(CN) — The 9th Circuit on Wednesday revived for trial claims that Universal Music Group interfered with a small licensing company’s attempt to sell an album of Bob Marley re-mixes, noting the music giant’s “equally spotty” rights to the recordings.
Rock River Communications sued Universal Music Group (UMG) in 2008 after the company sent cease-and-desist letters to various distributors of the album “Roots, Rock, Remixed,” which features 16 early Bob Marley and the Wailers recordings.
Rock River claimed that it had a licensing agreement with San Juan Music Group, which had allegedly received permission to use the tracks from Lee “Scratch” Perry, the famed producer of Marley’s early work.
Nonetheless, Apple took the album off the iTunes store, and Relativity Media lost interest in using a track from the album in the movie “Dear John,” Rock River claimed, alleging intentional interference with prospective economic advantage, among other things.
UMG, which owns Island, the label for which Marley recorded several classic albums in the 1970s, argued that it could not have interfered with Rock River’s business expectancy, as Rock River effectively expected to receive illegal proceeds from a copyright violation.
U.S. District Judge Christina Snyder agreed and granted summary judgment to UMG. The federal appeals court reversed on Wednesday and sent the case back to Los Angeles District Court for trial.
Snyder improperly shifted the burden of proof from UMG to Rock River, a three-judge appeals panel found.
“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,” wrote Judge Raymond Fisher for the panel. “UMG cannot obtain summary judgment based on the holes in Rock River’s claim to a valid license when the validity of its own licensing rights is equally spotty.”
It’s unclear who, if anyone, owns the exclusive rights to the recordings, and it is up to UMG to provide that clarity, the panel found.
“Although the lack of documentation may make it difficult for Rock River to support its position that its chain of licensing rights (from Lee Perry to San Juan to Rock River) is valid, its IIPEA claim cannot be defeated based on the alleged illegality of the expectancy unless UMG affirmatively establishes that illegality,” Fisher wrote.
The panel also rejected UMG’s reasoning that it was immune from the lawsuit because it had been filed in response to cease-and-desist letters — so-called Noerr-Pennington immunity, which can only be used against “sham lawsuits.”
This is not the case with Rock River’s action, the panel found.
While in the beginning of the case Rock River had only the letters to support its claims, subsequent discovery revealed that UMG had known about the “significant holes in its own chain of title” as far back as 2003, according to the ruling.
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