Taryn Murphy v. Sergey Lazarev

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0790n.06
No. 14-5028
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
TARYN MURPHY and CHRIS LANDON, )
FILED
Oct 17, 2014
)
Plaintiffs-Appellants, ) DEBORAH S. HUNT, Clerk
)
v. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
SERGEY LAZAREV, ) COURT FOR THE MIDDLE
) DISTRICT OF TENNESSEE
Defendant-Appellee. )
)
)
BEFORE: GIBBONS and McKEAGUE, Circuit Judges; LAWSON, District Judge.
JULIA SMITH GIBBONS, Circuit Judge. Sergey Lazarev is a Russian pop artist and
entertainer. Taryn Murphy and Chris Landon are citizens of the United States and songwriters.
Murphy and Landon co-authored a song, Almost Sorry, which they registered with the United
States Copyright Office and pitched to Lazarev’s manager in 2006. In order that Lazarev exploit
the song, plaintiffs Murphy and Landon entered into a sub-publisher’s agreement with a
Moscow-based law firm, Levant & Partners, and into two licensing agreements with a Moscow-
based record label, Style Records. Almost Sorry and its Russian-language version, Zachem
Pridumali Lyubov, did well, but Murphy and Landon were remitted fewer royalties than they had
expected. They brought suit in federal district court against Lazarev and Style for breach of
contract and copyright infringement. Murphy and Landon voluntarily dismissed Style from the

The Honorable David M. Lawson, United States District Judge for the Eastern District
of Michigan, sitting by designation.
No. 14-5028
Murphy, et al. v Lazarev
case, and the district court granted summary judgment to Lazarev on all claims. On appeal,
plaintiffs reassert their claims that Lazarev waived his affirmative defenses by failing to file an
answer to their amended complaint and that Lazarev infringed their copyright to Almost Sorry.
We affirm.
I.
On April 14, 2005, Lazarev entered into a producer’s agreement with Style Records.
The purpose of the agreement was to create an exclusive relationship between Lazarev and Style
for the production, sale, and performances of three music albums recorded by Lazarev, as well as
singles, music videos, and other objects. Pursuant to the agreement, Style obtained exclusive
rights to exploit Lazarev’s performances, including audio and video recordings and recordings of
live performances, and to collect the proceeds from such performances during the term of the
agreement. Style retained the rights to the intellectual property described in the agreement “for
the whole duration of copyright and related rights as provisioned by the current law of [the]
Russian Federation.” In return, Style guaranteed to pay Lazarev royalties for the exploitation of
his performances after recoupment of expenses.
In pertinent part, Style undertook the obligation “[t]o sign author’s agreements with
owners of rights, authors [whose works Lazarev would record and perform] and to conduct
payments for these under this agreement of Compositions, Music Videos and Audiovisual
creations.” The producer’s agreement also required Style to provide a production budget for
specific production periods and anticipated the expense of “author’s remuneration to the authors
of music and lyrics of Compositions (fixed and/or royalties).” The agreement further required
Style to sign a collateral agreement to retain Anna Zorina as Lazarev’s manager. The original
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term of the producer’s agreement was to run for not more than four years from the date of
execution, April 14, 2005.
Murphy and Landon co-wrote the song Almost Sorry in 2001 in Nashville, Tennessee.
Murphy and Landon own the copyright to Almost Sorry, and the song is registered with the U.S.
copyright office as well as Broadcast Music, Inc. (BMI) and the Russian Authors Society.
In June and November 2006, either Murphy or Murphy’s mother pitched Almost Sorry to
Zorina, who expressed interest in the song on behalf of Style and Lazarev. 1 According to
Murphy, and consistent with the original producer’s agreement between Style and Lazarev,
Zorina was the acting manager and representative of Lazarev. Following discussions with
Zorina, the plaintiffs entered into a “sub-publishing agreement” with the law firm Levant &
Partners. The agreement purported to grant Levant & Partners exclusive rights to exploit Almost
Sorry, including the rights to record, reproduce, and distribute the song in Russia and “all the
countries in the world” for the period between January 1, 2007 and December 31, 2010. The
agreement delimited Levant & Partners’ right to exploit Almost Sorry to the performance of
Lazarev, leaving plaintiffs the right to license the song to other artists outside of Russia and the
countries of the former Soviet Union. The agreement contained no payment terms; however,
plaintiffs received a $2000 advance ($1000 each) from Levant & Partners for the sub-publishing
agreement. The sub-publishing agreement between plaintiffs and Levant & Partners is dated
January 1, 2007. In executing the sub-publishing agreement, plaintiffs understood that the
1
The dates expressed in Murphy’s declaration conflict with Murphy’s deposition
testimony that the song was pitched to Zorina in January or February, 2007. Murphy’s
deposition also conflicts with the dates indicated in plaintiffs’ original complaint, which alleged
that plaintiffs entered into an oral contract with Style in November 2006. The discrepancy as to
when the song was pitched to Zorina, however, is immaterial.
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contract authorized a recording of Almost Sorry to be made by Lazarev. Moreover, at that time,
plaintiffs had a vague understanding that Style would be recording Lazarev’s use of the song.
At some point in late 2006 or early 2007, Lazarev recorded Almost Sorry at the Brian
Rawlings recording studio in London, U.K., during the term of the original producer’s
agreement. On May 10, 2007, Lazarev’s TV Show album, which contained an English-version
recording of Almost Sorry, was released in Russia and Ukraine. In fact, the song was released on
several albums produced by Style. In 2007, Lazarev also recorded a Russian version of the song,
Zachem Pridumali Lyubov, which was first performed in November 2007.
At some point in 2008, several months after plaintiffs executed the sub-publishing
agreement, Sergey Bobza, a representative of Style, contacted Murphy and explained that the
plaintiffs had entered into a “bad contract” with Zorina and Levant & Partners. Bobza said that
the relationship between Style and Zorina had been on the decline, that Style terminated Zorina,
but prior to her termination, Zorina, acting out of spite, had induced authors to sign contracts,
such as the sub-publishing agreements, with Levant & Partners, who apparently had no known
affiliation with the music industry. Bobza suggested that plaintiffs try to annul the contract and
send a letter to Zorina or to Levant & Partners, but plaintiffs did not pursue those options. Bobza
also suggested that plaintiffs enter into “what should have been considered a legitimate
agreement with Style Records.” Specifically, Bobza recommended that the plaintiffs and Style
enter into a licensing agreement. At the time of her discussions with Bobza in 2008, Murphy
assumed that Lazarev had already recorded Almost Sorry.
In February 2008, plaintiffs entered into a license agreement with Style (hereinafter “first
license agreement”). The agreement was backdated to November 1, 2006, well before Style and
plaintiffs had direct communications. According to Murphy, the agreement was backdated
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because “Style wanted to show that they had the rights to the song before [Zorina] since they
believed the [sub-publishing agreement] contract to be fraudulent or something of the like.”
Under the first license agreement, plaintiffs gave “their permission to record [Almost
Sorry], performed by Sergey Lazarev.” The agreement specified that Lazarev intended to record
Almost Sorry at the Brian Rawlings Production studio. The plaintiffs agreed to “ensure [Style]
(as well as its licensees, affiliates and other third parties that will exploit the recording of [Almost
Sorry]) with the possibility to receive without hindrance permissions to use [Almost Sorry] . . . .”
Further, plaintiffs guaranteed “that neither they nor other persons involved in the Composition
rights management, will forbid [Style] (as well as [Style’s] licensees that will us[e] the
recordings of the [Almost Sorry] performance) to use [Almost Sorry] on condition that [Style]
shall pay the fee for any kind of exploitation through a collecting society or a publishing
company. . . .” In return, Style agreed to pay plaintiffs $3000 ($1500 each) within ten calendar
days of its execution. The agreement contained no other terms specifying another form of
payment for the exploitation of Almost Sorry, stated that it took effect from the moment of its
signing, contained no time limitation, and did not include a choice of law provision.
In April 2008, Aleksey Kruzin, another representative of Style, contacted plaintiffs and
circulated a second licensing agreement for Almost Sorry. Plaintiffs and Style executed this
agreement at some point in May 2008, although the agreement was backdated to November 20,
2006. In pertinent part, the second licensing agreement purported to grant a license from the
plaintiffs to Style to exploit Almost Sorry worldwide to the extent it was performed by Lazarev
and the right to exploit Almost Sorry within Russia and certain other countries to the extent it
was performed by other artists. The second licensing agreement also permitted Style “to grant
sublicenses, i.e. to grant the Rights to third parties (sublicensees), including the right to grant
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further sublicenses, solely in order to use [Almost Sorry] more effectively in the interests of the
Authors.” In return, Style agreed to pay plaintiffs a fixed advance of $4000 ($2000 each) and
periodic royalty payments as a percentage of Style’s profits from exploiting Almost Sorry. The
second licensing agreement specified that Russian law governs its interpretation and provided
that the license term would be “five (5) years commencing on signature hereof.” The agreement
was signed by Murphy, Landon, and Oleg Lobov, on behalf of Style. Plaintiffs accepted and
received the promised $4000 ($2000 each) advance under the second licensing agreement.
On September 7, 2009, the date the producer’s agreement expired, Lazarev and Style
entered into a supplemental producer’s agreement. In the supplemental agreement, Style granted
Lazarev the right to use recordings of his performances and to perform compositions, including
Almost Sorry, for which rights were granted to Style during the term of the original producer’s
agreement.
Plaintiffs received and accepted royalty payments for the exploitation of Almost Sorry.
Style was obligated to remit royalties to the Russian Authors Society, which then remitted those
payments to BMI, which would in turn remit those payments to plaintiffs. Murphy received and
accepted the following royalty payments: $12.34 on January 19, 2010; $436.70 on June 28,
2010; $1190.08 on September 23, 2011; and $217.30 on September 21, 2012. Landon also
received royalty payments with respect to the English and Russian versions of Almost Sorry.
The plaintiffs concede they have never been a party to an agreement with Lazarev. The plaintiffs
also admit that they have never attempted to retract, reject, renounce, or withdraw the first or
second licensing agreements. Lazarev alleges that he has avoided performing the song since
2010.
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On May 28, 2010, Murphy and Landon filed a complaint against Lazarev and Style in the
United States District Court for the Middle District of Tennessee. The complaint alleged that
plaintiffs entered into an oral contract with Style on or about November 20, 2006, through which
they agreed to license Almost Sorry to Style. The complaint further alleged that Lazarev
recorded Almost Sorry in both English and Russian and that the song became popular in Russia.
Despite its popularity, plaintiffs alleged that they had been inadequately compensated under the
licensing agreement. Without identifying the precise relationships between themselves and
Lazarev or between Lazarev and Style, plaintiffs asserted causes of action against Lazarev and
Style for (1) breach of contract, (2) copyright infringement under 17 U.S.C. § 501 et seq., and
(3) violations of Articles 1301 and 1302 of the Russian Civil Code. Plaintiffs also asserted a
separate intentional-misrepresentation claim against Style.
After filing the original complaint, plaintiffs apparently attempted to effect service in
Russia on both Lazarev and Style. On January 10, 2011, Lazarev, acting pro se, filed a letter
with the court in which he acknowledged receipt of the summons and denied plaintiffs’
allegations. Lazarev stated that plaintiffs and Style entered into an agreement on November 1,
2006, under which he was authorized to record and perform Almost Sorry. Lazarev further
averred that, at the time plaintiffs and Style entered into a licensing agreement, he was acting
under a separate producer’s agreement with Style executed on April 14, 2005. Under this
producer’s agreement, Lazarev alleged that Style was obliged to enter into licensing agreements
with the authors of musical works and compositions and to carry the responsibilities incurred by
those agreements. Lazarev alleged that he was not personally responsible for making any royalty
payments, responsibilities that were contractually required of Style for the commercial
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exploitation of the song’s recordings and public performances of the work. Lazarev’s letter was
docketed as an answer.
On March 3, 2011, the magistrate judge entered a scheduling order, which set a targeted
trial date of February 28, 2012. On February 14, 2012, the district court received a telephone
call from plaintiffs’ counsel inquiring about the target trial date. From this call, the district court
surmised that Style was never served. The district court then ordered plaintiffs’ counsel to
inform the court whether he intended to proceed against Style. On February 22, 2012, the
plaintiffs voluntarily dismissed Style.
On March 14, 2012, the plaintiffs sought leave to amend the complaint to assert
“continuing infringements” by Lazarev (the only remaining defendant), which the court granted
on April 9, 2012. On April 16, 2012, the plaintiffs filed an amended complaint, which remains
the operative pleading. The amended complaint alleged that the plaintiffs orally had entered into
a November 20, 2006 licensing agreement with Style and that plaintiffs had executed a written
licensing agreement in mid-2007. The amended complaint further alleged that Lazarev infringed
and continued to infringe the plaintiffs’ copyright in Almost Sorry by performing, selling, and
promoting the work through various forms of media, in violation of federal and Russian law.
The plaintiffs asserted the same three causes of action: (1) breach of contract, (2) copyright
infringement under 17 U.S.C. § 501 et seq., and (3) violation of Articles 1301 and 1302 of the
Russian Civil Code.
On May 16, 2012, counsel entered appearances on behalf of Lazarev, and on May 25,
2012, Lazarev timely filed a motion to dismiss, which the court treated as a motion for summary
judgment. On August 22, 2012, the court initially granted the motion. On September 19, 2012,
the plaintiffs filed a motion to alter or amend judgment, seeking reconsideration only with
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respect to the copyright claims, thus abandoning their breach-of-contract and Russian-law
claims. First, the plaintiffs argued that the licensing agreement dated November 20, 2006 was
for a five-year term and, thus, had expired by its terms on November 20, 2011. Second, based on
the complete translations of the producer’s agreements between Lazarev and Style, which did not
specifically reference Almost Sorry, the plaintiffs argued that the producer’s agreements did not
convey a valid sub-license to Lazarev. On December 12, 2012, the district court granted
plaintiffs’ motion to alter or amend, concluding that further discovery was warranted. In
particular, the court noted that the relationship between the November 1, 2006 agreement (the
first licensing agreement which contained no time limitation) and the November 20, 2006
agreement (the second licensing agreement which contained a five-year time limitation) was
unclear. The court also observed that it was unclear when those agreements became operative.
On September 11, 2013, Lazarev filed a renewed motion for summary judgment. In
support of that motion, Lazarev filed a stipulation; declarations of Alexei Smirnow, Ilya
Mikhailenko, and of himself; deposition testimony given by Landon, Murphy, and himself; a
statement of undisputed material facts, and a memorandum of law. In response, the plaintiffs
filed a memorandum of law, a response to Lazarev’s statement of undisputed material facts, and
a declaration of Murphy. In opposition to Lazarev’s motion for summary judgment, the
plaintiffs argued (1) that Lazarev waived his “license” and “sub-license” defenses by failing to
file an answer to the amended complaint, (2) that Lazarev did not have a valid sub-license to use
Almost Sorry before 2008, and (3) Lazarev’s sub-license expired in 2009, making any
exploitation of Almost Sorry after that date unlawful.
The district court granted summary judgment to Lazarev. First, the court held that
Lazarev did not waive the defenses argued in support of his motion for summary judgment. The
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court found that, even though Lazarev did not formally file an answer to the amended complaint,
the plaintiffs had been on notice of these defenses since the early stages of the case and had “a
full and fair opportunity to probe those defenses.”
Second, the district court found that, at a minimum, Style possessed a valid license to
Almost Sorry as of February 2008 and that the second licensing agreement remained in effect
from May 2008 to May 2013, when it expired. The district court reasoned that (1) the first and
second licensing agreements between plaintiffs and Style were valid under Russian law and that
the terms of the latter supplemented and amended the former; (2) because Style acquired the
license to Almost Sorry before the expiration date of the original producer’s agreement, Lazarev
possessed a valid sub-license from at least May 2008 through September 7, 2009; and
(3) because Style and Lazarev agreed to extend the provisions of the producer’s agreement in the
supplemental producer’s agreement, Lazarev possessed a valid sub-license for the same time
frame that Style possessed a valid license—i.e., through May 2013. The district court
additionally found that plaintiffs retained full rights to Almost Sorry since May 2013 but that the
record contained no evidence that Lazarev performed it after that time. The district court noted
that because of the expiration of the license and associated sub-license, Lazarev can no longer
legally exploit Almost Sorry without reaching an agreement with the plaintiffs.
Third, the district court rejected plaintiffs’ contention that Lazarev lacked a valid sub-
license to use Almost Sorry before February 2008. The district court found that the sub-
publishing agreement with Levant & Partners specifically authorized Lazarev to record and
perform Almost Sorry, which reflected plaintiffs’ understanding and intention at the time. The
district court also found that, in the first and second license agreements, the plaintiffs specifically
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entered into agreements that they intended to govern Lazarev’s recordings of Almost Sorry
retroactive to November 2006.
The district court concluded by noting that if the plaintiffs are correct that Style failed to
pay them required royalties under the first or second licensing agreements, it is Style, not
Lazarev, who is at fault. The district court noted, however, that plaintiffs chose not to pursue
Levant & Partners, Zorina, or Style. Accordingly, the district court entered final judgment for
Lazarev. Plaintiffs timely filed a notice of appeal.
II.
On appeal, plaintiffs argue that the district court erred in holding that Lazarev did not
waive his affirmative defenses by failing to file an answer to their amended complaint. We
review a finding that a party did not waive an affirmative defense for abuse of discretion. See
Smith v. Sushka, 117 F.3d 965, 969 (6th Cir. 1997). Plaintiffs point to Rule 8 and categorically
assert that failure to plead an affirmative defense results in a waiver of that defense. But
“[f]ailure to raise an affirmative defense by responsive pleading does not always result in
waiver.” Smith, 117 F.3d at 969 (citing Moore, Owen, Thomas & Co. v. Coffey, 992 F.2d 1439,
1445 (6th Cir. 1993)). “The purpose of Rule 8(c) of the Federal Rules of Civil Procedure is to
give the opposing party notice of the affirmative defense and a chance to respond.” Id. (citing
Coffey, 992 F.2d at 1445). “Thus, if a plaintiff receives notice of an affirmative defense by some
means other than pleadings, ‘the defendant’s failure to comply with Rule 8(c) does not cause the
plaintiff any prejudice.’” Coffey, 992 F.2d at 1445 (quoting Grant v. Preferred Research, Inc.,
885 F.2d 795, 797 (11th Cir. 1989)).
In this case, plaintiffs received notice of Lazarev’s defenses that he had a valid license
and sublicense to use Almost Sorry from the inception of the case. In his pro se letter, filed on
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January 10, 2011, which the district court docketed as an answer, Lazarev asserted he had a
sublicense and license to use Almost Sorry pursuant to the licensing agreements between
plaintiffs and Style and the producer’s agreements between Style and himself. Lazarev attached
to his letter the first licensing agreement, the original producer’s agreement, and the
supplemental producer’s agreement. Lazarev filed the same letter on May 4, 2011. And, after he
was represented by counsel, Lazarev filed a motion to dismiss that relied on the affirmative
defenses of license and sublicense, which the court considered in ruling upon that motion and
upon plaintiffs’ motion to alter or amend the judgment. Even though Lazarev did not file an
answer to the amended complaint, plaintiffs were on notice of his affirmative defenses from an
early stage in the lawsuit, thus satisfying the purposes of Rule 8. See Smith, 117 F.3d at 969.
Therefore, the district court did not abuse its discretion by concluding that Lazarev did not waive
his affirmative defenses argued in support of his motion for summary judgment.
Plaintiffs also reassert their argument that Lazarev infringed their copyright to Almost
Sorry. The district court granted summary judgment to Lazarev on plaintiffs’ copyright-
infringement claim, and this court reviews that decision de novo. See Walton v. Ford Motor Co.,
424 F.3d 481, 485 (6th Cir. 2005). Plaintiffs offer two arguments in support of their claim:
First, they allege that Lazarev lacked a valid license to use their work before February 2008
when plaintiffs expressly entered into a license agreement with Style. Second, they renew their
contention that Lazarev’s sub-license expired in 2009 and “[t]herefore, any use of . . . Almost
Sorry and Zachem Pridumali Lyubov from 2009 to present was without a valid sublicense and
constituted infringement of Plaintiffs’ copyright.” Presumably, plaintiffs’ argument refers to
September 7, 2009, the date the original producer’s agreement between Lazarev and Style
expired. The district court correctly rejected these arguments, and we “may affirm for any
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reason supported by the record.” Loftis v. United Parcel Serv., Inc., 342 F.3d 509, 514 (6th Cir.
2003).
“[A]nyone who is authorized by the copyright owner to use the copyrighted work in a
way specified in the statute . . . is not an infringer of the copyright with respect to such use.”
Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 433 (1984). “The ownership of
a copyright may be transferred in whole or in part by any means of conveyance or by operation
of law. . . .” 17 U.S.C. § 201(d)(1). A copyright owner who grants an exclusive or nonexclusive
license to use his copyrighted material waives his right to sue the licensee for copyright
infringement. See Sony, 464 U.S. at 433; Graham v. James, 144 F.3d 229, 236 (2d Cir. 1998).
A written and signed conveyance is necessary to find an exclusive license to use copyright
material. Under 17 U.S.C. § 101, an exclusive license is a “transfer of copyright ownership” and
therefore “is not valid unless an instrument of conveyance, or a note or memorandum of the
transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly
authorized agent.” 17 U.S.C. § 204(a). In contrast, “[a] non-exclusive license may be granted
orally, or may be implied from conduct.” Johnson v. Jones, 149 F.3d 494, 500 (6th Cir. 1998)
(alteration in original) (quoting M. Nimmer and D. Nimmer, 3 Nimmer on Copyright § 10.03[A],
at 10–38 (1994)). This is true because a nonexclusive license is not a transfer of ownership
under 17 U.S.C. § 101 “and is not, therefore, subject to the writing requirement of § 204.” Id.
(citing 17 U.S.C. § 101; Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990)). The
key to finding an implied license is in the intent of the copyright holder. See Johnson, 149 F.3d
at 502 (“Without intent, there can be no implied license.”); see also John G. Danielson, Inc. v.
Winchester-Conant Props., Inc., 322 F.3d 26, 40−41 (1st Cir. 2003); Nelson–Salabes, Inc. v.
Morningside Dev., LLC, 284 F.3d 505, 514–16 (4th Cir. 2002). Like an express license, “the
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existence of an implied license to use the copyright for a particular purpose precludes a finding
of infringement.” Johnson, 149 F.3d at 500 (citing Effects, 908 F.2d at 559; I.A.E., Inc. v.
Shaver, 74 F.3d 768 (7th Cir. 1996)).
Plaintiffs’ claim that Lazarev infringed their copyright after 2009 fails because Lazarev
had a valid, express sublicense to use Almost Sorry until May 2013. In May 2008, plaintiffs
executed a second licensing agreement with Style. This agreement was valid throughout its
term, which ran for five years from its execution—that is, until May 2013. The second licensing
agreement also included a choice of law provision stating that Russian law applies.
Under Russian law, the second licensing agreement, in combination with the producer’s
agreement, endowed Lazarev with a sublicense to use Almost Sorry.2 In the second licensing
2
Several provisions of the Civil Code of the Russian Federation are relevant. First, Article 431
states:
While interpreting the terms of the contract, the court shall take into account the
literal meaning of the words and expressions, contained in it. The literal meaning
of the terms of the contract in case of its being vague shall be identified by way of
comparison with the other terms and with the meaning of the contract as a whole.
If the rules, contained in the first part of the present Article, do not make it
possible to identify the content of the contract, the actual common will of the
parties shall be found out with account for the purpose of the contract. All the
corresponding circumstances, including the negotiations and the correspondence,
preceding the conclusion of the contract, the habitual practices in the relationships
between the parties, the customs of the business turnover and the subsequent
behavior of the parties shall be taken into account.
Grazhdanskii Kodeks Rossiiskoi Federatsii [GK RF] [Civil Code] art. 431 (Russ.). Further,
Article 1238, “Sublicense Contract” states:
1. With the written consent by the licensor the licensee shall have the right to
grant under a contract the right to use a result of intellectual activity or a means of
individualization to another person (sublicense contract).
2. Under a sublicense contract the sublicensee shall be granted the right to use a
result of intellectual activity or means of individualization only within the limits
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agreement, which modified and amended the first licensing agreement, plaintiffs entitled Style to
grant sublicenses. And under the terms of the producer’s agreement, Lazarev was required to
record and perform music for which Style obtained rights during the agreement’s duration.
Because plaintiffs granted Style a license to use Almost Sorry before the expiration of the
original producer’s agreement between Lazarev and Style, Lazarev possessed a valid sublicense
to use that work through September 7, 2009, when the original producer’s agreement expired.
And because, in the supplemental producer’s agreement, executed on September 7, 2009, Style
granted Lazarev a license to use compositions, including Almost Sorry, that were received by
Style during the term of the original producer’s agreement, Lazarev continued to possess a valid
sublicense until the term of the second licensing agreement between plaintiffs and Style expired
in May 2013. Moreover, in the second licensing agreement, plaintiffs explicitly authorized Style
to use Almost Sorry in the territory of all the countries of the world if Almost Sorry was
performed by Lazarev. We find that the second licensing agreement, in combination with the
producer’s agreement, created a sublicense in Lazarev to use Almost Sorry from May 2008 to
May 2013. Furthermore, the district court correctly found that the record contains no evidence
that Lazarev used Almost Sorry after May 2013.
of those rights and those means as provided for by the license contract for the
licensee.
3. The sublicense contract concluded for a time period exceeding the duration of
the license contract shall be considered as concluded for the duration of the
license contract.
4. The licensee shall bear liability to the licensor for actions of the sublicensee
unless the license contract provides otherwise.
5. The provisions of the present Code on a license contract shall apply to the
sublicense contract.
Id., art. 1238; see also Fed. R. Civ. P. 44.1 (“In determining foreign law, the court may consider
any relevant material or source . . . whether or not submitted by a party. . . .”).
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We also reject plaintiffs’ argument that Lazarev infringed their copyright before 2008,
that is, before they entered the first and second licensing agreements with Style. As of late 2006
or early 2007, plaintiffs intended to authorize Lazarev to record and perform Almost Sorry. First,
in June and November 2006, Murphy or Murphy’s mother pitched Almost Sorry to Zorina,
Lazarev’s agent at the time. Second, in the sub-publishing agreement that plaintiffs entered into
with Levant & Partners on January 1, 2007, plaintiffs plainly authorized Lazarev to record and
perform Almost Sorry. That agreement provided that plaintiffs transferred to Levant & Partners
“the exclusive rights to Almost Sorry in the territory of all the countries with the exception of
Russia and CIS (the countries of the former Soviet Union but including Latvia, Lithuania,
Estonia) only in the performance of artist, Sergey Lazarev.”3 Third, plaintiffs’ first and second
licensing agreements with Style evince plaintiffs’ intent to authorize Lazarev’s use of the song as
of late 2006. Plaintiffs intended that those agreements, which effectively granted Lazarev a
sublicense to use Almost Sorry, be applied retroactively to November 1, 2006, the date at which
plaintiffs and Style backdated the first licensing agreement. Therefore, because plaintiffs
intended to authorize Lazarev to use that work in late 2006 and early 2007, plaintiffs’ claim that
3
The sub-publisher’s agreement with Levant & Partners did not contain a choice of law
provision. The parties have not engaged in a choice of law analysis with respect to that
agreement. But it does not matter whether Russian law or Tennessee law applies. Under either
body of law, the agreement authorizes Lazarev to record and perform Almost Sorry. Compare
Simonton v. Huff, 60 S.W.3d 820, 825 (Tenn. Ct. App. 2000) (“When the language of the
contract is plain and unambiguous, the court must determine the parties’ intention from the four
corners of contract, interpreting and enforcing it as written.”), with Grazhdanskii Kodeks
Rossiiskoi Federatsii [GK RF] [Civil Code] art. 431 (Russ.) (“While interpreting the terms of the
contract, the court shall take into account the literal meaning of the words and expressions,
contained in it.”); see also Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 816 (1985) (“We must
first determine whether Kansas law conflicts in any material way with any other law which could
apply. There can be no injury in applying Kansas law if it is not in conflict with that of any other
jurisdiction connected to this suit.”).
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No. 14-5028
Murphy, et al. v Lazarev
Lazarev infringed their copyright to Almost Sorry before February 2008 fails. See Sony,
464 U.S. at 433.
III.
For the foregoing reasons, the judgment of the district court is affirmed.
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