Cite as 736 F.2d 485 (1984)
S & R had been considering the preparation of a Scrabble Players Handbook and had hired an editor, but had developed nothing of substance at the time the Landsberg manuscript arrived. S & R immediately sent a copy of Landsberg’s manuscript to Michael Senkiewicz, an expert Scrabble player, and asked that be evaluate Landsberg’s work. Senkiewicz found on the whole that it was excellent. S & R then entered into a contract with Senkiewicz to produce a section on Scrabble strategy for the S & R Handbook. Part of the contract included an outline that the district court found Senkiewicz had copied from Landsberg’s manuscript. Meanwhile, S & R entered into “negotiations” with Landsberg for rights in his manuscript, which the district court found were a bad faith tactic to keep Landsberg dangling while S & R was preparing its own Handbook based on Landsberg’s work. Landsberg finally demanded that S & R return or destroy all copies of his manuscript in S & R’s possession. The district court found that S & R not only kept copies, but Senkiewicz used his copy of the manuscript as the basis for his section of the Scrabble Players Handbook. S & R severed its relationship with Landsberg shortly before S & R brought out its own Handbook.
Landsberg sued S & R, its subsidiary, Scrabble Crossword Game Players, Inc., and Crown Publishers in Los Angeles County Superior Court on several causes of action, including “piracy of literary property” (infringement of common law copyright) and breach of contract. Defendants successfully moved to have the case removed to United States District Court pursuant to 28 U.S.C. § 1441. After a blizzard of motions by S & R, many found obstructionist and frivolous by the district court, the court tried the case and rendered judgment for Landsberg on his common-law copyright cause of action.
In its findings of fact, the court found that denials of bad faith use of Landsberg’s manuscript and copying from it by Senkiewicz and S & R were “not to be believed” and were “untrue.” The court found that S & R at all times had access to Landsberg’s manuscript, surreptitiously retained copies of it and engaged in wholesale copying of both Landsberg’s ideas and the form of expression that be used in his manuscript.
Although S & R did not use verbatim portions of Landsberg’s work, the trial court found that S & R had paraphrased a significant part of what Landsberg had written and created a Handbook substantially similar to Landsberg’s manuscript. The court granted Landsberg actual and exemplary damages. It also awarded attorneys’ fees and costs under 17 U.S.C. § 505 and the vexatious litigant rule.
S & R ignored the judgment and continued to sell and print its Handbook. Landsberg sued again for continuing copyright infringement, this time under the 1976 Copyright Act, Title 17 U.S.C., rather than California law because of the preemptive effect of 17 U.S.C. § 301(a). The court granted Landsberg summary judgment and damages, but denied his claim for further exemplary damages because there is no provision for such damages under the 1976 Copyright Act.
S & R appeals from both judgments of the district court. Landsberg appeals the denial of exemplary damages in his second action.
II. COPYRIGHT
A. Applicable law.
California law governs Landsberg’s first action, because his claim states a cause of action arising from “undertakings commenced before January 1, 1978,” 17 U.S.C. § 301(b)(2), and federal law governs Landsberg’s second action, because it complains of infringement taking place after that date. But, at least as far as the question of infringement goes, it makes no difference which law applies. California appears to follow federal copyright cases on the question of infringement. See, e.g., Weitzenkorn v. Lesser, 40 Cal.2d 778, 256 P.2d 947, 956–957 (1953); Stanley v. Columbia Broadcasting System, 35 Cal.2d 653, 221
