CESNUR - Full text of case MSIA vs. Lane

This case came on regularly for trial to the Court on July 28, 1998, at 9:30 a.m. Vincent Cox of Leopold, Petrich Smith appeared for plaintiff and Mitchell L. Lathrop and Bridget K. Moorhead of Luce Forward Hamilton & Scripps appeared for defendant. The Court has considered the evidence and arguments offered at trial by the parties and, now being fully advised in the premises, hereby makes he following findings of fact and conclusions of law:

1. Plaintiff Church of the Movement of Spiritual Inner Awareness ("MSIA") is a religious corporation, organized under the laws of the State of California.

2. Defendant Dr. David C. Lane ("Lane" or "defendant") is a professor of philosophy and sociology at Mount San Antonio College, located in Walnut, California.

3. Between March 1994, and November 1996, MSIA and Peter McWilliams ("McWilliams") engaged in disputes and litigation regarding the rights and wrongs of the relationship between MSIA and McWilliams.

4. In August 1994, McWilliams caused to be published through his company,Prelude Press, a book that he had authored entitled Life 102: What To Do When Your Guru Sues You ("Life 102"). The book was critical of MSIA and its founder, John-Roger Hinkins, ("John-Roger").

5. In the Summer or Fall of 1994, McWilliams contacted defendant to obtain research material concerning MSIA and John-Roger that he could use in writing Life 102.

6. Dr. Lane provided McWilliams with research materials, books written by Dr. Lane on various religions, his dissertation thesis, and various other documents and tape recordings Dr. Lane had collected regarding MSIA and John-Roger.

7. McWilliams testified that, at his first meeting with defendant which he stated took place in July 1994, he orally gave defendant permission to use the book for non-commercial purposes. At trial, McWilliams was asked whether defendant had told him that defendant would only cooperate with McWilliams if McWilliams gave defendant permission to place the book on defendant's Internet webpage. McWilliams responded that he gave defendant permission to use the book to "gain David Lane's trust" (R.T. at 112). However, in his deposition, McWilliams testified in response to essentially the same question stating that "there was no direct quid pro quo, so the answer to that absolute direct question is no" (McWilliams depo. tr., April. 20, 1998, at 44).

8. Defendant testified at trial that at the first meeting with McWilliams, he made clear to McWilliams that he would not provide him with any documents to assist him in his work, unless McWilliams gave him full access to "use the information in the book" that McWilliams was writing (R.T. at 72-73). According to testimony at trial, defendant told McWilliams based on his prior experiences with purported defecters from MSIA in the 1980's that he would not assist McWilliams in the writing of McWilliams' book unless McWilliams granted Lane an unrestricted right to use the book (R.T. at 25) However, in his deposition, Lane testified as follows:

Q. Did you specifically tell Mr. McWilliams that you wouldn't cooperate with him unless he gave you permission to use the resulting book in any way you chose?

A. Actually, if I remember correctly, it was Peter McWilliams who volunteered that. It wasn't one of my conditions, but he was very thankful for the research I had done, and because of that he wanted to -- it was like a material consideration. I had done something for him, and he was paying me back. Lane depo. tr., Feb. 18, 1998, at 44.

9. In Exhibit 22, which was posted on the Internet in September 1997, Lane claimed that McWilliams had given him unrestricted access to Life 102 when McWilliams posted the book on the Internet, an event that occurred in September 1995, more than one year after the 1994 initial meeting. It is undisputed that Lane never asked McWilliams to reduce this agreement to writing (R.T. at 69).

10. Thereafter, in September 1994, McWilliams sent numerous copies of the book to defendant accompanied by a handwritten note. The note, Exhibit 202, reads in part as follows:

David-

Tada!
Here it is in print form -- Life 102! Let me know if you need more. Thank you for all your help. I couldn't have done it without you. Yes, of course, put it on your web page, give copies to your class. Whatever you want - just don't sell it. Again, thanks I owe you several!
Enjoy-
Peter McWilliams
9/94

11. Beginning in or about the Fall of 1995, McWilliams placed the books that his company, Prelude Press, had published (all of which were authored or co-authored by McWilliams) on his website at http://www.mcwilliams.com. All of the foregoing books contained copyright notices, and the introductory page of the website stated, in relevant part:

Hello.

Welcome to my home page.

Here you will find the complete text of all my books currently in print, plus works 'in progress.' You are welcome to read, search, download, copy, print, or give away any of it. Just don't try to sell large chunks of it, or I'll call the FBI. (See the first 30 seconds of any rental videotape). You are certainly free to incorporate portions of these books in what you create, and sell that. That's the nature of the creative process. There is no need to ask me to 'grant permission.' Who the hell am I to 'grant permission?'

12. Sometime after September 1995, Lane first placed the entire text of Life 102 on his Internet website in downloadable form.

13. On November 1, 1996, a settlement of the disputes between plaintiff and Mc Williams was reached. As part of the written sentiment agreement, McWilliams assigned his copyright interest in Life 102 to plaintiff and agreed to remove the text from his internet website within six hours of the execution of the agreement (See Ex. 1). McWilliams further represented and warranted that no licenses for consideration had been granted to anyone with respect to the work, and he formally revoked all prior licenses he had granted with respect to the work. Id.

14. Despite his representation and warranty that he has not assigned or granted any license in Life 102 for consideration, McWilliams testified at trial that he advised representatives of MSIA at the time of the settlement that he had previously granted a license for consideration to use Life 102 to Lane (R.T at 127). However, McWilliams' attorney in the litigation between McWilliams and MSIA, Ralph 0. Williams, III, testified that when negotiating the settlement between MSIA and McWilliams," [Williams) was concerned about what the words 'assignment for consideration,' mean [sic]. So as [he recalled] Vincent Cox asked (him] and/or Peter [McWilliams), was there anything in writing, and the answer to that was in the negative. No, there was nothing in writing. Was there any consideration or money paid, and (Williams) answered no, because (he] didn't know of any, and Peter [McWilliams] answered no." (R. T. at 96)

15. On November 6, 1996, plaintiff registered Life 102 with the Register of Copyrights, which issued a Registration Certificate No. TX4-406-489.

16. On February 9, 1997, plaintiff recorded in the Copyright Office the Assignment of Copyright in Life 102 from McWilliams to plaintiff.

17. Several months after McWilliams took the text of the book off of his Internet website in accordance with the settlement ageement with MSIA, and discontinued the link to Lane's website, Lane placed the entire text of the book on his own website, apparently sometime in or about March 1997. Counsel for MSIA wrote to Lane on March 13, April 2, and May 5, 1997, enclosed a copy of the written, notarized Assignment of Copyright from McWilliams to MSIA and demanded that Lane cease and desist from copying, displaying, and distribution of Life 102. Lane refused to do so, based upon a claim of legal right, but not including a claim that Lane had been granted a license for consideration.

18. In September 1997, defendant posted a notice in an Internet newsgroup announcing the commencement of the instant lawsuit against him and stating that the content of the book was "currently on Lane's website with Peter McWilliams' express permission, granted to Lane when Peter first posted the book online [in September 1995], and gave Lane unrestricted permission to post or copy it in any way he deemed fit." Exhibit 22.

19. Plaintiff's post-trial Exhibit 62 is hereby received in evidence, as is defendant's post-trial declaration.

20. The court finds that no bargained for consideration was given by Lane to McWilliams for any license to use, copy, download or disseminate any copy of Life 102, and that any testimony of McWilliams and defendant to the contrary is not credible, and that defendant, in fact, gave no consideration for any purported license with respect to Life 102.

21. To the extent any of the foregoing findings of fact may be deemed to be conclusions of law, they are hereby adopted as such.

CONCLUSIONS OF LAW

1. The claimed license agreement between McWilliams and defendant with respect to Life 102 was made without consideration, if it was made at all.

2. Exhibit 202, the cover note sent to defendant by McWilliams in September 1994, does not embody or constitute a valid or enforceable license agreement for consideration; rather, it is at most a unilateral and gratuitous statement that accompanied copies of McWilliams' book, Life 102. See Simmons v. Cal Institute of Technology. 34 Cal.2d 264 (1949); Passant v. McWilliams, 53 Cal.App.4th 1240 (1997).

3. Section 301 of the Copyright Act of 1976, 17 U.S.C. § 301, operates to preempt state law, to the extent that state law provides protections similar to those afforded by the copyright laws and effectively abolishes state law causes of action such as quasi-contract, implied-in-law contract and plagiarism with respect to copyrighted works. Klekas v. EMI Films, Inc., 150 Cal.App.3d 1102, 1111 (1984).

4. To the extent any of the foregoing conclusions of law may be deemed to be findings of fact they are hereby adopted as such.

Counsel for plaintiff is hereby directed to prepare and lodge a form of judgment, consistent with the foregoing findings of fact and conclusions of law, granting a permanent injunction restraining defendant from making further use of Life 102 during the life of the copyright.

Date: August 19, 1998
CHRISTINA A. SNYDER
UNITED STATES DISTRICT JUDGE

2. Judgment

CHURCH OF THE MOVEMENT OF SPIRITUAL INNER AWARENESS,

California religious corporation, Plaintiff,

vs.

DAVID C. LANE, an individual,

Defendant,

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DR. DAVID C. LANE, an individual,

Counterclaimant,

vs.

CHURCH OF THE MOVEMENT OF SPIRITUAL INNER AWARENESS,

California religious corporation,

Counterdefendant.

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CASE NO. CV 97-6685 CAS (VAPx)

JUDGMENT

This action came on for trial before the Court, the Honorable Christina A.Snyder, District Judge, presiding, and the issues having been duly triedand a decision having been duly rendered through Findings of Fact and Conclusions of Law entered on August 24, 1998,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that defendant David Lane hasinfringed plaintiff's copyright registration number TX 4-406-489 and, in accordance with Rule 65(d) of the Federal Rules of Civil Procedure, David Lane, and all agents, servants, employees and attorneys of David Lane, and all persons in active concert or participation with David Lane who receive actual notice of this order by personal service or otherwise, are permanently enjoined from the manufacture, reproduction, adaptation, sale, offering for sale, distribution, loading into a computer's random access memory, posting on computer networks, including, but not limited to, the Internet and the USENET, preparation of derivative works, rental, lease, lending, or display of any copies, or excerpts from any copies, of the work entitled "Life 102: What to Do When Your Guru Sues You," which was registered for copyright and assigned copyright registration number TX 4-406-489. This injunction shall continue in force until the expiration of copyright protection in copyright TX 4-406-489.

Plaintiff shall recover of defendant David Lane its costs of suit in the within action, including reasonable attorneys' fees pursuant to 17 U.S.C. §505. The court sets the hearing on reasonable attorneys' fees and costs for October 5, 1998 at 10:00 a.m..

DATED: September 1, 1998

Honorable Christina A. Snyder,
United States District Court Judge