Kamakazi Corp. v. Robbins Music Corp.

Decision Date29 January 1982
Docket NumberNo. 80 Civ. 2877 (RWS).,80 Civ. 2877 (RWS).
PartiesKAMAKAZI MUSIC CORP., Barry Manilow and Warner Bros. Publications, Inc., Plaintiffs, v. ROBBINS MUSIC CORPORATION and Vicks Lithograph, Inc., Defendants.
CourtU.S. District Court — Southern District of New York

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Bender & Frankel, New York City, for plaintiffs; Sandor Frankel, New York City, of counsel.

Abeles, Clark & Osterberg, New York City, for defendant Robbins Music Corp.; Robert C. Osterberg, New York City, of counsel.

Evans, Severn, Bankert & Peet, Utica, N. Y., for defendant Vicks Lithograph Corp.; Philip A. Rayhill, Utica, N. Y., of counsel.

OPINION

SWEET, District Judge.

Currently pending in this action by plaintiffs Kamakazi Music Corp. ("Kamakazi"), Barry Manilow ("Manilow"), and Warner Brothers Publications, Inc. ("Warner") against defendants Robbins Music Corp. ("Robbins") and Vicks Lithograph, Inc. ("Vicks") for copyright infringement are several motions, both substantive and procedural. Robbins has moved for a stay of all further proceedings pending the determination of the appeal from a partial judgment entered by this court in favor of Kamakazi and in the alternative for summary judgment dismissing all remaining claims against Robbins. Warner and Manilow have cross-moved for an order requiring production and inspection of documents, permitting amendment of the complaint pursuant to Fed.R.Civ.P. 15, and granting partial summary judgment on the issue of liability. For the reasons set forth below Robbins' motions for a stay and to dismiss Manilow's and Warner's copyright claims will be denied; Robbins' motion to dismiss Manilow's privacy claim and the claim for punitive damages will be granted; plaintiffs' motion to amend the complaint will be granted in part and denied in part; and Warner and Manilow's motion for partial summary judgment and for discovery will be granted in part and denied in part.

This arduous litigation arises out of Robbins' printing and selling of the compositions of Manilow, a well-known songwriter and recording artist, allegedly in violation of copyrights owned by Kamakazi and the interests of Manilow and Warner in those rights. Manilow, the sole shareholder in Kamakazi, transferred certain copyrights to his songs in whole or in part to Kamakazi in exchange for percentage royalty payments based on sales or license fees. Kamakazi was apparently the duly registered owner of the copyrights. By a written license agreement in November, 1976 ("the Agreement") Kamakazi granted to Robbins the exclusive license to publish and sell certain compositions under the terms and conditions set forth in the Agreement. After the expiration of the Agreement Kamakazi did not renew the license to Robbins and instead granted Warner the right to publish the compositions. Plaintiffs sought injunctive relief and damages for violations of the copyrights when Robbins continued publishing the composition after expiration of the Agreement. The complaint also sought relief for Robbins use of Manilow's name and likeness without consent pursuant to Sections 50 and 51 of the Civil Rights Law. Robbins successfully moved to have its rights under the Agreement determined in arbitration according to its terms, and upon the conclusion of the arbitration the court confirmed the arbitrator's award granting statutory damages to Kamakazi against Robbins for printing and selling copies of Manilow's compositions in violation of the terms of the Agreement. Familiarity with those decisions and the vocabulary of the litigation is assumed.

Robbins' Motion for a Stay Pending the Decision on Appeal

Robbins has moved for a stay of all further proceedings in this case pending the appeal to the Second Circuit of the partial judgment affirming the award of statutory damages entered by this court on the arbitrator's decision. Robbins contends that the subsequent proceedings in this action will be clearly affected by the Court of Appeals decision and that much time and effort could be saved by staying all proceedings pending its decision.

The decision to grant a stay requires consideration of the competing interests of the parties and to obtain a stay a party must make a showing of undue prejudice. Landis v. North American Co., 299 U.S. 248, 255, 57 S.Ct. 163, 166, 81 L.Ed. 153 (1936); Paine, Webber, Jackson & Curtis, Inc. v. Malon S. Andrus, Inc., 486 F.Supp. 1118, 1119 (S.D.N.Y.1980); Kaufman v. Jeffords, 268 F.Supp. 784, 785 (S.D.N.Y.1967). The actions by Warner and Manilow had been stayed upon Robbins' motion pending arbitration of Kamakazi's claim. A judgment having been rendered on that claim, there appears to be no reason to further delay Manilow and Warner in the prosecution of any claims they may have, since obviously the court is of the view that the judgment was appropriately granted. Robbins' assertion of prejudice is based solely upon its expectation of appellate reversal. Much of the difficulty in bringing these issues to a final resolution has resulted from Robbins insistence on arbitration. In fact, it may serve all parties best to have all issues available for appellate review at the same time. The motion for a stay pending the appeal is denied.

Robbins' Motion to Dismiss Manilow's and Warner's Copyright Claims

Robbins also seeks to dismiss Manilow's and Warner's copyright claims for damages as compensated for by the award of statutory damages to Kamakazi by the arbitrator. Under the 1976 revisions of the copyright laws, copyrights are divisible and freely alienable, and various rights arising under a copyright can be held by and transferred to different owners. 17 U.S.C. §§ 201(d), 106.1 Such interests can result from an assignment, an exclusive license or any other conveyance whether or not limited in time or place of effect. 17 U.S.C. § 101. Under this concept of divisibility, "the legal or beneficial owner of an exclusive right under a copyright is entitled ... to institute an action for any infringement of that particular right committed while he or she is the owner of it." 17 U.S.C. § 501(b). Such an owner of a particular exclusive right under a copyright "is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner." 17 U.S.C. § 201(d)(2).

Thus Manilow and Warner are proper plaintiffs to bring an action for injunction and damages for copyright infringement. Manilow is the beneficial owner of the copyright under Section 501(b) since he transferred legal title to the copyrights in exchange for a percent of the royalties based on sales or license fees.

A "beneficial owner" for this purpose would include, for example, an author who had parted with legal title to the copyright in exchange for percentage royalties based on sales or license fees.

H.R.Rep.No.1476, 94 Cong.2d Sess. 159, reprinted in 1976 U.S.Code Cong. & Ad. News p. 5659, 5775. Warner, by alleging that it recorded the instrument transferring to it the exclusive right to print, reprint, publish, distribute, vend and sell printed copies of the compositions for a stated term, also satisfied the prerequisites for filing an infringement suit. 17 U.S.C. § 205(d). See generally Burns v. Rockwood Distributing Co., 481 F.Supp. 841, 845-46 (N.D.Ill.1979).

The difficulty arises, however, in determining whether Kamakazi, Warner and Manilow all have a claim for damages or whether the latter two licensees must look to Kamakazi which has already received its award as a consequence of the arbitration. Section 504(a) provides:

Except as otherwise provided by this title, an infringer of copyright is liable for either—
(1) The copyright owner's actual damages and any additional profits of the infringer, as provided by subsection (b); or
(2) Statutory damages, as provided by subsection (c).

A plaintiff shall elect the form of damages prior to final judgment. See generally 3 M. Nimmer, Nimmer on Copyright § 14.04A at 14-22.

The provision for statutory damages in 17 U.S.C. § 504(c) provides in part:

(1) Except as provided by clause (2) of this subsection, the 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, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $250 or more than $10,000 as the court considers just ....

Section 504(c)(2) then provides that statutory damage awards may be increased to $50,000 per infringement if the infringement was committed willfully. Such a finding was made by the arbitrator.

In establishing divisible rights under a copyright, however, Congress also provided for notice and joinder provisions to anyone having a claim or interest in the copyright, 17 U.S.C. § 501(b), thereby indicating the intent to avoid a multiplicity of suits by "insuring to the extent possible that the other owners whose rights may be affected are notified and given a chance to join the action" H.R.Rep.No.1476, 94 Cong.2d Sess. 159, reprinted in 1976 U.S.Code Cong. & Ad.News p. 5659, 5775. Congress thereby evinced the intent to have all claims presented before one tribunal "to the extent possible."

This intent is particularly important when the party seeking redress for copyright infringement requests statutory damages pursuant to 17 U.S.C. § 504. The House Report analyzing § 504 stated in part:

2. Although, as explained below, an award of minimum statutory damages may be multiplied if separate works and separately liable infringers are involved in the suit, a single award in the $250 to $10,000 range is to be made "for all infringements involved in the action." A single infringer of a single work is liable for a single amount between $250 and $10,000, no matter how many acts of infringement are involved in the
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