Opinion · Court of Appeals for the Second Circuit
Random House, Inc. v. Rosetta Books LLC and Arthur M. Klebanoff, in His Individual Capacity and as Principal of Rosetta Books LLC
Random House, Inc. v. Rosetta Books LLC & Arthur M. Klebanoff, in His Individual Capacity & as Principal of Rosetta Books LLC, 283 F.3d 490 (2d Cir. 2002)
- Type
- Opinion
- Court
- Court of Appeals for the Second Circuit
- Jurisdiction
- Federal
- Date
- 2002-03-08
- Topic
- litigation
How later courts describe this case
- denying request for preliminary injunction and finding that an exclusive license to "publish, print, and sell . . . copyrighted works 'in book form'" did not include the right to publish the books in digital or electronic format for distribution over the internet
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RANDOM HOUSE, INC. v. ROSETTA BOOKS LLC,283 F.3d 490(2nd Cir. 2002)
RANDOM HOUSE, INC., Plaintiff-Appellant, v. ROSETTA BOOKS LLC and Arthur
M. Klebanoff, in his individual capacity and as principal of Rosetta Books
LLC, Defendants-Appellees.
Docket No. 01-7912.
United States Court of Appeals, Second Circuit.
Argued January 24, 2002.
Decided March 8, 2002.
Roger L. Zissu, Fross Zelnick Lehrman Zissu, P.C. (Michael J. Boni, Robert J. LaRocca, Joanne Zack, Kohn, Swift Graf, P.C., on the brief), New York, NY, Attorneys for Defendants-Appellees.
Proskauer Rose LLP, New York, NY, (Jon A. Baumgarten, Charles S. Sims, on the brief) for Amicus Curiae, The Association of American Publishers, in support of Plaintiff-Appellant.
Cowan, Debaets, Abrahams Sheppard LLP, New York, NY, (David B. Wolf, Laura B. Gilbert, on the brief) for Amicus Curiae, The Authors Guild, Inc. and Association of Authors' Representatives, Inc., in support of Defendants-Appellees.
Before NEWMAN and KEARSE, Circuit Judges, and RAKOFF, District Judge.fn*
A party seeking a preliminary injunction in this Circuit must show: (1) irreparable harm in the absence of the injunction and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor.Id.; ABKCO Music, Inc. v.Stellar Records, Inc.,96 F.3d 60,64(2d Cir. 1996). Because, however, an exclusive licensee can, as here, sue for copyright infringement,see17 U.S.C. § 501(b), and because aprimafaciecase of copyright infringement gives rise to a presumption of irreparable harm, the requirement of proof of irreparable harm can in such a case effectively be met by proof of a likelihood of success on the merits.ABKCO Music, Inc.,96 F.3d at 64.
Here, however, the district court did not abuse its discretion in concluding that appellant had not established the likelihood of its success on the merits. To be sure, there is some appeal to appellant's argument that an "ebook" — a digital book that can be read on a computer screen or electronic device,see RandomHouse, Inc. v. Rosetta Books LLC,150 F.Supp.2d 613,614-15(S.D.N.Y. 2001) — is simply a "form" of a book, and therefore within the coverage of appellant's licenses. But the law of New York, which determines the scope of Random House's contracts, has arguably adopted a restrictive view of the kinds of "new uses" to which an exclusive license may apply when the contracting parties do not expressly provide for coverage of such future forms.SeeTele-Pac, Inc. v. Grainger,168 A.D.2d 11,570 N.Y.S.2d 521(1st Dep't. 1991);but cf. Boosey Hawkes Music Publishers, Ltd. v.Walt Disney Co.,145 F.3d 481,486(2d Cir. 1998);Bartsch v.Metro-Goldwyn-Mayer, Inc.,391 F.2d 150,155(2d Cir. 1968). In any case, determining whether the licenses here in issue extend to ebooks depends on fact-finding regarding,inter alia,the "evolving" technical processes and uses of an ebook,RandomHouse,150 F.Supp.2d at 615n. 5, and the reasonable expectations of the contracting parties "cognizantPage 492of the customs, practices, usages and terminology as generally understood in the . . . trade or business" at the time of contracting,Random House,150 F.Supp.2d at 618(citing Sayersv. Rochester Telephone Corp. Supplemental Management PensionPlan,7 F.3d 1091,1095(2d Cir. 1993)). Without the benefit of the full record to be developed over the course of the litigation, we cannot say the district court abused its discretion in the preliminary way it resolved these mixed questions of law and fact.
As to the alternative way of satisfying at least the second requirement for a preliminary injunction,i.e.,showing sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor, here the balance of hardships tips, if anything, in appellees' favor. For while Random House expresses fears about harm to its goodwill if Rosetta is allowed to proceed with its sale of ebooks, Rosetta, whose entire business is based on the sale of ebooks, raises a reasonable concern that the proposed preliminary injunction will put it out of business or at least eliminate its business as to all authors who have executed similar contracts. As the district court found, such legitimate concerns outweigh any potential hardships to Random House,see Random House,150 F.Supp.2d at 624, which, if it ultimately prevails on the merits, can recover money damages for any lost sales.
Thus, without expressing any view as to the ultimate merits of the case, the Court concludes that the district court did not abuse its discretion in denying Random House's motion for a preliminary injunction, and consequently the judgment is affirmed.
- The Honorable Jed S. Rakoff, United States District Judge for the Southern District of New York, sitting by designation. ↩