THREE BOYS MUSIC CORP. v. BOLTON 477 Cite as 212 F.3d 477 (9th Cir. 2000) IV. of substantial similarity was not clearly erroneous; (3) defendants did not rebut We find no violation of Ferdinand’s right presumption of copying with evidence of to effective assistance of counsel or any violation of the Ex Post Facto Clause, and independent creation; (4) jury could find therefore Ferdinand’s § 2254 petition was that plaintiff deposited complete copy of properly denied. Accordingly, we affirm song with copyright office; (5) jury’s attri- the judgment of the district court. bution of profits was not clearly erroneous; (6) record company was not entitled to deduct its Net Operating Loss Carry-for- ward (NOL) in connection with award of , profits; and (7) defendants were not enti- tled to new trial. Affirmed.

THREE BOYS MUSIC CORPORA- 1. Copyrights and Intellectual Property TION, Plaintiff–Appellee, O51 Copyright plaintiff must prove (1) v. ownership of the copyright; and (2) in- , individually and fringement, meaning that the defendant d/b/a Mr. Bolton’s Music, Inc.; An- copied protected elements of the plaintiff’s drew Goldmark; Non–Pareil Music, work. Inc.; Warner–Chappell Music Limit- 2. Copyrights and Intellectual Property ed; Warner–Tamerlane Publishing 83(3.1) Corp.; WB Music Corp.; and Sony O Music Entertainment, Inc., Defen- Absent direct evidence of copying, dants–Appellants. proof of copyright infringement involves fact-based showings that the defendant Nos. 97–55150, 97–55154 had access to the plaintiff’s work and that United States Court of Appeals, the two works are substantially similar. Ninth Circuit. 3. Federal Courts O763.1 Argued and Submitted Oct. 5, 1999 The standard for reviewing jury ver- dicts generally is whether they are sup- Filed May 9, 2000 ported by substantial evidence, that is, such relevant evidence as reasonable Copyright holder brought action minds might accept as adequate to support against coauthors of song entitled ‘‘Love is a conclusion. a Wonderful Thing,’’ as well as against 4. Federal Courts O844 coauthors’ record companies and music The credibility of witnesses is an issue publishing companies, alleging infringe- for the jury and is generally not subject to ment of plaintiff’s song of the same name. appellate review. The United States District Court for the Central District of California, Lourdes G. 5. Copyrights and Intellectual Property Baird, J., entered judgment upon $5.4 mil- O83(6) lion jury verdict for plaintiff, and defen- Jury finding that defendant coauthors dants appealed. The Court of Appeals, of accused song ‘‘Love is a Wonderful D.W. Nelson, Circuit Judge, held that: (1) Thing’’ had access to plaintiff’s copyrighted jury’s finding that defendant coauthors song of the same name was supported by had access to plaintiff’s work was sup- substantial evidence in plaintiff’s infringe- ported by substantial evidence; (2) finding ment action, including evidence that defen- 478 212 FEDERAL REPORTER, 3d SERIES dants were teenagers interested in plain- on objective criteria and often requires tiff’s style of music when plaintiff’s song analytical dissection of a work and expert was played on radio and television over 20 testimony, and, once the extrinsic test is years earlier, and that, while writing ac- satisfied, the factfinder applies the intrin- cused song, one coauthor believed he may sic test, which is subjective and asks have been copying someone else’s song. whether the ordinary, reasonable person would find the total concept and feel of the 6. Copyrights and Intellectual Property works to be substantially similar. O83(3.1) Proof of access to a copyrighted work, 11. Federal Courts O860 for purposes of infringement claim, re- Court of Appeals will not second- quires an opportunity to view or to copy guess the jury’s application of the intrinsic plaintiff’s work. test for proving substantial similarity be- 7. Copyrights and Intellectual Property tween a copyrighted work and an allegedly O83(3.1) infringing work, and Court will not reverse Circumstantial evidence of reasonable factual determinations regarding the ex- access to a copyrighted work is proven in trinsic test for substantial similarity absent one of two ways, for purposes of an in- a clearly erroneous application of the law. fringement action: (1) a particular chain of 12. Copyrights and Intellectual Property events is established between the plain- O83(3.1) tiff’s work and the defendant’s access to Jury may find a combination of unpro- that work, such as through dealings with a tectible elements to be protectible under publisher or record company, or (2) the the extrinsic test for proving substantial plaintiff’s work has been widely dissemi- similarity between a copyrighted work and nated. an allegedly infringing work because the 8. Copyrights and Intellectual Property over-all impact and effect indicate substan- O83(3.1) tial appropriation. Under ‘‘inverse ratio rule,’’ court re- 13. Copyrights and Intellectual Property quires a lower standard of proof of sub- 83(6) stantial similarity on a copyright infringe- O ment claim when a high degree of access is Jury finding that defendant coauthors’ shown. accused song ‘‘Love is a Wonderful Thing’’ See publication Words and Phras- was substantially similar to plaintiff’s copy- es for other judicial constructions righted song of the same name was not and definitions. clearly erroneous, in light of testimony of 9. Copyrights and Intellectual Property plaintiff’s expert musicologist that the O83(3.1) songs shared combination of five unprotec- In the absence of any proof of access tible elements, including the title hook to a copyrighted work, a plaintiff can still phrase, shifted cadence, instrumental fig- make out a case of infringement by show- ures, verse/chorus relationship, and fade ing that the works were strikingly similar. ending. 10. Copyrights and Intellectual Property 14. Copyrights and Intellectual Property O83(3.1) O83(1) Proof of the substantial similarity of a By establishing reasonable access and copyrighted work and an allegedly infring- substantial similarity, a copyright plaintiff ing work is satisfied by a two-part test of creates a presumption of copying, and the extrinsic similarity and intrinsic similarity: burden shifts to the defendant to rebut the extrinsic test initially requires that the that presumption through proof of inde- plaintiff identify concrete elements based pendent creation. THREE BOYS MUSIC CORP. v. BOLTON 479 Cite as 212 F.3d 477 (9th Cir. 2000) 15. Copyrights and Intellectual Property 19. Copyrights and Intellectual Property O83(6) O87(1) Defendant coauthors of song ‘‘Love is In establishing an infringer’s profits, a Wonderful Thing’’ did not establish, as the copyright owner is required to present matter of law, independent creation of proof only of the infringer’s gross revenue, song, and thus did not rebut presumption and the infringer is required to prove his of copying established by evidence of ac- or her deductible expenses and the ele- cess and substantial similarity to plaintiff’s ments of profit attributable to factors oth- copyrighted work of the same name; de- er than the copyrighted work. 17 fendants’ work tape revealed evidence that U.S.C.A. § 504(b). one coauthor believed he may have been copying someone else’s song, defendants’ 20. Copyrights and Intellectual Property history of songwriting did not relate to O87(2) case at hand, and contributions to song Record company was not entitled to allegedly made by defendants’ arranger deduction of its Net Operating Loss Car- were described by defense expert as ‘‘very ry-forward (NOL) in connection with common.’’ award of profits for copyright infringe- 16. Copyrights and Intellectual Property ment, even if individual writers of accused O50.10 song were permitted to deduct income tax- es and management fees that they paid Alleged differences between sheet mu- relating to song; company had never actu- sic deposited with the copyright office and ally paid income taxes on its infringing recorded version of copyrighted song did profits, but claimed it offset nearly $1.7 not preclude jury’s finding that complete million in taxes on the infringing profits copy was deposited, as required by statute, against its parent company’s NOL. 17 as there was no intent to defraud and U.S.C.A. § 504(b). prejudice, and any inaccuracies in the de- posit copy were minor and did not bar 21. Federal Courts O825.1 copyright holder’s infringement action against writers of accused song. The district court’s denial of a motion for a new trial is reviewed for an abuse of 17. Copyrights and Intellectual Property discretion, and the abuse of discretion O75 standard applies particularly when the dis- Absent intent to defraud and preju- trict court’s denial is based on the motion’s dice, inaccuracies in copyright registra- untimeliness. Fed.Rules Civ.Proc.Rule tions do not bar actions for infringement. 60(b), 28 U.S.C.A.

18. Copyrights and Intellectual Property 22. Federal Civil Procedure O2351, 2353 O87(1) Defendants in copyright infringement Jury’s attribution of profits in copy- action were not entitled to new trial based right infringement action brought by hold- on alleged discovery of new evidence that er of copyright in song ‘‘Love is a Wonder- another musical group claimed authorship ful Thing’’ against defendant writers of of copyrighted song that was subject of song of same name, finding that 28% of plaintiff’s infringement suit, as evidence, if profits from album on which song was true, at most went to weight and credibili- included were derived from that song, and ty of the evidence before the jury, and, that 66% of song’s profits resulted from although defendants knew about new evi- infringing elements, was not clearly erro- dence before deadline for post-trial mo- neous, despite defendant’s evidence that tions, they did not immediately notify the attribution percentages were lower. district court. 480 212 FEDERAL REPORTER, 3d SERIES 23. Copyrights and Intellectual Property ’ song; (2) sufficient evidence sup- O83(3.5) ported the jury’s finding that the songs Registration is prima facie evidence of were substantially similar; (3) subject the validity of a copyright, and this pre- matter jurisdiction existed based on the sumption can be rebutted by the defen- Isley Brothers registering a complete copy dant’s showing that the plaintiff’s work is of the song; (4) sufficient evidence sup- not original. 17 U.S.C.A. § 410(c). ported the jury’s attribution of profits to the infringing elements of the song; (5) Sony Music could not deduct its tax liabili- Robert G. Sugarman, Weil, Gotshal & ty; and (6) the appellants’ motion for a Manges, New York, New York, for the new trial based on newly discovered evi- defendants-appellants. dence was unwarranted. Russell J. Frackman, Mitchell, Silber- We affirm. berg & Knupp, Los Angeles, California, for the defendant-appellant. I. BACKGROUND Pierce O’Donnell, O’Donnell & Shaeffer, , one of this country’s Los Angeles, California, for the plaintiff- most well-known groups, appellee. have been inducted into the Rock and Roll Hall of Fame. They helped define the soul John P. McNicholas, McNicholas & sound of the 1960s with songs such as McNicholas, Los Angeles, California, for ‘‘Shout,’’ ‘‘,’’ and ‘‘This Old the plaintiff-appellee. Heart of Mine,’’ and they mastered the Louis Petrich, Leopold, Petrich, & funky beats of the 1970s with songs such Smith, Los Angeles, California, for amici, as ‘‘Who’s That Lady,’’ ‘‘Fight the Power,’’ Recording Industry Association of Amer- and ‘‘It’s Your Thing.’’ In 1964, the Isley ica, Inc. and Motion Picture Association of Brothers wrote and recorded ‘‘Love is a America, Inc. Wonderful Thing’’ for United Artists. The Isley Brothers received a copyright for Appeals from the United States District ‘‘Love is a Wonderful Thing’’ from the Court for the Central District of Califor- Register of Copyrights on February 6, nia; Lourdes G. Baird, District Judge, 1964. The following year, they switched to Presiding. D.C. No. CV–92–01177 LGB. the famous label and had three top–100 hits including ‘‘This Old Heart of Before: FLETCHER, D. W. NELSON, Mine.’’ and BRUNETTI, Circuit Judges. Hoping to benefit from the Isley Broth- D.W. NELSON, Circuit Judge: ers’ Motown success, United Artists re- leased ‘‘Love is a Wonderful Thing’’ in In 1994, a jury found that Michael Bol- 1966. The song was not released on an ton’s 1991 pop hit, ‘‘Love Is a Wonderful album, only on a 45–record as a single. Thing,’’ infringed on the copyright of a Several industry publications predicted 1964 Isley Brothers’ song of the same that ‘‘Love is a Wonderful Thing’’ would be name. The district court denied Bolton’s a hit—‘‘Cash Box’’ on August 27, 1966, motion for a new trial and affirmed the ‘‘Gavin Report’’ on August 26, 1966, and jury’s award of $5.4 million. ‘‘Billboard’’ on September 10, 1966. On Bolton, his co-author, Andrew Gold- September 17, 1966, Billboard listed ‘‘Love mark, and their record companies (‘‘Sony is a Wonderful Thing’’ at number 110 in a Music’’) appeal, arguing that the district chart titled ‘‘Bubbling Under the Hot 100.’’ court erred in finding that: (1) sufficient The song was never listed on any other evidence supported the jury’s finding that Top 100 charts. In 1991, the Isley Broth- the appellants had access to the Isley ers’ ‘‘Love is a Wonderful Thing’’ was re- THREE BOYS MUSIC CORP. v. BOLTON 481 Cite as 212 F.3d 477 (9th Cir. 2000) leased on compact disc. See Isley Broth- ter’s Amended Report about the allocation ers, The Isley Brothers—The Complete of damages (third phase). In the final UA Sessions, (EMI 1991). judgment entered against the appellants, Michael Bolton is a singer/songwriter the district court ordered Sony Music to who gained popularity in the late 1980s pay $4,218,838; Bolton to pay $932,924; and early 1990s by reviving the soul sound Goldmark to pay $220,785; and their mu- of the 1960s. Bolton has orchestrated this sic publishing companies to pay $75,900. soul-music revival in part by covering old They timely appealed. songs such as ’s ‘‘When a Man Love a Woman’’ and ’s II. DISCUSSION ‘‘(Sittin’ on the) Dock of the Bay.’’ Bolton [1, 2] Proof of copyright infringement also has written his own hit songs. In is often highly circumstantial, particularly early 1990, Bolton and Goldmark wrote a in cases involving music. A copyright song called ‘‘Love Is a Wonderful Thing.’’ plaintiff must prove (1) ownership of the Bolton released it as a single in April 1991, copyright; and (2) infringement—that the and as part of Bolton’s album, ‘‘Time, Love defendant copied protected elements of the and Tenderness.’’ Bolton’s ‘‘Love Is a plaintiff’s work. See Smith v. Jackson, 84 Wonderful Thing’’ finished 1991 at number F.3d 1213, 1218 (9th Cir.1996) (citation 49 on Billboard’s year-end pop chart. omitted). Absent direct evidence of copy- On February 24, 1992, Three Boys Mu- ing, proof of infringement involves fact- sic Corporation filed a copyright infringe- based showings that the defendant had ment action for damages against the appel- ‘‘access’’ to the plaintiff’s work and that lants under 17 U.S.C. §§ 101 et seq. (1988). the two works are ‘‘substantially similar.’’ The parties agreed to a trifurcated trial. Id. On April 25, 1994, in the first phase, the jury determined that the appellants had Given the difficulty of proving access infringed the Isley Brothers’ copyright. and substantial similarity, appellate courts At the end of second phase five days later, have been reluctant to reverse jury ver- the jury decided that Bolton’s ‘‘Love Is a dicts in music cases. See, e.g., id. at 1221 Wonderful Thing’’ accounted for 28 per- (affirming a jury’s verdict for the defen- cent of the profits from ‘‘Time, Love and dants in a copyright infringement case in- Tenderness.’’ The jury also found that 66 volving and other musi- percent of the profits from commercial cians); Gaste v. Kaiserman, 863 F.2d 1061, uses of the song could be attributed to the 1071 (2d Cir.1988) (affirming a jury’s dam- inclusion of infringing elements. On May ages award against a defendant in a music 9, 1994, the district court entered judg- copyright infringement case). Judge New- ment in favor of the Isley Brothers based man’s opinion in Gaste nicely articulated on the first two phases. the proper role for an appeals court in reviewing a jury verdict: The deadline for post-trial motions was May 25, 1994. On that day, the appellants The guiding principle in deciding wheth- filed a motion for judgment as a matter of er to overturn a jury verdict for insuffi- law and a motion for new trial. The dis- ciency of the evidence is whether the trict court denied the motions on August evidence is such that, without weighing 11, 1994. On June 8, 1994, the appellants the credibility of the witnesses or other- filed a second motion for new trial based wise considering the weight of the evi- on newly discovered evidence on the issue dence, there can be but one conclusion of copyright ownership. The district court as to the verdict that reasonable men dismissed this motion as untimely. could have reached. On December 5, 1996, the district court Id. at 1066 (internal quotations omitted). adopted the findings of the Special Mas- In Arnstein v. Porter, the seminal case 482 212 FEDERAL REPORTER, 3d SERIES about musical copyright infringement, Nimmer & David Nimmer, Nimmer on Judge Jerome Frank wrote: Copyright, § 13.02[A], at 13–19 (1999); Ja- Each of these two issues—copying and son v. Fonda, 526 F.Supp. 774, 775 improper appropriation—is an issue of (C.D.Cal.1981), aff’d, 698 F.2d 966 (9th Cir. fact. If there is a trial, the conclusions 1982). We have defined reasonable access on those issues of the trier of the facts— as ‘‘more than a ‘bare possibility.’ ’’ Ja- of the judge if he sat without a jury, or son, 698 F.2d at 967. Nimmer has elabo- of the jury if there was a jury trial— rated on our definition: ‘‘Of course, rea- bind this court on appeal, provided the sonable opportunity as here used, does not evidence supports those findings, re- encompass any bare possibility in the gardless of whether we would ourselves sense that anything is possible. Access have reached the same conclusions. may not be inferred through mere specula- Arnstein v. Porter, 154 F.2d 464, 469 (2d tion or conjecture. There must be a rea- Cir.1946). sonable possibility of viewing the plaintiff’s [3, 4] As a general matter, the stan- work—not a bare possibility.’’ 4 Nimmer, dard for reviewing jury verdicts is whether § 13.02[A], at 13–19. ‘‘At times, distin- they are supported by ‘‘substantial evi- guishing a ‘bare’ possibility from a ‘reason- dence’’—that is, such relevant evidence as able’ possibility will present a close ques- reasonable minds might accept as ade- tion.’’ Id. at 13–20. quate to support a conclusion. See Poppell [7] v. City of San Diego, 149 F.3d 951, 962 Circumstantial evidence of reason- (9th Cir.1998). The credibility of wit- able access is proven in one of two ways: nesses is an issue for the jury and is (1) a particular chain of events is estab- generally not subject to appellate review. lished between the plaintiff’s work and the See Gilbrook v. City of Westminster, 177 defendant’s access to that work (such as F.3d 839, 856 (9th Cir.), cert. denied, ––– through dealings with a publisher or rec- U.S. ––––, 120 S.Ct. 614, 145 L.Ed.2d 509 ord company), or (2) the plaintiff’s work (1999). has been widely disseminated. See 4 Nim- mer, § 13.02[A], at 13–20–13–21; 2 Paul We affirm the jury’s verdict in this case Goldstein, Copyright: Principles, Law, in light of the standard of review and and Practice § 8.3.1.1., at 90–91 (1989). copyright law’s ‘‘guiding principles.’’ Al- Goldstein remarks that in music cases the though we will address each of the appel- ‘‘typically more successful route to proving lant’s arguments in turn, we focus on ac- access requires the plaintiff to show that cess because it is the most difficult issue in its work was widely disseminated through this case. Our decision is predicated on sales of sheet music, records, and radio judicial deference—finding that the law performances.’’ 2 Goldstein, § 8.3.1.1, at has been properly applied in this case, 91. Nimmer, however, cautioned that viewing the facts most favorably to the ‘‘[c]oncrete cases will pose difficult judg- appellees, and not substituting our judg- ments as to where along the access spec- ment for that of the jury. trum a given exploitation falls.’’ 4 Nim- A. Access mer, § 13.02[A], at 13–22. [5, 6] Proof of access requires ‘‘an op- Proof of widespread dissemination is portunity to view or to copy plaintiff’s sometimes accompanied by a theory that work.’’ Sid and Marty Krofft Television copyright infringement of a popular song Productions, Inc. v. McDonald’s Corp., was subconscious. Subconscious copying 562 F.2d 1157, 1172 (9th Cir.1977). This is has been accepted since Learned Hand often described as providing a ‘‘reasonable embraced it in a 1924 music infringement opportunity’’ or ‘‘reasonable possibility’’ of case: ‘‘Everything registers somewhere in viewing the plaintiff’s work. 4 Melville B. our memories, and no one can tell what THREE BOYS MUSIC CORP. v. BOLTON 483 Cite as 212 F.3d 477 (9th Cir. 2000) may evoke itTTTT Once it appears that principal ways that Bolton and Goldmark another has in fact used the copyright as could have had access to the Isley Broth- the source of this production, he has invad- ers’ ‘‘Love is a Wonderful Thing’’: ed the author’s rights. It is no excuse that (1) Bolton grew up listening to groups in so doing his memory has played him a such as the Isley Brothers and singing trick.’’ Fred Fisher, Inc. v. Dillingham, their songs. In 1966, Bolton and Gold- 298 F. 145, 147–48 (S.D.N.Y.1924). In mark were 13 and 15, respectively, grow- Fred Fisher, Judge Hand found that the ing up in Connecticut. Bolton testified similarities between the songs ‘‘amount[ed] that he had been listening to rhythm and to identity’’ and that the infringement had blues music by black singers since he was occurred ‘‘probably unconsciously, what he 10 or 11, ‘‘appreciated a lot of Black sing- had certainly often heard only a short time ers,’’ and as a youth was the lead singer in before.’’ Id. at 147. a band that performed ‘‘covers’’ of popular In modern cases, however, the theory of songs by black singers. Bolton also testi- subconscious copying has been applied to fied that his had a ‘‘pretty good songs that are more remote in time. AB- record collection.’’ KCO Music, Inc. v. Harrisongs Music, (2) Three disk jockeys testified that the Ltd., 722 F.2d 988 (2d Cir.1983) is the most Isley Brothers’ song was widely dissemi- prominent example. In ABKCO, the Sec- nated on radio and television stations ond Circuit affirmed a jury’s verdict that where Bolton and Goldmark grew up. former Beatle , in writing First, Jerry Blavitt testified that the Isley the song ‘‘My Sweet Lord,’’ subconsciously Brothers’ ‘‘Love is a Wonderful Thing’’ copied The Chiffons’ ‘‘He’s So Fine,’’ which was played five or six times during a 13– was released six years earlier. See id. at week period on the television show, ‘‘The 997, 999. Harrison admitted hearing Discophonic Scene,’’ which he said aired in ‘‘He’s So Fine’’ in 1963, when it was num- Philadelphia, New York, and Hartford– ber one on the Billboard charts in the New Haven. Blavitt also testified that he United States for five weeks and one of played the song two to three times a week the top 30 hits in England for seven as a disk jockey in Philadelphia and that weeks. See id. at 998. The court found: the station is still playing the song today. ‘‘the evidence, standing alone, ‘by no Second, Earl Rodney Jones testified that means compels the conclusion that there he played the song a minimum of four was access TTT it does not compel the times a day during an eight to 14 to 24 conclusion that there was not.’ ’’ Id. (quot- week period on WVON radio in Chicago, ing Heim v. Universal Pictures Co., 154 and that the station is still playing the F.2d 480, 487 (2d Cir.1946)). In ABKCO, song today. Finally, Jerry Bledsoe testi- however, the court found that ‘‘the similar- fied that he played the song on WUFO ity was so striking and where access was radio in Buffalo, and WWRL radio in New found, the remoteness of that access pro- York was playing the song in New York in vides no basis for reversal.’’ Id. Further- 1967 when he went there. Bledsoe also more, ‘‘the mere lapse of a considerable testified that he played the song twice on a period of time between the moment of television show, ‘‘Soul,’’ which aired in access and the creation of defendant’s New York and probably in New Haven, work does not preclude a finding of copy- Connecticut, where Bolton lived. ing.’’ 4 Nimmer, § 13.02[A], at 13–20 (cit- (3) Bolton confessed to being a huge fan ing ABKCO, 722 F.2d at 997–98). of the Isley Brothers and a collector of The Isley Brothers’ access argument their music. testified that was based on a theory of widespread dis- when Bolton saw Isley at the Lou Rawls semination and subconscious copying. United Negro College Fund Benefit con- They presented evidence supporting four cert in 1988, Bolton said, ‘‘I know this guy. 484 212 FEDERAL REPORTER, 3d SERIES I go back with him. I have all his stuff.’’ Despite the weaknesses of the Isley , Isley’s wife, testified Brothers’ theory of reasonable access, the about that meeting that Bolton said, ‘‘This appellants had a full opportunity to pres- man needs no introduction. I know every- ent their case to the jury. Three rhythm thing he’s done.’’ and blues experts (including legendary Motown songwriter of Hol- (4) Bolton wondered if he and Goldmark land–Dozier–Holland fame) testified that were copying a song by another famous they never heard of the Isley Brothers’ soul singer. Bolton produced a work tape ‘‘Love is a Wonderful Thing.’’ Further- attempting to show that he and Goldmark more, Bolton produced copies of ‘‘TV independently created their version of Guide’’ from 1966 suggesting that the tele- ‘‘Love Is a Wonderful Thing.’’ On that vision shows playing the song never aired tape of their recording session, Bolton in Connecticut. Bolton also pointed out asked Goldmark if the song they were that 129 songs called ‘‘Love is a Wonderful composing was ’s ‘‘Some Kind Thing’’ are registered with the Copyright 1 of Wonderful.’’ The district court, in af- Office, 85 of them before 1964. firming the jury’s verdict, wrote about Bol- The Isley Brothers’ reasonable access ton’s Marvin Gaye remark: arguments are not without merit. Teenag- This statement suggests that Bolton was ers are generally avid music listeners. It contemplating the possibility that the is entirely plausible that two Connecticut work he and Goldmark were creating, or teenagers obsessed with rhythm and blues at least a portion of it, belonged to music could remember an Isley Brothers’ someone else, but that Bolton wasn’t song that was played on the radio and sure who it belonged to. A reasonable television for a few weeks, and subcon- jury can infer that Bolton mistakenly sciously copy it twenty years later. Fur- attributed the work to Marvin Gaye, thermore, Ronald Isley testified that when when in reality Bolton was subconscious- they met, Bolton said, ‘‘I have all his ly drawing on Plaintiff’s song. stuff.’’ Finally, as the district court point- The appellants contend that the Isley ed out, Bolton’s remark about Marvin Brothers’ theory of access amounts to a Gaye and ‘‘Some Kind of Wonderful’’ indi- ‘‘twenty-five-years-after-the-fact-subcon- cates that Bolton believed he may have scious copying claim.’’ Indeed, this is a been copying someone else’s song. more attenuated case of reasonable access Finally, with regard to access, we are and subconscious copying than ABKCO. mindful of Judge Frank’s words of caution In this case, the appellants never admitted in Arnstein v. Porter: ‘‘The judge charac- hearing the Isley Brothers’ ‘‘Love is a terized plaintiff’s story as ‘fantastic’; and Wonderful Thing.’’ That song never in the light of the references in his opinion topped the Billboard charts or even made to defendant’s deposition, the judge obvi- the top 100 for a single week. The song ously accepted the defendant’s denial of was not released on an album or compact access and copyingTTTT [Y]et plaintiff’s disc until 1991, a year after Bolton and credibility, even as to those improbabili- Goldmark wrote their song. Nor did the ties, should be left to the jury.’’ Arnstein, Isley Brothers ever claim that Bolton’s 154 F.2d at 469. In this case, Judge Baird and Goldmark’s song is so ‘‘strikingly simi- heeded Judge Frank’s admonition: lar’’ to the Isley Brothers’ that proof of [T]his Court is not in a position to find access is presumed and need not be prov- that the only conclusion that a reason- en. able jury could have reached is that

1. Marvin Gaye also referred to the song’s Baby.’’ See Marvin Gaye, Too Busy Thinking chorus, ‘‘She’s some kind of wonderful,’’ in About My Baby, on MPG, (Motown 1969). his song, ‘‘Too Busy Thinking About My THREE BOYS MUSIC CORP. v. BOLTON 485 Cite as 212 F.3d 477 (9th Cir. 2000) Defendants did not have access to Plain- subjective and asks ‘‘whether the ordinary, tiff’s song. One must remember that reasonable person would find the total con- the issue this Court must address is not cept and feel of the works to be substan- whether Plaintiff has proven access by a tially similar.’’ Pasillas v. McDonald’s preponderance of evidence, but whether Corp., 927 F.2d 440, 442 (9th Cir.1991) reasonable minds could find that Defen- (internal quotations omitted). dants had a reasonable opportunity to [11, 12] We will not second-guess the have heard Plaintiff’s song before they jury’s application of the intrinsic test. See created their own song. Krofft 562 F.2d at 1166 (‘‘Since the intrin- Although we might not reach the same sic test for expression is uniquely suited conclusion as the jury regarding access, we for determination by the trier of fact, this find that the jury’s conclusion about access court must be reluctant to reverse it.’’) is supported by substantial evidence. We (citations omitted). Furthermore, we will are not establishing a new standard for not reverse factual determinations regard- access in copyright cases; we are merely ing the extrinsic test absent a clearly erro- saying that we will not disturb the jury’s neous application of the law. See id. It is factual and credibility determinations on well settled that a jury may find a combi- this issue. nation of unprotectible elements to be pro- B. Substantial Similarity tectible under the extrinsic test because ‘‘ ‘the over-all impact and effect indicate [8, 9] Under our case law, substantial substantial appropriation.’ ’’ Id. at 1169 similarity is inextricably linked to the issue (quoting Malkin v. Dubinsky, 146 F.Supp. of access. In what is known as the ‘‘in- 111, 114 (S.D.N.Y.1956)). verse ratio rule,’’ we ‘‘require a lower stan- dard of proof of substantial similarity 1. Evidence of Substantial Similarity when a high degree of access is shown.’’ [13] Bolton and Goldmark argue that Smith, 84 F.3d at 1218 (citing Shaw v. there was insufficient evidence of substan- Lindheim, 919 F.2d 1353, 1361–62 (9th tial similarity because the Isley Brothers’ Cir.1990); Krofft, 562 F.2d at 1172). Fur- expert musicologist, Dr. Gerald Eskelin, thermore, in the absence of any proof of failed to show that there was copying of a access, a copyright plaintiff can still make combination of unprotectible elements. out a case of infringement by showing that On the contrary, Eskelin testified that the the songs were ‘‘strikingly similar.’’ See two songs shared a combination of five Smith, 84 F.3d at 1220; Baxter v. MCA, unprotectible elements: (1) the title hook Inc., 812 F.2d 421, 423, 424 n. 2 (9th phrase (including the lyric, rhythm, and Cir.1987). pitch); (2) the shifted cadence; (3) the [10] Proof of the substantial similarity instrumental figures; (4) the verse/chorus is satisfied by a two-part test of extrinsic relationship; and (5) the fade ending. Al- similarity and intrinsic similarity. See though the appellants presented testimony Krofft, 562 F.2d at 1164. Initially, the from their own expert musicologist, Antho- extrinsic test requires that the plaintiff ny Ricigliano, he conceded that there were identify concrete elements based on objec- similarities between the two songs and tive criteria. See Smith, 84 F.3d at 1218; that he had not found the combination of Shaw, 919 F.2d at 1356. The extrinsic test unprotectible elements in the Isley Broth- often requires analytical dissection of a ers’ song ‘‘anywhere in the prior art.’’ The work and expert testimony. See Apple jury heard testimony from both of these Computer, Inc. v. Microsoft Corp., 35 F.3d experts and ‘‘found infringement based on 1435, 1442 (9th Cir.1994). Once the extrin- a unique compilation of those elements.’’ sic test is satisfied, the factfinder applies We refuse to interfere with the jury’s the intrinsic test. The intrinsic test is credibility determination, nor do we find 486 212 FEDERAL REPORTER, 3d SERIES that the jury’s finding of substantial simi- right infringement. This case presents no larity was clearly erroneous. such danger. The Ninth Circuit’s inverse- ratio rule requires a lesser showing of 2. Independent Creation substantial similarity if there is a strong [14] Bolton and Goldmark also contend showing of access. See Smith, 84 F.3d at that their witnesses rebutted the Isley 1218. In this case, there was a weak Brothers’ prima facie case of copyright showing of access. We have never held, infringement with evidence of independent however, that the inverse ratio rule says a creation. By establishing reasonable ac- weak showing of access requires a strong- cess and substantial similarity, a copyright er showing of substantial similarity. Nor plaintiff creates a presumption of copying. are we redefining the test of substantial The burden shifts to the defendant to re- similarity here; we merely find that there but that presumption through proof of in- was substantial evidence from which the dependent creation. See Granite Music jury could find access and substantial simi- Corp. v. United Artists Corp., 532 F.2d larity in this case. 718, 721 (9th Cir.1976). C. Sufficiency of the Deposit Copy [15] The appellants’ case of indepen- dent creation hinges on three factors: the [16, 17] The appellants argue that the work tape demonstrating how Bolton and district court did not have jurisdiction over Goldmark created their song, Bolton and this case because the Isley Brothers failed Goldmark’s history of songwriting, and to register a complete copy of the song testimony that their arranger, Walter Afa- upon which the lawsuit was based. Al- nasieff, contributed two of five unprotecti- though the 1909 Copyright Act requires ble elements that they allegedly copied. the owner to deposit a ‘‘complete copy’’ of The jury, however, heard the testimony of the work with the copyright office, our Bolton, Goldmark, Afanasieff, and Ricigli- definition of a ‘‘complete copy’’ is broad ano about independent creation. The and deferential: ‘‘Absent intent to defraud work tape revealed evidence that Bolton and prejudice, inaccuracies in copyright may have subconsciously copied a song registrations do not bar actions for in- that he believed to be written by Marvin fringement.’’ Harris v. Emus Records Gaye. Bolton and Goldmark’s history of Corp., 734 F.2d 1329, 1335 (9th Cir.1984) songwriting presents no direct evidence (citations omitted). about this case. And Afanasieff’s contri- Bolton and Goldmark argue that in 1964 butions to Bolton and Goldmark’s song the Isley Brothers deposited sheet music were described by the appellants’ own ex- (‘‘deposit copy’’) of ‘‘Love is a Wonderful pert as ‘‘very common.’’ Once again, we Thing’’ that differed from the recorded refuse to disturb the jury’s determination version of the song. Furthermore, they about independent creation. The substan- claimed that the deposit copy does not tial evidence of copying based on access include the majority of the musical ele- and substantial similarity was such that a ments that were part of the infringement reasonable juror could reject this defense. claim. At trial, the Isley Brothers’ expert, Dr. Eskelin, testified that the deposit copy 3. Inverse–Ratio Rule included all of the song’s essential ele- Although this may be a weak case of ments such as the title hook, chorus, and access and a circumstantial case of sub- pitches. Dr. Eskelin even played the de- stantial similarity, neither issue warrants posit copy for the jury on the keyboard. reversal of the jury’s verdict. An amicus We refuse to disturb the jury’s finding that brief on behalf of the recording and motion the Isley Brothers deposited a ‘‘complete picture industries warns against watering copy’’ because (1) there was no intent to down the requirements for musical copy- defraud and prejudice and (2) any inaccu- THREE BOYS MUSIC CORP. v. BOLTON 487 Cite as 212 F.3d 477 (9th Cir. 2000) racies in the deposit copy were minor and the song, and that 66% of the song’s prof- do not bar the infringement action. its resulted from infringing elements. We affirm the jury’s apportionment of D. Attribution of Profits the profits for several reasons. First, the [18, 19] Sony Music claims that the jury instructions adequately conveyed the district court improperly applied an as- burden of proof. Second, the burden of sumption that all profits from Bolton and proof was on Sony Music, and the jury Goldmark’s song go to the Isley Brothers, chose not to believe Sony Music’s experts. and that no evidence supported the jury’s Finally, a jury verdict apportioning less apportionment of profits. A successful than 100% of the profits but more than the copyright plaintiff is allowed to recover percentage estimates of Sony Music’s ex- only those profits that are ‘‘attributable to perts does not represent clear error. infringement.’’ 17 U.S.C. § 504(b) (1994). ‘‘In establishing the infringer’s profits, the E. Deduction of Tax Liability copyright owner is required to present [20] Sony Music also argues that the proof only of the infringer’s gross revenue, district court erred in allowing Bolton and and the infringer is required to prove his Goldmark, but not Sony Music, to deduct or her deductible expenses and the ele- income taxes due to profits from the al- ments of profit attributable to factors oth- bum. Whether income taxes are consid- er than the copyrighted work.’’ Id. See ered ‘‘deductible expenses’’ under § 504(b) also Cream Records, Inc. v. Jos. Schlitz is an issue of first impression in this cir- Brewing Co., 754 F.2d 826, 828 (9th Cir. cuit. The Supreme Court held that willful 1985) (holding that when all profits do not infringers could not deduct income taxes, clearly derive from the infringing material, but it left open the possibility that non- the copyright owner is not entitled to re- willful infringers could deduct their income cover all of the profits); Gaste, 863 F.2d at taxes from the infringing profits. See L.P. 1070 (finding that where there is ‘‘impreci- Larson, Jr., Co. v. Wm. Wrigley, Jr., Co., sion in the computation of expenses, a 277 U.S. 97, 99–100, 48 S.Ct. 449, 72 L.Ed. court should err on the side of guarantee- 800 (1928). The circuits are split over ing the plaintiff a full recovery’’). Thus, whether non-willful infringers such as Bol- the statutory burden of proof lies with ton, Goldmark, and Sony Music can deduct Sony Music to prove what percentage of income taxes from their infringing profits. their profits were not attributable to copy- Compare In Design v. K–Mart Apparel ing the Isley Brothers’ ‘‘Love is a Wonder- Corp., 13 F.3d 559, 567 (2d Cir.1994) (al- ful Thing.’’ lowing the deduction of income taxes) with Sony Music presented evidence that Bol- Schnadig Corp. v. Gaines Mfg. Co., Inc., ton’s ‘‘Love Is a Wonderful Thing’’ pro- 620 F.2d 1166, 1169–70 (6th Cir.1980) (not duced only 5–10% of the profits from his allowing the deduction of income taxes). album, ‘‘Time, Love and Tenderness,’’ and The Second Circuit allowed the deduc- that the song’s infringing elements result- tion of income taxes because if infringers ed in only 10–15% of the profits from the are liable for pre-tax profits, they may end song. The Isley Brothers, however, at- up paying more money than they ever tacked the credibility of one of Sony Mu- received. See In Design, 13 F.3d at 567. sic’s experts. Furthermore, they present- Under the Second Circuit’s rule, the in- ed evidence that Bolton’s infringing song fringer receives a windfall by (1) paying a was the album’s lead single, that it was smaller damages award and (2) deducting released 19 days before the album, and the entire, pre-tax award from gross in- that Bolton engaged in telephone pro- come on a subsequent tax return. The motion of the song. The jury found that Sixth Circuit rejected the deduction of in- 28% of the album’s profits derived from come taxes because the increased pre-tax 488 212 FEDERAL REPORTER, 3d SERIES profits paid to the copyright holder will be (9th Cir.1998). The abuse of discretion balanced out by an eventual tax refund standard applies particularly when the dis- based on the pre-tax award. See Schna- trict court’s denial is based on the motion’s dig, 620 F.2d at 1169–70. Under the Sixth untimeliness. See E. & J. Gallo Winery v. Circuit’s rule, the copyright holder re- Gallo Cattle Co., 967 F.2d 1280, 1294–96 ceives a windfall by receiving a larger, pre- (9th Cir.1992). tax award. [22] Bolton and Goldmark’s second During the third phase of this trial, the motion for a new trial was based on the district court adopted the findings of the discovery of new evidence that disputed special master’s report regarding the de- the Isley Brothers’ claim of authorship. A duction of income taxes. The district day before the deadline for post-trial mo- court followed the Second Circuit rule and tions, the appellees discovered evidence al- allowed Bolton and Goldmark, as non-will- leging that the Turkcords, a group that ful infringers, to deduct the income taxes played with the Isley Brothers in the mid– and management fees that they paid relat- 1960s, claimed to have written the 1964 ing to the infringing song. The district song, ‘‘Love is a Wonderful Thing.’’ Bol- court, however, refused to allow Sony Mu- ton and Goldmark did not immediately no- sic to deduct its Net Operating Loss Car- tify the district court of this new evidence. ry-forward (NOL) because the NOL did Instead, fourteen days after the deadline not have a ‘‘concrete financial impact.’’ for post-trial motions had passed, they We uphold the district court’s decision filed an additional motion for new trial. to allow non-willful infringers to deduct The district court rejected the second mo- income taxes, but not NOL. In this case, tion for new trial as untimely filed. Bolton and Goldmark actually paid income We affirm the district court’s denial of taxes and management fees on the infring- the second motion for new trial because ing profits. Sony Music, however, never the evidence, if true, goes at most to the actually paid income taxes on its infringing weight and credibility of the evidence be- profits. Rather, Sony Music claimed it fore the jury. At trial, Ronald Isley offset nearly $1.7 million in taxes on the claimed to have written the song with the infringing profits against its parent compa- deceased guitar legend, . (As ny’s NOL. No court has ever found that a young man, Hendrix played in the Isley NOL is a deductible expense under Brothers’ band.) The Turkcords’ claims of § 504(b). Furthermore, we find that the authorship are dubious for several reasons. district court’s distinctions between taxes The Turkcords knew about the re-release actually paid and taxes not actually paid of ‘‘Love is a Wonderful Thing’’ by United was a fair one. Thus, we affirm the dis- Artists in 1991, yet they claimed that the trict court’s calculation of a $4,218,838 Isley Brothers had agreed to share the damages award against Sony Music. song’s royalties with them only after hear- F. Second New Trial Motion ing about the damages award in this case on ‘‘Inside Edition.’’ Furthermore, Bolton [21] Finally, Bolton and Goldmark and Goldmark knew about this new evi- claim that the district court erred in re- dence before the deadline for the post-trial jecting their second motion for new trial. motions, yet they did not immediately noti- The district court’s denial of a motion for a fy the district court. new trial pursuant to Federal Rule of Civil Procedure 60(b) is reviewed for an abuse [23] Even if the Turkcords’ claims of of discretion. See Browning–Ferris In- authorship are true, a new trial is not dus. v. Kelco Disposal, Inc., 492 U.S. 257, warranted in the interests of justice be- 278, 109 S.Ct. 2909, 106 L.Ed.2d 219 cause the Isley Brothers’ copyright owner- (1989); Scott v. Ross, 140 F.3d 1275, 1281 ship is not jeopardized. Registration is VONS COMPANIES, INC. v. FEDERAL INS. CO. 489 Cite as 212 F.3d 489 (9th Cir. 2000) prima facie evidence of the validity of a this case, we leave the district court’s deci- copyright. See 17 U.S.C. § 410(c) (1994). sions and the jury’s credibility determina- This presumption can be rebutted by the tions undisturbed. defendant’s showing that the plaintiff’s AFFIRMED. work is not original. See North Coast Indus. v. Jason Maxwell, Inc., 972 F.2d 1031, 1033 (9th Cir.1992). North Coast ’s definition of originality is broad: ‘‘ ‘All that , is needed to satisfy both the Constitution and the statute is that the ‘‘author’’ con- tributed something more than a ‘‘merely trivial’’ variation, something recognizably ‘‘his own.’’ Originality in this context The VONS COMPANIES, INC., means ‘‘little more than a prohibition of Plaintiff–Appellant, actual copying.’’ ’ ’’ Id. (quoting Krofft, 562 F.2d at 1163 n. 5 (quoting Alfred Bell v. & Co. v. Catalda Fine Arts, 191 F.2d 99, FEDERAL INSURANCE COMPANY, 102–03 (2d Cir.1951))). See also Kamar Defendant–Appellee. Int’l Inc. v. Russ Berrie and Co., 657 F.2d 1059, 1061 (9th Cir.1981) (employing a No. 98–56645. broad definition of originality relating to United States Court of Appeals, toy stuffed animals). Ninth Circuit. In this case, the Isley Brothers undoubt- edly contributed something original to Argued and Submitted April 3, 2000 ‘‘Love is a Wonderful Thing.’’ Their pro- Filed May 9, 2000 teges, the Turkcords, purportedly wrote the song, then gave the Isley Brothers’ permission to record it after the voice of Insured filed action for declaratory the Turkcords’ lead singer allegedly relief and breach of contract against em- ‘‘cracked.’’ Members of the Turkcords al- ployee dishonesty insurer to recover in- legedly sang back-up on the record. Yet demnity for vicarious liability to defrauded the Turkcords never copyrighted their investors. The United States District song. They relied on the Isley Brothers’ Court, Central District of California, Car- alleged promise to share the royalties with los R. Moreno, 57 F.Supp.2d 933, entered them. summary judgment in favor of insurer. The district court did not abuse its dis- Insured appealed. The Court of Appeals, cretion in rejecting Bolton and Goldmark’s Schwarzer, Senior District Judge, sitting second motion for a new trial based on this by designation, held that the policy did not evidence. The Turkcords’ claims of au- provide liability coverage. thorship would not have affected the out- Affirmed. come of the case and at most go to the weight and credibility of the evidence. Bolton and Goldmark’s second motion was Insurance O2406(1) a last-ditch attempt to discredit the jury’s Employee dishonesty policy did not verdict. The district court heard all of the provide coverage for the insured’s vicari- evidence in this case, instructed the jury ous liability to defrauded investors; even on the applicable law, yet refused to re- though the policy covered money for which verse the jury’s verdict pursuant to motion the insured was legally liable, that provi- for a judgment as a matter of law. Having sion dealt with covered interests, and the found that the law was properly applied in insuring clause covered the insured only