847 F.2d 412 (7th Cir. 1988), 87-2663, Hays v. Sony Corp. of America

Docket Nº:87-2663.
Citation:847 F.2d 412
Party Name:7 U.S.P.Q.2d 1043 Stephanie HAYS and Gail MacDonald, Plaintiffs-Appellants, v. SONY CORPORATION OF AMERICA, Defendant-Appellee.
Case Date:May 25, 1988
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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847 F.2d 412 (7th Cir. 1988)

7 U.S.P.Q.2d 1043

Stephanie HAYS and Gail MacDonald, Plaintiffs-Appellants,



No. 87-2663.

United States Court of Appeals, Seventh Circuit

May 25, 1988

Argued April 6, 1988.

As Amended June 22, 1988.

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Emmanuel F. Guyon, Streator, Ill., for plaintiffs-appellants.

John A. Heller, Sidley & Austin, Chicago, Ill., for defendant-appellee.

Before POSNER, FLAUM, and EASTERBROOK, Circuit Judges.

POSNER, Circuit Judge.

The appeal in this copyright suit brings before us a medley of questions involving jurisdiction, copyright, and sanctions. The plaintiffs, Stephanie Hays and Gail MacDonald, teach business courses at a public high school in Des Plaines, Illinois. In 1982 or 1983 they prepared a manual for their students on how to operate the school's DEC word processors, and distributed copies to students and to other faculty members. In 1984 the school district, having bought word processors from Sony Corporation of America (the defendant in this suit), gave Sony the plaintiffs' manual and asked Sony to modify it so that it could be used with Sony's word processors. This Sony proceeded to do, resulting in a manual very similar to--in many places a verbatim copy of--the plaintiff's manual. Sony did not charge the school district anything for preparing the manual, which was delivered to the school district in December 1984 and, sometime afterward, distributed to the students. Nor is there any evidence that Sony has sold or disseminated the manual elsewhere.

In February 1985 the plaintiffs, presumably spurred by knowledge of Sony's manual, registered their own manual with the Copyright Office, and in July they filed this lawsuit in federal district court. Count I charges a violation of common law (i.e., state) copyright, Count II a violation of statutory (i.e., federal) copyright. The complaint alleges that Sony "has made large profits by reason of appropriating to its own use Plaintiffs' workbook," and demands compensatory and punitive damages, an accounting for profits, an injunction, attorney's fees, and other relief.

On October 31, 1986, the district judge dismissed the action on the ground that the plaintiffs had failed to state a claim. Sony had already filed several motions for sanctions under Rule 11 of the Federal Rules of Civil Procedure, seeking reimbursement of some $47,000 in attorney's fees and related expenses, and the district judge had heard, but not decided, the motions several days before he dismissed the action. Several months later, on February 18, 1987, the judge awarded Sony $14,895.46 in sanctions against the plaintiffs' counsel, Emmanuel F. Guyon, but not against the plaintiffs. Within ten days Guyon filed a motion to vacate the judgment, and the judge denied the motion on September 8. On October 8, a notice of appeal was filed in the district court, stating "that STEPHANIE HAYS and GAIL McDONALD [sic], Plaintiffs above named, hereby appeals [sic] to the United States Court of Appeals for the Seventh Circuit from the Final Judgment entered September 8, 1987, and prior Orders entered October 29, 1986 and February 19, 1987."

The first question is whether the notice of appeal suffices to bring up to us either the judgment dismissing the action (the order of October 31 to which the notice presumably intended to refer) or the order of February 18 (not February 19) awarding sanctions against Guyon. We held in Exchange National Bank v. Daniels, 763 F.2d 286, 291-94, modified on other grounds, 768 F.2d 140 (7th Cir.1985), that a judgment disposing of a lawsuit on the merits must be appealed within the prescribed period (here 30 days--yet the notice of appeal was not filed until a year after the judgment dismissing the suit) even if a

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motion for attorney's fees is pending. The proceeding on attorney's fees is collateral; it does not affect the appealability of the judgment on the merits. The plaintiffs ask us to recognize an exception for a case such as this where the defendant has bombarded the district court with motions for sanctions, but we do not understand the logic of the exception or think the simple rule adopted in Daniels should be complicated by it. The Supreme Court has heard argument in a case in which another circuit followed Daniels. See Budinich v. Becton Dickinson & Co., 807 F.2d 155 (10th Cir.1986), cert. granted, --- U.S. ----, 108 S.Ct. 226, 98 L.Ed.2d 185 (1987). It would be presumptuous for us to forecast the Supreme Court's decision, and in the meantime we shall continue to follow Daniels.

The notice of appeal was timely with regard to the order of sanctions, because the motion to vacate that order, having been filed within ten days, tolled the time for appealing. See Fed.R.Civ.P. 59(e); Fed.R.App.P. 4(a)(4); Marine Bank v. Meat Counter, Inc., 826 F.2d 1577, 1579 (7th Cir.1987). However, although the sanctions were awarded against Mr. Guyon rather than his clients, the notice of appeal specifies them alone as the appellants. They could not appeal from the order of February 18, because it granted no relief against them. And he did not appeal on his own behalf, but only as their counsel--which was error. See Walter v. Fiorenzo, 840 F.2d 427, 433 n. 6 (7th Cir.1988). Rule 3(c) of the Federal Rules of Appellate Procedure requires that the notice of appeal specify the party taking the appeal, and while the last sentence of Rule 3(c) states that "an appeal shall not be dismissed for informality of form or title of the notice of appeal," the omission of the appellant's name cannot be viewed in that light.

Appeals have been dismissed for failure to name the appellant in the notice of appeal, and this is the appropriate course where the appellee might be misled by the omission. In G.E. Smith & Associates, Inc. v. Otis Elevator Co., 608 F.2d 126 (5th Cir.1979) (per curiam), for example, there were two plaintiffs, they had separate claims, both plaintiffs lost in the district court, only one was named in the notice of appeal, "and no other notice of any kind was ever given that [the other] intended to appeal," id. at 127. Bunch v. Bullard, 795 F.2d 384, 399 (5th Cir.1986), is even more extreme: two of fourteen plaintiffs were omitted not only from the notice of appeal but also from the brief in the court of appeals! Probably it should not have been considered a Rule 3(c) case at all.

Where there is no possibility that the appellant's violation of Rule 3(c) misled the appellee, however, the violation is harmless and forfeiture of the appeal an excessive sanction. See Fed.R.App.P. 3(c) and Note of Advisory Committee to 1979 Amendment; Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); United States v. Patel, 835 F.2d 708, 709-10 (7th Cir.1987); United States v. One 1977 Mercedes Benz, 708 F.2d 444, 451 (9th Cir.1983). A number of cases have allowed the omission of a party from a notice of appeal to be disregarded in these circumstances, see, e.g., Harrison v. United States, 715 F.2d 1311 (8th Cir.1983) (per curiam); Ayres v. Sears, Roebuck & Co., 789 F.2d 1173 (5th Cir.1986), although, as noted in Ayres, a minority of the circuits strictly require that every appellant be named in the notice of appeals and order the dismissal of any not named. See, e.g., Farley Transportation Co. v. Santa Fe Trail Transportation Co., 778 F.2d 1365, 1368-70 (9th Cir.1985). This court is on the other side of the divide, see Brubaker v. Board of Education, 502 F.2d 973, 983 n. 4 (7th Cir.1974), and there we shall remain. The requirement of naming every appellant is a good one; the question is the appropriate sanction for a violation of it. Trivial errors warrant trivial sanctions, not forfeiture of an appeal from a substantial judgment. Sony acknowledges that it was not misled by Guyon's error. Sony knew he was attempting to appeal from the sanctions imposed on February 18 as well as from the dismissal of the copyright suit.

Guyon's appeal from the judgment for sanctions against him is therefore properly before us; whether it has any merit depends on the reasonableness of his pressing the suit as far as he did.

The suit is a mixture of the frivolous and the nonfrivolous. The claim of

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infringement of a common law copyright is frivolous. Until the Copyright Act of 1976, this country had a dual system of property rights in expression. Until published, a work was protected by state common law principles; the author had a common law copyright. Upon publication, the author's common law copyright terminated; to preserve his property right, he had to obtain a federal copyright. In order to simplify the law without diminishing the rights of authors, the 1976 Act abolished common law copyright as of January 1, 1978, see Sec. 301(a), but made federal copyright attach at the moment of creation, not publication, of any work within the scope of the statute. See 17 U.S.C. Sec. 302(a). Hays and MacDonald wrote their manual long after the abolition of common law copyright.

Guyon argues (for the first time on appeal, and in the face of his clients' contrary affidavits) that though not actually written until 1982, the manual incorporated materials created in the early 1970s, not published, and therefore covered by common law copyright. This argument is irrelevant, as well as untimely and factually unsupported. The statute explicitly abolishes common law copyright as of January 1, 1978, whether the work was created before or after that date. See Sec. 301(a). It is true that "any cause of action arising from undertakings commenced before January 1, 1978," survives, Sec. 301(b)(2), but this means only that if Sony had violated the plaintiffs' common law rights before 1978 their cause of action would have survived. E.g., Mention v. Gessell, 714 F.2d 87, 90 (9th Cir.1983). By the time Sony commenced the activities that are alleged to have...

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