United States Court of Appeals
For the First Circuit
No. 05-2806
LATIN AMERICAN MUSIC CO., INC.
and ASOCIACIÓN DE COMPOSITORES
Y EDITORES DE MÚSICA LATINOMERICANA,
Plaintiffs, Appellants,
TURABO RADIO CORP., ET AL.
Plaintiffs,
SOUTHERN MUSIC PUBLISHING CO., INC., ET AL.,
Plaintiffs, Appellees
v.
THE ARCHDIOCESE OF SAN JUAN OF THE
ROMAN CATHOLIC & APOSTOLIC CHURCH, ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Juan M. Pérez-Giménez, U.S. District Judge]
Before
Lipez, Circuit Judge,
Selya, Senior Circuit Judge,
and DiClerico, Jr.,* District Judge.
Jane Becker Whitaker, with whom Law Offices of Jane Becker
Whitaker, and Angel N. Caro, were on brief, for appellants.
Richard H. Reimer, with whom Diego A. Ramos, Fiddler González
& Rodriguez, PSC, Stephen S. Young, and Holland & Knight, LLP, were
on brief for appellee American Society of Composers, Authors and
Publishers.
Barry I. Slotnick, with whom Jacques Rimokh, Loeb & Loeb, LLP
*
Of the District of New Hampshire, sitting by designation.
and Adsuar Muñiz Goyco & Besosa, PSC, were on brief for appellees,
Southern Music Publishing Co., Inc., et al.
August 16, 2007
DiClerico, District Judge. Latin American Music Company
("LAMCO") and Asociación de Compositores y Editores de Música
Latino Americana ("ACEMLA") brought suit in 1996, alleging that the
Archdiocese of San Juan of the Roman Catholic and Apostolic Church,
through its two radio stations, along with ten other radio
broadcasters, were infringing their copyrights in fifty-one songs.1
The case then expanded to include other claims and parties and was
consolidated with four related cases, which together involved
copyrights to more than five hundred songs. LAMCO and ACEMLA
appeal decisions by the district court that denied their
infringement claims as to five songs; allocated half of the
obligation to pay for a special master's fees to LAMCO and ACEMLA;
dismissed their claims, counterclaims, and defenses as a sanction;
and held that they were infringing copyrights owned by other
parties.
1
The original defendants were the Archdiocese d/b/a WORO-FM
and WKVM-AM, Isabela Broadcasting Co. d/b/a WKSA-FM and WISA-AM,
Kelly Broadcasting System, Corp. d/b/a WNIK-FM and WNIK-AM, Ramon
Rodriguez & Associates, Inc. d/b/a WCFI-FM, Bestov Broadcasting
System, Corp. d/b/a WIAC-AM and WIAC-FM, HQ-FM 103, Inc. d/b/a
WCHQ-FM, AERCO Broadcasting, Corp. d/b/a WQBS-AM, Tommy Muñiz
Productions, Inc. d/b/a WLUZ-AM, VI-MAN Broadcast System, Corp.
d/b/a WEGA-AM, ABG Realty & Investment Corp. d/b/a WRSJ-AM, and
Sensacion Broadcasting Corporation d/b/a WSAN-FM.
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I.
Luis Raul Bernard founded LAMCO, a music publisher based
in New York, and ACEMLA, a performance rights society2 affiliated
with LAMCO and based in Puerto Rico. Bernard is the chief
executive officer, director, and majority stockholder of both LAMCO
and ACEMLA. Because LAMCO and ACEMLA are closely aligned in this
case, we will refer to them as "LAMCO/ACEMLA," unless individual
differentiation is necessary.
In response to the infringement suit brought against them
by LAMCO/ACEMLA, the Archdiocese and the other radio broadcaster
defendants (collectively referred to as "the Broadcasters") brought
counterclaims against LAMCO/ACEMLA. They also filed third-party
complaints against Broadcast Music, Inc., Peer International
Corporation, and the American Society of Composers, Authors, and
Publishers ("ASCAP"), seeking indemnification and a defense against
the claims brought by LAMCO/ACEMLA.3 ASCAP and LAMCO/ACEMLA
disputed the rights to five of the songs listed in the LAMCO/ACEMLA
2
"Such organizations . . . obtain rights to musical
compositions, license them (often through blanket licenses), and
collect royalties from sub-licenses." Venega-Hernandez v.
Asociacion De Compositores y Editores De Música LatinoAmericana,
424 F.3d 50, 52 (1st Cir. 2005).
3
A more detailed presentation of the complex procedural
history of this case can be found in the district court's orders.
See Latin Am. Music Co. v. Archdiocese of San Juan of the Roman
Catholic & Apostolic Church, 2005 WL 1847013 (D.P.R. Aug. 2, 2005);
Latin Am. Music Co. v. Archidocese of San Juan, 194 F. Supp. 2d 30
(D.P.R. 2001); Peer Int'l Corp. v. Latin Am. Music Corp., 161 F.
Supp.2d 38 (D.P.R. 2001).
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complaint and agreed that resolution of the ownership and copyright
issues as to those songs could serve as a roadmap for resolving the
same issues as to the other songs disputed by the parties. ASCAP
and LAMCO/ACEMLA filed motions for partial summary judgment. The
district court granted ASCAP's motion, dismissing LAMCO/ACEMLA's
infringement claims on all five songs.
Several music publishers (collectively referred to as
"the Publishers") brought claims against LAMCO/ACEMLA, alleging
that they owned or controlled copyrights to 468 songs that
LAMCO/ACEMLA were infringing.4 The Publishers moved for summary
judgment on their infringement claims. LAMCO/ACEMLA disputed the
rights to 294 of the songs claimed by the Publishers and moved for
summary judgment as to infringement of those copyrights. As to the
remaining 174 songs, LAMCO/ACEMLA acknowledged that they had been
included in an ACEMLA catalog in error but denied infringement. In
response to the motions, the district court summarized the bases of
the parties' claims of ownership and the applicable law but
reserved judgment on infringement pending review of the ownership
issues by a special master.
On March 31, 2003, noting that "the present copyright
cases are complicated and extremely fact intensive," the district
4
The music publishers are Peer International Corporation, Peer
International Corporation of Puerto Rico, Southern Music Publishing
Company, Inc., Peermusic Ltd., Sonido, Inc. d/b/a FAF publishing,
EMI Catalogue Partnership, EMI April Music, Inc., and Broadcast
Music, Inc.
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court appointed a special master to examine the documentation
pertaining to the chains of title as to all of the songs at issue
in the consolidated cases. The district court directed the special
master to make recommendations as to issues of authorship,
ownership, and compliance with statutory requirements, whether the
copyrights for the songs at issue had been infringed, and if so, by
whom, and a recommendation on LAMCO/ACEMLA's allegations of missing
royalty payments. The special master's compensation was set at an
hourly rate of $565. The district court ordered the Publishers to
pay half of the fees and costs and LAMCO/ACEMLA to pay the other
half and ordered each group to file a bond with the court in the
amount of $37,500, within ten days following entry of the order.
During the course of the litigation, LAMCO/ACEMLA
repeatedly failed to meet court-ordered deadlines and obligations,
including posting the bond. On October 13, 2004, the district
court issued an ultimatum, granting a final thirty-day extension of
time for LAMCO/ACEMLA to post the bond and warning that failure to
comply would result in sanctions which could include dismissal of
their claims and affirmative defenses. Nearly nine months later,
on August 2, 2005, the district court concluded that LAMCO/ACEMLA
had failed to comply with its order and dismissed their claims,
counterclaims, and affirmative defenses in all of the consolidated
cases.
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On May 10, 2004, the special master issued his report and
recommendation. The district court approved and adopted the
special master's report and recommendation, in part, with
modifications as to the ownership of rights to certain songs, and
ordered a hearing to resolve a question about notice and good faith
with respect to ownership of rights in other songs. With respect
to the songs for which the special master's report and
recommendation was approved, the district court granted the
Publishers' motion for summary judgment on copyright infringement
against LAMCO/ACEMLA. The order also assessed damages in the
amount of $313,500 and allowed the Publishers to file an
application for reasonable attorneys' fees and costs.
Following a hearing on ownership issues for the songs
that were not resolved by the special master's report and
recommendation, the district court determined that the Publishers
also owned the copyrights to those songs. The court granted the
Publishers' motion for summary judgment as to their infringement
claims on those songs and awarded damages in the amount of $29,250.
The court also granted the Publishers' motion for a permanent
injunction against future infringement by LAMCO/ACEMLA and resolved
other issues that were then pending. Based on those
determinations, the district court entered judgment as to the
claims and counterclaims in the consolidated cases. LAMCO/ACEMLA
appealed.
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II.
On appeal, LAMCO/ACEMLA challenge the district court's
decisions holding that LAMCO/ACEMLA did not own copyrights in five
songs claimed by ASCAP-member publishers, apportioning fifty
percent of the special master's fees to LAMCO/ACEMLA, sanctioning
them for failing to post a bond as ordered, concluding that they
lacked standing to seek rescission of copyright assignments, and
holding that authorizing use of songs constitutes copyright
infringement. ASCAP and the Publishers oppose LAMCO/ACEMLA's
arguments on appeal.
A. Summary Judgment on Five Songs
ASCAP sought partial summary judgment on LAMCO/ACEMLA's
infringement claims against the Broadcasters as to five songs,
asking that those five claims be dismissed.5 LAMCO/ACEMLA sought
partial summary judgment that they held the performing rights
licenses to the same five songs. The disputed five songs are:
"Caballo Viejo" by Simón Díaz, "Patacón Pisa'o" by Ramon A.
Chaverra, "Ojos Chinos" by Rogelio "Kito" Vélez, and "Te Sigo
Quieriendo" and "Una Tercera Persona" by Luz C. Tirado.
5
ASCAP is a performing rights society that licenses "the
public performance of nondramatic musical works on behalf of
copyright owners of such works." 2 Melville B. Nimmer & David
Nimmer, Nimmer on Copyright § 8.19 at 8-268.47 (2005) (quoting 17
U.S.C. § 101). ASCAP can grant only non-exclusive licenses on
behalf of its members and does not own the copyrights to the works
of its members. Id. at 8-269.
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The district court concluded that as to four of the
songs, "Caballo Viejo," "Patacón Pisa'o," "Te Sigo Quieriendo," and
"Una Tercera Persona," ASCAP members held the copyrights, which
precluded LAMCO/ACEMLA's infringement claims arising from those
songs. With respect to the fifth song, "Ojos Chinos," the district
court determined that LAMCO/ACEMLA had a non-exclusive license,
which might entitle them to receive payments from the Broadcasters
but did not support standing to maintain a copyright infringement
claim. The court also held that although LAMCO/ACEMLA recorded
their agreement with the composer's heirs to a non-exclusive
license for all performing rights to "Ojos Chinos," the recording
did not comply with the requirements of 17 U.S.C. § 205(c) and,
therefore, did not provide constructive notice of the license.
Based on those conclusions, the court dismissed LAMCO/ACEMLA's
infringement claims based on the five disputed songs.
LAMCO/ACEMLA appeal that decision.
We review a district court's summary judgment decision de
novo, using the same standard that governed below. Ruiz-Rosa v.
Rullan, 485 F.3d 150, 155 (1st Cir. 2007). Summary judgment is
appropriate when the facts properly supported by the record and
taken in the light most favorable to the non-moving party "show
that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law." Fed. R.
Civ. P. 56(c). Cross motions for summary judgment do not change
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the standard. Specialty Nat'l Ins. Co. v. OneBeacon Ins. Co., 486
F.3d 727, 732 (1st Cir. 2007). To prevail on a copyright
infringement claim, "two elements must be proven: (1) ownership of
a valid copyright, and (2) copying of constituent elements of the
work that are original." T-Peg, Inc. v. Vt. Timber Works, Inc.,
459 F.3d 97, 108 (1st Cir. 2006) (internal quotation marks
omitted); accord Brown v. Latin Am. Music Co., ___ F. ___, 2007 WL
2253543, *3 (1st Cir. Aug. 7, 2007).
1. "Caballo Viejo"
It is undisputed that the composer, Simón Díaz, granted
the rights to "Caballo Viejo" to Selemúsica, C.A. through an
agreement dated September 29, 1981. Selemúsica entered agreements
with West Side Music Publishing, Inc. that granted West Side the
right to represent Selemúsica in the United States and its
territories. West Side registered the copyright for "Caballo
Viejo" in 1983, showing Selemúsica as the copyright owner.
LAMCO/ACEMLA based their claim to "Caballo Viejo" on
their agreements with West Side. In an agreement dated May 15,
1981, West Side granted LAMCO/ACEMLA the photomechanical rights and
the exclusive rights to publish and license performance of "Caballo
Viejo" for a five-year term. West Side and LAMCO/ACEMLA also
entered an exclusive performing rights agreement on January 3,
1982. LAMCO/ACEMLA recorded the 1981 agreement on December 17,
1986.
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ASCAP asserted its claim to "Caballo Viejo" also based on
the rights held by West Side. West Side entered an agreement with
Barnegat Music Corporation in 1989, which included the rights to
collect performing fees and royalties for "Caballo Viejo." West
Side and Barnegat merged in 1993. Barnegat had been a member of
ASCAP since 1984. On December 2, 1986, before LAMCO/ACEMLA
recorded their 1981 agreement with West Side, the Copyright Royalty
Tribunal determined that "[t]he Settling Parties [which include
ASCAP] showed that Selemusica, C.A. conveyed its rights to Barnegat
Music Corp., an ASCAP member."6 Final Determination of the
Distribution of the 1984 Jukebox Royalty Fund, CRT No. 85-1-84JD,
1986 WL 116931, 51 Fed. Reg. 43,455, 43,459 (CRT Dec. 2, 1986).
The district court agreed with the Tribunal that Barnegat
held the rights to "Caballo Viejo" but came to that conclusion
based on a somewhat different chain of title. The court concluded
that Hector Varona, the president of West Side, verbally terminated
the 1982 agreement with LAMCO/ACEMLA, thereafter did not accept
royalty payments sent to him, and refused to extend the 1981
agreement with LAMCO/ACEMLA. Based on those circumstances, the
district court held, based on the summary judgment record, that the
rights to "Caballo Viejo" were transferred from the composer to
6
ASCAP relies on the Tribunal's finding, while LAMCO/ACEMLA
denigrate it. Neither side cites authority as to what weight the
Copyright Royalty Tribunal's finding should be given. We will not
explore the preclusive effect of that determination in the absence
of appropriately supported briefing by the parties.
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Selemúsica, to West Side, and then to Barnegat, an ASCAP member.
The court ruled that ASCAP was entitled to collect performance
royalties for the song.
On appeal, LAMCO/ACEMLA argue that the district court
erroneously concluded that West Side rescinded the 1982 agreement
with LAMCO/ACEMLA and assert that under the 1982 agreement,
LAMCO/ACEMLA continue to own the rights to "Caballo Viejo."
LAMCO/ACEMLA also argue that Varona, on behalf of West Side, could
not terminate the 1982 agreement verbally because all transfers of
copyright must be in writing. See 17 U.S.C. § 204(a). ASCAP
contends that West Side's entire agreement with LAMCO/ACEMLA
expired at the end of the 1981 agreement's five-year term and was
not renewed.
The summary judgment record is far from clear as to how,
when, or if the 1982 agreement was terminated. The record shows
that the 1981 agreement between LAMCO/ACEMLA and West Side expired
at the end of its five-year term in 1986.7 The 1982 agreement
between LAMCO/ACEMLA and West Side, however, did not include a time
limit. In the 1982 agreement, West Side "transfer[red] and cede[d]
to ACEMLA the exclusive rights to license in the territory or
territories of United States, Puerto Rico and Dominican Republic
7
There is some evidence that the term was extended for a few
months, which does not affect this decision.
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all the rights to public performance which have been assigned to
West Side and other [sic] which may be assigned in the future . .
. ."
Although the district court concluded that Varona
verbally terminated the 1982 agreement, his testimony suggests that
he did not remember or clearly understand the distinctions between
the 1981 and 1982 agreements and that he was not sure when or how
he terminated the 1982 agreement. Further, even if he did intend
to terminate the 1982 agreement, that action would be effective
only if the exclusive license, granted in the 1982 agreement, could
be terminated verbally and unilaterally. The district court's
order does not cite authority to support either theory.8
Therefore, the record as it pertains to "Caballo Viejo"
demonstrates that material facts remain in dispute so that ASCAP
was not entitled to summary judgment as to that song.
2. "Patacón Pisa'o"
Ramon A. Chaverra wrote "Patacón Pisa'o" in 1984. He
conveyed his copyrights to a Colombian music publisher, Prodemus,
in February of 1984. Prodemus then conveyed to Música Unica
Publishers the right to represent Prodemus in the United States and
Puerto Rico, which gave Música Unica the rights to authorize and
license "Patacón Pisa'o." Música Unica obtained a copyright
registration certificate for "Patacón Pisa'o" on September 17,
8
We take no position as to either of these disputed issues.
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1985. Música Unica, operating under the name Unimúsica, is an
ASCAP member and has a licensing agreement with ASCAP.
LAMCO/ACEMLA's claim to rights for "Patacón Pisa'o" was
based on a separate line of agreements. On September 23, 1985,
Chaverra, the composer, entered an agreement with Edinmúsica, LDT,
transferring all title and licensing authority for "Patacón Pisa'o"
as interpreted by another performer. On June 2, 1986, Edinmúsica
and LAMCO/ACEMLA obtained a copyright registration for the words
and music for "Patacón Pisa'o." In 1994, Chaverra terminated his
agreement with Edinmúsica and entered an agreement with
LAMCO/ACEMLA, transferring the exclusive rights to publish "Patacón
Pisa'o" and non-exclusive rights to collect performance royalties.
Chaverra also signed an affidavit, stating that LAMCO/ACEMLA
represented his interests. On November 21, 1994, LAMCO/ACEMLA
recorded Chaverra's affidavit and their agreement in the Copyright
Office.
The district court concluded that because Música Unica
never recorded its agreement with Chaverra, LAMCO/ACEMLA was the
first to record. The district court held, however, that Música
Unica’s copyright registration certificate for "Patacón Pisa'o"
provided constructive notice of Música Unica’s claim to the song.
For that reason, LAMCO/ACEMLA could not satisfy the good faith and
without notice requirements of 17 U.S.C. § 205(d). LAMCO/ACEMLA
dispute that result, arguing that the registration, in Música
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Unica’s name, did not provide constructive notice that ASCAP had
the right to license the song.
The recording statute, 17 U.S.C. § 205, provides the
process for "the Copyright Office to accept for recordation any
document pertaining to a copyright." 2 Nimmer on Copyright, supra,
§ 7.25, 7-233. Section 205 "is relevant primarily to providing
notification of transfers of copyright ownership; hence, it is
interwoven with the inquiry over what constitutes constructive
notice of ownership and accordingly, when a subsequent transferee
may prevail over a prior transferee." Id. Section 205(d)
provides:
[a]s between two conflicting transfers, the
one executed first prevails if it is recorded
in the manner required to give constructive
notice under [17 U.S.C. § 205(c)], within one
month after its execution in the United States
or within two months after its execution
outside the United States, or at any time
before recordation in such manner of the later
transfer. Otherwise the later transfer
prevails if recorded first in such manner, and
if taken in good faith, for valuable
consideration or on the basis of a binding
promise to pay royalties, and without notice
of the earlier transfer.
A copyright registration certificate in the Copyright Office
provides "constructive notice as to the ownership of the copyright
and the facts stated in the registration certificate." Saenger
Org., Inc. v. Nationwide Ins. Licensing Assocs., Inc., 119 F.3d 55,
67 (1st Cir. 1997); see also Johnson v. Jones, 149 F.3d 494, 505
(6th Cir. 1998) ("Constructive notice of a valid copyright is
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presumed upon registration."). Under federal copyright law,
remedies for infringement are tied to copyright registration, which
provides incentive to owners to register copyrights and "also
provides potential infringers with an incentive to check the
federal register." Id.; cf. Gaiman v. McFarlane, 360 F.3d 644, 655
(7th Cir. 2004) (holding that co-authors do not have incentive to
check the federal copyright register as to ownership claimed by
their collaborators).
To meet the § 205(d) requirements and prevail on summary
judgment as the first to record, LAMCO/ACEMLA had to provide
undisputed facts that they recorded the transfer from Chaverra in
good faith and without notice of the earlier transfer to Música
Unica. It is undisputed, however, that Música Unica obtained a
certificate of copyright registration for "Patacón Pisa'o" in
September of 1985, days before Chaverra entered an agreement with
Edinmúsica transferring rights to the song, and almost two years
before Edinmúsica and LAMCO/ACEMLA obtained a copyright
registration for the song. At the time LAMCO/ACEMLA entered into
their transfer agreement with Chaverra, a review of the Copyright
Office register would have revealed that Música Unica was listed as
the copyright owner. Música Unica's registration certification for
"Patacón Pisa'o," therefore, provided notice that prior
transactions existed relating to the copyright for "Patacón
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Pisa'o," regardless of what entity currently might claim those
rights.
LAMCO/ACEMLA argue for a different rule that would base
constructive notice for purposes of § 205(d) on recording the
transfer to the current copyright owner, focusing on identification
of the current owner as opposed to notice of prior transfers.
Because such an interpretation would appear to alter the existing
legal standard, we are not persuaded to adopt LAMCO/ACEMLA's
argument. See, e.g., Pasdon v. City of Peabody, 417 F.3d 225, 228
(1st Cir. 2005) (declining invitation to expand standard in the
absence of supporting legal authority); Plumley v. S. Container,
Inc., 303 F.3d 364, 371 (1st Cir. 2002) (same). The district court
was correct in concluding, based on the record presented and §
205(d), that LAMCO/ACEMLA had notice of Música Unica’s copyright
claim to "Patacón Pisa'o," so that § 205(d) did not apply to give
LAMCO/ACEMLA priority and ASCAP's claim prevailed over
LAMCO/ACEMLA's claim.
3. "Ojos Chinos"
Regarding "Ojos Chinos," the district court concluded
that LAMCO/ACEMLA had received and recorded their license before
Southern Music Publishing Company, Inc. ("Southern") (an ASCAP
member) recorded, giving LAMCO/ACEMLA priority. The court held,
however, that because LAMCO/ACEMLA held only a non-exclusive
license, they lacked standing to bring a copyright infringement
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claim. The district court also stated that the transfer agreement
LAMCO/ACEMLA recorded did not meet the specificity requirements of
17 U.S.C. § 205(c) and would not serve as constructive notice of
LAMCO/ACEMLA's rights to the song.
In their appellate brief, LAMCO/ACEMLA challenge only the
court's ruling on the specificity requirements of § 205(c). In
response, ASCAP notes that no dispute exists that a non-exclusive
license does not provide standing to sue for infringement and does
not address the district court's statements about the specificity
requirements of § 205(c). LAMCO/ACEMLA filed a reply brief in
which they assert, for the first time, that the district court
failed to realize that the composer's heirs granted them an
exclusive license to "Ojos Chinos." We do not consider issues
raised for the first time in a reply brief, and therefore, do not
address LAMCO/ACEMLA's late claim that they were granted an
exclusive license. Guillemard-Ginorio v. Contreas-Gomez, ___F. 3d
___, 2007 WL 1675837 at *8 n.3 (1st Cir. June 12, 2007) (citing
Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 299 (1st Cir.
2000)).
The district court's ruling that as non-exclusive
licensees LAMCO/ACEMLA lacked standing to bring an infringement
claim is not disputed and is correct. 17 U.S.C. § 501(b) ("The
legal or beneficial owner of an exclusive right under a copyright
is entitled, subject to the requirements of section 411, to
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institute an action for any infringement of that particular right
committed while he or she is the owner of it." (emphasis added)).
See also, e.g., T-Peg, 459 F.3d at 108 ("One infringes a copyright
when he or she violates one of the exclusive rights to a work held
by a copyright owner, and the owner has the right to sue for
infringement."); Itar-Tass Russian News Agency v. Russian Kurier,
Inc., 153 F.3d 82 91 (2d Cir. 1998) ("Under United States law, an
owner . . . may sue for infringement in a United States court only
if it meets the standing test of 17 U.S.C. § 501(b), which accords
standing only to the legal or beneficial owner of an 'exclusive
right.'"); I.A.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996)
("[A] person holding a nonexclusive license has no standing to sue
for copyright infringement, . . . ."). The district court's
additional statements about the specificity requirements of §
205(c) are not material to the decision that LAMCO/ACEMLA lacked
standing to sue for infringement. Therefore, we will not delve
into whether LAMCO/ACEMLA's recording satisfied § 205(c).
4. "Una Tercera Persona" and "Te Sigo Queriendo"
Luz C. Tirado wrote "Una Tercera Persona" and "Te Sigo
Queriendo" in 1968 and transferred her rights in the songs to
Southern, an ASCAP member, on November 20 and December 17, 1968,
respectively. The transfer agreements also granted Southern the
right to renew the copyrights and a power of attorney to act on
Tirado's behalf in obtaining the copyright renewals. Southern
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registered the copyright to "Una Tercera Persona" on February 6,
1969, and registered the copyright to "Te Sigo Queriendo" on July
29, 1969. Southern did not record the registrations. Under the
terms of the transfer agreements with Tirado, Southern, acting on
behalf of Tirado, executed assignments of the renewal rights to
"Una Tercera Persona" and "Te Sigo Queriendo" and obtained
copyright renewal registration certificates for "Una Tercera
Persona" on June 11, 1996, and for "Te Sigo Queriendo" on June 13,
1997.
On December 2, 1980 Tirado transferred the copyrights to
153 songs, including "Una Tercera Persona," to LAMCO/ACEMLA, and
they recorded the transfer agreement with the Copyright Office on
February 8, 1985. Tirado then granted LAMCO/ACEMLA the non-
exclusive right to collect royalties on Tirado’s behalf from the
public performances of the 153 songs transferred by the December 2,
1980 agreement, and the royalties agreement was recorded on
February 23, 1990. On September 25, 1986, Tirado transferred her
rights in "Te Sigo Queriendo" to LAMCO/ACEMLA, and they obtained
copyright registration on February 23, 1990.
On appeal, LAMCO/ACEMLA contend that the district court
erred in crediting the 1996 and 1997 transfers of renewal rights to
Southern because the assignments were not actually signed by
Tirado. They rely on 17 U.S.C. § 205(a), which provides the
requirements for recording copyright documents. LAMCO/ACEMLA fail
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to explain, however, why the recording statute, § 205(a), is
pertinent to the validity of the 1996 and 1997 transfers. In
contrast, 17 U.S.C. § 204(a), pertaining to execution of transfers
of copyright ownership, provides that "[a] transfer of copyright
ownership, other than by operation of law, is not valid unless an
instrument of conveyance, or a note or memorandum of the transfer,
is in writing and signed by the owner of the rights conveyed or
such owner's duly authorized agent." (Emphasis added.) As
LAMCO/ACEMLA have failed to show that Southern was not Tirado's
"duly authorized agent," the district court correctly credited the
1996 and 1997 transfers to Southern.
LAMCO/ACEMLA also challenge the district court's
conclusion that Southern's 1969 certificates of registration for
"Una Tercera Persona" and "Te Sigo Queriendo" provided notice of
conflicting ownership interests in those songs. At the time
LAMCO/ACEMLA entered into agreements to obtain the copyrights to
"Una Tercera Persona" and "Te Sigo Queriendo," a review of the
Copyright Office register would have revealed the registration
certificates for those songs, giving LAMCO/ACEMLA notice that
Southern claimed the copyrights. See Saenger, 119 F.3d at 66.
Because LAMCO/ACEMLA failed to produce evidence that the copyright
certificates are invalid, the district court correctly concluded,
for purposes of summary judgment, that LAMCO/ACEMLA had notice of
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Southern’s copyright claims and, for that reason, could not meet
the good faith and lack of notice requirements of § 205(d).
B. Payment Allocation
The Publishers and LAMCO/ACEMLA filed summary judgment
motions on claims of ownership and infringement of copyrights for
468 songs. Instead of deciding the motions, the court laid the
groundwork for a special master to use in addressing the complex
issues of ownership and infringement. On March 31, 2003, the
district court appointed Morton David Goldberg, Esquire, to serve
as a special master in the case.9 The court apportioned payment of
the special master's fees between the Publishers and LAMCO/ACEMLA
in equal portions and directed the special master to bill the
parties monthly. The parties were each ordered to file a bond in
the amount of $37,500. On appeal, LAMCO/ACEMLA challenge the
district court's decision to divide equally, between LAMCO/ACEMLA
9
The special master circulated a draft report and
recommendation on March 4, 2004. On March 26, 2004, the district
court denied ASCAP's and LAMCO/ACEMLA's then-pending motions for
summary judgment as moot, without explanation. LAMCO/ACEMLA argue
that the district court erred in denying their motion. Because the
issues raised in their motion had been referred to the special
master, the district court properly denied the motion on procedural
grounds. See, e.g., Becker v. Fed. Election Comm'n, 230 F.3d 381,
389 (1st Cir. 2000) (discussing mootness in context of
redressability). The subsequent proceedings are described in the
district court's order issued on September 26, 2005.
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and the Publishers, the obligation to pay the special master's
fees.10
Federal Rule of Civil Procedure 53(a), which governed in
March of 2003 when the district court appointed the special master,
gave the district court authority to allocate his fees "as the
court may direct." Fed. R. Civ. P. 53(a) (2003).11 Under Rule
53(a), "the district court enjoys broad discretion to allocate the
master's fees as it thinks best under the circumstances of the
case." Aird v. Ford Motor Co., 86 F.3d 216, 221 (D.C. Cir. 1996);
see also 9A Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure: Civil § 2608 (2d ed. 1995). Therefore, a
court's decision on allocation is reviewed for abuse of discretion.
Morgan v. Kerrigan, 530 F.2d 401, 427 (1st Cir. 1976); accord Roy
v. County of Lexington, S.C., 141 F.3d 533, 549 (4th Cir. 1998);
Manhattan Indus., Inc. v. Sweater Bee by Banff, Ltd., 885 F.2d 1,
9 (1st Cir. 1989). "An abuse of discretion occurs when a material
factor deserving significant weight is ignored, when an improper
factor is relied upon, or when all proper and no improper factors
are assessed, but the court makes a serious mistake in weighing
them." Sheppard v. River Valley Fitness One, L.P., 428 F.3d 1, 6
(1st Cir. 2005) (internal quotation marks omitted).
10
LAMCO/ACEMLA challenge the district court's allocation
decision, not the decision to appoint a special master.
11
The amendments that added subdivision (h), addressing
compensation, were not effective until December 1, 2003.
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LAMCO/ACEMLA assert that the Publishers should have been
required to pay the majority of the fees because they had
"enormously disproportionate wealth" and were responsible for
complicating the case to include more than 500 songs. LAMCO/ACEMLA
also contend that the Broadcasters should have paid some of the
fees because they benefitted from the special master's work and
were parties to the suit. Equal apportionment of the fees between
the Publishers and LAMCO/ACEMLA, they argue, constituted an abuse
of discretion.
Such arguments might be persuasive if the record
supported them. Here, however, the record shows that LAMCO/ACEMLA
initiated a copyright infringement case that foreseeably burgeoned
into claims involving more than five hundred songs.12 The record
also shows that the district court gave LAMCO/ACEMLA repeated
opportunities to demonstrate their inability to pay their share of
the fees, which LAMCO/ACEMLA failed to do. With respect to the
Broadcasters' benefit from the special master's work, the
Publishers took their place through the indemnification provisions
in the agreements between them and paid half of the fees, partially
on their behalf. Therefore, in the particular circumstances of
this case, LAMCO/ACEMLA have not shown that the district court
12
LAMCO/ACEMLA were not strangers to the foreseeable
complexities of copyright litigation. See, e.g., ACEMLA v.
Copyright Royalty Tribunal, 854 F.2d 10 (2d Cir. 1988).
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abused its discretion in the equal allocation of the special
master's fees.
C. Sanctions
In August of 2005, the district court dismissed
LAMCO/ACEMLA's remaining claims, counterclaims, and defenses as a
sanction for failing to comply with the court's orders to post a
bond for their share of the special master's fees. LAMCO/ACEMLA
challenge the sanction as being too extreme for the circumstances
and, therefore, an abuse of discretion.
"A dismissal entered to sanction a party for failure to
comply with a court's order or for failure to prosecute the case is
reviewed for abuse of discretion." Ruiz-Rosa, 485 F.3d at 153.
Whether a sanction constitutes an abuse of discretion is determined
by considering all of the pertinent circumstances, "including the
severity of the violation, the legitimacy of the party's excuse,
repetition of violations, the deliberateness vel non of the
misconduct, mitigating excuses, prejudice to the other side and to
the operations of the court, and the adequacy of lesser sanctions."
Id. at 154 (internal quotation marks omitted).
The docket and record in this case show a pattern of
delaying conduct by LAMCO/ACEMLA. The district court had
previously imposed sanctions against LAMCO/ACEMLA because of
unexcused delay in responding to a motion for summary judgment.
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After a year and a half of LAMCO/ACEMLA failing to comply with the
order to post a bond for their share of the special master's fees,
the district court issued an ultimatum on October 13, 2004. The
court ordered LAMCO/ACEMLA to post the bond within thirty days and
warned that failure to comply would result in sanctions, including
possible dismissal of their claims and defenses. After waiting for
more than eight more months, during which time LAMCO/ACEMLA still
did not post the ordered bond or provide adequate reasons for their
failure to do so, on August 2, 2005, the district court dismissed
LAMCO/ACEMLA's remaining claims, counterclaims, and affirmative
defenses as a sanction for their failure to comply with the court's
orders. Under these circumstances, the district court's sanction
was not an abuse of discretion.13
D. Summary Judgment in Favor of the Publishers
The district court granted summary judgment in favor of
the Publishers on their infringement claims against LAMCO/ACEMLA.
On appeal, LAMCO/ACEMLA argue that the district court erred in
holding that a certificate of copyright registration provides
notice for purposes of § 205(d), that merely authorizing the use of
13
LAMCO/ACEMLA assert, as part of their statement of the case,
that their counterclaim against Peer and Broadcast Music, Inc.
remains pending, despite the sanction imposed by the district
court. Because LAMCO/ACEMLA provide no developed argumentation to
support that assertion, we do not consider it here. See United
States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
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songs constitutes copyright infringement, and that infringement
could occur when LAMCO/ACEMLA had the right to license a "fifty
percent writer's share" of the disputed songs. The Publishers,
joined in part by ASCAP, defend the district court's decision.
1. Section 205(d)
LAMCO/ACEMLA dispute the district court's ruling that
registration of a copyright constitutes notice for purpose of §
205(d). As they did in opposition to ASCAP's claim to "Patacón
Pisa'o," LAMCO/ACEMLA argue that recording, in compliance with §
205(c), should be required to provide notice under § 205(d). We
previously rejected that argument, and the same result applies
here. The district court's interpretation of § 205(d) was not
erroneous.
2. Writers' Share
LAMCO/ACEMLA claim that they have not infringed the
copyrights to the disputed songs because they were entitled to
license a "fifty percent writer's performance share" of ACEMLA's
affiliated composers. They have not cited authority, however, to
support a theory that a writer retains a fifty percent performance
share in a song after relinquishing the copyright. In contrast to
LAMCO/ACEMLA's theory, the owner of a copyright "has the exclusive
rights to do and to authorize . . . [others] to perform the
copyrighted work publicly." 17 U.S.C. § 106(4); see also, e.g.,
Phillips v. Pembroke Real Estate, Inc., 459 F.3d 128, 133 (1st Cir.
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2006) (discussing the limited rights retained by an artist after
relinquishing the copyright to his work); Beethoven.com LLC v.
Librarian of Congress, 394 F.3d 939, 942-43 (D.C. Cir. 2005)
(discussing the exclusive performance rights held by copyright
owner under Digital Millennium Copyright Act).
In addition, even if LAMCO/ACEMLA could support their
retained performance rights theory, to the extent it is raised as
a defense to the Publishers' infringement claims, it has been
dismissed as part of the sanction imposed by the district court.
3. Rescission
LAMCO/ACEMLA challenged the Publishers' rights to some of
the disputed songs on a rescission theory. Specifically,
LAMCO/ACEMLA argued that the Publishers had failed to pay royalties
under their agreements with the composers, which provided a basis
for rescinding the agreements with those composers. The district
court ruled that LAMCO/ACEMLA lacked standing to claim that the
agreements should be rescinded. On appeal, LAMCO/ACEMLA contend
that the district court's decision was error.
A question of who may assert an otherwise justiciable
claim is a question of prudential standing that does not implicate
the court's jurisdiction. Baena v. KPMG LLP, 453 F.3d 1, 5 (1st
Cir. 2006). "[A] party generally must assert his own legal rights
and interests, and cannot rest his claim to relief on the legal
rights or interests of third parties." Kowalski v. Tesmer, 543
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U.S. 125, 129 (2004) (internal quotation marks omitted). A party
may assert a claim on behalf of another only when "the party
asserting the right has a 'close' relationship with the person who
possesses the right" and when "there is a 'hindrance' to the
possessor's ability to protect his own interests." Id. at 130.
The composers, not LAMCO/ACEMLA, were parties to the
agreements in question. LAMCO/ACEMLA have not cited authority to
show that they, as non-parties to the composers' agreements with
the Publishers, may seek rescission. They have not shown a close
relationship with the composers or a hindrance to the composers'
ability to protect their own rights. Therefore, the district court
correctly determined that LAMCO/ACEMLA lacked standing to assert
that the composers' agreements with the Publishers should be
rescinded. In addition, to the extent rescission is raised as a
defense to the Publishers' infringement claims, it was dismissed by
the district court as part of the sanction imposed on LAMCO/ACEMA.
4. Infringement
LAMCO/ACEMLA challenge the district court's conclusion
that they infringed the Publishers' copyrights in the disputed
songs by including them in the ACEMLA catalog. They contend that
merely authorizing the use of the songs, in the absence of proof
that the songs were actually used in an infringing manner, is not
infringement. The Publishers argue that the particular
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circumstances of this case show conduct by LAMCO/ACEMLA beyond
merely authorizing use of the songs.
17 U.S.C. § 106 provides the exclusive rights that are
held by the owner of a copyright. "One infringes a copyright when
he or she violates one of the exclusive rights to a work held by a
copyright owner, and the owner has the right to sue for
infringement." T-Peg, Inc., 459 F.2d at 108. Mere authorization
of an infringing act is an insufficient basis for copyright
infringement. Venegas-Hernandez, 424 F.3d at 57-58. Infringement
depends upon whether an infringing act, such as copying or
performing, has occurred. Id. at 58-59. Therefore, to prove
infringement, a claimant must show "an infringing act after the
authorization." Id. at 59.
In this case, the district court held that LAMCO/ACEMLA
infringed the Publishers' copyrights by including songs assigned to
the Publishers in ACEMLA's catalog. The district court also noted
that LAMCO/ACEMLA had songs available to be heard through their
website and had distributed a compact disc that included some of
the Publishers' songs. The Publishers argue that LAMCO/ACEMLA
"knowingly hijacked" their songs by including them in the ACEMLA
catalog, issued licenses to broadcasters for songs that they knew
were assigned to someone else, and threatened and initiated
litigation against broadcasters who played works in ACEMLA's
catalog.
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The Publishers have not cited authority to show that
including songs in a catalog, issuing licenses, and threatening
litigation are infringing actions under § 106. The district court
identified eight songs that were available on ACEMLA's website and
two of those songs, along with an additional song, that had been
distributed by LAMCO/ACEMLA in a compact disc. While those might
be infringing actions, only nine of the 468 songs that were the
subject of summary judgment are involved. In addition, the
district court did not decide whether LAMCO/ACEMLA had committed
infringing acts in addition to authorization, leaving a factual
issue as to whether LAMCO/ACEMLA's actions were infringing acts.
In the absence of guidance from the district court and little
assistance from the parties, we cannot decide whether the record
contains sufficient undisputed evidence of infringing acts to
warrant summary judgment on infringement. We therefore vacate
this aspect of the district court's judgment and remand for further
proceedings on this issue.
Conclusion
Summary judgment in favor of ASCAP is reversed as to the
song "Caballo Viejo" and is affirmed as to the other four songs.
The district court's allocation of payment of the special master's
fees and the decision imposing sanctions on LAMCO/ACEMLA are
affirmed. Summary judgment in favor of the Publishers on
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infringement of the copyrights to 468 songs is reversed. The case
is remanded to determine the ownership of the rights to "Caballo
Viejo" and whether LAMCO/ACEMLA infringed the copyrights to 468
songs held by the Publishers. Each party shall bear its own costs
on appeal.
Reversed in part; affirmed in part; remanded.
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