[00:00:01] Speaker 04:
Good morning.

[00:00:02] Speaker 04:
And on behalf of my colleagues, Judge Hawkins and Judge Baio, welcome to the Ninth Circuit.

[00:00:08] Speaker 04:
We have one case set for argument today, and we have a number of cases that are on the calendar that have already been submitted.

[00:00:14] Speaker 04:
The following cases have been previously submitted.

[00:00:18] Speaker 04:
Balbi Moreno versus Bondi.

[00:00:21] Speaker 04:
Alvarez Meza de Garcia v. Bondi.

[00:00:25] Speaker 04:
Cavan v. Bisignano.

[00:00:29] Speaker 04:
Castro Rubio V. Bondi and Singh V. Bondi.

[00:00:33] Speaker 04:
The one case on the argument calendar is Permadev versus ImagPix, MaxMedia, and the parties have 15 minutes aside.

[00:00:42] Speaker 04:
So, Council, when you are ready.

[00:00:59] Speaker 01:
Thank you and may it please the court I'd like to reserve five minutes for rebuttal.

[00:01:08] Speaker 01:
May it please the court I'm Greg Hensrud of the Kleindienst firm I represent Maximedia Advertising Company.

[00:01:13] Speaker 01:
Before the court today is a relatively simple question, which is whether or not the district judge acted appropriately in determining that there was no ambiguity in a contract such that summary judgment was appropriate.

[00:01:30] Speaker 01:
We believe not only is that determination wrong, but in fact, summary judgment should have been entered for Maximedia Advertising Company.

[00:01:40] Speaker 01:
And there are four reasons for that.

[00:01:42] Speaker 03:
You're talking about the contract claim.

[00:01:44] Speaker 01:
I am.

[00:01:45] Speaker 01:
I am.

[00:01:45] Speaker 01:
And I think, Your Honor, that's sort of the predicate to everything we're here for today.

[00:01:49] Speaker 01:
We can talk about how it affects the other things.

[00:01:51] Speaker 01:
But realistically, that's essentially what I'm going to argue.

[00:01:53] Speaker 01:
I think it's the primary claim for all of them.

[00:01:57] Speaker 01:
So the first issue, as we always start in the law, is with the plain language of the agreement.

[00:02:03] Speaker 01:
And I won't go through the panel, all of the various portions of it, but I will say, rarely, if ever in my career, have I seen an opinion which outlines summary judgment

[00:02:15] Speaker 01:
with a rationale that excludes the very word that is the crux of this dispute, which is the word additional.

[00:02:25] Speaker 01:
If you look at the rationale that the district judge applied, it continues to discuss services, but never distinguishes or tells

[00:02:35] Speaker 01:
The reader how additional services does or doesn't play in to this dispute and what what were they paying for?

[00:02:44] Speaker 01:
What was the six percent for if it wasn't for what you claim are the non included additional services it I would just point to paragraph four answers your question exactly the client agrees to pay the agency and

[00:02:58] Speaker 01:
for all media placement slash buying an agency commission or fee.

[00:03:03] Speaker 01:
That is what the commission is for under the plain language of the contract.

[00:03:07] Speaker 01:
Media placement slash buying and the court will not find another provision outlining payment other than the additional services provision.

[00:03:18] Speaker 01:
And I think

[00:03:19] Speaker 01:
What's helpful in addition to the plain language for the panel to assess is the parallel structure that we see throughout the agreement.

[00:03:28] Speaker 01:
So in the beginning we have in the preamble services and a definition there, which again relates to the media placement slash buying issues.

[00:03:36] Speaker 01:
But then in paragraph one, when the subheading services is used, the first part specifically articulates

[00:03:45] Speaker 01:
the services necessary to purchase and place all media for client, specifically for television.

[00:03:53] Speaker 01:
If the court then moves to the fourth paragraph, the part I just read is the exact parallel of that.

[00:04:00] Speaker 01:
For those services, a commission of 6% will be paid.

[00:04:07] Speaker 01:
If you go back to paragraph one and look at the last sentence, additional services may include but are not limited to

[00:04:14] Speaker 01:
research, market planning, public relations, web digital design, and relevant for today, creative services.

[00:04:22] Speaker 03:
Prior to termination for terminating the contract, had your client ever submitted an invoice for additional services?

[00:04:36] Speaker 01:
Costs, Your Honor, and before the course of dealing for the contract, but between

[00:04:42] Speaker 01:
2020, when the contract was initiated in 2022, the services like post-production, et cetera, were not provided.

[00:04:50] Speaker 01:
There were no invoices provided for those.

[00:04:52] Speaker 03:
The answer to my question is no.

[00:04:54] Speaker 01:
Yes, with the caveat of that period of time, if that's what you're asking.

[00:04:57] Speaker 01:
The answer to the question is no.

[00:05:00] Speaker 01:
And I think when we get down the road into argument number four, I think it's relevant here, which is this court is charged with giving

[00:05:10] Speaker 04:
effect to the language of the agreement and the language of the agreement in paragraph five specifically says additional products and services and allowable expenses may be invoiced at any time so so for the July 8th 2022 letter er 1500 etc where in the first paragraph it says 3.1 or so million

[00:05:34] Speaker 04:
The contract would have allowed 3.1 million, 6.1 million, 12.1 million, whatever number your client thought was appropriate for these additional services.

[00:05:48] Speaker 01:
Those are distinguished.

[00:05:49] Speaker 01:
All I'm talking about is the copyright, the creative services.

[00:05:52] Speaker 01:
But as to those, the reason those came into play was because in the termination agreement, they demanded additional things like non-disparagement, et cetera.

[00:06:00] Speaker 01:
Those were not part of the contract.

[00:06:02] Speaker 01:
So he said, if you want non-disparagement, here's the price point.

[00:06:05] Speaker 01:
That was not a demand.

[00:06:07] Speaker 04:
Although the letter, if I'm reading it correctly, says they're in default by failure to make payment when due in the amount of 3.1, et cetera, related to advertising, marketing, and related services.

[00:06:19] Speaker 04:
and scheduled for the month of May 2022.

[00:06:23] Speaker 01:
Yeah, well there were.

[00:06:26] Speaker 01:
So at that time.

[00:06:29] Speaker 01:
We have not only the 1.38, there was additional services.

[00:06:34] Speaker 01:
The commissions piece was in there as well, Your Honor.

[00:06:39] Speaker 01:
I don't remember what the last roughly million dollars was at that point, but it was the 1.4 for the copyright, which is what we're here for today.

[00:06:47] Speaker 01:
The commissions that were on top of that had not been paid going back to March and going through to the end of the year.

[00:06:53] Speaker 01:
which were ultimately paid on August 31st and are not in dispute in this appeal.

[00:07:06] Speaker 01:
So moving back, I think the next sort of piece, moving forward quickly in order to address sort of the high notes, I think the next issue that's important is the absurdity of the result if this panel were to accept the definition that's being suggested by Promodep.

[00:07:23] Speaker 01:
If that interpretation were utilized for purposes of the contract, then the additional services, it says very clearly, may be provided, not that they must, and per their interpretation, would not be paid for, even if provided, because the payment has already been made, which is really the definition of illusory.

[00:07:46] Speaker 01:
You don't have to do it, and I'm not going to pay for it if you do do it.

[00:07:51] Speaker 01:
in terms of contractual interpretation, you have to give effect to those words and to do so in a way that would render the contract illusory is not one of the acceptable alternatives.

[00:08:04] Speaker 01:
If, for example, he produced zero creative, he would get 6%.

[00:08:11] Speaker 01:
If he produced 20,000 creative, he would get 6%.

[00:08:16] Speaker 01:
If they did a boatload of commissions,

[00:08:21] Speaker 01:
but zero creative, it would be the exact same as if they did very minimal and a ton of creative.

[00:08:30] Speaker 04:
But isn't the, I mean, maybe this is just another way of saying what you said the key issue is, but if one looks at paragraph four, the client will be charged for additional products and or services as ordered by the client, which are not part of the services covered by the terms of this agreement.

[00:08:45] Speaker 04:
So I mean, the contract question or one of the contract questions is, is what you claimed that you were owed part of the services covered by the agreement or not?

[00:08:59] Speaker 01:
Yeah.

[00:09:00] Speaker 01:
And I think the critical part there, Your Honor, is it says part of the services capitalized.

[00:09:05] Speaker 01:
So we then go back to the preamble.

[00:09:07] Speaker 01:
And those are advertising, marketing, and related services.

[00:09:10] Speaker 03:
The district court found, based in part on course of conduct, that the services that were attempted to be billed through this 1.38 million creative services were baked into Max Media's commission payments.

[00:09:30] Speaker 03:
Is it your position that that finding is clearly erroneous?

[00:09:34] Speaker 01:
Yes.

[00:09:35] Speaker 01:
Yeah, and the biggest reason is what I pointed out before with paragraph five, that ignores the fact that the invoice can be issued at any time.

[00:09:44] Speaker 01:
And if you look at that invoice, he even writes on it, can be issued at any time.

[00:09:48] Speaker 01:
So in order to reach that finding, you have to ignore the fact that he was allowed to invoice it at any time.

[00:09:54] Speaker 01:
And the contract clearly says that, so you can't ignore it.

[00:09:57] Speaker 01:
You can't use course of conduct when the very contract says,

[00:10:00] Speaker 01:
I don't have to do it.

[00:10:02] Speaker 01:
And you're saying, because you didn't do it, I'm saying you don't have a contractual right.

[00:10:07] Speaker 01:
It's totally ignored and not addressed, if I recall correctly, in the district judge's opinion.

[00:10:15] Speaker 01:
And I think the last piece for purposes of today, since I'm running low on time, is giving effect to all of the language.

[00:10:24] Speaker 01:
And we've addressed a little bit some of it already.

[00:10:26] Speaker 01:
But I think the easiest one is paragraph four, where it says you're paying for media placement and buying, 6%.

[00:10:35] Speaker 01:
It doesn't say you're paying for services, 6%.

[00:10:37] Speaker 01:
It says you're paying for media placement and buying.

[00:10:40] Speaker 01:
This court will not find another provision other than the one that we emphasize that makes payment for anything else other than, quote, media placement and buying, which everyone admits the creative services are not.

[00:10:55] Speaker 01:
Moreover, why would the additional services provision even be in there when there is no provision for compensation for them?

[00:11:04] Speaker 01:
That would render the entire issue superfluous.

[00:11:09] Speaker 01:
But since I'm running low on time, I would make one note that I think is significant here, which is the district judge found that the contract language was so unambiguous as to render summary judgment appropriate.

[00:11:22] Speaker 01:
I'm before you today arguing it's

[00:11:24] Speaker 01:
clearly the opposite, i.e.

[00:11:26] Speaker 01:
it's so unambiguous that summary judgment should have been entered in front of Maximedia or in favor of Maximedia.

[00:11:32] Speaker 01:
But obviously there is a third alternative, right, which is there is ambiguity for a reasonable person reading this contract and that ambiguity ought to be decided by a trial.

[00:11:41] Speaker 01:
But of course that also would require this court to reverse the summary judgment ruling and remand for a trial on the issues.

[00:11:49] Speaker 01:
So I'll reserve the rest.

[00:11:50] Speaker 03:
Quick question.

[00:11:51] Speaker 03:
Did your firm try this case below?

[00:11:53] Speaker 01:
I mean, through summary judgment, yes.

[00:11:56] Speaker 03:
Yes.

[00:11:57] Speaker 03:
And you, were you the lawyer?

[00:11:58] Speaker 01:
Yes, I was one of them.

[00:12:00] Speaker 03:
And you or your firm was sanctioned?

[00:12:04] Speaker 01:
That's true.

[00:12:05] Speaker 03:
Based on the copyright claims?

[00:12:07] Speaker 01:
That is true.

[00:12:08] Speaker 03:
Okay, thank you.

[00:12:20] Speaker 03:
There's a button down there, and you can press it.

[00:12:23] Speaker 03:
She can help you with it.

[00:12:24] Speaker 00:
I think I'm going to need it.

[00:12:24] Speaker 00:
I think there's a little height.

[00:12:26] Speaker 03:
It'll lower it for you.

[00:12:28] Speaker 03:
Your friend on the other side is a little taller.

[00:12:31] Speaker 00:
There we go.

[00:12:31] Speaker 00:
Just a little taller.

[00:12:33] Speaker 00:
See how far down this goes.

[00:12:34] Speaker 03:
Wherever you want.

[00:12:37] Speaker 00:
OK.

[00:12:37] Speaker 00:
How's that, Your Honors?

[00:12:38] Speaker 00:
That's fine.

[00:12:38] Speaker 00:
Can you hear me?

[00:12:39] Speaker 00:
Yes.

[00:12:39] Speaker 00:
All right.

[00:12:40] Speaker 00:
Perfect.

[00:12:41] Speaker 00:
Thank you, Your Honors, and good morning.

[00:12:43] Speaker 00:
My name is Liana Bash, and I'm here on behalf of the appellee in this matter, Promadev LLC.

[00:12:49] Speaker 00:
And I think I'd like to start just by talking again, picking up where my friend on the other side left off, talking about the plain language of the contract.

[00:12:57] Speaker 00:
Because if you look at the contract, you can see there is no ambiguity.

[00:13:01] Speaker 00:
The district court did not find any ambiguity.

[00:13:04] Speaker 00:
Would you speak up a little bit more?

[00:13:06] Speaker 00:
Yes, I'm so sorry.

[00:13:07] Speaker 00:
Yes, Your Honor.

[00:13:08] Speaker 00:
How is that?

[00:13:08] Speaker 00:
Is that better?

[00:13:09] Speaker 02:
That's better.

[00:13:10] Speaker 00:
Perfect.

[00:13:10] Speaker 02:
Project please thank you.

[00:13:12] Speaker 00:
I'm so sorry so your honors looking at section one of the contract You'll see that this is a paragraph entitled services with a capital s and this portion of the contract defines services to include three categories of services

[00:13:27] Speaker 00:
First, there is the purchase and placement of TV media advertisement.

[00:13:33] Speaker 00:
Second, there is the purchase and placement of other types of advertising, including print, outdoor, et cetera.

[00:13:40] Speaker 00:
And third, there are additional services, which can include

[00:13:46] Speaker 00:
research, market planning, public relations, web, digital design, and creative services.

[00:13:51] Speaker 00:
And so that creative services language in paragraph one is really what is critical for our conversation here today.

[00:13:57] Speaker 00:
So when you look at this paragraph one, this is the definition of services, capital S, and that includes creative services.

[00:14:06] Speaker 04:
But it's additional services is the sentence.

[00:14:10] Speaker 04:
Additional services may include but are not limited to.

[00:14:14] Speaker 00:
That's correct your honor and so and I think when you look also at the preamble it defines the phrase services as advertising marketing and related services as more particularly described below and then when you look at paragraph one it explains services includes

[00:14:31] Speaker 00:
The this purchase and placement of different types of media and additional services including the the creative services is one bucket of Are you are you saying that in your view the last sentence of paragraph one?

[00:14:46] Speaker 04:
That those are included in the Commission structure.

[00:14:49] Speaker 00:
Yes, your honor.

[00:14:49] Speaker 04:
Okay, then then why would in paragraph four?

[00:14:53] Speaker 04:
The client will be charged for additional products and or services as ordered by the client

[00:15:00] Speaker 04:
So what is the difference between the free additional services at the end of paragraph one and the non-free additional services in paragraph four?

[00:15:11] Speaker 00:
So I'll say, Your Honor, the key language there in paragraph four is, the client will be charged for additional products and slash or services as ordered by the client, which are not part of the services capital S. So that is referring back to paragraph one, which does define these additional services, including creative services as part of- What kind of services would that be other than creative services?

[00:15:34] Speaker 00:
So that's that's a That actually is born out in the record there have there were additional services that were paid for separately One example of that you can find in the record on 7er 1586 and you'll see there It's a spreadsheet of expenses and other services that were paid for separately and there's a line item for add backup and file data restoration and that's a service that Maximedia provided to Promodav where it backed up

[00:16:02] Speaker 00:
certain ads and made sure that they were backed up to the cloud, and that was a fee that they invoiced $2,000 for.

[00:16:09] Speaker 00:
So in general, paragraph one services are broad.

[00:16:13] Speaker 00:
That's supposed to cover the range of the relationship between the parties, but this additional language in paragraph four about additional products and slash or services is still a catch-all for something else that might arise

[00:16:26] Speaker 00:
And that filed backup and file restoration is an example of how that actually played out between the parties I Also would note your honor setting aside the language of the contract the language of the con oh go ahead And you said there was an invoice for $2,000 for under paragraph 4 That's correct your honor.

[00:16:46] Speaker 02:
It was that with relation to the time of termination and

[00:16:49] Speaker 00:
So I believe, Your Honor, that that was an invoice of expenses that was sent around the time of termination.

[00:16:55] Speaker 00:
And when you look at, it's a spreadsheet of that specific record site.

[00:16:58] Speaker 00:
It has other expenses, for example, travel expenses, and those all were paid for by program.

[00:17:04] Speaker 02:
And did you client pay the $2,000?

[00:17:06] Speaker 00:
Yes, Your Honor.

[00:17:09] Speaker 00:
Yes, your honor.

[00:17:09] Speaker 00:
And we did, to be clear, the client paid all of those expenses and all of the outstanding monthly commissions before the agreement terminated by September 1st, 2022.

[00:17:21] Speaker 04:
Including the ones before the contract was signed?

[00:17:27] Speaker 00:
Yes, your honor.

[00:17:27] Speaker 00:
The ones before the contract was signed, those were also paid for.

[00:17:30] Speaker 00:
Yes.

[00:17:32] Speaker 00:
So the only outstanding amount that's at issue on appeal here is just that invoice for $1.38 million for creative services.

[00:17:41] Speaker 00:
And, Your Honors, under Washington law and what the district court did below was also look to the course of dealing of the parties, which to the extent there's any question about the language of the contract, the course of dealing of the parties shows

[00:17:56] Speaker 00:
Both parties mutual understanding was that the the creative services were baked into the monthly commission fee You can see that in the negotiations between the party in crafting this language before the contract was signed You can see it in the actual performance of the contract where you can see that as as noted today there was not a single invoice for creative services sent between the date the contract was signed on July 1st 2020 and

[00:18:26] Speaker 00:
and the date that my client issued its notice of termination on July 1st, 2022.

[00:18:31] Speaker 00:
And finally, if you look at the actual invoice at issue itself, you will see that it is a blanket request for $1.38 million without any

[00:18:42] Speaker 00:
itemization about what those services were, which advertisements they relate to.

[00:18:47] Speaker 00:
It just says $1.38 million for over 170 ads performed throughout the course of the relationship of the parties, some of which were from before the contract was even signed.

[00:19:00] Speaker 00:
So all of this evidence shows there can be no

[00:19:04] Speaker 00:
Genuine dispute of material fact whether any itemization submitted in the declarations of the Apple appellant There there was not so so actually in this case your honor the appellant did testify at his deposition originally that he had documents itemizing all of the creative services and

[00:19:27] Speaker 00:
that he had records showing how he got to that $1.38 million.

[00:19:33] Speaker 00:
My client requested that evidence in discovery and his counsel then had to withdraw that testimony and state in fact that he did not have any evidence and his declaration states that it was

[00:19:44] Speaker 00:
an estimate of services rendered.

[00:19:46] Speaker 00:
It was an estimate.

[00:19:48] Speaker 00:
It was his best estimate.

[00:19:49] Speaker 00:
The 1.3 is his best estimate.

[00:19:51] Speaker 02:
Post hoc.

[00:19:52] Speaker 00:
Post hoc, correct.

[00:19:53] Speaker 00:
Correct, your honor.

[00:19:54] Speaker 00:
And there were no records produced that support that $1.38 million number.

[00:20:06] Speaker 00:
Your honors and and I think just reiterating the point I was making about the invoice the invoice itself does does show reflect the the meat the intention of both parties And there is no evidence presented in the district court or referenced on appeal that that indicate any other reasonable inference that could be drawn I do note in their appellate brief appellant site to

[00:20:29] Speaker 00:
Several pieces of purported evidence showing that that the parties understood creative services would be invoiced separately But all of that evidence actually predates the signing of the contract so they do cite to a 2018 email asking for

[00:20:45] Speaker 00:
the amounts paid for creative services again that's before the contract was signed and that's when those services were paid for separately and they also reference the pre-agreement invoices that were sent.

[00:20:58] Speaker 02:
As to the pre-contract creative services invoices were they itemized?

[00:21:04] Speaker 00:
Yes, Your Honor.

[00:21:05] Speaker 00:
So if you look at the record at 7ER1634, that's an invoice that shows for three specific ads that each ad was invoiced $300 per ad for post-production services.

[00:21:20] Speaker 00:
And it actually lists the name of each advertisement.

[00:21:23] Speaker 00:
It lists $300 for each ad.

[00:21:25] Speaker 00:
And then it has a total of $900 charged for creative services.

[00:21:30] Speaker 00:
So again, comparing that to the invoice that's issued after the notice of termination is sent, there really can be no reasonable inference drawn from that invoice that anyone understood that that was inappropriate.

[00:21:43] Speaker 02:
Have you figured out how many hours $1.3 million at $300 works?

[00:21:50] Speaker 00:
So your honor, the $300 was per advertisement.

[00:21:54] Speaker 00:
So they were charging $300 per ad.

[00:21:59] Speaker 00:
So the math does not work out whatsoever on the 1.38.

[00:22:02] Speaker 00:
That is something like $7,000 per advertisement that were claimed to be at issue.

[00:22:12] Speaker 00:
Your honors I would like to also spend a little bit of time on the party's remaining claims unless you have other other questions about the contract I I heard the appellants council say today that all of these claims really rise and fall on the contract and I do want to note that even if the court were to rule against us on the interpretation of the contract

[00:22:32] Speaker 00:
these copyright and intellectual property claims that they allege in their opening brief still fail as a matter of law standing on their own.

[00:22:40] Speaker 00:
So the copyright claims do fall into sort of two buckets.

[00:22:45] Speaker 00:
There's a claim based on truly copyright that are based on eight copyrights that Maximedia registered.

[00:22:51] Speaker 00:
And I would just note, there's no possible, like, there's no support in the law

[00:23:00] Speaker 00:
Continuing on those copyright claims because there can be no copying by Promodav those claims all relate to ads that ran.

[00:23:07] Speaker 03:
These are ads that Promodav, your client, created.

[00:23:11] Speaker 00:
That's correct, Your Honor.

[00:23:12] Speaker 00:
They're ads that we created.

[00:23:13] Speaker 00:
I think there may be some disputes of fact between the parties about how much Maximedia might have assisted in that, but in general Promodav was responsible for the creative.

[00:23:22] Speaker 04:
But they placed the ads.

[00:23:24] Speaker 04:
They billed you and you paid.

[00:23:25] Speaker 00:
Correct.

[00:23:26] Speaker 04:
I mean you weren't doing your own placing.

[00:23:29] Speaker 00:
Correct, Your Honor.

[00:23:29] Speaker 00:
Yes, they placed the ads and for these ads that are at issue in this claim, these eight, they were placed by Maximedia and they ran while the contract was still in place in July and August of 2022.

[00:23:41] Speaker 00:
So there can be no argument whatsoever that Prometev engaged in any kind of illegal behavior.

[00:23:48] Speaker 00:
There are also some some claims referenced in the brief that I think are Not necessarily clear the legal theory But we wanted to make sure we briefed the the contracts non-compete provision just out of an abundance of caution And I would note your honor that that is is an issue that primitive

[00:24:06] Speaker 00:
raised in its complaint or that Maximedia raised in its counterclaims.

[00:24:11] Speaker 00:
Promotive moved for summary judgment on the breach of the non-compete agreement in the contract and Maximedia did not respond.

[00:24:21] Speaker 00:
So the district court found that that

[00:24:22] Speaker 00:
claim was waived I also would note your honors that they did not brief it or assign error to it in their opening brief to this court we again we briefed it out of an abundance of caution, but I my our position would be that that's been waived twice over And regardless it it is a claim that has no no merit No grounding in the contract which provides that the non-compete was only for placement of television services and the ads at issue were placed on digital streaming services and

[00:24:52] Speaker 00:
And finally, Your Honors, I would like to touch on the issue of fees, because that is something they've briefed, and I do think it's something that's important to discuss.

[00:25:00] Speaker 00:
There's a bit of confusion in the briefing.

[00:25:04] Speaker 00:
The district court below ordered attorney's fees would be granted to PromaDev based on, for its fees incurred in defending against the copyright claims.

[00:25:19] Speaker 00:
And as Your Honors noted earlier,

[00:25:21] Speaker 00:
The copyright claims were dismissed on summary judgment.

[00:25:25] Speaker 00:
The district court issued a show cause order asking Maximedia's counsel to explain why rule 11 sanctions should not be entered against them because of the frivolous nature of these copyright claims.

[00:25:36] Speaker 00:
And then after briefing from both parties, the district court then granted those rule 11 sanctions, finding that there was no basis in the law to pursue those copyright claims and that they were frivolous and bad faith litigation.

[00:25:49] Speaker 00:
Promotive then sought its fees in defending against those claims and that is what the district court granted the district court did not grant Fees to Promotive is the prevailing party under the contract the contract has no bearing whatsoever on this award of fees And the district court also did not grant any fees for example under Equitable theories these are purely copyright claims that were granted under the cop or copyright fees granted under the Copyright Act

[00:26:17] Speaker 00:
And the district court properly applied the factors laid out by this court in the shame on you case and and Found that those fees were appropriate given the extraordinary nature of this case and those claims interesting case title

[00:26:31] Speaker 00:
It is an interesting case title.

[00:26:33] Speaker 00:
It is.

[00:26:33] Speaker 00:
Shame on you.

[00:26:35] Speaker 00:
That is correct, Your Honor.

[00:26:37] Speaker 03:
I take it that when your client applied for fees, you distinguished between defending the contract action and fees, simply defending the copyright claim.

[00:26:50] Speaker 00:
Yes, Your Honor, when we originally moved below, we did.

[00:26:53] Speaker 00:
Yes.

[00:26:54] Speaker 00:
Yes.

[00:26:55] Speaker 00:
Yes, we did.

[00:26:55] Speaker 00:
We moved for both, and then we submitted supplemental briefing itemizing just the contract fees.

[00:27:01] Speaker 00:
And the district court actually still analyzed that, discounted those fees to what they thought was appropriate.

[00:27:07] Speaker 02:
Is there any claim by the appellant that the fees were calculated on incorrect hourly rates or the amount of hours?

[00:27:17] Speaker 00:
No, Your Honor, they have not raised those claims.

[00:27:19] Speaker 00:
The only argument I understand is that fees were improperly awarded.

[00:27:23] Speaker 00:
At all?

[00:27:23] Speaker 00:
Correct.

[00:27:24] Speaker 00:
Yes, correct, Your Honors.

[00:27:26] Speaker 00:
So Your Honors, with that, unless you have any further questions for me, I would say we respectfully urge that you affirm the district court in whole.

[00:27:35] Speaker 00:
Thank you.

[00:27:36] Speaker 04:
Thank you.

[00:28:05] Speaker 01:
All right, thank you.

[00:28:06] Speaker 01:
Let me address the sort of what I'll call the peripheral issues first and then get back to what I perceive to be the meat of it.

[00:28:14] Speaker 01:
The copyright-related claims obviously are twofold.

[00:28:19] Speaker 01:
The judge's first determination, i.e.

[00:28:23] Speaker 01:
that they had been paid for and therefore were owned by Promodev, is of course the crux of what we're here for.

[00:28:30] Speaker 01:
The second piece of that determination obviously would be an issue of fact in the event that the court were to overturn

[00:28:39] Speaker 01:
in the event that court would overturn the original contractual interpretation.

[00:28:44] Speaker 03:
Copyright infringement, when I went to law school, has two elements.

[00:28:48] Speaker 03:
One is the valid ownership of a copyright.

[00:28:52] Speaker 03:
Let's assume that you've satisfied that.

[00:28:55] Speaker 03:
The second element is copying.

[00:28:58] Speaker 03:
By what stretch of the imagination did Promodiv copy

[00:29:04] Speaker 03:
Copyrighted material.

[00:29:06] Speaker 01:
Use would be my phrase for the second part of it, Your Honor.

[00:29:10] Speaker 01:
But yes, the use component was using copyrighted material that they did not own, particularly, we emphasize- How used?

[00:29:17] Speaker 03:
How did they use it?

[00:29:18] Speaker 01:
Publication.

[00:29:19] Speaker 03:
By allowing it to go out?

[00:29:21] Speaker 01:
On Fox News, correct.

[00:29:22] Speaker 03:
Okay, which your client placed.

[00:29:25] Speaker 01:
the original placement was done and then during the disputed period there were two issues of fact if the court looks at my client's declaration he allowed it after being told that it would be paid for and obviously there was a reservation of rights at issue to say hey we're not saying that we're not getting paid for this but off we go and so it was determined at the time that it would be better for the parties

[00:29:49] Speaker 01:
to allow that to proceed as contractually obligated by Fox, not pull the plug, but without taking away those issues.

[00:29:56] Speaker 01:
And he was told at the time that he would be paid.

[00:29:59] Speaker 01:
Obviously, later, they were paid for a lot of it after hiring lawyers and lawsuits, but were never paid for the $1.38 million.

[00:30:06] Speaker 01:
And so that's the copyright-related issues, Your Honor.

[00:30:10] Speaker 01:
And then I think the other component before I sort of close on the contractual issues is the attorney's fees provision.

[00:30:16] Speaker 01:
The attorney's fees provision was not based on, if this panel reads the order, the copyrights that were not registered.

[00:30:26] Speaker 01:
It was based on all of them.

[00:30:28] Speaker 01:
The court did not attempt to distinguish the fact that

[00:30:30] Speaker 01:
some of them were registered copyrights.

[00:30:33] Speaker 01:
And Judge Hawkins, you'd asked this question.

[00:30:35] Speaker 01:
I was hoping to avoid it.

[00:30:36] Speaker 01:
We specifically did not appeal the sanctions issue, even though I vehemently disagree with it, because I think it distracts from my client's cause, and so I'm not going to address it here today.

[00:30:47] Speaker 01:
But we do believe that there's no question that copyright claims were being made

[00:30:53] Speaker 01:
We believe if the contract is read as we suggest it should be, correctly, and there's no doubt that those claims were appropriate.

[00:31:02] Speaker 01:
The issue is some of them were not registered yet.

[00:31:05] Speaker 01:
There was a motion to strike on that which was denied.

[00:31:07] Speaker 01:
We proceeded through discovery and ultimately limited those claims.

[00:31:11] Speaker 03:
The sum is like a hundred.

[00:31:13] Speaker 01:
It was.

[00:31:14] Speaker 01:
I think it was more, to be honest, yes.

[00:31:16] Speaker 03:
And the registered ones were what, eight?

[00:31:19] Speaker 01:
They were at the time, yeah.

[00:31:20] Speaker 01:
But obviously there were contractual issues that dealt with all of the 100, like who owned them.

[00:31:23] Speaker 01:
You know, Prometeve made that claim.

[00:31:25] Speaker 01:
So we were going to have to do that discovery anyway.

[00:31:27] Speaker 01:
Obviously, going back, I'd do it differently, but you know, that is what it is.

[00:31:31] Speaker 01:
And I don't want to distract from my client's cause.

[00:31:33] Speaker 01:
And in fact, I have 30 seconds, so I'll just make two final points.

[00:31:36] Speaker 01:
Number one, I think this panel cannot reconcile the first sentence of paragraph four with any interpretation other than ours.

[00:31:43] Speaker 01:
The only fee is for media placement and buying.

[00:31:46] Speaker 01:
And number two, I do not think the panel can place the weight that the district judge did on course of conduct

[00:31:53] Speaker 01:
because paragraph five says he can invoice at any time and he did so.

[00:31:58] Speaker 01:
You cannot then hold it against him that he didn't as a course of conduct argument when the contract itself says you can do it otherwise.

[00:32:06] Speaker 01:
So we believe that the contract on face favors my client's position and that summary judgment should be entered in his favor on the contract claims and then the other claims that will follow from that like copyright have other questions to be answered.

[00:32:19] Speaker 01:
But even in the event that the panel... Why don't you conclude, counsel?

[00:32:22] Speaker 01:
Yes.

[00:32:22] Speaker 01:
Even in the event you disagree with that, we think there's sufficient ambiguity for it to be reversed and sent back for trial effect.

[00:32:30] Speaker 04:
All right.

[00:32:30] Speaker 04:
We thank counsel for their arguments, and the case just argued is submitted.

[00:32:34] Speaker 04:
With that, we are adjourned for the day.