Hi-Tech Video Productions, Inc. v. Capital Cities/ABC, Inc., HI-TECH

• Decision Date: 03 August 1995
• Docket Number: HI-TECH,No. 93-1090,93-1090
• Citation: 58 F.3d 1093
• Parties: 1995 Copr.L.Dec. P 27,413, 1995 Copr.L.Dec. P 27,426, 35 U.S.P.Q.2d 1419, 23 Media L. Rep. 2171 VIDEO PRODUCTIONS, INC., Plaintiff-Appellee, v. CAPITAL CITIES/ABC, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1093

58 F.3d 1093

1995 Copr.L.Dec. P 27,413, 1995 Copr.L.Dec. P 27,426,

35 U.S.P.Q.2d 1419, 23 Media L. Rep. 2171

HI-TECH VIDEO PRODUCTIONS, INC., Plaintiff-Appellee, v. CAPITAL CITIES/ABC, INC., Defendant-Appellant.

No. 93-1090.

United States Court of Appeals, Sixth Circuit.

Argued May 3, 1994.

Decided July 11, 1995.

Rehearing Denied Aug. 3, 1995.

James M. Hunt, Graff & Hunt, Traverse City, MI (argued and briefed), for plaintiff-appellee.

Herschel P. Fink (argued and briefed), Michael A. Gruskin, Honigman, Miller, Schwartz & Cohn, Detroit, MI, for defendant-appellant.

Before: JONES and BATCHELDER, Circuit Judges; GILMORE, District Judge. ^*

BATCHELDER, J., delivered the opinion of the court, in which GILMORE, D.J., joined. JONES, J. (pp. 1099-1100), delivered a separate dissenting opinion.

ALICE M. BATCHELDER, Circuit Judge.

Hi-Tech Video Productions, Inc. ("Hi-Tech"), filed suit against Capital Cities/ABC, Inc. (ABC), alleging a single count of copyright infringement. At the close of a two-day bench trial, the district court denied from the bench ABC's motion to dismiss the complaint due to the invalidity of Hi-Tech's copyright. The district court subsequently entered judgment in favor of Hi-Tech. Hi-Tech Video Prods., Inc. v. Capital Cities/ABC, Inc., 804 F.Supp. 950 (W.D.Mich.1992). In so doing, the district court rejected ABC's affirmative defense of fair use, trebled the award of damages in light of ABC's "willful" infringement of copyright, and awarded Hi-Tech attorney's fees and costs. The district court later denied ABC's motion for a new trial or for reconsideration of the bench ruling on copyright validity and of the judgment for Hi-Tech.

ABC filed this appeal contesting the district court's rulings on copyright validity, fair use, treble damages, and attorney's fees and costs. Because we find Hi-Tech's copyright invalid, we reverse the judgment below without reaching ABC's other assignments of error.

I.

Hi-Tech is a production company in Traverse City, Michigan. In addition to contractual work, such as the creation of commercials and other promotional tapes for companies, Hi-Tech independently produces and distributes "video postcards" of northern Michigan vacation spots.

In May 1990, Hi-Tech released a travel video entitled "Mackinac Island: The Mackinac Video." Stan Akey, sole owner of Hi-Tech, produced and directed the video. He enlisted the help of freelance subcontractors: Ted Cline as aerial videographer, Steve Cook as scriptwriter/narrator, and Michael Mueller as principal videographer. As one of Hi-Tech's independent productions, the Mackinac video received its funding from Hi-Tech itself, not from a commercial client. Effective August 3, 1990, Hi-Tech registered a copyright in the Mackinac video as a "work made for hire."

Also in early 1990, the producers of "Good Morning America" (GMA), a news and information program on ABC, decided to feature Mackinac Island's annual Lilac Festival in GMA's June 8, 1990, broadcast. Donna Vislocky, then an associate producer of GMA, was charged with preparing a one-minute videotape on Mackinac Island and its history. Twice, Vislocky obtained footage of the island from an ABC affiliate in Traverse City. Two days before the air date, Vislocky determined the scenes to be insufficient.

Vislocky telephoned Sarah Bolger, Executive Director of the Mackinac Island Chamber of Commerce. Bolger sent Vislocky two videos, including the Mackinac video, via overnight mail. Upon receiving the videos, Vislocky identified scenes from Hi-Tech's video that were appropriate for use in GMA's background piece on Mackinac Island. Vislocky rearranged those scenes for use in the background piece but did not use Hi-Tech's narration or music. ¹

The next morning, Spencer Christian of GMA reported the weather from Mackinac Island and conducted an interview of Bolger regarding the annual Lilac Festival. Introducing Christian's segment was the background piece that Vislocky had edited to include scenes from the visual portion of Hi-Tech's video.

II.

To sustain a case of copyright infringement, the plaintiff must prove "(1) ownership of a valid copyright, and (2) copying [by the defendants] of constituent elements of the work that are original." Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 1296, 113 L.Ed.2d 358 (1991); Wickham v. Knoxville Int'l Energy Exposition, Inc., 739 F.2d 1094, 1097 (6th Cir.1984). Hi-Tech's certificate of copyright creates a presumption of the copyright's validity. 17 U.S.C.A. Sec. 410(c) (1977). Although the presumption may be rebutted, it is the burden of the party challenging the copyright to do so. Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 831 (10th Cir.1993).

Hi-Tech's certificate of copyright registration labels the Mackinac video a "work made for hire." In the case of a "work made for hire," the Copyright Act of 1976 ("the Act") considers the employer or person for whom the work was prepared to be the "author" for purposes of copyright registration and ownership. 17 U.S.C.A. Sec. 201(b) (1977). Section 101 of the Act defines a "work made for hire" in two ways:

(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 as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or 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....

17 U.S.C.A. Sec. 101 (1977) (emphasis added).

Hi-Tech does not claim that the parties signed a written agreement to consider the video a "work made for hire." Thus, we are not asked to find Hi-Tech's copyright valid under Sec. 101(2) of the Act. With respect to Sec. 101(1), ABC does not argue that, if indeed prepared by employees as opposed to independent contractors, the work was not prepared in the scope of the employees' employment. Therefore, Hi-Tech's copyright is a valid "work made for hire" if we conclude it was prepared by employees, not independent contractors.

The district court found Akey's assistants in the production of the video to be employees within the meaning of Sec. 101(1). This Court conducts a de novo review of the district court's application of Sec. 101(1) to the facts of the case. See Marco v. Accent Publishing Co., 969 F.2d 1547, 1548 (3d Cir.1992); Aymes v. Bonelli, 980 F.2d 857, 861 (2d Cir.1992).

III.

The United States Supreme Court construed the "work made for hire" provision in Community for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989) (hereinafter CCNV ), and concluded that the term "employee" in Sec. 101 must be understood through application of the general common law of agency. Id. at 740-41, 109 S.Ct. at 2172-73. The Court then set forth a nonexclusive list of factors relevant to the determination of "employee" status:

(1) the hiring party's right to control the manner and means by which the product is accomplished;

(2) the skill required;

(3) the source of the instrumentalities and tools;

(4) the location of the work;

(5) the duration of the relationship between the parties;

(6) whether the hiring party has the right to assign additional projects to the hired party;

(7) the extent of the hired party's discretion over when and how long to work;

(8) the method of payment;

(9) the hired party's role in hiring and paying assistants;

(10) whether the work is part of the regular business of the hiring party;

(11) whether the hiring party is in business;

(12) the provision of employee benefits; and

(13) the tax treatment of the hired party.

See id. at 751-52, 109 S.Ct. at 2178-79 (footnotes omitted). No single factor is determinative. Id.

In finding "employee" status in this case, the district court relied on six of the above factors: Hi-Tech's right to control and actual control, the source of the instrumentalities, Hi-Tech's right to assign additional projects, the assistants' role in hiring and paying their own assistants, the scope of Hi-Tech's regular business, and Hi-Tech's status as a business. The court mentioned several factors that weigh in favor of independent contractor status, but summarily found them insufficient to affect its conclusion that an employer-employee relationship existed between Akey and his assistants. ²

The district court clearly erred in two of its factual findings. First, the district court found that Akey supplied the production equipment to his assistants. To the contrary, the record shows that Cline, the aerial videographer, supplied his own plane, which was specially equipped to accommodate aerial photography. Also, Akey provided the camera for principal photographer Mueller, but not the computer with which Mueller developed the video's graphics.

Second, the district court found that Akey retained the right to assign additional projects to his assistants. The record does not support this finding. While Akey may have previously engaged one or more of his Mackinac video assistants for other projects, there is no suggestion that Cline, Cook, and Mueller were bound to accept assignments unrelated to the Mackinac video. Rather, the record indicates that Akey hired Cline, Cook, and Mueller to make specific contributions to the Mackinac video only. For example, Akey testified that when a "particular job ... comes out," he hires "freelance people" to assist with "that project." Akey also testified that Mueller's primary occupation is in the computer field, but that Mueller takes on "contractual jobs" in the photography field as well. Indeed, Akey testified that Cline, too, has his own business of flying his Cessna for aerial photography.

More importantly, the district court erred as a matter of law in its application of...