Two Russian film studios [the studios] granted rights to produce and distribute DVD versions of their films to multiple licensees. Each licensee received different limited exclusive rights. Krupny Plan, which could distribute the films only in the original Russian language, sublicensed its rights to the films for home use in the United States and Canada to Close-Up, a New York corporation. Ruscico could distribute multilingual versions of the same films that were dubbed or subtitled and sublicensed its rights to its distributor in the United States, Image. At the time of licensing, none of the parties considered that a viewer of the subtitled films could simply turn off the subtitles and hear the film in any of several languages, including Russian. None of the agreements had a requirement that the films prevent the disabling of subtitles. Close-Up brought this action against Ruscico and Image for damages from copyright infringement, claiming that it is the "exclusive" U.S. licensee of the Russian language-only versions of the films. The federal district court held for the defendants, and Close-Up appealed.
1. What are the "limited exclusive" rights granted to the licensees in this case?
2. What is the difference between the rights granted to the plaintiff and those granted to the defendants?
3. Do you agree or disagree with the court's interpretation of the license agreements?
4. What does this case tell you about negotiating and drafting a licensing agreement?