author: GETZENDANNER, District Judge:

text:
    RAND McNALLY & COMPANY, Plaintiff, v. FLEET MANAGEMENT SYSTEMS, INC., d/b/a Logistics Systems, Defendant.
    No. 80 C 4499.
    United States District Court, N.D. Illinois, E.D.
    July 25, 1984.

      William A. Streff, Jr., Donald G. Kempf, Jr., Daniel W. Vittum, Jr., Avy H. Stein, Kirkland & Ellis, Chicago, Ill., for plaintiff.
    Richard A. Zinner, Friedman & Atherton, Boston, Mass., for defendant.
   MEMORANDUM OPINION AND ORDER

GETZENDANNER, District Judge:

This copyright action is -before the court on the renewed motion for partial summary judgment of plaintiff Rand McNally & Company (“Rand McNally”). In an opinion issued on December 31, 1983, the court had denied the motions for summary judgment of both Rand McNally and defendant Fleet Management Systems, Inc. (“Logistics Systems”). Rand McNally filed a renewed motion for partial summary judgment. The court, having determined that the renewed motion presented new evidence and could help clarify and narrow issues for trial, ordered Logistics Systems to respond to the motion. For the reasons stated below, Rand McNally’s renewed motion for partial summary judgment is granted in part and denied in part.

I. Existence and Ownership of Valid Copyright

A. Copyrightability of Data

In its December 31, 1983 opinion, the court noted that the maps were not the subject of Rand McNally’s copyright claims. Rand McNally & Co. v. Fleet Management Systems, Inc., 591 F.Supp. 726 at 737 (N.D.Ill.1983) (“Mem.Op. Dec. 31, 1983”). The court did note that Rand McNally was claiming infringement of the data contained throughout the Mileage Guide. However, in deciding the issues to be resolved in that motion, the court directed its attention not to the copyrightability and infringement of all the data on the maps, but to the data from the maps included on and organized in the mileage tables contained in the first part of the Mileage Guide. The mileage tables contain only the mileages among the key point cities. Hence, the court’s opinion did not resolve the issues of copyrightability and infringement of the red and black segment mileages, as well as of the other information contained on the maps but not in the mileage tables. The copyrightability of these items will be considered here for the first time, and the copyrightability of the mileage tables will be considered in light of the exhibits and affidavits accompanying the parties’ new submissions.

The court has already found that the Mileage Guides at issue in this action are “compilations” as defined by the Copyright Act of 1976. 17 U.S.C. § 103. (Mem.Op. Dec. 31, 1983 at 730-731.) In addition, the court has found that, while facts are generally denied copyright protection, compilations of facts under limited circumstances may receive such protection. {Id. at 731— 733.) The Seventh Circuit has interpreted the copyright laws as protecting and encouraging the industrious compilation of facts. This is true even where the facts compiled are collected from public domain sources. (Mem.Op. Dec. 31, 1983 at 731-732.) Logistics Systems’ responding memorandum continues to assert its previously rejected argument that to be protected, mileages must have been measured and “discovered” by Rand McNally. While such determination of mileages would most certainly indicate that Rand McNally expended efforts protectible under copyright law, the collection of mileages already measured by others and injected into the public domain may also be protected.

The court was unable to determine whether the mileage table data was copyrightable for several reasons. First, Rand McNally’s broad figures of the costs in updating the two Mileage Guides did not indicate to what extent the money was spent on obtaining and updating the data sought to be protected. Further, the court was unable to determine whether the effort in compiling the data itself was sufficient to merit protection. In part, this concern arose from the possibility that sources in the public domain, perhaps even earlier editions of Rand McNally’s own Guides, provided the source of the data. Were the edition issued directly before the 1973 edition to contain a mileage table substantially similar to the 1978 and 1982 editions, Rand McNally’s efforts in updating a compilation in the public domain could be small. Rand McNally’s renewed motion provides evidence supporting the conclusion that the mileage data in the 1978 and 1982 Mileage Guides could be validly copyrighted. The court, as discussed above, did not address the copyrightability of the various mileage values assigned to the red and black segments. The court will now address the copyrightability of the data in the Mileage Guides. Unless otherwise indicated, the court’s factual discussion is derived from the undisputed summary judgment evidence and constitutes findings of fact. Citations to the record are provided for most factual conclusions.

1. Red and Black Segments

The mileages corresponding to the red and black segments on the maps indicate the road mileages between many more points than key point cities. It is undisputed that the mileages do not correspond to geographical mileages between various points, but attempt to correspond to distances as measured by roads in existence. Hence, the mileages change as the roads change.

The most important question in determining whether the segment mileage data is copyrightable concerns the effort involved in compiling that data. It is suggested that some of the data is derived from Rand McNally “field work.”' (A. Winterfeld Aff., RM App. A at ¶ 9.) Logistics Systems sharply disputes whether Rand McNally conducts field research in determining mileages, supporting its arguments with evidence from Rand McNally’s own employee. (Pofahl Dep., LS App. B at 16-17, 20; A. Winterfeld Dep., LS App. D at Ex. 1.) (The court understands “field work” to constitute some physical measuring of the actual road in question.) For purposes of this motion, the court will accept as true that Rand McNally performs no field work when compiling the mileages in the Mileage Guides.

With this premise, it is clear that the mileages come from mileages measured by some third party. Rand McNally’s evidence demonstrates that throughout the history of the Mileage Guides, this information was derived largely from public domain maps. It appears that Rand McNally has been publishing Mileage Guides (the 1982 Guide is the twelfth edition), since the 1930s. With each new edition of the Mileage Guide, more detailed mileage information is added. (See J. Ragsdell Aff., RM Ren.App. C.) Additionally, each new edition corrects and updates the previous one.

Although Logistics Systems has argued that Rand McNally’s culling of mileages from public domain maps is a small effort, it has not sought to argue that obtaining mileages from previous, uncopyrighted Rand McNally Mileage Guides, plus updating, renders insignificant the work on the subsequently copyrighted Guides ’ data. This was one of the court’s concerns in noting previously that Rand McNally had submitted only the copyright certificates of the 1973, 1978, and 1982 Guides. For, apart from the various public domain source maps, it appears that the only public domain source for nationwide mileage data, especially concerning key point pair mileages, must come from the Mileage Guides themselves. Rand McNally’s new evidence now convinces the court that the source of the 1978 and 1982 Guides is itself copyrighted, hence,' even if revision of public domain mileage data cannot receive copyright protection, the data on which these two guides is based is copyrighted.

Rand McNally has submitted the copyright certificates for the 1962, 1966, and 1967 editions of the Mileage Guide. (RM Ren.App.E.) (Logistics Systems does not attack these certificates and they are presumptively valid.) Furthermore, the court has already found that Rand McNally has valid certificates of copyright registration over the 1973, 1978, and 1982 editions. Hence, if the mileage data in these editions is copyrightable, Rand McNally owns copyrights over it. For purposes of this motion, the court will assume that the Guides published before 1962 were not copyrighted.

The 1962 Mileage Guide incorporated several changes over the previous guides, largely because of changes in the United States road network resulting from the new interstate highway system. This- Guide was compiled from Rand McNally maps, but other sources were employed as well. County and city engineer maps (from city engineer departments), interstate highway plan sheets (from state highway departments), and information from other governmental and private (namely, state and city employees) sources were used to compile the maps in this guide. (M. Pofahl Aff., RM Ren.App. D at ¶¶ 7-8.) New scribing techniques allowed the addition of “hundreds of thousands of new mileage and city details” to the 1962 Guide. (Id. at ¶ 9.)

Mileages were obtained from public domain source maps for the 1962 Guide. Logistics Systems claims that mileages, then and now, are simply copied from public domain sources onto the Rand McNally maps. However, the evidence demonstrates that mileage values are not obtained from public domain sources for each of the many red and black segments. Rather, mileages between points listed in the public domain maps are used to calculate mileages between the many points added to the Rand McNally maps. (See e.g., M. Pofahl Aff., RM Ren.App. D at Ex. B.) Even if some mileages are copied outright, it is clear that many others are estimated from these publicly obtained mileages.

The procedure described for obtaining mileages for the 1962 Guide is described as follows:

The actual mileage values entered on the maps for the 1962 series were rescaled from individual county maps; I am not aware of any mileage numbers which were copied directly from the source maps. Thus, the rescaling of mileages was an extremely time consuming and laborious process. The rescaling procedure required Rand McNally cartographers to physically measure the actual mileage distances on the individual county maps from one center of town to the center of another town or road junction, and then rescale the map value of each such distance to determine unique mileages for the Black Mileage Segments on the maps____

(Id. at ¶ 10.) What Rand McNally does with mileages obtained from public domain sources is to use them as base mileages from which to generate unavailable mileages over several smaller segments. Maps of varying quality and detail are used to estimate mileages throughout the country.

It is undisputed that the 1962 Guide is the one on which the subsequent Guides are based. (Id. at ¶ 12; J. Ragsdell Aff., RM Ren.App. C at ¶ 10.) It also appears that even if pre-1962 Mileage Guide editions were not copyrighted, those editions could not be considered a public domain source rendering the collection of data in the 1978 and 1982 Guides a result of trivial copying efforts. Not only is it demonstrated that the 1962 Guide contains great changes from the previous editions, but Rand McNally’s updating of the subsequent editions indicate that from 1962 to 1978, great changes were made in the mileage data. (See J. Ragsdell Aff., RM Ren. App. C.) Hence, the sources most likely to provide the updated red and black segment and key point information to Rand McNally in its compilation efforts are copyrighted by Rand McNally. Logistics Systems has not indicated a public domain source that would make the compilation of data any less arduous for Rand McNally than the collating of information from various state, county, and city maps.

The court must therefore address whether the collection of information from the various city, county, and state maps constitutes protectible compilation effort. The evidence before the court indicates that this culling exercise, which includes the breaking down of mileage data into smaller segments as well as an examination of road quality and change and compensation for variations among maps, is sufficient to justify copyright protection over the data so obtained.

As already mentioned, the creation of the maps and collection of the mileage data for all editions involves:

collection and analysis of a vast amount of source material obtained by Rand McNally. These source materials include other Rand McNally maps, official highway maps published by states and provinces, county maps, city engineer maps, interstate highway plan sheets and other governmental materials, which Rand McNally obtained by periodically contacting the appropriate governmental agency to continually obtain the latest available maps.

(M. Pofahl Aff., RM Ren.App. D at ¶ 3.) And, as discussed above, the mileage data from such sources is used to generate whole number mileages over new segments of road. In addition, in using these mileages, Rand McNally’s concern is with manipulating the figures so that the segments, used as building blocks to calculate mileages over numerous routes, generate accurate mileages over long distances. (A. Winterfeld Aff., RM App. A at ¶ 10.)

In determining the roads on which to measure mileages in the first place, Rand McNally cartographers must determine which roads are of a quality sufficient to be used to calculate these segments. The general method of computing the segment mileages now is similar to that used in the 1962 Guide:

[Cartographers] select end points for these Mileage Segment distances, and, where necessary, physically measure and rescale the map value of each segment distance along the selected roads to determine their own mileages for these segments. Specialized rounding techniques are then applied to all Black Mileage Segments to arrive at the whole mileage numbers which most accurately and uniformly reflect distances between the selected end points. Longer Red Mileage Segment values (comprised of combinations of the Black Mileage Segments along the principal roads) are then calculated to most accurately and uniformly reflect these longer distances. Substantial effort is required and considerable judgment is exercised in analyzing the roads, selecting the Segment end points, measuring and rescaling distances, and rounding and calculate [sic] mileage numbers for each Black and Red Mileage Segment contained in the Mileage Guides.

(A. Winterfeld Aff., RM App. A at ¶ 10.)

Logistics Systems argues that the scaling exercise, used to obtain whole number mileage figures for segments smaller than those obtained from other maps, is a mechanical process requiring little expertise. Accepting this as true, the court notes that Logistics Systems does not assert that the generation of these segment values is not time consuming. Nor does Logistics Systems argue that copying mileage values for thousands of road segments, even were they all readily available from other ma,ps, is not a great mechanical, although not original or creative, endeavor. The number of segments added to recent editions of the Guide reveals that the Mileage Guide contains thousands of red and black segments, and the copying or mechanical calculation of their values required a great deal of time.

It is also clear that a mileage between two points does not remain constant once obtained from its source. Rather, Rand McNally constantly checks and adds to its mileage data, through noting new roads and changes in old roads, catching errors, and adding new mileage segments for which mileages must be calculated. Rand McNally maintains a “network of over 400 private sources” which are periodically contacted “often on a fee basis” to provide information about new roads and road changes. (Id.) According to Rand McNally:

These contacts are generally employed by state highway departments, city engineer offices, planning departments, toll road authorities, state park departments, national park agencies, chambers of commerce, provincial agencies in Canada and Mexican states, etc. ... In all, over 1,500 items of correspondence per year are sent out and received by Rand McNally cartographers to its network of sources and other persons to obtain updated information and corrections for Rand McNally’s maps.

(Id.) Changes that appear to be relevant to the mileage data include changes in road classifications. (Id. at ¶ 4.) Rand McNally’s evidence on the changes resulting from updating efforts demonstrates conclusively that much time is expended in each new edition. This checking of mileage changes requires the comparison of roads and road mileages between the Rand McNally maps and the public domain maps. (M. Pofahl Aff., RM Ren.App. D at ¶¶ 4-5.) The additions and changes since the 1962 edition have been great. For example, the 1973 Mileage Guide contained over 75,000 changes in road segments, and added 200 new key point cities (which necessitated the generation of hundreds of new key point pair mileages.) (J. Ragsdell Aff., RM Ren. App. C at ¶ 12.) From the 1973 edition, 65,000 road segment changes were made to create the 1978 edition. (Id. at ¶ 13.) The 1982 Mileage Guide incorporated 55,000 road segment changes. (Id. at ¶ 14.) From 1962 to 1982, over 300,000 road and mileage changes were made, (id. at ¶ 25), and while it is unclear how much of the estimated $850,000.00 in updating the Guide over this period was spent in updating mileage data, it is clear that a great expenditure of effort was required to create and update the modern Mileage Guides.

Logistics Systems has twice had the opportunity to present evidence that Rand McNally’s efforts in obtaining and updating the mileage data for the red and black segments is a trivial compilation effort. Public domain sources showing the similarity in mileage detail to the detail in the Mileage Guides could have been presented to refute Rand McNally’s evidence demonstrating both continuous updating and original generation of small segment mileages. The absence of such evidence must be viewed in light of Rand McNally’s evidence that even where segment mileage data is exactly copied, it is from numerous maps of states, cities, and counties. Logistics Systems has relied heavily upon its argument that the mileage figures are not derived from field research but are generated from mechanical rounding methods. Yet, its own evidence on this point further convinces the court of the effort involved in Rand McNally’s culling and comparison methods in arriving at a suitable mileage value. In its attached exhibits, Logistics Systems submits ten letters and memoranda between Rand McNally and third parties on the proper mileage to attach to the route between Stevens Point and Milwaukee, Wisconsin. (LS Ren.App. D.)

Were the mileage data on the red and black segments contained in a table, such as the table for key point cities, the court would not hesitate to find such a compilation copyrightable. The parties have not addressed what difference, if any, arises from Rand McNally’s organization of the segment mileages on maps. (It would be difficult to imagine any tabular arrangement of such data that would be useful, understandable, and efficient. Short of a computer data base, it seems the most useful way to organize this data is directly on a map.) The court finds that the fact that the mileages are arranged on a map does not adversely affect its copyrightability as a compilation. The court concludes that the data on the maps relating to segment mileages is copyrightable.

2. Key Point Mileages

These mileages are also copyrightable. The effort to compile them derives from the effort expended in determining the mileages of the red and black segments. (A. Winterfeld Aff., RM App. A at ¶ 5.) Hence, it is at least as much a compilation effort, and presumably more, to compile these key point pair mileages as the underlying segment mileages. To determine the mileage between two key points, a combination of the segments that provides the shortest acceptable route between the two points is determined. (Id. at ¶ 11.) Rand McNally has shown in this renewed motion that this mileage data is not readily obtainable from other sources. Logistics Systems has not disputed that key point mileages are so generated, or that as a whole, the key point pair mileages are copied directly from public domain sources. The only public domain source for key point mileages appears to be the pre-1962 key point mileage tables. Even if Rand McNally’s compilation efforts are judged as commencing from such a public domain source, the updating work and additional key point mileages alone would bring the compilation effort to the level required for copyright protection as a factual compilation. The evidence demonstrates, for example, that 90% of the key point pair mileages changed from the 1978 to the 1982 edition. (J. Ragsdell Aff., RM Ren.App. C at ¶ 14.)

3. Other Data

The court will reserve ruling on the copyrightability of other data from the maps, as well as any contention that the maps themselves are infringed by Logistics Systems’ Compu.Guide. It has not been shown that compilation of such information as city and state names or zip codes is within the scope of copyright protection. This ruling is therefore limited to the copying of mileage data.

B. Ownership of Copyrights

The court has already determined that Rand McNally owns the copyrights in the 1973, 1978, and 1982 editions. Rand McNally has also presented unrebutted evidence that the 1962, 1965, and 1966 editions are copyrighted. This creates a presumption of ownership, as well as that the copyrights are valid. 17 U.S.C. § 410(c); Flick-Reedy Corp. v. Hydro-Line Mfg. Corp., 351 F.2d 546, 549 (7th Cir.1965), cert. denied, 383 U.S. 958, 86 S.Ct. 1223, 16 L.Ed.2d 301 (1966). The court finds that Rand McNally is the owner of the copyrights in these editions. The court therefore concludes that the mileage data in the 1978 and 1982 editions is copyrightable, that the data is in fact protected by a copyright, and that Rand McNally owns the copyrights in that data.

II. Existence of Copying by Logistics Systems

The Copyright Act of 1976 provides that

Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 118 ... is an infringer of the copyright.

17 U.S.C. § 501(a). Section 106 provides that, subject to sections 107 through 118, the copyright owner, in this case Rand McNally, “has the exclusive rights to do and to authorize ... [the reproduction of] the copyrighted work in copies ... [and the distribution of] copies ... of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending....” 17 U.S.C. § 106(1), (3). Copies are defined as

material objects ... in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

17 U.S.C. § 101. This definition of copies is included in the 1976 Act, which became effective on January 1, 1978.

An essential element of copying is that “substantial similarity” exist between the copyrighted and the alleged infringing work. 3 M. Nimmer, Nimmer on Copyright § 13.03[A], at 13-17 (1983). The Seventh Circuit has described this test as requiring a showing that the defendant copied from the plaintiff’s work and that the copying “went so far as to constitute an improper appropriation.” Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607, 614 (7th Cir.), cert. denied, 459 U.S. 880, 103 S.Ct. 176, 74 L.Ed.2d 145 (1982). “Substantial similarity” is especially important in the context of a factual compilation:

Recognizing a property interest in the collection of information contained in a copyrighted compilation need not raise the spector of the monopolist stifling future intellectual activity. Unfettered access to individual facts would continue to be assured by the traditional requirement of substantial similarity. Since it is the collection as a whole that represents the original work of authorship, only copying sufficient to produce a substantially similar collection would generate potential liability. The protection would not be unlike that conferred on the plot or structure of a novel or play — isolated incidents or scenes may be appropriated provided the literal expression is not lifted, but the taking must not be so extensive as to duplicate the overall structure of the work. A wholesale appropriation of data from a copyrighted compilation would thus itself be an infringement of the author’s exclusive rights, regardless of whether there is also a taking of additional copyrightable elements such as arrangement or original prose.

Denicola, “Copyright Collections of Facts: A Theory for the Protection of Nonfiction Literary Works,” 81 Colum.L.Rev. 516, 531-532 (1981).

The parties have not addressed the substantial similarity test in the context of the quantity and quality of copying necessary to constitute infringement. While copying fewer than all of the mileages may still constitute infringement, copying of a single mileage is clearly not. The degree of copying necessary to finding infringement is not examined. Rather, Logistics Systems argues against a finding of infringement largely because its copying of the data involved rearrangement, from maps and tables to a computer data base. It asserts that it does not produce a map book, and that putting the data into a computer may not be infringement.

A. Arrangement of Data

With respect to the rearrangement of data, it is undisputed that the data base is completely different in form to the tables and the maps’ mileage segments. The court has already indicated that this would not necessarily prevent a finding of copyrightability. (Mem.Op. Dec. 31,1984 at 733 n. 5.) The court adheres to this view as a general proposition and determines that in this case, the drastic change in format will not alone prevent a finding of unlawful copying.

The court has indicated that the basis for compilation protection is the protection of the compiler’s efforts in collecting the data. Hence, the court is in agreement with the conclusion of another court in this district that, while courts often offer the similarity of arrangement as the basis for finding compilation infringement, “[r]are are the cases in which a copier has escaped liability for substantial copying solely because he changed the form of his compilation and thereby avoided similarity of expression.” National Business Lists v. Dun & Bradstreet, Inc., 552 F.Supp. 89, 93 (N.D.Ill.1982). The small significance of arrangement has been largely recognized by commentators discussing compilation infringement. Noting that arrangement of compilations is not creative, but rather dictated by function, Associate Professor Denicola comments:

The creativity or effort that engages the machinery of copyright, the effort that elicits judicial concern with unjust enrichment and disincentive, lies not in the arranging, but in the compiling.
....
The arrangement formulation ... is dangerously limited. At face value the rationale indicates that the entire substance of a compilation can be pirated as long as the arrangement of data is not substantially copied.... To permit the latecomer to create an identical work through the simple expedient of arranging the appropriated information anew would severely diminish incentive, particularly where stable long-term demand minimizes the advantages of lead time.
....
Nowhere are the deficiencies inherent in the traditional approach more apparent than in the context of computer data bases. Such data bases are in essence simply automated compilations — collections of information stored within a computer memory and capable of being retrieved in various forms by an appropriate search program.... Data bases are clearly permissible subjects for copyright under the 1976 Act, yet it is often senseless to seek in them a specific, fixed arrangement of data.

Id. at 528, 531; see also Note, 71 Nw. U.L. Rev. 833, 841-842 (1977) (feeding compilation into computer data base).

In addition to the changing of the arrangement of a data compilation, the court must consider the fact that the data here has been copied into a computer data base. Data is not merely copied onto a piece of paper, for example, with horizontal instead of vertical columns. The parties have not addressed this more important issue of whether copyright laws understand such “inputting” as copying. Professor Nimmer has explained that, at least after the 1980 amendment to the Copyright Act of 1976, “the input of a work into a computer results in the making of a copy, and hence that such unauthorized input infringes the copyrights owner’s reproduction right.” 2 M. Nimmer, Nimmer on Copyright § 8.08, at 8-104 (1983). Under current law, it is clear that inputting a copyrighted work into a computer would violate the copyright holder’s exclusive rights. In this case, as the tabular data may be perceived by way of machine, for example through a printout, it would seem to be within the definition of copy. The data from the maps can be analyzed similarly — it is simply copied, albeit in another arrangement, into the data base. The way that information must be formatted in order to be of use by a particular computer or program should not prevent a finding of infringement. The irrelevance of the arrangement of data in the context of a computer data base is highlighted by the fact that the Compu. Guide is marketed as a computerized version of the Mileage Guide and used at least in part for the generation of mileage data between two points, which is the value of the Mileage Guide for commercial truckers.

B. Degree of Copying

1. 1978 Mileage Tape

This mileage tape contained the key point pair mileages contained in the tables of the 1978 Mileage Guide. It is admitted that the tape was simply copied in its entirety into the data base of Logistics Systems’ Compu.Guide system. (D. Rinehart Tr., RM App. M at 14-15; Answer to Interrogs. 5(b) and 9, RM App. J.) No copying from the 1982 key point pair mileage tables is claimed; rather the updated key point pair mileages in the Compu.Guide data base are computed from the red and black segment mileages of the 1982 Guide. {Id.; Rand McNally Memorandum in Support of Renewed Motion p. 25.) This would constitute unprotected copying; however, the parties agree that a disputed issue of fact exists on whether Rand McNally licensed this use. The court simply notes here that the entire mileage tape was incorporated into Logistics Systems’ data base.

2. 1978 and 1982 Mileage Segments

Logistics Systems admits to copying more than 100,000 red and black mileage segments from the 1978 Mileage Guide into its data base. (D. Rinehart Tr., RM App. M at 80-81.) (Indeed, Logistics Systems began copying the 1973 Guide and switched to the 1978 edition after it was published. (D. Shapiro Tr., RM App. C at 80; Answer to Interrog. 2(B)(ii), RM App. C. )) The 1978 Guide provided the length of each segment, as well as the city, county, and state names, road names and numbers, vicinity map numbers, and all other geographic information for the Compu. Guide data base. (B. Broderick Tr., RM App. N at 53-55; D. Shapiro Tr., RM App. L at 65, 126, 130-131; D. Rinehart Tr., RM App. M at 18; Answer to Interrogs. 2(B)(ii), 5(B), RM App. J.) The copying is graphically illustrated by Logistics Systems’ Vice-President Daryl Rinehart, who answered affirmatively to the question: “Is it correct to say that the Compu.Guide System is a computerized version of the Household Goods Carrier Bureau Mileage Guide No. 11?” (D. Rinehart Tr., RM App. K at 12.) While the court has been unable to locate the number of red and black mileage segments contained in the 1978 Guide, the evidence shows that over 125,000 red and black mileage segments can be found in the 1982 edition. (A. Winterfeld Aff., RM App. A at II4.) Assuming that about the same number or fewer segments are contained in the 1978 Guide, the copying of 100,000 segments would constitute copying at least 80% of the segment mileages contained in the 1978 edition. All of the mileage data contained in the Compu.Guide before the publication of the 1982 Guide was derived from the 1973 and 1978 Guides. (D. Shapiro Tr., RM App. L at 175-176.) The Compu.Guide is advertised as a computerized version of Rand McNally’s Mileage Guides. (Answer to Interrogs. 7, 8, 11, RM App. J; D. Shapiro Dep., RM App. O at Ex. 5.) There is a suggestion in Logistics Systems’ response to the renewed motion that any reference to the Mileage Guides for mileage information is merely to check their independently obtained (from state highway maps) mileages for purposes of use as an ICC tariff publication. (Logistics Systems’ Response to Renewed Motion p. 14.) This statement, seemingly directed to establishing “slipping,” is not supported and is contrary to the weight of testimony by Logistics Systems’ own employees as to the direct copying of all mileage information from Rand McNally’s copyrighted Guides. The evidence is clear that the Compu.Guide data base was derived in full from Mileage Guide 1978, and was not derived by checking the Compu.Map data base against the mileages contained in the 1978 Guide.

When the 1982 Guide was published, Logistics Systems did not input the data directly onto the Compu.Guide data base. Rather, Logistics Systems compared the 1982 and 1978 maps, and incorporated the changes that it noted. (D. Rinehart Tr., RM App. M at 12-13, 18.) Logistics Systems did not make the effort of determining from any source, other than the 1982 Guide itself, which mileage information changed between the two latest editions. (D. Shapiro Tr., RM App. L at 175-176; D. Rinehart Tr., RM App. M at 10, 12-15, 18.) It is undisputed that Logistics Systems now generates the key point pair mileages from its data base of red and black segments, and not through direct copying from the 1982 Guide’s table of key point pair mileages.

As to the copying of the 1978 segment mileages and the 1982 changes and additions to the Guide, the court finds copyright infringement. The effort in compiling this data was substantial, and it is clear that they were input directly into the Logistics Systems’ Compu.Guide data base. This sort of copying, the exclusive right of the copyright holder under the 1976 Act, is substantial. The copied work is clearly advertised as the computerized equivalent of the 1982 Guide, and the ordinary reasonable person would conclude that the data between the two works is basically the same and that Logistics Systems obtained its data from Rand McNally. See Atari, Inc., 672 F.2d at 614.

III. Laches and Estoppel

The court had determined that a disputed issue of fact prevented the disposition of the laches and estoppel defenses with respect to the mileage data. The court will now examine the evidence to determine if Rand McNally is barred from asserting its claims by laches and estoppel.

To establish an estoppel, Logistics Systems must show that:

(1) the party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended; (3) the latter must be ignorant of the true facts; and (4) he must rely on the former’s conduct to his injury.

Hampton v. Paramount Pictures Corporation, 279 F.2d 100, 104 (9th Cir.), cert. denied, 364 U.S. 882, 81 S.Ct. 170, 5 L.Ed.2d 103 (1960) (cited in National Business Lists, 552 F.Supp. at 97). Were Logistics Systems to show an estoppel against Rand McNally, it would prevent Rand McNally not only from bringing an action for past infringement, but for any future infringement as well, including infringement of the 1982 Guide. National Business Lists, 552 F.Supp. at 97-98. If a dispute of fact exists as to the existence of laches or estoppel, the court may not resolve that dispute on this motion for summary judgment.

One initial fact is clear. The 1978 and 1982 Guides contain copyright notices. Nimmer explains that where a copyright holder does not affirmatively encourage infringement:

[A] holding out sufficient to raise an estoppel may be accomplished by silence and inaction. It would seem, however, that such passive holding out can rarely be established in statutory infringement actions. The mere affixation of the copyright notice on copies of the work if seen by the defendant has been held to constitute a sufficient assertion of the plaintiff’s right so as to counter an estoppel based upon a passive holding out.

3 M. Nimmer, Nimmer on Copyright § 13.09, at 13-107 (1983).

Logistics Systems supports its estoppel defense by presenting evidence that Rand McNally knew of its intended use of the segment mileage data. The President of Logistics Systems, Donald Shapiro, claims that:

During the period from 1976 through 1980, Logistics Systems, through written and oral communications with Rand McNally, kept Rand McNally informed of the intentions and progress of Logistics Systems in developing its Compu.Guide[ ] system. During conversations in 1978 leading up to Logistics Systems’ purchase of a computer tape of key point mileages from Rand McNally, I informed Robert Bretland, Systems Manager, Map Division of Rand McNally, that in addition to using the tape, Logistics Systems was going to extract mileage data from the maps in the Mileage Guide in connection with the development of the Compu. Guide[ ] data base. Mr. Bretland did not object, but rather proceeded to sell the computer tape to Logistics Systems.

(D. Shapiro Aff., LS App. 1 at ¶ 8.) The pertinent documentary evidence on this point is undisputed. On April 16, 1976, Donald Shapiro wrote to Robert Bretland asking for information on the Rand McNally data bank of towns, cities, and counties. He explained “We are planning an enhancement to our COMPU.MAP system, and need a source for zip codes, SPLC codes, and latitude and longitude coordinates.” He continued:

We have also had several companies ask us about developing a COMPU.MAP system which would provide the same miles as could be obtained from your [.Mileage Guide]. This would require coding our data base from your maps, and utilizing your Computer tape to retrieve the exact [Guide] miles for key points. Do you presently market any computer programs which utilize your ... mileage tape?
Of course, if we decided we would like to use any of your data, we would be cognizant of your copyright rights and hopefully reach some agreement.

(LS App. 15.) Shapiro again wrote to Bret-land on May 14, 1976, requesting that Logistics Systems be chosen to produce the mileage data for the next Guide. To establish its credibility, Logistics Systems offered to use Rand McNally’s segment mileages in its own data base to generate key points and compare the results with Rand McNally’s key point mileages. In this letter, it is clear that Logistics Systems had its own mileage information generated from non-Rand McNally sources. (Id.) A January 6, 1977 letter demonstrates that the Executive Secretary of the Household Goods Carriers’ Bureau had knowledge that Logistics Systems intended to create a data base using Rand McNally’s Guides. (LS App. 16.) On the same date, the Executive Secretary, Francis Wyche, sent a letter to Rand McNally employee Arthur DuBois, attaching the letter from Logistics Systems to Wyche. That letter explains that Logistics Systems’ “Compu.Map” contains mileages obtained from state highway maps. It states that:

[W]e have also received a number of requests for a COMPU.MAP system based upon the Mileage Guide you distribute. When compared with your Mileage Guide, we have found COMPU.MAP generally averages % of 1% higher.
....
In order to service those customers who prefer your Mileage Guide as a source of miles, we are presently developing a new Data Base from Rand McNally’s Standard Highway Mileage Guide, which we understand is identical to the Mileage Guide which you distribute. Our new Data Base will contain approximately 20,000 key points.... I also understand that you will have a new edition of your Mileage Guide in the fall of Í977. Is this correct? If so, we would plan to incorporate the changes into our new Data Base.

(LS App. 16 (emphasis added).)

Rand McNally’s response to this letter was directed to Francis Wyche in a January 27, 1977 letter. In it, Arthur DuBois writes that:

We are not pleased to hear that [Logistics Systems is] developing a data base from our Mileage Guide even if it is based on an out-of-date Guide. We are reviewing our copyright position on our mileage information before responding on this matter.

(LS App. 16.) The next set of communications between Logistics Systems and Rand McNally occurred in 1978. A June 16, 1978 letter from Shapiro to Bretland explains Logistics Systems’ intended use of the mileage tape. He explains that “Logistics Systems recognizes and fully intends to respect Rand McNally’s copyright protection of this information.” (LS App. 15.) A June 21, 1978 letter from Shapiro to Bret-land also explains Logistics Systems’ intended use of the tape and a limited offer to order the tape. (Id.) The Rand McNally “Fact Sheet” on the tape provides that it, “like the Guide, is fully protected by copyright.”

On April 9, 1979, a memorandum from Rand McNally employee T.J. Hermes to DuBois explains:

I have discovered that Logistics Systems (sales literature attached) has apparently created much of the data base that Hodgkins would like GEO-DATA to provide. Specifically, Fran Wyche tells me that Logistics Systems has manually put every mileage from our maps in our Mileage Guide (including state and vicinity maps) and over 35,000 place names into their own data base____ While this may be a copyright violation, it is also the very kind of data base that we and Hodgkins have been discussing.
We need to decide: ... (2) how to handle the Logistics Systems situation[.]

(Id.)

The court finds that the Bretland affidavit establishes a dispute of fact as to Rand McNally’s silent encouragement of Logistics Systems’ use of the data. The evidence is unclear as to when Rand McNally knew or should have known of the copying of the segment data. It is possible that any licensing of the tape data was viewed as extending to the mileage segment data (the court makes no finding on this). The court therefore denies Rand McNally’s motion for summary judgment with respect to the copying of the 1982 data because disputed issues of fact remain on the issue of estoppel. The court also determines that a dispute of fact exists on the laches question.

IV. Fair Use

Recognizing that factual compilations should be granted a broader exception under the “fair use” doctrine, see 17 U.S.C. § 107; 3 M. Nimmer, Nimmer on Copyright § 1305[A](2) (1983), the court determines that Logistics Systems’ use of the 1982 Mileage Guide data does not constitute fair use. Most of the factors cited as pertinent to the fair use inquiry do not apply to Logistics Systems’ copying, except the fact that the copyrighted work is a factual compilation. The degree of copying involved, the commercial use of the copying, and its competitive value persuade the court that a factual dispute on the fair use defense has not been established by Logistics Systems.

V. Conclusion

Rand McNally’s motion for summary judgment is granted in part and denied in part. The key point pair mileages in the 1978 Mileage Guide and the mileage segment data in the 1978 and 1982 Guides are copyrightable, and Rand McNally owns valid copyrights in them. A dispute of fact exists on the issues of laches and estoppel and on the extent of authorized use of the 1978 Guide tape. Logistics Systems has failed to demonstrate that a dispute of fact exists on the question of fair use.

It is so ordered.

      . A general description of the facts and allegations of this case may be found in the court's December 31, 1983 opinion and will not be repeated here. "Mileage Guide” and "Guide" will be used to refer to the material for which protection is sought, namely, the Standard Highway Mileage Guide. The context will indicate when a particular edition is referred to. The court will refer to the parties’ submissions by noting the parties’ initials ("RM” or “LS”) and whether the appendix was submitted with the renewed motion by adding "Ren.”

      . Key point pair mileages are the hundreds of thousands of mileage figures representing distances between every pair of key point cities. Key point cities are those cities of most interest to the general public and shippers and carriers. Black mileage segments designate mileage distances between towns and junctions selected by Rand McNally. Red mileage segments designate mileages between selected points denoted by red stars. (A. Winterfeld Aff., RM App. A at ¶4.)

      . Additional authority for this proposition is found in United States v. Hamilton, 583 F.2d 448, 452 (9th Cir.1978). Law review commentary is also supportive of this rationale for protection. See, e.g., Denicola, "Copyright in Collections of Facts: A Theory for the Protection of Nonfiction Literary Works,” 81 Colum.L.Rev. 516 (1981).

      . That such a compilation may exist in the public domain alone will not make a compilation based upon it incapable of copyright protection. As the court has held, facts gleaned from public domain sources may be protected under limited circumstances. A public domain mileage compilation so out of date that to update it involves substantial effort and industry may be used as a source for an update compilation without preventing the new work from obtaining a valid copyright. As will be discussed below, Rand McNally has shown that revisions in the Guide even since 1973 have been substantial.

      . The court finds that the Ragsdell affidavit is competent evidence. The affidavit was based on Ragsdell’s personal review of the records regarding Rand McNally's efforts in producing the Mileage Guide. (J. Ragsdell Aff., RM Ren. App. C at ¶ 1.) Such summaries are admissible under Fed.R.Ev. 1006. A very similar affidavit submitted in conjunction with a motion for summary judgment was upheld by the Seventh Circuit in Case & Company, Inc. v. Board of Trade of City of Chicago, 523 F.2d 355, 360-61 (7th Cir.1975). The court noted that the party challenging the affidavit had ample opportunity to review the data on which the review was based and that ample discovery opportunities were provided. Logistics Systems does not claim that it was denied the means for disputing the affidavit, and in fact does not dispute the facts contained in the affidavit.

      . In the July 23, 1984 pretrial conference, the court noted that before the December 12, 1980 repeal of former § 117, inputting a copyrighted work in a computer data base may not have been copying under the 1976 Act. Compare 2 M. Nimmer, Nimmer on Copyright § 8.08, at 8-104 & n. 4 (1983) with Midway Mfg. Co. v. Artic International, Inc., 704 F.2d 1009 (7th Cir.), cert. denied, - U.S. --, 104 S.Ct. 90, 78 L.Ed.2d 98 (1983). At that conference, Logistics Systems agreed with Rand McNally that inputting a copyrighted work in a computer data base could be an infringement under the 1976 Act and that former § 117 did not limit the protection against such inputting to that provided by the 1909 Act.

      . Logistics Systems continues to argue that because the Mileage Guide is an ICC tariff publication, it must have access to the mileages in order to be useful to carriers and shippers subject to the tariff regulations. The court has already ruled that a mileage guide does not lose copyright protection simply upon its filing as an ICC tariff publication. (Mem.Op. Dec. 31, 1983 at 16-22.) Logistics Systems presents evidence tending to show that the Mileage Guide is the only national guide on file as a tariff publication. However, Logistics Systems has never argued that it could not market a tariff publication (for example, its Compu.Map). The court noted in the previous opinion that the tariff publication regulations did not seem rigorous or somehow limited to the Mileage Guide.


source: Caselaw Access Project

author: LOWE, District Judge.

license: Public Domain

text:
    Dimitrios D. SIRINAKIS, Plaintiff, v. COLONIAL BANK, Defendant.
    No. 82 Civ. 7628 (MJL).
    United States District Court, S.D. New York.
    Sept. 28, 1984.

      Burlingham, Underwood & Lord, New York City, for plaintiff.
    Cadwalader, Wickersham & Taft, New York City, for defendant.
   MEMORANDUM OPINION AND ORDER

LOWE, District Judge.

Plaintiff Dimitrios D. Sirinakis (“Sirinakis”) commenced this maritime and diversity action against defendant Colonial Bank (“Colonial” or “the bank”), seeking to recover compensatory and punitive damages up to $96,000,000 for breach of contract and intentional tortious conduct designed to destroy plaintiff’s business and deprive plaintiff of his revenue-earning property, i.e., three ocean-going vessels.

Before the Court is a motion for dismissal by Colonial brought pursuant to Rule 12(b)(6). Both parties have relied on facts and documentary proof outside the pleadings, therefore, the Court will treat this motion as a motion for summary judgment. Fed.R.Civ.P. Rule 12(b).

FACTS

Background

Plaintiff Sirinakis, a Greek citizen, was at all times relevant hereto the president of three shipping companies (“shipping companies”): Gave Shipping, Incorporated, a Panamanian corporation, which owned the vessel Margareta, Anemodea Shipping Company, a Greek corporation which owned the vessel Anemodea, and Thalassarchis Shipping Company, a Liberian corporation which owned the vessel Paralos. Sirinakis is principal shareholder in Anemodea and Gave. He is 50% shareholder in Thalassarchis, the remaining 50% of the shares being owned by Yassilios Fassoulis, a Greek national.

In February 1981, Anemodea Company and Gave Company borrowed $2,400,000 from Colonial. This loan was secured by, among other things, a mortgage on the Paralos. Fassoulis and Sirinakis each guaranteed Thalassarchis’ obligation to Colonial. The loan agreements contained an acceleration clause which entitled Colonial to demand payment of the entire outstanding indebtedness of the loan in the event that the borrower failed to pay the principle of interest when due.

On or about February 19, 1982, a semiannual payment of $686,080 was due Colonial from Gave and Anemodea pursuant to the February 17, 1981 loan agreement. The shipping companies did not make this payment. Elwin Aff. ¶ 8; Sirinakis Aff. ¶ 11. On February 23, 1982, Colonial informed Gave and Anemodea of its intention to accelerate the debt and demanded payment in full of the February 17, 1981 loan in the total amount of $2,137,923.50.

The Letter Agreement

On February 24, 1982, the parties began negotiations in New York City respecting the shipping companies’ defaults. Among those present at the February 24, 1982 meeting were Mr. Martin Northcutt, on behalf of Colonial, Mr. Sirinakis, and Sirinakis’ attorneys, Messrs. Joseph Smith and John Osborne. During the negotiations, Sirinakis requested, on behalf of the ship-owning companies, a moratorium on principal and interest payments in order to allow time for the shipping market to rebound and to put the companies in a position to be able to repay the debt. Sirinakis Aff. ¶ 12.

The result of the negotiations was a letter in which Colonial specified certain conditions under which it was “prepared to postpone taking any action to enforce its security in accordance with the ... [Aug. 28, 1981 and Feb. 17, 1981] Loan Agreements.” See February 25, 1982 letter, Defendants’ Exhibit 2. Included in these conditions were the following:

(1) On or before March 12, 1982, an agreement for the sale of the Anemodea was to be completed; this sale was subject to Colonial’s prior approval of the purchaser and financial assistance.

(2) By March 26, 1982, the Paralos was to be delivered or fixed for delivery within 14 days thereafter into a time charter for a period of not less than 12 months.

The letter stipulated that if these conditions were met and if no creditors had taken any legal steps against any of the vessels, Colonial would renegotiate the terms of the loan agreements so that the shipping companies’ future obligations under the renegotiated agreements could be met out of the shipping companies’ existing cash flow. At that point, the notice of demand would be withdrawn by Colonial.

The letter further indicated that, to protect its security, Colonial might have to make further cash advances. Although Colonial was “not in any way obliged to make any such advances, ... it would be prepared to give favorable consideration to such advances being made so as to enable ... [Sirinakis] to perform the agreement contained ... [therein].”

Although the letter specified that Colonial was not obliged to make any further advances, Sirinakis alleges that at the February 24, 1982 meeting, Mr. Northcutt assured him orally that Colonial would be willing to advance funds to allow the continued operation of the vessels. Sirinakis alleges that Northcutt agreed to provide $35,000 to bunker the Margareta. In addition, Sirinakis claims that Northcutt agreed that if the Paralos were to put into Malta, Colonial would provide the necessary money to arrange for crew changes and supply necessary fuels and supplies.

Sirinakis further alleges that he took steps to satisfy the condition in the letter agreement that he sell the Anemodea, but that Colonial’s actions hindered this attempt. He alleges that on or about February 25, 1982, he advised Colonial that he had a potential buyer willing to pay $1,000,-000 for the Anemodea. On March 3, 1983, he advised Colonial that the buyer was a. corporation controlled by a Mr. E. Geronimakis. He indicated that if Mr. Geronimakis were not acceptable, another potential buyer would be available. On March 4, 1982, Colonial telexed that Mr. Geronimakis was, in principle, an acceptable buyer. However, on March 5, Colonial advised Sirinakis that it had no knowledge of Geronimakis and was unable to determine whether he was acceptable.

The Arrest of the Ships

The Anemodea

During the week of March 1, 1982, the Anemodea was formally arrested in Avon-mouth, England. One of the arresting companies was Hellarabia, a fuel supplier, which asserted a statutory maritime lien for unpaid bunker bills in excess of $130,-000. On March 3, 1982, Sirinakis wired Colonial requesting that Colonial transfer $157,000 in order to avoid “disastrous situations”. Colonial did not send this money.

On March 16, 1982, Colonial separately effected an arrest of the vessel, by process issued in an action seeking foreclosure of its mortgage, commenced in the Admiralty Court of the Queen’s Bench Division of the High Court of Justice in London (the “London Admiralty Court”).

By order of the London Admiralty Court dated March 22, 1982, the Anemodea was sold pendente lite. By final decree and judgment dated April 6, 1982, the London Admiralty Court: (i) “pronounced for the force and validity of the Greek mortgage Deed herein dated 21st February 1981”, and (ii) rendered judgment in favor of Colonial in the amount of $2,061,308.40, the amount adjudged to be outstanding owing to Colonial under the joint and several loan agreement between Colonial as lender and Anemodea Company and Gave Company as borrowers.

Since the loan was a joint and several loan to Anemodea Company and Gave Company, default by either company entitled Colonial to judgment for the full amount of the loan, as the London Admiralty Court ordered. Although Anemodea Company, Gave Company and Sirinakis had notice of the foreclosure action in the London Admiralty Court, none of them appeared in that proceeding.

The Margareta

On or about March 3, 1981, the Margareta was arrested in Augusta, Sicily by Hellarabia on a claim in excess of $170,000. Sirinakis informed Colonial of this arrest and requested funds to settle the claim. Colonial did not provide the funds. However, Colonial eventually did arrange a settlement with Hellarabia and the vessel was released.

After release from arrest, Colonial instructed the Margareta to proceed to Piraeus, Greece, where Colonial arrested the vessel. On November 8, 1983, a judgment of the courts of Greece was rendered in favor of Colonial against the Margareta. Neither Sirinakis nor the shipping companies appeared to defend the foreclosure.

The Paralos

On or about February 28, 1982, Thalassarchis defaulted on its loan from Colonial by failing to make a $386,432.99 payment. On March 2, 1982, Colonial gave notice of default and of its election to accelerate the debt and demanded payment of $1,895,-779.68. Sirinakis alleges that, on March 4, 1982, he had a conversation with Mr. Northcutt in which Northcutt indicated that, although the Anemodea and the Margareta had been arrested, Colonial nonetheless considered the February 25,1982 letter agreement to be in effect, Sirinakis claims that Northcutt demanded that Sirinakis direct the Paralos to enter port in Malta. Sirinakis alleges that in reliance on this confirmation, he arranged for the Paralos to enter port at Malta.

When the Paralos entered port, she was arrested by a supplier. Sirinakis alleges that he made numerous requests to Colonial to advance funds. Colonial did not comply. Instead, the bank joined in the arrest and began foreclosure proceedings. Sirinakis did not appear to defend the Paralos. However, Thalassarchis, through Fas'soulis, did appear and he objected to the sale of the Paralos.

The Commercial Court in Malta ordered the sale of the Paralos, rendered a foreclosure judgment in favor of Colonial on its mortgage in the amount of $1,650,000 and allowed Colonial to bid up to that amount for the vessel at the foreclosure sale.

Colonial’s Action on the Guarantees

On December 17, 1982, Colonial commenced an action against Sirinakis in the High Court in London, Queen’s Bench Division, to collect the balance of the debt due from the shipping companies under Sirinakis’ guarantees. Affidavit of Christopher Elwen, sworn to December 17, 1982 (the “Elwen Aff.”), ¶ 20. Colonial brought that action pursuant to Sirinakis’ submission to English jurisdiction and the forum selection clauses contained in his guarantees. Id., IF 20. The Writ of Summons and Statement of Claim (Elwen Aff., Exh. 24) were duly served upon London solicitors designated in Sirinakis’ guarantees as his agents for service of process. In addition, Sirinakis had actual notice of Colonial’s action in London against him since the Elwen Affidavit, referring to such action, was served on his attorneys herein on December 20, 1982. Under English rules of procedure, Sirinakis had fourteen days from service of process within which to submit an intention to appear and defend. Id. Sirinakis defaulted.

On January 12, 1983, the London Commercial Court rendered a default judgment against Sirinakis in the amount of $5,987,-811.95. Austin Aff., Exh. A.

Plaintiff, by his complaint, purports to make five claims for relief. However, as his own memoranda seems to recognize, he actually makes only two distinct claims: First, he claims that the “wrongful fraudulent and intentional actions of Colonial in refusing and failing to provide funds to allow the continued operation of Margareta and Páralos and in refusing to approve a buyer for Anemodea constituted breach of the Agreement entered between Colonial and Sirinakis.”

In plaintiff’s Second Cause of Action, he claims that the “wrongful, fraudulent and intentional actions of Colonial ... constituted a tortious interference with the business of plaintiff.”

Colonial makes several arguments in favor of dismissal. First, it argued that all of plaintiff’s claims are barred by judgments rendered in England, Malta and Greece since the ultimate facts and issues necessary to those judgments are identical to the ultimate facts and issues alleged by plaintiff here. Second, Colonial contends that plaintiff’s claims should be dismissed because it is the shipping companies, and not Sirinakis, who are the real parties in interest in this case. According to Colonial, “[t]he claims [Sirinakis] asserts, and the damages he claims, if they exist at all, belong to the Shipping Companies, not to Sirinakis individually.” Defendant’s Memorandum at 27.

Next, Colonial argues that plaintiff’s contract claim should be dismissed because it fails to state a claim under the clear and express terms of the letter agreement. Colonial asserts that any oral evidence that it made commitments beyond those included in the letter agreement is barred by the parol evidence rule.

Fourth, Colonial maintains that any personal claims which. Sirinakis has against the bank must be litigated in England because the guarantees Sirinakis signed “contain valid forum selection clauses whereby Sirinakis submitted to the jurisdiction of the English courts and designated the courts of England as the forum for any disputes between Colonial and Sirinakis individually related to loans or guarantees.” Defendant’s Memorandum at 35.

Finally, Colonial argues that the complaint should be dismissed under the doctrine of forum non conveniens.

As set forth below, we agree with Colonial that all of plaintiff’s claims are barred under the doctrine of res judicata. Therefore, we need not reach the other issues raised by Colonial.

DISCUSSION

To date, four judgments have been rendered by the courts of England, Malta and Greece in connection with the arrest, foreclosure and sale of the vessels Anemodea, Páralos and Margareta, and with respect to plaintiff’s obligation under the guaranty. These judgments are as follows:

1) English in rem judgment in favor of Colonial Bank and against the vessel Anemodea, dated April 6, 1982 (Exhibit 13 to affidavit of Christopher Elwen, sworn to December 17, 1982);

2) Maltese in rem judgment in favor of Colonial Bank and against the vessel Páralos, dated May 17, 1982 (Exhibit 18 to the affidavit of Christopher Elwen, sworn to December 17, 1982);

3) Green in rem judgment in favor of Colonial Bank and against the vessel Margareta, dated November 8, 1983 (attached to defendant’s letter of January 12, 1984);

4) English judgment in favor of Colonial Bank and against plaintiff Sirinakis individually, as guarantor of the obligations of the shipping companies, dated January 12, 1983 (Exhibit A to the affidavit of Stephen G. Austin, sworn to February 9, 1983).

As defendant points out, the in rem judgments necessarily established:

1) the validity of Colonial’s mortgage on the vessels in question;

2) the existence and validity of Colonial’s claim against the vessels; and

3) the existence of default by the shipping companies under the mortgage deeds and Colonial’s right to proceed with foreclosure.

The in personam judgment against Sirinakis as guarantor necessarily rested on the same findings and, in addition, established that Colonial was entitled to money judgments against Sirinakis and the shipping companies pursuant to the loan and mortgage agreements and Sirinakis’ personal guarantees thereof.

Colonial argues that the premise of the complaint herein is plainly inconsistent with findings necessary to the prior judgments:

Viewed in any light, the complaint is founded upon the premise that the Letter modified the mortgages and that Colonial, as mortgagee, breached the mortgages as modified. This would be a defense to foreclosure. See Christensen v. Columbia Acceptance Corp., 66 Wash.2d 309 [347], 402 P.[2d] 497 (1965). The judgments of foreclosure included the contrary findings that the Shipping Companies were in default and that Colonial was entitled to foreclose on its mortgages. Plaintiff’s complaint therefore flies in the face of the clear res judicata effect of those foreclosure judgments and as such must be dismissed. [Footnote omitted].

Memorandum of Law in Support of Defendant’s Motion to Dismiss (“Defendant’s Memorandum”) at 13. Colonial contends that the res judicata effect on the prior judgments can be applied to Sirinakis on several different theories.

First, Colonial argues that Sirinakis’ action is barred under the doctrine of The Mary, 13 U.S. (9 Cranch) 125, 143-44, 3 L.Ed. 678 (1815), because it is essentially a collateral attack upon the in rem judgments of foreclosure rendered against the vessels. Under The Mary, an admiralty court exercising in rem jurisdiction has the power to issue a judgment against a vessel which is binding on all the world. See Footnote 9 supra at 16.

Second, Colonial argues that Sirinakis is barred from maintaining this action because, as guarantor of the obligations of the shipping companies, he is in privity with the shipping companies against whom judgments of foreclosure have been rendered.

Third, Colonial asserts that Sirinakis’ present claims are barred on the theory that, if the shipping companies were not signatories to the letter agreement, they were third-party beneficiaries of that agreement, and therefore Sirinakis, as promisee, is barred by the judgments against them.

Finally, Colonial maintains that the claims herein are barred by res judicata because, assuming the letter agreement was an agreement between Colonial and Sirinakis personally, Sirinakis could have raised the letter agreement as a defense to Colonial’s action against Sirinakis on the guarantees.

Plaintiff responds that Colonial’s res judicata argument is based on a mischaracterization of the complaint. According to plaintiff, he is not alleging that the letter agreement modified the mortgages or that the foreclosures were wrongful vis-a-vis the shipping companies:

The causes of action in the complaint are based on a separate and independent agreement between Sirinakis and Colonial. As the ship-owning companies are not parties to the February 25, 1982 [letter] agreement it cannot be an amendment to, or an integral part of the February 17, 1981 and August 28, 1981 loan agreements or the related ship mortgages. Sirinakis is suing on a separate agreement and upon causes of action with separate and distinct elements from defenses or claims which might have been asserted in the mortgage actions.

Plaintiff’s Memorandum at 10.

Plaintiff argues that since the shipping companies were neither signatories or intended beneficiaries of the letter agreement, they could not have raised breach of the agreement as a defense to foreclosure. Nor could Sirinakis have raised the letter as a defense to foreclosure since he had no personal stake in the vessels and thus no standing. Plaintiff further argues, without elaboration, that his present claims are separate and indépendent of any defense which could have been raised by him in the English action on the guarantees. Plaintiff urges that the court should not apply the doctrine of res judicata so as to deprive him of an actual opportunity to be heard.

The Court finds that plaintiff’s characterization of the letter agreement— as an independent agreement between Colonial and himself in his personal, noncorporate, nonguarantor capacity — is belied by the text of the letter itself. The letter clearly shows that the shipping companies are either signatories to the agreement or third-party beneficiaries thereof. Plaintiff has presented no evidence which would contradict this finding, and in fact, plaintiffs own affidavit strongly supports a third-party beneficiary theory.

To begin with, the first sentence of the letter refers to the loan agreements between Colonial and the shipping companies and identifies Sirinakis as the owner or controlling person of the shipping companies. This suggests right away that the subject matter of the letter was the loan agreements and that Colonial viewed Sirinakis as acting in his capacity as representative of the shipping companies.

More importantly, paragraphs 1, 3 and 4 of the letter impose conditions which only the shipping companies (or Sirinakis acting on their behalf) could carry out. The fact that the letter consistently states that “you” (referring to Sirinakis) will perform the conditions, would seem beyond a doubt to indicate that the agreement was between Colonial and Sirinakis, acting as agent for the shipping companies.

Sirinakis makes two arguments against this interpretation of the letter agreement. First, he points out that he signed his own name to the letter and did not indicate that he was signing as representative of the shipping companies. It is questionable whether this fact would be determinative given the fact that the letter itself referred to Sirinakis as owner or controlling person of the shipping companies. Sirinakis also argues that if the letter were intended to be an agreement between Colonial and the ship owners modifying the loan agreement, the bank would have required specific documents amending the agreements and evidence of authorization from the companies to ensure that Sirinakis had the authority to bind the ship-owning companies. Affidavit of John S. Osborne, Jr., sworn to on January 26, 1983, ¶ 4.

Even assuming that the points raised by Sirinakis would preclude a finding that Sirinakis signed the letter agreement as agent for the shipping companies, they would have no relevance to the third-party beneficiary issue. Whether or not the shipping companies were signatories to the letter agreement, there can be no doubt that they were the intended beneficiaries. See Restatement (Second) of Contracts, §§ 302, 308 (the question is whether the parties intended to benefit a third person directly); United States v. Ogden Technology Labor atories, Inc., 406 F.Supp. 1090, 1092 (E.D.N.Y.1973). It was the shipping companies, and not Sirinakis, which were in default on their loan payments. Thus, it was the shipping companies which would have benefited in the first instance from Colonial’s forbearance. Sirinakis himself admits in his affidavit that “[djuring the negotiations [on the letter agreement] I requested on behalf of the ship-owning companies, a moratorium on principal and interest payments in order to allow time for the shipping markets to rebound and to put the companies in a position to be able to repay the debt” (emphasis added). Sirinakis Aff. ¶ 12. From this and from the letter itself, it could not be clearer that the agreement was intended to directly benefit the shipping companies. Thus, although questions of intent are ordinarily inappropriate for resolution by summary judgment, we find that there is no triable issue here. We find as a matter of law that the shipping companies were either signatories (through Sirinakis acting as their authorized representative) to the letter agreement or third-party beneficiaries thereof.

If the shipping companies were in fact the signatories to the letter agreement, it is clear that any rights created by virtue of that agreement run to the companies and not to Sirinakis personally. In that case, Sirinakis would not be the real party in interest for the purposes of the claims herein, and they would have to be dismissed on that basis. See Rule 17(a), Fed.R.Civ.P. Therefore, we will assume, in a light most favorable to Sirinakis, that the shipping companies are the third-party beneficiaries of the letter agreement and that Sirinakis is the promisee of that agreement.

Assuming that the shipping companies were third-party beneficiaries of the letter agreement, there is no question that they could have raised the letter agreement as a defense to foreclosure. Yet they chose not to do so and final judgments were entered in favor of Colonial against the vessels. Under the doctrine of The Mary, 13 U.S. (9 Cranch) 126, 3 L.Ed. 678 (1815), the entire world is bound by these proceedings. Thus, if the ship owners were the plaintiffs herein, it is clear that they would be barred from reopening issues, i.e., the validity of the foreclosures and the existence of a forbearance agreement which they had a full and fair opportunity to litigate in the earlier actions. See also Alpine Gulf, Inc. v. National Bank of Chicago, et al., 1981 A.M.C. 540; Global Navigation Corp., et al. v. Colonial Bank, Heritage Ship Agency, Inc., et al., No. 82 Civ. 3659 (S.D.N.Y. Oct. 19, 1982).

It follows that Sirinakis is barred from reopening these issues as the promisee of the third-party beneficiary contract which he entered into for the benefit of the shipping companies. It is well established that “[a] valid judgment against a third-party beneficiary precludes a later action on the obligation by the promisee.” Restatement (Second) Judgments § 56(2) (1982).

Plaintiff attempts to argue that the doctrine of The Mary does not bar the claims. Plaintiff asserts that since he does not challenge the judicial arrest, foreclosure or sale of any vessel subject to a court’s in rem jurisdiction The Mary is inapplicable. The Court acknowledges that few cases have explored the outer limits of the doctrine; logic, however, suggests that plaintiff’s interpretation of The Mary is too narrow. As defendant argues:

If plaintiff were held not barred by the in rem judgments from relitigating the issues raised in this action, in rem judgments regarding rights in vessels would lose their finality. Owners of vessels and others, such as Sirinakis, asserting rights contrary to those claimed by the vessel’s mortgagee bank, could stand by while a court with in rem jurisdiction proceeded to judgment and then assert, in a subsequent in personam action, a claim that the mortgagee bank had breached a forbearance agreement.
When a mortgagee bank forecloses its lien and obtains judgment, it is entitled to be secure in the knowledge that the mortgagor, and related parties such as Sirinakis, cannot later claim rights inconsistent with those adjudicated in the mortgage foreclosure. See Alpine Gulf, 1981 A.M.C. 540; Global Navigation, No. 82 Civ. 3659 (S.D.N.Y. Oct. 19, 1982).

Memorandum of Law in Support of Defendant’s Motion to Dismiss at 7.

Moreover, even if plaintiff’s claims were not barred by the in rem judgments, they would undoubtedly be barred by the in personam judgment obtained against Sirinakis in England. Sirinakis could have (assuming the in rem judgments are not res judicata on the issue) and should have asserted the letter agreement as a defense to Colonial’s action on the guarantees. However, Sirinakis failed to appear and judgment was entered against him, conclusively establishing that the shipping companies were in default and that Colonial was entitled to recover against the shipping companies under the loan and mortgage agreements and against Sirinakis under the guarantees. Plaintiff’s present claims are in effect a collateral attack on that judgment which is not permitted under either English or New York law.

This Court finds that plaintiffs contract-based claim must be barred under both traditional res judicata principals and the doctrine of The Mary. The Court further finds that any tort-based claim which plaintiff might have stated must be dismissed because collateral estoppel bars plaintiff from re-litigating an essential element of that claim.

Accordingly, the Court grants defendant’s motion to dismiss.

It Is So Ordered.

      . Among the outside materials submitted by defendant in support of its motion are an affidavit sworn to by Christopher Elwen, on December 17, 1982, an affidavit sworn to by Stephen G. Austin on February 9, 1983, a copy of a letter agreement dated February 25, 1982 and copies of loan and mortgage agreements and guarantees. The plaintiff has submitted affidavits sworn to by Joseph C. Smith, John S. Osborne, and Dimitrios D. Sirinakis. In addition, plaintiff relies on the letter agreement and other matters submitted by the defendant.

      . Rule 12(b) provides:
      If, on a motion asserting the defense numbered (6) for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
      Although the Court would ordinarily afford the parties an opportunity to amend their papers and submit statements in accordance with Local Rule 3(g), we find that additional submissions would not be relevant in this case. The Court’s decision rests primarily on documentary proof, and allegations made in the Complaint. Certain undisputed facts raised in the parties’ affidavits are relied upon only as background material.

      . The loan documents are attached as Exhibits 3, 4, 5, 6, 7, 8 and 9 to the affidavit of Christopher Elwen. The facts surrounding the loans, which are not in dispute, are set forth in the Elwen and Sirinakis affidavits.

      . The letter expressly stated that the terms of both the Feb. 1981 and Aug. 1981 loan agreements and Colonial's notice of demand remained in full force. It stated that if the Feb. 28, 1981 payment on this loan was not made, Colonial would be free to serve a notice of demand.
      The letter also specified that "[i]n the event that any person, corporation or government agency shall take any action against any of the vessels, we shall not be obliged to take any steps to counter or defend such action. In the event of any of the vessels being arrested the agreements contained herein shall, at our option, be null and void.”

      . Pursuant to their employment contracts, certain seamen were to be repatriated and replaced.

      . Although it is not clear from the Complaint, plaintiffs memorandum suggests that he is claiming in the alternative, fraudulent inducement to enter into the letter agreement.

      . Plaintiffs Third Cause of Action alleging that the “wrongful fraudulent and intentional actions of Colonial described above destroyed the business and reputation and good will of Sirinakis, making it impossible for him to continue in business and personally subjecting him to claims and litigations to which he is unable to respond” does not appear separate and distinct from his Second Cause of Action, and states, at most, an element of plaintiffs alleged damages. Similarly, plaintiffs Fourth Cause of Action, which states that the “wrongful fraudulent and intentional acts of Colonial aforesaid were without any legitimate business purpose and their sole intended purpose was to deprive Sirinakis of the use of the vessels and to force Sirinakis out of business" seems duplicative of his Second Cause of Action. Although this Cause of Action might be read to allege prima facie tort, plaintiff has failed to plead special damages necessary to support such a claim. See Kalso Systemet, Inc. v. Jacobs, 474 F.Supp. 666, 671 (S.D.N.Y.1979). Finally, in his Fifth Cause of Action, plaintiff alleges that "[a]s a result of Colonial’s wrongful and malicious actions ... Sirinakis has been subjected to numerous claims and litigations to which he is unable to respond. If Sirinakis is held liable, he is entitled to indemnification from Colonial.” This cause of action also seems to be more a claim for a particular type of damages than a separate cause of action. Plaintiff states no new grounds for these damages. See also Footnote 10, infra, at 19.

      . Colonial reasoned that Colonial’s alleged agreement to forbear from foreclosure and to advance funds for the operation of the Paralos and Margareta is inconsistent with Colonial’s rights and obligations under the mortgages. Thus, plaintiff must be alleging that the letter agreement constituted a modification of the mortgages. See Defendant’s Memorandum at 13-14.

      . Plaintiffs Memorandum of Law was filed pri- or to the rendering of the English judgment against Sirinakis personally. Thus the portion of that Memorandum quoted above refers only to the foreclosure proceedings. In its Reply Memorandum, Colonial made the argument that the letter agreement could have been raised by Sirinakis in the English action on the guarantee as well as by the ship owners in the foreclosure proceedings.

      . Were the court to accept plaintiffs unsupported assertion that the letter agreement was an independent agreement which he entered into on his own behalf in an individual, noncorporate, nonguarantor capacity, plaintiff would face another insurmountable problem. By characterizing the letter agreement as independent of the mortgage agreements and the guarantees, Sirinakis could escape the res judicata effect of the prior judgments. However, he would also cut himself off from virtually all of the damages which he claims.
      As the complaint makes clear, most of the damage claimed by Sirinakis was actually damage suffered by the shipping companies. Paragraphs 10 and 13 of the complaint claim loss of earnings and profits by the vessels. Of course, it was the shipping companies and not Sirinakis who owned the vessels and thus the losses. Similarly, the allegation of ¶ 26 that defendant intended to "deprive Sirinakis of the use of the vessels and to force Sirinakis out of business” is actually a claim of damage to the shipping companies. Even where Sirinakis claims that Colonial’s actions destroyed his business reputation and good will, it is clear that the ultimate damage suffered was to his businesses, i.e., the shipping companies. The law is clear that plaintiff, even as president and principal shareholder of the shipping companies, may not claim the companies’ damages as his own. See Terry v. Yancey, 344 F.2d 789, 790 (4th Cir.1965) (sole stockholder of a corporation may not recover individually for corporation’s expense of hiring surrogate because of stockholder’s disability resulting from auto accident); Erlich v. Glasner, 418 F.2d 226, 227 (9th Cir.1969) (stockholder may not maintain a civil rights action under 42 U.S.C. § 1983 for damages suffered by the corporation); Henry v. General Motors Corp., 236 F.Supp. 854, 856-57 (N.D.N.Y.), aff'd, 339 F.2d 887 (2d Cir.1964) (stockholder may not sue in individual capacity unless he suffers direct damage). ”[W]here an individual creates a corporation as a means of carrying out his business purposes he may not ignore the existence of the corporation in order to avoid its disadvantages.” Terry v. Yancey, 344 F.2d at 790, citing Schenley Distillers Corp. v. United States, 326 U.S. 432, 66 S.Ct. 247, 90 L.Ed. 181 (1946).
      The only claim plaintiff makes for personal damages is that Colonial’s actions have made him personally liable for claims and litigations to which he is unable to respond. The only liability he mentions is his personal liability for payments to the crew’s pension funds.

        Sirinakis claims that he is liable for these funds because Mr. Northcutt of Colonial Bank fraudulently induced him to order the Paralos to enter port at Malta. He argues that had he not been so induced, he would have "directed [the Paralos] to Pireaus, Greece, a jurisdiction where both crew and seamen pension funds, for which [he] is personally liable under Greek law, would have taken priority over Colonial's first mortgage.” (Sirinakis Aff. at 11.) However, because Sirinakis was the guarantor of the shipping companies’ obligations, he was liable for the difference between the debt and the amount realized upon sale at foreclosure of the Paralos. Had the pension fund obligations taken precedence over Colonial's first mortgage, it would have been paid and the remainder of the loan obligation for which Sirinakis is now personally responsible would be correspondingly increased. Any gain to Sirinakis from putting into Malto would have been offset by a corresponding increase to his liability under the guarantees. Therefore, Sirinakis suffered no actual damage due to Colonial’s action. Although plaintiff was held personally liable on the guarantees, he does not and cannot (because of the preclusive effect of the English judgment) seek to recover those damages herein.

      . The first sentence of the letter reads in pertinent part:
      We refer to the loan agreements dated 17th February 1981 and 28th August 1981 made between the owning companies of the above vessels (all of which companies are owned or controlled by you) and ourselves ...

      . Paragraph 1 provides that a sale of the Anemodea will be executed on or before March 12, 1982, subject to the bank’s prior approval of purchaser and terms. Obviously, only Anemodea Shipping Company, the owner of the Anemodea, would be in a position to sell the vessel.
      Paragraph 3 provides for a time charter of the Paralos approved by Colonial. Clearly, only Thalassarchis Shipping Company, the owner of the Paralos, would be able to time charter the vessel. Sirinakis would have no power to do so except on behalf of the company.
      Paragraph 4 provides that the Paralos will be moved to Malta pending the time charter. Again, this is a commitment only Thalassarchis could undertake.

      . Of course, Sirinakis, as guarantor, would have benefited secondarily from the bank’s forbearance, However, Sirinakis insists that he did not enter into the agreement in his capacity as guarantor and that he does not bring this action in that capacity.

      . We do not suggest that the ship owners or Sirinakis could have asserted their tort claim in the prior proceedings. However, had they successfully asserted the defense that Colonial breached the mortgage agreement, as modified by the letter agreement, this would have established a record on which to base a subsequent damage action. As it is, plaintiffs tort claim is plainly inconsistent with the judgments obtained by Colonial in the prior proceedings and therefore is barred.
      In order to establish a claim for intentional interference with his business relations, plaintiff would have to prove that the interference was improper. Hecht v. Air Reduction Co., 41 Misc.2d 463, 245 N.Y.S.2d 935 (S.Ct. 1963); Bunch v. Artec Int'l Corp., 559 F.Supp. 961 (S.D.N.Y.1983). A person who asserts in good faith a legally protected interest of his own and thereby interferes with another person’s business relations, does not interfere improperly. Restatement Torts (Second) § 773. Thus, to succeed on his tort claim, plaintiff would have to prove that contrary to the findings necessary to the previous judgments, Colonial’s seizure of and foreclosure on the vessels were improper. Accordingly, since we find the contract claim barred, we. also find that an estoppel must be raised against the tort claim.

      . Arguably, even absent his relationship with the shipping companies, Sirinakis would be bound by the findings in the in rem proceedings since under the doctrine of The Mary, these proceedings in admiralty are binding on the whole world. However, we would hesitate to apply res judicata to Sirinakis’ claims on that theory alone since Sirinakis, having no individual ownership interest in the vessels, may not have had standing to raise any defense to foreclosure in the in rem proceedings. However, since plaintiff was a promisee of a contract for the benefit of the shipping companies, it is sufficient that the shipping companies had s. full and fair opportunity to defend against foreclosure.

      . There is no question but that the English Court had personal jurisdiction over Sirinakis. Sirinakis agreed in the guarantees to litigate in London and had counsel appointed for the purpose of accepting service of process in London. See Elwen Aff., Exhs. 5, 9.

      . The parties have not briefed the issue of what law should apply in determining the preclusive effect of the English judgment on the tort action asserted, since the choice of law provision in the financing agreements applied English law to the contract then executed. O’Rourke v. Eastern Airlines, Inc., 730 F.2d 842, 846-51 (2d Cir.1984). In such a situation the Court may apply the law of the forum state. See Watts v. Swiss Bank Corporation, 27 N.Y.2d 270, 276, 317 N.Y.S.2d 315, 319, 265 N.E.2d 739, 743 (1970). However, we note that British and New York rules of res judicata are not in conflict. Both British and New York law provide that "[a] party is precluded from relitigating matters determined adversely to him in a prior action." Fairchild, Arabatzis & Smith, Inc. v. Prometco (Produce & Metals) Co., Ltd., 470 F.Supp. 610, 616 (S.D.N.Y. 1979). In addition, both grant the same force to judgments by default: “[a] party who has defaulted in a previous action is estopped from setting up a defense in the subsequent action which was necessarily decided in the previous judgment.” Id. See also Meinrath v. Singer Co., 87 F.R.D. 422, 431 (S.D.N.Y.1980) ("[A] party that failed to present relevant arguments or issues to the appropriate tribunal may not thereafter be relieved of its judgment on the ground it failed to decide specific issues that could have been presented.”)