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March 2010 Archives

March 2, 2010

Recap of Digital Music Forum (East)

By Pamela C. Jones, Esq.

Last week I attended the Digital Music Forum (East) in downtown New York City.

Panelists and speakers included Rio Caraeff, President & CEO, VEVO; Russ Crupnick, VP & Senior Industry Analyst NPD Group; Michael Doernberg, CEO & Founder ReverbNation; Ted Mico, EVP Digital at Interscope Geffen A&M, Rich Bengloff of President, A2IM and more than 60 other ‘players’.

If you’ve been in a martini-induced stupor – ah, the good old days – you may not have heard that the old music business model is dead. Ted Cohen of TAG Strategic (former VP of Digital Development and Distribution at EMI) assured us “it’s not coming back”!

Setting the tone in his opening remarks, Cohen cautioned that the biggest risk facing today’s ‘digital music group’ is to not take a risk. He complained that legal and business affairs are bottlenecking deals, but walls are breaking down and some risk-takers are becoming overnight sensations, including “Lady Gaga”, the most-mentioned artist of the conference.

“Massive Exiting of Music Buyers In The U.S.”

Russ Crupnick of the NPD Group reported that there is a massive exiting of paid music buyers in the United States. He provided the following compelling evidence:

In 2009, 24 million fewer people purchased music in the United States over the prior year. There were 1 million fewer digital download purchases and 25% fewer P2P illegal downloads. Last year, Americans spent $34.6 million in digital download purchases of music, a decline of almost $2 million year over year. However, those that did purchase music spent more. In 2009, the average downloader spent $50 buying music downloads, compared to $33 in 2008.
Crupnick described 2 primary music-buying groups: (a) The “UberFan”, which represents 9% of music revenues and (b) the “Traditionalist”, accounting for approximately 40% of revenues. Traditionalists consist of an older demographic and include GENXers and ‘late boomers’. As a group, they represent 1/3 of all revenues from music sales. Crupnick warned that if this group is ignored by music strategists, “we’ll all lose our jobs”.

“The Democratization of Media”

Ted Mico, Executive Vice President of Digital for Interscope, Geffen and A&M, told the audience, “Big media is getting smaller” and “All media is getting democratized”. Today, 70% of all music revenues are digitally generated. In Mico’s opinion, the job of recorded music companies is to ‘discover’, ‘invest’ and ‘connect’ talent with consumers. He reported that music companies are redirecting their efforts to establish direct relationships with consumers. Today, the key commodity is the single track of music.

‘We live in a new world driven by singles” said Mico. “Lady Gaga sold 35 million single tracks globally” and “the Black Eyed Peas have sold 25 million single tracks globally”. Mico explained that if care is taken to create, develop and market the single track, then the album will take care of itself.

Mico’s mantra is “Attraction, Retention, Monetization”. To be successful, Mico’s strategy involves (1) building the best technology to connect artists to consumers and (2) aggregating the data collected from music consumers. Mico’s colleagues argue that this data is the keystone in developing the ‘new relationship’ between the artist and the consumer. IGA collects a staggering amount of data to use in the creation of ‘predictive analytics’. In fact, in one day alone, IGA engineers collect 23 million bits of social-listening data, which is then aggregated into metrics that digital music executives told us is crucial to the health of the ‘new relationship’ between artist and consumer.

March 3, 2010

Fashion Law Committee Trade Show Calendar

By David H. Faux
EASL Fashion Law Committee

A Fashion Trade Show calendar is now available for members of EASL’s Fashion Law Committee. This calendar lists all the trade shows by date, location, and website that are occurring in New York City in any given month. The calendar will be updated regularly.

Please contact Biana at bianachka06@yahoo.com for access. Please also be aware that we are still in the “experimental” stage of launching this calendar, restricting access from the general public, and keeping it updated. If there are glitches, that is because there are supposed to be glitches in the beginning. Let Biana Borukhovich or I (davefaux@dhf-law.net) know about them.

A special thanks to the Fashion Law Society at Touro Law Center.

March 9, 2010

Supreme Court Clarifies Jurisdictional Requirements; Revives Copyright Class Action Settlement

By Cliff Sloan, Judith Kaye, Mary E. Rasenberger & David W. Foster

On March 2, 2010, in Reed Elsevier, Inc. v. Muchnick, the Supreme Court reinstated a class action settlement, approved by the district court, of copyright claims entered into by freelance authors, publishers and electronic database companies. In doing so, the Supreme Court provided important guidance on whether mandatory pre-conditions for suit, such as the requirement for copyright registration in the copyright statute, are jurisdictional.

The Reed Elsevier case involves a longstanding dispute between freelancers and publishers and databases. Nearly a decade ago, in New York Times Co. v. Tasini, 533 U.S. 482 (2001), the Supreme Court held that “owners of online databases and print publishers had infringed the copyrights of six freelance authors by reproducing those authors’ works” in electronic databases “without first securing their permission.”

After Tasini, attention turned to a class action lawsuit by freelance authors against publishers and databases in the Southern District of New York. After years of negotiation and mediation, the freelancers, publishers and electronic database companies agreed on a global settlement. Although the copyright statute requires registration of a creative work before a copyright infringement suit can be brought, the class action settlement resolved potential claims regarding both registered and unregistered works. The district court certified the class and approved the $18 million settlement.

Ten freelancers objected to certain provisions of the settlement on procedural and substantive grounds, and they appealed. The Second Circuit sua sponte asked the parties to address whether the district court lacked jurisdiction to approve the settlement because it included unregistered works. All parties maintained that there was no jurisdictional problem with the settlement, but the Second Circuit disagreed. Ruling that the district court lacked jurisdiction, it threw out the settlement.

The publishers and databases then sought certiorari from the Supreme Court, which was granted. Because none of the parties agreed with the Second Circuit’s holding on jurisdiction, the Supreme Court appointed a law professor as amicus to defend the Second Circuit’s opinion. Skadden filed an amicus brief in the Supreme Court supporting reversal on behalf of ten leading media and publishing companies and organizations.

In an 8-0 ruling (with Justice Sotomayor recused), the Supreme Court reversed. It held that the copyright registration requirement — Section 411(a) of the copyright statute — is mandatory, but not jurisdictional and thus the Second Circuit should not have thrown out the settlement on jurisdictional grounds. Writing for the court, Justice Thomas applied the rule from Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), for distinguishing between jurisdictional statutes, which govern a court’s power to hear a case, and mandatory claim processing rules. The court held that Congress had not clearly stated that the limitations in Section 411(a) are jurisdictional. As a result, the court would not conclude that the mandatory registration requirement is jurisdictional.

Justice Ginsburg, joined by Justices Stevens and Breyer, concurred in part and concurred in the judgment. They stated that there appears to be some tension between the rule announced in Arbaugh and the result in Bowles v. Russell, 551 U.S. 205 (2007), which found that a time limit for an appeal was jurisdictional. The concurring justices resolved that tension by reading Bowles to apply only when a long line of Supreme Court cases has held a statute to be jurisdictional, and that interpretation has been left unchallenged by Congress.

The Supreme Court emphasized the limits of its Reed Elsevier decision. In sending the case back to the Second Circuit, the court expressed no opinion on the merits of the settlement. It also observed that the registration requirement remains a “precondition to suit,” and left open the possibility that “district courts may or should enforce sua sponte” the registration requirement by “dismissing copyright claims involving unregistered works.” The court also noted that it did not reach the question whether, even if the registration requirement were jurisdictional, the court would have authority to approve the settlement.

Beyond the impact in the Reed Elsevier case itself, the most important effect of the decision is the court’s emphasis that it will not lightly presume that statutory requirements are jurisdictional. A conclusion that a requirement is jurisdictional is warranted only if it is clearly stated or mandated by Congress. The court stressed, as it has in other recent opinions, that it will look skeptically at “drive-by jurisdictional rulings” ­— casual statements about “jurisdiction” in past opinions that are unsupported by clear authority in statutory language or intent.

The decision leaves open the question of whether and how compliance with section 411(a) may be waived by a defendant, whether expressly or by default. Until there is a fully developed body of law on the issue, copyright litigators would be wise to raise failure to comply with section 411(a) at the earliest practical moment in the litigation.

Cliff Sloan, Judith Kaye, Mary E. Rasenberger, David W. Foster are attorneys with Skadden, Arps, Slate, Meagher & Flom. This blog entry does not represent the views of Skadden, any other law firm or any client. This blog is not sponsored by Skadden or any other law firm, or any client. The blog is provided for educational and informational purposes only and is not intended and should not be construed as legal advice.

March 12, 2010

Lawyers in Transition

The NYSBA EASL Lawyers in Transition Committee will present a breakfast panel on the difficult transition from law school to that first job, particularly in a recession. Thousands of lawyers have been hit by the recession. With so many attorneys seeking work, it is essential to think outside the box to use alternative job-hunting strategies.

Join us for a breakfast panel led by a career strategist and attorneys who have overcome this transition using alternative strategies.

The panel will be held Friday April 9 at 8:30 am - 9:30 am, at Sotheby's Institute of Art located at 570 Lexington Avenue (between 50th and 51st Streets), 6th Floor. The session is free, but registration is required. Please register by contacting Saryn Leibowitz at sarynl@aol.com by April 6.

March 28, 2010

Let's Dance All The Way To The Copyright Office: Can The Mardi Gras Indians Costumes Be Protected By Copyright?

By Marie-Andrée Weiss

The New York Times reported this week the plight of the Mardi Gras Indians (http://www.nytimes.com/2010/03/24/us/24orleans.html). They create beautiful costumes by hand, often at great expense, to wear during festivities three times a year in the streets of New Orleans, like beautiful butterflies. Of course, they are very popular with photographers, and these photographs are sometimes used on calendars or posters, without their creators being able to benefit financially.

That is because under U.S. law, these costumes are considered clothing, and as such, useful articles that cannot be protected by copyright. Photographs of these costumes cannot be considered derivative works.

Could these costumes be protected by copyright?

According to the recent New York Times article, Ms. Ashlye M. Keaton, an attorney representing the Indians, is trying to find a way to protect their rights. What avenues may be open for these costumes to be protected?

Are these costumes useful?

"Useful articles" are defined by 17 U.S.C. § 101 as "having an intrinsic utilitarian function that is not merely to portray the appearance of the article." As beautiful and outrageous as these costumes are, they still carry out a useful function, keeping the body of its wearer warm, and protecting him from being seen naked in public, which, even during Mardi Gras, is illegal in New Orleans. So, they are "useful" in some ways.

Can the artistic qualities of the costume be separated from their utilitarian nature?

Useful articles, however, may be protected by copyright only to the extent that "their design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of the utilitarian aspects of the article" (17 U.S.C. § 101).

The House Report for the bill which became the 1976 Copyright Act (House Report no. 94-1476) noted that a design cannot be protected by copyright under the bill unless the product contains "some element that, physically or conceptually, can be identified as separable from the utilitarian aspects of that article." So even a useful article can be protected if its creator can show that some of its aesthetic features are "separable" from its utilitarian aspects.

Courts apply a "conceptual separability test" in order to determine whether copyright protection may be granted to a useful article, by assessing whether the primary ornamental aspect of the work is conceptually separable from its subsidiary utilitarian function (Kieselstein-Cord v. Accessories by Pearl, Inc. 632 F.2d 989). Well, I just spent some time admiring pictures of Mardi Gras Indians costumes posted online, and many elements of the costumes are visually separable from the utilitarian aspect, the costume as a body cover. As a matter of fact, some of the costumes are reminiscent of halos bordering icons, and constitute a frame around the dancer's body.

What if the costume is designed to provoke an emotion?

In Masquerade Novelty v. Unique Industries, the Third Circuit held in 1990 that a mask portraying the nose of an animal is not a useful article for the purposes of §101, as its utility is not to portray an animal nose, but rather to make people laugh when they see someone wearing the mask.

So, could "emotional usefulness" be a criterion as well? The Mardi Gras Indians costumes play a crucial social role in conveying strong emotional reactions when watching the dancers celebrating Mardi Gras, an euphoric holiday created in Europe as a day of celebration before plunging into the rigors of both Lent and cold weather.

Let's argue then, that the Indians' costumes are something truly beautiful, and these costumes can be certainly considered beautiful by many people. Anyway, courts do not judge people's tastes, as "it would be a dangerous undertaking for persons trained only to the law to constitute themselves final judge of the worth of pictorial illustrations, outside of the narrower and most obvious limits"(Bleinstein v. Donaldson lithographing Co. (188 U.S. 239)).

Could a photograph be used to protect the costumes?

Ms. Keaton is quoted in the New York Times as trying to protect these costumes by copyright so that the photographs of these costumes could be then considered derivative work. Yet would it be possible to use copyrighted photographs of these costumes in order to protect the costume themselves?

A photograph, just as a sketch, is a two-dimensional rendition of a subject, and can be protected by copyright as long as it is original. Would a three-dimensional reproduction of the picture be protected? After all, the Second Circuit found that the sculptor Jeffrey Koons had infringed a photographer's copyright when creating a three-dimensional sculpture of one of his photographs, which depicted a couple on a bench holding puppies (Rogers v. Koons, 960 F.2d 301). Taking that route may be a way to prevent a third party from reproducing a costume, but would not prevent a photographer from taking another picture of the same costume, as photographing a particular subject does not prevent others from doing the same.

In Galiano v. Harrah's Operating Co., Inc., a Fifth Circuit case (416 F.3d 411), a uniform designer had received copyright protection for sketches she had made of casino employee uniforms as part of the creative process of designing these uniforms. These sketches were classified as "two-dimensional artwork." The casino continued to order the uniforms from the manufacturer, even after its business agreement with the designer had ended. The designer sued the casino for copyright infringement, claiming that the finished garments were derivative works. She was unsuccessful, and the Fifth Circuit (to which Louisiana belongs) concluded that she did not own a valid copyright to the clothing designs.

By the way, is it a costume or a sculpture?

Ms. Keaton is also arguing that these costumes could be considered sculpture. In 1984, the Ninth Circuit reversed a district court that had granted summary judgment on the grounds that a swimsuit created by the appellant Mr. Poe was useful. So a swimsuit, or, for that matter, any other garment, may or may not be useful, and whether it was an utilitarian article of clothing or a work of art has to be resolved by the trier of fact. (Poe. V. Missing Persons, 745 F.2d 1238).

Right of publicity

The New York Times notes that the Mardi Gras Indians are tired of seeing their images being used in commercial ventures, such as calendars or posters, without receiving any money themselves for the commercial exploitation of their images. But isn't this a commercial use of not only the costumes, but also of their personal identity? As such, they are entitled to have their rights protected by the right of publicity, which is the right to control the commercial use of one's image. Louisiana has adopted the right of publicity through common law. In New York State, it has been recognized by statute, NY Civ. Rights Law §§50 51.

Of course, using that route would not prevent the copying of the costumes by another party, as the right of publicity and copyright are distinct rights.

What gives?

Fashion designs are still not protected in the United States, but maybe it is time to amend the Copyright Act to protect at least one-of-a-kind costumes.

March 30, 2010

Sony Music Entertainment is Seeking a Director to Join our Business & Legal Affairs Department

Sony Music Entertainment is a global recorded music company with a roster of current artists that includes a broad array of both local artists and international superstars, as well as a vast catalog that comprises some of the most important recordings in history. Sony Music Entertainment is a wholly owned subsidiary of Sony Corporation of America.

We are currently seeking candidates for a Director level position within our Business & Legal Affairs Department. The Director's responsibilities will include but will not be limited to the following:

Structure proposals and negotiate and draft a variety of music and entertainment-related agreements, including recording, licensing, producer/mixer, soundtrack, termination/release, settlement and merchandising. Obtain all necessary executive approvals and draft related approval memos and contract summaries.

Research and advise A&R, marketing, creative services, sales, promotion, royalties, finance and other departments regarding contractual obligations and restrictions.

Work with A&R administration regarding contractual budgets, monitoring recording costs and approving payments.

Review artwork, label copy, videos, advertising and other marketing and promotional materials to minimize company's legal exposure.

Identify and analyze potential risks related to the label's distribution of content and other business activities.

Investigate, analyze and respond to a variety of claims, including copyright, audit, breach of contract, publicity and trademark, and work with the corporate legal department to develop litigation strategies.

Member of New York Bar in good standing.
JD from a top law school.
At least 3 years at a prominent law firm, in house legal department or equivalent experience.
Superior negotiating, drafting and communication skills.
In-depth understanding of the areas of the law applicable to the music business, such as copyright, contract and trademark.
Strong business knowledge preferred.

All interested parties should apply directly via our website at www.sonymusic.com.

Free Copyright Seminar for Creators

Monica Pa of EASL's Pro Bono Committee, in conjunction with the Brooklyn Arts Council, is hosting a free copyright seminar for artists, musicians, writers, creators, and art organization at the Brooklyn Public Library in Bushwick. The two-hour lecture will cover basic copyright law, including what qualifies as a copyright, how to register a work for copyright protection, what constitutes fair use, copyright licenses and cease and desist letters.

Wednesday, March 31, 5:30-7:30pm
Brooklyn Public Library, DeKalb Branch
790 Bushwick Ave. at DeKalb Ave., Brooklyn

For more information, click on: http://www.brooklynartscouncil.org/documents/1390.

Monica Pa represents U.S. and foreign broadcasters, magazines, newspapers, and artists in the areas of libel, privacy, copyright, trademark, and other aspects of First Amendment, publishing, media and entertainment law. Ms. Pa has written and lectured on a range of entertainment law topics, including speaking on panels at the School of Visual Arts, the Volunteer Lawyers for the Arts, and the CMJ Music and Film Festival. Ms. Pa is a member of the steering committee for the New York State Bar, Entertainment and Sports Law Section. She graduated magna cum laude from New York University Law School, where she received the Walter Derenberg Prize for Copyright Law.

Founded in 1966, BAC is the umbrella for Brooklyn’s range of cultural groups and individual artists working in the visual, performing, media and literary arts. BAC helps Brooklyn’s artist population–from the experimental to those preserving and evolving traditions of cultural heritage–create and present their work. BAC ensures that thousands of people throughout Brooklyn have access to a variety of free arts programming each year. The BAC Professional Development Seminars: Making Art Work series is generously sponsored by Brooklyn Community Foundation.

About March 2010

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in March 2010. They are listed from oldest to newest.

February 2010 is the previous archive.

April 2010 is the next archive.

Many more can be found on the main index page or by looking through the archives.