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Week in Review

By Martha Nimmer

A World Without Commercials?

Late last week, the U.S. District Court for the Central District of California denied a request by News Corp.'s Fox Broadcasting unit to block Dish Network Corp.'s Hopper digital video recorder service and its AutoHop feature before a copyright infringement suit concerning those services can be decided. Dish's Hopper digital video recorder (DVR), introduced in March, records all major prime time television shows and then stores them for eight days after their first broadcast. The AutoHop service, a potential Godsend for people who do not enjoy watching TV commercials, allows viewers to skip all commercials recorded during the prime time broadcasts, without having to fast-forward manually through the commercials.

Although this initial ruling in the case of Fox Broadcasting v. Dish Network, 12-04529, U.S. District Court, Central District of California (Los Angeles) was filed under seal, both Dish and Fox issued separate responses to U.S. District Judge Dolly Gee's decision. Dish Network applauded the ruling, referring to it as "a victory for common sense and customer choice." Dish's general counsel also invoked the 1984 Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, decision, commenting that this recent ruling "underscores the U.S. Supreme Court's 'Betamax' decision, with the court confirming a consumer's right to enjoy television as they want, when they want." Fox, in stark contrast to the optimism evinced by Dish, lamented Judge Gee's ruling, stating, "we are disappointed the court erred in finding that Fox's damages were not suitable for a preliminary injunction." An attorney for Fox has confirmed Fox's intention to appeal the ruling.


Unnecessary Roughness?

Rashard Mendenhall is perhaps best known for being a Pittsburgh Steelers running back, and Charlie Sheen rose to fame in the 1980s as the star of movies such as Platoon, Wall Street and Major League. What could these two celebrities possibly have in common, other than their notoriety? Until recently, both men were endorsers for Hanesbrands, the parent company of Hanes and Champion sportswear. Mendenhall and Sheen are also no strangers to controversy. In March 2006, Sheen commented on a radio interview that "It seems to me like 19 amateurs with box-cutters taking over four commercial airliners and hitting 75 per cent of their targets feels like a conspiracy theory. It raises a lot of questions." Rashard Mendenhall also made controversial marks in regards to the death of Osama bin Laden. In 2011, Mendenhall tweeted "What kind of person celebrates death? It's amazing how people can HATE a man they have never even heard speak. We've only heard one side." It is this tweet that led Hanesbrands to terminate Mendenhall's contract to promote Champion sportswear. Hanesbrands alleges that this comment violated the morals clause contained in the company's endorsement deal with Mendenhall. Now, Mendenhall is suing Hanesbrands, claiming that the company breached his contract.

Morals clauses are common in the entertainment business; the vast majority of movie studios and companies that contract with actors, musicians, athletes and other notable figures retain some contractual protection that permits them to terminate the contract "upon controversy." Mendenhall's contract contained a typical morality clause that prohibited the running back from engaging in activities that would bring the company "into public disrepute, contempt, scandal or ridicule." The clause failed to specify, however, what Mendenhall was permitted--or prohibited--from saying on his personal Twitter account. It is this ambiguity that has led Mendenhall to argue that Hanesbrands "went outside" of its termination right, and acted arbitrarily and unreasonably in ending the sportswear endorsement deal with Mendenhall. To support the finding that the apparel company acted unreasonably and treated him unfairly, Mendenhall has sought documents from Hanesbrands showing how "the company has treated endorsers such as Mr. Sheen." Mendenhall's goal in making that discovery request is to prove that Hanesbrands treated him differently from other endorsers--such as Sheen--without good reason, despite the similarity between the two controversial remarks and the public's outcry to it. Mendenhall's suit is primed to determine just what celebrity endorses may say on Twitter, without running afoul of morality clauses, and to what extent companies may enforce such clauses differently among their endorsers.


Trouble in Tinseltown

Turning now to Tinseltown, the National Conference of Personal Managers, Inc. (NCOPM)--a Las Vegas-based trade association--has brought suit in federal court, seeking declaratory and injunctive relief that the Talent Agencies Act (TAA) of California violates the United States Constitution. Specifically, the NCOPM argues in National Conference of Personal Managers, Inc. v. Edmund G. Brown that the TAA runs afoul of Article 1, Sections 8 and 10, the 13th Amendment and the Due Process and Equal Protection Clauses of the 14th Amendment. Briefly stated, the TAA requires that any individual acting as a talent agent must be licensed by the State Labor Commissioner, and is subject to state oversight, including office inspections and records review. The essential purpose of the law is to protect artists from employers posing as employment counselors and making false promises about procuring work; the passage of the law in 1978 reflected a growing understanding in the California legislature of the mounting complexity involved in talent procurement and the entertainment business, particularly in the state of California. Despite these noble purposes, the TAA, some critics say, has been used by artists who want to avoid paying commissions to their managers.

Turning to the constitutional arguments proffered by the petitioner, the NCOPM disputes the "vague, uncertain and inconsistent provisions and enforcement of the TAA," stating that the law violates the substantive due process right to notice and a reasonable opportunity "to know what is required and what is prohibited . . . By Defendants under the TAA." Specifically, the plaintiff points to the fact that the "procure employment" language in the Act has never been defined by any court, and thus lends itself to uncertainty and ambiguity. Additionally, the plaintiff argues that the Act amounts to involuntary servitude, as it forces the plaintiff to forfeit his right to be paid for his labor, or face being convicted of a crime.

Although the TAA appears to have been well-intentioned, ambiguities in the law and almost 100 years of piecemeal interpretations of predecessors to the TAA have resulted in injustice and uncertainty on the part of talent managers in the entertainment industry.

Read the full complaint here: http://www.scribd.com/doc/113104861/Ncopm-Complaint-v-Aglc-of-CA#

Easter Comes Early for Cadbury

Now, to the other side of the pond. Earlier this week, the High Court of England and Wales dismissed an appeal by Swiss multinational Nestlé to prevent the registration of the color purple for use in connection with chocolate products. The case of Société Des Produits Nestlé S.A. v Cadbury UK Ltd [2012] EWHC 2637 sprang from the 2004 trademark application filed by Cadbury UK Limited (Cadbury) with the United Kingdom trademark registry. Although initially rejected by the registry, Cadbury was able to prove that the color purple--specifically, Pantone 2685C--had acquired distinctiveness through use. The trademark was registered on May 2008; three months later, Nestlé opposed the trademark application. The registry objected to Nestlé's opposition, and the Nestlé appeal to the High Court followed.

Nestlé's main objection to the registration focused on whether the mark, as applied for, was "a sign capable of being represented graphically." Nestlé argued in the negative, averring that the description of the trademark fell short of satisfying the criteria laid out in the case of Sieckmann (C-273/00). This case set out the parameters for when a mark can be said to be capable of being represented graphically; specifically, Sieckmann requires that the description of the mark be clear, precise, self-contained, easily accessible, intelligible and objective. The High Court judge disagreed with Nestlé, stating that the language of Cadbury's trademark registration was not impermissibly vague under the Sieckmann framework. In so stating, the court dismissed Nestlé's appeal.

This case should bring to mind for American attorneys the case of Qualitex Co. V. Jacobson Products Co., Inc., 514 U.S. 159 (1995). In Qualitex, a unanimous Supreme Court held that a color; here, greenish-gold, could fulfill the requirements for trademark registration under the Lanham Act, as long as the color had acquired secondary meaning.


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This page contains a single entry from the blog posted on November 16, 2012 10:07 AM.

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