Summary
holding that state regulation of unfair competition preempted as to matters falling within broad confines of the Copyright Act
Summary of this case from Vault Corp. v. Quaid Software Ltd.Opinion
Civ. A. No. 76-533.
June 1, 1976.
David H. Marion, Donald L. Weinberg, David H. Weinstein, Kohn, Savett, Marion Graf, P.C., Philadelphia, Pa., for plaintiff.
Alan J. Davis, Robert C. Podwil, Mark A. Aronchick, Wolf, Block, Schorr Solis-Cohen, Philadelphia, Pa., for defendant.
OPINION
This action centers around two elusive and uncertain processes, handicapping horse races and application of the copyright law. Plaintiff, publisher of the Daily Racing Form (hereafter " Form"), claims that defendant's publications infringe upon its copyrights and violate state unfair competition laws. Plaintiff seeks a preliminary injunction to stop the alleged infringements. We will deny the motion.
With one minor exception. Defendant stipulated to the entry of a preliminary injunction as to one small aspect of this case.
The Form, which is published either six or seven days per week, contains, inter alia, a section entitled Past Performances. A sample of Past Performances is reproduced in the appendix to this opinion. This section contains a wealth of information about horse races which are to be run at various tracks around the country. The information compiled in Past Performances includes certain facts about each race, a mass of biographical data for each horse entered in the race, and, in horizontal rows, detailed information concerning up to the ten most recent races in which the horse has been entered.
Depending upon whether there are Sunday races.
Included in the facts about each race are the distance of the race, location of the start and finish, maximum weight, type of race, purse and qualifications for entry.
Among this data are the owner, pedigree, age, sire, dam, grandsire, breeder, trainer and birthplace of the horse. Also included are the amount the horse has earned for the present and previous year, and the number of finishes in the money by the horse over the two-year span.
This information includes, for each race, the date of the race, track, track condition, length and type of race, jockey, weight carried, position of the horse at various checkpoints and how far behind the leaders it was. Also given is information about which horses led at various stages in the race, their times, and the top three finishers. The return on a $2 bet on the winner is given along with a one or two word description of the horse's performance in the race. Finally, at the bottom of the ten or fewer races so covered, certain data is given about the horse's latest workouts.
The information published in plaintiff's paper is gathered at considerable expense and effort. Plaintiff has employees at all operating tracks in North America and receives reports from them for each race. Plaintiff compiles and maintains these statistics using data processing equipment at its plant in New Jersey. The raw data is in the form of racing charts, and it is from these charts that plaintiff makes up its Past Performances.
These charts show the positions of each of the horses at various checkpoints during the race.
Plaintiff has obtained proper copyright registration for all relevant issues of the Form. There is no dispute as to the validity of plaintiff's copyright of the Form and, more specifically, Past Performances. See Triangle Publications, Inc. v. New England Newspaper Publishing Co., 46 F. Supp. 198, 201-02 (D.Mass. 1942).
Defendant publishes a newspaper known as Sports Eye. This paper includes a section known as Fast Performances. In addition Fast Performances is published and sold separately. Defendant has been publishing Fast Performances since June, 1975. A copy of Fast Performances is included in the appendix.
Fast Performances contains some thirty-two categories in four broad areas for each race covered. For each such race, Fast Performances names only those horses which fall into these categories. For example, one category is "Beaten Within One Length of Winner Last Race." Every horse that falls within this category is listed for each race. Other categories are comparative, such as "Fastest Comparative Speed in Recent Races." Thus, unlike Past Performances which gives a plethora of facts about each and every horse entered in a given race, Fast Performances only mentions a given horse if it falls within one or more of its categories.
It is clear that defendant obtains the information which it uses to prepare Fast Performances from plaintiff's publication. When the Form is first published, an employee of defendant purchases a copy and, using blank forms, prepares a draft copy of Fast Performances. The information is then telephoned to defendant in New York.
Joel Matusow, a former employee of plaintiff, now working for defendant, purchases the Form and prepares the charts for Fast Performances.
There is conflicting evidence about the degree of judgment involved in preparing Fast Performances from Past Performances. Defendant's employee was apparently able to prepare an issue of Fast Performances in less than an hour and, upon occasion, in fifteen or twenty minutes. At times he would be eating dinner or talking simultaneously with his preparation of the charts.
On the other hand, the editor of the Form, Fred Grossman, attempted from the stand to predict the entries that would be made in certain categories in Fast Performances from an examination of his paper, Past Performances. Mr. Grossman made a substantial number of errors in trying to do this. For example, in the category, "Fastest Comparative Speed in Recent Races," Mr. Grossman only picked four of the nine entries correctly.
Given this conflicting evidence, and the early stage of the proceedings, we do not think it wise to attempt to resolve this judgmental issue. Resolution is not critical to the present determination on whether a preliminary injunction will issue. Should it become relevant at a final hearing, further discovery should enable the parties to shed more light on this subject.
I. Copyright Infringement
The first hurdle which plaintiff must clear before it can obtain a preliminary injunction is a clear showing of probability of success on the merits. Robert Stigwood Group Limited v. Sperber, 457 F.2d 50, 55 (2d Cir. 1972); L. Batlin Son, Inc. v. Snyder, 394 F. Supp. 1389, 1390 (S.D.N.Y. 1975), aff'd, 536 F.2d 486, 44 U.S.L.W. 2502 (2d Cir. April 12, 1976) (en banc). Generally, once a copyright holder has made such a showing, there is a presumption of irreparable harm. American Metropolitan Enterprises, Inc. v. Warner Bros. Records, 389 F.2d 903, 905 (2d Cir. 1968). While the most recent Third Circuit decision would appear to require some affirmative showing of irreparable injury even in copyright cases, Kontes Glass Co. v. Lab Glass, Inc., 373 F.2d 319, 320 (3d Cir. 1967), we need not resolve this issue because we have concluded that plaintiff has failed to demonstrate a sufficient probability of success on the merits.
But see Universal Athletic Sales Co. v. Salkeld, 340 F. Supp. 899, 902 (W.D.Pa. 1972), rev'd on other grounds, 511 F.2d 904 (3d Cir.), cert. denied, 423 U.S. 863, 96 S.Ct. 122, 46 L.Ed.2d 92, 44 U.S.L.W. 3204 (1975).
In Universal Athletic Sales Co. v. Salkeld, 511 F.2d 904, 907 (3d Cir.), cert. denied, sub nom. Universal Athletic Sales Co. v. Pinchock, 423 U.S. 863, 96 S.Ct. 122, 46 L.Ed.2d 92, 44 U.S.L.W. 3204 (1975), Judge Weis set out the test for a copyright infringement:
"To establish a copyright infringement, the holder must first prove that the defendant has copied the protected work and, second, that there is a substantial similarity between the two works. The criterion for the latter requirement is whether an ordinary law observer would detect a substantial similarity between the works."
In applying this test it must be remembered that while the form or mode of expressing an idea (or in this case data) may be copyrighted, the data or ideas may not be. Salkeld, supra, at 908; see Affiliated Hospital Products, Inc. v. Merdel Game Manufacturing Co., 513 F.2d 1183 (2d Cir. 1975).
For the purposes of copyright infringement, data and ideas are treated as equivalents. See Rosemont Enterprises, Inc. v. Random House, Inc., 366 F.2d 303, 310 (2d Cir. 1966), cert. denied, 385 U.S. 1009, 87 S.Ct. 714, 17 L.Ed.2d 546 (1967).
As to the first part of the infringement test, there is no doubt that defendant has made use of the plaintiff's copyrighted materials. That fact is not in dispute.
It is at the second step, however, where plaintiff stumbles. Plaintiff's publication details a mass of raw data. Defendant's paper gives no raw data but rather has selected certain categories which may be of interest to the horseracing fan and has shown which horses fall into those categories. Plaintiff does not attempt to make any comparisons or judgments about the horses entered in a given race beyond that available in the raw data; defendant's publication is in essence a comparison of the horses in any one race. Both in visual and factual apprehension, as an examination of the appendix demonstrates, the two papers differ substantially. In saying this we reject plaintiff's argument that defendant does nothing more than translate the numbers and symbols in Past Performances. While defendant uses the information in Past Performances to prepare its charts, an examination of the two makes it evident that Fast Performances is not merely a translation of Past Performances. Adoption of plaintiff's position would mean that every time a copyrighted work is copied, there would be an infringement. This view would render the requirement of substantial similarity meaningless and nugatory. Cf. Affiliated Hospital Products, supra, at 1188-89.
The parties differ on who the "ordinary lay person" that judges the two works should be. Plaintiff contends that it has to be those for whom the papers are prepared — horseracing fans. See Arnstein v. Porter, 154 F.2d 464, 473 (2d Cir. 1946). The opinion of the court in Salkeld is somewhat ambiguous, though the court itself proceeded to judge the similarities and differences between the disputed items. We think that regardless of whether the observer is familiar with the sport or not, there is not a substantial similarity between the two papers.
We are not certain that plaintiff's contention that its expert could easily, indeed mechanically, convert the information in Past Performances into the categories in Fast Performances, even if true, is at all relevant on the issue of substantial similarity vel non. "[D]issection and expert testimony * * * are irrelevant when the issue turns to unlawful appropriation." Salkeld, supra at 907.
Plaintiff's real complaint in this case, as it was in Salkeld, is defendant's use of the Form, without significant cost, to prepare its own publication — a publication which then competes in the marketplace with plaintiff's paper. But, the answer is, as it was in Salkeld, that it is only the method or form for expressing the data that is copyrightable. See Affiliated Hospital Products, supra, at 1188-89. And on the present state of the record, plaintiff has not demonstrated a copyright infringement of its mode of disseminating the horseracing data it gathers.
II. Unfair Competition
Plaintiff also asserts that the actions engaged in by defendant constitute unfair competition. This cause of action was recognized and expounded upon by the Supreme Court in International News Service v. Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211 (1918). Since that time, however, the Court has cut back substantially on the protection which a state may afford under the rubric of unfair competition. See Sears, Roebuck Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964); Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964).
The Sears-Compco decisions have been understood as holding that state regulation of unfair competition is pre-empted as to matters falling within the broad confines of the copyright clause of the United States Constitution. U.S. Const. Art. I, § 8. The language of the Court in Compco was quite specific, 376 U.S. at 237, 84 S.Ct. at 782:
"Today we have held * * * that when an article is unprotected by a patent or copyright, state law may not forbid others to copy that article. To forbid copying would interfere with the federal policy, found in Art. I, § 8, cl. 8, of the Constitution and in the implementing federal statutes, of allowing free access to copy whatever the federal patent and copyright laws leave in the public domain."See also Columbia Broadcasting System, Inc. v. DeCosta, 377 F.2d 315, 318-19 (1st Cir.), cert. denied, 389 U.S. 1007, 88 S.Ct. 565, 19 L.Ed.2d 603 (1967); B.H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d 1254, 1258-59 (5th Cir. 1971).
Plaintiff urges that the Supreme Court's decision in Goldstein v. California, 412 U.S. 546, 93 S.Ct. 2303, 37 L.Ed.2d 163 (1973), has restricted the Sears-Compco pre-emption doctrine to only those situations where the fundamental federal policy present in the copyright laws would be harmed. Arguing that such is not the case here, plaintiff asserts its right to injunctive relief. We think plaintiff has misread and misapplied Goldstein. Goldstein presented the question of whether a state could prohibit record piracy where Congress had not yet acted in the field. That is, although copying of records was an area which fell within the perimeters of the copyright clause, no federal law had been enacted regulating the conduct in question. Goldstein merely limited Sears-Compco, holding that the copyright and supremacy clauses by themselves, in the absence of congressional expression, did not prohibit any state incursions into the area. At the same time, the Court stated:
In 1971, Congress passed a statute to deal with record piracy. Pub.L. 92-140, 17 U.S.C. § 101 (Supp. I, 1971). However, the effective date of the statute was after the underlying events in Goldstein, as the Supreme Court explicitly pointed out. Goldstein, supra, 412 U.S. at 552 and n. 7, 93 S.Ct. 2303.
"Finally, we have concluded that our decisions in Sears and Compco, which we reaffirm today, have no application in the present case, since Congress has indicated neither that it wishes to protect, nor to free from protection, recordings of musical performances fixed prior to February 15, 1972." 412 U.S. at 571, 93 S.Ct. at 2317.
In the instant case Congress has taken action to afford copyright protection to the paper which plaintiff publishes. This is precisely the situation where the Sears-Compco pre-emption doctrine remains applicable. Otherwise, "a conflict would develop if a State attempted to protect that which Congress intended to be free from restraint or to free that which Congress had protected." Goldstein, supra 412 U.S. at 559, 93 S.Ct. at 2311. We find further support in the recent case of Jacobs v. Robitaille, 406 F. Supp. 1145 (D.N.H. 1976). There, on indistinguishable facts, the court stated:
While there remain some exceptions to the pre-emption doctrine, particularly in the realm of "deceit", see, e.g., Compco, supra 376 U.S. at 238, 84 S.Ct. 1162, plaintiffs have not made any showing that defendant's conduct falls within this area. Indeed, plaintiffs expert conceded that he was unaware of anybody who confused the two papers.
"I do not believe that Goldstein can be read to allow the states, under the aegis of their common law, to exercise control over `writings' which are copyrightable. * * *
"I find that the advertisements were copyrightable `writings' and that the Sears-Compco decisions, even as refined by Goldstein, preempts [ sic] a state action for unlawful competition." 406 F. Supp. at 1153.
We conclude that plaintiff has not made the requisite showing of likelihood of success on the merits. Since there is no place or show window in federal court, the request for a preliminary injunction must be denied.
APPENDIX
I. Past Performances
II. Fast Performances
ORDER
AND NOW, this 1st day of June, 1976, it is ORDERED that:(1) defendant, its officers, agents and employees who receive actual notice hereof by personal service or otherwise be and hereby are RESTRAINED and ENJOINED until further order of this court from duplicating in any format, part or all of the data base maintained and utilized by plaintiff in compiling and preparing Past Performances; and
(2) in all other respects plaintiff's motion for a preliminary injunction be and hereby is DENIED.