The Internet Law Page: CCC v. MACLEAN

Citation: 44 F.3rd 61 (2nd Cir. 1994)




United States Court of Appeals,
Second Circuit.
Argued March 2, 1994.
Decided Dec. 5, 1994.

Stephen M. Feldman, Washington, DC (David Kolker, Spiegel &
McDiarmid,  Washington, DC), Thomas P. Sarro and Brewster Taylor,
Larson and Taylor,  Arlington, VA, for defendant-appellant.

Monica L. Thompson, Chicago, IL (James J. Casey, Keck, Mahin &
Cate, Chicago,  IL and Lawrence H. Lissitzyn, Reid & Riege,
Hartford, CT), for appellee.   James F. Rittinger and Mark A.
Fowler, New York City (Satterlee Stephens  Burke & Burke), on the
brief for amici curiae.

  Before:  KEARSE, PIERCE, and LEVAL, Circuit Judges.

  LEVAL, Circuit Judge:

     The appellant, publisher of a compendium of its projections
of used car valuations, seeks to establish copyright infringement
on the part of a competitor, which copied substantial portions of
appellant's compendium into the computer data base of used car
valuations it offers to its customers. 

     Arising in the wake of the Supreme Court's decision in Feist
Publications,  Inc. v. Rural Telephone Serv. Co., 499 U.S. 340,
111 S.Ct. 1282, 113 L.Ed.2d  358 (1991), this appeal raises the
question of the scope of protection afforded by the copyright law
to such compilations of informational matter.  Finding no 
infringement, the district court granted summary judgment to the
appellee.  In our view, the copyright law offers more substantial
protection to such compilations than envisioned in the district
court's ruling.  We therefore reverse.


     The Red Book.  The appellant is Maclean Hunter Market
Reports, Inc. ("Maclean").  Since 1911, Maclean, or its
predecessors, have published the  Automobile Red Book--Official
Used Car Valuations (the "Red Book"). [FN1]  The Red Book, which
is published eight times a year, in different versions for each 
of three regions of the United States (as well as a version for
the State of Wisconsin), sets forth the editors' projections of
the values for the next six weeks of "average" versions of most
of the used cars (up to seven years old) sold in that region.
[FN2]  These predicted values are set forth separately for each
automobile make, model number, body style, and engine type.  Red
Book also provides predicted value adjustments for various
options and for mileage in 5,000 mile increments.

     The valuation figures given in the Red Book are not
historical market prices, quotations, or averages; nor are they
derived by mathematical formulas from available statistics.  They
represent, rather, the Maclean editors' predictions, based on a
wide variety of informational sources and their professional
judgment, of expected values for "average" vehicles for the 
upcoming six weeks in a broad region.  The introductory text
asserts, "You, the subscriber, must be the final judge of the
actual value of a particular vehicle.  Any guide book is a
supplement to and not a substitute for  expertise in the complex
field of used vehicle valuation."   CCC's computer services. 
Appellee CCC Information Services, Inc. ("CCC"), is  also in the
business of providing its customers with information as to the 
valuation of used vehicles.  Rather than publishing a book,
however, CCC  provides information to its customers through a
computer data base.  Since at least 1988, CCC has itself been
systematically loading major portions of the Red Book onto its
computer network and republishing Red Book information in 
various forms to its customers. [FN3]

     CCC utilizes and resells the Red Book valuations in several
different forms.  CCC's "VINguard Valuation Service" ("VVS")
provides subscribers with the average of a vehicle's Red Book
valuation and its valuation in the NADA Official Used Car Guide
(the "Bluebook"), the other leading valuation book, published by
the National Automobile Dealers Association ("NADA").  The offer 
of this average of Red Book and Bluebook satisfies a market
because the laws of certain states use that average figure as a
minimum for insurance payments upon the "total loss" of a
vehicle.  CCC's "Computerized Valuation Service" ("CVS"), while
it primarily provides its subscribers with CCC's independent
valuation of used cars, also provides customers with the Red
Book/Bluebook average and the Red Book values standing alone.

     It is uncontested that CCC earns significant revenues
through the sale of its services, in which it both directly and
indirectly resells the figures it copies every few weeks from the
Red Book.  As the court found below, since 1988 numerous Red Book
customers have canceled their subscriptions, opting instead to
purchase CCC's services.  Op. at 25 (JA 665).

     Proceedings below.  CCC brought this action in 1991,
seeking, inter alia, a declaratory judgment that it incurred no
liability to Maclean under the copyright laws by taking and
republishing material from the Red Book.  Maclean counterclaimed
alleging infringement.  CCC then pleaded various affirmative 
defenses, including that it used the Red Book for its intended
purpose, fair use, and that the Red Book has come into the public
domain as the result of its adoption in state statutes regulating
the amount of insurance payments.  CCC also made various
contentions based on waiver, estoppel, consent, and 

     Both sides moved for summary judgment, and the motions were
referred for report and recommendation to Magistrate Judge Arthur
H. Latimer.  Magistrate Judge Latimer recommended to the district
court that CCC's motion for summary judgment be granted.  Judge
Latimer found:  (1) that the Red Book employed no originality or
creativity in the selection, coordination or arrangement of 
data, and therefore did not constitute a protected "original work
of  authorship," 17 U.S.C.A. s 101 (West 1977);  (2) that the Red
Book valuations were facts, or interpretations of facts, and
were, therefore, not protected by copyright;  (3) that, even if
the entries were not facts, copyright protection was nonetheless
precluded by the doctrine of "merger of idea and expression,"
because each entry in the Red Book is an idea--the idea  of the
value of the particular vehicle--and that idea is necessarily 
communicated by a dollar figure;  and (4) that the Red Book had
been placed in the public domain by being "incorporated into
governmental regulations."  District Judge Nevas then "approved,
adopted and ratified" the Magistrate  Judge's recommended ruling,
and judgment was entered in CCC's favor.  Endorsement at JA 671.


     1.  Does the Red Book manifest originality so as to be
protected by the  copyright laws?  The first significant question
raised by this appeal is whether Maclean holds a protected
copyright interest in the Red Book.  CCC contends, and the
district court held, that the Red Book is nothing more than a 
compilation of unprotected facts, selected and organized without 
originality or creativity, and therefore unprotected under the
Supreme Court's teachings in Feist.  We disagree.

     The Copyright Act of 1976 explicitly confers limited
protection on  compilations.  Section 103(a) specifies that
"[t]he subject matter of  copyright ... includes compilations,"
which are defined by Section 101 as assemblies of data "selected,
coordinated, or arranged in such a way that the resulting work as
a whole constitutes an original work of authorship";  Section 
103(b) makes clear that the protection in a compilation "extends
only to the material contributed by the author of such work ...
and does not imply any  exclusive right in the preexisting
material."  17 U.S.C.A. ss 101-103  (West 1977).

     In Feist, the Supreme Court ruled that originality is an
essential element of copyright protection, and that toil, or
"sweat of the brow,"  expended in collecting information does not
justify conferring copyright protection on a compilation of
facts;  rather, protection attaches only if the selection,
coordination, or arrangement exhibit originality, so that "the 
resulting work as a whole constitutes an original work of
authorship."  17  U.S.C.A. s 101 (West 1977).  Concluding that a
white pages telephone directory,  consisting of an alphabetical
listing of the names, towns of residence, and telephone numbers
of all the subscribers in the area of the telephone company's 
franchise (as required by state law), "lack[ed] the requisite
originality,"  499 U.S. at 364, 111 S.Ct. at 1297, the Court held
that the white pages were not within the protection of the
copyright, and could therefore freely be copied by the publisher
of another telephone directory without infringement.   

     Notwithstanding its conclusion with respect to such a
telephone directory, the Court emphasized that: "[o]riginal, as
the term is used in copyright, means only that the work was 
independently created by the author (as opposed to copied from
other works), and that it possesses at least some minimal degree
of creativity.  To be sure, the requisite level of creativity is
extremely low;  even a slight amount will suffice.  The vast
majority of works make the grade quite easily, as they  possess
some creative spark, "no matter how crude, humble or obvious" it
might  be." Id. at 345, 111 S.Ct. at 1287 (citations omitted). 

     The Court repeatedly stressed that the required level of
originality is minimal, and that most compilations, merely by
exercising some independent choice in the coordination, 
selection, or arrangement of data, will pass the test. [FN4]  The
telephone  directory failed because it was found to be completely
devoid of originality. 

     The protection of compilations is consistent with the
objectives of copyright law, which are, as dictated by the
Constitution, to promote the advancement of knowledge and
learning by giving authors economic incentives (in the form of
exclusive rights to their creations) to labor on creative, 
knowledge-enriching works.  U.S. Const. art. 1, s 8, cl. 8
("Congress shall have the Power ... To promote the Progress of
Science ... by securing for limited Times to Authors ... the
exclusive Right to their ... Writings").  Compilations that
devise new and useful selections and arrangements of information
unquestionably contribute to public knowledge by providing
cheaper,  easier, and better organized access to information. 
Without financial incentives, creators of such useful
compilations might direct their energies  elsewhere, depriving
the public of their creations and impeding the advance of 

     The grant of such monopoly protection to the original
elements of a compilation, furthermore, imposes little cost or
disadvantage to society.  The facts set forth in the compilation
are not protected and may be freely copied;  the protection
extends only to those aspects of the compilation that embody the 
original creation of the compiler.  For these reasons, the
copyright law undertakes to guarantee the exclusive rights of
compilers, like other authors, to whatever is original and
creative in their works, even where those original contributions
are quite minimal.

     The thrust of the Supreme Court's ruling in Feist was not to
erect a high barrier of originality requirement.  It was rather
to specify, rejecting the strain of lower court rulings that
sought to base protection on the "sweat  of the brow," that some
originality is essential to protection of authorship, and that
the protection afforded extends only to those original elements. 
Because the protection is so limited, there is no reason under
the policies of the copyright law to demand a high degree of
originality.  To the contrary, such a requirement would be
counterproductive.  The policy embodied into law is to encourage
authors to publish innovations for the common good--not to 
threaten them with loss of their livelihood if their works of
authorship are found insufficiently imaginative.

     In recognition of these considerations, we have several
times since Feist upheld copyright claims for compilations and
similar works where the originality component was extremely
modest.  In Kregos v. Associated Press,  937 F.2d 700, 706-07 (2d
Cir.1991), for example, we reversed a ruling of the district
court that the selection of nine statistical categories for use
on a baseball pitching form failed to demonstrate the necessary
originality.  In Key Publications, Inc. v. Chinatown Today
Publishing Enterprises, Inc., 945  F.2d 509, 514 (2d Cir.1991),
we held, inter alia, that the selection, from a more general
list, of businesses of special interest to Chinese-Americans also 
merited copyright protection.  Several years before Feist, in
Eckes v.  Card Prices Update, 736 F.2d 859, 863 (2d Cir.1984), we
held that an author's  subjective decision as to which baseball
cards are "premium" is entitled to  protection. [FN5]

     For other examples of cases upholding data selection as
meeting copyright's originality requirement, see 1 William F.
Patry, Copyright Law and Practice (1994).  They include: the
choice of categories of Medicaid data to include in charts; the 
'judgement and knowledge of the author respecting the social
standing and societal relations of a limited class of the general
public;'a daily time organizer;  the choice of 'true' public
relations firms to include in a directory;  a list of state
tariffs on pay telephones;  selection of the most important and
helpful cross-streets and assignment of address numbers for the
streets;  information about cable television systems throughout
the United States....  The key factor is the exercise of some
editorial judgment in the selection of data. Id. at 199-200.

     In our view, the district court misapplied these precedents. 
It interpreted Feist and our subsequent holdings as erecting a
high barrier of originality as a prerequisite to copyright
protection, rather than, as Feist so emphatically stated, a
minimal requirement.

     The district court gave several reasons for its ruling that
the Red Book failed the test for originality.  First, the court
stated, "Maclean Hunter has not persuasively demonstrated that
the values published in the Red Book are anything more than
interpretations or analyses of factual information....  While
Maclean Hunter may have been the first to discover and report
this material, the material does not 'owe its origin' to Maclean
Hunter." (Citing Feist, 499 U.S. at 361, 111 S.Ct. at 1296;  Op.
at 16-17 (JA 656-  57).)

     The district court was simply mistaken in its conclusion
that the Red Book valuations were, like the telephone numbers in
Feist, pre-existing facts that had merely been discovered by the
Red Book editors.  To the contrary, Maclean's evidence
demonstrated without rebuttal that its valuations were neither
reports of historical prices nor mechanical derivations of 
historical prices or other data.  Rather, they represented
predictions by the Red Book editors of future prices estimated to
cover specified geographic regions. [FN6]  According to Maclean's
evidence, these predictions were based not only on a multitude of
data sources, but also on professional judgment and expertise. 
The testimony of one of Maclean's deposition witnesses indicated 
that fifteen considerations are weighed;  among the
considerations, for example, is a prediction as to how
traditional competitor vehicles, as defined by Maclean, will fare
against one another in the marketplace in the coming period.  (JA
209-12.)  The valuations themselves are original creations of 

     Recognizing that "[o]riginality may also be found in the
selection and ordering of particular facts or elements," the
district court concluded that none had been shown.  Op. at 17 (JA
657).  This was because the Red Book's selection and arrangement
of data represents "a logical response to the needs of the
vehicle valuation market."  Id. at 18 (JA 658).  In reaching this 
conclusion, the district court applied the wrong standard.  The
fact that an  arrangement of data responds logically to the needs
of the market for which the compilation was prepared does not
negate originality.  To the contrary, the use  of logic to solve
the problems of how best to present the information being 
compiled is independent creation.  See Feist, 499 U.S. at 359,
111 S.Ct. at  1295 (originality is to be found unless the
creative spark is so utterly lacking as to be "virtually

     We find that the selection and arrangement of data in the
Red Book displayed amply sufficient originality to pass the low
threshold requirement to earn copyright protection.  This
originality was expressed, for example, in  Maclean's division of
the national used car market into several regions, with 
independent predicted valuations for each region depending on
conditions there found.  A car model does not command the same
value throughout a large geographic sector of the United States; 
used car values are responsive to local conditions and vary from
place to place.  A 1989 Dodge Caravan will not command the same
price in San Diego as in Seattle.  In furnishing a single number
to cover vast regions that undoubtedly contain innumerable
variations, the Red Book expresses a loose judgment that values
are likely to group together with greater consistency within a
defined region than without.  The number produced is necessarily
both approximate and original.  Several other aspects of the Red
Book listings also embody sufficient originality to pass Feist's
low threshold.  These include:  (1) the selection and manner of 
presentation of optional features for inclusion; [FN7]  (2) the
adjustment for mileage by 5,000 mile increments (as opposed to
using some other breakpoint and interval);  (3) the use of the
abstract concept of the "average" vehicle in each category as the
subject of the valuation;  and (4) the selection of the number of
years' models to be included in the compilation. 

     We conclude for these reasons that the district court erred
in ruling that the Red Book commands no copyright protection by
reason of lack of originality. [FN8]

     2. The idea-expression dichotomy and the merger of necessary
expression with the ideas expressed.  CCC's strongest argument is
that it took nothing more than ideas, for which the copyright law
affords no protection to the author.  According to this argument:
(1) each entry in the Red Book expresses the authors'idea of the
value of a particular vehicle;  (2) to the extent that
"expression" is to be found in the Red Book's valuations, such
expression is indispensable to the statement of the idea and
therefore merges with the idea, so that the expression is also
not protectible, and;  (3) because each of Red Book's valuations
could freely be taken without infringement, all of them may be
taken without infringement.  This was one of the alternate bases
of the district court's ruling in CCC's favor.

     The argument is not easily rebutted, for it does build on 
classically accepted copyright doctrine.  It has been long
accepted that copyright protection does not extend to ideas;  it
protects only the means of expression employed by the author.  As
the Supreme Court stated in Mazer v.  Stein, 347 U.S. 201, 74
S.Ct. 460, 98 L.Ed. 630 (1954): 

     Unlike a patent, a copyright gives no exclusive right
     to the art disclosed;  protection is given only to the
     expression of the idea--not the idea itself.  Thus, in
     Baker v. Selden, 101 U.S. 99 [25 L.Ed. 841] (1879), the
     Court held that a copyrighted book on a peculiar system
     of bookkeeping was not infringed by a similar book
     using a similar plan which achieved similar results
     where the alleged infringer made a different
     arrangement of the columns and used different headings.

Id. at 217, 74 S.Ct. at 470 (footnote omitted).

     It is also well established that, in order to protect the
immunity of ideas from private ownership, when the expression is
essential to the statement of the idea, the expression also will
be unprotected, so as to insure free public access to the
discussion of the idea.  See Kregos, 937 F.2d at 705;  Herbert
Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738, 742 (9th 
Cir.1971) ("When the 'idea' and its 'expression' are ...
inseparable, copying the 'expression' will not be barred, since
protecting the 'expression' in such circumstances would confer a
monopoly of the 'idea' upon the copyright owner free of the
conditions and limitations imposed by the patent law."). [FN9] 

     We nonetheless believe the district court erred in granting
judgment to CCC.  We reach this conclusion based on the need to
balance the conflicts and contradictions that pervade the law of
copyright, and the need, where elements of the copyright law
conflict, to determine, as a policy judgment, which of its 
commands prevails over the other.

     The fundamental principle of copyright, as expressed in the
Copyright Clause of the Constitution, is to promote the advance
of knowledge by granting authors exclusive rights to their
writings. [FN10]  As the Supreme Court said in Mazer: "The
economic philosophy behind the clause empowering Congress to 
grant patents and copyrights is the conviction that encouragement
of individual effort by personal gain is the best way to advance
public welfare through the talents of authors and inventors in
'Science and useful Arts.' "  347  U.S. at 219, 74 S.Ct. at 471. 
See also: Nimmer at section 1.03[A].  The financial incentives to
authors consist of exclusive rights to their writings, that may 
be sold or licensed for money, so that authors may earn a living
from the  creations that benefitted the public.

     From an early time, however, courts, taking a different
approach from that taken in the patent law, developed a theory
which almost directly contradicted the original theory of
copyright.  The new theory was that ideas are too important to
the advancement of knowledge to permit them to be under private 
ownership, and that open public debate, which is essential to a
free democratic society, requires free access to the ideas to be
debated. [FN11]  See Patry, supra, at 122-23, 319, Nimmer at
section 1.10[B] 1-71 to -74, 78-79, section 13.03[B] at 13-69 to
-70.  Judicially created doctrine thus led to a drastic
limitation on the scope of copyright protection. [FN12]  Ideas
were not to be protected; only the manner of their "expression." 
This limitation came to be known as the "idea-expression"

     The contradiction between these imperatives, one calling for
the protection of creations that will advance the progress of
knowledge, the second requiring that these same creations be free
of protection, has understandably given rise to bewildering
problems of interpretation as to whether copying has been of
protected expression or of the unprotected ideas underlying the 
expression. [FN13]  These difficulties led Judge Learned Hand to
discourse in  Nichols v. Universal Pictures Corp., 45 F.2d 119,
121 (2d Cir.1930), cert.denied, 282 U.S. 902, 51 S.Ct. 216, 75
L.Ed. 795 (1931), that takings from a protected source such as a
copyrighted play can occur at varying levels of abstraction from
the concrete realization of the original, and that the more 
remote in abstraction the taking is from the original, the less
likely that it will constitute a taking of protected expression.
[FN14]  This has often been  referred to as Hand's "abstractions
test";  in fact, as Judge Hand and others have noted, [FN15] it
is no test at all, but merely a way of perceiving the  problem.

     This conflict between these contradictory thrusts recurs at
the level of several more particular applications of the
copyright law.  Among them is the issue raised by this appeal of
the protection, if any, to be accorded to compilations. [FN17] 
For if CCC's argument prevails, for reasons explained below,
virtually nothing will remain of the protection accorded by the
statute to compilations, notwithstanding the express command of
the copyright statute. 

     Given the nature of compilations, it is almost inevitable
that the original contributions of the compilers will consist of
ideas. [FN18]  Originality in selection, for example, will
involve the compiler's idea of the utility to the consumer of a
limited selection from the particular universe of available 
data.  One compiler might select out of a universe of all
businesses those that he believes will be of interest to the
Chinese-American community, see Key  Publications, 945 F.2d at
514, another will select those statistics as to racehorses or
pitchers that are believed to be practical to the consumer in 
helping to pick winners, see Kregos, 937 F.2d at 706-07;  Wabash 
Publishing Co. v. Flanagan, No. 89 Civ. 1923, 1989 WL 32939, 1989
U.S.Dist. LEXIS 3546 (N.D.Ill. Mar. 31, 1989) (particular
selection and arrangement of information relevant to horse races
found copyrightable);  Triangle Publications, Inc. v. New England
Newspaper Publication Co., 46 F.Supp. 198, 201-02 (D.Mass.1942)
(same);  another will offer a list of restaurants he suggests are
the best, the most elegant, or offer the best value within a
price range. [FN19]  Each of these exercises in selection
represents an idea. 

     In other compilations, the original contribution of the
compiler will relate to ideas for the coordination, or
arrangement of the data.  Such ideas for arrangement are
generally designed to serve the consumers' needs, making the 
data more useful by increasing the ease of access to those data
that answer the needs of the targeted customers, or dividing the
data in ways that will efficiently serve the needs of more
diverse groups of customers.  For example, a listing of New York
restaurants might be broken down by geographic areas of the city,
specialty or type (e.g., seafood, steaks and chops, vegetarian, 
kosher, Chinese, Indian);  price range;  handicapped
accessibility, etc.  It is apparent that virtually any
independent creation of the compiler as to selection,
coordination, or arrangement will be designed to add to the 
usefulness or desirability of his compendium for targeted groups
of potential  customers, and will represent an idea.  In the case
of a compilation,  furthermore, such structural ideas are likely
to be expressed in the most simple, unadorned, and direct
fashion.  If, as CCC argues, the doctrine of merger permits the
wholesale copier of a compilation to take the individual 
expression of such ideas, so as to avoid the risk that an idea
will improperly achieve protection, then the protection
explicitly conferred on compilations by Section 103 of the U.S.
Copyright Act will be illusory.

     We addressed precisely this problem in Kregos, 937 F.2d 700. 
The plaintiff Kregos had created a form to be used to help
predict the outcome of a baseball  game by filling in nine
statistics of the competing pitchers.  The defendant contended,
in terms similar to CCC's argument, that the copyright owner's
idea was the utility of the nine selected statistics in helping a
fan predict the outcome, and that the idea was merged in the
expression of it--in the copyrighted form that listed those nine
statistics.  Judge Newman wrote:  "In one sense, every
compilation of facts can be considered to represent a merger of
an idea with its expression.  Every compiler of facts has the
idea that his particular selection of facts is useful.  If the
compiler's idea is identified at that low level of abstraction,
then the idea would always merge into the compiler's expression
of it.  Under that approach, there could never be a copyrightable
compilation of facts." [FN20]  Kregos, 937 F.2d at 706.

     Recognizing that the purpose of the doctrine of merger of
expression with idea is to insure that protection not extend to
ideas, the Kregos opinion went on to describe different
categories of ideas.  It distinguished between, on the one hand,
those ideas that undertake to advance the understanding of
phenomena or the solution of problems, such as the identification
of the symptoms that are the most useful in identifying the
presence of a particular disease;  and those, like the pitching
form there at issue, that do not undertake to explain  phenomena
or furnish solutions, but are infused with the author's taste or 
opinion.  Kregos postulated that the importance of keeping ideas
free from  private ownership is far greater for ideas of the
first category, directed to the understanding of phenomena or the
solving of problems, than for those that merely represent the
author's taste or opinion and therefore do not materially  assist
the understanding of future thinkers. [FN21]  As to the latter
category, the opinion asserted that, so long as the selections
reflected in the compilation "involve matters of taste and
personal opinion, there is no serious  risk that withholding the
merger doctrine," 937 F.2d at 707 (emphasis  added), would
inflict serious injury on the policy underlying the rule that 
forbids granting protection to an idea.  This was in contrast to
analyses belonging to the first category--building blocks of
understanding--as to which  "protecting the [necessary]
'expression' of the selection would clearly risk  protecting the
idea of the analysis."  Id at 707. [FN22]  Because Kregos's idea
was of the soft type infused with taste or opinion, the court
withheld  application of the merger doctrine, permitting Kregos
to exercise ownership.  It accomplished this by assigning to the
idea a different level of abstraction from the expression of it,
so that the merger doctrine would not apply and the  copyright
owner would not lose protection. [FN23]  ("His 'idea,' for
purposes of the merger doctrine, remains the general idea that
statistics can be used to assess pitching performance rather than
the precise idea that his selection yields a determinable
probability of outcome."  937 F.2d at 707.) 

     Kregos, thus, makes a policy judgment as between two evils. 
Unbridled application of the merger doctrine would undo the
protection the copyright law intends to accord to compilations. 
Complete failure to apply it, however, would result in granting
protection to useful ideas. [FN24]  Kregos adopts a middle
ground.  In cases of wholesale takings of compilations, a 
selective application of the merger doctrine, withholding its
application as to soft ideas infused with taste and opinion, will
carry out the statutory policy to protect innovative compilations
without impairing the policy that requires  public access to
ideas of a more important and useful kind. [FN25] 

     Indeed, courts have consistently ruled in a manner that
supports the distinction made in Kregos.  Compare Baker v.
Selden, 101 U.S. 99, 25, L.Ed. 841 (1880), and Kern River, supra,
(copyright protection denied, based on merger doctrine,
respectively to a system of double entry bookkeeping and the
designation of the best available pipeline route from     
Wyoming to California), with Eckes, supra, and Key, supra,
(granting protection to the identification of premium baseball
cards and business establishments likely to be of interest to the
Chinese-American community). 

     Application of the Kregos approach to our facts leads us to
the conclusion that the district court should, as in Kregos, have
"withheld " the merger doctrine.  As a matter of copyright
policy, this was not an appropriate instance to apply the merger
doctrine so as to deprive Red Book of copyright protection.  The
consequences of giving CCC the benefit of the merger doctrine 
are too destructive of the protection the Act intends to confer
on compilations, without sufficient benefit to the policy ofcopyright that seeks  to preserve public access to ideas.

     In the first place, the takings by CCC from the Red Book are
of virtually the entire compendium.  This is not an instance of
copying of a few entries from a compilation.  This copying is so
extensive that CCC effectively offers to sell its customers
Maclean's Red Book through CCC's data base.  CCC's invocation of
the merger doctrine to justify its contention that it has taken 
no protectible matter would effectively destroy all protection
for Maclean's  compilation. [FN26]

     Secondly, the valuations copied by CCC from the Red Book are
not ideas of the first, building-block, category described in
Kregos, but are rather in the category of approximative
statements of opinion by the Red Book editors.  To the extent
that protection of the Red Book would impair free circulation of 
any ideas, these are ideas of the weaker category, infused with 
opinion;  the valuations explain nothing, and describe no method,
process or procedure.  Maclean Hunter makes no attempt, for
example, to monopolize the basis of its economic forecasting or
the factors that it weighs; the Red  Book's entries are no more
than the predictions of Red Book editors of used car values for
six weeks on a rough regional basis.  As noted above, Red Book 
specifies in its introduction that "[y]ou, the subscriber, must
be the final judge of the actual value of a particular vehicle. 
Any guide book is a supplement to and not a substitute for
expertise in the complex field of used vehicle valuation."  This
language is remarkably similar to our observation in  Kregos,
that the author "has been content to select categories of data
that he obviously believes have some predictive power, but has
left it to all sports page readers to make their own judgments as
to the likely outcomes from the sets of data he has selected." 
937 F.2d at 707.

     The balancing of interests suggested by Kregos leads to the 
conclusion that we should reject CCC's argument seeking the
benefit of the merger doctrine. [FN27]  Because the ideas
contained in the Red Book are of the weaker, suggestion-opinion
category, a withholding of the merger doctrine would not
seriously impair the policy of the copyright law that seeks to
preserve free public access to ideas.  If the public's access to
Red Book's valuations is slightly limited by enforcement of its
copyright against CCC's wholesale copying, this will not inflict
injury on the opportunity for public debate, nor restrict access
to the kind of idea that illuminates our understanding of the 
phenomena that surround us or of useful processes to solve our
problems.  [FN28]  In contrast, if the merger doctrine were
applied so as to bar Maclean's enforcement of its copyright
against CCC's wholesale takings, this would seriously undermine
the protections guaranteed by section 103 of the Copyright Act to 
compilations that employ original creation in their selection,
coordination, or arrangement.  It would also largely vitiate the
inducements offered by the  copyright law to the makers of
original useful compilations. 

     3.  Public domain.  We disagree also with the district
court's ruling sustaining CCC's affirmative defense that the Red
Book has fallen into the public domain.  The district court
reasoned that, because the insurance statutes or regulations of
several states establish Red Book values as an alternative
standard, i.e., by requiring that insurance payments for total 
losses be at least equal either to Red Book value or to an
average of Red Book and Bluebook values (unless another approved
valuation method is employed), [FN29] the Red Book has passed
into the public domain.  The argument is that the public must
have free access to the content of the laws that govern it;  if 
a copyrighted work is incorporated into the laws, the public need
for access to  the content of the laws requires the elimination
of the copyright protection. 

     No authority cited by CCC directly supports the district
court's view.  It relied on Building Officials & Code Adm. v.
Code Tech. Inc., 628 F.2d 730  (1st Cir.1980) ("BOCA"), which the
Magistrate Judge found "virtually indistinguishable" from our
case.  Although the First Circuit Court of Appeals, in BOCA,
indeed expressed sympathy with the arguments here advanced by
CCC, its ruling is not a holding to that effect.  The Court of
Appeals merely vacated a preliminary injunction, expressing
doubts as to the plaintiff copyright holder's likelihood of
success, and remanding for a full hearing on whether the
plaintiff had lost its copyright protection by reason of the 
adoption of its previously protected work (a construction code)
as part of the laws of Massachusetts.

     We are not prepared to hold that a state's reference to a
copyrighted work as a legal standard for valuation results in
loss of the copyright.  While there are indeed policy
considerations that support CCC's argument, they are opposed  by
countervailing considerations.  For example, a rule that the
adoption of such a reference by a state legislature or
administrative body deprived the copyright owner of its property
would raise very substantial problems under the Takings Clause of
the Constitution.  We note also that for generations, state 
education systems have assigned books under copyright to comply
with a mandatory school curriculum.  It scarcely extends CCC's
argument to require that all such assigned books lose their
copyright--as one cannot comply with the legal requirements
without using the copyrighted works.  Yet we think it unlikely
courts would reach this conclusion.  Although there is scant
authority  on CCC's argument, Nimmer's treatise opposes such a
suggestion as antithetical to the interests sought to be advanced
by the Copyright Act.  See Nimmer section 5.06  [C] at 5-60.


     Because Maclean has demonstrated a valid copyright, and an
infringement  thereof, we direct the entry of judgment in
Maclean's favor.  We remand to the  district court for further


      FN1. For the entire period at issue in this case, each
edition of the Red Book has included a copyright notice, and has
been registered with the U.S. Copyright Office.

      FN2. Maclean also publishes the Older Car/Truck Red Book,
which offers similar projected valuations for vehicles eight to
eighteen years old. 

      FN3. In 1981, CCC unsuccessfully attempted to secure a
license from Maclean to use Red Book valuations on its on-line
services.  In 1984, CCC wrote to the publisher of the Red Book to
inform it that it was being  "ripped off" because another
computer averaging service was using Red Book's figures.

      FN4. The compilation author typically chooses which facts
to include, in what order to place them, and how to arrange the
collected data so that they may be used effectively by readers. 
These choices as to selection and arrangement, so long as they
are made independently by the compiler and entail a minimal
degree of creativity, are sufficiently original that Congress may
protect such compilations through the copyright laws.  Thus,     
even a directory that contains absolutely no protectible written 
expression, only facts, meets the constitutional minimum for
copyright protection if it features an original selection or
arrangement. Feist, 499 U.S. at 348, 111 S.Ct. at 1289 (citations
omitted).  [T]he originality requirement is not particularly
stringent.  A compiler may settle upon a selection or arrangement
that others have used; novelty is not required.  Originality
requires only that the author make the selection or arrangement
independently (i.e., without copying that selection or
arrangement from another work), and that it display some     
minimal level of creativity.  Presumably, the vast majority of
compilations will pass this test, but not all will.  There
remains a narrow category of works in which the creative spark is
utterly lacking or so trivial as to be virtually nonexistent.
Id. at 358-59, 111 S.Ct. at 1294.

      FN5. By contrast, we found no infringement in Victor Lalli
Enters. Inc. v. Big Red Apple, Inc., 936 F.2d 671 (2d Cir.1991),
because the charts at issue were " 'purely functional grids that
offer[ed] no opportunity for variation,'" and the author
exercised "neither selectivity in what he reports nor creativity
in how he reports it."  Id. at 673 (quoting district court in

      FN6. That they are expressed in numerical form is
immaterial to originality.  Original authorship warranting
protection may be "fixed in any tangible medium of expression ...
includ[ing] ... literary works."  17 U.S.C. 102(a)  The Act
broadly defines literary works to include "works, other than
audiovisual works, expressed in words, numbers, or other verbal
or numerical symbols...."  

      FN7. This selection includes far fewer than all extant
options, and presents them in a manner that furnishes a single
valuation to cover the particular option in numerous different
vehicles.  The editors make these choices to accommodate the
practical space limitations imposed by the book's format, while
providing the information most likely to satisfy customers'

      FN8. The district court also believed that CCC did not
infringe Red Book's original protected elements because CCC
included Red Book's selection in a more extensive data base.  We
disagree.  Original aspects of Red Book's coordination and
arrangement were inextricably present whenever CCC copied     
and republished any Red Book valuation, because each valuation
incorporated the Red Book editors' original judgment concerning
the predicted value of that automobile, as well as their judgment
as to geographic consistency within a region.

      FN9. For more extensive discussions of the merger doctrine,
see William F. Patry, Copyright Law and Practice, 312-325 (1994); 
Melville B. Nimmer & David Nimmer, Nimmer on Copyright, section
13.03[A]-[B] (1994). 

      FN10. This essential formulation is found in England's
Statute of Anne of 1710, which conceived the Anglo-American
copyright.  It is entitled, "An Act for the Encouragement of
Learning, by Vesting the Copies of Printed Books in the Authors
or Purchasers of Such Copies."  The statute is reprinted in
Patry, supra, at 1461-64.

      FN11. As Nimmer explains: "The policy rationale underlying
the Act's exclusion of ideas from copyright protection is clear. 
To grant property status to a mere idea would permit withdrawing
the idea from the stock of materials that would otherwise be     
open to other authors, thereby narrowing the field of thought
open for development and exploitation.  This effect, it is
reasoned, would hinder rather than promote the professed purpose
of the copyright laws, i.e., "the progress of science and useful
arts."   Nimmer s 13.03[B] at 13-69 to -70 (footnotes omitted). 

      FN12. This doctrine is codified in section 102(b) of the
Copyright Act, which provides that "[i]n 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."     
17 U.S.C. section 102(b).

      FN13. As Judge Walker pointed out in Computer Assoc. Int'l,
Inc. v. Altai, Inc., 982 F.2d 693, 696 (2d Cir.1992), "the
copyright law seeks to establish a delicate equilibrium.  On the
one hand, it affords protection to authors as an incentive to
create, and, on the other, it must appropriately limit the extent
of that protection so as to avoid the effects of monopolistic
stagnation.  In applying the federal act to new types of cases,
courts must always keep this symmetry in mind." 

      FN14. His classic and oft-repeated formula was that:     
"Upon any work, and especially upon a play, a great number of
patterns of increasing generality will fit equally well, as more
and more of the incident is left out.  The last may perhaps be no
more than the most general statement of what the play is about,
and at times might consist only of its title;  but there is a
point in this series of abstractions where they are no longer
protected, since otherwise the playwright could prevent the use
of his "ideas," to which, apart from their expression, his     
property is never extended."  45 F.2d at 121.

      FN15. "[A]s soon as literal appropriation ceases to be the
test, the whole matter is necessarily at large, so that ... the
decisions cannot help much in a new case."  Nichols, 45 F.2d at
121.  See also: Nash v. CBS,Inc., 899 F.2d 1537, 1540 (7th
Cir.1990) ("Hand's insight is not a test at all.  It is a clever
way to pose the difficulties that require courts to avoid either
extreme of the continuum of generality."  (Easterbrook, J.)). 

      FN16. Hand himself, writing thirty years after his
above-quoted formulation of the problem, eschewed any pithy
solution of it.  In his last copyright case, Peter Pan Fabrics,
Inc. v. Martin Weiner Corp., 274 F.2d 487 (2d Cir.1960), he
opined that:  "Obviously, no principle can be stated as to when
an imitator has gone beyond copying the 'idea,' and has borrowed
its 'expression.'  Decisions must therefore inevitably be ad
hoc."  Id. at 489.  Thirty years after that, Judge Keeton wrote: 
"It seems the better part of wisdom, if not valor, not to press
the search for a suitable bright-line test ... where Learned
Hand, even after decades of experience in judging, found none." 
Lotus Dev. Corp. v. Paperback Software Int'l, 740 F.Supp. 37, 60
(D.Mass.1990).  See also:  Patry, supra, at 320 (dangerous to
attempt to formulate broad rules in this area).

      FN17. Another is the issue of the protection to be afforded
to computer programs, as to which the recently conferred
statutory protection is not easily reconciled with the
judge-made, and statutorily adopted, principle that copyright
protection does not "extend to any idea, procedure, process     
[or] system."  17 U.S.C. s 102(b).  It is difficult to say what a 
computer program is, if not an idea, procedure, process or
system.  See generally:  Computer Assoc. Int'l, Inc. v. Altai,
982 F.2d at 703-07. 

      FN18. Commentators have noted this dilemma.  See, e.g. Jane
C. Ginsburg, No "Sweat"? Copyright and Other Protection of Works
of Information After Feist v. Rural Telephone, 92 Colum.L.Rev.
338, 346 (1992). 

      FN19. For a more exhaustive list of compilations upheld as
original, see Patry, supra, at 199-200.

      FN20. Judge Newman might have omitted the last two words. 
For the reasoning he discusses would destroy all protection for
compilations of ideas as well as for compilations of facts.

      FN21. See also Eckes, 736 F.2d at 863 (upholding finding of 
infringement because list of premium cards "subjectively based"). 

      FN22. This dichotomy between types of ideas is supported by
the wording of various legislative pronouncements, which seem
uniformly to contemplate denying protection to building-block
ideas explaining processes or discoveries, and do not refer to
expressions of subjective opinion.  Thus, section 102(b) denies
protection to any "idea, procedure, process, system, method of
operation, concept, principle, or discovery."  37 C.F.R. section 
202.1(b), in similar terms, denies protection to "[i]deas, plans,
methods, systems, or devices, as distinguished from the
particular manner in which they are expressed or described in a
writing."  Copyright Office Circular 31 maintains that "Copyright
protection is not available for "ideas or procedures for doing,
making, or building things;  scientific or technical methods or
discoveries;  business operations or procedures;  mathematical  
principles;  formulas, algorithms; or any concept, process [or]
method of operation."

      FN23. Professor Robert Gorman has written that protection
of compilations is more strongly suggested where the "works are
more fanciful than functional, and where the selection criteria
are driven by subjective and evaluative judgement ..." Robert A.
Gorman, The Feist Case:  Reflections on a Pathbreaking Copyright
Decision, 18 Rutgers Computer & Tech.L.J. 731, 751 (1992).  See
also Ginsburg, supra, at 345.  Compare Hoehling v. Universal City
Studios, Inc., 618 F.2d 972 (2d Cir.), cert. denied, 449     
U.S. 841, 101 S.Ct. 121, 66 L.Ed.2d 49 (1980) (denying protection
to historical theory explaining destruction of Hindenburg
dirigible) with Eckes, 736 F.2d at 863 (granting protection to
identification of "premium" baseball cards because of personal
subjectivity of the selection).  The Hoehling opinion justified
the denial of protection to historical analysis on the theory
that "[k]nowledge is expanded ... by granting new authors of
historical works a relatively free hand to build upon the work of
their predecessors."  618 F.2d at 980. 

      FN24. Discussing merger in the context of computer
programs, Nimmer points out that "[t]his line [for determining
when an idea has become sufficiently delineated to warrant
copyright protection] is a pragmatic one, drawn not on the basis
of some metaphysical property of 'ideas,' but by balancing the
need to protect the labors of authors with the desire to assure
free access to ideas."  Nimmer, s 13.03[F] at 13-128.

      FN25. See Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446
F.2d 738, 742 (9th Cir.1971) ("The guiding consideration in
drawing the line is the preservation of the balance between
competition and protection reflected in the patent and copyright
laws.  What is basically at stake is the extent of the copyright
owner's monopoly--from how large an area of activity did Congress
intend to allow the copyright owner to exclude others?");  Kern
River Gas Transmission Co. v. Coastal Corp., 899 F.2d 1458, 1464
(5th Cir.) cert. denied, 498 U.S. 952, 111 S.Ct. 374, 112 L.Ed.2d
336 (1990) ("To extend protection ... would be to grant Kern
River a monopoly of the idea for locating a proposed pipeline in
the chosen corridor, a foreclosure of competition that Congress
could not have intended to sanction through copyright law....") 
See also Nash v. CBS, Inc., 899 F.2d 1537, 1540-42 (7th
Cir.1990);  Lotus Dev. Corp. v. Paperback Software Int'l., 740    
F.Supp. 37, 60-61 (D.Mass.1990);  Nimmer, section 13.03[B] at
13-78-80;  Patry, supra, at 314-17.

      FN26. In this circuit, consideration of the merger doctrine
takes place in light of the alleged copying to determine if
infringement has occurred, rather than in analyzing the
copyrightability of the original work. Kregos, 937 F.2d at 705; 
Durham Industries, Inc. v. Tomy Corp., 630 F.2d 905, 916 (2d
Cir.1980).  This approach is applauded by Nimmer as the  "better
view."  13.03[B] at 13-76 to -78.  As we noted in Kregos,
"[a]ssessing merger in the context of alleged infringement will
normally provide a more detailed and realistic basis for
evaluating the claim that protection of expression would
inevitably accord protection to an idea."  Kregos, 937 F.2d at
705.  In the instant case, for example, it is of consequence that
we are confronted with wholesale copying of a compilation rather
than some more limited copying from a compilation. 

      FN27. As Nimmer points out, "There can be no First
Amendment justification for the copying of expression along with
idea simply because the copier lacks either the will or the time
or energy to create his own independently evolved expression. 
The first amendment ... does not offer a governmental subsidy at
the expense of authors whose well-being is also a matter of     
public interest."  Nimmer, supra, section 1.10[D] at 1-98 to

      FN28. Others, including CCC, remain free to value used cars
and to profit from their valuations.  They are barred only from
wholesale copying of what is original to the authors of the Red
Book.  As the Supreme Court said in Mazer v. Stein, 347 U.S. 201,
74 S.Ct. 460, 98 L.Ed. 630 (1954), "respondents may not exclude
others from using statuettes of human figures in table lamps; 
they may only prevent use of copies of their statuettes as     
such or as incorporated in some other article."  347 U.S. at 218,
74, S.Ct. at 470.

      FN29. See N.J.Admin.Code 11:3-10.4 (1988);  11
N.Y.Admin.Code section 216.7 (1990).

      FN30. Nimmer argues that the adoption of a private work
into law might well justify a fair use defense for personal use,
but should not immunize a  competitive commercial publisher from
liability since this would "prove destructive of the copyright
interest in encouraging creativity in connection with the
increasing trend toward state and federal adoptions of model
codes."  Nimmer, s 5.06[C] at 5-60.

h o m e | f e e d b a c k


© 1996 - Ralph C. Losey, Attorney at Law