Entertainment Law Update Episode 037 – Top Ten Stories of 2012

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In this Episode:

• Crystal Skull lawsuit
• Persian Barbie dispute
• Age of the Hobbits injunction
• Artist Sues EA over throwback Ravens uniform
• and our completely unscientific top-ten stories from 2012

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Show Notes

Show Notes

FOLLOW-UPS AND QUICK TAKES

‘Indiana Jones' Lawsuit Seeks Hollywood Profits from Alleged Crystal Skull Theft:

THResq: http://www.hollywoodreporter.com/thr-esq/indiana-jones-lawsuit-seeks-hollywood-399236

The Complaint: https://docs.google.com/open?id=0B7c_uKsEeLrwUUtINFFsTnI0ZlU

• In 1924, Crystal Skull was found in Belize by Anna Mitchell-Hedges and her father.  Mitchell-Hedges recently passed away and left the skull to a man named William Homann.

• Before she passed away, Mitchell-Hedges appeared on a SciFi channel documentary about the skullswhich aired in 2008, disclosing that she was in possession of the skull.

• The complaint alleges that various laws passed in Belize prior to the skull being taken out of the country made it illegal to do so, and that the archaeological expedition itself was undertaken outside of the required approval of the government.

• Dr. Jaime Awe, Director of the Institute of Archaeology in Belize, is suing Homann and the Mitchell-Hedges estate for replevin, accounting for profits, and tortious interference with Prospective Economic Advantage.

• Awe is ALSO suing Lucasfilm, Paramount Pictures, and the Walt Disney Company, alleging that they have profited off of the use of the Mitchell-Hedges skull (referred to in the film Indiana Jones and the Kingdom of the Crystal Skull as the “Mitchell-Hedges skull,” but said to be from Peru)

• Awe is seeking injunctive relief, accounting for profits, and is accusing the film defendants of Tortious Interference with Prospective Economic Advantage and Civil Conspiracy

The actual Mitchell-Hedges skull:

The Indiana Jones version:

Shahs of Sunset – “Persian Barbie” Trademark Dispute

THResq: http://www.hollywoodreporter.com/thr-esq/hollywood-docket-john-travolta-wins-legal-fees-sex-life-author-399316

TMZ.com: http://www.tmz.com/2012/12/02/shahs-of-sunset-bravo-niki-ghazian-lily-ghalichi-cease-desist-letter/

• Model Niki Ghazian has sent a cease and desist letter to Bravo TV Network and the producers of the show “Shahs of Sunset” over their use of the term “Persian Barbie” to describe one of the cast members of that show.

• Ms. Ghazian claims that she has been using that term to describe herself since 2005 and is the “common law” owner of the mark (she has never applied for a trademark).

• She is demanding that Bravo stop using the term in their advertising for the show, on their website, or on any press releases.

Niki Ghazian (left), Lilly Ghalichi (right)

“Age of the Hobbits” Gets New Title, Still On Sale Despite Injunction:

THResq: http://www.hollywoodreporter.com/thr-esq/age-hobbits-is-clash-empires-401897

THResq: http://www.hollywoodreporter.com/thr-esq/age-hobbits-gets-new-title-401217

THResq: http://www.hollywoodreporter.com/thr-esq/age-hobbits-sale-court-order-403685

• Warner Bros. and producer Saul Zaentz have filed suit against production company The Asylum over the “mockbuster” film Age of the Hobbits, alleging trademark infringement.

• A federal judge in California has granted an injunction against the release of the film under that name.

• The Asylum defended itself by saying that it had fair use to use “Hobbits,” saying the word referred to a real-life human subspecies, Homo Floresiensis, discovered in 2003 in Indonesia.

• However, this is an informal name for the species, and the Tolkien estate has barred others from publicly using the nickname

• Wikipedia lists various fleeting references to the word Hobbit in folklore, fairy tales, and witchcraft, beginning in the 1500’s

• Jonathan Handel, writing at The Hollywood Reporter, reports that the title has been seen on sale at Wal-mart under its original infringing name, raising questions as to whether the injunction was worded broadly enough

• It bars Asylum and “all persons in active concert or participation with Asylum or with any of the foregoing” from using the title

• The question is whether or not Wal-mart or other retailers are in “active concert or participation with Asylum”

• Other names have popped up for the film, including The History of Mankind for its Cambodian release, Lord of the Elves on streaming video service Vudu, and Clash of the Empires on Asylum’s website.

Throwback Baltimore Ravens Uniform in EA’s Madden NFL Video Game is Not a Fair Use:

Entertainment Law Matters: http://www.entertainmentlawmatters.com/?p=2319

• Artist Frederick Bouchat has won a case against the Baltimore Ravens as well as video game manufacturer Electronic Arts for infringing on his copyright in a team logo.

• Mr. Bouchat created and copyrighted a drawing which was substantially similar to the one eventually used by the Ravens as their primary logo during their first three seasons.

• Mr. Bouchat had previously sued the Ravens and the NFL and established copyright infringement, but recovered no damages due to a finding that the revenues generated from the sale of Ravens merchandise was attributable to other factors besides the infringement.

• However, in this latest ruling from the US District Court in Maryland, the court found that there was an infringing use when Electronic Arts included the uniforms with the infringing use as part of a “throwback uniform” feature of the game, allowing players to adorn their team with the old Ravens uniform featuring the infringing logo.

• Under the four-factor test, the court held that under the first factor, the use was “totally or  virtually non-transformative” because the game used the logo to augment sales of its product by seeking to profit from ‘nostalgia value’.

• With respect to the second and third factors, the fact that the nature of the work as an original drawing weighed against a finding of fair use as did the amount copied, because the entire logo was used.

• Finally, the effect on the market factor also weighed against a finding of fair use because the “NFL recognizes there is a market to exploit in the nostalgia value of throwback uniforms” and thus there is a potential market for the old logo.

• The case will now enter the damages phase and Mr. Bouchat will attempt to show profit attribution from the infringing use, a potentially thorny issue.

Top is Mr. Bouchat’s original drawing, and bottom, the actual logo
used by the Ravens during their first three seasons.

Napoleon Dynamite Profits Win For Fox

THResq: http://www.hollywoodreporter.com/thr-esq/napoleon-dynamite-lawsuit-fox-wins-397923

• Fox Searchlight, the studio which distributed the hit indie film “Napoleon Dynamite”, was sued by the production company behind the film for underreported royalties and improper revenue deductions to the tune of $10 million.

• A private judge was enlisted to handle the complex contractual issues and reached a decision in favor of Fox Searchlight on 9 of the 11 issues, whereby the producers will only be entitled to less than $150,000 based on a few small accounting irregularities.

• One of the core issues of the case was whether “Definition of Net Profits” was incorporated into the term sheet.  The lack of an explicit definition caused the parties to believe that the producers would receive a 10% royalty rate on one side or a 31% rate on the other.

• The entire decision can be found here:

• http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/Napolean.pdf

Our completely unscientific top ten list of cases and stories from 2012

10. Golan v. Holder decision
THResq: http://www.hollywoodreporter.com/thr-esq/supreme-court-ruling-foreign-copyright-laws-282931
Future of Music Collection: https://futureofmusic.org/blog/2012/01/27/thoughts-golan-v-holder

• Our first story was also included on last year’s list.  
• In January, on a 6-2 decision, the Supreme Court held that Congress had the right to enter into the 1994 Uruguay Round Agreement
• This was an international treaty that, in part, allowed foreign rights-holders to claim copyright protection on some works that were previously in the public domain.
• The Golan parties argued that the treaty violated the Constitution’s promise to “promote the progress of science and useful arts”. The government argued that there is a national interest in harmonizing US law with international copyright law.
• In the Supreme Court’s majority decision, the Court accepted the government’s position holding that “nothing in the text of the Copyright Clause confines the ‘Progress of Science' exclusively to ‘incentives for creation…evidence from the founding, moreover, suggests that inducing dissemination—as opposed to creation—was viewed as an appropriate means to promote science.”
• Some of the works affected are

• Books by C.S. Lewis, H.G. Wells, and Virginia Woolf
• The works of composer Igor Stravinsky
• Films by Federico Fellini and Alfred Hitchcock
• Artwork by Picasso and M.C. Escher

9. MegaUpload
USA Today: http://usatoday30.usatoday.com/tech/news/story/2012-01-19/megaupload-feds-shutdown/52678528/1
THResq: http://www.hollywoodreporter.com/thr-esq/us-judge-denies-megauploads-dismissal-lawsuit-kim-dotcom-377387

• This was a story that we did not cover this year, but it is an interesting one. (we talked about another…)
• In January, the U.S. government filed criminal charges against several of MegaUpload’s employees, including founder Kim Dotcom
• The government alleged criminal copyright infringement, racketeering, money laundering and fraud

• Users received cash bonuses if they uploaded content popular enough to generate massive numbers of downloads
• Most of the content infringed copyrights
• Government alleges that they turned a blind eye to takedown notices, by taking down only the alleged infringement from the notice, while keeping other copies of the same content available on other servers
• Some of their servers were located in Virginia, giving the government jurisdiction
• This led to the shutdown of the MegaUpload site
• Dotcom is a Dutch citizen that currently resides in New Zealand, but an extradition hearing is set for March

8. Aereo
THResq: http://www.hollywoodreporter.com/thr-esq/barry-diller-aereo-judge-denies-injunction-348101
THResq: http://www.hollywoodreporter.com/thr-esq/tv-broadcasters-tell-appeals-court-395858
Bloomberg: http://www.bna.com/stream-stream-b17179871342/

• Aereo assigns a miniature antenna to each subscriber, enabling them to access broadcast content through the internet and mobile devices.  The broadcast companies, including CBS, Fox, and NBC Universal, who rely on retransmission fees for those stations from cable and satellite distributors, have sued Aereo, claiming that Aereo is in violation of retransmission and copyright law.  
• Aereo claims that its system creates unique, user-requested copies that are transmitted only to the particular user that created them and, therefore, its performances are nonpublic.
• Aereo managed to avoid an injunction in the Southern District of New York in July, but a recent appeal hearing has been held in the Second Circuit.  The decision is pending.
• During the latest hearing, the cable networks attempted to distinguish Aereo from the Cablevision DVR case from 2008, where the 2nd Circuit ruled that “each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber … such transmissions are not performances ‘to the public.’”

• Here, though, the broadcasters argue that the primary transmission was not licensed
• Also, the Cablevision service was a “storage service,” not a “retransmission service” like Aereo

7. Political Campaign Music Lawsuits
CreateProtect: http://ipandentertainmentlaw.wordpress.com/2012/01/27/cease-and-desist-to-newt-gingrich-over-how-you-like-me-know/

• With this being an election year, we had a slew of lawsuits involving musical artists suing to have various political campaigns stop using their music at campaign events
• Just a sampling:

• Newt Gingrich was sent a Cease & Desist letter by

• Third Side Music over “How You Like Me Now?”
• Rude Music over “Eye of the Tiger” (settled)
• Mitt Romney was sent a Cease & Desist letter by

• The Silversun Pickups
• BMG Music for using a clip of Barack Obama singing “Let’s Stay Together” (though they didn’t complain when Obama sang it in the first place)
• From Tamera’s blog: “So long as a campaign secures the necessary public performance license, a song can be played at campaign events without any permission from the artist, songwriter or music publisher.  If [the politician] would like to incorporate the song into a video or advertisement, then his team would need to secure a master use license from the record label and a synchronization license from the music publisher.”

6. Dish Network AutoHop
THResq: http://www.hollywoodreporter.com/thr-esq/judge-denies-injunction-dish-autohop-387458

• Earlier this year, Dish Network began offering its customers a DVR feature that allows viewers to completely avoid commercials rather than just fast-forward through ads.
• Dish made a preemptive move and filed for a declaratory judgment in New York that its ad-skipping technology complies with copyright law.
• CBS, NBC, and Fox rushed to file lawsuits in California, and a New York judge approved the change of venue for most of the issues, while keeping parts of the case, including the overall dispute with ABC and portions against CBS and NBC, in her own court.
• Recently, a District Court judge in California has denied a preliminary injunction, while hinting that

• Dish may not be vicariously liable for customers’ time-shifting use, and
• She is unsure about copyright infringement liability, but if liability is found, a fair use defense would be unlikely to prevail.

5. Superman
THResq: http://www.hollywoodreporter.com/thr-esq/warner-bros-wins-big-court-379770
THResq: http://www.hollywoodreporter.com/thr-esq/superman-lawsuit-warner-bros-marc-toberoff-341785

• Superman was created in the 1930’s by Jerry Seigel and Joe Schuster  
• The fate of the Schuster estate’s rights to the character of Superman was decided recently.

• This particular ruling dealt with the claims of Schuster’s heirs regarding two agreements:

• A 1975 agreement providing the creators with a lump sum payment followed by additional annual payments, totaling $4 million to the creators
• A 1992 agreement made by Schuster’s heirs after his death, which increased payments and took care of Schuster’s outstanding debts.

• The court held that, although pre-1978 copyrights are subject to termination, this 1992 agreement supersedes any previous agreements and waives any right to termination for the Schusters.  The court pointed out that at the time of the 1992 agreement, Peavy was aware of the termination right and can’t claim ignorance.

• The Defendants argued that the 1992 Agreement was not meant to supersede the 1938 Assignment. The District Court disagreed. Relying on the language [of that contract], it found that “the 1992 Agreement first settled all claims, and then granted DC [Comics] ‘such rights’ as were just settled, essentially revoking and regranting all copyright agreements and interest.”
• During the case, we had an interesting story regarding attorney for the Schuster’s Mark Toberoff.  

• Documents pertinent to the case were stolen from Toberoff’s office and anonymously delivered to Warner Brothers.  Information from these documents was used in Warner’s original answering brief.  
• Toberoff argued that they were subject to Attorney/Client privilege, but since they were disclosed to law enforcement (in connection with the investigation of the break-in) the 9th Circuit found them to be admissible.  
• Toberoff once again objected, and the 9th Circuit has now ruled that a new brief be written WITHOUT the purloined information.

• In a separate suit, the heirs of co-creator Jerry Seigel were successful in recapturing some copyrights to Superman (specifically his costume, Clark Kent identity and his origin story) in 2008.  This case is going to be heard on appeal in the 9th Circuit very soon.

4. JOBS Act
SEC: http://sec.gov/spotlight/jobs-act.shtml
Christian Science Monitor: http://www.csmonitor.com/USA/Politics/2012/0308/What-does-the-JOBS-Act-actually-do-Six-questions-answered/What-s-in-the-JOBS-Act

• In April, President Obama signed into law the Jumpstart Our Business Startups (JOBS) Act, with the aim to ease restrictions on raising capital for startups.  This act requires that the SEC make rules in order to:

• Remove the ban on general solicitation for Rule 506 offerings

• The proposed regulation changes would allow general solicitation and advertising of investments, provided that the issuer make reasonable efforts to ensure that all purchasers are accredited investors
• The comment period on this change has ended, and we are awaiting a final decision by the Commission
• Creates new exemptions for “crowdfunding,” by

• allowing issuers to raise money from a larger pool of investors through new crowdfunding portal intermediaries
• limited to $10,000 or 10 percent of an investor's annual income, whichever is less
• These rules have not been adopted yet
• The section of the JOBS Act titled the CROWDFUND Act stands for “‘Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012.”   Imagine the amount of taxpayer dollars it took to come up with that unwieldy acronym.

3. Copyright Termination Suits
THResq: http://www.hollywoodreporter.com/thr-esq/village-people-ymca-lawsuit-victor-willis-321576
THResq: http://www.hollywoodreporter.com/thr-esq/ray-charles-estate-sues-singers-306826

• This year, a few authors attempted to take advantage of an amendment to the Copyright Act (17 U.S.C. §203) that went into effect in 1978, which allows a termination of a pre-1978 grant of copyright after 35 years, provided that adequate notice of termination is given
• Victor Willis of the Village People was successful in terminating his grant of rights to Can’t Stop Productions, even though he is one of several authors of the songs
• The Ray Charles Foundation accuses Charles’ children of sending copyright termination notices to music publishers claiming they owned the songs, which the foundation contends it owns.  Charles created a $500,000 trust for each of his 12 children two years before his 2004 death in exchange for agreements from them that they “relinquished and waived any further claims to their father's estate.”  Charles renegotiated his copyrights in 1980.
• Artists such as Bob Dylan, Tom Waits and Tom Petty have sent their own notices, so expect this to be a big story in 2013

2. Right of Publicity Cases
Monroe – http://www.hollywoodreporter.com/thr-esq/appeals-court-rules-marilyn-monroes-image-public-estate-367160
Einstein – http://www.entertainmentlawmatters.com/?p=2278
Bogart – http://www.businessweek.com/news/2012-08-01/burberry-drops-lawsuit-against-humphrey-bogart-heirs
Brando Furniture – http://www.hollywoodreporter.com/thr-esq/marlon-brando-ashley-furniture-lawsuit-couch-humphry-bogart-287389
Brando Madonna – http://www.hollywoodreporter.com/thr-esq/madonna-vogue-marlon-brando-estate-374979

• We had a few cases dealing with rulings on the posthumous Right of Publicity this year.
• Marilyn Monroe

• In August, the 9th Circuit ruled that, at the time of her death, Marilyn Monroe was domiciled in New York.
• The court ruled that, since at the time of her death her estate claimed that she was domiciled in New York to escape hefty estate taxes in California, the estate could not claim that she was domiciled in California in order to take advantage of a more generous right of publicity statute.
• In New York, there is no posthumous Right of Publicity.
• Albert Einstein

• Hebrew University of Jerusalem, who own the rights to Einstein’s likeness, had sued General Motors over a GM ad that featured Einstein’s face pasted on a muscular body which read, “Ideas are sexy too”
• The Central District of California interpreted New Jersey law, which has a posthumous Right of Publicity with no fixed duration
• Since dicta in NJ case law pointed to the use of the copyright duration (which at the time was 50 years) as an appropriate time frame, the court here adopted that
• Einstein had passed away 55 years before the infringement, leaving GM the winner here
• Marlon Brando

• The Brando estate has been involved in a couple of lawsuits this year
• First, the estate successfully brought a suit against Ashley Furniture for using the “Brando” name for a line of furniture.  They were awarded $356,000 for the unauthorized use under the California Right of Publicity statute
• Next, the estate is embroiled in a legal battle over singer Madonna’s use of Brando’s likeness during performances of her song “Vogue.”  

• CMG, the company who licensed the rights to various deceased entertainers for Madonna, was under the impression that Brando’s agent, BSP, had okayed a continuing license.  
• The mix-up occurred when CMG contacted BSP to let them know that the license fee had been increased.  BSP responded “Great news,” prompting CMG to continue licensing the rights to Madonna.
• CMG is now seeking declaratory judgment that the contract is valid.
• Humphrey Bogart

• In May, Burberry sought a declaratory judgment against the heirs of Humphrey Bogart, claiming that their use of Bogart’s image in advertisements was not an infringement on Bogart LLC’s trademark and publicity rights.  They had licensed an image of Bogart from Corbis for their Facebook page, but did not get a license from the Bogart estate.
• The estate countersued, but the parties have since settled.

1. Digital Royalty Lawsuits
THResq: http://www.hollywoodreporter.com/thr-esq/umg-reaches-settlement-trendsetting-lawsuit-384381
THResq: http://www.hollywoodreporter.com/thr-esq/sony-digitial-music-class-action-lawsuit-8-million-297761

• This year, many artists have sued over their royalty rate for digital music sales
• Those who have sued include James Taylor, Chuck D, Rob Zombie, Sister Sledge, Peter Frampton, and Kenny Rogers
• The case that started it all, FBT Productions v. Aftermath, which saw Eminem squaring off against Universal Music Group over the question of whether digital sales should be labelled “sales” or “licenses”
• The royalty rate for each is vastly different, with licenses garnering up to 50% of revenue
• The 9th Circuit ruled that these digital sales should be categorized as licenses, setting off a spate of lawsuits by artists aiming to get their fair share of digital revenue
• Earlier this year, Sony settled with a class of artists for $8 million
• These suits are still ongoing, and will surely be big news as we go into 2013