Predictably, an Oral License to Use Beat Track in Song Results in Copyright Infringement Case

Plaintiff Brian White is a professional musician who writes and records beat tracks that he sometimes licenses to other artists. (We Got the Beat.) Defendant Eunice Rivers is a fellow musician who lives, and has achieved some renown, in the home state of Sinatra, Springsteen, Whitney Houston, Bon Jovi and Dionne Warwick (a.k.a. New Jersey). According to the allegations in the complaint, the two entered into an oral agreement in which White authorized Rivers to use beats he created (the “Original Beats”) on two conditions: (1) Rivers was required to “continue[] to book live performances for Mr. White to perform at” and (2) Rivers was required to pay White “50% of the proceeds of the exploitation of the Original Beats or any music that included the Original Beats.” White alleges that these terms are similar to licenses he has granted to other artists.

Rivers recorded an album called Here I Am, which included songs that featured the Original Beats. Rivers and White performed together live at least once, and White, on behalf of Rivers, posted the album on the music distribution platform DistroKid to facilitate making it available through streaming services like Spotify. Things between the two artists soured when Rivers stopped inviting White to perform with her and didn't pay him a share of revenue derived from songs featuring the Original Beats. (Beat's So Lonely.) Eventually, White informed Rivers that she was in breach of the oral license and “no longer had his authorization under the license Agreement to use his Original Beats”; for good measure, he exercised self-help by removing Here I Am from DistroKid. (Beat It.) Apparently undaunted, Rivers continued to perform her songs, and, after securing a copyright registration for the album, reposted the album to DistroKid so it could be streamed once again by her fans. (The Beat Goes On.) White sued Rivers for (among other things) direct copyright infringement and DistroKid for direct and indirect infringement. 

DistroKid - from its POV, an innocent bystander - moved to dismiss the claims asserted against it under Rule 12(b)(6). Magistrate Judge Gabriel W. Gorenstein (S.D.N.Y.) denied the motion with respect to the direct infringement claims but granted it with respect to the indirect infringement claims. In this post, I will cover only the direct infringement claims.

White alleged that DistroKid was liable for direct infringement because, without his permission, DistroKid had copied, modified and distributed the Original Beats, as part of the album, through its platform. In response, DistroKid argued that it had not infringed because it had received authorization from Rivers to take these actions, which was sufficient either because Rivers was a co-owner of the copyright in the songs or because she had a valid license from White to incorporate the Original Beats in the album.

Were the Songs Joint Works?

DistroKid contended that the songs on the album were joint works created by fusing the Original Beats (written by White) with other elements (written by Rivers) and that, as a result, White and Rivers were co-owners of the copyright and Rivers was fully empowered to grant permission to DistroKid to distribute the songs. See 17 U.S.C. § 201(a) (authors of a joint work are co-owners of copyright in the work).

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.” (17 U.S.C. § 101.) To prove that White and Rivers were co-authors, DistroKid was required to show that the duo (1) made independently copyrightable contributions to the work, and (2) fully intended to be co-authors. (See Childress v. Taylor.) DistroKid argued that White and Rivers had "intended for their respective parts to be symbiotic components of the final musical works embodied on the Album." The court, however, disagreed, finding that White had alleged facts in the complaint that supported his position that the parties never had such an intention. White's allegation that he had granted a license to Rivers to use the Original Beats subject to significant restrictions “directly negates an inference of co-authorship.” Moreover, Rivers' failure to provide any authorship credit to White on the album, as well as White's lack of “decision-making authority” with respect to the album, supported White's position that the parties had not intended to be joint authors. Accordingly, the court could not conclude, as a matter of law at this stage of the proceedings, that the songs on the album were joint works.

Did Rivers Have a Valid License to Continue to Use the Original Beats?

DistroKid next argued that distribution of the album with the Original Beats on its platform was covered by the oral license that White had granted to Rivers, and that the oral license was irrevocable because it was supported by consideration. DistroKid further posited that, even if Rivers had breached that oral license, that would entitle White to pursue remedies against Rivers for breach of contract only; it would not entitle White to void the license or to sue for copyright infringement. 

White countered by arguing that (1) Rivers had no right to use the Original Beats (and, therefore, could not sublicense rights to DistroKid) because Rivers had failed to fulfill material conditions of the license (specifically, the duty to secure gigs for him and pay royalties), and (2) even if licensing rights had vested in Rivers, those rights either reverted automatically once Rivers breached the oral agreement and/or White had affirmatively revoked those rights before Rivers reposted the album on DistroKid's platform.

In the Second Circuit, whether a licensor can sue a licensee for copyright infringement or breach of contract turns on whether the licensee's conduct constitutes a breach of a “covenant" or the failure to satisfy a “condition” to the license. As explained by the Second Circuit in Graham v. James"

"If the licensee's improper conduct constitutes a breach of a covenant undertaken by the licensee and if such covenant constitutes an enforceable contractual obligation, then the licensor will have a cause of action for breach of contract, not copyright infringement. However, if the nature of a licensee's violation consists of a failure to satisfy a condition to the license, it follows that the rights dependent upon satisfaction of such condition have not been effectively licensed, and therefore, any use by the licensee is without authority from the licensor and may therefore, constitute an infringement of copyright.” (Cleaned up; citations to Nimmer's treatise omitted.) 

Accepting the allegations in the complaint as true, the court concluded that the terms of the oral agreement that Rivers allegedly breached were “unmistakabl[y]" conditions of the license because “if Ms. Rivers failed to continue to perform her payment and live-performance obligations, the license rights would automatically revert back to Mr. White, and Ms. Rivers would no longer have the right to use the Original Beats.” Moreover, even if Rivers’ obligations to hire White for gigs and pay him royalties could be characterized as covenants, White would have been entitled to rescind the license due to Rivers' material breach of those covenants, and White had alleged in the complaint that he had done so before Rivers had reposted the song on DistroKid's platform. Finally, the Magistrate Judge rejected DistroKid's argument that the oral license was irrevocable because its terms expressly provided that the licensed rights would automatically revert back to White if Rivers failed to abide by its conditions. (See this post.) As a result, White had sufficiently alleged facts to support that Rivers did not have the right to upload the album to the DistroKid platform and that, therefore, both Rivers and DistroKid were liable for copyright infringement. 

The court didn't consider DistroKid's argument that it lacked sufficient volitional conduct to be liable for copyright infringement because the issue had not been properly briefed (see this post) and refused to dismiss based on the DMCA safe harbor because the face of the complaint did not allege sufficient facts to determine the applicability of that affirmative defense (see 17 U.S.C. § 512(c)).

White v. DistroKid, No. 22 Civ. 2205 (VEC) (GWG), 2024 WL 3195471(S.D.N.Y. June 24, 2024)