throbber
Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 1 of 22 Page ID #:2445
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`
`
`Matthew F. Schwartz * Pro Hac Vice
`Brian S. Levenson * Pro Hac Vice
`SCHWARTZ, PONTERIO & LEVENSON, PLLC
`134 West 29th Street, Suite 1006
`New York, New York 10001
`Phone: (212) 714-1200
`Fax: (212) 714-1264
`E-mail: mschwartz@splaw.us
`E-mail: blevenson@splaw.us
`
`Allen Hyman (California State Bar No. 73371)
`LAW OFFICES OF ALLEN HYMAN
`10737 Riverside Drive
`North Hollywood, CA 91602
`Phone: (818) 763-6289
`Fax: (818) 763-4676
`E-mail: lawoffah@aol.com
`
`Oren S. Giskan * Pro Hac Vice
`GISKAN SOLOTAROFF & ANDERSON LLP
`90 Broad Street, 10th Floor
`New York, New York 10004
`Phone: (212) 847-8315
`Fax: (646) 520-3237
`E-mail: ogiskan@gslawny.com
`
`Attorneys for Plaintiffs
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`SA MUSIC, LLC and WILLIAM
`KOLBERT, AS TRUSTEE OF THE
`HAROLD ARLEN TRUST,
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`
`
`
`Plaintiffs,
`
`v.
`APPLE, INC., ISOLATION NETWORK
`INC., GENEPOOL DISTRIBUTION LTD.,
`and IDEAL MUSIC LIMITED,
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` Defendants.
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`Case No. 2:19-cv-4073(JFW)(RAO)
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`SECOND AMENDED
`COMPLAINT FOR
`COPYRIGHT INFRINGEMENT
`AND DEMAND FOR
`JURY TRIAL
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 2 of 22 Page ID #:2446
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`Basis for Jurisdiction
`The Court has jurisdiction over the subject matter of this action pursuant
`1.
`to 28 U.S.C. § 1338(a) because this is an action for copyright infringement arising
`under the Copyright Act of 1976, 17 U.S.C. §§ 101, 106, 115, 501, 602 et seq.
`Introduction
`Plaintiffs are the legal and/or beneficial copyright owners of musical
`2.
`works authored by Harold Arlen one of the premier composers of American music.
`Harold Arlen wrote or co-wrote some of the most popular modern songs,
`3.
`including Over the Rainbow from The Wizard of Oz and many other seminal works
`in the American songbook, including I’ve Got the World on a String, Stormy Weather,
`The Devil and the Deep Blue Sea, Come Rain or Come Shine, Get Happy, Ill Wind
`and It’s Only A Paper Moon.
`The Composition Chart annexed as Exhibit A provides a list of Plaintiffs’
`4.
`copyrighted compositions at issue in this case (the “Subject Compositions”).
`The works of Arlen have been recorded by the most prominent jazz and
`5.
`popular artists of all time, including Art Tatum, Benny Goodman, Billie Holliday,
`Cab Calloway, Charlie Parker, Coleman Hawkins, Count Basie, Dean Martin, Dizzy
`Gillespie, Duke Ellington, Ella Fitzgerald, Etta James, Frank Sinatra, Fred Astaire,
`John Coltrane, Judy Garland, Lena Horne, Louis Armstrong, Miles Davis, Ray
`Charles, and Sarah Vaughan to name only a few. These monumental works of art are,
`quite literally, national treasures.
`These and other recordings of Plaintiffs’ copyrighted musical works
`6.
`have been pirated by the Defendants in this case. Defendants are all players in the
`digital music business that participate in, and jointly profit from, making digital
`phonorecord deliveries (i.e., downloads) of pirated recordings of the Subject
`Compositions.
`Digital phonorecord deliveries of musical recordings constitute a
`7.
`reproduction and distribution of the musical work embodied in the digital recording
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 3 of 22 Page ID #:2447
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`and require a negotiated license from the copyright owner of the musical composition,
`sometimes referred to as a “mechanical license.”
`Defendants have failed to obtain any license that would authorize them
`8.
`to reproduce, distribute, or sell the recordings of the Subject Compositions identified
`on Exhibit B and, as a result, Defendants have infringed Plaintiffs’ exclusive rights of
`reproduction and distribution of the Subject Compositions, under 17 U.S.C. §§ 106(1)
`and 106(3).
`Further, the activity of making digital phonorecord deliveries of pirated
`9.
`recordings of the Subject Compositions does not qualify for a compulsory license
`under Section 115 of the Copyright Act.
`10. A list of the pirated recordings of the Subject Compositions that
`Defendants have reproduced and distributed without authorization, including by
`making digital phonorecord deliveries, and various methods of reproduction and
`distribution, thus far identified, is set forth in the Infringement Chart annexed as
`Exhibit B.
`11. Plaintiffs have thus far identified 33 pirated recordings of the Subject
`Compositions that have been separately reproduced and distributed as digital
`phonorecord deliveries by Defendants as set forth in the Infringement Chart annexed
`as Exhibit B. Defendants have infringed these works in a concerted and distinct
`distribution chain.
`12. To put this case in context, in 2007, Jammie Thomas-Rasset, a single
`mother of four in Brainerd, Minnesota, was found liable, after three separate jury
`trials, for copyright infringement for using file sharing software that enabled the
`unauthorized downloading and distribution of 24 recordings by the Goo Goo Dolls
`and Def Leppard, among others. The juries awarded statutory damages in all three
`trials of up to $80,000 per infringement. The Eighth Circuit Court of Appeals
`ultimately affirmed statutory damages in the amount of $9,250 for each infringed
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 4 of 22 Page ID #:2448
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`recording, for a total award of $222,000. Ms. Thomas-Rassett declared bankruptcy as
`she had “no other option.”
`In 2009, Joel Tenenbaum, a Massachusetts college student, who also
`13.
`used file-sharing software that permitted others to download 30 recordings by Limp
`Bizkit and Blink-182, was found liable and the jury awarded statutory damages of
`$22,500 per recording, for a judgment that totaled $675,000 forcing Mr. Tenenbaum
`to file for Chapter 7 bankruptcy.
`14. Unlike Ms. Thomas-Rassett and Mr. Tenenbaum who were not alleged
`to have sold their infringing recordings or profited from their conduct, Defendants in
`this case have engaged in massive music piracy operation for the purpose of
`generating profits from their sales of pirated recordings and by other means.
`15. The copyright infringement operation detailed in this Complaint is only
`the latest in a long line of piracy schemes that have plagued composers, publishers,
`and record labels since the inception of the music industry over 100 years ago, when
`the perforated rolls used by player pianos to perform musical works were pirated. See
`Aeolian Co. v. Royal Music Co., 196 F. 926 (W.D.N.Y. 1912).
`16. As the technology employed by the music industry to reproduce musical
`works advanced, bootlegging efforts by music pirates kept pace. In the 1960s and
`1970s, organized criminal enterprises engaged in record and tape piracy operations
`on a scale that is dwarfed by the infringing conduct explained herein. Like the
`Defendants in this case, the “tape pirates” and “record pirates” of years past
`unlawfully duplicated popular pre-existing recordings, and then claimed their liability
`was limited by the compulsory license provision of the 1909 Copyright Act, Section
`1(e).
`
`17. The landmark case Duchess Music Corp. v. Stern, 458 F.2d 1305 (9th Cir.
`1972) settled the issue as to whether tape pirates could limit their liability for piracy
`under the compulsory license provision of the 1909 Copyright Act. In Duchess, the
`defendant tape pirate engaged in the same conduct identified in this Complaint, and
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 5 of 22 Page ID #:2449
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`claimed her conduct was lawful because the compulsory license provision of the
`Copyright Act authorized the reproduction and distribution of the musical works
`embodied on the recordings she pirated. The Ninth Circuit rejected the argument,
`stating, “She may not continue her piracy under the flag of compulsory licensing.”
`The Duchess court concluded that the tape pirates’ activity was ineligible for a
`compulsory license and that reproduction of a musical composition on a pirated
`recording infringed the copyright in the composition, even when a compulsory license
`was claimed.1
`18. The holding in Duchess was codified when the Copyright Act was
`revised in 1976. The statutory bar against compulsory licensing of pirated recordings
`continues in the recent amendments to Section 115 of the Copyright Act, which
`provides that reproduction and distribution of pirated sound recordings is an activity
`that is ineligible for a compulsory license.
`19. Defendants are nothing more than modern tape pirates flying the flag of
`compulsory licensing. Their conduct constitutes willful copyright infringement of the
`Subject Compositions in violation of the United States Copyright Act [17 U.S.C. §§
`101, 106, 115, 501, 602 et seq.] (the “Copyright Act”).
`The Parties
`SA Music, LLC
`20. Plaintiff SA Music, LLC is a Nevada limited liability company and Sam
`Arlen is the sole member of the company.
`
`
`1 The criminal conduct of “tape pirates” became a priority of the Attorney General of the
`United States, Edward H. Levi, in 1975 when the Justice Department determined that decisions
`reached by four Circuit Courts of Appeals, including the Ninth Circuit in Duchess, rendered tape
`pirates criminally liable even where the statutory royalty was tendered. See Heilman v. Levi, 391
`F.Supp. 1106 (E.D.Wisc. 1975). Criminal copyright infringement sentences continue to this day.
`See Matter of Zaragoza-Vaquero, 26 I&N Dec. 814 (BIA 2016)(defendant sentenced to 33 months
`in prison and ordered to be removed from the United States for selling bootleg copies of music
`CDs at a Florida flea market, as a crime involving moral turpitude).
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 6 of 22 Page ID #:2450
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`The Harold Arlen Trust
`21. Plaintiff William Kolbert is the Trustee of the Harold Arlen Trust (the
`“Harold Arlen Trust”), a trust created by Harold Arlen in his will. Sam Arlen is a
`beneficiary of the trust.
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`Apple
`22. Upon information and belief, Defendant Apple, Inc (“Apple”) is a
`corporation organized under the laws of the State of California with a place of
`business at 1 Apple Park Way in Cupertino, California.
`23. Apple owns and operates the U.S. iTunes Store (“iTunes”), a digital
`music store that sells permanent downloads. iTunes opened in April 2003 and has
`been the largest music vendor in the United States since April 2008 and the largest
`music vendor in the world since February 2010. As of January 2017, the iTunes Store
`offered between 35–40 million recordings for download.
`24. Apple specifically selected and contracted with Ingrooves and/or
`Genepool to provide its digital music catalog to be sold in its iTunes store on
`negotiated financial terms.
`25. Apple reproduced and distributed pirated recordings of the Subject
`Compositions it received from Ideal Music and/or Ingrooves and/or Genepool as
`permanent downlaods among other types of digital phonorecord deliveries.
`Ingrooves
`26. Upon information and belief, Defendant Isolation Network Inc.
`(“Ingrooves”) is a corporation organized under the laws of the State of California with
`a place of business at 15821 Ventura Blvd # 420, Encino, CA.
`Ingrooves engages in the distribution of digital music to the iTunes store
`27.
`and has delivered thousands of recordings to iTunes for sale throughout the U.S..
`Ingrooves specifically selected and contracted to provide the Genepool
`28.
`and/or Ideal Music digital music catalog to be sold in Apple’s iTunes store on
`negotiated financial terms.
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 7 of 22 Page ID #:2451
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`Ingrooves unlawfully reproduced and distributed the pirated recordings
`29.
`of the Subject Compositions and distributed them to Apple, at the directon of Ideal
`Music and/or Genepool, and unlawfully authorized Apple’s making of digital
`phonorecord deliveries in the iTunes store, at their direction, as specifically set forth
`in Exhibit B.
`
`Genepool
`30. Upon information and belief, Defendant Genepool Distribution Ltd.
`(“Genepool”) is a business entity organized under the laws of the United Kingdom
`with a place of business at 8 Bovisand Court, Bovisand, Plymouth, Devon, PL9 0AD,
`United Kingdom.
`31. Genepool engages in the distribution of digital music to the iTunes store
`and has delivered thousands of recordings to iTunes for sale throughout the U.S..
`32. Genepool specifically selected and contracted with Genepool and
`Ingrooves to provide the Ideal Music digital music catalog to be sold in Apple’s
`iTunes store on negotiated financial terms.
`33. Genepool unlawfully reproduced and distributed the pirated recordings
`of the Subject Compositions to Ingrooves and/or Apple, at the directon of Ideal Music
`and unlawfully authorized Ingrooves and Apple to make digital phonorecord
`deliveries in the iTunes store, as specifically set forth in Exhibit B.
`Ideal Music
`34. Upon information and belief, Defendant Ideal Music Limited (“Ideal
`Music”) is a business entity organized under the laws of the United Kingdom with a
`place of business at 10 Wades Grove, London, N21 1BH.
`Ideal Music has made pirated copies of recordings embodying the
`35.
`Subject Compositions, distributed them to Ingrooves and/or Genepool and/or Apple,
`unlawfully authorized Ingrooves and/or Genepool’s distribution and delivery of the
`pirated recordings to Apple for sale in its iTunes store, and unlawfully authorized
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 8 of 22 Page ID #:2452
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`Ingrooves and/or Genepool and Apple’s making of digital phonorecord deliveries in
`Apple’s iTunes store as specifically set forth in the annexed Exhibit B.
`36. Upon information and belief, Ideal Music is simply duplicating
`recordings of the Subject Compositions made by others without permission and
`authorizing Ingrooves and/or Genepool and Apple to sell reproductions of the pirated
`copies for profit in iTunes.
`Jurisdiction, Venue and Joinder
`37. This Court has personal jurisdiction over Defendants because they are
`incorporated in California and/or have a principal place of business in this Judicial
`District and/or purposefully availed or directed their infringing activities in
`California. Ingrooves is a California corporation and has its principal place of business
`in this district. Apple is incorporated in California and has its principal offices in the
`state.
`38. Further, Plaintiffs’ copyright infringement claims arise out of (a) the
`reproduction and distribution of pirated recordings of the Subject Compositions listed
`in Exhibit B, occurring in California, directly by Defendants and/or at their purposeful
`direction and availment, including the sale of pirated recordings of Subject
`Compositions to California residents; or (b) transactions consummated within
`California concerning reproduction, distribution and delivery of the pirated recordings
`of the Subject Compositions.
`Ideal Music intentionally directed its distributor, Ingrooves and/or
`39.
`Genepool, to distribute the pirated recordings to Apple for sale in its iTunes store.
`40. Genepool intentionally distributed and delivered the pirated recordings
`identified in Exhibit B to Ingrooves and expressly aimed its infringing conduct at this
`jurisdiction by specifically selecting and consummating transactions with Ingrooves
`and Apple to reproduce and distribute pirated recordings of Subject Compositions.
`Ingrooves and/or Genepool intentionally distributed and delivered the
`41.
`pirated recordings of the Subject Compositions identified in Exhibit B to Apple, and
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 9 of 22 Page ID #:2453
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`unlawfully authorized Apple to reproduce these pirated recordings of the Subject
`Compositions in its iTunes store and to sell permanent downloads to California
`consumers. Ingrooves and/or Genepool and Ideal Music receive royalties and royalty
`statements for all of Apple’s sales of permanent downloads of the pirated recordings
`of the Subject Compositions in the iTunes store.
`42. Apple reproduced the pirated recordings of the Subject Compositions
`and made available, distributed, and sold the pirated recordings of the Subject
`Compositions to Californians in its iTunes store.
`43. Venue is proper in this District pursuant to 28 U.S.C §§ 1391(b), 1391(c)
`and 1400(a) because Ingrooves has its principal place of business in this district. In
`addition, Defendants are subject to personal jurisdiction in this Judicial District and
`have committed unlawful acts of infringement in this Judicial District.
`Joinder of Ideal Music, Ingrooves and/or Genepool and Apple is proper
`44.
`under Fed. R. Civ. P. 20 because Defendants are jointly and severally liable as
`members of a distinct distribution chain for the acts of copyright infringement
`identified herein.
`
`Harold Arlen
`45. Harold Arlen (1905–1986) was a master composer and a highly regarded
`contributor to the Great American Songbook. The son of a synagogue cantor, Arlen
`was born in Buffalo, New York and emerged as one of the greatest American
`composers and songwriters, writing extraordinarily complex melodies and harmonies
`that remained accessible to a broad popular audience.
`46. Early in his career, Arlen wrote songs for musicals, including the entire
`scores for Broadway shows such as Cotton Club Parade, Life Begins at 8:40, Bloomer
`Girl, St. Louis Woman, Jamaica and Saratoga, among others.
`47. Arlen was also active in Hollywood and composed the music for some
`of the greatest film musicals of all time, most notably all the music in the 1939 motion
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`picture classic “The Wizard of Oz,” including Ding, Dong! The Witch Is Dead, We're
`Off To See The Wizard, and Over The Rainbow.
`48. Over The Rainbow, performed by Judy Garland in the film, won the
`Academy Award for Best Original Song. The song is one of the most enduring
`standards of the 20th century and was voted number one on the "Songs of the Century"
`list compiled by the Recording Industry Association of America and the National
`Endowment for the Arts. The American Film Institute also ranked Over The Rainbow
`the greatest movie song of all time.
`49. Arlen successfully collaborated with the greatest of the Tin Pan Alley
`lyricists, including E.Y. “Yip” Harburg, Ira Gershwin, Johnny Mercer, Leo Robin and
`Ted Koehler.
`50. Arlen’s partnership with Harburg extended over many decades. With
`Billy Rose, they wrote It's Only A Paper Moon in 1933. They followed up with a
`successful revue, Life Begins at 8:40, which included lyric collaborations with his old
`friend, Ira Gershwin, including Fun to Be Fooled, You're A Builder Upper, and Let's
`Take A Walk Around The Block.
`51. Arlen was inducted into the Songwriters Hall of Fame in 1971 and was
`honored with its highest accolade, the Johnny Mercer Award, in 1982.
`In 1996, Arlen was honored and memorialized by the United States
`52.
`Postal Service with his own stamp:
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 11 of 22 Page ID
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`SA Music LLC and the Harold Arlen Trust
`53. Harold Arlen’s son, Sam Arlen, acquired the U.S. copyrights in the
`Subject Compositions between 1989 and 2013, by termination notices that he, as sole
`statutory heir under Section 304 of the Copyright Act of 1976, served and filed with
`Copyright Office.
`In 2018, Sam Arlen assigned the U.S. copyrights in the Subject
`54.
`Compositions, as set forth in the Composition Chart annexed as Exhibit A, along with
`all accrued causes of action, to his company, SA Music, LLC. SA Music, LLC is the
`legal and/or beneficial owner of the U.S. copyright in certain of the Subject
`Compositions as identified in Exhibit A, along with all accrued causes of action.
` Plaintiff Harold Arlen Trust acquired the U.S. copyrights identified in
`55.
`the Composition Chart annexed as Exhibit A by operation of will and through
`termination notices served and filed by Harold Arlen during his lifetime with the U.S.
`Copyright Office under Section 304 of the Copyright Act of 1976.
`56. Plaintiff Harold Arlen Trust is the legal owner of certain of the U.S.
`copyright in certain of the Subject Compositions as identified in Exhibit A, along with
`all accrued causes of action.
`The Subject Compositions
`57. Plaintiffs are the owner of the musical compositions listed in the
`Composition Chart annexed as Exhibit A (collectively, the “Subject Compositions”)
`that are the subject of this action.
`58. The copyrights for all the Subject Compositions have been registered and
`renewed with the U.S. Copyright Office, and each Subject Composition is the subject
`of a valid U.S. copyright. The Composition Chart annexed as Exhibit A identifies the
`copyright registration numbers for each of the Subject Compositions.
`59. Plaintiffs are the owner of a share in each of the Subject Compositions
`in the percentages listed on Exhibit A.
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`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`

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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 12 of 22 Page ID
` #:2456
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`60. As discussed more fully below, the Defendants have infringed, and are
`continuing to infringe, the copyright in each of the Subject Compositions by willfully
`reproducing and distributing them without a license.
`Background
`61. Before digital music distribution, recorded music was physically
`distributed through brick-and-mortar stores that were confined by the limitations of
`shelf space. Recording artists signed exclusive recording contracts with record labels
`in order to have their records pressed and distributed in national record stores.
`It is hard to imagine that a person walking into Tower Records, off the
`62.
`street, with arms full of CDs and vinyl records and claiming to be the record label for
`Frank Sinatra, Louis Armstrong and Ella Fitzgerald, could succeed in having that
`store sell their copies directly next to the same albums released by legendary record
`labels, Capitol, RCA and Columbia, and at a lower price.
`63. Yet, this exact practice occurs every day in the digital music business,
`where there is unlimited digital shelf space (for example, there are more than 40
`million recordings in the iTunes store) and a complete willingness by the digital music
`stores to seek popular and iconic recordings from any source, legitimate or not,
`provided they participate in sharing the proceeds.
`64. The iconic status of the pirated recordings of the Subject Compositions
`at issue in this case cannot be overstated. Any list of the most popular singers and
`musicians of any period between 1930 and 1970 would be replete with the artists who
`have recorded Plaintiffs’ musical works, some of them multiple times.
`65. All the recordings on the Infringement Chart (Exh. B) embodying the
`Subject Compositions are pirated copies, or “bootlegs.” Defendants’ digital
`phonorecord deliveries of these pirated copies were all made without authorization
`from the copyright owners of the sound recordings or those who originally “fixed”
`them as required by Section 115 (discussed below), and the copyright owners of the
`Subject Compositions.
`
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`12
`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 13 of 22 Page ID
` #:2457
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`66. Defendants all generate illicit revenue for themselves when these and
`other pirated copies are sold or distributed. Plaintiffs have not authorized any
`reproduction or distribution of these pirate recordings of the Subject Compositions
`(or any identified on Exhibit B) and it is an infringement for which all the Defendants
`are jointly and severally liable.
`The Pirated Recordings
`67. For all of the infringements identified in Exhibit B, Defendants have
`taken recordings of the Subject Compositions – in which they hold no rights – and
`reproduced and distributed pirated copies of them to the public, for profit, without
`authorization.
`68. Virtually all of the recordings at issue in this case were originally made
`between 1930 and 1972. Because of the consolidation in the music industry, many of
`the record labels that originally released these recordings have been acquired or
`otherwise consolidated by the three remaining major labels, Sony, Universal, and
`Warner, and their catalogs were absorbed into the major labels’ “back catalog.” This
`consolidation occurred well before the first digital music stores started operating in
`the early 2000s.
`69. Since Ideal Music did not exist prior to 1999, and it did not originally
`“fix” any of the relevant recordings, the only way for it to acquire the rights to
`duplicate and distribute them would be to purchase or license rights in these
`recordings.
`70. Upon information and belief, Ideal Music never acquired permission or
`the rights to reproduce or distribute any of these back-catalog recordings from the
`major labels.
`71. Upon information and belief, all of the Defendants are simply
`duplicating pirated records of the Subject Compositions made by others without
`permission and selling the pirated copies for profit.
`
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`13
`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
`
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`

`

`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 14 of 22 Page ID
` #:2458
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`Defendants Have Infringed the Subject Compositions
`72. Section 115 of the Copyright Act expressly excludes Defendants’
`activity of making the digital phonorecord deliveries identified herein of pirated
`recordings of the Subject Compositions from eligibility for a compulsory license and
`Defendants have failed to obtain any licenses for the Subject Compositions that
`authorize such activity.
`73. Upon information and belief, some Defendants may have attempted to
`obtain licenses to make digital phonorecord deliveries of the pirated recordings of the
`Subject Compositions identified on the Infringement Chart from the Harry Fox
`Agency (“Harry Fox” or “HFA”).
`74. Harry Fox licenses, however, adopt the terms of Section 115 and are
`therefore not available for pirated recordings.
`In addition, upon information and belief, some Defendants may have
`75.
`engaged third party services such as Music Reports, Inc., to obtain compulsory
`licenses for digital phonorecord deliveries the Online Defendants make, however, the
`activity of making digital phonorecord deliveries of pirated recordings of the Subject
`Compositions is not eligible for a compulsory license so any such attempt is
`ineffective.
`Unauthorized Methods of Digital Phonorecord Deliveries
`76. The Infringement Chart annexed as Exhibit B sets forth (1) each pirated
`recording of the Subject Compositions within the Ideal Music, Ingrooves and/or
`Genepool, Apple distribution chain, thus far identified by Plaintiffs that these
`Defendants have reproduced, distributed, and/or made available for digital
`phonorecord deliveries in Apple’s iTunes store without authorization and (2) the
`specific types of reproductions, distributions, and/or digital phonorecord deliveries
`made (“Method”).
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`14
`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
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`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 15 of 22 Page ID
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`77. The various types of unauthorized reproductions, distributions, and/or
`digital phonorecord delivery configurations of pirated recordings of the Subject
`Compositions made and/or authorized by Defendants (the “Methods” in Exhibit B)
`are discussed briefly below.
`
`Permanent Downloads
`78. Permanent download means a digital transmission of a sound recording
`of a musical work in the form of a download, where such sound recording is accessible
`for listening without restriction as to the amount of time or number of times it may be
`accessed.
`79. Apple has made available, reproduced, and distributed permanent
`downloads of the pirated recordings of the Subject Compositions to their customers
`(“PD” on the Infringement Chart) and was unlawfully authorized and directed to do
`so by Ideal Music and/or Ingrooves and/or Genepool.
`80. Permanent downloads of pirated recordings of the Subject Compositions
`require licenses from the copyright owners of the Subject Compositions and all of the
`Defendants failed to obtain such licenses for each entry on the Infringement Chart at
`Exhibit B.
`81. The reproduction and distribution of permanent downloads of pirated
`recordings of the Subject Compositions by Defendants, and their authorization of this
`activity, infringes Plaintiffs’ exclusive reproduction and distribution rights under 17
`U.S.C. § 106(1) and (3).
`
`Promotional Clips
`82. Apple’s iTunes store has a feature that allows users to interactively
`stream a sample, promotional clip, of the recordings that are available for sale as
`permanent downloads.
`83. These promotional clips (“PC” on the Infringement Charts) are 30–90
`seconds long and their purpose is to encourage the purchase of the tracks as permanent
`downloads.
`
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`15
`SECOND AMENDED COMPLAINT FOR COPYRIGHT INFRINGEMENT AND DEMAND FOR JURY TRIAL
`CASE NO. 2:19-CV-4073 (JFW)(RAO)
`
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`

`

`Case 2:19-cv-04073-JFW-RAO Document 224 Filed 09/17/19 Page 16 of 22 Page ID
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