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September 4, 2012

Friends Actress Lisa Kudrow's Former Manager Seeks To Reap The Fruits of His Labor

By Aleeshea Sanders

Howard Entertainment, Inc. et al., v. Lisa Kudrow et al.

On August 22nd the California Court of Appeal opened the door for the former manager of the well-known sitcom "Friends" actress, Lisa Kudrow a/k/a "Phoebe", to finally reap the fruits of his labor. In this ongoing legal battle for breach of contract between Kudrow and Scott Howard, the Second District California Court of Appeal sided with Howard, reversing the trial court's summary judgment for Kudrow, and ruling admissible Howard's proffered expert testimony relating to the customary practice in the entertainment industry with regard to post-termination commissions. (Howard Entertainment, Inc. et al. v. Lisa Kudrow et al., No. B234962, (Cal. Ct. App. 2nd Dist. August 22, 2012); see also http://www.courts.ca.gov/opinions/documents/B234962A.PDF.).

The dispute arose when, after a 16-year management relationship, Kudrow terminated Howard in early March 2007. She then refused to pay him commissions for work that he handled during the term of their agreement. In 1991, Howard and Kudrow had orally agreed that Howard would provide management services for Kudrow in return for ten percent commission on her income. In 2000 and 2004 respectively, the parties again made modifications to their verbal agreement, which included a reduction in Howard's commissions on certain earnings for "Friends", and then a reduction in Howard's commissions to five percent.

In 2008, Howard brought suit against Kudrow for breach of contract alleging that she failed to make more than $50,000 in continuing post-termination commission payments. Howard sought declaratory relief that he was entitled to receive commissions on all of Kudrow's continuing earnings for work done between 1991 and 1997.

Howard attempted to offer the expert testimony and declaration of Martin Bauer that it was customary for a personal manager to be paid post-termination commissions on work handled during the management term. Bauer stated, "[F]rom at least the early 1980s, it had been the custom and practice in the entertainment industry for a personal manager to be paid post-termination commissions on the services that their clients rendered, and on engagements that their clients entered into, when the personal manager was representing them." (Howard Entertainment, Inc. v. Lisa Kudrow, 2010 WL 3758592, (Cal. Ct. App. Sept. 28, 2010)).

However, Kudrow objected to the inclusion of Bauer's testimony, and the court granted summary judgment on the grounds that Bauer's opinion lacked foundation as it did not adequately reflect specified knowledge of the customary entertainment industry practices with regard to a manager's post-termination commissions at the time the parties entered into their agreement. Howard requested a continuance to address the deficiencies in Bauer's declaration. The trial court concluded that it did not have the discretion to grant Howard a continuance, so it granted Kudrow's motion and dismissed the case.

In the Court of Appeal's unpublished decision, it ruled that the trial court erred in concluding that it had no discretion to allow an opportunity to supplement the declaration, and that it abused its discretion in failing to grant a continuance to allow Howard to file a supplemental expert declaration with sufficient foundation. (See http://scholar.google.com/scholar_case?case=4321723798193235120&hl=en&as_sdt=2&as_vis=1&oi=scholarr.). The court stated, "If Bauer supplied the necessary foundation, arguably there would be a triable issue of fact as to whether the custom and usage was of such 'general and universal application that [Kudrow] may be conclusively presumed to know of the custom.'" (Howard Entertainment, Inc. v. Lisa Kudrow, 2010 WL 3758592, (Cal. Ct. App. Sept. 28, 2010) [quoting Miller v. Germain Seed & Plant Co. (1924) 193 Cal. 62, 69 (Miller)]).

The court stated that "custom and usage" in the entertainment industry may become part of the oral agreement between the parties to explain whether Howard was entitled to receive post-termination earnings, and it relied on long-standing precedent which states:

"'[A] reasonable usage may supply an omitted term or otherwise supplement an agreement." (Varni Bros., Corp. v. Wine World, Inc. (1995) 35 Cal. App. 4th 880, 889 [quoting 1 Witkin, Summary of California Law (8th ed. 1987) Contracts, § 696, p. 630]; see also Civ. Code § 1655.); and

"Custom and usage is considered 'in determining the intent of the parties, and are in effect a part of the contract unless the contract manifests a contrary intention.'" (Miller v. Germain Seed & Plant Co., supra, 193 Cal. at p. 77; accord Civ. Code § 1655.).

The court continued, "Evidence of custom and usage in the entertainment industry, even if Kudrow was unaware of that custom and usage, may therefore be relevant to explain or disclose an ambiguity in the agreement or provide by implication a missing term." (Miller v. Germain Seed & Plant Co., supra, 193 Cal. at p. 69 italics added.) "[A] party to a contract may be bound by a custom not inconsistent with the terms of the contract, even though he is ignorant of the custom, if that custom is of such general and universal application that he may be conclusively presumed to know of the custom." (Miller v. Germain Seed & Plant Co., supra, 193 Cal. at p. 69, italics added.).

The Court of Appeal concluded that Howard should have been granted a continuance, and it reversed the summary judgment.

On remand, the trial court accepted Bauer's supplemental declaration that detailed the basis for the expert's understanding about the relevant custom and practice, but again, it granted summary judgment for Kudrow, explaining that Bauer's knowledge provided an insufficient basis to admit his declaration because he did not include details of his personal experience in handling the exact type of transactions involving the exact custom and practice that he described.

Now, on Howard's second appeal, the Second District Court of Appeal once more reversed the trial court in a published opinion holding that, again, it improperly granted summary judgment in favor of Kudrow. The court explained, "An expert may rely upon experiences and conversations he or she has had and information he or she has obtained without the necessity of providing the specifics of such experiences and conversation." The court concluded that "there is no requirement that an expert set forth specific persons, conversations, or dates of such conversation for the formation of the opinion, as apparently required by the trial court." (Howard Entertainment, Inc. et al. v. Lisa Kudrow et al., No. B234962, (Cal. Ct. App. 2nd Dist. August 22, 2012)).

Thus, the trial court erred in requiring Bauer to provide names and dates to back up his opinion based on his experience that it is custom and practice to continue paying commissions to talent managers after a contract is terminated. The Court of Appeal reversed the summary judgment for Kudrow and ruled as admissible Bauer's expert testimony that it is customary practice to pay managers post-termination commission. (Howard Entertainment, Inc. et al. v. Lisa Kudrow et al., No. B234962, (Cal. Ct. App. 2nd Dist. August 22, 2012)).

However, despite a 16-year entertainment-industry marriage, and the laborious four-year-old legal separation and divorce that have come along with it, Kudrow's attorney stated that she is considering taking the legal dispute to the California Supreme Court. "The bottom line at this point in time is we are taking a look at possibly petitioning the California Supreme Court to look at the matter and at the same Ms. Kudrow is looking forward to having the matter decided in front of a jury if the matter proceeds to a trial court for a determination." (See http://abcnewsradioonline.com/entertainment-news/lisa-kudrow-may-take-legal-dispute-with-ex-manager-to-state.html).

September 7, 2012

Weekly Issues in the News

By Geisa Balla

E-Book Settlement

On September 6th, Judge Denise L. Cote of the Southern District of New York approved a settlement between the Justice Department (DOJ)and three major publishers in a civil antitrust case. The case stemmed from a policy that the publishers adopted in 2010 that effectively coordinated the price of many newly released e-books to $12.99 to $14.99. After striking a deal with Apple, the publishers renegotiated contracts with Amazon and other retailers, allowing the publishers, and not the retailers, to set prices on e-books. Publishers the Hachette Book Group, Simon & Schuster and HarperCollins denied wrongdoing, but agreed to settle with the DOJ in April. The Penguin Group USA, Macmillan and Apple declined to settle. They face trial next summer.

In her opinion, Judge Cote said that DOJ had claimed a "straightforward, horizontal price-fixing conspiracy." She rejected arguments against the settlement, saying they were "insufficient" to deny its approval and dismissed requests to hold an evidentiary hearing as an unnecessary delay. The settlement calls for the three settling publishers to end their contracts with Apple within one week. The publishers must also terminate contracts with e-book retailers that contain restrictions on the retailer's ability to set the price of an e-book. For the next two years, the settling publishers may not agree to contracts with e-book retailers that restrict the retailer's "discretion over e-book pricing." For five years, the publishers are not allowed to make contracts with retailers that include a most-favored nation clause. According to the opinion, "The time limits on these provisions suggest that they will not unduly dictate the ultimate contours of competition within the e-books industry as it develops over time."


Christian Louboutin

On September 5th, the Second U.S. Circuit Court of Appeals reversed a lower court's decision that a single color could not be trademarked in the fashion industry. French footwear designer Christian Louboutin sued rival Yves Saint Laurent (YSL) in April 2011 over Louboutin's signature use of lacquered red on shoe soles. In August 2011 Judge Victor Marrero of the Southern District of New York denied Louboutin's request for a preliminary injunction, seeking to prevent YSL from selling pumps with red soles. However, the Second Circuit's ruling held that Louboutin's long-standing use of the red sole was "a distinctive symbol that qualifies for trademark protection." The Court limited Louboutin's trademark to shoes where the sole stands out, in contrast to the rest of the pump. The finding would allow YSL to produce a monochrome red shoe with a red sole. David Bernstein, an attorney for YSL, called the opinion a victory for the label. "The Court has conclusively ruled that YSL's monochromatic red shoes do not infringe any trademark rights of Louboutin, which guarantees that YSL can continue to make monochromatic shoes in a wide variety of colors, including red." Louboutin also called the ruling a win, stating that thanks to this ruling, it "will be able to protect a life's work as the same is embodied in the red sole found on his women's luxury shoes." The decision was based on Qualitex Co. v. Jacobson Products CoQualitex left open the possibility of defending a single color trademark on the grounds that its use is uniquely associated with a brand.


Michael Jackson

A Canadian memorabilia dealer who worked with Michael Jackson's mother in a tribute book reached a $2.5 million copyright settlement on Tuesday with Jackson's estate. The executors of Jackson's estate filed a lawsuit against Howard Mann in January 2011. Mann used michaeljacksonsecretvault.com, MJgives.com and similar domain names to sell Jackson's music and memorabilia. Mann worked with Katherine Jackson on several projects, including a 2010 Never Can Say Goodbye coffee table book featuring recollections of her son, and a DVD and calendar. Mann claimed that he obtained the rights at a bankruptcy sale involving members of Jackson's family several years ago. However, the estate holds the copyright to Jackson's image and music for the benefit of Jackson's mother and his three children.

Mann was found liable in August 2012 for infringing on Jackson's intellectual property, and trial was due to start soon to determine damages. Howard Weitzman and Zia Modabber, the attorney's for Jackson's estate, said in a statement that the "settlement seems appropriate for all concerned".


Ben & Jerry's

Ice cream maker Ben & Jerry's has filed a trademark infringement lawsuit in the Southern District of New York against the maker of "Ben & Cherry's" X-rated DVD, claiming that the "hardcore pornographic" films have smeared its reputation. The suit arises from the distribution and sale of a series of DVDs containing ""exploitative, hardcore pornographic films" featuring titles and themes based on "well-known and iconic" Ben & Jerry's ice cream flavors as well as packaging that contains key company features such as a grazing cow, green grass and large white puffy clouds. The lawsuit by the Vermont-based company said the films would likely cause "confusion, mistake or deception" regarding the company's trademarks. It identified some of the X-rated names similar to its own as "Boston Cream Thigh," ''New York Fat & Chunky" and "Peanut Butter D-Cup." Ben & Jerry's has ice cream flavors titled: "Boston Cream Pie," ''New York Super Fudge Chunk" and "Peanut Butter Cup."


James Franco

Actor James Franco is being sued by his former New York University professor for defamation. Franco received a D in 2010 when he was enrolled in NYU's Tisch film school. When asked about the grade, Franco said he could not explain it, that he did all the work and did well in his other film classes. He said that his professor Jose Angel Santana "probably felt uncomfortable with a working well known actor in his class." Now Professor Santana is suing Franco for defamation. The lawsuit was filed on September 4, 2012 in New York Supreme Court, and seeks unspecified damages over Franco's "disparaging and inaccurate public statements." Santana claims Franco received a D in the class because he missed 12 out of the 14 classes. Franco admitted that he missed the classes because he was filming "127 Hours", but also said, "I didn't feel like I needed to waste my time with a bad teacher." Santana has already sued NYU, claiming he was fired in 2011 for giving Franco the D. He said the school "bent over backwards to create a Franco-friendly environment" and did "everything in its power to curry favor with James Franco."


Geisa Balla is an attorney practicing in New York, NY. She can be reached at geisa.balla@gmail.com.

September 14, 2012

Weekly Issues in the News

By Geisa Balla

Velvet Underground v. Warhol

Southern District of New York Judge Alison Nathan has dismissed part of The Velvet Underground's lawsuit against the Andy Warhol Foundation for the Visual Arts (Warhol Foundation). The Velvet Underground alleged that the Warhol Foundation violated its rights to an iconic banana image used in one of The Velvet Underground's albums. The image at issue is a large banana and stylized Andy Warhol signature. The image was used in the band's first album "The Velvet Underground & Nico." The Velvet Underground had collaborated with Warhol on the design and cover art for the album. In January 2012, the Velvet Underground filed suit against the Warhol Foundation after reading about the latter's plans to license the banana image for cases, sleeves and bags for Apple's iPhone and iPad. Judge Nathan rejected Velvet Underground's claim that the Warhol Foundation had no copyright claim to the banana image. "Because the Warhol Foundation has broadly covenanted not to sue Velvet Underground," Nathan wrote, "there is no underlying cause of action sounding in copyright for Velvet Underground to head off." The copyright claim was dismissed without prejudice. The trademark claims of the lawsuit remains active.


Michael Jackson

Michael Jackson's former music promoter AEG Live is withdrawing its $17.5 million insurance claim in the 2009 death of the pop star. AEG had filed a claim against Lloyd's of London, seeking insurance payment for the losses incurred in up-front costs for Jackson's "This is It" shows that were to start in London in July 2009. Lloyd's later filed a lawsuit against AEG, seeking a declaration that the insurance company did not owe the money. Marvin Putnam, an attorney for AEG, said the company no longer needed the $17.5 million because it was reimbursed by Jackson's Estate. Attorneys involved told the judge that they expected AEG to be dropped from the case, though that has not yet officially occurred. Recently, leaked emails have shown that AEG executives were concerned about Jackson's stability prior to his tour. Attorneys on the case deny that AEG's decision was related to these released emails.


Tianna Madison

The parents of Olympic sprinter Tianna Madison have filed a defamation lawsuit against their daughter. Madison won a gold medal in the 4x100 meter relay this summer. Madison's parents, Robert and Jo Ann Madison, claim that their daughter's husband, John Bartoletta, told them on March 17, 2012 that "Tianna Madison would be filing a lawsuit against Robert Madison and Jo Ann Madison for misappropriation of funds and fraud based on her power of attorney and that he had hired a bodyguard to protect Tianna Madison." The parents claim that they were shocked by these allegations, and that they have not been sued or served with such a lawsuit. The parents also state that their daughter sent them an email on July 21, 2012 containing an article that she had written, which, as Tianna stated in her email, had been sent to multiple news agencies. In this article Tianna "falsely and defamatorily asserted" that her parents had "engaged in fraudulent behavior directed toward her and her finances, misused and/or otherwise misappropriated finances belonging to her." The article was supposedly sent to the Cleveland Plain Dealer. The parents met with a reporter from the newspaper, who said that he had received the article but refused to publish it because it contained potentially libelous content. The parents claim that Tianna contacted them again in August, saying that she would break the story after the Olympics. The complaint states that "on August 12, 2012, Tampa Bay Online published an article about defendant Tianna Madison and her Olympic success. The article specifically mentioned that defendant Tianna Madison endured financial hardship and asserted that she was molested as a child." The parents claim that their daughter spread false allegations all over their hometown. They seek punitive damages for defamation.


ABC News

South Dakota meat processor, Beef Products Inc., sued ABC News for defamation on September 13th, over ABC's reports of pink slime produced by Beef Products. ABC aired reports about Beef Products Inc., the nation's largest producer of "lean finely textured beef", in March and April 2012. The company now claims that ABC falsely told viewers that its product was not safe, not healthy, and was not even meat, resulting in the 31-year-old company's loss of hundreds of millions of dollars in profit and roughly half of its employees. In addition to ABC, the company also sued six individuals: news anchor Diane Sawyer, reporters Jim Avila and David Kerley, Gerald Zirnstein, a former U.S. Department of Agriculture microbiologist credited with coining the term "pink slime," former USDA employee Carl Custer and former Beef Products employee Kit Foshee. At a press briefing, Beef Products' lawyer stated that ABC conducted a "sustained and vicious disinformation campaign," and that "to call a food product slime is the most pejorative term that could be imagined. ABC's constant repetition of it, night after night after night, had a huge impact on the consuming public." The suit seeks $1.2 in damages. "The lawsuit is without merit," Jeffrey Schneider, senior vice president of ABC News, a unit of Walt Disney Co, said in a statement. "We will contest it vigorously."


New York Fashion Week

A New York publicist has sued a French magazine editor and her mother for $1 million after a fight over front-row seats at a Zac Posen show. Lynn Tesoro filed the lawsuit on Wednesday against Jalouse editor Jennifer Eymere and Marie-Jose Susskind-Jalou in Manhattan state Supreme Court. It claims "assault, battery, intentional infliction of emotional distress, slander and/or libel." The complaint does not explain the circumstances of the alleged assault, but only states that it took place at Avery Fisher Hall on Sunday. Women's Wear Daily, however, reported that the incident occurred at the Posen show after city fire marshals removed 60 seats. Eymere began arguing with Tesoro, whose firm was in charge of promoting the Posen show, because her mother no longer had a seat. The confrontation escalated, with Susskind-Jalou, Eymere and Eymere's sister engaging in a screaming match with Tesoro. Tesoro was then allegedly slapped in the face. Eyemere told Women's Wear Daily that it was a small slap, and that "it was not strong. I didn't hurt her, it was just to humiliate her. She humiliated my mom, and I humiliated her in front of her crew. Voilà. I just said at the end, 'Now you know you don't fuck with French people. The lawsuit also named Eymere's sister, Vanessa Bellugeon, as a defendant.


Geisa Balla is an attorney practicing in New York, NY. She can be reached at geisa.balla@gmail.com.

September 18, 2012

Proposed New Laws in New York State for Child Performers- Catching up with Reality

By Diane Krausz

On September 5th, the New York State Register contained a proposed rule from the Department of Labor concerning 12NYCRR Part 186 (Part 186), entitled "Child Performers." The Members of the EASL Executive Board have been asked to provide comments to the current draft of the regulations and intends to do so by the second week in October. Any comments or questions concerning this article or the regulations may be sent to DKrausz@DianeKrausz.com.

The proposed rule establishes, consolidates, clarifies, and (in some instances) updates all regulations and requirements regarding child performers within New York State. It also, for the first time, includes and defines what is a "reality show", filling in necessary protections for minors in this popular programming genre, especially outside of Hollywood. When Part 186 becomes law, it will be the "go-to" section for producers, agents, parents, and anyone seeking comprehensive and detailed information concerning the New York State requirements for a child performer's employment. As with any new law, many issues and questions remain to be resolved, but its eventual passage will be a solid and important step forward in assisting industry professionals (including the parents of professional minors) in protecting the dual goals of income retention and safe, healthy, and appropriate working conditions for underage entertainers.

1. What the Law Does: The promulgation of this law will supplement, update, and clarify existing laws that currently deal with the area of minority, New York State, and the entertainment industry:

(a) Section 35.01 of the Arts and Cultural Affairs Law discusses the ability and circumstances of a minor in the entertainment industry to legally be bound to an agreement with an employer;

(b) Labor Law Article 4-A, including Section 151, discusses the requirement that 15 percent of all of a child performer's earnings (regardless of a New York State or Surrogate's court approval of any particular contract) be put into a so-called "Coogan" account;

(c) Estates Powers and Trust Law Article 7, Part 7, discusses the details of "Coogan" accounts as trust instruments;

(d) Education Law Article 65, Part 1, sets forth for a child the specific requirements for schooling and tutoring; e.g., such as when an appropriate teacher is to be provided; and,

(e) Section 154-a, Article 4-A of the Labor Law, which is proposed to be inserted and deals with specific regulations stating the work conditions and hours required to "safeguard the health, education, morals, and general welfare of child performers."

2. The law initially outlines its main core requirements, which are:

A. Requirements for a Parent/Guardian of a Child Performer:
(i) A Child Performer Permit, which must be obtained by a parent or legal guardian before the child may engage in services; and

(ii) A Child Performer Trust Account, which must be established by the parent or legal guardian for the child's benefit.

B. Requirements for an Employer of a Child Performer:

(i) An Employer Certificate of Eligibility, which must be obtained by an employer before the use of the child's services;

(ii) A Notice of Use of Child Performer to the Department of Labor, before each production event by employer; and

(iii) Minimum Standards for education, hours of work, as well as health and safety requirements for the child during employment.

3. The proposed Section 186 is divided into 10 subparts, which predictably begins as Purposes, scope, and exemptions (186-1); thereafter, Definitions (186-2), Responsibilities of Parents and Guardians (186-3), Responsibilities of employers (186-4); Educational Requirements (186-5); Hours and Conditions of Work (186-6); Records; Contracts (186-7); Variances (186-8); Suspension or revocation of permits and certificates (186-9); and Penalties and Appeals (186-10).

4. Some facts of which to be aware in the current draft of the regulations are:

• The law applies to all child performers (under the age of 18) who either reside or work in New York State AND the entities employing them.

• Any child performer below 16 years of age is to be accompanied throughout the work day by a "responsible person" (186-2(t)), parent, or guardian. In film, television, and other non-live type work, the responsible person is either the parent, guardian or someone named by the parent or guardian. In live theater or performances, the employer may name the person responsible if parental accompaniment is not possible.

• The law applies to live performances and film, television, and Internet/social media; however, the actual requirements for an employer producing a live performance (as opposed to any other types of performances) differ, particularly in the amount, and type of supervision ("parental vs. responsible person"), and the specific hours and days of work.

• The cost for an employer for an initial three-year Certificate of Eligibility is $350, except for theaters with fewer than 500 seats, renewals of the Certificate and "Employment Certificates of Group Eligibility" (the hiring of a number of children as a group for a certain project for not more than two days of work) which each cost $200.

• In addition to this cost, an employer will incur significant reporting, recordkeeping (required to keep all records for six years), and other compliance requirements (trust account documentation, on-site tutoring). The employer will be responsible in each instance for collecting a copy of the Child Performer Permit from the parent or guardian.

• There is no cost for obtaining a child performer's permit, with the exception of the obtaining a statement of fitness for the minor. This is a new requirement for a certification by a physician, nurse practitioner, or physician's assistant that the child performer has been examined within 12 months of the date of application or renewal and is physically fit to work.

• There is a regulation for obtaining a temporary child's permit (valid for a first time applicant for 15 days), as well as for an annual renewal (12 month) of a regular Child Performer Permit.

• The proposed regulations require employers, at their costs, to provide for the education of child performers from certified or credentialed teachers when children's schedules conflicts with school commitments or schedules. A sex offender check of each proposed teacher must be made prior to hiring.

• For infants between the ages of 15 days (NYS does not allow an infant younger than 15 days to perform; see 186-6.2) and six weeks, the proposed regulations require employers to provide a nurse with pediatric practice experience to be present at the location.

• There are specific activities and performances that are exempt from the requirement of obtaining an employer certificate or a child's permit, or both. For example, when a child performer's performance is part of the activities of a school (whether academic or artistic), or broadcast from a school, or under the supervision of a department of education, or as part of a recognized course of academic study to receive credit, it is most likely exempt from the requirements of Rule 186 - unless the program in which the child is participating is a "reality show."

• In 186-1(s), "reality show" is defined as the "visual and/or audio recording or live transmission, by any means or process now known or hereafter devised, of a child appearing as himself or herself, in motion pictures, television, visual, data, and/or sound recordings, on the Internet , or otherwise," and, shall not include the recording or live transmittal of non-fictional athletic events academic events, "such as, but not limited to, spelling bees and science fairs" and interviews in newscasts or talk shows.

• An Employer who feels that he or she would "incur significant hardship" in complying with some or all of the regulations is able to apply for a variance (in conformity with 186-8).

• The Commission may suspend or revoke an Employer's Certificate of Eligibility for good cause or if an Employer has failed to provide inaccurate or false information on an Eligibility application, or has committed a violation that may be "hazardous or detrimental to the physical or mental health, morals, education," or general welfare of a child performer, or has not obtained a parent's permission for a child on a Group Eligibility form, or has not made the required deposit into a child's trust account, or has caused a minor to engage in or be scheduled to engage in an activity that "may be hazardous or detrimental the physical or mental health, education, morals, or general welfare of a child performer."

• In addition to revocation or suspension of an Employer's Certificate of Eligibility, civil penalties may be assessed against the Employer for violation of any provision of the part of the regulations. The penalty is currently limited to $1,000 for the first violation, $2,000 for the second violation, and $3,000 for the third violation. Each violation shall constitute a separate offense. Any final order issued by the Commissioner of Labor is subject to review by the Industrial Board of Appeals (pursuant to Labor Law Section 101), prior to any appeal to a regular State court.

September 21, 2012

Kernel Records Oy v. Timothy Z. Mosley p/k/a Timbaland, et al.

By Barry Werbin

A very interesting and detailed case addressing what constitutes a published "US work" in the context of global online publishing and distribution, is Kernel Records Oy v. Timothy Z. Mosley p/k/a Timbaland, et al. (11th Cir. Sept. 14, 2012). The plaintiff, a Finnish record company, had purchased rights to a musical computer arrangement called Acidjazzed Evening, which was first published by the original author allegedly in Australia in August 2002 as a "disk magazine" called Vandalism News, and later by a Swedish website, which had uploaded it. The defendants (including UMG, EMI and other music publishers) created, distributed and marketed an allegedly infringing (sampled) song called Do It. Kernel failed to apply for U.S. copyright registration, but alleged that because the work was first published outside the U.S., no U.S. registration was required as a prerequisite to sue. Mosley argued, however, that by making Acidjazzed Evening available for download from an "Internet site," the work was simultaneously "published" in every country of the world having Internet service and, thus, the work was subject to the U.S. registration requirement. The Florida District Court agreed and dismissed the case on a summary judgment motion based on its view that the Copyright Act dictates that a work simultaneously published in every country of the world should be treated as a "United States work" under Section 411 of the Act, and therefore is subject to the Copyright Act's registration requirement.

The 11th Circuit affirmed on alternative grounds under Section 411 of the Act but rejected the District Court's analysis and basis for the summary judgment grant, stating: "The district court...confounded 'the Internet' and 'online' with 'World Wide Web' and 'website.' Because of the strict temporal and geographic requirements contained in the statutory definition of 'United States work,' conflating these terms had a profound impact on the district court's evidentiary analysis. By confounding 'Internet' with 'website,' the district court erroneously assumed that all 'Internet publication' must occur on the 'World Wide Web' or a 'website.' The district court then erroneously assumed all 'Internet publication' results in simultaneous, worldwide distribution. [A] proper separation of the terms yields a very different analysis." The Court ultimately held that Mosley failed to meet his factual burden in establishing the exact nature of the online posting of the song and its intended scope of distribution to support summary judgment in defendants' favor. The Court noted that "proof of distribution or an offer to distribute, alone, is insufficient to prove publication. Central to the determination of publication is the method, extent, and purpose of distribution" and in the context of whether a work was first published abroad, also relevant is the "timing and geographic extent of the first publication."

However the Court ruled alternately that, based on discovery in the case, summary judgment was still warranted because "[t]he record reveals a lack of sufficiently probative evidence to determine that Acidjazzed Evening is a foreign work" because there was no evidence that the Australian "disk magazine" site was ever made "publicly accessible." The Court concluded that there was only "simple speculation that Acidjazzed Evening "was published on the Internet [in Vandalism News] in August 2002. A reasonable fact-finder could not find that a simultaneous, worldwide publication occurred in August 2002. Because the record lacks sufficiently probative evidence of simultaneous worldwide publication, we need not determine what effect simultaneous worldwide publication would have under 17 U.S.C. §101's definition of a United States work." As Kernel Records bore the burden of proving compliance with statutory formalities, the Circuit affirmed summary judgment on this alternative ground.

Therefore the core issue remains of what constitutes a "U.S. work" for first publication purposes in the context of online/Web/Internet uploading first done outside the U.S.

September 24, 2012

Weekly Issues in the News

By Geisa Balla


Three consumers filed a lawsuit in the southern District of New York against Maybelline over its Super Stay 14HR Lipstick and Super Stay 10HR Stain Gloss. The lawsuit was filed on September 21, 2012 by Carol Leebove, Wanda Santa and Denise Santiago. It alleges that L'Oreal falsely advertised the staying powers of its lip products, which sell for about $9.00 each. The lawsuit claims that despite Maybelline's claims, the lip products fade away after only a few hours. The plaintiffs state that Maybelline misled consumers by claiming that the lip gloss "stays vibrant and shiny, yet transparent, and won't fade" for 10 hours, and that the lipstick has "super staying power." The lawsuit alleges breach of warranty and violations of state consumer protection laws. It seeks class-action status, compensatory and triple damages, and other relief.



Zynga Inc. filed a counterclaim against Electronic Arts Inc. ("EA"), claiming that EA's lawsuit against Zynga filed last month violated an agreement between the parties over how Zynga can hire EA's employees. Last month, EA filed a lawsuit against Zynga, claiming that Zynga obtained private information about EA's "The Sims Social" game after hiring three of EA's top employees and releasing its own game "The Ville." In its counterclaim, Zynga said that it had reached a deal with EA in 2011 with lawful restrictions on how Zynga solicited EA employees, and in exchange, EA released Zynga from legal claims surrounding its hiring practices.

Zynga now claims that EA breached this agreement by filing its complaint. Zynga states that an EA lawyer told Zynga that EA Chief Executive John Riccitiello was adamant about obtaining a no-hire agreement that would shut down Zynga's ability to hire EA employees. Zynga's filing acknowledged the signing of a non-monetary settlement agreement with EA in September 2011 in an effort to head off litigation. That deal included "lawful, appropriate and extremely narrow non-solicit restrictions" in the context of a non-monetary settlement agreement. In its filing, Zynga said that EA "undertook an anti-competitive and unlawful scheme to stop Zynga from hiring its employees." Its general counsel, Reggie Davis, also said in a statement that EA's copying claims have no merit.


Sister Act

A nun has filed a $1 billion lawsuit against The Walt Disney Company and Touchstone Pictures over the 1992 film "Sister Act." Queen Mother Dr. Delois Blakely of the Franciscan Handmaids of Mary Convent in Harlem filed the lawsuit last week in New York Supreme Court. The lawsuit alleges that "Sister Act" and its 1993 sequel, as well as the musical adaptation, used "plaintiff's actual life experiences without her permission or authorization, thereby irreparably damaging her by depriving her of the windfall of financial gain reaped by defendants." "The subplots actualized in the said motion picture 'Sister Act' and portrayed by Whoopi Goldberg are her real life experiences," the suit adds.


Dan Hamilton

The family of Dan Hamilton, the writer of the 1970s hit "Falling in Love" has won a significant jury verdict against Henry Marx, a music producer accused of failing to pay hundreds of thousands of dollars in revenue. Dan Hamilton was a member of Hamilton, Joe Frank & Reynolds, whose "Fallin' in Love" reached No. 1 on the Billboard Hot 100 in 1975. "Fallin' in Love" had been co-published by Spitfire Music, a company controlled by Hamilton's then-manager Joel Cohen. Marx and his Music Force music publishing company later acquired the Hamilton catalog in the mid-'80s. Hamilton had previously been married to Ann Wallace, who was credited as a co-writer of "Fallin' in Love." After Hamilton's death, Wallace sued his estate for back child support. A settlement was reached in 1998 that allowed Marx to collect 100 percent of revenue from the Hamilton catalog and designated that Marx had acquired the publishing interest of Spitfire. However, Spitfire continued to own a share of the publishing revenue. Fredricka Hamilton, Hamilton's widow and her stepdaughter sued and settled, obtaining rights to pursue Max for underpayment of revenue. The lawsuit against Marx sought money Marx allegedly withheld from royalty payments, as well as money that Marx should have collected had he truly collected 100 percent of the revenue. After a six-day trial, the jury unanimously agreed that Marx had committed fraud and breach of contract. Plaintiffs were awarded $562,317. Additionally, the jury found that punitive damages were warranted. Arguments over what the final award should be will be held on September 26, 2012.


Geisa Balla is an attorney practicing in New York, NY. She can be reached at geisa.balla@gmail.com.

Effective Representation in a Mediation

Space is Limited

Effective Representation in a Mediation
Wednesday, October 3, 2012
Registration & Lunch: 12:00PM-12:30PM
Program: 12:35 - 2:00PM

Andrews Kurth LLP
450 Lexington Ave (Corner of 45th Street)
15th Floor
New York, NY 10017

Sponsored by the Alternative Dispute Resolution Committee of the Entertainment Arts & Sports Law Section of the New York State Bar Association

Alternative Dispute Resolution Committee Chair: Judith B. Prowda, Esq.

Speaker: Simeon H. Baum, Esq.

Simeon H. Baum, Esq. is President of Resolve Mediation Services, Inc. (www.mediators.com). Mr. Baum has mediated over 1,000 disputes, including the Studio Daniel Libeskind-Silverstein Properties dispute over architectural fees relating to the redevelopment of the World Trade Center site and Trump's $ 1 billion suit over the West Side Hudson River development. Since 2005 he has annually been selected for New York Magazine's "Best Lawyers" and "New York Super Lawyers" listings for ADR, and was chosen Best Lawyers' Lawyer of the Year for ADR in New York for 2011. He teaches Negotiation Theory & Skills at Benjamin N. Cardozo School of Law, and is a frequent speaker and trainer on ADR.

In this interactive program, our guest speaker, Simeon H. Baum, Esq., the founding Chair of NYSBA's Dispute Resolution Section and an experienced mediator, will guide us though the steps in a mediation. How can we, as lawyers, represent our clients effectively in a mediation? What do we need to understand about the nature and potential of the mediation process in order to make the most out of this opportunity?

1.5 MCLE Credit in Professional Practice & Skills is Pending Approval

Register Today: www.nysba.org/EASLADRProgram

For More Information: bgould@nysba.org

September 28, 2012

Pearls of Wisdom for the FTC? - The FTC is Seeking Comments on its Jewelry Guides

By Sarah Robertson (Robertson.Sarah@dorsey.com), Fara Sunderji (sunderji.fara@dorsey.com), and Susan Progoff (progoff.susan@dorsey.com)

The Federal Trade Commission (FTC) is currently seeking comments to its Jewelry Guides. The Guides help businesses avoid deceptive claims and unfair trade practices for precious metals, pewter, diamonds, gemstones, and pearl products. The current version of the Guides, see http://www.ftc.gov/bcp/guides/jewel-gd.shtm, was last comprehensively reviewed in 1996, but four amendments have been made since then. This time around, the FTC is welcoming comments on any related topics, but it is specifically soliciting thoughts on the following issues: (1) the marketing of lead-glass-filled composite stones (e.g., "composite" rubies); (2) use of the word "cultured" in marketing laboratory-created diamonds and gemstones; (3) disclosures relating to freshwater pearls and treatments to pearl products; and (4) content descriptions of alloys and alloy products containing precious metals in amounts less than the minimum thresholds currently reflected in the Guides.

Comments can be submitted at https://ftcpublic.commentworks.com/ftc/jewelryguidesreview/. The comment period closes on September 28, 2012.

For information about EASL's Fashion Law Committee, contact Co-Chairs David Faux (davefaux@dhf-law.net) and/or Lisa Willis (lmw@cll.com).

Senator Schumer Reintroducing the Copyright Design Protection Legislation

By Sarah Robertson (Robertson.Sarah@dorsey.com), Fara Sunderji (sunderji.fara@dorsey.com), and Susan Progoff (progoff.susan@dorsey.com)

Senator Charles Schumer (D., N.Y.) introduced a modified version of the controversial Design Piracy Bill into the Senate on Monday, September 10, 2012. The Senate Judiciary Committee has now favorably reported the bill to the Senate. A copy of the bill as revised, S. 3523, the "Innovative Design Protection Act of 2012," can be found here. http://www.opencongress.org/bill/112-s3523/show. With Congress only expected to be in Session for a few more weeks prior to the election, it is unclear what progress the reintroduced Bill will make.

For information about EASL's Fashion Law Committee, contact Co-Chairs David Faux (davefaux@dhf-law.net) and/or Lisa Willis (lmw@cll.com).

NFL Referees Get Standing Ovation for Ending Labor Dispute with NFL

By Jennifer N. Graham, Esq.

NFL referees received a standing ovation in Baltimore as they returned to the field for the Baltimore Cleveland matchup on Thursday after the NFL and the NFL Referees Association (NFLRA), the union that represents on field officials, agreed to the terms of a new eight-year collective bargaining agreement late Wednesday.

The three-month lockout wreaked havoc on the League, as inexperienced officiating led to numerous controversial calls and arguable victories during the first three weeks of season play. Several coaches, including New England coach Bill Belichick, were fined for interactions with the replacement officials after disputed calls.

Peter Donatello and Scot Beckenbaugh of the Federal Mediation and Conciliation Service aided the parties in reaching the agreement. It is the longest agreement with game officials in NFL history.

NFLRA membership must ratify the document. The officials will meet Friday and Saturday to vote on the agreement.

Highlights of the agreement include:

• Eight year term--2012-2019 seasons.

• The current defined pension plan will remain in effect for current officials through the 2016 season (or until the official earns 20 years of service). The defined benefit plan will then be frozen.

• Retirement benefits will be provided for new hires, and for all officials beginning in 2017, through a defined contribution arrangement.

• Increase in officials' compensation from an average of $149,000 a year in 2011 to $173,000 in 2013, rising to $205,000 by 2019.

• Beginning with the 2013 season, the NFL will have the option of hiring some officials on a full-time basis to work year-round, including on the field.

Complete details of the agreement are available at: http://www.nfl.com/news/story/0ap1000000066739/article/nfl-nflra-reach-eightyear-agreement

September 30, 2012

Weekly Issues in the News

By Geisa Balla

Toys R Us

Fuhi Inc., the maker of Nabi tablet computers for children, filed a lawsuit against Toys R Us on September 24, 2012. The suit alleges that Toys R Us stole trade secrets in preparing to introduce the rival Tabeo tablet this month. It states that Toys R Us agreed in October 2011 to become the exclusive Navi distributor, but in the end did "virtually no promotion" and only ordered for the holiday season a little more than what Toys R Us said could be sold in one day. Fuhu contends that Toys R Us agreed to become the exclusive seller of the Nabi to learn the product secrets before bringing Tabeo to market. The parties ended their exclusive agreement in January. "Toys R Us used Fuhu's trade secrets and confidential information to start selling Tabeo, which systematically attempts to replicate the Nabi experience, far earlier than Toys R Us could have done otherwise, if at all," the lawsuit said. Fuhu accused Toys R Us of fraud, breach of contract, unfair competition and trade secret misappropriation. Fuhu also said that Toys R Us copied Nabi's butterfly-shaped bumper, which is used to help protect the tablet, for Tabeo. The lawsuit seeks to stop Toys R Us from selling Tabeo ahead of the holiday season. Fuhi is also asking that any Tabeos be turned over to Fuhu and is seeking unspecified monetary damages.


Kanye West

Record label TufAmerica filed a lawsuit in the Southern District of New York against Kanye West for copyright infringement on West's latest album "My Beautiful Dark Twisted Fantasy." TufAmerica claims that two tracks on West's album include a bit from "Hook and Sling, Part 1" by New Orleans singer-pianist Eddie Bo. TufAmerica says that it bought the rights to the single more than 15 years ago. The sample appears in West's "Who Will Survive in America" and "Lost in the World." In its complaint TufAmerica alleges that West's label Roc-A-Fella and parent Universal Music Group paid a license fee of $62,000 but "failed and refused to enter into a written license agreements that accounted for their multiple other uses of [Hook and Sling]." TufAmerica is seeking undisclosed damages for copyright infringement.


The Innocence of Muslims

Cindy Lee Garcia, an actress appearing in "The Innocence of Muslims", has filed a lawsuit against YouTube, its parent company Google Inc., and Nakoula Basseley Nakoula, the filmmaker behind the film. Garcia claims that she was duped into appearing in the film, which incited violent protests across the Middle East. Last week, a Los Angeles Superior Court denied Garcia's request for a temporary restraining order that would have required YouTube to stop posting the video, finding that the actress was unlikely to prevail on the merits of her case. In this lawsuit Garcia has brought claims of fraud, libel and unfair business practices against the filmmaker. "The Innocence of Muslims" depicted the Prophet Mohammad as a fool and a sexual deviant. Google has refused to remove the film from YouTube, though the company has blocked the film in Egypt, Libya and other Muslim countries. Garcia claims that Google is infringing on the copyright she holds to her performance in the film by distributing the video without her approval on YouTube. According to Garcia, Nakoula operated under the assumed name of Sam Bacile, misleading her and other actors into appearing in a film they believed was an adventure drama called "Desert Warrior." After the fact, however, she learned that some of her lines spoken in the production had been dubbed over. The alteration made it look like Garcia "voluntarily performed in a hateful, anti-Islamic production", the lawsuit says, adding that she has "been subjected to credible death threats and is in fear for her life and the life and safety of anyone associated with her."


Ditocco v. Riordan

Plaintiffs, the authors and copyright owners of two books, The Hero Perseus and Atlas' Revenge, brought a copyright infringement lawsuit against, the author of the five-book series "Percy Jackson & The Olympians," the distributor of the books and the companies that produced and distributed the film "Percy Jackson & the Olympians: The Lightening Thief." The district court granted the defendants' motion to dismiss, finding that there was no substantial similarity between the protected elements of the plaintiff's books and the Percy Jackson books and movie. The plaintiff appealed, and the Second Circuit affirmed the "well-reasoned opinion of the district court." The court explained that both sets of works incorporate characters and classic stories from Green mythology, which are in the public domain and are therefore unprotectable. Leaving these unprotectable elements aside, and comparing the protectable elements of the works, the court concluded that "the district court determined that the two sets of books are not substantially similar as a matter of law." In the plaintiffs' novels, the protagonist PJ Allen is a popular and athletic young man who in his dreams travels to ancient Greece, where he fights mythical beasts and re-creates events in Greek mythology that have been erased from history. The "Percy Jackson & The Olympians" series tells the stories of demigod Percy Jackson and his battles against classical Greek monsters while traveling all over the country with his supernatural friends. The court noted that in these works, the Olympic gods live among the mortals in the modern world, wearing sunglasses, using cell phones and ignoring their demigod offspring.



The Vogue publishing companies Advance Magazine Publishers Inc. New York and Les Publications Condé Nast SA Paris filed a civil lawsuit with the Swiss courts over the activities of a Swiss company that manufactured and sold watches bearing the logo with the words "VOGUE My Style," where "My Style" were printed in very small letters. The Swiss Federal Tribunal issued a judgment, affirming that both "VOGUE" is a well-known trademark and that the lower court had correctly decided that the watchmaker is prohibited to use the term VOGUE for any kind of product likely to create a risk of confusion with the distinctive VOGUE. Importantly, the Federal Tribunal reasoning expanded beyond the lower court's reasoning by holding that the prohibition was not based only on unfair competition, but also on trademark law.


Geisa Balla is an attorney practicing in New York, NY. She can be reached at geisa.balla@gmail.com.

About September 2012

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

August 2012 is the previous archive.

October 2012 is the next archive.

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