United States Court of Appeals
For the First Circuit
No. 04-1934
No. 04-1935
MARÍA VENEGAS-HERNÁNDEZ; GUILLERMO VENEGAS-HERNÁNDEZ;
RAFAEL VENEGAS-HERNÁNDEZ; YERAMAR VENEGAS-VELÁZQUEZ;
GUILLERMO VENEGAS-LLOVERAS, INC.,
Plaintiffs, Appellants/Cross-Appellees,
v.
ASOCIACIÓN DE COMPOSITORES Y EDITORES DE MÚSICA LATINOAMERICANA
(ACEMLA); LATIN AMERICAN MUSIC COMPANY, INC. (LAMCO),
Defendants, Appellees/Cross-Appellants.
v.
PEER; PEER INTERNATIONAL CORPORATION; SOUTHERN MUSIC
COMPANY; LUIS RAÚL BERNARD; JOSÉ L. LACOMBA; LUCY CHÁVEZ-BUTLER,
Defendants, Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Boudin, Chief Judge,
Cyr, Senior Circuit Judge,
and Howard, Circuit Judge.
Heath W. Hoglund for plaintiffs, appellants/cross-appellees.
Jane Becker Whitaker with whom Ángel N. Caro was on brief for
defendants, appellees/cross-appellants.
Barry I. Slotnick with whom Jacques M. Rimokh, Loeb & Loeb
LLP, Francisco A. Besosa and Adsular Muniz Goyco & Besosa P.S.C.
were on brief for defendants, appellees Peer, Peer International
Corporation and Southern Music Company.
September 16, 2005
BOUDIN, Chief Judge. These consolidated appeals concern
both disputes over ownership of interests in certain musical
copyrights and claims of infringement against various entities.
The musical compositions are those of Guillermo Venegas-Lloveras
("GVL"), a well-known Puerto Rican composer who died in 1993.
Because multiple issues are presented, we begin with an overview of
background events and pertinent proceedings, reserving details for
the discussion of individual claims.
GVL wrote, and obtained copyrights under the Copyright
Act for, a large number of compositions. Under the statute, a
copyright owner obtains a number of exclusive rights over the
copyrighted works for a fixed term, rights that he may license or
assign, 17 U.S.C. § 106 (2000). He also obtains a right to renew
the copyright for a further term, 17 U.S.C. § 304(a); however, if
this renewal right does not vest during the author's lifetime, it
passes to his heirs not by will but as specified by the Copyright
Act itself. Id. § 304(a)(1)(C).
During his lifetime, GVL granted various rights in his
compositions. Of particular importance is a 1952 agreement with
Peer, a musical publishing company that acquires such rights and
then licenses them to third parties; affiliated with Peer are Peer
International Corp. and Southern Music Co. (collectively, "the Peer
defendants"). GVL entered into other agreements, a series of which
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were made in 1969 with another publisher, PHAM,1 and yet another in
1970 directly with Peer affiliate Southern Music.
On October 16, 1996, GVL's widow, Lucy Chávez-Butler,
assigned all of her copyright interests in GVL's works to Latin
American Music Company ("LAMCO"), a New York-based music publisher.
One of LAMCO's affiliates is ACEMLA de Puerto Rico, a performance-
rights society. Such organizations, among them the well-known
entities ASCAP and BMI, obtain rights to musical compositions,
license them (often through blanket licenses), and collect
royalties from sub-licenses.
A year later, in October 1997, Chávez brought suit in the
Superior Court in Puerto Rico to settle a dispute with GVL's four
surviving children ("the siblings") as to ownership of copyright
interests in GVL's works after his death. Ultimately, in January
2000, the local Court of Appeals of the Commonwealth of Puerto Rico
ruled that rights in GVL's works belonged to his children,
ostensibly under his will and a later understanding reached between
Chávez and the siblings in settling the estate; however, just what
rights were so adjudicated is a matter of dispute on this appeal.
Then, in 2001, the present actions were filed in federal
district court in Puerto Rico by the siblings. One charged LAMCO,
ACEMLA, and three individuals associated with them ("the LAMCO
1
PHAM, the acronym for Promotora Hispano Americana de Música,
was at that time owned by Peer but was no longer so affiliated at
the time of the present litigation.
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defendants")--one of whom was Chávez herself--with various acts of
copyright infringement as to GVL's works, which the siblings now
claimed to own; the other action, thereafter consolidated with the
first, made similar charges and other related claims under contract
law against the Peer defendants.
In considering the siblings' infringement claims, the
district court first decided the ownership, as between Chávez and
the siblings, of such renewal-term copyrights as had arisen after
GVL's death. In two decisions, the district court ruled that
ownership of such renewal interests had not been resolved in the
earlier local litigation and that Chávez and the four siblings each
held a 20 percent interest in the copyrights. Venegas Hernandez v.
Peer Int'l Corp., 270 F. Supp. 2d 207, 216-17 (D.P.R. 2003)
("Venegas-Hernandez I"); Venegas-Hernandez v. Peer, 283 F. Supp. 2d
491, 503-05 (D.P.R. 2003) ("Venegas-Hernandez II").
Then, after an extensive bench trial, the district court
in 2004 issued a massive seventy-seven-page decision. Venegas-
Hernandez v. Peer, Civil No. 01-1215 (D.P.R. May 19, 2004)
("Venegas-Hernandez III") (unpublished opinion). In the end, the
court awarded $5,000 in damages against the Peer defendants for one
act of infringement, rejecting other infringement claims against
them; the court rejected as well the siblings' efforts to
terminate, by rescission or otherwise, certain rights that the Peer
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defendants obtained under their earlier agreements with GVL
himself, including the 1952 contract.
As to the LAMCO defendants, the court rejected LAMCO's
claims of ownership as to certain songs and held it liable for just
over $16,000 in damages for infringement. However, the court also
rejected a number of other infringement claims made by the
siblings; importantly, although the court agreed that the LAMCO
defendants had licensed certain GVL compositions during periods
when they had no right to do so, it found, as to most of their
unauthorized licenses, that no evidence of copying or performance
had been provided by the siblings.
Now before us are appeals by the siblings and by the
LAMCO defendants. The standard of review is de novo for issues of
law, clear error for factual findings, and varying degrees of
deference on law application, procedural matters, and choice of
penalties. Cariglia v. Hertz Equip. Rental Corp., 363 F.3d 77, 82
(1st Cir. 2004); Cavallaro v. United States, 284 F.3d 236, 245 (1st
Cir. 2002); Morley Music Co. v. Dick Stacey's Plaza Motel, Inc.,
725 F.2d 1, 3 (1st Cir. 1983). We begin with the issue of
ownership rights in the renewal terms, then address infringement
and contract issues, and conclude with the parties' remaining
claims.
Various of the siblings' infringement claims depended on
who owned renewal terms for certain GVL works. In 1976, Congress
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provided that copyrights still in their original 28-year term as of
January 1, 1978, are eligible for a renewal term of 47 years (a
term since extended to 67 years under the Sonny Bono Copyright Term
Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (1998)). 3
Nimmer & Nimmer, Nimmer on Copyright § 9.08, at 9-128 to 9-129
(2005) ("Nimmer"). The right to renew belongs to "the author of
such work, if the author is still living," but if not, then to "the
widow, widower, or children of the author"; if none in this latter
group is living, then the rights pass to the author's executor or,
absent a will, to "the author's next of kin." 17 U.S.C. §
304(a)(1)(C).
In the district court, the siblings took the position
that the renewal terms belonged solely to them,2 and that the issue
had been settled by the local courts and was res judicata against
Chávez. The district court, as already noted, held that under the
Copyright Act, Chávez retained a 20 percent interest as to renewal
terms created after GVL's death. On this issue, the siblings now
urge that they own 100 percent of those renewal terms; LAMCO, which
acquired whatever interest Chávez might have, argues in its cross-
appeal that her interest was 50 percent rather than 20 percent.
2
As to those renewal terms that had begun before GVL's death,
they belonged--under the terms of the statute--to GVL at the time
of his death, and neither the Peer nor LAMCO defendants dispute
that (given the decision of the Puerto Rico Court of Appeals) they
passed solely to the siblings.
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We begin with the res judicata issue. Whether one speaks
of claim or issue preclusion, the outcome turns in this slightly
unusual situation on exactly the same question: whether, when the
local Court of Appeals said that authorship rights to GVL's musical
works belonged (under his will and a subsequent agreement between
the siblings and Chávez) entirely to the siblings, the court
intended to embrace renewal rights that had not come into being at
the time of GVL's death or only those original copyrights and
renewal terms that were in force and belonged to him at the time of
his death.
The district court concluded that the state courts had
not addressed or resolved the question of the unmatured renewal
rights, which, it said, did not pass by will but were created and
assigned by virtue of the Copyright Act, see Venegas I, 270 F.
Supp. 2d at 214-16; Venegas II, 283 F. Supp. 2d at 496-97; as for
the agreement between the siblings and Chávez governing the
division of the estate, the district court found from the evidence
that neither side had intended the agreement to cover renewal
rights unmatured at GVL's death--a subject that (the district court
said) they had not even considered in making their agreement. Id.
at 497-503.
One might have expected on this appeal that the siblings
would urge that the district court had misinterpreted the local
court decisions, the agreement between the siblings and Chávez, or
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both. But in the siblings' opening brief, there is no serious
attempt to parse the local decisions, nor any attempt to interpret
the agreement in light of its language and what the parties said or
intended.
Instead, the siblings' brief argues primarily that the
renewal rights must pass under Puerto Rico law in the absence of a
direct conflict with the Copyright Act. Secondarily, the siblings
suggest that to treat the renewal terms arising after the author's
death as something other than his property would violate the
Constitution's copyright clause, U.S. Const. art. 1, § 8, cl. 8,
because the clause allows Congress to secure to "authors"--not
anyone else--the fruits of their authorial work. To create rights
other than in the author, say the siblings, is at odds with the
Constitution.
The statutory argument is defeated by the statute itself,
which says that if the author is not alive when the renewal term
begins, then the right to renew belongs to his wife and children.
17 U.S.C. § 304(a)(1)(C)(ii). Only "if such author, widow,
widower, or children are not living" do the rights to renew pass to
"the author's executors," id. § 304(a)(1)(C)(iii)--presumably for
disposition in accordance with his will (an inference reinforced by
a final direction saying that "the author's next of kin" inherit
"in the absence of a will," id. § 304(a)(1)(C)(iv)).
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If there were any doubt, it appears to be removed by De
Sylva v. Ballentine, 351 U.S. 570 (1956), the leading Supreme Court
decision addressing the clause at issue. There, in deciding
whether the renewal rights (not matured during the author's
lifetime) belonged to the widow alone or to both the widow and
children, the Court made no reference to any possible will and went
out of its way to say that "the author cannot assign his family's
renewal rights" and that the statute imposes "a compulsory bequest"
so as "to provide for the family of the author after his death."
Id. at 582.3
As to the constitutional objection, the Supreme Court in
De Sylva apparently did not see any patent constitutional objection
to this "compulsory bequest." More recently, it stressed in a
different context the broad scope of Congress' power to implement
expansively the copyright clause of the Constitution. Eldred v.
Ashcroft, 537 U.S. 186, 212-13 (2003). In all events, the
siblings' brief does little more than cite the "Authors" language
in the clause, and it would take a far more developed argument for
us to take seriously a constitutional attack of this kind.
This brings us to the truly difficult question as to
whether the renewal interest is divided 50-50 between the widow and
3
See also Miller Music Corp. v. Charles N. Daniels, Inc., 362
U.S. 373, 375 (1960) (stating that the author possesses "only an
expectancy to assign [renewal rights,] and his death, prior to the
renewal period, terminates his interest in the renewal which by §
24 [now § 304(a)] vests in the named classes" (emphasis added)).
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children or per capita so that the widow and each of the four
children would get a 20 percent interest. The Supreme Court in De
Sylva expressly declined to decide the issue. De Sylva, 351 U.S.
at 582. The Sixth Circuit, the only circuit court squarely to
address it, split, with the majority favoring the 50-50 solution,
Broadcast Music, Inc. v. Roger Miller Music, Inc., 396 F.3d 762,
781-82 (6th Cir. 2005), petition for cert. filed (U.S. June 30,
2005) (No. 05-31), and the dissent supporting the per capita view
adopted by the district court in this case, id. at 783-84
(Daughtrey, J., dissenting). (Earlier, the Second Circuit had
assumed a per capita division, Bartok v. Boosey & Hawkes, Inc., 523
F.2d 941 (2d. Cir. 1975), but the issue was scarcely discussed and
"[a]t best . . . Bartok contains no more than dicta on this issue."
3 Nimmer § 9.04, at 9-29).
There are good arguments on both sides. The phrase
"widow . . . or children" is opaque as to the division between
them; indeed, in De Sylva, arguments both ways could be made as to
whether the children should have any rights at all if the widow
were still living. 351 U.S. at 573. On the other hand, De Sylva's
conclusion that "both [widow and children] succeed to the renewals
as members of the same class," id. at 582, not only rejects the
widow-only position, but might be taken to suggest that widow and
children succeed per capita, and some read it in this manner.
Broadcast Music, 396 F.3d at 783-84 (Daughtrey, J., dissenting).
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One should not attribute too much to a single phrase in
a Supreme Court opinion that squarely refused to decide the
apportionment issue. The "class" reference was made in deciding
whether the children had any interest at all if the widow were
alive, and the word "class" was in substance a shorthand way of
saying that the widow and children inherit together (if both are
alive) rather than sequentially (that is, the children inherit only
if the widow is not alive). The word "class" is not used in the
statute and, however the Supreme Court someday decides the issue,
we take it at its word in saying that it has not done so yet.
Pertinent to the open question is language in adjacent
statutory provisions that deal with termination interests in
copyrights; they are relevant because Congress there specified that
"the widow or widower owns one-half of the author's interest" if
"there are any surviving children or grandchildren of the author."
17 U.S.C. § 304(c)(2)(A). Chávez can point to this as a template
for resolving this case in the same way; the siblings can argue
that it would have been easy for Congress to use the same language
here. The provision is arguably more helpful to Chávez; the
opposite inference would be stronger if the provisions had been
drafted together.4
4
The renewal provisions in section 304(a) simply carried
forward language whose substance dates back to the Copyright Act of
1909. See Act of March 4, 1909, 35 Stat. 1075, 1080-81; H.R. Rep.
No. 94-1476, at 139 (1976), reprinted in 1976 U.S.C.C.A.N. 5659,
5755 (noting that "the [1976] bill preserves the language of the
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Policy considerations favor the 50-50 solution over per
capita division. As De Sylva notes, the compulsory bequest is to
care for widow and children. 351 U.S. at 582. A majority of
states give the widow a 50 percent or greater interest in her
husband's estate if he dies intestate, even with multiple children,
see Restatement (Third) of Property: Wills and Other Donative
Transfers § 2.2 statutory notes 1-3 (1999); this is hardly a
surprising allocation, since ordinarily the widow will herself have
a duty to support children still in their minority, and children in
their majority ordinarily have earning power of their own.
A third solution--urged by neither party--would be to
adopt the intestacy provisions of local law. Although we are
construing a federal statute, such statutes can be read to
incorporate local law, see Chemerinsky, Federal Jurisdiction §
8.11, at 582-83 (4th ed. 2003), and that temptation is especially
strong where domestic relations issues are presented. De Sylva
followed this course on the issue of who constituted a "child" of
the author. 351 U.S. at 580-81. Yet the termination provisions of
section 304(c) do provide a competing uniform federal template.
Neither side in this case has urged adoption of Puerto
Rico law, whose substantive rules as to a widow's intestate share
are far from straightforward. See 31 L.P.R.A. §§ 2641-2693;
present renewal provision without any change in substance"). The
termination provisions of section 304(c), on the other hand, were
first introduced in the 1976 Act.
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Efraín González Tejera, Mortis Causa Wealth Transfer and the
Protection of the Family: The Spanish-Puerto Rican Experience, 60
Tul. L. Rev. 1231, 1236-39 (1986). We do not rule out the
possibility of such a solution if and when the issue is briefed in
a future case, but neither do we say that we would necessarily
endorse such an approach. On the choice that has been presented to
us, the 50-50 solution is superior to the per capita one and,
incidentally, avoids an unnecessary split with the Sixth Circuit.
In the district court, the siblings made a number of
infringement claims against both the Peer and LAMCO defendants
based upon various acts pertaining to a number of different songs.
Some, but not all, depended in part on who owned the copyright to
one or more pieces during the period of the alleged infringement;
ownership is an issue properly before the court in an infringement
case since "[t]o make out a copyright infringement, a plaintiff
must show ownership of a valid copyright . . . ." Matthews v.
Freedman, 157 F.3d 25, 26 (1st Cir. 1998).
We address in order the issues framed by the two appeals
before us. The first one concerns infringement claims by the
siblings against Peer as to songs of GVL owned by Peer under the
1952 agreement. Under the terms of the agreement, GVL assigned to
Peer the copyrights to all compositions he had written in the past
or would write during the term of the agreement, in exchange for
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specified royalties. The agreement continued in force until mid-
1964, so songs composed after that date are not covered.
The siblings urged in the district court that Peer's
rights in the pre-1964 compositions had been forfeited by Peer
mainly because it had not paid royalties to the siblings after
GVL's death--the right to the royalties having been inherited by
the siblings as heirs to GVL's rights under the 1952 agreement.
The district court held that the statute of limitations had run on
the claim and that in any case it was without merit. The latter
ground is less intricate and sufficient to sustain the district
court.
The main attack on Peer's ownership of rights under the
1952 agreement is framed by the siblings as a right to rescind the
1952 agreement on account of the failure to pay royalties after
GVL's death. The district court found that Peer had paid royalties
pursuant to the 1952 agreement until GVL's death in 1993, when it
ceased to make payments in light of the underlying ownership
dispute between the siblings and Chávez. This in turn made it
uncertain what amounts were owed to the siblings.
Under New York law, which the 1952 agreement specifies as
governing, rescission is an equitable remedy for breach of
contract; but ordinarily it requires breaches of "so material and
substantial a nature that they affect the very essence of the
contract and serve to defeat the object of the parties." Nolan v.
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Williamson Music, Inc., 300 F. Supp. 1311, 1317 (S.D.N.Y. 1969).
Furthermore, "[i]f the party who seeks rescission has an adequate
remedy at law, ordinarily he is not entitled to rescind." Callanan
v. Powers, 92 N.E. 747, 752 (N.Y. 1910).
The district court found that the delay in paying
royalties was not an equitable basis for undoing the entire
agreement, which had been carried out by royalty payments from 1952
to 1993, and that contract damages would make the siblings whole.
The amount appears to have been modest; Peer says that between 1993
and the trial, only about $3,000 in royalties had accumulated under
the 1952 agreement. It adds that it had offered to pay royalties
to the siblings in exchange for a hold-harmless agreement--
presumably to protect it against possible claims by Chávez that
part of the royalties belonged to her.
The siblings spend only a few paragraphs of their main
brief on appeal to challenge this determination, mainly complaining
that Peer should have paid them something and that Peer was
uncooperative in providing information until discovery in the
present lawsuit. They do not dispute that the district court's
decision is an exercise of equitable discretion to be reviewed with
deference on appeal. Delaney v. Matesanz, 264 F.3d 7, 13-14 (1st
Cir. 2001). Against the background events already described, the
siblings' spare assertions of error are no basis for overturning
the district court's equitable judgment.
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The second, and larger, issue raised by the siblings
concerns acts of alleged infringement. This presents at the outset
its own threshold question, which could be of continuing
importance: whether a music publisher's unauthorized grant of a
license to a third party to perform or copy a copyrighted work is
an act of infringement where there is no adequate proof that the
third party ever undertook an infringing act (for example, by
performing or recording a copyrighted song).
Often this threshold question will not matter, because
ordinarily the plaintiff aims to recover damages and, if they
cannot be proved, the suit often will not be brought. But if
wrongful authorization alone were infringement, statutory damages
might be available without proof of copying, and occasionally harm
might be done by such an improper authorization even without a
further infringing act--for example, it might discourage the
purported licensee from seeking a license from the copyright's true
owner.
Looking only at the statutory language, one might think
that authorization alone could well be "infringement." Section 106
provides that the copyright owner "has the exclusive rights to do
and to authorize any of the following:" and then lists infringing
acts such as reproducing, recording, or performing the work.
Section 501(a) says, inter alia, that "[a]nyone who violates any of
the exclusive rights" provided in section 106 (among other
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sections) is an infringer. Section 504(a) provides that "an
infringer" is liable for actual or statutory damages.
Because the right to "authorize" is literally one of the
exclusive rights provided in section 106, the authorizing person
could (as a matter of language) be treated as an infringer subject
to statutory damages even if no listed infringing act (for example,
performance) actually occurred. Yet the legislative origins of the
"authorize" language in the statute arguably support a narrower
reading, and most (perhaps all) courts that have considered the
question have taken the view that a listed infringing act (beyond
authorization) is required for a claim. See II Goldstein,
Copyright § 6.3.2, at 6:44 (2d ed. 2005).
The "authorize" reference was added to the statute via
the 1976 Copyright Act. Danjaq, S.A. v. MGM/UA Commc'ns, Co., 773
F. Supp. 194, 201 (C.D.Ca. 1991). Prior to that time, the courts
had adopted a concept of "contributory infringement" to impose
liability on someone who wrongfully authorized an infringing act by
another who then committed that act. E.g., Gershwin Publ'g Corp.
v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir.
1971). Thus the concept of infringement was expanded by creating
a kind of abettor liability for one deemed to have caused the
infringing act committed by the wrongfully authorized person. This
was hardly revolutionary; doing something forbidden by proxy can
lead to liability under both criminal and ordinary tort law. See
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2 Lafave, Substantive Criminal Law § 13.4, at 372-73 (2d ed. 2003);
Prosser and Keeton on Torts § 69 at 499-501 (5th ed. 1984).
When the new statutory language was added, the House
report explained that "[u]se of the phrase 'to authorize' is
intended to avoid any questions as to the liability of contributory
infringers." H.R. Rep. No. 94-1476, at 61 (1976), reprinted in
1976 U.S.C.C.A.N. 5659, 5674. If the language's purpose was simply
to codify the preexisting abetting doctrine that made an authorizer
liable for the authorized party's wrongful act of infringement,
arguably the drafters did not intend to create an independent
liability for authorizing where no listed infringing act, such as
performance, thereafter occurred.
It has also been said, in support of this limiting
interpretation, that state law provides ample remedies where there
is an unlawful authorization that causes harm without a listed
infringing act. For example, if the authorizing entity collected
a flat payment regardless of copying or performance, a state claim
for unjust enrichment might lie, Restatement of Restitution § 1
(1937); and if the authorization undercut efforts of the true owner
to license the copyright, the true owner might sue for interference
with contractual or advantageous economic relationships. See 3
Nimmer § 12.04, at 12-91 & n.85 (2005).
There would be nothing remarkable about such a
splintering of enforcement between federal and state law. The
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Copyright Act does not draw into federal court all matters that
pertain to copyright; a simple dispute over who owns a copyright is
usually governed by state law and would not, absent diversity
jurisdiction, even be heard in federal court if it were the only
issue in the case. See T.B. Harms Co. v. Eliscu, 339 F.2d 823,
826-27 (2d Cir. 1964), cert. denied, 381 U.S. 915 (1965). In this
very case, the secondary dispute over ownership is resolved in
federal court only as a byproduct of the infringement claims.
Admittedly, the better bare-language reading would allow
the claims in question; they might add some slight protection to
federal copyright interests, at the cost of more federal
litigation. But the narrower interpretation appears from
legislative history to be closer to congressional intent and has
been followed by other courts. Occasionally, and we think this
true here, the case is so close and the stakes low enough that
maintaining uniformity tips the balance.
This interpretation leads us to affirm the district
court's ruling rejecting several of the siblings' infringement
claims against the Peer and LAMCO defendants. In a number of
instances, the district court found that a publisher defendant had
granted a license, sometimes as part of a blanket license of many
songs, that included rights as to GVL works that were no longer
within the publisher's own rights portfolio--for example, because
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the copyright had entered its renewal period and the renewal period
rights belonged to the widow and siblings.
But the court also found that there was no proof that the
songs had been copied or performed under the mistaken licenses.
The siblings' position is that the mere fact of licensing creates
a presumption that the works were the subject of infringing acts,
but this ignores the reality that licensees often seek broad
licenses covering a range of works, allowing them to choose what to
use. Depending upon the surrounding circumstances, an inference
that a work was performed might be stronger or weaker, but a
universal presumption is not justified.
As for the specific circumstances of the rejected claims
in this case, the siblings say that LAMCO authorized, and was paid
for, a mechanical license to Sonolux for two songs and that this
proves that the infringing acts occurred pursuant to the license.
The siblings also say that Peer, through BMI, authorized the
broadcast in the United States of a GVL song, and that the online
database showed this as a licensed song. In both instances, it is
uncontested that LAMCO and Peer had no rights to license during the
period in question.
However, in each case there is no direct proof of an
infringing act after the authorization. Whether the listed
infringing acts were proved--apart from mere authorization--is a
factual issue and our review is for clear error. Cariglia, 363
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F.3d at 82. The Sonolux payment was refunded, and BMI listing a
song as authorized does not mean it was played. The siblings'
brief on appeal does not spend much time explaining why its
inference of infringement is compelling, and we see no reason for
setting aside the district court's fact-specific judgment.
A different problem is presented by yet another
infringement claim by the siblings. In 1993, Banco Popular de
Puerto Rico ("the bank") used GVL's composition Génesis in CDs and
videos during the original copyright term, which had been inherited
by the siblings. The siblings sued LAMCO for contributory
infringement based on a retroactive mechanical license it issued to
the bank in 1998, under which the bank paid $16,373.47 to LAMCO;
the district court awarded this amount to the siblings. The
siblings also sued because of a retroactive performance license
issued to the bank by ACEMLA, an affiliate of LAMCO; the court,
however, found insufficient evidence of performance and awarded no
damages.
On appeal, the siblings argue that they should have been
awarded additional damages based on the retroactive performance
license. They contend that an infringing performance should be
assumed in light of the understanding that Génesis was used in
connection with the bank's 1993 "Christmas Special" and the fact
that the bank paid for a retroactive performance license five years
later. While it may very well be that one who understands the
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details of the 1993 "Christmas Special" could presume that an
unauthorized performance of Génesis had taken place, the siblings
in their briefs fail to proffer even a basic explanation of what
the alleged performance entailed. Given so undeveloped an
argument, we will not disturb the district court's finding.
LAMCO, on the other hand, argues that the court erred in
awarding $16,373.47 in damages based on the retroactive mechanical
license because any 1993 infringement by the bank was outside of
the statute of limitations when LAMCO issued the retroactive
license in 1998, adding that the retroactive license was sought and
granted for reasons unrelated to the bank's concern about liability
for its 1993 acts. In LAMCO's view, there was thus no
"infringement" to be cured via the retroactive license and it
cannot be found liable for contributory infringement.
Fitting agency concepts like "retroactive authorization"
into copyright law provides plenty of room for debate; obviously a
license in 1998 did not "cause" a 1993 infringement. But LAMCO
does not pursue this interesting point, relying instead on a
statute of limitations argument, and the discussion in the briefs
is too sparse to justify any serious attempt to develop principles
in this recherché area of copyright law.
In their reply brief, dated March 1, 2005, the siblings
cited numerous documents to support their contention that LAMCO
never raised the statute of limitations argument at trial. LAMCO's
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own reply brief, filed on March 16, 2005, offered no rebuttal to
the siblings' argument. Whether or not LAMCO made the argument in
the district court, it has not countered the siblings' waiver
claim. It is worth adding that LAMCO's brief does not furnish
information we would need if we were to resolve the statute of
limitations argument on the merits.
LAMCO has one further claim on its cross-appeal. It
claims that it owned, and the siblings therefore did not inherit,
the original GVL copyright terms for eleven songs that appear on a
spreadsheet, signed by GVL, which states: "I CERTIFY: Those works
detailed above belong to me, Guillermo Venegas Lloveras. Founder
member of SPACEM." The district court said that this was
insufficient to establish an assignment to LAMCO and that LAMCO had
failed to offer contextual evidence to prove otherwise.
On appeal, LAMCO points to testimony from an official of
SPACEM that the signing of the spreadsheet was part of an intended
transfer by GVL to LAMCO and to testimony that LAMCO treated at
least some of the songs as its own. But the Copyright Act requires
a written transfer of ownership, "or a note or memorandum of the
transfer," 17 U.S.C. § 204(a); whether or not a cryptic document
could ever qualify, the district court was reasonable in concluding
that the document failed to effect a transfer of ownership rights.
There are a few loose-end arguments, such as a claim by
the siblings that the district court committed an abuse of
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discretion in failing to award sufficient statutory damages for one
of the infringements. Such arguments have been considered but do
not require additional discussion. The district court has ably
managed a case with an unusually garbled record and disparate
claims.
We affirm the district court on all issues raised by the
appeals of the siblings and LAMCO, save that we agree with LAMCO
that, as between a 50-50 share and a per capita allocation under
section 304(a)(1)(C), GVL's widow is entitled to 50 percent and the
siblings as a group to 50 percent. On that single issue, we vacate
and remand for any further proceedings that may be required and a
modification of the judgment. Each party to bear their own costs
on appeal.
It is so ordered.
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