903 F.2d 1486 (11th Cir. 1990), 88-5108, M.G.B. Homes, Inc. v. Ameron Homes, Inc.

Docket Nº:88-5108.
Citation:903 F.2d 1486
Party Name:15 U.S.P.Q.2d 1282 M.G.B. HOMES, INC., Plaintiff-Appellee, v. AMERON HOMES, INC., and Daniel James Brognano, Defendants-Appellants, Rick Brognano and Richard Patton, Defendants.
Case Date:June 25, 1990
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

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903 F.2d 1486 (11th Cir. 1990)

15 U.S.P.Q.2d 1282

M.G.B. HOMES, INC., Plaintiff-Appellee,


AMERON HOMES, INC., and Daniel James Brognano, Defendants-Appellants,

Rick Brognano and Richard Patton, Defendants.

No. 88-5108.

United States Court of Appeals, Eleventh Circuit

June 25, 1990

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John Cyril Malloy, James E. Wetterling, Jr., Jennie S. Malloy, Miami, Fla., for defendants-appellants.

Eugene F. Malin, Kevin P. Crosby, Ft. Lauderdale, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before TJOFLAT, Chief Judge, JOHNSON, Circuit Judge, and BROWN, 1 Senior Circuit Judge.

JOHN R. BROWN, Senior Circuit Judge:

MGB Homes, Inc. (MGB), in its initial complaint, alleged that Ameron Homes, Inc. and its President Daniel J. Brognano (Ameron) copied the floorplan of MGB's "Islander II" home from a copyrighted advertising flyer. MGB alleged copyright infringement in violation of the Copyright Act of 1976, 17 U.S.C. Sec. 501, et seq., and violations of the Florida common law of unfair competition and the Florida Deceptive and Unfair Trade Practices Act (DTPA), Fla.Stat.Annot. Sec. 501.201, et seq. (1973). The trial court found in favor of MGB on all counts and awarded actual damages under the Copyright Act of $1,206.99. It also awarded $5,000.00 in punitive damages and $15,000.00 in attorneys' fees for "unfair competition" and violations of the Florida DTPA.

We reverse the trial court on each of these claims leading to reversal of all of the monetary awards.

The House that Ameron Built

With one important exception, we find that the trial court was not clearly erroneous in its findings of facts below and thus adopt those findings for purposes of this appeal. 2

MGB and Ameron are competing home builders in the town of Sebastian, Florida. The principals of both MGB and Ameron, Ballough and Brognano respectively, were once shareholders and controllers of Ameron.

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In this action, MGB claims that Ameron copied one of its floor plans--for an "Islander II" home--which was registered with the Copyright Office. The plan appeared on an advertising flyer prepared by Unlimited Drafting Services, Inc. (Unlimited), along with an artist's rendition of the outside of the home and some text about the home. The brochure was labelled a "home drawing" and was classified among the "Works of the Visual Arts."

MGB claims that the floor plan depicted on that advertising brochure and the measurements given thereon were used by Ameron's draftsman to make the architectural drawings of a home Ameron built for Mr. and Mrs. Mark Stern. 3 Ameron's Brognano denied this contention and testified that he had actually physically measured and sketched a home like the "Islander II" model and that his draftsman had drawn the Sterns' house plans from that. This testimony was discredited by Brognano's son. The son's testimony was in turn clouded by the fact that he had just previously received a $1,500.00 gift from the president of MGB, Mr. Ballough.

In light of this testimony, the trial court found that Brognano attempted to mislead the court by fabricating a story about sketching and measuring an actual home. It found that "Ameron Homes, Inc. did appropriate and use the copyrighted floor plan of plaintiff [MGB]." (R. 96).

MGB admitted that the actual architectural plans for the "Islander II" were never registered with the Copyright Office although they do bear a copyright notice. Only the advertising flyers were registered.

Ameron had access to the advertising flyers for the "Islander II" which were available in the model home for prospective customers. Ameron constructed a home for the Sterns which has a floor plan substantially similar to the "Islander II." The differences are insignificant. The Sterns' floor plan was copied from the advertising flyer for the "Islander II" home.

A Well-Built Plan?

The Copyright Act provides 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.

17 U.S.C. Sec. 411(a) (West Supp.1990). The registration requirement is a jurisdictional prerequisite to an infringement suit. 4

The existence of federal jurisdiction was strongly debated in this case. MGB filed its original application for copyright

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registration on May 5, 1986. That registration had not issued when, on July 3, 1986, MGB filed its original verified complaint asserting that its copyright was registered. On July 11, 1986, the court denied MGB's motion for a preliminary injunction and dismissed the entire case citing MGB's failure to satisfy the condition precedent of having registered its copyright before initiating the infringement action. After this dismissal, MGB filed an amended copyright registration application. At the request or suggestion of the Copyright Office, it changed forms (from TX--"textual" to VA--"visual arts") and the designation of the work (from "home plans" to "house drawings"). The certificate of registration was issued for this new submission on July 28, 1986. On the same day, MGB moved to amend its complaint. Although challenged by Ameron on jurisdictional grounds, the trial court allowed the amendment and the case was set for trial.

When the trial court initially dismissed MGB's complaint, it was without prejudice to "file a new complaint for copyright infringement" once the registration was obtained. (R. 20). In light of this order, the filing of a new lawsuit would ordinarily have been the proper way for MGB to proceed once it received the registration certificate. Because the trial court had dismissed the suit for lack of jurisdiction, it was, at most, technically without jurisdiction to entertain MGB's motion to amend its complaint. However, "[i]t is too late in the day and entirely contrary to the spirit of the Federal Rules of Civil Procedure for decisions on the merits to be avoided on the basis of such mere technicalities." Foman v. Davis, 371 U.S. 178, 181, 83 S.Ct. 227, 230, 9 L.Ed.2d 222, 225 (1962).

F.R.Civ.P. 61 strongly supports our decision to proceed.

No error in either the admission or the exclusion of evidence and no error or defect in any ruling or order or in anything done or omitted by the court or by any of the parties is ground for granting a new trial or for setting aside a verdict or for vacating, modifying or otherwise disturbing a judgment or order, unless refusal to take such action appears to the court inconsistent with substantial justice. The court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties.

Congress has also commanded that on the hearing of any appeal, "... the court shall give judgment ... without regard to errors or defects which do not affect the substantial rights of the parties." 28 U.S.C. Sec. 2111.

The amended complaint submitted by MGB contained all of the required allegations. On its face it asserted that the trial court had jurisdiction over the new infringement action. Except for the technical distinction between filing a new complaint and filing an amended complaint, the case would have been properly filed. 5 Ameron was not prejudiced by this error. We therefore hold that we have jurisdiction over this appeal and we will reach the merits. 6

A Blueprint of Copyright Law

The primary question raised by this appeal is whether MGB is an "owner" of the

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copyright in the advertising flyer. Under the Copyright Act of 1976, ownership of a copyright is determined as follows:

(a) Initial Ownership.--Copyright in a work protected under this title vests initially in the author or authors of the work. The authors of a joint work are coowners of copyright in the work.

b) Works Made for Hire.--In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.

17 U.S.C. Sec. 201 (West 1977). Section 101 defines a work made for hire as:

(1) a work prepared by an employee within the scope of his or her employment; or

2) a work specially ordered or commissioned for use [a] as a contribution to a collected work, [b] as part of a motion picture or other audiovisual work, [c] as a translation, [d] as a supplementary work, [e] as a compilation, [f] as an instructional text, [g] as a test, [h] as answer material for a test, or [i] as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire....

In its copyright application, MGB identified itself as a "work-for-hire" author of the advertising flyer depicting the "Islander II" floor plan. Ameron asserted, as a complete defense to the infringement claim against it, that MGB is not a valid copyright owner under this doctrine. 7

First, we hold that Ameron does have the right to assert this defense. It is not unheard of, as MGB asserts, for the "work-for-hire" issue to arise "as a defensive tactic adopted by a third-party infringer to dispute the validity of the plaintiff's copyright." Easter Seal Society for Crippled Children and Adults of Louisiana, Inc. v. Playboy Enterprises, 815 F.2d 323, 333 (5th Cir.1987), cert. denied, 485 U.S. 981, 108 S.Ct. 1280, 99 L.Ed.2d 491 (1988). 8 As that court pointed out, and we adopt, this defense gives the putative infringer, rather than the creator of the work, the benefits of finding a work was not a "work-for-hire." Id.

Under the Copyright Act of 1909, the "work-for-hire" doctrine created a rebuttable presumption of authorship in the employer. See Murray v. Gelderman, 566 F.2d 1307, 1309 (5th Cir.1978) (citations omitted). 9 The...

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