Case 2:15-cv-01395-TJH-JC Document 64 Filed 09/13/16 Page 1 of 5 Page ID #:1104

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United States District Court
Central District of California
Western Division

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NEWEGG INC.,

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CV 15-01395 TJH (JCx)
Plaintiff,

v.

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EZRA SUTTON, P.A., et al.,

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Defendants.

Order
[48]

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The Court has considered Defendant Sutton’s motion for leave to amend the Final

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Pretrial Conference Order to add the affirmative defense of fair use and Plaintiff

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Newegg’s motion for partial summary judgment, together with the moving and

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opposing papers.

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The Court must take account the following when considering whether to amend

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a Final Pretrial Conference Order: the degree of prejudice to any party, any impact

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which the amendment would have on the conduct of the trial, and any willfulness or bad

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faith by the party seeking the amendment. See Galdamez v. Potter, 415 F.3d 1015,

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1020 (9th Cir. 2005).

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There would be no prejudice to Newegg if the Final Pretrial Conference Order

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is amended because Newegg competently dealt with the affirmative defense in its partial
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summary judgment motion. Next, the amendment would not adversely affect the

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conduct of the trial. Finally, there is no evidence that Sutton acted in bad faith.

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Accordingly, the Final Pretrial Conference Order will be amended to include the

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affirmative defense of fair use.

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Because there is no dispute that Newegg is the owner of a valid and registered

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copyright for its draft brief, or that Sutton copied substantial portions of Newegg’s draft

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brief without permission, the next issue is whether Sutton’s copying constituted fair use

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of Newegg’s draft brief.

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In a summary judgment motion, when the nonmoving party has the burden of

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proof at trial, as Sutton has here on the affirmative defense of fair use, summary

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judgment should be granted when the nonmoving party fails to produce evidence to

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establish a prima facie case. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

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Thus, the burden is on Sutton to establish a prima facie case for fair use. Newegg, as

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the moving party, however, has the initial burden to show that Sutton does not have

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enough evidence to establish a prima facie case of fair use. See Williams v. Gerber

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Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). Newegg has met this initial burden.

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Consequently, the burden shifts to Sutton to establish, with admissible evidence, a

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prima facie case that the copying was fair use. See Celotex, 477 U.S. at 322.

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The Copyright Act sets out four statutory factors that should be considered before

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fair use can be successfully raised as an affirmative defense to copyright infringement.

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17 U.S.C. § 107. The first statutory factor concerns the “purpose and character of the

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use,” the second factor examines the “nature of the copyright work,” the third factor

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assesses the “amount and substantiality” of the copyrighted work used by the alleged

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infringer, while the fourth factor assesses whether the allegedly infringing work has an

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adverse effect on the potential market for, or the value of, the copyrighted work. 17

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U.S.C. § 107.

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The purpose of the fair use doctrine is to permit “courts to avoid rigid application

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of the copyright statute when, on occasion, it would stifle the very creativity which that
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law is designed to foster.” Stewart v. Abend, 495 U.S. 207, 236 (1990). While § 107

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sets out four factors to consider, there is no bright line rule for fair use; an analysis

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must be undertaken on a case-by-case basis with each factor weighed against each other

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rather than considered in isolation. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569,

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577 (1994).

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In considering the first statutory factor, the Ninth Circuit has held that when an

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allegedly infringing work was used for the same intrinsic purpose as the copied work,

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it is a “strong indicia” that there was no fair use. See Jartech, Inc. v. Clancy, 666 F.2d

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403, 407 (9th Cir. 1982). A key, though not “absolutely necessary” element in

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considering this first statutory factor is whether and to what extent the allegedly

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infringing work is “transformative.” Campbell, 510 U.S. at 579. In Campbell, the

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Supreme Court held that the “more transformative the new work, the less will be the

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significance of other factors [...] that weigh against a finding of fair use.” Campbell,

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510 U.S. at 579. For a new work to have made a transformative use of an old work,

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the new work must have altered the copyrighted work to create “new expression,

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meaning or message.” Campbell, 510 U.S. at 578.

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Here, Sutton did not add new expression, meaning or message to Newegg’s draft

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brief. Sutton merely made minor and cosmetic changes to the draft brief. Further,

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Sutton’s brief and Newegg’s draft brief had the same intrinsic use – to persuade the

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Federal Circuit. Therefore, Sutton’s brief cannot be said to be a transformative use of

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the draft brief. Thus, the first statutory factor weighs heavily in favor of Newegg.

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The second factor – the nature of the copyrighted work – calls for recognition

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that some works are closer to the core of intended copyright protection than others, with

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the consequence that fair use is more difficult to establish when the former works are

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copied. See Stewart v. Abend, 495 U.S. 207, 237–238 (1990). For example, the

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Supreme Court has held that there is a “greater need” to disseminate factual works than

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works of fiction. Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 540

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(1985). Moreover, the Southern District of New York held that legal briefs are
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copyrightable “functional presentations of fact and law,” which tends toward a finding

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of fair use. White v West Pub’l. Corp., 29 F. Supp. 3d 396, 399 (S.D.N.Y. 2014).

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While only of persuasive value, White nonetheless demonstrates the principle that legal

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briefs can be the subject of copyright infringement and, by extension, can be captured

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within the scope of the fair use defense. Because Sutton’s brief is a functional

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presentation of fact and law, and in accordance with the Supreme Court’s priority in

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disseminating factual works, the second statutory factor weighs slightly in favor of

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Sutton. See Harper & Row Publishers, Inc., 471 U.S. at 540.

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For the third factor, the Court must consider the the amount and substantiality of

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the portion copied in relation to the copyrighted work as a whole. 17 U.S.C. § 107(3).

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“This factor calls for thought not only about the quantity of the materials used, but

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about their quality and importance, too.” Campbell, 510 U.S. at 587. Moreover, the

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copying of a substantial portion of the original work “may reveal a dearth of

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transformative character or purpose under the first factor.” Campbell, 510 U.S. at 587.

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Given that Sutton copied most, if not all, of the substantive portions of the draft brief,

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and that Sutton’s use of the draft brief was not transformative, this factor weighs

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heavily in favor of Newegg.

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As to the fourth factor – the degree of harm to the potential market – Newegg

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failed to provide any evidence that it has ever licensed or sold its briefs, or that there

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is a market for the licensing or sale of its legal briefs. When a copyright holder fails

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to identify a market for its copyrighted work that might be harmed by an infringing

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work, the infringer need not present evidence demonstrating the lack of harm in the

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market for the copyrighted work. Leibovitz v Paramount Pictures Corp., 137 F.3d 109,

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116 (2nd Cir. 1998). Therefore, because Newegg has failed to identify a market for

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its legal briefs, the fourth statutory factor weighs slightly in favor of Sutton.

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Upon consideration of all four factors, with more weight given to the first and

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third factors based on the facts, circumstances and particular nature of this case, Sutton

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did not meet his burden of establishing a prima facie case that his copying of Newegg’s
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draft brief was fair use.

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Finally, Fed. R. App. P. 28(i) cannot be used to justify Sutton’s copying of the

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draft brief. Rule 28(i) specifically permits a party to either join in or adopt by reference

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a part of a co-party’s brief. By copying Newegg’s draft brief, Sutton went beyond

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joining the brief or incorporating parts of it by reference.

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Accordingly,

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It is Ordered that Defendants’ motion for leave to amend the Final Pretrial

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Conference Order to add the affirmative defense of fair use be, and hereby is,

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Granted.

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It is further Ordered that Plaintiff’s motion for partial summary judgment as
to copyright infringement be, and hereby is, Granted.

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Date: September 13, 2016

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__________________________________

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Terry J. Hatter, Jr.
Senior United States District Judge

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Order – Page 5 of 5