Roy Export Co. Establishment of Vaduz, Liechtenstein v. Columbia Broadcasting System, Inc.

• Decision Date: 04 March 1982
• Docket Number: D,No. 13,13
• Citation: 672 F.2d 1095
• Parties: , 1982 Copr.L.Dec. P 25,371, 8 Media L. Rep. 1637 ROY EXPORT COMPANY ESTABLISHMENT OF VADUZ, LIECHTENSTEIN, et al., Plaintiffs-Appellees-Cross-Appellants, v. COLUMBIA BROADCASTING SYSTEM, INC., Defendant-Appellant-Cross-Appellee. ocket 81-7027.
• Court: U.S. Court of Appeals — Second Circuit

Page 1095

672 F.2d 1095

215 U.S.P.Q. 289, 1982 Copr.L.Dec. P 25,371,

8 Media L. Rep. 1637

ROY EXPORT COMPANY ESTABLISHMENT OF VADUZ, LIECHTENSTEIN, et al., Plaintiffs-Appellees-Cross-Appellants, v. COLUMBIA BROADCASTING SYSTEM, INC. Defendant-Appellant-Cross-Appellee.

No. 13, Docket 81-7027.

United States Court of Appeals Second Circuit.

Argued Sept. 21, 1981.

Decided March 4, 1982.

Carleton G. Eldridge, Jr., New York City (June A. Eichbaum, John M. Keene, III, Peter M. Nelson, Ronald E. Guttman, and Coudert Brothers, New York City, on the brief), for defendant-appellant-cross-appellee.

Stuart Robinowitz, New York City (Steven B. Rosenfeld, Mary B. Seyferth, Howard A. Smith, and Paul, Weiss, Rifkind, Wharton & Garrison, New York City, on the brief), for plaintiffs-appellees-cross-appellants.

Before NEWMAN and KEARSE, Circuit Judges, and DALY, ^* District Judge.

NEWMAN, Circuit Judge:

Although the 1976 Copyright Act, 17 U.S.C. app. §§ 101-810 (1976), prospectively ended the era of common-law copyright as of January 1, 1978, ¹ troublesome questions will continue to arise for some time concerning the availability of pre-1978 common law protection for intellectual property. ² Some of those questions are among the issues presented by this appeal from a judgment of the District Court for the Southern District of New York, awarding compensatory and punitive damages to plaintiffs-appellees Roy Export Co. and others ³ for statutory and common-law copyright infringement and unfair competition by defendant-appellant Columbia Broadcasting Systems, Inc. (CBS). The underlying action arose from CBS's 1977 network television broadcast of a film biography of Charlie Chaplin, which included a collection of film clips from six of Chaplin's motion pictures in which the plaintiffs hold exclusive rights. ⁴ On appeal, CBS primarily attacks the bases of those claims against it that are grounded in state law, arguing that the plaintiffs had no common-law copyright in any of the works at issue and that the plaintiffs' tort claim for unfair competition was preempted by the federal copyright statute. CBS also argues that the damages award was excessive and duplicative and that, in any event, its conduct was protected by the First Amendment. We reject all of these contentions and affirm the judgment of the District Court.

To understand the relationship among the several works involved in this controversy, it is necessary to trace the history of the parties' competing efforts to create a film memorial to Charlie Chaplin. In 1972, the Academy of Motion Picture Arts and Sciences ("AMPAS") asked Bert Schneider, who along with Mo Rothman acted as the plaintiffs' representative in all matters relevant to this case, to supervise the making of a tribute to Chaplin, in the form of highlights from his motion pictures, to be shown in connection with a proposed appearance by Chaplin at the 1972 Academy Awards ceremony. Schneider in turn secured the services of director Peter Bogdanovich and through Bogdanovich, of film editor Richard Patterson. Schneider, Bogdanovich, and Patterson then selected and edited a series of classic scenes from Chaplin's movies, planned the sequence and timing of the scenes, and produced the "Compilation," ⁵ a thirteen-minute film montage of the master's greatest hits. The Compilation was televised nationally by NBC as part of the 1972 Academy Awards, at which Chaplin received a special award. It was understood that AMPAS's right to use the Compilation was strictly limited to that one-time showing, and the plaintiffs have not authorized the showing of the Compilation since that date.

In 1973, CBS began work on a retrospective of Chaplin's life, intended for use as a film obituary when Chaplin died. CBS soon learned, however, that the plaintiffs held all rights in the films involved here and that, despite repeated requests, plaintiffs would not grant CBS permission to use the films. The plaintiffs explained their refusal by informing CBS that they had begun production of their own "definitive" Chaplin biography, "The Gentleman Tramp," and therefore would not relinquish their copyright advantage. Rebuffed, CBS prepared a "rough cut" of a Chaplin biography, consisting primarily of public domain footage. The plaintiffs meanwhile completed work on "The Gentleman Tramp," which included some of the same film segments collected in the Compilation but did not use the Compilation itself. The plaintiffs planned to license "The Gentleman Tramp" to theaters abroad and to television networks in the United States. Twice during 1976 and 1977, in fact, the plaintiffs attempted to sell CBS such a license. CBS did not purchase the license, content for the time being with its "rough cut."

Charlie Chaplin died on December 25, 1977. Although CBS had its "rough cut" biography ready for showing, the network elected not to use it, preferring instead to use a copy of the Compilation obtained from NBC. NBC had kept a videotape of the Compilation from its 1972 telecast of the Academy Awards and had provided CBS News with a copy of the videotape on the assurance that CBS would show only brief portions of the excerpted films and only on its regular nightly news program. The copy, however, appears to have found its way to Russell Bensley, director of the CBS Special Events Unit. Although Bensley knew of the plaintiffs' repeated refusals to grant CBS permission to use excerpts from the copyrighted films, and although Bensley was unable to reach Schneider or Rothman to make an eleventh-hour plea for reconsideration, CBS decided to put together a new version of a Chaplin biography, incorporating, with minor editing, the Compilation obtained from NBC. The newer version, heavily dependent on what CBS knew to be copyrighted material, was broadcast on December 26, 1977, in preference to the legally less vulnerable "rough cut."

The broadcast occasioned the plaintiffs' damage suit. They claimed (1) that the broadcast's use of the Chaplin film clips infringed their statutory copyrights in the films, (2) that the use of the clips in the particular form of the Compilation infringed a common-law copyright in the Compilation itself as an unpublished independent creation, and (3) that the broadcast competed unfairly with the plaintiffs' own Chaplin retrospective, "The Gentleman Tramp," whose marketability the plaintiffs had intended to protect with their copyrights in its constituent material. After a trial in September and October of 1979 before Judge Robert J. Ward in the Southern District of New York, the jury found CBS liable to the plaintiffs for $307,281 compensatory and $410,000 punitive damages. ⁶ CBS's post-trial motions were denied in a comprehensive opinion by Judge Morris E. Lasker, ⁷ who also granted the plaintiffs' cross-motion for an additional award of statutory damages in the amount of $5,000. Roy Export Co. v. CBS, 503 F.Supp. 1137 (S.D.N.Y.1980). This appeal followed.

A. The First Amendment

CBS first asserts a generalized First Amendment privilege as a bar to the plaintiffs' claims, arguing that a right to report newsworthy events such as Chaplin's death shields it from liability. CBS points out that the principal reason for Chaplin's fame is to be found in his films, and argues that it is therefore meaningless to attempt a full account of his life without making some use of the very things that make that life worth remembering. CBS claims a limited right to use the "gems" of Chaplin's motion pictures-specifically, those film clips collected in the Compilation-in order adequately to memorialize him at his death. In addition, CBS claims a similar right to use the particular form in which it broadcast the clips, i.e., the Compilation, instead of simply showing independently excerpted film segments. In CBS's view, the 1972 Academy Awards ceremony, at which the Compilation received its single public showing, was an "irreducible single news event" to which the showing of the Compilation was integral. The significance of the ceremony, CBS contends, was not simply that Chaplin appeared after a twenty-year exile provoked by Senator McCarthy's investigations, but that a collection of his work was shown, thereby bringing home to the American people both what they had been deprived of by McCarthyism and how ludicrous had been the attempt to find subversive political innuendo in Chaplin's films. CBS concludes that the plaintiffs' claims for infringement of the copyrights in the films and the Compilation must give way to an asserted First Amendment news-reporting privilege.

CBS's arguments are unpersuasive. It rests its theory on Professor Nimmer's hypothesis that someday, on some facts, there might be such an inseparability of an idea and the form of its expression that protecting free dissemination of the one would necessarily entail subordinating copyright in the other. See 1 M. Nimmer, Nimmer on Copyright § 1.10(C)(2) (1981) (hereafter "Nimmer "). Professor Nimmer suggests that the Vietnam War photographs of the My Lai massacre, or the Zapruder film of the Kennedy assassination, ⁸ might be among the rare instances in which "the visual impact of a graphic work made a unique contribution to an enlightened democratic dialogue," id. at 1-82 to -83, rendering the news photograph itself essential for understanding the event, and therefore precluding copyright protections.

No Circuit that has considered the question, however, has ever held that the First Amendment provides a privilege in the copyright field distinct from the accommodation embodied in the "fair use" doctrine. ⁹ See, e.g., Dallas Cowboys Cheerleaders, Inc. v. Scoreboard Posters, Inc., 600 F.2d 1184, 1188 (5th Cir. 1979); Walt Disney Productions v. Air Pirates, 581 F.2d 751, 758-59 (9th Cir. 1978), cert. denied, 439 U.S. 1132, 99 S.Ct. 1054, 59 L.Ed.2d 94 (1979); Wainwright Securities, Inc. v. Wall Street Transcript Corp., 558 F.2d 91, 95 (2d Cir. 1977), cert. denied, 434 U.S....