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Cautionary tale: If your client files a copyright lawsuit against a major corporation and loses, he could be stuck paying a small fortune in attorney’s fees.
Rafael Vergara Hermosilla sued Coca-Cola Company for copyright infringement, claiming that Coca-Cola used his Spanish adaptation of a song in its advertising without his permission. The district court ruled that Vergara had assigned his copyright interest in the adaptation to Universal Music Latin America, which in turn had assigned its rights to the adaptation to Coca-Cola.
The Eleventh Circuit Court of Appeals recently affirmed the decision.
Coca-Cola contacted Jose Puig of Universal Music Latin America to produce a Spanish version of K'naan's "Waving Flag" called "Celebration Mix" for its 2010 FIFA World Cup ads. Puig sought advice from Rafael Artero of Universal Music Publishing Group (Universal Group) to select a songwriter. Artero recommended Vergara, who had a contract with Universal Group.
Vergara agreed to adapt the song. Vergara claimed the Artero agreed to "carry out the normal procedure" to claim Vergara's rights and register the song. That didn't happen.
Despite early negotiations in the "normal procedure," iTunes Mexico began selling the song in February 2010 without crediting Vergara for the adaptation. Vergara threatened to file a lawsuit to enforce his copyright interest in the adaptation.
Puig and Vergara negotiated a settlement by email. Vergara, whose primary demand was a credit on the track, told Puig to "consider [the adaptation] a Work for Hire with no economic compensation" other than "one dollar." Puig indicated that contracts were to follow.
Vergara received the adapter credit that he requested, but he was unhappy with the contractual language and tried to back out of the deal; it was too late. On March 4, 2010, Universal Group assigned its copyright interests in the adaptation to Coca-Cola. Vergara sued Coca-Cola for copyright infringement.
The district court dismissed the Vergara's lawsuit, finding that Vergara had legally assigned his rights to the adaptation to Universal Group for $1 and adapter's credit he requested in the email.
The Eleventh Circuit Court of Appeals agreed, noting that under Florida law, parties enter a contract when there is a definite proposal by one party which is unconditionally accepted by the other." Vergara stated in an email to Puig that his "only demand" to assign his copyright interest was the credit. Puig "unconditionally accepted" that condition. Puig's acceptance on behalf of Universal was effective to create a contract with Vergara because it matched the terms of Vergara's offer.
Someone like Vergara who battles a large company and loses can be hit with substantial attorney's fees. (Here, the district court assigned Vergara partial attorney's fees and costs, totaling over $578,000.)
Email negotiations can qualify as a signed writing if there is clear offer and acceptance. Before you file a copyright lawsuit on your client's behalf, inquire about email negotiations that could have assigned rights. That extra step could save your client thousands in other people's attorney's fees.