Court Opinion

ID: 7210545
Source: CourtListenerOpinion
Date Created: 2022-07-24 19:31:10.508111+00
Date Added: 2024-06-11T16:16:49.405575
License: Public Domain

WALLACE, Senior Circuit Judge,
concurring.
The majority reverses the district court’s summary judgment because it believes there is a genuine issue of material fact as to whether Capricorn Records, LLC exceeded the scope of a compulsory license issued by Allman to PolyGram Records, Inc. I agree that summary judgment was improper but for different reasons.
Capricorn will be liable to Allman for copyright infringement if it reproduced and/or distributed Allman’s song either without a license or in a way not permitted by its license. 17 U.S.C. §§ 106, 501; Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1121 (9th Cir.1999). Our first inquiry, then, should be whether Capricorn reproduced or distributed the song. If it did, we should then determine whether it had a license to copy or distribute and, if so, whether the alleged infringing activity falls within the scope of that license. My principle objection to the majority’s approach is that it skips past the first two inquiries and focuses solely on whether Capricorn exceeded the scope of the Poly-Gram license. I would attempt to resolve the first two questions before addressing the license scope issue.
PolyGram undoubtedly exercised significant influence over the joint venture with Capricorn. As the district court indicated, PolyGram retained ownership of the master recordings, set the prices of the retail albums, and handled the accounting and payment of royalties. This does not mean, however, that Capricorn’s role was insignificant or that Capricorn did not copy or distribute the song. After paying a distribution fee to PolyGram, it received all of the income from the sale of the song. It appears likely from the joint-venture agreement between Capricorn and Poly-Gram that PolyGram was acting as Capricorn’s agent in the distribution of the song. Thus, I would conclude that Allman has raised a triable issue as to whether Capricorn copied or distributed the song.
Assuming that Capricorn copied or distribute the song, there is also the question of whether Capricorn had a license. Since all agree that Capricorn did not have its own license, the issue is whether the Poly-Gram license covered Capricorn’s activities. PolyGram’s license could have been extended to Capricorn in one of two ways: 1) a possible transfer of PolyGram’s license to Capricorn or 2) PolyGram and Capricorn could have been the same legal entity. Capricorn repeatedly claims that it never asked for or received a right in the PolyGram license. The re-released phonorecords stated that the song was “[licensed exclusively to Capricorn Records, LLC,” but that statement appears to have been a mistake as Allman failed to produce further evidence, such as a license assignment agreement, to substantiate its •claim that the license had indeed been transferred. In my opinion, the label evi*85dence alone is insufficient for Allman to have raised a triable issue on the question of whether PolyGram tried to assign its license to Capricorn. Moreover, I have serious doubts about whether such an assignment could be accomplished even if attempted. See Harris v. Emus, 734 F.2d 1329, 1333 (9th Cir.1984) (concluding that copyright licenses are not transferrable).
Whether PolyGram and Capricorn are the same entity is another matter. The district court appears to have accepted Capricorn’s argument that it and Poly-Gram were the same entity when it stated that Allman “present[ed] no evidence of Capricorn LLC’s separate legal entity status.” The district court was wrong. Not only does Capricorn Records, LLC have a separate name and entity designation, it existed as a limited liability partnership prior to the joint venture agreement between PolyGram and Capricorn Records, Inc. Further, PolyGram owned only 51% of Capricorn. I would therefore conclude that Allman has raised a triable issue as to whether PolyGram and Capricorn are separate legal entities and would remand to the district court for it to make this determination, if necessary.
If PolyGram and Capricorn are different legal entities and Capricorn engaged in copying or distributing, then Capricorn infringed Allman’s copyright. If they are the same legal entity, then the court would have to address whether Capricorn’s alleged infringing activity fell within the scope of the PolyGram license.
In sum, rather than remanding on the license scope issue alone, I would reverse and remand for the district court to determine whether Capricorn copied or distributed “Wasted Words.” If it did, I would ask the district court to determine whether Capricorn had a license and, if Capricorn did have a license, only then would I instruct the district court to determine whether Capricorn’s alleged infringing activities exceeded the scope of the Poly-Gram license.