On Wednesday Judge Alison J. Nathan of the U.S. District Court of the Southern District of New York ordered record label TufAmerica, Inc. to pay the Beastie Boys (Michael Diamond, Adam Horovitz, and Adam Yauch), Universal-Polygram International Publishing, Inc. and Capital Records LLC, $845,597.23 in attorneys' fees and costs. TufAmerica brought suit in 2012 against the Beastie Boys and their record company for copyright infringement under the Copyright Act. TufAmerica claimed that the Beastie Boys' songs Shadrach and Hold It Now Hit It used samples of songs from the musical group Trouble Funk and infringed copyrights TufAmerica purported to hold. The issue of infringement was never reached because Judge Nathan found, on the Beastie Boys' motion for summary judgment, that TufAmerica did not own the exclusive rights to the songs at issue and thus had no standing to sue.
The court's opinion awarding attorneys' fees and costs held that the defects in the arguments put forth by TufAmerica as to why it held an exclusive license were "readily apparent" and made its claim "clearly without merit" and "objectively unreasonable." Judge Nathan's prior decision granting the Beastie Boys' summary judgment motion, and therefore dismissing TufAmerica's claims, held that one of the license agreements relied on by TufAmerica was an agreement between TufAmerica and two of the three co-owners of the license to the songs at issue. As Judge Nathan noted, the law is clear that a co-owner cannot unilaterally grant an exclusive license. The second agreement on which TufAmerica based its claims for exclusive rights, the court found, showed "the clear and unambiguous intent of the parties to assign the bare right to sue" in "nearly every provision of the agreement." Again Judge Nathan pointed to established law holding that an agreement that conveys nothing more than a bare right to sue does not grant exclusive rights and cannot be the basis for standing under the Copyright Act. In awarding attorneys' fees and costs, the judge found that this was not a "close call" and that the conclusions she reached in finding that TufAmerica lacked standing were clearly recognizable from the start. The penalty awarded here was intended to "deter[] the filing and pursuit of lawsuits in which chain of title has not been adequately investigated by the plaintiff."
The case is TufAmerica,Inc. v. Michael Diamond, et al., 12-cv-3529, in the U.S. District of the Southern District of New York.
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