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Week In Review

By Michael B. Smith and Ben Natter

Supreme Court Declines to Hear Appeal in E-books Case

The Supreme Court to declined to consider an appeal of an appellate court finding that Apple conspired to fix E-book prices. A federal appeals court ruled in 2014 that the publishers and Apple "combined forces to grab control over price," and that "a coordinated effort to raise prices across the relevant market was present in every chapter of this story." The price fixing stemmed from Apple's entry into the e-book market in 2010.


Rhapsody Follows Spotify into Mechanical License Litigation

David Lowery, former member of Cracker and Camper Van Beethoven, has filed a putative class action lawsuit against music streaming service Rhapsody, alleging that Rhapsody committed willful copyright infringement by streaming songs without licensing the mechanical rights. The complaint, which mirrors the one Lowery filed in December against Spotify, seeks (1) to enjoin Rhapsody from continuing that practice, (2) to require Rhapsody to retain a third party auditor to identify and remove infringing works, (3) restitution, (4) actual damages, (5) statutory damages, and (6) attorneys' fees.


Muzak Lawsuit Fades into Background

On Monday the D.C. District Court dismissed a copyright infringement lawsuit filed by SoundExchange, Inc. accusing Muzak LLC of "playing a shell game to cheat artists and rights holders out of royalties." When the DMCA passed and changed the way royalty rates were calculated, Muzak was classified as a "preexisting subscription service" (PSS) entitled to continue paying earlier, lower rates. DMX, another PSS, stopped paying SoundExchange pre-DMCA rates when it restructured in 2006. When Mood Media Corporation acquired DMX, it reverted to the older, lower rates. Mood Media then began paying DMX's royalties through Muzak, which it also had acquired, at the lower rate Muzak consistently had been paying. SoundExchange sued to get Mood Media to go back to the higher rates DMX had been paying prior to its acquisition.

Muzak's motion to dismiss required the court to resolve competing interpretations of section 114(j)(11) of the DMCA. Muzak argued that the PSS rate applies to any transmissions of the same type provided prior to the enactment of the DMCA. SoundExchange argued that only the exact same transmissions that were being made pre-DMCA could qualify for the PSS rate. The District Court found that other provisions in section 114(f), as well as the legislative history, evidenced a clear intent to allow new types of services to benefit from the PSS rate.


Facebook Not Liable for Masturbation-Themed Profile

On Monday, the Northern District of California dismissed with prejudice a complaint filed by Franco Caraccioli seeking to hold Facebook responsible for harm he suffered as a result of a fake Facebook account entitled "Franco Caracciolijerkingman." The fake profile allegedly featured videos and pictures of Mr. Caraccioli "pleasuring himself." Caraccioli alleged that when he initially reported the site to Facebook, he received an email stating that Facebook had reviewed the account and "determined that Franco Caracciolijerkingman is a person who's using Facebook in a way that follows the Facebook Community Standards." Caraccioli says Facebook deleted the account after he threatened legal action.

The court found that disclaimers in Facebook's Terms of Service precluded any allegation that Facebook published or "republished" the material on the page, and therefore Caraccioli failed to state a claim for defamation, libel, false light, or public disclosure of private facts. The court further held that the Terms of Service placed restrictions on users' behavior, but did not create affirmative duties that would give rise to a negligence claim. Finally, the court found that Facebook was immune to claims seeking to hold it liable for user-generated content under section 230 of the Communications Decency Act. The erstwhile Mr. Caracciolijerkingman remains at large.


False Advertising Plaintiff Must Go After Head Alone

Russell Minoru Ono filed a putative class action lawsuit on behalf of "[a]ll residents of California who purchased Tour-Line Racquets" against tennis racket manufacturer Head. Ono alleges that Head's "extensive and long-term advertising campaign" makes false and deceptive claims that professional tennis players play with Head's latest models, when in fact the endorsing players use different rackets on the court. On Tuesday, the Central District of California denied class certification, finding that Ono failed to demonstrate that the allegedly false representations were made to all class members, given that Head's marketing campaign was fairly narrow, and Head's target market was not the same as its actual market. In other words, Ono could not establish that most or all of those who purchased the racket were exposed to the allegedly deceptive marketing messages.


James Deen Cited for Violations of LA Condom Law

California's Division of Occupational Safety and Health (Cal/OSHA)has issued citations with proposed fines of almost $80,000 against adult film production company Third Rock Productions for multiple violations of Los Angeles County condom laws and other safety laws intended to protect performers from loathsome diseases. Third Rock is owned and operated by Bryan Sevilla, a/k/a James Deen. The Cal/OSHA board recently decided not to adopt statewide regulations specifically requiring the use of condoms and other safety measures in adult films, after vigorous lobbying from the porn industry.


Hulk Hogan Distinguishes Between Public and Private Personas in Sex Tape Suit

Terry Bollea, a/k/a Hulk Hogan, testified on Monday in his $100 million invasion-of-privacy lawsuit against the website Gawker for posting a video of Bollea in flagrante delicto. Bollea claims that Gawker violated a Florida law that prohibits publication of private communications, while Gawker asserts protection under the First Amendment. Gawker cited Bollea's long history of speaking frankly and publicly about his love life. Bollea argued that those comments were made "in character," and that--in contrast to his public persona--"Terry Bollea is a normal person." Bollea gave this testimony wearing Hulk Hogan's signature bandanna.


Photographer Says ABC Stole His Weiner Video

"Visual Journalist" Paul Adao filed a copyright infringement lawsuit against ABC in the Southern District of New York on Monday. Adao alleges that the network used a clip from a video he took of former Congressman Anthony Weiner without permission.


Photographer Sues CBS Sports Over Use of University of Nevada Las Vegas Photo

On Wednesday, a Las Vegas photographer sued CBS Sports Network in the Southern District of New York for copyright infringement, alleging that the network published his photograph of University of Nevada Las Vegas football coach Tony Sanchez without permission.


NBC Boston Affiliate Sues Comcast Over Contract Termination

WHDH-TV, NBC's Boston affiliate, sued Comcast (NBC's owner) for breach of contract and antitrust violations. WHDH is seeking an injunction to stop Comcast from replacing it, alleging that the planned move would violate the agreement Comcast struck with the FCC to get approval to acquire NBC.


National Hockey League Clears Patrick Kane

The National Hockey League (NHL) decided not to pursue further investigation in connection with Patrick Kane's behavior and rape investigation stemming from an incident that occurred this past summer in upstate New York. The Erie County District Attorney's Office closed the investigation this past November after it found multiple inconsistencies in the accuser's story.

Kane currently leads the NHL in scoring and is the front-runner to win both the Art Ross (scoring title) and Hart Trophy (league MVP). Kane would be the second American to win both trophies in the same year and the first American since 1925.


New Ban on Drug Hits Russian Athletes Hard

Meldonium was added to the World Anti-Doping Agency's prohibited list in January, and Maria Sharapova tested positive for the drug later that month. Since the announcement of the failed drug test, seven other Russian athletes have tested positive as well. Meldonium, a drug widely used by Russian and European athletes, increases blood flow and the amount of oxygen taken into the body. The drug is thought to improve recovery times for athletes. It was widely distributed among Russian athletes until September 2015, when notice was given that the substance would be banned.


Maria Sharapova's Admission Sends Her Sponsors Fleeing

Within hours after Maria Sharpova's positive drug test announcement, Nike, Porsche and TAG Heuer suspended their sponsorship activities. Given that Nike and TAG Heuer have stayed silent or have been somewhat supportive of their athletes during times of controversy in the past (i.e. Tom Brady, Kobe Bryant, and Tiger Woods), many are speculating increasing pressure from social media or the fact that Sharapova is past the prime of her career as the true reason behind the sponsors' activities with Sharapova.


Pop Warner Settles Dispute Over Player With CTE

A settlement in the case of a former Pop Warner football player who committed suicide at 25 and had CTE is apparently a first of its kind and raises questions about the future of youth football. A wrongful death suit was filed in federal court in Wisconsin in 2015 for $5 million. Joseph Chernach hung himself in 2012, and his family sent tissue samples from his brain to Boston University. Severe signs of CTE were found. Chernach's family alleged that Pop Warner was "abnormally dangerous ... as it exposes children to a combative/collision sport which is likely to result in harm." The suit also alleged that coaches and staff were not properly trained.

As part of the settlement, both sides agreed to a confidentiality agreement.


New Defendant Pleads Guilty in FIFA Corruption Case

Miguel Trujillo, a Colombian working as a consultant to schedule soccer matches, plead guilty to money laundering conspiracy, wire fraud conspiracy and filing a false tax return in federal court in Brooklyn earlier this week. He also forfeited $495,000. Trujillo is the 42nd defendant in the FIFA case to plead guilty. He admitted to handling payments of bribes for several sports marketing companies, as well as his own consulting company to soccer officials from various countries and FIFA. Trujillo acknowledged paying hundreds of thousands of dollars in bribes to soccer officials.

Concurrently, Rafael Esquivel, a FIFA official from Venezuela, plead not guilty to corruption charges in federal court in Brooklyn.


Justice Dept. Appeals Ruling in Apple iPhone Case in Brooklyn

Prosecutors are appealing a decision made by Magistrate Judge James Orenstein, which held that Apple was not obligated to help the government unlock an iPhone related to a drug investigation. "Apple is not being asked to do anything it does not currently have the capability to do," argued the Justice Department in federal court in Brooklyn earlier this week.

Prosecutors argued that Apple is installing software that potentially harms criminal investigations. "Apple's software is actively impeding the execution of the search warrant in several ways." This case is being watched closely due to its potential impact on the the San Bernardino shooting case.


Erin Andrews Awarded $55 Million in Lawsuit

A jury awarded Erin Andrews $55 million in a negligence leading to emotional distress and invasion of privacy suit stemming from illegal videotaping at the Nashville Marriott in 2008. The jurors found Michael David Barrett, the man who illegally recorded the videos, 51 percent at fault and the Marriott hotel chain to be 49 percent at fault. Barrett has already served two years in prison as a result of his actions. It is expected that Marriott will appeal the decision.


Wells Fargo Charged With Fraud in Video Game Start-Up Case

On Monday, Wells Fargo and the Rhode Island Economic Development Corporation were charged with fraud in connection with a $75 million bond for a video game company based in Rhode Island. The Rhode Island Economic Development Corporation had agreed to borrow money and lend it to 38 Studios, owned by former Red Sox pitcher Curt Schilling. State officials hoped that this loan would encourage other businesses to relocate to Rhode Island.

38 Studios declared bankruptcy and the state opted to pay the debt which total almost $90 million. Neither the state agency nor Wells Fargo disclosed 38 Studios's true financials prior to issuing the bond. The S.E.C. said Wells Fargo also cut a deal with 38 Studios, which agreed to pay the bank $400,000 if the bond deal closed.


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This page contains a single entry from the blog posted on March 11, 2016 5:25 PM.

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