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.
December 1, 2014
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.
November 6, 2014
Hard Rock's CAVERN CLUB Trademark Not Subject To Cancellation
Cavern City Tours Ltd. v. Hard Rock Cafe Int'l (USA), Inc., No. 6:12-cv-1410 (M.D. Fla. Oct. 31, 2014).
The Court held that the TTAB properly dismissed the the petition of plaintiff, who owns the mark THE CAVERN CLUB in the UK and other jurisdictions, to cancel Hard Rock Cafe's CAVERN CLUB mark in the USA. "The Cavern Club" was a venue where the Beatles performed hundreds of times early in their career.
First, the Court found that Hard Rock did not knowingly make false statements in their application for the CAVERN CLUB mark concerning the use of the mark by other people (like plaintiff), and rejected plaintiff's argument to adopt a "willful blindness" standard. The Court found that plaintiff failed to submit sufficient evidence to prove that Hard Rock was aware of Plaintiff's mark; further, even if Hard Rock did have knowledge of plaintiff's use of the mark, the Court found that Hard Rock had reasonable basis to believe that plaintiff did not have a superior right to use the mark in commerce.
Second, the Court found that Hard Rock's mark did not falsely suggest a connection with plaintiff in violation of section 2(a) of the Lanham Act. "The mere fact that Plaintiff's name has a word in common with the CAVERN CLUB does not establish that Plaintiff's identity or persona is the CAVERN CLUB." Similarly, plaintiff's lease and operation of a "new" Cavern Club venue did not establish that Plaintiff's persona or identity is the CAVERN CLUB. Moreover, Plaintiff did not establish that the CAVERN CLUB mark points uniquely and unmistakably to Plaintiff. To the contrary, the evidence links the CAVERN CLUB with the original venue, which was demolished in 1973; thus, it did not point uniquely to Plaintiff. Accordingly, Hard Rock was granted summary judgment dismissing the case.
The Court held that the TTAB properly dismissed the the petition of plaintiff, who owns the mark THE CAVERN CLUB in the UK and other jurisdictions, to cancel Hard Rock Cafe's CAVERN CLUB mark in the USA. "The Cavern Club" was a venue where the Beatles performed hundreds of times early in their career.
First, the Court found that Hard Rock did not knowingly make false statements in their application for the CAVERN CLUB mark concerning the use of the mark by other people (like plaintiff), and rejected plaintiff's argument to adopt a "willful blindness" standard. The Court found that plaintiff failed to submit sufficient evidence to prove that Hard Rock was aware of Plaintiff's mark; further, even if Hard Rock did have knowledge of plaintiff's use of the mark, the Court found that Hard Rock had reasonable basis to believe that plaintiff did not have a superior right to use the mark in commerce.
Second, the Court found that Hard Rock's mark did not falsely suggest a connection with plaintiff in violation of section 2(a) of the Lanham Act. "The mere fact that Plaintiff's name has a word in common with the CAVERN CLUB does not establish that Plaintiff's identity or persona is the CAVERN CLUB." Similarly, plaintiff's lease and operation of a "new" Cavern Club venue did not establish that Plaintiff's persona or identity is the CAVERN CLUB. Moreover, Plaintiff did not establish that the CAVERN CLUB mark points uniquely and unmistakably to Plaintiff. To the contrary, the evidence links the CAVERN CLUB with the original venue, which was demolished in 1973; thus, it did not point uniquely to Plaintiff. Accordingly, Hard Rock was granted summary judgment dismissing the case.
November 4, 2014
Super Bowl Shuffle Case Belongs In Federal Court; Remand Denied
Den v. Renaissance Marketing Corp., No. 14-cv-2999, 2014 BL 303007 (N.D. Ill. Oct. 28, 2014).
In case concerning defendants' alleged use of the "Super Bowl Shuffle" without plaintiff' authorization, a federal court in Illinois held that the case should remain in federal court as preempted by the federal Copyright Act. Accordingly, plaintiffs' motion to remand to state court was denied.
The Super Bowl Shuffle is a song and music video trumpeting the success of the 1985 Chicago Bears. Plaintiffs initially brought a case in Illinois state court alleging that defendants were not assignees of the record label's interest and therefore defendants were improperly benefiting from the marketing, distribution and licensing of the song without authorization. Defendants removed the case to federal court, claiming that the state-law claims (for constructive trust, injunctive relief, conversion, unjust enrichment, and accounting) were preempted by the Copyright Act. Plaintiffs moved to remand to state court.
The Court held that removal of the case to federal court, under 28 USC 1441, was proper. The Court found that the Copyright Act preempted the state law causes of action for conversion, declaratory judgment and injunctive relief. 17 USC 301. Plaintiffs were not just seeking to enforce the royalty agreement with the label, as defendants allegedly were improper assignees of the contract. The rights seeking plaintiff sought to enforce were really copyright claims, protecting plaintiffs "against the world." Other claims -- for constructive trust, unjust enrichment, and an accounting -- were not preempted, but the Court retained supplemental jurisdiction.
In case concerning defendants' alleged use of the "Super Bowl Shuffle" without plaintiff' authorization, a federal court in Illinois held that the case should remain in federal court as preempted by the federal Copyright Act. Accordingly, plaintiffs' motion to remand to state court was denied.
The Super Bowl Shuffle is a song and music video trumpeting the success of the 1985 Chicago Bears. Plaintiffs initially brought a case in Illinois state court alleging that defendants were not assignees of the record label's interest and therefore defendants were improperly benefiting from the marketing, distribution and licensing of the song without authorization. Defendants removed the case to federal court, claiming that the state-law claims (for constructive trust, injunctive relief, conversion, unjust enrichment, and accounting) were preempted by the Copyright Act. Plaintiffs moved to remand to state court.
The Court held that removal of the case to federal court, under 28 USC 1441, was proper. The Court found that the Copyright Act preempted the state law causes of action for conversion, declaratory judgment and injunctive relief. 17 USC 301. Plaintiffs were not just seeking to enforce the royalty agreement with the label, as defendants allegedly were improper assignees of the contract. The rights seeking plaintiff sought to enforce were really copyright claims, protecting plaintiffs "against the world." Other claims -- for constructive trust, unjust enrichment, and an accounting -- were not preempted, but the Court retained supplemental jurisdiction.
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