Declaratory Judgments

The phrase “arises under” appears in both 28 U.S.C. §1331 (the general federal question jurisdiction provision) and Section 1338(a) (the specific section for copyright actions). The phrase is derived from Article III of the Constitution, and is to be construed identically in both sections. Article III is also relevant for declaratory judgment suits brought under the Declaratory Judgment Act, 28 U.S.C. §2201(a), since the case or controversy requirement in that section is the same as the constitutional case or controversy requirement embodied in Article III. In declaratory judgment actions, the parties switch their traditional roles, and thus subject matter jurisdiction is determined by whether the declaratory judgment defendant could have brought the threatened litigation as a traditional plaintiff.

The Declaratory Judgment Act is a procedural device only, providing a way to an individual who has a reasonable apprehension of suit to bring the matter before a federal court. As a procedural device, the Declaratory Judgment Act does not provide an independent basis for subject matter jurisdiction, and is discretionary even when such an independent basis is established. Thus, the declaratory judgment plaintiff must establish, consistent with the well-pleaded complaint rule, that the district court has original jurisdiction over the subject matter of the dispute. Aside from proving that the matter arises under the Copyright Act (a very thorny area) , the declaratory judgment plaintiff must also prove the existence of case or controversy. This requires a substantial dispute of sufficient immediacy between adverse parties. These threshold requirements serve to discourage advisory opinions. Advisory opinions are viewed by courts as a way for potential (but not imminent) litigants from getting the court’s advance thoughts about the outcome of a case. While such advisory opinions would likely save litigants lawyers’ fees, they would impose high burdens on courts. To avoid such flooding, courts, viewing the totality of the circumstances, examine whether there is a concrete, “actual or imminent, not conjectural or hypothetical” inquiry.”

For nonlitigation issues such as ownership, one must be able to establish an objectively reasonable dispute regarding, for example: claims for work for hire; joint authorship or co-ownership; claims of sole ownership; failure to effectively transfer rights; proper renewal claimant; termination under Section 203 or Section 304; invalidity of the copyright, in the case of licensing, that one party had or did not have a license; or that no valid license obligation existed because the copyright had expired. Other permissible bases include a challenge to the unconstitutionality of a provision of the Act.

Occasionally one comes across a complaint filed by a copyright owner seeking a declaration that the defendant infringed its copyright. Such claims are nonsensical. They add nothing to a complaint phrased as an ordinary infringement action, triable by a jury.

On January 27th, Judge Richard Berman issued an opinion in Solin v. NASD, in which plaintiff sought a declaratory judgment that the NASD arbitration awards database is not protected by copyright and that NASD does not have the legal authority to limit his use of it. Plaintiff was interested in using the database for a law review article. NASD moved to dismiss alleging there was no allegation it had threatened to sue plaintiff, and had indeed given him permission to use the database for the article; thus no case or controversy existed. The court agreed and dismiss the action.