Narrative Ark Entertainment LLC v. Archie Comic Publications, Inc. et al

RESPONSE re: 136 Memorandum of Law in Opposition to Motion,, Counterstatement to Plaintiff's Rule 56.1 Statement. Document

S.D.N.Y.February 7, 2019

1 Edmund J. Ferdinand, III (EF 9885) Alexander R. Malbin (AM 9385) John F. Olsen (JO 8553) 450 Seventh Avenue Suite 1300 New York, NY 10123 Phone: (212) 220-0523 Fax: (212) 905-6747 jferdinand@24iplg.com amalbin@24iplg.com jolsen@24iplg.com UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK NARRATIVE ARK ENTERTAINMENT, LLC, Plaintiff, -against - ARCHIE COMIC PUBLICATIONS, INC., Defendant. __________________________________________ ARCHIE COMIC PUBLICATIONS, INC., Counterclaim Plaintiff and Third Party Plaintiff, -against- NARRATIVE ARK ENTERTAINMENT, LLC, Counterclaim Defendant, SCOTT D. FULOP, Third Party Defendant. Civil Action No. 7:16-cv-06109-VB DEFENDANT ARCHIE COMIC PUBLICATIONS, INC.’S COUNTERSTATEMENT OF FACTS IN DISPUTE IN RESPONSE TO “NARRATIVE AND FULOP ADDITIONAL STATEMENT OF UNDISPUTED FACTS” Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 1 of 10 2 Pursuant to Local Civil Rule 56.1(b)-(c) of the United States District Court for the Southern District of New York, ACP hereby respectfully submits its Counterstatement to “Narrative’s & Fulop’s Statement of Undisputed Material Facts”, setting forth ACP’s controverting statements in response to the eleven paragraphs (Nos. 96 through 106) of purportedly undisputed facts set forth in the “Narrative and Fulop Additional Statement of Undisputed Facts” section of Narrative’s and Fulop’s L.R. 56.1 Counterstatement to ACP’s Statement of Undisputed Material Facts (Dkt. 136-10 p. 29-30) (the “Narrative/Fulop SMF”).1 To the extent ACP states that a proposition is disputed or undisputed, it does so only for purposes of the parties’ respective motions for summary judgment; ACP preserves all evidentiary objections and does not agree that any “fact” proffered by Narrative & Fulop or evidence offered by Narrative & Fulop in purported support of a “fact” is either admissible or may be properly considered by this Court. ACP reserves the right to dispute any and all “facts” asserted by Narrative & Fulop, and to make additional evidentiary objections, at the appropriate time if this case proceeds past summary judgment. For the Court’s convenience, ACP has reproduced each numbered paragraph of the Narrative/Fulop SMF, and sets forth its replies beneath them in bolded text. COUNTERSTATEMENTS TO NARRATIVE/FULOP SMF Narrative/Fulop Statement No. 96: William Mooar, Chief Operating Office of ACP, testified that ACP never owned the copyrights. [Mooar Dep., pp. 91, 94, 103].2 ACP’s Counterstatement to Narrative/Fulop Statement No. 96: Disputed. 1 Capitalized terms used herein have the same meanings attributed to them in ACP’s Statement of Undisputed Material Facts, dated November 15, 2018, and the Reply Memorandum in Further Support of ACP’s Motion for Summary Judgment, dated January 31, 2019. 2 This statement fails to comply with the requirement of Section 2[E] of Your Honor’s Individual Practices that “Each citation to evidence required by Local Civil Rule 56.1(d) must specify, where applicable, sections of particular portions of the record, including page, line, and paragraph numbers. Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 2 of 10 3 As an initial matter, Narrative’s/Fulop’s statement is vague and ambiguous as to the referenced “copyrights”. Construing the reference to “copyrights” in Narrative’s/Fulop’s statement to be referring to the copyrights to the Narrative Registered Works, Narrative’s/Fulop’s statement misrepresents the cited testimony. Mr. Mooar testified that ACP does not own the copyrights, not that ACP never owned the copyrights. (See Supplemental Declaration of Edmund J. Ferdinand, III, dated February 6, 2019 [“Supp. Ferdinand Decl.”], ¶ 3, Ex. 6, at 91:13-25, 94:7-10, 103:11-18, 106:9-11.) Mr. Mooar’s testimony is consistent with ACP’s position that ACP owned the copyrights in the Narrative Registered Works upon their creation, and that the copyrights were thereafter assigned to Sega pursuant to the license agreement between ACP and Sega. Thus, Narrative’s/Fulop’s statement is contravened by the record, and should therefore be given no weight. Narrative/Fulop Statement No. 97: Counsel for ACP stated that discovery in this action has shown that ACP did not own the works in dispute. (Dkt 16, ¶ 3 line 5). ACP’s Counterstatement to Narrative/Fulop Statement No. 97: Disputed. First, Narrative’s/Fulop’s statement is vague and ambiguous as to the referenced “works in dispute”. In addition to the Narrative Registered Works (as to which ownership is in dispute), the exhibits to Narrative’s Amended Complaint set forth hundreds of ACP publications and advertisements, as well as copyright registrations filed by ACP covering certain works, the infringing nature of all of which are “in dispute”. Second, the cited document lends no support to Narrative’s/Fulop’s statement. The cited document, Docket No. 16, is a letter from counsel from former co-Defendant Sega to the Court requesting an extension of time to respond to Narrative’s complaint. Construing the phrase “works in dispute” to be referring to the Narrative Registered Works as to which ownership is in dispute in this action, and construing the incorrect citation to be attempting to cite to ACP’s counsel’s letter docketed at Docket. No. 126 and referenced in Narrative’s opposition brief in support of the statement set forth at Paragraph 97 (see Dkt. 136 p. 8 line 2), Narrative’s/Fulop’s statement misrepresents the referenced statement of ACP’s counsel. The statement of ACP’s counsel in the letter is as follows: “ACP acknowledges that discovery in this action has shown that third party Sega of America, Inc. (‘Sega’), and not ACP, is the copyright owner of the disputed Works At Issue” (Dkt. 126 ¶ 3). This statement does not support the contention that that “Counsel for ACP stated Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 3 of 10 4 that discovery in this action has shown that ACP did not own the works in dispute”. Rather, the statement supports that ACP does not presently own the copyrights in the works. ACP’s counsel’s statement is consistent with ACP’s position that ACP owned the copyrights in the Narrative Registered Works upon their creation, and that the copyrights were thereafter assigned to Sega pursuant to the license agreement between ACP and Sega. Thus, Narrative’s/Fulop’s statement is contravened by the record, and should therefore be given no weight. Narrative/Fulop Statement No. 98: ACP published the works listed on Exhibits D and E of the Amended Complaint. (Dkt. 36, Amended Complaint, Ex. D & E). ACP’s Counterstatement to Narrative/Fulop Statement No. 98: As an initial matter, ACP hereby incorporates the portion of its Motion to Strike, submitted concurrently herewith, objecting to Narrative/Fulop Statement No. 98. To the extent ACP’s Motion to Strike this paragraph is denied, Narrative/Fulop Statement No. 98 should nonetheless be disregarded and afforded no weight in considering the parties’ summary judgment motions for the reasons stated in ACP’s Motion to Strike – namely, that this statement is not supported by citation to any admissible evidence, in violation of L.R. 56.1(d). Sauerhaft v. Board of Ed. of Hastings-On-Hudson Union Free School Dist., No. 05 Civ. 09087(PGG), 2009 WL 1576467, *7 (S.D.N.Y. Jun 2, 2009) (declining to consider paragraph of 56.1 statement lacking citation to admissible evidence on summary judgment motion); Forbes v. Lighthouse Intern., No. 11 CV 7065(VB), 2013 WL 1811960, *1 n. 1 (S.D.N.Y. May 1, 2013) (“The Court disregards plaintiff’s Local Rule 56.1 counter statement of material facts and additional statement of material facts to the extent they fail to cite to admissible evidence or couch argument and analysis as fact”). Subject to and without waiving its objections set forth in its Motion to Strike, ACP admits that it published the works listed at Exhibits D and E of Narrative’s Amended Complaint (Ferdinand Decl., ¶ 3, Exs. 6 & 7). ACP disputes the characterization of such works as “infringing”, as set forth along with the listings of the works at Exhibits D and E of Narrative’s Amended Complaint. Narrative/Fulop Statement No. 99: The settlement agreement between ACP and Sega provided that Ken Penders retained his 170 copyright registrations and received a financial settlement for past and future usages. (Ferdinand Decl., Ex. 22, Confidential Settlement Ag[r]eement by and between ACP and Kenneth W. Penders, III, entered into as of June 27, 2013).3 ACP’s Counterstatement to Narrative/Fulop Statement No. 99: Disputed. 3 This statement fails to comply with the requirement of Section 2[E] of Your Honor’s Individual Practices that “Each citation to evidence required by Local Civil Rule 56.1(d) must specify, where applicable, sections of particular portions of the record, including page, line, and paragraph numbers. Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 4 of 10 5 As an initial matter, Narrative’s/Fulop’s statement is vague and ambiguous in identifying “[t]he settlement agreement between ACP and Sega”, and then citing to the settlement agreement between ACP and Ken Penders. Construing Narrative’s/Fulop’s statement to be referring to the ACP-Penders settlement agreement, ACP disputes the statement. First, Narrative’s/Fulop’s statement is inaccurate in representing that the agreement “provided that Ken Penders retained his 170 copyright registrations”. Under the agreement, ACP expressly “disputes the validity and enforceability of Penders’ Claimed Copyrights” (see Ferdinand Decl., ¶ 3, Ex. 22, Section 2.2). The agreement contains no provision permitting Penders to retain his “170 copyright registrations” – rather, its only reference to any copyright registrations issued to Penders is a WHEREAS clause merely acknowledging the existence of “164 Certificates of Copyright Registration” issued to Penders by the U.S. Copyright Office (see id. at p. 7, ¶ 3). As such, the contention that the agreement “provided that Ken Penders retained his 170 copyright registrations” is inaccurate and unsupported by the cited agreement. Second, Narrative’s/Fulop’s statement is inaccurate in its characterization of Penders’ compensation under the agreement as a “financial settlement for past and future uses”. Under the agreement, ACP agreed to compensate Penders “earned percentage royalties”, and a recoupable advance on such royalties, “against ACP’s future Net Sales of the comic book titles” with respect to which Penders claimed ownership (see id. at Section 1.1). The agreement does not provide for any other compensation to be paid to Penders by ACP. Thus, the only financial compensation to Penders under the agreement is royalty and advance payments for ACP’s future use of the works, not a “settlement for past and future uses”. As such, the contention that the agreement “provided that Ken Penders … received a financial settlement for past and future usages” is inaccurate and unsupported by the agreement. Thus, Narrative’s/Fulop’s statement is contravened by the record, and should therefore be given no weight. Narrative/Fulop Statement No. 100: ACP has no written and signed work for hire agreement or contracts with Scott Fulop. (Dkt 36, Amended Complaint, 30). ACP’s Counterstatement to Narrative/Fulop Statement No. 100: Disputed. As an initial matter, ACP hereby incorporates the portion of its Motion to Strike, submitted concurrently herewith, objecting to Narrative/Fulop Statement No. 100. To the extent ACP’s Motion to Strike this paragraph is denied, Narrative/Fulop Statement No. 100 should nonetheless be disregarded and afforded no weight in considering the parties’ summary judgment motions for the reasons stated in ACP’s Motion to Strike – namely, that this statement is not supported by citation to any Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 5 of 10 6 admissible evidence, in violation of L.R. 56.1(d). Sauerhaft, 2009 WL 1576467 at *7; Forbes, 2013 WL 1011960 at *1 n. 1. Subject to and without waiving its objections set forth in its Motion to Strike, ACP disputes Narrative’s/Fulop’s statement as follows. ACP has produced evidence showing that Fulop, while an ACP employee during the period of 1988-1989, worked on the development of independent contractor agreements to be entered into between ACP and its freelancers. (See Supp. Ferdinand Decl., ¶ 3, Ex. 3.) At least one form of these agreements contained work- for-hire provisions. (See id. at ARCH_007627-9 ¶¶ 1[a]-[b], 2[a].) Corroborating this documentary evidence, Fulop testified that he worked with ACP on developing independent contractor agreements to be entered into between ACP and its freelancers. (See Supp. Ferdinand Decl., ¶ 3, Ex. 5, at 61:21-62:9; 73:2-74:5). Thus, Narrative’s/Fulop’s statement is contravened by the record, and should therefore be given no weight. Narrative/Fulop Statement No. 101: That ACP has no documents or agreement with Scott Fulop or Narrative granting them permission to use the copyrighted works of Fulop and Narrative. (Dkt. 36, Amended Complaint. 30). ACP’s Counterstatement to Narrative/Fulop Statement No. 101: As an initial matter, ACP hereby incorporates the portion of its Motion to Strike, submitted concurrently herewith, objecting to Narrative/Fulop Statement No. 101. To the extent ACP’s Motion to Strike this paragraph is denied, Narrative/Fulop Statement No. 101 should nonetheless be disregarded and afforded no weight in considering the parties’ summary judgment motions for the reasons stated in ACP’s Motion to Strike – namely, that this statement is not supported by citation to any admissible evidence, in violation of L.R. 56.1(d). Sauerhaft, 2009 WL 1576467 at *7; Forbes, 2013 WL 1011960 at *1 n. 1. Subject to and without waiving its objections set forth in its Motion to Strike, ACP disputes Narrative’s/Fulop’s statement as follows. First, Narrative’s/Fulop’s statement is refuted by Narrative’s Amended Complaint, it which Narrative alleged that Fulop agreed to grant ACP certain publication rights with respect to the works (see Ferdinand Decl. ¶ 3, Ex. 2, ¶ 27). Second, the statement is also refuted by Fulop’s deposition testimony, in which he testified that he intended and understood that ACP would use his works in the Sonic the Hedgehog publications after paying him (see id., ¶ 3, Ex. 17, 110:22-111:6). And third, the statement is further refuted by the Narrative/Fulop Counter-SMF (see Response No. 47), in which Narrative & Fulop admitted that ACP’s first publication of the works was authorized by Fulop. Thus, Narrative’s/Fulop’s statement is contravened by the record, and should therefore be given no weight. Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 6 of 10 7 Narrative/Fulop Statement No. 102: That ACP was aware of the copyright registrations filed by Scott Fulop and other freelance creators working on the Sonic comics. [Burstein Decl., Ex. 1-4, declarations of Shaw, Galan, Hebert and Penders).4 ACP’s Counterstatement to Narrative/Fulop Statement No. 102: As an initial matter, ACP hereby incorporates the portion of its Motion to Strike, submitted concurrently herewith, objecting to Narrative/Fulop Statement No. 102. To the extent ACP’s Motion to Strike this paragraph is denied, Narrative/Fulop Statement No. 102 should nonetheless be disregarded and afforded no weight in considering the parties’ summary judgment motions for the reasons stated in ACP’s Motion to Strike – namely, that this statement is not supported by citation to any admissible evidence, in violation of L.R. 56.1(d). Sauerhaft, 2009 WL 1576467 at *7; Forbes, 2013 WL 1011960 at *1 n. 1. Subject to and without waiving its objections set forth in its Motion to Strike, ACP disputes Narrative’s/Fulop’s statement in part, as follows. First, Narrative’s/Fulop’s statement is vague and ambiguous as to timeframe; the words “ACP was aware” implies that the assertion is with respect to a certain unspecified timeframe. The statement is also vague and ambiguous as to its reference to “the copyright registrations”, which would imply that the assertion is respect to certain registrations, but without specifying what those registrations are. As best as it understands it, ACP admits Narrative’s/Fulop’s statement with respect to ACP’s awareness of copyright registrations filed by Ken Penders only to the extent it refers to the time of ACP’s litigation with Penders. William Mooar, ACP’s corporate representative, testified that ACP was aware of the registrations filed by Penders during the ACP-Penders litigation. See Supp. Ferdinand Decl., ¶ 3, Ex. 6, 109:10-18. To the extent the statement encompasses awareness by ACP prior to the ACP-Penders litigation, ACP disputes the assertion. William Mooar testified that no one currently employed by ACP was aware that Penders was filing copyright registrations at the time of Penders’ filings. See id. at 111:5-16. ACP admits Narrative’s/Fulop’s statement with respect to awareness of copyright registrations filed by Scott Fulop only to the extent it refers to the time beginning upon ACP’s receipt of Narrative’s October 2015 demand letter. William Mooar testified that ACP first became aware that Fulop was filing copyright registrations when it received Narrative’s counsel’s demand letter. See id., at 108:13-15. ACP admits that freelancers other than Fulop and Penders are identified on registrations filed by Fulop and Penders. But, the record does not reflect that ACP was, or presently is, aware of any copyright registrations filed by any freelancers who worked on the Sonic Comic Series other than Penders and Fulop. 4 This statement fails to comply with the requirement of Section 2[E] of Your Honor’s Individual Practices that “Each citation to evidence required by Local Civil Rule 56.1(d) must specify, where applicable, sections of particular portions of the record, including page, line, and paragraph numbers. Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 7 of 10 8 Thus in sum, ACP admits Narrative’s/Fulop’s statement only with respect to ACP’s awareness of copyright registrations filed by Ken Penders during the ACP-Penders litigation, and ACP’s awareness of copyright registrations filed by Scott Fulop beginning upon ACP’s receipt of Narrative’s October 2015 demand letter. ACP otherwise disputes the statement. Narrative/Fulop Statement No. 103: That ACP was aware that other freelance creators working on the Sonic comics have not signed work for hire agreements with either ACP or Sega. [Burstein Decl., Ex. 1-4, declarations of Shaw, Galan, Hebert, Penders and Fulop).5 ACP’s Counterstatement to Narrative/Fulop Statement No. 103: As an initial matter, ACP hereby incorporates the portion of its Motion to Strike, submitted concurrently herewith, objecting to Narrative/Fulop Statement No. 103. To the extent ACP’s Motion to Strike this paragraph is denied, Narrative/Fulop Statement No. 103 should nonetheless be disregarded and afforded no weight in considering the parties’ summary judgment motions for the reasons stated in ACP’s Motion to Strike – namely, that this statement is not supported by citation to any admissible evidence, in violation of L.R. 56.1(d). Sauerhaft, 2009 WL 1576467 at *7; Forbes, 2013 WL 1011960 at *1 n. 1. Subject to and without waiving its objections set forth in its Motion to Strike, ACP disputes the statement, as follows. William Mooar, ACP’s designated corporate representative, testified that he is aware that Ken Penders signed a freelance independent contractor agreement with ACP. (See Supp. Ferdinand Decl., ¶ 3, Ex. 6, 138:3-11.) That agreement, which was produced in discovery in this action, contains a work-for-hire provision. (See Supp. Ferdinand Decl., ¶ 3, Ex. 2 [at ¶ 7].) William Mooar also testified that he is not aware whether or not any freelancers other than Penders had signed freelance independent contractor agreements with ACP. (See Supp. Ferdinand Decl., ¶ 3, Ex. 6, 136:22-138:6.) Thus, Narrative’s/Fulop’s statement is contravened by the record, and should therefore be given no weight. Narrative/Fulop Statement No. 104: That ACP did not have exclusive rights under License Agreement between ACP and Sega of America, Inc., effective January 1, 2011 (ARCH_010727- 010748). (Ferdinand Decl., Ex. 23, License Agreement between ACP and Sega of America, Inc., effective January 1, 2011 (ARCH_010727-010748). ACP’s Counterstatement to Narrative/Fulop Statement No. 104: 5 This statement fails to comply with the requirement of Section 2[E] of Your Honor’s Individual Practices that “Each citation to evidence required by Local Civil Rule 56.1(d) must specify, where applicable, sections of particular portions of the record, including page, line, and paragraph numbers. Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 8 of 10 Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 9 of 10 CERTIFICATE OF ELECTRONIC FILING I hereby certify that on February 7, 2019, the foregoing DEFENDANT ARCHIE COMIC PUBLICATIONS, INC.’S COUNTERSTATEMENT OF FACTS IN DISPUTE IN RESPONSE TO “NARRATIVE AND FULOP ADDITIONAL STATEMENT OF UNDISPUTED FACTS” was filed electronically. Notice of this filing will be sent to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s system. ___s/ Alexander Malbin _______________ Case 7:16-cv-06109-VB-LMS Document 143 Filed 02/07/19 Page 10 of 10