Suntrust Bank v. Houghton Mifflin Co.

• Decision Date: 10 October 2001
• Docket Number: No. 01-12200,Docket No. 01-00701-CV-CAP-1,01-12200
• Citation: 268 F.3d 1257
• Parties: (11th Cir. 2001) SUNTRUST BANK, as Trustee of the Stephen Mitchell trusts f.b.o. Eugene Muse Mitchell and Joseph Reynolds Mitchell, Plaintiff-Appellee, v. HOUGHTON MIFFLIN COMPANY, Defendant-Appellant. D. C
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1257

268 F.3d 1257 (11th Cir. 2001)

SUNTRUST BANK, as Trustee of the Stephen Mitchell trusts f.b.o. Eugene Muse Mitchell and Joseph Reynolds Mitchell, Plaintiff-Appellee, v. HOUGHTON MIFFLIN COMPANY, Defendant-Appellant.

No. 01-12200

D. C. Docket No. 01-00701-CV-CAP-1

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

October 10, 2001

Joseph M. Beck, Miles J. Alexander, Jerry Bailey Swann, Kilpatrick Stockton & Cody, Atlanta, Georgia, for Appellant.

Richard Kurnit, New York City, William B. Smith, Ralph R. Morrison, Anne Moody Johnson, Jones, Day, Reavis & Pogue, Atlanta, Georgia, for Appellee.

Leon Friedman, New York City, for Pen American Ctr., American Booksellers Foundation for Freedom of Exp., Freedom to Read Foundation, Washington Lawyers' for the Arts, The First Amendment Project and National Coalition Against Censorship, Amicus Curiae,.

E. Edward Bruce, Covington & Burling, Washington, DC, for Microsoft Corp., Amicus Curiae,.

Hollie Manheimer, Decatur, Georgia, for Amicus Curiae.

Appeal from the United States District Court for the Northern District of Georgia

Before BIRCH, MARCUS and WOOD^*, Circuit Judges.

BIRCH, Circuit Judge:

In this opinion, we decide whether publication of The Wind Done Gone ("TWDG"), a fictional work admittedly based on Margaret Mitchell's Gone With the Wind ("GWTW"), should be enjoined from publication based on alleged copyright violations. The district court granted a preliminary injunction against publication of TWDG because it found that Plaintiff-Appellee SunTrust Bank ("SunTrust") met the four-part test governing preliminary injunctions. We VACATE the injunction and REMAND for consideration of the remaining claims.

I. BACKGROUND

A. Procedural History

SunTrust is the trustee of the Mitchell Trust, which holds the copyright in GWTW. Since its publication in 1936, GWTW has become one of the best-selling books in the world, second in sales only to the Bible. The Mitchell Trust has actively managed the copyright, authorizing derivative works and a variety of commercial items. It has entered into a contract authorizing, under specified conditions, a second sequel to GWTW to be published by St. Martin's Press. The Mitchell Trust maintains the copyright in all of the derivative works as well. See 17 U.S.C. § 103.¹

Alice Randall, the author of TWDG, persuasively claims that her novel is a critique of GWTW's depiction of slavery and the Civil-War era American South. To this end, she appropriated the characters, plot and major scenes from GWTW into the first half of TWDG. According to SunTrust, TWDG "(1) explicitly refers to [GWTW] in its foreword; (2) copies core characters, character traits, and relationships from [GWTW]; (3) copies and summarizes famous scenes and other elements of the plot from [GWTW]; and (4) copies verbatim dialogues and descriptions from [GWTW]." SunTrust Bank v. Houghton Mifflin Co., 136 F. Supp. 2d 1357, 1364 (N.D.Ga. 2001), vacated, 252 F.3d 1165 (11th Cir. 2001). Defendant-Appellant Houghton Mifflin, the publisher of TWDG, does not contest the first three allegations,² but nonetheless argues that there is no substantial similarity between the two works or, in the alternative, that the doctrine of fair use protects TWDG because it is primarily a parody of GWTW.

After discovering the similarities between the books, SunTrust asked Houghton Mifflin to refrain from publication or distribution of TWDG, but Houghton Mifflin refused the request. Subsequently, SunTrust filed an action alleging copyright infringement, violation of the Lanham Act, and deceptive trade practices, and immediately filed a motion for a temporary restraining order and a preliminary injunction.

After a hearing, the district court granted the motion, preliminarily enjoining Houghton Mifflin from "further production, display, distribution, advertising, sale, or offer for sale of" TWDG. SunTrust Bank, 136 F. Supp. 2d at 1386. In a thorough opinion, the court found that "the defendant's publication and sale of [TWDG would] infringe the plaintiff's copyright interests as protected under the copyright laws." Id. Houghton Mifflin appealed. At oral argument, we issued an order vacating the injunction on the grounds that it was an unconstitutional prior restraint. SunTrust Bank v. Houghton Mifflin Co., 252 F. 3d 1165 (11th Cir. 2001). We now vacate that order and issue this more comprehensive opinion.

B. Standard of Review

"We review the district court's grant of a preliminary injunction for abuse of discretion." Warren Pub., Inc. v. Microdos Data Corp., 115 F.3d 1509, 1516 (11th Cir. 1997) (en banc). We review decisions of law de novo and findings of fact for clear error. Mitek Holdings, Inc. v. Arce Eng'g Co., Inc., 89 F.3d 1548, 1554 (11th Cir. 1996).

II. DISCUSSION

Our primary focus at this stage of the case is on the appropriateness of the injunctive relief granted by the district court. In our analysis, we must evaluate the merits of SunTrust's copyright infringement claim, including Houghton Mifflin's affirmative defense of fair use.³ As we assess the fair-use defense, we examine to what extent a critic may use a work to communicate her criticism of the work without infringing the copyright in that work. To approach these issues in the proper framework, we should initially review the history of the Constitution's Copyright Clause and understand its relationship to the First Amendment.

A. History and Development of the Copyright Clause

The Copyright Clause finds its roots in England, where, in 1710, the Statute of Anne "was designed to destroy the booksellers' monopoly of the booktrade and to prevent its recurrence." L. Ray Patterson, Understanding the Copyright Clause, 47 J. Copyright Soc'y USA 365, 379 (2000). This Parliamentary statute assigned copyright in books to authors, added a requirement that only a new work could be copyrighted, and limited the duration, which had been perpetual, to two fourteen-year terms. 8 Anne, C.19 (1710), reprinted in 8 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 7-5 (2001). It is clear that the goal of the Statute of Anne was to encourage creativity and ensure that the public would have free access to information by putting an end to "the continued use of copyright as a device of censorship." Patterson at 379.⁴ The Framers of the U.S. Constitution relied on this statute when drafting the Copyright Clause of our Constitution,⁵ which reads,

The Congress shall have Power . . . to promote the Progress of Science . . . by securing for limited Times to Authors . . . the exclusive Right to their respective Writings . . . .

U.S. Const. art. 1, § 8, cl. 8. Congress directly transferred the principles from the Statute of Anne into the copyright law of the United States in 1783, first through a recommendation to the states to enact similar copyright laws,⁶ and then in 1790, with the passage of the first American federal copyright statute.⁷

The Copyright Clause was intended "to be the engine of free expression." Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 558, 105 S. Ct. 2218, 2229 (1985). To that end, copyright laws have been enacted achieve the three main goals: the promotion of learning, the protection of the public domain, and the granting of an exclusive right to the author.

1. Promotion of Learning

In the United States, copyright has always been used to promote learning by guarding against censorship.⁸ Throughout the nineteenth century, the copyright in literature was limited to the right "to publish and vend books." Patterson, at 383. The term "copy" was interpreted literally; an author had the right only to prevent others from copying and selling her particular literary work. See Stowe v. Thomas, 23 F. Cas. 201 (C.C.E.D. Pa. 1853) (holding that a translation of Uncle Tom's Cabin into German was not a copyright infringement because it was not a copy of the work as it was published).⁹ This limited right ensured that a maximum number of new works would be created and published. It was not until the 1909 Act, which codified the concept of a derivative work, that an author's right to protect his original work against imitation was established. This change more closely represents current statutory copyright law and is consistent with copyright's constitutional mandate.

As a further protection of the public interest, until 1976, statutory copyright law required that a work be published before an author was entitled to a copyright in that work. Therefore, in order to have the sole right of publication for the statutory period, the author was first required to make the work available to the public. In 1976, copyright was extended to include any work "fixed in any tangible medium of expression" in order to adapt the law to technological advances. § 102(a). Thus, the publication requirement was removed, but the fair use right was codified to maintain the constitutionally mandated balance to ensure that the public has access to knowledge.

The Copyright Act promotes public access to knowledge because it provides an economic incentive for authors to publish books and disseminate ideas to the public. Harper & Row, 471 U.S. at 558, 105 S. Ct. at 2229 ("By establishing a marketable right to the use of one's expression, copyright supplies the economic incentive to create and disseminate ideas."). The Supreme Court has recognized that "[t]he monopoly created by copyright thus rewards the individual author in order to benefit the public." Id. at 546, 105 S. Ct. at 2223 (quoting Sony Corp. of America v. Univ. City Studios, Inc., 464 U.S. 417, 477, 104 S. Ct. 774, 807 (1984) (Blackmun, J.,dissenting)). Without the limited monopoly, authors would have little economic incentive to create and publish their work. Therefore, by providing this incentive, the copyright law promotes the public access to new ideas and concepts.

2. Protection of the Public Domain

The second goal of the Copyright Clause is to ensure...