State of Tex. v. West Pub. Co.

• Decision Date: 05 September 1989
• Docket Number: No. 88-1114,88-1114
• Citation: 882 F.2d 171
• Parties: 1989 Copr.L.Dec. P 26,465, 12 U.S.P.Q.2d 1107 The STATE OF TEXAS, Plaintiff-Appellant, v. WEST PUBLISHING COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 171

882 F.2d 171

1989 Copr.L.Dec. P 26,465, 12 U.S.P.Q.2d 1107

The STATE OF TEXAS, Plaintiff-Appellant, v. WEST PUBLISHING COMPANY, Defendant-Appellee.

No. 88-1114.

United States Court of Appeals, Fifth Circuit.

Sept. 5, 1989.

Donna L. Nelson, Asst. Atty. Gen., Jim Mattox, Atty. Gen., Austin, Tex., for plaintiff-appellant.

Linda L. Holstein, Vance R. Opperman, Ray Oechsler, Opperman & Paquin, Minneapolis, Minn., J. Hampton Skelton, Austin, Tex., Michael Lowenberg, Kathleen M. LaValle, Dallas, Tex., for defendant-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before WISDOM, GARWOOD and JOLLY, Circuit Judges.

GARWOOD, Circuit Judge:

Plaintiff-appellant the State of Texas (Texas) appeals the district court's dismissal of its suit against defendant-appellee West Publishing Company (West) seeking declaratory judgment that West's copyright in West's arrangement of Texas statutes is invalid. 681 F.Supp. 1228. The district court dismissed the suit for lack of subject matter jurisdiction after concluding that the action did not present an "actual controversy." We affirm.

Facts and Proceedings Below

For several decades Texas and West have enjoyed an amicable publishing relationship. Since 1914, West and its predecessor, Vernon Law Book Company, have collected, arranged, and published Texas statutory law in Vernon's Annotated Texas Statutes. In 1925 the Texas Legislature reorganized all laws in effect at that time into three major divisions: civil statutes, criminal statutes, and criminal procedure statutes. ¹ The civil statutes comprised a two-volume set known as the "Revised Civil Statutes." The focus of this litigation is West' annotated version of the Revised Civil Statutes, known as Vernon's Annotated Revised Civil Statutes (Vernon's). Tex.Rev.Civ.Stat.Ann. (Vernon 1962).

Defying the legislative process, the 1925 statutory classification scheme did not provide for expansion of the law through the addition of new laws. Subsequent changes or additions to Texas law, which were not given a placement designation by the legislature, were reviewed by West and then arranged by West for appropriate placement within Vernon's. See Johnson v. City of Fort Worth, 774 S.W.2d 653 (1989 Tex.) (providing a useful discussion on the codification process). ² West identified such new statutes--as to which the legislature had made no placement designation--by a 1925 article or section number that was coupled with a West-generated identifier. ³ The result of West's efforts was Vernon's--an up-to-date, readily accessible version of Texas' civil statutes. See id. at 655. West claims a copyright in the Vernon's arrangement. West does not claim a copyright in the text of the statutes themselves or in any official compilation or other arrangement of Texas statutes. ⁴

Texas publishes legislation enacted subsequent to the 1925 Revision in the General and Special Laws of Texas. These official session laws are printed in chronological order after each legislative biennium. West claims no copyright in any of these. The printing of the session laws is done by the successful commercial bidder. From 1941 to 1985, West was the successful bidder. In 1985, the seeds of discontent between the parties were apparently sown when the bid contract was awarded to the Bancroft-Whitney Company.

In 1985, Bancroft-Whitney brought a declaratory judgment action in Texas against West to have West's alleged copyright declared invalid. ⁵ West counterclaimed for copyright infringement. The case was removed to a federal district court in Minnesota, where it is still undecided. In the 1987 Texas legislative session, SB 664 was introduced into the legislature. The bill provided for Texas' official "adoption" of the Vernon's arrangement. ⁶ West and Bancroft-Whitney lobbied intensively for their respective positions, with West the ultimate victor. In the fall of 1987, after the defeat of SB 664, Texas filed the present declaratory judgment action under 28 U.S.C. Sec. 2201 against West to have West's copyright declared invalid. West moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). The district court dismissed pursuant to 12(b)(1) after concluding that subject matter jurisdiction was lacking under the Declaratory Judgment Act, 28 U.S.C. Sec. 2201, because the suit did not present an actual controversy. Texas now appeals that ruling.

Discussion

The district court lacks subject matter jurisdiction to issue a declaratory judgment unless an "actual controversy" exists between Texas and West. 28 U.S.C. Sec. 2201(a); Middle South Energy, Inc. v. City of New Orleans, 800 F.2d 488, 490 (5th Cir.1986). It has been said that the case or controversy requirement of Article III of the United States Constitution is identical to the actual controversy requirement under the Declaratory Judgment Act. Windsurfing Int'l, Inc. v. AMF, Inc., 828 F.2d 755, 757 (Fed.Cir.1987). We have stated that an actual controversy is one where "a substantial controversy of sufficient immediacy and reality [exists] between parties having adverse legal interests." Middle South, 800 F.2d at 490 (citing Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941); Johnson v. Onion, 761 F.2d 224, 225 (5th Cir.1985)). Texas bears the burden of establishing an actual controversy and Texas must prove by a preponderance of the evidence that a controversy exists. Id. at 490.

While the basic declaratory judgment principles are well settled, we have not had the opportunity to apply them in the context of an intellectual property case. We are not without guidance, however, because the Federal Circuit provides a wealth of precedent in the intellectual property field and it has articulated fairly clear standards. According to Federal Circuit decisions, an "actual controversy" exists in an intellectual property case when both prongs of a two-pronged test are satisfied--(1) when the declaratory plaintiff has a real and reasonable apprehension of litigation and (2) when the declaratory plaintiff has engaged in a course of conduct that brings it into adversarial conflict with the declaratory defendant. See, e.g., Windsurfing Int'l, 828 F.2d at 757 (case involving patents); Indium Corp. v. Semi-Alloys, Inc., 781 F.2d 879, 883 (Fed.Cir.1985), cert. denied, 479 U.S. 820, 107 S.Ct. 84, 93 L.Ed.2d 37 (1986) (case involving trademarks).

We hold that neither prong of this test has been adequately satisfied. ⁷

I. Texas Adversarial Activity

Texas engages in limited noncommercial publishing for its own intragovernmental use of pamphlets that contain portions of the Vernon's arrangement. Texas asserts that this activity satisfies the threshold requirement of an "adversarial conflict." In a Federal Circuit case involving patents, the court stated that in order to establish an adversarial conflict "the plaintiff must have either produced the device or have prepared to produce that device." Goodyear Tire & Rubber v. Releasomers, 824 F.2d 953, 955 (Fed.Cir.1987); see also Windsurfing Int'l, 828 F.2d at 758 (finding that absent use of the trademark there could not be adverse legal interests between the parties). Applying these principles in the copyright context, the plaintiff must show that it has actually published or is preparing to publish the material that is subject to the defendant's copyright and that such publication places the parties in a legally adverse position.

There is no evidence that Texas has in the past, is currently, or intends in the future to engage in any commercial publishing of Vernon's. Texas' limited noncommercial publication of pamphlets for its own intragovernmental use is not an activity that is legally adverse to West. On the contrary, the record reveals that this limited noncommercial publishing has occurred for years without any conflict of any kind between the parties. Texas is simply not a competitor of West and it is not engaged in any publishing activity that places it in adversarial conflict with West.

Texas cannot satisfy the adversarial conflict requirement by stating that one day it might want to compete with West in the commercial publication of the Vernon's arrangement. This imaginary conflict is even more remote than the "conflicts" rejected in the case law where the parties were at least business competitors. See, e.g., Windsurfing Int'l, 828 F.2d at 758 (stating that the plaintiff's asserted desire to use the trademark, rather than actually using it, is insufficient to establish a conflict); Polaroid Corp. v. Berkey Photo, Inc., 425 F.Supp. 605, 609 (D.Del.1976) (finding that plaintiff did not present a legally adverse conflict by "contemplating" use of the defendant's trademark). As one court so aptly put it, this conflict "smacks too much of the hypothetical and contingent." Windsurfing Int'l, 828 F.2d at 758 (quoting Wembley, Inc. v. Superba Cravats, Inc., 315 F.2d 87, 90 (2d Cir.1963).

II. Threats Emanating from West

Moreover, no conduct on the part of West is shown that supports Texas' asserted fear of litigation. To rely on fear of litigation, Texas must establish conduct by West which supports that asserted fear. Crown Drug Co. v. Revlon, Inc., 703 F.2d 240, 243 (7th Cir.1983). The focus here is on the defendant's conduct that is directed toward the plaintiff. Id. Traditional indicia of an objectively reasonable fear of litigation are direct threats by the defendant or a history of litigation between the parties. Id. at 243-44. While express or direct threats by the defendant are not essential to establish a plaintiff's reasonable fear of litigation, the plaintiff must allege a course of conduct that implies an "imminent threat of impending legal action" by the defendant. Id.; see also Goodyear, 824 F.2d at 956. A defendant's simple assertion that they hold a copyright in certain material generally does not amount to a threat of litigation. See International...