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December 2013 Archives

December 1, 2013

Alls GoldieBlox, Inc. Really Wants is Fair Use? Or is it?

By Justin Joel

On November 21st, GoldieBlox, Inc. (GoldieBlox) filed a complaint (http://www.scribd.com/doc/186402972/Beastie) with the United States District Court for the Northern District of California seeking a declaratory judgment that its promotional video did not infringe the copyrights in the Beasties Boys' song "Girls" and was a fair use. The resulting transgressions have prompted an interesting discussion about fair use, each party's handling of the situation, and GoldieBlox's underlying motives for filing the complaint.


GoldieBlox, a toy company, was "founded upon the principle of breaking down gender stereotypes, by offering engineering and construction toys specifically targeted to girls." In furtherance of this goal, the company utilizes a series of promotional videos depicting girls engaged in so-called "nontraditional" activities. GoldieBlox's most recent video depicts three girls who choose to construct a complex Rube Goldberg mechanism instead of dressing up as princesses. The video was set to the Beastie Boys' song "Girls" with modified lyrics. A portion of the pertinent lyrics in Beastie Boys' version of the song are: "Girls - to do the dishes / Girls - to clean up my room / Girls - to do the laundry / Girls - and in the bathroom / Girls, that's all I really want is girls." GoldieBlox's video replaced these lyrics with: "Girls - to build the spaceship / Girls - to code the new app / Girls - to grow up knowing / That they can engineer that / Girls. That's all we really need is girls."

GoldieBlox seeks Declaratory Judgment

GoldieBlox alleges in its complaint that the Beastie Boys acted first "by threaten[ing] GoldieBlox with copyright infringement." The Beastie Boys later claimed that they were "simply ask[ing] how and why [the Beastie Boys'] song 'Girls' had been used in [GoldieBlox's] ad without [the Beastie Boys'] permission."

In response to the alleged threats, GoldieBlox filed a complaint with the United States District Court for the Northern District of California seeking a declaratory judgment that its video did not infringe the copyrights in the Beastie Boys' song "Girls" and was a fair use. GoldieBlox also sought an injunction to prevent the defendants, Island Def Jam Music Group, Brooklyn Dust Music, the Beastie Boys, Sony/ATV Music Publishing Group LLC, Universal Music Publishing, Inc., Rick Rubin, and Adam Horovitz from "any efforts to enforce any copyright in Girls against the GoldieBlox Girls Parody Video, including through the use of DMCA takedown notices or otherwise."

Fair Use?

To determine whether GoldieBlox made a fair use of the Beastie Boys' song in its video, the court would consider at least the four factors contained in Section 107 of the Copyright Act: (i) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (ii) the nature of the copyrighted work; (iii) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (iv) the effect of the use upon the potential market for or value of the copyrighted work.

Most of the discussion surrounding the dispute has focused on the first fair use factor. It seems clear that despite its underlying social message, GoldieBlox's video has a commercial purpose. GoldieBlox is a toy company that uses its videos to promote and sell toys. In an open letter response to GoldieBlox's action, the surviving members of the Beastie Boys, Michael "Mike D" Diamond and Adam "Ad-Rock" Horovitz, stated that while they "were very impressed by the creativity and the message behind [the] ad . . . make no mistake, your video is an advertisement that is designed to sell a product, and long ago, we made a conscious decision not to permit our music and/or name to be used in product ads." In addition, the late Adam "MCA" Yauch's will prohibits use of his "image or name or any music or any artistic property created by me . . . for advertising purposes."

However, "the commercial or nonprofit educational purpose of a work is only one element of the first factor enquiry into its purpose and character." Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 584 (1994). The fact that the alleged infringing use is of a commercial character does not in itself prevent a fair use finding, nor is the use's commercial nature dispositive as to the first factor. Id. at 584-85.

Rather, "the central purpose of this investigation is to see . . . whether the new work merely 'supersede[s] the objects' of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is 'transformative.' Although such transformative use is not absolutely necessary for a finding of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine's guarantee of breathing space within the confines of copyright, and the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use." Id. at 579.

GoldieBlox's main argument in support of its fair use claim is that its video is a parody. The Supreme Court has recognized a distinction between parody and satire, and this distinction would likely weigh heavily in a court's decision as to whether or not GoldieBlox's video is a fair use. A parody, for purposes of copyright law, is "the use of some portion of a work in order to 'hold it up to ridicule,' or otherwise comment or shed light on it." Henley v. DeVore, 733 F.Supp.2d 1144, 1151 (C.D. Cal. 2010). Whereas the copyrighted work is the target in a parody, the copyrighted work is merely a vehicle to poke fun at another target in a satire. Dr. Seuss Enters. v. Penguin Books USA, Inc., 109 F.3d 1394, 1400 (9th Cir. 1997). The Supreme Court has recognized that parody has a stronger claim to fair use than satire. "If . . . the commentary has no critical bearing on the substance or style of the original composition, which the alleged infringer merely uses to get attention or to avoid the drudgery in working up something fresh, the claim to fairness in borrowing from another's work diminishes accordingly (if it does not vanish), and other factors, like the extent of its commerciality, loom larger. Parody needs to mimic an original to make its point, and so has some claim to use the creation of its victim's (or collective victims') imagination, whereas satire can stand on its own two feet and so requires justification for the very act of borrowing." Campbell, 510 U.S. at 580-81. However, the Supreme Court also stated that: "the use . . . of a copyrighted work to advertise a product, even in a parody, will be entitled to less indulgence under the first factor of the fair use enquiry than the sale of a parody for its own sake . . ." Id. at 585.

GoldieBlox argues that its video is a parody, "with specific goals to make fun of the Beastie Boys song, and to further the company's goal to break down gender stereotypes and to encourage young girls to engage in activities that challenge their intellect, particularly in the fields of science, technology, engineering and math." According to GoldieBlox, in "Girls'" lyrics, "girls are limited (at best) to household chores, and are presented as useful only to the extent they fulfill the wishes of the male singers." GoldieBlox claims that its video "takes direct aim at [Beastie Boys'] song both visually and with a revised set of lyrics celebrating the many capabilities of girls."

Most Recent Developments:

On November 27th, GoldieBlox removed the original version of its video that utilized the Beasties Boys' song with modified lyrics from its website. The company replaced the video with one with similar music, but no lyrics. GoldieBlox also issued a statement offering to withdraw its complaint if the Beastie Boys' lawyers made no further threats against the company. However, GoldieBlox reiterated that it still believed that the video was a parody and a fair use. As of this writing, the Beastie Boys have yet to issue a response. However, at least one commentator is speculating that the Beastie Boys will request a sincere apology and a charitable donation. Some have speculated that GoldieBlox only filed the complaint in order to bring attention to its company for the holiday shopping season. Stay tuned, as this situation is clearly still developing.

December 3, 2013

Judge Ronald M. Whyte Issues a Ruling in San Jose v. MLB Lawsuit

By Benjamin Clack

A decision has already been issued in San Jose's case against Major League Baseball (MLB), less than four months after the lawsuit was filed. In June, the city of San Jose asserted federal and state antitrust law and tort claims against MLB. This was relating to MLB's failure to approve the proposed relocation of the Oakland Athletics. Thereafter, MLB moved to dismiss the suit citing to its long standing exemption from antitrust law. Judge Ronald M. Whyte issued a decision in this case last week.

Primarily focusing on the antitrust issue, Judge Whyte's opinion granted MLB's motion to dismiss in part, but also denied it in part. Specifically, although Judge Whyte was quick to criticize baseball's unique antitrust immunity, he concluded that the exemption ultimately precluded San Jose's claims under the Sherman Act. Following a thorough review of the applicable case law, Whyte adopted a broad view of the baseball exemption, concluding that it protected the business of baseball, which includes franchise relocation issues from antitrust law. In the process, he rejected San Jose's claim that the exemption only applied to labor disputes.

Judge Whyte then held that San Jose's state antitrust and unfair competition claims also should be dismissed because the Supreme Court effectively preempted the application of such to professional baseball in its 1972 decision Flood v. Kuhn 407 U.S. 258 (1972). However, Whyte did conclude that San Jose had sufficiently pled its tortious interference claim under state law, insofar as MLB's delay in resolving the proposed relocation had, in and of itself, arguably harmed the city aside from any antitrust concerns. However, the opinion was clear to note that the ultimate decision of whether to allow the Athletics to move was still MLB's alone. It also stated that San Jose could only pursue damages arising from MLB's delay in resolving the dispute, and not the potential rejection of the relocation itself.

Interestingly, despite deciding the merits of the substantive legal claims, Judge Whyte opted not to resolve the issue of whether San Jose lacked standing to pursue the case. Although one would typically expect a court to determine whether standing exists before ruling on the merits of the underlying case, Judge Whyte instead concluded that the city could potentially possess standing under Section 16 of the Clayton Act. However, he felt that he did not have to decide the issue at the current time, in light of his ruling on the antitrust exemption issue.

Consequently, although San Jose can proceed with one of the tort claims in its suit, Judge Whyte's decision is nevertheless a big win for MLB. The most serious claims in the case were dismissed pursuant to the sport's antitrust exemption, and the lone remaining claim can only result in a damages award, and not a court order mandating that the Athletics be allowed to move to San Jose.

Although San Jose would like to seek an immediate, interlocutory appeal of the ruling, Judge Whyte failed to certify the antitrust issues for an immediate, interlocutory appeal in his decision. Therefore, under 28 U.S.C. 1292(b), San Jose is currently unable to appeal the decision immediately to the Ninth Circuit.

The mere fact that many believe that baseball's antitrust exemption should be overturned would not constitute a "substantial ground for difference of opinion," and therefore would not warrant an immediate, interlocutory appeal under 28 U.S.C. 1292(b). Even if Judge Whyte were to believe otherwise and certify the appeal, the Ninth Circuit would still have to agree to take the case in order for it to be appealed immediately under 1292(b). Therefore, unless Judge Whyte were to decline to exercise his jurisdiction over the remaining tortious interference claim, and thus enter a final judgment in the case, San Jose may very well be unable to pursue an appeal on the antitrust exemption issue until the conclusion of a trial on the tort claim.

Meanwhile, in addition to the continued threat to baseball's antitrust exemption, San Jose's remaining tort law claim could also give the city some leverage over MLB as the case moves forward. MLB would undoubtedly prefer not to proceed with discovery in the case in order to avoid publicly airing the details of its internal deliberation process. Therefore, the tort claim could further help encourage MLB to resolve the Athletics' situation.

All in all, though, MLB certainly has to be happy with Judge Whyte's decision.

Thus, San Jose appears to have a difficult decision to make in the case. In order to pursue an immediate appeal on the antitrust issue, the city could presumably request that Judge Whyte dismiss the remaining tort law claim and issue a final judgment on the antitrust-related issues, but in the process temporarily forgo the opportunity to pursue discovery against MLB. Alternatively, the city could press the tortious interference claim through to trial, but that claim would not result in an order forcing MLB to approve the Athletics' relocation, and would require San Jose to indefinitely postpone its appeal on the antitrust exemption issue. In hindsight, San Jose may thus wish that it had requested a preliminary injunction in the case. If it had, and Judge Whyte declined to issue such an order, the city could then have immediately appealed under 28 U.S.C. 1292(a).

San Jose v. MLB: Judge splits decision on claims over A's South Bay plans

San Jose v. MLB Case No. C-13-02787 RMW

Jimmy Graham and The Franchise Tag

By Matthew Luchs

Under the current National Football League (NFL) Collective Bargaining Agreement (CBA), a franchise tag is defined as a contractual tool that allows a team to keep a pending unrestricted free agent, on its roster for an additional year with a guaranteed contract. The value of the contract is determined by "summing the amounts of the Franchise Tags for players at that position for the five preceding League Years; (2) dividing the resulting amount by the sum of the Salary Caps for the five preceding League Years (using the average of the amounts of the 2009 and 2011 Salary Caps as the Salary Cap amount for the 2010 League Year); and (3) multiplying the resulting percentage by the Salary Cap for the upcoming League Year." (CBA, Article 10, Section 1-2) This provision allows for small market teams to keep players who often desire to move to big city franchises that pay more, for an additional year.

Tight end Jimmy Graham, who at 6'7" and 265 lbs., also totes a 4.53 second 40-yard dash time, is a force with which to be reckoned on the football field and is closing in on the last year of his rookie contract. Graham is on pace to set records for the most receiving yards, touchdowns, and receptions by a tight end in a single season this year in the NFL. It is likely that the New Orleans Saints will use its franchise tag on him, even if a deal cannot be reached by this February, before he hits the open market. Graham may attempt to be categorized as a wide receiver for franchise tag purposes because wide receivers have a higher franchise tag salary than tight ends. "If the 2014 salary cap is around $127 million, then the tight end tag would be $6.7 million, while the receiver tag would be $11.6 million. That's a staggering difference on a one-year deal." (http://www.cbssports.com/nfl/writer/jason-la-canfora/24036481/what-happens-if-the-saints-decide-to-franchise-jimmy-graham)

Although Graham is registered by the New Orleans Saints as a tight end, it has often been a point of debate on whether he truly fits that designation. Recently, an NFL analyst stated the following, "Though he plays tight end, Graham is at the vanguard of the growing trend of spread formations with tight ends in the slot or out wide, and not used nearly as much in the traditional role of engaging as a blocker at the point of attack." (http://www.cbssports.com/nfl/writer/jason-la-canfora/24036481/what-happens-if-the-saints-decide-to-franchise-jimmy-graham) The National Football League Player Association (NFLPA) sources indicate that consideration for player positions are determined by positional distinction in the playbook; such as how often a player blocks and is involved in the run game, and what percentage of the time he lines up outside the hash marks. (http://www.sportingcharts.com/dictionary/nfl/franchise-tag.aspx)

This is not the first time that this issue has been brought before the NFL. In the past, both Terrell Suggs of the Baltimore Ravens in 2009 and Jared Cook of the Tennessee Titans in 2012 had similar issues with position designations. Cook argued that he should be entitled to the franchise tag of a wide receiver, because he spent more than half of his offensive plays lined up in that position. Cook believed that the likelihood of success that the NFL characterized him as a tight end was small. Therefore, Jared Cook and the Tennessee Titans never reached an agreement, and the franchise tag was never applied to him as a tight end. Cook elected to test free agency before any further agreements could be made. The St. Louis Rams subsequently signed him this year. Tennessee was not willing to offer Cook, beyond the lower salary of a franchise tagged tight end, the type of contract that a franchise tag of a wide receiver would guarantee him. His argument was never officially brought before the NFL.

Similarly, Suggs was a linebacker for the Ravens, but argued that since he played more time at the defensive end position, he should get the franchise tag of a defensive end. (http://sports.espn.go.com/nfl/news/story?id=3394771) Suggs filed a grievance asking a Special Master to determine his true position, but the Ravens and Suggs agreed separately that he would be paid half the difference of what a linebacker and a defensive end made as a franchise tag player. The NFL never officially ruled on the matter as well. However, the NFL has made it very clear that the Suggs case is in no way a precedent for future issues that may arise for player definitions and the franchise tag application. (http://www.cbssports.com/nfl/writer/jason-la-canfora/24036481/what-happens-if-the-saints-decide-to-franchise-jimmy-graham)

Sean Peyton, the head coach of the New Orleans Saints, has indicated that the Saints are not going to change the way they are using Jimmy Graham to help get around the player designation issue. Instead, Peyton stated that he is "going to do whatever we have to do to win games, whether that's line [Graham] up wide, in the slot, three yards off the tackle, five yards off the tackle or right next to the tackle..." (http://sports.yahoo.com/news/nfl--potential-contract-ramifications-will-have-no-impact-on-how-saints-use-jimmy-graham-013308568.html).

At this current moment, six weeks into the 2013-2014 NFL season, it is difficult to tell whether this issue will need to be brought before the NFL. Maybe the Saints will be able to work out a contract extension to the liking of Graham. Perhaps there will be a settlement between the two parties, similar to the Ravens and Suggs that would allow the NFL to abstain from answering this perplexing question. It is unlikely that the Saints will let Graham walk like the Titans did with Cook. Come February, however, it should be clearer on whether the NFL will have to take a stance on Graham's situation and similar issues.

December 5, 2013

Dominican Court Throws MLB a Curve

By Daniel R. Secatore

A recent ruling by the Dominican Republic's highest court has put the citizenship status of hundreds of thousands of people of currently living in the Dominican Republic in a state of legal limbo. The United Nations and humanitarian organizations across the world have condemned the ruling and warned that it could render a significant population of the Dominican Republic stateless. Reverberations from this ruling could potentially be felt throughout the Americas, and in the world of sports, as it threatens to complicate the long relationship between Major League Baseball (MLB) and the Dominican Republic, and put yet another obstacle before the dreams of thousands of Dominican baseball players, for whom the national pastime provides a path out of poverty.

On September 23rd, the Dominican Supreme Court of Justice ruled that anyone who was born after 1929 and who does not have at least one parent of Dominican ethnicity is not entitled to Dominican citizenship, regardless of where he or she lives or was born. Reuters estimates that as many as 250,000 people presently living in the Dominican Republic fit this classification. http://www.reuters.com/article/2013/10/12/us-dominicanrepublic-citizenship-idUSBRE99B01Z20131012 Most of these people are of Haitian descent and many were born in the Dominican Republic and have known no other home. The New York Times reports that the Dominican government is working on a plan to grant these people temporary residence permits, but without citizenship, they may still be unable to receive many government benefits including public health insurance, voting rights, and -- most importantly for hopeful ballplayers and MLB -- passports. http://www.nytimes.com/2013/10/24/world/americas/dominicans-of-haitian-descent-cast-into-legal-limbo-by-court.html?_r=0

Eighty-nine players born in the Dominican Republic were on MLB rosters on Opening Day of the 2013 season and, according to Alicia Jessop of Forbes, Dominicans make up an estimated one-fourth of all minor league rosters (approximately 1,800 players). http://www.forbes.com/sites/aliciajessop/2013/03/19/the-secrets-behind-the-dominican-republics-success-in-the-world-baseball-classic-and-mlb/ The vast majority of these players enter the United States on nonimmigrant temporary work visas; however, federal law also requires possession of a valid passport for admission into the United States on such visas. (8 USCA § 1182(a)(7)(B)) Thus, if a player is rendered stateless by this ruling, he may not be able to enter the United States to play professional baseball, regardless of his talent. This could impact not only young players who are trying to break into the game for the first time, but also established MLB players who returned to the Dominican Republic after the 2013 season and now lack valid documentation.

Faced with this possible disruption, MLB must be proactive in using the law to protect its stateless players.

There are a number of waivers to the requirement that non-immigrant aliens possess valid passports in order to obtain entry visas. Few of these avenues will be open to stateless players, however. Many of the waivers, for instance, apply only in very specific circumstances, such as the waiver for a landed immigrant in Canada who is traveling to the United States only in emergent circumstances. (22 CFR 41.3(f))

A review of the law does show that a few of the waiver provisions could potentially apply to stateless players.

First, the passport requirement may be waived by the joint action of Attorney General and Secretary of State on the basis of an "unforeseen emergency in individual cases." (8 U.S.C.A. § 1182(d)(4)) The statute does not define "unforeseen emergency", so it is unclear on the face as to whether people who find themselves suddenly stateless are helped by this provision. The Customs and Border Patrol Inspector's Field Manual, however, elaborates on what "unforeseen emergency" may mean, defining it very narrowly such that it only covers things like medical emergencies, natural disasters, and passport theft. (Inspector's Field Manual § 17.5(d)(3)) Thus, while on first glance it appears that this statute may apply to stateless players, it is unlikely to provide relief as it is currently interpreted.

A more promising option is found in a statute granting the State Department discretion to authorize individual consular offices to waive the documentary requirements in the event of "unusual circumstances" prevailing within the consular district. (22 CFR 41.3(g)) Though there is little caselaw elaborating this statute, theoretically it could apply to the stateless players. As this avenue requires discretionary action on the part of the State Department, it is incumbent upon MLB and its lobbying arm in Washington D.C. to be proactive in protecting its Dominican players and the interests of the teams for which they play. The U.S. government may be weary of appearing to show favor to athletes over other categories of nonimmigrant aliens, however MLB may be faced with few other viable options when spring training resumes in February.

As the Dominican government is still reacting to this ruling, it is not yet clear exactly what impact it will have on MLB, the thousands of Dominicans already under contract with MLB teams, and the countless younger Dominican players who are still dreaming of playing in America. Dominican baseball players, including many of Haitian descent, have been a blessing to baseball, as they have come to excel in the game in recent years. MLB must do everything it can to ensure that they are given the chance to continue to do so for years to come.

December 6, 2013

Week in Review

By Martha Nimmer

It's a Bird! It's a Plane! It's...an Invalid Copyright Termination!

A decade long legal battle may have finally come to an end. Last week, the Ninth Circuit Court of Appeals affirmed a district court decision that held a copyright termination claim filed by the heirs of Superman co-creator Joseph Shuster to be invalid.

In 2003, defendant Mark Peary, acting as executor of the estate of Joseph Shuster, filed a copyright termination notice, seeking to reclaim the copyrights to Superman that Shuster had assigned to plaintiff DC Comics in 1938. DC Comics, in turn, sought a declaratory judgment that the notice of termination was invalid based on a 1992 agreement with Shuster's siblings, which gave them "pensions for life in exchange for a revocation of the 1938 assignment of copyrights to DC and a re-grant to DC of all of Shuster's copyrights in Superman." In other words, the plaintiffs argued that "because the 1976 and 1998 statutes permitting the filing of copyright termination notices permit only the termination of assignments 'executed before January 1, 1978,' 17 U.S.C. § 304(c), (d) . . . [the] 1992 Agreement forecloses the estate's 2003 notice of termination, in that it leaves no pre-1978 assignment to terminate (instead creating a new assignment effective 1992)." The district court judge agreed, granting DC Comics partial summary judgment on the company's claim for declaratory relief. Just last month, the Ninth Circuit affirmed, holding that the 1992 agreement between DC and Shuster's siblings formed "a new, 1992 assignment of works to DC -- an assignment unaffected by the 2003 notice of termination."

So, at least for now, it looks as if Superman's fate rests safely in the hands of DC Comics.


Morel Prevails

Late last month, a federal jury awarded photojournalist Daniel Morel a $1.2 million verdict stemming from the unauthorized use of his photos by Agence France-Presse (AFP) and Getty Images. Morel, a native of Haiti, took the photographs of Haitian earthquake survivors following the devastating 2010 earthquake that claimed over 250,000 lives in the small Caribbean nation; Morel later posted the photos to his Twitter account, and an editor at Agence France-Presse eventually discovered Morel's photos through another Twitter user's account. Agence France-Presse used these photos without Morel's permission, and provided them to Getty Images. Getty Images then "widely disseminated" the gripping photos to various clients, including several television networks and the Washington Post. Some of these clients, among them the Washington Post, CBS, ABC and CNN, settled earlier with the photographer for undisclosed amounts.

U.S. District Judge Alison Nathan, who presided over the trial, ruled in January that the two companies were liable for infringement; the jury trial was held only to determine the amount of damages due to Morel. The $1.2 million verdict was the maximum statutory penalty available under the Copyright Act. AFP had originally asked for the award to be set at $120,000. Morel was also awarded damages of $400,000 pursuant to the Digital Millennium Copyright Act.

The case is Agence France-Presse v. Morel, U.S. District Court for the Southern District of New York, No. 10-02730.


A Hell of a Legal Strategy

Despite the group's outlaw image, the Hells Angels Motorcycle Club has become increasingly litigious. No, the motorcycle group is not suing the police department for wrongful arrest or other criminal law-related activities. Actually, the group has taken an interest in the civil side of the judicial system, frequently turning to the courts to protect the club's intellectual property. In less than a decade, the organization has sued big name companies such as Toys "R" Us, Alexander McQueen, Amazon, Saks, Zappos, Walt Disney and Marvel Comics, alleging infringement on clothing, jewelry, posters, and even yo yos. The "Angels" have also challenged Internet domain name registrations and "a Hollywood movie -- all for borrowing the motorcycle club's name and insignias," according to The New York Times. Notably, one of the group's earliest intellectual property suits was launched in 1992 against Marvel Comics, which had named a comic book and its lead character "Hell's Angel." Marvel later agreed to change the name of the comic and the protagonist to "Dark Angel," and agreed to donate $35,000 to a children's charity, according to The New York Times.

Although sitting at the plaintiff's table in a federal courtroom is perhaps not where the Hells Angels would like to be imagined, over the years the group has capitalized on its tough guy image, eventually "becoming a recognizable marque and promoting itself on items as varied as T-shirts, coffee mugs and women's yoga pants. Sonny Barger, 75, the longtime Hells Angels leader, at times has offered his own online bazaar of goods that bear his name: sunglasses, bottles of cabernet sauvignon and books he has written. Not surprisingly, as the brand's popularity has grown, so has the desire to copy it and provide cheap knockoffs. More surprisingly, however, is the group's willingness to turn to "the same legal system they deride as part of the machinery that has unfairly defined them as criminals." In fact, the group has become more deliberate in protecting its image from misuse, even in light of crackdowns by law enforcement officials who say the Hells Angels "represent a criminal gang on six continents, trafficking drugs and guns and engaging in money laundering, extortion and mortgage fraud." Notably, the Hells Angels often settle their suits on favorable terms, obtaining concessions "from the accused parties by getting them to stop using the trademarks, destroy and recall merchandise and, in a few instances, pay some damages." Whether to credit effective legal strategizing or the group's macho leather vests for those victories, however, is up to you.


A Long Journey Back to Germany

After spending nearly seven decades in the United States, a 3,000-year old gold Assyrian tablet is heading back to a Berlin museum, a Nassau County Surrogate Court's judge announced this week. The tablet, said to be smaller than a credit card and weighing only a third of an ounce, is known as the Ishtar Temple Tablet. It was allegedly stolen during World War II from a German museum, and later owned by a Holocaust survivor in Europe, "who may have gotten it in a trade with Russian soldiers for some cigarettes." The Holocaust survivor, Riven Flamenbaum, took the tablet to New York with him when he immigrated to the United States after war. His family did not know of the relic's existence until 2003, however, when Flamenbaum died. Attorney Raymond Dowd, who represents the Vorderasiatisches Museum in Berlin, said Flamenbaum's son, Israel, "made inquiries after its discovery about the tablet's true ownership." That investigation eventually developed, however, into the court battle that decided the tablet's fate last week.

Counsel for the Flamenbaums argued that the tablet was a spoil of war, saying that the Soviet government, upon invading Germany, gained title to the museum's property as a "spoil of war," and then later transferred that title to Flamenbaum. This argument was rejected, however, by the New York State Court of Appeals. The court stated that there was "no proof" that the Soviet Union ever possessed the tablet, adding that that it was U.S. policy during World War II to forbid the pillaging of cultural artifacts.

The tablet's ancient history can be traced to prsent day Iraq. German archaeologists excavated the gold tablet around a century ago from the Ishtar Temple in what is now northern Iraq. The tablet went on display in 1934, but disappeared around 1945. According to court documents, the Ishtar Temple Tablet dates to 1243 to 1207 B.C. The gold tablet is said to have been placed in the foundation of the temple of the fertility goddess -- the 21 lines of script on the tablet call on those who find the temple "to honor the king's name."


Grand Theft Image

Lindsay Lohan is sick of being the defendant, so it looks as if she will try her hand at playing the plaintiff. According to media reports, the troubled star plans to sue Rockstar Games, the maker of the ultra-popular video game series Grand Theft Auto, over the alleged unauthorized use of her image.

A story posted last week on TMZ reports that the actress' attorneys are "currently crafting a lawsuit - demanding Rockstar Games pay some serious money for using Lindsay's image in the game." The TMZ report suggests that Lohan's claim arises from an illustrated promotional poster of a woman in a red bikini, holding a mobile phone and making the "peace" sign, in addition to a "Random Event mission" in the video game where "a Lindsay Lohan look-alike asks the player to take her home and escape the paparazzi."

Lohan is the second celebrity to be taking legal action against Rockstar Games over Grand Theft Auto V. Shortly after the game's release in October, rapper Daz Dillinger sued Rockstar over the alleged unauthorized use in the video game of two of his musical works.



A Record for Rockwell

Three paintings by famed American artist Norman Rockwell sold this week for almost $60 million, a new record for the artist. "Saying Grace," the best known of the three works, which depicts an elderly woman and a boy saying grace at a busy restaurant, sold for $46.08 million at Sotheby's. That figure was more than double the estimated "high sale price" for the work as well as more than three times higher than Rockwell's prior record setting sale price of $15.4 million for "Breaking Home Ties" in 2006, writes Business Insider.


Not So Hotfile

What's worse than Napster, Grokster and Limewire, and "indistinguishable" from Megaupload? Well, according to legal papers filed by the Motion Picture Association of America (MPAA), that would be cyberlocker Hotfile. Unfortunately for Hotfile, which was sued by the MPAA in February 2011, U.S. District Judge Kathleen Williams agreed with the plaintiff, stating in August that "the extent of infringement by Hotfile's users was staggering." She also ruled that the defendant was vicariously liable for the actions of its users. Fearing more bad news, Hotfile decided to settle with the MPAA instead of going to trial next Monday for a determination of damages. Maximum statutory damages for willful copyright infringement can be as high as $150,000 per work, meaning Hotfile was staring at a potential bill of about $500 million. On Tuesday, the parties announced that the MPAA will collect $80 million from Hotfile. Additionally, according to the MPAA, the court has ordered the defendant to cease operations unless it implements "copyright filtering technologies."

To avoid liability, Hotfile had originally tried to rely on the safe harbor provision of the Digital Millennium Copyright Act (DMCA). Judge Williams rejected that argument, however, stating that the defendant had failed to address piracy problems adequately, a prerequisite for claiming safe harbor protections under the DMCA. Hotfile, for instance, "had only terminated the accounts of 43 [users] before the lawsuit was filed," despite receiving 8 million notices of piracy problems associated with 5 million user accounts. "Aside from infringement notices," the judge continued, "Hotfile had no alternative method for preventing repeat infringements by its users." Judge Williams also chided Hotfile for not responding promptly to copyright infringement notices and for failing to designate and register a DMCA agent.

The settlement with Hotfile is another feather in the cap of the MPAA. Just two months ago, "Hollywood studios announced a $110 million deal with IsoHunt that resulted in the shutdown of the BitTorrent indexer."


December 10, 2013

Holiday Bonuses: The "Gift" that May Keep on Giving

By Kristine A. Sova

With wage-and-hour litigation continuing its growth, employers who provide holiday bonuses should make sure that they don't become proof of the old adage that no good deed goes unpunished by finding themselves on the receiving end of a wage claim. Wage-and-hour laws look to technical compliance, not generosity, and unbeknownst to many employers, there are circumstances when employers are required to include bonuses in the calculation of overtime wages due to non-exempt employees.

In general, the federal Fair Labor Standards Act and New York Labor Law require employers to pay all non-exempt employees overtime at a rate of time-and-a-half their regular rate of pay for all hours worked over 40 in a workweek. The "regular rate of pay" includes all compensation provided to the employee, with a few exceptions.

One of those exceptions is a holiday bonus, but only if certain criteria are met. Specifically, all of the following criteria must be met:

• The bonus must be gift, or in the nature of a gift. If the bonus is in any way measured by or dependent upon the employee's hours worked, production or efficiency, it is not a gift. A bonus will still be considered a gift even if the amounts paid to different employees or groups of employees are dependent on their base compensation and/or length of service.

• The bonus must not be "so substantial" that employees consider it part of the wages for which they work, as opposed to a gift.

• The bonus cannot be paid pursuant to contract or any other kind of agreement. If it is, the employee has a legal right to the payment and it is not in the nature of a gift.

Even if a holiday bonus is paid with such regularity that employees grow to expect it, the bonus is still properly excluded from overtime calculations so long as the above criteria are met. Further, even if a holiday bonus does not meet the criteria above, it may still be excluded from overtime calculations as a "discretionary bonus," a topic to be discussed in a future post.

December 17, 2013


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December 19, 2013

Week in Review

By Martha Nimmer

Anonymous Donor Revealed

Despite an appeal by the Hopi Nation, 24 Native American artifacts went up for auction last week in Paris. An anonymous bidder, later revealed to be the Los Angeles-based Annenberg Foundation (Foundation), paid $530,000 for the items, which the Foundation said it plans to return to the Hopi Nation in Arizona and the San Carlos Apache. Gregory Annenberg Weingarten, the Foundation's vice president and director, said that the organization had decided to intervene and acquire the artifacts following a French judge's refusal to block the sale. "These are not trophies to have on one's mantel; they are truly sacred works for the Native Americans," Weingarten added.

The artifacts consist of a collection of masks dating to the late 19th and early 20th centuries, which the Hopi Nation says were stolen from a northern Arizona reservation in the early 20th century. The Hopi had unsuccessfully argued before a French court that the items represent ancestral spirits and should not be sold. The U.S. Embassy in Paris also became involved in the controversy, requesting a delay so that tribal representatives from the Hopi and San Carlos Apache nations could travel to France to identify the artifacts and investigate whether the tribes had a claim under the 1970 UNESCO Convention on the Export and Transfer of Ownership of Cultural Property, to which both France and the U.S. are signatories. These efforts failed, however, but happily for the Hopi and San Carlos Apache, the Annenberg Foundation was able to intervene.

This is the second time this year that Native American cultural artifacts have gone on the auction block in Paris. According to NPR, "around 70 Hopi items were sold for some $1.2 million in April."


Former Star Quarterback Sues NFL

Claiming that the National Football League (NFL) deliberately concealed information about the dangerous effects of concussions and repeated hits to the head, former quarterback Craig Morton has sued the NFL in federal court in northern California. Morton's claims are similar to those alleged by more than 4,000 former professional football players, whose cases are set to be resolved following the NFL's decision in August to pay $765 million to retirees with debilitating injuries, while admitting no fault.

Morton's suit, according to The New York Times, "was born out of frustration with the proposed settlement and is a sign that some players may opt out of the settlement and continue pursuing their cases." Attorneys for the former quarterback, who played for the Giants, Cowboys and Broncos, commented that their client's concerns differ from the "P.R. concerns" of the NFL, and that a separate lawsuit would help address his issues, namely health, more adequately. Whether this legal strategy will work, however, remains unclear, but such maneuvering hints that other retired players may choose to opt out of the concussion-related settlement with the NFL.


Taxed in Tennessee

Nothing is certain but death and taxes, including the so-called jock tax.

A little discussed financial issue has now become "a lightning rod for professional athletes, lawmakers and accountants." Many states charge a tax when out of state teams visit for games. Tennessee, called out specifically in a lengthy article in The New York Times, is the only state to apply a flat rate tax to visiting athletes, meaning that a star player making $15 million a year will pay the same amount as a player earning $500,000. Unhappy with the flat rate tax, athletes argue "Tennessee disproportionately targets them as athletes, making basketball and hockey games in the state more punitive than competitive."

This system of taxation, according to The New York Times, means that some players traveling to Tennessee for games end up losing money or just breaking even: specifically, around 20% of professional basketball players "have either lost money or broken even in Memphis," according to the National Basketball Players Association. Additionally, more than a third of National Hockey League (NHL or the League) players have lost money when playing in Tennessee, according to Don Zavelo, the general counsel for the N.H.L. Players' Association. The difference for NHL players, however, is that the League pays the "jock tax" for players as part of its collective bargaining agreement.

Dave Kiefer, an attorney for the basketball players' union, calls out Tennessee's jock-tax structure for being unfair. "When you think about the fairness aspect, the athletes are being charged in a way everyone from the coaches to the general managers aren't. The fear is that if every state were to levy this tax, then they literally could lose money playing. The league would not be viable." The Tennessee jock-tax has caught the attention of some local lawmakers in the state. Jack Johnson, chairman of the Tennessee Senate's commerce committee, announced that he would restart efforts next year to repeal the law, adding, "it's a ridiculously high tax and not equitably applied."

Revenue from the Tennessee jock tax amounts to $3.6 million a year, but notably, this money does not go to the state's coffers. Instead, the funds go directly to the stadiums. An executive from the Memphis Grizzlies defended this practice, adding that the money generated by the jock tax helped the FedEx Forum draw performers like Paul McCartney and the Eagles. "Those are concerts we wouldn't have gotten without using the proceeds," said Jason Wexler, the Grizzlies' chief operating officer.

Other states have also faced criticism surrounding their systems of visiting athlete taxation. Two cases pending before Ohio courts ask "whether a city or state can tax an athlete who does not travel there, and what formula it should use to determine how many days a player has worked."


Going Home

Following a complicated legal battle in the United States between auction house Sotheby's and the U.S. government, the Cambodian government announced on Monday that Sotheby's will return a 10th century Khmer statue allegedly looted 41 years ago during the Cambodian civil war. The statue of the of the warrior, said to be worth up to $3 million, will return to the southeast Asian kingdom within 90 days, per an agreement signed last week by Sotheby's, its Belgian client, and U.S. officials.

The legal dispute began in early 2011 when Cambodia "sent a letter through UNESCO claiming ownership of the work." In the letter, Cambodian officials stated that "the sandstone statue, known as the Duryodhana, was looted in the 1970s from a temple in Koh Ker, 80 kilometres (50 miles) northeast of the famed Angkor Wat complex." Sotheby's stopped the sale of the statute, planned for March of that year. In April of last year, the United States filed a civil complaint against Sotheby's, blocking the sale of the prized artifact.

This decision to return the Khmer statue follows the return in June of two other Khmer 10th century statues, known as the "Kneeling Attendants." These pieces were displayed for 20 years at the Metropolitan Museum of Art, and were also taken from Cambodia during its civil war, when looting of ancient and cultural artifacts was widespread throughout the country.


No Love Lost

Claiming trademark infringement involving the title of one of his most popular songs, the musical estate of reggae star Bob Marley has sued a Louisiana restaurant chain. In a complaint filed in federal court in Massachusetts, Fifty-Six Hope Road Music Ltd., which owns the "One Love" trademark in the United States, accused Raising Cane's USA LLC of infringing the "One Love" trademark when the company used the term "One Love" on its menus and online to promote the sale of Raising Cane chicken fingers. Raising Cane's is also alleged to have used the mark "One Love" on clothing. Marley's estate argues that the restaurant chain "is deliberately using 'Cane's One Love' to capitalize on the fame of Marley and his song," adding that the Cane's One Love mark is confusingly similar to the one associated with the deceased singer, and thus likely to confuse the public.

The plaintiff has asked the court to bar the chain's use of "Cane's One Love," cancel the "Cane's One Love" trademarks, and award money damages, attorney fees and litigation costs.

Bob Marley and the Wailers released their song "One Love" in 1977. The widely popular song has been licensed for use by the Jamaican Tourist Board; "One Love" is the "official theme song" of Jamaican tourism and figures prominently in commercials promoting travel to the Caribbean island.


Auctions Anonymous

The New York Court of Appeals has ruled that sellers at auctions may remain anonymous. A lower court decision in October 2012 would have required the state's burgeoning auction industry to change its longstanding practice of keeping sellers' names private.

The lower court's ruling decided a case involving the sale of a 19th century silver and enamel box from Russia. The box, sold by a Chester, New York auctioneer, "depicts aristocrats feasting on a roasted swan." When the winning bidder refused to go through with the sale, the auctioneer successfully sued for payment. In 2012, however, the appellate court overturned that decision when the buyer "challenged the transaction because the post-sale documentation had not identified the seller." The four judge panel in the Appellate Division held that for an auction sale to become binding, state law required that buyers be permitted to learn the names of sellers in post-auction paperwork. In reversing the lower court, however, the New York Court of Appeals ruled unanimously "that the auctioneer had provided enough information for the sale agreement to stand, even without the seller's name. It was enough for the auctioneer to be named as the seller's agent, the court found."

Some art law experts predicted that the Appellate Division's decision would have vast repercussions for how the auction business is conducted in the state. According to The New York Times, "most sellers in the New York auction market prefer to remain anonymous, and auction catalogs typically reveal little more than that a work is from a 'private collection.'" In a society where personal privacy seems to be disappearing, the anonymity afforded by the auction business remains highly desired.

The NFL's Brain Trust

Earlier this week, the National Institutes of Health (NIH) announced its plans for allocating part of a $30 million grant from the National Football League (NFL). The NFL, which has faced staunch criticism for the way it has previously handled player concussions, has "committed tens of millions of dollars to researchers studying concussions and the cognitive disorders linked to them."

The NIH said that it would give $12 million from its grant to two groups working to identify chronic traumatic encephalopathy, or C.T.E., in living patients. Currently, the only way to detect CTE is through an autopsy. The NIH will also award $12 million to researchers at Boston University School of Medicine--which has emerged as a leader in diagnosing C.T.E. in deceased players -- and doctors at New York's Mount Sinai Hospital, who have been working with researchers at the University of Washington to examine the brain tissue of thousands of individuals. Additionally, a total of $2 million will be allocated by the NIH to six institutions focused on concussions in young athletes.

The study of concussions and repeated hits to the heads of young athletes has received increased attention in recent years. The NFL has undertaken many efforts aimed at reassuring parents that football is safe for children. To that end, writes The New York Times, the NIH is funding several new studies aimed at identifying concussions and the effects of head hits on young players.


CTE Detected in Former MLB Player

Former Cincinnati Reds player Ryan Freel has become the first professional baseball player diagnosed with the degenerative brain disease chronic traumatic encephalopathy (CTE). Freel, who committed suicide in December 2012, was suffering from Stage II CTE at the time of his death, according to a report from the Boston University Center for the Study of Traumatic Encephalopathy and Sports Legacy Institute. CTE has been detected in the brains of former NFL and NHL players, but Freel would be the first MLB player diagnosed with the disorder, reported Fox Sports.


December 21, 2013

Daniel v. Goliath: Photographer Daniel Morel Awarded $1.2 Million for Copyright Infringement from Photo Agency Giants AFP and Getty

By Barry Werbin and Laura Tam, Herrick, Feinstein LLP

On November 22, 2013, a federal jury ordered Agence France-Presse (AFP) and Getty Images (Getty) to pay a whopping $1.2 million to Daniel Morel (Morel), a freelance photojournalist, for their unauthorized use and distribution of eight photographs Morel had posted to Twitter. The jury determined that AFP and Getty had willfully violated the Copyright Act and the Digital Millennium Copyright Act (DMCA) when they widely disseminated Morel's photographs of the devastation of the 2010 Haiti earthquake without his permission. Morel asserted that AFP and Getty had infringed on a number of exclusive rights granted by 17 U.S.C. § 106, including the rights of reproduction, public display and distribution.

On January, 12, 2010, hours after a devastating earthquake struck Haiti, Morel took photographs of the aftermath and posted them to Twitter through a TwitPic account. The photographs were reposted by Lisandra Suero (Suero) and were picked up by the AFP and uploaded to its database. The images, however, were wrongly credited to Suero. The AFP then transmitted the photos to Getty, since the stock agencies had a license agreement with reciprocal rights to license each other's images. From there, the photographs were published on Getty's website, and numerous clients, including The Washington Post, licensed and published the images. Soon thereafter, the agencies realized their mistake, issuing kill notices for Morel's photographs and alerting subscribers of the copyright issue. While Morel's images from the AFP's database were removed after the issuance of the kill notice, Morel's photographs that had been attributed to Suero remained on Getty's website until February 2, 2010, when they were finally removed.

The AFP initiated legal action by filing a lawsuit against Morel in March 2010, seeking a declaration that it had not infringed Morel's copyrights in the images. In response, Morel filed counterclaims against AFP, Getty and The Washington Post for willful infringement.

On January 14, 2013, the Southern District of New York granted Morel's motion for summary judgment, finding that AFP, Getty and The Washington Post were liable for direct copyright infringement. The Washington Post later settled with Morel for an undisclosed amount. The court rejected the stock agencies' affirmative defenses, including that (1) by posting the photos on Twitter, Morel had granted AFP a license to use his images, (2) Getty was entitled to the benefit of the DMCA safe harbor provision, and (3) Getty had not engaged in volitional conduct to impose liability.

First, the court determined that the Terms of Service of Twitter or TwitPic did not grant the AFP a license to sell and distribute Morel's photographs. Pointing to specific language in the Terms of Service, which provided that "[y]ou retain your rights to any Content you submit, post or display" and "what's yours is yours -- you own your own content," the court determined that the AFP was not a third party beneficiary to the Terms of Service and therefore not insulated from liability.

Second, the court rejected Getty's argument that it was protected by 17 U.S.C. § 512(c)(1), the safe harbor provision of the DMCA for service providers. The court noted that "an entity that is directly licensing copyrighted material online is not a 'service provider.'"

Finally, the court also rejected Getty's argument that it had not taken affirmative acts to violate Morel's copyrights. The court stated that there were genuine disputes of fact on this issue, since a jury could infer that Getty took volitional acts to distribute Morel's photographs in violation of his copyrights, including entering into a license agreement with AFP, setting a price for the photographs, and maintaining the website on which the images were displayed. After the court granted summary judgment to Morel, the case proceeded to trial on the sole determination of damages.

The jury awarded Morel $1.2 million, $150,000 for each of the eight photographs that were infringed, which is the maximum amount of statutory damages available under 17 U.S.C. § 504(c)(2). The jury also determined that AFP and Getty had violated the DMCA a total of 16 times under 17 U.S.C. §§ 1202(a) and 1202(b), and awarded Morel $20,000 in total for the 16 violations; however, that DMCA award is under dispute because the DMCA's statutory damages provisions provide for a minimum award of $2,500 per violation. Morel's attorneys thus argued in a letter to the court in early December 2013 that the minimum DMCA statutory award for Morel must be $40,000.

The landmark decision is one of the first cases to address the commercial use of content posted by individuals through social media, but it certainly won't be the last. A copy of the January 14, 2013 decision is available here: http://www.scribd.com/doc/120501947/AFP-v-Morel-10-Civ-02730-AJN-S-D-N-Y-Jan-14-2013.

About December 2013

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

November 2013 is the previous archive.

January 2014 is the next archive.

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