Contract analysis

I. INTRODUCTION At its core, this is a straightforward copyright infringement action. Defendant Crescendo Digital Media, Inc. ("Crescendo"), a Delaware corporation headquartered at 3100 Esperanza Crossing, Suite 600, Austin, Texas 78758, used forty-seven (47) copyrighted musical compositions and thirty-two (32) copyrighted sound recordings belonging to Plaintiff Marguerite D. Fonseca — without any license, authorizat

II. THE PARTIES A. Plaintiffs. Marguerite D. Fonseca. Ms. Fonseca is fifty-four years old and resides at 4827 Laurelgrove Avenue, Studio City, California 91604. She is a singer-songwriter, composer, and recording artist whose career spans twenty-eight years and encompasses Latin pop, jazz, and contemporary R&B. Over the course of her career, Ms. Fonseca has released nine studio albums, earned three Grammy Award nomin

III. PROCEDURAL HISTORY The following timeline sets forth the key procedural events in this matter: February 20, 2023 — Engagement of Counsel. Calderwood & Harkness LLP was engaged by Ms. Fonseca to investigate and pursue claims arising from Crescendo's unauthorized use of her copyrighted works. The matter was opened under firm Matter No. 1035-00003. March 6, 2023 — Cease-and-Desist Letter. Calderwood & Harkness sent

IV. LIABILITY Plaintiffs' case on liability is overwhelming. The core facts establishing infringement are undisputed, copyright ownership is not contested, and Crescendo's affirmative defenses are legally and factually deficient. The following sections address each element in turn. A. Copyright Ownership and Registration Ms. Fonseca holds valid, timely registered copyrights with the United States Copyright Office for

1. Good Faith / Innocent Infringement (17 U.S.C. § 504(c)(2)). Crescendo's primary defense is that it reasonably and in good faith relied on the blanket license it had previously obtained through Peregrine Music Group, LLC. This defense fails for multiple reasons. First, the Peregrine license expired by its own terms on December 31, 2018. The license contained no automatic renewal provision and was non-transferable.

2. Implied License. Crescendo's assertion of an implied license is equally meritless. An implied license arises only when the totality of the circumstances indicates that the copyright owner intended to grant permission for the use at issue. See Effects Associates, Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990). There must be evidence of conduct by the copyright holder from which a license can reasonably be inferre

3. Estoppel and Laches. Crescendo's estoppel and laches defenses are predicated on the assertion that Ms. Fonseca delayed unreasonably in asserting her rights. This assertion is factually baseless. Ms. Fonseca had no knowledge of the infringement until late 2022, when the Thornfield audit revealed the unauthorized streaming and sublicensing activity. Upon discovering the infringement, she acted promptly: she engaged

4. Statute of Limitations (17 U.S.C. § 507(b)). The Copyright Act provides a three-year statute of limitations for civil actions. 17 U.S.C. § 507(b). Under the discovery rule adopted in the Ninth Circuit, a claim accrues when the plaintiff knew or reasonably should have known of the infringement. Roley v. New World Pictures, 19 F.3d 479, 481 (9th Cir. 1994). Ms. Fonseca discovered the infringement in late 2022 throug

5. Fair Use (17 U.S.C. § 107). Crescendo has not asserted a fair use defense, and any such defense would be frivolous. The unauthorized use was entirely commercial in nature; Crescendo reproduced and streamed complete copyrighted works (not excerpts or transformative adaptations); the works are creative and highly original; and Crescendo's use served as a direct market substitute for properly licensed streams. All fo

6. Failure to Mitigate. Crescendo's failure-to-mitigate defense is without merit. Ms. Fonseca acted promptly upon discovering the infringement. She had no prior knowledge of the unauthorized use and no obligation to monitor Crescendo's platform for compliance with a license that had expired years earlier. A copyright holder has no duty to police the conduct of a former licensee, particularly when the licensee's conti

V. DAMAGES A. Forensic Analysis Plaintiffs' damages have been quantified through a rigorous forensic analysis conducted by Dr. Ellen Marchetti, CPA, CFF, of the Lakeshore Forensic Accounting Group, LLC. Dr. Marchetti is a certified public accountant and certified in financial forensics. She has extensive experience in royalty audits and damages quantification in intellectual property disputes, having served as a fore

VI. CONTEXT: THE IMPACT ON MS. FONSECA While the legal analysis and damages calculations set forth above provide the framework for evaluating this case, it is important for the mediator to understand the real-world impact of Crescendo's conduct on Ms. Fonseca and her livelihood. Ms. Fonseca is an independent artist who has spent twenty-eight years building a career and a catalog of music that she owns and controls. H

VII. SETTLEMENT POSITION A. Plaintiffs' Objectives Plaintiffs have identified the following core objectives for a mediated resolution of this dispute:

1. Full compensation for the unauthorized exploitation of Ms. Fonseca's compositions and sound recordings during the four-year infringement period (January 1, 2019 through December 31, 2022).

2. A prospective licensing arrangement that legitimizes the ongoing relationship between the parties and provides Ms. Fonseca with guaranteed revenue from any continued use of her works by Crescendo.

3. Avoidance of the expense, delay, and uncertainty of continued litigation for both sides.

4. Confidentiality regarding the terms of any settlement agreement.

5. Finality through the execution of a comprehensive mutual release and dismissal of the action with prejudice. B. Proposed Settlement Framework Plaintiffs entered this mediation in good faith and are prepared to resolve this dispute on reasonable terms. As noted above, Plaintiffs' pre-litigation demand was $2,312,200. The proposed settlement framework set forth below reflects a pragmatic assessment of the case, a ge

1. Lump-Sum Cash Payment. Plaintiffs propose a total cash payment in the range of $1,500,000 to $1,700,000, reflecting the following components: • Back-royalties of $1,087,200, as calculated by Dr. Marchetti based on Crescendo's own streaming data, sublicense revenue, and industry-standard royalty rates. This figure represents the minimum amount owed to Plaintiffs for the unauthorized use of their copyrighted works o

2. Prospective Licensing Arrangement. In addition to the cash payment for past infringement, Plaintiffs propose the establishment of a forward-looking licensing arrangement that would permit Crescendo to continue streaming Ms. Fonseca's works on legitimate terms. The key terms of the proposed license are as follows: • Scope: A non-exclusive license permitting Crescendo to continue streaming the forty-seven (47) compo

3. Audit Rights. The settlement agreement would include annual audit rights permitting Plaintiffs — through Thornfield Music Administration or a designated independent auditor — to audit Crescendo's streaming records, sublicense agreements, and revenue data to verify the accuracy of royalty payments. If any audit reveals discrepancies in excess of five percent (5%) between reported and actual royalties owed, Crescend

4. Mutual Confidentiality. Plaintiffs propose a standard mutual confidentiality provision covering the terms of the settlement agreement and the mediation process. The existence of the settlement (but not its terms) may be disclosed as necessary. Customary carve-outs would apply for tax reporting obligations, disclosures required by law or court order, and disclosures to Plaintiffs' catalog administrators (i.e., Thor

5. Mutual Release and Dismissal. The settlement would include a mutual release of all claims arising from the identified works for the period from January 1, 2019 through the date of execution of the settlement agreement. The release would not extend to any future breach of the prospective license or to any works not identified in the settlement agreement. Upon execution of the settlement agreement and receipt of the

VIII. CONCLUSION Plaintiffs' case on liability is overwhelming. The key facts are undisputed: Crescendo used Ms. Fonseca's copyrighted works for four years without any license or authorization, generating millions of streams and hundreds of thousands of dollars in sublicensing revenue, none of which was shared with the rights holder. Crescendo's sole defense — reliance on an expired license from a defunct distributor