Band Member May Sue As Third-Party Beneficiary Of Contract Between Record Label and Suspended Loan-Out Company

Bozzio v. EMI Group Ltd. et al., No. 13-15685 (9th Cir. Jan. 26, 2016).

The 9th Circuit held that the front-woman of the '80s new-wave band "Missing Persons" could sue the band's record label for breach of contract (whether proper royalty rates were paid) as a third-party beneficiary of the contract between the record label and the "loan-out" company created by the band, even though the State of California had suspended the corporation's status for failure to pay certain taxes.  "The parties have not cited, and we have not found, any California case holding that a third-party beneficiary cannot sue the promisor for breach of contract when the promisee is a suspended corporation."  Additionally, interpreting a related Artist Declaration, the 9th Circuit held that plaintiff did not necessary waive the benefits of the contract under the provision requiring band-members to look to the loan-out company (not the label) for the payment of royalties.  Language in the Loan-Out Agreement was in tension with language in the artist declaration.  Accordingly, the district court -- which had dismissed with prejudice believing that amendment would be futile -- was reversed.

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.

Management Agreement With "Ginuwine" Abandoned

Reives v. Lumpkin, 08-CV-7797, NYLJ 1202716836270, at *1 (S.D.N.Y. decided Jan. 30, 2015).

Plaintiff's suit, claiming that the artist Ginuwine failed to make payments under a 1996 Management Agreement, was dismissed because the parties mutually abandoned the contract less than one year after after entering into the agreement.  The Court found that New York law applied, under which a contract is unenforceable where the parties have abandoned or ignored it.  "In such cases, a later cause of action for breach is typically barred, and will only lie where the agreement of the parties to terminate the contract expressly or impliedly reserved a later cause of action."  Here, the Court found as a matter of fact that Ginuwine had satisfied his burden of proof and sufficiently demonstrated that the parties mutually agreed to abandon the Management Agreement in late summer of 1996.  The Court further found that this abandonment precluded plaintiff's current action for breach as a matter of law.

Sirius To Be Liable To Turtles On Pre-1972 Sound Recording Claims

Flo & Eddie, Inc. v. Sirius XM Radio Inc., 1:13-cv-05784 (S.D.N.Y. filed Jan. 15, 2015) [Doc. 114].

The Court found that Sirius will be found liable to the Turtles' successor in interest for common law copyright infringement of pre-1972 sound recordings, but deferred entering judgment as to liability until the plaintiff decided whether to proceed individually or as a class action representative.

First, the Court rejected Sirius' argument that the plaintiff's had not yet established ownership of the recordings.  The Court found that documentary evidence of the transfer of rights from the Turtles to the plaintiff was not required because an assignment of common law copyrights need not be in writing to be valid under New York law; that a court may infer that a transfer has taken place from subsequent conduct.

Second, the Court rejected Sirius' argument that it had an implied license.  There was no evidence that the recordings were created at Sirius' request (indeed, Sirius did not even exist when the recordings were made), nor any evidence that plaintiff "handed over" the recordings to Sirius (let alone with intent for Sirius to copy and distribute the recordings).  Mere acquiescence was insufficient.

Third, the Court rejected Sirius' waiver and estoppel defenses.  The Court found that plaintiff's failure to pursue infringement actions for many years while the recordings were played on the air did not constitute a waiver.  Inaction was insufficient.  The estoppel defense failed because there was no proof that Plaintiff made any false representations to Sirius or concealed any material fact with intent to deceive.  Even if Sirius relied on general industry practice as to pre-1972 recordings, and the lack of any lawsuits over the years challenging that practice, the Court found that was distinguishable from relying on affirmative conduct by the plaintiff.

Fourth, the Court found that there is a three year statute of limitations under New York law, and that while plaintiff's claim was not time-barred, it could only recover damages for infringement going back three years.  The Court distinguished the case from those in which ownership of the copyright is in dispute between the parties; here, infringement is the primary issue (there is no claim by Sirius that it owns the copyrights).

Lastly, the Court found that it would defer on ruling on the merits until the issue of class certification was decided.  The Court directed plaintiff to notify it if it intends to proceed individually or as a class action representative.

Transmittal Of Publisher's Lawyer's Analysis To ASCAP Did Not Waive Attorney-Client Privlege

Good Morning You Prod. v. Warner/Chappell Music, No. 2:13-cv-04460 (C.D. Cal. filed 07/25/14) (Doc. 132).

The Court concluded that the 1979 transmittal by a music publisher to ASCAP, of letters prepared by the publisher's attorneys, did not waive the attorney-client privilege applicable to those materials.  The letters "speak directly to the validity of the copyrights" in the song Happy Birthday To You.  "The [transmittal] letter is silent as to the specific reason why [the publisher] provided materials from its outside lawyer to the association’s lawyer regarding the validity. However, the only sensible conclusion that the Court can draw – that is, based on the evidence presented, it is more likely than not – is that ASCAP needed or requested this information to properly represent [the publisher] in exploiting its song rights. ASCAP would only have been able to sue an infringer if it could demonstrate that its principal [the publisher] owned a valid copyright"

Use Of Rapper's Image On Website Constitutes Copyright Infringement And Violated Right Of Publicity; Questions Remain on Trademark And Third-Party Contribution Claims

Jackson v. Odenot, No. 09-cv-05583 (S.D.N.Y. filed March 24, 2014) [Doc. 150].

Rapper 50 Cent was granted summary judgment on his claims against a website for the unauthorized use of photographs that appeared on the masthead of the website.  50 Cent's claim for copyright infringement was based on a registration for a sound recording which included the relating artwork/photos, and exact copies were used by the defendants.  50 Cent's claim under New York state law for the right of publicity (Civil Rights Law sections 50-51) succeeded because: (1) the pictures "are recognizable likenesses of Jackson because someone familiar with Jackson would be able to identify him in each of the mastheads", and (2) defendants' waived their statute of limitations defense.  However, the Court found that there were questions of fact that precluded summary judgment on 50 Cent's claim under the Lanham Act for false endorsement, 15 USC 1125(a)(1), and also on his claim for common law unfair competition.  The Court did dismiss the defendants' affirmative defenses of fair use, implied license, equitable estoppel, and unclean hands, and found that the other affirmative defenses had been abandoned.  Lastly, the Court held that defendant could not recover on a contribution theory under copyright and trademark law against the third-party defendants, but could seek contribution under the New York state claims.

Labels Participate in Judicial Forum, Waive Arbitration

Lockett v. Tuff City Records, No. 602900/08, NYLJ 9/25/2009 "Decision of Interest" (Sup. Ct., N.Y. Co. Sep. 21, 2009)

Defendants, record labels and their principals, waived right to arbitration by actively participating in judicial forum. Plaintiffs' action sough monies allegedly owed for royalties. Defendants answered, but did not plead arbitration as an affirmative defense. Moreover, the arbitration demand was made nearly eight months into the litigation, after Defendants had made discovery demands. Additionally, defendants failed to establish that plaintiffs' claims were subject to the alleged arbitration clause in a 1986 recording contract because the songs at issue were recorded prior to 1986. Thus, Plaintiffs' motion to permanently stay arbitration granted.

The Court also denied defendants' motion to dismiss for misjoinder of plaintiffs; instead, the court severed the individual plaintiff's claims and ordered them to obtain a no-fee index number and serve their own complaint within 30 days.

Lastly, the Court denied defendants' motion to remove the action to Small Claims court; and denied both plaintiffs' and defendants' motions for sanctions.