« September 2013 | Main | November 2013 »

October 2013 Archives

October 4, 2013

Week in Review

By Martha Nimmer

A Score to Settle

Attorneys for NCAA college athletes announced last week that a settlement with Electronic Arts (EA) had been reached regarding ongoing claims that the video game maker impermissibly used players' likenesses. According to The Hollywood Reporter, a stipulation of settlement has been filed in a California federal court, and now awaits approval from U.S. District Judge Claudia Wilken. She is expected to approve the settlement.

The details of the settlement have not been made public, but the particulars are expected to include licensing payments to athletes, although who, exactly, will receive payments, and in what amounts, remain to be seen. The settlement is also expected to be of interest to many other companies in the entertainment field, "particularly television networks with billion-dollar deals with the NCAA." This potential settlement could thus end "one battle in the ongoing fight over whether amateur athletes get compensated, but it doesn't finish the larger war," writes The Hollywood Reporter.

Other legal issues still remain, however. The plaintiffs in the suit, including Ed O'Bannon, Bill Russell and Oscar Robertson, "continue to push antitrust claims against the NCAA for forcing athletes to sign waivers and allegedly enforcing group boycotts among its licensing partners." A ruling is expected soon from Judge Wilken about whether to certify a class action; additionally, the NCAA has indicated its willingness to take the case to the U.S. Supreme Court, if necessary. Steve Berman, lead attorney for EA in this litigation, indicated "[w]e are looking forward to presenting our case against the NCAA to a jury at trial. We believe the facts will reveal a startling degree of complicity and profiteering on the backs of student athletes."

http://www.hollywoodreporter.com/thr-esq/electronic-arts-reaches-settlement-agreement-638228

"Not Liable"

A jury in California unanimously found that concert promoter AEG Live was not liable for the death of Michael Jackson. The family of the late singer sued AEG Live a year after Jackson died in June 2009, claiming that the concert promoter "negligently hired and controlled" Jackson's physician, Dr. Conrad Murray. Murray, readers will recall, was found guilty in 2011 of involuntary manslaughter for administering propofol, a sedative, to Jackson shortly before his death.

Specifically, the jury ruled that even though the defendant promoter hired Murray, he was "not unfit for his job," thereby rejecting the main premise of the lawsuit brought by Jackson's mother, Katherine, and other members of the Jackson family. AEG Live's counsel argued that there was insufficient evidence to show that it was responsible for Murray's hiring, adding that the doctor had been Michael Jackson's longtime physician, and that AEG had only "administered the relationship." Jackson's family, in contrast, attempted to show that AEG's executives were aware of Jackson's poor health, and "in advance of the planned 'This Is It' tour, placed pressures on Jackson and his team that eventually led to his death." Ultimately, however, the jury found for AEG; a legal victory for the family could have netted hundreds of millions of dollars in damages for Jackson's mother and his three children.

http://www.hollywoodreporter.com/thr-esq/michael-jackson-trial-aeg-not-641706

http://www.entlawdigest.com/2013/10/03/2748.htm

"Only God (and a Court) Can Judge Me"

Tupac Shakur's mother, Afeni, has re-filed a lawsuit against Entertainment One and Death Row Acquisition LLC, seeking $1.1 million in royalties and the master copies of her late son's unreleased songs. In her suit, Ms. Shakur claims that Entertainment One failed for over four years to pay her royalties for her son's works, and refused to return masters of unreleased recordings. Ms. Shakur had originally filed the same suit in federal court last year, but learned this month that an Entertainment One partner was based in Delaware, thereby eliminating "complete diversity and, therefore, the district court's subject matter jurisdiction."
Ms. Shakur became the administrator of her son's estate following his murder in 1996. She created Amaru Entertainment, which is a co-plaintiff to the instant action, to manage her son's intellectual property. According to her lawsuit, Tupac entered into a contract with Death Row Records for three albums, and released his first "long-play recording on the label," "All Eyez on Me," in 1996. Under a 1997 settlement agreement with Death Row Records, the estate "secured all rights to Tupac's Death Row master recordings and audiovisual works." The Shakur estate, in turn, agreed to accept a payment from Death Row "within 60 days of the 10-year anniversary of the agreement for one album featuring unreleased Tupac recordings," his mother claims. She added that royalties from past and future Tupac releases were part of the agreement.

Fast forward to 2003, however, and Death Row entered into a decade-long distribution deal for Tupac's recordings with Koch Entertainment. Pursuant to that agreement, Koch Entertainment was prevented from assigning distribution rights to any other party absent Afeni Shakur's approval, "unless the assignment was part of an assignment, public offering, or private placement of substantially all of Koch's assets," [emphasis added] according to the lawsuit. The record label later filed for bankruptcy in 2006, eventually leading a trustee to exercise the assignment option on the album of unreleased Tupac songs; the label then paid $100,000 to the estate, according to the complaint. In 2009, Death Row was sold for $100 million to the entertainment development company WideAwake Death Row Entertainment. The sale included Tupac's 1995 handwritten contract, the estate's agreement with the label, and the 2003 distribution agreement with Koch Entertainment, now known as Entertainment One. Ms. Shakur claims that she has given defendant Entertainment One a "29-page audit breaking down how much it owes," but the company is holding the money "hostage," and refuses to deliver her son's master recordings.

Ms. Shakur seeks an injunction, an accounting, and damages for breach of contract, breach of faith, and unfair competition.
http://www.entlawdigest.com/2013/09/26/2738.htm

X Marks the Trademark Violation

Don't tell ExxonMobil that copying is the sincerest form of flattery--it doesn't want to hear it.

On Wednesday, the oil giant sued FXX network in Texas federal court, alleging trademark infringement. The globally-known oil and gas corporation says it has a "design mark over a stylized EXXON and has continuously used it since 1971," according to The Hollywood Reporter. The interlocking X logo of the newly launched FXX Network--whose parent company is Fox--"is likely to cause confusion, to cause mistake, or to deceive customers and potential customers of the parties ... as to some affiliation, connection, or association of Defendants' business with ExxonMobil," according to the complaint. Although ExxonMobile fails to cite specific evidence that consumers are, in fact, confused about the source or origin of the cable TV logo, the oil company does point to a few Internet postings that are "making an association" between the ExxonMobil and FXX logos.

ExxonMobil claims trademark infringement, trademark dilution, unjust enrichment and unfair competition. The plaintiff is demanding a permanent injunction, treble damages, an accounting of Fox's profits and legal fees.

So, the next time you pull up to an Exxon station, don't expect Danny Devito from It's Always Sunny in Philadelphia to pump your gas.

http://www.hollywoodreporter.com/thr-esq/exxonmobil-claims-foxs-fxx-network-642481

Read the complaint here: http://www.scribd.com/doc/173106641/Exxon

The Supreme Court's New Copyright Case Is Not a Copyright Case

By Adam Beasley

On Tuesday, the Supreme Court granted certiorari in a number of cases it has agreed to decide during this term. One such case, Petrella v. Metro-Goldwyn-Mayer, No. 12-1315, asks the Court to interpret the Copyright Act. SCOTUS rarely takes copyright cases, so it is understandable why copyright geeks, like myself, might become giddy at the possibility of a new groundbreaking decision. However, a closer look at the case itself reveals that Petrella, which comes to the Court on appeal from the Ninth Circuit, does not actually involve a copyright issue. Instead, the Court is being asked to resolve a Circuit split over the relationship of federal statutes of limitation to the common law laches defense -- a decision likely to require a meticulous interpretation of separation of powers issues rather than questions of creativity or authorship.

The plaintiff is Paula Petrella, the daughter of deceased author and screenwriter Frank Petrella a/k/a Peter Savage. In the 1960's, Frank Petrella wrote a book and several screenplays about former boxing champion and Petrella's childhood friend Jake LaMotta. The Petrella screenplays became the basis for the highly successful movie Raging Bull, starring Robert De Niro, who earned a Best Actor Oscar for his role playing LaMotta in 1981, and directed by Martin Scorsese, who received a Best Director nomination. The defendants claim to own the rights to Raging Bull.

The lawsuit asserts that because Mr. Petrella died in 1981, before the original term of the copyright grant expired, the rights to the screenplays reverted to his heirs. See Stewart v. Abend, 495 U.S. 207, 219 (1990). Paula Petrella, who claims to own her father's reversion rights, began contacting MGM about her potential claim in the mid-1990s. Unfortunately, she waited over a decade -- 18 years according to the defense -- before bringing her claim in 2009. The suit for copyright infringement, unjust enrichment and an accounting names MGM and it subsidiaries as well as United Artists and 20th Century Fox as defendants.

On August 29, 2012, the Ninth Circuit affirmed a decision of the District Court for the Central District of California granting summary judgment to the defendants, holding that Ms. Petrella's claims were barred by the "equitable doctrine of laches." http://cdn.ca9.uscourts.gov/datastore/opinions/2012/08/29/10-55834.pdf The Ninth Circuit opined that the laches defense could bar the lawsuit regardless of whether the claim is brought within the explicit three year statute of limitations contained in the Copyright Act.

The plaintiff argued in her petition for certiorari http://sblog.s3.amazonaws.com/wp-content/uploads/2013/08/Petrella-v-MGM-filed-cert-petn-w-app.pdf that there was a Circuit split concerning whether the laches defense could shorten a statute of limitations provision contained in a federal statute. Now, the Supreme Court is prepared to decide the issue.

The laches defense is a doctrine grounded in equity that bars a suit from proceeding if the plaintiff "sleeps on its rights" and waits too long before bringing a claim. Courts determining whether the defense applies consider the amount and reasonableness of the delay and whether the defendant has changed its position as a result.

Historically, laches has yielded to federal statutes of limitation. As Lord Redesdale wrote in the archaeological discovery Hovenden v. Annesley, 2 Sch. & Lef. 607, 629-30 (1806), "I think it is a mistake in point of language to say that Courts of Equity act merely by analogy to the statutes; they act in obedience to them. ... I think, therefore, courts of equity are bound to yield obedience to the statute of limitations upon all legal titles and legal demands, and cannot act contrary to the spirit of its provisions."

The Ninth Circuit, which has long been accused of broad "hostility to copyright plaintiffs -- specifically, creators filing suit against conglomerates within the entertainment industry," http://sblog.s3.amazonaws.com/wp-content/uploads/2013/08/CSEL-cert-amicus-brief.pdf disagreed, finding the claim barred without an analysis of the defense's relationship to the Copyright Act's three year statute of limitations. 17 U.S.C. § 507(b). Section 507(b) states that "No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued." Since the defendants continue to exploit the film, the statute of limitations has not expired.

The case may also give the Supreme Court the opportunity to revisit its 1990 decision Stewart v. Abend, 495 U.S. 207, which established the "Abend Rule", concerning the distribution of a derivative work during the copyright renewal period of the underlying work. The Abend court held that when an author dies before a renewal period begins, his or her statutory successors are entitled to renewal rights, even when the author has previously assigned those rights to another party. Abend, 495 U.S. at 219. As Ms. Petrella's father died in 1981 during the original 28 year term of his copyrights, his renewal rights in the screenplays to Raging Bull reverted to his heirs.

However, the Supreme Court is expected to focus on the separation of powers issues involved in the case, specifically whether the laches defense can bar a civil copyright lawsuit within the express three year statute of limitations provision in Section 507. A decision narrowly focused on this issue would have far reaching affect outside the copyright context to any federal statute with an express limitations period, making this copyright case hardly a case about copyright.

Adam Beasley is an entertainment and intellectual property attorney in New York City. He can be reached at www.adambeasleylaw.com. A previous version of this post can be found at http://adambeasleylaw.com/supreme-courts-new-copyright-case-copyright-case/.

October 10, 2013

Aereo Decision

By Barry Werbin

In the ongoing battle between over-the-air-broadcasters and Aereo, as well as Aereo's copycat competitor FilmOn (formerly known AereoKiller), the U.S. District court of Massachusetts issued its anxiously awaited decision on October 8th. The court denied Hearst Stations Inc. (as the owner of a local TV station) a preliminary injunction against Aereo, which rolled out its retransmission streaming over-the-Internet antenna service in the Boston area in May and continues to aggressively expand into other parts of the country. The court sided with the Second Circuit's opinion in WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013), which held that Aereo's technology system incorporating single-user dedicated dime-size antennas resulted in the transmission of a unique copy of a copyrighted broadcast work to a single unique user, and was therefore not a "public performance" that infringed the broadcasters' exclusive right to publicly perform their works.

The Second Circuit previously affirmed the issuance of a preliminary injunction against Aereo in New York and denied the broadcasters' petition for a rehearing en banc, with a strong dissent from Judge Denny Chin. The broadcasters will file a petition for certiorari to the Supreme Court.

Meanwhile, district courts in the District of Columbia [Fox Television Stations, Inc. v. FilmOnX LLC, 2013 WL 4763414 (D.D.C. Sept, 5, 2013)] and California [Fox Television Stations, Inc,. v. BarryDriller Content Systems PLC, 915 F. Supp. 2d 1138 (C.D. Cal. 2012)] have both ruled in favor of a group of broadcasters in their separate suits against FilmOn, with the D.C. court recently issuing a nationwide injunction (excluding the Second Circuit) against FilmOn. Oral argument before the Ninth Circuit recently took place and a decision from that Circuit is imminent. On October 7th, a group of broadcasters sued Aereo in the District Court of Utah.

In its decision, the District Court of Massachusetts essentially adopted the reasoning of the Second Circuit but without an extensive discussion, citing to the legislative history behind the so-called "Transmit Clause" in Section 101 of the 1976 Copyright Act, which in the court's view favored Aereo's "unique copy/unique user" theory that was essentially adopted by the Second Circuit.

The Boston-based court also found that Aereo likely did not violate the broadcasters' exclusive right to make copies of their broadcast content when Aereo made more than "transitory" copies of those works on hard drives every time one of its subscribers chose to watch or record a program. The court found that Aereo itself did not engage in any "volitional conduct"; rather, it was "likely that the user supplies the necessary volitional conduct to make the copy." However, the court found that this was "a closer question than the issue of public performance", and that discovery "could disclose that Aereo's service infringes WCBV's right to reproduce its work."

Finally, the court found that Aereo's transmissions did not infringe the broadcasters' exclusive distribution right because courts have interpreted the distribution clause to require the "actual dissemination" of copies. As Aereo was not permitting the downloading of programming but only its streaming, Aereo was deemed to be "performing," rather than "distributing," copyrighted works. The court also summarily dismissed a claim that Aereo's transmissions created derivative works by converting the audio/video content into a different digital format compatible with Internet streaming.

With respect to the request for injunctive relief, the court further found that the balance of hardships did not favor one side over the other because each side made cogent arguments concerning irreparable harm, and that these respective contentions "balance out."

A copy of the decision is available here:Aereo-Boston-Ruling.pdf

Week in Review

By Martha Nimmer

Removing A-Rod

Citing federal question jurisdiction, Major League Baseball (MLB) has removed Alex Rodriguez's suit against the MLB to federal court. The case, originally filed on October 3rd in New York state court in Manhattan, has been assigned to U.S. District Judge Lorna G. Schofield.

Rodriguez's suit initially involved state law claims for tortious interference. Specifically, the Yankees' third baseman alleged that MLB "illegally interfered with his player contract and business interests." In August, MLB suspended A-Rod for 211 games following his alleged involvement with Biogenesis, a Florida clinic that is rumored to have provided baseball players with banned performance enhancing drugs (PEDs). Now that A-Rod's suit against MLB and Commissioner Bud Selig has been removed to federal court, the case will "depend on analysis of the league's collective bargaining agreement, drug agreement and standard player's agreement." Specifically at issue is Section 301 of the Labor Management Relations Act of 1976, which the MLB successfully argued preempts Rodriguez's state law claims. Section 301 of the Act provides the basis for an employee's right to sue an employer for violating a collective bargaining agreement. In response, Rodriguez's attorney stated that his client's claims against MLB and the Commissioner "arise from their tortious conduct," and are separate from suspension-related claims currently being arbitrated between the MLB and the player.

The case is Alexander Rodriguez v. Major League Baseball et al., case number 1:13-cv-07097, in the U.S. District Court for the Southern District of New York.

http://www.law360.com/articles/478806/major-league-baseball-bunts-a-rod-lawsuit-to-federal-court

Read the notice of removal here: https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=t_PLUS_mSvVlzfF8lFNKDwkzKpA==&system=prod

Read Section 301 of the Labor Relations Management Act: http://www.law.cornell.edu/uscode/text/29/185

House Arrest for Sculptures?

No one wants to find herself at the center of a copyright infringement dispute, least of all a new artist who is just beginning to 'break' into the art world. That, however, is exactly where sculptor Lauren Clay has found herself.

An exhibition of the young artist's work was slated to open at the "Grounds for Sculpture in Hamilton, NJ, on October 18, but due to allegations of possible copyright infringement by the estate of Abstract Expressionist sculptor David Smith, that show may not go on." Clay's collection, according to Blouin Art Info, was to feature seven sculptures that "reference Smith's Cubi works -- his looming welded-steel assemblages of delicately balanced geometric shapes with brushed gestural surfaces." In contrast to Smith's imposing sculptures, which stand at eight-to-10 feet tall, Clay's works are much smaller, around 18 inches tall, and are made from materials such papier-mâché and faux woodgrain.

Once the estate of the deceased sculptor got wind of Smith's planned exhibition, the estate contacted Clay through its copyright representative, VAGA, a licensing and rights management organization. According to Clay, VAGA "demanded an accounting" of her works and asked her to write a letter seeking permission to copy the Smith works, "as if I need permission," Clay added. Supposedly, Clay contends, VAGA also told her that she could exhibit her works if she promised to destroy them after the October show; more recently, she states, VAGA asked her "merely to promise never to show them again or sell them."

The status of Clay's presence at the October 18th show and the future of the Clay works remain unsettled. VAGA and the Smith estate do not want Clay's exhibit to debut unless the artist agrees to VAGA's stipulations, and just last week, Grounds for Sculpture announced its intention to go ahead with its October 18th show without Clay's pieces. The artist hopes, however, that her pieces will still be included in the show, adding that she is seeking legal counsel to help her respond to the demands of VAGA and the Smith estate. "I feel that I have a right to exhibit and sell this body work," Clay wrote, "even after the Grounds for Sculpture show."

http://www.blouinartinfo.com/news/story/966834/david-smiths-estate-demands-house-arrest-for-a-young-artists

http://itsartlaw.com/2013/10/07/david-smith-estates-recent-allegations-of-copyright-infringement-highlights-ongoing-debate-on-fair-use-and-appropriation-art/#

Repatriating Peruvian Property

The U.S. Attorney's Office for the Southern District of Florida responded last week to a motion to dismiss in a case involving the forfeiture of 29 Peruvian antiquities seized by federal officials at Miami International Airport. In its response to the motion, the prosecution argues that the federal district court -- and not the Court of International Trade, as the claimant urges -- "is the proper venue to litigate a Cultural Property Implementation Act (CPIA) forfeiture; that due process was not denied to the claimant, Jean Combe Fritz; and that the forfeiture complaints are legally sufficient." (The forfeiture case is civil in nature, its goal is to seize and ultimately repatriate cultural material.)

Regarding the issue of venue, prosecutors pointed to 28 U.S.C § 1355(a), which states that a U.S. district court enjoys original jurisdiction over any proceeding involving the enforcement of a forfeiture; consequently, as a forfeiture proceeding is involved in the instant action, the U.S. districts court would have jurisdiction to hear the case. Furthermore, according to the U.S. Attorney's Office, the Court of International Trade (CIT) is not the proper venue to litigate Fritz's claim, because the CIT only has jurisdiction over claims arising under §1582 of Title 28, which involves "civil actions brought by the U.S. to enforce import transaction penalties, bond recoveries, and customs duties." The prosecutors emphasized that "[t]his case is a complaint for civil forfeiture brought by the United States against the Defendant Property, and is therefore clearly not within the CIT's jurisdiction." In the government's response, attorneys for the federal government go on to attack the "Claimant's suggestion that Peru cannot claim pre-national artifacts as cultural property," calling this argument "astonishing."

Although the forfeiture case is civil in nature, elements of a criminal action have also appeared. The government's response claims that the Peruvian artifacts taken to Miami were worth approximately $283,000, not "$500 as originally claimed during importation." The U.S. Attorney's Office also claims that "false statements were made to customs officials about how the objects were possessed, the purpose for importing the items, and to whom the items would be delivered." Additionally, "twenty-two 'turn-around' trips in the last ten years raise the specter of 'courier activity,'" according to the government. Despite the presence of these allegations in the government response to the motion to dismiss, no criminal charges have been filed in the matter.

http://networkedblogs.com/PP8Cm

Read 28 U.S.C § 1355(a) here: http://www.law.cornell.edu/uscode/text/28/1355

New York City Opera's Final Curtain

After 70 years of bringing opera to the masses, the New York City Opera filed last Thursday for Chapter 11 bankruptcy protection. This move comes after a $7 million fundraising appeal fell short in September. George Steel, the opera's general manager, remarked that the bankruptcy filing was a "difficult, but necessary decision." At one point, the endowment of the New York City Opera topped $55 million; now, the it amounts to around $4.5 million. In its filing, City Opera "sought permission to give refunds to people who had bought tickets to the productions that they have canceled for the remainder of the season -- $323,000 worth." In an email to subscribers, the opera company wrote that it was confident that the court would approve its motion.

http://www.nytimes.com/2013/10/04/arts/music/new-york-city-opera-files-for-bankruptcy.html

October 17, 2013

Postal Stamp Infringement Valuation Determined

By Joel L. Hecker

Frank Gaylord created and is the copyright owner of his sculptures called the "Column", which consist of a group of 19 stainless steel soldiers which form the centerpiece of the Korean War Veterans' Memorial on the National Mall in Washington, D.C. In January 1996, an amateur photographer named John Alli visited the Memorial during a snowstorm and took a photograph of the Column. In 2002, the United States Postal Service licensed the photograph for use on the 37 cent stamp commemorating the memorial. However, the Postal Service did not get Mr. Gaylord's consent to use the photograph of his copyrighted sculptures.

Prior Judicial History

Gaylord sued the Postal Service for copyright infringement (Frank Gaylord v. United States, US Court of Federal Claims, Index No. 06-539C). In a torturous tangle of proceedings, the United States Court of Federal Claims initially found that the Postal Service's use of the photograph of the Column was a fair use and therefore it was not liable for copyright infringement. On appeal, the Federal Circuit Court of Appeals reversed that finding and found that the Postal Service had indeed infringed Gaylord's copyright in three categories: 1) stamps used to send mail; 2) unused stamps retained by collectors; and 3) retail goods featuring an image of the stamp.

On remand, the Court of Federal Claims awarded $5,000 in damages on the grounds that this amount was the largest the Postal Service had ever paid to use an image on a stamp. Gaylord appealed the damage award and the Federal Circuit once again vacated the Court of Federal Claims order and remanded the case for a determination of the fair market value of such infringing use. As instructed, the Court of Federal Claims has now determined the amount of damages due to Gaylord in an Opinion and Order filed September 20, 2013.

Stamps Used to Send Mail

On the second remand, the Court of Federal Claims was required, for the first element (stamps used to send mail), to calculate the value of a license granted based upon "a hypothetical, arms-length negotiation between the parties". In addition, the mandate instructed the court to determine whether an ongoing royalty of a one-time fee more accurately captures the fair market value of a license for stamps used to send mail. However, since Gaylord was no longer seeking damages for stamps used to send mail, the court awarded no damages for this category.

Unused Stamps Purchased by Collectors

The analysis for this category differs from used stamps, because the latter represent nearly pure profit for the Postal Service. The Federal Circuit instructed the Court of Federal Claims to consider whether the evidence supports an ongoing royalty rate or a lump sum royalty payment for the estimated $5.4 million collected from unused stamps. The Court found that a 10% running royalty is the appropriate approach, and thereby awarded $540,000 in damages for this component of the case (this stamp is no longer being sold by the Postal Service and therefore a finite amount of damages award could be made).

Commercial Merchandise

The record reflected that Gaylord has consistently licensed images of his Column for retail and commemorative items at approximately a 10% royalty, and therefore in the hypothetical negotiation he would have likely received that 10% royalty on merchandise. Accordingly, he was awarded damages equal to 10% of the estimated $330,919 collected by the Postal Service or $33,092.

Pre-Judgment Interest

Lastly, the Federal Circuit determined that Gaylord was entitled to pre-judgment interest in order to make his compensation complete. By stipulation between the parties, that amount was calculated at $111,752.94.

Total Award

The total award granted to Gaylord against the Postal Service therefore aggregated the sum of $684,844.94. Gaylord, after having the dismissal of his case reversed, as well as a reversal of the minimal $5,000 award, and with the benefit of two Federal Circuit Court decisions in his favor, has finally been awarded what he considers to be just compensation for the infringement of his copyrighted work. Perseverance indeed sometimes does pay!


Joel L. Hecker, Of Counsel to Russo & Burke, 600 Third Avenue, New York, NY 10016, can be reached at (212) 557-9600, fax (212) 557-9610, www.RussoandBurke.com, or via email: HeckerEsq@aol.com.


October 18, 2013

Week in Review

By Martha Nimmer

Graffiti or Aerosol Art?

G&M Realty, the development company hoping to turn a collection of warehouses in Long Island City into high rise apartment buildings, is being sued by the self-proclaimed "aerosol artists" who tagged the buildings known as "5Pointz." Just yesterday, the New York City Council unanimously approved a $400 million development plan for the site. In response, the artists have gone to court, asserting their copyright interests in the endangered works.

Graffiti artist and lead plaintiff Jonathan Cohen claims that the property owner, Gerald Wolkoff, has allowed graffiti artists to tag the buildings since 1993. Cohen, who tags under the name Meres One, also clams that Wolkoff granted him "full authority" to determine what could be spray painted at 5Pointz, even giving the aerosol artists keys to the buildings and space to store spray paint, ladders and other supplies. What developed from that arrangement was a "graffiti mecca," featuring over 350 works by graffiti artists. According to the lawsuit, "hundreds of tourists" from around the world visit the site every week.

Now, however, it appears that 5Pointz's days are numbered: the buildings are slated to be knocked down to make room for a 1,000 unit luxury apartment complex. Fearing the destruction of their works, the artists have sued, seeking to exercise their copyright ownership rights over the tagged interiors and facades of the 5Pointz buildings.

Cohen says that he has applied for copyright registration for several of his paintings, adding that removing them from 5Pointz would cause their "destruction, distortion, mutilation or modification."

Applying traditional copyright law to what some observers would dismiss as mere graffiti, or a public nuisance, will be no easy task, however: the plaintiffs will have to "elevate the perception of their art form from just simply graffiti to legitimate 'works of visual art' in need of protection from demolition." To convince a court that their works deserve protection from a real estate developer's wrecking ball, the plaintiffs highlighted in their suit the notoriety and popularity of the site as a tourist destination, adding that "because of its stature in the international art community and its high visibility, having a work of visual art accepted and displayed on 5Pointz adds considerable prestige to an artist's reputation. For aspiring aerosol artists, having a work of visual art accepted and displayed on 5Pointz is guaranteed to raise their profile and enhance their credibility in the art world." Essentially, the plaintiffs argue, the acclaim and prestige that 5Pointz enjoys among some members of the art world have turned "mere graffiti" at the site to works of art that are deserving of copyright protection. Ultimately, the artists aver that destroying their works would cause "irreparable harm, and that "each of the plaintiffs has the right to prevent such destruction, distortion, mutilation or modification of his or her works of visual art for a term consisting of the duration of his or her life."

The plaintiffs seek an injunction barring defendants from destroying their art.

http://www.entlawdigest.com/2013/10/14/2759.htm

The Singer and the Civil RIghts Leader

Famed singer and entertainer Harry Belafonte has sued the estate of longtime friend Martin Luther King, Jr. The suit, filed earlier this week in Manhattan federal court, seeks damages of an unspecified amount and a declaration that Belafonte is the rightful owner of three documents that he tried to sell at auction in 2008. One of the documents is an outline for the civil rights leader's 1967 speech "The Casualties of the War in Vietnam," written on a legal pad by Dr. King during a visit to Belafonte's New York apartment. The second document at issue is a condolence letter from President Lyndon B. Johnson to Mrs. King, received shortly after her husband's assassination in 1968. The third document is an envelope that Dr. King carried in his pocket the day he was assassinated. According to The New York Times, Dr. King had written notes on the envelope for a speech that he was to have given in Memphis. In his suit, Belafonte claims that the three documents were given to him by Dr. King, by his widow, Coretta Scott King, and by Dr. King's aide, Stanley Levison.

Belafonte attempted to auction the items at Sotheby's in December 2008 to raise money for Barrios Unidos, a charity that works with street gangs. Before the sale could occur, however, Dr. King's estate challenged Belafonte's ownership of the papers, alleging in a letter to Sotheby's "they are 'part of a wrongfully acquired collection.'" After receiving the letter from the King estate, Sotheby's removed the documents from the auction catalogue and put them in a storage vault, where they have remained since December 2008. As the The New York Times notes, "[u]nder state law, Sotheby's faces liability to the actual owner if it releases property to the wrong party, and so has refused to return the documents to Mr. Belafonte until the dispute is settled."

http://www.nytimes.com/2013/10/16/arts/belafonte-sues-the-king-family.html?src=me

http://www.politico.com/story/2013/10/harry-belafonte-sues-king-estate-98374.html

Cuban Cleared

Following a two week trial, a Texas jury has cleared Dallas Mavericks owner Mark Cuban of insider trading. Cuban was charged with insider trading by the Securities and Exchange Commission (SEC) after allegedly "trading on non-public information when he sold his 600,000 shares in Internet search company Mamma.com - worth $7.9 million - and avoided a $750,000 loss," writes Reuters.

The SEC brought its civil lawsuit against Cuban in November 2008; the suit, however, was dismissed in 2009, only to be revived the following year by an appeals court. Despite advice from his attorneys, Cuban refused to settle the case and decided to go to trial, even though, he claims, his attorneys' fees have exceeded the possible fines for admitting to insider trading. He could have faced up to $2 million in fines, according to his attorneys. "It's personal. You take all these years of my life, it's personal," an angry Cuban remarked.

At trial, federal prosecutors claimed that Cuban sold his stake in Mamma.com soon after learning from the company's Chief Executive, Guy Faure, that the company was "planning a private placement that would dilute his holdings in the company." Shares in the Montreal-based company ended up plummeting 9.3% the morning after the offering was announced. Cuban, however, had already sold his shares, raising red flags for the SEC. Cuban, who sold his company Broadcast.com to Yahoo in 1999 for $5.7 billion dollars, testified that there were many innocuous reasons for selling his shares, "including the private placement and Mamma.com's possible association with a known stock swindler." Counsel for Cuban also suggested "that word of the private placement had leaked into the market because potential investors were being contacted to participate in the private placement," according to Reuters.

At a press conference following the jury's verdict, Cuban expressed relief that the case was over, and took the opportunity to lambaste the SEC. "Jan Folena, who represents the United States of America, stood up there and lied . . . I'm the luckiest guy in the world and I'm glad I could stand up to them," he said.

Now that the suit has concluded, Cuban can stop yelling at the SEC and get back to screaming from the stands at the Mavericks.

http://www.reuters.com/article/2013/10/16/us-usa-sec-cuban-verdict-idUSBRE99F0ZM20131016

Refusing to Settle

A group of former NFL players is set to oppose the NFL's image rights settlement, initially approved in April by U.S. District Judge Paul A. Magnuson. On the line is a $50 million settlement in the 2009 lawsuit against the League. Players alleged in the 2009 suit that the NFL profited from using their images without permission. The agreement would create an agency that would be charged with managing former player image licensing. The League would also pay a whopping $42 million into a fund administered by NFL retirees for their peers. Another $8 million would be paid by the NFL to help cover the plaintiffs' legal expenses.

Part of the settlement agreement, and the factor leading some former NFL players to oppose the deal, is that retirees from the game receive no individual payout or benefit from the league. Dan Gustafson, an attorney for the plaintiffs, defended the settlement: "[t]he settlement's combination of the Common Good Fund and the Licensing Agency thoughtfully addresses the interests of all class members, not just those who may have more valuable claims, but also those whose claims -- although less valuable -- may have greater individual needs." Additionally, Gustafson said, settling with the League prevents the plaintiffs from being subjected to a long, drawn-out trial, where the outcome could come out in the NFL's favor. Former New York Jets defensive linemen Mark Gastineau and Abdul Salaam, among others, oppose the accord. Their attorney has asked Judge Magnuson for permission to argue at the hearing, which is scheduled to take place today in federal court in St. Paul, Minnesota.

http://www.bloomberg.com/news/2013-10-17/ex-players-oppose-nfl-properties-image-rights-settlement.html

October 22, 2013

Sorry For Partying, But It's Fair Use

By Barry Werbin and Laura Tam
Herrick, Feinstein LLP

A recent decision by the district court for the Western District of Wisconsin tests the boundaries of the "transformative use" doctrine in the ongoing fair use debate concerning works of visual art. In Kienitz v. Sconnie Nation LLC, 2013 WL 4197454 (W.D. Wis. Aug. 15, 2013), the court held that an apparel company's use of a respected photojournalist's photograph of Paul Soglin, the mayor of Madison, Wisconsin, in modified form, did not constitute copyright infringement. Citing the Second Circuit Court of Appeals' decision in Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013), the court determined that the use of the modified photograph on shirts intended to make a political statement, that were manufactured and sold by the apparel company, was transformative and fair.

In 2011, the plaintiff, Michael Kienitz, photographed Soglin at the mayoral inauguration ceremony. Kienitz, a long-time political supporter of Soglin, gave the mayor permission to use the photograph for any noncommercial purposes, including the official website for the City of Madison, as well as the mayor's Facebook profile.

In 2012, the defendants, Sconnie Nation LLC and Underground Printing - Wisconsin, LLC, decided to create and sell shirts to criticize Soglin's opposition to the Mifflin Street Block Party, a controversial annual event that began in 1969 as part of the student protest movement on a local college campus. Ironically, Soglin had been arrested at the first Mifflin Street Block Party when he was a student protest leader, but had publicly stated in 2011 that he was interested in ending the event. In their search for a recognizable image of Soglin, the defendants downloaded Kienitz's photograph from the City of Madison's website, altered the photo as a high-contrast, monochrome image and colored the mayor's face lime green, adding the phrase "Sorry For Partying" across the image. Fifty-four of the shirts were sold for a net profit of $910.

After Kienitz brought suit for copyright infringement, both parties moved for summary judgment on the issue of whether the use of the Kienitz's photograph was a fair use.

With respect to the first statutory fair use factor under 17 U.S.C. §107, the court determined that the modified image used on the shirt was "transformative," even though it was a commercial product and did not comment on the photograph itself. Kienitz had argued that the shirt was really a derivative work and that the concept of transformative use was meant for cases where there was a commentary on the original work (e.g., a parody), whereas here the shirt was not commenting on the photo itself. The court, however, found Kienitz's argument "debatable." The court noted that by altering the photograph, "the character and expressing of the image is completely different from the original." Moreover, "[d]efendants employed this photograph for the diametric purposes of sophomoric humor and political critique." Citing to Cariou v. Prince, the court noted that "a 'work could be transformative even without commenting on [the author's] work or on 'culture'--'[w]hat is critical is how the work in question appears to the reasonable observer.'" The court found that the "robust transformative nature of defendants' . . . shirts tips this first factor toward fair use, even taking into account the fact that the shirts were a commercial product."

The court determined that the second factor (nature of the copyright work) was a "toss-up." Although the court seemed to agree with the defendants' argument that the photograph did not contain as much artistic expression as photographs in other fair use cases, the court determined that the photo was nevertheless entitled to copyright protection [it was registered with the Copyright Office] because Kienitz "would have made at least some artistic/creative decisions with respect to composition, lighting and timing."

Under the third "substantiality" factor, the court determined that the amount and substantiality of the defendants' use was reasonable since the defendants "did not take the 'heart' of Kienitz's work", as it "figuratively revers[ed] the tenor of the image." Moreover, the court found that this factor favored the defendants because "the artistic elements claimed by Kienitz (e.g., the lighting, expression and pose) fade to insignificance on the [defendants'] shirts, if they do not evanesce completely."

Last, the court acknowledged that the U.S. Supreme Court in Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 566 (1985), had characterized the fourth potential market effect factor as "'the single most important element of fair use.'" The court found that the image of the mayor on the defendants' shirts was not a substitute for Kienitz's photograph, because the market for the photograph and the market for the shirts "are skew, as in nonintersecting and not even parallel." Kienitz admitted that he would never have licensed his photograph "for the purpose of criticizing, mocking, parodying or satirizing Mayor Soglin." Since it was unlikely that the shirts would reduce the demand for Kienitz's photograph, the court easily found that this factor favored the defendants.

After balancing all the relevant factors, the court held that the defendants were entitled to summary judgment on Kienitz's copyright infringement claim.

The case is yet another example of the ongoing arguable erosion of the exclusive right of copyright owners to create derivative works from their original works of authorship in the field of visual arts. Consider that the term "derivative work" in 17 U.S.C. 101 is defined in relevant part as "a work based upon one or more preexisting works, such as a[n] ... art reproduction.. or any other form in which a work may be recast, transformed, or adapted." (Emphasis added). Notably, while this definition expressly uses the word "transform," the word "transformative," being a judicial-made doctrine, does not appear anywhere in Section 107, which defines the fair use defense. It will be interesting to see how future fair use decisions outside of the Second Circuit will be influenced by that court's analysis in Cariou v Prince.

A copy of the decision is available here: http://bloximages.chicago2.vip.townnews.com/host.madison.com/content/tncms/assets/v3/editorial/d/49/d49b304a-6b21-5b94-9cd2-420d8a9041ff/520e5e96e5b5a.pdf.pdf

October 28, 2013

New York Festivals International Television & Film Awards Adds New Categories To The 2014 Competition

By Kim Swidler

Rose Anderson, Executive Director of the New York Festivals International Television & Film Awards, has added new categories to the coming year's competition. This organization is coming into its forth year of showcasing the winners to more than 93,000 media and entertainment professionals from 156 countries, including more than 1,700 industry press representatives, at the annual NAB show in Las Vegas.

New categories in 2014 include: Best Host, Best Screenplay, Best Nonfiction Series, Corporate Social Responsibility, Business & Finance documentary, Human Concerns documentary, Legal Issues documentary, Financial & Legal Reporting, and Production Design/Graphic Design for Promos.

Last year, medal recipients in this organization's new categories included Julia Stiles (WIGS), Troian Bellisario(WIGS), and Robert Taylor (Longmire), for their performances; "The Fabric Of The Cosmos: What is Space?" (Nova/PBS/Pixeldust) and "You, Planet - An Exploration in 3D" (Terra Mater) for Special Visual Effects; "Exposure: The Other Side of Jimmy Savile"(ITV) for Current Affairs; "The Resurrection Tomb Mystery" (Discovery Channel) for Innovation; "Titanoboa Online" (Smithsonian) and "The Dalai Lama at St Paul's" (CTN) for Online Special Event; and "X Games" (ESPN), for their Technical Production Team.

To read Kim Swidler's blog piece published by Times Union.com concerning the New York Festivals International Television & Film Awards and Ms. Anderson's insights into this organization, please go to blog.timesunion.com/travelgal.

October 30, 2013

Dramatic License With "A Time to Kill"

By Lisa Fantino

Dramatic license doesn't paint with a broader brush than when it comes to Broadway, literally. Rupert Holmes' dramatic retake of John Grisham's first legal thriller, "A Time to Kill," hits the Great White Way for the fall season and is a well-staged production in the vein of "Twelve Angry Men".

I attended the show as a reviewer, but it also happens that I am a litigator, which made for very interesting observations. While the production is fantastic for many reasons (you can read my review at http://ladylitigator.wordpress.com/2013/10/31/a-time-to-kill-on-broadway/), what I think most attorneys will find noticeable is no less than six ethics violations in just the first act.

The nutshell version, for those who didn't read Grisham's classic or see the 1996 film with Matthew McConaughey and Sandra Bullock, revolves around a fictional account of a young black girl who is hung and raped by two drugged out white men in racially torn Mississippi. The girl's distraught father shoots the men at the courthouse following their arraignment, and is then tried for capital murder. He chooses a local lawyer to represent him rather than the politically charged NAACP, and so the trial proceeds. Toss in the assistance of a drunken disbarred attorney and a politically ambitious prosecutor, and the predominantly white jury finds the father not guilty by reason of insanity.

Act One is so full of ethics issues that I found myself scribbling in the dark theater, starting with the father, Carl Lee Hailey, plotting to murder the suspects and outlining his plan to his attorney, Jake Brigance. Any 1L student knows that the attorney-client privilege protects communication, except that "a lawyer may reveal or use confidential information to the extent that the lawyer reasonably believes necessary: (1) to prevent reasonably certain death or substantial bodily harm; (2) to prevent the client from committing a crime (see Rule 1.6(b)) Clearly, after hearing Carl Lee's detailed plot, even to the extent of selecting a jury and trial strategy, Brigance had an obligation to reveal such intent to the authorities. Yet, Brigance, who often takes the moral highground throughout the play, never once reflects on the fact that he could have prevented this had he revealed Carl Lee's intent. In passing, when the sheriff questions Brigance about his knowledge, he indicates that had such assertions been made, that Carl Lee was not acting in his right mind due to his emotional upheaval.

Disciplinary Rule 4-101.C(3) permits an attorney to reveal client confidences and such intent to commit a crime in order to prevent the crime itself. Yet the language is open to interpretation and the attorney's reasonable judgment as to whether or not to reveal such confidences. In "A Time to Kill" perhaps Brigance did not struggle with the dilemma because he believed Carl Lee to truly be distraught and speaking only in hypotheticals with no reasonable expectation to commit murder. Maybe Brigance was able to sleep at night, before the KKK burned his house to the ground, because he strongly suggested to Carl Lee NOT to even consider killing these men.

Holmes takes dramatic license in many other areas, most notably having the young, sexually harassed D-A intern then jumping ship to assist Brigance when her internship was over. She leaks everything from jury lists to strategy for the prosecution. Ahh, the stuff of fiction. Not to mention that a disbarred, drunken, down-on-his luck mentor to Brigance offers to buy him a hung jury. For the average theater-goer, "A Time to Kill" is an enjoyable night out. For an attorney, it's probably one of the few staged dramas to get us thinking.


Lisa Fantino is an award-winning journalist and solo practitioner who has just released her first book, "Amalfi Blue, lost & found in the south of Italy." She has a general practice firm in Mamaroneck, New York, where she focuses on entertainment as well as general transactional and litigation matters. She can be found at http://www.LisaFantino.com or blogging as http://ladylitigator.wordpress.com.

October 31, 2013

IsoHunt Goes Out with a Bang

By Angele Chapman

BitTorrent websites like IsoHunt.com have become the "underground" way to illegally download music, movies, and more without paying. BitTorrent is a file distribution protocol that enables torrent files to be shared between users through a peer-to-peer file sharing software. These torrents usually contain media files that are hot commodities for those who wish to avoid paying for movies, music, programs, and other products. This new blast of technology is opening up the doors to copyright infringement and a great deal of lawsuits in the entertainment industry.

In March of this year, the U.S. Court of Appeals for the Ninth Circuit affirmed a summary judgment ruling in favor of seven film studios, finding that the defendant Gary Fung, who is the founder of IsoHunt, induced third parties to download infringing copies of the plaintiffs' copyrighted works. (Columbia Pictures Industries, Inc., et al. v. Gary Fung, et al., Case No. 10-55946 (9th Cir., Mar.21, 2013) (Berzon, J.)). Fung failed in his attempt to use the DMCA's safe harbor provision as a defense against parties such as Disney Enterprises, Inc, Paramount Pictures Corp., and Warner Bros Entertainment, Inc. Fung asserted, "A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider's transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing or providing connections..." (Columbia Pictures Indus. v. Gary Fung, 710 F.3d 1020, 1040 (9th Cir. Cal. 2013)).

After this case, other companies whose business has been affected by IsoHunt's copyright infringement have joined in seeking an injunction. As result, IsoHunt and the Motion Picture Association of America recently reached a settlement for $110 million, three weeks before their trial was set to begin. IsoHunt will finally shut down, after over 10 years of operation, to its 7.5 million unique visitors. This settlement also includes a global prohibition against founder Gary Fung from further profiting from the infringement of MPAA member studio content. (Popular BitTorrent Site IsoHunt Shutdown, Forced To Pay $110 Million, RT (Oct. 18, 2013, 3:46 PM), http://rt.com/usa/bittorrent-isohunt-shutdown-forced-340/)

What this Means for IsoHunt

IsoHunt has agreed to cease all of its international operations, leading to the shutdown of another top BitTorrent file sharing website. Gary Fung agreed to this settlement as it became apparent he was fighting a losing battle. Another motivating factor may have been that the MPAA warned Fung that it was seeking as much as $600 million in damages if the case proceeded to trial. Nonetheless, this settlement sends a strong message to other BitTorrent websites that continue to infiltrate the entertainment industry and profit from illegal business practices by enabling users to engage in copyright infringement. (Eriq Gardner, IsoHunt To Shut Down After Settlement With Hollywood Studios, THE HOLLYWOOD REPORTER (Oct. 17, 2013, 9:31 AM),
http://www.hollywoodreporter.com/thr-esq/isohunt-shut-down-settlement-hollywood-649203).

This settlement speaks volumes for the power that large media companies have to shutdown file sharing websites. Specifically, it places a duty on websites to regulate the files being shared in order to avoid copyright liability. It also causes great concern for those companies who have evolved primarily on their access to such illegal activity. However, there seems to be an apparent difference between decisions stemming from courts in Europe and the United States. For example, The Pirate Bay, another torrent website, was handed a judgment against it in Swedish courts, yet the website is still in operation. Both websites were sued by the MPAA, yet The Pirate Bay has been able to survive that lawsuit. Regardless of what country in which the website is based, the March decision and recent settlement between IsoHunt and MPAA illustrates that enforcing copyright infringement is essential to major corporations.

As of October 23rd, the IsoHunt website no longer existed. The founder wrote a farewell letter to his users and advised as to how they might go about obtaining sought-after torrent files. He noted, "about 95% of those torrent files can be found off Google regardless and mostly have been indexed from other BitTorrent sites in the first place." His quote depicts that while the content companies may feel as if they have won the battle here, the war is far from lost.


About October 2013

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in October 2013. They are listed from oldest to newest.

September 2013 is the previous archive.

November 2013 is the next archive.

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