# Petition for Writ of Certiorari — Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. & Co. KG (No. 07-1371) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386020_1423%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2008 ## Text 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 i 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”? ll 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. ; i é ol “iv ae PK: Yj we io i °¥ iv 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 Vv 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 COPYRIGHT ACT’S THREE-YEAR 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 vi 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 1 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 2 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. 3 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 4 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. Copyright Office, “Berta Hummel” and “Margarete 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} 5 copyright shows that information (ibid), which is 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 copyright law, Seemann’s sole surviving next of kin, 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). 6 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. 7 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 8 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, 9 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, 10 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 11 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 %, 3 = isd re a i BR BY i By - ay ae DF iX a 9 See 4 ~ Be. 4) oe BD dy aes $ Be 3 —4 7K he % a oS i 4 Po & Fe, ea AS + oi a ge Bip YY ATR AA a IEE sch abate 12 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. 13 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 Copyright Act is also maintained under the Act as per 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. 14 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 15 was automatically co-extensive with the jurisdictional parameters of the Act: 3 i o 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). 16 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 17 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. 18 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. 19 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) 20 (“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 21 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 copyright cases involving famous songs do not occupy 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 22 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 Pe a RE a bE AST Ye ae ee rte tae ee, ARATE METS he earn LIEN NE SOON MAD CRLA OER RY CAE rere) PACE A Mite et SMe NAL OTE 23 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 gale nS) a '> cae Vahl Sieh BERT Fer AAC fp pag Ri ieee r eae ba es ea nb ais shies ak AS POE Re MRD we ee ES ak 3) SEE VL Ee Ce aes ie SA 24 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 & 3 : a ok i ie se eR lr oie sofas a Be i he TD he len Some as OB Bea hy Bao 03 y, Pre Ee ee eee» 25 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. Bi 26 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 copyright or of real property. As the majority correctly 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 C5 jag Bs dc oe ER ia a ie aa Ce BR ON A a a TORE ae Ie Nn OY Eee OE, pO Ie cn ee BA ee ng Ee eee Se ed -PReR ab 27 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. 28 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 29 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 Copyright Act’s limitations had been held to govern. 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. 30 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 COPYRIGHT ACT’S THREE-YEAR 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: = 31 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). spon A Bisons Oy Sai maa ‘Giiceervs Ss Fan Eee ane east es a s Pe EERIE ERE OR NS ad 32 : 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 a! oo Z. ou A. oan < la 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. ee ee ee ee ee ee ee Le dd a a sad 2a 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. OR a EN eg ke ON a, Ea Wee ee en ee oe Vg ON ne ee ee id a Ne oe 7 - : : 3 . A es ¢ 3a 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 4a 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 5a 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. I. 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. 6a 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]}.” 7a 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 Copyright Office. : 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 8a 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 copyright for Das Hummel-8uch because Seemann’s poems appear in the book. In order to exploit that interest, Herrmann sought an assignment of copyright interests from Seemann’s heirs. Herrmann formed 9a 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 copyright interests in Das Hummel-Buch. They were 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 Copyright Renewals in any of the works authored 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 ls f f - lla Cambridge does not claim it owns any independent copyright interests in any images created by Sister 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 Copyright Act’s three-year statute of limitations 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 copyright where ownership is in dispute, that means 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 copyright in Das Hummel-Buch. It both asserts 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 Copyright cases may raise different issues, some of 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 copyright interests -- is governed by the Copyright Act. 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 sore Sh SNES, me eee SSCS SETA LaSalle RIE eee * a i OES ; Pg WT oN = = fe a Be ‘ bes oP ae Be. Be = te ec: 17a Copyright Act, the Act’s three-year statute of 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 Copyright Act of 1909. Cf De Sylva, 351 U.S. at 580. 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 copyright claim brought after three years from accrual | 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 Dee ia ae ay ox vie “8 ot es oe st a ee Saal ees é ime i, Ee oe = oa ae ta ay a a ad tenons ae eee ea are Spina, Pe eke eae, BO " BO yeh wat alae) pee ES pha UN tas tee bas oh Ser be oxEt Tecate ye Coe. thie FO Pee SE Oe eat! PAT hana Sie CBIR 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 A Uta ar a Ratiihe NA LUCA nee ka neat ea Band 2c teat lira es he Bo eee : Ba eee eae aa Sate ceenies Fyn weoeSes EPA Sek a Mee OS aah tae 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. eh ort eet Me ees, By raat it DG Seah aces iN as PPS Ml SEPT RRO Rt Eres ETN Om ES OIE ney ey RTA END S Pies Le Ake reat 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 copyright lists the publisher as “proprietor of copyright 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 copyright as an heir to Seemann, then she would have 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- 12 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). 13 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 ; os de 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 copyright in Das Hummelbuch, the Cambridge claim © 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. I 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 Copyright § 12.01 (2005) (noting that “the [federal] 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 © All the other cases cited by the majority are cut from this 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 II 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 Copyright Act) can be said to exert such a pervasive 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 Copyright § 12.01[A]). Nonetheless, since the “federal 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 Copyright Act (viz., those which include an “extra element” 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 Copyright Act, the complaint does not reveal it”) (emphasis 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). | i 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 copyright co-ownership, that fact alone is insufficient 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 : aoe S — ins ee ee 's ystt Soe — se, eee ee 2 — 7? 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 activ [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386020_1423%3A1. Public record. Not legal advice.