Entertainment Law Update Podcast #46 – Top Ten Stories of 2013 – Forecast 2014

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In this episode of Entertainment Law Update, Entertainment lawyers Gordon Firemark  Tamera Bennett and Peter Kaufman review the ten most significant  cases and controversies in the entertainment industry for 2013, and forecast what we'll be seeing in 2014..

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Show Notes

Our completely unscientific Top Ten Entertainment Law News Stories of 2013

10.  Google Books

Google Library Project decision

On November 14th,

NY District Judge Denny Chin has, at long last granted Google’s summary judgment motion, and dismissed the authors’ guild’s lawsuit concerning the scanning of entire books into their databases.  The ruling is that Google’s activities are fair – use, since the entire books are never made available in search results, and the positive impacts outweigh any risk to authors.

9.  Talent Agencies Act: Entertainment Lawyers Not Laughing

Hodgson Legal.

Solis v. Blancarte, TAC-27089 (Sept. 2013)

Background:

• For the first time, an entertainment lawyer has been definitively held subject to the Talent Agencies Act, and his fee agreement with the client voided…

• In the September 2013 case of Solis v. Blancarte, the Labor Commissioner found that Los Angeles attorney James Blancarte had violated the Talent Agencies Act by “procuring employment” for his client, sports reporter Mario Solis, without a talent agent license.

• The Commissioner stated that  “The principal and dominant activities that [Blancarte] performed on behalf of [Solis] pursuant to the engagement contract involved the negotiation of the compensation and other terms of the agreements for the employment of [Solis] by KNBC. The Labor Commissioner has long recognized that the acts undertaken in the course of negotiating an agreement for the employment of an artist constitute ‘procuring … or attempting to procure employment’ within the meaning of [the Talent Agencies Act].”

Ruling:

• Blancarte had argued that because he was a licensed attorney, his activities in negotiating the KNBC agreements on behalf of Solis should be treated as exempt from the TAA’s licensing requirement.

• But the Labor Commissioner held that the TAA contained no such exception. He cited Marathon Entertainment v. Blasi for the proposition that “any person who procures employment–any individual, any corporation, any manager–is a talent agency subject to regulation.” Thus, “it is of no moment that some of the skills [Blancarte] may have brought to the negotiations on behalf of [Solis] are the result of skills for which he has been licensed as an attorney.” Such skills may only be brought “in conjunction with, and at the request of, a licensed talent agency.”

Epilogue:

• The story is not over. Mr. Blancarte is preparing his appeal to the Superior Court and we will hear more on the plight of the California entertainment lawyer as unlicensed talent agent.

8. Youtube/Veoh cases

YouTube Again Beats Viacom's Massive Copyright Infringement Lawsuit:

Hollywood Reporter.

Viacom Intl., et. al. v. YouTube, Inc., et. al. – S.D.N.Y. Decision for YouTube – Apr. 18, 2013

Background:

• Lawsuit first filed in 2007.

• In 2010, YouTube prevailed in the Southern District of NY against Viacom and other broadcasters, who accused YouTube of hosting tens of thousands of copyrighted videos.  Viacom appealed to the 2nd Circuit.

• The 2nd Circuit Court of Appeals clarified the standard under which the courts should be viewing the DMCA “safe harbor” provision [512(c)], and remanded.

  • Requirements

    • Awareness of specific infringing material, or willful blindness to it

    • The right and ability to control infringing activity

  • The Judge noted that at the time of infringement, 75-80% of streamed material on YouTube contained copyrighted material, and suggested that YouTube was conscious of this fact

Case update:

• Now, the Southern District of NY has once again granted summary judgment in favor of YouTube.

• Actual Knowledge/Specific Instances: The court on remand did not find that Viacom could prove that YouTube knew about specific instances of infringement

  • Court notes that this would require a clip-by-clip assessment of knowledge, and that this evidence was lacking

• Willful Blindness: The court points to a failure on Viacom's part to identify specific clips, saying that the DMCA excuses YouTube from doing that search, and that the plaintiff comes up short in producing the kind of knowledge that would show willful blindness

• Right and Ability to Control: The court points out that this “requires something more than the ability to remove or block access to materials posted on a service provider’s website.”  Viacom tried to show this by alleging that YouTube did remove some, but not all, infringing clips, and that they organized and facilitated searches of the material.

  • “Plaintiffs' remaining evidence of control goes no further than the normal functioning of any service provider, and shows neither participation in, nor coercion of, user infringement activity.”

• Viacom intends to appeal the decision.

Universal Music Asks Court To Rehear Veoh Case Yet Again:

Techdirt.

UMG Recordings, et. al. v. Shelter Capital Partners, LLC, et. al. – 9th Circuit Court of Appeals petition for rehearing – April 4, 2013

Background:

• In a similar case to the Viacom v. YouTube case covered earlier, UMG first sued video sharing service Veoh in 2007 over Veoh’s hosting of copyrighted works

• UMG, losing at the district court level, appealed to the 9th Circuit Court of Appeals, where they were handed a defeat.  UMG petitioned for a rehearing, which was granted, at which UMG lost again.

• UMG is now petitioning the 9th Circuit for another rehearing, alleging that the DMCA’s safe harbor provision was misinterpreted.  They have three major arguments:

  • The Court’s broad view that the “by reason of the storage at the direction of a user” safe harbor in section 512(c) covers “all access-facilitating processes that automatically occur when a user” uploads is so overencompassing as to make the other safe harbors meaningless

  • The Court is ignoring long-standing copyright law when it rules that an ISP does not have “red flag” knowledge unless it is notified of specific instances of infringement

  • The Court looks for “something more” than just the “right and ability to control,” which disincentivizes policing and mitigation of infringement on the part of the ISP

7. Hart v. Electronic Arts

Hollywood Reporter.

Background

• Ryan Hart, a former Rutgers quarterback brought suit against Electronic Arts (EA) for violating his right to privacy, by using his identity and likeness in its NCAA Football Video games.

Lawsuit

• The district court granted summary judgment to  EA, finding that EA’s free expression outweighed Hart’s right of publicity, and the game contained creative elements transformative enough to constitute fair use.

• In a 2-to-1 decision, the 3rd Circuit Court of Appeals ruled that various NCAA Football Video games made by Electronic Arts (EA) did not sufficiently transform Hart’s identity.

• Appellate Court:

  • Reasoned that “the digital Ryan Hart does what the actual Ryan hart did while at Rutgers: he plays college football, in digital recreations of college football stadiums, filled with all the trappings of a college football game.” The appeals court used the “Transformative Use” test to analyze the creative contributions that might transform a protected work into fair use – a device usually reserved for copyright law.

  • Found that the user’s ability to alter the video game character’s appearances is insufficient to constitute transformative fair use of Hart’s publicity rights. “Interactivity cannot be an end onto itself.”

  • The court considered works that contain a plethora of creative elements that would possibly outweigh a minor portion that infringes a person’s publicity right.  The court stated, “It cannot be that content creators escape liability for a work that uses a celebrity’s unaltered identity in one section but that contains a wholly fanciful creation in the other, larger section.”

• This ruling is similar to the appellate court decision in a case brought by No Doubt’s Gwen Stefani against Activision for a portrayal of her in the video game “Band Hero” because having the singer perform in outer space did not sufficiently transform her

• image to constitute fair use.

6. Copyright Termination cases (Village People and Ray Charles kids)

Village People

New York Times.

• As we talked about on a previous show, Victor Willis of the Village People had terminated rights to his portion of thirty-three Village People hits, including “YMCA”.  In reaction, Scorpio Music and Can’t Stop Productions took him to court, arguing that Willis couldn’t regain the copyrights in that music since they were works-for-hire.

• Back in May, a judge granted Willis’ motion to dismiss these claims.

• Now, the issue that remains to be settled in litigation is how the rights will be divided between Willis and the other band members, namely the estate of Jacques Morali and Henri Belolo.

Ray Charles’ Children Win Lawsuit Over Song Rights Termination

Hollywood Reporter.

• Before his death, Ray Charles gathered his 12 children and left them each a $500,000 trust.  He left the rest of his estate to the Ray Charles Foundation, which benefits the hearing and vision-impaired.

• Recently, his children have attempted a copyright termination on many of his most popular songs.  The Foundation sued them, claiming that they had breached their agreement with their father.

• The California District Court judge made a few important rulings here:

• Anti-SLAPP statute applies to termination notices

• Therefore, the Ray Charles Foundation must prove the likelihood of prevailing in the case

• The key issue was whether the songs were work-for-hire or not

• If they were not, then they could not waive their termination rights under copyright law when Charles gathered his children prior to his death

• If they were work-for-hire, then the termination attempts were not claims against the Charles estate, and therefore there was no breach of contract

• The court also ruled that “Beneficial Owners” did not have standing to challenge termination notices and copyright infringement – the statutes were intended to apply only to authors, statutory heirs and grantees of transfers and their successors

5. Black Swan Interns case / Warner Bros. Music Class Action

Black Swan – Hollywood Reporter.

Ruling.

Glatt v. Fox Searchlight Pictures Inc. (S.D.N.Y. 2013)

Background:

• In 2011, Fox Searchlight Interns Alex Footman and Eric Glatt brought suit against the company.  They had worked as unpaid interns on the film Black Swan in violation of minimum wage and overtime laws.

• The claims were amended to join Plaintiff Kanene Gratts who interned on 500 Days of Summer and Plaintiff Eden Antalik who had also participated in the company’s internship program.

Lawsuit:

• Criteria to be a lawful training program/internship program:

  • Given in an educational environment

  • For the benefit of the intern

  • Intern does not displace regular employees

  • Employer does not derive immediate advantage

  • Intern is not necessarily entitled to a job at the conclusion of the program

  • Employer and intern understand that intern isn’t entitled to

• Searchlights Arguments:

  • The production companies (i.e. Lake of Tiers Inc.), not Searchlight, was responsible for the internship program.

Ruling:

• Federal Judge William Pauley granted summary judgment to the Plaintiffs who worked on Black Swan, finding that Searchlight was their “employer” under the Fair Labor Standards Act (FLSA) and the NY Labor Laws.

  • Judge found that Searchlight had the power to fire production staff, Searchlight closely supervised work, and that the crew of Black Swan was tied to Searchlight, not the production company.

  • In applying the factor test, the court found:

    • Plaintiffs provided immediate advantage to their employer performing low-level tasks not requiring specialized training

    • Benefits they may have received are the results of working as any other employee works, not of internships designed to be uniquely educational

    • They received nothing approximating the education they would receive in an academic setting or vocational school

• Judge Pauley also certified a class action that will explore internships throughout the corporate departments at Fox Entertainment Group. The judge found “the relatively small recoveries available to individual plaintiffs make a class action a more efficient mechanism.”

• The claims of the plaintiff who worked on (500) Days of Summer were time barred.

Warner Music – Hollywood Reporter.

Summons.

Henry v. Warner Music Group & Atlantic Recording Corp.

Lawsuit:

• In the midst of the Black Swan decision, Warner has be slammed with a suit by a class of previous interns who allege that they worked as employees for the music company.  (Another proposed class action has been filed against Conde Nast publications, in the wake of the Black Swan decision.)

• On June 17, led by intern Justin Henry, a class of approximately 100 interns filed a complaint in the NY Supreme Court to recover unpaid minimum wages and overtime.

• Henry claims he worked five days a week from 10:00am to 5 or 6pm. He sometimes stayed later, but almost always ran past the 40 hours per week that would trigger overtime.  He answered phones, faxed papers, filed, and got lunch for the other employees.

• The claims against Warner do not involve FLSA violation, but only violation of state labor laws.  The statute of limitations for the state violations is six years (apparently longer than the FLSA SOL).

4. Joel Tanenbaum damages award upheld.

3. Aereo

The Hollywood Reporter.

The Hollywood Reporter.

WNET v. Aereo, Inc. (2nd Cir. Apr. 1, 2013)

Background:

• Aereo’s launch in February, 2012 met with stiff resistance from major broadcasters including CBS, NBC, ABC, and Fox, who claimed copyright infringement.

• Aereo is a New-York-based tech company that launched a service in February 2012 which allows users to watch live or time-shifted television broadcasts over the Internet through the use of specialized antennas.

• Several broadcasters including Fox, Univision, and NBC have sued Aereo for copyright infringement for providing a means to capture their broadcasts. They claimed that the transmissions are public performances of copyrighted works.

• The district court refused to grant an injunction requested by the Plaintiffs. This refusal was appealed to the 2nd Circuit.

The Ruling:

• The 2nd Circuit upheld the refusal of an injunction against Aereo, stating that it is unlikely that Plaintiffs would prevail on the merits, so an injunction was inappropriate.

  • “We conclude that Aereo’s transmissions of unique copies of broadcast television programs created at its users’ requests and transmitted while the programs are still airing on broadcast television are not ‘public performances' of the Plaintiffs’ copyrighted works under Cablevision.”

• The 2nd Circuit also agreed with the lower court that Aereo’s streams to subscribers were not “public performances,” and thus did not constitute copyright infringement.

• The Court believed the case was similar to the Cablevision case because both services (Cablevision’s remote DVR service and Aereo) feature a system that “creates unique copies for each customer and that the transmission of the copy is generated from that unique copy and no one else can view it.”

• The Plaintiffs had argued that since Aereo doesn’t license the underlying programming, this situation is different from Cablevision. But the Court called the distinction “irrelevant” because “Cablevision did not hold that Cablevision’s RS-DVR transmissions were licensed public performances; rather it held they were not public performances.”

• The Plaintiffs have petitioned for an “en banc” rehearing on the injunction issue.

The Hollywood Reporter.

Hearst Stations, Inc. v. Aereo, Inc. (D. Mass. July 9, 2013)

New Litigation in Boston:

• Having expanded its footprint beyond New York, Aereo is again meeting resistance, this time from Hearst Stations, owner of ABC affiliate WCVB-TV, in Boston.

• Hearst Stations is demanding an injunction to stop Aereo’s activities in the Boston area, arguing that Aereo profits from “unauthorized retransmission[s] of copyrighted television programming” that would deprive WCVB of “existing and potential revenue streams from advertising and authorized retransmissions.”

• At the same time, Aereo brought a lawsuit against CBS, seeking a declaration about the legal validity of its system. CBS reacted by accusing Aereo of jumping the gun. It’s unclear whether or how that lawsuit will proceed.

2. Warner Chappell Moves to Dismiss “Happy Birthday” Lawsuit

http://www.hollywoodreporter.com/thr-esq/warner-music-aims-keep-happy-619757

Good Morning to You Productions v. Warner/Chappell Music, Inc. (S.D.N.Y. filed June 13, 2013)

Background:

• New York filmmaker Jennifer Nelson wanted to use the “Happy Birthday” song in her documentary about the song and its history, but was Warner/Chappell demanded a $1,500 licensing fee.

• The melody to the birthday song first appeared in 1893 as “Good Morning to All,” which had different lyrics. But the melody and new lyrics weren’t formally published together until 1935 as a piano arrangement, which is owned by Warner/Chappell.

• Nelson filed a proposed-class-action lawsuit against Warner/Chappell, claiming that the new lyrics, combined with the melody, were never properly copyrighted and should now be in the public domain. She also introduced evidence that the birthday song was being sung in its current form as early as 1901, so the piano arrangement wasn’t an original work of authorship.

Motion to Dismiss:

• Warner/Chappell has moved to dismiss the lawsuit, though it isn’t yet challenging the evidence. It is, instead, looking to trim the lawsuit.

• Warner/Chappell says that the state-law claims of unfair competition and false advertising are preempted by federal copyright law. And even if that's not true, it says the lawsuit is “bereft of the ‘who, what, when, where, and how’ of any fraudulent conduct.”

• Warner/Chappell also wants the judge to limit the scope of the lawsuit because the Copyright Act is subject to a  3-year statute-of-limitations period, which would bar certain plaintiffs from participating in the lawsuit.

• If that theory holds, the plaintiffs would have to amend their complaint.

1. Kirtsaeng v. John Wiley & Sons

Hollywood Reporter.

Background:

• Kirtsaeng, a U.S. college student from Thailand, had his friends and family buy foreign edition English-language textbooks in Thailand and mail them to him in the U.S. He sold the books on eBay making nearly $1.2 million.

The Lawsuit:

• John Wiley & Sons, the textbook publisher, sued Kirtsaeng claiming unauthorized importation and resale of its textbooks in violation of the Copyright Act.

  • § 602: “Importation into the U.S., without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the U.S. is an infringement of the exclusive right to distribute copies or phonorecords under § 106.”

  • § 106: “the owner of copyright under this title has the exclusive rights . . . (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership.”

• Kirtsaeng argued his resale was valid under the “first sale” doctrine.

  • § 109(a): “the owner of a particular copy or phonorecord lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”

6-3 Majority Opinion (Breyer, Roberts, Thomas, Alito, Sotomayor, Kagan):

• Both lower courts had found in favor of infringement. But the Supreme Court reversed, holding that the first sale doctrine applies to all works “lawfully made under this title” regardless of country of origin as long as the works are made in accordance with U.S. copyright law.

• Justice Breyer said that Congress would not have intended a geographic limitation on the first sale doctrine because of practical harms that would threaten ordinary scholarly, artistic, commercial, and consumer activities. Such a limitation would encourage businesses to move manufacturing abroad, for example.

Takeaway:

• The “first sale” doctrine trumps importation rights, at least for now.

What we’re watching for in 2014

• A result in the suit asking whether Sherlock Holmes:  Public or private?
• A result in the Happy Birthday:  Public or private?
• More copyright termination suits
• More Aereo type suits, as that service and others start to expand and proliferate
• Blurred Lines  – ruling on “transformative use”
• ASCAP  v Pandora licenses – future impact; case goes to trial  on 1/21/2014; settlement conference on 12/13/13. for determination of reasonable license fees.
• BMI v Pandora for determination of reasonable license fees pending SDNY 1:13-cv-04037-LLS; MSJ pending that is similar to MSJ in ASCAP case

Thanks and Shout outs to:

Kelsey Schulz, who mentioned a few other cases…

• Bikram Yoga Trademark NOT Copyright
• Designer Denied Say in Louboutin Mark Change
• Prenda Law Smack-down

Mark Tomlinson who reminded us that this was the year of the comic-book lawsuits. He  included the Marvel Copyright Ruling (ep. 44) in his list.

Aneal Vohra (photographer)

• Prediction for 2014 & Beyond:  I see the courts continuing(!) to expand Fair Use at my and other artists’ (financial) detriment.  Notwithstanding obvious commercial infringements, it “feels” like just about ANY use of our art media can be “tailored” into one or more Fair Use affirmative defense arguments.

Kia Kamran

• Mentions the  MIA/NFL Case
• and the Robin Thicke/Marvin Gaye case
• What he wants to see in 2014 is a right of publicity statute for famous ANIMALS!

Judith Dornstein

• Mentioned the NLRB cases dealing with Facebook posts by employees who are then disciplined or fired, etc.