Allman v. Capricorn Records

*83MEMORANDUM *

Gregory L. Allman and his solely owned publishing companies, Elijah Blue Music, D-Dem Music, Allbro Music and Relot Music (hereinafter jointly referred to as “Allman”) appeal the district court’s summary judgment and dismissal in favor of Capricorn Records in Allman’s copyright infringement action under 17 U.S.C. § 115. We reverse and remand for further proceedings. Because the parties are familiar with the factual and procedural history of this case, we will not recount it here.

The salient issue in this case is whether the defendants1 exceeded the scope of compulsory licenses issued by All-man to PolyGram Records, Inc., to make and distribute phonorecords of various copyrighted songs. If a copyright owner grants a nonexclusive license to use his copyrighted material, he generally waives his right to sue the licensee for copyright infringement and can sue only for breach of contract. Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1121 (9th Cir.1999) (citing Graham v. James, 144 F.3d 229, 236 (2d Cir.1998)). However, if a license is limited in scope, and the licensee acts outside the scope of the license, the licensor can bring an action for copyright infringement. Id.

In this case, there are genuine issues of material fact as to whether the licenses were limited in scope and whether the licensee acted outside the scope of the license. Paragraph 3 on the reverse side of the licenses provided:

This compulsory license covers and is limited to one particular recording of said copyrighted work as performed by the artist and on the phonorecord number identified in (C) supra; and this compulsory license does not supersede nor in any way affect any prior agreements now in effect respecting phono-records of said copyrighted work.

It is undisputed that specific phonorec-ord numbers were identified in the various licenses. It is also undisputed that Mercury Records, a division of PolyGram, and Capricorn Records, Inc. entered into a joint venture entitled Capricorn Records, LLC, 51% of which was owed by Poly-Gram and 49% of which was owned by Capricorn Records, Inc. In 1997, Capricorn LLC distributed phonorecords of the disputed songs with different phonorecord numbers than those identified in the licenses.

Defendants essentially argue that the phonorecord number is not a material part of the license, i.e., that the license is for the use of a phonorecord in a particular configuration. Allman argues that the phonorecord catalogue number is a material part of the license because it prohibits unauthorized issuances of recordings in a manner that would make it difficult or impossible to track royalties. Allman also contends that if new licenses were to be issued, the royalty provisions would be established at the statutory rate prescribed in 17 U.S.C. § 115, rather than at *8480% of the statutory rate, as established in the original licenses granted by Allman.

Thus, genuine issues of fact remain for resolution as to the scope of the license and whether the defendants exceeded the scope and thus infringed the copyright. See Harris v. Emus, 784 F.2d 1329, 1333-35 (9th Cir.1984); see also Fred Ahlert Music Corp. v. Warner/Chappell Music, Inc., 155 F.3d 17, 24 (2d Cir.1998). Genuine issues of material fact also remain as to whether the defendants are jointly and/or severally liable for the infringement. See Frank Music Corp. v. Metro-Goldwym-Mayer, Inc., 772 F.2d 505, 519-20 (9th Cir.1985). Accordingly, the entry of summary judgment was inappropriate. Given the vacation of the judgment, the attorneys’ fee award must also be vacated.

REVERSED AND REMANDED.

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as may be provided by Ninth Circuit Rule 36-3.

. We do not reach the question of the respective liabilities of the defendants, and in particular whether defendant Capricorn Records, LLC, and Polygram should be treated as a single entity for liability purposes. The parties did not raise any issues pertaining to this question on appeal. We sua sponte requested briefing on the issue. However, having considered the supplemental briefs filed by the parties, we believe that it is appropriate for the district court to consider and resolve any legal and factual questions pertaining to any distinct theories of liability as to a particular party (or defenses thereto) in the first instance.