Ortiz v. Guitian Brothers Music, Inc.

In a copyright infringement suit involving a movie soundtrack, court holds (1) a nonexclusive license can be oral; (2) where the dispute turns on whether there is a license at all, the burden is on the alleged infringer to prove the existence of the license; (3) absent consideration, a nonexclusive license is revocable; and (4) by instituting a copyright infringement action, plaintiff revoked any license that may have existed between the parties

The plaintiff claimed that the defendants asked him to create thirteen musical works that were included in the soundtrack for a movie called “Su Vida y la Calle.” The plaintiff asserted that the defendants promised to reimburse him for his travel and production costs, and also promised him 10% of the shares in defendants’ company and 10% of the publishing royalties. The plaintiff produced the works and the defendants released the movie on DVD and released an audio CD containing the soundtrack in 2003.

The plaintiff filed suit for copyright infringement, unfair competition and unjust enrichment, claiming he was not paid for his services. The defendants moved to dismiss and argued that the plaintiff granted the defendants an oral nonexclusive license to use the works in connection with the motion picture, and that the plaintiff had therefore waived his right to sue for copyright infringement.

The court disagreed and denied the defendants’ motion to dismiss. According to the court, a nonexclusive license may be granted orally, but where the dispute turns on whether there is a license at all, the burden is on the alleged infringer to prove the existence of the license (citing Tasini v. New York Times Co., 206 F.3d 161, 171 (2d Cir. 2000)). The plaintiff claimed no licenses for the works were secured by the defendants, and the court said it was not persuaded that the limited facts alleged in the amended complaint conclusively established such an oral nonexclusive license.

Even if the court were to find that such an oral nonexclusive license existed, such a finding would not preclude the plaintiff from bringing a copyright infringement action because the plaintiff alleged that the defendants did not perform their part of the agreement. The court held that, even if a party licenses certain rights, that does not prohibit the licensor from bringing an infringement action where it believes the license is exceeded or the agreement is breached, and, absent consideration, the licensor can revoke a nonexclusive license. “Assuming an oral license did exist and that plaintiff’s allegations of non-payment are true, such license was revocable, and by instituting this action, plaintiff revoked any license that may have existed between him and defendants.”