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`20-3816
`ABKCO Music, Inc. v. Sagan
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`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
`____________________
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`(Argued: March 14, 2022
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`August Term, 2021
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`Decided: October 6, 2022)
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`Docket Nos. 20-3816(L), 20-4020(CON), 20-4099(XAP)
`____________________
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`ABKCO MUSIC, INC., COLGEMS-EMI MUSIC INC., EMI ALGEE MUSIC CORP., EMI
`APRIL MUSIC INC., EMI BLACKWOOD MUSIC INC., EMI CONSORTIUM MUSIC
`PUBLISHING, INC., DBA EMI FULL KEEL MUSIC, EMI CONSORTIUM SONGS, INC.,
`DBA EMI LONGITUDE MUSIC, EMI FEIST CATALOG INC., EMI ROBBINS CATALOG
`INC., EMI UNART CATALOG, INC., JOBETE MUSIC CO., INC., SCREENGEMS-EMI
`MUSIC INC., STONE AGATE MUSIC, STONE DIAMOND MUSIC CORP., IMAGEM MUSIC
`LLC, PEER INTERNATIONAL CORP., PSO LTD., PEERMUSIC LTD., PEERMUSIC III, LTD.,
`SONGS OF PEER, LTD., SPIRIT CATALOG HOLDINGS S.A.R.L, SPIRIT TWO MUSIC, INC.,
`WARNER-TAMERLANE PUBLISHING CORP., WB MUSIC CORP.,
`
`
`
`Plaintiffs-Counter-Defendants-Appellees-Cross-
`Appellants,
`v.
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`WILLIAM SAGAN, NORTON LLC, BILL GRAHAM ARCHIVES, LLC,
`DBA WOLFGANG’S VAULT, DBA CONCERT VAULT, DBA MUSIC VAULT, DBA
`DAYTROTTER,
`Defendants-Counterclaimants-Appellants-Cross-
`Appellees.
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`__________________
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`Before: JACOBS, WESLEY, and MENASHI, Circuit Judges.
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`A collection of music publishers alleged infringement of their copyrights in
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`197 musical works when a series of live concert recordings was made available
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`by the defendants for download and streaming on their websites. Plaintiffs
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`sought damages and a permanent injunction pursuant to the Copyright Act. The
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`United States District Court for the Southern District of New York (Ramos, J.)
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`held on summary judgment that defendants had no valid licenses and therefore
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`infringed each of the musical works, and that the principal was personally liable.
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`The district court denied plaintiffs’ request for a permanent injunction. Two
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`years later, after a nine-day damages trial, the jury awarded plaintiffs a minimal
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`$189,500 in statutory damages. The district court denied plaintiffs’ motion for a
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`new trial but awarded them roughly $2.4 million in attorneys’ fees.
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`Defendants appeal from the district court’s summary judgment order and
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`the order granting fees and costs. Plaintiffs cross-appeal from the district court’s
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`denial of a permanent injunction, several evidentiary rulings, and the denial of a
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`new trial.
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`We AFFIRM in part, VACATE in part, and REVERSE in part, the grant of
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`summary judgment, and AFFIRM the denial of a permanent injunction; REJECT
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`the challenges to the evidentiary rulings; AFFIRM the denial of plaintiffs’ motion
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`for a new trial; VACATE the award of attorneys’ fees; and REMAND for further
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`proceedings consistent with this opinion.
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`____________________
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`MICHAEL S. ELKIN (Erin R. Ranahan, on
`the brief), Winston & Strawn LLP, New
`York, NY, for Defendants-
`Counterclaimants-Appellants-Cross-
`Appellees.
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`BARRY I. SLOTNICK (Christian D.
`Carbone, Tal E. Dickstein, Sarah Schacter,
`and Priy Sinha, on the brief), Loeb & Loeb
`LLP, New York, NY, for Plaintiffs-Counter-
`Defendants-Appellees-Cross-Appellants.
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`DENNIS JACOBS, Circuit Judge:
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`In 2002, William Sagan acquired a trove of live concert recordings that
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`included performances by The Rolling Stones, The Who, the Grateful Dead, and
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`many others. At the time, the sellers cautioned that Sagan “may be buying the
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`world[’s] greatest private collection [of recordings] that no one will ever hear.”
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`App’x at 453. But in 2006, Sagan made those and other recordings available to
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`the world through digital download and streaming services offered for a fee
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`through various websites. Sagan did this through his companies Norton LLC
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`and the Bill Graham Archives, LLC (together with Sagan, “defendants”).
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`In 2015, a collection of music publishers (together, the “Publishers”)
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`brought this suit under the Copyright Act, alleging that defendants infringed the
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`Publishers’ copyrights in 197 musical works that were performed in the live
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`concert recordings. The Publishers sought about $30 million in damages and a
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`permanent injunction. On March 30, 2018, the United States District Court for
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`the Southern District of New York (Ramos, J.) held on summary judgment that
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`defendants had no valid licenses and therefore infringed each of the musical
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`works and that Sagan was personally liable. The district court denied the
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`Publishers’ request for a permanent injunction. Two years later, after a nine-day
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`damages trial, the jury awarded the Publishers $189,500, which was near the
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`minimum statutory damages. The Publishers argued that the minimal award
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`was a rushed and ill-considered result of the encroaching pandemic and moved
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`for a new trial. The district court denied the motion but awarded them roughly
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`$2.4 million in attorneys’ fees.
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`On appeal, defendants challenge the district court’s summary judgment
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`rulings and the order granting fees and costs. The Publishers cross-appeal the
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`district court’s denial of a permanent injunction, several evidentiary rulings, and
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`its denial of the new trial.
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`BACKGROUND
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`I
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`Congress has created two types of copyrights in a musical recording. One
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`is for the underlying “musical work,” which encompasses the notes and lyrics of
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`a song. See 17 U.S.C. § 102(a)(2). The other is for the “sound recording,” which
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`covers the rights to a recording of a particular performance by a particular artist.
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`See id. § 102(a)(7). This case concerns the first type of copyright. (The second
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`type was at issue in a prior litigation.)
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`A person seeking to make and distribute phonorecords–that is, material
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`objects in which sounds are fixed–of a previously published musical work can do
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`so by obtaining a compulsory license. See id. § 115(a)(1).1 One need only
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`provide notice to the owner of the copyright in the musical work (before
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`distribution) and pay government-prescribed royalties. See id. § 115(b), (c).
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`Alternatively, a prospective licensee can go directly to the copyright owner or its
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`agent and secure a “negotiated license.” Id. § 115(b)(2), (c)(3)(B).
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`If one seeks to duplicate and sell a sound recording that was “fixed by
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`another,” id. § 115(a)(1), rather than make one’s own sound recording, there are
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`two additional eligibility requirements for a compulsory license: (i) the sound
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`recording must have been “fixed lawfully,” and (ii) the duplication must have
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`been authorized by the copyright owner of the sound recording or, “if the sound
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`recording was fixed before February 15, 1972,” the sound must have been fixed
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`“pursuant to an express license from the owner of the copyright in the musical
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`work or pursuant to a valid compulsory license for use of such a work in a sound
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`recording.” Id. We refer to these as Section 115’s “substantive requirements.”
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`1 Section 115 of the Copyright Act was amended in 2018 under the Musical
`Works Modernization Act and governs conduct engaged in after October 11,
`2018. See Act of Oct. 11, 2018, Pub. L. 115-264, 132 Stat. 3676. The conduct in this
`case occurred before that date, so all citations in this opinion to 17 U.S.C. § 115
`are to the pre-2018 version of the statute.
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`II
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`William Sagan is the president, CEO, and sole shareholder of Norton LLC
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`(“Norton”). In 2002, Norton purchased the archives of the late concert promoter
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`Bill Graham by acquiring Bill Graham Archives, LLC (“Archives”), which
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`housed a collection of audio and audiovisual recordings. The purchase
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`agreement that conveyed the Archives provided that Sagan was acquiring “all
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`Intellectual Property rights . . . to the extent that either Seller or any of its
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`Affiliates possesses such rights.” Supp. App’x at 1334. A disclaimer recites that
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`the seller made “no representations regarding whether the Assets or their past or
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`future use or exploitation infringed or infringes on the Intellectual Property
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`rights of any person.” Id. at 1335 (emphasis added). The seller also told Sagan
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`that he would need to get record company and artist approval to exploit the
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`recordings.
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`In the ensuing years, defendants continued to acquire recordings of live
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`concerts through other sources. As with the initial purchase from the Archives,
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`these acquisitions came with limited assurances (or none) as to the nature of the
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`intellectual property rights being conveyed, especially as pertaining to artist
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`consent. Defendants were undeterred. Beginning in 2006, these recordings,
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`many of them deemed historic, were made available to the public for download
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`and on-demand streaming through defendants’ websites.
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`About a year after the recordings launched on their websites, defendants
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`sought to obtain licenses to use the musical works by applying for a licensing
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`account with the Harry Fox Agency (“HFA”) –a third-party licensing agent that
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`receives Section 115 notices and grants negotiated licenses on behalf of music
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`publishers.2 For the next three years, defendants worked directly with HFA,
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`obtaining licenses for the musical works, and paying the required royalties. In
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`2010, defendants hired RightsFlow Inc. to secure the licenses and distribute
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`royalties on their behalf. In 2013, defendants hired MediaNet, Inc. to assume
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`these duties. RightsFlow and MediaNet would either obtain negotiated licenses
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`(directly from the music publisher or from HFA) or compulsory licenses (by
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`2 Many music publishers employ HFA “as their agent to receive notice of the
`intention to obtain a compulsory license, and to collect and distribute royalties.
`Acting on behalf of their clients, HFA waives the statutory notice requirements,
`negotiates royalty rates at or below the statutory level, and substitutes a
`quarterly accounting and payment schedule for the monthly schedule prescribed
`by Section 115.” Rodgers and Hammerstein Org. v. UMG Recordings, Inc., No.
`00-cv-9322, 2001 WL 1135811, at *2 (S.D.N.Y. Sept. 26, 2001) (Martin, J.).
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`issuing a Section 115 notice). At the same time, challenges arose and accrued, as
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`follows.
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`In 2006, soon after defendants made the recordings available on their
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`websites, several record labels and a group of musicians sued for infringement of
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`their copyrights in the sound recordings–copyrights separate from musical
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`works. In 2009, after that case settled, defendants entered “Joint Exploitation
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`Agreements” with three major record labels–UMG Recordings Inc., Warner
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`Music, Inc., and Sony Music Entertainment–which generally authorized
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`defendants to exploit through sale and distribution certain sound recordings
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`featuring the record labels’ artists, so long as separate licenses were obtained for
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`the musical works. These claims are therefore not at issue in this suit.
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`In August 2013 (and again in August 2014), plaintiff ABKCO Music, Inc.
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`demanded that defendants cease and desist exploiting an audiovisual recording
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`of a 1981 Rolling Stones concert: “ABKCO has never issued synchronization
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`licenses for the Video” and without such a grant “ABKCO’s copyrights in those
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`Compositions have been infringed and continue to be knowingly and willfully
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`infringed.” Supp. App’x at 1891 ¶ 64. Around the same time, defendants
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`received several similar demands from songwriters and publishers of songs
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`performed in the audiovisual recordings featured on their websites.
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`III
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`On May 27, 2015, the Publishers filed this action alleging that defendants
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`infringed their copyrights in 197 musical works by making audio and
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`audiovisual recordings of those works available for download and streaming
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`from their websites without a license to do so. In total, the Publishers claimed
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`that defendants had illegally exploited more than 1,175 recordings in audio or
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`audiovisual format. The Publishers sought statutory damages of up to $150,000
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`for each work infringed and a permanent injunction against the infringing
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`conduct. Defendants, in turn, sought a declaration that their use of the
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`recordings did not infringe the Publishers’ rights and that they may exploit the
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`audiovisual works without obtaining synchronization licenses, which allows a
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`licensee “to synchronize music with visual images in a video, motion picture,
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`etc.” Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 481 n.8 (6th
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`Cir. 2003).
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`In 2017, following discovery, the district court held on summary judgment
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`that defendants had no valid licenses authorizing the reproduction and
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`distribution of the musical works, had no implied license or estoppel defenses,
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`and had therefore infringed all 197 of the musical works. See ABKCO Music, Inc.
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`v. Sagan, No. 15-cv-4025, 2018 WL 1746564, at *17-20 (S.D.N.Y. Apr. 9, 2018)
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`(Ramos, J.). The district court further held that the infringement of 167 of the
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`works had been willful (there were disputed issues of fact as to the remaining 30
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`works) and that Sagan was personally liable for direct infringement. See id. at
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`*21-22. However, the district court denied a permanent injunction on the
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`grounds that cash could compensate for any future infringement and that the
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`public has an interest in access to this collection of “iconic” recordings. Id. at *23.
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`(Whether defendants needed to obtain synchronization licenses to exploit the
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`audiovisual recordings was never decided because no party sought summary
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`judgment on that claim.)
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`The district court later denied defendants’ motion for reconsideration,
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`which challenged “nearly every aspect of the [Summary Judgment] Opinion.”
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`ABKCO Music, Inc. v. Sagan, No. 15-cv-4025, 2019 WL 1382074, at *1 (S.D.N.Y.
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`Mar. 26, 2019) (Ramos, J.).
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`Trial began on March 2, 2020. At issue was (i) whether defendants
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`willfully infringed the 30 works for which disputed issues of fact precluded
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`summary judgment, and (ii) the damages for infringement of all 197 musical
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`works. The Copyright Act allows the jury to award anywhere between $750 and
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`$150,000 if the infringement is “willful” and between $750 and $30,000 per work
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`if not willful. 17 U.S.C. § 504(c). After nine days of trial, and less than an hour of
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`deliberations, the jury found that the infringement with respect to the 30 works
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`was non-willful and awarded the statutory minimum of $750 per work. For the
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`remaining 167 works that the district court had found to be willfully infringed,
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`the jury awarded $1,000 per work. In total, the jury awarded the Publishers
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`$189,500 of the $30 million that was sought in statutory damages.
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`The Publishers moved for attorneys’ fees and costs under Section 505 of
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`the Copyright Act and separately moved for a new trial, arguing that the jury
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`was “unable to deliberate as the COVID-19 pandemic was worsening in New
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`York City.” ABKCO Music, Inc. v. Sagan, No. 15-cv-4025, 2021 WL 1101107, at *1
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`(S.D.N.Y. Marc. 23, 2021) (Ramos, J.). On November 5, 2020, the district court
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`denied the motion for a new trial but awarded the Publishers approximately $2.4
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`million in attorneys’ fees.
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`DISCUSSION
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`On this cross-appeal, we consider: (I) defendants’ challenge to the order
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`granting the Publishers’ motion for summary judgment and the order denying
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`defendants’ motion for reconsideration; (II) the Publishers’ appeal of the denial
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`of a permanent injunction; (III) the Publishers’ challenge to several evidentiary
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`rulings and to the denial of a new trial; and (IV) defendants’ appeal of the grant
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`of attorneys’ fees.
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`I
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`The summary judgment rulings contested by defendants on appeal are
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`that (A) defendants had no valid license authorizing the reproduction and
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`distribution of the musical works in either audio or audiovisual format,
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`(B) defendants had neither an implied license nor had they any basis for
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`estoppel, and (C) Sagan was liable for direct infringement. We review these
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`rulings de novo. See Andy Warhol Found. for Visual Arts, Inc. v. Goldsmith, 11
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`F.4th 26, 36 (2d Cir. 2021), cert. granted, 142 S. Ct. 1412 (2022).
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`A
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`The ruling that defendants infringed the Publishers’ copyrights in the
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`musical works was based on three holdings that overlap: (1) Section 115
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`compulsory licenses do not cover the use of musical works in audiovisual
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`recordings; (2) defendants failed to satisfy Section 115’s substantive requirements
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`for “duplicating a sound recording fixed by another”; and (3) any license that
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`defendants filed after distribution of the phonorecords is invalid as a matter of
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`law. We address each holding in turn.
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`Of the 197 musical works, “at least” 146 were reproduced and distributed
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`in audiovisual recordings. ABKCO, No. 15-cv-4025, 2018 WL 1746564, at *7.
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`Those actions, defendants argue, fall within the scope of Section 115 compulsory
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`licenses.
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`Section 115 allows one to “obtain a compulsory license to make and
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`distribute phonorecords” of a published musical work. 17 U.S.C. § 115(a)(1)
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`(emphasis added). Whether Section 115 licenses cover exploitation of
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`audiovisual recordings thus hinges on whether those types of recordings fall
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`within the Copyright Act’s definition of “phonorecords”:
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`[M]aterial objects in which sounds, other than those
`accompanying a motion picture or other audiovisual
`work, are fixed . . ., and from which the sounds can be
`perceived, reproduced, or otherwise communicated,
`either directly or with the aid of a machine or device. The
`term “phonorecords” includes the material object in
`which the sounds are first fixed.
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`Id. § 101 (emphasis added). The district court held that this definition excludes
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`all audiovisual recordings, including recordings of live concerts, and that all of
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`defendants’ audiovisual recordings were therefore not covered by any Section
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`115 license. We agree.
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`In the first sentence of the phonorecords definition, the exclusionary
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`phrase (bolded above) most naturally applies to any recording that includes both
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`sounds and images. Defendants contend that one can only “accompany”
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`something that is otherwise separate and would thus limit the meaning of the
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`exclusion to such things as a soundtrack, in which the sound is layered over a
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`motion picture, but not to a recording of a live performance, in which the sound
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`and image are fixed simultaneously. But, given the common and natural
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`meaning of the word, sound can “accompany” an image simultaneously as well
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`as by later addition. Had Congress intended to exclude from the phonorecords
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`definition only soundtracks and other layered sounds, “it would have artfully
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`worded the definition” to reflect that intent.3 Huddleston v. United States, 415
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`U.S. 814, 822 (1974).
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`Defendants contend that their reading of the exclusion is confirmed in the
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`second sentence of the definition because, if “[t]he term ‘phonorecords’ includes
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`3 Defendants’ reading would also result in different licensing schemes applying
`to musical works used in motion pictures depending on whether the song was
`performed on stage (in front of the camera) or in a studio (to be dubbed).
`Copyright law is complicated, but it is not arbitrary.
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`the material object in which the sounds are first fixed,” then an object is a
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`phonorecord even if images are “first fixed” with the sounds. As the district court
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`correctly recognized, however, “the use of the definite article ‘the’ to reference
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`the concepts ‘material objects’ and ‘sounds’ can only be read to refer to these
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`terms as previously defined in the first sentence, that is to say, as expressly
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`excluding audiovisual works.” ABKCO, No. 15-cv-4025, 2018 WL 1746564, at
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`*11. The second sentence cannot be read to describe a larger set of sounds than
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`the sentence preceding it does.
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`True, our reading results in some redundancy. That is, it is unclear what
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`the second sentence of the definition adds given that the first sentence already
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`covers all material objects on which the sounds are fixed–regardless of whether
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`they are fixed first, second, or any time thereafter. But “[r]edundancy is not a
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`silver bullet.” Rimini Street, Inc. v. Oracle USA, Inc., 139 S. Ct. 873, 881 (2019).
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`The definition of “copies,” which appears elsewhere in the Act, has the same
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`structure, similar phrasing, and an analogous second sentence that is likewise
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`redundant without changing the evident meaning of the first sentence.4 The
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`second sentence, which appears in the definition of “copies” as well as
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`“phonorecords,” does not alter our understanding of the first.
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`Guided by the plain language of the exclusionary phrase, we conclude that
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`audiovisual recordings are not covered by Section 115 compulsory licenses.
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`Defendants therefore infringed each musical work included in an audiovisual
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`recording.
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`2
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`The 51 remaining musical works are in audio-only recordings. The district
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`court concluded that defendants’ exploitation of these recordings was unlicensed
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`4 That definition reads as follows:
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`“Copies” are material objects, other than phonorecords,
`in which a work is fixed by any method now known or
`later developed, and from which the work can be
`perceived, reproduced, or otherwise communicated,
`either directly or with the aid of a machine or device. The
`term “copies” includes the material object, other than a
`phonorecord,
`in which
`the work
`is
`first
`fixed.
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`17 U.S.C. § 101.
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`because defendants failed to satisfy Section 115’s substantive requirements,
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`which apply when a person seeks to “duplicat[e] a sound recording fixed by
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`another.” 17 U.S.C. § 115(a)(1). Those requisites (with qualification) are that
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`(i) the sound recording was “fixed lawfully” and that (ii) the making of the
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`phonorecords was authorized by the copyright holder in the sound recording.
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`See id. On appeal, defendants argue that they were not subject to those
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`requirements because the sound recordings they sought to duplicate were fixed
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`by their predecessors and, thus, not “by another.”5 We agree. While the use of
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`the term “another” is imprecise, defendants’ interpretation is supported by logic
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`and legislative history.
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`When defendants acquired the relevant recordings, they bought any rights
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`that the sellers held in those recordings. The purchase agreement that conveyed
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`the Archives, for instance, provided that the seller was acquiring “all Intellectual
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`5 While defendants raised this argument for the first time at the summary
`judgment hearing, we do not consider it waived because the district court chose
`to address it on reconsideration. See United States v. Young, 998 F.3d 43, 52 n.2
`(2d Cir. 2021) (“[W]e do not consider arguments waived when, although not
`raised below, they were nevertheless passed on by the district court.” (internal
`quotation marks omitted)).
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`Property rights . . . to the extent that either Seller or any of its Affiliates possesses
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`such rights.” Supp. App’x at 1334. It is undisputed that the seller would not be
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`subject to the substantive requirements of Section 115. To find that defendants
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`(as purchasers) would be saddled with these additional requirements would
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`impair the transferability of these sorts of works because every trade would
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`thereby impose new burdens and diminish value. Nothing in the text requires
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`that result.
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`Legislative history militates in the same direction. Under the Copyright
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`Act of 1909, once the copyright owner of a musical composition authorized the
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`work’s mechanical reproduction, any other person could make “similar use” of
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`the work on payment to the copyright owner of a two-cent royalty “on each such
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`part manufactured.” 17 U.S.C. § 1(e) (1909). The licensee was not expressly
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`required to make its own original sound recording of the musical work or to
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`obtain a license from the lawful owner of the duplicated sound recording.
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`The 1971 amendments to the Copyright Act for the first time granted
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`copyright protection in “sound recordings”–separate from the musical work–to
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`protect against a recording being duplicated without authorization, i.e., record
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`piracy. In the litigation that ensued, music publishers claimed that one who
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`duplicates a sound recording made by somebody else is ineligible for a
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`compulsory license.6 These suits made their way to various circuit courts, all of
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`which agreed that compulsory licenses for “similar use” do not allow a person to
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`participate in “piracy under the flag of compulsory licensing.” Duchess Music
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`Corp. v. Stern, 458 F.2d 1305, 1311 (9th Cir. 1972); see also Edward B. Marks
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`Music Corp. v. Colorado Magnetics, Inc., 497 F.2d 285 (10th Cir. 1974); Jondora
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`Music Pub. Co. v. Melody Recordings, Inc., 506 F.2d 392 (3d Cir. 1974); Fame
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`Pub. Co., Inc. v. Alabama Custom Tape, Inc., 507 F.2d 667 (5th Cir. 1975).
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`Later, the 1976 amendments made it possible for a person seeking to
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`duplicate a sound recording “to obtain a compulsory license for the use of
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`copyrighted music under section 115.” H.R. Rep. No. 94-1476, at 108. But, to
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`prevent piracy, eligibility for a compulsory license was conditioned on “the owner
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`of the sound recording . . . authoriz[ing] its duplication.” Id. (emphasis added).
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`Since piracy concerns are not a consideration when (as here) the owner of the
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`6 The Third Circuit theorized that “[o]ne reason for these recent cases may be the
`increased remedies provided to the composers by [the 1971 Amendment].”
`Jondora Music Pub. Co. v. Melody Recordings, Inc., 506 F.2d 392, 395 n.8 (3d Cir.
`1974).
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`sound recording has transferred its rights to a successor, there is no reason to
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`assume the application of the substantive requirements.
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`We hold that defendants’ recordings were not “fixed by another” for the
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`purposes of Section 115, and therefore vacate the district court’s summary
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`judgment ruling to the extent it found defendants to have infringed any of the
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`musical works due to a failure to satisfy that section’s substantive requirements.7
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`3
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`The final basis for the district court’s infringement finding was defendants’
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`failure to provide timely notice before distributing a phonorecord and before
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`obtaining a voluntary HFA license. The Publishers argue that defendants failed
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`to serve timely notice for at least one recording associated with each musical
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`7 Both the parties and the district court assumed that if the recordings were
`“fixed by another,” then defendants’ recordings would not have been “lawfully
`fixed” without the artists’ consent. The basis for that assumption is questionable:
`the two statutes on which the district court relied–the federal and New York anti-
`bootlegging acts–were enacted many years after the recordings at issue were
`fixed. See Pub. L. No. 103-465, 108 Stat. 4809 (1994) (codified at 17 U.S.C. § 1101);
`1990 N.Y. Sess. Law Serv. 460 (McKinney). Unless another law applied at the
`time the recordings were fixed, then it does not appear to have been unlawful for
`the concert promoters to record the concerts without the performing artists’
`consent.
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`work and that this failure provides an independent basis for affirming the grant
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`of summary judgment. We disagree.
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`The district court found infringement due to untimely notice only as to the
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`musical works included in the recordings exploited in 2006 because defendants
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`had sent no notices at that time and did not begin obtaining HFA licenses until
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`the following year. See ABKCO, No. 15-cv-4025, 2018 WL 1746564, at *16. As to
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`all other recordings, however, the district court found that “there is a disputed
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`question of fact as to whether and which [notices] were actually submitted after
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`the first download or streaming of a phonorecord and in the absence of an HFA
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`license.” Id. So far as we can tell, that disputed fact was not resolved.
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`We therefore remand to the district court for further factfinding on this
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`issue. In so doing, we acknowledge that the factual dispute may be affected by a
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`threshold legal question that arises from Section 115’s command that “failure to
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`serve or file the notice of intention . . . forecloses the possibility of a compulsory
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`license.” 17 U.S.C. § 115(b)(2). Specifically, the question is whether one is
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`permanently barred from obtaining a valid compulsory license for a musical
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`work that one had exploited before sending notice and in the absence of a
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`negotiated license.8 Section 115(b)(4)(A) might alternatively be read to prevent
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`only retroactive issuance of a compulsory license that would otherwise absolve
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`the licensee from suffering the consequence of infringement; in that case, a
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`prospective license could still be acquired, so long as the compulsory licensing
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`requirements are fulfilled. But this issue has not been briefed, so we merely raise
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`it for further consideration in the district court.
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`*
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`*
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`*
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`To summarize, we agree with the district court’s holding that the
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`audiovisual recordings do not fall within the scope of Section 115 compulsory
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`mechanical licenses, disagree with the district court’s holding that defendants
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`infringed the remaining musical works by failing to comply with the substantive
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`requirements of Section 115, and reject the Publishers’ argument that defendants’
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`failure to serve timely notice provides an independent basis for affirming each
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`8 Defendants’ inability to obtain a compulsory license would not affect any
`negotiated license they might secure. See Rodgers & Hammerstein, 2001 WL
`1135811, at *5 (“Nothing in Section 115 suggests that Congress intended to limit
`the ability of either copyright holders or prospective licensees to enter into
`private agreements that would contain different terms and conditions of the
`license.”).
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`finding of infringement. We therefore affirm in part and vacate in part the
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`district court’s summary judgment order.
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`On remand, the district court should reevaluate its infringement findings
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`for all audio-only recordings. We leave it to the district court to decide whether a
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`new jury trial is needed to resolve any factual disputes.
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`B
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`Defendants argue that even if they failed to obtain any compulsory or
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`negotiated licenses for the audiovisual recordings, the affirmative defenses of
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`implied license and equitable estoppel preclude findings of infringement. We
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`disagree.
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`We have not yet ruled “on the precise circumstances under which an
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`implied non-exclusive license will be found.” Psihoyos v. Pearson Ed
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