Bit Parts

Attorney Fees Award Reversed in 'Independent Creditor's' Suit Against Video Distributor

The California Court of Appeal, Second District, ruled that a company that loaned funds to a film producer wasn't entitled to attorney fees in a suit the company brought against a home-video distributor to recover revenues the distributor allegedly owed the production company. Ilshin Investment Co. Ltd. v. Buena Vista Home Entertainment Inc., B208839. Ilshin, a Korean company, had loaned money to Last Patriot Productions to make the movie The Patriot. The film didn't find theatrical exhibition but was instead distributed by Buena Vista via home video. The exclusive distribution agreement required Buena Vista to obtain Last Patriot's consent before incurring recoupable distribution expenses exceeding $900,000. Buena Vista allegedly failed to obtain the approval. Ilshin filed suit against Buena Vista in Los Angeles Superior Court for that as well as for prematurely terminating the distribution deal. The trial court awarded the plaintiff contract damages, lost profits and attorney fees. The court of appeal later reversed the damages award in part and set aside the attorney fees award, but found the trial court had erred by not granting a directed verdict for Ilshin on Ilshin's claim of conversion. In setting aside the award of attorney fees, the court of appeal noted that Ilshin's “breach of contract claims alleged that Ilshin was an unsatisfied judgment creditor of Last Patriot; that 'Buena Vista has possession or control of property in which [Last Patriot], a judgment debtor, has an interest'; and that 'Ilshin, as a judgment creditor, is entitled to bring suit against Buena Vista to have the property turned over to the judgment creditor and applied towards the reduction of the debt.' ' These allegations bring Ilshin's claim within [Calif. Civ. Code ']708.210,” which doesn't allow an attorney fees award in “independent creditor” suits such as this.

Prevailing Defendant Can Get Attorney Fees, Whether or Not Plaintiff Has Registered Copyright in Dispute

The U.S. Court of Appeals for the First Circuit decided that '402 of the Copyright Act, which prohibits copyright owners from being awarded attorney fees for suing over infringements that occur before they register their works, doesn't bar attorney fees for defendants who prevail on infringement claims based on unregistered works. Latin American Music Co. (LAMCO) v. American Society of Composers, Authors and Publishers (ASCAP), 10-1780. In this case, the district court had awarded ASCAP about $62,000 in attorney fees and costs. Affirming, the appeals court noted: “By its plain language, [']412 does not apply in this case. According to LAMCO's complaint, the alleged infringement began in 1994. [The song] 'Caballo Viejo,' however, was registered with the Copyright Office in 1983, more than a decade earlier.” The court continued: “Besides, there is nothing in the statute that prohibits fee awards in cases, like this one, of non-infringement. The reason is obvious: only copyright owners may register their copyright claims, the conduct incentivized by [']412. A defendant accused of infringing someone else's copyright could not possibly comply with the statute's registration criterion. Section 412 thus does not, logically, apply to alleged infringers.”

Summary Judgment Denied on Whether Distribution Cease-and-Desist Letters Are Privileged

The U.S. District Court for the Central District of California denied summary judgment to either side of a record-distribution dispute on the issue of whether cease-and-desist letters that defendant Universal Music Group (UMG) sent to third-parties ' to stop the sale of the plaintiffs' remixes of early Bob Marley and the Wailers recordings ' were communications protected by the Noerr-Pennington litigation-privilege doctrine. Rock River Communications Inc. v. Universal Music Group Inc., 08-635. Plaintiff Rock River had acquired its Marley licenses from San Juan Music, a purported holder of non-exclusive rights obtained from early Wailers producer Lee Perry. UMG claimed it had non-exclusive rights in the recordings through its acquisition of Polygram Group Canada and Sanctuary Records, and exclusive rights obtained from the company JAD. The cease-and-desist letters UMG had sent to record distributors threatened copyright infringement litigation. District Judge Christina A. Snyder observed: “Perry's conflicting statements and other significant discrepancies in the chain of title preclude the Court from finding as a matter of law that UMG's conduct was objectively reasonable. Also, the fact that UMG claims an exclusive license, a non-exclusive license and knows that others claim a nonexclusive license is sufficiently in conflict to create a dispute for a jury.” Judge Snyder also found that the issue of whether California's litigation privilege, Calif. Civ. Code '47(b), applied and should be presented to a jury, as there was sufficient evidence to consider “whether litigation was contemplated [by UMG] in good faith and under serious consideration.” But the district judge granted summary judgment to UMG on Rock River's anti-trust claims, under the federal Clayton and Sherman Acts, that UMG was attempting to monopolize the market for reggae music. According to the court, “Plaintiffs have not offered any evidence sufficient to raise a fact issue to enable a trier of fact to find the existence of a relevant antitrust market for the sale of a single genre of music recordings.”

Attorney Fees Award Reversed in 'Independent Creditor's' Suit Against Video Distributor

The California Court of Appeal, Second District, ruled that a company that loaned funds to a film producer wasn't entitled to attorney fees in a suit the company brought against a home-video distributor to recover revenues the distributor allegedly owed the production company. Ilshin Investment Co. Ltd. v. Buena Vista Home Entertainment Inc., B208839. Ilshin, a Korean company, had loaned money to Last Patriot Productions to make the movie The Patriot. The film didn't find theatrical exhibition but was instead distributed by Buena Vista via home video. The exclusive distribution agreement required Buena Vista to obtain Last Patriot's consent before incurring recoupable distribution expenses exceeding $900,000. Buena Vista allegedly failed to obtain the approval. Ilshin filed suit against Buena Vista in Los Angeles Superior Court for that as well as for prematurely terminating the distribution deal. The trial court awarded the plaintiff contract damages, lost profits and attorney fees. The court of appeal later reversed the damages award in part and set aside the attorney fees award, but found the trial court had erred by not granting a directed verdict for Ilshin on Ilshin's claim of conversion. In setting aside the award of attorney fees, the court of appeal noted that Ilshin's “breach of contract claims alleged that Ilshin was an unsatisfied judgment creditor of Last Patriot; that 'Buena Vista has possession or control of property in which [Last Patriot], a judgment debtor, has an interest'; and that 'Ilshin, as a judgment creditor, is entitled to bring suit against Buena Vista to have the property turned over to the judgment creditor and applied towards the reduction of the debt.' ' These allegations bring Ilshin's claim within [Calif. Civ. Code ']708.210,” which doesn't allow an attorney fees award in “independent creditor” suits such as this.

Prevailing Defendant Can Get Attorney Fees, Whether or Not Plaintiff Has Registered Copyright in Dispute

The U.S. Court of Appeals for the First Circuit decided that '402 of the Copyright Act, which prohibits copyright owners from being awarded attorney fees for suing over infringements that occur before they register their works, doesn't bar attorney fees for defendants who prevail on infringement claims based on unregistered works. Latin American Music Co. (LAMCO) v. American Society of Composers, Authors and Publishers (ASCAP), 10-1780. In this case, the district court had awarded ASCAP about $62,000 in attorney fees and costs. Affirming, the appeals court noted: “By its plain language, [']412 does not apply in this case. According to LAMCO's complaint, the alleged infringement began in 1994. [The song] 'Caballo Viejo,' however, was registered with the Copyright Office in 1983, more than a decade earlier.” The court continued: “Besides, there is nothing in the statute that prohibits fee awards in cases, like this one, of non-infringement. The reason is obvious: only copyright owners may register their copyright claims, the conduct incentivized by [']412. A defendant accused of infringing someone else's copyright could not possibly comply with the statute's registration criterion. Section 412 thus does not, logically, apply to alleged infringers.”

Summary Judgment Denied on Whether Distribution Cease-and-Desist Letters Are Privileged

The U.S. District Court for the Central District of California denied summary judgment to either side of a record-distribution dispute on the issue of whether cease-and-desist letters that defendant Universal Music Group (UMG) sent to third-parties ' to stop the sale of the plaintiffs' remixes of early Bob Marley and the Wailers recordings ' were communications protected by the Noerr-Pennington litigation-privilege doctrine. Rock River Communications Inc. v. Universal Music Group Inc., 08-635. Plaintiff Rock River had acquired its Marley licenses from San Juan Music, a purported holder of non-exclusive rights obtained from early Wailers producer Lee Perry. UMG claimed it had non-exclusive rights in the recordings through its acquisition of Polygram Group Canada and Sanctuary Records, and exclusive rights obtained from the company JAD. The cease-and-desist letters UMG had sent to record distributors threatened copyright infringement litigation. District Judge Christina A. Snyder observed: “Perry's conflicting statements and other significant discrepancies in the chain of title preclude the Court from finding as a matter of law that UMG's conduct was objectively reasonable. Also, the fact that UMG claims an exclusive license, a non-exclusive license and knows that others claim a nonexclusive license is sufficiently in conflict to create a dispute for a jury.” Judge Snyder also found that the issue of whether California's litigation privilege, Calif. Civ. Code '47(b), applied and should be presented to a jury, as there was sufficient evidence to consider “whether litigation was contemplated [by UMG] in good faith and under serious consideration.” But the district judge granted summary judgment to UMG on Rock River's anti-trust claims, under the federal Clayton and Sherman Acts, that UMG was attempting to monopolize the market for reggae music. According to the court, “Plaintiffs have not offered any evidence sufficient to raise a fact issue to enable a trier of fact to find the existence of a relevant antitrust market for the sale of a single genre of music recordings.”