Bridgeport Music, Inc.; Westbound Records, Inc. v. Diamond Time, Ltd.

1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0181P (6th Cir.)
File Name: 04a0181p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
BRIDGEPORT MUSIC, INC.;
WESTBOUND RECORDS, INC.,
Plaintiffs-Appellants,
SOUTHFIELD MUSIC, INC.;
NINE RECORDS, INC.,
Plaintiffs,
v.
DIAMOND TIME, LTD.,
Defendant-Appellee,
IRVING LORENZO, d/b/a DJ Irv
Music; TVT MUSIC, INC.;
TVT RECORDS, INC., a/k/a
Tee Vee Toons,
Defendants.
X
-
-
-
->
,
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
N
Nos. 03-5003/5656
Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
No. 01-00702—Thomas A. Higgins, District Judge.
Argued: April 28, 2004
Decided and Filed: June 18, 2004
2 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
*The Honorab le Judith M. Barzilay, Judge for the United States Court
of International Trade, sitting by designation.
Before: GUY and GILMAN, Circuit Judges; BARZILAY,
Judge.*
_________________
COUNSEL
ARGUED: Richard S. Busch, KING & BALLOW,
Nashville, Tennessee, for Appellants. R. Horton Frank III,
STEWART, ESTES & DONNELL, Nashville, Tennessee, for
Appellee. ON BRIEF: Richard S. Busch, D’Lesli M. Davis,
KING & BALLOW, Nashville, Tennessee, for Appellants.
R. Horton Frank III, STEWART, ESTES & DONNELL,
Nashville, Tennessee, for Appellee.
_________________
OPINION
_________________
RALPH B. GUY, JR., Circuit Judge. Plaintiffs, Bridgeport
Music, Inc., and Westbound Records, Inc., appeal from the
decision granting summary judgment to defendant Diamond
Time, Ltd., a copyright clearance company, on their claims of
common law negligence and copyright infringement
involving the use of samples in the rap release “4 My Click.”
Plaintiffs argue that the district court erred both in finding
these claims were barred by the applicable statutes of
limitations and in rejecting equitable estoppel as a basis to
avoid the limitations bar. In a separate appeal, plaintiffs
challenge the post-judgment award of attorney fees and
nontaxable costs to Diamond Time as a prevailing defendant
under 17 U.S.C. § 505. No other parties or claims are before

-- 1 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
3
1Southfield Music and Nine Records do not appeal. In the wake of
a settlement with TVT M usic and TVT Records, Bridgeport and
W estbound voluntarily dismissed the appeal against all defendants except
Diamond Time.
2Although it appe ars that the district co urt only p artially reso lved
questions concernin g the ownership interests of Bridgeport and
W estbound Records, we assume for purposes of this appeal that
Bridgeport and W estbo und hold the copyrights they claim in “T he M ost”
us.1 After review of the record and the applicable law, we
find no error and affirm.
I.
The claims against Diamond Time, a copyright clearance
company, were initially asserted in a complaint filed May 4,
2001. That original complaint alleged nearly 500 counts
against approximately 800 defendants for copyright
infringement and other state law claims based on music
sampling. “Sampling,” common in rap, hip-hop, and urban
music, typically involves making a digital copy from a master
sound recording and using a piece in the making of a new
work. Sound recordings and their underlying musical
compositions are separate works with their own distinct
copyrights. Bridgeport Music, Inc. v. Still N The Water
Publ’g, 327 F.3d 472, 475 n.3 (6th Cir.), cert. denied, 124 S.
Ct. 399 (2003).
The amended complaint, filed after the district court
severed the initial pleading into 476 separate actions, alleged
that the rap CD single “4 My Click” sampled from the
composition “The Most Beautifullest Thing In the World
(Green Eyed Remix)” (“The Most”), and from both the
composition and sound recording “Funky Worm.” Bridgeport
Music claims to own copyrights in both music compositions,
while Westbound Records claims to hold a copyright in only
the sound recording “Funky Worm.”2
4 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
and “Funky W orm.”
Diamond Time’s business included sample clearance
services, which refers to the process of obtaining permission
to use a sample in a new musical work. According to
Diamond Time’s website, it offered sample clearance services
in two phases. The first included locating the copyright
owners, requesting permission to use the sample, and
negotiating the fees for its use. The second phase, called
“Licensing/Contract Administration,” included negotiating
agreeable terms with the copyright holders; issuing a Usage
Report confirming the terms and requesting a formal written
agreement; and overseeing the trafficking, execution, and
payment of those agreements.
Catherine Carapella, Diamond Time’s representative,
testified that when engaged to perform clearance services,
Diamond Time’s practice was to contact the proprietor or
owner of the copyrights in the material its client wanted to
use, identify itself and the client on whose behalf it was
acting, describe the proposed use and ask for terms on which
it would permit the use. The owner would normally advise
Diamond Time of its terms and Diamond Time would seek
the consent of its client. This would end phase one, at which
time Diamond Time’s client would decide how it wanted to
proceed. The client then dictated what phase two services, if
any, it would have Diamond Time undertake.
On January 24, 1995, TVT Records released the CD single
containing three versions of “4 My Click” by the rap artists
known as Cash Money Click. TVT Records owned the sound
recording “4 My Click,” while TVT Music and DJ Irv Music
each held a 50% interest in the composition “4 My Click.”
TVT Records had a policy of requiring clearance of all
samples in its releases and depended on the “creative types”
to identify any samples in a new recording. TVT Records
hired Diamond Time to handle clearance of the sample from

-- 2 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
5
3Peterer was authorized to negotiate and agree to terms on which
permission to use Bridgeport’s copyrighted material would be granted.
“The Most” in “4 My Click.” Diamond Time maintains that
it was not asked to obtain clearance for use of any other
sample in “4 My Click.”
In January 1995, on the same day that “4 My Click” was
released, TVT Records obtained permission to use the sample
“The Most” in “4 My Click” from Songs of Polygram. On
October 3, 1995, Diamond Time representative Drea Kaplon
wrote to Jane Peterer, the administrator for Bridgeport Music,
seeking permission from Bridgeport to use the sample from
the composition “The Most.”3 The letter states that she was
unaware, until this matter was well into the licensing
process, that Zomba Music could only give clearance on
the “green-eyed” version of “The Most Beautifullest
Thing In The World” and that Bridgeport Music was a
co-publisher on this song along with Zomba Music and
PolyGram Music.
Accordingly, enclosed please find a cassette of both the
new and sampled song for your review. We would like
to obtain clearance for the use of “The Most Beautifullest
Thing In The World (Green-eyed version)” in “4 My
Click” from Bridgeport Music on a pro-rata basis with
both Zomba and PolyGram Music as per the
writer/publisher splits listed in the draft of the Zomba
Publishing Agreement.
Jane, I look forward to your response so that we may
finalize this in a timely manner. Please call me should
you have any questions.
On November 20, 1995, Kaplon made a handwritten note
on a copy of this letter and faxed it to Peterer. Kaplon’s note
6 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
4Peterer claimed that if she had been aware of the alleged samp le
from “Funky Wo rm,” she would have demanded a higher percentage of
ownership in “4 M y Click” for Bridgeport as well as p ayment to
W estbound for use of the sound recording. Plaintiffs indicate that, despite
having been provided a tape of “4 My Click,” they only discovered the
alleged sample from “Funky Worm” in preparing to file this action.
stated: “Jane: Joan @ PolyGram has quoted 50% © pro-rata
with Bridgeport. Is this o.k. with you? Please advise so we
can wrap this matter up quickly. Zomba Music (who has
some publishing on this as well) has agreed to go pro-rata.
Thanks! Drea.” Under this, also handwritten, is Peterer’s
response: “Ok, Jane Peterer, 11-20-95.”4 On November 27,
1995, Kaplon sent Peterer a Usage Report confirming the
terms offered; indicating that Diamond Time’s client, TVT
Records, was proceeding in reliance on the quote; and
requesting that Peterer prepare and forward a formal
agreement directly to TVT Records.
On December 10, 1995, Peterer sent a formal agreement,
called a Release and Agreement, directly to TVT Records for
signature by TVT Music and DJ Irv Music. Under that co-
publishing agreement, Bridgeport would receive an 8.33%
interest in the composition “4 My Click.” Peterer sent
Kaplon a copy of the cover letter relating to this agreement on
the belief that Diamond Time would continue to participate
until the formal agreement and mechanical licenses were
signed. Peterer placed a copy of that letter in a file of
“pending matters,” where it remained until her deposition in
June 2002.
On the same day that the Release and Agreement was sent
to TVT Records, Peterer faxed a separate request to Kaplon
asking for information that was needed to prepare the
mechanical license for TVT Records. Kaplon did not respond
to that request. Diamond Time maintains that its involvement
in the clearance process for “4 My Click” ceased once the
Usage Report had been sent. Plaintiffs dispute this, arguing

-- 3 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
7
5Carapella testified that TV T Rec ords had a mod ified arrangement
with Diamo nd Time under which Diam ond T ime would provide phase
one sample clearance services for a fee of $200 and wo uld end its phase
two work with the issuance of the Usage Reports for a fee of $40 each.
She conceded, however, that she had no personal knowledge of the
clearance work done on “4 My Click.” In add ition, when Ka plon left
Diamond Tim e in 19 97, no one took over her responsibilities until
sometime in 1999. Diamond Time’s physical file concerning “4 My
Click” was destroyed in September 2000, along with other files from
samp le clearances from 1991 through 1995, to save on storage costs.
Diamond Tim e was able to produce a computer-gene rated tracking grid
for “4 My Click” which noted that Zomba had “waived phase two,” but
did not no te as to B ridgeport or Polygram either that phase two was
“waived” or that the jo b was “done.”
that Diamond Time “dropped the ball” and failed to complete
its assignment from TVT Records to oversee the trafficking
and execution of the formal agreement. The district court did
not attempt to resolve this dispute.5
Whatever the extent of the services Diamond Time had
been engaged to provide in this case, Peterer admitted that she
had no further written correspondence about “4 My Click”
with either TVT Records or Diamond Time. The only contact
Peterer claimed to have had occurred in several telephone
conversations with Kaplon relating to “4 My Click” and other
matters, during which Peterer urged Kaplon to see that the
Agreement was signed. Peterer claims that she relied on
Kaplon’s assurances that she would “get the deal finalized.”
There is, however, no indication of when these conversations
took place.
On September 5, 1996, TVT Records issued a Deletion
Notice for a number of titles, including “4 My Click,” which
meant that no further copies would be manufactured or sold.
The notice advised that requests for return of any of the listed
products had to be made in writing no later than November 4,
1996, and that the products had to be received by TVT
Records no later than January 10, 1997. The profit and loss
8 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
statement for the artist Cash Money Click was prepared
through December 31, 1998, in order to be sure that it
included all sales and returns. TVT Records stated, however,
that it did not receive any returns or unsold copies after April
1997. Plaintiffs argued that there must have been sales
because the online service All Music Guide reported that “4
My Click” was still “in print” as of August 2000. Granting
summary judgment to the TVT defendants, the district court
found plaintiffs had failed to present evidence that any sales
or returns had occurred after May 4, 1998. Plaintiffs’ appeal
from that decision was voluntarily dismissed as a result of a
settlement reached between plaintiffs and the TVT
defendants.
Diamond Time sought summary judgment on the grounds
that it committed no acts of direct or contributory
infringement, that it owed no duty on which the negligence
claim could be based, that the negligence claim was
preempted by the Copyright Act, and that both the copyright
infringement and negligence claims were barred by the
respective three-year statutes of limitations. Over plaintiffs’
opposition, the district court granted summary judgment to
Diamond Time on statute of limitations grounds.
Judgment was entered November 5, 2002, and plaintiffs
appealed. On March 26, 2003, the district court granted
Diamond Time’s post-judgment motion for attorney fees and
costs as a prevailing defendant under 17 U.S.C. § 505.
Bridgeport Music, Inc. v. Irving Lorenzo, 255 F. Supp.2d 795
(M.D. Tenn. 2003). Plaintiffs appealed from that order as
well.
II.
The district court’s decision granting summary judgment is
reviewed de novo. Smith v. Ameritech, 129 F.3d 857, 863
(6th Cir. 1997). Summary judgment is appropriate when
there are no genuine issues of material fact in dispute and the

-- 4 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
9
moving party is entitled to judgment as a matter of law. FED.
R. CIV. P. 56(c). In deciding a motion for summary
judgment, the court must view the evidence and reasonable
inferences in the light most favorable to the nonmoving party.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986). The nonmoving party may not rest on his
pleadings, but must come forward with evidence from which
a rational trier of fact could find in his favor. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
A. Copyright Infringement
Plaintiffs disavowed any claim that Diamond Time
committed direct acts of infringement, but argued that
Diamond Time was liable instead as a contributory infringer
because its failure to shepherd the clearance process through
execution of the written Release and Agreement materially
contributed to the direct infringement by the TVT defendants.
The district court did not determine whether the evidence
could support a finding that Diamond Time was a
contributory infringer, concluding instead that any such claim
was barred by the statute of limitations because “there [was]
no evidence in the record that defendant Diamond Time
engaged in any acts whatsoever regarding ‘4 My Click’ after
May 4, 1998.”
A civil action under the Copyright Act must be
“commenced within three years after the claim accrued.”
17 U.S.C. § 507(b). A cause of action accrues when a
plaintiff knows of the infringement or is chargeable with such
knowledge. Roley v. New World Pictures, Ltd., 19 F.3d 479,
481 (9th Cir. 1994). Because each act of infringement is a
distinct harm, the statute of limitations bars infringement
claims that accrued more than three years before suit was filed
but does not preclude infringement claims that accrued within
the statutory period. Id; Stone v. Williams, 970 F.2d 1043,
1049-50 (2d Cir. 1992); Hoste v. Radio Corp. of Am., 654
10 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
F.2d 11, 11 (6th Cir. 1981) (per curiam); Mount v. Book-of-
the-Month Club, Inc., 555 F.2d 1108, 1110-11 (2d Cir. 1977).
Contributory infringement occurs when one, “with
knowledge of the infringing activity, induces, causes or
materially contributes to the infringing conduct of another.”
Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443
F.2d 1159, 1162 (2d Cir. 1971); see also Ellison v. Robertson,
357 F.3d 1072, 1076 (9th Cir. 2004). Liability for
contributory infringement is based on the defendant’s
relationship to the direct infringement. Ez-Tixz, Inc. v. Hit-
Tix, Inc., 919 F. Supp. 728, 732-33 (S.D.N.Y. 1996). There
can be no contributory infringement without a direct
infringement. Matthew Bender & Co. v. West Publ’g. Co.,
158 F.3d 693, 706 (2d Cir. 1998); Subafilms, Ltd. v. MGM-
Pathe Communications Co., 24 F.3d 1088, 1092 (9th Cir.
1994).
1. Statute of Limitations
Conceding that Diamond Time took no actions within the
period, plaintiffs argue for the first time on appeal that their
claims against Diamond Time are not time-barred because
TVT Records committed acts of direct infringement within
the limitations period to which Diamond Time’s earlier
conduct materially contributed. The short answer is that the
district court found plaintiffs had failed to present evidence of
any direct infringement by TVT within three years preceding
the filing of the complaint. Without proof of direct
infringement, there can be no liability for contributory
infringement.
Even if there was evidence of direct infringement within the
period, however, plaintiffs may not “piggy back” Diamond
Time’s conduct from outside the period onto the alleged
direct infringement of another within the period. Just as
claims against a direct infringer who commits no acts within
the three-year limitations period are time barred, claims

-- 5 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
11
against a contributory infringer who commits no acts within
the limitations period are also time barred. This is not a new
proposition, as the discussion in Mount v. Book-of-the-Month
Club makes clear.
There, the publisher of the plaintiff’s book sent proof
copies to the defendant Book-of-the-Month Club so it could
decide if it wanted to adopt the work for the club. The
defendant gave the copy to someone it hired to read incoming
work, who turned it over to a friend, David McKibbin.
McKibbin, in turn, allegedly infringed the copyright in the
book by copying material in a pamphlet he wrote on the same
subject. The pamphlet continued to be sold within the
limitations period. The Second Circuit concluded that claims
against the book club were barred by the statute of
limitations, explaining:
We need not consider whether defendant could escape
liability simply because the reader to whom it sent the
proofs of plaintiff’s work was an independent contractor.
In any case the claim is foreclosed by limitations. Even
if defendant participated in an infringement through the
sending on of the proofs to McKibbin, that event
occurred in the Fall of 1955, almost twenty years before
this action was begun. There is no proof or allegation of
any further connection of Book-of-the-Month with
McKibbin’s pamphlet. Unless the statute’s running has
been tolled or prolonged, the claim is undoubtedly long
since time-barred.
555 F.2d at 1110.
Although plaintiffs deny it, their argument rests essentially
on a “continuing wrong” theory. That is, they argue that the
defendant’s conduct outside the limitations period contributed
to direct infringement by another party within the limitations
period. The Fifth Circuit rejected a similar argument in
Makedwde Publishing Co. v. Johnson, 37 F.3d 180, 182 (5th
12 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
Cir. 1994), and declined to follow the lead of the Seventh
Circuit in Taylor v. Meirick, 712 F.2d 1112, 1118-19 (7th Cir.
1983). The defendant in Makedwde, Lyman Jones,
participated in the alleged copyright infringement but
completely terminated his connection to the infringing
defendants outside the three-year limitations period. The
plaintiff reasoned that claims against Jones should not be time
barred because his actions outside the period led to
subsequent acts of infringement by others within the period.
Rejecting this argument and following the lead of Hoste,
Stone, and Roley, the court concluded Jones could only be
held liable for his acts of infringement committed within three
years before suit was filed. Makedwde, 37 F.3d at 182.
Similarly, we find no error in the district court’s
determination that the copyright infringement claims are
barred by the statute of limitations absent a showing that
defendant should be equitably estopped from relying on the
limitations bar.
2. Equitable Estoppel
Equitable estoppel, sometimes referred to as fraudulent
concealment, is invoked in cases where the defendant takes
active steps to prevent the plaintiff from suing in time, such
as by hiding evidence or promising not to plead the statute of
limitations. Hentosh v. Herman M. Finch Univ., 167 F.3d
1170, 1174 (7th Cir. 1999); EEOC v. Ky. State Police Dep’t,
80 F.3d 1086, 1095 (6th Cir. 1996); Cada v. Baxter
Healthcare Corp., 920 F.2d 446, 450-51 (7th Cir. 1990).
Application of equitable estoppel “‘should be premised on a
defendant’s improper conduct as well as a plaintiff’s actual
and reasonable reliance thereon.’” Hentosh, 167 F.3d at 1174
(citation omitted).
In the district court, plaintiffs asserted fraudulent
concealment as the basis for equitable estoppel. Hill v.
United States Dep’t of Labor, 65 F.3d 1331, 1335 (6th Cir.

-- 6 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
13
6At one point, plaintiffs seem to argue that the “Funky Worm”
samp le was fraudulently concealed. The claims against Diamond Time,
however, rest on its failure to get the agreement signed concerning the use
of the sample from “The Most” in “4 My Click.” Plaintiffs, who bear the
burden of proof, presented no evidence that could lead one to conclude
Diamond Time either knew of, or unde rtook to clear, any sample other
than “T he M ost” in “4 My Click.”
1995); Prather v. Neva Paperbacks, Inc., 446 F.2d 338, 340-
41 (5th Cir. 1971). On appeal, however, plaintiffs have
shifted their equitable estoppel claim to argue that defendant’s
misconduct “lulled [them] into believing that it was not
necessary for [them] to commence litigation.” Cerbone v.
ILGWU, 768 F.2d 45, 50 (2d Cir. 1985). See also Buttry v.
Gen. Signal Corp., 68 F.3d 1488, 1493 (2d Cir. 1995); Netzer
v. Continuity Graphic Assocs., Inc., 963 F. Supp. 1308, 1316-
18 (S.D.N.Y. 1997).6
Specifically, plaintiffs contend that they were lulled into
delaying suit by the assurances Peterer received during
several telephone conversations with Kaplon at unspecified
times after December 10, 1995. To invoke equitable estoppel,
a plaintiff must “demonstrate that his ignorance is not
attributable to a lack of diligence on his part.” Netzer, 963 F.
Supp. at 1316. Accepting for purposes of this appeal that
Kaplon said more than once that she would see the written
agreement was signed, nothing at all happened after the
Agreement was sent to TVT Records on December 10, 1995.
Plaintiffs cannot establish that it was reasonable to rely on
these empty assurances to forego litigation until more than
five years after the Agreement had been forwarded to TVT for
signature. See, e.g., Buttry, 68 F.3d at 1494; Weber v. Geffen
Records, Inc., 63 F. Supp.2d 458, 466-67 (S.D.N.Y. 1999)
(no equitable estoppel because plaintiff had unreasonably
relied on an “unexceptional string of empty promises” to
remedy infringements and protracted negotiations to
implement those promises). Accordingly, plaintiffs failed to
demonstrate that Diamond Time should be equitably estopped
14 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
from relying on the limitations period as a bar to their claims
of copyright infringement.
B. Negligence
The parties agree that New York law applies to plaintiffs’
common law negligence claim against Diamond Time. The
statute of limitations for negligence claims under New York
law is three years from accrual of the cause of action. N.Y.
C.P.L.R. § 214 (McKinney 1996). Without deciding whether
there was a duty or whether such a claim would be preempted
by the Copyright Act, the district court found any such claim
was long barred by the statute of limitations.
This negligence claim rested on the theory that Diamond
Time owed a legal duty to plaintiffs that arose from a “dual
agency” relationship analogous to that of a real estate agent
working for both buyer and seller, or an insurance broker
working for both the insurer and the insured. Out of this
alleged “dual agency” relationship, plaintiffs argue, arose a
legal duty, owed to the copyright holders, to complete the
clearance process and to notify the copyright holders when its
involvement in the clearance process concluded. Plaintiffs
assert that the following passage represents an implicit
finding that such a duty arose in this case.
The plaintiffs allege that Ms. Peterer contacted Diamond
Time on or about December 10, 1995, requesting specific
information needed to prepare the mechanical licenses
for use of “Most,” and that Diamond Time never
responded. The Court finds that Bridgeport’s cause of
action accrued shortly thereafter. Bridgeport was clearly
put on notice that Diamond Time was no longer working
on its behalf to procure the signed agreements when
Diamond Time failed to respond to its request for
necessary information. Adding a generous period of time
for Diamond Time to respond, the Court finds that the
negligence claim accrued on or about January 10, 1996,

-- 7 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
15
and that the limitations period for the negligence claim
expired January 10, 1999.
The only fair reading of this discussion is that the district
court assumed without deciding that a duty could be
established, and found that any negligence claim based on
such a duty would be barred by the statute of limitations.
This conclusion is further supported by the district court’s
observation in the order awarding attorney fees and costs that:
“The plaintiffs have never cited any case law with analogous
facts from which the Court could conclude that any legal duty
of care was owed to the plaintiffs by the defendant, who was
hired by a third party to perform its clearance work.”
Bridgeport, 255 F. Supp.2d at 798 n.2.
Similarly, we need not decide whether New York law
would recognize a legal duty owed to plaintiffs in this case.
Whether or not plaintiffs could ultimately prevail on their
negligence claim against Diamond Time, such a claim would
be barred because it was filed more than three years after it
would have accrued. In the alternative, plaintiffs again rely
on equitable estoppel to argue that the representations
allegedly made by Kaplon “induced” or “lulled” them into
believing that litigation was not necessary. For the same
reasons discussed earlier, we find that plaintiffs failed to
demonstrate that Diamond Time should be equitably estopped
from asserting the statute of limitations with respect to their
claim of negligence. Accordingly, we affirm the district
court’s grant of summary judgment to Diamond Time.
III.
Having affirmed the district court’s decision on the merits,
we turn to plaintiffs’ further appeal from the decision
awarding $64,371.23 in attorney fees and $963.00 in
nontaxable costs in favor of Diamond Time and against
Bridgeport and Westbound, jointly and severally. The district
court’s decision to award costs and fees is reviewed for abuse
16 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
7“In any civil action under this title, the court in its discretion may
allow the recovery of full costs by or a gainst any party other than the
United States or an officer thereof. Except as otherwise provided by this
title, the court may also award a reasonable attorney’s fee to the
prevailing party as part of the costs.” 17 U.S.C. § 505.
of discretion. Coles v. Wonder, 283 F.3d 798, 804 (6th Cir.
2002); Murray Hill Publ’ns, Inc. v. ABC Communications,
Inc., 264 F.3d 622, 639 (6th Cir. 2001). A district court
abuses its discretion when it relies on clearly erroneous
factual findings, improperly applies the law, or uses an
erroneous legal standard. Adcock-Ladd v. Sec’y. of Treasury,
227 F.3d 343, 349 (6th Cir. 2000).
The Copyright Act provides that the court in its discretion
may allow the award of costs and reasonable attorney fees to
the prevailing party in civil suits under the Act. 17 U.S.C.
§ 505.7 Plaintiffs argue at the outset that Diamond Time is
not a prevailing party because it did not “prevail” on the issue
of preemption or the question of duty with respect to the
common law negligence claim. First, when a defendant
succeeds in having summary judgment entered in its favor on
the copyright infringement claims asserted against it, that
defendant can only be described as having “prevailed.”
Second, the district court properly deducted 20% of the
reasonable attorney fees incurred in this action to account for
fees incurred in defense of the common law negligence claim.
Finally, as noted earlier, the district court did not decide the
issues of preemption or duty in granting summary judgment
to Diamond Time.
The discretion to grant attorney fees in copyright
infringement cases is to be exercised in an evenhanded
manner with respect to prevailing plaintiffs and prevailing
defendants, and in a manner consistent with the primary
purposes of the Copyright Act. Fogerty v. Fantasy, Inc., 510
U.S. 517 (1994). The Supreme Court squarely rejected what

-- 8 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
17
8Tho se considerations include: the primary objective of the
Copyright Act to “encourage the production of original literary, artistic,
and musical expression for the good of the public”; the fact that
defendants as well as plaintiffs may hold copyrights and run the gamut
from large corporations to “starving artists”; the need to encourage
“defendants who seek to advance a variety of meritorious copyright
defenses . . . to litigate them to the same extent that plaintiffs are
encouraged to litigate meritorious claims of infringement”; and the fact
that “a successful defense of a copyright infringement action may further
the policies of the Co pyright Act every bit as much as a successful
prosecution of an infringement claim by a holder of a copyright.” Id. at
524 and 527.
it called the “dual standard” under which prevailing plaintiffs
recovered attorney fees as a matter of course but prevailing
defendants were required to show the claims were frivolous
or were brought in bad faith. Id. at 534. At the other
extreme, the Court also rejected the view that § 505 was
intended to enact the “British Rule” of automatic recovery of
attorney fees by the prevailing party. Id. Thus, the Court
explained that “‘[t]here is no precise rule or formula for
making these determinations,’ but instead equitable discretion
should be exercised ‘in light of the considerations we have
identified.’” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424,
436-37 (1983)).8
In closing, the Fogerty Court identified several
nonexclusive factors that may be considered in making
awards to prevailing parties, as long as the factors are
“faithful to the purposes of the Copyright Act and are applied
to prevailing plaintiffs and defendants in an evenhanded
manner.” Id. at 534 n.19. Those factors include
“frivolousness, motivation, objective unreasonableness (both
in the factual and in the legal components of the case) and the
need in particular circumstances to advance considerations of
compensation and deterrence.” Id. (quoting Lieb v. Topstone
Indus., Inc., 788 F.2d 151, 156 (3d Cir. 1986)).
18 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
A. Decision to Grant Attorney Fees
The district court in this case correctly observed that
because the Fogerty factors are nonexclusive, not every factor
must weigh in favor of the prevailing party and other factors
may be considered as well. Concluding that attorney fees and
costs should be granted to Diamond Time “in the interest of
justice and in furtherance of the objectives of the Copyright
Act,” the district court explained that:
the following factors . . . weigh in favor of an award:
(1) the plaintiffs’ litigation strategy that resulted in suing
defendants against which they had little hope of
recovering; (2) the plaintiffs’ motivation for failing to
dismiss stale claims; (3) the interest in deterring further
litigation of stale claims; and (4) the inherent weakness
in the plaintiffs’ copyright claims against this defendant.
These factors dictate that the plaintiffs should be made to
answer for litigating this action, and the original action
from whence it spawned, in a fashion that contributed to
the multiplication of fees amongst all the parties and
resulted in an administrative morass for the Court.
One of the consequences of the plaintiffs’ choice to sue
hundreds of defendants all at the same time, regardless of
the strength of the individual claims, was that the
plaintiffs’ dragnet inevitably swept up parties against
whom they had little or no chance of succeeding. Such
is the case here. While the ultimate decision to dismiss
the claims against this defendant rested on the statute of
limitations, the plaintiffs’ claims for contributory
infringement and negligence were based on shaky facts
and even shakier legal arguments. In response to the
defendant’s motion for summary judgment, the plaintiffs
conceded that they had no claim for direct infringement.
Their claim for contributory infringement rested on few
facts and on case law that was not factually analogous.

-- 9 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
19
While the Court did not reach the merits of the
contributory infringement claim, the significance of the
statute of limitations defense to this and numerous other
Bridgeport cases must be underscored. Many of the
songs in question were released in the early and mid
1990's. Many of these cases involve license agreements
that were initially negotiated between the plaintiffs and
defendants during this same time period. Yet the
plaintiffs waited long after the three-year statute of
limitations to bring suit. The Court found in this case
that the last contact between Diamond Time and the
plaintiffs was in December 1995, more than five years
before the plaintiffs brought suit. This is not the only
Bridgeport case where the plaintiffs’ claims were
defeated by their failure to act promptly to protect their
rights.
The plaintiffs complained repeatedly that the dilatory
practices of the music industry, resulting in license
agreements never or belatedly being signed and
payments never or belatedly being made, allowed the
defendants in these cases to abuse the plaintiffs’ position
as a small company and flagrantly use their copyrighted
works without proper compensation. The plaintiffs claim
that they did not bring suit in a more timely fashion
because these practices kept them from enforcing their
rights. The Court sees little merit to this argument (and
in fact wholly rejected in this case the argument that
these practices amounted to a legal justification for
avoiding the statute of limitations).
If their copyrights are as valuable as the plaintiffs
claim, then it behooves them to police their rights and
seek legal redress in a timely fashion, especially where
their opponents are huge entertainment conglomerates
that may not respond to any other pressure than the threat
of a suit. And in the case of those defendants like
Diamond Time that have limited operations or financial
20 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
9Plaintiffs complain that the harsh criticism makes them doubt that
they are being treated evenhandedly with the defendant. Of course,
Fo gerty was concerned that courts be evenhanded in their treatment of
prevailing plaintiffs and prevailing defendants; not losing plaintiffs and
prevailing defend ants.
resources, timely filing of legal action against them
would increase the chance that the case is decided on the
merits of the claim and not subject to the vagaries of
missing documents, faulty recollections and absent
witnesses.
The plaintiffs’ failure to weed out stale claims means
that there remain in these cases numerous claims and
defendants that will never make it to trial. The Court
must infer from the plaintiffs’ actions that these claims
remain for the sole purpose of extracting a settlement
based on the cost of litigating further. This is not an
objective to be promoted under the Copyright Act; to the
contrary, the Court sees an opportunity here to deter
further misuse of the Court’s resources and encourage the
prompt dismissal of clearly stale claims in the hundreds
of Bridgeport cases that remain before this Court.
255 F. Supp.2d at 798-99 (footnotes omitted).
Plaintiffs accuse the district court of “palpable hostility”
toward the legitimate copyright claims asserted in other
Bridgeport cases, in which no discovery has even been
conducted, and an intention to punish plaintiffs for bringing
all of their claims together. While the district court certainly
did not mince words, the harsh criticism of the plaintiffs’
litigation strategy was clearly focused on the resulting failure
of plaintiffs to weed out stale claims against defendants like
Diamond Time.9
Urging that we reverse the award, plaintiffs compare this
case to Murray Hill, where the district court granted attorney

-- 10 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
21
10To bolster their challenge, plaintiffs suggest the award in this case
is inconsistent with the denial of attorney fees to the prevailing defendant
in another Bridgep ort case in which a novel claim was found to be
objectively reasonable. The same issue was neither presented nor decided
with respect to the claims against Diamond Time.
fees to the prevailing defendant because the plaintiff’s claims
were “utterly devoid of merit” and the voluminous case was
burdensome to both the defendant and the court. 264 F.3d at
639. This court reversed, without much discussion,
concluding that the case presented unsettled questions of law
and one or more colorable claims of infringement. Id. at 640.
When a plaintiff has advanced a reasonable, yet unsuccessful
position, an award of attorney fees to the prevailing defendant
generally does not promote the purposes of the Copyright
Act. Matthew Bender & Co., 240 F.3d 116, 122 (2d Cir.
2001); Lotus Dev. Corp. v. Borland Int’l, Inc., 140 F.3d 70,
75 (1st Cir. 1998) (In close infringement cases, “the need to
encourage meritorious defenses is a factor that a district court
may balance against the potentially chilling effect of
imposing a large fee award on a plaintiff[] who . . . may have
advanced a reasonable, albeit unsuccessful, claim.”).
In this case, however, there can be no doubt that the district
court found it was objectively unreasonable for plaintiffs to
have argued that the claims against Diamond Time were not
time barred. In commenting on the factual and legal
weakness of the plaintiffs’ contributory infringement claims,
the district court clearly criticized the plaintiffs’ decision to
sue hundreds of defendants at once without regard to the
strength of the various claims.10
In addition, the district court inferred from the way the case
was commenced and the fact that plaintiffs continued to
prosecute this case against Diamond Time that the claims
remained “for the sole purpose of extracting a settlement
based on the cost of litigating further.” Bridgeport, 255 F.
22 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
Supp.2d at 799. Although plaintiffs deny such motivation,
the district court certainly had a basis to infer that the
litigation was undertaken and prosecuted in a fashion that
would multiply the fees and encourage nuisance settlement.
We can find no clear error in this regard.
Finally, the district court explicitly relied on deterrence, a
factor that has an unusual role in this case. Despite plaintiffs’
hyperbole about the district court’s desire to “close the
courthouse door” to its legitimate, albeit novel, copyright
infringement theories, the district court was concerned with
deterring misuse of the court’s resources and encouraging the
prompt dismissal of clearly stale claims in the hundreds of
pending Bridgeport cases. Given the common origin of the
pending cases and the possibility that similar strategies and
motivations may be at work with respect to at least some of
the asserted claims, deterrence is a particularly relevant factor
in this case weighing in favor of an award of attorney fees.
B. Reasonableness of Award
Finally, having determined that an award of attorney fees
was warranted, the district court made an independent review
of the billing statements and determined that the initial
“lodestar” amount, representing reasonable attorney fees
incurred by Diamond Time in this case, was $80,464.04.
That amount was then reduced by 20% to account for fees
incurred with respect to the negligence claim only. As a
result, the district court awarded $64,371.23 in attorney fees
to Diamond Time.
Plaintiffs do not challenge the calculation of this amount,
but argue that it is unreasonable because it does not account
for the defendant’s unwillingness to settle. The district court
rejected this argument, explaining that:
The deadline for filing dispositive motions in this case
was June 21, 2002. The plaintiffs’ initial settlement

-- 11 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
23
demand was not made until September 30, 2002. The
plaintiffs cannot be heard now to complain that the
defendant did not settle in a timely manner when the first
offer to settle was not made until three months after the
dispositive motion deadline, and just two months prior to
trial, at which point the defendant had already incurred
almost two-thirds of the amount of attorney’s fees it now
seeks.
255 F. Supp.2d at 801-02. Plaintiffs contend that because this
conclusion rested on incorrect or incomplete facts concerning
their first offer to settle, the district court abused its discretion
in refusing to further reduce the amount of attorney fees.
First, plaintiffs argue that the district court “obviously
overlooked” the short declaration submitted by their attorney,
Richard Busch, in which he stated that defendant’s counsel,
Horton Frank, rebuffed an attempt to settle all the claims
against Diamond Time in June 2002. That declaration
specifically states that Busch approached Frank during a
break in depositions sometime in June 2002 and offered to
dismiss the claims for “a very minimal amount of money.”
Frank apparently replied that plaintiffs would have to agree to
dismiss the claims with prejudice and to pay all or part of
Diamond Time’s attorney fees and costs. It is true that the
district court did not mention this oral exchange in its
opinion. The court also did not mention the letters dated
April 8, 2002, and July 31, 2002, in which defendant’s
counsel asked that plaintiffs make a settlement demand. In
the April letter, defendant’s counsel conveyed both that
Diamond Time had limited financial resources and that it had
begun incurring expenses in preparation of its dispositive
motion. The letter also stated that:
At the case management conference, Judge Higgins made
it very clear that he expected you to “put a price on your
horse” and to let the Defendants in the case know what
the price was for purposes of settlement. If you intend to
24 Bridgeport Music, Inc. v.
Diamond Time, et al.
Nos. 03-5003/5656
11Frank responded in a lengthy letter dated October 14, 2002,
explaining that Diamond Time had no money to pay plaintiffs and had
already incurred nearly $60,000 in attorney fees; that Diamond Time
expected to prevail on summary judgment and would seek attorney fees
under Fogerty; and that Diamond Time would settle if plaintiffs agreed
to pay the fees incurred in this case. On October 24, 2002, Busch rejected
this offer as unrealistic and comm ented that it “seems tragic to me that
there have been $60,00 0 worth of attorney’s fees charged to Diamond
Time for engaging in motion practice when all matters could have been
settled for less than that amount.” No further counter-offer was made in
that letter, and the summary judgment orders were entered shortly
thereafter.
do so, I ask that you take what I have told you in this
letter into account. If you do not intend to do so, my
client will simply move forward and continue to defend
the litigation.
Plaintiffs did not respond except by making the informal offer
in June 2002. On July 31, 2002, Frank wrote to plaintiffs’
counsel as a “follow up” to that exchange and expressed
willingness to discuss settlement. On September 30, 2002,
plaintiffs made its first written offer to dismiss all the lawsuits
against Diamond Time for payment of $20,000.11
Despite the failure of the district court to discuss plaintiffs’
oral offer to settle for “a very minimal amount,” we find no
abuse of discretion in the district court’s refusal to reduce the
amount of the attorney fees to account for defendant’s
unwillingness to settle. Defendant did not display
unwillingness to discuss settlement, only an unwillingness to
pay plaintiffs money it did not have, in order to settle claims
it believed would be dismissed with prejudice, when it had
already incurred significant attorney fees in defending itself.
Cf. Diamond Star Bldg. Co. v. Freed, 30 F.3d 503, 506-07
(4th Cir. 1994) (reversing denial of attorney fees and finding
it an abuse of discretion to penalize the prevailing defendant
for refusing to admit liability and pay to settle a frivolous
action).

-- 12 of 13 --

Nos. 03-5003/5656 Bridgeport Music, Inc. v.
Diamond Time, et al.
25
In concluding that the attorney fees incurred by defendant
were reasonable, the district court noted that Diamond Time
was represented by only a single copyright attorney and that
Diamond Time had limited its discovery and motion practice
due to its limited financial resources. Plaintiffs, on the other
hand, “chose to litigate aggressively each and every issue
against each and every defendant, regardless of a particular
defendant’s resources or the strengths of the claims against it.
The fees incurred by the defendant here were justified and
necessary to guard against the plaintiffs’ take-no-prisoners
tactics.” Bridgeport, 255 F. Supp.2d at 802.
AFFIRMED.

-- 13 of 13 --