King Records, Inc. v. Bennett
| Decision Date | 20 June 2006 |
| Docket Number | No. 3-00-0299.,3-00-0299. |
| Citation | 438 F.Supp.2d 812 |
| Parties | KING RECORDS, INC., Plaintiff, v. Kenneth R. BENNETT d/b/a KRB Music Companies and KRB Music Companies, Inc., Defendants. |
| Court | U.S. District Court — Middle District of Tennessee |
Jay Scott Bowen, Timothy G. Harvey, Bowen, Riley, Warnock & Jacobson, PLC, Nashville, TN, for Plaintiff.
John A. Barney, Shelley I. Stiles & Associates, Brentwood, TN, S. Ralph Gordon, Gordon, Martin, Jones & Harris, Nashville, TN, Samuel David Lipshie, Colin J. Carnahan, Boult, Cummings, Conners & Berry, Nashville, TN, for Defendants.
Plaintiff King Records, Inc. ("King" or "Plaintiff') filed a three-count Complaint against Defendants Kenneth Bennett ("Bennett"), d/b/a KRB Music Companies and KRB Music Companies, Inc. ("KRB," and together with Bennett, "Defendants") alleging, among other things, copyright infringement in violation of the Copyright Act, 17 U.S.C. § 101 et seq. of numerous re-recordings of popular songs. Count I alleges the copyright infringement of a musical composition entitled "Don't Fall Asleep at the Wheel." Count II alleges copyright infringement of twenty-one sound recordings. Count III alleged the unlawful duplication of forty non copyrightable sound recordings protected under the common law, including claims of unfair competition? conversion, and unjust enrichment, as well as violations of Tenn.Code. Arm. § 39-14-139 and the Lanham Act, 15 U.S.C. § 1125(a).
A bench trial was conducted between July 21, 2003, and July 25, 2003.1 At the start of trial, Plaintiff sought the dismissal without prejudice of the claims in Count III pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure, to which Defendant objected requesting dismissal with prejudice. (See Doc. No. 199, Trial Tr. I at 6, 28-29.) The Court reserved ruling on Plaintiff's motion (Id. at 29), and no evidence was presented regarding the claims in Count III. Each party submitted their proposed findings of fact and conclusions of law (Doc. Nos. 209, 210).
In addition to the ultimate issue, also pending before the Court are the parties' motions in limine and post-trial motions. These are addressed in the contemporaneously filed Memorandum Order. For the reasons set forth below, the Court ENTERS JUDGMENT in favor of Plaintiff and AWARDS Plaintiff $170,000.
King is a Tennessee corporation with its principal place of business in Nashville, Tennessee at 1900 Elm Hill Pike. Prior to September 21, 2001, King was known as Gusto Records, Inc. ("Gusto"). Gayron C. "Moe" Lytle ("Lytle") is the president and sole shareholder of King. King is in the music industry and causes to be manufactured, sells and licenses music records.
Defendant KRB is an Indiana corporation with its principal place of business in Brentwood, Tennessee. Defendant Bennett is KRB's president and sole owner. KRB's primary business is "rack jobbing," which entails placing display fixtures in retail stores and using service representatives to refurbish the inventory in those fixtures. The business at issue in this case is KRB's "rack jobbing" of cassettes and compact discs at Big Lots, a retail store with approximately 1,300 outlets across the country. KRB has been in business for seventeen years and has been the exclusive supplier of music products to Big Lots for most of those seventeen years. Prior to the end of 2002, Big Lots was KRB's biggest customer.
On January 5, 1982, John Riggs and Gary Lumpkin entered into an agreement transferring their rights in the musical composition "Don't Fall Asleep at the Wheel" to Power Play Music (Division of Gusto Records, Inc.) & Moe's Music, located at 1900 Elm Hill Pike, Nashville.2 In addition to the agreement, Messrs. Riggs and Lumpkin executed an agreement entitled "Transfer of Copyright" in which they transferred to Power Play Music (A Division of Gusto Records, Inc.) "all right, title and interest in and to the copyright and all exclusive rights comprised in the copyright, without limitation in the musical composition ... Don't Fall Asleep at the Wheel." (Pl. Ex. 6.) Lytle testified that the original authors of the song created it for Gusto.
Ten years later, a musical composition copyright was registered with the United States Copyright Office ("Copyright Office") in the words and music of "Don't Fall Asleep at the Wheel," effective December 18, 1992. The copyright claimant on the original registration is Power Play Music, Inc., located at 1900 Elm Hill Pike in Nashville. There is no evidence in the record that a corporation entitled Power Play Music, Inc. existed in 1992. There is, however, evidence that a Tennessee corporation entitled Power Play Publishing Company was incorporated on April 11, 1988, and its charter was amended on October 10, 2001 to reflect a name change to Power Play Music, Inc. Lytle was the president and sole shareholder of Power Play Publishing Company, and continues to be the president and sole shareholder of Power Play Music, Inc.
Lytle testified that the copyright claimant should have been "Power Play Music (A Division of Gusto Records, Inc.)" and that the reference to "Power Play Music, Inc." on the registration was a mistake. In an attempt to correct the error on the registration, Lytle executed a series of assignments purporting to assign the copyright in "Don't Fall Asleep at the Wheel" to Gusto, which is now known as Plaintiff King. These assignments utterly fail to create any clarity; instead, riddled with error, they simply enhance the confusion surrounding the copyright claimant of "Don't Fall Asleep at the Wheel."
First, on April 7, 2000, Lytle executed an "Assignment of Copyright" in which GML, Inc. ("GML"), another company of which Lytle is the sole shareholder and an officer, purported to be the "sole owner" of the copyright registration of "Don't Fall Asleep at the Wheel." GML transferred its "rights" to Gusto even though there is no evidence that GML had any rights in "Don't Fall Asleep at the Wheel" to assign to Gusto. This assignment was signed by notary public Carolyn McMinn ("McMinn"). McMinn also completed a "Document Cover Sheet For Recordation of Documents United States Copyright Office." McMinn affirmed that the information she provided on the recordation cover sheet was "a true and correct representation of the accompanying document." The recordation cover sheet, which was recorded with the Copyright Office on October 2, 2000, is not a true and correct representation of the assignment because it incorrectly explains that the assignment is from Power Play Music, Inc. to Gusto, whereas the assignment is actually from GML to Gusto.
Second, again on April 7, 2000, Lytle executed and McMinn notarized another "Assignment of Copyright" in which Power Play Music, Inc. purported to be the. "sole owner" of the copyright registration of "Don't Fall Asleep at the Wheel," and assigned its "rights" to Gusto. There is no evidence that this assignment was recorded with the Copyright Office. There is also no evidence that a company by the name of Power Play Music, Inc. existed on April 7, 2000. This is underscored by the fact that this assignment does not include the standard language in the preamble regarding the state in which Power Play Music, Inc. is incorporated. There is evidence that such a company came into existence on October 10, 2001. As it stands, however, this assignment involves a nonexistent company purporting to have rights in "Don't Fall Asleep at the Wheel," and attempting to assign those rights to Gusto.
Third, on April 16, 2001, Steven Kountzman ("Kountzman"), purported Vice President of Power Play, Inc., executed a third "Assignment of Copyright," which McMinn notarized. In this assignment, Power Play Music, Inc. (not Power Play, Inc.) purported to be the "sole owner" of the copyright registration of "Don't Fall Asleep at the Wheel," and assigned its "rights" to Gusto. There is no evidence that this assignment was recorded with the Copyright Office. There is also no evidence that a company by the name of Power Play, Music, Inc. or Power Play Music, Inc. existed on April 16, 2001. This is underscored by the fact that this assignment does not include the standard language in the preamble regarding the state in which Power Play Music, Inc. or Power Play, Inc. are incorporated. While there is evidence that Power Play Music, Inc. came into existence on October 10, 2001, there is no evidence that Power Play, Inc. ever existed or now exists. This assignment, therefore, involves two non-existent companies, one or both of which are claiming ownership in "Don't Fall Asleep at the Wheel," and attempting to assign their rights to Gusto.
To add to this confusion, Gusto (now known as Plaintiff King) acknowledged in response to Defendants' First Set of Interrogatories, that it was not the registered copyright owner of "Don't Fall Asleep at the Wheel" on August 18, 2000. It was not until June 20, 2003 that Plaintiff provided a supplemental response stating that it was the registered copyright owner of "Don't Fall Asleep at the Wheel." This response was apparently based on Plaintiff's incorrect belief that at least one of the three assignments described above involved the rightful owner of "Don't Fall Asleep at the Wheel" properly assigning its rights to Gusto.
Count II contains a claim of copyright infringement of twenty-one sound recordings.3 The sound recordings are "re-recordings" of popular songs. That is, the artist of a particular song re-records the vocal track of his or her original song for a recording studio for a fee. In the late 1970s Lytle, on behalf of his company Gusto (now known as King), entered a series of contracts with Louis...
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