Art Etc. LLC v. Angel Gifts, Inc., 686 F.3d 654 (8th Cir.
July 27, 2012). Plaintiff buys library
of art images from defendant in an asset purchase agreement. Defendant signs promissory note for part of
purchase price. Promissory note has
arbitration clause. Plaintiff
discovers belatedly that art images belong to third parties who are asserting
copyright. Plaintiff sues in federal
district court seeking declaration that selling art images would violate the
Copyright Act. Defendant moves to stay
proceedings pending arbitration.
District court denies stay, Plaintiff appeals and Eight Circuit
affirms. The asset purchase agreement
had no arbitration agreement and reserved all litigation remedies. The arbitration clause referred only to
breaches of the promissory agreement or attempts to offset. Accordingly, the action for declaration of
infringement of the Copyright Act could proceed.
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