Ariel (UK) Ltd. v. Reuters Group, PLC
Full Opinion (html_with_citations)
SUMMARY ORDER
Ariel (UK) Limited (âArielâ) appeals from the judgment of the District Court for the Southern District of New York (John F. Keenan, Judge) granting defendantsâ motion to dismiss Arielâs copyright claim with prejudice, dismissing Arielâs claims for breach of contract and declaratory relief, without prejudice, and declining to exercise pendent jurisdiction over Arielâs state law claims, entered on November 2, 2006. We assume the partiesâ familiarity with the procedural history, arguments on appeal, and the underlying facts, which are laid out in detail in the
âWe review the district courtâs grant of a Rule 12(b)(6) motion de novo, drawing all reasonable inferences in plaintiffsâ favor, and accepting as true all the factual allegations in the complaint.â Transhorn, Ltd. v. United. Techs. Corp. (In re Elevator Antitrust Litig.), 502 F.3d 47, 50 (2d Cir. 2007) (internal quotation marks, alteration, and citations omitted); see also Bell Atl. Corp. v. Twombly, â U.S.-, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). Our review is limited to the complaint and any undisputed documents attached as exhibits to it. See Fed.R.Civ.P. 10(c). We affirm for substantially the reasons given in the District Courtâs thorough and well-reasoned opinion.
Ariel's pleadings and the 1975 agreement between Ariel and Institutional Networks Corporation (âInstinetâ), predecessor to defendants, upon which Ariel bases its contract claims, demonstrate that defendants are valid licensees of the works Ariel claims defendants infringed. As the pleadings and 1975 agreement demonstrate, Ariel and Instinet were subject to a license agreement that granted each of them a perpetual, royalty free, worldwide, non-exclusive license to exploit the works at issue in Arielâs copyright claim. As the District Court found, the 1975 agreement also demonstrates that Instinet was free to operate and license others to operate the works Ariel claims were infringed. The District Court properly relied on Ariel's allegations to determine that defendants were licensees. See Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147, 167 (2d Cir.2003) (holding that allegations in the complaint are judicial admissions that bind a party âthroughout the course of the proceedingâ (internal quotation marks omitted)). Thus, we find no error in the District Courtâs holding that, as a matter of law, the defendants could not be sued for copyright infringement. See Davis v. Blige, 505 F.3d 90, 100 (2d Cir. 2007) (noting that a valid exclusive or nonexclusive license âimmunizes the licensee from a charge of copyright infringement, provided that the licensee uses the copyright as agreed with the licensorâ). Arielâs argument on appeal that it alleged, in the alternative, that defendants were not licensed is belied by the record. Ariel consistently argued that defendants were licensees, and any argument to the contrary amounted to nothing more than a late-breaking claim that it was entitled to rescission.
As to Arielâs potential rescission claim, assuming, arguendo, that Ariel was entitled to make the claim, the District Court did not err in finding that it was not justified because Ariel had not pled a breach of a condition precedent or one that was so fundamental, that, if proven, would trigger a rescission right. See September-tide Publâg., B.V. v. Stein & Day, Inc., 884 F.2d 675, 678 (2d Cir.1989) (â[Bjefore rescission will be permitted the breach must be material and willful, or, if not willful, so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract.â (internal quotation marks omitted)). While we have cautioned that district courts are ill-equipped to make judgments regarding rescission at the early stages of litigation, see Bassett v. Mashantucket Pequot Tribe, 204 F.3d 343, 356 n. 14 (2d Cir.2000), here the claim of rescission was not âplausibleâ on its face, and the District Court did not err in dismissing it, see Iqbal, v. Hasty, 490 F.3d 143, 157-58 (2d Cir.2007).
Finally, the District Court did not exceed its allowable discretion in not sua
We have considered all of Arielâs arguments and find them to be without merit. For the reasons set forth above, the judgment of the District Court is hereby AFFIRMED.