Monthly Archives: May 2004

OH WHAT A TANGLED WEB WE WEAVE.

The confused state of the law concerning file sharing. Understanding Grokster, Aimster, Napster and the Betamax case.

As it stands now, the law concerning file-sharing technology is anything but clear. Interpreting the same underlying law and precedent, and on similar facts, two different Courts of Appeal have arrived at widely differing results, throwing the media and software industries into chaos. To end users, for the time being, this will have little importance, but to those working in the entertainment industry, whether artists, producers, executives or distributors, the murkiness of the legal framework is making “business as usual” anything but usual.

Readers will recall that several years ago, file-sharing service Napster was shut-down by a Court in California. That case's outcome turned largely on the fact that Napster contained a centralized repository of information, and thus had the right and ability to control and limit its users activities. In the wake of Napster's demise, several next generation software applications came of age, among them Aimster and Grokster.

These programs allow users to identify, locate and download files from other users' computers without the need for any centralized index or directory. Thus, the makers of the Aimster and Grokster programs do not have any way to exert control over the ways in which their software is used.

The precedent having the most significant impact on both the Aimster and Grokster cases is the United States Supreme Court's 1984 decidion in the case of Universal v. Sony, in which it ruled that Sony was not liable for contributory copyright infringement by virtue of its manufacture of the betamax video cassette recorder (a device designed, in part, to permit copying of copyright protected works). In that opinion, the court held that “time-shifting” of programs is a “fair use” under the copyright law, and that because the device had substantial non-infringing uses, (including time shifting), Sony could not be held liable to the studios and television networks for copyright infringement.

In last month's 9th Circuit Court of Appeals opinion in the case of Metro-Goldwyn-Mayer Studios v. Grokster, Ltd, the court held that since the Grokster software is theoretically capable of substantial non-infringing uses, Grokster cannot be held liable for contributory copyright infringement even though its file sharing software is used (90% of the time) for illegal downloading of copyrighted materials.

This decision stands in stark contrast to the 2003 decision in In Re: Aimster Litigation, where the 7th Circuit Court of Appeals held the makers of the Aimster software liable for infringement on very similar facts. There, the court held that mere theoretical capability of substantial non-infringing uses is not dispositive. Under the Aimster Court's analysis, the probablility of such lawful uses must be determined and weighed against the infringing uses in determining the issue of contributory copyright infringement.

Given these two differing interpretations of the Betamax case, the law is anything but clear. Unless another defendant in such a case sees fit to pursue the matter all the way to the Supreme Court, only Congress, through enactment of new legislation, can resolve the matter. Of course, the lawmaking process takes time, so in the meantime, content owners and software makers will just have to guess at the rules of the game.

Assembling a winning team: The Entertainment Lawyer.

In the past two issues, I discussed the roles played by the agent and the manager. In this issue, we'll look at the involvement of the entertainment lawyer. Most people think of an attorney as the person you call to get you out of trouble. It's true, many lawyers do that kind of work, but many others are involved in the day-to-day business of the entertainment industry, negotiating contracts, structuring deals and generally looking after their clients' interests.

While most performers just starting out won't have an immediate need for a lawyer, it's often a good idea to consult with one early in your career just to avoid any costly missteps. Even before signing an agent's or manager's contract, it's a good idea to have the agreement reviewed by a lawyer.

Generally, where a minor is being employed in a movie, play, television show or record contract, the employer will insist that the contracts be “confirmed” or approved by a court. Even when this isn't the case, it's wise to have an attorney look things over. Contracts can have long-term implications and should be entered into with caution. The bottom line is this: The producer has a lawyer, the director has a lawyer, so should you.

When choosing an entertainment lawyer, you want someone who is a specialist, focused primarily on the entertainment industry. Of course, almost everyone knows or has a family member who is a lawyer, but only someone experienced with entertainment transactions will have a proper understanding of the nuances of a deal. Entertainment industry contracts are unlike those used in almost any other business, so unless your lawyer regularly deals with agents, managers, producers, record companies, and such, he or she will be unable to understand and address the finer points of your deal. Your attorney's level of experience is also important because his or her relationships with executives and others in the entertainment industry can mean the difference between an average deal or a favorable one.

Finding an experienced and knowledgeable entertainment attorney can be a daunting task, and requires some research. Often, the best approach is to ask other people you know for a referral. Other artists, your agent or manager, or even your family's accountant or stock broker are good places to start.
Another good resource is the local bar association. Many of these organizations have referral services and will point you toward their members who practice in a particular field. Finally, you can investigate potential attorneys on the Internet. Most law firms nowadays maintain useful websites containing lots of information about their attorneys. When in doubt, google it.

Most attorneys will waive their fees for an initial meeting, so you should probably meet with a few lawyers before selecting one. Choose someone with whom you feel comfortable and to whom you can relate. This, like your relationships with agent and manager is a long-term arrangement. You'll want to ask the lawyer about his or her background and experience as well as about fees. Different lawyers charge in different ways, often depending on the kind of matter involved. Many entertainment lawyers charge a percentage-based fee, typically 5-10%, much as agents and managers do. Others charge flat rates for each deal, usually depending on the difficulty and size of the transaction. By and large, however, most lawyers charge by the hour. Hourly rates will vary depending on the lawyer's location and experience. In the major entertainment industry cities, entertainment lawyers charge anywhere from $250 to $500 per hour. In some cases, it's possible to arrange a reduced hourly fee as an advance against a percentage.

When you hire a lawyer, you should expect to pay the lawyer a retainer, which is typically held in trust and applied against fees and costs as they accrue. You should also expect to receive and sign a written fee agreement. This agreement is a contract between you and the lawyer and sets forth the scope of the lawyer's responsibilities and the fees to be charged. Unlike contracts with agents and managers, a client is always free to terminate his relationship with lawyer, subject to the continuing obligation to pay outstanding fees.

Finally, a word about conflicts of interest. The entertainment industry is a small, insular group of professionals. In many cases, agents, lawyers and managers work together again and again over the years. In fact, these relationships are often the reason that deals happen at all. For attorneys and their clients, this presents a special problem, since an attorney cannot represent multiple parties without fully disclosing the existence of the relationship and potential conflict, and securing both clients' written consent to the representation. If your attorney presents you with a conflict of interest waiver, you should consider carefully whether or not the attorney can be counted on to protect your interests over others'. In many cases, it's wise to consult with another lawyer or trusted advisor before signing.

Ultimately, your lawyer should be someone you trust and with whom you can be completely honest. A knowledgable entertainment lawyer can help you grow and prosper in show business and should be considered an integral part of your winning team!

Assembling a winning team: Finding and choosing an Agent

WHAT DOES AN AGENT DO?
If you think of your entertainment career as you would any business or company, you are the production group, ultimately… the product you're selling. The Talent Agent should be thought of as your Marketing and Sales department. It's his or her job to find you jobs, to get you employment.
An Agent's job is to “sell” you to casting directors, producers, etc. A good agent will review all the casting opportunities in town and figure out which ones are good prospects for your particular type, look, style, etc. Then, the Agent sends your photo to the casting director, follows with a call, and with luck, arranges for an audition, interview, or screen test.
In some states, such as California and New York, agents and agencies must be licensed. Agencies range in size from the one-person operation to the giants like CAA (Creative Artists Agency), ICM (International Creative Management) and the William Morris Agency. Smaller agencies often specialize in one or two areas of the industry, while the larger agencies handle them all. It's not unusual for actors to have different agents for different parts of their careers: Theatrical (movies), Television, Commercials, Stage, Modeling, Voice-over. Since each of these areas is a business in itself one agent can't possibly do it all. For starters, you’ll probably want to have a commercial agent and a TV agent… possibly a Theatrical agent too.

AGENCY AGREEMENTS

Most agency agreements have an initial term of two or three years, often with an option for the agent to extend for an additional one-year period. Like personal managers, talent agents are paid commissions, generally from 10 to 20 percent of the Artist's earnings. Most performers' unions impose a cap of 10% on agent's commissions. Since Agency agreements are almost always exclusive, the agent will receive the commission on all monies earned by the artist, regardless of whether the agent was involved in booking the job.
Largely as a result of the influence of the performer's unions in securing artist friendly contracts, agency agreements are, for the most part, non-negotiable. One provision that's often available is an earnings benchmark. That is, if the artist does not earn a predetermined amount within the first year of the contract, the contract may be terminated. Another important provision is a so-called key person clause. This insures that, should the artist's handling agent (the key person) leave the agency, the artist may terminate the contract and move to another agency.

FINDING AND CHOOSING AN AGENT

Finding an Agent can be tricky. First, you’ll have to do some legwork to identify agents who represent young Artists. Send your resume and photo to all of them. Then, after two or three weeks, you'll want to follow up with a polite phone call. Hopefully, a few agents will agree to meet with you. Once you get to this stage, it's all about your sparkling personality! Of course, as with most aspects of the entertainment industry, the best method to finding an agent is word of mouth. Referrals from other actors, managers, attorneys and other industry professionals are the most likely road to getting signed.
Similarly, word of mouth is an important tool in selecting the right agent. As with all members of your team, your agent must be someone familiar with the market for your particular talent and for the fields in which you will be working. Among the most important traits of a good agent is his or her enthusiasm about working with you. Though being represented one of the giant agencies can be terrific, it's often more advantageous to work with a smaller, but more energetic agent, who truly believes in you. Ultimately, the agent may be the most important member of your team, so it's important to select carefully.

This article originally appeared in “Callback Kids” Magazine

There is no custom code to display.

Find us on Google+