Toto, Inc. v. Sony Music Entertainment, No. 12-cv-1434-LAK-AJP (SDNY report and recommendation Dec. 11, 2012).
Plaintiff Toto brought the action against Sony Music based on a dispute over the amount of royalties owed under the parties' recording contract. Sony moved to dismiss, and the motion was granted in part and denied in part. The primary issue in the case ise the royalty rate for music distributed through download and mastertone providers (e.g., iTunes, eMusic, Amazon.com and Verizon Wireless).
The magistrate judge found that Toto's first claim based on royalty accountings for the audit period should be dismissed as contractually time barred. The parties agreement had a 3 year limitation period (i.e., claims had to be brought within 3 years from the royalty report). Toto's argument that August 2010 and December 2011 documentation restarted the time limitation was unavailing. However, the magistrate judge found that the portion of Toto's first claim based on royalty accountings for the post-audit period should not be dismissed with respect to the digital download issue. In other words, Toto stated a claim for breach of the recording contract for the period within the contractually agreed to 3 year limitation period.
The magistrate judge also found that Toto failed to plead the elements of equitable estoppel. The Court held that purposefully delaying an audit was not a ground for invoking equitable estoppel. Also, participation in settlement negotiations was not a ground for invoking equitable estoppel.
The magistrate judge also found that Toto's claim for breach of the implied covenant of good faith and fair dealing should be dismissed. The claim did not state a distinct cause of action based on a separate set of facts and was not independent of the breach of contract claim. The good faith and fair dealing claim was duplicative of the breach of contract claim.
December 13, 2012
December 5, 2012
AM/FM Performance Royalties Discussed In Congress
Tamlin H. Bason, "Hearing on Internet Royalties Veers Into Discussion of AM/FM Loophole" (BNA 17 ECLR 2096).
BNA reports on a House subcommittee that held a hearing on a bill that would lower the royalty rates paid by services that offer internet radio, but that many lawmakers seemed more interested in dealing with the larger loophole: that AM and FM radio stations do not pay performance royalties.
BNA reports on a House subcommittee that held a hearing on a bill that would lower the royalty rates paid by services that offer internet radio, but that many lawmakers seemed more interested in dealing with the larger loophole: that AM and FM radio stations do not pay performance royalties.
November 27, 2012
Article re: Copyright Termination in 2013
See Ryan Davis, "Copyright Termination For '70s Hits Won't Spark Lawsuit Fever" (Law360, New York; Nov. 26, 2012). (Link to article; registration required).
Article summary (first paragraph): "Musicians who recorded hit songs in the late 1970s will gain the right to reclaim ownership of their work starting in January under a 1978 copyright law provision, and while record labels are expected to fight to retain control of lucrative music, 2013 is unlikely to bring a flood of litigation, attorneys said."
The article concerns the reclamation of rights by authors that were licensed or transferred after 1978, pursuant to section 203 of the Copyright Act. Generally, termination rights may be effected after 35 years from the grant. Id. Thirty-five years from 1978 is...2013!
Lawyers interviewed for the article predicted that there will be few actually litigated cases, and instead termination notices will serve as a jumping-off point for contract re-negotiations between artists and record labels.
Article summary (first paragraph): "Musicians who recorded hit songs in the late 1970s will gain the right to reclaim ownership of their work starting in January under a 1978 copyright law provision, and while record labels are expected to fight to retain control of lucrative music, 2013 is unlikely to bring a flood of litigation, attorneys said."
The article concerns the reclamation of rights by authors that were licensed or transferred after 1978, pursuant to section 203 of the Copyright Act. Generally, termination rights may be effected after 35 years from the grant. Id. Thirty-five years from 1978 is...2013!
Lawyers interviewed for the article predicted that there will be few actually litigated cases, and instead termination notices will serve as a jumping-off point for contract re-negotiations between artists and record labels.
November 16, 2012
Black Keys Settle Commercial Claims Against Pizza Hut and Home Depot
Auerbach v. The Home Depot, 12-cv-05386 (C.D. Cal. doc. 23 filed 11/13/2012); and Auerbach v. Pizza Hut, Inc., 12-cv-05385 (C.D. Cal. doc. 27 filed 11/9/12).
The Black Keys have settled their lawsuit against the Home Depot and Pizza Hut for the alleged unauthorized use of Black Keys songs in commercials.
The Black Keys have settled their lawsuit against the Home Depot and Pizza Hut for the alleged unauthorized use of Black Keys songs in commercials.
October 12, 2012
$6.6 Million Copyright Infringement Judgment In Lyrics Website Case
Peermusic III v. Live Universe, Inc., No. 2:09-cv-06160 (C.D. Cal. filed Oct. 9, 2012) [Doc. 215].
Defendants operated song lyric websites that infringed copyrights held by a group of music publishers. The company was run by the co-founder of MySpace Inc. The Court granted a default judgment to plaintiffs and awarded statutory damages in the sum of $12,500 per each of the 528 songs shown to be infringed for a total of $6,600,000. Plaintiffs were also awarded their attorneys fees.
Kudos to my former colleagues Paul Fakler and Ross Charap, who represented Plaintiffs.
Defendants operated song lyric websites that infringed copyrights held by a group of music publishers. The company was run by the co-founder of MySpace Inc. The Court granted a default judgment to plaintiffs and awarded statutory damages in the sum of $12,500 per each of the 528 songs shown to be infringed for a total of $6,600,000. Plaintiffs were also awarded their attorneys fees.
Kudos to my former colleagues Paul Fakler and Ross Charap, who represented Plaintiffs.
September 21, 2012
Apple's Music Icon Can Not Be Trademarked
In Re Apple Inc., Serial No. 85019762 (TTAB mailed Sep. 18, 2012).
Apple sought to register a trademark for its music icon. Registration was denied based on a pre-existing registration. The refusal to register was affirmed by the TTAB.
"In comparing the marks within the above-noted legal parameters, the marks at issue are similar because they comprise a double musical note in an orange rectangle. The designs are not identical because applicant’s rectangle has rounded corners, the shades of orange are different, and applicant’s double musical note is ascending while note in the registered mark is descending. Nevertheless, we find that the basic similarities in the marks outweigh any specific differences that might be apparent upon a side-by-side comparison. The differences in the details of the respective depictions of the double musical notes and their background designs do not suffice to distinguish the marks in terms of their overall commercial impressions. Regardless of the differences which might be apparent in a side-by-side comparison, both marks depict a double musical note in an orange rectangle. Thus, when the marks are viewed at different times, the recollection of the first viewed mark will be a general impression that is devoid of the details that applicant argues sets its mark apart from the registered mark. What will be remembered is a musical note in an orange rectangle. The fact that the marks are not identical is less significant to our analysis than the basic similarities arising from the fact that both marks include the depiction of a double musical note in an orange rectangle."
Apple sought to register a trademark for its music icon. Registration was denied based on a pre-existing registration. The refusal to register was affirmed by the TTAB.
"In comparing the marks within the above-noted legal parameters, the marks at issue are similar because they comprise a double musical note in an orange rectangle. The designs are not identical because applicant’s rectangle has rounded corners, the shades of orange are different, and applicant’s double musical note is ascending while note in the registered mark is descending. Nevertheless, we find that the basic similarities in the marks outweigh any specific differences that might be apparent upon a side-by-side comparison. The differences in the details of the respective depictions of the double musical notes and their background designs do not suffice to distinguish the marks in terms of their overall commercial impressions. Regardless of the differences which might be apparent in a side-by-side comparison, both marks depict a double musical note in an orange rectangle. Thus, when the marks are viewed at different times, the recollection of the first viewed mark will be a general impression that is devoid of the details that applicant argues sets its mark apart from the registered mark. What will be remembered is a musical note in an orange rectangle. The fact that the marks are not identical is less significant to our analysis than the basic similarities arising from the fact that both marks include the depiction of a double musical note in an orange rectangle."
September 13, 2012
Covenant Not To Sue Dooms Velvet Underground Copyright Claim Against Warhol
The Velvet Underground v. The Andy Warhol Foundation, No. 1:12-cv-00201-AJN (S.D.N.Y. filed Sept. 7, 2012) [Doc. 30].
The Velvet Underground sought a declaration that the Andy Warhol Foundation has no copyright in the iconic banana image used by the Velvet Underground and designed by Warhol. The Warhol Foundation had covenanted not to sue the Velvet Underground for copyright infringement for the Velvet Underground's use of the banana image. The Court held that the covenant not to sue eliminated any justiciable controversy between the parties over copyright in the design, and thus dismissed the Velvet Underground's declaratory judgment claim. (The Velvet Underground's trademark claims were not the subject of the motion and were not dismissed).
In the decision, Judge Nathan does a thorough analysis of the Declaratory Judgment Act (28 U.S.C. 2201 et seq.), and specifically with respect to intellectual property cases. Notably, the covenant not to sue was entered after the litigation had commenced, so the issue had been mooted by a subsequent development (the covenant). The Court found that: "[I]n intellectual property cases, when a declaratory judgment plaintiff seeks a declaration that an asserted right is invalid or otherwise unenforceable and the declaratory judgment defendant provides the plaintiff with a covenant not to sue for infringement of that right, that covenant can extinguish any current or future case or controversy between the parties, and divests the district court of subject matter jurisdiction." (Doc. 30 at pp. 6-7).
The Court held that the covenant at issue was broad, and then determined that there no longer was a "live, actual controversy." First, the Court found that there was no real and substantial prospect that the Warhol Foundation's alleged copyright would impact the Velvet Underground's legal interests, and the Foundation's mere assertion of the right did not support a declaratory judgment claim. The Covenant no only held litigation in abeyance, but it also vitiated any coercive force that the Foundation's alleged copyright might have had against the Velvet Underground. Second, the Court held that the Declaratory Judgment Act could not be sued to test the validity of an affirmative defense that a plaintiff anticipates the defendant will assert, to wit: the Foundation claiming that its copyright shields it from trademark liability. Third, the alleged adverse economic impact of the alleged copyright was not sufficiently immediate and real to warrant the issuance of a declaratory judgment. "Without the 'how,' [the Velvet Underground] cannot show the controversy is 'real'; without the 'when', it cannot show the controversy is 'immediate'." (Doc. 30, p. 14). Fourth the right to an accounting under the Declaratory Judgment Act is not an independent cause of action, but is merely relief that may be granted.
The Velvet Underground sought a declaration that the Andy Warhol Foundation has no copyright in the iconic banana image used by the Velvet Underground and designed by Warhol. The Warhol Foundation had covenanted not to sue the Velvet Underground for copyright infringement for the Velvet Underground's use of the banana image. The Court held that the covenant not to sue eliminated any justiciable controversy between the parties over copyright in the design, and thus dismissed the Velvet Underground's declaratory judgment claim. (The Velvet Underground's trademark claims were not the subject of the motion and were not dismissed).
In the decision, Judge Nathan does a thorough analysis of the Declaratory Judgment Act (28 U.S.C. 2201 et seq.), and specifically with respect to intellectual property cases. Notably, the covenant not to sue was entered after the litigation had commenced, so the issue had been mooted by a subsequent development (the covenant). The Court found that: "[I]n intellectual property cases, when a declaratory judgment plaintiff seeks a declaration that an asserted right is invalid or otherwise unenforceable and the declaratory judgment defendant provides the plaintiff with a covenant not to sue for infringement of that right, that covenant can extinguish any current or future case or controversy between the parties, and divests the district court of subject matter jurisdiction." (Doc. 30 at pp. 6-7).
The Court held that the covenant at issue was broad, and then determined that there no longer was a "live, actual controversy." First, the Court found that there was no real and substantial prospect that the Warhol Foundation's alleged copyright would impact the Velvet Underground's legal interests, and the Foundation's mere assertion of the right did not support a declaratory judgment claim. The Covenant no only held litigation in abeyance, but it also vitiated any coercive force that the Foundation's alleged copyright might have had against the Velvet Underground. Second, the Court held that the Declaratory Judgment Act could not be sued to test the validity of an affirmative defense that a plaintiff anticipates the defendant will assert, to wit: the Foundation claiming that its copyright shields it from trademark liability. Third, the alleged adverse economic impact of the alleged copyright was not sufficiently immediate and real to warrant the issuance of a declaratory judgment. "Without the 'how,' [the Velvet Underground] cannot show the controversy is 'real'; without the 'when', it cannot show the controversy is 'immediate'." (Doc. 30, p. 14). Fourth the right to an accounting under the Declaratory Judgment Act is not an independent cause of action, but is merely relief that may be granted.
Subscribe to:
Posts (Atom)
Posts
