Broadcast Music v. Rindge Lane Corp. CV-93-460-JD 03/27/95 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Broadcast Music, Inc., et al.
v. Civil No. 93-460-JD
The Rindge Lane Corp., d/b/a The Press Room and Jay Smith
O R D E R
The plaintiffs. Broadcast Music, Inc. ("BMI"); Jerome
Richardson, d/b/a Immendise Music Co.; Frederick S. Bienstock;
Hammerstein Music & Theatre Co., Inc.; Dorothy F. Rodgers and
Murray Cohen, as trustees under Dorothy F. Rodgers 1983 Trust
Agreement, d/b/a Edward B. Marks Music Co.; Corcovado Music
Corp.; Storm King Music, Inc.; Pentagon Music Co.; and Siguomb
Publishing Corp.; bring this copyright infringement action
against the defendants. The Rindge Lane Corp., d/b/a The Press
Room, ("Press Room"), and its president. Jay Smith ("Smith"),
pursuant to 17 U.S.C.A. §§ 101 et seq. (West 1977 & Supp. 1994)
("Copyright Act").1
1The suit alleges infringement of six musical compositions owned by the plaintiffs. The musical compositions and their authors are: (1) "Groove Merchant" by Jerome Richardson (plaintiff Jerome Richardson d/b/a Immendise Music Co.); (2) "Go Bless' The Child" by Billie Holiday and Arthur Herzog, Jr. (plaintiff Dorothy F. Rodgers and Murray Cohen, trustees under Dorothy F. Rodgers 1983 Trust Agreement, d/b/a Edward B. Marks Music Co.); (3) "Triste" by Antonio C. Jobim a/k/a Antonio Carlo Jobim (plaintiff Corcovado Music Corp.); (4) "Deep River Blues" The plaintiffs seek to enjoin the defendants from future
infringement and also request damages, costs, and attorney fees.
The court's jurisdiction is based on 28 U.S.C.A. §§ 1331, 1338
(West 1993). Before the court is the plaintiffs' motion for
summary judgment (document no. 10).
Background
Plaintiff BMI is a nonprofit organization which acquires and
licenses the nonexclusive public performance rights of certain
copyrighted musical compositions ("BMI Music"). Plaintiff's
Memorandum of Law in Support of Summary Judgment ("Memorandum in
Support of Summary Judgment") at 2. The other plaintiffs own the
copyright to the various musical compositions which are the
subject of this lawsuit. Id. Under an agreement with these
copyright owners, BMI licenses the performance rights to
establishments including concert halls, restaurants, nightclubs
and hotels. Id.
The defendant Smith owns and operates the Press Room
restaurant and nightclub located in Portsmouth, New Hampshire.
The Press Room sponsors live performances of music. Defendants'
by A.D. Watson (plaintiff Storm King Music, Inc.); (5) "Both Sides Now" by Joni Mitchell (plaintiff Siguomb Publishing Corp.); and (6) "In Your Eyes" by Peter Gabriel (plaintiff Pentagon Music Co. ) .
2 Memorandum of Law in Opposition to Motion for Summary Judgment
("Memorandum in Opposition to Summary Judgment") at 1.
On June 27, 1979, BMI granted the defendants a nonexclusive
license to play various musical compositions at the Press Room.
Id. at 1-2. The license agreement called for a one-year term
with automatic renewal for subseguent one-year terms unless
either party cancelled upon thirty days' notice prior to the
close of the current term. Id. at Exhibit A, 5 3. Pursuant to
the agreement, the defendants made license fee payments to BMI
until 1984. Id. at 2, Exhibit B. The defendants consistently
paid late, but BMI accepted the license fees nonetheless. The
defendants did not make any payments during 1985 and 1986. Id.
at Exhibit B.
According to a BMI interoffice memo dated January 27, 1987,
BMI and the defendants had reached a new, modified license
agreement. Under the new agreement, the defendants' account
would be current through December 31, 198 6, upon payment of a
$620 license fee. The defendant paid the fee on April 22, 1987.
Id. at 2, Exhibit C. On April 30, 1987, the parties signed a new
agreement providing for payment for the license on a calendar
year basis. Id.
The new agreement set the initial license term for eight
months with automatic renewal for subseguent one-year terms
3 unless either party cancelled with thirty days' notice prior to
the close of a term. Id. at Exhibit A, 5 2 (a). The defendants
made annual license fee payments of $300 from 1988 to 1991. Id.
at 3.
In 1989 BMI revised its license agreements and increased
annual fees. In November 1989, BMI mailed a letter to the
defendants explaining the change in terms and indicating that the
1987 agreement would expire and would need to be replaced by a
new license agreement. Stevens Affidavit, Exhibit A. The letter
and all subseguent correspondance was addressed to "Jay Smith,
President," "Jay Smith" or "The Rindge Lane Corp." at "The Press
Room, 77 Daniel St., Portsmouth, NH 03801." See Declaration of
Lawrence Stevens ("Stevens Affidavit") at 1-2, Exhibits A-L. The
defendants have neither admitted nor denied receiving the
November 1989 notice. However, in January 1990, BMI accepted the
defendants' payment of $300. Memorandum in Opposition to Summary
Judgment at 3.
In February 1990, March 1990, and November 1990, BMI sent
additional notices addressed to the defendants explaining the
need to execute a new license agreement. Stevens Affidavit. In
March 1991, the defendants once again made payment of a license
fee, this time for $360, which BMI accepted. Memorandum in
Opposition to Summary Judgment at 3. The defendants did not
4 submit another payment to BMI until after the commencement of
this lawsuit. Id.
On September 20, 1991, BMI sent a letter to the defendants
by regular mail notifiying them that the prior license agreement
had expired and that they needed to sign the new agreement or
face penalties for copyright infringement. Stevens Affidavit,
Exhibit E. On September 30, 1991, BMI sent another letter
addressed to the defendants, this time by certified mail, stating
that the defendants' account was delinguent and, as a result, the
1987 license agreement would be cancelled on October 31, 1991.
Id. at Exhibit J. The letter was stamped "return to sender" and
sent back to BMI. Memorandum in Opposition to Summary Judgment
at 4; Stevens Affidavit, Exhibit J. BMI finally cancelled the
1987 license agreement on October 31, 1991. Memorandum in
Opposition to Summary Judgment, Exhibit B.
On February 25, 1992, BMI sent the defendants by certified
mail a formal notice to cease and desist performance of BMI
music. Stevens Affidavit, Exhibit K. This letter was also
stamped "return to sender" and sent back to BMI. Memorandum in
Opposition to Summary Judgment at 4; Stevens Affidavit, Exhibit
K. On March 2, 1992, September 14, 1992, and October 16, 1992,
BMI sent the defendants through regular mail three additional
letters regarding the notice of cancellation. Stevens Affidavit,
5 Exhibits F, G, H. Smith maintains that he does not recall
receiving the letters, but does not claim that they were returned
to BMI like the prior notice sent by certified mail. See
Memorandum in Opposition to Summary Judgment at 11. On October
2, 1992, BMI sent by certified mail, addressed to the defendants,
a second formal notice to cease and desist and, as before, the
letter was stamped "return to sender" and sent back to BMI.
Stevens Affidavit, Exhibit L.
On December 30, 1992, BMI notified the defendants by
overnight letter, delivered by private courier, that the Press
Room had unlawfully performed BMI music. Id. at Exhibit I. The
letter indicated that BMI would seek legal redress if the
defendants did not sign the new license agreement within five
days. Id. No new agreement was signed after this notice.
A BMI representative, Mark Cornaro, personally heard the
performance of six BMI compositions played during visits to the
Press Room on March 7, 1993, April 15, 1993, and June 3, 1993.
Declaration of Mark Cornaro ("Cornaro Affidavit").
BMI filed this lawsuit on behalf of itself and the other
plaintiffs on August 23, 1993. The defendants answered the
complaint on October 29, 1993. On November 30, 1993, the
defendants attempted to pay license fees owed for 1991 and 1992.
6 Memorandum in Opposition to Summary Judgment at 3. BMI has
refused to accept these payments. Id.
Discussion
In the motion for summary judgment, the plaintiffs assert
that there is no genuine issue of material fact as to the
defendants' infringement of their copyrights and that they are
entitled to judgment as a matter of law. Memorandum in Support
of Summary Judgment at 4-7. The plaintiffs argue that the
defendants were not authorized to perform BMI music on the dates
of alleged infringement, March 7, 1993, April 15, 1993, and June
3, 1993. Id. at 3.
The defendants object to the motion on the grounds that they
were entitled to perform the music under an implied license which
existed between the parties. Memorandum in Opposition to Summary
Judgment at 1.
Summary judgment is appropriate when the "pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the 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). "The burden is on the moving party to establish the lack
of a genuine, material factual issue, and the court must view the
7 record in the light most favorable to the nonmovant, according
the nonmovant all beneficial inferences discernable from the
evidence." Snow v. Harnischfeger Corp., 12 F.3d 1154, 1157 (1st
Cir. 1993) (citations omitted). Once the moving party has met
its burden, the nonmoving party "must set forth specific facts
showing that there is a genuine issue for trial[,]" Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (citing Fed. R.
Civ. P. 56 (e)), or suffer the "swing of the summary judgment
scythe." Jardines Bacata, Ltd. v. Diaz-Marquez, 878 F.2d 1555,
1561 (1st Cir. 1989). "In this context, 'genuine' means that the
evidence about the fact is such that a reasonable jury could
resolve the point in favor of the nonmoving party, Anderson, 477
U.S. at 248; 'material' means that the fact is one 'that might
affect the outcome of the suit under the governing law.1" United
States v. One Parcel of Real Property, 960 F.2d 200, 204 (1st
Cir. 1992) (guoting Anderson, 477 U.S. at 248) .
The Copyright Act, 17 U.S.C.A. §§ 101 et seq. (West 1977 &
Supp. 1994), protects
original works of authorship fixed in any tangible medium of expression . . . from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.
17 U.S.C.A. § 102(a) (Supp. 1994). Works of authorship include
"musical works, including any accompanying words" and "sound
recordings." Id. at § 102(a)(2), (7). Under the Copyright Act, copyright owners possess the
exclusive rights to authorize a public performance of their
musical compositions and the violation of this right constitutes
infringement. Id. at §§ 106, 501(a). The legal or beneficial
owners of a copyright may protect their interest by bringing a
private action for infringement occurring while they are the
owner of the copyright. Id. at § 501(b) .2 As a remedy,
copyright owners may seek an injunction against future
infringement, statutory damages, costs, and attorney fees. Id.
at §§ 502, 504 (c), 505.
To prevail in a copyright infringement action, the
plaintiffs must establish five elements:
(1) the originality and authorship of the compositions involved; (2) compliance with the formalities of the Copyright Act ; (3) that plaintiffs are the proprietors of the copyrights of the compositions involved; (4) that the compositions were performed publicly for profit; and (5) that the defendants had not received proper authorization for performance of the compositions.
Merrill v. County Stores, Inc., 669 F. Supp. 1164, 1168 (D.N.H.
1987) (citing Sailor Music v. Mai Kai of Concord, Inc., 640 F.
Supp. 629, 632 (D.N.H. 1986)); see Jobete Music Co. v. Massey,
2Generally, a work must be registered with the Copyright Office before an infringement action may be brought. See 17 U.S.C.A § 411; 2 Melville Nimmer & David Nimmer, Nimmer on Copyright § 7.16[B] (1994). 788 F. Supp. 262, 265 (M.D.N.C. 1992) (citing Hulex Music v.
Santv, 698 F. Supp. 1024, 1030 (D.N.H. 1988)); Chi-Bov Music v.
Towne Tavern, Inc., 779 F. Supp. 527, 529 (N.D. Ala. 1991).
I. Originality and Authorship and Compliance with Copyright
Formalities
The plaintiffs may satisfy the elements of originality and
authorship and compliance with copyright formalities by producing
a certificate of copyright registration, which is prima facie
evidence of the ownership and validity of the copyright.
In any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.
17 U.S.C.A. § 410(c) (West 1977); Sandwiches, Inc. v. Wendy's
Int'1, Inc., 654 F. Supp. 1066, 1071 (E.D. Wis. 1987); see Chi-
Bov Music, 779 F. Supp. at 529; Sailor Music, 640 F. Supp. at
632. Once the plaintiffs establish a presumption of validity,
the burden shifts to the defendants to rebut the presumption of
proper copyright registration. Hasbro Bradley, Inc. v. Sparkle
Toys, Inc., 780 F.2d 189, 192 (2d Cir. 1985) (citations omitted);
Knickerbocker Toy Co. v. Winterbrook Corp., 554 F. Supp. 1309,
1318 (D.N.H. 1982); 3 Nimmer at § 12.11[B]. The defendants may
rebut the presumption by showing, for example, that the
10 plaintiffs had not registered their musical compositions within
five years after first publication or that the plaintiffs had not
properly deposited their compositions with the Copyright Office.
3 Nimmer at § 12.11[B]; see 17 U.S.C.A. § 410(c).3
In this case the plaintiffs have submitted photocopies of
the certificates of copyright registration for the musical
compositions at issue. See Declaration of Judith Saffer ("Saffer
Affidavit")a Exhibit A. The defendants have not responded with
evidence, such as untimely registration or improper deposit with
the Copyright Office, to rebut the presumption of copyright
ownership and validity, and compliance with the formalities of
the Copyright Act. The court finds there are no genuine issues
of material fact regarding originality and authorship or
copyright compliance and, therefore, the first two elements of
copyright infringement have been established as a matter of law.
II. Proprietorship of Musical Compositions
In cases where the plaintiffs are also the authors of their
musical compositions the court may accept the copyright
registration statement as prima facie evidence of proprietorship.
3Nimmer states that "[t]he case law has yet to settle upon a consistent formulation of what evidence satisfies the defendant's burden." 3 Nimmer at § 12.11[B][2]. Since the defendant has not come forward with evidence to rebut this element, the court need not address the issue.
11 Broadcast Music, Inc. v. Moor-Law, Inc., 484 F. Supp. 357, 363
(D. Del. 1980); see Chi-Bov Music, 779 F. Supp. at 529; Sailor
Mu sic, 640 F. Supp. at 632-33; 3 Nimmer at § 12.11[C]. However,
where the plaintiffs are assignees of previously registered
copyrights, the court reguires additional evidence beyond the
registration statements to find that the plaintiffs are the
proprietors for purposes of satisfying the third element. Moor-
Law, 484 F. Supp. at 363; 3 Nimmer at § 12.11[C].
The plaintiffs, with the exception of BMI, have submitted
the Saffer Affidavit and copies of their copyright registrations
as evidence that they are the proprietors of their respective
musical compositions.
Each of the musical compositions listed on line 2 of Schedule I of Plaintiffs' Complaint was registered with the Copyright Office on the date listed in line 5. A registration certificate bearing the number listed on line 6 was issued by the Copyright Office to the Plaintiff listed on line 4 or predecessor in interest.
Saffer Affidavit at 2. The defendants have not attempted to
rebut the affidavit. The court finds that, with the exception of
BMI, the plaintiffs are the proprietors of their respective
BMI, as assignee of previously registered copyrights, also
relies on the Saffer Affidavit as evidence that it is a
proprietor of the compositions.
12 On the date listed on line 8 of Schedule I, BMI had been granted, by the other Plaintiffs, the right to publicly perform these compositions and to issue public performance license agreements to music users.
Id.4 Again, the defendants have not challenged the affidavit nor
argued that BMI is not a proprietor of the musical compositions.
Thus, the court finds that there is no genuine dispute of
material fact relative to the guestion of proprietorship and,
therefore, the plaintiffs have established the third element of
copyright infringement as a matter of law.
III. Public Performance
The plaintiffs may establish the fourth element of copyright
infringement, public performance of the musical compositions for
profit, through the submission of sworn affidavits of persons who
witnessed the alleged acts of infringement. Chi-Bov Music, 779
F. Supp. at 530; Sailor Mu sic, 640 F. Supp. at 633. Furthermore,
a "performance at a restaurant to which the public is admitted
and where food and beverages are sold is deemed to be given
'publicly for profit.'" Broadcast Music, Inc. v. Allis, 667 F.
4The court notes that the reference to Schedule I by Saffer in her affidavit does not list a line 8. However, the defendants have not challenged the veracity of the affidavit and, by virtue of past license agreements with BMI, have tacitly acknowledged that BMI is a lawful proprietor of the musical compositions.
13 Supp. 356, 358 (S.D. Miss. 1986) (quotations and citations
omitted) .
The plaintiffs assert they sent a BMI representative, Mark
Cornaro, to the Press Room on March 7, 1993, April 15, 1993, and
June 3, 1993, to determine if the defendants were performing BMI
music. Stevens Affidavit at 2-3. According to his affidavit,
Cornaro is familiar with the BMI repertoire and, based on this
familiarity, recognized the performance of BMI music during his
visits. Cornaro Affidavit at 1.
The performances at issue are considered to have been "for
profit" in that the defendants acknowledge the Press Room serves
food and liquor and, at times, collects a cover charge from
patrons. See Memorandum in Opposition to Summary Judgment,
Exhibit E. The defendants do not dispute that Cornaro attended
the Press Room on the dates of the alleged infringement.
Likewise, the defendants have not submitted evidence that would
call into question the veracity of Cornaro's affidavit. The
court finds that there is no genuine dispute of material fact
relative to the public performance of BMI music for profit and,
therefore, the plaintiffs have satisfied the fourth element of
14 IV. Unauthorized Performance
To satisfy the fifth element of copyright infringement, a
plaintiff must demonstrate that the defendant lacked authority to
perform publicly the musical compositions at issue on the date of
the alleged infringement. Sailor Mu sic, 640 F. Supp. at 632.
Authorization to perform publicly a musical composition may be
granted contractually through a license agreement. See Chi-Bov
Mu sic, 779 F. Supp. at 529 (ASCAP licensed public performance of
copyrighted music); Broadcast Music, Inc. v. Pine Belt Inv.
Developers, Inc., 657 F. Supp. 1016, 1019 (S.D. Miss. 1987) ("BMI
licenses the performance of such copyrighted musical compositions
. . . primarily by means of a blanket license agreement"); Sailor
Mu sic, 640 F. Supp. at 631-32 (defendant sought license agreement
to perform live music at restaurant).
In support of their motion, the plaintiffs allege that the
public performance at the Press Room was not authorized because
they had cancelled the license agreement and had placed the
defendants on written notice of the cancellation pursuant to the
procedure outlined in the 1987 agreement. Memorandum in Support
of Summary Judgment at 6. They argue that the BMI letters are
presumed to have been received by the defendants. Plaintiffs'
Memorandum of Law in Reply to Opposition to Summary Judgment
("Plaintiffs' Reply Memorandum") at 5. The plaintiffs further
15 argue that there was never an implied license under which the
defendant was entitled to perform BMI music. Memorandum in
Support of Summary Judgment at 6.
The defendants respond that summary judgment is
inappropriate because there is a genuine dispute as to whether
they were authorized to perform the compositions. Memorandum in
Opposition to Summary Judgment at 7-11. They argue that they
were never placed on actual notice of the cancellation of the
agreement and that the mere dispatch of the renewal and
cancellation letters by BMI does not give rise to a presumption
of receipt of those letters. Id. at 11-12. Instead, the
defendants claim that they were entitled to perform the BMI-
licensed music under a valid, implied contract. Id. at 1.
A. Presumption of Receipt of Letters
The plaintiffs argue that the defendants are presumed to
have received any letters BMI sent through regular mail to the
Press Room's business address. Memorandum in Support of Summary
Judgment at 6; Plaintiffs' Reply Memorandum at 5. By contrast,
defendant Smith denies personally receiving any mailed notices
sent by BMI relative to the cancellation of the 1987 license
agreement. Memorandum in Opposition to Summary Judgement at 11.
16 Neither party has cited authority in support of their respective
positions.
The court applies federal evidentiary principles where
federal law, such as the Copyright Act, provides the rule of
decision. See Fed. R. Evid. 302. " [M]ailing gives rise to [a]
presumption that [a] document mailed 'reached its destination at
the regular time and was received by the [addressee]. U.S.
Fire Ins. Co. v. Productions Padosa, Inc., 835 F.2d. 950, 952 n.2
(1st Cir. 1987) (citing Rosenthal v. Walker, 111 U.S. 185
(1884)). "Proof that a letter properly directed was placed in a
U.S. post office mail receptacle creates a presumption that it
reached its destination in the usual time and was actually
received by the person to whom it was addressed." Beck v.
Somerset Technologies, Inc., 882 F.2d 993, 996 (5th Cir. 1989)
(citing Hagner v. United States, 285 U.S. 427 (1932)); see Jones
v. Citibank, Fed. Sav. Bank, 844 F. Supp. 437 (N.D. 111. 1994).
However, the presumption is rebuttable and once the plaintiffs
have offered evidence of mailing the documents in guestion the
burden shifts to the defendants to produce evidence of non
delivery. See Beck, 882 F.2d at 996 (testimony that employee did
not "recall" or "remember" receiving letter is insufficient to
rebut presumption of receipt).
17 Although the evidentiary presumption of receipt is governed
by federal law, the court relies on the common law of agency and
principal to determine who is legally held to have received
notice on behalf of an employer. Avmes v. Bonelli, 980 F.2d 857,
860-61 (2d Cir. 1992) (citing Community for Creative Non-Violence
v. Reid, 490 U.S. 730, 751 (1989)). In New Hampshire, mail
received by an employee has the same legal effect as that
received directly by the employer under the common law rule that
"notice of facts to an agent is constructive notice thereof to
the principal himself, where it arises from or is at the time
connected with, the subject-matter of his agency." Citizens
N a t '1 Bank v. Hermsdorf, 96 N.H. 389, 395, 77 A.2d 862, 867
(1951) (guotations omitted). Likewise, "[s]ince a corporation
can act only through its officers, agents and employees, it is
necessarily chargeable with the knowledge of its officers and
agents acting within the scope of their authority." Sutton Mut.
Ins. Co. v. Notre Dame Arena, 108 N.H. 437, 441, 237 A.2d 676,
679 (1968), (citing Sawyer v. Mid-Continent Petroleum Corp., 236
F .2d 518, 520 (10th Cir. 1956)).
The plaintiffs allege they properly notified (i.e., in
writing) the defendants in accordance with the cancellation
procedure outlined in the 1987 agreement. Affidavits filed in
support of their motion indicate that BMI sent eight letters by
18 regular mail regarding either renewal or cancellation of the
licensing agreement. Stevens Affidavit at 2. Furthermore, BMI
also dispatched cancellation notices by certified mail. Id. at
1-2. Each mailing was properly addressed to "Jay Smith,
President," "Jay Smith" or "The Rindge Lane Corp." at "The Press
Room, 77 Daniel St., Portsmouth, NH 03801." See id. at 1,
Exhibits A-J; Memorandum in Opposition to Summary Judgment at 1,
Exhibit E. This evidence satisfies the presumption of receipt,
at least with respect to notices sent by regular mail.5
The defendants attempt to rebut the presumption by arguing
that the certified letters could not have been received because
they were marked "return to sender" and sent back to BMI.
Memorandum in Opposition to Summary Judgment at 4; Saffer
Affidavit, Exhibit B. The defendants have also submitted an
affidavit in which Smith testified that he did not "recall"
receiving any notice of cancellation. Smith Affidavit at 5 13.
5In his affidavit, Stevens testifies that he "wrote to" and "sent" the letters by both regular and certified mail to the Press Room at "77 Daniel Street, Portsmouth, New Hampshire 03801." Stevens Affidavit at 1-2. Stevens does not explicitly state that the letters were properly deposited in a "U.S. post office mail receptacle" or otherwise properly submitted to the postal service. See id. However, the defendants do not challenge the adeguacy of the dispatch of letters, but rather focus on the inadeguacy of the Press Room's mail handling procedures. The court finds that there is no genuine dispute that BMI satisfied the mailing reguirement for the purpose of invoking the evidentiary presumption.
19 Smith further testified that mail sent to the Press Room is often
not received by him in a timely manner, if at all, and,
therefore, he has instructed the staff not to sign for or accept
any certified mail. Id. at 55 14-15.
The defendants' argument is unavailing as the evidence is
insufficient to rebut the presumption of receipt. Although the
refusal of certified mail may show that the defendants did not
receive those letters, it does not rebut the presumption that
they received the letters dispatched by regular first-class mail,
namely the six other renewal and cancellation notices and the two
cease and desist notices. Moreover, although the defendants'
evidence indicates that Smith personally may not receive mail in
a timely manner, there is no evidence that the Press Room,
through its employees, does not receive it as delivered.6
The defendants cannot reasonably expect to overcome the
presumption of receipt by claiming that irresponsible employees,
predominantly evening hours of operation and company policy have
effectively shielded management from ten or more written
communications from BMI. In any event, even if Smith himself
does not "recall" receipt of notices, he nonetheless is held to
6The defendants maintain that employees are instructed not to accept certified mail. However, there is no evidence in the record to suggest that there is a similar policy with respect to regular mail.
20 constructive receipt and knowledge of materials received by his
employees through operation of common law principles of agency
and principal. Given the absence of adeguate evidence to rebut
the presumption of the receipt of regular mail, the court finds
that the defendants were properly placed on notice of BMI's
cancellation of the agreement.
B. The Implied Contract
The court next considers the argument that the course of
conduct between the parties created an implied contract which
authorized the performance of BMI music. Memorandum in
Opposition to Summary Judgment at 7. Specifically, the
defendants argue that BMI's past willingness to accept late
payment of fees gave rise to an implied license. Id. at 8. In
their motion, the plaintiffs assert that they only accepted late
payments to credit the defendants' delinguent account under the
old agreement. Plaintiffs' Reply Memorandum at 2-3.
A nonexclusive license to perform a copyrighted work may be
granted orally or may be implied from the conduct of the parties.
MacLean Assoc., Inc. v. Wm. M. Mercer-Meidinqer-Hansen, Inc., 952
F.2d 769, 778-79 (3d Cir. 1991); 3 Nimmer at § 10.02[B][5].
However, a nonexclusive license is revocable absent considera-
21 tion. Avtec Svs., Inc. v. Peiffer, 21 F.3d 568, 574 n.12 (4th
Cir. 1994); 3 Nimmer at § 10.02[B][5].
The interpretation of a contract, either express or implied,
is governed by common law. See, e.g., Dolch v. United California
Bank, 702 F.2d 178, 180 (9th Cir. 1983). Under New Hampshire
law, an implied contract is treated as an implied-in-fact
contract. Morgenroth & Assoc, v. Town of Tilton, 121 N.H. 511,
516, 431 A.2d 770, 773 (1981), appeal after remand, 126 N.H. 266,
490 A.2d 784 (1985). An implied-in-fact contract is a true
contract that is not expressed in words but, rather, is inferred
from the conduct of the parties. Id., 121 N.H at 514; 431 A.2d
at 772; see Goodwin R.R. Inc. v. State, 128 N.H. 595, 604, 517
A.2d 823, 829 (1986). In addition, the terms of a written
contract may be modified by an implied mutual agreement between
the parties. Guri v. Guri, 122 N.H. 552, 555, 448 A.2d 370, 371
(1982). Therefore, part of a contract may be modified by the
conduct of the parties, while the remaining terms are not revised
and stay in force as originally written. See Morgenroth &
Assocs., 121 N.H. at 515, 431 A.2d at 773.
The defendants assert that the written agreement with BMI
has been modified by an implied agreement permitting delinguent
payment without repercussion. Memorandum in Opposition to
Summary Judgment at 10. In essence, the defendants argue that at
22 the time of the alleged infringement they were protected by a
new, implied-in-fact agreement that would not expire regardless
of late payment. See id. In support of this view of the
contract, the defendants point to two occasions following the
1989 cancellation notice where they were permitted to pay late
without an apparent lapse in the license. Id. at 8, Exhibit B.
The defendants' argument is that the payments accepted after the
1989 cancellation notice not only changed the provisions related
to timeliness of payment, but also superseded the written
provisions regarding BMI's ability to cancel. See Smith
Affidavit at 55 9-11. Finally, the defendants have submitted
evidence of an attempted payment on November 30, 1993, which BMI
refused. Id. at 5 17.
The plaintiffs have submitted evidence showing that the
initial, November 29, 1989, renewal and cancellation notice was a
prospective cancellation in that it informed the defendants that
the 1987 agreement would be cancelled in the near future and
would need to be replaced by a new agreement. Stevens Affidavit,
Exhibit A; Plaintiffs' Reply Memorandum at 2. The plaintiffs
have also submitted evidence that they accepted the late payments
to credit the defendants' delinguent account and did not accept
any payments after March 21, 1991, including the late payment
23 attempted after the commencement of this lawsuit. Plaintiffs'
Reply Memorandum at 3.
In his affidavit Smith testifies that the late payments
created an entirely new contract rather than merely changing the
payment terms under the 1987 written agreement. Smith Affidavit
at 5 9. The court finds that the defendants' evidence reveals a
dispute of fact relative to whether the conduct of the parties
revised the payment terms from those specified in the 1987
written contract. However, the defendants have not submitted
evidence to suggest that the cancellation terms of the 1987
agreement were ever revised by an implied mutual agreement. The
late payments by Smith may have modified the timeliness of
payment terms, however, the remainder of the terms, including the
cancellation terms, remained in force. Smith's bald statement
that the conduct of the parties created a new implied-in-fact
contract is not evidence of the creation of a new agreement. See
Velazquez v. Chardon, 736 F.2d 831, 833-34 (1st Cir. 1984) ("The
court is not obliged to find that a genuine issue of material
fact exists where the only evidence of such an issue is a series
of conclusory statements unsupported by specific factual
allegations") .
There is no genuine dispute that at all times the 1987
agreement called for one-year renewals unless cancelled by either
24 party within thirty-days of the end of a period. The court has
already determined that the defendants were properly placed on
notice of cancellation under this provision. Thus, on the dates
of the alleged infringement the defendants lacked authority to
perform the BMI music compositions at issue. Therefore, the
final element of copyright infringement is satisfied as a matter
of law.
Copyright Infringement Relief
The plaintiffs have reguested injunctive relief, statutory
damages, post-judgment interest and reasonable attorney's fees
and costs. The defendants have briefed the issue of remedies in
their responsive pleadings. Courts routinely award statutory
damages or injunctive relief when granting a motion for summary
judgment on copyright infringement. See, e.g., Chi-Bov Music,
77 9 F. Supp. at 532; Hulex Music, 698 F. Supp. at 1031-32;
Merrill, 669 F. Supp. at 1171-72; Sailor Mu sic, 640 F. Supp. at
634 .
I. Injunctive Relief
The plaintiffs have reguested the court to permanently
enjoin the defendants from infringing on their copyrights in the
future. Motion at 1.
25 Under the Copyright Act,
[a]ny court having jurisdiction of a civil action arising under this title may . . . grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.
17 U.S.C.A. § 502(a) (West 1977). Courts generally grant
permanent injunctions where liability is clear and the defendants
present a continuing threat to the copyright. Pedrosillo Music
Corp. v. Radio Musical, Inc., 815 F. Supp. 511, 516 (D.P.R.
1993)(listing cases); Merrill, 669 F. Supp at 1171 (injunction
granted where "substantial likelihood of further infringement of
plaintiffs' copyrights exists") (guoting Sailor Mu sic, 640 F.
Supp. at 634; Milene Music, 551 F. Supp. at 1295).
The defendants have objected to an injunction, arguing that
there is little likelihood of a future infringement:
Mr. Smith will be licensed for performances of the works to which BMI holds the copyright for 1994 and years forward. Once so licensed, there will be no violation of copyright.
Memorandum in Opposition to Summary Judgment at 14; see Smith
Affidavit at 5 17. Based on these representations by counsel and
the affidavit by Smith, the court concludes that there is not a
substantial likelihood of a future violation of the plaintiffs'
rights and an injunction is not necessary.
26 II. Statutory Damages and Judgment Interest
The plaintiffs have requested statutory damages in the
amount of $2,000 per violation, for a total of $12,000. Motion
at 2-3. The defendants have not responded with a precise
calculation of damages, instead arguing that a "$500 minimum
award is more appropriate." Memorandum in Opposition to Summary
Judgment at 17.
Under the Copyright Act,
[T]he copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work . . . in a sum of not less than $500 or more than $20,000 as the court considers just. 17 U.S.C.A § 504(c)(1) (West 1977 & Supp. 1994). The Copyright
Act further provides that the court may, at its discretion,
exceed the maximum statutory damage upon finding a willful
violation and, conversely, reduce the damages below the minimum
upon finding an unknowing or innocent violation.7 Id. at §
504 (c) (2) .
7Under the law of this circuit, the court may award statutory damages without submitting the matter to a jury. PGP Music v. Davric Maine Corp., 623 F. Supp. 472, 472-73 (D. Me. 1985) (copyright infringer has no right to jury trial on question of injunctive relief and statutory damages) (citing Chappell & Co., Inc. v. Palermo Cafe Co., 249 F.2d 77, 79 (1st Cir. 1957)). But see Video Views, Inc. v. Studio 21, Ltd., 925 F.2d 1010, 1016 (7th Cir. 1991) (statutory damages may only be awarded by jury).
27 The damages provisions are designed to deter and discourage
wrongful conduct. Merrill, 669 F. Supp. at 1171 (citing F .W .
Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 233,
clarification denied, 350 U.S. 810 (1952)). Determination of the
amount of an award under the statute is left to the court's sound
discretion. Hulex Music, 698 F. Supp. at 1031 (citing Morle
Music Co. v. Dick Stacey's Plaza Motel, Inc., 725 F.2d 1, 2-3
(1st Cir. 1983); Merrill, 669 F. Supp. at 1171. In calculating
damages the court considers the plaintiffs' lost revenues,
expenses saved and profits reaped by the defendants as a result
of the infringement, the size of the defendants' operation, and
whether the defendants' conduct was intentional or accidental.
Merrill, 669 F. Supp. at 1171 (citing Sailor Mu sic, 640 F. Supp.
at 635); see Pedrosillo Music, 815 F. Supp. at 517. Moreover, a
copyright infringer "cannot expect to pay the same price in
damages as it might have paid after freely negotiated bargaining,
or there would be no reason to scrupulously obey the copyright
law." Merrill, 669 F. Supp. at 1171-72 (guoting Ackee Music,
Inc. v. Williams, 650 F. Supp. 653, 657 (D. Kan. 1986)).
The plaintiffs argue that the infringement was deliberate,
as evidenced by the defendants' failure to respond to BMI's
multiple attempts to execute a new license agreement. Memorandum
in Support of Summary Judgment at 12. The defendants argue that
28 the infringement was innocent and was "simply the by-product of
erratic bookkeeping procedures or the lack of financial
wherewithal to make current payments." Memorandum in Opposition
to Summary Judgment at 15.
The court finds that the infringement was neither willful
nor innocent and, thus, calculates damages within the statutory
range. However, the infringement was a knowing violation in the
sense that the defendants were repeatedly placed on notice of
their conduct and the potential ramifications. Thus, the court
awards the plaintiffs damages in the amount of $800 per
violation, for a total award of $4,800.
The court believes this award reflects the nature of the
infringement, the need to deter future violations and the degree
of culpability of the defendants. The court further awards the
plaintiffs post-judgment interest to be calculated at the federal
interest rate as provided by 28 U.S.C.A. § 1961 (West 1994).
Clifford v. M/V Islander, 882 F.2d 12, 14 (1st Cir. 1989) (award
of post-judgment interest is mandatory); see Cordero v. De Jesus-
Mendez, 922 F.2d 11, 15-16 (1st Cir. 1990) (entitlement of post
judgment interest on final judgment).
29 III. Attorney's Fees and Costs
The plaintiffs have requested an award of their reasonable
attorney's fees and costs. Motion at 2. The defendants object
on the grounds that they pursued litigation in good faith and
under the honest belief that they had not infringed the
plaintiffs' rights. Memorandum in Opposition to Summary Judgment
at 17-18 .
The Copyright Act provides that the court "in its discretion
may allow the recovery of full costs by or against any party
other than the United States . . . [and] a reasonable attorney's
fee to the prevailing party as part of the costs." 17 U.S.C.A. §
505 (West 1977). Courts routinely award fees and costs to
prevailing plaintiffs because they would not have had to bring an
action but for the defendants' failure to maintaining proper
licensing. See, e.g., Hulex Music, 698 F. Supp. at 1032 (citing
Sailor Mu sic, 640 F. Supp. at 636); Merrill, 669 F. Supp. at
1172; Rare Blue Music v. Guttadauro, 616 F. Supp 1528, 1531 (D.
Mass. 1985) .
The court finds that an award of fees and costs is
warranted. The plaintiffs have submitted an affidavit from local
counsel along with bills indicating attorney fees and other fees
and costs in the total amount of $2,612.10. The defendants have
not objected to the reasonableness of this figure. However, the
30 court notes that while the submitted bills describe in narrative
form the work accomplished, they do not offer a breakdown of who
performed which tasks and on what day. Disbursements, such as
photocopies and telephone charges, are similarly lumped together
without indication of how costs are allocated. Finally, the
court cannot gauge the reasonableness of a given billable rate or
time spent on a task without a brief sketch of the professional
gualifications of each billing individual.
The plaintiffs' counsel is ordered to file within ten days
of the date of this order an itemized bill which responds to the
court's concerns. Counsel is further ordered to submit another
affidavit, this time personally signed by the attorney making the
sworn statements. The defendants will then be given an
opportunity to respond to the plaintiffs' claim for fees and
costs as provided by federal and local rules.
Conclusion
The plaintiffs have satisfied the necessary elements of
copyright infringement to prevail under the Copyright Act. The
court grants the motion for summary judgment (document no. 10)
with respect to guestion of liability for copyright infringement.
The court denies the plaintiffs' reguest for an injunction. The
court awards the plaintiffs $800 for each of the six instances of
31 copyright infringement, for a total of $4,800 with post-judgment
interest allowed as provided by 28 U.S.C.A. § 1961. The court
orders the plaintiffs to re-submit their claim for fees and costs
in a manner consistent with this order within ten days.
SO ORDERED.
Joseph A. DiClerico, Jr, Chief Judge Marcg 27, 1995
cc: Steven J. Grossman, Esguire Thomas M. Dudley, Esguire Lawrence M. Edelman, Esguire