376 F.3d 615 (6th Cir. 2004), 03-5005, Bridgeport Music, Inc. v. Rhyme Syndicate Music

Docket Nº:03-5005, 03-5744.
Citation:376 F.3d 615
Party Name:71 U.S.P.Q.2d 1729 BRIDGEPORT MUSIC, INC., Plaintiff-Appellant, Southfield Music, Inc.; Westbound Records, Inc.; Nine Records, Inc., Plaintiffs, v. RHYME SYNDICATE MUSIC; Universal-Polygram International Publishing, Inc., individually and as successor to Polygram International Publishing, Inc.; Carrumba Music; Ammo Dump Music, Defendants-Appellees,
Case Date:July 22, 2004
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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376 F.3d 615 (6th Cir. 2004)

71 U.S.P.Q.2d 1729

BRIDGEPORT MUSIC, INC., Plaintiff-Appellant,

Southfield Music, Inc.; Westbound Records, Inc.; Nine Records, Inc., Plaintiffs,

v.

RHYME SYNDICATE MUSIC; Universal-Polygram International Publishing, Inc., individually and as successor to Polygram International Publishing, Inc.; Carrumba Music; Ammo Dump Music, Defendants-Appellees,

WB Music Corp.; Warner-Chappell Music, Inc.; Rhyme Syndicate Records, Defendants.

Nos. 03-5005, 03-5744.

United States Court of Appeals, Sixth Circuit

July 22, 2004

Argued April 28, 2004.

Rehearing Denied August 30, 2004.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Richard S. Busch (argued and briefed), D'Lesli M. Davis (briefed), Jeannine Huber, King & Ballow, Nashville, TN, for Plaintiffs-Appellants in Nos. 03-5005, 03-5744.

Philip M. Kirkpatrick (briefed), Stewart, Estes & Donnell, Nashville, TN, Russell J. Frackman (argued and briefed), Jeffrey D. Goldman (briefed), Marc E. Mayer (briefed), Mitchell, Silberberg & Knupp, Los Angeles, CA, for Defendants-Appellees in Nos. 03-5005, 03-5744.

Before: GUY and GILMAN, Circuit Judges; BARZILAY, Judge.[*]

RALPH B. GUY, JR., J., delivered the opinion of the court, in which BARZILAY, J., joined. GILMAN, J. (p. 629), delivered a separate opinion concurring in part and dissenting in part.

OPINION

RALPH B. GUY, JR., Circuit Judge.

Plaintiff, Bridgeport Music, Inc., appeals from the district court's orders (1) granting summary judgment to defendant Universal-PolyGram International Publishing, Inc. (UPIP), on Bridgeport's copyright infringement claims; (2) dismissing defendants Carrumba Music and Ammo Dump Music without prejudice for lack of proper service of process; and (3) awarding attorney fees and costs to UPIP as a prevailing defendant under 17 U.S.C. § 505. No other claims or parties are before us.1 After review of the record and the arguments presented on appeal, we affirm both the entry of summary judgment and the dismissals for lack of service. With respect to Bridgeport's separate appeal from the award of attorney fees and costs to UPIP, however, we vacate the award and remand for further consideration consistent with this opinion.

I.

The claims at issue in this appeal were first asserted on May 4, 2001. In that

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original complaint, Bridgeport and three sister companies alleged nearly 500 counts against approximately 800 defendants for copyright infringement and other state law claims arising from music sampling. The amended complaint, filed after the district court severed the initial pleading into 476 separate actions, was based on the claim that the rap song "99 Problems" sampled the opening three-note chord from the musical composition "Get Off Your Ass and Jam" ("Get Off").2 Bridgeport Music is in the business of owning and exploiting copyrights in musical compositions. We assume for purposes of this appeal that Bridgeport would be able to establish that it owns the composition "Get Off," which was written and recorded by George Clinton, Jr., and the Funkadelics in the mid-1970s.

A. Background Facts

The song "99 Problems" was co-written and performed by Tracy Marrow, p/k/a Ice-T, for release on the album "Home Invasion." At that time, Marrow, d/b/a Rhyme Syndicate Music, owned 66.7% of the composition copyright in "99 Problems." Alphonso Henderson, p/k/a DJ Aladdin, co-wrote "99 Problems." The album was released by Priority Records on March 23, 1993. While a mechanical license was probably granted for use of the composition "99 Problems," there was no evidence presented in that regard.

More than a year later, UPIP obtained an interest in the composition through its predecessor, PolyGram International Publishing, Inc., by assignment from Marrow, d/b/a Rhyme Syndicate Music. Specifically, in November 1994, Marrow entered into several agreements with PolyGram, including an Exclusive Songwriter's Agreement and a Co-Publishing Agreement covering past and future works. As part of these agreements, PolyGram acquired half of Marrow's interest in the composition "99 Problems" (or 33.34%), as well as the exclusive right to administer their combined interests and collect and distribute royalties. The copyright registration reflecting this transfer listed the copyright claimants as PolyGram, Rhyme Syndicate Music, WB Music, Carrumba Music, and Ammo Dump Music. The record does not reflect when UPIP succeeded PolyGram.

On January 7, 1998, Bridgeport's administrator, Jane Peterer, notified UPIP and others of its sampling claim and demanded that Bridgeport be granted a 33.33% ownership interest in the musical composition "99 Problems." UPIP did not respond, but Warner/Chappell Music denied any samples were used on the "Home Invasion" album.

B. Procedural Facts

This action was commenced May 4, 2001, more than three years after Bridgeport had actual notice of the alleged infringement. Plaintiffs attempted to effect service of process on Carrumba Music and Ammo Dump Music through Warner/Chappell Music. Bridgeport also attempted to serve Carrumba Music at an address that was the office of Carrumba's accounting firm.

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Carrumba Music moved to dismiss both for failure of service and for lack of personal jurisdiction, while Bridgeport filed a motion for default judgment against Ammo Dump Music. The district court granted Carrumba's motion, denied Bridgeport's motion for default judgment, and dismissed Carrumba Music and Ammo Dump Music without prejudice pursuant to Fed.R.Civ.P. 4(m). Bridgeport's subsequent motion for reconsideration was denied.

Defendants Warner/Chappell Music and WB Music (Warner defendants) moved for summary judgment on several grounds. In August 2002, after considerable briefing and supplementation, the magistrate judge issued a report and recommendation in which he concluded that the infringement claims against the Warner defendants should be dismissed because they were barred both by a release as part of a settlement of prior litigation and by the applicable three-year statute of limitations. As part of that decision, the magistrate judge indicated that although the Warner defendants had issued a license for the release of "99 Problems" in 1993, the only acts by the Warner defendants within the limitations period were the receipt of royalties on the sale of the album. Recognizing that there was no case law on the question, the magistrate judge concluded that the receipt of income from the sale of infringing products within the limitations period, by a party who does not manufacture, distribute, or sell the infringing product (but who did provide a license), would not constitute direct or contributory infringement.

The district court adopted the report and recommendation, over plaintiffs' objections, and granted summary judgment to the Warner defendants on September 16, 2002. Because Bridgeport has settled with the Warner defendants, that order is no longer before us on appeal. It remains pertinent, however, to the district court's decision to award UPIP attorney fees and costs incurred after September 16, 2002.

UPIP had also moved for summary judgment, arguing, inter alia, that Bridgeport's claims were barred, or alternatively, limited by the statute of limitations.3 While the motion was pending, UPIP wrote to Bridgeport and proposed that they stipulate to judgment in favor of UPIP based on the magistrate judge's recommendation concerning the Warner defendants' motion for summary judgment. Bridgeport did not respond. Once the district court granted summary judgment to the Warner defendants, UPIP obtained leave to supplement its motion for summary judgment. Bridgeport responded in opposition on October 4, 2002. The district court granted summary judgment to UPIP on November 7, 2002, finding that Bridgeport failed to demonstrate direct, contributory, or vicarious infringement by UPIP within the limitations period. Judgment was entered accordingly, and Bridgeport appealed.

In a post-judgment motion, UPIP moved for an award of $297,292.60 in attorney fees and $16,119.22 in nontaxable costs as a prevailing party under 17 U.S.C. § 505. On May 6, 2003, the district court awarded UPIP $79,340.94 in attorney fees and $3,409.35 in costs, which represented the fees and costs incurred by UPIP after September 16, 2002. Bridgeport appealed.

II.

In its first claim of error, Bridgeport argues that there was a question of fact

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whether UPIP committed acts within the limitations period for which it could be liable for copyright infringement. We review the district court's decision to grant summary judgment de novo. Smith v. Ameritech, 129 F.3d 857, 863 (6th Cir. 1997). In deciding a motion for summary judgment, the court must view the evidence and reasonable inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The nonmoving party may not rest on his pleadings, but must come forward with evidence from which a rational trier of fact could find in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

A. Copyright Infringement

A civil action under the Copyright Act must be "commenced within three years after the claim accrued." 17 U.S.C. § 507(b). A cause of action accrues when a plaintiff knows of the infringement or is chargeable with such knowledge. Roley v. New World Pictures, Ltd., 19 F.3d 479, 481 (9th Cir. 1994). Because each act of infringement is a distinct harm, the statute of limitations bars infringement claims that accrued more than three years before suit was...

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