Opinion
Civil No. 01-1142 (GAG).
October 8, 2009
MEMORANDUM OPINION AND ORDER
Presently before this court is Banco Popular's ("BPPR") motion for summary judgment (Docket No. 334), which was timely opposed by LAMCO/ACEMLA (Docket Nos. 377; 378; 379). For the reasons stated herein, the court GRANTS in part and DENIES in part the aforementioned motion.
The court GRANTS BPPR's motion regarding the dismissal of claims based on the song Felices Dias as it was uncontested by LAMCO/ACEMLA ("LAMCO").
The court GRANTS BPPR's motion regarding preemption. All of LAMCO's state law claims where the cause of action is equivalent in substance to a claim under copyright law are preempted. See Alvarez Guedes v. Marcano Martinez, 131 F.Supp.2d 272, 279-80 (D.P.R. 2001) (finding that an unjust enrichment claim under Puerto Rico law is preempted by the Copyright Act where the state law cause of action is equivalent in substance to a copyright infringement claim); See also John G. Danielson, Inc. V. Winchester-Conant Properties, Inc., 322 F.3d 26, 45 (1st Cir. 2003) (holding that a state law claim for unfair competition was preempted by the Copyright Act where both claims were based on the same behavior).
The court DENIES the motion with respect to all other claims. There are issues of material fact regarding ownership of the underlying songs that are pertinent to the adjudication of many of BPPR's claims. As these claims of ownership cannot be decided on summary judgment, BPPR's claims for summary judgment, contingent upon those rulings, must be denied as well.
BPPR has failed to offer sufficient evidence to meet the necessary elements to establish that their licensing agreement with LAMCO was void as a violation of antitrust law. There are four elements of a per se tying claim. The party must prove that: "(1) the tying and tied goods are two separate products; (2) the defendant affords consumers no choice but to purchase the tied product from it as a condition of obtaining the tying product; (3) the defendant has sufficient market power in the tying product market to distort consumers' choices with respect to the tied product; and (4) the tying arrangement forecloses a substantial volume of commerce." Ramallo Bros. Printing Inc. v. El Día, Inc., 392 F. Supp. 2d 118, 134 (D.P.R. 2005) (citingUnited States v. Microsoft Corp., 253 F.3d 34, 85 (D.C. Cir. 2001); Borschow Hosp. Med. Supplies, Inc. v. César Castillo Inc., 96 F.3d 10, 17 (1st Cir. 1996) (quoting Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d at 1178)). BPPR has failed to proffer evidence to demonstrate the third and fourth element of this test. As such, summary judgment is DENIED.
The court also finds that failure to pay royalties on the non-exclusive licenses that BPPR was given by LAMCO, could give rise to a copyright infringement action, as a reasonable jury could find that this constituted a material breach of the licensing contract. See Peer Intern. Corp v. Latin American Music Corp., 161 F. Supp. 2d 38, 51 (D.P.R. 2001) ("A failure to pay royalties may give rise to a breach of contract or rescission action, as well as an action for copyright infringement."). Therefore, the court DENIES summary judgment as to BPPR's claim that their license agreement bars LAMCO's infringement claims. The court notes that a finding that LAMCO has a valid infringement claim, is contingent upon a declaration that LAMCO held the rights to the underlying songs in dispute.
The court also DENIES BPPR's claim that LAMCO lacks standing due to a failure to register their copyrights. A review of the evidence proffered does not necessarily lead to the conclusion that LAMCO filed their registrations as compilations, so that LAMCO's copyright does not extend to each of the individual works. Further, there are genuine issues of fact as to whether LAMCO had the intent to purposely defraud the copyright office. "[A] misstatement or clerical error in the registration application if unaccompanied by fraud will not invalidate the copyright nor render the registration certificate incapable of supporting an infringement action." 2 Nimmer § 7.20, at 7-201; see also Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1160, 61 (1st Cir. 1994) ("immaterial, inadvertent errors in an application for copyright registration do not jeopardize the validity of the registration.").
BPPR cites, as evidence of LAMCO's fraudulent activities, that LAMCO knowingly misstated dates of publication on their registration because they were aware that these works had irreversibly entered the public domain. The court finds that the record lacks sufficient evidence of publication to support BPPR's claim that the songs had fallen into the public domain prior to LAMCO's registration. Although BPPR proffers sufficient evidence that the works were distributed as phonorecords prior to 1978, the Copyright Act specifically states that the distribution of phonorecords prior to 1978 is not considered a publication under copyright law. See 17 U.S.C. § 303. BPPR offers no other evidence sufficient to establish as a matter of law that a performance constituting publication, occurred prior to 1978. See 17 U.S.C § 101 (recognizing that "[a] public performance or display of a work does not of itself constitute publication."). Therefore, because a question exists as to whether the works had entered the public domain, the court rejects BPPR's contention that the only reasonable explanation for using these dates of publication was to defraud the copyright office.
Because of the foregoing reasons, the court GRANTS in part and DENIES in part BPPR's motion for summary judgment.