Structured Asset Sales, LLC v. Sheeran

Background

Structured Asset Sales, LLC claimed to be the beneficial owner of one-third of the copyright rights associated with “Let’s Get It On.” It alleged that Edward Christopher Sheeran’s 2014 song “Thinking Out Loud” copied protected musical elements from that song. The complaint also asserted that Sony-related defendants breached “Administration Agreements” and “Songwriting Agreements” by failing to take steps to expand or protect the copyright. Structured Asset Sales claimed third-party-beneficiary rights under those agreements, although it acknowledged that it had not seen them.

Structured Asset Sales previously brought an infringement action based on the 1973 copyright registration, which used sheet music as the deposited copy. In 2020, it obtained another registration based on a studio recording that allegedly included musical elements not reflected in the sheet music. The defendants argued that the new registration was unauthorized or invalid and that the new lawsuit duplicated the earlier related case.

Copyright Infringement Claim

The court concluded that the 2020 registration carried enough evidentiary weight at the motion-to-dismiss stage to support Structured Asset Sales’s allegation that it owned the copyright. The court recognized potential issues concerning authorization, authorship of the added musical elements, and whether those elements were in the public domain. But it declined to resolve those issues without a factual record and discovery. The court also noted that a challenge based on inaccurate registration information could require consultation with the Register of Copyrights.

The court denied dismissal of the copyright claim as duplicative. Although the two actions involved the same parties and similar allegations, the court found that the 1973 and 2020 registrations covered different versions of “Let’s Get It On.” It therefore held that dismissal was inappropriate at that stage. Because the actions substantially overlapped and the earlier action could affect this one, the court stayed this action pending resolution of the earlier related case, No. 18-cv-5839.

Contract Claims

The court dismissed the claims concerning the Administration Agreements and Songwriting Agreements. Structured Asset Sales did not identify a specific agreement or plead facts showing that either type of agreement was intended to benefit it. The court held that conclusory statements that Structured Asset Sales was a third-party beneficiary were not enough to state a plausible breach-of-contract claim.

The court did not need to rely on disputed contract documents supplied by the defendants to dismiss the claims. It observed that the documents raised questions about which law applied and whether the documents were complete, but held that the complaint was deficient even without those materials. The contract claims were dismissed without prejudice to filing an amended complaint supported by allegations showing that Structured Asset Sales was an intended third-party beneficiary of a relevant agreement.

Disposition

Judge Ronnie Abrams granted the Sony Defendants’ motion to dismiss Counts II and III without prejudice to filing an amended complaint if Structured Asset Sales had a good-faith basis to do so. She denied the defendants’ motion to dismiss Count I, the copyright-infringement claim. The court stayed the action pending resolution of the earlier related case and directed the parties to propose next steps within a week after that case concluded.