WARREN PUBLISHING COMPANY and James Warren, Plaintiffs, v. J. David SPURLOCK d/b/a Vanguard Productions, Defendant, 645 F. Supp. 2d 402

MEMORANDUM RE: MOTIONS FOR

SUMMARY JUDGMENT BAYLSON, District Judge. TABLE OF CONTENTS I. Background and Procedural History..........................................405 A. History of Warren Publishing and Magazine Publications....................405 B. Magazine Cover Art and Basil Gogos.....................................406 C. Basil Gogos Art Book...................................................406 D. Description and Ownership of the Illustrations Reproduced in the Gogos Book...............................................................406 E. Plaintiffs’ Legal Claims.................................................409 F.

Procedural History.....................................................409 II. Jurisdiction and Legal Standard..............................................410 A. Jurisdiction...........................................................410 B. Legal Standard........................................................410 III. Copyright Infringement Claims..............................................411 A. Ownership............................................................411 1. Ownership of the Gogos Artwork.....................................411 2.

Ownership of the Magazine Copyrights................................414 3. Ownership of Eerie and Creepy Copyrights............................414 B. Fair Use Defense......................................................414 1. Fair Use on

Summary Judgment.....................................415 2. Factor 1 — Purpose and Character....................................416 a. Transformative Nature..........................................417 b. Analogous Cases ...............................................419 c. Bad Faith .....................................................421 3. Factor 2 — Nature of the Plaintiffs Work..............................422 4. Factor 3 — Amount and Substantiality Used............................423 5. Factor 4 — Effect on Potential Market Value ...........................425 6.

Consideration of All Fair Use Factors.................................428 IV. Unfair Competition.........................................................428 A. Principles of Analyzing Unfair Competition Claim..........................429 B. Principles Under the Lanham Act........................................431 C. Third Party Ownership of the Mark......................................432 D. Abandonment of the Mark ..............................................434 1. Principles on Doctrine of Abandonment...............................434 2.

Cases Relied on by Spurlock.........................................434 3. Whether Lanham Act Prima Facie Abandonment Presumption Applies..........................................................435 4. Cases Relied on by Plaintiffs.........................................438 5. Evidence Offered by Plaintiffs .......................................440 6. Unfair Competition Claim on the Basis of Abandoned Mark..............443 V. Plaintiffs’ Motion for Sanctions........ .445 VI. Motions Concerning the Experts...... .446 Monsters have a long history and high standing in the realm of cultural niches.

From Goliath in the Bible, to Charybdis and Scylla in Homer, to Count Dracula, the genre of monsters has many admirers. Considering modern media, monsters and movies are a likely pairing. Celluloid dexterity can illustrate — better than any selection of words — heightened emotions, sudden movements, special effects, and whatever “scariness” a fan of monsters desires. The Irish playwright and poet Oscar Wilde wrote: Pathology is rapidly becoming the basis of sensational literature, and in art, as in polities, there is a great future for monsters.

Many years ago, Plaintiff James Warren published several magazines that catered to the movie monster audience, which was primarily composed of young males. On the cover of each of his magazines, he featured movie monster artwork from many artists, including Basil Gogos. More recently, Defendant J. David Spurlock produced a book that is a career retrospective and biography of Basil Gogos. Twenty-four copies of Gogos artwork, which were previously used by Warren for the magazine covers, are used in the book as illustrations and form the basis of Plaintiffs’ primary claim of copyright infringement.

Although the evidence is not clear that Plaintiffs have ownership rights to all of the artwork that is the subject matter of this suit, the Defendant is willing to assume Plaintiffs’ ownership rights for purposes of the pending motions for

summary judgment. But even assuming ownership, the affirmative defense of fair use requires the Court to grant

summary judgment in favor of Spurlock on the copyright claim. And, because this Court concludes that the evidence, viewed in the light most favorable to Plaintiffs, shows that Plaintiffs have abandoned the Famous Monsters of Filmland mark, the Court will also grant

summary judgment on Plaintiffs’ common law unfair competition claim. I. Background and Procedural History A. History of Warren Publishing and Magazine Publications Plaintiffs in this case are James Warren (“Warren”) and the Warren Publishing Company (“Warren II”), of which James Warren is the president and sole shareholder. A different company with the same name (“Warren I”) was dissolved in 1974. James Warren was also the sole shareholder of Warren I, which printed and distributed several magazines and comic books in the horror and monster film genre.

Warren I first published a magazine entitled Famous Monsters of Filmland (“Famous Monsters”) in 1958. Each issue was at least 68 pages long, catered to fans of the movie monster genre, and regularly featured articles, photographs, reviews, fan letters, and artwork that all focused on this increasingly popular topic. Two other publications that are at issue here, entitled Creepy and Eerie, were also published by Warren I, and were of a similar nature. Warren asserts that as soon as the magazines went to print, Warren I applied for and received a registered copyright for each issue.

Warren provides copyright registration numbers for each issue in contention in this suit, asserting that each registration number establishes his current ownership. B. Magazine Cover Art and Basil Go-gos Warren commissioned many freelance artists to create images of movie monsters to display on the magazine covers. Basil Gogos (“Gogos”) is one artist who designed cover art for Warren I. His work appeared on the covers of 51 of the 191 issues of Famous Monsters (more than any other artist), as well as the covers of at least two of Warren I’s other serial publications, Creepy and Eerie.

Gogos was a freelance artist at the time Warren commissioned his works, and there is some dispute between the parties as to who retained ownership of the underlying artwork. Warren argues that Gogos, like other freelance artists hired to design covers, sold all rights to his artwork to Warren I. Spur-lock, on the other hand, contends that Gogos retained ownership over his art and only sold to Warren I a license for a onetime use of the art. The issue will be more thoroughly discussed below. In any event, Warren I filed for bankruptcy and dissolved in 1974. C. Basil Gogos Art Book Defendant, J.

David Spurlock (“Spur-lock”), is the sole proprietor of the publishing company Vanguard Productions. Spurlock claims that in 2004, he approached Warren about the idea of collaborating on a career retrospective of Basil Gogos. Gogos spent a significant part of his career designing covers for Warren I, and Spurlock believed that a career retrospective about Gogos and his art would be inadequate without acknowledgment of the period when Gogos designed covers for Warren I. While there is some dispute over the substance of these negotiations, Warren and Spurlock never came to an agreement on the project.

Spurlock, however, continued to pursue the idea, and in May 2005, he finalized a deal with Gogos to compile and publish the book. In March 2006, Spurlock began selling the book, entitled Famous Monster Movie Art of Basil Gogos (“Gogos Book”). Spurlock contends that the book is a work of scholarship that “carefully and respectfully illustratefs] the vast output and evolution of the artist.” Spurlock included reproductions of Go-gos’s art in the book that can be grouped into two types: (

a) fourteen images used in the Gogos Book are reproductions of original art by Gogos that were used by Warren as background illustrations for the covers of Plaintiffs’ publications, but these images were not reproductions of the magazine covers that used the art; (

b) ten images used are exact reproductions of covers from issues of Plaintiffs’ magazines that utilized Gogos art, including the text that was displayed on top of the artwork; and (

c) images with no relation to Plaintiffs’ magazines. Categories (

a) and (

b) will be more thoroughly discussed in the following section. In total, the book contains over 160 reprints of Basil Gogos’s artwork, twenty four of which were from Famous Monsters, Creepy, or Eerie. The book is in its third printing and has sold 11,000 copies. Spurlock has personally profited from the book’s publication, which at one point was priced at $250. D.Description and Ownership of the Illustrations Reproduced in the Gogos Book Plaintiffs’ Famous Monsters magazine was published over a number of years, from 1958 to 1983, for a total of 191 issues.

Spurlock’s book, entitled “Famous Monster Movie Art of Basil Gogos,” was first offered for sale in March 2006. Plaintiffs claim twenty-four separate instances of copyright infringement. Of the ten images that are exact reproductions of the entire magazine covers (listed on the chart below), which include the text of the cover, it appears that only seven of the illustrations are reproductions of the actual covers of Plaintiffs’ Famous Monsters magazine.

There is one image that reproduces the cover of a copyrighted Creepy magazine published by Plaintiffs, and two images that are reproductions of two copyrighted Eerie magazine covers. The remaining fourteen claims of infringement by Plaintiffs concern Gogos artwork that contain no printing or other detail, on their face, that would identify them as covers of Plaintiffs’ magazines; these illustrations in the book consist of only the artwork that Gogos provided for the magazine cover, absent the text later inserted on the cover of the magazine.

Although this artwork was depicted on the cover of Plaintiffs’ magazine, the fact that Spurlock’s book only uses the original artwork, rather than the copyrighted magazine covers, prevents an automatic conclusion that Spurlock infringed Plaintiffs’ copyrights. The issue of whether Plaintiffs also own the rights to the underlying artwork is, in the final analysis, moot because Spurlock concedes Plaintiffs’ ownership for purposes of the pending motions and because

summary judgment will be granted on the fair use defense. Nonetheless, these facts are relevant to the Court’s analysis and will be discussed. The deposition testimony shows that Spurlock did admit to copying the ten works used as covers — seven works directly from the Famous Monsters magazine covers, two works from the Eerie magazine covers, and one work from a Creepy magazine cover — by using modern computer technology to digitally scan them. However, the facts of record as to the method by which the other fourteen illustrations were secured are not clear. Plaintiffs, though having moved for partial

summary judgment on the issue of infringement, have not met their burden of showing no genuine issues of fact as to this second set of illustrations. There is some testimony that Spurlock obtained the art from an individual who “pilfered” it from Plaintiffs’ trash dumpster, which may indicate that Warren intended to abandon the artwork, and other testimony that Spur-lock copied the art directly from the current owner of the original painting.

Even assuming the artwork was derived from a copy of Plaintiffs’ magazines, the fact that Spurlock placed the illustration in the Go-gos Book in the form of the original artwork, as opposed to an exact copy of the covers, prevents this Court from finding infringement as a matter of law. A more extensive legal discussion concerning the ownership of Gogos’s artwork will be presented below. As with using words to describe any work of illustrative art, the task of describing the Gogos artwork at issue in this case is difficult. These colorful illustrations call for the use of colorful adjectives.

The artwork of Basil Gogos, particularly to the extent that it portrays monsters and the genre of monsters, could be characterized as lurid, expressive, scary, haunting, disfigured — and a dictionary of synonyms could be consulted to round out this list. In addition, the colors are very expressive, consisting of dramatic use of greens, yellows, reds — all colors that do not appear in the face of a normal human being, but, according to monster legend, are commonly found in the faces of monsters.

The chart below will allow a cross reference to the seven reproduced covers from the Famous Monsters magazine, the one cover from the Creepy magazine, and the two covers from the Eerie magazine. Claim of Pis.’ Am. Compl. Def.’s Ex. No. Magazine — Issue-Date — Bates No. Page Where Illustration Appears in Gogos Book

Summary of Change 1 8B Famous Monsters # 23 Gogos Book, page 21 more vibrant June 1963, color and _Bates No. W0045_reduced size 6 13B Famous Monsters # 60 December 1969, _Bates No. W00846 Gogos Book, page 72 more vibrant color and reduced size 7 14B Famous Monsters # 62 February 1970, _Bates No. W00414 Gogos Book, page 74 almost full size more vibrant color 4 11B Famous Monsters # 58 October 1969, Gogos Book, page 76 more vibrant color and Bates No. W00710 reduced size 17 24B Famous Monsters # 115 April 1975, Bates No.

W01649 Gogos Book, page 82 almost full size more vibrant color 15B Famous Monsters # 63 Gogos Book, page 90 more vibrant March 1970, color and _Bates No. W00982_ _ reduced size 19 26B Famous Monsters # 135 July 1977, Bates No. W01801 Gogos Book, page 91, first edition only almost full size more vibrant color _ _ 21 38B Creepy # 39 May 1971, Bates No. W00301 Gogos Book, page 88 approximate size and more vibrant color 39B Eerie # 26 March 1970, Bates No. W02062 Deluxe slip case hard cover approximate size and original color 24 40B Eerie # 30 November 1970, Bates No.

W02130 Deluxe slip case hard cover approximate % size and original color E. Plaintiffs’Legal Claims Plaintiffs bring two causes of action in their Second Amended Complaint. The first count consists of twenty-four claims of copyright infringement-one claim for each image that Spurlock used from Warren’s magazines. In addition, Plaintiffs bring a Pennsylvania common law claim of unfair competition.

Plaintiffs contend that the title of the book, Famous Monster Movie Art of Basil Gogos, along with the copied images of the artist’s work, is a misappropriation of the goodwill and valuable recognition developed by Plaintiffs’ Famous Monsters magazine. Plaintiffs allege that this title is similar enough to Famous Monsters of Filmland to improperly suggest to consumers that the Gogos Book is in someway related to, or endorsed by, Plaintiffs’ popular magazine.

Plaintiffs seek a declaration of copyright infringement and unfair competition, a permanent injunction preventing future infringement of Plaintiffs’ copyrights and future unfair competition, an order requiring the recall of Spurlock’s allegedly infringing material, an order requiring the destruction of the allegedly infringing material with a subsequent report, statutory damages, Plaintiffs’ costs including attorneys’ fees, pre — and post-judgment interest, and punitive damages. F.

Procedural History Warren Company II and James Warren filed the initial complaint against Vanguard Productions, Inc. on July 21, 2008 alleging thirty-six claims of copyright infringement pursuant to the Copyright Act of 1909, 17 U.S.C. §§ 1 et seq. (Doc. 1). Plaintiffs later filed an Amended Complaint, which is the operative complaint for purposes of the pending motions, against J. David Spurlock d/b/a Vanguard Productions on January 14, 2009, instead alleging twenty-four claims of copyright infringement, as well as the Pennsylvania state law claim of unfair competition. (Doc. 29).

After extensive discovery, including several discovery disputes that the parties eventually resolved with the Court’s assistance, the parties filed several motions, which are currently before the Court. First, Spurlock filed a Motion to Preclude Plaintiffs’ use and/or Reliance Upon the Expert Report and Testimony of Plaintiffs’ “Rebuttal” Expert Witness — Denis Kitchen on May 12, 2009. (Doc. 48). Two days later, on May 14, 2009, Spurlock also filed a Motion for

Summary Judgment on all of Plaintiffs’ claims. (Doc. 51). Plaintiffs then filed their own Motion for Partial

Summary Judgment and for Sanctions (Doc. 49) and a Motion to Preclude Defendant’s Use and/or Reliance Upon the Expert Report and Testimony of Jeffrey Rovin (Doc. 50) on May 14, 2009. After Plaintiffs responded to Spurlock’s Motion to Preclude on June 2, 2009 (Doc. 56), responses to the other motions were all filed on June 11, 2009 (Doc. 58, 59, 60, 61, 62). On June 25, 2009, this Court held oral argument on all of the outstanding motions. (Doc. 72-74). After a productive discussion on the issues with the parties, both sides filed supplemental briefs on July 10, 2009. (Doc. 76, 77). The

summary judgment motions are now ripe for this Court’s review. Because

summary judgment will be entered in favor of Spurlock on both counts, the motions relating to the experts will be denied as moot. II. Jurisdiction and Legal Standard A. Jurisdiction This Court has jurisdiction over the copyright infringement claims under 28 U.S.C. § 1331 and 28 U.S.C. § 1338(a) (“The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to ... copyrights----”). This Court has supplemental jurisdiction over the state law claim pursuant to 28 U.S.C. § 1367. B. Legal Standard

Summary judgment is appropriate “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). An issue is “genuine” if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is “material” if it might affect the outcome of the case under governing law. Id. A party seeking

summary judgment always bears the initial responsibility for informing the district court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where the non-moving party bears the burden of proof on a particular issue at trial, the moving party’s initial burden can be met simply by “pointing out to the district court that there is an absence of evidence to support the non-moving party’s case.” Id. at 325, 106 S.Ct. 2548.

After the moving party has met its initial burden, the adverse party’s response must, “by affidavits or as otherwise provided in this rule [ ] set out specific facts showing a genuine issue for trial.” Fed.R.Civ.P. 56(e).

Summary judgment is appropriate if the non-moving party fails to rebut by making a factual showing “sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322, 106 S.Ct. 2548. Under Rule 56, the Court must view the evidence presented on the motion in the light most favorable to the opposing party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. III.

Copyright Infringement Claims The first count of Plaintiffs’ Amended Complaint consists of the 24 claims of copyright infringement. “To establish a claim of copyright infringement, a plaintiff must establish: (1) ownership of a valid copyright; and (2) unauthorized copying of original elements of the plaintiffs work.” Kay Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 203 (3d Cir.2005) (quoting Dun & Bradstreet Software Servs., Inc. v. Grace Consulting, Inc., 307 F.3d 197, 206 (3d Cir.2002)). A. Ownership 1.

Ownership of the Gogos Artwork The primary defense in this case offered by Spurlock is, assuming that Plaintiffs have established a prima facie case that the Gogos Book infringes Plaintiffs’ magazine copyrights, the illustrations in the Go-gos Book are entitled to the defense of fair use. However, as Spurlock notes in his response to Plaintiffs’ Motion for Partial

Summary Judgment, Plaintiffs raised a novel claim of ownership to the underlying Gogos artwork in their Motion, that was not initially the basis of their copyright claims in the Amended Complaint. Presumably, this assertion is due to the fact that, as discussed above, many of the images used for the Gogos book were not actually copies of the covers of the copyrighted works, but were instead copies of the Gogos artwork that was used for the covers. Though Plaintiffs make this assertion in their Motion for Partial

Summary Judgment, the material facts at issue are vigorously disputed. To what extent Plaintiffs can claim ownership over the artwork produced by Go-gos for the covers implicates the “work-made-for-hire” doctrine. Both the test to determine what works are included and the legal ramifications of work-for-hire status depend on whether the work was prepared prior to the effective date of the 1976 Copyright Act — January 1,1978. See 1 M. Nimmer & D. Nimmer, Nimmer on Copyright § 5.03[B][2][c], at 5-56.1 (2009) (hereinafter Nimmer on Copyright).

The parties agree that each of the works at issue was created prior to that date, and the 1909 Copyright Act therefore controls. See Twentieth Century Fox Film Corp. v. Entm’t Distrib., 429 F.3d 869, 876 (9th Cir.2005). First, the parties initially dispute whether the artwork is entitled to work-for-hire status.

The Second Circuit has held that artwork is a work for hire “[w]hen one person engages another, whether as employee or as an independent contractor, to produce a work of an artistic nature,” which thereby creates a presumption “that the mutual intent of the parties is that the title to the copyright shall be in the person at whose instance and expense the work is done.” Playboy Enters., Inc. v. Dumas, 53 F.3d 549, 554 (2d Cir.1995) (quoting Lin-Brook Builders Hardware v. Gertler, 352 F.2d 298, 300 (9th Cir.1965)).

Whether a work was created at the “instance and expense” of an employer has apparently become the primary test of work-for-hire status. Id. The test is also satisfied, and work-for-hire status established, “when the ‘motivating factor in producing the work was the employer who induced the creation.’ ” Id. (quoting Siegel v. Nat’l Periodical Publ’ns, Inc., 508 F.2d 909, 914 (2d Cir.1974)). An important factor in this inquiry is whether the employer has the right to “direct and supervise the manner in which the writer performs his work.” Id. (quoting Picture Music, Inc. v.

Bourne, Inc., 457 F.2d 1213, 1216 (2d Cir.1972)). The parties dispute whether Gogos created the artwork at the “instance and expense” of Warren/Warren I. In a declaration provided to the Court, James Warren recalls how the commission was initiated and indicates that he exhibited almost total control over the details of Gogos’s work. (Warren Decl. ¶ 5). Spurlock in response argues that these statements are legal conclusions, and offers the sworn factual testimony of Jeffrey Rovin (though he is also offered as an expert), who was involved in much of the activities at issue as an employee of Warren I.

Rovin stated that for some of the covers, Gogos chose his own picture to use for the artwork, and even where Warren chose it, Warren had virtually no input into the details of Gogos’s painting. (Rovin Rep. ¶¶ 41-45). Beyond the significant factual disputes that exist as to whether the Gogos artwork is entitled to work-for-hire status, there are also significant disputes of fact concerning what legal rights each party is entitled to if the artwork was a work-for-hire.

The parties agree that the 1909 Act applies, and it provides that, for purposes of copyright, “the word ‘author’ shall include an employer in the case of works made for hire.” Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 743-44, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989) (quoting 17 U.S.C. § 26 (1976 ed.)). However, the statute does not define the term “employer” and does not explicitly provide an assignment of rights for commissioned works. Id. at 744, 109 S.Ct. 2166.

In addressing the issue without the benefit of any statutory guidance, courts generally presumed that, for purposes of commissioned works, “the commissioned party had impliedly agreed to convey the copyright, along with the work itself, to the hiring party.” Id. Beyond this initial presumption, “[wjhether copyright initially vested in the independent contractor preparing the work on commission or in the commissioning party always turned on the intention of the parties, where that intention could be ascertained.” 1 Nimmer on Copyright, § 5.03[B][2][c], at 5-56.1 (citing, inter alia, Brattleboro Publ’g Co. v.

Winmill Publ’g Corp., 369 F.2d 565 (2d Cir.1966)). However, “[t]he burden of proof is on the independent contractor to demonstrate by a preponderance of the evidence that such a contrary agreement was reached.” Playboy Enters., 53 F.3d at 554-55. With no detailed agreement establishing the intent of the parties, each side again presents their own version of events. Warren provides in his declaration that he and Gogos had an agreement that Warren would gain all rights to the work, and at some point the check that Warren wrote to Gogos for payment contained a mark that indicated such an intent. (Warren Decl. ¶ 5).

On the other hand, Spurlock offers several pieces of evidence in response to suggest that the parties never did intend such a transfer of rights. First, Spurlock offers the declaration of Basil Gogos himself, who states that he and Warren “had an express gentleman’s agreement that any art I created would be used once only on the cover of one of his magazines and all of [his] art would be returned.” (Def. Opp. to Pis.’ Mot. Summ. J. Ex. A). Next, Spurlock offers several pieces of evidence regarding the standard practice for ownership of rights to artwork commissioned by Warren.

See 1 Nimmer on Copyright, § 5.03[D], at 5-56.12 (“[A] custom or usage whereby certain rights are reserved to the employee, if such custom or usage was known to the parties, or might be presumed to have been so known, would become an implied in fact term of the contract of employment.”).

First, Rovin states that, “[i]f there were [sic] a general policy regarding cover art, it was this: artists tended to allow Warren [ ] to print, and reprint, the artwork as a cover without obtaining permission or making additional payment(s); but artists were free to sell the original art or use it in career compendia or genre overviews.” (Rovin Rep. ¶ 27).

Spurlock then offers the testimony of several other cover artists, who testified that they retained the rights to their artwork and only sold Warren a one-time license for the magazine covers, thus suggesting that this was the standard practice of Warren/Warren I at the time. These disagreements preclude coming to a conclusion on the issue of ownership in the artwork, and show that there is a genuine issue of material fact as to whether Plaintiffs have ownership rights to the artwork that Spurlock used in the book, which are the basis of the majority of Plaintiffs’ claims.

This in itself would be sufficient to defeat Plaintiffs’ Motion for Partial

Summary Judgment on these pieces of art. However, as will be discussed below, this issue is mooted by Spur-lock’s reliance on the fair use defense; though, to the extent that it is relevant to the fair use analysis, the unsettled ownership of the artwork may bear on Plaintiffs’ claim that Spurlock engaged in “bad faith” by utilizing the art in the Gogos Book without paying a licensing fee. 2.

Ownership of the Magazine Copyrights In addition, Spurlock claims that when Warren I filed for bankruptcy, all assets of Warren I, including the copyrights and trademarks at issue in this case, were sold to Harris Publications, Inc. (“Harris”). Warren, however, claims that after all the company’s debts were satisfied, this intellectual property was transferred to him, as the sole shareholder of Warren I. In 1984, Harris disputed Warren’s ownership and laid claim to the literary properties of Warren I.

In 2000, a settlement was reached with Harris whereby Warren and Warren II, which was incorporated by Warren in 1998, took undisputed ownership to all of the relevant literary properties. Plaintiffs assert that since that time, Warren and Warren II have been the undisputed owners of the Famous Monsters copyrights involved in this suit. Spurlock nonetheless contends that the copyrights were issued to Warren I and that Plaintiffs therefore do not have standing to bring this suit. 3.

Ownership of Eerie and Creepy Copyrights Additionally, there is a dispute between the parties over who owns the copyrights to the Creepy and Eerie comics. In February 2007, Warren II transferred all rights to Creepy and Eerie over to a third party, New Comic Company LLC. Spur-lock contends that the Purchase Agreement transferred the right to sue for any infringement of these copyrights. Plaintiffs, however, argue that the right to sue for infringement that occurred prior to the date of the contract remained with Plaintiffs.

In any event, despite these disputes over ownership, Spurlock’s counsel conceded at oral argument that, for purposes of the motions for

summary judgment, Plaintiffs have satisfied the elements of ownership and copying. See (Oral Arg. 4:14-5:24) (Def. Counsel: “My

summary judgment would presume that he owns them, Your Honor.... Judge: “And the same thing for copying? You concede that as well?” Def. Counsel: “For purposes — yes, absolutely.” ”). Spurlock’s Motion for

Summary Judgment instead focuses solely on the affirmative defense of fair use. See (Oral Arg. 5:6-9) (Def. Counsel: “My

summary judgment would presume that he owns them, Your Honor. My

summary judgment is ... based upon fair use.”). Nonetheless, these disputes over ownership may have some bearing on whether Spurlock is entitled to the protection of fair use. B. Fair Use Defense The defense of fair use for copyright claims has a long and deep history. “From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and use-M Arts..." Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 575, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) (quoting U.S. Const, art. I, § 8).

While the defense was not initially codified in 1790, when Congress first established the copyright infringement cause of action, “the doctrine was recognized by the American courts nonetheless.” Id. at 576, 114 S.Ct. 1164. The affirmative defense of fair use was finally codified by the 1976 Copyright Act. Id.

The textual basis of the defense now provides that: the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.

In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include— (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors. 17 U.S.C. § 107. Courts do not consider fair use “with bright-line rules, for the statute, like the doctrine it recognizes, calls for case-by-case analysis.” Campbell, 510 U.S. at 577, 114 S.Ct. 1164. The four listed factors are not to be considered in isolation and “do not represent a score card that promises victory to the winner of the majority.” Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc., 342 F.3d 191, 198 (3d Cir.2003) (quoting Pierre N.

Leval, Toivard a Fair Use Standard, 103 Harv. L.Rev. 1105, 1110 (1990)).

Instead, the factors are “to be explored, and the results weighed together, in light of the purposes of copyright.” Id. (quoting Campbell, 510 U.S. at 578, 114 S.Ct. 1164); see also Leval, supra, at 1110-11 (“[The fair use factors] direct courts to examine the issue from every pertinent corner and to ask in each case whether, and how powerfully, a finding of fair use would serve or disserve the objectives of the copyright.”). “This focus on copyright’s purpose makes relevant a comparison of the copy with the original: where the copier uses none of his own creative activity to transform the original work, holding the fair use doctrine inapplicable will not likely interfere with copyright’s goal of encouraging creativity.” Video Pipeline, 342 F.3d at 198. “[T]he alleged infringer bears the burden of proof’ ou the issue since fair use is an affirmative defense.

Id. at 197. 1. Fair Use on

Summary Judgment The threshold issue at this stage of proceedings, in considering Spurlock’s reliance on fair use, is to what extent district courts may consider such a defense on

summary judgment. While the Third Circuit has not yet specifically addressed this issue, the Second and the Ninth Circuits have. Both Circuits have generally recognized that, “[although the issue of fair use is a mixed question of law and fact, the court may resolve issues of fair use at the

summary judgment stage where there are no genuine issues of material fact as to such issues.” Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 608 (2d Cir.2006); Kelly v. Arriba Soft Corp., 336 F.3d 811, 817 (9th Cir.2003) (“We also review the court’s finding of fair use, which is a mixed question of law and fact, {de novo ].”); see also Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985) (“Fair use is a mixed question of law and fact.”). 2.

Factor 1 — Purpose and Character The first factor requires the Court to consider “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” 17 U.S.C. § 107(1).

The first factor is intended to determine whether the new work “merely supersede^] the objects” of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is “transformative.” Although such transformative use is not absolutely necessary for a finding of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works.... [T]he more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.

Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (internal citations omitted). Two other considerations in the context of the first fair use factor bear mentioning. First, much has been made about what impact an infringing work’s “commercial” purpose, as opposed to “nonprofit” purpose, has on this first factor. While some language in an earlier decision of the Supreme Court had suggested that an infringing work’s commercial purpose was dispositive of the first factor, see Sony Corp. of Am. v.

Universal City Studios, Inc., 464 U.S. 417, 451, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984) (“[E]very commercial use of copyrighted material is presumptively ... unfair ....”), more recent decisions have provided some clarification. [T]he commercial or nonprofit educational purpose of a work is only one element of the first factor enquiry .... [T]he mere fact that a use is educational and not for profit does not insulate it from a finding of infringement, any more than the commercial character of a use bars a finding of fairness. Campbell, 510 U.S. at 584, 114 S.Ct. 1164.

Instead, “the ‘fact that a publication was commercial as opposed to nonprofit is a separate factor that tends to weigh against a finding of fair use.’ ” Id. at 585, 114 S.Ct. 1164 (quoting Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218); Video Pipeline, 342 F.3d at 198 (“If a new work is used commercially rather than for a nonprofit purpose, its use ■will less likely qualify as fair.”). “The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.” Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218.

Second, much has also been made of a defendant’s “bad faith” in regards to the first factor. While the Supreme Court in Harper & Row stated that good faith and fair dealing were required for a finding of fair use, 471 U.S. at 562, 105 S.Ct. 2218, the Court’s later decision in Campbell appeared to suggest, though not directly holding, that this was no longer true, 510 U.S. at 585 n. 18, 114 S.Ct. 1164; see also Leval, supra, at 1126 (“No justification exists for adding a morality test.”).

In any event, the important lesson on bad faith to be taken from Campbell is that a defendant’s “request for permission to use the original” and “being denied permission to use a work do[] not weigh against a finding of fair use.” Campbell, 510 U.S. at 585 n. 18, 114 S.Ct. 1164. Where the defendant requested permission, “the offer may simply have been made in a good-faith effort to avoid [ ] litigation.” Id. a.

Transformative Nature One of the leading and most incisive explanations of the concept of transformative use comes from Judge Leval’s seminal law review article: The use must be productive and must employ the quoted matter in a different manner or for a different purpose from the original. A quotation of copyrighted material that merely repackages or republishes the original is unlikely to pass the test; in Justice Story’s words, it would merely “supersede the objects” of the original.

If, on the other hand, the secondary use adds value to the original — if the quoted matter is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings — this is the very type of activity that the fair use doctrine intends to protect for the enrichment of society. Leval, supra, at 1111. He later elaborates: Quoting is not necessarily stealing. Quotation can be vital to the fulfillment of the public-enriching goals of copyright law.

The first fair use factor calls for a careful evaluation whether the particular quotation is of the transformative type that advances knowledge and the progress of the arts or whether it merely repackages, free riding on another’s creations----Factor One is the soul of fair use. Id. at 1116.

Spurlock contends that his use of Plaintiffs’ work in a biography and artist’s retrospective “is a work of scholarship, comment, and research, and is precisely the type of work that the Fair Use Doctrine is intended to protect.” He argues that, while the original purpose of the covers was to sell magazines, his use of the covers is transformative since it is biographical in nature and illustrates the “evolution of an artist.” Spurlock further notes that, of the 24 covers at issue, 14 are displayed without any Famous Monsters text obstructing the artwork, and any claims of infringement, even if legally valid, are misguided because the copying is only of the Gogos artwork without any reference to Plaintiffs’ magazine.

Plaintiffs respond by arguing that the Gogos Book attempts to present the art in a pure form. Although some of the images appear without the Famous Monsters headings and some are reduced in size, many are reproduced in virtually the same size as the original magazine covers (8.5" x 11"), are the main “focal points” of each page, and are reproduced for the appreciation of the artistic accomplishment — the same purpose for which the covers were originally used.

Additionally, Plaintiffs note that many of the reproductions are unaccompanied by any commentary or criticism and that “[t]he degree of copying and the manner in which the reproductions are prominently displayed, combined with the absence of commentary, is [sic] inconsistent with alleged ‘scholarship.’ ” There are some characteristics regarding Spurlock’s use that do not support his claim of fair use. For instance, the fact that Plaintiffs’ work is in a periodical magazine format, as compared to Spurlock’s work composed of a single issue book, is relevant but not determinative. See Blanch v.

Koons, 467 F.3d 244, 252 (2d Cir.2006) (“We have declined to find a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original work.”). And, Plaintiffs are correct in noting that the covers and images are reproduced with little or no modification. But the Gogos Book presents these images for an entirely different purpose. The book takes the reader through the history of Gogos’s work and his career.

It discusses Gogos’s time creating art for the covers of James Warren’s magazines, chronicles his work that portrayed the “Old West,” then moves on to his art in “men’s magazines.” The book also provides commentary from many respected individuals in the movie monster industry who attest to the quality of the work and his lasting legacy. The Gogos Book is a retrospective and an illustrated biography of an artist who was, and remains, important to movie monster enthusiasts.

While the subject matter of his artwork may be unconventional, Basil Gogos created significant and highly detailed art, often used as illustrations for magazines, movie posters, and advertisements. The Gogos Book utilizes the magazine covers as several examples of those many different productions in order to pay homage to his artistic accomplishments. Spurlock’s book is focused on the art of one person, Gogos. The Warren magazines, on the other hand, do no such thing.

Each of the magazine issues is devoted towards discussing developments in the world of movie monsters, interviewing actors in the genre (e.g., Béla Lugosi), and advertising various movie monster-related paraphernalia. With the nature of the magazines in mind, the covers were not used for the purpose of paying homage to Basil Gogos or to chronicle his career. Rather, these covers were utilized to help sell magazines, for the purpose of describing the latest in monster movies through an eye-catching display, and to convey to the reader or potential reader what topics the magazine discussed in that issue.

As a representative example, for issue number 59 of the Famous Monsters magazine (the focus of Plaintiffs’ fifth claim of copyright infringement) Basil Gogos created a piece depicting the portrait of a television character, Barnabas Collins, who was a vampire in the television show “Dark Shadows.” In front of the artwork, the cover exclaims that the issue contains an

article “All About Barnabas Collins!”. (Def.’s Mot. Summ. J. Ex. 12). The

article referred to, entitled “Who’s A-Frid of the Big Bad Vampire,” profiles Jonathan Frid, the actor who portrays Barnabas Collins, and discusses the television show. Importantly, the magazine does not use the artwork in order to portray Gogos’s talents or chronicle his career. Instead, the artwork is used to promote the magazine’s

article discussing Barnabas Collins and the Dark Shadows show. The same can be said of each of the other magazine covers that are at issue in this litigation. As Judge Leval explains, the first factor requires this Court to consider whether the infringing work “employ[s] the quoted matter in a different manner or for a different purpose from the original.” Le-val, supra, at 1111. This question is clearly answered in the affirmative.

After reviewing the Gogos Book and the Warren magazines in detail and in their entirety, this Court finds that Spurlock’s use of the Gogos art is transformative relative to the original purpose. What is particularly pertinent to this Court’s analysis and conclusion is that the Gogos Book is appropriately characterized as a biography or a career retrospective. As the Second Circuit’s caselaw indicates, “biographies in general and critical biographies in particular, fit ‘comfortably within’ these statutory categories ‘of uses illustrative of uses that can be fair.’ ” New Era Publ’ns Int’l, ApS v.

Carol Publ’g Group, 904 F.2d 152, 156 (2d Cir.1990) (quoting Salinger v. Random House, Inc., 811 F.2d 90, 96 (2d Cir.1987), cert. denied, 484 U.S. 890, 108 S.Ct. 213, 98 L.Ed.2d 177). While acknowledging that these categories are not endowed with a presumptive entitlement to the defense, Harper & Row, 471 U.S. at 561, 105 S.Ct. 2218 (“This listing was not intended to be exhaustive or to single out any particular use as presumptively a ‘fair’ use.”) (internal citations omitted), this Court’s analysis is “guided by the examples” of § 107’s

preamble, Campbell, 510 U.S. at 578, 114 S.Ct. 1164, and the examples help illustrate the purpose of fair use and the types of works that meet its requirements. That Spurlock’s book fits “comfortably within” the statutory categories only serves to reinforce this Court’s conclusion that Spurlock’s use was trans-formative. b. Analogous Cases In coming to its conclusion, this Court finds two cases particularly analogous. First, in Bill Graham Archives v.

Darling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006), the Second Circuit determined that the defendant’s coffee table book, which provided a “cultural history of the Grateful Dead,” was sufficiently transformative, relative to the original purpose of the copyrighted images from Grateful Dead event posters and tickets, for several reasons. Id. at 608-12. First, the court found that the defendant’s book was essentially a biographical work documenting the 30-year history of the Grateful Dead.

While there are no categories of presumptively fair use, courts have frequently afforded fair use protection to the use of copyrighted material in biographies, recognizing such works as forms of historic scholarship, criticism, and comment that require incorporation of original source material for optimum treatment of their subjects. Id. at 609 (internal citations omitted).

While the copyrighted works were artistic and “were apparently widely distributed to generate public interest in the Grateful Dead and to convey information to a large number of people about the band’s forthcoming concerts,” id., the defendant “used each of [the] images as historical artifacts to document and represent the actual occurrence of Grateful Dead concert events featured on [the book]’s timeline,” id. The court also stated that the defendant’s claim that the use was transformative was “strengthened by the manner in which [the defendant] displayed the images.” Id. at 611.

The copyrighted works were reduced to sizes that were only large enough “to permit readers to recognize the historical significance of the posters” and were combined “with a prominent timeline, textual material, and original graphical artwork, to create a collage of text and images on each page of the book.” Id.

Next, the court found that the copyrighted images were only “an inconsequential portion of [the defendant’s book],” id., recognizing that “[t]he extent to which unlicensed material is used in the challenged work can be a factor in determining whether a biographer’s use of original materials has been sufficiently transformative to constitute fair use,” id. Because the defendant’s book only contained the plaintiffs images on seven, out of 480, pages, and since the images were less than l/20th the size of the originals at the most, this too supported the defendant.

Finally, the court considered whether the “commercial purpose” inquiry worked against a finding of fair use for the defendant. The court concluded that it did not and stated that the defendant had “not used any of [the plaintiff]’s images in its commercial advertising or in any other way to promote the sale of the book.” Id. at 612. With all these considerations in mind, the court held that the first fair use factor weighed in favor of the defendant.

In comparing Bill Graham to the facts at hand, the Second Circuit’s analysis illustrates the differences between the Gogos Book and Plaintiffs’ magazine covers that establish the transformative nature of the use. First, the difference in purpose, between how Plaintiffs used the magazine covers as compared to Spurlock, is almost identical to the difference described in Bill Graham. Plaintiffs’ magazine covers had been used “to generate public interest” in the magazines and “to convey information” to passers-by of the magazine’s content in that issue.

Spurlock, on the other hand, used the covers “as historical artifacts to document and represent” the work product of an accomplished artist. Second, Spur-lock’s manner of reproduction is also supportive of fair use. Many of the images were reduced in size, had the cover text and the magazine title logo removed, and were the subject of criticism and commentary adjacent to the art. Where the cover text was not removed, the images were reduced to only a fraction of their original size.

As to Plaintiffs’ argument that Spur-lock could have reduced the larger images or changed all of them to black-and-white, such modifications would undermine the very heart of the publication, which is to chronicle the achievements of a renowned artist. Vivid colors are an important element in depicting monsters, particularly their faces. The proportion of images in the Gogos Book that were allegedly improperly used is also small (24 out of 160, or 15%). Finally, there is little evidence to support Plaintiffs’ claims that Spurlock’s use was sufficiently commercial in nature to overcome the transformative purpose.

Though Plaintiffs point out that Spurlock admits to making a profit from the book, “[t]he crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.” Bill Graham, 448 F.3d at 612 (quoting Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218). The only arguments Plaintiffs make in support of this narrow argument is that: (

a) the front flap states that art from Plaintiffs’ magazines will be included; (

b) one copyrighted cover is included on the back with four other magazine covers; and (

c) the title is misleading (the same argument made for the unfair competition claim). The fact that the front flap, which contains information on the contents of the book, accurately informs readers that some of the Gogos images from Plaintiffs’ magazines are included, cannot seriously be characterized as “exploitation.” The placement of a cover on the back of the book with four other images not from Plaintiffs’ magazines is relatively minor in nature, even if supportive of Plaintiffs’ “commercialism” argument.

And, to the extent that Plaintiffs rely on the argument that the title is misleading, Plaintiffs have not offered any caselaw to suggest that this would satisfy the “commercialism” inquiry. In any event, to the extent that any of these relatively minor uses could be characterized as “exploitation” of Plaintiffs’ copyrighted works, the transformative nature of Spurlock’s use is more than sufficient to push the first factor in Spurlock’s favor. The second analogous case is Hofheinz v. A & E Television Networks, 146 F.Supp.2d 442 (S.D.N.Y.2001) (Sweet, J.).

In Hofheinz, the claim for copyright infringement concerned an A & E biography of an actor, Peter Graves. Id. at 443. As with most A & E biographies, the 60-minute television program contained clips from movies and television shows that Peter Graves was involved in, and it also provided commentary from Graves, his family, and his friends. Id. The biography contained a 20-second clip of one of Graves’s movies, “It Conquered the World,” though the footage was actually derived from the theatrical trailer. Id. at 443-44. On a motion for

summary judgment, the court held that A & E’s biography did amount to “fair use.” Id. at 449. As to the first fair use factor, the court stated that, while the A & E piece “may not be a ‘scholarly’ biography ... the use made of this particular footage from ‘It Conquered the World,’ to show the kind of motion picture roles Graves took when he first began his acting career and what his perception of them was, served to enrich the biography through the actor’s perspective on his own work.” Id. at 446.

The court determined that the use was “trans-formative” since it “enabled] the viewer to understand the actor’s modest beginnings in the film business.” Id. at 446-47. The facts of the case at hand are very similar to those in Hofheinz. Though the Gogos Book is not “scholarly,” it is certainly a biography, or at least a career retrospective.

And for that reason, applying Judge Sweet’s language to these facts: Plaintiffs’ use of the copyrighted magazines, “to show the kind of [work Gogos] took when he first began his [ ] career and what his perception of [the work] was, served to enrich the biography through the [artist]’s perspective on his own work.” Id. at 446. Judge Sweet came to his conclusion that fair use existed in Hofheinz even where the A & E biography could be characterized as “commercial in nature” in the same ways as the Gogos Book.

Nonetheless, the fact that the copyrighted clip was meant to put the artist’s career in context and communicate to the audience the type of work that Peter Graves took

part in was sufficient to make the biography’s use “transformative.” All the facts deemed relevant to establish fair use in Hofheinz could be said of the Gogos Book, which also provides a history of the artist and places his work into some context. c. Bad Faith The final issue for the first factor is whether Spurlock engaged in bad faith, which could have some impact on the first factor analysis.

Plaintiffs argue that Spurlock did act in bad faith since he allegedly knew that Plaintiffs owned the copyrights, negotiated for a licensing fee, but then went ahead with publication when the parties could not come to an agreement. Defendants also raise the earlier argument that Spurlock engaged in bad faith by trying to make the book title similar to the Famous Monsters magazine. (Spurlock Dep. 1/28/09 213:14-215:8). As to Plaintiffs’ first suggestion, that Spurlock’s failed attempt at negotiating a licensing fee amounts to bad faith, such a claim has been considered and explicitly rejected by the Supreme Court.

In Campbell, the plaintiff also made the argument that the defendant’s “request for permission to use the original should be weighed against a finding of fair use.” 510 U.S. at 585 n. 18, 114 S.Ct. 1164. In dismissing the argument, the court stated that “the offer may simply have been made in a good-faith effort to avoid this litigation .... Thus, being denied permission to use a work does not weigh against a finding of fair use.” Id.

In addition, Plaintiffs’ first argument— essentially, that Spurlock knew Plaintiffs owned the copyrights but went ahead anyway- — -is difficult to accept in light of the Court’s earlier discussion concerning the ownership of the artwork. As noted above, most of the images used by Spur-lock that are at issue here were not copies of the magazine covers, but were copies of the art used as the background of the magazine covers. For these images, it is by no means clear, even after discovery, who owns the rights to these images.

In light of this, it would be difficult to fault Spurlock and charge him with “bad faith” for using the images. If this Court were to come to such a conclusion, claims of fair use would be undermined for an overwhelming number of defendants in copyright cases — for defendants that were aware that the plaintiffs had ownership over the works, and for defendants where ownership was dubious. Because this does not comport with the rationale behind the bad faith inquiry, this Court will not accept Plaintiffs’ argument.

Finally, as to Plaintiffs’ claim that the misleading nature of the title is supportive of bad faith, Plaintiffs have again failed to offer any caselaw that would support such a theory. In any event, even if bad faith has some role in the first factor analysis, Spurlock has shown that his use of the copyrighted works is sufficiently transformative relative to the original use by Plaintiffs. Therefore, in light of all of the evidence on the record and all of the first factor considerations, this Court determines that the first fair use factor weighs heavily in favor of Spurlock. 3.

Factor 2 — Nature of the Plaintiff’s Work The second factor requires this Court to consider “the nature of the copyrighted work.” 17 U.S.C. § 107(2). “This factor calls for recognition that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied.” Campbell, 510 U.S. at 586, 114 S.Ct. 1164. Works that are fictional or creative are “closer to this core” than those works that are primarily factual. Video Pipeline, 342 F.3d at 200.

In his brief, Spurlock concedes that the copyrighted magazine covers fall within the core of the Copyright Act’s protective purposes since they are creative expressions. However, the fact that the copyrighted magazines are out-of-print has some bearing on the second fair use factor. In Peter Letterese & Assocs., Inc. v. World Inst. of Scientology Enters., Int’l., 533 F.3d 1287 (11th Cir.2008), the Eleventh Circuit considered the impact that out-of-print status has on the second factor analysis: [O]ut-of-print works are generally accorded less copyright protection.

The relevant fact is not simply that the work is unavailable for purchase through normal channels.... Rather, that fair use is more likely to apply in the standard scenario of an out-of-print work reflects in large part the assumption that no market harm to the owner will come of the use, as presumably it was lack of demand for the work that led to its demise.... Neither the personal nor the property interests of the author are thus strongly implicated with respect to the typical out-of-print work. Id. at 1313.

However, the court noted that the copyrighted work at issue in that case was out-of-print due to the author’s choice to withdraw the work from the market, rather than from a lack of demand. Id. This difference somewhat complicates the analysis, which then turns on motivations for removal from the market, pricing strategies, and whether a market exists for the work. Id. at 1313-14. In the case at hand, there is some dispute between the parties as to whether Famous Monsters and the other magazines became out-of-print due to Warren’s health or because of declining interest in the genre.

However, this debate ignores the proper focus — the cause for the out-of-print status as to each copyrighted work, not the cause for the end of Plaintiffs’ magazines. Each issue of the magazines became out-of-print simply because that is the natural and inevitable fate for magazines and periodicals, such as the magazines formerly owned by Plaintiffs. For example, as to the focus of the first claim of copyright infringement, Warren did not end publication of Famous Monsters # 23 due to Warren’s health, but simply because the company moved on to the next issue of Famous Monsters.

A fair argument could be made that this cuts in favor of Spur-lock’s argument that each issue went out-of-print due to lack of demand, even if that is the nature of the market. In any event, as Spurlock notes, courts have recognized that this second factor is of limited usefulness where the defendant’s work is “transformative” in nature. See Bill Graham, 448 F.3d at 612 (“We recognize, however, that the second factor may be of limited usefulness where the creative work of art is being used for a transformative purpose.” (citing Campbell, 510 U.S. at 586, 114 S.Ct. 1164)). That statement is true in this case.

This Court finds that this factor weighs slightly in favor of Plaintiffs, but it is of limited relevance because of the prior finding that Spurlock’s work is transformative. 4. Factor 3 — Amount and. Substantiality Used For the third factor, this Court must next consider “the amount and substantiality of the portion used in relation to the copyrighted work as a whole.” 17 U.S.C. § 107(3).

In other words, this factor inquires whether “the quantity and value of the materials used” by the defendant “are reasonable in relation to the purpose of the copying.” Campbell, 510 U.S. at 586, 114 S.Ct. 1164. “[T]his factor calls for thought not only about the quantity of the materials used, but about their quality and importance, too.” Id. at 587, 114 S.Ct. 1164. In addition, consideration of the nature of the infringing work is relevant, since “the extent of permissible copying varies with the purpose and character of the use.” Id. at 586-87, 114 S.Ct. 1164.

In general, though, “a work composed primarily of an original, particularly its heart, with little added or changed, is more likely to be a merely superseding use, fulfilling demand for the original.” Id. at 587-88, 114 S.Ct. 1164. As to the quantitative analysis, Spurlock next argues that the magazine covers that he copied make up only 1-1.5% of each of Plaintiffs’ copyrighted works, which is each issue of the magazines. In response, Plaintiffs rely on Schiffer Publ’g, Ltd. v. Chronicle Books, LLC, 2004 WL 2583817 (E.D.Pa. Nov.12, 2004) (Schiller, J.).

In Schiffer, the court considered the legitimacy of the fair use defense for a defendant that copied individual photographs from 13 of the plaintiffs copyrighted books; the books were the copyrighted products, not the individual photographs within the books. Id. at *1-4. In considering the third fair use factor, the court rejected the argument that Spurlock makes here, stating that such an argument “misapprehends the proper frame of reference. Each photograph is an individually copyrighted work, and it is the amount used of each one that should be analyzed.” Id. at *12.

Plaintiffs argue that the covers, like the photographs in Schiffer, are individually copyrighted works, and the copying should be measured in terms of each magazine cover. Plaintiffs’ argument, however, is contrary to binding precedent. In conducting the quantitative portion of the third factor analysis, both the Supreme Court and the Third Circuit have considered the portion of the copyrighted work utilized by the infringing work relative to the copyrighted work as a whole.

See Campbell, 510 U.S. at 586-90, 114 S.Ct. 1164 (comparing copyrighted song in its entirety to the defendant’s song); Harper & Row, 471 U.S. at 564-65, 105 S.Ct. 2218 (conducting quantitative analysis of third factor by considering what portion of the entire copyrighted manuscript the defendant’s infringing work used); Video Pipeline, 342 F.3d at 201 (conducting quantitative analysis of the third factor by considering what portion of the entire copyrighted movie the defendant’s infringing previews used).

None of the Supreme Court or Third Circuit cases support Plaintiffs’ argument that the copyrighted work can be cut or spliced to maximize the percentage used and to support Plaintiffs’ response to the fair use defense. Indeed, the factor itself dictates otherwise. See 17 U.S.C. § 107(3) (“the amount and substantiality of the portion used in relation to the copyrighted work as a whole.” (emphasis added)). Spurlock is therefore correct when he asserts that, since each of the magazines ranged from 68 to 100 pages, (Def.’s Mot. Summ. J.

Ex. 8-27, 38, 28, 39-40), the portion taken was from 1% to 1.5% of each of the magazines. This Court finds, as the Third Circuit did in Video Pipeline, that such a portion taken “is quite small.” 342 F.3d at 201 (finding that 1.7% to 2.2% copying to be quantitatively small). Indeed, Plaintiffs could not reasonably be expected to take anything less; the entire point of using these covers is to portray Gogos’s work. Therefore, this percentage is also quantitatively “reasonable in relation to the purpose of the copying.” Campbell, 510 U.S. at 586, 114 S.Ct. 1164.

Nonetheless, Plaintiffs argue, and Spur-lock disputes, that the magazine covers were qualitatively a significant portion of the magazines and were at “the heart” of the magazine’s content. Plaintiffs contend that the covers were a “central and valuable part of Plaintiffs’ works.” (Warren Decl. ¶ 9); (Gogos Book, Front Flap) (“Issues of [Famous Monsters ] practically leapt off the newsstand due in no small way to their striking cover paintings by Basil Gogos.”).

Spurlock, on the other hand, argues that the “heart” of the magazines was not the covers, but was instead the content of the magazines that kept its readers up-to-date on movie monster gossip. Upon a review of the magazines and the other evidence in the record, this Court finds that Spurlock did not appropriate the “heart” of the copyrighted works. As discussed above in the first fair use factor analysis, each magazine was devoted to updating its readers on recent developments in the movie monster industry and providing in-depth interviews with leading figures in the world of movie monsters.

The magazines did not include a collage of movie monster art or a portfolio of movie monster artists. Indeed, no issue highlights the work of a specific artist. The covers were not the qualitative “heart” of the magazines, but were instead used to catch the eye of potential readers at the newsstand and advertise the content of the magazine. The quality and importance of these covers as used in the original magazines are relatively minor. Plaintiffs also argue that Spurlock has not offered any good reason why he could not have changed the covers to be different, e.g., black-and-white or smaller size.

However, making these changes would directly thwart one of the key purposes of the book — to showcase the detailed work of Basil Gogos. Though such a burdensome change may be necessary in other cases where the defendant takes both a quantitatively large portion and the “heart” of the copyrighted work, Spurlock did neither. In light of the above analysis, this Court finds that the third fair use factor weighs in favor of Spurlock. 5.

Factor 4 — Effect on Potential Market Value Finally, the fourth factor requires this Court to consider “the effect of the use upon the potential market for or value of the copyrighted work.” 17 U.S.C. § 107(4). This factor includes not only the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the defendant ... would result in a substantially adverse impact on the potential market for the original.

The enquiry must take account not only of harm to the original but also of harm to the market for derivative works. Campbell, 510 U.S. at 590, 114 S.Ct. 1164 (internal citations and quotations omitted). The market for derivative works “includes only those that creators of original works would in general develop or license others to develop.” Id. at 592, 114 S.Ct. 1164.

The extent to which the market is harmed is a “matter of degree, and the importance of this factor will vary, not only with the amount of harm, but also with the relative strength of the showing on the other factors.” Id. at 591 n. 21, 114 S.Ct. 1164. As with the three other factors, the defendant has the burden to offer favorable evidence on market effect. Id. at 590, 114 S.Ct. 1164. Plaintiffs’ arguments on this factor focus solely on the market for derivative works of the magazines and, in particular, a coffee-table book that Warren has considered publishing.

Warren asserts that he has, and has had for some time, an interest in using the Famous Monsters magazines and the magazine covers for a coffee-table book that would chronicle the history and success of the Famous Monsters of Film-land magazines. Spurlock, on the other hand, argues that Warren’s interest has been just that — only interest — and that, despite his self-professed intent to create this book, Warren has taken no significant steps to do so.

Upon a review of the evidence on the record, this Court agrees with Spurlock that Warren has exhibited little genuine interest in actually publishing this coffee table book, up until the point when this litigation commenced. Only after the litigation began did he take any substantial steps toward considering publication of the book. On this issue, Plaintiffs rely on the Second Circuit’s decision in Castle Rock Entm’t, Inc. v.

Carol Publ’g Group, Inc., 150 F.3d 132 (2d Cir.1998), where the court stated that “[i]t would ... not serve the ends of the Copyright Act — ie., to advance the arts — if the artists were denied their monopoly over derivative versions of their creative works merely because they made the artistic decision not to saturate those markets with variations of their original.” Id. at 146. Plaintiffs’ reliance, however, is misplaced. Castle Rock concerned a plaintiff that had, and continued to, exploit its copyright over the Seinfeld television program and derivative markets. Id. at 136.

The only issue in that case was whether a decision to not exploit one particular derivative market should be respected. The underlying facts of the case at hand are substantially different. Warren not only failed to use his copyright to exploit a particular derivative market, but he has both failed to exploit any derivative market and failed to even exploit the copyrights in their entirety for the past several decades.

This is not a case of a court’s need to respect the artistic decisions of the copyright owner who decides to exploit one derivative market but not another; instead, this is a case where the copyright owner has exhibited virtually no interest at all in utilizing his copyrights.

It would defy logic for this Court to accept Warren’s argument that, where a copyright owner has failed to utilize his copyrights for several decades, a district court’s prohibition of a defendant’s productive and transformative use serves copyright’s “purpose, ‘[t]o promote the Progress of Science and useful Arts ....’” Campbell, 510 U.S. at 575, 114 S.Ct. 1164 (quoting U.S. Const. art. I, § 8). This alone places the fourth factor in favor of Spurlock.

Nonetheless, assuming that it does somehow serve the purposes of copyright to prevent others from utilizing a copyright that was deserted decades ago, the parties have offered several pieces of evidence in support of their arguments on the fourth factor.

Spurlock, who has the burden to satisfy the fair use defense and the four factors, offers a number of individuals’ testimony in support of his argument that the market for the coffee-table book was not harmed by the Gogos Book. • Robert Greenberger, who is an agent of Philip Kim, the current owner of the Famous Monsters of Filmland trademark, testified that the Gogos Book did not “adversely affect[ ] my interest, Mr. [Philip] Kim’s interest, or the interest of Abrams [a publisher] in publishing a coffee table book celebrating the 50th Anniversary of the original Famous Monsters of Filmland magazine.” (Greenberger Aff. ¶ 8).

Kim and Greenberger had previously expressed some interest in working on the coffee-table book. • Jon Cooke, Warren’s supposed “project manager” for the coffee-table book, also testified that he did not believe any publication adversely affected Mr.

Warren’s right to license Famous Monsters. (Cooke Dep. 59:23-60:19). • Charles Kochman, the only publisher that Warren or a person acting on behalf of Warren ever approached, testified that he believes the Gogos Book did not have any impact on the market for a book about Famous Monsters. (Kochman Aff. ¶¶ 12,13)., In response to Spurlock’s evidence, Plaintiffs make several arguments concerning the fourth factor. Many of those arguments, however, miss the mark.

Plaintiffs first argue that this Court should use a “functional test,” offered in the respected treatise Nimmer on Copyright, to determine whether the market was harmed. This test relies on one prong of the first factor, whether the work is trans-formative, in coming to a conclusion on whether there was market impact.

See 4 Nimmer on Copyright, § 13.05[B][1], at 13-206 (“In determining the effect of the defendant’s use upon the potential market for or value of the plaintiffs work, a comparison must be made not merely of the media in which the two works may appear, but rather in terms of the function of each such work regardless of media.”). However, Plaintiffs have not identified any cases where courts have adopted this test, and a review of the Third Circuit and Supreme Court cases shows that neither of these courts has done so.

Even if this test was applied, this Court would conclude that the function of Plaintiffs’ use of the magazine covers is distinctly different than the function of Spurlock’s use in the Gogos Book, for the same reasons that were discussed in the first factor analysis. Next, Plaintiffs rely on evidence to establish that there is a valuable market for Famous Monsters derivative works. But Spurlock does not dispute this issue, and he repeatedly notes that a Famous Monsters coffee-table book would be readily accepted by a publisher (though he insists that the Gogos Book does not impact the market for such a book).

Plaintiffs also offer a statement by one of their experts, Dennis Kitchen, that, if the Gogos Book does poorly, this would poison the market for the Famous Monsters coffee-table book. (Kitchen Rep. ¶ 13). Even if this is true, Plaintiffs did not point to any evidence that speaks to the premise of his conclusion — whether the Gogos Book sold poorly.

Finally, Plaintiffs contend that the market for the coffee-table book is likely usurped since the Gogos Book would probably be placed beside a Famous Monsters coffee-table book in the bookstore, or would show up together as results for likely-used keywords in an online bookstore search. Yet, Plaintiffs did not offer any testimony or evidence in support of either of these assertions.

Plaintiffs provide several statements on the fourth factor that do address the relevant issue: •Warren states in his declaration that “Defendant’s visually-oriented book— which is based on substantial part on the covers and original artwork of Plaintiffs’ Famous Monsters of Film-land magazines, has been published first and is still publicly available — has preempted Plaintiffs’ own plans for a book comprising and featuring the covers and original artwork of their Famous Monsters of Filmland, magazines.” (Warren Decl. ¶ 12). • Kitchen states that “[t]he book Famous Monster Movie Art of Basil Gogos, having been published first and containing a substantial amount of covers and cover art from Famous Monsters of Filmland, likely hampers Warren’s plans for a book featuring the covers and cover art of Warren’s Famous Monsters of Filmland magazines.” (Kitchen Rep. ¶ 9). • Samuel Kursh, Plaintiffs’ other expert, concluded that, in considering the evidence in the light favorable to Plaintiffs, “Warren has been permanently precluded from exploiting the intellectual property as a result of Spurlock’s alleged infringement, [and] the loss of opportunity would approximate the value of the property or $1 million.” (Kursh Rep. ¶ 59).

Warren’s complete failure to exploit his copyrights for approximately 22 years substantially detracts from his argument on the fourth factor. The parties’ opposing arguments and supporting evidence on the other market factors are largely based on opinions as to what would have occurred if certain events had taken place. All these conflicting opinions are to a large degree speculative. They do create a genuine issue of fact as to whether the fourth factor is in favor of Plaintiffs or Spurlock.

Weighing Plaintiffs’ sheer neglect of the copyrights, against the result of making all factual inferences in favor of Plaintiffs as to the other facts as must be done on

summary judgment, based on Warren’s own testimony and the supporting testimony from others, the Court finds that the fourth factor slightly favors Plaintiffs. See Campbell, 510 U.S. at 591 n. 21, 114 S.Ct. 1164 (“Market harm is a matter of degree, and the importance of this factor will vary, not only with the amount of harm, but also with the relative strength of the showing on the other factors.”). 6. Consideration of All Fair Use Factors This Court concludes that the fair use factors, considered as a whole, weigh in favor of Spurlock.

The strong weight of the first and third factors in favor of Spur-lock, along with the limited relevance of the second factor, warrant a finding on fair use for the Defendant, despite the disputed facts on the fourth factor, which, when inferred in favor of Plaintiffs, slightly favors Plaintiffs. It is important to again recognize that the four factors are not “a score card that promises victory to the winner of the majority.” Video Pipeline, 342 F.3d at 198 (quoting Leval, supra, at 1110).

The fair use factors are “to be explored, and the results weighed together, in light of the purposes of copyright.” Id. (quoting Campbell, 510 U.S. at 578, 114 S.Ct. 1164). After weighing the factors together and considering the purposes of copyright, this Court determines that the fair use defense is appropriate here.

The fact that the Gogos Book is inherently biographical render it so fundamentally transformative in nature, coupled with the fact that Spur-lock utilized such a quantitatively and qualitatively minor portion of the magazines, requires this Court to conclude that Spur-lock’s use is fair use and to grant Spur-lock’s motion for

summary judgment on the copyright claims. IV. Unfair Competition Spurlock also moves for

summary judgment on Plaintiffs’ state law unfair competition claim. In Count II of their Amended Complaint, Plaintiffs argue that the name of the Gogos Book, Famous Monster Movie Art of Basil Gogos, suggests an affiliation with the Famous Monsters of Filmland magazine and uses the “goodwill and reputation” that Plaintiffs have garnered with the “success and favorable public acceptance and recognition” of the Famous Monsters magazine. A. Principles of Analyzing Unfair Competition Claim The threshold issue for Count II is determining what principles govern an unfair competition claim.

Despite several cases identifying standards to be used on these claims, there is no clear precedent on which standard is the appropriate one for this case. Though in many ways the s

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