AMERICAN METROPOLITAN ENT. OF NY, INC. v. Warner Bros. Records, Inc.

• Decision Date: 16 February 1968
• Docket Number: Docket 31664.,No. 173,173
• Parties: AMERICAN METROPOLITAN ENTERPRISES OF NEW YORK, INC., Jay Boy Music Corp., Piccadilly Music Corp., and Edward Kassner Music Co., Ltd., Plaintiffs-Appellants, v. WARNER BROS. RECORDS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

389 F.2d 903 (1968)

AMERICAN METROPOLITAN ENTERPRISES OF NEW YORK, INC., Jay Boy Music Corp., Piccadilly Music Corp., and Edward Kassner Music Co., Ltd., Plaintiffs-Appellants, v. WARNER BROS. RECORDS, INC., Defendant-Appellee.

No. 173, Docket 31664.

United States Court of Appeals Second Circuit.

Argued November 14, 1967.

Decided February 16, 1968.

Arnold I. Burns, New York City (Erwin Cherovsky, and Mermelstein, Burns & Lesser, New York City, on the brief), for plaintiffs-appellants.

Carleton G. Eldridge, Jr., New York City (Stephen Sayre Singer, and Coudert Brothers, New York City, on the brief), for defendant-appellee.

Abeles & Clark, New York City (Julian T. Abeles, John S. Clark, and Robert C. Osterberg, New York City, of counsel), for National Music Publishers' Association, Inc., amicus curiae.

Before WATERMAN, FRIENDLY and SMITH, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge:

This is an appeal from an order of the United States District Court for the Southern District of New York, John F. X. McGohey, Judge, denying an application for a preliminary injunction in a copyright infringement action. We find no error and affirm the order denying an injunction.

Edward Kassner Music Co., Ltd., an English corporation, had acquired the world-wide copyrights to musical compositions written by Ray Davies.¹ Kassner granted control of the mechanical reproduction rights for the United States to the various appellant corporations. All of these corporate appellants are owned, either directly or indirectly, by American Metropolitan Enterprises Limited, an Ontario corporation. The appellants licensed Warner Bros. Records, Inc., the appellee, to produce and sell in the United States records containing the thirty-three copyrighted musical compositions. In addition, Warner was supplied with master recordings containing performances of these thirty-three songs sung by the Kinks, a musical group of which composers Davies are members.

In March of 1967, Warner advised the appellants that it was withholding any licensing fees due or to become due under their agreements. Appellants brought suit under 17 U.S.C. § 101(e) seeking damages and a preliminary injunction. Warner raised two defenses which it contended freed it from any copyright obligations to the appellants: (1) appellants' failure to comply with the Copyright Act's filing provisions barred their recovery for the alleged infringement of some of the thirty-three copyrights; (2) under British law, appellants' breach of their agreements with Davies revested title in all the copyrights in Davies, so that any copyright obligation runs to Davies and not to the appellants. In June of 1967, Judge John F. X. McGohey entered the order and opinion denying appellants' motion for a preliminary injunction now before us on appeal. Jurisdiction of this appeal from the order denying an injunction is based on 28 U.S.C. § 1292(a) (1).

The denial of preliminary injunction was justified in these circumstances. "A preliminary injunction is an extraordinary equitable remedy and it will be granted only upon a showing by the applicant that it will probably succeed on the trial and that it will suffer irreparable injury if the defendant is not restrained from certain activity pending the trial. Societe Comptoir De L'Industrie, etc. v. Alexander's Department Stores, Inc., 299 F.2d 33, 35, 1 A.L.R.2d 752 (2d Cir. 1962)." Imperial Chem. Indus. Ltd. v. National Distillers & Chem. Corp., 354 F.2d 459, 461-462 (2 Cir. 1965). Ordinarily the issuance of a preliminary injunction is within the sound judicial discretion of the trial court. United States v. W. T. Grant Co., 345 U.S. 629, 73 S.Ct. 894, 97 L.Ed. 1303 (1953); Carroll v. American Federation of Musicians, 295 F.2d 484, 488 (2 Cir. 1961). In a number of cases involving the enforcement of the Copyright Act, it has been held that upon the showing of a prima facie case of copyright infringement a copyright holder is entitled to a preliminary injunction without a detailed showing of irreparable harm. Uneeda Doll Co. v. Goldfarb Novelty Co., 373 F.2d 851, 852 n. 1 (2 Cir. 1967); Joshua Meier v. Albany Novelty Mfg. Co., 236 F.2d 144 (2 Cir. 1956); Rushton v. Vitale, 218 F.2d 434 (2 Cir. 1955). A copyright holder in the ordinary case may be presumed to suffer irreparable harm when his right to the exclusive use of the copyrighted material is invaded.

Copyrights covering mechanical reproductions of musical compositions, however, are given different statutory treatment from copyrights covering other material. Section 1(e) of the Act provides that:

whenever the owner of a musical copyright has used or permitted or knowingly acquiesced in the use of the copyrighted work * * * any other person may make similar use of the copyrighted work upon compliance with the fee and notice provisions of this section.

Since the appellants had "knowingly acquiesced in the use of the copyrighted works," they no longer have any right to the exclusive use of them. Any person who complies with the compulsory licensing provisions of the Act, may manufacture records containing the thirty-three songs in question without becoming liable as an infringer. See G. Ricordi Co. v. Columbia Graphophone Co., 263 F. 354 (2 Cir. 1920). Thus, the usual rationale for granting a preliminary...