On June 5, 2026, the U.S. District Court for the Southern District of New York denied Virtus. Inc.’s motion for a preliminary injunction against our client, the music distribution company Orchard Enterprises NY.
Virtus sought to preliminarily enjoin Orchard from commercially exploiting and distributing certain master recordings during the pendency of its action for copyright infringement, which alleged that the parties’ distribution agreement had terminated in June 2025, once Orchard had recouped its advance. Orchard maintained that the agreement would terminate only on the date certain provided in the contract, which was years in the future.
The Court rejected Virtus’s effort to frame the case as a copyright dispute, describing it instead as “a breach of contract action masquerading as a copyright dispute.” The Court held that Virtus sought a mandatory injunction because the requested relief would disrupt Orchard’s decade-long distribution of the recordings, meaning Virtus would have to meet a heightened legal standard and prove a substantial likelihood of success on the merits to merit injunctive relief.
Judge Garnett concluded that Virtus had not shown a likelihood of success on the merits, even under the typical standard. The Court found the phrase “and/or” in the 2022 amendment ambiguous and held that Virtus’s interpretation conflicted with another provision stating that the agreement would “in no event” end before Orchard’s advances were fully recouped. The Court also found that the drafting history did not establish that the parties intended to change the agreement so that it could terminate solely upon recoupment, as Virtus contended.
The Court also held that Virtus failed to show irreparable harm, noting that Virtus waited months after the alleged infringement began before seeking emergency relief and any harm could be remedied with money damages.
Partner Cynthia Arato and associate Ann Philip handled this matter. Orchard’s brief can be found here. A copy of the court’s decision can be found here.