District court grants, in part, motion to compel in copyright infringement case, ordering singer-songwriter Ed Sheeran to produce financial information and documents concerning live performances of the hit song “Thinking Out Loud” but refusing to order production related to non-concert merchandising or endorsement revenue.
Structured Asset Sales LLC sued singer-songwriter Ed Sheeran, Sony/ATV Music Publishing and others for copyright infringement in New York federal court, alleging that the musical composition for Sheeran’s hit song “Thinking Out Loud” infringes SAS’ copyright in the Marvin Gaye classic “Let’s Get It On.” SAS demanded documents and information concerning Sheeran’s live performances of “Thinking Out Loud,” including tour schedules, set lists, and financial revenues from ticket sales and merchandise sold at these performances, as well as documents detailing expenses and revenues related to Sheeran’s non-concert merchandising and endorsements.
Sheeran and the other defendants objected to these discovery demands on the grounds that they lacked any causal relationship to the alleged infringement. They also argued that blanket licenses issued by the performing rights organizations ASCAP and BMI prevented Sheeran’s live performances of “Thinking Out Loud” from infringing the copyright in “Let’s Get It On.” In resolving the motion to compel, the district court accepted the first argument but rejected the second.
To support their argument that Sheeran’s live performances of “Thinking Out Loud” could not be infringing as a matter of law, the defendants submitted declarations from vice presidents at ASCAP and BMI, which confirmed that both “Thinking Out Loud” and “Let’s Get It On” were within the repertories of the two performing rights organizations. The declarations also confirmed that each of the concert venues at which Sheeran performed “Thinking Out Loud” live in the United States, or the concert promoters, held valid blanket licenses from ASCAP and BMI.
The court rejected the defendants’ legal argument, ruling that “there is no ‘right’ to infringe” that ASCAP or BMI could grant to others through blanket and venue licenses. As neither the author nor a licensee of an infringing work has the right to perform it publicly, according to the court, the author cannot assign to ASCAP or BMI the ability to include such a right in its blanket license. In particular, the court noted language in the ASCAP and BMI form licenses and consent decrees that limits the grants to only those rights held by the performing rights organizations, regardless of validity or completeness, and recognizes the copyrights are susceptible to challenge.
The court granted SAS’ motion to compel production of the documents and information concerning Sheeran’s live performances of “Thinking Out Loud.” Because the Copyright Act contains a three-year statute of limitations, the court limited the relevant period to three years prior to SAS’ filing of the complaint in this lawsuit in June 2018. The court also rejected the defendants’ argument that the discovery was disproportionate to the needs of the case, reasoning that each live performance of “Thinking Out Loud” could be a separate, unauthorized act infringing SAS’ copyright in “Let’s Get It On.” The court noted that the defendants had “unrivaled access” to the requested information and had likely already categorized it for business purposes, its relevance to the issue of damages and the fact that “the amount in controversy is many millions of dollars.”
Next, the court denied that part of SAS’ motion to compel seeking the production of financial information related to Sheeran’s non-concert merchandising and endorsements. While SAS argued that the commercial success of “Thinking Out Loud” made Sheeran an “international music star,” the court found no alleged facts supporting a causal relationship between the particular song and the specified categories of indirect profits. SAS had identified no non-concert “Thinking Out Loud”-branded merchandise, and no Sheeran endorsements or sync licenses for which profits were clearly attributable to the hit song.
Summary prepared by David Grossman and Jordan Meddy.