819 F. Supp. 2d 307
S.D.N.Y.2011Background
- 1994: ZFT sold to Ryko all rights in Subject Masters for $20 million; 1999 Settlement released claims based on exploitation up to that date.
- ZFT retained Vault Masters; 12.11 prohibits Ryko from changing technical standards or integrity of final versions of Subject Masters.
- 1997–1999: prior disputes over 1994 Agreement resolved by a settlement releasing Ryko from claims predating 1999.
- 2004: Ryko distributed digital versions via Apple iTunes; Apple Agreement allowed sale in single and multi-track formats subject to restrictions.
- Vault Master tracks (Yellow Snow, Joe's Garage, Montana) appeared on multiple releases, some in promotional-only contexts but evidence shows sales prior to 1999.
- Lather negotiations: no written Lather agreement executed; Ryko distributed Lather nonetheless; ZFT delivered Lather master recordings to Ryko for release.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the 1999 Settlement bar ZFT’s claims about vault master releases? | ZFT relies on 1999 release of claims. | Settlement barred actions based on exploitation up to date; not just promotions. | Partially barred: sales of Joe's Garage, Yellow Snow, Montana on Strictly Commercial CD releases barred; Dancin' Fool outside U.S. is barred. |
| Are Ryko’s digital distributions of the Restricted Cuts infringing? | Restricted Cuts distributed as singles/streaming violated 12.4 and copyright rights. | Ryko restricted distribution and Apple acted on those restrictions; no direct or contributory infringement by Ryko. | Summary judgment for Ryko on direct/contributory infringement for digital singles/30-second streaming samples of Restricted Cuts. |
| Does vinyl distribution of Subject Masters violate the 1994 Agreement? | Vinyl distribution falls within subject-masters rights under 1.1. | Ambiguity on whether vinyl is contemplated; 12.11 does not clearly exclude vinyl. | Ryko granted summary judgment on vinyl distribution rights (first/second claims) insofar as these relate to vinyl formats. |
| Do ZFT’s Lather rights transfer require a written signed writing or can an implied license apply? | Lather transfer lacked a signed writing; no valid written instrument. | Implied non-exclusive license could exist; conduct and delivery may suffice. | Summary judgment denied on Third and Fourth Claims to the extent of implied license; question of whether a signed writing exists remains for trial. |
| Are MOFO, Lumpy Money Disc 1, and Hot Rats Vinyl infringing since they derive from Ryko-identified Subject Masters? | Disc 1 of MOFO and Hot Rats Vinyl are based on previously released masters owned by Ryko; infringement possible. | Some discs based on same performances but different mixes; ambiguity on underlying rights. | Partial denial: summary judgment for Ryko on MOFO, Hot Rats Vinyl, and Disc 2 of Lumpy Money; Disc 1 of Lumpy Money unresolved due to mix difference. |
Key Cases Cited
- Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009) (direct/contributory infringement standards; orientation to digital contexts)
- Twin Peaks Prods., Inc. v. Publications Int'l, Ltd., 996 F.2d 1366 (2d Cir. 1993) (direct infringement framework; influence on distribution analysis)
- Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (volitional conduct required for direct infringement; distribution control)
- Grokster, Ltd. v. MGM, 545 U.S. 913 (2005) (inducement/contributory infringement principles for new tech platforms)
- Faulkner v. Nat'l Geo. Enters., Inc., 409 F.3d 26 (2d Cir. 2005) (infringement liability where one knowingly induces or contributes)