Opinion ID: 2976049
Heading Depth: 3
Heading Rank: 1

Heading: CDs

Text: Not surprisingly, with regard to CDs, Sony argues on appeal that the 1977 Agreement’s logo obligation unambiguously applied to CDs, and the 1998 Agreement simply reinforced that obligation and did not create any new obligations. Sony apparently took the opposite approach in its motion for summary judgment. According to the district court, in a footnote in its summary judgment briefing, Sony stated “[t]he plain language of the 1977 Agreement strictly enumerated the product formats upon which the CIR Logo would appear – and did not make any provision for the subsequent emergence of the CD format.” Relying on Sony’s statement and there being no opposition on this point from Popovich, the district court ruled that the 1977 Agreement logo obligation unambiguously did not apply to CDs. Apparently Sony’s trial strategy changed after the district court’s summary judgment order found that the limitations remedy would not apply to new logo obligations under the 1998 Agreement. Realizing its exposure had been greatly increased by the district court’s ruling, Sony moved for reconsideration, arguing that the district court read too much into its footnote. While the district court expressed its frustration with Sony for changing its stance, it did reverse its earlier ruling and found the 1977 Agreement was ambiguous with regard to whether the logo obligation applied to CDs. Now Sony argues that the 1977 Agreement unambiguously applies to CDs and the 1998 Agreement did not expand any of the logo obligations of the earlier agreement. The 1977 Agreement states that Cleveland’s logo would be placed on “phonograph records.” Paragraph 13.05 of that agreement defines “Records,” “Phonograph Records,” and “Recordings” as “all forms of reproductions, now or hereafter known.” According to Sony, the “now or hereafter known” language encompasses any advancements in physical media, such as CDs, that have been developed since 1977 to replace vinyl records and cassette tapes. Sony further argues that the 1998 Agreement confirms this interpretation. Paragraph 5 of the 1998 Agreement states that “Sony Music will continue to place the Cleveland logo . . . on albums, CDs, cassettes, and all other forms and configuration of master recordings embodied on the albums . . . .” (emphasis added). Popovich counters by arguing that the 1977 Agreement limits the logo obligation to the labels and jackets of “disc albums” and “tape albums.” The term “disc album” is not defined, and it was that term that led the district court to conclude that the agreement was ambiguous as to whether it covered CDs. Once again, we do not believe the district court erred in its analysis. Not only did Sony take the position in earlier briefing that the 1977 Agreement unambiguously did not cover CDs, but at the preliminary injunction hearing, Sony’s own expert testified that he could not say “it’s 100 percent given” that CD’s were included. Given the ambiguous language of the 1977 Agreement’s logo obligation, Sony’s previous stance that CDs were not covered, and the expert testimony stating it was not absolutely clear whether CDs were covered, we do not believe the district court erred in holding that the 1977 Agreement was ambiguous with regard to whether CDs were covered by paragraph 7.05’s logo obligation. Nos. 06-3463/3464 Popovich v. Sony Music Entertainment, Inc. Page 7