Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 1 of 18
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 1 of 18
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`OPINION AND ORDER
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`07 Civ. 8233 (SAS)
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF NEW YORK
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`RICHARD REINHARDT (p/k/a RICHIE
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`RAMONE and RICHIE BEAU),
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`Plaintiff,
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`- against -
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`WAL—MART STORES, INC., APPLE, INC.,
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`REALNETWORKS, INC., ESTATE OF
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`JOHN CUMMINGS (a/k/a JOHN RAMONE
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`and JOHNNY RAMONE), TACO TUNES,
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`INC., RAMONES PRODUCTIONS, INC.,
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`HERZOG & STRAUSS, and IRA HERZOG,
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 1 of 18
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`OPINION AND ORDER
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`07 Civ. 8233 (SAS)
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF NEW YORK
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`RICHARD REINHARDT (p/k/a RICHIE
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`RAMONE and RICHIE BEAU),
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`Plaintiff,
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`- against -
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`WAL—MART STORES, INC., APPLE, INC.,
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`REALNETWORKS, INC., ESTATE OF
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`JOHN CUMMINGS (a/k/a JOHN RAMONE
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`and JOHNNY RAMONE), TACO TUNES,
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`INC., RAMONES PRODUCTIONS, INC.,
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`HERZOG & STRAUSS, and IRA HERZOG,
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`Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 2 of 18
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 2 of 18
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`and Ramones Productions. Defendants have moved to dismiss the Amended
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`Complaint pursuant to Rule l2(b)(l) of the Federal Rules of Civil Procedure for
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`lack of subject matter jurisdiction and pursuant to Rule l2(b)(6) for failure to state
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`a claim upon which relief can be granted. For the following reasons, the motion to
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`dismiss for failure to state a claim is granted and the case is dismissed.
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`II.
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`BACKGROUND
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`A.
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`Facts‘
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`Richard Reinhardt was a member of the punk band the Ramones2
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`from 1983 to 1987.3 During that time he authored six songs — Smash You,
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`Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 3 of 18
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 3 of 18
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`Now, and (You) Can ’t Say Anything Nice (the “Compositions”).4 He was the sole
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`author of each Compositions Reinhardt filed copyright registration applications
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`for the Compositions with the U.S. Copyright Office sometime before the
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`Complaint was f1led.6
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`In 1984, Reinhardt entered into a recording agreement (“Recording
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`Agreement”) with Ramones Productions] a corporation engaged in the business of
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`“exploiting” the intellectual property, merchandise, and other products associated
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`with the Ramones.8 The Recording Agreement provided for Ramones Productions
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`to “engage Plaintiff to record with the Ramones.”9 The Recording Agreement also
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`Taco Tunes is a corporation engaged in the business of “exploiting
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`musical compositions owned by certain members of the Ramones.”” The
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`Recording Agreement “contemplates” a music publishing agreement between
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`Reinhardt and Taco Tunes, but no terms were ever agreed to and no contract was
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`completed.”
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`Wal-Mart Stores, Inc. (“Wal-Mart”), Apple, Inc. (“Apple”), and
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`RealNetworks, Inc. (“RealNetw0rks”), are businesses which, inter alia, distribute
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`sound recordings and other digital media over the Internet and in other electronic
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`forms.” Taco Tunes authorized these defendants to electronically distribute and
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`lead man, who was known professionally as Johnny Ramone.‘8 These defendants,
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`along with Ramones Productions, have controlled in whole or in part, the policies
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`and operations of Taco Tunes for over twenty years.”
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`B.
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`Procedural History
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`Reinhardt filed suit against Defendants on September 21, 2007, for
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`copyright infringement and brought an additional claim against the Estate of John
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`Cummings, Herzog, Herzog & Strauss, and Ramones Productions for contributory
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`infringement of his copyrights. He seeks damages as well a declaratory judgement
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`that he, and not Ramones Productions or Taco Tunes, is the sole owner of all the
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 6 of 18
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`the Compositions under the Express License.”2‘
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`III. APPLICABLE LAW
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`A.
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`Rule 12(b)(1) — Subject-Matter Jurisdiction
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`Federal courts have original and exclusive jurisdiction over cases
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`arising under the Copyright Act.” However, a case does not automatically fall
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`within the jurisdiction of the federal courts simply because it concerns a
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`copyright.” If the dispute is about the ownership of a copyright, and turns on the
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`interpretation of a contract, then no federal question is presented. Unless the
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`complaint asserts a remedy expressly granted by the Copyright Act, such as
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 7 of 18
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`Civil Procedure l2(b)(6), the court must “accept as true all of the factual
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`allegations contained in the complaint
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`and “draw all inferences in the light most
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`3726
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`favorable to the non—moving party .
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`.
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`.
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`.”27 Nevertheless, the court need not accord
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`“[l]egal conclusions, deductions or opinions couched as factual allegations .
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`.
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`. a
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`presumption of truthfulness.”28
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`In deciding a motion to dismiss, the court is not limited to the face of
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`the complaint, but “may [also] consider any written instrument attached to the
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`complaint, statements or documents incorporated into the complaint by reference,
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`.
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`.
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`. and documents possessed by or known to the plaintiff and upon which it relied
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`plain statement of the claim showing that the pleader is entitled to relief.”’3‘ To
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`survive a l2(b)(6) motion to dismiss, the allegations in the complaint must meet
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`the standard of “p1ausibi1ity.”32 Although the complaint need not provide
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`“detailed factual allegations,”33 it must “amplify a claim with some factual
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`allegations .
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`.
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`. to render the claim plausible.”34 The standard is no longer that a
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`complaint can be dismissed only if there is “no set of facts” that plaintiff could
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`prove “which would entitle him to relief.’’35 Rather, the complaint must provide
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`“the grounds upon which [the plaintiff’ s] claim rests through factual allegations
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`sufficient ‘to raise a right to relief above the speculative 1evel.”’36
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`Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 9 of 18
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`.
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 9 of 18
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`A
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`protection to “original works of authorship fixed in any tangible medium of
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`expression,” including musical works and accompanying words.” Moreover,
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`under the Copyright Act, copyright in a protected work “vests initially in the
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`author or authors of the work.”38 The Second Circuit has held that “copyright
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`ownership is a ‘bundle of discrete rights’ regarding the owner’s ability to use his
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`property.”39 Additionally, a copyright owner may bring an infringement action
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`against those who exploit her work without permission or assignment.“ A
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`copyright owner may convey the rights, either temporarily or permanently, to
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`another, although the copyright owner may not convey more than the copyright 5
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`Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 10 of 18
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`_
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`author brings an infringement action against a purported licensee, the license may
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`be raised as a defense.”43 When the dispute is over whether a license exists, the 1
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`alleged infringer has the burden of proving its existence.“ However, determining
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`whether a defendant’s activities fall within the scope of an existing license
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`essentially involves a question of contract interpretation.“ If the contract
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`language is unambiguous and conveys a definite meaning, its interpretation is a
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`question of law for the court. However, if “‘the language used is susceptible to 1
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`differing interpretations, each of which may be said to be as reasonable as
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`another,’ then the interpretation of the contract becomes a question of fact for the
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`law,”48 it is “‘suitable for disposition on a motion to dismiss.”’49
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`The Second Circuit continues to rely, in part, on Bartsch 12. Metro-
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`Goldwyn—Mayer, Inc.,5° for determining whether the use of a new technology is
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`covered by an existing license.“ The preferred approach, used in Bartsch and
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`reaffirmed in Boosey & Hawkes Music Publishers, Ltd., v. Walt Disney Co., is
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`“‘that the licensee may properly pursue any uses that may reasonably be said to
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`fall within the medium as described in the 1icense.”’52 This “new—use” analysis
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`relies on neutral principles of contract interpretation — if a license is more
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`reasonably read to benefit one party, that party should be able to rely on it.” A §
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`Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 12 of 18
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` ‘
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 12 of 18
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`party seeking a departure from the most reasonable reading of the contract bears‘
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`l
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`the burden of supporting its interpretation of the contract.54
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`D.
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`Contributory Infringement
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`‘
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`‘“[O]ne who, with knowledge of the infringing activity, induces,
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`causes or materially contributes to the infringing conduct of another, may be held
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`liable as a ‘contributory’ infringer.”’55 Contributory infringement includes
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`personal conduct that encourages or assists the infringement.“ There can be no
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`contributory infringement absent actual infringement.”
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`IV. DISCUSSION
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`‘
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`Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 13 of 18
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 13 of 18
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`i
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`allegedly not paid to him under the Recording Agreement, not copyright
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`infringement.” Additionally, Defendants claim that Reinhardt cannot bring two
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`suits against identical defendants — one for improperly collecting royalties
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`attributed to lawful use and the other for unlawful copyright infringement of the
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`same works.
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`Reinhardt has properly alleged a federal claim. Reinhardt has alleged
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`that Defendants have infringed his copyright by exceeding the scope of their
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`license. Accordingly, he seeks damages for copyright infringement under the
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`Copyright Act. That Reinhardt has other grievances with Defendants related to
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`Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 14 of 18
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 14 of 18
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`the Recording Agreement to argue that their use of the Compositions, in a digital
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`format, is licensed by Reinhardt. Because the Recording Agreement is heavily
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`referenced by Reinhardt in the Complaint, it is incorporated by reference and 1 will
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`consider it on this motion to dismiss.“
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`In pertinent part, section 5(a) of the Recording Agreement authorizes
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`Ramones Productions “to manufacture, advertise, sell, distribute, lease, license or
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`otherwise use or dispose of the Masters and phonograph records embodying the
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`Masters, in any or all fields of use, by any method now or hereafter known.”62
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`The Recording Agreement also provides that “‘Records,’
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`sided recording embodying the recorded performances by the Ramones.’’64
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`This language is clear and unambiguous and conveys a definite
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`meaning. The contractual language defining “phonograph records,” when read
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`together with the provisions of section 5(a), clearly authorizes the digital uses
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`employed by Defendants. The phrase “now or hereafter known,” when referring
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`to forms of reproduction, reveals that future technologies are covered by the
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`agreement.“ This language creates an expansive rather than a restrictive
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`conveyance of rights.
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`It is not reasonable to construe the phrase “all forms
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`now
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`7) CC
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`or hereafter known” to exclude Defendants’ alleged digital download form, which
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`Additionally, this result is consistent with the “new—use” analysis of
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`Boosey & Hawkes. The Recording Agreement is more reasonably read to convey
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`to Ramones Productions the right to sell and distribute the “phonograph records”
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`through new technologies, including digital formats. The language authorizes use
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`in “all fomis,” “now or hereafter known.”67 The most reasonable reading of this
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`language supports Defendants’ use in digital form.
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`Reinhardt argues that the license refers only to “all forms” that are
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`“manufactured or sold,” and digital downloads do not fall within its purview
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`because they are transmitted and licensed to end users rather than manufactured or
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`C.
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`Contributory Infringement
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`Reinhardt also alleges that the Estate of John Cummings, Herzog &
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`Strauss, Herzog, and Ramones Productions knowingly and willfully directed the
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`policies, activities, and operations of Taco Tunes, which is one of the parties that
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`allegedly infringed on Reinhardt’s copyright.” Because I hold that there is no
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`copyright infringement, there cannot be any contributory infringement. Therefore,
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`that claim is dismissed. Additionally, because there is no copyright infringement
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`or contributory infringement, I need not address whether the claims are barred by
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`the statute of limitations or the doctrines of laches, estoppel or implied consent.
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`Case 1:07-cv-08233-SAS Document 12 Filed 04/18/08 Page 18 of 18
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`Case 1:O7—cv—O8233—SAS Document 12 Filed 04/18/08 Page 18 of 18
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`-Appearances-
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`For Plaintiff:
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`Jeff Sanders, Esq.
`Roberts & Ritholz LLP
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`183 Madison Avenue, 19th Floor
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`New York, New York 10016
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`(212) 448-1800
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`For Defendants:
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`Stewart L. Levy, Esq.
`James E. Doherty, Esq.
`Eisenberg Tanchum & Levy
`675 Third Avenue
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`New York, New York 10017
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