Labels Avoid Unfair Competition Counterclaims In Piracy Case For Lack Of Standing

UMG Recordings Inc. v RCN Telecom Services, LLC, CV1917272MASTJB, 2021 WL 2810145, [DNJ June 30, 2021]

Plaintiffs record companies, suing for contributory and vicarious copyright infringement, alleged that an internet service provider (ISPs), RCN, encouraged and profited from widespread copyright infringement by their end users. The defendants counterclaimed, alleging that the record labels and a a technology company engaged in the business of detecting online copyright infringement. (Rightscorp) violated violated California's Unfair Competition Law (“UCL”) by “sending millions of unsupported emails accusing RCN's customers of BitTorrent-based copyright infringement, while intentionally destroying the evidence necessary to determine whether any of those accusations were true.”

The court held that the counterclaim was not subject to heighted. “RCN alleges that Counterclaim Defendants engaged in unfair business practices that conceal potential acts of fraud, including spoliation of evidence and sending large volumes of infringement notices without verifying their accuracy.”

However, the Court concluded that the defendants lacked standing. “… RCN has not pled a cognizable economic injury under the UCL. RCN asserts a number of claimed injuries based on Counterclaim Defendants’ alleged conduct, none of which is sufficient to confer standing.” For example, RCN received notifications from various entities, and RCN failed to allege “that it created its DMCA System specifically because of Rightscorp's infringement notifications or that Rightscorp's infringement notifications imposed any additional costs on RCN.” Further, the court held that RCN’s legal costs were not a recognizable injury - RCN failed to explain how they went outside the Noerr-Pennington doctrine.

Sample Case Against Jay-Z and Timbaland Dismissed For Lack of Specificty

HINES V. ROC-A-FELLA RECORDS, LLC No. 19-CV-4587 (JPO), 2020 WL 1888832 (S.D.N.Y. Apr. 16, 2020)

Plaintiff Ernie Hines coauthored the soul single “Help Me Put Out The Flame” in the 1960s. Hines alleged that the sample from that song was used in two hip-hop songs without permission. Hines brought suit against four major record labels, as well as prominent artists Jay- Z and Timbaland. The court granted Defendant’s motion to dismiss. Defendants argued that Hines’s complaint did not specify the material from his song was copied in “Paper Chase”, co- authored by Jay-Z and Timbaland, or “Toe 2 Toe” which was authored by Timbaland. The Court agreed with Defendants that the complaint only contained broad allegations of similarity. Defendants also sought dismissal on grounds that the complaint failed to allege “whether and when the copyright ... was registered pursuant to statutory requirements.” The Court rejected the Defendants motion to dismiss on these grounds. However, the Court ruled in favor of Defendants’ motion to dismiss based on lack of specificity. The court also found that service of process had not been properly completed. Leave to amend was conditioned on Hines’s payment of the costs and attorney’s fees incurred by the Record Label Defendants in filing and defending their motions to dismiss.

Copyright Claim Dismissed Against Usher Because No Substantial Similarity

Edwards et al. v Usher Raymond IV et al., No. 1:13-cv-07985-DLC (S.D.N.Y. filed 05/23/14) [Doc. 36].

Plaintiffs alleged that a song recorded and published by defendants, including Usher, willfully copied the plaintiffs' original musical composition.  On defendants' Fed. R. Civ. P. 12(b)(6) motion to dismiss, the Court found that plaintiffs failed to state a claim for copyright infringement because the two songs were not substantially similar as a matter of law.  Accordingly, the Court dismissed the sole copyright infringement claim, and declined to exercise supplemental jurisdiction over the state law claim for breach of contract.

First, the Court found that the phrase "caught up," which is the title of both songs, is not eligible for copyright protection because it is a common phrase.  Second, the Court found that lyrics from the two songs expressing the ideas in question were not substantially similar.  Third, the Court ignored bare legal conclusions in the complaint that the songs are substantially similar.  Lastly, the Court also took a "holistic" approach, and determined that the two songs' music and lyrics, considered as a whole, confirmed a lack of substantial similarity.

Country Music Infringement Claim Survives Dismissal

Bowen v. Paisley et al., No. 3:13-cv-0414 (M.D. Tenn. filed Dec. 3, 2013) [Doc. 58]

Plaintiff alleged that the defendants, including popular country music singers Brad Paisley and Carrie
Underwood, violated her copyright interests in the song “Remind Me,” a song that plaintiff
copyrighted and recorded.  Defendants moved to dismiss.  The Court denied defendant's motion to dismiss for failure to state a claim, finding that under the Iqbal standard, plaintiff had plausibly shown that, taken in combination, her lyrics and associated melodies, intonations, and usage could be sufficiently original to constitute protectable material, and that based on the Court's own comparison of the two works that defendants' hooks which incorporate that potentially distinctive combination of elements, are “substantially similar”.

Lyricist's Suit Against Video Game Developer Survives

Greer v. Electronic Arts, Inc., No. 10-cv-3601 (N.D. Cal. order filed Feb. 1, 2012) [Doc. 96].

In this copyright infringement action, plaintiff contended that defendant improperly used a

sound recording and the lyrics of a song by incorporating them into a widely-distributed videogame. Defendant moved for summary judgment on three independent grounds. Although two of defendant’s three arguments presented close calls, triable issues of fact existed that precluded summary judgment, and the motion was denied.

Facts: Plaintiff was a member of a band that registered a copyright relating to an album the band had recorded, which included the song at issue. Plaintiff subsequently filed a correction to the registration to clarify that he claimed sole copyright to the lyrics of the song. One of Plaintiff's band mates was employed by a video game developer, and was working to create a soundtrack for a video game that was being was developed. The band mate chose to include the song as part of the soundtrack for the game. The band mate and two other band members submitted declarations stating that all of the band members executed a written license agreement giving the developer the right to use the song in the game in exchange for one dollar and acknowledgement in the on-screen credits of the game. No signed copy of such a license agreement was located, and Plaintiff denied ever being asked to sign a license agreement, and alleges that he did not become aware that the song had been incorporated into the game until 2009.

Discussion: First, the court addressed issues with the registration of the album containing the song as a "PA" (performing arts), in contrast to registration on a form "SR" (sound recording). While Form SR may be used to register both the underlying composition and the

sound recording if separate registrations are not necessary or desired, nothing on Form PA permits it to be used to register a sound recording. Thus, defendant was correct that the band’s recorded performance of the song that was used in the game was never registered. That fact, however, wasnot fatal to plaintiff's claims, because plaintiff's complaint specifically identified by registration number the copyrighted work that plaintiff alleged had been unlawfully copied. While the complaint also repeatedly asserted the erroneous legal conclusion that the registration was of the sound recording (as opposed to the underlying musical composition) the facts alleged were sufficient to state a claim for infringement of the musical composition. There was no dispute that the band's performance of the song incorporated in the game was a performance of the underlying composition.

Second, the Court analyzed the competing arguments about the existence of a license. The Court concluded that the record did not permit a conclusion on summary judgment that the license agreement was ever signed, either in the unsigned form of the document defendant hadsubmitted, or in any form. While the recollections on both sides were vague, they were in direct conflict.

Third, the Court analyzed the defense of laches. Defendant made a compelling showing that this was a case in which laches may ultimately apply to bar at least some portion of plaintiff's claims. Among other things, the evidentiary prejudice was manifest in the witnesses’ fading memories and the uncertainty in the documentary record as to whether the license agreement was ever signed. The critical question, however, was when plaintiff knew or should have known that the song had been incorporated into the game. Plaintiff's testimony that he did not learn of the song’s use in the game until 2009 was sufficient to create a triable issue of fact as to his actual knowledge. If the trier of fact accepts the testimony that the possibility of using the song in the game was discussed at length prior to plaintiff's departure from the band, he more likely can be held to a duty of some inquiry, even assuming he never saw or signed the license agreement. Defendant had not shown, however, that undisputed facts compel a finding that plaintiff was on constructive notice as early as 1995, or at any particular time thereafter. Finally, defendant had not established that laches necessarily would bar plaintiff from seeking injunctive relief against any ongoing infringement, even assuming it ultimately bars some or all of his claims for past damages.

2d Cir Finds Antitrust Suit Stated Against Record Labels For Online Sales

The United States Circuit Court, Second Circuit, holds that plaintiffs' antitrust complaint alleging a conspiracy by major record labels to fix the prices and terms under which their music would be sold over the Internet states a claim for violation of Section 1 of the Sherman Act under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). The amended complaint contains "enough factual matter (taken as true) to suggest that an agreement was made," id. at 555, and therefore states a claim.

"The present complaint succeeds where Twombly's failed because the complaint alleges specific facts sufficient to plausibly suggest that the parallel conduct alleged was the result of an agreement among defendants," Judge Katzmann said.

The defendants "agreed to launch MusicNet and pressplay, both of which charged unreasonably high prices and contained similar DRMs", and the entities did not "dramatically" drop "their prices for Internet Music (as compared to CDs), despite the fact that all defendants experienced dramatic cost reductions in producing Internet Music."

Starr v. Sony BMG, No. 08-5637-cv, NYLJ 1/14/2010 "Decision of the Day" (2d Cir. decided Jan. 13, 2010).

Copyright Claim Stated Despite Oral License Defense

Ortiz v. Guitian Music Brothers Inc., No. 07 Civ. 3897, 8/12/09 NYLJ "Decision of Interest" (S.D.N.Y. July 22, 2009) (Sweet, J.).

Defendants' FRCP 12(b)(6) motion to dismiss copyright amended complaint denied. According to the amended complaint, plaintiff was solicited to create a series of musical works to be used as the instrumental score for a movie, and plaintiff was to receive certain payments. Plaintiff composed the works for the movie, and 13 works were used as the background instrumental score. The movie was ultimately released, distributed, and sold featuring the works as the background instrumental score. Plaintiff alleges non-payment.

After discussing the Rule 12(b)(6) standard, the Court found that plaintiff had sufficiently plead his claim for copyright infringement under the Rule 8 pleading standards, which require a copyright complaint state: (1) which specific original works are the subject of the claim; (2) that plaintiff owns the copyright; (3) that the works have been registered in accordance with the copyright statute; and (4) by what acts and during what time defendant has infringed the copyright.

Defendants argued that their affirmative defense precluded the action - namely, that plaintiff granted defendants an oral nonexclusive license to use the works in connection with the creation and distribution of the movie. The Court rejected this argument; it was not persuaded that he limited facts alleged in the amended complaint conclusively established such an oral nonexclusive license.

The Court observed that even if it had found such an oral nonexclusive license was apparent on the face of the amended complaint, plaintiff would not be precluded from bringing his copyright claim "because it is further alleged that Defendants did not perform their part of the understanding between the parties." In other words, a licensor can bring an action against a licensee who exceeds or breaches the license agreement. "Indeed, absent consideration, nonexclusive licenses are revocable." Assuming an oral license did exist and plaintiff's allegations of non-payment were true, such license was revocable, and by instituting the action, plaintiff revoked any license that may have existed.

Therefore, the Court denied defendants' motion to dismiss.

MP3Tunes Decision on Counterclaims

Defendant's counterclaims Dismissed:

DMCA claim
New York's GBL 349 (re: consumer protection)
Common law unfair competition
California Business and Professional Code 17200

Defendant's counterclaims NOT dismissed:

Declaratory judgment claim that it is a service provider protected by the safe-harbor provision of 17 USC 512 (of the DMCA)

[No. 1:07-cv-09931-WHP-FM (Doc. 73 filed Mar. 4, 2009).]

Motion to Amend Granted to Producer

Moman v. Sony BMG Entertainment, No. 604392/04, 2/5/09 N.Y.L.J. Decision of Interest (Sup.Ct., N.Y. Co. decided Jan. 20, 2009).

The court granted Plaintiff record producer leave to amend his complaint to add an additional cause of action for breach of a third-party beneficiary contract between defendant Sony and Willie Nelson in 1983. Producer argued the 1983 contract surfaced during settlement discussions, and stated that he would receive $225,000 advance royalty payment on his services for CBS Records for co-producing a single Nelson album. Sony argued the 1983 contract was merely a Letter of Direction (LOD) and was not an "open mutual account." It also argued the six year statute of limitations period expired on the claim. The court rejected Sony's argument that the breadth of a 1990 judgment audit of the CBS books and records would have also encompassed royalties from the 1983 LOD. The court noted that Producer claimed he was unaware of the 1983 LOD until 2007 when his current attorney and manager received a copy from Sony.

Antitrust Claims Against Majors Dismissed

In re Digital Music Antitrust Litigation, No. 06 MDL 1780, 10/17/08 N.Y.L.J. "Decision of Interest" (S.D.N.Y. decided Oct. 9, 2008) (Preska, J.)

Plaintiffs sought to represent a nation-wide class of buyers of "digital music" on claims that defendant recording companies conspired to artificially fix prices on digital music (both CDs and Internet music). Defendants, the major record labels (EMI, SonyBMG, UMG, anmd Warner) allegedly fixed a high price for, and restrained availability of Internet music - by imposing the same price and use restrictions (i.e., DRM) on their sale thereof - which "buoyed" the price of CDs.

Plaintiffs' second consolidated amended complaint dismissed under the pleading standards of Bell Atlantic v. Twombly. Plaintiffs' first claim was for violation of section 1 of the Sherman Antitrust Act. The court concluded it was unreasonable to infer that defendants' adoption of DRM and parallel price arose from their membership in joint ventures that were created to distribute Internet Music. Other circumstantial evidence also did not justify an inference that defendants' parallel conduct resulted from an illegal agreement under the Sherman Act. For example, the court found there was no "antitrust record" based on investigation by government agencies, including the NY Attorney General. Nor would"mere participation in an industry trade association" yield an inference of improper inter-firm communication.

Similarly dismissed as predicated on the same allegations were state antitrust claims, consumer protection claims, and the unjust enrichment count.

Kanye & Jay-Z "What? What?"

Kanye West and Jay-Z are among the co-defendants in a case filed in the District of Maryland (which Plaintiff erroneously describes in the caption as being in the Sixth Circuit).

Plaintiff Dayna D. Staggs -- who is likely appearing pro se -- has asserted...request your own copy of the complaint here. The complaint is an interesting, if not sometime confusing, read. But don't get the wrong idea; OTCS believes plaintiff's complaint would withstand a 12(b)(6) motion to dismiss for failure to state a claim!

From what we gather from the single spaced, unnumbered, 6 page complaint (which includes a single signature line for the multiple defendants), Plaintiff seeks injunctive relief, damages, and legal fees arising for copyright infringement, unfair competition, and "unauthorized use of Plaintiff [sic] likeness and Mtv sound recording, composition and internationally musical content entitled 'Volume of Good Life' herein described on phonorecord white label by the United States Library of Congress." Though Plaintiff's grammar and syntax could be improved, the allegations have a good chance of satisfying FRCP's liberal pleading standards (Rule 8). What could be a more "short and plain statement" than one completely lacking legalese?

Plaintiff alleges that he is the songwriter for the composition "Hollar at Me" (1985), released on EMI by R&B artists ICEE HOTT. But, this is all of minor relevance because the alleged infringement relates to Kanye West's release of "Good Life" on Roc-a-fella records. Plaintiff alleges to be the author of a composition and sound recording entitled "Volume of Good Life", which Kanye West sampled without authorization (and which his label released).

Additionally, "the vulgar, sexual and racially-charged nature of the Infringing master work is directly counter to [Plaintiff's] long established public persona, utterly inconsistent with the musician, artist clean image. And harms the reputation of the Dayna D Staggs Copyrighted Rock/Pop master work clean titled 'Volume of Good Life." [sic].

Despite the numerous grammatical errors in his complaint, Plaintiff appears to have some idea of what he is doing. For example, he sent cease and desist letters which "did not receive a favorable response". He alleges the labels have commercially profited from the infringement. He alleges willful infringement -- "Defendants are undoubtedly familiar with [Plaintiff], his songwriter likeness, and also are friends of the Plaintiffs myspace page located at www.myspace.com/dmystro." He makes claims for legal fees, and claims that he has no adequate remedy at law (though he later requests punitive damages and states "the Actual harm Plaintiff suffered is reflected in the amount of licensing fee that Plaintiffs lost because of the infringement").

So in sum, Plaintiff has asserted an unauthorized sampling claim against Kanye West and his label and publishers.

[Staggs v. West et al., No. 08-cv-0728-PJM (D.Md. filed Mar. 20, 2008).]