IP Law Daily, COPYRIGHT—M.D.N.C.: Daughtry’s copyright claims stayed pending resolution of another dispute with former band mates, (Jul 6, 2015)

By Jody Coultas, J.D.

Former band mates of singer Christopher Adam Daughtry were granted a stay of Daughtry’s federal Copyright Act claims pending resolution of their state court dispute with Daughtry over the ownership of songs on the band’s album by the federal district court in Winston-Salem, North Carolina (Daughtry v. Andrews, July 2, 2015, Biggs, L.).

The parties were members of a band called Absent Element and recorded an album titled Uprooted. Defendants filed a copyright registration with respect to the songs on the album, listing all four members of Absent Element as co-authors. Daughtry filed a correction with the Copyright Office regarding the correct authorship of the songs, and a registration outlining the allegedly correct ownership and authorship interests in each of the songs.

Defendants claimed in state court that Daughtry failed to account for profits and provide authorship credit as required by a partnership agreement. The court denied removal of the case to federal court. Daughtry counterclaimed, seeking a declaration under the Copyright Act that he was the sole author and original owner of four Uprooted songs and a co-owner and co-author of the remaining three. Daughtry also filed the current suit in federal court alleging that the copyright registration filed by Defendants was fraudulent.

Federal Declaratory Judgment Act. Defendants sought to either dismiss or stay Daughtry’s federal suit pending their state court action. The Federal Declaratory Judgment Act allows federal courts to “declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” The Fourth Circuit has set forth four factors that the court should consider: (1) whether the state has a strong interest in having the issues decided in its courts; (2) whether the state courts could resolve the issues more efficiently than the federal courts; (3) whether the presence of “overlapping issues of fact or law” might create unnecessary “entanglement” between the state and federal courts; and (4) whether the federal action is mere “procedural fencing,” in the sense that the action is merely the product of forum-shopping.

The court stayed this action pending the outcome of the state court trial. Ownership of the songs depended on whether they were assets of the alleged partnership agreement, a disputed issue in the state court proceeding that implicated North Carolina partnership law. Certain relief sought by Daughtry could overlap with resolution of the partnership issue, which was a state law matter in which North Carolina had a strong interest. The state court proceeding was filed first, and suits filed first have priority over a later filed suit. A stay could prevent duplication of effort and minimize the unnecessary expenditure of judicial resources, while preserving a federal forum for Daughtry’s claims. If there was no partnership agreement that governed the present ownership of the disputed songs, ownership of the songs will be determined pursuant to the Copyright Act by the federal court. The court could not say that this action represented procedural fencing on the part of Daughtry and any effect of possible procedural fencing by Daughtry was minimized by the stay.

The case is No. 1:14-cv-984.

Attorneys: David Leonard Brown (Goldberg Segalla, LLP) for Christopher Adam Daughtry. Andrew L. Rodenbough (Brooks Pierce McLendon Humphrey & Leonard, LLP) for Ryan Andrews.

Cases: Copyright NorthCarolinaNews