IP Law Daily, COPYRIGHT—S.D.N.Y.: Complaint sufficiently alleges direct infringement of musician’s ‘original beats’, (Jun 26, 2024)

By Patricia K. Ruiz, J.D.

The court found that the copyright owner had rescinded the license to use his original beats on another musician’s album.

The federal district court in New York City has granted in part and denied in part a motion to dismiss a musician’s claims of copyright infringement against a music distributor. The court found that, while the complaint sufficiently alleged direct copyright infringement, the complaint failed to sufficiently allege contributory infringement because it lacked allegations of a causal relationship between the distributor’s direct financial benefit and the copyright infringement. The court further alleged that the distributor had no knowledge of the infringement when it uploaded the allegedly infringing music onto its server and granted the distributor’s motion to dismiss (White v. DistroKid, LLC, No. 22 Civ. 2205 (S.D.N.Y. June 24, 2024)).

Original beats. Copyright owner Brian White, a professional musician, filed suit against DistroKid, LLC, Kid Distro Holdings, LLC, d/b/a Distrokid, (DistroKid, collectively) and another musician, Eunice Rivers, for violations of the Copyright Act and breach of contract. The copyright owner “writes music and beats; does live performances; mixes, produces, sound engineers recorded tracks; and writes and directs his own music videos.” The defendant musician is “known in the New Jersey area as an accomplished music and club promoter.” In November 2020, the copyright owner created a series of beats for a number of songs to present for possible licensing to two artists in the New Jersey area. He worked alone and in his own recording studio and registered a set of beats, as well as other songs, with the U.S. Copyright Office.

Licensing agreement. At some point, the two musicians discussed the possibility of the defendant musician licensing the original beats from the copyright owner, ultimately entering into an oral agreement. The agreement provided that the defendant musician could use the original beats as music for her singing, recorded and live, so long as she continued to book live performances for the copyright owner to perform at and so long as she provided the copyright owner with 50% of the proceeds of the exploitation of the original beats or any music that included the original beats. The agreement further provided that, if the defendant musician failed to continue to perform her payment and live-performance obligations, the license rights would automatically revert back to the copyright owner, and the defendant musician would no longer have the right to use the original beats. The copyright owner alleged that he has entered into similar licensing agreements with other artists.

Album. The defendant musician, without any contribution from the copyright owner, wrote lyrics and melodies or reused lyrics and melodies she previously wrote, to perform with the original beats. She created an album, which is comprised of several songs. After creating the album, the defendant musician would reach out to the copyright owner to get permission and authorization from him to share the album. This included two instances where she sought permission to share the album with a radio station and to use and/or display the album in a video. The copyright owner posted the album to DistroKid for the musician defendant.

Distribution. DistroKid is a music distributor that, for a fee, populates a musician’s music to a variety of streaming services, online music stores, and other platforms. It changes an annual fee in exchange for use of its distribution platform and offers users upcharges upon each upload of music to the digital stores. After a user creates an account and uploads music to DistroKid, DistroKid will modify the copy to conform with each digital store’s uploading requirements, upload the content onto the digital stores’ platforms, and collect royalties from the digital stores, which it distributes to the user’s DistroKid account. DistroKid retains the right to remove any content from the digital stores for reasons including failure to pay its annual fee, its receipt of takedown notice submitted to the digital stores, “or any reason in its business judgment.”

Revocation of license. After the defendant musician created the album, the two musicians performed in a show together, which included performance of music from the album. However, after the show, the defendant musician did not continue to meet her obligations under the agreement to schedule live performances for the copyright owner, despite continuing to perform songs from the album. She did not pay the copyright owner 50% of the proceeds of the live performances or from the proceeds generated by the album. In 2021, the defendant musician registered the album with the U.S. Copyright Office and did not reference the copyright owner’s registration of the original beats.

The copyright owner reiterated to the defendant musician that she no longer had his authorization under the license agreement to use his original beats and indicated that she “must cease any uses of his original beats, including any use in the album.” On the same day, the copyright owner removed the album from DistroKid. The defendant musician continued to make copies, distribute, and perform the album and uploaded the album to DistroKid herself. DistroKid then changed the format of at least one copy of the album and distributed the album to various stores. The copyright owner learned the defendant musician had uploaded the album to DistroKid and sent an email to DistroKid requesting that the album be removed from DistroKid and the digital stores.

The copyright owner brought two causes of action against DistroKid—one for direct copyright infringement and another for indirect copyright infringement. DistroKid moved to dismiss, arguing that the copyright owner failed to state a claim against it and, alternatively, that it is immune from liability under §512(c) of the DMCA.

Direct copyright infringement. As to the claim for direct copyright infringement, DistroKid argued that the original beats were a component of a “joint work” and thus both musicians had equal rights to distribute it. The Copyright Act defines a “joint work” as “a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.” The authors of a joint work are considered co-owners and are to be treated generally as tenants in common, with each co-owner having an independent right to use or license the use of the work, subject to a duty of accounting to the other co-owner for any profits. The party asserting co-authorship bears the burden of establishing that each of the putative co-authors: (1) made independently copyrightable contributions to the work; and (2) fully intended to be co-authors. The court disagreed with DistroKid’s claim that the amended complaint lacks indicia that the parties did not intend to be co-authors, as the license agreement between the two directly negates an inference of co-authorship. Further, there was no indication that the album was attributed in any way to the copyright owner, further negating an inference of an intent to be co-authors. While the court noted that these indicia do not foreclose a later finding that the album constitutes a joint work based on other evidence, it found that DistroKid’s argument that the album is a joint work must be rejected at the motion to dismiss stage.

DistroKid further argued that because the copyright owner licensed his original beats to the defendant musician to create the album, the defendant musician and, by extension, DistroKid were permitted to distribute the album and the original beats. However, the complaint alleged that compliance with the terms of the oral agreement were a condition of the license, which the parties agreed would automatically revert back to the copyright owner if the defendant musician failed to continue to perform her payment and live-performance obligations. Because the copyright owner alleged that the defendant musician did not satisfy her obligations, the amended complaint adequately alleged that the defendant musician no longer had any license in the work, the court held. Further, the complaint alleged that the copyright owner revoked or rescinded the defendant musician’s right to use the original beats because of her failure to satisfy the obligations specified in the oral agreement and that the copyright owner specifically reiterated to the defendant musician that she no longer had his authorization under the license agreement to use his original beats. The court found all of this occurred before the defendant musician uploaded the album to DistroKid and that the defendant musician did not have the right to use the original beats at the time she uploaded the album to DistroKid.

Finally, DistroKid argued that, even if it was not entitled to distribute the original beats by way of the album, it nonetheless cannot be liable for direct copyright infringement because there was no volitional conduct on its part. The court declined to consider this argument, which DistroKid raised for the first time in its reply brief, and the copyright owner never had an opportunity to respond to it. Accordingly, the court denied DistroKid’s motion to dismiss the direct copyright infringement claim.

Indirect copyright infringement. The copyright owner alleged DistroKid is liable for both vicarious and contributory copyright infringement. To state a claim for vicarious copyright infringement, a plaintiff must allege that a defendant (1) declined to exercise the right and ability to supervise or control the infringing activity; and (2) enjoys a direct financial benefit from the infringing activity. The court found that the copyright owner provided sufficient factual allegations establishing DistroKid had the right and ability to supervise or control the infringing activity. In particular, the copyright owner alleged that DistroKid had the ability to remove content from the digital stores for failure to pay the annual fee, its receipt of takedown notices submitted to the digital stores, or any reason in its business judgment. As to the second prong, the amended complaint alleged that DistroKid charges an annual fee in exchange for the use of its distribution platform. However, the court found that the complaint provided no facts showing that the users of DistroKid are “drawn” to its platform in order to engage in or profit from copyright infringement. Thus, the court held it could not infer a causal relationship between the infringing activity and any financial benefit the DistroKid reaps, nor that the monthly payments increase or decrease based on whether the user uploads infringing or non-infringing products. The court noted that, while there is no requirement that the copyright owner show that the financial benefit to DistroKid be tied directly to sales of the infringing goods, there must be allegations showing that users are attracted to DistroKid’s product because it enables infringement. Because the complaint makes no such allegations, the court granted DistroKid’s motion to dismiss the vicarious liability claim.

To state a claim for contributory infringement, a plaintiff must allege that a party with knowledge of the infringing activity induced, caused, or materially contributed to the infringing conduct of another. To constitute a material contribution, it must be alleged that the defendant (1) had actual or constructive knowledge of the infringing activity; and (2) encouraged or assisted others’ infringement or provided machinery or goods that facilitated infringement. The knowledge standard is an objective one; contributory infringement liability is imposed on persons who k now or have reason to know of the direct infringement. The court found that the complaint failed to allege DistroKid had any actual or constructive knowledge that the defendant musician uploaded infringing content and does not provide factual matter to suggested the defendants acted in concert. Thus, the court granted DistroKid’s motion to dismiss as to the contributory infringement claim.

DCMA immunity. The DCMA is an affirmative defense that can only act as a basis for dismissal at the motion to dismiss stage if the defense appears on the face of the complaint. Because the elements of the defense were not made out in the amended complaint—most obviously, there are no allegations related to DistroKid’s knowledge of the infringing nature of the content or whether it had expeditiously removed the content after it learned it infringed on the copyright. Thus, the court denied DistroKid’s motion to dismiss as to its DCMA argument.

The Case is No. 22 Civ. 2205.

Judge: Gorenstein, G.

Attorneys: Andrew Grimm (Digital Justice Foundation Inc.) for Brian K. White. Jenna L. Harris (Ritholz Levy Fields LLP) for DistroKid, LLC and Kid Distro Holdings, LLC.

Companies: DistroKid, LLC; Kid Distro Holdings, LLC

Cases: Copyright TechnologyInternet NewYorkNews GCNNews