Cash Money v. Aspiro (TIDAL) - Complaint

FILED: NEW YORK COUNTY CLERK 07/16/2015 11:35 AM INDEX NO. 652501/2015NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/16/2015

SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK

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Index No.

COMPLAINT

CASH MONEY RECORDS, INC.,

Plaintiff,

-Against-

ASPIRO AB, WiMP MUSIC AS, and WIMP, INC.,

Defendants.

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Plaintiff Cash Money Records, Inc. (Plaintiff or CMR), by its attorneys, Fox

Rothschild LLP, brings this Complaint for damages and preliminary and permanent injunctive

relief against Defendants Aspiro AB (Aspiro), WiMP Music AS (Wimp AS), and WIMP,

Inc. (collectively, Defendants), and complains and alleges, upon knowledge with respect to its

own acts, and upon information and belief with respect to the acts of all others, as follows:

NATURE OF ACTION

1. This case arises from Defendants knowing and deliberate interference with an

exclusive recording agreement between CMR and the recording artist Dwayne Michael Carter,

Jr. p/k/a Lil Wayne (Carter). Defendants have been, and are continuing to, feature and

promote Carters recordings throughout the world via Defendants fledgling digital streaming

music service known as Tidal, all in brazen defiance of CMRs exclusive rights under the

exclusive recording agreement.

2. Defendants have induced Carter to breach CMRs exclusive recording agreement,

by, among other things, purporting to acquire CMRs exclusive rights to exploit sound

recordings performed and recorded by Carter. CMR has paid Carter tens of millions of dollars

2pursuant to the terms of its Recording Agreement with Carter and, accordingly, CMR has a

substantial investment and interest in the manner in which Carter Recordings are exploited.

3. Defendants illegal actions have deprived CMR of its exclusive control over

Carters music, thereby damaging the value of CMRs rights. Further, Defendants are

diminishing CMRs standing in the industry and jeopardizing CMRs exploitation of existing and

future Carter Recordings.

4. As a result of Defendants manifestly improper conduct, CMR has suffered

substantial damages. Further, as a result of Defendants ongoing violations of CMRs exclusive

rights in continuing to stream a Carter album entitled FWA, CMR has suffered and is

continuing to suffer irreparable harm, including damaging the market for future Carter sound

recordings and the value of the CMR-owned catalogue of previously-released Carter sound

recordings.

BACKGROUND

5. CMR and Carter are parties to an exclusive recording agreement, made as of

November 1, 1998 (the Recording Agreement), pursuant to which Carter explicitly agreed that

CMR obtained the exclusive right to distribute and exploit all sound and audio-visual recordings

that Carter performs or records during the term of the Recording Agreement (the Carter

Recordings).

6. Defendants were fully aware of CMRs exclusive rights to exploit and authorize

the exploitation of Carters music, including, without limitation, through their attorneys recent

receipt prior to their exploitation of the FWA album of a letter from CMRs attorneys setting

forth CMRs exclusive rights under the Recording Agreement. Despite this knowledge,

Defendants induced Carter to breach the Recording Agreement and to license to Defendants the

3works owned by CMR that Carter recorded and performed during the term of the Recording

Agreement.

7. Specifically, beginning on or about July 3, 2015, Tidal began streaming Carters

FWA album which includes sixteen Carter Recordings (the Unauthorized Recordings).1

8. Defendants have touted their exclusive release of the FWA album. The image

below shows Tidals webpage on or about July 9, 2015.

9. Defendants acts are a desperate and illegal attempt to save their struggling

streaming service, which has failed to gain traction since its much publicized launch in March

2015.

10. Moreover, as a result of Defendants unsanctioned actions, allegations have now

been raised against CMR for the allegedly unauthorized use of samples on the FWA album and

failure to set payment terms for third parties who worked on the Unauthorized Recordings. As

4these claims demonstrate, even though CMR has had no involvement or control over

Defendants exploitation of the Unauthorized Recordings, Defendants actions are causing

confusion in the marketplace as to the source of Carters recordings.

THE PARTIES

11. Plaintiff CMR is a Louisiana corporation with its principal place of business in

Orleans Parish, Louisiana. CMR also maintains an office in New York City.

12. Defendant Aspiro AB is a public corporation based in Sweden that owns and/or

operates the Tidal streaming service.

13. Defendant WiMP Music AS is corporation based in Norway that owns and/or

operates the Tidal streaming service.

14. Defendant WIMP, Inc. is a Georgia corporation with its principal place of

business in the State of Georgia that owns and/or operates the Tidal streaming service.

JURISDICTION AND VENUE

15. This Court has jurisdiction over this action and over Defendants pursuant to

CPLR 301 because they have engaged in a continuous and systematic course of doing business

in New York, through, among other things, their ownership and operation of the Tidal streaming

service. Defendants systematically and continually seek to market and exploit their products and

services in the State of New York.

16. Defendants are also subject to the personal jurisdiction of this Court pursuant to

CPLR 302(a)(1) because CMRs claims in this lawsuit arise from Defendants transaction of

business in the State of New York and their continuing to supply goods or services in the State of

New York including offering the Unauthorized Recordings on their Tidal streaming service.

1 FWA purportedly stands for Free Weezy Album. Weezy is a moniker used by Carter. The originally releasedFWA album consisted of fifteen Carter Recordings. On or about July 11, 2015, Defendants added a bonus track.


CPLR 302(a)(2) because Defendants have committed a tortious act within the state.


CPLR 302(a)(3) because Defendants have committed a tortious act without the state and

should expect or reasonably expect their wrongful actions to have consequences in New York,

because (i) CMRs maintains an office in New York; and (ii) Defendants derive substantial

revenue from interstate or international commerce in connection with their operation of Tidal

Streaming service.

19. Venue is proper in this County pursuant to Section 503(a) of the CPLR.

FACTS COMMON TO ALL CAUSES OF ACTION

The Recording Agreement

20. CMR is a record company which produces, sells, promotes, and distributes record

albums for various artists.

21. Carter is a musical recording artist and performer professionally known as Lil

Wayne.

22. On or about November 1, 1998, CMR and Carter entered into an exclusive

recording agreement (the Recording Agreement).

23. The Recording Agreement provides CMR with, among other things, the exclusive

right to distribute and exploit all sound and all audio-visual recordings that Carter records during

the term of the Recording Agreement.

24. Section 1.01 of the Recording Agreement provides:

You [Carter] hereby represent, warrant and agree that during theterm of this agreement, you will render your exclusive recordingservices to Company [CMR] in the Territory as provided herein.(Emphasis added).

625. Similarly, section 1.05 of the Recording Agreement provides:

Artist [Carter] will not perform for any person other thanCompany and Artist will not license or consent to or permit theuse of any Person other than Company of Artists name orlikeness) for or in connection with the recording or exploitationof any Record embodying a Composition recorded by Artistunder this agreement . . . (Emphasis added).

26. Section 9.02 of the Recording Agreement further implements CMRs exclusive

right to exploit all Carter Recordings which include the Unauthorized Recordings. It provides:

Company [CMR] . . . shall have the unlimited and exclusive rightto manufacture Records by any method(s) now or hereafter knownembodying any portion(s) or all of the performances embodied onMasters hereunder; to publicly perform such records and to permitthe public performance thereof in any medium; to import, export,sell, transfer, lease, rent, deal in or otherwise dispose of suchMasters and Records derived therefrom throughout the Territory . .. (Emphasis added.)

27. The Recording Agreement also establishes CMRs ownership over the

Unauthorized Recordings. Section 9.01 provides that: Company [CMR] is the sole, exclusive

and perpetual owner of all Masters Delivered hereunder or recorded by Artist [Carter] during the

term of this agreement.

28. As defined in the Recording Agreement: Master means a recording of one

Composition. Composition means a single musical composition, without regard to length,

including all spoken words and bridging passages and including a medley; and Record means

all forms or audio and/or audio-visual reproductions, now or hereafter known, manufactured or

distributed primarily for personal use . . . or manufactured or transmitted by means of electronic

transmission.

29. Significantly, as set forth in Section 9.02, CMRs rights included not be[ing]

required to commercially release or distribute any Master or Album recorded hereunder.

730. In short, CMR has the exclusive right to exploit and is the owner of all of the

Unauthorized Recordings that Defendants, as a result of their knowingly inducing Carter to

breach his obligations under the Recording Agreement, are streaming on their Tidal service.

31. The Recording Agreement was amended in 2005, 2008, and 2012; however, none

of those amendments modify CMRs exclusive rights and ownership of the Unauthorized

Recordings. Similarly, nothing in the Recording Agreement, as amended, modifies CMRs

exclusive right to determine how to exploit and control the exploitation of the Unauthorized

Recordings.2

Defendants Re-launch Tidal

32. Tidal is a subscription-base, digital streaming music service. Subscribers to Tidal

pay a monthly subscription fee, which, according to Tidals website, entitles subscribers to

access exclusive music.

33. In early 2015, Aspiro was acquired by Project Panther Ltd., a company controlled

by Shawn Carter, who is professionally known as Jay-Z (Jay-Z). On March 30, 2015, Jay-Z,

along with fifteen other well-known artists, including Beyonc, Kanye West, Rihanna, and

Usher, announced the re-launch of Tidal at a widely-publicized event in New York City.

34. Since its re-launch several months ago, Tidal has struggled.

35. On April 24, the Wall Street Journal published an article entitled: Low Tidal:

What Went Wrong With the Launch of Jay Zs Streaming Music Service, detailing the criticism

the brand suffered after its re-launch.3

2 Carter recently commenced litigation in Louisiana in which he alleges that CMR breached the RecordingAgreement, as amended, by failing to make payments allegedly due to Carter. CMR denies these allegations.

3 Available at: http://blogs.wsj.com/speakeasy/2015/04/24/low-tidal-what-went-wrong-with-the-launch-of-jay-zs-streaming-music-service/

836. On June 9, 2015, The Wrap, a leading digital news organization covering the

business of entertainment and media, published an article entitled Can Jay Zs Tidal Survive the

Apple Music Onslaught? The article discussed challenges Tidal faces in the wake of Apples

announcement that it was unveiling a new streaming music service.4

37. On June 23, 2015, the New York Post published an article entitled Jay-Zs Tidal

loses second CEO after just 3 months, which discussed struggles the streaming service has

encountered in boosting subscribers.5

Defendants Induced Carter to Breach the Recording Agreement

38. At all relevant times herein, Defendants were aware that Carter was signed to an

exclusive recording agreement with CMR.

39. Despite this knowledge, on or about June 3, 2014, Defendants released a single

recording on Tidal performed by Carter entitled Glory, in contravention of CMRs rights under

the Recording Agreement.

40. On June 3, 2015, Defendants claimed to be exclusively releasing Glory,

tweeting through Tidals Twitter page that @LilTunechi drops new exclusive track, #Glory,

on TIDAL. Welcome to the family! 6

41. Also on or about June 3, 2015, Defendants announced that Carter was becoming a

part owner of the Tidal brand.

4 Available at: http://www.thewrap.com/can-jay-zs-tidal-survive-the-apple-music-onslaughtwill-jay-zs-tidal-drown-in-apple-musics-wake/

5 Available at: http://nypost.com/2015/06/23/jay-zs-tidal-loses-second-ceo-after-just-three-months/.

6 @LilTunechi is Carters Twitter handle.

942. Carters purported grant of a license to Defendants to exploit Glory was a

breach of the Recording Agreement in that it contravened the exclusive rights granted to CMR

under the Recording Agreement.

43. Shortly after CMR became aware of Defendants exploitation of Glory, CMR,

through counsel, notified Defendants in writing that Carter was subject to an exclusive recording

agreement with CMR and that Defendants did not have the right to distribute or otherwise

exploit any Carter performances without CMRs consent which consent CMR had not granted.

CMR further notified Defendants that Carter had no authority to license his work to Defendants,

as that right was reserved to CMR under the Recording Agreement.

44. Despite CMRs demand that Defendants cease and desist from distributing or

exploiting Carters works, Defendants refused to do so. Instead, they contended, through

counsel, that (i) they merely were granted a non-exclusive license to exploit Glory; (ii)

Carter was at a minimum, co-owner of that recording; and (iii) as a co-owner, he had the right

to issue a non-exclusive license.

45. In response, CMR, again through counsel, expressly quoted from sections 1.01

and 9.02 of the Recording Agreement, which as alleged above (see 25, 26, 29), establish

CMRs exclusive right to control the exploitation of all Carter Recordings during the term of the

Recording Agreement. CMR explained that even assuming Carter was a co-owner, he still

lacked the right to license Defendants to exploit Glory.

46. Despite receiving CMRs response, not only did Defendants continue to exploit

Glory, but also, on or about July 3, 2015, in an unfounded attempt to revitalize the Tidal brand,

compounded their improper conduct by a factor of fifteen by streaming the full-length Carter

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album FWA, containing the fifteen Unauthorized Recordings. Defendants claimed to have the

exclusive rights to stream the album FWA.

47. Defendants have heavily promoted FWA, including publicly touting their

exclusive release of the album. (see image in par. 8).

48. To date, the first thing that appears on Tidals webpage is a link to the streaming

FWA album.

49. On July 3, 2015, Defendants tweeted through Tidals Twitter page that

@LilTunechi drops his new album: #FWA. Hear it now, only on TIDAL. This tweet is

pinned on Twitter, meaning that it has been the first post on Tidals Twitter page that everyone

has seen from July 3, 2015 onward.

50. On July 13, 2015, Defendants trumpeted the success of the FWA album,

tweeting Congrats to @LilTunechi for hitting 10MM #FWA streams in one week!

#FreeWeezy. (Emphasis added).

51. Further, on or about July 14, 2015, Defendants placed the following post on its

Facebook account, highlighting that FWA was streamed 10 million times in the first week of its

release:

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52. Prior to their exclusive release of the FWA album, Defendants induced Carter to

breach CMRs exclusive rights under the Recording Agreement by licensing them the right to

include FWA on Tidal. Among other things, Defendants offered Carter the opportunity to

become a part owner in the Tidal brand as part of their inducement to him.

53. The FWA album has received tepid reviews. Spin Magazine called the album an

uneven grab bag that quickly goes awry and fails to cohere.7 Vibe Magazine said of the

album: many of Waynes bars have devolved into a syrupy, random, uninspired mess that can

range from uncreative to inept.8

7 See: http://www.spin.com/2015/07/review-lil-wayne-longs-for-true-independence-on-free-weezy-album/

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The FWA Album Causes Confusion as to CMRs Role in Authorizing the Albums Release

54. Defendants wrongful conduct has created a likelihood of confusion in the

marketplace that CMR authorized or was someway involved in the release of the FWA album,

because Carter has been exclusively contracted to CMR since 1998.

55. After the release of the FWA album, multiple entities wrongly believed that CMR

was involved in the release of the FWA album.

56. For example, on or about July 6, 2015, a representative of a producer of one of the

recordings on the FWA album contacted CMR regarding his publishing rights with respect to the

FWA album and the payment due to him from its exploitation.

57. In addition, on or about July 14, 2015, a representative of a different producer of

one of the recordings on the FWA album contacted CMR regarding his publishing rights with

respect to the FWA album and the payment due to him from its exploitation.

58. Further, and also on or about July 14, 2015, the publisher and copyright owner of

the James Brown song I GOT YOU (I FEEL GOOD) contacted CMR regarding the allegedly

unauthorized use of a sample of this song on the FWA album.

59. These examples demonstrate that there is not just a likelihood of confusion, but,

in fact, actual confusion in the marketplace as to CMRs involvement in the release of the

Unauthorized Recordings. This confusion is damaging to CMR because, without limitation, (i)

CMR is viewed as having violated the rights of others; (ii) and CMR is associated with an album

that it had no ability to review or vet prior to its release thereby losing valuable control over the

CMR brand and over its investment of tens of millions of dollars in Carter.

60. Moreover, based on the reviews of the FWA album, CMR is wrongfully being

associated with a product whose quality has been questioned. This association and,

8 See: http://www.vibe.com/2015/07/lil-wayne-free-weezy-album-review/

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independently, the saturation of the marketplace with a Carter album that CMR did not authorize,

are damaging to CMR.

Count I(Tortious Interference with Contract)

61. CMR repeats and realleges the allegations in paragraphs 1 through 60 of the

complaint as if fully set forth at length herein.

62. CMR has a valid and enforceable contract with Carter in the form of the

Recording Agreement, as amended.

63. Defendants knew of the existence of CMRs exclusive recording agreement with

Carter prior to Defendants release of the Carter recording Glory on Tidal.

64. After the release of Glory, CMR explicitly notified Defendants of the existence

of the Recording Agreement and of CMRs exclusive recording agreement with CMR, and that

Defendants did not have the right to distribute or otherwise exploit any Carter performances

without CMRs consent which consent CMR had not granted.

65. CMR further notified Defendants that Carter had no authority to license his work

to Defendants, as that right was reserved to CMR under the Recording Agreement.

66. Notwithstanding their knowledge of the Recording Agreement, Defendants

intentionally induced Carter purport to breach the Agreement and license to Defendants the right

to exploit the Unauthorized Recordings.

67. Without Defendants inducement of Carters breach, Carter would not have

breached the Recording Agreement by purporting to license the Unauthorized Recordings to

Defendants.

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68. As a result of Defendants improper conduct, CMR has suffered significant

damages, including but not limited to lost revenues and loss of control over the content of its

artist, Carter, and the resulting diminution in value of Carters work.

69. CMR is entitled to preliminary and permanent injunctive relief prohibiting

Defendants from continuing to exploit Carters works on their Tidal streaming service and/or in

any other manner.

70. Defendants actions, unless enjoined by this Court, will cause Plaintiff to suffer

irreparable harm, to suffer damage and injury to its business reputation and good will, and to

sustain loss of revenues and profits.

71. Because the actions of Defendants were intentional and egregious, CMR should

also be awarded punitive damages.

Count II(Unfair Competition)

72. CMR repeats and realleges the allegations in paragraphs 1 through 71 of the

complaint as if fully set forth at length herein.

73. Defendants knew at all times that CMR had an exclusive recording agreement

with Carter and were informed that Carter had no right to license his works to Defendants.

74. Defendants demonstrated bad faith by failing to cease exploiting the Unauthorized

Recordings on their Tidal streaming service, despite knowing that Defendants had no legal right

in these works.

75. Defendants have acted unfairly by appropriating CMRs exclusive rights to

distribute and exploit Carters works, including, without limitation, the exclusive right not to

release or distribute them.

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76. Defendants have acted unfairly by causing actual confusion in the marketplace as

to whether CMR authorized or has otherwise been involved in the release of the Unauthorized

Recordings.






any other manner.






Count III(Conversion)

81. CMR repeats and realleges the allegations in the preceding paragraphs 1 through

80 of the complaint as if fully set forth at length herein.

82. Defendants have possession of files containing or constituting the Unauthorized

Recordings that Defendants are streaming on their Tidal service.

83. CMR is the owner of all of the Unauthorized Recordings, as well as the files

containing or constituting the Unauthorized Recordings.

84. Defendants have wrongfully and intentionally retained the files containing or

constituting the Unauthorized Recordings, to the exclusion of CMRs property rights.

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85. CMR has made a demand that Defendants turn over all master recordings, digital

files, work tapes and other items (including, without limitation, computer files) containing or

constituting the Unauthorized Recordings.

86. Defendants refusal to turn over to CMR the demanded files and materials

containing or constituting the Unauthorized Recordings constitutes an unlawful conversion of

CMRs property.






any other manner.






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Cash Money v. Aspiro (TIDAL) - Complaint

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