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`-against-
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
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`TERI WOODS PUBLISHING, LLC,
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`Plaintiff,
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`AMAZON.COM, INC., AUDIBLE, INC.,
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`BLACKSTONE AUDIO, INC., and URBAN
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`AUDIO BOOKS, LLC,
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`Defendants.
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`DORA L. IRIZARRY, United States District Judge:
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` MEMORANDUM & ORDER
` 23-cv-507 (DLI) (TAM)
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`On January 24, 2023, Plaintiff Teri Woods Publishing, LLC (“Plaintiff” or “Woods
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`Publishing”) filed this action alleging breach of contract claims against Defendant Urban Audio
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`Books, LLC (“Urban Audio”) and copyright
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`infringement claims against Defendants
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`Amazon.com, Inc. (“Amazon”), Audible, Inc. (“Audible”), Blackstone Audio, Inc. (“Blackstone”)
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`(the three, collectively, “Downstream Defendants”), and Urban Audio (the four, collectively,
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`“Defendants”). See, Compl., Dkt. Entry No. 1. Specifically, Woods Publishing alleges that Urban
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`Audio breached the terms of a copyright license agreement between them for the production and
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`distribution of audiobooks based on Woods Publishing’s copyrighted works and the implied
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`covenant of good faith and fair dealing. Plaintiff further alleges that all Defendants infringed on
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`Woods Publishing’s copyrights, and Urban Audio and Blackstone allowed others to infringe those
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`copyrights as well. Compl. at ¶¶ 1-2, 65-94. Plaintiff invokes the Court’s original federal question
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`jurisdiction relating to the copyright claims, and its supplemental jurisdiction over the state law
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`contract claims as related to the federal claims. Id. at ¶ 15; See, 28 U.S.C. §§ 1331 and 1338; U.S.
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`Copyright Act of 1976, 17 U.S.C. §§ 101 et. seq.; and 28 U.S.C. § 1367(a), respectively.
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`Downstream Defendants moved to dismiss the Complaint for failure to state a claim
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 2 of 16 PageID #: 518
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`pursuant to Fed. R. Civ. P. Rule 12(b)(6) as did Urban Audio. “Downstream Mot.”, Dkt. Entry No.
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`27; “UAB Mot.”, Dkt. Entry No. 29. Plaintiff separately opposed each motion. Pl.’s Opp’n to
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`Downstream Mot. (“Opp’n to DS”), Dkt. Entry No. 35; Pl.’s Opp’n to UAB Mot. (“Opp’n to
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`UAB”), Dkt. Entry No. 36. Defendants replied in support of their respective motions. Reply in
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`Supp. of Downstream Mot. (“Downstream Reply”), Dkt. Entry No. 37; Reply in Supp. of UAB
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`Mot. (“UAB Reply”), Dkt. Entry No. 38.
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`For the reasons set forth below, Defendants’ motions are granted as to the federal claims;
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`the Court declines to exercise its supplemental jurisdiction, and this action is dismissed.
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`I.
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`The Parties
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`BACKGROUND1
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`Plaintiff, the publishing company for author Teri Woods, is a New York limited liability
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`company, with its “principal office” at 19834 Hopkins Road, Lewes, Delaware. Compl. at ¶¶ 1,
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`10. It owns or is the exclusive licensee of the copyrights to Teri Wood’s books and the books of
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`other authors. Id. at ¶¶ 22, 25.
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`Defendant Urban Audio is a New York limited liability company with its principal place
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`of business at 144 North 7th Street #255, Brooklyn, New York 11249. Compl. at ¶ 14. Defendant
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`Amazon is a Delaware Corporation, with its principal place of business at 410 Terry Avenue North,
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`Seattle, Washington 98109-5210. Securities and Exchange Commission, Amazon 2022 Annual
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`Report,
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`https://s2.q4cdn.com/299287126/files/docfinancials/2023/ar/Amazon-2022-Annual-
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`Report.pdf; Compl. at ¶ 11. Defendant Audible, a subsidiary of Amazon, is a Delaware
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`corporation with its principal place of business in Newark, New Jersey. Compl. at ¶ 12. Defendant
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`1 The following facts are taken from the Complaint and any documents incorporated therein or that the parties are
`presumed to have knowledge of, and are accepted as true as they must at this stage of the case.
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`2
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 3 of 16 PageID #: 519
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`Blackstone is an Oregon corporation with its principal place of business in Ashland, Oregon. Id.
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`at ¶ 13. All the Defendants operate audiobook subscription streaming services. Id. at ¶ 4.
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`II.
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`The Agreement
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`On December 19, 2018, in Brooklyn, New York, Woods Publishing and Urban Audio
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`entered into a License Agreement (“Agreement”) for the creation and distribution by Urban Audio
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`of readings of twenty (20) of Woods Publishing’s titles (“Licensed Works”). Id. at ¶ 25; License
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`Agreement (“Agrmt.”), Dkt. Entry No. 1-1. Woods Publishing represented and warranted that it
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`was “the sole and exclusive owner of the copyright and literary rights pertaining to the literary
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`works(s) and title(s)” governed by the Agreement. Agrmt. at 1.
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`At issue are the rights licensed to Urban Audio and the remuneration due Woods Publishing
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`specifically under Sections I and II of the Agreement. Compl. at ¶¶ 25, 26, 45; Agrmt. at § I
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`(“Rights Section”) and § II (“Royalties Section”). In the Rights Section, Woods Publishing
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`granted to Urban Audio the:
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`“exclusive unabridged audio publishing rights, to manufacture, market, sell and
`distribute copies throughout the World, and in all markets, copies of unabridged
`readings of the [Licensed Works] on cassette, CD, MP3-CD, pre-loaded devices,
`as Internet downloads and on, and in, other contrivances, appliances, mediums and
`means (now known and hereafter developed) which are capable of emitting sounds
`derived for the recording of audiobooks.”
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`Agrmt. at § I.
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`Subsection 1 of the Royalties Section sets forth the compensation Urban Audio will pay
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`Woods Publishing on the receipts generated by the audiobooks:
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`“As consideration for the aforementioned rights and License granted by Licensor
`to Licensee, Licensee shall pay to Licensor a sum equivalent to:
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`(a) Ten percent (10%) of Licensee's net receipts from catalog, wholesale
`and other retail sales and rentals of the audio recordings of said literary work;
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`(b) Twenty Five percent (25%) of net receipts on all internet downloads of
`said literary work.
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`3
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 4 of 16 PageID #: 520
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`(c) Twenty Five percent (25%) of net receipts on Playaway format [under
`certain conditions].”
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`Id. at § II. 1. 2 Subsection 2 of the Royalties Section defines “net receipts” for purposes of the
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`Agreement, as well as the procedure for providing payment and a statement of sales and royalties
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`semi-annually. Id. Net receipts are “actual cash proceeds received by [Urban Audio], after
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`deducting a twenty percent (20%) reserve, returns, discounts and allowances, and sales taxes,
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`shipping and handling charges which may be included in the sales or rental prices, but without
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`deductions of any other kind.” Id. The Agreement further provides that it is to be governed by
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`the laws of the State of New York and that the parties “submit to the jurisdiction of the Courts of
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`the State of New York.” Id at 3.
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`III. Distribution of the Licensed Works on Subscription Streaming Platforms
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`This dispute arises out of Defendants’ distribution of the Licensed Works as digital streams
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`via their subscription streaming platforms. Compl. at ¶¶ 2-4. After signing the Agreement in late
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`2018, Urban Audio initially “did not distribute any Licensed Works as digital streams.” Id. at ¶
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`30. Sometime in 2020, this changed, and Defendants began distributing the audiobooks as digital
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`streams. Id. at ¶ 31. Around the same time, sales of the Licensed Works “substantially increased,”
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`while Plaintiff’s “royalties plummeted.” Id.
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`Woods Publishing attributes these trends to Defendants’, especially Amazon’s and
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`Audible’s, subscription payment model for their streaming services. Id. at ¶¶ 37-42, 46-53.
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`Specifically, Plaintiff alleges that features of Amazon’s and Audible’s payment model distribute
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`the Licensed Works for free to their subscribers. Id. According to Plaintiff, Defendants distributed
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`the Licensed Works without charging adequate prices by allowing subscribers to use credits, which
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`2 None of the parties contend that the Playaway format or its sales are relevant to the dispute here. The use of the term
`“format,” however, is useful in characterizing the list in Section I for purposes of this discussion.
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`4
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 5 of 16 PageID #: 521
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`were provided at the time of initial subscription and monthly thereafter, to obtain the works
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`permanently. Id. at ¶ 39. Plaintiff, in turn, received only a fraction of the listed retail price of the
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`Licensed Works. Id. at ¶¶ 32-33. This distribution was alleged to be ongoing at the time the
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`Complaint was filed. Id. at ¶ 25.
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`Plaintiff further alleges that the subscription streaming model violates the Agreement by
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`allowing fractional distributions of the Licensed Works through Amazon’s and Audible’s use of
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`“Qualified Listens” to calculate the royalty payments from digital streams of works. Id. at ¶¶ 43-
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`45. According to an email from Urban Audio quoted in the Complaint, when a subscriber listens
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`to more than five minutes of a Licensed Work, this constitutes a “Qualified Listen.” Id. at ¶ 44.
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`Amazon and Audible then use the total minutes of Qualified Listens to calculate their royalty
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`payments to Woods Publishing. Id. Plaintiff argues that this violates the Agreement because the
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`Agreement does not permit distribution of abridged readings. Id. at ¶¶ 44-45.
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`Finally, Plaintiff alleges that Urban Audio and Blackstone have similar audiobook
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`subscription streaming services. Id. at ¶¶ 46-47. Both of these Defendants offer subscriptions
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`where subscribers receive monthly credits that they can redeem for an audiobook. Id. at ¶¶46-51.
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`The same problems regarding underpayment of royalties resulted. Id. at ¶ 52.
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`I.
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`Legal Standard
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`DISCUSSION
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`To survive a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a
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`complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
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`550 U.S. 544, 570 (2007). The plausibility standard “does not require ‘detailed factual
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`allegations,’ but it demands more than . . . unadorned, the-defendant-unlawfully-harmed-me
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`accusation[s].” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).
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`5
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 6 of 16 PageID #: 522
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`In deciding a motion to dismiss pursuant to Rule 12(b)(6), the court accepts as true all well
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`pled factual allegations and draws all reasonable inferences in the plaintiff’s favor. LaFaro v. N.Y.
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`Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d Cir. 2009) (citations omitted). Nevertheless,
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`“threadbare recitals of the elements of a cause of action” that are supported by “conclusory”
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`statements and mere speculation are inadequate and subject to dismissal. Chavis v. Chappius, 618
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`F.3d 162, 170 (2d Cir. 2010) (internal quotation marks and citation omitted); See also, Iqbal, 556
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`U.S. at 678 (“[T]he tenet that a court must accept as true all of the allegations contained in a
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`complaint is inapplicable to legal conclusions. . . . Pleadings that are no more than conclusions
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`are not entitled to the assumption of truth.”) (internal quotation marks and modifications omitted).
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`The court’s duty “is merely to assess the legal feasibility of the complaint, not to assay the weight
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`of the evidence which might be offered in support thereof.” DiFolco v. MSNBC Cable LLC, 622
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`F.3d 104, 113 (2d Cir. 2010).
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`“In general, the review is limited to the facts as asserted within the four corners of the
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`complaint, the documents attached to the complaint as exhibits, and any documents incorporated
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`in the complaint by reference.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir.
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`2007). While the Court generally considers only facts alleged in the complaint or contained in
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`documents attached or incorporated by reference, other facts and documents can “be appropriately
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`considered if [they are those] upon which the complaint solely relies and [are] integral to the
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`complaint.” Lohan v. Perez, 924 F. Supp.2d 447, 453 (E.D.N.Y. 2013) (modifications, quotations,
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`and internal citation omitted). “The Court may properly consider ‘documents either in plaintiffs’
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`possession or of which plaintiffs had knowledge and relied on in bringing suit.’” Spinnato v. Unity
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`of Omaha Life Ins. Co., 322 F. Supp.3d 377, 399 (E.D.N.Y. 2018) (quoting Brass v. Am. Film
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`Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993)).
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`6
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 7 of 16 PageID #: 523
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`II.
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`Choice of Law
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`The Court must determine which state’s law to apply here. Schwimmer v. Allstate Ins. Co.,
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`176 F.3d 648, 650 (2d Cir. 1999). A federal court exercising supplemental jurisdiction must apply
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`choice of law rules of the forum state and New York law gives full effect to the choice of law
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`provision in a contract. Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 672 F.3d 155, 157
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`(2d Cir. 2012) (citing Rogers v. Grimaldi, 875 F.2d 994, 1002 (2d Cir.1989)). Krock v. Lipsay, 97
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`F.3d 640, 645 (2d Cir.1996). Here, New York law applies to the interpretation of the Agreement
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`and the breach of contract claims because: (1) the Agreement states that it “shall be construed and
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`enforced in accordance with the laws of New York;” (2) the parties have not raised a choice of law
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`issue; and (3) both parties rely on New York law in support of their respective positions. See,
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`Agreement at 3; See also, Tehran-Berkeley Civil & Envtl. Engineers v. Tippetts-Abbett-McCarthy-
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`Stratton, 888 F.2d 239, 242 (2d Cir. 1989) (finding implied consent to use a forum’s law where
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`parties’ briefs relied on New York law).
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`III. Analysis
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`At the heart of this dispute lies the scope of the Agreement and whether Defendants were
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`permitted to distribute the Licensed Works as digital streams via their subscription streaming
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`platforms. Plaintiff contends Defendants exceeded the scope of the Agreement thereby violating
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`its copyrights and materially breaching the contract. See generally, Compl. Defendants counter
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`that that their activities were within the Agreement’s ambit. See, Downstream Mot. at 1-2; UAB
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`Mot. at 1-2.
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`Section XI(3) of the Agreement allows Urban Audio to assign the Agreement and “any or
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`all of the rights granted to it.” Agrmt. at 3. It is undisputed that, under this Section, Urban Audio
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`validly could assign any of the rights within the Agreement’s scope to Blackstone and Blackstone,
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`7
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 8 of 16 PageID #: 524
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`who, in turn, could assign these rights. Thus, the Court’s analysis hinges on the terms of the
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`Agreement as the existence of a valid license, which Defendants argue they held, is a complete
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`defense to a copyright violation claim. See, Spinelli v. Nat'l Football League, 903 F.3d 185, 197
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`(2d Cir. 2018) (“Disputes involving the scope of a license present courts with a question of
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`contract.”). Consequently, the fundamental question is whether the Agreement conferred the right
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`to Urban Audio to distribute recordings of the Licensed Works via its subscription streaming
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`format.
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`A.
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`Direct Copyright Infringement Against all Defendants
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`Defendants maintain that Plaintiff’s claims of copyright infringement must be dismissed
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`primarily because Defendants’ activities were within the scope of the Agreement.3 UAB Mot. at
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`5-8; Downstream Mot. at 5-7. Two elements must be established to support a copyright
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`infringement claim: “(1) ownership of a valid copyright; and (2) infringement on the copyright by
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`defendant[s].” Spinelli, 903 F.3d at 197. (quotations omitted). While an exclusive licensee of
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`copyrighted works might breach the contract conferring those rights, it “cannot be liable for
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`infringing the copyright rights conveyed to it.” U.S. Naval Inst. v. Charter Commc'ns, Inc., 936
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`F.2d 692, 695 (2d Cir. 1991). If possession of a license is not in dispute, the copyright owner bears
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`the burden of showing that the activities exceeded the scope of the license. Bourne v. Walt Disney
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`Co., 68 F.3d 621, 631 (2d Cir. 1995).
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`In determining the meaning of a contract, the Court “look[s] to all corners of the document
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`rather than view sentences or clauses in isolation.” Int'l Klafter Co. v. Cont'l Cas. Co., 869 F.2d
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`96, 99 (2d Cir.1989) (internal quotation marks omitted). The “primary objective is to give effect
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`3 Urban Audio also moves to dismiss claims of copyright infringement as to fourteen (14) of the Licensed Works on
`standing grounds alleging Plaintiff does not own the copyright to those works and did not provide sufficient factual
`allegations to establish its exclusive license to those works. UAB Mot. at 8-10. For the reasons discussed below, the
`Court need not reach or decide this argument to resolve the instant motions.
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`8
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 9 of 16 PageID #: 525
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`to the intent of the parties as revealed by the language they chose to use.” Bolt Elec., Inc. v. City
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`of New York, 223 F.3d 146, 150 (2d Cir. 2000). Courts “must give ‘effect and meaning . . . to
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`every term of [a] contract’ and strive ‘to harmonize all of its terms.’” Spinelli, 903 F.3d at 200
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`(quoting India.Com, Inc. v. Dalal, 412 F.3d 315, 323 (2d Cir. 2005)). “Interpretations ‘that render
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`provisions of a contract superfluous’ are particularly disfavored.” Id. (quoting Int'l Multifoods
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`Corp. v. Commercial Union Ins. Co., 309 F.3d 76, 86 (2d Cir. 2002).
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`Under New York law, interpretation of an unambiguous contract is a question of law for
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`the Court to decide without extrinsic evidence. Id. However, “if ‘the intent of the parties can[not]
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`be ascertained from the face of their agreement,’ the contract is ambiguous and its interpretation
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`presents a question of fact.” Id. (quoting Postlewaite v. McGraw-Hill, Inc., 411 F.3d 63, 67 (2nd
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`Cir. 2005). “Contract language is unambiguous when it has ‘a definite and precise meaning,
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`unattended by danger of misconception in the purport of the [contract] itself, and concerning which
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`there is no reasonable basis for a difference of opinion.’” Revson v. Cinque & Cinque, P.C., 221
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`F.3d 59, 66 (2d Cir. 2000) (quoting Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277
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`(2d Cir.1989)) (changes in original). On the other hand, “[a]mbiguous language is language that
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`is ‘capable of more than one meaning when viewed objectively by a reasonably intelligent person
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`who has examined the context of the entire integrated agreement and who is cognizant of the
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`customs, practices, usages and terminology as generally understood in the particular trade or
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`business.’” Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 66 (2d Cir. 2000) (quoting Seiden
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`Associates v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir.1992)).
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`Here, the Agreement captures the parties’ clear intent to grant Urban Audio broad rights to
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`publish and monetize unabridged copies of audio recordings of the Licensed Works. While the
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`Court has considered the contract as a whole, of particular relevance to this dispute are the Rights
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`9
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 10 of 16 PageID #: 526
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`Section and Royalties Section of the Agreement, which contain the essential elements of the
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`exchange between Woods Publishing and Urban Audio. See, Int'l Klafter Co. v. Cont'l Cas. Co.,
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`869 F.2d 96, 99 (2d Cir.1989) (courts must review contracts as a whole).
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`The Rights Section sets out the rights Woods Publishing grants Urban Audio under the
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`Agreement, specifically, the “exclusive unabridged audio publishing rights to manufacture,
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`market, sell and distribute copies” of the Licensed Works. Agreement § I. As to the delivery
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`method or format of these copies, the Agreement’s language is expansive, anticipating future
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`technological developments, and encompassing “cassette, CD, MP3-CD, pre-loaded devices, as
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`Internet downloads and on, and in, other contrivances, appliances, mediums and means (now
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`known and hereafter developed).” Id.
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`The Downstream Defendants contend that streaming services are included in the phrase
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`“Internet downloads,” while Plaintiff disagrees. Downstream Mot. at 5-7; Opp’n to DS at 11
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`(referring to internet downloads in the context of Agreement subsection II(1)). Even assuming,
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`arguendo, that “Internet downloads” does not include services like those Defendants provide,
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`streaming services still would fall within the phrase “other contrivances, appliances, mediums and
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`means (now known and hereafter developed).” Agreement at § I (emphasis added). There is no
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`dispute that audio streaming via the internet was a technology in use at the time of the Agreement
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`and, as such, the Court finds that streaming is encompassed in Section I of the Agreement.
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`Moreover, under the approach utilized in this Circuit, the phrase “other contrivances, appliances,
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`mediums and means (now known and hereafter developed)” includes streaming technology and
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`there is no reasonable reading of that phrase that might exclude it. See, e.g., Boosey & Hawkes
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`Music Publishers, Ltd. v. Walt Disney Co., 145 F.3d 481, 486-87 (2d Cir. 1998) (discussing
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`approach to “new use” cases).
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`10
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 11 of 16 PageID #: 527
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` Plaintiff makes no attempt to dispute this, but instead puts forth two arguments as to why
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`aspects of Defendants’ distribution model violate other language contained in the Agreement.
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`Opp’n to DS at 9. First, Plaintiff contends that the terms of the Royalties Section prohibit
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`Defendants’ subscription streaming services, specifically asserting that this distribution model is
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`not contemplated by the Agreement. Opp’n to UAB at 9-14; Opp’n to DS at 10; See, Int'l Klafter
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`Co., 869 F.2d at 99. Essentially, Plaintiff contends that subscription streaming revenue does not
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`fit clearly into one of the Royalties Section’s three listed revenue buckets, i.e., that: (1) a
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`subscription streaming service is not a catalog, wholesale and other retail sales or rentals for
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`purposes of clause (a); (2) streaming is not an internet download for purposes of clause (b); and
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`(3) it is not encompassed in Playaway format sales in clause (c). Opp’n to DS at 10-14. The
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`parties agree that subscription streaming services should not be encompassed in Playaway format
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`sales. See, Opp’n to DS at 10; Downstream Mot. at 7. According to Plaintiff’s logic, clause (a)
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`or clause (b) must encompass distribution of the Licensed Works via a subscription streaming
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`service, otherwise Defendants have committed copyright infringement.
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`However, it is unnecessary for the Court to decide how Plaintiff should be compensated
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`for digital streams under the Royalties Section because the copyright claims must be dismissed
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`based on the Court’s finding that distribution of the Licensed Works on Defendants’ subscription
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`streaming platforms was, in fact, within the scope of the Agreement as discussed further below.
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`Plaintiff relies on Spinelli for its position, but it misinterprets the Circuit’s findings in that
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`case. Opp’n to DS at 16-18. As in this case, Spinelli involved a license agreement concerning
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`copyrighted materials, although Spinelli involved photographs. In Spinelli, the Circuit concluded
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`that the defendants’ interpretation of the agreement, which would have allowed them to license
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`plaintiffs’ photographs without paying plaintiff any royalties so long as compensation for the
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`11
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 12 of 16 PageID #: 528
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`photographs was not paid on a per-image basis, was “manifestly at odds with what the parties
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`intended,” making the contract ambiguous. Spinelli, 903 F.3d at 201. The Circuit agreed with the
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`plaintiff’s interpretation that the license did not permit the sublicensing of plaintiff’s photographs
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`on anything other than a per-image basis and, thus, the licensee had acted beyond the scope of the
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`license. Id. at 202.
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`Here, the Agreement differs from the agreement in Spinelli because the Royalties Section
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`does not require Plaintiff to be compensated only on a per-book basis. The only mention in the
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`Agreement of requiring payment on a per unit basis is in clause II(1)(c) dealing with Playaway
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`format sales. As noted previously, the parties agree that streaming could not be categorized as
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`Playaway format sales. See, Opp’n to DS at 10. However, this explicit language requiring
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`payment on a per unit basis in this subsection notably is absent in the preceding two clauses,
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`Sections II(1)(a) and II(1)(b), and elsewhere in the Agreement.
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`The parties clearly knew how to specify when payment was due on a per unit basis. The
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`omission of such terminology in reference to other revenue channels, or in the definition of net
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`receipts, indicates that the parties intended no such requirement. See, Waldman ex rel. Elliott
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`Waldman Pension Tr. v. Riedinger, 423 F.3d 145, 150 (2d Cir. 2005) (finding the terms of an
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`agreement unambiguous where groups excluded from settlement agreement could have been
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`specified, but were not). Thus, when considered in its entirety, the Royalties Section contains no
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`implied restriction to per unit sales comparable to that which dictated the outcome in Spinelli.
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` Other sections of the Agreement support this conclusion. Section III obligates the
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`Licensee to maintain “complete records which detail all sales, rentals, transactions, receipts, and
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`expenses.” Agrmt. at § III. By adding “transactions” and “receipts” to sales and rentals, this
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`indicates the parties contemplated a broader range of revenue models than Plaintiff’s per unit basis
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`12
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 13 of 16 PageID #: 529
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`for compensation. Spinelli, 903 F.3d at 200 (courts must give effect to every term of a contract).
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`Revenue from subscription fees for streaming logically would fit within the ambit of “transactions”
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`and/or “receipts.”
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`Plaintiff’s argument that the Royalties Section prohibits subscription streaming services
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`cannot be reconciled with a comprehensive reading of the entire Agreement. Despite Plaintiff’s
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`allegation that “[Urban Audio] agreed to pay [Woods Publishing] royalties on a per unit basis,” no
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`such promise exists in the Agreement. See, Compl. at ¶ 26. Defendants were within the scope of
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`the Agreement when they distributed the Licensed Works on their subscription streaming services
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`and Plaintiff’s arguments do not persuasively narrow the scope of the license granted by the
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`Agreement. While distribution of the Licensed Works via subscription streaming service may not
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`have been explicit in the Agreement, its unambiguous terms encompass that right.
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`Ultimately, Plaintiff’s arguments fail because they are contrary to the plain meaning of the
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`phrase “other contrivances, appliances, mediums and means (now known and hereafter
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`developed),” which would include digital streams and other future technological developments in
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`distribution services and is contrary to the law of this Circuit as discussed above.
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`Second, Plaintiff argues that Defendants have allowed the Licensed Works to be distributed
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`in an abridged format, via “listens” shorter than five minutes, in violation of the express terms of
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`the Rights Section, specifically the restriction of rights to unabridged copies of the Licensed
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`Works. Opp’n to DS at 14-15. This argument fails because the Complaint does not allege
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`plausibly that Defendants distributed abridged copies of the works.
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`Abridge and abridgment have similar meanings according to Black’s Law Dictionary,
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`which defines abridge as “[t]o condense (as a book or other writing),” and abridgment as “[a]
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`condensed version of a longer work”. Black’s Law Dictionary 10th Edition. The Complaint does
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 14 of 16 PageID #: 530
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`not allege any facts to support the proposition that any of the Defendants produced versions of the
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`Licensed Works that were condensed or otherwise altered from the original in any way. The fact
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`that a listener could choose to listen to less than the entire book, does not make the copy “abridged”
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`in violation of the Agreement.
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`The Court finds that the Agreement unambiguously granted Urban Audio the right to
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`distribute the Licensed Works through subscription streaming services. Urban Audio’s subsequent
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`sublicense of this right to the Downstream Defendants also was in accord with the Agreement.
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`Therefore, Defendants’ motions to dismiss Count III of the Complaint are granted.
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`B.
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`Secondary Copyright Infringement Against Urban Audio and Blackstone
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`“A contributory infringer is ‘one who, with knowledge of the infringing activity, induces,
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`causes or materially contributes to the infringing conduct of another.’” EMI Christian Music Grp.,
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`Inc. v. MP3tunes, LLC, 844 F.3d 79, 99–100 (2d Cir. 2016) (quoting Gershwin Publ'g Corp. v.
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`Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971)). However, “an exclusive
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`licensee of any of the rights comprised in the copyright, though it is capable of breaching the
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`contractual obligations imposed on it by the license, cannot be liable for infringing the copyright
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`rights conveyed to it. “ U.S. Naval Inst. v. Charter Commc'ns, Inc., 936 F.2d 692, 695 (2d Cir.
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`1991) (citing Fantastic Fakes, Inc. v. Pickwick International, Inc., 661 F.2d 479, 483–84 (5th Cir.
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`Unit B 1981) and 3 M. Nimmer & D. Nimmer, Nimmer On Copyright, § 12.02 at 12–29 (1990)
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`(“[o]nce the copyright owner grants an exclusive license of particular rights, only the exclusive
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`licensee and not his grantor may sue for later occurring infringements of such rights.”). As
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`discussed above, the Agreement granted expansive audio publishing rights to the Licensed Works
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`to Urban Audio. See, Section A supra. The rights were fully assignable. See, Agreement at XI(3).
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`It is undisputed that Urban Audio assigned the rights to Blackstone and Blackstone who, in turn,
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`Case 1:23-cv-00507-DLI-TAM Document 48 Filed 03/30/24 Page 15 of 16 PageID #: 531
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`sublicensed the rights to Amazon and Audible.
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`The Court has determined that Defendants did not exceed the scope of the Agreement’s
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`license. As such, Plaintiff has no claim for secondary copyright infringement on the Licensed
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`Works against Urban Audio or Blackstone. Therefore, Defendants’ motions to dismiss Count IV
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`of the Complaint are granted.
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`C.
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`Breach of Contract and the Implied Covenant of Good Faith and Fair Dealing
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`Plaintiff’s remaining claims, breach of contract by Urban Audio (Count I) and breach of
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`the implied covenant of good faith and fair dealing by Urban Audio (Count II), sound in New York
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`law of contract. As the Complaint alleged related violations of federal copyright law, Plaintiff
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`properly invoked the Court’s supplemental jurisdiction over these claims pursuant to 28 U.S.C. §
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`1367(a). Compl. at ¶ 15. However, the Court declines to exercise its supplemental jurisdiction
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`pursuant to 28 U.S.C. § 1367(c)(3).
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`The Court has balanced the following factors in reaching its decision not to exercise its
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`supplemental jurisdiction: (1) the federal copyright law claims are dismissed; (2) this case is in its
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`very early stages, i.e, Defendants have not interposed an answer to the Complaint, and discovery
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`barely has begun, if any at all has been conducted to date (See, Minute Entry for Status Conf.
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`before Magistrate Judge on Feb. 22, 2024); (3) the agreement contemplates the application of New
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`York law; and (4) the remaining claims sound in New York contract law. The Court has
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`“balance[d] the traditional ‘values of judicial economy, fairness, and comity [] in deciding whether
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`to exercise jurisdiction.” Kolari v. New York-Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006)
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`(citations omitted). “In weighing these factors, the district court is aided by the Supreme Court's
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`additional guidance