Unclaimed Property Recover Serv., Inc. v. Kaplan

Deciding a matter of first impression, the U.S. Court of Appeals for the Second Circuit narrowly held that the author of a copyrighted complaint cannot restrict the future use of the document in the litigation. Unclaimed Property Recover Serv., Inc. v. Kaplan, Case No. 12-4030 (2d Cir. Aug. 20, 2013) (Katzmann, J.)

Unclaimed Property Recovery Service (UPRS) and Bernard Gelb were members of a plaintiff class in a class action. Gelb is not a lawyer but nevertheless prepared the complaint and 305 pages of exhibits. Gelb registered his copyright in these court-filed documents. Norman Kaplan was the class action plaintiffs’ lawyer who signed and filed the pleading. The district court dismissed the suit as time-barred, and Kaplan appealed on behalf of all the plaintiffs. Gelb and Kaplan had a falling out while the appeal was pending. Using new counsel, UPRS and Gelb unilaterally moved to withdraw the appeal, which was granted for UPRS and Gelb only. The case was remanded, and Kaplan filed an amended complaint and exhibits on behalf of the remaining plaintiffs.

In re-filing the case, Kaplan naturally copied significant portions of the complaint Gelb prepared. Gelb sued Kaplan for copyright infringement. The district court dismissed this copyright action, holding that Kaplan had an implied license to use the copyrighted material in the case. Gelb appealed.

The Second Circuit affirmed the dismissal, without resorting to principles of implied license. The Court held that any party or counsel in the litigation, as well as the court, has irrevocable authority to use a copyrighted document after it is first introduced into a litigation with authorization.

The Second Circuit explained that litigation would be hobbled if parties could not freely use copyrighted documents first introduced with authorization. Fair adjudication requires that parties be able to use any documents in the litigation. Fairness would be lost if, in the midst of a case, a party lost the right to use documents already present in the litigation. A contrary holding would give copyright holders—including lawyers who author litigation documents—unfair control over a case.

The Second Circuit explicitly limited its holding to the particular facts before it. The Second Circuit did not suggest that authority is “inevitably needed to use a copyrighted document in litigation.” It did not decide whether legal documents are subject to copyright law in the first instance, whether authority to use copyrighted material in one case may transfer to other cases, or whether the authority to use copyrighted material in the litigation may extend to use outside the litigation.

Practice Note: Once copyrighted material has been introduced into a case with authority from the copyright holder, the material may be freely used in the case by any party thereafter. Although the Second Circuit’s tone indicates that it may expand its holding, the Court took care to limit its holding in this case.