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June 2014 Archives

June 5, 2014

How to Address Sick Leave Abuse

By Kristine Sova

It is summertime, and that means an influx of employees calling in sick on Mondays and Fridays when they're really not sick. Summertime sick time is one example of sick leave abuse, which often translates into administrative headaches and lost dollars for employers.

How can an employer remedy sick leave abuse, whether it's during the summer or throughout the rest of the year?

While it's important to make sure that your organization has a lawful policy and procedure to address sick leave abuse, in many cases, remedying sick leave abuse requires more than simply enforcing an HR policy. Here are some additional tips.

Determine if Abuse Really Exists, and Then Hone in on the Problem

The first step is to determine if sick leave abuse really exists by tracking and evaluating absences, including late arrivals and early departures, possibly in conjunction with an employee survey. Do any trends reveal themselves - such as a higher absenteeism rate in a particular department or under a particular supervisor?

The goal here is to find out why employees are really taking off from work under the guise of being sick. In some cases, employees may need more flexibility or more time off, but in some cases, a department or team may really be burnt out or suffering from low morale because of a problem supervisor.

Craft Solutions to Address Core Issues

Once you've identified the root of any sick leave abuse problems, any solutions under consideration for implementation should address the core issues.

For example, if you find that only workers with limited child care options are taking extra sick leave, the appropriate solution may be to implement an emergency child care or on-site child care program, rather than modify your organization's sick leave policy.

Or, you may discover that workers generally need more flexibility with their time off from work, in which case, use of a single paid time off (PTO) bank - instead of segregated sick, personal and vacation days - may be the appropriate solution. A single PTO bank allows employees more flexibility in how they use their time off, resulting in fewer unplanned absences.

However, it may turn out that you simply have one or more problem employee(s) on your hands. In that case, counseling or disciplinary action may be the way to go, provided such is lawful.

These are only three examples of how sick leave abuse can be managed, but they illustrate that, as is often the case with workplace issues, the solutions are as varied as the sources of the problems. and usually require facts-and-circumstances inquiries. If you have a sick leave abuse problem in your workplace that you would like to address, you may want to consult with an employment attorney.

June 6, 2014

Week in Review

By Martha Nimmer

Time for a Change

After 73 years of use, it appears that the regulatory agreements that cover music licensing and royalty payments for public performances will be getting a (long over-due) review. The Department of Justice (DOJ) announced that it would soon begin its review of the regulations that govern ASCAP and BMI, the two performing rights organizations that license the public performance of music. Under the Copyright Act, public performances can be over the radio, in a bar, online, in a store dressing room or in a doctor's office waiting room, to name a few examples. The Justice Department's review, according to The New York Times, "calls for a 60-day period for public comments about the consent decrees." The DOJ may then recommend changes to the regulation, which would be reviewed by judges in the U.S. District Court for the Southern District of New York.

Under the consent decrees, issued in 1941 following antitrust investigations, ASCAP and BMI "cannot refuse licenses to music outlets that request them, and their agreements are subject to approval by two federal judges." This licensing structure has been in place for decades, but has come under fire recently in light of the dramatic technological advances of the past 10 years. Major music publishers are also unhappy with the licensing process; publishers, such as Sony/ATV and Universal Music Publishing, have even threatened to pull their song catalogs from ASCAP and BMI, a decision that would seriously weaken the two performing rights groups, while complicating the licensing process for everyday consumers.

For their part, ASCAP and BMI are expected to ask the DOJ for greater "flexibility" in licensing, and for the arduous rate-court process to be replaced by arbitration proceedings. In comments to the United States Copyright Office, ASCAP wrote, "the antiquated Ascap and BMI consent decrees must be updated, if not eliminated."


It's In The Bag

Fashion designer Balenciaga has sued footwear company Steve Madden for trademark infringement in U.S. District Court in Manhattan, claiming that the shoe company copied major elements from the couture line's popular "motorcycle" handbag. The highly sought-after purse from Balenciaga became available in 2000, and features elements such as gold-colored rivets and long leather tassels. The French fashion house called the Steve Madden bag a "studied copy" of the original Balenciaga design, the mini version of which retails for around $1,300. Unsurprisingly, the Steve Madden purse is priced for much less, while still featuring "identical or nearly identical shapes and design elements," according to Reuters. Such similarities can confuse consumers, "create a false impression that Steven Madden's products are Balenciaga's, and hurt the French company's goodwill, reputation and sales," the lawsuit said. The plaintiff seeks an injunction against the infringing sales, and has asked for a recovery of lost profits.

Steve Madden is no stranger to trademark lawsuits. The Long Island City-based company was sued in 2009 by Alexander McQueen for allegedly copying the British designer's "Faithful" bootie.


Deal or No Deal? Deal!

Last week, attorneys representing college athletes in their class action suit against EA Sports and Collegiate Licensing Company filed a motion to approve a $40 million settlement that "could pay the athletes as much as $951 per season in which their likenesses appeared in one of the games since 2003." According to the terms of the proposed settlement, as many as "100,000 current and former college players would be eligible for a share of the settlement." Since 2003, according to plaintiffs' counsel, "there had been 140,000 to 200,000 roster appearances in the games. Under the deal, the plaintiffs named in the case . . . would get incentive payments ranging from $2,500 to $15,000." In the end, the payouts to the plaintiff athletes may be much smaller, but "the deal helps establish the principle that student-athletes deserve compensation for their labor, and that for-profit enterprises can't exploit them without consequences."

EA Sports had originally suggested back in September that a settlement with the college players was imminent; the company later announced that it would not release its 2014 college football video game. Shortly after that announcement, a court filing indicated that EA Sports had agreed to a settlement. The terms of that settlement were not made public, however, until last week's filing by plaintiffs' attorneys.

If Judge Claudia Wilken approves the settlement, it will the end of the players' legal battle with EA Sports and the Collegiate Licensing Company, a trademark licensing and marketing company. Approval of the settlement would not, however, affect the class action lawsuit, known as the O'Bannon case, filed in 2009 and currently being litigated against the National Collegiate Athletic Association (NCAA). In that case, college athletes sued the NCAA, demanding payment for the use of their likenesses in video games and broadcasts. The O'Bannon suit is scheduled for trial next week in Oakland federal court.



Sterling Still in the News

Yes, the controversial and widely disliked owner of the LA Clippers is still in the news. Earlier this week, legal counsel for Donald Sterling announced that he would not contest the sale of the Clippers to former Microsoft CEO Steve Balmer. Sterling's attorney also indicated that the Clippers' owner will drop a lawsuit filed last week against the National Basketball Association (NBA). Sterling, who acquired the Clippers franchise in 1981, previously indicated that he would "fight" the sale of the team. His attorney did not disclose the reasons for his client's sudden change of heart. The sale of the team, however, must still be approved by a vote of NBA team owners, who, according to USA Today, are expected to authorize the measure in the next few weeks.

The Clippers team is currently held by the Sterling Family Trust, with Donald Sterling and his estranged wife, Shelly, each owning a 50% share of the team. After NBA Commissioner Adam Silver said that he intended to "force a sale of the Clippers," Donald Sterling gave his wife permission to sell the team. Shortly after, however, Sterling reversed course and "decided to fight a vote scheduled for Tuesday on whether to terminate his ownership." Luckily for the NBA and every television-viewing person in America, this was a short-lived fight. The NBA canceled the hearing after Shelly Sterling made a deal with Ballmer, even though she lacked her husband's approval. According to USA TODAY Sports, "to make the deal happen, [Shelly] acted as the sole trustee of the family trust, relying on a provision in the trust that relates to the mental health of the trustees. If one of the trustees is deemed mentally unfit by experts, the other becomes sole trustee and can make decisions about the trust . . . ." Donald Sterling is said to have undergone a mental health exam last month that ultimately led to the determination that he was mentally unfit, writes USA TODAY. Legal counsel for the embattled billionaire disputed that determination.

Hopefully, this is the last we hear about Donald Sterling, but given his past behavior, it seems highly unlikely.


June 11, 2014

Law in a Flash: A Quick (But Insightful) Discussion of Legal Considerations for Flash-Sale Sites

Fashion Committee Meeting

Date: Thursday, June 12th
Time: 12:30pm - 1:30pm
Location: International Trademark Association, 655 Third Avenue, 10th Floor, New York, NY 10017
Please RSVP to Beth Gould at bgould@nysba.org

11:59am: You click the bookmark at the top of your browser that will take you to your favorite flash sale site. With less than 60 seconds between you and deep discounts on designer fashions, you can almost feel the fresh, new leather of your future handbag.

12:00pm: You refresh the page, immediately click the link to the "Estate Sale" for those high-end designer bags you could otherwise never afford, and buy that satchel you've been lusting over for ages.

5-7 Business Days Later: Your prized purchase arrives and it's not what you expected. Rather than a pristine product, "NWT", you open up a "gently worn" handbag, complete with scuffs and scratches. Apparently, "Estate" meant "used"...

As if luxury marketing wasn't difficult enough to decode, the online world has added an additional wrinkle for the consumer by offering products for sale without giving the consumer the opportunity to examine the product in person. Add in the frantic rush of a flash sale and the consumer's ability to consider and research their purchase is all but lost.

Flash sale sites present an array of legal issues unique to this particular eCommerce platform. Join NYSBA's Fashion Law Committee for a lunchtime discussion of these issues, including third-party distribution standards, deceptive marketing, and second hand sales. Special guest, Ireen Lizewski, Senior Event Manager at ideeli.com, will provide an insider perspective and overview of the matters she encounters on the "other side" of a flash sale platform.

June 13, 2014

HathiTrust Racks Up Fair Use Victory But Heads Back to the Stacks on Preservation Copies

By Barry Werbin and Bryan Meltzer, Herrick, Feinstein LLP

In a much-awaited decision, the Second Circuit held on June 10, 2014, that university libraries are permitted to electronically scan their copyrighted books to (i) create a full-text searchable database, and (ii) provide print-disabled people with access to the copyrighted works. In Authors Guild, Inc. v. HathiTrust, the Court found such uses by the HathiTrust Digital Library (HDL), set up by the HathiTrust -- an organization comprised of colleges, universities and other nonprofit organizations that contributed their book collections to create a massive digital database of over 10 million works -- were protected by the copyright fair use doctrine. The Court remanded on the issue of whether HathiTrust's "preservation" copies were protected as fair use.

As a threshold matter, the Court found that the U.S. association and union plaintiffs lacked standing under §501 of the Copyright Act to bring copyright claims on behalf of their member authors. That section prohibits a copyright holder from choosing a third party to bring suit on his or her behalf. On the other hand, the Court found that the foreign association and union plaintiffs had standing to bring suit on behalf of their members because foreign laws provided them with exclusive rights to enforce the copyrights of their foreign members.

The Court then proceeded to apply the fair use doctrine to the plaintiffs' claims. The Court noted that the Copyright Act "'is designed [] to stimulate activity and progress in the arts for the intellectual enrichment of the public.'" Based on this intention, the fair use doctrine "allows the public to draw upon copyrighted materials without the permission of the copyright holder in certain circumstances."

In assessing a fair use defense under §107 of the Copyright Act, courts are required to consider the following four nonexclusive factors: (1) the purpose and character of the use (e.g., for a commercial or educational purpose); (2) the nature of the copyrighted work; (3) the amount of the copyrighted portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. With respect to the first factor, it has become de rigueur for courts to assess whether the purpose of an allegedly infringing use is "transformative" or not, that is, "whether the work 'adds something new, with a further purpose or different character, altering the first with new expression, meaning or message...'" (Quoting Campbell v. Acuff‐Rose Music, Inc., 510 U.S. 569, 579 (1994).)

As for the HDL's full-text searchable database, the Court found that such use is protected by the fair use doctrine because (i) it constitutes a "transformative" use that adds something new "with a different purpose and a different character" from the copyrighted material (emphasizing, however, that contrary to the District Court's opinion, "a use does not become transformative by making an 'invaluable contribution to the progress of science and cultivation of the arts...." but by serving "a new and different function from the original work"); (ii) while there is no dispute the plaintiffs' works are protected by copyright, the second factor is of "'limited usefulness where,' as here, 'the creative work . . . is being used for a transformative purpose,'" (citing to the Court's own opinions in Cariou v. Prince and Bill Graham Archives v. Dorling Kindersley Ltd.); (iii) the extent of the libraries' copying of the copyrighted material is not excessive and is reasonably necessary to enable the full-text search function (which by its nature required copying of the entire texts of the books); and (iv) because the full-text search does not serve as a "substitute" for the books being searched, the plaintiffs will not suffer any non-speculative harm (the Court emphasizing that the only type of economic injury to be considered under the fourth fair use factor is that which results from the secondary use serving "as a substitute for the original work"). Based on these findings, the Court held that while the works were the type that would otherwise be protected by the Copyright Act, the full-text searchable database constituted a fair use of the works.

Of particular interest is the Court's observation that its finding of a transformative use here was even more compelling than the transformative uses the Court had approved in Cariou and Bill Graham Archives because "full‐text search adds a great deal more to the copyrighted works" (a likely portent of how the Court will soon rule in the pending Google Books appeal).

Of great concern to the plaintiff author groups under the fourth factor was an alleged security risk posed by the existence of the HDL that "might impose irreparable damage on the Authors and their works" if, hypothetically, "hackers were able to obtain unauthorized access to the books stored at the HDL" and then freely disseminate globally those digital copies, thereby decimating the traditional market for those works. However the Court rejected this theory, finding that the record on appeal documented "the extensive security measures the Libraries have undertaken to safeguard against the risk of a data breach."

Similarly, the Court also found that providing access to the blind and print-disabled is a fair use of the copyrighted material. While the Court found that such use is not "transformative" (as was the full-text searchable database) and appears to create "derivative works over which the author ordinarily maintains control," it found that "transformative" use is not "absolutely necessary" for a finding of fair use. In particular, the legislature and Supreme Court have both stated that making copyrighted materials accessible for the use of blind people is protected by the fair use doctrine. The Court further found that in the "unique circumstances presented by print‐disabled readers," (i) the extent of the libraries' retention of the works is reasonable, and (ii) that the market for books accessible to the handicapped is so insignificant that the value of the copyrighted material would not suffer. Accordingly, the Court held that "the doctrine of fair use allows the Libraries to provide full digital access to copyrighted works to their print-disabled patrons."

The Court also considered whether the HDL could preserve digital copies of the scanned books and permit its member libraries to replace their copies if (i) the member already owned an original,(ii) the member's original copy was lost, destroyed or stolen, and (iii) a replacement copy was not available at a fair price. The Court found that this issue was not ripe for its determination primarily because the district court record had not established whether any of the plaintiffs' copyrighted materials were irreplaceable at a fair price and, "thus, would be potentially subject to being copied by the Libraries in case of the loss or destruction of an original." If the plaintiffs' works could be replaced at a fair price, then the works would not be replaced by the HDL. Accordingly, the Court held this claim did not "present a live controversy for adjudication," vacated the district court's judgment "insofar as it adjudicated this issue without first considering whether plaintiffs have standing to challenge the preservation use of the HDL", and remanded for the district court to make that determination.

Finally, the Court held that the plaintiffs' claims against defendant the University of Michigan regarding its project known as the "Orphan Works Project" or "OWP" was not ripe for adjudication, because the program had been suspended after the case commenced, and it was unclear whether the University would reinstitute the OWP in a manner that would infringe the plaintiffs' copyrights and cause them harm.

The trajectory of the Second Circuit's application of the "transformative" use doctrine continues its climb in HathiTrust, following on the heels of the Courts' expansive application of fair use in Cariou v. Prince. With the Google Books case coming up next, and other Circuits having already adopted the transformative use test, the copyright bar is readying itself for transformative use as the fair use paradigm of the 21st century, particularly as digital technologies continue to push the envelope of an aging Copyright Act.

June 14, 2014

Week in Review

By Martha Nimmer


For an excellent analysis of the recent Second Circuit decision in Authors Guild, Inc. v HathiTrust, see Barry Werbin and Bryan Meltzer's blog entry here:


Settlement Details Revealed

The NCAA announced on Monday that it had reached two proposed legal settlements, one with video game maker Electronic Arts (EA) and Collegiate Licensing Company -- thereby resolving a lawsuit that the NCAA filed in November 2013 -- and a second with former Arizona State quarterback Sam Keller, who sued the NCAA over "avatars of college athletes appearing in video games." Under the settlement agreements, the NCAA would pay $20 million to college football and basketball players whose likenesses appeared in certain EA video games.

The details of these two settlements were revealed on the first day of trial in the Ed O'Bannon suit against the NCAA, which some commentators have called "the sports trial of the century." The direct effect of the NCAA's two settlements is expected to be limited, however. First, as Sports Illustrated notes, O'Bannon's legal arguments are couched in antitrust law rather than the right of publicity law, which forms the basis of the action brought by Sam Keller. Specifically, O'Bannon argues that the NCAA and its member schools "formed an anti-competitive cartel to deprive players of an opportunity to license themselves in games and other properties." Keller, in contrast, accuses the NCAA and its members of violating the right of publicity law by "misappropriating players' images and likenesses in video games." Keller's settlement with the NCAA would, consequently, resolve any right of publicity claim, but not an antitrust claim. O'Bannon's suit also goes further in scope than Keller's, ultimately advocating for a "fundamental change to NCAA amateurism rules so that current and former Division I football and men's basketball players can negotiate deals for their names, images and likenesses." O'Bannon seeks to obtain this change through an injunction ordered by the presiding judge.

Despite the limited effect of the NCAA settlements on the O'Bannon case, the aftermath of the two settlements should not be ignored: the NCAA, which has long insisted that it can prohibit college athletes from earning money from on-field performance in school, will be giving a group of current and former players $20 million as compensation. However, whether this development signals a greater change in the world of amateur sports remains to be seen.


From the Basketball Court to Federal Court

It was only a matter of time: Donald Sterling has decided, once again, to pursue legal action against the National Basketball Association (NBA), thereby withdrawing his support from a deal that would have resulted in the sale of the LA Clippers to former Microsoft CEO Steve Ballmer. Instead, Sterling will be seeking $1 billion in damages from the NBA as he fights the organization for, in his words, attempting "to take away our privacy rights and freedom of speech." According to Sterling's attorney, Maxwell Belcher, his client was ready to approve the sale of the team, but backtracked when he learned that the NBA would not lift his lifetime ban and the $2.5 million fine imposed against him in May. "The Team," Sterling reiterated in a written statement, "is not for Sale."

In the written statement released by his attorney, Sterling summarizes the various reasons behind his decision to fight the NBA in court. The Clippers' owner calls the NBA leadership "incompetent, inexperienced and angry," and goes on to accuse the NBA of turning a blind eye to its "own transgressions." These transgressions, according to Sterling, include gender discrimination, which the NBA is seeking to sweep under the rug by going after Sterling. The embattled billionaire "goes on to say the NBA is run by a 'band of hypocrites and bullies' who are carrying out a 'reign of terror.'" The statement ends on a rousing, perhaps even patriotic, note: "[w]e have to fight for the rights of all Americans. We have to fight these despicable monsters. THIS IS THE REASON I WILL NOT SELL MY TEAM."

Despite the high dudgeon of Sterling's statement and his impending legal action against the NBA, the NBA seems relatively calm. That tranquility may be explained by the fact that, as Sports Illustrated's Michael McCann reports, the sale of the Clippers to Steve Ballmer could still go through; one scenario that would allow for the sale's completion would be for Sterling to be deemed mentally incompetent. Sterling's estranged wife, Shelly, has actually insisted that her husband is mentally incompetent, which gives her the power under the terms of the trust agreement to act as the sole trustee of the trust that owns the Clippers. As the sole trustee, she would be empowered to sell the team without her husband's consent. Shelly Sterling has insisted that she has medical documents that establish her husband's lack of mental competence, but Donald Sterling and his legal team unsurprisingly dispute her assertion. To resolve this question of mental competency, a Los Angeles Superior Court judge ruled on Friday that Sterling was entitled to a hearing to determine his mental competency. The competency hearing is scheduled for July 7th to July 10th. Both Shelly and Donald Sterling will have their own medical experts testify, and neurological results from scans of Donald Sterling's brain will be reviewed.

If Sterling is ruled mentally competent and remains a trustee of the Sterling Family Trust, the NBA is not out of options. Even though Sterling would still be the legal co-owner of the Clippers, the NBA could move to oust him again, assuming its "initial strategy: hold a termination hearing where the Board of Governors would decide whether to oust Donald Sterling." Under Article 14(g) of the NBA's constitution, if at least 22 of the 29 team owners vote to sustain the charges against Donald Sterling, the Clippers' membership in the NBA would be terminated.

Membership termination does not automatically mean that the Clippers would cease to be a team; rather, Article 14(g) would require a second vote whereby 19 of the 29 team owners vote to end only Donald Sterling's ownership of the Clippers. If that vote is cast, the team's NBA membership would not be terminated and instead, Shelly Sterling would become the controlling owner of the Clippers. Team owners are only likely to cast that pivotal second vote, however, if Shelly Sterling remains committed to selling the team; if she were to have a sudden change of heart -- as her husband has been known to do -- and decide to remain in control of the team, the team owners are unlikely to cast the second vote called for under Article 14(g) that would avoid the Clippers' membership termination. If that second and all-important vote failed to occur, per Article 14A(a), the Clippers' membership would be terminated. Article 14A(a) would then compel the office of commissioner Adam Silver to take over the Clippers; the commissioner's office would eventually put the team up for sale. Such a situation would, undoubtedly, be long and difficult, likely protracted further by more disputes and more litigation, which the NBA would prefer to avoid as it seeks to put the Sterling saga far behind it.




The Ninth Circuit has revived an heir's lawsuit aimed at returning two 16th-century paintings taken from the heir's father-in-law by Nazi Reichsmarschall Herman Göring during World War II. The plaintiff, Marei Von Saher, has been trying since 2007 to convince the Norton Simon Museum of Art in Pasadena, California to return two life-size panels of Adam and Eve, which date back to 1530. Von Saher claims that the panels, painted by Lucas Cranach the Elder, were stolen from Jacques Goudstikker, the father of her deceased husband. Goudstikker was a Dutch art dealer who was forced to flee the Netherlands during World War II; tragically, he died a short time after escaping when he fell from a ship en route to South America. According to the complaint, Goudstikker "left behind a black notebook that listed the contents of his art collection, including the Cranach panels."

Before hanging in the country home of Herman Göring, the Cranach panels are said to have decorated the walls of the Church of the Holy Trinity in Kiev, Ukraine, until being relocated by the Soviet Union in 1930 to the Art Museum at the Ukrainian Academy of Science in Kiev. The Soviet Union auctioned the two works in 1931, and they eventually became part of Goudstikker's collection. To complicate the history of the panels even further, the two works may have, at some point, been part of the Stroganoff family collection in Russia before being seized and sold by Soviet officials. The Dutch government believed as such, and gave the panels to a Stroganoff descendant in 1966, all while failing to inform the wife or son of Jacques Goudstikker. The Dutch government also -- inexplicably -- maintained that Desi, the wife of Jacques Goudstikker, had voluntarily sold the art works and other belongings to the Nazis. The Stroganoff descendant, George Stroganoff-Scherbatoff, sold the two panels to the Norton Simon Museum in 1971.

Von Saher, as the only remaining heir of Jacques Goudstikker, sued the museum in 2007 under a California law that "allowed claims to recover confiscated Holocaust-era artwork from museums or galleries until the end of 2010." A federal judge ruled in 2009, however, that the California law in question was unconstitutional, dismissing Von Saher's claim and setting up the case for its first trip to the Ninth Circuit. A three judge panel later affirmed the lower court ruling, but remanded to allow the plaintiff to amend her complaint in light of changes to the California law, which was amended by the state legislature so as to extend the filing deadline from three to six years. As expected, the museum moved to dismiss the complaint, arguing that the claims conflicted with federal law and policy on recovered art. Unfortunately for Von Saher, the presiding U.S. district court judge agreed and dismissed her case, "citing a petition for writ of certiorari by the U.S. Solicitor General that supported a policy of "external restitution" and respect for the decisions of foreign governments." Von Saher's case did not end there, however: last Friday, an appellate panel reversed the U.S. district court's decision, thereby reviving Von Saher's claims, and remanding the case to Los Angeles. The appellate panel, which ruled 2-1, wrote, "Von Saher's claims do not conflict with any federal policy because the Cranachs were never subject to postwar internal restitution proceedings in the Netherlands." Consequently, the appellate panel's decision opens the door for Von Saher's claims to be decided on the merits.


June 20, 2014

Klinger v. Conan Doyle Estate Appeal

By Joseph Perry

Oral Argument and Holding

The Seventh Circuit of Appeals heard oral arguments from the parties on May 22nd, in which the Conan Doyle Estate challenged the district court's judgment in two ways: 1) the district court had no subject matter jurisdiction because there was no actual legal controversy, and 2) the copyrights of round, complex characters like Sherlock Holmes remain protected under copyright law until the last Conan Doyle story falls into the public domain. On June 16th, the Seventh Circuit affirmed the district court's motion for summary judgment and declaratory judgment in favor of Klinger, which stated that materials in 50 pre-1923 Sherlock Holmes novels and stories are in the public domain, but materials in post-1923 Sherlock Holmes stories are protected under copyright law.


The Seventh Circuit held that the district court had federal subject matter jurisdiction over Klinger's lawsuit because the Conan Doyle Estate's threat to sue Pegasus Books for copyright infringement and to block distribution of In the Company of Sherlock Holmes created a sufficient threat to constitute an actual controversy. The Conan Doyle Estate argued that Klinger's suit was unripe because In the Company of Sherlock Holmes was not complete, and thus, copyright infringement could not be decided until the book was finished. The court rejected the Conan Doyle Estate's argument because the only issue was whether Klinger could "copy the characters of Holmes and Watson as they are depicted in the stories and novels of Arthur Conan Doyle that are in the public domain," which could be determined without knowing the contents of the book. Thus, the Seventh Circuit held that the district court had federal subject matter jurisdiction over Klinger's lawsuit.

Copyright Infringement

The Seventh Circuit held that the pre-1923 Sherlock Holmes and Dr. Watson characters were in the public domain. The court rejected the Conan Doyle Estate's argument that a "'complex' character in a story, such as Sherlock Holmes or Dr. Watson, whose full complexity is not revealed until a later story, remains under copyright until the later story falls into the public domain." Essentially, the Conan Doyle Estate sought "135 years (1887-2022) of copyright protection for the character of Sherlock Holmes as depicted in the first Sherlock Holmes story," and the court stated that "we cannot find any basis in statute or case law for extending a copyright beyond its expiration. Thus, the Seventh Circuit held that the pre-1923 Sherlock Holmes and Dr. Watson characters are in the public domain.


The Seventh Circuit of Appeals affirmed the district court's motion for summary judgment and declaratory judgment in favor of Klinger, which stated that materials in 50 pre-1923 Sherlock Holmes novels and stories are in the public domain, but materials in post-1923 stories are protected under copyright law.

The Seventh Circuit's opinion is here: doyle.pdf

Week in Review

By Martha Nimmer

The Case of the Missing Degas

The Degas Sculpture Project has claimed in New York federal court that a Tennessee art dealer failed to pay for several pieces of art, including a bronze sculpture, La petite Danseuse de Quatorze Ans ("The Little Dancer, Age Fourteen"), by famed French artist Edgar Degas, and a painting by Dutch abstract expressionist Willem de Kooning. Other pieces included in the sale to the art dealer were 16 "extremely rare and valuable" original oil on paper paintings by de Kooning.

The plaintiff, along with co-plaintiff Modernism Fine Arts, claim that defendant Rose Ramey Long and Rose Long Fine Art planned to sell the pieces in question to a California art collector. Long said that her client intended to display the pieces in a new museum in San Francisco. The defendant, according to the complaint, somehow ended up paying only $110,000 for the pieces, which she resold to a customer other than the one disclosed to the plaintiffs. This customer, the lawsuit states, turned out to be a "recently released from custody, twice-convicted, federal felon with a history of fraudulent conduct and no source of current income or tangible assets." Long also failed to pay the contract price for the pieces that she sold, and neglected to return them to the plaintiffs. The de Koonings were eventually sent to the plaintiffs in early June, but the rare, highly-prized bronze Degas statute remains missing.

The plaintiffs seek damages for negligence and breach of contract.

"True Threats"

The Supreme Court granted cert earlier this week in a case that promises to have long-lasting effects on the free speech rights of Americans. The case, Elonis v. United States, involves the First Amendment rights of individuals who use threatening language in online forums, such as Facebook, but whose intent is not readily apparent. The petitioner, Anthony Elonis, had been "sentenced to nearly four years in federal prison for posting online rants about killing his estranged wife, shooting up a school and slitting the throat of an FBI agent."

At trial, Elonis argued that he had never intended to go through with the threats, adding that he posted them as "rap lyrics" as a way to deal with his anger after his wife had left him. He also argued that his statements were protected by the First Amendment. A federal appeals court rejected Elonis' First Amendment claim. Earlier, at trial, the jury was instructed that Elonis "could be found guilty if an objective person could consider his posts to be threatening." Elonis' attorney argued, however, that the jury should have instead been instructed to use a subjective standard to decide whether Elonis meant the messages to be understood as threats. The reasoning behind the subjective standard, the defense argued, is the "impersonal nature" of online communication, which has the potential for an audience to misinterpret a speaker's message or intent. The federal government, in turn, argued that requiring proof of a subjective threat would, in the words of the Huffington Post, "undermine the purpose of the federal law prohibiting threats."

Under the 54 year old "true threats" doctrine, first touched on in Watts v. United States and later expounded on in Virginia v. Black, true threats of harm to another person are not protected by the First Amendment. Exactly what constitutes a "true threat," however, has grown murkier and more challenging to ascertain as online communication has become more commonplace and has supplanted face-to-face interaction. This change in communication has free speech advocates arguing for a subjective standard when juries are faced with a true threats case. The Supreme Court will hear argument in the case in the fall.


Read the amicus brief here: https://sblog.s3.amazonaws.com/wp-content/uploads/2014/04/13-983tsacTJCElonisvUSA.pdf


The U.S. Patent and Trademark Office (USPTO) announced this week that it would cancel the federal trademark of the Washington Redskins on the grounds that the team name is disparaging to Native Americans. Federal trademark law forbids the registration of marks that "may disparage" individuals or groups, or that may "bring them into contempt or disrepute." The USPTO, through the Trademark Trial and Appeal Board, first canceled the mark in 1999, but that decision was overturned in 2003 on appeal to a federal court. Despite this loss, the team is expected to appeal the current cancellation; while the appeal is being decided, the team would retain federal trademark protection over the Redskins name and mark.

The decision by the USPTO will not force the team to change its name, but adds to the growing list of organizations that have come out against the football team's moniker. Senator Maria Cantwell, a Democrat from Washington State, persuaded 49 members of Congress "to send a letter last month to the National Football League on the issue," and even interrupted a debate on the Senate floor to announce the USPTO decision. Despite mounting anger over the team's name, owner Dan Snyder has remained steadfast in his opposition to changing it, saying the name "Redskins" was chosen as a way to honor Native Americans.

Another effect of trademark cancellation, if the Redskins lose or do not pursue an appeal, is that the team will no longer be able to use federal trademark law to pursue trademark infringers who use the team name or logo without permission. Cancellation also "hinders the team's ability to block counterfeit merchandise" from being made, imported or sold in the country. This lack of federal protection could mean a loss of millions of dollars of merchandise revenue for the team and for the NFL.

All is not lost for Washington, D.C.'s football team, however. Although unlikely, Dan Snyder could come to his senses, change the team name and perhaps get back in the good graces of millions of Americans, all while avoiding a costly, protracted legal fight. As an alternative to federal trademark protection, Snyder could choose to protect the team name and logo under state law, even though this form of protection is less robust and wide-reaching than federal law. As it turns out, the team is headquartered in Virginia, not Washington, D.C.; the team may therefore be able to rely on Virginia law, and on state laws in other localities where the team does business, for protection.

One thing is certain, however: this is not the last of the Washington Redskins controversy.




The Association of Art Museum Directors has sanctioned the Delaware Museum of Art following its sale of various works of art. The museum held the sale as a way to raise money to pay off its debts following costly renovations undertaken in 2005. The Association of Art Museum Directors said that the museum's art sale "violated one of the most basic and important" tenets of a collecting institution. The American Alliance of Museums, another professional organization, also came out against the sale, and voted to withdraw the museum's accreditation.

Museums often sell works in their collections as a way to acquire other pieces. The practice of selling art as a way to pay for operations or property improvements is considered, writes The New York Times, "an ethical violation, a betrayal of a museum's role of holding art in public trust." "With this sale, the museum is treating works from its collection as disposable assets, rather than an irreplaceable cultural heritage that it holds in trust for people now and in the future," the Association of Art Museum Directors said in a statement.

In March, the museum announced that it planned to sell four works, with the goal of raising roughly $30 million, "enough to repay the balance of its $19.8 million bond debt and replenish its endowment." The works sold included "Isabella and the Pot of Basil," by William Holman Hunt. That piece brought in only $4.89 million at a Christie's auction in London on Tuesday; that figure was, sadly, markedly "below the auction house's low estimate of $8.4 million and substantially below its high estimate of $13.5 million," according to The New York Times. The museum has not indicated what other works it plans to sell.


June 22, 2014

Washington Redskins' TM Issues

By Mike Furlano

On June 18th, the Trademark Trial and Appeal Board of the Patent and Trademark Office (the TTAB) cancelled the National Football League's (NFL) Washington Redskins' trademark registrations for the mark "Redskins", because it determined that Redskins was disparaging to Native Americans. This is the biggest development in a long line of controversy surrounding the NFL team's use of the Redskins name.

The six Native Americans Petitioners tasked the TTAB with determining whether the name Redskins was, at the times of registration, disparaging to Native Americans under Section 2(a) of the Trademark Act. Section 2(a) prohibits the registration of a mark that may disparage persons or bring them into contempt or disrepute. The TTAB found that the name Redskins was indeed disparaging, and must be cancelled.

Legal Analysis

Whether a mark is disparaging requires a two-step inquiry. The TTAB first determines the meaning of the mark before asking whether that meaning may disparage a person or group. Intent plays no role in the analysis if the mark refers to the group claiming disparagement. The TTAB used this two-step inquiry to find that the term redskins disparaged Native Americans during 1967-1990, when the Washington Redskins' trademark registrations were filed and re-filed.

Step 1: Meaning of the mark Redskins

The TTAB quickly determined that the mark Redskins refers to both the Washington Redskins football team and Native Americans. The TTAB referenced the team's use of its Native American chief logo, marching band's headdress costumes, and various team promotional materials depicting Native Americans. It was clear that the mark Redskins referred to, in part, Native Americans.

Step 2: Does the mark's Native American meaning disparage Native Americans?

This was the crux of the issue. The TTAB determines whether a mark disparages a group by looking at the views of that group rather than the American public as a whole. A sizeable portion, or substantial composite, of a group is sufficient for the TTAB's purposes.

Here, the TTAB determined that a substantial composite of Native Americans are disparaged by the Redskins mark. It cited two evidential categories in its determination: First, the TTAB looked at redskins as a dictionary entry. From 1967-1983, most redskin entries label the term offensive, disparaging, contemptuous, or not preferred. After 1983, all entries include these labels. Second, the TTAB referenced a resolution passed by the National Congress of American Indians (NCAI), the oldest and largest nationwide organization representing Native Americans. In 1993 the organization passed a resolution identifying the term redskins as "pejorative, derogatory, denigrating, offensive, scandalous, contemptuous, disreputable, disparaging, and a racist designation" towards Native Americans. It identified the Washington Redskins' usage as having been, and continuing to be, offensive, disparaging, scandalous and damaging to Native Americans. The TTAB noted that because the NCAI is a democratic organization consisting of over 30% of Native American tribes, it constituted a substantial composite of Native American views.

Honorable intent and the way the Washington Redskins used the term was inconsequential, because the analysis hinges on what Native Americans felt about the term. Moreover, the Washington Redskins' argument that some tribes do find the term endearing and honorable failed, because a substantial composite need not be a majority. The TTAB noted that 30% is a sufficient number, because otherwise it would be acceptable for a mark to disparage 1 out of every 3 individuals in a group.

Thus, because the term redskins refers to Native Americans, and a substantial composite of Native Americans finds the term disparaging, the TTAB cancelled the Washington Redskins' trademarks.

What does this mean?

Not as much as you would think. The TTAB only has the power to cancel trademark protection. It cannot prohibit or enjoin the use of the mark. The Washington Redskins are still free to use the name. The cancellation, however, removes the federal protections enjoyed by federal trademark owners, such as enforcement mechanisms concerning counterfeit and import issues. Yet even federal cancellation does not, by itself, invalidate the Washington Redskins' state and common law trademarks. These will also have to be litigated to determine their validity. Finally, the Washington Redskins has 60 days to appeal the TTAB's decision. If the team decides to appeal, and it is likely that it will, then the cancellation is frozen until the appeal's conclusion.

June 25, 2014

U.S. Supreme Court Decision Favors Broadcasters over Aereo

By Barry Skidelsky

Today the Supreme Court decided 6 to 3 against Aereo, the innovative Internet broadcaster. Although this case (American Broadcasting Cos., Inc., et al v. Aereo, Inc. aka Bamboom Labs, Inc) primarily involved television and cable retransmissions, it will likely have a strong impact on anyone involved at the intersection of entertainment and communications law and business with wide ranging repercussions yet to be felt.

For example, terrestrial radio and television may find that the Aereo case could be used as ammunition in the current effort to pass federal legislation imposing a performance royalty for sound recordings, which are currently applicable only to digital transmissions and paid through Sound Exchange (the licensing collective organized by the record labels), although broadcasters currently also pay performance royalties for compositions through the Performing Rights Organizations of ASCAP, BMI and SESAC. Other well known copyright related reforms are also underway.

For the moment, at least, Aereo does not appear to put television broadcasters at risk of loss for the retransmission fees (an estimated $2.4 billion in 2013) that they receive from cable and satellite distributors -- despite Justice Breyer's comment for the majority that "Aereo's system is, for all practical purposes, identical to a cable system." Justice Breyer also said that: "We believe that resolution of questions about cloud computing, remote storage DVRs and other novel items not now before us, should await a case in which they are clearly presented."

Aereo, backed by Barry Diller (inter alia a co-creator of Fox Broadcasting), operates in 11 major cities and had plans to expand. However, the ruling today by our nation's top court -- finding in key part that Aereo publicly performs the petitioners' works within the meaning of the Transmit Clause of the Copyright Act -- threatens to put Aereo out of business. A link to the Supreme Court's decision is found here: http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf.

Barry Skidelsky is a New York City based attorney, whose practice is primarily focused on communications, entertainment and technology related matters. An Executive Committee member of the EASL Section of the NYSBA, Barry also co-chairs EASL's Television and Radio committee, and he is a former chair of the NY chapter of the Federal Communications Bar Association -- whose members practice before the FCC in Washington, DC. In addition to serving as an attorney, Barry also offers services as consultant, broker, arbitrator and bankruptcy trustee or receiver for lenders and others directly or indirectly involved in these fields. Barry can be reached at 212-832-4800 or bskidelsky@mindspring.com.

June 26, 2014

MA Senate Passes Post-Mortem Right of Publicity Bill

By Barry Werbin

The Massachusetts Senate has passed a bill (S. 2022) that approves a post-mortem right of publicity for Massachusetts residents. The bill would apply to a person's name, likeness and character if it has commercial value, and extend protection for 70 years after the celebrity's death. Such rights would pass to the person's heirs or an entity that was representing the individual. The bill was supported by actor Bill Cosby, who is a resident of Massachusetts. It still must be approved by the Massachusetts House.

The text of the bill is available here: https://malegislature.gov/Bills/188/Senate/S2022.

Case Solved: Conan Doyle Estate Loses Copyright Dispute Over Sherlock Holmes

By Barry Werbin and Laura Tam, Herrick, Feinstein LLP

It didn't take much deducing for the Court of Appeals for the Seventh Circuit to rule on June 16th that Sherlock Holmes and Dr. Watson, the famous character sleuths created by Sir Arthur Conan Doyle in the early 19th century, are in the public domain and free for public use. The resolution of this closely-watched copyright dispute has significant implications for the creation of future works featuring the Holmes and Watson characters because most aspects of these characters, according to the Seventh Circuit, are now "fair game."

As the Seventh Circuit pointed out, Arthur Conan Doyle published 56 stories and four novels about Sherlock Holmes. The first story was published in 1887 and the last 10 stories were published between 1923 and 1927. Due to the 1998 Copyright Term Extension Act, the American copyrights on the final 10 stories will expire between 2018-2022, 95 years after the respective dates of first publication. The copyrights on the other 46 stories and the four novels, however, previously expired and are in the public domain.

The case began when the Conan Doyle Estate (the Estate) threatened to prevent the distribution of Leslie S. Klinger's proposed compilation of modern stories depicting Sherlock Holmes and Dr. Watson. Klinger had previously co-edited an anthology of such stories entitled A Study in Sherlock: Stories Inspired by the Sherlock Holmes Canon, which was published by Random House in 2011. After the Estate told Random House that it would have to pay $5,000 for a copyright license, Random House paid the license and published the book. In 2012, Klinger decided to publish a sequel to A Study in Sherlock to be called In the Company of Sherlock Holmes and entered into negotiations with Pegasus Books and W.W. Norton & Company. After the Estate threatened to prevent the distribution of the anthology and sue for copyright infringement, Pegasus refused to publish the book until Klinger obtained a license from the Estate.

Instead of obtaining the license, Klinger sued the Estate, seeking declaratory judgment that he is free to use the material from the Sherlock Holmes stories and novels that are no longer under copyright. After the Estate defaulted by failing to appear or respond to Klinger's complaint, the district court gave Klinger leave to file a motion for summary judgment. After Klinger filed his motion, the Estate responded with two main arguments. First, the Estate argued that the district court did not have subject matter jurisdiction, because there was no actual case or controversy between the parties. Second, the Estate argued that even if the court had jurisdiction, the Estate was entitled to judgment on the merits because the copyright of fictional characters, such as Sherlock Holmes or Dr. Watson, whose complexity is not fully developed until a later story, remains under copyright until the expiration of the later story's copyright. The district court granted Klinger's motion for summary judgment, and the Estate appealed to the Seventh Circuit.

First, the Seventh Circuit rejected the Estate's argument that the district court did not have jurisdiction. The Court held that the Estate's threats "to block the distribution of the book by major retailers and to sue for copyright infringement" created an actual controversy that justified the declaratory judgment action. Second, the Court determined that there was no basis for extending a copyright beyond its expiration and that "[w]hen a story falls into the public domain, story elements -- including characters covered by the expired copyright -- become fair game for follow-on authors." (Citing for support the Second Circuit's decision in Silverman v. CBS Inc., 870 F.2d 40, 49 -51(2d Cir. 1989), which involved the fictional characters Amos and Andy).

Although the Estate attempted to draw a distinction between "flat" and "round" fictional characters, arguing that Holmes and Watson did not become fully "rounded" until the last story that Doyle published, the Court stated that it did not "see how that can justify extending the expired copyright on the flatter character." Thus, while the characters of Holmes and Watson were copyrightable, the Court determined that any subsequent features that were added to the characters (for example, that Holmes has grown to like dogs or that Watson has been married twice) did not revive the expired copyrights on the original characters. The Court emphasized that "[t]he copyrights on the derivative works, corresponding to the copyrights on the ten last Sherlock Holmes stories, were not extended by virtue of the incremental additions of originality in the derivative works."

As the Seventh Circuit noted, "[E]xtending copyright protection is a two-edged sword from the standpoint of inducing creativity, as it would reduce the incentive of subsequent authors to create derivative works . . . by shrinking the public domain." The Court seemed particularly concerned about the "spectre of perpetual, or at least nearly perpetual, copyright" and that the Estate was attempting to curtail creativity by "extending the copyright protection of literary characters to . . . extraordinary lengths." Indeed, the Court succinctly rejected the Estate's argument that allowing Holmes and Watson to enter the public domain would disincentivize authors from improving and perfecting their works. As the Court noted, "[O]ther artists will have a greater incentive to improve it, or to create other works inspired by it, because they won't have to pay a license fee to do so provided that the copyright on the original work has expired."

While the Seventh Circuit's decision means that the Estate's heyday of collecting significant copyright license fees and royalties is largely over, it also ensures that artists and authors like Klinger will not be pressured into paying license fees for character rights that have entered the public domain.

A copy of the Seventh Circuit's decision is available here: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2014/D06-16/C:14-1128:J:Posner:aut:T:fnOp:N:1363624:S:0.

June 27, 2014

Week in Review

By Martha Nimmer

No to Aereo

The U.S. Supreme Court has ruled that streaming service Aereo violated U.S. copyright law by capturing television broadcasts via miniature antennas and "performing the works publicly within the meaning of the Transmit Clause" of the Copyright Act. The 6-3 decision is a decisive victory for television broadcasters, and a major blow to Aereo, whose future as a business remains decidedly uncertain just two years after being founded.

During oral arguments in April, broadcasters argued that Aereo's services were harming highly valuable revenue sources, and threatened to remove their signals from the airwaves if the court ruled for Aereo. Aereo countered that its service was akin to what subscribers could do with rabbit ear antennas: watch broadcast TV over public airwaves, for free. Justice Stephen G. Breyer, writing for the majority, said that Aereo was "not simply an equipment provider," but was instead acting like a cable system.

Unsurprisingly, television broadcasters celebrated the high court's decision. Leslie Moonves, CEO of CBS, stated, "for two years they have been in existence, trying to hurt our business. They fought the good fight. They lost. Time to move on." Understandably, Aereo founder and chief executive, Chet Kanojia, was less pleased with the ruling, calling it a "massive setback" for consumers. Previously, Kanojia had remarked that Aereo "had no Plan B" if the company lost in court. Following the Court's ruling, Kanojia was slightly more upbeat, saying that Aereo would keep working "to create innovative technologies;" he did not indicate, however, how the company would move on following the ruling. Commentators and legal experts have said that Aereo would be "left with few options" in light of a decision that rejected all of the company's major arguments.

Read the decision here: http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf

Getting Ahead of Head Injuries

FIFPro, the union for world soccer players, has asked FIFA to investigate the head injury suffered last week by Uruguay left back/midfielder Alvaro Pereira. The team member was knocked unconscious after colliding with English player Raheem Sterling's knee during Uruguay's victory over England. Pereira was out cold for a minute or two before walking to his team bench; he eventually returned to the game in the 63rd minute. "After the hit, I only recall that I was unconscious for an instant," Pereira said. "It was like the lights went out a little bit."

Although doctors from the Uruguayan team and FIFA examined the player after the match concluded, a concussion has "yet to be diagnosed." In addition to an investigation of the Uruguayan team member's head injury, FIFPro "is seeking urgent talks and immediate assurances that FIFA can guarantee the safety of the players . . . ." The players' union has stated that if those assurances are not made, the group will call for independent medical practitioners to be used at future matches.

FIFA's policy towards player concussions uses a "recognize & remove" approach to head injuries, which, FIFPro says, fails to protect players adequately, at least as currently applied. Under the concussion protocol, any athlete who is suspected of suffering a concussion should be evaluated for "visible clues or signs and symptoms, such as loss of consciousness, lying motionless on the ground or being unsteady on one's feet," among other symptoms. If a player exhibits these symptoms, he "should be IMMEDIATELY REMOVED FROM PLAY, and should not be returned to activity until they are assessed medically," FIFA's concussion guide says. Unfortunately for Pereira and other soccer players, it does not appear that those safeguards were enforced last week.

Clearly, the topic of head injuries remains an issue of utmost concern in professional sports, with greater attention being focused on soccer in light of the World Cup tournament this summer.



Head injuries in sports continue to make news in the United States. Just yesterday, the National Football League (NFL) and attorneys for plaintiffs announced that a revised settlement had been reached in the NFL concussion lawsuit pending before the U.S. District Court for the Eastern District of Pennsylvania. Under the revised agreement, the NFL will remove the $675 million cap on damages from the concussion-related claims of former NFL players. As a result of this revision, any retired player who develops a "qualifying neurocognitive condition" will be able to receive funds from a compensation program for former players. This change comes, in part, after presiding U.S. District Judge Anita Brody questioned whether $675 million amount would be sufficient to pay for the plaintiffs' damages.

Another major facet of the revised settlement is that former players will no longer be barred from suing the NFL. The original agreement, writes Forbes, "included a provision that eliminated those players from ever suing the NCAA or other amateur sports entities for concussion-related injury." Now, under the altered settlement, that ban has been lifted. One reason behind this change was the NFL's fear that Judge Brody would refuse to accept any settlement that included a ban on future litigation, writes Forbes.

Other aspects of the settlement remain unchanged, however. Consistent with last year's accord, the revised agreement provides a "wide range of benefits to retired NFL players and their families, including a separate fund to offer all eligible retirees a comprehensive medical exam and follow-up benefits, and an injury compensation fund for retirees who have suffered cognitive impairment, including dementia, Alzheimer's, Parkinson's or ALS." Additionally, the agreement also stipulates that the NFL set aside $10 million for concussion education, "as well as pay the costs of providing notice to the class and for administration of the settlement."



Bills, Bills, Bills

After failing to pay nearly $2 million in legal fees, singer and songwriter George Clinton may soon find that his copyrights are up for sale in an effort to satisfy his staggering legal bill. Earlier this week, the Ninth Circuit ruled that a receiver may sell the copyrights to several songs by the funk artist to satisfy his debt to a Seattle law firm.

Law firm Hendricks & Lewis represented Clinton in copyright disputes from 2005-2008, and had been trying for several years to collect the $1.7 million owed to them by their former client. Clinton claimed that the firm's fee collection practices had made it "impossible for him to earn a living." The recording artist also brought a malpractice claim as part of a countersuit against the firm. While that legal drama was playing out, "a court-appointed receiver took possession of the master sound recording copyrights to four of Clinton's songs from the 1970s: 'Hardcore Jollies,' 'One Nation Under a Groove,' 'Uncle Jam Wants You,' and 'The Electric Spanking of War Babies.'"

Clinton had argued before the Ninth Circuit that Section 201(e) of the Copyright Act protected him from such an "involuntary transfer" of his copyrights to a court-appointed receiver, but the three-judge appellate panel disagreed. First, Clinton was not, for purposes of the Copyright Act, the author of the songs; even assuming he was, the involuntary transfer provision would offer no help. "There is no question that Clinton transferred any interest that he had in the Masters to Warner Bros., and, as part of a settlement arising from unrelated litigation, Warner Bros. subsequently agreed to transfer ownership back to Clinton," Judge Morgan Christen wrote for the panel. For the protections of Section 201(e) to apply, the original author could not have "previously been transferred voluntarily by that individual author . . . ." As the singer had previously transferred his interests in the copyright, Section 201(e) would not apply.


About June 2014

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in June 2014. They are listed from oldest to newest.

May 2014 is the previous archive.

July 2014 is the next archive.

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