Td Ameritrade, Inc. v. James Matthews

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 14 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
TD AMERITRADE, INC.; TD No. 21-35788
AMERITRADE HOLDING
CORPORATION; TD AMERITRADE IP D.C. No. 3:16-cv-00136-SLG
COMPANY, INC.; TD AMERITRADE
SERVICES COMPANY, INC.,
MEMORANDUM*
Plaintiffs-counter-
defendants-Appellees,
v.
JAMES RICHARD MATTHEWS,
Defendant-counter-claimant-
Appellant.
Appeal from the United States District Court
for the District of Alaska
Sharon L. Gleason, Chief District Judge, Presiding
Submitted June 8, 2022**
Anchorage, Alaska
Before: HURWITZ, BRESS, and H. THOMAS, Circuit Judges.
James Matthews opened an investment account with TD Ameritrade,
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
employing a platform allowing him to use the company’s “thinkScript”
programming code to aid in trading securities. He then registered a copyright for a
compilation work that included code from TD Ameritrade’s thinkScript User
Manual. Matthews then filed a nonconsensual lien against TD Ameritrade’s
property in the Anchorage Recording District.
TD Ameritrade sued Matthews seeking cancellation of the lien and injunctive
relief. Matthews asserted counterclaims for copyright infringement and alleged
violations of the Digital Millennium Copyright Act (“DMCA”). The district court
granted summary judgment to TD Ameritrade on the counterclaims, and
subsequently entered a final judgment in favor of TD Ameritrade on the complaint
and counterclaims. On appeal, Matthews challenges only the summary judgment on
the counterclaims. Reviewing de novo, see Gold Value Int’l Textile, Inc. v.
Sanctuary Clothing, LLC, 925 F.3d 1140, 1143 (9th Cir. 2019), we affirm.
1. A party alleging copyright infringement must “show ownership of the
allegedly infringed material.” A&M Recs., Inc. v. Napster, Inc., 239 F.3d 1004, 1013
(9th Cir. 2001); see also MDY Indus., LLC v. Blizzard Ent., Inc., 629 F.3d 928, 944
(9th Cir. 2010) (ownership of a copyright is also an element of a DMCA claim).
Ownership “vests initially in the author or authors of the work.” DC Comics v.
Towle, 802 F.3d 1012, 1023 (9th Cir. 2015) (quoting U.S. Auto Parts Network, Inc.
v. Parts Geek, LLC, 692 F.3d 1009, 1015 (9th Cir. 2012)). The copyright owner
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“has a number of exclusive rights, including the right ‘to prepare derivative works’
based on [the] original work.” Id. (quoting 17 U.S.C. § 106). Although copyright
registration “establishes a prima facie presumption of the validity of the copyright,”
N. Coast Indus. v. Jason Maxwell, Inc., 972 F.2d 1031, 1033 (9th Cir. 1992), that
presumption may be rebutted, see Desire, LLC v. Manna Textiles, Inc., 986 F.3d
1253, 1259 (9th Cir. 2021). TD Ameritrade did so here, presenting uncontroverted
evidence that it was the copyright owner of the thinkScript User Manual and the
code the Manual contained. It thus had the “exclusive right to prepare derivative
works.” VHT, Inc. v. Zillow Grp., Inc., 918 F.3d 723, 737 (9th Cir. 2019) (cleaned
up) (quoting 17 U.S.C. § 106(2)). Because Matthews admitted that he used portions
of the Manual to create his compilation work, the district court correctly found that
he could not claim copyright ownership of that work.
2. TD Ameritrade’s failure to register a copyright does not prevent it from
asserting its ownership rights in response to Matthews’s counterclaims. See 17
U.S.C. § 408(a) (“[R]egistration is not a condition of copyright protection.”). Nor
does Twin Books Corp. v. Walt Disney Co., 83 F.3d 1162 (9th Cir. 1996), upon which
Matthews relies, require TD Ameritrade to publish its materials with a copyright
notice to retain copyright protection. Twin Books interpreted the 1909 Copyright
Act. See 83 F.3d at 1165 (“It is undisputed that the 1909 Copyright Act, 17 U.S.C.
§§ 1, et seq. (superseded 1976) applies in this case.”). Copyright notice formalities
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were subsequently eliminated from federal copyright statutes. See Berne
Convention Implementation Act of 1988, Pub. L. No. 100-568, § 7, 102 Stat. 2853(1988) (amending 17 U.S.C. § 401); Golan v. Holder, 565 U.S. 302, 307 (2012)
(formalities are “no longer require[d] as prerequisites to copyright protection”).
3. The district court also did not err in its construction of the TD
Ameritrade Client Agreement. A client signing the agreement acknowledges that “I
will not . . . create derivative products from the Services.” The district court correctly
held that this plain language allows customers to use TD Ameritrade’s materials
while preserving TD Ameritrade’s exclusive rights to derivative works. See DC
Comics, 802 F.3d at 1023.
AFFIRMED.
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