Capitol Records, LLC v. Redigi Inc.

Filing 203

MEMORANDUM OF LAW in Opposition re: 195 MOTION in Limine . . Document filed by John Ossenmacher, Redigi Inc., Larry Rudolph. (Raskin, Mark)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------------------------- X
:
CAPITOL RECORDS, LLC, CAPITOL
CHRISTIAN MUSIC GROUP, INC. and
:
VIRGIN RECORDS IR HOLDINGS, INC.,
Plaintiffs,
-againstREDIGI INC., JOHN OSSENMACHER and
LARRY RUDOLPH a/k/a LAWRENCE S.
ROGEL,

12 Civ. 0095 (RJS)

:
:
:
:
:

Defendants.
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DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTIONS IN LIMINE

TABLE OF CONTENTS
OPPOSITION TO MOTION IN LIMINE No. 1 re INNOCENT INFRINGEMENT AND
WILLFULNESS
1
I.

Plaintiffs’ Arguments with Respect to Innocent Infringement and Willfulness are
Improper Motions for Summary Judgment
1

II.

Defendants Should Not Be Precluded From Arguing Innocent Infringement

2

A.

Section 402(d) Does Not Bar Arguments Concerning Innocent Infringement

2

B.

This Court’s Summary Judgment Decision Does Not Preclude Defendants’
Innocent Infringement Defense

4

Defendants Should Not Be Precluded From Arguing To The Jury that Any
Infringement Was Not Willful

5

III.

OPPOSITION TO MOTION IN LIMINE No. 2 re OPINIONS OF COUNSEL

9

OPPOSITION TO MOTION IN LIMINE No. 3 re FAIR USE AND LICENSING

9

I.

Fair Use Was Not Addressed with Respect to Recordings that Were Only Offered
For Sale
9

II.

Licensing Was Not Addressed with Respect to Recordings that Were Only Offered
For Sale
12

MOTION IN LIMINE NO. 4 - OWNERSHIP

13

i

TABLE OF AUTHORITIES
Page(s)
Cases
Arcliehtz and Films Pvt. Ltd. v. Video Palace Inc.,
303 F. Supp. 2d 356 (S.D.N.Y. 2003)........................................................................................8
Arden v. Columbia Pictures Indus., Inc.,
908 F. Supp. 1248 (S.D.N.Y. 1995).........................................................................................13
BMG Music v. Gonzalez,
430 F.3d 888 (7th Cir. 2005) .....................................................................................................3
Bowers v. Nat'l Collegiate Athletic Ass'n,
563 F.Supp.2d 508 (D.N.J.2008) ...........................................................................................1, 2
Bryant v. Media Rights Productions, Inc.,
603 F.3d 135 (2d. Cir. 2010).....................................................................................................7
Capitol Records, Inc. v. Naxos of Am., Inc.,
4 N.Y.3d 540, 830 N.E.2d 250 (2005) .....................................................................................13
Cayuga Indian Nation of NY. v. Pataki,
79 F. Supp. 2d 78 (N.D.N.Y. 1999) ...........................................................................................7
DC Comics, Inc. v. Reel Fantasy, Inc.,
696 F.2d 24 (2d Cir. 1982).......................................................................................................11
Dumas v. Dagl,
88-cv-2293, 1990 WL 258343 (S.D.N.Y. May 22, 1990) .........................................................8
Dynamic Sols., Inc. v Planning & Control, Inc.,
646 F Supp. 1329 (S.D.N.Y. 1986)..........................................................................................13
Electra Entm't Grp. Inc. v. McDowell,
06-cv-115 (CDL), 2007 WL 3286622 (M.D. Ga. Nov. 6, 2007)...............................................3
Entral Grp. Int’l. LLC v. YHLC Corp.,
05-cv-1912, 2007 U.S. Dist. LEXIS 90684 (E.D.N.Y. Dec. 10, 2007) .....................................9
Fitzgerald Publ'g Co.. Inc. v. Baylor Publ'g Co., Inc.,
807 F.2d 1110 (2d Cir. 1986).................................................................................................7, 8
Fonar Corp. v. Domenick,
105 F.3d 99 (2nd Cir.1997)......................................................................................................14

ii

Gucci Am.. Inc. v. Duty Free Apparel. Ltd.,
315 F. Supp. 2d 511,520 (S.D.N.Y. 2004).................................................................................7
Innovative Networks v. Satellite Airlines Ticketing Ctrs.,
871 F. Supp. 709 (S.D.N.Y. 1995).............................................................................................3
Intl. Media Films, Inc. v Lucas Entertainment, Inc.,
703 F Supp. 2d 456 (S.D.N.Y. 2010).......................................................................................14
Island Software & Computer Serv., Inc. v. Microsoft Corp.,
413 F.3d 257 (2d Cir. 2005).......................................................................................................5
Keane Dealer Servs., Inc. v. Harts,
968 F. Supp. 944 (S.D.N.Y. 1997)...........................................................................................12
Lyons P'ship, L.P. v. AAA Entm't Inc.,
98-cv-0475, 1999 WL 1095608 (S.D.N.Y. Dec. 3, 1999) .........................................................8
Malibu Media, LLC v. Does 1,
12-cv-2078, 2013 WL 1702549 (E.D. Pa. Mar. 6, 2013) ..........................................................3
Maverick Recording Co. v. Harper,
598 F.3d 193 (5th Cir. 2010) .................................................................................................2, 3
Palmieri v. Defaria,
88 F.3d 136 (2d Cir.1996)..........................................................................................................1
Pavone v. Puglisi,
08-cv-2389-MEA, 2013 WL 245745 (S.D.N.Y. Jan. 23, 2013) ............................................1, 2
SEC v. Retail Pro, Inc.,
08-cv-1620, 2011 WL 589828 (S.D. Cal. Feb. 10, 2011)..........................................................7
Shady Records, Inc. v. Source Enterprises, Inc.,
03-cv-9944, 2005 WL 14920 (S.D.N.Y. Jan. 3, 2005) ............................................................11
U.S. Media Corp. v. Edde Entm't Corp.,
94-cv-4849, 1998 WL 401532 (S.D.N.Y. July 17, 1998)......................................................8, 9
U.S. Media Corp. v. Edde Enm’t, Inc.,
94-cv-4849, 1996 WL 520901 (S.D.N.Y. Sept. 10, 1996) ....................................................6, 7
Weiss v. La Suisse, Societe D'Assurances Sur La Vie,
293 F.Supp.2d 397 (S.D.N.Y.2003)...........................................................................................1
Statutes
17 USC § 402(d) ......................................................................................................................2, 3, 4
iii

17 USC § 504(c)(2) ......................................................................................................................3, 5

iv

OPPOSITION TO MOTION IN LIMINE No. 1 re INNOCENT INFRINGEMENT
AND WILLFULNESS
I.

Plaintiffs’ Arguments with Respect to Innocent Infringement and Willfulness are
Improper Motions for Summary Judgment
Plaintiffs’ first motion in limine seeks judgment in its favor regarding its willfulness

claim and Defendants’ innocent infringement defense. Similarly, Plaintiffs’ third motion in
limine seeks judgment concerning Defendants’ fair use and license defense and Plaintiffs’ fourth
motion in limine seeks a finding, as a matter of law, that Plaintiffs own every track at issue. A
motion in limine is not the proper vehicle to request judgment on a claim or defense.
The purpose of a motion in limine is to facilitate an efficient trial “by enabling the Court
to rule in advance of trial on the relevance of certain forecasted evidence, as to issues that are
definitely set for trial, without lengthy argument at, or interruption of, the trial.” Palmieri v.
Defaria, 88 F.3d 136, 141 (2d Cir.1996); Weiss v. La Suisse, Societe D'Assurances Sur La Vie,
293 F.Supp.2d 397, 407 (S.D.N.Y.2003). A motion in limine “is not a proper vehicle for a party
to ask the Court to weigh the sufficiency of the evidence to support a particular claim or defense,
because ‘[t]hat is the function of a motion for summary judgment, with its accompanying and
crucial procedural safeguards.’” Pavone v. Puglisi, 08-cv-2389-MEA, 2013 WL 245745 at *1
(S.D.N.Y. Jan. 23, 2013) (quoting Bowers v. Nat'l Collegiate Athletic Ass'n, 563 F.Supp.2d 508,
532 (D.N.J.2008)). Indeed, if Plaintiffs wanted to preclude Defendants from raising a defense at
trial “because there was no genuine issue of material fact as to them, then [they] should not have
filed a motion in limine on the eve of trial, but instead should have filed a summary judgment
motion.” Pavone, 2013 WL 245745, at *2.
The “crucial procedural safeguards that accompany summary judgment motions, are not
mere formalities; they help ensure the accurate resolution of claims as a matter of law.” Id.; see

1

Bowers, 563 F.Supp.2d at 532. As such, parties “cannot evade the procedural requirements of
Rule 56 by offering arguments for summary judgment in a motion in limine.” Pavone, 2013 WL
245745, at *2. When a Court considers a motion for summary judgment under the guise of a
motion in limine it is appropriate to require the movant to file “Rule 56.1 statements” with
“undisputed facts and memoranda of law.” Id.
Here, Defendants have pled the affirmative defenses of innocent infringement, fair use
and license and Plaintiffs’ have pled willful infringement and, as detailed below, bear the burden
of establishing ownership of each track at issue. Now, on the eve of trial, Plaintiffs boldly ask the
Court to find that there are no disputes of fact with respect to each of these issues. A motion in
limine is simply not the proper vehicle to request judgment on a claim or defense, especially
where, as here, the claim and defense concern quantum of damages, and the Plaintiffs
strategically elected not to place such issue in their summary judgment motion.
II.

Defendants Should Not Be Precluded From Arguing Innocent Infringement
A.

Section 402(d) Does Not Bar Arguments Concerning Innocent Infringement

Plaintiffs’ arguments with respect to Section 402(d) of the copyright act and innocent
infringement should be rejected because Plaintiffs fail to: (1) identify any evidence regarding its
alleged placing of copyright notice on phonorecords; (2) identify any evidence regarding each of
the Defendants’ access to such phonorecords; and (3) demonstrate the applicability of § 402(d) in
the context of digital music. Plaintiffs’ failures preclude judgment in their favor on the issue of
innocent infringement.
A party may be barred from presenting an innocent infringement defense “[i]f a notice of
copyright in the form and position specified by this section appears on the published
phonorecord or phonorecords to which a defendant in a copyright infringement suit had access.”

2

17 USC § 402(d). Before a Section 402(d) bar applies, a plaintiff must have affixed the required
statutory notice on all phonorecords at issue. Indeed, the statute expressly requires the placing of
such notices on phonorecords and access to such phonorecords. The cases Plaintiffs cite in
support of their argument do not find otherwise. In each, the court made a factual finding
establishing that the copyright holder affixed the correct notice on all the phonorecords at issue.
See BMG Music v. Gonzalez, 430 F.3d 888, 892 (7th Cir. 2005) (“It is undisputed that [plaintiff]
gave copyright notice as required - on the surface of the phonorecord, or on the phonorecord
label or container”); Maverick Recording Co. v. Harper, 598 F.3d 193 (5th Cir. 2010) (“The
district court acknowledged that Plaintiffs provided proper notice on each of the published
phonorecords from which the audio files were taken.”). Here, the court made no such factual
finding. Instead, the question as to whether Plaintiffs affixed the proper statutory notice each of
the phonorecords at issue remains open and disputed. Where questions of fact remain, it would
be improper to strike Defendants’ “innocent infringer” defense. See Malibu Media, LLC v. Does
1, 12-cv-2078, 2013 WL 1702549, at *2 (E.D. Pa. Mar. 6, 2013) (denying plaintiff’s motion to
strike innocent infringer defense because it would be improper to do so where there remained an
open question as to whether plaintiff attached proper copyright notices to its works). Where a
question of fact exists as to whether defendant had access to the notice of copyright, defendant is
entitled to a jury determination of the proper amount of statutory damages under 17 USC §
504(c)(2). See Electra Entm't Grp. Inc. v. McDowell, 06-cv-115, 2007 WL 3286622, at *2 (M.D.
Ga. Nov. 6, 2007) (finding a question of fact concerning access precluded judgment); Innovative
Networks v. Satellite Airlines Ticketing Ctrs., 871 F. Supp. 709, 721 (S.D.N.Y. 1995) (“A finding
of innocent infringement primarily is a factual determination”).

3

Further, as a threshold matter, Plaintiffs have failed to establish that Section 402(d) is
even applicable in the circumstances of this case. In Malibu, the court noted the unsettled law
regarding the applicability of a Section 402(d) bar in a suit involving internet file-sharing. 2013
WL 1702549 at *2. Further, in denying certiorari in Maverick, Justice Alito recognized that
“[t]here is a strong argument that § 402(d) does not apply in a case involving the downloading of
digital music files.” Maverick, –––U.S. ––––, –––––, 131 S.Ct. 590, 590–91, 178 L.Ed.2d 511
(2010) (Alito, J., dissenting from the denial of certiorari). Put simply, digital copies that were
arguably accessible to Defendants, and were allegedly copied by Defendants, were not published
phonographs that bore a copyright notice. As such, Section 402(d) is inapplicable.
B.

This Court’s Summary Judgment Decision Does Not Preclude Defendants’
Innocent Infringement Defense

Plaintiffs seek to preclude Defendants from submitting any evidence or argument that
they believe is inconsistent with facts allegedly established on summary judgment. The issues
decided by the Court on summary judgment concerned direct copyright infringement,
contributory infringement and vicarious liability, all “incident to sales.” D.I. 109, 3/30/13
Opinion, p. 10. Plaintiffs never argued that the mere uploading of songs to ReDigi’s servers, or
storage of them on ReDigi’s servers, was actionable infringement. Indeed, Plaintiffs did not even
dispute that such acts constitute “fair use.” See Id. Nevertheless, Plaintiffs subsequently amended
their Complaint to assert infringement with respect to approximately 230 new tracks that were
never sold through ReDigi’s system. These tracks were never “copied” incident to a sale. The
Court’s summary judgment decision did not concern the issue of liability with respect to these
songs. Given the express and implied licenses from iTunes, and Plaintiffs’ previous failure to
dispute the “fair use” exception in this context, it is likely a jury will not find infringement. Of
course, to the extent infringement is found, such infringement would be “innocent infringement.”
4

With respect to songs that were actually sold through ReDigi’s system, the Court’s
summary judgment opinion did not address the issue of “innocent infringement.” Indeed,
following summary judgment, Plaintiffs informed the Court that they would again be moving
“for summary judgment on the innocent infringement defense.” December 23, 2014 Hr. Tr.
34:24 - 35:1, D.I. 146. Plaintiffs never followed through on their threatened motion. But now
they argue that “innocent infringement” was somehow decided in the original summary
judgment order. That is simply not true. The Court made clear when addressing the subjective
knowledge of ReDigi, that it “will not create a subjective, good faith defense to contributory
liability’s objective knowledge requirement.” See D.I. 109, 3/30/13 Opinion, p. 16. As such,
contrary to Plaintiffs’ current assertion, the Court did not make a finding that the Defendants’
infringement is not “innocent infringement.”
III.

Defendants Should Not Be Precluded From Arguing To The Jury that Any
Infringement Was Not Willful
There has been no finding that Defendants acted willfully for the purpose of assessing

statutory damages within the meaning of 17 USC §504(c)(2).
A determination of “willfulness” requires finding: “(1) that the defendant was actually
aware of the infringing activity, or (2) that the defendant’s actions were the result of ‘reckless
disregard’ for, or ‘willful blindness’ to, the copyright holder’s rights.” Island Software &
Computer Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 263 (2d Cir. 2005). Where there is no
conclusive evidence of actual knowledge, and questions of fact remain as to whether defendants
were willfully blind, plaintiffs are not entitled to summary judgment on the question of
willfulness. Id.
As an initial matter, the Court’s summary judgment decision did not address Defendants’
knowledge or belief with respect to recordings that were uploaded to Redigi’s servers but never
5

sold, because those recordings were not at issue in plaintiffs’ motion. Thus, there has been no
finding that such mere uploads were “infringement” let alone an express finding that such
uploads were willful infringement. As such, at best, Plaintiffs’ characterizations of the summary
judgment decision and its implications only apply to recordings that were actually sold.
With respect to the recordings actually sold, plaintiffs argue that the Court’s findings in
its summary judgment decision lead inexorably to the conclusion that Defendants engaged in
“willful” copyright infringement as that term is used in section 504(c) of the Copyright Act. The
Court, however, never explicitly characterized Defendants’ conduct as “willful,” and never
addressed the issue of willful infringement. Plaintiffs did not seek summary judgment on the
issue of willful infringement. Accordingly, Defendants have not been accorded an opportunity to
present evidence rebutting Plaintiffs’ claim of willful infringement. Indeed, the issue of
willfulness and the particular facts concerning willfulness as it pertains to songs merely uploaded
and never sold would have been an inappropriate basis for summary judgment. See U. S. Media
Corp. v. Edde Enm’t, Inc., 94-cv-4849, 1996 WL 520901, at *7 (S.D.N.Y. Sept. 10, 1996)
(recognizing that willfulness requires an analysis of an infringer’s “state of mind” and “is not
usually susceptible to summary judgment”).
In addressing the knowledge required for contributory infringement in its SJ Decision,
the Court noted that the knowledge requirement is “‘objective’ and satisfied where Defendants
knew or had reason to know of the infringing activity.” See D.I. 109, 3/30/13 Opinion, p. 16.
Notably, the Court did not assess the particular state of mind of each of the Defendants because it
was not required. See id. (refusing to create a subjective defense to contributory infringement). In
contrast to the knowledge at issue on summary judgment, “a determination as to willfulness
requires assessment of a party’s state of mind, a factual issue that is not usually susceptible to

6

summary judgment ….” U.S. Media, 1996 WL 520901, at *7. Since the summary judgment
decision did not consider an assessment of each Defendant’s “state of mind,” the summary
judgment decision did not, and could not, decide the issue of willfulness as a matter of law.
Where, as here, different legal issues, with different standards, are presented to a jury, the
underlying factual statements in a summary judgment opinion should not be treated as
established. See SEC v. Retail Pro, Inc., 08-cv-1620, 2011 WL 589828, at *3 (S.D. Cal. Feb. 10,
2011) (denying motion in limine, noting that “the Court declines to enter an order pursuant to
Rule 56(g) requiring the facts stated in Plaintiff's motion be treated as established in the jury trial
… due to the differing legal standards at issue in the claims decided on summary judgment and
those which remain to be decided by the jury”) (internal citation omitted); Cayuga Indian Nation
of NY. v. Pataki, 79 F. Supp. 2d 78, 86-87 (N.D.N.Y. 1999) (denying motion in limine to
preclude relevant evidence on law of the case grounds where prior ruling “most decidedly was
not one of damages” and “the law of the case doctrine does not mandate the conclusion that
[prior pronouncements] are binding in this entirely different damage context”).
Further, the jury will be charged with determining the amount of statutory damages to
which Plaintiffs are entitled within the broad range Congress authorized for such infringements,
i.e., between $750 and $30,000 or between $750 and $150,000, per infringement. See 17 U.S.C.
§ 504(c). In determining damages, a jury may properly consider, inter alia, defendants’ “state of
mind,” as well as “the conduct and attitude of the parties.” See Bryant v. Media Rights
Productions, Inc., 603 F.3d 135, 144 (2d. Cir. 2010). The first factor that the jury must consider
in assessing statutory damages refers to the question of “whether the defendant’s conduct was
innocent or willful.” i.e., the infringer’s state of mind. See Gucci Am.. Inc. v. Duty Free Apparel.
Ltd., 315 F. Supp. 2d 511,520 (S.D.N.Y. 2004). But the analysis does not end with the

7

determination of which descriptive (willfulness or innocent) applies. See Fitzgerald Publ'g Co..
Inc. v. Baylor Publ'g Co., Inc., 807 F.2d 1110, 115 (2d Cir. 1986) (“"[I]t is possible in the same
action for a plaintiff not to be able to prove a defendant’s willfulness, and, at the same time, for
the defendant to be unable to show that it acted innocently”). In assessing statutory damages, the
jury must also consider the “degree of willfulness.” Dumas v. Dagl, 88-cv-2293, 1990 WL
258343, at *7 (S.D.N.Y. May 22, 1990); see U.S. Media Corp. v. Edde Entm't Corp., 94-cv4849, 1998 WL 401532, at *18 (S.D.N.Y. July 17, 1998) (“T]he pertinent considerations in
deciding the amount of [a statutory damages] award encompass both the degree of the
defendant’s culpability and the extent of the injury caused. Among the relevant factors are the
degree of willfulness or innocence of the defendant....”); Lyons P'ship, L.P. v. AAA Entm't Inc.,
98-cv-0475, 1999 WL 1095608, at *10 (S.D.N.Y. Dec. 3, 1999) (recognizing that “the degree of
willfulness in the infringing conduct” is a factor in assessing statutory damages).
Thus, even if the infringements attributed to defendants were willful (they were not),
Defendants nonetheless must be accorded the right to present to the jury the very evidence that
Plaintiffs seek to exclude. That evidence bears directly upon the degree of willfulness or “bad
faith,” so that the jury, in its “broad discretion,” properly may reach a just determination of the
precise measure of statutory damages to award Plaintiffs. See Arcliehtz and Films Pvt. Ltd. v.
Video Palace Inc., 303 F. Supp. 2d 356, 362 (S.D.N.Y. 2003). There is nothing in the summary
judgment decision, or settled law that precludes Defendants from presenting evidence to the jury
that would shed light on the degree of their alleged “willfulness,” a factor central to its
determination of statutory damages.

8

OPPOSITION TO MOTION IN LIMINE No. 2 re OPINIONS OF COUNSEL
Defendants do not seek to introduce any opinion of counsel that was not produced during
discovery. In their Motion, Plaintiffs point to no exhibit that could be excluded on this basis.
This should end the inquiry because there is nothing to exclude.
To the extent Plaintiffs’ motion could be read to seek to preclude Defendants from
presenting evidence of “good faith”, Plaintiffs motion should be denied. Indeed, as detailed
above, the degree to which a defendant acted in “good faith” or “bad faith” presents a factual
issue that the jury may weigh in determining damages. See Entral Grp. Int’l. LLC v. YHLC
Corp., 05-cv-1912, 2007 U.S. Dist. LEXIS 90684, at *9-*10 (E.D.N.Y. Dec. 10, 2007). This
must be so, as the Copyright Act provides such a broad range of awards for willful infringement,
spanning $750 to $150,000. In light of the range of permissible awards, it is self-evident that a
jury must consider the degree to which all of the relevant factors apply to the facts at issue. See
U.S. Media Corp., 1998 WL 401532, at *18.
OPPOSITION TO MOTION IN LIMINE No. 3 re FAIR USE AND LICENSING
I.

Fair Use Was Not Addressed with Respect to Recordings that Were Only Offered
For Sale
Opposing Plaintiffs’ motion for summary judgment, ReDigi argued that uploading to and

downloading from the Cloud Locker for storage and personal use are protected fair use; Capitol
agreed. See D.I. 109, 3/30/13 Order, p. 10. Capitol instead asserted that “uploading to and
downloading from the Cloud Locker incident to sale fall outside the ambit of fair use,” and the
Court agreed. See id.
Section 107 of the Copyright Act, provides that the “fair use of a copyrighted work,
including such use by reproduction in copies or phonorecords . . . is not an infringement of
copyright.” See 17 U.S.C. §107. To determine fair use a finder of fact should consider, inter alia:
9

(1) the purpose and character of the use, including whether such use is of a
commercial nature or is for nonprofit educational purposes; (2) the nature of the
copyrighted work; (3) the amount and substantiality of the portion used in relation
to the copyrighted work as a whole; and (4) the effect of the use upon the
potential market for or value of the copyrighted work.
See D.I. 109, 3/30/13 Order, p. 7.
The Court has determined that works uploaded and sold through the ReDigi website are
not protected by fair use because, among other reasons, “ReDigi and the uploading user directly
profit from the sale of a digital music file, and the downloading user saves significantly on the
price of the song in the primary market.” See 3/30/13 Opinion, p. 10. Additionally, the Court
found that “the product sold in ‘ReDigi’s secondary market is indistinguishable from that sold in
the legitimate primary market. . . . The clear inference is that ReDigi will divert buyers away
from that primary market.” See id.
These findings, however, were not directed to works uploaded to the Cloud Locker that
were thereafter merely offered for sale and never sold. That category of works was not part of the
Complaint, and thus not at issue, when the summary judgment decision was rendered.
Importantly, the Court recognized that copying incident to uploading was not disputed to be fair
use. See D.I. 109, 3/30/13 Order, p. 7. The later “offering for sale” of tracks previously uploaded
under the “fair use” exception cannot be an act of infringement. Id. at 8, n. 6. Indeed, prior to an
actual sale being consummated, the only individual with the ability to listen to or download a
track is the individual who uploaded the track (i.e., the actual owner of that track). Thus, the only
manner in which a track offered for sale may be “used” prior to sale is identical to the manner in
which a track not offered for sale may be used. Further, even if these two separate acts,
uploading and offering for sale -- completed at two separate times -- were considered by a finder
of fact to be a single act, offering the track for sale provides no profit to the seller (or ReDigi), no

10

savings to a putative purchaser, and no alleged diversion of buyers away from the primary
market. In these circumstances, an analysis of “far use” would be markedly different than that for
tracks merely uploaded to a user’s Cloud Locker. There can be no dispute that the Court did not
undertake that analysis with respect to tracks that were merely uploaded and never sold.
Accordingly, the issue remains undecided and should be presented to the jury. See DC Comics,
Inc. v. Reel Fantasy, Inc., 696 F.2d 24, 28 (2d Cir. 1982) (recognizing fair use factors “raise
essentially factual issues [and] are normally questions for the jury.”).
The jury may find that the later offer for sale would not retroactively obviate the fair use
defense otherwise applicable to that upload. To the extent a user uploaded a song to her Cloud
Locker and then, while retaining her ability to listen to the song in question, decided to offer that
song for sale, but did not consummate a sale, the jury should be allowed to consider Redigi’s fair
use defense. See DC Comics Inc. v. Reel Fantasy, Inc., 696 F.2d 24, 28 (2d Cir. 1982) (“The fair
use defense turns not on hard and fast rules but rather on an examination of the facts in each
case. The four factors listed in Section 107 raise essentially factual issues and, as the district
court correctly noted, are normally questions for the jury.”) (internal quotation omitted); Shady
Records, Inc. v. Source Enterprises, Inc., 03-cv-9944, 2005 WL 14920, at *17 (S.D.N.Y. Jan. 3,
2005) (“The four factors “raise essentially factual issues [and] are normally questions for the
jury”) (denying summary judgment motion and leaving “any ultimate determination as to the
merits of a fair use defense to the fact finder.”)
In an effort to avoid adjudication of Redigi’s “fair use” defense with respect to the tracks
that were never sold, Plaintiffs’ rely on the Court’s prior orders. However, the Court’s
endorsement of order, D.I. 186, supports Defendants’ position, finding that “Plaintiffs may
introduce evidence about recordings that were uploaded to the ReDigi server and offered for

11

sale. The jury may then decide what, if any, damages are appropriate for such recordings.” The
endorsement order did not preclude Defendants from asserting a fair use defense. Nor did the
Court’s decision on Plaintiffs’ motion to amend the Complaint, or any statement made at the
hearing thereon, decide the issue of fair use. Indeed, in contesting Plaintiffs’ motion, Defendants
argued that it would be futile to allow Plaintiffs to amend the Complaint because uploading was
protected by “fair use”. D.I. 188. Although the Court allowed Plaintiffs to amend the Complaint
to assert infringement against tracks that were never sold, the Court did not grant summary
judgment with respect to these newly added tracks at the time it allowed the amendment, or any
time thereafter. D.I. 146 at 20-22. Indeed, the standard with respect to amendments, which are
freely granted, and summary judgment, which requires “no dispute of material fact”, are vastly
different. To date, there has been no briefing, no evidentiary hearing, and no argument directed
to the issue of whether fair use applies to songs that were uploaded, used solely for the
enjoyment of the uploading individual, and were offered for sale.
Simply put, there are a small number of tracks that were actually sold; the remaining
tracks are just stored in User Cloud Lockers and available only to the individual who uploaded
them for personal use -- which is fair use, as Capitol admits, and iTunes permits.
II.

Licensing Was Not Addressed with Respect to Recordings that Were Only Offered
For Sale
ReDigi is entitled to argue to the jury that the works uploaded to the Cloud Locker and

offered for sale (but not sold) cannot be subject to statutory damages because any “reproduction”
of such works was subject to either an express or implied license. “[A] nonexclusive license may
be . . . implied from conduct . . . In fact consent given in the form of mere permission or lack of
objection is also equivalent to a nonexclusive license and is not required to be in writing.” Keane
Dealer Servs., Inc. v. Harts, 968 F. Supp. 944, 947 (S.D.N.Y. 1997). Here, ReDigi’s customers,
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i.e., the track owners, had an express or implied license to store their music in multiple locations
by Plaintiffs and/or iTunes, and such activities were encouraged by both Plaintiffs and iTunes. At
the time of summary judgment, the only tracks at issue were those that were actually sold. An
express or implied license defense does not apply to those tracks. However, Defendants should
be allowed to argue to the jury that the defense applies to tracks that were offered for sale but not
sold. Indeed, Plaintiffs’ attempt to tactically add new theories of liability following summary
judgment and then requesting judgment with respect to those new theories as part of a motion in
limine is procedurally improper and highly prejudicial. No judgment should be granted in the
absence of a full opportunity for Defendants to present their defenses.
MOTION IN LIMINE NO. 4 - OWNERSHIP
In order to succeed on a claim of copyright infringement, a copyright owner must prove
two elements: “(1) ownership of a valid copyright, and (2) copying of constituent elements of the
work that are original.” Arden v. Columbia Pictures Indus., Inc., 908 F. Supp. 1248, 1257
(S.D.N.Y. 1995) (quoting Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991));
see Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 563, 830 N.E.2d 250, 266 (2005)
(A copyright infringement cause of action in New York consists of two elements: (1) the
existence of a valid copyright; and (2) unauthorized reproduction of the work protected by the
copyright).
While an admissible certificate of registration from the United States Copyright Office is
prima facie proof that the claimed copyright is valid and that the registrant is its legitimate
owner, here many of the registrations at issue, even if admitted at trial, are not in the name of any
of the Plaintiffs. See Dynamic Sols., Inc. v Planning & Control, Inc., 646 F Supp. 1329, 1337
(S.D.N.Y. 1986). Instead, the vast majority of the certificates of registrations for the sound

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recordings at issue are admittedly in the name of third parties. For each of these tracks Plaintiffs
argue that this Court must find ownership as a matter of law on the basis of a self-serving
interpretation of numerous agreements that were only recently produced by Plaintiffs. However,
the proffered license agreements are often silent with respect to the identity of tracks assigned,
and ambiguous, at best, with respect to the tracks covered. Further, the chain of custody with
respect to the ownership of the tracks in question is often broken in a manner that makes
Plaintiffs proof severely lacking.
As but one example, Trial Exhibit 39 identifies 156 tracks (recordings 197-353) that were
allegedly exclusively licensed from a “foreign affiliate copyright owner.” Trial Exhibit 39, at 1422. For each recording, Trial Exhibit 39 identifies a purported copyright owner. Id. For example,
for recording 197, Trial Exhibit 39 identifies Virgin France, div. of EMI Music France. Id. at 14.
The declaration submitted in support of Defendants’ motions in limine alleges that an exclusive
license was granted to Capitol by virtue of a Matrix Exchange Agreement (“MEA”). D.I. 196 at
¶ 15. However, the signatory to the MEA agreement is EMI Musical International, but EMI
Music International is not listed as the copyright claimant for a single one of the 156 tracks. Trial
Exhibit 81 at CAP001586, CAP001644. Unless (i) Capitol can establish that EMI Musical
International obtained the right to grant an exclusive license for each identified track, or (ii)
Capitol can establish that the true copyright owner has agreed to be bound by the MEA
agreement, Capitol will be unable to establish ownership of the recordings at issue. It is
Plaintiffs’ burden to prove that they are the owners or exclusive licensees of a valid copyright for
the sound recordings they claim in this action. Fonar Corp. v. Domenick, 105 F.3d 99, 103 (2nd
Cir.1997). If they are unable to do so, their claim for damages on that track must fail.

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A “transferee plaintiff in a copyright infringement action must prove that the copyright
was properly transferred to the plaintiff.” Intl. Media Films, Inc. v Lucas Entertainment, Inc.,
703 F Supp. 2d 456, 463 (S.D.N.Y. 2010) (internal citations omitted). To the extent Plaintiffs are
unable to provide admissible evidence that they own a valid copyright in and to certain sound
recordings they claim were infringed, these tracks must be excluded as a matter of law. Plaintiffs
will have failed to satisfy their burden of proof on the first and most essential element of their
claims for copyright infringement.
Put simply, Plaintiffs’ declaration in support of their motion in limine does not and
cannot lead to the conclusion that ownership has been established for each track as a matter of
law. Plaintiffs have requested a jury trial. Ownership, and all other undecided factual issues, is
for the jury to decide. Of course, to the extent the issue of ownership is not disputed with respect
to certain specific recordings Defendants will attempt to reach agreement with Plaintiffs
regarding such recordings prior to trial.

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Dated: March 18, 2016

By: /s/ Mark S. Raskin
Mark S. Raskin
New York State Bar No. 3989100
Robert A. Whitman
Vincent Filardo, Jr.
Michael S. DeVincenzo
MISHCON DE REYA NEW YORK LLP
Two Park Avenue, 20th Floor
New York, NY 10016
[e-mail]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Defendants ReDigi Inc.,
John Ossenmacher, and Larry Rudolph a/k/a
Lawrence S. Rogel
ADELMAN MATZ P.C.
Gary Philip Adelman, Esq.
Sarah Matz, Esq.
1173A Second Ave, Suite 153
New York, NY 10065
Tel: [phone]
Fax: [phone]
[e-mail]
[e-mail]
Attorneys for Defendant ReDigi Inc.

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