Epic Metals Corp. v. Souliere , 181 F.3d 1280 ( 1999 )

PUBLISH
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
07/22/99
No. 98-2387
THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 92-744-Civ-T-17C
EPIC METALS CORP., a Pennsylvania Corporation,
Plaintiff-Counter-Defendant-Appellee,
versus
FRANK SOULIERE, SR.;
CONDEC, INC., a Florida corporation,
Defendants-Counter-Claimants-Appellants.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(July 22, 1999)
Before ANDERSON, Chief Judge, BLACK, Circuit Judge, and STAFFORD*, Senior
District Judge.
BLACK, Circuit Judge:
*
Honorable William Stafford, Senior U.S. District Judge for the Northern District of Florida,
sitting by designation.
Appellants Condec, Inc. and Condec President Frank Souliere (collectively
Condec) appeal the trial court’s modification of a permanent injunction after this
Court’s mandate set aside a portion of the original injunction. Appellants claim the
trial court abused its discretion by granting Appellee’s motion for modification and
argue that even if the court had the discretion to modify, the ordered modification was
overbroad. We conclude the trial court had the discretion to modify the injunction and
did not abuse that discretion, and therefore affirm.
I. PROCEDURAL BACKGROUND
Appellee Epic Metals Corp. (Epic) sued Condec in June 1992, alleging that
Condec’s CONDEC steel decking product was a Lanham Act trade dress infringement
of Epic’s EPICORE steel decking product and that Condec had infringed Epic’s
Copyright in EPICORE catalogs and promotional materials. After a bench trial, the
trial court found in Epic’s favor, ruling that Condec had infringed Epic’s copyrighted
catalog and trade dress.2 The court awarded statutory damages for the copyright
claims, as well as several thousand dollars in damages for the trade dress infringement
claim, reserving jurisdiction over injunctive relief. On June 9, 1995, the trial judge
signed a two-paragraph final order of permanent injunctive relief, forbidding Condec
from reproducing or copying Epic’s catalog materials and from “[m]anufacturing,
2
The parties agreed to proceed before a magistrate pursuant to 28 U.S.C. § 636(c).
2
distributing, selling, or offering for sale any composite steel floor deck utilizing the
dovetail rib profile of the plaintiff, EPIC METALS CORPORATION . . . or any other
dovetail rib profile.”
A three-judge panel of this Court upheld the finding of copyright violation
without discussion, but reversed the trade dress infringement finding. Epic Metals
Corp. v. Souliere, 99 F.3d 1034, 1042 (11th Cir. 1996) (Epic Metals I).3 On remand
from this Court, the trial court struck the paragraph of the injunction that forbade
Condec from manufacturing steel decking with a dovetail rib profile, freeing Condec
to resume the manufacture and sale of its CONDEC product. The paragraph of the
injunction forbidding future copyright violations remained in effect.
Shortly thereafter, Epic filed a “Motion to Modify Permanent Injunction in
Light of Appellate Court Mandate.” In that motion, Epic sought to prevent Condec
from holding out to the public that CONDEC has a Underwriter’s Laboratory (UL)
fire rating until the product’s fire resistance is independently tested. Among the trial
court’s original findings on the copyright infringement issue, the court determined that
Condec infringed Epic’s copyright in its EPICORE Concept 1 catalog and EPICORE
Concept 2 catalog when Condec copied the section properties and load tables from the
3
The Court’s 1996 opinion presents a complete explanation of the technical aspects of the
dovetail joint design of both parties’ steel decking products, which we need not repeat here. See
Epic Metals I, 99 F.3d at 1035-37.
3
EPICORE catalogs and submitted them to UL as the section properties and load tables
of its own product.4 UL approved certification for CONDEC without requiring fire
resistance testing based on the conclusion that the load tables for CONDEC matched
the already-approved load tables of EPICORE. The trial court found Condec’s use of
the copyrighted materials enabled it to avoid the cost of fire testing, which could have
been as high as $70,000 to $80,000. The trial court also found UL certification is
essential because most building codes, especially for commercial properties or
multi-unit residential complexes, require steel decking products be UL-certified.
Because the injunction as modified by this Court’s mandate allowed Condec
to resume manufacture of its product, Epic’s motion asked the court to prevent
Condec from “benefit[ing] from the fruits of their willful copyright infringement” by
enjoining Condec from representing to others that its product has a UL fire rating
until CONDEC is independently tested. Treating the motion as a Rule 60(b)(6)
motion for post-judgment relief, the trial court first determined that it had jurisdiction
to modify the permanent injunction, noting “although this court is bound to follow the
express and implied holdings of the appellate court, it is on remand ‘free to address,
4
Section properties tell engineers the amount of deflection or sag and the stress or failure
point of the steel decking product; calculating section properties is a rather complex engineering
task. Load tables are created from performance tests in the field and are used to quantify the load-
bearing capabilities of steel decking material. Section properties and load tables provide engineers
and architects with critical information relied upon in the design and building process.
4
as a matter of first impression, those issues not disposed of on appeal,’” (citing
Piambino v. Bailey, 757 F.2d 1112, 1119 (11th Cir. 1985) and others). The trial court
concluded that “[i]f defendants are permitted to use the UL rating they obtained
through infringement, the original purpose of the injunction would not be fulfilled,”
and granted the relief requested.5
II. DISCUSSION
Condec appeals, asserting that the court abused its discretion in modifying the
injunction because Epic did not make an appropriate showing to justify modification
and this Court’s mandate precludes modification. Alternatively, Condec argues the
language of the newly-modified injunction is beyond the scope of the remedies
provided for by copyright law.
A. Authority to Modify
Upon appellate review, “[m]otions for relief from a final judgment are
addressed to the sound discretion of the district court, guided of course by accepted
5
In its entirety, the new paragraph in the injunction reads:
Defendant[s] . . . are hereby permanently enjoined from:
Advertising, representing or holding out to the public that Defendants possess an
Underwriter’s Laboratory fire rating . . . unless and until such time as Defendants
have submitted independent fire testing, independently tested load tables and
independently calculated section properties information on its CONDEC product,
and Underwriter’s Laboratory expressly grants Defendants a fire rating . . . based
upon information other than that unlawfully copied from EPIC’s EPICORE
Concept 1 catalog.
5
legal principles.” Hand v. United States, 441 F.2d 529, 531 (5th Cir. 1971).6 In this
case, those legal principles were set out long ago in United States v. United Shoe
Machinery Corp., 391 U.S. 244, 88 S. Ct. 1496 (1968) and its progeny. In United
Shoe, the United States as plaintiff sought to modify a ten-year-old consent decree and
injunction in an antitrust case, arguing that the divestiture goals of the order could
only be achieved through further court action. United Shoe, 391 U.S. at 247, 88 S. Ct.
at 1499. The Supreme Court held the district court had the power to grant the relief
requested if the Government showed the decree had failed to accomplish the results
it was designed to achieve. United Shoe, 391 U.S. at 251-52, 88 S. Ct. at 1500-01.
The Court distinguished its prior decision in United States v. Swift & Co., 286 U.S.
106, 52 S. Ct. 460 (1932), in which the Court set a higher standard for modification
of a decree or injunction when “defendants sought relief not to achieve the purposes
of the provisions of the decree, but to escape their impact.” United Shoe, 391 U.S. at
249, 88 S. Ct. at 1500 (emphasis added).
This Circuit has followed the rule of United Shoe when a plaintiff seeks to
modify a decree or injunction designed to protect plaintiff’s interests. In Exxon Corp.
v. Texas Motor Exchange of Houston, Inc., 628 F.2d 500 (5th Cir. 1980), the Texas
6
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this Court
adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to close
of business on September 30, 1981.
6
Motor Exchange had been barred by permanent injunction from using the trademark
“TEXXON.” The company began instead to use the names “Texon” and “Tex-On,”
and Exxon moved to modify the permanent injunction to prohibit the use of those
names as well. The Court found that “[t]he holding in United Shoe Machinery
indicates that an injunction may be modified to impose more stringent requirements
on the defendant when ‘the original purposes of the injunction are not being fulfilled
in any material respect.’” Exxon, 628 F.2d at 503 (citation omitted). The Court looked
at the original purpose of the permanent injunction and concluded that if the plaintiff
could establish the new circumstance infringed on that purpose, then the injunction
should be modified. Exxon, 628 F.2d at 504; see also Sizzler Family Steak Houses v.
Western Sizzlin Steak House, Inc., 793 F.2d 1529, 1539 (11th Cir. 1986) (approving
of and applying Exxon’s interpretation of United Shoe to uphold district court’s
alteration of a permanent injunction).
In this case, the trial court was within its discretion in concluding that this
Court’s mandate effected a change in circumstances so that modification was required.
The parties and the trial court agreed that the purpose of the original injunction was
to prevent Condec from infringing on Epic’s copyrights. Prior to the Court’s decision
in Epic Metals I, there was no need to enjoin advertisement of the UL rating because
Condec was not allowed to sell the product at all. Once this Court’s decision opened
7
the door for Condec to sell its product again, the trial court acted within its discretion
to determine that modification was necessary to prevent Condec from infringing on
Epic’s copyrights. Absent modification, Condec would reap an unexpected and
unintended windfall by using a UL rating obtained through the copyright violation.
Condec argues the injunction is duplicative of the statutory damages awarded.
But in copyright the two remedies are not mutually exclusive. See, e.g., Montgomery
v. Noga, 168 F.3d 1282, 1304-05 (11th Cir. 1999) (looking at both statutory damages
award and injunctive relief as bases for concluding that plaintiff prevailed for
attorney’s fees purposes); Twentieth Century Music Corp. v. Frith, 645 F.2d 6, 7 (5th
Cir. Unit B May 1981) (holding defendants have no right to jury trial in copyright
action where plaintiffs seek only statutory damages and injunctive relief); see also 4
Nimmer on Copyright § 14.06[B] (“the prevailing plaintiff in a copyright infringement
action may obtain, in addition to a monetary recovery, a permanent injunction”). The
trial court was well within its discretion in awarding both statutory damages and
injunctive relief.7
B. Scope of Modification
7
In any event, this Court in Epic Metals I upheld the prior award of both statutory damages
and injunctive relief, and we are bound by that prior panel’s ruling. See Burger King Corp. v.
Pilgrim's Pride Corp., 15 F.3d 166, 169 (11th Cir.1994) (under law of the case doctrine, “findings
of fact and conclusions of law by an appellate court are generally binding in all subsequent
proceedings in the same case in the trial or on a later appeal.” (citations omitted)).
8
Finally, Condec argues that even if injunctive relief is appropriate, the trial
court abused its discretion in that it fashioned an injunction that is overbroad, because
it (1) reaches beyond the parties of the litigation by requiring UL to withdraw its
certification of CONDEC and (2) goes beyond remedying the actual infringement by
regulating the “fruit of the infringing tree.” We reject both arguments.
The injunction does not place any restrictions on UL or any other non-party;
it merely regulates Condec’s infringing actions.8 Condec argues for the first time in
its reply brief that the injunction as modified impermissibly regulates the “fruit of the
infringing tree,” or the benefits generated by the original infringement. See 4 Nimmer
on Copyright § 14.06[C]. This court does not address arguments raised for the first
time in a reply brief. Hall v. Coram Healthcare Corp., 157 F.3d 1286, 1290 (11th Cir.
1998).
III. CONCLUSION
The trial court did not abuse its discretion in finding that without modification
the original purposes of the injunction would be unfulfilled in a material respect, nor
is the injunction as modified overbroad.
8
Moreover, there is little danger of Condec being forced to incur more testing expenses
than absolutely necessary to obtain a legitimate fire rating from UL. The trial court explicitly
reserved the right to modify the injunction in Condec’s favor, upon a proper showing by Condec,
“[i]f defendants learn that any language in the permanent injunction prohibits them from obtaining
a fire rating from Underwriter’s Laboratory which they would legally be able to obtain.”
9
AFFIRMED.
10