United States District Court, Southern District of New York
December 20, 1991
ELIZABETH MARSHALL, PROFESSIONALLY KNOWN AS BETTE MARSHALL, PLAINTIFF,
NEW KIDS ON THE BLOCK PARTNERSHIP, DICK SCOTT ENTERTAINMENT, INC., BIG STEP PRODUCTIONS, INC., THE TOPPS COMPANY, INC., UNIQUE INDUSTRIES, INC., BUTTON-UP, A.S.P. PUBLISHING, INC., PENGUIN BOOKS USA, INC., AND BANTAM BOOKS, DEFENDANTS.
The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
OPINION AND ORDER
This is an action for injunctive relief and damages alleging
copyright infringement. Seven of the defendants jointly move
to dismiss the Complaint for lack of subject matter
jurisdiction pursuant to Fed. R.Civ.P. 12(b)(1). For the
reasons set forth below, the motion is denied.
Plaintiff Elizabeth Marshall is a New York resident working
as a professional photographer under the name Bette Marshall.
Defendant New Kids on the Block Partnership (the "New Kids")
is a Massachusetts partnership doing business as a popular
music recording group. Defendant Dick Scott Enterprises is a
New York corporation which serves as manager of the New Kids.
Defendant Big Step Productions is a New York corporation which
owns the trademark to "New Kids on the Block." Defendants
Topps Company, Inc. and Unique Industries are Pennsylvania
corporations. Defendant Button Up is a Michigan corporation.
Defendant ASP Productions is a California corporation.
Defendant Penguin Books USA, Inc. is a New York corporation.
Defendant Bantam Books is a division of Bantam Doubleday Dell
Publishing Group, a New York corporation.
The Complaint alleges that on or about September 20, 1989
Ms. Marshall conducted a photo session in which she took
photographs of the members of the New Kids (the
"Photographs"). Ms. Marshall claims that she is the sole owner
of the copyright in the Photographs and that she has received
a certificate of registration for the Photographs from the
Register of Copyrights. Complaint ¶¶ 5, 17.
Ms. Marshall's affidavit*fn1 states that before the photo
session, she spoke with
Mr. Win Wilford, then Executive Vice-President of Dick Scott
Enterprises, the New Kids' manager. During that conversation,
Mr. Wilford outlined several specific and limited purposes for
which the Photographs would be used. Affidavit of Elizabeth
Marshall, sworn to on October 29, 1991 ("Marshall Aff.") ¶ 2.
At the photo session, Ms. Marshall presented Mr. Wilford with
an invoice signed by her and dated September 30, 1989 (the
"Invoice"). In a section entitled "DESCRIPTION/TERMS," the
Photo Session, New Kids On The Block One Door
Poster, One 2X3 poster of group, One individual
poster Each Kid. Additional Posters to be
negotiated with Photographer. Photographs for
public relations, Tour Book and Fan Club. After
selection, pictures to be returned to Elizabeth
Marshall for Editorial Distribution. All Photos
used to be credited to BETTE Marshall. Additional
uses (including Albums. etc.) to be negotiated.
The reverse of the Invoice states in part:
REPRODUCTION RIGHTS: Reproduction rights are
conditioned on Photographers receipt of payment
in full and Client's proper use of copyright
notice. All rights not expressly granted herein
remain the exclusive property of Photographer.
Unless otherwise stated on the face of this
Agreement, duration of the License is one year
from Agreement date and limited to use in the
United States of America. Client may not sell,
assign or otherwise transfer the License, or any
rights or obligations under this License without
Photographer's prior written consent.
Marshall Aff., Exh. B. Ms. Marshall states that Mr. Wilford
paid the Invoice and never indicated that it did not
accurately reflect the license granted by her to the New Kids.
Marshall Aff. ¶ 4.
Ms. Marshall alleges that the Defendants have published and
displayed the Photographs in a manner which has infringed her
copyright. Complaint ¶ 21. She states that she has seen the
Photographs on the following New Kids items, none of which were
authorized by the license agreement: trading cards, the top of
display boxes for the trading cards, tablecloths, paper plates,
wallet cards, buttons, books, and posters. Marshall Aff. ¶ 7.
She also provides copies of pages from the book "Our Story: New
Kids On The Block" in which photographs credited to "Elizabeth
Marshall" appear. Marshall Aff., Exh. C.
Mr. Wilford offers a different version of the license
granted to the New Kids. He states that prior to September 20,
1989, he entered into an oral contract with Ms. Marshall (the
"Oral Contract") which gave the New Kids a much broader
license than that memorialized by the Invoice. The Oral
Contract permitted the New Kids to use the Photographs without
limitation for public relations, posters, products for the New
Kids fan clubs, and merchandising through the Winterland
Company.*fn2 Mr. Wilford states that all of the uses of the
Photographs complained of by Ms. Marshall were permissible
uses within the scope of the Oral Contract. Affidavit of Win
Wilford, sworn to on October 11, 1991 ("Wilford Aff.") ¶¶ 4-5.
Ms. Marshall has filed suit for copyright infringement,
(1) an order enjoining Defendants from future
(2) an order requiring Defendants to account for
and to pay over any profits attributable to
(3) an award equal to either actual damages
sustained by her as a result of the
infringement, or statutory damages;
(4) an order requiring impoundment of all copies
of the Photographs and all infringing copies,
plates, molds and other matter in the
Defendants' possession; and
(5) an award of reasonable attorneys' fees.
All of the Defendants except for Topps jointly move to dismiss
the Complaint for lack of subject matter jurisdiction pursuant
to Fed.R.Civ.P. 12(b)(1).
Ms. Marshall alleges jurisdiction based on 28 U.S.C. § 1338(a)
which provides, "The district courts shall have
original jurisdiction of any civil action arising under any Act
of Congress related to . . . copyrights . . ." Defendants argue
that even though the Complaint is couched in terms of copyright
infringement, stripped of its rhetoric, the dispute is nothing
more than a state law contract dispute, not "arising under" the
The line between cases that "arise under" the copyright
laws, as contemplated by § 1338(a), and those that present only
state law contract issues, is a very subtle one and the
question leads down "one of the darkest corridors of the law of
federal courts and federal jurisdiction." Arthur Young & Co. v.
Richmond, 895 F.2d 967, 969 n. 2 (4th Cir. 1990). The Second
Circuit's most decisive statement on the issue of whether a
claim arises under the copyright laws is Judge Friendly's
opinion in T.B. Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir.
1964), cert. denied 381 U.S. 915, 85 S.Ct. 1534, 14 L.Ed.2d 435
(1964), which noted:
Mindful of the hazards of formulation in this
treacherous area, we think that an action "arises
under" the Copyright Act if and only if the
complaint is for a remedy expressly granted by
the Act, e.g. a suit for infringement or for the
statutory royalties for record reproduction, . .
. or asserts a claim requiring construction of
the Act, . . . or, at the very least and perhaps
more doubtfully, presents a case where a
distinctive policy of the Act requires that
federal principles control the disposition of the
Whether a Complaint arises under the copyright laws is to be
determined with reference to the well-pleaded complaint rule.
Vestron, Inc. v. Home Box Office, Inc., 839 F.2d 1380
(9th Cir. 1988); Arthur Young & Co., 895 F.2d at 969. If the
Complaint discloses the elements necessary for a copyright
infringement claim, the plaintiff's reference to a contractual
license granted to the defendant only by way of anticipatory
repudiation or the defendant's interposition of a defense based
on a contract does not turn a copyright claim into one for
breach of contract. Kamakazi Music Corp. v. Robbins Music
Corp., 684 F.2d 228
(2d Cir. 1982); T.B. Harms Co., 339 F.2d at
It is clear that a claim alleging infringement arises under
the copyright laws when the copyright owner and the alleged
infringer are complete strangers who have never had any
dealings with one another. However, when the plaintiff and the
alleged infringer are not complete strangers, but rather are
parties to a copyright license agreement, determining whether
the claim arises under the copyright law or merely under state
contract law can be more difficult. P. Goldstein,
Copyright § 220.127.116.11 (1989).
For example, if the plaintiff-licensor seeks relief directly
under the licensing agreement, for example the payment of
royalties prescribed by the agreement, then the claim is
merely a state law contract claim and there is no federal
jurisdiction. Id. at § 13.2.1. However, if the licensee acts in
such a way as to effectively make himself a "stranger" to the
copyright owner, then the action arises under the copyright
laws just as if the claim were against any other infringer who
is a stranger to the plaintiff. Id. at § 18.104.22.168.
Case law in this Circuit indicates that a copyright licensee
can make himself a "stranger" to the licensor by using the
copyrighted material in a manner that exceeds either the
duration or the scope of the license. For example, in
Kamakazi Music Corp., supra, plaintiff had licensed defendant
to print sheet music of copyrighted songs owned by the
plaintiff. When the defendant continued to exploit the
copyrighted work after the termination of the license
agreement, plaintiff sued for copyright infringement. The court
held that once the contract had expired, the defendant had no
greater right to use the copyrighted works than any other
person, and the plaintiff had stated a claim for infringement
arising under the copyright laws. Id. at 230.
In Frankel v. Stein & Day, Inc., 470 F. Supp. 209 (S.D.N Y
1979), the court found that the defendant's use of plaintiff's
copyrighted work fell directly within the provisions of the
license. Nevertheless, the defendant's breach of another term
of the license agreement had caused the license to terminate
and all rights previously granted to revert immediately to the
plaintiff. Because the defendant was no longer a valid
licensee, his use could be found to constitute copyright
infringement, and plaintiff had stated a claim arising under
the copyright laws. Id. at 212.
In Kanakos v. MX Trading Corp., 216 U.S.P.Q. 1030, 1981 WL
1377 (S.D.N.Y. 1981), the court found copyright jurisdiction on
facts very similar to those in the instant case. The plaintiff
was a New York professional photographer who agreed to
photograph a model for use by the defendant in creating a
poster. The agreement gave the defendants the right to make one
"run" of posters from a selected photograph, but reserved
exclusive copyright in the photographs to the plaintiff. If the
defendant desired to make additional use of the photographs,
including making more "runs" of the poster, it was agreed that
it would compensate the plaintiff. The defendant breached
various terms of the contract by not returning the photograph
used, by failing to credit the plaintiff or to include proper
copyright notice, and by producing posters of inferior quality.
As well, the defendant used the photograph for media
advertising and to make additional "runs" of the poster.
Plaintiff sued for copyright infringement.
The court held that the claim arose under the copyright laws
because even though the complaint alleged specific breaches of
the underlying contract, it also sought relief for
infringement of rights never assigned to the defendant. The
use of the photographs for advertising and for making
additional "runs" exceeded the contemplated scope of the
license. Judge Conner stated:
Where a licensee utilizes a copyrighted work in a
manner or to an extent not authorized by the
license agreement, the licensee's position is no
different from that of an infringer having no
contractual relationship with the holder of the
copyright. In both cases, the resulting cause of
action is one for copyright infringement, and the
claims against both arise under the copyright
Id. at 1032.
Here, the existence of subject matter jurisdiction depends
on a factual determination of whether the Defendant's uses of
the Photographs were within the scope of the license. Because
the parties dispute the terms of the license, the Court must,
for purposes of this motion, determine which version of the
license agreement to accept: that of the Invoice as urged by
Ms. Marshall, or that of the Oral Contract as urged by Mr.
Wilford. The affidavits now before the Court require an
acceptance of Ms. Marshall's version. She provides the Court
with documentary evidence which supports her view of the
limited nature of the license. The only evidence of Mr.
Wilford's broader understanding of the scope of the license is
his unsupported allegation that the parties had entered into
the Oral Contract. To accept his version would permit any
alleged copyright infringer to defeat subject matter
jurisdiction by making an bland allegation that use of
copyrighted material was within the terms of an oral license
Ms. Marshall alleges that the Defendants' use of the
Photographs exceeded the scope of the license. Such use places
the Defendants in the same position as any other infringer of
Ms. Marshall's copyright. Accordingly, she has stated a claim
for copyright infringement, and this Court has subject matter
jurisdiction. Kanakos, 216 U.S.P.Q. at 1032.*fn3
For the reasons stated above, the motion is denied. The
parties are ordered to appear for a pre-trial conference on
Friday, January 3, 1992 at 9:00 a.m. in courtroom 302 to set
a schedule for discovery and trial.
IT IS SO ORDERED.