Cooling Systems and Flexibles, Inc. v. Stuart Radiator, Inc.

• Decision Date: 27 November 1985
• Docket Number: No. 84-6080,84-6080
• Citation: 777 F.2d 485
• Parties: , 228 U.S.P.Q. 275, 1986 Copr.L.Dec. P 25,864 COOLING SYSTEMS AND FLEXIBLES, INC., a California corporation, Plaintiff- Appellant, v. STUART RADIATOR, INC., Stuart-Western, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 485

777 F.2d 485

54 USLW 2342, 228 U.S.P.Q. 275, 1986

Copr.L.Dec. P 25,864

COOLING SYSTEMS AND FLEXIBLES, INC., a California corporation, Plaintiff- Appellant, v. STUART RADIATOR, INC., Stuart-Western, Inc., Defendants-Appellees.

No. 84-6080.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Sept. 4, 1985.

Decided Nov. 27, 1985.

James M. Harris, Michael D. Howald, Melville B. Nimmer, Craig S. Bloomgarden, Sidley & Austin, Los Angeles, Cal., for plaintiff-appellant.

Philip W. Boesch, Jr., Kinsella, Boesch, Fujikawa & Towle, Los Angeles, Cal., for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before SNEED, NELSON, and NORRIS, Circuit Judges.

SNEED, Circuit Judge:

Cooling Systems and Flexibles, Inc. appeals the dismissal of its copyright infringement action, pursuant to Fed.R.Civ.P. 41(b), at the close of its presentation of evidence. It alleges that the district court erred in several respects: (1) by holding that a typographical error in its copyright registration certificate prevented its radiator catalog from receiving a valid registration; (2) by holding that the Manufacturing Clause, 17 U.S.C. Sec. 601 (1982), denied copyright protection to its catalog; (3) by holding that it omitted any notice of copyright from more than a few copies of its catalog, thus dedicating the material in that catalog to the public domain; (4) by holding that no substantial similarity existed between its catalog and the Stuart Radiator catalog; (5) by refusing to admit into evidence a second version of the allegedly infringing Stuart Radiator catalog, published and distributed after commencement of the case; and (6) by awarding attorneys' fees to Stuart Radiator without making a finding that the claim for infringement was frivolous or in bad faith. Both parties seek attorneys' fees on appeal. We affirm the district court's judgment.

I. FACTS AND PROCEEDINGS BELOW

Appellant Cooling Systems and Flexibles, Inc. (Cooling Systems) is a California corporation that sells replacement radiators for small and imported cars. In March 1981, it published a new edition of its illustrated radiator catalog and distributed the catalog to warehouse parts distributors and independent radiator repair shops. Appellee Stuart Radiator, Inc. (Stuart), is a California corporation that manufactures and sells radiator cores. In June 1981, Stuart published and distributed its first illustrated radiator catalog.

In March 1982, Cooling Systems filed a complaint in federal district court alleging that Stuart had infringed its copyright in the 1981 catalog. The district court dismissed the complaint for failure to state a claim. We reversed the dismissal, which we treated as a summary judgment, on the ground that Cooling Systems had raised triable issues of fact with respect to the issues of infringement and damages. See Cooling Systems & Flexibles, Inc. v. Stuart Radiator, Inc., 711 F.2d 1062 (9th Cir.1983) (mem.).

On remand, the district court dismissed the action after Cooling Systems presented its case.

II. DISCUSSION

A. Standards of Review.

Findings of fact made by a judge after a bench trial are subject to the "clearly erroneous" standard of review, Wilson v. United States, 645 F.2d 728, 730 (9th Cir.1981), even when those findings are composed of wholesale adoption of proposed findings submitted by counsel. Anderson v. City of Bessemer City, --- U.S. ----, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985). Findings on the issue of "substantial similarity" of expression, in particular, are findings of fact, and therefore are reviewable under the "clearly erroneous" standard. See Twentieth Century-Fox Film Corp. v. MCA, Inc., 715 F.2d 1327, 1328 n. 2 (9th Cir.1983); Sid & Marty Krofft Television Productions, Inc. v. McDonald's Corp., 562 F.2d 1157, 1166 (9th Cir.1977); International Luggage Registry v. Avery Products Corp., 541 F.2d 830, 831 (9th Cir.1976). Awards of attorneys' fees in copyright claims are reviewed under an "abuse of discretion" standard. Harris v. Emus Records Corp., 734 F.2d 1329, 1335 (9th Cir.1984); Russell v. Price, 612 F.2d 1123, 1132 (9th Cir.), cert. denied, Drebin v. Russell, 446 U.S. 952, 100 S.Ct. 2919, 64 L.Ed.2d 809 (1980).

B. The Typographical Error in the Registration Certificate Was Harmless.

17 U.S.C. Sec. 411(a) (1982) states that "no action for infringement of the copyright in any work shall be instituted until registration of the copyright claim has been made in accordance with this title." At trial, the district court noticed that Cooling Systems had registered Catalog 1-4 instead of the allegedly infringed Catalog 1-5. E.R. at 456. Rejecting Cooling Systems' argument that the error was merely typographical, and disregarding its claim that it had sent a correction to the Copyright Office, the court found that "[Cooling Systems] did not register a copyright on [Catalog 1-5] prior to commencing this action." E.R. at 28.

This finding is inconsistent with 17 U.S.C. Sec. 408(d) (1982). Absent fraud, "a misstatement or clerical error in the registration application ... will not invalidate the copyright nor render the registration certificate incapable of supporting an infringement action." 2 M. Nimmer, Nimmer on Copyright Sec. 7.20, at 7-147 (1985) [hereinafter cited as Nimmer ]; see Harris v. Emus Records Corp., 734 F.2d 1329, 1335 (9th Cir.1984); Original Appalachian Artworks, Inc. v. Toy Loft, Inc., 684 F.2d 821, 828 (11th Cir.1982); Baldwin Cooke Co. v. Keith Clark, Inc., 383 F.Supp. 650, 655 (N.D.Ill.), aff'd, 505 F.2d 1250 (7th Cir.1974), and supplemented by 420 F.Supp. 404 (N.D.Ill.1976).

Moreover, Stuart was not prejudiced by the typographical error in the registration certificate. Cooling Systems corrected the mistake by filing a supplementary application with the Copyright Office, detailing the change in the catalog's volume number. ¹ At trial, Cooling Systems attempted to introduce evidence of mailing the supplemental application and of including the requisite fees. E.R. at 63-64. Whether Cooling Systems' offer of proof of mailing included a proof of receipt by the Copyright Office is unclear. In any event, the district court should have admitted the evidence concerning the supplemental registration, even if the proof of receipt evidence was missing. Its failure to do so was error. Nonetheless, it was harmless. A remand would serve no useful purpose. The parties litigated the infringement issue as if catalog 1-5, and not catalog 1-4, possessed the copyright. See Cancellier v. Federated Department Stores, 672 F.2d 1312, 1316 (9th Cir.) (error affecting substantial rights of a party is grounds for reversal unless it was not prejudicial), cert. denied, 459 U.S. 859, 103 S.Ct. 131, 74 L.Ed.2d 113 (1982); see also Ommaya v. National Institutes of Health, 726 F.2d 827, 830 (D.C.Cir.1984).

C. The Error in Interpretation of the Manufacturing Clause Was Harmless.

Cooling Systems next argues that the district court erred by holding that the Manufacturing Clause, 17 U.S.C. Sec. 601(a) (1982), denied copyright protection to its catalog. 17 U.S.C. Sec. 601(a) prohibits, in certain specified instances, "the importation into or public distribution in the United States of copies of a work consisting preponderantly of nondramatic literary material that is in the English language ... unless the portions consisting of such material have been manufactured in the United States or Canada." ² The district court erred by holding that the Manufacturing Clause denied copyright protection to Cooling Systems' catalog. Section 601(d) does not invalidate protection for a work under this title; it merely gives an alleged infringer "a complete defense" with respect to all of "the nondramatic literary material comprised in [the] work." See 2 Nimmer, Sec. 7.22[C], at 7-162. ³ This error is immaterial because of a larger, but also immaterial, error of the district court. The larger error is that the Manufacturing Clause is not available to Stuart Radiator in any event. ⁴

In its application of the Manufacturing Clause, the district court found that the catalog was printed in Singapore, that it was a "work made for hire" as defined by Sec. 601 of the Copyright Act, and that it was "prepared for" Cooling Systems in California, as defined by the Manufacturing Clause. E.R. at 28. Section 601(b)(1) provides that the Manufacturing Clause does not apply where the author of a "substantial part" of an imported work is "neither a national nor a domiciliary of the United States." In the case of a "work made for hire," this "foreign author" exemption is available whenever "a substantial part of the work was prepared for an employer or other person who is not a national or domiciliary of the United States or a domestic corporation or enterprise." Thus, the nationality of the author of a "work made for hire" is that of the employer-corporation and not that of the individual employee-writer. 2 Nimmer, Sec. 7.22[A], at 7-157. Cooling Systems sought to use the foreign author exemption on the ground that Cooling Systems & Flexibles (PTE) Ltd. (Cooling Systems Singapore), which produced the catalog, was the "foreign author."

The district court rejected this view. As it saw it, the words "prepared for," as used in section 601(b)(1), refer to the nationality or domicile of the employer that actually uses the work, which in this case was Cooling Systems in California. Because Cooling Systems in California is a "domestic corporation," the foreign author exemption was unavailable. E.R. at 103.

Although the issue is not free from doubt, we believe that the words "prepared for" mean only that an employee created the work in the course of employment for his employer. The House Report on the Copyright Act of 1976 strongly suggests that "prepared for" a foreign corporation means that a work is created by an employee, in the course and scope of his employment, for a...