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IP/Entertainment Case Law Updates

Waite v. UMG Recordings, Inc.

District court grants defendant record labels’ motion for summary judgment dismissing plaintiff’s copyright infringement claim, where plaintiff sought to be appointed class representative in putative class action by recording artists who allegedly terminated their grants of rights to defendants, because plaintiff adduced no evidence that defendants infringed his copyright.

This matter arises from a purported class action by recording artists whose albums were released by predecessors in interest of defendants UMG Recordings Inc. and Capitol Records LLC pursuant to agreements in which the artists granted copyright in their works to defendants’ predecessors and who allegedly terminated their grant of rights under the Copyright Act. Plaintiff Kasim Sulton sought to be appointed a class representative, and defendants sought summary judgment dismissing Sulton’s copyright infringement claim on the basis that defendants did not infringe Sulton’s copyright. The district court granted defendants’ motion for summary judgment.

Sulton and EMI America Records Inc. entered into a recording agreement in 1980 for Sulton’s exclusive services as a performer on sound recordings, and defendant Capitol Records LLC subsequently succeeded to EMI’s rights and obligations under that agreement, including ownership of the album Kasim. Demon Music Group Ltd. licensed the album Kasim from EMI in 2011 for a three-year term for CDs released in the United Kingdom and Ireland. Sulton transmitted a putative notice of termination to “Universal Music Group” in 2016, purporting to terminate all grants or transfers of copyright in the album Kasim, including the grant “in or about 1981 between [Sulton] and EMI,” effective July 21, 2018. Sulton joined this putative class action in 2019 and sought to be appointed a class representative, alleging that defendants continued to exploit the album Kasim and generated revenue after the purported effective termination date. Defendants countered that they have no record of either exploiting Kasim in the United States on or after July 21, 2018, or generating revenue from exploitation of Kasim in the United States after that date. Termination under Section 203 would only apply to rights exercised within the United States. 

The court assumed for the purposes of the motion that Sulton’s termination notice was effective as of July 21, 2018, making the key question whether there was a genuine dispute of material fact that defendants had violated any of Sulton’s exclusive rights under the Copyright Act after that effective date. Noting that plaintiffs have the burden of proving infringement, the court found that defendants were entitled to dismissal because Sulton failed to adduce any evidence that defendants exploited any of Sulton’s exclusive rights after the effective termination date. 

Noting that, based on the lack of evidence of infringement alone, defendants are entitled to summary judgment, the court addressed and rejected Sulton’s counterarguments. Sulton argued that the mere fact that defendants contended that the termination notice was ineffective constituted infringement, but the court disagreed, reasoning that the Copyright Act foresees that parties may raise arguments about whether a particular grant is terminable and noting that Section 203 does not categorically permit all transferors to terminate. To argue that defendants’ challenge to the efficacy of his termination notice deprived Sulton of his rights under the Copyright Act both stretched the limits of the act and assumed the very issue remaining and central to the case: that Sulton (rather defendants) owned the copyrights. Using the same reasoning, the court rejected Sulton’s arguments that defendants infringed his copyright by preventing him from exercising any or all of his rights under the Copyright Act and by threatening Sulton with litigation if he attempted to exercise those rights. These arguments also assumed that Sulton owned the rights that are under question in the lawsuit. Because all of Sulton’s arguments were wanting, the court granted defendants’ motion for summary judgment, which not only precluded Sulton from being appointed a class representative but fully dismissed Sulton’s infringement claim.

Summary prepared by Linna Chen and Brandon Zamudio

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