DEFENDANTS' MOTION TO DISMISS

INTELLECTUAL RESERVE, INC.,

PLAINTIFF,

VS.

UTAH LIGHTHOUSE MINISTRY, INC.,
A UTAH CORPORATION, ET AL.,

DEFENDANT.

CIVIL NO. 2:99-CV-808C

SALT LAKE CITY, UTAH
JANUARY 4, 2000

TRANSCRIPT OF DEFENDANTS' MOTION TO DISMISS
BEFORE THE HONORABLE TENA CAMPBELL
UNITED STATES DISTRICT JUDGE

KIRTON & MC CONKIE
BY: TODD E. ZENGER, ESQ.
BERNE S. BROADBENT, ESQ.
1800 EAGLE GATE TOWER
60 EAST SOUTH TEMPLE
SALT LAKE CITY, UTAH 84111
(801) 328-3600

UTAH LEGAL CLINIC
BY: BRIAN M. BARNARD, ESQ.
214 EAST FIFTH SOUTH
SALT LAKE CITY, UTAH 84111
(801) 328-9531

THE COURT: GOOD AFTERNOON. WE'RE HERE IN THE MATTER OF I.R.I. VERSUS UTAH LIGHTHOUSE MINISTRY, 99-CV-0808, HERE TODAY ON THE DEFENDANTS' MOTION TO DISMISS. REPRESENTING THE PLAINTIFF IS MR. BERNE BROADBENT, MR. TODD ZENGER, AND MR. WILLIAM NELSON REPRESENTING THE PARTIES. REPRESENTING THE DEFENDANTS, MR. BRIAN BARNARD, AND I NOTE THE PRESENCE OF MR. AND MRS. TANNER.

I HAVE READ THE MATERIAL AND THE CASES. BEFORE WE BEGIN THE ARGUMENT, PLEASE DON'T LET ME FORGET. I NEED TO CLEAR UP SOME OF THE OUTSTANDING MOTIONS THAT WE HAVE TO SEE WHERE WE'RE GOING. THE DOCKET SHOWS THAT WE STILL HAVE LEFT--AND I DON'T BELIEVE IT'S FULLY BRIEFED--THE RULE 11 MOTION, THE MOTION FOR A SECURITY REGARDING THE INJUNCTION, AND A MOTION TO STRIKE. SO I JUST NEED TO KNOW WHERE WE'RE GOING WITH ALL OF THOSE.

OKAY. ON THE THE MOTION TO DISMISS, LET ME JUST TELL YOU, MR. BARNARD, I'M HAVING SOME DIFFICULTY IN VIEW OF THE CASE LAW UNDERSTANDING HOW PLAINTIFF'S WORK, WHICH SEEMS TO BE SIMPLY AN UPDATE OF THEIR PREVIOUS WORK AND THEREFORE A DERIVATIVE WORK, UNDER THE CASE LAW IT DOESN'T SEEM TO ME THAT--THAT THE PREEXISTING WORK HAS TO HAVE BEEN COPYRIGHTED.

AND I WAS PARTICULARLY IMPRESSED OR INFLUENCED BY THE CASES, THE INDEPENDENT SERVICE ORGANIZATIONS CASE, 964 FED.SUPP 1469; THE STREETWISE MAPS CASE, THE SECOND CIRCUIT CASE, 159 FED.3RD 739; AND THE GREENWICH FILM PRODUCTIONS CASE OUT OF THE SOUTHERN DISTRICT OF NEW YORK. MAYBE I'M JUST TOTALLY MISUNDERSTANDING IT, AND SO I'M GOING TO ASK YOU TO HELP ME PUT IT IN PERSPECTIVE EXACTLY WHY YOU SAY THEIR COPYRIGHT IS DEFECTIVE.

MR. BARNARD: FAR BE IT FOR ME TO SAY THAT YOUR HONOR IS TOTALLY MISUNDERSTANDING IT.

MR. BARNARD: YOUR HONOR, MADE A MISSTATEMENT AT THE VERY BEGINNING OF WHAT YOU JUST SAID.

MR. BARNARD: AND THAT IS THAT AN UPDATE IS A DERIVATIVE WORK, AND THAT IS SIMPLY NOT THE CASE.

MR. BARNARD: AN UPDATE IS THAT; IT IS AN UPDATE. IT IS NOT A DERIVATIVE WORK. SO IF SOMEBODY WRITES A WORK IN 1989 AND TEN YEARS LATER, NINE YEARS LATER, THEY GO BACK AND THEY MAKE SOME EDITING CHANGES AND THEY CHANGE A LITTLE BIT OF PUNCTUATION AND THEY PUT SOME NEW HEADINGS IN IT, THAT IS AN UPDATE. THAT IS NOT A DERIVATIVE WORK. THE ONLY PROTECTION FOR THAT WORK WOULD BE THE PROTECTION FOR THE ORIGINAL WORK, THE 1989 WORK OF WHATEVER COPYRIGHT PROTECTION THERE IS IN THERE.

THE COURT: WHAT DO YOU THEN SAY IS--IF WE'VE GOT THE SAME AUTHOR--AND I DON'T THINK THERE'S ANY QUESTION THAT WE HAVE THE SAME AUTHOR OR SET OF AUTHORS FROM THE PREEXISTING WORK THAT MS. TANNER WENT THROUGH, I GUESS IT'S 1989, AND OUR PRESENT WORK--SAME AUTHORS, WHAT WOULD MAKE IT A DERIVATIVE WORK? HOW DO YOU SEE THAT?

MR. BARNARD: WELL, THE THREE TERMS THAT WE'RE CONCERNED WITH IN COPYRIGHT LAW AS WE LEARN--AS I LEARN THE NOMENCLATURE, ARE ORIGINAL WORK, COMPILATION, AND A DERIVATIVE WORK.

MR. BARNARD: AN ORIGINAL WORK IS WHEN I WRITE THE GREAT AMERICAN NOVEL: NOBODY ELSE HAS WRITTEN IT BEFORE I WRITE IT. A DERIVATIVE WORK IS WHEN SOMEBODY TAKES MY GREAT AMERICAN NOVEL AND CHANGES IT INTO A SCREENPLAY AND PRODUCES IT AND PUTS IT ON THE SCREEN. THAT'S A DERIVATIVE WORK. THEY'VE TAKEN MY ORIGINAL IDEAS. THEY'VE CHANGED IT. THEY HAVE PUT IN SOME ORIGINALITY OF THEIR OWN, AND THEY'VE CREATED A DERIVATIVE WORK.

AND THE LAST ONE IS A COMPILATION, AND THAT IS WHERE I COLLECT A DOZEN STORIES ABOUT DOGS, AND I TAKE THOSE STORIES AND I'VE SELECTED THEM FOR SOME UNIQUE REASONS AND SAID, "I'M GOING TO PUT THOSE 12 STORIES ABOUT DOGS INTO A BOOK. I'M CREATING A COMPILATION.

THE COMPILATION ASPECTS ARE THE SELECTION--FOR SOME REASON I HAVE SELECTED THESE 12 DOG STORIES--AND I'VE PUT THEM IN A PARTICULAR ORDER, SO MY SELECTION AND MY ARRANGEMENT IS PROTECTED.

WITH REGARD TO A DERIVATIVE WORK, WHERE I'VE TAKEN OR SOMEBODY ELSE HAS TAKEN MY GREAT AMERICAN NOVEL AND PUT IT INTO A SCREEN PLAY, THEY'VE CHANGED THE WORDS. THEY'VE POTENTIALLY CHANGED--THEY'VE CHANGED IT BECAUSE NOW THEY'RE DESCRIBING SCENES SO THAT IT CAN BE PUT ON FILM; SOMEBODY MAKES IT INTO A FILM. THE SCREENPLAY AND THE FILM THEMSELVES BECOME DERIVATIVE WORKS. THEY'RE DIFFERENT THAN MY ORIGINAL WORK. THERE HAS BEEN SOME ADDITIONAL CREATIVITY OR ORIGINALITY ADDED TO THEM.

WHAT WE HAVE IN THE CASE AT BAR IS WE HAVE THE 1989 GENERAL HANDBOOK OF INSTRUCTION, WHICH IS NOT REGISTERED WITH THE COPYRIGHT OFFICE. IN 1998 THAT GENERAL HANDBOOK OF INSTRUCTIONS IS REWRITTEN. BASED UPON THE EXHIBITS THAT MY CLIENTS HAVE PREPARED AND SUBMITTED, THE 17 PAGES THAT ARE AT ISSUE THAT APPEARED ON MY CLIENTS' WEB SITE WERE TAKEN SUBSTANTIALLY VERBATIM FROM THE 1989 WORK.

SO WHAT THE DEFENDANT--WHAT THE PLAINTIFF IS PROPOSING IS THAT YOU TAKE A 1989 WORK; YOU REWRITE IT; PUT SOME NEW HEADINGS IN IT, AND THEN YOU COPYRIGHT THE NEW WORK--"NEW" IN QUOTES--THE REWRITTEN WORK, AND YOU SAY, "I WANT PROTECTION BASED UPON THIS NEW REWRITE." AND COPYRIGHT LAW SIMPLY DOESN'T WORK THAT WAY. IT IS NOT A CHANGED WORK. IT IS SIMPLY A REWRITE OF THE 1989 WORK.

AND MY CLIENTS, AS WE ESTABLISHED, 73 PERCENT OF WHAT WAS ON THEIR WEB SITE CAME FROM THE 1989 WORK. SO IF THERE'S BEEN A COPYRIGHT INFRINGEMENT, THE INFRINGEMENT IS MY CLIENTS COPYING WORK--COPYING MATERIAL FROM THE 1989 WORK RATHER THAN THE 1998 WORK.

THE COURT: LET ME JUST STOP YOU. OF THE THREE TERMS THAT YOU GIVE ME, ORIGINAL WORK, DERIVATIVE WORK, COMPILATION, WHAT DO YOU SAY IT IS? WHAT THEN DO YOU SAY IT IS?

MR. BARNARD: IT IS A REWRITE--THE 1998 VERSION IS A REWRITE OF THE 1989 VERSION. IT IS NOT AN ORIGINAL WORK BECAUSE IT'S COPIED ESSENTIALLY VERBATIM FROM THE '89 WORK, THEREFORE IT'S NOT AN ORIGINAL WORK. IT IS NOT A COMPILATION BECAUSE THERE'S NO UNIQUE SELECTION. AND IT IS NOT A DERIVATIVE WORK BECAUSE IT HASN'T BEEN CHANGED.

SO WHAT WE HAVE IS THE 1989 WORK, WHICH IS REPRODUCED IN 1998. IT IS NOT A DERIVATIVE WORK BECAUSE IT'S VERBATIM. IT IS NOT AN ORIGINAL WORK BECAUSE IT IS VERBATIM. SO ALL IT IS IS A REWRITE OF THE 1989 VERSION. AND IF THERE HAS BEEN A COPYRIGHT INFRINGEMENT, THE INFRINGEMENT HAS BEEN OF THE 1989 WORK, AND THAT'S WHAT NEEDS TO BE ALLEGED. ALSO REGISTRATION HAS TO BE ALLEGED. IN ORDER TO BRING A COPYRIGHT INFRINGEMENT LAWSUIT, A PREREQUISITE IS A REGISTRATION, AND THAT REGISTRATION HAS TO BE OF THE 1989 WORK BECAUSE THAT'S WHAT MY CLIENTS HAD ON THEIR WEB SITE.

SO WHAT THE PLAINTIFF IS ATTEMPTING TO DO IS SAYING, "WE CREATED THIS WORK IN 1989. WE REWROTE IT; PUT SOME NEW HEADINGS; ADDED A FEW WORDS HERE AND THERE. BUT IT IS ESSENTIALLY THE SAME. IT IS 73 PERCENT THE SAME AS THE 1989 VERSION.

AND THEN THEY WENT TO THE COPYRIGHT OFFICE AND SAID, "WE'VE CREATED A DERIVATIVE WORK, OR WE'VE CREATED AN ORIGINAL WORK." I'M NOT SURE FROM THEIR REGISTRATION WHAT THEY'RE SAYING THE '98 VERSION IS. BUT THEY HAVE SAID, "IN 1998 WE CREATED SOME WORK WORTHY OF COPYRIGHT, WORTHY OF COPYRIGHT REGISTRATION," AND THEY BRING A LAWSUIT ON THAT.

THE COURT: ALL RIGHT. DON'T--THE CASES YOU CITED, WEREN'T THEY CASES WHERE YOU HAD DIFFERENT AUTHORS OF THE TWO WORKS? I MEAN WHAT WE HAVE HERE IS ONE ENTITY, THAT IT'S REALLY THE SAME WORK. ISN'T THAT SOMEWHAT GLORIFYING FORM OVER SUBSTANCE? I MEAN--

MR. BARNARD: TO A LARGE EXTENT, BECAUSE IT'S STATUTORY, THE LETTER OF THE LAW BECOMES VERY IMPORTANT. AND, YES, WE HAVE THE SAME AUTHOR, BUT WE STILL HAVE A REWRITE OF THE 1989 VERSION. EVEN THOUGH IT'S THE SAME AUTHOR, IT'S THE SAME PERSON REWRITING IT IN 1998, IT IS A REWRITE.

AND SO THE PROTECTION--COPYRIGHT PROTECTION OCCURS WHEN THE WORK IS CREATED. THE WORK WAS CREATED IN 1989. IT WASN'T REGISTERED. THEY TOOK--NINE YEARS LATER THEY DID A REWRITE, AND THEY SAID, "OKAY. WE NOW HAVE A REWRITE. WE'RE GOING TO REGISTER THIS REWRITE," AND THEYRE SEEKING COPYRIGHT PROTECTION OF THE REWRITE FROM 1998.

MR. BARNARD: AND OUR POSITION IS THAT IF THERE'S BEEN A COPYRIGHT VIOLATION, IT IS OF THE WORK THAT WAS CREATED IN 1989. AND IN ORDER TO BRING A LAWSUIT UPON THAT, REGISTRATION IS REQUIRED, AND THERE HAS BEEN NO REGISTRATION OF THE 1989 WORK.

MR. BARNARD: TWO OTHER ISSUES THAT WE RAISED IN OUR MOTION TO DISMISS THAT I THINK HOPEFULLY WE CAN RESOLVE, AND THAT IS THAT THERE'S BEEN NO INFRINGEMENT OF ANY COMPILATION. IN THE COMPLAINT AND IN THE COPYRIGHT REGISTRATION THE PLAINTIFF SUGGESTS OR STATES THAT THERE HAS BEEN A VIOLATION OF THE COMPILATION BY MY CLIENTS.

AGAIN, THE PROTECTION OF A COMPILATION IS FOR THE UNIQUE SELECTION OR ARRANGEMENT, THE CREATIVITY, ORIGINALITY IN MAKING SELECTION AND ARRANGEMENT. MY CLIENT HAS NOT COPIED THE SELECTION OR ARRANGEMENT. THEY'VE SIMPLY COPIED 17 PAGES VERBATIM. SO THAT IS NOT A VIOLATION OF THE PROTECTED RIGHT OF A COMPILATION, SELECTION AND ARRANGEMENT.

THERE'S ALSO A SUGGESTION IN THE COMPLAINT AND IN THE PLAINTIFF'S RECENT MEMO THAT MY CLIENTS HAVE SOMEHOW CREATED A DERIVATIVE WORK. AND, AGAIN, VERBATIM COPYING IS NOT A DERIVATIVE WORK.

THE COURT: IS THAT REALLY WHAT THEY WERE ARGUING, OR IS IT THAT THEY HAD CREATED A--THAT YOUR CLIENTS HAD CREATED A DERIVATIVE WORK OR THAT THEIR WORK WAS A DERIVATIVE WORK? HOW DID YOU READ THAT?

MR. BARNARD: BOTH. I FOUND THEM--IN THEIR MOST RECENT MEMO THE PLAINTIFF IS MAKING BOTH THOSE ARGUMENTS; THAT THE PLAINTIFF CREATED THE DERIVATIVE WORK, AND THAT MY CLIENTS SOMEHOW BY PUTTING IT ON THE INTERNET CREATED A DERIVATIVE WORK.

SO IT'S OUR POSITION THAT IF THERE HAS BEEN A COPYRIGHT INFRINGEMENT, IT IS OF A WORK THAT WAS CREATED IN 1989, WHICH WAS COPIED, WHICH WAS REWRITTEN SLIGHTLY MODIFIED INTO THE 1998 VERSION. AND BECAUSE OF THE REQUIREMENTS OF COPYRIGHT LAW, WE HAVE TO HAVE A REGISTRATION OF THE '89 VERSION. THERE IS NO REGISTRATION OF THE '89 VERSION; THEREFORE, THE COMPLAINT FAILS TO STATE A CAUSE OF ACTION; THEREFORE, THIS COURT ALSO DOES NOT HAVE SUBJECT MATTER JURISDICTION.

MR. BROADBENT: YOUR HONOR, THIS CASE--OR THIS MOTION TODAY REALLY IS ABOUT WHETHER THIS COURT HAS JURISDICTION AND WHETHER THE PLEADINGS ARE SUFFICIENT TO ALLOW THE CASE TO GO FORWARD. IT SEEMS THAT WE'RE JUMPING AHEAD AND TRYING TO RULE ON THE MERITS OF A POSSIBLE DEFENSE THAT REALLY HAS NOT, TO THE EXTENT IT EXISTS, AND WE WOULD BELIEVE THAT IT DOES NOT, HAS REALLY NOT BEEN FULLY DEVELOPED IN AN EVIDENTIARY RECORD SUFFICIENT TO ALLOW THE COURT TO RULE ON THAT.

THE COURT: AND THAT'S A GOOD POINT. WE ARE CONSIDERING MATTERS THAT ARE OUTSIDE THE PLEADINGS, AND I THINK YOU AGREE WITH THAT, MR. BARNARD. IS THIS--IS THIS IN EFFECT A MOTION FOR SUMMARY JUDGMENT ON THE ISSUE OF--OF WHETHER THERE'S A VALID COPYRIGHT? HOW DO YOU SEE THAT?

MR. BARNARD: I THINK YOUR HONOR IS CORRECT, THAT WE ARE LOOKING AT SOME MATTERS BEYOND THE PLEADINGS, BUT THEY RELATE TO THE PLEADINGS BECAUSE AN ESSENTIAL ELEMENT IS A REGISTRATION AND WE'RE SAYING THERE IS NO REGISTRATION.

MR. BROADBENT: LET ME ADDRESS FIRST OF ALL A COUPLE OF MATTERS OF INFORMATION THAT MAY BE HELPFUL. THE STATUTE DEFINES A DERIVATIVE WORK DIFFERENTLY I THINK THAN WHAT WE HAVE HEARD HERE TODAY. THE STATUTE SAYS THAT A DERIVATIVE WORK--THIS IS IN SECTION 101, AS THE COURT IS AWARE, OF THE COPYRIGHT ACT--THAT, "A DERIVATIVE WORK IS BASED UPON ONE OR MORE PREEXISTING WORKS, SUCH AS A TRANSLATION, MUSICAL ARRANGEMENT, DRAMATIZATION, FICTIONALIZATION, MOTION PICTURE, SOUND RECORDING, ART REPRODUCTION, ABRIDGEMENT, CONDENSATION, OR ANY OTHER FORM IN WHICH THE WORK MAY BE RECAST, TRANSFORMED OR ADAPTED." CONTRARY TO WHAT WAS JUST REPRESENTED, THE STATUTE GOES ON IN THAT SAME PARAGRAPH TO INDICATE, "A WORK CONSISTING OF EDITORIAL REVISIONS, ANNOTATIONS, ELABORATIONS OR OTHER MODIFICATIONS WHICH, AS A WHOLE, REPRESENT AN ORIGINAL WORK OF AUTHORSHIP IS A 'DERIVATIVE WORK'".

SIMILARLY, THE STATUTE DEFINES COMPILATION. THE STATUTE STATES, AGAIN IN SECTION 101, "A COMPILATION IS A WORK FORMED BY THE COLLECTION AND ASSEMBLING OF PREEXISTING MATERIALS OR OF DATA"--WHICH WE KNOW ARE NOT IN THEMSELVES COPYRIGHTABLE--"THAT ARE SELECTED, COORDINATED OR ARRANGED IN SUCH A WAY THAT THE RESULTING WORK AS A WHOLE CONSTITUTES AN ORIGINAL WORK OF AUTHORSHIP."

THE COURT: WHAT IS YOUR POSITION? I WASN'T--ARE YOU SAYING THAT THE 1998 WORK IS A DERIVATIVE WORK OR A COMPILATION, OR ARE YOU SAYING BOTH?

MR. BROADBENT: WELL, I GUESS INITIALLY WHAT I'M SAYING IS I DON'T BELIEVE IT MATTERS FOR WHAT WE'RE HERE ABOUT TODAY, BUT LET ME TURN TO THE COPYRIGHT REGISTRATION CERTIFICATE AND ADDRESS THAT QUESTION. THE COPYRIGHT REGISTRATION CERTIFICATE STATES IN SPACE 6A THAT THIS WORK IS BASED ON OR INCORPORATES PRIOR HANDBOOKS, SUPPLEMENTS AND INSTRUCTIONS.

NOW, IT TURNS OUT THAT THE CHAPTER THAT THE DEFENDANTS POSTED ON THEIR WEB SITE IS SIMILAR IN CONTENT AND SUBJECT MATTER TO PORTIONS OF A PRIOR WORK CALLED THE GENERAL HANDBOOK OF INSTRUCTIONS. IT'S NOT A PRIOR VERSION OF THIS WORK. THAT IS JUST ONE OF THE PRIOR HANDBOOKS THAT WAS THEN ABRIDGED AND CONDENSED AND CORRELATED INTO A COMPREHENSIVE NEW WORK THAT IS CALLED THE CHURCH HANDBOOK OF INSTRUCTIONS.

AND SO IN SPACE 6B, WHAT IS INDICATED THERE IS THAT THE MATERIAL THAT WAS ADDED TO THIS WORK AND IN WHICH COPYRIGHT IS CLAIMED INCLUDES SUBSTANTIALLY NEW TEXT, AND THEN SELECTION, ARRANGEMENT, CONDENSATION AND REVISION OF PREEXISTING TEXT.

NOW, I THINK IF WE LOOK AT WHAT'S HAPPENED IN THIS CASE, THEY POSTED ON THEIR WEB SITE A--WE'LL TAKE JUST CHAPTER TEN OF THE CHURCH HANDBOOK OF INSTRUCTIONS. THAT'S WHAT THEY CALLED IT. THEY CALLED IT CHAPTER TEN OF THE CHURCH HANDBOOK OF INSTRUCTIONS. THEY DIDN'T CALL IT THIS IS VERBATIM FROM THE 1989 VERSION.

AND IN FACT I THINK IF WE LOOK AT MRS. TANNER'S FOURTH AFFIDAVIT, WE WILL SEE THAT IN FACT IT IS NOT VERBATIM FROM THE PRIOR VERSION--OR THE PRIOR HANDBOOK. WE SEE THAT FOR INSTANCE THE CHURCH HANDBOOK OF INSTRUCTIONS INITIALLY TALKS ABOUT MATTERS THAT WERE ADDRESSED PREVIOUSLY ON PAGE 10-1 OF THE GENERAL HANDBOOK OF INSTRUCTIONS, AND THEN IT SKIPS TO PAGE 10-5 AND 6. THERE ARE A LOT OF WHITE SPACES IN THIS COLOR CODED EXHIBIT WHERE THERE IS NO CORRESPONDING TEXT THAT IS WORD FOR WORD. AND IN FACT I THINK THEIR POSITION IS IT'S NOT ALL VERBATIM. IT'S ONLY ABOUT--LET ME GET THIS RIGHT--I BELIEVE IT'S 63 PERCENT TAKEN FROM THE PRIOR WORK.

MR. BROADBENT: ONE OF THEM IS 63 AND ONE OF THEM IS 73, AND I CAN'T REMEMBER WHICH WAY THEY GO. BUT WHAT HAVE THEY DONE IN THIS CASE? WELL, HAVE THEY COPIED ANY SUBSTANTIALLY NEW TEXT? WELL, I THINK IT'S CLEAR THEY HAVE, BECAUSE THEY POSTED ON THEIR WEB SITE MATERIAL THAT ESSENTIALLY IS THE WHITE PORTIONS OF THIS EXHIBIT-X.

AND HAVE THEY INFRINGED ANY SELECTION OR ARRANGEMENT? WELL, THEY CLEARLY HAVE, BECAUSE THEY POSTED IT IN THE SAME ORDER THAT IT'S IN THE NEW CHURCH HANDBOOK OF INSTRUCTIONS. THEY POSTED SUBJECT MATTER THAT USED TO BE ON PAGE 10-1 AND THEY FOLLOWED IT BY 10-5 AND THEN BACK TO 10-1 AND THEN TO 10-2. SO THEY CLEARLY FOLLOWED THE SAME COMPILATION AND ORDER IN THE NEW CHURCH HANDBOOK OF INSTRUCTIONS.

DID THEY COPY ANY CONDENSATION OR REVISION? WELL, CLEARLY THEY DID. I DON'T KNOW AS I LOOK AT THIS EXHIBIT THAT MRS. TANNER HAS PREPARED THAT THERE IS A SINGLE PARAGRAPH THAT IS ALL BLUE, MEANING THAT IT WAS ALL TAKEN FROM THE PRIOR HANDBOOK. NOW, I MAY BE WRONG. I THINK--BUT I THINK THAT'S TRUE. NOW I SEE A PARAGRAPH HERE, BUT THERE AREN'T VERY MANY. IF YOU LOOK AT MOST OF THOSE, ALMOST EVERY PARAGRAPH HAS SOMETHING IN IT THAT'S NOT THE SAME AS WAS IN THE PREVIOUS MATERIALS.

AND SO THEY HAVE COPIED NOT ONLY THE NEW TEXT, BUT THE SELECTION AND ARRANGEMENT AND THE CONDENSATION AND REVISION.

NOTHING WOULD BE GAINED BY HAVING THE PLAINTIFF AMEND THE COMPLAINT TO SIMPLY STATE THAT FACT, WHICH IS EVIDENT FROM THE EXHIBITS AND VERIFIED COMPLAINT. AND ESSENTIALLY WHAT THEY WANT THE PLAINTIFF TO DO IT SEEMS IS TO DETAIL FOR THEM A POTENTIAL DEFENSE. THAT THEY WANT--THEY WANT THE PLAINTIFF TO DETAIL AND CLASSIFY AND LIST ALL OF THE COPYRIGHTABLE CONTENT, WHETHER IT'S A NEW TEXT, OR A COMPILATION, OR WHETHER IT'S A CONDENSATION, OR WHY IT'S A DERIVATIVE WORK AND EXPLAIN THAT IN THE COMPLAINT IN ORDER FOR THE COMPLAINT TO BE SUFFICIENT TO STATE A CLAIM. THERE IS NO CASE THAT HAS BEEN CITED BY THE DEFENDANTS THAT WOULD SUPPORT THAT POSITION, AND WE'RE NOT AWARE OF ANY, YOUR HONOR.

THE COURT: TELL ME HOW YOU WOULD SAY--AND YOU'VE MADE YOUR FACTUAL ARGUMENT VERY WELL. TELL ME LEGALLY THE CASES THAT YOU GAVE ME, WHAT IS THE PROPOSITION THEN THAT YOU STAND ON?

MR. BROADBENT: THE PROPOSITION WE STAND ON, YOUR HONOR, IS THAT THE WORK THAT IS ALLEGED TO BE INFRINGED AND WHICH MUST HAVE BEEN REGISTERED IN THE U.S. COPYRIGHT OFFICE IS THE 1999 CHURCH HANDBOOK OF INSTRUCTIONS. THE CERTIFICATE OF REGISTRATION OR COPY WAS ATTACHED TO THE COMPLAINT. THAT'S WHAT THEY SAID THEY COPIED. THAT'S WHAT THE COMPLAINT ALLEGES THEY COPIED AND INFRINGED, AND THAT'S WHAT HAS BEEN REGISTERED.

AND ON THAT BASIS WE BELIEVE THAT THE JURISDICTIONAL REQUIREMENTS HAVE BEEN FULLY SATISFIED. I THINK THE FACTUAL BASIS THAT WE HAVE DISCUSSED HERE MAKES IT CLEAR THAT THEY HAVE NOT IN FACT JUST COPIED FROM A PRIOR WORK. THEY HAVE COPIED FROM THE 1998 CHURCH HANDBOOK OF INSTRUCTIONS, WHICH IS WHAT WE ALLEGED IS INFRINGED.

WE WOULD SUBMIT FOR THOSE REASONS, YOUR HONOR, THAT THE COMPLAINT CLEARLY STATES A CLAIM UPON WHICH RELIEF CAN BE GRANTED, CLEARLY GIVES THEM NOTICE OF THAT CLAIM, AND THAT THIS COURT CLEARLY HAS JURISDICTION OVER THE SUBJECT MATTER.

THE COURT: WHAT ABOUT MR. BARNARD'S ARGUMENT THAT--THAT YOU ARE SOMEHOW CLAIMING THAT THE TANNERS HAVE MADE A COMPILATION OR A DERIVATIVE WORK? IS THAT YOUR ARGUMENT AT ALL?

MR. BROADBENT: WELL, THE COMPLAINT DOES ALLEGE THAT, AND I BELIEVE THE STATUTE WOULD SUPPORT THAT. THAT'S NOT THE SOLE ALLEGATION. THERE IS AN ALLEGATION OF DIRECT INFRINGEMENT. AS THE COURT IS AWARE UNDER SECTION 106 OF THE COPYRIGHT ACT, ONE OF THE EXCLUSIVE RIGHTS OF THE COPYRIGHT OWNER IS TO REPRODUCE THE COPYRIGHTED WORK. THE PLAINTIFF HAS ALLEGED THAT THEY HAVE DONE THAT IN VIOLATION OF THE COPYRIGHT OWNER'S RIGHTS.

ANOTHER SEPARATE EXCLUSIVE RIGHT IS THE RIGHT TO PREPARE DERIVATIVE WORKS BASED UPON THE COPYRIGHTED WORK, AND THE PLAINTIFF HAS ALLEGED THAT THEY HAVE ALSO DONE THAT. AND I THINK IF WE LOOK AT THE DEFINITION OF DERIVATIVE WORK, IT'S CLEAR THAT--THAT THAT ALLEGATION AT LEAST HAS MERIT FROM A PLEADINGS STANDPOINT, AND THAT IS THAT THEY CERTAINLY HAVE RECAST A PRINTED PUBLICATION INTO ELECTRONIC FORM, AND IN FACT THEY DID OMIT SOME PORTIONS AND PULL IN SOME PORTIONS OF THE HANDBOOK. WHERE THERE WERE CROSS-REFERENCES FOR INSTANCE IN THE ORIGINAL TEXT, THEY WENT AND GOT THE CROSS-REFERENCED TEXT AND PLUGGED THAT IN IN ITS PLACE. AND SO, YES, THE COMPLAINT DOES ALLEGE THAT THEY CREATED A DERIVATIVE WORK, AND WE BELIEVE THAT THAT'S SUPPORTED BY THE LAW.

MR. BARNARD: AGAIN, OUR POSITION IS THAT THERE MAY BY A COPYRIGHT VIOLATION IN THE 1989 WORK. THERE ALSO MAY BE A COPYRIGHT VIOLATION IF MY CLIENTS COPIED ANY NEW MATERIAL THAT WAS ADDED TO THE 1998 WORK. HOWEVER, THE COMPLAINT DOES NOT ALLEGE AN INFRINGEMENT OF THE 1989 WORK.

AND WHAT WE'RE TALKING ABOUT IS SECTION 411 OF THE COPYRIGHT ACT, WHICH REQUIRES A REGISTRATION BEFORE A LAWSUIT CAN BE BROUGHT. THERE'S NO QUESTION THERE'S A REGISTRATION OF THE 1998 WORK. HOWEVER, THE 1998 WORK, AND OPPOSING COUNSEL HAS ESSENTIALLY ADMITTED THAT IT, ESPECIALLY CHAPTER TEN, A REWRITE OF THE 1989 WORK. BECAUSE OF THAT, BECAUSE IT'S SIMPLY A REWRITE OF THE '89 WORK, IT--THERE HAS TO BE A REGISTRATION OF THE '89 WORK, AND THIS LAWSUIT HAS TO BE BASED UPON '89 WORK, NOT THE '98 WORK. AND THAT'S STATUTORY. THE STATUTE SPECIFICALLY SAYS THERE MUST BE A REGISTRATION BEFORE A LAWSUIT CAN BE BROUGHT.

AND IF--OPPOSING COUNSEL SAYS NOTHING WOULD BE GAINED BY FORCING THE PLAINTIFF TO RE-PLEAD. THAT'S NOT ACCURATE. THIS COURT DOESN'T HAVE JURISDICTION UNTIL SUCH TIME AS THEY DO RE-PLEAD. AND UNTIL SUCH TIME AS THERE IS A REGISTRATION OF THE '89 WORK, THIS COURT DOESN'T HAVE JURISDICTION.

OPPOSING COUNSEL SUGGESTS THAT WE HAVE A MATTER OF SIMPLY NOTICE PLEADING; THAT THE DEFENDANTS HAVE BEEN PUT ON NOTICE AS TO WHAT THEIR CLAIMS ARE. WE'RE NOT HERE COMPLAINING ABOUT LACK OF NOTICE. WHAT WE'RE HERE ABOUT IS COMPLAINING ABOUT A LACK OF REGISTRATION. THAT IS JURISDICTIONAL. ABSENT A REGISTRATION OF THE INFRINGED WORK--THE 1989 WORK IS THE INFRINGED WORK--ABSENT REGISTRATION OF THAT WORK, THIS COURT LACKS JURISDICTION.

WITH REGARD TO OPPOSING COUNSELS SUGGESTION THAT CREATING A WORK IN ELECTRONIC FORMAT IS A DERIVATIVE WORK, THAT'S SIMPLY NOT THE CASE. COPYING SOMETHING VERBATIM DOES NOT CREATE A DERIVATIVE WORK. AND IF MY CLIENTS WENT THROUGH AND TOOK A PARAGRAPH CUT HERE OR A PARAGRAPH OUT THERE, THAT DOESN'T CONSTITUTE A DERIVATIVE WORK. THAT CONSTITUTES COPYING SOMETHING VERBATIM, AND THE VIOLATION--

THE COURT: WHY WOULDN'T THAT BE--WHY WOULDN'T THAT BE MAKING A COMPILATION OF SOME SORT? YOU'RE SELECTING AND ARRANGING.

MR. BARNARD: WELL, IT MAY WELL BE A COMPILATION THAT MY CLIENTS CREATED, BUT THAT DOESN'T INFRINGE THE PLAINTIFF'S RIGHT WITH REGARD TO CREATING DERIVATIVE WORKS. IF MY CLIENTS GO THROUGH AND USING THEIR OWN METHODS OR THEIR OWN REASONING COMPILE OR SELECT SOMETHING AND CREATE A COMPILATION, THAT DOESN'T INFRINGE--THAT DOESN'T CREATE A DERIVATIVE WORK. COPYING--AGAIN, COPYING SOMETHING VERBATIM IS NOT A COMPILATION; COPYING SOMETHING--COPYING SOMETHING VERBATIM IS NOT CREATING A DERIVATIVE WORK.

BUT, AGAIN, WE'RE NOT HERE BASED UPON SOME TECHNICALITY. WE'RE BASED--WE'RE HERE BASED UPON A JURISDICTIONAL REQUIREMENT UNDER THE COPYRIGHT LAW. AND WHAT THAT COPYRIGHT LAW SAYS UNDER SECTION 411 IS IF YOU'RE BRINGING A COPYRIGHT INFRINGEMENT ACTION BASED UPON A PARTICULAR WORK, THAT WORK HAS TO BE REGISTERED. THE 1989 WORK IS WHAT MY CLIENTS COPIED; PUT ON THEIR WEB SITE; THAT HAS NOT BEEN REGISTERED.

AND WHAT THE DEFENDANTS ARE SUGGESTING IS THAT THEY HAD A WORK THEY CREATED IN--OR THE PLAINTIFFS, EXCUSE ME, ARE SUGGESTING, THEY HAD A WORK IN 1989; THEY REWRITE IT; THEY REGISTER IT IN 1998 AND SAY THAT IT'S CREATED ANEW.

WHAT THAT DOES IS EXTEND THE COPYRIGHT PROTECTION. WHAT IT DOES IS IT SAYS EVERY TIME THEY MAKE SOME EDITORIAL REVISIONS, THEY CAN RE-REGISTER IT AND EXTEND THE COPYRIGHT, AND THAT'S NOT WHAT THE LAW PROVIDES. THE LAW PROVIDES THE COPYRIGHT STARTS FROM WHEN THE WORK IS CREATED, WHICH WAS 1989; THAT'S THE WORK THAT HAS TO BE REGISTERED. THANK YOU.

THE COURT: THANK YOU, COUNSEL. WELL, TAKE THIS UNDER ADVISEMENT. I SHOULD HAVE THIS TO YOU FAIRLY QUICKLY. LET'S JUST TALK A MOMENT ABOUT WHERE WE ARE ON THOSE OTHER MATTERS THAT ARE OUTSTANDING.

MR. BARNARD: THE TIME FOR RESPONSE IS EXPIRED. THE TIME FOR RESPONSE I BELIEVE WAS LAST WEEK. I HAVE NOT RECEIVED ANY RESPONSE.

THE COURT: OKAY. THEN THAT HAPPENS. WHAT I'M GOING TO ASK YOU TO DO, MR. BARNARD, IS GIVE PLAINTIFF COUNSEL A COPY, AND THEN YOU'LL HAVE THE USUAL TIME.

MR. BROADBENT: UNLESS THERE'S BEEN SOME CHANGE, WE HAVE A COPY OF THE MOTION, JUST NOT NOTICE THAT IT HAD BEEN FILED.

THE COURT: 15 DAYS. AND THEN YOU'D CERTAINLY WANT YOUR TIME FOR REPLY; AM I CORRECT?

THE COURT: THEN I'VE GOT THE MOTION FOR THE SECURITY, AND THAT WAS FILED BY YOU, MR. BARNARD.

MR. BARNARD: AND TODAY BY FAX I RECEIVED A RESPONSE FROM THE PLAINTIFF. WE INTEND TO REPLY TO THAT SHORTLY, AND THEN THAT WILL BE RIPE FOR A DECISION.

THE COURT: AND THEN I HAVE MOTIONS TO STRIKE--VARIOUS MOTIONS TO STRIKE, AND I CAN'T RECALL WHICH ONE OF THOSE MOTIONS THEY WENT TO.

MR. BARNARD: I THINK THERE'S ONLY ONE MOTION TO STRIKE, AND THAT RELATES TO THE RULE 11 MOTION. WE'VE ASKED THAT SOME OF THE ALLEGATIONS THAT WERE THE BASIS FOR THE RULE 11 MOTION ALSO BE STRICKEN.

THE COURT: I'LL TAKE UP. THAT WILL BE ADDRESSED WHEN I CONSIDER THE RULE 11. SO TO YOUR KNOWLEDGE, COUNSEL, DOES THAT TAKE CARE OF ALL OF OUR PENDING MOTIONS?