84053215 – lightfieldstudios

A multi-million dollar lawsuit for copyright infringement against Take Two Software, the creators of NBA 2K16 has proved to be anything but a slam dunk.  The alleged infringement concerns player avatars displaying tattoos worn by several NBA stars including LeBron James and Kobe Bryant.  Last week, Take-Two filed a motion for judgment on the pleadings arguing its display of the tattoos is de minimis and qualifies as fair use.

The plaintiff, Solid Oak Sketches, purchased the tattoos from the original artists and first filed suit in February of 2016 seeking more than $1.1 million for a perpetual license to use the designs in Take Two’s NBA 2K series.  Although it is undisputed a tattoo can qualify for copyright protection, the parties passed the question whether Take Two’s display of the tattoos constitutes actionable infringement to Judge Laura Swain of the U.S. District Court for the Southern District of New York.  The issue whether tattoos must be licensed to appear in creative works surfaced once before when Mike Tyson’s tattoo artist sued the makers of The Hangover Part II in 2011, but that case ultimately settled.

In its motion, Take Two contends the display of the tattoos is de minimis because NBA 2K16 mainly uses a full-court camera during gameplay, rendering any tattoo on an avatar’s body virtually unrecognizable.  Additionally, Take Two contends its display of the tattoos is sufficiently transformative to constitute fair use.  The motion states the players use the tattoos for purposes of self-expression while Take Two incorporates them into NBA 2K16 to deliver a more authentic and realistic gameplay experience.

Overall, Take Two warned a denial of its motion would open the door to tattoo artists seeking fees every time a player commercializes his or her likeness or even appears in public and thereby publically displays the work under 17 U.S.C. § 106(5).  “Indeed, if Solid Oak were correct, it would mean that anyone appearing in public, on a television program, or in an advertisement would need to license the display of their tattoos,” argued Take Two in its answer to the original complaint.  “This is not the law and, if it were, it would be an encroachment on basic human rights.”

Solid Oak has not yet issued a public statement, but is expected to argue Take Two’s public policy concerns are overblown as this case deals with commercial use and not the mere display of a tattoo in public.  Plus, Solid Oak could assert Take Two’s use impacts the market for derivative merchandise bearing designs of the tattoos.

Because Solid Oak registered the tattoo copyrights at issue in 2015 and the first alleged instance of infringement came with Take Two’s 2014 publication of NBA 2K14, the court precluded Solid Oak from recovering statutory damages.  However, actual damages remain on the table and could reach seven figures.

The media community has been buzzing with the news that Disney plans to launch its own digital subscription channel for movies and series content. Its current license deal with Netflix expires at the end of 2018, after which new Disney and Pixar titles will move to the new channel. Disney will also be launching a standalone ESPN channel. This is a big move in itself, but also foreshadows changes to come in the rapid evolution of the media landscape. Here are three things we can learn from Disney’s move.

There Will Be Blood.

3017556 – tug of war at the office on white

Competition among online services will be increasingly vicious. Netflix already competes online with Amazon and Hulu. Increasingly, established broadcast and cable media companies will struggle to establish their own digital services, while online providers such as Facebook and YouTube, not previously known for original content, begin to build their own libraries. Meanwhile, Verizon and AT&T have been building on their own base of phone and internet users to get into the content business. Not to be outdone, the Wall Street Journal reported just this morning that Apple has set aside $1 billion to acquire original programming. All these trends will increase the pressure on Netflix, which, unlike most of its competitors, relies on subscriber revenues as its only revenue stream.

Netflix should not be counted out, however, The company still enjoys a great advantage in the size of its subscriber base and the money it’s been willing to spend in order to build and maintain that base. Just this week, the service announced that it had snatched the immensely prolific and successful producer Shonda Rhimes away from her long standing relationship with ABC, which, ironically, is owned by Disney. Netflix’s acquisition of the comic book publisher Millarworld is a move to increase control over its own IP. The service faces considerable headwinds, however. As it shifts away from its original identity as the go-to source for old movies and TV series toward a reliance on originals productions, it begins to look just like another TV network, and must compete on their own terms with other content providers with considerably deeper pockets.

It’s All About Branding.

Consumers are already faced with a daunting selection of subscription options, with more to come. A consumer who buys all of the subscription channels available could soon end up paying more than she did for cable. The cord-cutting viewer (and even more, the viewer piling subscriptions on top of cable for access to exclusive programming) will be making choices among the many subscription options. Brand identity will be critical to these choices. Needless to say, Disney is in an especially strong position, both as an offering of library content and a promise of future quality. Niche programmers, such as the anime channel Crunchyroll also stand a good shot in this market. Their passionate fans will gladly pay a fee for programming they can’t find anywhere else.

Search Will be the Next Frontier.

Search capability is not often discussed, but will become more critical to viewer satisfaction. It’s a cliche to say that online program delivery lets us watch “what we want, when we want,” but you can’t watch what you want if you can’t find it. These frustrations will only multiply as the number of services increases. Each network currently has a search algorithm only for its own programming, and in any event, these have a long way to go to deliver custom search results. This next battleground won’t be between program services but between set-top box providers such as Roku and Amazon Fire Stick. A viewer can already get by without these devices. Most TVs have their own direct internet connections or can be hooked up to a laptop. The advantage they offer is the convenience of accessing many services and programs through one home page. The services and programs themselves will be very similar from one device to another, so we can expect that one way they will differentiate will be the sophistication with which they can serve up programs that are tailored to the user’s taste.

The West Virginia branch of the American Civil Liberties Union recently filed an amicus brief in support of John Oliver, HBO and Time Warner, all of whom have been named as defendants in a defamation lawsuit filed by coal mogul, Robert Murray, over comments made by Oliver on the comedian’s “Last Week Tonight” cable television show.

Murray, one of the largest coal mine operators in the U.S., is suing for defamation, false light invasion of privacy and intentional infliction of emotional distress. The coal mogul sued after Oliver devoted most of his June 18 show to the coal industry, which the satirist contended President Trump has exploited for political gain. Murray, who is the chief executive of Murray Energy Corp., was singled out for mockery and described as looking “like a geriatric Dr. Evil,” a reference to the balding villain in the “Austin Powers” movies.

Oliver’s team contacted Murray prior to the segment’s airing for his statement and the coal entrepreneur responded with a cease and desist letter that was ignored. In his segment, Oliver predicted that Murray would sue him, acknowledging Murray’s history of suing any media outlet that had the nerve to write unflattering pieces about his businesses.

Between 2001 and 2015, Murray filed at least nine lawsuits against journalists and news outlets that published a negative advertisement from an activist group, claiming they maligned his character and threatened his employees jobs. None ever went to trial.  In 2013, he sued the Huffington Post and a blogger for defamation involving a story that called him an “extreme coal baron” and criticized his donations to a gubernatorial candidate. That case was dismissed the following year.  In May of this year, Murray Energy sued the New York Times for libel after the newspaper published an editorial calling the company a “serial violator” of federal health and safety rules.

The ACLU brief does not pull any punches or punch lines in asking the court to dismiss the suit and reject Murray’s request for a gag order prohibiting Oliver from engaging in further episodes of what Murray claims is “ruthless character assassination.”  The brief ​contains humorous headers such as, “Anyone can legally say ‘Eat s—t, Bob!’”, “Courts can’t tell media companies how to report, Bob”, and “You can’t get a court order telling the press how to cover stories, Bob.” The brief notes that “It is apt that one of plaintiff’s objections to the show is about a human-sized squirrel named Mr. Nutterbutter, because this case is nuts.”

The brief goes on to say “This suit is beyond meritless. It is offensive to the very ideals of free speech embodied in the First Amendment.” “The fact that plaintiffs filed this case is ridiculous enough; but to pour gasoline on the fire, plaintiffs’ counsel has also filed a motion asking the court to make John Oliver not say mean things about him anymore.”

“Although this brief pokes fun at the absurdity of this case, the legal issues raised by it are anything but comical,” wrote ACLU lawyer Jamie Lynn Crofts. Crofts boiled Murray’s lawsuit down to the coal baron “not liking a television program and somehow believing that is a legally actionable offense.” She also said “It is a basic concept of free speech that you do not get to sue media organizations because you don’t like their coverage.”

The ACLU brief calls it “frankly shocking that the plaintiffs were able to find attorneys willing to file a lawsuit that is so clearly unconstitutional.”

Offensive speech and comedy are protected by the First Amendment to the U.S. Constitution. That is especially true with regard to speech about public figures and matters of public concern. Comedians like John Oliver, Stephen Colbert and Jon Stewart have, and should have, substantial latitude to impart information to their large national audiences about important issues facing the country. The communication of that information should not be prevented by courts simply because powerful people find it objectionable.

Spotify, the world’s largest music streaming service, was sued last week for over $366 million by two music publishers, Bluewater Music Services in Nashville and a group of companies affiliated with Bob Gaudio, the award-winning songwriter and member of Franki Valli and the Four Seasons.

Closeup of earbuds and smartphoneEach plaintiff claims in their lawsuit that Spotify failed to comply with the requirements of Section 115 of the U.S. Copyright Act for obtaining mechanical licenses to use the plaintiff’s songs on Spotify’s streaming service, thereby infringing the plaintiff’s copyrights. Under U.S. law, streaming companies like Spotify are not required to negotiate mechanical licenses with publishers, but they must send publishers written notices of their intention to obtain compulsory licenses. The plaintiffs claim that Spotify did not provide proper notices to them and continued to stream their songs without mechanical licenses.

When a stream occurs, it utilizes two of the exclusive rights granted to a copyright owner of a song, the reproduction right and the communication right. In the music publishing business, those are known as “mechanical rights” and “performing rights.” Performance rights are licensed in the U.S. by performing rights organizations, like ASCAP, BMI and SESAC, which each represent different catalogs of songs. Mechanical rights in the U.S. are licensed primarily through The Harry Fox Agency, which acts as a licensing agent for music publishers, but mechanical rights in many songs must be obtained from individual publishers or songwriters, who can be challenging to locate and communicate with.

This is not the first time Spotify has been admonished for failing to implement adequate procedures to notify song proprietors of Spotify’s intention to add their songs to its playlist. In 2016, Spotify reached a $30 million settlement with the National Music Publishers’ Association (NMPA) for unpaid mechanical royalties and Spotify recently settled a class action suit by a group of songwriters led by David Lowery for $43.3 million. The largest members of the NMPA are the major music publishing companies, whose parent companies own a combined 18% of Spotify, according to the recent lawsuits. The lawsuits claim the three major U.S. record companies stand to make $700 million each if Spotify pursues a public offering (which is anticipated this year), thus fostering speculation those companies settled the lawsuits to protect that windfall.

In those prior lawsuits, Spotify emphasized the difficulty of identifying and contacting each song publisher and the company agreed in the settlements to “work collaboratively to improve the gathering and collecting of information about composition owners to help ensure those owners are paid their royalties in the future.” The complaints in the recent lawsuits claim that Spotify has “built no infrastructure capable of collecting compositional information and failed to ask for such information.”

In most countries outside the U.S., mechanical rights are licensed via a centralized collective licensing organization, which represents all the song owners in the particular country. Even if music publishers license their songs directly to a streaming service, the mechanical rights “society” in their country usually handles the administration associated with collecting and paying out the royalties due. In the U.S., there is no industry-wide or national organization to assist with processing mechanical licensing and collecting mechanical royalties

Although the U.S. music industry has acknowledged that a global music rights database is necessary, no one has yet made it a reality. Everyone seems to agree that songwriters and music publishers should be paid properly when their songs are streamed, and some argue it is the responsibility of the well-financed streaming firms to design a system to identify songs and make appropriate payments. Others argue the music publishing establishment should create a industry-wide system for identification and payment.

If the U.S. were to adopt the nationwide collective licensing model utilized in almost all other countries and create a centralized mechanical licensing entity, the recent lawsuits against Spotify would never have been necessary. Unfortunately, that is not likely to occur due to the entrenched and vested business interests involved, and the reluctance to collaborate and share databases of song information, which many consider to be proprietary.

Copyright: <a href='//www.123rf.com/profile_ericbvd'>ericbvd / 123RF Stock Photo</a>
Copyright: ericbvd / 123RF Stock Photo

A New York court of appeals last week declared the Orioles and Nationals will play extra innings in the teams’ longstanding dispute over fees the Orioles’ Mid-Atlantic Sports Network (MASN) owes the Nationals for broadcasting their games.

The teams have shared the network since the Nationals (formerly the Montreal Expos) arrived in Washington D.C. for the 2005 season.  The Orioles, incensed that the Nationals were consuming about a third of their market, broadcast Washington’s games at a substantial discount from 2005 to 2011 after which the MLB obligated Baltimore to pay fair market value.  After MLB’s Revenue Sharing Definitions Committee (RSDC) ruled MASN owed the Nationals $298 million for broadcast rights from 2012 to 2016, the Orioles cried foul and claimed the panel was biased.  MASN cited opposing counsel’s duel representation of Washington and the MLB in unrelated matters as a red flag, along with MLB’s $25 million advance to Nationals’ owner Ted Lerner to reportedly placate Lerner for having to sell MASN broadcast rights at a discount from 2005 to 2011.  MLB responded telling The Baltimore Sun the loans were “fully justified [and] done with the Orioles’ and MASN’s knowledge and encouragement.”

Associate Justice Richard Andrias, speaking for a 3-2 majority, found MASN’s claims unpersuasive because the panel will consist of new members and the Nationals will use new counsel.  Additionally, the Court found considerable significance in the teams’ decision to assign all disputes over telecast fees to the RSDC, an expert body with specialized knowledge on the apportionment of broadcast fees for sports teams, yet reserved other disputes for the MLB commissioner and/or American Arbitration Association (AAA).

The decision was not a complete loss for Baltimore, as the Court vacated an award MASN found to be unfair.  However, if performance has any impact on value, the Nationals appear to hold an edge.  After six consecutive losing seasons, the Nationals clinched playoff births in three of their last five campaigns, two of which came after the first RSDC panel rendered its decision.  Washington is also well-positioned for another post-season appearance with a comfortable 10.5 game lead over the rebuilding Braves in the National League East.

Counsel for the Orioles told The Hollywood Reporter that MASN will explore appealing the Court’s ruling before submitting to the RSDC for what would appear to be a final showdown for these crosstown rivals 12 years in the making.

Copyright: <a href=’https://www.123rf.com/profile_pasta77′>pasta77 / 123RF Stock Photo</a>

An ugly dispute between two reality stars has the potential to create precedent on the responsibility of television networks for posts by its talent on social media sites.

The protagonists are Mykel Hawke and Joseph Teti, both veterans of Special Forces. The seeds were sown when Teti, who was Hawke’s former employee, was given a show by Discovery Network called Dual Survival. Hawke already had a similar show on Discovery, entitled Man, Woman, Wild. Things only got worse after Hawke’s show was cancelled. The parties traded attacks on Facebook. Hawke accused Teti of complicity in a fatal helicopter crash and of misrepresenting his military service. Teti questioned Hawke’s mental health. Litigation ensued.

The battle ultimately involved four juridsictions. In Texas, Hawke sought a protective order against Teti’s alleged stalking. Teti’s riposte was to file a defamation action in North Carolina. Hawke counterattacked in South Carolina, bringing his own suit for defamation and tortious interference. In a creative move, Hawke’s lawyers named Discovery as a co-defendant in this action. Their theory is that Discovery is responsible for the social media posts of its employee Teti. The complaint alleges that Discovery “failed to take action to stop the defamatory statements from being posted online,” and failed to “adequately train personnel in public interaction, when and what types of communications employees should say publicly and/or put into print.”

Teti was dismissed from the South Carolina suit for lack of personal jurisdiction. Discovery, now sole defendant, moved for summary judgment and subsequently removed the case to federal court in Maryland.

Discovery’s first argument for summary judgment goes to the underlying alleged defamation: simply that the facts will not support a claim that Teti’s statements meet the legal standard for defamation.

The network moves on to rebut its alleged direct liability for the posts. It says that in response to Hawke’s complaints about Teti’s posts on the official Dual Survival Facebook page, it applied a filter to block any posts containing Hawke’s name. It also claims that Hawke has been unable to state with certainty whether particular statements were made on an official page or on Teti’s personal social media accounts. Discovery also denies that it ever directed or encouraged Teti to say the things he did.

As far as vicarious liability goes, Discovery argues that Teti’s remarks were “outside the course and scope of his duties at Discovery.” It asserts that Teti made the posts entirely on his own, on his own time, not on the set, and using his own internet connection and devices.

Discovery also makes an interesting statutory argument under Section 230 of the Communications Decency Act. That section provides that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” It is due to this section that, for example, it would likely have been futile for Hawke to sue Facebook itself for the contents of the Dual Survival Facebook page. Discovery argues that by creating and administering the page on which third parties could share content, it should be likewise regarded as an “interactive computer service” with complete immunity from Hawke’s causes of action.

In just a few short years, social media have transformed our world. Cases such as this one have the potential to establish the legal principles that will guide parties’  behavior going forward.

The Jukebox musical is alive and well and living on Broadway. From the songs of Gloria Estefan to Carole King, from Frankie Valli to Abba, we are amidst a 20-year old trend to present pop music’s biggest hits on the live theatrical stage. Indeed, blockbusters like Jersey Boys, Mamma Mia and Rock of Ages have encouraged music rights holders to exploit their catalogues in what has proven for some to be a very lucrative market, and the 2018-2019 Broadway season continues to welcome jukebox properties to the Great White Way.

Woman singing with microphone
Copyright: arturkurjan / 123RF Stock Photo

The licensing of a non-dramatic musical composition (for example, a pop song) for use within a dramatico-musical stage play (aka a musical) is often misunderstood by creatives and rights holders alike. To debunk some commonly held misconceptions, here is my 60-second elevator summary:

  1. A grand right is a right that subsists in the entire dramatico-musical play as a single work – not the music in and of itself. As such, a “grand right” combines the elements of the music, lyrics and book of a dramatico-musical or operatic work into a single right. A grand right is usually owned and controlled by the theatrical producers and/or composers who create the dramatico-musical or opera. When your child’s middle-school performs Annie for the ninth year in a row, that performance is the exercise of a grand performance right.
  2. If you are looking to incorporate existing, non-dramatic compositions into a dramatic work, for example, in the creation of a jukebox musical, you will need to obtain a dramatic performance license. Whereas performance rights societies such as ASCAP are able to grant licenses for non-dramatic performances of non-dramatic compositions (e.g., to allow your gym to play Rihanna), only the copyright owner of the non-dramatic composition can grant a dramatic performance license – customarily, the music publisher.
  3. Always keep in mind, dramatic performance licenses do not include a grant of life rights and/or underlying rights to the story of the writers or performers of the non-dramatic compositions. If you intend on acquiring a dramatic performance license to tell the story of your favorite band, you will also need to obtain some kind of life rights and/or underlying rights agreement.

Understanding these distinctions can save creatives and producers time and expense in the long run, particularly in this evolving and competitive ancillary rights market.

Charlie Nelson Keever writes:

The Supreme Court ruled this morning that a federal law that prohibits the government from registering trademarks that “disparage” others violates the First Amendment.

Members of an Asian-American rock band filed a lawsuit after the U.S. Patent and Trademark Office (PTO) kept the band from registering its name, The Slants, a reference to the derisive slur sometimes wielded against Asian-Americans. The PTO said the name was likely to denigrate a significant number of Asian-Americans in violation of the Lanham Act, which prohibits any trademark that could “disparage … or bring … into contempt[t] or disrepute” any “persons, living or dead.”

Rock star cartoon
Copyright: kennykiernanillustration / 123RF Stock Photo

The band’s founder, Simon Tam, said the point of the band’s name is just the opposite. “[Growing up] the notion of having slanted eyes was always considered a negative thing… Kids would pull their eyes back in a slant-eyed gesture to make fun of us. … I wanted to change it to something that was powerful, something that was considered beautiful or a point of pride instead.”

The Supreme Court sided with The Slants.

“The disparagement clause violates the First Amendment’s Free Speech Clause,” Justice Samuel Alito wrote in his opinion for the court. “Contrary to the Government’s contention, trademarks are private, not government speech.” Alito noted that the government “still has an interest in preventing speech expressing ideas that offend,” but suggested the “disparagement clause” was overly broad.

This case could have a broad impact on how the First Amendment will be applied in other trademark cases. In 2014, the PTO canceled the Washington Redskins’ trademarks, finding the term “Redskins” disparages Native Americans under the same statutory clause that was quashed by the Supreme Court today. The team is calling today’s ruling a win. Redskins attorney Lisa Blatt said in a statement, “The Supreme Court vindicated the team’s position that the First Amendment blocks the government from denying or cancelling a trademark registration based on the government’s opinion.” The Redskins’ case has been on hold in the U.S. Court of Appeals for the 4th Circuit in Richmond, pending today’s decision.

Charlie Nelson Keever is a summer associate in the firm’s Los Angeles office.

Sugar Hero Video Screenshot
SugarHero Video Screenshot http://www.sugarhero.com/snow-globe-cupcakes-gelatin-bubbles/

The Food Network is snowed in controversy after popular food blogger, baker and CSO (“Chief Sugar Officer”) of the recipe site SugarHero.com Elizabeth LaBau filed for copyright infringement this month alleging the network copied her video tutorial on how to create “snow globe cupcakes.”

LaBau first published the recipe in 2014 and experienced so much acclaim that she posted a one-minute video tutorial to her site last December, which accumulated approximately 5.7 million views on Facebook to date.  The video describes step-by-step how to coat small balloons in sheets of gelatin.  The gelatin hardens overnight into translucent domes which are then placed on top of a regular cupcake frosted with vanilla buttercream and coconut shavings to complete a delectable winter wonderland.

LaBau alleges that three weeks after she posted her video, the Food Network released a similar video on its Facebook page and rebuffed LaBau’s requests for attribution. Although mere lists of ingredients are not protected under copyright law, a video that describes, illustrates or explains a recipe could qualify for protection.  As a result, LaBau’s complaint focuses solely on her video and contends it was willfully copied “shot-for-shot” featuring the same camera angles, colors, lighting, text, and other elements.  The Food Network’s video attracted approximately 125,000 likes and 11 million views.

LaBau seeks monetary damages for lost profits, emotional distress and an injunction prohibiting the Food Network from further dissemination of its video.  The Food Network has yet to publish an official response.

Copyright: ratru / 123RF Stock Photo

We reported previously that LA City Attorney Mike Feuer had brought misdemeanor criminal charges against five casting workshops and 25 individuals under the Krekorian Talent Scam Prevention Act. Feuer alleged that the workshops–purportedly for training actors in audition techniques–were actually pay-to-play schemes in which aspiring thespians would pay for the opportunity to be seen by casting directors.

On June 5, one of the accused, Bradley Sachs, pleaded no contest to the charges. He was placed on 36 months summary probation and sentenced to serve either 10 days in jail or perform 150 hours of community service. He also agreed to pay investigative costs, and not to be involved in any talent training service until completion of his probation. Sachs’ company, The Actors Alley, shut down when the charges were first announced.

Although it had previously expressed support for the defendants, the Casting Society of America declined to make a statement on Sachs’ plea on the grounds that he is not a CSA member.