30, 1993. In addition, defendants point out that, as Repp and K&R were members of the American Society of Composers, Artists and Performers ("ASCAP"), a performing rights society, they received royalties pursuant to this arrangement as well. See Publisher Performance Statement, annexed to the Lepera Supp. Aff. as Exh.
Third, defendants have proffered evidence that Repp frequently performed "Till You" between 1988 and 1991. Plaintiffs' complaint and Repp's own deposition contain allegations that "Till You" was performed by Repp himself during this period. See Complaint, annexed to the Affidavit of Jane G. Stevens, sworn to on Feb. 10, 1995 (the "Stevens Aff.") as Exh. "A," at PP 3, 20; Declaration of Ray Repp, dated Sept. 14, 1993, annexed to the Stevens Aff. as Exh. "K" (stating that he performed "Till You" in "almost every concert or appearance I have given since 1978"). In support of Repp's admission, defendants note that Repp recently confirmed his appearance and performance at many of these engagements during the relevant time period. See Repp Dep. at 81-83, 85-88, and 92-96.
Presently before the Court is plaintiffs' motion for summary judgment dismissing defendants' counterclaims as untimely. Additionally, in light of the evidence set forth above, defendants move for expenses, including reasonable attorney's fees, pursuant to Federal Rule of Civil Procedure 56(g), on the ground that plaintiffs' motion for summary judgment dismissing the counterclaims on statute of limitations grounds was made in bad faith.
I. Standard of Law
The 1994 Opinion set forth the applicable standard in deciding a motion for summary judgment and need not be repeated here. In brief, summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). If the court determines that "the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial,'" and summary judgment must be granted. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986) (quoting First Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 289, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1968)).
II. Infringement Within the Limitations Period
The statute of limitations applicable to copyright infringement actions is contained in 17 U.S.C. § 507(b), which states that "no civil action shall be maintained under the provision of this title unless it is commenced within three years after the claim accrued." 17 U.S.C. § 507(b). The period of limitations begins to run from the moment the defendant commits an infringement, and when continuing infringement is asserted, from the last act of infringement. Kregos v. Associated Press, 3 F.3d 656, 662 (2d Cir. 1993), cert. denied, 127 L. Ed. 2d 376, U.S. , 114 S. Ct. 1056 (1994); Woods Hole Oceanographic Inst. v. Goldman, 228 U.S.P.Q. (BNA) 874, 84 Civ. 6307, 1985 WL 5968, at *2 (S.D.N.Y. July 23, 1985).
The distribution of copies of a copyrighted work by sale or other transfer of ownership is an exclusive right belonging to a copyright proprietor, the violation of which constitutes infringement. See 17 U.S.C. § 106(3). Similarly, performance of the work, see 17 U.S.C. § 106(4), and the granting of licenses, 17 U.S.C. § 106 (protecting the right "to do and to authorize" the activities enumerated in that section), are rights protected under section 106.
With respect to sales of products containing the infringing song, plaintiffs argue that any infringement occurring after October 9, 1988 was insignificant. Specifically, plaintiffs claim that K&R's gross receipts from the sale of products containing "Till You" after October, 1988 totalled $ 75.87, see Plaintiffs' Reponse to Defendants' Proffer of Evidence, dated Oct. 20, 1995 ("Plaintiffs' Brief"), at 6; Declaration of Ursula Collins, dated Oct. 19, 1995, annexed to Plaintiffs' Brief as Exh. "B," at 2, and that infringement on this scale triggers the doctrine of de minimis non curat lex, citing Knickerbocker Toy Co. v. Azrak-Hamway Int'l, Inc., 668 F.2d 699 (2d Cir. 1982).
In Knickerbocker, the Court held that a single undistributed sample display card could not constitute an infringing copy as it "was only an office copy which was never used." Id. at 703. Here, however, substantial public sales, rather than mere internal distribution, occurred within the Limitations Period. The law recognizes no exemption for commercially unsuccessful or unprofitable infringements. See Weissmann v. Freeman, 868 F.2d 1313 (2d Cir.) (infringement finding affirmed where defendant distributed nine copies of infringing work), cert. denied, 493 U.S. 883, 107 L. Ed. 2d 172, 110 S. Ct. 219 (1989); National Enquirer, Inc. v. News Group News, Ltd., 670 F. Supp. 962, 970 (S.D. Fla. 1987) (rejecting a Knickerbocker -style de minimis defense where claim involved sales of eighty-five units); Konor Enters., Inc. v. Eagle Publications, Inc., 878 F.2d 138, 140-41 (4th Cir. 1989) (magnitude of sales irrelevant to question of infringement); see also 2 Nimmer § 8.01[G] at 8-26. At any rate, the Court finds the volume of sales in the present case far too substantial to trigger the protections of the de minimis non curat lex doctrine. In addition to the sheer number of infringing products sold, defendants' analysis of K&R invoices reflects that during the Limitations Period, approximately one out of every three orders invoiced by K&R included "Till You" products.
Whatever the ultimate scope of Knickerbocker, it is clear that it was not meant to cover cases like the present one where significant sales occurred and a party received royalties for the public distribution of an allegedly infringing product.
Defendants' evidence that plaintiffs distributed over 400 units of products embodying the infringing work, and that plaintiffs granted licenses to third parties to reproduce "Till You" beyond October 9, 1988 shows that potentially infringing acts occurred within the Limitations Period.
Finally, defendants claim that, pursuant to the relation back doctrine of Federal Rule of Civil Procedure 15(c), the correct period of limitations should be measured from three years prior to the date that plaintiffs interposed their complaint on July 10, 1990, or in the alternative, no later than three years prior to the interposing of defendants' original answers in the action on September 27, 1990. See Defs.' Supp. Mem. of Law, dated Oct. 13, 1995, at 4 n.3. Specifically, defendants maintain that when compulsory counterclaims are raised in an amended pleading, those claims relate back under Rule 15(c) to the date the original pleading was interposed.
Although the relation back issue may arise at a future point regarding the extent of damages allowable, the Court need not address this issue presently, since the Court finds that acts of alleged infringement occurred within the Limitations Period. Thus, the Court does not reach the question of whether relation back to either the complaint or answer is appropriate.
III. Rule 56(g)
With regard to defendants' request for expenses and attorney's fees pursuant to Federal Rule of Civil Procedure 56(g), the Court declines to grant such penalties in this case. Rule 56(g) provides:
Should it appear to the satisfaction of the court at any time that any of the affidavits presented pursuant to this rule are presented in bad faith or solely for the purpose of delay, the court shall forthwith order the party employing them to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused the other party to incur, including reasonable attorney's fees . . . .
Fed. R. Civ. P. 56(g).
Defendants claim that plaintiffs' summary judgment motion was predicated on the ground that "Till You" had not been exploited and was not sold commercially by plaintiffs after 1988. Defendants claim that plaintiffs had knowledge of the post-1988 sales, and thus plaintiffs submitted an affidavit stating the absence of such evidence in bad faith.
Plaintiffs do not deny knowledge of the facts in question, but argue that defendants had failed to adduce during discovery the facts necessary to establish that their counterclaims were timely. So construed, plaintiffs' statements merely pointed to the defendants' inability to prove, at the time of filing, sales occurring within the Limitations Period, and were not an attempt to affirmatively misrepresent plaintiffs' knowledge of sales. The statements in question on this subject, while perhaps not as clear and candid as could be desired, support this view. Although the Court is sympathetic to the plight of parties subjected to motions based on tenuous factual premises, the Court does not find that the affidavits in the present case were made in bad faith or solely for the purpose of delay. See Republic of Cape Verde v. A & A Partners, 89 F.R.D. 14, 20 (S.D.N.Y. 1980). Accordingly, the application for relief pursuant to Rule 56(g) is denied.
For the reasons set forth above, plaintiffs' motion for summary judgment dismissing the counterclaims on statute of limitations grounds is denied, and defendants' application for expenses and attorney's fees pursuant to Federal Rule of Civil Procedure 56(g) is also denied.
SHIRLEY WOHL KRAM
UNITED STATES DISTRICT JUDGE
Dated: New York, New York
February 9, 1996