February 2012 – 6th Circuit Copyright Litigation Update

The 6th Circuit Court of Appeals and its subordinate district courts decided a total of five cases involving copyright infringement claims in the month of February 2012:

 

Renewal Rights; Assignments

Roger Miller Music, Inc. v. Sony/ATV Publ’g, LLC, No. 10-5363, 2012 U.S. App. LEXIS 3472 (6th Cir. Feb. 22, 2012)

This was by far the most talked-about copyright decision of the month, because it resulted in the reversal of an almost-$1 million judgment.  The issue was who owned the copyrights in songs that famed singer/songwriter Roger Miller created in 1964.  The issue is complicated by the special treatment that Section 304 of the Copyright Act, as modified by the  Copyright Renewal Act of 1992, gives to works created between Jan. 1, 1964 and Dec. 31, 1977.

Under these provisions, a work has a copyright term of 28 years, followed by a renewal term of 67 years.  Renewal copyrights can be registered in the name of the original author or his heirs, even if the work was originally sold or licensed to someone else.  As the court explained, “[t]his system protects an author who was in a weak bargaining position at the outset but whose work ultimately proved successful.”  But a renewal copyright cannot be applied for until the final year of the original term (a/k/a the “renewal year”).

Once a renewal application is filed, title vests in the applicant.  The author can assign his renewal rights before or after that time, but he only has a contingent interest before “the renewal period arrives.”   If the author dies before that time, then his rights pass to his heirs regardless of the assignment.

Roger Miller was living on Jan. 1, 1992, when the renewal year began.  He assigned his renewal rights to Sony, which registered them in January and April of that year.  In October 1992, Miller died, bequeathing all of his intellectual property to his wife, who then transferred it to Roger Miller Music.  In January 1993, the renewal term began.

Eventually, Roger Miller Music sued Sony for ownership of the 1964 songs.  The dispute came down to when rights in the renewal term vested.  The district court ruled for Roger Miller Music, finding that the renewal rights could not vest until the beginning of the renewal term in January 1993, by which time Miller had died and transferred his rights to his wife, nullifying the assignment to Sony.  The court entered judgment against Sony for more than $900,000.  But the appeals court reversed, finding that the plain language of the Copyright Act § 304(a)(2)(B)(i) vested the rights  in Sony as soon as Sony applied for them.

 

Attorney’s Fees; Sanctions

Fharmacy Records v. Nassar, Nos. 10-1354, 10-2073, 2012 U.S. App. LEXIS 3801 (6th Cir. Feb. 28, 2012)

These are two consolidated appeals from the same lower court decision.  The district court had awarded the prevailing defendants a significant amount in costs and attorneys’ fees, based both on the Copyright Act’s fee award provisions and the court’s inherent power to sanction bad-faith litigation conduct.  It found that plaintiff and its lawyer had engaged in such egregious conduct as discovery abuses, misrepresentation, and destruction of evidence.  In these appeals, plaintiff raised an assortment of challenges to those rulings, all of which the 6th Circuit found frivolous.

 

Sanctions; Fraud on the Court

Bridgeport Music, Inc. v. Smith, No. 03-cv-72211, 2012 U.S. Dist. LEXIS 21874 (E.D.Mich. Feb. 22, 2012)

This decision ordered the same attorney against whom sanctions were upheld in the Fharmacy case above to show cause why he should not be sanctioned in this case, for filing a frivolous affidavit that appeared to be for improper purposes.  Also, the court denied the second motion filed by a third party who claimed to own the musical copyrights at issue in the case. She had sought to set aside the court’s judgment under Rule 60(d)(3), but the court found insufficient evidence of fraud.

 

Preliminary Injunctions / TROs

Allure Jewelers, Inc. v. Ulu, No. 1:12cv91, 2012 U.S. Dist. LEXIS 13361 (S.D. Ohio Feb. 3, 2012)

Both parties sell jewelry online.  Defendant “scraped” product information and descriptions from Plaintiff’s online database, and copied it into its own website.  Plaintiff sought a TRO to prevent the scraping, and focused most of its arguments on its copyright interests in the information.  But Plaintiff did not include an actual count for copyright infringement in its complaint–probably because the content was not registered.   Instead, it asserted trade secret claims.  But the court found no likelihood that these claims would succeed.

 

Unauthorized Public Performance; Permanent Injunction

Toolshed Music v. Olde Phoenix Hill Tavern, No. 3:10-CV-548-H, 2012 U.S. Dist. LEXIS 13290 (W.D. Ky. Feb. 1, 2012)

This is a fairly run-of-the-mill ASCAP enforcement case against a food service establishment that played ASCAP members’ copyrighted musical compositions without a license.  The court found that defendant knew they needed a license, and held their excuses for not obtaining one to be unpersuasive.  These facts made for what the court considered a “strong case for granting [a] permanent injunction.”