Yellowcake, Inc. v. Morena Music, Inc. ( 2021 )

1 2 UNITED STATES DISTRICT COURT 3 EASTERN DISTRICT OF CALIFORNIA 4 5 YELLOWCAKE, INC., CASE NO. 1:20-CV-0787 AWI BAM 6 Plaintiff ORDER FOLLOWING 7 v. SUPPLEMENTAL INFORMATION FROM COUNTERPLAINTIFF AND 8 MORENA MUSIC, INC., and EDUARDO COUNTERDEFENDANTS LEON dba Long Play Music, and DOES 1- 9 50 inclusive, 10 Defendants 11 _____________________________________ 12 MORENA MUSIC, INC, 13 Count-Plaintiff 14 v. 15 YELLOWCAKE, INC., COLONIZE MEDIA, INC., and JOSE DAVID 16 HERNANDEZ, 17 Counter-Defendants 18 19 This is a copyright dispute involving three copyrighted musical albums by the artist Los 20 Originales De San Juan. 21 In March 2021, the Court granted in part and denied in part a motion to dismiss 22 counterclaims. See Doc. No. 31. As part of the dismissal, the Court found that there was a 23 potential problem with the copyrights held by Counter-Plaintiff Morena Music, Inc. (“Morena”) 24 based on the publicly available registration information. The Court required the parties to address 25 the Court’s concerns through supplemental briefing and for Morena to specifically address the 26 challenges to the validity of its copyrights. The Court explained to Morena that its response 27 should in part “attempt to explain the apparent inaccuracies in the registration information and 28 explain what information was presented as part of its registration application.” Id. 1 The parties submitted their supplemental briefing. In relevant part, Morena acknowledges 2 that its copyrighted albums are identified as works for hire in the registrations. A declaration from 3 a Morena employee explains that listing the copyrighted albums as works for hire was inadvertent 4 and unintentional, was based on the employee’s honest understanding of the albums, that the 5 employee did not realize that Morena had a protectable ownership interest in the albums through 6 artistic contributions, the employee did not know that there were competing copyrights for the 7 albums that had already been filed with the copyright office, and that the copyright paperwork was 8 prepared and filed without consultation with counsel. See Doc. No. 33 (Durant Dec.). 9 The Copyright Act in relevant part provides that “no civil action for infringement of the 10 copyright in any United States work shall be instituted until preregistration or registration of the 11 copyright claim has been made in accordance with [the Copyright Act].” 17 U.S.C. § 411(a). 12 While this section does not impose a precondition to copyright protection, it does expressly 13 prohibit “copyright owners from bringing infringement actions without first properly registering 14 their work.” Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 959 F.3d 1194, 1197 (9th Cir. 15 2020); see also Alaska Stock, 747 F.3d at 678. 16 The Ninth Circuit has explained that, “once a defendant alleges that (1) a plaintiff’s 17 certificate of registration contains inaccurate information; (2) ‘the inaccurate information was 18 included on the application for copyright registration’; and (3) the inaccurate information was 19 included on the application ‘with knowledge that it was inaccurate,’ a district court is then 20 required to submit a request to the Register of Copyrights ‘to advise the court whether the 21 inaccurate information, if known, would have caused [it] to refuse registration.’” Unicolors, 959 22 F.3d at 1197 (quoting 17 U.S.C. § 411(b)(1)-(2)). Courts may “not consider in the first instance 23 whether the Register of Copyrights would have refused registration due to the inclusion of known 24 inaccuracies in a registration application.” Id. Additionally, “inadvertent mistakes on registration 25 certificates do not invalidate a copyright and thus do not bar infringement actions, unless . . . the 26 alleged infringer has relied to its detriment on the mistake, or the claimant intended to defraud the 27 Copyright Office by making the misstatement.” Jules Jordan Video, Inv. v. 144942 Canada, Inc., 28 617 F.3d 1146, 1156 (9th Cir. 2010) (quoting Lamps Plus, Inc. v. Seattle Lighting Fixture Co., 1 345 F.3d 1140, 1145 (9th Cir. 2003)); see also Gold Value Int'l Textile, Inc. v. Sanctuary Clothing, 2 Ltd. Liab. Co., 925 F.3d 1140, 1146 (9th Cir. 2019) 3 First, under Unicolors, the supplemental briefing confirms that Morena’s copyright 4 registrations in the albums at issue contain inaccurate information; Morena admits as much in its 5 briefing. See Doc. No. 34 at 2:22-24. Second, Morena did not include a copy of the copyright 6 applications. However, in the absence of a contrary statement from Morena, the Court will 7 assume that the copyright registrations accurately reflect the information that was included in the 8 copyright applications. Therefore, the Court concludes that the copyright applications contained 9 inaccurate information. Third, Counter-Defendants are alleging that the inaccuracies were 10 knowingly included in the applications. Morena clearly contends that its error was innocent 11 inadvertence. Counter-Defendants argue that the timing of the applications in relation to the 12 complaint in this case (four months later) and the creation of the albums (several years after the 13 albums were made), as well as declarations from a sound engineer on the albums and the principal 14 musician of Los Originales, demonstrate that the inaccuracies were knowingly and intentionally 15 made on the applications. The Court will not resolve at this time or through this supplemental 16 briefing process whether Morena knowingly included inaccuracies in the copyright applications. 17 See Doc. No. 31 at 33:17-25. Under Unicolors, for the Court to send an inquiry to the Register of 18 Copyrights, it is sufficient for Counter-Defendants to allege that the inaccuracies were knowingly 19 included in the application. See Unicolors, 959 F.3d at 1197. Therefore, the Court concludes that 20 the three requirements of Unicolors have been met. 21 Pursuant to Unicolors, the Court will send an inquiry to the Register of Copyrights to 22 determine whether the inaccurate information would have resulted in the refusal to register the 23 three albums as copyrighted material. Separate from this order, the Court will e-mail a draft letter 24 to counsel. Counsel will be given an opportunity to review the letter to offer suggestions or 25 corrections as may be warranted under the circumstances. However, simply because a change is 26 suggested or requested does not mean that the Court will make the change. The Court will inform 27 the parties whether a requested change will be made. The Court will file a copy of the letter that is 28 ultimately sent to the Register on the docket. 1 ORDER 2 Accordingly, IT IS HEREBY ORDERED that: The Register of Copyrights will be contacted to determine whether Morena Music’s three 4 copyrights would have been registered if the inaccuracies had been known to the Register 5 at the time of registration; 6 The issue of Morena Music’s mens rea with respect to the copyright 7 applications/registrations remains outstanding and will be determined in later proceedings; 8 | 3. The parties shall respond to all recipients of the Court’s e-mail with the draft letter to the 9 Register of Copyrights within five (5) days of receipt of the e-mail;' 10 | 4. The failure of a party to respond to the Court’s e-mail will be construed as a response that 11 the draft letter is acceptable as is. 12 13 IT IS SO ORDERED. 14 Dated: _May 5, 2021 7 Sz 7 Cb Lec -_-SENIOR DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 The response may make suggestions or request changes or state that the draft letter is acceptable as is.