510 F.3d 77 (1st Cir. 2007), 06-2339, Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. & Co. KG.

Docket Nº:06-2339.
Citation:510 F.3d 77, 85 U.S.P.Q.2d 1321
Party Name:CAMBRIDGE LITERARY PROPERTIES, LTD., Plaintiff, Appellant, v. W. GOEBEL PORZELLANFABRIK G.m.b.H. & CO. KG.; Goebel Art G.m.b.H., d/b/a Goebel of North America, Defendants, Appellees, Ulrich Stocke; Goebel Verwaltungs-Und; Beteiligungsgesellschaft G.m.b.H.; Wilhelm Goebel, Defendants.
Case Date:December 13, 2007
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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510 F.3d 77 (1st Cir. 2007)

85 U.S.P.Q.2d 1321



W. GOEBEL PORZELLANFABRIK G.m.b.H. & CO. KG.; Goebel Art G.m.b.H., d/b/a Goebel of North America, Defendants, Appellees,

Ulrich Stocke; Goebel Verwaltungs-Und; Beteiligungsgesellschaft G.m.b.H.; Wilhelm Goebel, Defendants.

No. 06-2339.

United States Court of Appeals, First Circuit

Dec. 13, 2007

Heard May 8, 2007.

Appeal from the United States District Court for the District of Massachusetts Hon. Nancy Gertner, U.S. District Judge.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Henry Herrmann, for appellant.

David P. Shouvlin with whom Porter, Wright, Morris & Arthur LLP, Joseph D. Steinfield, David E. Plotkin, and Prince, Lobel, Glovsky & Tye LLP were on brief for appellee.

Before LYNCH, Circuit Judge, CYR, Senior Circuit Judge, and HOWARD, Circuit Judge.

LYNCH, Circuit Judge.

The district court entered summary judgment for defendants due to plaintiff's failure to meet the Copyright Act's three-year statute of limitations in this dispute over profits from the sale of Hummel figurines and images. Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. & Co. Kg. (Cambridge II), 448 F.Supp.2d 244 (D. Mass. 2006). We affirm.

The key facts are set forth here and in our earlier opinion on a different issue in this case. Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. & Co. Kg. (Cambridge I), 295 F.3d 59, 61-62 (1st Cir. 2002). Plaintiff Cambridge Literary Properties, Ltd. seeks a share of the profits reaped by defendants W. Goebel Porzellanfabrik G.m.b.H. & Co. Kg. and Goebel Art G.m.b.H. (collectively, "Goebel") for the use of images taken from a German book published in 1934, Das Hummel-Buch, in which Cambridge asserts a copyright interest. Specifically, Cambridge, which acquired its purported "rights" from two sets of heirs of a putative joint author of the book, seeks an accounting and imposition of trust on past and future profits Goebel realizes from the distribution of figurines derived from the book, Goebel's use of the particular figure of "The Merry Wanderer" as its trademark or logo, the membership fees in the M. I. Hummel Club in the United States, and the like. Whether Cambridge in fact is a co-owner, through co-authorship, of any of its asserted rights is hotly contested by Goebel in its summary judgment papers and its brief on appeal. Indeed, Cambridge's complaint asserts facts acknowledging Goebel's claims of sole ownership.

The federal courts clearly have jurisdiction over this case. Cambridge chose to file the action in federal district court, and jurisdiction has never been at issue. We affirm the district court's grant of summary judgment, affirming the recommendation of the magistrate judge. Plaintiff's ownership of any interest, as we have said, is hotly disputed, and is an issue governed by the Copyright Act. There is no agreement or stipulation of ownership. Yet Cambridge did not seek an adjudication of its ownership rights before seeking whatever remedy it may have if it has any ownership rights. Thus, this case is not a dispute between admitted co-owners. Rather, the complaint attempts to evade the issue of whether Cambridge has any ownership rights by simply asserting that Cambridge is a co-owner and then alleging that Cambridge, as a co-owner, is entitled under state law to an accounting and equitable trust. As a result, Cambridge argues, the federal statute of limitations that applies to establishing copyright ownership under the Copyright Act does not apply; rather, the state statute of limitations for an accounting applies.

The accounting and equitable trust claims created by state law are premature. Such claims may well be governed

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by state law, but they are not ripe and necessarily rest upon plaintiff having met the antecedent showing that it has ownership rights under the Copyright Act. Plaintiff may not assert the state-law claims for accounting or equitable trust without establishing that it is a co-owner. Whether Cambridge is a co-owner in turn depends, on the facts of this case, 1 upon the federal Copyright Act. This in turn requires that Cambridge have asserted its ownership claims within that statute's limitations period. The congressional intent that the Act's limitations period applies to claims of ownership under the Act may not be undercut by Cambridge's subterfuge.2

Under the Act, the cause of action accrues when a plaintiff "knows or has reason to know of the act which is the basis of the claim." Santa-Rosa v. Combo Records, 471 F.3d 224, 227 (1st Cir. 2006), cert. denied, --- U.S. ----, 127 S.Ct. 2265, 167 L.Ed.2d 1094 (2007) (internal quotation omitted). We reject plaintiff's novel approach to accrual. Cambridge may not escape the limitations bar if the statute barred the claims of the heirs from which it acquired the "rights." Young v. Lepone, 305 F.3d 1, 17 (1st Cir. 2002). Cambridge is also barred if it failed to timely act within the limitations period after it acquired the rights. Here, Cambridge and the heirs, on the undisputed facts, were put on sufficient notice to result in accrual more than three years before plaintiff instituted suit. Further, there is no basis for equitable tolling of the three-year limitations period.


In describing the facts of the dispute, we make all reasonable inferences in favor of Cambridge, the party opposing summary judgment. T-Peg, Inc. v. Vermont Timber Works, Inc., 459 F.3d 97, 102 (1st Cir. 2006).

Berta Hummel, as a young woman in Germany in the early 20th century, had a talent for drawing images of children in folk dress. In 1931, Hummel took her vows as a member of the Congregation of Franciscan Sisters at the Convent of Siessen ("Convent") and became Sister Maria Innocentia Hummel. Sister Hummel and the Convent published some of Sister Hummel's drawings as postcards and devotional pictures.

In 1934, a German publishing company, Emil Fink Verlag ("Fink"), approached Sister Hummel and the Convent about publishing some of Sister Hummel's artworks in a book. In May of that year, Sister Hummel, the Superior of the Convent,

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and Fink entered into an agreement authorizing Fink to reproduce forty of Sister Hummel's works in Das Hummel-Buch. The contract specified that the book would include, in addition to the drawings, poems and other text. About six months later, Fink contracted with Margarete Seemann, a Viennese poet, for the production of an introduction and fifty poems for use in the book.

Fink first published Das Hummel-Buch in Germany in December 1934. Fink applied to the United States Copyright Office for a copyright in the book in June 1936. Fink's application lists Emil Fink Verlag as the "copyright owner," and Hummel and Seemann as "author[s] or translator[s]."

Back in Germany, Fink was not the only firm seeking to commercialize Sister Hummel's drawings. Franz Goebel, then the head of Goebel, also entered into a contract with Sister Hummel and the Convent in January 1935. In that contract, Sister Hummel and the Convent assigned to Goebel the exclusive right to manufacture and market porcelain figurines based on Sister Hummel's drawings. Goebel continues to produce its line of "M. I. Hummel figurines" to this day. Goebel Art, a wholly owned subsidiary of Goebel, acts as the exclusive distributor and licensing agent for Goebel's United States copyright interests derived from the 1935 contract. In addition to the sale of figurines, Goebel also profits from the Hummel copyrights through Goebel Art's "M. I. Hummel Club," which generates substantial income from membership fees.

In June 1962, Fink applied for a renewal copyright in "Das Hummel-Buch, by Berta Hummel . . . [preface and verses by] Margarete Seemann." The publishing house listed itself as "proprietor of copyright in a work made for hire." In 1971, Goebel purchased all of Fink's copyrights in Hummel-related works, including the American copyright in Das Hummel-Buch. That sale was also memorialized in documents filed with the Copyright Office.

Goebel was not always the sole American distributor of Hummel figurines. Until the mid-1990s, Goebel contracted with Schmid Brothers, Inc. ("Schmid") to distribute the figurines in the United States. Schmid and Goebel quarreled repeatedly over their business arrangement in the courts of Germany and the United States. Sometime in the late 1960s, an attorney named Henry Herrmann began working for Schmid on matters related to disputes with Goebel. By 1971, Herrmann had obtained for Schmid an assignment of copyrights from Sister Hummel's family; Sister Hummel had died in 1946. Herrmann also represented Schmid in a number of lawsuits pertaining to the Hummel rights. Herrman is the driving force behind Cambridge in the present dispute.

In 1992, during a lawsuit filed in the Eastern District of New York, Schmid and Goebel entered into a consent judgment that stated that the two parties owned "respective undivided one-half interests in the United States renewal copyright in [Das Hummel-Buch]." Herrmann executed the agreement on behalf of Schmid.

Schmid, which held interests in Das Hummel-Buch, filed for bankruptcy in 1993. Herrmann, as a creditor in the bankruptcy proceedings, filed a claim for over $10,000,000 based on a contingency fee agreement with his former client. Herrmann settled his claim for $3,750,000. Goebel, for its part, acquired Schmid's rights to the book in the wake of Schmid's bankruptcy. With that acquisition, Goebel's ownership interest in the United States copyright to Das Hummel-Buch appeared to be perfected.

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