Copyright Claims Board Tackles Implied Licenses

In its first regular Final Determination in nearly two months, the Copyright Claims Board (CCB) has issued a decision in the case of Gervasi v. Nagle, ending a case that has been pending before the board for nearly two years.

On the surface, the case seems like it would be a poor fit for the CCB. It’s a case involving a documentary filmmaker who saw fairly significant unlicensed distribution of their work. To make matters more complicated, the case hinged, at least in part, on the question of whether or not the respondent had an implied license for their actions.

However, the board, as usual, did an excellent job parsing out the issues and reaching a decision. Though many, including myself, will be critical of the damages amount, the decision itself seems to be well-reasoned and in line with what I would have expected from a traditional court.

But, even with all the good work, the case does highlight some of the ongoing issues with the CCB and points to ways to improve the board’s operations.

Background of the Case

The Claim was filed by Susan Gervasi, a documentary filmmaker who operates under the name of “Lazy G Films.”

In 2008, she released a documentary entitled On the Trail of Jack Thorp. She began showing it at various film festivals and, at one of the festivals, she met the respondent, Patrick Nagle, in 2009.

The two struck up a conversation and, six years later, Neagle reached out about the possibility of licensing the film to universities and libraries through his company, Planet Group Entertainment. The two went back and forth discussing the terms of the deal and Neagle eventually sent over a distribution agreement.

However, Gervasi never signed the agreement. Instead, she continued to distribute the film herself and considered Neagle’s offer “a closed case.’ Nagle on the other hand, interpreted Gervasi’s initial enthusiasm for the deal as an implied license to move forward.

Then, in October 2021, Gervasi learned that Nagle had not only been selling copies of the film, but also public performance rights. According to Gervasi, this began in January 2016 and continued until at least after the claim was filed.

Gervasi consulted with a lawyer who advised her to register the work with US Copyright Office. The lawyer also sent a cease-and-desist letter to Nagle, which Gervasi claims he ignored though Nagle says he complied with.

Ultimately, Gervasi filed a claim with the Copyright Claims Board in August 2024, before the three-year statute of limitations would have expired.

Nagle, however, argued that he had a license to distribute the film. He argued that Gervasi’s actions amounted to an implied license and that his distribution of the film was legal. He further argued that any error was in good faith, driven in part by his health and financial issues, and that his sale of the film likely resulted in Gervasi making more money than she would have otherwise.

However, the board disagreed and ruled in favor of Gervasi. The board ordered Nagle to pay Gervasi $2,970 in damages, three times the amount of estimated revenue that Nagle earned.

Understanding the Decision

The facts of the case were largely undisputed. Both sides largely agreed on what happened, but they disagreed on their interpretations of those facts.

Nagle argued that Gervasi’s actions prior to the submitted agreement amounted to an implied license. Gervasi noted that she never signed the agreement and received no contact from Nagle for approximately six years.

The board agreed with Gervasi. Though it noted that non-exclusive licenses like this one can be granted without a written agreement, that wasn’t the case here. Nagle was presented with a formal agreement and never signed it. That is a very strong indication of her intent to not grant a license to Nagle or his company, regardless of prior enthusiasm.

However, even if Gervasi had agreed to a license, the lack of any payment from Nagle would have raised contract law (not copyright law) issues. Between that, the lack of communication between the parties and the unsigned agreement, the board ruled that there was no implied license.

The issue of damages, on the other hand, was thornier. According to the available evidence, Nagle had licensed the film to five libraries, each paying between $250 and $295 per copy. Nagle only had one consumer sale of the film, which was negligible in the final analysis.

The board determined that Nagle had received $1,340 in revenue attributable to the film. The board subtracted $350 in marketing expenses, leaving $990. That, as with other cases, was multiplied by three to reach the final damages amount of $2,970.

The amount was much lower than the $23,000 sought by Gervasi. However, that amount was well over what the board could issue in the case, which was capped at $7,500.

That, in turn, may be the biggest sticking point in the case.

Why the Decision Matters

This final determination isn’t going to do much to silence the critics of the CCB. While it’s likely accurate about the actual damages, we still have a fairly egregious infringement. Nagle licensed the film to five university libraries including Princeton and Cornell. He did this with no license and no payment or even communication with Gervasi.

While a 3X multiplier has been the standard for the CCB, the board acknowledges that the multiplier can be between 2X and 6X. This, to me, seems like a case where a higher multiplier would have been appropriate.

A 6X multiplier, for example, would have resulted in a $5,940 award, which is still under the $7,500 cap.

This would still be a major win for Nagle. He likely would have spent far more than that in legal fees if the case had gone to a regular court. However, it would have sent a much stronger message. This was a commercial infringement done after a written agreement was presented and rejected. If there were a time to raise the multiplier, this would be it.

But, the board didn’t.

To be clear, this is still a victory for Gervasi. It is unlikely that this case would have been practical in a regular court. Since she didn’t register the work timely, she would have been very limited on damages and unable to recover any of her costs. The CCB was easily the best option.

Still, the CCB takes a lot of criticism for its low-value awards and the lack of deterrence. This decision is not going to change that.

Though its reasoning is sound, the board missed an opportunity to send a stronger message.

Bottom Line

Implied license cases are often difficult to adjudicate. They rely on interpreting people’s actions and words to determine their intent. That is not easy.

However, this case was relatively straightforward. You had a written agreement that was offered but never signed. While Gervasi could have made her refusal more clear, the onus is still on the licensee to get the signed paperwork in a case like this. Moving forward with an implied license is rarely a good idea.

While I do have some sympathy for Nagle due to his health issues, ultimately, he had no reason to believe he had a license. Though his sales were low, he acknowledged that it was because Gervasi had continued selling the film on her site and on Amazon.

So, while the CCB’s evaluation was on point, the board missed an opportunity.

Still, I think both sides can walk away from this case and consider it a victory. While I doubt that either side will be happy with the outcome, both sides came out better than they would have been in a regular court.

That, in turn, may be the best argument in favor of the CCB.