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American Board of Internal Medicine v. Sarah Von Muller

July 9, 2012


The opinion of the court was delivered by: Joyner, C.J.


This action is yet again before the Court for resolution of the Renewed Motion of Defendant/Counterclaim Plaintiff for Judgment as a Matter of Law and/or in the Alternative for a New Trial. For the reasons discussed below, these Motions shall be denied.

History of the Case

This case originated when the Defendant Counterclaim Plaintiff, Sarah Von Muller, M.D. ("Von Muller") sat for the board certification examination in gastroenterology given by Plaintiff, American Board of Internal Medicine ("ABIM") in November, 2008. Specifically, Plaintiff alleged that approximately one month before taking the November 2008 examination for board certification in gastroenterology, Defendant Von Muller purchased actual ABIM gastroenterology exam questions from Arora Board Review for $480 plus her promise to provide actual test questions to Arora after she took the examination. Given that its examination questions are and were copyrighted and trade secret-protected, ABIM asserted that in so doing, Von Muller acted unlawfully in violation of its copyright and trade secret rights and in breach of the "Pledge of Honesty" which she signed at the time she took the examination. The case was tried over a period of twelve days commencing on February 21, 2012, and resulted in a verdict in favor of ABIM and against Von Muller in the amount of $91,114.00.

By the motions now before us, Defendant renews the Motion for Judgment as a Matter of Law which she filed as to all of ABIM's claims at the close of its case and moves for a New Trial on the basis of numerous assignments of trial error. Standards Governing Motions for Judgment as a Matter of Law and

Motions for a New Trial

Fed. R. Civ. P. 50 outlines the principles and procedures for moving for the entry of judgment as a matter of law and, under certain circumstances, for conditional rulings on a motion for a new trial. Fed. R. Civ. P. 59 typically otherwise addresses motions for a new trial. Specifically Rule 50 provides as follows in pertinent part:

(a) Judgment as a Matter of Law.

(1) In General. If a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue, the court may:

(A) resolve the issue against the party; and

(B) grant a motion for judgment as a matter of law against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue.

(2) Motion. A motion for judgment as a matter of law may be made at any time before the case is submitted to the jury. The motion must specify the judgment sought and the law and facts that entitle the movant to the judgment.

(b) Renewing the Motion After Trial; Alternative Motion for a New Trial. If the court does not grant a motion for judgment as a matter of law made under Rule 50(a), the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion. No later than 28 days after the entry of judgment - or if the motion addresses a jury issue not decided by a verdict, no later than 28 days after the jury was discharged - the movant may file a renewed motion for judgment as a matter of law and may include an alternative or joint request for a new trial under Rule 59. In ruling on the renewed motion, the court may:

(1) allow judgment on the verdict, if the jury returned a verdict;

(2) order a new trial; or

(3) direct the entry of judgment as a matter of law.

(c) Granting the Renewed Motion; Conditional Ruling on a

Motion for a New Trial.

(1) In General. If the court grants a renewed motion for judgment as a matter of law, it must also conditionally rule on any motion for a new trial by determining whether a new trial should be granted if the judgment is later vacated or reversed. The court must state the grounds for conditionally granting or denying the motion for a new trial.

(2) Effect of a Conditional Ruling. Conditionally granting the motion for a new trial does not affect the judgment's finality; if the judgment is reversed, the new trial must proceed unless the appellate court orders otherwise. If the motion for a new trial is conditionally denied, the appellee may assert error in that denial; if the judgment is reversed, the case must proceed as the appellate court orders.

(d) Time for a Losing Party's New-Trial Motion. Any motion for a new trial under Rule 59 by a party against whom judgment as a matter of law is rendered must be filed no later than 28 days after the entry of the judgment.


Thus, Fed. R. Civ. P. 50 provides an opportunity for a party to challenge, post-trial, the sufficiency of evidence evaluated by the jury and generally, a Rule 50 motion should be granted only if the evidence is not sufficient for a jury reasonably to find liability. Brown v. Daniels, No. 06-3429, 2008 U.S. App. LEXIS 18251, 290 Fed. Appx. 467, 470 (3d Cir. 2008)(citing Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993)); Comaper Corp. v. Antec, Inc., Civ. A. No. 05-1103, 2012 U.S. Dist. LEXIS 46761 at *7 - *11 (E.D. Pa. April 2, 2012). In other words, to prevail on a renewed motion for judgment as a matter of law following a jury trial, the moving party "must show that the jury's findings, presumed or express, are not supported by substantial evidence or, if they were, that the legal conclusions implied by the jury's verdict cannot in law be supported by those findings." Laboratory Skin Care, Inc. v. Limited Brands, Inc., Civ. A. No. 06-601, 2011 U.S. Dist. LEXIS 100786 at *4 (D. Del. Sept. 8, 2011)(quoting Pannu v. Iolab Corp., 155 F.3d 1344, 1348 (Fed. Cir. 1998) and Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893 (Fed. Cir. 1984). "Substantial evidence" is defined as "such relevant evidence from the record taken as a whole as might be accepted by a reasonable mind as adequate to support the finding under review." Id. (quoting Perkin-Elmer, supra.).

In assessing the jury's findings and "as with grants of summary judgment," the reviewing court must view the evidence in the light most favorable to the non-moving party, draw all reasonable inferences in favor of the nonmoving party, though it must refrain from weighing the evidence, making credibility determinations or substituting its own version of the facts for those found by the jury. Eshelman v. Agere Systems, Inc., 554 F.3d 426, 433 (3d Cir. 2009); Buczek v. Continental Casualty Ins. Co., 378 F.3d 284, 288 (3d Cir. 2004); Goodman v. Pennsylvania Turnpike Commission, 293 F.3d 655, 665 (3d Cir. 2002)(quoting Reeves v. Sanderson Plumbing Products, 530 U.S. 133, 150, 120 S. Ct. 2097, 147 L. Ed.2d 105 (2000)). Although judgment as a matter of law should be granted sparingly, it is appropriate where "the record is critically deficient of the minimum quantum of evidence" in support of the verdict. Eshelman, supra. In this regard, federal courts do not follow the rule that a scintilla of evidence is enough to deny the motion. Comaper, supra. (citing Reeves, 530 U.S. at 150-151).

Under Rule 59, "[t]he court may, on motion, grant a new trial on all or some of the issues - and to any party - as follows:

(A) after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court; or

(B) after a non-jury trial, for any reason for which a rehearing has heretofore been granted in a suit in equity in federal court.

Fed. R. Civ. P. 59(a). "A motion for a new trial must be filed no later than 28 days after the entry of judgment." Fed. R. Civ. P. 59(b). A motion for a new trial should be granted where (1) substantial errors occurred in admission or rejection of evidence, and where: (2) the jury's verdict is against the clear weight of the evidence, (3) newly discovered evidence exists that would likely alter the outcome of the trial, (4) improper conduct by an attorney or the court unfairly influenced the verdict, (5) the jury's verdict was facially inconsistent or, (6) the verdict is so grossly excessive or inadequate as to shock the conscience. Goodman, 293 F.3d at 676 (citing Becker v. ARCO Chemical Co., 207 F.3d 176, 180 (3d Cir. 2000); Comaper, 2012 U.S. Dist. at *10 (citing Suarez v. Mattingly, 212 F. Supp. 2d 350, 352 (D. N.J. 2002)); Marcavage v. Board of Trustees of Temple University, 400 F. Supp. 2d 801, 804 (E.D. Pa. 2005). Determining whether to grant a new trial is within the sound discretion of the trial court. Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S. Ct. 188, 191, 66 L. Ed.2d 193 (1980); Wagner v. Fair Acres Geriatric Center, 49 F.3d 1002, 1017 (3d Cir. 1995); Sabinsa Corp. v. Creative Compounds, LLC, Civ. A. No. 04-4239, 2012 U.S. Dist. LEXIS 7460 at *5 (D. N.J. Jan. 23, 2012).


1. Renewed Motion for Judgment as Matter of Law.

In support of the within motion, Defendant Dr. Von Muller re-asserts that judgment as a matter of law should have been entered in her favor because ABIM put forth no evidence of actual damages in this case and because ABIM's breach of contract claim should have been stricken as duplicative of its claim for copyright infringement.

A. Damages Evidence.

First, Defendant argues that Plaintiff failed to present any evidence that it sustained any actual damages as a result of her infringement of the copyrighted test questions or her breach of the honesty pledge.

The Copyright Act of 1976, 17 U.S.C. §101, et. seq. protects "original works of authorship fixed in any tangible medium of expression," including literary works, and accords the authors of such works the exclusive rights of publication, copying, and distribution. Medical Education Development Services, Inc. v. Reed Elsevier Group, PLC, 2008 U.S. Dist. LEXIS 76899 at *14 (S.D. N.Y. 2008). To prove copyright infringement, a plaintiff must demonstrate ownership of a valid copyright and unauthorized copying of a work's original elements by the defendant. Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340, 361, 111 S. Ct. 1282, 1296, 113 L. Ed.2d 358 (1991); Dun & Bradstreet Software Services v. Grace Consulting, Inc., 307 F.3d 197, 206 (3d Cir. 2002).

Copyright registration is prima facie evidence of the validity and ownership of a copyright which gives rise to a rebuttable presumption of same. Educational Testing Service v. Katzman, 793 F.2d 533, 543 (3d Cir. 1986); IQ Group v. Wiesner Publishing, Inc., 409 F. Supp. 2d 587, 598 (D. N.J. 2006). Copying is proven by showing access to the work and substantial similarity between the two works. Dam Things from Denmark v. Russ Berrie & Co., 290 F.3d 548, 561 (3d Cir. 2002)(citing Whelan Associates, Inc. v. Jaslow Dental Lab, Inc., 797 F.2d 1222, 1231 (3d Cir. 1986)). The standard used to detect substantial similarity is "whether an ordinary lay observer would detect a substantial similarity between the works." National Conference of Bar Examiners v. Multistate Legal Studies, Inc., 413 F. Supp. 2d 485, 487 (E.D. Pa. 2005)(quoting Association of American Medical Colleges v. Mikaelian, 571 F. Supp. 144, 149 (E.D. Pa. 1983)). "Substantial similarity does not require verbatim copying... immaterial variations do not alter the conclusion that infringing material is substantially similar to copyrighted material." Id., (quoting Educational Testing Service v. Simon, 95 F. Supp. 2d 1081, 1088 (C.D. Cal. 1999)). Accordingly, it may be "entirely immaterial that in many respects plaintiff's and defendant's works are dissimilar if in other respects similarity as to a substantial element of plaintiff's work can be shown." Medical Development, 2008 U.S. Dist. LEXIS at *32 (quoting Churchill Livingstone, Inc. v. Williams & Wilkins, 949 F. Supp. 1045, 1055 (S.D. N.Y. 1996)). However, "the factfinder must [first] decide whether there is sufficient similarity between the two works in question to conclude that the alleged infringer used the copyright work in making his own." Kay Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 209 (3d Cir. 2005)(quoting Whelan Assoc., Inc. v. Jaslow Dental Lab., Inc., 797 F.2d 1222, 1232 (3d Cir. 1986). "At this stage of the inquiry, expert testimony is permissible to help reveal the similarities that a lay person might not ordinarily perceive." Id.

Under 17 U.S.C. §504, that portion of the Copyright Act which addresses damages, "[e]xcept as otherwise provided by this title, an infringer of copyright is liable for either ... the copyright owner's actual damages and any additional profits of the infringer ... or ... statutory damages..." 17 U.S.C. §504(a)(1), (2). "The award of the owner's actual damages looks at the facts from the point of view of the copyright owner; it undertakes to compensate the owner for any harm he suffered by reason of the infringer's illegal act." On Davis v. The Gap, Inc., 246 F.3d 152, 159 (2d Cir. 2001). Actual damages may include both the direct expenses resulting from the copyright infringement and the loss in the fair market value of the copyright. National Conference of Bar Examiners v. Multistate Legal Studies, Inc., 458 F. Supp. 2d 252, 260 (E.D. Pa. 2006). In assessing copyright damages, "courts must necessarily engage in some degree of speculation." Davis, 246 F.3d at 167 (quoting Stevens Linen Assoc. v. Mastercraft Corp., 656 F.2d 11, 14 (2d Cir. 1981)). So long as the amount of a damages award is based on a factual basis rather than "undue speculation," "some difficulty in quantifying the damages attributable to infringement should not bar recovery." Id., (citing 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright §14.02[A], at 14-12 (1999)). "In cases such as this, involving the infringement of secure standardized test questions, the loss in fair market value is appropriately calculated by determining the development costs for any infringed questions and infringed forms that are retired because of the compromise." National Council of Examiners for Engineering and Surveying v. Cameron-Ortiz, 626 F. Supp. 2d 262, 269 (D. P.R. 2009)(citing ETS v. Katzman, 793 F.2d at 543, "infringement of secure test questions 'renders the materials worthless.'").

Here, we find that, notwithstanding Defendant's arguments to the contrary, Plaintiff presented ample evidence of copyright infringement and that it sustained damages as a result of that infringement. First, as attested to by ABIM's President and Chief Executive Officer, all of ABIM's examinations are secure examinations given in secured testing centers, registered with the United States Copyright Office, and ABIM does not release its examination questions to the public. In addition, there was un-rebutted evidence that ABIM goes to great lengths to protect the confidentiality of its examination questions, including requiring all test takers to agree to abide by ABIM's Policies and Procedures and its "Pledge of Honesty," as a pre-condition to taking the examination, ...

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