Friends & Lovers, Inc. v. Lions Gate Films, Inc.

MEMORANDUM

Plaintiff-Appellant Friends & Lovers, Inc. (“F & L”), appeals from the dismissal of its copyright infringement claim under Federal Rule of Civil Procedure 12(b)(6) and the dismissal of its pendant state law claims. Because the parties are familiar with the facts of this case, we do not recount them here.

The question in this case is whether F & L’s termination of the Short Form Distribution Agreement terminated Lions Gate’s license and resulted in a return of the rights in the Picture to F & L.

Absent an express reversion clause in the authorizing instrument, if a grantee under an assignment or exclusive license breaches a covenant of the authorizing instrument, such breach “will give rise to a reversion of rights to the grantor only if such breach is so material as to create a right of rescission in the grantor.” 3 M. Nimmer and D. Nimmer, Nimmer on Copyright, § 10.15[A] (2000). “Upon such rescission, the assignment or license is terminated and the copyright proprietor may hold his former grantee liable as an infringer for subsequent use of the work. Failing such rescission, by contrast, the grant continues in place, thus precluding infringement liability until…