Brownstein v. Lindsay, PICS Case No. 14-0202 (3d Cir. Jan. 29, 2014) Greenaway, J. (44 pages).

THIRD CIRCUIT

The Legal Intelligencer

INTELLECTUAL PROPERTY

Copyrights • Creation/Registration • Statute of Limitations

Brownstein v. Lindsay, PICS Case No. 14-0202 (3d Cir. Jan. 29, 2014) Greenaway, J. (44 pages).

Where an individual is the sole author of a work later used as a component in a derivative work, he is a co-author of the derivative work and maintains sole authorship of the original component work. Where an express repudiation of co-authorship has not occurred, the statute of limitations on joint authorship claims does not begin to run. Where there is no statutory authorization, a court may not cancel a copyright registration. Reversed.

Appellant Peter Brownstein and appellee Tina Lindsay created an ethnic identification system called LCID. While Lindsay created the system rules, known as EDS, Brownstein programmed the computer code, known as ETHN, that would implement the EDS rules. Lindsay later filed a copyright registration with herself as author for EDS; however, she submitted the ETHN code as the deposit copy. Lindsay later purported to unilaterally execute an assignment of the entire interest in LCID to TAP, the company started by Lindsay and Brownstein to commercialize LCID. TAP later partnered with a third party, CMR, to combine its technology with LCID to create the E-Tech system; the agreements with CMR listed TAP as the owner of LCID. Brownstein also executed client license agreements that listed the E-Tech joint venture as the owner of all copyrights to the E-Tech system.

Brownstein and Lindsay were later sued by their former employer who claimed ownership of Lindsay's copyright prior to their departure from the company; the settlement agreement conflated EDS with LCID. Brownstein later filed an oppressed shareholder suit against E-Tech and Lindsay, while filing copyright registrations on ETHN. Brownstein settled the suit with E-Tech and Lindsay, in which he relinquished all interest as a shareholder, officer, or employee of E-Tech.

Brownstein sought to protect his joint authorship by filing this action against Lindsay and E-Tech. Defendants counterclaimed, seeking sole authorship of LCID and the cancellation of Brownstein's copyright registration. After Brownstein presented his case at trial, defendants filed a motion for judgment as a matter of law, which was granted by the district court, who ruled that the statute of limitation had run on Brownstein's claim, and even if the statute of limitations hadn't run, there was nothing in the record to support Brownstein's claim of co-authorship. The district court also cancelled Brownstein's copyright registration.

The instant court granted Brownstein's appeal and reversed the decision of the lower court. The court ruled that Brownstein was in fact a co-author of the LCID, noting that co-authorship arises when two or more people contribute a non-trivial amount of creative expression to a work an intend that their contributions be combined. Moreover, ownership interest vests from the act of creating the work, and not from agreement or registration. The court found that the record established that the parties intended for EDS and ETHN to be combined to form LCID, and that both components were interdependent.