Shortly after the 2015 debut of the hit Fox Television show Empire, Clayton Tanksley sued the studio, distributor, producer and creators of Empire for copyright infringement and related claims in the United States District Court for the Eastern District of Pennsylvania.  Tanksley’s claims stem from an alleged 2008 meeting with Empire’s creator and producer, Lee Daniels during a film competition sponsored by the Greater Philadelphia Film Office called Philly Pitch.  (The Film Office also was sued by Tanksley.)  Following the event, Tanksley claims to have discussed with Daniels a three episode television series he created and copyrighted called Cream, which was about an African American record executive who runs his own hip-hop label.  He also claimed to have provided Daniels with a DVD and script for the Cream series.  Tanksley’s complaint alleged that Cream and Empire are “strikingly substantially similar” in many respects, including the main and supporting characters, scenes and the overall themes of both works.

Copyright law protects the expression of ideas but not the ideas themselves.  Thus, in order for a plaintiff to prevail in a copyright infringement action he must demonstrate substantial similarity in the protected expression between the two works and not merely the fact that they share similar ideas or themes.  In dramatic works such as Empire and Cream, scènes à faire or plot elements that flow predictably from a general idea are unprotected.  For example, in “a film about a college fraternity … parties, alcohol, co-eds, and wild behavior would all considered scènes à faire and not valid determinants of substantial similarity.”  Tanksley v. Daniels, et al., No. 17-2023, p. 16, — F.3d – (3d. Cir. 2018).

Under that standard, the defendants moved to dismiss the complaint, arguing primarily that the two works were not substantial similar in protected expression.  In deciding defendants’ motion, the court performed a side-by-side analysis of Empire and Cream to determine whether a lay-observer would believe that the copying was of protectable aspects of Tanksley’s series.  The trial court granted the motion to dismiss, finding that the two works contain “dramatically different expressions of plot, characters, theme, mood, setting, dialogue, total concept and overall feel.”  And while the general idea of the two series revolved around African American music moguls, that was not protectable under copyright law.

Tanksley appealed to the Third Circuit raising primarily two arguments:  (1) the question of substantial similarity is too fact-intensive to be resolved on a motion to dismiss; and (2) the trial court erred in finding no substantial similarity between Empire and Cream.  As to the first argument, the court determined that certain works, including dramatic works, may be evaluated in a side-by-side comparison at the motion to dismiss stage and dismissed if “no trier of fact could rationally determine the two works to be substantially similar.”  The appellate court rejected plaintiff’s argument that the trial court erred in rendering its decision without the benefit of witness testimony, documentary evidence or expert analysis holding this was irrelevant to the dispositive question of how the two works would appear to a layman viewing them side by side.

As to the second argument, the Third Circuit determined that the trial court properly concluded that there was no substantial similarity of protected expression between Empire and Cream.  As the court concluded, aside from superficial, general similarities between the two shows, they were not substantially similar as a matter of law.  “The shared premise of the shows – an African-American, male record executive – is unprotectable.  These characters fit squarely within the class of ‘prototypes’ to which copyright protection has never extended.”  Thus, the Third Circuit agreed with the trial court that as to the protectable expression of plot, characters, theme, mood, setting, dialogue, total concept, and overall feel, no reasonable jury could conclude that Empire and Cream were substantially similar.

We last blogged here about the Second Circuit’s denial of TV Eyes’ fair use defense in a lawsuit brought by Fox News. Now the Wikimedia Foundation (owner of Wikipedia), joined by other free press advocacy groups, have filed an amicus brief in support of TVEyes’ petition for the Supreme Court review.U.S. Supreme Court building in Washington, DC

TVEyes is a subscription service that records massive amounts of television content and compiles it into a searchable database of 10-minute clips. Its subscribers range from the New York Times to the Department of Defense. Fox News brought a copyright infringement action against TVEyes in 2013. The Second Circuit handed down a decision in February upholding the network’s claims. TV Eyes has appealed this decision to the Supreme Court.

The Wikimedia brief warns of dire consequences if the circuit court ruling is allowed to stand, stating that it permits copyright owners to “stifle criticism and undermines established fair use principles that are vital for media commentary.” It notes further: “In today’s fast-paced and increasingly polarized media landscape, researchers, commentators, and critics must be able to record, search, watch, and compare the original visual recordings of relevant broadcasts. Such comprehensive tools can only be maintained by commercial services like TVEyes.”

The amici questioned the Second Circuit’s balancing of the four fair use factors. The court found the fourth factor dispositive, in that the TVEyes service harmed the ability of Fox News to benefit from its copyrights by licensing clips directly. The Wikimedia brief challenges that conclusion, asserting that the existence of a direct market for Fox News clips is “theoretical,” and one that Fox would be “unlikely to authorize.”

Fair use analysis always requires a balancing of the copyright holder’s statutory monopoly against the benefits of free dissemination of content. Frequently, this involves purely commercial interests on both sides, but some fair use cases, particularly those involving matters of public concern, implicate larger values. It has been 20 years since the Supreme Court issued a major fair use decision. Advocates on both sides will be watching to see whether it will use this case to clarify a contentious doctrine.

In March of this year, the Second Circuit reversed a decision by the District Court and held that the video clipping service operated by TVEyes infringed Fox News’ copyrights. We covered this decision in a previous blog. TVEyes is now attempting to bring the matter to the Supreme Court in what could be a landmark case regarding fair use of newsworthy content.U.S. Supreme Court building in Washington, DC

TVEyes is a subscription service that records essentially all television broadcasts on 1,400 channels on a 24/7 basis. By using the closed-captioned content that accompanies the recorded broadcasts, it is able to create a text-searchable database of the contents of each clip. TVEyes subscribers can run searches that return a list of video clips containing the searched terms. Each clip runs for 10 minutes and begins shortly before the search term appears in the clip. In addition to news organizations such as the New York Times, its subscribers include the U.S. Department of Defense, the United Nations, professional sports leagues and even the White House.

Five years ago, Fox News brought suit against TVEyes for copyright infringement based on its “verbatim reproduction” of Fox’s broadcasts. TVEyes countered by asserting a fair use defense. The District Court agreed and dismissed Fox’s claims, but the Second Circuit reversed and remanded the case with instructions to enjoin TVEyes from making available to clients the ability to watch the 10-minute clips retrieved from TVEyes’ client search requests. (Fox did not object to TVEyes’ creation of a text-searchable database, only to its delivery of clips.) The court held that two elements of TVEyes’ use favored Fox. First, by making 10 minutes of content available, TVEyes delivered “virtually the entirety of the Fox programming that TVEyes viewers want to see and hear.” Second, and most important, TVEyes’ service was sufficiently competitive to potentially deprive Fox of revenues that it could have been receiving from its own program of searchable access to its broadcasts. The very success of TVEyes’ service was strong evidence of the existence of a market for searchable clips.

The Second Circuit contrasted this to Google’s actions – which were found to constitute fair use – in Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015) (“Google Books”). In that case, Google made unlicensed text-searchable copies of millions of books for which searches retrieved “snippets” of the books containing the search terms. Unlike TVEyes’ 10-minute video clips, these “snippets,” according to the Second Circuit, “abbreviated to ensure that it would be nearly impossible for a user to see a meaningful exposition of what the author originally intended to convey to readers.”

TVEyes is now seeking to argue its case to the Supreme Court. It argues that its case presents an opportunity to resolve a split between circuits over “a question of exceptional importance, including the proper balance under copyright law between the interests of a copyright holder and the First Amendment right to criticize and comment upon the copyright holder.” TVEyes also notes that the Court has not addressed fair use for over 20 years, since it articulated the doctrine of transformative use in the case of Campbell v. Acuff-Rose Music.

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The FCC’s reexamination of the Children’s Television Act (CTA), which sets forth a myriad of rules and regulations with respect to the broadcasting of children’s programming, has entered the next phase as the deadline to submit public comments passed on Monday.  FCC Commissioner Michael O’Reilly announced in January as part of the FCC’s media modernization campaign that the commission will consider rolling back regulations under the CTA.  O’Reilly’s announcement has sparked heated debate amongst dozens of broadcasters, media companies, and public interest groups as to what, if any, changes should be made.

The CTA was first passed by Congress in 1991 to require broadcasters to air some amount of standard-length educational and informational programming specifically designed for children under 17 years old.  Although no minimum requirement of programming hours was imposed at that time, the law’s regulations strengthened over the years and now require broadcast companies to air an average of three hours of children’s programming per week between the times of 7 a.m. and 10 p.m.  Additionally, core children’s programming must run at least 30 minutes in length, be regularly scheduled weekly, and be labeled throughout the episode with an “E” or “I” symbol.  Broadcast networks are also required on a quarterly basis to specify in writing the objective of their current and prospective programming, target child audience, and various other data requiring voluminous paperwork to be filed with the FCC.  Non-compliance with any of these requirements jeopardizes a broadcast company’s ability to renew its license.

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Of course, a lot has happened in media over the 27 years since the CTA’s passing.   The explosion of the Internet and proliferation of alternative means of media consumption including over-the-top providers, subscription services, video-on-demand content, and paid television means traditional broadcast is no longer the primary means through which anyone, let alone kids, consumes content.  O’Reilly argues broadcasters are at a further disadvantage in this increasingly competitive field by having to contend with the CTA’s outdated regulations which he claims are costly and unduly limit creativity.

Specifically, the FCC is considering elimination of the requirement that core programming be at least 30 minutes in length.  O’Reilly cites “Schoolhouse Rock” and “In the News” as examples of shorter programs with notable success that were killed off by the CTA.  Also on the chopping block is the requirement that children’s programming be between 7 a.m. and 10 p.m., the requirement that programming be regularly scheduled weekly, and the mandate that broadcast networks submit extensive paperwork regarding their programs on a quarterly basis as opposed to O’Reilly’s recommendation to require the materials annually.

Critics of the proposed changes claim unwinding the CTA would result in less children’s programming on broadcast television, which disproportionally impacts millions of low income families who do not have access to the Internet or alternative means of media consumption. O’Reilly counters arguing deregulation will not eliminate children’s content from broadcast television but will rather allow broadcasters greater flexibility to design more cost-effective means of providing this content.  There is no evidence the CTA has enhanced children’s programming since the 1990s, argues O’Reilly, and the market for this programming is strong enough to sustain itself without heavy regulation.  For instance, O’Reilly cites PBS Kids (a 24/7 children’s content provider) which was licensed to approximately 100 stations nationwide covering 90 percent of U.S. television households.

The FCC is required to issue a reply to public comments by October 23 and thereafter determine an appropriate regularly scheme.  Note, the CTA’s regulations requiring kid-appropriate commercials when broadcasting children’s programming are not part of this reexamination and are expected to remain in full force.

Laurie Baddon writes:

It has been a tough couple of weeks for Sinclair Broadcast Group, Inc. First, news broke that its anchors were required to read an identical script cautioning viewers about “fake news” and questioning the integrity of media organizations. Now, reports claim that Sinclair’s employee agreements may make it too expensive for these anchors to quit due to liquidated damages provisions in their contracts. While we have not reviewed the alleged Sinclair employee agreements, the news raises some important issues for employers to keep in mind when creating employment agreements, especially in California.

Some reports indicate that the Sinclair agreements allegedly require employees to pay as much as 40% of their annual compensation to the company in liquidated damages for leaving before the term of their contract expires. While employers may protect themselves from the costs associated with an employee voluntarily leaving their employment prior to the expiration of the contract term, it is rare for liquidated damages to be so high. When employment agreements include liquidated damages for an employee voluntarily quitting prior to the expiration of the contract term, the parties will agree on an amount related to the employer’s cost to recruit and train a replacement. Requiring an employee to pay 40% of their annual compensation in liquidated damages is steep and sounds more like a penalty, which courts would likely disfavor.

The agreements also allegedly contain a clause that Sinclair may fire an anchor who suffers a disability. At first glance, without more context, this looks to be problematic as well. Although it is not unheard of for employee agreements for high-level executives (or in this case for anchors) to include a clause that the employment relationship may be terminated due to the employee being “permanently” or “totally” disabled; this usually means that the employee is unable to perform the essential functions of the position, even with reasonable accommodations, for a specified period, such as 90 consecutive days or 180 days in any 365-day period. Nevertheless, it is extremely important that employers consult with counsel and are cautious when including these clauses to not conflict with state and federal law.

Additionally, the Sinclair agreements allegedly contain non-compete clauses. While non-competes may be enforceable in other states, they are likely to be void in California. This should serve as a reminder of how imperative it is for employers to tailor agreements and policies to the specific jurisdictions in which employees work.

It is important to keep in mind that the issues raised by the Sinclair agreements are rare. The vast majority of employees in California will likely never see an employment agreement like the Sinclair agreements because most employees are “at-will” meaning they can terminate their employment for any reason at any time just as the employer can terminate the employment relationship for any non-discriminatory reason at any time.

In any event, with Sinclair looking to acquire some additional 215 stations across the country, there may be a whole lot more new employees reviewing, scrutinizing, and publicizing the Sinclair agreements. It will be interesting to see how much push back Sinclair will get.


Laurie Baddon is an associate in the firm’s Labor & Employment Department, based in its Los Angeles office.

After Netflix negotiated mega raises for the main actors of its hit program “Stranger Things” in March of this year, short-film producer Charlie Kessler wants a piece of the pie.  Kessler filed an action in Los Angeles County Superior Court last week for breach of an implied contract against “Stranger Things” creators Matt and Ross Duffer who he claims heard his pitch for a science fiction show at a film festival in 2014 and ran with it without his consent and without providing him just compensation.

Watching streaming television with a cup of tea with inscription "Just One More Episode"“Stranger Things” debuted in July of 2016 and received eighteen Emmy nominations last year.  According to The Hollywood Reporter, Netflix is now paying lead actors Winona Ryder (Joyce Byers) and David Harbour (Jim Hopper) a whopping $350,000 per episode, and up to $250,000 an episode for its young adult stars.

Kessler alleges he discussed the short film he created entitled “Montauk” with the Duffer brothers at the Tribeca Films Festival in 2014, which is a science fiction work set in Montauk, New York.  Montauk is home to an abandoned military base that is rumored to be haunted.  Kessler contends the Duffer brothers misappropriated the concept of “Montauk” to produce “Stranger Things” without Kessler’s permission. Kessler also alleges “Stranger Things” was originally titled “The Montauk Project” and took place in New York, but was later renamed and set in the fictional town of Hawkins, Indiana. The Duffers’ attorney Alex Kohner issued a statement that the Duffers never saw “Montauk” and never discussed a project with Kessler. Kohner called Kessler’s complaint “completely meritless” and “an attempt to profit from other people’s creative and hard work.”

Although purely abstract ideas cannot be copyrighted, California does afford some protection to show pitches through contract law. To prevail, a plaintiff must establish that he or she prepared the work being pitched, disclosed it to the defendant, and had a reasonable expectation of payment in exchange for pitching the work which can be implied from the circumstances.

Whether Kessler will be able to demonstrate these elements remains to be seen. The Duffers’ response to the complaint will be due in early May. Kessler seeks monetary damages, injunctive relief, and punitive sanctions.

In a closely watched copyright lawsuit, the Second Circuit reversed the District Court’s finding of “fair use” and upheld Fox News’ claim that the TVEyes service infringed its copyrights. This decision has broad implications for the manner in which video clips and text summaries are used in today’s fast-paced and interconnected digital media.

Illustration of scissors on video player, symbolizing video editing icon/clipsIn brief, TVEyes operates a comprehensive subscription-based media-monitoring service that (i) records essentially all television broadcasts on 1,400 channels on a 24/7 basis, (ii) copies the closed-captioned content that accompanies the recorded broadcasts, and (iii) uses that content to make a text-searchable database. TVEyes subscribers can run searches that return a list of video clips containing the searched terms. Each clip runs for 10 minutes and begins shortly before the search term appears in the clip. Thus, a TVEyes’ subscriber can search for a particular product, political candidate, hot-button issue (e.g., the NRA), etc. and retrieve all clips that mention the product, individual or issue that is the subject of the search.

Fox News sued TVEyes for direct copyright infringement based upon its copying and distributing Fox’s copyrighted content without a license. Because the recorded broadcasts were indisputably copyrighted and unlicensed, TVEyes’ defense turned on application of the four-factor “fair use” defense codified in Section 107 of the Copyright Act. Under this test, the following factors are considered individually and collectively in determining if the use is fair: (i) the purpose and character of the use, (ii) the nature of the copyrighted work, (iii) the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and (iv) the effect of the use upon the potential market for the copyrighted work.

The first factor typically turns on whether the challenged use somehow transforms the copyrighted work. In a ruling that met with sharp disagreement in a concurring opinion, the majority ruled that the TVEyes service was “at least somewhat transformative” because it enabled its clients (i) to view all Fox programming over the prior 32-day period that concerned the topic of their search without needing to watch Fox on a 24/7 basis for the entire period, and (ii) to watch the video clips at a time and place that was convenient for them, and not when they aired on Fox. Unfortunately for TVEyes, this is the only fair use factor found to work in its favor.

After noting that the second factor (“the nature of the copyrighted work”) rarely plays a significant role in fair use determinations, the Second Circuit ruled that it played “no significant role here.” The Second Circuit then turned to the third and fourth factors.

The Court ruled that the third factor – the amount of the copyrighted work used – “clearly favored” Fox because TVEyes made available “virtually the entirety of the Fox programming that TVEyes viewers want to see and hear.” The Court reasoned that “given the brevity of the average news segment on a particular topic” providing TVEyes users with ten-minute clips likely conveyed to them “the entirety of the message conveyed by Fox to authorized viewers of the original.” The Second Circuit contrasted this to Google’s actions – which were found to constitute fair use – in Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015) (“Google Books”). In that case, Google made unlicensed text-searchable copies of millions of books for which searches retrieved “snippets” of the books containing the search terms. Unlike TVEyes’ 10-minute video clips, these “snippets,” according to the Second Circuit, “abbreviated to ensure that it would be nearly impossible for a user to see a meaningful exposition of what the author originally intended to convey to readers.”

Finally, after reaffirming that the fourth fair use factor is the single most important element of the fair use analysis, the Court found that Fox had the “much stronger point.” This factor focuses on whether the challenged work constitutes a competing substitute for the original or its derivative so as to deprive the copyright owner of significant revenues that, instead, flow to the unauthorized copier. The Second Circuit found that TVEyes’ service undercut Fox’s ability to profit from developing and licensing searchable access to its copyrighted broadcasts to third parties. In making this finding, the Court pointed to TVEyes’ success as evidence that the market for searchable clips was worth millions of dollars before concluding that TVEyes was usurping a market that properly belonged to Fox.

The Second Circuit remanded the case to the District Court with instructions to enjoin TVEyes from making available to clients the ability to watch the 10-minute clips retrieved from TVEyes’ client search requests. Significantly, Fox did not challenge and the injunction does not apply to TVEyes’ search database. As such, there may remain an opportunity for TVEyes to combine its database with a retrieval and access component that does not flunk the third and fourth fair use factors. To accomplish this, TVEyes would likely need to construct a system far more like the one that did pass fair use muster in Google Books. However, because the “snippets” approved in Google Books were radically different from the 10-minute clips upon which TVEyes built its business, whether TVEyes would have the interest and ability to pursue such a redesign is far from clear.

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In response to the numerous allegations of pervasive sexual harassment in the entertainment industry, SAG-AFTRA, the union representing performers, recently adopted a “Code of Conduct” for handling sexual harassment claims against producers.  As the representative of performers across the country, it is only natural that SAG-AFTRA would seek to address the sexual harassment scandal that has pervaded the industry. The opening of this new front against sexual harassment may provide support for more performers to come forward and bring claims against producers.

Casting call - actors waiting at a casting sessionThe Code of Conduct provides a resource for performers to assist them in filing civil and criminal complaints against their employers, as well as processing claims under the collective bargaining agreements (CBA) between SAG-AFTRA and the Producer’s Alliance.  It also ominously claims that the union is “willing to use the union’s enforcement powers to protect our members, including directing them not to work for employers who will not keep them safe.”

SAG-AFTRA, as a labor union, has certain powers and limitations in advancing the interests of its members.  In terms of legal claims, the union can point performers in the right direction, or possibly pay for legal counsel (which is not mentioned in the Code), but it is unlikely that it could directly bring sexual harassment claims in court on behalf of members. Unions are typically bound by the grievance and arbitration procedures contained in their CBAs. In addition, the union is also subject to conflicts in terms of member-on-member sexual harassment, which could lead to inaction or delays on behalf of the accuser. Finally, like most unions, SAG-AFTRA is bound by a no-strike clause in its CBAs, which would likely limit its ability to carry through on its threat to direct members not to work for certain employers.

The jury has spoken. After a saga worth of Homer, Comic-Con is a valid trademark.

The battle began when, the organizers of San Diego Comic-Con (SDCC), the 50-year old grandaddy of fan conventions, sued the producers of Salt Lake Comic Con for infringement. As we previously reported, the defendants struck back by asserting that comic con (no hyphen) had become a generic descriptor for comic book conventions, citing the scores of events around the country that describe themselves the same way.

The case took a curious turn when the trial judge issued a gag order against the defendants prohibiting them from taking their case to social media, bringing First Amendment issues into what was otherwise a straightforward trademark case. The Salt Lake crew challenged this order by seeking a writ of mandamus from the Circuit Court, which agreed with them and vacated the order.

The case went to trial in early December, with a verdict in favor of the San Diego Comic-Con. The jury found both that the plaintiff’s mark is valid and also that it was infringed. It determined, however, that the infringement was not willful, and awarded only $20,000 in damages rather than the $12 million demanded by the plaintiffs. Nevertheless, armed with a finding of validity, SDCC could be emboldened to take action against other comic book conventions.

The defendants, meanwhile, have not laid down their weapons. They’ve announced an intention to appeal the verdict and are also pursuing an petition before the US Patent and Trademark Office to cancel the rival mark.

 

In another controversial move, the FCC has approved by a 3-2 vote the adoption of the ATSC 3.0 standard for broadcast TV, known as Next Gen TV. This IP-based standard will permit over-the-air broadcasters to offer Ultra High Definition signals and improve mobile transmission. Sounds good, right? Opponents cite two concerns.

Copyright: scanrail / 123RF Stock Photo

Using Next Gen TV, broadcasters will be able to track individualized viewing data to deliver targeted ads. This is a red flag for consumer and privacy advocates. Using language that sounds more sinister than was likely intended, one executive for Sinclair Broadcast Group praised the new standard’s ability to gather“perfect data” about consumers. “We’ll know where you are, who you are, and what you’re doing—just like you do now, just like everybody does now, the Internet does….”

The second big objection is that the change will impose unnecessary costs on consumers. Current televisions cannot receive Next Gen signals. The FCC imposed a five-year transition period during which broadcasters must simulcast using both the current and new standards. If they abandon the current standard after that period, broadcast consumers will be forced to buy new equipment.