WWE, the entertainment wrestling giant, couldn’t smack down its opponent in a Texas court, as it squared off with the songwriter Papa Berg to get his copyright infringement lawsuit dismissed. A U.S. District Court in Dallas ruled partly in favor of the World Wrestling Entertainment Inc., granting its motion to dismiss his contributory infringement claim but the judge denied its motion to dismiss Berg’s direct infringement claims.
Berg is a musician-songwriter who has written or co-written several songs for professional wrestling, including Badstreet USA, which he co-wrote with one of the defendants, Michael Seitz, aka Michael Hayes. The song was played as “entrance music” for certain professional wrestlers, including Seitz.
In 1983 Berg registered this song with Broadcast Music Inc. to collect licensing fees and administer his royalties, while still retaining his publishing rights.
This controversy arose out of THQ, a video game company, seeking to use Badstreet in one of its games. THQ initially made an offer to Berg to license the song but then later notified him that records showed the song was owned by the WWE.
When he researched, Berg found that the song as well as eleven other protected works had been re-registered with BMI by the WWE, listing co-defendants Seitz or James Johnston as “songwriter/composer” and defendant Stephanie Music as publisher. This resulted in the royalties from use of the works on the WWE’s cable station, DVDs and ringtones going to the defendants.
Berg sued for declaratory judgment of copyright ownership, infringement, contributory infringement, unfair competition, tortious interference with existing and potential business relationships, civil conspiracy and money had and received; WWE moved to dismiss, based on lack of personal jurisdiction, failure to properly state direct and contributory copyright infringement claims and preemption of the state law claims.
U.S. District Judge Jane Boyle found that the WWE was subject to personal jurisdiction in Texas, through the long-arm statute, by purposefully availing itself to the benefits and protections of the state through its minimum contacts. It knowingly marketed to the state and attributed $5.1 million of its net revenue to commerce in Texas.
The court held for Berg, allowing a claim for direct infringement, finding he: sufficiently alleged a valid copyright by naming each protected work; alleged registration; and that the facts at issue showed WWE access to the protected works, as well as a substantial similarity between protected and infringing work to prove an unauthorized copying. The court dismissed the contributory claim because he failed to assert how the defendants induced, caused or materially contributed to infringing conduct by another.
WWE won a partial ruling in its favor on state claims, including tortious interference and unfair competition. It argued that some of these were preempted by Berg’s federal copyright claims. Applying a two-part preemption test, the court found the state claims within copyright because they pertained to his rights in the protected works and claims that defendants violated them; to the extent the claims were based on defendants’ reproduction or distribution of protected works, however, they were equivalent to a federal copyright, and, thus, preempted. Berg can proceed with the state claims in which he sought recovery based solely on defendants’ re-registration of his protected works and subsequent diversion of royalties from third parties. The court found these did had nothing to do with claims of WWE’s unauthorized use or reproduction of Berg’s copyrighted works.