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Cortés-Ramos v. Martin-Morales

In infringement action against Ricky Martin by songwriting contest entrant, First Circuit reverses dismissal of claims based on arbitration clause contained in contest agreement, finding that Ricky Martin was not third-party beneficiary of agreement

Sony Music Entertainment, Sony Music Brasil, Sony Pictures Television Inc. and Sony Electronics Inc. co-sponsored a songwriting contest in Puerto Rico in 2014, inviting entrants to submit an original musical composition and an accompanying music video that, if selected, would be part of the upcoming FIFA World Cup album. Plaintiff Luis Adrián Cortés-Ramos entered the contest and made it to the final round but was not chosen. A few months later, Sony artist Ricky Martin released a song and music video titled “Vida,” which plaintiff claimed is similar to his original composition. Plaintiff sued Martin for copyright and trademark infringement, but the district court dismissed the claims, holding that the contest rules required plaintiff to resolve the claims in arbitration. Despite the fact that Martin was not a signatory to the contest agreement, the district court held that Martin was covered by the arbitration provision because even if he was not a “co-sponsor” of the contest (making him a party to the agreement), Martin was an “active part of the SuperSong Contest” and could therefore could “acquire rights” under the arbitration provision as a third-party beneficiary of the agreement.

The First Circuit reversed, holding that a third-party beneficiary of an arbitration agreement “must show with special clarity that the contracting parties intended to confer a benefit on him,” which Martin failed to do. The First Circuit held that it was clear the parties intended for Martin to be excluded from coverage by the arbitration provision. To show “special clarity” that the parties intended for Martin to be a beneficiary of the arbitration provision, Martin relied on the many references to his name in the agreement and the contest rules, and the fact that a release and affidavit signed by plaintiff also included Martin’s name. The First Circuit disagreed, and held that those references actually suggest the opposite because the arbitration provision specifically referred only to the parties and excluded any references to Martin: He was not intended to be part of the agreement to arbitrate “precisely because there are many references to him outside of it.” Lastly, the court also rejected Martin’s argument that the close relationship between Martin and Sony demonstrated Sony’s intent to have the arbitration provision cover Martin.

Summary prepared by Linna Chen and Camron Dowlatshahi