Cameo Clips

A plaintiff should be allowed to amend its copyright infringement complaint to add a claim for infringement of a pre-existing work, the U.S. District Court for the Southern District of New York decided. Twisted Records Inc. v. Rauhofer, 03 Civ. 2644 (DF). Twisted Records hired music producer Peter Rauhofer, who signed a work-for-hire agreement, to remix the composition “Dark Beat.” Twisted later sued Rauhofer for allegedly publicly performing the remix without permission, distributing a copy and listing the remix on Rauhofer's Web site. After the district court ruled that it had federal jurisdiction over the case, Twisted moved to amend its complaint to add infringement of the pre-existing “Dark Beat” on the ground that the U.S. Copyright Office had found the record label's copyright registration application for the pre-existing work. (The Copyright Office initially lost the application.) Rauhofer argued that allowing Twisted to amend its complaint would result in undue prejudice and delay. But the district court noted, “The mere fact that discovery has concluded, however, does not provide a reason for denying leave to amend, especially where the new claim arises from the same set of operative facts as the original claims. … Twisted apparently did not receive notification until March 25, 2004 that its copyright registration certificate would be issued, and Twisted filed its motion to amend the complaint less than 1 month after.”

A pending application for copyright registration was insufficient to establish federal jurisdiction over an infringement claim, a Manhattan federal district court held. Greene v. Columbia Records/Sony Music Entertainment Inc., 03 Civ. 4333 (RJH) (DF). James Anthony Greene filed suit alleging that a composition of his had been used without permission on the defendants' album “Make It Reign,” by Lord Tariq and Peter Gunz. The district court determined that it lacked subject matter jurisdiction over the complaint, noting: “The plain language of Section 411(a) [of the Copyright Act] indicates that a federal district court lacks subject matter jurisdiction over a claim for federal copyright infringement until the Copyright Office has approved or refused the pending application for copyright registration. … Although a few courts in this Circuit have determined that a pending application for copyright registration is sufficient to give a district court jurisdiction over an infringement claim, see, eg, Lennon v. Seaman, 63 F. Supp. 2d 428, 432 (S.D.N.Y. 1999), the court finds those cases unpersuasive to the extent that they conflict with the plain language of Section 410 and Section 411.”

The principal of a company formed to produce a film in Canada was the alter ego of the company for purposes of an action against him to recover Canadian tax credits owed the plaintiff distributor, the Court of Appeal of California, Second Appellate District, Division Four, ruled. Artisan Entertainment Inc. v. Castravelli, B162751. Claudio Castravelli, the principal of Arrival 2 Productions Inc., entered into an agreement to give Artisan's predecessor the distribution rights to the film “Arrival 2.” Under the deal, Artisan's predecessor agreed to give Arrival a $3 million advance in exchange for an assignment of the Canadian production tax credits as security. When Artisan sued Castravelli individually to collect the tax credits, the L.A. Superior Court granted summary judgment in favor of Artisan. Affirming in an unpublished opinion, the court of appeal emphasized: “When the Canadian tax proceeds were received by Arrival, rather than transferring them to either the Lenders or respondent [Artisan], as the contracts provided, appellant [Castravelli] caused the proceeds to be transferred between and among the various entities in which he was involved for the production of other projects … When respondent demanded that the corporate entities live up to their contractual duty to transfer the Canadian tax proceeds to respondent, appellant placed those entities into bankruptcy. Respondent argues that appellant's admission that he feared personal liability to repay Artisan and appellant's treatment of Arrival's corporate assets (ie, the Canadian tax credits) as if they were appellant's own funds constituted 'a prototypical misuse and disregard of a corporation's supposedly separate status.' We agree.”