Los Angeles News Service v. Reuters Television Intern., Ltd.
| Decision Date | 25 August 1998 |
| Docket Number | 97-55114,Nos. 97-55113,s. 97-55113 |
| Citation | 149 F.3d 987 |
| Parties | 1998 Copr.L.Dec. P 27,805, 47 U.S.P.Q.2d 1349, 26 Media L. Rep. 2001, 98 Cal. Daily Op. Serv. 5462, 98 Cal. Daily Op. Serv. 6601, 98 Cal. Daily Op. Serv. 7627, 98 Daily Journal D.A.R. 9139 LOS ANGELES NEWS SERVICE, Plaintiff-Appellant, v. REUTERS TELEVISION INTERNATIONAL, LIMITED; Visnews International (USA), Limited; Reuters America Holdings, Inc.; Reuters America, Inc., Defendants-Appellees. LA NEWS SERVICE, Plaintiff-Appellee, v. REUTERS TELEVISION INTERNATIONAL, LIMITED; Visnews International (USA), Limited; Reuters America Holdings, Inc.; Reuters America, Inc., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
William A. Bergen, Law Offices of William A. Bergen, Auburn, CA, for plaintiff/appellant/cross-appellee.
Louis P. Petrich, Leopold, Petrich & Smith, Los Angeles, CA, for defendants/appellees/cross-appellants.
Appeals from the United States District Court for the Central District of California; Kim McLane Wardlaw, District Judge, Presiding. D.C. No. CV-95-01073-KMW.
Before: CANBY and KLEINFELD, Circuit Judges, and SCHWARZER, * Senior District Judge.
On this appeal we must decide whether, under the Copyright Act, a plaintiff may recover actual damages accruing from the unauthorized exploitation abroad of copyrighted work infringed in the United States; whether defendants' exploitation of the work was protected as fair use; and whether the
district court erred in its award of statutory damages.
Los Angeles News (LANS) is an independent news organization which produces video and audio tape recordings of newsworthy events and licenses them for profit. During the April 1992 riots following the Rodney King verdict, LANS covered the events at Florence Avenue and Normandie Boulevard in Los Angeles from its helicopter, producing two videotapes: "The Beating of Reginald Denny" and "Beating of Man in White Panel Truck" (the works). LANS copyrighted these works and licensed them to National Broadcasting Company, Inc. (NBC), which used them on the Today show with the logo of KCOP, a Los Angeles station not affiliated with NBC, superimposed (known in the trade as the downstream). Under the agreement, LANS retained ownership of the works and the right to license them.
The Reuters defendants (Reuters Television International, Ltd., Reuters America Holdings, Inc., and Reuters America, Inc., collectively Reuters) are television news agencies that gather and provide audiovisual and other news material to their subscribers for an annual fee. Visnews International (USA), Ltd. (Visnews), a joint venture of Reuters Television Limited, NBC and the British Broadcasting Company, had a news supply agreement with NBC News Overseas. When NBC broadcast the Today show featuring the LANS footage to its affiliates, it simultaneously transmitted the show via fiber link to Visnews in New York. Visnews made a videotape copy of the works as broadcast and transmitted it to subscribers in Europe and Africa. It also transmitted copies of the videotape to the New York office of the European Broadcasting Union (EBU), which in turn made a videotape copy and transmitted it via satellite to Reuters' London branch, which provided copies to its subscribers.
LANS brought this action for copyright infringement against the Reuters defendants and Visnews. Defendants moved for summary judgment on several grounds. So far as relevant to this appeal, they contended that (1) extraterritorial infringement does not violate American copyright law, (2) the fair use doctrine precludes a finding of infringement, and (3) LANS had no evidence of actual damage. The district court granted defendants' motion with respect to extraterritorial infringement and the claim for actual damages. 1 It denied the motion with respect to the fair use defense and entered partial summary judgment for LANS determining that the defense did not shield defendants' actions. Following a bench trial on the remaining issues, the district court found that Visnews had infringed by making one copy of each videotape and contributing to the making by EBU of one copy of each tape, LANS failed to prove the infringement was willful, and defendants failed to prove that it was innocent. The court entered judgment for LANS for $60,000 in statutory damages based on the four domestic infringements by Visnews. 2 In a subsequent order, the court denied LANS's and Reuters' applications for costs and attorney's fees.
LANS appeals from the ruling barring extraterritorial damages and defendants cross-appeal from the ruling denying the fair use defense and from the damage award. Both appeal from the order denying attorney's fees and costs. We have jurisdiction pursuant to 28 U.S.C. § 1291.
It is settled that the Copyright Act does not apply extraterritorially. Subafilms, Ltd. v. MGM-Pathe Communications Co., 24 F.3d 1088, 1094 (9th Cir.1994) (en banc). For the Act to apply, "at least one alleged infringement must be completed entirely within the United States." Allarcom Pay Television Ltd. v. General Instrument Corp. The district court's ruling was premised on the assumption that LANS's claim was based on the transmissions from Visnews and EBU to Reuters. However, it also held that Visnews completed acts of infringement in the United States when it copied the works in New York and then transmitted them to EBU which also copied them in New York. Each act of copying constituted a completed act of infringement. See 17 U.S.C. § 106(1). It was only after these domestic acts of infringement had been completed that Visnews and EBU transmitted the works abroad.
69 F.3d 381, 387 (9th Cir.1995). The district court found that "any damages arising extraterritorially are the result of extraterritorial infringement." Reuters I, 942 F.Supp. at 1269. Relying on Allarcom, the court held that "[t]he transmissions from Visnews and [EBU] did not violate the Copyright Act.... Therefore, Defendants are not liable ... for damages arising extraterritorially." Id. at 1269. We review the district court's grant of partial summary judgment de novo. Amdahl Corp. v. Profit Freight Sys., Inc., 65 F.3d 144, 146 (9th Cir.1995)
This case then presents a situation different from that in Subafilms and Allarcom. In Subafilms, the allegedly infringing conduct consisted solely of authorization given within the United States for foreign distribution of infringing videocassettes. 24 F.3d at 1090 n. 3. Similarly, in Allarcom, the alleged infringement consisted either of authorization given in the United States for infringement in Canada or broadcasts of copyright material from the United States into Canada, with the infringement not completed until the signals were received in Canada. 69 F.3d at 387.
The issue before us-which the Subafilms court did not resolve-is whether LANS "may recover damages for international distribution of the [works] based on the theory that an act of direct infringement, in the form of a reproduction of the ... [works], took place in the United States." Subafilms, 24 F.3d at 1099; see also id. at 1094. While this circuit has not heretofore addressed the issue, the Second Circuit has done so in a line of cases beginning with Sheldon v. Metro-Goldwyn Pictures Corp., 106 F.2d 45, 52 (2d Cir.1939), aff'd, 309 U.S. 390, 60 S.Ct. 681, 84 L.Ed. 825 (1940). In Sheldon the court held, in an opinion by Judge Learned Hand, that plaintiff could recover the profits from exhibiting a motion picture abroad where the infringing copy had been made in the United States. As Judge Hand explained:
The [copyrighted film] negatives were "records" from which the work could be "reproduced", and it was a tort to make them in this country. The plaintiffs acquired an equitable interest in them as soon as they were made, which attached to any profits from their exploitation, whether in the form of money remitted to the United States, or of increase in the value of shares of foreign companies held by the defendants. We need not decide whether the law of those countries where the negatives were exploited, recognized the plaintiffs' equitable interest; we can assume arguendo that it did not, for, as soon as any of the profits so realized took the form of property whose situs was in the United States, our law seized upon them and impressed them with a constructive trust, whatever their form.
106 F.2d at 52. See also Update Art, Inc. v. Modiin Publ'g, Ltd., 843 F.2d 67, 73 (2d Cir.1988) (); Famous Music Corp. v. Seeco Records, Inc., 201 F.Supp. 560, 568-69 (S.D.N.Y.1961) (same). See also 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 14.05, at 14-96 (1996) (). Subafilms described these cases as being "based ... on the theory that the infringing use would have been actionable even if the subsequent foreign distribution LANS urges us to adopt the Second Circuit's rule because the unauthorized copying of its works in the United States enabled further exploitation abroad. While the extraterritorial damages resulted from Reuters's overseas dissemination of the works received by satellite transmissions from Visnews and EBU, those transmissions were made possible by the infringing acts of copying in New York. The satellite transmissions, thus, were merely a means of shipping the unlicensed footage abroad for further dissemination.
that stemmed from that use never took place." 24 F.3d at 1094. Recovery of damages arising from overseas infringing uses was allowed because the predicate act
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