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Archived updates for Monday, January 14, 2008

Co-Owner's Retroactive Copyright License Does Not Extinguish Accrued Infringement Claims

In Davis v. Blige (October 5, 2007) the Second Circuit concluded that a retroactive copyright transfer agreement by one co-author to a thrid party cannot extinguish the other co-author's accrued infringement claims. A retroactive license, the court reasoned, would enable one co-author (the licensor) to trample on the accrued rights of the other co-author to prosecute an infringement action, and the copyright statute doesn’t allow co-authors to thus interfere with each other’s rights:

If the retroactive agreement were given effect, the possibility that Davis could seek an accounting from Miller, see Shapiro, Bernstein & Co. v. Jerry Vogel Music Co., 221 F.2d 569, 571 (2d Cir. 1955) (“Shapiro I”), modified, 223 F.2d 252, 254 (2d C ir. 1955) (“Shapiro II”) (“[E]ach holder of the . . . copyright should account to the other for his exploitation thereof[]—not as an infringer but as a trustee.”), would be an inadequate substitute for Davis’s accrued infringement claims. If Davis retained her accrued infringement claims, in order to obtain damages and profits from defendants she would only need to prove defendants’ gross revenues from the disputed compositions; the burden would then shift to defendants to prove that their profits were less than their gross revenues. See 17 U.S.C. § 504(b) (“[T]he copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.”). Davis would also be able to elect statutory damages “at any time before final judgment is rendered.” Id. §
504(c)(1). Were Davis to only have an accounting remedy against Miller, however, she would be unable to elect statutory damages; she would bear the full burden of proof in demonstrating Miller’s profits from the licensing of the disputed compositions; and she would only be entitled to an “equitable share” of Miller’s
profits, Shapiro I, 221 F.2d at 571, rather than all of the profits. Moreover, if Davis were limited to an accounting rem edy against M iller, she would be unable to recoup either profits obtained by the third-party defendants as a result of their unauthorized use of the disputed compositions, or her own damages as a result of that unauthorized use.
Get more insight from Steve Seidenberg in the January 2008 issue of InsideCounsel.
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April 06, 2009 11:57 PM  

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