Teri Woods Publishing LLC v. Amazon.com Inc.

In case involving claims of copyright infringement and breach of licensing agreement between publisher and audiobook distributors, Second Circuit affirms district court decision dismissing the claims, finding that licensing agreement unambiguously allowed for distribution of publisher’s works.

In December 2018, Teri Woods Publishing LLC (TWP), an independent publisher holding exclusive licenses to copyrighted books authored by Teri Woods, entered into a licensing agreement with Urban Audio, which granted Urban Audio rights to distribute audiobook versions of TWP’s works. Urban Audio then granted its rights under that agreement to Blackstone Audio, which subsequently entered into a sublicensing agreement with Amazon and its subsidiary, Audible. Urban Audio, Blackstone Audio, Amazon and Audible distributed TWP’s works on their respective online subscription platforms. Their subscriber members paid monthly fees that allowed them to stream or download TWP’s works, among others, without making specific payments for those audiobooks. 

TWP terminated the license in January 2023 and filed suit against the four distributors, claiming that Urban Audio breached the parties’ licensing agreement and that all defendants infringed on TWP’s copyrights by distributing TWP’s works in a manner that exceeded the scope of the license. The district court granted defendants’ motions to dismiss the copyright claims, finding that the license unambiguously granted them the right to distribute the works via the audiobook subscription-distribution model. The district court also declined to exercise supplemental jurisdiction over the state law breach of contract claims against Urban Audio. On appeal, a Second Circuit panel affirmed. 

TWP first argued that the license was ambiguous as to whether defendants’ distribution model exceeded the scope of the license. The panel disagreed, concluding that the relevant provision in the license did not include any requirements as to how the works could be distributed and did not contain any specific limitations on how Urban Audio was allowed to distribute the works. 

Relying on a separate royalty provision in the license, TWP next argued that defendants’ distribution model resulted in the “free” distribution of TWP’s works, conflicting with the parties’ intent to generate revenues for TWP. The Second Circuit similarly found nothing in that provision that required or limited how the works could be distributed. The panel also found that language in the royalty provision regarding “Playaway format sales,” which required royalties on a per-unit basis in certain conditions, was inapplicable to internet downloads. The panel recognized that the parties could have negotiated a per-unit royalty schedule for internet downloads but did not, and declined to read such a distribution limitation into the license.

The Second Circuit further noted that TWP’s arguments regarding which royalty provisions were triggered by defendants’ distribution models focused on ambiguities in the payment provisions in the license, rather than on the scope of distribution rights. The court accordingly construed TWP’s allegations as only a contractual claim over what royalties TWP should have received for defendants’ distribution of the works—not a copyright infringement claim.

TWP finally argued that defendants exceeded the scope of the license by allowing their members to listen to excerpts of the works for free, pointing to language limiting the grant of distribution rights to “copies of unabridged readings” of the works. However, the Second Circuit agreed with the district court that TWP did not allege that defendants distributed abridged (i.e., condensed or otherwise altered) versions. Rather, the panel observed, the complaint merely alleged that Amazon and Audible failed to pay royalties on “listens to TWP Works lasting fewer than five minutes.” The panel concluded that such allegation again suggested a claim for breach of contract, but not for copyright infringement. 

Summary prepared by Safia Gray Hussain and Alex Loh