EMI v. Karen Records: Willful Infringement After License Termination

In August 2011, the New York District Court found that selling music after receiving a notice terminating a license to use a copyrighted work constitutes willful infringement.

In EMI Entertainment v. Karen Records, Inc. et al, No. 1:05-cv-00390 (S.D.N.Y. Aug. 26, 2011), EMI brought a suit alleging that defendants infringed EMI’s copyright by selling four compositions without payment of royalties and after EMI terminated the defendants’ license.

In a tumultuous relationship, with the parties having a history of royalty disputes, this lawsuit began in 2004 when the Harry Fox Agency (HFA) sent defendants a letter complaining of unpaid royalties.  In the letter, HFA stated that the defendants’ license to sell the four compositions in dispute would be terminated within 30 days if the owed royalties were not paid.

As the defendants failed to make sufficient royalty payments, the court found the defendants to have infringed EMI’s copyright.  Looking at the defendants’ “industry experience and copyright ownership; prior lawsuits regarding similar practices; and a specific warning,” the court additionally found the defendants’ infringing behavior to have been willful.

The court awarded EMI $25,000 in damages for each composition, totaling $100,000, and held defendants jointly and severally liable as the defendants each had the right and ability to supervise, and as each had a direct financial interest, in the infringing activity.

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