On January 24, 2017, Powley & Gibson, P.C. defeated a summary judgment motion brought by Kayne Anderson (“Kayne”) alleging that EIG is entitled to only one award of statutory damages per compiled annual volume of EIG’s publication and a partial summary judgment motion alleging that the statute of limitations limits EIG’s damages to infringement occurring three years prior to the filing of the complaint, while at the same time prevailing on summary judgment against all of Kayne’s affirmative defenses.

  1. Kayne’s Motion for Partial Summary Judgment Denied

For years, Kayne purchased a single-copy subscription to Oil Daily (“OD”), a daily publication provided by Energy Intelligence Group, Inc. and Energy Intelligence Group (UK) Ltd. (“EIG”) and routinely forwarded copies to Kayne employees and third parties. EIG sued Kayne in the U.S. District Court for the Southern District of Texas for copyright infringement.

Kayne moved for summary judgment on two issues. First, Kayne argued that an annual subscription to OD constituted a single “work” under the U.S. Copyright Act. Prevailing on this issue was critical to EIG because it would have a drastic impact on the amount of damages that could be awarded. The Court was not convinced by Kayne’s argument that the annual subscription to OD constituted a compilation (and therefore a single work), because a compilation involves compiling and arranging preexisting materials resulting in a new original work.  EIG’s daily issues of OD consist of current news and analysis in the oil and gas industry, not a compilation of preexisting materials. Moreover, EIG’s decision to sell annual subscriptions did not turn daily issues into an annual single work. The Court further noted that OD was not registered with the Copyright Office under a single annual registration number, nor was it sold or marked as an annual single work.  The Court denied summary judgment on this issue.

Second, Kayne sought partial summary judgment based on the three-year statute of limitations on copyright actions, seeking to dismiss all claims of infringement prior to three years before the filing of the lawsuit alleging EIG knew or should have known of Kayne’s infringing activities.  The Court noted that Kayne relied on factual evidence that, if true, could show that EIG had notice of facts that, in the exercise of due diligence, would have led to EIG’s actual knowledge of Kayne’s infringing activities and therefore the beginning of the limitations period. Because Kayne’s evidence could lead a reasonable fact-finder to infer that EIG exercised due diligence, the Court denied Kayne’s motion for partial summary judgment.

  1. EIG’s Motion for Partial Summary Judgment on Defendants’ Affirmative Defenses Granted Except for the Defense of Failure to Mitigate

In the answer to the Amended Complaint, Kayne asserted five affirmative defenses. Only one survived EIG’s motion for partial summary judgment. The Court granted EIG’s motion with regard to Kayne’s affirmative defenses of equitable estoppel, implied license, unclean hands/entrapment, and comparative fault.  First, Kayne argued that under the doctrine of equitable estoppel, it continued infringing OD because it was led to believe that EIG would not pursue damages beyond retroactive subscription fees for the prior infringement.  The Court noted that Kayne cited no case holding that such a belief, regardless of how it was arrived at, would support a finding of equitable estoppel, and that Kayne offered no evidence that it acted in reliance on its belief, whether reasonable or not.

Second, Kayne asserted the defense of implied license alleging that it was common “unwritten” practice for EIG to allow a subscriber’s secretary to access OD and make a copy for the subscriber.  The Court noted that such “ordinary business practices” would not be considered infringing activity, and that such activity would not require a license. The Court further found, even assuming for the sake of argument that such a practice would give rise to an implied license, there must be some conduct or expression from which the license can be implied, which Kayne failed to offer.

Third, Kayne asserted the defense of unclean hands/entrapment alleging that EIG, by design, “set a trap” for Kayne in an attempt to augment their damages by strategically delaying litigation.  The Court found that Kayne cited no examples of strategic delay providing the basis for an unclean hands defense.

Fourth, the Court found Kayne’s “comparative fault” defense to be inapplicable to copyright infringement claims.

Kayne’s affirmative defense of failure to mitigate, however, survived EIG’s motion. The Court held that Kayne’s burden of proof at the summary judgment stage was significantly lessened, and that a fact-finder could infer EIG’s actual or constructive knowledge from the available evidence such that the subsequent alleged infringement could have been avoided.

EIG also prevailed in successfully obtaining a Protective Order limiting discovery sought by Kayne that the Court found to be either irrelevant, hypothetical and/or not proportional to the needs of the case.

Energy intelligence Group, Inc. and Energy Intelligence Group (UK) Limited v. Kayne Anderson Capital Advisors, LP and KA Fund Advisors, LLC is civil action No. H-14-1903 in the Southern District of Texas.