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Arbitration Impact on Attorney Fees and Film Company Principal
The U.S. Court of Appeals for the First Circuit reversed a district court's award of attorney fees to Sony Corp. under §505 of the Copyright Act for winning a ruling that a lawsuit over a Sony Music songwriting contest should be sent to arbitration. Cortés-Ramos v. Sony Corp. of America, 16-2441.
Luis Adrián Cortés-Ramos filed suit in the U.S. District Court of the District of Puerto Rico alleging fraudulent inducement and copyright claims. He asserted that Ricky Martin's recording “Vida” was similar to a song Cortés-Ramos had submitted to the songwriting contest. But the district court found no fraudulent inducement and ruled the song dispute should be arbitrated under the contest agreement's mandatory arbitration clause.
When Cortés-Ramos' appealed the district court's §505 attorney fees award to Sony, the First Circuit concluded: “[T]he only material alteration in the parties' legal relationship concerning the Copyright Act arises from a ruling regarding the forum in which Cortés-Ramos' Copyright Act claims must be heard. But, the Copyright Act — unlike the Federal Arbitration Act, see 9 U.S.C. §2 — reflects no congressional policy favoring or disfavoring arbitration of claims. There thus has been no 'material alteration of the legal relationship of the parties in a manner which Congress sought to promote' when it enacted §505 of the Copyright Act.”
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