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May 3, 2012

Elimination of Grammy Categories

By Gergana Miteva

This year the National Academy of Recording Arts & Sciences (The Recording Academy) granted far fewer Grammy Awards than those awarded in previous years. The 54th annual Grammy Awards were reduced and consolidated from 109 to 78 awards within their respective core genres of R&B, American roots music, classical, Latin, jazz, country, pop and rock. (See a full list of consolidated awards here: http://www.grammy.org/recording-academy/announcement/category-list) The overall effect of the restructuring was to eliminate the separate male and female soloist awards, lump together collaborative works with group works, and solo performances with instrumental solo performances, as well as combine sub-genres into broader genre awards.

In its letter to its members announcing the restructuring, the Recording Academy cited as one of the reasons to reduce awards was to make each category more competitive, since it had experienced "consistently low entries over the past several years in many categories." Among the 31 eliminated awards was the Best Latin Jazz Album category, which sparked a class action lawsuit against the Recording Academy soon after it announced the consolidation. In his complaint, well-known Latin jazz percussionist Robert (Bobby) Sanabria and three other notable Latin jazz recording artists, charged, among other claims, the Recording Academy with breach of contract and breach of fiduciary duty owed to members of the Recording Academy, and asked the court to reinstate the Best Latin Jazz Album category. The musicians describe this category as having granted "the long-overdue recognition to the highly-regarded artistic work of musicians who blended the improvisationary leaning of jazz with the native music and cultures of the Caribbean and Central and South America." (See complaint, available at: https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=OmzvfJBEeIvKr7VdrnkQMQ==&system=prod) This category was originally introduced in 1994 and its first recipient was Arturo Sandoval, a renowned jazz trumpeter and composer. (http://www.grammy.com/nominees/search?page=2&artist=&title=&year=All&genre=16)

Among the plaintiffs' main grievances against the Recording Academy is the manner in which it chose to carry out the restructuring. They accuse it of not engaging its members in the process, of not keeping them informed, as well as of not using consistent criteria in evaluating the award categories, and as a result making the process discriminatory. Further, the plaintiffs allude to the detrimental effect the elimination of the category would have on their careers and on their chances of ever getting a Grammy, thus depriving them of a "meaningful opportunity to gain broad exposure of their music to the general public..." and devaluing past nomination recognitions they have received in the eliminated category. (See complaint: https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=OmzvfJBEeIvKr7VdrnkQMQ==&system=prod)

Last week New York State Supreme Court Justice Jeffrey Oing granted the Recording Academy's motion to dismiss the class action lawsuit without issuing an opinion. The Recording Academy welcomed the judge's dismissal of the case and announced that they anticipate to make some "individual tweaks and adjustments" to the 2013 Grammy Awards during their meeting in late May, but they will not alter the overall award restructuring. (http://www.goldderby.com/forum/topics/view/2217#). Bobby Sanabria has already expressed his intention to appeal, however this may be a battle better fought in the court of public opinion, rather than in the court of law. While the law may not be coming down on Mr. Sanabaria's side, numerous prominent musicians and activists, such as Carlos Santana and Rev. Jessie Jackson have supported the lawsuit and have strongly criticized the consolidation as diminishing the ethnic and cultural diversity of the Grammy Awards. (http://allhiphop.com/2012/02/03/mordr-cornel-west-jesse-jackson-join-fight-against-grammys-over-eliminated-categories/)

It is very possible that artists previously eligible for the eliminated categories would be negatively affected and might be marginalized as a result, but this is not necessarily the case. Musicians who were once eligible in both an eliminated subcategory and a broader category only competed in the narrower category, which may also have marginalized them because they were not considered for the generic categories. These musicians will now have the opportunity to be nominated in the broader, and arguably more competitive and prestigious categories, which may serve as an even stronger boost for their careers. This said, eliminating awards for music sub-genres which traditionally do not enjoy commercial success but carry powerful artistic and cultural value, could very well have deprived certain artists of their last venue of global public exposure.

Chief Judge Jonathan Lippman's Speech - Law Day 2012

Thank you to Chief Judge Lippman for recognizing the need for pro bono counsel in NYS. The EASL Section is a leader in the NYSBA's efforts to promote pro bono among all of its members, and we will continue to do so through the Pro Bono Committee. Below are Chief Judge Lippman's remarks from Law Day, May 1, 2012.

Today on Law Day, we pause from our busy routines to celebrate our nation's faith
in the rule of law and the liberties we so dearly cherish. And we reaffirm the ideals of equality and justice that are the roots of our national prosperity.

While we enjoy the freedoms guaranteed to us by our Constitution, we cannot take
for granted that the continued vitality of those freedoms -- the very life of those freedoms -- depends on the active engagement of each of us. Those who are privileged to call ourselves lawyers have a special duty as the gatekeepers of justice to participate in preserving what we hold so dear.

With that in mind, my remarks today will focus on a most pressing responsibility for
all of us: instilling and fostering a culture of service in the men and women who enter our profession as lawyers each year. It is the legal profession's commitment to equal justice and to the practice of law as a higher calling that has made service to others an intrinsic part of our legal culture. The new protocols that I will announce today for admission to the bar in New York, will challenge every law student to answer very basic questions that are fundamental to the very fibre of the legal profession: How will you choose to benefit your fellow man and your community with your new skills? Will you use your legal acumen to foster equal justice in our state? Do you recognize that being a lawyer requires an understanding that access to justice must be available to all New Yorkers regardless of their station in life? From the start, these responsibilities of the profession must be a part of every lawyer's DNA - - to support the values of justice, equality and the rule of law that make this state and this country great.

We are facing a crisis in New York and around the country. At a time when we are
still adjusting to the realities of shrinking state coffers and reduced budgets, more and more people find themselves turning to the courts. The courts are the emergency rooms of our society -- the most intractable social problems find their way to our doors in great and increasing numbers. And more and more of the people who come into our courts each day are forced to do so without a lawyer.

The critical need for legal services for the poor,the working poor,and what has
recently been described as the near poor could not be more evident. Our Task Force to Expand Access to Civil Legal Services estimates that we are at best meeting only 20 percent of the civil legal services needs of New York State's low-income residents -- and this is at a time when 15% of the people in our state live at or below the poverty level. That means that literally millions of litigants each year are left to navigate our court system without the help of a lawyer.

Given the magnitude of this problem, and thanks to our partners in government in
the legislative and executive branches, the judiciary's budget has included substantial
funding for civil legal services over the last two years. I am proud of the fact that we have established a template in New York to publicly fund civil legal services for the poor in a systemic and reliable way. This year, the judiciary's budget includes $25 million to support civil legal service providers directly and another $15 million in rescue funding to IOLA -- the total of $40 million being the highest level of state funding for civil legal services in the country. These funds could not be more important given the economic crisis that has impacted most heavily on those who can least help themselves in our state and created greater demands for legal services than ever before in our history.

But we must do more to bridge the gap between this rising need and the services
we provide. While greatly increased state funding will go a long way to addressing the
desperate straits many litigants with limited means find themselves in, by itself, money is not enough. We need the continued individual efforts of lawyers doing their part. We are indeed fortunate that, in New York, so many lawyers are already embracing a culture of service. So many lawyers understand that it is their special responsibility to use their skills and their position to help ensure that we are providing for the justice needs of all New Yorkers.

Pro bono service has been part of the professional lives of lawyers for centuries.
It is deeply rooted in our traditions. Our own fabulous New York State Bar Association, as well as countless other bar associations around the state and the country, remind us of this.

For so many years, they have recognized our ethical and social responsibility to volunteer our time and resources to provide legal services for those in need.
These same considerations have become very much a part of the culture at law
schools as well. The conviction that serving the public is an essential component of our professional identity as lawyers has caught hold at law schools around the country. In fact, New York's practice rules -- like those of many other states -- allow law students to perform legal work under the supervision of law school faculty or legal service organizations,thereby enabling students to appear in court and put their name on court filings.

But, now it is time to connect these dots between the experience of law students on the one hand and the ongoing professional responsibility of lawyers to perform pro bono service on the other. If pro bono is a core value of our profession, and it is -- and if we aspire for all practicing attorneys to devote a meaningful portion of their time to public service, and they should -- these ideals ought to be instilled from the start, when one first aspires to be a member of the profession. The hands-on experience of helping others by using our skills as lawyers could not be more of a pre-requisite to meaningful membership in the bar of our state. So today, on Law Day, 2012, we turn over a new page in the bar admission process in New York -- by requiring each and every applicant for admission to contribute 50 hours of participation in law-related and uncompensated pro bono service before they can practice in New York State.

With this step, as it should be, New York will become the first state in the nation to
require pro bono service for admission to the bar. What better way to send the strongest message to those about to enter our profession -- assisting in meeting the urgent need for legal services is a necessary and essential qualification to becoming a lawyer. With this new initiative, New York will lead the way in stating loudly and clearly that service to others is an indispensable part of our legal training and that before you can call yourself a lawyer in New York, you must demonstrate in a very tangible way your commitment to the ideals of our great profession.

Every year, about 10,000 prospective lawyers pass the New York Bar Exam. While
50 hours of law related pro bono work would amount to little more than a few days of
service for each year of law school, the aggregate would be a half million hours each year that benefits New York and those in need of legal help. If every state in the country were to join us in taking up this mantle, that would mean at least two and a half million hours of additional pro bono work - - what a positive impact on persons of limited means, communities and organizations that would gain from this infusion of pro bono work.

And by doing so, we will not only benefit the clients who are in dire need of legal
assistance but, so importantly, we will also be helping prospective lawyers to build the valuable skills and acquire the hands-on experience so crucial to becoming a good lawyer.

There can be no argument that newly-minted lawyers are simply better at their jobs when they receive direct experience in the practice of law. By assisting a family facing eviction or foreclosure, by working with an attorney to draft a contract for a fledgling not-for-profit, by helping a victim of domestic violence obtain a divorce, or by using their legal talents to help state and local government entities in a time of economic stress, law students can access the real-world lessons that are so important to succeeding in legal practice and hopefully also experience the intrinsic reward that comes from helping others through pro bono service.

How will this new admission requirement work in New York? First, it will not be
solely the responsibility of law schools to provide pro bono opportunities, although there are law schools that already require some pro bono service to graduate, and most law schools today have an impressive array of clinical programs to offer their students. These students also may want to look outside the campus walls to legal service providers in their area and explore internships, or work with local bar associations to find pro bono possibilities. And while most applicants to the bar will want to complete their pro bono service during the law school years or over the summers, they will also have the option to do so after graduation, or even after taking the bar exam or after beginning a paid legal position in a law firm or elsewhere.

When applying to the Appellate Divisions for admission to the New York bar,
applicants will be required to include an affidavit describing the nature of their pro bono work, the organization and the individual lawyer who supervised them, and the dates and hours of service. In order to provide sufficient notice to current law students, this requirement will not affect the applicants seeking to join the bar this year. In New York, it is the Appellate Divisions of the Supreme Court through their Committees on Character and Fitness that oversee and approve all admissions to the bar, and they will ensure that applicants have completed their pro bono service before they are admitted to practice law.

The Presiding Justices of each of the four Appellate Divisions have fully embraced this new pro bono requirement for bar admission in our state, and I am so grateful to them not only for their support but also for their advice and wisdom.

It is my hope that New York will serve as the trendsetter nationally in requiring pro
bono service for admission to the bar and in recognizing that it is an essential part of what it means to be a lawyer. Across the country, it is critical that we formally recognize pro bono service as an indispensable part of our legal culture. This will not only affect the way we as lawyers perceive ourselves -- it will also shape the way we are perceived in the wider community and the society in which we play such an important role. The legal profession should not be seen as argumentative, narrow or avaricious, but rather one that is defined by the pursuit of justice and the desire to assist our fellow man.

With today's announcement, we celebrate the thousands and thousands of lawyers who perform pro bono work in our state every year, and who have risen to the occasion time and time again to provide legal services and ensure access to justice for all. We honor their commitment to take on legal work for those most in need and pass that commitment on to a new generation seeking to practice law in our state, starting on day one - - helping to shape that generation with the values we all share as members of our noble profession, and I do believe it is noble. As far back as judges and lawyers have existed, the pursuit of equal justice for all, rich and poor alike, has been the hallmark of our profession. In New York, now more than ever before, we will make this moral imperative a reality before anyone is given the privilege and honor of practicing law in our great state.

Thank you.

May 4, 2012

Weekly Issues in the News

By Geisa Balla

Betsey Johnson

U.S. design house Betsey Johnson LLC filed for Chapter 11 bankruptcy protection on April 26, 2012 in the U.S. Bankruptcy Court, Southern District of New York. It listed $21.3 million in assets and $15.4 million in liabilities as of the end of 2011. In its petition, Betsey Johnson cited sales and profitability for the bankruptcy filing, stating that its retail store sales have fallen 20% and profitability has dropped by more than 50% since 2007. The company is seeking offers to buy all or parts of its business, and has not been able to find buyers or investors so far. "The economic recession had a devastating impact on higher-end fashion apparel brands, including Betsey Johnson Fashions," the company said, adding that cash constraints had left it unable to turn the situation around. For fiscal year ending December 31, 2011, Betsey Johnson generated $60 million in sales, but recorded a negative EBITDA of $5.7 million.


Google Books

In the ongoing Google Books dispute, Google Inc. argued this week that associations of authors and photographers should not be allowed to sue the company as a group. The Authors Guild and the American Society of Media Photographers filed their lawsuit against Google, alleging that Google infringed on copyrights when it signed contracts with libraries for scanning, distributing and displaying about 20 million books. The attorney for the Authors Guild said that Google was an "intimidating defendant" for individuals, and that this "action calls out for a mass litigation to adjudicate the mass digitization." Judge Denny Chin did not issue a decision, but noted in oral arguments that it would take forever to resolve cases brought by individual authors, and that it "seemed to make sense" to consider the lawsuit as a group. This litigation began seven years ago over Google's desire to create the world's largest digital library. In March 2011, judge Denny Chin rejected a settlement in the matter over antitrust and copyright concerns.


Kurt Cobain

Courtney Love continues to lose control over the estate of her late husband, Nirvana front man Kurt Cobain. In 2009, Love lost custody of the couple's only daughter Frances Bean Cobain. Recently uncovered documents now show that Frances Bean has taken over control of the publicity rights for Kurt Cobain's name, likeness and appearance. The Fix reports that "the documents show that Love agreed to step down as Acting Manager of End of Music LLC--the business entity responsible for generating cash from Cobain's publicity rights--once she'd received a $2.75 million loan from Frances' trust fund in 2010 . . . Until Courtney pays it back, she won't receive a dime from Kurt's name, likeness or appearance from the deals formed by Frances and her advisers since December 2010." Frances also has the final say in business agreements of End of Music LLC. Courtney Love remains a company member, but has no power to make decisions on anything bearing the likeness of Cobain.


Greg Mortenson

The U.S. District Court for the District of Montana dismissed a class-action fraud lawsuit against Greg Mortenson, author of bestselling book "Three Cups of Tea." The lawsuit alleged that Mortenson fabricated much of the story in his book about promoting education for girls in Pakistan and Afghanistan. It also alleged that Mortenson and his publisher and non-profit Central Asia Institute fabricated material intended "to induce unsuspecting individuals to purchase his books and donate to [Central Asia Institute]. The court dismissed the lawsuit for the ""imprecise, in part flimsy, and speculative nature of the claims and theories advanced" by the plaintiffs. The lawsuit was filed in May 2011, after a "60 Minutes" program that disputed the author's account, and stated that his institute was largely being used to promote the author's book. The Montana Attorney General also investigated Mortenson's claims, and Mortenson acknowledged that less than half of his institute's proceeds were used to build schools, but that "much of the remainder was spent on CAI's other charitable programs." Mortenson entered into a settlement with the Montana Attorney General, agreeing to pay $1 million to compensate his Montana-based charity for using his non-profit to promote and buy copies of his book.


Linda Evangelista

Model Linda Evangelista is asking for a record $64,000 month in child support from millionaire François-Henri Pinault for their 5 year-old son. The child could get a total of $807,000 a year in child support, if the Court grants Evangelista's motion. Pinault is the chief executive of PPR, the conglomerate that owns Yves Saint Laurent, Gucci and Bottega Veneta. Pinault's lawyers claim that Evangelista's claim is beyond excessive. Yet Evangelista counters that their child needs armed bodyguards and his own driver. When questioned by the court as to why her son needs around-the-clock nannies and how much she works, Evangelista responded that when she works, it can be a 16-hour day. "On days when I do not work, I am working on my image. I have to hit the gym. I have beauty appointments. I have to work toward my next job and maintaining my image, just like an athlete."


Pro Bono Requirement to Join NY Bar

By Irina Tarsis

Few, if any, New York State law students know that May 1 is known as a Law Day, at least in the United States and among lawyers. Another curious fact law students may find noteworthy is that New York State may soon require them to work for free for 50 hours before being licensed to practice.

This year, on May Day or Law Day 2012, in his address to judges, lawyers and lawmakers assembled in Albany, Chief Judge Jonathan Lippman announced that starting in 2013, the approximately 10,000 applicants to the New York State Bar will have to show that they have performed 50 hours of pro bono work to qualify for admission. The impetus for requiring thousands of hours of unpaid work from recent graduates comes from the undeniable fact that a growing number of people in New York State cannot afford legal services: artists and blue colored workers, veterans and single parents, victims of domestic violence and the elderly. Free legal service providers such as The Legal Aid Society, Pro Bono Partnership, Volunteer Lawyers for the Arts, and New York Lawyers for the Public Interest have witnessed an increase in requests for free assistance with civil legal matters since the economic downturn. The courts have noted that the legal system is failing to provide justice to those unable to afford legal counsel. Lippman believes that the requirement would begin to satisfy the unmet need for lawyers to represent the poor and encourage lawyers-to-be to serve the public.

As a member of EASL's Pro Bono Committee, I agree that it is important to provide assistance to those who need it for reasons other than personal financial enrichment. We already offer free services for some transactional and litigation matters and provide opportunities to law students and recent graduates to shadow experienced attorneys performing pro bono work. However, making pro bono work mandatory may not be the best way of encouraging attorneys to help.

The same economic conditions that have forced more people to seek free representation have left hundreds of recent graduates with little work prospects (for more, read about legal actions brought by law graduates against their schools, such as: "Grads Can't Sue Law School for Allegedly Inflating Job Data," Bloomberg BNA (April 11, 2012 available at http://www.bna.com/grads-cant-sue-n12884908890/) or the state of law firms such as Dewey and LeBoeuf in the New York Times ("For Law Students, Dewey & LeBoeuf Internships Evaporate" (May 3, 2012) available at http://www.nytimes.com/2012/05/03/business/derailed-on-the-fast-track.html)). Legal positions advertising for junior attorneys are consistently asking for 3 to 5 years of legal experience. The conundrum is obvious. If the newly graduating attorneys can be put to use in helping the poor, they would gain hard legal skills and perhaps become employable in a few years time; however, they require training, supervision and means to survive.

Some of the concerns with the Lippman initiative include whether the State may be pairing poor people with lawyers who resent the task; should the State settle young lawyers, already in debt and struggling to find jobs with additional obligations and blocks to bar admission, what are the benefits of relegating representation of the indigent to inexperienced and thus underqualified counsel?

Law school administrators in New York State are faced with these questions: How may law schools assist in bridging the gap and increase free legal services to the indigent? How can the schools make their graduates more marketable and employable after three years of classroom training?

To provide quality pro bono work as contemplated by Lippman's announcement would require supervision and training either at schools with experienced clinical faculty, at understaffed and underfunded free legal service providers, or at firms, ever-reticent to foot the bill for loss-making work. The hidden costs of such training by nonprofits will have to be addressed either through increased tuitions or through state funding - another conundrum. An optimist would argue that in light of the importance placed on clinical education and practical skills, students are likely to embrace the new requirement. A realist would hedge and say that students would be open to taking on more extracurricular activities only if they can fulfill the requirement while in law school or if they are guaranteed employment subsequently. According to Lippman, admission to New York state bar is "most coveted;" however, even that coveted license gives no guarantees.


Anne Barnard, "Top Judge Makes Free Legal Work Mandatory for Joining State Bar," THE NEW YORK TIME (May 1, 2012) available at http://www.nytimes.com/2012/05/02/nyregion/new-lawyers-in-new-york-to-be-required-to-do-some-work-free.html.

Joel Stashenko, "Lippman Announces Pro Bono Requirement for Bar Admission," NY Law Journal (May 1, 2012) available at http://www.newyorklawjournal.com/PubArticleNY.jsp?id=1202550864281&slreturn=1.

May 11, 2012

Weekly Issues in the News

By Geisa Balla

Myspace as the Newest FTC Settlement

Myspace settled charges with the FTC that it misled millions of users about sharing personal information with advertisers. The settlement will require the company to create a comprehensive program that protects consumers' information and bars Myspace from misrepresenting how it protects its users' privacy. Myspace will be subject to independent reviews of its privacy program for the next 20 years. The FTC settled in 2010 with Twitter over failure to safeguard users' personal information, and in 2011 it found that Facebook and Google Inc. had also engaged in deceptive privacy practices. Facebook and Google are subject to 20 years of audits, and Twitter is subject to 10 years of audits.



The Second Circuit Court of Appeals held on May 10, 2012, that CBS Corp and its chief executive, Leslie Moonves, are not liable to shareholders to failing to quickly disclose that the company would take a $14 billion writedown during the 2008 financial crisis. The Court held that the shareholders did not sufficiently show that CBS committed securities fraud by ignoring accounting standards for valuing goodwill. CBS shares dropped 20 percent on October 10, 2008, when CBS announced the writedowns. CBS is required by the Financial Accounting Standards Board to examine whether to write down goodwill, which reflects the difference between a company's value taken as a whole and the company's book value. The shareholders claimed in their lawsuit that CBS should have reviewed its goodwill in early 2008, as the economic downturn was commencing and as its market value and advertising revenue were dropping. However, the Court did not agree. "All of the information alleged to constitute 'red flags' ... were matters of public knowledge," it said. "CBS's market price would at all pertinent times have reflected the need for, if any, or culpable failure to undertake, if any, interim impairment testing.... That being the case, the second amended complaint does not sufficiently allege reliance upon a fraudulently inflated price."



Zynga Inc., the publisher of popular Facebook games like FarmVille and CityVille filed a trademark infringement suit against French game publisher Kobojo in federal court in San Francisco. The lawsuit is based on Kobojo's release of PYRAMIDVILLE in early 2011. The complaint alleges that "Facebook users are likely to believe, erroneously, that PYRAMIDVILLE is a member of Zynga's 'VILLE Family of Games." Zynga's effort to secure a trademark for the word "Ville" has stalled in the USPTO. The complaint states that Zynga has "consistently promoted the 'VILLE Family of Games together as a family, identified by the distinctive 'VILLE suffix." "Zynga's "Ville" family includes many well-known games, including FarmVille, CityVille and CastleVille, and the "Ville" suffix is strongly associated by gamers with Zynga," Zynga said in a statement Monday. "Given Kojobo's refusal to change their game name, legal action was necessary to defend our famous marks and prevent player confusion." The claim seeks treble damages against Kobojo.


Christopher Burch

A new lawsuit against Christopher Burch, ex-husband and business partner of designer Tory Burch, alleges discrimination and preference for hiring gay men. The lawsuit claims that Mr. Burch openly stated that he "only hired gay men because they were productive and he trusted them." The plaintiff and former employee Jamie Ardigo allegedly found the remark "extremely offensive" and complained about it and other "inappropriate comments," resulting in his termination from his human resources job in February 2012. Burch's attorney stated: "The defendants deny the allegations of discrimination and retaliation set forth in the complaint and are prepared to mount a vigorous defense."



A Virginia court recently ruled that the "like" button on Facebook is not constitutionally protected speech. Six people in Virginia said they were fired after "liking" the page of their boss' election rival. Their boss, Sheriff B.J. Roberts, fired them for supporting an opponent in his 2009 re-election bid. The workers then sued, saying that their First Amendment rights were violated. While public employees are allowed to speak as citizens on matters of public concern, the judge on the case ruled that clicking the "like" button did not amount to expressive speech. The judge stated that while other courts have ruled that Facebook posts are protected speech, simply clicking on the "like" button is different and does not warrant First Amendment protection. "It's not a very deep one, but you're making a statement." James H. Shoemaker, a lawyer for one of the dismissed workers, said that he was surprised by the April 24th ruling and stated that it would be appealed.


CBS Broadcasting Inc. v. ABC, Inc.

By Kim Endelson

CBS filed a complaint today against ABC and several producers and staff in the U.S. District Court, Central District of California, alleging, among other claims, misappropriation of trade secrets, breach of contract, and copyright infringement. CBS contends that ABC's new show "Glass House" is a "carbon copy" of its show "Big Brother", and that 19 former "Big Brother" producers and staff now work on "Glass House."

"Glass House" is a reality show featuring 14 contestants who live in a large house and are filmed continuously. Viewer votes determine which contestants will remain in the house, with the final contestant receiving a six-figure cash award.

CBS is seeking an injunction to stop the airing of the show, scheduled for June 18th, as well as $500,000 for each violation of non-disclosure agreements signed by the former "Big Brother" employees.

CBS claims that the "imitation" is an "obvious attempt" to capitalize on the success of "Big Brother." ABC said the lawsuit has no merit. An ABC spokesperson commented, "The differences between 'Glass House' and 'Big Brother' are both fundamental and obvious, ranging from 'Glass House's' interactive elements and audience participation to its deployment of cutting edge technologies."



Scorpio v Willis Decision - Termination of Post-1977 Grants

Case 3:11-cv-01557-BTM-RBB Document 30





Case No. 11cv1557 BTM (RBB)


Defendant Victor Willis ("Willis" or "Defendant") has filed a motion to dismiss Plaintiffs' Complaint. On March 20, 2012, the Court held oral argument on the motion. For the reasons discussed below, Defendant's motion is GRANTED.


Defendant Victor Willis is the original lead singer of the Village People. This lawsuit concerns Willis's attempt to terminate his post-1977 grants to Can't Stop Music of his copyright interests in 33 musical compositions ("Compositions"), including the hit songs, "YMCA," "In the Navy," and "Go West."

Plaintiff Scorpio Music S.A. ("Scorpio") is a French corporation engaged in the business of publishing and otherwise commercially exploiting musical compositions. (Compl. ¶ 1.) Plaintiff Can't Stop Productions, Inc., ("CSP") is the exclusive sub-publisher and administrator in the United States of musical compositions published and owned by Scorpio Music. (Compl. ¶ 2.) Can't Stop Music ("CSM") is a division of Plaintiff Can't Stop Productions, Inc.

Plaintiffs allege that between 1977 and 1979, they hired Willis to translate the lyrics of and/or create new lyrics for certain musical compositions which were owned and published in France by Scorpio. Copyright registrations for the 33 Compositions at issue credit Willis as being one of several writers. (Compl. ¶ 12.) By way of Adaptation Agreements, Willis transferred his copyright interests in the subject Compositions to CSM, and CSM thereupon assigned to Scorpio its rights in the lyrics. (Compl. ¶ 11.) The Adaptation Agreements provided that Willis would receive a set percentage (12%-20%,depending on the composition) of CSM's gross receipts from exploitation of the Compositions.

In January 2011, Willis served on Plaintiffs a "Notice of Termination of Post-1977 Grants of Copyright on Certain Works of Victor Willis" with respect to his interests in the 33 Compositions. (Ex. A to Complaint.)

On July 14, 2011, Plaintiffs commenced this lawsuit. Plaintiffs challenge the validity of the termination and seek a declaratory judgment that Willis has no right, title, or interest in the copyrights to the Compositions, requiring Willis to withdraw the notice of termination, and enjoining Willis from making any claims to the copyrights in the Compositions. In the event that Willis is found to have a right to terminate, Plaintiffs seek a declaration that (1) Willis's reversion of rights be limited to "the same percentage ownership as he receives as compensation relating to the Compositions and as set forth in the Adaptation Agreements"; and (2) Willis be enjoined from terminating any licenses issued or derivative works authorized, by Plaintiffs, which existed prior to the termination of the copyright assignment.


A. Valdiity of the Notice of Termination

Plaintiffs' main argument is that Willis's notice of termination is not valid because Willis is the only author who served a notice of termination. According to Plaintiffs, under 17 U.S.C. § 203(a)(1), a majority of all of the authors who transferred their copyright interests in a joint work, whether their transfers were part of the same transaction or separate transactions, must join in a termination for it to be valid. Willis and Amicus Songwriters' Guild of America ("SGA"), on the other hand, contend that since Willis was the only person who executed the grants of his copyright interests in the Compositions, he alone has the ability to terminate those grants. The Court agrees with Willis and SGA.

Because the transfers of copyright at issue in this case occurred after January 1, 1978, the Copyright Act of 1976 ("Act") governs. The Act provides authors and their statutory successors with the ability to terminate a transfer of copyright or license by serving advance notice under specified time limits and conditions.

17 U.S.C. § 203 provides:

(a) Conditions for Termination.--In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions:
(1) In the case of a grant executed by one author, termination of the grant may be effected by that author or, if the author is dead, by the person or persons who, under clause (2) of this subsection, own and are entitled to exercise a total of more than one-half of that author's termination interest. In the case of a grant executed by two or more authors of a joint work, termination of the grant may be effected by a majority of the authors who executed it; if any of such authors is dead, the termination interest of any such author may be exercised as a unit by the person or persons who, under clause (2) of this subsection, own and are entitled to exercise a total of more than one-half of that author's interest.

Termination of the grant may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant. 17 U.S.C. § 203(a)(3).

To terminate a grant, a termination notice must be served on the grantee or grantee's successor not less than two nor more than ten years before the date of termination specified in the notice. 17 U.S.C. § 203(a)(4)(A).

The issue before the Court is whether, in a case where joint authors of a work transfer their respective copyright interests through separate agreements, a single author may alone terminate his separate grant of his copyright interest in the joint work or whether a majority of all the authors is necessary to terminate that grant. Upon consideration of the language and purpose of 17 U.S.C. § 203 in conjunction with the law governing the rights of joint authors, the Court concludes that a joint author who separately transfers his copyright interest may unilaterally terminate that grant.

When interpreting a statute, we start with the "plain meaning" of the statue's text. In re Roman Catholic Archbishop of Portland in Oregon, 661 F.3d 417, 433 (9th Cir. 2011). As explained by the Supreme Court, "courts must presume that a legislature says in a statute what it means and means in a statute what it says there." Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253-54 (1992). However, "we do more than view word or sub-sections in isolation. We derive meaning from context, and this requires reading the relevant statutory provisions as a whole." Hanford Downwinders Coal., Inc. v. Dowdle, 71 F.3d 1469, 1475 (9th Cir. 1995).

Section 203(a)(1) provides, "In the case of a grant executed by one author, termination of the grant may be effected by that author." Section 203(a)(1) goes on to provide, "In the case of a grant executed by two or more authors of a joint work, termination of the grant may be effected by a majority of the authors who executed it." When referring to a grant executed by two or more authors of a joint work, section 203(a)(1) refers to a "grant" in the singular, not "grants." Thus, under the plain meaning of the statute, if two or more joint authors join in a grant of their copyright interests, a majority of the authors is necessary to terminate the grant. If, however, a single joint author enters into a grant of his copyright interest, that author alone can terminate his grant.

The Court's reading of section 203(a)(1) harmonizes with the law governing the rights of joint authors, both as it existed at the time of the passage of the Act and as it exists today. As recognized in the House Report accompanying the passage of the Copyright Act of 1976, "Under the bill, as under the present law, coowners of a copyright would be treated generally as tenants in common, with each coowner having an independent right to use of [sic] license the use of a work, subject to a duty of accounting to the other coowners for any profit." H.R.Rep. No. 94-1476, at 121 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5736. (The Act added section 201(a), which states, "The authors of a joint work are coowners of copyright in the work.")

Then, as now, each co-owner of a joint work becomes a holder of an undivided interest in the whole. Pye v. Mitchell, 574 F.2d 476, 480 (9th Cir. 1978) (citing to 1 Nimmer on Copyright § 69 (1976)). Thus, "[i]n the absence of an agreement to the contrary, one joint owner may always transfer his interest in the joint work to a third party, subject only to the general requirements of a valid transfer of copyright." Nimmer on Copyright § 6.11 (2011) ("Nimmer").

Congress was aware that a single joint author may grant his interest in the joint work separately from his co-authors or may join in a grant with one or more of his co-authors. Knowing this, Congress legislated that "[i]n the case of a grant executed by two or more authors of a joint work," a majority of the authors who executed the grant is necessary for termination. 18 U.S.C. § 203(a)(1) (Emphasis added.) In other words, when two or more authors of a joint work execute a joint grant, a majority of the authors who executed the grant is necessary to terminate the grant. Section 203(a)(1) certainly does not require that a joint author enter into a joint grant with one or more of his co-authors. Nor does the statute provide that where two or more joint authors enter into separate grants, a majority of those authors is needed to terminate any one of those grants.

Plaintiffs argue that the term "grant" as used in section 203(a)(1) refers collectively to all transfers by joint authors, even if the transfers were separate transactions. This argument is not persuasive. Nowhere does the statute indicate that the term "grant" has a special meaning and encompasses all transfers of interest by joint authors, regardless of whether the joint authors individually transferred their interests through different instruments at different times. (In this case, it also appears that at least some of the joint authors granted their copyright interests to Scorpio, not CSM, as Willis did. Thus, Plaintiffs would include under the umbrella of a "grant," separate transactions where copyright interests were transferred to related but different entities.)

Furthermore, it makes sense to interpret the term "grant" to refer to a single transaction whereby the rights of one or more joint authors was transferred, because the time for terminating a grant is calculated from the date of execution of the grant. Under Plaintiffs' interpretation, in the case of separate transfers by joint authors, there would be uncertainty regarding the date of execution, which could become a moving target. For example, if joint authors A, B, C, and D each separately transferred their interests, with an interval of several years between each transfer, would the "date of execution" keep changing as each author transfers his/her interest? If so, it could be many years after A's transfer that the "grant" is considered "executed."

Finally, it would be contrary to the purpose of the Act to require a majority of all joint authors who had, at various times, transferred their copyright interests in a joint work to terminate the legally permissible separate grant by one joint author of his undivided copyright interest in the work. The purpose of the Act was to "safeguard[ ] authors against unremunerative transfers" and address "the unequal bargaining position of authors, resulting in part from the impossibility of determining a work's value until it has been exploited." H.R. Rep. No. 94-1476, at 124 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5740. Under Plaintiffs' interpretation, it would be more difficult to terminate an individual grant than it would be to make it in the first place.

Plaintiffs attempt to support their position by pointing to the law governing pre-1978 grants. Grants executed prior to January 1, 1978 are terminable by each executing joint author (to the extent of the particular author's interest), even if a majority of the executing joint authors do not join in the termination. 17 U.S.C. § 304(c)(1). As discussed in Nimmer, § 11.03, it appears that Congress treated pre-1978 grants differently because if a grantor of renewal rights failed to survive until such rights vested, the renewal rights would pass to the grantor's successors and the original grantee would take nothing. Accordingly, "[b]ecause joint-author grants of renewal rights thus terminate individually by operation of law upon an author's death, it was thought 'inappropriate' to require anything more than individual termination via the termination provisions." Id. The stricter requirement for termination of post-1977 grants begs the question of whether a "grant" may encompass separate transfers of interest by joint authors and does not shed any light on the matter before the Court.

Plaintiffs attempt to support their position by relying on language in Sweet Music, Inc v. Melrose Music Corp., 189 F. Supp. 655 (S.D. Cal. 1960), where the court explained that it did not make a difference to the outcome of the case that plaintiff joined in the same assignment agreement as the deceased co-author as opposed to having executed a separate assignment. However, Sweet Music concerned the enforceability of an assignment of renewal interests by one author where a co-author, who also assigned his renewal interests, died prior to renewal. Sweet Music did not concern the termination of grants under the Copyright Act of 1976 and does not shed light on the issue before the Court.

The Court concludes that because Willis granted his copyright interests in the Compositions separately from the other co-authors, Willis may, under 17 U.S.C. § 203, unilaterally terminate his grants. Thus, Plaintiffs' declaratory relief claim fails to the extent it is based on the inability of Willis to terminate his grants of copyright. To be clear, Willis's termination affects only the copyright interests that he previously transferred (his undivided interest in the joint work). The copyright interests transferred by the other co-authors will not
be affected by Willis's termination.

B. Writer for Hire

In their Complaint, Plaintiffs allege that Willis has no rights in the copyrights at issue because he was a "writer for hire" who rendered his services as an employee of CSM. At oral argument, counsel for Plaintiffs represented that they were withdrawing this claim.

C. Percentage of Copyright Interest

In the event Willis is found to have a right to terminate his grants of copyright interest in the Compositions, Plaintiffs seek a declaration that Willis "be limited to the same percentage ownership as he receives as compensation relating to the Compositions and as set forth in the Agreements." (Compl. at 9.) However, Plaintiffs' claim is not supported by the law.

Upon termination, Willis would get back what he transferred - his undivided interest in the whole. See 17 U.S.C. § 203(b) (explaining that upon the effective date of termination, "all rights under this title that were covered by the terminated grants revert to the author . . . .") Absent a different agreement among the joint authors (of which there is no evidence in this case), the joint authors shared equally in the ownership of the joint work, even if their respective contributions to the joint work were not equal. Nimmer, § 6.08. Thus, if Willis was one of three joint authors of a musical composition, Willis would have a 1/3 undivided copyright interest in the composition. If Willis granted his copyright interest in the composition to CSM and then later terminated that grant, Willis would get back his 1/3 undivided copyright interest, regardless of what percentage royalty he was paid during CSM's ownership of the copyright interest.

Plaintiffs do not claim that the royalty percentages, which ranged from 12 to 20%, were based on the percentage of Willis's copyright interests, and it does not appear that this was the case. For example, Willis is one of three authors listed on the copyright registration for "YMCA." (Def. Ex. C.) Assuming the three authors were actually joint authors, Willis has a 1/3 undivided interest in the copyright. However, the Adaptation Agreement pertaining to YMCA provides for a 20% royalty. (Def. Ex. B.)

Plaintiffs do not cite any legal authority supporting the proposition that upon termination of his grants, Willis does not get back the percentage of copyright interest he granted, but, rather, is limited to a percentage of ownership equal to the royalty percentage. The Court concludes that Plaintiffs' position lacks merit and dismisses Plaintiffs' declaratory relief claim on this issue.

It appears that there is a dispute between Plaintiffs and Willis, with respect to some or all of the Compositions, regarding the percentage of copyright interest Willis originally held, granted, and wants back. At oral argument, counsel for Willis indicated that Willis contends that Henri Belolo, one of the individuals listed as an author on the copyright registrations for some or all of the Compositions, was not actually a joint author. If Willis is correct, his undivided interest in the Compositions is larger than it appears. For example, Willis would have a 1/2 undivided interest in YMCA instead of a 1/3 undivided interest.

The Complaint makes a passing reference to the dispute regarding authorship. The Complaint states that upon information and belief, Willis claims the right to recapture at least half of the copyrights in each of the Compositions. (Compl. ¶ 34.) The Complaint also states that Willis "ignores the existence of other people listed as writers of the Compositions to claim that he, alone, wrote all of their lyrics." (Compl. ¶ 35.) However, the Complaint does not seek a declaration regarding the determination of the issue of authorship and the percentage of copyright interest Willis granted and is entitled to receive back.

It is necessary for Plaintiffs to know what percentage of the copyright interest Willis is entitled to receive back, because, among other things, it will affect Plaintiffs' duty to account to Willis and the other joint author(s). Therefore, the Court will allow Plaintiffs to amend their Complaint to seek declaratory relief on this issue.

D. Statute of Limitations

In the Complaint, Plaintiffs allege that Willis's claim to the copyright in the Compositions is somehow time-barred.

To the extent Plaintiffs argue that Willis is time-barred from arguing that a "co-author" listed on a copyright registration is not actually a joint author, this argument is premature. As already discussed, Plaintiffs have not yet sought a declaration regarding the percentage of Willis's copyright interest in each of the Compositions. To the extent Plaintiffs argue that Willis is time-barred from claiming that the percentage of his copyright interests exceeds the royalty percentages set forth in the Adaptation Agreements, the Court rejects Plaintiffs' argument. For the reasons discussed above, Plaintiffs' claim that the percentage of copyright interest recoverable by Willis is capped by the royalty percentage has no legal basis, and Plaintiffs have not explained why Willis should be time-barred from asserting his rights under the law.

E. Termination of Existing Licenses and Derivative Works

Plaintiffs also seek a declaration that Willis is precluded from terminating any licenses issued or derivative works authorized by Plaintiffs prior to the termination of the copyright assignment. Willis does not dispute that existing derivative works may continue to be exploited under existing licenses under the terms of the grants and the existing licenses. See 17 U.S.C. § 203(b)(1). Therefore, it does not appear that there is a controversy in this regard. If Plaintiffs can point to facts showing that there is a controversy regarding utilization of derivative works prepared prior to the termination of the grants, Plaintiffs may amend their Complaint to include these facts.


For the reasons discussed above, Willis's motion to dismiss is GRANTED. Plaintiffs' Complaint is DISMISSED for failure to state a claim. The Court grants Plaintiffs leave to file an amended complaint within 30 days of the entry of this Order. If Plaintiffs do not file an amended complaint, this case shall be closed.


DATED: May 7, 2012

BARRY TED MOSKOWITZ, Chief Judge United States District Court
10 11cv1557 BTM(RBB)

May 16, 2012

Oracle America, Inc. V. Google Inc.

10-3561, U.S. District Court, Northern District of Cal. (2012)

By Monica Corrine Moran

In a controversial decision dated May 7, 2012, United States District Judge William Alsup in the Northern District of California denied Oracle America, Inc.'s, (Oracle) request for a ruling that could have potentially established that the defendant Google, Inc. (Google) is liable for copyright infringement. Oracle requested that the court grant relief in its favor on the basis of fair use after a jury found, in part, that Google infringed parts of its Java platform language to create the Android mobile operating system. The jury however, was deadlocked over whether Google's use of the Java platform constituted fair use, as it could reasonably be found that Google's infringement was incompatible with Java platform system. (Rpt ¶ 288).

As articulated in Oracle's amended complaint, the Java platform is a bundle of related programs, specifications, reference implementations, developer tools and resources, that permits a user to develop applications written in the Java programming language on servers, desktops and mobile devices. (Case 3:10-cv-03561 - WHA). Oracle acquired ownership in the Java platform as a result of its purchase of Sun Microsystems, Inc. (Sun).

At the heart of Oracle's copyright claim was its contention that Google copied its Java code without obtaining a license to create the Android mobile operating system. In its response, Google asked the jury to consider that, prior to Oracle's purchase of Sun, it made the Java programming language freely available to the public and publicly approved Google's use of the Java in Android, and that Google adhered to fair use guidelines in developing Android with the free and open source code in Java APIs. In addition, Google argued that because Sun never licensed an incompatible version of Java to competitors, any hypothetical loss would be excessively speculative. (Br. 4, Supp. Br. 11-14).

Under U.S. copyright law, the doctrine of fair use states that anyone can defend a use of an unauthorized copyrighted work if the work is being used in the context of teaching, news reporting and commentary, or to advance the public interest.

This decision has the potential of leading to a new trial on the query of whether Google's infringement makes it liable for as much as two and a half billion dollars in damages through the end of 2012, based on a hypothetical lost license fee calculated at the fair market value of the copyright at the time of infringement. (Mackie v. Rieser, 296 F.3d 909, 917 (9th Cir. 2002)).

Following jury deliberations on this issue, this court will then hear arguments as to whether Google violated U.S. patents held by Oracle.

From the Village to the Arena: Copyright Termination Issues Left Unsung In Aftermath of the Village People Ruling

By Lisa A. Alter
(212) 707-8377

The Los Angeles District Court ruling that Village People Songwriter Victor Willis is entitled to terminate his grants of rights in 33 musical compositions is being hailed as a landmark decision that "will send shock waves through the record industry." The case is the first to be decided under the provision of the U.S. Copyright Act that affords authors (including composers and lyricists) and their heirs the right to terminate grants under copyright made by the author on or after January 1, 1978. That provision, 17 U.S.C. Section 203, was specifically designed by Congress to allow creators the chance to recapture their creations 35 years after contracting them away (or 40 years after the works were first published, whichever date arrives sooner). While Section 203 of the Copyright Act (like Sections 304(c) and (d) which govern terminations of grants made prior to 1978) was intended to protect the interests of authors who all too frequently entered into inequitable contracts due to their unequal bargaining position, the lobbying efforts of book and music publishers anxious to hold on to these copyrights made the resulting legislation far more complex. Indeed, the termination provisions and the Copyright Office regulations that complement them are sufficiently confusing so that it is difficult for a creator to reclaim his or her rights without consulting with a lawyer specifically working in the copyright area.

That said, the question addressed by the court in Scorpio Music S.A. v. Victor Willis was actually quite simple: was it necessary for Willis' co-authors to join him in serving notice of termination on the publisher, Scorpio Music. This is an issue that never should have gone to court. The Copyright Act states plainly and succinctly that where 2 or more authors execute a grant of copyright a majority of those authors are required to terminate the grant. However, "In the case of a grant executed by one author, termination of the grant may be effected by that author." No other songwriters were party to the contracts entered into by Willis and Scorpio Music; presumably, his co-writers entered into separate agreements with the music publisher. Based on this fact and the "'plain meaning' of the statute's text" the Willis court held that "a joint author who separately transfers his copyright interest may unilaterally terminate that grant." While it is gratifying that the first time the Section 203 termination right (commonly referred to as the "35 Year Termination Right") has come under judicial scrutiny the court ruled in favor of the author, the very limited fact pattern reviewed in this case makes the decision fairly inconsequential. The law is quite clear as to how many authors must serve notice of termination based on the number of authors who are signatory to a specific grant, but there are other areas of ambiguity in the statute which, if litigated, will have a far greater impact on the music industry than Willis.

Foremost among the open issues is a question that goes straight to the heart of the record industry: may recording artists terminate agreements entered into with record labels and recapture the rights to their sound recordings? Since the enactment of the Copyright Act, many songwriters, composers and heirs have successfully invoked the statutory termination provisions. However, due to the fact that sound recordings were not within the scope of federalcopyright laws prior to February 15, 1972, until recently there has been little consideration of the application of the termination provisions to grants of rights in sound recordings. Clearly allowing recording artists to assert termination rights would further the intent of Congress to "safeguard authors against unremunerative transfers." If the balance of power in the negotiation between a songwriter and publisher is inequitable, how much more so is that of the negotiation between the artist and record company?

Yet record labels, concerned about imminently losing control of valuable sound recordings from the late '70s and early '80s, have mounted a 2-prong argument against allowing recording artists to exercise their statutory termination rights. First, claim the labels, sound recordings are by definition works made for hire and thus outside the scope of the statutory termination provisions. However, while in certain circumstances a sound recording may be found to be a work made for hire (meaning, in essence, that the record company is the "author" of the work), this is a factual determination that must be made (or potentially litigated) on a case by case basis. The Copyright Act does not state that sound recordings are by definition works made for hire and, indeed, most sound recordings would fail to meet the work for hire criteria set forth in the Copyright Act.

The record companies' second line of attack is that, in the event that sound recordings are not works made for hire, multiple parties may have authorship standing and thus be entitled to assert a termination right. These parties, the labels assert, could include not only artists, but also producers, mixers, sound engineers, and editors, among others. While this is an interesting question (the Copyright Act does not define "author" in any instance other than to state that the "author" of a work made for hire is the employer) it is clearly not grounds for preventing an artist from asserting the 35 Year Termination Right with respect to a contract entered into between the record company and that artist. Since this issue may also be the subject of litigation (one can envision the action brought by a record company served with notice of termination by a mixer or editor) it would certainly be prudent for Congress to circumvent the matter by amending the Copyright Act to provide a definition of the author of a sound recording as the featured artist or artists, or, in the event there is no featured artist, the featured producer.

While the recent decision in the Village People songwriter case is frequently mentioned in the same sentence as the record industry, the case involved the rights of a songwriter versus a music publisher with respect to musical compositions written by the songwriter. Record rights were not involved at all. The Willis case was a frivolous lawsuit brought by a desperate music publisher not well versed in the U.S. copyright law. It is probable, however, that more substantive cases will be brought under Section 203 of the Copyright Act, and highly likely that those cases will focus on the right of an artist to terminate a grant of rights in a sound recording.

Hopefully, the decision of Judge Moskowitz to uphold Willis' right to terminate the grant of rights in his songs based not only on the plain meaning of the law but also on the recognition of the Congressional purpose in enacting the termination provisions, will offer guidance to future courts examining the termination rights of recording artists.

May 18, 2012

Is Manga a Crime? Non-photographic Images, Child Pornography and Freedom of Expression

Wednesday, May 23, 2012

- Location -
Sotheby's Institute of Art
570 Lexington Avenue,
6th Floor
New York, NY


Sponsored by the Digital Media & Fine Arts Committees of the New York State Bar Association Entertainment, Arts, & Sports Law Section

Amy Adler, Professor of Law, New York University School of Law
Michael Delohery, Chief, High Technology Crime Bureau, Westchester County DA's Office
Charles Brownstein, Executive Director, Comic Book Legal Defense Fund

Program Summary:
In Ashcroft v. Free Speech Coalition, 535 U.S. 234 (2002), the US Supreme Court deemed certain parts of the Child Pornography Prevention Act of 1996 (CPPA) unconstitutional as it prohibited lawful speech (images that do not involve minors, including drawings). Following this decision, the PROTECT Act of 2003 was passed.

Individuals in the United States have been charged and sentenced under the PROTECT Act because of their possession of non-photographic images deemed to be child pornography. In US v. Handley, 564 F. Supp. 2d 996 (S.D. Iowa 2008), Judge Gritzner deemed certain sections of the PROTECT Act unconstitutional (18 U.S.C.S. § 1466A(a)(2) and (b)(2)) but allowed the sections that required the application of the Miller test for obscenity (18 U.S.C.S. 2252A), Miller v. California, 413 U.S. 15 (1973). Handley entered into a guilty plea bargain so a jury never got to determine whether or not the manga in his collection was obscene.

The current law raises concerns for creators, publishers, and collectors of various forms of entertainment (including, but not limited to, comics/manga, video games, and fine art), and this panel will explore the legal issues facing these groups in light of the cases and laws mentioned above. The panel will also address international concerns with transporting these images across borders, specifically the Canadian border.

1.5 MCLE Credits in Professional Practice

Weekly Issues in the News

By Geisa Balla

E-books, Apple

Southern District of New York Judge Denise Cote has denied motions to dismiss filed by Apple Inc. and five other publishers in the e-books class action case. The lawsuit is related to Department of Justice (DOJ) charges in April 2012, accusing Apple and other e-book publishers of colluding to break up Amazon.com's dominance of the digital book market. HarperCollins Publishers Inc., Simon & Schuster Inc. and Hachette Book Group reached settlements with the DOJ. Apple, Macmillian and Penguin said in court last month that they want to go to trial to defend themselves of the charges. The consumers' main allegation in the class action suit is that the publishers worked together to raise prices and decrease competition, with Apple coordinating the agreement among them. The publishers moved to dismiss the complaint, but the judge was not persuaded. Judge Cote said that as alleged in the complaint, "it is presumed that the conduct by all parties would be unlawful under the rule of reason." In their motion papers, the defendants argued that the alleged pricing agreement was implausible, and that after the purported pricing agreement, prices became more varied, not less so. According to the DOJ's complaint, the price fixing took place in early 2010, as Apple was introducing its iPad, and e-book prices went up an average of $2 to $3 in a three-day period in early 2010.


Skechers Settlement

Skechers USA Inc. has agreed to pay $50 million to settle Federal Trade Commission (FTC) charges that it made unfounded claims when it advertised that its "toning shoes" would enable users to get stronger and lose weight. The FTC stated that Skechers was deceptive in the making of its Shape-ups, Resistance Runner, Toners and Tone-ups shoes. Skechers will pay $40 million to the FTC, which will return most of this settlement to consumers who bought the company's toning shoes. Skechers will pay an additional $5 million to 43 states and the District of Columbia, and another $5 million to the class action attorneys. David Vladeck, director of FTC's Bureau of Consumer Protection stated: "Skechers' unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health." Skechers denied that its advertising was deceptive, saying that peer-reviewed journals had found fitness benefits from toning shoes. David Weinberg, the company's CFO, said in a statement: "We settled to avoid the cost and distraction of protracted legal battles so we could get back to doing what we do best." The FTC settled a similar claim with Reebok International Ltd. in 2011, where Reebok said it would pay $25 million for similar charges.


White et al v. West Publishing Corporation

On May 16, 2012, U.S. District Judge Jed Rakoff ruled that attorneys who did not register their works cannot sue West and LexisNexis for violating their copyrights. The decisions stems from a copyright infringement lawsuit brought in February 2012, accusing West and LexisNexis of unjustly profiting from selling attorneys' copyrighted filings. The class action lawsuit had two putative subclasses: attorneys with registered filings and attorneys with unregistered filings. Judge Rakoff stated that the subclass of lawyers who have not registered their filings with the U.S. Copyright Office do not have standing. He stated: "The statute is unequivocal that completing registration or pre-registration is a prerequisite to filing a claim."


Activision and Electronic Arts

Activision Blizzard Inc. settled a lawsuit with rival video game company Electronic Arts Inc. (EA), where Activision alleged that two of its former executives breached their employment contracts in develop games for EA. The two former executives developed the original "Call of Duty" game and several others in the series. After leaving Activision in 2010, the two former executives formed a new development studio, and signed an exclusive publishing and distribution agreement with EA. In a joint statement the companies stated: "Activision and EA have agreed to put this matter behind them." The details of the settlement were not disclosed.


Viacom and Time Warner

Viacom Inc. has settled a lawsuit with Time Warner Cable Inc. (TWC) over whether cable subscribers may watch shows on mobile devices such as iPads. Pursuant to the settlement, Viacom programming will become available over the TWC mobile app over the next several weeks. The companies said in a joint statement: "All of Viacom's programming will now be available to Time Warner Cable subscribers for in-home viewing via Internet protocol-enabled devices such as iPads." The terms of the settlement were not disclosed. Viacom settled a similar lawsuit over iPad streaming with Cablevision Systems Corp in August 2011. Viacom spokesman Mark Jafar said the settlement was "very good news for consumers."


May 24, 2012

Village People's Original Lead Singer Victorious in Termination Lawsuit

By Christine A. Pepe, AVP ASCAP

In Scorpio Music S.A., et al. v. Victor Willis, Judge Moskowitz of the Southern District of California ruled that Victor Willis, song writer and original lead singer of the Village People, could unilaterally exercise his right of termination under the Copyright Act and reclaim his interests in 33 musical compositions, including iconic works such as "Y.M.C.A." and "In the Navy." The decision represents a victory for songwriters and performing artists who typically license or assign their copyrights to music publishers or record labels. To summarize, if an author of a joint work individually executes a grant of copyright to a third party, he or she may unilaterally terminate that grant without majority consent of the other joint authors.

In July 2011, defendant Willis served on the plaintiffs, music publishers to whom Willis had previously transferred his copyright interests in certain compositions, a notice of termination of grants of copyright for 33 musical works. The plaintiffs brought suit against Willis seeking declaratory judgment that: (1) Willis' notice was invalid and (2) should the court find the notice to be valid, Willis' reversion of rights is limited to the royalty percentage that he received under the agreements between the parties.

As Willis' transfer of copyright occurred after January 1, 1978, Section 203 of the Copyright Act applies, which reads in relevant part as follows:

(a) Conditions for Termination.--In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise, than by will, is subject to termination under the following conditions:

(1) In the case of a grant executed by one author, termination of the grant may be effected by that author . . . . In the case of a grant executed by two or more authors of a joint work, termination of the grant may be effected by a majority of the authors who executed it . . .

See 17 U.S.C. § 203 (emphasis added).

With regard to the validity of Willis' termination, the plaintiffs argued that under Section 203 (a)(1), because the subject compositions were joint works, a majority of all authors who transferred their copyright interests in a particular work must join in a termination. In other words, Willis could not unilaterally terminate his grant of copyright. The plaintiffs argued that the statute's language, "In the case of a grant executed by two or more authors of a joint work, termination of the grant may be effected by a majority of the authors who executed it" applies. They urged that the term "grant" as used in this phrase refers collectively to all grants by authors of a joint work, even if they were separate transactions.

Starting with the plain meaning of the statute, the court noted that when referring to a grant executed by two or more authors of a joint work, section 203(a)(1) refers to a "grant" in the singular--not "grants." Based on this observation, the court concluded that if two or more joint authors execute a single grant, only then is a majority necessary to effectuate a termination. If a single author of a joint work executes an individual grant, as Willis did, then that co-author can unilaterally terminate the copyright grant without obtaining consent of the other authors. Such a reading, the court held, harmonizes with the law governing copyright co-ownership--that each co-owner of a joint work holds an undivided interest in the whole and in the absence of an agreement to the contrary, may always transfer or license his or her interest in the joint work to a third party, subject only to a duty of accounting to the other co-owners. As the termination time is calculated from the date of grant execution, the court also found plaintiffs' proposed construction unwieldy. If the term "grant" consists of multiple separately executed grants by joint authors, how would the "date of execution" be calculated? Such a reading, the court determined, would create uncertainty "regarding the date of execution, which could become a moving target."

In the event that Willis' termination notice was valid, the plaintiffs alternatively argued that his reversion of rights should be limited to the royalty percentage that he received under the agreements between the parties. Again relying on traditional principles of copyright co-ownership, the court rejected this argument. Absent an agreement to the contrary, joint authors share equally in the ownership of the joint work, even if their contributions to the work were not equal. In other words, if Willis was one of three joint authors, he would have 1/3 undivided copyright interest in the musical work and upon an effective termination, he would get back exactly that--1/3 undivided copyright interest. The royalty percentage that was negotiated has no bearing on the copyright interest.

Obviously, this decision represents a victory for songwriters and recording artists who wish to terminate their copyright grants. Going forward, it is likely that music publishers and record labels will, as a matter of practice, attempt to have all joint authors execute one single grant so that majority consent is required for there to be an effective termination.


By Gergana Miteva

Aereo is one of several startups that pioneered the concept of streaming TV over the Internet and making it viewable on every available gadget, including smart phones, tablets, and even good old computers. However, Aereo and other similar services never bothered to request licenses or offered to pay anything to the content owners of the broadcasted programming, and they were all promptly sued. Unlike other companies, though, an injunction has not yet been placed on Aereo, and the company has been seamlessly offering online television since March of this year. The plaintiffs in the case, which include Fox, CBS, NBC, and PBC, are claiming that Aereo infringed upon their copyrights by publicly performing and reproducing copyrighted works. They are also claiming unfair competition under state law. (Complaint available at https://www.eff.org/document/wnet-v-aereo-complaint)

Aereo has brought a number of novel concepts to the technological and legal discussion in this highly litigated area. First, according to its pleadings, unlike other similar services, Aereo does not provide access to cable-subscription-only networks such as CNN, USA, and TNT, which has allowed it to argue that it is not offering its subscribers any content they were not already entitled to. Second, it has devised a very cheap to manufacture tiny antenna, which every subscriber would install on his or her rooftop. Unlike other over-the-air signal intercepting antennae, these are not shared among subscribers; each one is dedicated to a single consumer. Third, the programming is not streamed directly to a subscriber's device, rather, the signals are intercepted by the miniscule antenna and retransmitted to and stored on Aereo's remote infrastructure. Then the signal is encoded for streaming over a digital device and transmitted back to the subscriber. (Aereo's Pre-hearing Memorandum of Law available at: http://archive.recapthelaw.org/nysd/392874/)

According to the defendant, no "streaming" takes place, even when the subscriber requests the "watch now" option of its service. Indeed, Aereo claims that the "record" and "watch now" functions trigger exactly the same mechanism of recording the signal on Aereo's infrastructure. The only difference between the two functions is that the "watch now" option plays back the content while it is still being recorded, causing a short delay for the subscriber. Another legally significant detail of Aereo's setup is that only one subscriber would have access to and ability to play the stored content. Even if another subscriber requests the same content at that same time, a unique copy of the program would be stored for that subscriber.

This technological setup may be capable of skillfully bending around many of the obstacles Aereo's brethren have tripped over. Aereo is hoping to defeat the public performance claim by arguing that no public performance takes place when each subscriber is playing his or her unique copy of recorded programming which is exclusive and unique for this subscriber. If this argument sways the court, Aereo would have its cake and eat it too, because from a subscriber's perspective, he or she is watching live, streaming television; while from a legal perspective, subscribers are watching pre-recorded programs, and enjoying the same functionality as provided by DVR or TiVo.

This week, the Southern District of New York dismissed the plaintiffs' state law claim for unfair competition. The court noted that the question of whether private performances of copyrighted works are actionable under New York's unfair competition statute is one of first impression. Concluding that the claim is preempted by the Copyright Act, the court agreed with Aereo that imposing liability on private performances of copyrighted works would extend copyright protection beyond the scope of the Copyright Act. The court reasoned that Congress specifically excluded from copyright protection performances to "a normal circle of a family and its close social acquaintances," to indicate its intent to not impose liability for this type of activity. (Opinion available at: http://www.mediabistro.com/tvspy/aereo-scores-legal-victory-over-broadcasters_b49496)

Stay tuned, because the "season finale" on the copyright infringement claims under the theories of public performance and reproduction of copyrighted works, is coming up next...

May 25, 2012

Ethics, Advertising and Social Networks

By Lisa Fantino

Who could believe that "socializing" could get attorneys into trouble? Yet, with all of this Linking in, Facebooking, Tweeting and now "pinning," lawyers are on the horns of an ethical dilemma. How do we stay current with modern communication in the face of a stringent code for professional conduct on attorney advertising?

The New York State Code of Professional Conduct, Rule 7.1 (f) states: "Every advertisement other than those appearing in a radio, television or billboard advertisement, in a directory, newspaper, magazine or other periodical (and any web sites related thereto), or made in person pursuant to Rule 7.3(a)(1), shall be labeled "Attorney Advertising" on the first page, or on the home page in the case of a web site. If the communication is in the form of a self-mailing brochure or postcard, the words "Attorney Advertising" shall appear therein. In the case of electronic mail, the subject line shall contain the notation "ATTORNEY ADVERTISING."

Most of us are aware that if the electronic communications are to current clients or other lawyers, such communications are generally exempt from this labeling requirement. (See Comment 7) Yet, what about blogs, tweets, status updates and your pinboard on Pinterest?

Comment 6 to Rule 7.1 makes it pretty clear that "Advertising by lawyers consists of communications made in any form about the lawyer or the law firm's services, the primary purpose of which is retention of the lawyer or law firm for pecuniary gain as a result of the communication." One could argue that busy lawyers would not bother writing blogs or tweeting unless the primary purpose of such efforts was to generate billable hours; yet, as a journalist, I would argue that I simply love to write. I enjoy the mental gymnastics of presenting an argument, premises, analysis on any given topic, whether the issue is intellectual property or the death of a rock star. I do it because I love the art of the word and the wit which comes in snappy headlines/tweets.

Do I make new friends along the way? Sure. However, since my blog barely registers a blip on the cyber radar of SEO geeks and I have yet to hear from anyone who reads my tweets, it is highly doubtful that the primary purpose of my efforts is for pecuniary gain from the communication itself.

Comment 8 exempts coffee mugs, t-shirts, pens and pencils which display an attorney's name and contact information, declaring they are not advertising, but considered to be the marketing tools of branding. Really, who writes this stuff? If the attorney or firm is displaying contact information on t-shirts and mugs, what other purpose is there other than to bring clients in the front door? Did the drafters of these rules give much thought to them before casting them in cyber granite?

Certainly, as officers of the court, we are held to a higher standard and may not promulgate fraud, deceit and the like. However, attorneys do not sell their souls for admission to the bar, and participating in 21st century platforms of social communication should not be a threat but a gateway into a social discourse that elevates the intellectual playing field rather than dampens the meaningful dialogue which might result.

Lisa Fantino is an award-winning journalist and solo practitioner. She has a general practice firm in Mamaroneck, New York, where she focuses on entertainment and intellectual property, as well as general corporate transactional and litigation matters. She can be found at http://www.LisaFantino.com or blogging as http://ladylitigator.wordpress.com.

California Resale Royalty Act

By Quinn Heraty

On May 17, 2012, the United States District Court for the Central District of California granted the joint motion of Sotheby's and Christie's to dismiss the claims against them, because the plaintiffs' claims were based on the California Resale Royalties Act (California Civil Code §986, http://www.leginfo.ca.gov/cgi-bin/displaycode?section=civ&group=00001-01000&file=980-989, CRRA), which the court found to violate the Commerce Clause (U.S. Const. art I, §8, cl.3, http://pages.citebite.com/a9d5h3ltvtx, Commerce Clause).

The court's decision represents a victory for art auction houses and for art sellers who reside in California and a defeat for fine artists. However, the parties' respective victory and defeat may be short-lived, because the Equity for Visual Artists Act of 2011 (EVAA) was introduced in each house of Congress in December 2011 (S 2000, http://www.govtrack.us/congress/bills/112/s2000 / HR 3866, http://www.govtrack.us/congress/bills/112/hr3688). The EVAA, sponsored by Rep. Jerrold Nadler (D-NY) and Sen. Herb Kohl (D-WI), provides for a nationwide artist resale royalty on somewhat similar terms as the CRRA.

The CRRA provides fine artists with a droit de suite, or resale royalty right, which gives fine artists a right to a percentage of the sales price of the artist's work each time the work is resold. The CRRA mandates that the seller of a work of fine art (or the seller's agent) pay to the artist a resale royalty in the amount of 5% of the gross sales price of the work of fine art. This royalty requirement applies to both sales of fine art by residents of California and sales of fine art that take place in California (Cal. Civ. Code §986[a], http://pages.citebite.com/b9k5b4kjkkx). The CRRA exempts sales of fine art for less than $1,000 from the resale royalty provisions.

The statute defines a work of "fine art" as "an original painting, sculpture, or drawing, or an original work of art in glass" (Cal. Civ. Code §986[c][2], http://pages.citebite.com/w9o5x6nqios). For the purpose of the CRRA, an "artist" is defined as "the person who creates the work of fine art and who, at the time of resale, is a citizen of the United States, or a resident of [California] who has resided in [California] for a minimum of two years."

Sotheby's and Christie's argued that the CRRA (1) violates the Commerce Clause of the United States Constitution, (2) effects a "taking" of private property in violation of the constitutions of the United States and of California, and (3) is preempted by the Copyright Act of 1976.

The court, in applying the two-tiered analysis of Nat'l Collegiate Athletic Ass'n v. Miller (10 F.3d 633 (9th Cir. 1993), http://scholar.google.com/scholar_case?case=3708408270532117994) (Miller), found that the CRRA violates the Commerce Clause per se. The test in Miller required the court to inquire as to whether the CRRA "(1) directly regulates interstate commerce; (2) discriminates against interstate commerce; or (3) favors in-state economic interests over out-of-state interests." (Miller, 10 F3d at 638). "If it does any of those things, 'it violates the Commerce Clause per se, and we must strike it down without further inquiry. Id." As the court found that the statute violates the Commerce Clause, it did not reach the defendants' "takings" or "preemption" arguments.

The court held that the CRRA violated the Commerce Clause because the CRRA explicitly regulated applicable sales of art occurring wholly outside of California. The example of the "problematic reach" that the court used was one in which a California resident places a painting by a New York artist up for auction at Sotheby's in New York, and at the auction a New York resident purchases the painting for $1,000,000. In such a situation, the transaction that the CRRA regulates - the one between the New York auction house and the New York purchaser - occurs wholly in New York. Despite the fact that even the artist receiving the royalty is a New York resident, the CRRA reaches out to New York and regulates the transaction by mandating that Sotheby's (1) withhold $50,000 (i.e., 5% of the auction sale price); (2) locate the artist; and (3) remit the $50,000 to the New York artist. Should Sotheby's in New York fail to comply, the New York artist may bring a legal action against the seller's agent in New York under the CRRA to recover the applicable royalty (Cal. Civ. Code §986[a][3], http://pages.citebite.com/t9f5p5crvcg).

The court declined to sever the offending clause (Cal. Civ. Code §986, http://pages.citebite.com/w9g5j7ioaol) to save the rest of the statute because, in its review of the statute's legislative history, the court found that the legislature intended for the statute to reach past commerce occurring within California. The initial draft of the statute applied only to "an original work of fine art sold at an auction or by a gallery or museum in California." The legislature then amended the bill to apply to sales of fine art where "the buyer or the seller resides in California or the sales takes place in California." The legislature then amended the bill again, deleting the reference to California buyers but continuing to require a resale royalty for sales outside of California where the seller resides in California. The court stated: "[T]he reason for the legislature's decision seems obvious: were the CRRA to apply only to sales occurring in California, the art market would surely have fled the state to avoid paying the 5% royalty."

Striking down the entire legislation is obviously a blow to fine artists and the decision will likely be appealed to the Ninth Circuit Court of Appeals. The plaintiffs' attorney, Eric George, was quoted in the Los Angeles Times as saying, "For a single federal judge to invalidate the law, more than 35 years later and without allowing any evidence to be taken, marks a departure from established constitutional law. We are confident, as both sides have always believed, this case will ultimately be resolved by the Ninth Circuit Court of Appeals, which already upheld this very statute in 1981." (http://www.latimes.com/entertainment/arts/culture/la-et-cm-california-art-resale-royalty-act-unconstitutional-20120521,0,705518.story)

Meanwhile, it remains to be seen whether the EVVA of 2011 will be enacted to provide fine artists with nationwide "continuing remunerative relationship between a visual artist and her creation." You can sign up to track the EVAA here: S 2000 (http://www.govtrack.us/congress/bills/112/s2000) / HR 3866 (http://www.govtrack.us/congress/bills/112/hr3688)

Some initial coverage of this case can be found here:
Jori Finkel, Artists sue two auction houses, Los Angeles Times (October 19, 2011) (http://articles.latimes.com/2011/oct/19/entertainment/la-et-auction-house-suit-20111019).

Quinn Heraty is principal of Heraty Law PLLC (http://heratylaw.com) and is admitted to practice in New York and California. Her practice focuses on professionals and small businesses in the entertainment, design, and fashion industries.

About May 2012

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in May 2012. They are listed from oldest to newest.

April 2012 is the previous archive.

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