Evergreen Safety Council v. RSA Network Inc. , 697 F.3d 1221 ( 2012 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
EVERGREEN SAFETY COUNCIL, a 
Washington nonprofit corporation,
No. 11-35680
Plaintiff-Appellee,
v.  D.C. No.
2:09-cv-01643-RSM
RSA NETWORK INC., DBA Starfish
OPINION
Network, Inc., a Utah corporation,
Defendant-Appellant.

Appeal from the United States District Court
for the Western District of Washington
Ricardo S. Martinez, District Judge, Presiding
Argued and Submitted
July 12, 2012—Seattle, Washington
Filed October 17, 2012
Before: Mary M. Schroeder, Stephen Reinhardt, and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.
12547
12550 EVERGREEN SAFETY COUNCIL v. RSA NETWORK
COUNSEL
Blake Ostler (argued), Salt Lake City, Utah, John Whitaker,
Seattle, Washington, for the defendant-appellant.
EVERGREEN SAFETY COUNCIL v. RSA NETWORK 12551
David C. Spellman, Tiffany Scott Connors (argued), Seattle,
Washington, for the plaintiff-appellee.
OPINION
M. SMITH, Circuit Judge:
RSA Networks (RSA) appeals the district court’s grant of
summary judgment dismissal of RSA’s claim for copyright
infringement against Evergreen Safety Council (Evergreen)
on the ground of laches. RSA contends that the district court
erred in applying laches because Evergreen willfully infringed
upon its copyright. We reject this argument because Ever-
green acted under color of title and in good faith, and there-
fore did not willfully infringe upon RSA’s copyright. Danjaq
LLC v. Sony Corp., 263 F.3d 942, 959 (9th Cir. 2001). RSA
also contends the district court erred in dismissing the case
because RSA still retained claims for injunctive relief. We
likewise reject that argument because the alleged future
infringements named as the basis for the injunctive relief are
identical to the original infringements, and thus are barred by
laches as well. Danjaq, 263 F.3d at 960. Accordingly, we
affirm the district court’s summary judgment dismissal.
FACTUAL AND PROCEDURAL BACKGROUND
Evergreen is a Seattle-based non-profit that disseminates
safety and health information, and provides training on pilot
escort vehicles. Pilot escort vehicles generally position them-
selves directly in front of, or behind, an escorted oversized
vehicle. RSA is a Utah-based company that has been involved
in the pilot escort business for over 25 years. Randy Sorenson
(Sorenson) is the president of RSA. Both Evergreen and RSA
provide pilot escort vehicle operator training, and both parties
have published training manuals for use in conjunction with
mandatory state certification programs.
12552 EVERGREEN SAFETY COUNCIL v. RSA NETWORK
In 1991, Sorenson began working with a Utah state steering
committee to develop a certification program for pilot escort
vehicle training. By that time, Sorenson had commenced
drafting a manual, which was subsequently revised and
adopted in 1992 as the course syllabus in the Utah state certi-
fication program. In 1993, Sorenson registered his manual
with the U.S. Copyright Office. In 1996, Sorenson began
working with representatives of the State of Florida to modify
his Utah certified program for use in Florida. From 1996,
Sorenson worked as a consultant to various states, agencies
and organizations “to educate and promote standardization
within the pilot/escort industry.” Based upon his work as a
consultant, he indicated in the 1996 foreword to his revised
manual that he was then “working with Washington, Oregon,
Arizona, Idaho, North Carolina, and Kansas” to develop their
pilot escort vehicle training programs.
In 1998, the Washington State Department of Transporta-
tion decided to develop a pilot vehicle training program. Dur-
ing the summer of 1998, the chair of the Washington steering
committee proposed to “develop an outline based on Utah’s
[training manual].” The committee chair also inquired
whether Utah’s material was copyrighted.
In late 1998 and early 1999, Sorenson met with the Wash-
ington steering committee twice, including one meeting at
Evergreen’s office regarding the development of Washing-
ton’s training program. The State of Washington designated
Evergreen as the administrator of its pilot escort training pro-
gram. On May 12, 1999, Evergreen’s president sent Sorenson
a letter (Letter) enclosing Evergreen’s draft manual. The Let-
ter included a reference to a prior meeting with Sorenson and
a telephone call, in which Evergreen’s draft manual and
Washington’s training program were discussed. Among other
things, the Letter stated: “We will probably have a final ver-
sion [ready] to go after we meet this Friday with our task
group.” The Letter concluded: “Once you have had an oppor-
tunity to scan the material, we would appreciate any and all
EVERGREEN SAFETY COUNCIL v. RSA NETWORK 12553
observations, suggestions or comments. We look forward to
hearing from you.” Sorenson claimed that the Letter was not
opened by anyone when it was received by RSA in 1999, and
that RSA did not open the Letter, or become aware of its con-
tents, until 2010.
There is no record evidence that Evergreen ever heard from
Sorenson after it sent the Letter, and three months after Soren-
son received the Letter and draft manual, Evergreen printed
the final first edition of its manual. A second edition was
printed in December 1999. In 2003, Evergreen received a
copyright registration for a further revision entitled, “Ever-
green Safety Council’s certified pilot/escort vehicle operator
(P/EVO) course.”
Sorenson claims that in 2009, despite having advertised his
consultative role with multiple different states for over a
decade, he became aware that Oklahoma, North Carolina, and
Washington were infringing RSA’s copyrights. At that time,
RSA sent demand letters jointly to Evergreen and the Wash-
ington State Department of Transportation.
In 2009, Evergreen met with Sorenson and his attorney.
Sorenson told Evergreen that RSA had licensing agreements
with Florida, Oklahoma, and North Carolina. Evergreen later
determined that Sorenson’s Florida, Oklahoma, and North
Carolina licensing claims were false. Shortly after the meeting
with Sorenson and his attorney, Evergreen filed suit on
November 18, 2009, seeking declaratory judgment of non-
infringement regarding some of the artwork in its manual, and
asserting a fair use defense. Eleven months later, RSA sent a
letter identifying specific allegedly infringing items (primarily
diagrams) and demanding that Evergreen cease infringing. In
an attempt to ameliorate Sorenson’s concerns, Evergreen
stated that it would “deplete the remaining inventory of 4,000
manuals within eighteen months.”
A year after filing the suit, on November 18, 2010, RSA
asserted a counterclaim for copyright infringement. The coun-
12554 EVERGREEN SAFETY COUNCIL v. RSA NETWORK
terclaim included a willful infringement claim for enhanced
damages. In response to the counterclaim, Evergreen asserted
laches, license, acquiescence, fair use, equitable estoppel and
other affirmative defenses.
RSA moved for partial summary judgment asserting that
Evergreen had willfully infringed, and requesting an immedi-
ate injunction. The district court granted summary judgment
dismissal to Evergreen on the basis of laches. RSA subse-
quently moved for reconsideration on the grounds that the
evidence did not satisfy the required elements of laches on
summary judgment, that the willful infringement exception
prevented the application of laches, and that laches could not
bar RSA’s claim for prospective injunctive relief.
The district court ordered Evergreen to respond regarding
the claim for prospective relief. Evergreen responded and
declared that it was planning to publish a fifth edition of its
manual using scale model photographs instead of the disputed
diagrams, and further, that Evergreen was placing a sticker
over an allegedly infringing part of the remaining inventory
of its existing manual, thus eliminating any remaining similar-
ity between Evergreen’s manual and the works protected by
RSA’s copyright. The district court ultimately denied RSA’s
motion for reconsideration.
STANDARD OF REVIEW AND JURISDICTION
Summary judgment dismissal on the grounds of laches trig-
gers a hybrid abuse of discretion/clear error standard of review.1
1
There is a intracircuit split over the standard of review for the applica-
tion of laches. Danjaq, 263 F.3d at 952; see also Internet Specialties W.,
Inc. v. Milon-Digiorgio Enters., Inc., 559 F.3d 985, 990 (9th Cir. 2009);
Telink, Inc. v. United States, 24 F.3d 42, 47 & nn.10—11 (9th Cir. 1994)
(reviewing for abuse of discretion, but noting an intracircuit conflict
between the abuse of discretion and clearly erroneous standards). As was
the case in Danjaq, we need not resolve the intracircuit split here, because
we conclude that the district court’s ruling on laches must stand regardless
of whether it is reviewed for abuse of discretion, or for clear error. Dan-
jaq, 263 F.3d at 952.
EVERGREEN SAFETY COUNCIL v. RSA NETWORK 12555
Danjaq, 263 F.3d at 951. Whether a court inappropriately
resolved any material issues of disputed fact on summary
judgment is reviewed de novo. In re Beaty, 306 F.3d 914, 921
(9th Cir. 2002). Summary judgment may be affirmed on any
ground supported by the record. Video Software Dealers
Ass’n v. Schwarzenegger, 556 F.3d 950, 956 (9th Cir. 2009).
The district court had jurisdiction under 28 U.S.C. § 1331.
We have jurisdiction under 28 U.S.C. § 1291.
DISCUSSION
I. Laches
[1] Laches is an equitable defense that prevents a plaintiff,
who “with full knowledge of the facts, acquiesces in a trans-
action and sleeps upon his rights.” Danjaq, 263 F.3d at 950-
51 (internal citations and quotation marks omitted). In the
context of copyright:
It must be obvious to every one familiar with equita-
ble principles that it is inequitable for the owner of
a copyright, with full notice of an intended infringe-
ment, to stand inactive while the proposed infringer
spends large sums of money in its exploitation, and
to intervene only when his speculation has proved a
success. Delay under such circumstances allows the
owner to speculate without risk with the other’s
money; he cannot possibly lose, and he may win.
Danjaq, 263 F.3d at 951 (quoting Haas v. Leo Feist, Inc., 234
F. 105, 108 (S.D.N.Y. 1916)). To prove laches, the “defen-
dant must prove both an unreasonable delay by the plaintiff
and prejudice to itself.” Couveau v. Am. Airlines, Inc., 218
F.3d 1078, 1083 (9th Cir. 2000).
A. Unreasonable Delay and Undue Prejudice
[2] When evaluating the reasonableness of a delay, the
evaluation period begins when the plaintiff knew (or should
12556 EVERGREEN SAFETY COUNCIL v. RSA NETWORK
have known) of the allegedly infringing conduct, and ends
with the initiation of the lawsuit in which the defendant seeks
to invoke the laches defense. Kling v. Hallmark Cards, Inc.,
225 F.3d 1030, 1036 (9th Cir. 2000) (“any delay is to be mea-
sured from the time that the plaintiff knew or should have
known about the potential claim at issue”). In determining the
reasonableness of the delay, courts look to the cause of the
delay. Delay has been held permissible for a variety of rea-
sons, such as when delay is required by an exhaustion of rem-
edies through an administrative process, when it is “used to
evaluate and prepare a complicated claim,” or when its pur-
pose is “to determine whether the scope of proposed infringe-
ment will justify the cost of litigation.” Danjaq, 263 F.3d at
954 (internal citations and quotation marks omitted). In con-
trast, delay is impermissible when its purpose or effect is to
capitalize on the value of the alleged infringer’s labor by
determining whether the infringing conduct will be profitable.
Id.[3] Evergreen has demonstrated the requisite unreasonable
delay. The laches evaluation period in this case began to run
on the day when Sorenson received Evergreen’s draft manual
and the Letter, sent by Evergreen on May 12, 1999, because
that is the date on which Sorenson knew, or should have
known, of the allegedly infringing content. Danjaq, 263 F.3d
at 952. The fact that Sorenson had the Evergreen draft manual
in his possession in 1999, regardless of whether he actually
read it, demonstrates that he should have known of the
infringement approximately ten years before he commenced
his action in 2009. Id. The delay was unreasonable because it
involved no evaluation or investigation of the claim, or other
legitimate justification; RSA merely slept on its rights. Soren-
son cannot rely on the fact that he allegedly did not open the
Letter containing the draft manual until nearly twelve years
later. See generally Restatement (Second) of Contracts § 68
cmt. a (1981) (“What amounts to receipt in all these cases is
defined by the present Section, under which a written commu-
nication may be received though it is not read or though it
EVERGREEN SAFETY COUNCIL v. RSA NETWORK 12557
does not even reach the hands of the person to whom it is
addressed.”); see also Danjaq, 263 F.3d at 951 (“[I]t is ineq-
uitable for the owner of a copyright, with full notice of
intended infringement, to stand inactive while the proposed
infringer spends large sums of money in its exploitation, and
to intervene only when his speculation has proved a success.”)
(quoting Haas v. Leo Feist, Inc., 234 F.2d 105, 108 (S.D.N.Y.
1916)).
We recognize generally two forms of prejudice in a laches
context: evidentiary and expectations-based. Danjaq, 263
F.3d at 955. “Evidentiary prejudice includes such things as
lost, stale, or degraded evidence, or witnesses whose memo-
ries have faded, or who have died.” Id. Expectations-based
prejudice occurs when a defendant “took actions or suffered
consequences that it would not have, had the plaintiff brought
suit promptly.” Id.[4] The ten-year delay here caused evidentiary prejudice
because Evergreen’s executive officer, who was involved in
the negotiations with Sorenson, had died, and other involved
employees had relocated or forgotten about components of the
case (namely, important details concerning the development
of the draft manual with Sorenson’s assistance in 1998 and
1999). Likewise, Sorenson conceded that his own records
regarding his involvement with, and payment from, Evergreen
were destroyed in 2004. Sorenson’s business records were
also destroyed after his corporate bankruptcy, and he kept
minimal records after his personal bankruptcy. Accordingly,
Evergreen demonstrated significant evidentiary prejudice.
Danjaq, 263 F.3d at 955. Moreover, RSA’s delay caused
expectations-based prejudice because Evergreen likely would
not have produced or revised and reproduced the infringing
manual multiple times had RSA initiated its infringement
action in 1999. Accordingly, we hold that the district court did
not err in finding unreasonable delay and undue prejudice suf-
ficient for laches to apply.
12558 EVERGREEN SAFETY COUNCIL v. RSA NETWORK
B. Willfulness Exception
[5] The doctrine of laches does not apply in cases of will-
ful infringement. Danjaq, 263 F.3d at 956-57. Willfulness
occurs where an infringer acts “with knowledge that the
defendant’s conduct constitutes copyright infringement.” Id.
at 957 (internal citations and quotation marks omitted). Will-
fulness does not exist, however, where infringing works were
produced under color of title, such as a under a reasonable
belief that the infringer possesses a license or implied license.
See Danjaq, 263 F.3d at 959; see also Frank Music Corp. v.
Metro-Goldwin-Mayer, Inc., 772 F.2d 505, 515 (9th Cir.
1985) (finding no willfulness where defendants reasonably
could have believed that they had a valid license to use plain-
tiffs’ works). Continued use of a work even after one has been
notified of his or her alleged infringement does not constitute
willfulness so long as one believes reasonably, and in good
faith, that he or she is not infringing. See Princeton Univ.
Press v. Mich. Document Servs., 99 F.3d 1381, 1392 (6th Cir.
1996) (en banc), cert. denied, 520 U.S. 1156 (1997) (“[W]e
cannot say that the defendants’ belief that their copying con-
stituted fair use was so unreasonable as to bespeak willful-
ness.”); see also Danjaq, 263 F.3d at 959; 4 Melville B.
Nimmer & David Nimmer, Nimmer on Copyright § 14.04
(Matthew Bender rev. ed. 2012) ( “[O]ne who has been noti-
fied that his conduct constitutes copyright infringement, but
who reasonably and in good faith believes the contrary, is not
‘willful’ for these purposes.”) (footnotes omitted).
RSA contends that laches does not apply because Ever-
green willfully infringed upon its manual both before the
demand letter and after the demand letter. Specifically, RSA
contends that Evergreen willfully infringed its work before
the demand letter because Evergreen knew RSA’s work was
copyrighted. Likewise, RSA contends that Evergreen willfully
infringed after the demand letter because RSA put Evergreen
on notice of its claim. We disagree with both contentions.
EVERGREEN SAFETY COUNCIL v. RSA NETWORK 12559
[6] The record contains ample evidence, prior to the date
of the demand letter, of Evergreen’s good faith in producing
its training manual. In 1999, Evergreen invited Sorenson to
comment upon its draft manual before publication. That same
year, Evergreen paid Sorenson $300 in conjunction with his
consultations. Evergreen specifically identified and thanked
Sorenson for his assistance in the foreword to its manual.
Evergreen sent the manual and the Letter to Sorenson on May
12, 1999 asking him for any “observations, suggestions or
comments” on the draft manual, and indicating that the “final
version” of the manual would be ready to publish “after we
meet this Friday with our task group.” Sorenson repeatedly
advertised his involvement in the development of the Wash-
ington pilot escort training program. Sorenson also repeatedly
and publicly advertised his willingness to consult with and
assist states in developing pilot escort training programs. Such
evidence provides an ample basis for Evergreen’s reasonable
and good faith belief in the possible existence of an express
license, but at the very least, an implied license, and thus that
the publication of its manual did not constitute infringement.
See Asset Marketing Sys., Inc. v. Gagnon, 542 F.3d 748, 757
(9th Cir. 2008). Accordingly we hold that, as to the period
before RSA’s demand letter, Evergreen did not willfully
infringe upon RSA’s copyright because it acted under color of
title. Id.[7] As to the period after the demand letters, Evergreen
contends that in addition to having acted under color of title,
the ten diagrams at issue in RSA’s comparison constituted
“scenes a faire” of dangerous traffic situations in pilot escort
training and, accordingly, Evergreen’s use was non-infringing
because RSA’s diagrams were not protected by copyright. We
agree with Evergreen’s reasoning. Under the doctrine of
scenes a faire,2 we “will not protect a copyrighted work from
2
Scenes a faire has been literally translated to “scenes which ‘must’ be
done.” Nimmer on Copyright § 13.03 (citing Schwarz v. Universal Pic-
12560 EVERGREEN SAFETY COUNCIL v. RSA NETWORK
infringement if the expression embodied in the work necessar-
ily flows from a commonplace idea . . . .” Ets-Hokin v. Skyy
Spirits, Inc., 225 F.3d 1068, 1082 (9th Cir. 2000). Most basi-
cally, when similar features of a work are “as a practical mat-
ter indispensable, or at least standard, in the treatment of a
given idea, they are treated like ideas and are therefore not
protected by copyright.” Apple Computer Corp. v. Microsoft
Corp., 35 F.3d 1435, 1444 (9th Cir. 1994) (internal quotation
marks, modification, and citation omitted). We are persuaded
that Evergreen reasonably believed that the images in its
revised manual constituted scenes a faire of dangerous driv-
ing situations because of the limited ways to portray such
basic scenarios and the simplistic nature of RSA’s diagrams.
Ets-Hokin v. Skyy Spirits, Inc., 323 F.3d 763, 766 (9th Cir.
2003); see also Danjaq, 263 F.3d at 959; Princeton Univ.
Press, 99 F.3d at 1392. Accordingly, because Evergreen rea-
sonably believed that its use of the diagrams was non-
infringing, we hold that Evergreen did not willfully infringe
RSA’s copyright after its receipt of the demand letters.
[8] Ultimately, Sorenson’s conduct caused Evergreen to
believe that it was licensed to draw upon RSA’s works, and
Evergreen’s continuing good faith after the letters demon-
strates a lack of willfulness. See Asset Marketing Sys., Inc.,
542 F.3d at 757; see also Danjaq, 263 F.3d at 959 (“To hold
that willfulness must be inferred whenever an alleged
infringer uses an intellectual property in the face of disputed
title would turn every copyright claim into willful infringe-
ment and would improperly discourage many legitimate, good
faith transactions.”). Thus, because Evergreen acted under
color of title, and because any later infringing images are pro-
tures Co., 85 F. Supp. 270 (S.D. Cal. 1949)). In the context of copyright,
scenes a faire refers to the notion that less copyright protection is afforded
to “incidents, characters or settings which are as a practical matter indis-
pensable, or at least standard, in the treatment of a given topic.” Id. (citing
Atari, Inc. v. North Am. Philips Consumer Elecs. Corp., 672 F.2d 607, 616
(7th Cir. 1982) , cert. denied, 459 U.S. 880, (1982)).
EVERGREEN SAFETY COUNCIL v. RSA NETWORK 12561
tected by Evergreen’s reasonable belief in their fair use, we
hold that the district court did not err in holding that the will-
fulness exemption did not apply, and that laches barred RSA’s
copyright claim.
II. Prospective Injunctive Relief
[9] Laches does not per se bar claims for prospective
relief. Danjaq, 263 F.3d at 960. However, when the “feared
future infringements are identical to the alleged past infringe-
ments” and “stem[ ] from the same claimed original sin” (i.e.,
access to the materials), then laches may serve to bar prospec-
tive relief. Id.[10] Here, all of RSA’s claims stem from the same alleged
“original sin”—Evergreen copying portions of RSA’s 1996
manual without an express license. Moreover, some of the
most characteristic aspects of RSA’s manual, such as the
maintenance list which was originally copied in an earlier edi-
tion of Evergreen’s manual, is now available in the public
domain and no longer appears in Evergreen’s current manual.
Accordingly, we hold that the district court did not clearly err
in denying RSA’s motion for prospective relief because (1)
the similarities between Evergreen’s manuals and RSA’s orig-
inal 1996 manual have now been virtually eliminated; and (2)
to the extent that similarities still exist, they are protected by
Evergreen’s use of information in the public domain regard-
ing the standardization of pilot escort certification programs.
Accordingly, the district court did not err in denying prospec-
tive relief to RSA.
CONCLUSION
For the foregoing reasons, we AFFIRM the decision of the
district court.