Saenger Organization, Inc. v. Nationwide Insurance Licensing Associates, Inc.

No. 96-2197

THE SAENGER ORGANIZATION, INC.,

Plaintiff, Appellee,

v.

NATIONWIDE INSURANCE LICENSING ASSOCIATES, INC.,
COMMONWEALTH LICENSING GROUP, AND LAWRENCE R. DURKIN,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nancy C. Gertner, U.S. District Judge]

Before

Selya, Circuit Judge,
Bownes, Senior Circuit Judge,
and Stahl, Circuit Judge.

Ernest B. Murphy with whom Murphy & O'Connell was on brief for
appellants.
David
J.
Byer
with
whom Testa, Hurwitz & Thibeault, LLP, Stephen J.
Kenney, and Kenney & Maciolek, were on brief for appellee.

July 18, 1997

STAHL, Circuit Judge. This copyright infringement

case
revolves around a dispute over who owns the copyrights in

insurance licensing texts and manuals that were created in

1986.

It
comes
to
us
on
appeal from the district court's grant

of
summary
judgment
in
favor of plaintiff-appellee, The Saenger

Organization, Inc. ("Saenger"), and against defendants-

appellants Lawrence R. Durkin, Nationwide Insurance Licensing

Associates, Inc., and Commonwealth Licensing Group

(collectively
"Durkin").
Durkin argues that the district court

improperly
found
that
no
genuine issue of material fact existed

as to Saenger's ownership of valid copyrights in the manuals

and
Durkin's
infringement of them. Thus, Durkin contends that

the
district
court wrongly concluded that Saenger was entitled

to judgment in its favor as a matter of law. Durkin further

argues
that
the district court incorrectly determined that the

applicable Massachusetts statutes of limitations and frauds

barred his state law counterclaims against Saenger alleging

fraud, breach of agreement, and unfair and deceptive business

practices.

For
the
reasons that follow, we affirm the district

court's rulings.

Standard of Review

We exercise plenary, de novo review of a district

court's
entry
of
summary
judgment. See Ortiz-Pinero v. Rivera-

Arroyo, 84 F.3d 7, 11 (1st Cir. 1996). Summary judgment is

appropriate
where there are no genuine disputes as to material

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2

facts
and
the moving party is entitled to judgment as a matter

of law. See Fed. R. Civ. P. 56(c). We review the record

evidence in the light most favorable to the non-moving party,

and thus draw all reasonable inferences and resolve factual

disputes in favor of the party against whom summary judgment

has
been
entered,
in
this case, the defendants-appellants. See

Den Norske Bank v. First Nat'l Bank of Boston, 75 F.3d 49, 53

(1st Cir. 1996).

Background and Prior Proceedings

The
Saenger
Organization has been in the business of

publishing insurance licensing texts and manuals since 1986.

Durkin worked for Saenger from 1986 until 1992, during which

time he was an officer and vice president of the corporation.

Since 1993, Durkin, now the principal of both Nationwide

Insurance Licensing Associates and Commonwealth Licensing

Group, has been independently in the business of publishing

insurance licensing texts and manuals.

According to Durkin, he and Saenger reached an oral

agreement in April 1986 as to work that Durkin would do for

Saenger. Saenger disputes the existence of any unwritten

agreement, but concedes that we must view the record evidence

in the light most favorable to Durkin for purposes of this

appeal and the underlying motion. According to Durkin, the

work responsibilities he undertook in the April 1986 oral

agreement included the development of a property and casualty

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insurance
licensing
manual, a life and health insurance manual,

and several state law supplements. Durkin maintains that the

alleged oral agreement contained the following terms: Durkin

was to begin immediately to develop, update, and expand these

manuals and supplements for Saenger, which would market them;

he would become Saenger's vice president immediately upon

completion of an existing employment commitment to another

firm;
he
and
Saenger would be co-authors of the materials that

Durkin would write and co-owners of the copyrights in those

materials; and, he would be paid a base salary of $42,000 per

annum plus 50 percent of the net revenues of the materials he

worked
on,
with
the
computation and sharing of such net revenue

to
begin
in
June
1987
and to continue in each succeeding fiscal

year. Durkin promptly began to work part-time (nights and

weekends) on the manuals -- as he and Saenger had agreed --

even though he was still employed by Educational Training

Systems ("ETS"). Durkin and Saenger continued with this work

arrangement for several months until Durkin assumed full-time

work duties at Saenger's offices in July 1986.

Two of the insurance licensing texts that Durkin

worked on during his relationship with Saenger were manuals

that
came
to
be
titled
Li
fe, Accident and Health Licensing Text

and Property/Casualty Licensing Text (hereinafter "Life" and

"Property" respectively). Durkin claims he authored these

works in their entirety, while Saenger contends that Durkin

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4

merely expanded and updated previously developed Saenger

manuals.

In
any event, on or about November 26, 1986, Saenger

submitted
an
application
for copyright registration, a Form TX,

for Property with the United States Copyright Office. About

two days later, Saenger submitted a similar application for

Life.1

The
Property

application listed July 16, 1986 as the

work's first date of publication and indicated that it was a

"work made for hire" by the work's co-authors, which the

application listed as Bruce W. Saenger (The Saenger

Organization's principal) and Lawrence R. Durkin. The

application indicated that The Saenger Organization was the

hiring party for whom the work was made and was the sole

claimant of copyright protection. The Copyright Office

responded to the application with a letter dated January 23,

1987,
notifying
Saenger
that "[i]f an individual contributes to

or creates a work in his or her capacity as either an officer

or employee of a company or organization, the work is

considered a 'work made for hire' and the employer should be

named as the author rather than the individual." In response

to this letter, Saenger completed and submitted a second

application for the same work, i.e., Property, again listing

The Saenger Organization as the sole copyright claimant, but

1. Durkin claims that the Property application, while
submitted to the Copyright Office in November 1986, was
filled out in his presence on or about July 16, 1986.

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this time also listing it alone as the work's author. On the

basis of this second application, which the Copyright Office

received on February 24, 1987, the Copyright Office issued

Saenger
a
copyright
for
P
roperty (registration number TX 2-011-

625), which listed November 26, 1986 as the effective date of

registration.

Like the initial Property application, the first

application that Saenger submitted for Life listed Bruce W.

Saenger and Lawrence R. Durkin as the authors of the work,

indicated that it was a "work made for hire," and stated that

The Saenger Organization, the copyright claimant, was the

hiring
party
for whom the work had been made. Interestingly,

the Copyright Office responded to this application prior to

responding to the earlier Property application. By a letter

dated
December 24, 1986, the Copyright Office notified Saenger

that "[w]here a work is 'made for hire,' the employer is

considered the author and should be [so] named [on the

copyright application.]" In response to this letter, Saenger

completed
and
submitted
a second application for the same work,

i.e.,
Life
,
this
time
listing The Saenger Organization alone as

the work's author. On the basis of this second application,

which the Copyright Office received on January 16, 1987, the

Copyright Office issued Saenger a copyright for Life

(registration number TX 1-983-136), which listed November 28,

1986 as the effective date of registration.

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6

During the period of time when these applications

were pending, Durkin asked Saenger about the applications'

status.

Some time after the Copyright Office sent Saenger the

copyright registrations for Property and Life (the record is

not clear precisely when), Saenger informed Durkin that the

copyrights had "come in from the Office." Durkin did not ask

to see, nor did he see, the copyright registrations or any of

the
applications submitted to the Copyright Office prior to an

incident which occurred in April 1992. According to Durkin,

while looking through some files in the clerical area at

Saenger, he inadvertently encountered a file entitled

"COPYRIGHT INFO." He looked inside the file and discovered

copies of the applications and the letters described above.

According to Durkin, he brought the file to Bruce Saenger's

office
and
demanded
an
explanation for why he was not listed as

a copyright owner, demanded his share of the copyright and

copyright revenues, and expressed his view that the copyright

registrations
amounted to a violation of their oral agreement.

Saenger denies that such a confrontation ever took place.

Prior to leaving Saenger in September 1992, Durkin

avers that he had regular and frequent discussions with Bruce

Saenger
concerning the copyright and revenue issues, something

Saenger
denies.

Durkin
states that Saenger repeatedly promised

him that he would "get around to" changing the copyright to

name Durkin as a co-author and co-owner and would make an

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7

accounting for monies owed Durkin as a result of revenues

attributable to fiscal years 1989 to 1992.

Durkin
admits
that
after
he left Saenger in September

1992 he copied substantial portions of both Life and Property

and
used
them in his own text, Fundamentals of Life, Accident,

and Health Licensing Text (hereinafter "Fundamentals").

Saenger
became
aware
of
Durkin's activities in April 1994. The

following
month, Saenger advised Durkin to discontinue copying

and publishing the written material in question, as it was

copyrighted by Saenger. Durkin, however, persisted in

publishing
and distributing the material. Shortly thereafter,

Saenger filed suit in federal district court. The district

court preliminarily enjoined publication and distribution of

the Durkin materials and entered summary judgment for Saenger

on both its copyright infringement claims and Durkin's state

law counterclaims. This appeal ensued.

The Copyright Infringement Issue

The
plaintiff in a copyright infringement case bears

the
burden
of
proving
"'(1) ownership of a valid copyright, and

(2)
[unauthorized] copying of constituent elements of the work

that
are
original.'" Lotus Dev. Corp. v. Borland Int'l, Inc.,

49 F.3d 807, 813 (1st Cir. 1995), aff'd by an equally divided

court
,
116
S. Ct. 804 (1996) (quoting Feist Public'ns, Inc. v.

Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)); see also CMM

Cable Rep., Inc. v. Ocean Coast Props., Inc., 97 F.3d 1504,

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8

1513
(1st
Cir.
1996).

Only the first of these two prongs is at

issue
in
this
case
because Durkin does not deny or dispute that

he
copied
the
pertinent
material from Property and Life without

any
authorization
from
Saenger. Thus, the only issue before us

is whether Saenger's copyrights for Property and Life are

valid.

To show ownership of a valid copyright, a plaintiff

bears the burden of proving that the work, when viewed as a

whole,
is
original and that he has complied with the requisite

statutory formalities. See Lotus, 49 F.3d at 813. "'In

judicial proceedings, a certificate of copyright registration

constitutes
prima

facie

evidence of copyrightability and shifts

the
burden
to
the
defendant to demonstrate why the copyright is

not
valid.'"
Id. (quoting Bibbero Sys., Inc. v. Colwell Sys.,

Inc.
,
893
F.2d 1104, 1106 (9th Cir. 1990)); see also 17 U.S.C.

S 410(c); CMM Cable, 97 F.3d at 1513.

In this case, Saenger succeeded in shifting the

burden regarding the validity of its copyrights in Life and

Property by producing copyright registration certificates.

Durkin attempted to meet the repositioned burden of proof by

arguing that Saenger's copyrights were obtained by

misrepresentation and are, therefore, invalid. We, like the

district court, do not find this argument persuasive.

The crux of Durkin's theory is that the oral

agreement
he
allegedly
entered into with Saenger in April 1986,

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which Durkin characterizes as a partnership agreement,

undermines the validity of Saenger's copyrights in Life and

Property. Specifically, Durkin alleges that he and Saenger

orally agreed in April 1986 that he was to develop written

materials for Saenger and that he and Saenger would be co-

authors and co-owners of the copyrights in those materials,

including those now titled Life and Property. Thus, Durkin

argues that Saenger's copyrights are invalid because they

violate
the
terms of the April 1986 oral agreement and because

the copyright applications that Saenger submitted contained

information other than that which Saenger agreed they would

contain as to ownership of the copyrights. Saenger contests

the
veracity
of
Durkin's
various allegations, but concedes that

they must be assumed to be correct for the purposes of this

appeal. Even so, Durkin's argument encounters several

difficulties.

The Copyright Act of 1976 provides that copyright

protection generally attaches to the person who actually

creates a work. See 17 U.S.C. S 201(a) ("Copyright in a work

. . . vests initially in the author or authors of the work.

The authors of a joint work are coowners of copyright in the

work.").

"The Act carves out an important exception, however,

for 'works made for hire.'" Community for Creative Non-

Violence

v.
R
eid, 490 U.S. 730, 737 (1989) [hereinafter CCNV].

Where "a work [is] made for hire," the Act provides that "the

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10

employer or other person for whom the work was prepared is

considered the author" and owns the copyright "unless the

parties
have
expressly
agreed otherwise in a written instrument

signed by them." 17 U.S.C. S 201(b).

As for the scope of this exception to the general

rule regarding copyright ownership, the 1976 Act, in relevant

part, provides that a "work [is] made for hire" if it is

either:

(1) a work prepared by an employee
within the scope of his or her
employment; or
(2) a work specially ordered or
commissioned for use as . . . a
supplementary work, as a compilation, as
an instructional text, as a test, as
answer material for a test, or as an
atlas, if the parties expressly agree in
a written instrument signed by them that
the work shall be considered a work made
for hire. . . .

17 U.S.C. S 101.

In
this
case, the parties agree that they did not sign

a written instrument stating that the materials that Durkin

prepared for Saenger would be considered works made for hire.

Accordingly, Life and Property can be considered "works made for

hire"
only
if
they
satisfy the requirements of section 101(1), that

is, if they were prepared by Durkin within the scope of his

employment with Saenger.

The Copyright Act nowhere defines the key terms

"employee" or "scope of employment." See CCNV, 490 U.S. at 739;

Melville B. Nimmer & David Nimmer, 1 Nimmer on Copyright S

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11

5.03[B][1] at 5-14.2 (1996). In CCNV, the Supreme Court resolved

four conflicting judicial interpretations of these terms, see 490

U.S. at 738-39, by construing them to mean the "conventional

master-servant relationship as understood by common-law agency

doctrine."

I
d. at 740. The resulting directive from the Court is

unambiguous:

"To
determine whether a work is [made] for hire under

the
Act,
a
court first should ascertain, using principles of [the]

general common law of agency, whether the work was prepared by an

employee or an independent contractor. After making this

determination
, the court can apply the appropriate subsection of S

101." Id. at 750-51. The Court provided a nonexhaustive list of

factors courts should use "[i]n determining whether a hired party

is an employee under the general common law of agency." Id. at

751. This list includes the following:

the
hiring
party's right to control the manner
and
means
by
which the product is accomplished
. . . . the skill required; the source of the
instrumentalities and tools; the location of
the work; the duration of the relationship
between the parties; whether the hiring party
has
the
right to assign additional projects to
the hired party; the extent of the hired
party's discretion over when and how long to
work;
the
method of payment; the hired party's
role in hiring and paying assistants; whether
the work is part of the regular business of
the hiring party; whether the hiring party is
in business; the provision of employee
benefits; and the tax treatment of the hired
party.

Id. at 751-52 (footnotes omitted) (citing Restatement (Second) of

Agency S 220(2) (1958)). The Court completed its discussion of

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these factors by cautioning that "[n]o one of these factors is

determinative." Id. at 752.

Under this standard, the appellate record indicates

that
Durkin
cannot
escape the reasonable inference that he prepared

these texts both while he was a Saenger employee and within the

scope of his employment with Saenger. The evidence demonstrates

that
the
overwhelming majority of the agency factors that the CCNV

Court highlighted point to the existence of an employment

relationship between Durkin and Saenger.

For instance, on Durkin's version of events, he and

Saenger recognized that he had some remaining work obligations to

another organization, ETS, but agreed in April 1986 that he would

begin to work on these texts immediately. Specifically, they

agreed
that
Durkin
would
work nights and weekends on developing the

manuals, prior to his being able to assume his full-time position

as
Saenger's
vice president in July 1986. Thus, a fair reading of

Durkin's
own
affidavit
indicates that the agreement he reached with

Saenger
addressed the issues of when and how long he would work on

the manuals even as to the period of time between April and July

1986. In Durkin's words, "Even though I was employed by another

organization at the time [viz., April 1986], Saenger and I agreed

that
I
would
develop
these manuscripts . . . in the evenings and on

weekends." Under CCNV, this feature of the Durkin-Saenger

agreement points towards the existence of an employment

relationship.

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Furthermore, regardless whether Durkin actually wrote

the manuals from scratch (as he alleges) or merely contributed to

them by modifying and expanding pre-existing material (as Saenger

counters), it is undisputed that Durkin performed this work for

Saenger and at its specific behest. Despite his arguments to the

contrary, Durkin's affidavit in opposition to the preliminary

injunction indicates that Saenger retained a right to control the

manner
and
means by which the contested works -- Life and Property

--
were
produced.

This
feature of the Durkin-Saenger relationship,

too, militates in favor of a finding of employee status.

Specifically, Durkin swears that, pursuant to the

alleged April 1986 oral agreement, Durkin "would develop" written

material, Saenger "would process" this material, and Durkin would

subsequently "edit and proofread" the text prior to printing.

Indeed,
the
record
indicates that Saenger's office was an important

source
of
the
instrumentalities, tools, and human resources used in

producing the works in question. According to the affidavit of

Nancy Nisil, a word processing clerk at Saenger, Nisil received

handwritten
sheets of paper from Durkin during the months of April

and
May
1986
"on
an
almost daily basis . . . which I converted into

Property . . . and Life . . . which were later to my knowledge

published
by
The Saenger Organization." (emphasis added). Nisil's

affidavit is corroborated by that of another Saenger word

processing
clerk, Tina Petitt, which relates that she too received

handwritten sheets of paper from Durkin during April and May 1986

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"on
an
almost daily basis" that she "converted into Property . . .

and Life." (emphasis added). The use of Saenger word processing

equipment
and
personnel
in the production of the works in question,

and
the
level
of
Saenger
control over the means of their production

that such use entails, suggests the existence of an employer-

employee relationship between Saenger and Durkin.

The understanding of the parties as to the nature of

their relationship is also probative of the existence of a

conventional master-servant relationship as understood by common

law agency doctrine. See Restatement (Second) of Agency S

220(2)(i)
(noting
that
"whether or not the parties believe they are

creating the relation of master and servant" is a matter to be

considered, among others, in determining whether one acting for

another is a servant or an independent contractor). While Durkin

would have us believe that the April 1986 oral agreement was a

partnership agreement, the record evidence fails to substantiate

this theory. On the contrary, the record facts indicate that

Durkin himself understood the April 1986 oral agreement to

constitute an agreement regarding his employment with Saenger.

Turning
again to his preliminary injunction affidavit,

Durkin's words on this point are illuminating, albeit not in the

way he would like us to understand them: "Even though I was

employed by another organization at the time [viz., April 1986],

Saenger and I agreed that I would develop these manuscripts . . .

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in the evenings and on weekends." (emphasis added). Durkin's use

of
the
word
"another" is pregnant with meaning in the context that

confronts us. The dictionary defines the adjective "another" as

"different
or
distinct
from the one first named or considered," and

as "being one more in addition to one or a number of the same

kind." Webster's Third New International Dictionary 89 (1986).

When Durkin refers to his employment with another organization

(i.e.,
ETS),
it
would
appear that he understood the April 1986 oral

agreement to have provided him with a new employment relationship

with Saenger, even as to the period of time between the April

agreement
and his assumption of full-time duties as Saenger's vice

president
in
July 1986. Durkin appears to argue that he could not

have been Saenger's employee from April to July because he was an

ETS
employee
during that period. Durkin's own affidavit, however,

demonstrates
that
he
understood the April agreement with Saenger as

providing him with a part-time job that would entail evening and

weekend work commitments in addition to the responsibilities

associated with his other, full-time position with ETS. Durkin's

affidavit
further establishes that both he and Saenger agreed that

this moonlighting arrangement would continue until Durkin

discharged
his remaining commitment to ETS and thus became able to

assume
full-time
work
responsibilities as Saenger's vice president.

Importantly,
this
view
of the matter is one to which Durkin himself

subscribes. In his own affidavit as to economic loss, Durkin

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describes himself with the following words: "I am a former

employee of The Saenger Organization." (emphasis added).

Durkin's
own
apparent
understanding of his relationship

with
Saenger
thus suggests a finding of employee status. So, too,

does the duration of his work relationship with Saenger (some six

years);
the
method
of
payment used during this six-year period (the

provision
of
a
time-based, biweekly salary following the completion

of his employment with ETS); and, the provision of employee

benefits. Durkin's tax treatment also points to the existence of

employee
status. Durkin had both federal and state taxes withheld

from
his
Saenger paychecks, received W-2 forms for his salary, and

received
1099
miscellaneous forms for any bonuses that he received.

Finally, there is no dispute that Durkin's work for Saenger was

part
of
Saenger's
regular business, a factor that likewise suggests

the
existence of an employment relationship. The only CCNV factor

that works in Durkin's favor is the level of skill that was

presumably
required
to
develop these works, but this does not alter

the reality that the overwhelming majority of the agency factors

highlighted by the CCNV Court point to the existence of an

employment relationship between Durkin and Saenger.

On these undisputed facts, the district court was

correct
to
conclude
that
no reasonable juror could find in Durkin's

favor either that he was not employed by Saenger or that Life and

Property were not prepared by him within the scope of his

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employment with Saenger. Durkin's arguments to the contrary are

unavailing.

First, we cannot agree with Durkin's contention that

the
April
1986
oral
agreement "essentially moot[s]" the question of

whether Life and Property fall within the statutory definition of

works made "for hire." This view of the matter does not comport

with
either
17 U.S.C. S 101 or the Supreme Court's ruling in CCNV.

Second, even if one assumes that Durkin and Saenger

entered into the April 1986 oral agreement that Durkin describes,

Durkin's
legal theory that the agreement constituted a partnership

agreement is unsupported by the record evidence. While Durkin's

affidavit as to economic loss characterizes the alleged oral

agreement as a "partnership agreement" between himself and Bruce

Saenger,
on
closer
inspection that conclusory characterization does

not represent additional record evidence on the matter, but only

amounts to Durkin's "spin" on the facts.

Thus, Durkin himself describes the oral agreement in

his preliminary injunction affidavit only as one that delineated

employment responsibilities and payment issues. Nowhere in the

record does Durkin describe the agreement as one that even

mentioned the concept or elements of partnership. Most

significantly,
Durkin's
own description of the April 1986 agreement

makes no mention of an intent by the alleged principals to form a

partnership. See, e.g., Cardullo v. Landau, 105 N.E.2d 843, 845

(Mass.
1952)
(indicating
that a partnership under Massachusetts law

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is generally held to exist only where such is the intent of the

parties). On the contrary, "[t]he language throughout the

agreement
was
that
of
employment and not of partnership." Walsh v.

Atlantic Research Assocs., 71 N.E.2d 580, 584 (Mass. 1947). As

Durkin explains in his affidavit, the agreement provided that "I

would come to work for TSO [i.e., Saenger] as a Vice President."

(emphasis added). Especially where it is undisputed that Durkin

was
not
a
co-owner with Bruce Saenger of The Saenger Organization,

we cannot agree that a finder of fact could reasonably infer from

this manifestation of intent that the parties intended to form a

partnership
relationship. See, e.g., Shain Inv. Co. v. Cohen, 443

N.E.2d 126, 129 (Mass. App. Ct. 1982) (indicating that members of

a partnership are co-owners of a business, not just of a work

product, thereby distinguishing them from individuals in other

kinds of joint enterprises).

The
core
of
Durkin's partnership argument would appear

to be his contention that Saenger was to pay him "[f]or his work"

in developing and marketing the manuals by providing him with an

annual $42,000 salary and an equal share of the net revenues from

the
manuals
he
worked
on. This net revenue sharing, Durkin argues,

evidences the existence of a partnership between himself and

Saenger. But, even if we assume the allegation about revenue

sharing to be true, such an arrangement about how Durkin would be

paid for his work would do little to substantiate Durkin's

partnership theory because venerable and established law provides

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that one who is only interested in the profits of a business as a

means for compensation for services rendered (i.e., for his work)

is not a partner, but rather someone akin to a contractual

creditor.

See

Phipps

v.
Little, 100 N.E. 615, 615-16 (Mass. 1913);

Estabrook

v.
Woods
,
78
N.E. 538, 540 (Mass. 1906) (refusing to find

a partnership, despite a profit sharing arrangement, where the

arrangement was essentially compensatory in nature and the party

alleging the existence of a partnership "had no right to take

control
of
the business . . . or to interfere in the management of

it," even in the event of non-payment); see also Mass. Gen. Laws

ch.
108A,
S
7(4)(a)&(b) (providing that "[t]he receipt by a person

of a share of the profits of a business" is not "prima facie

evidence
that
he
is
a
partner" where "such profits were received in

payment" of, among other things, "a debt by instalments or

otherwise" or "[a]s wages of an employee").

Finally, the "partnership distributions" that Durkin

alleges to have received as his share of the "partnership's"

revenue
from
the copyrighted works in question were not treated as

royalties on his 1099 miscellaneous federal income tax forms, and

were, in fact, treated as compensation payments -- not as

partnership distribution income on K-2 forms -- for tax purposes.

As Saenger correctly points out, "[a]ll other references relating

to the so-called partnership agreement are lawyer argument."

Without evidence to support it, Durkin's conclusory legal opinion

that
the
oral
agreement
was a partnership agreement cannot serve as

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20

a
basis
for
a reasonable trier of fact to find that the agreement,

if
it
existed,
constituted a partnership agreement. In view of the

overwhelming factors present in the record favoring a finding of

employee status, we do not see any reason to view this case, as

Durkin
would
have us, through the rubric of Oddo v. Ries, 743 F.2d

630
(9th
Cir. 1984), a case that deals with the rights of partners

in copyrights held by their partnership.

Therefore, to the extent that Durkin was the actual

author of Life and Property, either in part or in their entirety,

under CCNV and 17 U.S.C. S 101, these works fall within the

category of "works made for hire." Under the work-for-hire

doctrine, as the Copyright Office correctly explained to Saenger,

"[i]f
an
individual contributes to or creates a work in his or her

capacity as either an officer or employee of a company or

organization,
the
work
is considered a 'work made for hire' and the

employer . . . [is considered] the author rather than the

individual." This scenario fully pertains here.

As indicated, where "a work [is] made for hire,"

federal copyright law provides that "the employer or other person

for whom the work was prepared" owns the copyright "unless the

parties have expressly agreed otherwise in a written instrument

signed
by
them."

17
U.S.C. S 201(b) (emphasis added). In light of

this statutory language, the fact that there is no written

agreement
between
the
parties regarding ownership of the copyrights

in Life and Property is dispositive regarding the validity of

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21

Saenger's copyrights. Durkin's protestations about the allege

e
d
oral agreement with Saenger concerning the ownership of thes

copyrights
is thus entirely beside the point. On these facts, and

given that Durkin conceded that he copied material from Life and

Property without Saenger's authorization, the district court

correctly
concluded
that
Saenger was entitled as a matter of law to

judgment in its favor on its copyright infringement claim. See

Feist
,
499
U.S. at 361; CMM Cable, 97 F.3d at 1513; Lotus, 49 F.3d

at 813.

The State Law Counterclaims

After Saenger brought its copyright infringement suit

in federal court, Durkin filed state law counterclaims against

Saenger alleging breach of agreement, fraud, and unfair and

deceptive
business practices (the latter under Mass. Gen. Laws ch.

93A)
on
the
ground that Saenger wrongfully obtained its copyrights

in
Life

and
Property

by
misrepresenting itself as the author of the

works, and thereafter failed to pay Durkin his share of the

revenues
from those works, pursuant to the alleged April 1986 oral

agreement.

The
district
court entered summary judgment for Saenger

on these claims on the basis that they were barred by the

Massachusetts
statute
of
limitations and statute of frauds. Durkin

appeals these determinations. For the reasons that follow, we

agree with the result reached by the district court.2

2. While the Copyright Act expressly preempts all causes of
action that fall within its scope, with a few narrowly drawn
exceptions, see 17 U.S.C. S 301; Data Gen. Corp. v. Grumman

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22

We begin by noting that a six year statute of

li t

See Mass. Gen. Laws ch. 260, S 2. A shorter four year

statute pertains to chapter 93A actions claiming unfair and

deceptive business practices, see Mass. Gen. Laws ch. 260, S 5A,

while
an
even
shorter
three year statute of limitations pertains to

causes of action alleging fraud. See Mass. Gen. Laws ch. 260, S

2A.

Under Massachusetts law, an action for breach of

contract
mitations applies in Massachusetts for breach of contrac
actions. generally accrues at the time of breach, thereby

triggering the statute of limitations for purposes of determining

Sys. Support Corp., 36 F.3d 1147, 1164-65 (1st Cir. 1994),
and while the district court's preliminary injunction ruling
referred to this fact, see Saenger Org., Inc., v. Nationwide
Ins. Licensing Assocs., Inc., 864 F. Supp. 246, 250 n.4 (D.
Mass. 1994), the preemption issue was not briefed or argued
on appeal. We need not reach the question of whether
Durkin's state law theories of recovery -- all of which in
some manner address themselves to the question of who owns
the copyrights in Life and Property -- are equivalent to
protections afforded by federal copyright law, and are thus
preempted, because our analysis today indicates that Durkin's
asserted state claims are not viable in any event. The issue
is not purely academic, however, and we note that at least
one federal court that has addressed a similar situation has
found preemption. See Miller v. CP Chemicals, Inc., 808 F.
Supp. 1238, 1246 (D.S.C. 1992) ("The Copyright Act affords a
presumption to the employer, under the work for hire
doctrine, that the employer shall receive the copyright, and
that such presumption will not be rebutted except by a
writing signed by the employer. If the employee can bring a
lawsuit under state law based upon an alleged oral promise,
then the presumptions created under the Copyright Act would
be substantially, if not, totally undermined. The court
finds that the plaintiff's breach of employment contract is
an artful restructuring of the copyright claim and is,
therefore, preempted.").

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23

whether
a
claim
is
time-barred. See International Mobiles Corp. v.

Corroon
&
Black/Fairfield & Ellis, Inc., 560 N.E.2d 122, 126 (Mass.

App. Ct. 1990) (citing Campanella & Cardi Constr. Co. v.

Commonwealth, 217 N.E.2d 925 (Mass. 1966) and Boston Tow Boat Co.

v. Medford Nat'l Bank, 121 N.E. 491 (Mass. 1919)). Durkin's

counterclaim regarding Saenger's breach of the alleged oral

agreement
would
be
time-barred under this standard rule inasmuch as

the
breach,
on Durkin's version of events, occurred either in July

1986, when Saenger improperly completed the initial copyright

applications, or November 1986, when Saenger submitted the

applications to the Copyright Office and thus "fraudulently"

secured copyright registrations dated effective as of that month

and
date.

Se
e 17 U.S.C. S 410(d) (governing the effective date of

a
copyright
registration). On either contingency, Durkin's breach

of
contract
claim,
his
chapter 93A action, and his vaguely asserted

fraud cause of action would be time-barred because they were not

filed until August 1994, thereby falling outside the respective

six, four, and three year limitations periods.

Durkin concedes as much and urges us, as he urged the

district court, to accept his theory that the Massachusetts

"discovery
rule" applies to his situation. The discovery rule can

operate to delay the accrual of a cause of action because it

provides that "[a] cause of action will accrue when the plaintiff

actually
knows of the cause of action or when the plaintiff should

have
known
of the cause of action." Riley v. Presnell, 565 N.E.2d

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24

780, 785 (Mass. 1991) (emphasis added). Durkin argues that the

district court wrongly granted summary judgment for Saenger

because, as a matter of Massachusetts law, he was entitled to an

opportunity
to
persuade
a jury that he actually knew or should have

known
of
Saenger's allegedly wrongful conduct on a date that would

make his August 1994 filing timely under the statute of

limitations. In support of this contention, Durkin quotes Riley

for
the
proposition
that
"where, as here, the plaintiff has claimed

a trial by jury, any disputed issues relative to the statute of

limitations ought to be decided by the jury." Id. at 787.

Specifically, Durkin's theory is that he did not know

in actual fact of Saenger's wrongful behavior until April 1992

when, one day, he accidentally came across the file labelled

"COPYRIGHT INFO." Moreover, Durkin contends that there was no

reason that he should have known of Saenger's fraud, breach of

agreement, or deceptive and unfair business practices before then

because he reasonably and justifiably relied on Saenger's

representations
regarding
ownership of the copyrights. On Durkin's

view of the matter, Saenger was his partner and therefore Durkin

had
every
reason
to
believe that Saenger would do what he agreed to

do about the copyrights and had no reason to believe that he

(Saenger) would do otherwise.

Durkin's
theory lacks merit. "Under the Massachusetts

discovery rule, the running of the statute of limitations is

delayed
while 'the facts,' as distinguished from the 'legal theory

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25

for the cause of action,' remain 'inherently unknowable' to the

injured party." Catrone v. Thoroughbred Racing Ass'n of N. Am.,

Inc., 929 F.2d 881, 885 (1st Cir. 1991) (emphasis added) (quoting

Gore v. Daniel O'Connell's Sons, Inc., 461 N.E.2d 256, 259 (Mass.

App.
Ct.
1984)); see also Williams v. Ely, 668 N.E.2d 799, 804 n.7

(Mass. 1996) ("Some of our opinions have stated that a plaintiff

seeking to show that the statute of limitations did not begin to

run
must
demonstrate that the claim was 'inherently unknowable,' a

standard that is no different from, and is used interchangeably

with,
the
'knew or should have known' standard.") (emphasis added)

(construing Riley). Durkin does not contend that the facts he

discovered
in April 1992 were somehow inherently unknowable to him

so much as he argues that they were unknown to him. Therefore,

despite his protestations to the contrary, Durkin's state law

counterclaims are all time-barred on the basis of the undisputed

facts and the applicable Massachusetts law. This conclusion is

reached no matter how one chooses to view the issue.

First, although there is some dispute as to when in

1986 the initial copyright application was completed, it is

undisputed that sometime in 1986 Durkin was present in the room

when Saenger drafted the application which listed The Saenger

Organization alone as the copyright's owner. Because Durkin was

not listed as a co-owner, as Durkin alleges Saenger had agreed he

would
be,
Saenger breached the oral agreement in Durkin's presence

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26

in 1986.3 If Durkin saw the document at that time, then he was

aware of the breach and the statute of limitations was duly

triggered. Durkin, however, denies seeing the application and

instead argues that he did not bother to look at it or to examine

whether the information contained therein was correct or not.

Durkin justifies his actions (or rather, inaction) by arguing, in

essence, that he felt fully justified in relying on Saenger, a

partner, to do what they had agreed. As our previous discussion

explains,
there
is
no
evidence that Durkin and Saenger entered into

a partnership agreement, and certainly not in the legal sense of

that term. Even if we assume such an agreement, Durkin's

deliberate indifference to what was contained in the copyright

applications
-- information that was inherently knowable to him --

cannot serve to toll the running of the statute of limitations.

See El y, 668 N.E.2d at 804 n.7 (describing the Massachusetts

standard
for
determining when a plaintiff can avail himself of the

discovery rule).

Durkin's reliance on Riley is thus misplaced because

that case does not vitiate the standard rule that a "nonmoving

party
can
fend off a motion for summary judgment [only] by setting

forth
specific
facts
sufficient to demonstrate that every essential

element
of
its
claim
or
defense is at least trialworthy." Catrone,

929 F.2d at 884. That standard is not met here. Under

3. We primarily analyze the facts against Durkin's contract
theory of recovery because that cause of action has the most
generous limitations period (viz., six years).

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27

Massachusetts
law, "[t]he plaintiff bears the burden of presenting

facts sufficient to take the case outside the statute of

limitations." Id. at 885 (citing Franklin v. Albert, 411 N.E.2d

458,
463
(Mass. 1980)). Here, there is no trialworthy issue as to

the statute of limitations question because there is not "enough

evidence for a jury to return a verdict for the nonmoving party."

Id. at 884-85 (citing Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 249-50 (1986)). No reasonable juror could fail to find that

Durkin should have known the facts underlying his cause of action

for breach of agreement, or that such facts were knowable to him,

see

Catrone
,
929
F.2d
at
885; Ely, 668 N.E.2d at 804 n.7; Gore, 461

N.E.2d
at
259,
at
the
time in 1986 that the application was drafted

in his presence with the prejudicial omission of his name.

Second, it is undisputed that Saenger applied for and

received
copyright registration certificates for Life and Property

from the Copyright Office. Under federal copyright law,

recordation of a document in the Copyright Office "gives all

persons constructive notice of the facts stated in the recorded

document." 17 U.S.C. S 205(c). A copyright registration

certificate issued by and filed with the Copyright Office thus

serves
to
put the world on constructive notice as to the ownership

of the copyright and of the facts stated in the registration

certificate. In this way, the Copyright Act's protections are

analogous
to
the
protections that federal law affords patents. See

Wise

v.
Hubbard
,
769
F.2d 1, 2 (1st Cir. 1985) ("The United States

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28

Supreme Court has consistently held that the issuance of a patent

and
its
recordation in the Patent Office constitutes notice to the

world of its existence.") (citing Sontag Chain Stores Co. Ltd. v.

National Nut Co. of Cal., 310 U.S. 281, 295 (1940); Wine Ry.

Appliance Co. v. Enterprise Ry. Equip. Co., 297 U.S. 387, 393

(1936); Sessions v. Romadka, 145 U.S. 29, 50 (1892); Boyden v.

Burke
,
14
How.
(55
U.S.)
575, 582 (1852)). On the undisputed facts

of
the
case,
therefore,
Durkin had constructive notice of Saenger's

claim
of
exclusive
ownership of the copyrights in Life and Property

as of November 1986, the effective date of registration for both

works.

Third, it is undisputed that all of the manuals that

Saenger published, including those at issue in this case, openly

displayed a United States copyright notice that announced to the

world that Saenger was the copyright owner. Inasmuch as Durkin

concedes
that
he
worked
on and with these same materials during the

period that he worked at Saenger (1986-1992), Durkin must be

presumed to have had actual notice that Saenger had breached the

terms of the alleged oral agreement more than six years before he

filed his contract counterclaim in August 1994.

Durkin's argument that the discovery rule tolls the

statutes
of
limitations on his state law counterclaims until April

1992,
when
he stumbled upon the "COPYRIGHT INFO." file at Saenger,

is
thus
unavailing.

Durkin was at best deliberately indifferent as

to
what
was
contained in the copyright applications when they were

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29

drafted
in
his
presence
and he was constructively, if not actually,

on notice of Saenger's incompatible claim of exclusive copyright

ownership.

Saenger's
alleged fraud, breach, and deceptive business

practices were thus knowable to him in 1986 had he exercised

minimal
and
reasonable
diligence. By no stretch of the imagination

were
the
facts
of
which
Durkin complains "inherently unknowable" to

him
prior
to
April
1992.
Catrone, 929 F.2d at 885; Ely, 668 N.E.2d

at 804 n.7; Gore , 461 N.E.2d at 259.

In view of these undisputed facts and the applicable

legal
standards,
no
reasonable juror could fail to find that Durkin

knew or, through reasonable diligence, should have known of

Saenger's
claim
of
exclusive ownership of the copyright in Life and

Property more than six years before he filed his counterclaim for

breach of agreement, more than four years before he filed his

chapter
93A
action
for
deceptive and unfair business practices, and

more
than
three years before he filed his cause of action alleging

fraud.

Therefore, Durkin's counterclaims were extinguished by the

limitations period as a matter of law. See Daboub v. Gibbons, 42

F.3d
285,
291 (9th Cir. 1995) (upholding grant of summary judgment

on ground that state law causes of action, raised in context of

copyright infringement case, were time-barred given what and when

the plaintiffs actually knew, or through reasonable diligence,

should have known about allegedly wrongful conduct).

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30

Durkin's fallback position is similarly unpersuasive.

Specifically, Durkin argues that the statutes of limitations

applicable
to his counterclaims should be tolled pursuant to Mass.

Gen.
Laws
ch. 260, S 12 because Saenger fraudulently concealed his

alleged breach of agreement and deceptive business practices. We

need not dwell on this argument. "Where a fiduciary relationship

exists, the failure adequately to disclose the facts that would

give
rise
to
knowledge of a cause of action . . . is equivalent to

fraudulent
concealment
for purposes of applying S 12." Demoulas v.

Demoulas Super Markets, Inc., 677 N.E.2d 159, 174 (Mass. 1997).

Here,
however, as we have discussed, there was no partnership, and

thus
no
fiduciary
relationship, between Durkin and Saenger. In the

absence of a fiduciary relationship, "'the estoppel provision of

Mass.
Gen.
Laws
Ann.
ch.
260, S 12 is generally not available where

the plaintiff is capable of discovering the facts allegedly

concealed.'" Wise, 769 F.2d at 4 (quoting Burbridge v. Board of

Assessors, 417 N.E.2d 477, 480 (Mass. App. Ct. 1981)). As

discussed
above, Durkin was fully capable of discovering the facts

that Saenger allegedly concealed from him through the expenditure

of but minimal effort. Finally, nothing in the record suggests

fraudulent concealment. Saenger secured valid copyright

registrations and affixed copyright notices to the works in

question, which Durkin worked on over a period of many years. As

Saenger correctly argues: "Public notice is not concealment.

Public display is not deception."

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31

Our resolution of the statute of limitations issue

obviates our need to consider the dispute between the parties

regarding
the statute of frauds. In short, the fact that Durkin's

counterclaim for breach of contract was extinguished by the

limitations period essentially moots the question of whether the

April
1986
oral
agreement could have been enforced despite the fact

that it was never memorialized in a writing.

Conclusion

The
district
court
properly found that no genuine issue

of material fact existed as to Saenger's ownership of valid

copyrights and Durkin's infringement of them, and thus correctly

concluded that Saenger was entitled to judgment in its favor as a

matter of law. The district court also correctly determined that

the applicable Massachusetts statutes of limitations bar Durkin's

various state law counterclaims against Saenger. For the reasons

discussed above, we therefore ascribe no error to the district

court's rulings.

Affirmed. Costs to appellee.

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32