TD Bank NA v. Vernon Hill, II
928 F.3d 259
| 3rd Cir. | 2019Background
- Vernon W. Hill, former CEO of Commerce Bank, co-authored a 2007 unpublished manuscript with support from Commerce; Commerce signed a publishing agreement with Portfolio and Hill signed a letter to the publisher purporting to guarantee the agreement and stating the work was "made for hire."
- Commerce Bank (later acquired by TD Bank) shelved the 2007 manuscript, then registered it with the Copyright Office after Hill published a 2012 book that reused portions of the 2007 manuscript.
- TD Bank sued Hill for copyright infringement, claiming exclusive ownership under the letter agreement and seeking injunctive relief; the District Court found for TD Bank on ownership and liability and later entered a permanent injunction barring Hill from publishing, marketing, distributing, or selling the 2012 book.
- Discovery showed TD Bank had not published the 2007 manuscript and admitted at most 16% overlap between the works; TD Bank also stated it had no present intent to publish the 2007 manuscript.
- On appeal, the Third Circuit affirmed ownership and liability (but recharacterized the contract as an assignment rather than a valid "work for hire" declaration), rejected categorical presumptions favoring injunctions in copyright cases after eBay, and vacated the permanent injunction as an abuse of discretion.
Issues
| Issue | Plaintiff's Argument (TD Bank) | Defendant's Argument (Hill) | Held |
|---|---|---|---|
| Ownership of 2007 manuscript | Letter/guaranty and publishing agreement made Commerce the exclusive owner (work for hire or otherwise) | Hill argued he was a co-author and that no valid assignment existed | Court: Letter effected an assignment under New York law; rejected using a contractual "deem[ed] for hire" clause to create statutory work-for-hire status; affirmed ownership on assignment grounds but remanded scope-of-employment question if parties pursue it |
| Work-for-hire characterization | The letter's statement that the work was "made for hire" made Commerce the author from "day one" | Hill argued a party cannot contract a non-statutory work-for-hire for an employee-created work outside statutory criteria | Held: Parties cannot "deem" an employee's out-of-scope work a statutory work-for-hire; scope-of-employment must be evaluated under agency principles (Restatement test) |
| Infringement defenses (merger/scènes-à-faire/fair use) | TD Bank: copied expression is protectable; fair use fails because use is not transformative, manuscript unpublished, and market harm possible | Hill: merger/scènes-à-faire and fair use defenses | Held: District Court properly rejected merger/scènes-à-faire and fair use; affirmed liability at summary judgment |
| Permanent injunction | TD Bank: continuing infringement and the "right to not use the copyright" justify injunction | Hill: monetary remedies suffice; public interest and First Amendment values weigh against injunction | Held: eBay precludes presumptive injunctions; TD Bank failed to prove irreparable harm or inadequacy of legal remedies; injunction vacated as abuse of discretion |
Key Cases Cited
- eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006) (courts must apply traditional four-factor equitable test; no presumption of injunction)
- Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) (work-for-hire analysis tied to agency principles; employee/independent-contractor distinction)
- Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991) (copyright infringement requires copying of protected expression)
- Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (transformative use central to fair-use analysis)
- Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985) (unpublished status and market harm weigh against fair use)
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (standard for injunctive relief requiring showing of irreparable harm)
- Ferring Pharms., Inc. v. Watson Pharms., Inc., 765 F.3d 205 (3d Cir. 2014) (abandoning presumptions in injunction analysis under eBay)
- Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010) (rejected presumption of irreparable harm in copyright cases)