Los Angeles News Serv. v. Reuters Television Intl. Ltd., 100703 FED9, 02-56956

• Party Name: Los Angeles News Serv. v. Reuters Television Intl. Ltd.
• Case Date: October 07, 2003
• Court: United States Courts of Appeals, U.S. Court of Appeals — Ninth Circuit

LOS ANGELES NEWS SERVICE, Plaintiff-Appellant,

v.

REUTERS TELEVISION INTERNATIONAL LIMITED; VISNEWS INTERNATIONAL (USA) LIMITED; REUTERS AMERICA HOLDINGS, INC.; REUTERS AMERICA INC., Defendants-Appellees .

No. 02-56956

United States Court of Appeals, Ninth Circuit

October 7, 2003

Submitted April 22, 2003^[*] Pasadena, California

Amended October 7, 2003

Appeal from the United States District Court for the Central District of California Consuelo B. Marshall, Chief Judge, Presiding, D.C. No. CV-95-01073-CBM

COUNSEL

George T. Caplan, Kaye Scholer LLP, Los Angeles, California, argued the cause and filed briefs for the appellant.

Robert C. Vanderet, O’Melveny & Myers LLP, Los Angeles, California, argued the cause for the appellees. Paul B. Salvaty and Vanessa Koury were on the brief.

Before: Diarmuid F. O’Scannlain, Barry G. Silverman, Circuit Judges, and Edward C. Reed, Jr.,^[**] District Judge.

ORDER

The opinion filed August 21, 2003, is hereby ordered amended as follows:

With this amendment, the panel has voted to deny the petition for rehearing and the petition for rehearing en banc. Judge Silverman voted to grant the petition for rehearing and to deny the petition for rehearing en banc. Judge Reed voted to deny the petition for rehearing and suggested that the petition for rehearing en banc be denied. Judge O’Scannlain voted to deny the petition for rehearing and to deny the petition for rehearing en banc.

The full court has been advised of the petition for rehearing en banc and no active judge has requested a vote on whether to rehear the matter en banc. Fed. R. App. P. 35.

The petition for rehearing and the petition for rehearing en banc are denied.

OPINION

O’SCANNLAIN, Circuit Judge:

We must decide whether a news organization may recover actual damages under the Copyright Act for acts of infringement that mostly occurred outside the United States.

I

The copyrighted works at issue here (“the works”) are two video recordings, “The Beating of Reginald Denny” and “Beating of Man in White Panel Truck,” which depict the infamous events at Florence Ave. and Normandie Blvd. during the 1992 Los Angeles riots. Los Angeles News Service (“LANS”), an independent news organization which produces video and audio tape recordings of newsworthy events and licenses them for profit, produced the works (and two other videotapes not at issue here) while filming the riots from its helicopter. LANS copyrighted the works and sold a license to rebroadcast them to, among others, the National Broadcasting Company (“NBC”) network, which used them on the Today Show .

Visnews International (USA), Ltd. (“Visnews”) is a joint venture among NBC, Reuters Television Ltd., and the British Broadcasting Company (“BBC”). Pursuant to a news supply agreement between NBC and Visnews, NBC transmitted the Today Show broadcast by fiber link to Visnews in New York; Visnews made a videotape copy of the works, which it then transmitted via satellite to its subscribers in Europe and Africa and via fiber link to the New York office of the European Broadcast Union (“EBU”), a joint venture of Visnews and Reuters. The EBU subsequently made another videotape copy of the works, and transmitted it to Reuters in London, which in turn distributed the works via video “feed” to its own subscribers.

LANS sued Reuters Television International, Inc., Reuters America Holdings, Inc., Reuters America, Inc. (collectively, “Reuters”), and Visnews for copyright infringement and certain other claims not relevant here. The district court subsequently granted Reuters and Visnews partial summary judgment on the issue of extraterritorial infringement, holding that no liability could arise under the Copyright Act for acts of infringement that occurred outside the United States. L.A. News Serv. v. Reuters Television Int’l, Ltd. ( Reuters I ), 942 F.Supp. 1265, 1268-69 (C.D. Cal. 1996). However, the district court held that Visnews’s act of copying the works in New York was a domestic act of infringement¹ and rejected a claimed defense of fair use. Id. at 1269, 1271-74.

The district court further concluded that LANS had failed to prove any actual damages arising domestically and that damages arising extraterritorially were unavailable under the Act, which meant that LANS was limited to statutory damages. Id. at 1274-75 & n.7.² After a bench trial on the issue of statutory damages, the district court awarded LANS a total of $60,000. L.A. News Serv. v. Reuters Television Int’l, Ltd. ( Reuters II ), 942 F.Supp. 1275, 1283-84 (C.D. Cal. 1996).

LANS appealed the district court’s ruling on actual damages, and Reuters and Visnews cross-appealed the fair use ruling and the statutory damages calculation. We subsequently reversed the district court’s actual damages ruling, disagreeing with its interpretation of the Copyright Act’s extraterritorial application. L.A. News Serv. v. Reuters Television Int’l, Ltd. ( Reuters III ), 149 F.3d 987, 992 (9th Cir. 1998). We concluded that although the district court was correct to hold that the Copyright Act does not apply extraterritorially, an exception may apply where an act of infringement is completed entirely within the United States and that such infringing act enabled further exploitation abroad. Id. at 991-92. Relying on Sheldon v. Metro-Goldwyn Pictures Corp., 106 F.2d 45 (2dCir. 1939), aff’d, 309 U.S. 390 (1940), which held that profits from overseas infringement can be recovered on the theory that the infringer holds them in a constructive trust for the copyright owner, we reversed the grant of summary judgment. Reuters III at 991-92. We held that “LANS [was] entitled to recover damages flowing from exploitation abroad of the domestic acts of infringement committed by defendants.” Id. at 992.

Turning to the other issues, we affirmed the fair use ruling and the statutory damages calculation. Id. at 994-96. However, we vacated the award of statutory damages so that LANS could make a new election on remand. Id. at 995 &n.8. After the Supreme Court denied certiorari, Reuters Television Int’l, Ltd. v. L.A. News Serv., 525 U.S. 1141 (1999), the case returned to the district court, where Reuters and Visnews moved for summary adjudication of the claim for actual damages. They asserted that the Reuters III decision permitted LANS to recover only Defendants’ profits attributable to extraterritorial infringement—not actual damages for injuries the infringements caused LANS overseas. Reuters and Visnews further asserted that no factual dispute remained as to the amount of such profits.

After a hearing, the district court agreed with Reuters and Visnews on both points and granted the motion. The court concluded that Reuters III had held only that LANS could recover any profits or unjust enrichment from domestic infringers, on the theory that the infringers held such profits in a constructive trust for LANS. “To permit [LANS] to recover damages other than Defendants’ profits or unjust enrichment,” the court stated, “would . . . effectively permit [LANS] to recover damages for extraterritorial acts of infringement.”

Having determined that LANS could recover only Defendants’ profits, if any, the district court concluded that Reuters and Visnews had reaped no such profits from their infringement. The court held that LANS’s “speculative” testimony about the competitive advantage that exclusive footage gives a subscription broadcaster was insufficient to create a factual dispute. It accordingly granted the motion for summary adjudication. In its order, the district court stated that LANS could elect to take the $60,000 in statutory damages awarded in Reuters II and affirmed in Reuters III . In its haste, LANS timely appealed to this court, but failed to make the required election as to statutory damages. Because there was no “final decision,” we dismissed for lack of jurisdiction. LANS subsequently cured the jurisdictional defect by making such election, and re-filed its appeal with this court.

II

LANS claims that the district court erred by disallowing recovery for actual damages. LANS, however, does not challenge the court’s further conclusion that LANS had failed to show that Reuters and Visnews had earned any profits from the overseas infringement. Summary adjudication was therefore appropriate if the district court correctly concluded that LANS could not recover actual damages for overseas effects of Defendants’ infringement.

A

Both parties engage in detailed exegesis of our opinion in Reuters III . On LANS’s reading, the court’s use of the term “damages” is dispositive. The statute uses “actual damages” and “profits” separately and distinctly, and provides that an infringer may recover both (in the ordinary case). LANS asserts therefore that the Reuters III court should be read as having meant what it said: “damages” means actual damages.

[1] But LANS’s interpretation does not fit with the context in which the Reuters III court discussed the recoverability of “damages.” There, we relied on Judge Learned Hand’s opinion in Sheldon and discussed damages entirely in the context of that case, which dealt exclusively with the recovery of the defendants’ profits.

The Sheldon court had previously affirmed the defendants’ liability for infringing the plaintiffs’ copyright by incorporating their play into a movie. Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49, 54-56 (2d Cir. 1936). After a remand, the...