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September 7, 1993

RICHARD HOFFMEYER, Defendant and Third-Party Plaintiff, v. EVAN A. HARRIS, Third-Party Defendant.


The opinion of the court was delivered by: JAMES F. HOLDERMAN

JAMES F. HOLDERMAN, District Judge:

 Plaintiff Harris Custom Builders, Inc. ("Harris Builders") initially filed this action against defendant Richard Hoffmeyer, claiming copyright infringement. Defendant Hoffmeyer then brought a counterclaim against defendant Harris Builders and a third-party complaint against third-party defendant Evan A. Harris, Harris Builders' president, alleging violations of federal antitrust and racketeering laws and asserting a claim for unfair competition.

 Harris and Harris Builders (collectively "Harris") have filed a motion, under Fed. R. Civ. P. 12(b)(6), to dismiss Hoffmeyer's counterclaim and third-party complaint. Harris has also filed a motion for sanctions under Fed. R. Civ. P. 11. Additionally, the parties have advanced a number of motions relating to discovery disputes. For the reasons stated in this memorandum opinion and order, Harris' motion to dismiss and motion for sanctions are granted. The motions relating to discovery are granted in part and denied in part.


 Harris Builders' underlying copyright infringement claim is based on allegations that Hoffmeyer copied Harris Builders' copyrighted architectural drawings for use in the construction of a residence. This claim has been the subject of two motions for summary judgment filed by defendant Hoffmeyer, both of which this court has denied. (See Minute Orders of February 27, 1992 and October 9, 1992.)

 In his counterclaim and third-party complaint, Hoffmeyer alleges that Harris committed racketeering and antitrust violations and engaged in unfair competition by seeking, in this lawsuit, to enforce a copyright which Harris allegedly knew was invalid. According to Hoffmeyer, the reason for the copyright's invalidity is the fact that Harris Builders committed fraud on the copyright office when it procured the copyright. The fraud allegedly occurred when Harris Builders, on the application for registration for a copyright, listed itself as the author of the drawings without mentioning Maxwin Heimann, who for the most part created the drawings "except for minor revisions." (See Third Party Complaint, P 29.) Hoffmeyer characterizes as fraud: 1) Harris Builders' failure to name Heimann as author; and/or 2) Harris Builders' failure to identify Heimann's original drawings, of which the copyrighted drawings were a slightly altered version, as preexisting works upon which the copyrighted drawings were based.



 Harris argues that Hoffmeyer's counterclaim and third-party complaint should be dismissed. The court agrees. Hoffmeyer has not pleaded facts sufficient to support its claim that Harris fraudulently obtained the copyright. Further, Hoffmeyer has not adequately stated claims under federal racketeering and antitrust law, or under state unfair competition law. The reasons underlying these conclusions are discussed below.

 A. Fraud on the Copyright Office

 Hoffmeyer alleges that Harris engaged in a criminal violation of the Copyright Act under 17 U.S.C. § 506(e) for failure to comply with 17 U.S.C. § 409. 17 U.S.C. § 506(e) provides:

Any person who knowingly makes a false representation of a material fact in the application for copyright registration provided for by section 409, or in any written statement filed in connection with the application, shall be fined not more than $ 2,500.

 The claim that Harris knowingly misrepresented facts on the copyright application is the linchpin of Hoffmeyer's counterclaim and third-party complaint. According to Hoffmeyer, Harris, knowing that the copyright had been obtained through misrepresentation and was therefore invalid, used this infringement action based on the copyright to illegally harass its competitor Hoffmeyer.

 This key link of Hoffmeyer's theory must, however, fail. Hoffmeyer's factual allegations do not support his assertion that Harris materially misrepresented facts on the copyright application or that Harris intended to deceive the Copyright Office. The facts averred by counter/third party plaintiff show only that Harris failed to correctly anticipate the evolution of copyright law.

 Hoffmeyer alleges that Heimann was "an independent contractor" at the time he prepared the drawings. (See Third Party Complaint at P 7.) According to Hoffmeyer, Harris Builders' designation of itself as author of the drawing as a "work made for hire" under 17 U.S.C. § 101 was fraudulent because, as the Supreme Court held in Community for Creative Non-Violence v. Reid, 490 U.S. 730, 104 L. Ed. 2d 811, 109 S. Ct. 2166 (1989), the work made for hire provision generally applies only to works produced by employees of an entity, not to those created by independent contractors such as Heimann.

 The Reid case was issued, however, in June 1989, more than four months after Harris Builders completed the copyright registration. Before the Reid case, the case law was unclear and conflicting as to whether a work produced by an independent contractor could be claimed and copyrighted by the hiring party as "a work made for hire." For example, in Evans Newton, Inc. v. Chicago Systems Software, 793 F.2d 889 (7th Cir. 1986), the Seventh Circuit ruled that an independent contractor could produce a "work made for hire" as to which the hiring party would be the author, if the hiring party exercised a sufficient degree of control or supervision over the independent contractor's creation of the work. Id. at 894.

 In representing itself as the author of a "work made for hire" on the basis that the drawings had been done for it by an independent contractor, Harris Builders took a position that several courts of appeal had endorsed as, at least, potentially viable. See Reid, 490 U.S. at 736 n. 2 (detailing holdings of various courts of appeal). The fact that the Supreme Court's interpretation of the law later undercut Harris' stance does not convert Harris' conduct, which was supported by the law as it existed at the time, into fraud.

 Hoffmeyer's allegations relative to Harris' failure to identify "preexisting works" on the copyright registration also do not support a claim of fraud. Counter/third-party plaintiff Hoffmeyer faults Harris for leaving blank Space 6 of the Form VA (visual arts) copyright registration, which calls for the identification of preexisting work upon which the work sought to be ...

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