Summary of New Era Publications v Henry Holt and Co.

by David R. Tucker
3L, Boston College Law School

November, 1997

In an attempt to prevent the publication of Bare-Faced Messiah, New Era Publications Int'l., the Danish company which held the copyright on Hubbard's private papers, sued the book's publishers in the UK, Canada, and Australia, and also Henry Holt & Co. in the US, asking for injunctive relief. The author was not a party to the suit. (The US case's citation is New Era Publications Int'l. v. Holt, 685 F.Supp. 1493 (S.D.N.Y. 1988), affirmed in part and reversed in part by the US Second Circuit Court of Appeals in 873 F.2d 576 (2d Cir. 1989), rehearing in banc denied 29 Aug 1989). New Era's claim was that the quotes from Hubbard's unpublished papers were so many and so long that the copyright was infringed. The UK and Canadian cases were dismissed because New Era waited too long to ask for the injunction, to the publisher's detriment (laches). The Australian action was dropped.

In the US, the case was heard in the District Court for the Southern District of New York. Judge Pierre Leval denied the petition for an injunction, finding that the extensive quoting constituted "fair use" because the quotes were needed to illustrate the author's points. (The Court supported this conclusion with what might be called the Casereader's Digest Condensed Version of the book -- an extensive outline and summary of the book which, it can be noted, is in the public domain and hence would have been available even if the District Court had been overturned and the book had never appeared in the US.) The District Court did find infringement, but only in a few spots where the Court didn't think quotation was really needed. Injunctions are usual in copyright cases, but the Court held that monetary damages would be sufficient compensation in this case, and denied New Era's request for an injunction.

On appeal, a panel of the Second Circuit Court of Appeals disagreed, saying that the quotes were too extensive -- but then agreed with the trial court that, as in the UK and Canada, laches justified refusing the injunction. (The 1st printing was already shipped and a 2d printing was ready to go, and the Court thought New Era should have spoken up earlier, when the financial loss would have been lower. In publishing, of course, later changes are much more expensive than earlier ones.) The Circuit Court, like the lower court, thus awarded only damages. However, Chief Judge James Oakes concurred in the result, writing a separate and lengthy opinion arguing that the District Court's conclusions finding little copyright infringement were justified, especially given the extra latitude given to works of criticism. A request for rehearing by the full Second Circuit was denied. New Era apparently decided not to petition the US Supreme Court for review.

So, while the Court ruled that the unpublished quotes were too extensive, hence infringing, and hence illegal to use, no US court seems to have ordered changes in the text. In fact, the lower court's opinion mentions the existence of minor differences between US and UK versions in its summary of the facts, so it would seem differences existed even before the US suit was filed. (Where the differences came from, the lower court didn't say.)