The Entertainment, Arts and Sports Law Blog

By Bennett Liebman

In the course of final passage of the State budget, the State legislature, followed by gubernatorial approval, passed a significant extension and expansion of New York’s existing film tax credit. The 30% film production tax credit was extended for five additional years, and it was funded at the rate of $420 million per year for this five year period.(1)

Additionally, the legislature added a standalone credit for productions that do their post production in New York State. Eligible productions that complete 75 percent of their post production in New York can now apply for a 10% credit for the post production work done in NY.(2)

The legislation allocates additional $420 million in each of 2010, 2011, 2012, 2013, and 2014 and defines this as an "additional pool” for those years. Previously, the legislature had allocated $85 million in 2010, $90 million in 2011 and 2012, and $110 million in 2013 for the film credit.(3) In 2009, the legislature allocated an additional $350 million for the film credit for that year (4) on top of $75 million that had been previously allocated.(5)

New York State is among numerous states that have provided tax incentives to the film and TV industries. According to the nonpartisan Tax Foundation, 44 states plus the District of Columbia and Puerto Rico offered significant movie production incentives in 2009, up from five states in 2002.(6) 28 of these states offered tax credits. In the Unites States, the film tax credit concept started in Louisiana which in 1992 passed legislation for tax credits for investment losses for films which contained substantial Louisiana content.(7) The initial Louisiana experiment did not spur much added economic activity. Minnesota similarly enacted a film credit in 1997, (8) but by 2002, there were only four states in the nation that had film incentives. New Mexico (9) and Louisiana,(10) however, changed the entire ballgame in 2002 by expanding the monetary value of the film tax credits significantly. The 2002 Louisiana legislation included “a series of incentives designed to revitalize the state's movie business, which had declined in part because of a nationwide migration to Canada, where producers enjoy generous incentives and a favorable currency exchange rate.”(11)

New York State has one of the larger film production industries in the United States. “Sources generally conclude that the states of California, New York, and New Mexico receive the most economic impact (in that order.)”(12) The Motion Picture Association in 2006 estimated a $1.5 billion economic effect for the film industry in New York.(13) The New York Governor’s Office for Motion Picture and Television Development states that in 2009 the film production credit led to $1.88 billion in direct production spending.(14)

New York started its film production credit in 2004 with the aggregate amount of annual tax credits capped at $25 million (15) It was expanded in 2006 to increase the cap to $60 million.(16) It was further expanded in 2008 and 2009 to increase the cap, and with the 2010 legislation, it has reached its highest levels of State support.

The New York 30% credit applies only to below the line film expenses. According to the Governor’s Office for Motion Picture and Television Development, below the line film expenses “mean hard costs of production including the salaries of crew and extras as well as equipment and facility rental, lab costs, construction materials, props, wardrobe, locations, editing and catering, etc. Typically, BTL represents 65 percent of the average budget.”(17) Thus, the 30% credit would typically provide a benefit that approximates “18 percent of a project’s total budget.”(18)

Besides the additional $2.1 billion in funding, the 2010 legislation placed some qualifications on claiming the credit. The legislation specifies a time frame which will determine the tax year for which the credit can be claimed. It requires that at least 10% of the principal shooting days be spent at a qualified New York film production facility. This 10% requirement is waived for “qualified independent film production companies” which are smaller entities defined as entities “principally engaged in the production of a qualified film with a maximum budget of fifteen million dollars, and (ii) controls the qualified film during production, and (iii) either is not a publicly traded entity, or no more than five percent of the beneficial ownership of which is owned, directly or indirectly, by a publicly traded entity”.(19)

The legislation requires that the completed DVD release of the production either contain an end credit acknowledging New York State support of the production or contain a New York promotional video approved by the governor's office of motion picture and television development. The production must also “certify that it will purchase taxable tangible property and services, defined as qualified production costs” only from companies registered to collect sales tax in New York.(20)

Postproduction costs of a qualified production will only be eligible for the general film credit where “the post production costs paid or incurred that is attributable to the use of tangible property or the performance of services in New York in the production of such qualified film equals or exceeds seventy-five percent of the total post production costs spent within and without New York in the production of such qualified film.”(21)

The 2010 legislation also provided a separate credit that would cover 10% of work at a post production facility. This would cover works not eligible for the general 30% film production tax credit. It would cover works only where the costs at the New York post production facility met or exceeded “seventy-five percent of the total post production costs paid or incurred in the post production of the qualified film at any post production facility.”(22)

$7 million is allocated annually for the post production tax credit. A separate chapter amendment makes clear that this $7 million allotment is part of and not in addition to the overall $420 million annual allocation.(23) The chapter amendment provides “that the post production tax credit will be allocated $7 million annually from the $420 million pool of available tax credits. Unallocated post-production tax credits may be made available for the Empire film production credit upon the exhaustion of the aggregate amount of film credits.”(24)

In an especially tight budget year, there was significant legislative support for the film credit in New York. Governor Paterson’s initial budget proposed the $2.1 billion in additional funds for the credit, and the only action taken by the legislature to in any way alter this funding was to use $35 million of the $2.1 billion allocation to establish the post production credit.

There was little substantive discussion given to curtailing or suspending the film credit. There were few questions raised about the overall merit of the program. While the Governor’s Office for Motion Picture and Television Development maintains that the funding is necessary to make New York competitive with states such as Connecticut Michigan and Massachusetts that have more generous film credits, (25) some studies have questioned the overall value of the film credit.

The Tax Foundation has stated, “While broad-based tax competition often benefits consumers and spurs economic growth and development, industry-specific tax competition transfers wealth from the many to the few. Movie production incentives are costly and fail to live up to their promises.”(26)

“A 2005 study from the Louisiana Legislative Fiscal Office found that the state could expect to recoup 16 percent to 18 percent of the tax revenue it spends on the film incentive program. This means Louisiana—often held up as the standard-bearer for successful film incentive programs—loses about 83 cents for every dollar it spends on movie production incentives.”(27) A Pennsylvania legislative study found some limited justification for its film credit. The report stated, “While there is a net fiscal loss when comparing the net present cost of the Film Tax Credit program ($58.2 million) to the taxes generated by productions directly receiving tax credits ($17.9 million), there is a net fiscal gain to the Commonwealth of $4.5 million when considering all of the revenues generated by the entire industry. While some of this activity would occur without the benefit of the FTC, a significant proportion of this activity would be at risk without such a tax credit program.”(28)

This year, Iowa, Kansas, and New Jersey terminated or temporarily suspended their film tax credit program, the first states in the nation to do so.(29) The Iowa suspension was largely due to corruption found in the film office,(30) and the New Jersey suspension, which was based on budgetary concerns, has been harshly criticized by officials in Bergen County which has often been the site of Law& Order SVU episodes.(31)

Nonetheless, a serious review of the New York film credit will not likely occur in 2010.

1Ch. 57, Part Q, L. 2010.
2Id. See Tax Law §§31, 210.41,and 606.(qq).
3 Ch. 57, L. 2008.
4 Ch. 57, L. 2009.
5See note 3 supra.
6 Tax Foundation, “Study: Film Tax Credits, Production Incentives Fail to Spur Economic Growth,” January 14, 2010, http://taxfoundation.org/research/show/25707.html.
7 Louisiana Act 894 (H.B. 252) (1992).
8 Tax Foundation, “Movie Production Incentives: Blockbuster Support for Lackluster Policy,” January 2010; The Hollywood Reporter ,June 25, 1997.
9 2002 N.M. ALS 36.
10 2002 La. ACT 6.
112002 La. ACT 6; La. R.S. 47:6007; Stewart Yerton, “Counting on Film Credits,” New Orleans Times Picayune, May 11, 2003.
12 Michal H. Salima, “State Film Tax Incentives and the Related Potpourri of Federal Income Tax and Tax Accounting Considerations,” 62 The Tax Lawyer 1085 Summer, 2009.
13Motion Picture Association of America, “The Economic Impact of the Motion Picture and Television Production Industry in the United States,” 13-14 (2006), http://www.mpaa.org/press_releases/mpa%20us%20economic%20impact%20report_final.pdf.
14 Report on the Empire State Film Production Tax Credit, August 2010, http://www.tax.state.ny.us/pdf/stats/policy_special/film_production_credit/report_on_the_empire_state_film_production_credit_august_2010.pdf .
15Ch. 60, L. 2004.
16Ch. 62, L. 2006.
17 See note 14 supra at p. 24.
18 Id. Besides the state film tax credit, new York City provides a 5% credit applied to the applicant's New York City tax liability. See Tax Law, §1201-a.(b).
19 Tax Law, §24.(b)(7).
20Tax Law §24.(a)(4).
21 Tax Law §24.(b)(1).
22 Tax Law §31.
23 Ch. 312, L. 2010.
24 New York State Assembly Memorandum in Support of Legislation, A. 11678.
25 See note 14 supra at 24.
26See note 8 at 16. See also Mark Sanchez, “Tax Foundation Report Hits Film Incentives by States,” West Michigan Business Review, January 14, 2010 http://www.mlive.com/business/west-michigan/index.ssf/2010/01/tax_foundation_report_hits_fil.html.
27Tax Foundation Commentary, “Michigan Should Stop Red-Carpet Tax Treatment of Film Industry,” May 4, 2010 http://www.taxfoundation.org/research/show/26275.html.
28 Pennsylvania’s Film Production Tax Credit and Industry Analysis, Legislative Budget and Finance Committee May 2009, Pg. 5 http://lbfc.legis.state.pa.us/reports/2009/35.PDF.
29 Tax Foundation, “A Review of 2010’s Changes in State Tax Policy, “August 23, 2010. http://www.taxfoundation.org/research/show/26645.html.
30Associated Press, “Iowa AG Files Charges over Film Tax Credits,” February 8, 2010 http://wcco.com/local/film.tax.credits.2.1480422.html. Corruption issues have also arisen in Louisiana. See “Film Tax-Credit Scam That Ensnared Dozens With Ties To New Orleans Saints Leads to Guilty Plea,” New Orleans Times Picayune, May 13, 2010, http://www.nola.com/crime/index.ssf/2010/05/film_tax-credit_scam_that_ensn.html; “Editorial: Lights, Camera, Corruption,” New Orleans Times Picayune, August 20, 2007, http://www.nola.com/news/t-p/editorials/index.ssf?/base/news-4/1187589162244190.xml&coll=1.
31“Freeholders Call for Restoration of Tax Credit for NJ Filmmakers,” South Bergenite, August 26, 2010, http://www.northjersey.com/arts_entertainment/101535368_Locals_could_lose_big_on_area_filming_loss.html; “Law & Order: SVU Moves Production,” Philadelphia Business Journal, July 30, 2010, HTTP://WWW.BIZJOURNALS.COM/PHILADELPHIA/BLOGS/STIMULUS_TRACKER/2010/07/LAW_ORDER_SVU_MOVES_PRODUCTION.HTML.

By Joel L. Hecker

This copyright infringement proceeding in the U.S. District Court for the Southern District of New York case became a little simpler on August 20, 2010, when the parties filed a stipulation with the court dismissing AP photographer Mannie Garcia from the case. As you may recall, Garcia was the photographer who took the photograph which was used as the basis for Shepard Fairey's poster. Although Fairey initially claimed that he relied upon a different photo, he later recanted, admitting that he had lied, thereby removing the question of which photo was copied.

Garcia dropped his claim that he owns the copyright to the photo and AP dropped its counterclaim against him. This is not surprising since the documentary evidence filed in the case appeared to clearly establish that the copyright did in fact belong to AP.

Judge Hellerstein, who has in the past pushed for a resolution to the case, has now scheduled what he anticipates to be a three week trial for March 21, 2011, at which time the selection of an eight person jury will commence.

HeckerEsq.com

In an exciting opportunity for EASL Section Members, we are offering the ability to Blog for free admission to an EASL Section CLE program.

EASL Section Members may write for the EASL Blog about a particular EASL CLE program and earn admission to that program free of charge in exchange for the blog entry, provided:

a) the Member had a prior blog (not for CLE) published on the EASL Blog within the past three (3) months, or had an article published in the EASL Journal within the past twelve (12) months;

b) the Member makes the request for approval to write for the Blog at least one week prior to the CLE program date; all such requests are made to the Editor of the EASL Blog, Elissa D. Hecker (eheckeresq@yahoo.com), who makes the final decision;

c) Members are limited to one blog-for-CLE per year; and

d) Annual Meeting CLE Programs, CMJ Programs, Annual Fall and Spring Meeting Programs are excluded.

e) In the event the blog is not submitted within two weeks of the program date, the blog-for-CLE offer is cancelled and the Member will be billed for the program; there will be no extensions.

We hope that many good writers will be interested in this wonderful program and participate.

Please let me know if you have any questions or would like to volunteer pursuant to the guidelines listed above.

Elissa D. Hecker, EASL Blog Editor
eheckeresq@yahoo.com

I am pleased to announce the appointments of Elisabeth Conroy, Eva Dickerman and Jenna Bass Levy as EASL’s first Law Student Liaisons for the 2010-2011 academic year. As Law Student Liaisons, they will attend EASL Executive Committee meetings, participate in the lively exchange of ideas with EASL colleagues, assist with EASL programs and serve as the voice for their fellow classmates.

Elisabeth Conroy is currently in her first year of law school at the Syracuse University College of Law. She graduated magna cum laude from Syracuse University (’08) where she majored in Art History. She then completed her Master of Arts in Art Business at Sotheby's Institute of Art - New York (’09) and wrote a Master’s Thesis entitled, “The Evolution of the Chinese Contemporary Art Market.” Elisabeth's interests include traveling, reading historical non-fiction, 18th century French art, and studying Mandarin.

Eva Dickerman is a second year student at Columbia Law School where she has been designated as a Harlan Fiske Stone Scholar and serves on the editorial staff of the Columbia Journal of Law and the Arts. Eva received her B.A. from Harvard University (’08), where she graduated Phi Beta Kappa, and Magna Cum Laude with Highest Honors in History. Before entering law school, Eva worked in the entertainment and film industry. This past summer she was a Summer Associate at Davis Wright Tremaine LLP. Eva has a long-standing interest in the arts and received a Degree with Distinction from the Pre-College Division of the Juilliard School with a focus in violin performance.

Jenna Bass Levy is a second year student at the New York University School of Law where she is a staff editor for the Annual Survey of American Law and Co-Chair of the Intellectual Property Entertainment Law Society Arts Committee. She spent this past summer interning for the legal department at the Solomon R. Guggenheim Foundation. Jenna is a summa cum laude graduate of the University of Pennsylvania ('08) where she studied political science and art history. She enjoys attending art exhibitions, photography and traveling.

Please join me in welcoming Elisabeth, Eva and Jenna as EASL’s first Law Student Liaisons!

Reminder: Register online at www.nysba.org/creativetime by September 8th

CREATIVE TIME—BRINGING CUTTING EDGE ART TO THE PUBLIC

Wednesday, September 15, 2010 | 6 pm - 8 pm

At the Benjamin N. Cardozo School of Law
55 Fifth Avenue - Jacob Burns Moot Court Room,
(off lobby on the first floor) New York, NY
(between 12th and 13th Streets)

Co-sponsored by the EASL’s Pro Bono and Fine Arts Committees along with the Cardozo Intellectual Property Program and Art Law Society

Program Description:
Creative Time is a cutting edge non-profit based in New York City that commissions innovative art in the public realm across all disciplines and across the globe. From the stunning Tribute in Light, the light installation which shines as an “ethereal surrogate for the absent towers,” to Self-Roaming,the immersive and interactive cityscape created at Art Basel Miami Beach, Creative Time presents ground-breaking and challenging art that pushes culture into fresh new directions. Katie Hollander, Creative Time's Deputy Director, and Judith Church, Esq. from Debevoise & Plimpton LLP, counsel to Creative Time, will present several of their projects and discuss some of the fascinating legal issues involved in exhibiting public art.

Come hear this exciting program with visuals and join us for refreshments!

Registration:
$10 for EASL Members and Non-Cardozo Law Students
$20 Non-Members

Free for Cardozo Law Students (must sign up at ipprogram@yu.edu)
Please register at www.nysba.org/creativetime by September 8, 2010
THIS IS A NON-CLE EVENT

By Monica Pa

This panel was held on Friday, August 6, 2010 at the InterContinental Hotel in San Francisco.

The panel included Richard J. Idell, Idell & Seitel; Jessica Darraby, the Art Law Firm; Samuel Lew, Feldman Gale PA; Jann Moorhead; and Rob Rieders, Pixar Animations Studios. This blog entry only discusses Rob’s presentation, which I thought raised excellent points about entertainment licensing by a content creator.

Pixar has been involved in numerous award-winning animated movies, including Toy Story, Up, Cars, etc. Rob’s presentation provided practice tips for how to negotiate and work with content owners, licensors, creative executives and the marketing team in setting forth the parameters of the licensing agreements and the scope of permissible use for creative works.

He used the movie Toy Story as an example of various entertainment licensing issues that come up in a movie. Toy Story licensed a tremendous number of characters (e.g., Ken and Barbie, Mr. Potato Head, Slinky the dog, lots of Fisher Price toys, etc.). When you are licensing a character, you want to consider all the artistic interpretations of the licensed elements and potential changes to the brand identity from these interpretations. For example, if you are licensing Mr. Potato Head, you want to think about what happens when a toy becomes a “living character,” animated with a voice, personality and 3D design. Similarly, if you are licensing a historic character like Kasper the Ghost, and the licensee intends to update this character, are these updates going to be appropriate for the character? Will it be positive for the brand and/or the overall line of business?

For example the movie Cars animated several iconic cars and gave them distinct personalities. Pixar depicted the 1960 VW Bus as an old hippie van narrated by George Carlin. The 1959 Chevrolet Impala was updated as a snazzy slick Hispanic car narrated by Cheech Marin. In Toy Story, Barbie and Ken were primary characters. Pixar was unsure whether Mattel would be comfortable with the depiction of Ken as a fashionista metrosexual. Barbie, on the other hand, was depicted as very intelligent, which Mattel liked. Similarly, Mr. Potato Head is an important brand for Hasbro (it's the company's Mickey Mouse), so it is protective of this character. In Toy Story, Mr. Potato Head was depicted as a folksy character narrated by Don Rickles. Pixar queried whether Hasbro would be comfortable with the fact that Mrs. Potato Head was depicted walking around for half the film without an eye. Notably, Mr. Potato Head was depicted with a bowler hat and mustache, which was not original to the toy. By doing this, Pixar added to the Mr. Potato Head character, thereby creating new intellectual property that Pixar now has some ownership interest.

In entertainment licensing, you want to continually consult with the licensor along the way. Even if you have a broad license, you do not want to have the licensor unhappy with the resulting product or be surprised about how its character was depicted. Once a film is made (which can take up to five years), it is extremely difficult and expensive to extract elements from the animated work if a dispute arises.

In licensing a character or toy, you’ll also want to consider unexpected uses of the licensed element. For example, Pixar created a Mr. Tortilla Head (which took Mr. Potato Head’s features and put it on a tortilla because at one point the toys needed to slide under a closed door.) Make sure the license provides for whether the elements of the intellectual property can be disembodied and whether it governs the “whole” work. Remember, people love mash ups.
In seeking to obtain a license for a character, as a preliminary consideration, analyze whether a license is even obtainable given the intended use. For example, in the current Toy Story, the nemesis was an evil teddy bear. There is no famous teddy bear brand (such as Paddington Bear) that would be willing to license their character for this use because this would be so detrimental to the brand. Accordingly, Pixar created its own teddy bear character that is pink, bitter and walks with a cane. Indeed, it’s sometimes better to create your own content rather than operate under a restrictive license where the licensor is uncomfortable with the intended use.

However, if you are going to license a character as a nemesis, e.g., a “Bad Guy”, make sure you fully and accurately disclose your intended use because, again, you do not want the licensor to be unhappy later. Put a full disclosure in writing setting forth the intended use (e.g., this character is going to be depicted as a homicidal maniac). Regardless of how the character is going to be used, the licensee should never agree to a “positive light” provision, which provides that the character will be portrayed positively; at most, agree to a “neutral light” provision. Also pay attention to the precatory language in the agreement, and be careful about boiler-plate provisions, including provisions for injunctive relief, venue, choice of law, and publicity rights the content creator should control the publicity of the film and not the licensor).
A content creator also wants to avoid giving the licensor script approval or final product approval. This, however, depends on the bargaining power of the respective parties, and on the reputation of the content creator. Pixar does not give story approvals, but they have good relationships with their licensors. They work closely with those companies to keep people on board all along the way. With smaller content creators, a licensor may want to be more careful and protective of their brand. In these instances, the licensor may want to push for some level of script approval.

Rob pointed out the challenges that arise when the creative team insists that an element is a “must have.” This results in the loss of negotiation leverage (e.g., the licensor know that you need them more than they need you). If the content creator has an unequal bargaining position (desperation can be obvious), the resulting license will not only be more expensive, it can be limited in the scope of granted rights, and other provisions (e.g., the representations and warranties, indemnification) may be compromised. The in-house lawyer should be willing to push back on the creative team. Try exploring available alternatives with them, such as creating a new character instead.

Another practice point is to make sure that the in-house lawyer is consistent with licensing methods and practices. If the company has a best practices policy, these should be consistently followed. For example, if Pixar is licensing several characters from various toy companies, all of the companies should be treated fairly and subject to similar deal terms. For example, do not give one company script approval when no other company go this and/or there is a company practice against this. Try not to make exceptions, even if the licensed elements is a “must have.” Bear in mind that the licensing community is tight knit and people talk.
In drafting, make sure the license contains contingent obligations. Obligations for payment and screen credit should be contingent on actual use. Without this provision, if the product or character does not actually appear in the film, there is a chance that the content creator will still need to pay the licensor.

License agreements should also contain certain non-contingent obligations, such as a strict confidentiality clause. If the creator discloses preliminary drafts of its film and marketing campaign with its licensing partners, this needs to remain confidential. Another non-contingent obligation should be that the creator reserves the right to use or not use any licensed element. The content creator wants to make sure that no one is shoving their product into a film or marketing campaign.

Finally, Rob pointed out that, in entering into a license, the content creator should assume success; meaning, the film is going to have sequels, toys, books, games, theme parks, etc. For example, there is a “Cars Land” theme park now based on the Cars movie. Try not to give away toy merchandising rights, book rights, and other derivative rights. The creative team may not think this far ahead and, if this is a “must have,” may be willing to forgo these rights in order to get the deal done.

By Monica Pa

This panel was held on Friday, August 6, 2010 at the InterContinental Hotel in San Francisco.
The panel included Jennifer Golinveaux, Marc Greenberg, and Jennifer Seibly and was moderated by David Given.

This panel raised some unique points about this heavily discussed litigation, including several interesting background facts surrounding this case. Even before the litigation was filed, there was a fair amount of trash talk by Viacom. When YouTube debuted, Viacom issued negative press about YouTube’s business model. Viacom has a lock on the “youth-market” as far as cable TV content (it owns MTV, VH1, Comedy Central, and Nickelodeon). Billions of dollars every year are earned in licensing fees and advertising revenue from programs on these channels. Viacom was appropriately concerned about YouTube, given that a significant percent of the youth market was trending towards turning to the Internet for media consumption. Google purchased YouTube in 2006, one year after YouTube’s public launch, for 1.65 billion dollars (a tremendous price for a company that has never made a profit), and Viacom filed suit shortly thereafter in March 2007.

Viacom’s lawsuit claimed that YouTube and Google were guilty of massive copyright infringement. The initial reaction was that, given the results in Napster and Grokster, this should be a slam dunk case for copyright infringement. Viacom’s complaint anticipated many of the defenses that YouTube would raise under the DMCA, accused YouTube of willful copyright infringement (which allows for enhanced statutory damages), and sought preliminary and permanent injunctive relief.

At the close of discovery and summary judgment briefing, there were supposedly “smoking gun” documents leaked to the media. Notably, the first source of that leak was a former subsidiary of Viacom (CBS.com), which suggested that there was evidence adduced at discovery extremely detrimental to YouTube’s defenses, including documents showing the state of YouTube’s knowledge and encouragement of infringing activities.

Turning to the merits of the decision, Professor Marc Greenberg from Golden Gate University Law School pointed out that this case turned on the straight forward issue of how to interpret the safe harbor provision of the DMCA, which provides that the content owner must give notice to the ISP identifying where on the website the infringing materials is located, and then the ISP must investigate this claim and perhaps take it down. The district court’s decision carefully parsed the DMCA provisions and legislative history, focusing on the question of whether it was sufficient for the content creator to provide only general notice to the ISP of a problem.

The court held that general notice is not sufficient; instead, the DMCA requires the content owner to provide specific information about infringements of particular individual items. This is a burden shifting issue - who should, in the first instance, be required to identify infringing works and police infringement. The court makes clear that the DMCA places the burden on the copyright holder to identify the infringing activity.

The panel discussed the fact that the more significant issue, and what the appeal may hang on, is the availability of the statutory exception for a “representative list,” which provides that, if copyright owner can identify a representative class of infringing items, then the burden shifts to the ISP to take down similar instances of infringement. Specifically, the statute provides that “works” may be described representatively, so long as the content owner provides
“information reasonably sufficient to permit the service provider to locate the material.” The very purpose of this exception is to relieve copyright owners of the need to specifically identify each and every infringement. The court found that merely giving a representative sampling of infringing content undermines the DMCA’s general requirement for content owners to identify the location of the infringing material. But, this undermines the fact that the apparent purpose of the statutory exception is to shift the burden to the ISP. As such, the district court’s construction and application of the “representative list” exception may be Viacom’s strongest argument on appeal.

The panel also discussed the decision in UMG Recordings, Inc. v. Veoh Networks, Inc., 665 F. Supp.2d 1099 (C.D.Cal. 2009), with counsel for Veoh speaking on the panel. Veoh’s counsel pointed out that it is not easy for an ISP to identify what constitutes infringing content. For example, when a content owner says to take down unlawful copies of a music video, a broad sweep for videos containing a particular song may capture home videos with someone playing that song on the piano or kids dancing to that song. She argued that content owners are the ones in the best position to identify infringing content. You do not want ISPs guessing at what is infringing; this is not the case of “know it when you see it.”

She pointed out that in both UMG and Viacom, neither ISPs were ignoring infringement notices. As soon as they received a DMCA notice, they immediately took the infringing materials down. For example, when Viacom sent more than a hundred thousand DMCA infringement notices to YouTube on the eve of litigation, by the next business day, the majority of those allegedly infringing files had been taken down. She argued that this shows that the “take down” method actually works.

The panel also discussed the potential for a technological fix for these legal problems. Viacom argued that YouTube could have used filtering technology early on. Notably, Viacom’s infringement claim is predicated only on infringement occurring before YouTube enacted filtering technology. It’s unclear why Viacom would choose to limit liability for pre-filtering activity because the use of such technology is not relevant under the DMCA, which does not predicate the availability of safe harbor immunity on the use of filtering technology.

Early on, there was hash filtering software, which is a more precise but limited filtering system. It identifies any identical files on the system and disables them. But, all a user has to do to avoid this filter is to crop off one or two seconds at the end of the film clip. Veoh and YouTube employed more advanced and less precise “Audible Magic” fingerprinting filtering technology, which matches the “fingerprints” within a file with other files on the system. Thus, the file need not be identical to be captured by the filter. This is one of the most effective filtering software available right now.

These filtering fixes, however, are not without their issues. The EFF is vocal about over-filtering, especially since much non-infringing original content is being taken down without the ISP serving a DMCA counter-notice to the poster. Robust and broad filter technology takes away the opportunity to challenge a take down of allegedly infringing files, and also undermines the chance to consider fair use and other defenses.

As a final point, it bears observing that, when the DMCA was enacted in the late 90’s, there were no social networking sites (which is essentially how YouTube operates). It is extremely burdensome for content owners like Viacom, which generates thousands of hours of programming that results in thousands of infringing uploads on YouTube on a daily basis. The problem may be that legislation has not caught up with technological advances. The DMCA is just a poor fit to address user generated content on social networking sites. The 2d Circuit Court of Appeals may uphold this decision, or perhaps overturn the “representative sampling” holding, but the panel expects some language in the decision asking Congress to revisit the “take down” structure in the DMCA.

I am pleased to announce the appointment of Justice Barbara Jaffe as Co-Chair with Judith Bresler, Esq. and Gary Roth, Esq. of the Phil Cowan Memorial Scholarship Committee.

Justice Jaffe is an acting justice of the New York State Supreme Court. A long time member of the NYSBA, Justice Jaffe recently joined the EASL Section. She has represented the City Bar as a Delegate to the NYSBA’s House of Delegates. She is on the Founding Faculty of the New York County Lawyers (NYCLA) Art Litigation and Dispute Resolution Institute and presently serves on NYCLA’s Committee on Lesbians, Gays, Bisexuals, and Transgendered Issues. Justice Jaffe co-chairs the Professional Ethics and Discipline Committee of the New York Women's Bar and has served on its Board of Directors. She is also a member of the New York City Bar Association’s Art Law Committee.

Judith Bresler is Of Counsel to Withers Bergman LLP, where her practice focuses on the law and business of art. She is co-author of the award-winning treatise Art Law: The Guide for Collectors, Investors, Dealers and Artists (First, Second and Third Editions) and Adjunct Professor at New York Law School. She is also a co-founder and Co-Chair of EASL’s Alternative Dispute Resolution Committee.

Gary Roth is Assistant Vice President, Legal & Business Affairs, Performing Rights, of BMI. He oversees all matters relating to deceased BMI affiliates, as well as issues concerning levies, claims, divorces, assignments and other topics affecting royalty payments.

The Phil Cowan Memorial/BMI Scholarship was created by EASL, in partnership with BMI, in memory of Cowan, an esteemed entertainment lawyer and a former Chair of EASL. The Scholarship fund offers up to two awards of $2,500 each on an annual basis in Phil Cowan’s memory to a law student who is committed to a practice concentrating in one or more areas of entertainment, art or sports law.

This year, for the first time, all students who submit a paper for consideration will automatically receive a free membership in EASL (with all the benefits of an EASL member) for a one year.

For information about the Scholarship, please visit http://www.nysba.org/AM/Template.cfm?Section=Law_Student_Writing_Competitions and http://nysbar.com/blogs/EASL/

Please join me in welcoming Justice Jaffe as Co-Chair of the Phil Cowan Memorial Scholarship Committee and look forward to many student submissions!

I am pleased to announce the appointment of Justice Barbara Jaffe as Co-Chair with Judith Bresler, Esq. and Gary Roth, Esq. of the Phil Cowan Memorial Scholarship Committee. Justice Jaffe is an acting justice of the New York State Supreme Court.  A long time member of the NYSBA, Justice Jaffe recently joined the EASL Section.  She has represented the City Bar as a Delegate to the NYSBA’s House of Delegates. She is on the Founding Faculty of the New York County Lawyers (NYCLA) Art Litigation and Dispute Resolution Institute and presently serves on NYCLA’s Committee on Lesbians, Gays, Bisexuals, and Transgendered Issues.  Justice Jaffe co-chairs the Professional Ethics and Discipline Committee of the New York Women's Bar and has served on its Board of Directors.  She is also a member of the New York City Bar Association’s Art Law Committee.  

Judith Bresler is Of Counsel to Withers Bergman LLP, where her practice focuses on the law and business of art.  She is co-author of the award-winning treatise Art Law: The Guide for Collectors, Investors, Dealers and Artists (First, Second and Third Editions) and Adjunct Professor at New York Law School.  She is also a co-founder and Co-Chair of EASL’s Alternative Dispute Resolution Committee. 

Gary Roth is Assistant Vice President, Legal & Business Affairs, Performing Rights, of BMI.  He oversees all matters relating to deceased BMI affiliates, as well as issues concerning levies, claims, divorces, assignments and other topics affecting royalty payments. 

The Phil Cowan Memorial/BMI Scholarship was created by EASL, in partnership with BMI, in memory of Cowan, an esteemed entertainment lawyer and a former Chair of EASL.  The Scholarship fund offers up to two awards of $2,500 each on an annual basis in Phil Cowan’s memory to a law student who is committed to a practice concentrating in one or more areas of entertainment, art or sports law.  

This year, for the first time, all students who submit a paper for consideration will automatically receive a free membership in EASL (with all the benefits of an EASL member) for a one year. 

For information about the Scholarship, please visit http://www.nysba.org/AM/Template.cfm?Section=Law_Student_Writing_Competitions and http://nysbar.com/blogs/EASL/ 

Please join me in welcoming Justice Jaffe as Co-Chair of the Phil Cowan Memorial Scholarship Committee and look forward to many student submissions!

Law students, take note of this publishing and scholarship opportunity: The EASL Section, in partnership with BMI, the world’s largest music performing rights organization, has established the Phil Cowan Memorial/BMI Scholarship! Created in memory of Cowan, an esteemed entertainment lawyer and a former Chair of EASL, the Phil Cowan Memorial/BMI Scholarship fund offers up to two awards of $2,500 each on an annual basis in Phil Cowan’s memory to a law student who is committed to a practice concentrating in one or more areas of entertainment, art or sports law.

The Phil Cowan Memorial/BMI Scholarship has been in effect since 2005. It is awarded each year at EASL’s Annual Meeting in January in New York City.

The Competition

Each Scholarship candidate must write an original paper on any legal issue of current interest in the area of entertainment, art or sports law.

The paper should be twelve to fifteen pages in length (including Bluebook form footnotes), double-spaced and submitted in Microsoft Word format. PAPERS LONGER THAN 15 PAGES TOTAL WILL NOT BE CONSIDERED. The cover page (not part of the page count) should contain the title of the paper, the student’s name, school, class year, telephone number and email address. The first page of the actual paper should contain only the title at the top, immediately followed by the body of text. The name of the author or any other identifying information must not appear anywhere other than on the cover page. All papers should be submitted to designated faculty members of each respective law school. All law schools will screen the papers and submit the three best to EASL’s Phil Cowan Memorial/BMI Scholarship Committee. The Committee will read the papers submitted and will select the Scholarship recipient(s).

Eligibility

The Competition is open to all students attending eligible law schools. “Eligible” law schools mean all accredited law schools within New York State, along with Rutgers University Law School and Seton Hall Law School in New Jersey, and up to ten other accredited law schools throughout the country to be selected, at the Committee’s discretion, on a rotating basis.

Free Membership to EASL

All students submitting a paper for consideration will immediately and automatically be offered a free membership in EASL (with all the benefits of an EASL member) for a one-year period.

Yearly Deadlines

December 10th: Law School Faculty liaison submits 3 best papers to the EASL/BMI Scholarship Committee

January 15th: EASL/BMI Scholarship Committee will determine the winner(s)

The winner will be announced, and the Scholarship(s) awarded at EASL’s January Annual Meeting.

Prerogatives of EASL/BMI’s Scholarship Committee

The Scholarship Committee is composed of the current Chair of EASL, all former EASL Chairs who are still active in the Section, all Section District Representatives, and any other interested member of the EASL Executive Committee. Each winning paper will be published in the EASL Journal and will be made available to EASL members on the EASL website. BMI reserves the right to post each winning paper on the BMI website, and to distribute copies of each winning paper in all media. The Scholarship Committee is willing to waive the right of first publication so that students may simultaneously submit their papers to law journals or other school publications. In addition, papers previously submitted and published in law journals or other school publications are also eligible for submission to The Scholarship Committee. The Scholarship Committee reserves the right to submit all papers it receives to the EASL Journal for publication and to the EASL Web site. The Scholarship Committee also reserves the right to award only one Scholarship or no Scholarship if it determines, in any given year that, respectively, only one paper, or no paper is sufficiently meritorious. All rights of dissemination of the papers by each of EASL and BMI are non-exclusive.

Payment of Monies

Payment of Scholarship funds will be made by EASL/BMI directly to the law school of the winner, to be credited against the winner’s account.

About BMI

BMI is an American performing rights organization that represents approximately 350,000 songwriters, composers and music publishers in all genres of music. The non-profit-making company, founded in 1940, collects license fees on behalf of those American creators it represents, as well as thousands of creators from around the world who chose BMI for representation in the United States. The license fees BMI collects for the "public performances" of its repertoire of approximately 4.5 million compositions are then distributed as royalties to BMI-member writers, composers and copyrightholders.

About the New York State Bar Association/EASL

The 72,000-member New York State Bar Association is the official statewide organization of lawyers in New York and the largest voluntary state bar association in the nation. Founded in 1976, NYSBA programs and activities have continuously served the public and improved the justice system for more than 125 years.

The more than 1,600 members of the Entertainment, Arts and Sports Law Section of the NYSBA represent varied interests, including headline stories, matters debated in Congress, and issues ruled upon by the courts today. The EASL Section provides substantive case law, forums for discussion, debate and information-sharing, pro bono opportunities, and access to unique resources including its popular quarterly publication, The Journal.