Music Publishers Lawsuit Against Yahoo, Microsoft, Real Tossed For Failing To Prove They Hold Copyrights

from the oooops dept

Tue, Dec 8th 2009 7:37am — Mike Masnick

Back in June, we wrote about an odd lawsuit from a bunch of independent music publishers headed by MCS Music America against Microsoft, Yahoo and RealNetworks claiming that all three failed to secure licenses on the compositions. This seems strange, of course. You would assume that big companies like Microsoft, Yahoo and Real would make sure to secure all the necessary licenses for their music download and streaming operations. However, MCS and the others suggested that the three companies only secured the licenses on the recordings, but not the compositions. What appeared to have happened, was that Microsoft, Yahoo and Real licensed the songs from the major record labels, who also own many publishing operations, and in were told that they had received licenses for both the recording and composition. The problem is that not all of those major labels hold the composition rights. In some cases, those rights are still held by independent music publishers -- and there was a fair amount of confusion over who owned what. It was a perfect example of how ridiculous copyright law is today that even in setting up a big music operation from a major company with the major record labels, no one was exactly sure if all the proper rights were secured.

Either way, Microsoft, Yahoo and Real were quick to ask for the lawsuit to be dismissed and Eric Goldman sent over the rather short ruling from last month that does, in fact, dismiss the case stating (surprisingly) that the music publishers failed to show they hold the copyrights they were arguing over. That's rather incredible, seeing as the original lawsuit went on for pages and pages, claiming to hold various licensing rights. But the court wasn't buying it:

Defendants' Motion to Dismiss All Causes of Action of Plaintiff MCS Music America, Inc. ("MCS") is granted on the ground Plaintiff MCS has failed to state a legal claim for copyright infringement. To establish a claim of copyright infringement, two elements must be satisfied: (1) ownership of a valid copyright, and (2) unauthorized copying of the original work. Feist Publications, Inc. v. Rural Telephone Services Co., Inc,. 499 U.S. 340, 111 S.Ct 1282 (1991); Jones v. Blige, 558 F.3d 485 (6th Cir.2009).

MCS has failed to demonstrate ownership of any of the copyrights at issue. Plaintiffs allege MCS is a licensing administrator and an exclusive licensing agent of the copyrights at issue, but do not allege MCS to be an owner of such works. Without demonstrating legal ownership, MCS is not able to plead all of the necessary elements of copyright infringement.

Plaintiffs ask the court to consider the affidavit of Janice Bane with regard to MCS's rights. The court will not consider Ms. Bane's affidavit in deciding this issue. In ruling on a motion to dismiss, a court properly may consider only evidence contained in or asserted in the pleadings. As a general rule, matters outside the pleadings may not be considered in ruling on a motion to dismiss unless the motion is converted to one for summary judgment under Rule 56. Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir.1999). Weiner v. Klais & Co., 108 F.3d 86, 88-89 (6th Cir.1997). Furthermore, even if the court were to consider Ms. Bane's affidavit, it does not indicate any ownership on the part of MCS, thus rendering its consideration moot.

Defendants' Motion to Dismiss All Causes of Action of Plaintiff MCS is GRANTED.

On top of that, MCS requested the right to amend the lawsuit, and the court shot them down there as well:

Plaintiffs have moved to amend their complaint a second time. The Federal Rules of Civil Procedure state "... a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). However. Plaintiffs have not demonstrated their amended complaint would show MCS has ownership of any of the copyrights at issue and would therefore be futile. For that reason, Plaintiff's Motion to Amend Complaint is DENIED.

So much for that, then. Somewhere along the line, it looks like these publishers got some really poor legal advice, as this case didn't last long at all, and to be tossed out so early is pretty bad.

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Filed Under: copyright, music, publishers, songwriters
Companies: mcs music america, microsoft, real networks, yahoo

15 Comments

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Anonymous Coward, 8 Dec 2009 @ 7:51am

A bank went to forclose on a house and the family got a lawyer and they walked into court and stated that they didn't know who actually owned title to the house. The judge asked the banks lawyer to come up with the deed, and guess what, they couldn't. The loan had been sold so many times, they couldn't track down the deed. The judge ruled that they couldn't forclose on a property they couldn't prove they owned and ruled that the family now owned the home free and clear.

The moral of the story? Shit happens.
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- Anonymous Coward, 8 Dec 2009 @ 12:08pm
  
  Re:
  That should never happen. The deed is filed with the city, and the city is responsible for the disposition of the legal title to the property.
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Steven (profile), 8 Dec 2009 @ 7:51am

Owner needs to sue?
It almost sounds like the judge is saying that MCS doesn't own the copyright, because it's the individuals that own their rights. So MCS can't sue, but the individuals could?

Just a guess with the info we have.
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Anonymous Coward, 8 Dec 2009 @ 7:52am

What a second, wasn't there something about the labels NOT having to prove they owned the recordings when they are suing individuals. But when indepewndants are suing corporations they have to prove ownership?
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- Anonymous Coward, 8 Dec 2009 @ 9:31am
  
  Re: presumption of valid claims
  Most of the free trade agreements that we've recently been involved in require that courts start with the presumption that the copyright claims are valid:
  
  Here's a snippet from our FTA with South Korea:
  
  "In civil, administrative, and criminal proceedings involving copyright or related rights, each Party shall provide for a presumption that, in the absence of proof to the contrary, the person whose name is indicated as the author, producer, performer, or publisher of the work, performance, or phonogram in the usual manner is the designated right holder in such work, performance, or phonogram. Each Party shall also provide for a presumption that, in the absence of proof to the contrary, the copyright or related right subsists in such subject matter."
  
  Unfortunately, our international agreements stipulate that the defendant has the burden of proving the claims are invalid.
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  - Steven (profile), 8 Dec 2009 @ 9:39am
    
    Re: Re: presumption of valid claims
    I think you read that wrong. The presumption is that the creator of the work owns the copyright unless otherwise proven. Meaning that if Metallica takes me to court for distributing their black album the presumption is that they own the copyright, but if Warner Music sues me they have to provide proof that they own the copyright.
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    - Anonymous Coward, 8 Dec 2009 @ 9:51am
      
      Re: Re: Re: presumption of valid claims
      "I think you read that wrong."
      
      Definitely possible - and that'd be nice if you're right. My reading of the text seems to extend the presumption to producers and publishers(e.g. MCS et al.), not just creators.
      
      "each Party shall provide for a presumption that, in the absence of proof to the contrary, the person whose name is indicated as the ...producer,...or publisher of the work... is the designated right holder..."
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      - Steven (profile), 8 Dec 2009 @ 10:00am
        
        Re: Re: Re: Re: presumption of valid claims
        I'm not sure. I think it comes down to this part
        
        "person whose name is indicated... in the usual manner"
        
        I'm not sure how that is determined.
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      - Anonymous Coward, 8 Dec 2009 @ 4:08pm
        
        Re: presumption of valid claims
        It appears that the presumption of ownership is what is listed on the item, the fine print on the sleeve. You have to prove that it was later sold to you.
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Ima Fish (profile), 8 Dec 2009 @ 8:11am

Defendants' Motion to Dismiss All Causes of Action of Plaintiff MCS is GRANTED.

Frying pan...

Plaintiff's Motion to Amend Complaint is DENIED.

...fire.
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Anonymous Coward, 8 Dec 2009 @ 8:28am

Well, the court rules in favor of big corporations as usual. Does this set a precedent for individuals being sued for infringement? Probably not. I’m not saying the ruling is wrong, just that our legal system seems to have a bias in favor of big corporations who engage in a lawsuit with individuals. The precedent for that bias is already set and this judgment simply upholds that precedent and the inequitable nature of our legal system.
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big al, 8 Dec 2009 @ 10:09am

a thought....
I quietly wonder who owns the collection agency..
It would be very interesting to see what connections there are between all of the parties.
At 33% to 50% per collection i don't believe that they would share the profits with anyone not under their control.
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Hephaestus (profile), 8 Dec 2009 @ 10:55am

This line make me wonder .....
"MCS has failed to demonstrate ownership of any of the copyrights at issue. Plaintiffs allege MCS is a licensing administrator and an exclusive licensing agent of the copyrights at issue, but do not allege MCS to be an owner of such works. Without demonstrating legal ownership, MCS is not able to plead all of the necessary elements of copyright infringement."

Would this have been usable against RIAA for the 30,000 people they went after for infringement? the line ....

"but do not allege MCS to be an owner of such works."

... seems to suggest that would be the case. Wouldn't the labels have to go to court themselves and not use a third party (RIAA) to collect money for the copyright infringement?

"Without demonstrating legal ownership, MCS is not able to plead all of the necessary elements of copyright infringement."

Or am I missing something here??
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Jamie (profile), 8 Dec 2009 @ 2:09pm

At least the lawyers made a few bucks in the process...
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AG Wright (profile), 8 Dec 2009 @ 5:04pm

Mechanical reproduction rights
I could be wrong here but I think that when an artist records the music of a composer they pay the composer, through some licensing authority or the other, sometimes the Harry Fox Agency, for the mechanical rights to the song.
That means they can record it and sell the recordings.
I am not a lawyer and this could be complete BS. If you want to make recordings of copyrighted material find and hire a good entertainment lawyer.

AG
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