Chambers v. Time Warner, Inc.

B.D. PARKER, JR., Circuit Judge.

Plaintiffs Lester Chambers, Carl Gardner, Bill Pinkney, and Tony Silvester, who are recording artists, appeal from the December 8, 2000 judgment of the United States District Court for the Southern District of New York (Jed S. Rakoff, Judge) dismissing their Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon [*150] which relief could be granted. The District Court found that plaintiffs’ recording contracts with defendants Time Warner, Inc., Sony Corporation of America, BMG Entertainment, Inc., and Universal Music Group, Inc. (collectively, the “Record Companies”) effectively transferred their rights in digital versions of their recordings to the Record Companies and thus barred their federal copyright infringement claims. The court also determined that defendant MP3.com, Inc.’s use of plaintiffs’ names on its Internet website was a fair use, which barred plaintiffs’ Lanham Act claim. The court dismissed related state law claims without prejudice. Because we find that the District Court, in ruling on defendants’ motions to dismiss, improperly considered materials outside the pleadings on the copyright claims and failed to sufficiently consider the Lanham Act claim, we vacate and remand.

BACKGROUND In this putative class action, plaintiffs are recording artists from four musical groups commonly classified in the rhythm and blues genre: Lester Chambers of The Chambers Brothers, Carl Gardner of The Coasters, Bill Pinkney of The Original Drifters, and Tony Silvester of The Main Ingredient. They recorded performances of musical works under contracts with predecessors of the Record Companies from the 1950s through the mid-1990s. Pursuant to these contracts, plaintiffs assigned ownership rights, including copyrights, in their sound recordings to the Record Companies in exchange for the right to royalties from the sale of the recordings. Each Record Company purportedly sells copies of each plaintiffs recordings via licenses or cross-licenses.