Opinion ID: 1434840
Heading Depth: 3
Heading Rank: 2

Heading: Injunction (Issue 10)

Text: The district court did not err by issuing an injunction and impoundment order. After the jury verdict in favor of plaintiffs, the district court, in response to plaintiffs' motion, issued an injunction [p]ursuant to 17 U.S.C. § 503, Fed.R.Civ.P. 65, 28 U.S.C. § 1651 and the inherent equitable powers of the Court. The court enjoined defendants from using the song Ready to Die or the album Ready to Die. The court also ordered defendants to impound all copies of the song and album. The court reasoned that plaintiffs are entitled to the exclusive use of Singing in the Morning and that plaintiffs would suffer irreparable harm without an injunction and impoundment order. The court also concluded that money damages would be insufficient to protect plaintiffs' rights in Singing in the Morning. Finally, the court found that an injunction and impoundment order was in the public interest to vindicate plaintiffs' rights, and that the balance of relative harms among the parties weighs in favor of injunctive relief and impoundment. [16] Defendants ask this court to reverse the district court's injunction and impoundment order because (1) the balancing of the relative harms to the parties does not justify the order, and (2) the doctrines of laches and estoppel preclude injunctive relief. The federal Copyright Act authorizes injunctive relief and impoundment as remedies for infringement. 17 U.S.C. §§ 502, 503. When a district court grants a permanent injunction, this court reviews its factual findings for clear error, legal conclusions de novo, and the scope of injunctive relief for an abuse of discretion. Dana Corp. v. Celotex Asbestos Settlement Trust, 251 F.3d 1107, 1118 (6th Cir.2001). It is uncontroversial that a `showing of past infringement and a substantial likelihood of future infringement' justifies issuance of a permanent injunction. Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 14.06[B] (2007) (hereinafter Nimmer). Not only is the issuance of a permanent injunction justified [w]hen a copyright plaintiff has established a threat of continuing infringement, he is entitled to an injunction. Walt Disney Co. v. Powell, 897 F.2d 565, 567 (D.C.Cir.1990) (emphasis in original); see also Nimmer § 14.06[B] (Generally, it would appear to be an abuse of discretion to deny a permanent injunction where liability has been established and there is a threat of continuing infringement.). This is because in copyright infringement actions, the denial of a request for injunctive relief could otherwise `amount to a forced license to use the creative work of another.' Taylor Corp. v. Four Seasons Greetings, LLC, 403 F.3d 958, 967-68 (8th Cir.2005) (quoting Silverstein v. Penguin Putnam, Inc., 368 F.3d 77, 84 (2d Cir.2004)); cf. W.L. Gore & Assocs., Inc. v. Garlock, Inc., 842 F.2d 1275, 1281 (Fed.Cir.1988) (noting that in patent cases, an injunction should issue once infringement has been established unless there is a sufficient reason for denying it). Defendants do not challenge any of the district court's factual findings or legal conclusions, and defendants fail to demonstrate that the district court abused its discretion. Defendants argue that monetary relief for future infringement is sufficient because plaintiffs are in the business of licensing their copyrighted material and even offered to license to defendants the copyrighted material at issue in this case. Defendants also argue that they will suffer by not receiving profits for the infringing work and the public will be denied the opportunity to listen to Ready to Die. These are not concerns unique to this case and do not make the district court's adoption of the injunctive remedy, which is the standard remedy when past infringement has been proven and future infringement is likely, an abuse of discretion. In addition, plaintiffs have every incentive to negotiate a licensing agreement with defendants to permit them to distribute the infringing work, and there is no reason to believe that the parties will not bargain around the injunction. The district court did not abuse its discretion by rejecting defendants' argument that the doctrine of laches precludes injunctive relief. Ordinarily, an appellate panel reviews `a district court's resolution of a laches question for an abuse of discretion.' Chirco v. Crosswinds Cmtys., Inc., 474 F.3d 227, 231 (6th Cir. 2007) (quoting City of Wyandotte v. Consol. Rail Corp., 262 F.3d 581, 589 (6th Cir.2001)). A party asserting laches must show: (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting it. Id. (quotations omitted). Defendants quote Learned Hand for the proposition that it is inequitable for the owner of a copyright, with full notice of an intended infringement, to stand inactive while the proposed infringer spends large sums of money in its exploitation, and to intervene only when his speculation has proved a success. Haas v. Leo Feist, Inc., 234 F. 105, 108 (S.D.N.Y.1916); accord Danjaq LLC v. Sony Corp., 263 F.3d 942, 951 (9th Cir. 2001). This court does not go so far, and cautions that although the doctrine of laches may be applied in copyright cases, it should be applied rarely and only in unusual circumstances. Chirco, 474 F.3d at 233-36 (affirming district court's application of laches to plaintiffs' two-and-one-half-year delay in filing suit, where plaintiffs knew of defendants' infringement of construction plans before construction began, ma[de] any effort to procure the destruction of buildings already occupied, sold, or substantially constructed unduly prejudicial to the defendants). This is not the rare and unusual case in which a district court abused its discretion by not holding that laches applies. Defendants note that plaintiffs knew about the infringement in 1998, but did not pursue their claims. The parties agreed that the complaint would be deemed as having been filed on May 4, 2001. Pursuant to the three-year statute of limitations, defendants were only liable for acts of infringement that occurred on or after May 4, 1998. In effect, defendants are asking this court to hold that the doctrines of laches and estoppel shortened the limitations period. But unlike Chirco and Haas, this is not a case where plaintiffs sat back and watched while defendants invested large sums into a project, only to sue when it appeared that the project would be successful. As defendants acknowledge, The album Ready to Die was first sold in 1994 and became an instant classic, well known throughout the world. Defendants' Br. at 65. Defendants' investment in the album had already been made and defendants had already realized the success of the album by the time plaintiffs discovered the infringement in 1998. Thus, this is not a case where defendants acted improperly by waiting to file suit, and the district court, therefore, did not abuse its discretion. Similarly, the district court did not err by rejecting defendants' estoppel defense. The manner in which defendants are using the term estoppel is unclear. Defendants appear to equate estoppel with laches because they lump laches and estoppel together and repeatedly refer to the inactivity of plaintiffs. If that is the case, then their argument is answered by the discussion above with respect to laches. Alternatively, if defendants mean traditional equitable estoppel, then their argument also fails. Estoppel requires, among other things, that the party to be estopped must have used conduct or language amounting to a representation of material fact and the party asserting estoppel must have detrimentally and justifiably relied on the representation. Thomas v. Miller, 489 F.3d 293, 302 (6th Cir.2007) (quotations omitted). Defendants appear to base their claim on the fact that, while the lawsuit was pending, they re-released Ready to Die in 2004 and plaintiffs failed to object. Defendants argue that they reasonably believed that they would be able to compensate plaintiffs for the continuing infringement if plaintiffs won the lawsuit. However, defendants do not refer to any actions plaintiffs took or assurances that plaintiffs made that would have justified a belief that plaintiffs would not object to the re-release. Furthermore, it was unreasonable for defendants to rely on plaintiffs' failure to object immediately to the re-release when the parties were already in the midst of litigation concerning the original album.