TD Bank, N.A. v. Hill

TD BANK, N.A., Plaintiff, v. VERNON W. HILL, II, Defendant.

Civil No. 12-7188 (RBK/JS)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE

July 27, 2015

NOT FOR PUBLICATION

(Doc. Nos. 65, 66, 73, 82)

OPINION

KUGLER, United States District Judge:

This matter arises from the alleged copyright infringement by Defendant Vernon W. Hill, II ("Defendant" or "Mr. Hill") as to a manuscript owned by Plaintiff TD Bank, N.A. ("TD Bank" or "Plaintiff"). Presently before the Court is Plaintiff's Motion for Summary Judgment (Doc. No. 65) and Defendant's Cross-Motion for Partial Summary Judgment (Doc. No. 73), pursuant to Fed. R. Civ. P. 56. Also before the Court is Plaintiff's Motion to Seal certain documents that it relies upon in its Motion for Summary Judgment, as well as portions of the brief and statement of material facts filed in support of that Motion that discuss the documents at issue (Doc. No. 66), and Defendant's Motion to Seal certain documents that he relies upon in his Cross-Motion for Partial Summary Judgment (Doc. No. 82), pursuant to L. Civ. R. 5.3. For the reasons expressed herein, Plaintiff's Motion for Summary Judgment is GRANTED. Defendant's Cross-Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART. Both parties' Motions to Seal are DENIED.

I. BACKGROUND AND PROCEDURAL HISTORY¹

This is a copyright infringement case in which Defendant admits to using verbatim language from Plaintiff's work in a book that Defendant authored and published. The dispute centers on whether Defendant owned the rights to those words along with Plaintiff, and if not, whether a valid defense exists under copyright law for Defendant's undeniable copying of the material. The generally agreed-upon facts are set out below.

Mr. Hill was a founder and former Chairman, President, and Chief Executive Officer of Commerce Bancorp, LLC, an affiliate of Commerce Bank (collectively "Commerce Bank"), to which Plaintiff TD Bank is the successor by merger. (Pl.'s Statement of Undisputed Material Facts, Doc. No. 65 ("Pl.'s SUMF") ¶¶ 1-2.) From 2006-2007, during his time as CEO of Commerce Bank, Mr. Hill worked on a manuscript entitled "Fans, Not Customers: Creating Super Growth in a No-Growth Industry," also known as "The Power of Wow" (the "2007 Manuscript"). (Id. at ¶¶ 3, 18.) Commerce Bank also engaged Robert Andelman, a professional business book writer, to write the 2007 Manuscript.² (Id. at ¶ 9.)

Mr. Hill separated from Commerce Bank in 2007, at which time the 2007 Manuscript remained unpublished. (Id. at ¶ 40.) After leaving Commerce Bank, Mr. Hill founded Metro Bank in the United Kingdom. (Defendant's Statement of Undisputed Material Facts, Doc. No. 75 ("Def.'s SUMF") ¶ 86.) Mr. Hill thereafter engaged Mr. Andelman to serve as co-author,alongside Mr. Hill, of a book entitled "Fans! Not Customers: How to Create Growth Companies in a No Growth World" (the "2012 Book"). (Id. at ¶ 92.) In the fall of 2012, the 2012 Book was published by Profile Books Ltd., listing as co-authors Mr. Hill and Mr. Andelman. (Pl.'s SUMF ¶¶ 48-49.) The 2012 Book was available for sale on Amazon.com, Barnesandnoble.com, as well as in brick-and-mortar stores. (Id. at ¶ 50.)

A. Facts Relating to Copyright Ownership

On September 19, 2006, Commerce Bank entered into a contract with Portfolio, a division of Penguin Group (USA) Inc. (the "Portfolio Contract"), for potential publication of the 2007 Manuscript. (Id. at ¶ 5.) The Portfolio Contract states that "The Author is the sole and exclusive owner of all rights granted to the Publisher in this Agreement and has not assigned, pledged, or otherwise encumbered the same." (Id. at ¶ 6; Pl.'s Ex. 5, Portfolio Contract ¶ 2, TD00515.) The Portfolio Contract identifies Commerce Bank as the "Author" and Portfolio as the "Publisher." (Portfolio Contract at TD00514.) However, also in the Portfolio Contract, Mr. Hill is identified as the "sole author" of the work. (Id. at ¶ 2, TD00515.)

Mr. Hill signed an undated letter that refers to the Portfolio Contract (the "Guaranty")³ and states as follows:

I have an interest in the Author and in having the Work published by the Publisher, and as an inducement to the Publisher to enter into the Agreement, I hereby unconditionally guarantee, promise and agree with the Publisher, its successors and assigns that the Author will, in all respects, faithfully perform and fulfill all obligations of the Agreement on its part to be performed and fulfilled at the time and in the manner therein provided. I also unconditionally guarantee that the work is a work made for hire within the meaning of the United States Copyright Law and that the Author is the owner of copyright in the Work...

(Pl.'s Ex. 6, the Guaranty.) The Guaranty explains that in the Portfolio Contract "and herein," "Commerce Bank., N.A. [is] described . . . as the 'Author' and Portfolio . . . [is] described as 'thePublisher.'" (Id.) Mr. Hill contends that he understood the phrase "work made for hire" to refer to the contributions of Mr. Andelman. (Hill Decl. ¶ 37.) The parties dispute whether the Guaranty and the Portfolio Contract are an integrated agreement. (Pl's SUMF ¶ 8; Def.'s Resp. to Pl.'s SUMF ¶ 8.) Commerce Bank did not sign the Guaranty; only Mr. Hill's signature appears on that document. Still, Mr. Hill and his counsel both refer to the Guaranty and Portfolio Contract as "integrated" during Mr. Hill's deposition. (See, e.g., Pl.'s Ex. 4, Deposition of Vernon W. Hill, II ("Hill Dep.") 154:8-15 ("A: I signed this [referring to the Guaranty] with a 2006 Agreement attached. Q: Did you believe that that was an integrated part of this document? A: Yes.").)

TD Bank admits that Commerce Bank intended for Mr. Hill to be an author of the 2007 Manuscript. (Def.'s SUMF ¶ 30.) The parties dispute whether Mr. Hill's status as an author granted him an ownership interest under copyright law. There are no written documents identifying Mr. Hill as a co-owner in the copyright of the 2007 Manuscript. (Pl.'s SUMF ¶ 12.) However, Mr. Hill points to documents that identify him as co-author of the 2007 Manuscript, such as a draft collaboration agreement between Commerce Bank and Mr. Andelman that refers to Commerce Bank and Mr. Hill collectively as the "Author," and a template release for individuals appearing in the 2007 Manuscript that refers to Mr. Hill as the "Author." (Def.'s Resp. to Pl.'s SUMF ¶ 12; Def.'s Ex. E, Draft Collaboration Agreement; Def.'s Ex. F, Release Template.) Minutes from an August 15, 2006 Commerce Bank Board of Directors meeting also refer to the 2007 Manuscript as "authored by the Chairman." (Def.'s Ex. G, August 2006 Board Meeting Minutes.)

Mr. Hill contends that he informed Commerce Bank board members that he authored the 2007 Manuscript and understood himself to be an owner of the copyright "[o]n multipleoccasions." (Hill Decl. ¶ 30.) However, when asked whether he had conversations with Commerce Bank about his co-ownership of the 2007 Manuscript, Mr. Hill stated that he "didn't have any conversations. I knew I was the co-owner and the co-author." (Hill Dep. 173:16-17.) It is TD Bank's position that the first time Mr. Hill communicated to it his belief that he co-owned the copyright was when he filed his Answer and Counterclaims in this lawsuit on January 22, 2013. (Pl.'s SUMF ¶ 15.) There is no written document transferring ownership interest in the copyright of the 2007 Manuscript from TD Bank to Mr. Hill. (Id. at ¶ 13.) TD Bank registered the copyright in the 2007 Manuscript with the United States Copyright Office on November 16, 2012. (Pl.'s Ex. 11, Copyright Reg. No. TXu 1-830-575.) Mr. Hill submitted his own adverse registration claim on January 8, 2013. (Pl.'s Ex. 9, Copyright Reg. No. TXu001842597.)

Commerce Bank contributed personnel, funds, and resources to create the 2007 manuscript, although the extent of those contributions is disputed. (Pl.'s SUMF ¶¶ 33-34; Def.'s Resp. to Pl.'s SUMF ¶ 33.) Several Commerce Bank employees admitted that their contributions or other roles in creating the 2007 Manuscript were made within the scope of their employment. (Pl.'s SUMF ¶ 35.) The parties also agree that Commerce Bank personnel contributed marketing and promotional ideas for the 2007 Manuscript. (Id. at ¶ 28). However, Mr. Hill contends that any Commerce Bank employee's involvement in the 2007 Manuscript was limited to answering Mr. Andelman's questions and checking facts. (Def.'s Resp. to Pl.'s Supp. SUMF ¶ 9.) Mr. Hill claims that the 2007 Manuscript was written on his own initiative. (Hill Decl. ¶ 12.)

After leaving Commerce Bank, Mr. Hill took actions to publish the 2007 Manuscript. In doing so, his agent asked him for "a copy of the letter that reverts rights in the manuscript to you," to which Mr. Hill replied that he "need[ed] a draft letter for TD to sign assigning all rightsto me," which Mr. Hill's agent then provided. (Pl.'s Ex. 53, Emails between Michael Bourret and Mr. Hill dated June 23 and June 24, 2008.) TD Bank never made the assignment. (Pl.'s SUMF ¶ 43.)

B. Facts Relating to the Contents of the Works

It is undisputed that the 2007 Manuscript was intended to promote and benefit Commerce Bank and create favorable publicity for Commerce Bank. (Pl.'s SUMF ¶ 24.) Nonetheless, the parties do not agree as to whether the 2007 Manuscript is in essence about Commerce Bank or about Mr. Hill's life and business experience and ideas. (Id. at ¶ 26; Def.'s Resp. to Pl.'s SUMF ¶ 26.) The 2007 Manuscript describes the business model used by Commerce Bank that Mr. Hill had advocated throughout his career. (Def.'s SUMF ¶ 47.) Mr. Hill had previously discussed in public speeches and interviews many of the ideas, business concepts, and Commerce Bank anecdotes contained in the 2007 Manuscript. (Id. at ¶ 50.) In addition, some of the content contained in the 2007 Manuscript was also provided to Harvard Business School for use in a case study on Commerce Bank. (Id.) On the other hand,...