John A. Neal and John G. Duffy, Individually and Dba Workshop Publications, a Co-partnership, Appellants, v. Thomas Organ Co., a California Corporation, Appellee, 325 F.2d 978 (9th Cir. 1964)

Appellants brought suit below against appellee for copyright infringement and unfair competition. The district court found for defendant, and plaintiffs appeal.

The district court had jurisdiction under 28 U.S.C. § 1338(a) and (b). This court has jurisdiction pursuant to 28 U.S.C. § 1291.

The basic findings of fact of the district court are uncontroverted and are here adopted.¹ 

The main legal questions are (1) whether appellants have a copyright on a text valid against the whole world, or (2) at least valid against appellee, and (3) whether appellee was guilty of unfair competition concerning certain recordings.

I. DO APPELLANTS HAVE A COPYRIGHT ON THE MANUAL VALID AGAINST THE WHOLE WORLD?

Section 20 of the Copyright Act (17 U.S.C.) provides in pertinent part:

"The notice of copyright shall be applied, in the case of a book or other printed publication, upon its title page or the page immediately following, * * * or if a musical work either upon its title page or the first page of music."

Appellants have admittedly complied with all of the other requirements of the Copyright Act. The only question is whether they have properly placed the notice of copyright. The title of their publication appears only on the cover. The other side of the leaf on which the cover appears has been held to be the "page immediately following," i. e., the second page. Kraft v. Cohen, E.D. Pa. 1940, 32 F. Supp. 821, reversed on other grounds, 3 Cir. 1941, 117 F.2d 579. The third page contains text and the copyright notice. The fourth page is the first page of music. Under the statute, appellants could have complied with the notice requirement by placing the notice of copyright on the cover or on the fourth page, if the work is a musical composition, or on the second page, if the work is a book. By the definition in Kraft v. Cohen, supra, the notice is on the third page. Yet appellants contend that this placement constitutes literal or substantial compliance with the statutory requirement such that they have a copyright valid against the whole world.

Basically, the argument of appellants is that the title page is not the cover page but the third page. They support this argument with (1) cases which state that the purpose of the copyright requirements is to protect innocent persons who are unaware of the existence of the copyright from suffering or making use of the copyrighted article,²  (2) cases which state that the copyright statutes must be liberally construed,³  and (3) cases which state that to determine which page is the title page the court must look at the peculiar characteristics of the particular publication.⁴ 

We do not believe that the third page can be deemed to be the "title page." All four of the cases cited in footnote 4 are strong authority against the argument of appellants that the third page rather than the covering page is the "title page." In particular, we consider unanswerable the following observation in Freeman v. The Trade Register, C.C.W.D. Wash. 1909, 173 F. 419, 424:

"But whatever features may or may not be definitive of the title page, it would seem to be beyond controversy that the title page must be a page which contains the title."

Thus, the cover is the "title page," for it is the only page which contains the title.

However, even if the statutory notice does not appear on the title page, it is adequate if it appears on "the page immediately following." Is the third page "the page immediately following" the "title page"? Judge Kalodner ruled that it was not. Kraft v. Cohen, supra. However, in so holding, he relied entirely upon a dictionary definition of the word "page" as meaning one side of a leaf of a book. That definition, however, can support an opposite conclusion. An average citizen would regard the cover as something different from the leaves of a book or pamphlet. Webster's New International Dictionary, 3d Edition, defines cover as "a binding or case for a book or the comparable outer part of a pamphlet or magazine." Funk & Wagnall's New Standard Dictionary defines cover as "that which is spread or fitted over, or encloses anything." The same dictionary defines leaf, so far as material here, as "something resembling a leaf [of a tree] in being broad, thin and flat, or in being movable attached, by an edge or an end to something else; (1) a single division of a folded sheet of paper, or the like, as in a book * * *." We are satisfied that the average citizen thinks of the leaves of a book as being, as Funk and Wagnall says, in the book, meaning inside the cover of a book.

Thus it seems reasonable for an average citizen to conclude that the page immediately following the title page could be the third page because that is the first page on the first leaf. Of course, it would also be reasonable to conclude that notice on the inside front cover is sufficient. We think notice on either is sufficient, but limit our opinion to the peculiar circumstances of this case in which the title appears only on the cover and in which the cover is of a harder and less malleable material than the leaves within.

Although the cases cited in our footnotes 2 and 3 do not go directly to the issue involved here, the policy and trend indicated in those cases lend support to our conclusion here. We recognize there is little room here for "liberal interpretation" or for a consideration of "Congressional intent." We also recognize that the United States has refused to adopt for Americans the practice prevalent in most European countries whereby notice is sufficient when placed in such manner and location as to give reasonable notice of the claim of copyright.⁵  Yet we believe the conclusion which we reach does not do violence to the copyright laws where the correct answer is not obvious from the statute. We are influenced by the following observations of Judge Learned Hand:

"We are unwilling to allow a barefaced infringer to invoke an innocent deviation from the letter that could not in the slightest degree prejudice him or the public." National Comics Publications v. Fawcett Publications, 2 Cir. 1951, 191 F.2d 594, 603.

And:

" [A] literal interpretation of the words of a statute is not always a safe guide to its meaning." Peter Pan Fabrics, Inc. v. Martin Weiner Corp., 2 Cir. 1960, 274 F.2d 487, 489.

We hold that under the circumstances of this case it was clearly erroneous to hold that appellants do not have a copyright valid against the whole world. Because of our conclusion on the first point, we need not reach the second question.

II. IS DEFENDANT GUILTY OF UNFAIR COMPETITION?

The copyright issues in this case relate only to the instruction book used by defendant since its falling out with plaintiffs, and not to the issue of unfair competition. The trial court correctly pointed out that both parties recognized the fact that copyright protection does not extend to phonograph records comprising performance of public domain literary property or musical compositions. Capitol Records v. Mercury Records Corp., 2 Cir. 1955, 221 F.2d 657, and cases cited p. 661. There could be no compliance with section 9 or 19 of the Act (17 U.S.C. §§ 10, 20), "publication with notice of copyright," "either upon its title page or the first page of music."

The unfair competition issue relates only to the phonograph records used by defendant subsequent to that same falling out with plaintiffs. Each of the four records involves several lessons. In a typical lesson the narrator describes a certain step, e. g., how to play in tango rhythm. Then the point is illustrated by plaintiff Duffy playing on the Model "G" organ. At times there are both narration and music. Most of the script used for the narrations by defendant was written by plaintiffs. Defendant changed performers for the narrations but used Duffy's performance for the musical illustrations where possible.

The trial court held that an action based on unfair competition is predicated on state law, relying on the same case cited above, Capitol Records v. Mercury Records Corp., 221 F.2d at p. 662. There Judge Dimock held that " [s]ince the Copyright Act does not deal with the protection of phonograph records of the performances of public-domain compositions by virtuosos, we have no basis for applying federal law," and that the law of the forum prevailed. Here, applying California law, the trial court concluded that there had been no unfair competition either as to narrations or as to musical illustrations. In reaching such conclusion, the trial court pointed out that "research fails to reveal any decisions from" the State of California, save Hesse v. Grossman, 1957, 152 Cal. App. 2d 536, 313 P.2d 625; and McCord Co. v. Plotnick, 1951, 108 Cal. App. 2d 392, 239 P.2d 32.

On this issue of unfair competition, we conclude that the judgment of the trial court must be vacated and the cause remanded. We are required to do so because of our decision in Bliss v. Gotham Industries, Inc., 9 Cir. 1963, 316 F.2d 848. In that case we held that, there "being no diversity of citizenship, California law does not apply to appellant's claim for unfair competition." (316 F.2d p. 854) Here there was no diversity of citizenship. The plaintiffs alleged in their amended complaint that they were citizens of California and that defendant was a California corporation. The trial court could not have been aware of our holding in the Bliss case, for that case was decided five months after the trial court rendered its decision in this case. We thus remand for consideration in light of the Bliss case.

Of course, we had previously approved the applicability of California law in unfair competition cases where the jurisdiction was based solely upon the ground of diversity of citizenship. Kemart Corp. v. Printing Arts Research Lab., Inc., 9 Cir. 1959, 269 F.2d 375 at 388. And many opinions draw no line between the decisions of federal courts under federal law and those decided under state law.⁶ 

But this court flatly stated in Bliss v. Gotham, supra, that " [t]here being no diversity of citizenship, California law does not apply to the appellants' claim for unfair competition." (316 F.2d p. 854)

In holding that under the Lanham Act (15 U.S.C.A. § 1126) there had been created a substantive federal law of unfair competition wherever interstate commerce was involved, the Ninth Circuit differs from other circuits. Stauffer v. Exley, 9 Cir. 1950, 184 F.2d 962; Pagliero v. Wallace China Co., 9 Cir. 1952, 198 F.2d 339; cf. Maternally Yours v. Your Maternity Shop, 2 Cir. 1956, 234 F.2d 538, especially note 1 and Judge Clark's concurring opinion, p. 545.

Under the "pendent litigation" theory (28 U.S.C.A. § 1338(b)), the issues here involving the alleged infringement of the copyright and the alleged unfair competition were "substantial" and closely "related." Because "copying" was admitted, the court ordinarily would be required to consider whether a case of unfair competition had been made out, by proof that defendants "palmed off" their product, or by proof of secondary meaning as to source, either of which had deceived, or could deceive, the public. There appears no such proof in the record before us,⁷  but do we know there might not have been, had the court below been of the view that federal rather than state law applied? The same result may occur on remand, but this we do not know, particularly in a case where both parties believed until midway during the trial that a valid copyright existed, and that such copyright issue was fundamental and controlling.

Finding no California law, the court below reasoned that a substantial duplication would be actionable; that a partial duplication of an important part might be; but that here "plaintiff Duffy's duplicated performance adds little or no value to the records," (Tr. 63) and that therefore there could be no recovery. "To award relief," said the trial court, upon such a de minimis misappropriation, "would, in effect, give recognition to plaintiffs' valuable property right in the entire instruction course which they lost by failing to comply with the strict but simple requirements of the copyright laws." (Tr. 63)

We believe such reasoning should not be followed in determining whether there had been actionable misappropriation. Either there had been such actionable misappropriation, or there had not been. If the former, no matter how slight, a cause of action existed. If the damage was so slight as to be de minimis, that rule would justify either a judgment for defendant, or more preferably (because more accurate), an award of nominal damages, such as one dollar or one cent. In other words, the court's problem was one of remedies, to be arrived at only after a determination that actionable misrepresentation existed.

We reverse the judgment in so far as it holds the copyright invalid, and vacate that part of the judgment concerning unfair competition; and remand for further proceedings not inconsistent with this opinion.