Beidleman, a photographer, entered into a limited license agreement with a textbook publisher for the reproduction of his photograph of Mt. Everest in 40,000 textbooks. The agreement included a typical arbitration clause stating that any disputes in connection with the agreement would be settled by arbitration in New York City. After printing the contemplated textbooks, the publisher allegedly proceeded to produce in excess of 1,000,000 more copies without Beidleman's consent. Not surprisingly, Beidleman filed suit alleging copyright infringement.
After both parties moved for a stay of the proceedings, Beidleman stated that he would not agree to arbitration of the matter. The publisher, thus, filed a motion for an extension of the stay, and informed the court that it would seek to compel arbitration by filing an action in the U.S. District Court for the Southern District of New York.
In granting the publisher's motion, the court cited to the Federal Arbitration Act ("FAA") and various cases that held arbitration to be a favored means of dispute resolution. Contractual language pertaining to arbitration must be liberally construed by the courts, with any doubt being resolved in favor of arbitration. Whether or not a certain claim is arbitrable is founded on principles of contract interpretation since an arbitration clause is simply a type of contract provision.
Beidleman's opposition to the motion was comprised primarily of two arguments. Besides arguing that the copyright claim is outside the scope of the arbitration clause, he also asserted that the limited license expired when the publisher reproduced the 40,000 copies authorized by Beidleman. Therefore, the reasoning goes, the arbitration clause should not apply to any additional copies made after the agreement allegedly expired. I don't know if this latter argument will be successful, but kudos to Beidleman for some creative lawyering.
The court held that Beidleman's arguments addressed both the scope of the arbitration clause and whether the licensing agreement expired, thus, nullifying the arbitration provision. "Questions concerning the scope of an arbitration should be decided in favor of arbitration." The court, therefore, granted the stay of all proceedings pending a determination by the U.S. District Court for the Southern District of New York as to whether or not it should compel arbitration.
Beidleman v.Littell, 2006 WL 2425321 (N.D. Ill., Aug. 21, 2006).