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Case 2:17-cv-03243 Document 1 Filed 04/28/17 Page 1 of 13 Page ID #:1

1 Peter J. Anderson, Esq., Cal. Bar No. 88891


E-Mail: pja@pjanderson.com
2 LAW OFFICES OF PETER J. ANDERSON
A Professional Corporation
3 100 Wilshire Boulevard, Suite 2010
Santa Monica, CA 90401
4 Tel: (310) 260-6030
Fax: (310) 260-6040
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Attorney for Plaintiff
6 SONY MUSIC ENTERTAINMENT
7 UNITED STATES DISTRICT COURT
8 CENTRAL DISTRICT OF CALIFORNIA
9 WESTERN DIVISION
10 SONY MUSIC ENTERTAINMENT, a ) Case No. 2:17-cv-3243
Delaware General Partnership, )
11 )
Plaintiff, ) COMPLAINT FOR BREACH OF
12 ) CONTRACT; AND DIRECT,
vs. ) CONTRIBUTORY AND
13 ) VICARIOUS COPYRIGHT
APPLEBEES SERVICES, INC., a ) INFRINGEMENT
14 Kansas corporation; and DOES 1 )
through 10, inclusive, ) DEMAND FOR JURY TRIAL
15 )
Defendants. )
16 )
)
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Case 2:17-cv-03243 Document 1 Filed 04/28/17 Page 2 of 13 Page ID #:2

1 Plaintiff Sony Music Entertainment (Sony Music) alleges:


2 JURISDICTION AND VENUE
3 1. The Court has jurisdiction of this action pursuant to:
4 (a) 28 U.S.C. 1332, insofar as the amount in controversy
5 exceeds the sum of $75,000, exclusive of interest and costs, and there is
6 complete diversity between plaintiff, on the one hand, and the named
7 defendant, on the other hand; and, alternatively,
8 (b) 28 U.S.C. 1331 and 1338(a), insofar as it arises under
9 the Copyright Act of 1976, 17 U.S.C. 101 et seq., 28 U.S.C. 1367,
10 and the non-copyright claims are so related to the copyright claim that
11 they form part of the same case or controversy.
12 2. Venue is proper in this District under 28 U.S.C. 1391(b), insofar as at
13 least one defendant resides in this District or, alternatively, under 28 U.S.C.
14 1391(b), insofar as a substantial part of the events or omissions giving rise to the
15 claims occurred in this District, or, alternatively, under 28 U.S.C. 1391(b) or
16 1400, insofar as at least one defendant may be found here.
17 THE PARTIES
18 3. Sony Music is a Delaware general partnership with its principal place of
19 business in the State of New York, and whose two partners are:
20 (a) Sony Music Holdings Inc., which is a Delaware
21 corporation with its principal place of business in the State of New
22 York; and
23 (b) USCO Sub LLC, which is a Delaware limited liability
24 company with its principal place of business in the State of New York,
25 and whose sole member is Sony Music Holdings Inc., a Delaware
26 corporation with its principal place of business in the State of New
27 York.
28 ///
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Case 2:17-cv-03243 Document 1 Filed 04/28/17 Page 3 of 13 Page ID #:3

1 4. Sony Music is informed and believes, and upon that basis alleges, that
2 defendant Applebees Services, Inc. (Applebees Services) is a Kansas corporation
3 with its principal place of business in Glendale, California.
4 5. Sony Music is presently unaware of the true names and/or the
5 involvement of the defendants sued herein by the fictitious designations does 1-10,
6 and for that reason sues them by those designations. Sony Music will seek leave of
7 Court to amend this pleading to identify those defendants when their true names and
8 involvement in the infringements hereinafter described are known.
9 FACTS COMMON TO ALL CLAIMS FOR RELIEF
10 6. Sony Music is a record company and is the owner or exclusive United
11 States licensee of sound recordings containing the performances of some of the most
12 popular and successful recording artists of all time. Sony Music has invested and
13 continues to invest significant money, time, effort and creative talent to create,
14 promote, sell and license its sound recordings.
15 7. Sony Music is, and has been at all relevant times, the exclusive licensee
16 of the rights, including copyright rights, in the United States and elsewhere, to the
17 sound recording titled Rock and Roll Aint Noise Pollution (Rock and Roll) by the
18 musical group AC/DC. The United States Register of Copyrights has issued to Sony
19 Musics licensor, Leidseplein Presse, B.V., Registration Certificate SR 019-392,
20 dated August 4, 1980, for the sound recording copyright in, inter alia, the sound
21 recording Rock and Roll.
22 8. Sony Music owns, and has owned at all relevant times, the copyright in
23 the recording titled Gonna Make You Sweat (Everybody Dance Now) (Everybody
24 Dance Now) by the musical group C+C Music Factory. The United States Register
25 of Copyright has issued to Sony Music Registration Certificate SR 782-730, dated
26 March 3, 2017, for the sound recording copyright in Everybody Dance Now.
27 9. Due to their bulk, copies of the sound recordings Rock and Roll and
28 Everybody Dance Now (the Recordings) are not attached to this Complaint.
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1 10. The exploitation of sound recordings of musical performances can


2 include issuing non-exclusive licenses for the use of sound recordings, or portions of
3 them, in motion pictures, televisions shows, commercials and other audiovisual
4 productions. Obtaining the rights to use a sound recording of a musical performance
5 generally requires obtaining a license from the owner of the sound recording and
6 obtaining a license from the owner or owners of the musical composition embodied
7 in the sound recording. Those seeking licenses often engage music clearance
8 companies who, on their behalf, identify the companies that own or control the
9 sound recordings and musical compositions and then contact those companies to
10 solicit quotes of license terms for the desired uses.
11 11. Generally, the license fee paid for the use of a sound recording is the
12 same amount as the license fee paid for the use of the musical composition
13 embodied in the sound recording. Accordingly, licenses for the use of a sound
14 recording typically provide that the license fee is MFN or most-favored nations,
15 in that the license fee is the greater of (1) the license fee specified for the use of the
16 sound recording and (2) the license fee paid for the use of the musical composition.
17 12. In or about February 2016, Sony Music was contacted by a music
18 clearance company, Music Dealers LLC (Music Dealers), which sought from
19 Sony Music non-exclusive licenses to use portions of the Recordings in commercials
20 advertising Applebees Restaurants. In the course of those discussions, Music
21 Dealers represented to Sony Music that an advertising agency, Barkley Inc.
22 (Barkley), was working with Music Dealers in obtaining licenses to use sound
23 recordings in commercials advertising Applebees Restaurants, and that both Music
24 Dealers and Barkley were acting as agents of defendant Applebees Services in
25 seeking from Sony Music licenses to use the Recordings in those commercials.
26 13. In response to Music Dealers inquiries, Sony Music provided to Music
27 Dealers quotes proposing the terms that Sony Music would accept for the non-
28 exclusive licenses that Music Dealers sought for the use of the Recordings in
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Case 2:17-cv-03243 Document 1 Filed 04/28/17 Page 5 of 13 Page ID #:5

1 commercials advertising Applebees Restaurants. The terms that Sony Music


2 proposed and which Music Dealers advised were acceptable for Sony Musics non-
3 exclusive license of the requested rights to use the Recordings in commercials for
4 Applebees Restaurants, include:
5 (a) the payment to Sony Music of the greater of (i) $250,000
6 and (ii) the amount paid to music publishers for the right to use the
7 musical composition Rock and Roll, with Applebees Services obligated
8 to promptly notify Sony Music if an amount greater than $250,000 was
9 paid for the use of the musical composition Rock and Roll; and
10 (b) the payment to Sony Music of the greater of (i) $50,000
11 and (ii) the amount paid to music publishers for the right to use the
12 musical composition Everybody Dance Now, with Applebees Services
13 obligated to promptly notify Sony Music if an amount greater than
14 $50,000 was paid for the use of the musical composition Everybody
15 Dance Now.
16 14. In or about February 2016, Music Dealers informed Sony Music that
17 the terms were acceptable, including the foregoing payments to Sony Music, and
18 requested that Sony Music provide written licenses for review and comment.
19 15. Pursuant to Music Dealers requests, Sony Music provided for review
20 and comment written licenses of the requested rights for Applebees Services to use
21 the Recordings, and Music Dealers provided comments, including comments that
22 Music Dealers advised Sony Music had been provided by Barkley. Ultimately, the
23 written license prepared for the use of the sound recording Rock and Roll (the Rock
24 and Roll License) and the written license prepared for the use of the sound
25 recording Everybody Dance Now (the Everybody Dance Now License), both of
26 which were approved by Music Dealers and, Music Dealers advised, by Barkley,
27 were directed to Barkley on behalf of Applebees Services, Inc., and included a
28 place for Barkley to sign as agent for APPLEBEES SERVICES, INC.
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Case 2:17-cv-03243 Document 1 Filed 04/28/17 Page 6 of 13 Page ID #:6

1 16. Commercials advertising Applebees Restaurants and incorporating


2 substantial portions of the Recordings were produced and released to the public.
3 17. The commercials use of the Recordings garnered a great deal of
4 attention. By way of example, only, the Applebees Restaurant commercials using
5 Rock and Roll promoted what Applebees Services quoting its Chief Executive
6 Officer, Julia A. Stewart, on Applebees Services website and in Applebees
7 Services official press release described as a transformation of Applebees by
8 the addition of new menu items for sale to the public at nearly 2,000 of its U.S.
9 restaurants. The use of the Recordings in the commercials bears a causal
10 relationship with the revenues of the Applebees Restaurants and, for example,
11 Applebees Services website and official press release also state that [t]he appeal
12 of the spots is further fueled by iconic rock music, including AC/DC's signature
13 Rock n Roll Aint Noise Pollution.
14 18. Despite defendants use of the Recordings to defendants great profit,
15 and despite Sony Musics repeated oral and written requests, the written licenses
16 provided by Sony Music have never been signed and returned to Sony Music and
17 neither the agreed payments nor any portion thereof have ever been paid to Sony
18 Music.
19 19. Instead, Applebees Services and Barkley have refused to pay the
20 license fees to Sony Music, claiming that they paid them to Music Dealers, that
21 Music Dealers was acting as Sony Musics agent and that Music Dealers has gone
22 out of business.
23 20. Applebees Services claim that Music Dealers was acting as Sony
24 Musics agent is pure fiction: among other things, Music Dealers was a music
25 clearance company and was engaged by Applebees Services, directly or through
26 Barkley, to obtain licenses on Applebees Services behalf; the two licenses that
27 Music Dealers sought from Sony Music were only some of the licenses that Music
28 Dealers sought from other record and music publishing companies on Applebees
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1 Services behalf; Music Dealers and Barkley represented that they were acting on
2 behalf of Applebees Services; and Music Dealers fees for its services were paid by
3 Applebees Services, directly or through Barkley, not by Sony Music.
4 21. In short, Applebees Services excuse for not paying Sony Music for
5 the Recordings used in the commercials for Applebees Restaurants is baseless,
6 contrived and in bad faith.
7 FIRST CLAIM FOR RELIEF
8 (For Breach of Contract The Rock and Roll License)
9 (Against Defendant Applebees Services)
10 22. Sony Music refers to and re-alleges each and every allegation contained
11 in paragraphs 1 through 21, both inclusive, above, as if set forth herein.
12 23. Sony Music has performed any and all obligations to be performed by
13 Sony Music, and satisfied any and all conditions to be satisfied by Sony Music,
14 under the Rock and Roll License, or such performance and satisfaction have been
15 excused by reason of Applebees Services breaches and repudiation.
16 24. Applebees Services materially breached and repudiated the Rock and
17 Roll License as alleged above, including by failing to pay Sony Music the license fee
18 of the greater of $250,000 and the amount paid to music publishers for the right to
19 use the musical composition Rock and Roll.
20 25. As a direct and proximate result of the foregoing breaches of contract,
21 Sony Music has been damaged in the amount of at least $250,000, according to
22 proof.
23 SECOND CLAIM FOR RELIEF
24 (For Breach of Contract Everybody Dance Now License)
25 (Against Defendant Applebees Services)
26 26. Sony Music refers to and re-alleges each and every allegation contained
27 in paragraphs 1 through 21, both inclusive, above, as if set forth herein.
28 ///
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1 27. Sony Music has performed any and all obligations to be performed by
2 Sony Music, and satisfied any and all conditions to be satisfied by Sony Music,
3 under the Everybody Dance Now License, or such performance and satisfaction have
4 been excused by reason of Applebees Services breaches and repudiation.
5 28. Applebees Services materially breached and repudiated the Everybody
6 Dance Now License as alleged above and including by failing to pay Sony Music the
7 license fee of the greater of $50,000 and the amount paid to music publishers for the
8 right to use the musical composition Everybody Dance Now.
9 29. As a direct and proximate result of the foregoing breaches of contract,
10 Sony Music has been damaged in the amount of at least $50,000, according to proof.
11 THIRD CLAIM FOR RELIEF
12 (For Direct, Contributory and Vicarious
13 Copyright Infringement Rock and Roll)
14 (Against All Defendants)
15 30. Sony Music refers to and re-alleges each and every allegation contained
16 in paragraphs 1 through 21, both inclusive, above, as if set forth herein.
17 If there is a determination that a non-exclusive license was not granted for the use of
18 the sound recording Rock and Roll, or if there was a non-exclusive license but
19 defendants exploited Rock and Roll after Sony Music terminated the license or
20 exploited Rock and Roll beyond the rights licensed, or all of the foregoing, then
21 defendants have infringed Sony Musics copyright in the sound recording Rock and
22 Roll:
23 (a) by, inter alia reproducing Rock and Roll in copies, by
24 preparing derivative works based upon or incorporating Rock and Roll,
25 by distributing copies of Rock and Roll to the public and/or by publicly
26 performing Rock and Roll;
27 (b) by causing, inducing or purporting to authorize all or some
28 of the foregoing infringements; and/or
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1 (c) by failing to exercise defendants control, authority or


2 ability to avoid or cease the foregoing infringements and profiting
3 therefrom.
4 31. Sony Music is entitled to and requests injunctive relief restraining
5 defendants, and their respective officers, agents and employees, and all persons
6 acting in concert with them, from engaging in any further acts in violation of the
7 copyright laws.
8 32. Sony Music is further entitled to recover from defendants the damages
9 Sony Music has sustained and will sustain, and all gains, direct and indirect profits
10 and advantages obtained by defendants as a result of defendants acts of
11 infringement, or, at Sony Musics election, statutory damages of at least $150,000
12 against each defendant that is individually liable and statutory damages of at least
13 $150,000 against each group of defendants that are jointly and severally liable, for
14 their willful infringements, all according to proof.
15 FOURTH CLAIM FOR RELIEF
16 (For Direct, Contributory and Vicarious
17 Copyright Infringement Everybody Dance Now)
18 (Against All Defendants)
19 33. Sony Music refers to and re-alleges each and every allegation contained
20 in paragraphs 1 through 21, both inclusive, above, as if set forth herein.
21 34. If there is a determination that a non-exclusive license was not granted
22 for the use of the sound recording Everybody Dance Now, or if there was a non-
23 exclusive license but defendants exploited Everybody Dance Now after Sony Music
24 terminated the license or exploited Everybody Dance Now beyond the rights
25 licensed, or all of the foregoing, then defendants have infringed Sony Musics
26 copyright in the sound recording Everybody Dance Now:
27 (a) by, inter alia reproducing Everybody Dance Now in
28 copies, by preparing derivative works based upon or incorporating
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Case 2:17-cv-03243 Document 1 Filed 04/28/17 Page 10 of 13 Page ID #:10

1 Everybody Dance Now, by distributing copies of Everybody Dance


2 Now to the public and/or by publicly performing Everybody Dance
3 Now;
4 (b) by causing, inducing or purporting to authorize all or some
5 of the foregoing infringements; and/or
6 (c) by failing to exercise defendants control, authority or
7 ability to avoid or cease the foregoing infringements and profiting
8 therefrom.
9 35. Sony Music is entitled to and requests injunctive relief restraining
10 defendants, and their respective officers, agents and employees, and all persons
11 acting in concert with them, from engaging in any further acts in violation of the
12 copyright laws.
13 36. Sony Music is further entitled to recover from defendants the damages
14 Sony Music has sustained and will sustain, and all gains, direct and indirect profits
15 and advantages obtained by defendants as a result of defendants acts of
16 infringement, all according to proof.
17 PRAYER
18 WHEREFORE, plaintiff Sony Music Entertainment prays for judgment as
19 follows:
20 1. On the First Claim for breach of the Rock and Roll License, against
21 defendant Applebees Services, Inc., compensatory damages in the amount of at
22 least $250,000, according to proof;
23 2. On the Second Claim for breach of the Everybody Dance Now License,
24 against defendant Applebees Services, Inc., compensatory damages in the amount
25 of at least $50,000, according to proof;
26 ///
27 ///
28 ///
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1 3. On the Third Claim for direct, contributory and vicarious infringement


2 of the copyright in the sound recording Rock and Roll, against all defendants:
3 (a) That defendants, and each of them and their respective
4 agents and servants, be enjoined during the pendency of this action and
5 permanently from infringing, or contributing to the infringement of,
6 plaintiffs copyrights in any manner, and from copying, selling,
7 marketing, distributing, displaying or otherwise exploiting infringing
8 copies or reproductions of any of plaintiffs copyrighted materials, and
9 that defendants be required to deliver up to plaintiff all copies and other
10 materials used in the making of infringing copies or reproductions;
11 (b) That defendants, and each of them, be required to pay
12 plaintiff such damages as plaintiff has sustained in consequence of
13 defendants infringements of plaintiffs copyrights, including but not
14 limited to the injury to the value of plaintiffs property, and all other
15 damages sustained by plaintiff, and to account for and pay to plaintiff all
16 gains, direct and indirect profits and advantages derived by defendants by
17 reason of their infringements, or, at plaintiffs election, statutory damages
18 of at least $150,000 against each defendant that is individually liable and
19 statutory damages of at least $150,000 against each group of defendants
20 that are jointly and severally liable, all according to proof;
21 4. On the Fourth Claim for direct, contributory and vicarious infringement
22 of the copyright in the sound recording Everybody Dance Now, against all
23 defendants:
24 (a) That defendants, and each of them and their respective
25 agents and servants, be enjoined during the pendency of this action and
26 permanently from infringing, or contributing to the infringement of,
27 plaintiffs copyrights in any manner, and from copying, selling,
28 marketing, distributing, displaying or otherwise exploiting infringing
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Case 2:17-cv-03243 Document 1 Filed 04/28/17 Page 12 of 13 Page ID #:12

1 copies or reproductions of any of plaintiffs copyrighted materials, and


2 that defendants be required to deliver up to plaintiff all copies and other
3 materials used in the making of infringing copies or reproductions;
4 (b) That defendants, and each of them, be required to pay
5 plaintiff such damages as plaintiff has sustained in consequence of
6 defendants infringements of plaintiffs copyrights, including but not
7 limited to the injury to the value of plaintiffs property, and all other
8 damages sustained by plaintiff, and to account for and pay to plaintiff all
9 gains, direct and indirect profits and advantages derived by defendants by
10 reason of their infringements, all according to proof;
11 5. For pre-judgment interest on all sums awarded;
12 6. For plaintiffs cost of suit and its attorneys fees; and
13 7. For such other and further relief as the Court deems just and proper.
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15 Dated: April 28, 2017 /s/ Peter J. Anderson
Peter J. Anderson, Esq.
16 LAW OFFICES OF PETER J. ANDERSON
A Professional Corporation
17 Attorney for Plaintiff
SONY MUSIC ENTERTAINMENT
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Case 2:17-cv-03243 Document 1 Filed 04/28/17 Page 13 of 13 Page ID #:13

1 DEMAND FOR JURY TRIAL


2 Plaintiff Sony Music Entertainment respectfully requests trial by jury.
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4 Dated: April 28, 2017 /s/ Peter J. Anderson
Peter J. Anderson, Esq.
5 LAW OFFICES OF PETER J. ANDERSON
A Professional Corporation
6 Attorney for Plaintiff
SONY MUSIC ENTERTAINMENT
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