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Overseas Media, Inc. v. Skvortsov

July 27, 2006

OVERSEAS MEDIA, INC., WINBURGH HOLDINGS, LTD., AND OOO NOVYI RUSSKII SERIAL, PLAINTIFFS,
v.
SERGEI SKVORTSOV, DEFENDANT.



The opinion of the court was delivered by: Richard J. Holwell, Usdj

MEMORANDUM OPINION AND ORDER

Plaintiffs Overseas Media, Inc. ("Overseas Media"), Winburgh Holdings, Ltd. ("Winburgh"), and OOO Novyi Russkii Serial ("NRS") bring this action alleging violations of federal and New York copyright and trademark law, as well as unfair competition under New York law, and request a preliminary and permanent injunction enjoining defendant Sergei Skvortsov from promoting, marketing, licensing, broadcasting or otherwise attempting to sell or to distribute a Russian television program, Nashtoyashie Menty, within the United States. By opinion dated January 3, 2006, this action was dismissed with respect to defendant Phoenix Film for lack of personal jurisdiction. Overseas Media, Inc. v. Skvortsov et al., 407 F. Supp. 2d 563 (S.D.N.Y. 2006). Defendant Skvortsov, a citizen of both the United States and Russia presently residing in Russia, does not contest personal jurisdiction; however, he moves the Court to dismiss this action pursuant to the doctrine of forum non conveniens. For the following reasons, the motion is granted.

BACKGROUND

Much of the factual background and procedural posture of this case is set forth in the Court's previous opinion, familiarity with which is presumed. In sum, as noted at oral argument held on April 6, 2006, plaintiffs in this action accuse defendant of having a "business plan to distribute" defendant's Nastoyashie Menty (in English, "New Menty"), his version of the hit Russian television show Ulitsy Razbitykh Fonarei: Menty (in English, Streets of Broken Streetlights: The Cops, and popularly known as "Menty") in the United States. (Apr. 6, 2006 Tr. at 16.) As plaintiffs' complaint puts it, "as described above [referencing an alleged offer to sell United States broadcasting rights to Nastoyashie Menty to plaintiff Overseas Media], Skvortsov and [former co-defendant Fenix] are actively seeking to enter into additional licensing agreements for the rights to broadcast Nastoyashie Menty in the United States and elsewhere in the very near future." (Compl. ¶18.)

It is worth noting that the ownership over the rights to the intellectual property in question here is in sharp dispute. In support of its request for injunctive relief, plaintiff Overseas Media has previously asserted exclusive ownership over the satellite and cable broadcast rights to Menty in the United States; plaintiff Winburgh claims it holds the "exclusive right to prosecute infringement actions in respect of home video rights to Menty in the United States . and the exclusive over-the-air broadcast rights to Menty within the United States," while plaintiff NRS asserts ownership over "all rights to Menty within the United States . that are not held by either Overseas Media or Winburgh," including so-called "continuation rights" to the further development of the series. (Sept. 13, 2004 Decl. of Daniel M. Mandil, ¶3, ¶50.)

These assertions, however, were made prior to the discovery of an erroneous translation of one of the Russian contracts, upon which plaintiffs relied to demonstrate their ownership of the rights to Menty. Plaintiffs originally represented to the Court that their rights flowed ultimately from an exclusive transfer of rights from the creator of the Russian short stories on which Menty is based. The author of these stories, Pimenov Andrei Vladimirovich, who uses the pen name Andrei Kivinov, entered into an agreement in April 9, 1999 with an Alesandr Petrovich Kapitsa, who was at the time the "General Director of St. Petersburg AOZT 'IR'," apparently a Russian company. (Sept. 13, 2004 Decl. of Daniel M. Mandil, ¶4(a).) This agreement apparently settled in Kapitsa's favor the issue of whether Kapitsa had possessed the right to transform twenty-three short stories into forty-one episodes of Menty.*fn1 A supplemental agreement, dated June 2, 1999, appears to have given Kapitsa the right to additional works by Kivinov, and authorized the production of several other episodes of Menty. (June 2, 1999 Agreement between Andrei Vladimirovich Pimenov and Alexander Petrovich Kapitsa, translated from the Russian on October 4, 2004.)

Defendant, however, observed that these agreements were actually mistranslated. As clarified in an October 4, 2004 letter to the Court from plaintiffs, the English translation of these contracts described the rights transferred to Kapista as an "exclusive right," while the original Russian described it expressly as a "non-exclusive right." Thus Kivinov retained the right to use his literary works. Since plaintiffs could no longer claim the exclusive right, they reformulated their argument to assert that "[t]he extent to which Kivinov retained rights to the literary works on which the initial episodes of Menty were based is . irrelevant. Nastoyashie Menty is an unauthorized knock-off of the Menty television series, not an authorized derivative of the Kivinov stories." (Pls.' Oct. 4, 2004 letter to the Court at 2). Plaintiffs further argued that they held all rights to the Menty television program, if not to the stories on which it was based, and pointed to case law that those who introduce new expressive elements in a derivative work hold a copyright to "those elements original to" the derivative work. (Id. at 4).

In response to this argument, defendant contends that the April 9, 1999 agreement between Kivinov and Kapitsa was a settlement agreement "resolving their dispute as to Mr. Kapitsa's prior infringing use of Mr. Kivinov's literary works in creating the audiovisual works. (Def's Oct. 7, 2004 letter to the Court at 2.) Indeed, the English translation of the first two paragraphs of this agreement, as appended to plaintiffs' October 4, 2004 letter, appears to reflect such an understanding.*fn2 As such, defendant asserts that the agreement merely settled Kivinov's claim against Kapitsa regarding the extant episodes of Menty as named in paragraph 3 of the agreement, and specifically reserved the continuation rights regarding the episodes. Thus, according to defendant, "Kivinov is free to contract with others, including [former defendant] Phoenix, to produce into video format any of his stories, even the stories that underlie the original Menty series contained in his 1999 agreements with Kapitsa. (Def.'s Reply Mem. at 3.)

Defendant has indeed submitted a declaration from Kivinov himself, who, according to the Complaint, has acted as a consultant to defendant on the Nastoyashie Menty project (Compl. ¶73), and avers that he has not transferred the rights to his literary works to plaintiffs. (July 19, 2004 Declaration of Andrei Vladimirovich Pimenov, translated from the Russian as Exhibit F to the Declaration of Sergei Skvortsov.) Defendant has also submitted a declaration from a Russian attorney, Irina Tulubjeva, who contends that the producers of Nastoyashie Menty are proceeding in accordance with Russian Federation law on copyright and trademark. (July 27, 2004 Declaration of Irina Tulubjeva, translated from the Russian as Exhibit D to the Declaration of Sergei Skvortsov.) The Court, of course, does not resolve the parties' competing claims at this stage but notes them only for their relevance to defendant Skvortsov's forum non conveniens motion, based as it is on the argument that this dispute involves claims to intellectual property that arise under Russian law, and that most of the events in issue allegedly occurred there.

DISCUSSION

The doctrine of forum non conveniens allows a district court to dismiss a case where the preferred venue is a foreign tribunal. Gross v. British Broadcasting Corp., 386 F.3d 224, 229 (2d Cir. 2004) (confiding decision to dismiss an action based on forum non conveniens "to the sound discretion of the district court"); Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249 (1981) (dismissal on forum non conveniens grounds "will ordinarily be appropriate where trial in the plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting his choice"). The defendant moving for dismissal "on forum non conveniens grounds bears the burden of proof." Strategic Value Master Fund, Ltd. v. Cargill Financial Services, Corp., --- F. Supp. 2d ----, 2006 WL 738171, at *7 (S.D.N.Y. 2006) (citing Aguinda v. Texas, 303 F.3d 470, 477 (2d Cir. 2002)). In making the determination, the district court is free to consider submissions by the parties without converting a forum non conveniens motion into a motion for summary judgment. See Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633, 645 (2d Cir. 1956) (citing Koster v. (American) Lumbermens Mut. Cas. Co., 330 U.S. 518, 531-32 (1947) ("[I]n the determination of a motion to dismiss for forum non conveniens, the court may consider affidavits submitted by the moving and opposing parties.")); see also Ayyash v. Bank AlMadina, 2006 WL 587342, at *8 (S.D.N.Y. Mar. 9, 2006) (finding the forum non conveniens inquiry premature in a case where limited jurisdictional discovery was expected, which would "aid the Court in determining the extent to which events and evidence in the United States are implicated in the dispute, and thus the level of deference to be accorded to [plaintiff's] choice of forum").

The analysis upon a motion to dismiss for forum non conveniens will proceed in several stages. Pollux Holding Ltd. v. The Chase Manhattan Bank, 329 F.3d 64, 70 (2d Cir. 2003). "At step one, a court determines the degree of deference properly accorded the plaintiff's choice of forum. At step two, it considers whether the alternative forum proposed by the defendants is adequate to adjudicate the parties' dispute. Finally, at step three, a court balances the private and public interests implicated in the choice of forum."

Norex Petroleum Ltd. v. Access Industries, Inc., 416 F.3d 146, 153 (2d Cir. 2005) (citing Iragorri v. United Technologies ...


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