Covenant Not To Sue Defeats "This Land Is Your Land" Copyright Challenge

Saint-Amour v. Richmond Organization, Inc., No. 16-cv-4464-PKC, 2020 WL 978269 (S.D.N.Y Feb. 28, 2020).

The court dismissed a copyright suit challenging the validity of the Defendants’ interest in the copyright for the famous song “This Land is Your Land.” The Plaintiffs filed the lawsuit seeking a declaratory judgment that the Defendants did not own a valid copyright in the song, but rather it is in the public domain. Plaintiffs stated goal was to make their own recording and music video using the lyrics from the song with a different melody, but they were concerned that the Defendants would enforce their copyright against them if they did. However, on April 23, 2019, Defendants and Woody Guthrie Publications delivered a broadly worded covenant not to sue the Plaintiffs for any infringement in the song. As a result, the Defendants filed a motion to dismiss asserting that a live case or controversy no longer existed, so the court lacked subject matter jurisdiction. The court agreed with Defendants, cited Nike, Inc. v. Already, LLC, 568 U.S. 85 (2013) to support its finding that the covenant resolved the matter, and granted the motion to dismiss.

No Case Or Controversy In ISP's Declaratory Judgment Suit of NonInfringement

Windstream Services v. BMG Rights Management, 16-cv-5015 (S.D.N.Y. Apr. 17, 2017).

Plaintiff, an internet service provider (ISP), brought an action seeking a declaratory judgment of non-infringement based upon the DMCA's safe-harbor provisions.  Defendant is a music publisher.  The Court granted the defendant's motion to dismiss for lack of subject matter jurisdiction, finding that plaintiff sought an unauthorized advisory opinion (and even if the Court had subject matter jurisdiction, it would exercise its discretion and decline to hear the action).  "[Plaintiff] seeks a blanket approval of its business model, without reference to any specific copyright held by BMG or any specific act of direct infringement by any [plaintiff] subscriber."  The Court observed that the Southern District of California had rejected a nearly identical lawsuit in Veoh v. UMG, 522 F. Supp. 2d 1265 (S.D. Cal. 2007).  The complaint was hypothetical in nature.  Having dismissed the declaratory judgment clai, the Court declined to exercise supplemental jurisdiction over plaintiff's state law claim.

Covenant Not To Sue Dooms Velvet Underground Copyright Claim Against Warhol

The Velvet Underground v. The Andy Warhol Foundation, No. 1:12-cv-00201-AJN (S.D.N.Y. filed Sept. 7, 2012) [Doc. 30].

The Velvet Underground sought a declaration that the Andy Warhol Foundation has no copyright in the iconic banana image used by the Velvet Underground and designed by Warhol.  The Warhol Foundation had covenanted not to sue the Velvet Underground for copyright infringement for the Velvet Underground's use of the banana image.  The Court held that the covenant not to sue eliminated any justiciable controversy between the parties over copyright in the design, and thus dismissed the Velvet Underground's declaratory judgment claim.  (The Velvet Underground's trademark claims were not the subject of the motion and were not dismissed).

In the decision, Judge Nathan does a thorough analysis of the Declaratory Judgment Act (28 U.S.C. 2201 et seq.), and specifically with respect to intellectual property cases.  Notably, the covenant not to sue was entered after the litigation had commenced, so the issue had been mooted by a subsequent development (the covenant).  The Court found that: "[I]n intellectual property cases, when a declaratory judgment plaintiff seeks a declaration that an asserted right is invalid or otherwise unenforceable and the declaratory judgment defendant provides the plaintiff with a covenant not to sue for infringement of that right, that covenant can extinguish any current or future case or controversy between the parties, and divests the district court of subject matter jurisdiction."  (Doc. 30 at pp. 6-7).

The Court held that the covenant at issue was broad, and then determined that there no longer was a "live, actual controversy."   First, the Court found that there was no real and substantial prospect that the Warhol Foundation's alleged copyright would impact the Velvet Underground's legal interests, and the Foundation's mere assertion of the right did not support a declaratory judgment claim.  The Covenant no only held litigation in abeyance, but it also vitiated any coercive force that the Foundation's alleged copyright might have had against the Velvet Underground.  Second, the Court held that the Declaratory Judgment Act could not be sued to test the validity of an affirmative defense that a plaintiff anticipates the defendant will assert, to wit: the Foundation claiming that its copyright shields it from trademark liability.  Third, the alleged adverse economic impact of the alleged copyright was not sufficiently immediate and real to warrant the issuance of a declaratory judgment.  "Without the 'how,' [the Velvet Underground] cannot show the controversy is 'real'; without the 'when', it cannot show the controversy is 'immediate'."  (Doc. 30, p. 14).  Fourth the right to an accounting under the Declaratory Judgment Act is not an independent cause of action, but is merely relief that may be granted.