Willis v. Scorpio Music (Black Scorpio) S.A. et al
Filing
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ORDER Denying 24 Motion to Dismiss. Defendants shall file an Answer to the FAC within 20 days of the entry of this Order. Signed by Judge Barry Ted Moskowitz on 6/24/2016. (rlu)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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VICTOR WILLIS,
Case No.: 15cv1078 BTM(RBB)
Plaintiff,
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v.
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SCORPIO MUSIC (BLACK
SCORPIO) S.A., CAN’T STOP
PRODUCTIONS, INC., and HENRI
BELOLO,
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ORDER DENYING MOTION TO
DISMISS
DefendantS.
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Defendants Can’t stop Productions, Inc., Scorpio Music (Black Scorpio), S.A.
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and Henri Belolo have filed a motion to dismiss Plaintiff’s First Amended Complaint
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(“FAC”). For the reasons discussed below, Defendants’ motion is DENIED.
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I. BACKGROUND
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In a prior lawsuit, Scorpio Music S.A. v. Willis, Case No. 11cv1557
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BTM(RBB), Scorpio Music (“Scorpio”) and Can’t Stop Productions, Inc. (“CSP”)
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sought a judicial determination regarding the percentage of copyrights to 24
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compositions (“24 Disputed Works”) that Victor Willis was entitled to recover upon
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termination of his grants of copyright. Willis filed a counterclaim for a declaratory
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15cv1078 BTM(RBB)
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judgment that Henri Belolo (“Belolo”) did not contribute to the authorship of the
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lyrics or the music of the 24 Disputed Works and that Willis was entitled to
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recapture 50% of the copyright interests in each of those works. (Willis did not
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dispute that Jacques Morali composed the music to these works.)
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After a jury trial in February 2015, the Court issued a judgment that decreed
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that: (1) Belolo is not a joint author of 13 of the 24 Disputed Works (the “13
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Compositions”), including “YMCA,” and that Willis has recaptured 50% of the
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copyrights in those 13 works; and (2) Willis has recaptured 33% of the copyrights
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in 20 additional compositions, including 11 of the 24 Disputed Works (the “20
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Additional Compositions”).
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On May 13, 2015, Willis commenced this action. His first four causes of
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action were based on allegations that Belolo made false claims to authorship of
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the 13 Compositions, allowing Belolo to collect royalties in connection with uses of
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those compositions. Willis also asserted claims of vicarious copyright infringement
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against Belolo and breach of fiduciary duty against CSP. These claims alleged
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that Belolo and CSP allowed Sixuvus, Ltd. (“Sixuvus”) to present grand rights
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public performances of some of the 13 Compositions, 20 Additional Compositions,
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and “Macho Man,” and that Willis was never paid proceeds from the dramatic
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performances.
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In an order filed on January 19, 2016, the Court granted a motion to dismiss
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filed by Defendants. The Court dismissed the first four causes of action as barred
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by the doctrine of res judicata. The Court found that these claims were based on
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the same transactional nucleus of facts as Willis’s counterclaim in Scorpio Music
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S.A. v. Willis, Case No. 11cv1557 BTM(RBB). The Court dismissed the vicarious
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copyright infringement claim because the Complaint alleged that CSP had granted
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Sixuvus a license for dramatic performances of the compositions at issue. The
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Court also dismissed the breach of fiduciary duty claim because co-owners of
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copyrights do not owe each other a fiduciary duty.
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On February 18, 2016, Willis filed his FAC. The FAC asserts two claims: (1)
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vicarious copyright infringement for unauthorized dramatic public performance
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(against Belolo); and (2) conversion (against CSP and Belolo). The FAC alleges
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that Sixuvus, which was controlled by Belolo and CSP, made dramatic “grand
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rights” performances (“Dramatic Performances”) of at least three of the 13
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Compositions, including “YMCA” and “Hot Cop,” at least two of the 20 Additional
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Compositions, including “In the Navy” and “Go West,” and “Macho Man.” (FAC ¶
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24.) According to the FAC, CSP did not in fact grant Sixuvus a license to present
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dramatic performances of these compositions, and CSP and Belolo failed to
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account to Willis for any portion of the monies received by them from Sixuvus for
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the Dramatic Performances.
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II. DISCUSSION
Defendants move to dismiss the FAC for failure to state a claim.
As
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discussed below, the Court finds that Willis has pled sufficient facts establishing a
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plausible claim for vicarious copyright infringement and conversion.
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A. Vicarious Copyright Infringement
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1. Sham Amendment
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Defendants argue that the FAC is a sham amendment because the original
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complaint alleged: "During the three years prior to the commencement of this
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Action, Defendant CSP authorized third parties, including, without limitation,
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Sixuvus, to present the Dramatic Performances on a royalty-free license basis.”
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(Compl. ¶ 57.)
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Defendants did not grant Sixuvus, a grand rights license for live performances for
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the subject musical compositions.” (FAC ¶ 36.) Footnote 1 on page 9 of the FAC
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explains: “In the initial complaint, it was inadvertently alleged in error that Belolo
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and/or Can’t Stop had in fact issued Sixuvus a license for the use of compositions
The FAC, in contrast, alleges, “Sixuvus failed to seek, and
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for purposes of live performances when, in fact, no such license had been issued.”
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Under the California law cited by Defendants, “the policy against sham
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pleading permits the court to take judicial notice of the prior pleadings and requires
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that the pleader explain the inconsistency.” Owens v. Kings Supermarket, 198 Cal.
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App. 3d 379, 384 (1988). If the pleader fails to explain the inconsistency, “the court
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may disregard the inconsistent allegations and read into the amended complaint
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the allegations of the superseded complaint.” Id.
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Here, Willis claims that due to inadvertence, his original complaint incorrectly
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stated that CSP had granted a license to Sixuvus to present the Dramatic
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Performances. This case is unlike the California cases where a plaintiff repeatedly
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makes a factual assertion in pleadings but then makes a contrary factual assertion
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in an amended pleading with no explanation. See Owens, 198 Cal. App. 3d at 384
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(Plaintiff alleged in two successive complaints that he was injured in the street
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adjacent to the supermarket and only alleged that he was injured on the
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defendant’s premises after it became apparent that the court did not accept
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plaintiff’s argument that the supermarket’s duty extended to the street); Amid v.
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Hawthorne Community Medical Group, Inc., 212 Cal. App. 3d 1383, 1391 (1989)
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(Plaintiff alleged in four earlier complaints that there was no express nondisclosure
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contract term but then, without explanation, alleged an explicit oral contract of
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nondisclosure).
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For now, the Court will accept Willis’s explanation of inadvertent mistake and
will not treat the FAC as a sham amendment.
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2. Res Judicata
Defendants contend that Willis’s vicarious infringement claim is barred by the
doctrine of res judicata. The Court disagrees.
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The doctrine of res judicata “bars relitigation of all grounds of recovery that
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were asserted, or could have been asserted, in a previous action between the
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parties, where the previous action was resolved on the merits.” United States ex
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rel. Barajas v. Northrop Corp., 147 F.3d 905, 909 (9th Cir. 1998). “It is immaterial
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whether the claims asserted subsequent to the judgment were actually pursued in
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the action that led to the judgment; rather, the relevant inquiry is whether they could
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have been brought.” Id.
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There are three elements to a successful res judicata defense: (1) an identity
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of claims; (2) a final judgment on the merits; and (3) privity between the parties.
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United States v. Liquidators of European Federal Credit Bank, 630 F.3d 1139,
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1150 (9th Cir. 2011). Four factors are considered in determining an “identity of
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claims”:
(1) whether rights or interests established in the prior judgment would
be destroyed or impaired by prosecution of the second action; (2)
whether substantially the same evidence is presented in the two
actions; (3) whether the two suits involve infringement of the same
right; and (4) whether the two suits arise out of the same transactional
nucleus of facts.
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Constantini v. Trans World Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982)
(quoting Harris v. Jacobs, 621 F.2d 341,434 (9th Cir. 1980)).
“The fourth criterion – the same transactional nucleus of facts – is the most
important.” Liquidators, 630 F.3d at 1151. Although a plaintiff need not bring every
possible claim in an action, “where claims arise from the same factual
circumstances, a plaintiff must bring all related claims together or forfeit the
opportunity to bring an omitted claim in a subsequent proceeding.” Turtle Island
Restoration Network v. United States Dept. of State, 673 F.3d 914, 918 (9th Cir.
2012).
Although the prior action involved the same parties and ended in a final
judgment on the merits, the Court does not find that there is an identity of claims
between the prior action and this action.
The prior action concerned a
determination of authorship and percentage of copyright interest in the 24 Disputed
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Works. The current action concerns grand rights performances of some of the
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musical compositions that were the subject of the prior suit and the alleged failure
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of Defendants to compensate Willis or account to him for the Dramatic
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Performances.
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The factual issues raised by this action – whether Sixuvus had a license to
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engage in dramatic performances of the compositions and whether the
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performances constitute “grand rights” performances – do not relate to the factual
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circumstances underlying the prior action. Therefore, the Court concludes that
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there is no identity of claims and that res judicata does not bar Willis’s vicarious
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infringement claim.
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3. Improper Claim by Co-owner
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Defendants contend that Willis’s vicarious infringement claim is an improper
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claim by one co-owner of a copyright against another. But this is not necessarily
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so.
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One “infringes vicariously by profiting from direct infringement while declining
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to exercise a right to stop or limit it.”
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Grokster, Ltd., 545 U.S. 912, 930 (2005). To state a claim for vicarious copyright
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infringement, the plaintiff must allege that the defendant has (1) the right and ability
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to supervise the infringing conduct; and (2) a direct financial interest in the
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infringing activity. Perfect 10, Inc. v. Visa Int’l Serv. Ass’n, 494 F.3d 788, 802 (9th
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Cir. 2007).
Metro-Goldwyn-Mayer Studios Inc. v.
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It is well established that a co-owner of a copyright cannot be liable to
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another co-owner for infringement of the copyright. Cortner v. Israel, 732 F.2d
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267, 271 (2d Cir. 1984). It is less clear whether a co-owner can be liable to another
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co-owner for vicarious infringement, but the Court is inclined to conclude that the
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same principles precluding co-owner liability for direct infringement also preclude
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liability for vicarious infringement. See Marino v. Usher, 2014 WL 2116114, at *
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13 (E.D. Pa. May 21, 2014) (reasoning that the defendant appeared to have
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meritorious defenses to the plaintiff’s claims for direct, contributory, and vicarious
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copyright infringement because defendant was a co-owner).
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Willis alleges that Belolo (who assigned his copyright interests to Scorpio
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and is no longer a co-owner of the copyrights) aided, abetted, assisted, and
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enabled Sixuvus in its infringing activities. (FAC ¶ 46.) Willis argues that because
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Belolo is not himself a co-owner, he can be held liable for vicarious infringement.
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The Court is not entirely convinced that Belolo can be held liable for vicarious
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infringement with respect to compositions in which Scorpio has a copyright
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interest. It appears that CSP is Scorpio’s exclusive licensee of the copyrights in
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the territory of the United States. (FAC ¶ 18.) Furthermore, Willis alleges that
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Belolo is the alter ego of CSP in that he is the managing and sole director of CSP
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and the sole shareholder of CSP. (FAC ¶ 10.) To the extent Belolo is acting as
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CSP or on behalf of CSP, he stands in the shoes of a co-owner of the copyrights.
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However, the Court need not resolve this issue at this time because Willis
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also claims vicarious infringement of some of the 13 Compositions. The jury in the
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prior action found that Belolo was not a co-author of the 13 Compositions.
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Therefore, Willis’s claim of vicarious infringement with respect to the 13
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Compositions does not appear to be an improper claim by a co-owner against
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another co-owner. 1
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4. Grand Rights Performance
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Defendants contend that no “grand rights” license was required for the
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Dramatic Performances at issue. The Court denies Defendants’ motion to dismiss
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on this ground.
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It is unclear to the Court whether Scorpio owns any interest in the copyrights to the 13 Compositions
through Jacques Morali or otherwise.
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Grand rights licenses are required for “dramatic performances.”
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Nimmer on Copyright § 10.10[E]. A performance of a musical composition is
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“dramatic” if it “aids in telling a story.”
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accompanied by dialogue, scenery, and costumes, but it is possible for
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performances to be devoid of dialogue, scenery, and costumes and still be
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“dramatic.” Id. See also Robert Stigwood Group Ltd. v. Sperber, 457 F.2d 50, 55
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(2d Cir. 1972) (reasoning that performance of 20 of 23 songs from Jesus Christ
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Superstar in the identical sequence as the rock opera preserved the story line of
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the original play and rendered the performance dramatic even though there were
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Id.
Dramatic performances may be
no scenery or costumes).
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Defendants argue that there is no plot or storyline apparent in any of the
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songs and that the songs cannot be combined to tell a story. Willis counters that
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“the performances at issue are plot-based with characters, costumes,
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choreography, dialogue, and the use of Plaintiff’s Compositions aids in the telling
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of the story.” (Opp. at 10:18-21.)
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Based on the record before it, the Court cannot determine whether the
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Dramatic Performances actually are “dramatic” in nature such that a grand rights
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license is necessary. It would be more appropriate for Defendants to raise this
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argument on a motion for summary judgment.
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B. Conversion
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Defendants move to dismiss Willis’s claim for conversion on the grounds of
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res judicata and Willis’s alleged failure to establish that a grand rights license is
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necessary. For the reasons discussed above, Defendants’ res judicata and grand
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rights license arguments do not warrant dismissal.
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Defendants also assert that CSP, as an exclusive licensee, owes no duty to
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account to Willis.2 However, at this time, the Court declines to reach the issue of
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what type of licensing arrangement, if any, existed between CSP/Belolo and
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Sixuvus, and the legal effect of such an arrangement.
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III. CONCLUSION
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For the reasons discussed above, Defendants’ motion to dismiss is DENIED.
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Defendants shall file an Answer to the FAC within 20 days of the entry of this Order.
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Dated: June 24, 2016
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In footnote 1 of the Court’s prior order granting Defendants’ motion to dismiss [Doc. 20], the Court
noted:
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It is actually unclear whether CSP owes a duty of accounting to Willis. A licensee, as opposed to
a transferee, “has no duty to account to the joint owners of a work other than to the particular joint
owner who is his licensor.” 1 Nimmer on Copyright § 6.12 [C][3]. A grant executed by less than
all of the joint owners of a copyright is necessarily non-exclusive, and a non-exclusive grant is not
regarded as a “transfer,” but only a “license.” Id.
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