Judge Dismisses Jersey Boys Suit Against Frankie Valli After Trial

Corbello v. DeVito, 08-cv-867 (D. Nev. Nov. 17, 2016).

The widow of a ghostwriter who had been engaged by a member of the Four Seasons to write an autobiography (the work), lost her copyright infringement case against Frankie Valli alleging that he and the other members of the band wrongfully misappropriated the work in making the hit musical "Jersey Boys."  The evidence at trial was un-rebutted that neither Valli nor band-mate Bob Gaudio ever saw the work until their depositions.  The Court further found that all claims for willful infringement failed as a matter of law.

Questions Whether LiveNation Willfully Infringed Run-DMC Photos; 9th Cir.

Friedman v. Live Nation Merch., No. 14-55302 (9th Cir. Aug. 18, 2016).

In a copyright dispute over the use of photographs that the plaintiff took of the hip hop group Run-DMC, defendant Live Nation stipulated that it infringed the plaintiff photographer's copyrights when it used his photos without his authorization on t-shirts and a calendar.  Before the 9th Circuit was the question of whether there was sufficient evidence in the record to permit a jury to conclude that Live Nation committed willful copyright infringement, making it liable for additional damages under 17 U.S.C. § 504(c)(2); whether a jury could conclude that Live Nation knowingly removed copyright management information (“CMI”) from the photographs in violation of 17 U.S.C. § 1202(b) [the DMCA]; and whether the plaintiff could recover statutory damages awards under section 504 of the Copyright Act measured by the number of retailers who purchased infringing merchandise from Live Nation, even though the plaintiff photographer did not join those retailers as defendants in his suit.

The 9th Circuit held: (1) that there was a triable issue of fact as to whether Live Nation’s infringement was willful, and that the district court therefore erred in granting summary judgment to Live Nation on willfulness; (2) the plaintiff photographer could prevail upon a showing that Live Nation distributed his works with knowledge that copyright management information had been removed, even if Live Nation did not remove it, and accordingly summary judgment should not have been granted because there was a triable issue of fact as to whether Live Nation distributed the photographs with the requisite knowledge; and (3) the district court correctly held that the plaintiff photographer was limited to one award per work infringed by Live Nation because he did not name any of the alleged downstream infringers as defendants in the case ("A plaintiff seeking separate damages awards on the basis of downstream infringement must join the alleged downstream infringers in the action and prove their liability for infringement. ").  Notably, on third question involving downstream infringers, the 9th Circuit rejected a "mass marketing" exception that some lower courts had adopted.

DMCA Safe Harbor Applies To Pre-1972 Sound Recordings & Plaintiffs Have Burden Of Proving Red-Flag Knowledge; 2d Cir.

Capitol Records, LLC v. Vimeo, No. 14/1048 (2d Cir. June 16, 2016).

The Digital Millennium Copyright Act (DMCA) safe harbor (section 512 of the Copyright Act) applies to pre-1972 sound recordings and protects service providers from infringement liability under state copyright laws, holds the Second Circuit on an interlocutory appeal in a copyright infringement action brought by record labels against Vimeo.  Further, the Court held that the mere fact that a video contains all or virtually all of a “recognizable,” copyrighted sound recording and was viewed in some fashion by a service provider’s employee is insufficient to prove knowledge or red flag knowledge of infringement; and further that the record company plaintiffs' evidence was insufficient to support the imputation of knowledge to Vimeo through the theory of willful blindness.

On the safe harbor question, the Second Circuit found that "A literal and natural reading of the text of § 512(c) leads to the conclusion that its use of the phrase 'infringement of copyright' does include infringement of state laws of copyright. One who has been found liable for infringement of copyright under state laws has indisputably been found 'liable for infringement of copyright'.”  Further, "To construe § 512(c) as leaving service providers subject to liability under state copyright laws for postings by users of infringements of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute."  Construing the safe harbor of § 512(c) as not granting protection to service providers from liability for state-law-based copyright infringements would substantially defeat the statute’s purposes.  Accordingly, the 2nd Circuit vacated the district court's grant of summary judgment to Plaintiffs as to the availability of the DMCA safe harbor to Vimeo in relation to liability for infringement of pre-1972 sound recordings. 

On the "red flag" part, the 2nd Circuit addressed the shifting burdens of proof (plaintiff has the burden of proving red flag knowledge) and held that "A copyright owner’s mere showing that a video posted by a user on the service provider’s site includes substantially all of a recording of recognizable copyrighted music, and that an employee of the service provider saw at least some part of the user’s material, is insufficient to sustain the copyright owner’s burden of proving that the service provider had either actual or red flag knowledge of the infringement."  The Court then addressed several reasons why.  Accordingly, the Court held that Vimeo was entitled to summary judgment on those videos as to the red flag knowledge issue, "unless plaintiffs can point to evidence sufficient to carry their burden of proving that Vimeo personnel either knew the video was infringing or knew facts making that conclusion obvious to an ordinary person who had no specialized knowledge of music or the laws of copyright."

Lastly, the Court rejected the Plaintiffs’ argument that the district court erred in its ruling in Vimeo’s favor as to the Plaintiffs’ reliance on the doctrine of willful blindness.

Beastie Boys Awarded Attorneys Fees For Copyright Infringement, But Reduced Amount

Beastie Boys v. Monster Engergy, 1:12-cv-06065-PAE (SDNY filed 06/15/15) [Doc. 216].

After succeeding against Monster Energy Drinks at trial, the Court found that the Beastie Boys were entitled to attorney's fees for Monster's willful copyright infringement but not in connection with the Lanham Act violation, which the Court found was not "exceptional".  Additionally, the Court significantly reduced the attorney's fees recoverable to approximately $660,000, from the over $2 million requested.

Pre-Trial Evidentiary Rulings In Grooveshark Case

UMG Recordings, Inc. v. Escape Media Group, No.11-cv-8407 (SDNY filed 04/23/15) [Doc. 174].

In advance of a jury trial on statutory damages, the Court made a number of pre-trial evidentiary determinations on motions in limine.  Among its holdings as to what the parties could or could not introduce at trial, the Court held that defendants were precluded from offering argument or evidence contesting that their conduct was willful or in bad faith (the jury would be instructed that there was a cap of $150,000 per work, not $30,000), but defendants were permitted to present proof as to the degree and extent of their willfulness.  As to Defendants' argument that Plaintiffs could receive statutory damages for infringement of pre-1972 sound recordings (or that the Court had jurisdiction over such claims), the Court reserved decision.  The Court also made several rulings as to what evidence Defendants could introduce concerning their failure to mitigate damages defense (e..g, concerning settlement and future licensing negotiations, failure to make claims against other infringers, DMCA compliance

Bob Marley Heirs Succeed On Appeal In Merchandising Case

Fifty-Six Hope Road Music v. A.V.E.L.A., No 12-17502 (9th Cir. Feb. 20, 2015).

The 9th Circuit Court of Appeals affirmed judgment in favor of Bob Marley's heirs based on defendants' use of Bob Marley's image on t-shirts and other merchandise in a manner likely to cause confusion as to Plaintiffs' sponsorship of approval of the merchandise.  Additionally, the Court found that Defendants have waived several defenses by failing to properly raise them in the district court.  The appellate court also found that the lower court had not abused its discretion in determining defendant's profits and there was a sufficient evidence to find that defendants willfully infringed plaintiff's rights.  Nor did the lower court err in awarding plaintiffs their attorney's fees, as plaintiffs were the prevailing parties, and defendants' conduct was willful.  Plaintiffs also succeeded on their tortious interference claims because Plaintiffs' licensing agent testified that one of Plaintiffs' licensees lost an order intended for Wal-Mart because defendant sold t-shirts there. Defendants did succeed, however, in dismissing the right of publicity claim because under Nevada law a publicity right successor waives its publicity rights when it fails to timely register its rights.

"Whomp! (There It Is)" $2 Million Jury Award Affirmed

In re: Isbell Records, Inc. (Isbell v. DM Records), No. 13-40878 (5th Cir. Dec. 18, 2014).

The Fifth Circuit affirmed a finding that plaintiff owned the copyright in the composition of the song "Whomp! (There It Is)", that defendant was liable for infringement based on its exploitation of the song for year, and the jury's award of over $2 million in damages.  The primary issue was whether a 50% interest in the song had originally been assigned to the plaintiff or the defendant's predecessor-in-interest (the other 50% remained with the writers/producers of the song).  The 5th Circuit held that California contract interpretation law applied, and that the lower court correctly found that the contract granted the 50% interest in the song to the plaintiff.

On appeal of defendant's trial motion under Fed. R. Civ. P. 50 for judgment as a matter of law, the defendant raised two issues regarding the district court's interpretation of the recording agreement as assigning a single 50% interest to plaintiff.  First, the Court rejected defendant's argument that the lower court erred in interpreting the agreement without asking the jury to make any findings on extrinsic evidence.  Second, the Court rejected defendant's argument that the agreement also assigned a second 50% interest in the composition copyright because the argument had not previously pursued that theory and had disclaimed the theory at an earlier hearing.  In short, the defendant could not raise its "two assignments theory" after not previously asserting it at trial or in its earlier Rule 50 motion.

On appeal of defendant's motion under Fed. R. Civ. P. 60(b) for relief from judgment based on fraud and lack of standing, the Court rejected defendant's argument that it was prevented from presenting the defense of plaintiff's lack of standing.  Even if the plaintiff had improperly withheld a certain document, it would not have affected plaintiff's standing and thus would not have affected defendant's defense.

With respect to the jury's damage award of over $2 million, the Court rejected defendant's argument that plaintiff should have only been awarded 1/2 of that amount as 50% owner of the copyright.  First, defendant did not object to the jury charge during trial.  And under the plain-error standard of review, the district court did not err.  Notably, the 5th Circuit found that Edward B. Marks Music Corp. v. Jerry Vogel Music Co., 140 F.2d 268 (2d Cir. 1944), was inapplicable to the issue of first impression whether a partial owner of a copyright can ever be awarded infringement damages for his co-owner's share.  Specifically, the jury could have found that plaintiff was entitled to 100% of the royalties in the first instance as administrator/publisher of the song.  In other words, because plaintiff was obligated to account to the other 50% owners (the producers/writers), plaintiff could recover 100% damages and any issue as to distributions would be a separate case between the co-owners not involving the defendant.

Lastly, in affirming denial of defendant's Fed. R. Civ. P. 59 motion for a new trial, the Court found that plaintiff's closing statement -- referring to defendant as a "thief -- was not abusive and improper.  Defendant did not object to the closing statement at trial and thus the standard of review was plain error.  Evidence was presented at trial form which the jury could find that defendant's conduct was willful and that defendant stole the copyrights from plaintiff.  Further, any prejudice was minimized by the judge's instructions and the statements concerned damages rather than liability.  Further, plaintiff ultimateley elected actual damages which were higher than statutory damages, and willfulness is not an element of actual damages calculation.

Motion For Judgment As Matter Of Law, Or For New Trial, Denied In Beastie Boys/Monster Case

Beastie Boys v. Monster Energy, 1:12-cv-06065-PAE (SDNY filed 12/04/14) [Doc. 181].

After a jury awarded plaintiff Beastie Boys a verdict on their copyright and trademark claims, defendant Monster moved for a judgment as a matter of law under Federal Rule of Civil Procedure 50.  As to the Copyright Act claim, Monster argued that the evidence was insufficient to support the finding of willful infringement on which the award of enhanced statutory damages was based.  As to the Lanham Act claim, Monster argued that the evidence was insufficient to support either a finding of a false endorsement or that
Monster acted with intentional deception.  Monster alternatively moved for a new trial under
Rule 59 or for a reduction in damages.   The court denied Monster’s motions.

Punitive Damages Verdict Significantly Reduced; Defendant Granted Judgment Notwithstanding Verdict On Cover Art And DMCA "Red Flag" Theories

Capitol Records, Inc. v. MP3Tunes, No. 07-cv-9931 (S.D.N.Y. filed Sep. 29, 2014) [Doc. 629].

Defendant moved for judgment as a matter of law, or alternatively a new trial, and for remittur following a $48,061,073 jury verdict in favor of plaintiffs, who consisted of record labels and publishers who had filed copyright and unfair competition claims alleging that defendant and MP3Tunes made infringing copies of copyright songs and cover art.  The motion was denied in part, and granted in part.  Specifically, defendant's motion for judgment as a matter of law was granted as to plaintiffs' claims of (1) public display rights in cover art, and (2) copyright infringement under "red flag" knowledge and willful blindness theories (except for certain works sideloaded and which the source domain's URL was obviously infringing and viewed by a company executive).  Further, defendant's motion for a new trial on punitive damages was granted unless plaintiffs elected to remit the jury's punitive damage award to $750,000.

2d Cir. To Hear Vimeo Interlocutory Appeal

Capitol Records, LLC v. Vimeo LLC, 2d Cir. Index Nos. 14-15 and 14-16 (2d Cir. April 9, 2014) [Doc. 57].

The Second Circuit agreed to hear interlocutory appeals, pursuant to 28 U.S.C. § 1292(b), and to consolidate the appeals.  The Second Circuit is now in a position to rule on whether the DMCA applies to pre-1972 sound recordings, and to clarify the willful blindness doctrine.

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.

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).

Statutory Damages Awarded To EMI For Willful Infringement

EMI Entertainment v. Karen Records, Inc. et al, No. 1:05-cv-00390 (S.D.N.Y. filed Aug. 26, 2011) (Holwell, J.) [Doc. 110 Memorandum Opinion and Order].

The court found that defendants willfully infringed EMI's copyrights in the four musical compositions at issue and awarded EMI $25,000 for infringement of each composition (total $100,000) for which all defendants -- corporate and individual -- shall be jointly and severally liable.

The Court had previously granted EMI summary judgment on liability as to sales on or after January 14, 2002 of albums containing the four musical compositions. 603 F. Supp.2d 759 (SDNY 2009). Now, the Court analyzed EMI's statutory damages request and found that defendants infringement was willful based on defendants industry experience and copyright ownership, prior lawsuit regarding similar practices and a specific warning. The next step was determining the amount of damages ($25,000 per work) and then analyzing whether the individual defendants should be jointly and severally liable. They were because they had the right and ability to supervise the infringing activity and a direct financial interest in such activities.