Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 1 of 10

USDCSDNY
DOCU!\1ENT
ELECTRONICALLY FILED
DOC#:
----
,DATE FILED:MAR 2 4 2015

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

TufAmerica, Inc.,
Plaintiff,
12-CV-3529 (AJN)

-vMEMORANDUM AND
ORDER

Michael Diamond, et al.,

Defendants.

ALISON J. NATHAN, District Judge:

Plaintiff TufAmerica, Inc. ("TufAmerica") brings this copyright infringement action
against Defendants Michael Diamond, Adam Horovitz, and Adam Yauch (the "Beastie Boys
Defendants"), as well as Universal-Polygram International Publishing, Inc. 1 and Capital Records,
LLC (the "UMG Defendants," and, collectively with the "Beastie Boys Defendants," the
"Defendants"). In an Opinion and Order dated September 10, 2013, this Court Granted the
Defendants' motion to dismiss TufAmerica's Second, Third, Fourth, and Sixth Claims.

TufAmerica, Inc. v. Diamond, 968 F. Supp. 2d 588, 609 (S.D.N.Y. 2013). Before the Court are
the Defendants' motions for summary judgment as to TufAmerica's remaining First and Fifth
Claims for copyright infringement of the pre-1990 sound recordings and compositions for the
songs "Let's Get Small" and "Say What." Although the motions to dismiss were focused on
whether certain Beastie Boys' songs infringed TufAmerica's alleged exclusive licenses to certain
copyrights, the motions for summary judgment are focused on whether TufAmerica has standing
to bring this copyright infringement action in the first place. For the reasons discussed below,
the Court concludes that TufAmerica lacks standing to maintain this suit and GRANTS the
Defendants' motions for summary judgment.

Incorrectly named as Universal Music Publishing, Inc. and Universal Music Publishing Group.

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 2 of 10

I.

LEGAL STANDARD

Summary judgment shall be granted "if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P.
56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A genuine dispute as to
any material fact exists "if the evidence is such that a reasonable jury could return a verdict for
the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). On a motion
for summary judgment, a court views all evidence in the light most favorable to the non-movant,
Overton v. NY State Div. of Military & Naval Affairs, 373 F.3d 83, 89 (2d Cir. 2004), and
"resolve[ s] all ambiguities and draw[ s] all permissible factual inferences in favor of the party
against whom summary judgment is sought," Sec. Ins. Co. of Hartford v. Old Dominion Freight
Line, Inc., 391 F.3d 77, 83 (2d Cir. 2004). Finally, "the mere existence of a scintilla of evidence
in support of the plaintiffs position will be insufficient; there must be evidence on which the
jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252. In other words,
"nonmoving parties must do more than simply show that there is some metaphysical doubt as to
the material facts, and they may not rely on conclusory allegations or unsubstantiated
speculation." Jeffreys v. City of New York, 426 F.3d 549, 554 (2d Cir. 2005) (internal citations
and quotation marks omitted).
II.

BACKGROUND

The present action for copyright infringement is premised on the assumption that the
owners of copyrights in the sound recordings and compositions for the songs "Say What" and
"Let's Get Small" granted TufAmerica an exclusive license to those recordings and
compositions. But that foundational assumption may not hold true in light of a number of
agreements entered into in 1984, 1999, and 2012. As described below, the Defendants contend
that the original copyright owners of "Say What" and "Let's Get Small" conveyed their interests
in the sound recordings and compositions for these songs to third parties in 1984. While there is
some dispute regarding the meaning and authenticity of the 1984 agreements, there is no dispute
regarding the 1999 and 2012 agreements under which TufAmerica received a non-exclusive
2

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 3 of 10

license from two of the three original copyright owners and a right to sue from the third. Under
longstanding copyright law, the 1999 and 2012 agreements are insufficient to convey the type of
exclusive license necessary for TufAmerica to maintain this copyright suit.
A.

The Formation of the Band

In the mid-1970s, Robert "Dyke" Reed and Tony Fisher formed the musical group
"Trouble Funk." SUF iiii 2-3. 2 James Avery later joined the group in 1979. SUF ii 3. The
members of Trouble Funk never had a formal agreement governing their relationship with each
other, SUF ii 5, but in or around 1982, the band members formed a record label called D.E.T.T.
to manufacture their sound recordings, SUF ii 7. 3 In 1982, the members of Trouble Funk
released a single of "Let's Get Small" on the D.E.T.T. record label. SUF ii 11. Avery, Fisher,
and Robert Reed were the authors and performers of "Let's Get Small." SUF iiii 12, 107. And in
1983, the members of Trouble Funk released a single of"Say What" on the D.E.T.T. record
label, SUF ii 13, which was also included on a double album called "In Times of Trouble" that
was released later that year, SUF ii 14. Avery, Fisher, and Robert Reed were also the authors and
performers of "Say What." SUF iiii 16, 106.
B.

The 1984 Agreements

In 1984, a Washington, DC-based promoter named Carl "Maxx" Kidd began shopping
for a distribution deal for Trouble Funk, SUF ii 10, 17, and he ultimately approached members of
Trouble Funk about entering into a deal with Island Records, Inc. ("Island"). SUF ii 18. After
discussions and negotiations, the members of Trouble Funk, T.T.E.D., and Island signed a series
of inter-related agreements. SUF ii 22.

SUF stands for Local Rule 56.1 Statement of Undisputed Facts. The parties submitted multiple Local
Rule 56.1 statements, see Dkt. Nos. 76, 82, 95, 99, but the parties helpfully continued the sequential numbering of
each Local Rule 56.1 statement and counterstatement. Unless otherwise noted, the Local Rule 56.1 Statement of
Undisputed Facts cited herein refers to Dkt. No. 95, which contains TufAmerica's responses to the Defendants'
Local Rule 56.1 Statements of Undisputed Facts.
3
The initials D.E.T.T. stood for Dyke (i.e., Robert Reed), Rio Edwards (the band's manager), Tony Fisher,
and Taylor Reed (Robert Reed's brother). Fisher Dep. Tr. 30:9-19.

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 4 of 10

First, 4 Avery, Fisher, Robert Reed, and Taylor Reed signed an exclusive recording
agreement dated October 11, 1984 with Kidd's company, T.T.E.D. (the "Recording
Agreement"). SUF

24; Dkt. No. 80-7. Second, T.T.E.D. signed an agreement dated October

11, 1984 with Island, promising to deliver sound recordings created by Trouble Funk (and other
performers not relevant here) under the Recording Agreement to Island. SUF ~ 25; Dkt. No. 808. Third, Avery, Fisher, Robert Reed, and Taylor Reed signed a "Letter ofinducement" dated
October 11, 1984 with Island. SUF ~ 26. Later in 1984, A very, Fisher, Robert Reed, and Taylor
Reed signed another agreement with Island, SUF ~~ 44-45, which directed Island to pay
"royalties and sums payable pursuant to paragraphs 7(a) through 7(d) of the Island Contract"
partially to T.T.E.D. and partially to Trouble Funk pursuant to a formula set forth therein. SUF
~

47. Finally, Avery, Fisher, Robert Reed, and Taylor Reed all signed an agreement with Island

dated November 30, 1989 that terminated "the agreements dated October 11, 1984." SUF

61;

Dkt. No. 80-14.

Defendants also produced an agreement dated October 11, 1984 that purports to assign
the copyrights in the musical compositions for "Let's Get Small," "Say What," and other songs
to Farr Music (a company created by Avery, Fisher, and Robert Reed) and Z-Kidd Music (a
company owned or controlled by Kidd). SUF ~~ 63-64.
Without going too far into the complicated details of these various agreements, the
Defendants contend that, through them, Trouble Funk conveyed their copyrights in the sound
recordings and compositions of "Let's Get Small" and "Say What" to third parties including
Island and Z-Kidd Music, while TufAmerica advances competing interpretations of these
agreements and questions their authenticity.
C.

The 1999 and 2010 TufAmerica Agreements

In 1999, TufAmerica became interested in entering a deal with the members of Trouble
Funk under which TufAmerica would negotiate licenses or bring actions against parties for using
4

TufAmerica disputes the sequencing of the agreements, but does not dispute that all three agreements were dated
October 11, 1984. See SUF ~~ 24-26. The Court does not imply that the agreements were signed in any pmticular
order, and merely uses ordinal numbers here for purposes of organization.

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 5 of 10

or exploiting Trouble Funk compositions and recordings without authorization. SUF ~ 71. On
December 23, 1999, TufAmerica entered into two administration agreements with Robert Reed
and Fisher: one agreement governs master recordings (the "Master Administration Agreement");
the other agreement governs compositions (the "Composition Administration Agreement," and,
together with the Master Administration Agreement, the "1999 Agreements"). SUF ~ 72-73.
Fisher did not sign the agreements himself, but he authorized Robert Reed to enter into the 1999
Agreements on his behalf. SUF

73. Through these agreements, Robert Reed and Fisher

purported to sell, assign, transfer, and set over to TufAmerica the exclusive right to administer all
of Trouble Funk's rights in the master recordings and compositions created before 1990 for,
among other things, "Say What" and "Let's Get Small." SUF ~~ 75-78, 82.
TufAmerica later entered into a separate agreement, the "2012 Agreement," with A very
under which A very "exclusively license[ d] to [TufAmerica] his right to sue and recover on all
accrued and future causes of action in connection with all of the Trouble Funk Copyrights."
SUF

III.

~~

100-105; Dkt. No. 80-27. Reed passed away in 2008. SUF ~ 83.

DISCUSSION
Under the Copyright Act, "only two types of claimants [may] sue for copyright

infringement: (1) owners of copyrights, and (2) persons who have been granted exclusive
licenses by owners of copyrights." Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27,
32 (2d Cir. 1982) (citing 17 U.S.C. 501(b) (Supp. IV 1980); 3M. Nimmer, Nimmer on

Copyright 12.02, at 12-25 (1982)), superseded on other grounds as stated in Russian Entm 't
Wholesale, Inc. v. Close-Up Int 'l Inc., 482 F. App'x 602, 606 (2d Cir. 2012) (summary order).
In their motions for summary judgment, the Defendants raise two sets of arguments concerning
(1) the 1984 Agreements and (2) the 1999 and 2012 Agreements. Broadly, the Defendants
contend that in 1984 the members of Trouble Funk granted in whole or in part their copyrights in
the sound recordings and compositions for "Say What" and "Let's Get Small" to third parties, so
they lacked the necessary authority to grant an exclusive license in 1999 and 2012 to
TufAmerica. Alternatively, the Defendants contend that even if the members of Trouble Funk

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 6 of 10

still retained their copyrights in "Say What" and "Let's Get Small" at the time of the 1999 and
2012 Agreements, those agreements still do not confer standing on TufAmerica because they are
non-exclusive licenses or licenses that conferred merely a bare right to sue. As discussed below,
the Court concludes that the latter argument disposes of the motion for summary judgment, so it
need not (and does not) reach the former argument concerning the 1984 Agreements.

A.

The 1999 TufAmerica Agreement Did Not Convey an Exclusive License

The Defendants contend that, even assuming Avery, Fisher, and Robert Reed did not
grant their copyrights in the sounds recordings and compositions at issue to Island in 1984,
TufAmerica nonetheless lacks standing to pursue the present action because it is not an exclusive
licensee of the copyrights in question. Based on the undisputed facts, and as explained below,
the Court Agrees.
As Judge Failla recently observed, "[a] key distinction between the rights granted by
nonexclusive and exclusive licenses-and one that is critical to the claims pending before this
Court-is that ' [a nonexclusive] license conveys no ownership interest, and the holder of a
nonexclusive license may not sue others for infringement."' John Wiley & Sons, Inc. v. DRK
Photo, 998 F. Supp. 2d 262, 277 (S.D.N.Y. 2014) (quoting Davis v. Blige, 505 F.3d 90, 100 (2d

Cir. 2007)). Indeed, despite TufAmerica's arguments to the contrary, the Second Circuit has
made this distinction crystal clear: "Unlike the transfer of one co-owner's copyright interest to
another person, which conveys only the co-owner's share of that interest, an exclusive license
grants all co-owners' shares of a particular copyright interest to the exclusive licensee.
Accordingly, a co-owner cannot unilaterally grant an exclusive license." Davis, 505 F.3d at 101
(citing Maurel v. Smith, 271 F. 211, 216 (2d Cir. 1921)); see also Sybersound Records, Inc. v.
UAV Corp., 517 F.3d 1137, 1146 (9th Cir. 2008) ("[U]nless all the other co-owners of the

copyright joined in granting an exclusive right to Sybersound, TVT, acting solely as a co-owner
of the copyright, could grant only a nonexclusive license to Sybersound .... ").
As noted, on December 23, 1999, TufAmerica entered into two administration
agreements with Robert Reed and Fisher. SUF ~ 72. Through these agreements, Robert Reed
6

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 7 of 10

and Fisher purported to sell, assign, transfer, and set over to TufAmerica the "exclusive right to
administer all of Trouble [Funk]'s rights in the Masters," SUF ii 77, and "Compositions
throughout the universe," SUF ii 78. Avery, who was a performer and co-author for both "Say
What" and "Let's Get Small," did not sign the 1999 TufAmerica Agreements. Therefore,
without the third co-owner, Robert Reed and Fisher could at best convey a non-exclusive license
to TufAmerica.
In opposition, TufAmerica draws on semantics to avoid the longstanding rule that the
holder of a nonexclusive license may not sue others for infringement. In essence, TufAmerica
argues that because it received 100% of Robert Reed's ownership interest and 100% of Fisher's
ownership interest, it received an "exclusive" license from each of them. The problem, as noted,
is that Robert Reed and Fisher were co-creators with Avery of the sound recordings and
compositions and are therefore co-owners with A very of the copyrights in the sound recordings
and compositions, so Robert Reed and Fisher could not convey an exclusive license in the
copyrights. They conveyed at best a non-exclusive license to TufAmerica, "and the holder of a
nonexclusive license may not sue others for infringement." Davis, 505 F.3d at 101.
B.

The 2012 Agreement Conveys Nothing but the Bare Right to Sue

Not to be deterred, TufAmerica presses the additional argument that it obtained an

exclusive license from the members of Trouble Funk when it signed its agreement with Avery in
2012. Putting aside the issue of whether the 2012 Agreement and 1999 Agreements can be read
together, the 2012 Agreement conveys nothing more than the bare right to sue. And it has long
been the rule that "[w]here ... an agreement transfers 'nothing more than a bare right to sue ...
[it] cannot be the basis for standing under the Copyright Act."' John Wiley & Sons, Inc., 998 F.
Supp. 2d at 280-81 (quoting Minden Pictures, Inc. v. John Wiley & Sons, Inc., No. C-12-4601
EMC, 2013 U.S. Dist. LEXIS 67887, at *5-6 (N.D. Cal. May 13, 2013)); see also ABKCO

Music, Inc. v. Harrisongs Music, Ltd., 944 F .2d 971, 980 (2d Cir. 1991) (noting "the Copyright
Act does not permit copyright holders to choose third parties to bring suits on their behalf."
(citing Eden Toys, 697 F.2d at 32 n.3).
7

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 8 of 10

To explain, the 2012 Agreement provides that "A very hereby exclusively licenses to Tuff
City Records his right to sue and recover on all accrued and future causes of action in connection
with all of the Trouble Funk Copyrights." SUF ~ 88; Dkt. No. 80-27. It begins by noting that
"[w]hereas Tuff City Records is experienced at litigating copyright infringement actions" and
"[w ]hereas Avery desires Tuff City Records to pursue copyright infringement actions involving
the Trouble Funk Copyrights on Avery's behalf ... the parties agree as follows." Dkt. No. 8027. The agreement then provides that "Avery hereby exclusively licenses to Tuff City Records
his right to sue and recover on all accrued and future causes of action in connection with all of
the Trouble Funk Copyrights" and "[t]o the extent that exclusive licenses of any of Avery's
copyrights in the Trouble Funk Copyrights ... are necessary for 'standing' or similar reasons in
connection with filing and maintaining a Trouble Funk Infringement Action, Avery hereby
exclusively licenses such copyrights to Tuff City Records for the purpose of filing and
maintaining Trouble Funk Infringement Actions." Dkt. No. 80-27. The rest of the agreement
discusses the payment of costs and expenses associated with the anticipated litigations and how
the net proceeds from the litigations would be distributed. Dkt. No. 80-27.
TufAmerica does not attempt to distinguish the legal authority noted above. Instead, it
merely points out that the 2012 Agreement "specifically states that '[t]o the extent that exclusive
licenses of any of Avery's copyrights in the Trouble Funk Copyrights ... are necessary for
'standing' or similar reasons in connection with filing and maintaining a Trouble Funk
Infringement Action, Avery hereby exclusively licenses to Tuff City Records for the purpose of
filing and maintaining Trouble Funk Infringement Actions."' Opp'n Br. 21-22 (quoting Dkt. No.
80-27 ~ 3). It appears that TufAmerica believes that inserting the word "exclusive" into this
sentence is sufficient to create an exclusive license. But the language is unambiguous: Even the
purported contingent exclusive license is only "for the purpose of filing and maintaining Trouble
Funk Infringement Actions." Dkt. No. 80-27.
Moreover, to "determin[e] whether an agreement confers standing, courts look to 'the
substance of the agreement, not the labels it uses."' John Wiley & Sons, Inc., 998 F. Supp. 2d at
8

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 9 of 10

279 (quoting Hyperquest, Inc. v. N'Site Solutions, Inc., 632 F.3d 377, 383 (7th Cir. 2011)). For
example, in Minden Pictures, Inc. v. Pearson Educ., Inc., the court noted that"[ w]hen the
contract is viewed as a whole, the clear and unambiguous intent of the parties was to assign to
[plaintiff] the bare right to sue. 'Co-ownership' was merely a label intended to disguise the
assignment of the cause of action as something else."' 929 F. Supp. 2d 962, 968 (N.D. Cal.
2013) ("Pearson"). Unlike Pearson, this is not a situation where the parties attempted to hide
their true intent through false labels or ambiguous language; rather, the clear and unambiguous
intent of the parties to assign the bare right to sue permeates nearly every provision of the
agreement. Moreover, inserting "exclusive license" into the grant of a bare right to sue-when it
is clear from the agreement as a whole that this was all that was conveyed-is not sufficient to
overcome this longstanding bar to suit. In Right haven LLC v. Hoehn, for example, the Ninth
Circuit confronted similar language in a licensing agreement, which granted "all copyrights
requisite to have [licensee] recognized as the copyright owner of the Work for purposes of
[licensee] being able to claim ownership as well as the right to seek redress for past, present, and
future infringements of the copyright ... in and to the Work." 716 F.3d 1166, 1168 (9th Cir.
2013 ). "[L]ook[ing] not just at the labels parties use but also at the substance and effect of the
contract," the Ninth Circuit found that such a license conveyed nothing more than the bare right
to sue, which was insufficient to confer standing. Id. at 1169. The 2012 Agreement as a whole
similarly reveals that Avery conveyed to TufAmerica nothing more than the bare right to sue.
Therefore, even assuming that Robert Reed and Fisher still had rights in the sound
recordings and compositions for "Say What" and "Let's Get Small" in 1999, they granted
TufAmerica a non-exclusive license that does not permit TufAmerica to maintain an action for
copyright infringement. The 2012 Agreement does not in any way reference the 1999
Agreements; instead, it merely purports to grant to TufAmerica a right to sue on Avery's behalf.
Even assuming that the 2012 Agreement can be joined with the 1999 Agreements to create an
exclusive license of some kind, all that was granted was an exclusive right to sue. Because "the
Copyright Act does not permit copyright holders to choose third parties to bring suits on their
9

Case 1:12-cv-03529-AJN Document 101 Filed 03/24/15 Page 10 of 10

behalf," ABKCO Music, 944 F.2d at 980, TufAmerica lacks standing to maintain the present
copyright infringement suit.
IV.

CONCLUSION
For the reasons stated herein, the Defendants' motions for summary judgment are

GRANTED. This resolves Dkt. Nos. 74 and 83. The Clerk of Court is directed to close this
case.

SO ORDERED.
Dated:

March~'

, 2015
New York, New York

United States District Judge

10