STEPTOE & JOHNSON LLP
Two Renaissance Square
40 North Central Avenue, 24th Floor
Phoenix, Arizona 85004-4453
Telephone: (602) 257-5200
Facsimile: (602) 257-5299
 
David J. Bodney (006065)
Sandra K. Sanders (017472)
 
Of Counsel
 
EPSTEIN BECKER & GREEN, P.C.
The Legal Center
One Riverfront Plaza, 7th Floor
Newark. New Jersey 07102
(973) 642-1900
 
John J. Rosenberg
Sanford J. Hodes
 
Attorneys for Defendants

UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
 CIRCLE OF ATONEMENT, INC., a non-     )  No. CIV 99-1503-PCT-RGS
 profit Arizona corporation,    )  
     )  

 Plaintiff,

   )  
     )  ANSWER AND
 vs.    )  COUNTERCLAIMS OF
     )  DEFENDANTS FOUNDATION
 FOUNDATION FOR "A COURSE IN    )  FOR "A COURSE IN
 MIRACLES', INC., a not for profit New    )  MIRACLES," INC. AND
 York corporation, PENGUIN ROOKS USA,    )  FOUNDATION FOR INNER
 INC., a New York corporation, PENGUIN    )  PEACE, INC.
 PUTNAM, INC., a Delaware corporation,    )  
 and FOUNDATION FOR INNER PEACE,    )  
 INC., a not for profit New York corporation,    )  
     )  

 Defendants.

   )  

Defendants Foundation for “A Course in Miracles”, Inc. and Foundation for Inner Peace, Inc. (collectively "defendants"), for their Answer and Counterclaims to plaintiff’s Complaint, respond to the correspondingly numbered paragraphs of the Complaint as follows:

JURISDICTIONAL ALLEGATIONS

1. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 1 of the Complaint.

2. Defendants admit that the Foundation for "A Course in Miracles", Inc. ("FACIM") is a not-for-profit New York corporation with its headquarters in Roscoe, New York. Defendants further admit that FACIM is the present owner of a copyright for the work "A Course in Miracles" (the "Work"). Defendants deny the remaining allegations contained in paragraph 2 of the Complaint.

3. Defendants are informed and believe that defendant Penguin Books USA, Inc. ("Penguin Books") was a New York Corporation doing business in Arizona. Defendants deny the remaining allegations contained in paragraph 3 of the Complaint.

4. Defendants are informed and believe that defendant Penguin Putnam. Inc. ("Penguin") is a Delaware corporation doing business in Arizona and that Penguin Books has been merged into Penguin. Defendants deny the remaining allegations contained in paragraph 4 of the Complaint.

5. Defendants admit that the Foundation for Inner Peace, Inc. ("FIP") is a New York not-for-profit corporation. Defendants further admit that FIP is the former owner of the Work and that FIP has assigned ownership of the Work to FACIM.Defendants deny the remaining allegations contained in paragraph 5 of the Complaint.

6. Defendants state that plaintiff purports to bring the action seeking declaratory relief pursuant to Rule 57 of the Federal Rules of Civil Procedure and 28 U.S.C. §2201. Defendants deny the remaining allegations contained in paragraph 6 of the Complaint.

7. Defendants admit that they have refused to grant plaintiff permission to infringe the copyright in the Work and have requested that plaintiff cease and desist from distributing materials that infringe the Work. To the extent the allegations in paragraph 7 of the Complaint state a conclusion of law, no response is required. Defendants deny the remaining allegations contained in paragraph 7 of the Complaint.

8. Defendants admit that this Court has subject matter jurisdiction pursuant to 28 U.S.C. §§1331 and 1338 because plaintiff purports to base its action on the Copyright Act of 1909 (as amended), 17 U.S.C. §101 et seq., and the Lanham Act, 15 U.S.C.§1051 et seq. Defendants deny the remaining allegations contained in paragraph 8 of the Complaint.

9. Defendants state that plaintiff has infringed its copyright in Arizona. Defendants deny the remaining allegations contained in paragraph 9 of the Complaint.

GENERAL FACTUAL ALLEGATIONS

10. Defendants admit that Dr. Helen Schucman is the author of the Work. Defendants further admit that Dr. Helen Schucman authored the Work during a period approximating seven years, between 1965 and 1972. Defendants deny the remaining allegations contained in paragraph 10 of the Complaint.

11. Defendants admit that Dr. Schucman believed a voice had communicated with her and that she described the process of her authorship as a form of "rapid inner dictation." Defendants deny the remaining allegations contained in paragraph 11 of the Complaint.

12. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 12 of the Complaint.

13. Defendants deny the allegations contained in paragraph 13 of the Complaint.

14. Defendants deny the allegations contained in paragraph 14 of the Complaint.

15. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 15 of the Complaint.

16. Defendants deny the allegations contained in paragraph 16 of the Complaint.

17.   Defendants admit that Dr. Schucman assigned her copyright interests in the Work to the Foundation for Parasensory Investigation ("FPI") in or around 1975, that FPI made an application for copyright registration of the Work, and that FPI changed its name to the Foundation for Inner Peace. Defendants deny the remaining allegations contained in paragraph 17 of the Complaint.

18. Defendants admit that the copyright application identified the Work's author as "Anonymous (Helen Schucman)". Defendants deny the remaining allegations contained in paragraph 18 of the Complaint.

19. Defendants admit that informal study in discussion groups, independent (non-infringing) writings, and teaching centers have been founded with "A Course in Miracles" as the spiritual or philosophical focus. Defendants further admit that as a general matter they have not discouraged and indeed have approved of these undertakings. Defendants deny the remaining allegations contained in paragraph 19 of the Complaint.

20. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 20 of the Complaint.

21. Defendants deny the allegations contained in paragraph 21 of the Complaint.                

22. Defendants deny the allegations contained in paragraph 22 of the Complaint.

23.   Defendants deny the allegations contained in paragraph 23 of the Complaint.

24. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 24 of the Complaint.

25. Defendants admit that on or about November 30, 1993, FIP registered a service mark for "A Course in Miracles" and also admit that on or about December 2, 1997, FIP registered the initials "ACIM". Defendants deny the remaining allegations contained in paragraph 25 of the Complaint.

26. Defendants admit that FIP entered into a contract with defendant Penguin Putnam, Inc. (formerly Penguin Books U.S.A., Inc.), which contract, in its entirety, speaks for itself. To the extent the allegations of paragraph 26 of the Complaint misstate or mischaracterize the content, substance or import of said document, or cite to the same out of context or in a misleading fashion, they are denied.

27. Defendants admit that in or about September 23, 1998, FIP transferred the copyright to FACIM and that FACIM is and has been primarily engaged in teaching and publication activities involving "A Course in Miracles". Defendants deny the remaining allegations contained in paragraph 27 of the Complaint.

28. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 28 of the Complaint.

29. Defendants admit that Dr. Helen Schucman is the author of "Psychotherapy", "The Song of Prayer", and "The Gifts of God". Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations concerning the beliefs of unidentified persons referred to in paragraph 29 of the Complaint. Defendants deny the remaining allegations contained in paragraph 29 of the Complaint.

FACTUAL BACKGROUND OF CIRCLE OF ATONEMENT 

30. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 30 of the Complaint.

31.  Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 31 of the Complaint.

32.  Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 32 of the Complaint.

33.The allegations contained in the first two sentences of paragraph 33 of the Complaint attempt to characterize documents, which, in their entirety, speak for themselves, if they exist. To the extent the allegations misstate or mischaracterize the content, substance or import of said documents or cite to the same out of context or in a misleading fashion, they are denied, Defendants deny the remaining allegations contained in paragraph 33 of the Complaint.

34.The allegations contained in the first sentence of paragraph 34 of the Complaint attempt to characterize a document, which, in its entirety, speaks for itself. To the extent said allegations misstate or mischaracterize the content, substance or import of said document or cite to the same Out of Context or in a misleading fashion, they are denied. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in the second and third sentences of paragraph 34 of the Complaint concerning other publications Mr. Perry began working on in or around 1991. Defendants deny the remaining allegations contained in paragraph 34 of the Complaint.

35. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 35 of the Complaint.

36. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 36 of the Complaint concerning the activities of the Circle of Atonement. Defendants deny the remaining allegations contained in paragraph 36 of the Complaint.

37. Defendants admit that from time to time Mr. Perry and FIP engaged in certain discussions concerning Mr. Perry's requests to quote from the Work.  Defendants deny the remaining allegations contained in paragraph 37 of the Complaint.

38. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 38 of the Complaint concerning the efforts, activities or beliefs of the Circle of Atonement. Defendants deny the remaining allegations contained in paragraph 38 of the Complaint.

39. Defendants admit that Robert Perry requested permission from FIP to quote from the Work in a manuscript presented to FIP in or around 1998.  Defendants are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in paragraph 39 of the Complaint. 

40.Defendants are without knowledge or information sufficient to form a belief as to the expectations or beliefs of the Circle of Atonement as alleged in the first sentence of paragraph 40 of the Complaint. Defendants admit that Dr. Kenneth Wapnick is the President of FACIM and that he teaches differently than Messrs. Perry and Watson. Defendants deny the remaining allegations contained in paragraph 40 of the Complaint.

41.  Defendants admit that FIP assigned the copyright in the Work to FACIM. Defendants deny the remaining allegations contained in paragraph 41 of the Complaint.

42. The allegations contained in the first sentence of paragraph 42 of the Complaint attempt to characterize a document, which, in its entirety, speaks for itself. To the extent said allegations misstate or mischaracterize the content, substance or import of said document or cite to the same out of context or in a misleading fashion, they are denied.

43. The allegations contained in the first sentence of paragraph 43 of the Complaint attempt to characterize a document, which, in its entirety, speaks for itself. To the extent said allegations misstate or mischaracterize the content, substance or import of said document or cite to the same out of context or in a misleading fashion, they are denied. 

44. The allegations contained in paragraph 44 of the Complaint attempt to characterize documents, which, in their entirety, speak for themselves. To the extent said allegations misstate or mischaracterize the content, substance or import of said documents or cite to the same out of context or in a misleading fashion, they are denied.

45. Defendants deny the allegations contained in the first sentence of paragraph 45 of the Complaint. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in the second sentence of paragraph 45 of the Complaint.

46. Defendants deny the allegations contained in paragraph 46 of the Complaint.

47. Defendants deny the allegations contained in paragraph 47 of the Complaint.

COUNT I

48. Defendants repeat their responses to paragraphs 1-47 of this Answer as if set forth here.

49.   Defendants deny the allegations contained in paragraph 49 of the Complaint.

50. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations of contained in paragraph 50 of the Complaint concerning whether the Challenged Publications are for religious, non-commercial, or non-profit educational purposes. Defendants deny the remaining allegations contained in paragraph 50 of the Complaint.

51. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 51 of the Complaint concerning how the Work is considered or with respect to the beliefs of the Circle of Atonement. Defendants admit that "A Course in Miracles" is a copyrighted work. Defendants deny the remaining allegations contained in paragraph 51 of the Complaint.

52. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 52 of the Complaint concerning the beliefs of the Circle of Atonement. Defendants deny the remaining allegations contained in paragraph 52 of the Complaint.

53. Defendants deny the allegations contained in paragraph 53 of the Complaint.

54. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 54 of the Complaint concerning the views of the Circle of Atonement. Defendants admit that one or more of the Circle of Atonement's catalogues list "A Course in Miracles", "Absence from Felicity", "Psychotherapy", "Song of Prayer", and "The Gifts of God".  Defendants deny the remaining allegations contained in paragraph 54 of the Complaint.

55.Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 55 of the Complaint.

56. Defendants deny the allegations contained in paragraph 56 of the Complaint.

57. Defendants deny the allegations contained in paragraph 57 of the Complaint.

58. Defendants deny the allegations contained in paragraph 58 of the Complaint.

59. Defendants deny the allegations contained in paragraph 59 of the Complaint.                  

COUNT II

60. Defendants repeat their responses to paragraphs 1-59 of this Answer as if set forth here.

61. Defendants deny the allegations contained in paragraph 61 of the Complaint.

62. Defendants deny the allegations contained in paragraph 62 of the Complaint.

63.Defendants deny the allegations contained in paragraph 63 of the Complaint.

64.  Defendants deny the allegations contained in paragraph 64 of the Complaint.    

65.   Defendants deny the allegations contained in paragraph 65 of the Complaint.

66.Defendants deny the allegations contained in paragraph 66 of the Complaint.

67.  Defendants deny the allegations contained in paragraph 67 of the Complaint.

COUNT III

68. Defendants repeat their responses to paragraphs 1-67 of this Answer as if set forth here.

69.Defendants deny the allegations contained in paragraph 69 of the Complaint.

70.  Defendants admit that FIP granted Robert Perry permission to quote one thousand words from the Work for use only in his work entitled 'The Elder Brother: Jesus and A Course in Miracles," as set forth in a document, which, in its entirety, speaks for itself. To the extent the allegations of paragraph 70 of the Complaint misstate or mischaracterize the content, substance, or import of said document, or cite to the same out of context or in a misleading fashion, they are denied. Defendants deny the remaining allegations contained in paragraph 70 of the Complaint.

71. Defendants deny the allegations contained in paragraph 71 of the Complaint.

72. Defendants deny the allegations contained in paragraph 72 of the Complaint.

73. Defendants deny the allegations contained in paragraph 73 of the Complaint.

74.  Defendants deny the allegations contained in paragraph 74 of the Complaint.

75.  Defendants admit that Mr. Perry has, on occasion, sent copies of his writings to FIP. Defendants deny the remaining allegations contained in paragraph of the Complaint.

76. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in the second sentence of paragraph 76 of the Complaint concerning the "booklet series". Defendants deny the remaining allegations contained in paragraph 76 of the Complaint.

77. Defendants deny the allegations contained in paragraph 77 of the Complaint.

COUNT IV

78. Defendants repeat their responses to paragraphs 1-77 of this Answer as if set forth here.

79. Defendants admit that on or about November 30, 1993, FIP filed a federal registration for the trademark "A Course in Miracles" and that on December 2, 1997, FlP registered the letters "ACIM". Defendants deny the remaining allegations contained in paragraph 79 of the Complaint.

80. Defendants admit that they seek to prevent infringements of their registered trademarks. Defendants deny the remaining allegations contained in paragraph 80 of the Complaint.

81. Defendants deny the allegations contained in paragraph 81 of the Complaint.

82. Defendants deny the allegations contained in paragraph 82 of the Complaint.

83. Defendants admit that the Work is entitled "A Course in Miracles." Defendants deny the remaining allegations contained in paragraph 83 of the Complaint. 

84. Defendants deny the allegations contained in paragraph 84 of the Complaint

85. Defendants deny the allegations contained in paragraph 85 of the Complaint.

86. Defendants deny the allegations contained in paragraph 86 of the Complaint.

87. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 87 of the Complaint concerning the extent of the Circle of Atonement's publishing efforts and library. Defendants deny the remaining allegations contained in paragraph 87 of the Complaint. 

88. All allegations not expressly admitted herein are denied.

AFFIRMATIVE DEFENSES

First Affirmative Defense

Defendants are not subject to personal jurisdiction in the District of Arizona.

Second Affirmative Defense

Plaintiff's Complaint fails to state a claim upon which relief may be granted.

Third Affirmative Defense

Plaintiff's causes of action are barred by the applicable Statutes of Limitation.

Fourth Affirmative Defense

Plaintiff's causes of action are barred by the doctrines of Unclean Hands and Estoppel.

WHEREFORE, defendants request judgment in their favor as follows:

A. That plaintiff's Complaint be dismissed in its entirety with prejudice, with plaintiff to take nothing thereby;

B. That defendants be awarded their costs incurred herein; 

C.  That defendants be awarded their reasonable attorneys' fees incurred herein to the full extent permitted by law; and

D.That defendants be awarded any other further relief that the Court deems just and proper.

COUNTERCLAIMS

Foundation for Inner Peace, Inc. and Foundation for "A Course in Miracles", Inc. (collectively "Counterclaim Plaintiffs"), by way of Counterclaim against plaintiff, the Circle of Atonement, allege as follows:

PARTIES

 1. At all relevant times hereto, plaintiff, Foundation for Inner Peace, Inc. ("FIP") was, and still is, a not-for-profit corporation organized and existing under the laws of the State of New York, with its principal place of business in Tiburon, California.

2. At all relevant times hereto, plaintiff, Foundation for "A Course in Miracles", Inc. ("FACIM") was, and still is, a not-for-profit corporation organized and existing under the laws of the State of New York, with its principal place of business in Roscoe, New York.

3. Upon information and belief, plaintiff, Circle of Atonement ("Circle"), at all times relevant hereto, was, and still is, a not-for-profit corporation organized under the laws of the State of Arizona, with its principal place of business in Sedona, Arizona.

JURISDICTION AND VENUE

4. This Counterclaim arises under the Copyright Act of 1976, 17 U.S.C §101 et seq. This Court's subject matter jurisdiction is based upon 28 U.S.C. §1331, 1367(a), 1338(a), and 1338(b).

5. Venue is proper in this district under 28 U.S.C. §1391(b) and 1400(a).

NATURE OF THE ACTION

6. Plaintiff FACIM owns the copyright in the book entitled A Course in Miracles and multiple foreign translations thereof (collectively, the "Works"). Plaintiff FIP holds an exclusive license from FACIM for the publication and distribution of the Works. FIP's license in the Works is subject to co-defendant Penguin Putnam, Inc.'s exclusive license to publish and distribute A Course in Miracles in the English language throughout the world, excluding the British Commonwealth.   

7. Through this counterclaim, Counterclaim Plaintiffs seek redress for Circle's intentional, knowing, willful, and deliberate infringement of A Course in Miracles under the Copyright Act of 1976, 17 U.S.C. §101 et seq., by, inter alia, the verbatim copying and distribution of substantial portions of A Course in Miracles. Circle has committed this infringement both through its creation and dissemination of written pamphlets, books, electronic dissemination of infringing materials, tape recordings, and through postings on its internet sites.

8. Circle has distributed such infringing materials throughout the United States, including this judicial district and, upon information and belief, throughout the world.

FACTUAL BACKGROUND 

Business and Relationship of Counterclaim Plaintiffs

9.  FIP is engaged in, and its principal purpose is, the publication of a book entitled, A Course in Miracles, and the dissemination of the teachings in A Course in Miracles. FIP was formerly known as the Foundation for Parasensory Investigation. The Internal Revenue Service acknowledged the change in FIP's name from Foundation for Parasensory Investigation to Foundation for Inner Peace on or about September 14, 1976.

10. To create a teaching vehicle for A Course in Miracles, a sister organization, FACIM, was established in 1983. The creation of FACIM was for the primary purpose of teaching A Course in Miracles through publications, workshops, and classes. As the teaching arm of FIP, FACIM was granted a non-exclusive, royalty-free license to use the Works.

11.  Pursuant to an Agreement dated December 1, 1995, FIP, the then copyright owner, granted to Penguin Putnam, Inc., formerly Penguin Books USA, Inc., ("Penguin") an exclusive license to publish A Course in Miracles in the English language throughout the world, excluding the British Commonwealth. FIP also granted an exclusive license to Penguin UK to publish A Course in Miracles in the British Commonwealth.

12. Penguin has published and distributed A Course in Miracles throughout the United States under its "Viking" imprint.

13.  Through a Transfer and License Agreement (the "Transfer Agreement") executed by FIP and FACIM on September 22, 1998, and approved by the Attorney General of the State of New York on February 27, 1999, FIP assigned and transferred to FACIM all of FIP's right, title and interest in and to the Works. FIP's transfer of the Works to FACIM was explicitly made subject to the existing agreement with Penguin.  

14. As a result of the execution and delivery of the Transfer Agreement, FACIM became the owner and holder of the Works. FACIM is the current owner and holder of the Works. 

15. In the Transfer Agreement, FACIM granted to FIP, inter alia, (a) an exclusive, royalty-free and world-wide license to publish and distribute A Course in Miracles and, inter alia, all translations thereof; and (b) an exclusive, royalty-free and world-wide license to use, copy and prepare derivative works based on A Course in Miracles, including all electronic publishing rights relating thereto.

16.The Transfer Agreement was filed in the U.S. Copyright Office On April 1, 1999, for recordation of the assignment from FIP to FACIM of the Works.

Copyright in A Course in Miracles

17. A Course in Miracles is a three part integrated work comprised of the "Text", the "Workbook for Students", and the "Manual for Teachers".

18. A Course in Miracles is an original literary work that is copyrightable subject matter under the laws of the United States and is fixed in a tangible medium of expression.

19. A Course in Miracles was created during the period 1965 to 1975 and all right, title and interest in the copyright therein was owned and held by Helen Schucman, who was the author and sole owner of the Work.  

20. In 1975, Helen Schucrnan assigned all of her right, title and interest in the copyright of A Course in Miracles to FIP, which then became the owner and holder of said copyright.   

21. A Course in Miracles was first published in or about the Fall of 1975. Since that first publication of A Course in Miracles, all applicable provisions of the Copyright Acts of 1909 and 1976 have been substantially complied with.  

22. Certificates of Registration for A Course in Miracles were issued by the Registrar of Copyrights to the "Foundation for Parasensory Investigation," the former name of FIP, on or about November 24, 1975 bearing Registration No. A-693944 and on June 22, 1976 bearing Registration No.: A-805255.

23. The second edition of the Course was registered on July 17, 1992 bearing Registration No.: TX-3-377-899 and on May 14, 1996 bearing Registration No. TX-4-7-294-765. A true and correct copy of each Certificate of Registration is attached hereto as Exhibit A.

24. FIP has translated A Course in Miracles into multiple foreign languages.  FIP has registered with the Copyright Office, among other things, the translations of A Course in Miracles in Russian (Registration No. TXu-797-613), French (Registration No. TXu-787-333), Chinese (Registration No. TXu-786-618), German (Registration Nos. TXu-343-709 and TX-4-107-194), Spanish (Registration Nos. TX-4-107-l93, TX-3-662-896, and TXu-343-706), Hebrew (Registration No. TXu-670-520), Portuguese (Registration Nos. TXu-343-708 and TX-3-662-896), and Italian (Registration No.: TXu-891-586)

25. During the time in which FIP was owner and holder of all right, title, and interest in and to the Works, all copies of the Works that have been distributed were reproduced in strict conformity with the applicable provisions of the Copyright Acts of 1909 and 1976 and all other laws governing copyright.

26. Notices of copyright have at all times mentioned herein been placed upon publicly distributed copies of the Works, which are the subject of the registration certificates.

27. A Course in Miracles has not been dedicated to the public.

Circle's Acts of Infringement

28. Commencing prior to and continuing through the date of this Counterclaim, Circle has copied and distributed in this judicial district, throughout the United States, and, upon information and belief, throughout the world, substantial excerpts from the English language version of A Course in Miracles.

29. On information and belief, Circle has also distributed and or sold the following written materials, all of which contain substantial unauthorized excerpts from A Course in Miracles, entitled; "Seeing the Face of Christ in all our Brothers," "Shrouded Vaults of the Mind," "Guidance: Living The Inspired Life," "Reality and Illusion: An Overview of Course Metaphysics Part I," "Reality and Illusion: An Overview of Course Metaphysics Part II," "A Healed Mind Does Not Plan," "Through Fear to Love," "The Journey Home," "Everything You Always Wanted to Know About JUDGMENT, But Were Too Busy Doing It To Notice," "The Certainty of Salvation," "What is Death?," "The Workbook As a Spiritual Practice," "I Need Do Nothing:Finding The Quiet Center," "A Course Glossary," "Seeing the Bible Differently: How A Course in Miracles Views the Bible," "Relationships as a Spiritual Journey: From Specialness to Holiness," "The Workbook Companion Volumes I, II and III," "The Answer is a Miracle" and "Let me Remember You: God In A Course in Miracles."

30. In addition, on information and belief, Circle has also distributed and or sold the following taped materials all of which contain substantial unauthorized excerpts from the English language version of A Course in Miracles: "Basic Introduction to A Course in Miracles," "Bringing the Course to Life: Turning Study into Experience," "Text Study, Chapters 1 through 3," "Text Study, Chapters 4 through 6," "Text Study, Chapters 7 through 8," "Text Study, Chapters 9 through 11," "Text Study, Chapters 12 through 13," "Text Study, Chapters 14 through 15," 'Text Study, Chapters 16 to 17," "Text Study, Chapters 18 to 19," 'Text Chapters 20-21," "Text Study, Chapters 22-24, "Text Study, Chapters 25-26," "Text Study, Chapters 27-28," "Text Study, Chapters 29-3 0," "Text Study, Chapter 31, "Reception and Vision," "The Holy Instant," "Judgment," "The Certainty of Salvation," "We Are the Light of the World," "Holy Relationships," "Forgiveness," "God," "A Course in What:," "Time," "The Body," "The Holy Spirit At Work in our Lives" and "Sickness and Healing."

31. In addition, on information and belief, Circle has distributed the following electronic materials that contain other unauthorized and substantial quotations from A Course in Miracles: "The Manual Studies Series" and "The Electronic Text Class."

32. All of the above-identified pamphlets, electronic materials and tapes, which are published and distributed by Circle, are hereinafter collectively referred to as the "Infringing Materials" 

33. Circle has not received permission from either FIP or FACIM to quote from or copy any portion of the Work in the Infringing Materials.

34. In or about April 23, 1990, FIP granted Robert Perry permission to quote from the Work in one publication; specifically, FIP allowed Perry to quote no more than one thousand words in "The Elder Brother: Jesus and A Course in Miracles" in 1991. That permission was expressly limited to that work alone and to the scope indicated in the permission.

35. The Infringing Materials are separate works, substantially different than the materials for which FIP had granted Perry limited permission to quote from the Works.

36. Upon information and belief, Circle continues to offer and distribute the Infringing Materials, and to create new Infringing Materials, which it offers for sale and otherwise disseminates in commerce.

37. In letters dated July 6, 1999 and August 21, 1999, FACIM requested that Circle cease and desist from its acts of copyright infringement with respect to the Infringing Materials and the other excerpts it was using from the English language version of A Course in Miracles.

38. Circle has refused to cease and desist from its infringing acts as described above.

39. All of Circle’s infringing acts, as set forth herein, were performed without the permission, license, or consent of FACIM or FIP.

CLAIM FOR RELIEF

(Federal Copyright Infringement - 17 U.S.C. ~1O1 et seq.) 

40. ounterclaim Plaintiffs repeat and reallege the preceding allegations as if set forth here.

41. FACIM is the owner of a valid, federally registered copyright in the Work A Course in Miracles.

42. By its actions as alleged above, Circle has infringed and will continue to infringe Counterclaim Plaintiff's copyright interests in and relating to A Course in Miracles by reproducing, creating unauthorized derivative works, and distributing and or placing in commerce and or on the internet products that are direct copies of, derivative of, or substantially similar to the copyright work A Course in Miracles.

43. Circle has intentionally copied substantial portions of the Works for its own unauthorized purpose, has written derivative works based upon FIP's and FACIM' s copyrighted material, and has distributed such written materials and derived works in commerce without authorization.

44. By reason of Circle's infringement of the copyright in the Works, it has derived certain revenues attributable to said infringements, the amount of which has yet to be ascertained.

45. Circle's acts of infringement are and have been intentional, knowing, willful and deliberate.

46. Circle's intentional, knowing, willful, and deliberate infringement of Counterclaim Plaintiffs' rights has diminished the value of Counterclaim Plaintiffs' respective copyright interests in A Course in Miracles.

47. Counterclaim Plaintiffs have no adequate remedy at law and, therefore, are entitled to an injunction restraining Circle, its officers, agents, employees, and all persons acting in concert with them, from engaging in any further acts in violation of the copyright laws.

48. Counterclaim Plaintiffs are further entitled to recover from Circle the damages, including attorneys' fees, they have sustained and will sustain, and any gains, profits, and advantages obtained by Circle as a result of Circle's acts of infringement as alleged above. At present, the amount of such damages, revenues, gains, profits, and advantages cannot be fully ascertained.

49. By reason of Circle's infringement, in the alternative, Counterclaim Plaintiffs seek statutory damages in the sum of Twenty Thousand Dollars ($20,000.00) per infringing work as provided in 17 U.S.C. §504(c)(1).

50. Circle's infringement was committed "willfully" as that term is used in 17 U.S.C. §504(c)(2), in that Counterclaim Plaintiff's copyright notice is clearly displayed on its copyrighted materials. At all times mentioned herein, Circle was aware of, and had reason to believe, that its acts constituted infringement of the Works.

51. By reason of Circle's infringement, Counterclaim Plaintiffs seek, in the alternative, statutory damages in the sum of One Hundred Thousand Dollars ($100,000.00) per infringing work as provided in 17 U.S.C. §504(c)(2).

52. By reason of Circle's infringement. Counterclaim Plaintiffs seek an award of costs and attorneys' fees as set forth in 17 U.S.C. §505.

PRAYER FOR RELIEF

WHEREFORE, Counterclaim Plaintiffs respectfully demand judgment against Circle as follows:

A. Circle has infringed the copyrights in the Works;

B. Circle, its officers, servants, agents, employees, attorneys, assigns, affiliates, subsidiaries, and representatives, and each of them, and those persons in active concert or participation with them, shall be preliminarily enjoined from directly or indirectly infringing any of the copyrights in A Course in Miracles in any manner, including, without limitation, reproducing, creating derivative works (including translations) displaying, manufacturing, printing, reprinting, publishing, vending, taking orders, distributing, selling, licensing, promoting, advertising or otherwise exploiting any copies of the Infringing Materials, or any other books or materials substantially similar to A Course in Miracles, or by causing or participating in such acts;

C. Circle, its officers, servants, agents, employees, attorneys, assigns, affiliates, subsidiaries, and representatives, and each of them, and those persons in active concert or participation with them, shall be permanently enjoined from directly or indirectly infringing any of the copyrights in A Course in Miracles in any manner, including, without limitation, reproducing, creating derivative works (including translations), displaying, manufacturing, printing, reprinting, publishing, vending, taking orders, distributing, selling, licensing, promoting, advertising or otherwise exploiting any copies of the Infringing Materials, or any other books or materials substantially similar to A Course in Miracles, or by causing or participating in such acts;

D. Circle has willfully infringed Counterclaim Plaintiffs' copyrights;

E. All infringing materials printed by, or at the instruction of Circle, all materials containing excerpts from A Course in Miracles, and all other books or materials substantially similar to A Course in Miracles, including all manuscripts, bound galleys, or other materials used for the making or promoting of the infringing materials in the possession or control of Circle shall be delivered and destroyed as the Court shall direct;

F. Circle shall provide Counterclaim Plaintiffs with an accounting of Circle's financial records to determine the amounts of Counterclaim Plaintiffs' profits, gains, and other unjust enrichment sums attributable to Circle's infringement of Counterclaim Plaintiffs' copyrights;

G. Circle shall pay Counterclaim Plaintiffs the greater of: (a) the sum of the actual damages suffered by Counterclaim Plaintiffs as a result of Circle's infringement of Counterclaim Plaintiffs' copyrights and the profits derived by Circle from its willful infringement; or (b) statutory damages in the amount of $20,000.00 per work for infringement of Counterclaim Plaintiffs' copyrights pursuant to 17 U.S.C. §504(c)(1); or (c) statutory damages in the amount of $100,000.00 per work for willful infringement of Counterclaim Plaintiffs' copyrights pursuant to 17 U.S.C. §504(c)(2);

H. Granting Counterclaim Plaintiffs' their attorneys' fees and costs to the full extent permitted by law; and        

I. For such other and further relief as the Court may deem just and equitable.

RESPECTFULLY SUBMITTED this 30th day of September, 1999.

STEPTOE & JOHNSON LLP
David J. Bodney
Sandra K. Sanders
Two Renaissance Square
40 North Central Avenue, 24th Floor
Phoenix, Arizona 85004-4453

Of Counsel

EPSTEIN BECKER & GREEN, P.C.
John 1. Rosenberg
Sanford J. Hodes
The Legal Center
One Riverfront Plaza, 7th Floor
Newark, New Jersey 07102
Attorneys for Defendants

CERTIFICATE OF SERVICE

 

The undersigned hereby certifies that a true and correct copy of the foregoing ANSWER AND COUNTERCLAIMS OF DEFENDANTS FOUNDATION FOR "A COURSE IN MIRACLES," INC. AND FOUNDATION FOR INNER PEACE, INC. was mailed this 30th of September 1999 to:

Bart J. Patterson
John H. Cotton & Associates, Ltd.
6900 East Camelback Road, Suite 320
Scottsdale, Arizona 85251
Attorneys for Plaintiff
[Signed]