Mid America Title Co. v. Kirk

• Decision Date: 28 May 1993
• Docket Number: No. 91-3896,91-3896
• Parties: 1993 Copr.L.Dec. P 27,083, 25 Fed.R.Serv.3d 572, 26 U.S.P.Q.2d 1538 MID AMERICA TITLE COMPANY, Plaintiff-Appellant, v. James F. KIRK, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 417

991 F.2d 417

1993 Copr.L.Dec. P 27,083, 25 Fed.R.Serv.3d 572,

26 U.S.P.Q.2d 1538

MID AMERICA TITLE COMPANY, Plaintiff-Appellant, v. James F. KIRK, Defendant-Appellee.

No. 91-3896.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 9, 1992.

Decided April 16, 1993.

Rehearing and Rehearing En Banc Denied May 28, 1993.

Alan L. Barry (argued), Robert E. Wagner, James J. Jagoda, Wallenstein, Wagner & Hattis, Chicago, IL, Amy L.H. Rockwell, Baxter Travenol Laboratories, Inc., Deerfield, IL, for plaintiff-appellant.

Joshua G. Vincent (argued), Thomas L. Browne, D. Kendall Griffith, Thomas H. James, Gary J. Bazydlo, Hinshaw & Culbertson, Chicago, IL, for defendant-appellee.

Before BAUER, Chief Judge, RIPPLE, Circuit Judge, and GRANT, Senior District Judge. ^*

RIPPLE, Circuit Judge.

Mid America Title Company (Mid America) brought suit against James F. Kirk and Attorneys' Title Company (Attorneys' Title) for damages arising from an alleged infringement of Mid America's copyright on its property title commitment. The magistrate judge recommended that the copyright count go forward but that the accompanying state law-based misappropriation claim be dismissed. The defendants objected to the recommendation with respect to the copyright claim. The district court agreed with the defendants and dismissed the copyright infringement claim for failure to state a claim. ¹ Mid America appeals this ruling. ² We reverse and remand to the district court for further proceedings.

I BACKGROUND

A.

Mid America is a title insurance company engaged in providing title searches and title insurance as well as escrow services to buyers, sellers, and lending institutions. Following a search of the public record, Mid America draws up a title commitment report on a specific parcel of land to determine whether the company will issue title insurance. Mid America's title commitments are registered with the United States Copyright Office. Defendant James F. Kirk is an attorney employed by Attorneys' Title, an organization that underwrites real estate title insurance policies. This organization also requires that a title search be conducted as the basis for any commitment it makes for title insurance.

In April 1985 a bank asked Mid America for title insurance on a property in Frankfort, Illinois. Mid America produced Title Commitment No. 125266 following a search of Will County records and forwarded the information to the bank. The bank subsequently canceled the order for the commitment that it had placed with Mid America. Shortly thereafter, Mr. Kirk issued a commitment on the same property on behalf of Attorneys' Title. Both commitments bore the effective date of March 27, 1985. Mid America claims that Mr. Kirk's commitment "substantially copies" Mid America's earlier commitment. Am.Compl. at p 19. Mr. Kirk was paid for his efforts and Mid America was not.

Mid America's Amended Complaint ³ alleges that, "[a]s written works comprising text and compilation of data created through substantial expenditures of time and effort, Mid America's title commitment reports are original works of authorship in which Mid America asserts a claim of copyright. Such copyright claims have been recognized and registered by the U.S. Copyright Office." Am.Compl. at p 7. In addition, the Complaint asserts that "Commitment 125266 is a compilation of factual information, original with Mid America and is copyrightable subject matter under the Copyright Laws of the United States." Am.Compl. at p 16.

B.

A motion to dismiss was filed by the defendants and the matter was referred to

                a magistrate judge for a report and recommendation.   The magistrate judge requested additional briefing on the effect of a recently decided case, Feist Publications, Inc. v. Rural Telephone Service Co., --- U.S. ----, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991).   Taking into consideration the Feist analysis granting copyright protection to factual compilations in some circumstances, the magistrate judge rejected the parties' efforts to argue the motion to dismiss as if it were a motion for summary judgment. 4  Considering the motion as one to dismiss the Amended Complaint under Rule 12(b)(6), the magistrate judge determined that paragraphs 7 and 16 of the Amended Complaint were "broad enough to cover the claim [Mid America] now argues."   Rep. and Rec. at 8.   In making the recommendation, the magistrate judge noted that "Mid America, recognizing that the facts in its title commitments are not protectible, now contends that the selection and interpretation of those facts in its title commitments are copyrightable because its examiners use judgment in determining which land title facts should be included."   Id. at 7
                

C.

The district court approved the magistrate judge's reading of Feist as reiterating that, while facts themselves cannot be protected, a compilation may be copyrightable if the selection, coordination, or arrangement " 'constitutes an original work of authorship.' " Mem.Op. at 3 (quoting Feist, --- U.S. at ----, 111 S.Ct. at 1293). The district court accepted, however, the defendants' argument that the Amended Complaint failed to put them on notice of the specific elements of originality that allegedly had been infringed. In the district court's view, the Amended Complaint "is wholly devoid of any allegations of original compilation, selection, coordination or arrangement of information with respect to plaintiff's title commitment." Mem.Op. at 4. ⁵ The district court determined that this lack of specificity was fatal.

Determining that the "mechanical language employed by plaintiff is akin to the language used in standard legal forms," the district court held that the plaintiff had failed to state a claim and that granting leave to amend would be futile. Mem.Op. at 5. The district court went further, saying that, even if a proper allegation had been made, the plaintiff would not be able to prove that anything original had been copied. Id. at 6.

II ANALYSIS

We review the grant of a motion to dismiss de novo. Bowman v. City of Franklin, 980 F.2d 1104, 1107 (7th Cir.1992); Bethlehem Steel Corp. v. Bush, 918 F.2d 1323, 1326 (7th Cir.1990). A complaint may not be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) unless the plaintiff can prove no set of facts that would allow for recovery. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); Yeksigian v. Nappi, 900 F.2d 101, 102 (7th Cir.1990). When reviewing the grant of a motion to dismiss, we must take as true all well-pleaded factual allegations and all reasonable inferences that may be drawn therefrom. Bowman, 980 F.2d at 1107.

A.

We begin our analysis by setting out, as succinctly as possible, the submission of each of the parties.

Mid America submits that the district court misconstrued its copyright claim by focusing on the nature of the text sought to be protected rather than on the compilation of select data. Mid America maintains that it exercised "selective judgment and creativity in determining which information from the vast amount of land title data available sufficiently reflects upon marketable title." Appellant's Br. at 9-10. The resulting workproduct, it maintains, is entitled to protection as a "compilation" under 17 U.S.C. § 101. Id. Relying on Feist and Key Publications, Inc. v. Chinatown Today Publishing Enterprises, 945 F.2d 509 (2d Cir.1991), Mid America submits that the selection was independently created and has the required minimum degree of originality in the nature of the "selection, coordination, or arrangement of [the] data." Key Publications, 945 F.2d at 512. Novelty is not required, only a modicum of originality in the selection process. Feist, --- U.S. at ----, 111 S.Ct. at 1294. In this regard, Mid America notes that the district court demonstrated its misunderstanding of the claim when it determined that there could be no copyright infringement because the formats of Mid America's and Mr. Kirk's commitments were not the same. Finally, Mid America claims that the district court erred in ruling that the Amended Complaint is insufficient because it does not identify the specific original aspects of the commitment that were copyrighted. Mid America maintains that Feist does not alter the notice pleading rule embodied in Federal Rule of Civil Procedure 8(a)(2), which requires only a "short and plain statement of the claim showing that the pleader is entitled to relief."

Mr. Kirk argues that the Amended Complaint erroneously relied on the "sweat of the brow" theory of copyright protection that has been soundly rejected in Feist. He points out that Mid America never attempted to amend the Complaint following Feist. Rather, it chose to supplement it with an affidavit aimed at demonstrating original compilation. Mr. Kirk also maintains that failure to identify the specific original aspects of a compilation provides inadequate notice of the nature of the claim under Rule 8 because the originality component is so subtle. Mr. Kirk argues that facts alone are not copyrightable, and that the choosing of relevant facts to be included in the commitment is "so mechanical or routine as to require no creativity whatsoever." Feist, --- U.S. at ----, 111 S.Ct. at 1296. There is no room for creative choice, Mr. Kirk asserts, when all title examiners must cover the same ground and the examiner has a duty to make a diligent search of, and include in the commitment, all information bearing on the parcel. See Victor Lalli Enters. v. Big Red Apple, Inc., 936 F.2d 671 (2d Cir.1991) (betting charts not copyrightable because all compilations will be the same unless a mistake is made). Finally, Mr. Kirk argues that the compilation is not copyrightable in this instance because the idea and the expression have "merged," and protection of the expression would be tantamount to...