A record producing company can pursue its lawsuit against Universal Music Group Inc. over licensing rights to several early recordings by reggae legends Bob Marley and the Wailers, a federal appeals court has ruled.
The U.S. Court of Appeals for the Ninth Circuit found on Wednesday that UMG may have violated California law by threatening to sue distributors of Rock River Communications Inc.’s Marley remix album. The panel reversed a summary judgment decision for UMG, remanding the case for trial.
Rock River attorney Donald Falk, a partner at Mayer Brown in Palo Alto, Calif., provided a formal statement: "We are pleased with the decision and look forward to presenting our case at trial."
Kelly Klaus, a partner at Munger, Tolles & Olson in San Francisco who represents UMG, did not return a call for comment about whether his client would seek a rehearing.
Rock River had a 2006 agreement with Marley’s longtime licensing firm, San Juan Music Group Ltd., to use 16 Marley songs. The planned remix album, titled Roots, Rock, Remixed, featured 12 of those songs and was available via iTunes and in stores. A remix of one of the songs, Lively Up Yourself, was planned for use on the soundtrack of the 2010 motion picture Dear John.
In 2007, UMG, which claimed to have bought the licensing rights to the songs from JAD Records in 2003, sent cease-and-desist letters to Rock River and threatened its business partners, including Apple Inc., with litigation.
Rock River sued UMG in 2008.
U.S. District Judge Christina Snyder, in granting summary judgment, agreed with UMG on April 27, 2011, that Rock River needed to prove its licensing rights were valid to bring a claim of intentional interference with prospective economic advantage under California law.
"UMG is only half right," Raymond Fisher wrote for the panel. "Although there can be no liability for interfering with a business expectancy that is invalid or illegal, the defendant has the burden to prove the invalidity or illegality of the business expectancy. UMG cannot obtain summary judgment based on the holes in Rock River’s claim to a valid license when the validity of UMG’s own licensing rights is equally spotty."
The panel noted that keeping close business records was given little importance in Jamaica at the time Marley’s songs initially were recorded during the 1960s. "The absence of legal documentation has led to confusion in the marketplace as to which entities own licensing rights for these recordings," Fisher wrote.
The panel upheld a portion of the ruling finding that UMG could not assert an immunity defense based on its threatening letters.
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