The Second Circuit Court of Appeals in New York held that an authorization to use a document in litigation creates an irrevocable implied license for any party in that action to use the document for the duration of that litigation. Unclaimed Property Recovery Service, Inc. v. Kaplan, Case No. 12-4030 (2d Circuit, August 20, 2013) (available here). Plaintiffs Unclaimed Property Recovery Service, Inc. (“UPRS”) and Bernard Gelb sued Defendant Norman Kaplan, an attorney, for copyright infringement. UPRS allowed Attorney Kaplan’s clients to file a legal complaint and exhibits that were written by Gelb and claimed that Attorney Kaplan’s later amendments of Gelb’s original legal documents infringed UPRSs’ copyrights in the original documents. The Second Circuit held that UPRSs’ authorization to Attorney Kaplan to use such documents in other litigation matters gave an irrevocable authorization to all parties in the litigation to use the documents. As such, the Second Circuit dismissed the case.
UPRS and Gelb were plaintiffs in a class action lawsuit and Attorney Kaplan was the UPRS’ attorney. UPRS and Gelb allege that Gelb conduced research on the allegations in the class action complaint; located and obtained Powers of Attorney from several of the class action plaintiffs; hired Attorney Kaplan to represent the class; wrote the Amended Class Action Complaint (“First Complaint”); and compiled 305 pages of accompanying exhibits (“First Exhibits”). Gelb also alleged that they have copyrights to the First Complaint and First Exhibits. Attorney Kaplan filed the First Complaint and First Exhibits, the case was dismissed, and Kaplan appealed. While the appeal was pending, Attorney Kaplan ceased representation of UPRS and Gelb, but remained as counsel for some of the other class action plaintiffs. New counsel for UPRS and Gelb moved to withdraw the entirety of the pending appeal and it was granted with respect to UPRS and Gelb, but not for the other plaintiffs. Shortly after, Gelb and UPRS received federal copyright registrations for the First Complaint and First Exhibits. The appeal continued without Gelb and UPRS and the court vacated the dismissal of the case, giving the remaining class action plaintiffs an opportunity to file an amended complaint. Attorney Kaplan filed a Second Amended Class Action Complaint (“Second Complaint”) and accompanying exhibits (“Second Exhibits”). Many portions of the Second Complaint and Second Exhibits were identical to the First Complaint and First Exhibits.
UPRS and Gelb sued Attorney Kaplan, claiming that Kaplan infringed their copyrights when he copied portions of the First Complaint and First Exhibits into the Second Complaint and Second Exhibits. The lower court dismissed the action, holding that Attorney Kaplan had an irrevocable implied license to file an amended version of the First Complaint and First Exhibits. UPRS and Gelb appealed to the Second Circuit. The Second Circuit framed the issue as “whether the holder of a copyright in a litigation document who has authorized a party to a litigation to use the document in the litigation may withdraw the authorization after the document has already been introduced into the litigation and then claim infringement when subsequent use is made of the document in the litigation.” Unclaimed Property Recovery Service, Slip Op. Pp. 4-5. The Second Circuit held that this authorization extended to “all present and future attorneys and to the court, an irrevocable authorization to use the document in the litigation thereafter.” Id., Slip Op. P. 5.
The Second Circuit noted that if a copyright holder had the ability to withdraw authorization for the use of documents in litigation that would not only prevent the litigants from proceeding with the case, but it would also prevent the courts from performing their function. As such, the needs of the courts to function prevails over a copyright holder’s interests and the authorization becomes irrevocable as to the participants in the litigation for purposes of that litigation.
Gelb and UPRS gave Attorney Kaplan authorization to use and file the First Complaint. “Consequently, when the author of a complaint authorizes a party to file that complaint, the authorization is not limited to the right to submit the document to the clerk’s office; instead, the author has permitted the party to establish a legal action based on the complaint. Concomitant with that authorization is the authorization to depend on the complaint for the purposes of litigation-and to use the complaint during motion practice, discovery, trial, and appeal.” Unclaimed Property Recovery Service, Slip Op. P. 7. This authorization includes incorporating all or parts of the complaint into an amended complaint.
The Federal Rules of Civil Procedure allow a plaintiff to file an amended complaint. UPRS and Gelb failed to show any legal support for the concept that the author of a complaint may use copyright law to interfere with the litigation process by allowing the filing of a complaint but then forbidding creation and filing of an amended version of that complaint.
Even if Gelb and UPRS had valid copyrights in the First Complaint and First Exhibits, they cannot use copyright law to prohibit the filing of the Second Complaint and Second Exhibits. “A holding in favor of UPRS and Gelb would encourage sharp litigation practices, undermine the attorney-client relationship, and limit the district court’s ability to manage its cases.” Unclaimed Property Recovery Service, Slip Op. P. 8.
The Second Circuit was careful to limit its findings: “Our decision today is based on the particularities of the facts before us. . . We merely hold that, because UPRS and Gelb authorized the class action plaintiffs to file the First Complaint and First Exhibits as the foundation of [the class action lawsuit], UPRS and Gelb may not use copyright law to prohibit those class action plaintiffs (or their attorney) from continuing to use the First Complaint and First Exhibits in the context of that litigation.” Unclaimed Property Recovery Service, Slip Op. P. 10.