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William Shakespeare’s character Juliet famously asked Romeo “What’s in a name?” The question still rings true today, and the answer may be, well, a lot.

The Power of a Name

The value in Grammy-award winning singer Rihanna’s name, her surname specifically, is at the center of a legal dispute between her and her father.

Robyn Rihanna Fenty, known worldwide as Rihanna, sued her father, Ronald Fenty (“Mr. Fenty”) alleging he used their surname, Fenty, to mislead consumers into thinking she was associated with his business, Fenty Entertainment LLC. Rihanna filed suit in the U.S. District Court for the Central District of California against Mr. Fenty and his business partner, Moses Joktan Perkins, claiming a violation her right of publicity, false designation of origin, and false light, among other claims. She is seeking damages, an injunction to stop her father from using her “FENTY” trademark to sell or promote any goods or services, and a declaratory judgment.

Known worldwide as a pop music star and beauty icon, Rihanna is also a prosperous businesswoman.  According to the complaint, she has been using her surname professionally and in connection with her brand and business ventures since at least August 2012. Through her company, Roraj Trade, LLC, she owns U.S. trademark registrations for a series of marks containing her surname, including “FENTY BEAUTY”, “FENTY BEAUTY BY RIHANNA”, and “FENTY GLOW”. She also owns trademark registrations in multiple foreign jurisdictions for the marks: “FENTY BEAUTY”, “FENTY BY RIHANNA”, FENTY”, and “FENTY FRAGRANCE”. Rihanna’s trademarks cover a number of products, including makeup, fragrances, and sneakers. “FENTY BEAUTY” has become one of Rihanna’s most popular brands, standing out at the forefront of popular cosmetics retailer Sephora, and being named one of Time Magazine’s 2017 “Inventions of the Year.

In 2017, Mr. Fenty opened Fenty Entertainment LLC, described on its website as an entertainment company “cultivating new talent and developing TV and media platforms.” His company is registered as an LLC in California and is also described as a production company developing “motion pictures, live concerts, and record producing.” In sum, Mr. Fenty’s business brands itself as offering services in the entertainment industry – the same industry in which his daughter has become of the biggest stars. With Rihanna’s visible brand campaigns, such as “Fenty Beauty”, “Fenty x Savage”, “Fenty x Puma” – and now her father’s Fenty Entertainment LLC…use of the Fenty name seems to leave room for confusion.

Supporters of Mr. Fenty’s business might respond: “Well, it’s his last name, too.” But what rights does a party have to their own last name?

Can A Surname Be Trademarked?

It depends. U.S. federal trademark law doesn’t allow an applicant to register a surname that is “primarily merely a surname” on the Principal Register.  15 U.S.C. §1052(e)(4).  This means there is no protection on the Principal Register for a surname that generally has no meaning outside of being someone’s last name.

On the other hand, if a surname has secondary meaning, also known as “acquired distinctiveness,” it’s eligible for protection under federal trademark law. A trademark registration applicant must prove that consumers associate the surname with a brand rather than simply thinking of it as someone’s last name.  A quick example is fast-food chain McDonald’s. While “McDonald” is a surname, McDonald’s Corporation owns the registered mark “McDONALD’s” in connection with restaurant services because the word “McDonald’s” has acquired a secondary meaning as a fast food restaurant with the golden arches.

Similarly, in Rihanna’s complaint, she argues that the “FENTY” mark, is “inextricably intertwined” with her professional persona, reputation, and businesses.  She argued that her “FENTY” mark has secondary meaning because relevant consumers understand the association with Rihanna when they see the mark “FENTY”.

It’s important to note that Rihanna owns the “FENTY” trademark in connection with beauty, makeup, and fashion products.  However, her complaint does not raise a trademark infringement claim, perhaps because Mr. Fenty filed a trademark application to register “FENTY” in connection with resort hotel services, not beauty products. His trademark application is still under review by the U.S. Patent and Trademark Office, which issued an initial refusal to register “FENTY”, alleging that it is primarily merely a surname when viewed in connection with hotel resort services (and citing 677 public records of individuals with the surname Fenty on the LEXISNEXIS® surname database).

Rihanna’s complaint brought claims of false designation of origin, suing her father for allegedly using their last name (her trademark) in his business to mislead consumers to think she is associated with his company.  Rihanna argues that the strong recognition of her “FENTY” trademark combined with her father’s choice to name his business Fenty Entertainment, and Rihanna’s overall influence in the entertainment industry confuses consumers into thinking Fenty Entertainment is associated with Rihanna, Roraj, and her Fenty Beauty product line.

Agency Law

The complaint also raises principles of agency law – it alleges that Mr. Fenty misrepresented the company as having authority to submit offers and enter into contracts on behalf of Rihanna. One notable allegation is that Fenty Entertainment engaged in conduct to book Rihanna for a series of Latin American concerts.

The complaint further alleges that until just about four months ago – October 2018, a press release on Fenty Entertainment’s website read “Ronald Fenty, father of superstar recording artist Rihanna, today announced the launch of Fenty Entertainment with his daughter Robyn ‘Rihanna’ Fenty”, implying an allegedly false affiliation with Rihanna.  According to the complaint, Fenty’s social media accounts stated that the company was affiliated with Rihanna until as recently as November 2018.

The complaint claims that while Mr. Fenty is Rihanna’s father, “he does not, and has never had, authority to act on Rihanna’s behalf.”

Even though Rihanna is a superstar entertainer, her “FENTY” trademarks largely protect her services in beauty, fashion, and fragrances. What does this mean for her father’s business as it relates to the entertainment industry?

The U.S. District Court for the Central District of California will decide.

The TVEyes v. Fox saga has reached its conclusion. Following the Supreme Court’s denial of TVEyes’ petition for certiorari, the video clipping service had little choice but to settle Fox News’s copyright infringement lawsuit. The parties filed a permanent injunction in the Southern District of New York under which TVEyes agreed to eliminate all Fox News content from its database. This injunction is a final settlement and protects TVEyes from having to defend a claim for damages and attorneys’ fees.

TVEyes is a subscription service that records virtually everything on TV. By syncing the video with closed captioning data, it’s able to make this library searchable by keyword. Subscribers can retrieve 10-minute clips around the keyword. Users include news organizations, the White House, members of Congress and the military. Fox News brought a copyright infringement suit against TVEyes in the Southern District, which TVEyes defended successfully on fair use grounds. The Second Circuit reversed the District Court, primarily on the ground that the clipping service deprived Fox News of licensing revenue that it would otherwise be able to realize.

This case attracted much attention, with free speech organizations such as Wikimedia and the Electronic Frontier Foundation arguing in support TVEyes’ position that its redistribution of clips is “transformative” and serves an important social role.

It remains to be seen whether other content owners will piggyback on Fox News’s success and demand that their content be removed from the site, or whether TVEyes will be able to develop a business model under which they pay for content.

It’ll be hard to dance out of this one.

An actor, an influencer, and a rapper have filed lawsuits against Epic Games Inc., the creator and publisher of “Fortnite”, over the use of certain dances in the game, alleging copyright infringement.  Fortnite is a survival shooter, battle royale, “king of the hill”, or, last person standing video game.  The game has become extremely popular, with Epic reporting to media outlets that it now has up to 200 million players.  Players can create their own worlds and battle arenas — and at the center of controversy, players can choose what dance their characters perform when they win.

Alfonso Ribeiro, best known for his role as the beloved character of Carlton on the 1990s hit television show “The Fresh Prince of Bel Air”, is suing Epic over the use of a dance he made popular on the show. The dance, usually referred to as “The Carlton Dance”, can be seen in the game as a function when a player wins. Fortnite calls the dance “Fresh” and game players can purchase various dances known as “emotes” for their characters, including another called “Rambunctious” which mirrors a dance performed by Will Smith’s character on “The Fresh Prince of Bel Air”. These are just a few examples of multiple in-game purchases and downloadable content (DLC) that have generated wild amounts of money in revenue for Epic — despite the fact that the game itself is free to download and play.  According to Variety, analysts estimate Fortnite is generating $100 million per month.

In Ribeiro’s lawsuit, he asked the U.S. District Court for the Central District of California to stop Epic from using, showing, or selling the Carlton dance. Ribeiro is in the process of registering the dance under federal copyright law, a requirement to bring a copyright infringement claim.  Ribeiro argues he created the dance and made it famous over the years during appearances, including most recently during his participation on ABC’s “Dancing With The Stars” TV show. Ribeiro further claims the dance is “inextricably linked” to his identity, celebrity, and likeness.  On the other hand, the creators of The Fresh Prince of Bel Air might argue that they maintain ownership of rights to the dance, as many talent agreements contain results and proceeds provisions that give all rights in content produced on a show to the producers, not the talent.  Thus, the battle ensues over when exactly the dance was created and by whom.

But can a dance be protected by copyright?  The U.S. Copyright Act protects “original works of authorship fixed in any tangible medium of expression”.  17 U.S.C. § 102.  Visual works under the umbrella of protection include choreographic works and choreographed stage performances.  Ribeiro argues his dance constitutes a choreographed work subject to copyright protection.  And he isn’t the only celebrity to file suit against Epic.

Influencer Russell Horning, known among millennials as “Backpack Kid”, also filed suit against Epic seeking to stop the use of his popular dance, “The Floss”, in Fortnite.  Horning is also suing Take-Two Interactive, the maker of the popular video game franchise “NBA 2K” for the use of the dance without his permission. Horning quickly became a social media influencer after his performance with Katy Perry on “Saturday Night Live” in 2017.  He boasts 2.3 million Instagram followers and often posts comical videos of himself dancing.  He also recently released an EP, making “The Floss” an even more important asset of his entertainment career.

Similarly, rapper 2 Milly filed a copyright infringement lawsuit over the use of his dance, the “Milly Rock”, in Fortnite.  Fortnite presents the dance for purchase as the “Swipe It” emote.  The Milly Rock dance gained popularity due to 2 Milly’s 2015 song of the same name.  His argument parallels those of Ribeiro and Horning, claiming ownership and authorship of the dance, seeking damages for its use without permissions.  2 Milly is seeking punitive and exemplary damages.

All three lawsuits were filed in the U.S. District Court for the Central District of California.  Along with copyright claims, the lawsuits include claims for violation of the right of publicity and unfair competition.  Horning also brought claims of trademark infringement and false designation of origin.  It seems like the combination of these claims could create a Fort-nightmare for Epic Games.

These lawsuits come during a rise of celebrity disputes with video game content creators for the use of their name and likeness without their permission.  We’ve covered similar topics here.

The battle of the briefs continued as Fox News urged the Supreme Court to take a pass on a petition for certiorari from TVEyes in a copyright case that has drawn considerable attention. As regular readers will recall, TVEyes records virtually everything on TV into a fully searchable database that it sells to subscribers. Fox News sued for copyright infringement; TVEyes asserted a fair use defense, which was rejected by the Second Circuit. TVEyes is asking the Supreme Court to overturn that decision.

TVEyes based its defense on the contributions its service makes to free speech and media criticism. Easy access to broadcast content, it argued, is essential for critics, commentators and researchers to keep pace in a chaotic and polarized media environment. TVEyes also asserted that the Circuit Court gave too much weight to the alleged economic harm to Fox when it applied the notoriously slippery four-factor fair use test.

Fox challenged the basic premise of TVEyes’ argument. “The Second Circuit’s holding does not concern political dialogue, commentary, criticism, or the First Amendment,” it wrote. “Criticism of the media is alive and well, and is in no way dependent on TVEyes’ efforts to profit from copying and distributing the media’s copyrighted content.” According to Fox, the supposed social value of TVEyes’ service is no more than a smokescreen to persuade the Court to overturn a ruling that “does not implicate a split in the circuits, involve an important unsettled question of federal law, or otherwise raise a cert-worthy issue.”

The network also argued that the Second Circuit’s application of the fair use factors does not deserve review. That court’s “careful balancing of the four-factor fair use test was an inherently fact-bound exercise, and TVEyes’ narrow disagreement with the court’s finding as to one of those four factors does not begin to warrant this Court’s attention.”

The parties’ differences could not be more stark. Will the Supreme Court let the Second Circuit decision stand, or hear the case and create a fair use precedent the could be of great importance?

We report, you decide.

 

In dueling motions for summary judgment over copyright infringement claims, The Warhol Foundation butts heads with a photographer whose photo was a source for Warhol’s “Prince Series.”

Lynn Goldsmith is a self-described “rock and roll photographer” who has been photographing music legends since the early 1970s. The photograph in question was from a 1981 shoot she did for Newsweek with the late pop star Prince. Goldsmith says she licensed the photo to Vanity Fair for a one-time use as an artist reference for an illustration, and that’s how the photograph ended up in the hands of Pop Art pioneer Andy Warhol. Warhol used the photo as the basis for one of his iconic celebrity portraits, producing 12 paintings, two drawings, and two unpublished prints (the “Prince Series”).

In April 2017, Warhol’s estate sued Goldsmith, asking the court for a declaration that the use of the photo in the Prince Series does not violate Goldsmith’s copyright because Warhol’s works were “entirely new creations.”  Goldsmith responded a few months later, filing a counterclaim for copyright infringement.

Now, the District Court for the Southern District of New York must decide whether Warhol’s use of the photograph infringes upon Goldsmith’s copyright.

The Warhol Foundation argues that the Prince Series doesn’t count as an infringing derivative work because it does not contain any of the protectable elements of Goldsmith’s photograph. “Warhol’s signature silk-screen technique (and, in some cases, freehand drawings) deliberately stripped away every protectable element of the underlying photograph… the result… is that the only commonality remaining between Warhol’s Prince Series and [Goldsmith’s] photograph is the rough outline of Prince’s face – which cannot be copyrighted as a matter of law.”

Furthermore, even if Warhol’s Prince Series does contain derivative works, The Warhol Foundation says that Warhol made fair use of Goldsmith’s photo by “transforming” not only the photograph itself, but also the message it conveys. Among other artistic choices, Warhol: “deliberately cropped Prince’s head so that it appears disembodied… stripped away the range of tones and texture… painted many of the works with multiple layers of bright and exotic acrylic paints; and superimposed a floating, freehand sketch of the outline of Prince’s head.” Warhol transformed the message as well, the Foundation argues, creating an image of Prince “as an icon, not a person,” to comment on the impact of “celebrity and contemporary conditions of life.” The Second Circuit, the Foundation points out, has recognized this very quality in Warhol’s art, noting that “[m]uch of Andy Warhol’s work, including work incorporating appropriated images … comments on consumer culture and explores the relationship between celebrity culture and advertising.” Cariou v. Prince

Finally, the Foundation argues that Warhol’s art market is distinct from Goldsmith’s. While Warhols go for hundreds of thousands of dollars at the finest art galleries and auction houses, Goldsmith typically sells her photographs for low single-digit thousands, primarily through galleries that focus on rock-and-roll photographs and memorabilia.

For her part, Goldsmith cautions that this case may have catastrophic consequences for photographers. She argues a holding that Warhol’s “superficial revisions” constitute transformative use would “give a free pass to appropriation artists and destroy derivative licensing markets for commercial photographers whose works are used without permission.”

It’s worth noting that, in a landmark decision where the California Supreme Court applied the copyright fair use “transformative use test” as the First Amendment test for protected speech in the right of publicity context, the Court specifically pointed to Andy Warhol’s celebrity portraits as a paragon of what should be deemed a transformative use of a celebrity’s image: “Through distortion and the careful manipulation of context, Warhol was able to convey a message that went beyond the commercial exploitation of celebrity images and became a form of ironic social comment on the dehumanization of celebrity itself.” Comedy III Productions, Inc. v. Saderup, Inc., et al. 

Goldsmith points out that things have changed since Warhol’s time: “In today’s digital world, anyone can easily modify a photograph on a computer to add high contrast, coloration and artifacts.” Warhol, she argues, “did little more than that.”

The Southern District of New York will decide if it agrees.

Charlie Nelson Keever is a law clerk in the firm’s Litigation Department, based in its Los Angeles office.

One copyright lawsuit says the answer is “no.”

In a case against Take Two Interactive, the maker of the popular “NBA 2K” video game franchise, Solid Oak Sketches LLC argues LeBron James can license his likeness, but cannot license images of his tattoos due to copyright law.

Solid Oak claims it owns the images of multiple NBA players’ tattoos including LeBron James, Eric Bledsoe, and retired player Kenyon Martin, in a September 22, 2018 filing that opposed Take Two’s motion for summary judgment.

“NBA 2K” games allows users to play simulated NBA basketball games – complete with life-like images of prominent NBA players. With a spot-on depiction and digital recreation of an athlete like LeBron James comes the depiction of his tattoos – many of which are recognizable to fans and gamers alike – and the ensuing battle over who has ownership and control to license those images.

Solid Oak purchased the copyright to the images of the tattoos from actual tattoo artists. Now the company claims it – alone – owns the copyright to the tattoos. Take Two claims that James gave it permission (through the NBA as a third party) to use his name, image, and likeness in the video game. So, who’s right? Both parties could be.

Dual rights in a photo

Solid Oak’s recent motion argues there are two rights that content creators (and licensors) must be aware of when dealing with a photograph. First, the right of publicity, including name, image, likeness and how those can be used commercially. This means James can give a company permission to use his name, photos of him, and generally the way he looks in an advertisement, for example, to generate revenue. Solid Oak does not assert any interest in this right.

What it does assert is that it owns the copyrighted image of James’s tattoos. A copyright contains a bundle of rights, including the rights of reproduction and public display. According to Solid Oak, both of these rights were infringed by depiction of the tattoos in NBA 2K.

As a result, Solid Oak concedes that LeBron James owns his right of publicity, but argues that he has no power over use of the copyrighted image of tattoos on his body.

LeBron James: ‘I Have the Right to Have My Tattoos Visible When People or Companies Depict What I Look Like”

LeBron James feels differently. On Friday August 24, 2018, he testified on behalf of Take Two, stating “my understanding is that the tattoos are a part of my body and my likeness, and I have the right to have my tattoos visible when people or companies depict what I look like.”

Take Two argues that a ruling in Solid Oak’s favor would allow it to “shake down” any TV show or program. This could include NBA games broadcast on TV where well-known players and their tattoos are visible.

Does this mean LeBron James and other players could potentially violate copyright laws by simply appearing onscreen?

Potential Slippery Slope

Take Two argues there is a risk of chilled speech and content suppression if the court rules NBA players must secure licenses from tattoo artists prior to making appearances.

Earlier this year, Take Two argued its use of the tattoo images is protected under the fair use doctrine and the de minimis standard. However, U.S. District Court Judge Laura Taylor Swain declined to dismiss the case in March on either ground, seeking more facts.

One solution could be for NBA players to obtain signed releases from tattoo artists for each appearance depicting the player. The downside is this would significantly increase the burden on players to clear each appearance with a third party, leaving them with little control. This could be the result if the court rules in Solid Oak’s favor.

LeBron James was the highest rated player in “NBA 2K17,” indicating his prominence in the game, particularly with game users. But how big is the market for tattoo licensing? One expert for Take Two claims there is no tattoo licensing market for video games. Now, it is up to the court to weigh expert testimony on user preferences in “NBA 2K” and just how prominently the tattoos are displayed.

The court’s decision will likely affect the longstanding relationship between tattoo artists and NBA players – for better or for worse.

Mikella Persons Wickham is a law clerk in the firm’s Entertainment Department, based in its Los Angeles office.

After losing on its first attempt, the Walt Disney Company managed to turn the tables on Redbox to obtain a preliminary injunction against Redbox’s sale of movie download codes.

The case arose out of Disney’s marketing of  “Combo Packs” of Disney movies, which include a DVD, Blu-Ray disc and digital download code. Redbox was legally purchasing the Combo Packs, then opening the packages and selling the download codes on its website separately from the physical discs. This, Disney claimed, encouraged consumers to violate the terms of copyright licenses set forth on printed inserts in the Combo Packs and warnings on the download websites Disney Movies Anywhere and RedeemDigitalMovies, which purport to restrict use of the codes only to the owners of the discs.

Disney applied for a preliminary injunction in February of this year. The motion was denied, but on surprising grounds. Both parties focused their arguments on the first sale doctrine, which they expected would be dispositive. The first sale doctrine provides that once a copyright owners permits the sale of a copy of its work, it cannot prohibit subsequent sales or transfers. Both sides agreed that this doctrine permitted Redbox to sell or rent the DVD and Blu-Ray discs without restriction. Redbox asserted that the paper slips containing the download codes were legally indistinguishable from physical discs. Disney’s response was that the codes were not equivalent to copies of the movies, but only keys to permit consumers to create copies on their own computers.

District Judge Dean Pregerson sided with Disney on the first sale issue, but refused to grant the injunction on the grounds of misuse of copyright. The misuse claim turned on the rather narrow ground that the specific language of the license agreementsfor the download codes was unduly restrictive. The license agreements for downloads on the RedeemDigitalMovies required redeemers to represent that the are currently “the owner of the physical product that accompanied the digital code at the time of purchase.” Similarly, the terms of use on the Movies Anywhere website only allow registered members to “enter authorized . . . Digital Copy codes from a Digital Copy enabled . . . physical product that is owned by [that member].” The court interpreted this to mean that if a consumer transferred ownership of the physical disc (clearly permitted under the first sale doctrine), she would forfeit the right to download the digital copy.

As I discussed in a previous blog, this decision offered Disney the simple recourse of redrafting the license terms on Combo Pack boxes and download sites. The studio did so, beginning with the Black Panther Combo Pack, and renewed its quest for a preliminary injunction. The new language does not condition download rights on ownership of the discs, but states, “Digital code redemption requires prior acceptance of license terms and conditions,” and further, that “The digital code contained in this package may not be sold separately.” Judge Pregerson found that these changes were sufficient to overcome Redbox’s claims of copyright misuse: “Under the old terms, a Combo Pack owner who disposed of the discs was indeed left with a worthless code because continued possession of the discs was a condition of digital access. Now, however, digital access is conditioned not on possession of the discs, but on the manner of Code acquisition. A Combo Pack owner who disposes of the discs is left with the same digital access rights he or she always possessed.”

Although Redbox can continue to sell codes subject to the old licenses, this decision will presumably shut down future sales. More importantly, the case establishes a precedent under the first sale doctrine that will certainly be welcome to content owners seeking to control their digital rights.

Earlier this year, the leading online pornography site PornHub announced a ban on celebrity “deep fakes.” These are videos in which AI technology is used to place a celebrity likeness seamlessly over existing footage. The site stressed its commitment to the proposition that pornography must be consensual on the part of both makers and consumers, while deep fakes are tantamount to forced nonconsensual sex acts by the celebrities depicted. In a statement to Vice, PornHub’s position was unequivocal:  “We do not tolerate any nonconsensual content on the site and we remove all said content as soon as we are made aware of it. Nonconsensual content directly violates our TOS and consists of content such as revenge porn, deep fakes or anything published without a person’s consent or permission.”

The reference to revenge porn is particularly interesting, since this has emerged recently as a hot topic in the law. Unlike deep fakes, to which the celebrity has given no consent whatever, the victim of revenge porn generally participated in the creation of the erotic content only to have it disseminated later on the internet to embarrassing (to say the least) effect, usually by an ex-lover. Several states have sought to curtail revenge porn by means of criminal statutes, only to face challenges on First Amendment grounds, including from the ACLU.

The Hollywood studios have raised similar arguments regarding deep fakes. The MPAA, the lobbying organization for the major studios, has come out in opposition to a proposed New York statute criminalizing the use of “digital replicas” for pornographic purposes. In a memo setting out its reasoning, the MPAA notes that the bill lacks protections for expression that is clearly within the ambit of the First Amendment such as news reporting, commentary and analysis. The memo also points out the notorious slipperiness of defining pornography at all. (Although not alluded to in the memo, no less a person than Justice Potter Stewart could do no better than to throw up his hands and declare in a famous quote, “I know it when I see it.”)

By enshrining the right to free speech in the Constitution, the Founding Fathers insured that the United States would have a uniquely freewheeling public culture. Those estimable gentlemen could not have conceived, and, however open-minded for their times, would likely not have approved the terms of the current debate over deep fakes and revenge porn, but the vigorous clash of principles can yield surprising results and remains one of the great strengths of our system.

Joshua Bornstein writes:

U.S. Supreme Court building in Washington, DCPresident Trump’s recent nomination of Judge Brett Kavanaugh to fill Justice Kennedy’s seat on the United States Supreme Court has caused some concern about his potential impact on the future of copyright law. This is because Judge Kavanaugh could be joining the ranks of Justices Roberts, Thomas, and Gorsuch who are all noted skeptics of the doctrine known as “Chevron deference.” How this may impact copyright law requires a brief review of history.

In 1803, the United States Supreme Court held in Marbury v. Madison that it is was the role of the judiciary “to say what the law is.” In other words, Congress writes the law and judges determine what the law means whenever the law, as written, is ambiguous. In 1984, however, the Supreme Court loosened that rule in Chevron USA Inc. v. Natural Resources Defense Council by holding that courts should defer to administrative agencies that interpret the statutes that grant them their authority when the intent of Congress is ambiguous and where the interpretation is reasonable or permissible. Put differently, sometimes, the executive branch gets “to say what the law is” and judges should defer to those agencies so long as their interpretation makes sense. The deference courts give to administrative agencies is known as “Chevron deference.” How the Supreme Court approaches “Chevron deference” could affect the ongoing battle between cable companies and Internet-based streaming services.

A recent line of copyright cases has involved the issue of whether companies that stream content over the Internet fall within the meaning of a “cable system” under copyright law. Section 111 of the 1976 Copyright Act defines a “cable system” as any “facility” that retransmits shows “by wires, cables…or other communication channels.” What “other communication channels” Congress intended to include within the definition of a “cable system,” however, is seemingly ambiguous. The issue, then, is who gets to decide “what the law is” in the face of this ambiguity.

If a company is considered a “cable system,” then it is afforded certain rights. Specifically, a cable system is eligible for a so-called “compulsory license” that allows it to retransmit “a performance or display of a work” that had originally been broadcasted by someone else without having to get the consent of the copyright holder. To do this, the cable system need only pay a statutory fee to the Copyright Office.

After the cable system pays the fee and complies with other regulations, it is protected from infringement liability. In addition, the royalty payments cable companies pay through compulsory licenses are much smaller than what they would have to pay if they were forced to negotiate with individual content owners to obtain licenses. Simply put, it’s good to be a “cable system.”

In 2014, the Supreme Court decided a case called American Broadcasting Cos. v. Aereo, Inc. Aereo devised a novel means to deliver content over the Internet, which was to lease an individual antenna and DVR to each of its customers. In response to the inevitable infringement lawsuit by the copyright owners, Aereo argued that its retransmissions were not a “public performance” of the copyrighted content (which would constitute copyright infringement) but that it was merely an “equipment provider.”

The Supreme Court ruled that Aereo’s retransmissions were “performing” the broadcasters’ copyrighted material and it was, therefore, infringing. In reaching its decision, the Supreme Court noted Aereo’s “overwhelming likeness to cable companies.” This language – the “overwhelming likeness to cable companies” – opened up a new argument by likening streaming operations to cable companies.

Capitalizing on this, a company called FilmOn, which is an Internet-based television streaming service, sought a compulsory license from the Copyright Office, but was ultimately rejected. A lawsuit ensued and the case went before the Ninth Circuit Court of Appeals. FilmOn argued that “wires, cables…and other communications channels” found in Section 111 should include Internet-based retransmission services. The Ninth Circuit, however, recognized the statutory ambiguity in Section 111 and turned its attention to the Copyright Office’s interpretation for guidance. The Ninth Circuit concluded as follows:

FilmOn and other Internet-based retransmission services are neither clearly eligible nor clearly ineligible for the compulsory license § 111 makes available to “cable systems.” The Copyright Office says they are not eligible. Because the Office’s views are persuasive, and because they are reasonable, we defer to them.

In other words, the Ninth Circuit deferred to the Copyright Office to reach its decision; “Chevron deference” was applied. It is worth noting that the issues raised by FilmOn have been litigated in other circuit courts as well, and could, one day, make its way before the Supreme Court. It is very possible, therefore, that the Supreme Court will not afford the Copyright Office the same type of deference that lower courts have given it, especially because Justices Roberts, Thomas and Gorsuch have been noted skeptics of the doctrine of “Chevron deference.” Adding Judge Kavanaugh to the bench could mean that the Supreme Court may ultimately decide itself, rather than defer to the Copyright Office, whether Internet-based retransmission services fall within the meaning of a “cable system” under Section 111. The outcome of such a ruling could have a momentous impact on the entertainment industry.

Joshua A. Bornstein is an associate in the firm’s Entertainment Department, based in its Los Angeles office.

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The Court of Appeals of Georgia last week reversed the dismissal of a lawsuit for negligence and loss of consortium against Snapchat, Inc. alleging the social media giant’s controversial “speed filter” was a proximate cause of an accident that nearly took the plaintiff’s life.

The lawsuit alleges that on September 10, 2015, then 18-year-old Crystal McGee began accelerating in her father’s Mercedes on a highway outside Atlanta.  One of the three passengers in the vehicle, Heather McCarty, a co-worker of McGee’s, said she noticed McGee holding her phone as she drove and asked her to slow down.  McGee allegedly responded that she would decelerate once she reached 100 miles per hour to post her speed on Snapchat using the speed filter, which is a stylized speedometer that superimposes a tracked speed on a user’s picture to share with other Snapchat users.  Shortly after reaching 100 mph, the lawsuit claims McGee’s vehicle slammed into another car attempting to merge onto the highway.  Wentworth Maynard, then 21 years old, was a passenger in that car and suffered permanent brain damage.

Maynard and his wife sued Snapchat for negligence and loss of consortium.  They claimed Snapchat’s speed filter facilitated McGee’s reckless driving and that Snapchat knew the filter would likely distract drivers but created it anyway without including any warnings or safeguards.  The speed filter was introduced in 2013 and has potentially been linked to other accidents, including a fatal collision in Florida in which young drivers were allegedly using the filter minutes before the crash.

A Snapchat spokesperson issued a statement in response to Maynard’s suit affirming “we actively discourage our community from using the speed filter while driving, including by displaying a ‘Do NOT Snap and Drive’ warning message in the app itself.”  Snapchat also denied all of Maynard’s allegations and argued for dismissal claiming immunity under the Communications Decency Act (CDA).  The CDA shields interactive computer service providers from all liability arising from content created by third parties.

The trial court found the CDA applied and dismissed the suit, but a three-judge panel in the Court of Appeals of Georgia reversed.  Writing for the court, Judge William M. Ray II distinguished cases in which third-party content was said to have caused the harm and found, conversely, that Maynard’s claims stem from Snapchat’s alleged negligent creation of the filter and the foreseeable misuse of that filter by a third party – not from any third-party content.  Indeed, Ray noted no third-party content was ever posted in this case as McGee was unable to “snap” her speed before the accident occurred.

The case will now return to the trial court where the parties will litigate the merits of Maynard’s claims, which will likely be hotly contested.  McGee sued Maynard’s lawyers for defamation in April of 2017 alleging her phone was in her purse when the accident occurred and that she was never using Snapchat as Maynard’s suit contends.