|
| [ Opinion ] [ Comment ] | |||
|
Bridgeport Music v. Dimension Films, et al. 410 F. 3d 792 (6th Cir. 2005)---------- Related Case ----------Bridgeport v. Combs (2007)
Comments “Get a license or do not sample,” Sixth Circuit Judge Ralph Guy states in a tone reminiscent of Judge Kevin Duffy, who opened his dreadful opinion in Grand Upright v. Warner (1991, presented on this site) with the biblical admonition “Thou shalt not steal.” Should, as Judge Guy asserts, a sound recording copyright provide the owner of it an absolute monopoly on one way of producing certain sounds? This approach may, as suggested by a law student’s critical analysis of Guy’s opinion (118 Harvard Law Review , pp. 1355-1362 [2005]) create a bright-line rule, but the legislative history of the relevant section of the Copyright Act (Section 114), and the public policy arguments made by the court do not support the court’s startlingly bold new position. This position asserts that for infringement disputes involving sound recordings, the determination of infringement does not turn on whether the works at issue are substantially similar (as it does with other fixed expression like musical works, novels, etc.). After a rehearing, Judge Guy modified his original opinion and suggested in his amended opinion (posted below) that the district court handling the remanded case, in applying his bright-line rule, might temper its application if the defendants were to raise a defense of fair use. The issues here are slippery, and the Harvard Law Review casenote sets them out nicely (a brief, but sharp, analysis -- well worth a second read). The Court asserted that producers of new popular works sample earlier works simply to save on production costs – not to facilitate the creation of new expressive works, which is the underlying purpose of copyright -- and that there is no public policy reason why sound recording copyright holders should be compelled to subsidize other producers, particularly when other producers either can license the copyright holder’s sound recording, or simply freely imitate the particular recorded sound in question. On the other hand, if a second comer appropriates expression from a musical work, a court should find that taking improper only if it finds that the musical expression in the second work is substantially similar to that of the first; to hold the second comer to a stricter standard would work against copyright’s fundamental objective of facilitating the creation of original works. But, as the Harvard casenote posits, the Court did not adequately consider the particular nature of the works in dispute when creating its bright-line rule: "Unlike a concerto composed in longhand, this new expression [i.e. rap music recorded by musically illiterate performers] does not exist independently of the sounds used to create it…[and] there may be appropriations from sound recordings for which prohibition would not best serve the purposes of copyright law…” It should be interesting to observe how courts in other circuits will handle copyright infringement disputes involving sampling, in the wake of this decision. * * * Bad Boy indeed -- in a related case, Bridgeport v. Justin Combs Publishing and Bad Boy Entertainment, et al., plaintiffs won impressive compensatory, punitive, and statutory damages after a jury determined that the defendants had blatently infringed upon Bridgeport's copyright in the song "Singing in the Morning." Defendants sampled a portion of this work in a song recorded by Christopher Wallace, better known among rap music fans as "Notorious B.I.G.". This appeals case does not concern questions of copyright infringement but rather dryer and intricate issues of the fairness and legality of the monetary damages won by the plaintiffs. The entertainer, Chris Wallace, a seasoned criminal by his late teens, recorded the infringing song "Ready to Die" a few years before he was shot to death at 24, purportedly at the instigation of his rivals in the rap music industry. [ Back to Top ]
Opinion by Ralph B. Guy, Circuit Judge The court issued an initial opinion in these consolidated cases on September 7, 2004. Bridgeport Music, Inc. v. Dimension Films, 383 F.3d 390 (6th Cir.2004). Through an Order entered December 20, 2004, the full court denied the petition for rehearing en banc filed by No Limit Films and a panel rehearing was granted only with respect to the issues discussed in Section II of the opinion as amended. Bridgeport Music, Inc. v. Dimension Films, 401 F.3d 647 (6th Cir.2004). After additional briefing and argument on rehearing, we adhere to our conclusions and amend the opinion to further clarify our reasoning. Plaintiffs, Bridgeport Music, Inc., Westbound Records, Inc., Southfield Music, Inc., and Nine Records, Inc., appeal from several of the district court's findings with respect to the copyright infringement claims asserted against No Limit Films. 1 This action arises out of the use of a sample from the composition and sound recording "Get Off Your Ass and Jam" ("Get Off") in the rap song "100 Miles and Runnin' " ("100 Miles"), which was included in the sound track of the movie I Got the Hook Up (Hook Up ). Specifically, Westbound appeals from the district court's decision to grant summary judgment to defendant on the grounds that the alleged infringement was de minimis and therefore not actionable. Bridgeport, while not appealing from the summary judgment order, challenges instead the denial of its motion to amend the complaint to assert new claims of infringement based on a different song included in the sound track of Hook Up. Finally, Bridgeport, Southfield, and Nine Records appeal from the decision to award attorney fees and costs totaling $41,813.30 to No Limit Films under 17 U.S.C. § 505. For the reasons that follow, we reverse the district court's grant of summary judgment to No Limit on Westbound's claim of infringement of its sound recording copyright, but affirm the decision of the district court as to the award of attorney fees and the denial of Bridgeport's motion to amend. I. The claims at issue in this appeal were originally asserted in an action filed on May 4, 2001, by the related entities Bridgeport Music, Southfield Music, Westbound Records, and Nine Records, alleging nearly 500 counts against approximately 800 defendants for copyright infringement and various state law claims relating to the use of samples without permission in new rap recordings. In August 2001, the district court severed that original complaint into 476 separate actions, this being one of them, based on the allegedly infringing work and ordered that amended complaints be filed. 2 The claims in this case were brought by all four plaintiffs: Bridgeport and Southfield, which are in the business of music publishing and exploiting musical composition copyrights, and Westbound Records and Nine Records, which are in the business of recording and distributing sound recordings. It was conceded at the time of summary judgment, however, that neither Southfield Music nor Nine Records had any ownership interest in the copyrights at issue in this case. As a result, the district court ordered that they be jointly and severally liable for 10% of the attorney fees and costs awarded to No Limit Films. Bridgeport and Westbound claim to own the musical composition and sound recording copyrights in "Get Off Your Ass and Jam" by George Clinton, Jr. and the Funkadelics. We assume, as did the district court, that plaintiffs would be able to establish ownership in the copyrights they claim. There seems to be no dispute either that "Get Off" was digitally sampled or that the recording "100 Miles" was included on the sound track of I Got the Hook Up. Defendant No Limit Films, in conjunction with Priority Records, released the movie to theaters on May 27, 1998. The movie was apparently also released on VHS, DVD, and cable television. Fatal to Bridgeport's claims of infringement was the Release and Agreement it entered into with two of the original owners of the composition "100 Miles," Ruthless Attack Muzick (RAM) and Dollarz N Sense Music (DNSM), in December 1998, granting a sample use license to RAM, DNSM, and their licensees. Finding that No Limit Films had previously been granted an oral synchronization license to use the composition "100 Miles" in the sound track of Hook Up, the district court concluded Bridgeport's claims against No Limit Films were barred by the unambiguous terms of the Release and Agreement. Bridgeport Music, Inc. v. Dimension Films, 230 F.Supp.2d 830, 833-38 (M.D.Tenn.2002). Although Bridgeport does not appeal from this determination, it is relevant to the district court's later decision to award attorney fees to No Limit Films. Westbound's claims are for infringement of the sound recording "Get Off." 3 Because defendant does not deny it, we assume that the sound track of Hook Up used portions of "100 Miles" that included the allegedly infringing sample from "Get Off." The recording "Get Off" opens with a three-note combination solo guitar "riff" that lasts four seconds. According to one of plaintiffs' experts, Randy Kling, the recording "100 Miles" contains a sample from that guitar solo. Specifically, a two-second sample from the guitar solo was copied, the pitch was lowered, and the copied piece was "looped" and extended to 16 beats. Kling states that this sample appears in the sound recording "100 Miles" in five places; specifically, at 0:49, 1:52, 2:29, 3:20 and 3:46. By the district court's estimation, each looped segment lasted approximately 7 seconds. As for the segment copied from "Get Off," the district court described it as follows:
Mindful of the limited number of notes and chords available to composers, the district court explained that the question turned not on the originality of the chord but, rather, on "the use of and the aural effect produced by the way the notes and the chord are played, especially here where copying of the sound recording is at issue." Id. (citations omitted). The district court found, after carefully listening to the recording of "Get Off," "that a jury could reasonably conclude that the way the arpeggiated chord is used and memorialized in the 'Get Off' sound recording is original and creative and therefore entitled to copyright protection." Id. (citing Newton v. Diamond, 204 F.Supp.2d 1244, 1249-59 (C.D.Cal.2002)) (later affirmed on other grounds at 349 F.3d 591 (9th Cir.2003)). No Limit Films does not appeal from this determination. Turning then to the question of de minimis copying in the context of digital sampling, the district court concluded that, whether the sampling is examined under a qualitative/quantitative de minimis analysis or under the so-called "fragmented literal similarity" test, the sampling in this case did not "rise to the level of a legally cognizable appropriation." 230 F.Supp.2d at 841. Westbound argues that the district court erred both in its articulation of the applicable standards and its determination that there was no genuine issue of fact precluding summary judgment on this issue. On October 11, 2002, the district court granted summary judgment to No Limit Films on the claims of Bridgeport and Westbound; dismissed with prejudice the claims of Southfield and Nine Records; denied as moot the motion of Bridgeport and Westbound for partial summary judgment on the issue of copyright ownership; and entered final judgment accordingly. Bridgeport and Westbound appealed. The facts relevant to the earlier denial of Bridgeport's motion to amend the complaint will be discussed below. No Limit Films filed a post-judgment motion for attorney fees and costs, which the district court granted for the reasons set forth in its memorandum opinion and order of April 24, 2003. Bridgeport, Southfield Music, and Nine Records appealed from that award. II. The district court's decision granting summary judgment is reviewed de novo. Smith v. Ameritech, 129 F.3d 857, 863 (6th Cir.1997). In deciding a motion for summary judgment, the court must view the evidence and reasonable inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment is appropriate when there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). In granting summary judgment to defendant, the district court looked to general de minimis principles and emphasized the paucity of case law on the issue of whether digital sampling amounts to copyright infringement. Drawing on both the quantitative/qualitative and "fragmented literal similarity" approaches, the district court found the de minimis analysis was a derivation of the substantial similarity element when a defendant claims that the literal copying of a small and insignificant portion of the copyrighted work should be allowed. After listening to the copied segment, the sample, and both songs, the district court found that no reasonable juror, even one familiar with the works of George Clinton, would recognize the source of the sample without having been told of its source. This finding, coupled with findings concerning the quantitatively small amount of copying involved and the lack of qualitative similarity between the works, led the district court to conclude that Westbound could not prevail on its claims for copyright infringement of the sound recording. 4 Westbound does not challenge the district court's characterization of either the segment copied from "Get Off" or the sample that appears in "100 Miles." Nor does Westbound argue that there is some genuine dispute as to any material fact concerning the nature of the protected material in the two works. The heart of Westbound's arguments is the claim that no substantial similarity or de minimis inquiry should be undertaken at all when the defendant has not disputed that it digitally sampled a copyrighted sound recording. We agree and accordingly must reverse the grant of summary judgment. A. Digital Sampling of Copyrighted Sound Recordings At the outset it is important to make clear the precise nature of our decision. Our conclusions are as follows: 1. The analysis that is appropriate for determining infringement of a musical composition copyright, is not the analysis that is to be applied to determine infringement of a sound recording. We address this issue only as it pertains to sound recording copyrights. 5 2. Since the district court decision essentially tracked the analysis that is made if a musical composition copyright were at issue, we depart from that analysis. 6 3. We agree with the district court's analysis on the question of originality. On remand, we assume that Westbound will be able to establish it has a copyright in the sound recording and that a digital sample from the copyrighted sound recording was used in this case. 4. This case involves "digital sampling" which is a term of art well understood by the parties to this litigation and the music industry in general. Accordingly, we adopt the definition commonly accepted within the industry. 5. Because of the court's limited technological knowledge in this specialized field, our opinion is limited to an instance of digital sampling of a sound recording protected by a valid copyright. If by analogy it is possible to extend our analysis to other forms of sampling, we leave it to others to do so. 6. Advances in technology 7 coupled with the advent of the popularity of hip hop or rap music have made instances of digital sampling extremely common and have spawned a plethora of copyright disputes and litigation. 7. The music industry, as well as the courts, are best served if something approximating a bright-line test can be established. Not necessarily a "one size fits all" test, but one that, at least, adds clarity to what constitutes actionable infringement with regard to the digital sampling of copyrighted sound recordings. B. Analysis [1] We do not set forth the arguments made by Westbound since our analysis differs somewhat from that offered by the plaintiff. Our analysis begins and largely ends with the applicable statute. Section 114(a) of Title 17 of the United States Code provides: The exclusive rights of the owner of copyright in a sound recording are limited to the rights specified by clauses (1), (2), (3) and (6) of section 106, and do not include any right of performance under section 106(4). Section 106 provides: Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
Section 114(b) states: (b) The exclusive right of the owner of copyright in a sound recording under clause (1) of section 106 is limited to the right to duplicate the sound recording in the form of phonorecords or copies that directly or indirectly recapture the actual sounds fixed in the recording. The exclusive right of the owner of copyright in a sound recording under clause (2) of section 106 is limited to the right to prepare a derivative work in which the actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality. The exclusive rights of the owner of copyright in a sound recording under clauses (1) and (2) of section 106 do not extend to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording. The exclusive rights of the owner of copyright in a sound recording under clauses (1), (2), and (3) of section 106 do not apply to sound recordings included in educational television and radio programs (as defined in section 397 of title 47) distributed or transmitted by or through public broadcasting entities (as defined by section 118(g)): Provided, That copies or phonorecords of said programs are not commercially distributed by or through public broadcasting entities to the general public. Before discussing what we believe to be the import of the above quoted provisions of the statute, a little history is necessary. The copyright laws attempt to strike a balance between protecting original works and stifling further creativity. The provisions, for example, for compulsory licensing make it possible for "creators" to enjoy the fruits of their creations, but not to fence them off from the world at large. 17 U.S.C. § 115. Although musical compositions have always enjoyed copyright protection, it was not until 1971 that sound recordings were subject to a separate copyright. If one were to analogize to a book, it is not the book, i.e., the paper and binding, that is copyrightable, but its contents. There are probably any number of reasons why the decision was made by Congress to treat a sound recording differently from a book even though both are the medium in which an original work is fixed rather than the creation itself. None the least of them certainly were advances in technology which made the "pirating" of sound recordings an easy task. The balance that was struck was to give sound recording copyright holders the exclusive right "to duplicate the sound recording in the form of phonorecords or copies that directly or indirectly recapture the actual sounds fixed in the recording." 17 U.S.C. § 114(b). This means that the world at large is free to imitate or simulate the creative work fixed in the recording so long as an actual copy of the sound recording itself is not made. 8 That leads us directly to the issue in this case. If you cannot pirate the whole sound recording, can you "lift" or "sample" something less than the whole. Our answer to that question is in the negative. 9 [2] Section 114(b) provides that "[t]he exclusive right of the owner of copyright in a sound recording under clause (2) of section 106 is limited to the right to prepare a derivative work in which the actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality." Further, the rights of sound recording copyright holders under clauses (1) and (2) of section 106 "do not extend to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording." 17 U.S.C. § 114(b) (emphasis added). The significance of this provision is amplified by the fact that the Copyright Act of 1976 added the word "entirely" to this language. Compare Sound Recording Act of 1971, Pub.L. 92-140, 85 Stat. 391 (Oct. 15, 1971) (adding subsection (f) to former 17 U.S.C. § 1) ("does not extend to the making or duplication of another sound recording that is an independent fixation of other sounds"). In other words, a sound recording owner has the exclusive right to "sample" his own recording. We find much to recommend this interpretation. 10 To begin with, there is ease of enforcement. Get a license or do not sample. We do not see this as stifling creativity in any significant way. It must be remembered that if an artist wants to incorporate a "riff" from another work in his or her recording, he is free to duplicate the sound of that "riff" in the studio. Second, the market will control the license price and keep it within bounds. 11 The sound recording copyright holder cannot exact a license fee greater than what it would cost the person seeking the license to just duplicate the sample in the course of making the new recording. Third, sampling is never accidental. It is not like the case of a composer who has a melody in his head, perhaps not even realizing that the reason he hears this melody is that it is the work of another which he had heard before. When you sample a sound recording you know you are taking another's work product. 12 This analysis admittedly raises the question of why one should, without infringing, be able to take three notes from a musical composition, for example, but not three notes by way of sampling from a sound recording. Why is there no de minimis taking or why should substantial similarity not enter the equation. 13 Our first answer to this question is what we have earlier indicated. We think this result is dictated by the applicable statute. Second, even when a small part of a sound recording is sampled, the part taken is something of value. 14 No further proof of that is necessary than the fact that the producer of the record or the artist on the record intentionally sampled because it would (1) save costs, or (2) add something to the new recording, or (3) both. For the sound recording copyright holder, it is not the "song" but the sounds that are fixed in the medium of his choice. When those sounds are sampled they are taken directly from that fixed medium. It is a physical taking rather than an intellectual one. This case also illustrates the kind of mental, musicological, and technological gymnastics that would have to be employed if one were to adopt a de minimis or substantial similarity analysis. The district judge did an excellent job of navigating these troubled waters, but not without dint of great effort. When one considers that he has hundreds of other cases all involving different samples from different songs, the value of a principled bright-line rule becomes apparent. We would want to emphasize, however, that considerations of judicial economy are not what drives this opinion. If any consideration of economy is involved it is that of the music industry. As this case and other companion cases make clear, it would appear to be cheaper to license than to litigate. 15 Since our holding arguably sets forth a new rule, several other observations are in order. First, although there were no existing sound recording judicial precedents to follow, 16 we did not pull this interpretation out of thin air. 17 Several law review and text writers, some of whom have been referenced in this opinion, have suggested that this is the proper interpretation of the copyright statute as it pertains to sound recordings. 18 Since digital sampling has become so commonplace and rap music has become such a significant part of the record industry, it is not surprising that there are probably a hundred articles dealing with sampling and its ramifications. It is also not surprising that the viewpoint expressed in a number of these articles appears driven by whose ox is being gored. As is so often the case, where one stands depends on where one sits. For example, the sound recording copyright holders favor this interpretation as do the studio musicians and their labor organization. On the other hand, many of the hip hop artists may view this rule as stifling creativity. The record companies and performing artists are not all of one mind, however, since in many instances, today's sampler is tomorrow's samplee. The incidence of "live and let live" has been relatively high, which explains why so many instances of sampling go unprotested and why so many sampling controversies have been settled. Second, to pursue further the subject of stifling creativity, many artists and record companies have sought licenses as a matter of course. 19 Since there is no record of those instances of sampling that either go unnoticed or are ignored, one cannot come up with precise figures, but it is clear that a significant number of persons and companies have elected to go the licensing route. Also there is a large body of pre-1972 sound recordings that is not subject to federal copyright protection. 20 Additionally, just as many artists and companies choose to sample and take their chances, it is likely that will continue to be the case. Third, the record industry, including the recording artists, has the ability and know-how to work out guidelines, including a fixed schedule of license fees, if they so choose. Fourth, we realize we are announcing a new rule and because it is new, it should not play any role in the assessment of concepts such as "willful" or "intentional" in cases that are currently before the courts or had their genesis before this decision was announced. Finally, and unfortunately, there is no Rosetta stone for the interpretation of the copyright statute. We have taken a "literal reading" approach. The legislative history is of little help because digital sampling wasn't being done in 1971. If this is not what Congress intended or is not what they would intend now, it is easy enough for the record industry, as they have done in the past, to go back to Congress for a clarification or change in the law. This is the best place for the change to be made, rather than in the courts, because as this case demonstrates, the court is never aware of much more than the tip of the iceberg. To properly sort out this type of problem with its complex technical and business overtones, one needs the type of investigative resources as well as the ability to hold hearings that is possessed by Congress. These conclusions require us to reverse the entry of summary judgment entered in favor of No Limit Films on Westbound's claims of copyright infringement. Since the district judge found no infringement, there was no necessity to consider the affirmative defense of "fair use." On remand, the trial judge is free to consider this defense and we express no opinion on its applicability to these facts. III. [3][4] Bridgeport's substantive appeal is from the denial of leave to file a second amended complaint that would have asserted new claims of infringement based on the inclusion of a different song, called "How Ya Do Dat," in the sound track of Hook Up. 21 We review the denial of a motion to amend for abuse of discretion, except to the extent that it is based on a legal determination that the amendment would not withstand a motion to dismiss. Wade v. Knoxville Utils. Bd., 259 F.3d 452, 459 (6th Cir.2001). Leave to amend a pleading shall be freely given "when justice so requires." FED. R. CIV. P. 15(a). Undue delay in filing, lack of notice to the opposing party, bad faith by the moving party, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party, and futility of amendment are all factors which may affect the decision. Delay by itself is not sufficient reason to deny a motion to amend. Notice and substantial prejudice to the opposing party are critical factors in determining whether an amendment should be granted. Head v. Jellico Hous. Auth., 870 F.2d 1117, 1123 (6th Cir.1989) (quoting Hageman v. Signal L.P. Gas, Inc., 486 F.2d 479, 484 (6th Cir.1973)). "When amendment is sought at a late stage in the litigation, there is an increased burden to show justification for failing to move earlier." Wade, 259 F.3d at 459 (citing Duggins v. Steak 'N Shake, Inc., 195 F.3d 828, 834 (6th Cir.1999)). A. Facts Plaintiffs commenced this action in May 2001, and filed an amended complaint in September 2001. In November 2001, the district court entered a scheduling order which required that any motion to amend pleadings be filed far enough in advance of April 1, 2002, to allow briefing to be completed by that date. Discovery was to be completed by May 21, 2002. On March 18, 2002, the district court extended the time for amending pleadings with the proviso that it would have to be done in time to avoid extending discovery beyond May 21, 2002. On April 15, 2002, plaintiffs' counsel received a "cue sheet" for Hook Up that apparently alerted Bridgeport to the presence of another song in which it held a copyright interest. Specifically, Bridgeport claims 37% interest in the composition "How Ya Do Dat" ("How Ya") under a Release and Agreement dated October 21, 1998, that granted permission to use a sample from the composition "One of Those Funky Things" in "How Ya." While there was disagreement about whether discovery made available as early as October 2001 should have alerted Bridgeport of this claim, there is no dispute that the presence of "How Ya" was readily observable from watching the movie. In fact, the magistrate judge noted that the "cue sheet" appears to be a list of credits from the end of the film. Plaintiffs moved to amend on April 19, 2002, and No Limit Films opposed the motion in a response filed on April 26, 2002. On May 6, 2002, the magistrate judge recommended that the motion be denied. Plaintiffs filed objections on May 16, 2002, and defendant responded on May 30, 2002. The discovery cutoff date, May 21, had passed, but the deadline for completing depositions had been extended to June 14, 2002. But, the deadline for filing dispositive motions continued to be June 21, 2002. No Limit Films filed its motion for summary judgment on that date. On August 14, 2002, the district court entered its order overruling plaintiffs' objections, denying plaintiffs' motion to amend, and denying plaintiffs' further motion to certify the issue for appeal. B. Analysis [5][6] Bridgeport maintains the district court abused its discretion by denying leave to amend on the grounds of unjustified delay and in the absence of a finding of prejudice to the defendant. It is true that, ordinarily, delay alone will not justify the denial of leave to amend the complaint. Morse v. McWhorter, 290 F.3d 795, 800 (6th Cir.2002). Delay, however, will become "undue" at some point, "placing an unwarranted burden on the court," or " 'prejudicial,' placing an unfair burden on the opposing party." Morse, 290 F.3d at 800 (citing Adams v. Gould Inc., 739 F.2d 858, 863 (3d Cir.1984)). Had the district court made an explicit finding of prejudice, very little would need to be said in affirming the denial of leave in this case. The district court's order, although brief, touched on undue delay and prejudice, explaining: The plaintiffs object to the Magistrate Judge's conclusion that plaintiffs had not offered a sufficient reason for failing to amend their complaint to add claims and parties by the deadline set by the Court. Plaintiffs argue that this deadline was modified by subsequent order, and that the Magistrate Judge erred under Sixth Circuit law by not allowing the amendments in the interests of justice. The defendants respond that [the] Magistrate Judge correctly concluded that, under the circumstances of this case, amendment on the eve of the close of discovery would be prejudicial to defendants and unduly delay trial. After careful consideration of the entire record, the Court adopts and approves the Magistrate Judge's Report and Recommendation. The plaintiffs' objections are overruled. The interest of justice in this case requires that plaintiffs show good cause why the Court should allow amendment of their complaint to add a claim and parties after the Court's deadline for such amendments, which the plaintiffs have failed to do. [7] To the extent that this brief discussion leaves doubt that a finding of prejudice was made, we may sustain a denial of leave to amend on grounds that are apparent from the record. Morse, 290 F.3d at 801. Defendant clearly argued that it would be unfairly prejudiced if required to respond to a distinct new claim of infringement with only a few weeks of discovery remaining. Plaintiffs focus on the magistrate judge's mistaken reliance on the April 1 deadline for seeking leave to amend. Nonetheless, as defendant argues, plaintiffs' motion was not timely because the district court required that any amendments be sought in sufficient time that discovery could be completed before May 21. Also, the record reflects that although there were extensions of discovery beyond that date, extensions were only granted to allow the completion of certain depositions and did not affect the deadline for filing dispositive motions. We find no abuse of discretion in the district court's denial of leave to raise new claims based on a different song, by a different artist, in the movie. IV. [8] Bridgeport, Southfield Music, and Nine Records appeal from the decision to award $41,813.30 in attorney fees and costs to No Limit Films as a prevailing party under 17 U.S.C. § 505. Apportioning the award between these plaintiffs, the district court ordered that Southfield and Nine Records be held liable, jointly and severally, for 10% of the total. The district court also found that no award was warranted against Westbound Records because its claims were objectively reasonable and based on a developing area of copyright law. As a result, the amount of fees reasonably incurred in defense of this action were reduced by 50%. Plaintiffs do not challenge the calculation of the fees or the inclusion of any particular item. [9] A court may, in its discretion, award costs, including reasonable attorney fees, to the prevailing party in a civil suit under the Copyright Act. 17 U.S.C. § 505. 22 Our review is for abuse of discretion. Coles v. Wonder, 283 F.3d 798, 804 (6th Cir.2002) (affirming award to prevailing defendant); Murray Hill Publ'ns, Inc. v. ABC Communications, Inc., 264 F.3d 622, 639 (6th Cir.2001) (reversing award to prevailing defendant). A district court abuses its discretion when it relies on clearly erroneous factual findings, improperly applies the law, or uses an erroneous legal standard. Adcock-Ladd v. Sec'y of Treasury, 227 F.3d 343, 349 (6th Cir.2000). [10][11] The discretion to award attorney fees under § 505 is to be exercised in an evenhanded manner with respect to prevailing plaintiffs and prevailing defendants, and in a manner consistent with the primary purposes of the Copyright Act. Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). " 'There is no precise rule or formula for making these determinations,' but instead equitable discretion should be exercised 'in light of the considerations we have identified.' " Id. at 534, 114 S.Ct. 1023 (quoting Hensley v. Eckerhart, 461 U.S. 424, 436-37, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)). 23 Several nonexclusive factors may be considered as long as they are "faithful to the purposes of the Copyright Act and are applied to prevailing plaintiffs and defendants in an evenhanded manner." Id. at 534 n. 19, 114 S.Ct. 1023. Those nonexclusive factors include: "frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." Id. (quoting Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir.1986)). Southfield and Nine Records, neither of which had an interest in "Get Off" or "100 Miles," argue that defendant did not truly prevail against them because they were "inadvertently" left in the amended complaint and they did not oppose dismissal in this case. They did not voluntarily dismiss their claims, however, as it was only in response to defendant's dispositive motions that they acquiesced in dismissal. Moreover, the inclusion of Southfield and Nine Records in the amended complaint in this case was less "inadvertent" than a reflection of the plaintiffs' failure to discriminate between defendants and claims. No Limit Films is a prevailing defendant as judgment was entered in its favor on all claims. 24 Concluding that Bridgeport's claim was objectively unreasonable, the district court indicated that the factor weighed heavily in favor of awarding fees. The district court, relying on its decision granting summary judgment to defendant, specifically found Bridgeport's claims were objectively unreasonable because Bridgeport had no ownership interest in "100 Miles" when the oral synchronization license was granted and offered no evidence to undermine the existence of a valid license. Bridgeport argues that its claim, although unsuccessful, was not objectively unreasonable because it was not aware No Limit would claim it had an oral license that preceded the Release and Agreement. As defendant responds, nothing in this record suggests Bridgeport would not have sued No Limit Films if it had been aware of the oral license. This brings us to what the district court called the deciding factor--the manner in which the plaintiffs litigated this action. This consideration, plaintiffs maintain, represents nothing more than an attempt to punish Bridgeport and deter the plaintiffs from pursuing reasonable, nonfrivolous claims in other cases under threat of an award of attorney fees. The district court reasoned as follows: The initial complaint in this action is so voluminous that, with exhibits, it is almost 1,000 pages long and takes days to read in its entirety. It is replete with diatribes against the music industry, but lacks concrete facts directed at specific defendants. Almost all of the 800 or so defendants in the initial complaint (representing what appeared to be almost the entirety of entities involved in making urban music) were lumped together in broad categories and descriptions of activities. The individual counts described the infringing conduct of the defendants by references to these broad generalizations, without any specific information as to what any individual defendant did to violate the Copyright Act. From that inauspicious beginning, this action proceeded in a like manner, with heavy emphasis on discovery disputes and motion practice and little attention paid to narrowing the issues and refining the claims. The plaintiffs repeatedly taxed the patience of the Court, from narrowing the margins on their memoranda to circumvent page limits, to filing voluminous pleadings that were long on argument but short on concrete facts or applicable legal authority. The plaintiffs took every opportunity to inundate the Court with paperwork, yet many of these motions were hastily prepared and often lacked sufficient legal or factual support. Most notably, the plaintiffs filed a motion for summary judgment on ownership yet failed to submit certified copies of the registration certificates for the copyrights they claimed to own. When this oversight was pointed out by the Magistrate Judge as being fatal to their summary judgment motion, the plaintiffs, instead of providing the documentation (which could be easily obtained from the U.S. Copyright Office), expended enormous effort in subsequent motion papers trying to convince the Court that the certified copies were unnecessary [until ordered to produce them]. The plaintiffs' tactics have contributed to the multiplication of fees by all parties, including the defendant here. This, combined with the determination that Bridgeport's claim was objectively unreasonable, merits an award for fees and costs against Bridgeport. To award fees simply because of the length of and lack of specificity in the original complaint or because of the number of claims brought by the plaintiffs would strike us as punitive and inconsistent with the purposes of the Copyright Act. See Murray Hill, 264 F.3d at 639-40 (reversing award of attorney fees, despite district court's criticism of the "voluminous burden" the case imposed, noting only that the law was unsettled and the plaintiff presented one or more colorable claims). The district court's criticisms go beyond just that, however, and are tied to conduct that complicated rather than streamlined the issues and contributed to the multiplication of fees for the defendant. While the district court did not articulate this consideration in terms of the Fogerty factors, and was not required to since they are nonexclusive, we see it as related to the recognized factor of deterrence and compensation. The unique posture of this case as one of hundreds brought in the same manner and asserting parallel claims, makes deterrence a particularly relevant and appropriate consideration. It is not the deterrence of objectively reasonable good faith claims, but the interest in motivating plaintiffs to sort through the objectively unreasonable ones and prosecute this at best cumbersome litigation in a way that discriminates between parties and claims. Plaintiffs charge that the defendant was equally responsible for multiplying fees, particularly by failing to designate a representative for deposition who had knowledge of the facts concerning the use of "Get Off" in Hook Up. While there is some suggestion that defendant contributed to increased discovery costs because multiple depositions were required, our review is deferential and the record does not demonstrate clear error in the district court's assessment of plaintiffs' litigation conduct. Ultimately, we cannot say the district court abused its discretion in this case, particularly given the 50% reduction in attorney fees to account for Westbound's claims. Nor should Southfield and Nine Records be relieved of the nominal award of fees in this case, as defendant was required to investigate whether they had any claim and affirmatively move for dismissal of their claims before it was conceded that they had no interest in the copyrighted works. AFFIRMED in part, REVERSED in part, and REMANDED for further proceedings consistent with this opinion. _________ Footnotes: 8 Needless to say, in the case of a recording of a musical composition the imitator would have to clear with the holder of the composition copyright. [ Back to Top ] Bridgeport v. Combs 507 F.3d 470 (6th Cir. 2007)
Opinion by Judge Rogers Plaintiffs, Bridgeport Music, Inc., and Westbound Records, Inc., owned the copyright to the Ohio Players' song, “Singing in the Morning.” Defendant music publishers FN1 released the Notorious B.I.G. album Ready to Die, the title song of which contained an unlicensed sample of “Singing in the Morning.” After plaintiffs brought suit against defendants for copyright infringement, a jury found in favor of plaintiffs and awarded compensatory and punitive damages. Bridgeport elected statutory damages under the federal Copyright Act, 17 U.S.C. § 101 et seq., and received the maximum award of $150,000. Westbound received its one-half share of compensatory damages, $366,939, and punitive damages in the amount of $3.5 million. Defendants make ten arguments on appeal: (1) the jury verdict was the result of passion and prejudice; (2) the district court erroneously excluded evidence that defendants argue demonstrates that they did not infringe willfully; (3) the district court erroneously bifurcated the trial into liability and punitive damages phases after the trial had commenced; (4) UMG was released from liability; (5) the district court erred by failing to apportion compensatory damages between the infringing and non-infringing portions of the song and album; (6) the jury's award of compensatory damages improperly included compounded interest; (7) the jury's award of compensatory damages improperly included prejudgment interest; (8) the jury's selection of May 4, 1998, as the date from which prejudgment interest should be calculated was in conflict with state law; (9) the jury's $3.5 million punitive damage award was unconstitutionally excessive; and (10) the district court erred by entering an injunction and impoundment order. Defendants are correct only with respect to issues six, seven, eight, and nine. The jury's compensatory damage award appears to have been the result of a mistake, which resulted in the award's including compounded, prejudgment interest. The date that the jury selected for the time from which prejudgment interest should be awarded was the beginning of the statute of limitations period, and thus conflicts with New York law (which governed Westbound's claims). The punitive damages award violates due process when measured against defendants' conduct, the harm that plaintiffs suffered, and the statutory damages that federal law permits. The other issues raised by defendants are without merit. We remand with instructions for the district court to offer plaintiffs a remittitur with respect to the compensatory and punitive damages award and to select a reasonable date from which to calculate prejudgment interest. I.
The title song of the album, “Ready to Die,” FN2 was produced by Osten Harvey, Jr. Sean “Diddy” Combs, BBE's principal, objected to the use of Jimi Hendrix's “Power of Love” as a sample in “Ready to Die” because the Hendrix song was denied clearance. Harvey then substituted a portion of the Ohio Players' song “Singing in the Morning.” BBE did not obtain a license to “Singing in the Morning” and authorized the release of Ready to Die with the understanding that not all samples on the album had been cleared. FN2. Throughout this opinion, I follow the convention of placing the album name in italics and the song name in quotation marks. A funk group, the Ohio Players, had released “Singing in the Morning” in 1972. Bridgeport Music, Inc. owned the copyright to the musical composition “Singing in the Morning,” and Westbound Records, Inc. owned the common-law copyright to the sound recording embodying the musical composition of “Singing in the Morning.” Between April 16, 1998, and September 30, 1999, Jane Peterer, Administrator at Bridgeport, wrote letters (hereinafter referred to as “the Peterer letters”) to BMG Records (which is a part of Arista Records), EMI Music Publishing (which, according to plaintiffs, administers JCP), and Big Poppa Music. In the letters, Peterer claimed that “Ready to Die” infringed on Bridgeport's copyright to “Singing in the Morning” and requested “a share of 25% of the new copyright ‘Ready to Die’ ” to be made retroactive. Plaintiffs did not receive a favorable response to the Peterer letters. On February 25, 2005, plaintiffs filed a complaint against defendants in the United States District Court for the Middle District of Tennessee.FN3 This action was related to an earlier lawsuit filed May 4, 2001, and the parties stipulated that the action would be deemed to have been filed on that date for statute of limitations purposes. Although both Bridgeport and Westbound initially sued under the federal Copyright Act, an amended complaint pleaded alternative claims of common law copyright infringement, unfair competition, and misappropriation. The district court dismissed Westbound's claims under the federal Copyright Act because the sound recording, to which Westbound owned the rights, was not fixed in a tangible medium on or after February 15, 1972, see 17 U.S.C. § 301(c), but held that New York law governed Westbound's common law claims. Thus, at trial, Bridgeport was seeking relief under the federal Copyright Act and Westbound was seeking relief under New York common law. Both plaintiffs also sought punitive damages. A nine-day trial ensued. Although neither party asked for, nor was in favor of, bifurcation, the district court decided, sua sponte, during the defendants' case-in-chief, to bifurcate the trial into liability and punitive damages phases. During closing arguments, plaintiffs' counsel asked the jury to award damages in the amount of $733,878 each to both Bridgeport and Westbound, and stated that although plaintiffs could not “collect double,” the district court would “make sure that there is no double recovery.” On March 20, 2006, a jury found each of the defendants liable to Bridgeport for copyright infringement under the federal Copyright Act. The jury awarded Bridgeport actual damages and profits of $733,878, and, in the alternative, statutory damages of $150,000. The jury also found each defendant, other than JCP, liable to Westbound under New York common law for copyright infringement and unfair competition. The jury awarded Westbound damages of $733,878. The jury chose May 4, 1998, as the date from which prejudgment interest would be awarded to Westbound. The jury also decided that Westbound was entitled to punitive damages against each defendant. After the punitive damages portion of the trial, the jury awarded Westbound punitive damages of $1.5 million from Bad Boy Entertainment, $1 million from Bad Boy, LLC, and $1 million from Universal Records/UMG Recordings, Inc. After the jury verdict, on April 28, 2006, defendants filed a “Motion for Mistrial or Modification of Verdict.” Among other things, defendants argued that plaintiffs were entitled to receive one compensatory judgment award of $733,878, and that Bridgeport and Westbound were not both entitled to separate awards of $733,878 each. The district court noted that plaintiffs' counsel argued during closing remarks that the district court would prevent double recovery, and did just that by ruling that the compensatory damages would be split equally between Bridgeport and Westbound. Because Bridgeport elected statutory damages, see 17 U.S.C. § 504(c)(1), the district court ruled that Bridgeport would receive $150,000 in statutory damages under the federal Copyright Act, whereas Westbound would receive its share of the compensatory damages award, $366,939. In addition, the district court awarded Westbound $276,763.93 in prejudgment simple interest from May 4, 1998. The district court, however, ruled against defendants with respect to their arguments about the exclusion of post-litigation settlement offers, bifurcation, apportionment of damages, punitive damages, and the date from which prejudgment interest should have been awarded. II. Defendants raise three issues on appeal that, if we were to agree had merit, would require a new trial. These issues, however, do not have merit and therefore we affirm the district court's judgment entered on the verdict with respect to these issues.
The district court did not abuse its discretion by denying defendants' post-verdict motion for a mistrial based on defendants' arguments that the verdict was the result of the “passion and prejudice” of the jury. We reach this conclusion because the purportedly improper comments made by plaintiffs' counsel were not sufficiently prejudicial. If statements made during the course of closing arguments are improper, then this court may only set aside the verdict if “there is a reasonable probability that the verdict” was influenced by those arguments. Strickland v. Owens Corning, 142 F.3d 353, 358 (6th Cir.1998) (quotation omitted). Defendants did not object to the purportedly improper statements made by plaintiffs' counsel during closing argument and instead raised this issue for the first time in a post-trial brief that they filed on May 31, 2006. Because defendants failed to object during closing arguments, we require a heightened degree of prejudice in order to grant a new trial. Id.; see also Portis v. Grand Trunk W. R.R. Co., 28 F.3d 1214, 1994 WL 362110, at 3, 1994 U.S.App. LEXIS 17399, at *10-12 (6th Cir.1994) (reviewing for “gross injustice” where party failed to object). In the context of the entire closing argument and trial, the comments of plaintiffs' counsel were not sufficiently prejudicial to warrant a new trial. Defendants refer to a number of statements that plaintiffs' counsel made during closing arguments, but do not explain why each statement was improper. From the context of defendants' argument, it appears that they are arguing that some of these statements constituted improper appeals to local bias and that other statements improperly referred to defendants as large corporations. For example, plaintiffs' counsel argued to the jury, “This is a joke. They think they can come down here to Nashville, Tennessee, and pull a fast one on the six of you.” Plaintiffs' counsel also argued, "If it is okay to be looked down on and if it is okay to do what the defendants did, then I guess you have to tell them that. But if it is not okay, if in Nashville, Tennessee, we're not going to put up with that, then it is up to you. You six people today stand for the community that we live in." With respect to punitive damages, plaintiffs' counsel repeatedly asked the jury to “tell the world that [what defendants did] is not going to happen in Nashville, Tennessee.” Plaintiffs' counsel also, one time, referred to one of the defendants as a “multi-million dollar company,” and implied that defendants' expert was “a fancy guy from New York.” Cases relied on by plaintiffs are distinguishable. In Whitehead v. Food Max, 163 F.3d 265, 275-78 (5th Cir.1998), the Fifth Circuit held that counsel's comments that appealed to local bias were prejudicial where counsel also ignored the district court's rulings on objections made by the other party and when considered with other prejudicial comments, including counsel's “improper ‘Golden Rule’ argument,” and the size of the jury's verdict. In Pingatore v. Montgomery Ward & Co., 419 F.2d 1138, 1142-44 (6th Cir.1969), this court held that a new trial on damages was required when, during closing arguments, plaintiffs' counsel cursed, shouted, tore papers used by opposing counsel, and placed an empty chair before the jury and asked where the defendant corporation was. Here, there is no similar outrageous conduct by plaintiffs' counsel other than the improper references to Nashville and New York. Defendants only point to the fact that the jury deliberated for less than three-and-one-half hours and awarded plaintiffs the same amount of damages that plaintiffs demanded. Together, these considerations do not rise to the level of prejudice that would require a new trial. The district court also did not abuse its discretion by rejecting defendants' argument that the amount of compensatory damages that the jury awarded was not supported by proof, and thus could only have been the product of prejudice, because the jury awarded the same amount of damages that plaintiffs demanded. Plaintiffs asked for $733,878 in damages each for Bridgeport and Westbound, and the jury complied. In a post-trial brief in response to the district court's order requesting briefing on remaining issues of law, plaintiffs stated that Westbound was only entitled to $706,888 because the amount that they asked for and were given by the jury included $28,140 in profits for JCP, to which plaintiffs conceded they were not entitled.FN4 But defendants point out that if one were to add the $28,140 that Westbound excluded to the $706,688 that plaintiffs stated in their post-trial brief that Westbound was entitled to, the resulting amount is $734,828, not the $733,878 that plaintiffs requested from the jury. Defendants also argue that the damages award cannot be supported by the testimony of plaintiffs' expert on damages, Dr. Michael Einhorn, who testified at length about defendants' profits and plaintiffs' damages. Dr. Einhorn showed the jury slides that summarized his testimony and prepared an expert report in which he calculated defendants' profits and plaintiffs' damages. According to Dr. Einhorn's testimony, Bridgeport's total damages award should have been $842,688, with interest, and $768,232, without interest, and Westbound's total damages award should have been $758,634, with interest, and $688,523, without interest. To the extent that the jury included compounded, prejudgment interest in the damages award, the award was supported by the evidence, as the award was-without the interest-less than Dr. Einhorn's estimates for both plaintiffs. It strongly appears that the jury did include compounded, prejudgment interest, as discussed separately in Part III.B., infra. Even if the jury did not consider compounded, prejudgment interest in calculating the damages award, the district court did not abuse its discretion. The jury was within a range supported by Dr. Einhorn's testimony, and even defendants' counsel during closing argument stated that Dr. Einhorn's testimony supported a damages award of “$800,000.” Perhaps the jury was sloppy in calculating a damages award, and perhaps the jury thought that the number plaintiffs argued was the correct amount supported by the evidence, but given that the jury awarded an amount in a range that the evidence supported, and lower than the amount that defendants argued that plaintiffs' evidence supported, no gross injustice occurred.
The district court properly precluded defendants from offering as evidence, during the liability phase of the trial, defendants' post-litigation settlement offers, which defendants argue constitute evidence that they did not infringe willfully. Under the federal Copyright Act, a plaintiff may receive up to $150,000 in statutory damages if “the infringement was committed willfully.” 17 U.S.C. § 504(c)(2).FN5 Under New York law, punitive damages for common law copyright infringement and unfair competition are available “where a wrong is aggravated by recklessness or willfulness.” Roy Export Co. v. CBS, Inc., 672 F.2d 1095, 1106 (2d Cir.1982). The jury ultimately found that defendants' infringement was willful. Defendants' evidence of post-litigation settlement attempts was inadmissible under Federal Rule of Evidence 408. Rule 408 provides that settlement offers are “not admissible to prove liability for or invalidity of the claim or its amount” but “does not require exclusion when the evidence is offered for another purpose.” Fed.R.Evid. 408 (2005). The district court held that defendants' evidence fell within the exclusion clause of Rule 408 and that the “another purpose” clause did not apply because “the other purpose for which [the evidence] is offered is not appropriate.” Further, in a post-trial order denying defendants' Motion for Mistrial or Modification of Verdict with respect to the admissibility of settlement evidence, the district court noted, “Defendants were permitted to introduce such evidence during the punitive damages phase of the trial, and the jury nevertheless awarded punitive damages. Defendants were also permitted to introduce evidence regarding the Peterer pre-litigation letters at the liability phase of the trial.” The district court's exclusion of defendants' evidence under Rule 408 was not an abuse of discretion, United States v. Perry, 438 F.3d 642, 647 (6th Cir.2006), because the evidence was not relevant to the issue of liability. FN6 One of the principal justifications for Rule 408 is that evidence of settlement offers is irrelevant. See Fed.R.Evid. 408 (Advisory Committee Notes); Urseth v. City of Dayton, 680 F.Supp. 1084, 1098 (S.D.Ohio 1987) (“[A] settlement offer or the fact of settlement negotiations is not direct evidence regarding the factual issues in a case.”). Here, the only issue to which the evidence of settlement offers might have been relevant was to show that defendants did not act reprehensibly, and that plaintiffs were thus not entitled to a large punitive damages award. However, the fact that defendants offered to settle a lawsuit already brought by plaintiffs for past acts of infringement is not at all probative of whether defendants infringed willfully, and such a fact, therefore, was not relevant. Defendants' arguments for why the district court erred are unpersuasive. First, defendants argue that evidence of settlement offers does not in this case “contravene Rule 408 or its spirit” because the goal of Rule 408 is to encourage settlement offers (and here, the offerors were the parties seeking to admit the offers). However, there is an alternative goal of Rule 408, discussed above, which is to exclude evidence that is frequently irrelevant. Second, Defendants argue that the evidence of settlement offers was offered for “another purpose,” namely, to rebut plaintiffs' evidence of willfulness. Although rebutting evidence that another party introduces may be an acceptable other “purpose” under Rule 408, defendants' evidence here did nothing to rebut plaintiffs' evidence. Whereas plaintiffs' evidence of its pre-litigation settlement offers was probative of the fact that defendants had knowledge of, but disregarded, the infringement, defendants' evidence was not relevant to knowledge of the infringement. Instead, defendants' evidence purported to demonstrate that defendants did not have a “malicious” state of mind. This was not relevant to the issue of whether defendants infringed willfully. In addition, the district court did not prohibit defendants from rebutting plaintiffs' willfulness allegations with relevant evidence, such as evidence of how defendants responded to the Peterer letters. See J.A. 114. Furthermore, the district court permitted defendants to offer their evidence of settlement offers during the punitive phase of the trial, where that evidence actually might have been relevant. Because the evidence that defendants sought to have admitted was not relevant to any issue that the jury needed to decide, the district court's alternative holding that the evidence “would confuse the jury,” and thus was inadmissible under Federal Rule of Evidence 403, was also not an abuse of discretion. The evidence might, as the district court concluded, have improperly confused the jury, as it pertained to collateral and irrelevant events. Also, given the evidence's lack of probative value, the risk of unfair prejudice “substantially outweighed” the evidence's probative value. Finally, even if the district court erred by excluding defendants' evidence, such error would have been harmless. During the punitive damages phase of the trial, defendants introduced the evidence that was excluded from the liability phase, yet the jury still awarded Westbound $3.5 million in punitive damages. If the excluded evidence would have made a difference with respect to the jury's determination that defendants acted willfully, surely the jury would not have awarded such a large amount of punitive damages (so large, in fact, that defendants argue it violated due process) after hearing the evidence.
The district court did not abuse its discretion by bifurcating the trial into liability and punitive damages phases. “The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim ... or of any separate issue....” Fed.R.Civ.P. 42(b). A district court's decision to bifurcate a trial is reviewed for an abuse of discretion. Wilson v. Morgan, 477 F.3d 326, 339 (6th Cir.2007). Here, defendants argue that the district court abused its discretion by bifurcating the trial during defendants' case-in-chief, and thus prejudiced defendants by admitting only plaintiffs' evidence relevant to the issue of punitive damages during the liability phase. Although “[s]ound judicial practice requires that, so far as practicable, the trial court's decision to bifurcate proceedings occur prior to trial,” Helminski v. Ayerst Labs., 766 F.2d 208, 213 n. 3 (6th Cir.1985), “[t]he late bifurcation of a trial does not constitute reversible error in the absence of a showing of prejudice,” id. at 212. Defendants were not, however, prejudiced by the district court's decision. Defendants sought to admit evidence of their settlement offers that they argue would have rebutted plaintiffs' evidence of plaintiffs' settlement offers. The district court, upon learning that defendants were going to present this evidence, decided to bifurcate the trial. See J.A. 2912-13 (“As a result of the position of the defendant, I am going to bifurcate this hearing.... I want to make it clear as a result of your request I am now going to bifurcate the punitive damage issue because I think that's more appropriate given the testimony you seek to offer, so we're going to bifurcate the punitive damage issue. We're not going to have any settlement evidence before this jury on the liability question.”).FN7 But as discussed above in Part II.B., defendants' evidence of settlement offers was not relevant to the issue of liability, whereas plaintiffs' evidence of settlement offers showed that defendants' had notice of the infringement, and thus was relevant. Defendants argue that they were prejudiced by the bifurcation because plaintiffs were able to introduce all of their evidence with respect to punitive damages during the liability phase. It is true that plaintiffs stated to the district court, “I think that the proof that we have put on, quite frankly, is sufficient to the extent that Your Honor is going to allow settlement, any type of settlement discussions to be admitted.” But plaintiffs specifically limited this statement to “settlement” evidence, and in fact plaintiffs did present evidence at the punitive damages phase of the trial. In any event, the evidence that defendants sought to admit during the liability phase did not concern the issue of whether defendants acted willfully, while plaintiffs' evidence was relevant to the issue of willfulness (as discussed in Part II.B., supra), and the fact that plaintiffs' evidence was also relevant with respect to the amount of punitive damages did not place a legal impediment to the district court's bifurcating the trial.FN8 Furthermore, when defendants did introduce their evidence during the punitive damages phase of the trial, the jury nonetheless awarded a very large amount of punitive damages, which indicates that any error by the district court in bifurcating the trial was harmless. III. With respect to the issues that defendants raise regarding the amount of damages that the jury awarded, the district court did not err by entering judgment on a verdict where, according to defendants, the amount of damages failed to allocate profits to account for the fact that the damage award included profits from non-infringing material. However, the verdict was improper to the extent that it included prejudgment and compound interest, included a calculation of interest from an incorrect date, and included unconstitutionally excessive punitive damages.
The $733,878 in compensatory damages that the jury awarded did not, as defendants argue, impermissibly include profits not attributable to the infringement. A victim of copyright infringement may recover “any profits of the infringer that are attributable to the infringement.” 17 U.S.C. § 504(b); see also Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390, 399, 60 S.Ct. 681, 84 L.Ed. 825 (1940) (interpreting an earlier version of this statute). “In establishing the infringer's profits, the copyright owner is required to present proof only of the infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.” 17 U.S.C. § 504(b); see also Johnson v. Jones, 149 F.3d 494, 506 (6th Cir.1998) (applying burden-shifting approach of statute); Sheldon, 309 U.S. at 406, 60 S.Ct. 681 (“Where there is a commingling of gains, [the infringer] must abide the consequences, unless he can make a separation of the profits so as to assure to the injured party all that justly belongs to him.”). Here, plaintiffs met their initial burden of presenting proof of defendants' gross revenue. Plaintiffs presented evidence of defendants' profits from the album Ready to Die. Plaintiffs then estimated a fair allocation of profits to the song “Ready to Die” by dividing the album profits by the number of tracks on the album. (Plaintiffs used the same methodology for the original album, which contained seventeen tracks, and the re-release version of the album, which contained nineteen tracks.) The jury's verdict reflected this allocation. The jury acted within its province when it rejected defendants' argument that plaintiffs' allocation included profits attributable to non-infringing elements of the song “Ready to Die.” Defendants point to the testimony of their expert musicologist, Dr. Lawrence Ferrara, who evaluated the length of the infringing material in “Ready to Die” relative to the overall song, the licensing fee that an owner licensing the infringing material could have received, and the overall importance of the infringing material to the song, and concluded that the relative value of the infringing material was approximately 20.5%. Defendants also argue that the jury failed to consider that the song was memorable (and successful) because of certain lyrics relating to Notorious B.I.G.'s life and death.FN10 But, as the Eighth Circuit said in Andreas v. Volkswagen of America, Inc., “[t]he question of allocating an infringer's profits between the infringement and other factors, for which the defendant infringer carries the burden, is ‘highly fact-specific’ ... and should [be] left to the jury.” 336 F.3d 789, 797-98 (8th Cir.2003) (citation omitted). Because the jury simply returned a numerical amount for damages, and did not specify how it calculated damages, there is no way of knowing the jury's reasons for rejecting defendants' arguments. The jury could have agreed with Dr. Alexander Stewart, an expert witness for plaintiffs, who testified that defendants' expert, Dr. Ferrara, improperly employed a “strictly mathematical approach” in calculating the value of the infringing material to the song and that this failed to “tak [e] into account the significance of the passage to” the song. Or the jury could have simply not believed the testimony of defendants' expert witnesses in light of the jurors' having heard the song and concluded that the infringing material was a much more valuable component of the song. In any event, permitting the jury to determine that defendants failed to meet their burden of proving profits attributable to factors other than the infringing material was not reversible error. The jury also acted within its province when it rejected defendants' argument that plaintiffs' allocation failed to consider that the song “Ready to Die” contributed little to the success of, and therefore the profits from, the album Ready to Die. The jury could have agreed with plaintiffs' expert, Dr. Einhorn, who testified that over “the course of time, ... all songs do tend to contribute equally” to the profits of an album and that although factors such as radio play, promotion, and music videos for particular songs might initially drive album sales, “it is not clear to [him] how to determine what song had any more or less salability ten years down the road.” The jury also could have agreed with Dr. Einhorn that, with respect to the re-release of the album, which contained new material, “[i]t is very difficult to determine without any kind of objective evidence, any kind of survey how much in that constellation of different new products was attributable to the new songs that were added” at the time of the re-release. Or the jury could have found simply that defendants' subjective evidence on the value of the song to the album as a whole was insufficiently persuasive to meet defendants' burden.
The amount of compensatory damages that the jury awarded, however, mistakenly included compounded, prejudgment interest.FN11 “This Circuit has determined a jury verdict should not be remitted by a court ‘unless it is beyond the maximum damages that the jury reasonably could find to be compensatory for a party's loss.’ ” Gregory v. Shelby County, 220 F.3d 433, 443 (6th Cir.2000) (quoting Jackson v. City of Cookeville, 31 F.3d 1354, 1358 (6th Cir.1994)). An award must fall if, for example, it is “beyond the range supportable by proof” or is “the result of a mistake.” Id. Here, it is evident that the jury award was the result of a mistake. Plaintiffs acknowledged in a post-trial brief that the amount that they requested from the jury included compounded prejudgment interest. See J.A. 1592. The jury awarded the same exact amount that plaintiffs requested, which Dr. Einhorn's testimony about the proper amount of damages excluding interest does not support. (Dr. Einhorn's testimony supported a total award to Westbound without interest of $688,523.) The district court noted that the jury was not required to accept the testimony of Dr. Einhorn and instead was permitted to exercise its own judgment, but this ignores the fact that the jury must rest its decision on the evidence, and if Dr. Einhorn's testimony about damages was the only evidence upon which the jury could rely, then the jury could not properly have awarded damages in a higher amount. Because plaintiffs mistakenly asked for a damages award that included compounded prejudgment interest, and the jury mistakenly awarded plaintiffs just that, we reverse this portion of the district court's order and remand so that the district court may offer Westbound a remittitur in the amount of damages excluding compounded prejudgment interest.
We also reverse that part of the district court's order denying defendants' post-trial motion with respect to the issue of the date from which prejudgment interest should be assessed. Defendants argued in a post-trial motion to the district court that the jury did not choose a “single reasonable intermediate date” from which to award interest, as it was required to do under New York law. The district court denied the motion “because this issue was properly considered and resolved by the jury in accordance with the jury charge which accurately stated the law,” and “[t]he jury reasonably selected May 4, 1998 as the date from which prejudgment interest may be awarded.” Defendants argue that May 4, 1998, is not a “single reasonable intermediate date” because, even though defendants began exploiting plaintiffs' copyright earlier, that date represents the earliest date of the statute of limitations period. New York law provides that:
N.Y. C.P.L.R. § 5001(b) (McKinney 2007). The “single reasonable intermediate date” must be a date after “the earliest ascertainable date the cause of action existed.” The obvious intent of this provision is to estimate prejudgment interest on damages that plaintiffs receive. Reading the statute to mean that the “date the cause of action existed” can be a date earlier than the limitations period and that “a single reasonable intermediate date” can be the beginning of the limitations period necessarily awards prejudgment interest for damages incurred prior to the beginning of the limitations period. Because plaintiffs could not recover damages for infringement that occurred outside of the limitations period, they likewise could not receive prejudgment interest on damages incurred outside of the limitations period. Therefore, May 4, 1998, was not a “reasonable intermediate date.” New York law suggests that a remand for the district court to determine an appropriate date is appropriate. Defendants ask this court to select an intermediate date of April 1, 2002, the approximate midpoint between the date the limitations period began and the date the verdict was rendered. The district court, however, is in a better position, having heard the testimony in this case, to decide a reasonable intermediate date from which to assess interest. The statute provides that the date from which prejudgment interest should be calculated “shall be specified in the verdict,” but that “[i]f a jury is discharged without specifying the date, the court upon motion shall fix the date.” Id. § 5001(c). Although the statute does not speak to the situation where a jury returns a date inconsistent with the statute, this situation is analogous to one in which the jury returns no date at all. Therefore, the district court should fix the date for prejudgment interest.
Westbound's $3.5 million punitive damages award is unconstitutionally excessive and violates due process. After conducting a de novo review, see Bach v. First Union Nat'l Bank, 486 F.3d 150, 153 (6th Cir.2007), we conclude that this award was excessive in light of the Supreme Court's three “guideposts” for evaluating the constitutionality of a punitive damages award-the reprehensibility of defendants' conduct, the disparity between plaintiffs' harm and the award, and a comparison of the award and civil penalties in comparable cases. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003); BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996).FN12
Defendants' conduct was not so reprehensible as to justify a $3.5 million punitive damage award. “Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct.” Gore, 517 U.S. at 575, 116 S.Ct. 1589. The Supreme Court has instructed courts to determine the reprehensibility of a defendant by considering whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident. State Farm, 538 U.S. at 419, 123 S.Ct. 1513. “The existence of any one of these factors weighing in favor of a plaintiff may not be sufficient to sustain a punitive damages award; and the absence of all of them renders any award suspect.” Id. Only one of these factors is present in this case-the harm was the result of intentional malice or deceit. The jury concluded that defendants acted “willfully” in light of evidence that defendants ignored pre-litigation letters and re-released the album knowing that it contained an unauthorized sample. Defendants continue to argue that the use of the sample was due to a rogue producer (Harvey), that they did not receive the pre-litigation letters, and that they re-released the album under the impression that the present lawsuit would be settled. The jury, however, rejected these arguments and found that defendants acted willfully. Although not a strong showing of intentional malice or deceit, defendants' conduct was still somewhat reprehensible. None of the other reprehensibility factors are present. First, the harm in this case (copyright infringement) was purely economic and did not threaten the health or safety of others (and Westbound does not argue otherwise). Second, Westbound is not a financially vulnerable victim. Westbound argues that it is financially vulnerable because it is a small company that depends almost entirely on income from sampling, because defendants infringed “Singing in the Morning” instead of Jimi Hendrix's “Power of Love,” and because defendants had “financial clout” and “strength in the music industry worldwide.” Despite Westbound's size, Westbound has been a plaintiff in numerous similar lawsuits, and thus has been able to protect its rights in the courts. The fact that Westbound depends on income from sampling suggests that Westbound is not financially vulnerable, as its business model requires it vigilantly to sue on its copyrights. Defendants' refusal to use the Jimi Hendrix sample cuts both ways-it could mean that defendants actually tried to avoid copyright infringement, or it could mean, as Westbound argues, that defendants only avoided infringing copyrights owned by the powerful-but Westbound offers no evidence that the copyright owner of “Power of Love” was in a stronger financial situation than Westbound, a company that has proven its ability to protect its rights. Finally, defendants' wealth “cannot justify an otherwise unconstitutional punitive damages award,” State Farm, 538 U.S. at 427, 123 S.Ct. 1513, and thus should not be given great weight, Clark v. Chrysler Corp., 436 F.3d 594, 604 (6th Cir.2006). Finally, there is no evidence that defendants' infringement was one of a repeated number of actions. The repeated conduct factor “ ‘require[s] that the similar reprehensible conduct be committed against various different parties rather than repeated reprehensible acts within the single transaction with the plaintiff.’ ” Chicago Title Ins. Corp. v. Magnuson, 487 F.3d 985, 1000 (6th Cir.2007) (quoting Bach v. First Union Nat'l Bank, 149 Fed.Appx. 354, 356 (6th Cir.2005)). Here, Westbound argues that defendants' infringement involved repeated actions because defendants authorized the release of the Ready to Die album without confirming that all samples were legal and sampled “Singing in the Morning” on another track on the album. Westbound's first argument does not refer to other unlawful infringements, only the possibility that there were such acts (and defendants' indifference to that possibility). The second argument refers to the same transaction against the same plaintiff-the use of samples of “Singing in the Morning” on the Ready to Die album. Westbound also states that it is “patently unfair” for defendants to argue that they did not repeat the illegal sampling because defendants objected during trial to any references to other unauthorized samples. It was Westbound's obligation to introduce evidence of other unauthorized samples, and even though the district court excluded certain evidence of other ongoing lawsuits against defendants, Westbound fails to challenge those evidentiary rulings on appeal. In this case where only one of the reprehensibility factors is present, a ratio in the range of 1:1 to 2:1 is all that due process will allow. This conclusion is apparent from our court's precedent. In Clark v. Chrysler Corp., this court held that a punitive damages award of $3 million was unconstitutional in light of a damages verdict of approximately $471,258.26, only 50% of which the plaintiff was awarded (pursuant to comparative negligence principles), where only the fact that the conduct resulted in physical harm, notably, the loss of life, weighed in favor of reprehensibility. 436 F.3d at 601, 605, 608 (Opinion of Restani, J.); 436 F.3d at 612-14 (Kennedy, J., concurring in part and concurring in the judgment). The court instructed the district court to enter a punitive damage award of approximately $471,258.26, which Judge Restani concluded was appropriate after applying a 2:1 ratio to the plaintiff's 50% share of compensatory damages, id. at 608 (Opinion of Restani, J.), and Judge Kennedy concluded was appropriate after applying a 1:1 ratio to the total compensatory damage award. Id. at 613-14 (Kennedy, J., concurring in part and concurring in the judgment). Also, in Bach v. First Union National Bank, this court, after having previously decided that a punitive damages award of approximately $2.6 million on top of a $400,000 compensatory damages award was unconstitutionally excessive because the only reprehensibility factor that weighed in favor of a large punitive damages award was that plaintiff, an elderly widow, was a vulnerable victim, held that the district court's remitted punitive damages award of approximately $2.2 million was still excessive and ordered the district court to remit punitive damages to $400,000. 486 F.3d at 154-56. Our conclusion is supported by a case from the Eighth Circuit that concluded that a 1:1 ratio was appropriate where the compensatory damages award was large and the defendant's conduct was more reprehensible than in this case. In Williams v. ConAgra Poultry Co., the court reversed a punitive damages award of approximately $6 million, which was on top of a $600,000 compensatory damages award for a racial harassment claim under § 1981. 378 F.3d 790, 792-93 (8th Cir.2004). The court concluded that the district court improperly relied on evidence of non-similar acts of harassment, but that the defendant's disparate treatment of plaintiff was still reprehensible in light of evidence that defendant extended certain benefits to white managers and employees that it did not offer to black managers and employees. Id. at 797-98. The court also considered the fact that Title VII capped punitive damages at $300,000, and that the $600,000 in compensatory damages was “a lot of money,” and held that defendant's conduct was not “so egregiously reprehensible” to justify a punitive damages award of more than $600,000. Id. at 798-99.
The disparity between compensatory and punitive damages in this case further supports the conclusion that the punitive damages award is unconstitutional, for three reasons. First, the ratio of the overall damages award to the punitive damages award-approximately 9.5:1 ($3.5 million / $366,939)-is large. Although the Supreme Court has repeatedly rejected the use of bright-line rules, it has cautioned that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process,” State Farm, 538 U.S. at 425, 123 S.Ct. 1513, and it has noted that “an award of more than four times the amount of compensatory damages might be close to the line of constitutional impropriety.” Id. (citing Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23-24, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991)); see also Clark, 436 F.3d at 606. Second, the compensatory damage award itself is very large. The Supreme Court has made clear that “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” State Farm, 538 U.S. at 425, 123 S.Ct. 1513. In Bach, this court concluded that a $400,000 compensatory damages award was “substantial” and thus, applying “the hypothetical scenario described in State Farm, where the plaintiff has received a substantial compensatory damages award, and a ratio of 1:1 or something near to it is an appropriate result,” instructed the district court “to enter an order of remittitur reducing the punitive damages award to no more than $400,000.” 486 F.3d at 156-57. Also, in Pollard v. E.I. DuPont De Nemours, Inc., this court affirmed a punitive damages award of $2.5 million that the district court added to a total compensatory damages award of $2.2 million, which included approximately $1.2 million in back and front pay, because the ratio (1:1 overall and 2:1 when back and front pay were excluded) was close to “the 1-to-1 ratio mentioned in [ State Farm] for the largest [compensatory] awards.” 412 F.3d 657, 666-68 (6th Cir.2005). In the instant case, the amount of compensatory damages that Westbound was awarded, $366,939, is large and approximately the same amount as that awarded in Bach. See Bach, 486 F.3d at 156. Third, the compensatory damages award in this case included a punitive element. The “actual” harm that Westbound suffered is reflected in the amount of licensing fees that Westbound lost because of the infringement. In State Farm, the Supreme Court noted that a large punitive damages award is not justified where a compensatory damages award includes a punitive element that is duplicated in the punitive damages award. 538 U.S. at 426, 123 S.Ct. 1513. Under the federal Copyright Act, an infringer is liable for the copyright owner's actual damages and the profits of the infringer. See 17 U.S.C. § 504. This dual recovery of plaintiff's damages and defendant's profits serves two distinct purposes: damages compensate the copyright owner whereas profits “ ‘are awarded to prevent the infringer from unfairly benefitting from a wrongful act.’ ” Hamil Am., Inc. v. GFI, 193 F.3d 92, 103 (2d Cir.1999) (quoting H.R.Rep. No. 94-1476, at 161 (1976), reprinted in 17 U.S.C.A. § 504 at 146 (West 1996)). The purpose of awarding a plaintiff the defendant's profits from copyright infringement, therefore, overlaps substantially with the goals of punitive damages awards. It is undisputed here that the jury, in awarding Westbound damages under New York common law, followed the same formula and awarded actual damages plus profits. Westbound's actual damages from the infringement were lost licensing fees of $43,478 (without interest) and $51,946 (with interest). Accordingly, the ratio of the punitive damages award and the non-punitive element of the compensatory damages award is very high. Even if we were to accept Westbound's argument that the correct ratio is 3.5:1-which it calculates by including Bridgeport's share of compensatory damages ($366,939), even though Bridgeport elected statutory damages, and interest ($276,763.93)-the ratio indicates that the award is excessive. If these additional amounts were included within the compensatory damages award, that award would be significantly larger and, as discussed above, a substantial compensatory damages award means that a lower ratio is needed to satisfy the requirements of due process. See State Farm, 538 U.S. at 425, 123 S.Ct. 1513. In addition, the smaller ratio would not change the fact, also discussed above, that the compensatory damages award included a large punitive element. FN13
Finally, the amount of statutory damages available under the federal Copyright Act contributes to the conclusion that the punitive damages award in this case was unconstitutional. The Copyright Act provides that a plaintiff may elect statutory damages in lieu of actual damages and profits, and may ordinarily receive no more than $30,000 in statutory damages. 17 U.S.C. § 504(c)(1). But if the plaintiff proves that the “infringement was committed willfully,” the plaintiff may receive statutory damages of up to $150,000. Id. § 504(c)(2). Accordingly, the ratio of the punitive portion to the compensatory portion of statutory damages under the Act is 4:1 (($150,000-$30,000):$30,000). Of course, $150,000 is the maximum allowable, and thus would be the largest award that a victim of copyright infringement could receive irrespective of the reprehensibility of an infringer's conduct. Here, defendants' conduct, although willful, was not highly reprehensible. In addition, as discussed above, the size of the allowable ratio fluctuates with the size of the compensatory damages award, and thus the 4:1 ratio in the Act suggests that a smaller ratio for a larger damages award is appropriate.
Given the large compensatory damages award of $366,939, a substantial portion of which contained a punitive element, and the low level of reprehensibility of defendants' conduct, a ratio of closer to 1:1 or 2:1 is all that due process can tolerate in this case. Therefore, we remand to the district court for a remittitur of the punitive damages verdict (or a new trial). See Bach, 149 Fed.Appx. at 367. IV. Defendants raise two additional issues on appeal that do not concern the propriety of the trial or damages. First, one of the defendants, UMG, argues that plaintiffs released it from liability in 2003. Second, defendants argue that an injunction that the district court imposed after the trial was improper. We reject UMG's argument with respect to the release issue and also affirm the district court's injunction and impoundment order.
Plaintiffs did not release UMG from liability in an April 2003 settlement agreement that plaintiffs entered into with EMI April Music, Inc. In that agreement plaintiffs released, among others, licensees and sublicensees of EMI from certain claims, including those claims brought in the present lawsuit:
As a preliminary matter, plaintiffs' argument that UMG waived this issue by failing to raise it “in any post-trial motions” is simply incorrect as a factual matter. UMG raised the issue three times: first, in a Second Motion for Summary Judgment, again, in a Rule 50 motion for judgment as a matter of law, and a final time, in a renewed Rule 50 motion after the close of all the evidence.FN15 Therefore, UMG may raise the issue on appeal. With respect to the merits, plaintiffs are correct that there is no evidence in the record of a license between EMI and Bad Boy. Defendants claim in their brief that EMI licensed “Ready to Die” to Arista on behalf of Arista and Bad Boy (presumably as joint venturers). So far as we can tell, there is no licensing agreement in the record. When asked at oral argument for evidence to substantiate this claim, counsel for defendants directed this court to a portion of defendants' cross-examination of Robert Sullivan, an attorney for EMI. See J.A. 2107-17. In that examination, Sullivan testifies only that, hypothetically, if Bad Boy were a licensee of EMI and if UMG were a licensee of Bad Boy, then UMG would be a sublicensee of EMI and would be released from liability. J.A. 2112. Because there is no evidence of a license between EMI and Bad Boy, there is no need for the court to address plaintiffs' other arguments.
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.” FN16 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 & Da |