Opinion

Freeplay Music, LLC v. Dave Arbogast Buick-GMC, Inc.

Court: District Court, S.D. Ohio
Filed: Sep 24, 2019
Cited by: 0 cases
Authority: More cited than 28.1%

“without intent, there can be no implied license”

How later courts described this case

“without intent, there can be no implied license”
where the plaintiff failed to respond to the defendant's request to clarify what items were protected by copyright before the infringing conduct occurred

Written by the judges who cited it.

The opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

FREEPLAY MUSIC, LLC, .

Plaintiff,

V. Case No. 3:17-cv-42

DAVE ARBOGAST BUICK-GMC, JUDGE WALTER H. RICE

INC.,

Defendant.

DECISION AND ENTRY OVERRULING DEFENDANT’S MOTION FOR

SUMMARY JUDGMENT OR FOR REFERRAL OF ISSUES TO

MOTION FOR SUMMARY JUDGMENT ON LIABILITY FOR

AMENDED RULE 26(f) REPORT BY OCTOBER 23, 2019;

SCHEDULING CONFERENCE SET FOR OCTOBER 30, 2019

Plaintiff Freeplay Music, LLC (“FPM”) filed suit against Dave Arbogast Buick-

GMC, Inc. (“Arbogast”) alleging 279 instances of copyright infringement under 17

U.S.C. § 501. This matter is currently before the Court on Defendant’s Motion for

Summary Judgment or for Referral of Issues to Register of Copyrights, Doc. #52,

and on Plaintiff's Motion for Summary Judgment on Liability for Copyright

Infringement, Doc. #53.

I. Background and Procedural History

As part of its advertising strategy, Dave Arbogast Buick-GMC, Inc.

(“Arbogast”) promotes the sale of its automobiles via YouTube videos. According

to General Manager, Blake Arbogast, early in 2013, he instructed his interns to

search the Internet for sources of free music that could be used in those videos.

The interns found the website freeplaymusic.com, which is owned and operated by

Plaintiff Freeplay Music, LLC. Doc. #52-1, PagelD##894-95. An Arbogast

employee, David Novotny, who was responsible for developing the advertisements,

accessed the website and downloaded music to a folder by right-clicking his

selections. He does not recall seeing anything about restrictions for business use,

or the need for a license. Novotny first uploaded the music to his videos in early

2014. Doc. #52-2, PagelD##909-10.

In July of 2014, Darrin Michael, Arbogast’s e-commerce Director, told Blake

Arbogast that some of the videos had been “flagged for copyright [infringement]

because of the music.” Michael began removing the infringing audio from the

inventory videos. By July 11, 2014, Blake Arbogast believed that all of the

allegedly infringing music had been removed from the YouTube videos. Doc. #52-

1, PagelD##895, 898. He was incorrect in this assessment.

On October 21, 2014, Arbogast received an email message from TuneSat,

LLC, a company acting on behalf of Freeplay Music, LLC. The message stated that

it had identified FPM’s copyrighted music being used in Arbogast’s YouTube

videos. TuneSat demanded that Arbogast cease and desist all unauthorized use of

FPM’s copyrighted music and provide a list of all suspected unauthorized uses.

TuneSat indicated that, absent proof of a valid license, it would be forced to treat

the matter as a copyright infringement. It indicated, however, that it would be

open to structuring a settlement agreement to cover all of the unauthorized uses.

Doc. #52-1, PagelD#901.

Jordan Davis of TuneSat spoke to Arbogast’s Darrin Michael on October 29,

2014. In a follow-up email, Davis attached screenshots of FPM’s home page as it

appeared in 2012. Doc. #52-1, PagelD#904. The home page included the

following statement: “To learn how you can use Freeplay music click on Terms of

Use, Licensing, Rate Card.” Doc. #52-2, PagelD#912. It appears that Michael

agreed that Arbogast had probably never purchased a license for the music; he

was, however, going to confirm that. Davis attached a list of the alleged

infringements and offered to settle the matter for $750,000. Doc. #52-1,

PagelD#904. Arbogast refused.

On February 9, 2017, FPM filed suit against Arbogast, alleging 279

instances of copyright infringement, involving 23 of FPM’s copyrighted sound

recordings and compositions. Doc. #1. In a Motion for Judgment on the Pleadings,

Doc. #17, Arbogast challenged FPM’s ownership of the copyrights at issue. The

parties conducted limited discovery on this issue. On June 1, 2018, the Court

overruled Arbogast’s motion as moot and stayed the case pending mediation. Doc.

#50. All attempts at mediation have failed.

The parties have now filed cross-motions for summary judgment. FPM seeks

summary judgment on the issue of Arbogast’s liability for copyright infringement.

Doc. #53. Arbogast also seeks summary judgment on all claims. In the alternative,

Arbogast asks the Court to refer the case to the Register of Copyrights for a

determination of whether inaccurate information included on the copyright

registrations, if known, would have caused the Register to refuse the registrations.

Doc. #52.

Il. Summary Judgment Standard

Summary judgment must be entered “against a party who fails to make a

showing sufficient to establish the existence of an element essential to that party’s

case, and on which that party will bear the burden of proof at trial. Ce/otex Corp.

v. Catrett, 477 U.S. 317, 322 (1986). The moving party always bears the initial

responsibility of informing the court of the basis for its motion, and identifying

those portions of the record which it believes demonstrate the absence of a

genuine issue of material fact. /d. at 323; see also Boretti v. Wiscomb, 930 F.2d

1150, 1156 (6th Cir. 1991).

Once the moving party has met its initial burden, the nonmoving party must

present evidence that creates a genuine issue of material fact making it necessary

to resolve the difference at trial. 7a/ley v. Bravo Pitino Rest., Ltd., 61 F.3d 1241,

1245 (6th Cir. 1995); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

250 (1986). Once the burden of production has so shifted, the party opposing

summary judgment cannot rest on its pleadings or merely reassert its previous

allegations. It is not sufficient to “simply show that there is some metaphysical

doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

475 U.S. 574, 586 (1986). Rule 56 “requires the nonmoving party to go beyond

the [unverified] pleadings and present some type of evidentiary material in support

of its position.” Ce/otex, 477 U.S. at 324. The plaintiff must present more than a

scintilla of evidence in support of his position; the evidence must be such that a

jury could reasonably find for the plaintiff. Michigan Prot. & Advocacy Serv., Inc.

v. Babin, 18 F.3d 337, 341 (6th Cir. 1994).

Summary judgment shall be granted “if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a

matter of law.” Fed. R. Civ. P. 56(a). “Summary judgment will not lie if the dispute

about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable

jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248.

In determining whether a genuine dispute of material fact exists, a court must

assume as true the evidence of the nonmoving party and draw all reasonable

inferences in favor of that party. /d. at 255. If the parties present conflicting

evidence, a court may not decide which evidence to believe. Credibility

determinations must be left to the fact-finder. 10A Wright, Miller & Kane, Federal

Practice and Procedure Civil 3d § 2726 (1998). Ultimately the Court must decide

“whether the evidence presents sufficient disagreement to require submission to a

jury or whether it is so one-sided that one party must prevail as a matter of law."

Snap-On Bus. Sols. Inc. v. O'Neil & Assocs. Inc., 708 F. Supp. 2d 669, 676 (N.D.

Ohio 2010).

In determining whether a genuine dispute of material fact exists, a court

need only consider the materials cited by the parties. Fed. R. Civ. P. 56(c)(3). “A

district court is not . . . obligated to wade through and search the entire record for

some specific facts that might support the nonmoving party’s claim.” /nterRoyal

Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir. 1989), cert. denied, 494 U.S.

1091 (1990). If it so chooses, however, the court may also consider other

materials in the record. Fed. R. Civ. P. 56(c)(3).

The standard of review for cross-motions of summary judgment does not

differ from the standard applied when a motion is filed by only one party to the

litigation. Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir.1991).

“The fact that both parties have moved for summary judgment does not mean that

the court must grant judgment as a matter of law for one side or the other:

summary judgment in favor of either party is not proper if disputes remain as to

material facts. Rather, the court must evaluate each party’s motion on its own

merits.” /d. (citations omitted).

lil. Analysis

In order to succeed on its claim of copyright infringement, FPM must prove

that: (A) it is the owner of the copyrights at issue; and (B) Arbogast copied,

recorded, adapted, or published the copyrighted works without authorization to do

so. Hi-Tech Video Prods., Inc. v. Capital Cities/ABC, Inc., 58 F.3d 1093, 1095

(6th Cir. 1995).

A. Copyright Ownership

Both the Plaintiff and Defendant filed motions for summary judgment on the

issue of copyright ownership. FPM maintains that there is no issue of material fact

on the element of copyright ownership. FPM produced certifications of registration

for all 23 musical works involved in this action.' Arbogast, however, argues it is

entitled to summary judgment because FPM cannot establish copyright ownership

for all of the copyright registrations. As an alternative to summary judgment,

Arbogast requests that the case be referred to the Copyright Office for

determination of validity for the registration certifications FPM produced.

A copyright registration is a prerequisite to filing a civil action for copyright

infringement. 17 U.S.C. 8 411(a). “A certificate of copyright registration

constitutes ‘prima facie evidence of the validity of the copyright and of the facts

stated in the certificate.’” Jedson Eng’g, Inc. v. Spirit Constr. Servs., Inc., 720 F.

Supp. 2d 904, 913 (S.D. Ohio 2010) (quoting 17 U.S.C. § 410(c)). The

presumption of validity may be rebutted, but the party challenging the presumption

of copyright ownership bears a “heavy burden.” Jedson Eng’g, Inc., 720 F. Supp.

2d at 913.

" See generally Doc. #19-2; Doc. #19-3; Doc. #19-4; Doc. #19-5; Doc. #53-15;

Doc. #53-18; Doc. #53-20; Doc. #53-22; Doc. #53-26; Doc. #53-31.

If the challenging party proves that the copyright holder committed fraud in

the application for the copyright, the presumption of validity will be rebutted.

Lennon v. Seaman, 84 F. Supp. 2d 522, 525 (S.D.N.Y. 2000). However, the party

asserting fraud must establish that the application for the copyright is: (1) factually

inaccurate; (2) the inaccuracies were willful or deliberate; and (3) the Copyright

Office relied on those misrepresentations. /d. The party challenging the

presumption of ownership must present more than a conjecture to rebut the

presumption of validity. BMG Rights Mgmt. (US) LLC v. Cox Comme’ns., Inc., 149

F. Supp. 3d 634, 645 (E.D. Va. 2015), aff'd in part, rev'd in part, 881 F.3d 293

(4° Cir. 2018); 3 Nimmer on Copyright § 12.11 n.28.18 (2019).

Ownership of a copyright can arise through authorship or assignment. /n re

Napster, Ine. Copyright Litig., 191 F. Supp. 2d 1087, 1097 (N.D. Cal. 2002). A

third party generally does not have standing to challenge the presumption of

ownership established by a valid assignment if there is no dispute between the

assignee and assignor. /d. at 1097-1099. However, third parties may challenge the

validity of ownership by authorship, including “work-for-hire” agreements. /d.

1. Assigned Works

In this case, FPM claims ownership over some of the musical works by

assignment. These works include: (1) “Ground Squad”; (2) “Corn Liquor”; (3)

“Driftwood”; (4) “Heartland”; (5) “Spice Factor”; and (6) “Through the Grassy

Hills.” This court previously determined that Arbogast lacks standing to challenge

the ownership by assignment. Doc. #49, PagelD#855. FPM and the assignors or

licensors agree that FPM is the rightful copyright owner.* Although Arbogast lacks

standing to challenge the assignment of the copyrights to FPM, Arbogast may

nevertheless challenge the presumption of validity of the copyright registrations by

proving fraud on the Copyright Office. See, e.g., Shady Records, Inc. v. Source

Enters., No. 1:03 Civ. 9944 (GEL), 2004 U.S. Dist. LEXIS 26143 (S.D.N.Y. Dec.

30, 2004). FPM will be entitled to summary judgment on the issue of copyright

ownership for the six assigned works listed above unless Arbogast can prove fraud

on the Copyright Office.

2. Work-for-Hire Agreements

A “work made for hire” is “a work prepared by an employee within the

scope of his or her employment” or “a work specifically ordered or commissioned

for use . . . if the parties expressly agree in a written instrument signed by them

that the work shall be considered a work made for hire.” 17 U.S.C. § 101. “In the

case of a work made for hire, the employer or other person for whom the work

was prepared is considered the author.” 17 U.S.C. § 201(b).

FPM has produced the work-for-hire agreements for the other seventeen

songs in question.

* Composer Rick DiFonzo provided in his declaration that FPM is the rightful owner

to the copyright for “Corn Liquor,” “Driftwood,” “Heartland,” and “Spice Factor”

under an assignment between FPM and Cruz Bay Music. Doc. #45-1, PagelD#807.

Composer Tilmann Sillescu created “Ground Squad” for Dynamedion GbR which

then assigned the rights and interest to FPM. Doc. #45-1, PagelD#809. Composer

Kelly Weeks stated that he or she granted FPM an exclusive license for “Through

the Grassy Hills,” and that FPM has owned the work since 2008. Doc. #45-1,

PagelD#823.

1) “Can Do”: Doc. #53-8; Doc. #53-9; Doc. #53-7

2) “Swing Cheese”: Doc. #53-8; Doc. #53-9; Doc. #53-7

3) “Your Eyes on Glory”: Doc. #53-8; Doc. #53-9; Doc. #53-7

4) “Challenge The Dream”: Doc. #53-11; Doc. #53-7

5) “Cuttin Loose”: Doc. #53-11; Doc. #53-7

6) “Mod Indigo”: Doc. #53-11; Doc. #53-7

7) “Charlie”: Doc. #53-12

8) “Moonbeams”: Doc. #53-15

9) “The Edge”: Doc. #53-15; Doc. #53-7

10) “Feel Good”: Doc. #53-17

11) “Funky Pad”: Doc. #53-19

12) “Hear Me Calling”: Doc. #53-23

13) “Right On It": Doc. #53-23

14) “Soul Thang”: Doc. #53-24; Doc. #53-7

15} “SurfNation”: Doc. #53-25

16) “Tea For Two”: Doc. #53-26; Doc. #53-7

17) “Up The Downbeat”: Doc. #53-28; Doc. #53-29: Doc. #53-7

Each “work-for-hire” agreement contains a “belt and suspenders” clause,

providing that, if the work is deemed not to be a “work-for-hire,” then the

composer assigns all right, title, and interest in the copyright to FPM. In addition, a

majority of the authors submitted declarations stating that FPM is the rightful

owner of the copyright.* FPM was not obligated to provide these documents, but

they evidence the validity of the work-for-hire agreements.

Arbogast maintains that FPM’s ownership of the music in question is derived

from the claims that Scott Schreer, the founder and owner of FPM, contributed to

the creation of the songs. That claim is inaccurate. Instead, FPM both claims and

° Of the fifteen authors who assigned ownership of the music to FPM through a

work-for-hire agreement, eleven provided declarations confirming FPM’s ownership

of the songs in question. Doc. ##46-1,2. Doc. #45-1. The ones that did not are

immaterial to the validity of the registration because this evidence is supportive but

unnecessary, especially in light of the “belt-and-suspenders” clause.

derives ownership of the copyrights of the songs in question either through

assignment, or through work-for-hire agreements.

Arbogast also takes issue with Mr. Schreer’s inability to identify the specific

works or the specific contributions of the various authors to the works at issue in

this case. Again, this concern is irrelevant. Being able to identify a particular

musical work is not a prerequisite to establishing ownership for a copyright for that

particular song. Moreover, as explained by FPM, this music is production music or

“wallpaper” music that is designed to be heard, not remembered, and the music

was created 15-20 years ago alongside thousands of other similar musical

compositions. Doc. #66, PagelD#2001.

Additionally, regardless of whether or not Schreer was a contributor,

supervisor, or primary composer, FPM derives ownership to each song under either

an assignment or a work-for-hire agreement. For the ten songs that Schreer

allegedly contributed to, FPM has provided the work-for-hire agreements for

everyone who contributed to the production, including Schreer. Moreover, none of

the authors who assigned ownership to FPM are contesting FPM’s ownership of

the copyrights. Thus, Schreer’s specific contributions or lack thereof are irrelevant

to the issue of copyright ownership.

Since FPM has presented certificates of registration, FPM is entitled to a

presumption of validity. FPM further supports its copyright ownership with the

work-for-hire agreements and assignment agreements. Although the presumption

of validity is rebuttable, Arbogast has not presented any evidence that would rebut

that presumption for the songs produced under work-for-hire agreements. Thus,

FPM is entitled to summary judgment on the issue of copyright ownership for the

songs produced under the work-for-hire agreements, unless Arbogast can prove

fraud on the Copyright Office.

3. Timely Registration

Section 410(c) of Title 17 of the United States Code provides,

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. The evidentiary weight to be accorded the

certificate of a registration made thereafter shall be within the

discretion of the court.

17 U.S.C. § 410(c).

Absent evidence that the date of first publication listed on the certification

or registration is incorrect, the certificate is prima facie evidence that the date of

first publication listed is accurate. Te/erate Sys., Inc. v. Caro, 689 F. Supp. 221,

227 (S.D.N.Y. 1988).

Arbogast argues that FPM is not entitled to the presumption of validity

because FPM has no record of the first publication and Schreer did not recall the

specific dates of first publication during his deposition. Arbogast demands either

substantiation of the facts in the registration, or deposit copies of the works in

question.*

* The deposit copy is simply an original or copy of the item the copyright holder

intends to copyright. The deposit copy and application are reviewed by a

registration specialist to ensure compliance with copyright application

Since FPM has provided the registration certificates, it is entitled to the

presumption of validity, and that presumption covers not only the registration

itself, but also the facts stated in the registration. The burden lies with the alleged

infringer to present evidence that the copyright holder's registration is invalid,

including the date of first publication. /d. Arbogast, however, has presented no

evidence that Schreer or any of the other authors first published the works at some

date different from what is listed with the Copyright Office. The fact that Schreer,

at his deposition, could not recall the exact dates for the creation and publication

of “background music” does not evidence falsity of the publication date. Since

Arbogast has not presented evidence that would call into question the accuracy of

the information included in the registration, FPM is entitled to a presumption of

validity that extends to the date of first publication stated in the certificate of

registration.

Arbogast’s request for FPM to “genuinely substantiate” its registrations is

improper. As stated above, the burden lies with the alleged infringer to present

evidence that the copyright holder’s registration is invalid. Varsity Brands, Inc. v.

Star Athletica, LLC, 799 F.3d 468, 477 (6th Cir. 2015). Requiring FPM to

“genuinely substantiate” the facts in the copyright registrations would improperly

shift the burden of proof to FPM. Citing Corwin v. Quinonez, 858 F. Supp. 2d 903,

913 (N.D. Ohio 2012), Arbogast argues that FPM should demonstrate ownership

requirements. U.S. Copyright Office, Compendium of U.S. Copyright Office

Practices § 204.3 (3d ed. 2017).

by providing a song-by-song description of the works in question and their specific

authorship. Arbogast’s reliance on this case is improper. First, the copyright

claimant in Corwin conceded the fact that the copyright registration was made

outside the five-year period after first publication, so the presumption of validity

did not apply and the burden shifted to the copyright claimant to produce evidence

of ownership. /d. In this case, FPM has not conceded that the copyright

registrations occurred more than five years after first publication, so the evidentiary

burden continues to rest on Arbogast.

Additionally, Arbogast’s request for the deposit copies of the works provided

with the original copyright applications is improper. Arbogast argues that the

failure to produce a deposit copy of the original registration either challenges the

presumption of validity or overcomes the presumption in general. Although the

deposit copy may be necessary in some cases, a deposit copy is unnecessary here.

Arbogast cites Corbis Corp. v. Amazon.com, Inc., where the court determined that

production of the deposit copy was necessary to determine whether or not a

certain photo in question was included under the registration number the Plaintiff

provided. 351 F. Supp. 2d 1090, 1113-15 (W.D. Wash. 2004).

The facts of this case are easily distinguishable. In this case, the

registrations clearly cover the works in question. With relative ease, each song or

musical work to which FPM claims ownership can be traced back to a registration

number provided by the Copyright Office. The deposit copy would add nothing to

the analysis of the copyright ownership issue. Thus, the lack of deposit copy does

not overcome the presumption of validity of the copyright registration. Again,

under 17 U.S.C. § 410(c), FPM is not required to do anything else to retain the

presumption of validity covering both the registration and the date of first

publication. Since Arbogast has not presented any evidence that the dates of first

publication, as listed on the registrations, are incorrect, those dates are presumed

valid.

Even if the copyright registration was not filed within the five-year window,

the certificate is not rendered invalid. Rather, the copyright registration is no longer

prima facie evidence of validity of the copyright and facts stated in the registration.

Under 17 U.S.C. § 410(c), the court has discretion to accord whatever weight it

feels to be appropriate to copyright registrations made outside the five-year

registration period. In this case, FPM has provided enough evidence to prove

ownership of the copyright irrespective of the five-year statutory presumption

window. FPM has provided the work-for-hire agreements, assignment agreements,

majority of the contributing artists. In the Court's view, there is no question that

FPM owns copyrights for works at issue in this case. Unless Arbogast can

demonstrate fraud on the Copyright Office, FPM will be entitled to summary

judgment on the issue of copyright ownership for the seventeen work-for-hire

musical works in addition to the six assigned ones.

4. Fraud on the Copyright Office

Arbogast alleges multiple theories of fraud on the Copyright Office. Proving

fraud on the Copyright Office will successfully rebut the presumption of validity

given to the copyright registrations. A party asserting fraud on the Copyright Office

must establish that: (1) the application for the copyright is factually inaccurate; (2)

the inaccuracies were willful or deliberate; and (3) the Copyright Office relied on

those misrepresentations. Jedson Eng’g, Inc., 720 F. Supp. 2d at 913-14 (internal

quotations omitted). Clerical errors, innocent misstatements, and deliberate, but

immaterial misstatements will not overcome the presumption of validity, unless the

defendant can prove fraud or the intent to extend the statutory period of copyright

protection. /d. Material misstatements in a copyright registration application "are

those which go toward the registrability of the materials themselves, such as

originality . . . the nature of materials to be copyrighted . . . and contested claims

of authorship and ownership." /d. The presumption of validity will be rejected only

where the facts shown might have occasioned rejection of the copyright

application by the Copyright Office. /d. Again, the alleged infringer bears a heavy

burden in attempting to prove fraud. /d. at 913.

FPM notes that fourteen of the songs were originally and improperly

registered under the name “Freeplay Music, Inc.,” a non-existent entity. Doc. #19,

PagelD#182. After it became aware of the errors, FPM notified the Copyright

Office and filed supplemental registrations to correct the error, noting that, at the

time the registrations were filed, the proper entity was “Freeplay Music, Corp.” /d.

A representative of the Copyright Office emailed Scott Schreer to ensure that he

was in fact the agent authorized to make this name change. Doc. #59-7,

PagelD##1915-—1916. At that time, Schreer informed the Copyright Office that he

was the duly authorized agent on behalf of FPM. He noted, however, that the

company name was currently “Freeplay Music, LLC” and no longer “Corp.” /d. The

reflect this. Docs. ##19-3, 19-4, 19-5.

Arbogast alleges that the company name change on the copyright

registration forms from “Inc.” to “Corp.” to “LLC” was not simply a corrective

measure taken by FPM and Schreer. Arbogast suggests that FPM made the

company name change from “Inc.” to “LLC” in order to preserve “then-pending

shakedowns” in other copyright infringement cases initiated by FPM. Doc. #56,

PagelD#1806. According to Arbogast, the name change would therefore constitute

fraud on the Copyright Office. Arbogast also takes issue with the supplemental

registrations FPM submitted during prior infringement cases without giving the

Arbogast's claim, that the name change from “Inc.” to “Corp.” then “LLC”

was fraud and not a clerical correction, is unsupported by the facts. As noted by

FPM, Freeplay, whether listed as “Inc.,” “Corp.,” or “LLC,” has always been a

Scott Schreer company at the address listed on the copyright registrations.

Notably, eight of the copyright registrations in question were originally filed listing

the correct entity “Freeplay Music, Corp.” as the owner. This gives credence to

FPM’s claim that the inaccurate company name, “Freeplay Music, Inc.,” on some

of the copyright registrations was a clerical error and not a willful or deliberate

misstatement. All other contact information for the registering party was always

accurate. This Court previously held that the inconsistencies, which FPM corrected

with the supplemental applications prior to filing this lawsuit, are not material to

the registerability of the works in question. Doc. #49, PagelD#859. These clerical

mistakes are immaterial because there are no issues regarding originality or

copyrightability of the works in question and no co-authors or assignors are

contesting ownership. Moreover, the Copyright Office likely would have rejected

the applications if these errors were material.

Second, Arbogast’s concern that the supplemental registrations were made

without notifying the Copyright Office of then-pending litigation does not evidence

fraud on the Copyright Office. Again, fraud on the Copyright Office requires

fraudulent intent and material misstatements that call into question ownership,

originality, or copyrightability of the songs in question. Jedson Eng'g, Inc., 720 F.

Supp. 2d at 913-14. The Copyright Compendium provides that when the

to issue a supplementary registration if it seems likely that the proposed change

would be a/rectly at issue in the litigation. U.S. Copyright Office, Compendium of

U.S. Copyright Office Practices § 1802.9(G) (3d ed. 2017).° However, a

° The example provided by the Compendium is as follows: “Michelle Peck

registered an online video, naming herself as the author and copyright claimant.

supplemental registration may be granted during litigation if the change is a spelling

mistake, clerical error, or change to the title of the work. /d. Neither the Copyright

Compendium nor 17 U.S.C. § 410 imposes an express duty on the copyright

holder to notify the Copyright Office of pending litigation when filing a

supplemental registration.°®

Arbogast’s argument concerning the notice of pending litigation is

unpersuasive for multiple reasons. First, this Court previously determined that the

misstatements corrected by the supplemental registrations were immaterial. Doc.

#49, PagelD#859.The company’s name change does not call into question the

ownership, originality, or copyrightability of the songs in question. Since the

misstatements are immaterial and would not warrant rejection of the registration

by the Copyright Office, the presumption of validity stands.

Mark Ferrell subsequently registered the same video, naming himself as the author

and copyright claimant. Michelle submits an application for a supplementary

registration stating that Mark’s name should be added to her registration as a co-

author and co-claimant. In a cover letter, Michelle explains that the parties are

involved in a lawsuit concerning the ownership of the copyright. The authorship

and ownership of the work appear to be directly at issue in the litigation, and if the

Office added Mark’s name to the registration record for Michelle’s registration it

could upset the balance between the competing registrations. As a result, the

Office may decline to issue a supplementary registration until the dispute has been

resolved.” U.S. Copyright Office, Compendium of U.S. Copyright Office Practices

§ 1802.9(G) (3d ed. 2017).

° The Copyright Office's policy statements, agency manuals, and enforcement

guidelines do not carry "the force of law," but they are “entitled to some deference

given the specialized experience and broader investigations and information of the

agency.” Aogers v. Better Bus. Bureau of Metro. Houston, Inc., 887 F. Supp. 2d

722, 732 (S.D. Tex. 2012) (internal quotations omitted).

Next, FPM’s company name change did not concern a material fact at issue

in litigation. The Copyright Office likely would have approved the clerical name

change with or without knowledge of any active litigation, because FPM has

always been the copyright claimant at the address listed in the copyright

registration. The name change was simply clerical. Unlike the example provided by

the Copyright Compendium, there have been no competing claims for ownership or

authorship regarding the music Arbogast used in its advertisements. Arbogast does

not overcome the presumption of validity because nothing in the record would

allow the fact-finder to infer that the supplemental registrations would have been

rejected by the Copyright Office had it been informed of the active litigation at the

time the supplemental registrations were made.

Additionally, the supplemental registrations were issued before discovery

and were in fact located by Arbogast during discovery. The potential issues that

are created when the copyright holder does not inform the Copyright Office of

active litigation when filing a supplemental registration are not present in this case.

Thus, the presumption of validity granted to the supplementary registrations

stands.

Lastly, Arbogast also argues that the failure to include the names of the

other musical authors on the application form for the various registrations would

potentially constitute fraud on the Copyright Office. The Court disagrees.

In Shady Records, the Copyright Office granted a valid copyright

registration knowing that the co-author was omitted from the application, despite

Shady Records, 2004 U.S. Dist. LEXIS 26143, at *36. The court stated that “[I]f

failure to include all co-authors were material to disposition of the registration, the

suffering such omissions.” /d.

Similarly, in this case, the Copyright Office granted FPM valid registrations

and supplemental registrations knowing that the works were created under work-

for-hire agreements and the names of the co-authors were omitted from the

applications. If the Copyright Office found the omission of the co-authors from the

applications to be a material mistake, it would not have issued the registrations or

supplemental registrations.

Arbogast fails to carry the burden of proving fraud on the Copyright Office.

Both arguments regarding the name change and the omission of co-authors are

insufficient to prove fraud, because the arguments involve immaterial issues that

would not affect the validity of the copyright registrations. Since Arbogast raises

no arguments involving material issues, the presumption of validity of the copyright

registration stands. Since the presumption of validity has not been rebutted by

proof of fraud on the Copyright Office, FPM, upon a showing of actual

infringement, is entitled to summary judgment on the issue of liability, unless there

is a valid defense to enforcement.

5. Referral to the Copyright Office

As an alternative to summary judgment, Arbogast asks the Court to refer

this case to the Copyright Office under 17 U.S.C. § 411(b). The statute provides:

(1) A certificate of registration satisfies the requirements of this

section and section 412, regardless of whether the certificate

contains any inaccurate information, unless

(A) the inaccurate information was included on the application

for copyright registration with knowledge that it was inaccurate; and

(B) the inaccuracy of the information, if known, would have

caused the Register of Copyrights to refuse registration.

(2) In any case in which inaccurate information described under

paragraph (1) is alleged, the court shall request the Register of

Copyrights to advise the court whether the inaccurate information, if

known, would have caused the Register of Copyrights to refuse

registration.

17 U.S.C. 8 411(b).

Only two district court cases within the Sixth Circuit have addressed the

that, although the statute seeks to eliminate guesswork by the federal courts as to

how the Copyright Office would respond, 411(b)(2) referral is subject to potential

abuse that would cause unnecessary delay in infringement claims. Schenck v.

Orosz, 105 F. Supp. 3d 812, 818 (M.D. Tenn. 2015). The court suggested that

referral to the Copyright Office should not be made when allegations are

unsupported by any facts in the record. /d. at 819. As a threshold question, the

Schenck court asks: (1) have the defendants adequately alleged a violation under

§411 (b)(1), and (2) are those allegations factually supported? /d.

In Libertas Technologies v. Cherryhill Management, the court refused to refer

the case to the Copyright Office because the Copyright Office was already aware

of, or would have recognized, the alleged defects and it chose to issue the

registration anyway. Libertas Techs. v. Cherryhill Mgmt., No. 1:10-cv-935, 2012

U.S. Dist. LEXIS 173078, at *35-36 (S.D. Ohio Dec. 6, 2012). Moreover, the

Court found that other claimed defects in the registration were unsupported by the

facts. /d.

In this case, Arbogast asks the Court to seek guidance from the Copyright

Office on three questions:

1) Would the Copyright Office have refused the copyright registrations if

it knew Freeplay Music, Inc. was non-existent?

2) Does the “Corp.” to “LLC” name change invalidate the copyright

registration because the “LLC” was not established until 2007?

3) Does the failure to include the other co-authors on the Form SR

application invalidate the copyright registrations?

Doc. #52, PagelD#888.

The facts in this case do not warrant referral to the Copyright Office to

answer any of the three questions posed by Arbogast. The first question, regarding

the non-existence of “Freeplay Music, Inc.,” does not warrant referral to the

company name “with knowledge that it was inaccurate.” 17 U.S.C.

§ 411(b)(1)(A). As previously discussed, the evidence supports a finding that this

was nothing more than a clerical error. Similar to the issue in the Libertas case, the

registrations to fix the errors. The non-existence of “Freeplay Music, Inc.” did not

“[cause] the Register of Copyrights to refuse registration.” 17 U.S.C. 8 411

(b)(1)(B). The Copyright Office has already answered the first question Arbogast

wishes to ask by accepting the supplemental registrations and recognizing FPM as

the owner of the copyrights.

Similarly, the second question regarding the name change from “Corp.” to

“LLC” does not warrant referral to the copyright office. When the Copyright Office

contacted Schreer to verify that he was authorized to change the name from

“Freeplay Music, Inc.” to “Freeplay Music, Corp.” he informed them that, although

at the time of the original registration, the owner should have been listed as

“Freeplay Music, Corp.”, the legal entity was now “Freeplay Music, LLC.” Doc.

#59-7, PagelD##1915-1916. The Copyright Office updated the records

accordingly. /d. The fact that “Freeplay Music, LLC” did not exist when the original

registrations were filed does not invalidate the copyright registrations, as

evidenced by the fact that the Copyright Office made the name change on its own

accord.

Finally, much like the first two questions, the third question has also been

indirectly answered by the Copyright Office. Although the failure to include any co-

authors was likely made knowing the information was inaccurate, the inaccuracy

of the information would not have caused the Register of Copyrights to refuse

registration. See Shady Records, 2004 U.S. Dist. LEXIS 26143, at *36.

In sum, each question Arbogast asks has already been answered by the

supplemental registrations. This Court need not engage in the type of guesswork

§411(b) was intended to prevent. Referral to the Copyright Office would only

unnecessarily delay this infringement action with no benefit. Thus, Arbogast’s

request to refer the case to the Copyright Office is denied.

B. Unauthorized Use

The second prong necessary to establish a claim for copyright infringement

requires FPM to prove that Arbogast reproduced or published the copyrighted

material without authorization. Hi-Tech Video Prods., 58 F.3d at 1095. It is

undisputed that Arbogast used the copyrighted music in advertising videos.

However, Arbogast argues that FPM granted either an express license or an implied

license to use the copyrighted music.

1. Express License and Browsewrap Agreement

Arbogast maintains that, based on the website design as it existed when the

music was downloaded, FPM should be deemed to have granted an express license

to use the music in question free of charge.’ Arbogast argues that the

“browsewrap” agreement on that website was ineffective.

” At some point in late July 2013, FPM created a new website that included an

advertisement for “Free Music for YouTube.” Doc. #64-1 PagelD#1963.

The Court disagrees. A browsewrap agreement discloses “terms on a

website that offers a product or service” to the user, and the user assents to the

terms and conditions by “visiting the website to purchase the product or enroll in

the service.” Schnabel v. Trilegiant Corp., 697 F.3d 110, 129 n.18 (2d Cir. 2012).

A “browsewrap" agreement allows the user “to view the terms of the agreement,

but does not require the user to take any affirmative action before the Web site

performs its end of the contract.” Doe v. SexSearch, 502 F. Supp. 2d 719, 729

n.1 (N.D. Ohio 2007).

Courts have found that constructive knowledge alone is sufficient to

establish consent to “browsewrap” terms and conditions when the website host

placed the notice of the terms and agreements “prominently” and provided “easy

access” to the full terms. Snap-On Bus. Sols., Inc. v. O'Neil & Assocs., Inc., 708

F. Supp. 2d 669, 682 (N.D. Ohio 2010). See, e.g., Major v. McCallister, 302

S.W.3d 227, 230-31 (Mo. Ct. App. 2009) (upholding browsewrap agreement

Arbogast’s arguments related to the new website are irrelevant because there is no

evidence suggesting that any Arbogast employees accessed the new website

before or after the infringing conduct occurred. In the event the new site was

accessed, Arbogast would have actual knowledge of the terms and conditions. The

newer website required users to select a license type before downloading the

music. As opposed to the old website, the new website incorporated a “Clickwrap

agreement.” A clickwrap agreement is formed when the website visitor is required

to explicitly manifest assent to the website's terms and conditions by requiring

some affirmative act (e.g., clicking "| agree") before the visitor can proceed further

on the website. Snap-On Bus. Sols., Inc. v. O'Neil & Assocs., Inc., 708 F. Supp.

2d 669, 681 (N.D. Ohio 2010). A website user's assent is manifested when he or

she clicks "| agree" to a proper clickwrap agreement. Specht v. Netscape

Comme’ns. Corp., 306 F.3d 33-34 (2d Cir. 2002).

where each web page contained "immediately visible notice of the existence of

license terms" and hyperlink to those terms); Ticketmaster Corp. v. Tickets.com,

No. CV99-7654-HLH (VBKx), 2003 U.S. Dist. LEXIS 6483, at *6-7 (C.D. Cal. Mar.

6, 2003) (finding notice of terms posted on home page and visible to most users

sufficient to impute knowledge of and assent to those terms).

Arbogast argues that FPM’s home page, accessed by his staff at the time

the music was downloaded, did not require the user to review the “Terms and

Conditions” and gave no warning that a license was required. Arbogast argues that

the website was akin to that in Specht v. Netscape Communications Corp., 306

F.3d 17, 22 (2d Cir. 2002). In that case, the court refused to enforce a

browsewrap agreement where users of the web page did not see any notice of

agreement unless they scrolled down to another screen.

[remainder of page intentionally left blank]

FPM’s website is distinguishable from the one at issue in Specht. This is

what the home page looked like when accessed by Arbogast employees:

Stfreeplaymusic

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New Music From Freeplay!: click a music category to browse our 6920 tracks

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To Learn how you can use Freeplay Music no □□□ eee VOL ae

click on Terms of Use, Licensing, Rate couse Casing VAT Alt Rock/Country

Card. Questions or comments, contact us Acoustic Guitar Vol 8 Ambient □□

at: (212) 974-0548. Ree cee perese VAT Aribiert/Dowmntes

. peton ond cherie □□ Aevenwelcte

Check Out Freeplay’s Newest hon 2 ure oe

Releases: nae ae nes : oe

Action And Adventure Vol 7 BreezyiSexy |

Feb. §, 2013 - "Electronic Grooves Volume Action And Adventure Vol 8 Sinieno! tension

9" This eclectic collection of Hip-Hop, poker bun Miysiery Voli} Chilled Back

Techno, and Dubstep makes for an Alternative Rock Vol 7 vw Cinematic ¥

interesting blend of bold and edgy tracks Alternative Rock Vol 8 Climactic/Explocive

sure to kéep your ears interested. go to: search by keyword:

go to: sea by keyword:

Feb, S, 2013 - "Mystical Symphonic advanced searcn [fr

Volume 12" Composer Ed Kessel really search guide

shows his depth with the fantastical tracks

on Mystical Symphonic Volume 12- this

excellent collection features woodsy,

organic orchestral works that will add a

touch of magic and mystery to your scene

or project- On "Apricot" Bells and chimes “

finds their way through archactral

Freeplay Music LLC. | 1650 b'dway, suite 1108, ny, ny 10019 | p: 212-974-0548 f: 212-664-7737

Doc. #52-2, PagelD#912.

Unlike the browsewrap agreement in Specht, FPM’s home page displayed a

visible link that read: “[t]lo learn how you can use Freeplay music click on Terms of

Use, Licensing, Rate Card.” /d. FPM website users did not have to scroll to find the

link for the terms of use. The link is easily visible in the upper left-hand corner of

the home page. Also, the header of the page included links for licensing and rate

cards that are immediately visible when the website is accessed. /d. Like the

agreement in Major v. McCallister, the hyperlink was immediately visible to the

user of the website. Clicking on any of these links would have alerted Arbogast

that, although personal use of the music was free, business uses required a paid

license. Under these circumstances, no reasonable jury could find that FPM had

granted Arbogast an express license to use the songs free of charge. Thus,

Arbogast was not granted an express license and Arbogast had constructive

knowledge of the browsewrap agreement by nature of using the website.

2. Implied License

Arbogast also argues that, at a minimum, the Court should recognize an

implied license to use the copyrighted works based on the company’s name,

“Freeplay,” and the absence of any conspicuous warning that a business

downloading the music was required to purchase a license. The existence of an

implied license would bar a finding of copyright infringement. Johnson v. Jones,

149 F.3d 494, 500 (6th Cir. 1998).

Arbogast’s argument is easily disposed of. An implied license exists only

when: “(1) a person (the licensee) requests the creation of a work, (2) the creator

(the licensor) makes that particular work and delivers it to the licensee who

requested it, and (3) the licensor intends that the licensee-requestor copy and

distribute his work.” /.A.E., Inc. v. Shaver, 74 F.3d 768, 776 (7th Cir. 1996); see

also Johnson, 149 F.3d at 502 (“without intent, there can be no implied license”).

Arbogast never asked FPM to create any works. Nor did FPM make any

works at Arbogast’s request to be used in Arbogast’s YouTube videos. Moreover,

given FPM’s paid license requirements for business use of the copyrighted works

available on its website, it cannot be said that FPM intended that Arbogast

download and distribute those works free of charge. Accordingly, the Court finds

that no implied license exists.

Therefore, there exists no issue of material fact on the subject of express or

implied license. Arbogast had neither an express nor implied license to use the

music free of charge. Accordingly, FPM will be entitled to summary judgment on

the issue of liability for copyright infringement, unless any defense to copyright

infringement applies.

C. Equitable Defenses

Arbogast argues that, even if the Court finds no genuine issue of material

fact concerning valid copyright ownership and unauthorized use, FPM’s recovery

should be barred under the equitable doctrines of unclean hands, copyright misuse,

or equitable estoppel. The Court may determine the merits of these equitable

defenses as a matter of law. Malibu Media v. Doe, No. 13-11432, 2014 U.S. Dist.

LEXIS 79889, at *15 (E.D. Mich. June 12, 2014).

1. Unclean hands.

Arbogast argues that FPM maintained a “bait and switch” business model

that intentionally induced consumers to commit copyright infringement. Arbogast

maintains that FPM’s business model evidences unclean hands. In the Sixth Circuit,

the doctrine of unclean hands allows the court to deny relief where the party

applying for the relief is "guilty of conduct involving fraud, deceit,

unconscionability, or bad faith related to the matter at issue[.]" Performance

Unlimited, Inc. v. Questar Publishers, Inc., 52 F.3d 1373, 1383 (6th Cir. 1995).

The plaintiff's misconduct "must relate directly to the transaction about which the

plaintiff has made a complaint." /d.

Arbogast has not presented sufficient evidence that would allow a

reasonable trier of fact to find unclean hands through fraud, deceit,

unconscionability, or bad faith. Nothing about the old website, which Arbogast

used to download the music, demonstrates fraud or the intent to commit fraud.

Links to Terms and Conditions, Licensing, and Rate Cards were clearly visible on

the website's home page. Given that these links were prominently displayed on the

home page, a sophisticated business would not reasonably believe all of the music

to be available free of charge. In fact, Schreer maintains that the “free” in

“Freeplay” represents the free synchronization fee model and nothing else. Doc.

#58, PagelD#1875.°

Likewise, the website is not intentionally deceptive nor are the terms of the

licensing agreement unconscionable. Charging businesses for the use of

copyrighted music in advertising would not shock the conscience of any reasonable

trier of fact. Nor is there any evidence that FPM acted in bad faith, by tricking

As Scott Schreer explained in his deposition, music used in television and video

productions generates revenue for the copyright owner through: (1) public

performance royalties; and (2) synchronization fees. FPM’s business model

eliminates synchronization fees and charges businesses only for the performance

royalties. Doc. #58, PagelD##1874-1876.

businesses to download the music so that it could sue them for copyright

violations.°®

The Court finds that there exists no genuine issue of material fact, and that

Arbogast’s defense of unclean hands fails as a matter of law.

2. Copyright Misuse

Arbogast argues that FPM’s business model, paired with the 40 other

Arbogast alleges that FPM is a “copyright troll” due to its business model and use

of TuneSat to “track” its music. Although the Sixth Circuit has not explicitly

recognized the doctrine of copyright misuse, other circuits and district courts in the

Sixth Circuit have addressed this defense. Design Basics, LLC v. Petros Homes,

Inc., 240 F. Supp. 3d 712, 720 (N.D. Ohio 2017) (collecting cases).

secure an exclusive right or limited monopoly not granted by the [Copyright] Office

and which is contrary to public policy to grant.” /d. at 720. To establish copyright

misuse, a defendant must establish either "(1) that [the plaintiff] violated the

antitrust laws or (2) that [the plaintiff] illegally extended its monopoly beyond the

° The caselaw relied upon by Arbogast is easily distinguishable. See Tempo Music

v. Myers, 407 F.2d 503, 506-507 (4" Cir. 1969) (where the plaintiff failed to

respond to the defendant's request to clarify what items were protected by

CV 90-0323 H, 1992 U.S. Dist. LEXIS 21187, at *11 (S.D. Cal. July 31, 1992).

(where the plaintiff deliberately misstated the extent of its copyright ownership and

failed to comply with discovery requests for information that would directly impact

the defense of the infringement claim).

scope of the copyright or violated the public policies underlying the copyright

laws.” Microsoft Corp. v. Compusource Distribs., Inc., 115 F. Supp. 2d 800, 810

(E.D. Mich. 2000).

FPM’s activity does not support a claim of copyright misuse. Copyright law

seeks "to promote the dissemination of creative expression, and provide incentives

for copyright owners to produce . . . original works." CBS Broad., Inc. v. EchoStar

holder asserts rights in non-copyrightable materials, other individuals may be

discouraged from integrating those non-copyrightable materials into their own

original creative works. See generally, William F. Patry & Richard A. Posner, Fair

Use and Statutory Reform in the Wake of Eldred, 92 Calif. L. Rev. 1639, 1654-59

(2004).

Arbogast’s attempt to compare this case to Design Basics v. Petros Homes

fails. In Design Basics, the plaintiff attempted to allege copyright infringement over

design plans that contained elements not protected by the copyright registrations.

240 F. Supp. 3d at 720. The plaintiff also encouraged its employees to track down

potential infringements and force settlements. /d.

This case is distinguishable because FPM clearly owns the copyright to each

song in question and the songs are copyrightable material. FPM is not claiming

anything outside the scope of the copyright protection. Moreover, FPM’s use of

TuneSat does not violate the public policy underlying copyright laws. Unlike the

scheme employed by Design Basics, FPM’'s use of TuneSat raises no concerns that

innovation and creativity will be stifled. TuneSat is simply a tool that can help

musicians locate the unauthorized reproduction or publication of copyright

protected work that would otherwise be difficult to locate.

This case is further distinguishable from the copyright “troll” line of cases.

product or service or licensing their [copyrights] to third parties to sell a product or

service.” Malibu Media, LLC v. Doe, No. 15 Civ. 4369 (AKH), 2015 U.S. Dist.

LEXIS 87751, at *4 (S.D.N.Y. July 6, 2015) (quotation omitted). A copyright troll

“plays a numbers game in which it targets hundreds or thousands of defendants

seeking quick settlements priced just low enough that it is less expensive for the

defendant to pay the troll rather than defend the claim.” McDermott v. Monday,

LLC, No. 17cv9230 (DLC), 2018 U.S. Dist. LEXIS 184049, at *5 (S.D.N.Y. Oct.

26, 2018). In McDermott, the court held that the use of the term “copyright troll”

was appropriate given 500 settlements out of 700 cases filed, “unorthodox”

litigation tactics, and frivolous claims. /d.

Plaintiffs are deemed to be copyright trolls when they employ “abusive

litigation tactics to extract settlements.” Malibu Media, LLC v. Ramsey, No. 1:14-

cv-718, 2015 U.S. Dist. LEXIS 151273, at *9 (S.D. Ohio May 26, 2015).

Standing alone, initiating multiple copyright infringement actions and attempting to

negotiate settlements does not indicate copyright misuse or copyright trolling.

Energy Intelligence Grp., Inc. v. CHS McPherson Refinery, Inc., 300 F. Supp. 3d

1356, 1374 (D. Kan. 2018). In one of the many Malibu Media cases, the court

noted that, “[i]t is certainly true that [the plaintiff] has filed a very large number of

infringement suits in this district and in others. But that is what the holders of

intellectual property rights do when they are faced with mass infringement.”

Malibu Media, LLC v. Doe, No. 13 C 3648, 2014 U.S. Dist. LEXIS 77929, at *6

(N.D. Ill. June 9, 2014). Although a large number of actions for infringement may

be relevant to determination of a plaintiff's status as a copyright troll, volume alone

is not dispositive.

Here, the Court finds no evidence that FPM is a copyright troll. FPM has not

employed unorthodox litigation tactics or made material misstatements in an effort

to intimidate Arbogast. Moreover, although FPM has been a party to 41 similar

those who have been labeled as copyright trolls. For example, Design Basics

initiated over 80 cases on infringement claims that covered unprotected elements

of the copyrights in question and the plaintiff in McDermott initiated some 700

cases that were described as “unorthodox” or “frivolous.” FPM seeks only to

protect its copyrighted works from infringement.

Moreover, the evidence does not show that FPM is focused on the business

of litigation. FPM is primarily concerned with providing licenses to businesses for

the use of its music. In fact, other businesses have been purchasing licenses since

2001 when the company was founded. FPM notes that it has issued over 3.5

million legitimate licenses since July 2013, yet it has filed only a few dozen

lawsuits alleging copyright infringement. Doc. #58, PagelD#1876. Although FPM

may be aggressive in its protection of legitimate copyrights, the Court finds that

FPM is not a copyright troll and has not misused its copyrights.

3. Equitable Estoppel

Finally, Arbogast argues that equitable estoppel is an appropriate defense to

infringement in this case. Arbogast maintains that FPM, using TuneSat as a tool,

set up a bait-and-switch scheme that induced Arbogast into infringing FPM's

copyrights.

In order to invoke equitable estoppel, defendants must prove each of the

following: “(1) the plaintiff must know the facts of the infringing conduct; (2) the

plaintiff must intend that its conduct shall be acted on or must so act that the

defendant has a right to believe that it is so intended; (3) the defendant must be

ignorant of the true facts; and (4) the defendant must rely on the plaintiff's

conduct to its injury.” Design Basics, LLC v. Chelsea Lumber Co., 977 F. Supp. 2d

714, 736 (E.D. Mich. 2013). “It is also well-settled that a plaintiff may be

estopped from asserting his rights under a copyright if he has aided the defendant

in infringing or otherwise induced it to infringe or has committed covert acts.”

Quinn v. City of Detroit, 23 F. Supp. 2d 741, 753 (E.D. Mich. 1998). "In order to

prevail on the defense of equitable estoppel the defendant must have been misled

into reasonably and justifiably believing that the plaintiff would not pursue his

claims against the defendant." Encyclopedia Brown Prods. v. Home Box Office, No.

91 Civ. 4092 (PKL), 1994 U.S. Dist. LEXIS 21372, at *39 (S.D.N.Y. Aug. 24,

1994),

The court finds that equitable estoppel is inapplicable in this case. There is

no evidence that Arbogast was reasonably and justifiably mislead into believing

that FPM would not pursue a claim for copyright infringement. There is no

evidence that FPM intended Arbogast to act on a misleading notion that the music

was free to use for business purposes, nor did Arbogast justifiably believe that the

music was free to use in business advertisements. In fact, the evidence

demonstrates that FPM always intended to require a license for business use. The

facts also demonstrate that Arbogast had constructive notice of the terms and

conditions of the usage of the music because of the clear and visible browsewrap

agreement. Thus, Arbogast’s equitable estoppel defense fails as a matter of law.

IV. Conclusion

For the reasons set forth above, the Court OVERRULES Defendant’s Motion

for Summary Judgment or for Referral of Issues to Register of Copyrights, Doc.

#52, and SUSTAINS Plaintiff's Motion for Summary Judgment on Liability for

This leaves for trial only the question of damages. The Court directs the

parties to file a joint Amended Rule 26(f) Report no later than October 23, 2019. A

conference call will be held on October 30, 2019, at 4:30 p.m. to set a trial date

and other deadlines.

Date: September 24, 2019 Saanrt} NG

WALTER H. RICE

UNITED STATES DISTRICT JUDGE

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.