IP/Entertainment Law Weekly Case Update for Motion Picture Studios and Television Networks -- October 4, 2013

Table of Contents

Dash v. Mayweather, USCA, Fourth Circuit, September 26, 2013
 Click here to download a PDF of the full decision.

  • In copyright infringement action arising from unauthorized use of musical work during televised wrestling events, Fourth Circuit affirms grant of summary judgment on issue of actual damages and defendants’ profits, because plaintiff offered no evidence that his work had any market value or that its use enhanced defendants’ revenues.

Plaintiff Anthony Lawrence Dash brought suit against defendants, alleging that the song “Yep,” played during defendant Floyd Mayweather, Jr.’s entrance at two of defendant World Wrestling Entertainment’s events infringed a copyright that he holds in a musical work named “Tony Gunz Beat.” Following discovery, the district court bifurcated the issues of liability and damages. In addressing damages first, the district court concluded that the opinion of Dash’s expert could not support an award of actual damages, nor had Dash presented evidence entitling him to disgorgement of defendants’ profits, because he could not demonstrate a causal link between the alleged infringement and any of defendants’ revenue streams. Read our summary of the district court’s decision here.

On appeal, the Fourth Circuit affirmed the district court’s determinations as to both actual damages and defendants’ profits. At the outset, the court considered plaintiffs’ entitlement to actual damages under Section 504(b) of the Copyright Act. The court explained that, in order to survive a motion for summary judgment on a claim for actual damages, a plaintiff must offer non-speculative evidence that the infringed work had some market value, and that he suffered actual damage because of the infringer’s failure to pay a licensing fee. The court found that Dash’s expert’s estimation of his lost licensing fee was too speculative to support a finding of actual damages. The court noted that plaintiff’s expert report failed to expressly conclude that the song actually had any market value, and instead opined only as to the song’s “maximal” value. The omission of a clear statement of value suggested that plaintiff’s expert could not conclude that plaintiff would have been paid any licensing fee for defendants’ use of the song. The court further noted that even if plaintiff’s expert had concluded that Dash’s music had value, summary judgment would still be appropriate because the expert relied on evidence of fees paid to other artists who were far more well-known than Dash, without explaining how the disparity in the artists’ popularity affected his analysis. Moreover, the court stated that, although the prior sale or licensing of copyrighted work might demonstrate the existence of actual damages, Dash provided no evidence that he had ever sold or licensed any of his musical works.

The court also concluded that Dash had failed to demonstrate entitlement to disgorgement of defendants’ profits under Section 504(b). In light of Dash’s stipulation that the playing of “Yep” did not increase the revenues from either wrestling event, the district court found that plaintiff could not demonstrate a “causal link” between the alleged infringement and the enhancement of any revenue stream. Many of the revenue streams claimed by Dash involved revenues that customers and businesses had paid to defendants, or agreed to pay to defendants, before “Yep” was played at the wrestling events. The court also stated that the notion that a consumer would purchase a home video of the wrestling events simply to hear “Yep” played again “defies credulity.”
 

JW & JJ Entertainment, LLC v. Sandler, USDC, D. Maryland, September 26, 2013
 Click here to download a PDF of the full decision.

  • In a dispute between conflicting grantees of the life story of famous boxer Roberto Duran, district court grants in part and denies in part defendant's motion to dismiss, holding that First Amendment would not prevent court from enforcing Duran’s earlier grant of rights to defendant, but finding that language of grant was ambiguous as to whether it granted defendant the exclusive right to make a movie of Duran’s life.

This decision involves the parties’ conflicting claims to the “exclusive life story rights” of renowned boxer Roberto Duran. The defendant, Mark Sandler, was a former business manager of Duran who had entered into an agreement (the "Sandler-Duran Agreement") with the boxer in 1995. That agreement included provisions granting to Sandler certain rights concerning the use of the name “Roberto Duran” and the rights to Duran’s likeness and his life story.

Plaintiffs, documentary filmmakers, allege that in 2007, Duran entered into a contract with a third entity, through which Duran purported to grant his “exclusive life story rights.” Plaintiffs allege that they later acquired those rights, have been working on a film about the boxer and have incurred millions of dollars in production costs. Claiming that Sandler threatened to sue unless they pay him, plaintiffs brought a claim in federal court requesting a declaratory judgment, generally, as to Sandler’s rights under the Sandler-Duran Agreement and his right to interfere with the production of plaintiffs’ film. Sandler moved to dismiss, asserting that the agreement endowed him with exclusive rights to Duran’s life story and also raising a res judicata argument concerning earlier litigation between Sandler and Duran.

The district court began its analysis with plaintiffs’ First Amendment claims, rejecting the view that enforcing the Sandler-Duran Agreement to prevent plaintiffs’ film would constitute impermissible government action infringing plaintiffs’ First Amendment rights. Instead, as putative assignees of Duran’s rights, plaintiffs stood “in Duran’s shoes” and would be equally bound by the restrictions Duran voluntarily imposed on himself. The operative question, then, was the scope and validity of the previous Sandler-Duran Agreement.

The court denied Sandler’s invitation to treat the dispute as res judicata. Although the record contained a copy of the judgment in Sandler’s earlier court case against Duran, the record was silent as to whether Duran could have raised the claims and defenses fully in the prior proceeding. Given Maryland’s strict construction of res judicata rules, the court concluded that any determination on the issue of claim preclusion would be premature.

As to Sandler’s claim that he had acquired “publicity rights” under the agreement, Plaintiffs asserted that Maryland does not recognize a “right of publicity.” The court nevertheless concluded that, assuming the agreement were otherwise valid, it would be unenforceable as contrary to public policy.

Although plaintiffs contended that the terms of the Sandler-Duran Agreement did not grant Sandler “exclusive” movie rights, the district court found that the agreement was facially ambiguous and that it would be appropriate for the court to consider extrinsic evidence. Given the early stage of the proceedings and scant evidence, the court concluded that a determination concerning the scope of the agreement should be deferred pending development of the factual record.

The court rejected plaintiffs' argument that Sandler’s agreement with Duran was unconscionable. The court found no indication of “extreme unfairness” in the agreement, noting that Duran was paid at least $60,000 in connection with the agreement and, as a famous boxer, did not lack a meaningful choice in terms of whether to enter the agreement with Sandler. The court also summarily rejected plaintiffs’ contention that the agreement was “void for vagueness.”

Finally, the court dismissed plaintiffs' claims for a preliminary and permanent injunction. Because the court dismissed the majority of plaintiffs’ claims, including their claim under the First Amendment, plaintiffs could not demonstrate a likelihood of success on the merits. Moreover, plaintiffs would not suffer irreparable harm in the absence of injunctive relief. Even though plaintiffs alleged that they spent “hundreds of thousands of dollars” for the rights to make a movie about Duran and incurred “millions of dollars in production costs,” the court noted that plaintiffs had not alleged that they would lose their livelihood in the absence of a preliminary injunction, and that their losses could be compensated by monetary damages. 


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