Capitol Records, Inc. v. MP3Tunes, No. 07-cv-9931 (S.D.N.Y. filed Sep. 29, 2014) [Doc. 629].
Defendant moved for judgment as a matter of law, or alternatively a new trial, and for remittur following a $48,061,073 jury verdict in favor of plaintiffs, who consisted of record labels and publishers who had filed copyright and unfair competition claims alleging that defendant and MP3Tunes made infringing copies of copyright songs and cover art. The motion was denied in part, and granted in part. Specifically, defendant's motion for judgment as a matter of law was granted as to plaintiffs' claims of (1) public display rights in cover art, and (2) copyright infringement under "red flag" knowledge and willful blindness theories (except for certain works sideloaded and which the source domain's URL was obviously infringing and viewed by a company executive). Further, defendant's motion for a new trial on punitive damages was granted unless plaintiffs elected to remit the jury's punitive damage award to $750,000.
October 11, 2014
Grooveshark And Its Officers Liable For Copyright Infringment Based On Direct Uploads By Officers And Employees
UMG Recording, Inc. v. Escape Media Group, Inc. No. 1:11-cv-08407-TPG (S.D.N.Y. filed Sep. 29, 2014) [Doc. 100].
This case involved "Grooveshark" and the direct upload of plaintiffs' copyright music by defendant's officers and employees. The Court granted plaintifss' motion for spoliation sanctions, and granted plaintiffs' summary judgment on nearly all of their claims. As to spoliation sanctions, the Court found that defendants acted with a culpable state of mind when they deleted user upload information and relevant source code. Based on the spoliation, the Court found that an individual defendant directly infringed plaintiffs' copyright recordings; however, the Court did not agree with plaintiffs' request that it find 10,000 instances of infringement and instead found that plaintiffs were entitled to judgment as a matter of law that that defendant illegally uploaded a small percentage (144) of the recordings. Similarly, the Court found that the other employees uploaded a much smaller percentage of additional files than requested by plaintiffs.
Turning to the summary judgment motion, the court first found that a certain expert report was admissible. The Court then addressed defendants' affirmative defenses, and held that the claims were not barred by the statute of limitations, and that defendants' could not set forth a claim for equitable estoppel (or laches or waiver). On plaintiffs' copyright claims, the Court found that plaintiffs established that defendants illegally uploaded 5,977 sound recordings (plaintiffs had requested a much higher number). Accordingly, defendants were directly liable for infringement of plaintiffs' distribution, reproduction and public performance rights. Further, Escape was liable for vicarious and inducement infringement because it had the ability to control its employee's infringing activity and instructed its employees to upload as many files as possible to Grooveshark as a condition of their employment. Escape also materially contributed to the infringing employee uploads, and the Court granted plaintiffs summary judgment on their claim for contributory infringement. The corporate officers were also liable., jointly and severally with the company.
This case involved "Grooveshark" and the direct upload of plaintiffs' copyright music by defendant's officers and employees. The Court granted plaintifss' motion for spoliation sanctions, and granted plaintiffs' summary judgment on nearly all of their claims. As to spoliation sanctions, the Court found that defendants acted with a culpable state of mind when they deleted user upload information and relevant source code. Based on the spoliation, the Court found that an individual defendant directly infringed plaintiffs' copyright recordings; however, the Court did not agree with plaintiffs' request that it find 10,000 instances of infringement and instead found that plaintiffs were entitled to judgment as a matter of law that that defendant illegally uploaded a small percentage (144) of the recordings. Similarly, the Court found that the other employees uploaded a much smaller percentage of additional files than requested by plaintiffs.
Turning to the summary judgment motion, the court first found that a certain expert report was admissible. The Court then addressed defendants' affirmative defenses, and held that the claims were not barred by the statute of limitations, and that defendants' could not set forth a claim for equitable estoppel (or laches or waiver). On plaintiffs' copyright claims, the Court found that plaintiffs established that defendants illegally uploaded 5,977 sound recordings (plaintiffs had requested a much higher number). Accordingly, defendants were directly liable for infringement of plaintiffs' distribution, reproduction and public performance rights. Further, Escape was liable for vicarious and inducement infringement because it had the ability to control its employee's infringing activity and instructed its employees to upload as many files as possible to Grooveshark as a condition of their employment. Escape also materially contributed to the infringing employee uploads, and the Court granted plaintiffs summary judgment on their claim for contributory infringement. The corporate officers were also liable., jointly and severally with the company.
Apple Succeeds In Having Certain Audio Distribution Patents Deemed Unpatentable As Obvious
Apple Inc. v. Sightsound Technologies, LLC, Related Case Nos. CMB2013-00023 and CMB2013-00020 (PTAB Oct. 7, 2014) [Papers 101 and 105, respectively].
Apple succeeded in having the PTAB hold that certain claims in patents relating to a "system and associated method for the electronic sales and distribution of digital audio or video signals" are unpatentable. The PTAB concluded that certain claims would have been obvious based on existing publications by non-parties, pursuant to 35 USC 103(a). However, Apple did not succeed in establishing that the claims were anticipated under 35 USC 102(a).
Apple succeeded in having the PTAB hold that certain claims in patents relating to a "system and associated method for the electronic sales and distribution of digital audio or video signals" are unpatentable. The PTAB concluded that certain claims would have been obvious based on existing publications by non-parties, pursuant to 35 USC 103(a). However, Apple did not succeed in establishing that the claims were anticipated under 35 USC 102(a).
Beatles Rights Holders Did Not Interfere With Film's Release By Asserting Copyright Claims
Ace Arts, LLC v. Sony/ATV Music Publishing, No. 13-cv-7307-AJN (S.D.N.Y. filed Sep. 26, 2014).
This action arises from the use of eight Beatles songs in a documentary film, "The Lost Concert." Plaintiff alleges that defendants (publisher and record label) interfered with the US distribution of the film by asserting copyright claims regarding those songs. According to the allegations in the complaint and certain judicially noticeable documents (e.g., copyright registrations), the Beatles first performance in the US took place in 1964, twelve songs were played, and defendant had copyright registrations for 8 of the songs. The concert was preserved on a certain video tape. In 2009, a production company acquired the video tape and produced The Lost Concert film, which consists of the concert footage and other sequences and interviews. Plaintiff was granted distribution rights by the producers. In 2009, the producers approached Sony ATV for a synch license. Plaintiff's allege that at Apple's request, Sony refused to grant the producers a synch license, and instead Sony granted Apple an exclusive synch license for Apple's distribution of certain Beatles material on iTunes. Nonetheless, the producers and distributor believed that there was no legal obstacle to distributing the film and arranged for a premier and distribution in the USA and UK. Sony ATV sought an injunction against the producers in the UK alleging that the film would infringe Sony's copyrights. The US premier was then cancelled after Sony ATV made a claim to the distributor's partner. Eventually, the plaintiff commenced the action seeking a declaration, inter alia, that neither Sony ATV nor Apple has rights that would be infringed by exploitation of the film in the USA, and that Sony ATV "misused its copyrights."
First the Court denied the defendants' request to stay the US federal action pending resolution of the UK action. The Court found no exceptional circumstances to justify abstention.
Second, the Court found that the controversy was ripe for a declaratory judgment claim.
Third, the Court analyzed plaintiff's anti-trust claim under Section 1 of the Sherman Act. The Court found that, as alleged, the agreements between Sony ATV and Apple -- in particular their efforts to enforce Apple's exclusive synch license by preventing the US distribution of the film -- did not constitute horizontal restraints on trade that are a per se violation of the Sherman Act. Nor was there an anti-trust violation under the "rule of reason" because the allegations concerned a routine dispute between business competitors that is not cognizable under the Sherman Act.
Fourth, the Court considered the tortious interference with contract and economic relations claims, which was based on the allegation that Sony ATV and Applied conspired to interfere with the distribution contract by stating that the film infringed on Sony ATV's copyrights. The Court found that plaintiff failed to adequately plead breach of the contract because it was possible that the distribution contract was lawfully terminated. The complaint did not identify which section of the contract was breached, "a particularly damaging omission in light of the provisions in the contract suggesting that [the distribution partner] had the right to suspend working on, distributing or exhibiting all or any portion of the film for which the partner received a demand or claim. Further, plaintiff failed to allege the use of "wrongful means." Sony ATV steadfastly maintained that it owns the rights to the song, and it did not assert copyright claims in bad faith. The bare legal conclusions of malice were insufficient.
Fifth, the Court considered plaintiff's unfair competition claim under New York common law. The Court rejected an extension of the common law claim (which has two theories: for palming off and misappropriation) to include "commercial immorality."
Finally, the Court considered Plaintiff's claim under NY GBL sec. 349. The Court found that defendants' alleged conduct was not consumer-oriented. It was not a standard-issue consumer oriented transaction that section 349 was designed to protect.
This action arises from the use of eight Beatles songs in a documentary film, "The Lost Concert." Plaintiff alleges that defendants (publisher and record label) interfered with the US distribution of the film by asserting copyright claims regarding those songs. According to the allegations in the complaint and certain judicially noticeable documents (e.g., copyright registrations), the Beatles first performance in the US took place in 1964, twelve songs were played, and defendant had copyright registrations for 8 of the songs. The concert was preserved on a certain video tape. In 2009, a production company acquired the video tape and produced The Lost Concert film, which consists of the concert footage and other sequences and interviews. Plaintiff was granted distribution rights by the producers. In 2009, the producers approached Sony ATV for a synch license. Plaintiff's allege that at Apple's request, Sony refused to grant the producers a synch license, and instead Sony granted Apple an exclusive synch license for Apple's distribution of certain Beatles material on iTunes. Nonetheless, the producers and distributor believed that there was no legal obstacle to distributing the film and arranged for a premier and distribution in the USA and UK. Sony ATV sought an injunction against the producers in the UK alleging that the film would infringe Sony's copyrights. The US premier was then cancelled after Sony ATV made a claim to the distributor's partner. Eventually, the plaintiff commenced the action seeking a declaration, inter alia, that neither Sony ATV nor Apple has rights that would be infringed by exploitation of the film in the USA, and that Sony ATV "misused its copyrights."
First the Court denied the defendants' request to stay the US federal action pending resolution of the UK action. The Court found no exceptional circumstances to justify abstention.
Second, the Court found that the controversy was ripe for a declaratory judgment claim.
Third, the Court analyzed plaintiff's anti-trust claim under Section 1 of the Sherman Act. The Court found that, as alleged, the agreements between Sony ATV and Apple -- in particular their efforts to enforce Apple's exclusive synch license by preventing the US distribution of the film -- did not constitute horizontal restraints on trade that are a per se violation of the Sherman Act. Nor was there an anti-trust violation under the "rule of reason" because the allegations concerned a routine dispute between business competitors that is not cognizable under the Sherman Act.
Fourth, the Court considered the tortious interference with contract and economic relations claims, which was based on the allegation that Sony ATV and Applied conspired to interfere with the distribution contract by stating that the film infringed on Sony ATV's copyrights. The Court found that plaintiff failed to adequately plead breach of the contract because it was possible that the distribution contract was lawfully terminated. The complaint did not identify which section of the contract was breached, "a particularly damaging omission in light of the provisions in the contract suggesting that [the distribution partner] had the right to suspend working on, distributing or exhibiting all or any portion of the film for which the partner received a demand or claim. Further, plaintiff failed to allege the use of "wrongful means." Sony ATV steadfastly maintained that it owns the rights to the song, and it did not assert copyright claims in bad faith. The bare legal conclusions of malice were insufficient.
Fifth, the Court considered plaintiff's unfair competition claim under New York common law. The Court rejected an extension of the common law claim (which has two theories: for palming off and misappropriation) to include "commercial immorality."
Finally, the Court considered Plaintiff's claim under NY GBL sec. 349. The Court found that defendants' alleged conduct was not consumer-oriented. It was not a standard-issue consumer oriented transaction that section 349 was designed to protect.
Toto Loses Breach Of Contract Claim Against Label For Digital Download Royalties
Toto, Inc. v. Sony Music Entertainment, No. 1:12-cv-01434-RJS (S.D.N.Y. filed Oct. 8, 2014) [Doc. 117].
In this breach of contract action concerning royalties for digital downloads (and master and ringtones) payable by the record label to the 80's band "Toto", the Court granted the record label summary judgment finding that the proper royalty rate had been paid. The Court applied New York law to interpret the relevant recording agreements, and found that one provision (the "Audiophile Provision" in 1986 and 2002 amendments) supplied the applicable royalty rate for the sale of downloads through digital retailers, regardless of whether the downloads were sold by the record company or unaffiliated third-party licensees. The dispute turned on the meaning of the terms "Licensee" and "lease", which had different royalty rates. Toto argued the term "lease" referred to a license to any party, regardless of whether that party is affiliated with the record company; the record company argued that the term "lease" referred to a special license whereby a third party incorporates the recordings into its own product, such as a compilation record. The Court found that the inclusion of the record company's affiliates in the contractual definition of "licensee" did not limit the scope of that term; the definition included the term "without limitation". Accordingly, digital retailers were licensees, and industry custom defined the term "lease" as a limited license to a third party to incorporate recording into their own unique product. However, the Court found that the record company did not have a declaratory judgment claim because the dispute was "far more hypothetical than real." The declaratory judgment dispute arose from Toto's threat to sue the label for breach of the implied covenant of good faith and fair dealing if the label ceased distributing Toto's records through certain retailers.
In this breach of contract action concerning royalties for digital downloads (and master and ringtones) payable by the record label to the 80's band "Toto", the Court granted the record label summary judgment finding that the proper royalty rate had been paid. The Court applied New York law to interpret the relevant recording agreements, and found that one provision (the "Audiophile Provision" in 1986 and 2002 amendments) supplied the applicable royalty rate for the sale of downloads through digital retailers, regardless of whether the downloads were sold by the record company or unaffiliated third-party licensees. The dispute turned on the meaning of the terms "Licensee" and "lease", which had different royalty rates. Toto argued the term "lease" referred to a license to any party, regardless of whether that party is affiliated with the record company; the record company argued that the term "lease" referred to a special license whereby a third party incorporates the recordings into its own product, such as a compilation record. The Court found that the inclusion of the record company's affiliates in the contractual definition of "licensee" did not limit the scope of that term; the definition included the term "without limitation". Accordingly, digital retailers were licensees, and industry custom defined the term "lease" as a limited license to a third party to incorporate recording into their own unique product. However, the Court found that the record company did not have a declaratory judgment claim because the dispute was "far more hypothetical than real." The declaratory judgment dispute arose from Toto's threat to sue the label for breach of the implied covenant of good faith and fair dealing if the label ceased distributing Toto's records through certain retailers.
Subscribe to:
Posts (Atom)
Posts
