Walker v. University Books, Inc.

• Decision Date: 18 June 1979
• Docket Number: No. 77-2141,77-2141
• Citation: 602 F.2d 859
• Parties: , 1978-81 Copr.L.Dec. 25,087 Helen WALKER, Plaintiff-Appellant, v. UNIVERSITY BOOKS, INC., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 859

602 F.2d 859

202 U.S.P.Q. 793, 1978-81 Copr.L.Dec. 25,087

Helen WALKER, Plaintiff-Appellant, v. UNIVERSITY BOOKS, INC., et al., Defendants-Appellees.

No. 77-2141.

United States Court of Appeals, Ninth Circuit.

June 18, 1979.

Rehearing Denied Sept. 6, 1979.

Edward B. Gregg, Gregg, Hendricson, Caplan & Becker, San Francisco, Cal., for plaintiff-appellant.

Vasilios B. Choulos, Belli & Choulos, San Francisco, Cal., for defendants-appellees.

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

Before BROWNING and WALLACE, Circuit Judges, and CURTIS, ^* District Judge.

CURTIS, District Judge:

This is an appeal by the plaintiff from a summary judgment in favor of the defendants. Walker v. University Books, Inc., et al., 193 U.S.P.Q. 596 (N.D.Cal.1977). Appellant originally brought this action for copyright Walker copyrighted and published a set of 72 cards which she entitled "I Ching Cards" and which are designed to aid in the instruction of an ancient Chinese method of divination or fortune-telling. Appellant concedes that her cards were an adaptation of the James Legge translation of the I Ching, a work in the public domain. The validity of her original copyright of the format is not in issue on appeal. In the fall of 1971, the appellant determined to enlist the aid of a professional New York publishing firm in the marketing of her cards and, pursuant to this goal, met and conferred with Defendant-Appellee Sol Weinreich, president of Appellee Noble Offset Printers, Inc. Weinreich introduced Appellant to Felix Morrow who had some expertise in the area of publishing with which the Appellant was concerned. Appellant attempted to interest both men in a joint publishing venture regarding her cards and in this connection, revealed to them, allegedly in confidence, her ideas for improving the format and appearance of the I Ching cards. These proposed embellishments consisted of the use of a higher quality stock, brighter colors, rounded corners, red borders, larger hexagrams on the face of each card, and a higher quality container in which the cards would be sold.

infringement, unfair competition resulting from misappropriation of trade secrets, and fraud. The latter count has been dismissed and is not in issue on appeal. For reasons hereinafter appearing, we affirm in part, reverse in part, and remand.

Initially, Morrow appeared to be willing to participate in the venture; however, this interest was apparently short-lived and no agreement was forthcoming. Later in the fall of 1971, Appellant received a letter from Appellee Robert Salomon, then vice-president of Appellee Lyle Stuart, Inc. and president of Appellee University Books, requesting a sample deck of her cards pursuant to their possible use by Lyle Stuart's Mystic Arts Books Society. Appellant provided the requested set to Lyle Stuart, Inc. and also sent one to Sol Weinreich.

In December of 1971, Appellant became aware of a promotional flyer then being circulated to booksellers by Lyle Stuart, Inc. which advertised its upcoming publication of "I Ching Cards" based on the original James Legge translation. Indicated was a prospective distribution date of sometime in February, 1972 and potential purchasers were urged to "order now."

In February of 1972, Appellant's attorney wrote to Lyle Stuart protesting the publication at issue on the grounds that it would constitute an infringement of Walker's copyright. In a letter dated March 8, 1972, Stuart's counsel Jack Albert, replied to this correspondence by mail, denying the charge of infringement and enclosing what he described as "photocopies of the blueprints for certain cards being prepared for production by my client." The record indicates that the enclosed facsimiles were of blueprints of cards prepared by Noble Offset Printers from original "camera-ready mechanicals" supplied by University Books. The blueprints themselves can be characterized as proofs of the art work which would appear on the finished cards. (Brief for Appellee at 5.) The record indicates that Appellees University Books and Lyle Stuart produced a complete set of I Ching cards and began distributing them commercially around May 25, 1972.

Contemporaneous with her attempts to dissuade the Appellees from publishing their cards, the Appellant sought a publisher for her own version of the I Ching. Pursuant to this effort, appellant entered into an agreement with U.S. Games Systems, Inc. on March 2, 1972, whereby she assigned her copyright to the cards to U.S. Games which had agreed to publish same. In return Walker received the right to receive royalties, a portion of any revenue received by U.S. Games in the event they were to license the copyright to third parties, and the right of reversion if the agreement were terminated. In addition, appellant retained the right of renewal of the copyright and the right to sue for past infringements, as well as the right to assign her residual interest.

U.S. Games began manufacturing the cards pursuant to the assignment, utilizing the services of a Swiss printer. On June 2, 1972, U.S. Games instructed the printer to delete the statutory copyright notice from the cards in order that more than 1,500 copies could be imported into the United States. Importation of more than that number of cards would be prohibited by the Copyright Act were the notice not removed. 17 U.S.C. §§ 16, 107 (1909 Act).

Walker, concerned that the actions of U.S. Games described above threatened her copyright, negotiated a second agreement with that company in the fall of 1973 which terminated the March 2, 1972 assignment and granted to U.S. Games a license to publish and distribute the cards in the United States provided the statutory notice was affixed. However, the record indicates and the Appellant does not dispute that several thousand decks of the I Ching cards were marketed by U.S. Games in the United States during the period of the assignment without the statutory copyright notice affixed.

The Appellant's contentions before the district court, briefly stated, were as follows. Appellees published their I Ching cards in violation of her copyright, copying her work and utilizing the improvements which were the product of her creative efforts and disclosed to them in confidence as trade secrets. Appellees assert that, although they admittedly had access to Appellant's version of the I Ching, they, like her, based their presentation on the original James Legge translation which could be freely copied since it was in the public domain. Further, Appellees contend that their cards were developed without incorporation of the Appellant's suggested improvements and that the alterations which were revealed to them are standard practices and common knowledge in the area of the publishing industry at issue and thus can not form the basis for a claim of misappropriation of trade secrets.

In granting the motion of the defendants for summary judgment on the copyright question, the district court analyzed the issue in terms of the periods prior and subsequent to the assignment of Appellant's copyright to U.S. Games on March 2, 1972. Due to the significance of the assignment and the date thereof, we choose to follow this same approach.

In addressing Appellant's claim for infringement occurring after the March 2, 1972 agreement was consummated with U.S. Games, the court initially found that this agreement constituted, on its face, a valid assignment of the copyright in issue because the agreement transferred the totality of rights conferred by the copyright to the assignee. With this finding we are in agreement and the Appellant has not attempted to refute it on appeal. This finding is crucial to Appellant's claim since, in order for a plaintiff to prevail on an action for infringement, two elements must be established: Ownership of a valid copyright and copying of the protected work by the defendant. 17 U.S.C. § 101 (1909 Act); Reyher v. Children's Television Workshop, 533 F.2d 87 (2d Cir. 1976); 3 Nimmer on Copyright, § 13.01 (1978). Under the 1909 Act, here applicable, an assignor of a copyright has no standing to sue for infringements which occur subsequent to the effective date of the assignment. 3 Nimmer § 10.01. Therefore, Appellant lacks standing to assert claims for infringement during the period of the assignment of her copyright to U.S. Games.

Appellant has argued on appeal that she retained a sufficient beneficial interest in the protected work to support her right to bring suit notwithstanding the assignment. However, the rule under the 1909 Act which here controls requires that the Appellant can only bring an action based on this theory of retained interest if the assignee, U.S. Games, has first refused to bring such action and then only provided that the assignee is joined in the suit. See e. g., Manning v. Miller Music Corp., 174 F.Supp. 192, 194 (S.D.N.Y.1959); 3 Nimmer § 10.01(c)(1). The record indicates that U.S. Games was never requested by Walker to bring the instant suit nor was that company ever joined as a party. We therefore affirm the Appellant contends that she has standing to bring her claim for infringement subsequent to the period of the assignment pursuant to the second agreement with U.S. Games, entered into sometime in the fall of 1973, whereby the March 2, 1972 assignment was terminated and she once again became the copyright proprietor. However, the record reveals that during the assignment period, U.S. Games published copies of the protected work in the United States without the essential copyright notice having been affixed thereon. Although the record indicates that such action may have been undertaken without the express consent of the Appellant, the effect of this publication was the forfeiture of the copyright, a result which occurs by operation of the law; as the assignee, U.S. Games possessed the requisite interest in the copyright to trigger...