The opinion of the court was delivered by: Anita B. Brody, J.
On January 16, 2008, Beholder Productions Inc. ("Beholder") filed a complaint against Fred Catona, Gary Catona, Catona Group, Gotham Distributing Corporation ("Gotham"), Ultimate Voice Coach, LLC, and Ron Anderson, collectively "Defendants." Beholder alleges that Defendants committed copyright infringement in violation of 17 U.S.C. 501(b). On January 28, 2009, Defendants filed a Motion for Summary Judgment.
In early December 2004, Fred Catona met with Emilia Andrews ("Andrews"), one of the two owners of Beholder, to discuss whether or not Beholder would be interested in a producing DVDs, CDs, and ancillary materials of voice lessons entitled "The Ultimate Voice Coach." (Andrews Dep. 34-45 Dec. 14, 2006). A production company in Florida had been involved in the project but had recently backed out and a shoot was already scheduled for mid-December. Beholder agreed to take part in the project and on December 14, 2004, Beholder and Fred Catona (on behalf of himself and all other defendants) entered into a written contract. Andrews was present during the contract negotiations. In the contract, Defendants agreed to pay Beholder a "Production Budget Estimate Sum" of $25,000.00, a 25% mark-up of the production, a 5% commission of Fred Catona's Royalties, and additional services and out-of-pocket expenses to produce the Ultimate Voice Coach. (Pl.'s Br. in Opp'n. to. Defs'. Mot. for Summ. J. Ex. A.) Defendant Gotham was to handle all of the replication, packaging, distribution, marketing, and advertising for the Ultimate Voice Coach. (Andrews Dep. 30 Jan. 16, 2009.) The contract stated that "[a]ll rights to the final productions are reserved to Beholder Productions, Inc. until all payments have been made." (Pl.'s Br. in Opp'n. Ex. A.) Beholder understood this to mean that they owned the rights to the piece they produced until they were paid in full. (Andrews Dep. 30 Jan. 16).
On February 4, 2005, Fred Catona signed Beholder's Client Approval Form indicating that he had received and approved of two versions of the Ultimate Voice Coach DVD (a QVC version and a standard version) and two versions of the Ultimate Voice Coach Audio CD (a QVC version and a standard version). (Defs.' Mot. for Summ. J. Ex. B.) Beholder's "purpose" in delivering the master copies to Gotham by February 4 was so that the product could go to QVC by February 5, after which QVC had one month to check the product for quality assurance. (Andrews Dep. 40 Jan. 16). Beholder expected that Gotham and Fred Catona would go through the "replication process" to copy and distribute the product within a few months of Fred Catona signing the Client Approval Form. (Id.) Beholder stated that there were "orders immediately" for the product in February and March. (Andrews Dep. 83 Dec. 14, 2006.) The QVC version remained unchanged, was accepted by QVC, and aired on that program March 6 through 9, 2005. (Andrews Dep. 41 Jan. 16; Andrews Dep. 93 Dec. 14.) Fred Catona requested several changes to the standard version. (Andrews Dep. 41 Jan. 16.)
In March 2005, Beholder turned over the finished product of the standard version to Fred Catona understanding that Gotham would copy and distribute the product for sale. (Andrews Dep. 41-42 Jan. 16.) It was always Beholder's intent to give the final product to Gotham to distribute because Beholder is not a distribution house. (Id. 54.) Beholder gave the final product to Gotham to copy and distribute and did not tell Gotham or Fred Catona not to do so. (Id. 43.) Beholder sent Fred Catona an invoice on or around March 7, 2005. (Andrews Dep. 83 Dec. 14.) When questioned, Andrews couldn't remember if Beholder sent any invoices prior to March 7, 2005. (Id.)
Beholder billed Defendants a total of $97,989.12, but Defendants have refused to pay Beholder anything beyond an initial payment of $25,300.00. Therefore, Defendants allegedly owe Beholder $72,689.12 plus interest, as provided in the contract. Additionally, Beholder claims entitlement to 5% of the royalties paid by Gotham to Fred Catona, totaling $3,279.50. Beholder filed a breach of contract action which is currently pending against Defendants in the Court of Common Pleas of Montgomery County.*fn2
In July 2007, Beholder received Certificates of Copyright Registration as to the Ultimate Voice Coach audio recordings, photographs and video recordings. Beholder alleges that Defendants copied, printed, marketed, sold and distributed the copyrighted Ultimate Voice Coach materials without Beholder's permission.
III. Standard of Review and Jurisdiction
Summary judgment must be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Facts are material if they might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue exists when the evidence is such that a reasonable jury could return a verdict in favor of the non-moving party. Id. at 248-52.
Summary judgment is appropriate as a matter of law when the non-moving party has failed to make an adequate showing on an essential element of his case, as to which he has the burden of proof at trial. Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 804 (1999). To overcome a summary judgment motion, a plaintiff may not rely on allegations or denials; a plaintiff must set out specific facts showing a genuine issue for trial. Fed. R. Civ. P. 56(e).
Defendants claim that summary judgment is appropriate because 1) Defendants' copying of the work was not "unauthorized;" 2) Beholder's copyright is invalid; and 3) Beholder's claims are barred by laches and copyright estoppel. Defendants further contend that Beholder is not entitled to statutory damages or attorneys' fees. In their Supplement to their Motion for Summary Judgment (Doc. #33), ...