Capital C Infringement of Capitol Records

EMI April Music Inc. v. 4MM Games, LLC,
2014 WL 1383468
United States District Court for the Southern District of New York
Memorandum Opinion and Order Adopting Report Issued April 7, 2014

On March 21, 2012, plaintiff EMI Publishing filed a suit for copyright infringement against 4MM Games, LLC (“4MM”). 4MM has not yet responded to the complaint or any notices sent by EMI.

This case relates to the game Def Jam Rapstar, developed by 4MM. Capitol Records is involved in producing, recording, and distributing music and sound records of many well-known artists, including Frank Sinatra, the Beatles, and Katy Perry.  Capitol Records, one of the represented Plaintiffs in the suit, alleges  that Def Jam Rapstar unlawfully infringes Capitol Records’ copyrights in those various musical compositions.

This case appears to relate to a contractual dispute between 4MM and Capitol Records.  In 2009, 4MM approached Capitol, seeking to license Capitol’s music for use in its Def Jam Rapstar video game. As part of the proposed agreement, Capitol’s music would be used in the original game, would be available as additional downloadable content (DLC), and would be used in commercials. While Capitol agreed to license the recordings and sent terms to 4MM, the agreement was never executed. 4MM made no payments to Capitol related to the songs, but nonetheless released Def Jam Rapstar with the Capitol songs included in the game and available as DLC. Capitol sent notice to 4MM of its alleged infringement, but 4MM never responded, and Capitol filed this suit.

As 4MM never responded to the lawsuit, in an order dated January 13, 2014, the District Court judge found 4MM liable for willful infringement. While the Court did not grant Capitol’s requested damages of $1,050,000, the Court still granted $535,125 because of the willful nature of 4MM’s alleged infringement. The Court further awarded pre-judgment interest to Capitol on its statutory copyright damages pending from the date the Complaint was filed through the date of the judgment. The Court also granted injunctive relief to Capitol: given that 4MM had not responded to the Complaint and had continued to infringe the Capitol copyright, the Court found that injunctive relief was appropriate to deter future conduct, by 4MM, that was likely to cause injury. Shortly thereafter, on April 7, 2014, the Court adopted the January order and entered judgment against 4MM.

This case is an important lesson in the value of default judgments: while they can be an unexpected boon for plaintiffs, they can quickly become disastrous for defendants.