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The matter of proper licensing: ABKCO Music v Sagan

This copyright infringement case concerns a collection of live audio and audiovisual recordings of iconic songs that were recorded while being performed live in concert and thereafter acquired by defendants William E. Sagan, Bill Graham Archives, LLC, and Norton, LLC, from the late Bill Graham and operators of other concert venues. The collection primarily consists of recordings made from the 1960s to the 2000s.

In the years following Defendants’ acquisitions, they have reproduced those recordings principally in digital format and made them available for mass consumption through digital download and streaming services offered for a fee through Defendants’ websites. Plaintiffs are a collection of six groups of music publishers who claim to own, or hold exclusive licenses in, the copyrights to approximately 200 musical compositions reflected in Defendants’ recordings. Plaintiffs claim that Defendants’ exploitation of those recordings infringes their copyrights in the Musical Works. The principal question before the Court is whether Defendants obtained valid licenses such that their exploitation of these recordings is lawful under the Copyright Act.

In August of 2013 and 2014, Plaintiff ABKCO Music, Inc., demanded that Defendants cease and desist exploiting an audiovisual recording of a 1981 Rolling Stones concert because “ABKCO has never issued synchronization licenses for the video” and without such a grant “ABKCO’s copyrights in those Compositions have been infringed and continue to be knowingly and willfully infringed.” From 2013 to 2016, Defendants also received several similar demands from songwriters and publishers of songs embodied in Defendants’ audiovisual recordings, alerting Defendants that they potentially lacked the necessary licenses to exploit those audiovisual recordings.

On May 27, 2015, Plaintiffs filed action claiming Defendants infringed their copyrights in approximately 200 Musical Works by reproducing those works in digital format and making them available for downloading and streaming from Defendants’ websites without Plaintiffs’ consent. Plaintiffs also claimed infringement based on Defendants’ manufacture of physical records containing certain of Plaintiffs’ Musical Works. All told, Plaintiffs assert that Defendants have exploited in audio or audiovisual format more than 1,175 recordings of Plaintiffs’ approximately 200 Musical Works. Of those approximately 200 works, Defendants have exploited audiovisual recordings of at least 146 of them.

In disputing Plaintiffs’ copyright infringement claim, Defendants contend that they have held valid mechanical licenses – either in the form of compulsory licenses acquired by their licensing vendors pursuant to Section 115’s notice requirements, or equivalent licenses through HFA – authorizing them to exploit the Musical Works. Plaintiffs, on the other hand, contend that Defendants do not have valid mechanical licenses. First, they assert that audiovisual works – video recordings of the works being performed live in concert – are not eligible for Section 115 compulsory mechanical licenses.

Second, Plaintiffs argue that none of Defendants’ live concert recordings are eligible for mechanical licenses because (i) they were not “lawfully fixed” in the first instance, (ii) Defendants cannot show that they obtained the necessary authorization from the performers reflected in those recordings, and (iii) Defendants cannot show that the recordings made prior to February 15, 1972 were fixed pursuant to licenses from the owners of copyrights in the underlying Musical Works, i.e., Plaintiffs or their predecessors. Third, Plaintiffs contend that Defendants issued untimely and fraudulent NOIs that provide an independent basis for finding their compulsory mechanical licenses invalid. Fourth, and finally, Plaintiffs assert that Defendants’ HFA licenses cannot shield them from the infringement alleged here.

In support of their claim that their live concert recordings were lawfully fixed, Defendants rely on the three Joint Exploitation Agreements entered into with third-party record labels years after they began exploiting their collection of live recordings and a sales agreement conveying to Defendants a collection of live recordings covering six of the Musical Works. According to Defendants, those agreements purport to show that “performers duly consented to the first fixation of their live performances.” Plaintiffs contend that these agreements are insufficient because they are not proof of consent from the performers themselves. The Court agreed.

The Joint Exploitation Agreements, which were entered into in 2009, in most cases decades after the recordings were fixed, are insufficient to demonstrate that the initial fixation of those recordings was lawful because, contrary to Defendants’ characterization, the agreements do not purport to “acknowledge that the recordings were lawfully made.”  Rather, the Sony and Warner agreements contain representations and warranties from the third-party record labels that purport to have the consent of artists that authorize the record labels to grant Defendants the right to exploit the sound recordings in which those artists ‘ performances are embodied. Neither of these agreements provides any written consent from the artists themselves or purport to say anything about whether the artists consented to the initial fixation of these recordings.

Defendants’ HFA licenses are invalid as a matter of law: they are substantively invalid because there is no indication that the recordings were lawfully fixed, or that the pre-1972 recordings were fixed pursuant to express or compulsory licenses from Plaintiffs or their predecessors. And just as a Section 115 mechanical license does not apply to audiovisual works, the HFA licenses do not either. Moreover, because Defendants concede they began exploiting certain recordings in 2006, but only obtained HFA licenses beginning in 2007, recordings exploited prior to obtaining an HFA license are independently barred by Section 115’s filing requirements, and any reproduction or distribution made pursuant to those untimely licenses, constitutes infringement.

Summary judgment was granted to Plaintiffs on their claim of willful infringement as to all audiovisual recordings, pre-1972 audio recordings, and all recordings covered by the UMG agreement, and denied in all other respects.