In August 1977, Popovich signed a contract with recording artist Michael Lee Aday, a/k/a “Meat Loaf.” CBS released Meat Loaf’s first album, “Bat Out of Hell” selling more than 30 million copies worldwide. CBS released three subsequent Meat Loaf albums, all covered by the 1977 Agreement.
In 1995, Cleveland sued Sony for unpaid royalties due under the 1977 Agreement. Sony and Cleveland entered into a Settlement Agreement (“1998 Agreement”), whereby the parties agreed that Sony would continue to display the CIR logo on Meat Loaf’s “Bat Out of Hell” and other albums.
In 2002, Popovich filed an action against Sony alleging reverse passing off (15 U.S.C. §1125(a)(1)(A); 17 U.S.C. §202), asserting that Sony failed to place the CIR logo on Meat Loaf compilation albums and on Meat Loaf albums purchased via Internet downloading. Sony filed a motion for summary judgment arguing that the 1998 Agreement merely ratified the 1977 Agreement and did not grant Popovich any logo placement rights on album compilations or Meat Loaf Internet downloads.
Applying New York law to both agreements, the District Court granted summary judgment in Sony’s favor on Popovich’s reverse passing off claim, and held that the 1998 Agreement unambiguously imposed no logo obligations on Sony for Internet downloads. The Court, however, determined that the 1998 Agreement was ambiguous on the issue of Sony’s logo obligations regarding compilations and sent the issue to the jury for trial.
The jury found that the 1998 Settlement Agreement obligated Sony to place the CIR logo on compilations, and awarded Popovich over $5 million in damages. The District Court entered judgment on the verdict.
Both parties appealed. Sony argued that its logo obligations did not cover compilations and that Popovich was not entitled to damages. Popovich argued that the 1998 Agreement required that the CIR logo appear on Internet downloads.
The Sixth Circuit affirmed. The 1977 Agreement obligated Sony to display the CIR logo on “phonograph records,” defined as “all forms of reproductions now or hereafter known.” The 1998 Agreement required Sony to place the CIR logo “on albums, CDs, cassettes, and all other forms and configurations of master recordings embodied on the albums,” and to “continue to place” the CIR logo on albums. The word “continue” constituted a jury question as to whether the parties merely reaffirmed the 1977 Agreement in the 1998 Agreement.
Also, the 1998 Agreement unambiguously did not include Internet downloads; the language “all forms and configurations … manufactured by Sony” could not be more reasonably interpreted to include Internet downloads than to exclude them. The Court affirmed the damages verdict for Popovich.
Judge Ralph B. Guy dissented, opining that the 1998 Agreement ratified the 1977 Agreement in all respects and therefore precluded Popovich from obtaining damages for Sony’s partial failure to perform its logo obligations.
Judge(s): Boyce F. Martin, Jr., Circuit Judge
Jurisdiction: U.S. Court of Appeals, Sixth Circuit
Related Categories: Contracts , Copyright , Trademark
|Plaintiff Lawyer(s)||Plaintiff Law Firm(s)|
|Craig P. Kvale||Collins & Scanlon LLP|
|David Webster||Webster & Webster|
|Defendant Lawyer(s)||Defendant Law Firm(s)|
|Anna K. Raske||Benesch Friedlander Coplan & Aronoff LLP|
|Paul Gardephe||Patterson Belknap Webb & Tyler LLP|
|Stephen Williger||Thompson Hine LLP|