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Arista Records LLC; Atlantic Recording Corporation; Arista Music, Fka v. Lime Group LLC; Lime Wire LLC; Mark Gorton; Greg Bildson; and M.J.G.

April 4, 2011

ARISTA RECORDS LLC; ATLANTIC RECORDING CORPORATION; ARISTA MUSIC, FKA BMG MUSIC; CAPITOL RECORDS, INC; ELEKTRA ENTERTAINMENT GROUP INC; INTERSCOPE RECORDS; LAFACE RECORDS LLC; MOTOWN RECORD COMPANY, L.P.; PRIORITY RECORDS LLC; SONY MUSIC ENTERTAINMENT, FKA SONY BMG MUSIC ENTERTAINMENT; UMG RECORDINGS, INC; VIRGIN RECORDS AMERICA, INC.; AND WARNER BROS. RECORDS INC., PLAINTIFFS,
v.
LIME GROUP LLC; LIME WIRE LLC; MARK GORTON; GREG BILDSON; AND M.J.G. LIME WIRE FAMILY LIMITED PARTNERSHIP, DEFENDANTS.



OPINION AND ORDER

I. Introduction

On May 11, 2010, this Court granted summary judgment in favor of Plaintiffs on their claims against Defendants LimeWire LLC ("LW"), Lime Group LLC ("Lime Group"), and Mark Gorton (collectively, "Defendants") for secondary copyright infringement. The Court found that Defendants had induced multiple users of the LimeWire online file-sharing program ("LimeWire") to infringe Plaintiffs' copyrights. In the Court's Opinion and Order (as amended on May 25, 2010), the Court detailed this case's procedural and factual background, familiarity with which is assumed. (See Dkt. Entry No. 223.)

The litigation is now in the damage phase, with a trial on damages scheduled for May 2, 2011. Plaintiffs have identified approximately 11,205 sound recordings that have allegedly been infringed through the LimeWire system. Of those, approximately 9,715 are sound recordings as to which Plaintiffs have elected to seek statutory damages under Section 504(c)(1) of the Copyright Act. *fn1 See 17 U.S.C. § 504(c)(1).

On March 10, 2011, this Court held that Plaintiffs are entitled to a single statutory damage award from Defendants for each "work" that was infringed by a direct infringer on the LimeWire system. (See Dkt. Entry No. 622.) The parties now seek a resolution of a threshold legal dispute regarding what constitutes a "work" as to which Plaintiffs can recover a statutory damage award. The parties have submitted memoranda outlining their positions on this question.

For the following reasons, the Court holds that both an album, and a sound recording that Plaintiffs issued as an individual track*fn2 may constitute a "work" infringed. Accordingly, Plaintiffs are entitled to a statutory damage award for each sound recording that was infringed on the LimeWire system during the time period that Plaintiffs made that sound recording available as an individual track.

II. Applicable Law

A. The Copyright Act

The Copyright Act provides that a copyright owner may elect to seek "an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally." 17 U.S.C. § 504(c)(1). A plaintiff is entitled to only "one award of statutory damages for any 'work' infringed." Bryant v. Media Rights Productions, Inc., 603 F.3d 135,140 (2d Cir. 2010). The Copyright Act states that "all the parts of a compilation . . . constitute one work." 17 U.S.C. § 504(c)(1). The Act defines a "compilation" as "a work formed by the collection and assembling of pre-existing materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship." 17 U.S.C § 101. The term "compilation" also includes "collective works," which are defined as "work[s] . . . in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole." Id.

B. Bryant v. Media Rights Productions, Inc.

In Bryant v. Media Rights Productions, Inc., the Second Circuit interpreted Section 504(c)(1)'s definition of a work in the context of copyrighted sound recordings. 603 F.3d 135 (2d Cir. 2010). There, the plaintiffs had created, produced, and copyrighted two albums. Id. at 138. After discovering that unauthorized digital copies of both of their albums were available online, plaintiffs brought direct and secondary copyright infringement claims against a production company and wholesaler, alleging that the production company permitted the wholesaler to create and sell digital copies of the albums. Id. at 139. Plaintiffs sought statutory damages under the Copyright Act, asking for one statutory damage award for each individual sound recording on each of the two albums. The district court held that defendants were liable for copyright infringement, but that plaintiffs could recover only one statutory damage award for each of the two albums, rather than one award for each individual sound recording contained in those albums. Id. at 140. Plaintiffs appealed to the Second Circuit, arguing that the district court "erred in refusing to grant a separate statutory damage award for each song on the Albums." Id.

Affirming the district court's decision, the Second Circuit explained that, in an analysis of statutory damage awards under the Copyright Act, the focus is "on whether the plaintiff -- the copyright holder -- issued its works separately, or together as a unit." Id. at 141. The Second Circuit held that, because the copyright holder plaintiffs in Bryant chose to issue their sound recordings only as albums, rather than as individual tracks, "the plain language of the Copyright Act limits the copyright holders' statutory damages award to one for each Album." Id. The Second Circuit contrasted the facts in Bryant with the facts in two of its earlier decisions, Twin Peaks Productions, Inc. v. Publication International, Ltd, 996 F.2d 1366, 1381 (2d Cir. 1993) and WB Music Corporation. v. RTV Communications Group, Inc., 445 F.3d 538, 541 (2d Cir. 2006). The Court noted that, in both of those earlier decisions, the plaintiff copyright holders had issued their copyrighted works as separate individual episodes/sound recordings. It was only the defendant infringers who created the compilations at issue from those separate episodes/sound recordings. The compilations were not "authorized by the plaintiff," and thus, were not single "works" for purposes of the Copyright Act. Bryant, 603 F.3d at 141 (quoting WB Music Corp., 445 F.3d at 541). Accordingly, the plaintiffs in those earlier cases were able to recover for the infringements of each of the works infringed (i.e., each episode/sound recording). The Bryant Court emphasized that, unlike the plaintiffs in Twin Peaks and WB Music Corp., the plaintiffs in Bryant issued their work only in album form. Id. (noting that the Plaintiffs "chose to issue Albums").

III. Analysis

Defendants are liable for inducing the infringement of Plaintiffs' copyrighted works.

(See Dkt. Entry No. 223.) The "works" in question are 9,715 of Plaintiffs' post-1972 sound recordings. Plaintiffs are entitled to a separate statutory damage award from Defendants for each "work" infringed by a direct ...


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