2d Cir. Addresses DMCA "Repeat Infringer" Policy In MP3Tunes Appeal; Finds Only A Single Statutory Damages Award For Infringed Composition & Sound Recording; Addresses Many Other Copyright Law Issues

EMI Christian Music et al. v. MP3Tunes, No. 14-4369 (2d Cir. Oct. 25, 2016).

In the MP3Tunes appeal, the Second Circuit vacated the District Court’s grant of partial summary judgment to the defendants based on its conclusion that MP3tunes qualified for safe harbor protection under the DMCA because the District Court applied too narrow a definition of “repeat infringer”; (2) reversed the District Court’s grant of judgment as a matter of law to the defendants on claims that MP3tunes permitted infringement of plaintiffs’ copyrights in pre‐2007 MP3s and Beatles songs because there was sufficient evidence to allow a reasonable jury to conclude that MP3tunes had red‐flag knowledge of, or was willfully blind to, infringing activity involving those categories of protected material; (3) remanded for further proceedings related to claims arising out of the District Court’s grant of partial summary judgment; and (4) affirmed the judgment in all other respects (relating to statutory damages for sound recordings and compositions, cover art liability, respondeat superior liability for MP3Tunes executives, personal jurisdiction, vicarious and contributory liability, statutory damages for singles & compilations, and punitive damages).

The plaintiff record labels and music publishers argued that MP3tunes never reasonably implemented a repeat‐infringer policy.  In addressing this argument, the Second Circuit answered two questions: first, whether certain MP3tunes users qualified as “repeat infringers”; and second, if so, whether MP3tunes reasonably implemented a policy directed at them.  As to the first question, the Second Circuit held "all it takes to be a 'repeat infringer' is to  repeatedly upload or download copyrighted material for personal use."  (Emphasis in original)  Having answered that question, the Court then found that MP3tunes did not "even try to connect known infringing activity of which it became aware 2through takedown notices to users who repeatedly created links to that infringing content in the sideload.com index or who copied files from those links...A jury could reasonably infer from that evidence that MP3tunes actually knew of specific repeat infringers and failed to take  action "

The Court also, notably, addressed statutory damages and whether it was improper to make only a single award where there are different owners of the copyright in the sound recording and in the composition.

 In our view, then, Congress did not intend for separate statutory damages awards for derivative works such as sound recordings, even when the copyright owner of the sound recording differs from the copyright owner of the musical composition.    In sum, the District Court’s decision to permit only one award of statutory damages for the musical composition and corresponding sound recording comports with both the plain text and the legislative history of the Copyright Act.  We therefore affirm that part of the judgment.

In addition to attacking the District Court’s exercise of personal jurisdiction over him, the individual defendant (MP3Tune's CEO) argued that there was insufficient evidence to support the jury’s finding that he was vicariously or contributorily liable for MP3tunes’s infringements.  The Second Circuit disagreed,

Jeremih Can't Avoid Photog's Secondary Copyright Infringement Claims & Model's Publicity Claim Over Album Cover

Rams v. Def Jam Recordings, No. 15-8671 (S.D.N.Y. Aug. 16, 2016).

Artist Jeremih's Rule 12 motion to dismiss the plaintiffs' secondary copyright infringement claim, and all of the Defendants' motion to dismiss the right of publicity claim under California law, were denied.  The case involves the use of a photo on an album cover on the hit single "Don't Tell 'Em"; the plaintiff photographer alleged copyright infringement against the artist and label, and the plaintiff model alleged violation of her right of publicity.

As to the contributory infringement claim against the defendant artist, the Court held that the photographer stated a claim.  "Drawing all reasonable inferences in favor of Plaintiffs, it is plausible that ... the recording artist, whose work is distributed by UMG under the Def Jam label, would have reason to know of the infringing use of the Subject Image on his own album cover."

As to the vicarious infringement claim against the defendant artist, again the Court held that the photographer stated a claim.  "Plaintiffs state a plausible claim that, as a recording artist...[he] had the right and ability to supervise the selection of cover artwork for his own 'Don't Tell 'Em' single."  Further, the Court found that the complaint sufficiently alleged that the artist benefited financially from the infringement.

As to the model's right of publicity claim, the Court first addressed whether the law of Denmark applied (where the model resides) or whether instead California law applies.  California's choice of law rules applied because the case had been transferred to New York from California district court.  Accordingly, the Court applied the "governmental interest" test under California law, and held that California law should apply.  "Under California law, Rams has sufficiently alleged that Defendants knowingly distributed and profited from the use of her image throughout California without her consent, violating her right of publicity."

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.

Record Company Copyright Claims Against Amway Survive Dismissal

Alticor Inc. v. UMG  Recordings, Inc., No. 6:14-cv-542 (M.D. Fla. Dec. 10, 2015).

In a complex dispute between mutliple record companies and Amway concerning alleged direct, vicarious and contributory infringement of pre- and post-'72 sound recordings in over 1,000 videos, the Court dismissed Amway's Rule 12(b)(6) motion to dismiss the record companies counter-claims.  First, the Court found that the record companies had adequately alleged violations of their exclusive right of public performance.  Amway argued that the "public performance right" applicable to musical compositions and other works was inapplicable to sound recordings; the Court rejected that argument.  Second, the Court found that even though the Copyright Act does not conver a "making available" right, the act of making a work available for use of a direct infringer was relevant to the record companies' indirect infringement claims.  Third, the Court agreed with Amway that Florida common law does not create a public performance right for pre-72 recordings, but nonetheless held that it would not grant Amway partial relief under Rule 12(b)(6).

Cox Communications Not Protected By DMCA Safe Harbor In Bit-Torrent Case

BMG Rights Management v. Cox Communications, no. 14-1611 (E.D. Va. Dec. 1, 2015).

In an action by the putative owners of 1,400 musical compositions against an internet service provider (Cox) for contributory and vicarious liability based on its users Bit Torrent infringement, the Court held inter alia that the ISP was not protected by the DMCA safe-harbor because it did not terminate access of repeat infringers under appropriate circumstances.  The Court found that defendant did not implement a repeat infringer policy before 2012, and after 2012 it did not reasonably implement its policy.  Thus, if Plaintiff is successful at trial, it will not be limited in the remedies it seeks.

Other issues the Court addressed was whether Plaintiff had standing (the copyright registrations listed Plaintiff, its predecessor, someone else, or the works were purchased).  The Court further found questions of material fact, 1) whether there is evidence of direct infringement by third parties; (2) whether there is evidence of Cox’s contributory infringement; (3) whether there is evidence of Cox’s vicarious liability; and (4) whether BMG failed to mitigate its damages.  Lastly, the Court found that the "unclean hands" defense failed as a matter of law.

Grooveshark And Its Officers Liable For Copyright Infringment Based On Direct Uploads By Officers And Employees

UMG Recording, Inc. v. Escape Media Group, Inc. No. 1:11-cv-08407-TPG (S.D.N.Y. filed Sep. 29, 2014) [Doc. 100].

This case involved "Grooveshark" and the direct upload of plaintiffs' copyright music by defendant's officers and employees.  The Court granted plaintifss' motion for spoliation sanctions, and granted plaintiffs' summary judgment on nearly all of their claims.  As to spoliation sanctions, the Court found that defendants acted with a culpable state of mind when they deleted user upload information and relevant source code.  Based on the spoliation, the Court found that an individual defendant directly infringed plaintiffs' copyright recordings; however, the Court did not agree with plaintiffs' request that it find 10,000 instances of infringement and instead found that plaintiffs were entitled to judgment as a matter of law that that defendant illegally uploaded a small percentage (144) of the recordings.  Similarly, the Court found that the other employees uploaded a much smaller percentage  of additional files than requested by plaintiffs.

Turning to the summary judgment motion, the court first found that a certain expert report was admissible.  The Court then addressed defendants' affirmative defenses, and held that the claims were not barred by the statute of limitations, and that defendants' could not set forth a claim for equitable estoppel (or laches or waiver).  On plaintiffs' copyright claims, the Court found that plaintiffs established that defendants illegally uploaded 5,977 sound recordings (plaintiffs had requested a much higher number).  Accordingly, defendants were directly liable for infringement of plaintiffs' distribution, reproduction and public performance rights.  Further, Escape was liable for vicarious and inducement infringement because it had the ability to control its employee's infringing activity and instructed its employees to upload as many files as possible to Grooveshark as a condition of their employment.  Escape also materially contributed to the infringing employee uploads, and the Court granted plaintiffs summary judgment on their claim for contributory infringement.  The corporate officers were also liable., jointly and severally with the company.

6th Circuit: Bar Owner Liable For Vicarious Copyright Infringement

Broadcast Music, Inc. v. Meadowlake, Ltd. et al., No. 13-3933 (6th Cir. June 6, 2014) [decision].

The Sixth Circuit holds that an individual, who owned 95% a limited liability company that owned a restaurant that offered dancing and live music, was liable for vicarious copyright infringement (public performance right).  As the company’s chief (95%) owner and the restaurant’s ultimate decision maker, the individual defendant had the right and ability to supervise the infringing performances.  According to the 6th Circuit, "This case indeed falls within the heartland of vicarious liability."  The Court rejected the defendant's argument that his son was the day-to-day manager of the restaurant, that he claimed ignorance of the infringement, and that ownership via a limited liability company shielded liability.  "Either way, Roy profited from infringement at his restaurant while refusing to exercise his right to stop it. And so either way, Roy remains vicariously liable."

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."

Reconsideration in MP3Tunes Case

Capitol Records, Inc. v. MP3Tunes, LLC, No. 07-cv-9931 (S.D.N.Y. filed May 14, 2013) [Doc. 368].

All parties moved for reconsideration of the Court's October 25, 2011 order (821 F. Supp. 2d 627), springing from the 2nd Circuit's decision in Viacom Int'l v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012).  Plaintiff's motion was granted in part and denied in part: plaintiff's motion was granted as to the issue of willful blindness and "red flag" knowledge, and denied as to the inducement of copyright claim.  Defendant's motion regarding direct copyright infringement was granted in part and denied in part.  Defendant's motion for reconsideration regarding infringement of cover art, regarding personal jurisdiction and summary judgment as to his vicarious liability was denied.

There is an interesting discussion of "red flag" knowledge of infringement, under which service providers can lose the protection of the DMCA safe harbors if they have actual or apparent (i.e., "red flag") knowledge of infringing conduct.

9th Cir. Affirms Public Performance Liability Against Restaurant

Range Road Music, Inc. v. East Coast Foods, Inc., No. 10-55691 (9th Cir. filed Jan. 12, 2012).

The 9th Circuit affirmed the district court's grant of summary judgment and legal fees in favor of plaintiffs (ASCAP) against defendant (restaurant/lounge). Defendant was vicariously liable for copyright infringement related to the public performance, both by a live band and by a CD, of copyrighted songs. Plaintiff's proof was an investigative report by a visitor to the premises. The report did not need to be by a certified expert because "identifying popular songs does not require 'scientific, technical, or other specialized knowledge'.” The Court rejected defendant's argument that a showing of substantial similarity was required for a public performance case. The Court properly awarded attorney's fees to Plaintiff.

ReDigi Sued For Copyright Infringement

Capital Records Inc. v. ReDigi Inc., No. 1:12-cv-00095 (SDNY filed 1/6/2012).

Plaintiff alleges copyright infringement arising from defendant's contributory, vicarious, and inducement of the willful and systemic use of plaintiff's original sound recordings on defendant's "ReDigi" music service. Defendant is an internet business whose stated purpose is to help consumers buy and sell "used" digital music files. Plaintiff seeks $150,000 per infringement (maximum statutory damages for willful infringement).

Copyright Case Dismissed Against 50 Cent Over Crime Story/Book

Winstead v. Jackson, et al., No. 2:10-cv-05783 (D.N.J. Sept. 20, 2011) [Doc. 45].

In this copyright infringement action, Plaintiff alleges that Defendants’ movie and companion album, both entitled Before I Self Destruct, infringe upon Plaintiff’s copyright in his book, The Preachers Son - But the Streets Turned Me Into a Gangster. Plaintiff is the author and sole owner of the copyright for the Book. Plaintiff alleges that Defendants infringed upon the
copyright of the Book by publishing and selling the Movie and the Album, both of which
Plaintiff contends derive their content from the Book.

The Court granted defendants' motion to dismiss for failure to state a claim, under Fed. R. Civ. P. 12(b)(6). Plaintiff avers that the film duplicates the generalized theme and story
of the book and amounts to actionable copying. "However, general plot ideas and themes lie in
the public domain and are not protected by copyright law." Continuing:
There is no doubt that the Book and Film do share similar characters, themes, as well as a similar setting. However, this s haring of common features is only natural since both works feature a protagonist who has a difficult upbringing and turns to a life of violence and street crime, a story which has long ago been part of the public domain and which has been the subject of numerous movies and television shows. Thus, both works may properly contain gang life in inner-city New Jersey, characters spending time in jail, the search for an ex-girlfriend upon release from prison, making love in the shower, obtaining money through criminal activity, purchasing fancy clothes and accessories with the proceeds of crime, shoot-outs, murder, and the loss of a parent.

The Court further held that commonly used words, phrases and cliches used in both the book and movie/album are not protectable. Also, Plaintiff's state common law claims were pre-empted by the Copyright Act.

Lastly, because the Court held that Defendants did not infringe on Plaintiff’s copyright, Plaintiff’s claims of vicarious and contributory infringement fail since they hinge on a preliminary finding of direct infringement.

"Work" Defined For Statutory Damages Against Limewire

Arista Records LLC v. Lime Group LLC, 06 CV 5936 (KMW), NYLJ 1202489939713, at *1 (SDNY, Decided April 4, 2011)

The Court had granted summary judgment in favor of Plaintiffs on their claims against Defendants LimeWire LLC ("LW"), Lime Group LLC ("Lime Group"), and Mark Gorton (collectively, "Defendants") for secondary copyright infringement. The Court found that Defendants had induced multiple users of the LimeWire online file-sharing program ("LimeWire") to infringe Plaintiffs' copyrights. The litigation is now in the damage phase, with a trial on damages scheduled. Plaintiffs identified approximately 11,205 sound recordings that had allegedly been infringed through the LimeWire system. Of those, approximately 9,715 are sound recordings as to which Plaintiffs have elected to seek statutory damages under Section 504(c)(1) of the Copyright Act.

On March 10, 2011, the Court held that Plaintiffs are entitled to a single statutory damage award from Defendants for each "work" that was infringed by a direct infringer on the LimeWire system. The parties now seek a resolution of a threshold legal dispute regarding what constitutes a "work" as to which Plaintiffs can recover a statutory damage award.

The Court holds that both an album, and a sound recording that Plaintiffs issued as an individual track may constitute a "work" infringed. Accordingly, Plaintiffs are entitled to a statutory damage award for each sound recording that was infringed on the LimeWire system during the time period that Plaintiffs made that sound recording available as an individual track. However, for those sound recordings that Plaintiffs issued only as part of an album, Plaintiffs can recover only one statutory damage award for that album, not for each individual sound recording.

EMI Sues Video Sharing Website

EMI has filed two related complaints, one by its labels and the other by its publishing units, against the video-sharing website Vimeo .

Capitol Records, LLC v. Vimeo, LLC
, No. 09 CV 10101-DAB (S.D.N.Y. complaint filed Dec. 10, 2009); and, EMI Blackwood Music, Inc. v. Vimeo, LLC, No. 09 CV 10105 (S.D.N.Y. complaint filed December 10, 2009).

Both complaints claim direct, contributory and vicarious copyright infringement, and inducement to infringe. The Capitol complaint includes misappropriation and unjust enrichment claims.


EMI Sues Seeqpod & Favtape.com

Capitol Records LLC et. al. v. Seeqpod, Inc., No. 09 cv 1584 (S.D.N.Y. filed 2/20/09).

"The Seeqpod site and service are designed to, and do, encourage and facilitate the search for, and the unlawful production, distribution and public performance of, copyrighted sound recordings and the copyrighted compositions embodied therein. In response to a user's query for a particular recording or recording artist, SeeqPod's proprietary algorithims - which SeeqPod's CEO and founder, Kazian Franks refers to as SeeqPod's "targeted crawling system" - crawl the Internet specifically to locate and index unlawful MP3 files of copyrighted sound recordings and compositions. SeeqPod then formats and presents the results as direct links to those unlawful files. A click on any one of these links will automatically cause the recording and composition to be reproduced and performed, via "streaming" technology, on and via SeeqPod's own MP3 software "player."

Paragraph 48.