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.

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."

Workshop Agreement Does Not Permit Attorneys Fees Or Indemnification

Bowen v. Paisley, No. 3:13-cv-0414 (M.D. Tenn. June 16, 2014).

The Court held that defendant's counterclaims for breach of contract would proceed, but their counterclaims for indemnification and attorney's fees would be dismissed.  Plaintiff wrote and recorded a song and alleged that two popular country music artists (Brad Paisley and Carrie Underwood) violated her copyright interests.  Plaintiff alleged that defendants gained access to her song when she performed it during a 2008 country music songwriting workshop in Nashville, in which two other defendants served as guest instructors.  Those defendants alleged that s a condition of participation in the workshop, plaintiff signed a consent agreement, in which the plaintiff effectively waived her right to bring the copyright claims asserted, at least as they related to access gained in the workshop.  First, the Court found that the defendants could not assert contractual indemnification under the agreement because it would lead to an "absurd result" of requiring plaintiff to defend the defendants against her own claims.  Second, the Court held that it would permit the defendant's breach of contract claim -- based on a covenant not to sue provision -- to remain, but recognized that the claim would eventually lead to "a doctrinal thicket" as to its viability.  Lastly, the Court held that the attorneys fees claim failed under the language of the contract.

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.