Justia Contracts Opinion Summaries

Articles Posted in Copyright
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Starz Entertainment LLC (Starz) entered into two licensing agreements with MGM Domestic Television Distribution LLC (MGM). Starz sued MGM in May 2020, asserting 340 claims of direct copyright infringement, 340 claims of contributory copyright infringement, 340 claims of vicarious copyright infringement, one claim of breach of contract, and one claim of breach of the covenant of good faith and fair dealing. MGM moved for dismissal under Federal Rule of Civil Procedure 12(b)(6), arguing that many of Starz’s copyright infringement claims are barred by the Supreme Court’s decision in Petrella.   The district court concluded that Petrella left unaffected the discovery rule—that under the Copyright Act there exists “a three-year damages bar [under Section 507(b)] except when the plaintiff reasonably was not aware of the infringements at the time they occurred.” The Ninth Circuit affirmed the district court’s denial.   The court wrote that generally, a copyright claim accrues when the infringement occurs. The court held that Petrella did not do away with the discovery rule, under which a claim alternatively accrues when the copyright holder knows or reasonably should know that an infringement occurred. The court held that the discovery rule allows copyright holders to recover damages for all infringing acts that occurred before they knew or reasonably should have known of the infringing incidents, and the three-year limitations period runs from the date the claim accrued. The court held that the district court correctly applied the discovery rule, thus Plaintiff was not barred from seeking damages for all acts of infringement. View "STARZ ENTERTAINMENT, LLC V. MGM DOMESTIC TELEVISION DISTR." on Justia Law

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Kelley wanted to publish “Hooker to Looker,” to promote her cosmetics business. Di Angelo agreed to publish and distribute Kelley’s then-unwritten Book, with Kelly receiving 50 percent of the net royalties. Kelley provided Di Angelo with a three-page manuscript, detailing her background and outlining the Book’s topics. Di Angelo claims it wrote the Book while “communicating and/or collaborating with Kelley.” The Book Di Angelo distributed lists only Kelley as the copyright holder. Di Angelo sold the initial 1,000-copy print run. Kelley asked Di Angelo for an updated version. Di Angelo alleges that it prepared the updated work, then discovered that Kelley was attempting to work directly with Di Angelo’s printer, in violation of the contract.Kelley sued, claiming that Di Angelo overcharged her and alleging that she “is the sole owner of all copyrights.” Di Angelo counterclaimed for breach of contract. That state court action is pending. Di Angelo filed a federal suit, seeking a declaration that it owns the copyrights. Kelley challenged federal jurisdiction, arguing the claim was premised solely on her alleged breach of the contract, a controversy governed by Texas law. Di Angelo claimed resolution of the authorship dispute required interpretation of federal copyright law, including the definitional and ownership provisions in 17 U.S.C. 101 & 201, which the state court lacks jurisdiction to address. The Fifth Circuit reversed the dismissal of the suit. Di Angelo’s claim necessarily implicates federal law definitions of “Initial ownership” and “Works made for hire.” View "Di Angelo Publications, Inc. v. Kelley" on Justia Law

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A jury awarded plaintiffs, the adult children and heirs of songwriter Terry Gilkyson, $350,000 based on its finding that Disney, and its music publishing subsidiary Wonderland, had failed to pay contractually required royalties in connection with certain limited uses of "The Bare Necessities" and several other Gilkyson-composed songs in home entertainment releases of Walt Disney Productions's 1967 animated film The Jungle Book. The trial court then awarded an additional $699,316.40 as damages for the period subsequent to the jury's verdict through the duration of the songs’ copyrights. Both parties appealed.The Court of Appeal agreed with Disney that interpretation of its agreements with Gilkyson is subject to de novo review; Gilkyson's right to receive royalties from exploitation of the mechanical reproduction rights in "The Bare Necessities" and other songs he wrote for The Jungle Book was dependent on Wonderland receiving payment for such exploitation; and the express language of the contracts granted Disney sole discretion to decide how to exploit the material, including whether a fee should be charged for Disney's own use of the material in home entertainment releases. Accordingly, the court reversed and remanded with instructions to enter a judgment in favor of Disney. View "Gilkyson v. Disney Enterprises, Inc." on Justia Law

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Carrier manufactures residential Heating, Ventilation, and Air Conditioning (HVAC) systems. ECIMOS produced the quality-control system that tested completed HVAC units at the end of Carrier’s assembly line. ECIMOS alleged that Carrier infringed on its copyright on its database-script source code—a part of ECIMOS’s software that stores test results. ECIMOS alleges that Carrier improperly used the database and copied certain aspects of the code to aid a third-party’s development of new testing software that Carrier now employs in its Collierville, Tennessee manufacturing facility.ECIMOS won a $7.5 million jury award. The court reduced Carrier’s total damages liability to $6,782,800; enjoined Carrier from using its new database, but stayed the injunction until Carrier could develop a new, non-infringing database subject to the supervision of a special master; and enjoined Carrier from disclosing ECIMOS’s trade secrets while holding that certain elements of ECIMOS’s system were not protectable as trade secrets (such as ECIMOS’s assembled hardware). The Sixth Circuit affirmed in part and reversed in part. There are sufficient reasons to conclude that Carrier did infringe on ECIMOS’s copyright, but Carrier’s liability to ECIMOS based on its copyright infringement and its breach of contract can total no more than $5,566,050. The district court did not err when it crafted its post-trial injunctions. View "ECIMOS, LLC v. Carrier Corp." on Justia Law

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This appeal stemmed from the parties' longstanding dispute over the literary works of John Steinbeck. In this case, a federal jury in Los Angeles unanimously awarded plaintiff, as executrix of Elaine's estate (Elaine was the widow of Steinbeck), compensatory damages for slander of title, breach of contract, and tortious interference with economic advantage, and punitive damages against defendants.Determining that it had jurisdiction, the Ninth Circuit affirmed the orders granting summary judgment and striking defendants' defenses to tortious interference on grounds of collateral estoppel. Furthermore, the panel explained that it follows that the district court's decisions to exclude evidence related to defendants' different understanding of the agreement at issue or the validity of the prior court decisions were not abuses of discretion. The panel affirmed the compensatory damages award, holding that the record contained substantial evidence to support the awards on each cause of action independently. Furthermore, the compensatory damages were not speculative. The panel held that there was more than ample evidence of defendants' malice in the record to support the jury's verdict, thus triggering entitlement to punitive damages. However, the panel vacated and remanded with instructions to dismiss the punitive damages claims against Gail, Steinbeck's daughter-in-law, based on lack of meaningful evidence of Gail's financial condition and her ability to pay. View "Kaffaga v. The Estate of Thomas Steinbeck" on Justia Law

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This appeal grew out of Brent Sloan’s participation in two transactions: (1) a merger between Advanced Recovery Systems, LLC and Kinum, Inc.; and (2) the sale of software from Kinum to Sajax Software, LLC. American Agencies, LLC alleged harm from these transactions and sued Sloan for damages and restitution. After the close of evidence, Sloan filed a motion for judgment as a matter of law. Following the denial of this motion, a jury found Sloan liable on American Agencies’ claims of tortious interference with business relations, conspiracy to interfere with business relations, tortious interference with contract, copyright infringement, unjust enrichment, and misappropriation of trade secrets. Sloan unsuccessfully renewed his motion for judgment as a matter of law. After the district court denied this motion, Sloan appealed. The Tenth Circuit affirmed in part and reversed in part finding Sloan did not preserve his arguments as to tortious interference with business relations, conspiracy to interfere with business relations, and tortious interference with contract. The Tenth Circuit agreed the district court erred in instructing the jury on improper means, and the Court concurred with Sloan that on the claim of unjust enrichment, the jury could not have reasonably inferred the value of a benefit to him. View "Sloan v. American Agencies, LLC" on Justia Law

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The Photographers entered into representation agreements with Corbis, a photography agency, providing Corbis authority to sub-license their works to third parties on a non-exclusive, fixed-duration basis. The agreements include forum selection clauses and give Corbis sole authority to make and settle claims for unauthorized use of images. If Corbis declines to bring such a claim within 60 days, the Photographers may bring actions. Corbis sub-licensed their photographs to McGraw-Hill. The invoices included the name of the photographer responsible for the work and incorporated Corbis’ standard “Terms and Conditions,” which included mandatory, exclusive forum selection clauses. The Photographers each brought a copyright action against McGraw-Hill in the Eastern District of Pennsylvania. McGraw-Hill moved to transfer venue under 28 U.S.C. 1404(a), arguing that the disputes implicate the Corbis–McGraw-Hill agreements, under which the proper venue was the Southern District of New York. One judge denied the motion, reasoning that the claims are based purely on copyright law, so the action is not a “dispute regarding th[e] Agreement[s],” and not subject to the forum selection clauses. Another judge reasoned that the copyright claims depend upon the interpretation of the Corbis–McGraw-Hill agreements so that the photographer was subject to the forum selection clause as an intended third-party beneficiary. In consolidated actions, the Third Circuit concluded that the photographers are not bound because they are not intended beneficiaries of the agreements, nor are they closely related parties. Because the erring district court’s mistakes were not clear or indisputable, the court declined to grant mandamus relief. View "In re: McGraw-Hill Global Education Holdings, LLC" on Justia Law

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The initial six-month agreement between LimeCoral and CareerBuilder specified that all graphic designs created for CareerBuilder would constitute the exclusive property of CareerBuilder and said nothing about renewal fees. After six months, LimeCoral continued to prepare media files incorporating custom graphic designs, typically receiving $3,000 for each new design. As there was no longer a written agreement transferring ownership of the copyright, LimeCoral retained ownership and implicitly granted CareerBuilder a license to use the designs. CareerBuilder argued the license was unconditional and irrevocable; LimeCoral claimed it was subject to CareerBuilder’s alleged agreement to pay an annual renewal fee for every design that CareerBuilder continued to use. LimeCoral sued, alleging breach of copyright and breach of an alleged oral agreement to pay an annual renewal. The district court granted CareerBuilder summary judgment, finding that CareerBuilder had an irrevocable, implied license to use LimeCoral’s designs that was not conditioned upon any agreement to pay LimeCoral renewal fees. The Seventh Circuit affirmed. There was no evidence that would permit the factfinder to conclude that there was an agreement between LimeCoral and CareerBuilder that LimeCoral would be paid a fee for each renewal, and that the implied license LimeCoral granted to CareerBuilder to use the job brandings was subject to that agreement. View "LimeCoral, Ltd. v. CareerBuilder, LLC" on Justia Law

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This case arose out of competition in the market for software used to manage and analyze large and complex datasets. SAS filed suit against WPL, alleging that WPL breached a license agreement for SAS software and violated copyrights on that software. The Fourth Circuit affirmed the district court's judgment finding WPL liable for beach of the license agreement, holding that the contractual terms at issue were unambiguous and that SAS has shown that WPL violated those terms. The court vacated the portion of the district court's ruling on the copyright claim and remanded with instructions to dismiss it as moot. View "SAS Institute, Inc. v. World Programming Ltd." on Justia Law

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In these consolidated appeals, the First Circuit affirmed the district court’s decision to (1) dismiss Plaintiffs’ claims under Massachusetts law for libel and intentional interference with prospective contractual relations, (2) bar portions of Plaintiffs’ Mass. Gen. Laws ch. 93A claim from going forward, and (3) award attorney’s fees and costs to Defendant.These consolidated appeals concerned a lawsuit that involved a number of claims arising under federal copyright law, state tort law, and chapter 93A. Defendant operated a website called RipoffReport.com. Plaintiffs were a Massachusetts attorney, a corporate entity that the attorney created, and Christian DuPont. Plaintiffs’ claims pertained to a dispute arising from two reports that DuPont authored and posted on the Ripoff Report and that were highly critical of the attorney. The First Circuit affirmed the district court’s partial grant of Defendant’s motion to dismiss, the district court’s grant of summary judgment in favor of Defendant, and the district court’s fees award order for the reasons stated above. View "Small Justice LLC v. Xcentric Ventures LLC" on Justia Law