United States Court of Appeals
For the First Circuit
No. 19-1927
MARKHAM CONCEPTS, INC.; LORRAINE MARKHAM, individually and in
her capacity as trustee of the Bill and Lorraine Markham
Exemption Trust and the Lorraine Markham Family Trust;
SUSAN GARRETSON,
Plaintiffs, Appellants,
v.
HASBRO, INC.; BEATRICE PARDO, in her capacity as successor co-trustee of the Reuben B. Klamer Living Trust; PAUL GLASS, in his
capacity as successor co-trustee of the Reuben B. Klamer Living
Trust; DAWN LINKLETTER GRIFFIN; SHARON LINKLETTER; MICHAEL
LINKLETTER; LAURA LINKLETTER RICH; DENNIS LINKLETTER; THOMAS
FEIMAN, in his capacity as co-trustee of the Irvin S. and Ida
Mae Atkins Family Trust; ROBERT MILLER, in his capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family Trust; MAX
CANDIOTTY, in his capacity as co-trustee of the Irvin S. and Ida
Mae Atkins Family Trust,
Defendants, Appellees,
IDA MAE ATKINS,
Defendant.
No. 21-1957
MARKHAM CONCEPTS, INC.; LORRAINE MARKHAM, individually and in
her capacity as trustee of the Bill and Lorraine Markham
Exemption Trust and the Lorraine Markham Family Trust;
SUSAN GARRETSON,
Plaintiffs, Appellees
v.
HASBRO, INC.,
Defendant, Appellant.
BEATRICE PARDO, in her capacity as successor co-trustee of the
Reuben B. Klamer Living Trust; PAUL GLASS, in his capacity as
successor co-trustee of the Reuben B. Klamer Living Trust; DAWN
LINKLETTER GRIFFIN; SHARON LINKLETTER; MICHAEL LINKLETTER; LAURA
LINKLETTER RICH; DENNIS LINKLETTER; THOMAS FEIMAN, in his
capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family
Trust; ROBERT MILLER, in his capacity as co-trustee of the Irvin
S. and Ida Mae Atkins Family Trust; MAX CANDIOTTY, in his
capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family
Trust; IDA MAE ATKINS,
Defendants.
No. 21-1958
MARKHAM CONCEPTS, INC.; LORRAINE MARKHAM, individually and in
her capacity as trustee of the Bill and Lorraine Markham
Exemption Trust and the Lorraine Markham Family Trust;
SUSAN GARRETSON,
Plaintiffs, Appellees
v.
BEATRICE PARDO, in her capacity as successor co-trustee of the
Reuben B. Klamer Living Trust; PAUL GLASS, in his capacity as
successor co-trustee of the Reuben B. Klamer Living Trust,
Defendants, Appellants
HASBRO, INC., DAWN LINKLETTER GRIFFIN; SHARON LINKLETTER;
MICHAEL LINKLETTER; LAURA LINKLETTER RICH; DENNIS LINKLETTER;
THOMAS FEIMAN, in his capacity as co-trustee of the Irvin S. and
Ida Mae Atkins Family Trust; ROBERT MILLER, in his capacity as
co-trustee of the Irvin S. and Ida Mae Atkins Family Trust; MAX
CANDIOTTY, in his capacity as co-trustee of the Irvin S. and Ida
Mae Atkins Family Trust; IDA MAE ATKINS,
Defendants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. William E. Smith, U.S. District Judge]
Before
Kayatta, Lipez, and Thompson, Circuit Judges.
Patricia L. Glaser, with whom Erica J. Van Loon, Joshua J.
Pollack, Nixon Peabody LLP, Thomas P. Burke Jr., and Glaser Weil
Fink Howard Avchen & Shapiro LLP were on brief, for defendantsappellants Beatrice Pardo and Paul Glass.
Joshua C. Krumholz, with whom Courtney L. Batliner, Mark T.
Goracke, Holland & Knight LLP, Patricia K. Rocha, and Adler Pollock
& Sheehan PC were on brief, for defendant-appellant Hasbro, Inc.
David A. Cole, with whom John T. Moehringer and Cadwalader,
Wickersham & Taft LLP were on brief, for plaintiffs-appellees.
June 22, 2023
LIPEZ, Circuit Judge. In this copyright action
involving ownership rights to the classic board game, The Game of
Life, conveyed more than six decades ago, the prevailing defendants
seek attorney's fees from the unsuccessful plaintiffs. The
district court denied fees for the trial-level proceedings, and
the defendants claim on appeal that the court abused its discretion
in doing so. The defendants also moved in this court for appellate
attorney's fees. The Copyright Act of 1976 permits the award of
reasonable fees and costs to a prevailing party, see 17 U.S.C.
§ 505, and the Supreme Court has endorsed a set of nonexclusive
factors to be considered by courts in evaluating whether to award
fees, see Fogerty v. Fantasy, Inc.,
510 U.S. 517, 534 & n.19
(1994). After carefully considering those factors and other
aspects of the record, we affirm the district court's decision to
deny fees and, primarily for the same reasons, decline to award
fees for the appeal.
I.
As detailed in our opinion on the merits, this case arose
from a long-running dispute between Reuben Klamer, a toy developer
who originated the idea for The Game of Life, and Bill Markham, a
game designer whom Klamer asked to design and build the game
prototype. See Markham Concepts, Inc. v. Hasbro, Inc., 1 F.4th
74, 77-78 (1st Cir. 2021), cert. denied,
142 S. Ct. 1414 (2022).
The game was a huge success, and for decades following its debut
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in 1960, Markham and Klamer clashed over who should receive primary
credit for its creation. In general, Markham "felt that he was
not given proper public recognition for his role" and that the
royalty he received was "unfairly low." Id. at 78-79.
Markham died in 1993. This case was brought by his
successors-in-interest against Klamer, who has since died,1 and
others (including Hasbro, Inc., the company that now holds rights
to The Game of Life) in an attempt, inter alia, to renegotiate the
original assignment of rights in the game.2 As the district court
observed, the plaintiffs' copyright claim "boiled down to two
dispositive questions: did Bill Markham create the [p]rototype
(such that he could fairly be considered its author); and was the
[p]rototype a work made for hire?" Markham Concepts, Inc. v.
Hasbro, Inc., No. 15-419 WES, 2021 WL 5161772, at *1 (D.R.I. Nov.
1 Klamer died in September 2021, after we issued our merits
decision but before the district court ruled on the fee requests.
In Klamer's place, this action has been pursued by the co-trustees
of the Reuben B. Klamer Living Trust. For convenience, we refer
to Klamer when discussing arguments made in his briefs and motions.
The Markham parties are Markham's widow, daughter, and Markham
Concepts, Inc.
2 The litigation originally was brought by the Markham parties
primarily as a contract action against Hasbro seeking
reinstatement of their royalty payments, which had stopped because
of an issue with an escrow arrangement. They subsequently amended
their complaint to add additional causes of action against Klamer
and other defendants, including the copyright claim adjudicated by
the district court and addressed in our merits decision. See
Markham Concepts, 1 F.4th at 77. The escrow issue was resolved,
and the parties stipulated to dismissal of the non-copyright
claims.
- 5 -
5, 2021).
Answering those questions required application of the
Copyright Acts of 1909 and 1976. Under the Copyright Act of 1976
("1976 Copyright Act"), authors may have "the power to terminate
the grant of a copyright after a certain period of time, see 17
U.S.C. §§ 203, 304(c), 304(d), thereby permitting them to extricate
themselves from 'ill-advised' grants made before the 'true value'
of their work was apparent." Markham Concepts,
1 F.4th at 79
(quoting Mills Music, Inc. v. Snyder,
469 U.S. 153, 172-73 (1985)
(footnote omitted)). However, such "termination rights" do not
extend to "work[s] made for hire."
17 U.S.C. § 304(c). Whether
The Game of Life was "made for hire" is governed by the Copyright
Act of 1909 ("1909 Act"), 17 U.S.C. § 26 (repealed 1978). See
Markham Concepts,
1 F.4th at 81.
Following a bench trial that included testimony from
Klamer and two employees of Markham's business who had worked on
The Game of Life, the district court concluded that the prototype
was indeed a work for hire created for Klamer. See Markham
Concepts, Inc. v. Hasbro, Inc., 355 F. Supp. 3d 119, 130 (D.R.I.
2019). That decision meant that Markham was not the prototype's
author for copyright purposes, foreclosing his successors-in-
interest from terminating an assignment agreement that had been in
effect, with minor adjustments, since 1959. Id.; see also Markham
- 6 -
Concepts, 1 F.4th at 79.3
In reaching its decision, the district court relied --
over the plaintiffs' objection -- on the "instance and expense"
test that had long been used to evaluate whether a commissioned
work subject to the 1909 Act was made for hire. See Markham
Concepts, 355 F. Supp. 3d at 127-30.4 The district court did not
3 Markham's assignment agreement ("the 1959 Assignment
Agreement") was with Link Research Corporation, co-founded by
Klamer and Art Linkletter (a well-known radio and television
personality). The agreement, inter alia, required Markham to
assign to Link any copyright, patent, or trademark rights "to which
he may be entitled as the inventor, designer and developer of the
[g]ame." Markham Concepts, 1 F.4th at 85. Link separately entered
into a license agreement with the Milton Bradley Company, giving
Milton Bradley exclusive rights to make and sell The Game of Life
in exchange for a six percent royalty on sales.
Id. at 78. Hasbro
subsequently acquired Milton Bradley, along with the rights to the
game. Under Markham's initial agreement with Link, he received
thirty percent of Link's six percent royalty (i.e., 1.8 percent of
total royalties).
Id. Although Markham's royalty on non-U.S.
sales has varied over time, see infra, the domestic percentage has
remained the same.
4 The 1909 Act codified the longstanding principle that "a
work created by an employee belongs to the employer, who is then
viewed as the author and copyright holder." Markham Concepts, 1
F.4th at 79-80. Courts initially limited this "work for hire"
concept to "'the traditional employer-employee relationship,' that
is, to 'a work created by an employee acting within the scope of
employment.'"
Id. at 80 (quoting Forward v. Thorogood,
985 F.2d
604, 606 (1st Cir. 1993)). However, the work-for-hire concept was
later expanded via the instance and expense test to include works
created by independent contractors when the hiring party provided
both the impetus (the "instance") and funding (the "expense") for
the work. See id.; see also, e.g., Marvel Characters, Inc. v.
Kirby,
726 F.3d 119, 139 (2d Cir. 2013) (explaining that "instance"
"refers to the extent to which the hiring party provided the
impetus for, participated in, or had the power to supervise the
creation of the work"). The 1976 Copyright Act contains an
explicit, two-part definition for works for hire that applies to
- 7 -
address the defendants' alternative theory that the prototype
qualified as a work for hire because it was created for Markham by
his employees within a traditional employer-employee relationship
-- which also would foreclose termination rights for the Markham
parties. On appeal, we endorsed both the district court's approach
and its outcome. We decided that courts within the First Circuit
remain bound by our instance and expense precedent, see Markham
Concepts, 1 F.4th at 81-83, and held that "the evidence amply
support[ed] the district court's conclusion that the game was
created at the instance and expense of Klamer" and was thus a work
for hire,
id. at 86.5
Months after we issued our decision on the merits, the
district court denied the defendants' pending motions for
attorney's fees and costs for the trial-level proceedings. See
works created on or after January 1, 1978. See 17 U.S.C. § 101;
see also Markham Concepts,
1 F.4th at 80.
5 As described in our opinion on the merits, some cases suggest
that the parties in a work-for-hire relationship can agree that
authorship rights will belong to the work's actual creator rather
than to the person at whose instance and expense the work is made.
See Markham Concepts, 1 F.4th at 85 & n.7. However, work-for-hire
status is presumed when the elements of the instance and expense
test are met, and "courts generally demand clear and specific
evidence" to rebut that presumption.
Id. Both the district court
and our court held that the assignment agreement between Markham
and Link did not overcome the work-for-hire presumption. See
id.
at 85-86.
- 8 -
Markham Concepts, 2021 WL 5161772, at *5.6 Hasbro and Klamer filed
separate appeals of that ruling,7 and each also filed a motion for
an award of attorney's fees on appeal.8 We subsequently
consolidated the district court fee appeals with the motions for
appellate fees.
II.
A. Legal Principles
Section 505 of the 1976 Copyright Act allows a court, in
its discretion, to award reasonable attorney's fees to a prevailing
party. See 17 U.S.C. § 505.9 The statute "requir[es] an
'evenhanded' approach under which '[p]revailing plaintiffs and
prevailing defendants are to be treated alike.'" Airframe Sys.,
6 Hasbro requested fees in the amount of $1,951,323.63 and
$10,256.45 in costs, plus $9,112.36 for travel. Klamer requested
fees in the amount of $1,827,393.50 plus costs of $38,953.81.
7Multiple defendants associated with Art Linkletter also were
defendants in the copyright action and requested $583,709.50 in
attorney's fees in the district court. They did not appeal the
denial of those fees and have not requested appellate fees.
8 Hasbro seeks $271,674.20 in attorney's fees on appeal, and
Klamer seeks $238,086.34 in appellate attorney's fees.
9 Although the 1909 Act applies to the substantive issues in
this case, the defendants sought fees under § 505 of the 1976
Copyright Act rather than under the comparable provision of the
1909 Act, § 116. In its motion for appellate fees, Hasbro notes
that it is unclear which fees provision applies to this case.
However, the plaintiffs have not disputed the applicability of
§ 505, and the two provisions are in any event similar. See
Fogerty, 510 U.S. at 523-24. We therefore presume that § 505
applies.
- 9 -
Inc. v. L-3 Commc'ns Corp., 658 F.3d 100, 108 (1st Cir. 2011)
(quoting Fogerty,
510 U.S. at 521, 534) (second alteration in
original). Although "[t]here is no precise rule or formula for"
determining whether to award attorney's fees under § 505, Fogerty,
510 U.S. at 534 (quoting Hensley v. Eckerhart,
461 U.S. 424, 436
(1983)), the Supreme Court has endorsed "several nonexclusive
factors to guide" a court's decision: "'frivolousness, motivation,
objective unreasonableness (both in the factual and in the legal
components of the case) and the need in particular circumstances
to advance considerations of compensation and deterrence,'"
id. at
534 n.19 (quoting Lieb v. Topstone Indus., Inc.,
788 F.2d 151, 156
(3d Cir. 1986)). Courts considering fee requests "should give
substantial weight to the objective reasonableness of the losing
party's position," but "must also give due consideration to all
other circumstances relevant to granting fees." Kirtsaeng v. John
Wiley & Sons, Inc.,
579 U.S. 197, 199, 200 (2016).
The relevant "other circumstances" include the purpose
of copyright law and its objective of "enriching the general public
through access to creative works." Id. at 204 (quoting Fogerty,
510 U.S. at 527). The 1976 Copyright Act endeavors to achieve
that goal "by striking a balance between two subsidiary aims:
encouraging and rewarding authors' creations while also enabling
- 10 -
others to build on that work." Id.10 Though guided by the Supreme
Court's criteria and the objectives of copyright law, courts
ultimately have "broad discretion . . . in deciding whether to
fee-shift." Id. at 208; see also id. at 209 ("[C]ourts must view
all the circumstances of a case on their own terms, in light of
the Copyright Act's essential goals.").
With these principles in mind, we first consider the
district court's fees determination and then address Klamer's and
Hasbro's motions for appellate fees.
B. Appeals from the Denial of Fees
1. The District Court's Decision
In its ruling on the defendants' fee requests, which it
10 As Klamer points out, some circuits take the view that fee
awards under § 505 should be "the rule rather than the exception
and should be awarded routinely." Bell v. Eagle Mountain Saginaw
Indep. Sch. Dist., 27 F.4th 313, 326 (5th Cir. 2022) (quoting
Virgin Records Am., Inc. v. Thompson,
512 F.3d 724, 726 (5th Cir.
2008)). The Seventh Circuit treats that "rule" as a presumption
that the prevailing party is entitled to a fee award and, "[i]n
the case of prevailing defendants, . . . this presumption [is]
'very strong.'" Mostly Memories, Inc. v. For Your Ease Only, Inc.,
526 F.3d 1093, 1099 (7th Cir. 2008) (quoting Assessment Techs. of
WI, LLC v. WIREdata, Inc.,
361 F.3d 434, 437 (7th Cir. 2004)).
However, other circuits have disagreed that the inquiry should
tilt in favor of a fee award. See, e.g., Designworks Homes, Inc.
v. Thomson Sailors Homes, L.L.C.,
9 F.4th 961, 965 (8th Cir. 2021),
cert. denied sub nom James v. Thomson Sailors Homes, L.L.C.,
143
S. Ct. 147 (2022); Marshall & Swift/Boeckh, LLC v. Dewberry & Davis
LLC,
586 F. App'x 448, 449 (9th Cir. 2014); Lava Records, LLC v.
Amurao,
354 F. App'x 461, 462-63 (2d Cir. 2009). We see no reason
to depart from our approach of applying the factors without a
predisposition toward granting fees. See, e.g., Airframe Sys.,
658 F.3d at 108-110.
- 11 -
characterized as "a close call," the district court focused
primarily on the reasonableness of the Markham parties' copyright
claim. Markham Concepts, 2021 WL 5161772, at *1. After briefly
describing the competing contentions, the court concluded that
"both sides raised plausible arguments and [p]laintiffs' claim,
though unsuccessful, was not so weak as to be objectively
unreasonable to pursue."
Id. at *4.
With respect to the governing law, the court noted that
the plaintiffs had expert support in arguing that the Supreme
Court, in Community for Creative Non-Violence v. Reid, 490 U.S.
730 (1989), had abrogated the instance and expense test for
identifying works for hire under the 1909 Act. See Markham
Concepts,
2021 WL 5161772, at *2 (citing Melville B. Nimmer & David
Nimmer, Nimmer on Copyright § 9.03[D] (2019)). Primarily for that
reason, the court "hesitate[d] to say that [p]laintiffs 'argue[d]
for an unreasonable extension of copyright protection.'" Id.
(quoting Matthews v. Freedman,
157 F.3d 25, 29 (1st Cir. 1998)
(third alteration and emphasis in district court opinion)).11 The
court similarly concluded that the plaintiffs' factual arguments
were not unreasonable. See id. at *3-4. The court observed that
11 The district court also considered it "somewhat telling"
that the status of the instance and expense test after Reid had
been raised by other litigants before the Supreme Court, "lend[ing]
some support to the conclusion that [p]laintiffs' position was
reasonable." Markham Concepts, 2021 WL 5161772, at *2 n.7 (citing
Markham Concepts,
1 F.4th at 83 n.4).
- 12 -
"[b]oth sides came to trial with evidence to support their claims
on all theories," id. at *3, and it stated that "[d]efendants'
success turned on how the factfinder interpreted the evidence and
assessed credibility," id. at *4.
After finding that the plaintiffs' case was not
"objectively unreasonable," the court "ma[de] quick work" of the
other Fogerty factors. Id. It observed that, "[b]ecause the case
was not objectively unreasonable, it follows that it was not
frivolous." Id. The court also detected "[n]othing in the record"
to show "that [p]laintiffs proceeded with an improper motivation
that justifies an award," and it did not see "any meaningful
deterrence effect" from awarding fees to the defendants. Id.
Based on its assessment of the factors, "the [c]ourt conclude[d]
that the litigation furthered the purposes of the Copyright Act,"
leading it to deny the defendants' fee requests. Id. at *5.
2. Discussion
On appeal, the defendants insist that the district court
misjudged the strength of both the legal and factual arguments
advanced by the plaintiffs. Hasbro and Klamer assert that the
court did not adequately address the serious flaws in the Markham
parties' contentions, disregarding what they characterize as the
"fundamental problems with [p]laintiffs' legal positions" and
failing to properly weigh the evidence in the record showing that
the prototype was a work made for hire. The court further erred,
- 13 -
the defendants claim, by summarily discounting the significance of
other factors -- particularly the plaintiffs' improper motivations
and the need for compensation and deterrence.
As we have noted, a district court's ruling on fees may
be reversed only for an abuse of discretion. See Small Just. LLC
v. Xcentric Ventures LLC, 873 F.3d 313, 326 (1st Cir. 2017).
Indeed, we have observed that such rulings are entitled to
"extreme[]" deference, T-Peg, Inc. v. Vt. Timber Works, Inc.,
669
F.3d 59, 61 (1st Cir. 2012) (quoting Airframe Sys.,
658 F.3d at
109), because "the trial court is in the best position to gauge
the bona fides of a request for fees," Spooner v. EEN, Inc.,
644
F.3d 62, 70 (1st Cir. 2011).
With that wide berth for the district court's judgment
call on fees, we see no basis for overriding the court's
discretionary decision against fee-shifting in this case. The law
applicable to the Markham parties' copyright claim was not so
black-and-white that the district court acted unjustifiably when
it deemed their argument against the instance and expense test as
within the realm of reasonableness. As we observed in our merits
opinion, the view that the Supreme Court's decision in Reid had
effectively abrogated the instance and expense test "has at least
one influential adherent" (i.e., the Nimmer copyright law
treatise). Markham Concepts, 1 F.4th at 83 & n.3. In addition,
our court's post-Reid decision invoking that test, Forward v.
- 14 -
Thorogood, 985 F.2d 604 (1st Cir. 1993), did not expressly consider
the test's continuing viability after Reid. See Markham Concepts,
1 F.4th at 81-82. With those two factors on their side, the
plaintiffs' attempt to piggyback on the analysis in Reid and
diminish the precedential force of Forward was not as unreasonable
as the defendants depict it to be. The plaintiffs did not ask the
district court to ignore our precedent. Rather, they argued that
their interpretation of Reid should be considered because it had
not been raised by the parties in Forward.
A similar assessment applies to the facts. There was
enough ambiguity in the evidence that was before the district court
on how The Game of Life prototype was created, as well as on the
understanding between Markham and Klamer about who should be
designated the prototype's author, that we cannot reject the
court's view that the plaintiffs' factual position was not wholly
unreasonable. Although the district court acknowledged that
factual reasonableness was "a closer call" than legal
reasonableness, it noted that the record contained
"contemporaneous documents" -- including the 1959 Assignment
Agreement and letters between Markham and Klamer -- indicating
that the two men viewed Markham as the prototype's "creator" such
that he was the copyright holder. See Markham Concepts, 2021 WL
- 15 -
5161772, at *3.12
Moreover, while testimony from Markham's employees about
their contributions to the prototype unquestionably weakened the
plaintiffs' claims, it was up to the district court -- as it
observed -- to "interpret[] the evidence and assess[]
credibility." Id. at *4; see also Markham Concepts, 1 F.4th at 84
n.6 (noting that "it was the district court's job to sort through
the evidence and decide what and who was credible"). The testimony
of the employees, Grace Falco Chambers and Leonard Israel, was
elicited in November 2017 about events that had transpired more
than a half-century earlier. It was thus not inevitable that the
district court would fully credit the testimony adverse to the
Markham parties' position and construe the contemporaneous written
evidence and prior statements against their view that Markham
12 The 1959 Assignment Agreement between Markham and Link
included a provision stating that, "[a]t the request of LINK,
MARKHAM has invented, designed and developed a game tentatively
known as 'THE GAME OF LIFE.'" Further, the agreement required
Markham, upon Link's request, to pursue any intellectual property
rights "to which he may be entitled as the inventor, designer and
developer of the [g]ame" and to assign any such rights to Link,
"provided that said assignments will revert to MARKHAM upon the
termination of this agreement." Markham Concepts, 1 F.4th at 85.
Klamer also praised Markham's work in a September 1965 letter,
stating that "You did a good job. I think that the product you
. . . came up with was topnotch." In that same letter, Klamer
reported to Markham that he had asked Milton Bradley to credit
Markham on the game packaging, but the toy company had declined to
do so. In another early example of the evidence of Markham's role,
a 1960 letter to a Link vice president from Milton Bradley's vice
president referred to "the LIFE game of Bill Markham."
- 16 -
should be credited with creating the prototype. Although the
evidence strongly indicated that any such authorship by Markham
was at Klamer's instance and expense, we noted in our merits
decision that it was "a closer question" whether the assignment
agreement between Klamer and Markham rebutted the work-for-hire
presumption created by the instance and expense test. Markham
Concepts, 1 F.4th at 85.
Contrary to Klamer's argument, the district court's
observation that the case "turned on how the factfinder interpreted
the evidence and assessed credibility," Markham Concepts, 2021 WL
5161772, at *4, does not reflect legal error or an assumption that
attorney's fees should "not be awarded unless a party succeeds on
summary judgment." Rather, in context, the district court's
statement simply reflects its view that a thorough weighing of the
strengths of both sides' evidence in this case led to its
conclusion that the plaintiffs' claim was not "objectively
unreasonable to pursue."
Id.
Hasbro and Klamer argue that, even if the instance and
expense test did not apply, the plaintiffs' case was still
factually hopeless because the evidence unequivocally supported
their alternative theory for classifying the prototype as a work
for hire -- i.e., that it was created within a traditional
employer-employee relationship by Chambers and Israel for Markham.
Both defendants emphasize that the Markham parties' counsel
- 17 -
acknowledged in a colloquy with the district court that, if the
court found that Israel and Chambers were Markham's employees,
there would be no termination rights. The attorney made this
comment while attempting to persuade the court, post-judgment, to
reconsider its use of the instance and expense test and adjust its
findings to declare that Markham was the author of the prototype.
However, as we have noted, the district court did not
address the alternative work-for-hire theory in its decision on
the merits. Although the court briefly referred to the theory in
its fees decision -- recognizing the force of the defendants'
position in light of Chambers' and Israel's testimony -- it
declined to entirely discredit the plaintiffs' view of the facts.
See Markham Concepts, 2021 WL 5161772, at *3-4 (stating, inter
alia, that "[b]oth sides came to trial with evidence to support
their claims on all theories" (emphasis added)). We, in turn,
decline to override the district court's overall assessment of the
plaintiffs' factual case, particularly in the absence of findings
and a ruling on the alternative theory.
To be sure, the evidence shows substantial individual
contributions by Israel and Chambers to the game box and board.
The record is less clear, however, on how the various components
of The Game of Life came together into the protectible creation
defined by the 1976 Copyright Act as an "original work[] of
authorship fixed in a[] tangible medium of expression." 17 U.S.C.
- 18 -
§ 102(a). For example, the record contains Markham's deposition
testimony in 1989 that, before Klamer approached him about The
Game of Life, he had invented a three-dimensional, foldable game-
board format, which was the style ultimately used for the
prototype.13 In the same deposition, Markham described affixing
the "track" to the game board for the first time when he brought
the elements of the prototype to a meeting with Milton Bradley
representatives at a Los Angeles restaurant in August 1959.14
13 Markham's 1989 testimony was elicited in a California
state-court action he brought against Milton Bradley and the Link
partners in a dispute over foreign royalties. The case settled,
with Markham receiving an increased royalty percentage on overseas
sales.
14 The record also includes Chambers' testimony that some
parts of the "final" prototype game board -- including the spinner,
mountains, and "circuitous track" -- were constructed in plastic
by outside contractors based on the models created in-house in
paper, cardboard, or wood. She did not say whether she attached
the plastic versions of those items to the board. Israel's
testimony about how the prototype was constructed also left room
for interpretation. At one point, he testified that he had primary
responsibility for the box cover, Sue Markham had primary
responsibility for the rules, and Chambers "[a]ssembled the things
in the proper place and with the proper kind of wording and colors
. . . on the final board." Following up on re-cross, the
plaintiffs' attorney noted that Israel had described "the process
where you took the thumbnail sketches and then put it on the final
board," and "[e]ach time you've said we put it on the board." The
attorney then asked: "Who are you referring to when you say we?"
Israel answered:
I guess I always thought of the team who was
working on The Game of Life, and I just
referred to the group as we because I did some
of it, Grace did some of it, Bill did some of
it, Reuben did his part. So everybody was
working on this at different times and you
- 19 -
Given its holding that the prototype was a work for hire
created for Klamer, the court did not need to delve into the
details relevant to the alternative theory that it was a work for
hire created for Markham by Chambers and Israel.15 Indeed, the
district court's choice not to reinforce its work-for-hire
conclusion based on this alternative theory may indicate that it
viewed the record evidence as more complex than the defendants
acknowledge.16 Although Hasbro blames the plaintiffs for any such
never just isolated it and had no input from
everyone else.
15 Hasbro intimates that Markham's claim to authorship could
have succeeded only if he "alone, physically created every
copyrightable aspect of the Prototype," but it provides no citation
for that principle of law. (Emphasis omitted.) We decline to
delve sua sponte into the intricacies of copyright law with respect
to a work that may have been created in part by employees of an
employer who also himself created elements of the work. No party
in this case has suggested formal joint authorship by Markham,
Chambers, and Israel, and we note the issue only because Hasbro's
assertion appears to disregard the concept of a joint work that is
explicitly recognized by the 1976 Copyright Act. See generally
Reid, 490 U.S. at 753 (observing that the organization that hired
an independent contractor to sculpt a statue may be a joint author
with the artist if the artist and the organization, which provided
some elements of the finished piece, "prepared the work 'with the
intention that their contributions be merged into inseparable or
interdependent parts of a unitary whole.'" (quoting
17 U.S.C.
§ 101)).
16The district court suggested as much during the hearing on
the Plaintiffs' Motion to Amend Findings of Fact and Conclusions
of Law. The court wondered whether it should "write up something"
to explain its view of the parties' post-judgment arguments. The
court recognized, however, that it would then need to deal with a
host of other arguments -- "all those things that I didn't deal
with because I didn't have to."
- 20 -
lack of clarity, the record is not so straightforward that we can
say the district court erred in finding that the Markham parties
"did not purposefully obscure relevant evidence" or "make false
assertions." Markham Concepts, 2021 WL 5161772, at *3. In any
event, we are unwilling to reject the district court's evaluation
of the plaintiffs' factual arguments based on a theory that was
only lurking in the background.
Nor do we see any critical flaw in the court's brief
treatment of the motivation and deterrence factors. Giving authors
the opportunity to negotiate a better deal is the rationale for
the termination provision in the 1976 Copyright Act, and the
district court appeared to construe the litigation to have such a
purpose. See id. at *1 (noting that plaintiffs would use a ruling
in their favor "to renegotiate a royalty agreement they found
lacking").
The Markham parties, meanwhile, say their "primary
motivation" was not in fact financial, but rather "to restore
credit to Bill Markham as being the author of [T]he Game of Life."
The plaintiffs insist that "[a]ny ability to renegotiate the
applicable contracts would have focused on [the motivation to
restore credit], not on increasing royalty rates." In addition,
the Markham parties say, they sought "to separate themselves from
Klamer, who had long attempted to control all royalties associated
with the [g]ame." These nonmonetary purposes for the litigation
- 21 -
also are proper. See Spooner, 644 F.3d at 69 ("Copyright cases
are a prime example of a situation in which obtaining non-monetary
relief or establishing a principle may be worth considerably more
than the damages recovered.").17
As for deterrence, Klamer accuses the district court of
ignoring that Markham and his successors-in-interest "have fought
with Klamer over royalties and authorship of the [g]ame for nearly
sixty years," and he asserts that "[t]here was no basis for the
court to conclude that [p]laintiffs will stop without the deterrent
of an attorneys' fee award." (Emphasis omitted.) To the contrary,
we think it apparent why the district court found no need to deter
these plaintiffs from further copyright litigation. Having failed
to prove that Bill Markham should be credited as the author of the
prototype and was therefore entitled to termination rights, the
plaintiffs now have no choice but to live with the agreement that
Markham reached with Link in 1959 (as slightly modified in the
17 We are by no means suggesting that the Markham parties
lacked any financial motivation. After Chambers and Israel
testified, Hasbro offered to forego a claim for attorney's fees
and costs in exchange for the plaintiffs' agreement to dismiss all
claims against the company. The Markham parties rejected that
proposal with a counteroffer that included Hasbro's payment of "a
substantial lump sum that properly recognizes Mr. Markham's longoverlooked contributions to the [g]ame to be paid out as the
parties may negotiate." The other two elements of the counteroffer
were non-financial: "assurances that Hasbro will acknowledge Bill
Markham as the sole designer and creator of the [g]ame henceforth"
and "a separate escrow agreement with the Markham [p]arties for
the payment of all future royalties related to the [g]ame."
- 22 -
1980s).18 No court would look favorably on new litigation
challenging that arrangement, and the outcome of this case on the
merits thus provides adequate deterrence against plaintiffs
pursuing any such action.
In addition, despite the high costs of this litigation,
see supra notes 6-7, the district court at no point suggested that
it believed plaintiffs had "litigat[ed] in a manner greatly
disproportional to the matter at stake" such that the case
warranted a fee award to deter other plaintiffs from adopting
similar "trial strategies." T-Peg, Inc., 669 F.3d at 62; see also
Kirtsaeng,
579 U.S. at 209 (noting that "a court may order fee-
shifting . . . to deter . . . overaggressive assertions of
copyright claims, . . . even if the losing position was reasonable
in a particular case"). We cannot say the court erred by failing
to conclude that similarly ambitious copyright claims should be
deterred by fee-shifting in this case. See T-Peg,
669 F.3d at 62
n.4 (observing that "the district court was in the best position
to assess the reasonableness of [the plaintiff's] litigation
tactics"); Markham Concepts,
2021 WL 5161772, at *4 (stating that
the court was unconvinced that "an award [would] serve any
meaningful deterrence effect").
The finality of their copyright claim became indisputable
18
with the denial of their request for Supreme Court review of our
decision on the merits. See Markham Concepts, Inc. v. Hasbro,
Inc., 142 S. Ct. 1414 (2022).
- 23 -
Also, like the district court, we find unpersuasive
Klamer's argument that he is entitled to greater consideration for
fees, as an equitable matter of compensation, because he "proceeded
through the litigation as a single individual, and one in frail
health." Markham Concepts, 2021 WL 5161772, at *4 n.11. Without
elaboration, the district court noted that "[o]n balance,"
Klamer's circumstances "do[] not weigh heavily enough in favor of
an award."
Id. The substantial overlap between Klamer's arguments
and those of the other defendants -- particularly Hasbro --
suggests that Klamer could have relied primarily on the toy company
and its resources to defend against the Markham parties' claims.
Hence, the district court reasonably could have questioned the
need for so much redundancy, at great cost. Whether that reason
or some other concern influenced the court, we fail to see error
in its conclusion that, as a matter of equity, the compensation
factor did not weigh in favor of shifting Klamer's legal fees to
the Markham parties.
Nor do we find reason to second-guess the district
court's denial of fees to Hasbro on the ground -- urged by Hasbro
at oral argument -- that the court did not expressly consider the
need for compensating the company. Given the court's assessment
of the other factors, we think it apparent that the court found no
reason to compensate Hasbro for its defense of the case. See
generally Airframe Sys., 658 F.3d at 108 (noting that "litigants
- 24 -
customarily bear responsibility for their own legal fees").
In sum, we find no abuse of discretion in the district
court's discretionary judgment against shifting the defendants'
trial-level legal fees to the plaintiffs.19
C. The Motions for Appellate Fees
Our analysis in concluding that the district court did
not abuse its discretion in rejecting Hasbro's and Klamer's trial-
level fee requests also provides some support for the Markham
parties' contention that we should likewise deny the requests for
appellate legal fees. Most of the factors discussed above play
out similarly with respect to the appeal, most notably the
reasonableness of plaintiffs' argument that Reid discredited the
instance and expense test for identifying a work for hire under
the 1909 Copyright Act. Indeed, that legal argument was more
reasonably made to our court than to the district court, which
would have been on shakier ground to disregard Forward's use of
the instance and expense test post-Reid.
We cannot characterize as objectively unreasonable the
Markham parties' attempt to persuade our panel that we should not
feel bound by Forward because, in Forward, Reid's impact on the
instance and expense test was not raised by the parties or
19We note that the district court awarded the defendants
their costs pursuant to Federal Rule of Civil Procedure 54(d)(1),
amounting to $10,256.45 for Hasbro and $38,953.81 for Klamer.
- 25 -
considered by the panel. Given the lack of attention to the issue
in Forward, we think it was not beyond reason for the Markham
parties to have argued that the case was vulnerable precedent. In
addition, our analysis did not treat their Reid argument
dismissively. To the contrary, we expressed our disagreement in
qualified terms, noting that "we are skeptical that the Supreme
Court . . . casually and implicitly did away with a well-
established test under a different Act." Markham Concepts, 1 F.4th
at 83 (emphasis added).20
On the other hand, the Markham parties face a higher
hurdle with respect to the factual reasonableness of their appeal
challenging the district court's finding that The Game of Life
prototype was a work for hire for Klamer. As noted in our merits
opinion, their two arguments against finding the prototype to be
a work for hire under the instance and expense test "rais[ed] fact-
intensive mixed questions, which we review with some deference to
20Notably, in justifying the substantial amount of attorney's
fees it sought for the proceedings in district court, Hasbro
asserted that the Markham parties' "claim implicated areas of
copyright law with limited precedent, and raised esoteric
questions regarding the 1909 Act and its relationship to
termination rights and the work-for-hire doctrine." Defendant
Hasbro, Inc.'s Motion for Attorney's Fees and Costs at 26, Markham
Concepts, Inc. v. Hasbro, Inc., No. 1:15-cv-00419-WES-PAS (D.R.I.
Nov. 5, 2019). Consistent with that depiction of the claim,
neither the district court nor our court -- as we have
described -- approached the questions it triggered as obvious or
inconsequential.
- 26 -
the district court." Id.21 The standard of review thus posed a
barrier to a different outcome on appeal. Nonetheless, we are
unpersuaded that the plaintiffs' appellate contentions were beyond
the bounds of reasonableness. As noted above, we recognized as a
"closer question" whether the record sufficiently rebutted the
work-for-hire presumption that arises from the instance and
expense test. Id. at 85. That presumption question required us
to construe the 1959 Assignment Agreement, a task that was properly
performed by us de novo because it did not require consideration
of witness demeanor or credibility. Importantly, in interpreting
the written document, we did not reject the Markham parties'
argument out-of-hand. Rather, we closely considered the contract
language before agreeing with the district court that the language
"is best read" adversely to the Markham parties' position and,
hence, that "[t]he district court . . . supportably found that the
assignment agreement did not overcome the presumption that the
game was a work for hire made for Klamer."
Id. at 85, 86. Our
careful analysis belies any intimation that the argument was
frivolous or objectively unreasonable.
We also reject the defendants' assertions that we should
deem the appeal objectively unreasonable based on the strength of
21 The arguments to which we referred were the prototype's
failure to satisfy the expense prong of the test and the assignment
agreement's supposed rebuttal of the presumption created by the
test. See Markham Concepts, 1 F.4th at 83-85.
- 27 -
their alternative work-for-hire theory. Hasbro and Klamer insist
that, even if the Markham parties did not unreasonably ask us to
reverse the district court's finding that the prototype was a work
for hire for Klamer, their appeal was unreasonably pursued because
the facts unequivocally show that it was a work for hire by
Markham's employees for him. For the reasons discussed above, we
do not view the evidence on the roles played by Markham, Chambers,
and Israel to be so clearly decisive that we can conclude that the
appeal was objectively unreasonable on that basis, particularly in
the absence of pertinent factfinding by the district court. If we
had concluded that the prototype was not a work for hire for
Klamer, the proper course would have been to remand the case to
the district court for factfinding on the remaining theories and
issues.
Moreover, the Markham parties' attorney told the
district court that even a finding that the game was a work for
hire for Markham, rather than Klamer, would be beneficial to the
plaintiffs because -- though no termination rights would exist --
Markham's legacy would be preserved as "the author, the true
creator of the [g]ame." The plaintiffs continue to press that
perspective in their opposition to the appellate fees motions,
insisting that "a declaration that Bill Markham was the author of
[T]he Game of Life," even in a work-for-hire context, "would have
been a significant victory." The potential impact of the
- 28 -
alternative work-for-hire theory on plaintiffs' case thus remains
debatable and, for that reason as well, the theory does not provide
a basis for deeming the plaintiffs' appeal factually
unreasonable.22
Hence, the Fogerty unreasonableness factor that is due
"substantial weight," Kirtsaeng, 579 U.S. at 210, does not favor
imposing responsibility for the defendants' attorney's fees on the
plaintiffs. As the district court observed, "unpersuasive
arguments are not necessarily unreasonable ones." Markham
Concepts,
2021 WL 5161772, at *4. Nor are there circumstances
that lean sufficiently in the other direction to persuade us that
fee-shifting is appropriate. As a general matter, this was a
multi-layered case that ultimately served Hasbro's and Klamer's
interests by permanently settling the authorship question and
ending decades of dispute over Markham's role and possible
copyright rights. Their robust advocacy no doubt reflects the
value of that stability. With respect to the plaintiffs'
motivation, we reiterate that renegotiating the royalty
arrangement and establishing Markham as the prototype's author
22The plaintiffs also argued to the district court that "the
theory of Markham being the employer" was introduced too late and
should not have "been allowed in the case." In our merits
decision, we noted the absence of any apparent prejudice from the
district court's failure to strike that alternative theory because
it had not been adopted by either the district court or us. See
Markham Concepts, 1 F.4th at 86.
- 29 -
were permissible, plausible objectives. The record contains
descriptions by Klamer of Markham's contributions that support the
plaintiffs' stated objective to highlight and cement Markham's
role in producing the prototype, which was the copyrightable
"work[]." 17 U.S.C. § 102(a). Among these were Klamer's comment
that Markham had "c[o]me up with" a "topnotch" product at Klamer's
request and Klamer's description of Markham in a 1997 letter to
Hasbro as his "co-inventor . . . who reduced my ideas to practice
in the concrete form of a 3-[d]imensional prototype."
In our view, Klamer's and Hasbro's arguments on
motivation -- depicting the copyright claim as improperly driven
solely by greed or animosity toward Klamer -- are way off the mark.
There is nothing sinister about a financial motive. As we have
explained, the very purpose of the statutory termination right is
to enable an author to renegotiate the terms -- financial and
otherwise -- of an early assignment of rights. Klamer and Hasbro,
however, appear to question the legitimacy of that objective for
these plaintiffs. Klamer points to Markham's late-in-life
marriage to his widow, and Hasbro notes that "Markham's widow and
her daughter attempted to use [§ 304(c)] to create leverage to
renegotiate an already lucrative deal -- one that paid them
handsomely for having played no role in the creation of the
[g]ame." In pressing the argument that the case as litigated was
an unjustified "play for more money," Hasbro and Klamer point out
- 30 -
that the original trigger for the lawsuit -- the lapse in the
royalty payments due to Markhams' successors-in-interest -- was
quickly resolved by the district court. That resolution, however,
does not negate the plausibility of the plaintiffs' stated desires
to establish Bill Markham's legacy and obtain a method for receipt
of royalty payments independent of Klamer.
Despite the Markham parties' lack of success in the
litigation, we fail to see how the objectives of the 1976 Copyright
Act would be advanced by compensating Hasbro at the plaintiffs'
expense. To the contrary, a "co-inventor's" action to clarify and
settle authorship and intellectual property rights -- so long as
the claim is not objectively unreasonable on the facts or the law
-- is in keeping with the Act's purpose to "encourag[e] and
reward[] authors' creations." Kirtsaeng, 579 U.S. at 204. It may
be true, as Hasbro emphasizes, that Markham and his heirs "have
made millions of dollars" from the deal that Markham and Klamer
negotiated in 1959, but Link's agreement with Milton Bradley for
a six percent royalty left the game company with the bulk of the
proceeds from The Game of Life. Moreover, somewhat at odds with
Hasbro's insistence (echoed by Klamer) that Markham improved upon
his "generous deal" multiple times, the record in fact indicates
that Markham and Link received a reduced percentage of the game's
- 31 -
royalties on international sales starting in 1964.23
We likewise do not view the compensation factor to favor
Klamer, having the same perspective toward attorney's fees on
appeal that we noted with respect to his claim for reimbursement
in the trial court. Given the substantial overlap in the arguments
presented to us by Klamer and Hasbro, it would appear that Klamer
had an opportunity to rely on Hasbro and its greater resources to
finance the appeal and avoid duplicative expenses. Hence, we do
not see the compensation factor weighing in favor of imposing
Klamer's appellate litigation costs on the Markham parties.24
Finally, consistent with our discussion of the trial-
23 At Milton Bradley's request, Markham and Link agreed in
1963 to reduce the royalties on overseas sales because the higher
royalty requirement was presenting a barrier to such sales. Link's
percentage was decreased from six percent to three percent.
Markham's share of that reduced royalty relative to Link's was
higher -- fifty percent rather than thirty percent -- but his
percentage of the total royalties on non-domestic sales dropped
from 1.8 percent to 1.5 percent. Subsequently, in the settlement
of the California state-law litigation, Markham was given 36.66
percent of the then-current 4.5 percent royalty on international
sales that Milton Bradley was paying to Link (roughly 1.65 percent
of total royalties). We recognize, of course, that the reduced
royalty percentage may have been offset by increased overseas
sales.
24We note that Klamer was a principal in Link Research, the
entity that contracted with Milton Bradley to license The Game of
Life and that received the majority of the royalties that Milton
Bradley paid under that contract -- seemingly placing Klamer in an
advantageous position relative to Markham vis-a-vis the game's
financial rewards. The record indicates that Klamer was entitled
to fifty percent of Link's value when the company was dissolved in
1968.
- 32 -
level fees, we do not believe a fee award for the appellate-level
proceedings would serve a deterrence objective, either with
respect to the plaintiffs in this case or others. See, e.g., Shame
on You Prods., Inc. v. Banks, No. CV 14-03512-MMM, 2016 WL 5929245,
at *10 (C.D. Cal. Aug. 15, 2016) (noting that courts consider both
"specific deterrence," focusing on the parties in the case, and
"general deterrence," focusing on the potential effect on future
litigants). The plaintiffs' losses at the trial, appellate, and
Supreme Court levels should be adequate deterrence to further
litigation concerning authorship of The Game of Life and the
associated copyright rights. Nor do we think an award of fees to
Hasbro and Klamer would advance the purpose of the Copyright Act
by deterring others from filing ill-advised actions or litigating
reasonable ones excessively. As our discussion indicates, we do
not view this case in that light.
Hence, we follow the lead of the district court and leave
to each party the burden of their own legal fees. Accordingly, we
affirm the decision of the district court denying Hasbro's and
Klamer's trial-level fee requests pursuant to 17 U.S.C. § 505 and
deny their motions for appellate fees.
So ordered. Each party to bear its own costs.
- 33 -
