1:12-cv-00847
S.D.N.Y.Sep 21, 2012Background
- Avon moved for reconsideration under Local Rule 6.3 after the August 7, 2012 opinion denying dismissal of breach of contract and account stated.
- Court previously dismissed conversion but denied breach of contract and account stated; copyright equitable tolling discovery was pending.
- Nineteen invoices were submitted as contracts: seven attached to Frobose declaration and twelve attached to Zissu declaration.
- Alleged five counts: copyright infringement, breach of contract, two account statements, and conversion; reconsideration addressed only the breach and account stated issues.
- Court concluded the 19 invoices were properly before the court and, incorporating by reference the contract language, validly pleaded breach of contract but not account stated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach of contract is preempted by the Copyright Act | Breach claims survive if they rest on contract promises to pay for use beyond license. | Preemption applies because post-license uses are copyright acts; no extra element. | Not preempted; promise-to-pay theory provides the extra element. |
| Whether the agreements show a post-license obligation to negotiate a fee | Agreements require negotiating a fee for use beyond one year. | There was only an unenforceable agreement to negotiate; no definite term. | Plaintiff pled a valid breach based on an obligation to negotiate a fee before extra uses. |
| Whether breach of contract claim is valid despite lack of geographic scope in agreement | Use beyond the one-year term violated the agreements' post-license obligation. | No geographic scope provision; cannot support breach under geography theory. | Valid breach claim based on failure to negotiate post-license fee; geography issue rejected. |
| Whether the breach of contract claim is not preempted under Forest Park reasoning | Contract includes implied promise to pay for use of ideas; not merely copyright rights. | Forest Park is distinguishable and contract claims are preempted unless an extra element exists. | Not preempted; Forest Park supports not arising solely from copyright rights. |
| Whether account stated claims survive in light of the agreements | Invoices created an implicit agreement to pay based on past transactions. | Ongoing relationship terminated; no balance or agreement to pay exists post-expiration. | Account stated claims dismissed; no binding balance of indebtedness proven. |
Key Cases Cited
- First Investors Mutual Insurance Co. v. City of New York, 152 F.3d 162 (2d Cir. 1998) (elements of breach of contract claim require contract, performance, breach, damages)
- Express Indus. & Terminal Corp. v. N.Y. State Dept. of Transp., 93 N.Y.2d 584 (N.Y. 1999) (mutual assent must be definite to form a binding contract)
- Forest Park Pictures v. Universal Network, 683 F.3d 424 (2d Cir. 2012) (breach of contract claim not preempted when promise to pay exists)
- Canal+ UK v. Canal+ Image UK, 773 F. Supp. 2d 427 (S.D.N.Y. 2011) (extra element analysis; contract claims can survive preemption when they involve a promise to pay)
- LeBoeuf, Lamb, Greene & MacRae v. Worsham, 185 F.3d 61 (2d Cir. 1999) (account stated requires an account presented, accepted as correct, and promise to pay)