Table of Contents

• Latin American Music Company, et al. v. American Society of Composers Authors and Publishers
• The SCO Group, Inc. v. Novell, Inc.

Latin American Music Company, et al. v. American Society of Composers Authors and Publishers, USCA First Circuit, January 29, 2010
 Click here for a copy of the full decision.

• First Circuit holds that the district court did not err in declining to instruct jurors that a termination of a copyright transfer must be in writing to be valid

In September 1981, composer Simón Díaz granted the copyright in his song “Caballo Viejo” to a predecessor of West Side Music Publishing, Inc. (West Side). West Side is a predecessor of defendant American Society of Composers Authors and Publishers (ASCAP).

In 1982, West Side transferred its “Caballo Viejo” grant to the Asociación de Compositores y Editores de Música Latino Americana (ACEMLA), a predecessor of plaintiff Latin American Music Company (LAMCO). The 1982 contract between West Side and ACEMLA was silent with respect to the date, conditions and manner of termination.

Due to the lack of clarity over termination, in 1996, LAMCO filed a federal action in which it claimed to own the copyright. ASCAP responded that its predecessor, West Side, had terminated the contract. The case proceeded to trial where jurors heard videotaped deposition testimony from West Side’s president, Hector Varona, who testified that he had verbally terminated the 1982 agreement during a conversation with ACEMLA president Raul Bernard.

At the close of evidence, LAMCO argued that the court should instruct the jurors that West Side’s termination was governed by the federal Copyright Act and, thus, had to be in writing. ASCAP took the position that New York law governed termination and that New York’s “reasonable notice of termination” rule governing contracts of unspecified duration applied. The court ultimately adopted ASCAP’s position that New York law, not the Copyright Act, governed and that West Side only needed to provide reasonable notice. The jury found in favor of ASCAP.

The First Circuit, in reviewing the instructional error de novo, affirmed the trial court’s finding that the appropriate law was New York, where the agreement was formed. It further found that the federal Copyright Act sections proffered by plaintiff in support of its claim were irrelevant to the termination at issue.

First, the court considered whether § 204 of the Copyright Act – which requires transfers of copyright ownership to be in writing – applied to the present case. It concluded that while § 204 did require a writing to transfer the ownership of a copyright, there was no concomitant writing requirement for termination of transfers. It noted that such a reading of § 204 would allow a transferee of a copyright to effectively veto any request to re-convey the interest back to the terminating party.

Second, the court considered the applicability of § 203 – which requires authors or heirs of authors wishing to terminate a copyright transfer to give notice in writing. The court found that § 203 did not apply as West Side was neither the author nor a statutory heir of the author.

Finally, the court concluded that plaintiff’s argument that, even if New York law applied, the only “reasonable” notice would be written notice was waived as plaintiff failed to cite any authority and did not develop the argument beyond a mere passing mention.

The SCO Group, Inc. v. Novell, Inc., USDC D. Utah, January 28, 2010
 Click here for a copy of the full decision.

• Court grants in part and denies in part defendant’s motion for summary judgment on plaintiff’s slander of title claim relating to software copyrights

Plaintiff claimed that it is the rightful owner of the UNIX and UnixWare copyrights. Defendant disputed plaintiff’s claims of ownership and publicly claimed that it, not plaintiff, is the true owner of the copyrights in question. Plaintiff filed suit for slander of title, asserting that defendant’s claims of ownership resulted in lost sales of the plaintiff’s SCOSourceInitiative product. Specifically, the plaintiff argued that it was unable to enter into licensing agreements with various companies because those companies refused to enter into licensing agreements as a result of the purported ownership dispute. Plaintiff further argued that it was forced to accept lower prices from those who did enter into agreements.

According to the court, to prove slander of title, a claimant must prove that (1) there was a publication of a slanderous statement disparaging claimant’s title, (2) the statement was false, (3) the statement was made with malice, and (4) the statement caused actual or special damages.

The defendant moved for summary judgment on plaintiff’s slander of title claim, based on plaintiff’s alleged failure to prove special damages and on the ground that the defendant was not the cause of the licensing failure. The court stated that the special damage rule requires the plaintiff to establish pecuniary loss that has been realized or liquidated, as in the case of specific lost sales. The court held that the plaintiff presented sufficient evidence of lost sales to survive summary judgment and that there are genuine issues of material fact as to whether defendant’s actions were the direct and immediate cause of the lost sales. The court denied defendant’s motion for summary judgment on these issues, but granted it on the issue of whether a diminution of stock price constitutes special damages.