REPLY BRIEF OF PETITIONER

Transcription

1 No In The Supreme Court of the United States ANTHONY LAWRENCE DASH, Petitioner, v. FLOYD MAYWEATHER, JR., an individual; MAYWEATHER PROMOTIONS; MAYWEATHER PROMOTIONS LLC, a/k/a Mayweather Promtions LLC; PHILTHY RICH RECORDS INC.; WORLD WRESTLING ENTERTAINMENT INC., Respondents ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT REPLY BRIEF OF PETITIONER John G. Felder, Jr. William A. McKinnon Counsel of Record MCGOWAN, HOOD & FELDER, LLC MCGOWAN, HOOD & FELDER, LLC 1539 Health Care Drive 1517 Hampton Street Rock Hill, South Carolina Columbia, South Carolina (803) (803) Counsel for Petitioner Counsel for Petitioner Thomas L. Moses SOUTHEAST IP GROUP, LLC 13-B West Washington Street Greenville, South Carolina (864) Counsel for Petitioner Dated: March 4, 2014 THE LEX GROUP DC 1825 K Street, N.W. Suite 103 Washington, D.C (202) (800) Fax: (202)

2 i PARTIES TO THE PROCEEDING The named parties to the proceeding in the Fourth Circuit were Petitioner Anthony Dash, and Respondents Floyd Mayweather, Jr., as an individual; Mayweather Promotions; Mayweather Promotions LLC, a/k/a Mayweather Promotions LLC; Philthy Rich Records Inc., and World Wrestling Entertainment Inc. RULE 29.6 CORPORATE DISCLOSURE STATEMENT Petitioner has no parent company and is not a publically traded company.

3 ii TABLE OF CONTENTS Page PARTIES TO THE PROCEEDING... i RULE 29.6 CORPORATE DISCLOSURE STATEMENT... i TABLE OF CONTENTS... ii TABLE OF AUTHORITIES... iii REPLY BRIEF FOR PETITIONER... 1 A. THIS COURT SHOULD GRANT CERTIORARI TO SETTLE THE CIRCUIT CONFLICT AND TO CONFIRM THAT SECTION 504(b) DOES NOT REQUIRE PROOF OF ENHANCED PROFITS AS SET FORTH BY THE FOURTH CIRCUIT... 2 B. THE FOURTH CIRCUIT S INTERPRETATION OF THE COPYRIGHT ACT ESTABLISHES AN UNACCEPTABLE BURDEN FOR DEMONSTRATING VALUE FOR NEW ARTISTS SEEKING TO STOP COPYRIGHT INFRINGEMENT... 7 CONCLUSION... 9

4 iii TABLE OF AUTHORITIES Page(s) CASES Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)... 8 Bonner v. Dawson, 404 F.3d 290 (4th Cir. 2005)... 3, 4, 6 Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514 (2003)... 3, 4, 5 Dash v. Mayweather, 731 F.3d 303 (4th Cir. 2013)... 5 Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505 (9th Cir. 1985)... 3, 6 Frank Music Corp. v. Metro-Goldwyn-Mayer, 886 F.2d 1549 (9th Cir. 1989)... 3, 6 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986)... 8 On Davis v. The Gap, Inc., 246 F. 3d 152 (2001)... 3, 4, 5, 6

5 iv Taylor v. Meirick, 12 F.2d 1112 (7th Cir. 1983)... 3, 6 United States v. Diebold, Inc., 369 U.S. 654 (1962)... 8 STATUTES 17 U.S.C , 2, 8 17 U.S.C. 504(b)... 1, 2, 3 RULE Sup. Ct. R

6 1 REPLY BRIEF FOR PETITIONER This petition presents questions of law that significantly impact the protection and enforcement of Title 17, Untied States Code Section 504, the Copyright Act. Profit and actual damages exist for the sole purpose of deterring against copyright infringement. The Fourth Circuit s failure to enforce monetary repercussions, as statutorily outlined and applied by other circuits, for violations of the Copyright Act begets a deficient promise and guarantee by Congress. This Court should grant certiorari on both questions presented. First, the Fourth Circuit opinion has created a circuit split with the Second, Seventh, and Ninth Circuits with regard to profit damages. Respondents briefs in opposition mask this case as a mere application of a well-established and straightforward standard applied by all circuits, including the Fourth Circuit. Yet, the Fourth Circuit failed to apply the textbook analysis and in the process established unprecedented requirements for demonstrating a causal connection under 504(b). Resp t WWE Brf. at 9. Respondents boilerplate no circuit split assertions ignore the fact that the Fourth Circuit neglected its own precedent and disregarded the Copyright Act by requiring proof of enhanced profits. If the Fourth Circuit s opinion is upheld, blatant copyright infringement will be championed by creating a backdoor for egregious copyright violations without recourse for copyright holders.

7 2 Second, the Fourth Circuit erred in finding Petitioner s composition had no value. The fact that Petitioner s composition was used in a national payper-view broadcast for a nationally known performer demonstrates the inherent value of the composition. For the reasons set forth below, the Court should grant certiorari to decide these important issues and provide needed clarity to the lower courts. A. THIS COURT SHOULD GRANT CERTIORARI TO SETTLE THE CIRCUIT CONFLICT AND TO CONFIRM THAT SECTION 504(b) DOES NOT REQUIRE PROOF OF ENHANCED PROFITS AS SET FORTH BY THE FOURTH CIRCUIT Section 504(b) clearly permits the recovery of any profits... attributable to the infringement. 17 U.S.C. 504(b). To facilitate the recovery of profit damages, there is a burden shifting provision in 504. Id. [T]he copyright owner is required to present proof only of the infringer s gross revenue and then the defendant must respond with the elements of profit attributable to factors other than the copyrighted work. Id. (emphasis added). This scheme not only provides a disincentive for infringement, but also recognizes that evidence of attributable profits garnered from infringement will be solely in the possession of the infringer. The petition explained why the Fourth Circuit s decision under this Court s review was wrong on the merits, Pet. at 8-16, and how other circuits are interpreting 504(b) with a more flexible standard in

8 3 determining whether a causal connection exists as intended by the statute, Pet Petitioner agrees with Respondents that the Second, Seventh, and Ninth Circuits require a copyright plaintiff to prove a causal connection between infringement and profits. See On Davis v. The Gap, Inc., 246 F.3d 152 (2001); Taylor v. Meirick, 712 F.2d 1112 (7th Cir. 1983); Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505 (9th Cir. 1985) ( Frank Music I ); Frank Music Corp. v. Metro-Goldwyn-Mayer, 886 F.2d 1549 (9th Cir. 1989) ( Frank Music II ). This is the fundamental requirement established by 504(b) and was interpreted as such by the Fourth Circuit in Bonner v. Dawson, 404 F.3d 290 (4th Cir. 2005). The Fourth Circuit in Bonner explained a causal connection could be satisfied when: Bonner produced evidence of the profits generated by the leasing agreements in the infringed building. This amount was derived exclusively from the infringed building; no other source contributed to the generated funds. The building generating the funds was designed based upon Bonner s copyright. This is sufficient to satisfy Bouchat s requirement of a causal connection between the infringement and the profit stream. Id. at 294 (citing Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 520 (2003)). The Fourth Circuit, however, in this instant case has

9 4 misconstrued this most basic connection by making the requirements overly burdensome by finding profit damages could not be awarded because Wrestlemania XXIV tickets were sold out prior to the decision to use and infringe on Petitioner s composition because there was no way Petitioner s composition could have increased the profits of a sold-out show. App. 57a. Respondents rely heavily on Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, in alleging that no circuit split exists, however Respondents ignore the fact that Bonner clarified Bouchat s causal connection requirement by allowing a copyright plaintiff more flexibility in demonstrating a causal connection; thereby, mirroring the standards of the Second, Seventh, and Ninth Circuits. Bonner, 404 F.3d at 294. Specifically, Bonner only requires proof of profits garnered from the work in which plaintiff s infringed work was included. 404 F.3d at 294. This standard is the essence of the other circuits. The Fourth Circuit s circumvention of Bonner, in this present case, severs the well-settled national standard and heightens the burden on a copyright plaintiff in the Fourth Circuit. As discussed below, the Second, Seventh, and Ninth Circuits only require that evidence be presented that demonstrates an infringer made profits and a holder s work was infringed upon. In On Davis v. The Gap, Inc., the Second Circuit held that profit damages can be awarded in cases where an infringer derives profits from the sale of a larger product that contains infringed work

10 5 even when a product is not purchased solely for the infringed work. 246 F.3d at 160. The Second Circuit was adamant that it is possible to recover profit damages when infringing work includes a mix of non-infringing content. Id. at 160. The court explained: [I]f a publisher published an anthology of poetry which contained a poem covered by the plaintiff s copyright, we do not think the plaintiff s statutory burden would be discharged by submitting the publisher s gross revenue resulting from its publication of hundreds of titles, including trade books, textbooks, cookbooks, etc. In our view, the owner s burden would require evidence of the revenues realized from the sale of the anthology containing the infringing poem. Id. (emphasis added). Thus, a copyright plaintiff is only required to show profits were derived from the product containing the infringed work. As the Fourth Circuit noted in Bouchat and again in this case, proof of unrelated revenues does not meet the On Davis causation standard. Bouchat, 346 F.3d at (quoting On Davis, 246 F.3d at 160); Dash v. Mayweather, 731 F.3d 303, 327 (4th Cir. 2013). However, unrelated revenues refers only to an infringer s unrelated lines of business, e.g. the hypothetical anthology publisher s other publishing ventures. On Davis, 246 F.3d at 160. In this case, the unrelated revenues rule did not

11 6 require Dash to prove tickets to the WWE show were purchased for the purpose of hearing his composition. The rule only barred Dash from pursuing revenue from the infringers other lines of business, e.g. Mayweather s boxing purses or WWE s action figure sales. The Seventh Circuit follows this same line of reasoning by only requiring a mere showing that a product infringes and there are profits from sales of the product that included the infringed work. In Taylor v. Meirick, the Seventh Circuit explained that for a plaintiff to prove profit damages all that was required for a prima facie showing was showing [defendant s] gross revenues from the sale of the infringing [work]. 712 F.2d at The Ninth Circuit holds that in order to establish an infringer s profits, the plaintiff is only required to prove the defendant s sales. Frank Music I, 772 F.2d at 505. The only distinction between Bonner, On Davis, Taylor, Frank Music I, Frank Music II and the case before this Court is a factual one: the decision to infringe preceded the acquisition of profit in the aforementioned cases and the decision to infringe followed the acquisition of profit in this case. That distinction does not matter. The Second, Seventh, and Ninth Circuits have explained a copyright plaintiff does not have to show the defendant s inclusion of an infringed work was the inducement for consumers to purchase the defendant s infringing work. By ignoring Bonner the Fourth Circuit rejected the national standard and created a new rule requiring a demonstration of enhanced profits that is unsupported by the

12 7 Copyright Act; thereby splitting the circuits on profit damages. The crux of the Second, Seventh, and Ninth Circuits view on profit damages is that a plaintiff is only required to proffer evidence demonstrating that profits were obtained from an event or product that included the holder s work to demonstrate a causal connection. That fact is undisputed in Petitioner s case. No other circuit has ever required a plaintiff to show that the use of his specific work enhanced the infringer s profits, in order to be entitled to profit damages. Respondents cite no authority that contradicts this proposition. Only this Court can resolve the conflict among the circuits regarding the application of the profit damages provision under the Copyright Act and ensure that those provisions are interpreted consistently in the federal courts. B. THE FOURTH CIRCUIT S INTERPRETATION OF THE COPYRIGHT ACT ESTABLISHES AN UNACCEPTABLE BURDEN FOR DEMONSTRATING VALUE FOR NEW ARTISTS SEEKING TO STOP COPYRIGHT INFRINGEMENT. The Fourth Circuit has grossly misconstrued the necessary evidence to demonstrate value for the purpose of proving actual damages under the Copyright Act. Respondents blanket disregard of this issue on the grounds that Petitioner s argument fails to meet the high bar of certiorari is misplaced.

13 8 Resp t WWE Br. at 13. While a petition for a writ of certiorari is rarely granted for errors in factual findings, it is within Petitioner s right to seek certiorari and properly within the scope of this Court s review to both consider and grant certiorari on this issue. See Sup. Ct. R. 10 ( A petition for a writ of certiorari is rarely granted when the asserted error consists of erroneous factual findings or the misapplication of a properly stated rule of law. ). As discussed in Petitioner s brief, by upholding summary judgment, the court found that Petitioner s expert s valuation of actual damages was speculative. App. 18a. Summary judgment can only be granted on actual damages if the composition has no value at all, not simply because the court disagrees with the valuation offered. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). Petitioner s composition has inherent value based solely on the fact that it was chosen over all other available music for a celebrity s appearance on a national television event. This undisputed fact, coupled with the expert report, the Einhorn Report, demonstrates the necessary evidence of value under 504. Petitioner demonstrated the evidence necessary to survive summary judgment and any inferences to be drawn should be made in the favor of Petitioner. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)) ( On summary judgment the inferences to be drawn from the underlying facts... must be viewed in the light most favorable to the party

14 9 opposing the motion. ). Certiorari should be granted to address this unprecedented error. CONCLUSION This case presents an important opportunity for this Court to provide needed uniformity with respect to the standards for determining copyright damages due to infringement, which occurs on a reoccurring basis. Without this Court s attention a plaintiff sitting in the Fourth Circuit is forced to overcome a much higher evidentiary burden to demonstrate a causal connection to obtain profit damages than a plaintiff in the Second, Seventh, or Ninth Circuit. Petitioner urges the Court to grant a writ of certiorari to review the Fourth Circuit s misplaced evidentiary standards in copyright cases. Respectfully submitted, John G. Felder, Jr. MCGOWAN, HOOD & FELDER, LLC 1517 Hampton Street Columbia, SC (803) (803) (fax) jfelder@mcgowanhood.com William A. McKinnon MCGOWAN, HOOD & FELDER, LLC 1539 Health Care Drive Rock Hill, SC (803) (803) (fax) bmckinnon@mcgowanhood.com

15 10 Thomas L. Moses Southeast IP Group, LLC 13-B West Washington St. Greenville, SC (864) (864) (fax)