Emi Entertainment World v. Priddis Music, Civil No. 2:05-CV-26BSJ.

• Decision Date: 21 May 2007
• Docket Number: Civil No. 2:05-CV-26BSJ.
• Citation: 505 F.Supp.2d 1217
• Parties: EMI ENTERTAINMENT WORLD, INC., a Delaware company, et al., Plaintiffs, v. PRIDDIS MUSIC, INC., a Nevada corporation, Rick Priddis, an individual, and Does 1 through 50, Defendants.
• Court: U.S. District Court — District of Utah

505 F.Supp.2d 1217

EMI ENTERTAINMENT WORLD, INC., a Delaware company, et al., Plaintiffs, v. PRIDDIS MUSIC, INC., a Nevada corporation, Rick Priddis, an individual, and Does 1 through 50, Defendants.

Civil No. 2:05-CV-26BSJ.

United States District Court, D. Utah, Central Division.

May 21, 2007.

Todd E. Zenger, Michael F. Krieger, Kirton & McConkie, Salt Lake City, UT, for Plaintiffs.

Lindsay J. Hulley, Richard P. Sybert, Gordon & Rees, San Diego, CA, Robert L. Janicki, Strong & Hanni, Gary D.E. Pierce, Pate Pierce. & Baird, Steven T. Densley, Union Pacific Railroad (SLC), Law Department, Salt Lake City, UT, for Defendants.

MEMORANDUM OPINION & ORDER

BRUCE S. JENKINS, Senior District Judge.

The plaintiffs (collectively, "EMI") are related companies that own and control the rights to certain copyrighted works, including hundreds of thousands of musical compositions and their associated lyrics. EMI negotiates and grants licenses to others who wish to use the copyrighted works in exchange for the payment of various license fees, depending on the manner in which the licensees are using or reproducing the songs.

Defendants Priddis Music and Rick Priddis (collectively, "Priddis") sell commercial products relating to karaoke, a style of entertainment that originated in Japan in which an amateur singer or singers sing along with recorded music, generally for the amusement of others, often in a private party, public night club or "karaoke bar" setting.¹

Karaoke machines play recordings of well-known songs in which the voice of the original singer is absent or has been reduced in volume, and the machines usually display the lyrics of each song on a video screen to assist the performer in singing along, using a microphone connected to the machine. The display of the lyrics may include text color changes synchronized with the music, and may also display visual images that accompany the musical content.

Priddis produces sound recordings designed for use in karaoke machines. As each song on the Priddis recording is played, the karaoke machine also projects the text of the song's lyrics on a video display against a static blue background in timed relation to the music. To cue the karaoke performer as to the appropriate time to sing the words, the displayed text of the lyrics changes color from white to yellow as the music progresses.

Priddis has obtained a number of copyright licenses from EMI pertaining to

songs used in its karaoke products, including "compulsory licenses" that entitle Priddis to reproduce the musical composition of the songs pursuant to 17 U.S.C.A. § 115(a)(1), and "reprint licenses" that authorize Priddis to reproduce the lyrics of the songs.

EMI insists that Priddis must also obtain so-called "synchronization licenses" for the songs used in its karaoke recordings in order to sell a product that displays the songs' lyrics in timed relation to the music, in contrast to reprinting the text of the lyrics on a printed paper sheet. The license fees exacted from licensees by EMI for "synchronization licenses" are significantly larger than the statutory fees EMI charges for "compulsory licenses" of songs or the discretionary fees EMI typically negotiates for "reprint licenses" for lyrics. Priddis disputes EMI's claim that synchronization licenses are required for its karaoke products, which display only the text of the lyrics against a static blue background without any additional visual image content.

Licensing of Rights in Copyrighted Works

The Copyright Act of 1976 provides that "[clopyright protection subsists ... in 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) (2005). "Works, of authorship" within the meaning of the statute include "literary works," "musical works, including any accompanying words," "motion pictures and other audiovisual works," and "sound recordings," among others. 17 U.S.C.A. § 102(1), (2), (6) & (7). Under the statute, the owner of a copyright in a work of authorship "has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission".

17 U.S.C.A. § 106 (2005). And "music — in contrast to most other copyrightable subject matter — can implicate from just one to all five of the rights in the `bundle of rights' granted by copyright law: the reproduction right, the derivative right, the distribution right, the performance right, and the display right." Don E. Tomlinson & Timothy Neilander, Unchained Melody: Music Licensing in the Digital Age, 6 Tex. Intell. Prop. L.J. 277, 289 (1998) (footnote omitted). Indeed, "[t]he owner of copyright in a musical composition has the exclusive right to, and to authorize others to, reproduce, distribute, perform, display, and prepare derivative works from the copyrighted composition. 17 U.S.C. § 106." Bridgeport Music, Inc. v. Rhyme Syndicate Music, 376 F.3d 615, 621 (6th Cir2004).

Once the copyright holder has distributed a music composition to the public, the work becomes subject to the Copyright Act's compulsory licensing provisions:

The Copyright Act provisions that address rights in musical works and the compulsory licensing scheme for sound recordings of those musical works support the conclusion that when producing and selling a sound recording one must secure a license from the copyright owner of the underlying musical work ... The copyright laws ... attempt to strike a balance between rewarding the creative labor of authors of original works, and promoting further creativity by allowing public access to their works. See Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 429, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984). As applied to the present case, the most relevant example of this balance is the limitation the Act imposes on the exclusive rights of the copyright owner in an original musical work. That limitation is set forth in Section 115, which provides that the exclusive rights in the musical work under Section 106(1) and (3) are subject to "compulsory licensing" under certain specified conditions. See 17 U.S.C. § 115.

Under Section 115, a party intending to make and distribute a sound recording of a previously published musical work may obtain a compulsory license in that work simply by complying with the statutory requirements, including timely and sufficient notice to the owner of the copyright in the musical work and payment of statutory, or otherwise negotiated, royalties. 17 U.S.C. § 115(a)(1), (b), (c). Thus, the exclusive rights of copyright owners of previously published musical works are limited only in that they are required (hence the term "compulsory") to license the work to a party who has complied with Section 115.

Palladium Music, Inc. v. EatSleepMusic, Inc., 398 F.3d 1193, 1198-99 (10th Cir. 2005) (footnote omitted). Priddis asserts that it has already obtained "compulsory licenses" for any musical compositions as to which EMI holds a copyright. EMI conceded at the June 28, 1006 Pretrial Conference that this is true as to most, if not all of EMI's works that are at issue in this case.

Music publishers own or administer copyrights in the lyrics of songs, and grant separate licenses to reproduce the text of the lyrics. These licenses are often referred to as lyric permissions or lyric reprint licenses, and Priddis asserts that it has already obtained reprint licenses for the lyrics accompanying the songs licensed to Priddis under the § 115 compulsory license system. Again, EMI conceded at pretrial that in most, if not all cases, this is true.

The Copyright Act and "Synchronization Licenses"

Though the Copyright Act does not ex, plicitly apply the label, courts have recognized a copyright holder's right to control the synchronization of sound recordings — in particular, sound recordings of musical compositions — with the content of audiovisual works such as motion pictures and television programs. As the Sixth Circuit explains:

"Synchronization" is the process of combining sound recordings of musical compositions with visual images. A "synchronization license" is a license for use of a composition in a film, pre-recorded radio or television program, or radio or television commercial. See 2 Lindey On Entertainment, Publishing And The Arts § 7.01 (2d ed.2000). Under copyright law, an entity wishing to synchronize music with visual images in a video, motion picture, etc., must obtain a synchronization license from the musical composition copyright holder and must also obtain a license from the sound recording copyright holder.

Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 481 n. 8 (6th Cir. 2003). In Agee v. Paramount Communications, Inc., 59 F.3d 317 (2d Cir.1995), the Second Circuit concluded that "[a] synchronization of previously recorded sounds onto the soundtrack of an audiovisual work is simply an example of the reproduction right explicitly granted by section 114(b) to the owner of rights in a sound recording." 59 F.3d at 322. Indeed, "the legislative history indicates that...