JUMP to XENU!

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF VIRGINIA

Alexandria Division

RELIGIOUS TECHNOLOGY CENTER :

Plaintiff, vs. Civil Action No. 95-1107-A

ARNALDO PAGLIARINI LERMA Defendant.

MEMORANDUM OPINION ON RELIGIOUS TECHNOLOGY CENTER'S AND ARNALDO P. LERMA MOTIONS FOR SUMMARY JUDGEMENT

This matter comes before the court on plaintiff Religious Technology Center's ("RTC") Motion for Summary Judgment for Copyright Infringement Against Defendant Lerma ("Lerma") , also under consideration is defendant Arnaldo P. Lerma's (Cross-) Motion for Summary Judgment and/or to Dismiss. Both parties seek final resolution of the allegation that Lerma infringed RTC's copyright when he copied to his computer and/or posted to the Internet sections of sacred properly copyrighted documents belonging to the Church of Scientology. Summary judgment is appropriate when the record shows that there is no genuine issue as to any material fact and that the movement is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c), Anderson v. Liberty Lobby, Inc., 477 O.S. 242 (1986). In ruling on such motions, the court must construe the facts and all inferences drawn from those facts in favor of the non-moving party. Charbonnages de France v. Smith, 597 F.2d 406` 414 (4th Cir. 1979). Based upon the arguments tendered in the briefs and at the hearing, as well as the mass of evidence in this substantial

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record, the Court finds that Lerma infringed RTC's copyright and that summary judgment be entered in favor of RTC and against Lerma.

History of the Case

The dispute in this case surrounds Lerma's acquisition and publication on the Internet of texts that the Church of Scientology considers sacred and protects heavily from unauthorized disclosure. Founded by L. Ron Hubbard, the Scientology religion attempts to explain the origin of negative spiritual forces in the world and advances techniques for improving one's own spiritual well-being. Scientologists believe that most human problems can be traced to lingering spirits of an extraterrestrial people massacred by their ruler, Xenu, over 75 million years ago. These spirits attach themselves by "clusters" to individuals in the contemporary world, causing spiritual harm and negatively influencing the lives of their hosts

The texts at issue, the Advanced Technology" or the "Operating Thetan" Documents ("OT Documents"), were written by founder Hubbard and allegedly provide a detailed program for warding off these evil influences through creation of "free zones." The OT Documents outline a process that must be executed precisely according to the procedures laid out by Hubbard and under the guidance of an assisting church official in order to be efficacious. Church doctrine teaches that improper disclosure of the OT documents, both to non-Scientologists and even to church members if done prematurely prevents achievement of the desired effect. Unauthorized disclosure also. risks further harm of global proportions: - See Religious Technology Center .v.. .Lerma, 908 F.Supp 1353, 1358 (S.D. va. 1995. Hubbard explicitly directed that the OT Documents be released .only in strict accordance with his guidelines, and that they remain otherwise secret and secure. Consequently the church has charged RTC, the plaintiff in this case, with securing the sacred texts and aggressively policing any breaches in security or unauthorized disclosures that may occur. RTC has enacted a comprehensive protection plan that includes locked vaults, numerous guards, key cards, and signed nondisclosure statements by all church members. RTC has also been " relentless" tracking down suspected offenders and vigorously pursuing legal remedies against them. This litigation initially consisted-of both trade secret and copyright infringement counts against multiple defendants, including Lerma, Digital Gateway Systems (Lerma's access provider to the Internet); The Washington Post, which published a story about the case which quoted fractions of the OT Documents), Marc Fisher (a Washington Post reporter), and Richard Leiby (a Washington Post reporter). However, The Court earlier dismissed the trade secrets count as to all defendants and the copyright infringement count as to the Washington Post and its reporters. RTC voluntarily dismissed its claims against Digital Gateway systems, Therefore, the only issue remaining in the case is RTC's: .. (3)

copyright infringement claim against defendant Lerma. Even that issue has been progressively honed, with RTC moving for summary judgment on only a subset of the copyrighted works originally contented in RTC's complaint. 1.

Bases for Copyright Infringement

To establish copyright infringements two elements must be proven: (1) ownership of a valid copyright, and (2) unauthorized copying of constituent elements of the copyrighted work. Feist Publications, Inc. v. Rural Telephone Service Company, Inc., 499 U.S. 340, 361 (1991). Copyright infringement occurs when there is "substantial unauthorized copying of protected materials from a copyrighted work." Harry G. Henn, Henn on Copyright Law, §27.6 (1991) The first element is effectively uncontested by Lerma. Filed in conjunction with RTC's motion for Summary judgment was a set of exhibits (the "G-series Exhibits") containing 33 comparisons of RTC's copyrighted works and the "copies" allegedly in Lerma's possession and/or posted by him to the Internet, Each of these exhibits includes the written segment allegedly copied by Lerma, the corresponding Hubbard original, a certificate of copyright

---------------------- 1 RTC initially alleged that Lerma infringed the copyright of multiple works from several different series or collections of the OT Documents. With its summary judgment motion, RTC now seeks ruling only on materials excerpted from "OT II", "OTIII", "Power", "NOTs", and "the Sunshine Rundown`" referred to all the in this motion as the "Works." The Second Amended Complaint contained additional allegations regarding infringement of other materials from "OT I", "OT IV", and "OT VIII", however these allegations are not included in RTC's instant Motion for Summary Judgment.

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registration, a certified photocopy of the masked work on file at the Copyright Office of the United States, and a full (i.e. unmasked) "translation" of that photocopy. Lerma does not dispute that Hubbard followed the appropriate procedures in obtaining the maximum copyright protection of his original works and that these same Works have now been produced in the G-Series Exhibits with the appropriate validating documentation Nor does he dispute that RTC properly owns the copyright interest in these Works .

The Idea/Expression Dichotomy Lerma launches collatera1 attack on the appropriateness; of the copyright. Distinguishing between idea and expression, Lerma argues that material contained in the Works is "uncopyrightable". Copyright law promotes the advancement; of human knowledge and thought by providing limited legal (and therefore economic) protection to an author's original expression. The author's temporary monopoly, however, does; not include the ideas contained within his work As stated by the Third Circuit, "the purpose of copyright law is to create the most efficient and productive balance between protection (incentive) and dissemination of information, to promote learning, culture, and development." Whelan Associates v. Jaslow Dental Laboratory, 797 F.2d 1222, 1235 (3rd Cir. 1986). These intentions have spawned the idea/expression dichotomy in copyright law, protecting the latter while still permitting access to the former "The [Copyright] Act is thus able to protect authors without impeding the public's access to that (5)

information which gives meaning to our society' s highly valued freedom of expression." Harper vs. Row Publishers, Inc. v. Nation, 723 F.2d 195, 202 (2md Cir. 1983).

This idea/expression distinction is codified under 17 U.S.C. 102(b) which states:

In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle or discovery, Regardless of the form in which it is described, explained, illustrated, or embodied in such work,

Courts have therefore held that wherever an authored expression of on idea is closely intertwined with the idea itself, the expression has ''merged" with the idea and is therefore uncopyrightable. Under this Merger doctrine, where the author's ideas and procedures can be properly expressed in so few ways that protection of the expression would effectively accord protection to the idea itself, " Kreqos v. Associated Press, 937 F.2d 700, 705 (2nd Cir l991), courts have found the expression not copyrightable. Copyrighting the expression in these instances would effectively prohibit discussion and analysis of the idea itself And grant the owner a monopoly on all uses of the very concept. Lerma argues that this merger doctrine applies and that RTC' s claim of copyright protection is therefore invalid. He also argues that Hubbard describes the OT Documents as primarily factual, and he insists that their contents must be follower exactly as written. Under the merger doctrine, even if Hubbard had followed all

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procedural requirements, the Works would still be uncopyrightable if protecting the expression would effectively grant a monopoly on the idea itself. Despite this argument, the Court finds that merger of idea and expression has not occurred in this case. The ideas and concepts of the Scientology religion can be discussed independently of the OT documents. This has been amply demonstrated in the voluminous record accompanying the case and in all parties' numerous briefs. Indeed, theological musings on the sources of (and remedies for) spiritual harm have dominated discussion Shout religion for centuries. Whether achieved through animal spirits, wi tches , demons, curses, Satan, angels, or "body thetans, " spiritual healing is clearly not a concept inherently tied to the OT Documents. To the extent that the OT Documents supply a technique or "process'' for achieving spiritual well-being, their copyright arguably; violates a strictly literal reading of §102 (b) . However, as RTC has argued, virtually all works convey to :some extent ideas and processes that are uncopyrightable. See Hr'g, January 19 , 1996' at 23 et seq. While such creations may contain "procedure[s], process[es], [or] system[s]", 17 U.S.C.A. §102 {b), they are not thereby rendered de facto uncopyrightable. As an example, RTC cites programs which essentially describe a ''process but are nonetheless copyrightable. Other examples include cookbooks any automobile mechanics repair manuals. Each of these documents purports to describe a precise method for achieving a desired end, whether it be the creation of spinach soufflé or the

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rebuilding of a defective carburetor. Hubbard's instructional directions for spiritual healing are no less-deserving of protection than the admittedly copyrightable "recipe" in a cookbook or copyrightable "repair steps" in a maintenance manual. Lerma attempts to distinguish the Works from these examples because the 'works require specific, precise repetition of the exact text. While a recipe, repair instructions, or a computer program may permit some variation, Hubbard claims that the Works provide the only correct method for reaching complete spiritual health. If not followed exactly, the process will fail. However, literary works; such as: a poem or haiku and :musical works such as a symphonic score possess the same quality -- -the desired effect cannot be achieved without precise repetition. This does not make poems, haikus, And musical scores uncopyrightable, and it should likewise not preclude copyrightability of the Works. Denying copyright protection to RTC on this basis would rapidly destroy the protection and incentive for the likes of Wagner and Brahms -- an outcome that is most certainly contrary to the goals of copyright law.

The Court, therefore, finds the merger clause inapplicable to the Works.

Fair Use Defense

Lerma freely admits that he copied portions of the Works by downloading or scanning them into his computer and by posting segments of this material to the Internet . He argues that even f the works are copyrightable and copyrighted, this copying was

lawful because it was "fair use."

In determining whether the use of a copyrighted work constitutes fair use, the Court must consider four factors:

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

17 U.S.C.. §107. These four statutory factors may not be "treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright." Campbell v. Acuff-Rose Music, Inc., 510 U.S.. 569, 578 (1994). Lerma urges us, when conducting the fair use analysis, to evaluate his actions in the special context of modern communication on the Internet. He describes the unique characteristics of computer interaction and argues for special treatment under copyright law While the Internet does present a truly revolutionary advance, neither Congress nor the courts have afforded it unique status under the fair use standard of §107. The law of copyright has evolved with technological change, with each new technological advancement creating complicated questions of copyright interpretation and application . Nevertheless, the new technologies -- from television, to video cassette recorders, to digitized transmissions -- have been made to fit within the overall scheme of copyright law and to serve the ends which copyright was

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intended to promote. See Sony Corp.. v. Universal City Studios Inc., 464 U.S. 417 (1984). The Internet is no exception, and postings on it must be judged in reference to the already flexible considerations which fair use affords. Purpose and Character of the use: The first fair use factor is the purpose and character of the use made by the alleged infringer. 17 U.S.C §107 (1). Lerma posits that his use of the Works falls within several of the classic fair. use categories listed in the first paragraph of §107, namely, that his copying and posting of the Works constitutes "criticism, "comment, "news reporting", and "scholarship. "3 here is a strong presumption that factor one favors the defendant if an allegedly infringing work fits the description of uses described in section 107." Wright v. Warner Books, Inc J 953 F.2d 731, 736 land Cir. 1991). Lerma argues that his Internet posting of the Fishman Declaration originated from publication of information in a California court record that was open to the public and which the court refuted ho seal. Lerma asserts that he merely gathered that information like a news reporter and then published it on the Internet to unveil for the Internet community the "foibles" of Scientology In the same spirit of the modern news expose. This analogy fails. The full record clearly shows that Lerma's motives, unlike those of news reporters, were not neutral and that his postings were not done primarily 'for public benefit. , 677 F.2d 180, 182 (2nd Cir. l98l)+ When 10

judged in light of the degree of copying and the use to which the infringing material was ultimately put, Lerma stands in a position significantly different from the Washington Post and its employees earlier dismissed from this suit Even if Lerma were a newspaper reporter, the mere fact that a copyrighted Document was in a public court file

in no respect destroys its copyright protection. Lerma also describes himself as a dedicated researcher delving into the theory and scholarship of Scientology. He claims to be performing academic work of a "trwasformative"` nature, providing materials which "add new value to public knowledge and understanding, thereby advancing the goals of copyright as set forth in the Constitution." Opp' Br. at 24. That argument does not justify the wholesale copying and republication of copyrighted material The degree of copying by Lerma, combined with the absence of coommentary in most of his Internet: postings, is inconsistent with the scholarship excepti on . Even assuming, arguendo, that Lerma's copying to his hard drive was done solely in the name of academic research, this does not end the fair use analysis. Such uses are only "presmptively" permissible; there is a limit to the extent of reproduction that can be undertaken even by the bonafide researcher. See America.Geophysical Union v Texaco, Inc., 802 F,Supp. I, 17 (S.D N Y" 1992), aff'd .,60 F.3d 913 (2nd Cir 1994)(archival photocopying of scientific journals for interna1 use by for-profit research laboratory and is not fair use) See also Marcus v. Rowley, 695 F.2d 1171, il76 (9th Cir. 1983 ) ("[W]holesale copying of copyrighted material precludes

application of the fair use doctrine,), 3 dimmer §§ 1305[A] [3] (1996) (" [Generally] it May not consttute a fair use if the entire work is reproduced" Lerma argues that his "research" conducted via downloads from newsg;roups on the Interet provides a particularly strong arsumert for fair use. Because newsgroup output is by its nature ephemeral, Lerma sserts that saving such postings for later review is indistinguishable from the temporary storage on a VCR tape that was upheld by the Supreme Court in Sony Corp. of America v lJniversal Studios, Inc., 464 U*. 417 (1984) Lerma' analogy fails because the " -time- shifting" approved in Sony concerned the reproduction of television programs that were implicitly licensed at no charge to the viewer who then copied them for purposes of convenience. These critical factors are absent in the instant 'case. Lerma is not licensed to view or copy the Works, and his reproduction of the Works on his disc served purposes beyond convenience. The proper analogy of Lerma to Sony would be if the Sony defendant obtained unauthorized copy of television movie from a premium cable channel and then re-broadcast that movie on public access channel' something that would be clearing prohibited. It may be true that Lerma' s intent in posting the Works was not "commercial" in the traditional sense. He was not in direct competition with the church, and he did not place a surcharge on, or receive any other 'private commercial gain" from, the information: contained wethin the Works [under the fair use doctrine, conmercial use of an allegedly infringing works

disfavored whereas noncommercial use is not. See Sony Corp, 464 US at 449. Nonetheless, while there ts no stridence that Lerma has profited directly from the postings, this factor alone is not do tive of the fair use .'s`;ue n [T]hot7gh it xs si=fcant factor, whether the profit element of the fair use calculus affects the ultimate determination of whether there is fair use depends on the totality of the factors considered, it is nct itself controlling. n Ropers fir, Koons, 96O F 2d 301, 309 (2nd Cir. 1992) In viewing the totality of factors discussed above, the Court finds that the noncommercial character of erma's copying and posting does not outweigh Lerm's nonneutral and non-scholarly motives in pblshg the Works Nature of the Copyrighted Work: The second factor for consideration under the fair use analysis is the nature of the copyrighted work. 17 O.S.C.A §107 (a), "This factor calls for recognition Chat some works are closer to the core of intended protection than others, with the consequence that fair use is more difficult to establish when the former works axe copied Campbell v" Acuff-ose Mumbo' Inc., 510 O.S. 569, SSS (1994* In opposing RTC's Motion for Summary Judgment, Lerma relies upon two aspects of the Works which favor his position: 1) the factual. vs. the creative nice of ache Works, and 2) Shed r puL:Licato;a status. The fair use defense is broader with respect to factual works than to creative or literary works. "The law generally recognizes a greater need to disseminate factual works than works of fiction

or fantasy " Harper & flow Publishers, Inc . v. Nation 13ntep:ci::es, 471 U.S. 539, 563 (ADDS). Eubard's works are difficult to classify in this respects and courics dealing with this issue have differeq in their conclusion. As the Second Circuit stated in New E:a publications Into 1 V- Carol Publishing GROUP' 904 F. 2d 152, 158 .... (field cur I9S9), cert. denied, 493 S ;094 (1990), "reasonable people clan disagree over how to classify Hubard's works. n In the case Tic bat:, however, RTC has characterizeci the Works as training materials, stressing their us , li by over their creativi by The C:ourt has peeve ously resolved this question by holding that the Works are Ended to be informational rather than creative'' and that a broader fair use approach is therefore appropriat e in th:Ls regard Religious Technology Center Lerma, 908 F Supp. 1362, 1367 (D Va. lS9S). rerma's second argument regarding the nature of the copyrighted Works pertains to their publication status. Courts have consistently found that "the scope of fair use is narrower with respect to unpublished works," New Era Publications v. Carol Publishing Group, 904 F.2d 152, 157 (and Cir. l9gO)(quoting Harper & Row, Publishers Inc . v. Nation Enterprises' 471 O.S. S39, 564 (1985). The Works in question clearly have not been "published." RTC has not released these materials to the public and does not plan to release them Nevertheless, Lerma insists that for purposes of a fair use analysis the berm "publication" means "whether the work has been widely disseminated or is widely available, regardless of technical publi¢on'." Oppose Brat 41 14

(citing Harper Row, 471 O.S at S55)(ephasis in original) Because much of the materials which he copied and posted to the Internet were already available in an open court file or on the Internet, Lerma asserts that they are Deserving of less protection because he has not usurped RTC's right to first publication Lerma's reliance upon the argument is not convincing. Although Harper & Row weighs the Ado [acto publication . or dissemination" of a work in determining whether another's utilization of the material constitutes fair use, this only applies where the author has given ''implied consents through such action as performance or dissemination. 471 u.S. at 551 n t h 0 s e circumstances, the author has made the work publicly available and has implicitly invoked his right to first publication. The copyright owner is denied this opportunity when actions of a third party usurp the right to first publication, as happened both in Harper Row and in this case. Posting without the owners consent cannot constitute a "first publication" under fair use principles Lerma also argues that the unpuhlif;hed sta t;us of the Works is entitled to even less weight because the RTC never intends to publ Ash them . He claims that the "central purpose of dint hi shing between disseminated and Audi Inseminated works : :3 to preserve for the author the commercial value of the right to first publication " Opp'n Br. at 44. Relying on Hrue;c v. Row, Lerma suggests that where copyright owner intends never to exploit the right of f irst publication' the need to protect that right diminishes and the scope of fair use correspondingly expands. 15

Lerma misrez`ds his authorities on this point. Harper Row clearly recognizes thy n [fiche right of first publication encompasses [Olson the choice whether to publish at all. n 471 U. . at 564. See also salincrer v. Random House, Inc:., 811 F.2d go, 98 (end Cir. 1987) (Potential harm to value of plaintiff, s works nis tOt lessened by the fact that their Author has disavowed any intention to publish them during his lifetime . . . th] e is entitled to protect his opportunity to sell his letterer ) . This approach not il. ogica Thus, while the factual nature of the Works weighs in -Lerma, I; favor, the unpublished nature of the Works and RTC's inception to keep the Works npubli`;hed weigh against him. As held in Harder & Row, 471 0,9. at 564, n [t^] he facet that work :s publ d ___ critical element of: its 'nature.'" Unpublished works "normally enjoy complete protection against copying any protected expression.It caliper v. Random :EIouse, Inc., 811 F.2d 90, 97 (2nd Cir. 198?) On balance, the second fair use factor hips in favor of RTC. Amount and Substantiality of Copying: The third factor addresses the amount and substantiality of the portion copied by the defendant in relation to the copyrighted work as a whole. 17 [r.s.c. §07 (3) ''There are no souse rules is to how much of copyrighted work may be copied and still be considered a fair use t' Maxtone Graham v Burtchaell, 803 F.2d 1253, 1263 (and Cir. 1966) This factor has both quantitative and qualitative components, so that courts have found use to be unfair where the quoted 16

materials formed substantial percentage of the copyrighted work or where the quoted material was "essentially the heart of" the copyrighted work. New Era Publications v. Carol Publishing Group, 904 F.d 152, IS8 (2nd Cir lotions omitted). The parties dispute whether bee segments excerpted by Lerma represent "the heart of" the Works under the qualitative component. The Court is unable to evaluate this component because many of the copyrighted materials are incomprehensible However' because the uanihative analysis weighs so overwhelmingly in RTC's favor, it is not necessary to make this qual'tative evaluation. The 33 exhibits in RTC's G-Series Exhibits indicate extensive copying aLnd posting. A majority of these 33 exhibits contain verbatim copy ng, as if Lerma obtained the copyrighted materials and summarily transferred them nto ciberspace. In many cases, Lerma uploaded a complete, self-contained OT Document with reco:Lizable beg:Lng, }Cody, and end over cwo-ds of the GSeries Exhibits represent virtually a total reproduction of the work on file at the Copyright Office. The wholesale copying of copyrighted material often precludes the application of the fair use doctrine Marcus v Rowley, 6 9S F.2d }171, 1176 lath Cir 1983) (citations omitted). Such blatant reproduction has been prohibited even in the context of educational ntructon. See, e.q., Wihtol v. Crow, 309 F.2d 777, 780 (8th Cir 1962) (nwhateer may be the breadth of the doctrine of Fair use', it is not conceivable to us that the copying of all, or substantially all, of a copyrighted song can be held to be a 'fair 17

use, merely because the infringer had no intent to infringers, Bucyclopeda Britannica Educational Cord. v. Crooks, 447 F.Supp. 243 (W..N.Y 1978) (although defendants were involved in noncommerc is 1 educational copying of films to promote science and education, the taping of entire copyrighted films was too excessive for the fair use defense to apply). Lerma opposes RTC's percentage calc,.,latons by arguing a Different interpretation of what represents the "whole" copyrighted work as defined under §107(3. RTC has registered the OT Documents with the copyright office in hatches as part of a.series. Lerma argues that the "whole" work refers to the entire series listed on reg,traton certificate, while RTC argues that the term refers to each component of these copyrighted series. Thus, where RTC registered on one form the OT III collection of documents A, B. C, D , & E , Lerma asserts that all five documents constitute the "whole copyrighted work" for purposes of comparison, whereas RTC maintains that each sdEpart constitutes awhile copyrighted work. n Whether or not the "whole copyrighted work" is viewed as the entire collection (as Lerma prefers) ox as the individual works (as RTC prefers) is critical to the fair use assessment, and indeed may be the determining factor. Under RTC's interpretation, '! Lerma copied document A in toto he performed a 100% copy. Onder Lerma's luterpretation, the same action among ts to copying only a small portion of a larger work In this way Lerma maintains that he reproduced only 13 of 213 pages from OT TI, 2S of 326 pages of OT IIl, 12 of 30 pages from "the Power," and 10 of 350 pages of the 18

NOT's. Opp'n Br. at 47 RTC' s approach is supported by ache Code of Federal Regulations) which states inter alla Chat the following shall be considered s, ngle works: In the case c>f unpub1 ished works: all c:opyr girdle elements that fare otherwise recognizable as se] f-ontained works, and are comb}' ned in single unpublished '' col lec t' on " 37 C.F R. 5202.3 (b) (3) (B) . That subsection proceeds to list the factors to be used in determining whether a set of works can be ccn`;,derecl i'collect:a, '. including: 1) are flue elements a;sembled in an orderly robin; 2) do they bear single to tle identifying them as whole 3) is the copyright claimant the same in each of the els anti n the collection a whole; anal 4 are the elements by tube same author . Id . When udged by tines e f ac tore r W13: f ind that the works i s sue - 1 _ in this case are combined in " collections " and that each subpart must be con:;:idered " single work" for the purposes of fair use n lysi s Courts have followed this approach and found that components of c. Collection" constitute single works for fair use purpos;es. In Szaho v. Errison, 68 ad 940 (5th Clr" 1995), the court granted copyright protection to the component elemen ts of collection of recordirlgs despite tbe fact that the elements were not individually liE;tecl on the copyright registration. RTC' s claim is even stronger because it undertook Eon individualized listing. See also Hll$1er zne v. Moral Morley, 796 F.2d 14 4S, 1154 (9th Cir. 1986) 9

("telach component of a composite work is capable of individual copyright protection and need not bear a separate copyright notice"); American Geophyic.1 Onion v. Texaco, 802 F Supp. lr 17 (S.D,N.Y. lg92(each article within copyrighted olrnal constituted single work for fair use purposes). Although Lerma did not post the entirety of OT II, OT III, NOT's, or Power, he did post the entirety of certain discrete subparts of these series. Under the Code of Federal Regulations and under case law, these subparts constitute single works Id are the benchmark against which to compare Lerma' s actions Following this analysis, Lerma' s infrinSement is clear. As a final defense under this fair use factor, Lena urges this Court to consider the Ite=net post` ngs in their unique newsSrroup context Rather than viewing Mach individual posting in isolation, Terms contends that each posting must be considered within the context of the ongoing Dialogue he has conducted on the newegroup. The qualitative analysis would then include the multiple communications posted before and after the alleged inf ringements, communications which are likely to contain greater commentary once analysis chars the posts ngs at ague Thi s approach would perm:L t a would- be inf ringer to participate in blatant theft of a copyright yet still escape punishment via the subsequent posting of subsequent commentary -- a commentary that may not always be seen in tandem with the infringing work. Under this argument n cyberbandits " could easily cover their tracks. The third fair use factor therefore weighs heavily against 20

Lerma. His direct copying and posting of certain "single works" registered within collections, almost tonally devoid of discussion and commentary, nearly are sufficient to preclude a fair use defense Effect on The Market of The Copyrighted Work; The fourth and find part of the fair use defense considers the e

f feet which the allegedly infringing use had on the potential marketfor, or value Of, the copyrighted work. 17 U.5.A. 5107. Courts have frequently dentif fed this as the most important element of a fair use analysis. See, e q., flapper Row, 471 O.S. at 566; New Era Publications v" Carol.. Pub. Group, 9Od F Ed 1S2, }EiD (2nd Cir legal. However, the 1967 Mouse Report cautions that it "must almost always be judged in condonation with the other three criteria " Marcus v. Rowley, 695 F..2d 1171, 1177 (9th Cir 1983)(citig H.R. Rep No. 83, POth Cong , 1st Sess. 33, 3D (1967) Lerma correctly argues that any economic harm befalling the Church of Sctento}ogy as result of legitimate commentary is permissible under the fair use doctrine The Supreme Court found in Campbell v. Acuff-Rose Music' IT , 510 S. at Sg? (1994), that we must " din t inguish between ' Hi] iting criticism [that merely] suppresses demand [and] copyright infrngement[, which] usurps it's (brackets in orginal)(citatiou omitted) It is extremely difficult to actress the issue of market impact in this case because it is unlikely that excerpts of the Works posted by Lerma thus far, although substantial, would provide a sufficient basis for would-be parishioners to defect from Scientoloty. However, 21

RTC's inability to prove a decrease `n Scientology enrollment does not justify Lerma's actions:. "The mere absence of measurable pecuniary damage does not require a finding of fair use." Marcus v, Rowley Ego F.2d 1771, 1177 lath cur 1983). The potential for economic harm to RTC must also be considered. "[The negate fair use one need only show that f the 'challenged use should become widespread, it would adversely affect the potential market for the copyrighted work'." Haruer & Row, 471 S. at 568 (citing SonY Come ___f America =. Universal city Studios, Inc., 464 U.S. at 451). RTC correctly notes that substantial expansion of Lerma's current activities presents an identifiable risk of harming RTC. In Bridge Publication, Ino. v. Vien, 827 F.Supp. 529, 633 (S.D.Cal 1993), the court found such risk in another case involving the Chubb of Scientology. In Vien' unpermitted copying of RTC's literary works and sowed recordings was held to violate copyright law in part because the copies fulfilled the demand for the original works and diminished or prejudiced their potential sale. Id at 636. The infringer in Vien actually competed with the Church of Scientoloy. RTC argues that Lerma poses some competitive risk to RTC, supports this argument with a communication which states that the "Ep]blic are [sin] encouraged to use a workable technology . . . The complete works of all clearing practitioners are made available to all with desire and courage to apply them. Franchises flourish . . " Ex ho Fifth L Decl. Overall, however, RTC in this case are far too speculative.

RTC is able to present specific, identifiable evidence of the effect that Lerma's postings: hare had or could have ore the church of Scientology, and cannot establish talc rerma is o'?erating as a direct competitor of the church. Thus, the Court f inds that the fourth fair-use factor tips slightly n l`erE`' favor Fair Dee Snmmasy: Eased upon the Four statutory factors l' st:ed in 5107 for evaluating Ache fair use defense, the Court finds that Lermas s copying and posting of Due Works does not constitute fair 11S Misuse of copyright Lerma next: Argues that even xE h's copying Ad publc:'ons on the Internet: are At protected by the fair use de:tense, Phi s Court: should nevertheless grant scary judgment in his favor because RTC has misused its copyright" The misuse of copyright doctrine is an affirmative defense to copyright infringement. Its Coal is to prevent the owner of a copyright from improperly utilizing the legal rights: granted to it Aver the copyright laws Lerma is correct that n [] successful defense of misuse of copyright bars culpable plaintif f f ram preva, 1' ng on an acts on f or inf ringement of the me s:used copyright. hseqomb America, ]:nc v. Reolcls, 911 F. Ed 97D,, 972 (4th C:ir iggO) . Lerma argues two bee: for his; me Ruse clad m Fur rst, he quest, ons: the boa;' fides of RTC' s copyright infr, ngement 1CLW suit, arguing that RTC, s true obey ec:tive was the impoundment of Lerm ' s computer-related materials. Lerma maintains that RTC exercised its 23

options under the Copyright Act as mere pretense for gaining access to his computer files, thereby allowing them to tromp{] through" his personal materials Ad investigate And intimidate other RTC critics. Second, Lerma alleges that RTC utilizes its copyrights and the litigation process generally "as means to harass, burden, and punish Mr Lerma for his criticism of Scientology. n Even assuming arquendo that such motivations were part of RTC's litigation strategy, that does not constitute misuse of copyright. Misuse of copyright applies where the copyright owner tries to extend the copyright beyond its intended reach, thereby augmenting the physical scope of copyright protection. It typically arises in situations where it is alleged that the copyright owner projected his unique rights in a work onto other, unrelated products or services. See .c:, asercomb, 911 F 2d 970 (ash Cir. l9O)(de££ense of misuse upheld against plaintiff who attempted to extend control of its lawfully copyrighted material through the use of a 99-year licensing agreement) ; Service Training, Ina, v. Data_General Corp., 963 F 2d SB0 (4th Cir. 1992)(alleged misuse of copyright by premising availability of computer programs on defendant's use of plaintiff's computer repair services); Electronic Data Systems v. Computer Associates, 802 F*Supp 1463 (N..Tex, l992)(allege misuse by tying the purchase of copyrighted software to other products); United Tel. Co. of Mo. a. Johnson Pub. Co+, Inc., 855 F.2d 604 (8th Cir. l988alleged _ misuse by requiring that plaintiff purchase entire customer list

rather than the copyrighted subset requested by plaintiffs As these cases demonstrate, misuse is somewhat analogous to the prohibition against tying" in patent law. Because copyright is intended ho protect only those works containing the requisite inertia of creativity and originality, casting the shadow of its virtual monopoly onto other unprotected works would constitute a m`e.' The defense of misuse of copyright has also arisen in circumstances where the plaintiff attempted to restrain defendant from using material over which the plaintiff itself had no rights, 0. Ins. van y_=e, inch, 770 F.Supp. 1261 (*Ill. 1991), where the plaintiff distributed the. copyright in an allegedly Discriminatory manner, Supermarket of Homes, Inc. v. San Fernando Valley Board of Realtors, 786 F.2d 1400 (9th Cir" 1986), or where the copyright owner refused to supply a list of copyrighted songs as requested by the defendant, ,T,mpo Music, Inc v. Myers, 407 F,2d 503 (4th car. 1969) In each of these cases, the misuse concerns the wrongful use of the copyright powers themselves in ways violative of the Constitution or public policy. In other words, the proponent of the misuse defense must effectively argue that the plaintiff is asserting its copyrights in an Improper or offensive manner not intended by the copyright laws. Such misuse Is quite distinct f rom the legitimate invocation of one's copyright even though prompted by ulterior motives . To misuse capers ght, therefore, the copyright owner must use the copyright in an impermissible way by Extending his] monopoly or

otherwise violatting] the public policy underlying copyright law." National Cable Television v, Broadcast Music, Inc., 772 F.Supp. 614, 652 (Dame. 1991). Terra fails to make such a showing. This is not a case where RTC attempted to assert copyrights it did not own, or where RTC attempLe to tie its copyrights to other products. Lerma's infringement is tnmistakhie, and RTC's opposition is sound. Erg determined that Lerma has violated RTC's rights to the Work=, and having rejected the defenses of fair use and misuse, the Court finds that Lerma has infringed RTC's copyright interest in the Works by posting the O-Seies Exhibits. Imps: and Remedies The Court will now preltm; warily ;acLdlress the appropriate :remedy for Lerma' s infringements. The basis for monetary damages = wn infringement action is set forth in 17 u.S.C. § E94 That section enables copyright owner to seek either factual damages and any additional prof its of the infringer or " statutory dmages. 17 O-5. §504. Actua1 damages any profits are not readily ascertainable n thin case because of a number of factor=, including that Lerma was not selling the infringed material, that he is not direct competitor of the Church of Scientology, and that RTC is unable to show lost profits or Fewer parishioners with any degree of certainty. The Court need not determine actual damages, however, because RTC has indicated its intention to seek only the "statutory 26

minmum damges afforded by the Copyright Act. #2

In determining a final statutory award, the Court must answer three questions: 1) to what degree do the relevant postings (from the G-series Exhibits) infringe RTC's copyrights; 2) how many acts of infringement occurred and 3) to what extent was the infringement willful.

To what extent do the works Infringe -- The Court has reveiwed in detail the allegedly infringing works submitted by RTC in conjunction with its summary judgment motion. Without exception, each of the 33 binders tendered as the G-series Exhibits demonstartes infringements of the RTC's copyrights in the the documents at issue. None of the exhibits can be considered fair use under the analysis above. Lerma's copies typically consist of verbatim copying wholly devoid of criticism or other commentary. Lerma often reproduces the exact text of the copyrighted work so that the two versions are virtually indistiguishable. Some indicia of his direct copying include indentical use of titles, subheadings, section markers, quotation marks, capitalization, hyphenation and underlining.

__________________

2. See Plaintiff RTC's Motion for Summary Judgment for Copyright Infringement Against defendant Lerma at 46, n. 40.

3. The Court initially indicated to the parties that it would entertain supplimental briefing on all damages and remedies issues following the issuance of the Memorandum Opinion. Upon further analysis the Court no longer requires additional argument regarding statutory damages. Supplimental breifs pertaining solely to the award of attorney's fees shall be submitted within 11 days of this Memorandum Opinion.

In addition to these grammatical similarities, rema's postings often reveal identical numbering and leterlug schemes to separate the text. See, e.q., RTC Exs. G-17 G-18. At times the copying goes so far as to reproduce the actual visual layout of the copyrighted text, so that the division of characters their placement into similar columns matches Chat of the copyrighted Work. See, e.q , RTC Ex. G-18. Many exhibits include Lerma's blatant reproduction of L. Ron Hubbard's authorship lore. See, A., RTC, Ens G-26, G-27, & G-28) Several of the disputed Works include band-drawn illustrations which are not produced in Lema's copies. See, em., RTC Exs. G-13. G-21 G-22. These illustrations are omitted from Let's versions of the document, omissions which make his infringement even more glaring because much of Lerma's verbatim text refers to the illustrations that are absent Other omissions which the Court finds parts culpably troubling occur in verbatim copies of certain RTC "bulletins " where terms appears to have transferred everything except the nConfidetial" heading and the copyright markers. See, . eve RTC Exs. G-6 through G-30. The amount and substantially of the relevant sections of the RIC and Lerma documents also support finding of infringement. In the vast majority of exhibits, 100% of Lermas document is simply a direct copy of 100% of RTC's copyrighted document. See, e.q., RTC axe. G-1 through G-13, G-17 though G-l9, G-26 through G-30, G-32 through G-33 when there are slight variances, they appeared to be typographical errors or insignificant word substitutions. In a few 28

cases, the excerpted section of the copyrighted work was significantly less than a total copy, but that section nonetheless constituted the entirety of Lerma's reproduction See, e.q , RTC Exs. G-4, G-15, (:-16, S: -20. If 60% of RTC copyrighted document is copied to form 100% of a terra document, without any

1, 1987); and Exh, bits (G-31 through G-33 arise from the copyright regi s tra Lion enti tl ed " POWER SERIES " ( Copyright Regis try Lion Number TXu 303-386, September I, 1897. If multiple but distinct works are collected and filed together at the Copyright Office under the some registration, they are to be considered a single work f or the purposes of damages. This principle is demonstrated in Stokes Seeds Ltc. v. Geo. W Park Seed Co., Inc.' 783 F.Supp 104 (W D.N.Y. 1991), where each copying of multiple photographs appearing in a seed company' s seedling reference book d` d not constitute A distinct infringing transactions Instead, the court viewed the work as a compilatio constituting "one work" and therefore Justifying a single award of statutory damages:. " Id. at p. ;L07 . Fox the purpose of the damage cal culation, the infringing documents fat issue in this summary judgment motion similarly constitute fe works, not thirty-three. Because statutory damages are to be calculated according to the neither of works infringed and not the number of inf ringements , Walt Disney Co. v. Powell , SS7 F.2d 565' 569 (D.C..cir. 1990), the Court will find only five instances of infringement for the purpc: Yes of calculating damages Willfulness - This court declines to impose increased statutory damages for willful violation. 'An infringement is 'willful' if the infringer knows that its conduct is an infringement or if the infringer teas acted in reckless disregard of the co;?yrighh owner's right". Video Views Inc. v. S:`cudio 21 Ltd. 925 F.2d 1010 1020 r . 30

(7th Cir. 1991), cert denied, 502 U.S. 861 (l991), cited in Superior Form Builders, Inc. v. Chase Taxidermy Supply Co., 74 F.3d 488, 496 (ash Cir Add. See also Microsoft. Corp. v. Gray Computer, Slo F.gupp. 1077 (mid 1995)* Lerma's actions do not match those of infringers x cases where courts have found willful violations. In determining whether an infringement was willful, the court in Superior Form Builders considered the infrnger's history of infringement' noting that n the record supports the conclusion that Dan Chase Taxidermy became the largest taxidermy supplier in the country by consistently and deliberately copying competitors' forms

in disregard of the copyright laws.h 74 F.3d at 497. The defendant also falsified a copyrighton his product, a mannequin, and was previously sued a least three times fir copyright infringement. 74 F ad at 497 Finally, the court stressed that Chase had represented in his product catalogs that his products were copyrighted and had therefore taken an inconsistent position at trial that the mannequins were not copyrightable. In contrast, Lerma has no history of copyright infringement and he made no representation that he owned the copyright to the Works, Damages Calculated -- For each instance of non-w,11tul infringement, the Copyright Act enables the Court to award statutory damages of "not less than $SOO or more then $20,000 as the court consider just." 17 O.S.. 9504) (1995. In light of the five instances of infringement which occurred in this case, because the penalty is being assessed against an individual of 31

limited means who has already expended considerable sums in this litigation, And because RTC has indicated its express desire to seek only the statutory minimum, provided its copyrights are protected.4 the Court intends to award the statutory minimum of $5OO for each infringement, for a total statutory award of $2,500 in favor of RTC and against Defendant Lermat, unless the RTC convinces the Court to do otherwise. Conclusion _ For the above - stated reasons, summary judgment on the copyright claim is found in favor of plaintiff, RTC, against defendant berma. The Clerk is directed to forward copies of this Memorandum Opinion to counsel of record and to defendant, pro se .

Entered the s: 4th Day of October, 1996. {signature}Leonie M. Brinkema united States District Judge Alexandria, Virginia . 4) See Plaintiff RTC's Motion for Sumrrary Judgment for Copyright Infringement Against Defendant Lerma, p. 46, n 40 32