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Copyright Owners May Lose Standing to Sue for Infringement as a Result of Agreements with Industry Groups

By Stephanie Robinson

A Western District of New York Magistrate Judge recently recommended that claims filed by the owners of several copyrighted songs (allegedly performed without their permission) should be dismissed as a result of the plaintiffs? membership in the American Society of Composers, Authors and Publishers (?ASCAP?). In ruling on a number of pre-trial matters, the Judge independently raised the issue of the plaintiffs? standing to sue based on ASCAP membership agreements they had attached to a motion for summary judgment. Those agreements included the following provisions: 1. "[Plaintiff] grants to [ASCAP] for the term hereof, the right to license non-dramatic public performances ... of each musical work .... The rights hereby granted shall include: (a) All the rights and remedies for enforcing the copyrights or copyrights of such musical works ... as well as the right to sue under such copyrights in the name of [ASCAP] and/or in the name of [plaintiff] and/or others, to the end that [ASCAP] may effectively protect and be assured of all the rights hereby granted. * * * 3. [ASCAP] agrees, during the term hereof ... to hold and apply all royalties, profits, benefits and advantages arising from the exploitation of the rights assigned to it by its several members, including [plaintiff], to the uses and purposes as provided in its Articles of Association. 4. [Plaintiff] hereby irrevocably, during the term hereof, authorize, empowers and vests in [ASCAP] the right ... to prevent the infringement thereof, to litigate, collect and receipt for damages arising from infringement ... and to release, compromise, or refer to arbitration any actions, in the same manner and to the same extent ... as [plaintiff] might or could do, had this instrument not been made. 5. [Plaintiff] hereby makes, constitutes and appoints [ASCAP] or its successor [plaintiff's] true and lawful attorney ... to do all acts, take all proceedings ... proper or expedient to restrain infringements and recover damages". 6. [Plaintiff] agrees from time to time, to execute, acknowledge and deliver to [ASCAP], such assurances ... as [ASCAP] may deem necessary or expedient to enable it to ... enjoy ..., in its own name or otherwise, all rights and remedies aforesaid." The Judge stated that the effect of the above provisions was to strip the plaintiffs of their standing to sue under Article III of the U.S. Constitution. Under the Judge?s interpretation of the agreements, the plaintiffs assigned exclusively to ASCAP all rights to seek remedies for infringement of the covered works. Therefore, according to the Judge?s recommendation, none of the plaintiffs was unable to show that his ?individual need requires the remedy for which he asks?that he stands to profit in some personal interest?and that he personally would benefit in a tangible way from the court's intervention." (internal quotes and citations omitted) Many software publishers, including Microsoft, Adobe and Autodesk, are members in industry trade groups such as the Business Software Alliance (?BSA?) and the Software & Information Industry Association (?SIIA?), which typically operate under powers of attorney from the publishers to target small-to-medium-sized businesses with allegations of software copyright infringement. In the event of litigation arising from such allegations, filed either directly by the publishers or by the BSA or SIIA, it would be a good idea to carefully review all relevant membership documents to determine the scope of authority under which the named plaintiff has filed the action. It will also be interesting to watch the New York litigation to see if the Magistrate Judge?s recommendation is adopted by the District Court and upheld on appeal, if any.

Full post as published by Business and Technology Law on April 23, 2008 (boomark / email).