Rexnord, Inc. v. Modern Handling Systems, Inc.

• Decision Date: 10 July 1974
• Docket Number: Civ. A. No. 4571.
• Parties: REXNORD, INC. (by change of name from Rex Chainbelt, Inc.), Plaintiff, v. MODERN HANDLING SYSTEMS, INC., Defendant.
• Court: U.S. District Court — District of Delaware

379 F. Supp. 1190

REXNORD, INC. (by change of name from Rex Chainbelt, Inc.), Plaintiff, v. MODERN HANDLING SYSTEMS, INC., Defendant.

Civ. A. No. 4571.

United States District Court, D. Delaware.

July 10, 1974.

COPYRIGHT MATERIAL OMITTED

John P. Sinclair, of Potter, Anderson & Corroon, Wilmington, Del., for plaintiff; G. Franklin Rothwell and Charles L. Gholz of Sughrue, Rothwell, Mion, Zinn & Macpeak, Washington, D. C., of counsel.

Douglas E. Whitney and William H. Sudell, Jr., of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for defendant.

OPINION

STAPLETON, District Judge:

This action for copyright infringement and unfair competition was brought by Rexnord, Inc., a Wisconsin corporation. Defendant, Modern Handling Systems, Inc., a Delaware corporation, has answered and filed a counterclaim alleging unfair competition and antitrust violations. Presently before the Court are four motions: the motions of both parties for summary judgment in their favor on plaintiff's claim of copyright infringement; defendant's motion for summary judgment, or alternatively judgment on the pleadings on Rexnord's claim of unfair competition; and defendant's motion under F.R.C.P. 37 for an order compelling plaintiff to answer certain interrogatories.

I. THE COPYRIGHT ISSUE

Plaintiff Rexnord, Inc. ("Rexnord") and its predecessor companies have been engaged in the manufacture of conveyer systems and components since 1905. Beginning in 1939, Rexnord has biennially issued a catalogue depicting its various products and presenting product specifications as well as other information useful to its customers and distributors. These catalogues have been denominated by the year of their issue; for example, the 1939 catalogue is entitled HB-39.

Rexnord's catalogue for 1970, HB-70, is the subject of the copyright which allegedly has been infringed. Evidently, HB-70 was conceived as a more ambitious document than the catalogues it superseded. Physical comparison indicates that it is longer and contains larger pages than its immediate predecessor, HB-68. Moreover, in internal memoranda, Rexnord's vice president for marketing, D. W. Shenton, characterized HB-70 as an attempt "to mesh some twelve to fifteen books we presently have into one which can be made available either in sections or in its entirety, depending on the sales situation" and to "integrate many different manuals which we publish today into . . . one." The identity of the "different manuals" which HB-70 "integrates", and the extent to which it reproduces the content of those manuals, are points of sharp dispute between the parties. At the very least, however, it is accurate to observe that a wide range of products depicted in HB-68 is also depicted in HB-70 and that the visual material and accompanying text in HB-68 and HB-70 contain many similarities.

HB-70 is over 300 pages in length. It is divided into 13 sections, each of which is devoted to a separate category of conveyor products. Typically, each page of HB-70 presents a single product and contains both a visual representation of the product and printed matter indicating the product's physical specifications, the different models in which it is available and its uses. HB-70's inside title page contains a notice of copyright. Before this suit was commenced, Rexnord deposited two copies of HB-70 with the Register of Copyrights and was issued the registration A 370 728. Nevertheless, while prior Rexnord catalogues, including HB-68, have been published with a notice of copyright, neither the deposit of two copies of these catalogues nor the issuance of a registration has ever occurred.

Although all bound copies of HB-70 have included a notice of copyright, it has been Rexnord's practice to disseminate excerpts from HB-70, termed "sectionalized brochures", which do not bear any copyright notice. These sectionalized brochures are exact duplications of corresponding pages in HB-70 and have been freely circulated among customers and prospective customers of Rexnord whose interest is limited to particular Rexnord products.

Defendant Modern Handling Systems, Inc. ("Modhan"), was a distributor of Rexnord products from January 1965 until March 1972, when Rexnord cancelled its distributorship. In 1968, Modhan began manufacturing conveyor equipment and it has gradually emerged as a competitor of Rexnord. Modhan's products are essentially identical to many of the products manufactured by Rexnord and, in many instances, contain equivalent technical specifications. In early 1972, Modhan decided to issue a catalogue of its products. It engaged the Birmingham Publishing Company, Birmingham, Alabama, to prepare and print the proposed catalogue. There is no dispute that included in the many working materials with which Modhan provided its printer was a copy of HB-70. The final catalogue which Modhan issued contains 54 pages and is entitled MS-672.

Rexnord's amended complaint in this action alleges that MS-672 infringes HB-70 in that 52 of MS-672's 54 pages are copied from HB-70. As the basis for its instant motion for summary judgment, it asserts that (1) Modhan's access to HB-70 and its reproduction in MS-672 of errors contained in HB-70 establish that it copied HB-70; and (2) visual comparison of the text and illustrations in the two catalogues establishes the requisite "substantial similarity" between HB-70 and MS-672. Modhan, for its part, does not resist these arguments but rather focuses on establishing two propositions which it believes entitle it to summary judgment: (1) Modhan's printer, but not Modhan, must be held liable for any infringing which may have occurred; and (2) Rexnord's copyright in all of the pages of HB-70 which allegedly have been infringed either has been "forfeited", "abandoned" or is otherwise presently unenforceable.

The affidavits, depositions and documentary evidence submitted by the parties, as well as the catalogues in suit, have enabled the Court to narrow the issues which must be litigated. The Court has concluded, however, that summary judgment is inappropriate.

A. Rexnord's Case On Infringement

After establishing his ownership of a valid and enforceable copyright, the plaintiff in a copyright infringement action has the burden of proving two additional elements. First, since the copyright laws do not prohibit independent creation, the plaintiff must show actual pirating of his work by the defendant. The defendant's access to and knowledge of the plaintiff's work are compelling indicia of such plagarism. Bradbury v. Columbia Broadcating System, Inc., 287 F.2d 478, 481 (9th Cir. 1961). Likewise compelling evidence on the subject is defendant's use of material identical to material contained in plaintiff's work. Bradbury v. Columbia Broadcasting System, supra; Heim v. Universal Pictures Co., 154 F.2d 480 (2nd Cir. 1946). Finally, especially probative of actual copying is the appearance of common errors in the works of plaintiff and defendant. College Entrance Book Co. v. Amsco Book Co., 119 F.2d 874, 875 (2nd Cir. 1941); Adventures in Good Eating v. Best Places to Eat, 131 F.2d 809 (7th Cir. 1942). The defendant's duplication of plaintiff's errors strongly rebuts the inference that mere coincidence is responsible for the similarities between their respective works.

Secondly, once actual copying has been established, it becomes necessary to show substantial and material similarity between the works of the parties. As the Sixth Circuit Court of Appeals defined the concept in Mathews Conveyer Co. v. Palmer-Bee Co., 135 F.2d 73, 84-85 (1943):

". . . From numerous cases it may be concluded that in order to sustain an action for infringement of copyright, a substantial copy of the whole, or a material part, must be reproduced. . . . On the principle of de minimis non curat lex, it is necessary that a substantial part of the copyrighted work be taken.

. . . Among criteria for ascertaining infringement, which have been mentioned by the courts, are whether so much has been taken as would sensibly diminish the value of the original; and whether the labors of the party entitled to copyright are substantially to an injurious extent appropriated by another."

The requirement of actual copying poses no unusual difficulty in the present case. First the deposition testimony of Frank Kovach, Jr., Modhan's president and board chairman, concedes that he and his company were familiar with HB-70. Moreover, the Kovach deposition acknowledges that Modhan's printer, the Birmingham Publishing Co., was furnished a copy of HB-70 before it began preparation of MS-672. Thus, there is unrebutted evidence of "knowledge" and "access". Secondly, visual comparison of the allegedly infringing pages of MS-672 with corresponding pages in HB-70 reveals extensive resemblances. Overall page format is in many instances virtually equivalent; the drawings depicting various products are remarkably similar in scale, shading and detail; and the printed matter identifying product parts, giving product dimensions and describing product properties and uses is frequently duplicated verbatim.

It might be arguable, if highly unlikely, that these resemblances are due to the underlying similarity of Modhan and Rexnord products were it not for the many errors in HB-70 which have been reproduced in MS-672. On a number of occasions, clearly mistaken specifications — i. e., 4' instead of 4" — appear both in MS-672 and HB-70. Furthermore, both catalogues contain common defects in draftsmanship; for example, at analogous points in the depiction of a particular product, a line will be mistakenly discontinued, apparently because of the draftsman's inadvertent erasure. These errors are plain to a lay observer with no technical familiarity with conveyor products. Modhan has offered no alternative explanation for the errors nor, indeed, has it offered any evidence whatever that its catalogue was the product of independent creation. Standing...