determined that MPI was under-reporting sales of the Videos and
miscalculating royalty payments. In May 1994, Gail Zappa
demanded that MPI return all videos, advertising, and
promotional materials belonging to Glovaroma; destroy all Zappa
video inventory in MPI's possession; and provide an affidavit
to that effect. MPI neither provided an affidavit nor remitted
payment. Furthermore, MPI continued to sell-off its existing
inventory. (Def.'s 12(M) ¶ 18.) MPI did not, however, duplicate
any more Videos or video sleeves. (Def.'s 12(M) ¶ 18.)
The copyright registration certificates for the Videos identify
Frank Zappa as the author of the new matter. His personal
efforts, which were not as "work made for hire," include
editing, new lyrics and music, writing, producing, and
directing. (Gerber Decl. Exs. O, Q, S, U, W.) The certificates
identify part of the new matter as "work made for hire."
(Def.'s 12(M) ¶ 4.) MPI contends that no written "work made for
hire" agreements exist for the Videos.
The registration certificates for the video sleeves
accompanying the videos "Baby Snakes," "Uncle Meat," "Video
From Hell," and "The True Story of Frank Zappa's 200 Motels"
(the "Four Sleeves") identify Honker Home Video as the author
and describe the work as "work made for hire." (Def,'s 12(M) ¶¶
6-7.) Frank Zappa created the Four Sleeves with help from Greg
Gorman, Cal Schenkel, and perhaps others. (G. Zappa Dep.
149-55.) Frank Zappa's personal efforts included graphic design
and art direction. (Id.)
Glovaroma does business as Honker Home Video. (Def.'s 12(M) ¶
8.) Glovaroma had no employees who designed the Four Sleeves.
(Def.'s 12(M) ¶ 9.) Furthermore, MPI claims that no written
"work made for hire" agreements exist for the Four Sleeves.
(Def.'s 12(M) ¶¶ 5, 10.)
The copyright registration certificate for "The Amazing Mr.
Bickford" video sleeve (the "Bickford sleeve") identifies Cal
Schenkel as the author. (Def.'s 12(M) ¶ 11.) The registration
certificate further states that Schenkel transferred copyright
ownership of the Bickford sleeve to Frank Zappa "by agreement."
(Def.'s 12(M) ¶ 12.) MPI claims, however, that no written
agreement regarding the transfer of copyright ownership exists
between Schenkel and Frank Zappa. (Def.'s 12(M) ¶ 13.) In 1993,
Frank and Gail Zappa reached a written assignment agreement and
transferred their ownership of all tangible and intangible
property to the Zappa Family Trust. (Plaintiffs.' Resp. Ex. D.)
With respect to the trademark infringement claim, MPI contends
that it never signed an agreement that inured its use of the
Honker Video label to Glovaroma's benefit. (Def.'s 12(M) ¶ 22.)
Therefore, MPI claims that it is the owner of the Honker Home
Video label because it initiated the use of the trademark in
commerce. (Def.'s 12(M) ¶ 20.) Moreover, MPI only used the
Honker Home Video label after May 1994 to sell its existing
inventory. (Def.'s 12(M) ¶ 23.) Finally, MPI contends that Gail
Zappa's objection to the royalty report in April 1989
demonstrates her earliest knowledge of the alleged
under-reporting. (Def.'s 12(M) ¶ 24.)
Both parties move the court to enter summary judgment on their
behalf under Rule 56 of the Federal Rules of Civil Procedure.
The court will render summary judgment only if the factual
record shows "that there is no genuine issue as to any material
fact and the moving party is entitled to a judgment as a matter
of law." Bratton v. Roadway Package Sys., Inc., 77 F.3d 168,
173 (7th Cir. 1996) (quoting Fed.R.Civ.P. 56(c)). The court
will not render summary judgment if "a reasonable jury could
return a verdict for the nonmoving party. "Sullivan v. Cox,
78 F.3d 322, 325 (7th Cir. 1996) (citing Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct.
2505, 91 L.Ed.2d 202 (1986)). In ruling on a motion for summary
judgment, the court views the facts in the light most favorable
to the nonmoving party. See Bratton, 77 F.3d at 171 (citation
omitted); Sullivan, 78 F.3d at 325 (citation omitted).
On a motion for summary judgment, the moving party "bears the
initial burden of showing that no genuine issue of material
fact exists." Hudson Ins. Co. v. City of Chicago Heights,
48 F.3d 234, 237 (7th Cir. 1995) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265
(1986)). Then the burden shifts to the nonmoving party, which
"must set forth specific facts showing that there is a genuine
issue for trial." Fed.R.Civ.P. 56(e); accord NLFC, Inc. v.
Devcom Mid-America, Inc., 45 F.3d 231, 234 (7th Cir. 1995)
These burdens are reflected in Rule 12 of the Local General
Rules for the Northern District of Illinois. See Waldridge v.
American Hoechst Corp., 24 F.3d 918, 921-22 (7th Cir. 1994).
Under Rule 12(M)(3), the moving party must submit a statement
of material facts in the form of short numbered paragraphs
supported by specific references to the factual record. Under
Rule 12(N)(3), the nonmoving party must submit a response to
each such paragraph, including (in the case of disagreement)
specific references to the factual record.*fn1 If the
nonmoving party fails to disagree with a fact in the moving
party's 12(M) statement, the court will deem that fact
admitted. See Local Rule 12(N)(3). Similarly, if the
nonmoving party disagrees with a fact in the moving party's
statement but fails to support its disagreement with a specific
reference to the factual record, the court may deem that fact
admitted as well. See Fed.R.Civ.P. 56(e); Flaherty v. Gas
Research Institute, 31 F.3d 451, 453 (7th Cir. 1994)
(citations omitted). The Seventh Circuit Court of Appeals has
"repeatedly upheld the strict enforcement of these rules."
Waldridge, 24 F.3d at 922; see also, e.g., Knoblauch v. DEF
Express Corporation, 86 F.3d 684, 690 (7th Cir. 1996).
I. Copyright Infringement
A. The Video Sleeves
To establish copyright infringement, plaintiffs' must prove
that they own the copyrights and that defendant copied the
"constituent elements of the work that are original." See
Feist Publications, Inc. v. Rural Tel. Serv. Co.,
499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991). Generally,
plaintiffs can prove ownership by a copyright registration.
See 17 U.S.C. § 401(c). Under the Copyright Act (the "Act"),
copyright ownership "vests initially in the author or authors
of the work." 17 U.S.C. § 201(a). "As a general rule, the
author is the party who actually creates the work, that is, the
person who translates an idea into a fixed, tangible expression
entitled to copyright protection." Community for Creative
Non-Violence v. Reid, 490 U.S. 730, 737, 109 S.Ct. 2166, 104
L.Ed.2d 811 (1989). The Copyright Act, however, creates an
exception for "works made for hire." 17 U.S.C. § 201(b).
In a "work made for hire," the "author" and initial owner of
the copyright is not the creator of the work but the employer
or the party that commissioned the work Section 201(b)
In the case of work made for hire, the employer or other person
for whom the work was prepared is considered the author for
purposes of this title, and, unless the parties have expressly
agreed otherwise in a written instrument signed by them, owns
all the rights comprised in the copyright.
Id. Section 101 defines a "work made for hire" as:
(1) a work prepared by an employee within the scope of his or
her employment; or
(2) a work specially ordered or commissioned for use as a
contribution to a collective work, as part of a motion picture
or other audiovisual work, as a translation, as a supplementary
work, as a compilation, as an instructional text, or as an
atlas, if the parties expressly agree in a written instrument
signed by them that work shall be considered a work made for
17 U.S.C. § 101.
The two parts of this test are mutually exclusive.
Specifically, the first paragraph of section 101 applies to
works created by employees, and the second applies to works
created by independent contractors. See Community for Creative
Non-Violence, 490 U.S. at 742-43, 109 S.Ct. 2166. The CCNV
Court held that "employee" and "employer" in section 101(a)
narrowly describes the traditional agency view of the
employer-employee relationship. MPI has challenged Glovaroma's
valid ownership of the video sleeves for "Baby Snakes," "Uncle
Meat," "Video From Hell," and "The True Story of Frank Zappa's
200 Motels," (the "Four Sleeves"). The copyright registration
identifies the author of these video sleeves as Honker Home
Video and states that the sleeves were "works made for hire."
(Gerber Decl. Exs. R, T, V, X.) Glovaroma is doing business as
Honker Home Video. (Def.'s 12(M) ¶ 8.) Therefore, Glovaroma
must present evidence that it either (1) hired employees who
created the video sleeves or (2) commissioned an independent
contractor, pursuant to a written agreement, to create the
MPI contends that Glovaroma had no employees who designed video
sleeves. (Def.'s 12(M) ¶ 9). In their response, plaintiffs
contend that this statement is a misinterpretation of Gail
Zappa's testimony. Gail Zappa testified that Frank Zappa
created video sleeves in association with Glovaroma, but she
did not know whether this was done in an employment
relationship. (Plaintiffs.' 12(N) ¶ 9.)
Under Local Rule 12(N)(3), a party opposing summary judgment
must serve and file "a response to each numbered paragraph in
the moving party's statement, including, in the case of any
disagreement, specific references to the affidavits, parts of
the record, and other supporting materials relied upon." If the
nonmoving party fails to comply with this requirement, the
court will deem that fact admitted.
Glovaroma, through its failure to provide any affidavits or
deposition testimony that would create a genuine factual issue
whether Frank Zappa and Glovaroma were in an employment
relationship, has failed to meet its burden under Local Rule
12(N)(3). Gail Zappa's uncertainty regarding the relationship
between the two parties is an insufficient denial under the
requirements of Local Rule 12(N). Thus, for purposes of this
motion, the court assumes that Glovaroma had no employees who
designed the sleeves.
Consequently, Glovaroma could only have obtained ownership of
the Four Sleeves if it commissioned an independent contractor.
A work created by an independent contractor can constitute a
"work made for hire" only if it fits one of the nine narrowly
drawn categories of works, and then only by compliance with the
writing requirement. See Community for Creative Non-Violence,
490 U.S. at 748, 109 S.Ct. 2166; see also 17 U.S.C. § 101.
One of these categories is a "supplemental work."
Section 101 describes a supplementary work as:
a work prepared for publication as a secondary adjunct to a
work by another author for the purpose of introducing,
concluding, illustrating, explaining, revising, commenting
upon, or assisting in
the use of the other work, such as forewords, afterwords,
pictorial illustrations, maps, charts, tables, editorial
notes, musical arrangements, answer material for tests,
bibliographies, appendixes, and indexes, and an "instructional
text" in a literary, pictorial, or graphic work prepared for
publication and with the purpose of use in systematic
17 U.S.C. § 101 (emphasis added). The copyright registrations
describe these Four Sleeves as artwork or cover photographs.
(Gerber Decl. Exs. R, T, V, X.) Clearly, the Four Sleeves are