Howell O’Rear is a founding partner of the Nashville, Tennessee law firm McInteer & O’Rear PLC. His practice focuses on litigating business, contract, and intellectual property disputes, including copyright infringement actions.
In two recent legal spats involving copyrighted music of Marvin Gaye and the Beastie Boys, the copyright owners found themselves sued by the very parties alleged to be doing the infringing. Yes, you read that right. The alleged bad guy sued the alleged victim. Confused? Don’t be. This type of lawsuit is called a declaratory judgment action. And while any type of lawsuit can be abused, a declaratory judgment action is not as reprehensible as it might seem at first blush.
The basis to file a declaratory judgment lawsuit over a copyright dispute (as well as other matters governed exclusively by federal law) comes from a federal law known as the “Declaratory Judgment Act.” At its core, the act provides federal courts with the authority to decide a dispute between two parties that disagree about their relative rights, duties, or obligations – for example, the right to use a copyrighted song in a commercial.
Not all disputes can be decided under the act, and whether the court will entertain a declaratory judgment lawsuit depends on several factors. Most importantly, a real dispute must actually exist. In other words, a party cannot file a declaratory judgment action in the abstract just to test whether his work infringes the copyright of another. Instead, the copyright owner must put the accused infringer under reasonable apprehension of being sued (which is why the cease-and-desist letter becomes so important).
Compare a cease-and-desist letter to the stereotypical schoolyard brawl. One kid tells the other, “You deserve to be punched, and I plan to punch you in the face … but I’m not telling you when the punch is coming.” In this analogy, the aggressor is like the copyright owner, and he or she may very well have a great reason to punch the other kid – the alleged infringer. Sometimes, however, the aggressor is simply a bully, a control freak, or just plain wrong. Regardless of which, the kid who was threatened has a few options: (1) wait around and hope that the threat was all bark and no bite; (2) try to negotiate, settle the dispute, and explain to the aggressor why the fight should not happen; or (3) ring the bell and throw the first punch – potentially achieving a strategic, tactical advantage over the aggressor, or, at the very least getting the fight over with as soon as possible.
Some people are terrible negotiators, and others do not want to wait around to get punched in the mouth, even if the threat of a fight is indefinite and remains uncertain. GoldieBlox, in addition to Robin Thicke (and other parties), decided to throw the first punch by filing their respective declaratory judgment lawsuits after numerous industry heavyweights accused them of copyright infringement. Keep in mind that a party who sends a cease-and-desist letter always runs the risk that the accused may file a declaratory judgment lawsuit based on that letter simply to obtain home field advantage with the court location. With several notable exceptions, federal courts generally apply the “first to file” rule, which rewards the party who wins the race to the courthouse.
The GoldieBlox and Robin Thicke lawsuits do not accuse the copyright owners of doing something wrong; instead, the lawsuits were filed to get to a decision. (GoldieBlox did not sue the Beastie Boys for any monetary damages, but it is asking the court for an award of attorneys’ fees if successful.) Through their lawsuits, the accused infringers essentially say, “Judge, will you please give us an answer to the question: am I a copyright infringer or not?” Instead of framing the issue as “GoldieBlox sued the Beastie Boys,” think of it as GoldieBlox asking a court to determine that the Beastie Boys’ claim of copyright infringement is baseless.
While GoldieBlox has received a slew of public criticism for filing the lawsuit, declaratory judgment actions are quite common in commercial litigation and other intellectual property areas such as patent law. Often, a business or corporation cannot operate with the uncertainty that it may be sued down the road when profits are high and evergreen (e.g., “Blurred Lines” is going to be around for a while).
A declaratory judgment lawsuit allows an accused infringer to obtain judicial certainty – win or lose – about a vital part of its business or operation, rather than await suit in the future when the potential damage or effect of a lawsuit could be devastating. The declaratory judgment action forces the original aggressor to either settle the dispute or bring a counterclaim for copyright infringement.
Many have opined that GoldieBlox filed the lawsuit as a publicity stunt. Whether or not this opinion is correct, the GoldieBlox video went viral, and the Beastie Boys’ lawyers sent a letter to GoldieBlox demanding that the company cease and desist from infringing the Beastie Boys’ copyrighted works. (It is unclear what, if any, “threat” was contained in the letter to GoldieBlox. The Beastie Boys said they were only inquiring how and why their song had been used in the video.)
As previously reported on Billboard.biz on Nov. 27, 2013, GoldieBlox has removed the Beastie Boys’ song on its advertisement since filing the lawsuit. GoldieBlox wrote in an open letter that it is “ready to stop the lawsuit as long as this means we will no longer be under threat from [Beastie Boys] legal team.” Translation: GoldieBlox will keep the lawsuit alive unless the Beastie Boys promise not to punch back.
Because GoldieBlox’s act of alleged infringement already occurred and GoldieBlox refuses to dismiss the lawsuit, the removal of the song from its video at this point in time is insignificant. The removal of the song, however, does give the parties more flexibility to settle the lawsuit, and it also helps GoldieBlox mitigate potential damages in the event that it loses the lawsuit down the road.
Throwing the first punch does not always equate to victory; indeed, if you do not achieve a knockout punch, you will likely be punched back with a counterclaim of copyright infringement. Yet, by throwing the first punch and filing the declaratory judgment lawsuit, GoldieBlox and Robin Thicke got (1) the first opportunity to tell the story of their case; (2) to choose the location of the lawsuit; and (3) to control the initial direction of the fight, which is often advantageous.
Ultimately, GoldieBlox and Robin Thicke may lose and suffer the consequences; that is the risk a party runs when a decision is made to preemptively take action and file a declaratory judgment lawsuit. After all, the accusers may not have actually filed suit. Nevertheless, the strategic decision to file suit might have improved their position to reach a resolution of the dispute, and, at the very least, ensure that the dispute will ultimately be resolved, win or lose.
Billboard.biz welcomes responsible commentary, submit all guest posts to [email protected]