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A district court judge erred in holding that, in order to receive damages, a copyright holder was required to prove that an infringer’s profits were attributable to use of the infringed material, the 9th U.S. Circuit Court of Appeals ruled Nov. 16 ( Wade B. Cook v. Anthony Robbins, et al., Nos. 98-36242 and 99-35141, 9th Cir.). The panel vacated an order by U.S. Judge Jack E. Tanner of the Western District of Washington entering judgment as a matter of law (JMOL) for Anthony Robbins and Robbins Research International Inc. (RRI) in a suit brought by Wade B. Cook. Cook is the author of the best selling book “Wall Street Money Machine,” which sets out strategies for stock and stock option transactions. Cook, a former taxi driver, highlighted an investment theme called “meter drop,” which refers to his determination that he could make more money taking numerous short trips rather than waiting for higher fares. The book also discusses Cook’s “rolling stock” concept, which refers to stock which tends to roll up to a specific price point, then drops down to a specific price point in a pattern of repeated waves. Cook obtained copyright registration for the book in May 1997. Cook also conducts seminars based on his theories. Robbins, chairman of RRI, has taught financial seminars since 1989 and has discussed momentum investing since 1996. Since 1989, he has been teaching the “ring toss” concept of investing; attendees at the seminars play a ring toss game designed to show that large returns may be gained cumulatively from making small returns. JOINT VENTURE In April 1996, after attending Cook’s seminar, Robbins proposed a joint venture; however, negotiations ended in June 1996. In August 1996, Robbins began presenting a revised financial seminar called “Financial Power.” The manual given to attendees contained the expression “meter drop” nine times and “rolling stock” twice. Subsequently, the RRI staff was instructed to remove the references; however, “meter drop” appeared six times in later editions of the manual. Cook sued, alleging copyright infringement and citing 11 statements in the Financial Power manual. The court entered summary judgment for Robbins and RRI on seven of the statements, but found factual issues regarding the remaining four. SPECIAL VERDICT The jury returned a special verdict in favor of Cook, finding infringement on two of the four phrases and awarding him infringer’s profits of $655,900, based on testimony from a defense expert that RRI had earned $673,000 from the Financial Power seminars. Robbins and RRI moved for JMOL, arguing that Cook did not prove damages, that their use was fair use and that the damages were excessive. Judge Tanner granted the motion, finding that Cook did not prove profits attributable to infringement because he failed to establish a causal connection between the infringing words and the infringer’s profits. He denied Robbins’ alternative motions for remittitur or a new trial. The parties filed cross-appeals. SECTION 504(B) Reversing, the 9th Circuit held that Judge Tanner misread Section 504(b) of the Copyright Act in holding that Cook was required to establish a causal link between RRI’s profits and its use of his work. Under Section 504(b), the appeals court said, quoting the statute, “the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.” Here, the panel said, “the statutory burden is clear; Defendants had to prove the percentage of their gross revenue not attributable to Cook’s book.” And, the panel said, substantial evidence supports the jury’s finding. PROTECTABILITY The panel rejected Robbins’ and RRI’s contention that the phrases “meter drop” and “rolling stock” are not protected by copyright. “Cook’s complete expressions in conveying the meaning of ‘meter drop’ and ‘rolling stock’ are creative, even if only minimally so, and are protected by his copyright in ‘Wall Street Money Machine,’” the panel said. “Viewing the evidence in the light most favorable to Cook does not compel a contrary finding that the infringing expressions were not copyrightable material.” The court also affirmed the denial of JMOL on fair use and the lower court’s refusal to order a new trial or remittitur. Cook is represented by H. Troy Romero of Vance, Romero & Montague in Bellevue, Wash. Robbins is represented by Peter S. Selvin of Loeb & Loeb in Los Angeles. � Copyright 2000 Mealey Publications, Inc.

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