Distribuidora De Discos Karen C. por A. v. Universal Music Group, Inc., 1:13-cv-07706

Background

Composer Juan Luis Guerra and publisher Karen (DDK/Karen Publishing) have long-term agreements (1988 Base Agreement; 1992 Publishing Administration Agreement; 2006 Release Agreement) governing recordings, royalties, and administration of compositions.
DDK sued Guerra, UMG, Capitol, and EMI in 2013 for copyright infringement based on new recordings (Asondeguerra Tour) of songs Guerra previously recorded under the Base Agreement; UMU later intervened and asserted counterclaims for infringement against Karen.
Karen seeks to add supplemental claims against Guerra and UMU challenging registrations by Editora El Conuco and asserting infringement based on Guerra’s 2014 administration deal with UMU; Rodriguez (third-party) asserted parallel counterclaims.
Central factual dispute: whether the 1992 Agreement or the 2006 Release Agreement transferred ownership or exclusive licensing rights in the underlying musical compositions (distinct from master recordings), and whether any such transfer bars infringement claims or renders counterclaims time-barred.
Procedural motions: (1) Karen’s motion to file a supplemental pleading; (2) Guerra/UMU’s motion to dismiss Rodriguez’s third-party counterclaim; (3) Karen/Rodriguez’s motion for judgment on the pleadings as to Guerra/UMU’s counterclaim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Karen may file supplemental pleading challenging Conuco registrations and alleging infringement by UMU	Karen: Conuco registrations are invalid and UMU infringed by administering/licensing compositions	Guerra/UMU: Claims are irrelevant/advisory or time-barred	Court: Grant in part — supplemental pleading allowed as claims are materially relevant (not advisory); infringement claim survives plausibly at this stage
Whether Rodriguez’s third-party counterclaim (declaratory relief re Conuco regs and Release Agreement) should be dismissed	Rodriguez: Registrations invalid; Release Agreement unenforceable	Guerra/UMU: Time-barred or improper	Court: Denied dismissal in part — counterclaims are justiciable and relevant to ownership dispute
Whether the Release Agreement unambiguously granted Guerra exclusive rights to license compositions (thus precluding infringement)	Guerra/UMU: Release gave them rights to administer/license compositions (exclusive)	Karen: Release did not transfer composition ownership; rights reserved to Karen for recordings and royalties	Held: Release Agreement ambiguous as to composition ownership and exclusive licensing; cannot be resolved on pleadings; infringement claim may proceed
Whether Guerra/UMU’s declaratory ownership claim is time-barred (17 U.S.C. §507(b))	Karen/Rodriguez: Ownership repudiated earlier (1992 or 2006) so suit is time-barred	Guerra/UMU: No express repudiation occurred until 2013; claims timely	Held: No plain and express repudiation in 1992 or 2006; ownership claim accrual not triggered; Guerra/UMU’s claim is timely; judgment on the pleadings denied

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard: plausibility required)
Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard and inference rules)
Jorgensen v. Epic/Sony Records, 351 F.3d 46 (copyright registration is prima facie evidence of ownership)
Kwan v. Schlein, 634 F.3d 224 (accrual of ownership claims; inquiry notice standard)
MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (declaratory judgment justiciability standard)
U.S. Naval Inst. v. Charter Commc’ns, Inc., 936 F.2d 692 (exclusive licensee cannot be liable for infringing rights it holds exclusively)
Gary Friedrich Enters., LLC v. Marvel Characters, Inc., 716 F.3d 302 (express repudiation principle for accrual of co-ownership claims)
Stone v. Williams, 970 F.2d 1043 (ownership claim accrual principles)
Big E. Entm’t, Inc. v. Zomba Enters., Inc., 453 F. Supp. 2d 788 (royalty agreements do not necessarily transfer copyright ownership)