Court Partially Voids Deal Between Prince's Estate and Universal Music

In re: The Estate of Prince Rogers Nelson, Deceased, No. 10-PR-16 in the Carver County District Court June 2017.

A Minnesota judge voided a portion of Universal Music Group’s $31 million deal with Prince’s estate, ordering the estate to refund Universal Music Group’s advanced payment.

After determining that the exclusive licensing agreement made back in January included rights that were already guaranteed to Warner Bros. through previous agreements, Prince’s estate asked the court to rescind the agreement so they could ensure no overlapping occurred. The court determined that rescinding the agreement was in everyone’s best interest as opposed to long and expensive litigation. 
 

High School Music Teacher Has Qualified Immunity In "Glee" Copyright Case

Tresona Multimedia v. Burbank High School, 16-cv-04781 (C.D. Cal. Dec. 22, 2016).

In a case involving high school choir performances of four songs, the Court finds that the music director was protected by "qualified immunity" from the plaintiff's copyright infringement claims.  Additionally, the Court found that the plaintiff lacked standing to sue for copyright infringement with respect to three songs; and as to the fourth song at issue, summary judgment was denied due to questions of fact concerning the statute of limitations defense.

As to standing, the plaintiff's rights derived from less than 100% owners of the songs and under 9th Circuit law the plaintiff did not have exclusive rights in the songs and therefore lacked standing.  As to the three year statute of limitations, the Court found a question of fact whether the plaintiff should have known of the infringing activity.

Lastly, as to qualified immunity the Court recognized there was no binding 9th Circuit law on the matter (though some other district courts had considered the issue).  Deciding that the doctrine applied, the Court found that as a matter of law the music teacher was protected.

3rd Cir. Affirms Judgment For Usher In "Bad Girl" Copyright Dispute

Marino v. Usher, No. 15-2270 (3rd Cir. Dec. 8, 2016).

Songwriter-plaintiff appealed the lower court's grant of summary judgment to Usher (and the other defendants) in a copyright action involving the song "Bad Girl."  The 3rd Circuit affirmed the finding that the claim must fail because the song was jointly written by plaintiff and certain of the defendants (Guice and Barton).  "The district court correctly held that co-authors of a joint work are each entitled to undivided ownership and that the joint owner of a copyright cannot sue his co-owner for infringement.  The court reasoned that, without direct infringement, there can be no vicarious infringement, hence the derivative song, Bad Girl, did not infringe on Marino’s
rights. The district court also concluded that Guice and Barton conveyed a valid nonexclusive
license for the song to the other defendants."

Additionally, the Court held that the state-law claims were pre-empted, that the plaintiff had granted an implied license, that his sound recording claims failed because there was no copyright registration for the sound recording, and that defendant's were properly granted costs/fees (in a 90% reduced amount based upon plaintiff's financial circumstances).  Lastly, the Court affirmed the financial sanction entered against Plaintiff's lawyer for improperly communicating with an unrepresented defendant in violation of the Pennsylvania rules of professional conduct.

BMI Consent Decree Does Not Bar Fractional Licensing, Despite DOJ's Views

U.S. v. BMI, No. 64-3787 (S.D.N.Y. Sep. 16, 2016) [Doc. 100].

Judge Stanton of the Southern District of New York holds that the BMI Consent Decree neither bars fractional licensing nor requires full-work licensing, contrary to the Justice Department's recent statement that the PROs are required to offer full-work licenses.  BMI brought its application for construction of its Consent Decree based upon 8/4/16 of the Justice Department's statement, and the Court held that nothing in the Consent Decree supports the Justice Department's view that full-work licensing is required.  The Consent Decree "does not address the possibilities that BMI might license performances of a composition without sufficient legal right to do so, or under a worthless or invalid copyright, or users might perform a music composition licensed by fewer than all of its creators."  Continuing, Judge Stanton stated "The Consent Decree does not regulate the elements of the right to perform compositions. Performance of a composition under an ineffective license may infringe an author's rights under copyright, contract or other law, but it does not infringe the Consent Decree, which does not extend to matters such as the invalidity or value of copyrights of any of the compositions in BMI's repertory"

Cruz Campaign Can't Avoid Copyright Infringement & Contract Claims

Leopona, Inc. et al. v. Cruz for President, No. 00658-2016 (W.D. Wash. July 11, 2016).

In a case involving former presidential candidate Ted Cruz's use of two licensed songs in YouTube videos supporting his campaign, the Court denied Cruz's motion to dismiss the plaintiffs' copyright infringement and breach of contract claims.  The breach of contract claim, which included a $25,000 liquidated damages provision, arose out of a license agreement that restricted use of the licensed song for political purposes.  The court held that the licensor's claim was not pre-empted by section 301 of the Copyright Act because the licensor was not the copyright owner (it was a distribution and licensing service), and the actual copyright owners (the song's authors) had not brought breach of contract claims -- they had brought only copyright infringement claims.  Lastly, on the claim for an injunction, the Court held that it was not moot due to suspension of the Cruz campaign because the YouTube videos were still available online.

ASCAP Settles DOJ Action Concerning Exclusive Licensing Agreements

USA v. ASCAP, No. 41-1395 (S.D.N.Y. May 12, 2016) (Doc. 749).

The Dep't of Justice and ASCAP have settled a claim concerning approximately 150 ASCAP agreements that granted the performing rights organization exclusive licensing rights allegedly in violation of an earlier consent decree.  The settlement prohibits ASCAP form entering into any agreement under which a songwriter, composer, or music publisher grants ASCAP the exclusive right to license the right of public performance in musical works, and further limits the licensing activities of board members and music publishers.  Further, ASCAP agreed to pay $1.75 million.

Cars' Audio Technology May Require Royalty Payment

Alliance of Artists &Rec. Cos. v. Gen. Motors Co. et al., No. 14-1271 (D.D.C. Feb. 19, 2016).

Audio technology that has been installed in a number of car models since 2008 may require payment of royalties under the Audio Home Recording Act of 1992 (17 USC 1001 et seq.), holds the court in denying the defendant car manufacturer's motion to dismiss.  The Audio Home Recording Act of 1992 requires manufacturers, importers, and distributoers of "digital audio recording devices" to incorporate copying control technolgy into their devices and pay a set royalty amount for each device.  The statute has been referred to as a "compromise" and at the time of its adoption then-current technology was much different than it is today (DAT tapes were the issue then).  On defendants' Rule 12 motions to dismiss, the Court undertook an extensive and detailed analaysis of the statutory text and agreed with Defendants' asserting that a "digital audio recording device" must be capable of producing "digital audio copied recordings;" that these recordings are a type of "digital music recording;" and that the device's output must therefore comport with the definition of a digital music recording that is establisehd at 17 USC 1001(5).  However, the Court also concluded that the plaintiff's complaint sufficiently alleged facts that, if true, could plausible demonstrate that Defendants' devices are in violation of the statute.

Band Member May Sue As Third-Party Beneficiary Of Contract Between Record Label and Suspended Loan-Out Company

Bozzio v. EMI Group Ltd. et al., No. 13-15685 (9th Cir. Jan. 26, 2016).

The 9th Circuit held that the front-woman of the '80s new-wave band "Missing Persons" could sue the band's record label for breach of contract (whether proper royalty rates were paid) as a third-party beneficiary of the contract between the record label and the "loan-out" company created by the band, even though the State of California had suspended the corporation's status for failure to pay certain taxes.  "The parties have not cited, and we have not found, any California case holding that a third-party beneficiary cannot sue the promisor for breach of contract when the promisee is a suspended corporation."  Additionally, interpreting a related Artist Declaration, the 9th Circuit held that plaintiff did not necessary waive the benefits of the contract under the provision requiring band-members to look to the loan-out company (not the label) for the payment of royalties.  Language in the Loan-Out Agreement was in tension with language in the artist declaration.  Accordingly, the district court -- which had dismissed with prejudice believing that amendment would be futile -- was reversed.

Village People Claims Dismissed On Res Judicata Grounds

Willis v. Scorpio Music, No. 15-cv-1078 (S.D. Cal. order dated Jan. 19, 2016).

In a second lawsuit concerning ownership of various "Village People" compositions, the district court dismissed a 50% owner's claims based on defendant's false claim of authorship, breach of fiduciary duty, and vicarious copyright infringement.  As to the false ownership claims, the Court held that plaintiff was barred by the doctrine of res judicata from brining claims that he could have brought in the earlier action.  As to the vicarous copyright infringement claim, the court held that the defendant had the right to license the composition and thus there was no infringement.  Lastly, the court held that co-owners of a copyright -- though they have a duty to account -- do not have fiduciary duties to one another.

Happy Birthday Case Settles Shortly After Plaintiffs Granted Leave To Expand Class Period Back To 1949

Good Morning To You Productions v. Warner/Chappel, No. 13-4460 (C.D. Cal. Dec. 7 & 8, 2015).

In the "Happy Birthday To You" case, the Court granted Plaintiffs' motion to amend the complaint to expand the proposed class period back to 1949.  Shortly thereafter, an announcement was made that a settlement had been reached.

Big Pimpin Suit Continues With Triable Issues Of Fact

Fahmy v. Jay-Z et al., No. 2:07-cv-05715 (C.D. Cal. May 27, 2015).

In the copyright infringement action concerning Jay-Z's song Big Pimpin', the Court denied plaintiff's motion for partial summary judgment seeking to dismiss defendant's "license" affirmative defense.  The Court concluded that there were triable issues of fact as to whether plaintiff conveyed any performance rights he owned in the infringed song.  The Court also concluded that there was a genuine dispute of material fact as to whether defendants received a license to publicly perform the song as part of Big Pimpin' through their asserted chain of title or as a result of BMI blanket licenses.

Second Circuit Affirms ASCAP Rate Court In Pandora Dispute Over Partial Withdrawals And License Rate

Pandora Media, Inc. v. ASCAP, 14-1158-cv(L) (2d Cir. May 6, 2015).

The Second Circuit Court of Appeals affirmed the ASCAP "rate court's" decision: (1) granting Pandora summary judgment that the ASCAP consent decree unambiguously precludes partial withdrawals of public performance licensing rights; and (2) setting the rate for the Pandora‐ASCAP license for the period of January 1, 2011 through December 31, 2015 at 1.85% of revenue.

ASCAP contended that publishers may withdraw from ASCAP its right to license their works to certain new media music users (including Pandora) while continuing to license the same works to ASCAP for licensing to other users.  The appellate court agreed with the district court’s determination that the plain language of the consent decree unambiguously precludes ASCAP from accepting such partial withdrawals. Also, the Court found that under the circumstances, it was not clearly erroneous for the district court to conclude, given the 6evidence before it, that a rate of 1.85% was reasonable for the years  in question.

License Agreements Preclude Copyright Infringement Claim; 6th Circuit

Murphy v. Lazarev, No. 14-5028 (6th Cir. Oct. 17, 2014) [File Name: 14a0790n.06]

The Sixth Circuit affirmed dismissal of copyright infringement and breach of contract claims by two American co-authors of a song, Almost Sorry, against a Russian pop artist because there were numerous licensing agreements that granted defendant sweeping permission to record and perform the song.  First, the Court held that the defendant did not waive his affirmative defense of "license," even though defendant did not file an answer to the amended complaint, because the plaintiffs were on notice of his affirmative defenses from an early stage in the lawsuit (when defendant filed a pro se letter in response to the complaint), thus satisfying the purposes of Rule 8.  Second, the Court held that defendant had a valid express sub-license to record the song until 2013.

SESAC Can't Escape Antitrust Claims

Meredith Corp. v. SESAC LLC, No. 09 Civ. 9177 (PAE)., 2014 BL 57263 (S.D.N.Y. Mar. 03, 2014).


The issue in this putative class action is whether SESAC's licensing practices since 2008 have violated federal antitrust law. Plaintiffs are groups of local television stations.  They sue SESAC aand allege that, in practice, they must obtain licenses for some music in SESAC's repertory. That is because SESAC's repertory is large and includes works so ubiquitous that some are inevitably embedded in shows that the stations acquire and wish to air.  Plaintiffs contend that, since 2008, SESAC, with its affiliates' assent, has taken steps to make illusory any alternative to the blanket license it sells, which conveys the right to play the music of all SESAC affiliates.  Having insulated this product from competition and forced local television stations to acquire it, plaintiffs allege, SESAC has set an exorbitant price for that "all or nothing" license, even though stations have no interest in buying the rights to the entirety of SESAC's repertory. Plaintiffs assert that SESAC and its affiliates have thereby violated § 1 of the Sherman Act, 15 U.S.C. § 1, by combining to unlawfully restrain trade; and § 2 of the same Act, 15 U.S.C. § 2, by conspiring to monopolize the market for the performance rights to the musical works within SESAC's repertory.  Plaintiffs also assert a monopolization claim against SESAC under § 2.

SESAC moved for summary judgment. The Court denied the motion as to all three counts, except that on the § 1 claim, the Court granted summary judgment to defendants in two ways that narrowed that claim. Specifically, the Court rejected plaintiffs' (1) per se theory of liability; and (2) claim of an agreement to restrain trade among all 20,000-plus SESAC affiliates, as opposed to among only the far smaller subset (under 1%) of affiliates who were party to a supplemental affiliation agreement with SESAC.

The Court first reviewed the history of antitrust litigation involving the PROs' licensing practices. The Court then considered the § 1 claim, assessing whether (1) the conduct plaintiffs assail is amenable to per se condemnation; (2) there is adequate evidence of concerted action among SESAC's affiliates to restrain trade; and (3) the evidence would support a conclusion that the anti-competitive effects of SESAC's conduct outweighed its pro-competitive tendencies, i.e., whether a jury could find harm to competition. The Court then considered the § 2 claims, addressing first the monopolization claim and then the claim of a conspiracy to monopolize.

Cross-Border Licensing In Europe One Step Closer To Reality

BNA reports that the European Parliament approved (by a vote of 640-18 with 22 abstentions) a system that will allow online music services to get licenses that cover multiple EU member states.  Currently, licensing rights must be obtained in each of the EU member states.  Further approval is required before becoming law.

BMI Rate Court Holds Withdrawals Of Digital Rights Ok

BMI v. Pandora Media, Inc., 2013 ILRC 3301, No. 13-cv-4037 (S.D.N.Y. Dec. 19, 2013).

The BMI rate court (District Court Judge Louis Stanton) holds that when BMI no longer is authorized by music publisher copyright holders to license their compositions to Pandora (and other New Media Services), those compositions are no longer in BMI's "repertory" and BMI can no longer license them to Pandora or any other applicant.  Accordingly, the Court denied Pandora's motion for partial summary judgment.  The holding is contrary to the ASCAP rate court's finding.

The BMI court focused on section 106 of the Copyright Act and a copyright owners right to "license, or not license, the performance of their compositions as they see fit.  In the exercise of that right the publishers have agreed with BMI to withdraw their New Media performance licensing rights from Pandora and New Media Services.  That is well within their power as copyright holders."  The Court held that songs that publishers have withdrawn New Media licensing rights are not in BMI's new media repertory and therefore BMI cannot deal in or license those compositions to anyone.  "BMI's repertory consists of compositions whose performance BMI 'has the right to license or sublicense.'"

Notably (in fn. 4), the BMI rate court acknowledged that its finding is contrary to that of the ASCAP rate court (Judge Cote).  The BMI court stated: "The inconsistency is just a difference of view of the power of the application of Section 106 and the copyright holders' rights under the Copyright Law, and will be resolved by the Court of Appeals for the Second Circuit or decree amendment procedures, or managed commercially."

EMI and Sony Permitted To Intervene In ASCAP/Pandora Rate Court Matter

In re Petition of Pandora Media, Inc. [related to US v. ASCAP]; No. 1941-cv-01395 (S.D.N.Y. filed Dec.13, 2013) [Doc. 733].

EMI and Sony moved to intervene in the Pandora rate-court proceeding (ASCAP) after the Court's summary judgment opinion issued on September 17, 2013 in which the Court held that the Second Amended Final Judgment ("AFJ2") prevented ASCAP from withholding from Pandora the rights to compositions in its repertory while licensing those compositions to other users. In re Pandora Media, Inc., 12 Civ. 8035 (DLC), 2013 WL 5211927 (S.D.N.Y. Sept. 17, 2013) (“September 17 Opinion”). The summary judgment practice was precipitated by putative publisher partial withdrawals of rights from ASCAP.

The Court analyzed Rule 24 of the Federal Rules of Civil Procedure.  It considered whether the publishers' motion to intervene was timely (mixed finding), and whether the publishers possess an interest related to the subject of the action (yes).  Ultimately, the Court granted the motion to intervene on the condition that the Publishers "may not raise new arguments on appeal that were not raised by ASCAP, with the exception of the Section 106 of the Copyright Act argument".

Aimee Mann Copyright Claim Survives Dismissal Based On Terminated License

Aimee Mann v. MediaNet Digital, Inc., et al., No. 2:13-cv-05269 (C.D. Cal. filed 11/27/13) [Doc. 26].

Plaintiff Aimee Mann (“Mann”), a songwriter and recording artist, brought this copyright infringement action against Defendant MediaNet Digital, Inc. (“MediaNet”), f/k/a MusicNet, a distributor of streaming music, online radio, and music downloads to companies like Songza, Stub Hub, Soundtracker, MTV, Yahoo Music, and Time Warner Cable (among others).  MediaNet moved to dismiss the copyright claims and Plaintiff's claim for rescission of a license agreement.  The Court denied the motion to dismiss the copyright claims, but dismissed the rescission claim with leave to replead.

On the copyright claims, MediaNet argued that Mann’s claim for direct infringement should be dismissed because: (i) MediaNet had a valid license at all relevant times and therefore cannot be liable for copyright
infringement, and (ii) the License Agreement was not terminated on December 4, 2006 as a matter of
law.  The Court found that MediaNet did not have a statutory compulsory license (17 U.S.C. 115).  The Court also found that the 2003 License Agreement was no longer in effect.  Relying on New York General Obligations Law § 5-903, Mann asserted that because MediaNet failed to alert her to the existence of the auto-renewal provision, the License Agreement was not automatically renewed after its initial term ended on December 4, 2006.  The Court agreed that the auto-renewal of the License Agreement is unenforceable under § 5-903. As such, Mann’s allegation that MediaNet exploited her pre-December 5, 2003 and post-December 4, 2006 compositions after the initial term of the License Agreement stated a claim for copyright infringement.  The Court further found that Mann had stated claims for secondary copyright liability (contributory, inducing and vicarious liability).

However, Mann's claim for rescission was dismissed with leave to replead.  The Court found rescission is an equitable remedy and that that Mann had failed to explain why the non-payment of royalties could not be adequately remedied by monetary damages. "This failure is fatal to her rescission claim."

9th Cir. Orders Trial Over Bob Marley Licensing Rights

Rock River Commc'n v. Universal Music Group, No. 11-57168 (9th Cir. filed 9/18/13) [Decision]

This case concerns licensing rights for early Bob Marley recordings.  The absence of legal documentation has led to confusion as to who owns licensing rights for the recordings.

The 9th Circuit found that the chain of title to the recordings, by both sides claiming rights, was "spotty."  Therefore, the case was remanded for trial.