROCEEDINGS

There are no parties to the proceedings other than

those listed in the caption.

lll

RULE 29.6 STATEMENT

The petitioner Cambridge Literary Properties, Ltd.,

a Massachusetts business corporation, is not publicly

held and has no parent companies. The undersigned

attorney for the petitioner is the sole shareholder, but

not an officer or director, of this corporation.

;

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TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW ...... i

PARTIES TO THE PROCEEDINGS ........... ll

RUE 2o.0 RA REOMEING oo cece neces ill

TAR OF SAIC ENED 6 ccc ce cece wee iv

EPEAT CRGT ROMER EID 2. ete eee en vi

SO UUNE NURI os one ok ie ee ewe We we 1

II 35655556555) i'n 6245 he's wlerice ale ag we 1

STATUTORY PROVISIONS INVOLVED ....... 1

SiAeeomeee OF Lim CASE... cee cece 2

I, INERODUCTION §........ Fie Soe ME Pe ee ER 2

Ii. PROCEDURAL HISTORY OF THE CASE ... 3

iil FACTUAL BACKGROUND ............... 4

IV. THE PRIOR ADJUDICATIONS IN THIS

RR en cean Se aN ee ae Pale 6

REASONS FOR GRANTING THE PETITION ... 8

| UE, Gb gcd sic tet ae iwe ae eee wes 8

II. THE NATURE OF THE CONFLICT ........ 9

li. THE IMPORTANCE OF THE DECISIONAL

RENEE Ooi cb i's 0 av 6 55a Mowe ee woe ks 19

A. The Radical Reversal of the Traditional

Jurisdictional Analysis. ............... 19

B. Pores Bee. os ie ee

IV.THE MAJORITY OPINION’S

UNSUCCESSFUL ATTEMPT TO RECONCILE

GOODMAN WITH ITS OWN HOLDING, AND

WITH THE CIRCUIT COURT DECISIONS IN

CONFLICT WITH GOODMAN ........... 25

V. THE PETITONER WOULD PREVAIL ON THE

MERITS IN THE COURTS BELOW IF THE

LIMITATIONS DID NOT GOVERN THIS

RE ee Shea eset ON cn Cae Eee 30

IIE irs si a aw ko ewe aw ae 31

APPENDIX

Appendix A: December 13, 2007 First Circuit

SI See ects gy oN bos A Rea ee la

Appendix B: August 8, 2006 District Court

Order - Report and Recommendation ...... 53a

Appendix J: August 10, 2006 District Court

PND 556 vi Hho ew ee Saas 107a

Appendix D: March 21, 2000 Amended

SID kg x te add vw i wa Cake tame 109a

TABLE OF AUTHORITIES

CASES

mbridge Literary Properties, Ltd. v. W. bel

Porzellanfabrik, :

aon ©. oe oe viet. Cir. 2002) .... 2. cee eee 3

Gaiman v. McFarlane,

360 F. 3d 644 (7th Cir. 2004)........... passim

Goodman v. Lee,

78 F. 3d 1007 (5th. Cir. 1996), cert. denied,

Be AGO) ince ech ceeceees passim

Grable & Sons Metal Products, Inc. v. Darue

Engineering & Manufacturing,

UT ee ID cco bck was es ew eee eveus 19

Jackson v. Axton,

25 F. 3d 884 (9th. Cir. 1994) ........... 12 n.2

Johnson v. Berry,

228 F. Supp. 2d 1071 (E.D. Mo. 2002) ... 18n.6

Merchant v. Levy,

92 F. 3d 51 (2d Cir. 1996), cert. denied,

Ee Es Re CRED hi Se ew Res oe 12,13

Miller Music Corp. v. Charles N. Daniels, Inc.,

EE AS ETE ROE ekg sie eee aces bee eee 25

Oddo v. Reis,

743 F. 2d 630 (9th. Cir. 1984) ............. 10

Vii

Royal v. Leadin Products, Inc.,

883 F. 2d 1 (1st Cir. 1987) ............. 16 n.5

Spurgeon v. Scantlin,

502 F. Supp. 2d 1621 (W.D. Mo. 2007) ...... 18

Stewart v. nd,

OE PP ROOG) oh. coves Ree ees bee ee 25

Stone v. Williams,

Ore eee eee cae Cir. 1062) . ww. cee 12 .

T.B.Harms v. Eliscu,

339 F. 2d 823 (2d Cir. 1964), cert. denied,

Bee Me EO) nv bce eW cance vesccs 16, 17

Zuill v. Shanahan,

80 F. 3d 1366 (9th. Cir. 1996), cert. denied,

519 US. ONES 4.6. 6 d's hv OUR Mae oe 13

STATUTES |

Oe SOS 5 ids ce eb eel wee waren 5

ee ED oo ck eevee ee ee eae pe el passim

Be i vee Nid cs ce ow dees eee 1

ME on, ogc i's'ge vid ee eka eee 19, 24

LEGISLATIVE

UN eso 2s ew saw Ga ee ee 10

1967 S. Rep. No. 1014 (1967) ... 2... ee ee 22

viii

OTHER AUTHORITIES

1 DAN B. DOBBS, DOBBS LAW OF REMEDIES

§ 4.566) Cad Od. TOG) . oc cee cde ewes es 28

3 David Nimmer, Nimmer on Copyright,

ESA Sco veteceeees Sais N ead 12-13, 18

8 David Nimmer, Nimmer on Copyright, Appendix

(JB ae TD 8 a Sas ee 10

Gressman, SUPREME COURT PRACTICE, § 4.4 (9th.

OE 58 SEER CRRRS CTS PRE a eee 22

Don E. Tomlinson, 23 LOY. L.A. ENT. L. REV. 55

(+. | BERR SACRAS Se iiiat esi tra tty arden age) 11, 12, 13, 21

The petitioner respectfully prays that a Writ of

Certiorari be granted to review the judgment and

opinion cf the United States Court of Appeals for the

First Circuit, entered in this proceeding on December

13, 2007, wherein summary judgment was affirmed

against the petitioner on the grounds of the Copyright

Act’s statute of limitations.

OPINIONS BELOW

The opinion of the United States District Court for

tne District of Massachusetts (adopting the Report and

Recommendations of the Magistrate/Judge) is

published at 448 F. Supp. 244 (D. Mass. 2006) (App. B,

53a — 106a). The Opinion of the United States Court

of Appeals for the First Circuit is published at 510 F.

3d 77 (1st. Cir. 2007) (App. A, 1a — 52a).

JURISDICTION

The judgment of the Court of Appeals for the First

Circuit was entered on December 13, 2007. Upon

application by the petitioner, Justice Souter extended

the time to file this petition to and including April 11,

2008. Upon a further application by the petitioner,

Justice Souter extended the time to file this petition to

and including April 30, 2008. This Court has

jurisdiction pursuant to 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

The focal point of this petition are the words

“maintained under the provisions of” in the limitations

section of the Copyright Act of 1976, 17 U.S.C. § 507(b)

which provides:

‘b) Civil Actions — No civil action shall be

maintained under the provisions of this title

unless it is commenced within three years

after the claim accrued.

STATEMENT OF THE CASE

I. INTRODUCTION

The petitioner, claiming to be the co-owner of the

United States copyright renewal in a book, claims an

accounting from the other co-owners (the respondents)

for their profits from the utilization of the copyright.

Summary judgment was granted (and affirmed)

against the petitioner on federal statute of limitations

grounds, and the case at its present procedural state

hinges on the question whether the Copyright Act’s

(the “Act”) limitations or state law limitations govern

this civil action. That issue, in turn, is subject to a

determination whether this action, even ifit can “arise

under” the Act jurisdictionally, can be “maintained

under the provisions” of the Copyright Act (which is

the statutory criterion for the applicability of its

limitations section 507(b)).

In deciding that this case was stale, the First.

Circuit majority held that since this case could “arise

under” the Act for federal subject matter jurisdiction,

the Act’s limitations must apply.

In a lengthy dissent, Judge Cyr cited a decision by

the Fifth Circuit, and maintained that there is a

distinction between the jurisdictional “arising under”

test, and the “maintained under the provisions” of the

Act determination in applying the Act’s limitations

(App. 42a — 49a, 44a n.21).

Furthermore, Judge Cyr characterized the

“ramifications” of the majority’s holding as “potentially

: pernicious”. (App. 29a)

IL PROCEDURAL HISTORY OF THE CASE

This civil action was commenced on February 24,

2000 (App. 80a), but no answer has been yet filed;

there has only been motion practice and one prior

appeal. In the prior appeal, the First Circuit vacated

' the District Court’s Rule 12(b)(2) F.R.C.P. dismissal

(for lack of personal jurisdiction) of the claims against

the present respondents. Cambridge Literary

‘Properties, Ltd. v. W. Goebel Porzellanfabrik, 295 F.

3d 59, 67 (1st. Cir. 2002). On remand, on December

17, 2003, the District Court denied respondents’

motion to dismiss under Rule 12(b)(6) F.R.C.P. without

prejudice to re-file as a summary judgment motion

after limited discovery. Respondents moved for

summary judgment (on statute of limitations and issue

preclusion grounds) on November 22, 2004. On August

8, 2006, in a brief Memorandum and Order, the

District Court adopted, without change, the

Magistrate Judge’s Report and Recommendation of

March 14, 2006, to which petitioner had objected, and

entered Summary Judgment against petitioner on

August 10, 2007. The District Court granted summary

judgment on the basis of the statute of limitations

defense, but rejected the issue preclusion defense.

Petitioner appealed. The First Circuit, on

December 13, 2007, affirmed the District Court’s

judgment, on statute of limitations grounds, but did so

on the basis of a rationale differing from that of the

District Court (instead of a pre-emption analysis the

majority below employed “parallel reasoning” to a

jurisdictional analysis — App. 17a). The First Circuit

neither reached nor mentioned the respondents’ issue

preclusion defense, and did not hear argument on it.

Il. FACTUAL BACKGROUND

Petitioner is the assignee of all the heirs of the next

of kin of the late Margarete Seemann (“Seemann”), a

Viennese poet who, together with the late Franciscan

Sister Berta (M. Innocentia) Hummel (“Berta

Hummel”), created an illustrated book of verse entitled

“Das Hummelbuch” (the “Book”) published in 1934 in

Germany. Petitioner asserted that Berta Hummel’s

graphic works from the Book were the basis of the

well-known collectibles known as Hummel figurines

(App. 11a), manufactured by the respondent W. Goebel

Porzellanfabrik (“W. Goebel”). (ibid). Seemann died

in 1949 in Vienna.

The German publisher of the Book, Emil Fink

Verlag (“Fink”), copyrighted the Book in the United

States in 1936, listing, in the application to the U.S.

Seemann” (of Germany and Austria, respectively) as

joint authors of the work. (App. 117a, (34; App. 34a,

n.16(ii)). The current additional certificate of

SEN Vt ne OTe ae}

entitled by statute to prima facie evidence effect in this

litigation under 17 U.S.C. §410(c). (ibid).

The Book copyright was validly renewed in the

United States in 1962. (App. 58a-59a). The petitioner

asserted that under the then-governing United States

her sister Theresia Romanowicz, succeeded to

Seemann’s statutory right to the Book Renewal,

thereby acquiring an undivided interest, with Fink

and Berta Hummel’s heir, in the United States

Renewal Copyright. (App. 119a-121a, {]41-51).

In 1971, respondent W. Goebel purchased Fink’s

tenancy in common in the Book Renewal. Thereafter,

as a result of decades of litigation between W. Goebel

and its former U.S. distributor (claiming as the

assignee of Berta Hummel’s heir), and several mesne

assignments, the undivided legal proprietorship of the

Book Renewal was in Goebel Art, with W. Goebel

retaining an important beneficial interest, and

petitioner (claiming as assignee of Seemann’s

successors) claiming a joint ownership in equity.

Seemann’s sole surviving next of kin in 1962

(copyright renewal), Theresia Romanowicz, died in

Vienna in 1970. Under the probate decree of an

Austrian court, her estate went to her daughter and

niece (the “Vienna Heir” and the “Belgrade Heir”,

respectively) defined in the Amended Complaint as the

“Romanowicz Heirs” (App. 40a, 44 50-51).

The Vienna Heir and the Belgrade Heir assigned to

petitioner in seriatum (in 1995 and 1999 respectively),

all their right, title, and interest in the Book Renewal,

together with any and all of their related claims

against third parties. (App. 12la, 752). These

assignments were obtained for the corporate petitioner

by its undersigned attorney, who was, and remains, its

sole shareholder.

Petitioner brought this action against respondents

W. Goebel Porzellanfabrik and Goebel Art, as tenants-

in-common in the Book Copyright Renewal, for an

accounting of revenues obtained from their sale of

products derived from the Book. (App. 110a, { 1).

IV. THE PRIOR ADJUDICATIONS IN THIS CASE

In the three phases of this summary judgment

motion adjudication (Magistrate Judge, District Judge

on objections to Report, and the appeal to the First

Circuit), the central, indeed dominating, issue has

been whether the federal three-year statute of

limitations provided for in the Copyright Act’s section

507(b) governs this action.’ Petitioner has consistently

argued that it is the state (Massachusetts) six-year

limitations for contract actions which governs instead.

This action was commenced on February 24, 2000

(App. 80a), more than three years, but less than six

years, from the 1995 accrual year determined by both

the District Court and the First Circuit (while

" There were other related issues that are not among the

questions presented for review in this Petition, such as the date(s)

of accrual, and whether the limitations had been tolled.

petitioner has contested those accrual dates, that issue

is not one of the questions presented for review). The

district court below (applying a three year’s

limitations) granted summary judgment on the

grounds that the cause of action, based on the two in

seriatum assignments of rights to the petitioner,

accrued “in 1995”. (App. 82a & App. 83a). The

majority below determined accrual to have been “no

later than September 1995” (App. 23a) and “by 1995”

(App. 27a).

The Magistrate Judge, the District Judge, and the

First Circuit majority all decided that this action was

governed by the Act’s limitations provided for in

§ 507(b); however, they decided thus on different

grounds.

The Magistrate Judge (with whom the District

Judge concurred) decided (App. 68a-69a) that this

action was pre-empted by the Copyright Act (and also

rejected petitioner's “well pleaded . complaint”

argument on “complete pre-emption grounds).” (App.

76a). Thereafter, the Magistrate Judge decided that

the Act’s limitations applied, and rejected the Fifth

Circuit’s rule on this point as “against the weight of

authority” (citing the Second, Sixth, and Ninth

Circuits). (App. 79a).

On appeal, the First Circuit declined to reach and

decide the pre-emption issue; rather, the majority

below applied what it termed “parallel reasoning” to

an “arising under” federal subject matter jurisdiction

analysis. The Court held that the accounting claim

was “premature” since petitioner had not sought a

declaratory judgment of co-ownership, but had merely

pleaded co-ownership as part of its accounting claim;

further, the majority below held that since the claim

for an accounting was predicated on a claim of co-

ownership of copyright, and since that claim of co-

ownership would involve construction of the Act, this

action could “arise under” the Act jurisdictionally, and

was therefore governed by (and barred by), the Act’s

limitations. (App. 16a — 17a).

It is undisputed that the district court had subject —

matter jurisdiction on diversity grounds. However, in

holding that this action was “maintained under the

provisions of” the Copyright Act, for federal limitations

purposes, the majority below employed “parallel

reasoning’ (App. 17a) to a judicial analysis of whether

there was federal subject matter jurisdiction (even

absent diversity). See dissent at App. 30a, n.14: “The

jurisdictional analysis is relevant only to the question

whether the claim is ‘maintained’ under the Copyright

. Sead

REASONS FOR GRANTING THE PETITION

I. INTRODUCTION

The court below affirmed summary judgment

against the petitioner on the grounds that the action

was barred by the federal three-year limitations

provision (§ 507(b)) of the Copyright Act of 1976. In

holding that the Copyright Act’s limitations

applicability is co-extensive with the Act’s

jurisdictional scope, the decision of the majority below,

and the other circuit courts of appeals which it

followed, conflicts with the law of the Fifth Circuit,

under which the case at bar would have been timely

filed.

The grant of summary judgment in this case hinged

upon the construction of a federal statute, in the

presence of a clear and true conflict between the

decisions of the federal courts of appeals.

The central, indeed ultimate, issue which

determined the outcome of summary judgment

proceedings (to the prejudice of petitioner) presented

a true and important conflict between the decisions of

the federal courts.of appeals. This conflict, moreover,

involves the construction of an important federal

statute (the Copyright Act), and significantly involves

the federal versus state substantive law dichotomy.

Further, this conflict leads to forum shopping among

the federal circuits.

Il. THF NATURE OF THE CONFLICT

The Copyright Act of 1976 (Title 17 U.S.C.)

(hereinafter the “Act”) has a provision for a statute of

limitations in civil actions (§ 507(b)), which states:

No civil action shall be maintained under the

provisions of this title unless it is commenced

within three years after the claim accrued.

The issue presented in the conflict between the

federal courts »f appeals is the scope of the

applicability of that subsection in copyright co-owner

disputes, namely, whether § 507(b) governs only civil

actions maintained under the provisions of the Act

(infringement actions and statutory royalties), or,

whether any civil action which arises under the Act for

federal subject matter jurisdiction purposes is also

governed by the Act’s limitations.

To place the dispute concerning the wording of the

Act’s limitations section in the proper context and

perspective, it should be noted at the outset that it is

undisputed that the Act does not “provide” for

accounting actions between copyright co-owners. This

was discussed by the dissent below. (App. 43a-44a). As

the legislative history to the Omnibus Copyright Act

Revision states:

There is ... no need for a specific statutory

provision concerning the rights and duties of

coowners of a work; court-made law on this

point is left undisturbed. Under the bill, as

under the present law, coowners of a copyright

would be treated generally as tenants in

common, with each coowner having an

independent right to use or license the use of a

work, subject to a duty of accounting to the

other coowners for any profits. :

H.R. Rep. No. 1476 (1976) (reproduced in 8 David

Nimmer, Nimmer on Copyright, Appendix at p. 4-113)

(1963 & Supp. 2000).

This is reinforced in the leading case of Oddo v.

Reis, 743 F. 2d 630, 633 (9th. Cir. 1984), quoted in

Goodman v, Lee, 78 F. 3d 1007, 1012 (Sth. Cir. 1996),

cert. denied, 519 U.S. 861 (1996) (the Fifth Circuit on

one side of the decisional conflict): “Significantly, ‘the

duty to account does not derive from the copyright

law’s proscription of infringement. Rather, it comes

from “. .. general principles of law governing the rights

of co-owners.”” (footnote omitted, emphasis by the

court). This also reflects the position of the dissent

below, which cited this legislative history (App. 43a)

and the aforementioned case law (App. 43a — 44a, 44a

n.21).

The conflict presented by the differing

constructions of the words in § 507(b) “maintained

under the provisions” has engendered a law review

article specifically dedicated to the subject, as its title

shows:

FEDERAL VERSUS STATE JURISDICTION

AND LIMITATIONS VERSUS LACHES IN

SONGWRITER DISPUTES: THE SPLIT

AMONG THE FEDERAL CIRCUITS IN LET

THE GOOD TIMES ROLL, WHY DO FOOLS

FALL IN LOVE?, AND JOY TO THE WORLD

(Don E. Tomlinson, 23 LOY. L.A. ENT. L. REV. 55

(2002).)

This article, in somewhat colorful fashion, begins by

showing the practical results to the litigants in the

conflicting federal circuits:

For songwriter Shirley Goodman, the “good

times rolled” (at least judicially). For

songwriters Herman Santiago and Jimmy

Merchant, “fools” may be a more apt

description. .. . Notwithstanding any statutory

limitations or equitable laches defenses, the

Fifth Circuit declared Shirley Goodman as co-

writer of Let the Good Times Roll, and awarded

Meee Het, a

isd

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See

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BD dy

aes

Be 3

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sch abate

her more than $600,000 in writing and

publishing royalties. On the other hand, after

being declared co-writers of Why Do Fools Fall

In Love? by the Second Circuit, Herman

Santiago and Jimmy Merchant were disallowed

any recovery on the theory that the limitations

provision of the Copyright Act barred their

damages claim. (Tomlinson, supra, at 55-58)

(footnotes omitted).

Professor Tomlinson focused on the split between

the Fifth Circuit in Goodman v. Lee, supra at 10, and

the Second Circuit in Merchant vy. Levy, 92 F. 3d 51

(2d Cir. 1996), cert. denied, 519 U.S. 1108 (1996). He

also argued that these precedents have a much. wider

application in copyright law than merely songwriter

disputes. See infra at 21.

The Second Circuit, in Stone v. Williams, 970 F. 2d

1043 (2d Cir. 1992) was the first Court of Appeals to

apply the Act’s three-year limitations in copyright co-

ownership accounting disputes. As a prominent

treatise has summarized the ensuing decisional

dispute, “On parallel facts involving a long-concealed

co-ownership claim of a song, another court applied the

Louisiana statute of limitations—ten years from

demand—instead of the Copyright Act’s three-year

* The third case included in Professor Tomlinson’s title, (“Joy to

the World”), Jackson v. Axton, 25 F. 3d 884 (9th. Cir. 1994), is not

relevant to the issues in this petition, since “At issue in this case

[Jackson] is laches, not the statute of limitations.” Ibid, at 887,

n.2.

statute.” (citing Goodman, supra, emphasis added) 3

Nimmer on Copyright, §12.05[C][1] at 12-150.11 n.98.

Subsequently, in 1996, the Second Circuit again

applied the Act’s three-year limitations in a co-

ownership accounting dispute (Merchant, supra) and

the Ninth Circuit also did so in Zuill v. Shanahan, 80

F. 3d 1366 (9th. Cir. 1996), cert. denied, 519 U.S. 1090

(1997).

As professor Tomlinson notes (Tomlinson, supra at

11, at 56), this Court denied certiorari in these

conflicting cases when they were decided in 1996.

However, the decisional dispute between the Fifth

Circuit (Goodman) on one hand, and the Second and

Ninth Circuits (Merchant and Zuill) on the other hand,

has been brought into even sharper focus, in another

co-ownership accounting dispute, by the decision of the

Seventh Circuit (while the case at bar was pending) in

Gaiman v. McFarlane, 360 F. 3d 644 (7th Cir. 2004).

What the Second and Ninth Circuits seemed to do

implicitly, Gaiman (and the majority below which

followed it) did explicitly; Gaiman _ explicitly

contradicted the Fifth Circuit’s holding in Goodman

since Gaiman held that any case that arises under the

the Act’s limitation section 507(b). Accordingly, this

presents a mature, expanding, and more focused

decisional conflict.*

* See p. 18, infra, and p. 18, n.6, infra for the expansion of this

conflict in the district courts in the Eighth Circuit, which has not

as yet decided this issue.

The Fifth Circuit in Goodman carefully

distinguished between the federal subject jurisdiction

test of “arising under” and the substantive cause of

action test of “maintained under the provisions of” in

the Act’s limitations section:

Section 507(b) of the Copyright Act provides

that “[n]o civil action shall be maintained under

the provisions of this title unless it is

commenced within three years after the claim

accrued.” But this case does not present an

action that is “maintained under the provisions”

of the Copyright Act. The Act details at length

precisely which civil actions and remedies are

available for copyright infringements. Nowhere

in the Act, however, do its provisions detail any

action available to a co-owner for an accounting.

... [S]Juch an action is governed by state law.

Consequently, even though the case requires an

interpretation of the Copyright Act’s definition

of a joint work-—-thereby compelling the

assumption of federal jurisdiction—the action is

not being maintained under the provisions of

the Copyright Act: There are no provisions in

the Act establishing or governing such an

action. Accordingly, we reject the [defendants’]

contention that the three-year statute of

limitations set out in §507(b) governs [the

plaintiff's} claim.

Goodman, supra, at 1013 (footnotes omitted)

(emphasis by the court).

In diametrical opposition, the Seventh Circuit in

Gaiman held that the scope of the Act’s limitations

was automatically co-extensive with the jurisdictional

parameters of the Act:

Gaiman seeks a declaration that he is a co-

owner, which depends on whether his

contribution to the comic-book characters in

question gave him a copyright interest. That

question, on the answer to which his

entitlement to an accounting and other relief

depends, cannot be answered without reference

to the Copyright Act, and it therefore arises

under the Act.

ee eee eae

(Gaiman, supra, at 652-653) (citations omitted,

emphasis by the court)

The question whether Gaiman has a copyright

is central, and the Act’s three-year statute of

limitations, which applies to any suit arising

under the Act, and not just to a suit for

infringement (for section 507(b) reads: “No civil

action shall be maintained under the provisions

of this title unless it is commenced within three

years after the claim accrued”), is therefore, as

the parties agree, clearly applicable to this

case.*

(Gaiman, supra, at 653, emphasis added.)

‘In Gaiman, the parties agreed with the court's application of the

Act’s limitations. We do not know why that plaintiff agreed (to his

detriment), but, as discussed infra., at pp. 16-17, the First Circuit

explicitly followed Gaiman (with petitioner in the strongest

disagreement therewith in the courts below).

The decisional conflict between the Seventh Circuit

(Gaiman) and the Fifth Circuit (Goodman) is directly

manifested in the decision of the court below: On one

hand, the majority explicitly followed Gaiman, and

citing to the two pages in Gaiman referred to above,

the majority held: “Where an ownership claim arises

under the Copyright Act, the Act’s three-year statute

of limitations likewise applies.” (App. 16a & 17a). On

the other hand, the dissent cited Goodman with

approval (App. 32a, 43a, 50a, and again at App. 44a,

n.1) (summarizing Goodman’s distinction between

“arising under” and “maintained under”).

The inherent and irreconcilable nature of this

decisional conflict can also be demonstrated by

reference to the generally-accepted jurisdictional test

whether a case “arises under” the Copyright Act. This

is the so-called “T.B. Harms test”, as formulated by

Judge Friendly in T.B.Harms y. Eliscu, 339 F. 2d 823

(2d Cir. 1964), cert. denied, 381 U.S. 915 (1965). This

test for original federal subject matter jurisdiction was

referred to by the majority below (App. 17a) when it

employed reasoning “parallel” to a jurisdictional

analysis. The T.B. Harms test was also referred to by

the dissent. (App. 39a, n.20).°

® The District Court below (at App. 67a-682) in quoting the T.B.

Harms test, referred to it as the “most frequently cited test”, and

noted that both petitioner and respondents “rely on this

standard”. (ibid at App. 68a). See, Royal v. Leading Edge

Products, Inc., 883 F. 2d 1, 2 (1st Cir. 1987), the most frequently

cited test... .”

She OTE Soe

heb i siti Bye

Judge Friendly in T.B. Harms formulated the test

as follows:

Mindful of the hazards of formulation in this

treacherous area, we think that an action

“arises under” the Copyright Act if and only if

the complaint is for a remedy expressly granted

by the Act, e.g., a suit for infringement or for

the statutory royalties for record reproduction,

or asserts a claim requiring construction of the

Act, as in De Sylva, or, at the very least and

perhaps more doubtfully, presents a case where

a distinctive policy of the Act requires that

federal principles control the disposition of the

claim.

(T.B. Harms, supra, at 828.)

An analysis of the Goodman holding shows that the

Fifth Circuit would only apply the Act’s limitations

section 507(b) to a case arising under the first criterion

of the T.B. Harms test (“a remedy expressly granted by

the Act”) (that is, “maintained under the provisions” of

the Act); in contrast, the Seventh Circuit in Gaiman

would apply the Act’s limitations to any case arising

under any of the three criteria of the T.B. Harms test,

since Gaiman held that “the Act’s three-year statute of

limitations . . . applies to any suit arising under the

Act, ...”, Gaiman, supra, at 653, quoted supra at 15,

emphasis added). Gaiman, the First Circuit, (and the

other courts of appeal decisions in conflict with

Goodman) therefore radically expand the applicability

of the Act’s limitations.

The District Court below treated the matter as a

true decisional conflict, and, after having summarized

the Goodman decision at length, summarily rejected

Goodman as being “at odds with the weight of

authority.” (App. 79a). Nimmer, supra, at pp. 12-13 in

recognizing the decisional conflict, quoted this

language from the district court’s decision.®

Furthermore, in another copyright cc-ownership

accounting dispute, the Seventh Circuit’s Gaiman

decision has been followed last year by a federal

district court in the Eighth Circuit: “Accepting the

guidance of an opinion by Judge Posner [in Gaiman],

in the absence of better statements of the law in this

Circuit, I conclude that the three-year statute is

probably applicable to the claim presented ... .”

Spurgeon v. Scantlin, 502 F. Supp. 2d 1021, 1025

(W.D. Mo. 2007) (citing Gaiman and the decision of the

district court in the case at bar).

The majority below attempted to reconcile

Goodman with Gaiman and with its own decision, but

we respectfully submit that this was unsuccessful, as

is discussed infra in Section IV, p. 25).

* See Johnson v. Berry, 228 F. Supp. 2d 1071, 1076 (E.D. Mo.

2002), where the district court suggested that Goodman had been

“wrongly decided” (ergo, a recognition of the decisional conflict),

but said that, in the alternative, Goodman was distinguishable

because there had been a verdict of co-ownership and that the

case had been timely filed (apparently under a “discovery rule”);

however, there is nothing in the Goodman decisions to indicate

that the court had applied the Copyright Act’s limitations section.

Ill. THE IMPORTANCE OF THE DECISIONAL

CONFLICT

A. The Radical Reversal of the Traditional

Jurisdictional Analysis.

It is well settled that the question whether the

complaint presents a federal cause of action/remedy is

an element in the federal subject matter jurisdictional

analysis. See, e.g., Grable & Sons Metal Products, Inc.

v. Darue Engineering & Manufacturing, 545 U.S. 308

(2005), which the dissent discusses at length (App. 36a

— 41a).

The majority below, Gaiman (which it follows), and

the other circuit courts in conflict with the Fifth

Circuit in Goodman radically reverse this analysis,

and by doing so, distort the traditional federal versus

state substantive law dichotomy. Goodman explicitly

declines to do so.

If the limitations section of the Copyright Act

(§ 507(b)) were of the “typical” kind (see App. 44a,

n.21), that is, referring to “arising under” rather than

“maintained under’ (see, e.g., 28 U.S.C. § 1658, federal

limitations — “arising under”), then the test for

§507(b)’s applicability would simply involve a vel non

determination of federal subject matter jurisdiction.

However, given the wording of § 507(b), in order to

apply the Copyright Act’s limitations, the majority

below, and Gaiman which it follows, of necessity are

conflating the jurisdictional analysis with the

substantive law classification analysis. That is

because unless one eviscerates the words of § 507(b)

(“maintained under the provisions”) of their meaning,

Gaiman and the majority below are in effect

classifying any action/remedy in a case “arising under”

the Act as a federal action/remedy. Otherwise, how

could the action possibly be “maintained under the

provisions of” the Act? Thus, for example, in a case

which “arises under” the Act merely because it

requires a “construction of the Act” (the second

criterion of the “T.B. Harms test”—see supra at 17),

the majority below and Gaiman would (if they apply

the Act’s limitations) automatically classify the

action/remedy as “maintained under”, that is, federal.

Therefore, instead of ascertaining the presence or

absence of a federal cause of action as a jurisdictional

determinant, Gaiman and the majority below reverse

the process and make the substantive federal versus

state substantive law classification dependent on the

federal jurisdictional analysis. This radical innovation

also distorts the traditional federal versus state

substantive law dichotomy.

By specifically declining to conflate the

jurisdictional and the substantive law analysis,

Goodman is in conflict with Gaiman and the majority

below (supra at 14). Accordingly, the petitioner

submits that this circuit court split presents an

important issue (involving an important federal

statute) with regard to the federal versus state

substantive law dichotomy.

B. Forum Shopping

Professor Tomlinson in his article (quoted supra pp.

11-12) argued that this decisional conflict was of

sufficient moment to warrant review and resolution by

this Court because “In the context of the splits in the

cases that are the subject in this Article, resolution is

necessary so that the law will be nationally uniform

and to prevent forum shopping.” Tomlinson, supra, at

11 above, at 78.

Further, Professor Tomlinson argued that “Music

a considerable portion of any federal court’s docket,

- but the precedents set in these cases have a much

wider application to all areas of copyright law.” ibid.

at 11, at 56 (footnote omitted).

Since the publication of this article in 2002, the

Seventh Circuit decided Gaiman in 2004 (and the

majority below followed it), which rendered the conflict

into even sharper and more explicit focus. This

dispute is also manifested among the district courts in

the Eighth Circuit as discussed supra at p. 18 and n.6.

We submit that this presents a well-developed and

expanding conflict between the circuits.

Currently, there is in effect a “two tier” forum

shopping opportunity, namely forum shopping among

the circuits (Fifth versus Seventh, Second, Ninth, and

First) and forum shopping among the federal district

courts in the Fifth Circuit (since those district courts

would apply state law limitations).

Petitioner must admit at this point that Professor

Tomlinson’s call for uniformity, if the Fifth Circuit

Goodman rule (which petitioner relies on) prevails,

would only bring about uniformity among circuit court

law. There would obviously be no uniformity among

the several district courts (the “second tier”) since they

would be applying state law limitations.

However, we respectfully submit that it is

uniformity among the circuit court decisions that is the

primary focus of this Court’s certiorari jurisdiction in

such an instance. “One of the primary purposes of the

certiorari jurisdiction is to bring about uniformity on

these matters [federal law] among the federal courts of

appeals.” (Gressman, SUPREME COURT PRACTICE,

§ 4.4 at 242 (9th. ed. 2007). Ifthis Court were to grant

this petition, and, on the merits, were to favor the

Goodman rule, then any lack of uniformity among the

district courts would be the result of diverse state

laws, which would govern as a result of this court's

adjudication of federal law, namely, the interpretation

of an important federal statute. :

Moreover, we submit that Congress has shown no

intent or policy favoring a uniform federal limitations

for copyright related causes of action or remedies not

provided for in the Copyright Act. Accordingly, a focus

on circuit law uniformity would not be at odds with

legislative policy.

To begin with, the legislative history of the Act’s

limitations in civil actions, § 507(b) (section unchanged

from the 1909 Act, H.R. No. 94-1476 at 4174) shows

that the legislative focus was exclusively on

infringement actions, and the need for a uniform

limitations provision governing them., See 1957 S.

Rep. No. 1014 at 1962, 1965 (1957). That readily

explains the divergence of § 507(b)’s “maintained

under” from the more commen “arising under”

terminology in other federal limitations provisions as

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was noted by the dissent below (App. 44a, n.21)

(commenting on the “evidence of a lack of

Congressional intention” because 507(b)’s divergence

from the “typical fashion”, that is, “arising under”).

The legislative history shows that with regard to

the duration of the proposed limitations, the Senate

Report stated, at 1962, that “Naturally the makers of

motion pictures and the publisher of songs and books

and other works of art are interested in obtaining a

shorter statutory period while persons who might have

their copyrights infringed are interested in a longer

_ period.” (emphasis added). Incorporated by reference

in the Senate Report, at 1964, are the reports from the

Library of Congress and the Department of Justice.

The former, in commenting on the nature of the

limitations, states at 1965: “It is believed that the

nature of copyright infringement, together with the

relatively short period of limitation proposed in the

bill, warrants the conclusion that a limitation on the

remedy {and not the substantive right] is appropriate.”

(emphasis added). The Justice Department Report, at

1965, states that “However, the Code [the Copyright

Act of 1909] provides no specific period of time within

which civil actions must be instituted. As a result,

civil actions for the infringement of copyrights are

limited by the law of the state where the action is

brought.” (emphasis added).

Furthermore, the location of this limitations

provision within the Copyright Acts of 1909 and1976

is significant. When enacted in 1957, as § 115(b) of the

1909 Act, it was in Chapter 2, entitled

“INFRINGEMENT PROCEEDINGS”. When re-

enacted without change in the Copyright Act of 1976

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as § 507(b), it was in Chapter 5, entitled “COPYRIGHT

INFRINGEMENT AND REMEDIES”.

When the Copyright Act of 1976 was enacted after

extremely extensive congressional study, it would have

been simple in the extreme to have substituted the

words “arising under” for “maintained under the

provisions” in § 507(b), had there been a legislative

policy for expanding the reach of the Copyright Act’s

limitations to be co-extensive with the Act’s

jurisdictional scope.

Moreover, Congress employed the more “typical”

provision (“arising under”) in enacting 28 U.S.C. 1658

(a four-year limitations for claims arising under

federal statutes which do not provide a limitations

period). However, Congress chose to “grandfather”

federal statutes enacted prior to December 1, 1990.

(ibid).

There is therefore no Congressional policy for a

federal limitations for any case that arises under a

federal statute. That is what Gaiman does by judicial

fiat, without explanation, by conflating “arising under”

with “maintained under”. And that is what the

majority below did (App. 14a) in stating that it would

be “contrary to congressional language and intent” to

not apply the Act’s limitations section.

We submit that the “Congressional language” is

clear (in limiting the applicability of this limitations

section), and is not compatible with the majority

decision, and that, further, thus far, there is no

showing of any congressional “intent” to radically

extend the reach of the Copyright Act’s limitations

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section. We therefore submit that in the certiorari

jurisdiction context the importance of this decisional

conflict is the forum shopping among the federal

circuits on federal law. Any issue of forum shopping

among the district courts applying diverse state law

limitations (in non-infringement copyright related

cases) is one for the legislature, which has thus far

repeatedly declined to address the matter for half a

century.

Furthermore, this Court has made it clear that the

function of the judiciary is to construe the Copyright

Act, rather than improving its provisions or policy,

which is for the Congress. See, e.g., Stewart v. Abend,

495 U.S. 207, 236 (1990): “Whether or not we believe

that this is good policy, this is the system Congress has

provided, as evidenced by the 1909 [Copyright] Act

.... Although the dissent’s theory may have been a

plausible option for a legislature to have chosen,

Congress did not so provide.” (emphasis added), and

Miller Music Corp. v. Charles N. Daniels, Inc., 362

U.S. 373, 378 (1960): “Whether it [the Copyright Act]

works at times an injustice is a matter for the

Congress, not for us.”

IV. THE MAJORITY OPINION’S

UNSUCCESSFUL ATTEMPT TO RECONCILE

GOODMAN WITH ITS OWN HOLDING, AND

WITH THE CIRCUIT COURT DECISIONS IN

CONFLICT WITH GOODMAN

In contrast with the District Court, the First

Circuit majority attempted to reconcile Goodman

rather than rejecting it. We respectfully submit that

this attempt is unsuccessful for the following reasons.

The majority (at App. 19a) stated that “The

Goodman decisions are entirely consistent with the

prevailing view ...” (emphasis added); that in itself

seems somewhat contradictory. Further, the majority

stated (App. 18a): “That case [Goodman] does not

support Cambridge’s position; it does support our view

of the case.”

The majority's rationale for reconciliation was that

in Goodman, the accounting issues “only arose

following a proper determination of copyright

ownership under the Copyright Act.” (App. 19a). The

majority thus treated Goodman as two distinct

controversies (i.e., ownership and accounting): This

conceptual “bifurcation” of the Goodman decision is in

essence consistent with the respondents’ erroneous

argument below that the declaratory judgment of co-

ownership was in an earlier case. However, it must be

emphasized that the Goodman case, although lengthy

and procedurally complex, is one single case, as is

detailed in Goodman’s summary of the proceedings. 78

F. 3d at 1009-1010.

The attempt to “bifurcate” the Goodman case is

unsuccessful, if one analyzes the essential perquisites

of any accounting action, be it between co-owners of

noted (App. 12a), a plaintiff in a case for an accounting

by a putative co-owner of copyright, must as part of

her affirmative case establish her ownership rights if

they are not admitted. (App. 12a-13a). Now, that can

be accomplished in two ways: the plaintiff can plead

(and be prepared to prove) the basis for co-ownership

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as the petitioner did’, or, in the alternative, the

plaintiff, if the facts justify it, can seek a declaratory

judgment for co-ownership with a further cause of

action for an accounting (which the Goodman plaintiff

did).

The majority below first indicated that petitioner

should of necessity have sued for a declaration of co-

ownership as a prerequisite for an accounting action

rather than following alternative one above (pleading

the basis of co-ownership as an integral element of a

traditional action of account). Petitioner submits that

there is no authority for the majority’s proposition.

The majority stated that the accounting claim was

“premature” (App. 4a) because petitioner “did not seek

an adjudication of its ownership rights” as a

prerequisite for its “remedy” (App. 3a), but the

majority then equivocated by stating that in such cases

“plaintiffs usually raise this threshold issue by seeking

a declaratory judgment for ownership.” (App. 13a)

(citations omitted, emphasis added).

As the dissent below notes, the case at bar is

distinguishable from those cases in which a

declaratory judgment was sought. (App. 29a-31a).

The petitioner did not have to sue for a declaratory

judgment to resolve the ownership issue but, rather,

was entitled to plead ownership as part of its

affirmative case. It should be noted that in claiming a

right to an accounting, the petitioner is not merely

? The petitioner did so at length in its Amended Complaint, see

App. 115a-121la, 9922-52.

seeking an ancillary remedy. What the petitioner's

Amended Complaint constitutes is a_ traditional

independent action of account, which is an

independent cause of action. The leading multi-

volume treatise on remedies has stated the principle

succinctly: “Today, the accounting may be pursued as

a separate cause of action or as incidental to some

other claim.” 1 DAN B. DOBBS, DOBBS LAW OF

REMEDIES § 4.3(5) at 611 (2d ed. 1993) (emphasis

added). Further, while the term “accounting”

describes an equitable remedy, it is not merely that.

An accounting is also a historically-established legal

form of action, and, in modern procedural history, an

equitable action named “an action for accounting”

which seeks a remedy by the same name. See DOBBS

LAW OF REMEDIES, supra at 608, 609 (emphasis

added).

The petitioner’s Amended Complaint pleaded the

basis for co-ownership (see pp. 26-27, 27 n.7, supra).

If, arguendo, the pleading shows a need for a

construction of the Copyright Act, that would result in

a jurisdictional determination that the case arises

under the Copyright Act. That would not of necessity

mean (as Gaiman and the majority below maintain)

that the entire case (including the ownership issue) is

“maintained under the provisions” of the Act as per

§ 507(b).

In Goodman, the plaintiff raised the co-ownership

issue by means of a declarato~y judgment action

(Goodman, supra, at 1009). However, contrary to the

majority reading of the Goodman decision, the

Goodman court’s analysis was that of a single case.

The Fifth Circuit did not hold, or even imply, that

because the ownership issue necessitated the

construction of the Act, the case itself was “maintained

under the provisions” of the Act; on the contrary the

court held that because there was a need to construe

the Act, the case arose under the Act for jurisdictional

purposes. (Goodman, at 1013, quoted supra at 14).

The decisions in Goodman, further, merely show that,

under a “discovery rule”, the case had been timely

filed. Gibid at 1010). There is no indication that the

The quotation from the Goodman decision (supra,

at p. 14) shows that the court was referring to the case

(and not only to the accounting action) when it was

analyzing the wording of § 507(b) of the Act, namely:

“But this case does not present an action that is

maintained under the provisions of the Copyright Act.”

Goodman, supra, at 1013 (emphasis added).

Accordingly, the attempt by the majority below to

reconcile its own decision, and, inter alia, that of the

Seventh Circuit in Gaiman (which it cites, and on

which it relies), simply does not focus on the crux of

the decisional conflict: Goodman holds that a case

“arising under” the Act is not ” maintained under the

provisions” of the Act unless the Act provides for the

civil action and remedy presented. In _ sharp

contradiction, Gaiman and the majority below equate

the meaning of “arising under” and “maintained

under”. Even if, arguendo, the case at bar arises

under the Act in a jurisdictional analysis, the

Amended Complaint does not plead any cause of action

provided for in the Act.

We therefore submit that Goodman cannot be read

to be in accord with the majority decision below nor

with the circuit court decisions which the majority

follows. The decisional dispute under discussion is

real, explicit, and presents the determinative issue in

the case at bar.

V. THE PETITONER WOULD PREVAIL ON THE

MERITS IN THE COURTS BELOW IF THE

LIMITATIONS DID NOT GOVERN THIS CASE.

With regard to the statute of limitations issues, the

petitioner argued in the courts below that the state

(Massachusetts) six-year limitations for contract

actions govern this case. (App. 65a, B).

- The district court below (applying a three-year’s

limitations) granted summary judgment on the

grounds that the cause of action, based on the two in

seriatum assignments of rights to the petitioner,

accrued “in 1995”. (App. 82a & App. 83a). The

majority below determined accrual to have been “no

later than September 1995” (App. 23a) and “by 1995”

(App. 27a). Since this action was filed on February 24,

2000 (App. 63a), it would have been timely filed under

the state six-year limitations.

After first arguing below that this was not a tort

action, the respondents reversed their position after

the first appeal in this case and argued that the

Massachusetts three-year limitations for tort actions

was applicable. The district court agreed with

respondents, as an alternative holding if the Copyright

Act’s limitations did not apply. (App. 54a, 88a-91a).

ee:

The petitioner appealed from that alternative holding:

also. The majority below did not reach, or even

mention this issue. However, the dissent below, in a

lengthy discussion of this issue, characterized the

district court’s “alternative holding” as “demonstrably

wrong”. (App. 49a, n.25 — App. 50a). If this Court

were to grant this petition, the petitioner, in addition

to a prayer for reversal, would also pray for remand to

the First Circuit to decide the appeal of the alternative

district court holding.

The petitioner further submits that if this case

were allowed to proceed, the petitioner would prevail

on the substantive elements of its actions. The

majority, in focusing on the statute of limitations

defense, explicitly declined to reach the substantive

merits of the case. “[wle do not decide whether

Seemann co-authored the book, whether Goebel’s

figurines were derivatives of the book, or whether any

rights that descended from Seemann to the heirs

entitled the heirs to share in profits derived from sales

of the figurines.” (App. 24a) However, the dissent, in

a lengthy discussion (App. 34a, n.16-35a), reaches the

substantive merits, and states that respondents would

face “considerable hurdles” and ends by stating that

respondents, given the contents of the book’s copyright

certificate, would have the burden of “proof of the

contrary intention of persons long dead.” (App. 35a,

n.16).

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: CONCLUSION

For the reasons set forth above, the petitioner

respectfully submits that the petition for Writ of

Certiorari should be granted.

Respectfully submitted,

HENRY HERRMANN

Counsel of Record

Attorney for Petitioner

One Longfellow Place (3021)

Boston, Massachusetts 02811

Tel.: (617) 423-6096

oan

APPENDIX A

United States Court of Appeals

For the First Circuit

No. 06-2339

{Filed December 13, 2007]

CAMBRIDGE LITERARY

PROPERTIES, LTD.,

Plaintiff, Appellant,

Vv.

W. GOEB?L PORZELLANFABRIK

G.m.b.H. & CO. KG.; GOEBEL ART

G.m.b.H., d/b/a Goebel of North America,

Defendants, Appellees,

ULRICH STOCKE; GOEBEL

VERWALTUNGS-UND;

BETEILIGUNGSGESELLSCHAFT

m.b.H.; WILHELM GOEBEL,

Defendants.

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APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF

MASSACHUSETTS

| (Hon. Nancy Gertner, U.S. District Judge]

Before

Lynch, Circuit Judge,

Cyr, Senior Circuit Judge,

and Howard, Circuit Judge.

Henry Herrmann for appellant.

David P. Shouvlin with whom Porter, Wright,

Morris & Arthur LLP, Joseph D. Steinfield, David E.

Plotkin, and Prince, Lobel, Glovsky & Tye LLP were

on brief for appellee.

December 12, 2007

LYNCH, Circuit Judge. The district court

entered summary judgment for defendants due to

plaintiffs failure to meet the Copyright Act’s three-

year statute of limitations in this dispute over profits

from the sale of Hummel figurines and images.

Cambridge Literary Properties, Ltd. v. W. Goebel

Porzellanfabrik G.m.b.H. & Co. Kg. (Cambridge ID),

448 F. Supp. 2d 244 (D. Mass. 2006). We affirm.

The key facts are set forth here and in our earlier

opinion on a different issue in this case. Cambridge

Literary Properties, Ltd. v. W. Goebel Porzellanfabrik

G.m.b.H. & Co. Kg. (Cambridge I), 295 F.3d 59, 61-62

(Ist Cir. 2002). Plaintiff Cambridge Literary

Properties, Ltd. seeks a share of the profits reaped by

defendants W. Goebei Porzellanfabrik G.m.b.H. & Co.

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Kg. and Goebel Art G.m.b.H. (collectively, “Goebel”) for

the use of images taken from a German book published

in 1934, Das Hummel-Buch, in which Cambridge

asserts a copyright interest. Specifically, Cambridge,

which acquired its purported “rights” from two sets of

heirs of a putative joint author of the book, seeks an

accounting and imposition of trust on past and future

profits Goebel realizes from the distribution of

figurines derived from the book, Goebel’s use of the

particular figure of “The Merry Wanderer” as its

trademark or logo, the membership fees in the M. I.

Hummel Club in the United States, and the like.

Whether Cambridge in fact is a co-owner, through co-

authorship, of any of its asserted rights is hotly

contested by Goebel in its summary judgment papers

and its brief on appeal. Indeed, Cambridge’s

complaint asserts facts acknowledging Goebel’s claims

of sole ownership.

The federal courts clearly have jurisdiction over

this case. Cambridge chose to file the action in federal

district court, and jurisdiction has never been at issue.

We affirm the district court’s grant of summary

judgment, affirming the recommendation of the

magistrate judge. Plaintiff's ownership of any interest,

as we have said, is hotly disputed, and is an issue

governed by the Copyright Act. There is no agreement

or stipulation of ownership. Yet Cambridge did not

seek an adjudication of its ownership rights before

seeking whatever remedy it may have if it has any

ownership rights. Thus, this case is not a dispute

between admitted co-owners. Rather, the complaint

attempts to evade the issue of whether Cambridge has

any ownership rights by simply asserting that

Cambridge is a co-owner and then alleging that

Cambridge, as a co-owner, is entitled under state law

to an accounting and equitable trust. As a result,

Cambridge argues, the federal statute of limitations

that applies to estat ishing copyright ownership under

the Copyright Act does not apply; rather, the state

statute of limitations for an accounting applies.

‘The accounting and equitable trust claims created

by state law are premature. Such claims may well be

governed by state law, but they are not ripe and

necessarily rest upon plaintiff having met the

antecedent showing that it has ownership rights under

the Copyright Act. Plaintiff may not assert the state-

_ law claims for accounting or equitable trust without

establishing that it is a co-owner. Whether Cambridge

is a co-owner in turn depends, on the facts of this

case,’ upon the federal Copyright Act. This in turn

‘ Not all claims of co-ownership will arise under the Copyright

Act, and our decision does not affect such cases. For example, at

times, whether there is co-ownership may be determined by the

terms of a contract governed by state law or through other

ownership interests governed by state law and thus not require

application of the Copyright Act. See, e.g., Royal v. 1 eading Edge

- Prods., Inc., 833 F.2d 1, 4-5 (1st Cir. 1987) (rejecting federal

question jurisdiction where claim of co-ownership, “in its very

nature and essence, [was] one for breach of contract” under state

law). In other cases, such as where co-ownership results from

purported statutory co-authorship, the question of co-ownership

is governed by the Copyright Act. See 3 M. Nimmer & D.

Nimmer, Nimmer on Copyright § 12.01[A][1][b] (2007) (endorsing

view that in an action seeking declaratory judgment of plaintiff as

co-author and for an accounting, federal jurisdiction is exclusive

because “copyright ownership by reason of one’s status as co-

author arises directly from the terms of the Copyright Act itself”);

SR Me ae a ete

ee te he ey

requires that Cambridge have asserted its ownership

claims within that statute’s limitations period. The

congressional intent that the Act’s limitations period

applies to claims of ownership under the Act may not

be undercut by Cambridge’s subterfuge.’

Under the Act, the cause of action accrues when a

plaintiff “knows or has reason to know of the act which

is the basis of the claim.” Santa-Rosa v. Combo

Records, 471 F.3d 224, 227 (1st Cir. 2006), cert. denied,

127 S. Ct. 2265 (2007) (internal quotation omitted).

We reject plaintiffs novel approach to accrual.

Cambridge may not escape the limitations bar if the

statute barred the claims of the heirs from which it

acquired the “rights.” Young v. Lepone, 305 F.3d 1, 17

(1st Cir. 2002). Cambridge is also barred if it failed to

timely act within the limitatiens period after it

acquired the rights. Here, Cambridge and the heirs,

on the undisputed facts, were put on sufficient notice

to result in accrual more than three years before

plaintiff instituted suit. Further, there is no basis for

equitable tolling of the three-year limitations period.

In describing the facts of the dispute, we make all

reasonable inferences in favor of Cambridge, the party

see also Gaiman v. McFarlane, 360 F.3d 644, 652-53 (7th Cir.

2004) (collecting cases).

? We do not hold, nor is it a ramification of our holding, that

federal courts have exclusive subject matter jurisdiction to

adjudicate all accounting claims between the co-owners of a

copyrighted work.

opposing summary judgment. T-Peg, Inc. v. Vermont

Timber Works, Inc., 459 F.3d 97, 102 (1st Cir. 2006).

Berta Hummel, as a young woman in Germany in

the early 20th century, had a talent for drawing

images of children in folk dress. In 1931, Hummel

‘took her vows as a member of the Congregation of

Franciscan Sisters at the Convent. of Siessen

(“Convent”) and became Sister Maria Innocentia

Hummel. Sister Hummel and the Cor.vent published

some of Sister Hummel’s drawings as postcards and

devotional pictures.

In 1934, a German publishing company, Emil Fink

Verlag (“Fink”), approached Sister Hummel and the

Convent about publishing some of Sister Hummel’s

artworks in a book. In May of that year, Sister

Hummel, the Superior of the Convent, and Fink

entered into an agreement authorizing Fink to

reproduce forty of Sister Hummel’s works in Das

Hummel-Buch. The contract specified that the book

would include, in addition to the drawings, poems and

other text. About six months later, Fink contracted

with Margarete Seemann, a Viennese poet, for the

production of an introduction and fifty poems for use

in the book.

Fink first published Das Hummel-Buch in

Germany in December 1934. Fink applied to the

United States Copyright Office for a copyright in the

book in June 1936. Fink’s application lists Emil Fink

Verlag as the “copyright owner,” and Hummel and

Seemann as “author{s] or translator{[s]}.”

Back in Germany, Fink was not the only firm

seeking to commercialize Sister Hummel’s drawings.

Franz Goebel, then the head of Goebel, also entered

into a contract with Sister Hummel and the Convent

in January 1935. In that contract, Sister Hummel and

the Convent assigned to Goebel the exclusive right to

manufacture and market porcelain figurines based on

Sister Hummel’s drawings. Goebel continues to

produce its line of “M. I. Hummel figurines” to this

day. Goebel Art, a wholly owned subsidiary of Goebel,

acts as the exclusive distributor and licensing agent for

Goebel’s United States copyright interests derived

from the 1935 contract. In addition to the sale of

figurines, Goebel also profits from the Hummel

copyrights through Goebel Art’s “M. I. Hummel Club,”

which generates substantial income from membership

fees.

In June 1962, Fink applied for a renewal copyright

in “Das Hummel-Buch, by Berta Hummel .. . [preface

and verses by] Margarete Seemann.” The publishing

house listed itself as “proprietor of copyright in a work

made for hire.” In 1971, Goebel purchased all of Fink’s

copyrights in Hummel-related works, including the ;

American copyright in Das Hummel-Buch. That sale ‘

was also memorialized in documents filed with the

Goebel was not always the sole American

distributor of Hummel figurines. Until the mid-1990s,

Goebel contracted with Schmid Brothers, Inc.

(“Schmid”) to distribute the figurines in the United

States. Schmid and Goebel quarreled repeatedly over

their business arrangement in the courts of Germany

and the United States. Sometime in the late 1960s, an

attorney named Henry Herrmann began working for

Schmid on matters related to disputes with Goebel.

By 1971, Herrmann had obtained for Schmid an

assignment of copyrights from Sister Hummel’s family;

Sister Hummel had died in 1946. Herrmann also

represented Schmid in a number of lawsuits

pertaining to the Hummel rights. Herrman is the

driving force behind Cambridge in the present dispute.

In 1992, during a lawsuit filed in the Eastern

District of New York, Schmid and Goebel entered into

a consent judgment that stated that the two parties

owned “respective undivided one-half interests in the

United States renewal copyright in [Das Hummel-

Buch].” Herrmann executed the agreement on behalf

of Schmid.

Schmid, which held interests in Das Hummel-Buch,

filed for bankruptcy in 1993. Herrmann, as a creditor

in the bankruptcy proceedings, filed a claim for over

$10,000,000 based on a contingency fee agreement

with his former client. Herrmann settled his claim for

$3,750,000. Goebel, for its part, acquired Schmid’s

rights to the book in the wake of Schmid’s bankruptcy.

With that acquisition, Goebel’s ownership interest in

the United States copyright to Das Hummel-Buch

appeared to be perfected.

At some point during the Goebel-Schmid litigation,

Herrmann came to think that Margarete Seemann’s

heirs might retain an interest in the United States

poems appear in the book. In order to exploit that

interest, Herrmann sought an assignment of copyright

interests from Seemann’s heirs. Herrmann formed

Cambridge in August 1995 to effectuate that purpose.

Herrmann continues to be the sole shareholder in

Cambridge in addition to representing the company in

this litigation.

Also in 1995, Herrmann identified Seemann’s heirs

and assignees of Seemann’s alleged United States

Maria Romanowicz, a resident of Vienna, and Dr.

Alexandrine Cermanovic-Kuzmanovic, a resident of

Belgrade. Herrmann approached both heirs in August

and September of 1995 with offers to purchase such

United States copyright interests as they held in the

book. |

On September 6, 1995, Maria Romanowicz signed

a contract assigning to Cambridge all of her “right,

title and interest in and to any and all United States

and/or co-authored by [Seemann], including, without

limitation, the work ‘Das Hummel-Buch.” The

contract also specified that “included in. this

assignment are any and all of my legal and/or

equitable monetary claims and causes of action I may

have under American laws as of the date hereof for

payments... and/or accountings against third parties”

for their exploitation of the United States copyright to

Das Hummel-Buch. As to the other heir, although

Herrmann first approached Cermanovic-Kuzmanovic

in 1995, he did not obtain an assignment from her to

Cambridge until February 1999. The terms of the

second assignment were identical to the first.

Having thus assembled what it represented to be a

fifty-percent interest (based on any intcrest held by

10a

the poet Seemann) in the United States copyright to

Das Hummel-Buch, Cambridge filed the current action

in the District of Massachusetts in February 2000,

basing jurisdiction on diversity and, conditionally, on

federal question jurisdiction.* Cambridge’s complaint

pleaded two “claims”: one for “an accounting from

[Goebel] of their profits from their use and benefit of

said book and the two and three dimensional works

derived therefrom”; and a separate claim for unjust

enrichment seeking as a remedy “restitution and [] a

decree imposing a constructive trust . . . on [Goebel’s]

intellectual property relating to the works derived

from the [blook.” The complaint states, in conclusory

fashion, that Cambridge is entitled to these remedies

due to its status as “joini legal and/or beneficial

owner[] of the United States Renewal Copyright” in

Das Hummel-Buch.*

* The complaint states that the District of Massachusetts “has

diversity jurisdiction . . . pursuant to (28 U.S.C. § 1332(a)]” and

“[flurther, if this action were determined to be arising under

Federal copyright statutes, this Court has jurisdiction pursuant

to 28 U.S.C. §§ 1331 and 1338.” Am. Compl. 44 16-17.

* At the same time, however, the complaint concedes that Goebel

and other parties had previcusly asserted the ownership rights to

the United States copyright in Das Hummel-Buch without ever

acknowledging any ownership interest by Seemann or her heirs.

See, e.g., Am. Compl. 4] 44-45 (“Goebel, claiming as alleged owner

of the Book Renewal . . . has previously, in a United States

District Court, made claim for alleged infringement of the Book

Renewal.”); id. 9 66 (alleging that a 1992 federal court consent

decree named Schmid and a Goebel subsidiary “undivided joint

owners of the Book Renewal”). Similarly, the complaint reveals

that Goebel had previously represented the contents of the book

as “works for hire” rather than “joint works,” which would mean

f -

lla

Cambridge does not claim it owns any independent

Hummel. Rather, it says its rights are derivative from

Seemann.*® Seemann, Cambridge alleges, obtained an

interest in the United States copyright for Das

Hummel-Buch by virtue of her co-author status with

Hummel and/or Fink. Cambridge alleges the book was

a “joint work” between Hummel and Seemann, and

that the copyright in the book therefore granted

Seemann rights in all the contents of the book,

including Hummel’s illustrations. Cambridge further

alleges that Goebel based the designs of at least some

of the Hummel figurines on particular images from the

book, and not on Hummel artworks of independent

provenance. Those figurines, according to Cambridge,

represented works derivative of the book. Cambridge,

assignee of Seemann’s heirs and half-owner, along

with Goebel, of the book copyright, would thus be

entitled to half of the proceeds of all exploitation of the

book copyright in the United States. From these co-

ownership rights, Cambridge argues, it is owed an

accounting for Goebel’s profits from the sale of at least

some of its figurines and other uses of Hummel

imagery in the United States. Goebel has disputed

these contentions throughout this litigation.

The district court initially dismissed Cambridge’s

suit for want of personal jurisdiction. This court

that even if Seemann held the copyright in her poems, her rights

would not extend to Hummel's illustrations. Am. Compl. 4 44.

* At no time has Cambridge alleged that Goebel exploited

Seemann’s written contributions to Das Hummel-Buch.

i ee

12a

reversed and remanded. Cambridge I, 295 F.3d at 66-

68. On remand, the district court again did not reach

the merits of Cambridge’s accounting or unjust

enrichment claims. Instead, it granted Goebel’s

motion for summary judgment on the grounds that the

barred Cambridge’s suit. Cambridge II, 448 F. Supp.

2d at 247; see also 17 U.S.C. § 507(b).

Il.

We review de novo the entry of summary judgment

in the district court. T-Peg, 459 F.3d at 111.

Summary judgment is proper here if the record, read

favorably to Cambridge, reflects no genuine issues of

material fact and the undisputed facts demonstrate

that Goebel is entitled to judgment as a matter of law.

T-Peg, 459 F.3d at 111; Fed. R. Civ. P. 56(a).

Cambridge contends on appeal that Massachusetts

law governs a claim for accounting for profits, and that

consequently the Copyright Act’s statute of limitations

does not apply. The issue is more complicated than

that. This framing of the argument assumes that the

question of ownership had been resolved, by

agreement or by a court judgment, before the state-law

remedy of accounting was sought. An action brought

by a copyright co-owner seeking equitable remedies

from another co-owner, even if those remedies are

governed by state law, requires that the plaintiff first

establish the existence of the right giving rise to the

remedy. See, e.g., MacDonald v. Page Co., 146 N.E.

727 (Mass. 1925); 1A C.J.S. Accounting § 23 (2007). In

the case of an accounting for profits by a co-owner of a

0 Re are

13a

the claimant must first establish it has ownership as

a predicate to an award of an accounting for profits.

The ownership question may be one of state law or of

federal law, depending on the facts of a case. In cases

involving rights such as those at issue here, plaintiffs

usuaily raise this threshold issue by seeking a

declaratory judgment for ownership. See Santa-Rosa,

471 F.3d at 225-26; Royal v. Leading Edge Prods., Inc.,

833 F.2d 1, 2 (1st Cir. 1987); see also, e.g., Gaiman v.

McFarlane, 360 F.3d 644, 648 (7th Cir. 2004);

Merchant v. Levy, 92 F.3d 61, 53 (2d Cir. 1996); Zuill

v. Shanahan, 80 F.3d 1366, 1368 (9th Cir. 1996);

Goodman v. Lee (Goodman IJ), 78 F.3d 1007, 1009 (5th

Cir. 1996).

Cambridge’s complaint does not request a

declaration of its co-ownership of the United States

ownership and acknowledges that Cambridge’s

ownership is in controversy. The omission does not

remove the predicate question of ownership from the

case, and whether Cambridge has any ownership

interest is in dispute, even on the face of the

complaint.

A. Applicability of the Copyright Act

which are controlled by federal law and some of which

may refer to and be controlled by state law. We noted

as much about this very case in Cambridge I. See 295

F.3d at 64 n.4 (recognizing that Cambridge’s claims

might necessitate reference to “federal copyright law

and German contract law as to whether Hummel,

Seemann, and Fink are co-owners; Austrian

l4a

inheritance law if the Seemann rights are disputed;

federal copyright law as to whether the figurines are

derivative works; and to the law of any of several

jurisdictions as to the rights and defenses among co-

owners’).

Here the necessary initial question -- ownership of

Because that question is governed by the Act, the Act’s

statute of limitations applies as well. See 17 U.S.C.

§ 507(b) (“No civil action shall be maintained under the

provisions of this title unless it is commenced within

three years after the claim accrued.”). It would be

anomalous and, we think, contrary to congressional

language and intent not to apply the Act’s limitations

period when the Act governs the question of ownership

interest.

Our view that a single copyright case can raise

different issues governed by different laws is well

accepted. In an instructive if not directly parallel case,

the Supreme Court addressed the applicability of

federal and state law in actions asserting copyright

interests. In De Sylva v. Ballentine, 351 U.S. 570

(1956), the mother of the illegitimate child of a

deceased composer sued for a declaratory judgment

that the child possessed an interest in the renewal

copyrights of the composer’s works; the mother also

sought an accounting for past profits. Jd. at 571-72.

The ownership determination hinged on a provision in

the Copyright Act, then in effect, which was

ambiguous on two issues: whether children of authors

could inherit copyright renewal rights during the

lifetime of the author’s widow; and whether “children,”

en eo

15a

as used within the Copyright Act, included illegitimate

offspring. Id. at 572.

The Court held that “[t]he scope of a federal right

is, of course, a federal question,” and interpreted the

ambiguous Copyright Act provision to resolve the

ownership issue. Jd. at 580. The Court did reference

state law in the course of construing the Act. As to the

discrete issue of whether the term “children” included

illegitimate offspring, the Court noted that “there is no

federal law of domestic relations, which is primarily a

matter of state concern.” Jd. Because the federal Act

did not address the issue at hand, which was “really a

question of the descent of property,” the Court looked

to the California Probate Code, the source of law that

would govern descent of the compos ~v’s estate, to give

content to the term “children” as used in the Copyright

Act. Id. at 581-82. :

The current Copyright Act treats determinations of

the rights at issue here as questions of authorship

status and initial ownership of copyrights. Section 101

of the current Act expressly defines terms such as

“copyright owner,” “joint work,” and “work made for

hire.” 17 U.S.C. § 101. Section 201 of the Act

explicitly controls vesting of copyright in authors; sets

out the ownership status of authors and co-authors of

joint works; and establishes copyright ownership by

employers who commission works made for hire. 17

U.S.C. § 201. There is a substantial federal interest in

having the federal statute of limitations applied to

these determinations.

Indeed, the Act also contains a provision that

expressly preempts state common-law copyright

16a

protection and ai! ether “legal or equitable rights that

are equivalent to any of the exclusive rights within the

general scope of copyright... .” 17 U.S.C. § 301(a).

That provision, while by its terms governs the

preemption of causes of action, presupposes the

existence of “legal or equitable rights” which are, in

turn, defined elsewhere in the Act.

Our concern is thus not, as Cambridge suggests,

with whether the Act preempts a state accounting :

cause of action. That is a hypothetical question on the

facts of this case, and we do not give advisory opinions.

Our concern is only with whether the federal statute

of limitations applies to the prerequisite issues of

ownership which are governed by the Act.

All of the federal circuit courts of appeal that have

addressed the issue, including this one, agree that a

determination of copyright ownership based on a

disputed allegation of co-authorship presents a federal

question that arises under, and must be determined

according to, the Copyright Act. See Santa-Rosa, 471

F.3d at 227; see also, e.g., Gaiman, 360 F.3d at. 652-53;

Merchant, 92 F.3d at 55-56; Goodman II, 78 F.3d at

1010.6 Where an ownership claim arises under the

° Nothing in our decision in Royal is inconsistent, contrary to

Cambridge’s argument. In Royal, we upheld dismissal of a claim

for declaration of copyright ownership because that claim did not

create federal question jurisdiction. 833 F.2d at 2. Here,

jurisdiction is not at issue. In addition, the Royal claimant’s

theory of ov nership turned not on his status as a co-author, but

on an alleged breach of a royalty agreement between the claimant

and his employer. /Jd. at 1-3. Because “(the claimant’s] assertions

grie]lw out of his purported contract rights.” state law controlled

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17a

limitations likewise applies. Gaiman, 360 F.3d at 653;

see also Santa-Rosa, 471 F.3d at 227; Merchant, 92

F.3d at 56. Some cases address the question in the

context of performing an “arising under” analysis to

determine whether there is federal jurisdiction. See,

e.g., Merchant, 92 F.3d at 55; see also Royal, 833 F.2d

at 2-3 (adopting test for original federal subject matter

jurisdiction in T. B. Harms v. Eliscu, 339 F.2d 823 (2d

Cir. 1964)). Here, there is diversity jurisdiction, but

the question of whether there is a federal question

under the Copyright Act as to the prerequisite of co-

ownership involves parallel reasoning.

Cambridge attempts to avoid this conclusion by

arguing that “the Act’s limitations do not apply to

actions for accounting between co-owners.” As we

have said, that is not the issue. Cambridge argues

that it is the fact that the action is one which the

complaint labels as being for an accounting that makes

the difference.’ If co-ownership were conceded and the

their resolution and failed to create federal subject matter

jurisdiction. Id. at 3.

”? Our holding is that the federal period of limitations, and not a

state limitations period, applies to the predicate question of co-

authorship rights, which is governed by the Copyright Act. We

see no need to address the defense of preemption raised by Goebel,

see 17 U.S.C. § 301, or Cambridge’s argument that there is no

preemption. In particular, Cambridge argues that a

grandfathering provision saves the accounting claim from

preemption because it involves “undertakings commenced before

January 1, 1978,” i.e., Goebel’s exploitation of Hummel imagery

from 1935 to the present. Id. § 301(bX2). Our holding rests on the

18a

only question was a claim for accounting of profits

from the other joint owner, then Cambridge could

argue the suit was only for an accounting of profits

under state law. Gaiman, 360 F.3d at 652. But under

a long line of te-leral cases, Cambridge must first

establish that it is a co-owner, and the answer to that

lies in the application of the Copyright Act and

subjects that claim to the Act’s statute of hmitations.

See id. at 652-53. Cambridge cannot avoid this by the

stratagem of failing to ask for a declaration of

ownership as a method of avoiding the federal

limitations period for an ownership claim governed by

the federal Act.®

Cambridge cites Goodman II, 78 F.3d 1007, as

support for its argument. That case does not support

Cambridge’s position; it does support our view of the

case. In Goodman, a musician sued the heirs of her

former performing partner for a declaration of co-

authorship and an accounting for royalties from the

song “Let the Good Times Roll.” Goodman v. Lee

(Goodman I), 815 F.2d 1030, 1031 (5th Cir. 1987). The

fact that the issue of ownership must be addressed first and is

controlled by the Copyright Act’s limitations period. This is true

whether or not the claim for an accounting under state law is

preempted.

* If Cambridge is arguing that the grandfathering clause in section

301(b)(2) somehow makes the co-authorship issue not an issue of

federal law under the Act, then Cambridge is wrong. By its own

terms, section 301(b) is limited in its application only to “rights or

remedies under the common law or statutes of any State.” Id.

§ 301(b). Pre-1978 claims of co-author status are governed by the

Sita OE SEES ear hag eRe RN ee Sete Ne ee CTE EN Seer ARR ey Meae

19a

district court granted defendants’ motion for summary

judgment for lack of subject matter jurisdiction. Id.

The Fifth Circuit reversed “[bJecause . . . exclusive

federal district court jurisdiction exists in an action for

a declaratory judgment to establish joint authorship of

a copyrighted work ....” Id. at 1032.

After trial, the Goodman jury found that the

plaintiff “was a co-author of [the song]” and that her

claim was timely because “she ‘did not know or should

not have known” until the year before filing suit that

her co-author had listed himself as the sole author on

the copyright registration. Goodman II, 78 F.3d at

1010. Only after the co-authorship issue was resolved

did the court address the issue of an accounting.

On appeal in Goodman, the defendants contested

the district court’s remedial award of an accounting.

The Fifth Circuit held that the remedy of an

accounting did not itself present any federal questions,

unlike the resolved predicate question of ownership,

and that Louisiana law, including the state statute of

limitations, governed the accounting issues. Id. at

1012-13.

The Goodman decisions are entirely consistent with

the prevailing view that disputed claims about

whether there is co-authorship require application of

the Copyright Act and the Act’s statute of limitations.

The portion of the opinion that applied state law is

inapposite here, because it dealt with accounting

issues that only arose following a proper determination

of copyright ownership under the Copyright Act.

20a

Cambridge has not cleared that hurdle of establishing

ownership.°

The controversy over Cambridge’s copyright

interests directly involves Seemann’s authorship

status and her initial ownership of the copyright in

Das Hummel-Buch, as well as the effect of various

registration documents and transfers. The Copyright

Act clearly covers these issues. See 17 U.S.C. §§ 101,

201, 204-05, 410. We hold as a matter of law that on

the facts of this case, Cambridge’s allegations of co-

ownership present an issue subject to the Copyright

Act and that the Act’s three-year statute of limitations

applies to that issue, which must be resolved before

the issue of an accounting arises.

B. Application of the Act’s Accrual Rules to These

Claims

The Copyright Act bars lawsuits premised on a

of that claim. 17 U.S.C. § 507(b). A claim accrues

when a plaintiff “knows or has reason to know of the

act which is the basis for the claim.” Santa-Rosa, 471

F.3d at 227 (internal quotation omitted). If

Cambridge’s claims accrued earlier than February 24,

1997, three years before Cambridge filed the present

suit, the suit is barred.

® The question of whether a claim for an accounting for profits

realized from exploitation of a jointly-owned copyright -- once that

ownership is established -- is subject to state-law limitations is not

one that we need decide. See supra note 7.

2la

In Santa-Rosa, we applied the accrual test to a

2004 suit by a renowned salsa musician requesting a

declaration of co-ownership in several recordings he .

allegedly co-authored in the mid-1980s. 471 F.3d at

225-26. We affirmed dismissal of the suit as time-

barred. Id. at 228.

Santa-Rosa held that the plaintiff knew or should

have known of the basis for his claim to co-authorship

of the songs at the moment of their creation. Jd. After

all, “[a] co-author knows that he or she jointly created

a work from the moment of its creation,” and thus

would have been aware at that time of a claim for co-

ownership. [d. (quoting Merchant, 92 F.3d at 56); cf.

17 U.S.C. 3 101 (defining “joint work” as “a work |

prepared by two or more authors with the intention

that their contributions be merged into inseparable or

interdependent parts of a unitary whole” (emphasis

added)). “Thus,” Santa-Rosa reasoned, “there is little

question that [plaintiffs] claims for co-ownership

accrued as soon as he finished recording each album.”

471 F.3d at 228. In Santa-Rosa the claimant was the

co-author, and not an heir.

Santa-Rosa acknowledged, however, that other

courts have applied the accrual test differently. For

instance, the Ninth Circuit has held that a claim fora

declaration of ownership under the Copyright Act does

not accrue until “a ‘plain and express repudiation of co-

ownership is communicated to the claimant.” Id.

(quoting Zuill, 80 F.3d at 1369). Even under this more

claimant-friendly standard, however, the Santa-Rosa

plaintiff could not prevail, because there was plain and

express repudiation of co-ownership from the fact that

the defendant record company “openly, and quite

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22a

notoriously, sold [plaintiffs] records without providing

payment to him” more than three years before the

plaintiff filed suit. Jd.

Under the reasoning of Santa-Rosa, the accrual

inquiry in this case would initially be directed at

Margarete Seemann and her knowledge of potential

_ownership claims in the 1930s. If, as Cambridge

claims, Seemann had co-authored Das Hummel-Buch

as a joint work, she would by definition have been

aware of her status as joint owner of the book and all

of its contents. Seemann also conceivably received

notice of a repudiation of her ownership status when

Goebel began marketing Hummel figurines in the

1930s and failed to pay Seemann any royalties. Under

a literal reading of Santa-Rosa, Seemann’s claims for

a declaration of co-authorship of the book would have

accrued long before her death in 1949.

The Santa-Rosa model for accrual does not work

well here because the Copyright Act did not contain a

statute of limitations for civil actions until 1957. See

3 M. Nimmer & D. Nimmer, Nimmer on Copyright

§ 12.05[A] (2007). We also do not reach the question of

whether the claims based on Seemann’s work accrued

within three years after a statute of limitations was

added to the Copyright Act. Instead, we ask whether

any claims held by Cambridge and/or the assignors of

the rights Cambridge alleges descended from Seemann

accrued before the case was brought.

1. The Romanowicz Assignment

Maria Romanowicz, Seemann’s heir in Vienna,

assigned whatever rights she may have had in the

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23a

book’s United States copyright to Cambridge by

September 6, 1995. We do not address whether

Romanowicz’s rights were time-barred at that time.

Cambridge did not file suit within three years of

acquisition of those rights, and based on its knowledge

at the time, the claim is barred. Cambridge was on

notice of a repudiation of those rights by the time of

the assignment. Herrmann, Cambridge’s sole

shareholder and negotiating adversary to Romanowicz, -

was privy to the Schmid-Goebel settlement agreement

stipulating that those two companies owned all rights

to the book in the United States. Moreover, Herrmann

knew that Romanowicz was not receiving royalties

from Goebel on the sale of Hummel figurines.

The most cogent evidence of accrual is Cambridge’s

own motivation for approaching Romanowicz. What

Cambridge sought to purchase was essentially a cause

of action against Goebel. Cambridge was aware of

whatever potential claims against Goebel the purchase

would bolster, and even ensured that the assignment

contract specified a transfer of any and all claims for

accountings under United States law. With respect to

the Romanowicz assignment, the statute of limitations

under the Copyright Act started running against

Cambridge no later than September 1995. Because

there was no tolling (as we explain below), section

507(b) of the Copyright Act barred Cambridge’s claims

based on the Romanowicz assignment before this suit

was filed in 2000.

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24a

2. The Cermanovic-Kuzmanovic Assignment

On the undisputed facts, Dr. Alexandrine

Cermanovic-Kuzmanovic, Margarete Seemann’s heir

in Belgrade, knew -- or reasonably should have known

-- about the basis for a claim of co-ownership of the

United States copyright to Das Hummel-Buch before

‘February 1997. In making this determination, we do

not decide whether Seemann co-authored the book,

whether Goebel’s figurines were derivatives of the

book, or whether any rights that descended from

Seemann to the heirs entitled the heirs to share in

profits derived from sales of the figurines. The accrual

test looks to the existence of a claim, not its resolution.

Herrmann first contacted Cermanovic-

Kuzmanovic’s attorney in Vienna, Dr. Theodor Petter,

in 1995. Petter referred Herrmann directly to

Cermanovic-Kuzmanovic to discuss an assignment of

copyrights. Herrmann testified that in a conversation

that same year, Cermanovic-Kuzmanovic indicated

that “she was very interested in gaining some income

based upon an assignment of her American rights

.... She referred Herrmann back to Petter, and the

two attorneys commenced negotiations.’® At that time,

Cermanovic-Kuzmanovic knew she was not receiving

any payments on any inherited co-author ownership

” Petter died soon thereafter. In 1996, Petter’s daughter, Dr.

Elizabeth Fetcher-Petter, took over her father’s law practice and

resumed negotiations with Herrmann. Fetcher-Petter described

those negotiations as “productive but extremely lengthy”; the

assignment from Cermanovic-Kuzmanovic to Cambridge was

finally executed on February 9, 1999.

25a

right in Das Hummel-Buch. She also was aware that

Fink had not paid her royalties on the original German

book, in contrast with Fink’s payment until 1973 to the

heirs of royalties on an English-language The Hummel

Book.”

Starting at the latest in 1995, when she was

contacted by Herrmann, Cermanovic-Kuzmanovic had

every motivation to ascertain the existence and

potential value of her rights in the book, and she had

counsel in Vienna to assist her in that task. Yet she

did not bring suit within three years, even though

readily available inquiries would have revealed

numerous repudiations of the “rights” Cambridge

sought to purchase.

" A stipulation between the parties indicates that Fink paid book

royalties to the heirs until 1973. Cambridge argues that “[t}hese

payments constituted an affirmation of ([(Cermanovic-

Kuzmanovic’s] interests [in the book] both by Fink and [Goebel]

....” Cambridge’s argument fails. The stipulation states that

Fink paid royalties to Seemann and her heirs for sales of The

Hurimel Book, the English translation of Das Hummel-Buch. The

1934 contract between Fink and Seemann treated these as two

separate properties. Fink was to pay Seemann three lump sums

in 1934 for the use of her poems in Das Hummel-Buch. Fink

could, according to the contract, prepare translations of the

German book only by mutual agreement with Seemann, and the

poet would receive a 4% royalty on the retail price of any

translated books. As a translation, The Hummel Book itself is a

derivative work, the ownership of which “does not imply any

exclusive right in the preexisting material.” 17 U.S.C. §§ 101, 103.

Any rights in a translation of Das Hummel-Buch would therefore

not extend to any of the images contained in the original German

edition.

26a

There were a number of different signs of

repudiation, which in total require the conclusion that

the claims had accrued. Publicly available documents

in the United States Copyright Office raised issues

about Seemann’s purported ownership of Das

Hummel-Buch. First, the original 1936 application for

a United States copyright in the book lists the

publishing house Emil Fink Verlag as the “copyright

owner.” Second, the 1962 application for the renewal

in a work made for hire.” Third, a 1971 transfer

document, recorded in accordance with 17 U.S.C.

§ 205, expressly names Fink as owner of the copyright

and describes an assignment of the copyright to

Goebel. Fourth, due diligence, including questions to

Cambridge, may well have led to information about the

litigation which resulted in the 1992 Consent Decree.

There is another point as well. Cermanovic-

Kuzmanovic openly expressed to Herrmann when he

telephoned her in 1995 that she was interested in

obtaining income from whatever rights she might hold.

Beyond that, if Cermanovic-Kuzmanovic indeed

possessed a joint interest in the book’s United States

been entitled to the exclusive right “to prepare

derivative works based upon the copyrighted work.”

17 U.S.C. § 106(2). Goebel, meanwhile, had been

“openly{] and quite notoriously” exploiting works for

decades that appeared in Das Hummel-Buch.” Santa-

Goebel does not argue that the mere manufacturing and

marketing of Hummel figurines put the heirs on notice, regardless

of the heirs’ knowledge of the source for the figurines.

27a

Rosa, 471 F.3d at 228. At least one of Goebel’s much-

used and apparently profitable images appears in Das

Hummel-Buch. Cambridge’s complaint points out that

Goebel has “for decades utilized, in a particular and

crucial fashion, one specific picture . . . popularly

known as “The Merry Wanderer,” which “ultimately

became the symbol for the entire M. I. Hummel line.”

Yet Goebel never paid the heirs for its use of The

Merry Wanderer.”

The sum, by 1995, of all of this was to start the

limitations period running. Publicly available

documents in the Copyright Office and prior litigation

cast doubt on Cermanovic-Kuzmanovic’s rights in Das

Hummel-Buch. Moreover, Goebel engaged in

widespread exploitation of at least some portion of

those rights, such as its use of The Merry Wanderer,

without remuneration to Cermanovic-Kuzmanovic.

Such circumstances constituted a “plain and express

repudiation” of Cermanovic-Kuzmanovic’s purported

co-ownership rights in Das Hummel-Buch sufficient to

trigger the Copyright Act’s three-year statute of

limitations. Santa-Rosa, 471 F.3d at 228 (internal

quotation omitted).

Cambridge argues that the apparent repudiation of any rights

held by Seemann in The Merry Wanderer and other images from

Das Hummel-Buch was insufficient because Seemann’s heirs ,

could not possibly have known for certain that Goebel was

exploiting derivatives of the book. Cambridge maintains this is so

because Goebel, ifasked, would have denied that it was exploiting

derivative works. The heirs, as with any other rights-holder with

a potential claim, need not have obtained an admission of liability

from Goebel in order for accrual to occur.

28a

Whether Seemann co-authored Das Hummel-Buch

or not, the right to contest that status lay with the

poet’s heirs until they assigned them to Cambridge.

Cermanovic-Kuzmanovic did not file suit by 1998.

Cambridge did not resurrect that claim by purchasing

an assignment from Cermanovic-Kuzmanovic in 1999.

“{Aln assignee cannot maintain a claim in the face of

a limitations defense that would have trumped the

same claim had it been brought by the assignor.”

Young, 305 F.3d at 17.

3. Tolling

Cambridge argues that a “legal disability” tolled

the statute of limitations against its claims based on

the assignment from Romanowicz in 1995. Cambridge

could not have filed this case until 1999, it claims,

because “until then the sole basis for alleging Goebel’s

exploitation was documents classified as ‘SECRET’ by

a federal court in another earlier matter -- the content

of which [Herrmann] was duty bound not to disclose.”

Cambridge’s position, even taken on its own terms,

is baseless. Just as all the reasons we have outlined

would have put Cermanovic-Kuzmanovic on notice of

a repudiation of Seemann’s status as co-author, those

reasons provided more than adequate grounds for

Cambridge to allege that Goebel had prepared works

derivative of the book. Cambridge need not have

relied on any documents under protective order to file

this lawsuit. There was ne tolling of Cambridge’s

claims based on the Romanowicz assignment.

We affirm summary judgment in favor of

defendants. Costs are awarded to defendants.

eet J " 7 : NI

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29a

-Dissenting Opinion Follows-

CYR, Senior Circuit Judge, dissenting. The

majority opinion holds that since the Cambridge state-

law accounting claim might require it to establish as a

threshold matter that its predecessor-in-interest,

Margarete Seemann, was an original co-owner of the

thus “arises under” the Copyright Act for purposes of

both subject matter jurisdiction and, by logical

extension, the Act’s three-year statute of limitations.

Inasmuch as the ramifications of this holding — viz.,

that the federal courts have exclusive subject matter

jurisdiction to adjudicate all accounting claims

between the co-owners of a copyrighted work, see 28

U.S.C. § 1338(a) — are both unprecedented and

potentially pernicious, I respectfully dissent.

The majority relies principally on decisions such as

De Sylva v. Ballentine, 351 U.S. 570 (1956), for the

proposition that any state-law cause of action which

potentially involves a threshold determination of the

plaintiffs copyright ownership must be said to “arise

under” the Copyright Act (viz., a de facto federal cause

of action), and thus is governed by the Act and subject

to its three-year statute of limitations, thereby

rendering any discrete inquiry into the scope of the

Act’s preemptive effect immaterial. However, De Sylva

was a non-diversity case in which the plaintiff

expressly filed a claim pursuant to the Copyright Act,

demanding a declaratory judgment that she was a co-

owner of a copyrighted work, and consequently the

Court assumed that the Copyright Act’s substantive

30a

definitions concerning copyright ownership governed

any decision on the merits of the plaintiffs federal-law

claim. See id. at 975.’* To establish subject matter

jurisdiction, a declaratory judgment plaintiff normally

must demonstrate more than its desire to settle its

rights under federal ‘aw, but must show “a real and

reasonable apprehension” that the defendant plans to

sue to establish that the plaintiff is not so entitled,

viz., that Goebel planned to litigate a dispute as to

whether the Cambridge chain of title originated with

a person who was a “co-owner” of the copyright as

defined by the Copyright Act of 1909. See generally, 3-

12 Melville B. Nimmer & David Nimmer, Nimmer on

Declaratory Judgment Act [28 U.S.C. § 2201(a)] does

not, of its own force, confer subject matter jurisdiction

on the federal courts”; “[o]nce an action for declaratory

relief is instituted, the defendant can attempt to

negate tne element of reasonable apprehension of

litigation by entering a binding covenant not to sue.”).

When the plaintiff himself pleads a claim for

declaratory judgment, the ownership of the Copyright

Act title is not merely a potential focus of dispute, it is

'‘ The Cambridge complaint sufficiently invoked the district

court’s diversity jurisdiction, see 28 U.S.C. § 1332, and thus does

not depend on the existence vel non of federal-question

jurisdiction. The jurisdictional analysis is relevant only to the

question whether the claim is “maintained” under the Copyright

Act, see infra note 21, and thus subject to its three-year statute of

limitations, rather than the applicable state-law limitations

period.

3la

the only issue relevant to an adjudication of the

declaratory action.”®

In stark contrast, Cambridge filed no federal-law

claim for a declaration of copyright ownership under

the Copyright Act, but merely a claim in equity for an

accounting between tenants in common of property,

which is premised entirely on state-created common

law. See, e.g., Arsenault v. Arsenault, 148 N.E.2d 662,

663 (Mass. 1958); see also Nimmer on Copyright § 6.12

(noting that a joint owner of a copyrighted work is

under an equitable duty to account to other joint

owners for a rateable share of the profits realized from

his use of the work). For jurisdictional purposes, the

plaintiff normally is the “master” of his complaint, and

if he pleads a claim purely based in state law, the

claim cannot be deemed to have “arise[n] under”

federal law, even if it is anticipated that the

defendant’s answer will deny the plaintiffs factual

allegations or will raise federal-law defenses to that

state-law claim. See Holmes Group, Inc. v. Vornado

Air Circulation Sys., Inc., 535 U.S. 826, 831 (2002)

(“(Slince the plaintiff is ‘the master of the complaint,’

the well-pleaded-complaint rule enables him, ‘by

eschewing claims based on federal law, . . . to have the

same cloth, and involve a straightforward holding that a claim

which the plaintiff expressly denominates as a federal-law claim

obviously must be said to “arise under” the federal statute that it

invokes. See Santa-Rosa v. Combo Records, 471 F.3d 224, 227-28

(1st Cir. 2006), cert. denied, 127 S. Ct. 2265 (2007); Gaiman v.

McFarlane, 360 F.3d 644, 652 (7th Cir. 2004); Merchant v. Levy,

92 F.3d 51, 55 (2d Cir. 1996); Goodman v. Lee, 78 F.3d 1007, 1011

(5th Cir. 1996).

FE ER SHR EM EP RON Lae OO RIE aes Hag d HAN RE ADB ont TN, RTE Te ean

Se ee

32a

cause heard in state court.”) (citation omitted);

Caterpillar, Inc. v. Williams, 482 U.S. 3&6, 392 (1987)

(noting that plaintiff properly “may avoid federal

jurisdiction by exclusive reliance on state law”); Ten

Taxpayers Citizens Group v. Cape Wind Assocs., Ltd.,

373 F.3d 183, 191 (1st Cir. 2004) (noting that the well-

pleaded complaint rule applies “even where the

asserted defense is the preemptive effect of a federal

statute”).

On its face, the Cambridge complaint neither

invokes nor calls for the interpretation of any federal

law. See Cambridge Literary Props., Ltd. v. W. Goebel

Porzellanfabrik G.m.b.fi. & Co. Kg., 295 F.3d 59, 63

(1st Cir. 2002) (observing, in dictum, that “[it] is

unlikely that any federal cause of action is asserted,

even though federal law is the source of the Hummel

Book itself”); see also Goodman v. Lee, 78 F.3d 1007,

1012 (5th Cir. 1996) (noting that an accounting claim

between joint owners of copyright “is governed in all

respects by state law”); Iza Music Corp. v. W & K

Music Corp., 995 F. Supp. 417, 418 (S.D.N.Y. 1998)

(finding that a state-law accounting claim, in which

plaintiff did not seek a declaration of joint ownership

under the Copyright Act, did not “arise under” the Act,

distinguishing cases like Merchant v. Levy, 92 F.3d 51,

55 (2d Cir. 1996), because they “focus[ed] solely on the

claim for a declaration of joint ownership”); accord

Keith v. Scruggs, 507 F. Supp. 968, 970 (S.D.N.Y.

1981) (finding no federal jurisdiction where denial of

the plaintiffs ownership rights under the Copyright

Act was merely a potential defense to complaint).

Accordingly, De Sylva is legally and factually

inapposite.

33a

In cases where the complaint articulates a claim

exclusively in terms of state law, there are only two

narrow exceptions to the well-pleaded complaint rule.

Such a claim might be considered to “arise under”

federal law for jurisdictional purposes if: (i) an

adjudication of the state-law claim necessarily will

involve the determination of a “substantial federal

question,” see Almond v. Capital Props., Inc., 212 F.3d

20, 23 (1st Cir. 2000); or (ii) a federal statute (e.g., the

and overpowering preemptive force that all state-law

claims of the type pleaded are “completely preempted,”

see Franchise Tax Bd. v. Constr. Laborers Vacation

Trust, 463 U.S. 1, 22, 24 (1983) (noting that plaintiff

cannot, by “artful pleading,” escape complete

preemption); SPGGC, LLC v. Ayotte, 488 F.3d 525, 530

n.4 (1st Cir. 2007) (noting that complete preemption

“converts the state claim into a federal claim”). In my

view , the Cambridge accounting claim satisfies neither

exception.

A. “Substantial Federal Question” (“SFQ”)

Jurisdiction

Goebel suggests that, even though the Cambridge

accounting claim makes no mention of the Copyright

Act, it “arises under” the Act in that Cambridge

obviously would not be entitled to a_ state-law

accounting if it were not a co-owner of the Das

Hummelbuch copyright, a status which in turn

depends, inter alia, on Cambridge establishing that

Margarete Seemann originally fit the co-ownership

definitions of the Act. See 17 U.S.C. § 101 (noting that

34a

“joint work” is “a work prepared by two or more

authors with the intention that their contributions be

merged into inseparable or interdependent parts of a

unitary whole”); id. § 201(a) (“The authors of a joint

work are co-owners of copyright in the work.”).’®

6 Oddly enough, given the fact that the case has proceeded to the

summary judgment stage, Goebel has yet to file an answer to the

Cambridge complaint, see Wolfv. Reliance Standard Life Ins. Co.,

71 F.3d 444, 449 (1st Cir. 1995) (noting that affirmative defenses

normally are waived if not filed in initial responsive pleadings),

has yet to deny the Cambridge allegation that Cambridge is a

valid copyright co-owner (via descent and contract) of Seemann’s

original title, and has not produced a Rule 56 evidentiary proffer

which would call the Seemann joint ownership into doubt. See

H.R. Rep. No. 94-1476, 120, 121 (1976), reprinted in 1976

U.S.C.C.A.N. 5659, 5736 (noting that co-ownership inquiry must

focus on “the intention at the time the writing is done that the

parts be absorbed or combined into an integrated unit”); Thomson

uv. Larson, 147 F.3d 195, 199 (2d Cir. 1998). Rather, Goebel simply

maintains on appeal that the mere possibility of such a factual

dispute satisfies the SFQ exception to the well-pleaded complaint.

Goebel would face three considerable hurdles, however, if it were

to pursue such a denial: (i) Das Hummelbuch, on its face, appears

to be a unitary and fully integrated creation of artwork and

poetry, viz., a “joint work” as defined by § 101 and § 201(a), see

Lulirama Ltd., Inc. v. Axcess Broad. Servs., Inc., 128 F.3d 872, 877

(5th Cir. 1997) (noting that the contribution of an independent

contractor will not be deemed a “work for hire” unless it fits into

“one of the nine narrowly drawn categories of works”); (ii)

Seemann’s listing as an author on the certificate of registration

creates a rebuttable presumption of her joint authorship and

ownership, see Brown v. Latin Am. Music Co., 498 F.3d 18, 23 (1st

Cir. 2007) (citing 17 U.S.C. § 410(c) (“In any judicial proceedings

the certificate of a registration made before or within five years

after first publication of the work shall constitute prima facie

evidence of the validity of the copyright and of the facts stated in

35a

Admittedly, “[djetermining precisely which [state-

law] actions ‘arise under’ copyright law, and therefore

fall within exclusive federal jurisdiction, ‘poses among

the knottiest procedural problems in copyright

jurisprudence.” Gener-Villar v. Ad-Com Group, Inc.,

417 F.3d 201, 203 (1st Cir. 2005) (quoting Niz.zmer on

courts are courts of limited jurisdiction, . . . [they]

must ‘monitor their jurisdictional boundaries

vigilantly.” Diaz-Rodriguez v. Pep Boys Corp., 410

F.3d 56, 62 n.5 (1st Cir. 2005) (emphasis added;

citation omitted). The “controversial” SFQ exception

thus “endures in principle but should be applied with

caution and various qualifications.” Rossello-Gonzalez

v. Calderon-Serra, 398 F.3d 1, 11-12 (1st Cir. 2004)

(“Federal ingredient jurisdiction remains

‘controversial,’ because ‘[t]he Supreme Court has

periodically affirmed this basis for jurisdiction in the

abstract ..., occasionally cast doubt upon it, rarely

applied it in practice, and left the very scope of the

concept unclear.” (quoting Almond, 212 F.3d at 23);

see Metheny v. Becker, 352 F.3d 458, 460 (1st Cir.

2003).*”

the certificate.”)); and (iii) any rebuttal of this presumption would

depend on Goebel’s proof of the contrary intention of persons long

since deceased, see, e.g., Stuart & Sons, L.P. v. Curtis Publ’g. Co.,

456 F. Supp. 2d 336, 348 (D. Conn. 2006).

'” Although most cases discussing the SFQ jurisdictional exception

have involved general federal question jurisdiction, 28 U.S.C.

§§ 1331, 1441, the exception is equally available to establish

“copyright” jurisdiction under 28 U.S.C. § 1338(a). See

Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808-

809 (1988).

36a

Such special caution is necessary in the instant

case because if the SFQ exception were found to have

been satisfied merely because the Goebel answer

might deny and dispute the plaintiffs copyright co-

ownership as a “defense” to the Cambridge state-law

accounting claim, see supra note 16, then all state-law

accounting claims between copyright co-owners must

“arise under” the Copyright Act, even where there is

no genuine factual dispute under 17 U.S.C. §§ 101 and

201(a) regarding the provenance of the plaintiffs title.

In the vast majority of accounting cases, the parties

are likely to stipulate the plaintiffs co-ownership

under these Copyright Act definitions, hence state-law

issues will predominate the adjudication of the

accounting claim. Since the federal courts have

exclusive jurisdiction to decide Copyright Act cases,

however, see 28 U.S.C. § 1338(a), all such claims would

be removable as of right from state to federal court,

thus effecting a significant expansion of our “federal

question” jurisdiction.“* More importantly, the SFQ

exception neither permits nor requires such a dramatic

expansion of our limited jurisdiction.

1. The SFQ Jurisdictional Test

In Grable & Sons Metal Prods., Inc. v. Darue Eng’g

& Mfyg., 545 U.S. 308, 312-14 (2005), the Supreme

'® Even outside the context of copyright co-ownership claims, if the

mere possibility of a dispute concerning the interpretation of

federal copyright law is sufficient to satisfy the SFQ exception,

many other state-law claims which are not preempted by the

beyond mere infringement) nonetheless would be deemed to “arise

under” federal law. See infra Section II.C.

37a

Court recently elaborated on the inherent limitations

of the SFQ exception to the well-pleaded complaint

rule, which it originally pronounced more broadly in

Smith v. Kansas City Title & Trust Co., 255 U.S. 180

(1921)."° “{TJhe mere need to apply federal law in a

state-law claim will [not] suffice to open the ‘arising

under door. .. . [T]his Court [has] confined [it] to those

[state-law claims] that ‘really and _ substantially

involv{e] a dispute or controversy respecting the

validity, construction or effect of [federal] law.”

Grable, 545 U.S. at 313 (noting that the SFQ exception

“demands not only a contested federal issue, but a

substantial one, indicating a serious federal interest in

claiming the advantages thought to be inherent in a —

federal forum”) (emphasis added; citation omitted); see

Merrell Dow Pharm. v. Thompson, 478 U.S. 804, 813

(1986) (“[T]he mere presence of a federal issue in a

state cause of action does not automatically confer

federal-question jurisdiction.”); Dunlap v. G&L

Holding Group, Inc., 381 F.3d 1285, 1290 (11th Cir.

2004). In other words, “the question is, does a state-

law claim necessarily raise a stated federal issue,

actually disputed and substantial, which a federal

'? In Smith, plaintiff sought to enjoin corporate directors from

investing in a federally chartered land bank, pursuant to a state

law which prohibited directors from investing in any government.

bonds that were issued in violation of the law. Smith, 255 U.S. at

195-96. Plaintiffs complaint alleged that the directors had

breached their fiduciary duty to the shareholders because the

federal law which authorized the directors of a federal land bank

to issue bonds was unconstitutional and invalid. Jd. at 197-98.

The Court found SFQ jurisdiction because the plaintiff could only

prevail on his statutory claim for breach of fiduciary duty by

proving his federal constitutional claim. /d. at 201.

wi SA poe NN Tan ng ae ELT op ESE CAE Let EE a Wee OE

38a

forum may entertain without disturbing any

congressionally approved balance of federal and state

judicial responsibilities.” Grable, 545 U.S. at 314

(emphasis added). The Court admonished that the

federal courts should invoke the SFQ exception only if

it is “consistent with congressional judgment about the

sound division of labor between state and federal

courts.” Id. at 313-14. Further, “the presence of a

disputed federal issue and the ostensible importance

of a federal forum are never necessarily dispositive;

there must always be an assessment of any disruptive

portent in exercising federal jurisdiction.” Jd. at 314.

The Grable Court found the SFQ exception satisfied

because the plaintiff's state-law complaint, which

sought to quiet title to property which the Internal

Revenue Service seized and sold at auction to a third

party, depended entirely on a dispute about the

adequacy of the IRS’s compliance with seizure

notification procedures set forth in the federal tax

code, see 26 U.S.C. § 6335. Grable, 545 U.S. at 315

(“Whether Grable was given [adequate] notice within

the meaning of the federal statute is thus an essential

element of its quiet title claim, and the meaning of the

federal statute is actually in dispute; it appears to be

the only legal and factual dispute.”) (emphasis added).

Grable thus requires us to undertake two inquiries:

whether (i) the Cambridge state-law complaint, on its

face, and without reference to any possible defenses,

“necessarily” discloses an “actual” and “substantial”

dispute concerning the interpretation of the Copyright

Act; and (ii) invocation of the SFQ exception would be

consistent with any congressional policy in enacting

ow ss i.

39a

the Copyright Act as to the proper balancing of

jurisdiction between the federal and state courts.”

2. The “Actual” and “Substantial” Dispute

Criterion

Like the plaintiff's complaint in De Sylva, 351 U.S.

570, supra, the Grabie complaint — on its face — placed

the meaning of a federal statute in active dispute. If

the Grable defendant eventually did not challenge the

* We often cite the principle set forth in T.B. Harms Co. v. Eliscu,

339 F.2d 823, 828 (2d Cir. 1964) (noting that a claim “arises

under” the Copyright Act if, inter alia, it “asserts a claim

requiring construction of the Act”), as a device to establish the

absence of federal question jurisdiction, see, e.g. , id. at 827 (noting

that “if any aspect of the suit requires an interpretation of the

added), but we have been reluctant to embrace the test as a

reliable means to establish the presence of SFQ jurisdiction. See,

e.g., Genar-Villar, 417 F.3d at 206 n.5 (“We need not decide

whether the Puerto Rico court’s analysis of federal copyright

preemption law [viz., that it lacked jurisdiction to decide copyright

ownership interests] was precisely correct because, in any event,

the [] court viewed its jurisdiction as limited to Puerto Rico

claims.”); First Fed. Sav. and Loan Ass’n v. Greenwald, 591 F.2d

417, 423 (1st Cir. 1979) (noting that “some circuits have taken a

broader view of federal question jurisdiction, namely that ‘e)ven

though the claim is created by state law, a case may “arise under”

a law of the United States if the complaint discloses a need for

determining the meaning or application of such a law,” but then

refusing to decide whether or not to adopt that rule as circuit law)

(citation omitted); see also Royal v. Leading Edge Prods., Inc., 833

F.2d 1, 2 (Ist Cir. 1987) (referring to the 7.B. Harms test as

merely “the most frequently cited test,” but finding no federal

jurisdiction).

40a

plaintiffs interpretation of the federal seizure-

notification statute, it necessarily would lose the

lawsuit, because it would thereby concede its violation

of its fiduciary duty under state corporation law.

Thus, it was reasonable to anticipate, from the

complaint itself, that the federal constitutional issue

was substantial and that ‘it would have to be

adjudicated.

—_—--——

By contrast, although the Cambridge complaint

may depend in the abstract on Seemann’s original

to satisfy Grable’s heightened “active dispute” test.

The ultimate success of the Cambridge complaint may

depend on an actual adjudication of any number of

issues, federal and non-federal, which are not yet

apparent at the pleading stage. See Royal v. Leading

Edge Prods., Inc., 833 F.2d 1, 2-3 (1st Cir. 1987)

(finding no jurisdiction, even though, if plaintiff

succeeded in obtaining contract rescission, the court

would need to apply 17 U.S.C. § 201(b) to defeat his

claim; “[t}he work-made-for-hire doctrine is, at best,

only tangentially implicated [and] [i]ndeed, it is not

even mentioned in the complaint”); see also Cambridge

Literary, 295 F.3d at 64 n.4 (“It is possible to imagine

a Massachusetts court looking to federal copyright law

and German contract law as to whether Hummel,

Seemann, and Fink are co-owners; Austrian

inheritance law if the Seemann rights are disputed;

federal copyright law as to whether the figurines are

derivative works; and to the law of any of several

jurisdictions as to rights and defenses among co-

owners and available remedies.”); Derminer v. Kramer,

386 F. Supp. 2d 905, 912 (E.D. Mich. 2005). For

example, Goebel itself notes that, if Goebel denies the

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4la

allegation, Cambridge eventually may need to prove as

well that the Hummel figurines were “derivative

works” from the illustrations contained in Das

Hummelbuch, see 17 U.S.C. § 101, and failure to

establish that fact might prove equally dispositive and

fatal to the accounting claim. Grable makes clear,

however, that the mere presence of these potential

federal issues is insufficient to create SFQ jurisdiction.

Unlike the plaintiff in De Sylva, who expressly

included in his complaint a request for a declaration of

his co-ownership rights in the copyright, the

Cambridge complaint does not place its co-ownership

of the copyright in “active dispute.” Such an active

dispute would arise, if at all, at the time Goebel files

its answer to the complaint, see supra note 16, and

pursuant to the well-pleaded complaint rule, this is

insufficient to invoke SFQ jurisdiction. Further, it

simply is not the case that Goebel necessarily will

forfeit its chances of winning the case if it chooses not

to contest the Cambridge co-owner. aip interests. If

Goebel stipulates to the Cambridge co-ownership

rights under 17 U.S.C. §§ 101 and 201(a), it will have

done no more than concede Cambridge’s standing to

bring suit under state law.

3. The “Congressional Intent” Requirement

Application of the SFQ exception to this type of

accounting claim between copyright co-owners also

would serve no apparent congressional policy

concerning the proper allocation of jurisdictional labor

between the federal and state courts in cases which

happen to involve copyrighted material. See

Templeton Bd. of Sewer Comm’rs v. Am. Tissue Mills

42a

of Mass., Inc. , 352 F.3d 33, 40-41 (1st Cir. 2003) (“We

do not believe that merely because a court will have to

interpret the federal regulations, it necessarily follows

that federal jurisdiction exists. . . . ‘(T]he

determination of whether a federal issue is sufficiently

substantial should be informed by a sensitive

judgment about whether the existence of federal

judicial power is both appropriate and pragmatic,’ and

... ‘at bottom, we must determine whether the dispute

is one that Congress intended federal courts to

resolve.”) (citations omitted); Nimmer on Copyright

§ 12.01.

The Copyright Act and its preemption provision

expressly apply to acts of copyright infringement, viz.,

the unauthorized use and exploitation of copyrighted

materials by a person who neither owns the copyright

nor has a valid license. See 17 U.S.C. § 301(a)

(preempting only those “legal and equitable rights that

are equivalent to any of the exclusive rights within the

general scope of copyright as specified in $ 106”)

(emphasis added); id. § 106 (providing that “the owner

of copyright under this title has the exclusive rights to

do and to authorize any of the following [acts].”)

(emphasis added). By definition, however, a co-owner

who profits from the copyright cannot “infringe” or

make “unauthorized use” of the copyright, as that

concept is defined in 17 U.S.C. § 106. See Weissmann

v. Freeman, 868 F.2d 1313, 1318 (2nd Cir. 1989) (“[A]n

action for infringement between joint owners will not

lie because an individual cannot infringe his own

Supp. 2d 747, 753 (S.D. Tex. 1997), affd, 139 F.3d 494

(5th Cir. 1998).

43a

Instead, the Copyright Act, which sets forth express

remedies available to copyright owners against

infringers, deliberately omits any comparable express

or implied remedy for a co-owner seeking an

accovating from a joint copyright owner who has

profited from use of the copyright. The Act’s

legislative history unambiguously explains the reason

for this omission: “[t]here is . . . no need for a specific

. statutory provision concerning [the] rights and duties

of the coowners of a work; court-made law on this point

is left undisturbed.” H.R. Rep. No. 94-1676, at 121,

reprinted in 1976 U.S.C.C.A.N. 5659, 5736. To the

extent that this residual court-made law involves the

common-law rights of tenants in common, the primary

source always has been state (and not federal) law,

and the Copyright Act contains no hint that Congress

intended to usurp the state courts’ traditional

jurisdiction to adjudicate these types of claims. See

Nimmer on Copyright § 6.10; Goodman, 78 F.3d at

1012 (“The applicability of federal law ends with that

determination [fof non-preemption], as Goodman’s

claim for an accounting is governed in all respects by

state law. It is widely recognized that ‘[a] co-owner of

a copyright must account to other co-owners for any

profits he earns from the licensing or use of the

not derive from the copyright law’s proscription of

infringement. Rather, it comes from “. . . general

principles of law governing the rights of co-owners.”

As those general principles are rooted in state law, we

look to the law of Louisiana for answers to the

remaining issues presented by this appeal.”) (citations

omitted); Oddo v. Ries, 743 F.2d 630, 633 n.2 (9th Cir.

1984) (same, concluding that “a suit to bring the co-

owner of a copyright to account does not fall within the

44a

district court’s jurisdiction over actions arising under

[§ 1338]”); Dead Kennedys v. Biafra, 37 F. Supp. 2d

1151, 1153 (N.D. Cal. 1999).

In a case where the federal law at issue does not

contain any comparable remedy (or at least a partial

remedy), one reasonably cannot surmise that Congress

saw the asserted federal interest as “substantial,” and

thus invocation of SFQ jurisdiction is simply

inappropriate. See, e.g., Merrell Dow, 478 U.S. at 817

(“[A] [state-law negligence] complaint [against a drug

manufacturer] alleging a violation of a federal statute

[viz., a federal statute banning misbranding of

prescription drugs] as an element of a state cause of

action, when Congress has determined that there

should be no private, federal cause of action for the

violation, does not state a claim ‘arising under”

§ 1331.”).”

Because Cambridge’s state-law accounting meets

neither of the two SFQ jurisdictional criteria

*! Further evidence of a lack of congressional intention can be seen

in the Copyright Act’s statute-of-limitations provision. Rather

than stating, in typical fashion, that the limitations period applies

to all actions “arising under” the Act, the limitations apply only to

those claims “maintained under” the Act. 17 U.S.C. § 507(b)

(emphasis added); see Goodman, 78 F.3d at 1013 (noting that even

though state-law accounting claim arises under Copyright Act for

jurisdictional purposes, the Act’s three-year limitations period is

not triggered, because the Act contains no remedy as between

to be “maintained” under the Act, but instead is maintained under

state law).

45a

elaborated in Grable, it cannot be said to “arise caer:

the Copyright Act.

B. Complete Preemption

Similarly, the complete preemption doctrine does

not permit us to disregard the well-pleaded complaint

rule and recharacterize — as mere “artful pleading” —

the Cambridge state-law accounting claim as a federal-

law claim “arising under” the Copyright Act.” The Act

plainly does not exert such an overpowering

preemptive force as to bring under the federal courts’

subject matter jurisdiction all state-law causes of

action between co-owners of a copyrighted work. See

Caterpillar, 482 U.S. at 393 (observing that federal

statute’s preemptive effect must be “extraordinary” to

trigger complete preemption); Metro. Life Ins. Co. v.

Taylor, 481 U.S. 58, 64 (1987). Federal courts, as

courts of limited jurisdiction, should implement federal

preemption doctrines as narrowly as possible. See

Loniz v. Tharp, 413 F.3d 435, 440 (4th Cir. 2005)

(noting that there is a rebuttable presumption against

finding complete preemption, so that “[djefendants’

burden is to demonstrate that a federal statute

indisputably displaces any state cause of action over a

given subject matter”) (citation omitted); see also

* Complete preemption, which is a jurisdictional principle, is

distinct from normal “co... Vict” preemption, see SPGGC, 488 F.3d

at 530 n.4, 534; Bruneau v. FDIC, 981 F.2d 175, 179-80 (5th Cir.

1992); Franks v. Waterfield Mortgage Co., No. 1:06-00227, 2007

WL 1232218, at *3 (N.D. Ind. Apr. 24, 2007), the latter being an

affirmative defense which defendant must plead and prove, see

Fifth Third Bank ex rel. Trust Officer v. CSX Corp., 415 F.3d 741,

745 (7th Cir. 2005); infra section IT.C.

46a

Charles A. Wright, Arthur R. Miller, & Edward H.

Cooper, 14B Federal Practice and Procedure:

Jurisdiction 3d § 3722.1, at 517 (“Because of the

obvious federalism implications of the complete

preemption doctrine, its application has _ been

extremely limited by the courts.”). Complete

preemption analysis thus depends on the existence of

palpable evidence that Congress intended to displace

completely a particular category of state-law causes of

action, as manifested by the federal statute’s language,

overall structure, and legislative history. See Metro.

Life, 481 U.S. at 65; Magee v. Exxon Corp., 135 F.3d

599, 601-02 (8th Cir. 1998).

Unlike the few federal statutes which have been

found to effect complete preemption (eg., the

governance of the Employee Retirement Income

Security Act (ERISA) over all plan-“related” causes of

action, see Metro. Life, 481 U.S. at 67; Hotz v. Blue

Cross and Blue Shield of Mass., Inc., 292 F.3d 57, 59

all claims simply because the parties’ dispute happens

to involve a copyrighted work. See Venegas-Herndndez

v. Asociacién de Compositores y Editores de Miisica

Latinoamericana, 424 F.3d 50, 58 (1st Cir. 2005) (“The

matters that pertain to copyright.”); Royal, 833 F.2d at

2. Further, although the Copyright Act (unlike

ERISA, for example) gives the federal courts exclusive

(rather than concurrent) jurisdiction over any claims

which arise under the Act, see 28 U.S.C. § 1338(a), this

jurisdictional canon necessarily presupposes an

antecedent inquiry as to whether a particular state-

law cause of action involving a copyrighted work can

be said to “arise under” the Act in the first instance.

47a

Unlike ERISA, 29 U.S.C. § 1144(a) (providing that

ERISA “shall supersede any and all State laws” to the

extent that those laws “relate to any employee benefit

plan”) (emphasis added), the Copyright Act’s

preemption provisions are not even remotely panoptic.

The Copyright Act preempts only those “legal and

equitable rights that are equivalent to any of the

exclusive rights within the general scope of copyright

as specified in § 106.” 17 U.S.C. § 301(a) (emphasis

added). Further, “[nlothing in [the Act] annuls or

limits any rights or remedies under the common law or

statutes of any State with respect to —. . . activities

violating legal or equitable rights that are not the

equivalent to any of the exclusive rights within the

general scope of copyright as specified in section 106A

with respect to works of visual art.” Id. § 301(b)(3)

(emphasis added); see Blab T.V. of Mobile, Inc. v.

Comcast Cable Commce’ns, Inc., 182 F.3d 851, 857

(llth Cir. 1999) (finding no complete preemption

because the federal Cable Act contained language

which “preserv[ed] state authority except in areas in

which the exercise of this authority would be

inconsistent with federal law”); cf: Metro. Life, 481

U.S. at 65-66 (citing — as affirmative evidence of

complete preemption — legislative history that “[alll

such actions in Federal or State courts are to be

regarded as arising under the laws of the United

States in similar fashion to those brought under

section 301 of the Labor-Management Relations Act of

1947”).”°

* The two courts of appeals which have held that the Copyright

Act completely preempts state law notably involved state causes

of action which were the functional equivalent of federal claims for

48a

More importantly, the Copyright Act does not

preempt all state-law claims between copyright co-

owners, since the Act itself creates no alternative

federal cause of action, remedy, or procedural

mechanisms to govern such claims. See Franchise Tax

Bd., 463 U.S. at 24 (“[I}f a federal cause of action

completely preempts a state cause of action any

complaint that comes within the scope of the federal

cause of action necessarily ‘arises under’ federal law.”)

(emphasis added); Beneficial Nat'l Bank v. Anderson,

539 U.S. 1, 8 (2003) (finding that National Bank Act

completely preempted state-law cause of action

because it “provided the exclusive cause of action for

the claim asserted and also set forth procedures and

remedies governing that cause of action”) (emphasis

added); Metheny, 352 F.3d at 460 (noting that complete

preemption does not pertain where federal statute

“lacks a federal enforcement mechanism by which

plaintiffs may proceed with claims of the type asserted

in this action”); Bd. of Chosen Freeholders v. Tombs,

No. 04-3804, 2006 WL 3713109, at *2 (3d Cir. Dec. 18,

2006) (unpublished); Ultramar Am. Ltd. v. Dwelle, 900

F.2d 1412, 1416 (9th Cir. 1990) (“[WJhere federal law

preempts state law yet fails to provide its own cause of

action . . . although federal law is a perfectly valid

defense to a state claim, that claim cannot be said to

actually be a federal claim, for no federal right of

all state-law claims which are the qualitative equivalent of a

1 F.3d 225, 232 (4th Cir. 1993) (same).

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49a

action exists on point.”); Korman v. Iglesias, 736 F.

neglected to provide for remedies between co-authors

[and so] . . . Congress must have intended that co-

authors may claim for an accounting or otherwise

proceed under common law principles.”). Indeed, as

previously noted, the Act’s legislative history plainly

discloses Congress’ intent to leave such disputes

outside the federal court’s exclusive copyright

jurisdiction. See H.R. Rep. No. 94-1676, at 121,

reprinted in 1976 U.S.C.C.A.N. 5659, 5736.

As the Cambridge state-law accounting claim runs

afoul of neither the SFQ jurisdictional criterion, nor

the complete preemption criterion, it does not “arise

under” the Copyright Act.** Hence, the Act’s three-

year limitations period is not applicable.”

** Assuming arguendo that the Copyright Act’s limitations period

applied to the Cambridge accounting claim, I would be compelled

to dissent. In my view, Cambridge has demonstrated on appeal

that several material factual disputes remain as to when its

accounting claim accrued, thus precluding, as a matter of law, any

Rule 56 determination of the accrual date. See Massey v. United

States, 312 F.3d 272, 276 (7th Cir. 2002) (“Summary judgment is

properly granted on the basis of a statute of limitations defense if

... there exist no genuine issues of material fact regarding the

time at which plaintiffs claim has accrued.”).

* The district court held, in the alternative, that even if the

Cambridge accounting claim, the claim still would be governed by

the state’s three-year limitations period applicable to tort actions.

This alternative holding is demonstrably wrong, for two reasons.

First, Goebel would be estopped from asserting this argument by

its previous statement, in its first appeal on the personal

50a

The district court dismissed the Cambridge

complaint on the ground that -he Copyright Act

preempted the Cambridge accounting claim. Many of

the same factors that preclude our finding that the

state-law accounting claim likewise would militate

against any finding for Goebel at summary judgment

on its preemption defense. See Fifth Third Bank, 415

F.3d at 745 (noting that preemption is an affirmative

jurisdiction issue, that Cambridge “does not assert a cause of

action based on tortious activity either within or outside

Massachusetts.” See Cadle Co. v. Schlichtmann, Conway, Crowley

& Hugo, 338 F.3d 19, 23 (1st Cir. 2003) (“We generally will not

permit litigants to assert contradictory positions at different

stages of a lawsuit in order to advance their interests.”) (citation

omitted). Second, the Cambridge accounting claim does not allege

that Goebel wrongly retained or converted profits that it derived

from Das Hummelbuch, nor could it do so because, as a co-owner

of the copyrighted work, Goebel is free to use the copyright to its

fullest. See Goodman, 78 F.3d at 1012. Only once its co-owners

make a suitable demand for an accounting would Goebel have an

- equitable duty to account to all of its co-owners for their respective

shares of those profits. See Bacon v. Bacon, 165 N.E. 485, 488

(Mass. 1929); Dapkus v. Dapkus, No. 269521-KFS, 2007 WL

1229399, at *3 (Mass. Land Ct. Apr. 26, 2007) (unpublished); see

also Goodman, 78 F.3d at 1013 (“Under Louisiana law, an action

by a co-owner for an accounting is governed by a ten-year

prescriptive period (statute of limitations), which ‘d[oes] not begin

to run until demand is made . . . for an accounting.”) (citation

omitted); Bushner v. Bushner, 307 P.2d 204, 208 (Colo. 1957);

Goergen v. Maar, 153 N.Y.S.2d 826, 831 (N.Y. App. Div. 1956);

Harrell v. Samson Res. Co., 980 P.2d 99, 107 (Okla. 1998);

Hallmark v. Tidwell, 849 S.W.2d 787, 791 (Tenn. App. 1992).

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offense upon which defendant bears the burden of

proof); see also Brown v. Earthboard Sports USA, 481

F.3d 901, 913 (6th Cir. 2007). With respect to the

preemption of state-law causes of action involving

copyrighted works, we have applied the two-pronged

“subject matter”/“extra-element” test, Data Gen. Corp.

v. Grumman Sys. Support Corp., 36 F.3d 1147, 1164-

65 (lst Cir. 1994) (finding no Copyright Act

preemption of state-law claim for trade secrets

misappropriation because latter involved “extra

element” — viz., breach of a fiduciary duty — not found

in a copyright infringement claim); see also Dun &

Bradstreet Software Serus., Inc. v. Grace Consulting,

Inc., 307 F.3d 197, 217-19 (3d Cir. 2002); Computer

Mgmt. Assistance Co. v. Robert F. DeCastro, Inc., 220

F.3d 396, 404-05 (5th Cir. 2000), and again inquire

whether the particular state law at issue is the

functional equivalent of a federal copyright

infringement action, or instead is qualitatively

different from a copyright infringement claim. See 17

U.S.C. § 301(a) (preempting state causes of action

which are premised on rights “equivalent to”

§ 106”); Stromback v. New Line Cinema, 384 F.3d 283,

301 (6th Cir. 2004).

Under the Data General test, the state-law

accounting claim between co-owners of a copyrighted

work, which sounds neither in contract nor tort, but in

equitable principles of trust as between joint property

owners, see, e.g., Bacon v. Bacon, 165 N.E. 485, 473

(Mass. 1929) (describing co-owner relationship as

fiduciary in nature); supra note 25, is not preempted

because it is not the qualitative equivalent of a

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52a

Further, the Cambridge state-law accounting claim

requires. an extra element not found in a copyright

infringement case: an existing equitable trust

relationship between the parties. In Data General, the

relationship was fiduciary; here, the relationship is

joint ownership of property giving rise to an equitable

duty to provide an accounting of profits. The

accounting claim, and thus it cannot be dismissed on

preemption grounds.

CONCLUSION

In order to bring the Cambridge state-law cause of

action under the Copyright Act’s three-year limitations

provision, the majority announces a_ blanket

jurisdictional rule which threatens to draw into the

federal courts many copyright-related claims over

which Congress deliberately intended to give the state

courts concurrent jurisdiction. As the state courts are

perfectly competent to interpret Copyright Act

definitions that may be tangentially relevant to their

disposition of state-law causes of action, the mere

possibility that they may need to consult those

statutory definitions should not convert claims which

essentially arise under state law into federal claims,

particularly where the corresponding federal statute

has eschewed comparable remedies. Therefore, I

respectfully dissent.

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53a

APPENDIX B

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

Civil Action No. 00-10343-NG

[Filed August 8, 2006]

CAMBRIDGE LITERARY )

PROPERTIES, LTD., )

)

Plaintiff, )

)

Vv. )

a W. GOEBEL PORZELLANFABRIK __ )

a G.M.B.H. & CO. KG. and Goebel )

q Art G.m.b.H., )

; )

4 Defendants. )

4 )

Henry Herrmann, Boston, MA, for Plaintiff.

David P. Shouvlin, Porter, Wright, Morris & Arthur

LLP, Columbus, OH, Dr. Jur. Horst Von Der Osten,

Kaiser-Friedrich-Ring, Deusseldorf, Germany, Joseph

D. Steinfield, David E. Plotkin, Prince, Lobel Glovsky

& Tye LLP, Boston, MA, for Defendants.

GERTNER, District Judge.

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54a

Electronic ORDER entered granting 106 Motion for

Summary Judgment, adopting Report and

Recommendations re 146: After carefully reviewing

Magistrate Judge Dein’s lengthy Report and

Recommendation in connection with Defendant’s

Motion for Summary Judgment, and the voluminous

objections and responses filed by each side, I adopt the

Report and Recommendation without change. First, I

reject the plaintiffs objections to that portion of the

Magistrate’s decision that addresses the statute of

limitations issues. I entirely agree that Cambridge’s.

claims are barred by the Copyright Act’s three year

statute of limitation, that, even assuming Cambridge

had asserted a state law cause of action, these claims

would still be time-barred. I also agree that there is no

basis on the record to conclude that the limitations

period is tolled (under the doctrine of equitable

tolling). Second, I also reject defendant’s objections to

that portion of the Magistrate’s decision that deals

with issue preclusion, which would have provided an

alternative basis for the dismissal of this action. I

agree with Magistrate Judge Dein that there are

issues of fact with respect to issue preclusion on this

record. Nevertheless, based on the limitations finding,

I conclude that summary judgment for the defendant

be GRANTED on the grounds that plaintiffs claims

are untimely

REPORT AND RECOMMENDATION ON

DEFENDANTS’ MOTION FOR

SUMMARY JUDGMENT

DEIN, United States Magistrate Judge.

55a

I. INTRODUCTION

The plaintiff, Cambridge Literary Properties, Ltd.

(“Cambridge”), has brought this action against the

defendants, W. Goebel Porzellanfabrik G.m.b.H. & Co.

Kg. and Goebel Art G.m.b.H. (collectively, “Goebel”),

seeking a share of the defendants’ profits resulting

from their use of images allegedly taken from a book in

which Cambridge claims to have a copyright interest.

By its Amended Complaint, Cambridge claims that it.

is the co-owner of the United States Renewal

_ Copyright (“Renewal Copyright”) in the book “Das

Hummelbuch,” and, as such, is entitled to an

accounting and imposition of a constructive trust to

recover its alleged share of the profits that Goebel has

realized and will continue to realize from, among other

things, the distribution and sale of figurines and

products allegedly derived from the book, its use of the

figure “The Merry Wanderer” as its trademark or logo,

and membership fees for the M.I. Hummel Club in the

United States.

Presently before the court is the Defendants’

Motion for Summary Judgment (Docket No. 106) in

which Goebel is seeking summary judgment on the

grounds that the plaintiffs claims are time-barred and

because Cambridge is collaterally estopped from

claiming a co-ownership interest in the Renewal

the reasons detailed herein, this court finds that

Cambridge’s claims are barred by the Copyright Act’s

three-year statute of limitations, and that, even

assuming Cambridge had asserted a state law cause of

action, these same claims would remain time-barred

under Massachusetts law. This court also finds,

56a

however, that there are disputed facts relating to the

issue preclusion claim. Accordingly, this court

recommends to the District Judge to whom this case is

assigned that the defendants’ motion for summary

judgment be ALLOWED on the grounds that the

plaintiffs claims are untimely.

Il. STATEMENT OF FACTS’

The following material facts are undisputed unless

otherwise indicated.

Creation and Copyright of “Das Hummelbuch”

The facts giving rise to this litigation have occurred

over the course of more than seventy years, and began

with the drawings of Berta Hummel, a gifted artist

who was born in Bavaria in 1909 and enrolled in the

Academy of Applied Arts in Munich, Germany in 1927.

(Defs.’ Ex. A J 6). At some point during her life, Berta

Hummel began dra ving pictures of children in rural

' Subject to this court’s separate order issued this date on Goebel’s

motions to strike three fact witness declarations submitted by

Cambridge in support of its opposition to the motion for summary

judgment, the facts are derived from the “Defendants’ Concise

Statement of Material Facts to Which There is No Genuine

Dispute” (“DF”) (Docket No. 108) and exhibits thereto (“Defs.’ Ex.

__”), the plaintiffs filing entitled “Cambridge Controverts the

Defendants’ (Moving Parties) Concise Statement of Material Facts

to Which There is No Genuine Dispute” (“PF”) (Docket No. 119)

and exhibits thereto (“Pl.’s Ex. __”), and the “Plaintiff's Concise

Statement of the Material Facts of Record, Relevant to

Defendants’ Motion, as to Which There Exists a Genuine Issue to

be Tried” (“PDF”) (Docket No. 118).

57a

settings wearing traditional German clothing. (Jd.). In

1931, she joined the Convent of Siessen (“Convent”), a

Congregation of Franciscan Sisters, and, after taking

her vows, became Sister Maria Innocentia Hummel.

(Id.). During or prior to 1934, Sister Hummel and the

Convent had some of Sister Hummel’s drawings

published as postcards. (Jd.; DF J 1).

In May 1934, Emil Fink, the head of a German

publishing company, Emil Fink Verlag (“Fink”),

entered into an agreement with Sister Hummel and

the Convent by which Fink became authorized to

publish forty of Sister Hummel’s drawings in a book

entitled “Das Hummelbuch.” (DF { 3; Defs.’ Ex. A-2).

Thereafter, in November 1934, Fink entered into an

agreement with Margarete Seemann (“Seemann”), an

Austrian poet, pursuant to which Seemann agreed to

provide an introduction and poems for the book. (DF

q 3; Defs.’. Ex. A-3). Fink published Das Hummelbuch

in December 1934. (DF { 4).

Goebel also entered into an agreement with Sister

Hummel and the Convent, which the parties executed

in November 1935. (DF 7 2; Defs.’ Ex. A-1). Pursuant

to the contract, Sister Hummel agreed to convey to

Goebel the exclusive right to transform her drawings

into figurines (the “Hummel figurines”) in exchange for

licensing fees.” (DF J 2; Defs.’ Ex. A-1). The parties

? Since 1935, Goebel has continued to manufacture and sell the

Hummel! figurines, which have proved popular with American

collectors, sell for several hundred dollars apiece, and generate

direct revenues from American sales that are alleged to be in the

millions. Cambridge Literary Props., Ltd. v. W. Goebel

58a

dispute whether Goebel based its design and

manufacture of Hummel figurines on copyrighted

images contained in Das Hummelbuch or on postcards

and drawings that predated publication of the book.

(Am. Compl. { 71; Defs.’ Ex. A ¥ 5).

In 1936, Fink filed an application for copyright of

Das Hummelbuch with the United States Copyright

_ Office.’ (DF ¥ 4). Fink stated in the application form

that it was the copyright owner and that Berta

Hummel and Margarete Seemann were the authors of

the book. (Defs.’ Ex. A-4). It is Seemann’s copyright

interest in Das Hummelbuch that gives rise to

Cambridge’s co-ownership claims in this action.

Specifically, Cambridge alleges that Seemann was a

joint author of the book (Am. Compl. 7 35), and its

claims depend upon a showing that Seemann, Fink,

and Sister Hummel each had a separate ownership

interest in the copyright and its renewal.

Seemann died in 1949, prior to the expiration of the

initial term of the copyright in Das Hummelbuch. (DF

4 5; Am. Compl. § 45). At that time, Seemann’s

interests, if any, reverted to her sister, Theresia

Romanowicz, a resident of Vienna, Austria and

Seemann’s sole next of kin. (Am. Compl. 7 46).

Thirteen years after Seemann’s death, in 1962, Fink

applied to the United States Copyright Office for a

Porzellanfabrik G.m.b.H. & Co., Kg., 295 F.3d 59, 62 (1st Cir.

2002).

* The book was first published in English in 1951 under the name,

“The Hummel! Book.” (Defs.’ Ex. B 4 4).

59a

Renewal Copyright in Das Hummelbuch. (DF { 6). On

the application, Fink identified itself as a “proprietor

of copyright in a work made for hire.” (/d.; Defs.’ Ex.

A-5). Cambridge disputes that Das Hummelbuch was

a “work made for hire” under copyright law, and

asserts instead that it was a joint work of joint

authorship. (Am. Compl. {{ 33-40). Cambridge also

alleges that when Fink obtained the Renewal

co-ownership interest in the Renewal Copyright even

though she was not named in the registration. (/d.

{ 46). Goebel disputes Cambridge’s position,

contending instead that Das Hummelbuch was a work

made for hire under copyright law, and that all of the

renewal rights vested in Fink alone. (See Defs.’ Mem.

at 19-20).

Theresia Romanowicz died in about 1970. (Am.

Compl.J 50). Cambridge alleges that her daughter,

Maria Romanowicz of Vienna, Austria,‘ and her niece,

Dr. Alexandrine Cermanovic-Kuzmanovic of Belgrade,

Yugoslavia, inherited her entire estate in equal halves.

(Id. { 50; Defs.’ Ex. E at 126-29, 256-57). Therefore,

Cambridge asserts, Ms. Romanowicz and Dr.

Cermanovic-Kuzmanovic each obtained ownership

interests in the Renewal Copyright. (Am. Compl. J 51).

In 1971, Fink assigned all of its interest in the

Renewal Copyright to Goebel. (DF { 7). Cambridge

contends, and Goebel denies, that this assignment did

not negate the ownership interests of Seemann’s heirs,

* Maria Romanowicz has a son, Father Sergius Romanowicz, who

has provided evidence in this case.

el oe

60a

Ms. Romanowicz and Dr. Cermanovic-Kuzmanovic.

(Am. Compl. { 70).

to the Renewal Copyright

Schmid Brothers, Inc. (“Schmid”) was the

distributor of Goebel’s Hummel figurines in the United

States. (DF § 8). Schmid also claimed to be the

assignee of Sister Hummel’s sole legal heir, with all of

the right, title, and interest in the works of art created

by Sister Hummel. (Defs.’ Ex. K-2 |@ 4-5). For

purposes of this litigation, there is no dispute between

the parties regarding the chain of ownership

originating from Sister Hummel’s interests in the

Schmid and Goebel have a history of litigation

against one another dating back to the late 1960s. (DF

q{@ 8; PF { 8). Henry Herrmann, Cambridge’s sole

shareholder and counsel in this action, has

represented Schmid in a number of these lawsuits.°

° In 1971, Schmid and Attorney Herrmann entered into a

Contingent Fee Agreement, which provided, inter alia, that in

exchange for his legal services, Attorney Herrmann would receive

a portion of Schmid’s revenues from the sale of Hummel figurines

in the United States, and that he would be entitled to a fee in the

event that Schmid sold or otherwise disposed of certair rights

relating to its Hummel business. (DF 4 9; Defs.’ Ex. G). In 1993,

Schmid filed for bankruptcy, and Attorney Herrmann made a

claim based on the terms of the Contingent Fee Agreement and

related agreements. (DF 4 12). In October 1994, Attorney

Herrmann agreed to a settlement of $3,750,000 from Schmid in

the bankruptcy. (/d.).

6la

(DF 14 8, 15; PF ¥ 8). Attorney Herrmann also served

as a director of Schmid for several years. (DF J 8).

Of particular relevance to the instant litigation, in

1990 Schmid filed a lawsuit against Goebel in the

United States District Court for the Eastern District of

New York in which it claimed that Schmid and Goebel

were co-proprietors in the Renewal Copyright of Das

Hummelbuch (the “New York Litigation”). (DF J 10;

Defs.’ Ex. K-2 [J 10-15). In 1992, Attorney Herrmann,

acting on behalf of Schmid, signed a Consent

Judgment in that case, in which the parties to the

litigation stated that they had “undivided one-half

interests” in the Renewal Copyright. (Defs.’ Ex. A-6

q{ 3). The Consent Judgment was entered by the court

on or about October 19, 1992. (Defs.’ Ex. A-6).

Notwithstanding the language of the Consent

Judgment, Attorney Herrmann was aware that

Seemann’s heirs or next of kin might have grounds for

asserting an interest in the Renewal Copyright. (DF

{ 11). An issue in the instant litigation is whether

Cambridge is estopped from asserting an ownership

interest in the Renewal Copyright as a result of the

1990 litigation. :

Assignment of Rights to Cambridge

In 1995, Attorney Herrmann identified Seemann’s

heirs as Maria Romanowicz and Dr. Alexandrine

Cermanovic-Kuzmanovic, and contacted them in order

to obtain an assignment of their interests in the

Renewal Copyright. (DF 7 13; Defs.’ Ex. E at 66-68,

125-27, 256-57). At the time discussions took place

between Attorney Herrmann and Seemann’s heirs in

August and September of 1995, it is undisputed that

62a

Ms. Romanowicz and Dr. Cermanovic-Kuzmanovic

knew or should have known that they might have had

an interest in the Renewal Copyright of Das

Hummelbuch. (DF J 14). At issue, however, is whether

they knew or should have known that any entity had

taken an adverse position to their interest.

Attorney Herrmann formed Cambridge as a

Massachusetts corporation in August 1995. (DF 4 15).

Shortly thereafter, on September 6, 1995, Ms.

Romanowicz assigned to Cambridge all of her “right,

title and interest in and to any United States

and/or co-authored by Margarete Seeman{[n],

including, without limitation, the work ‘Das

Hummel-Buch” as well as all claims she may have had

against third parties “arising out of or related to their

infringement, use, benefit, and/or profit of/from the

United States Copyright Renewals in any of said

works assigned hereby.” (Defs. Ex. F). Ms.

Romanowicz identified herself in the assignment as

the “heir of Theresia Romanowicz, the sister and next

of kin of Margarete Seeman[n]}.” (/d.).° According to

Goebel, Cambridge paid Ms. Romanowicz $18,000 in

exchange for the assignment. (Defs.’ Mem. at 12).

Following the 1995 assignment to Cambridge,

Attorney Herrmann continued to negotiate with Dr.

Cermanovic-Kuzmanovic’s attorney for the purchase of

Dr. Cermanovic-Kuzmanovic’s interests in the

Renewal Copyright. (Defs.’ Ex. E at 261-65). On

® According to the plaintiff, Ms. Romanowicz made a confirmatory

assignment to Cambridge in 1999. (PF 44 1€ 18).

63a

February 9, 1999, Dr. Cermanovic-Kuzmanovic

assigned to Cambridge all of her “right, title and

interest” in the Renewal Copyright, as well as any and

all claims and causes of action that she may have had

against third parties, including those relating to the

“infringement, use, benefit, and/or profit” from the

Renewal Copyright. (Defs.’ Ex. R). Dr.

Cermanovic-Kuzmanovic identified herself in the

assignment document as “[t]he Co-owner of the

above-referenced renewal copyrights, as heir of

Theresia Romanowicz, the sister of Margarete

Seeman[n], as the latter’s next of kin.” (/d.). According

to Goebel, Cambridge paid Dr. Cermanovic-

Kuzmanovic 100,000 Austrian Schillings, or about

$10,000, in exchange for the assignment. (Defs.’ Mem.

at 12).

Cambridge filed the instant action on February 24,

2000. (DF { 18). Cambridge’s claims are premised on

its co-ownership of the Renewal Copyright based on its

assignments from the Seemann heirs, while Goebel

disputes that Cambridge has any such ownership

interest. (DF 7 19). In particular, Goebel asserts that

Das Hummelbuch was not a joint work, but a work for

hire under applicable copyright law. (/d.; Defs.’ Ex. A

{ 8). It also contends that the Hummel figurines are

not based on the drawings in the book, but rather are

based on drawings in which the Seemann heirs had no

interest. (Defs.’ Ex. A 7 5). Cambridge, on the other

hand, contends that the book is a joint work under

(Am. Compl. 99 33-40). Furthermore, Cambridge

contends that all the Hummel figurines are based on

drawings in the bo

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