REDACTED OPINION
There are several motions currently pending in this action between plaintiffs Paul Spinelli, Scott Boehm, Paul Jasienski, George Newman Lowrance, David Stluka,' David Drapkin, and Thomas E. Witte
NFL Defendants, Replay and AP have moved to dismiss the amended complaint (the “AC”). Getty has moved to dismiss the AC and compel arbitration, or stay the action as to Getty.
For the reasons set forth below, NFL Defendants’, Replays’, and AP’s motions to dismiss, and Getty’s motion to compel arbitration, are granted.
Prior Proceedings
Plaintiffs filed their initial complaint (“Complaint”) against the NFL Entities, Replay, Getty, and AP on October 21, 2013. On December 16, 2013, Getty moved to dismiss or, in the alternative, to stay the action as against it based on arbitration clauses contained within contracts at issue in this dispute. (See Dkt. Nos. 21, 22, 24.) At the same time, Getty filed a demand for arbitration with the American Arbitration Association (“AAA”). (See Bloom Decl. Ex. A.) On December 18, 2013, AP and the NFL Entities, and on December 26, 2013, Replay filed motions to dismiss the complaint.
On February 12, 2014, in lieu of opposing Defendants’ motions to dismiss, Plaintiffs filed the AC against all currently named Defendants. (See Dkt. No. 42.) On March 31, 2014, Defendants renewed their motions to dismiss. (Dkt. No. 51.) Getty and Plaintiffs have agreed to hold the arbitration proceeding in abeyance pending resolution of Getty’s motion to compel arbitration. (See Bloom Decl. Ex. B.)
The instant motions were heard and marked fully submitted on October 1, 2014. Subsequently, and while the motions to dismiss have been pending, motions to stay discovery were filed by Defendants and granted by the Court. (See Dkt. Nos. 99, 100.)
Facts
The following facts are taken from the Plaintiffs AC, which are taken to be true for the purposes of disposing of the instant motions, and the terms of certain agreements either directly referenced by Plaintiffs or integral to the AC.
Plaintiffs, collectively, have photographed “hundreds, if not thousands” of NFL and NFL Club games, practices and events, and have taken “literally hundreds of thousands of NFL-related photographs.” (AC ¶ 31.) Among these photographs, Plaintiffs allege there are “tens of thousands of photos ... that do[ ] not include any marks, logos, or other intellectual property owned by the NFL Entities.”
The NFL has collectively licensed and protected NFL and NFL Club trademarks, including names, nicknames, logos, colors, designs, slogans, symbols, and other identifying indicia for decades. (See AC ¶¶ 44-45; NFL Def.’s Mot. 7) [Redacted] NFL and NFL Clubs, [Redacted] provided NFL with exclusive licensing rights for certain business operations [Redacted]
Prior to 2004, NFL maintained an in-house department that directly licensed the rights to NFL-related photographs. (AC ¶¶ 44-46.) For many years, Plaintiffs obtained media credentials — either through their agents, Getty and AP, or directly from the NFL Clubs via the NFL’s in-house department, NFL Photos, to photograph events for the NFL and individual NFL Clubs. (AC ¶ 30.)
In July 2004, NFL — through NFLP— entered into a five-year licensing agreement with Getty (“Getty Agreement”), whereby Getty acquired rights to license
Among the images covered by the Getty Agreement were photographs in which Getty owned the copyrights (Getty Agreement [Redacted]), and photographs from independent contributors such as Plaintiffs (“Contributor Photographs”), [Redacted] (Getty Agreement [Redacted]) [Redacted], Getty had entered into agreements with each of the Plaintiffs (“Getty Contributor Agreements”), pursuant to which Plaintiffs became contributing photographers for Getty, and Getty received the right to license Plaintiffs’ works, including NFL photographs. (AC ¶ 47.)
The Getty Agreement authorized “NFL Entities” — defined to include the NFL (and its affiliates, subsidiaries, and successors in interest), and NFL Clubs (Getty Agreement [Redacted]) — to make royalty-free use of photographs owned by Getty for a wide variety of uses, including:
[Redacted]
(Id.) The right of NFL Entities to make such uses extended to Contributor Photographs, [Redacted] (Getty Agreement [Redacted] ) Plaintiffs each submitted images to Getty of NFL games and other NFL-related matters pursuant to the Getty Contributor Agreements. (AC ¶ 47.)
Plaintiffs allege that “[d]espite the fundamental obligations to license Plaintiffs’ works ... Getty ... granted the NFL nearly unfettered access to Plaintiffs’ photo collections and, either expressly or by inaction, allowed the NFL to make free or ‘complimentary’ use of Plaintiffs’ copyrights photos.” (AC ¶ 72.) Plaintiffs further allege that Getty “lacked authority to grant such unfettered usage rights or complimentary and indefinite use licenses to the NFL without obtaining separate and express permission from Plaintiffs for each such ‘complimentary’ license or use,” (AC ¶ 77) and that the Getty Contributor Agreements “precluded Getty ... from granting usage rights at no cost and Getty[’s] ... own standard terms and conditions for usage licenses pertaining to its Rights Managed collections photos prohibited such use.” (AC ¶ 78.) ]
The Getty Agreement expired on March 31, 2009. (Getty Agreement [Redacted])
In 2009, “[NFLP] entertained bids for exclusive commercial licensing rights for NFL and NFL Club photos and eventually selected AP to be the sole commercial licensor [of] such photographs.” (AC ¶¶ 26, 54.) Under the resulting agreement (the “First AP Agreement”), AP became the NFLP’s exclusive agent and distributor for licensing commercial uses of images of NFL content to NFL business partners, and a nonexclusive agent for licensing editorial uses of those images. (First AP Agreement [Redacted].) As a direct consequence of the switch to AP, Plaintiffs allege they lost their ability to sell higher-value commercial licenses (as opposed to editorial licenses) through Getty and thus were forced to transition their entire NFL collections to AP if they wished to continue offering commercial licenses for their NFL content. (AC ¶ 55.)
Plaintiffs also allege that because they owned the copyrights and licenses for other non-NFL sports-related content, and Getty had exclusive licensing deals and/or significant licensing partnerships with other sports entities, such as Major League Baseball and National Collegiate Athletic Association, they were presented with an
Five of the Plaintiffs, Jasienski, Stluka, •Spinelli, Witte, and Drapkin, ended their relationships with Getty (AC ¶ 62), entered into license agreements with AP (“AP Contributor Agreements”), and transferred their existing images of NFL content from Getty to the AP photo library. (AC ¶ 59.) Subsequently, Plaintiffs Low-rance and Boehm entered into license agreements with AP and moved their NFL images from Getty to AP. (AC ¶ 62.) As a result of terminating their relationships with Getty, Plaintiffs allege that they have lost significant revenue due to the loss of licensing opportunities for their non-NFL content. (AC ¶ 63.)
The First AP Agreement encompassed the use and licensing of images in which AP owned copyrights (First AP Agreement [Redacted]), as well as Contributor Photographs [Redacted] (First AP Agreement [Redacted]). The First AP Agreement covered a “worldwide” territory (First AP Agreement [Redacted]), and authorized the NFL (and its affiliates, subsidiaries, and successors) and NFL Clubs to make a wide range of editorial, charitable, afid marketing uses of photographs owned by AP on a royalty-free basis. (First AP Agreement [Redacted])
When the First AP Agreement expired, “[NFLP] again entertained bids for the exclusive commercial licensing rights for NFL and NFL Club photos and eventually renewed its agreement with AP.” (AC ¶ 27.) AP and the NFL thus entered into a new license agreement, with a term from April 1, 2012 through March 31, 2015 (the “Second AP Agreement”). (Second AP Agreement [Redacted]) The Second AP Agreement, while not identical to the First AP Agreement, states that AP is: (i) the “exclusive” and “worldwide agent and distributor” for licensing commercial uses of NFL photographs to NFL business partners (Second AP Agreement [Redacted]); and (ii) a non-exclusive worldwide agent and distributor for licensing editorial uses. (Second AP Agreement [Redacted].)
The Second AP Agreement permits “NFL Entities,” i.e., NFL (and its affiliates, subsidiaries, and successors) and the NFL Clubs, to make royalty-free use of AP-owned and Contributor Photographs for a wide range of editorial, charitable, and marketing uses, including:
[Redacted]
(Second AP Agreement [Redacted].) The Second AP Agreement expressly authorizes the foregoing uses of photographs by the NFL and NFL Clubs from April 1, 2009 through the end of the agreement’s term. (Id.)
Plaintiffs allege that at one time they contacted the NFL to “demand that it cease and desist using their copyrighted works without permission and without paying the requisite licensing fees.” (AC ¶ 83.) The NFL responded that the First AP Agreement included an express license that allowed complimentary use of any NFL-related photos licensed by AP. (Id.)
Plaintiffs allege that despite repeated cease and desist demands, the NFL Defendants continue to use thousands of Plaintiffs’ photographic works to promote the NFL’s brand, sell NFL-related products, and “enhance the NFL’s image” in order to generate revenue both as an independent entity and on behalf of the NFL Clubs. (AC ¶ 98.) To that end, Plaintiffs allege that NFL permits visitors to NFL. com to access large resolution copies of Plaintiffs’ photos “without appropriate copyright management information or protection against illegal copying,” as well as “eneourage[] visitor to ‘tweet’ on Twitter.com or ‘share’ on Facebook.com copies of Plaintiffs’ works.” (AC ¶ 111.)
Plaintiffs allege that if it were not for “the NFL’s illegal efforts to control the commercial licensing market for NFL-related stock photos, Plaintiffs’ licensing agents would not have been forced to purportedly grant the NFL ‘complimentary’ usage of Plaintiffs’ photos ... [and], [instead ..., Plaintiffs’ agents could have negotiated licensing agreements with individual NFL [Clubs] on better terms and/or Plaintiffs could have negotiated agreements with other licensing agents that precluded such unfair and inequitable terms.” (AC ¶ 148.)
Effective as of April 1, 2012, AP entered into an “NFL Photo Store Services and License Agreement” with Replay (“Replay Agreement”), under which Replay agreed to operate the “NFL Photo Store” for AP and fulfill customer orders. (Replay Agreement; AC ¶ 114 (“AP and Replay ... also sell copies of photographs directly to consumers through the NFL Photo Store.”).) Plaintiffs allege that Replay is an online retailer that specializes in selling sports-related photographs, and that owns and operates the website located at www. replayphotos.com. (AC ¶ 19.) Plaintiffs contend that Replay “infringed Plaintiffs’ copyrights by copying, publishing, displaying, exporting, and otherwise using and exploiting photographic works to which Plaintiffs own all copyrights without a valid license.” (AC ¶ 166.) Plaintiffs further allege that AP requested that Plaintiffs agree to amendments in their contributor agreements to allow such sales and Plaintiffs expressly rejected AP’s request. (AC ¶ 116.)
The AC sets forth seven counts: Count I alleges violations of the Sherman Act against NFL Defendants, Getty, and AP for conspiring to “restrain trade” through exclusive licensing agreements (AC ¶¶ 122-59); Count II alleges copyright infringement against all Defendants (AC ¶¶ 160-200); Counts III through VI allege vicarious copyright infringement, contributory copyright infringement, breach of contract, and breach of fiduciary duties against Getty and AP (AC ¶¶ 201-46); and Count VII alleges unjust enrichment against all Defendants (AC ¶¶ 24755).
The Contributor Agreements
Central to the success of Plaintiffs’ claims are the Getty Contributor Agreements and the AP Contributor Agree
1. The Getty Contributor Agreements
Each of the Getty Contributor Agreements requires arbitration of any disputes arising in connection with the agreements. Specifically, Section 9.5 of the Lowrance Agreement provides that “[a]ny dispute arising out of or in connection with the Agreement shall be finally settled under the Commercial Rules of the [AAA] or International Chamber of Commerce (‘ICC’).... ” (Lowrance Getty Contributor Agreement § 9.5.) In virtually identical language, Section 11.8 of the Getty Images Standard Terms and Conditions, which is incorporated into the remaining six Getty Contributor Agreements, provides that “[a]ny dispute arising out of or in connection with the Brand Agreement shall be finally settled under the Commercial Rules of the [AAA] or [ICC].... ” (See Lindquist Decl. Exs. B-G.)
2, The AP Contributor Agreements
a. The Relationship Between the Par- ■ ties
The AP Contributor Agreements are all governed by New York law.
While each Plaintiff retains copyright in his photos, he provides a broad copyright license to AP in all of his photos that are not rejected by AP. (AP Contributor Agreements, § 4 or § 4.2). In exchange for the license, AP agrees to pay royalties to each Plaintiff for certain sublicenses that AP grants to third parties. (Id., §§ 5.1-5.2). Either AP or the Plaintiff is entitled to terminate an AP Contributor Agreement, with or without cause, upon thirty days written notice. (Id., §§ 7 or 7.1). Obligations under the license section of the AP Contributor Agreements survive termination. (Id.)
In the AP Contributor Agreements, each Plaintiff agrees that he is an independent contractor to AP and that he has no agency relationship with AP:
Photographer shall be acting as an independent contractor and shall not represent himself or herself as an employee of AP, but only as an independent contractor.... Neither the making of this Agreement nor the performance of its provisions shall be construed to constitute either Party an agent, partner, joint venture, employee or legal representative of the other Party.
(AP Contributor Agreements, § 1 or § 1.3.)
Section 4 of eách AP Contributor Agreement, with slight variation, contains a broad license to AP of the photographer’s rights in his photos, which grants AP the right to copy, disseminate and otherwise use those photos, and permits AP to transfer and sublicense all these rights to “other entities”:
Photographer hereby provides to AP a perpetual, irrevocable, transferable, worldwide, right and license to reproduce, edit, translate the caption of, prepare derivative works of, publicly perform, publicly display, load into computer memory, cache, store and otherwise use the Event Photos and to transfer or sublicense these rights to other entities. With respect to NFL Event Photos taken at NFL Events for which AP directly or indirectly arranges for Photographer to obtain a credential, the foregoing rights shall be exclusive for so long as the NFL (or one of its affiliates) confers to AP (or one of its affiliates) the exclusive rights to operate as an NFL commercial use licensing agent, and nonexclusive thereafter. With respect to all other Event Photos, the foregoing rights shall be nonexclusive. AP shall present the Event Photos through AP’s image database currently known as “AP Images” and other image databases at AP’s discretion.6
(Boehm and Drapkin AP Contributor Agreements § 4.2.)
Subject to Section 7.1, Photographer hereby provides to AP a perpetual, irrevocable, transferable, worldwide, right and license to reproduce, edit, translate the caption of, prepare derivative works of, publicly perform, publicly display, load into computer memory, cache, store and otherwise use the Final Photos and to transfer or sublicense these rights to other entities. With respect to NFL Event Photos taken at NFL Events for which AP directly or indirectly arranges for Photographer to obtain a credential, the foregoing rights shall be exclusive for so long as the NFL (or one of its affiliates) confers to AP (or one of its affiliates) the exclusive rights to operate as an NFL commercial use licensing agent, and non-exclusive thereafter. With respect to all other Event Photos and the Archival Event Photos, the foregoing rights shall be non-exclusive. AP shall present the Final Photos through AP’s image database currently known as “AP Images” (the “AP Images Platform”) and other image databases at AP’s discretion.
(Spinelli, Stluka, Witte and Jasienski AP Contributor Agreements § 4.2.)
Photographer hereby provides to AP a non-exclusive, transferable, perpetual, irrevocable, worldwide right and license to reproduce, edit, translate the caption of, prepare derivative works of, publicly perform, publicly display, load into computer memory, cache, store and otherwise use the Event Photos and to transfer or sublicense these rights to other entities. AP shall present the Final Photos through AP’s image databasecurrently known as “AP Images” and other image databases at AP’s discretion.
(Lowrance AP Contributor Agreement § 4.2)
In all but Lowrance’s AP Contributor Agreement, the photographer has granted AP an exclusive license for NFL Event Photos taken. by him at an NFL event where AP directly or indirectly arranges for the photographer to be credentialed for the event. The license is to be exclusive for the period of time that AP remains the NFL’s exclusive licensing agent, and is non-exclusive thereafter. The Low-rance AP Contributor Agreement grants AP the same broad rights as the other AP Contributor Agreements, but on a non-exclusive basis. As with the other AP Contributor Agreements, the Lowrance Contributor Agreement expressly authorizes AP to transfer and sublicense to other entities to the full extent of AP’s own license rights.
c. The Royalty Provisions
Each of the AP Contributor Agreements sets forth AP’s agreement to pay royalties to the contributor, “[i]n exchange for the license granted in Section 4.” The Boehm, Drapkin, and Lowrance Agreements require AP to pay the photographer a royalty equal to a defined percentage of “Net Revenue” on “qualifying Event Photo Sales.” “Event Photo Sales” are defined as “mean[ing] only the a la carte sale of licenses for Event Photos through AP’s online database service, currently known as ‘AP Images.’ ” “A la carte sales” are further defined as “the sale of licenses for individual photos for which a per-image price is established.” “Net Revenue” is defined as “all cash actually collected by AP from the sale of copies of a particular Event Photo, less sales commission.” The AP Contributor Agreements also recognize that AP may offer the Event Photos for a la carte sale at a “bulk rate” which may include the photographs of photographers other than the contributor. In such a case, to determine royalties, AP is to apportion the cash received on an equal pro-rata basis across all photos included in the a la carte bulk rate. (AP Contributor Agreements § 5.1).
Section 5.1 of the Jasienski, Spinelli, Stluka and Witte AP Contributor Agreements provide that upon a “qualifying Event Photo Sale,” AP will provide the contributor with the greater of royalties calculated on the revenue-share basis described in the above paragraph, and “a royalty equal [to] twenty-five dollars ($25.00) per Final Photo.” However, these AP Contributor Agreements also provide that these minimum royalties are only due on “qualifying Event Photo Sales,” which means “the a la carte sale of licenses for Event Photos.” (Id.)
The AP Contributor Agreements do not require AP to license the contributors’ photographs to third parties only through a “sale” that would generate revenue and therefore royalties.
Applicable Standard
On a motion to dismiss pursuant to Rule 12(b)(6), all factual allegations in the complaint are accepted as true, and all infer-.
A claim is facially plausible when “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal,
When determining whether parties have agreed to arbitrate a dispute, courts cpnsider two questions: (1) whether a valid agreement to arbitrate under the contract in question exists and (2) whether the particular dispute in question falls within the scope of that arbitration agreement. See Hartford Accident & Indem. Co. v. Swiss Reins. Am. Corp.,
I. The Motion To Compel Arbitration Of Plaintiffs’ Claims Against Getty Is Granted
Arbitration is “strictly a matter of contract.” Ross v. Am. Express Co.,
Because of this policy favoring arbitration, “the burden of persuasion falls on the party attempting to escape an arbitration agreement, not the one attempting to enforce it.” Marubeni Am. Corp. v. M/V “OHFU” her Engines, No. 94 CIV. 626KSAS),
The Second Circuit has directed courts to classify arbitration clauses as either broad or narrow. JLM Indus., Inc.
A “presumption of arbitrability” arises from contracts containing broad arbitration clauses. ACE Capital,
a. The Arbitration Clauses Are Enforceable
Plaintiffs contend that they should not be subject to arbitration because the Getty Contributor Agreements as a whole were procedurally and substantively unconscionable. (See Pis.’ Opp’n to Getty Mot. 11-18.) The United States Supreme Court has, however, held that “a challenge to the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator.” Buckeye Check Cashing, Inc. v. Cardegna,
b. Breach Of Contract Claims Must Be Arbitrated
Plaintiffs’ breach of contract claims are arbitrable. The allegation that Getty failed to honor its obligations under the Getty Contributor Agreements (see AC ¶¶ 219-20, 223-26) obviously “aris[es] out of or in connection with” the Getty Contributor Agreements. (See Lindquist Decl. Exs. A § 9.5, B-G § 11.8); World GTL Inc. v. Petroleum Co. of Trinidad & Tobago Ltd., No. 10 Civ. 1542(LMM),
The breach of fiduciary duties claims also clearly arise out of and in connection with the Getty Contributor Agreements. Claimed breaches of fiduciary duty arising out of agreements with broad arbitration clauses are subject to arbitration. See, e.g., Syncora Guar. Inc. v. HSBC Mexico, S.A.,
In short, the breach of fiduciary duties claims are encompassed by the arbitration clauses and must be arbitrated.
d. Unjust Enrichment Claims Must Be Arbitrated
It is well established that unjust enrichment claims fall within the scope of broad arbitration clauses. See, e.g., Grenawalt v. AT & T Mobility, LLC,
e. Federal Copyright Infringement Claims Must Be Arbitrated
As noted, the FAA establishes a strong federal policy in favor of arbitration, and courts have long considered arbitration to be “presumptively an appropriate and competent forum for federal statutory claims.” MBNA Am. Bank, N.A. v. Hill,
The Supreme Court has set forth a two-step inquiry for determining whether statutory claims arising out of a contract are arbitrable. First, courts must determine “whether the parties’ agreement to arbitrate reached the statutory issues.” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
It is well settled that copyright claims asserted in connection with licensing disputes are encompassed by broad arbitration clauses like those contained in the Getty Contributor Agreements. In Kamakazi Music Corp. v. Robbins Music Corp.,
The arbitration provisions in the Getty Contributor Agreements are substantially similar to those held in Kamaka-zi and Cole to encompass both contract and related copyright claims. Moreover, Plaintiffs’ copyright claims clearly arise “out of or in connection with” their agreements with Getty, as they are predicated on Getty’s alleged authorization of or failure to prevent the NFL from engaging in uses of Plaintiffs’ images that purportedly fell outside the scope of the Getty Contributor Agreements. (See AC ¶¶ 71-78, 167-71, 203-06, 21215.) In other words, the claimed infringements are defined by the scope of the Getty Contributor Agreements. The copyright claims therefore must be arbitrated.
The Supreme Court has made clear that Sherman Act antitrust conspiracy claims are arbitrable. See Mitsubishi,
The Second Circuit has held that if the allegations underlying claims “touch matters covered by the parties’ contracts,” those claims must be arbitrated “whatever the legal labels attached to them.” JLM,
In JLM, the plaintiffs alleged an antitrust conspiracy among owners of tankers in the business of shipping liquid chemicals. The plaintiffs — corporations in the business of shipping, buying, selling, and trading chemicals in bulk — had entered into contracts with the defendants that directed “[a]ny and all differences and disputes of whatsoever nature arising out of this Charter ... be put to arbitration.” See
The Second Circuit disagreed:
[T]he damages which JLM asserts it suffered as a result of the conspiracy among the Owners result from the fact that it entered into the charters, each of which specifies price terms which are variously characterized in the amended complaint as “artificially high” and as “overpayments.” We therefore conclude that this is a dispute “arising out of’ the charters, and is therefore within the scope of the [ ] arbitration clause.
Id. The court added that in dealing with broad arbitration clauses, it “ha[s] not limited arbitration claims to those that constitute a breach of the terms of the contract at issue,” id. at 176 (quoting Mehler v. Terminix Int’l Co.,
Plaintiffs’ Sherman Act conspiracy allegations against Getty are analogous to those at issue in JLM. Plaintiffs allege, for example, that
[t]he NFL’s illegal monopoly and NFL Properties’ agreement to grant an exclusive license to Getty Images and then AP also artificially undermined Plaintiffs’ ability to bargain fairly with Getty Images and AP to obtain more favorable terms in their contributor contracts.... Because other licensors could not offer commercial licenses for NFL photos, Plaintiffs were forced into an impossible dilemma of either accepting the contract terms being offered by the NFL’s licensing partner or losing the ability to earn revenue from the sale of more lucrative commercial licenses.
(AC ¶ 144.) As in JLM, Plaintiffs contend that the damages they purportedly suffered as a result of the alleged conspiracy among the NFL Defendants and Getty flowed from the Getty Contributor Agreements. See JLM,
Nor are there any “legal constraints external to the parties’ agreement,” Mitsubishi,
In In re Cotton Yam, the plaintiffs sought to evade a broad arbitration clause by arguing that “the inability to join all defendants in a single proceeding [by virtue of a no-joinder clause in the arbitration agreements] prevented] them from vindicating their statutory rights.”
[C]o-conspirators are not necessary parties in an action against a single conspirator. There is nothing in the arbitration agreements that would prevent the plaintiffs from presenting evidence about the actions of non-party defendants in order to establish the existence of the price-fixing conspiracy alleged by the plaintiffs. Accordingly, the mere fact that the plaintiffs may not join the defendants in a single arbitration proceeding does not prevent the plaintiffs from effectively vindicating their statutory rights. While individual proceedings may be less efficient than a single proceeding, that inefficiency is a function of Congress’s preference for resolution of disputes by arbitration and cannot be a basis for defeating the arbitration that Congress was seeking to encourage.
Id. at 285.
The same reasoning' applies here. Plaintiffs’ assertion of nonarbitrable claims against alleged coconspirators should not prevent arbitration of the claims against Getty. Indeed, the principle that co-conspirators are not necessary parties applies in this case because the alleged conspiracy is based on separate, successive exclusive licenses between the NFL and Getty and AP, respectively. (See AC ¶ 134 (alleging the NFL granted exclusive licenses to “Getty Images and then AP”).) Plaintiffs allege that Getty held exclusive NFL licensing rights until 2009, (AC ¶ 46) after which AP entered into its own exclusive license agreement with the NFL (AC ¶ 46). The lack of any alleged temporal overlap between these licensing deals undermines Plaintiffs’ assertion that Getty is a necessary party to this litigation.
Plaintiffs argue that their antitrust claims are collateral to any contracts between Plaintiffs and Getty and that the claims do not depend on the interpretation of the Getty Contributor Agreements. (Pis.’ Opp’n to Getty Mot. 24-26.) However, the AC expressly links the claimed conspiracy to the Getty Contributor Agreements by alleging that the purported adverse impact of the alleged conspiracy between NFL and Getty is manifested in the Getty Contributor Agreements. (See AC ¶ 144.) As such, the Sherman Act claims appear to “touch matters covered by the parties’ contracts!.]” See JLM,
Plaintiffs also argue that the Court is “required to determine whether the claims would actually require construction of contract terms or determining rights under contract provisions.” (Pis.’ Opp’n to Getty Mot. 24.) However, a broad arbitration clause is “presumptively applicable to disputes involving matters going beyond the ‘interpret[ation] or enforce[ment of] particular provisions’ of the contract which contains the arbitration clause.” JLM,
In sum, because Plaintiffs’ antitrust claims touch and concern the Getty Contributor Agreements, the antitrust claims are properly referred to arbitration.
g. Objections Based On Cost Do Not Bar Arbitration
Finally, Plaintiffs’ objection that they will incur additional expense or inconvenience from having to arbitrate their claims against Getty (see Bloom Decl. Ex. C at 2) cannot defeat the strong federal policy in favor of enforcing arbitration agreements. The “possibility that a party
Additionally, “uninformed speculation about cost” is insufficient to carry the burden of proving that proceeding against antitrust defendants individually would prevent the plaintiffs from effectively vindicating their statutory rights. In re Cotton Yarn,
Finally, Plaintiffs note in passing that “there is a tremendous risk that Plaintiffs will not be able to effectively vindicate their claims against Getty Images because the NFL Defendants certainly will not agree to participate in arbitration and thus Plaintiffs cannot be assured of necessary discovery from those parties.” (Pis.’ Opp’n to Getty Mot. 30 n. 16.) However, any limitations on discovery in arbitration do not establish grounds to defeat the agreement to arbitrate.
Because Plaintiffs have failed to adequately plead or establish their objections based on cost, these objections are disregarded.
II. The Motion To Dismiss Plaintiffs’ Sherman Act Antitrust Claims (Count I) Against NFL Defendants and AP Is Granted
a. Antitrust Claims Against NFL Defendants
In order to state a claim against the NFL Defendants, Getty, and AP under Sections 1 and 3 of the Sherman Act, 15 U.S.C. §§ 1 and 3, that will withstand a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), Plaintiffs must allege sufficient facts to support a plausible inference that NFL Defendants, Getty, and AP took part in an agreement that unreasonably restrained trade.
The AC asserts that the NFL Defendants, in concert with Getty
First, Plaintiffs allege that each NFL Club “authorized the NFL and/or [NFLP] to make decisions regarding [its] separately owned intellectual property [and] to grant an exclusive license to a single licensing company to market and sell commercial licenses for all stock photography of NFL-related photos.” (Id. ¶ 24.) As such, according to Plaintiffs, in the absence of the alleged conspiracy, their “agents [i.e., Getty, AP or their competitors] could have negotiated licensing agreements with individual NFL Teams on better terms.” (Id. ¶ 148.) Second, Plaintiffs allege that the NFLP and NFL granted “illegal” exclusive licenses to Getty in 2007 and then AP in 2009 and 2012 (id. ¶¶ 25-27, 136), which prevented Plaintiffs “from seeking or obtaining fair market value for commercial uses of their NFL photographs” and “undermined [their] ability to bargain fairly with Getty Images and AP to obtain more favorable terms in their contributor contracts.” (Id. ¶¶ 143-44.) Plaintiffs also claim that they were harmed by the NFL’s decision in 2009 to switch exclusive li-censors from Getty to AP because Getty, with whom Plaintiffs had a continuing relationship, distributed their other photo collections (e.g., MLB and NCAA photos). (Id. ¶¶ 55-58,147.)
As a threshold matter, “Congress did not intend the antitrust laws to provide a remedy in damages for all injuries that might conceivably be traced to an antitrust violation.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters,
(1) the directness or indirectness of the asserted injury; (2) the existence'of an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement; (3) the speculativeness of the alleged injury; and (4) the difficulty of identifying damages and apportioning them among direct and indirect victims so as to avoid duplicative recoveries.
Id. (quoting Paycom Billing Servs., Inc. v. MasterCard Int'l, Inc.,
Generally speaking, “[i]n order to limit the class of plaintiffs with antitrust standing to the most efficient enforcers of the
Plaintiffs are neither consumers nor competitors in the alleged market for commercial licensing of NFL-related photographs. Plaintiffs do not purchase the rights to use NFL-related photographs for commercial purposes. Nor do they enter into license agreements with commercial enterprises that wish to use NFL photographs. Instead, they supply photographs to stock photography agencies, like Getty and AP, which compete in the alleged market. See Reading Int’l, Inc. v. Oaktree Capital Mgmt. LLC,
Plaintiffs contend in their opposition that they “directly competed with agencies such as Getty Images and AP,” (Pis.’ Opp’n to NFL Def.’s Mot. 28) and that “prior to the NFL’s decision to restrict licensing rights to a single agency, Plaintiffs were permitted to and did license their works directly to the NFL Teams and the NFL’s fans, as well as other typical customers and end users” (id., at 27-28). However, no such allegation is contained within the AC. The AC states that Plaintiffs are professional photographers who initially submitted their photos to NFL Photos, which then licensed those photos “to media outlets and commercial entities,” and after the NFL outsourced licensing to Getty and AP, Plaintiffs supplied their NFL-related photos to those agencies for licensing to commercial end-users. (AC ¶¶ 1, 17-18, 36, 44, 145.) Indeed, the AC clearly states that Plaintiffs have always “licensed the photos that they shot ‘on spec’ through third-party licensing agents (formerly NFL Photos and then Getty Images and currently AP).” (AC ¶ 36.) As such, Plaintiffs argument on this point must fail.
Specifically, with respect to the first “efficient enforcer” factor, to satisfy the antitrust injury requirement, see Atl. Richfield Co. v. USA Petroleum Co.,
The AC contains no facts to suggest that the challenged conduct reduced output of commercial licenses for NFL photographs
But “underpayment of royalties ... is not an antitrust injury because it has no adverse effect on competition or consumers.” Elliott Indus. Ltd. P’ship v. BP Am. Prod. Co.,
Plaintiffs also have failed adequately to plead antitrust injury because their asserted injury was not the result of the challenged conduct. Antitrust injury is limited to injuries that are “attributable to an anti-competitive aspect of the practice under scrutiny.” Atl. Richfield Co.,
Plaintiffs’ claim that, absent the NFL Clubs’ collective licensing arrangement, Getty and AP could have negotiated and secured better terms in agreements with individual NFL Clubs, and that, absent the exclusive licensing agreements, Plaintiffs could have negotiated and secured better terms with other stock photography agencies. (AC ¶ 148.) However, the AC alleges no facts to support these assertions, which themselves demonstrate and confirm the “critical disjunction” between Plaintiffs’ asserted injuries and any alleged anticompetitive agreement. Indeed, the AC does not contain any facts to suggest that Getty or AP would have incorporated the benefit of any better terms they may have received from an individual NFL
Plaintiffs separately contend that they have adequately pled antitrust injury by alleging a per se “horizontal price fixing scheme.” (Pis.! Opp’n to NFL Def.’s Mot. 25.) They also assert that “an adequate injury is alleged if the plaintiff is ‘a participant in some capacity in the market in which the merger occurs,’ ” or “merely allege[s] an intent to enter the relevant market.” (Pis.’ Opp’n to NFL Def.’s Mot. 24.) However, antitrust injury is not as broadly defined as Plaintiffs contend, see Brunswick,
In.sum, because Plaintiffs fail to plead sufficient facts to demonstrate antitrust injury, they do not satisfy the first “efficient enforcer” factor and dismissal is warranted. See Paycom,
With respect to the second factor, directly affected market participants could seek to enforce the antitrust laws on the basis of Plaintiffs’ alleged violations. Specifically, Getty’s and AP’s competitors are potential plaintiffs with respect to the exclusive dealing claims, and Getty and AP themselves are potential plaintiffs with respect to the collective licensing claims. Because each constitutes “an identifiable class ... whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement,” Plaintiffs lack standing here. Associated Gen. Contractors,
With respect to the third factor, Plaintiffs’ claimed injuries are too speculative to support antitrust standing. Plaintiffs have alleged that absent the NFL Clubs’ agreement to collectively license their intellectual property, Getty and AP would have negotiated better terms in agreements with individual NFL Clubs, and that absent the exclusive licensing agreements with Getty and AP, Plaintiffs would have negotiated better terms in their contributor agreements. (AC ¶ 148.) Plaintiffs’ theory is too speculative. See, e.g., Paycom,
Finally, Plaintiffs’ claims raise complex and difficult issues of identifying and ap
All four “efficient enforcer” factors weigh against a finding of antitrust standing. As such, Plaintiffs’ antitrust claims are subject to dismissal.
However, even if Plaintiffs had adequately established standing, the AC would still fail to adequately set forth an antitrust claim. An antitrust complaint must allege a relevant product market in which the anticompetitive effects of the challenged activity can be assessed. City of New York v. Grp. Health,
Act must allege a relevant geographic and product market in which trade was unreasonably restrained or monopolized.” (citation omitted)). When the proposed relevant market is defined without “reference to the rule of reasonable interchangeability and cross-elasticity of demand,” or “clearly does not encompass all interchangeable substitute products ... the relevant market is legally insufficient and a motion to dismiss may be granted.” Linzer Prods. Corp. v. Sekar,
Plaintiffs have defined the relevant market as the “market for commercial licensing of NFL-related stock photographs.” (AC ¶¶ 23, 126.) Generally, however, “the distribution of a single brand, like the manufacture of a single brand, does not constitute a legally cognizable market,” Global Disc. Travel Servs., LLC,
The court in Weber v. National Football League,
Plaintiffs contend that American Needle v. New Orleans Louisiana Saints,
The same cannot be said of the “market for commercial licensing of NFL-related stock photographs.” The “consumers” in the market alleged here are commercial enterprises licensing NFL-related photos to promote their products. (AC ¶¶ 150-52.) Plaintiffs have not plausibly alleged, and the AC is devoid of any facts to suggest, that if the price of NFL-related photos were to increase, “national photo li-censors, media outlets, online vendors, clothing retailers, and any other companies that sell advertisements or products” (AC ¶ 151) would not simply substitute different, less costly sports photographs to promote their products.
Adidas America is analogous to the instant case. In Adidas America, the court rejected plaintiffs proposed “market for the sales of NCAA promotional rights” because plaintiff had “failed to explain ... why ... sponsorship agreements with teams or individuals competing in the National Football League, the National Basketball Association, the Women’s National Basketball Association, Major League Baseball, Major League Soccer, or the Olympics, are not reasonably interchangeable with NCAA promotion rights or sponsorship agreements.” Adidas Am.,
Additionally, Plaintiffs allege that the NFL Clubs conspired to restrain trade in the market for commercial licensing of NFL-related photographs by allowing the NFL to “control and make decisions relating to each NFL Team’s independently owned intellectual property.” (AC ¶ 127.) However, the court in Washington v. National Football League,
In Washington, a putative class of former professional football players alleged that the NFL and NFL Clubs had monopolized the market for former players’ likenesses in violation of Section 1 by not
Here, unlike in American Needle, the intellectual property involved is historical football game footage, something that the individual teams do not separately own, and never have separately owned. Rather, the NFL owns the game footage, either alone or in conjunction with the teams involved in the game being filmed. These entities must cooperate to produce and sell these images; no one entity can do it alone.... The NFL and its teams can conspire to market each teams’ individually owned property, but not property the teams and the NFL can only collectively own.
Washington,
Similarly here, many if not most of the photographs at issue contain intellectual property owned by the NFL and at least one NFL Club — e.g., photographs displaying both the NFL shield and NFL Club marks on a player’s jersey and/or helmet, typically in NFL game-action settings or at NFL events. ■= Plaintiffs claim that their photo libraries include “tens of thousands of photos ... that do[ ] not include any marks, logos, or other intellectual property owned by the NFL Entities.” (AC ¶¶ 34-35.) Yet the majority of photographs Plaintiffs have attached to the AC are game-action photographs displaying the marks of the NFL and at least one NFL Club, and in many cases two NFL Clubs, and Plaintiffs have not pleaded sufficient facts to suggest that this case is principally about anything other than these types of NFL game and event photographs. Such photographs necessarily contain the intellectual property of more than one entity, and constitute “collectively owne[d]” property under Washington; the NFL and NFL Clubs “must cooperate to produce and sell these images; no one entity can do it alone.” Washington,
With respect to those photographs that reflect the intellectual property of only a single NFL Club, Plaintiffs also fail to allege a viable antitrust claim challenging the NFL Clubs’ collective licensing arrangement. As the Second Circuit held in Buffalo Broadcasting Co. v. American Society of Composers, Authors & Publishers, a collective licensing agreement does not constitute a “restraint” within the meaning of Section 1 when “an alternative opportunity to acquire individual rights is realistically available.”
Additionally, Plaintiffs’ assertion that this case involves “tens of thousands of photos [in their photo libraries] that do[ ] not include any marks, logos, or other intellectual property owned by the NFL Entities” (AC ¶¶ 34-35) is contradicted by the exhibits that Plaintiffs attached to the
Thus, Plaintiffs have not adequately alleged that the NFL Clubs’ collective licensing is a “restraint” within the meaning of Section 1. As such, on this basis, their claims relating to such collective licensing must be dismissed.
Plaintiffs further allege that the NFL Defendants’ granting of exclusive licenses to Getty and then AP violates Section 1 of the Sherman Act. (AC ¶ 135.) They claim that this anticompetitive activity began in 2003, when the NFL decided to use third parties to license the commercial rights to NFL photographs rather than continuing to conduct such licensing in-house through NFL Photos. (Id ¶¶ 44-46.) However, these agreements cannot harm competition; an exclusive license is something that the NFL can legally achieve without the aid of a licensee. See E & L Consulting, Ltd. v. Doman Indus. Ltd.,
Moreover, because the benefits of exclusive licensing agreements are well-recognized, the Second Circuit has stated that these “arrangements are presumptively legal.” E & L Consulting, Ltd.,
In order to adequately plead foreclosure in a relevant market, a plaintiff first must properly define the relevant market. See, e.g., Linzer Prods. Corp.,
In addition, the challenged agreements are not “exclusive;” rather, as noted above, the agreements provide Getty and AP only with exclusive rights limited to licensing NFL photographs to [Redacted] not to individual NFL Club business partners. (Getty Agreement [Redacted], First AP Agreement [Redacted], Second AP Agreement [Redacted].) Once the relevant market is properly defined to include, at a minimum, the commercial licensing of all sports-related photographs (a market in which NFL-related photographs constitute only a small fraction) and takes into account the limited “exclusivity” granted to Getty and AP, Plaintiffs cannot allege foreclosure. See Sterling Merch., Inc. v. Nestle, S.A.,
It also is well established that exclusive agreements do not harm competition when there is competition to obtain the exclusive contract. The Second Circuit has recognized that “[s]ueh a situation may actually encourage, rather than discourage, competition, because the incumbent and other [competitors] ... have a strong incentive continually to improve the [services] and prices they offer in order to secure the exclusive positions.” Balaklaw v. Lovell,
Here, the NFL’s licensing agreements with Getty and AP had exclusivity periods of no more than three years, and the NFL “entertained bids for the exclusive commercial licensing rights for NFL and NFL Team photos” at the conclusion of each agreement’s term. (AC ¶¶ 25-27.) These types of contracts do not foreclose competition and are not anticompetitive as a matter of law. See Indeck Energy Servs., Inc.,
b. Antitrust Claims Against AP
As discussed above with respect to the NFL Defendants, Plaintiffs lack standing to recover damages for the alleged antitrust violation because (1) Plaintiffs’ asserted injury is indirect; (2) other, better-positioned potential plaintiffs exist; (3) Plaintiffs’ claimed injuries are speculative; and (4) identifying damages and apportioning them among Plaintiffs would be speculative. See Gatt Commc’ns,
Additionally, Plaintiffs’ AC does not allege that AP had any involvement in an alleged agreement between the NFL and the NFL Clubs to create NFLP and to manage all commercial licensing of NFL-related stock photographs through NFLP. (AC ¶¶ 23-24; see also AC ¶¶ 37-39, 126-128, 130, 133). Plaintiffs allege only two agreements involving AP in their antitrust claim: the First and Second AP Agreements, effective respectively April 1, 2009 and April 1, 2012, each of which granted AP the exclusive right to commercially license NFL and NFL Club photographs for a term of three years. (AC ¶¶ 26-27, 54.)
Plaintiffs do not allege facts supporting a plausible inference that these exclusive license agreements are unlawful. An exclusive license, which merely confers upon the licensee the ability to exploit the licensor’s exclusive intellectual property rights, does not violate the antitrust laws. Zenith Radio Corp. v. Hazeltine Research, Inc.,
Accordingly, Plaintiffs have not alleged facts that would support a finding of exceptional circumstances, and have not overcome the presumption that the NFL and AP’s exclusive license agreements are legal. Plaintiffs’ antitrust claim against AP must, on this basis, therefore be dismissed.
Furthermore, as discussed above with respect to the NFL. Defendants, Plaintiffs have not alleged facts plausibly suggesting that they suffered anticompeti-tive injury from the existence or performance of the exclusive license agreements, a substantive element of every private antitrust claim. See Atl. Richfield,
Because NFL’s exclusive license to AP is not alleged to be the cause of Plaintiffs’ alleged anticompetitive injury, the AC fails to allege an “antitrust injury” with respect to AP.
Neither is Plaintiffs’ assertion that “[t]he NFL Teams and NFL Entities conspired to and did illegally restrain trade in concert with Getty Images and AP” (AC ¶ 129; see also AC ¶ 141) persuasive. There are no facts alleged to support this assertion of concerted action, and the conclusion itself does not state an antitrust claim against AP. Twombly,
Indeed, even if the NFL Defendants’ alleged conduct violated the Sherman Act, the alleged violation would not allow Plaintiffs to sue in antitrust. As noted above, Plaintiffs are not participants in the relevant market and cannot recover for antitrust injury. See, e.g., Reading Int’l, Inc. v. Oaktree Capital Mgmt.,
Because Plaintiffs’ alleged anticompeti-tive. injury does not derive from AP’s exclusive license, and the AC does not allege that AP was involved in any other anticom-petitive agreement, Plaintiffs have failed to allege an antitrust injury with respect to AP. Additionally, for the reasons stated above, Plaintiffs also fail to allege a plausible relevant product market.
The antitrust claim against AP must be dismissed for failure to state a claim.
a. Copyright Infringement Claims Against AP
In general, Plaintiffs allege that AP “exceeded the scope” of the limited rights granted to it under the AP Contributor Agreements by granting NFL an invalid sublieense, thereby infringing on Plaintiffs’ copyrights. (AC ¶ 192.) They further allege that AP also infringed Plaintiffs’ copyrights by offering copies of Plaintiffs’ photos for sale through its “NFL Photo Store” that it operates jointly with Replay. (AC ¶ 195.)
In general, a copyright owner who grants an exclusive or nonexclusive license to use a work waives any right to assert an infringement claim against the licensee, or anyone whom the licensee is entitled to sublicense, for acts within the scope of the license or sublicense. Graham v. James,
The license that each Plaintiff granted to AP in his AP Contributor Agreement is as broad as the Plaintiffs own copyright in his photos. For each photo at issue in the lawsuit, AP is given a ‘perpetual, irrevocable transferable worldwide right and license to reproduce, edit, translate the caption of, prepare derivative works of, publicly perform, publicly display, load into computer memory, cache, store and otherwise use’ the photos and the right to “transfer or sublicense these rights to other entities.” (AP Contributor Agreements, § 4.2.) Thus, under the plain language of the AP Contributor Agreements, neither AP’s license in the photos nor the sublicenses AP may grant appear to be limited as Plaintiffs allege.
Nothing in the license requires AP to issue only royalty-bearing sublicenses. AP acted within its licensed rights by granting the NFL Entities a sublicense giving them [Redacted] The NFL Entities’ permissible uses include all those set forth in the Second AP Agreement’s definition of “Scope of Use” (the “NFL Scope of Use”).
Plaintiffs contend that reading the AP Contributor Agreements to include a right to issue non-royalty-bearing sublicenses constitutes an “overly broad reading” and that there is no language that “expressly permit[s].” the issuance of retroactive or non-royalty-bearing sublicenses. (See Pis.’ Opp’n to AP Mot. 26-27.) However, Plaintiffs fail to cite to authority holding that each right in a license must be specifically called out to exist.
Copyright licenses are construed according to neutral principles of contract interpretation. See Boosey & Hawkes Music Publishers, Ltd. v. Walt Disney Co.,
As made plain by the language of the AP Contributor Agreements, the grant of rights made by Plaintiffs to AP, and AP’s right to sublicense these rights to others is broad and unlimited. Section 4.2 of the AP Contributor Agreements state that AP is granted a “perpetual, irrevocable, transferable, worldwide, right and license to reproduce, edit, translate the caption of, prepare derivative works of, publicly perform, publicly display, load into computer memory, cache, store and otherwise use the [NFL-related photos at issue] and to transfer and sublicense these rights to other entities.” (Emphasis added.) Non-royalty-bearing licenses are not excluded from this grant. If Plaintiffs wanted to exclude non-royalty-bearing sublicenses, such a term should have been negotiated and included explicitly, Boosey & Hawkes,
In their opposition, Plaintiffs assert, among other things,
The two instances Plaintiffs raise— thumbnails-and AP use of event photos— are contained within this Event Photo Sales royalty provision. Those instances appear to constitute exceptions to AP’s obligation to share revenue that it earns from Event Photo Sales. Thus, AP does not have to share revenue it earns from selling access to thumbnails of Plaintiffs’ Event Photos, or earned from AP’s own use of the Event Photos in advertising or promotion. Section 5 states, in sum, that AP must share revenue it earns from sub-licensing with Plaintiffs, except in certain situations. The broad rights granted in Section 4 of the AP Contributor Agreements do not limit AP’s ability to issue non-royalty-bearing sublicenses, and such a restriction may not be read in from Section 5, which deals only with AP’s obligation to share revenues that it actually earns from sublicenses.
Plaintiffs separately contend that AP was not entitled to grant sublicenses that covered periods before the issue date. Under § 4(a) of the Second ■ AP Agreement, [Redacted].
Contrary to Plaintiffs’ assertions, however, such a license is permissible. As a matter of copyright law, copyright owners and exclusive licensees are free to grant
Plaintiffs contend that the Second Circuit has held that “retroactive” licenses are unenforceable where one co-owner of a copyright unilaterally grants a license after the filing of an infringement complaint to “extinguish[ ] the accrued infringement claims of a non-consenting co-owner,” Davis v. Blige,
AP does not appear to have been a co-owner purporting to grant a license to which the other co-owner did not consent. Indeed, Plaintiffs make clear that AP is not a co-owner of Plaintiffs’ copyrights. (AC ¶¶ 65, 131,185.) Far from being a co-owner “extinguishing” Plaintiffs’ rights behind their backs after Plaintiffs filed their infringement suit — which was the scenario in Davis — AP was expressly granted by Plaintiffs complete authority to sublicense their photographs as AP saw fit, and AP exercised those rights without “extinguishing” any legal action commenced by Plaintiffs.
Each AP Contributor Agreement licensed to AP all the rights comprised in copyright for each photo as of the effective date, and lasting “perpetually].” AP had a co-extensive right to grant sublicenses. The AP Contributor Agreements do not limit AP’s rights to issue a sublicense that covers any period while the AP Contributor Agreements are in effect. AP was therefore authorized and empowered to grant broad sublicenses for the use of Plaintiffs’ copyrighted works and did so by issuing a sublicense to the NFL authorizing their uses of a Plaintiffs photos occurring after AP became a licensee of the Plaintiff, but before the issue date of the sublicense.
Plaintiffs further contend that AP lacked authority to grant such a license with respect to “Archival Event Photos” because
In fact, the instant case bears a close resemblance to Wu. In Wu, the court distinguished and limited Davis to its specific facts by granting judgment as a matter of law to the defendant sublicensee based on a retroactive license granted by the plaintiff photographer’s licensee. Id. at *4-5. As here, the plaintiff photographer in Wu had entered into licensing agreements with photography agencies that gave the agencies broad discretion to sublicense the photographs. The court determined that by granting the agencies discretion to confer upon the defendant “whatever licenses” were needed, the plaintiff “indisputably gave the Photo Agencies the discretion to enter into retroactive licenses.” Id. at *5. As such, no copyright infringement claim could lie. Similarly here, each Plaintiff is an experienced sports photographer who individually negotiated his contract with AP and knowingly granted AP broad license and sublicense rights. Plaintiffs may not now attack AP for exercising those rights. See generally Wu,
Plaintiffs’ additional contention that the “retroactive” license (or the Second AP Agreement in general) was invalid because it was “illegal under the Sherman Act” is without basis. (AC ¶¶ 168, 181.) However, as discussed above, Plaintiffs’ antitrust claims are insufficient. Because Plaintiffs do not adequately plead that the Second AP Agreement violates the Sherman Act, this contention must also fail.
Plaintiffs also allege that AP was required to “track or monitor” the NFL’s uses of photos, to limit the uses that the NFL could make of photos, and to pay Plaintiffs royalties for uses of their photos by the NFL or by Replay. They further contend that AP breached the AP Contributor Agreements by failing to perform these obligations. (AC ¶¶ 168-174, 220-26.) As shown above, the language of the AP Contributor Agreements imposes no such obligations on AP. However, even if the AP Contributor Agreements had contained such terms, and AP had breached those terms, AP would not be liable for copyright infringement; but only for breach of contract. See Graham,
Second Circuit law is clear that where a licensee’s use of a copyrighted work is authorized by a license, any claim for unpaid royalties for that use cannot form the basis of an infringement claim. Rather, a failure to pay royalties under a valid license agreement could only give rise to a breach of contract claim against the party with which the copyright owner has contracted to receive royalties. See, e.g., Graham,
Plaintiffs contend that their AP Contributor Agreements differ from those in Graham because AP’s obligations to pay royalties was a “condition” made “[i]n exchange for the license,” and therefore breach of that condition could give rise to an infringement claim. (See Pis.’ Opp’n to NFL Def.’s Mot. 32-33.) However, at least one court in this Circuit has held that language virtually identical to “in exchange for” is a covenant, not a condition. Powlus v. Chelsey Direct, LLC, No. 09 Civ. 10461,
Plaintiffs finally argue that, “at worst,” the AP Contributor Agreements are “ambiguous as to whether AP was permitted to grant ‘non-royalty-bearing’ ” licenses to third parties, and that this creates a triable issue of fact that bars dismissal. (PI. Opp’n to AP Mot. 31.) They assert generally that “a price term is an essential element of any binding agreement” and appear to argue that the absence of or silence regarding whether non-royalty-bearing licenses were permitted under the license constitutes an ambiguity in the contract necessitating the examination of extrinsic evidence. (Id.) This argument, however, is unavailing.
“The determination of whether a contract term is ambiguous is a threshold question of law for the court.” Walk-In Med. Ctrs., Inc. v. Breuer Capital Corp.,
As noted above, on the face of the AP Contributor Agreements, the grant of rights made by Plaintiffs to AP is extremely broad, and nothing in the AP Contributor Agreements restricts AP from granting non-royalty-bearing sublicenses or retroactive sublieenses. See Reiss v. Fin. Performance Corp.,
Because the facts of the AC do not sufficiently allege direct copyright infringement by AP, Count II of the AC against AP is dismissed.
b. Claims Against NFL Defendants
Plaintiffs’ copyright infringement claims are premised on a general allegation that the NFL has engaged in “unauthorized uses of Plaintiffs’ copyrighted photographs.” (AC ¶ 29.) Plaintiffs identify the following categories of alleged infringing uses of their images by the NFL:
1. Placement on NFL.com, including in “articles, as part of photo ‘essays,’ and also to create standalone photo ‘galleries’” (id. ¶¶75, 99, 104, 107, 109, 111);
2. Publication on international websites such as nfljapan.com, nflmexico.com, and nfl.com/international (id. ¶¶ 75, 100,107,194);
3. Incorporation in printed publications such as NFL Magazine, Super Bowl programs, reports, newsletters, and game programs (id. ¶¶ 75, 101, 118);
4. Use in television programming on the NFL Network (id. ¶¶ 75, 102, 117);
5. Display of a “multi-story” image “draped” over facades of the Dallas Omni Hotel in Dallas and Cowboys Stadium to promote Super Bowl XLV (id. ¶ 103); and
6. Use of unspecified internet “links that allow and encourage visitors to buy copies of the photos through www.nflshop.com” (id. ¶ 113).
In addition to these alleged infringements, Plaintiffs also make reference to alleged “remov[al]” of “copyright management information” from photographs. (Id. ¶ 112.)
The purported basis of Plaintiffs’ copyright claims, however, is not that the NFL lacked authority from Getty or AP to make the foregoing uses of Plaintiffs’ photographs. (See id. ¶ 72.) Nor do Plaintiffs allege that Getty or AP lacked the authority and ability to grant a license to the NFL that would encompass all of the al
Although Plaintiffs bring copyright infringement claims against “all defendants,” Plaintiffs fail to make allegations of specific instances of copyright infringement by any of the 32 NFL Clubs.
As noted above, it is well established that use of a copyrighted work within the scope of a valid license is non-infringing as a matter of law, Graham,
The various NF.L uses challenged by Plaintiffs fall within three categories: the first category consists of the NFL’s publication and display of the photographs for marketing purposes — specifically on (i) NFL.com, (ii) international websites, (iii) NFL-controlled print publications, (iv) the NFL Network, and (v) a “multi-story” image on buildings (AC ¶¶ 75, 99-104, 107, 109, 111); the second category is the NFL website “including] links that allow and encourage visitors to buy copies” of the Plaintiffs’ photographs “through www. nflshop.com” (id. ¶ 113); the third category is removal of “copyright management information” from photographs in purported violation of the Digital Millennium Copyright Act. (Id. ¶ 112.) Plaintiffs do not allege that the NFL itself is selling Plaintiffs’ photographs.
With respect to the first category, all of the alleged uses from April 1, 2009 forward are included within the rights AP granted to the NFL and NFL Clubs. The Second AP Agreement authorizes the NFL and NFL Clubs to make royalty-free use of contributor photographs for a variety of editorial, charitable, and marketing purposes. (Second AP Agreement [Redacted].) That broad grant of rights, in and of itself, is sufficient to cover the challenged uses on the NFL’s websites, publications, programming, and other marketing efforts. Furthermore: the Second AP Agreement permits use for [Redacted] and identifies specific permissible uses of Plaintiffs’ photographs that encompass the uses now being challenged. For example, the NFL and NFL Clubs are expressly permitted to make royalty-free use of Plaintiffs’ NFL images in [Redacted] Moreover, the Second AP Agreement (like the First AP Agreement) imposes no territorial limitations that render use of the images on foreign NFL websites outside the scope of the license. (Id. [Redacted].)
With respect to the second category — the NFL’s alleged “allowing” and “encouraging” of visitors to the NFL website to buy copies of photos on www.nflshop. com — the copyright infringement claim must also fail. First, Plaintiffs’ allegation is a fleeting reference to www.nflshop.com, and Plaintiffs do not provide any examples (in the AC or in any of the exhibits attached thereto) of a photograph that has been sold or offered for sale on that website. This sole conclusory allegation is neither sufficient to make out a plausible infringement claim based on alleged “encouragement” or “allowing” sales on that website, nor does it provide sufficient specificity of the alleged infringing use to survive a motion to dismiss. See, e.g., Broughel,
Plaintiffs’ contention that the Second AP Agreement constitutes a “retroactive” license (AC ¶ 87) with respect to alleged royalty-free uses of contributor photographs prior to the effective date of that agreement (April 1, 2012) does not alter the conclusion that the' NFL’s alleged uses were authorized and the infringement claims against the NFL and NFL Clubs should be dismissed. As discussed further above with respect to AP, the grant of a retroactive license can be permissible, and in fact is permissible when there is a broad grant of rights, as here.
Additionally, Plaintiffs do not allege that their contributor agreements foreclosed Getty and AP from licensing the use of their photographs to the NFL for editorial, charitable, or marketing purposes across a wide variety of media. Rather, Plaintiffs’ complaint is that that they were not paid by Getty and AP — and that Getty and AP did not seek to collect from the NFL (or NFL Clubs) — “the appropriate commercial licensing rates required for such uses.” {Id. ¶ 110.) For example, Plaintiffs claim that:
• Getty and AP “allowed the NFL to make free or ‘complimentary’ use,” “failed to charge the NFL appropriate market value” {id. ¶ 72), and permitted the NFL to use Plaintiffs’ photos “without paying for any usage rights and without reporting usages to Plaintiffs on their royalty statements” {id. ¶ 82);
• “[T]he NFL has never paid any fees or compensation to Plaintiffs ... and none of [the challenged] uses has ever been reported by Getty Images or AP to Plaintiffs on any royalty report or otherwise” {id. ¶ 106);
• Plaintiffs’ photographs were not included in Getty’s or AP’s existing “royalty-free collections or offerings” {id. ¶ 173) and should have been part of “Rights-Managed licensing” that “would require a higher license fee than a license granting more narrow usage rights” {id. ¶ 70);
• “The notion that AP was authorized to grant its customers complimentary or ‘non-royalty bearing’ licenses” without any “compensation to Plaintiffs is anathema to the fundamental purpose and objective” of the Plaintiffs’ agreements {id. ¶ 80); and
• “Plaintiffs have never received any compensation in exchange for the NFL Defendants’ prolific and ongoing use of thousands of Plaintiffs’ photos.” {Id. ¶ 76.)
However, even assuming arguendo that Plaintiffs are entitled to such royalties under their agreements with AP, such an allegation cannot form the basis for a copyright infringement claim. As discussed above, a failure to pay royalties under a valid license agreement can only give rise to a breach of contract claim, not a claim of copyright infringement and Plaintiffs have failed to adequately establish that the failure of royalties constituted a violation of a “condition.” See, e.g., Graham,
c. Copyright Infringement Claims Against Replay
As with NFL, AP had a right to grant broad sublicense to Replay to use Plaintiffs’ photographs, and did, in fact, grant such a sublicense as part of the
III. The Motion To Dismiss Plaintiffs’ Vicarious Copyright (Count III) and Contributory Infringement Claims (Count TV) Against AP Is Granted
Counts III and IV of the AC do not state plausible claims for vicarious and contributory copyright infringement against AP, based on the NFL and Replay’s asserted use of photos. AP’s license from Plaintiffs permitted the uses of the photos by NFL and Replay alleged in the AC, and AP was entitled to subli-cense those rights to the NFL and Replay. The alleged uses are not copyright infringement. See Colour-Tex,
As such, Counts II through IV of the AC for direct or secondary copyright infringement against AP are dismissed.
IV. The Motion To Dismiss Plaintiffs’ Breach Of Contract (Count V) Against AP Is Granted
A breach of contract claim must be dismissed where the unambiguous terms of the contract do not support a plaintiffs claim. Soroof Trading Dev. Co. Ltd. v. GE Fuel Cell Sys. LLC,
These principles require dismissal of Plaintiffs’ breach of contract claim against AP. Plaintiffs’ nowhere allege specific contractual provisions that were allegedly breached by AP. Plaintiffs allege the following obligations on AP’s part: (1) Plaintiffs’ photos are subject to “rights managed” licensing (AC ¶ 69); (2) the agreements restricted AP’s ability to retroactively or otherwise sublicense the photos to the NFL on a royalty-free basis (AC ¶ 223); (3) AP was required to notify Plaintiffs that it was granting the NFL Entities a royalty-free license to use the photos (AC ¶ 67); and (4) AP was required to report non-royalty bearing licenses of their photos (AC ¶¶ 68, 225). Plaintiffs have not shown any contractual language supporting these assertions.
In fact, Plaintiffs’ conclusions are contradicted by the actual terms of the AP Contributor Agreements. While Plaintiffs retained all copyrights in their photos (AP Contribution Agreements § 4.1), this fact did not limit Plaintiffs’ broad license to AP, which permitted AP to grant a sublicense to the NFL.
Finally, in their opposition to AP’s motion to dismiss, Plaintiffs contend that the AP Contributor Agreements were obtained through “duress” or are “unconscionable.” (See Pis.’ Opp’n to AP Mot. 16-19.) However, while Plaintiffs cite to two paragraphs of the AC which would seem to support such claims (see AC ¶¶ 144-45), these contentions are not explicitly present or set forth as claims in the AC and at best
In sum, Plaintiffs have failed to plausibly plead a claim for breach of contract against AP. Their conclusory allegations as to the terms of the contracts allegedly breached by AP are contradicted by the plain language of their own AP Contributor Agreements. As such, Count V is dismissed.
V. The Motion To Dismiss Plaintiffs’ Breach of Fiduciary Duties (Count VI) Against AP Is Granted
Count VII of the AC, which alleges that AP breached a fiduciary duty to Plaintiffs, is premised on the legal conclusion that AP “held itself out” as Plaintiffs’ “agent” and therefore owes them a special fiduciary duty. (AC ¶¶ 235-45.) However, the assertion of agency is conclusively contradicted by the Plaintiffs’ own agreements. Each Plaintiffs AP Contributor Agreement expressly states that:
Photographer shall be acting as an independent contractor and shall not represent himself or herself as an employee of AP, but only as an independent contractor .... Neither the making of this Agreement nor the performance of its provisions shall be construed to constitute either Party an agent, partner, joint venture, employee or legal representative of the other Party.
(AP Contributor Agreements § 1 or § 1.3.) In disputes between a purported principal and purported agent, where the interests of third parties or government agencies are not in issue, the parties are bound by a contractual agreement that their relationship is not one of agency. Such a disclaimer bars a claim for breach of fiduciary duty. See, e.g., In re Rezulin Prods. Liab. Litig.,
Finally, the breach of fiduciary duty claim must be dismissed because it is duplicative of Plaintiffs’ claim for breach of contract. Both claims are based on the same allegations and alleged duties owed to Plaintiffs: that AP, under its contracts with Plaintiffs, was required to track and monitor the NFL uses of Plaintiffs’ photos and to charge the NFL licensing fees Ccompare AC ¶¶ 223 and 241) was not permitted to grant retroactive licenses (compare AC ¶¶ 222 and 242), and failed to provide allegedly required information to Plaintiffs (compare AC ¶¶ 225 and 2AA-45).
Plaintiffs have also contended that the “terms” of the AP Contributor Agreements “demonstrate that the entire purpose for Plaintiffs to enter these agreements was to earn royalties from AP licensing their photos” and the “covenant of good faith and fair dealing thus precludes AP’s self-serving reading of the contracts.” (Pis.’ Opp’n to AP Mot. 26.) However, the AC does not plead a breach of an implied covenant of good faith and fair dealing. At any rate, while it is true that contracts include an implied covenant of good faith and fair dealing under New York law, a claim for breach of the implied covenant will be dismissed as redundant “where the conduct allegedly violating the implied covenant is also the predicate for breach of covenant of an express provision of the underlying contract.” Usov v. Lazar, 13 Civ. 818,
VI. The Motions To Dismiss Plaintiffs’ Unjust Enrichment Claim (Count VII) Against NFL Defendants, AP, And Replay Are Granted
“In the alternative to their copyright claims” (AC ¶ 248), Plaintiffs have asserted a claim for unjust enrichment based on NLF Defendants, AP, and Replay’s alleged uses of their photographs. This claim, too, must fail because enforceable contracts govern the use of Plaintiffs’ photographs and because the claim is preempted by the Copyright Act.
a. Enforceable Contracts Govern The Use Of Plaintiffs’ Photographs
It is well-settled that “the existence of a valid and enforceable contract precludes an unjust enrichment claim relating to the subject matter of the contract.” Morgan Stanley & Co. v. Peak Ridge Master SPC Ltd.,
They are similarly precluded as against AP. There is no dispute that every Plaintiff has entered into an AP Contributor Agreement, and that each AP Contributor Agreement deals with the subject matter which is the basis for the unjust enrichment claim, namely the extent to which Plaintiffs will be compensated for use of their photographs. As shown above, the AP Contributor Agreements do not prohibit AP from sublicensing Plaintiffs’ photographs to NFLP for certain uses that will not result in the payment of royalties to the Plaintiffs. As such, Plaintiffs may not circumvent their contracts through, the expedient of an unjust 'enrichment claim.
b. Copyright Act Preempts Unjust Enrichment Claims
Even if Plaintiffs’ state-law claim for “unjust enrichment” were not precluded by the existence of written agreements, it still could not be maintained because it is preempted by Section 301(a) of the Copyright Act.
Under § 301(a):
all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title.Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.
A state-law claim is preempted by § 301(a) when:
(1) the particular work to which the claim is being applied falls within the type of works protected by the Copyright Act under 17 U.S.C. §§ 102 and 103, and (2) the claim seeks to vindicate legal or equitable rights that are equivalent to one of the bundle[s] of exclusive rights already protected by copyright law under 17 U.S.C. § 106. The first prong of this test is called the “subject matter requirement,” and the second prong is called the “general scope requirement.”
Briarpatch Ltd. v. Phoenix Pictures, Inc.,
For a claim arising under state law to be preempted, two tests must be met. The first, called the “subject matter requirement,” Nat’l Basketball Ass’n v. Motorola, Inc.,
For a state-law claim not to be considered ‘equivalent’ to a copyright claim, the state claim must require an additional element that is qualitatively different from the elements of copyright infringement. The courts “take a restrictive view of what extra elements transform an otherwise equivalent claim into one that is qualitatively different from a copyright infringement claim.” Briarpatch,
Plaintiffs’ Count VII alleges that Defendants were “unjustly enriched by the uncompensated use of Plaintiffs’ photos.” (AC ¶ 249.) However, both preemption elements are satisfied in this case regarding NFL Defendants. As to the first element, Plaintiffs allege, and it is therefore presumed for purposes of this motion, that their photographs are protected by the Copyright Act. As to the second element, the substantive allegations underlying Plaintiffs’ unjust enrichment claim are identical to those underlying their infringement claims: that the NFL improperly copied, displayed, and distributed Plaintiffs’ photographs without paying royalties. (See, e.g., AC ¶¶ 176, 250-251.) While “enrichment” is an element of unjust enrichment but not copyright infringement, the allegation that the NFL has been “unjustly enriched ... at the expense of Plaintiffs” (AC ¶ 254) as a result of the alleged infringements is insufficient to avoid preemption. Briarpatch Ltd.,
Moreover, no allegation is made suggesting that AP was unjustly enriched: Plaintiffs’ claim only addresses the “NFL Defendants’ uses of their photos” without paying royalties. (Id. ¶¶250, 252.) But even if this claim were read to assert that AP was somehow unjustly enriched, it would also fail on preemption grounds.
Lastly, the Plaintiffs’ unjust enrichment claim against Replay is similarly preempt
Conclusion
For the reasons set forth above, Getty’s motion to compel arbitration is granted and Defendants’ motions to dismiss are granted. The AC is dismissed without prejudice with leave to replead within 20 days of this opinion.
It is so ordered.
Notes
The initial Opinion was filed under seal to protect any confidential information asserted by the parties,
. Plaintiffs argue specifically that the Second AP Agreement and the Replay Agreement (de
. "NFL Entities,” as defined in the AC, refers to the same entities defined herein by the same abbreviation.
. Plaintiffs allege that they primarily photographed NFL events and games under "speculation agreements,” or "on spec,” meaning that instead of being paid flat fees for their work they retained ownership of the copyrights in the photos that they took during an event and then earned income by licensing their photos. (AC ¶ 32.) Plaintiffs note that this action only involve those photos that Plaintiffs created on spec. (AC ¶ 33.)
. Discussion of the Getty Contributor Agreements is limited to the terms relevant to Getty’s motion to compel arbitration.
. "AP Contributor Agreements” as used herein collectively refers to all the AP Contributor Agreements between AP and Plaintiffs. Terms are substantially the same across AP Contributor Agreements, although in some AP Contributor Agreements, the terms are divided only by section numbers, while in others, section and subsection numbers are used. Citations reference both section and subsection numbers. References to a specific AP Contributor Agreement are prefaced by the particular Plaintiff's name.
. "Event Photos” are defined as the photographs taken by the contributor at an "Event,” which have been selected by the contributor as his best photographs taken at the Event ("Best Cut Photos”) (AP Contributor Agreements § 3.1) and which AP has not rejected. {Id. § 3.4). "NFL Event Photos” are Event Photos taken at "NFL Events,” which are Events credentialed, promoted, sponsored or requested by the NFL, its affiliates, and its member- clubs. {Id.) Some AP Contributor Agreements also use the term "Final Photos,” which refer to the contributor’s Event Photos together with his "Archival Event Photos” (photos taken by the contributor at NFL games prior to the effective date of the AP Contributor Agreement). {Id. § 3.2.1.)
. Some of the AC Contributor Agreements contain a "minimum royalty” provision. However, minimum royalties are due only where AP has made an "a la carte sale of licenses for Event Photos.” (AP Contributor Agreements § 5.1.)
. To the extent that Plaintiffs rely on agreements not pleaded in the AC (see Pis.’ Opp’n to Getty Mot. 28 (arguing that Plaintiffs’ claims arise under separate subsequent agreements with no arbitration clauses that are not mentioned in the AC)), their arguments are disregarded. See Klauber Bros., Inc. v. Russell-Newman, Inc., 11 CIV. 4985 PGG,
. Collins & Aikman did not involve an antitrust claim. At issue there was which of two contracts between the parties was implicated by the plaintiffs’ state-law claims. See
. Section 3 of the Sherman Act merely extends the reach of Section 1 to trade or commerce involving U.S. Territories and the District of Columbia. Substantively, however, Section 3 claims are analyzed in the same manner as Section 1 claims. See Dart Drug Corp. v. Parke, Davis & Co.,
. Consistent with the rest of this opinion, this section's mention of Getty does not serve as a determination with respect to Getty's antitrust liability but rather mentions Getty as an alleged participant in Plaintiffs’ asserted antitrust conspiracy.
. That these more direct entities have not filed suit is telling. As the Supreme Court has observed, "if there is substance to [plaintiffs] claim, it is difficult to understand why the[] direct victims of the conspiracy have not asserted any claim in their own right.” Associated Gen. Contractors,
. See also Hack v. President & Fellows of Yale Coll.,
. At a minimum, under American Needle the collective licensing of intellectual property for NFL-related photographs is reasonable as a matter of law because collective licensing is "essential if the product is to be available at all.”
. The Second Circuit made clear that although it might be “difficult” to obtain licenses outside the joint venture, "realistic alternative[s]” to a collective license exist so long as individual licensing remains possible. Buffalo Broad.,
. Plaintiffs also take issue with NFLP's decision in 2009 to grant exclusive licensing rights to AP, rather than Getty. (AC ¶ 55.) But "freedom to switch suppliers lies close to the heart of the competitive process that the antitrust laws seek to encourage." NYNEX Corp. v. Discon, Inc.,
. Specifically, Plaintiffs allege:
• "[T]he NFL Defendants leveraged their illegal monopoly to obtained [sic] unfettered access to Plaintiffs’ works and force Plaintiffs’ agents to purportedly grant 'complimentary' or 'non-royalty bearing’ licenses.” (AC ¶ 75.)
• "AP granted this retroactive 'license' to the NFL under threats of coercive pressure by the NFL, including the threat of moving its exclusive license back to Getty Images, which had submitted a bid to reacquire the NFL’s business.” (AC ¶ 88.)
• “The NFL exploited its illegal control and monopoly of the commercial licensing rights to NFL content to force Getty Images and now AP to grant the NFL unfettered access to Plaintiffs’ image libraries and to rob Plaintiffs of their rightful compensation for such uses.” (AC ¶ 95).
• "The NFL has been able to convince Plaintiffs' licensing agents to purportedly allow this rampant and blatant exploitation of Plaintiffs' works only because of its illegal monopoly over the commercial licensing rights to NFL content.” (AC ¶ 96.)
• "The NFL Defendants’ illegal conduct directly and proximately created the circumstances that forced Plaintiffs into a 'take-it- or-leave-it’ scenario when negotiating license terms with the NFL's chosen exclusive licensing partner (first Getty Images until 2009 and then AP thereafter).” (AC ¶ 144.)
• "If it were not for the NFL’s illegal efforts to control the commercial licensing market for NFL-related stock photos, Plaintiff’s licensing agents would not have been forced to purportedly grant the NFL 'complimentary' usage of Plaintiffs’ photos.” (AC ¶ 148.)
. Because Getty’s motion to compel arbitration is granted, the claims regarding the NFL Defendants’ uses of Plaintiffs’ Getty photos will be stayed pending arbitration. See, e.g., Hikers Indus., Inc. v. William Stuart Indus. (Far East) Ltd.,
. [Redacted]
. Plaintiffs cite to S.O.S., Inc. v. Payday, Inc.,
. Plaintiffs make several assertions which will be briefly addressed. First, Plaintiffs contend that AP did not contest the plausibility of their copyright claims. This, however, is clearly contradicted by AP's moving memorandum. (See AP Mot. 13-19.) Second, Plaintiffs make a passing assertion that the AP Contributor Agreements may be invalid due to "fraud.” (Pis.’ Opp’n to AP Mot. 18.) However, the AC does not allege fraud, so this contention will be disregarded. Last, Plaintiffs make mention of the doctrine of contra proferentum (Pls.’ Opp’n to AP Mot. 22 n. 8), but that doctrine only applies where a contract is ambiguous which, as discussed below, the contracts do not appear to be, and only where there are no other interpretative tools to determine the parties’ intent. See Chesapeake Energy Corp. v. Bank of New York Mellon Trust Co., N.A.,
. Plaintiffs further contend that if AP were correct that it was permitted to ‘sublicense' its rights, "then it must follow that the NFL would be burdened with all of the responsibilities and limitations of the license grant.” (Pis.' Opp'n to AP Mot. 24.) However, this assertion is without support.
. [Redacted] (§ the effective date of his AP Contributor Agreement, when AP acquired the right to license his photos. AP’s subli-cense to the NFL Entities thus cover their uses of each Plaintiff’s photos for the period occurring on or after the effective date of that Plaintiff's AP Contributor Agreement.
. Furthermore, there are basic differences between Davis and the facts of this case. In Davis, there was no written agreement between the copyright co-owners. One of the co-owners assigned his interest (including, purportedly, all causes of action for infringement of the copyright) to a person who had been sued for infringement by the other co-owner. The assignee then claimed that he was immune from the second co-owner’s infringement suit. Davis held that the assignment cannot be given retroactive effect to defeat the suing co-owner’s vested infringement claim, because one co-owner has no power to grant an exclusive license or release another co-owner’s accrued claims. Id.,
. The sole exception is a stray reference to "individual NFL Teams” distributing unspecified "game programs” thát included Plaintiffs' works. (AC ¶ 101.) Even as to this purported use, however, it is "the NFL” that is alleged to have "copied and published” Plaintiffs’ works. In their opposition, Plaintiffs, without disputing that the AC lacks specific allegations of infringement by any of the 32 NFL clubs, assert that they are permitted to plead infringement "upon information and belief.” (Pis.' Opp’n to NFL Def.’s Mot. 22.) This, type of pleading, however, is precisely the sort that cannot survive a motion to dismiss. See Palmer Kane LLC v. Scholastic Corp., No. 12 Civ. 3890,
. Even assuming arguendo that Plaintiffs had sufficiently alleged infringing acts by any of the NFL Clubs, any copyright claim would nevertheless fail for the same reasons that the copyright claim against the NFL fails (as discussed below), including that the alleged uses of Plaintiffs’ photographs are fully authorized and that allegations that Plaintiffs have been deprived of royalties can only give rise to breach of contract claims against Getty and AP. In this regard, the Getty and AP Agreements expressly permit the NFL Clubs to make the me marketing uses of Plaintiffs’ photographs a NFL. (Getty Agreement [Redacted]; First AP Agreement [Redacted], Second AP Agreement [Redacted].)
. As with the Getty Agreement and First and Second AP Agreements, Plaintiffs’ argument that the Court should not consider the Replay Agreement is unavailing. The Replay Agreement was attached as an exhibit to AP's original motion to dismiss the Complaint, which was incorporated by reference by Replay. (See Dkt. Nos. 26-28, 36-38.) Additionally, Plaintiffs’ reliance on extraneous material to support contentions not found in the AC will be disregarded. See, e.g., Adams v. Crystal City Marriott Hotel, 02 Civ. 10258(PKL),
. Ownership of copyright in the photos does not give Plaintiffs the exclusive right to pursue claims for infringement. For all Plaintiffs except Lowrance, AP is an exclusive licensee, and AP has the right to sue for infringement of its exclusive license rights. 17 U.S.C. § 501(b); Eden Toys, Inc. v. Florelee Undergarment Co.,
. Plaintiffs’ allegations regarding the content of the First and Second AP Agreements (AC ¶¶ 175-76) or a request by AP to amend the AP Contributor Agreements (AC ¶¶ 116, 196— 97) are similarly unavailing. It is the AP Contributor Agreements, not alleged unconsummated amendments to those contracts, that govern AP’s right to license and subli-cense Plaintiffs’ photos. As detailed above, the broad license granted in the AP Contributor Agreements is the operative provision with respect to Plaintiffs’ copyright infringement and breach of contract claims. Plaintiffs' inclusion of allegations regarding "rights managed licensing” which constitute extrinsic evidence is not considered in light of the unambiguous terms of the AP Contributor Agreements and the agreements’ merger clause, which states that each AP Contributor Agreement "incorporates the entire understanding of the Parties and supersedes any and all prior agreements, oral or written, relating to Photographer's relationship with AP and is intended as a complete and exclusive statement of the terms of the arrangement between the parties.” (AP Contributor Agreements § 10); see also ABHA Int’l, LLC v. Clover Int’l Corp., 11 Civ. 6841,
. Plaintiffs allege in their breach of contract count that the AP Contributor Agreements specifically provided that Plaintiffs retained the "exclusive right to pursue claims for infringements.” (AC ¶ 221.) Plaintiffs then allege in their breach of fiduciary duty count that in AP’s prior motion to dismiss, AP claimed that "it is entitled to pursue and settle infringement claims on plaintiffs’ behalf” and that, as such, AP "must either claim such authority as co-owners of the underlying copyrights or as agents for the copyright owners.” (AC ¶¶ 234, 236.) All Plaintiffs but Lowrance have issued exclusive licenses to AP encompassing all of their rights in copyright. This exclusive license gives AP the right to sue infringers as a matter of law — not for infringement of Plaintiffs' rights, but for infringement of AP’s own rights. Were AP to sue for infringement, it would neither be acting as a co-owner of copyright nor as an agent of Plaintiffs. Thus, AP's right to sue for infringement does not bear on whether AP is an agent of Plaintiffs. Plaintiffs are bound by their own contractual agreements that unambiguously state that AP does not act as their agent, i.e., fiduciary.
. The fact that Plaintiffs allege unjust enrichment "in the alternative” to their copyright infringement claims does not save Count VII from dismissal. "The relevant question is whether Plaintiffs could bring their claims under the copyright law at all, not whether they will, nor even whether they, will ultimately prevail on their copyright claim.” Moser Pilon Nelson Architects, LLC v. HNTB Corp., 05 Civ. 422,
Additionally, Plaintiffs assertion that "even if AP is correct that it was technically authorized to grant a complimentary, royalty-free, and retroactive license to the NFL, it was still