Topolos v. Caldewey

• Decision Date: 08 February 1983
• Docket Number: No. 80-4443,80-4443
• Parties: , 1983 Copr.L.Dec. P 25,497 Michael J. TOPOLOS, Plaintiff-Appellant, v. Jeffrey CALDEWEY, an individual dba Vintage Image, Robert Titus, Richard Paul Hinkle, an individual and Does I through M, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 991

698 F.2d 991

217 U.S.P.Q. 715, 1983 Copr.L.Dec. P 25,497

Michael J. TOPOLOS, Plaintiff-Appellant, v. Jeffrey CALDEWEY, an individual dba Vintage Image, Robert Titus, Richard Paul Hinkle, an individual and Does I through M, Defendants-Appellees.

No. 80-4443.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 14, 1982.

Decided Feb. 8, 1983.

John M. Tomberlin, Santa Rosa, Cal., for plaintiff-appellant.

Ronald T.L. Young, Coombs & Dunlap, Napa, Cal., for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before FLETCHER, POOLE and CANBY, Circuit Judges.

POOLE, Circuit Judge:

Appellant Michael J. Topolos, the co-author ¹ of a book on Napa Valley wineries, appeals the district court's dismissal of his action against Jeffrey Caldewey, Robert Titus and Richard Paul Hinkle for copyright infringement, unfair competition and breach of contract. The district court dismissed the action for lack of subject matter jurisdiction, finding that although Topolos' claim was framed as one for copyright infringement it did not "arise under" the copyright laws within the meaning of 28 U.S.C. Sec. 1338(a). In this appeal Topolos contends that federal jurisdiction lies because the primary and controlling issue in his action is copyright infringement, even though the district court must incidentally resolve the question of the ownership of the copyright.

We hold that Topolos' claim arises under the Copyright Act within the meaning of 28 U.S.C. Sec. 1338(a). The action is thus within the exclusive jurisdiction of the federal courts and we reverse the judgment dismissing the case.

I. FACTS

In 1974, appellant Topolos entered into a publishing contract with appellees Caldewey (then doing business as Vintage Image) and Titus. ² The contract gave Vintage Image the exclusive right to publish a book on Napa Valley wineries written by Topolos and his co-author. In return, Topolos was to receive royalty payments. The contract specified that Vintage Image was to copyright the book in Topolos' name or in its own name if Topolos so chose. Thereafter Vintage Image copyrighted the book, titled California Wineries Volume One, Napa Valley, in its own name. The copyright has since been in the name of Vintage Image.

Topolos' work, originally published by Vintage Image in 1974, was revised or expanded periodically. It was published under the titles California Wineries Volume One, Napa Valley in 1975, and Napa Valley Wine Tour in 1977 and 1978. Each edition listed Topolos as an author and he continued to receive royalties from sales of the book; but each also listed Vintage Image as copyright holder.

In 1979, Vintage Image published another book on Napa Valley wineries. The book, titled Napa Valley Wine Book, listed appellee Hinkle as both author and copyright holder. In August 1979, Topolos wrote to Vintage Image claiming that both the 1978 revised edition, Napa Valley Wine Tour, and the 1979 book by Hinkle, Napa Valley Wine Book, infringed his copyright in his original book.

In April 1980, Topolos sued in district court seeking damages and injunctive relief for statutory copyright infringement, unfair competition and breach of contract. The district court refused Topolos' request for preliminary injunction and on July 28 1980, dismissed for lack of subject matter jurisdiction, finding that the principal and controlling issue in Topolos' claim was the ownership of the copyright. Since resolving the copyright ownership issue required determining the rights and obligations arising under the publishing contract between Topolos and Vintage Image, the district court concluded that the case arose under state law rather than under the copyright laws and that it therefore lacked jurisdiction.

Topolos filed a timely appeal, claiming that he is beneficial owner of the copyright and so has standing to protect it against infringement. He also contends that the federal court had jurisdiction to determine contractual rights between litigants as state law issues pendent to substantive copyright questions.

II. ANALYSIS

The federal courts have exclusive jurisdiction over actions that arise under the federal copyright laws. 28 U.S.C. Sec. 1338(a). However, a case does not arise under the federal copyright laws, embodied in Title 17 of the United States Code, merely because the subject matter of the action involves or affects a copyright. "Under this section [28 U.S.C. Sec. 1338(a) ], the word 'copyright' is not so compelling as to invoke federal jurisdiction upon its mere mention." Muse v. Mellin, 212 F.Supp. 315, 316 (S.D.N.Y.1962), aff'd, 339 F.2d 888 (2d Cir.1964). For instance, federal courts do not have jurisdiction over a suit on a contract simply because a copyright is the subject matter of the contract. T.B. Harms Co. v. Eliscu, 339 F.2d 823, 826 (2d Cir.1964), cert. denied, 381 U.S. 915, 85 S.Ct. 1530, 14 L.Ed.2d 435 (1965); Wells v. Universal Pictures Co., 166 F.2d 690, 691 (2d Cir.1948); Stepdesign, Inc. v. Research Media, Inc., 442 F.Supp. 32, 33 (S.D.N.Y.1977); Muse, 212 F.Supp. at 316; 13 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 3582 (1975).

An often-repeated rule of federal copyright jurisdiction was first offered in Harms by Judge Friendly, who wrote that

an action "arises under" the Copyright Act if and only if the complaint is for a remedy expressly granted by the Act, e.g., a suit for infringement or for the statutory royalties for record reproduction ... or asserts a claim requiring construction of the Act, ... or, at the very least and perhaps more doubtfully, presents a case where a distinctive policy of the Act requires that federal principles control the disposition of the claim.

339 F.2d at 828. But although applying these principles may seem simple, courts have had difficulty in cases where a plaintiff claims not only infringement of rights under the copyright laws but also raises preliminary legal issues of contract under state law.

The district court in this case dismissed Topolos' claim because it found that it did not arise under the copyright laws. The court concluded that the "true thrust" of Topolos' action was resolution of the ownership of the copyright, which required a determination under state law of the rights and obligations arising under the publishing contract.

Generally, courts decide whether a case arises under the copyright laws by focusing on the nature of the principal claim asserted by the plaintiff. As the district court summarized in Royalty Control Corp. v. Sanco, Inc., 175 U.S.P.Q. 641, 642 (N.D.Cal.1972):

If that claim involves copyright infringement or other matter directly related to the interpretation and enforcement of the Copyright Act, jurisdiction has been upheld. On the other hand, where it has been determined that the claim is essentially for some common law or state-created right, most generally for a naked declaration of ownership or contractual rights, jurisdiction has been declined, even though the claim might incidentally involve a copyright or the Copyright Act.

Courts have directed inquiry to what they have variously described as the "primary and controlling purpose" of the suit, the "principal issue," the "fundamental controversy," and the "gist" or "essence" of the plaintiff's claim. Wooster v. Crane & Co., 147 F. 515, 516 (8th Cir.1906); Rotardier v. Entertainment Co. Music Group, 518 F.Supp. 919, 921 (S.D.N.Y.1981); Keith v. Scruggs, 507 F.Supp. 968, 970, 971 (S.D.N.Y.1981); Stepdesign, 442 F.Supp. at 34; Elan Associates, Ltd. v. Quackenbush Music, Ltd., 339 F.Supp. 461, 462 (S.D.N.Y.1972).

However, the district court erred in concluding it lacked jurisdiction over such actions for infringement because it was first required to resolve a threshold question of copyright ownership which in turn called for interpretation of a contract. The district court held that even though Topolos alleged copyright infringement dismissal was compelled by the principles enunciated in Elan for the reason that here, as in Elan, the "principal and threshold" issue to be resolved was ownership of the copyright.

In our opinion the district court erred in applying Elan, for unlike that case and its predecessor Harms, 339 F.2d 823, ownership of the copyright is a threshold question but is not the principal question here.

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