Burbank High School runs a music program that reportedly provided the inspiration for the hit TV show, Glee. It is nationally known for the competitive show choirs its students participate in as part of the program. To defray the costs of fielding several choirs, a non-profit booster club was formed to help fundraise for the music education program. The booster club puts on a couple of annual fundraising shows, Burbank Blast and Pop, which include both the Burbank High School choirs as well as a number of other competitive choirs. The choirs’ music director serves as the liaison between the school’s choirs and the booster club.
The music director hired an arranger to create custom sheet music for two shows to be performed at the fundraisers: Rainmaker and 80’s Movie Montage. In creating these performances, the arranger used snippets from the following songs: Magic (originally performed by Olivia Newton John) and (I’ve Had the) Time of My Life (by Bill Medley and Jennifer Warnes) as well as Hotel California and Don’t Phunk with my Heart. After several performances, Tresona Multimedia, LLC, sued the music director, the booster club and parent-members of the booster club for copyright infringement. Tresona Multimedia alleged that it owned the copyrights to the above songs and that its copyright interests were infringed upon because no licenses were obtained to allow the use of the above songs in the performances.
It turned out that Tresona had only been assigned certain copyright interests in the various songs. For instance, Tresona had apparently not received the public performance rights to Magic and the interests assigned in Hotel California and (I’ve Had the) Time of My Life were only partial interests, i.e. from only one of the two or more copyright holders. Thus, the defendants moved for summary judgment, which was granted by the district court. The district court, however, denied the defendants’ motion for attorneys’ fees after they prevailed. Both sides appealed the district court’s rulings to the Ninth Circuit Court of Appeals.
Last month, in Tresona Multimedia, LLC v. Burbank High School Vocal Music Association, et al. (decided March 23, 2020), the Ninth Circuit affirmed the summary judgment as to the defendants and held that the lower court erred in denying their motion for attorneys’ fees. The Ninth Circuit began by finding that the lower court had properly found that Tresona lacked standing to sue for infringement as to three of the songs: (I’ve Had the) Time of My Life; Hotel California; and Don’t Phunk with My Heart. The Court reasoned that under the Copyright Act, only a legal or beneficial owner of an “exclusive right under Copyright” of the particular right at issue could maintain an infringement claim.
In reliance on previous decisions, the Ninth Circuit recognized that when a co-owner of a copyright attempts to issue a license as to the copyright, that co-owner lacks standing to sue third-party infringers because the co-owner’s interest is not exclusive. Thus, because Tresona’s interests came from only one co-owner of the respective songs’ copyrights, and had not obtained the consent of the other co-owners, the Ninth Circuit concluded that it lacked standing to sue for infringement as to those songs.
As to the fourth song, Magic, the lower court had held that the defendants had “qualified immunity” to use a segment of the song in the performances. The Ninth Circuit held, however, that it was not really an issue of “qualified immunity,” but rather “fair use,” that warranted summary judgment in the defendants’ favor. The Court noted the history of the “fair use” doctrine, which was developed as an “equitable rule of reason” in order to allow “courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.”
As a result, Congress later codified the “fair use” doctrine in the Copyright Act and provided courts with four non-exclusive factors to consider: (1) the character and purpose of the use, i.e. commercial v. non-profit; (2) the nature of the copyrighted work; (3) the amount of the work used compared to the work as a whole; and (4) the effect of the use on the potential value of the copyrighted work. Before turning to these factors, the Ninth Circuit found that the music director was an educator who was using the work for an educational purpose, which favored a finding of “fair use.”
With respect to the four factors, the Ninth Circuit concluded, after weighing each of the factors, in favor of “fair use.” First, the segment of Magic was used as part of a fundraiser for an educational program and it had been transformed to create a new meaning (i.e. different from when Magic was first performed in the movie, Xanadu. Second, the Ninth Circuit found that since the original arrangement of Magic was undoubtedly creative, this would favor against a finding of “fair use.” Third, there was only a twenty-second portion of Magic used (out of 4 minutes, 22 seconds in total) and that it had been rearranged to imbue it with new meaning. Thus, this favored a finding of “fair use.” Finally, the Ninth Circuit concluded that the use of the segment in the Rainmaker show would have little to no effect on the potential value of Magic. For instance, the sheet music for Rainmaker that incorporated the segment from Magic was given to the performing students free of charge. Further, anyone wanting to play the Magic song would have to purchase that sheet music to the song, since the Rainmaker sheet music would have only a small portion – not the whole song. Thus, after weighing these factors, the Ninth Circuit concluded the summary judgment to the defendants was proper.
Turning its attention to the issue of defendants’ attorneys’ fees, the Ninth Circuit noted that the lower court had denied them after finding that the defendants had only prevailed on “procedural grounds,” i.e., standing and qualified immunity. The Ninth Circuit held, however, that the lower court should have considered the following five facts (with an emphasis on the fourth one): (1) the degree of success obtained; (2) frivolousness; (3) motivation; (4) objective reasonableness of losing party’s legal and factual arguments; and (5) the need to deter future similar claims. The Ninth Circuit found that consideration of these factors favored a finding that attorneys’ fees should be awarded.
First, the defendants had won “across the board.” Second, the merits of Tresona’s arguments as to the standing issue were “slim to none.” Third, the Ninth Circuit found it troublesome that Tresona would employ aggressive litigation tactics against a public school music teacher and a non-profit booster club. Finally, the Ninth Circuit concluded that an award of attorneys’ fees to defendants was warranted to ensure that they were “properly compensated for defending against overreaching claims of copyright infringement and pressing a defense that benefits those educating our youth.” The Ninth Circuit remanded the matter back to the lower court to determine the amount of attorneys’ fees to be awarded.
The Tresona Multimedia case is a reminder that attorneys should carefully review their clients’ claims of infringement and determine whether “hard ball” tactics are warranted in light of the nature of the use of a copyrighted work and the type of defendant.