Intellectual Property

To Subtitle, or Not to Subtitle: That Is the Copyright Question - District Court Holds that Subtitle-Elective Russian DVDs Do Not Infringe Russian-Language-Only DVDs

The licensed distribution of Russian DVDs without a subtitle "shut off" did not infringe a separate copyright license to distribute Russian-language-only DVDs, according to a recent decision from the Eastern District of New York.

In Russian Entm't Wholesale, Inc. v. Close-Up Int'l, Inc., 2011 U.S. Dist. LEXIS 23419 (E.D.N.Y. Mar. 3, 2011) [enhanced version available to subscribers], the plaintiff, Close-Up, which owned a license to distribute Russian films in a Russian-language-only format, sued defendants, collectively referred to as the Ruscico defendants. The defendants owned a license from the same licensor to distribute the same films - but with subtitles.

Plaintiff based its infringement claim on the defendants' failure to include a mechanism that prevented viewers from turning off subtitles. In addressing the claim, the court stated:

The issue is simple to state but difficult to resolve. ... The problem is that neither the licensor nor the two licensees, when they granted and obtained their respective rights, considered an obvious fact - a viewer can turn off the subtitles unless special protection is built into the films to prevent that.

The court held that the plaintiff could only sue for infringement of the limited rights for which it was granted exclusivity, namely, the Russian-language-only rights. Because defendants' DVDs were all multilingual versions of the films, not Russian-language-only, plaintiff could not sue for infringement of its limited exclusive rights. The court noted that the mere fact that defendants' DVDs might compete with plaintiff's DVDs for some portion of the market did not necessarily mean that defendants infringed plaintiff's rights. The court went on to hold that:

The evidence presented at trial proves that Mosfilm and Lenfilm elected to grant a "Russian language only" right to one licensee, and a separate "multilingual" right to another. The rights-holders did not consider sales of the multilingual DVDs manufactured by the Ruscico defendants to violate the "Russian language only" license .... Instead, they considered the multilingual DVDs to be a distinct line of products, geared towards the separate non-Russian-speaking market. Whereas Russian speakers would be willing to purchase Russian-only DVD copies of the films, non-Russian speakers would pay a premium to purchase DVD copies that contain foreign language subtitles and/or dubbing. In this way, the non-Russian-speaking market would subsidize the Ruscico defendants for the expense of having to added foreign-language subtitles and dubbing to the films.

Because Mosfilm and Lenfilm chose to split up Russian-language-only DVD rights and multilingual DVD rights between two different licensees, plaintiff's rights are limited to the Russian-language-only rights .... And because plaintiff may only sue for infringement of the limited rights that it possesses, plaintiff is unable to satisfy the second element of a copyright infringement claim, namely, that the defendant copied the constituent elements of the protected work. Plaintiff has failed to put forth any evidence that defendants ever produced or distributed works that infringed plaintiff's limited rights in Russian-language-only DVDs of the Subject Works. Instead, the evidence shows that all of the DVDs produced and distributed by defendants were multilingual DVDs, which Mosfilm and Lenfilm viewed as being distinct from the Russian-language-only DVDs .... Plaintiff thus has failed to make out a claim for copyright infringement against any of the defendants.

In so holding, I recognize that the case presents a "chicken and egg" problem. That is, from Close-Up's perspective, defendants were indeed distributing Russian-language-only DVDs because if a viewer turned off the subtitles, the product would be the functional equivalent of a Russian-language-only DVD. But to determine the proper perspective - whether the chicken or the egg came first - the proper framework is to analyze the parties' licensing agreements and determine if they thought, as Close-Up asserts now, that the products were the same. ... they did not, and the contractual language defines the proper scope of the licenses.

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