`
`No. _________
`
`================================================================
`
`In The
`Supreme Court of the United States
`
`--------------------------------- ---------------------------------
`
`FROST-TSUJI ARCHITECTS,
`
`Petitioner,
`
`v.
`
`HIGHWAY INN, INC., et al.,
`
`Respondents.
`
`--------------------------------- ---------------------------------
`
`On Petition For A Writ Of Certiorari
`To The United States Court Of Appeals
`For The Ninth Circuit
`
`--------------------------------- ---------------------------------
`
`PETITION FOR WRIT OF CERTIORARI
`
`--------------------------------- ---------------------------------
`
`RANDALL K. SCHMITT
`Counsel of Record
`MCCORRISTON MILLER MUKAI MACKINNON LLP
`Five Waterfront Plaza, 4th Floor
`500 Ala Moana Boulevard
`Honolulu, Hawai‘i 96813
`(808) 529-7300
`schmitt@m4law.com
`Counsel for Petitioner
`
`================================================================
`COCKLE LEGAL BRIEFS (800) 225-6964
`WWW.COCKLELEGALBRIEFS.COM
`
`
`
`
`
`i
`
`QUESTIONS PRESENTED
`
`
`There is a disparity between the circuits as to explicit
`exclusive rights afforded by the Architectural Works
`Copyright Protection Act (“AWCPA”) which has not
`been previously reviewed by this Court. 17 U.S.C.
`§§ 102 and 106 recognize “architectural works” as a
`designated special Class with explicit exclusive rights
`by Act of Congress. The First, Third, Fourth, Sixth, and
`Eleventh Circuits review their cases recognizing the
`rights of the copyright author, while the Fifth, Seventh,
`and Ninth Circuits advance the standard of implied
`license, which is not a limitation or exception under
`§ 120.
`
`1. Whether judicial grant of an unremunerated,
`involuntary, sua sponte implied license, is allowed to
`negate the explicit exclusive rights in “architectural
`works” to do and to authorize the bundle of rights
`under 17 U.S.C. § 106; contrary to 17 U.S.C. § 201(e),
`and in violation of U.S. Constitution Art. 1, § 8, Clause
`8, and against the congressional mandates of AWCPA.
`
`2. Whether the Ninth Circuit disregarded this Court
`by failing to recognize misconduct and illegal acts that
`nullify any license, in determining fee awards in a
`copyright infringement case, as decided in Kirtsaeng v.
`Wiley & Sons, 579 U.S. ___, 136 S.Ct. 1979, 2016 WL
`3317564.
`
`3. Whether removal of indications of attribution
`without the author’s knowledge or authorization, on
`
`
`
`ii
`
`QUESTIONS PRESENTED – Continued
`
`
`registered copyrighted work, before first publication
`of the building, stripping the architect’s Titleblocks
`and copyright management information (“CMI”), is a
`violation of the Digital Millennium Copyright Act
`(“DMCA”).
`
`
`
`iii
`
`LIST OF PARTIES
`
`
`
`Frost-Tsuji Architects (“Frost-Tsuji” or “FTA”),
`Petitioner
`Highway Inn, Inc. (“HII”)
`Ho‘ola Mau, LLC (“HM”)
`Bryce Uyehara, A.I.A., Inc. (“Uyehara”)
`Iwamoto and Associates, LLC (“Iwamoto”)
`J. Kadowaki, Inc. (“JKI”)
`Palekana Permits, LLC (“Palekana”)
`Bargreen Ellingson of Hawaii, Inc. (“Bargreen”)
`Respondents
`
`
`STATEMENT PURSUANT TO RULE 29.6
`Frost-Tsuji Architects is a partnership registered
`
`under the laws of the States of California and Hawai‘i.
`
`
`
`iv
`
`TABLE OF CONTENTS
`
`Page
`QUESTIONS PRESENTED ................................
`i
`LIST OF PARTIES ..............................................
`iii
`STATEMENT PURSUANT TO RULE 29.6 .........
`iii
`INTRODUCTION ................................................
`1
`OPINIONS AND ORDERS BELOW ....................
`2
`STATEMENT OF JURISDICTION .....................
`4
`STATUTORY PROVISIONS INVOLVED ...........
`4
`STATEMENT OF THE CASE..............................
`5
` 1. Review Of Key Factual Points ...................
`5
` 2. Review Of Key Procedural Points ............. 11
`REASONS FOR GRANTING THE PETITION .... 14
`
`I. The Lower Courts, By Imposing An Implied
`Non-Exclusive License, Are Violating The
`U.S. Constitution And The AWCPA ............ 15
` II. The Courts Of Appeals Are In Disarray
`About How To Treat “Architectural Works”
`Under The AWCPA .................................... 17
` III. The Lower Courts’ Decisions Contravene
`This Court’s Established Precedent In
`Kirtsaeng By Failing To Address Its
`Directives ................................................... 27
` IV. This Case Presents An Ideal Vehicle To
`Consider Important Questions Of Federal
`Law Which Affect A Major Sector of The
`U.S. Economy ............................................. 31
`CONCLUSION ..................................................... 37
`
`
`
`v
`
`TABLE OF CONTENTS – Continued
`
`Page
`
`APPENDIX TABLE OF CONTENTS
`Memorandum Opinion of the Ninth Circuit
`entered on October 26, 2017 ............................ App. 1
`Order Granting Judgment in Favor of all
`Defendants with Respect to Count IV of the
`Second Amended Complaint; Order Denying
`Partial Summary Judgment with Respect to
`Count V of the Second Amended Complaint;
`Order Denying as Moot Defendant J.
`Kadowaki, Inc.’s Motion for Partial Summary
`Judgment as to Statutory Damages and
`Attorneys’ Fees pursuant to Count IV and
`Motion to Continue that Motion; Order
`Denying motion to File Third-Amended
`Complaint entered on August 26, 2014 ........... App. 6
`Order Granting Partial Summary Judgment to
`Defendants with Respect to Count V of the
`Second Amended Complaint entered on
`November 7, 2014........................................... App. 44
`Order Granting Judgment on the Pleadings on
`Count VI in Favor of Highway Inn and Ho‘ola
`Mau; Order Granting Partial Summary
`Judgment in Favor of Defendants Highway
`Inn, Inc., and Ho‘ola Mau, LLC, on Any Civil
`Conspiracy Claim in Count VII Based on a
`Violation of Plaintiff Frost-Tsuji Architects’
`Copyrights; Order Granting Judgment on the
`Pleadings in Favor of Highway Inn and Ho‘ola
`Mau on Any Portion of Count VII Based on
`Tortious Interference entered on November 7,
`2014 ................................................................ App. 64
`
`
`
`vi
`
`TABLE OF CONTENTS – Continued
`
`Page
`
`Order Denying Motion for Reconsideration of
`Order Filed on November 7, 2014, filed on
`January 21, 2015 ............................................ App. 72
`Order
`Denying
`Second Motion
`for
`Reconsideration Concerning Count IV, filed
`on January 23, 2015 ....................................... App. 82
`Findings and Recommendation to Grant in Part
`Defendants’ Motions for Attorneys’ Fees and
`Costs entered on February 1, 2016 ................ App. 94
`Order Adopting
`the Magistrate Judge’s
`Findings and Recommendation to Grant in
`Part Defendants’ Motions for Attorney’s Fees
`and Costs, entered March 30, 2016 ............. App. 143
`
`
`
`vii
`
`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`AHAdamas & Company, P.C. v. Spectrum Health
`Services, Inc., 40 F. Supp. 3d 456 (E.D. Pa.
`2014) ........................................................................ 26
`Armstrong v. Exceptional Child Center, Inc., 135
`S. Ct. 1378 (2015) .................................................... 36
`Assessment Techs. of WI, LLC v. Wiredata, Inc.,
`361 F. 3d 434 (7th Cir. 2004) ....................... 32, 33, 34
`Asset Marketing Systems v. Gagnon, 542 F. 3d
`748 (9th Cir. 2008) ........................................... passim
`Bank of Am. v. Caulkett, 135 S. Ct. 1995 (2015) ........ 36
`Blackie v. Maine, 75 F. 3d 716 (1st Cir. 1996) ............ 26
`Breffort v. I Had a Ball Co., 271 F. Supp. 623
`(S.D.N.Y. 1967) ........................................................ 28
`Cohen v. Fair Lawn Dairies, Inc., 206 A.2d 585
`(N.J. Super. 1965) .................................................... 30
`Effects Assocs. Inc. v. Cohen, 908 F. 2d 555 (9th
`Cir. 1990) ........................................................... 12, 27
`Estate of Hunn v. Dan Wilson Homes, Inc., 783
`F. 3d 573 (5th Cir. 2015) .......................................... 27
`FM Indus., Inc. v. Citicorp Credit Servs., Inc., 614
`F. 3d 335 (7th Cir. 2010) .......................................... 33
`Foad Consulting Group v. Azzalino, 270 F. 3d
`821 (9th Cir. 2001) ........................... 18, 20, 22, 24, 27
`Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) ...... passim
`
`
`
`
`viii
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`Fortnightly Corp. v. United Artists, 392 U.S. 390
`(1968) ................................................................. 15, 16
`Gelboim v. Bank of Am. Corp., 135 S. Ct. 897
`(2015) ....................................................................... 36
`Hanover Architectural Serv., P.A. v. Christian
`Testimony-Morris, N.P., Civ. No. 2:10-5455
`(KM)(SCM), 2015 U.S. Dist. LEXIS 64298
`(D.N.J. May 18, 2015) ........................................ 25, 27
`Henderson v. United States, 135 S. Ct. 1780
`(2015) ....................................................................... 36
`Hevia v. Portrio Corp., 602 F. 3d 34 (1st Cir. 2010) ....... 26
`I.A.E., Inc. v. Shaver, 74 F. 3d 768 (7th Cir. 1996) ...... 27
`Jennings v. Stephens, 135 S. Ct. 793 (2015) ............... 36
`John G. Danielson, Inc. v. Winchester-Conant
`Props., Inc., 322 F. 3d 26 (1st Cir. 2003) .............. 19, 26
`Johnson v. Jones, 149 F. 3d 494 (6th Cir. 1998) .. passim
`Johnson v. United States, 135 S. Ct. 2551 (2015) ....... 36
`Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S.
`___, No. 15-375, 2016 WL 3317564 (June 16,
`2016) .................................................................. passim
`Latimer v. Roaring Toyz, Inc., 601 F. 3d 1224
`(11th Cir. 2010) ........................................................ 26
`Mata v. Lynch, 135 S. Ct. 2150 (2015) ........................ 36
`McMullen v. Schultz, 428 B.R. 4 (D. Mass. 2010),
`on reconsideration in part, 443 B.R. 236 (D.
`Mass. 2011) .............................................................. 30
`
`
`
`ix
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`Morningside
`v.
`Inc.
`Nelson-Salabes,
`Development, LLC, 284 F. 3d 505 (4th Cir.
`2002) ................................................................ passim
`T-Peg, Inc. v. Vermont Timber Works, Inc., 459
`F. 3d 97 (1st Cir. 2006) ...................................... 26, 27
`United States v. June, 135 S. Ct. 1625 (2015) ............ 36
`Wei Yan Yan v. 520 Asian Rest. Corp., No. 13-CV-
`2417 KNF, 2015 WL 1026611 (S.D.N.Y. Mar. 9,
`2015) ........................................................................ 30
`
`
`
`CONSTITUTION AND STATUTES
`U.S. Constitution, Art. I, § 8, cl.8 ............................ 4, 15
`17 U.S.C. § 101 .................................................... 4, 9, 18
`17 U.S.C. § 102(a)8) ........................................... 4, 16, 29
`17 U.S.C. § 103(a) .................................................... 4, 29
`17 U.S.C. § 106 .................................................. 2, 15, 16
`17 U.S.C. § 301(b)(4) ............................................... 5, 29
`17 U.S.C. § 505 .................................................... passim
`
`
`
`1
`
`INTRODUCTION
`The classic example of circuit non-uniformity is
`
`where a party would prevail in one court of appeals but
`lose on precisely the same issue in another court of
`appeals for the sole reason that the interpretation of
`federal laws which should be uniform in the courts of
`appeals differ by application. That is precisely the case
`here. Further, the Ninth Circuit has refused to apply
`this Court’s established precedent regarding the
`awarding of fees in copyright infringement cases by
`failing to account for litigation misconduct and other
`illegal acts by a party which should have negated and
`nullified any implied license from the outset as
`exceeding any scope of intent.
`
`FTA sued HII and the other Defendants herein for
`
`copyright infringement. While the District Court
`explicitly acknowledged FTA’s valid copyright, it
`imposed an implied non-exclusive license to HII and
`its unauthorized assignee, HM, and other third-party
`Respondents. This violated the exclusive rights
`granted solely to authors of copyrighted architectural
`works under the Architectural Works Copyright
`Protection Act (“AWCPA”). The District Court then
`compounded this error by refusing to acknowledge that
`each and every issuance of a copyrighted work is a new
`copyright by definition and that the removal of FTA’s
`title block and CMI
`followed by the copying,
`reproduction, distribution and use of FTA’s work were,
`in and of themselves, each a violation of the Digital
`Millennium Copyright Act (“DMCA”) at each step in
`the architectural design and construction process. At
`
`
`
`2
`
`no time did Frost-Tsuji agree to part with any of its
`“bundle of rights” under 17 U.S.C. § 106 to any party.
`The Defendants then proceeded to covertly use the
`architectural work in violation of the copyright owner’s
`exclusive rights
`for construction of that work,
`specifically protected by
`registered
`copyrights
`protection in advance of completion of that built work,
`all the while denying any usage whatsoever when the
`Restaurant was opened to the public. In fact, Frost-
`Tsuji first learned of the expropriated use of its work
`only after 5 months of illicit construction, without
`benefit of a bonafide Building Permit. The Defendants
`continued denying expropriation of FTA’s work, until
`another 10 months into the litigation.
`
`Finally, despite diligent efforts to uncover the
`
`Defendants’ litigation misconduct and illegal acts,
`including HII’s explicit failure to produce email
`admissions concerning its knowledge that it did not
`have a license to use FTA’s work (the “April Emails”),
`the lower courts failed to even review this Court’s
`Kirtsaeng decision concerning the effect of litigation
`misconduct in awarding of fees in a copyright
`infringement case.
`
`--------------------------------- ---------------------------------
`
`OPINIONS AND ORDERS BELOW
`The Memorandum Opinion of the Ninth Circuit
`
`affirming the various grants of summary judgement in
`favor of the Defendants and the Defendants’ fees
`requests were unpublished. App. 1.
`
`
`
`3
`
`The trial court Order Granting Judgment in Favor
`
`of all Defendants with Respect to Count IV of the
`Second Amended Complaint; Order Denying Partial
`Summary Judgment with Respect to Count IV of the
`Second Amended Complaint; Order Denying as Moot
`Defendant J. Kadowaki, Inc.’s Motion for Partial
`Summary Judgment as to Statutory Damages and
`Attorneys’ Fees pursuant to Count IV and Motion to
`Continue that Motion; Order Denying Motion to File
`Third-Amended Complaint entered on August 26, 2014
`is App. 6
`
`The trial court Order Granting Partial Summary
`
`Judgment to Defendants with Respect to Count V of
`the Second Amended Complaint entered on November
`7, 2014 is App. 44.
`
`The trial court Order Granting Judgment on the
`
`Pleadings on Count VI in Favor of Highway Inn and
`Ho‘ola Mau; Order Granting Partial Summary
`Judgment in Favor of Defendants Highway Inn, Inc.,
`and Ho‘ola Mau, LLC, on Any Civil Conspiracy
`Claim in Count VII Based on a Violation of Plaintiff
`Frost-Tsuji Architects’ Copyrights; Order Granting
`Judgment on the Pleadings in Favor of Highway Inn
`and Ho‘ola Mau on Any Portion of Count VII Based on
`Tortious Interference entered on November 7, 2014 is
`App. 64.
`
`for
`The trial court Order Denying Motion
`
`Reconsideration of Order Filed on November 7, 2014,
`Filed on January 21, 2015 is App. 72.
`
`
`
`4
`
`The trial court Order Denying Second Motion for
`
`Reconsideration Concerning Count IV,
`filed on
`January 23, 2015 is App. 82.
`
`The trial court Findings and Recommendation to
`
`Grant in Part Defendants’ Motions for Attorneys’ Fees
`and Costs entered on February 1, 2016 is App. 94.
`
`The trial court Order Adopting the Magistrate
`
`Judge’s Findings and Recommendation to Grant in
`Part Defendants’ Motions for Attorneys’ Fees and
`Costs, entered March 30, 2016 is App. 143.
`
`--------------------------------- ---------------------------------
`
`STATEMENT OF JURISDICTION
`The court of appeals rendered its decision on
`
`October 26, 2017. This Court has jurisdiction under 28
`U.S.C. § 1254(1).
`
`--------------------------------- ---------------------------------
`
`STATUTORY PROVISIONS INVOLVED
`U.S. Constitution, Art. I, § 8, cl. 8
`17 U.S.C. § 101
`17 U.S.C. § 102(a) and (b)
`17 U.S.C. § 103(a)
`17 U.S.C. § 106
`17 U.S.C. § 120
`17 U.S.C. § 201(b), (c) and (e)
`17 U.S.C. § 202
`
`
`
`
`
`
`
`
`
`
`
`
`5
`
`
`
`
`
`
`
`
`
`17 U.S.C. § 301(a)
`17 U.S.C. § 301(b)(3) and (4)
`17 U.S.C. § 501
`17 U.S.C. § 504
`17 U.S.C. § 505
`17 U.S.C. § 1202
`17 U.S.C. § 1203
`
`--------------------------------- ---------------------------------
`
`STATEMENT OF THE CASE
`1. Review Of Key Factual Points
`
`Appellant Frost-Tsuji filed suit against HII and
`the
`other Defendants-Respondents
`(collectively
`“Defendants”) claiming that the Defendants had
`individually and collectively engaged in infringement
`of FTA’s
`federally registered copyrights
`(both
`architectural work including the building completed
`and architectural drawings) for FTA’s design and
`layout of a commercial restaurant (Highway Inn)
`(“Restaurant”) located in Honolulu, Hawaii. HII had a
`written agreement with FTA to prepare the design and
`layout of the Restaurant and to act as the architect of
`record from concept through the completion of
`construction to Certificate of Occupancy. Pet. App. 9.
`HII also held onto an AIA B101-2007 Contract
`concurrently and throughout the design and issuance
`of the completed construction Bid Set and ultimately
`acknowledged by both parties as the “greenmarked”
`copy with both Frost-Tsuji and HII returning to each
`
`
`
`6
`
`other, section by section, agreed upon clauses. Pet. App.
`9-13.
`
`On or about December 1, 2012, HII executed an
`
`Architectural and Interior Design Services Letter of
`Agreement for tenant improvements, in which the
`parties agreed that Frost-Tsuji would serve as the
`architect of record and the interior design consultant
`for the Project (“LOA”). Under the terms of the LOA,
`Frost-Tsuji owns “all copyrights to all items designed”:
`
`9. Copyrights: Note that per AIA standard
`contract, Architect’s drawings, specifications,
`and all design work are “instruments of
`service,” and all copyrights to all items
`designed are for the specific jobsite address
`only, and design copyrights, formulas, custom
`furniture, fixtures or fabrics remain under the
`ownership of the Architect. All samples, with
`the exception of any samples of high value,
`paid by the Owner shall also remain the
`property of the Architect’s Library. (Emphasis
`added.)
`
`See Pet. App. 10.
`
`The referenced “AIA standard contract” provides a
`
`non-exclusive license to the owner of a project to use
`copyrighted plans subject, inter alia, to the prompt
`payment of architectural fees for services rendered:
`
`§ 7.3 Upon execution of this Agreement, the
`Architect grants to the Owner a nonexclusive
`license to use the Architect’s Instruments of
`Service solely and exclusively for purposes of
`constructing, using, maintaining, altering and
`
`
`
`7
`
`adding to the Project, provided that the
`Owner substantially performs its obligations,
`including prompt payment of all sums when
`due, under this Agreement. . . . The license
`granted under this section permits the Owner
`to authorize the Contractor, Subcontractors,
`Sub-subcontractors, and material or equipment
`suppliers, as well as the Owner’s consultants
`and separate contractors,
`to reproduce
`applicable portions of the Instruments of
`Service solely and exclusively for use in
`performing services or construction for the
`Project. . . . (Emphasis added.)
`
`See Pet. App. 12-13.
`
`The AIA standard contract which was held by both
`
`parties during the creation of the work also required
`that an owner obtain the written consent of the
`architect prior to transferring the license to any other
`party and that no implied licenses were allowed in any
`case. Pursuant to the terms of the LOA, Frost-Tsuji
`and HII exchanged one and only one draft, known as
`the “greenmark” copy. FTA confirmed within 24 hours
`in writing back to HII that all the sections were
`agreeable. These drafts of an AIA B101-2007 standard
`contract form were intended by both parties during the
`design phases, and at the time of the “Bid Set” (the set
`of plans used by the contractor to prepare its pricing
`on a negotiated basis) completion to replace the LOA
`and a subsequent Additional Services Agreement. Pet.
`App. 10. HII repeatedly requested extensions in time
`to finalize its lease negotiations to the space. Neither
`HII nor Frost-Tsuji ever proposed any revisions to the
`
`
`
`8
`
`standard section governing copyrights or licenses. The
`AIA B101-2007 document was held by HII for the
`concurrent timeframe the architectural work for the
`Bid Set was being completed. FTA turned in the Bid
`Set on the basis that the promises made by HII to
`execute the agreed to terms of the AIA contract
`constituted the intent of the parties to perform their
`respective duties. The sole exception that remained
`was that HII wanted to revise the document to reflect
`a new entity, HM, as the owner of the restaurant. HII’s
`principal acknowledged she specifically would need an
`assignment. The LOA (Art. 13) required that the
`agreement could only be amended in writing. Id. Frost-
`Tsuji never agreed to any assignment.
`
`After HII executed the LOA and during the
`
`subsequent design phases, HII held the AIA Contract
`while Frost-Tsuji worked extensively to create and
`develop its plans for the Project (“Plans”). Frost-Tsuji
`never agreed to any transfer of license or release of any
`part of its “Instruments of Service” or any of its “bundle
`of rights” under the AWCPA to be used to complete
`their intended work. HII did acknowledge that it
`specifically required an assignment to use any work
`in HM’s name. Simultaneously, HII concealed its
`discussions with the landlord, JKI and Palekana,
`regarding ownership of the copyrights and use of FTA’s
`design and layout.
`
`included the general
`The other Defendants
`
`contractor, JKI; kitchen equipment consultant,
`Bargreen; Iwamoto, the structural engineer; Palekana,
`a certified permit consultant; and the replacement
`
`
`
`9
`
`architect, Uyehara. It is important to note, that all of
`these entities were the same as under FTA with the
`exception of Uyehara. All of the Defendants, except
`Uyehara, had access to FTA’s Computer Aided Design
`(“CAD”) materials and were intimately familiar with
`FTA’s work and knew that it had been created by FTA.
`
`Shortly after presenting HII with its “Bid Set” of
`
`drawings
`(fixed and created on March 1 and
`transmitted on March 5, 2013), HII terminated FTA.
`At this point, HII had only paid approximately 57% of
`the fees owed to FTA while later acknowledging in the
`April Emails that 85% of the work was completed.
`Significantly, those payments did not cover any work
`on the Bid Set, a newly copyrighted work, never issued
`previously to any party. The District Court was
`incorrect
`in
`its summary
`judgment order that
`consideration had been paid as this Bid Set was a
`distinct and separate new work. The point being that
`“paying something” for a January work, also means
`that HII “paid nothing” for the Bid Set as it was issued
`much later under the definition of “created work.” See
`17 U.S.C. § 101. Therefore, FTA was completely within
`its rights to terminate the LOA for cause.
`
`Less than one month later, early in April 2013,
`
`without stating any dissatisfaction of any kind to FTA
`and despite daily emails, HII’s principal covertly
`exchanged emails with HII’s landlord, Kamehameha
`Schools Bishop Estate (“KSBE”),
`in which she
`acknowledged FTA’s ownership of the copyright and
`the need to pay for a license for its use, the so-called
`“April Emails.” These emails were never produced but
`
`
`
`10
`
`sequestered by HII. They were eventually uncovered in
`preparation for trial following a subpoena to KSBE.
`This was after months of HII claiming that it was not
`using FTA’s work and that no such Electronically
`Stored Information (“ESI”) or admissions existed.
`These April Emails were found after HII had certified
`that it had produced all its email. HII was therefore in
`violation of the Magistrate Judge’s court order in
`December 2014, over a year after litigation started.
`Despite Frost-Tsuji’s efforts to expose this critical,
`hidden evidence, the District Court did not sanction
`HII and refused to grant reconsideration on its various
`orders based on this new evidence. The District Court
`compounded this by then rewarding HII for its
`misconduct by awarding it fees.
`
`Following FTA’s termination but prior to the
`
`institution of the underlying action, the Defendants
`made unauthorized copies of FTA’s architectural work,
`stripped it of its attributing Title Blocks and copyright
`management information (“CMI”), and inserted the
`title block
`for the replacement architect. The
`Defendants then copied the design and CAD files,
`thereby reproducing the work without authorization.
`Then the “altered work” was distributed and used to
`obtain the HII lease and construct the Restaurant. All
`of this was done while they claimed not to be using
`FTA’s work but rather a “fresh new design” created by
`the replacement architect, Uyehara. This “altered
`work” was virtually identical as a whole, and exactly
`identical in major portions, to the detailed construction
`documents. Pet. App. 28 n.2. Uyehara requested and
`
`
`
`11
`
`received an indemnification from HII for his use of
`FTA’s work. Even so, he participated
`in the
`Defendants’ charade that this was a “fresh new
`design,” not shown to FTA but not FTA’s work for most
`of the litigation. Construction on the Restaurant
`started in May 2013 without a Building Permit.
`Construction continued without the valid permit and
`in violation of the Building Code, using FTA’s work, for
`5 months through September 2013, approximately 30
`days before substantial completion. This was in spite
`of repeated written “cease and desist” notices from
`FTA’s counsel. The Defendants did all this while
`claiming to be using a “fresh new design” and denying
`any use of or reference to FTA’s work.
`
`
`2. Review Of Key Procedural Points
`
`Ten months after the initiation of the underlying
`lawsuit, FTA and HII filed cross motions for summary
`judgment which were heard simultaneously. FTA’s
`basic argument was that: (1) its agreement and intent
`with HII was for a long term relationship for the full
`term of the project; (2) its agreement included
`standard AIA contract terms which granted FTA
`exclusive ownership of its work and specifically stated
`that FTA was the owner of all copyrights; (3) HII had
`not paid FTA for its work; (4) FTA revoked for cause,
`based on non-payment, any license which might have
`once existed upon termination; and (5) FTA did not
`agree to the licensing of or use of its work to any other
`individual or entity.
`
`
`
`12
`
`HII argued an implied license later and only after
`
`the concept had been raised sua sponte by the District
`Court. This was after months of HII asserting that it
`had not used FTA’s work at all. The District Court
`contended that payment had been made for the
`entirety of the work while simultaneously noting that
`that HII had made only partial payment. Pet. App.
`15-16. HII was therefore allowed to not only use all
`of FTA’s copyrighted work but also to create and
`disseminate derivative works. This was without
`recognition that no payment had been made for the Bid
`Set. HII also asserted the right to assign the license
`without FTA’s permission.
`
`Instead of simply denying both motions, the
`
`District Court decided to deny FTA’s motion and grant
`HII’s motion based upon the finding of an “implied
`non-exclusive license,” primarily relying on Effects
`Assocs. Inc. v. Cohen, 908 F. 2d 555 (9th Cir. 1990), a
`case decided 6 months before the AWCPA was enacted
`by Congress superseding any caselaw of a single
`circuit. The District Court also gave no proper
`consideration of the well established burden of proof
`which in a copyright case rests on the party asserting
`the defense, here HII. The Defendants never met their
`burden to show how Uyehara obtained the CAD files
`(“Altered Work”), as FTA had never transmitted its
`work to another architect. Further, each of the
`Defendants provided declarations that they had
`deleted FTA’s files from their systems, an assertion
`also later proven to be false but ignored by the District
`Court.
`
`
`
`13
`
`Following the partial summary judgments, there
`
`was still a trial pending on other issues in the case.
`During the course of discovery on these other issues,
`close to trial, and despite a formal Court Order by
`the Magistrate Judge, the Defendants’ significant
`litigation misconduct was uncovered but overlooked by
`the District Court despite several attempts to compel
`enforcement. This misconduct included: (1) failing to
`disclose proper ESI and emails between HII and its
`landlord admitting that it did not have rights to the
`copyright and obtaining permission to use the design
`would be a problem as HII’s principal clearly indicated
`in the April Emails that she knew HII had no license
`to use FTA’s work and further negotiation would be
`required for any use of the design; (2) incomplete
`production of materials including CAD architectural
`data without the required ESI meta data which would
`have shown the source of the transmission of CAD data
`files; (3) failing to acknowledge the removal of FTA’s
`title block and CMI until the depositions of Uyehara
`and Skip Elkins of Bargreen; (4) use of FTA’s work in
`contravention of legal construction requirements for
`any use of the work by any party; and (5) disposal of
`powerful mobile phones used to transmit the CAD files.
`Ultimately, a partial settlement was reached for the
`invoiced payments. All of the copyright ownership and
`license issues were preserved on appeal.
`
`Despite the magistrate judge initially denying the
`
`Defendants any fees or costs, the District Court
`overlooked critical misconduct by the Defendants
`including HII’s concealment (even from the District
`
`
`
`14
`
`Court) of the critical April Emails which showed
`that it did not have an implied license to use FTA’s
`work. By copying, distributing, reproducing, and
`constructing the building without the copyright
`author’s permission while denying any need for
`authorization for construction of the Restaurant and
`without any attribution to FTA’s authorship and
`copyright, the Defendants collectively, knowingly
`infringed on FTA’s copyright while undertaking illegal
`acts (e.g., violation of the Building Codes).
`
`--------------------------------- ---------------------------------
`
`REASONS FOR GRANTING THE PETITION
`This Court should grant the petition because: (I)
`
`the lower courts, by imposing an implied non-exclusive
`license, are violating the U.S. Constitution and the
`AWCPA; (II) the courts of appeals are in disarray about
`how to treat “architectural works” under the AWCPA;
`(III) the Ninth Circuits’ decisions contravene this
`Court’s established precedent in Kirtsaeng by failing to
`address the Defendants’ litigation misconduct with
`regard to copyright fee awards; and (IV) this case
`presents an ideal vehicle to consider important
`questions of federal law which affect a major sector of
`the U.S. economy.
`
`
`
`
`
`
`15
`
`I. The Lower Courts, By Imposing An Implied
`Non-Exclusive License, Are Violating The
`U.S. Constitution And The AWCPA.
`The U.S. Constitution empowered Congress with
`
`the right to pass laws to protect copyrights of authors
`in Art. 1, § 8, cl. 8. Congress has done so over the years
`by passing various
`laws which are presently
`incorporated into the Copyright Act memorialized in
`17 U.S.C. et seq., which also now includes the AWCPA
`enacted in December 1990 and the Digital Millennium
`Copyright Act (“DMCA”) enacted in 1998. When
`Congress passed the AWCPA, recognizing a distinct
`class of works, it specifically provided the authors of
`“architectural works” with exclusive rights “to do and
`to authorize” control and publication of their work.
`See 17 U.S.C. § 106. This section gives copyright
`holders certain specific exclusive rights including the
`rights to copy, reproduce, prepare derivative works,
`and distribute the copyrighted work. In this case, this
`involves the registered copyrights for both the
`architectural drawings and the built work itself. The
`lower courts here denied FTA these exclusive rights by
`creating an implied license by judicial grant. This was
`in contravention