In this copyright infringement suit involving competing claims to the rights to the Federico Fellini motion picture La Dolce Vita, plaintiffs sought a declaratory judgment that they own the rights to exploit La Dolce Vita, and asserted direct, contributory and vicarious copyright infringement claims against defendant, which claimed it had the right to exploit La Dolce Vita pursuant to a diverging chain of title. Maintaining that it was the valid copyright owner, defendant had licensed the film for distribution in the United States and Canada, and had licensed a company to duplicate movie posters and postcards containing still images from the film. While the parties disputed the legitimate chain of title to the copyright, they did not dispute that defendant had entered into these licensing agreements, that the licensees had exploited rights relating to the film, and that defendant had collected over $1 million in related licensing fees.
The district court previously had considered – and declined – plaintiffs’ attempt to assert offensive collateral estoppel against defendant, on the basis of a copyright suit defendant had brought in another district and in which the district court had concluded that defendant could not establish valid chain of title. After sorting through the complicated allegations related to the disputed chains of title, the court rejected defendant’s evidentiary objections and found that plaintiffs had established a valid chain of title that defendant was unable to rebut. The court therefore granted plaintiffs’ motion for summary judgment, finding that defendant does not own, and has never owned, the U.S. copyright in La Dolce Vita; and that plaintiffs do own, and at all relevant times have exclusively owned, the U.S. copyright in the film.
On plaintiffs’ copyright claims, the court found that plaintiffs’ claim for direct copyright infringement failed as a matter of law because defendant had only authorized others to distribute La Dolce Vita, and “mere authorization of a third party’s infringing acts does not constitute direct copyright infringement on the part of the defendant.” The court did grant summary judgment in favor of plaintiffs on their contributory copyright infringement claim, finding it undisputed that defendant’s licensee engaged in direct copyright infringement by distributing La Dolce Vita, that the licensing agreement induced the licensee to engage in the infringement, and that defendant earned royalties from the licensee’s distribution of the film and thereby had knowledge of this infringing activity. Finally, the court declined to grant summary judgment on plaintiffs’ vicarious infringement claim. To be vicariously liable for the infringing acts of another, the court noted, a party must have the legal right and practical ability to control or supervise the infringer. The court rejected plaintiffs’ argument that defendant’s licensing agreements provided this right to control or supervise, noting that short of defendant’s termination for breach, the licensing agreement did not give the defendant the right to completely halt or even substantially limit the licensees’ distribution or reproduction of La Dolce Vita.