Veoh Protected By Safe Harbor; 9th Cir.

UMG Recordings Inc. et al. v. Veoh Networks Inc. et al., No. 09-56777 (9th Cir. filed 12/20/2011) [Doc. 39]

Veoh Networks (Veoh) operates a publicly accessible website that enables users to share videos with other users. Universal Music Group (UMG) is one of the world’s largest recorded music and music publishing companies, and includes record labels such as Motown, Def Jam and Geffen. In addition to producing and distributing recorded music, UMG produces music videos. Although Veoh has implemented various
procedures to prevent copyright infringement through its system, users of Veoh’s service have in the past been able, without UMG’s authorization, to download videos containing songs for which UMG owns the copyright. UMG responded by filing suit against Veoh for direct and secondary copyrightinfringement. The district court granted summary judgment to Veoh after determining that it was protected by the Digital Millennium Copyright Act (DMCA) “safe harbor” limiting service providers’ liability for “infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.” 17 U.S.C. § 512(c). The 9th Circuit agreed, and accordingly affirmed.

"We ... hold that merely hosting a category of copyrightable content, such as music videos, with the general knowledge that one’s services could be used to share infringing material, is insufficient to meet the actual knowledge requirement under [the statute]".

Statute Of Limitations Limits Damages Claim Against Jay-Z; Concert Profits Questionable Damages

Fahmy v. Jay-Z, et al., 07-cv-5715-CAS (C.D. Cal. decided. Dec. 9, 2011) [Doc. 309].

Plaintiff brought this copyright infringement action concerning the song Big Pimpin'. The Court concluded that plaintiff may recover damages from any infringement only within three years prior to the filing of his lawsuit unless he can provide other bases for equitably tolling the statute. The Court, however, was unpersuaded by any of the three bases offered by plaintiff for why the statutory period should be equitably tolled. The mere fact that plaintiff lived in Egypt and speaks little to no English did not toll the statutory period. Alleged misrepresentations by the record label did not toll the statute. Lastly, the existence of a prior judicial action did not toll the statute. "Ultimately, plaintiff cannot avoid the fact that he admittedly knew that Big Pimpin’ allegedly infringed Khosara, Khosara by December 2000, more than six years prior to filing the present lawsuit."

The Court next turned to the question of whether Jay-Z’s concert revenues are properly considered direct or indirect profits resulting from his allegedly infringing performances of Big Pimpin’. Because the Court determined that this question presented a triable issue, the Court reserved judgment as to whether plaintiff is able to prove the requisite causal nexus.

UMG's Venue And Transfer Motions Denied In Digital Class Action

Rick James v. UMG Recordings, No. 11-1613 (related case No. 11-2431) (N.D. Cal. filed Nov. 1, 2011) (Doc. 34).

Plaintiffs in two related cases filed putative nationwide class actions against UMG Recordings, Inc. Plaintiffs seek to represent a class of recording artists, music producers, and other royalty participants. The complaints allege that UMG has failed to properly account for and pay its recording artists and music producers for income it has received, and continues to receive, from the licensees of its recorded music catalog for the sale of digital downloads and ringtones.

Defendants moved to dismiss for improper venue. The Court concluded that under the circumstances, it would be unreasonable to transfer the action based on the forum selection clause contained in a 1977 contract. "Assuming arguendo that the forum selection clause is valid and enforceable, that clause only governs the claims brought under the 1977 agreement. In analogous circumstances, courts have found it unreasonable to enforce a forum selection clause that applied to some but not all of the plaintiff’s claims."

Alternatively, defendant moved to transfer venue pursuant to 28 U.S.C. § 1404(a), contending

that the Central District of California is a more convenient venue. The primary dispute was whether transfer will serve the convenience of the parties and witnesses. The Court concluded that defendant had not met its burden that the case should be transferred.

Defendant also moved to dismiss plaintiffs’ claims under California Business & Professions Code

§ 17200. In both cases, plaintiffs allege that UMG knowingly breached its contracts with recording artists and music producers, and that “UMG either knew, recklessly disregarded, or should have known that its collection of income from Music Download Services and Mastertone Providers was in connection with a license agreement and the royalties payable to Plaintiff and the Class should have been accounted for and paid on that basis.” The Court concluded that plaintiffs stated a claim under § 17200, and that the questions raised by defendants’ motions are better suited for determination on a full factual record (i.e., at summary judgment).

Lastly, a third-party ("The Tubes") sought to intervene. The Court denied the motion because the proposed intervenors assert claims “parallel” to those already pending before the Court, and thus their interest are already represented. "If plaintiffs in these cases, who the Court notes are represented by the same counsel as The Tubes, believe that The Tubes should be added

as a class representative, plaintiffs may seek to amend the complaints."

Example Of "Public Performance" Complaint Against Radio Station

MPCA King Of Spades, et al. v. T.E.C. 2 Broadcasting, Inc. et al., Index No. 1:11-cv-0080-JPJ-PMS (W.D. Va. filed Oct. 24, 2011).

Plaintiffs are affiliates of SESAC, a performing rights society, and seek injunctive relief and damages for defendants' allegedly unauthorized public performances of plaintiffs' copyrighted musical compositions on defendants' owned and operated commercial radio station.

Black Eyed Peas "Boom" Not "Substantially Similar"

Batts, et al. v. Adams, et al., No. 10-cv-8123 (C.D. Cal. filed Oct. 21, 2011) [Doc. 251].

Plaintiffs allege that the Black Eyed Peas' Grammy-nominated song "Boom Boom Pow" infringed Plaintiffs' copyright in the song "Boom Dynamite." On defendants' motion for summary judgment, the court employed the "extrinsic test" to determine substantial similarity of the two songs. The Court held that the allegedly protectable elements in Plaintiffs' song (the hooks, and use of the phrase "I got that" followed by the repeated used of the word "boom") were not substantially similar to the elements of the Black Eyed Peas song. Also, the Court held that the non-protectable elements of Plaintiffs' song were not entitled to copyright protection. Accordingly, the Court concluded that as a matter of law the defendants were entitled to summary judgment.

Duke Ellington's Foreign Royalties Claim Dismissed Under Plain Language Of 1961 Contract

Ellington v. EMI Music Inc., 651558/2010, NYLJ 1202519466664 (printed Oct. 21, 2011), at *1 (Sup. Ct., N.Y. Co. decided Oct. 2011).

This is action for breach of a songwriter royalty agreement, fraud, and a declaratory judgment. Defendant EMI moved to dismiss the complaint.

Plaintiff Paul M. Ellington, the heir and grandson of the legendary jazz composer and performer Edward Kennedy "Duke" Ellington, sought to recover foreign music publication royalties allegedly owed to him by defendants pursuant to contract dated December 17, 1961 (the 1961 contract). Ellington also sought to commence a class action against defendants on behalf of a putative class consisting of all persons to whom defendants have failed to pay their full contractual share of foreign publication royalties.

Pursuant to the 1961 contract, the First Parties transferred to the Second Party the copyrights to numerous identified musical compositions written by Duke Ellington between 1927 and the contract date, in exchange for, inter alia, payments of cash and royalties, calculated as a percentage of various sources of income, including income generated from sales outside the United States. The 1961 contract superceded a series of similar agreements between Duke Ellington and Mills Music or certain of its affiliates.

There was no real dispute that the 1961 contract is a "net receipts" songwriter royalty agreement. A "net receipts" agreement, common in the music industry prior to the early 1980s, provides for the payment of royalties to the songwriter on a net receipts basis, or, payment based on the net income received by the United States publisher from foreign subpublishers, who retain a percentage of the foreign income as a fee in payment for their services in exploiting and administering publication of the songs outside the United States.

The Court held that the 1961 Contract was clear and unambiguous. ""The royalty payment provision terms demonstrate that the 1961 contract is a net receipts royalty agreement that requires Mills Music, now EMI Mills, to pay Duke Ellington, now Ellington, one half of the 'net revenue actually received by the Second Party' from the 'foreign publication' of the songs falling within the scope of the contract." The Court rejected plaintiff's argument that the 1961 contract was a "at source" agreement, i.e., an agreement for payment of royalties earned worldwide calculated on the amount of income earned in the foreign territories at their source, rather than on the portion of that income received by the United States publisher. In sum, the 1961 contract permited defendants to employ the very method of royalty calculation of which Ellington now complains. Motion to dismiss granted.

Label Fails To State Copyright Claim; Leave To Amend Granted

Tufamerica, Inc. v. The Orchard Enterprises, Inc., No. 1:11-cv-01816 (S.D.N.Y. filed Oct. 18, 2011) [Doc. 16].

Plaintiff is the owner of the record label Tuff City Music Group and owns the rights to thousands of musical recordings and compositions. In September 2006, TufAmerica licensed defendant's predecssor the right to market a large number of musical tracks by way of digital downloads (the “License”). The License obligated defendant's predecessor to pay TufAmerica various types of payments in exchange for digital distribution rights to hundreds of songs. In late 2007, defendant assumed its predecessor's obligations under the License. While TufAmerica received various payments from Digital and Orchard, it never received any payment of mechanical royalties.

Defendant argued that the License preempted plaintiff's copyright case. The Court agreed:

TufAmerica fails to state a facially plausible claim under the Copyright Act because it concedes that its copyright claim is governed by the License, not the Copyright Act. While TufAmerica subsequently argues that the License does not govern mechanical royalties, a “claim for relief ‘may not be amended by the briefs in opposition to a motion to dismiss.’” As a result, Orchard’s motion to dismiss is granted.

Because TufAmerica’s claim under the Copyright Act was dismissed, the court lacked pendent jurisdiction over the New York State common law claim of unjust enrichment.

However, because the License did not unambiguously preempt a claim under the Copyright Act's compulsory license provision, leave to amend the Complaint was granted.

Florida Long Arm Statute Examined In Copyright Case

Wishfire Enterprises, LLC v. Dancing Ferret Discs, Inc. Index No. 4:11-cv-00092-RH-WCS (N.D. Fla. filed 10/12/11) [Doc. 30].

This is a copyright-infringement and breach-of-contract case. The plaintiff The Cruxshadows is a band that records music and has had three number-one hits. The plaintiff Virgil R. Du Pont, III, is the band‟s lead member. T he other plaintiffs are a limited liability company and corporation that market the band's music under a license from the band or its lead member. All are based in Florida. The defendants moved to dismiss for failure to state a claim on which relief can be granted and lack of personal jurisdiction. The Court denied the motion.

The defendant Dancing Ferret Discs, Inc., has a record label and distributes music throughout the United States, including in Florida. Dancing Ferret' s principal place of business is in Pennsylvania. Citing Fla. Stat. § 48.193 (2010) and Cable/Home Communications Corp. v. Network Productions, Inc., 902 F.2d 829, 856-57 (11th Cir. 1990), the Court held that Florida's long-arm statute establishes jurisdiction when a nonresident transmits material into Florida that infringes a Florida resident‟s copyright. "[C]opyright infringement in Florida, though initiated from elsewhere, subjects the infringer to jurisdiction in Florida..."

Karaoke Damages Limited On Per "Work" Basis

Sony/ATV Music Publishing LLC v. D.J. Miller Musict Distributors, Inc. et al., Index No. 3:09-cv-01098 (M.D. Tenn. filed Oct. 5, 2011).

Plaintiffs allege that they are the owners/administrators of music copyrights in numerous original music compositions. Plaintiffs further allege that since at least early 2006, all of the named defendants had been participating in the manufacture, reproduction, distribution, advertising, promotion and offering for sale of illegal and unauthorized copies of Plaintiffs’ music compositions in the form of karaoke recordings in various formats for discs and Internet downloads.

The Defendants argue that Plaintiffs seek damages beyond what is permitted under the Copyright Act because they seek damages on a per infringement basis and not a per work basis. The Defendants allege that Plaintiffs are improperly seeking 1,406 statutory awards because the lists annexed to the complaint of allegedly infringing songs contain many duplicate listings of songs; Defendants argue that, once these duplicate listings are removed, there are only 448 “works” for which Plaintiffs could be able to recover statutory awards.

The Court agreed with Defendants. "The plain language of the Copyright Act indicates that a single statutory award is appropriate for all infringements related to a single copyrighted work". Motion granted.

6th Circuit Rules On Copyright Issue

Severe Records, LLC v. Rich et al., No. 09-6175 (6th Cir. Sep. 23, 2011).

Plaintiff Mark Christopher “Chris” Sevier authored a song entitled “Better.” Defendant Shanna Crooks recorded the song and, because they were pleased with the results, they co-authored and recorded a second song, “Watching Me Leave.” Their relationship then collapsed, Crooks signed as a recording artist with unrelated recording and management companies, and various

accusations and altercations followed, precipitating this action. Sevier and his recording company, Severe Records, LLC (collectively, “Plaintiffs”) filed suit, alleging what Sevier characterized as a “novel” claim of copyright infringement against Crooks and

others for preventing Plaintiffs from commercially exploiting the two songs through threats contained in cease-and-desist letters and requests to music retailers that the songs not be offered for sale. Plaintiffs also sought a declaratory judgment regarding the authorship of the songs and ownership of the copyrights to the two songs. The district court dismissed the amended complaint for failing to state a claim of copyright infringement and declined to consider Plaintiffs’ pendent state law claims or issue a declaratory judgment. The 6th Circuit affirmed the district court’s dismissal of the copyright infringement claim and reversed its dismissal of the

declaratory judgment claim.

There is no allegation anywhere in the amended complaint that Crooks did anything with the musical composition “Better” other than utilize the sound recording that she and Sevier created and that she was admittedly permitted to use for commercial or non-commercial gain. Indeed, Plaintiffs conceded in paragraph 735 of their amended complaint that “[t]he Defendants did not engage in unauthorized copying, but rather, their actions prevented Plaintiffs from copying.” That ends the inquiry; no claim for copyright infringement was properly alleged. Plaintiffs’ allegation that “Crooks attempted to transfer and did transfer an interest in the composition ‘Better’, [sic] which she did not own, to the Rich Defendants” is not the same thing as creating an improper copy of “Better.” We read nothing in the plain language of the Copyright Act, 17 U.S.C. § 106, to suggest that such a transfer constitutes copyright infringement. We expressly decline Plaintiffs’ invitation to grossly expand copyright infringement causes of action to include any acts that create barriers to a copyright holder’s ability to fully exploit that copyright.

Judge Reduces TM Jury Verdict Award To Hendrix

Experience Hendrix, LLC v. Hendrixlicensing.com, Ltd. et al., No. 2:09-cv-00285 (W.D. Wash. filed Sep. 21, 2011) [Doc. 160].

Plaintiffs own various tradmarks incorporating Jimi Hendrix's name, image, signature, song titles and/or lyrics. Defendants used one or more of these federally registered markes on products bearing Hendrix's image or art he created. The case proceeded to trial on three issues: damages for trademark infringement, defendants' liability for violation of Washington's Consumer Protection Act, and upon a finding of liability, actual damages for the consumer protection violation. After trial, the jury deliberated and rendered a verdict in favor of plaintiffs awarding, on the infringement claim, actual damages of $306,650 and defendants' profits of $60,000.

The Court concluded that the evidence, when construed in the light most favorable to plaintiffs, permitted only one reasonable conclusion, which was contrary to the jury's verdict concerning lost profits. "Having entirely failed to carry their burden proving expenses, plaintiffs are not entitled, as a matter of law, to an award of lost profits."

The Court further concluded that the jury's awards for injury to reputation and injury to goodwill were contrary to the Court's instructions and unsupported by the evidence.

The Court denied plaintiffs' motion for attorney fees under the Lanham Act in light of defendants' overall success and lack of bad faith. However, Plaintiffs were entitled to attorneys fees under the state consumer protection claim -- which the Court limited to $50,000 (or 10% of the amount requested by Plaintiffs).

Lastly, the Court entered a limited permanent injunction.

Copyright Case Dismissed Against 50 Cent Over Crime Story/Book

Winstead v. Jackson, et al., No. 2:10-cv-05783 (D.N.J. Sept. 20, 2011) [Doc. 45].

In this copyright infringement action, Plaintiff alleges that Defendants’ movie and companion album, both entitled Before I Self Destruct, infringe upon Plaintiff’s copyright in his book, The Preachers Son - But the Streets Turned Me Into a Gangster. Plaintiff is the author and sole owner of the copyright for the Book. Plaintiff alleges that Defendants infringed upon the

copyright of the Book by publishing and selling the Movie and the Album, both of which

Plaintiff contends derive their content from the Book.

The Court granted defendants' motion to dismiss for failure to state a claim, under Fed. R. Civ. P. 12(b)(6). Plaintiff avers that the film duplicates the generalized theme and story

of the book and amounts to actionable copying. "However, general plot ideas and themes lie in

the public domain and are not protected by copyright law." Continuing:

There is no doubt that the Book and Film do share similar characters, themes, as well as a similar setting. However, this s haring of common features is only natural since both works feature a protagonist who has a difficult upbringing and turns to a life of violence and street crime, a story which has long ago been part of the public domain and which has been the subject of numerous movies and television shows. Thus, both works may properly contain gang life in inner-city New Jersey, characters spending time in jail, the search for an ex-girlfriend upon release from prison, making love in the shower, obtaining money through criminal activity, purchasing fancy clothes and accessories with the proceeds of crime, shoot-outs, murder, and the loss of a parent.

The Court further held that commonly used words, phrases and cliches used in both the book and movie/album are not protectable. Also, Plaintiff's state common law claims were pre-empted by the Copyright Act.

Lastly, because the Court held that Defendants did not infringe on Plaintiff’s copyright, Plaintiff’s claims of vicarious and contributory infringement fail since they hinge on a preliminary finding of direct infringement.

Statutory Damages Awarded To EMI For Willful Infringement

EMI Entertainment v. Karen Records, Inc. et al, No. 1:05-cv-00390 (S.D.N.Y. filed Aug. 26, 2011) (Holwell, J.) [Doc. 110 Memorandum Opinion and Order].

The court found that defendants willfully infringed EMI's copyrights in the four musical compositions at issue and awarded EMI $25,000 for infringement of each composition (total $100,000) for which all defendants -- corporate and individual -- shall be jointly and severally liable.

The Court had previously granted EMI summary judgment on liability as to sales on or after January 14, 2002 of albums containing the four musical compositions. 603 F. Supp.2d 759 (SDNY 2009). Now, the Court analyzed EMI's statutory damages request and found that defendants infringement was willful based on defendants industry experience and copyright ownership, prior lawsuit regarding similar practices and a specific warning. The next step was determining the amount of damages ($25,000 per work) and then analyzing whether the individual defendants should be jointly and severally liable. They were because they had the right and ability to supervise the infringing activity and a direct financial interest in such activities.

Zappa v Rykodisc Decision

Gail Zappa v. Rykodisc, Inc., 08 Civ. 396 (WHP), NYLJ 1202512134305, at *1 (S.D.N.Y. decided August 17, 2011)

Summary Judgments In MP3Tunes Case

Capitol Records, Inc. v. MP3Tunes, LLC, 1:07-cv-09931-WHP (S.D.N.Y. filed 8/22/2011) [Doc. 267].

"This case turns in large part on whether MP3tunes is eligible for protection under the safe harbors created by the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. 512."

The Court addressed Plaintiff's argument that MP3tunes failed to reasonably implement a repeat infringer policy. The court distinguished between "blatant infringers" and users who merely consume the content and found "this applies to MP3tunes executives." There was no evidence that executives or employees had firsthand knowledge that websites linked on the sideload.com website were unauthorized. Additionally, MP3tunes did nor purposefully blind itself to its users' identities and activities, and had a procedure for responding to DMCA takedown notices.

The Court next addressed MP3tune's compliance with Plaintiff's take-down notices. The court found that MP3tunes was obligated to remove specifice works traceable to users' "lockers" and that MP3tunes interpreted the reach of Plaintiff's notices too narrowly. However, MP3tunes was not obligated to take down all of Plaintiff's cotnent because the notices provided a representative list. Plaintiff had to provide sufficient information --additional web addresses -- for MP3tunes to locate other infringing material. "Absent adequate notice, MP3tunes would need to conduct a burdensome investigation in order to determine whether songs in its users' accounts were unauthorized copies. As discussed, the DMCA does not place this burden on service providers."

The Court next addressed actual or "red flag" knowledge of infringement. The Court found that MP3tunes "undoubtedly...is aware that some level of infringement occurs. But there is no genuine dispute that MP3tunes did not have specific 'red flag' knowledge with respect to any particular link...other than the URLs noticed [in the DMCA takedowns]."

The Court next addressed defendant's benefit and control of infringing activity, finding "at worst, MP3tunes set up a fully automated system where users can choose to download infringing content."

In sum, MP3tunes could claim safe harbor protection for plaintiff's works stored on and linked to on the websites. However, MP3tunes did not qualify for safe harbor protection for songs identified in takedown notices which it failed to remove.

The Court then turned to whether MP3tunes is secondarily liable for storing material at the direction if its users. The court found that MP3tunes knowledge of the unauthorized use of infringing material "is manifest." "Accordingly, [Plaintiff's] motion for summary judgment on its claim for contributory infringement with respect to the songs listed in [Plaintiff's] takedown notices and which MP3tunes failed to removed from users' lockers is granted."

The Court next turned to direct infringment. Plaintiff motion with respect to songs downloaded by employees was denied because there was a dispute as to whether the songs were downloaded by employees in the course of their employment. On the other hand, an individual named defendant was directly liable for the songs personally "sideloaded" from unauthorized sites.

"Hey Micky!" Malpractice Action Survives Dismissal

Basilotta v. Warshavsky, 115524/09, NYLJ 1202511322101, at *1 (Sup.Ct., N.Y. Co., decided August 2, 2011)

The singer of the 1980's hit song that starts "Oh Micky you're so fine, you're so fine you blow my mind! Hey Mickey!" can proceed with her malpractice action against an attorney she claims failed to diligently protect her rights to the song. The Court found that the suit was not time barred.

Transfer To Florida Appropriate Where Only Connection To New York Is Internet Access

Caldwell v. Slip-N-Slide Records, Inc., 10 Civ. 9106 (JFK), NYLJ 1202510748971, at *1 (SDNY, Decided July 26, 2011).

The Court granted defendants' motion to transfer to federal court in Florida, pursuant to 28 USC 1401(a). "Plaintiff brings this suit in New York under the theory that the allegedly infringing song was distributed in New York over the Internet, including through YouTube and iTunes. As the only apparent connection to this forum is the distribution of "Bond Money" over the Internet, a fact which would support venue in any district court in this country, Plaintiff's choice of forum is entitled to little weight."

Plaintiff alleged that in 2001 he created the musical composition and sound recording of a song entitled "Dim Hits," which he later registered with the United States Copyright Office. In 2004, Plaintiff gave a copy of "Dim Hits" to a vocalist known as Trina, who has a recording contract with the Defendants. In 2008, Plaintiff discovered that the Defendants had allegedly copied "Dim Hits," without his permission, and incorporated it into a song titled "Bond Money." Plaintiff also alleges that the Defendants have distributed "Bond Money" on several albums, web sites, and other outlets throughout the United States.

None of the parties demonstrated ties to New York. Plaintiff was a resident of Charlotte, North Carolina. Defendant corporation was a Florida corporation that "promotes, develops, markets and manages recording artists," with its principal place of business and sole office in Miami Beach, Florida. The song "Bond Money" was purportedly written and recorded in Florida. Individual defendants were a Florida and Georgia resident. Another corporate defendant was a Phoenix, Arizona limited liability company.

Black Keys' Sue Over Commercial

Dan Auerbach; Patrick Carney dba McMoore McLessT Publishing v. Della Femina/Rothschild/Jeary Partners; Della Femina & Gianettino Inc.; Valley National Bancorp; Valley National Bank, Index No. 1:11 CV 4902 (S.D.N.Y. filed 7/15/2011).

The Black Keys (in the author's opinion, the pride of Akron, Ohio!) bring a copyright infringement action for defendants' unauthorized use of their song "Tighten Up" in a television commercial. Plaintiffs allege defendants incorporated significant portions of the copyrighted recording without first obtaining plaintiffs' consent or a license.

Attorney's Fees Denied In Copyright Case

Canal+ Image UK Ltd. v. Lutvak, 10 Civ. 1536 (RJH), NYLJ 1202498072915, at *1 (SDNY, Decided June 8, 2011).

The Court had previously dismissed the action for copyright infringement and breach of contract. Defendants, a lyricist and a songwriter, moved pursuant to Federal Rule of Civil Procedure 54(d)(2) for an award of attorney's fees under the Copyright Act, 17 U.S.C. §505. The Court denied the motion.

Artist Has Label's Claims Dismissed; Judgment On Counterclaims

Alistair Records, Inc., v. Adams, 603695/09, NYLJ 1202497369670, at *1 (Sup., NY, Decided May 20, 2011).

Defendant recording artist's motion for an order amending the caption to reflect the correct name of plaintiff record label, "Alistair Records, LLC" is granted. Defendant artist's motion for entry of a default judgment on his breach of contract counterclaim against plaintiff label is granted ($6,000). Artist's motion for entry of a default judgment on his counterclaim for rescission is denied and that counterclaim is severed and dismissed. Artist's remaining counterclaims continue.

Artist's motion for summary judgment dismissing the complaint (seeking injunction and $750,000) is granted. Record label failed to submit any evidentiary facts to controvert the claims in artist's motion.

Manager's Suit Against Band Not Stayed By Parallel State Proceeding

Tramposch v. Winter, 10 Civ. 8286 (TPG), NYLJ 1202496374985, at *1 (SDNY, Decided May 25, 2011).

Plaintiff brought an action for breach of contract, unjust enrichment, etc. Plaintiff was the manager of the band "Red Jumpsuit Apparatus" until the band terminated the relationship in January 2010. According to plaintiff, prior to his termination, he and the band had a series of disputes regarding payment of commissions and repayment of loans made by plaintiff to the band. Defendants, members of the band, moved to stay the action pending resolution of a parallel proceeding brought by defendants against plaintiff in California. The Court denied the motion.

Plaintiff was not served with the complaint in the California state proceeding until AFTER he had commenced the Federal proceeding in New York (diversity jurisdiction). The Court found that there was no basis to abstain from hearing the federal case.

Bay City Rollers' Royalty Suit Not Time-Barred

Faulkner v. Arista Records LLC, 07 Civ. 2318 (LAP), NYLJ 1202495926616, at *1 (SDNY, Decided May 23, 2011).

Plaintiffs, all former members of 1970s-era musical group the Bay City Rollers, brought this action alleging that they were owed tens of millions of dollars in unpaid royalties from their record company, Defendant Arista Records, LLC ("Arista"). Plaintiffs claim these royalties pursuant to a 1981 agreement; accordingly, Arista argues that even if it owes Plaintiffs accrued royalties from the time period prior to 2001, the statute of limitations bars Plaintiffs' claim. Plaintiffs counter that Arista acknowledged its debt in a writing, thereby satisfying Section 17-101 of New York's General Obligations Law, which restarts the statute of limitations to revive the debt.

Section 17-101 of New York's General Obligations Law ("Section 17-101") codifies and restricts the common-law rule that an acknowledgement of a debt is sufficient to refresh the obligation, thereby restarting the running of the statute of limitations. To restart the running of the statute of limitations under Section 17-101, an acknowledgment or promise must be in writing, be signed by the debtor party, recognize an existing debt and contain nothing inconsistent with an intention on the part of the debtor to pay it.

Plaintiffs and Arista have each moved for partial summary judgment on Arista's affirmative defense that the statute of limitations bars Plaintiffs' claim. The Court granted Plaintiffs' motion for partial summary judgment, and denied Defendant's motion for partial summary judgment.

LimeWire Settlement

http://www.digitalmusicnews.com/stories/051211limewire

"Limewire and the four major labels have now reached an out-of-court settlement for $105 million, according to information confirmed by the RIAA"

Copyright Case Dismissed As Time Barred

Brand v. RMM, Universal Music Group, NYLJ 1202491912221, at *1 (SDNY, Decided April 18, 2011).

Plaintiff sued alleging that defendants infringed the copyright to his rap vocals by adding them to a song by recording artist Tito Nieves. The Court granted defendant's motion for summary judgment -- the claim was time-barred.

Plaintiff alleged that defendant infringed his copyright when it "used, sold and manufactured without his permission his rap vocals." Although styled as an infringement claim, the gravamen of Plaintiff's complaint is that he is the owner of the rap lyrics on Nieves' song.

The Court cited cases that a claim involving a dispute over copyright ownership accrues when a plaintiff knows or has reason to know of the injury upon which the claim is premised. A defendant's express assertion of adverse ownership or a plain and express repudiation of plaintiff's ownership such as registering the copyright in defendant's own name, distributing the work with copyright notice identifying defendant as the owner, or exploiting the work for years without paying royalties to plaintiff will trigger the accrual of the statute of limitations. If a plaintiff does not sue within three years from the date his copyright claim accrues, his complaint is time-barred. 17 U.S.C. §507(b).

In this case, the song was first released in 1991. The back of the CD cover listed defendant as the copyright owner. The song was released again in 1997 on another CD, which also listed defendant as the copyright owner on the back cover. Plaintiff never received royalties from either CD. The Court held that given this history, Plaintiff reasonably should have know of the injury upon which his claim was premised by 1991 or at the latest by 1997, thirteen years before he filed the complaint. Because Plaintiff's ownership claim was time-barred, his infringement claim also failed as a matter of law.

Plaintiff Cannot Swap Election Of Statutory Damages

Arista Records LLC v. Lime Group LLC, NYLJ 1202490027721, at *1 (SDNY, Decided April 11, 2011)

The Court finds that Defendants would be unduly prejudiced if Plaintiffs were permitted to amend their election of remedies under the Copyright Act, just one month before trial. Accordingly, Plaintiffs may not seek to recover actual damages for those sound recordings with respect to which they have already elected to recover statutory damages.

"Work" Defined For Statutory Damages Against Limewire

Arista Records LLC v. Lime Group LLC, 06 CV 5936 (KMW), NYLJ 1202489939713, at *1 (SDNY, Decided April 4, 2011)

The Court had granted summary judgment in favor of Plaintiffs on their claims against Defendants LimeWire LLC ("LW"), Lime Group LLC ("Lime Group"), and Mark Gorton (collectively, "Defendants") for secondary copyright infringement. The Court found that Defendants had induced multiple users of the LimeWire online file-sharing program ("LimeWire") to infringe Plaintiffs' copyrights. The litigation is now in the damage phase, with a trial on damages scheduled. Plaintiffs identified approximately 11,205 sound recordings that had allegedly been infringed through the LimeWire system. Of those, approximately 9,715 are sound recordings as to which Plaintiffs have elected to seek statutory damages under Section 504(c)(1) of the Copyright Act.

On March 10, 2011, the Court held that Plaintiffs are entitled to a single statutory damage award from Defendants for each "work" that was infringed by a direct infringer on the LimeWire system. The parties now seek a resolution of a threshold legal dispute regarding what constitutes a "work" as to which Plaintiffs can recover a statutory damage award.

The Court holds that both an album, and a sound recording that Plaintiffs issued as an individual track may constitute a "work" infringed. Accordingly, Plaintiffs are entitled to a statutory damage award for each sound recording that was infringed on the LimeWire system during the time period that Plaintiffs made that sound recording available as an individual track. However, for those sound recordings that Plaintiffs issued only as part of an album, Plaintiffs can recover only one statutory damage award for that album, not for each individual sound recording.

Claims Dismissed In Aretha Contract Suit

BLD Productions, LLC v. Viacom, Inc., NYLJ 1202489492977, at *1 (SDNY, Decided March 31, 2011) (Gardephe, J.)

Summary: Plaintiff and defendant Viacom's affiliate negotiated a March 8, 2001, agreement for a benefit concert by Aretha Franklin. On April 10, 2001, Franklin granted plaintiff her rights to video and audio recordings of the concert. Despite the agreement's March 8, 2001, date and the concert's April performance, plaintiff claimed that the agreement was not finalized until 2006. Plaintiff alleged breaches of oral and written contract, and the implied duty of good faith and fair dealing, contending that Viacom and its affiliate failed to engage a distributor to make, market and distribute recordings of the concert, their failure to account for sales and revenues and to pay royalties to plaintiff.

Judge Gardephe dismissed the case against Viacom because it was not a party to the agreements, and plaintiff did not plead sufficient facts to pierce the corporate veil. Judge Gardephe also dismissed claims against Viacom's affiliate to the extent that plaintiff's breach of written contract claim were based on the affiliate's failure to provide master recordings to plaintiff. Plaintiff's claim that the agreement required the affiliate to secure a distributor was deemed time-barred by the New York statute of limitations. Judge Gardephe alsor dismissed plaintiff's claim for breach of an oral contract.

Copyright Royalty Board Final Rule

37 CFR Part 380: Digital Performance Right in Sound Recordings and Ephemeral Recordings;

Final Rule. The Copyright Royalty Judges announced their final determination of the rates and terms for two statutory licenses, permitting certain digital performances of sound recordings and the making of ephemeral recordings, for the period beginning January 1, 2011, and ending on December 31, 2015. (Effective Date March 9, 2011).

For example, a Commercial Webcaster will pay a royalty of: $0.0019 per performance for 2011; $0.0021 per performance for 2012; $0.0021 per performance for 2013; $0.0023 per performance for 2014; and $0.0023 per performance for 2015. Depending on the number of "tuning hours," a Noncommercial Webcaster will pay an annual per channel or per station performance royalty of $500 in 2011, 2012, 2013, 2014, and 2015; or, $0.0019 per performance for 2011; $0.0021 per performance for 2012; $0.0021 per performance for 2013; $0.0023 per performance for 2014; and $0.0023 per performance for 2015. (Section 380.3).

Who Owns A Grammy?

National Academy of Recording Arts & Sciences Inc. v. Gotta Have It! Collectibles Inc. dba Gotta Have and Roll.com, No. 11-103366 (Sup. Ct. NY. Co. filed 3/18/11) -- summons with notice for conversion of the Grammy Award Statuette awarded to Stevie Wonder for Songwriter of the Year (1973).

LimeWire Damages in Trillions "Absurd"

Arista Records LLC v. Lime Group LLC, 06 CV 5936, NYLJ 1202486126807 (S.D.N.Y. Mar. 10, 2011)

The Court already had granted summary judgment in favor of Plaintiffs on their claims against Defendants LimeWire LLC ("LW"), Lime Group LLC ("Lime Group"), and Mark Gorton (collectively, "Defendants") for secondary copyright infringement. The Court found that Defendants had induced Multiple users of the Lime Wire online file-sharing program ("Lime Wire") to infringe Plaintiffs' copyrights. The litigation is in the damage phase.

Plaintiffs identified approximately 11,000 sound recordings that they allege were infringed through the Lime Wire system. For the over 9,500 post-1972 sound recordings, Plaintiffs elected to seek statutory damages under Section 504(c)(1) of the Copyright Act.

"Squarely before the Court is a threshold dispute regarding Plaintiffs entitlement to statutory damage awards against Defendants: Where, as here, Defendants have been found liable for inducing numerous individual Lime Wire users infringe Plaintiffs' copyrights, may Plaintiffs recover from Defendants a separate statutory award for each individual's infringement of a work as to which Defendants are jointly and severally liable? Or, rather, are Plaintiffs limited to one statutory damage award per work from Defendants, regardless of the number of direct infringers of that work with whom Defendants are jointly and severally liable?"

The Court held that Plaintiffs were entitled to a single statutory damage award from Defendants per work infringed.

If one multiplies the maximum statutory damage award ($150,000) by approximately 10,000 post-1972 works, Defendants faced a potential award of a billion dollars in statutory damages alone. If Plaintiff's were able to pursue a statutory damage theory predicated on the number of direct infringers per work, Defendants' damages could reach into the trillions. As Defendants noted, Plaintiffs were suggesting an award that is "more money than the entire music recording industry has made since Edison's invention of the phonograph in 1877." This result is absurd, the Court found.

In sum, the Court found that the most plausible interpretation of Section 504(c) is one that authorizes only a single statutory damage award per work against a secondarily liable defendant, particularly in the context of the mass infringement found in the context of online peer-to-peer file sharing. Accordingly, the Court held that Plaintiffs were entitled to a single statutory damage award from Defendants per work infringed, regardless of how many individual users directly infringed that particular work.

Trademark Plaintiff Denied Infringement Damages

Rodgers v. Wright, 04 Civ. 01149 (RJH), NYLJ 1202484847172, at *1 (SDNY, Decided March 1, 2011)

Judge Holwell holds (1) plaintiff is not granted damages; (2) plaintiff is not granted attorneys' fees; and (3) the permanent injunction need not be modified.

Plaintiff Nile Rodgers, a founder of the music group Chic, brought the trademark infringement action against two singers who once performed as part of Chic, defendants Norma Jean Wright and Luci Martin. Rogers is the owner of a registered trademark in "Chic," and, along with his late partner Bernard Edwards, has exploited the mark in commerce continuously since 1977. Wright and Martin claimed no ownership of the mark, but had performed in the United States and abroad as "Ladies of Chic" and "Original First Ladies of Chic," and sometimes simply as "Chic." The Court previously found (1) that plaintiff's mark was protectable; (2) that defendants' uses of "Chic," "Ladies of Chic," and "Original First Ladies of Chic," were likely to cause confusion; (3) that defendants could not establish a fair use defense; and (4) that any relevant injunction should have extraterritorial effect. Thereafter, the Court permanently enjoined defendants and each of their agents, servants, employees, attorneys, and persons in active concert or participation with them from using or commercially exploiting the word "Chic" anywhere in the world, generally and specifically in connection with concert promotion, publicity, and performance; and also established other restrictions.

Plaintiff sought defendants' profits under Section 35 of the Lanham Act. The Court concluded that plaintiff had failed to establish that defendants acted with willful deception, and therefore that plaintiff was not entitled to an award of profits. "Having not presented any evidence of willfulness, and as it appears that defendants' actions were not willful, awarding damages in this case would be inappropriate."

Plaintiff also sought attorneys' fees. The Court denied the motion because plaintiff failed to show oppressive litigation tactics or bad faith.

Right Of Publicity In Washington State Hendrix Case

Experience Hendrix, LLC v. Hendrixlicensing.com, Ltd., No C09-285Z (W.D. Wash. Feb. 8, 2011). Decision here.

Washington State enacted a law that rights of publicity do not expire upon the death of the individual. Defendants distribute merchandise bearing Jimi Hendrix's likeness, accompanied with his name. If applied in the litigaiton, the statue would deem all rights to the use of Jimi Hendrix's name, voice, signature, photograph, or likeness in plaintiff (as assignee of Hendrix's intestate heir). Such result would preclude defendants, absent plaintiff's consent, from commercially distributing images of Jimi Hendrix, at least in the State of Washington.

Although plaintiff sought to avoid the "constitutional thicket" concerning the Washington statute by not pleading a cause of action thereunder, the Court held that plaintiff's allegations implicate the right of publicity. Thus, plaintiff could not avoid "the fundamental issue in this case, namely whether [the statue] " had the effect of vesting in [plaintiff] any right of publicity relating to JImi Hendrix such that [plaintiff] may preclude defendants from trading in images of, or art created by, Jimi Hendrix."

In analyzing the constitutionality of the statute, the Court noted that the statute purports to govern whether a right of publicity exists, whether it continues post-mortem, and how it may be transferred during life and after death, regardless of where the particular individual or personality is or was domiciled. The Court held that the statute violated the Due Process and Full Faith and Credit clauses of the Constitution and consequently, under New York law, plaintiff had no publicity rights. The court stressed that the statute purports to govern advertising and fundraising activities everywhere. Also, under the Due Process Clause, to apply its own law, Washington must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair. The Court held that applying Washington law to the issue of descendbility was arbitrary and unfair because the domicile at death has substantial relevant contacts.

The court also found that application of the Washington statute would cause forum shopping by having plaintiffs divert sales to Washington, and would require users of the rights (potential defendants) to attempt to restrict commercial activity to avoid application of the statute. Applying the domicile-at-death rule would avoid these problems and provide certainty.

Spanish Language Adapter Loses Suit Against Coke

Vergara Hermosilla v. Coca-Cola Co., No. 10-21418 (S.D. Fla. Feb. 23, 2011). Decision here.

Plaintiff was hired by Coca Cola to adapt a song into Spanish. Plaintiff requested an "adapter's share." During a telephone call with defendant, Plaintiff agreed to relinquish any copyright interest in the work. In an email later that day, Plaintiff wrote "For the adaptation, you may consider it a work for hire with no economic compensation to that respect. I believe what's legal is a dollar."

The Court granted Defendant's motion for summary judgment. Relying on section 204 of the Copyright Act, the Court held that Plaintiff's copyright interest -- the adapted lyrics -- was conveyed by a signed writing (the email). An irrevocable agreement was reached, so that later communications between the parties concerning a written contract that differed from the parties' agreement did not alter the parties' actual agreement. "Therefore, because Coca Cola cannot be sued based on a copyright interest it owns, Coca Cola is entitled to summary judgment on all counts."

Article: Investors Drawn to Digital Music

Article from the New York Times:

BUSINESS DAY

Investors Are Drawn Anew to Digital Music

By BEN SISARIO

Published: February 28, 2011

The explosion in smartphone apps has given investors and entrepreneurs optimism that the digital music business is poised to finally become profitable

Plaintiff's Award Reduced In Wu-Tang Suit

Coles v Wu-Tang Prods., Inc., 2011 NY Slip Op 00789 (1st Dep't Feb. 10, 2011)

The appellate division modified the trial' court's award to plaintiff by 25% of the net royalty payments received by defendant Wu-Tang Productions.

The action was for the payment of royalties for musical compositions co-written by plaintiff. The Court found that the documentary evidence established that Wu-Tang was entitled to retain 25% of the net royalty payments it received from Careers-BMG Music Publishing, Inc. (BMG) before paying plaintiff his share. Pursuant to the agreement between plaintiff and Wu-Tang, plaintiff conveyed an undivided 50% percent interest in the copyrights in those compositions to Wu-Tang, and, with plaintiff's consent, Wu-Tang transferred 50% percent of its interest in the copyrights to BMG. Thus, Wu-Tang retained a 25% interest in the copyrights.

Additionally, the record supported the trial court's determination that plaintiff, as a lyricist of the compositions, and defendant producer of the music, regarded themselves as joint authors sharing equally in the ownership of a joint work. Thus, the court properly granted plaintiff leave to conform the complaint to the evidence presented at trial by adding a claim against the producer for his unauthorized receipt of a 50% producer's fee

Copyright Case Over Lil' Wayne Movie Dismissed

Crump v. QD3 Entertainment, Inc., 2011 WL 446296 (S.D.N.Y. Feb. 8, 2011) (Jones, J.).

The lawsuit stems from the use of three copyrighted musical compositions in a documentary film entitled The Carter. The film focused on the life of Dwayne Carter, a hip hop and urban musical artist who is known by his stage name “Lil' Wayne.”

Defendants moved for summary judgment. As a procedural matter, the court focused on Plaintiff's failure: to oppose the filing of a motion for summary judgment pre-discovery, to file a Rule 56(f) affidavit, and to describe any potentially discoverable facts that make a motion for summary judgment premature.

In its legal analysis, the Court found that "the only issue is whether the agreement with another Young Money entity (Young Money Entertainment, Inc.) was sufficient to grant a nonexclusive license in the Defendants." The Court determined that the language of the subject agreement and uncontested facts clearly established that Defendants received a non-exclusive license to use any performance by Dwayne Carter of his copyrighted musical compositions, including “Pussy Monster,” “La La,” and “Lollipop.” In sum, Defendants met their burden of establishing that they received a grant of a nonexclusive license from Dwayne Carter and Young Money Publishing to use the three musical compositions at issue here in The Carter. The undisputed facts presented by both parties demonstrated that the clear intent of the parties was to grant the nonexclusive license. Summary judgment granted to Defendants.

Summary Judgment Motions Denied In Alleged Hip Hop Infringement

Lessem v. Taylor et al., No. 07 Civ 10601(LLS), 2011 WL 344104 (S.D.N.Y. Feb. 3, 2011).

Plaintiffs moved for summary judgment that defendants' song "How We Do" infringes their copyrighted song "Elevator". (Defendants' song appears on the album "The Documentary" by hip-hop artist The Game.)

The Court analyzed defendants' access to the Plaintiff's work (specifically, through a third-party intermediary), the probative similarity of the two works (based on expert reports), the alleged improper appropriation, and whether or not defendants independently created their song. The Court determined that factual issues precluded summary judgment.

Music Photos Suit

Lawrence Martin Temme v. Sony Music Entertainment, Index No. 11-650342 (Sup. Ct., N.Y. Co. filed 2/8/2011).

Complaint for negligence and conversion. Plaintiff, a freelance music photographer, alleges that over the course of his 20 years in the music industry, he has photographed some of the biggest names in popular music. Plaintiff alleges that the defendant has lost or converted thousands of valuable photographic images belonging to the Plaintiff. Plaintiff seeks $500,000 in damages based on the defendant's alleged breach of bailment, its negligence, and its conversion of the plaintiff's property.

Ramones Royalties Suit

Christopher J Ward v. Ramones Production Inc. et al, Index 650291/2011 (Sup. Ct., NY Co. filed Feb. 2, 2011). Complaint for breach of contract. Plaintiff (known as "CJ Ramone") is a former member of the rock band The Ramones. Plaintiff seeks to recover royalty payments for musical compositions created by the Ramones. $600,000.

Napster Loses Indemnification Suit Against Label Over Mechanical Licenses

Napster LLC v Rounder Records Corp., No. 09-cv-00318 (S.D.N.Y. decided Jan. 25, 2011).

The dispute is over whether Rounder, a record label, is contractually obligated to indemnify Napster for costs incurred due to copyright infringement lawsuits brought by the owners of musical compositions embodied in the sound recordings provided by Rounder. Napster contends that under two contracts, Rounder was required to procure mechanical licenses for use of the infringed musical compositions.

The court dismissed Napster’s claim based on the first contract because the contract was rescinded by the second contract, thereby extinguishing any claim Napster might have had for its breach. The court dismissed Napster’s claim based on the second contract (i) for Napster's failure to comply with its advance consent provision concerning indemnification; and (ii) it was not Rounder’s responsibility to procure mechanical licenses for the infringing compositions under the contract.

Motion to dismiss granted.