Back in February, I did a post on a Fourth Circuit opinion involving infringement of an architectural work, Christopher Phelps & Associates, LLC v. Galloway, 477 F.3d 128 (4th Cir. Feb. 12, 2007). I was critical of a few parts of the opinion, but I struggled to get the facts right and the post, I think, never quite came out right. The Fourth Circuit apparently had some reservations about its own opinion, since yesterday, in response to a petition for rehearing, it issued a new opinion that contains a number of changes from the original, 2007 WL 1933594. (HT to LKB).
Much of the discussion in the original post, and in the comments on it turned on the issue of whether the sale of an infringing house constituted a distribution, and the issue of the first sale doctrine. These were of interest because while the jury found defendant had infringed plaintiff's architectural work in building his dream house based on an unauthorized copy of plaintiff's plans, the jury awarded only $20,000 (the fee plaintiff would have charged for an authorized use), and the trial judge had refused plaintiff's request for a permanent injunction against the lease or sale of the house. My view was, and remains, that sale of an infringing house is not a distribution within the meaning of 17 USC 106(3), since only title to the infringing object is transferred, and not a transfer of a copy of the work: the plain language of the statute requires that there be a transfer of a copy of the work, and copy is defined as the physical manifestation.
In its new opinion, the Fourth Circuit acknowledges this argument, but skirts around it by subsuming it within a general discussion of entitlement to injunctive relief. I don't understand that approach: if what plaintiff is requesting is relief for a right not granted under the Act, there is no need to go through a full-blown analysis of entitlement to equitable relief. The court's oblique reference to the problem is unsatisfactory: "We agree with Phelps & Associates that Galloway will inevitably sell or transfer his house within the period during which Phelps & Associates still holds the copyright -- i.e. 95 years, see 17 U.S.C. Sesc. 302(c) -- and that such a sale could, absent this action, expose Galloway to further relief, see id. sec. 106(3); id. sec. 501(a); cf. if. sec. 109(a) permitting sale of 'lawfully' made' copies); 1 William F. Patry. Patry on Copyright, sec. 3.111 (2007)(arguing that sale fo a copyrighted structure is not a 'distribution' under section 106(3)." The references are unsatisfactory in my opinion because they acknowledge the problems, but don't address them.
No where is this more true than in the first sale issue. The prior opinion held, in a first, that when an award for infringement is satisfied, the infringing copy becomes a lawful copy, and therefore may be transferred without the copyright owner's permission. This holding is absent from the new opinion, but the same result is achieved but now without any basis in law at all:
[W]ith respect to the Galloway house as one manifestation of the Phelps & Associates' design, arising from a single infringing transaction, Phelps & Associates is limited to the other relief provided in this case. Upon satisfaction of that relief, Galloway will be entitled to peaceful ownership of the house, with good and marketable title. This is consistent with the result reached when a converter of property satisfies a judgment: if the judgment does not order return of the property, but rather other relief, the converter obtains good and marketable title to the property after satisfying the judgment. See Restatement (Second) of Torts § 222A, cmt. (c) (“When the defendant satisfies the judgment in the action for conversion, title to the chattel passes to him, so that he is in effect required to buy it at a forced judicial sale”); Lovejoy v. Murray, 70 U.S. (3 Wall.) 1, 16-17 (1866); Stirling v. Garritee, 18 Md. 468, 474 (1862) (“The measure of damages in trover, is the value of the goods at the time of conversion. The plaintiff obtaining this value, it operates as a transfer of title from the time of conversion”). The same policies of promoting clear property rights and finality apply in the case of copyright actions involving single copies of completed structures. Indeed, they are perhaps stronger, as we are promoting the alienability of real property.
There is no more precedent or support for this approach than there was for the prior opinion's first sale approach, and the danger to other forms of subject matter is just as great. The court could have easily reached the result it wanted -- permitting Galloway to sell his house in the future, by following the plain words of the statute in the distribution question: because it is not a violation of the Copyright Act to transfer title to an infringing architectural work, Galloway is free to do so. In the end, then, the new opinion, is the old breakfast served up again.