Chapter Four

Chapter Four

They have no lawyers among them, for they consider them as a sort of people
whose profession it is to disguise matters.
- Sir Thomas Moore, 1478-1535

The Verified Complaint arrived out of nowhere. Harley and I each got a copy. Armand Budish, an elder law attorney like Harley, was suing us in Federal Court in Cleveland, Ohio for infringement of his book, The Medicaid Trap, published in 1989, the copyright for which, the complaint stated formally, had been registered with the Copyright Office. I was so naïve at the time. I remember thinking, Of course it was registered with the Copyright Office; it was a published book.

Without specificity, it was alleged that our book, published a year later, had been — what? slavishly copied, stolen — from his. We were stunned. How could this be? Certainly this was a mistake. Harley said we needed an attorney who understood intellectual property. The term was unfamiliar to me. I looked it up: Intellectual property is a product of the intellect that has commercial value, such as literary, artistic and musical works which are protected by copyright; inventions which are protected by patent; and commercial names and symbols, which are protected by trademark.

Palmer & Dodge handled intellectual property but Harley had almost fainted when he saw Ike’s bill. Harley asked around among his lawyer friends and got the name of a small Boston firm, Bromberg and Sunstein, that was said to specialize in IP. Their offices were as humble as Palmer & Dodge’s were impressive.

Lee Bromberg and Bruce Sunstein joined us in a narrow, municipal-green conference room with overhead lights casting dreary shadows beneath the worn furniture. Framed law degrees, U Cal (Sunstein), and Harvard (Bromberg) were the room’s only ornament. Harvard, I thought. That’s good.

We handed them two copies of our book and a copy of the Budish book purchased by Harley on the way over. They said they had read the complaint that Harley faxed over in advance of our visit.
The claims were broad and vague, they opined: essentially, our book infringed his book. The four of us spent some time comparing and contrasting the copies spread out on the table. Both books covered the same subject: legal strategies to protect assets for people facing long-term care. Both books offered boilerplate legal strategies involving transferring the infirm family member’s assets out of his and his spouse’s name and into the names of his offspring or into trusts.

The material in the two books, however, was organized completely differently. The Budish book was dense and technical, explaining in lawyerly detail the complicated state statutes and federal Medicaid regulations that governed this area of health care law.
In contrast, our book was written for someone with a tenth grade education. It focused on the individual family’s financial situation and the specific assets they needed to protect, not the law itself, with examples and corresponding solutions. It was See-Spot-run simple, as Harley had intended. I knew that not a sentence in the text of our book replicated one in the Budish text.
The Medicaid Trap had been out for about a year when we began work on How to Protect. I had read it; in fact, Harley had given it to me with the admonition, “This is what we don’t want.”

“Did you look at this guy’s book when you wrote yours?” the lawyers asked.

“Of course, and everything else on the subject that I could get my hands on. That’s called research,” I replied.

“Did you lift any language, take any words and phrases, from his book and use them in yours?”

“Of course not,” we said in unison.

“There appears to be no substance here. The complaint doesn’t specify what you are alleged to have stolen. I can’t see where he’s going with this,” Bromberg said.

“Our book is selling like hot cakes,” Harley commented, (he liked that expression)“his book isn’t. Maybe that has something to do with it.”

“Frivolous suit,” Bromberg pronounced.

Frivolous or not, it wasn’t going to just go away. “This is going to cost serious money,” Harley had said when the complaint arrived. His early assessment was being confirmed as we sat around the worn conference table, squirming in uncomfortable chairs. We had to file an answer. The answer would be a denial on all counts. There would be depositions, interrogatories, the gathering of many cartons of financial and sales records. At some point in the process, when it had become apparent that there was no basis in fact for this suit, we would file a motion to have it dismissed, the lawyers assured us. We might even get our legal fees back.

Harley asked for an estimate of what the case might cost. It seemed to be a straightforward matter, they said, probably thirty-five to fifty thousand. I groaned inwardly. Harley wrote a five thousand dollar check for a retainer and we left, understanding little more than when we arrived.

Lee Bromberg would handle the case with an associate, Kerry Timbers, fresh out of Harvard Law. Discovery, the process whereby each side gathers documents and testimony to support their version of the case, began almost immediately. Notices of our depositions arrived in June; mine was to be first. A deposition is where the opposing attorney can ask you anything he wants in order to get something from you to use against you, Harley said. “They can go through your underwear drawer with a flashlight, if they want,” was the way he put it.

A week ahead of the date I went to Bromberg’s office to be prepared. “This is civil, not criminal and you have no First Amendment protections like you see on TV,” Bromberg explained. “You have no right to remain silent. In your deposition I may object to a question for the record but then I’ll usually instruct you to answer. Wait for my objection before you do.”
The rest of the advice was pretty simple:
Tell the truth.
If you don’t know an answer, don’t guess; say, I don’t know.
If you don’t remember, say, I don’t remember.
Don’t give more information than is required to answer the question.
Don’t rush.
Don’t ramble.
“What are they looking for?” I asked. Bromberg said his office had gone over the two books with a fine-tooth comb and found no duplication of any of Budish’s work in our work. No surprise, but that was reassuring to hear. Soon enough we were to learn that the fine-tooth comb they’d used was missing a tooth.

Attorney Kenneth Adamo, was tall and gaunt with thinning hair and an ashen complexion. He was already in his chair when I came into the room and he barely looked up. Adamo had flown into Boston from the Cleveland branch of a sprawling national firm. He sat at one end of the conference table, I sat at the other, Bromberg beside me on one side, the stenographer on the other. The stenographer asked the spelling of my name and administered the oath: “Do you swear to tell the truth, the whole truth…”

The lawyers discussed some technicalities that I didn’t understand regarding the way the deposition was to be conducted. Then Adamo began the questioning. He asked me about my background: Marital status. Schooling. Work experience.
What did I know about Medicaid?
Nothing, before I met Harley.
And now?
I know that Medicaid is a Federal program that pays for nursing home care for people who have no assets.
How had I met Harley?
I wrote an article about him.
How did we write the book?
Harley dictated his lectures to me and I cleaned them up and gave them back as a manuscript.
Where did you do this?
My office.
When did you begin? What month? How long did it take?
Where is he going with this, I wondered? He had put no documents before me to identify, as Bromberg had told me he might do. There was no sign of either book in the stack of papers beside him.
Finally, after three hours of questions that seemed to be aimless, he raised the topic of his client’s book, The Medicaid Trap.
Had I read it?
Yes.
Where did I get I?
From Harley.
Where did Harley get it, if you know?
At an elder law conference he had attended. From Armand Budish himself.
Did Harley read the book?
I believe he read enough to know he didn’t like the way it was written.
What did you think of it?
It was very technical. I couldn’t understand it.
What do you mean by technical?
All the legal language.
Adamo’s eyes narrowed and he began speak in a slow and deliberate manner.
Do you know what the National Governors’ Association is?
I’m familiar with it.
And what is it?
I know that the organization, the NGA, prepared charts showing state by state what assets were exempt from being taken by a nursing home.
Mr. Adamo retrieved from his briefcase a copy of How to Protect and handed it to the stenographer to be marked as an exhibit. She wrote a number on a little sticker and affixed it to the cover.

Adamo rose from his chair and leaned forward to hand me the marked book.
I ask you to direct your attention to the book before you. Is this the book you and Mr. Gordon wrote?
Yes.
He continued standing as he read the questions from a yellow legal pad he was holding in his hand.
Did you include certain charts or tables in preparing this book?
Yes.
I direct your attention to the page I have clipped open in what you have identified as the book you co-wrote with Harley Gordon. Are those the charts you are referring to?
Yes.
Did you get permission to use them?
They are public domain. Anyone can use them.
How do you know that?
I called the NGA and they told me I didn’t need permission.
Where did you get the charts that appear in your book?
You mean, from where, physically?
Yes.
Harley got them at the same elder law conference, but he couldn’t find them in his files.
Is it possible you took them from my client’s book?
It’s entirely possible. I didn’t do the layouts myself so I don’t know for sure. We hired a designer to do the layouts.
Did you have a copy of my client’s book in the office at the time?
Yes.
At this point I noticed that the papers Adamo was holding had begun to flutter slightly as if in a breeze.
Did you get my client’s permission to use those charts?
Why would I do that? I didn’t need to.
Why is that?
Because the charts in your client’s book were from the NGA. They had an attribution at the bottom — “Source: National Governors’ Association Report.”
Adamo’s face tightened. He seemed angry.
But you eventually got the charts from the National Governors’ Association, is that correct?
No, I said I’m not sure. I don’t recall our having the NGA charts.
But your recollection is that the charts in your book, in fact, were taken from the NGA charts.
No, that’s not what I said.
Adamo returned to this line of questioning and rephrased the question a dozen times pressing me to say that the charts in our book had been taken from the NGA charts and each time I repeated I had no recollection of that.
Do you know what a primary source is? He demanded.
Yes.
Did you ever go to the primary source for a copy of those charts?
I don’t think so. No.
Suddenly it was over. “We’re done here,” Adamo snapped and abruptly turned his back.

“What’s with those charts, Lee?” I asked after Adamo had gone. “Did you see his hands shaking when he asked me about them?”
“Did they?” said Bromberg. He didn’t seem worried in the least.

But I was worried. When I got home I wanted to compare the charts in the Budish book with the NGA charts but I didn’t have a copy of either. I called two local bookstores but neither had The Medicaid Trap in stock. The book had come together so quickly I couldn't recall how or when the charts went into the layouts.

Harley’s deposition was scheduled for 9:00 the next morning. I called him at home that night. “There’s something going on with those NGA charts,” I told him. “I testified we may have copied the charts out of Budish’s book. Maybe Budish made some little changes in those charts. Just be careful and be exact. We don’t want to appear to be lying about anything.”

I called Harley the next day after his deposition.
How’d it go?
Fine. Piece o’ cake.
Did he ask you about the charts?
Yes.
What did you say?
I said, “Everything in my book is original except for what is attributed to a public source.” I groaned inside. Lawyers! Why couldn’t he just have said flat out, “We probably got the charts from the Budish book”?

***
Copyright is intended to promote creative expression by offering the creator the exclusive right to commercially exploit his work for a set period of time. A copyright is literally “the right to copy.” A painter’s painting and a poet’s poem are protected by copyright. No one other than the painter or the poet has the right to make copies of, or otherwise financially benefit from, their work.
Originality is required for copyright protection purposes, but it may be minimal. Lists of selected things in alphabetical order, Best Restaurants in Boston, for example, are protectible by copyright.

The law recognizes that society has an interest in fostering, rather than completely stifling, creativity and so the protections of copyright have a limitation in the principle of “fair use.” Fair use is when The New York Times quotes a couple of lines or a paragraph from a book in a book review. The Times has created something new that includes a little bit of another creator’s copyright-protected material. The courts in intellectual property cases try to strike a balance between competing interests: protection for the creator, encouragement for a fertile field of related creators.

***
A day or two after Harley’s deposition Bromberg called with the answer to the mystery of the charts. The charts in the Budish book were indeed from the NGA but Budish had made some minor changes.

It would have been nice if you had checked the charts and advised Harley of that before he went into his deposition and made that wishy-washy statement, I said.

Not to worry, Bromberg replied, the changes were tiny, insignificant. A couple of transposed columns, different headings, an item or two deleted, a word or footnote changed here and there, that kind of thing. It’s insignificant, de minimus. The amount of original material is so little Budish himself didn’t claim authorship. He gave full credit for the charts to the NGA. It’s fair use. That’s our defense.

We were running out of books again and getting ready to go back to press. “Shouldn’t we just take the charts out completely?” Harley asked our lawyers. “The book would be fine without them. Or we could use the NGA charts unaltered.”

Not necessary, we were told. Bromberg said just to be on the safe side, his firm would handle the charts, reworking them and stripping out anything that could potentially cause trouble. We printed another fifty thousand books containing the new Bromberg and Sunstein charts. As late as a year after our depositions, a court document (Defendant’s Responses to Plaintiff’s Request for Admissions) prepared and signed by Bromberg asserted that the National Governors’ Association Report had been the source for the charts in our book.

Days after the new books hit the streets Armand Budish filed a motion for a preliminary injunction to restrain us from selling any more books. There was to be a hearing on the motion in September in Federal Court in Cleveland, Ohio. The night before we flew to Cleveland my insides went into wild rebellion and I barely made it to the plane the next morning.

The good news was that How to Protect was selling briskly and inventory was dropping fast.
The hearing lasted two days. We returned from Cleveland feeling that the light at the end of the tunnel was in sight and went back to selling out fifty thousand new books while confidently awaiting the judge’s ruling. Weeks passed. Harley continued to do radio and television interviews in major markets all across the country and on national outlets like CNBC and National Public Radio. Life returned almost to normal.

The restraining order hit us like a bomb. I got the call from Bromberg at 7:00 in the evening. We could not sell even one more book, Bromberg told me. We had to pull the plug on the whole operation at nine o’clock the next morning or face serious penalties for contempt of court. The timing couldn’t have been worse. We had printed one hundred thousand more copies with the Bromberg and Sunstein charts, at a cost of $120,000, and I had confirmed that morning that they had just arrived at the distributor’s warehouse. Shortly after that shock we received another: a bill from Bromberg and Sunstein — for somewhere in the neighborhood of $200,000.

The basic thrust of the judge’s ruling went like this: Our new charts were derivative of the Budish charts. Though we had tried to conceal our true purpose by making minor changes, the Court held, the charts in our book intentionally infringed Mr. Budish’s copyright. Our conduct in printing more books containing the infringing charts, having been put on notice of the plaintiff’s registered copyright (that formal language in the complaint again), was an example of flagrant disregard for the law, made all the more egregious in that Harley Gordon was himself an officer of the court.
“Four weeks before the hearing,” the Opinion stated, “Defendants again denied copying their tables from The Medicaid Trap.” That denial was in the Response prepared and signed by Lee Bromberg a year after our depositions. We looked like brazen liars. “The Court makes all credibility determinations against Gordon,” the judge wrote. And the revised charts authored by our lawyers had actually elicited from the Court an accusation of a new infringement: "...the derived work...is itself an independent violation of the copyright law."

Budish’s winning argument had relied heavily on a case just handed down by the Supreme Court in 1991. “The Feist opinion began with the well-grounded proposition that although facts themselves are not copyrightible, compilations of facts are.” The key to copyright protection is determining “whether the selection, coordination, and arrangement is sufficiently original to warrant protection.” In other words it was the format that was protectable by copyright, not the facts. “The requisite level of creativity is extremely low; even a slight amount will suffice…no matter how crude, humble or obvious it may be.”

Most astounding of all was the Court's finding that Budish’s misleading attribution to a public source did not “demonstrate that Budish intended to disclaim any protectable interest in his tables.” What!? How was someone supposed to know that they’d be accused of “literary larceny” if they copied those charts?

That judge must be nuts, I remember thinking. Our book was completely and totally dissimilar, yet she had focused on those goddam charts. My knees almost buckled as I hung up the phone.

The story made the national and local legal journals, the AP wire, The New York Times, The Wall Street Journal and, of course, all the Boston papers. Harley and I decided we had no choice but to settle the case and we called Lee to tell him. Lee protested.

“The judge is wrong,” he insisted. “You need to stiffen your spines and file an appeal. This was just a ruling on an injunction. You need to take this case to trial.”

“We lost on the injunction; we have no cash flow,” Harley reminded him. “We have to get the injunction lifted. We need you to call them and tell them we want to settle the case.”

Lee refused. He was unwilling to put in any more time, he said, without an immediate payment of $60,000 and an additional $60,000 per month. Shortly thereafter he ceased returning our phone calls.

We flew back to Cleveland for a settlement conference, represented by a Cleveland lawyer who knew nothing about the case. Both sides would be meeting in chambers with a new judge. On our side paranoia was rampant. When we arrived we heard a rumor that someone had gotten wind of a possible ex parte meeting (a meeting with one party —us— not present) between the Cleveland lawyers and the Cleveland judge. We felt like lambs being led to slaughter.

The judge reminded me of General Patton and acted like a top officer accustomed to being in full command. We were briskly motioned into a row of seats in front of his huge mahogany desk. He wanted a settlement — now. He immediately began turning up the heat: he threatened Harley with disbarment and both of us with charges of criminal contempt.

Budish was demanding $900,000. How much had our book earned? That much? So $900,000 was not unreasonable when the book had grossed a million six its first year. There was some discussion of how the press had gotten the story; apparently the source was a press release from the Budish camp.

We signed a confession of judgment. I balked at the word “confession.” It doesn’t mean you are confessing to doing something wrong, I was told, it means that you are agreeing to a judgment amount to settle the case. The price tag: we were to pay $750,000 in damages, $150,000 immediately and the balance over two years at four dollars per book, in order for the court to lift the injunction and allow us to sell books.

To protect the book’s commercial viability Budish agreed to refrain from issuing negative publicity. The settlement documents were sealed by the court to protect the reputation of the book.
Sealed, but not expunged. A ticking time bomb.

But it was too late to revive How to Protect. It had been pulled off bookstore shelves all over the country and word of the injunction had seeped like a stain throughout the industry. Publicity had been completely derailed for weeks on end. Sales were down to a trickle. For all practical purposes How to Protect was dead.

In the weeks following the settlement Harley began to talk to his lawyer friends about a malpractice suit. One of them contacted Bromberg and Sunstein on our behalf and informed them that we were challenging the outstanding balance on the bill and considering a malpractice action. Bromberg’s response was to seek and obtain an ex parte attachment on the company’s bank account and on my personal bank account, totaling approximately $13,000. In his affidavit, Bromberg stated that his clients were pleased with the quality of his firm’s work and were simply refusing to pay the bill.

Another of Harley’s lawyer friends took the case on contingency and we sued Bromberg and Sunstein for malpractice. While that action was going forward Budish engaged a Boston law firm to transfer the judgment from Ohio to Massachusetts and initiate a new suit to collect the money. For many months I faced the terrifying possibility of losing everything, not only my livelihood but also the home where my children and I had resided for two decades. I would wake up in the middle of the night and pace the floor for hours.

Eventually there was an offer of settlement from Bromberg and Sunstein’s malpractice carrier. After our lawyer took his one-third contingency fee, the balance went toward paying off the judgment. Harley and I didn’t receive a penny.

Many months later I was cleaning out my office. The staff was long gone. The extra phone lines had been turned off. The press kits, stacked in orderly piles along the walls, were collecting dust. Surrounded by remnants of a once thriving business, I still could not grasp how things had gone so terribly awry.

I came across a folder marked “Unsolicited Testimonials” containing grateful letters from people who had bought the book. I picked out one letter: “My mother suffers from Alzheimer’s…” And another: “Since his stroke my husband can’t walk or speak…I didn’t know where to turn…”
My eye lit on a box of books on copyright law sitting in the corner. I grabbed the top one and sat cross-legged on the floor, flipping pages. Alone after all those many months of bewilderment, I was still looking for answers.

Suddenly pieces of the mystery, like shards of broken china, fitted into place. Fair use, I read, does not cover situations where the use is for a commercial purpose, is in a competing work, or where the use may affect the market for the copyrighted work.
Oh, my God, I whispered to myself. Our book was published for a commercial purpose, did compete with his book and did blow his book out of the marketplace. What were our lawyers thinking in relying on a fair use defense?

I read on. “Copyright infringement may be innocent when the work taken does not bear a copyright notice or that notice is in some way defective.” Innocent! That was exactly what we were. How could we have known? The notice was defective. The attribution to a public source indicated the charts were free for anyone to use.

I reached for another volume, The Copyright Book by William Strong, and flipped to a section marked “The Innocent Infringer.” A person who uses someone else’s work, I learned, even if unwittingly, is still an infringer. However, the penalties for innocent infringement are far milder than those for deliberately stealing someone’s work. Until the innocent infringer was notified that the work he had taken was registered with the copyright office (the precise language of the complaint), he could continue to publish. He might or might not have to turn over some or all of his profits or pay the lawful copyright holder a royalty. BUT “under no circumstances would he be required to compensate the copyright owner for damages.”

Damages! There is no limit on damages in a willful infringement suit. That, no doubt, is the reason why publishing is one of the most litigious areas of commerce. Most lawsuits settle out of court and the dollar amount is usually concealed by a confidentiality agreement. Alex Haley is said to have spent $10 million to defend his book Roots from infringement claims. Who knows if he caved in for no other reason than that he was being buried alive in legal fees.

Suddenly I remembered Adamo’s hands shaking when he was questioning me about the charts. I’d said it was entirely possible that our charts had been taken from the Budish book because I relied on the attribution. On hearing that, Adamo had seen his case go from deliberate infringement to innocent infringement and his expectation of huge damages and big bucks crumbled on the spot. No wonder his hands shook.

At some point after the depositions, we later learned, Budish’s camp had contacted Bromberg and Sunstein and floated the possibility of a settlement. And then we handed the big bucks right back to him. We continued to publish after we had been put on notice by the filing of a lawsuit that Budish was claiming copyright infringement.

As the months passed I could not stop going over and over the case, like a pathologist dissecting a hit and run victim. Something was still missing. At first I thought the Cleveland court had leaned on the scales of justice. The federal court there was said to be very political. I began studying legal books, wading through dense, obstruent language charged with Latin, looking for — what? I didn’t know.

Eventually I found what I was seeking. In law there is something called the doctrine of estoppel. Estoppel has three elements: representation, reliance, detriment. In plain English here’s what that means:
You told me something. That’s representation.
I believed you. That’s reliance.
I acted on that belief and harm was done. That’s detriment.

When those three conditions are met you are barred by the doctrine of estoppel from seeking damages from me for any injury arising out of that sequence of events.
So in this case I could say: You told me the charts were public property (representation.)
I believed you (reliance.)
I then used them and became an inadvertent infringer thereby, allegedly, damaging your market (detriment).
You are barred (estopped) from seeking damages from me because you set off the chain of events in the first place.

Stripped of the legalese, that concept struck me as simple common sense. Innocent infringement and estoppel, that should have been our defense, not fair use. But it wasn’t, because of what happened after we were sued.

Legally, the lawsuit had put us on notice. We should have stopped selling books right there and then until we found out what part of Budish’s book we were alleged to have infringed. The damages, if any, would have been limited to the number of books we had sold up to then, perhaps only a tiny fraction of our profits or none at all because the copyright notice was defective.
But we didn’t do that. We printed more books, and then more books, containing the charts after that notice, making us intentional infringers.

The fact that our intellectual property attorneys did not immediately tell us to stop selling books until we knew for certain where the problem was, the fact that we had been advised repeatedly that it was okay to print more books containing the charts even after it was clear that the charts were a problem, the fact that our lawyers themselves created even more problematical charts knowing we would be printing 100,000 new books, did not change the result: we were liable under the law.

Budish had claimed originality in twenty-six changes he made to eight public domain charts. The charts made up a scant three pages of a book almost two hundred pages long. For that he was to receive seven hundred and fifty thousand dollars.

Was there some kind of justice in all this that I was missing? How was society served by this particular test of copyright law?

Lawyers will tell you that the system worked because we were able to file another lawsuit to hold our attorneys accountable. We achieved a settlement, yes, but I was not comforted. The malpractice suit did not give back what was lost. No, it wasn’t a human life. But it was a piece of the American dream and, like a child victim of medical error, that amazingly successful first book died prematurely. And the price of the settlement was many more months of grief.

Like a cancer, a protracted lawsuit changes your life. It’s with you every minute. You wake up every morning and go to bed every night with the knowledge that there are well staffed law firms out there, full of highly paid, fiercely motivated specialists, trained in arcane procedures that you don’t understand, whose purpose it is to inflict maximum harm on you.

As with a devastating illness, I believe only those who have lived it can understand. If you’re resourceful, you find ways to cope. Remembering Marian, I learned to make a conscious effort to treasure every bit of warmth and light I could find amid the ashes.

But I was only in training; the worst was yet to come.