BRIDGE PUBLICATIONS, INC., a California corporation; Religious Technology
Center, a California corporation; and Church of Scientology International, a
California corporation, Plaintiffs,
v.
Enid VIEN, an individual; and Does 1 through 20, inclusive, Defendants.
No. CV 92-1539 H(M).
United States District Court,
S.D. California.
May 4, 1993.
Religious organizations brought action against instructor for federal and
state copyright infringement and misappropriation of trade secrets. The
District Court, Huff, J., held that: (1) instructor violated federal copyright
laws by copying or directing her students to copy organizations' literary works
and sound recordings for use in course instructor offered for sale; (2)
instructor violated state copyright law with respect to recordings fixed prior
to 1972; (3) information contained in organizations' materials was "trade
secret" which instructor misappropriated; (4) statutes of limitations did not
bar claims; (5) First Amendment did not bar claims; and (6) instructor's use
was not "fair use."
Ordered accordingly.
[1] FEDERAL CIVIL PROCEDURE
Any doubt as to existence of any issue of material fact requires denial of
motion for summary judgment.
[2] FEDERAL CIVIL PROCEDURE
On motion for summary judgment, opposing party does not create genuine issue of
material fact by submitting her own affidavit which contradicts her prior
deposition testimony.
[3] COPYRIGHTS AND INTELLECTUAL PROPERTY
Two elements to be proven in copyright infringement action are ownership of
valid copyright and copying of copyrighted work.
[4] COPYRIGHTS AND INTELLECTUAL PROPERTY
Instructor who offered course for sale violated federal copyright laws by
copying or directing her students to copy, as part of course, literary works
and sound recordings, published and unpublished, to which religious
organizations owned copyrights.
[4] COPYRIGHTS AND INTELLECTUAL PROPERTY
Instructor who offered course for sale violated federal copyright laws by
copying or directing her students to copy, as part of course, literary works
and sound recordings, published and unpublished, to which religious
organizations owned copyrights.
[5] COPYRIGHTS AND INTELLECTUAL PROPERTY
Alleged infringer's declaration in opposition to copyright holders' motion for
summary judgment that she never copied or directed copying of copyrighted sound
recordings did not create genuine issue of material fact; declaration was
contradicted by alleged infringer's prior declaration and deposition testimony.
[6] COPYRIGHTS AND INTELLECTUAL PROPERTY
Instructor who offered religious course for sale violated California copyright
law by copying or directing her students to copy, as part of course, sound
recordings to which religious organizations owned copyrights and which were
fixed on tape prior to effective date of federal protection for such
recordings. West's Ann.Cal.Civ.Code s 980(a)(2).
[7] TORTS
Under common law, trade secret is determined by extent to which secrecy of
information is guarded and according to value of information to possessor and
its competitors.
[8] TORTS
Under California law, information contained in religious organizations'
materials was "trade secret," so that instructor's use of information in
courses which she offered for sale was misappropriation of trade secret;
information was confidential and kept under tight security, was disclosed only
to those who had acquired requisite level of spiritual training, and could not
be accessed without first signing agreement to maintain its secrecy and
confidentiality, instructor knew of confidential nature of information and
signed confidentiality agreement, and religious organizations used proceeds
from sale of materials to support churches world-wide. West's
Ann.Cal.Civ.Code ss 3426.1, 3426.1(b).
See publication Words and Phrases for other judicial constructions and
definitions.
[9] JUDGMENT
Dismissal of religious organizations' misappropriation of trade secrets claims,
in prior action, with respect to specific portion of information contained in
their material did not bar their trade secret claim against instructor who used
information in course which she offered for sale; substantive merits of prior
trade secret claim were not necessarily and finally adjudicated as prior claim
was dismissed as discovery sanction, and instructor was not party to prior
action.
[9] JUDGMENT
Dismissal of religious organizations' misappropriation of trade secrets claims,
in prior action, with respect to specific portion of information contained in
their material did not bar their trade secret claim against instructor who used
information in course which she offered for sale; substantive merits of prior
trade secret claim were not necessarily and finally adjudicated as prior claim
was dismissed as discovery sanction, and instructor was not party to prior
action.
[10] LIMITATION OF ACTIONS
Religious organizations' federal and state copyright infringement claims and
their state misappropriation of trade secret claims, with respect to
instructor's copying and use of their literary works and sound recordings in
course which she offered for sale, were not barred by applicable three-year
statutes of limitations, even though organizations' officers knew that
instructor left organization to start her own ministry, asked about
instructor's knowledge of organizations' materials more than three years before
commencement of action, and were told that she had those materials in her
possession; organizations permitted instructor to learn and study materials
under confidentiality agreement, and there was no evidence that organizations
knew of potential use instructor had for materials in her ministry. 17
U.S.C.A. s 507; West's Ann.Cal.Civ.Code ss 980(a)(2), 3426.3; West's
Ann.Cal.C.C.P. s 338(1) (1987).
[11] LIMITATION OF ACTIONS
Even if religious organizations had knowledge of instructor's unauthorized
copying of their literary works and sound recordings, for use in course offered
for sale, more than three years prior to commencement of their state and
federal copyright infringement claims, those claims were not barred by three-
year statute of limitations; there was substantial, uncontroverted evidence
that instructor violated copyright through unauthorized copying within three
years of instant action. West's Ann.Cal.Civ.Code s 338(1) (1987); 17
U.S.C.A. s 507.
[11] LIMITATION OF ACTIONS
Even if religious organizations had knowledge of instructor's unauthorized
copying of their literary works and sound recordings, for use in course offered
for sale, more than three years prior to commencement of their state and
federal copyright infringement claims, those claims were not barred by three-
year statute of limitations; there was substantial, uncontroverted evidence
that instructor violated copyright through unauthorized copying within three
years of instant action. West's Ann.Cal.Civ.Code s 338(1) (1987); 17
U.S.C.A. s 507.
[12] CONSTITUTIONAL LAW
Religious organizations' federal and state claims for copyright infringement
and misappropriation of trade secrets against instructor who copied and used
their literary works and sound recordings in course which she offered for sale
were not barred by religious nature of works, notwithstanding instructor's
claims that enforcing copyrights and trade secrets rights to materials
allegedly needed to practice her religion restricted her free exercise of
religion and unconstitutionally preferred organizations' religion over her
religion; neutral application of copyright and trade secret law does
not offend constitution. U.S.C.A. Const.Amend. 1.
[12] COPYRIGHTS AND INTELLECTUAL PROPERTY
Religious organizations' federal and state claims for copyright infringement
and misappropriation of trade secrets against instructor who copied and used
their literary works and sound recordings in course which she offered for sale
were not barred by religious nature of works, notwithstanding instructor's
claims that enforcing copyrights and trade secrets rights to materials
allegedly needed to practice her religion restricted her free exercise of
religion and unconstitutionally preferred organizations' religion over her
religion; neutral application of copyright and trade secret law does
not offend constitution. U.S.C.A. Const.Amend. 1.
[12] COPYRIGHTS AND INTELLECTUAL PROPERTY
Religious organizations' federal and state claims for copyright infringement
and misappropriation of trade secrets against instructor who copied and used
their literary works and sound recordings in course which she offered for sale
were not barred by religious nature of works, notwithstanding instructor's
claims that enforcing copyrights and trade secrets rights to materials
allegedly needed to practice her religion restricted her free exercise of
religion and unconstitutionally preferred organizations' religion over her
religion; neutral application of copyright and trade secret law does
not offend constitution. U.S.C.A. Const.Amend. 1.
[13] COPYRIGHTS AND INTELLECTUAL PROPERTY
In determining fair use under federal copyright law, it is necessary to balance
four statutory factors flexibly. 17 U.S.C.A. s 107.
[14] COPYRIGHTS AND INTELLECTUAL PROPERTY
Instructor's copying of religious organizations' literary works and sound
recordings in course which she offered for sale was not "fair use" of those
materials; instructor used copyrighted works as integral part of course from
which she earned up to $12,000 per year for ten years, used works for same
purpose as organizations, substantially copied each work at issue, and did not
copy and use works solely for her own use in teaching, copying was extensive
and methodical and consisted of copying from same author, time after time, and
works were product of author's creative thought process and not merely
informational. 17 U.S.C.A. s 107.
See publication Words and Phrases for other judicial constructions and
definitions.
[14] COPYRIGHTS AND INTELLECTUAL PROPERTY
Instructor's copying of religious organizations' literary works and sound
recordings in course which she offered for sale was not "fair use" of those
materials; instructor used copyrighted works as integral part of course from
which she earned up to $12,000 per year for ten years, used works for same
purpose as organizations, substantially copied each work at issue, and did not
copy and use works solely for her own use in teaching, copying was extensive
and methodical and consisted of copying from same author, time after time, and
works were product of author's creative thought process and not merely
informational. 17 U.S.C.A. s 107.
See publication Words and Phrases for other judicial constructions and
definitions.
[15] COPYRIGHTS AND INTELLECTUAL PROPERTY
In context of fair use analysis, commercial use of copyrighted material is
presumptively unfair, while noncommercial use weighs in favor of defendant.
17 U.S.C.A. s 107.
[16] COPYRIGHTS AND INTELLECTUAL PROPERTY
When nature of copyrighted works is creative, as opposed to informational, use
of those works is less likely to be deemed fair use. 17 U.S.C.A. s 107.
*631 Toby L. Plevin, Westwood, CA, for defendants.
Neil F. Martin, Brown, Martin, Haller and McClain, San Diego, CA, Thomas M.
Small, Small, Larkin, Kidde & Golant, Los Angeles, CA, Helena K. Kobrin,
Bowles & Moxon, Hollywood, CA, for plaintiffs.
ORDER GRANTING SUMMARY JUDGMENT
HUFF, District Judge.
The above-captioned matter came on regularly for hearing before the
Honorable Judge Marilyn L. Huff on April 26, 1993. Thomas M. Small appeared
for plaintiffs and Toby L. Plevin appeared for defendant. Considering all of
the papers, pleadings, motions and declarations before the court, and after
hearing the matter, the court finds that no material issue of fact exists and
plaintiffs are entitled to judgment as a matter of law on the copyright and
trade secret claims.
1. Standard for summary judgment
[1][2] A motion for summary judgment shall be granted where "there is no
genuine issue as to any material fact and ... the moving party is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(c); British Airways Bd.
v. Boeing Co., 585 F.2d 946, 951 (9th Cir.), cert. denied, 440 U.S. 981, 99
S.Ct. 1790, 60 L.Ed.2d 241 (1979). Any doubt as to the existence of any issue
of material fact requires denial of the motion. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986). The
opposing party "cannot rest on the mere allegations or denials of his pleading,
but [the] response, by affidavits or as otherwise provided by this rule, must
set forth specific facts showing that there is a genuine issue for trial," and
"must present affirmative evidence in order to defeat a properly supported
motion for summary judgment." Anderson, 477 U.S. at 257, 106 S.Ct. at
2514. However, the opposing party does not create a genuine issue of material
fact by submitting her own affidavit which contradicts her prior deposition
testimony. Harkins Amusement Enterprises, Inc. v. General Cinema Corp., 850
F.2d 477, 482 (9th Cir.), cert. denied, 488 U.S. 1019, 109 S.Ct. 817, 102
L.Ed.2d 806 (1989) (citing Radobenko v. Automated Equipment Corp., 520 F.2d
540, 543-44 (9th Cir.1975), for the proposition that a party's inconsistent
affidavit given after deposition testimony, in opposition to a summary judgment
motion, does not create a genuine issue of fact).
*632 2. Application of standard
a. Copyright claims
[3][4] There are two elements to be proven in a copyright infringement
action: (1) ownership of a valid copyright, and (2) copying of the copyrighted
work. Data East USA, Inc. v. Epyx, Inc., 862 F.2d 204, 206 (9th
Cir.1988); Baxter v. MCA, Inc., 812 F.2d 421, 423 (9th Cir.), cert.
denied, 484 U.S. 954, 108 S.Ct. 346, 98 L.Ed.2d 372 (1987). As this court
has held in its rulings on the temporary restraining order and the preliminary
injunction issued in this case, there is no issue of fact regarding plaintiffs'
ownership of the copyrights on the literary works and sound recordings,
published and unpublished. See also Declaration of Marilyn Pisani ("Pisani
Decl."), PP 2, 5, 7, Exhibits C, I, L, O, R, U, X and AA; Declaration of Allan
Cartwright ("Cartwright Decl."), PP 2-3, 5, 7, Exhibit B, E, and LLL;
Declaration of Warren McShane ("McShane Decl."), PP 2, 5, 7, 9, Exhibits D and
E.
Nor is there a genuine issue of fact regarding defendant's copying of, or
directing the copying of, the copyrighted works. The undisputed evidence shows
that defendant copied or directed her students to copy plaintiffs' copyrighted
materials as part of a "Dynamism" course which she offered for sale. See
Declaration of Gerri Salinas ("Salinas Decl."), PP 4-5, 8-11; Pisani Decl., PP
5, 7; Cartwright Decl., PP 5, 7; McShane Decl., PP 7, 9-10. Specifically,
defendant would either copy the materials herself, or would give them to her
students to copy. See Salinas Decl., P 8; Deposition of Enid Vien ("Vien
Depo."), Vol. I, p. 44, lines 3-20, p. 45, lines 15-21; p. 80, lines 8-19;
Vol. II, P. 23, lines 2-12; p. 96, lines 1-12; p. 143, line 18--p. 144, line
8; Deposition of Mary Volk ("Volk Depo."), p. 25, line 17--p. 26, line 11.
Additionally, defendant admitted in her November 4, 1992 Declaration that she
must use bootleg or copied materials as part of the courses she offers her
students.
[5] Defendant's declaration in opposition to this motion contends that
she never copied, or directed the copying of, the sound recordings. However,
this is contradicted by her prior declaration and deposition testimony and,
therefore, does not create a genuine issue of material fact. Harkins
Amusement Enterprises, Inc. v. General Cinema Corp., 850 F.2d 477, 482 (9th
Cir.1988).
b. Sound recordings made prior to February 15, 1972
[6] There is also no factual dispute that defendant copied, or directed the
copying of, L. Ron Hubbard's tape recorded lectures which were fixed on tape
prior to February 15, 1972 and, therefore, are protected under California
Civil Code section 980(a)(2). See Goldstein v. California, 412 U.S. 546,
552, 93 S.Ct. 2303, 2307, 37 L.Ed.2d 163 (1973) (recordings fixed and sold
prior to February 15, 1972 are not protected under federal copyright law, but
may be given state protection); Lone Ranger Television v. Program Radio
Corp., 740 F.2d 718, 724 (9th Cir.1984). The uncontroverted evidence shows
that defendant violated section 980(a)(2) by making copies of the
recordings, or by having such copies made, without authorization. See Salinas
Decl., P 8(b); Cartwright Decl., P 7. Again, defendant's declaration in
opposition to the instant motion does not create a factual dispute in light of
her earlier declaration and deposition testimony, which admit to copying and
using "bootleg" L. Ron Hubbard tapes as part of her Dynamism courses. See
Harkins Amusement Enterprises, supra, 850 F.2d at 482.
c. Trade secret claim
[7] Finally, no genuine issue of fact exists as to whether defendant
misappropriated plaintiffs' trade secrets in the works known generally as the
"Advanced Technology." California Civil Code section 3426.1 defines a
"trade secret" as information which has independent economic value from not
being generally known, the secrecy of which has been reasonably protected, or
reasonably attempted to be protected. A trade secret is misappropriated when,
among other things, it is disclosed or used by another without consent, and at
the time of disclosure or use that person knew the secret was acquired under
circumstances giving rise to a duty to maintain its secrecy or limit its use.
Cal.Civ.Code s 3426.1(b). Similarly, under the common *633 law, a trade
secret is determined by the extent to which the secrecy of the information is
guarded, and according to the value of the information to the possessor and its
competitors. See Restatement (First) of Torts, s 757, comment 6; Chicago
Lock Co. v. Fanberg, 676 F.2d 400, 404 (9th Cir.1982); Sinclair v. Aquarius
Electronics, Inc., 42 Cal.App.3d 216, 221, 116 Cal.Rptr. 654 (1974).
[8] The court finds that as a matter of law, plaintiffs' "Advanced
Technology" qualifies as a trade secret, and that no factual dispute exists
regarding defendant's misappropriation of these works through the courses
offered to her students. See Vien Depo., Vol. I, p. 97, lines 5-10; p. 98,
lines 8-18; Salinas Decl., P 8; McShane Decl., PP 7, 10, Exhibit C.
1. Secrecy of materials
There is no factual dispute about whether plaintiffs have used
reasonable steps to keep the materials secret. The Advanced Technology is
confidential and kept under tight security, is disclosed only to those who have
attained the requisite level of spiritual training, and cannot be accessed
without first signing an agreement to maintain its secrecy and
confidentiality. See McShane Decl., PP 3-4. Indeed, plaintiff knew of the
confidential nature of the materials and signed a confidentiality agreement
prior to their disclosure to her. See Vien Depo., Vol. I, p. 59 line 18--p.
60, line 12; Vien Depo. Vol. II, p. 25, line 5--p. 27, line 10, Exhibits 7 and
8 thereto; p. 31, line 4--p. 32, line 15.
Defendant attempts to create a factual issue about the secrecy of a portion of
the Advanced Technology called "Power Processes," or "5 and 5a Processing," by
declaring in opposition that she "studied [that portion] at a time when they
were not deemed to be secret." However, this declaration is directly
contradicted by defendant's earlier deposition testimony and the
confidentiality agreement and, therefore, does not create a genuine issue of
material fact. See McShane Decl., P 12, Exhibits A, B, and C, attached to
Reply; Declaration of Howard Gutfeld, PP 3-5, attached to Reply; Vien Depo.,
p. 11, line 6--p. 12, line 16, p. 15, line 17, p. 16, lines 1-16, p. 27, lines
13-14, attached to Reply.
Defendant also argues that other "issues of fact" remain as to the trade
secret claim. These arguments are without merit. Defendant first claims that
a certain portion of the Advanced Technology, known as "OT 3," has been
repeatedly reported in print and broadcast media, thereby stripping its trade
secret status. However, plaintiffs claim these publications are distortions of
the secret materials and, therefore, plaintiffs make no claim of trade secret
status or confidentiality as to any of these stories. Moreover, plaintiffs
concede that any information in these stories should be excepted from any
injunction this court might order. See McShane Decl., PP 7-11, attached to
Reply.
[9] Defendant next argues that plaintiffs cannot gain trade secret status
for a portion of the Advanced Technology known as "NOTS," because a previous
court, in a previous case with different defendants, dismissed trade secret
claims on that material as a discovery sanction. Defendant offers no authority
for this contention. Indeed, as the substantive merits of the earlier trade
secret claim were not necessarily and finally adjudicated upon, and defendant
was not a party to that suit, it appears that case has no res judicata or
collateral estoppel effect here. See generally Federated Dept. Stores v.
Moitie, 452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981); Guild Wineries
and Distilleries v. Whitehall Co., Ltd., 853 F.2d 755 (9th Cir.1988).
2. Independent economic value
Finally, there is no factual dispute as to the independent economic value of
the Advanced Technology. It clearly has value to plaintiffs, who use proceeds
from the sale of these materials, as well as other materials, to support the
operations of Scientology Churches world-wide. See McShane Decl., P 12.
Indeed, the Supreme Court has recognized the economic need for churches to
receive such proceeds, noting that "[i]t is plain that a religious organization
needs funds to remain a going concern." Murdock v. Commonwealth of
Pennsylvania, 319 U.S. 105, 111, 63 S.Ct. 870, 874, 87 L.Ed. 1292 (1943).
These materials also have value to defendant, *634 a competitor of
plaintiffs', who uses the Advanced Technology in the delivery of the courses
for which she is paid. For example, defendant admitted that she would charge
$3000 for a course package which includes the Advanced Technology materials
known as "SOLO," "OT 1," "OT 2," and "OT 3." See Vien Depo., Vol. I, p. 97,
lines 5-10; p. 98, lines 8-18.
Therefore, as no genuine issue of fact exists, the court finds as a
matter of California statutory and common law that defendant has
misappropriated plaintiffs' trade secrets.
3. Defenses common to all claims
a. Statute of limitations.
[10] Defendant argues, for the first time, that all claims in this action
are barred by the statute of limitations. [FN1] In support of this argument
defendant offers evidence that, in 1984, plaintiffs' officers had asked about
defendant's knowledge of the Advanced Technology materials and were told she
had those materials in her possession. See Declarations of Enid Vien and
Lauren Allen attached to Opposition to Summary Judgment. However, these
declarations reveal plaintiffs' representatives were also assured that
defendant had not distributed or disclosed these materials. As defendant has
the burden of proof on this affirmative defense, she must come forward with
evidence that plaintiffs were on notice of all the elements of a trade secret
violation. To the contrary, her evidence actually supports plaintiffs'
position that they did not have such knowledge.
FN1. The relevant statute of limitations are: 17 U.S.C. s 507 (3 years
for federal copyright claims); Cal.Civ.Proc.Code s 338(1) (3 years for
state copyright claims based on Cal.Civ.Code s 980(a)(2));
Cal.Civ.Code s 3426.3 (3 years for trade secret misappropriation).
Defendant argues plaintiffs must have known about defendant's infringing
activities because they knew she left the Church of Scientology to start her
own ministry. This argument is without merit. Plaintiffs had always permitted
Ms. Vien to learn and study the Advanced Technology pursuant to the above-
referenced confidentiality agreement. The fact she may have had actual copies
of the Advanced Technology, as opposed to her own notes and mental impressions,
does not create an issue regarding plaintiffs' knowledge of all the elements of
trade secret misappropriation. The argument that plaintiffs should have known
that defendant would have disclosed the Advanced Technology to her students is
also without merit. There is no evidence that plaintiffs knew of the potential
use, if any, Ms. Vien might have for the Advanced Technology in her ministry.
The court finds these declarations fail to establish, or even raise a factual
issue, that plaintiffs had knowledge, dating back to 1984, of any of the
violations alleged in the complaint. The statute of limitations defense is,
therefore, without merit. See Intermedics, Inc. v. Ventritex, Inc., 775
F.Supp. 1258, 1265-66 (N.D.Cal.1991) (plaintiff's prior suit against defendant
for "having knowledge of" plaintiff's trade secrets was not sufficient
"discovery of the misappropriation" to start limitations period).
[11] Indeed, on the federal and state copyright claims, even if defendant's
declarations establish plaintiffs' knowledge of defendant's unauthorized
copying in 1984, there is substantial, uncontroverted evidence that defendant
has violated these copyrights within three years of the instant suit. [FN2]
Accordingly, these claims were timely filed. See Hoey v. Dexel Systems
Corp., 716 F.Supp. 222 (E.D.Va.1989) (where there is a continuing violation of
the copyright, the action is timely as to infringing acts accruing within the
3-year limitations period); cf. Mangini v. Aerojet-General Corp., 230
Cal.App.3d 1125, 281 Cal.Rptr. 827 (1991) (every continuation of a nuisance
gives rise to a separate claim for damages under the 3-year limitations period
in Civ.Proc.Code s 338(1)).
FN2. It should be noted, however, that defendant's declarations merely
point to plaintiffs' alleged knowledge of Ms. Vien's possession of portions
of the Advanced Technology materials. There is no evidentiary basis to
find that, dating back to 1984, plaintiffs' knew of defendant's
unauthorized copying of any of the materials at issue.
b. First amendment.
[12] As this court stated in its Order Granting Preliminary
Injunction, plaintiffs' *635 claims for copyright and trade secret
protection are not barred by the religious nature of the works. The court
expressly held that enforcing plaintiffs' rights in these works violated
neither the establishment clause nor the free exercise clause. See United
Christian Scientists v. Christian Science Bd. of Directors, First Church of
Christ Scientist, 829 F.2d 1152, 1159 (D.C.Cir.1987) ("normally, a grant of
copyright on a religious work poses no constitutional difficulty. Religious
works are eligible for protection under general copyright laws"); Religious
Technology Center, Church of Scientology Int'l, Inc. v. Scott, 869 F.2d 1306,
1309-10 (9th Cir.1989) (religious material can qualify as a trade secret under
California law if it confers on its owner an actual economic advantage over
competitors); Religious Technology Center v. Wollersheim, 796 F.2d 1076,
1090-91 (9th Cir.), cert. denied, 479 U.S. 1103, 107 S.Ct. 1336, 94 L.Ed.2d
187 (1987); see also Jones v. Wolf, 443 U.S. 595, 604, 99 S.Ct. 3020, 3026,
61 L.Ed.2d 775 (1979); Order of St. Benedict of New Jersey v. Steinhauser,
234 U.S. 640, 644, 34 S.Ct. 932, 933, 58 L.Ed. 1512 (1914).
Defendant argues that because plaintiffs refuse to sell defendant the
materials she needs to practice her religion, enforcing the copyrights and
trade secret rights restricts her free exercise of religion, and
unconstitutionally prefers the religion of Scientology over defendant's
religion. Defendant has offered no authority supporting this contention.
Rather, the case law cited supports the proposition that neutral application of
copyright and trade secret law to religious works does not offend the
constitution.
4. Specific defenses
a. Fair use of the copyrighted works.
[13][14] Defendant raises, for the first time, the applicability of the
"fair use doctrine" to the works at issue. Section 107 of the Copyright Act
provides that
the fair use of a copyrighted work ... for purposes such as criticism,
comment, news reporting, teaching (including multiple copies for classroom
use), scholarship, or research, is not an infringement of copyright. In
determining whether the use made of a work in any particular case is a fair use
the factors to be considered shall include--
(1) the purpose and character of the use, including whether such use is of a
commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the
copyrighted work.
In determining "fair use" under the statute, it is necessary to balance the
four factors flexibly. Fisher v. Dees, 794 F.2d 432, 435 (9th Cir.1986).
Balancing these factors here results in a finding that defendant's use is not
protected by the statute.
[15] The first factor weighs against a finding of fair use. The
uncontroverted evidence shows that defendant uses the copyrighted works as an
integral part of the Dynamism courses she sells to her students. See Salinas
Decl., PP 4-5, 6, 8-11, Exhibit B; Pisani Decl., PP 5, 7; Cartwright
Decl., PP 5, 7; McShane Decl., PP 7, 9-10; Vien Depo., Vol. II, p. 23, lines
2-12; p. 96, lines 1-12; p. 143, line 18--p. 144, line 8. Indeed, defendant
admits to having earned up to $12,000 a year for the ten years she has been
offering these courses. See Vien Decl., P 6, attached to Opposition. In
general, commercial use of copyrighted material is presumptively unfair
(Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 449-
51, 104 S.Ct. 774, 792-93, 78 L.Ed.2d 574 (1984)), whereas noncommercial use
weighs in favor of the defendant. See, e.g., Marcus v. Rowley, 695 F.2d
1171, 1175 (9th Cir.1983). Defendant's fair use claim is further weakened
under the first factor because she uses the copyrighted works for the same
intrinsic purpose as plaintiffs. See Marcus, 695 F.2d at 1175;
Weissmann v. Freeman, 868 F.2d 1313, 1324 (2nd Cir.), cert. denied, 493
U.S. 883, 110 S.Ct. 219, 107 L.Ed.2d 172 (1989).
[16] The second factor also weighs against a finding of fair use.
When the nature of the copyrighted works is creative, as opposed to
informational, use of those works is less likely to be deemed fair. See
*636 Abend v. MCA, Inc., 863 F.2d 1465, 1481 (9th Cir.), aff'd 495
U.S. 207, 110 S.Ct. 1750, 109 L.Ed.2d 184 (1990). The undisputed evidence
shows that L. Ron Hubbard's works are the product of his creative thought
process, and not merely informational.
The third factor also weighs against defendant. The undisputed facts show
that defendant has substantially copied each work at issue, and in some cases
the whole work. See Pisani Decl., P 7; Cartwright Decl., P 7; McShane
Decl., P 9. This weighs heavily against a finding of fair use, especially
considering the commercial nature of the use. See, e.g., Marcus, 695 F.2d
at 1176 ("wholesale copying of copyrighted material precludes application of
the fair use doctrine"); Abend, 863 F.2d at 1481 (wholesale copying for a
purely commercial purpose may never be a fair use).
The fourth factor concerns "the effect of the use upon the potential market
for or value of the copyrighted work." 17 U.S.C. s 107. As this court
discussed previously in the trade secret context, since defendant uses the
works for the same purpose intended by plaintiffs, it appears defendant's
unauthorized copies fulfill "the demand for the original" works and "diminish
or prejudice" their potential sale. See Hustler Magazine, Inc. v. Moral
Majority, Inc., 796 F.2d 1148, 1155-56 (9th Cir.1986). This factor goes
against defendant as well.
Finally, the court finds defendant's use does not fit within the special
guidelines approved by Congress as to fair use in the educational context. See
Notes of Committee on the Judiciary, House Rep. No. 94-1476, reprinted in 17
U.S.C.A. pp. 113-14; Marcus v. Rowley, 695 F.2d 1171, 1178 (9th Cir.1983).
Defendant's copying and use of the works was not restricted to one copy for her
own use in teaching. Additionally, the undisputed evidence shows defendant's
copying was not limited and spontaneous, but was extensive and methodical, and
consisted of copying from the same author, time after time. This is clearly
not within the letter or spirit of the Congressional guidelines.
Under the circumstances of this case, and after balancing the four statutory
factors, as well as the Congressional guidelines on fair use in the educational
context, the court finds as a matter of law that defendant is not entitled to
fair use protection. See Marcus, 695 F.2d at 1178-79 (summary judgment may
be granted on the fair use issue); Hustler Magazine, 796 F.2d at 1150-51
(same).
5. Permanent injunction
Plaintiffs have requested permanent injunctive relief on the four claims at
issue. As plaintiffs are entitled to summary judgment on those claims, the
court will grant such relief. See 17 U.S.C. s 502 ("[a]ny court having
jurisdiction of a civil action arising under this title may ... grant ... final
injunctions on such terms as it may deem reasonable to prevent or restrain
infringement of a copyright"); Cal.Civ.Code s 3426.2(a) ("[a]ctual or
threatened misappropriation [of a trade secret] may be enjoined"); Chicago
Lock Co. v. Fanberg, 676 F.2d 400, 404 (9th Cir.1982) (common law trade secret
misappropriation enjoinable under purview of 'unfair competition' under
Cal.Civ.Code s 3369); see generally A & M Records v. Heilman, 75
Cal.App.3d 554, 142 Cal.Rptr. 390, appeal dismissed and cert. denied 436
U.S. 952, 98 S.Ct. 3063, 57 L.Ed.2d 1118 (1978) (affirming grant of motion for
summary judgment and injunction as to defendant's unauthorized copying and sale
of tape recordings).
IT IS SO ORDERED.