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VIDEO-CINEMA FILMS, INC. v. DEUTSCH

United States District Court, S.D. New York


November 1, 2005.

VIDEO-CINEMA FILMS, INC., Plaintiff,
v.
THE LLOYD E. RIGLER-LAWRENCE E. DEUTSCH FOUNDATION Defendant.

The opinion of the court was delivered by: NAOMI BUCHWALD, District Judge

MEMORANDUM AND ORDER

On July 8, 2004, plaintiff, Video-Cinema Films, Inc. ("plaintiff" or "Video-Cinema") filed a complaint asserting copyright infringement and unfair competition claims against defendant, Ledler Foundation, Inc. Defendant filed an answer denying the allegations and asserting a number of affirmative defenses including those of release and fair use. Both parties have moved for summary judgment with respect to the copyright infringement claims and affirmative defenses in this case.*fn1

BACKGROUND*fn2 A. Statement of Facts

  Defendant is a nonprofit private foundation*fn3 that prepares, and distributes via satellite, a program called Classic Arts Showcase ("CAS") to public television stations, cable channels and other registered users. While defendant was originally known as The Ledler Foundation, Inc., the organization changed its name in 1988 to The Lloyd E. Rigler-Lawrence E. Deutsch Foundation ("the Foundation").*fn4

  CAS is essentially a compilation of video clips taken from a broad range of classical arts performances, prepared each week by the President of the Foundation, James Rigler. According to its website, CAS is a:

[F]ree cable television program designed to bring the classic arts experience to the largest audience possible by providing video clips of the arts in hopes that we may tempt you, the viewer, to go out and feast from the buffet of arts available in your community. Think of us as "Classic MTV".*fn5
  The Foundation does not pay licensing fees for the video clips it used in CAS programming.*fn6 Instead, Mr. Rigler takes excerpts from a library of visual materials donated to the Foundation primarily by video distributors, artists and cultural institutions.*fn7 The Foundation does not charge fees of any kind to users, does not include commercial advertisements in CAS programming and does not permit its users to add advertisements to CAS programming.*fn8 Registered users of CAS may download and store material contained in CAS programming at any time via satellite.*fn9

  The plaintiff, Video-Cinema, is primarily in the business of licensing motion pictures, or portions thereof, for exhibition on television and home video.*fn10 Plaintiff holds exclusive television rights*fn11 in a motion picture called Carnegie Hall as a result of a November 1964 agreement ("1964 Agreement") between Video-Cinema and Tele-Pac, Inc. ("Tele-Pac") granting Video-Cinema:

[T]he license to distribute the said pictures set forth on Schedule A, in perpetuity, from the date hereof, for broadcasting by television or any other similar device now known or hereafter to be made known. This shall include, but not limit the said license to pay television, home television, theatrical television, etc., throughout the Territories.*fn12
The schedule attached to the 1964 Agreement lists twenty-six motion picture titles, including Carnegie Hall.*fn13 To the extent that Carnegie Hall's copyright was an issue, it was resolved by plaintiff's production of a two-sided, color copy of the "Certificate Registration of a Claim to Renewal Copyright" in a post-argument submission received by this Court on October 13, 2005. This document lists Tele-Pac, Inc. as the renewal claimant and "proprietor of copyright in a work made for hire" for the work Carnegie Hall and lists the first date of publication as August 8, 1947. The back of the certificate shows that the renewal application and filing fee were both received by the Copyright Office on February 28, 1975.

  Carnegie Hall is approximately 136 minutes in length.*fn14 The plot of the movie follows the musical aspirations of a mother for her son. The mother works as a cleaner at Carnegie Hall for many years, and ultimately her son performs there. More importantly for purposes of this case, the movie includes a series of live performances by well-known classical artists. These live performances were specifically staged for the movie.*fn15 One of these performances features the opera singer, Lily Pons, singing The Bell Song. The total length of the Pons performance in the movie is approximately five minutes and eight seconds.*fn16 Another featured performance shows Leopold Stokowski conducting the New York Philharmonic Orchestra performing Tchaikovsky's Fifth Symphony, Second Movement. The total length of the Stokowski performance is approximately five minutes and thirty seconds.*fn17

  In this case, Video-Cinema alleges two specific acts of copyright infringement. The first claim is based on the Foundation's use of an excerpt from the Stokowski performance originally featured in Carnegie Hall in CAS programming broadcast by CUNY-TV on July 26, 2002. ("Stokowski clip")*fn18 Plaintiff's second claim is based on the fact that CAS programming broadcast by CUNY-TV on June 17, 2004 contained an excerpt of the Lily Pons performance originally featured in Carnegie Hall. ("Pons clip")*fn19 Plaintiff initially provided a range of different estimates for the length of these excerpts*fn20 based entirely on the unrecorded viewings of Video-Cinema's President, Larry Stern.*fn21 Defendant has submitted actual tapes of the relevant broadcasts supplied by CUNY-TV.*fn22

  Our review of the tapes of the July 26, 2002 and June 17, 2004 CUNY-TV broadcasts confirms that: (1) a Stokowski clip was included in the July 26, 2002 CUNY-TV broadcast; (2) this clip was approximately one minute and thirty seconds in length and appears to be an excerpt from the full performance featured in the movie Carnegie Hall; and (3) CAS included a credit before and after the clip specifying that the source of the excerpted performance was a documentary called The Art of Conducting, Great Conductors of the Past. Review of the June 17, 2004 broadcast confirms that: (1) a Pons clip was included in the CAS programming broadcast by CUNY-TV; (2) the Pons performance footage is preceded by an interview with the opera singer, Marilyn Horne; (3) voiceover commentary by Marilyn Horne is also included during the first twenty-five seconds of the performance footage; (4) the performance footage lasts a total of approximately one minute and twenty-five seconds and appears to be an excerpt from the full performance featured in Carnegie Hall; and (5) CAS included a credit before and after the clip identifying the source of the excerpted performance as the documentary Carnegie Hall at 100, A Place of Dreams.

  The parties agree that the Foundation has never sought a license from Video-Cinema for any of the excerpts included in CAS programming. Parties also agree that Carnegie Hall was the original (if indirect) source of the excerpted Stokowski and Pons performances included in CAS programming aired by CUNY-TV on July 26, 2002 and June 17, 2004.*fn23

  Defendant has also conceded for purposes of these motions that it has engaged in broadcasting activities within the scope of the exclusive rights granted to Video-Cinema in the 1964 Agreement.*fn24

  Plaintiff has produced multiple agreements with third parties in which Video-Cinema has licensed broadcasting rights related to performance excerpts from Carnegie Hall.*fn25 Several of these excerpts are less than two minutes in length.*fn26

  B. Prior Litigation Between the Parties

  These parties are not new to the Court. Plaintiff asserted similar copyright infringement claims against the defendant in a prior case that was ultimately settled. Video-Cinema Films, Inc. v. The Ledler Foundation, Inc., 02 Civ. 6279 (NRB). In the first case ("Video-Cinema I"), Video-Cinema claimed that the Foundation infringed its copyright interests in the motion picture Carnegie Hall by including an excerpt from the film featuring the cellist, Gregor Piatigorsky, in CAS programming.

  As part of the settlement, plaintiff released and discharged all claims and demands "in law or equity, as connected to" the lawsuit which Video-Cinema and its successors "ever had, now have or hereafter can, shall or may, have against [the Foundation] . . . for upon or by reason or any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this Release."*fn27 Plaintiff's counsel drafted the release. See Tr. Oct. 7, 2005 Oral Arg. at 41. The parties executed the release on February 11, 2003, and this Court endorsed a stipulation of dismissal with prejudice on February 24, 2003.*fn28

  In two letters exchanged between the parties as they finalized the settlement, plaintiff's counsel twice referred to the release as a "general release."*fn29 In a fax cover sheet, plaintiff's counsel simply refers to it as a "release."*fn30

  DISCUSSION

  I. Legal Standard for Summary Judgment

  Summary judgment is properly granted if the record evidence "show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A dispute regarding a material fact is considered genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986) (internal quotations omitted). Moreover, we must resolve all ambiguities and draw all factual inferences in favor of the party against whom summary judgment is sought. See id at 255.

  The fact that both parties move for summary judgment does not alter the fundamental approach. "Rather, each party's motion must be examined on its own merits, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration." Morales v. Quintel Entm't, 249 F.3d 115, 121 (2d Cir. 2001) (citations omitted).

  II. Scope of February 2003 Release

  In the February 2003 release signed by the President of Video-Cinema, Larry Stern, the plaintiff discharged all claims and demands "in law or equity, as connected to" the lawsuit which Video-Cinema and its successors "ever had, now have or hereafter can, shall or may, have against [the Foundation] . . . for upon or by reason or any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this Release."*fn31 The parties currently dispute the scope of the release and disagree on whether the claim based on the Stokowski clip aired on July 26, 2002 is barred by the terms of the release. We find that the language of the release, which was drafted by plaintiff's counsel,*fn32 is ambiguous. The "as connected to" language supports plaintiff's contention that the scope of the release was limited to the specific claims raised in the complaint in Video Cinema I, namely the Foundation's use of performance clips of Gregor Piatigorsky taken from Carnegie Hall. However, the broad language of the clause that follows supports defendant's contention that this was a general release meant to encompass all claims that plaintiff had against defendant up to the date when the release was signed, i.e. February 11, 2003.*fn33

  Where the language of a release is ambiguous, we must resort to extrinsic evidence to determine the parties' intent.*fn34 During the oral argument held on October 7, 2005, this Court inquired of both parties whether there was extrinsic evidence that might shed light on the scope of the release. In post-argument submissions, both parties sent the court a copy of a letter dated February 13, 2003 from Mr. Sioris to Stacy Krieger, prior counsel for defendant. In this letter, Mr. Sioris writes: "Enclosed please find a general release from my client dated February 11, 2003." In another letter dated February 10, 2003, Mr. Sioris writes: "Once the [settlement] check is negotiated I will forward to you my client's general release. . . ."*fn35 We conclude that these letters confirm that the parties' intent was to establish a general release encompassing all actual and potential claims that Video-Cinema had against the Foundation up to the date when the release was signed, i.e., February 11, 2003.

  Because the Stokowski clip in the current case is alleged to have aired on July 26, 2002, plaintiff's claims related to this clip are barred because they are within the scope of the 2003 release. We therefore grant defendant's motion for summary judgment with respect to that claim.

  III. Analysis of Remaining Copyright Infringement Claim A. Elements of Copyright Infringement

  Put simply, "[c]opyright infringement is established when the owner of a valid copyright demonstrates unauthorized copying." See Tufenkian Import/Export Ventures, Inc. v. Einstein Moomjy, Inc., 338 F.3d 127, 131 (2d Cir. 2003) (quoting Castle Rock Entm't, Inc. v. Carol Publ'g Group, Inc., 150 F.3d 132, 137-38 (2d Cir. 1998)).

  1. Plaintiff's Standing as Exclusive Licensee

  Case law in this Circuit establishes that an exclusive licensee has standing to sue for copyright infringement. See Random House, Inc. v. Rosetta Books LLC, 283 F.3d 490, 491 (2d Cir. 2002). By its terms, the 1964 Agreement clearly conveyed to Video-Cinema an exclusive license to distribute the motion picture Carnegie Hall via "broadcasting by television or any other similar device."*fn36 Thus, plaintiff clearly has standing to assert its copyright infringement claims.

  2. Validity of the Copyright

  Because the Foundation initially challenged the validity of the copyright for Carnegie Hall, we briefly discuss this issue. According to the renewal certificate submitted into evidence, Carnegie Hall was first published on August 8, 1947.*fn37 Registration and renewal of the work's copyright was therefore originally governed by the 1909 Copyright Act ("1909 Act"). Under the 1909 Act, an initial term of 28 years could be extended for an additional 28 years only if the copyright owner renewed the copyright during the final year of the copyright.*fn38 Thus, if Carnegie Hall was renewed with the Copyright Office in a timely manner in 1975, the copyright would have been valid until 2003 under the 1909 Act.

  However, the 1976 Copyright Act and Sonny Bono Copyright Term Extension Act ("CTEA") have changed copyright renewal in significant ways. Most importantly for purposes of this case, the CTEA specified that any copyright that was in its renewal term at the time that the Act became effective (i.e. October 27, 1998) automatically has a copyright term of 95 years from the date the copyright was originally secured.*fn39 This means that if Carnegie Hall's copyright was renewed in 1975 in a timely manner, it is valid until 2042. The copyright renewal certificate submitted post-argument confirms that Tele-Pac, Inc. renewed the copyright for Carnegie Hall on February 28, 1975.*fn40 By operation of law, copyright protection for Carnegie Hall extends until 2042.*fn41

  3. Unauthorized Copying

  As we turn to the issue of whether there has been unauthorized copying, we note that defendant does not dispute certain matters. During the oral argument held on October 7, 2005, defendant conceded for purposes of resolving these motions that its production and/or distribution of CAS programming falls within the scope of the exclusive rights granted to Video-Cinema in the 1964 Agreement.*fn42 Defendant has also conceded that the original source of the Pons clip was the motion picture Carnegie Hall, and that the Foundation never obtained a license from Video-Cinema.

  However, the defendant has also argued that the Pons clip was sufficiently transformed in the documentary or in the CAS compilation so as to preclude Video-Cinema's liability for copyright infringement. See Tr. Oct. 17, 2005 Oral Arg. at 21-22. This argument is potentially relevant both to our analysis of whether unlawful copying has occurred and whether the defense of fair use is available.

  When evaluating whether a prima facie case of unlawful copying has been demonstrated, courts focus on whether there is "substantial similarity" between the allegedly infringing and original copyrighted works. The copying must be quantitatively and qualitatively sufficient to support a conclusion that actionable copying has occurred. See Castle Rock Entm't, Inc. v. Carol Publ'g Group, 150 F.3d 132, 138 (2d Cir. 1998).

  In this case, defendant has emphasized that the Pons clip used in CAS programming was taken directly from a documentary by Peter Rosen ("Rosen") called Carnegie at 100, A Place of Dreams ("CH at 100"). Rosen has testified, and our independent review of the documentary confirms, that he altered and made certain additions to the original Pons performance footage included in Carnegie Hall.*fn43 For example, the Pons performance included in Carnegie Hall lasts approximately five minutes and thirty seconds. Rosen edited the clip down to approximately one minute and twenty-five seconds and added an interview with Marilyn Horne before the performance footage, as well as her voiceover commentary for the first twenty-five seconds of the footage. Nevertheless, there is approximately one minute of unaltered performance footage that is identical in Carnegie Hall and the CAS programming broadcast on June 17, 2004. We find that the amount of footage used exceeds the de minimis threshold*fn44 and that substantial similarity between the Pons performances in Carnegie Hall and CAS programming clearly exists in this case.

  In sum, the record evidence clearly establishes the elements of a copyright infringement claim with respect to the Pons clip. Thus, we proceed to an analysis of whether the defendant's act is protected by the doctrine of fair use.

  B. Fair Use

  The doctrine of fair use "permits and requires courts to avoid rigid application of the copyright statute, when, on occasion, it would stifle the very creativity which the law is designed to foster." Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577 (1994) (citations omitted).

  In determining whether a particular use is a protected fair use, courts are to "apply an `equitable rule of reason' analysis, guided by four statutorily prescribed factors." Harper & Row Publishers, Inc. v. Nation Enter., 471 U.S. 539, 588 (1985). These factors are: (1) "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes"; (2) "the nature of the copyrighted work"; (3) "the amount and substantiality of the portion used in relation to the copyrighted work as a whole"; and (4) "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107.

  Since fair use is an affirmative defense to a claim of infringement, the burden of proof is on the defendant. See Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104, 107 (2d Cir. 1998). Whether defendant's use is "fair" represents a mixed question of law and fact. See id. However, courts have made fair use determinations at the summary judgment stage in cases where there are no genuine issues of material fact. See Castle Rock Entm't, 150 F.3d at 137. As the Second Circuit has observed, "the mere fact that a determination of the fair use question requires an examination of the specific facts . . . does not necessarily mean that . . . there are factual issues to be tried." Wright v. Warner Books, Inc., 953 F.2d 731, 735 (2d Cir. 1991) (citations omitted) (original emphasis).

  1. Purpose and Character of Use The preamble of § 107 presents an illustrative list of purposes commonly recognized as consistent with fair use, including: criticism, comment, news reporting, teaching, scholarship and research. See 17 U.S.C. § 107. While CAS programming probably does not qualify as "scholarship" or "research", it clearly has an educational purpose.*fn45 This purpose tends to weigh in favor of the defendant. However, other considerations also must be weighed in evaluating the first factor, specifically whether the infringing work is commercial or "transformative."

  As discussed earlier, the Foundation is a nonprofit organization. It provides all of the funding used to produce and sustain CAS programming and does not make any profit on activities associated with CAS. No one is charged for access to CAS programming. No commercial advertisements are included in the programming. No reasonable jury could conclude that the character of the use was commercial.

  Although a finding of "transformation" is not absolutely necessary to sustain a finding of fair use, it is often considered as part of an evaluation of the first factor. The analysis focuses on whether the new work "merely supersedes" the original work or if it "adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message". Campbell, 510 U.S. at 579. In this case, the original Pons performance in Carnegie Hall is approximately five minutes and thirty seconds in length. While producing the documentary CH at 100, Rosen licensed the Pons clip from Video-Cinema*fn46 and then transformed the original performance footage in two significant ways. First, he edited the original footage to a shorter clip of approximately one minute and twenty-five seconds. Second, Rosen added an interview with Marilyn Horne to introduce the Pons performance.*fn47

  CAS subsequently copied the clip directly from CH at 100. Although the clip became part of a new compilation of materials once it was inserted into CAS programming, CAS did not itself otherwise transform or add new meaning to the performance in any observable way. Moreover, our review of the tapes submitted into evidence confirms that there is just over one minute of unaltered Pons performance footage in the CAS programming that is identical to the footage in Carnegie Hall and CH at 100.

  While the CAS programming was not truly transformative, the programming clearly has an educational purpose and was not commercial. After weighing these considerations, we conclude that the first factor favors the defendant in this case.

  2. Nature of the Copyrighted Work

  The second factor is primarily intended to distinguish works of fiction and other creative works from factual material. See Campbell, 510 U.S. at 586 (second factor reflects a "recognition that some works are closer to the core of intended copyright protection than others"). Our review of the movie Carnegie Hall confirms that it is best characterized as a creative, fictional work. The plot of the movie is pure fiction, and the live performances included in the film were specifically staged for purposes of Carnegie Hall.*fn48 Although defendant suggests the performances are "factual" because they feature actual artists performing in a concert hall, these performance clips are more accurately viewed as creative because the lighting, cinematography and other presentation features reflect choices made by the directors of the movie. The second factor therefore favors the plaintiff.

  3. Amount and Substantiality of Use

  The third factor requires an evaluation of the amount and substantiality of the original work used as well as whether the amount of material used was reasonable in relation to the purpose of the copying. See Castle Rock Entm't, 150 F.3d at 144. In this case, the CAS programming included approximately one minute and twenty-five seconds of footage of Lily Pons performing. As discussed earlier, this is not de minimis. However, the statute specifies that the use must be examined "in relation to the copyrighted work as a whole." 17 U.S.C. § 107 (3). The performance clip used for CAS programming was extremely small in comparison with the total length of the movie.*fn49 We also agree with the defendant that no reasonable jury would conclude that the Pons performance is the "heart" of the film. Finally, we conclude that the amount of footage used was reasonable when viewed in light of two of the primary purposes of the use, specifically those of educating viewers and encouraging interest in the classical arts. The third factor favors the defendant.

  4. Effect of Use on Potential Market for or Value of the Copyrighted Work

  The fourth factor focuses on the effect that defendant's use will have on the potential market or value of the copyrighted work. Video-Cinema has submitted a number of licenses with third parties for performance clips from Carnegie Hall.*fn50 These licenses demonstrate that there is a commercial market for performance excerpts from Carnegie Hall in addition to a licensing market for broadcasts of the whole movie. The rights conveyed to Video-Cinema in the 1964 Agreement include the exclusive right to exploit both of these markets.

  The Foundation's use of the performance clips from Carnegie Hall is likely to erode the market value for those clips. Registered users pay nothing for access to CAS programming and can store CAS programming they download for extended periods of time. Although the Pons clip cannot serve as a substitute for consumers who want to license Carnegie Hall in its entirety, the clips in CAS programming can replace licensed performance excerpts. This is precisely the type of harm that the fourth factor aims to prevent. See Infinity Broadcasting, 150 F.3d at 111. Moreover, because the clip credits the documentary CH at 100 as the source of the performance footage, rather than Carnegie Hall, there is a possibility that viewers and potential commercial users of the footage will not realize that they need to negotiate a license with Video-Cinema if they plan to re-broadcast the Pons clip. We conclude that the fourth factor weighs in favor of the plaintiff.

  Having reviewed the relevant factors, we find that despite the fact that the Foundation's use was limited and had an educational and non-commercial purpose, the use of the performance footage from Carnegie Hall in CAS programming is likely to adversely impact the value and market for the licensing of these performance clips. On balance, and in the absence of disputed issues of material fact, we conclude that the copying of the Pons clip is not protected by the doctrine of fair use.

  CONCLUSION

  After making all inferences in favor of the plaintiff and having determined that there are no genuine issues of material fact, we have concluded that the 2003 release between the parties bars the plaintiff's copyright claims related to the Stokowski clip contained in CAS programming aired on July 26, 2002. We therefore grant defendant's motion for summary judgment with respect to that claim.

  After making all inferences in favor of the defendant and having determined that there are no genuine issues of material fact, we conclude that the evidence in the record establishes the elements of a copyright infringement claim with respect to the Pons clip and that the affirmative defense of fair use does not apply. Therefore, we grant plaintiff's motion for summary judgment with respect to the copyright infringement claim based on defendant's use of the Pons clip.

  The parties are directed to appear for a conference on November 22, 2005 at 4:15 P.M. if they are unable to resolve the remaining issues in this case before then.

  IT IS SO ORDERED.

20051101

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