Garnier v. Andin ( 1994 )

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 94-1446
CHARLES GARNIER, PARIS,
Plaintiff - Appellant,
v.
ANDIN INTERNATIONAL, INC., ET AL.,
Defendants - Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Raymond J. Pettine, Senior U.S. District Judge]
Before
Torruella, Selya and Cyr,
Circuit Judges.
John D. Deacon, Jr., with whom Flanders & Medeiros, Inc.,
was on brief for appellant.
Julius Rabinowitz, with whom Josephine Bachmann, Kuhn &
Muller, Esqs., William Richard Grimm, Christopher M. Neronha and
Hinckley, Allen & Snyder, were on brief for appellees.
October 7, 1994
TORRUELLA, Circuit Judge. This case requires us to
determine the proper application of the so-called "cure"
provision of the copyright laws, 17 U.S.C. 405(a), which allows
authors seeking copyright protection to remedy a prior failure to
affix notice of copyright to copies of their creative work in
order to avoid forfeiting protection of the copyright laws.
Because the requirement of copyright notice was recently removed
from the statute, some confusion has arisen over the application
of the cure provision in cases where copies without notice were
distributed before or after the change in the law. We are
presented here with such a case. The district court found that
the cure requirements applied in this case and granted summary
judgment on the ground that a proper cure was not effected.
Although we disagree that some of the facts relied upon by the
district court are undisputed, we find that the court's legal
conclusions are correct and affirm the judgment based on an
alternative version of facts that are not in dispute.
I. BACKGROUND
Plaintiff-appellant, Charles Garnier, Paris ("Garnier")
is a French company engaged in the business of designing,
manufacturing and selling fine jewelry around the world. In
1987, a Garnier employee designed a piece of jewelry known as the
Swirled Hoop Earring. Garnier first showed and offered the
Swirled Hoop Earring for sale publicly in April of 1988. Garnier
has distributed the Earring ever since to customers
internationally and in the United States.
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Defendants-appellants Andin International, Inc. and
Jotaly, Ltd., a corporate affiliate of Andin, (collectively
referred to as "Andin") manufacture and sell jewelry in the
United States. In 1990, Andin began manufacturing and selling
identical copies of the Swirled Hoop Earring without Garnier's
knowledge or authorization. In July of 1992, Garnier discovered
that Andin was producing and distributing infringing copies of
its Swirled Hoop Earring. Garnier immediately registered its
copyright in the earring at that time,1 asserting that this was
the first time it had ever considered seeking copyright
protection for that piece.
Prior to the registration of the Swirled Hoop Earring
design in July of 1992, none of Garnier's Swirled Hoop Earrings
carried a notice of copyright.2 After registering the Swirled
Hoop Earring, Garnier's factory immediately began placing notice
of copyright on every copy of the Swirled Hoop Earring produced
thereafter. Garnier claims that, once it discovered Andin had
copied the Swirled Hoop Earring, it discarded all remaining
Swirled Hoop Earrings in its own inventories that did not have
proper notice, and refrained from delivering any of the earrings
without notice to its retail customers. Thus, all of Garnier's
1 The Swirled Hoop Earring is copyrightable as an original
sculptural work. 17 U.S.C. 102(a)(5).
2 Copyright notice for jewelry consists of the copyright symbol
or the word "Copyright," followed by the name of the owner of the
copyright, "affixed" to each copy in such a manner as "to give
reasonable notice of the claim of copyright." 17 U.S.C. 401(b)
& (c).
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distributions of the Swirled Hoop Earring after July of 1992
contained notice of copyright.
The parties dispute whether copies of the Swirled Hoop
Earring existed in retail stores selling Garnier's jewelry as of
July of 1992. Garnier's customers consist of independent retail
jewelers, retail jewelry chains, multiple store locations and
department stores. Although there are 150 such customers, only
50 are continuing or repeat costumers. Garnier claims that its
customers had little, if any, inventory of the Swirled Hoop
Earring at the time Garnier "discovered" the need to provide
copyright notice in July of 1992. According to Garnier, mid-
summer is the low point in the business cycle for retail jewelry
because inventories are used up and new orders go out for fall
delivery. In September of 1992, however, Andin purchased a
Swirled Hoop Earring at Bloomingdale's, one of Garnier's
customers, which did not bear any copyright notice. Garnier also
sent a letter to its fifty largest customers stating that it had
registered a copyright in the Swirled Hoop Earring. One Garnier
official admitted that the letter was sent in case any of the
retailers still had the earring in their inventories.
Ultimately, Garnier simply did not know how many Swirled Hoop
Earrings its retailers still had in their inventories as of July
of 1992.
The letter that Garnier sent to its fifty largest
customers was the only remedial effort taken by Garnier with
respect to the Swirled Hoop Earrings still remaining in retail
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store inventories in direct response to the July, 1992 discovery
of Andin's infringement. In the letter, Garnier stated that it
held a copyright in the Swirled Hoop Earring, but did not
indicate that copyright notice had been omitted from the earrings
in the retailers' inventories or that there was a need to rectify
the omission by adding notice of copyright. Garnier claims it
did not send the letter to the other 100 retail customers because
those customers were only one-time purchasers of the Swirled Hoop
Earring, and they were therefore unlikely to have any Swirled
Hoop Earring inventory left by July of 1992. Garnier never
offered to send a tag or label bearing a copyright notice to the
retailers for placement on any unnoticed items in their
inventory.
Garnier did have another arrangement, already in place
by the time Garnier discovered Andin's infringement in July of
1992, that was designed to provide a general notice of copyright.
Beginning in 1990, Garnier provided all its retail costumers with
a "story card" and instructed them to include the card with the
sale of all Garnier products to purchasing consumers. The story
card stated, among other things, that the purchased piece is a
"Charles Garnier of Paris original . . . genuine 18 karat gold
copyrighted design," and that "every Charles Garnier design is a
genuine copyrighted original." The card says nothing in
particular about the Swirled Hoop Earring, the lack of copyright
notice, or the need to affix notice to unnoticed pieces.
Although the story card was not attached or affixed to the
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jewelry pieces themselves, Garnier claimed that its retailers
gave the story card to every customer who bought Garnier jewelry.
Garnier occasionally checked to confirm this but generally relied
on the retailers' word that they were providing the story card to
purchasers of Garnier jewelry.
Garnier brought this action in October of 1992,
asserting two claims of copyright infringement against Andin.
Count I of the complaint alleged that Andin had infringed
Garnier's copyright in the Swirled Hoop Earring and Count II
alleged that Andin had infringed Garnier's copyright in another
piece of jewelry. The claim in Count II was eventually settled
and is not presently before us. In May of 1993, Garnier filed a
motion for a preliminary injunction against Andin's continuing
manufacture and distribution of copies of Garnier's Swirled Hoop
Earring. Andin then filed a motion for partial summary judgment
as to Count I of the complaint. Following a hearing, the
district court denied Garnier's motion for a preliminary
injunction and granted Andin's motion for summary judgment as to
Count I. The court concluded that Garnier's copyright in the
Swirled Hoop Earring had been forfeited because Garnier had
omitted notice of copyright from the Swirled Hoop Earring when it
was first published and subsequently failed to take reasonable
efforts to cure that omission. Entry of final judgment as to
Count I was made by the court under Rule 54(b) on March 2, 1994.
Garnier appealed and, after ordering the district court to
provide a more expansive statement of the reasons for its Rule
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54(b) certification, we heard the present appeal.
II. ANALYSIS
A. What Efforts To Cure, If Any, Are Required?
This case centers around the "cure" provision of the
copyright statute, 17 U.S.C. 405(a). This provision enables
would-be copyright holders who have failed to provide proper
notice on a creative work for which they seek protection under
the copyright laws to avoid forfeiture of protection for that
work by taking various remedial measures.3 See 2 Nimmer on
3 17 U.S.C. 405(a) provides:
(a) Effect of Omission on Copyright. --
With respect to copies and phonorecords
publicly distributed by authority of the
copyright owner before the effective date
of the Berne Convention Implementation
Act of 1988, the omission of the
copyright notice described in sections
401 through 403 from copies or
phonorecord publicly distributed by
authority of the copyright owner does not
invalidate the copyright in a work if --
(1) the notice has been omitted from no
more than a relatively small number of
copies or phonorecords distributed to the
public; or
(2) registration for the work has been
made before or is made within five years
after the publication without notice, and
a reasonable effort is made to add notice
to all copies or phonorecords that are
distributed to the public in the United
States after the omission has been
discovered; or
(3) the notice has been omitted in
violation of an express requirement in
writing that, as a condition of the
copyright owner's authorization of the
public distribution of copies or
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Copyright 7.13[B] (1985) [hereinafter Nimmer]; Note, Omission
of Copyright Notice Under Section 405(a): What Kind of Oxymoron
Makes a Deliberate Error?, 60 N.Y. U. L. Rev. 956 (1985)
[hereinafter Note, Omission of Notice]. Under 405(a)(2),
failure to affix proper notice to certain copies of a work will
not result in forfeiture of copyright protection if, within five
years after the first publication of a copy without notice, the
work is registered at the Copyright Office and a "reasonable
effort" is made by the author to add notice to all copies
distributed to the public "after the omission has been
discovered." 17 U.S.C. 405(a)(2); Princess Fabrics, Inc. v.
CHF, Inc., 922 F.2d 99, 103 (2d Cir. 1990); Donald Frederick
Evans v. Continental Homes, Inc., 785 F.2d 897, 905-12 (11th Cir.
1986); Hasbro Bradley, Inc. v. Sparkle Toys, Inc., 780 F.2d 189,
193-94 (2d Cir. 1985); Shapiro & Son Bedspread Corp. v. Royal
Mills Assoc., 764 F.2d 69, 72-75 (2d Cir. 1985).
Prior to March of 1989, notice of copyright was
mandatory, thus proper cure for omission of copyright notice was
required for all copies distributed to the public after the
omission of notice was discovered. Nimmer 702[C], at 7-15
through 7-16. In 1988, the copyright statute was amended by the
Berne Convention Implementation Act of 1988 ("BCIA"), Pub. L. No.
100-568, 102 Stat. 2853 (amending 17 U.S.C. 101 et seq.), in
phonorecords, they bear the prescribed
notice.
Garnier has not claimed that 405(a)(1) or 405(a)(3) apply in
this case, so we confine our discussion to 405(a)(2).
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order to bring the United States in line with the Berne
Convention on Copyright, an international convention aimed at
harmonizing copyright law around the world. Nimmer 702[B], at
7-14. Consequently, effective March 1, 1989, the attachment of
notice of copyright is no longer required to gain copyright
protection for creative works, although it is still encouraged
through various incentives. Id. at 7-14, 7-16; see, e.g., Direct
Marketing of Va., Inc. v. E. Mishan & Sons, Inc., 753 F. Supp.
100, 104 n.8 (S.D.N.Y. 1990). The aforementioned cure
requirements provided in 405(a), however, are retained in the
amended statute and apply to "copies and phonorecords publicly
distributed by authority of the copyright owner before the
effective date of the [BCIA]." 17 U.S.C. 405(a); Encore Shoe
Corp. v. Bennett Indus., Inc., 18 U.S.P.Q. 2d 1874 n.9 (D. Mass.
1991); Nimmer 7.13[B]. One issue bedeviling this case is
whether the BCIA amendments have eliminated Garnier's need to
cure some or all of the copies of the Swirled Hoop Earring, given
that Garnier first distributed copies prior to the effective date
of the BCIA amendments, but also distributed copies after the
amendments went into effect.
Before we address that issue, however, we must first
review the district court's determination of the point at which
Garnier "discovered" its omission of copyright notice for
purposes of the cure provision. 17 U.S.C. 405(a)(2) (requiring
a "reasonable effort" to add notice to all copies distributed to
the public after the omission of notice "has been discovered").
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The discovery date is important for determining the date at which
cure efforts should commence and for determining whether the
"delay," if any, between discovery and cure is such that
subsequent cure efforts can no longer be considered reasonable.
See, e.g., Princess Fabrics, 922 F.2d at 103; Valve & Primer
Copr. v. Val-Matic Valve & Mfg. Corp., 730 F. Supp. 141, 143-44
(N.D. Ill. 1990).
1. When was the Omission of Copyright Notice
Discovered?
Garnier claims that it discovered the omission of
copyright notice on copies of its Swirled Hoop Earring in July of
1992 -- when Garnier found out that Andin had produced and sold
copies of the Swirled Hoop Earring design. The district court
found, however, that Garnier "should have known" of the omission
of notice when Garnier initially distributed the Swirled Hoop
Earring in April of 1988. The district court concluded,
therefore, that Garnier "discovered" the omission of notice on
that date. On appeal, Garnier asserts that the court erred both
legally and factually. We agree only with the latter assertion.
Courts and commentators have developed several
different approaches toward the problem of determining what
constitutes the "discovery" of omission of copyright notice, and
at what point discovery occurs for purposes of the cure provision
in 405(a). At one extreme is the rule announced in O'Neill
Devs, Inc. v. Galen Kilburn, Inc., 524 F. Supp. 710, 714 (N.D.
Ga. 1981), which states that "discovery" relates to "the fact
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that the existence of a copyright has become an issue." In other
words, discovery occurs when a copyright holder finds out that
someone else is copying his or her creative work. The court in
O'Neill did not state any authority or reason for its rule;
rather, it focused on discrediting an alternative rule endorsed
in Nimmer on Copyright, Nimmer 7.13[B][3], at 7-124.2 through
7-130. According to Nimmer, any deliberate or intentional
omission (that is, omissions that are not "inadvertent,"4) are
automatically discovered upon the date when a copy of the work is
first published or publicly distributed. Id. at 7-125 through 7-
126; see also Beacon Looms, Inc. v. S. Lichtenberg & Co., Inc.,
552 F. Supp. 1305, 1310-12 (S.D.N.Y. 1982), criticized by Hasbro
Bradley, 780 F.2d at 195-96. Nimmer reasons that if an omission
is deliberate, "it must be immediately known (or 'discovered')."
Nimmer 7.13[B][3], at 7-125. "Simply put, one cannot 'discover'
4 Inadvertent omissions include those occurring when the author
intended to affix notice to published copies but his or her
attempts to do so were frustrated because of some mechanical or
publishing mistake that left notice off some or all of the
copies. Beacon Looms, Inc. v. S. Lichtenberg & Co., Inc., 552 F.
Supp. 1305, 1313 (S.D.N.Y. 1982); Note, Omission of Notice, 60
N.Y. U. L. Rev. at 957-59. Omissions occurring because the
author never thought about, or knew of, the availability of
copyright protection or the requirement to affix notice
("thoughtless omitters") or because the author mistakenly thought
protection was unavailable ("mistake of law omitters") have
usually been considered to be deliberate, as opposed to
inadvertent. The omissions are labelled "deliberate" because the
authors in these situations were aware of the absence of notice
at the time their work was first published and they never
intended to affix notice in the first place. See Note, Omission
of Notice, 60 N.Y. U. L. Rev. at 959-60, 968-71; see, e.g.,
Sparkle Toys, 780 F.2d at 191, 195-96; O'Neill, 524 F. Supp. at
712, 715; Innovative Concepts in Entertainment, Inc. v.
Entertainment Enters. Ltd., 576 F. Supp. 457, 460 (E.D.N.Y.
1983).
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an omission that has been deliberate." Beacon Looms, 552 F.
Supp. at 1310.
The O'Neill court argued that the Nimmer formulation
clearly conflicted with the legislative intent behind 405(a).
O'Neill, 524 F. Supp. at 714. Nimmer's rule essentially removes
any chance for those who deliberately and intentionally omit
copyright notice to successfully cure under the "reasonable
effort" requirement of 405(a)(2).5 See Nimmer 7.13[B][3],
at 7-125. Yet, when Congress amended the Copyright Law in 1976,
it expressed a clear intention to eliminate the previous
distinction, made since 1909, between purposeful or deliberate
omissions, which were subject to automatic forfeiture of
copyright protection, and unintentional omissions, which were
curable, so that all omissions could be cured by reasonable
efforts. See Sparkle Toys, 780 F.2d at 195-96; O'Neill, 524 F.
Supp. at 714; Note, Omission of Notice, 60 N.Y. U. L. Rev. at
963-75. According to the O'Neill court, the word "discover" must
be read in light of the Congressional intent to make all
omissions curable. O'Neill, 524 F. Supp. at 714.
In response, Nimmer argues that Congressional intent
must give way to the plain meaning of the statutory text of
5 This is because Nimmer's rule immediately triggers the
requirement to add notice, see 405(a)(2) (requiring cure
efforts once the omission is "discovered"), which the copyright
author will presumably fail to do within a "reasonable" time.
Authors will presumably fail to cure within a reasonable time
because they have just distributed copies without notice to begin
with and it is unlikely they would suddenly attach notice when
they could have done so in the first place.
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405(a)(2), which, in Nimmer's view, compels the conclusion that
discovery is immediate for deliberate omissions. Nimmer
7.13[B][3], at 7-125.
We think that the proper interpretation of 405(a)(2)
must lie somewhere between the rule described in Nimmer and the
rule announced in O'Neill. On the one hand, Congress intended a
copyright holder to be able to cure all omissions, if the holder
made "reasonable efforts" to add notice. See H.R. Rep. No. 1476,
94th Cong., 2d Sess. 147, reprinted in 1976 U.S.C.C.A.N. 5659,
5673; see also Sparkle Toys, 780 F.2d at 195-96. Furthermore,
the language in 405(a)(2) concerning the addition of notice to
all copies "after the omission has been discovered," 17 U.S.C.
405(a)(2), does not expressly preclude a finding that a given
deliberate omission was discovered after the initial publication
of a work. Sparkle Toys, 780 F.2d at 196. Thus, the plain
language of the statute does not conflict with its legislative
intent.
Although Nimmer makes a compelling argument that one
already knows, and thus cannot "discover," an omission that was
made deliberately, this argument is only compelling if we limit
the definition of "deliberate omission" to mean a purposeful
decision to forgo copyright protection that would otherwise be
available if notice were affixed to a creative work. But see
Sparkle Toys, 780 F.2d at 196 (noting that an assignee or
licensee of the author or a company employee at a higher level of
the corporate hierarchy than the deliberate omitter could
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subsequently discover a deliberate omission, in which case the
nature of the deliberate omission would be altogether irrelevant
to the plausibility of a subsequent discovery, and Nimmer's
argument would not be compelling under any definition of
"deliberate omission"). Most courts, and Nimmer himself,
however, have not so confined their definition of a deliberate
omission. See cases cited supra note [4]; Nimmer 7.13[B][3],
at 7-125 n.78. For example, "mistake of law" omitters and
"thoughtless" omitters are usually considered deliberate omitters
because they are aware of the absence of any notice at the time
their work was first published and they had no intention of
affixing notice at that time. See supra note [4]. Under a
common sense reading of 405(a)(2), these omitters could
subsequently "discover" their omissions of copyright notice when
they are later apprised of the legal significance of their
failure to provide notice. See M. Kramer Mfg. Co., Inc. v.
Andrews, 783 F.2d 421, 443 & n.21 (4th Cir. 1986); Sparkle Toys,
780 F.2d at 191; Shapiro, 764 F.2d at 73 n.5; Valve & Primer
Corp. v. Val-Matic Valve & Mfg. Corp., 730 F. Supp. 141, 143
(N.D. Ill. 1990); Innovative Concepts, 576 F. Supp. at 460; see
also Note, Omission of Notice, 60 N.Y. U. L. Rev. at 981 (stating
that "an individual with no knowledge whatsoever of the copyright
law could . . . "discover" its relevance and so "discover" that
the blank spot was indeed an omission"). We therefore conclude
that deliberate omissions are potentially curable and can be
discovered after the first copy of a work is published.
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On the other hand, the O'Neill rule, stating that
discovery only occurs when a controversy arises over the
existence and enforceability of a copyright, simply has no basis
in the language of 405(a)(2) and we must reject it. As Nimmer
correctly points out, the language of 405(a)(2) plainly
indicates that "[i]t is the discovery of 'the omission' of
notice, not the discovery of the fact that the copyright may be
challenged, which triggers the 'reasonable effort' requirement."
Nimmer 7.13[B][3], at 7-127. There are plenty of circumstances
in which "discovery" occurs prior to a copyright dispute, such as
when counsel advises the author that he or she must provide
copyright notice to obtain copyright protection or that the
current notice is inadequate to satisfy the notice requirements.
See, e.g., M. Kramer, 783 F.2d at 443 & n.21; Sparkle Toys, 780
F.2d at 191; Shapiro & Son, 764 F.2d at 73 n.5; Val-Matic, 730 F.
Supp. at 143; Videotronics, Inc. v. Bend Electronics, 586 F.
Supp. 478, 480, 483 (D. Nev. 1984); Innovative Concepts, 576 F.
Supp. at 460. Indeed, the fact that many of these cited cases
also found that discovery occurred after a deliberate omission
was originally made at the time of first publication indicates
that the middle-ground test for determining the point of
discovery is the preferred one in practice.
In the present case, the district court concluded that
Garnier "should have known of the omission" when the Swirled Hoop
Earring was first published in April of 1988, and thus placed
Garnier's discovery of omission at the date of first publication
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or soon thereafter. The court based its decision primarily on a
finding that, at the time the Swirled Hoop Earring was offered
for sale to the public in April of 1988, Garnier "had a policy of
screening its newly created pieces to determine which would or
would not be copyrighted, deferring action to first determine
marketability." The court added that despite periodic reviews of
various copyrights held by the company, Garnier waited four and
one-half years before registering its copyright in the Swirled
Hoop Earring and attaching notice, essentially waiting to see if
the Swirled Hoop Earring would become a best-selling item before
taking any action.
It must first be noted that the district court did not
hold that Garnier's omission was deliberate and thus, via the
Nimmer rule, automatically discovered upon the date of first
publication. Rather, the court found that the facts of the case
indicated that Garnier, "an international corporation, ultimately
sophisticated in the need for copyrighting," should have known
the legal consequences of its omission of copyright notice and
thus purposefully and intentionally refused to seek out the
protections of the copyright laws. Disregarding for a moment the
district court's factual findings, we hold that the court did not
err legally in this determination.
When an author makes a deliberate decision to forgo
potential copyright protection of a work by failing to affix
notice on copies, with the knowledge that copyright notice is
normally required, that author becomes aware of the legal effect
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of its omission of notice and thus has discovered the omission
for purposes of 405(a)(2). Discovery can occur upon the date
of first publication if the author has this state of mind when
the first copies are distributed. Finding that conscious
decisions to forgo the expense of complying with the requirements
for a copyright can result in an immediate discovery of the
omission of notice under 405(a)(2) does no injustice to the
legislative intent to provide notice of all omissions. No cure
can be considered "reasonable" in cases where the author simply
sits back and waits to see whether his or her work will be a
best-seller, before suddenly springing into action and deciding
to claim copyright protection after a competitor invests
significant time and resources in developing a competing product.
The district court's use of the phrase "should have
known," implying an objective standard of discovery or some
concept of constructive notice, though misleading, is not
erroneous on the facts of this case. Other courts have used the
phrase "should have known" to indicate that the circumstantial
evidence points so strongly toward the author's knowledge of
copyright omission that, if in fact the author did not know of
the omission, it would be fair to say that a party in the
author's position clearly "should have known" that notice was
both required and missing from copies of his or her creative
work. Donald Frederick Evans & Assocs., 785 F.2d at 911; Val-
Matic, 730 F. Supp. at 143. We think that a circumscribed use of
this constructive notice concept is acceptable as long as courts
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are careful not to extend it further than the facts warrant. For
example, it would not be acceptable to find that an author
discovers an omission of notice upon the date of first
publication merely because the author is a large and
sophisticated company with several lawyers on staff. The facts
found by the district court, namely that Garnier had a regular
process for screening new pieces for potential copyright
protection and a separate process for review of past copyrights,
are strong enough to support a finding that Garnier should have
known it omitted a required copyright notice.
The court's factual findings, however, are not
supported by the record, at least for purposes of summary
judgment. Because the district court granted summary judgment in
favor of Andin, we must review its decision de novo, to determine
whether the record, viewed in the light most favorable to Garnier
and with all reasonable inferences drawn in Garnier's favor,
presents any genuine issues of material fact and whether Andin is
entitled to judgment as a matter of law. Serrano-P rez v. FMC
Corp., 985 F.2d 625, 626 (1st Cir. 1993); Pagano v. Frank, 983
F.2d 343, 347 (1st Cir. 1993). Summary judgment may not be
granted if the evidence is such that a reasonable jury could
return a verdict for Garnier. Serrano-P rez, 985 F.2d at 626;
Pagano, 983 F.2d at 347.
Our review of the record in this case reveals that
critical factual issues are disputed or unproven. In particular,
it is disputed whether, at the time that the Swirled Hoop Earring
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was first published in April of 1988, Garnier had a process for
screening jewelry pieces for potential copyright protection,
whether Garnier had a review process for existing copyrights, and
whether Garnier even held any United States copyrights or knew
anything about copyright requirements in the United States.
Garnier's export manager, Christian Victor, stated in a detailed
affidavit that when the Swirled Hoop Earring was introduced in
April of 1988, Garnier had no experience or expertise with United
States copyright laws, had never applied for registration of a
copyright in the United States, and had no internal procedures
for determining copyrightability, copyright notice requirements,
or other aspects of copyright protection for new or existing
jewelry works under United States law.
According to the record, the first United States
copyright obtained by Garnier was in October of 1988, six months
after the Swirled Hoop Earring was first published. Although
Garnier held copyrights in approximately 25 to 30 product designs
out of the 500 products in its line, there is no evidence Garnier
held any United States copyrights prior to October of 1988. The
only evidence regarding copyright screening procedures or review
processes is some rather equivocal deposition testimony from
Garnier's Vice President of United States Operations, Vincent
Ferrante. It is not clear from Ferrante's testimony how thorough
and comprehensive the alleged "screening" and "review" processes
really were, such that they would be likely to include a
consideration of copyright protection for a jewelry piece like
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the Swirled Hoop Earring. Ferrante did testify that Garnier
makes a special effort to protect copyrights in its "signature
pieces" and that the Swirled Hoop Earring was considered one such
piece. Ferrante never explained, however, what those "special
efforts" were, whether those efforts were in effect in 1988, or,
if they were, whether they actually applied to the Swirled Hoop
Earring. Victor stated in his affidavit that the Swirled Hoop
Earring never went through any review or screening process.
More importantly, Ferrante stated that he was "not
sure" when Garnier started its copyright screening and review
processes. Ferrante began working at Garnier in the fall of 1990
and he testified that when he arrived, Garnier had a "standard
policy" to obtain copyrights on their designs. The only evidence
that some type of copyright screening or review policy was in
place at Garnier when the Swirled Hoop Earring was first
published is Ferrante's answer to the following question by
Andin's counsel: "Does the [standard] policy go back to at least
1985?" to which Ferrante responded: "I believe it did."
We conclude that this evidence is insufficient to
support the court's finding, on summary judgment, that Garnier
discovered its omission of copyright at the time it first
published the Swirled Hoop Earring.
There also exists a genuine issue of fact as to whether
Garnier discovered its omission of copyright at some point
between April of 1988, when the Swirled Hoop Earring was first
published, and July of 1992, when Garnier registered the Swirled
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Hoop Earring design. Although some sort of copyright review and
screening process was in place at Garnier during this time, the
exact nature and extent of the process is not clear from
Ferrante's testimony. Ferrante never testified that any of the
company's screening or review procedures were applied
retroactively to jewelry pieces developed prior to the initial
institution of those procedures. Furthermore, Victor stated in
his affidavit that the first review process for United States
copyrights was begun sometime in 1990 and that it did not
function retroactively to include pieces like the Swirled Hoop
Earring. Victor also stated that up until November of 1990, the
company only sought copyright protection for animal designs, and
not for designs like the Swirled Hoop Earring. While a
reasonable factfinder could infer that Garnier's copyright review
process led to a "discovery," sometime prior to July of 1992, of
the fact that all non-noticed pieces in its line of jewelry,
including the Swirled Hoop Earring, were subject to forfeiture of
United States copyright protection unless notice was attached to
all copies of those works,6 such an inference is not compelled
by the evidence. On the contrary, the summary judgment standard
requires that we indulge all reasonable inferences in favor of
Garnier, Serrano-P rez, 985 F.2d at 626, and it is reasonable to
infer that Garnier did not consider the absence of notice, and
6 In other words, Garnier would have, or should have, become
aware of the consequences of omission, transforming its
thoughtless omission into a purposeful decision to forgo
copyright notice, and thus discovering its omission.
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the legal significance of such absence, until it found out Andin
had copied the design in July of 1992.
In sum, because a genuine factual dispute exists as to
whether Garnier's discovery occurred prior to July of 1992, when
Garnier claims discovery occurred, summary judgment cannot be
granted on the basis that Garnier discovered the omission before
July of 1992. Despite this finding, however, we may still uphold
the district court's judgment if we find that, as a matter of
law, Garnier was still required to cure the lack of notice on
certain copies of the Swirled Hoop Earring and subsequently
failed to make reasonable efforts to effect such a cure. See
Medina-Mu oz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 7 (1st
Cir. 1990) (stating that in reviewing summary judgment orders, as
in other contexts, we are free to affirm the district court on
any independently sufficient ground supported by the record).
Accordingly, we proceed on the assumption that Garnier discovered
its omission in July of 1992 and address whether Garnier
nevertheless forfeited its copyright because of a failure to
satisfy the cure requirements provided in 405(a)(2).
2. To Which Copies, If Any, Must Notice Be Attached To
Effect A Cure?
As stated earlier, the reasonable effort requirement in
the cure provision applies to all copies that are "distributed to
the public in the United States after the omission has been
discovered." 17 U.S.C. 401(a)(2). Thus, Garnier need not
affix notice to copies of its Swirled Hoop Earring already
distributed to the public before July of 1992, the date at which
-22-
we assume Garnier discovered its omission of notice. See Forry,
Inc. v. Neundorfer, Inc., 837 F.2d 259, 265 (6th Cir. 1988);
Nimmer 7.13[B], at 7-122.
Garnier began affixing notice to all copies of the
Swirled Hoop Earring it distributed after the discovery date,
July of 1992, and, furthermore, disposed of all copies of the
Swirled Hoop Earring without notice in its inventories at that
time.
The only remaining copies that are potentially subject
to the cure requirements, therefore, are those earrings
manufactured before July of 1992 and sent to Garnier's customers,
but not yet sold to the public, by July of 1992. At issue then
are only those copies of the Swirled Hoop Earring without notice
that remained in the retail inventories of Garnier's retail
customers as of July, 1992.
Normally, a copyright owner has an obligation under
405(a)(2) to add copyright notice to copies distributed to
retail dealers but not yet sold to the public. Lifshitz v.
Walter Drake & Sons, Inc., 806 F.2d 1426, 1434 (9th Cir. 1986);
M. Kramer, 783 F.2d at 444; Shapiro & Son, 764 F.2d at 74.
Garnier argues, however, that it need not take any efforts to
cure the absence of notice on these copies because they had not
been distributed to the public before the effective date of the
Bern Convention amendments to the copyright statute (that is, the
BCIA). As stated earlier, the BCIA eliminated the notice
requirement for copyright protection as of March 1, 1989, but
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retained the cure provision in 405(a) for copies distributed
before that date. Garnier argues that the proper interpretation
of the BCIA and the new 405(a) is that the notice requirement
is eliminated for all copies distributed after March 1, 1989,
even if other copies of the same work were distributed without
notice before March of 1989.7 Andin argues, and the district
court held, that once copies in a work are distributed without
notice before March 1, 1989, the obligation to cure retained in
405(a) attaches to all copies in the work, including those
published after the BCIA took effect.
The language of 405(a) is critical to resolving this
issue, and, not surprisingly, the language is ambiguous. The
statute states in relevant part:
With respect to copies and phonorecords
publicly distributed [before March 1,
1989], the omission of copyright notice
. . . does not invalidate the copyright
in a work if . . . (2) . . . reasonable
effort is made to add notice to all
copies or phonorecords that are
distributed to the public in the United
States after the omission has been
discovered.
Garnier correctly points out that the statute could reasonably be
interpreted as stating: "With respect to only those copies
published before 1989, a reasonable effort to add notice is still
7 Garnier recognizes that if it was deemed to have discovered
the omission of notice in April of 1988 and then failed to cure
in a reasonable time thereafter, it would have forfeited its
copyright in the Swirled Hoop Earring and the design would pass
into the public domain, regardless of the provisions in the BCIA
amendments. Thus, Garnier is not asserting that the BCIA can be
read to resurrect a right that did not exist prior to the date
that it went into effect.
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required, but with respect to copies published after March 1989,
notice is not required." Garnier reasons that if Congress wanted
to adopt Andin's interpretation, it would have written the
statute to read: "With respect to works" first published before
March 1989, instead of "With respect to copies" first published
before March 1989.8
Andin's interpretation, however, is a more convincing
construction of 405(a). Plainly read, the statute provides
that the omission of copyright notice on copies distributed
before March 1, 1989, does not result in forfeiture of copyright
"in a work" if the proper cure is made pursuant to 405(a)(1),
(3), or, in this case, 405(a)(2). Under 405(a)(2), the
author must make a reasonable effort "to add notice to all
copies" that "are distributed to the public" after the omission
has been discovered. This language indicates that all copies
that "are" presently distributed, of a work for which unnoticed
8 There is no merit to Garnier's claim that Congress initially
considered making the amended version of 405(a) applicable to
"works first published" before March 1, 1989, but later rejected
such language in favor of "copies first published" before March
1, 1989. To the contrary, the House Report cited by Garnier for
its argument indicates that Congress always intended the current
language in 405(a) to apply the cure requirements to all
copies, including those distributed after March 1989, of a work
first published before March 1989. See H.R. 100-609, reprinted
at 6 Nimmer on Copyright App. 32, at 32-1 through 32-45. The
bill accompanying the House Report amended 405(a) in exactly
the same fashion that 405(a) was eventually amended. See 6
Nimmer App. 32, at 32-5 (presenting text of bill which contained
the exact amendment eventually adopted for 405(a), at Sec.
9(e)(2) of the bill). The report itself then states that
"[c]urrent notice requirements are unchanged for works first
published before the effective date of the Act." Id. at 32-45
(emphasis added). The report thus interpreted the present
language in the same way that the district court interpreted it.
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copies were published at a time when notice was required, must be
cured, regardless of when those copies are distributed. Congress
said "all" copies, and did not limit the cure requirements to
works that "were distributed prior to the effective date of the
BCIA." See Encore Shoe Corp., 18 U.S.P.Q. 2d 1874, at n.9 (D.
Mass. 1991) ("[I]f the pre-BCIA publications bear defective
notice, then 'a reasonable effort' must be made to add notice to
all copies after the defective notice has been discovered, even
if discovery occurs after March 1, 1989."); accord Nimmer
7.13[B][2], at 7-120 n.54.
Garnier argues that "all copies" merely refers to all
copies within the subset of copies distributed prior to March 1,
1989. Garnier grounds this assertion in the language of the
introductory sentence of 405(a), which states: "With respect to
copies and phonorecords publicly distributed [before the
effective date of the BCIA] . . . ." According to Garnier, this
introductory phrase defines the set of copies to which the rest
of 405(a), including the cure requirements in 405(a)(2),
applies. Though plausible, this construction strains the
language of the statute. Further, in view of the fact that
Congress, in enacting the BCIA, had made changes to 405(a) so
as to limit its applicability only to those instances where the
omission of notice had first occurred prior to March 1, 1989, the
failure to limit the remedial cure provision to just those copies
cannot be said to have been an oversight. See St. Martin
Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 786-88
-26-
(1981) (Congress in amending one section of a statute is not
presumed to have intended an amendment to another section of the
statute which had not been altered).
Contrary to Garnier's assertion, the legislative
history for 405(a) is indeterminate as to the present issue
because it essentially parrots the language employed in the text
of the statute itself. See S. Rep. No. 100-352 at 45, reprinted
in 1988 U.S.C.C.A.N. 3706, 3742. The House Report attached to a
preliminary version of the BCIA bill actually contradicts
Garnier's interpretation of the statute. See supra note [8].
While Congress speaks of limiting the "applicability" of the
notice provisions in the copyright statute to copies distributed
before March 1, 1989, see S. Rep. No. 100-352 at 45, reprinted in
1988 U.S.C.C.A.N. 3706, 3742, nowhere does Congress state an
intention to alter the then-existing pre-BCIA cure requirements
set out in 405(a)(2), which mandate that an author add notice
to "all copies" of a work.
Garnier further argues that Andin's interpretation of
the BCIA-amended 405(a) conflicts with the overall purpose of
the BCIA which was to bring United States copyright law in line
with the Berne Convention by eliminating the requirement that
notice of copyright be affixed to copies of a work. We disagree.
First of all, the BCIA applies prospectively, as evidenced by the
retention of 405(a). Thus, applying forfeiture rules for lack
of notice to works first published before the BCIA went into
effect does not conflict with the general goals of the Act.
-27-
Furthermore, Congress adopted a "minimalist approach" in the
BCIA, amending the Copyright Act "only insofar as it is necessary
to resolve the conflict [between U.S. law and the Berne
Convention] in a manner compatible with the public interest,
respecting the pre-existing balance of rights and limitations in
the Copyright Act as a whole." H.R. 100-609, reprinted at 6
Nimmer on Copyright, App. 32, at 32-20. Congress did not intend
to adopt the Berne Convention wholesale; the amended statute
itself makes it clear that the United States Copyright Act, and
not the Berne Convention, controls disputes arising under the
copyright laws. 17 U.S.C. 104(c) ("No right or interest in a
work eligible for protection under this title may be claimed by
virtue of, or in reliance upon, the provisions of the Berne
Convention, or the adherence of the United States thereto"); see
also S.Rep. 100-352, at p. 41, reprinted in 1988 U.S.C.C.A.N.
3706, at 3738 (cautioning courts "to resolve issues of the
existence, scope, or application of rights in works subject to
copyright through the normal processes of statutory
interpretation and the application of common law precedents, as
appropriate, rather than by reference to the provisions of Berne
or the fact of U.S. adherence to the Convention.").
For the foregoing reasons, therefore, we hold that
405(a) imposes a cure requirement for all copies of any work
which was first published prior to the effective date of the
BCIA. In this case, the cure requirement applies to all copies
of Garnier's Swirled Hoop Earring remaining in retail inventories
-28-
as of July of 1992.
B. Was Garnier's Cure Adequate?
Having determined that Garnier must make reasonable
efforts to add notice to copies in Garnier's customers' retail
inventories as of July 1992, we must determine whether Garnier's
actual cure efforts were reasonable, as a matter of law, for
purposes of Andin's summary judgment motion. The district court
based its finding that Garnier's cure efforts were not reasonable
at least in part on the assumption that Garnier discovered its
omission in April of 1988 and then waited over four years before
adding notice to its Swirled Hoop Earrings. Although we found
this assumption erroneous for summary judgment purposes, the
court's decision can nevertheless be upheld on the alternative
finding that Garnier's cure efforts were insufficient as a matter
of law even under the assumption that Garnier was only required
to add notice to copies of the Swirled Hoop Earring in retail
inventories as of July 1992, and thus did not delay its cure
efforts. Medina-Mu oz, 896 F.2d at 7; Chamberlin v. 101 Realty,
Inc., 915 F.2d 777, 783 n.8 (1st Cir. 1990) (in reviewing of
summary judgment orders, we are free to affirm the district court
on any independently sufficient ground supported by the record.)
As an initial matter, Garnier argues that there were
few, if any, copies of the Swirled Hoop Earring in retail
inventories as of July 1992, and, therefore, it was not required
to take any effort to add notice to retail inventory copies to
satisfy the "reasonable effort" requirement in 405(a)(2).
-29-
Garnier points to testimony in the record to the effect that
inventories were normally depleted in the summer months because
it was the low point in the business cycle when new orders are
normally made for fall delivery. There is no dispute, however,
that at least one Swirled Hoop Earring without notice, the one
bought by Andin, was in one retailer's inventories as late as
September of 1992. More importantly, Garnier does not dispute
that it did not know whether any of its retailers had copies of
the Swirled Hoop Earring remaining in stock in July of 1992, and,
in fact, Garnier sent a letter to its fifty largest retailers
regarding the Swirled Hoop Earring on the assumption that if any
retailers had remaining inventory, it would be the larger ones.
Because the reasonable effort requirement in
405(a)(2) applies to "all" copies distributed to the public after
discovery of omission, 17 U.S.C. 405(a)(2), Garnier's
obligation to cure is triggered once Garnier has reason to
believe any of its retail customers have any Swirled Hoop
Earrings in their inventories, even if only a few items. See
generally Lifshitz, 806 F.2d at 1434 (holding that a copyright
owner has an obligation to add copyright notice to copies
distributed to retail dealers); M. Kramer, 783 F.2d at 444(same); Shapiro & Son, 764 F.2d at 74 (same). At the very least,
Garnier is obligated to take some effort to find out if its
retailers have any earrings in stock. Garnier, however, did not
do this. We find, therefore, that because there is no dispute
that (1) at least one unnoticed Swirled Hoop Earring was in
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retail inventories; (2) Garnier suspected that its largest
customers had at least a few Swirled Hoop Earrings in their
inventories; and (3) Garnier made no effort to find out for sure
whether any of its customers still held copies of its Swirled
Hoop Earring, no genuine issue of material fact exists as to
whether Garnier was obligated to take "reasonable efforts" to add
notice to copies in retail inventories. Consequently, summary
judgment in favor of Andin is not precluded on the basis that the
lack of evidence of significant amounts of inventory excuses
Garnier from taking efforts to cure potential Swirled Hoop
Earrings in retail inventories.
As we discuss below, other factors may alleviate the
need to add notice to retail inventories if, for example, such
factors make the effort required to add notice unduly burdensome
or futile. See, e.g., Shapiro & Son, 764 F.2d at 74-75. In such
circumstances, summary judgment may not be appropriate, even
though the author made no effort to add notice to inventories,
because it was reasonable not to cure those copies under the
circumstances. The mere justification that the author thought
its retail inventories would be low during the summer months,
however, does not constitute such a factor and does not excuse
the requirement to effect a cure. Garnier was therefore required
to add notice to copies of the Swirled Hoop Earring in the retail
inventories of its customers.
We are finally prepared to address the issue of whether
Garnier's cure efforts were insufficient and thus unreasonable as
-31-
a matter of law. Efforts to cure under 405(a)(2) must consist
of steps designed to "add notice to all copies" distributed after
omission of notice is discovered. 17 U.S.C. 405(a)(2).
Pursuant to 17 U.S.C. 401(c), copyright notice must be
"affixed" to each copy for which protection is desired. Failure
to "affix" a notice to the copy renders that notice legally
deficient and defective. Shapiro & Son, 764 F.2d at 72. The
legal consequences of a deficient notice are the same as those
for an omitted notice. Id. at 72 n.3; see also Lifshitz, 806
F.2d at 1432, 1434 (a defective notice constitutes no notice as a
matter of law). Accordingly, to cure an omission, the author
must add legally proper notice to all copies. To satisfy
405(a)(2), therefore, the author must take "reasonable efforts"
to add legally proper notice.
Garnier submits that it undertook two different efforts
to add copyright notice to copies of its Swirled Hoop Earring in
retail inventories: (1) it sent a letter to its fifty largest
retail customers stating that it held a copyright in the Swirled
Hoop Earring; and (2) it provided a story card to its retail
customers to accompany the sale of all its jewelry pieces.
Neither measure constitutes a legally cognizable effort,
reasonable or otherwise, to add notice to its Swirled Hoop
Earrings. The letter was altogether inadequate because it did
not "add notice" in any way to copies of the Swirled Hoop
Earring. Not only was the letter not affixed to any of the
Swirled Hoop Earrings, but it also failed to say anything about
-32-
Garnier's failure to attach copyright notice to the earring.
Furthermore, the letter did not inform retailers of the need to
attach some type of notice to the Swirled Hoop Earring or even to
tell consumers about Garnier's copyright. See, e.g., Long v. CMD
Foods, Inc., 659 F. Supp. 166, 169 (E.D. Ark. 1987). Thus, the
letter does not qualify as a legally cognizable effort to "add
notice," let alone a reasonable one.
Garnier's story cards, which stated that every Garnier
design is a "genuine copyrighted original," were also not
"affixed" to the Swirled Hoop Earring and thus constituted an
inadequate effort to add notice. Lifshitz, 806 F.2d at 1434(finding that author's cure effort, consisting of the addition of
a defective notice, was not sufficient to represent a reasonable
effort to add notice). Moreover, the story cards were not part
of Garnier's reasonable efforts to add notice to copies of its
Swirled Hoop Earring "after the omission ha[d] been discovered"
pursuant to 405(a)(2). Rather, the cards were instituted by
Garnier two years earlier, beginning in 1990, and were provided
for all of Garnier's jewelry pieces. As such, the cards were
merely a form of inadequate notice existing at the time Garnier
discovered the omission of notice on its Swirled Hoop Earring and
not part of any effort to add notice after the omission was
discovered. Therefore, the story cards constituted something
that needed tobe cured, not a part ofthe cure efforts themselves.
We do not dispute that some inadequate cure efforts,
such as the provision of notice which is not affixed to the
-33-
copies, can still be relevant to, though not alone sufficient to
establish, the reasonableness of an author's overall cure efforts
if such efforts contribute in some way to providing actual notice
to the public of a claim of copyright. Shapiro & Son, 764 F.2d
at 74-75. In this respect, measures like Garnier's story cards,
but not Garnier's letter, could potentially enter the
reasonableness calculus under 405(a)(2) to create, in
combination with some other efforts, a material issue of fact on
the question of whether reasonable cure efforts were taken. In
this case, however, the story cards were distributed prior to the
discovery of the omission of notice and thus do not constitute a
"reasonable effort" to "add notice" to copies pursuant to the
cure requirements in 405(a)(2). Therefore, Garnier's story
cards are not cognizable as an effort to cure omission of notice.
To the extent Shapiro & Son adopts a contrary rule on this issue,
id. at 74-75, we respectfully part company with the Second
Circuit. In summary, then, we find that Garnier undertook no
legally cognizable efforts under 405(a)(2) to add notice to
retail inventories of its Swirled Hoop Earring.
Garnier maintains that even if the steps taken with
respect to retail inventories are inadequate, by themselves, to
constitute a reasonable effort to add notice, when such steps are
combined with Garnier's efforts to add complete and adequate
notice to all new Swirled Hoop Earrings produced after discovery
of omission in July of 1992, and to all Swirled Hoop Earrings
held by Garnier at that time, the totality of the efforts are
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together sufficient to create a material issue of fact as to
whether Garnier took reasonable efforts to cure. See Shapiro &
Son, 746 F.2d at 75. We do not agree. Section 405(a)(2)
requires reasonable efforts to add notice to "all" copies. 17
U.S.C. 405(a)(2). Where an author makes no legally cognizable
effort to add notice to an identifiable group of copies which
lack notice, and there are no significant obstacles hindering the
author from adding notice to such copies, that author cannot be
said to have taken reasonable efforts to cure as a matter of law.
In the event that adding notice to retail inventories would have
been burdensome, unduly costly, unavailing, futile or otherwise
unreasonable, a prospective cure -- that is adding notice only to
new copies thereafter produced and distributed -- by itself can
be sufficient to constitute reasonable efforts to cure. See
Shapiro & Son, 746 F.2d at 74-75 (noting that there was a
material issue of fact as to whether the author's efforts to add
notice to items in retail inventories would have been burdensome
or unavailing). That, however, is not the case here. Unlike the
author in Shapiro & Son, Garnier does not assert that an effort
to add notice to retail inventories of the Swirled Hoop Earring
would be unavailing, overly costly or burdensome. Garnier could
have easily provided retailers with gummed labels or hang tags
for the Swirled Hoop Earrings without much cost or effort. In
this situation, adding notice to only newly produced copies and
copies in Garnier's own possession is insufficient, as a matter
of law, to constitute reasonable efforts under 405(a)(2). See,
-35-
e.g., Val-Matic, 730 F. Supp. at 144 (finding cure efforts
insufficient where author made no effort to correct copies still
in the hands of distributors where such efforts would have
imposed "little, if any, burden," despite provision of notice on
new copies); see also Videotronics, Inc., 586 F. Supp. at 480,
483. We accordingly affirm the district court's grant of summary
judgment on the ground that Garnier failed to take reasonable
efforts to cure the omission of copyright notice for its Swirled
Hoop Earring.
Affirmed, with costs to be paid by appellant.
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