Montgomery v. Noga , 168 F.3d 1282 ( 1999 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
03/05/99
No. 95-3000 THOMAS K. KAHN
CLERK
D. C. Docket No. 93-929-CIV-ORL-19
ROBERT MONTGOMERY,
Plaintiff-Appellee,
versus
REBECCA NOGA and
FLORIDA LION'S DEN, INC.,
Defendants-Appellants.
Appeal from the United States District Court
for the Middle District of Florida
(March 5, 1999)
Before TJOFLAT, DUBINA and CARNES, Circuit Judges.
TJOFLAT, Circuit Judge:
The jury in this case found the defendants liable for infringing the plaintiff’s copyright in
a computer program and for violating section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).
The district court entered judgment against the defendants, awarding both actual damages and
attorneys’ fees to the plaintiff. On appeal, the defendants challenge numerous rulings of the
district court. We affirm. In so doing, we endeavor to bring a small measure of clarity to certain
“rather swampy”1 areas of copyright and unfair competition law.
I.
Plaintiff Robert Montgomery is the author of VPIC, a computer software program that
enables users to view pictures on a computer screen. Montgomery integrated several computer
programs that he previously had written – each of which was capable of reading different picture
file formats – to create the initial version of VPIC in December 1988. VPIC went through
several versions during the course of its development, including version 1.3, released on
February 2, 1989, and version 1.4, released on March 15, 1989. Montgomery did not register his
copyrights in the early versions of VPIC and did not affix a copyright notice when he marketed
these early versions on computer bulletin boards. On August 8, 1990, Montgomery registered
his copyright in VPIC version 2.9a. VPIC 2.9a and subsequent versions did contain a copyright
notice when Montgomery marketed them on computer bulletin board systems.2
The defendants, Florida Lion’s Den, Inc. (“FLD”) and Rebecca L. Noga (FLD’s
president and sole shareholder), produce CD-ROM discs that are largely pornographic in nature.
1
Jellibeans, Inc. v. Skating Clubs of Ga., Inc., 716 F.2d 833, 839 (11th Cir. 1983)
(quoting B.H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d 1254, 1258 (5th Cir. 1971)).
2
As Montgomery’s complaint explains, a bulletin board system (or BBS) is an electronic
interface between two computer systems that allows users to download software onto their
computer systems. VPIC 2.9a and subsequent versions included a notice of Montgomery’s
copyright as well as information about how users that obtained VPIC from bulletin boards could
register with Montgomery to avoid copyright infringement liability. Software that is marketed in
this way is called “shareware.”
1
In 1992, the defendants and FLD vice-president Blaine Richard downloaded VPIC version 4.33
from a bulletin board and incorporated it as a utility on four of FLD’s CD-ROM titles without
obtaining a license from Montgomery. Because the defendants had activated a certain feature of
VPIC, the VPIC closing screen that contained Montgomery’s copyright notice did not appear
when users viewed the pictures on the defendants’ discs.
Upon learning of the defendants’ unauthorized use of VPIC, Montgomery – acting
through his licensing agent, who sent a letter to the defendants on June 3, 1993 – demanded that
the defendants cease and desist from using VPIC on FLD products, recall all unsold products
containing VPIC, and pay damages for their unauthorized use. The defendants did not comply
with these demands; Montgomery therefore filed a complaint against them in the U.S. District
Court for the Middle District of Florida on October 25, 1993. The complaint sought damages
and injunctive relief for infringement of Montgomery’s VPIC copyright in violation of 17 U.S.C.
§ 101 et seq., and for a violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).4 The
defendants raised a number of affirmative defenses and impleaded Richard as a third-party
defendant. Montgomery obtained a preliminary injunction on November 30, 1993, that enjoined
the defendants from utilizing VPIC in FLD products.5
3
Montgomery registered his copyright in VPIC 2.9a in 1990. The defendants sold the
four CD-ROM titles incorporating VPIC 4.3 from approximately December 1992 through
October 1993. At the time that the defendants incorporated VPIC 4.3 onto their CD-ROM discs,
VPIC 4.3 was not the most current version of VPIC available. Montgomery did not register his
copyright in VPIC version 4.3 until January 24, 1995, well after he commenced this suit.
4
The complaint also alleged that the defendants’ actions constituted unfair competition
under Florida common law. The district court dismissed this claim on April 7, 1994, on the
ground that it was pre-empted by the Copyright Act.
5
The injunction also required the defendants to recall and surrender to Montgomery all
infringing FLD products in their possession, and to advertise via bulletin board that the
2
Both Montgomery and the defendants moved for summary judgment on Montgomery’s
two claims, but the district court denied these motions on January 24, 1995. The case went to
trial before a jury on March 20, 1995. At the close of Montgomery’s case in chief, the
defendants moved for judgment as a matter of law on both claims; the court denied their motion.
At the close of all the evidence, Montgomery moved for judgment as a matter of law and the
defendants renewed their motion; the court denied these motions as well. The case was then
submitted to the jury, which found in favor of Montgomery on both claims and awarded actual
damages in the amount of $80,000 for the copyright infringement claim and $30 for the Lanham
Act claim.6 The jury also found that, with regard to the copyright claim, the defendants’
infringement had been “willful” and that, with regard to the Lanham Act claim, the case was
“exceptional.”
The district court subsequently entertained several post-trial motions. The court denied
the defendants’ motion for remittitur or a new trial, as well as their renewed motion for judgment
as a matter of law.7 The court granted Montgomery’s motion for a permanent injunction and, in
light of the jury’s “willful” and “exceptional” findings, granted Montgomery’s motion for costs
and attorneys’ fees. Montgomery also moved for an award of statutory damages pursuant to 17
U.S.C. § 504(c)(1), but the district court declined to award additional damages. Judgment was
infringing products were produced without a license and thus were subject to payment of a
licensing fee to Montgomery.
6
The jury had been instructed that Montgomery could not be awarded a double recovery
of the same damages under both the copyright and Lanham Act claims.
7
The court granted the defendants’ motion for judgment against third-party defendant
Richard, noting that Richard previously had admitted that the defendants had a right of complete
contribution and indemnification against him for any amount that the defendants were found to
owe Montgomery in this suit.
3
therefore entered in favor of Montgomery and against the defendants in the amount of
$228,833.34: $80,000 for the copyright claim, $30 for the Lanham Act claim, $142,289.26 for
attorneys’ fees, and $6,514.08 for costs.8 This appeal followed.9
II.
The defendants contend that the district court erred in (A) denying their motion for
judgment as a matter of law on the copyright infringement claim given that (1) Montgomery’s
copyright in VPIC 2.9a is invalid because earlier versions of VPIC were injected into the public
domain, and (2) the scope of Montgomery’s registered copyright in VPIC 2.9a, even if valid,
does not extend to protect VPIC 4.3; (B) denying their motion for remittitur or a new trial on the
issue of damages with respect to the copyright claim; (C) denying their motion for judgment as a
matter of law on the Lanham Act claim; (D) precluding one of their witnesses from testifying as
an expert; and (E) awarding Montgomery attorneys’ fees on (1) the copyright claim and (2) the
Lanham Act claim. We address these contentions seriatim.
A.
In evaluating the defendants’ contention that the district court improperly denied their
motion for judgment as a matter of law on Montgomery’s copyright infringement claim, we
proceed from certain basic principles of copyright law. The Copyright Act of 1976, 17 U.S.C. §
8The court also entered judgment in favor of the defendants against Richard in this
amount.
9
We have subject matter jurisdiction over this appeal. See 15 U.S.C. § 1121(a) (1994);
28 U.S.C. §§ 1291, 1338 (1994).
4
101 et seq. (1994), provides protection for computer programs. See Cable/Home
Communication Corp. v. Network Prods., Inc., 902 F.2d 829, 842 (11th Cir. 1990); 17 U.S.C. §
102(a) (1994). The Act defines a computer program as “a set of statements or instructions to be
used directly or indirectly in a computer in order to bring about a certain result.” 17 U.S.C. § 101(1994). For original computer programs and other original works of authorship created after
1977, copyright automatically inheres in the work at the moment it is created without regard to
whether it is ever registered. See Arthur Rutenberg Homes, Inc. v. Drew Homes, Inc., 29 F.3d
1529, 1531 (11th Cir. 1994); 17 U.S.C. § 102(a); Melville B. Nimmer & David Nimmer, 2
Nimmer on Copyright § 7.16[A][1] (1998) [hereinafter Nimmer]. In order to bring an action for
copyright infringement, however, the author must first register the copyright. See 17 U.S.C. §§
411(a), 501(b) (1994); M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486, 1488 & n.4
(11th Cir. 1990) (stating that “[t]he registration requirement is a jurisdictional prerequisite to an
infringement suit”). Montgomery’s claim of copyright infringement, therefore, necessarily is
predicated on the defendants’ infringement of VPIC 2.9a – the only version of VPIC that
Montgomery had registered at the time he commenced this action.
Once a copyright infringement action has been properly commenced, the copyright
holder must prove two elements in order to prevail: “(1) ownership of a valid copyright, and (2)
copying of constituent elements of the work that are original.” Feist Publications, Inc. v. Rural
Tel. Serv. Co., 499 U.S. 340, 361, 111 S. Ct. 1282, 1296, 113 L. Ed. 2d 358 (1991). Here, the
element of copying is not in dispute. The defendants admit that, without obtaining a license
from Montgomery, they downloaded VPIC 4.3 from a bulletin board and incorporated it as a
utility on four FLD discs.
5
The defendants challenge the propriety of Montgomery’s copyright infringement claim
on two grounds. First, they argue that Montgomery does not own a valid copyright in VPIC 2.9a
as required by Feist. According to the defendants, Montgomery’s copyright in VPIC 2.9a is
invalid because earlier versions of VPIC – components of which were contained in VPIC 2.9a –
were injected into the public domain. Second, and alternatively, the defendants argue that the
scope of Montgomery’s copyright registration for VPIC 2.9a does not extend to support the
commencement of an action for infringement of his unregistered copyright in VPIC 4.3 – the
version that the defendants incorporated.
The district court rejected these arguments, finding that the jury’s verdict was in
accordance with both the law and the evidence at trial. We review a district court’s denial of a
motion for judgment as a matter of law de novo, applying the same standards as the district
court. In considering the sufficiency of the evidence that supports the jury’s verdict, we review
the evidence “in the light most favorable to, and with all reasonable inferences drawn in favor of,
the nonmoving party.” Walker v. NationsBank of Fla., N.A., 53 F.3d 1548, 1555 (11th Cir.
1995). If reasonable and fair-minded persons in the exercise of impartial judgment might reach
different conclusions based on the evidence presented, the motion should be denied. See Walls
v. Button Gwinnett Bancorp, Inc., 1 F.3d 1198, 1200 (11th Cir. 1993). Questions of law raised
by the motion, however, are reviewed de novo. See Morro v. City of Birmingham, 117 F.3d 508,
513 (11th Cir. 1997), cert. denied, — U.S. —, 118 S. Ct. 1299, 140 L. Ed. 2d 465 (1998).
Applying these standards to the two arguments presented by the defendants, we conclude that the
district court correctly denied their motion.
6
1.
The plaintiff in a copyright infringement action normally bears the burden of proving
ownership of a valid copyright. In order to meet this burden, the plaintiff must show that the
work is original and that the applicable statutory formalities were followed. See Bateman v.
Mnemonics, Inc., 79 F.3d 1532, 1541 (11th Cir. 1996). Given that Montgomery produced a
certificate of copyright registration for VPIC 2.9a at trial, however, he benefited from a
rebuttable presumption that the VPIC 2.9a copyright is valid. See 17 U.S.C. § 410(c) (1994).10
The burden therefore shifted to the defendants, who were required to demonstrate that “the work
in which copyright is claimed is unprotectable (for lack of originality) or, more specifically, to
prove that . . . the copyrighted work actually taken is unworthy of copyright protection.”
Bateman, 79 F.3d at 1541.
The defendants’ argument that VPIC 2.9a is unprotectable has two parts. Citing 17
U.S.C. § 405(a), the defendants initially claim that VPIC 1.3 and its predecessor versions were
injected into the public domain – i.e., that Montgomery forfeited his unregistered copyrights in
these versions – because these versions did not contain copyright notices when Montgomery
released them to the public prior to March 1, 1989. Second, the defendants assert that the
10
Section 410(c) states that, in any judicial proceeding, “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 . . . .” The defendants argue that Montgomery could not
benefit from this presumption because he released some of VPIC’s predecessor programs prior to
October 1988, over five years before he brought this suit. This argument misinterprets the
statute. Section 410(c) merely requires that the work at issue be registered (not that the
infringement suit be brought) within five years after its first publication. The evidence at trial
demonstrated that VPIC 2.9a was first released to the public on July 1, 1990, and that
Montgomery registered his copyright in that version on August 8, 1990. Accordingly,
Montgomery was entitled to the section 410(c) presumption.
7
revisions Montgomery made to VPIC in versions 1.4 through 2.9a were not sufficiently original
to support a valid copyright in version 2.9a.
We find that the defendants have not met their burden. Assuming arguendo that
Montgomery forfeited his copyrights in VPIC 1.3 and its predecessors by publishing them
without a copyright notice,11 we conclude that the modifications Montgomery made to VPIC in
versions 1.4 through 2.9a were sufficiently original to support a valid copyright in version 2.9a
as a derivative work. See SAS Inst., Inc. v. S&H Computer Sys., Inc., 605 F. Supp. 816, 826-27
(M.D. Tenn. 1985) (concluding that regardless of whether previous version of computer
programming system was in the public domain, subsequent version of system was sufficiently
original to support valid copyright).
11
17 U.S.C. § 405(a) (1994) states that, for works publicly distributed before March 1,
1989,
the omission of [a copyright notice] from copies or phonorecords . . . does not
invalidate the copyright in a work if . . . (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 . . . .
See generally Donald Frederick Evans & Assocs., Inc. v. Continental Homes, Inc., 785 F.2d 897,
905-06, 910-12 (11th Cir. 1986); 2 Nimmer § 7.16[A][1].
Montgomery argues that his 1990 registration of, and inclusion of a copyright notice in,
VPIC 2.9a occurred less than 5 years after the publication of VPIC 1.3 and its predecessors in
the late 1980s. He concludes, therefore, that any potential forfeiture of his rights properly was
cured under section 405(a)(2). Montgomery’s conclusion might be correct if he had registered,
and made a reasonable effort to add notice to subsequent copies of, VPIC version 1.3 and its
predecessor versions themselves. Cf. Continental Homes, 785 F.2d at 911 n.22 (discussing a
disagreement among various courts regarding whether section 405(a)(2) requires a copyright
owner to add notice to all copies distributed, or only to copies distributed after it is discovered
that notice was omitted). We express no opinion, however, on the question of whether the
inclusion of a copyright notice in copies of a subsequent version of a work can rescue the
copyright of a previous version that was distributed without a copyright notice. Cf. 17 U.S.C. §
101 (1994) (“where the work has been prepared in different versions, each version constitutes a
separate work”).
8
The Copyright Act states that “[a] work consisting of editorial revisions, annotations,
elaborations, or other modifications [to a preexisting work that], as a whole, represent an original
work of authorship, is a ‘derivative work.’” 17 U.S.C. § 101. Such a work – if it is non-
infringing and sufficiently original – qualifies for a separate copyright, although this copyright
does not protect the preexisting material employed in the derivative work. See 17 U.S.C. § 103(1994); Stewart v. Abend, 495 U.S. 207, 223-24, 110 S. Ct. 1750, 1761-62, 109 L. Ed. 2d 184(1990); 1 Nimmer §§ 3.01, 3.04[A]. In this case, the requirement of non-infringement clearly is
satisfied. This is true regardless of whether Montgomery held valid copyrights in VPIC 1.3 and
its predecessor versions when he modified them to create version 2.9a (as Montgomery
maintains) or he merely took VPIC 1.3 and its predecessor versions from the public domain and
modified them in order to create version 2.9a (as the defendants maintain).
With regard to the requirement of originality, all that must be shown is that the work
“possesses at least some minimal degree of creativity. . . . To be sure, the requisite level of
creativity is extremely low; even a slight amount will suffice.” Feist, 499 U.S. at 345, 111 S. Ct.
at 1287; see also id. at 348, 111 S. Ct. at 1289.12 The defendants claim that the modifications
Montgomery made to VPIC in versions 1.4 through 2.9a did not cross even this low threshold.
In support of this claim, they argue that Montgomery himself stated on cross-examination that
12
Feist resolved a possible tension in our precedent regarding the test for establishing
originality. Compare Sherry Mfg. Co. v. Towel King of Fla., Inc., 753 F.2d 1565, 1568 (11th
Cir. 1985) (noting that “in order to qualify for a separate copyright, the derivative work must
contain some substantial, and not merely trivial, originality” (emphasis added)), with Original
Appalachian Artworks, Inc. v. The Toy Loft, Inc., 684 F.2d 821, 824-25 (11th Cir. 1982)
(discussing the “minimal degree of originality necessary for copyright protection” (emphasis
added)). Cf. 1 Nimmer § 3.03, at 3-10 (“[I]n order to qualify for a separate copyright as a
derivative or collective work, the additional matter injected in a prior work . . . must constitute
more than a minimal contribution.”).
9
the source code for VPIC version 2.9a was substantially similar to the source code for version
1.3. We find that the import of Montgomery’s statement is far from clear.13 It is clear from other
evidence presented at trial, however, that VPIC 2.9a contained several additions and corrections
that were not present in version 1.3. For example, the revision history that was submitted with
13
The statement at issue occurred after a series of questions by the defendants’ counsel
that sought to have Montgomery compare versions 1.3 and 2.9a. Counsel began by asking
Montgomery about the size of the execute file (in bytes) for each of these versions, and then by
asking him to compare the size of these files in percentage terms. Counsel then turned to the
source code for each version and asked what would be the best way to compare the code. This
exchange followed:
A. There probably is no good way to do it. You may have added
comments, you may have taken comments out. There’s [sic] comments that don’t
compile. Even if you look at the size of the C modules and things like that, it still
wouldn’t tell you. . . .
Q. If we had the source code of VPIC version 1.3, couldn’t we at least see
some very similar [sic]?
A. You’d see portions of it in there, yes. The menu system was in there.
Q. You might even see 80 or 90 percent, possibly; isn’t that correct?
A. You might. Might not. . . . How can you possibly tell? You know, I
don’t, I don’t understand how you can tell. How you can get a comparison of 90
percent, 80 percent, 70 percent, 100 percent, you know. It may be 100 percent
with different words. I mean, you know, that’s a possibility. I don’t know how
you, how you can get percentages.
(emphasis added).
Defendants claim that the portion of Montgomery’s answer emphasized above establishes
that the material added in versions 1.4 through 2.9a was not sufficiently original to support a
valid copyright in version 2.9a. It is not clear from this exchange, however, whether
Montgomery’s comments regarding percentages pertained to the size of the code for these two
versions or to the similarity of the code. The following exchange, which occurred shortly after
the one quoted above, suggests that the code for version 2.9a was not 100 percent similar to the
code for version 1.3:
Q. . . . [I]n 1.3, you pretty well have 80 or 90 percent of VPIC 2.9a . . . as
far as what it does?
A. . . . I think by the time it got to 2.9, it knew how to do a bunch of other
things. . . .
Q. By the time you got to 2.9, you also corrected a number of errors, did
you not?
A. Yes. Yes. It mainly amounts to adding new features.
10
the VPIC 2.9a copyright registration application shows that in versions 1.4 through 2.9a,
Montgomery corrected many problems, increased the number of graphics file formats that VPIC
users could view, increased by 50 percent the speed at which VPIC would decode graphics
stored in the GIF file format, and configured VPIC to work with additional graphics computer
chips and cards. In light of this evidence, we conclude that the defendants failed to meet their
burden of showing that the modifications Montgomery made to VPIC in versions 1.4 through
2.9a were not sufficiently original to support a valid copyright in version 2.9a as a derivative
work. The district court, therefore, did not clearly err in rejecting the defendants’ argument that
VPIC 2.9a is unprotectable.14
14
While the question of originality usually is viewed as an issue of fact subject to
appellate review under the clearly erroneous standard, see Original Appalachian Artworks, 684
F.2d at 825; 3 Nimmer § 12.12, we have departed from this standard in certain situations. In
Sherry Manufacturing, 753 F.2d at 1569 & n.6, we held as a matter of law that a design on a
towel lacked sufficient originality to be copyrightable. In so doing, we stated that “where the
appellate court has the opportunity to view for itself the same tangible exhibits considered by the
trial court, the rationale for applying the clearly erroneous standard disappears.” Id. at 1569 n.6.
We cited the Second Circuit case of Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27,
35 (2d Cir. 1982), in support of this statement.
In this case, we have before us certain tangible exhibits that bear directly on the question
of whether Montgomery’s modifications were sufficiently original. Some of these exhibits, such
as the source code for VPIC 2.9a, are not readily comprehensible by those not trained in
computer programming. The VPIC revision history is somewhat more comprehensible, but
Montgomery interpreted and expanded upon it at length in his trial testimony. In such
circumstances, it is unclear whether Sherry Manufacturing would require that we consider the
question of originality de novo. Cf. Malden Mills, Inc. v. Regency Mills, Inc., 626 F.2d 1112,
1113 & n.2 (2d Cir. 1980) (implying, in the context of a copyright infringement analysis, that
expert testimony regarding matters not within the knowledge of the lay observer might preclude
de novo review); G.R. Leonard & Co. v. Stack, 386 F.2d 38, 40-41 (7th Cir. 1967) (applying the
clearly erroneous standard in the copyright infringement context where the evidence regarding
the parties’ respective works consisted mostly of “testimonial analysis and interpretation” of the
works). To the extent that Sherry Manufacturing would require de novo review, however, we
conclude that Supreme Court precedent prevents us from following it.
Only twenty days after we decided Sherry Manufacturing, the Supreme Court held that
factual findings are to be reviewed for clear error “even when the district court’s findings do not
11
2.
We now turn to the defendants’ alternative argument that the scope of Montgomery’s
copyright registration in VPIC 2.9a does not extend to support the commencement of an action
for infringement of his unregistered copyright in the derivative work VPIC 4.3.15 The defendants
base this argument on several provisions of the Copyright Act. First, they point to the following
clause from the Act’s discussion of when a work is “created”: “[W]here the work has been
prepared in different versions, each version constitutes a separate work.” 17 U.S.C. § 101. The
defendants also direct our attention to 17 U.S.C. § 411(a) (1994), which states that “no action for
infringement of the copyright in any work shall be instituted until registration of the copyright
claim has been made in accordance with this title.” Reading these provisions together, the
rest on credibility determinations, but are based instead on physical or documentary evidence or
inferences from other facts.” Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S. Ct.
1504, 1511-12, 84 L. Ed. 2d 518 (1985). While we recognize that Second Circuit copyright
infringement cases continue to apply de novo review to certain factual determinations that are
based on tangible exhibits, see, e.g., Folio Impressions, Inc. v. Byer Cal., 937 F.2d 759, 766 (2d
Cir. 1991) (reviewing district court finding of substantial similarity de novo); Business Trends
Analysts, Inc. v. Freedonia Group, Inc., 887 F.2d 399, 402-03 (same), we believe that this
standard of review is inappropriate after Anderson. See Wildlife Express Corp. v. Carol Wright
Sales, Inc., 18 F.3d 502, 506-07 & n.1 (7th Cir. 1994); cf. AmBrit, Inc. v. Kraft, Inc., 812 F.2d
1531, 1541 n.46 (11th Cir. 1986) (citing Anderson and declining to review de novo a finding of
similarity of design in trade dress infringement action brought under Lanham Act section 43(a)).
15
In his brief, Montgomery characterizes VPIC 4.3 as a derivative work of VPIC 2.9a. If
this characterization is accurate, VPIC 4.3 would have qualified for a separate copyright at the
moment of its creation. See 17 U.S.C. §§ 102(a), 103 (1994). Although the defendants do not
contend that the modifications Montgomery made to VPIC 2.9a in order to create VPIC 4.3 were
insufficiently original to warrant characterizing VPIC 4.3 as a derivative work, the evidence in
the record regarding the nature of these modifications is sparse. We assume for purposes of the
above discussion that VPIC 4.3 is a derivative work, but it is important to note that our
conclusion would be the same even if VPIC 4.3 did not possess sufficient originality to be
characterized as a derivative work.
12
defendants conclude that because VPIC version 4.3 is a “separate work” that was not registered
when Montgomery brought this suit, Montgomery could not maintain a copyright infringement
action against them for copying that work. While the defendants recognize that Montgomery
registered his copyright in VPIC 2.9a, they claim that the Copyright Act16 supports the
conclusion that this registration does not cover material – such as the derivative work VPIC 4.3 –
not in existence at the time of the registration.
The defendants’ argument, however, mischaracterizes Montgomery’s claim of copyright
infringement. The evidence at trial showed that VPIC 4.3 incorporated over seventy percent of
the original source code from the registered work VPIC 2.9a, and that VPIC 4.3 would not
function if the VPIC 2.9a code was removed. By downloading VPIC 4.3 and incorporating it as
a utility on FLD discs, therefore, the defendants infringed Montgomery’s registered copyright in
VPIC 2.9a within the meaning of section 501(a) of the Copyright Act. See 17 U.S.C. § 501(a)
(1994) (“Anyone who violates any of the exclusive rights of the copyright owner as provided by
sections 106 through 118 . . . is an infringer of the copyright . . . .”); 17 U.S.C. § 106(1)-(2)
(1994) (noting that a copyright owner has the exclusive right to do and to authorize both
reproduction of the copyrighted work in copies and preparation of derivative works based upon
the copyrighted work); H.R. Rep. No. 94-1476, at 61 (1976), reprinted in 1976 U.S.C.C.A.N.
5659, 5675 (noting that under section 106(1), “a copyrighted work would be infringed by
reproducing it in whole or in any substantial part, and by duplicating it exactly or by imitation or
16
The defendants argue that the provisions of the Copyright Act cited above, as well as
section 103(b) of the Act, support their characterization of the VPIC 2.9a registration. See 17
U.S.C. § 103(b) (1994) (stating that the copyright in a derivative work “is independent of, and
does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright
protection in the preexisting material”).
13
simulation” (emphasis added)); id. at 62, reprinted in 1976 U.S.C.C.A.N. at 5675 (“The
exclusive right to prepare derivative works, specified separately in clause (2) of section 106,
overlaps the exclusive right of reproduction [in section 106(1)] to some extent. . . . [T]o
constitute a violation of section 106(2), the infringing work must incorporate a portion of the
copyrighted work in some form.” (emphasis added)). Such infringement is actionable under
sections 501(b) and 411(a) of the Act.17 See 17 U.S.C. § 501(b) (1994) (“The legal or beneficial
owner of an exclusive right under a copyright is entitled, subject to the requirements of section
411, to institute an action for any infringement of that particular right committed while he or she
is the owner of it.”); 17 U.S.C. § 411(a) (1994); see also Lamb v. Starks, 949 F. Supp. 753, 755-
56 (N.D. Cal. 1996) (holding that a prima facie case of copyright infringement had been
established where the defendant copied plaintiff’s unregistered trailer that contained portions of
17
The authorities cited in the text directly support our conclusion. Additional support
may be found in the pronouncements of courts and commentators that have dealt with analogous
factual situations. See, e.g., Gamma Audio & Video, Inc. v. Ean-Chea, 11 F.3d 1106, 1111-12
(1st Cir. 1993) (holding that plaintiff could recover damages for copyright infringement of
underlying work where plaintiff had an exclusive license to distribute an underlying work that
was subject to a registered copyright, plaintiff had produced an unregistered derivative work
based on the underlying work, and defendant had copied and distributed the derivative work); id.
at 1112 (“Although a derivative work may be separately copyrighted, that copyright does not
affect the copyright in the underlying work. . . . Any elements that the author of the derivative
work borrowed from the underlying work . . . remain protected by the copyrights in the
underlying work.”); cf. Stewart v. Abend, 495 U.S. 207, 223, 110 S. Ct. 1750, 1761, 109 L. Ed.
2d 184 (1990) (“The aspects of a derivative work added by the derivative author are that author’s
property, but the element drawn from the pre-existing work remains on grant from the owner of
the pre-existing work.”). See also 1 Nimmer § 3.05, at 3-34.20 (considering whether the owner
of the registered copyright in an underlying work may claim infringement when the defendant
has copied matter that originated in the underlying work from a derivative work produced by a
third party under a nonexclusive license, and concluding that “the better view is that if the
material copied was derived from a copyrighted underlying work, this will constitute an
infringement of such work regardless of whether the defendant copied directly from the
underlying work, or indirectly via the derivative work”).
14
a movie in which the plaintiff held a registered copyright); Central Point Software, Inc. v.
Nugent, 903 F. Supp. 1057, 1060 & n.5 (E.D. Tex. 1995) (granting summary judgment on
plaintiffs’ copyright infringement claim where plaintiffs registered their copyrights in certain
versions of computer programs and defendants copied subsequent versions that were derived
from the registered works); 2 Nimmer § 7.16[B][2] (concluding that the owner of a registered
underlying work that is part of an unregistered derivative work should be able to maintain a
copyright infringement suit against a defendant who reproduces the derivative work – and thus
the underlying work contained therein – without authorization); Douglas Y’Barbo, On Section
411 of the Copyright Code and Determining the Proper Scope of a Copyright Registration, 34
San Diego L. Rev. 343, 351-52, 354 n.38, 356 (1997) (same).
We conclude, after considering this question of law de novo, that the district court did not
err in rejecting the defendants’ argument that the scope of Montgomery’s registered copyright in
VPIC 2.9a does not extend to protect VPIC 4.3. We therefore affirm the district court’s decision
to deny the defendants’ motion for judgment as a matter of law.
B.
The defendants’ next claim of error relates to their motion for remittitur or – if
Montgomery rejected a remittitur amount proposed by the court – for a new trial on the issue of
damages with respect to Montgomery’s copyright claim. In this motion, the defendants
contended that the jury’s award of $80,000 in damages for copyright infringement – $43,900 for
actual damages sustained by Montgomery as a result of the infringement and $36,100 for the
defendants’ profits attributable to the infringement – was excessive and not supported by the
15
evidence because the award was based on the value of unregistered VPIC versions issued
subsequent to the registered version 2.9a. The defendants maintained that no evidence was
introduced at trial regarding the value of VPIC 2.9a at the time of the infringement, and that
there was no evidence that anyone had ever purchased a license from Montgomery to use VPIC
2.9a. The district court denied the motion, concluding that the verdict was in accordance with
the jury instructions and the evidence presented at trial.
Although the defendants’ briefs on appeal are somewhat opaque, the defendants
apparently contend that the district court erred in two ways when it denied their motion. First,
they claim that the court committed an error of law by failing to instruct the jury to base its
calculation of actual damages on the reasonable value in the marketplace of the plaintiff’s
program VPIC 2.9a for commercial use at the time of the infringement. When the defendants’
counsel suggested this instruction during the charge conference, the court expressed the view
that it would be error to rule that the plaintiff could recover infringement damages only for VPIC
2.9a. Such a ruling, explained the court, would “foreclose the derivative work concept.”
Instead, the court merely instructed the jury to consider the reasonable value in the marketplace
of the “plaintiff’s program” for commercial use at the time of the infringement. The defendants’
counsel did not object to the district court’s version of the actual damages instruction as required
by Fed. R. Civ. P. 51. See Electro Servs., Inc. v. Exide Corp., 847 F.2d 1524, 1528-29 (11th Cir.
1988) (concluding that a party who offers a proposed instruction does not thereby preserve a
challenge to the giving of a different instruction by the court, absent a specific objection). We
16
therefore review the instruction only for plain error.18 See Pate v. Seaboard R.R., Inc., 819 F.2d
1074, 1082-83 (11th Cir. 1987).
When reviewing a jury instruction under the plain error standard, we will reverse “only in
exceptional cases where the error is ‘so fundamental as to result in a miscarriage of justice.’”
Iervolino v. Delta Air Lines, Inc., 796 F.2d 1408, 1414 (11th Cir. 1986) (quoting Delancey v.
Motichek Towing Serv., Inc., 427 F.2d 897, 901) (5th Cir. 1970)). More specifically, we require
appellants to establish “that the challenged instruction was an incorrect statement of the law and
that it was probably responsible for an incorrect verdict, leading to substantial injustice.” Pate,
819 F.2d at 1083. If the instruction will “‘mislead the jury or leave the jury to speculate as to an
essential point of law,’ the error is sufficiently fundamental to warrant a new trial despite a
party’s failure to state a proper objection.” Id. (quoting Cruthirds v. RCI, Inc., 624 F.2d 632,
636 (5th Cir. 1980)).
Applying this standard to the challenged instruction on the calculation of actual damages,
we conclude that the defendants have not established that the instruction was fundamentally
erroneous. The relevant provision of the Copyright Act states that “[t]he copyright owner is
entitled to recover the actual damages suffered by him or her as a result of the infringement . . .
.” 17 U.S.C. § 504(b) (1994). This provision requires the plaintiff to demonstrate a “causal
18
In their brief on appeal, the defendants suggest that, prior to the charge conference, the
district court had already heard and rejected their argument that damages should be based on
version 2.9a. We have recognized an exception to the objection requirement of Rule 51 where
“the party’s position has previously been made clear to the court and it is plain that a further
objection would have been unavailing.” Pate, 819 F.2d at 1082 (quoting Lang v. Texas & Pac.
R.R. Co., 624 F.2d 1275, 1279 (5th Cir. 1980)). After reviewing the record, we are not
convinced that it was “plain” at the charge conference that an objection by the defendants would
have been unavailing.
17
connection” between the defendant’s infringement and an injury to the market value of the
plaintiff’s copyrighted work at the time of infringement.19 See Key West Hand Print Fabrics,
Inc. v. Serbin, Inc., 269 F. Supp. 605, 613 (S.D. Fla. 1966); 4 Nimmer § 14.02[A]; see also Data
Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1170-71 (1st Cir. 1994) (defining the
plaintiff’s burden with reference to tort law principles of causation and damages). Having held
that the defendants infringed Montgomery’s registered copyright in VPIC 2.9a by placing VPIC
4.3 on FLD discs, see supra part II.A.2., it follows that the jury properly could consider evidence
of the injury that the defendants’ infringement caused to the value of subsequent unregistered
VPIC versions derived from version 2.9a – such as VPIC 4.3 – in order to determine the extent
of the injury to the value of Montgomery’s registered copyright at the time of infringement. Cf.
4 Nimmer § 14.02[A], at 14-8 n.4 (noting that, in view of the copyright owner’s exclusive right
to prepare derivative works under 17 U.S.C. § 106(2), the injury to the market value of the
copyrighted work includes any injury to the value of “sequel rights”). Obviously, Montgomery’s
damages could not adequately be measured solely by reference to the market value of VPIC 2.9a
as a stand-alone computer program; this value presumably was quite low at the time of the
infringement given that revised versions of the program were then available. Therefore, the
district court did not commit a fundamental error by refusing to instruct the jury to calculate
actual damages based only on the value of version 2.9a of the plaintiff’s program.
19
This injury often is measured by the revenue that the plaintiff lost as a result of the
infringement. See Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 567, 105 S.
Ct. 2218, 2234, 85 L. Ed. 2d 588 (1985); Data Gen. Corp., 36 F.3d at 1170; 4 Nimmer §
14.02[A], at 14-9.
18
The defendants’ second claim of error relates to the evidentiary basis for the jury’s
damage award. The defendants point out that versions 2.9a and 4.3 of VPIC contained a
statement that those who wished to use VPIC as a utility for another product had to obtain a
license from Montgomery and pay a royalty of $1 per copy of the product shipped. Because the
evidence established that FLD and an associated company distributed 26,641 discs containing
VPIC, the defendants contend that Montgomery should have received at most $26,641 in
damages. Indeed, given that Montgomery sold licenses for unlimited use of a subsequent
version of VPIC – version 5.1e – to various entities for $2,000, the defendants contend that the
damages awarded should have been no higher than $8,000 for the four CD-ROM titles produced
by FLD that incorporated VPIC. The defendants therefore argue that the jury’s award of
$80,000 in damages was both excessive and unsupported by the evidence.
Because motions for a new trial are committed to the discretion of the trial court, we
review the district court’s rejection of the defendants’ argument only to ascertain whether there
has been a clear abuse of discretion. See Agro Air Assocs., Inc. v. Houston Cas. Co., 128 F.3d
1452, 1455 n.5 (11th Cir. 1997) (reviewing denial of motion for remittitur or new trial on ground
of excessive damages under abuse of discretion standard); United States v. Sullivan, 1 F.3d
1191, 1196 (11th Cir. 1993) (reviewing denial of motion for new trial on ground that verdict was
against the great weight of the evidence under abuse of discretion standard). We have found that
“[t]his level of deference is especially appropriate where a new trial is denied and the jury’s
determinations are left undisturbed.” Insurance Co. of N. Am. v. Valente, 933 F.2d 921, 925
(11th Cir. 1991). After reviewing the entire record in light of this standard, we find that there
was ample evidence from which the jury could have concluded that an award of $43,900 for
19
actual damages resulting from the infringement and $36,100 for the defendants’ profits
attributable to the infringement was appropriate.
As to Montgomery’s actual damages, the evidence indicated that VPIC 4.3 was not the
most current version of VPIC available at the time that FLD produced its four CD-ROM titles.
At that time, a license to use the most current version of VPIC as a utility for another product
could be obtained in exchange for a royalty of $2 to $3 per copy of the product shipped.20
Montgomery testified at trial that he typically only licensed the most current version of VPIC
available.21 The jury was thus entitled to conclude that the defendants would have had to pay
Montgomery at least $53,282 for a license to distribute the 26,641 FLD CD-ROM discs that
incorporated VPIC – an amount in excess of the $43,900 that the jury actually awarded. While
the defendants correctly note that Montgomery sold $2,000 unlimited use licenses for VPIC 5.1e,
the jury certainly was permitted to find that Montgomery would not have offered such a license
to the defendants. See Iowa State Univ. Research Found., Inc. v. American Broad. Cos., 475 F.
Supp. 78, 83 (S.D.N.Y. 1979) (noting, in the context of awarding statutory damages under the
20
VPIC 5.0b was the most current version available at the time that FLD produced its
first CD-ROM title; Montgomery testified that he charged a royalty of $2 per copy at this time.
On December 20, 1992, Montgomery raised the royalty to $3 per copy beginning with VPIC 6.0.
Montgomery argues on appeal that FLD produced its three remaining CD-ROM titles after this
royalty increase. While the testimony at trial was somewhat unclear on this point, the pressing
dates that are encoded within the CD-ROM exhibits themselves seem to indicate that FLD
produced only one of its CD-ROM titles after December 20, 1992.
21
As mentioned in note 20, supra, Montgomery increased his royalty rate to $3 beginning
with VPIC 6.0. At trial, however, the evidence indicated that Montgomery subsequently issued
some licenses for older versions of VPIC – versions 5.1 and 5.1e – at a rate of either $2 per copy
or $2,000 for unlimited usage. Montgomery testified that he issued these licenses either because
the user did not plan to distribute VPIC to the public or because the user planned only limited
public distribution (often less than 1,000 copies) and could not afford the $3 per copy royalty.
20
Copyright Act of 1909, that the defendant “cannot expect to pay the same price in damages as it
might have paid after freely negotiated bargaining, or there would be no reason scrupulously to
obey the copyright law”); 4 Nimmer § 14.02[A] (applying this observation from Iowa State to
the computation of actual damages under the current Copyright Act).
With respect to the defendants’ profits, the Copyright Act provides the following
computational guidance:
The copyright owner is entitled to recover . . . any profits of the infringer that are
attributable to the infringement and are not taken into account in computing the
actual damages. In establishing the infringer’s profits, the copyright owner is
required to present proof only of the infringer’s gross revenue, and the infringer is
required to prove his or her deductible expenses and the elements of profit
attributable to factors other than the copyrighted work.
17 U.S.C. § 504(b) (1994). Montgomery provided evidence at trial, however, that went well
beyond his statutory obligation to present proof of the defendants’ gross revenue. Montgomery
initially provided a set of spreadsheets that summarized various business records of FLD
produced by the defendants. These spreadsheets showed that FLD’s total revenue from sales of
the four CD-ROM titles at issue was $255,162, and that FLD’s total profit (after expenses) on
these sales was $142,802.80. Later in the trial, Montgomery provided an alternative FLD total
profit estimate of $158,103 that was based upon profit information elicited from Noga on cross-
examination. By determining what percentage of files on each CD-ROM title could be viewed
using VPIC, Montgomery estimated that the amount of this profit allocable to VPIC was
$107,310.35. While the defendants did seek to discredit Montgomery’s profit allocation
estimate on cross-examination, they did not question Montgomery’s total profit figures and did
not offer any allocation estimate of their own. The jury, faced with multiple profit estimates of
over $100,000, thus had a sufficient evidentiary basis for its conclusion that Montgomery should
21
recover $36,100 as the defendants’ profits attributable to the infringement.22 The district court,
therefore, did not clearly abuse its discretion in denying the defendants’ motion for remittitur or
a new trial on the issue of damages.
C.
Turning to Montgomery’s claim under section 43(a) of the Lanham Act, 15 U.S.C. §
1125(a)(1)(A),23 the defendants contend that the district court committed several errors when it
denied their motion for judgment as a matter of law. Three of the defendants’ claims of error
merit discussion here.24 We consider these claims in light of the standards enunciated in the
22
As noted above, 17 U.S.C. § 504(b) (1994) allows recovery of a defendant’s profits
only if such profits “are not taken into account in computing the actual damages.” There is no
indication that the jury’s award of damages violated this prohibition of double recovery. As one
commentator has noted, “[e]ven when a plaintiff’s actual damages include lost profits, there may
be a recovery of defendant’s profits in an amount equal to (but not more than) the amount by
which defendant’s profits exceed plaintiff’s lost profits.” 4 Nimmer § 14.03, at 14-30. In this
case, the jury’s award of $43,900 in actual damages arguably represents the profits that
Montgomery lost because of the defendants’ failure to purchase a license to distribute VPIC.
Because Montgomery’s $107,310.35 estimate of the defendants’ profit allocable to VPIC
exceeded this actual damage award by $63,410.35, however, the jury’s award of $36,100 as the
defendants’ profits was permissible.
23
Section 43(a), as amended, provides in pertinent part:
(1) Any person who, on or in connection with any goods . . ., uses in commerce
any word, term, name, symbol, or device, . . . or any false designation of origin,
false or misleading description of fact, or false or misleading representation of
fact, which – (A) is likely to cause confusion, or to cause mistake, or to deceive as
to the affiliation, connection, or association of such person with another person,
or as to the origin, sponsorship, or approval of his or her goods, services, or
commercial activities by another person, . . . shall be liable in a civil action by any
person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a) (1994).
24
The three claims of error that we discuss above are not the only purported errors that
the defendants identify on appeal. They also argue, for example, that Montgomery’s Lanham
Act claim must fail because Montgomery never registered VPIC as a trademark. It is well
22
introduction to part II.A., supra, and conclude that the district court did not err in denying the
defendants’ motion.
1.
The defendants first contend that the district court was required, as a matter of law, to
grant their motion because the act of omitting a copyright notice alone cannot constitute a
violation of section 43(a). They argue that if such an omission was found to be actionable under
section 43(a), virtually every act of copyright infringement would also constitute a violation of
the Lanham Act. This argument, however, mischaracterizes the facts of the case before us.
While the defendants did activate a certain feature of VPIC that caused Montgomery’s copyright
notice not to appear when users viewed FLD’s CD-ROM discs, this was not the only act upon
which the defendants’ liability under section 43(a) could have been predicated. Unchallenged
testimony at trial established that each of FLD’s four CD-ROM titles that contained VPIC, when
loaded into a computer and used, would display a CD help menu in which FLD claimed
copyright. The copyright notice on one CD-ROM title, for example, stated that the help menu
was “copyrighted and owned” by FLD. As part of the help menu on each title, the defendants
included a description of how a user with a particular brand of computer video card could set up
a viewing program in order to display the picture files that were present on the disc. One such
settled, however, that registration is not a prerequisite to an action under section 43(a). See, e.g.,
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S. Ct. 2753, 2757, 120 L. Ed. 2d
615 (1992). As to the defendants’ other claims of error, we decline to consider them here
because they were not raised before the district court. See Caban-Wheeler v. Elsea, 71 F.3d 837,
842 (11th Cir. 1996); All Care Nursing Serv., Inc. v. Bethesda Mem’l Hosp., Inc., 887 F.2d
1535, 1538 n.3 (11th Cir. 1989).
23
description read, in pertinent part: “Included on this CD-ROM [disc] are two different [picture
file] viewing utilities, VPIC and CSHOW, each in its own directory. VPIC is the best one to use
. . . .” This description was not the only reference to VPIC that appeared on the defendants’ CD-
ROM titles; the names of several files present on each title also contained the term “VPIC.”
In considering whether Montgomery failed as a matter of law to establish a violation of
section 43(a) on these facts, we begin with Montgomery’s complaint. In Count Two,
Montgomery claimed that the defendants had violated section 43(a) in one of two ways: by
“pass[ing] off the VPIC software as their own property” or by “represent[ing] a connection,
license, association, or relationship between Plaintiff and Defendants.” These two theories of
liability correspond to two portions of section 43(a), which we will refer to as the “false
designation of origin” prong and the “mistaken affiliation” prong.25 The essence of
Montgomery’s argument for liability under these two prongs is that the defendants’ use of the
term “VPIC” as described above would likely confuse users of the CD-ROM discs; such users
25
See 15 U.S.C. § 1125(a)(1)(A) (1994) (the false designation of origin prong prescribes
liability for “[a]ny person who, on or in connection with any goods . . . , uses in commerce any . .
. false designation of origin . . . [which] is likely to cause confusion, or to cause mistake, or to
deceive . . . as to the origin, sponsorship, or approval of his or her goods . . . by another person . .
. .”); id. (the mistaken affiliation prong prescribes liability for “[a]ny person who, on or in
connection with any goods . . . , uses in commerce any word, term, name, symbol, or device, or
any combination thereof, . . . [which] is likely to cause confusion, or to cause mistake, or to
deceive as to the affiliation, connection, or association of such person with another person . . .
.”); cf. Jerome Gilson, Trademark Protection and Practice § 5.01[3], at 5-26 (39th rel. 1998)
(noting that confusion can be likely under section 43(a) on either “a source basis” or “an
associational basis”).
These two prongs are part of subsection (A) of section 1125(a)(1), which prescribes
liability “for infringement of even unregistered marks, names, and trade dress.” J. Thomas
McCarthy, McCarthy on Trademarks and Unfair Competition § 27:9 (4th ed. 1996). Subsection
(B), which is not at issue here, addresses false advertising.
24
would likely believe either that the defendants owned the VPIC viewing utility themselves or
that they had licensed it from its owner for commercial use. In either case, Montgomery argues,
the users would not know that their use of VPIC was in fact unauthorized and that they needed to
obtain a license from Montgomery for their own non-commercial use of his program in
connection with the defendants’ discs. We agree with Montgomery’s argument. Therefore, we
hold as a matter of law that Montgomery has stated a claim against the defendants under the false
designation of origin and mistaken affiliation prongs of section 43(a) of the Lanham Act.
With respect to the false designation of origin prong, we are mindful of recent Second
Circuit cases that address the question of whether a false copyright notice is actionable under
section 43(a). In Lipton v. Nature Co., 71 F.3d 464 (2d Cir. 1995), for example, the defendants
infringed the plaintiff’s copyright in a book of animal terms by creating a line of merchandise
that utilized the terms. The merchandise bore copyright notices in the names of both defendants.
The plaintiff brought a claim against the defendants for “reverse passing off”26 in violation of the
false designation of origin prong of section 43(a). The district court, concluding that the
copyright notices that the defendants placed on their infringing merchandise constituted false
designations of origin, granted summary judgment for the plaintiff on this claim. The court of
appeals reversed, “find[ing] that, as a matter of law, a false copyright notice alone cannot
constitute a false designation of origin within the meaning of § 43(a) of the Lanham Act.”
Lipton, 71 F.3d at 473; see also Softel, Inc. v. Dragon Med. & Scientific Communications, Inc.,
26
See Camp Creek Hospitality Inns, Inc. v. Sheraton Franchise Corp., 139 F.3d 1396,
1413 n.28 (11th Cir. 1998) (“Section 1125(a) prohibits both ‘passing off,’ where A sells its
product under B’s name, and ‘reverse passing off,’ where A sells B’s product under A’s name.”).
We discuss the meaning of “reverse passing off” at greater length in note 27, infra.
25
118 F.3d 955, 971 (2d Cir. 1997), cert. denied, — U.S. —, 118 S. Ct. 1300, 140 L. Ed. 2d 466(1998) (noting that “[w]ithout a requirement of ‘some additional misrepresentation of originality
beyond mere use of a copyright symbol, [plaintiffs] could convert all improper copyright claims
into Lanham Act violations’” (quoting EFS Mktg., Inc. v. Russ Berrie & Co., 76 F.3d 487, 492
(2d Cir. 1996))). The court attempted to distinguish the leading case of Eden Toys, Inc. v.
Florelee Undergarment Co., 697 F.2d 27 (2d Cir. 1982), which imposed liability under section
43(a) on a defendant who placed a copyright notice that read “Copr. Fred Original” on an
infringing product, on the ground that the false notice in that case also contained a representation
that the product was “original.” Lipton, 71 F.3d at 473-74; see also Banff Ltd. v. Express, Inc.,
921 F. Supp. 1065, 1072-73 (S.D.N.Y. 1995) (claiming that the Second Circuit’s decisions
establish that a false representation regarding the creator or originator of a product can be a false
designation of origin, but that a false copyright notice cannot).
We do not believe that Lipton forecloses Montgomery’s claim under the false designation
of origin prong of section 43(a). As an initial matter, we note that many courts have disagreed
with Lipton’s conclusion that the act of placing a copyright notice on an infringing product
cannot be a false designation of origin under section 43(a). See, e.g., Southern Bldg. Code
Congress Int’l, Inc. v. Florida Constr. Sch., Inc., 14 U.S.P.Q.2d 1846, 1848 (M.D. Fla. 1989);
Manufacturers Techs., Inc. v. Cams, Inc., 706 F. Supp. 984, 1004 (D. Conn. 1989); Sunset Lamp
Corp. v. Alsy Corp., 698 F. Supp. 1146, 1153 (S.D.N.Y. 1988); cf. Ladas v. Potpourri Press,
Inc., 846 F. Supp. 221, 224 (E.D.N.Y. 1994) (responding to claim that defendant had falsely
claimed copyright in giftware collections in violation of section 43(a) by directing defendant to
place non-removable stickers bearing plaintiff’s copyright notice on collection items). We need
26
not decide whether to adopt the holding of Lipton as the law of this circuit, however, because the
facts of this case are distinguishable from Lipton. The CD help menu that referred to VPIC was
not merely copyrighted by the defendants; they actually stated that they “owned” the menu. We
find that this claim of ownership was sufficient to allow Montgomery to state a claim against the
defendants under section 43(a) for false designation of origin.27 See Lipton, 71 F.3d at 474
27
We recognize that in false designation of origin claims of the “reverse passing off”
variety, the defendant often has merely removed the plaintiff’s mark from a product, added its
own mark, and sold the product without altering it in any other way. In this case, however, the
defendants incorporated Montgomery’s VPIC product into their own CD-ROM products. It
could be argued that, in light of Roho, Inc. v. Marquis, 902 F.2d 356 (5th Cir. 1990), this factual
distinction is relevant to our determination of whether Montgomery has stated a claim for false
designation of origin.
In Roho, the plaintiff manufactured specialized wheelchair cushions and hospital
mattresses. Its mattresses were constructed by assembling four wheelchair cushions together.
The defendants bought several of the plaintiff’s wheelchair cushions, removed the plaintiff’s
labels, fastened ten of the cushions together to make a mattress, and attached their own tag to the
mattress. The plaintiff sued the defendants for, inter alia, reverse passing off under the false
designation of origin prong of section 43(a). See id. at 357-58.
The court began its analysis by noting that the doctrine of reverse passing off is
applicable in situations where a defendant resells another person’s product that has been only
“slightly modified.” Finding that the essence of the plaintiff’s claim was that the defendant had
purchased one of the plaintiff’s products and sold it in modified form under a different label, the
court proceeded to compare the plaintiff’s cushions with the defendants’ mattress. It found that
the defendants had substantially modified the plaintiff’s cushions by attaching them together to
create a mattress; furthermore, the mattress and cushions were marketed to different consumers
for different purposes. Therefore, the court held that the defendants were not simply reselling a
relabeled and slightly modified version of the plaintiff’s product. Instead, the defendants’
mattress was a new product to which they could properly apply their own label. See id. at 360-
61.
We assume arguendo that Roho is applicable in our circuit. See J. Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition § 27:81 (4th ed. 1996) (discussing the level of
similarity between the defendant’s and plaintiff’s works that must be demonstrated in order to
bring a reverse passing off claim, including the Second Circuit’s requirement (which is similar to
Roho’s “slightly modified” requirement) of “substantial similarity” and the Ninth Circuit’s
requirement of “bodily appropriation”); but see Debs v. Meliopoulos, (N.D. Ga. 1991) (rejecting
any requirement of either bodily appropriation or substantial similarity and focusing instead on
likelihood of confusion). This assumption, however, does not affect our conclusion that
27
(quoting with approval from Cognotec Servs. Ltd. v. Morgan Guar. Trust Co., 862 F. Supp. 45,
51 (S.D.N.Y. 1994), which found that copyright infringement alone “does not amount to a . . .
false designation to establish a claim under § 43(a),” and noted that such a claim requires the
existence of “some affirmative act whereby [the defendant] falsely represented itself as the
owner of [the plaintiff’s computer program]”); see also Johnson v. Jones, 149 F.3d 494, 503 (6th
Cir. 1998) (finding that a defendant who removed the plaintiff’s name and seal from a set of
architectural plans and substituted his own had “represented [the plans] to be his own work” and
was thus liable for false designation of origin); United States Media Corp. v. Edde Entertainment
Inc., 40 U.S.P.Q.2d 1581, 1588 (S.D.N.Y. 1996) (noting that although a copyright notice is
insufficient under Lipton to support a claim of false designation of origin, “[s]uch a claim may
be supported . . . by further acts on the part of the infringer falsely representing itself as the
owner of the work”); cf. Jerome Gilson, Trademark Protection and Practice § 7.02[5], at 7-26 &
Montgomery has stated a claim for false designation of origin. The defendants in Roho escaped
liability not because they incorporated the plaintiff’s product into their own, but because this
incorporation substantially modified both the physical attributes and the purpose of the plaintiff’s
product. In this case, however, Montgomery created VPIC for the purpose of allowing computer
users to view picture files. Without reprogramming VPIC, the defendants incorporated it into
their CD-ROM discs for the purpose of allowing users to view the pictures on the discs. Courts
have not hesitated to find defendants liable for false designation of origin in such circumstances.
See, e.g., F.E.L. Publications, Ltd. v. Catholic Bishop of Chicago, 214 U.S.P.Q. 409, 416-17 (7th
Cir. 1982) (finding that defendant who excluded plaintiff’s name from custom-made hymnals
that incorporated plaintiff’s songs and bore the names of defendant’s parishes would be liable for
false designation of origin if the users of the hymnals were likely to be confused as to the origin
of the songs); Sega Enters. Ltd. v. MAPHIA, 948 F. Supp. 923, 938-39 (N.D. Cal. 1996);
Playboy Enters., Inc. v. Frena, 839 F. Supp. 1552, 1562 (M.D. Fla. 1993) (defendant who
substituted his own advertisement for plaintiff’s trademark on certain photographs and
incorporated these photographs into his computer bulletin board system held liable for false
designation of origin).
28
n.32 (39th rel. 1998) (citing cases for the proposition that the phrase “false designation of origin”
includes not only geographic origin but also “origin of source or manufacture”).
As to the mistaken affiliation prong, we are not the first court to use this prong in
connection with the false designation of origin prong to hold defendants liable for violating
section 43(a). Other courts have reached the same result on facts similar to those before us. In
Sega Entertainers Ltd. v. MAPHIA, 948 F. Supp. 923 (N.D. Cal. 1996), for example, the
defendant used the plaintiff’s mark to identify unauthorized copies of plaintiff’s video games that
the defendant had incorporated into his computer bulletin board system; the plaintiff’s mark also
appeared when a bulletin board user downloaded and played the counterfeit games. In ruling on
the plaintiff’s motion for summary judgment, the court found that the defendant had infringed
the plaintiff’s trademark and violated both the false designation of origin and mistaken affiliation
prongs of section 43(a). Id. at 937-39. In particular, the court concluded that the plaintiff had
established a likelihood of confusion because “[a]ny member of the public that logged onto [the
defendant’s bulletin board system] was likely to think that the trademark indicated that the
games were sponsored by or affiliated with Sega.” Id. at 938 (emphasis added).28
28
The court in Sega did not explicitly refer to the “false designation of origin prong” or
the “mistaken affiliation prong” in its discussion of section 43(a). Nonetheless, the passage
quoted above – which refers both to sponsorship (a part of the false designation of origin prong,
see supra note 25) and to mistaken affiliation – appears in the court’s analysis of the plaintiff’s
trademark infringement claim. In its subsequent examination of the plaintiff’s claim under
section 43(a), the court made the following statement: “For the same reasons set forth regarding
Sega’s trademark infringement claim, [the defendant’s] use of the Sega trademark is likely to be
confusing and to cause damage to Sega and, therefore, Sega is entitled to summary judgment
regarding [the defendant’s] liability under 15 U.S.C. § 1125(a).” Sega, 948 F. Supp. at 939.
29
In light of the above authorities and the well-established principle that section 43(a)
should be broadly construed,29 we conclude that the district court did not err in rejecting the
defendants’ contention that Montgomery failed to state a claim under section 43(a) as a matter of
law. The jury properly was allowed to determine whether users of the defendants’ CD-ROM
discs were likely to be confused, mistaken, or deceived regarding whether the defendants were
the source of VPIC or had a license to use it.
2.
The defendants’ two remaining contentions pertain to two of the elements that a plaintiff
is required to prove in order to establish a claim for infringement of an unregistered mark under
section 43(a) of the Lanham Act, namely: (1) that the plaintiff’s mark either is inherently
distinctive or has acquired distinctiveness through secondary meaning; and (2) likelihood of
confusion. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768-69, 112 S. Ct. 2753,
2757-58, 120 L. Ed. 2d 615 (1992); University of Ga. Athletic Ass’n v. Laite, 756 F.2d 1535,
1541 (11th Cir. 1985). The district court rejected the defendants’ claim that these elements had
not been proven, and the jury found them liable for violating section 43(a). Because it is for the
trier of fact to decide whether these elements have been proven, we will not reverse the jury’s
29
See, e.g., Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1383 (5th Cir. 1996); Thorn
v. Reliance Van Co., 736 F.2d 929, 932 n.5 (3d Cir. 1984) (mentioning “the widely-held view
that as a remedial statute, [section 43(a)] should be broadly construed”); F.E.L. Publications,
Ltd. v. Catholic Bishop of Chicago, 214 U.S.P.Q. 409, 416 (7th Cir. 1982); Frisch’s Restaurants,
Inc. v. Elby’s Big Boy of Steubenville, Inc., 670 F.2d 642, 651 (6th Cir. 1982); Warner Bros.,
Inc. v. Gay Toys, Inc., 658 F.2d 76, 79 (2d Cir. 1981) (noting that Ҥ 43(a) of the Lanham Act is
remedial in nature, and should be interpreted and applied broadly so as to effectuate its remedial
purpose”).
30
verdict absent clear error. See Bauer Lamp Co. v. Shaffer, 941 F.2d 1165, 1170 (11th Cir.
1991); Jellibeans, Inc. v. Skating Clubs of Ga., Inc., 716 F.2d 833, 839-840 & n.16 (11th Cir.
1983); Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1183 n.12, 1186 (5th Cir. 1980).30
On appeal, the defendants contend that Montgomery could not possibly have met the
distinctiveness requirement because he did not use the term “VPIC” as a mark in connection
with his computer program.31 It is true that the closing screen of version 4.3 of his program
(which did not appear when users viewed the pictures on the defendants’ discs) merely contained
the following statement: “Picture file viewer for VGA/EGA ver 4.3 (C) Copyright 1990, 1991
Bob Montgomery, All Rights Reserved . . . .” Other evidence at trial demonstrated, however,
that Montgomery distributed an additional computer file with version 4.3; this file, which was
entitled “VPIC User’s Manual,” repeatedly referred to the program as “VPIC.” Montgomery
testified that the term “VPIC,” which stands for “view pictures,” was also used to describe his
program in various print publications. In fact, Montgomery’s program was referred to as
“VPIC” when it was included in a 1992 compilation of shareware programs known as the
Dvorak Top Thirty. These uses of the term “VPIC” were obviously sufficient to catch the
attention of the defendants, who themselves referred to Montgomery’s program as “VPIC” in
30
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
October 1, 1981.
31
The defendants do not argue that the term “VPIC,” even if used as a mark, is not
inherently distinctive and has not acquired distinctiveness through secondary meaning. We
therefore need not move beyond the threshold issue of whether that term was used as a mark in
order to consider the distinctiveness of the term itself.
31
their help menu. Clearly, therefore, the jury had a sufficient evidentiary basis upon which to
conclude that Montgomery used the term “VPIC” as a mark.
The defendants also contend that Montgomery failed to demonstrate a likelihood of
confusion as to whether the defendants either were the source of VPIC or had a commercial
license to use it. Their first argument in support of this contention is that Montgomery could not
have shown any likelihood of pre-sale confusion32 by purchasers of the defendants’ CD-ROM
discs because the term “VPIC” does not appear on the packaging of any of the discs. This
argument misapprehends the nature of Montgomery’s claim for damages. Montgomery is not
claiming that the defendants used the term “VPIC” on their packaging in order to persuade
purchasers to buy their disc instead of his program; he is claiming that users of the defendants’
discs would likely be confused about either the source or the license status of VPIC and thus
would be unlikely to pay him the required licensing fee for their individual use of his program in
connection with the defendants’ discs. Such user confusion, if properly proven, is an appropriate
basis for a finding of likelihood of confusion under section 43(a).33
32
In United States v. Torkington, 812 F.2d 1347 (11th Cir. 1987), we recognized that
pre-sale confusion of actual purchasers is not the only type of confusion actionable under the
Lanham Act. Instead, the likely to confuse test is also satisfied “when potential purchasers of the
trademark holder’s products would be likely to be confused should they encounter the allegedly
counterfeit goods in a post-sale context – for example, in a direct purchaser’s possession.” Id. at
1352. In this case, however, neither the pre-sale confusion of actual purchasers nor the post-sale
confusion of potential purchasers is at issue; it is the post-sale confusion of actual purchasers –
that is, the confusion of users of the defendants’ discs (most of whom, presumably, previously
had purchased the discs they were using) – that concerns Montgomery.
33
In each of the three cases cited at the end of note 27, supra, the court recognized that
defendants may be held liable for user confusion. See F.E.L. Publications, 214 U.S.P.Q. at 416
(“By printing its own name on the hymnals and excluding F.E.L.’s, the parishes have used a
false designation of origin if the users of the hymnals are confused as to the origin of the
32
The defendants also argue, however, that Montgomery did not provide sufficient proof
regarding the likelihood of user confusion. They note that Montgomery offered no evidence at
trial to indicate that he had been contacted by any confused users who mistakenly thought that he
and the defendants were associated. In addition, they point to Montgomery’s own statement at
trial that users of one of the defendants’ CD-ROM titles “never would even know that VPIC was
on there.”
We observe that Montgomery made this statement as part of a discussion of the process
that a user would follow in order to view a picture file on one of the defendants’ discs.
Montgomery testified that when a user selected a picture file from the defendants’ CD menu, the
menu would utilize VPIC to display the file. Upon pressing a key, the user would be returned to
the CD menu and “never would even know that VPIC was on there.” Montgomery also testified,
however, that users who did not have one specific brand of video card in their computers would
need to visit the defendants’ CD help menu before engaging in this viewing process. As noted in
part II.C.1., supra, this help menu told users of other video cards how to set up one of two
available picture file viewing utilities – VPIC (“the best one to use”) or CSHOW – in order to
view the picture files that were present on the defendants’ discs. It is the references to VPIC that
appear in this help menu, along with the defendants’ omission of the VPIC copyright notice, that
Montgomery relies upon to establish a likelihood of user confusion. After placing
songs.”); Sega, 948 F. Supp. at 938 (holding that members of the public who used defendant’s
computer bulletin board system were likely to be confused regarding whether certain games
available therein were sponsored by or affiliated with the plaintiff); Playboy, 839 F. Supp. at
1554, 1561-62 (concluding that individuals who subscribed to defendant’s computer bulletin
board system and subsequently viewed certain images on the system were likely to be confused
as to whether plaintiff had sponsored, endorsed, or approved defendant’s use of its images).
33
Montgomery’s statement in this context, we conclude that it was not clear error for the jury to
find a likelihood of user confusion despite this statement.
With respect to the defendants’ argument that no confused users had contacted
Montgomery, we have held that a plaintiff is not required to provide evidence of actual
confusion in order to prove likelihood of confusion. See Bauer Lamp, 941 F.2d at 1171-72.
Instead, actual confusion is merely one of several factors that may be relevant in analyzing
whether there is a likelihood of confusion between two marks. See Jellibeans, 716 F.2d at 840(listing factors); John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 972 (11th Cir. 1983).
The defendants do not contend that any of the other factors point to the conclusion that users of
their CD-ROM discs were unlikely to be confused. We therefore cannot say, based merely on
the absence of evidence of actual confusion, that the jury clearly erred in finding a likelihood of
confusion.
D.
The defendants’ next claim of error relates to the district court’s decision to preclude one
of their witnesses from testifying as an expert. At trial, the defendants’ counsel attempted to
qualify Mr. Bahram Yusefzadeh as an expert witness who would provide testimony about
computer software licensing practices, the various types of software licenses available, and the
pricing of unlimited use licenses. On voir dire, Montgomery’s counsel established that
Yusefzadeh’s knowledge and experience pertained to the development, marketing, and licensing
of commercial software used by individual banks. Yusefzadeh had no experience either in
negotiating utility licenses for software that was distributed as “shareware” – such as VPIC – or
34
in marketing software through distributors under a “shrink-wrap” license – the method by which
the defendants marketed their four CD-ROM titles. Montgomery’s counsel then objected to the
admission of expert testimony by Yusefzadeh, and the district court sustained the objection on
two grounds. First, the court found that Yusefzadeh was not qualified as an expert because the
defendants had not shown that his experience with banking software was germane to the issues
involved in the case. Second, the court noted that the meaning of the terms used to describe the
various types of software licenses (e.g., single-user, multi-user, and unlimited use) would be self-
evident to the jury and thus did not require explanation by an expert.
Our consideration of the district court’s ruling is informed by Fed. R. Evid. 702, which
states:
If scientific, technical, or other specialized knowledge will assist the trier of fact
to understand the evidence or to determine a fact in issue, a witness qualified as
an expert by knowledge, skill, experience, training, or education, may testify
thereto in the form of an opinion or otherwise.
When recast using the language of Rule 702, the two grounds given by the district court for its
ruling essentially were (1) that Yusefzadeh was not “qualified as an expert by . . . experience” to
testify to “a fact in issue” in this case; and (2) that his testimony describing the various types of
software licenses would not “assist the trier of fact to understand the evidence.” The defendants
challenge the first of these grounds on appeal. They claim that the basic principles of
commercial software licensing also apply to shareware and utility licensing, and therefore
35
contend that Yusefzadeh’s commercial licensing experience was germane to the issue of
Montgomery’s damages.34
We review the district court’s ruling regarding Yusefzadeh’s qualifications under a
deferential standard. “A trial court has wide discretion in determining whether to exclude expert
testimony, and its action will be sustained unless manifestly erroneous.” United States v. Cross,
928 F.2d 1030, 1049 (11th Cir. 1991) (internal quotation marks omitted). We find no indication
of manifest error here. After considering the defendants’ assertion that Yusefzadeh’s experience
in the commercial software licensing field was also applicable in the shareware and utility
licensing field, the district court concluded that these two fields were “totally distinguishable.”
Because the defendants present no support for their assertion on appeal, we defer to the district
court’s conclusion.
E.
Finally, the defendants contend that the district court erred in awarding Montgomery
$142,289.26 in attorneys’ fees on his copyright and Lanham Act claims. Although the district
34
Specifically, the defendants argue that Yusefzadeh was qualified to provide the
following testimony relating to damages: (1) it is not unusual in the computer licensing business
for a licensee to negotiate an unlimited use license for a lump sum; and (2) the issuance of a
newer and improved version of a computer program renders older versions virtually worthless.
These two opinions appeared in the expert witness report prepared by Yusefzadeh and filed by
the defendants. See Fed. R. Civ. P. 26(a)(2).
36
court did not allocate a specific portion of its award to each claim,35 we review the defendants’
contentions regarding the propriety of a fee award under each claim in turn.
1.
In a civil copyright infringement action, 17 U.S.C. § 505 (1994) empowers the court to
award a “reasonable attorney’s fee to the prevailing party.” Such fees “are to be awarded . . .
only as a matter of the court’s discretion.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, 114 S.
Ct. 1023, 1033, 127 L. Ed. 2d 455 (1994). Where the record reveals that the district court
weighed the relevant factors36 and exercised its discretion, as it did here, we will not question the
court’s decision to grant or deny fees absent an abuse of that discretion. See Casella v. Morris,
820 F.2d 362, 366-67 (11th Cir. 1987).
The defendants contend that the district court abused its discretion in two ways when it
awarded attorneys’ fees to Montgomery on his copyright claim. First, they argue that because
Montgomery’s evidence of damages was based on unregistered versions of VPIC, an award of
attorneys’ fees was not permitted by 17 U.S.C. § 412 (1994). Section 412 states, in pertinent
35
The defendants requested that the court make such an allocation. While the court
deemed this request to be “logical and well-founded,” it was unable to make the allocation
because Montgomery’s attorneys neither divided their billed time between the claims nor
indicated whether they had spent substantially more time on one of the claims.
36
See Cable/Home Communication Corp. v. Network Prods., Inc., 902 F.2d 829, 853-54
(11th Cir. 1990); Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.
1974). We note that the jury in this case found that the defendants’ infringement was willful.
Such a finding of willful infringement, while it “does not compel a fee award, . . . is an
‘important factor’ in the district court’s ‘discretionary decisionmaking.’” Cable/Home
Communication, 902 F.2d at 854 (quoting Casella, 820 F.2d at 366).
37
part, that “no award . . . of attorney’s fees . . . shall be made for . . . any infringement of
copyright in [a work] commenced before the effective date of its registration . . . .” We reject
this argument for the reasons discussed in parts II.A.2. and II.B., supra.
The defendants’ second argument is that because Montgomery had a contingency fee
agreement with his attorneys, the district court should not have awarded attorneys’ fees based
upon the amount of time that Montgomery’s attorneys spent on the case. Such an award, in the
defendants’ view, impermissibly included a premium above the fees actually incurred by
Montgomery. While the defendants certainly are correct that an award of attorneys’ fees under
section 505 should not include an additional amount – in excess of the reasonable value of
services rendered – by way of penalty, see 4 Nimmer § 14.10[C], we are convinced that no such
amount was awarded here. As the district court recognized, the contingency fee agreement
between Montgomery and his attorneys provided that the attorneys were entitled to a certain
percentage of any “amount recovered” from the defendants. The term “amount recovered” was
defined to include “the total amount awarded by the Court or jury, together with all attorneys’
fees awarded by the Court, and shall include that amount of attorneys’ fees awarded as a
contingency fee multiplier.” Clearly, the terms of this agreement did not prevent the district
court from awarding Montgomery a reasonable amount in attorneys’ fees that was based on the
amount of time his attorneys spent on the case. We therefore conclude that the district court did
not abuse its discretion by awarding attorneys’ fees to Montgomery on his copyright claim.
2.
38
Turning to the issue of fee awards under the Lanham Act, section 35(a) provides that
“[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 15
U.S.C. § 1117(a) (1994). Such an award is available in actions under section 43(a) of the
Lanham Act, 15 U.S.C. § 1125(a), that involve unregistered trademarks. See Rickard v. Auto
Publisher, Inc., 735 F.2d 450, 458 (11th Cir. 1984). The jury found that Montgomery’s claim
under section 43(a) was an “exceptional” case, and the district court exercised its discretion to
award him attorneys’ fees on that claim.
On appeal, the defendants argue that Montgomery is not entitled to fees because he was
not the “prevailing party” on his Lanham Act claim. We have stated in a related context that the
prevailing party is “the party succeeding on a significant litigated issue that achieves some of the
benefits sought by that party in initiating the suit.” Cable/Home Communication Corp. v.
Network Prods., Inc., 902 F.2d 829, 853 (11th Cir. 1990) (applying this definition to an award of
attorneys’ fees in the copyright infringement context). “Where the [party’s] success on a legal
claim can be characterized as purely technical or de minimis, a district court would be justified
in concluding that [this definition] has not been satisfied.” Texas State Teachers Ass’n v.
Garland Indep. Sch. Dist., 489 U.S. 782, 792, 109 S. Ct. 1486, 1493-94, 103 L. Ed. 2d 866(1989).
The defendants contend that Montgomery’s success was de minimis because the jury
awarded him only $30 in damages on his Lanham Act claim. Montgomery responds that the jury
was instructed not to award him “a double recovery of the same damages” on his copyright and
Lanham Act claims. He argues, therefore, that the incremental $30 award is consistent with the
conclusion that he prevailed on his Lanham Act claim.
39
We need not focus solely on this damage award, however, in order to determine whether
Montgomery is entitled to attorneys’ fees. It is also important to note that the district court, at
Montgomery’s request, permanently enjoined the defendants from producing or transferring CD-
ROM discs containing VPIC under the relevant provisions of both the Lanham and Copyright
Acts. See 15 U.S.C. § 1116 (1994); 17 U.S.C. § 502 (1994). Montgomery’s success in
procuring this injunction achieved a significant benefit – namely, preventing the defendants from
falsely designating the origin of VPIC – that he sought in initiating this suit. Considering both
the damages and injunctive relief that he received on his Lanham Act claim, therefore, we
conclude that Montgomery was a “prevailing party” within the meaning of 15 U.S.C. §
1117(a).37 The district court did not err in awarding him attorneys’ fees on his Lanham Act
claim.
III.
For the foregoing reasons, the challenged rulings of the district court are AFFIRMED.
37
We express no opinion on the question of whether the incremental $30 damage award
alone would be sufficient to make Montgomery a “prevailing party.”
40