Jordan v. Sony BMG Music Entertainment Inc. , 354 F. App'x 942 ( 2009 )


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  •            IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT  United States Court of Appeals
    Fifth Circuit
    FILED
    December 8, 2009
    No. 08-20835                    Charles R. Fulbruge III
    Clerk
    MAURICE S JORDAN, professionally known as “Kenoe”,
    Plaintiff-Appellant
    v.
    SONY BMG MUSIC ENTERTAINMENT INC, as successor in interest for
    Sony Music, individually and doing business as Columbia Records; WESLEY
    ERIC WESTON, professionally known as Lil Flip; LUCKY PUBLISHING
    COMPANY,
    Defendants-Appellees
    Appeals from the United States District Court
    for the Southern District of Texas
    4:06-CV-1673
    Before HIGGINBOTHAM, GARZA, and PRADO, Circuit Judges.
    PER CURIAM:*
    Maurice Jordan appeals the grant of summary judgment dismissing his
    claims of co-ownership and accounting, copyright infringement, and breach of
    contract against Sony BMG Music Entertainment and Wesley Weston. We
    affirm in part and remand in part.
    *
    Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
    be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
    R. 47.5.4.
    No. 08-20835
    I
    This controversy stems from Maurice S. Jordan’s involvement in the
    creation of the songs “8 Rulez,” “Haters Still Mad,” and “We Ain’t Scared.”
    Jordan, professionally known as “Kenoe,” composes music and occasionally
    works as a music producer. Defendant Wesley Weston is an entertainer and
    recording artist, professionally known as “Lil Flip.”      Sony BMG Music
    Entertainment is in the music business, and, among other things, distributes
    sound recordings through the Loud Records label. Suckafree Records Inc. is a
    music company with which Weston worked to produce sound recordings.
    Four contractual agreements are relevant to the dispute between the
    parties. On January 10, 2002, Weston and Suckafree entered into the “Artist
    Agreement,” under which Weston would provide sound recordings to Suckafree.
    On the same date, Suckafree entered into the “Distribution Agreement” with
    Sony. Under the Sony/Suckafree distribution agreement Sony and Suckafree
    agreed to specific royalties and agreed that Sony (through Loud Records) would
    compute royalties due to Suckafree twice a year.       In addition, Sony and
    Suckagree entered into the “Distribution Agency Agreement,” under which Sony
    would distribute albums that Weston released prior to Suckafree establishing
    the relationship with Sony. Lastly, on March 27, 2002, Jordan entered into the
    “Production Services Agreement” with Suckafree. Under this agreement Jordan
    would produce three recordings for Weston and if Weston used one or more of the
    recordings on his album and Jordan would be entitled to producer’s royalties
    equal to “three percent (3%) per Recording [of] the sale of any such records
    embodying the Recordings.” The agreement also provided that Weston would
    pay Jordan a $3,000 advance against any royalties due to Jordan.
    2
    No. 08-20835
    Pursuant to these agreements, Jordan composed three melodies for
    Weston. Weston added rap lyrics over the melodies producing the songs “8
    Rulez,” “Haters Still Mad,” and “We Ain’t Scared.” These songs were first
    distributed by Sony on the album Underground Legend. In September 2002,
    Sony registered the sound recordings contained on the album with the United
    States Copyright Office. In March 2003, the defendants released a second album
    containing the songs, Lil’ Flip and Sucka Free Present: 7-1-3 and the
    Underground Legend. On May 22, 2003, Sony registered the sound recordings
    contained on the 2003 album with the Copyright Office. On June 1, 2007,
    Jordan registered a copyright in the melodies of the songs.
    The parties agree that Jordan and Weston were co-authors of the final
    songs. It is also undisputed that Weston transferred his interest in the songs to
    Suckafree under the Artist Agreement. Suckafree then granted a licence under
    the Distribution Agreement to Sony for the songs. The district court also found
    a genuine issue of material fact over whether Suckafree had also transferred its
    entire interest in the songs to Sony—making Sony a co-owner of the songs as
    opposed to simply a licencee.
    Between September 2003 and February 2006, Jordan repeatedly contacted
    Sony requesting royalty payments for his services under the Production Service
    Agreement with Suckafree. Sony did not pay and Jordan sued on May 16, 2006.1
    After each moved for summary judgment, the district court awarded summary
    judgment to both Sony and Weston; Jordan now appeals. Before us are Jordan’s
    claims for accounting and co-ownership regarding the sound recordings on the
    1
    The claim for copyright infringement was added January 18, 2008.
    3
    No. 08-20835
    albums, copyright infringement for unauthorized use of the melody, and breach
    of contract against Weston and Sony.2
    II
    We review a district court’s grant of summary judgment de novo.3
    Summary judgment is appropriate “if the pleadings, the discovery and disclosure
    materials on file, and any affidavits show that there is no genuine issue as to
    any material fact and that the movant is entitled to judgment as a matter of
    law.”4       “We resolve doubts in favor of the nonmoving party and make all
    reasonable inferences in favor of that party.” 5 However, “[n]o genuine issue of
    material fact exists if the summary-judgment evidence is such that no
    reasonable juror could find in favor of the movant.” 6 Generally, to survive
    summary judgment, a plaintiff must provide sufficient evidence to create a
    genuine issue of material fact.7              “This court has cautioned that conclusory
    allegations, speculation, and unsubstantiated assertions are inadequate to
    satisfy the nonmovant’s burden in a motion for summary judgment.” 8
    2
    The district court also dismissed various claims of fraud which were not appealed.
    3
    Noble Energy, Inc., v. Bituminous Cas. Co., 
    529 F.3d 642
    , 645 (5th Cir. 2008).
    4
    F    ED .   R. CIV . P. 56(c).
    5
    Dean v. City of Shreveport, 
    438 F.3d 448
    , 454 (5th Cir. 2006).
    6
    Jenkins v. Methodist Hosps. of Dallas, Inc., 
    478 F.3d 255
    , 260 (5th Cir. 2007).
    7
    See Celotex Corp., v. Catrett, 
    477 U.S. 317
    , 324-25 (1986).
    8
    Ramsey v. Henderson, 
    286 F.3d 264
    , 269 (5th Cir. 2002) (citations and internal
    quotations omitted).
    4
    No. 08-20835
    III
    Jordan maintains that both Sony and Weston are obligated by contract to
    pay royalties. Jordan argues that Sony is obligated through an implied contract,
    an agency relationship with Suckafree or in the alternative that Jordan is a
    third party beneficiary of the agreement between Sony and Suckafree. Jordan
    argues that Weston is obligated through the Production Services Agreement
    which he claims Suckafree signed on behalf of Weston. In granting summary
    judgment to Sony and Weston, the district court found that Jordan’s breach of
    contract claims were inadequately supported because Jordan provided no
    evidence of an enforceable contract with Sony or Weston. Essentially for the
    reasons stated by the district court in its opinion, summary judgment on the
    contract claims is proper.
    IV
    Jordan appeals the district court’s dismissal of his claims for co-ownership
    in the sound recordings as time-barred. Jordan argues that he is a co-owner of
    the final sound recordings. The district court found that Jordan’s claim for co-
    ownership and accounting against Sony was time-barred under the Copyright
    Act’s three year statute of limitations.9 The district court reasoned that Sony
    registered as sole owner of the final songs in September 2002 and the statute of
    limitations ran in September 2005. As Jordan sued in May 2006, the court found
    his claims untimely.
    The Copyright Act defines “joint work” as “a work prepared by two or more
    authors with the intention that their contributions be merged into inseparable
    9
    17 U.S.C. § 507(b).
    5
    No. 08-20835
    or interdependent parts of a unitary whole.” 10 “The authors of a joint work are
    coowners of copyright in the work,” 11 and each owner owes a duty of accounting
    to the other.12 While a claim for accounting is a state law claim and thus subject
    to state statutes of limitations,13 a claim for co-ownership of a copyright is
    subject to the federal statute of limitations.14
    The statute of limitations for civil claims under the Copyright Act is three
    years.15 In this Circuit a copyright claim accrues “when [the party] knew or had
    reason to know of the injury upon which the claim is based.” 16                   Under the
    Copyright Act, “[r]ecordation of a document in the Copyright Office gives all
    persons constructive notice of the facts stated in the recorded document.” 17
    However, the recorded document must contain information that would put the
    party on notice.18
    10
    17 U.S.C. § 101.
    11
    17 U.S.C. § 201(a).
    12
    See Goodman v. Lee, 
    78 F.3d 1007
    , 1012 (5th Cir. 1996).
    13
    
    Id. 14 See
    Cambridge Literary Props., Ltd., v. W. Goebel Porzellanfabrik G.m.b.H. & Co.
    Kg., 
    510 F.3d 77
    , 87-88 (1st Cir. 2007) (distinguishing Goodman on grounds that co-ownership,
    as opposed to accounting, is a federal issue governed by federal copyright law).
    15
    17 U.S.C. § 507(b) (“No civil action shall be maintained under the provisions of this
    title unless it is commenced within three years after the claim accrued.”)
    16
    Pritchett v. Pound, 
    473 F.3d 217
    , 220 (5th Cir. 2006); see also Groden v. Allen, 279
    Fed. App’x 290, 294 (5th Cir. 2008) (per curiam).
    17
    17 U.S.C. § 205(c); Daboub v. Gibbons, 
    42 F.3d 285
    , 291 (5th Cir. 1995); see also
    Latin Am. Music Co. v. Archdiocese of San Juan of the Roman Catholic & Apostolic Church,
    
    499 F.3d 32
    (1st Cir. 2007).
    18
    17 U.S.C. § 205(c)(1).
    6
    No. 08-20835
    The district court found that Sony’s recordation of its copyrights in the
    sound recordings provided notice to Jordan that Sony claimed sole ownership.
    Jordan maintains that the recordation of the songs was insufficient to provide
    notice, and that even if it was sufficient, he is not time-barred with respect to
    ownership of the sound recording on the 2003 album as Sony did not record its
    copyright in the 2003 album until May 22, 2003.19
    We find that the certificates of registration are sufficient to provide notice
    that Sony claimed sole ownership of the sound recordings on the 2002 album.
    The certificates list only Loud Records as the claimant, and the Copyright Office
    defines the claimant as the individual with the ownership of all rights in the
    property listed.20 The record indicates the summary page for the 2002 album
    includes a song listing that indicate recordings of “8 Rulez,” “Haters Still Mad,”
    and “We Ain’t Scared” are on the album, although the summary page for the
    2003 album contains no track listing. It appears the registration for the 2002
    album was sufficient to put Jordan on constructive notice.
    Sound recordings have a separate copyright from the underlying musical
    composition.21 It is unclear from the record whether there are two independent
    sound recordings, one on the 2002 album the other on the 2003 album, one sound
    recording included on both albums, or if the 2003 recording is derived from the
    19
    As the defendants note, Jordan provides little to no legal analysis in support of his
    claims; the court would be within its right to find the arguments insufficiently briefed.
    20
    37 C.F.R. § 202.3(a)(3) (“[A] copyright claimant is either: (i) The author of a work;
    (ii) A person or organization that has obtained ownership of all rights under the copyright
    initially belonging to the author”).
    21
    17 U.S.C. § 102(a)(2) & (7).
    7
    No. 08-20835
    2002 recording.22 The district court’s opinion suggests there are two different
    sound recordings as it referred to “versions” of the songs and the second
    certificate of registration for the sound recordings on the 2003 album suggests
    the sound recordings are distinct.            However, Sony claims that the sound
    recordings on the 2002 and 2003 albums are the same. The evidence on the
    record does not permit a conclusive finding. If there are two distinct sound
    recordings, then Jordan may not be time-barred with respect to the claim to the
    sound recordings on the 2003 album, as Jordan brought suit within three years
    of Sony’s registration of the 2003 copyright. On the other hand, if the 2003
    sound recording is the same as the 2002 sound recording, then the registration
    of the 2002 album put Jordan on notice of Sony’s claim of sole ownership.
    Jordan also argues he was not put on notice at the date of filing because
    of delays in the copyright office in publication of recordation. Jordan argues that
    publication of the registration certificates can take months to process, denying
    the public notice of their contents. Jordan provides no legal authority for this
    argument and such a finding would be in conflict with the express wording of the
    Copyright Act. We do not find this claim persuasive.
    Given the lack of clarity in the record with respect to the nature of the
    2003 sound recording, we remand to the district court for further findings on the
    22
    An owner of a copyright in a sound recording has the exclusive 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.” 17 U.S.C. § 114(b). Under 17 U.S.C.
    § 114(b), “[t]he exclusive right of the owner of copyright in a sound recording under [the right
    to derivative works] is limited to the right to prepare a derivative work in which the actual
    sounds fixed in the sound recording are rearranged, remixed, or othewise altered in sequence
    or quality.” However, “[t]he exclusive rights of the owner of copyright in 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.” 
    Id. 8 No.
    08-20835
    matter. With respect to the 2002 sound recording, we affirm the district court’s
    summary judgment that Jordan’s claim is time barred.
    V
    Jordan claims an action for accounting for a share of the proceeds Weston
    received in the sale of his interest in the sound recordings. The district court
    found that an action for accounting could only be asserted against a co-owner
    and that either way, his co-ownership claim was barred by the statute of
    limitations.
    Regardless of whether Jordan’s claim is barred by the statute of
    limitations, his argument fails on the merits. A joint owner is not entitled to a
    percentage of the profits from the sale of the other owner’s interest. An action
    for accounting is a matter of state law.23 “It is widely recognized that a co-owner
    of a copyright must account to other co-owners for any profits he earns from the
    licensing or use of the copyright.” However, this does not extend to the sale of
    a co-owner’s entire interest.24 A co-owner is entitled to sell his or her share in
    the property, and the purchaser becomes a co-owner with the remaining owner.
    Jordan has no right to the proceeds from the sale of Weston’s interest. The
    district court’s grant of summary judgment is affirmed.
    23
    Quintanilla v. Texas Television Inc., 
    139 F.3d 494
    , 498 (5th Cir. 1998) (“[T]he duty
    to account does not derive from the copyright law’s proscription of infringement. Rather it
    comes from general principles of law governing the rights of co-owners.” (internal quotations
    and citations omitted)).
    24
    Trevino v. Trevino, 
    64 S.W.3d 166
    , 174 (Tex. App.–San Antonio 2001, no. pet.) (“[W]e
    are aware of no such rule of law requiring a cotenant to share the proceeds generated by the
    sale or conveyance of his undivided interest in property. When a cotenant conveys his entire
    interest, his grantee simply succeeds to the grantor’s right, title, and interest in the common
    property.”).
    9
    No. 08-20835
    VI
    Lastly, Jordan appeals the dismissal of his claim for copyright
    infringement of his melodies. He argues that Weston did not have an interest
    in the underlying melodies and the district court erred in finding that Sony had
    a license from Weston to use the melodies. Jordan misconstrues the district
    court’s holding.        The district court found that there was no evidence of
    infringement of the musical compositions or underlying melodies, but rather the
    evidence indicated Sony only used the sound recordings, for which the court
    found Sony had a valid license or alternatively was a co-owner of.
    “[T]he owner of a copyright under this title has the exclusive rights to do
    and to authorize any of the following: (1) to reproduce the copyrighted work in
    copies or phonorecords; (2) to prepare derivative works based upon the
    copyrighted work.”25 “Anyone who uses the copyrighted material without the
    permission of the owner is liable for copyright infringement.” 26 “To establish a
    claim for copyright infringement, a plaintiff must prove that: (1) he owns a valid
    copyright and (2) the defendant copied constituent elements of the plaintiff’s
    work that are original.” 27         A sound recording and the underlying musical
    composition are separate works with distinct copyrights.28
    Jordan has conceded that he is a joint author of the sound recordings with
    Weston. The record demonstrates that Weston has, through his agreement with
    25
    17 U.S.C. § 106.
    26
    17 U.S.C. § 501(a).
    27
    Positive Black Talk Inc., v. Cash Money Records Inc., 
    394 F.3d 357
    , 267 (5th Cir.
    2004) (citations omitted).
    28
    17 U.S.C. § 102(a)(2) & (7).
    10
    No. 08-20835
    Suckafree and Suckafree’s agreement with Sony, either transferred his interest
    in, or granted a license to, the copyrights in the sound recordings. Sony was
    therefore entitled to use of the sound recordings. Jordan has presented no
    evidence—and the record does not contain any—suggesting Sony engaged in
    unauthorized use of Jordan’s melodies outside its rightful use of the sound
    recordings. For the reasons stated by the district court, we agree that summary
    judgment was proper.
    We AFFIRM the summary judgment on the breach of contract and
    copyright infringement claims and REMAND the claim of co-ownership and
    related accounting for further findings in accordance with this opinion.
    11