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Federal appeals court reinstates verdict against financial advisor

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  1. Content Restrictions

    NMU         NINTH CIRCUIT         Copyrights & Trademarks         Nov 17, 2000    

Federal appeals court reinstates verdict against financial advisor

  • Two phrases coined by an author of a financial guidebook were protected by copyright and he is entitled to $655,900 in lost profits.

The U.S. Court of Appeals in Seattle (9th Cir.) ruled on Nov. 16 that one financial advisor’s use of financial terms coined by another was copyright infringement not protected by the fair use doctrine. As a result, the court reinstated a jury verdict for $655,900.

Wade Cook, a financial advisor and seminar speaker, wrote a book in 1995 outlining his investment strategy. In the book, he coined the phrase “meter drop” to refer the investment practice of getting into and out of different stocks quickly. The term is a reference to the profitable taxicab driver practice of picking up and dropping off fares on short trips. Cook also coined the phrase “rolling stock” to refer to stocks that consistently vacillate in price between a high and a low price.

Anthony Robbins, who conducts his own seminars for his company Robins Research International, read Cook’s investment book and then used the phrases in manuals for his own seminars. Cook sued for copyright infringement.

At trial, a jury returned a special verdict in favor of Cook, finding that he had copyrighted the phrases and there was infringement. The jury awarded Cook $655,900. However, the trial court granted Robbins’ motion for judgment as a matter of law and set aside the verdict because it said Cook did not prove the damages were attributable to the infringement.

The federal appeals court reversed the decision of the district court and held that under section 504(b) of the Copyright Act, defendant Robbins, not plaintiff Cook, was responsible for proving that the judgment amount was not attributable to the infringement. “The statutory burden is clear,” the court wrote, “Defendants had to prove the percentage of their gross revenue not attributable to Cook’s book.”

The court reinstated the jury’s verdict.

The court also held that the phrases “rolling stock” and “meter drop” were sufficiently creative to be copyrightable. Finally, the appeals court ruled that Robbins’ use of Cook’s phrases was not fair use due to the commercial nature of his seminars and the relevant importance of the phrases in his seminars.

(Cook v. Robbins; Plaintiff’s counsel: H. Troy Romero, Bellevue, Wash.; Defendant’s counsel: Peter Selvin, Los Angeles) DB


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