Dep't of Justice on Constitutionality of Copyright Statutory Damages

The U.S. Department of Justice's memorandum in defense of the constitutionality of the statutory damages provision of the Copyright Act, 17 U.S.C. § 504(c). Submitted to the U.S. District Court for the District of Minnesota in the peer-to-peer file sharing case against defendant Jammie Thomas.

Capitol v Thomas - DOJ Memo in Support of Statutory Damages

Royalties for "Sold" CDs

U.S. Philips Corp. v. EMI Music, Inc., __AD3d__; 883 NYS2d 584; 2009 NY Slip Op 06135; NYLJ, 08/10/09, p. 31, col. 2 (2nd Dep't 2009), affirming order which granted plaintiff's motion for summary judgment on the issue of liability with respect to claim seeking payment of royalties for compact discs that were sold but later returned by defendant's customers.

"Contrary to the defendants' contention, the Supreme Court properly found that the language of the parties' license agreement was clear and unambiguous as to the payment by the defendants of certain royalties for compact discs that were "sold," even if the compact discs were later returned by the defendants' customers. In this regard, the subject agreement provided that the defendants would be responsible for paying royalties to the plaintiff for compact discs 'made, used, sold or otherwise disposed of" by the defendants. The agreement further provided that a product "shall be considered sold when invoiced, or if not invoiced, when delivered to a party other than the manufacturer.'"

Webcasting Not 'Interactive Service' Required to Pay License Fees

A webcasting service, Launch, that provides users with individualized Internet radio stations is not required to pay licensing fees to copyright holders of the songs the service plays. The service, which provides the stations by which content is affected by customers' ratings of titles, artists and albums, is not "interactive" as a matter of law. Therefore it is not required to pay individual license fees to the copyright holders; instead, it is only required to pay a statutory licensing fee as set by the Copyright Royalty Board.

Arista Records, LLC v. Launch Media, Inc., no. 07-civ-2567 (2d Cir. Aug. 21, 2009).

Arista v Launch

Plaintiff's Motion to Transfer Granted in Nina Simone Action

Stroud Productions & Enterprises, Inc. v. Castle Rock Entertainment Inc., No. 07 Civ. 8638, 8/17/2009 NYLJ "Decision of Interest" (S.D.N.Y. Aug. 4, 2009) -

Plaintiff's motion to transfer venue to California granted. 28 USC 1404(a). The outcome of a California action will be dispositive to the sole issue in this case, to wit: whether the license pursuant to which Defendants used a Nina Simone song in a film was valid.

Notably, the moving party was plaintiff - in such instance, the SDNY requires plaintiff to demonstrate, in the time since the action was filed, there has been a change of circumstances that warrants transfer of venue.

Copyright Claim Stated Despite Oral License Defense

Ortiz v. Guitian Music Brothers Inc., No. 07 Civ. 3897, 8/12/09 NYLJ "Decision of Interest" (S.D.N.Y. July 22, 2009) (Sweet, J.).

Defendants' FRCP 12(b)(6) motion to dismiss copyright amended complaint denied. According to the amended complaint, plaintiff was solicited to create a series of musical works to be used as the instrumental score for a movie, and plaintiff was to receive certain payments. Plaintiff composed the works for the movie, and 13 works were used as the background instrumental score. The movie was ultimately released, distributed, and sold featuring the works as the background instrumental score. Plaintiff alleges non-payment.

After discussing the Rule 12(b)(6) standard, the Court found that plaintiff had sufficiently plead his claim for copyright infringement under the Rule 8 pleading standards, which require a copyright complaint state: (1) which specific original works are the subject of the claim; (2) that plaintiff owns the copyright; (3) that the works have been registered in accordance with the copyright statute; and (4) by what acts and during what time defendant has infringed the copyright.

Defendants argued that their affirmative defense precluded the action - namely, that plaintiff granted defendants an oral nonexclusive license to use the works in connection with the creation and distribution of the movie. The Court rejected this argument; it was not persuaded that he limited facts alleged in the amended complaint conclusively established such an oral nonexclusive license.

The Court observed that even if it had found such an oral nonexclusive license was apparent on the face of the amended complaint, plaintiff would not be precluded from bringing his copyright claim "because it is further alleged that Defendants did not perform their part of the understanding between the parties." In other words, a licensor can bring an action against a licensee who exceeds or breaches the license agreement. "Indeed, absent consideration, nonexclusive licenses are revocable." Assuming an oral license did exist and plaintiff's allegations of non-payment were true, such license was revocable, and by instituting the action, plaintiff revoked any license that may have existed.

Therefore, the Court denied defendants' motion to dismiss.

No Personal Jurisdiction Over Music Website in Copyright Action

The Royalty Network Inc. v. Dishant.com LLC, No. 08 Civ. 8558 (SHS) (S.D.N.Y. July 29, 2009).

Defendant's FRCP 12(b)(2) motion to dismiss for lack of personal jurisdiction granted; plaintiff's request for jurisdictional discovery denied.

Defendants operate a website which invites visitors to play Indian music, to create "playlists" of Indian songs, and to "listen to and download Bollywood Movie ringtones." Plaintiff, the administrator of music owned by non-party music recording company based in India, brought action alleging that defendants' website provides visitors with unauthorized access to music produced by the record company, thereby violating its copyrights and denying Plaintiff royalties to which it is entitled as administrator.

Plaintiff contended that the Court has specific jurisdiction over defendants pursuant to New York's "long arm" statute, CPLR 302(a)(1) and (a)(3)(ii). The Court disagreed.

After discussing the standard on a 12(b)(2) motion, the Court examined whether Defendants' website conferred personal jurisdiction over defendants, who operated the website from Virginia and had no office, real estate or any employee in New York.

Under the "transacts business in" in New York claim for specific jurisdiction, the Court analyzed the "Spectrum of Interactivity" of the Website (passive, interactive, or somewhere in the middle), and found that the website "falls somewhere in the 'middle ground' and thus the jurisdiction inquiry requires closer evaluation of tis contact with New York residents." Plaintiff contended that the following contacts were sufficient: the website was available to NY visitors who could stream and download material from it; the site sells advertisments to NY based companies; and defendants registered the domain name thorugh a NY company.

Plaintiff, however, provided no evidence that any NY resident actually engaged in any transaction on the website (e.g., registered or downloaded material), or that defendants did anything to indicate their knowing and purposeful transaction with NY visitors. Nor was there anything to indicate that defendants sold to, or interacted with the NY office of any of its advertisers (who have national audiences) or that defendants knew that any of those advertisers were headquartered in NY. There was insufficient evidence to support the inference of a purposeful attempt to take advantage of the NY market. Lastly, even if Defendants registered their domain name through a NY company, there was no nexus between that transaction and those at issue (i.e., the connection was merely coincidental).

Under the "tortious conduct out of state causing injury in state" claim, plaintiff fared no better. Although plaintiff's copyright infringmenet claim validly alleged tortious activity and injury within NY, "the jurisdiction inquiry breaks down" becuase plaintiff proffered insufficient evidence to support a finding that it was reasonably foreseeable to defendants that their conduct would cause such injury in NY. (The "reasonable foreseeability" requirement is construed under NY law consistent with U.S. Supreme Court precedent concerning due process.) Plaintiff pointed to neither tangible manifestations of defendants' intent to target NY, nor concrete facts known to defendants that would lead them to foresee being sued in NY. There was no purposeful NY affiliation or discernable effort to target NY. Plaintiff's "sheer speculation" was insufficient.

Lastly, Plaintiff was unable to make a threshold showing that there was some basis for the assertion of jurisdiction to grant jurisdictional discovery. Moreover, plaintiff did not put forward any compelling reasons why discovery should be allowed, nor did it identify any particular facts it would seek to adduce through such discovery or suggest how discovery could aid the Court's jurisdictional inquiry.
Decision Dishant

Sanctions for Blogging in Music Case?

An attorney representing a college student in a copyright infringment case based on music downloads faces possible court sanctions for an Internet posting of deposition excerpts from his defense. The attorney, Professor Charles Nesson of Harvard Law School, is representing defendant in Capital Records Inc. v. Alaujan, a District of Massachusetts case that several record companies and the RIAA filed against the students.

Judge Nancy Gertner issued an electronic order on July 7 demanding an explanation why defendant and his counsel should not be sanctioned for the posting of parts of a deposition on Harvard Law School's Berkman Center for Internet & Society Web site. The court noted that prior oral and written orders "made clear" that deposition recordings were permitted but "not to be made public via the Internet."