Reservoir Media Management Inc. v. Craze Productions et al

Filing 78

MEMORANDUM OPINION AND ORDER re: 48 MOTION for Summary Judgment filed by Reservoir Media Management Inc. Because defendants fail to raise any material facts in dispute, plaintiff's motion for summary judgment is GRANTED with respect t o defendants' liability for copyright infringement. Because the amount of statutory damages is an issue to be decided by a jury, plaintiff's motion for summary judgment with respect to damages is DENIED. For the reasons outlined above, pl aintiff's motion for summary judgment is GRANTED in part and DENIED in part. The Clerk of Court is directed to terminate the motion pending at Dkt. No. 48. (As further set forth in this Order.) (Signed by Judge Gregory H. Woods on 9/28/2015) (kko)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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RESERVOIR MEDIA MANAGEMENT, INC., :
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Plaintiff,
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-v :
CRAZE PRODUCTIONS, ET AL.,
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Defendants. :
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: 9/28/2015

1:13-cv-1847-GHW
MEMORANDUM OPINION
AND ORDER

GREGORY H. WOODS, United States District Judge:
I.

INTRODUCTION
Reservoir Media Management, Inc. owns a share of the copyrights to the musical

compositions of twenty-eight songs recorded by late R&B artist Aaliyah. After a separate action in
California state court involving a separate copyright holder found that defendants exploited the song
recordings through iTunes and other online distribution without authorization, Reservoir brought
the present suit for copyright infringement of the musical compositions. Reservoir seeks summary
judgment for its infringement claim, statutory damages for each of the twenty-eight copyrights
infringed, and a finding that defendants’ infringement was willful. Because there are no disputes of
material fact regarding defendants’ liability, but the determination of statutory damages is a matter to
be decided by the jury, Reservoir’s motion for summary judgment is GRANTED in part and
DENIED in part.

I.

BACKGROUND
a. Facts 1
Plaintiff Reservoir Media Management, Inc. (“Reservoir”) is an independent music

publishing company that owns an extensive catalogue of music. On June 25, 2012, Reservoir
acquired a share of the copyrights to the musical compositions of twenty-eight songs recorded by
the late R&B artist Aaliyah. Statement of Undisputed Facts (“SUF”) at ¶¶ 1, 6, 11 . . . 136, Dkt. No.
66. These songs are each from Aaliyah’s albums “One in a Million” and “Aaliyah,” and include
popular late 90s and early 2000s hits such as “Are You That Somebody?” and “Try Again.”
Reservoir acquired the composition rights through an assignment from Black Fountain Publishing,
Inc. (“Black Fountain”) and related entities, including Blackground Records, LLC (“Blackground”).
Assignment of Copyright, Dkt. No. 52–2. Blackground is also the owner of separate copyrights to
the song recordings for the twenty-eight Aaliyah songs.
Each of the twenty-eight musical compositions was registered with the Copyright Office,
and the Black Fountain/Reservoir assignment covering the compositions was recorded with the
Copyright Office. SUF at ¶¶ 1, 6, 11 . . . 136; id. at ¶¶ 2, 7, 12 . . . 137. The assignment gave
Reservoir a 50% interest in all ownership rights to the compositions, including “any and all causes of
action for infringement of the Compositions, past, present, and future.” Assignment of Copyright.
Defendants Craze Productions (“Craze”) and Hiphoplands, Ltd. (“Hiphoplands”) are
entities that digitally distribute music. Defendant Sam Kleinman was a former co-owner and current
consultant of Craze. Kleinman Dep. 23:9–24:15, Dkt. No. 55–3. Mr. Kleinman is also a
shareholder and current director of Hiphoplands. Id. at 65:8–65:18. Defendants admit that they
sold or distributed in the United States phonorecords containing the copyrighted musical
compositions at issue without a license from plaintiff. Defs.’ Answers to First Reqs. Admis., Dkt.
Unless otherwise specified, facts are taken from the parties’ Local Rule 56.1 Statements of Undisputed
Facts, Dkt. Nos. 50, 66, 68, and the evidence submitted in connection with this motion.

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No. 55–1. Defendants also admit that at least one of them generated approximately $294,384.10 in
revenue from iTunes sales of Aaliyah songs containing the copyrighted compositions, as well as
additional but unspecified revenue from internet streaming services Vevo and Youtube. SUF at
¶¶ 142–43. Thus, defendants do not contest that plaintiff owns valid copyrights to the twenty-eight
musical compositions, or that defendants sold or distributed phonorecords containing the
copyrighted compositions without a license from plaintiff.
The major area of disagreement between the parties concerns the significance of prior
litigation between Hiphoplands and Blackground, one of the assignors listed in the Black
Fountain/Reservoir assignment covering the musical compositions. That dispute began in 2002,
when Blackground entered into an agreement (hereinafter the “2002 Agreement”) with a company
called Unique Corp. Ltd. (“Unique”). The 2002 Agreement granted Unique licenses outside of
North America to song recordings from Blackground’s music catalog, including Aaliyah. 2002
Agreement at ¶ 2–4, Dkt. No. 55–6. The licenses included the right to “market records via the
internet and other such similar methods.” Id. at ¶ 2. The 2002 Agreement did not grant Unique
licenses to the musical compositions for any song, but rather provided that Blackground “shall
acquire music publishing licenses in respect of all compositions release [sic] herein.” Id. at ¶ 11(iv).
In March 2007, Unique assigned its rights under the 2002 Agreement to Hiphoplands. Assignment
of Rights, Dkt No. 70.
In June 2007, Hiphoplands filed suit against Blackground in California state court, bringing
state law claims for breach of contract and fraud. Hiphoplands Complaint, Hiphoplands, Ltd. v.
Blackground Records, LLC, Case No. BC372661, Superior Court of California, County of Los Angeles,
Dkt. No. 55–10. Hiphoplands’s complaint alleged that Blackground “failed to deliver all recordings”
for foreign distribution, as required by the 2002 Agreement. Id. at ¶¶ 15, 17. Specifically,
Hiphoplands contended that Blackground misrepresented that artists Toni Braxton and Jojo were
signed to another label, affecting Unique’s (and therefore Hiphoplands’s) rights to distribute
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recordings by those artists. Id. at ¶¶ 19–20, 23. The complaint made no allegations regarding the
rights to musical compositions for any artists’ work.
Blackground filed a cross complaint against Hiphoplands and Unique on December 12,
2007, bringing state law claims for breach of contract and for an accounting. Cross Complaint, Dkt.
No. 70. The Cross Complaint alleged that Hiphoplands and Unique failed to pay royalties for their
use of Blackground’s recordings, as required by the 2002 Agreement. Id. at ¶¶ 6, 11. The Cross
Complaint also made no mention of musical composition rights for any artists’ work.
A jury ruled in favor of Blackground and dismissed all claims brought by Hiphoplands. On
February 10, 2009, the court granted an interlocutory judgment in favor of Blackground with respect
to its counterclaim for an accounting of royalties. An accounting trial was held three years later,
after Hiphoplands failed to provide an accounting to Blackground. The state court awarded
Blackground a judgment against Hiphoplands in the amount of $8,676,611. Statement of Decision
at 3, Dkt. No. 55–12. Of particular relevance, the court found that “Hiphoplands[’s] assignee, Craze
Productions/Sam Kleinman, and its subdistributors had received $562,408 in license fees from
Apple, Inc. in connection with the exploitation of Blackground’s music.” The state court further
found that: (1) the 2002 Agreement did not authorize Unique (and therefore Hiphoplands) to
exploit digital downloads of Blackground’s catalogue; (2) the 2002 Agreement expired in 2007, and
therefore any rights Hiphoplands had under the Agreement expired at that time; and (3) Craze
Productions/Sam Kleinman continued to receive royalty payments from iTunes for digital sales of
Blackground’s music through at least 2012, and no portion of this money was paid to Blackground.
Id. at 5. As a result, the court ruled that “Hiphoplands must reimburse Blackground for all monies
it, or its assignees, received from the unauthorized sale of digital downloads of Blackground’s
music.” Id. The state court’s decision is currently on appeal.
On March 23, 2013, Reservoir brought the present suit, alleging a single claim of copyright
infringement pursuant to 17 U.S.C. §§ 501 et seq. See Dkt. No. 1. Defendants filed an answer and
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counterclaims against Reservoir on June 13, 2013, alleging breach of contract and unjust enrichment.
See Dkt No. 6. The Court thereafter dismissed defendants’ unjust enrichment claim at the motion to
dismiss stage. See Dkt. No. 23. Defendants later voluntarily dismissed with prejudice their breach of
contract claim—which they conceded was “essentially identical” to their claims brought in California
state court—in response to plaintiff’s motion for summary judgment (and plaintiff’s threat of filing a
motion for sanctions under Rule 11). See Dkt. No. 77; SUF at ¶ 152.
Plaintiff seeks summary judgment in its favor with respect to its lone claim for copyright
infringement. Plaintiff further requests statutory damages for each of the twenty-eight copyrighted
musical compositions infringed under 17 U.S.C. § 504(c)(1), and a ruling that defendants’
infringement was willful under 17 U.S.C. § 504(c)(2).
II.

LEGAL STANDARD
Plaintiff, the moving party, is entitled to summary judgment on a claim if it can “show[ ] that

there is no genuine dispute as to any material fact and [it is] entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (“[S]ummary judgment is
proper ‘if the pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.’” (quoting former Fed. R. Civ. P. 56(c))).
A genuine dispute exists where “the evidence is such that a reasonable jury could return a verdict for
the nonmoving party,” while a fact is material if it “might affect the outcome of the suit under
governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “Factual disputes that are
irrelevant or unnecessary will not be counted.” Id.
To defeat a motion for summary judgment, defendants “must come forward with ‘specific
facts showing that there is a genuine issue for trial.’” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986) (quoting former Fed. R. Civ. P. 56(e)). “[M]ere speculation or
conjecture as to the true nature of the facts” will not suffice. Hicks v. Baines, 593 F.3d 159, 166 (2d
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Cir. 2010) (internal quotation marks and citations omitted). Defendants “must do more than simply
show that there is some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586.
In determining whether there exists a genuine dispute as to a material fact, the Court is
“required to resolve all ambiguities and draw all permissible factual inferences in favor of the party
against whom summary judgment is sought.” Johnson v. Killian, 680 F.3d 234, 236 (2d Cir. 2012)
(internal quotation marks and citation omitted). The Court’s job is not to “weigh the evidence or
resolve issues of fact.” Lucente v. Int’l Bus. Machines Corp., 310 F.3d 243, 254 (2d Cir. 2002). Rather,
the Court must decide whether a rational juror could find in favor of the defendants. Id.
III.

ANALYSIS
a. Liability
To prevail on a motion for summary judgment for copyright infringement, plaintiff must

establish that there is no disputed issue of material fact regarding the claim. “A claim of copyright
infringement under federal law ‘requires proof that (1) the plaintiff had a valid copyright in the work
allegedly infringed and (2) the defendant infringed the plaintiff’s copyright’ by violating one of the
exclusive rights that 17 U.S.C. § 106 bestows upon the copyright holder. Island Software & Computer
Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 260 (2d Cir. 2005) (quoting Lipton v. Nature Co., 71 F.3d 464,
469 (2d Cir. 1995).
Defendants do not dispute the validity of plaintiff’s ownership of the twenty-eight protected
musical compositions at issue. Nor do defendants dispute that they exercised rights in the musical
compositions belonging to the copyright holder without plaintiff’s authorization; defendants admit
in their responses to plaintiff’s requests for admission that “Defendants sold or distributed
phonorecords” containing each of the twenty-eight musical compositions at issue, “without a license
from Reservoir.” 2 Defs.’ Answers to First Reqs. Admis., Dkt. No. 55–1
Although defendants argue that there is no basis for holding Mr. Kleinman liable for infringement,
irrespective of a finding of liability for Craze and Hiphoplands, defendants’ admissions concede exploitation
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Rather, defendants contend that a dispute of material fact exists because the California state
court’s judgment is on appeal, and their rights to the protected works have not been finally
determined until that appeal is decided. Indeed, defendants’ opposition to plaintiff’s motion and
their supporting affidavits discuss in detail the merits of that case. But the California state court
action involved Hiphoplands’s contractual rights to the sound recordings—not the musical
compositions. “Sound recordings and their underlying musical compositions are separate works
with their own distinct copyrights.” In re Cellco Partnership, 663 F. Supp. 2d 363, 368–69 (S.D.N.Y.
2009) (internal quotation marks and citation omitted). A musical composition “consists of rhythm,
harmony, and melody” and a copyright “protects the generic sound that would necessarily result
from any performance of the piece;” whereas a sound recording is the “aggregation of sounds
captured in the recording.” Poindexter v. EMI Record Grp. Inc., No. 11 CIV. 559 (LTS), 2012 WL
1027639, at *2 n.3 (S.D.N.Y. Mar. 27, 2012) (internal quotation marks and citations omitted).
Indeed, the 2002 Agreement between Blackground and Unique expressly did not grant any rights to
the musical compositions. The dispute over the merits of the California state court’s decision is not
material to the question of defendants’ liability because, even if the decision is overturned on appeal,
the question of whether defendants exercised separate rights to the musical compositions belonging
to plaintiff without authorization remains unaffected.
Defendants discuss at length several other facts that they contend preclude summary
judgment. None of the facts are material, and few are relevant. For example, defendants note that
at least some of the infringing acts took place prior to the assignment granting Reservoir ownership
rights to the musical compositions. Because Reservoir did not have any rights at the time of
infringement, defendants argue, it cannot now bring a claim for the past infringement. But, where
an assignment of an exclusive right under a copyright expressly includes the right to prosecute
of the protected works by all defendants. Defendants’ admissions made pursuant to Rule 36 may serve as the
factual predicate for summary judgment. See Donovan v. Carls Drug Co., 703 F.2d 650, 651 (2d Cir. 1983).

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accrued claims for infringement, that right passes to the assignee. See ABKCO Music, Inc. v. Harrisongs
Music, Ltd., 944 F.2d 971, 980 (2d Cir. 1991) (“[A] copyright owner can assign its copyright but, if
the accrued causes of action are not expressly included in the assignment, the assignee will not be
able to prosecute them.”). The assignment from Blackground granted Reservoir rights to “any and
all causes of action for infringement of the Compositions, past, present, and future.” Assignment of
Copyright, Dkt. No. 52–2. The date that the assignment granted Reservoir ownership rights is
therefore neither material nor in dispute.
Next, defendants argue that the extent of additional rights Reservoir received from
Blackground, such as synchronization rights, are in dispute. Similarly, defendants point to a dispute
over the nature of contacts Reservoir had with Blackground regarding possible coordination efforts
in both the current litigation and the California state court action. None of this is material.
Regardless of whether Reservoir had rights in addition to those at issue, or whether Reservoir and
Blackground coordinated trial strategy, neither calls into question: (1) the validity of Reservoir’s
ownership of the registered copyrights to the musical compositions, or (2) defendants’ infringement
of plaintiff’s exclusive rights to the compositions.
Because defendants fail to raise any material facts in dispute, plaintiff’s motion for summary
judgment is GRANTED with respect to defendants’ liability for copyright infringement.
b. Damages
Plaintiff’s motion for summary judgment also seeks statutory damages for each of the
twenty-eight compositions that defendants infringed, and a finding that defendants’ acts constitute
willful infringement. Generally, a copyright owner “is entitled to recover the actual damages he
suffered and any profits made by the infringer.” Fitzgerald Pub. Co. v. Baylor Pub. Co., 807 F.2d 1110,
1114 (2d Cir. 1986) (citing 17 U.S.C. § 504(b)). But a copyright owner may instead elect to recover
statutory damages under § 504(c), which “are available without proof of plaintiff’s actual damages or
proof of any damages.” All-Star Mktg. Grp., LLC v. Media Brands Co., 775 F. Supp. 2d 613, 626
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(S.D.N.Y. 2011) (internal quotation marks and citation omitted). District courts “have broad
discretion in setting the amount of statutory damages within the minimum and maximum amounts
prescribed by the Copyright Act.” Nat’l Football League v. PrimeTime 24 Joint Venture, 131 F. Supp. 2d
458, 472 (S.D.N.Y. 2001).
Section 504(c)(1) provides that an infringer may be liable “in a sum of not less than $750 or
more than $30,000 as the court considers just” for any work infringed. 17 U.S.C. § 504(c)(1). If a
court finds that the infringement was committed willfully, the court has discretion to increase the
award of statutory damages up to $150,000. 17 U.S.C. § 504(c)(2). Because twenty-eight separate
copyrights were infringed, and because plaintiff alleges the infringement was committed willfully,
plaintiff seeks statutory damages of up to $4,200,000.
The Court declines to award statutory damages at the summary judgement stage. It is well
established that the amount of a statutory damages award under § 504(c) is a determination for the
jury. See Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 355 (1998) (“[T]he Seventh
Amendment provides a right to a jury trial on all issues pertinent to an award of statutory damages
under § 504(c) of the Copyright Act, including the amount itself.”). Thus, the Court may not
determine an award of statutory damages as a matter of law, as invited to by plaintiff. This is
particularly true on this record, where there are outstanding questions regarding the availability and
scope of any statutory damages—questions that the Court discusses below.
The parties failed to identify the following issues in their briefs, but there are factors that
may ultimately limit or preclude an award of statutory damages at trial. First, plaintiff contends that
it is entitled to separate statutory damage awards for each of the twenty-eight protected musical
compositions infringed. But it is not clear from this record that each musical composition is a
separate “work” for purposes of statutory damages. Although each of the musical compositions has
a separate copyright registration, “the number of copyright registrations is not determinative of the
number of statutory damage awards.” ASA Music Prods. v. Thomsun Electronics, No. 96 CIV 1872
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(BDP)(MDF), 1998 WL 988195, at *8 (S.D.N.Y. Sept. 29, 1998) (Fox, M.J.); see also Pavlica v. Behr,
No. 03 CIV. 9628 (DC), 2006 WL 1596763, at *3 (S.D.N.Y. June 12, 2006) (explaining that “related
works have been held to be derivative works or part of a compilation even when they were
separately copyrighted”). That is because “[t]he Copyright Act allows only one award of statutory
damages for any ‘work’ infringed.” Bryant v. Media Right Prods., Inc., 603 F.3d 135, 139 (2d Cir. 2010).
Section 504(c) provides: “For purposes of this subsection, all the parts of a compilation or
derivative work constitute one work.” 17 U.S.C. § 504(c). “An album falls within the [Copyright]
Act’s expansive definition of compilation.” Bryant, 603 F.3d at 140. Thus, “infringement of an
album should result in only one statutory damage award,” and “[t]he fact that each song may have
received a separate copyright is irrelevant to this analysis.” Id. at 141. Rather, to determine whether
statutory damages should be awarded on a per-song basis, courts focus on “whether the plaintiff—
the copyright holder—issued its works separately, or together as a unit.” Id. Thus, in Bryant, the
Second Circuit affirmed a district court’s decision to award a single statutory damages award for
each album, rather than forty separate awards for each copyrighted song, because “the copyright
holders . . . issued their works as ‘compilations’; they chose to issue Albums.” Id.
Here, plaintiff seemingly concedes that all of the songs containing the copyrighted musical
compositions were issued by the original copyright holder in two albums: “The Compositions
owned by Reservoir were all recorded by the late superstar artist Aaliyah on her double-platinum
albums, ‘One in a Million’ and ‘Aaliyah’ . . . for Blackground Records.” Compl. at ¶ 11, Dkt. No. 1.
Ultimately, “the question of whether a work constitutes a ‘compilation’ for purposes of statutory
damages . . . is a mixed question of law and fact.” Bryant, 603 F.3d at 140. While defendants failed
to raise this issue in their opposition, neither did plaintiff present sufficient evidence to allow the
Court to decide this issue on the record presented. The parties will have the opportunity to establish
whether the twenty-eight copyrighted compositions constitute twenty-eight separate “works” for
purposes of statutory damages through in limine motions and at trial.
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Second, it is also not clear that Reservoir may receive statutory damages for defendants’
infringement of the copyrighted musical compositions when Blackground has already received the
equivalent of actual damages for defendants’ infringement of the copyrighted sound recordings for
the same underlying “work” under the Copyright Act.
As noted above, § 504(c) mandates that all parts of a compilation or derivative work be
considered one “work” for purposes of awarding statutory damages. A derivative work is defined
under § 101 to include “a work based upon one or more preexisting works, such as a . . . sound
recording . . . .” 17 U.S.C. § 101; see also 6 William F. Patry, Patry on Copyright § 22:186 (explaining
that “sound recordings are defined in section 101 as a species of derivative work of the underlying
musical composition”). Thus, a sound recording and musical composition may constitute one
“work” under § 504(c); the statute allows only one award of statutory damages for the infringement
of any such “work.” See Capitol Records, Inc. v. MP3Tunes, LLC, 28 F. Supp. 3d 190, 192 (S.D.N.Y.
2014) (declining to award separate statutory damages for infringement of sound recording and
musical composition of same underlying work despite separate copyright owners for each). 3 The
Court acknowledges that there is divided authority on this subject. See Teevee Toons, Inc. v. MP3.com,
Inc., 134 F. Supp. 2d 546, 548 (S.D.N.Y. 2001) (allowing separate statutory damages awards for
infringement of sound recording and musical composition of same underlying work where separate

In reaching its decision, the court in Capitol Records found that defendants (and its users) “were solely
interested in sound recordings and made no separate use of (and had no interest in) the musical
composition.” 28 F. Supp. 3d at 191. In so doing, the court examined and found persuasive the decision of
Spooner v. EEN, Inc., No. 08 Civ. 262, 2010 WL 1930239 (D. Me. May 11, 2010), which stated that “courts
have declared that ‘separate copyrights are not distinct works unless they can live their own copyright life.’”
Spooner, 2010 WL 1930239, at *5 (quoting Walt Disney Co. v. Powell, 897 F.2d 565, 569 (D.C. Cir. 1990)).
However, the Court does not believe this added distinction is necessary—the Second Circuit in Bryant
expressly declined to apply an “independent economic value test” to determine whether separate statutory
awards are appropriate under § 504(c). Bryant, 603 F.3d at 142. Rather, the Second Circuit explained that
§ 504(c) “provides no exception for part of a compilation that has independent economic value, and the
Court will not create such an exception.” Id. Because Bryant’s holding is equally applicable to derivative
works as it is to compilations, the Court does not read the holding in Capitol Records as being limited to cases
where an infringer has no separate interest in the musical composition apart from the sound recording.

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copyrights owners for each). The Court finds Judge Pauley’s reasoning in Capitol Records persuasive,
but the Court need not reach the question at this time for the reasons discussed below.
Blackground was awarded damages in California state court for defendants’ unauthorized
digital iTunes sales of the twenty-eight Aaliyah songs at issue, infringing Blackground’s rights with
respect to the sound recordings. Although Blackground did not allege claims under the Copyright
Act, the contract claims allowed it to receive “damages equivalent to the actual damages [it] could
elect to receive under the Copyright Act.” Sparaco v. Lawler, Matusky, Skelly Engineers LLP, 313 F.
Supp. 2d 247, 253 (S.D.N.Y. 2004). Because Blackground recovered the equivalent of actual
damages and profits under § 504(b), it may be that Blackground is precluded from also receiving
statutory damages for defendants’ infringement of the same “work” under § 504(c). See Sparaco, 313
F. Supp. 2d at 253 (precluding plaintiff who settled contract claims and received equivalent to actual
damages under Copyright Act from recovering statutory damages).
It is an open question whether a copyright holder’s election to recover the equivalent of
actual damages and profits, rather than statutory damages under the Copyright Act, also precludes a
separate copyright holder from later pursuing statutory damages for infringement of the same
“work.” The Court has not found any cases specifically addressing the issue. 4 But there is a factual
dispute that may obviate the need to answer that question: whether Blackground also owned the

The closest case arises in Kamakazi Music Corp. v. Robbins Music Corp., where three separate individuals or
entities owned copyright interests to the musical compositions of Barry Manilow. 534 F. Supp. 69 (S.D.N.Y.
1982). All three brought claims for copyright infringement in district court and sought statutory damages, but
the defendant successfully compelled arbitration against one of the copyright holders. Id. at 73. After the
arbitrator awarded the copyright holder statutory damages, the defendant argued that the Copyright Act
precluded the other two copyright holders from subsequently bringing their claims for statutory damages. Id.
The court disagreed, reasoning that although Congress intended to have all claims by affected copyright
holders presented before one tribunal “to the extent possible,” nothing in the Copyright Act precluded the
other two copyright holders from also recovering statutory damages, so long as “the infringer’s liability on
these statutory damages does not exceed the maximum amount provided in Section 504(c) with the limitation
that the minimum amount remains that specified in Section 504(c).” Id. at 74–75. At this time, the Court
takes no view on the holding of this case, including whether this same reasoning would apply where the first
copyright holder elected to receive actual damages and profits, rather than statutory damages.
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copyrights to the musical compositions when it was awarded the equivalent of actual damages and
profits for defendants’ infringement of the sound recordings for the same “works.”
Reservoir was assigned ownership rights to the musical compositions in June 2012, well after
judgment was entered in Blackground’s favor in the California state action. Reservoir steadfastly
maintains that it was assigned these rights by Black Fountain, “not Blackground Records,” which it
calls “an entirely separate entity.” Pl’s. Br. Summ. J. at 4. However, the assignment expressly lists
Blackground as an “assignor.” Assignment of Copyright, Dkt. No. 52–2. As discussed above, if
Blackground owned copyrights to both the sound recordings and musical compositions, it may be
precluded from later seeking statutory damages under the Copyright Act for the same “work”— and
a belated assignment would not ordinarily grant the assignee greater rights than the assignor enjoyed.
See Rojas v. Cigna Health & Life Ins. Co., 793 F.3d 253, 258–59 (2d Cir. 2015) (noting that under
common law principles “an assignee acquires no greater rights than his assignor”) (internal quotation
marks, citation, and ellipses omitted). Moreover, even if Black Fountain was the relevant assignor,
defendants may attempt to prove at trial that Blackground and Black Fountain are so closely
affiliated as to be considered one company for statutory damages purposes.
Because the amount of statutory damages is an issue to be decided by a jury, plaintiff’s
motion for summary judgment with respect to damages is DENIED.
IV.

CONCLUSION
For the reasons outlined above, plaintiff’s motion for summary judgment is GRANTED in

part and DENIED in part.
The Clerk of Court is directed to terminate the motion pending at Dkt. No. 48.
SO ORDERED.
Dated: September 28, 2015
New York, New York

_____________________________________
GREGORY H. WOODS
United States District Judge
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