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CMJ Business Law Seminar

By Candy Santana

Change, change, change, the common theme at the Entertainment Business Seminar, coupled with recent decisions by the courts and their implications on the industry. The panel devoted to copyright, which was led by Christine Lepera, was the culmination to a day filled with informative discussions. This panel was significant because as noted, Congress is in the early stages of renovating the Copyright Act for the first time since 1970. This section consisted of an amazing array of panelists who conversed about a wide variety of topics, such as recent developments in intellectual property law, the first sale doctrine, and fair use. The panel also touched upon several recent cases, including the Pandora v. ASCAP, Kirtsaeng v. John Wiley & Sons, and Cariou v. Prince.

Gary Greenstein began by tackling the issues with musical works: underlying compositions, notes and lyrics, direct licensing, and Performance Rights Organizations. He discussed with great detail ASCAP's consent decree, along with an analysis of Pandora v. ASCAP, which, as Mr. Greenstein stated, is "Shaking up the world of ASCAP." Why is this decision shaking things up? The court held that the ASCAP blanket license must include its entire repertoire, including the songs of the publishers who are trying to withdraw their digital rights. The court reasoned along with other issues that in the consent decree the language "unambiguously" states that ASCAP has to provide Pandora a license to perform all of the works in the repertory and ultimately granted the motion for summary judgment in favor of Pandora. Due to the fact that this decision just came down recently, we shall see what the implications will be with respect to licensing.

Next, Joe Salvo, the current president of the Copyright Society of the U.S.A., discussed cases that dealt with the first sale doctrine, starting with Kirtsaeng v. John Wiley & Sons. He began by addressing the question: To what extent does the first sale doctrine apply when a copy or copyrighted work is manufactured and sold abroad? In Kirtsaeng v. John Wiley & Sons, the issue was whether the "first sale" doctrine applied if the copy of work was printed abroad and then initially sold with the copyright owner's permission, and whether the buyer of the work is allowed to bring the copy into the United States and distribute the work as the buyer desired. As noted by Mr. Salvo, the owner of the particular copy lawfully made under this title is permitted without the authority of the copyright owner to sell or otherwise dispose of that particular copy. However, section 602 of the Copyright Act indicates that importation into the U.S. without the authority of the owner of a copy of work acquired outside the U.S. is a violation of the copyright. The court reasoned with the geographical limitations and suggested that Congress wanted to even out the playing field for those manufactured copies made in the U.S. and those made abroad. The Court addressed the other issues raised by both parties, but ultimately held that the "first sale" doctrine applies to copies of a copyrighted work lawfully made abroad.

Mr. Salvo continued with the inquiry of to what extent does the first sale doctrine apply to digital copies and digital music? He stated that, as a matter of public policy, once the copyright owner has reached the economic benefit of the copyrighted work, we are not going to let the copyright owner continue to control the distribution of the copyrighted work. He summed up his discussion with an analysis of Capitol Records, LLC, v. Re Digi Inc, where the court held that the owner of a digital music file, lawfully made and purchased, can not resell its file through ReDigi under the first sale doctrine.

Lastly, Moderator Christine Lepera discussed Cariou v. Prince in her presentation of the fair use doctrine. Ms. Lepera began by introducing background facts of the case and continued with the District Court's analysis. In Cariou v. Prince, the court rejected Prince's fair use defense and concluded that Prince did not intend to comment on Cariou or Cariou's photos, or on aspects of popular culture closely associated with Cariou or the photos when he appropriated them. However, the Second Circuit reversed the District Court's decision, holding that all works except five of Prince's artworks were considered fair use of Cariou's work as a matter of law. What is interesting about this case (as provided in Ms. Lepera's Power Point presentation), is that the Second Circuit held that "what is critical is how the work in question appears to the reasonable observer, not simply what an artist might say about a particular piece or body of work." It is fascinating to see how the court used a "reasonable observer" standard in order to determine if the work was transformative. The question then becomes: What is a reasonable observer? How would the reasonable observer measure transformative use? It will be interesting to see how this case would effect the entertainment industry with respect to copyright infringement.

The panel ended with questions led by the Moderator and the audience. Change seemed to be the common theme and the key developments discussed by the panel left us thinking about what will be the future of entertainment business and law.

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This page contains a single entry from the blog posted on November 1, 2013 6:46 PM.

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