Broadcast Music v. Rindge Lane Corp. CV-93-460-JD 03/27/95 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Broadcast Music, Inc., et al.

v. Civil No. 93-460-JD

The Rindge Lane Corp., d/b/a The Press Room and Jay Smith

O R D E R

The plaintiffs. Broadcast Music, Inc. ("BMI"); Jerome

Richardson, d/b/a Immendise Music Co.; Frederick S. Bienstock;

Hammerstein Music & Theatre Co., Inc.; Dorothy F. Rodgers and

Murray Cohen, as trustees under Dorothy F. Rodgers 1983 Trust

Agreement, d/b/a Edward B. Marks Music Co.; Corcovado Music

Corp.; Storm King Music, Inc.; Pentagon Music Co.; and Siguomb

Publishing Corp.; bring this copyright infringement action

against the defendants. The Rindge Lane Corp., d/b/a The Press

Room, ("Press Room"), and its president. Jay Smith ("Smith"),

pursuant to

et seq. (West 1977 & Supp. 1994)

("Copyright Act").1

1The suit alleges infringement of six musical compositions owned by the plaintiffs. The musical compositions and their authors are: (1) "Groove Merchant" by Jerome Richardson (plaintiff Jerome Richardson d/b/a Immendise Music Co.); (2) "Go Bless' The Child" by Billie Holiday and Arthur Herzog, Jr. (plaintiff Dorothy F. Rodgers and Murray Cohen, trustees under Dorothy F. Rodgers 1983 Trust Agreement, d/b/a Edward B. Marks Music Co.); (3) "Triste" by Antonio C. Jobim a/k/a Antonio Carlo Jobim (plaintiff Corcovado Music Corp.); (4) "Deep River Blues" The plaintiffs seek to enjoin the defendants from future

infringement and also request damages, costs, and attorney fees.

The court's jurisdiction is based on

, 1338

(West 1993). Before the court is the plaintiffs' motion for

summary judgment (document no. 10).

Background

Plaintiff BMI is a nonprofit organization which acquires and

licenses the nonexclusive public performance rights of certain

copyrighted musical compositions ("BMI Music"). Plaintiff's

Memorandum of Law in Support of Summary Judgment ("Memorandum in

Support of Summary Judgment") at 2. The other plaintiffs own the

copyright to the various musical compositions which are the

subject of this lawsuit.

Under an agreement with these

copyright owners, BMI licenses the performance rights to

establishments including concert halls, restaurants, nightclubs

and hotels.

The defendant Smith owns and operates the Press Room

restaurant and nightclub located in Portsmouth, New Hampshire.

The Press Room sponsors live performances of music. Defendants'

by A.D. Watson (plaintiff Storm King Music, Inc.); (5) "Both Sides Now" by Joni Mitchell (plaintiff Siguomb Publishing Corp.); and (6) "In Your Eyes" by Peter Gabriel (plaintiff Pentagon Music Co. ) .

2 Memorandum of Law in Opposition to Motion for Summary Judgment

("Memorandum in Opposition to Summary Judgment") at 1.

On June 27, 1979, BMI granted the defendants a nonexclusive

license to play various musical compositions at the Press Room.

. The license agreement called for a one-year term

with automatic renewal for subseguent one-year terms unless

either party cancelled upon thirty days' notice prior to the

close of the current term.

at Exhibit A, 5 3. Pursuant to

the agreement, the defendants made license fee payments to BMI

until 1984.

, Exhibit B. The defendants consistently

paid late, but BMI accepted the license fees nonetheless. The

defendants did not make any payments during 1985 and 1986.

at Exhibit B.

According to a BMI interoffice memo dated January 27, 1987,

BMI and the defendants had reached a new, modified license

agreement. Under the new agreement, the defendants' account

would be current through December 31, 198 6, upon payment of a

$620 license fee. The defendant paid the fee on April 22, 1987.

, Exhibit C. On April 30, 1987, the parties signed a new

agreement providing for payment for the license on a calendar

year basis.

The new agreement set the initial license term for eight

months with automatic renewal for subseguent one-year terms

3 unless either party cancelled with thirty days' notice prior to

the close of a term.

at Exhibit A, 5 2 (a). The defendants

made annual license fee payments of $300 from 1988 to 1991.

.

In 1989 BMI revised its license agreements and increased

annual fees. In November 1989, BMI mailed a letter to the

defendants explaining the change in terms and indicating that the

1987 agreement would expire and would need to be replaced by a

new license agreement. Stevens Affidavit, Exhibit A. The letter

and all subseguent correspondance was addressed to "Jay Smith,

President," "Jay Smith" or "The Rindge Lane Corp." at "The Press

Room, 77 Daniel St., Portsmouth, NH 03801." See Declaration of

Lawrence Stevens ("Stevens Affidavit") at 1-2, Exhibits A-L. The

defendants have neither admitted nor denied receiving the

November 1989 notice. However, in January 1990, BMI accepted the

defendants' payment of $300. Memorandum in Opposition to Summary

Judgment at 3.

In February 1990, March 1990, and November 1990, BMI sent

additional notices addressed to the defendants explaining the

need to execute a new license agreement. Stevens Affidavit. In

March 1991, the defendants once again made payment of a license

fee, this time for $360, which BMI accepted. Memorandum in

Opposition to Summary Judgment at 3. The defendants did not

4 submit another payment to BMI until after the commencement of

this lawsuit.

On September 20, 1991, BMI sent a letter to the defendants

by regular mail notifiying them that the prior license agreement

had expired and that they needed to sign the new agreement or

face penalties for copyright infringement. Stevens Affidavit,

Exhibit E. On September 30, 1991, BMI sent another letter

addressed to the defendants, this time by certified mail, stating

that the defendants' account was delinguent and, as a result, the

1987 license agreement would be cancelled on October 31, 1991.

at Exhibit J. The letter was stamped "return to sender" and

sent back to BMI. Memorandum in Opposition to Summary Judgment

at 4; Stevens Affidavit, Exhibit J. BMI finally cancelled the

1987 license agreement on October 31, 1991. Memorandum in

Opposition to Summary Judgment, Exhibit B.

On February 25, 1992, BMI sent the defendants by certified

mail a formal notice to cease and desist performance of BMI

music. Stevens Affidavit, Exhibit K. This letter was also

stamped "return to sender" and sent back to BMI. Memorandum in

Opposition to Summary Judgment at 4; Stevens Affidavit, Exhibit

K. On March 2, 1992, September 14, 1992, and October 16, 1992,

BMI sent the defendants through regular mail three additional

letters regarding the notice of cancellation. Stevens Affidavit,

5 Exhibits F, G, H. Smith maintains that he does not recall

receiving the letters, but does not claim that they were returned

to BMI like the prior notice sent by certified mail. See

Memorandum in Opposition to Summary Judgment at 11. On October

2, 1992, BMI sent by certified mail, addressed to the defendants,

a second formal notice to cease and desist and, as before, the

letter was stamped "return to sender" and sent back to BMI.

Stevens Affidavit, Exhibit L.

On December 30, 1992, BMI notified the defendants by

overnight letter, delivered by private courier, that the Press

Room had unlawfully performed BMI music.

at Exhibit I. The

letter indicated that BMI would seek legal redress if the

defendants did not sign the new license agreement within five

days.

No new agreement was signed after this notice.

A BMI representative, Mark Cornaro, personally heard the

performance of six BMI compositions played during visits to the

Press Room on March 7, 1993, April 15, 1993, and June 3, 1993.

Declaration of Mark Cornaro ("Cornaro Affidavit").

BMI filed this lawsuit on behalf of itself and the other

plaintiffs on August 23, 1993. The defendants answered the

complaint on October 29, 1993. On November 30, 1993, the

defendants attempted to pay license fees owed for 1991 and 1992.

6 Memorandum in Opposition to Summary Judgment at 3. BMI has

refused to accept these payments.

Discussion

In the motion for summary judgment, the plaintiffs assert

that there is no genuine issue of material fact as to the

defendants' infringement of their copyrights and that they are

entitled to judgment as a matter of law. Memorandum in Support

of Summary Judgment at 4-7. The plaintiffs argue that the

defendants were not authorized to perform BMI music on the dates

of alleged infringement, March 7, 1993, April 15, 1993, and June

3, 1993.

.

The defendants object to the motion on the grounds that they

were entitled to perform the music under an implied license which

existed between the parties. Memorandum in Opposition to Summary

Judgment at 1.

Summary judgment is appropriate when the "pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law." Fed. R. Civ. P.

56(c). "The burden is on the moving party to establish the lack

of a genuine, material factual issue, and the court must view the

7 record in the light most favorable to the nonmovant, according

the nonmovant all beneficial inferences discernable from the

evidence." Snow v. Harnischfeger Corp.,

(1st

Cir. 1993) (citations omitted). Once the moving party has met

its burden, the nonmoving party "must set forth specific facts

showing that there is a genuine issue for trial[,]" Anderson v.

Liberty Lobby, Inc.,

(1986) (citing Fed. R.

Civ. P. 56 (e)), or suffer the "swing of the summary judgment

scythe." Jardines Bacata, Ltd. v. Diaz-Marquez,

(1st Cir. 1989). "In this context, 'genuine' means that the

evidence about the fact is such that a reasonable jury could

resolve the point in favor of the nonmoving party, Anderson,

; 'material' means that the fact is one 'that might

affect the outcome of the suit under the governing law.1" United

States v. One Parcel of Real Property,

(1st

Cir. 1992) (guoting Anderson,

) .

The Copyright Act,

et seq. (West 1977 &

Supp. 1994), protects

original works of authorship fixed in any tangible medium of expression . . . from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

(a) (Supp. 1994). Works of authorship include

"musical works, including any accompanying words" and "sound

recordings."

at § 102(a)(2), (7). Under the Copyright Act, copyright owners possess the

exclusive rights to authorize a public performance of their

musical compositions and the violation of this right constitutes

infringement. Id. at §§ 106, 501(a). The legal or beneficial

owners of a copyright may protect their interest by bringing a

private action for infringement occurring while they are the

owner of the copyright. Id. at § 501(b) .2 As a remedy,

copyright owners may seek an injunction against future

infringement, statutory damages, costs, and attorney fees. Id.

at §§ 502, 504 (c), 505.

To prevail in a copyright infringement action, the

plaintiffs must establish five elements:

(1) the originality and authorship of the compositions involved; (2) compliance with the formalities of the Copyright Act ; (3) that plaintiffs are the proprietors of the copyrights of the compositions involved; (4) that the compositions were performed publicly for profit; and (5) that the defendants had not received proper authorization for performance of the compositions.

Merrill v. County Stores, Inc.,

(D.N.H.

1987) (citing Sailor Music v. Mai Kai of Concord, Inc.,

(D.N.H. 1986)); see Jobete Music Co. v. Massey,

2Generally, a work must be registered with the Copyright Office before an infringement action may be brought. See 17 U.S.C.A § 411; 2 Melville Nimmer & David Nimmer, Nimmer on Copyright § 7.16[B] (1994).

(M.D.N.C. 1992) (citing Hulex Music v.

Santv,

(D.N.H. 1988)); Chi-Bov Music v.

Towne Tavern, Inc.,

(N.D. Ala. 1991).

I. Originality and Authorship and Compliance with Copyright

Formalities

The plaintiffs may satisfy the elements of originality and

authorship and compliance with copyright formalities by producing

a certificate of copyright registration, which is prima facie

evidence of the ownership and validity of the copyright.

In any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.

(c) (West 1977); Sandwiches, Inc. v. Wendy's

Int'1, Inc.,

(E.D. Wis. 1987); see Chi-

Bov Music,

; Sailor Music,

. Once the plaintiffs establish a presumption of validity,

the burden shifts to the defendants to rebut the presumption of

proper copyright registration. Hasbro Bradley, Inc. v. Sparkle

Toys, Inc.,

(2d Cir. 1985) (citations omitted);

Knickerbocker Toy Co. v. Winterbrook Corp.,

(D.N.H. 1982); 3 Nimmer at § 12.11[B]. The defendants may

rebut the presumption by showing, for example, that the

10 plaintiffs had not registered their musical compositions within

five years after first publication or that the plaintiffs had not

properly deposited their compositions with the Copyright Office.

3 Nimmer at § 12.11[B]; see

(c).3

In this case the plaintiffs have submitted photocopies of

the certificates of copyright registration for the musical

compositions at issue. See Declaration of Judith Saffer ("Saffer

Affidavit")a Exhibit A. The defendants have not responded with

evidence, such as untimely registration or improper deposit with

the Copyright Office, to rebut the presumption of copyright

ownership and validity, and compliance with the formalities of

the Copyright Act. The court finds there are no genuine issues

of material fact regarding originality and authorship or

copyright compliance and, therefore, the first two elements of

copyright infringement have been established as a matter of law.

II. Proprietorship of Musical Compositions

In cases where the plaintiffs are also the authors of their

musical compositions the court may accept the copyright

registration statement as prima facie evidence of proprietorship.

3Nimmer states that "[t]he case law has yet to settle upon a consistent formulation of what evidence satisfies the defendant's burden." 3 Nimmer at § 12.11[B][2]. Since the defendant has not come forward with evidence to rebut this element, the court need not address the issue.

11 Broadcast Music, Inc. v. Moor-Law, Inc.,

(D. Del. 1980); see Chi-Bov Music,

; Sailor

Mu sic,

; 3 Nimmer at § 12.11[C]. However,

where the plaintiffs are assignees of previously registered

copyrights, the court reguires additional evidence beyond the

registration statements to find that the plaintiffs are the

proprietors for purposes of satisfying the third element. Moor-

Law,

; 3 Nimmer at § 12.11[C].

The plaintiffs, with the exception of BMI, have submitted

the Saffer Affidavit and copies of their copyright registrations

as evidence that they are the proprietors of their respective

musical compositions.

Each of the musical compositions listed on line 2 of Schedule I of Plaintiffs' Complaint was registered with the Copyright Office on the date listed in line 5. A registration certificate bearing the number listed on line 6 was issued by the Copyright Office to the Plaintiff listed on line 4 or predecessor in interest.

Saffer Affidavit at 2. The defendants have not attempted to

rebut the affidavit. The court finds that, with the exception of

BMI, the plaintiffs are the proprietors of their respective

musical compositions.

BMI, as assignee of previously registered copyrights, also

relies on the Saffer Affidavit as evidence that it is a

proprietor of the compositions.

12 On the date listed on line 8 of Schedule I, BMI had been granted, by the other Plaintiffs, the right to publicly perform these compositions and to issue public performance license agreements to music users.

Id.4 Again, the defendants have not challenged the affidavit nor

argued that BMI is not a proprietor of the musical compositions.

Thus, the court finds that there is no genuine dispute of

material fact relative to the guestion of proprietorship and,

therefore, the plaintiffs have established the third element of

copyright infringement as a matter of law.

III. Public Performance

The plaintiffs may establish the fourth element of copyright

infringement, public performance of the musical compositions for

profit, through the submission of sworn affidavits of persons who

witnessed the alleged acts of infringement. Chi-Bov Music,

; Sailor Mu sic,

. Furthermore,

a "performance at a restaurant to which the public is admitted

and where food and beverages are sold is deemed to be given

'publicly for profit.'" Broadcast Music, Inc. v. Allis, 667 F.

4The court notes that the reference to Schedule I by Saffer in her affidavit does not list a line 8. However, the defendants have not challenged the veracity of the affidavit and, by virtue of past license agreements with BMI, have tacitly acknowledged that BMI is a lawful proprietor of the musical compositions.

13 Supp. 356, 358 (S.D. Miss. 1986) (quotations and citations

omitted) .

The plaintiffs assert they sent a BMI representative, Mark

Cornaro, to the Press Room on March 7, 1993, April 15, 1993, and

June 3, 1993, to determine if the defendants were performing BMI

music. Stevens Affidavit at 2-3. According to his affidavit,

Cornaro is familiar with the BMI repertoire and, based on this

familiarity, recognized the performance of BMI music during his

visits. Cornaro Affidavit at 1.

The performances at issue are considered to have been "for

profit" in that the defendants acknowledge the Press Room serves

food and liquor and, at times, collects a cover charge from

patrons. See Memorandum in Opposition to Summary Judgment,

Exhibit E. The defendants do not dispute that Cornaro attended

the Press Room on the dates of the alleged infringement.

Likewise, the defendants have not submitted evidence that would

call into question the veracity of Cornaro's affidavit. The

court finds that there is no genuine dispute of material fact

relative to the public performance of BMI music for profit and,

therefore, the plaintiffs have satisfied the fourth element of

copyright infringement as a matter of law.

14 IV. Unauthorized Performance

To satisfy the fifth element of copyright infringement, a

plaintiff must demonstrate that the defendant lacked authority to

perform publicly the musical compositions at issue on the date of

the alleged infringement. Sailor Mu sic,

.

Authorization to perform publicly a musical composition may be

granted contractually through a license agreement. See Chi-Bov

Mu sic,

(ASCAP licensed public performance of

copyrighted music); Broadcast Music, Inc. v. Pine Belt Inv.

Developers, Inc.,

(S.D. Miss. 1987) ("BMI

licenses the performance of such copyrighted musical compositions

. . . primarily by means of a blanket license agreement"); Sailor

Mu sic,

(defendant sought license agreement

to perform live music at restaurant).

In support of their motion, the plaintiffs allege that the

public performance at the Press Room was not authorized because

they had cancelled the license agreement and had placed the

defendants on written notice of the cancellation pursuant to the

procedure outlined in the 1987 agreement. Memorandum in Support

of Summary Judgment at 6. They argue that the BMI letters are

presumed to have been received by the defendants. Plaintiffs'

Memorandum of Law in Reply to Opposition to Summary Judgment

("Plaintiffs' Reply Memorandum") at 5. The plaintiffs further

15 argue that there was never an implied license under which the

defendant was entitled to perform BMI music. Memorandum in

Support of Summary Judgment at 6.

The defendants respond that summary judgment is

inappropriate because there is a genuine dispute as to whether

they were authorized to perform the compositions. Memorandum in

Opposition to Summary Judgment at 7-11. They argue that they

were never placed on actual notice of the cancellation of the

agreement and that the mere dispatch of the renewal and

cancellation letters by BMI does not give rise to a presumption

of receipt of those letters. Id. at 11-12. Instead, the

defendants claim that they were entitled to perform the BMI-

licensed music under a valid, implied contract. Id. at 1.

A. Presumption of Receipt of Letters

The plaintiffs argue that the defendants are presumed to

have received any letters BMI sent through regular mail to the

Press Room's business address. Memorandum in Support of Summary

Judgment at 6; Plaintiffs' Reply Memorandum at 5. By contrast,

defendant Smith denies personally receiving any mailed notices

sent by BMI relative to the cancellation of the 1987 license

agreement. Memorandum in Opposition to Summary Judgement at 11.

16 Neither party has cited authority in support of their respective

positions.

The court applies federal evidentiary principles where

federal law, such as the Copyright Act, provides the rule of

decision. See Fed. R. Evid. 302. " [M]ailing gives rise to [a]

presumption that [a] document mailed 'reached its destination at

the regular time and was received by the [addressee]. U.S.

Fire Ins. Co. v. Productions Padosa, Inc.,

, 952 n.2

(1st Cir. 1987) (citing Rosenthal v. Walker,

(1884)). "Proof that a letter properly directed was placed in a

U.S. post office mail receptacle creates a presumption that it

reached its destination in the usual time and was actually

received by the person to whom it was addressed." Beck v.

Somerset Technologies, Inc.,

(5th Cir. 1989)

(citing Hagner v. United States,

(1932)); see Jones

v. Citibank, Fed. Sav. Bank,

(N.D. 111. 1994).

However, the presumption is rebuttable and once the plaintiffs

have offered evidence of mailing the documents in guestion the

burden shifts to the defendants to produce evidence of non­

delivery. See Beck,

(testimony that employee did

not "recall" or "remember" receiving letter is insufficient to

rebut presumption of receipt).

17 Although the evidentiary presumption of receipt is governed

by federal law, the court relies on the common law of agency and

principal to determine who is legally held to have received

notice on behalf of an employer. Avmes v. Bonelli,

(2d Cir. 1992) (citing Community for Creative Non-Violence

v. Reid,

(1989)). In New Hampshire, mail

received by an employee has the same legal effect as that

received directly by the employer under the common law rule that

"notice of facts to an agent is constructive notice thereof to

the principal himself, where it arises from or is at the time

connected with, the subject-matter of his agency." Citizens

N a t '1 Bank v. Hermsdorf,

,

(1951) (guotations omitted). Likewise, "[s]ince a corporation

can act only through its officers, agents and employees, it is

necessarily chargeable with the knowledge of its officers and

agents acting within the scope of their authority." Sutton Mut.

Ins. Co. v. Notre Dame Arena,

,

(1968), (citing Sawyer v. Mid-Continent Petroleum Corp., 236

F .2d 518, 520 (10th Cir. 1956)).

The plaintiffs allege they properly notified (i.e., in

writing) the defendants in accordance with the cancellation

procedure outlined in the 1987 agreement. Affidavits filed in

support of their motion indicate that BMI sent eight letters by

18 regular mail regarding either renewal or cancellation of the

licensing agreement. Stevens Affidavit at 2. Furthermore, BMI

also dispatched cancellation notices by certified mail. Id. at

1-2. Each mailing was properly addressed to "Jay Smith,

President," "Jay Smith" or "The Rindge Lane Corp." at "The Press

Room, 77 Daniel St., Portsmouth, NH 03801." See id. at 1,

Exhibits A-J; Memorandum in Opposition to Summary Judgment at 1,

Exhibit E. This evidence satisfies the presumption of receipt,

at least with respect to notices sent by regular mail.5

The defendants attempt to rebut the presumption by arguing

that the certified letters could not have been received because

they were marked "return to sender" and sent back to BMI.

Memorandum in Opposition to Summary Judgment at 4; Saffer

Affidavit, Exhibit B. The defendants have also submitted an

affidavit in which Smith testified that he did not "recall"

receiving any notice of cancellation. Smith Affidavit at 5 13.

5In his affidavit, Stevens testifies that he "wrote to" and "sent" the letters by both regular and certified mail to the Press Room at "77 Daniel Street, Portsmouth, New Hampshire 03801." Stevens Affidavit at 1-2. Stevens does not explicitly state that the letters were properly deposited in a "U.S. post office mail receptacle" or otherwise properly submitted to the postal service. See id. However, the defendants do not challenge the adeguacy of the dispatch of letters, but rather focus on the inadeguacy of the Press Room's mail handling procedures. The court finds that there is no genuine dispute that BMI satisfied the mailing reguirement for the purpose of invoking the evidentiary presumption.

19 Smith further testified that mail sent to the Press Room is often

not received by him in a timely manner, if at all, and,

therefore, he has instructed the staff not to sign for or accept

any certified mail. Id. at 55 14-15.

The defendants' argument is unavailing as the evidence is

insufficient to rebut the presumption of receipt. Although the

refusal of certified mail may show that the defendants did not

receive those letters, it does not rebut the presumption that

they received the letters dispatched by regular first-class mail,

namely the six other renewal and cancellation notices and the two

cease and desist notices. Moreover, although the defendants'

evidence indicates that Smith personally may not receive mail in

a timely manner, there is no evidence that the Press Room,

through its employees, does not receive it as delivered.6

The defendants cannot reasonably expect to overcome the

presumption of receipt by claiming that irresponsible employees,

predominantly evening hours of operation and company policy have

effectively shielded management from ten or more written

communications from BMI. In any event, even if Smith himself

does not "recall" receipt of notices, he nonetheless is held to

6The defendants maintain that employees are instructed not to accept certified mail. However, there is no evidence in the record to suggest that there is a similar policy with respect to regular mail.

20 constructive receipt and knowledge of materials received by his

employees through operation of common law principles of agency

and principal. Given the absence of adeguate evidence to rebut

the presumption of the receipt of regular mail, the court finds

that the defendants were properly placed on notice of BMI's

cancellation of the agreement.

B. The Implied Contract

The court next considers the argument that the course of

conduct between the parties created an implied contract which

authorized the performance of BMI music. Memorandum in

Opposition to Summary Judgment at 7. Specifically, the

defendants argue that BMI's past willingness to accept late

payment of fees gave rise to an implied license. Id. at 8. In

their motion, the plaintiffs assert that they only accepted late

payments to credit the defendants' delinguent account under the

old agreement. Plaintiffs' Reply Memorandum at 2-3.

A nonexclusive license to perform a copyrighted work may be

granted orally or may be implied from the conduct of the parties.

MacLean Assoc., Inc. v. Wm. M. Mercer-Meidinqer-Hansen, Inc.,

(3d Cir. 1991); 3 Nimmer at § 10.02[B][5].

However, a nonexclusive license is revocable absent considera-

21 tion. Avtec Svs., Inc. v. Peiffer,

, 574 n.12 (4th

Cir. 1994); 3 Nimmer at § 10.02[B][5].

The interpretation of a contract, either express or implied,

is governed by common law. See, e.g., Dolch v. United California

Bank,

(9th Cir. 1983). Under New Hampshire

law, an implied contract is treated as an implied-in-fact

contract. Morgenroth & Assoc, v. Town of Tilton,

,

(1981), appeal after remand,

,

(1985). An implied-in-fact contract is a true

contract that is not expressed in words but, rather, is inferred

from the conduct of the parties.

121 N.H at 514;

; see Goodwin R.R. Inc. v. State,

,

(1986). In addition, the terms of a written

contract may be modified by an implied mutual agreement between

the parties. Guri v. Guri,

,

(1982). Therefore, part of a contract may be modified by the

conduct of the parties, while the remaining terms are not revised

and stay in force as originally written. See Morgenroth &

Assocs.,

,

.

The defendants assert that the written agreement with BMI

has been modified by an implied agreement permitting delinguent

payment without repercussion. Memorandum in Opposition to

Summary Judgment at 10. In essence, the defendants argue that at

22 the time of the alleged infringement they were protected by a

new, implied-in-fact agreement that would not expire regardless

of late payment. See

In support of this view of the

contract, the defendants point to two occasions following the

1989 cancellation notice where they were permitted to pay late

without an apparent lapse in the license. Id. at 8, Exhibit B.

The defendants' argument is that the payments accepted after the

1989 cancellation notice not only changed the provisions related

to timeliness of payment, but also superseded the written

provisions regarding BMI's ability to cancel. See Smith

Affidavit at 55 9-11. Finally, the defendants have submitted

evidence of an attempted payment on November 30, 1993, which BMI

refused. Id. at 5 17.

The plaintiffs have submitted evidence showing that the

initial, November 29, 1989, renewal and cancellation notice was a

prospective cancellation in that it informed the defendants that

the 1987 agreement would be cancelled in the near future and

would need to be replaced by a new agreement. Stevens Affidavit,

Exhibit A; Plaintiffs' Reply Memorandum at 2. The plaintiffs

have also submitted evidence that they accepted the late payments

to credit the defendants' delinguent account and did not accept

any payments after March 21, 1991, including the late payment

23 attempted after the commencement of this lawsuit. Plaintiffs'

Reply Memorandum at 3.

In his affidavit Smith testifies that the late payments

created an entirely new contract rather than merely changing the

payment terms under the 1987 written agreement. Smith Affidavit

at 5 9. The court finds that the defendants' evidence reveals a

dispute of fact relative to whether the conduct of the parties

revised the payment terms from those specified in the 1987

written contract. However, the defendants have not submitted

evidence to suggest that the cancellation terms of the 1987

agreement were ever revised by an implied mutual agreement. The

late payments by Smith may have modified the timeliness of

payment terms, however, the remainder of the terms, including the

cancellation terms, remained in force. Smith's bald statement

that the conduct of the parties created a new implied-in-fact

contract is not evidence of the creation of a new agreement. See

Velazquez v. Chardon,

(1st Cir. 1984) ("The

court is not obliged to find that a genuine issue of material

fact exists where the only evidence of such an issue is a series

of conclusory statements unsupported by specific factual

allegations") .

There is no genuine dispute that at all times the 1987

agreement called for one-year renewals unless cancelled by either

24 party within thirty-days of the end of a period. The court has

already determined that the defendants were properly placed on

notice of cancellation under this provision. Thus, on the dates

of the alleged infringement the defendants lacked authority to

perform the BMI music compositions at issue. Therefore, the

final element of copyright infringement is satisfied as a matter

of law.

Copyright Infringement Relief

The plaintiffs have reguested injunctive relief, statutory

damages, post-judgment interest and reasonable attorney's fees

and costs. The defendants have briefed the issue of remedies in

their responsive pleadings. Courts routinely award statutory

damages or injunctive relief when granting a motion for summary

judgment on copyright infringement. See, e.g., Chi-Bov Music,

77 9 F. Supp. at 532; Hulex Music,

;

Merrill,

; Sailor Mu sic,

.

I. Injunctive Relief

The plaintiffs have reguested the court to permanently

enjoin the defendants from infringing on their copyrights in the

future. Motion at 1.

25 Under the Copyright Act,

[a]ny court having jurisdiction of a civil action arising under this title may . . . grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.

(a) (West 1977). Courts generally grant

permanent injunctions where liability is clear and the defendants

present a continuing threat to the copyright. Pedrosillo Music

Corp. v. Radio Musical, Inc.,

(D.P.R.

1993)(listing cases); Merrill,

(injunction

granted where "substantial likelihood of further infringement of

plaintiffs' copyrights exists") (guoting Sailor Mu sic,

; Milene Music, 551 F. Supp. at 1295).

The defendants have objected to an injunction, arguing that

there is little likelihood of a future infringement:

Mr. Smith will be licensed for performances of the works to which BMI holds the copyright for 1994 and years forward. Once so licensed, there will be no violation of copyright.

Memorandum in Opposition to Summary Judgment at 14; see Smith

Affidavit at 5 17. Based on these representations by counsel and

the affidavit by Smith, the court concludes that there is not a

substantial likelihood of a future violation of the plaintiffs'

rights and an injunction is not necessary.

26 II. Statutory Damages and Judgment Interest

The plaintiffs have requested statutory damages in the

amount of $2,000 per violation, for a total of $12,000. Motion

at 2-3. The defendants have not responded with a precise

calculation of damages, instead arguing that a "$500 minimum

award is more appropriate." Memorandum in Opposition to Summary

Judgment at 17.

Under the Copyright Act,

[T]he copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work . . . in a sum of not less than $500 or more than $20,000 as the court considers just. 17 U.S.C.A § 504(c)(1) (West 1977 & Supp. 1994). The Copyright

Act further provides that the court may, at its discretion,

exceed the maximum statutory damage upon finding a willful

violation and, conversely, reduce the damages below the minimum

upon finding an unknowing or innocent violation.7 Id. at §

504 (c) (2) .

7Under the law of this circuit, the court may award statutory damages without submitting the matter to a jury. PGP Music v. Davric Maine Corp.,

(D. Me. 1985) (copyright infringer has no right to jury trial on question of injunctive relief and statutory damages) (citing Chappell & Co., Inc. v. Palermo Cafe Co.,

(1st Cir. 1957)). But see Video Views, Inc. v. Studio 21, Ltd.,

(7th Cir. 1991) (statutory damages may only be awarded by jury).

27 The damages provisions are designed to deter and discourage

wrongful conduct. Merrill,

(citing F .W .

Woolworth Co. v. Contemporary Arts, Inc.,

,

clarification denied,

(1952)). Determination of the

amount of an award under the statute is left to the court's sound

discretion. Hulex Music,

(citing Morle

Music Co. v. Dick Stacey's Plaza Motel, Inc.,

(1st Cir. 1983); Merrill,

. In calculating

damages the court considers the plaintiffs' lost revenues,

expenses saved and profits reaped by the defendants as a result

of the infringement, the size of the defendants' operation, and

whether the defendants' conduct was intentional or accidental.

Merrill,

(citing Sailor Mu sic,

); see Pedrosillo Music,

. Moreover, a

copyright infringer "cannot expect to pay the same price in

damages as it might have paid after freely negotiated bargaining,

or there would be no reason to scrupulously obey the copyright

law." Merrill,

(guoting Ackee Music,

Inc. v. Williams,

(D. Kan. 1986)).

The plaintiffs argue that the infringement was deliberate,

as evidenced by the defendants' failure to respond to BMI's

multiple attempts to execute a new license agreement. Memorandum

in Support of Summary Judgment at 12. The defendants argue that

28 the infringement was innocent and was "simply the by-product of

erratic bookkeeping procedures or the lack of financial

wherewithal to make current payments." Memorandum in Opposition

to Summary Judgment at 15.

The court finds that the infringement was neither willful

nor innocent and, thus, calculates damages within the statutory

range. However, the infringement was a knowing violation in the

sense that the defendants were repeatedly placed on notice of

their conduct and the potential ramifications. Thus, the court

awards the plaintiffs damages in the amount of $800 per

violation, for a total award of $4,800.

The court believes this award reflects the nature of the

infringement, the need to deter future violations and the degree

of culpability of the defendants. The court further awards the

plaintiffs post-judgment interest to be calculated at the federal

interest rate as provided by

(West 1994).

Clifford v. M/V Islander,

(1st Cir. 1989) (award

of post-judgment interest is mandatory); see Cordero v. De Jesus-

Mendez,

(1st Cir. 1990) (entitlement of post­

judgment interest on final judgment).

29 III. Attorney's Fees and Costs

The plaintiffs have requested an award of their reasonable

attorney's fees and costs. Motion at 2. The defendants object

on the grounds that they pursued litigation in good faith and

under the honest belief that they had not infringed the

plaintiffs' rights. Memorandum in Opposition to Summary Judgment

at 17-18 .

The Copyright Act provides that the court "in its discretion

may allow the recovery of full costs by or against any party

other than the United States . . . [and] a reasonable attorney's

fee to the prevailing party as part of the costs."

(West 1977). Courts routinely award fees and costs to

prevailing plaintiffs because they would not have had to bring an

action but for the defendants' failure to maintaining proper

licensing. See, e.g., Hulex Music,

(citing

Sailor Mu sic,

); Merrill,

; Rare Blue Music v. Guttadauro,

(D.

Mass. 1985) .

The court finds that an award of fees and costs is

warranted. The plaintiffs have submitted an affidavit from local

counsel along with bills indicating attorney fees and other fees

and costs in the total amount of $2,612.10. The defendants have

not objected to the reasonableness of this figure. However, the

30 court notes that while the submitted bills describe in narrative

form the work accomplished, they do not offer a breakdown of who

performed which tasks and on what day. Disbursements, such as

photocopies and telephone charges, are similarly lumped together

without indication of how costs are allocated. Finally, the

court cannot gauge the reasonableness of a given billable rate or

time spent on a task without a brief sketch of the professional

gualifications of each billing individual.

The plaintiffs' counsel is ordered to file within ten days

of the date of this order an itemized bill which responds to the

court's concerns. Counsel is further ordered to submit another

affidavit, this time personally signed by the attorney making the

sworn statements. The defendants will then be given an

opportunity to respond to the plaintiffs' claim for fees and

costs as provided by federal and local rules.

Conclusion

The plaintiffs have satisfied the necessary elements of

copyright infringement to prevail under the Copyright Act. The

court grants the motion for summary judgment (document no. 10)

with respect to guestion of liability for copyright infringement.

The court denies the plaintiffs' reguest for an injunction. The

court awards the plaintiffs $800 for each of the six instances of

31 copyright infringement, for a total of $4,800 with post-judgment

interest allowed as provided by

. The court

orders the plaintiffs to re-submit their claim for fees and costs

in a manner consistent with this order within ten days.

SO ORDERED.

Joseph A. DiClerico, Jr, Chief Judge Marcg 27, 1995

cc: Steven J. Grossman, Esguire Thomas M. Dudley, Esguire Lawrence M. Edelman, Esguire

32