Ramos, U.S.D.J.
This is a copyright and trademark case arising from the creation of a group of musical compositions, sound recordings, and a trademark in the late 1960s. The
Before the Court are Plaintiff's and Defendants' cross-motions for summary judgment (Docs. 121, 131). For the following reasons, both motions are GRANTED in part and DENIED in part.
This case concerns an original musical composition, another composition and four sound recordings that are all based on the original composition, and a trademark associated with a record label. Below is a description of each work, organized chronologically in order of creation.
On October 15, 1969, Stanley Lewis executed a written transfer agreement whereby, in exchange for $1.00, he purported to "sell," "assign," and "transfer all rights" to the Hippy Skippy Composition (and two other compositions) to Eden Music Co. ("Eden"), a music company owned by Clyde Otis, who was the founder of Defendant COMG. Otis Decl., ¶¶ 4-6, Ex. S; Defs.' Opp'n at 4-5; Plaintiff's Response to Defendants' Statement of Undisputed Facts (Doc. 136) ¶ 30. Eden registered the copyright for the Hippy Skippy Composition on November 14, 1969, listing Slew as a co-claimant, and obtained Copyright Registration No. EU159713. Otis Decl. ¶ 7, Ex. T.
Also in 1969, Slew recorded a performance of the Hippy Skippy Composition (the "Hippy Skippy Sound Recording") and released it as a single, the label of which credited "H. Beatty" as the songwriter and The Moon People as the performing artist, and listed both "Eden Music Corp./BMI" and "Slew Music/BMI." See Pl.'s 56.1 ¶ 17; Defs.' Opp'n at 5; Declaration of Scott Zarin (Doc. 137) ("Zarin Decl."), Ex. H (scan of Slew release). Around that same time, a record label named Roulette Records, Inc. ("Roulette") also released a single of the Hippy Skippy Sound Recording, which credited the writing to Beatty and the performance to the Moon People, and also listed both Eden and Slew on the face of the record itself. See Zarin Decl., Ex. I (scan of Roulette release). Under Defendants' version of the facts, further articulated below,
Critically, it is undisputed that the Hippy Skippy Composition and all for Sound Recordings at issue here are derivative works,
In May 2006, COMG entered into a licensing agreement with RCA Music Group, a division of Sony BMG Music Entertainment ("Sony"), which allowed Sony to use a sample of the Hippy Skippy Sound Recording (the "Hippy Skippy Sample") in a song by the pop artist Christina Aguilera, titled "Ain't No Other Man." Zarin Decl., Exs. W, X; Pl.'s 56.1 ¶¶ 44, 47; Defs.' Opp'n at 7. Aguilera released "Ain't No Other Man" with the Hippy Skippy Sample in August 2006 to substantial commercial success. Pl.'s 56.1 ¶¶ 48-49; Defs.' Opp'n at 7.
On August 11, 2006, around the same time "Ain't No Other Man" was released, Emusica Records, LLC ("Emusica"), a music company that was subsequently acquired by Codigo, wrote to Sony claiming that Emusica, not COMG, was the rightful owner of the Hippy Skippy Sound Recording.
On February 28, 2009, the DNJ Action was resolved pursuant to a settlement agreement among Emusica, COMG, and other parties to the action (the "DNJ Settlement"). Declaration of Garrett S. Livingston (Doc. 144) ("Livingston Decl."), Ex. BB (DNJ Settlement); see also Pl.'s 56.1 ¶ 55; Defs.' Opp'n at 8. The core terms of the DNJ Settlement were: (i) a complete assignment to Emusica of all ownership rights in the Happy Man, Happy Soul, Happy Soul with a Hook, and Hippy Skippy Sound Recordings; (ii) an agreement to share revenues generated from the Happy Man, Happy Soul, Happy Soul with a Hook, and Hippy Skippy Compositions; and (iii) an agreement to share royalties
Plaintiff's suit is based on the contention that it is the rightful owner of the musical compositions, sound recordings, and trademark at issue. Plaintiff's alleged chain of title rests on two propositions: (i) Morton Craft was the owner of all the disputed copyrights from their inception up through 2004, and (ii) Craft and Plaintiff executed two agreements in 2004 that granted Plaintiff an exclusive license in perpetuity to all of the works at issue.
First, relying almost exclusively on Morton Craft's deposition testimony taken in this litigation, Plaintiff claims that Craft was the owner of the Speed record label, that "Craft owned all of the music he distributed on his `Speed' record label unless he made an agreement with the writer of the music or a third-party to the contrary," and that Craft "entered an agreement" with Bobby Marin "pursuant to which Marin agreed to write and record songs for Craft." Pl.'s 56.1 ¶¶ 1-4. Thus, according to Plaintiff, Marin wrote and recorded the Happy Man Composition pursuant to a contractual agreement with Craft, and consequently Craft personally owned the copyright in both the Happy Man Composition and the Happy Man Sound Recording from the date of the creation of those two works. Id. ¶¶ 4-6. Plaintiff adds that Craft and Stanley Lewis had a "business relationship" and released music together, including the "Take a Trip Pussycat" album on Craft's Speed label, which contained some non-Latin-music tracks owned by Craft (including the Happy Man Sound Recording) and other Latin-music tracks owned by Lewis. Id. ¶¶ 7-9. Furthermore, in addition to never having transferred rights to the original Happy Man Composition, Plaintiff maintains that Craft was the impetus for the various derivations of the Happy Man Sound Recording that resulted in the creation and release of the Happy Soul and Happy Soul with a Hook Sound Recordings, and thus personally owned the copyright to those recordings upon their creation. Id. ¶¶ 10-15; see also Plaintiff's Omnibus Memorandum of Law (Doc. 133) ("Pl.'s Br.") at 32-35. As for the Hippy Skippy Composition and Sound Recording, Plaintiff attests that Craft (i) was the rightful owner of those derivative works by virtue of his ownership of the Happy Man Composition, (ii) did not authorize the creation of these works or the contract between Beatty and Lewis assigning ownership to Slew, (iii) was not aware of and did not authorize the record releases by Slew or Roulette, and (iv) did not authorize Lewis or Slew to transfer ownership of the works to Eden. Pl.'s 56.1 ¶¶ 16-20; see also Pl.'s Br. at 24-29, 33.
Second, Plaintiff points to documentary evidence and deposition testimony to establish the existence and validity of two contractual agreements from 2004 (the "2004 Agreements") in which Craft granted to Plaintiff all rights in the copyrights for the musical compositions, sound recordings, and trademark at issue here. Specifically, in the first agreement dated October 27, 2004 (the "October 2004 Agreement"), Plaintiff claims that Craft granted to it all copyrights and exclusive, perpetual administrative and licensing rights to specific musical compositions and sound recordings listed in three schedules attached to the October 2004 Agreement, as well as rights to "compositions, sound recordings or any other property owned by Speed Records," "all rights Craft has as artist, writer, producer, publisher or label owned," and "all rights in the master tapes
In exchange for the copyrights it received, Plaintiff paid Craft a two-thousand five-hundred dollar ($2500) advance and a fifty percent (50%) royalty in all proceeds that Plaintiff generated from the exploitation of the copyrights granted by Craft. October 2004 Agreement at § 1; Pl.'s 56.1 ¶ 32. Additionally, Plaintiff promised to pay Craft an additional one-thousand dollars ($1000) per album upon Craft's producing the physical master tapes that together constituted "each of the albums on Speed Records," up to a total advance of ten-thousand five-hundred dollars ($10,500). See October 2004 Agreement at § 1.i; Pl.'s 56.1 ¶ 37. The October 2004 Agreement appears to be signed by both Craft and Aaron Fuchs, the President of TufAmerica, and both men appeared to initial each page, including the three schedules. Id. According to the 2004 Agreement's preamble and Craft's signature line, Craft executed the agreement on behalf of "himself, Speed Records, Peek A Book and Slew Music." October 2004 Agreement at pp. 1, 3.
In a separate letter dated the same day, October 27, 2004 (the "2004 Amendment"), Plaintiff's counsel wrote to Craft to clarify that, upon execution of the letter, the October 2004 Agreement would be construed as (1) "an exclusive license in perpetuity in and to all rights in and to the copyrights in the musical compositions and sound recordings referenced on Schedules `A,' `B,' `C,' and `D' [sic], under common law and the Copyright Act of 1976..., including without limitation the right to sue and
"Around the time" the 2004 Agreements were executed, Plaintiff asserts that it paid Craft the $2500 advance owed to him under the October 2004 Agreement, and then paid Craft an additional $2500 shortly thereafter. Pl.'s 56.1 ¶ 38; Zarin Decl., Ex. R (Plaintiff's "Vendor QuickReport" for calendar-year 2004, listing one $2500 check on 10/25/2004 and another $2500 check on 11/1/2004, both made to "Monty Craft" [sic]); Zarin Decl., Ex. S (scan of check from Plaintiff that appears to be dated "10/24/04," made out to "Mort Craft" in the amount of $2500, signed by Fuchs, for "agreement: Speed Records: Oct. 27").
Plaintiff attests that, in November 2004, it "filed an application with the U.S. Copyright Office seeking a registration for each and every musical composition and sound recording" transferred under the 2004 Agreements, but has not submitted into the record any evidence of successful copyright registration. Pl.'s 56.1 ¶ 39. Plaintiff also submitted a copy of the October 2004 Agreement to the Copyright Office in November 2004, and received a Certificate of Recordation (the "2004 Certificate of Recordation") indicating that the Copyright Office had received the document in January 2005. Id.; Zarin Decl., Ex. T (2004 Certificate of Recordation). In February 2008, the Copyright Office issued a further Certificate of Recordation ("2008 Certificate of Recordation") indicating that it had receive an affidavit that Fuchs submitted attaching two additional lists of musical compositions and sound recordings (the "2008 Fuchs Affidavit"), all of which purported to "expand upon and amplify" the specific works that were transferred by the October 2004 Agreement, in particular the collection of individual songs included on the albums listed in Schedule C of the October 2004 Agreement, "whose individual titles were not known at the time of recordation of the [October 2004 Agreement]." Zarin Decl., Ex. U (2008 Certificate of Recordation and 2008 Fuchs Affidavit); Pl.'s 56.1 ¶ 40.
Some unspecified time after executing the 2004 Agreements, Plaintiff released an album titled "Big Ol' Bag O' Boogaloo (Volumes 1, 2 & 3)," which contained some of the sound recordings at issue here. Pl.'s 56.1 ¶ 42. Plaintiff submits what it purports to be a royalty statement from 2010 reflecting royalties generated from the release of Plaintiff's album and owed to Craft under the 2004 Agreements, but since those royalties were not sufficient to recoup the $5000 advance already paid to Craft, Plaintiff "did not [ ] pay Craft any money with this statement." Id. ¶ 43; Zarin Decl., Ex. V (copy of royalty statement).
Defendants naturally take a different view than Plaintiff of the initial ownership of the copyright to the Happy Man Composition. Relying almost exclusively on Bobby Marin's declaration submitted in support of their motion for summary judgment, Declaration of Bobby Marin (Doc. 145) ("Marin Decl."), Defendants claim that Craft approached Marin with a request to compose a collection of Latin songs that Craft would consider releasing on the Speed label, co-owned by Craft and
Following release of the Happy Man Sound Recording in 1968, Defendants assert that Marin worked with Craft to remove the vocal track from and shorten the length in order to create the Happy Soul Sound Recording, but that he did not have any involvement in the creation of the Happy Soul with a Hook Sound Recording or the Hippy Skippy Composition or Sound Recording. Id. at 23-24, ¶¶ 7-12. Marin's lack of authorization notwithstanding, Defendants state that Beatty composed the Hippy Skippy Composition and transferred it to Slew via written agreement signed by Beatty and Lewis, that Slew then sold the Hippy Skippy Composition to Eden, and that Eden subsequently registered for and obtained a copyright in the work on November 14, 1969. Id. at 23-24, ¶¶ 12-13; Otis Decl. Ex. T (1969 certificate of copyright registration, listing "Eden Music Corp. & Slew Music" as copyright claimants). Eden is a subsidiary of Clyde Otis, the founder of Defendant COMG. Defs.' 56.1 Counter at 24, ¶ 13.
The parties' theories of the facts diverge even further in or around April 1969 when, according to Defendants, Roulette Records, Inc. ("Roulette") "acquired Speed and Slew's entire Latin music catalog, which included the Happy Man Sound Recording, and all of the other Sound Recordings identified above." Id. at 24, ¶ 16. Having failed to locate a physical written
Defendants next contend that, on July 29, 1975, Fania Records, Inc. ("Fania") entered into a written agreement with Roulette (the "Roulette-Fania Agreement") to purchase "certain assets" from Roulette, including the Happy Man, Happy Soul, Happy Soul with a Hook, and Hippy Skippy Sound Recordings. Defs.' 56.1 Counter at 25, ¶ 18; see also Declaration of Scott Zarin (Doc. 156) ("Zarin Decl. II"), Ex. QQ (Roulette-Fania Agreement).
Fania later changed its name to Sonido around 1986 and, according to Defendants, entered into a written agreement dated July 22, 2005 in which Emusica purchased Sonido's assets (the "Sonido-Emusica Agreement"), including all four Sound Recordings and the rights to use the Speed trademark. Defs.' 56.1 Counter at 25, ¶¶ 18-19; see also Livingston Decl., Ex. W (Sonido-Emusica Agreement), Ex. X (Oct. 13, 2005 letter from Sonido addressed to performing rights organizations confirming execution and details of Sonido-Emusica Agreement).
Next, on November 16, 2007, Marin entered into an "Exclusive Administration Agreement" with Emusica (the "Marin-Emusica Agreement"), in which he assigned to Emusica all administration rights to the copyrights in a list of compositions that included the Happy Man Composition, in exchange for a $20,000 advance and an additional 80% royalty. Defs.' 56.1 Counter at 25, ¶ 20; Livingston Decl., Ex. Y (Marin-Emusica Agreement).
As described above, in February 2009, Emusica became party to the DNJ Settlement, in which Emusica purported to further clear its title to the Happy Man Composition and the Happy Man, Happy Soul, Happy Soul with a Hook, and Hippy Skippy Sound Recordings. See Livingston Decl., Ex. BB (DNJ Settlement).
Finally, in April 23, 2009, SE Music Acquisition, LLC — which soon thereafter changed its name to Codigo Music, LLC — entered into a written agreement to purchase the assets of Emusica (the "Emusica-Codigo Agreement"), which by that point included the administrative rights to the Happy Man Composition, the rights to all four Sound Recordings, and the Speed trademark. Defs.' 56.1 Counter at 25-26, ¶¶ 21-22; Livingston Decl., Ex. AA (Emusica-Codigo Agreement). Thus, as a result of the above transactions and the DNJ Settlement, Defendants Codigo and COMG maintain that they are the rightful owners and/or administrators of the rights in all of the musical compositions, sound recordings, and trademark at issue in this litigation. Defs.' 56.1 Counter at 26, ¶ 23.
The parties' respective chains of title are summarized in the below flow chart:
Plaintiff's Amended Complaint contains eleven causes of action against Codigo, COMG, and Craft. Amended Complaint (Doc. 36) ("Compl."). They are for:
Defendant Codigo asserts five counterclaims against Plaintiff. Codigo's Answer to Plaintiff's Amended Complaint, Affirmative Defenses, Counterclaim, and Cross-Claim (Doc. 46) ("Codigo Answer"). The counterclaims are for:
Defendant COMG asserts four counterclaims against Plaintiff. Counterclaims, Cross-Claim and Answer of Defendant COMG (Doc. 44) ("COMG Answer"). The counterclaims are for:
Finally, Defendant Craft asserts three counterclaims against Plaintiff. Answer
On April 29, 2015, Defendants Codigo and COMG jointly moved for partial summary judgment (Doc. 121) on all claims in the Amended Complaint asserted against them, as well as an award of attorney's fees. Memorandum of Law in Support of Joint Motion for Partial Summary Judgment (Doc. 126) ("Defs.' Br.") at 1, 3.
On June 5, 2015, Plaintiff cross-moved for partial summary judgment (Doc. 131) on (i) its sixth cause of action for a declaratory judgment against Codigo "as it relates to the musical compositions at issue," (ii) its eighth cause of action seeking to declare as void COMG's copyright registration in the Hippy Skippy Composition, (iii) its ninth, tenth, and eleventh cause of action seeking declaratory judgments and an injunction against Craft with respect to the 2004 Agreements, (iv) all five of Codigo's counterclaims, (v) all four of COMG's counterclaims, and (vi) all three of Craft's counterclaims. Pl.'s Br. at 4. Plaintiff also moves to strike all of Codigo's, COMG's, and Craft's unsupported affirmative defenses. Id. at 5.
Plaintiff opposes Codigo and COMG's joint motion in its entirety, and vice-versa. See generally Pl.'s Br; Defs.' Opp'n. Craft also opposes Plaintiff motion in its entirety. See generally Memorandum of Law in Opposition to Plaintiff's Cross-Motion for Summary Judgment (Doc. 142) ("Craft Br.").
To prevail on summary judgment, the movant must show that "there is no genuine dispute as to any material fact." FRCP 56(a). "An issue of fact is `genuine' if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Senno v. Elmsford Union Free Sch. Dist., 812 F.Supp.2d 454, 467 (S.D.N.Y.2011) (citing SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir.2009)). "A `material' fact is one that might `affect the outcome of the litigation under the governing law.'" Id. "The function of the district court in considering the motion for summary judgment is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists." Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir.2010). On a summary judgment motion, the district court "may not make credibility determinations or weigh the evidence.... `Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.'" Id. at 545-46 (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2007, 147 L.Ed.2d 105 (2000)).
The parties correctly agree that, as a matter of law, proof of ownership of the musical works is an essential element of all of the copyright infringement, unfair competition by misappropriation,
The parties do not dispute that all of the other musical works in this case are derivative of the Happy Man Composition. See, e.g., Pl.'s 56.1 ¶¶ 21-22; Pl.'s Br. at 25 (citing Defs.' Br. at 1 n.1 ("The principal works at issue in this lawsuit... are all derivative works of Happy Man.")); Defs.' Opp'n at 5 ("[T]he Happy Soul Sound Recording, the Happy Soul with a Hook Sound Recording, the Hippy Skippy Composition and the Hippy Skippy Sound Recording were all derived from and consist entirely of the Happy Man Composition and edits to the Happy Man Sound Recording....") (emphasis added). This fact is critical to the entire case, because it is axiomatic that the "consent of the copyright owner of a still-protected pre-existing work is necessary to render the derivative...work non-infringing." 1 Nimmer on Copyright § 3.06 (2015); see also Stewart v. Abend, 495 U.S. 207, 232, 110 S.Ct. 1750, 109 L.Ed.2d 184 (1990) ("Congress simply intended that a derivative work author may not employ a copyrighted work without the [original] author's permission...."). Since the original copyright owner has the exclusive right to creative derivative works, someone "who reproduces a derivative work without the authorization of the preexisting work's registered owner `violates ... the exclusive rights of the copyright owner... [and] is an infringer of the copyright.'" Mattel, Inc. v. Robarb's, Inc., 139 F.Supp.2d 487, 497 (S.D.N.Y.2001) (quoting 17 U.S.C. § 501(a)), on reconsideration in part, No. 00 Civ. 4866 (RWS), 2001 WL 797478 (S.D.N.Y. July 12, 2001); see also Cortner v. Israel, 732 F.2d 267, 272 (2d Cir.1984) (noting that a derivative composition does not infringe if created with consent of owner of underlying work).
Thus, ownership of the original pre-existing work here — the Happy Man Composition — came with the exclusive right to authorize all of the subsequent derivative works at issue — the Happy Man, Happy Soul, and Happy Soul with a Hook Sound Recordings, and the Hippy Skippy Composition and Sound Recording. Ownership of the Happy Man Composition is thus central to the resolution of the issues in the case.
With regards to that critical issue, Plaintiff argues that Craft was the rightful owner of the Happy Man Composition by virtue of an assignment from Marin,
Plaintiff points to some conduct on the part of Marin and Craft from which an inference of assignment may be made. Specifically, when construed in light most favorable to Plaintiff, three undisputed facts could be combined to plausibly support an inference that Marin assigned the Happy Man Composition to Craft. First, Marin claims that he demanded royalties from Craft but was never paid. Second, despite this alleged non-payment, Marin continued to assist Craft in creating the Happy Man and Happy Soul Sound Recordings. Third, Marin never took any legal action or any other steps to obtain royalties for use of the Happy Man Composition for roughly forty years, until 2007, when he purported to transfer administrative rights under the Marin-Emusica Agreement. See Marin Decl. ¶¶ 6-11, 14. Marin's continued participation in the face of non-payment followed by a long period of inaction could theoretically allow a reasonable juror to find that Marin assigned the Happy Man Composition to Craft upon its creation.
That said, and contrary to Plaintiff's argument, Craft's deposition testimony provides scant support for such an inference. Cf. Plaintiff's Omnibus Reply Memorandum of Law (Doc. 154) ("Pl.'s Rep.") 2 (arguing that Craft's testimony supports the finding of an assignment). Plaintiff repeatedly mischaracterizes Craft as explicitly testifying that Marin assigned the Happy Man Composition to him, but he said no such thing. Rather, Craft testified generally that he would usually obtain an assignment from songwriters in exchange for royalties, while (i) explicitly stating multiple times that he has no specific recollection of whether Marin assigned the Happy Man Composition, and (ii) frequently confusing Marin with Henry Stone, the producer who owned the studio at which the Happy Man Sound Recording was recorded, and from whom Craft claims he obtained rights to the sound recording
Meanwhile, Defendants' position plainly finds support in the record. Most obviously, a reasonable juror could credit Marin's explicit declaration that he never assigned the rights to the Happy Man Composition to Craft or anybody else until the Marin-Emusica Agreement in 2007. Marin Decl. ¶ 7. This declaration is corroborated by the BMI registration in Marin's name. See Livingston Decl. ¶ 8, Ex. Z. Furthermore, when the evidence is viewed in light most favorable to Defendants, Marin's consensual and continued involvement in creating the derivative sound recordings is not suggestive of an assignment of the Happy Man Composition, but instead could demonstrate merely that Marin authorized works derivative of a composition he continued to own.
Finally, though it is of course not controlling, the Court notes that Craft's own position in his opposition brief is that genuine issues of material fact exist as to whether he owned the musical works at the time of the 2004 Agreements. See Craft Br. at 18-20.
In sum, even though Plaintiff's position rests on a thin reed of evidence at best, "[t]he existence of a transfer or assignment of common law copyright...is a factual question of the author's intent" that must be resolved by a jury. Self-Realization Fellowship Church v. Ananda Church of Self-Realization, 206 F.3d 1322, 1328 (9th Cir.2000) (emphasis added) (citations omitted). "While a jury may conclude that on balance the evidence demonstrates that [Marin] had no intent to transfer to [Craft] his common law copyrights, at the summary judgment stage, a district court is entitled neither to assess the weight of the conflicting evidence nor to make credibility determinations." Id. (citation omitted). The Court thus holds that there is a genuine issue of material fact as to whether Marin held onto his initial ownership rights in the Happy Man Composition, or whether Marin assigned his ownership rights over to Craft or Speed Records.
"Sound recordings are `derivative' works of the preexisting musical composition, and to obtain a copyright in a sound recording one must secure a license from the copyright owner of the underlying work." In re Cellco P'ship, 663 F.Supp.2d 363, 369 n. 6 (S.D.N.Y. 2009); see also Pl.'s Br. at 32. Because the Sound Recordings at issue here were created prior to 1972, they are not protected by federal copyright law, but instead "are protected by state common law on copyright infringement." Arista Records LLC v. Lime Grp. LLC, 784 F.Supp.2d 398, 436 (S.D.N.Y.2011) (citing 17 U.S.C. § 301(c); Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 797 N.Y.S.2d 352, 830 N.E.2d 250, 263-64 (2005) (recognizing that New York common law protects pre-1972 sound recordings)). A claim for infringement pursuant to New York common law consists of two elements: (1) a valid copyright; and (2) unauthorized reproduction of the work protected by the copyright. See id.; Naxos, 797 N.Y.S.2d 352,830 N.E.2d at 266.
As discussed above, the identity of the owner of the Happy Man Composition, and thus the person or entity empowered to authorize derivative sound recordings, remains a disputed issue of fact. All of the most likely candidates, however — Marin, Craft, or Speed Records — were intimately involved in the creation of the Sound Recordings at issue here, and it is likely for that reason that no party explicitly asks the Court to hold that the Happy Man, Happy Soul, and Happy Soul with a Hook Sound Recordings were unauthorized derivative works. In fact, the parties are not that far off with their competing theories of ownership of these three Sound Recordings:
Plaintiff argues that the same (unproduced) written agreement between Marin and Craft that vested Craft with ownership of the Happy Man Composition also vested Craft with ownership of the Happy Man Sound Recording. Pl.'s Br. at 1. Plaintiff thus stakes out the position that, as the rightful owner of the Happy Man Composition and both the catalyst and financier for the Happy Man, Happy Soul, and Happy Soul with a Hook Sound Recordings, Craft was the exclusive owner of those works up until the 2004 Agreements. See id. at 31-35.
Plaintiff's position again relies exclusively on Craft's deposition testimony. Compared to his vague responses regarding the Happy Man Composition, Craft's testimony with regard to these three Sound Recordings is marginally more specific, but it ultimately remains a muddle that is easily amenable to conflicting interpretations. For example, regarding the Happy Man Sound Recording, Craft repeatedly testified that he "put [the recording session] together," "paid for the studio" and "paid of the session," would "tell everybody [at the recording session] what they [could] do," and specifically recalled "acquir[ing]" all rights in the recording from the producer who owned the studio, Henry Stone. See Declaration of Steven M. Kaplan (Doc. 122), Ex. F ("Craft Tr."), at 34-35, 48, 72-73, 78-79, 81.
Plaintiff also tries to claim that Craft directly claimed ownership over these Sound Recordings because Craft's testimony (i) indicates that his business relationship with Stanley Lewis was such that Lewis would own all of the "Latin" songs released on the Speed label and Craft would own all other songs released on Speed, and (ii) indicates Craft's belief that the songs at issue here were "rock" songs, not "Latin" songs. See Pl.'s Br. at 18-20 (citing Craft Tr. at 32-33, 53-55, 59-60, 116); see also Craft Tr. II at 68-69. This too is disputed by Defendants, who agree that Craft never owned Latin music, but point to Marin's statements that the Happy Man Sound Recording was "unquestionably
As for Defendants' theory, it appears to assume that the Speed record label obtained ownership of the three Sound Recordings upon their creation. Defs.' Br. at 3-4; see also Defs.' Opp'n at 9, 12 (arguing that Craft's only possible claim to ownership in the Sound Recordings would be through his partnership in Speed). Defendants do not articulate any specific explanation for this assumption, but presumably rely on the fact that the Happy Man, Happy Soul, and Happy Soul with a Hook Sound Recordings were all released on the Speed label. Defendants instead jump right to the conclusion that the Sound Recordings were transferred from Speed to Roulette in 1969 via the Roulette Acquisition. See id. While Defendants have been unable to produce any written agreement documenting this transaction, they rely on (i) Marin's declaration, which claims personal knowledge of the Roulette Acquisition, and (ii) the Billboard Article from April 1969, which reports a transaction in which Ethnic Tapes, Inc., a division of Roulette, "acquired the Speed catalog." See Defs.' 56.1 Counter at 24-25, ¶¶ 16-17; Billboard Article.
Plaintiff disputes that the Roulette Acquisition ever took place, and creates a genuine issue of material fact in doing so. In addition to the lack of any written agreement, Craft explicitly testified that he "never sold ... any of [his] product" to Roulette and never had any "contractual relations" with Roulette's owner, Morris Levy. Craft Tr. II at 45, 69. Craft also admitted, however, that he had "heard" Stanley Lewis had transferred Speed properties to Roulette without Craft's required authorization. Craft Tr. at 89-91. Plaintiff also piggybacks on Defendants' own assertion that the Roulette Acquisition involved only "Speed and Slew's entire Latin music catalog," Defs.' 56.1 Counter at 24, ¶ 16, again arguing that the Sound Recordings at issue were not Latin music, and thus were not included in the Roulette Acquisition as Defendants' themselves define it. See Pl.'s Rep. at 9-10.
Yet another factual dispute exists with respect to the Roulette-Fania Agreement from 1975. Unlike the Roulette Acquisition, Defendants have produced an actual copy of the agreement and represent that the Happy Man, Happy Soul, Happy Soul with a Hook, and Hippy Skippy Sound Recordings were among those assets transferred. See Defs.' 56.1 Counter at 25, ¶ 18 (citing Livingston Decl. ¶ 2); Roulette-Fania Agreement. Rather than dispute the existence of the agreement, Plaintiff instead plausibly contends that it did not actually effect the transfer of these particular Sound Recordings. First, Plaintiff points out that the Roulette-Fania Agreement,
All told, the Court is unable to weigh all of this conflicting evidence at this stage. There thus remains a significant number of genuine issues of material fact as to the pre-2004 ownership of the Happy Man, Happy Soul, and Happy Soul with a Hook Sound Recordings.
As works that were derivative of the original Happy Man Composition, the Hippy Skippy Composition and Sound Recording could not be validly copyrighted without authorization from the owner of the underlying work. Under any theory of ownership proposed here, however, the Hippy Skippy works were plainly not authorized by Marin, Craft, the Speed record label, or any other actor with a viable claim of ownership. Instead, it is undisputed that Harold Beatty wrote the composition and assigned it to the Slew label pursuant to a contract with Stanley Lewis — and no party even attempts to contend that such copying was authorized. See Defs.' Opp'n at 3-4 (noting both that Marin never transferred his ownership of the Happy Man Composition to anyone and that Beatty authored the Hippy Skippy Composition); Pl.'s Br. at 28 n.10 (noting Codigo's admission that Marin never authorized Beatty's composition); Pl.'s 56.1 ¶¶ 17-18 (noting that Craft was not aware of Beatty's composition).
There is thus no doubt that a cause of action exists to invalidate Eden's 1969 copyright registration in the Hippy Skippy Composition, because it is undisputed that this was an unauthorized derivative work. The rub is that this cause of action belongs to the current owner of the Happy Man Composition rights, which is of course the central and disputed factual issue in this case. Compare Defs.' Rep. at 6-8 (arguing that Plaintiff has no standing to invalidate the copyright registration because it has no ownership rights in the Happy Man Composition), with Pl.'s Rep. at 7-8 (arguing that the copyright registration should be invalidated because Plaintiff acquired the Happy Man Composition rights from Craft, who never authorized the Hippy Skippy Composition). For this reason, therefore, all copyright-related claims pertaining to the Hippy Skippy Composition and Sound Recording cannot be resolved on summary judgment.
Additionally, the Court notes some additional disputed factual issues. First, while Defendants maintain that Slew's rights in the Hippy Skippy Sound Recording were transferred in the Roulette Acquisition, Defs.' Opp'n at 5 (stating Roulette "acquired Speed and Slew's entire Latin music
It is undisputed that every one of Plaintiff's affirmative claims turns on the validity and enforceability of the 2004 Agreements between Plaintiff and Craft. Defendants and Craft, in opposing Plaintiff's summary judgment motion, together argue that there remain genuine issues of material fact with respect to (i) whether Craft actually entered into the October 2004 Agreement, and (ii) whether Craft can prevail on three affirmative defenses: fraud in the execution, undue influence, and unclean hands. See Defs.' Br at 6-13; Defs.' Rep. at 1-4; Craft Br. at 5-17. The Court finds that triable issues remain only with regard to the affirmative defenses of fraud in the execution and unclean hands.
First, with respect to basic issues of contract formation, both Defendants and Craft go to great lengths to attempt to convince the Court that Craft's deposition testimony is best construed as denying that he ever entered the 2004 Agreements. See Craft Br. at 5-6; Defs.' Rep. at 2-4. That may be so, but critically, this ex-post testimony is the only evidence that these parties rely on when arguing that Craft never executed the 2004 Agreements. The parties do not dispute, for example, that the contract's material terms are stated in "clear and unequivocal language," which means the Court cannot conclude that the parties failed to manifest intent to be bound. See McNamara v. Tourneau, Inc., 464 F.Supp.2d 232, 238 (S.D.N.Y.2006) ("To determine if the parties agreed on a contract's material terms, New York courts must first look to the written contract to assess whether it contains clear and unequivocal language or whether the language is ambiguous such that the parties could reasonably interpret it in different ways.") (citation omitted). And while Craft surely testified that he never entered into or signed the 2004 Agreements, neither Defendants nor Craft explicitly argue that the signatures on the documents themselves were forged or argue that copies of the documents submitted to the Court are inauthentic, let alone provide evidence of either contention. To the contrary, there is no evidentiary basis on which to conclude that the signatures on the 2004 Agreements do not belong to Craft,
That Craft signed the 2004 Agreements does not preclude them from being held as void based on proof of some fraudulent or wrongful conduct on Plaintiff's part, however. See, e.g., Da Silva v. Musso, 53 N.Y.2d 543, 444 N.Y.S.2d 50, 428 N.E.2d 382, 386 (1981) ("Under long accepted principles one who signs a document is, absent fraud or other wrongful act of the other contracting party, bound by its contents.") (emphasis added). Together, Defendants and Craft argue that three affirmative defenses apply to deem the 2004 Agreements unenforceable: (i) fraud in the execution, (ii) undue influence, and (iii) unclean hands. Craft Br. at 8; Defs.' Br. at 10-12.
"Fraud in the execution occurs where there is a `misrepresentation as to the character or essential terms of a proposed contract,' and a party signs without knowing or having a `reasonable opportunity to know of its character or essential terms.'" Hetchkop, 116 F.3d at 31-32 (quoting Restatement (Second) of Contracts § 163 comment a (1981)). "Fraud in the execution prevents the parties from achieving mutual assent and, thus, prevents the parties from forming a valid contract." Allen v. Chanel, Inc., No. 12 Civ. 6758 (LAP), 2015 WL 3938096, at *7 (S.D.N.Y. June 26, 2015); see also Hetchkop, 116 F.3d at 32 ("[F]raud in the execution, if established, renders a purported agreement void ab initio.") (citations omitted). It is an affirmative defense, for which the defense would bear the burden of proof at trial. See Trs. of Welfare Fund & Pension Fund of Local No. One, I.A.T.S.E. v. A. Terzi Prods., Inc., No. 97 Civ. 8262 (MGC), 1999 WL 33870, at *1 (S.D.N.Y. Jan. 25, 1999) (citing Hetchkop, 116 F.3d at 31, 33). But it is "only a
Craft highlights four draft documents produced by Plaintiff in discovery, each entitled "Deal Memo," which predated the 2004 Agreements and purportedly were given to Craft in order to inform him of the core terms of the transaction (collectively, the "Deal Memos"). See Craft Br. at 8-9; Declaration of Peter T. Salzler (Doc. 141) ("Salzler Decl."), Ex. M (Deal Memos). Each Deal Memo, the latest of which is dated October 25, 2004, states that Craft was to convey only 50% of his rights in seven specific albums, in exchange for a $2500 advance and a $1000 per-album payment upon physical production of each of the seven albums. Id. Similarly, a document dated October 5, 2004 that appears to be a draft of the full agreement (the "Draft Agreement") also obligates Craft to convey only 50% of his rights, but this document purports to cover all musical compositions and sound recordings that Craft owned, all in exchange for a $2000 advance. Salzler Decl., Ex. N (Draft Agreement). The final October 2004 Agreement, however, obligated Craft to convey 100% of his rights in all musical compositions and sound recordings that he owned for the exact same consideration outlined in the Deal Memos, leading Craft to accuse Plaintiff of a "surreptitious switching of material terms" constituting fraud in the execution. Craft Br. at 9 (citing Hetchkop, 116 F.3d at 32 ("[T]he defense may apply to the substitution of a document of the same kind where the new document introduced important terms that were materially different from those to which the party had agreed.").
Plaintiff replies that the Deal Memos cannot form the basis of a fraud theory because there is no evidence that Craft was ever sent the Deal Memos, pointing to the fact that Craft explicitly testified that he had never seen them, and Fuchs (Plaintiff's principal) testified that he had no recollection of sending them to Craft. See Pl.'s Rep. at 15. This is at least a disputed factual issue, however. For one thing, discovery produced an unsigned letter written by Fuchs and addressed to Craft, dated October 25, 2004, in which Fuchs writes that he "sent [Craft] a deal memo via the mail last week," but that Craft should "disregard" that memo and look to a new version of the memo that was "more complete" and enclosed with the letter. Salzler Decl., Ex. L. Fuchs also testified that he held roughly seven separate meetings with Craft during which the two negotiated deal terms, which suggests that at least the substance of the Deal Memos were communicated to Craft at some point. Fuchs Tr. at 48-52; see also id. at 68-69 (stating Fuchs's view of the importance of conveying terms of the deal to Craft); id. at 75:14-17 ("I have never created a deal point in the presentation of a contract that hadn't been discussed with the other party in advance."). Moreover, Craft testified that the only agreement he actually recalled entering into with Plaintiff contained terms that resemble the terms in the Deal Memos, again suggesting that Craft at least contemplated the substance of the Deal Memos during negotiations. See Craft Tr. at 163-69, 195-98 (discussing "[v]ery limited" deal with Plaintiff for "about six records" in which Plaintiff would have limited use of master recordings for four to five years in exchange for royalties); Craft Tr. II at 63-64 (testifying that his deal with Plaintiff was for "old stuff" that was not explicitly discussed at deposition).
Plaintiff also argues that the fraud-in-the-execution defense cannot prevail because there is no proof of Craft's "excusable ignorance of the contents of the writing signed," which is a required element of the defense. Hetchkop, 116 F.3d at 32 (citations omitted); see also Pl.'s Rep. at 15-16. "Proving excusable ignorance requires a showing that the party satisfied its basic responsibility of reading what it signed." McCaddin v. Se. Marine Inc., 567 F.Supp.2d 373, 380 (E.D.N.Y.2008) (citation and internal quotation marks omitted). "Excusable ignorance may be proven by presenting evidence that someone secretly changed an important term of the contract before the ignorant party signed it, and that the ignorant party lacked a reasonable opportunity to learn of the change before signing." A. Terzi Prods., Inc., 1999 WL 33870, at *2 (citing Hetchkop, 116 F.3d at 31-32).
There remains a genuine issue of fact as to whether Craft's ignorance of the terms of the October 2004 Agreement was excusable and not negligent. Plaintiff argues that there is no evidence that Craft read the Draft Agreement and, even if he did, it was dated October 5, 2004, meaning Craft had a reasonable opportunity in the three-week period between the draft and the final October 2004 Agreement, dated October 27, 2004, to review the final terms. Pl.'s Rep. at 15-16 & n.17. But the Court reiterates that Craft recalled signing a
The enforceability of the 2004 Agreements thus remains a disputed issue to be resolved at trial, because Defendants and Craft may be able to convince a reasonable juror that, despite Craft's signature on the final documents, the execution of those documents was fraudulent due to Plaintiff's misrepresentation of the essential terms.
To support both his affirmative claim for rescission and his affirmative defense seeking to vitiate the 2004 Agreements, Craft argues that he was essentially coerced into signing the agreements by virtue of Plaintiff's "undue influence." Craft Br. at 11-14; Craft Answer ¶¶ 103-08 (alleging that Plaintiff "unduly influenced Craft into entering into the [October] 2004 Agreement by utilizing its prior relationship with Craft so that he did not seek counsel to help negotiate an agreement that he did not fully understand"). "Under New York law, a party claiming that it was unduly influenced to enter a contractual relationship must prove that it contracted under circumstances indicating that a relationship of control existed and that the stronger of the two parties had exerted influence over the other to destroy the weaker party's free will and substitute for it the will of the [other]." Sun Forest Corp. v. Shvili, 152 F.Supp.2d 367, 393 (S.D.N.Y.2001) (citation and internal quotation marks omitted). "The burden is heavy: [A] party seeking to invalidate a contract must demonstrate that it was manipulated into signing a contract as a consequence of conduct worse than `even pressure, no matter how bad' because `undue influence is tantamount to a species of cheating.'" Id. (quoting Kazaras v. Mfrs. Tr. Co., 4 A.D.2d 227, 164 N.Y.S.2d 211, 221 (1957)). "Moreover, a court considering an undue influence defense must find that there was `an advantage sought and obtained for the actor or another in whom he has an interest.'" Id. (quoting Kazaras, 164 N.Y.S.2d at 220).
Craft supports his position by arguing that Fuchs, who admitted to having a long-term business relationship with Craft and meeting alone with him many times during the 1990s and 2000s, "knew or should have known" that Craft, an 84 year-old in 2004, "was susceptible to `confusion, forgetfulness, and influence in his decision making,'" a characterization taken from an affidavit submitted in this litigation by Craft's daughter, Carrie Craft. Craft Br. at 12 (quoting Affidavit of Carrie Craft
As the above makes clear, all of Craft's evidence of undue influence is circumstantial. "Although undue influence may be established through circumstantial evidence, such evidence must be of a substantial nature, and an inference of undue influence cannot be reasonably drawn from circumstances when they are not inconsistent with a contrary inference." In re Favaloro, 94 A.D.3d 989, 942 N.Y.S.2d 579, 583 (2012) (citations and internal quotation marks omitted). "Furthermore, [a] mere showing of opportunity and even of a motive to exercise undue influence does not justify a submission of that issue to the jury, unless there is in addition[al] evidence that such influence was actually utilized." Id. (citations and internal quotation marks omitted).
Here, Craft fails to present evidence that undue influence was actually utilized. While circumstantial evidence may demonstrate that Fuchs had the motive and opportunity to coerce Craft, and may even show that Craft was tricked into signing an agreement that he did not assent to, it does not show that Fuchs went beyond mere pressure and exercised actual dominion over Craft, forcing him to sign a document against his free will. See Hearst v. Hearst, 50 A.D.3d 959, 857 N.Y.S.2d 596, 600 (2008) (requiring "evidence that a defendant's influence amounted to a moral coercion, which restrained independent action and destroyed free agency," or evidence that "importunity which could not be resisted" forced the counter-party to "do that which was against his [or her] free will and desire, but which he [or she] was unable to refuse or too weak to resist") (citations and internal quotation marks omitted). Both Craft's counterclaim and affirmative defense based on undue influence must therefore fall to summary judgment.
Finally, Craft argues that Plaintiff's three claims for equitable relief asserted against him (two for declaratory judgment and one for an injunction) are barred by the doctrine of unclean hands. Craft Br. at 16-17. "`The doctrine of unclean hands applies when the complaining party shows that the offending party is guilty of immoral, unconscionable conduct and even then only when the conduct relied on is directly related to the subject matter in litigation and the party seeking to invoke the doctrine was injured by such conduct.'" Genger v. Genger, 76 F.Supp.3d 488, 502 (S.D.N.Y.2015) (quoting Kopsidas v. Krokos, 294 A.D.2d 406, 742 N.Y.S.2d 342, 344 (2002)).
Plaintiff has moved for summary judgment on Craft's three counterclaims pertaining to the 2004 Agreements and another, unproduced licensing agreement purportedly executed between Plaintiff and Craft. Pl.'s Br. at 43.
The Court has already determined that no genuine issues of fact exist as to Craft's contention that he was unduly influenced to enter into the October 2004 Agreement. His first counterclaim seeking rescission based on undue influence must therefore fall to summary judgment for that reason.
Craft's second counterclaim is for breach of contract, and it is premised on the theory that, if the Court were to find that the October 2004 Agreement were effective, Plaintiff has nevertheless breached its obligation under that agreement to (i) "compute and pay certain royalties to Craft," and (ii) "to exploit the compositions and sound recordings subject to the [October] 2004 Agreement" beyond the mere release of "three vinyl albums in over six years," the only such exploitation by Plaintiff that has taken place to date. Craft Answer ¶¶ 109-13. As Plaintiff rightly argues, there is no term in the October 2004 Agreement that obligates Plaintiff to exploit the transferred works with any sort of frequency, or indeed to exploit the works at all. See Pl.'s Br. at 46. There is, however, an undisputed obligation to pay royalties in the event of such exploitation, and there remains a disputed factual issue as to whether Craft was paid royalties owed to him under the agreement's terms. Compare Zarin Decl., Ex. V (royalty statement crediting $2,765.24 in royalties against Craft's $5,000 advance), with Craft Tr. 168, 185 (Craft testimony stating that he was never paid royalties owed under limited licensing deal), and id. at 195-98 (Craft testimony stating that he does not recognize royalty statement). Summary judgment is thus denied on Craft's second counterclaim, but only to the extent that it is premised on failure to pay royalties.
Craft says that his third counterclaim refers to Plaintiff's breach of its obligations under a "short term licensing agreement" to which Craft referred during deposition, but has never been produced. Craft Br. at 7. Craft does not build on his sparse testimony with any additional evidence or argument. Without the benefit of the agreement itself, and with only the aid of Craft's vague allusions to an agreement that say nothing about specific terms of the parties' respective obligations, no reasonable juror could find that Plaintiff is liable for breach of contract. The Court will therefore grant summary judgment on Craft's third counterclaim.
While Plaintiff's theory of title to the musical works culminates in the 2004 Agreements, Defendants' theory relies on a trio of post-2004 Agreements that Plaintiff attempts to call into question. None of Plaintiff's arguments, however, raises triable issues that are distinct from the factual disputes over the contested pre-2004 ownership of the works in question. In other words, these three agreements are clear and unambiguous on their own terms, and the only issue that remains is whether the purported transferor in each respective agreement validly owned the works being transferred prior to that agreement.
Plaintiff's second cause of action and Defendant Codigo's third counterclaim seek relief based on infringement of the Speed trademark. Plaintiff's claim is brought under New York common law, while Defendant Codigo's counterclaim is brought under the federal Lanham Act. Furthermore, Plaintiff's seventh cause of action seeks a judgment declaring Plaintiff to be the rightful owner of the Speed trademark. Plaintiff has moved for summary judgment on Defendant Codigo's Lanham Act counterclaim, and Defendant Codigo has moved for summary judgment on both Plaintiff's common law infringement claim and its claim for declaratory judgment. "The elements of a federal trademark-infringement claim and a New York unfair competition claim are almost indistinguishable, except that New York requires an additional element of bad faith" and proof of actual confusion if money damages are sought. Louis Vuitton Malletier, S.A. v. Hyundai Motor Am., No. 10 Civ. 1611 (PKC), 2012 WL 1022247, at *20 (S.D.N.Y. Mar. 22, 2012) (citation and internal quotation marks omitted); see also Advance Magazine Publishers, Inc. v. Norris, 627 F.Supp.2d 103, 112 (S.D.N.Y. 2008) ("The elements of Defendants' common law claims for trademark infringement and unfair competition are similar to their federal claims, except that New York unfair competition law also requires a showing of actual confusion and bad faith before monetary relief maybe awarded.") (citing Real News Project, Inc. v. Indep. World Television, Inc., No. 06 Civ. 4322 (GEL), 2008 WL 2229830, at *5-6 (S.D.N.Y. May 27, 2008); Nabisco v. Warner-Lambert Co., 32 F.Supp.2d 690, 702 (S.D.N.Y.1999)) (internal quotation marks omitted). Thus, Plaintiff's claim for declaratory judgment and Defendant Codigo's counterclaim under the Lanham Act require proof that the party asserting the claim (1) owned a valid and protectable trademark in the "Speed" name, and (2), "if so, whether it was probable that consumers would be confused" by the opposing party's use of that trademark. See Norris, 627 F.Supp.2d at 112 (citing Savin Corp. v. Savin Grp., 391 F.3d 439, 456 (2d Cir.2004)). In addition, Plaintiff's common law claim for trademark infringement, to the extent it seeks money damages, requires proof that (i) consumers were actually confused by Defendant Codigo's use of the Speed trademark (beyond a mere likelihood of confusion), or (ii) that Defendant Codigo showed bad faith in its unauthorized use of the mark. "Bad faith generally refers to an attempt by a junior user of a mark to exploit the good will and reputation of a senior user by adopting the mark with the intent to sow confusion between the two companies' products." Kati-Roll Co. v. Kati Junction, Inc., 33 F.Supp.3d 359, 368 (S.D.N.Y. 2014) (quoting Star Indus., Inc. v. Bacardi & Co., 412 F.3d 373, 388 (2d Cir.2005)).
Both parties exert little-to-no effort marshalling evidence in support of their trademark-related claims. Because both sides argue that the Speed trademark was transferred via the same, largely contested chain-of-title as the Sound Recordings, however, disputed issues of fact remain as to the first element of all the trademark claims here, i.e., whether the complainant actually owns a valid and protectable trademark in the Speed name. Thus, none of the following are amenable to resolution on summary judgment: (i) Plaintiff's common law infringement claim, to the extent it seeks an injunction, Compl. ¶ 50 (seeking both monetary and injunctive relief), (ii) Plaintiff's request for a declaratory judgment that it owns the Speed trademark, and (iii) Defendant Codigo's federal trademark infringement claim.
Defendant Codigo's third counterclaim under the Lanham Act purports to apply not only to the Speed trademark, but also to the musical compositions and sound recordings at issue here. Codigo Answer at 20, ¶ 62. The claim "alleges a violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), which prohibits false designations of origin of goods in interstate commerce. The main goal of § 43(a) of the Lanham Act is to prevent consumer confusion regarding the source of the goods or services produced." Sun Trading Distrib. Co. v. Evidence Music, Inc., 980 F.Supp. 722, 726-27 (S.D.N.Y.1997) (citing Thompson Med. Co. v. Pfizer, Inc., 753 F.2d 208, 215 (2d Cir. 1985)).
Although there are various types of Lanham Act claims, the only conceivable claim Defendant Codigo could be forwarding here is a claim for "reverse palming off,"
Plaintiff argues that the Lanham Act does not extend to musical compositions. Pl.'s Br. at 41. That is not quite right. It is true that "a musical composition cannot be protected as its own trademark under the Lanham Act." EMI Catalogue P'ship v. Hill, Holliday, Connors, Cosmopulos, Inc., 228 F.3d 56, 64 (2d Cir. 2000) (emphasis added); see also id. ("The different, source-identifying function of trademarks requires that a trademark in a musical composition not be coextensive with the music itself."). But like many other types of creative works protectable by the copyright laws, such as graphic designs, musical compositions may become sufficiently associated with a particular product or producer so as to garner trademark protection. See Oliveira v. Frito-Lay, Inc., 251 F.3d 56, 61 (2d Cir.2001) ("We can see no reason why a musical composition should be ineligible to serve as a symbol or device to identify a person's goods or services."). That said, Defendant Codigo has not pointed to a single piece of evidence demonstrating (i) that the two
The same paucity of evidence precludes Defendant Codigo's Lanham Act claim as it relates to sound recordings, and for the same reasons. No reasonable juror could find that the Sound Recordings at issue here are associated with Defendant Codigo as a producer of goods, i.e., that a valid trademark existed, or that Plaintiff misrepresented the source of the Sound Recordings in a manner likely to confuse consumers as to the source of those recordings. See, e.g., Agee v. Paramount Commc'ns, Inc., 59 F.3d 317, 327 (2d Cir. 1995) (dismissing Lanham Act claim based solely on fact that defendant "made unauthorized use" of sound recording without payment of royalty or proper credit, because there was no allegation that defendant "intentionally used" sound recording "to deceive the public, nor is there any factual allegation that the public was in any way confused as to the source of the sound recording as a result of [defendant's] failure to attribute that recording to [plaintiff]"); Freeplay Music, Inc. v. Cox Radio, Inc., 409 F.Supp.2d 259, 263-64 (S.D.N.Y.2005) (dismissing Lanham Act claim "based on the very acts of producing and broadcasting allegedly infringing works that form the factual underpinning of its copyright claims").
Both of Defendant Codigo's Lanham Act claims also fail for another reason. Because Defendant Codigo seeks money damages, Codigo Answer at 20, ¶¶ 64-65, "it is required either to proffer evidence of actual consumer confusion, or to proffer evidence of deceptive intent which results in a presumption of consumer confusion." E-Z Bowz, L.L.C. v. Prof'l Prod. Research Co., No. 00 Civ. 8670 (LTS), 2005 WL 535065, at *12 (S.D.N.Y. Mar. 8, 2005); see also Guthrie Healthcare Sys. v. ContextMedia, Inc., No. 12 Civ. 7992 (KBF), 2014 WL 185222, at *5 (S.D.N.Y. Jan. 16, 2014). Defendant Codigo has failed to set forth any evidence on this score, and thus has failed to raise a genuine issue of material fact to survive summary judgment on its Lanham Act claims for money damages. See E-Z Bowz, 2005 WL 535065, at *12 (granting summary judgment where complainant failed to proffer "sufficient evidence for a rational factfinder to conclude that there was actual consumer confusion or that [defendant] intended to deceive the public and engaged in deliberate conduct of an egregious nature"); see also Mapinfo Corp. v. Spatial Re-Eng'g Consultants, No. 02 Civ. 1008 (DRH), 2006 WL 2811816, at *11-12 (N.D.N.Y. Sept. 28, 2006) (finding "no genuine issue of material fact as to actual customer confusion" when complainant failed to identify an actual consumer or reseller who was confused by the alleged reverse palming off); Sun Trading, 980 F.Supp. at 729.
Plaintiff has moved to strike Defendants' affirmative defenses for which they have failed to adduce any evidence. Specifically, Plaintiff moves to strike (1) Defendants' joint affirmative defenses of equitable estoppel, unclean hands, acquiescence, laches, and statute of limitations, (2) Defendant Codigo's defenses of lack of trademark
Defendants do not attempt to point out evidence from the record that supports of any of these defenses. Instead, they respond only that Plaintiff, as the movant, has not satisfied its summary judgment burden by simply arguing that no evidence exists to support Defendants' affirmative defenses. Defs.' Opp'n at 23. But Defendants get the law backwards. "Where a plaintiff uses a summary judgment motion...to challenge the legal sufficiency of an affirmative defense — on which the defendant bears the burden of proof at trial — a plaintiff `may satisfy its Rule 56 burden by showing that there is an absence of evidence to support an essential element of the non-moving party's case.'" F.D.I.C. v. Giammettei, 34 F.3d 51, 54 (2d Cir.1994) (quoting DiCola v. SwissRe Holding (North America), Inc., 996 F.2d 30 (2d Cir.1993)). And since Defendants bear the burden of proving their affirmative defenses at trial, Plaintiff is not required to support its summary judgment motion with affidavits or other materials that tend to disprove the defenses. See, e.g., id. (citation omitted); Cont'l Airlines, Inc. v. Lelakis, 943 F.Supp. 300, 304-05 (S.D.N.Y.1996), aff'd, 129 F.3d 113 (2d Cir. 1997). Rather, where the non-movant "fails to introduce any evidence sufficient to support an essential element of a defense, the court may properly grant summary judgment dismissing such a defense as a matter of law." UMG Recording, Inc. v. Escape Media Grp., Inc., No. 11 Civ. 8407 (TPG), 2014 WL 5089743, at *18 (S.D.N.Y. Sept. 29, 2014) (citing In re Livent, Inc. Noteholders Secs. Litig., 355 F.Supp.2d 722, 728 (S.D.N.Y.2005)). Plaintiff's motion to strike ten of the eleven affirmative defenses listed above is therefore granted because there is no evidence to support these defenses. The one exception, which the Court will allow Defendants to try to establish at trial, is lack of trademark registration — that defense speaks for itself and is implicitly supported by the Defendants' evidence regarding their purported claim of title to the Speed trademark.
On the other hand, Plaintiff also seeks to dismiss Defendants' affirmative defenses of lack of ownership, lack of standing, and fraud because they purportedly "lack merit." Pl.'s Br. at 6. As the above discussion of the bevy of remaining triable issues should make clear, however, Defendants have adduced evidence from which a reasonable juror could rule in their favor on these defenses. Plaintiff's motion with respect to these three defenses is therefore denied.
Defendants request attorneys' fees under 17 U.S.C. § 505. Defs.' Br. at 17. Because Defendants' have not prevailed on the bulk of their summary judgment motion, nor on their affirmative counterclaims, their request is denied at this time.
Plaintiff's and Defendants' cross-motions for summary judgment are GRANTED in part and DENIED in part, as summarized in the charts below.
Defendants Codigo and COMG's Motion for Summary Judgment To Dismiss Plaintiff's Claims The Court's Ruling 1) Copyright infringement against Codigo DENIED 2) Trademark infringement against Codigo GRANTED with respect to money damages; DENIED with respect to injunctive relief 3) Unfair competition against Codigo regarding DENIED sound recordings 4) Unjust enrichment against Codigo and COMG DENIED 5) Misappropriation against Codigo and COMG DENIED regarding sound recordings 6) Declaratory judgment against Codigo DENIED regarding musical compositions and sound recordings 7) Declaratory judgment against Codigo DENIED regarding Speed trademark 8) Declaratory judgment against COMG DENIED regarding Hippy Skippy Composition
Plaintiff's Motion for Summary Judgment In Favor of Plaintiff's Claims The Court's Ruling 1) Declaratory judgment against Codigo DENIED regarding musical compositions and sound recordings 2) Declaratory judgment against COMG DENIED regarding Hippy Skippy Composition 3) Declaratory judgment against Craft regarding DENIED the 2004 Agreement 4) Declaratory judgment against Craft regarding DENIED the 2004 Amendment 5) Injunctive relief against Craft regarding the DENIED 2004 AgreementsTo Dismiss Defendant Codigo's Counterclaims The Court's Ruling 1) Declaratory and injunctive relief regarding DENIED DNJ Settlement and the musical compositions, sound recordings, trademark at issue 2) Copyright infringement DENIED 3) Lanham Act unfair competition GRANTED as to musical compositions; GRANTED as to sound recordings; DENIED as to Speed trademark 4) Unjust enrichment DENIED 5) Misappropriation regarding musical GRANTED as to musical compositions; compositions and sound recordings DENIED as to sound recordingsTo Dismiss Defendant COMG's Counterclaims The Court's Ruling 1) Declaratory and injunctive relief regarding DENIED DNJ Settlement and the musical compositions, sound recordings, trademark at issue 2) Unfair competition regarding musical GRANTED as to musical compositions; compositions and sound recordings DENIED as to sound recordings 3) Unjust enrichment DENIED 4) Misappropriation regarding musical GRANTED as to musical compositions; compositions and sound recordings DENIED as to sound recordingsTo Dismiss Defendant Craft's Counterclaims The Court's Ruling 1) Undue influence and rescission of 2004 GRANTED Agreements 2) Breach of contract regarding 2004 GRANTED to extent claim is based on obligation Agreements to "exploit" musical works; DENIED to extent claim is based on obligation to pay royalties 3) Breach of contract regarding licensing GRANTED agreement pre-dating 2004 Agreements
To Strike Affirmative Defenses The Court's Ruling 1) Codigo and COMG's Joint Defenses GRANTED 2) Codigo's Defenses DENIED as to lock of ownership, lack of standing, fraud, and lack of trademark registration GRANTED as to all other affirmative defenses 3) COMG's Defenses GRANTED
The parties are directed to appear for a status conference on
It is SO ORDERED.
