• 11th Circuit Affirms Email Exchange as Contract

    by  • November 13, 2011 • copyright

    You may recall a dispute between an individual named Rafael Vergara Hermosilla and Coca-Cola about the ownership of Spanish lyrics Vergara wrote that Coca-Cola used in its World Cup advertising.  First, Vergara filed a motion for a preliminary injunction and Coca-Cola was ordered to provide credit to Vergara. The 11th Circuit affirmed. However, on summary judgment after a full review of the facts, the trial court determined that an email exchange between the parties was a fully formed assignment of the copyright from Vergara to Coca-Cola.

    The Court of Appeals for the 11th Circuit has now affirmed this holding also:

    The district court did not err by granting summary judgment in favor of Coca-Cola because the record establishes without dispute that Vergara assigned his copyright interest to Universal…. Vergara stated in his email on March 4, 2009, that his “only demand” to assign his copyright interest was that he receive credit as the adapter and producer. Puig [A representative for Coca-Cola] “unconditionally accepted” that condition in his email on March 5, 2009, in which he told Vergara to “count on the credits on the track.” Puig’s acceptance on behalf of Universal was effective to create a contract with Vergara because it “match[ed] the terms of [his] offer.”  The two emails were “so connected with each other that they may be fairly said to constitute a complete contract.”

    That Vergara and Universal intended to execute a “subsequent formal, written contract, does not denote that they did not intend to be bound immediately by their written negotiations.” Their emails do not contain any language from which “conflicting legal inferences could be drawn regarding the expressed intent of the parties so as to alter the legal effect of the undisputed facts of an offer by Vergara, acceptance, and communication of that acceptance” by Puig.

    To add insult to injury for Vergara, the district court has awarded Coca-Cola partial attorneys’ fees and costs to the tune of $578,146.99. Vergara had argued that “the issue of whether an email constitutes a signed writing for purposes of the Copyright Act was not previously addressed by the Eleventh Circuit or its District Courts” and therefore his claim was well-founded.  Summarizing the law, the magistrate disagreed and held that the argument was objectively unreasonable:

    Taking all this into account (Eleventh Circuit precedent linking the § 204(a) to state statutes of frauds, Vergara’s own assertion that state law governs the interpretation of copyright contracts, the ruling in this District that signed emails satisfies the Florida statute of frauds, a Florida statute specifically stating that electronic signatures have the same force as written signatures, a Florida case stating that a memorandum may take almost any possible form in order to satisfy the statute of frauds, and the text of the Electronic Signatures in Global and National Commerce Act) Vergara’s entitlement defense crumbles. It is neither objective nor reasonable for Vergara to have believed, despite the fact that a case on this extremely specific issue had not appeared before a court in this District, that any court in this District would rule any other way than that his email assignment
    of copyright interest was valid. Vergara in no way “took a reasonable stand on an unsettled principle of law.”

    At least Vergara can take some comfort that the amount of fees and costs was knocked down from $1.7M, with this colorful analogy:

    [“R]easonable” fee applications . . . are designed to provide adequate compensation that is reasonable to bill to one’s adversary irrespective of the skill, reputation or experience of counsel. In other words, one can drive from point A to point B in a Ferrari, a BMW, or a Ford Fusion. Which car one chooses is ordinarily a matter of personal style coupled with financial freedom. The successful personal injury or criminal defense lawyer may choose the Ferrari. The average corporate defense lawyer will wisely choose the BMW. But a successful attorney fee applicant can only choose the Ford Fusion.

    Vergara has also appealed the order granting attorneys’ fees.

    Vergara Hermosilla v. The Coca-Cola Co., No. 11-11317 (11th Cir. Nov. 3, 2011).

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