Russian Entertainment Wholesale, Inc. v. Close-Up International, Inc.
767 F. Supp. 2d 392
E.D.N.Y2011Background
- This case concerns copyright rights in sixty-five Mosfilm and Lenfilm Russian films and related licenses.
- Close-Up holds a license to reproduce Russian-language-only DVDs; Ruscico defendants and Image hold a separate multilingual-license path.
- Licensing history includes Mosfilm-Krupny Plan/Close-Up (Russian-only) and Mosfilm-Deandown-Widnes-Image (multilingual).
- A 1999 Mosfilm-Deandown license allowed multilingual versions; a 2005 addendum added a no-shut-off feature for subtitles.
- Lenfilm licenses granted to Lenfilm-Video, Klassik Films, Krupny Plan, and then to Close-Up for Russian-only DVDs; Lenfilm-Video rights were not extended beyond 2003.
- Berov defaulted; the court held Close-Up failed to prove infringement because defendants distributed multilingual versions within the scope of their licenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Close-Up has standing to sue for infringement of its Russian-only rights. | Close-Up holds exclusive Russian-only rights and seeks enforcement. | Multilingual DVDs were licensed separately; Close-Up lacks rights to sue for those versions. | Close-Up lacks standing for multilingual copies; infringement claim fails on the Russian-only rights. |
| Whether Mosfilm authorized Krupny Plan to transfer DVD rights to Close-Up. | Authorization existed prior to March 1, 2004. | Written authorization was lacking; assignment voidable. | Mosfilm authorized transfer to Close-Up prior to March 1, 2004; writing not required to render assignment voidable; transfer valid. |
| Whether Defendants’ Mosfilm works were authorized under the 1999 Mosfilm-Deandown agreement. | Distributing multilingual DVDs could violate the 1999 terms. | Agreement unambiguously allowed multilingual copies with foreign subtitles; no turn-off feature required. | Defendants were authorized to produce multilingual Mosfilm copies under 1999 agreement; no mandatory no-turn-off feature is implied. |
| Whether the 2005 July 27 addendum created covenants or conditions that affect copyright infringement claims. | No-turn-off requirement is a covenant forming basis for infringement. | No-turn-off provision is a covenant; breach supports contract, not copyright infringement. | 5/2005 terms are covenants; breach gives contract remedy, not copyright infringement. |
| Whether Berov’s default affects the claims against other defendants. | Berov is liable alongside others for infringement. | Berov’s default does not alter liability of others; still no infringement. | Berov’s dismissal follows from lack of proof against Ruscico and Image; claims against Berov dismissed. |
Key Cases Cited
- Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27 (2d Cir. 1982) (exclusive licensee may sue only for licensed rights)
- Graham v. James, 144 F.3d 231 (2d Cir. 1998) (breach of covenant in license may yield contract, not copyright relief)
- Stiefvater Real Estate, Inc. v. Hinsdale, 812 F.2d 805 (2d Cir. 1987) (statute of frauds/applicability to assignments)
- Arthur A. Kaplan Co. v. Panaria Int'l, Inc., 205 F.3d 1321 (2d Cir. 2000) (exclusive licensee's rights defined by contract)
- Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881 (9th Cir. 2005) (assignment of accrued cause of action; limitations on rights)
- Kemelhor v. Penthouse Int’l, Ltd., 689 F. Supp. 205 (S.D.N.Y. 1988) (ambiguity standard in contract interpretation)