Beastie Boys v. Monster Energy, 1:12-cv-06065-PAE (SDNY filed 12/04/14) [Doc. 181].
After a jury awarded plaintiff Beastie Boys a verdict on their copyright and trademark claims, defendant Monster moved for a judgment as a matter of law under Federal Rule of Civil Procedure 50. As to the Copyright Act claim, Monster argued that the evidence was insufficient to support the finding of willful infringement on which the award of enhanced statutory damages was based. As to the Lanham Act claim, Monster argued that the evidence was insufficient to support either a finding of a false endorsement or that
Monster acted with intentional deception. Monster alternatively moved for a new trial under
Rule 59 or for a reduction in damages. The court denied Monster’s motions.
December 5, 2014
Court My Reconsider Pre-1972 Sound Recording Decision In Turtles/Sirius Case
Flo & Eddie, Inc. v. Sirius XM Radio, 1:13-cv-05784-CM (SDNY filed 12/03/14) [Doc. 103].
As previously reported, a New York federal court recently found that Flo & Eddie (the Turtles) have state common law claims against Sirius XM concerning the public performance of pre-1972 sound recordings. However, defendant Sirius XM, by new counsel, subsequently brought to the Court's attention a previously un-cited decades old 2nd Circuit decision, RCA Mfg. Co. v. Whiteman, 114 F.2d 86, 87-88 (2d Cir. 1940), which held that no common law public performance right existed in sound recordings. "Whiteman plainly should have been addressed the first time around, and it must be dealt with now- it is, after all, a Second Circuit decision (albeit a pre-Naxos decision) discussing key issues in this case." Accordingly, the court entered a scheduling order for plaintiff to respond and discuss the case
As previously reported, a New York federal court recently found that Flo & Eddie (the Turtles) have state common law claims against Sirius XM concerning the public performance of pre-1972 sound recordings. However, defendant Sirius XM, by new counsel, subsequently brought to the Court's attention a previously un-cited decades old 2nd Circuit decision, RCA Mfg. Co. v. Whiteman, 114 F.2d 86, 87-88 (2d Cir. 1940), which held that no common law public performance right existed in sound recordings. "Whiteman plainly should have been addressed the first time around, and it must be dealt with now- it is, after all, a Second Circuit decision (albeit a pre-Naxos decision) discussing key issues in this case." Accordingly, the court entered a scheduling order for plaintiff to respond and discuss the case
December 1, 2014
Claims In 'Sugarman' Case Survive Dismissal; Rights Transferred To Defunct Publisher's Shareholder By Operation Of Law
Gomba Music, Inc. v. Avant, No. 14-cv-11767, 2014 BL 330905 (E.D. Mich. Nov. 24, 2014).
The Court dismissed a corporate music publisher's case in the Sugarman / Sixto Rodriguez case because the company had been administratively dissolved by the State of Michigan in 1971 for failure to file certain papers, but the claims by the company's sole shareholder survived because when the company dissolved, any interests it held were transferred to him by operation of law. The Court found that whether under the 1976 or 1909 Copyright Acts, by operation of law [Mich. Comp. Laws § 450.1855a], any rights that the company had in the compositions transferred to its sole shareholder when the corporation dissolved. The Court also found that the decision to sue in the company's name was due to a mistaken belief that the entity would be reinstated and that it was necessary to sue in the company's name because it was the original assignee of rights; accordingly, the Court allowed substitution of the shareholder for the defunct company he formerly owned as sole proprietor, pursuant to Fed. R. Civ. P. 17.
Thereafter, the Court addressed the sufficiency of the causes of action. First, the Court held that the plaintiff could assert fraud on the copyright office as a declaratory judgment action to attack the prima facie validity of defendants' copyrights in the compositions. Second, the Court held that the plaintiff could assert a declaratory judgment claim that he is the exclusive owner of the copyright in the compositions because it was plausible that plaintiff was not placed on notice of his claims until sometime after the release of the film Waiting for Sugar Man in July 2012 and therefore plausible that he timely filed his claim for declaratory judgment in May 2014. Third, the Court held that plaintiff could assert fraudulent concealment claims, and that the claims were not time-barred, because the name of the artist with whom plaintiff had an exclusive agreement (Sixto Rodriguez) was completely absent from the album credits, there were affirmative statement that others wrote the works, the plaintiff had limited motivation to investigate further given the "commercial failure" of the album at the time it was released, the artist Sixto Rodriguez was under an exclusive contract with the publisher plaintiff, and, later, copyright registrations were issued based on representations that others wrote the works. Lastly, the Court found that the copyright infringement claim also was not time-barred, and though the plaintiff may be precluded from certain statutory damages/attorneys' fees based on the timing of his attempted registration, that did not bar the claims.
The Court dismissed a corporate music publisher's case in the Sugarman / Sixto Rodriguez case because the company had been administratively dissolved by the State of Michigan in 1971 for failure to file certain papers, but the claims by the company's sole shareholder survived because when the company dissolved, any interests it held were transferred to him by operation of law. The Court found that whether under the 1976 or 1909 Copyright Acts, by operation of law [Mich. Comp. Laws § 450.1855a], any rights that the company had in the compositions transferred to its sole shareholder when the corporation dissolved. The Court also found that the decision to sue in the company's name was due to a mistaken belief that the entity would be reinstated and that it was necessary to sue in the company's name because it was the original assignee of rights; accordingly, the Court allowed substitution of the shareholder for the defunct company he formerly owned as sole proprietor, pursuant to Fed. R. Civ. P. 17.
Thereafter, the Court addressed the sufficiency of the causes of action. First, the Court held that the plaintiff could assert fraud on the copyright office as a declaratory judgment action to attack the prima facie validity of defendants' copyrights in the compositions. Second, the Court held that the plaintiff could assert a declaratory judgment claim that he is the exclusive owner of the copyright in the compositions because it was plausible that plaintiff was not placed on notice of his claims until sometime after the release of the film Waiting for Sugar Man in July 2012 and therefore plausible that he timely filed his claim for declaratory judgment in May 2014. Third, the Court held that plaintiff could assert fraudulent concealment claims, and that the claims were not time-barred, because the name of the artist with whom plaintiff had an exclusive agreement (Sixto Rodriguez) was completely absent from the album credits, there were affirmative statement that others wrote the works, the plaintiff had limited motivation to investigate further given the "commercial failure" of the album at the time it was released, the artist Sixto Rodriguez was under an exclusive contract with the publisher plaintiff, and, later, copyright registrations were issued based on representations that others wrote the works. Lastly, the Court found that the copyright infringement claim also was not time-barred, and though the plaintiff may be precluded from certain statutory damages/attorneys' fees based on the timing of his attempted registration, that did not bar the claims.
November 30, 2014
Covenant Not To Sue Upheld In Run-DMC Co-Author's Case Against Publisher Assignee For Royalties
Reach Music Publishing, Inc. v. Warner/Chappell Music, Inc., No. 09-cv-5580, 2014 BL 317978 (S.D.N.Y. Nov. 2014).
A Run-D.M.C. co-author's claim for breach of contract failed because that co-author "long ago sold all rights to the subject songs -- including his entire copyright interest -- in exchange for royalty payments," and in that agreement, he plainly acknowledged that the songs could be transferred to another publisher (Protoons) and that "he would only ever seek royalty payments from" the original publisher (Rush Grooves). The Court found that the covenant not to sue Protoons was enforceable and was not unconscionable under New York law. Therefore, the co-author breached the contract when he filed suit in 2008, and the defendant's damages were their resulting attorney's fees pursuant to the express attorney's fees provision in the contract. Defendant also counterclaimed that the plaintiff (another publisher, Reach, to whom the co-author had purportedly transferred his interest), tortiously induced the co-author to breach the covenant not to sue. The Court found that there was a question of material fact whether Reach had knowledge of the covenant not to sue, preventing either party from winning summary judgment on the tortious interference claim. "Even though knowledge of the contract need not be perfect, Reach must have knowledge of the covenant not to sue in order to be liable for helping Reeves violate that particular contractual provision."
A Run-D.M.C. co-author's claim for breach of contract failed because that co-author "long ago sold all rights to the subject songs -- including his entire copyright interest -- in exchange for royalty payments," and in that agreement, he plainly acknowledged that the songs could be transferred to another publisher (Protoons) and that "he would only ever seek royalty payments from" the original publisher (Rush Grooves). The Court found that the covenant not to sue Protoons was enforceable and was not unconscionable under New York law. Therefore, the co-author breached the contract when he filed suit in 2008, and the defendant's damages were their resulting attorney's fees pursuant to the express attorney's fees provision in the contract. Defendant also counterclaimed that the plaintiff (another publisher, Reach, to whom the co-author had purportedly transferred his interest), tortiously induced the co-author to breach the covenant not to sue. The Court found that there was a question of material fact whether Reach had knowledge of the covenant not to sue, preventing either party from winning summary judgment on the tortious interference claim. "Even though knowledge of the contract need not be perfect, Reach must have knowledge of the covenant not to sue in order to be liable for helping Reeves violate that particular contractual provision."
New York Common Law Protects Public Performance of Pre-1972 Sound Recordings; NY Federal Court Joins California Federal Court
Flo & Eddie, Inc. v. Sirius XM, Inc., No. 1:13-cv-05784 (S.D.N.Y. filed Nov. 14, 2014) [Doc. 88].
Joining a California federal court in a parallel case, a New York federal court found that Flo & Eddie (the Turtles) have state common law claims against Sirius XM concerning the public performance of pre-1972 sound recordings. "In short, general principles of common law copyright dictate that public performance rights in pre-1972 sound recordings do exist. New York has always protected public performance rights in works other than sound recordings that enjoy the protection of common law copyright. Sirius suggests no reason why New York -- a state traditionally protective of performers and performance rights -- would treat sound recordings differently."
First, the court found that plaintiff holds valid common law copyrights in the Turtles' sound recordings. "The Turtles originally acquired a common law copyright in their sound recordings by expending time, effort, money and skill to create them. That copyright was then transferred...eventually to Flo and Eddie, which now owns the sound recordings."
Second, the Court found that Flo and Eddie's common law copyright provides exclusive rights to reproduce and publicly perform Turtles recordings. As to the absence of prior litigation on the matter, "acquiescence by participants in the recording industry in a status quo where recording artists and producers were not paid royalties while songwriters were does not show that they lacked an enforceable right under the common law -- only that they failed to act on it." The court did not read too much into the fact that New York courts have never squarely addressed this particular feature of state copyright law in the context of sound recordings.
Third, the Court found that Sirius infringed plaintiff's common law copyright and engaged in unfair competition (misappropriation). In reproducing Turtles recordings, Sirius acted without authorization. Further, to the extent that distribution is an element of common law copyright, the Court found that publicly performing sound recordings is an act of distribution.
Moreover, even though the Court found that there is a common law fair use defense parallel to the federal fair use defense, Sirius XMs creation of multiple complete copies of the sound recordings could not be considered a fair use. "It is a matter of economic commons sense that Sirius harms Flo and Eddie's sales and potential licensing fees (even if the latter market is not yet extant) by publicly performing Turtles sound recordings."
Lastly, the Court rejected Sirius XM's argument that plaintiff's claims are barred by the constitutional Dormant Commerce Clause, which provides that states may not interfere with interstate commerce. U.S. Const. art. I, sec. 8. The court found that the argument is a "red herring" because New York does not "regulate" anything by recognizing common law copyright. Sirius objects to a "general principle respecting the liability of all persons within the jurisdiction of" New York, which under the 1876 (yes, 1876) Supreme Court decision Sherlock v. Alling, 93 U.S. 99, is not a state-imposed regulation that might affect interstate commerce.
Joining a California federal court in a parallel case, a New York federal court found that Flo & Eddie (the Turtles) have state common law claims against Sirius XM concerning the public performance of pre-1972 sound recordings. "In short, general principles of common law copyright dictate that public performance rights in pre-1972 sound recordings do exist. New York has always protected public performance rights in works other than sound recordings that enjoy the protection of common law copyright. Sirius suggests no reason why New York -- a state traditionally protective of performers and performance rights -- would treat sound recordings differently."
First, the court found that plaintiff holds valid common law copyrights in the Turtles' sound recordings. "The Turtles originally acquired a common law copyright in their sound recordings by expending time, effort, money and skill to create them. That copyright was then transferred...eventually to Flo and Eddie, which now owns the sound recordings."
Second, the Court found that Flo and Eddie's common law copyright provides exclusive rights to reproduce and publicly perform Turtles recordings. As to the absence of prior litigation on the matter, "acquiescence by participants in the recording industry in a status quo where recording artists and producers were not paid royalties while songwriters were does not show that they lacked an enforceable right under the common law -- only that they failed to act on it." The court did not read too much into the fact that New York courts have never squarely addressed this particular feature of state copyright law in the context of sound recordings.
Third, the Court found that Sirius infringed plaintiff's common law copyright and engaged in unfair competition (misappropriation). In reproducing Turtles recordings, Sirius acted without authorization. Further, to the extent that distribution is an element of common law copyright, the Court found that publicly performing sound recordings is an act of distribution.
Moreover, even though the Court found that there is a common law fair use defense parallel to the federal fair use defense, Sirius XMs creation of multiple complete copies of the sound recordings could not be considered a fair use. "It is a matter of economic commons sense that Sirius harms Flo and Eddie's sales and potential licensing fees (even if the latter market is not yet extant) by publicly performing Turtles sound recordings."
Lastly, the Court rejected Sirius XM's argument that plaintiff's claims are barred by the constitutional Dormant Commerce Clause, which provides that states may not interfere with interstate commerce. U.S. Const. art. I, sec. 8. The court found that the argument is a "red herring" because New York does not "regulate" anything by recognizing common law copyright. Sirius objects to a "general principle respecting the liability of all persons within the jurisdiction of" New York, which under the 1876 (yes, 1876) Supreme Court decision Sherlock v. Alling, 93 U.S. 99, is not a state-imposed regulation that might affect interstate commerce.
No Interlocutory Appeal Of Pre-72 Sound Recording Liability Holding In Turtles v Sirius Case
Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5693 (C.D. Cal. Nov. 20, 2014).
The District Court denied Sirius XM's motion to certify for interlocutory appeal the Court's earlier order granting partial summary judgment. The earlier order granted plaintiff summary judgment to the extent that its claims were premised on Sirius XM's public performance of plaintiff's pre-1972 sound recordings, ruling that owners of sound recordings have the exclusive right to publicly perform their recordings under California Civil Code 980(a)(2). 28 USC 1292(b) provides a means for litigants to bring an immediate appeal of a non-final order with the consent of both the federal district court and the federal court of appeals. The district court denied the motion because, "[a]t this stage in the litigation and under the operative scheduling order governing the case, certification of the Order for immediate appeal would delay rather than materially advance the termination of the litigation". Continuing, the district court observed that the case is moving swiftly toward trial and a final resolution that will be appealable to the Ninth Circuit in the customary manner. While interpretation of Cal. Civ. Code 980(a)(2) is an issue of controlling law, an immediate appeal would not speed up the resolution of the case.
The District Court denied Sirius XM's motion to certify for interlocutory appeal the Court's earlier order granting partial summary judgment. The earlier order granted plaintiff summary judgment to the extent that its claims were premised on Sirius XM's public performance of plaintiff's pre-1972 sound recordings, ruling that owners of sound recordings have the exclusive right to publicly perform their recordings under California Civil Code 980(a)(2). 28 USC 1292(b) provides a means for litigants to bring an immediate appeal of a non-final order with the consent of both the federal district court and the federal court of appeals. The district court denied the motion because, "[a]t this stage in the litigation and under the operative scheduling order governing the case, certification of the Order for immediate appeal would delay rather than materially advance the termination of the litigation". Continuing, the district court observed that the case is moving swiftly toward trial and a final resolution that will be appealable to the Ninth Circuit in the customary manner. While interpretation of Cal. Civ. Code 980(a)(2) is an issue of controlling law, an immediate appeal would not speed up the resolution of the case.
11th Cir. Finds Summary Judgment Properly Granted In Favor of BMI And Against Tavern; Adopts 2nd Cir. Davis v. Blige
BMI v. Evie's Tavern Ellenton, Inc., No. 13-15871, 2014 BL 329074 (11th Cir. Nov. 21, 2014).
The 11th Circuit affirmed summary judgment in favor of the performing rights society BMI, rejecting the defendant-tavern's argument that there were questions of material fact as to the copyright ownership of the musical compositions at issue and as to whether defendants were innocent infringers. With respect to the chain-of-title for the five songs at issue, the court examined each chain of title, and further found that the district court properly found that BMI could be awarded judgment on each song in addition to the copyright holder (generally, the music publisher who owned the copyright). As BMI agreed to be responsible for all costs and expenses pursuing infringement actions based on the titles that BMI licenses from copyright owners, the number of them to whom summary judgment is granted made no difference in the award of damages, attorneys' fees and costs. Thus, there was no error in granting summary judgment to the other plaintiffs (the copyright owners) under Fed. R. Civ. P. 61.
As to innocent infringement, the Court affirmed that is not a defense to summary judgment liability, and instead is only a consideration as to the amount of statutory damages to award. The court also found that an award of attorney's fees was appropriate. Notably, the 11th Circuit joined the rule adopted by the Second Circuit in Davis v. Blige, 505 F.3d 90, 99 (2d Cir. 2007) that a copyright co-owner may maintain and recover in a copyright infringement action without joining other co-owners. See fn. 2.
The 11th Circuit affirmed summary judgment in favor of the performing rights society BMI, rejecting the defendant-tavern's argument that there were questions of material fact as to the copyright ownership of the musical compositions at issue and as to whether defendants were innocent infringers. With respect to the chain-of-title for the five songs at issue, the court examined each chain of title, and further found that the district court properly found that BMI could be awarded judgment on each song in addition to the copyright holder (generally, the music publisher who owned the copyright). As BMI agreed to be responsible for all costs and expenses pursuing infringement actions based on the titles that BMI licenses from copyright owners, the number of them to whom summary judgment is granted made no difference in the award of damages, attorneys' fees and costs. Thus, there was no error in granting summary judgment to the other plaintiffs (the copyright owners) under Fed. R. Civ. P. 61.
As to innocent infringement, the Court affirmed that is not a defense to summary judgment liability, and instead is only a consideration as to the amount of statutory damages to award. The court also found that an award of attorney's fees was appropriate. Notably, the 11th Circuit joined the rule adopted by the Second Circuit in Davis v. Blige, 505 F.3d 90, 99 (2d Cir. 2007) that a copyright co-owner may maintain and recover in a copyright infringement action without joining other co-owners. See fn. 2.
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