« Weekly Issues in the News | Main | Message from the Chair »

Weekly Issues in the News

By Geisa Balla


The operator of Artist Arena, a celebrity fan website for music stars Justin Bieber, Rihanna, Demi Lovato and Selena Gomez, has agreed to settle Federal Trade Commission (FTC) charges that it violated the Children's Online Privacy Protection Act (COPPA) by improperly collecting personal information from children under 13 without their parents' consent. The settlement will impose a $1 million civil penalty on Civil Arena, bar future violations of COPPA, and require that Artist Arena delete information collected in violation of COPPA. "Marketers need to know that even a bad case of Bieber Fever doesn't excuse their legal obligation to get parental consent before collecting personal information from children," said FTC Chairman Jon Leibowitz. "The FTC is in the process of updating the COPPA Rule to ensure that it continues to protect kids growing up in the digital age."

According to the FTC, Artist Arena operated fan websites such as www.RihannaNow.com, www.DemiLovatoFanClub.net, www.BeiberFever.com, and www.SelenaGomez.com, where children were able to register to join fan clubs, create profiles and post on members' walls. Children also provided personal information to subscribe to fan newsletters. The FTC alleged that Artist Arena falsely claimed that it would not collect children's personal information without prior parental consent and that it would not activate a child's registration without parental consent.



MGM Distribution won an appellate decision over the distribution of the film Madison. The film was shot by Bill Bindley in 1999. Its financial backers sued MGM in 2009, claiming that the studio failed to properly distribute the film. According to the lawsuit, MGM released Madison in April 2005 with the help of $6.75 million in marketing funds provided by a production company called Madison LLC. The film flopped, grossing just $500,000. MGM released it in only 15 markets and on 93 screens. The film's investors lost tens of millions of dollars and brought suit against MGM, which defended on procedural grounds, arguing that the studio did not have enough contact with Illinois to be sued there. Two years later the court ruled that it was proper to exercise jurisdiction over MGM in Illinois. MGM appealed. The appellate court overturned the trial court on September 28th, holding that MGM should not have been sued in Illinois. "We find that MGM Distribution did not in fact have sufficient minimum contacts with Illinois to support the exercise of specific personal jurisdiction in this case," and remanded it back to the trial court.



Stan Lee Media, the company that controls the rights to several Marvel characters, including Spider Man and Iron Man, has filed suit in the U.S. District Court in Colorado against Walt Disney Co., seeking "billions of dollars of profits" over the rights to many characters. Stan Lee himself is no longer associated with the company. The company claims that Lee assigned to it his rights to the Marvel characters in 1998, but then assigned the same rights to Marvel Enterprises one month later. Disney acquired Marvel Enterprises in 2009 for $4.3 billion. "The Walt Disney Company has represented to the public that it, in fact, owns the copyright to these characters as well as hundreds of other characters created by Stan Lee," states the complaint. "Those representations made to the public by the Walt Disney Company are false." The lawsuit focuses on successful movies based on Marvel characters that Disney has released since the acquisition, such as The Avengers. Disney claims that the suit is without merit, and that "it arises out of the same core facts and legal claims that have been rejected by three federal district court judges."


Electronic Arts

U.S. District Judge Claudia Wilken ruled on October 10th that Electronic Arts (EA) can settle antitrust claims by paying $27 million and releasing exclusivity rights to league-branded football video games. In 2008, lead plaintiffs Geoffrey Pecover and Jeffrey Lawrence claimed that EA killed off competing football video games by partnering with the National Football League (NFL), the National Collegiate Athletic Association (NCAA), the Collegiate Licensing Co. (CLC) and the Arena Football League (AFL). According to the complaint, EA was free to hike up the prices of its own games and gouge customers by monopolizing the market for these games. EA denied the allegations as well as any wrongdoing, eventually filing the joint settlement on July 20, 2012. The agreement bars EA from renewing its exclusive NCAA and CLC football licenses for at least five years after they expire in 2014. EA must also refrain from obtaining exclusive rights to the AFL for five years. The settlement will not affect EA's exclusive licensing with the NFL, even though the "Madden NFL" video game was central to the original lawsuit. The $27 million settlement fund will be distributed to consumers who purchased "Madden NFL," "NCAA Football" or "American Football League" games that were published between Jan. 1, 2005, and June 21, 2012.


Elton John

On October 10, 2012, the UK High Court held that Elton John was not defamed in The Times article about a tax avoidance scheme. On June 21st, the British newspaper carried the headline "Screen Play: how movie millions are moved offshore," and mentioned Ingenious Media top executive Patrick McKenna, who was said to be Elton John's former accountant and one of two main providers of film investment schemes in the UK. The paper also included another article that referenced John in a report about the "world of glitz and glamour that's on the Revenue's radar." John's attorneys sent a letter to the publishers, and The Times ran a correction stating that McKenna had never been John's accountant and then printed a "clarification" that Ingenious Media had not been involved in tax avoidance activities. Despite the correction, John sued, saying "the allegations are particularly damaging to the claimant's reputation in the sphere of charity fundraising." UK High Court Justice Michael Tugendhat held that the publication was not defamatory. "The conclusion I have reached is that the words complained of are not capable of bearing the meaning attributed to them by the claimant or any other defamatory meaning."


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

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)


This page contains a single entry from the blog posted on October 12, 2012 10:37 AM.

The previous post in this blog was Weekly Issues in the News.

The next post in this blog is Message from the Chair.

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