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Week in Review

By Martha Nimmer

V for Victor

It turns out that you can stop the music, at least if you're Victor Willis.

Willis, singer and former member of the Village People, has proven victorious in a six year-long legal battle to reclaim his rights to more than 30 of the musical group's hit songs. The singer and songwriter, who dressed as a police officer in the band, left the Village People in 1979, and transferred his rights to 33 tracks, including "Y.M.C.A." and "In the Navy," to his publisher. After "experiencing a change of heart" and seeking to recover his rights in the musical works, Willis invoked Section 203 of the Copyright Act, the termination of transfers and licenses granted by the author provision. Section 203 grants musicians and songwriters "termination rights," which allow the musicians or songwriters to regain control of their works after 35 years have lapsed since their transfer; this provision applies even if the musician/songwriter is the party who originally transferred his/her rights in the musical composition! The purpose behind this part of the Copyright Act, added in 1976, was to protect composers and other musicians who had relinquished their rights in their creative works before becoming aware of the works' commercial success.

It is on this provision of the Copyright Act that the former Village People member relied when he filed suit to regain control of his ownership rights in the 33 musical works. Willis then "became locked in a bitter fight with the bosses behind the Village People's catalogue," but last year prevailed when a judge granted his "motion to dismiss the publishers' claims against his proceedings, allowing the termination to go forward." Now, more than three decades after he wrote the lyrics to the hit song "Y.M.C.A.," Victor Willis "will gain control of his share of the copyright to that song and others he wrote when he was the lead singer of the . . . Village People."

Little, however, is simple in the legal world: the litigation over the Village People catalog is not over. Although Willis' songwriting partner, Jacques Morali, died in 1991, the name of a third author, record producer Henri Belolo, is listed as a co-writer on "Y.M.C.A." and other songs, and the distribution of songwriting credits and revenues is now being decided in court. "The termination is going to occur," stated Jonathan Ross, one of Willis lawyers. "What is in dispute is how much he is getting back, one-half or one-third."



Read 17 USC § 203 here: http://www.law.cornell.edu/uscode/text/17/203

Rewriting the Rules

Earlier this month, radio giant Clear Channel reached an agreement with Warner Music Group (WMG) that will give the recording company and its artists a share of the revenue earned from radio station airplay. This agreement will be the first time that a record label and its artists will be able to collect royalties when their musical works are performed on Clear Channel's 850 stations. "In exchange," according to The New York Times, "Clear Channel will receive a favorable rate in the growing but expensive world of online streaming."

Under the current system of royalty payments, "terrestrial broadcasters are not required to pay royalties to labels and performing artists for the records they play on the air." As for Internet radio, however, "services such as Pandora, as well as broadcasters like Clear Channel through its station Web sites and iHeartRadio app, pay these royalties, but they have complained that the statutory rates for licensing music are too high. The New York Times points out that Internet and satellite radio services have default royalty rates determined according to formulas set by federal statute, while "most other kinds of digital music companies, including on-demand services like Spotify and Rhapsody, rely on all-encompassing licenses negotiated directly with labels and publishers."

Recently, Clear Channel has reached a number of similar licensing agreements with smaller companies, including Taylor Swift's label, Big Machine. WMG, however, is the first major company to make such a deal with Clear Channel, underscoring the significance of streaming in the music world, and the "continuing debate in the music industry over how music should be licensed and paid for," particularly in light of laws that have struggled to keep up with the rapid changes in technology.


Patented Leather

French designer Céline, whose iconic handbags have been spotted on the arms of Rihanna, Oprah and the Olsen twins, now has another accolade to add to its collection: patent protection. Earlier this month, the fashion house received U.S. patent protection for two of its designs: according to The Fashion Law Group, "the patents extend to the design of the house's Diamond clutch (from its Fall 2013 collection) and its Case bag (which debuted for Spring 2013)."

Even though the process of successfully obtaining a design patent is long and arduous (read: expensive) this has become the industry trend as of late for protecting fashion designs. For well-known designers, however, who have the financial resources to spare and who plan "to reintroduce a design or offer a design for longer than the one or two seasons, design patents provide protection that are not available to the vast majority of designs in the U.S. (where design piracy is rampant and the shift away from logo-covered purses makes trademark infringement a difficult avenue to fight fakes)." This move towards patent law as a way to protect design comes as fashion houses and IP attorneys have struggled to use trademark and copyright law, in their current forms, to safe guard fashion design adequately. A design patent, however, is no fail-safe against copycats and counterfeits, but only part of a company's intellectual property protection arsenal.


See the drawings submitted to the USPTO here: http://www.fashion-law.org/2013/09/celine-was-granted-tw">www.fashion-law.org/2013/09/celine-was-granted-tw

Pandora's Music Box

Pandora users can breath a sigh of relief: last week, U.S. District Judge Denise Cote granted Pandora's summary judgment motion that will prevent it from losing the right to stream thousands of popular songs contained in the repertory of the American Society of Composers, Authors and Publishers (ASCAP), a leading performing rights organization that represents over 470,000 songwriters, composers and music publishers.

The legal controversy dates back to 2011, when Pandora obtained a five-year "blanket license" from ASCAP. Heavy hitters in the music business -- including EMI Music and Sony/ATV Music -- then "withdrew from ASCAP the right to license their compositions to 'new media' services, such as Pandora. Pandora later reached an agreement with Sony/EMI in June 2012, only to see Warner, Universal and BMG announce their intentions "to withdraw new media rights as well." This turn of events caused Pandora to go to court, "seeking a determination that ASCAP publisher withdrawals did not impact the scope of [Pandora's] overall ASCAP license." Unfortunately for ASCAP, however, Judge Cote agreed with Pandora; the U.S. district court judge ultimately ruled that the consent decree under which ASCAP operates requires the organization to provide Pandora with a license to perform all of the works in the ASCAP repertory, "even if it purports to lack new media rights."

The consent decree at the heart of the dispute dates back to 1941. The decree came about, according to The Hollywood Reporter, "when the Justice Department filed an antitrust lawsuit alleging monopolization of performance rights licenses. A consent decree was reached and it has been adjusted over the years, most recently in 2001, in what is known as the "Second Amended Final Judgment" (AFJ2). The effect of the AFJ2 is to restrict how ASCAP may grant licenses; the AJF2 also establishes a framework for establishing fees for licenses when a license applicant cannot come to an agreement with ASCAP. Pandora currently finds itself in such a situation, which will go to trial in December.


Players Push for Reform

Last Saturday, college football viewers may have noticed that some players wore the letters "A.P.U." (all Players United) emblazoned on their equipment or on their wrists. The group behind the protest, the National College Players Association(NCPA), reported that 28 players from Northwestern University, the University of Georgia and Georgia Tech participated. The NCPA, founded by a former UCLA football player, has been advocating for a variety of changes to to how sports are played at the collegiate level, including "better health care of college athletes, more scholarship money, and to lift NCAA restrictions on legitimate employment and the players' ability to directly benefit from commercial opportunities." Another goal of the A.P.U. campaign is to "[s]how support for the players who joined the O'Bannon v. NCAA, EA Sports lawsuit regarding the use of players' images/likeliness."

The next step for the movement focuses on momentum, specifically, "on whether more players at more universities join the protest and if the N.C.P.A. and other organizations with similar aims can turn three words into a catalyst for reform." The NCAA has come under increased fire lately as a result of the O'Bannon lawsuit. In response to that criticism, NCAA President Mark Emmert remarked that "the board anticipates a lot of change" in the next six to eight months. The NCAA failed, however, to respond to the All Players United protest launched last Saturday.



Of Beanie Babies and Bank Accounts

H. Ty Warner, the man who brought the world the Beanie Baby in the 1990's, is a tax cheat. It turns out that federal prosecutors claim that the person who created the plush, bean-filled animals hid $3 million in a Swiss bank account. Warner will plead guilty to a charge of tax evasion, a charge that potentially "carries a maximum penalty of five years in prison, a $250,000 fine, plus liability for the back taxes plus interest." He also owes approximately $885,000 in additional taxes on this unreported income, according to the government. Warner faces a civil penalty of $53 million. I guess it's time to start auctioning off those Beanie Babies on eBay...


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This page contains a single entry from the blog posted on September 25, 2013 3:33 PM.

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