Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Yesh Music, LLC v. Amazon.Com, Inc.

United States District Court, E.D. New York

April 8, 2017

YESH MUSIC, LLC and JOHN K. EMANUELE, individually and on behalf of all other similarly situated copyright holders, Plaintiffs,
v.
AMAZON.COM, INC. and AMAZON DIGITAL SERVICES INC., Defendants.

          MEMORANDUM DECISION & ORDER

          Brian M. Cogan U.S.D.J.

         Plaintiffs are the owners of publishing rights associated with over one hundred copyright registrations covering over two hundred musical recordings. They bring claims against defendants Amazon.com, Inc. and Amazon Digital Service, Inc. (together “Amazon” or “defendant”), alleging that Amazon infringed their copyrights by distributing phonorecords of plaintiffs' recordings on numerous online music service products without first securing “compulsory licenses, ” as that term is defined under the Copyright Act. Specifically, plaintiffs allege that Amazon failed to timely serve on plaintiffs valid Notices of Intent to Obtain Compulsory Licenses (“NOIs”), as the Copyright Act and applicable regulations require. Alternatively, plaintiffs bring claims against Amazon for failure to pay royalties, alleging that even if Amazon did secure compulsory licenses, it has underpaid royalty payments owed to plaintiffs by manipulating its streaming reports and deleting streaming information.

         At the Initial Status Conference for this case in June 2016, Amazon represented to the Court that it did not need discovery to prove that it is entitled to judgment as a matter of law on certain of plaintiffs' claims. It was thus permitted to move for partial summary judgment, prior to the initiation of any discovery, on the limited issue of whether it had timely served valid NOIs on plaintiffs. After Amazon's motion for partial summary judgment was fully briefed, [1] plaintiffs moved for leave to file a third amended complaint, alleging that they had recently discovered new facts that affected both the issues raised in Amazon's motion and other claims in the complaint. I granted plaintiffs' motion to file a third amended complaint over Amazon's objection, and permitted additional briefing from both sides addressed to the new allegations in the third amended complaint.

         For the reasons given below, Amazon's motion for summary judgment is granted in part and denied in part.

         BACKGROUND

         Plaintiff Yesh Music, LLC (“Yesh”) is a music publishing company that owns the copyrights to all songs created by the band The American Dollar. Plaintiff John Emanuele and non-party Richard Cupolo are the sole members of Yesh, as well as the sole composers of The American Dollar's songs. Plaintiff Emanuele is also the sole composer and owner of the copyrights in songs that he has released under the collective name “Zero Bedroom Apartment.” Defendant Amazon operates Amazon Prime Music, in addition to other online music services, which make songs available for streaming and downloading to certain subscribers. Plaintiffs' copyrighted songs are available on Amazon Prime Music, as well as other Amazon online music services.

         This case deals solely with plaintiffs' copyrights to the musical works embodied in the The American Dollar and Zero Bedroom Apartment songs. As composers, plaintiffs are entitled to two separate copyrights for each song - a copyright in the “musical work” and a copyright in the “sound recording.” See 17 U.S.C. § 102; Bridgeport Music, Inc. v. Still N The Water Publ'g, 327 F.3d 472, 475 n. 3 (6th Cir. 2003) (“Sound recordings and their underlying musical compositions are separate works with their own distinct copyrights.”); T.B. Harms Co. v. Jem Records, Inc., 655 F.Supp. 1575, 1576 n. 1 (D.N.J. 1987) (“When a copyrighted song is recorded on a phonorecord, there are two separate copyrights: one in the musical composition and the other in the sound recording.”); see also 6 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 30.03 (“Copyright ownership of the physical embodiment of the performance of a musical composition . . . is distinct from the ownership of the copyright in the musical composition itself . . . . ”). A copyright in the musical work embodies the right to the musical composition, i.e., “the notes and lyrics of the song as they appear on sheet music.” Recording Indus. Ass'n of Am., Inc. v. Librarian of Cong., 608 F.3d 861, 863 (D.D.C. 2010); see generally Nimmer on Copyright § 30.02. A copyright in the sound recording, also called the “master recording, ” embodies the rights to a recording of a particular performance of the musical work by a specific artist. Recording Indus. Ass'n of Am., Inc., 608 F.3d at 863.

         Although a copyright consists of “a bundle of discrete exclusive rights, ” N.Y. Times Co. v. Tasini, 533 U.S. 483, 495-96 (2001); see also 17 U.S.C. § 106, this case only concerns plaintiffs' right to make and distribute phonorecords of their copyrighted musical works. A phonorecord is simply a material object in which sounds are recorded or “fixed.” 17 U.S.C. § 101. For example, a CD is one type of phonorecord. A license granted by the copyright owner to another party to copy and distribute phonorecords containing a particular musical work is called a “mechanical license.”

         In its memorandum in support of its motion for summary judgment, Amazon provides a helpful example that demonstrates how all of the concepts described above come together: To make and distribute a CD of Jimi Hendrix's recording of “All Along the Watchtower, ” a song written by Bob Dylan, “one would need a license to reproduce the sound recording from Jimi Hendrix's record label, . . . and a mechanical license from Bob Dylan's music-publishing company.”

         Here, plaintiffs allege that Amazon has infringed their copyrights by failing to secure a compulsory mechanical license prior to producing and distributing their musical works on Amazon Prime Music. Amazon needs a mechanical license to offer plaintiffs' songs on Amazon Prime Music because that service provides a feature where a user can download a song for offline playback, which creates a fixed copy, considered to be a phonorecord, of the song on the user's device. See United States v. Am. Soc. of Composers, Authors, and Publishers, 485 F.Supp.2d 438, 444 (S.D.N.Y. 2007) (“[T]he downloading of a music file is . . . characterized as a method of reproducing that file.”) (emphasis omitted); Maverick Recording Co. v. Goldshteyn, No. CV-05-4523, 2006 WL 2166870, at *3 (E.D.N.Y. July 31, 2006) (same); see also A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1014 (9th Cir. 2001) (“Napster users who download files containing copyrighted music violate plaintiffs' reproduction rights.”).

         A compulsory license under § 115 of the Copyright Act allows an individual to make and distribute phonorecords of a copyrighted musical work, without reaching any kind of agreement with the copyright owner, on terms and rates set by the Copyright Act and applicable regulations. See generally 17 U.S.C. § 115; 37 C.F.R. § 385.1. Once a copyright owner distributes the musical work “to the public, ” the compulsory license provision of § 115 is triggered, and anyone may obtain a compulsory license in the musical work by serving an NOI on the copyright owner within the applicable time frame and following other specific requirements set out in the copyright regulations. See 17 U.S.C. § 115(a), (b).

         There are twelve Amazon NOIs that are the subject of this motion, ten of which relate to plaintiff Yesh's copyrights to The American Dollar's songs, and two of which relate to plaintiff Emanuele's copyrights to Zero Bedroom Apartment's songs. Asserting a multitude of violations and defects, plaintiffs claim that all twelve of Amazon's NOIs are invalid, and thus deprive Amazon of compulsory licenses to plaintiffs' copyrights.

         Plaintiffs' allegations can be boiled down to three main arguments. First, the NOIs are invalid because they were either never served, untimely served, or improperly served. Second, even if the Court finds that Amazon timely and validly served all twelve NOIs, certain NOIs are still invalid because they fail to comply with technical requirements regarding the content of an NOI. This alleged non-compliance consists of (1) the NOIs' failure to identify Amazon Prime Music as a service upon which plaintiffs' musical works would be made available; (2) the lack of some NOIs to include the required signature and designated date of distribution; and (3) other NOIs' incorrect inclusion of the parenthetical “(Alt Mix)” in the title of the songs, when the “alt mix” versions of the songs were never released to the public. Finally, plaintiffs contend that Amazon was required to, but did not, serve separate NOIs for the “ambient” versions (as explained below) of plaintiffs' songs.[2]

         Amazon denies that the alleged defects exist or that they render the NOIs invalid, and has moved for summary judgment for a determination that it has served valid NOIs, and therefore has compulsory licenses to make and distribute phonorecords of plaintiffs' musical works. With one exception, plaintiffs' arguments are without merit, and Amazon's motion for partial summary judgment is therefore denied in part and granted in part.[3]

         DISCUSSION

         “[S]ummary judgment may be granted only if ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 135 (2d Cir. 2013) (quoting Fed.R.Civ.P. 56(a)). Upon consideration of a motion for summary judgment, the court must construe the facts in the light most favorable to the nonmoving party and resolve all factual ambiguities in that party's favor. Cioffi v. Averill Park Cent. Sch. Dist. Bd. of Educ., 444 F.3d 158, 162 (2d Cir. 2006). In ruling on a motion for summary judgment, a district court “may rely on any material that would be admissible at a trial.” Lyons v. Lancer Ins. Co., 681 F.3d 50, 57 (2d Cir. 2012) (internal quotation marks omitted).

         To defeat a summary judgment motion properly supported by affidavits or other documentation, “the non-moving party must come forward with admissible evidence sufficient to raise a genuine issue of fact for trial . . . . ” Call Ctr. Techs., Inc. v. Grand Adventures Tour & Travel Publ'g Corp., 635 F.3d 48, 52 (2d Cir. 2011) (internal quotation marks omitted)). A dispute is not “genuine” if no reasonable factfinder “could return a verdict for the nonmoving party.” Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). This means that the nonmoving party must present more than a “scintilla of evidence, ” Del. & Hudson Ry. Co. v. Consol. Rail Corp., 902 F.2d 174, 178 (2d Cir. 1990) (internal quotation marks omitted), or “some metaphysical doubt as to the material facts, ” Aslanidis v. U.S. Lines, Inc., 7 F.3d 1067, 1072 (2d Cir. 1993) (internal quotation marks omitted), and cannot rely on conclusory statements or “mere assertions that affidavits supporting the motion are not credible.” Gottlieb v. Cty. of Orange, 84 F.3d 511, 518 (2d Cir. 1996) (internal citations omitted).

         I. Valid and Timely Service of the NOIs

         A. Actual Service

         As mentioned above, there are ten NOIs that relate to plaintiff Yesh's copyrights in The American Dollar's songs. Even though they attached all ten NOIs to the third amended complaint, plaintiffs claim that Amazon never served eight of them. The only support plaintiffs identify for this claim is a conclusory allegation that Yesh “has no record of ever receiving [these] NOI[s].” Relying upon the mailbox rule and its presumption of receipt, Amazon maintains that it served six paper NOIs on plaintiff Yesh via First Class Mail. To support this claim, Amazon has submitted the affidavit of William B. Colitre, Vice President and General Counsel of Music Reports, Inc., which is Amazon's agent responsible for generating and mailing NOIs on its behalf. In his affidavit, Colitre avers that Music Reports has an established procedure to create and mail NOIs, which it uses and follows in the ordinary course of its business, and he explains the numerous steps involved in that process. Colitre also avers that this procedure was used to send the six paper NOIs that Yesh claims it had never received, and that the six paper NOIs were sent to Yesh at the address listed on its signed W-9 form, which Yesh provided to Music Reports by email.[4] Plaintiffs fail to address the Colitre affidavit or propound any argument in support of their claim that Yesh never received the six paper NOIs.

         Under the mailbox rule, where, as here, there is proof of an office procedure that is followed in the regular course of business, and these procedures establish that the required letters or notices have been properly addressed and mailed, a rebuttable presumption arises that the letter or notice was actually received by the person to whom it was addressed. Leon v. Murphy, 988 F.2d 303, 309 (2d Cir. 1993) (quoting Meckel v. Cont'l Res. Co., 758 F.2d 811, 817 (2d Cir. 1985)); accord Ma v. Merrill Lynch, Pierce, Fenner & Smith, 597 F.3d 84, 92 (2d Cir. 2010); Akey v. Clinton Cty., N.Y., 375 F.3d 231, 235 (2d Cir. 2004). As I have previously explained, “[t]he mere denial of receipt does not rebut that presumption. There must be - in addition to denial of receipt - some proof that the regular office practice was not followed or was carelessly executed so the presumption that notice was mailed becomes unreasonable.” Zirogiannis v. Nat'l Recovery Agency, Inc., No. 14-3954, 2015 WL 8665448, at *6 (E.D.N.Y. Dec. 11, 2015) (quoting Leon, 988 F.2d at 309). Further, under New York law, “personal knowledge of mailing procedures is required only to establish regular office procedure, not the particular mailing.” Id.

         The Colitre affidavit is more than sufficient to create the presumption that Yesh received the six paper NOIs. It establishes that the NOIs were created and mailed in the usual course of Music Report's business, according to established procedure, and were addressed to Yesh at the address it directly provided. Yesh's conclusory allegations that it never received the NOIs do not rebut this presumption, nor create any factual dispute. Amazon has therefore sufficiently established that Yesh received the six paper NOIs.

         B. Valid Method of Service

         Second, as to the remaining four Yesh NOIs, plaintiffs claim that three were invalidly served. Amazon, again relying on the Colitre affidavit, maintains that it electronically served all three NOIs, which are dated between January 2015 and November 2015, by uploading them to Yesh's web account on Music Reports' web portal. Amazon claims that this was proper because on February 12, 2014, Yesh consented to electronic service in this fashion.

         Plaintiffs admit that Yesh consented to electronic service of NOIs in February 2014, but claim that Yesh revoked such consent on August 2014, making the electronic service of the three NOIs in 2015 invalid. To support this claim, plaintiffs submit an August 21, 2014 email that Richard Cupolo sent on behalf of Yesh to Music Reports, which is attached to Cupolo's affidavit. The August 21, 2014 email contains the subject “No More NOI's [sic]” and states: “[T]his is Richard Cupolo from Yesh Music LLC, representing the works of the musical group The American Dollar. We wish for Music Reports, Inc. and any of its affiliated companies to cease the issue [sic] of any and all future compulsory mechanical licensing NOI's [sic] on our behalf effectively immediately.” Besides being legally ineffective, this email, by its terms, in no way operates as a revocation of consent to electronic service. It is an attempt by Yesh to revoke consent to service of all NOIs in any manner. But as Music Reports informed Yesh in an email in response, that was not an option. Section 115 of the Copyright Act provides that a party has a right to obtain a compulsory license to a musical work, whether the copyright holder wishes to license the work or not. Yesh did not have the option of refusing service of Amazon's NOIs, and because its consent to electronic service was never revoked, the electronic service of the NOIs in 2015 was valid.[5] Amazon has therefore sufficiently established that all ten Yesh NOIs were validly served, even though Yesh disputes service only as to eight.

         C. Timely Service

         Third, plaintiffs claim that even if the Court finds that Music Reports properly served the Yesh NOIs, service of all twelve NOIs (ten related to Yesh, two related to Emanuele) was untimely because Amazon had been distributing phonorecords of plaintiffs' musical works for years prior to service.

         To obtain a compulsory license to a musical work, a person must serve an NOI on the copyright owner “before or within thirty days after making, and before distributing any phonorecords of the work . . . . ” 17 U.S.C. § 115(b)(1). “That time-limit is strictly enforced: ‘Failure to serve or file the notice required by [§ 115(b)(1)] forecloses the possibility of a compulsory license and, in the absence of a negotiated license, renders the making and distribution of phonorecords actionable as acts of infringement.'” 24/7 Records, Inc. v. Sony Music Entm't, Inc., 429 F.3d 39, 42-43 (2d Cir. 2005) (quoting 17 U.S.C. § 115(b)(2)). According to plaintiffs, because Amazon distributed phonorecords of plaintiffs' musical works prior to serving the NOIs, the NOIs are invalid and Amazon is liable for copyright infringement.

         In support of their claim that Amazon distributed phonorecords prior to service of the NOIs, plaintiffs have submitted, attached to affidavits by Cupolo and Emanuele, numerous “stream” or “royalty” reports from TuneCore - the company that plaintiffs engaged to distribute their songs to online music services on their behalf.[6] The TuneCore reports are monthly reports, running from July 2012 to December 2014. These reports indicate the number of times that Amazon “streamed” plaintiffs' songs in each month. Plaintiffs claim that these reports, which are dated prior to service of the NOIs, demonstrate that Amazon distributed phonorecords of their musical works prior to serving NOIs.

         Amazon does not contest that the TuneCore reports demonstrate that Amazon streamed plaintiffs' songs prior to serving the NOIs. However, it argues that these streams do not render service of the NOIs untimely because all of the streams identified were either made in connection with a particular Amazon music service that does not require a compulsory license, or were streamed pursuant to a consensual license between Amazon and plaintiffs. To consider this argument, we must understand the various, very different music streaming services that Amazon provides.

         Amazon submits the declaration of Daniel Climan, a Principal Specialist for Digital Music at Amazon, in which Climan describes Amazon's four online music services as follows:

(1) Amazon MP3 Store (also known as Amazon Music Store) is an online store from which users can purchase - and thereafter, download and stream - music. Music is purchased for a one-time fee per track or per album.
(2) Amazon has offered, under various names at various times, a storage area (the “non-premium music locker”) to which users can upload music files, which Amazon stores on their behalf and which the particular user who uploaded a particular copy of a music file can later download or stream that file [as opposed to a different copy of that file] from the user's personal “locker.”
(3) Amazon Cloud Player Premium is a service by which certain users can “scan and match” music files on their computers, adding them to the user's music “locker, ” and ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.