Opinion ID: 545581
Heading Depth: 3
Heading Rank: 1

Heading: License Revocation

Text: 7 The district court found that the letter of December 26, 1984, constituted a revocation of the licenses. Pausa argues there is a question of fact as to whether, in light of the previous dealings between the parties and their dealings after December 26, 1984, the letter was intended to be and should reasonably be construed as a revocation of the licenses. 8 Pausa first argues that a genuine issue of fact exists as to Fox's intent to revoke because beginning in 1980 and continuing until December 26, 1984, Fox made approximately twenty demands upon Pausa, four of which Pausa claims purported to revoke licenses issued to them. Despite these demands and revocations, Fox continued to accept payments and issue licenses to Pausa. 9 Contrary to Pausa's assertions, only one letter dated September 14, 1982, actually states that it constitutes formal notice of license termination pursuant to section 115(c). Newman Declaration, Exh. 4. The other three letters written between August 1, 1980, and July 30, 1982, merely threaten legal action if overdue royalties and accountings were not forthcoming. Newman Declaration, Exhs. 1-3. We are not told which licenses the September revocation applied to or whether Pausa complied with its statutory obligations in response to the notice of revocation. We find this single letter of revocation insufficient to create a triable issue of fact as to the plaintiffs' intention to revoke the licenses at issue a full two years later in December 1984. 10 Pausa also argues that a genuine issue of fact as to Fox's intent to revoke exists because Fox continued to issue licenses to Pausa after the revocation on December 26, 1984. Pausa admits, however, that none of the licenses issued after December 26, 1984, were also licenses subject to the December revocation. 1 Because the plaintiffs' copyrighted works are governed by the compulsory licensing provisions of section 115(c), the plaintiffs also could not prevent the defendants from obtaining licenses to use other copyrighted works not subject to the revocation. 2 Therefore, the fact that Fox issued other licenses after December 1984 does not raise a genuine issue of fact as to the plaintiffs' intent to revoke the licenses specified in the December letter. 11 Pausa next contends that the plaintiffs' acceptance of a $5,000 payment on account thirty days after December 26, 1984, raises a question of fact as to their intent to terminate. The evidence establishes that Fox deposited the $5,000 in an escrow account on or near July 10, 1985, pending an explanation from Pausa as the payment was unaccompanied by a royalty statement. Pausa argues Fox's failure to return the check raises an inference it intended to retain the money which of course, was inconsistent with its present claim that the licenses had been revoked. 12 The district court held, and we agree, that this evidence is insufficient to create a genuine issue of fact for trial. 13 [D]efendants do not dispute that, although they made sporadic payments, they never complied with the royalty and accounting requirements of the [Copyright Act]. Moreover, defendants do not dispute that plaintiffs placed such payments in escrow and at all time continued to demand compliance with the statutory provisions. Defendants submit no evidence that would even suggest plaintiffs intended to waive their rights to sue for infringement. 14 Pausa also fails to show the $5,000 represented payment on royalties due under the licenses terminated in December 1984, as opposed to payment on other nonrevoked licenses. Consequently, the payment, even if accepted, is insufficient to raise a triable issue of fact as to Fox's intent to revoke. 15 In another effort to show that the parties accorded no special significance to the December letter, Pausa claims that by letter dated March 27, 1985, Fox again threatened revocation of the licenses unless payment was received by April 12, 1985. Newman Declaration, Exh. 8. The March letter was not sent by Fox, however, but by Prager and Fenton, an accounting firm engaged by Fox to examine Pausa's records to determine the amount of royalties overdue for the period between July 1, 1983, and June 30, 1986. Having assessed a deficiency of $129,015.00, the letter advises that Fox would allow additional time no later than April 12, 1985, for Pausa to furnish a meaningful response and downpayment. The letter concludes that if this deadline was not met, Fox intend[ed] to discuss with the involved publishers revocation of licenses as well as infringement proceedings. 16 Once again, there is no evidence this threatened revocation covered the same licenses identified in the December letter. Under these circumstances, such evidence is insufficient to create a triable issue of fact with respect to the plaintiffs' intent to revoke the licenses. We find that the December letter effectively revoked the licenses at issue.