Re: CAFC 2008-1001 -- "license to the world must be a bare license" case

[Alexander Terekhov]

LOL. No wonder that the district court judge lost all patience with
exciting lawyering of his former student MS. HALL.

http://www.law.berkeley.edu/news/2002/white.html

"Jeffrey White Nominated for U.S. District Court Bench

Lecturer Jeffrey S. White has been nominated by President Bush to the
federal bench. If confirmed by the U.S. Senate, he will serve as a judge
on the U.S. District Court for the Northern District of California.

White has taught a course in civil trial advocacy at Boalt Hall for more
than 20 years and has won the Roscoe Pound Foundation award for
Excellence in Teaching Trial Advocacy. He is also a litigation partner
at Orrick, Herrington & Sutcliffe in San Francisco.

"Jeff has been an outstanding teacher and mentor to students at Boalt
for decades," says Dean John P. Dwyer '80. "Jeff's nomination recognizes
his impressive legal career, and I believe he would make an excellent
federal judge. We are proud to have Jeff as part of the Boalt
community."

A related story about White's nomination is available in The Recorder
(subscription required)."

http://jmri.sourceforge.net/k/docket/cafc-pi-1/AppellantsReplyBrief.pdf

------
2008-1001
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
ROBERT JACOBSEN,
Plaintiff-Appellant,
v.
MATTHEW KATZER and
KAMIND ASSOCIATES, INC. (doing business as KAM Industries),
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of California in case no. 06-CV-1905,
Judge Jeffrey S. White.
REPLY BRIEF OF PLAINTIFF-APPELLANT ROBERT JACOBSEN
VICTORIA K. HALL
LAW OFFICE OF VICTORIA K. HALL
3 Bethesda Metro
Suite 700
Bethesda, MD 20814
(301) 280-5925
Attorney for Plaintiff-Appellant
February 15, 2008

Table of Contents
I. Introduction and Summary of
Argument...............................................1
II.
Argument...............................................................................................2
1. Katzer and KAMIND Admit Jacobsen Has a Prima Facie Case for Copyright
Infringement....................................................................................................2
2. Katzer and KAMIND Must Show They Have a License—and They Have
Not…
...............................................................................................................3
3. Condition/Covenant Distinction Arguments Do Not Apply Because Katzer
and KAMIND Do Not Have a
Contract..........................................................4
4. Katzer and KAMIND’s Arguments that the Artistic License Does Not
Narrow the Scope
Fail.....................................................................................5
5. Jacobsen Did Not Transfer Ownership to an Exclusive Licensee or to
the Public
Domain.................................................................................................7
6. Katzer and KAMIND’s Arguments are Without
Merit..................................8
a. Katzer and KAMIND’s Cites an Incorrect Standard of Review...........8
b. Other Katzer and KAMIND’s Arguments are Without Merit..............9
III.
Conclusion...........................................................................................14
i
ii
Table of Authorities
Cases
Augustine Med., Inc. v. Progressive Dynamics, Inc., 194 F.3d 1367 (Fed.
Cir.
1999)............................................................................................................4
Avtec Sys., Inc. v. Peiffer, 21 F.3d 568 (4th Cir.
1994)................................11
Considine v. Penguin, U.S.A., No. 91 CV 4405, 1992 WL 183762 (S.D.N.Y.
July 20,
1992)..............................................................................................5
Gilliam v. Am. Broadcasting Cos., 538 F.2d 14 (2d Cir.
1976)......................7
Graham v. James, 144 F.3d 229 (2d Cir.
1998)..............................................5
Greenfield v. Twin Vision Graphics, Inc., 268 F. Supp. 2d 358 (D.N.J.
2003).....................................................................................................................7
Jarvis v. K2, Inc., 486 F.3d 526 (9th Cir.
2007)..............................................7
LGS Architects, Inc. v. Concordia Homes of Nev., 434 F.3d 1150 (9th Cir.
2006)..........................................................................................................11
Rano v. Sipo Press, Inc., 987 F.2d 580 (9th Cir.
1993).................................12
S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir.
1989)............................3
Three Boys Music Corp. v. Bolton, 212 F.3d 477 (9th Cir.
2000)..................9
U.S. Naval Inst. v. Charter Communications, 936 F.2d 692 (2d Cir.
1992)...5
United States v. 1.377 Acres of Land, 352 F.3d 1259 (9th Cir.
2003)............9
Statutes
17 U.S.C. §
204(a)..........................................................................................8
Treatises
David Nimmer, Nimmer on Copyright §
10.02[B][5]..................................11
I. Introduction and Summary of Argument
In his opening brief, Robert Jacobsen made a prima facie case of
copyright infringement and, although not his burden, he showed in detail
that Matthew Katzer and KAMIND Associates, Inc. [hereinafter KAMIND]
could not successfully raise a license defense. Katzer and KAMIND’s
brief does not change that. The main issues are:
Can a matter sound in contract, A9, when there is no contract?
In the absence of a contract, can Katzer and KAMIND show they had a bare
license when they did not act within the restrictions of the Artistic
License?
The answer to both these questions is “No”. Jacobsen addresses these
issues and others which Katzer and KAMIND raised in their brief.
---
Although they deny Jacobsen has made a prima facie case of copyright
infringement, Katzer and KAMIND implicitly admit it. Katzer and KAMIND
concede that Jacobsen is the owner and assignee of the JMRI Decoder
Definition files. Katzer and KAMIND admit they downloaded, modified, and
distributed the Decoder Definition files. These admissions make a prima
facie case of copyright infringement.
1
Katzer and KAMIND cannot successfully raise the license defense.
Jacobsen, Katzer and KAMIND agree the Artistic License as a document
exists, but that is not the issue. The issue is whether Katzer and
KAMIND have a license under the Artistic License. Katzer and KAMIND must
show they have a license, and to do this, they must show how they
obtained it. They do not address this, but skip to the next
issue—whether their activities are within the scope of a license they
purportedly have. Because Katzer and KAMIND are unable to show they have
a license, their arguments are without merit.
Because Jacobsen has made a prima facie case—which Katzer and KAMIND
implicitly admit—and because Katzer and KAMIND are unable to show they
possess a license, Jacobsen is entitled to a preliminary injunction.
This Court should reverse the district court’s opinion and order the
injunction to issue.
II.
Argument
1.
Katzer and KAMIND Admit Jacobsen Has a Prima Facie Case for Copyright
Infringement
Katzer and KAMIND have implicitly admitted Jacobsen stated a prima facie
case for copyright infringement. To make a prima facie case, Jacobsen
2
must show he is the owner or assignee of the copyrighted work, and that
Katzer and KAMIND exercised an exclusive right such as reproduction,
modification, or distribution. S.O.S., Inc. v. Payday, Inc., 886 F.2d
1081, 1085 (9th Cir. 1989). Katzer and KAMIND explicitly deny that
Jacobsen has made a prima facie case, but then admit, for the appeal,
that Jacobsen is owner and assignee of the Decoder Definition files, and
that Katzer and KAMIND downloaded, modified, and distributed the Decoder
Definition files. Appellees’ Brief at 10-11. Because they admit the
elements of a prima facie case of copyright infringement, Katzer and
KAMIND implicitly admit Jacobsen has made a prima facie case. The next
question is whether Katzer and KAMIND can successfully raise the license
defense.
2.
Katzer and KAMIND Must Show They Have a License—and They Have Not
Katzer and KAMIND have not shown they have a license, which they must do
in order to successfully raise the defense. By stating there is a
license and therefore they have one, Katzer and KAMIND conflate the
existence of a license with possession of a license. Again, the issue is
not whether the Artistic License exists as a document. The issue is
whether Katzer and KAMIND have a license. They must show they have a
license.
3
See Augustine Med., Inc. v. Progressive Dynamics, Inc., 194 F.3d 1367,
1370 (Fed. Cir. 1999). In order to do so, they have to identify how they
obtained the license—but they never do.
Jacobsen has shown that Katzer and KAMIND do not have a license under a
contract theory. There was no acceptance on their part creating a
transaction that would arise to a bilateral contract. Appellant’s Brief
at 28-30. There was no acceptance through performance, so there is no
unilateral contract. Id. at 39-41.
Jacobsen has shown that Katzer and KAMIND do not have a bare license.
Again, the burden of showing they have a license is on Katzer and
KAMIND. They provide nothing to show they have a bare license. Katzer
and KAMIND merely skip over to the scope of the license, and cite to
cases involving contracts to argue that their infringement is a breach
of contract. These cases are inapplicable because if there is no
contract, there can be no breach of a covenant to a contract, as
discussed next.
3.
Condition/Covenant Distinction Arguments Do Not Apply Because Katzer and
KAMIND Do Not Have a Contract
Katzer and KAMIND state that any terms they violated are covenants to a
contract and not conditions and thus, any cause of action lies in
contract.
4
But Katzer and KAMIND do not have a contract. There can be no breach of
a covenant to a contract if the contract does not exist. Thus the
primary cases which Katzer and KAMIND rely upon, Considine v. Penguin,
U.S.A., No. 91 CV 4405, 1992 WL 183762, at *1 (S.D.N.Y. July 20, 1992),
U.S. Naval Inst. v. Charter Communications, 936 F.2d 692, 693 (2d Cir.
1992), and Graham v. James, 144 F.3d 229, 233 (2d Cir. 1998), are not
applicable because these cases involve contracts. If the terms are not
covenants, they must be conditions, which Katzer and KAMIND must abide
by when exercising an exclusive right, or else infringe. But Katzer and
KAMIND did not. Their acts of copying, modifying, and distributing
Jacobsen’s files constitute copyright infringement.
4.
Katzer and KAMIND’s Arguments that the Artistic License Does Not Narrow
the Scope Fail
Contrary to the district court’s interpretation, and Katzer and KAMIND’s
arguments, the Artistic License does not permit all forms of
reproduction, modification, and distribution—only specific exercises of
these exclusive rights. When a contract grants license rights, a
condition narrows the scope of a license of an exclusive right, whereas
a covenant is independent of the exclusive right. See Sun Microsystems,
Inc. v Microsoft
5
Corp., 81 F. Supp. 2d 1026, 1031 (N.D. Cal. 2000). Although this Sun
Microsystems precedent relates to a contract, the decision offers
guidance for interpreting bare licenses.1 Here, the Artistic License,
provided with the Decoder Definition files,2 permits verbatim
reproduction if done in a specified manner, and it defines verbatim
reproduction. A370. It also permits modification if the user puts a
prominent notice regarding changes, and takes one of four steps related
to modification or distribution. Id. The Artistic License also permits
distribution, if the user distributes the code in a certain manner. Id.
All these restrictions relate to how the user may exercise an exclusive
right. Thus, these restrictions narrow the scope of the license, such
that any conduct outside the permitted use, as Katzer and KAMIND’s was,
constitutes copyright infringement. Katzer and KAMIND argue to the
1 As noted earlier and in Jacobsen’s earlier brief, because there are no
covenants to a contract when there is no contract, any restriction
becomes a condition such that, if a user does not perform the condition,
the user infringes the copyright.
2 Katzer and KAMIND’s arguments that “[s]ubsequent to the receipt of
these files, the Artistic License attempts to impose restrictions on the
distribution and modification of the files”, Appellees’ Brief at 21, are
without merit because the license is included with the files and the
files refer to the license. See A188 (line 4); A370 (bottom of page).
Furthermore, Katzer knew about the Artistic License and its restrictions
on copying, modifying, and distributing JMRI software, A121 (¶ 35),
A292-A293, so he cannot say he did not know.
6
contrary but even cases which Katzer and KAMIND use to argue that
narrowed scope relates only to a “specific purpose” support this
interpretation. Gilliam v. Am. Broadcasting Cos., 538 F.2d 14, 21 (2d
Cir. 1976) (license restricted unauthorized modification); Jarvis v. K2,
Inc., 486 F.3d 526, 528-29 (9th Cir. 2007) (license restricted time
period that licensee could copy and display photographs); Greenfield v.
Twin Vision Graphics, Inc., 268 F. Supp. 2d 358, 365 (D.N.J. 2003)
(license restricted time period that licensee could display
photographs). Thus, these restrictions narrow the scope of the license
grant. Katzer and KAMIND’s actions outside the scope of the Artistic
License are copyright infringement.
5.
Jacobsen Did Not Transfer Ownership to an Exclusive Licensee or to the
Public Domain
Katzer and KAMIND argue, at different points in their brief, that
Jacobsen granted a non-exclusive license or that Jacobsen dedicated JMRI
software to the public. Appellees’ Brief at 17, 23. By citing case law
involving exclusive licensees, they also imply that Jacobsen granted an
exclusive license, apparently to the public. See id. at 22-23.
First, Katzer and KAMIND did not raise in the district court arguments
relating to an exclusive license or dedication to the public. Second,
7
ownership transfer requires Jacobsen’s signature. See 17 U.S.C. §
204(a). But Katzer and KAMIND put forward no signed document that shows
Jacobsen transferred ownership to any exclusive licensee, or to the
public domain. For these reasons, Katzer and KAMIND fail to show that
Jacobsen has transferred his rights to some exclusive licensee or to the
public domain.
6.
Katzer and KAMIND’s Arguments are Without Merit
a.
Katzer and KAMIND’s Cites an Incorrect Standard of Review
Katzer and KAMIND Associates erroneously state, as facts, various
conclusions of law of the District Court after it applied the law to the
facts. Katzer and KAMIND state the following as “relevant findings of
facts” in their brief.
(4) the JMRI project license provides that a user may copy the files
verbatim or may otherwise modify the material in any way, including as
part of a larger, possibly commercial software distribution (A10-A11);
(5) the scope of the license is intentionally broad (A11); and (6) the
condition that the user insert a prominent notice of attribution does
not limit the scope of the license (A11).
Appellees’ Brief at 3.
All these “findings of facts” are actually conclusions of law the
District Court came to after applying the law to the facts. In order to
apply the law, the
8
District Court had to interpret the license. License interpretation is
not a finding of fact, but a question of law which is generally subject
to de novo review unless the district court uses extrinsic evidence for
interpretation. United States v. 1.377 Acres of Land, 352 F.3d 1259,
1264 (9th Cir. 2003). Here, the district court did not rely on any
extrinsic evidence, but only the terms of the Artistic License. Thus,
the de novo review is the correct standard to use when reviewing key
portions of the District Court’s opinion.
b.
Other Katzer and KAMIND’s Arguments are Without Merit
Katzer and KAMIND make a number of irrelevant arguments, or purportedly
relevant factual statements. Jacobsen addresses them here briefly.
Katzer and KAMIND state Bouwens created the files used with Decoder
Commander, and used only manufacturer data and NMRA information.
Appellees’ Brief at 4. This statement is only relevant if Bouwens
independently created the files with Decoder Commander. See Three Boys
Music Corp. v. Bolton, 212 F.3d 477, 486 (9th Cir. 2000). Katzer and
KAMIND admit that Bouwens didn’t—Bouwens used JMRI’s Decoder Definition
files.
Katzer and KAMIND state Decoder Commander now looks to a new database
and no longer uses the Decoder Definition files. Appellees’ Brief at
9
6. Katzer and KAMIND never provided the database or the spreadsheet to
Jacobsen or the district court. They never showed the district court
they developed the database or spreadsheet independently. They never
showed how they could re-create nearly overnight the work that took a
dozen programmers 5 years to create. Furthermore, it does not matter
what holds the copyrighted material, whether it is XML files, databases,
or anything else. What matters is the variable names, organization,
data, and the like. That’s what Katzer and KAMIND took. That’s why
Jacobsen seeks this injunction.
Katzer and KAMIND state Jacobsen refers to “extra-record” information
when Jacobsen states Katzer and KAMIND continue to infringe. Appellees’
Brief at 6. Jacobsen’s statement is a part of the record. In his filings
before the preliminary injunction hearing, Jacobsen provided
declarations that Katzer and KAMIND had not removed the copyrighted
information—they just got better at concealing it. Compare A116-A120
(all Decoder Definition files used in KAMIND products) with A126 (some
Decoder Definition files used in KAMIND products) with A359-A362 (newest
KAMIND product CD does not work, but older versions do not stop working
as Katzer stated in his declaration; Decoder Definition information
still available on KAMIND’s website). After Jacobsen has shown copyright
10
infringement, Katzer and KAMIND have to show that not only have they
stopped the infringement, but they cannot start it again, in order to
defeat an injunction. LGS Architects, Inc. v. Concordia Homes of Nev.,
434 F.3d 1150, 1153-54 (9th Cir. 2006). Jacobsen is entitled to a
presumption that Katzer and KAMIND continue to infringe, until Katzer
and KAMIND provide proof they have stopped and will not start again.
Katzer and KAMIND state, without citation to the record, that they have
sold only 65 Decoder Commander CDs. Appellees’ Brief at 4 n.1. This
statement is incomplete and misleading because it does not include any
demo versions, other free versions that Katzer and KAMIND have given
away, or other KAMIND product CDs that had the infringing content. See
A123. It also does not include their customers’ use of the infringing
software tool to make infringing copies and modifications.
Katzer and KAMIND argue there is no rescission. Appellees’ Brief at 25.
There was rescission and revocation in September 2006 when Jacobsen sent
a cease and desist letter to Katzer and KAMIND. See Appellant’s Brief at
4, 35, 39. A license unsupported by consideration can be revoked at any
time. Nimmer on Copyright § 10.02[B][5]; Avtec Sys., Inc. v. Peiffer, 21
F.3d 568, 574 n.12 (4th Cir. 1994). A material and substantial breach
gives
11
rise to a right to rescind a contract. See Rano v. Sipo Press, Inc., 987
F.2d 580, 586 (9th Cir. 1993). If there is any mistake, Katzer and
KAMIND’s counsel received in November 2007 another cease and desist
letter, rescinding and revoking any permissions that Katzer and KAMIND
purportedly had. Jacobsen does not understand why Katzer and KAMIND’s
counsel states otherwise.
Katzer and KAMIND state they are not continuing to infringe, and that
they have “in an abundance of caution” stopped using Jacobsen’s files.
Appellees’ Brief at 5. They also stated that after May 2006, the
infringing software tool was no longer available on KAMIND’s website.
Appellees’ Brief at 5-6. Jacobsen found that versions which Katzer
stated would no longer work after March 2007, in fact would work.
A359-A361. Jacobsen also found materials based on JMRI software on
KAMIND’s website. A361-A362. Both Jacobsen and Alex Shepherd stated in
their declarations that they found the infringing software tool
available for download through August 2006, three months after Katzer
said he removed it from the website. A117-A118 (“Template_verifyer.exe”
available for use in June 2006 with “third party templates”—that is,
JMRI Decoder Definition files); A123 (“Smart decoder Editor” could be
downloaded from KAMIND website in late August
12
2006); A242 (screenshot of KAMIND infringing software tool); A447-A448
(A. Shepherd email dated June 2006 describing how he found the
infringing software tool). At the time the appeal was taken, Katzer and
KAMIND had not supplied a working copy of their latest product CD.3 See
A483 (transcript at lines 17-18 in which Katzer and KAMIND refer to
Version 308 and offer it to Jacobsen). Katzer and KAMIND have provided
no evidence that they independently created their new decoder database,
and thus would never return to using Jacobsen’s copyrighted materials.
They have also never stated that their new versions are comparable to
JMRI in terms of the number of decoders offered in the new product. This
is relevant because if JMRI has significantly more decoders than KAMIND
products, KAMIND users would be more likely to continue using the
infringing KAMIND products and the infringing software tool. Thus,
Katzer and KAMIND have not shown they have stopped infringing and would
not return.
3 Jacobsen received a working copy after sending two demand letters to
Katzer and KAMIND in November 2007. He tested it. Although Jacobsen’s
findings are not in the record, and not considered by the district
court, Jacobsen is willing to share those findings with this Court, if
it so chooses. The findings show that the appeal is not moot. Jacobsen
again notes that Katzer and KAMIND bear the burden to show they have
stopped infringement. Jacobsen does not need to show they are continuing
to infringe.
13
14
III.
Conclusion
As noted in his opening brief, Jacobsen has shown he is likely to
succeed on the merits. He has made a prima facie case of copyright
infringement, and Katzer and KAMIND implicitly admit it. Katzer and
KAMIND have been unable to show they have a license. For the foregoing
reasons, Jacobsen respectfully requests this Court to reverse the
judgment of the district court and grant the preliminary injunction.
Respectfully submitted,
DATED: February 15, 2008
By Victoria K. Hall, Esq. (SBN 240702) LAW OFFICE OF VICTORIA K. HALL3
Bethesda Metro Suite 700 Bethesda MD 20814 Telephone: 301-280-5925
Facsimile: 240-536-9142
ATTORNEY FOR PLAINTIFF
JACOBSEN v KATZER, 2008-1001
PROOF OF SERVICE
I hereby certify that on February 15, 2008, I sent two (2) copies of the
Reply Brief of Robert Jacobsen, Plaintiff-Appellant, by first class mail
postage prepaid, to:
R. Scott Jerger
Field Jerger LLP
610 SW Alder St. Suite 910
Portland OR 97205
Attorney for Defendants-Appellees
Anthony T. Falzone
Stanford Law School
Center for Internet & Society
Crown Quadrangle
559 Nathan Abbott Way
Stanford CA 94305-8610
Attorney for Amici Curiae Creative Commons et al.
DATED: February 15, 2008
By Victoria K. Hall, Esq. (SBN 240702) LAW OFFICE OF VICTORIA K. HALL 3
Bethesda Metro Suite 700 Bethesda MD 20814 Telephone: 301-280-5925
Facsimile: 240-536-9142
ATTORNEY FOR PLAINTIFF-APPELLANT
------

regards,
alexander.

--
"12/21/2007 ORDER TO EXTEND TIME FOR DEFENDANT...
 01/22/2008 ORDER TO EXTEND TIME FOR DEFENDANT...
 02/19/2008 ORDER TO EXTEND TIME FOR DEFENDAT(sic)...
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Daniel B. Ravicher...
 02/27/2008 ORDER that Defendants Verizon Communications, Inc. has
until March 14, 2008..."

 -- 1:07-cv-11070-LTS aka Never Beginning "GPL Enforcement" case