Bit Parts

The U.S. District Court for the Western District of Michigan, Southern Division, ruled that the exception to the first sale doctrine of the Copyright Act that bars the rental of sound recordings didn't prevent the defendant from repackaging and relabeling the plaintiff's audio books as “library editions” for rent, lease or sale. Brilliance Audio Inc. (BAI) v. Haights Cross Communications Inc., 1:04-CV-396. Under Sec. 109(a) of the Copyright Act: “the owner of a particular copy or phonorecord … is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” Looking at the first-sale exception language of Sec. 109(b)(1)(A), the district court explained that: “the application of the [exception] statute to sound recordings is expressly limited to those containing musical works and does not cover sound recordings of literary works, such as BAI's audiobooks.” The court also ruled that the defendant had properly used BAI's trademark.

The U.S. Court of Appeals for the Ninth Circuit held that popular motorcycle stuntman Evel Knievel wasn't defamed by the caption of a photograph posted on ESPN's Web site. Knievel v. ESPN, 393 F.3d 1068. The photograph, taken at an ESPN awards show, depicted Knievel with one arm around his wife and his other arm around another woman. The caption stated: “Evel Knievel proves that you're never too old to be a pimp.” The photo was posted on EXPN.com, the extreme sports section of ESPN's Web site. Affirming dismissal of the suit, the appeals court noted that use of the word “pimp” had to be considered in the context in which it was used. According to the court: “A reasonable viewer exposed to the main page [of EXPN.com] would expect to find precisely that type of youthful, non-literal language on the rest of the site. … We think that any reasonable viewer would have interpreted the word 'pimp' in the same loose, figurative sense as well. … But even if a viewer had interpreted the word 'pimp' literally, he or she would have certainly interpreted the photograph and caption, in the context in which they were published, as an attempt at humor.” … Film Distribution Agreements/Personal Jurisdiction. The U.S. District Court for the Northern District of Texas, Dallas Division, held that a forum selection clause in a film acquisition agreement to which the plaintiff wasn't a party failed to give the court jurisdiction over defendants who entered into the acquisition contract. Miele v. Blockbuster Inc., 04-CV-1228-BD(P). Plaintiff Patrick Miele and four other individuals formed a California company (LLC) to produce and exploit the film “Rhapsody.” Ron Perlstein, a member of the company, then negotiated an agreement for the California-based Bruder Releasing Inc. (BRI) to negotiate distribution of the film. BRI entered into an acquisition agreement with Blockbuster. The forum clause in the acquisition agreement specified Texas. Miele filed suit in Texas federal district court for a declaratory judgment that BRI lacked the authority to enter into the Blockbuster deal without approval of a majority of the members of Rhapsody LLC. The district court found an actual controversy existed under the Declaratory Judgment Act. But the district court lacked no personal jurisdiction over the BRI defendants because, according to the court: “Although the BRI Defendants purported to enter into the Acquisition Agreement as an agent of Rhapsody, LLC, and plaintiff is a member of the [Rhapsody] Company, that relationship is simply too attenuated to allow plaintiff to enforce the forum selection clause as a nonparty.”

Recording Contracts/Internet