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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.


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This page contains a single entry from the blog posted on June 6, 2014 12:26 PM.

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