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ENTERTAINMENT LAW OUTLINE WINTER 2008 (Hertz)
I. REPRESENTING TALENT, PART I
BUSINESS OF INTERMEDIARIES - Personal managers: are typically paid 15-20% of the artist’s gross income o Concerned with career development and will therefore be focused on long term planning, as well as day-to-day activities of their clients o Most common form of representative in music business o Typically get 15-20% of the gross income of the artist (gross income is reduced by very limited deductions (e.g., (1) tour support, (2) booking agency fees—typical booking agent gets 1015% so manager subtracts that from gross income to get a lower gross so they don’t take a commission off of the money the artist never even sees, and (3) light and sound for shows). There are usually no deductions for travel and hotels that comes out of the artist’s pocket. o Manager is “quarterback” of the team. They deal with record company, promotions, manufacturer, artists who design artwork for cover, publishers… - Business managers: typically receive 5% of income received by the artists o Usually have CPAS o Generally restrict themselves to financial aspects of client’s career: paying client’s bills, advising on investments, effectively running tours, and other extremely complicated functions o All money is funneled to the business manager who then writes the checks to everyone else. o Some business managers even handle the artist’s personal bank accounts—makes sure they are being fiscally responsible. - Agents: typically receive 10% of income from bookings o Job is to find work for their clients o CA Labor Commission won’t approve an agent’s contract that does not require a measurable level of performance: a certain amount of work must be secured on a regular basis, or the artist can terminate the agreement. o Agents cannot charge a registration fee. Trying to avoid taking advantage of people trying to get into entertainment business. - Lawyers: often have commission arrangements of 5% 1
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o Lawyers are distinguishable from the rest because they are governed by codes of professional behavior. o Lawyers work on hourly rate or contingency, or sometimes contingency and reduced hourly o Tell clients: never sign an agreement without having an entertainment lawyer represent you. There are many awful agreements out there. o You really have to be careful of conflict of interests! And make sure the client understands what those conflicts are and signs that he understands. o When you fill out malpractice insurance, answer it honestly! If you get a claim for COI and then insurance looks at your questionnaire and if you’ve answered dishonestly, they won’t cover you. Questions: Does anyone act as an agent for any artist? Yes, if you’re out soliciting recording or publishing contracts. Do you handle the finances for clients? Yes, even if you’re not giving financial advice and just hold the checkbook. o Don’t give advice to potential clients. o Always put a fee agreement in writing! And write “there is no guarantee on the services rendered.” o You must provide competent representation. You should always go to CLE classes. It shows competence if you need to defend a threat. o There can even be sanctions for giving a bad referral. It’s best to give 2 or 3 names so they can’t say that you told them to go to someone specific. o The most common action brought against attorneys is for negligence. o Some states require you to be licensed as an agent. MI doesn’t. The question is where you do the majority of your business. o Contracts with minors have to go to probate court and get approved by a judge. And typically, if there’s substantial income that could result, a conservorship must be set up with parent as guardian and they move to the court to spend it. ATTORNEYS ESTABLISHING AN ATTORNEY-CLIENT RELATIONSHIP - Courts and disciplinary authorities have found that the attorney-client relationship exists as soon as the client reasonably relies on the attorney’s advice. - Attorney should formally establish a professional relationship with a client and memorialize it in writing.
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Retention agreement should clearly outline the scope and conditions of the lawyer’s representation as well as the basis for the fee if the client decides to employ the attorney.
DUTY OF COMPETENCE - Once an attorney agrees to represent a client, MRPC 1.1 requires the lawyer to provide competent representation. Competence requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. - Continuing legal education programs for entertainment lawyers is a good idea. CONFLICTS
MULTIPLE CLIENT REPRESENTATION RULE 1.7: CONFLICT OF INTEREST: CURRENT CLIENTS (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing. Under MRPC 1.7(a), an attorney’s simultaneous representation of a music manager who is a prior client and an artist in negotiating their artistmanagement contract raises serious conflicts of interest issues. Concurrent conflict of interest may exist if there is a significant risk that the attorney’s responsibilities to the earlier client, the manager, may materially limit the attorney’s representation of the artist and violate 1.7(a). The manager’s attorney should ask the artist to retain independent counsel to facilitate the negotiation of the contract, to help ensure the 3
MRPC 1. THE COMMENTS TO MRPC 1. Some conflicts are nonconsentable. including whether the lawyer is representing the client in that transaction.COI rules are designed to advance confidentiality and undivided loyalty. and to avoid personal liability for violating the conflict of interest rules.7 . o They could also get written informed consent from both clients. .A lawyer shall not enter a business transaction with a client unless (1) transaction is fair and reasonable to client. to the essential terms of the transaction and the lawyer’s role in the transaction.8(f): permits someone other than the client to pay the lawyer for his services if the client gives informed consent and there is no interference with the lawyer’s independent professional judgment and relationship with the client.Absent consent. in writing and signed by the client. even when the mattes are wholly unrelated. OTHER NOTEWORTHY CONFLICTS OF INTEREST ISSUES MRPC 1. Note that the rule does not prohibit a lawyer representing a client in a transaction concerning literary property from accepting as his fee an ownership interest in the property.MRPC 1. though. a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter. (2) client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction and (3) client gives informed consent.8: CONFLICT OF INTEREST: PROHIBITED TRANSACTIONS: (see full rule on cTools) .Downloaded From OutlineDepot.8(d) precludes a lawyer from making or negotiating an agreement with the client prior to the conclusion of the representation that gives the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation. . RULE 1. . (b) Unless the former client consents after consultation. a lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated has previously represented a client 4 .9: CONFLICT OF INTEREST: FORMER CLIENT (a) A lawyer who has formerly represent a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation.com enforcement of an eventual agreement.
com (1) whose interests are materially adverse to that person.2 and 7. or when the information has become generally known. They can mail written ads and solicitation directly to prospective clients providing they are truthful and non-deceptive. (c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as Rule 1. Lawyers “shall not by inperson.3 would permit or require with respect to a client.Downloaded From OutlineDepot. live telephone.9(c) that is material to the matter.Lawyers often tend to act more like managers than agents. unless the person contacted is a lawyer or has a family. They also cannot state or imply that they are specialists in a field.Lawyers are agents and it is axiomatic that an attorney’s authority to represent clients creates an agency and fiduciary relationship. They can also advertise through recorded or electronic communication. AND (2) about whom the lawyer has acquired information protected by Rules 1. ADVERTISING AND SOLICITATIONS MRPC 7. close personal. . 5 .6 or Rule 3.6 or Rule 3. unless the lawyer has been certified as a specialist by an organization. or prior professional relationship with the lawyer.3 governs lawyer ads and solicitation. such as entertainment law. or real-time electronic contact solicit professional employment from a prospective client when a significant motive for the lawyer’s” contact is pecuniary gain. MRPC 1. . SPECIAL CONSIDERATIONS REGARDING LAWYER CONDUCT MERGING THE ROLES OF VARIOUS ENTERTAINMENT REPRESENTATIVES Entertainment attorneys who also act as agents or managers are still subject to their states’ codes of professional conduct to the extent that any of their activities involve the delivery of legal services. or (2) reveal information relating to the representation except as Rule 1.Lawyers can serve as managers or agents while simultaneously practicing law.9: a COI arises with a former client when the lawyer’s representation of a new client bears a “substantial relationship” to the matter of the representation that the attorney provided to a former client.3 would permit or require with respect to a client.6 and 1. including public media. Lawyer should withdraw from representation or seek the former client’s informed consent regarding the COI. MUSIC LAWYER AS MANAGER OR AGENT .
for not advising him of the conflicts of interest in the attorney’s simultaneous representation of both Grisham and his agent. or 2.Customary contingent fee ranges from 5% to 10% of the defined compensation earned by the client and rarely exceeds 10%. o This provision requires the client to pay the contingency fee for the lawyer’s past services even after the representation is terminated.10: IMPUTED DISQUALIFICATION: GENERAL RULE (a) While lawyers are associated in a firm. . . clients can fire terminate employment contracts with lawyers at any time. breach of contact or fraud.Unlike employment contracts with managers and agents. or a firm with which the lawyer was associated. .com COMPENSATION FOR ATTORNEY SERVICES AND RETENTION AGREEMENTS .Contingent fee agreements must be in writing.Two principle methods to hold judges and lawyers accountable for their misconduct: o (1) File lawsuit against attorney for civil liability (negligence. SANCTIONS . 6 . RULE 1.The definition of compensation is a negotiated term.2.Lawyer contingency agreements.Lawyers hourly range from $200 to $400. o (2) States disciplinary systems. clients file grievance against an attorney. may also provide for a declining percentage rate after expiration of the term (a “sunset provision”). 1. usually for a period of 6 to 12 months. in part.5 requires hourly and contingent fees to be reasonable. is disqualified under Rule 1. .Model Rule 1. like personal management contracts. and (2) written notice is promptly given to the appropriate tribunal to enable it to ascertain compliance with the provisions of this rule. the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer.9. usually) Example: John Grisham sued his attorney for breach of fiduciary duty and malpractice. none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rule 1. fiduciary breach. 1. (b) When a lawyer becomes associated with a firm.7. signed by the client.9(b).Downloaded From OutlineDepot.8(c). unless: (1) the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom. Grisham claimed he retained the lawyer on the advice of his agent and that the attorney failed to tell me that he didn’t have to renew his original agreement with the agent. . .
and literary work. unless: (1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client. “scale” payments. what you will do if there’s a conflict.The overwhelming majority of working performers in these industries are represented by agents.Conflicts of interest paragraph 8: tell client that they may come up. the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer. who you can represent in the case of a client. or amounts received by way of reimbursement for items like travel expenses in connection with work).There is no contact between Screen Actors Guild (SAG) and Association of Talent Agents (ATA) (as of the time of writing of textbook).e. representing artist clients in film. o If agent lacks a union franchise.Contingent fee in writing and is reasonable . page 23 Notice: .com (c) When a lawyer has terminated an association with a firm. commercials. See sample Engagement Letter of Agreement.. radio. o Note: ATA is a nonprofit trade association of more than 100 talent agents primarily located in LA and NY. o Major point on which union will insist:: agent can’t commission minimum salaries (i.9(c) that is material to the matter.e.Most major agencies continue to operate under the parameters of the prior agreement BUT smaller agencies have been more aggressive regarding what funds are commissionable.Downloaded From OutlineDepot.NY and CA both require agents to be licensed! 7 . licenses under which agents agree to abide by specific union regulations. the members of that union cannot engage that agent to represent them.Agents will seek a rate of scale plus 10% (i. who are heavily regulated by the unions through their “franchising” systems. .. and (2) any lawyer remaining in the firm has information protected by Rules 1.. and not currently represented by the firm. TV. .e. i.6 and 1. (d) A disqualification prescribed by this Rule may be waived by the affected client under the conditions stated in Rule 1. STATE REGULATION OF AGENTS .7. the amount of agent commission allowed under most franchise agreements). stage. . AGENTS AND PERSONAL MANAGERS UNION REGULATION OF AGENTS .
and unless he comes within the exception of § 171(8) as a personal manager where the seeking of employment is only incidental to the business of managing. acting as a manager under a management contract that provided he was not required to procure employment. . Laine.§ 189: enforcement of provisions . child labor. Notes: . o Mandel: a non-practicing attorney. and only service performed by π (even though he was trying to become the manager) was procurement of recording K π not exception. labor. Issue: Whether π was acting as an employment agent or as the personal manager of the Δ when he performed the alleged services for the Δ? Reasoning: .Y. Holding: Δ wins.§ 181: duty of employment agencies to give each applicant for employment copy of contract and receipts of payments made by applicant .§ 172: license required for employment agencies .) o Can’t engage in any other business on premises of employment agency .2d 303 (NY App 1971) Facts: π sued for $35k for work. and services performed in arranging a recording contract between Δ and ABC Records. NEW YORK GENERAL BUSINESS LAW—see page 29 for full terms .S.§ 187: additional prohibitions o Can’t induce employee to terminate his employment in order to obtain other employment through the agency o Can’t send someone to employer that agency knows of should knows violates state or federal laws (wages.If π not licensed as an employment agency. Fundamental question: who is an agent? o Pine: a one-shot effort at securing a recording contract resulted in a decision that the “finder” was an agent.CA provides exclusive original jurisdiction over talent agency disputes to the Labor Commission. was found to be a manager rather than an unlicensed agent. 321 N.Downloaded From OutlineDepot. 8 . Remember: licensed and unlicensed agents are affected by the legislation of the jurisdiction. etc.§ 185: fees .com - o Serving as an agent without registering and being licensed can carry severe penalties. he may not recover.Δ had a manager.§ 190: penalties for violations Pine v.
25: Trust Fund Accounts. or oppressive to artist. Mandel v. must be posted in conspicuous place in agency . California Labor Code—see page 38 for full terms .§ 1700. Liebman.5: talent agents must procure a license from Labor Commissioner (LC). which could be held by a nonlawyer. he was acting as a manager.2d 149 (NY 1951) Facts: Liebmann signed K with Mandel.23: contracts between agency and artists must be submitted to LC for approval o Except for conditions of § 1000.41: Reimbursement of artist for expenses incurred in going outside city in unsuccessful effort to obtain employment .§ 1700. Issue: Was Mandel acting as an attorney such that his client could discharge him at any time? Lower court said yes.§ 1700. Appeal o Parties shall refer controversies to LC who will hear and determine the dispute.E.44. . Mandel was not acting as an attorney.The K can’t be seen as an attorney retainer agreement because Δ was employed as π’s personal representative and manager.§ 100. to the superior court where it shall be heard de novo.com - NY has no such statutory procedure and questions must be resolved in court.§ 1700. .K said that Mandel was not required to procure contracts or work and if Liebman “needs additional work … an agent shall be employed by Liebman to procure such employmen and services of that agent shall be separately paid for by Liebman.§ 1700. Disbursement of Funds.21: Grounds for revocation or suspension of license .40: Repayment of Fees .37: Contracts with minors . to be his “personal representative and manager” for 5 years for 10% of gross receipts.45: Validity of Contractual Arbitration Provisions o Notwithstanding § 1700. . a nonpracticing attorney engaged in business of personal management.Downloaded From OutlineDepot. 100 N. subject to an appeal within 10 days after determination. it cannot be said that it was unconscionable. contracts shall have an agreement by talent agency to refer any controversy between the artist and agency relating to terms of the K to the LC for adjustment o K will not be approved if unfair.45. Reasoning: .” Holding: reversed. Recordkeeping Requirements .Since π was required to render some service to Δ under the K. . unjust.44: Dispute Determination by Commissioner.§ 1700.§ 1700.§ 1700. K made clear that Mandel was not an agent. arbitration clauses are valid if: 9 .
whether they are licensed or not. which gives the Labor Commission jurisdiction over them.Franklin managed Richard Pryor from 1975 until 1980.918 to Pryor. OR (b) Clause is inserted in contract pursuant to rule. 262 P. Laurie. He held himself to third parties as Pryor’s “agent. are bound and regulated by the Artists’ Managers Act (and the Talent Agency Act). AND (c) Contract provides reasonable notice to LC of time and place of hearings. 364 (Cal.The musical group Jefferson Airplane sued their personal manager. Franklin (Labor Commission 1982) [Case shows the draconian punishments which can befall one who falls on the wrong side of the line of being an agent or not. Ct. or return.Agents. is controlling. Jefferson Airplane claimed that. Their written agreement stated that Katz was neither authorized.General holding: procurement efforts require a license and that the substance of the parties’ relationship. regulation. 10 . . Matthew Katz. Katz did indeed procure bookings for them.Special hearing office held that Franklin acted as an unlicensed talent agency and agreement between Pryor and Franklin was void and unenforceable. not its form.] . 1967) . . Franklin was ordered to repay $3. without ever directly seeking to obtain employment for her.com (a) Clause is in agency-talent agreement. 62 Cal. and promised to procure employment in all fields of entertainment for Pryor.000 of Pryor’s funds. Buchwald and Raden establish parameters for determining who was and who was not an “agent” in CA. . Superior Court of San Francisco. Raden v. now would he obtain employment for the group. Pryor v.Downloaded From OutlineDepot.” negotiated many agreements on Pryor’s behalf.110. Buchwald v. some $1. There was evidence that he did not account to Pryor for. 1953) The alleged agent confined his activities to working to develop the poise and skills of a young actress and to taking her around to auditions where she might obtain work. AND (d) Contract provides that LC or authorized representation has right to attend all hearings.Court looked to illegality lying behind the contract to determine whether the contract was prohibited. Katz argued that written agreement established that he was not subject to statutory regulation.Rptr. or contract of a bona fide labor union regulating the relations of its members to a talent agency. App. despite the contractual language.850.2d 61 (Cal. .
The job of personal managers is to “primarily advise. see below: Barr v. App. . Reasoning: . a different panel of the same court subsequently expounded a “bright line” theory—ANY unlicensed activity was covered by the Act. these activities require a license as a talent agent. 2d Dist. . Rothberg (Labor Commission 1992) Facts: Barr filed petition to determine whether Rothberg was her agent under an Agreement or whether he had violated the Labor Code.Court prescribed a “center of gravity” test to be applied to the representative’s entire business: if the representative’s overall business was not within the ambit of the Act. (Ct. 1995) However. Hirsch. Peppersorn Prod. They advise in both business and personal matters. But see: Waisbren v. but rather to aid Barr in the achievement of the goals she desired.Because Park would receive a commission from obtaining the record contract.To conclude that Rothberg acted as a talent agent requires a finding from all the evidence presented that Rothberg engaged in the procuring. not a talent agent. App. direct.com Pryor could be seen as indicating that a true manager cannot participate in the negotiation process. Holding: affirmed LC’s decision to void the management agreements.The William Morris Agency continued to represent Barr through the period at issue. Deftones (Ct. Curry (Ct. [REMEMBER: under CA Talent Agencies Act. Holding: Rothberg acted as a personal manager. 1993) . promising or attempting to procure employment or engagements for Barr. 1999) [Highlights the Waisbren bright line rule] Facts: Dave Park had written contract with Deftones in return for a 20% commission on all income earned from the employment he secured. frequently lend money to young artists and serve as spokespersons for the artists.Downloaded From OutlineDepot.] Reasoning: . Inc. 11 . 2d Dist. Wachs v. 2d Dist.Negotiation meetings were a joint effort between Rothberg. but that’s not always the case.” . all working on Barr’s behalf. not for the purpose of “procuring” employment. he was in effect acting as an agent. and coordinate the development of the artist career. App. Park v. offering. and WMA. Park also procured 84 performance engagements and a recording contract with Maverick Records without being a licensed agent. counsel. the representative would not be considered an unlicensed agent even though performing activities covered by the act in a specific instance.
. ABKCO Music. . The court found that there had been a copyright infringement based on a theory of subconscious copying. copyright holder of “He’s So Fine” (HSF) brought copyright suit against George Harrison.Issue one: Bright Tunes Music Corp.Issue two: ABKCO was Harrison’s former agent and negotiated for the purchase of Bright Tunes’ stock (including HSK).An action for breach of fiduciary duty is a prophylactic rule intended to remove all incentive to breach—not simply to compensate for damages in the event of a breach. 12 . Tobin (Labor Commission) CA LC ruled that an attorney who owned a production company was not procuring employment as an agent for an artist/client when he hired the artist to be in one of his productions. and related entities. alleging that Harrison’s “My Sweet Lord” infringed.Appellant’s conduct didn’t meet the standard required of him as a former fiduciary. But this rule does not cover use of information based on general business knowledge or gleaned from general business experience.An agent has a duty “not to use confidential knowledge acquired in his employment in competition with his principal. Inc. Allegation: ABKCO improperly used confidential information received from representation of Harrison. v. not as an agent "with third parties" within the meaning of the Act. BUSINESS MANAGERS Because the business manger is privy to the most intimate details of the client’s economic life.. . a very high level of fiduciary duty attaches.Evidence here is not at all convincing that the information imparted to Bright Tunes by Klein was publicly available. . conflict of interest issues were raised but not resolved by the Commissioner.” This duty exists as well after the employment is terminated as during its continuance. (2d Cir. Harrisongs Music.Downloaded From OutlineDepot. The Commissioner held that an attorney having an ownership interest in the employment is functioning as an employer. and the former agent is permitted to compete with his former principal in reliance on such general publicly available information. . Ltd.com Chinn v. However. 1983) .
Not uncommon for the personal manager to be someone who has supported and perhaps financed the artist’s career from the beginning 1. Could be on a sliding scale – increased percentage as money earned increases b. Usually long-distance travel must be approved 3. And large expenses must be approved v. It is very rare to find anything limited to less than world-wide coverage ii. Personal Manager Contract a.Downloaded From OutlineDepot. and not the manager b. It may therefore be complicated to advise the artist to obtain a more experienced manager v. There is a tension between choosing a manager experienced enough to deal with the complex demands of a signed artist and one with enough time to give personal attention iv. Regardless of the terms.com II. Expenses 1. Introduction i. Generally the world. Typical management agreement is 15-20% a. Elvis’s manager had 50% 13 . the scope of the relationship can be very different from relationship to relationship iv. PART II I. Compensation 1. Might provide for a short initial period with an option to extend for a longer period if certain goals are met iii. May be a term of years. REPRESENTING TALENT. Usually provides for reasonable expenses 2. Terms of example personal manager contract i. Advice and counsel 2. Reasonable efforts to enhance and promote career and reputation a. or even a number of touring cycles 2. Services provided 1. Term 1. The client remains the artist. and develop the artist’s career ii. Personal manager’s role is to advise. Usually 2-5 years 3. counsel. Territory 1. and failure to do so may be a material breach 3. The artist will also be under an obligation to continue the career. An important role of attorneys is in helping choose the personal manager iii.
and total amounts paid for packages b. you won’t want it because it will be a compromise x. Will provide that the manager can enter into various contracts on the artist’s behalf 2. May provide that artist approval is need for material terms a. partnership interests. Table of Talent Agency Requirements in Every State 14 . Life insurance clause 1. The artist will have a right to audit the books and records 2. Provides that the artist will have a life insurance contract that will be available to cover expenses and possibly compensation in the event of death xi. Loans 1. Costs incurred to collect gross income (like attorney’s fees and auditor’s costs) 3. Power of attorney 1. The manager will keep adequate books and records vii. Accounting and audits 1. May have an unavailability clause to allow the manager to enter into certain contracts when the artist is unavailable b. but that if there are loans. Talent Agency Requirements in NY and California b. artist must agree on tour dates viii.Downloaded From OutlineDepot. Will not include recoupable costs c. bonuses.com 2. Money paid as tour support e. Income derived from an entity in which the manager has an ownership interest d. Managers end up loaning the artist money 2. and even reengagements of the same contracts if within a year vi. This is because the contract loses its value if it were to be performed by someone else ix. Also includes gifts. there will be separate agreement II. Talent Agency Licensing a. shares of profits. May or may not want an arbitration clause 2. Assignment 1. If you do things above-board. Generally not allowed except to an entity owned or controlled by the manager 2. Usually includes a commission on contracts that continue after the termination of the relationship. The percentage is generally on gross money actually received (money earned. In general. shares of stock. May want to provide that nothing in the agreement is meant to imply an obligation to loan. but not received is generally not commissionable) a. Arbitration clause 1.
Securing the Rights to Produce the Entertainment Property 2. effect and nature of breaches of the agreement II. TALENT CONTRACTS. PART I I. statutory restrictions f. will contract for both rights (in existing works) and services (in future works or employment) B. whether services are exclusive or non-exclusive d. Introduction A. services to be performed by the artist h. producers.com III. music publishers. existence of formal contact between the parties b. whether such contract is in writing c. consideration flowing to the artist g. record companies. Enforceability • depends on a number of factors a.Downloaded From OutlineDepot. terms of agreement e. Regulation • state law (usually either California or New York) dictates whether a formal contract exists 2. etc. Two General Types of Deals 1. Contracts with Minors A. film studios. Regulation and Enforceability of Personal Services Contracts 1. Contracts that SECURE THE TALENT (that is what we are concerned with in this chapter) • these are often personal services contracts • they also usually include the acquisition of rights owned or controlled by the talent • class notes: book publishers. Introduction • big area of personal services contracts 15 .
New York • Age of Majority: 18. Employers then have to directly deposit 15% of the money into the trust account. Coogan Law (California Family Code Section 6752): parents or guardians must establish trust accounts for their children. Contract Duration 16 . • An agreement cannot be disaffirmed if party seeking minor’s services complies with court approval provisions (this is usually parental consent). There are also protections in place to protect the minor’s earnings. B. In New York and California. At common law. the New York Child Performer Education and Trust Act. the infant is not entitled to be put in a position superior to such a cone as he would have occupied if he had never entered into his voidable agreement. 1948). Brodel (Cal. it is a good idea to get the parent to execute a valid release. Basically. Rule(s) to Remember: • After disaffirmance. which essentially mirrors the Coogan Law. • New York also has its version of the Coogan Law (above). He sought to avoid responsibility to his manager for commissions due in the future on income from performance contracts already obtained for him by the manager. He is not entitled to retain an advantage from a transaction which he repudiates. • Infant is thus responsible for the wear and tear on the goods returned by him. page 88) Facts: Infant actor disaffirmed personal services contract. Coogan Law: parents or guardians must establish trust accounts for their children. III. Employers then have to directly deposit 15% of the money into the trust account. a minor cannot disaffirm when a parent has done so. Warner Bros v. The privilege of infancy is to be used as a shield and not a as a sword. those States gives judges the power to affirm or disaffirm such contracts.Downloaded From OutlineDepot.com • • • • California or New York law generally governs. However. • There are also protections in place to protect the minor’s earnings. Andrew Kavovit (NY 1990. C. • Court approved minor contract can extend to option periods as well. California and New York have statutes which greatly restrict minors rights to do so. California • Age of Majority: 18 (California Civil Code Section 25) • An agreement cannot be disaffirmed if party seeking minor’s services complies with court approval provisions (this is usually parental consent). minors can usually disaffirm a contract. Also. Case: Scott Eden Management v.
The code is designed only to protect employees. they usually do it one project at a time. there is mutuality. • Thus. the stars were locked up in contracts with one studio for a long time. and for extension of the term of the agreement. 1944. Analysis: • This case is distinguishable from the previous one because in that case the acting was performed by the employee at the discretion of her employer at places designated by her employer. California 1. Warner Brothers Pictures (Cal. • In this case. California is unique with its limitations on the duration of personal service contracts. Hall Syndicate (New York 1963.com A. the contract is not vague. There was no supervision and plaintiff worked as he pleased. page 93) Facts: The sole question is whether the provisions for suspension. Case: De Haviland v. Rule(s) to Remember: • The seven years means seven years and cannot be waived. plaintiff still owes 25 weeks of service. • Furthermore.. Seven Year Statute o Today. plaintiff cannot get out of the contract. were lawful and effective insofar as they purported to bind plaintiff beyond seven years from the date her services were commenced. not independent contractors. If they were lawful. It is enforceable. Nowadays. Case: Ketcham v. plaintiff’s performance was delivered by him at defendant’s New York office of six daily cartoon panels per week. he is like an independent contractor. otherwise the contract cam to an end earlier. Statutory Termination Rights in California • By employer: Section 2924. of in case of his 17 . Thus. Introduction • • In the old days. 1920s etc.Downloaded From OutlineDepot. maybe like 10 years. B. the California enactments require thorough analysis. Contract provided that the panels were to be delivered to Hall’s office in the City of New York at least 6 weeks prior to the scheduled date of release. page 98) Facts: Creator of Dennis the Menace and Syndication company entered into agreement for the syndication by Hall of the cartoon panels. o California statute limits enforcement of personal service contracts at 7 years. 2. Also. Grounds for termination by employer o An employment for a specific term may be terminated at any time by the employer in case of any willful breach of duty by the employee in the course of his employment. Employment for specified terms. Since so many entertainment transactions are subject to California law.
Case: Warner Bros v. Garner wants damages for breach. Here. though. An employment for a specific term may be terminated by the employee at any time in case of any willful or permanent breach of the obligations of his employer to him as an employee. or wrong. However. was hired for her creativity. De Mille Pictures (Cal. malicious. the Court finds that the writer’s strike did no such thing here. or postponed. • (1) She. that that contract was breached by the company when they failed to pay him. discontinued James Garner’s compensation under a contract because of it.com habitual neglect of his duty or continued incapacity to perform it…. Thus. • (2) She was late on the set a handful of times only. and that was because her costume required must time to configure. It amounts to nothing more than this: That the person knows what he is doing. he need not treat the contract as broken but may sue on the 18 . it follows then. • On crossclaim. which was even fostered and encouraged by the directors. 1961.Downloaded From OutlineDepot. it must be remembered that Garner was not discharged. The question. page 106) Facts: The basic question in this case is whether the termination was wrongful or whether it was justified by acts of the respondent violative of the terms of the contract. Case: Goudal v. as an actress. Where he has not been discharged but merely has been prevented by the employer from working. 1931. but merely that the thing done or omitted to be done or omitted was done so intentionally. interrupted. Garner informed Warner that they were in breach of their obligation and told them that the contract was terminated as a result. The law is that if an employee is discharged his remedy is an action for damages. grounds for termination by employee. Warner Bros. Willful does not imply anything blamable. Cecil B. They relied on the force majuere clause in the contract. The employer advanced two reasons for firing her: (1) she interpreted and performed her parts as she saw fit creatively and (2) she was late on the set a couple of times. intends to do what he is doing. o By Employee: Section 2925. Analysis: • First. page 111) Facts: There was a writers strike. Employment for specified term. • So. the contract did provide that they could refuse to pay him if the series was suspended. is whether that breach was willful. Analysis: • Both of the reasons advanced by the company were wrongful. This is unlike a case of an actress who is habitually and substantially late onto the set. Bumgarner (Cal. and is a free agent. there has been a breach of the contract. as required by the statute.
Metro entered into an oral agreement with an actor to star in the pilot. Oral Agreements 19 . Analysis: • The agreement was performable within one year. In any event. management changes. performance for this series would have been complete before the first broadcast date. Therefore. and willing to perform. or there are scattered memos but no single. page 118) Facts: Metro. when the great concept does not live up to expectations. the contract was terminable at any time within a years whenever ABC chose.Downloaded From OutlineDepot. and he is entitled to be paid for that period. able. while Garner had a right to terminate the contract. b. in the process. these questions are moot. and. Garner terminated the contract about one week after the commencement of the term. and everyone is happy. There is no problem because the idea becomes a deal that produces a success. • The statute of frauds is thus not applicable and cannot serve to defeat plaintiffs claim. a producer made a deal with ABC. Nor is it unusual for a third party to govern the possibility of performability of a contract.. The right he had was the option to quit his job and sue for the salary then due. And ABC retained an option to stop then or go on from year to year thereafter. and inevitably the questions involving contract formality become pressing inquiries. C. • If the production proceeds as envisioned. • But at other times. Contract Formality and the Availability of Injunctive Relief 1. dreams die early. the deal sours. Thus. The New York Experience Case: Metro-Goldwyn-Mayer v. the actor (because he had better roles available) said that he did would not do it and that the agreement was unenforceable under the statute of frauds because it could not be performed within 1 year. ABC controlled the cutoff date and could have terminated the agreement at any option stage. a. as chosen by ABC and ordered by plaintiff.” as it turns out. he does not have the right to recover damages.com contract and recover the agreed compensation. less than a year from the first agreement. Scheider (New York 1976. formal written agreement. or better opportunities are seen elsewhere. the parties go to war. as the dates turned out. In those circumstances. The “deal. final. desire at times outraces common sense. whereby Metro would submit a pilot and ABC would decide whether to make it a film or a sitcom series. But in order to recover the agreed compensation he must be ready. Introduction • Parties rush to agree. and sue for his salary as it accrued. or of continuing in the employ of Warner Bros. is strictly verbal. When ABC decided to proceed. • The following two cases illustrate these problems when one party to a transaction must argue that a contract exists without the benefit of a signed written agreement.
2005. oral agreements are in play. • Class Notes: The next couple cases were decided when the $6. under 204(a) “a transfer of copyright is simply not valid without a writing. Lyrick and Big Idea’s relationship eventually became strained.000 plus statute). So now just pretend its $9. but. while sometimes called the copyright statute of frauds. D.com Case: Lyrick Studios v. None were ever signed or formally constituted a long term agreement. The statutes basically provide that in order to provide the basis for injunctive relief. show an agreement to transfer copyright. Rather than serving an evidentiary function and making otherwise valid agreements unenforceable. satisfying 204(a) with a purely internal memo that was never intended to be provided to Lyrick would not further the copyright goals of predictability of ownership. they sent contracts back and forth. They are called the “9.Downloaded From OutlineDepot. California Injunction Statutes 1. • It is important to note that the $9000 plus per year rule is not a mandatory condition placed on all employers.000. by their very language are negotiations. inclusion of that clause in all entertainment service contracts would have a significant economic effect on the entertainment industry and its constituent personnel. until 1994. 20 . Big Idea informed them they were going with a new distributor. and the Brockert case illustrates that the reference in 3423 to the stature of the artist are not mere boilerplate. at the rate of not less than $6000 per year). it if is not exclusive. It must. Notes: • 204 of the copyright act only applies to exclusive license agreements. Therefore. however. at least against challenges to the agreement by third parties. one sentence will do. • As for the internal memo. The Newton-John case illustrates the hazards of terms based on fixed time periods.” • The writing does not have contain any particular language. An afterthe-fact writing will also suffice. a contract must be in writing. • Here the parties dispute whether Big Idea and Lyrick have a writing that meets 204(a)’s requirement. In response lyric sued. ultimately. provide for services that are unique and extraordinary. Analysis: • A grant of an exclusive license is considered a “transfer of copyright ownership. is in fact different from a statute of frauds. page 120) Facts: Lyrick was distributing Big Idea’s cartoons.000 rule was in effect. When Lyrick was bought out by HIT entertainment.” Section 204(a) of the Copyright Act. Big Idea Productions (5th Cir. and provide for a minimum compensation (which. Over the years. Intro • Basically two sections of the California statutes cover this…California Civil Code 3423 and California Code of Civil Procedure 526. • The first two faxes.
000 dollars every twelve months. multiple companies have been in the bidding for his/her/their services) or the artist has a proven track record. page 133) Facts: Olivia Newton-John was enjoined from recording for anyone other than MCA while MCA’s action was pending or until April 1. page 134) Facts: Tina Marie. the company may encounter difficulties with the “status” branch of the statute. the star has to be unique. • Although the payments required in order to secure an injunction under the amended 3423 are considerably higher than those formerly required under the earlier version of the statute.e. • As the following case indicates. Her experience consisted of singing with local bands at weddings. That was wrong. but she also bore the producing costs). Rule(s) to Remember / Reasoning: • For the statute to be enforced. of star quality. if that date shall occur during the pendency of the action. Case: Motown Record v. and basically irreplaceable. In this manner. However. the issue of suspension (and the permissible length thereof) would no longer arise. Rule(s) to Remember / Reasoning: • Here. the employer must still demonstrate the requisite status. Brockert (Cal. because that would permit her to spend her way out of the deal (she was advanced several hundred thousand dollars. The court rejected Newton-John’s argument that she could not be enjoined from recording for third parties because MCA did not guarantee that she would net at least 6.Downloaded From OutlineDepot. 1979. and shopping centers and roles in school musicals. She had written some songs but non had been recorded or released commercially. Class Notes: • Because of this case. 21 . 1984.com Case: MCA v. parties. the court would not accept the injunctive period prescribed by the trial court. recording and music publishing companies changed their contract forms so that each period of the term would run for the longer of a stated time (usually 12 months) or until delivery of a specified number of records or compositions. The trial court had Newton-John enjoined past that point. unless the talent has been the subject of an “auction” (i. Newton-John (Cal. when entering into the agreement was unknown in the music business. 1982. You cannot take a preliminary injunction past the duration of the contract. the contract had a set duration of 5 years.
in which case one may turn to the Lanham Act or common law.Section 43(a) forbids the use of false designations of origin and false descriptions or representations in the advertising and sale of goods and services . it is one of the subjects often specifically covered by a K.P must show: (1) the inadequacy of his legal remedy. (4) contractual terms which are sufficiently definite to enable the court to know what it is to enforce. damage award for loss of publicity is contingent upon their being reasonably certain. Include explicit language indicating how your CL should be given credit for particular things. Remedies through Statute/Common Law: In the absence of K provisions.Downloaded From OutlineDepot.) However. an exception to this is where credits are not simply omitted but are affirmatively misrepresented. specific. a complaint must allege merchandising practices or conduct “in the nature of. A. Lanham Act: .but b/c public acclaim/potential professional reputation benefits (which wd be the economic loss resulting from loss of credit) is difficult to quantify in monetary terms. Inc. and one you should make sure terms that are favorable to your client exist in a K. and (5) substantial similarity of the requested performance to that promised in the K. Remedies for Breach of Contract’s Credit Provisions 1. or 22 . (3) the existence of a mutuality of remedies. (Tamarind Lithography Workshop v. News Corp (no clause mentions title page credit for author he is not awarded any. TALENT CONTRACTS. (2) an underlying K that is both reasonable and supported by adequate consideration. Sanders) 2. B.com IV. Esquire. a publisher is not obligated to give credit unless it says so in the K). in order to avoid a situation like Cleary v. and unspeculative (Tamarind Lithography Workshop v.To state a claim related to credit issues under this section. though. CREDIT ISSUES CLAIMING CREDIT The legal principles used to resolve disputes over credit issues are derived from two sources: contract and statutory/common law Because of the importance of credit. the general rule is that there is no statutory or common law right to claim credit (Vargas v. Sanders) Injunction/Specific Performance . 1. PART II I. Damages .
which would not amount to an attribution of authorship) Injunctions under the Lanham Act: to obtain injunctive relief under the act. in musical compositions (plaintiffs didn’t receive credit for their roles in writing of songs. An MFN clause provides that a particular aspect of a contractual relationship (e. a plaintiff need only establish a “likelihood of confusion or a tendency to mislead” (see Follett v. amount. incomplete credit designations or only partial identifications of those deserving credit qualifies as economic equivalent of passing off) o Follett v. Arbor House Publishing Co) DISCLAIMING CREDIT One also has a right to disclaim credit to a work that has been improperly attributed to you. They may be used for a variety of purposes.) will be computed or defined in at least as favorable a manner as that given for one or more third parties (although exceptions may still be made for stars or big players).g. King v. These can be particularly helpful to parties with little bargaining power confronted by lengthy standard terms (and also sometimes to the party granting the MFN clause b/c it eliminates some transaction costs from negotiations).Downloaded From OutlineDepot.com - - economically equivalent to. – e. Montoro What amounts to such a claim may be interpreted differently depending on industry customs of viewing when it is appropriate to credit o Smith v. palming off and/or misuse of trademarks and trade names. Montoro in motion pictures (substitution of another actor’s name in place of plaintiff’s in connection w/ movie’s advertising and credits constituted reverse passing-off) o Lamothe v. Innovation Books 2. Atlantic Recording Corp. 23 . entertainment law picked up on it. as well. for which the Lanham Act can also be used.” “palming/passing off” = selling goods/service of one’s own creation under the name or mark of another “reverse passing off” = removal of a name/trademark on another party’s product and replacing it w/ a diff name (both may be either express or implied) – see Smith v. Arbor House Publishing Co in publishing (substantial revisions may not necessarily amount to any more than what is customarily performed by freelance editors. It is easier to prohibit “possessory credit” than it is to prohibit “based upon” credit. MOST FAVORED NATION CLAUSES Although the concept originated in international treaties. though. but should be precisely written to be limited in scope. definition.g. etc.
network provides schedule of programs with national commercials and financial compensation for airtime utilized.e. Broadcast TV 1. Cable was created to boost reception in areas where broadcast tv signals were blocked or weakened. advertisement. CBS—owned by Viacom 4. TELEVISION Guest Lecturer: Michael Novak I. Viacom). 2. d. e. Fox—owned by NewsCorp B. Each division (i.com V.e. Subscribers were charged for the service. Major Network Organization: a. Each of the major film studios also produces tv shows. Major TV networks: 1.. Under network affiliation agreements with local stations. Used to be that municipalities granted monopoly of control over all their territory to single cable companies. Stats/Facts 1. NBC—owned by General Electric 3. which are often owned by their parent corporations. Tribune Corp. Most of the other local affiliate stations not owned by the major networks are owned by Station Groups (i. ABC—owned by Disney 2. b. Overview A. Most of the major networks are now affiliated with one or more cable networks. 24 . news. Could provide multiple network channels and non-network affiliated channels. Federal Communications Commission now limits reach of any single cable company to 30% of the market. entertainment) is operated as a separate company. 2.Downloaded From OutlineDepot.. Entertainment programming in LA office. the affiliate is allotted a portion of the commercial spots time to sell to local advertisers. C. which are also operated as separate companies. Hearst Corp. D. news and corporate in NY office. Each network also owns and operates affiliate stations. c. sports. Broadcast network share of audience has declined by more than 1/3 since the 70’s because of cable and streaming tv available for computers. Networks want to own stations in larger markets with larger audiences so they can command higher prices for selling spots to advertisers. Cable and Satellite TV 1.
II. They then bundle these (which are usually advertiser supported) together with broadcast channels into basic cable package. 3. Court of Appeals rejected this argument.e. 5. Creating and Acquiring Programming A. the network may then decide to order additional episodes—up to 22. 4. producer has right to license existing episode to 3rd parties. Courtroom Television Network v. First step is writing “treatment” for the series and the “treatment” for the first episode —the “pilot. An idea for a program is pitched by a producer to a studio or network or the network or studio may ask an established producer or writer to come up with a series. and public and public access channels. provides higher cost programming and isn’t advertiser supported. Network gets right to air each show twice: one original and one rerun.com 3. The network or studio or both reviews the treatment and if they approve they order a script of the pilot and maybe 2nd or 3rd episode. Writer’s Guild Basic Agreement—prescribes minimum payments for treatments. After 4th full year (assuming network exercised all its options). 4.S. with lump sum payment on delivery. and if the network approves. Pilot is created. holding that press and media possesses the same right of access to courtrooms as the public. B. Network’s rights limited to U. claiming it violated right of access to courtroom proceedings under NY State constitution and Federal Constitution. Networks refuse to make commitments on the basis of just ideas and pitches—they require completed treatment. but not more. MSOs are required to carry all the broadcast network. 2005): Court TV challenged NY statute barring cameras in courtrooms. Development Deal 25 . it will usually order between 7-13 episodes of the series. Adelphia). If network rejects pilot script. writer will receive ongoing royalties if series is produced. 5. 6. Under FCC rules. 2. Compensation for TV Writers 1. 4. subject to network’s right of first negotiation/right of first refusal. Dealmaking in the TV Industry 1. Most cable companies are multiply system operators (MSOs) which control several cable systems around the country (i. higher compensation negotiable by experienced and successful writer. usually upon repayment of development expenses. Many major studios also own pay cable networks. 7. producer has right to take the show elsewhere. Writer will receive partial payments at various stages of development process. After end of network’s exclusive term. like HBO. “Pay” cable. The network then usually has 3 annual renewal options of 22 episodes each. If writer is also creator of series.” 3. NY (New York. 2. scripts and pilots. Based on the performance of the first episodes.Downloaded From OutlineDepot. MSOs pay each cable network they carry a monthly fee of 5-40 cents per subscriber. which prevents the producer from moving the show to another network. writer will have a turnaround provision in the contract which will permit him to take series to another network for syndication. Comcast.
but syndicator gets right to specified number of minutes of commercial time. D. c. Studio gets first look at anything created under the agreement and if it approves. The amount the station pays depends on popularity of the show and size of the market.com a. Studios and networks look to make up their production deficits in the syndication market. production is usually dominated by major studios. c. Studio pays writer. Barter system: Licensee pays no case. 26 . the creator earns fees as an executive producer and collects royalties for all future broadcasts. production deficit is mitigated by co-production agreements between studios and networks or smaller production companies. 5.Downloaded From OutlineDepot. d. Funds spend on development are deducted from earnings of creations of writer or producer generated under agreement. 3. Many conglomerates that own studios and cable networks and affiliates try to keep their shows “in the family” by licensing their off-network shows to their own cable networks or to their owned and operated broadcast affiliates. b. 4. which the syndicator then turns around and sells to advertisers. Syndicators also sell to cable networks. b. producer or production company a minimum annual payment and provides offices. 2. Most syndication deals are now cash + barter system. Syndication = selling a program individually to affiliates in local markets or to a cable network. They make profits from syndication of the series. Nielsen Television Index is major ratings source used to measure broadcast network audiences. Deficit Funding a. C. Studio wants to decrease its costs and networks and smaller production companies want access to syndication profits. series. 2. TV series are licensed for $500K per episode for sitcom and $1-2 million for hour-long drama. it automatically gets the distribution and syndication rights to new series. Syndication 1. Most TV shows operate at a deficit. Rating of a program = percentage of total television households whose sets were tuned to that program. TV shows are produced for $1-2 million for 1 hr. so affiliates must look elsewhere for programming. 6. 6. studio facilities and a development fund. Advertisers buy spots based on number it takes to reach 1000 viewers. When series is put on a network.5 million for ½ hr. Networks make money from advertising sales. Series for syndication usually need to have 88 episodes. Since syndication success isn’t guaranteed. Producers recover cost of production from licensing to networks for initial run. Thus. Television’s success determined by ratings because advertisers determine where to buy commercial spots based on them. Ratings 1. series and $500K-1. Stems from fact that broadcast networks don’t provide programming for the entire day. Straight cash deal: syndicator licenses shows to each market for as much money as possible.
v. B. Ancillary markets include dvds.S. Local tv stations given choice between granting cable carriers free retransmission of programming on a must-carry basis or negotiating arm’s length retransmission agreement with cable system. Studios sell already produced shows to foreign networks and format rights—allows them to take same format of show and produce it in country’s own language demonstrating its own culture. Appeals are made to FCC Review Board. merchandise. then to 5 commissioners. limits number of stations one entity can own (up to 35% of total market). Wilson Industries v. III. FCC settles disputes between FCC and private parties through hearings conducted by administrative law judges pursuant to Administrative Procedure Act. 2. FCC involved in network affiliate relations (networks can’t force affiliates to take their programming and can’t control their advertising inventory).Downloaded From OutlineDepot. E. 3. IV. Holding: Tying agreements are illegal and violate Sherman Antitrust Act. limits broadcast hours of networks (prime-time access rule—limits network programming to 3 of 4 hours to encourage local programming). Licensing 1. 2. Loew’s (US Sup. The best shows are shown during sweeps. Ratings from sweeps (measurement of viewers in all 211 TV markets) used to set advertising rates for the next few months. 1962) Facts: Syndicator conditioned license or sale of one or more feature films to tv stations on station’s acceptance of a package or block (under “tying agreement”) containing one or more unwanted or inferior films. B. Antitrust: Geographical Restrictions Case: Ralph C.com 3. FCC also sets cable rates. International and Ancillary Markets 1. Controls broadcast and cable tv. soundtracks. Broadcast licenses must be renewed every 5 years. cable systems aren’t licensed but must register with FCC. then to US Court of Appeals and Supreme Court. Ct.” Case: U. 2. Antitrust: Block Booking—it is unlawful for networks to insist that local stations license an entire package of films in a “tying agreement. ABC (ND Cal. 1984) Facts: 27 . Control of Broadcast/Cable TV 1. Issues in TV Distribution A. Federal Communications Commission A. FCC can revoke licenses and impose fines.
2511(1)(a). imposes sanctions against anyone who. Dastar produced and was therefore the origin of the videos in question. 1 radio agreement) 1. without authorization. Lanham Act does not create perpetual copyright. as a joint civil-criminal provision of the Electronic Communications Privacy Act of 1986 (ECPA). intercepts encrypted satellite television broadcasts. so there is no Lanham Act violation. Most of these are just for 1 year. V.com Plaintiff. Robert F. Piracy: Unlawful Interception and Retransmission of Signals Case: DirecTV v. exclusivity promotes competition by maximizing tv program’s value and avoiding overexposure—allowing tv station to plan programming to compete with another station’s programming. • 28 . knowing that the other station won’t dilute value of its competitive programming by airing the same program at the same time. • Plaintiff wanted to bid for exclusive program license at lower rate than other stations in the geographic area in which it had been placed by defendant by being placed in a smaller geographic market. and they claimed Dastar’s actions constituted “reverse passing off” in violation of Section 43(a) of the Lanham Act—which creates a federal remedy against anyone who uses a false designation of origin in connection with any goods or services.C. but rather protects against misleading use of trademarks leading to unfair competition. 2005) Facts: DirecTV sued to deter illegal interception of its encrypted satellite broadcasts. • Original producer of series sued for copyright infringement since they held exclusive television rights in the book upon which the original series was based. 20th Century Fox (US Sup. Infringement: Unaccredited Copying of Uncopyrighted Works Case: Dastar v. claims that defendants have unreasonably restrained trade in violation of Sherman Antitrust Act by licensing programs on an exclusive basis (vertical contract). Ct. Holding: A private right of action exists for violations of 18 U. D. and by incorporating rights of first refusal into these licenses. Holding: Exclusive licensing practices not unreasonable because plaintiff’s ability to compete for quality programming not restrained.S. which. Private actors can bring piracy claims on ECPA grounds. a small tv station owner. 2003) Question: Does Section 43(a) of the Lanham Act prevents the unaccredited copying of a work? Facts: • Dastar purchased tv series from the public domain and modified them before selling as video tape without crediting original producer. Broadcast Employment Agreement (class notes based on handouts—1 tv agreement. C. Pepe (3rd Cir. Holding: “Origin of goods” in Lanham Act refers to the producer of tangible goods offered for sale and not to the author of any idea embodied in those goods. making the licenses unreasonably long.Downloaded From OutlineDepot.
Downloaded From OutlineDepot. 5. 10. CA doesn’t recognize non-competition covenant. employer relies on confidentiality provision. 9. TV agreement: match provision—before employee seeks employment elsewhere. So to get injunctive relief. 4. employer must give employee opportunity to cure breach 6. TV agreement: exclusive negotiation provision 8.com 2. he must first allow current employer to match second offer. Broadcast: “Pay or play” provision—company must either allow actor to work or pay him/her a fee upon dismissal. TV Broadcast agreement: Force Majeure provision—gives employer right to terminate contract under extreme and unanticipated circumstances 7. Everything is negotiable Radio Broadcast agreement doesn’t include bonus schedule Termination of employment = most carefully drafted/negotiated part of agreement Radio Broadcast agreement: missing “Cure” provision—before employer can invoke termination. 29 . 3.
But in 1950. Consolidation has also led to major labels affiliating with independent labels to nurture and develop new artists 2. Consolidation: 1962-1999 i. and cable b. Radioactive. including Polygram. Maverick. US record sales were $189M iii. Exponential growth 1950s to 1978 slowed in 1980s due to competition from video games. Mammoth and American 3. distributors physically ship them ii. Island. In 1980s.com VI. Distributors i. Mercury.Downloaded From OutlineDepot. Independents 1. Music Videos 30 . Vivendi (bought Universal. 81. 18. A&M Geffen and Interscope) ii. Growth was slowed by radio in 1920s and television in 1950s 1. Warner (Including Elektra and Atlantic) 2. distributors are independent companies and may distribute other major record labels iv.6% of albums are released by independents d. Labels record and promote records. The four companies control 90% of the physical product sales iii. Tommy Boy. History i. Sun Records. SOUND RECORDINGS I. Matador. Columbia Record Club gave an alternate mail-order means of distribution iii. EMI (Including Capitol and Virgin) 3. and Atlantic ii. Chess. Development of the Industry a. Examples of successful independents are Priority. video cassettes. 1962. Now four major companies 1. Many small independent labels due to rock and roll 1. But. LaFace. Each major label is affiliated with a major distribution company iii. Rock and Roll i. Sony/BMG (Sony and Epic) 4.4% of albums were released by the major labels iv. Interscope. independent labels left independent distributors in favor of major distributors e. the Beatles came to America and launched the modernday record business c. Victor Talking Machine Co and Columbia dominated the record industry at the turn of the century ii.
000-$500. and DVD concerts and documentaries have established new revenue streams ii. Until 1995.Downloaded From OutlineDepot. Background stats i. 2004: 681.951. Label will advance the costs of certain promotions. and other items in the agreement 1. and file sharing over peer-to-peer networks iii. recoupable 31 . Quick Economics i. Label has content or approval rights over recording budget and elements a. Neglible sales of cassettes. video. Costs of recording is very high 3. Law changes 1. Section 107 of the Copyright Act did not include a performance right in sound recordings 2. Now. 2005: 352. Break-even point for record co’s investment is high 2. Criminal courts for obscenity 3. illegal copying via rippers and burners. 2004-2005: 9. Numbers 1. Selection of studio.070 new releases by major labels.000 4. And. Civil suits for suicide victims f. Digital sampling in 1980s ii. average total sale was 18. Content of lyrics has created legal issues 1.437. These are to some negotiated extent. Job of identifying artists is done by artist and repertoire (A&R) representatives who look at the internet and local contacts ii. In general 1. Few albums make it 4. Potential legislation 2. non-predictable nature II.000 albums b. VH-1. and engineers iii. 2004-2005: 147. Contracts in the Record Industry a.000 b.2% decrease in albums sold a. 2004: 142.000 albums 3. financial support of the tour. MTV. 2005: 618. Most artists never make a second album 5. there is an exclusive right associated with interactive and subscription services that give the listener the ability to select or predict what would be broadcast 3.655. this is advanced to the artist as a fund.455 2. producer.3% increase in digital singles legally downloaded a. CD singles and vinyl b. Digital Technology: Creates challenges and new revenue i. Digital Millenium Copyright Act of 1998 provided a compulsory license for other digital broadcast services of a non-interactive. Out of 11.000. Illegal downloads. Legal download sales are a small but growing ii.com i.594. anything left over is an advance to the artist 1. Cost of an album is $100.
Artist a. so 14%=$1. Touring 4. May require that the artist provide notice that the option has not been exercised. Merchandise sales Recording Agreement Introduction i. What an artist will get and the label will give depends on 1. iv. will have a re-recording restriction: Restricts artist from recording the same song for a different label a. Now can be above 70 pages 3. b. but the artist will not have to pay the shortfall out of pocket – the risk of that happening is on the label vi. Publishing (song writing and licensing to third parties) 3. Length 1. Usually for the longer of two years following the end of the term or five years from the release of the recording iii. If it’s a band.com III. Pay or Play: Artist wants the initial number of albums to be firm.Downloaded From OutlineDepot. If through a loan out company. What leverage does the artist have a. Artist revenues come from 1. c. Initial period will commence immediately and continue until a specified amount of time following the delivery [usually 6 months] ii. Recordings are almost always exclusive 1. there will be “leaving member” clauses. If an artist is unusually successful. Artist may enter individually or through loan out company 1. which give the label the opportunity to renew if members leave Term i.40 per album sold v. Several offers? b. Independent labels are shorter – 15-40 ii. Used to be one page in 1920s 2. General rule of thumb is that one point equals 10 cents. Recording 2. Advances are recoupable. What does the artist ask for during the negotiation Parties and exclusivity i. so the label must record and release the albums or pay a liquidated amount Delivery i. d. A proven career 2. the company will re-negotiate many terms vii. Provides technical requirements for delivery 32 . Also. and time for the label to exercise it after receiving notice iv. Option periods commencing immediately after the preceding period and continuing until a specified amount of time following delivery [5-6 months] iii. the artist will guarantee personal services in an “inducement letter” ii. Except with a “sideman” on another artist’s recording 2.
Consents. What physical and digital form 2. Creative controls are important to artists ii. Ownership and total control of the sound recording copyright is the central asset of record companies 2. which are rarely sold 2. Composition (publishing) license is generally waived for videos Creative i. i. It may be difficult to find an unused band name 2. Production costs are generally advanced by label. producer. Artist’s lawyer would want to make sure publishing income is not cross-collateralized 1. Typical video royalty is 10% iii. worldwide ownership of recordings created 1. and times of recording will be set by the label iii. and artwork ii. Only income from recordings should recoup advances. For new artists. good faith opinion of the label 1. unless it’s an independent label of limited regional reach Video i. the studio. Artist may be able to restrict the territory 3. master. and 100% from sale of videos. good sound quality. material. Is required for payment of balance of initial advance to artist and producer Technically and Commercially Satisfactory i.com e. Only major artists can sometimes get this taken out of the contract Territory: Usually the world or the universe. g.Downloaded From OutlineDepot. Income from compositions should not be applied to recoup advances. Sometimes they are by mutual agreement Grant of Rights i. May have to be commercially satisfactory in the reasonable. Sales by the artist of CDs at live performances are a major source of income for a developing artist 33 . licenses and documentation for samples. approvals. Artist may have the right to approve all (or some) of the personal elements used for production 1. 1. Master must be technically satisfactory (no hisses. iii. Labels normally insist on perpetual. etc) ii. f. May mutually agree on the budget and director of a video ii. Label may have to agree with the artist to select an alternative name iv. Artists of unusual leverage may be able to get a reversion of copyright after an amount of time reasonable enough for the label to make its money back ii. but recoupable against video sales or record sales or both 1. h. Starts the time running on the many parts of the contract iii. Sometimes the label will agree to recoup up to 50% of the video production costs from the sale of records.
The label will generally control and own an official site for the term of the agreement k. Though if independent. For new artists. 4th album 400. 2nd album 200. iii. Status of existing recordings previously distributed 1. there may be a recoupable advance of 50-100% of such amount m. third party promoters are engaged. The label may want to buy the copyrights to all of them. some labels provide them free in lieu of money “tour support” v. not retirement money iv.000 c. The band’s old website may be continued with a link to the new one iii. 3rd album 300. 2. The fund for ensuing albums is determined to be an amount usually equal to 67% of the royalties. Typically the artist’s sole remedy if the label doesn’t release is to terminate the term of the agreement 1. Technically the artist is responsible for engaging a producer. The agreement will almost always provide for the recording a minimum number of masters. less recording costs attributable to the previous album 3. it will rarely guarantee release. The advance is opportunity money. Recording fund and advances i. From the artist’s perspective. 1. CDs may be provided at manufacturing and handling costs ($3) 2.com 1. or restrict their sale during promotion of new albums j. the amount is intended to provide enough income to pay the artist’s cost of living and general overhead for the time it takes to record an album iii. after retention of reserves (not to exceed 20%).000 v. but may refuse to release during the fourth quarter because of the holiday season iv. Release and Commerical Availability Commitment i.000 – 400. Sometimes the label will agree to sell back the masters l. Cost of promoting an artist is usually not charged as a recording cost or a recoupable costs 1. who is charged with engaging studios and engineers 34 . Recording funds are the most common way to budget albums ii.000 – 500. New artists may have previously self-released titles 2.000 – 250. And subject to minimums and maximums – in the example: a. The label will usually create a new “official” website for the band ii.000 b.Downloaded From OutlineDepot. an essential element of the contract is the label’s commitment to record and release a record ii. Per record costs i. Sometimes a label will agree to guarantee release within a certain number of months. Or. 1. Website i.
g.0001 and up will be paid 1% more 2. Foreign rates 1. and Audit Rights i. It must be liquidated eventually – usually a year is enough iii. the label has generally broken even. If a single is included on a compilation. Artist’s royalty typically begins at a rate of 14% (28% if on wholesale price) 1. Flat-Fee licensing 1. Artist will have the right to pay for an audit of the books iv.Downloaded From OutlineDepot. Those entitled to royalties (producers. Once an album sells this much. Statements. will include producer and mixer royalties ii.000.com ii. If the label licenses to someone else. off the top 2. Receipts and payments is customarily sixty days after each semi-annual period ii. Company may pay for that audit if it turns out that they seriously miscalculated p. Free goods or promotional items 4. Proration 1.000 will be paid . Reduction for special sales plans. Records sold as scrap 5. Royalties i. 25% container or packaging charge 3. top-level mixers) may receive a letter of direction which allows them to get their royalty directly rather than from the artist n. depending on country. Contract should specify the maximum amount [20-30%] 2. 1/16 if one track is theirs on a 16 track compilation) v. 5% more.001-1. Will be all-in. Reserves. 10% breakage fee. Reductions include 1. because of added expense of distributing to other countries iv. Recording itself (sound recording) 35 . Records sold below $5 6. and albums 1. Producer submits an invoice for services of technical parties to the label administrator iii. the royalty may be 50% vi. and this represents sharing of those profits with the artist o. Label will probably maintain reasonable reserves of royalty payments to recognize that there are records sold that may be returned 1. May be reduced by a percentage.000. that is. record clubs. the artist only receives the prorated royalty (e. other promotions iii. There are two different properties in sound recordings 1. Controlled Compositions i. May provide that albums 500. Escalation 1.
000 Promotional CDs are not included in royalty calculations =411. The song (musical composition) a.666 X90% Breakage fee There still persists a 10% “breakage” fee though few. Company is essentially getting a 25% share in the artist’s mechanical royalty 3.com a. Mechanical royalties are paid for this ii. Warranties. Representations i.000 X10/12 CDs shipped CDs given free to DJs Shipped. Maximum percentage of free albums can be negotiated A gold record is 500. whichever is longer r. Attorney should try to make sure this applies only to recordings that were written by the artist (controlled recordings) q.000 -6. 2 free with every 10 To determine number sold CDs given away for free are not included in royalty calculations. The company doesn’t want the artist making money off of artwork in merchandising they don’t participate in iii. or five years after the release. Will also include a “re-recording restriction” 1. Company will also try to cap the number of masters it pays mechanical royalties for (10-12) 2. Logos/Artwork i. if 36 . Company will try to limit the amount it pays for mechanical royalties to an amount less than the statutory rate (typically 75%) 1. Merchandise deals should also not be cross-collateralized IV. Recording royalties are paid for this 2. Artist should not re-record the songs within a certain period a. that no materials or use will violate the law or infringe on third party rights ii. Artist will make warranties about ability to contract. Logos and artwork created by the label will be owned by the label unless the artist pays for them ii.000 494. Usually 2 years after the end of the term. Hypothetical Contract – How a Gold Record Can Lose Money Albums on which hypothetical Gold Record will earn royalties 500.Downloaded From OutlineDepot.
com any CDs break as did old-timey records =370. and may be more on the 500.091 X12 =$1.092 X500.677 =$621.001 and subsequent albums if there is an escalator clause May not be calculated for digital downloads CDs on which royalties are payable $1.328 Royalty per CD sold Gross CD royalties Mechanical License fees Total mechanical license fees paid by label to third-party songwriters on all songs $.Downloaded From OutlineDepot.500 Gross Royalties $15.98 X14% Suggested retail price Packaging deduction of 25% On which royalties are payable Royalty rate for CDs May be more for later CDs.000 License fee per song Songs on this hypothetical gold record Mechanical license fees per CD CDs shipped This is the statutory minimum for composition royalties 37 .00 =11.98 -$4.
000 CDs shipped =$341.Downloaded From OutlineDepot.000 Total CD mechanical license fees Mechanical license fees that the label was responsible for under the hypothetical gold record agreement $.250 =$204.98 -$4.com $546.250 What the label will pay for Mechanical license fees that the artist is therefore responsible for $546.00 Suggested retail price Packaging deduction of May not be calculated 38 .000 -$341.750 Total mechanical license fees What the label will pay for Mechanical license fees the artist is responsible for Producer’s royalties $15.6825 X500.091 X75% The statutory minimum The typical percentage that labels try to reduce their payment of mechanical licenses to Agreements may also cap the maximum number of songs the label will pay mechanical licenses for – the artist is responsible for royalties on songs above the cap X10 songs cap =$.
000 -$75.000 -$204.157 Additional amount payable to producer on account of record sales Royalties Payable $621.Downloaded From OutlineDepot. this number represents 25% of CDs shipped -$110.com 25% =11.157 -$30. which is recoupable =$103.98 X3% On which royalties are payable Royalty rate for producer Royalty per CD sold Gross Producer royalties Advance already paid by the company for digital downloads Comes out of the artist’s royalties because they are “all-in” $.000 Producer will have already received an advance.157 =(-$36.750 -$103.3594 =$133.000 -$30.000 Gross royalties Reserves against possible returns Recording Costs Producer advance Artist advance Video production costs This represents 100% recoupable costs for creating a video Typically 20-30%.579) Excess mechanicals Royalties to producer Still substantially “unrecouped” 39 .328 -$125.000 -$10.
000 X100/115 =429.Only deduct 50% of video expenses.000 494.382 Suggested retail price Packaging deduction of 25% On which royalties are payable Royalty rate for CDs Royalty per CD sold Gross CD royalties CDs shipped CDs given free to DJs Shipped.98 X14% $1. not just on albums sold o 75% rate limitation only to apply to “controlled compositions” – songs the artist wrote herself o No cap on number of songs.Downloaded From OutlineDepot.98 -$4.000 -6.Excess mechanicals altered o Label to pay mechanicals on all albums distributed.Reduces the number of free albums from “2 on 10” to “15 on 100” .00 =11.566 $15.com Deductions totaled $657.907 Now imagine that just a few changes are made to the contract Somehow gets the label to agree not to charge a breakage fee .677 =$720. label pays mechanicals on all 12 songs Gross Royalties 500. not 100% . 15 free with every 100 To determine number sold Producer’s royalties 40 .
500 0 -$124. the artist can make money where otherwise her expenses may have remained substantially unrecouped.566 $.000 -$30. VII.000 -$110.Downloaded From OutlineDepot.382 -$125.com 429.496 Gross royalties Reserves against possible returns Recording Costs Producer advance Artist advance Video production costs Excess mechanicals Royalties to producer Royalties payable to artist So.386 CDs sold Royalty per CD sold Gross Producer royalties Advance already paid Additional amount payable to producer on account of sales Royalties Payable $720.000 -$37. just from a few changes to a few deal points. 41 .386 -$30.000 -$10.000 =$124.3594 =$154.386 =$286. MUSIC PUBLISHING Overview of the Industry • Publishing rights are the rights in the underlying composition as opposed to specific recordings of the composition.
etc. Timbaland. protecting/enforcing copyrights. Dr. Warner. etc. merely rights for a term of years. Will not license socalled “local cover recordings” (recording of song produced and recorded in local territory by artist other than original artist) without approval.using songs on records o Royalties from printed editions o Fees from movies. Publisher does not undertake any affirmative obligation to exploits songs.Downloaded From OutlineDepot. Songwriters are an increasingly important part of the industry (e. seeking potential licensees for songs. Sony-ATV Music. streaming radio. tethered downloads (e. and collecting and disbursing the resulting income Labels and publishers fight over who has the licenses and who gets the royalties for ring tones. listen and purchase music have necessitated business and legal changes in the industry. Dre. 42 .S. The “song” as a unit is at the heart of the music publishing industry Music publishers – functions include working on creative level with songwriters in composing of new songs. and royalties from ring tones. So many new sources of song publishing income: ring tones.streaming radio. o Foreign sub-publishing agreement – Similar to administration agreements and impose additional artistic and economic controls on subpubs. Pandora). o A single LP can have songs owned by 10 different parties.000 publishers. Like a “performing rights collecting society” of sorts. Music publishing revenues exceed $6B in 2004. Harry Fox Agency – U. licensing and collection.. Universal Music Publishing. jukeboxes o Mechanical royalties .com • • • • • • • • • • • New ways to use. Songwriters who are artists recording their material and who want a publishing deal with an advance can usually negotiate the retention of a portion of the copyrights in their songs. Just handles paperwork of registration. Types of Publishing Agreements: o Songwriter agreement – writer receives certain amount of royalties and transfers 100% of copyright to publisher. organization that represents music publishers for mechanical licensing. and publisher received an “administration fee” (usually 15-20%). the five largest music publishing companies controlled nearly 2/3 of market share and revenues: o EMI Music Publishing. o Administration agreement – publisher gets no ownership right songwriter retains 100% copyright. TV. pay-per-listen.. o Collection agreement – publisher acquires no ownership.g. Reps over 28. subscription services. and other digital forms. Rights expire after a stated period. Co-publishing agreements – provide for co-ownership of specified songs by two or more parties. streaming audio. and soundtracks. and BMG Music Publishing. digital jukeboxes. Neptuned) In 2006. Main Sources of Publishing Revenue: o Small performing rights .g. publisher undertakes same functions as under copublishing or participation agreement. entering into licensing arrangements for such uses.
publisher of out originating publisher’s percentage of income. Purchase price based on “net publisher’s share” (publisher’s share of income over a period of years) Deal Basics: o Publishers will always try to acquire copyright for the life of the copyright.Downloaded From OutlineDepot.S. Obligations of Publishers • Without any special provisions. • Obligation to exploit is not open-ended.fees of foreign subpublishers absorbed by originating U.) o Foreign deals – domestic publishers work through societies abroad who deduct their fees and pass along money to domestic publishers. setting up of song files. o Bankrupt publisher tried to sell rights to compositions free of royalty claims. o Administration rights are almost always exclusive to the publishers though artists/writers can sometimes “prior approval” provisions in there. (2nd Cir. See sample co-publishing agreement on pages 648 – 650. Lady Duff Gordon and Zilg v. o Territory will often be a sticking point in these deals. and accounting and payment for royalties if compositions are exploited. 43 . Nolan case. publisher does not guarantee any particular level of success and is not really obligated to do anything except customary housekeeping details (registration of copyright. performance income. Required efforts are reduced when there are advances paid. print music income. but songwriters will often want a right to the reversion at earlier dates. Prentice-Hall cases. courts usually read in an implied promise to use reasonable efforts to market and place the products.). publisher deducts its publisher/administrator/collection percentage and pays over remainder to songwriter (or co-publisher or participant). • Publishers may not sell rights in a way that diminishes songwriters contractual expectancy (barring special provisions allowing that). Cases: • In re Waterson. etc. o Some songwriters put provisions in agreement which revert the copyright to the songwriter if not exploited within a certain amount of years. o 75/25 split – songwriter gets 50% songwriter share.com • • o Catalog purchase agreement – owner of composition (or catalog) sells copyrights in a transaction known as a “catalog purchase. Two types: • Receipts deals – U. Berlin & Snyder Co.” Can include a percentage of one song or rights in a million compositions. o Receipt deals better for songwriters. o However.S. and then 50% of royalties that he splits with publishers (mechanical royalties. See Wood v. etc. 1931) – o Bankruptcy case back in the day when sheet music and son plugging were the primary exploitation vehicles. • Source deals .
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o Songwriter sued claiming that they had no right to sell copyrights at all, much less free and clear of royalty provisions. o Court holds that bankrupt publisher can sell the compositions but must do so subject to the license/royalty terms negotiated with songwriter. Harris v. Evans (9th Cir. 1984) – o Distinguishes Waterson case and holds that a mere license is not transferable in bankruptcy. Evans v. Famous Music Corp. (N.Y. App. 2003) – o Songwriters signed a receipts deal with publishers for composition exploitation throughout world. o Publishers deducted certain foreign taxes from $ they received from foreign subpublishers before cutting songwriters their 50%. o Publishers then got foreign tax credits for 50% paid to songwriters. o Songwriters sue arguing that publisher must share gain of foreign tax credit with them. o Court refuses to read such an obligation into the K; says the K is unambiguous as to what type of royalties songwriters are entitled to, and that foreign tax credits were not envisioned by the parties to the K.
Performing Rights: • The performing rights area represents for most songwriters, film and TV composers and music publishers their greatest source of continuing royalty income. o Each year, writers and publishers receive more than $4 billion in royalties from this right of copyright. • The performing right is a right of copyright that applies to the payment of license fees by music users when those users perform the copyrighted musical compositions of writers and publishers. o This right recognizes that a writer’s creation is a property right and its use requires permission as well as compensation. o Examples of performances include: songs heard on the radio or jukebox, underscore in a TV series, music performed live or on tape at a show, amusement park, sporting event, concert venue, or symphonic concert hall. o Music users (those that pay license fees) include major TV networks, local TV and radio stations, cable services, concert halls, web sites, hotels, colleges, nightclubs, restaurants, etc. o The Copyright Act covers the non-dramatic performance of copyrighted musical works (which is basically everything besides dramatic rights) • In the US three organizations negotiate license fee agreements with the users of music and distribute those fees back to the writers and publishers whose music and lyrics are being performed. They are: ASCAP, BMI, and SESAC. o Members of this society are songwriters and publishers. The organizations pay 50% to the songwriter, and 50% to the publisher directly, cutting out the record company as a middleman. If there is a co-publishing deal in place, then the split is 75% and 25% respectively.
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Types of License Agreements: • Blanket License: The most common type of license agreement. It allows a user to perform any works in the ASCAP or BMI repertory during the term of the license for a specific negotiated fee. These are negotiated agreements in which the license fee paid by the user can be a flat dollar fee, a per subscriber or gross revenue fee, a fee based on net receipts from sponsors, or based on other objective factors such as seating capacity of a venue. Such agreements have a maximum term of five years. • Per Program License: An agreement where a station pays a license fee only for each for program using ASCAP or BMI music that is not otherwise licensed directly or at the source. • Other forms of license involve the writer and publisher making an agreement directly with a user or directly with a program producer. Such forms of license are permitted under ASCAP and BMI agreements which are non-exclusive and enable a writer to license his or her works directly. o A license directly between writers/publishers and program producers is known as a Sync License. This is when the underlying composition is synchronized with the film or TV production. With this license, money goes directly from the TV/movie/commercial production company to the publisher. • The Sync License is not automatic, as is the granting of the license under the Blanket or Per Program license. It has to be agreed to by the Publisher and sometimes the writer. The charge for the license is negotiable. Blanket License – Case • Buffalo Broadcasting Co. v. ASCAP (2d Cir. 1984) o Hundreds of local TV stations sued ASCAP, claiming its blanket licenses were an unreasonable restraint of trade in violation of Section 1 of the Sherman Antitrust Act. o “Trade is restrained, sometimes unreasonably, when rights to use individual copyrights or patents may be obtained only by payment for a pool of such rights, but that opportunity to acquire a pool of rights does not restrain trade if an alternative opportunity to acquire individual rights is realistically available and a plaintiff will not be held to have an alternative “available” simply because some imaginable possibility exists.” o The court finds Per Program licensing, source licensing, and direct licensing to all be viable alternatives to Blanket Licenses. Thus, Blanket Licenses are not an unreasonable restraint of trade. Split Licensing – Case: • In business such as cable TV, in which programming passes through more than one conduit, ASCAP and BMI have tried repeatedly and unsuccessfully to collect license fees at each stage. • U.S. v. ASCAP, In re Fox Broadcasting Co. (SDNY 1995) o Then fledgling Fox Network distributed programming via satellite to 143 local stations. Prior to 1991, ASCAP licensed the programming at the local station level. In 1991, ASCAP demanded that Fox Network obtain a license itself for the transmission of its programs to its network stations. 45
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o “It has long been recognized that ASCAP may not “split” rights in order to collect more than one license fee for any one use of the music in its repertory.” o ASCAP may not split licensing. It can only collect license fees from Fox Network at the local station level or at the network level, not both. Sampling: • Many recordings embody digital samples of other recordings that require licenses from both the owner of the sound recording that is being utilized and the owner of the musical composition. It is important for these two licenses to be obtained before the release of the use of the song, or the results can be disastrous. • Grand Upright Music, Ltd. v. Warner Bros. Records, Inc. (SDNY 1991) o Defendant, Biz Markie, made unlicensed use of a copyrighted composition written and performed by the plaintiffs. o The court approved a preliminary injunction against Biz Markie and referred the matter to the U.S. Attorney for consideration of prosecution under certain criminal statutes. o The court suggests that such unlicensed use can lead to both civil and criminal penalties. • Newton v. Diamond (9th Cir. 2003) o Defendants, The Beastie Boys, sampled a 6-second long, 3-note segment of a copyrighted recording for one of their songs. In doing so, they obtained a license to sample the sound recording of the copyrighted composition, but did not obtain the license to the underlying copyrighted composition itself. o “We hold today that Beastie Boys’ use of a brief segment of that composition…is not sufficient to sustain a claim of copyright infringement. We affirm the…grant of summary judgment on the ground that Beastie Boy’s use of the composition was de minimis and therefore not actionable.” o The requirement that obtaining the license to the underlying composition when sampling is subject to a de minimis exception. o Note: the dissent argued that summary judgment was inappropriate in this case because a jury could have found that the Beastie Boys’ use of the sampled material was not de minimis. • Bridgeport Music v. Dimension Films (6th Cir. 2004) o Relevant Facts: Defendant, No Limit Films, sampled a 2-second 3-note segment of a composition in the sound track to one of its films. The plaintiff held the copyright for the sound recording of the composition, and the defendants did not obtain the license to sample this recording. o When sampling a copyrighted song, is there a de minimis exception to the requirement of obtaining the license to the sound recording of the composition? (recall there is such an exception for the license to the underlying composition) o “Sound recording copyright holders [have] the exclusive right ‘to duplicate the sound recording in the form of copies that directly or indirectly recapture the actual sounds fixed in the recording.’”
FILM 47 . requires a license. VIII. Any use of a sound recording.Downloaded From OutlineDepot.com o There is no de minimis exception for the requirement of a license to the sound recording when sampling. no matter how short in length or how much it has been altered.
where bank provided $200M to finance 2/3 of production costs. Paramount and Disney). other for rest of world with revenues apportioned according to prearranged formula. distributing studio took 15% fee off top. Producer wants broadest possible grant of rights. Producing Films o 1920s-WWII.com • • “The Changing Scene” o Rate of return for studios from theatrical distribution is low (5%). want series of options where 48 . book. Other business models include long-term Ks with major studios for talent.. also wants to acquire all rights in characters embodied in property to do remakes. o US industry dominated by six major studios that finance. or even just idea. most major studio films make money unlike in music business where 1 out of 20 actually make money for major label. o Studios determined to cut costs by: 1) paying talent less $. screenplay or treatment for screenplay.all out of pocket costs that go into finishing movie. book. Co-financing arrangements: studios contribute production monies in agreed shares. someone's life story. most profits come from home video and TV distribution. $100M. Sony. Typically. spin-offs and exploit all those derivative works in all present and future formats. Usually rights obtained through option or purchase agreement. studio system came apart after WWII as a result of TV and antirust litigation. o Primary business models today: Negotiation on film-by-film basis: studio still primary source of financing but no longer have power to assign talent to be in specific productions. produce and distribute films (Universal. o Most big-time production companies also owned by major studios o Difficult for indie film companies to survive over long term without agreement with major studio because not diversified conglomerates and majors enjoy regular revenue stream from exploitation of their substantial movie libraries. small independent production company. studios controlled nearly every aspect of financing. however. actors worked exclusively for one studio under long-term Ks. Most profits from film coming from TV and home video rights. 20th Century Fox. production and distribution. normally production company will go to author or vice versa and say don't know if can get film made. 3) eliminating perks. and Chase recouped investment from remainder). o Studio Model Prospective producer of film begins by acquiring rights to existing play. sequels. Off-balance sheet financing: interests in slates of films syndicated to outside investors (ex: Castle Rock’s eight-picture deal with Chase. Negative costs . If add up all actual costs of getting movie into theater and getting people into theater. not from being in theater. with one acquiring rights for US/Canada. treatment.Downloaded From OutlineDepot. production company ends up owning rights (individual with own company. including right to distribute film in all formats presently known and that may be invented. Warner Bros. or one tied in w/ major studio). 2) greater readiness to drop/cancel productions with potential runaway budgets. Usually need rights to screenplay.
No extensions in this agreement. pay to extend. gets separate rights and first-run royalty with reductions to occur under certain conditions (ex: HBO v.com have exclusive right to make movie if pay "x" dollars. p. also simultaneously executed short form option (see below). if producer makes prequel. • Credit – entitled to receive separate rights if producer makes movie based upon the work and gets credit as determined by producer and in accordance with WGA Basic Agreement.e. with reductions of 50% for generic spinoff and 75% for planted spinoff (definitions in K). Basic Terms and Conditions: Option—Screenplay. option anywhere from $0 to something for beginning.gets early copy of film and premiere tickets • Future productions. Not entitled to receive add’l amounts. if producer makes spin-off. Sometimes option agreement will include writing agreement. • Contingent payments – gets $ for exercise of option. 5) if additional writing services to be rendered. reserved and reversion of rights. deemed series in accordance with last schedule. six months. one year period. Standard Terms and Conditions: Option—Screenplay. grant period extended automatically for period of time equal to period of time that development and/or production hampered or delayed or 49 . • Reversion – right in accordance with WGA Basic Agreement. 4) purchase price for rights. p. rights of first negotiation. restrictions on sequels – if makes sequel or remake within 7 years after initial general commercial theatrical release of film. if producer makes TV show under specific conditions. maybe polish to go into production. free TV). 6) rights granted. “floors” and “ceilings”. with amounts depending on length of episodes according to schedule. 3) “set up bonuses” if any. i.Downloaded From OutlineDepot. If don't sell in initial period. holdbacks. seller gets first opportunity to negotiate right to provide writing services on first future production subject to procedures. if screenwriter sold option to production company and can write. then seller gets separated rights in the work and % of original amount paid. can arise no later than 5 years after date producer exercises option • Misc . if makes sequel or remake which is movie of the week or mini-series on TV. and if based on % of budget. sequel or remake based upon this movie. 7) with respect to rights reserved. and matching rights. gets separate rights of $/hour of run time and reduced if not on free TV during prime time. Terms of literary option/purchase agreement: 1) length of initial option period and any extensions. shorter period. Stronger the material. second rewrite. 2) price of option periods and any extensions and whether those payments are applicable against the purchase price. Can exercise option by paying. what writing steps will be commissioned and for what fees. production company would also want option for you to do rewrite based on comments. 746 • Term – option granted for six months. 751 • Length – see above • Extension – force majuere or if seller breaches reps or warranties. 8) credit.
etc. permission to use song in movie.com time during which any claim is outstanding or unresolved. Short-Form Option. latter has creative control. going to want rights ahead of time. limited to damages and can’t terminate or rescind agreement or enjoin or restrain distribution of film • Assignment – producer can assign and remains liable unless assigned to specific parties (merger. Usually in agreement with writer b/w producer. writer has right to find studio and get that second one to pay back first for film.Downloaded From OutlineDepot. seller must negotiate with producer for 60 days in good faith and if can’t reach agreement. subject to ©. If production company goes to studio. that work is fiction and hasn’t been published anywhere else before. • Producer’s control – producer has right to make any changes in work in preparation and exploitation of any productions based upon work and seller has no right of approval or consultation regarding any such changes or with respect to any element. • Credit – producer’s sole determination in accordance with conditions above. sometimes its work for hire when hiring composer and production company owns music or sometimes using already existing music where have to get 1) master use license for whoever owns master. • Indemnity – seller indemnifies producer against any claims and expenses arising from seller’s breach of rep or warranty while producer indemnifies seller from any material added and not provided by seller in connection with film. • Reps and warranties of seller. but not more than 6 months in either case. get rights back and sell them to second production company. studio must enter into Master Use License with record company that owns underlying rights to recording and Film Synchronization and Performance License with music publisher who owns underlying rights to musical composition embodied on recording. new LLC. latter will have those rights. Turnaround rights: if company doesn't find someone to buy film. including right to enter into agreement. producer has matching rights. • Right of first negotiation/matching last refusal – if seller finds another buyer during option period. 50 . seller waives any droit morale rights. 757 • Grants producer exclusive and irrevocable option to acquire forever all rights in the work. Part of terms above. Often assignments rights when writer sells to production company rights to screen play or book. When getting rights to music. production company has right to assign K to someone else b/c want to make sure can assign it to big studio. If music to be part of film. major studio). • Seller’s remedies – can’t get injunction. etc. • Ex: song goes with title that you really want to have. p.
Master Use License. and otherwise use and exploit all versions and copies of film. have to make sure if using other already existing music that you have 2 agreements. get 25% of those three points for producer when calculating royalties. publicly perform. producer. 760 • Licensor grants licensee irrevocable rights throughout territory to: 1) record composition in synch or timed relation with film and copies of it. Music. agreement with owner of both master recording and owner of publishing rights. no injunctions If giving rights to use song in a film. including: 1) right to re-record. • Remedies for licensor limited to damages. although for publishing. • Licensee won’t authorize performance of composition in film in US by means of TV unless broadcaster or exhibitor has valid small 51 . 2) right to utilize composition subject to mechanical licenses in soundtrack albums and other soundtrack recordings. 758 • For fee. Licensor responsible for paying all recorded royalties (other than mechanical royalties) payable to artist. make copies of film with recording contained in it and exploit such copies. 4) nonexclusive right in each country of territory to include recording on soundtrack album. licensee will pay licensor basic royalty based on retail selling price (%) and if licensee accounted to by record distributor based on wholesale price then different %. etc. reproduce and perform excerpts from recording in synch or timed relation with film. underlying composition or publishing rights and need right from publisher to synch that underlying song with movie. p. they’ll usually want right to utilize recording on excerpts in or out of context in which contained in film in any media. • If any record company receives screen credit with respect to preexisting master recording used in connection with film. Film Synchronization and Performance License. • Can’t use recording in conjunction or as title and/or screen credits or as theme song w/o licensor’s prior written consent.e. i. 2) distribute. depending on both parties preferences. 3) utilize recordings on excerpts in and out of context used in film in any media. 3) right to distribute. and 4) right to utilize composition or excerpts out of context in which composition recorded in film in any media to promote or advertise. it's going to be compulsory license possibly where they have to give it to you. p. Can’t make singles of recording. licensor grants licensee non-exclusive and irrevocable rights throughout territory. publicly perform. 3 out of 12 tracks. exploit and otherwise use all versions of film with recording. Agreement for distribution of soundtrack. licensee obligated its distributor to accord licensor screen credit on negative and positive prints of film in same manner as other record companies. and if used on album.Downloaded From OutlineDepot. same concept for film soundtrack. Negotiable. get prorated amount depending how many songs on soundtrack. Can make it prorated to # of tracks in film for money get from soundtrack.com 2) synch license.
and going to guarantee for a fee you can finish this film within that budget (see below). etc. o Production/Financing/Distribution Deal (“PF&D” deal) Once get necessary rights. going to negotiate each 52 . including things like pay TV. inserting soundtrack.com performing rights license for composition from performing rights society or from licensor. producer and executive producer. established when script finished. studio begins its distribution work. licensor wants similar one. insurance policy that says we've checked out your budget. All rights in film and underlying property belong to studio. at least main actors. • Often started before buy rights but while under option to buy rights. etc. Important decisions subject to complete discretion and control of studio. Below the line is cinematographer. to produce the film. and foreign rights. Most producers overload initial budget because studios always reject first draft. they want to share in those profits. forcing studio to choose to proceed further with development or abandon project. Need to: get financing. etc.Downloaded From OutlineDepot. Create production schedule. finish up. integral parts of film. post-production. editing. Principal photography: period during which film shot Post-production: once film “in the can. “pay or play” status whereby studio has to pay off producer whether or not film is actually made. Key step here is budget.” producer etc.e. • Above the line/below the line personnel—above the line most important. syndicated TV. writer. obtain a completion bond—once at point actually going for financing. Get insurance. Create budget. special effects person. need this. we know what this business is about. home video. free TV. ones typically asking for some type of contingent payment where if film makes money. director. Producer usually entitled to 50% of some contractually determined net. your credentials. • If any music publisher receives screen credit with respect to musical composition utilized in film. Non-theatrical K. recruitment of director and lead actors and. makeup artist. • Licensor’s remedies limited to damages and no injunctions. if independent filmmaker. includes pre-production. secure locations. if studio decides to go forward. i. Once budget set. integral to making movie but not as much as producer. usually letting producer repurchase it. Studio agrees to put up funds for development. producer can move ahead to get PF&D deal from studio whereby studio engages producer to oversee development of script. wardrobe. special effects. Distribution—agreement for distribution to theaters. director. May not actually sign director or performer to K where bound to pay them but might have option or understanding with them that if film made. Pre-Production: producer wants “progress to production” schedule in PF&D. principal photo. they'll work on it or be in it. In each area. then finance production and then in its discretion to distribute film. performers. clearance for products.
3) set up bonuses." very specific. 5) remedies. and whether these payments are applicable against option price. etc. 7) credit. General rule of thumb is to acquire as many rights as you can from all living person to be depicted even if you’re individually comfortable with your legal position. 3) payments for each writing step and guarantees. 4) purchase price for rights. o Writers. of certain steps. and if based on % of budget. 2) representations and warranties. • Basic terms: 1) writing services to be performed. • Basic Terms and Conditions: Screenplay Agreement. but different considerations. Directors and Performers Agreements Main issues: money. 7) insurance. Basic terms: 1) length of initial option period and any extensions. if any. 7) use of copyrighted works created by subject. "writing and reading periods. 6) control over screenplay and degree of fictionalization permissible. 6) passive royalties. • Need to know whether writer is member of Writer’s Guild of America because they’re prohibited from entering into deals with production entities that aren’t signatories to its basic agreement.Downloaded From OutlineDepot. 3) indemnities. 2) price for option periods and any extensions. if any. 8) immigration and naturalization. Life Story Rights Agreements • Producer must resolve what rights are required to be obtained in bringing factual story to screen. • These rights often obtained through option purchase agreement. i. right to pull it. floors and ceilings. 5) rights granted (scope of release. 6) suspensions and terminations. commercial tie in rights. 9) publicity • Sometimes separate from option agreement b/c person who sells rights to book or screenplay isn't necessarily same person who ends up writing screenplay for movie. Screenwriter Agreement • Key issues: 1) grant of rights. 765 o Services – producer engages artist to write screenplay consisting of first draft and at producer’s election. and sometimes one company better than other and can get advances.e. product placements. credit and creative involvement Writer Agreement • Producer is hiring writer to render writing services on a work-for-hire basis. specific periods in person’s life or specific events that occurred to particular person). important for finishing movie. 5) first opportunity to write on subsequent productions based on source material.com separately w/ different companies in different territories around world b/c each important for sales. 4) sole and shared screenplay credit bonuses. This agreement talks about writer. See also merch rights. so producer will own all results and proceeds of writer’s services. 2) writing/reading periods. 4) producer’s control. p. if any. rewrite and 53 .
Also rights to his name and likeness.% of budgeted cost of film provided all amounts paid no less than and no greater than __ and amount equal to % of producer’s share of net profits. which author has 4 weeks to complete). o Compensation . Same with rights in any derivative works. o Credit – if producer makes movie based on work. 50/50 before/after delivery. $1. 50% upon delivery of first draft. Standard Terms and Conditions: Screenplay Agreement. 767 o Together with basic terms above constitute agreement o Writer required to perform to best of his ability and on exclusive basis during all writing periods and on non-exclusive first-priority basis at all other times. employee-for-hire and commissioned for © purposes (or assigned if not).5k for polish. and writer gets credit. producer indemnifies artist for any material he adds. artist has right to enter into agreement. gets 50% of amount paid under first part plus net profits at 50% as above and if gets shared credits. If producer makes sequel. royalties reduced by 50% and specific fees for length of episodes of 20% royalties for reruns. 50% reduction and $10k for each hour of running time but not more than $80k. o Producer has all rights in artist’s work. if producer makes movie and artist gets sole “written by” or “Screenplay by” credit.com • polish in accordance with delivery schedule (complete first draft within 3 months. same formula as for sequel. such amounts. 50% upon commencement of services. o Indemnities – artist indemnifies producer for any breach of rep or warranty. If movie of the week or mini-series. 33%. material clear of problems. producer has another 8 weeks to read and then has right to require artist to write polish. If makes live action episodic TV series and same standards as above.$15k. 50/50. reduced by 50%. o Credit – determined by producer at his sole discretion o Producer’s control – same as in option agreement above.Downloaded From OutlineDepot. If doesn’t get credit.5k for rewrite. p. o Artist’s remedies – damages only 54 . including min and max. o Contingent payments . etc. producer has 8 weeks to read it and then can require writer to rewrite which needs to be delivered within 6 weeks and following delivery of that. if any. not entitled to any compensation. writer gets credit on screen and in paid advertising to extent mutually agreed by parties in good faith. If producer makes remake. reduced 50% . commencing at point at which producer is first paid its share of net profits. o Reps and warranties – artist will write screenplay by himself and not taken from any other material.$7.
etc. in accordance with producer’s requests.e. etc. if this is huge director who is always successful and who everyone thinks has best creative sense for this film.Downloaded From OutlineDepot.see writer’s agreement o Compliance with guarantor-s instructions – director has to act in accordance with any completion guarantee agreement o Publicity . o Director’s cut – producer has sole right to make any and all cuts. o Producer’s control – see writer’s agreement o Artist’s remedies – see writer’s agreement o Immigration/naturalization . paid according to schedule. can present it to production company way he wants it. o Compensation .com o Immigration/naturalization – employment contingent on proving artist’s identity and employment eligibility under immigration laws. including budget. and PG-13 rating. shall direct movie in compliance with requirements of producer. legal requirements. o Reps and warranties – see writer’s agreement. p. 775 o Services – commence on exclusive basis 8 weeks before scheduled commencement of principal photography. again everything is negotiable. including “final cut” provided that director can make one cut and one preview of movie subject to certain conditions. same as in writer’s agreement above. o Credit – “directed by” on screen. without producer’s prior written consent and has to pose for publicity pictures. running time (95-110 minutes). etc. o Credit – see writer’s agreement. will get more creative control. schedule or budget without producer’s written consent. can even change casting. • Basic Terms and Conditions: Director Agreement. but its production company or producer who gets to make final cut. i. p. 779 o Grant of rights – producer has all of them. in billing block. Can’t authorize or make any changes in final shooting script.% of budgeted cost on commencement. schedules. Director Agreement • Where director can get a cut. o Indemnities – see writer’s agreement. producer still has right to make final cut. o Misc – gets premiere tickets and early copy of film • Standard Terms and Conditions: Director Agreement. o Publicity – can’t directly or indirectly issue any publicity or disclose any info concerning agreement. and for awards. including upon completion of director’s cutting rights.see writer’s agreement 55 . movie.
Performer Agreement • Loan-out agreement—artist for tax reasons wants to have own company or LLC owned by artist or director or performer or actor that then loans the services of that actor to production company. list or institutional ads. and in billing block. o Can keep one costume from wardrobe. p. • Standard Terms and Conditions: Performer Agreement. etc.com o Guild membership – artist has to remain in good standing in that organization and if fails to do so. personal to artist and cannot be delegated. lender shall cause artist to execute nudity rider in form and substance satisfactory to producer in connection with her performance of nude scenes in picture o Consultation rights – w/ respect to hairdresser. promo materials for exhibitions and much more. • Basic Terms and Conditions: Performer Agreement.see director’s agreement o Indemnities . 791 o Grant of rights – see director’s agreement o Reps and warranties . paid according to schedule o Contingent payments – unspecified amount if certain events (such as having to work more than consecutive “free” weeks) occur. in paid advertising limited to advertising issued by or under direct control of producer and doesn’t exclude certain advertising such as group. gets cast credit: 1) on screen. also liability protection.see director’s agreement o Producer’s control . o Transportation and expenses o Nudity rider – if nudity required. o Needs to be signed by authorized representative.Downloaded From OutlineDepot. If any other cast member accorded credit above screen title.$__. producer can terminate agreement or stop paying. exclusive starting 2 weeks prior to commencement of principal photography o Compensation .see director’s agreement o Credit . in ads subject to paid advertising exhibit. 787 o Services – acting services in role. on separate card in position among cast members. if any.see director’s agreement 56 . outdoor ads. in main titles and in size no smaller than that of larger 50% of screen title or credit accorded any other cast member. see p. 786. teaser or special ads. p. on all positive prints. o Credit – if artist appears recognizably in role during initial general theatrical release. • Paid Advertising Exhibit o Producer’s obligation to accord credit. artist’s credit also accorded that.
com o Lender’s remedies . Basic “getting to net” formula: • Gross (or gross proceeds) = studio’s receipts from theaters. studios will agree to either absorb third party participations to extent they would reduce producer’s share below a specific % (usually 20. typically applied to net profits but sometimes (for select few) to gross receipts. costs of duplicating and handling prints and other distribution materials. when actor reduces fee by deferring part of it for later to extent funds available after above deductions. soundtrack record sales. 40% rest of world.see director’s agreement o Paid advertising exhibit . 35% of other US TV fees. o As a result. producer would get 15%) 57 . including advertising and promotion and overhead charge of 10% of expenditures for inhouse personnel o Production costs. principal photography and post-production. TV licensees.see director’s agreement o Gross Receipts/Net Profits “Points” – contingent revenue participations in addition to fixed fee. participant receives a fixed fee and contingent compensation that comes into play only after recoupment of artist’s upfront fee and some form of breakeven. 35% in UK.see director’s agreement o Immigration/naturalization . subject to a minimum “floor” which may be “soft” or “hard” o Ex: if director. Definition of what is “gross” and what is “net” not determined in accordance with GAAP but depends on language in studio’s form. actual costs of development. 40% foreign TV o Distribution costs. “hard” floor) or more typically will agree to absorb ½ of third party participations to extent they’d reduce producer’s share below threshold (above. 50% of receipts) • Deductions: o Distribution fees.Downloaded From OutlineDepot. pre-production. • If anything remains. producer would only wind up with 10%. 5% of 90% of suggested retail list price. music publishing income. participations kick in with studio and producer splitting net 50/50 and with producer’s share absorbing all other net participations. 25% of publisher’s share of income rec’d by studio’s publishing affiliate. i. and portions of income from various ancillary sources (home video.see director’s agreement o Guild membership . plus interest on each and overhead charge o Deferrals. 20% of wholesale receipts. Generally.see director’s agreement o Publicity .e. merchandising. typically 30% of film rentals in US and Canada. two leads and writer each entitled to 10% of net.
fact they could lose money and might on other films. additional terms and considerations and Paramount’s standard net profit participation agreement to determine whether 1) K between P (producer) and D (studio) K of adhesion. Absence of surprise doesn’t render doctrine inapplicable. 2) success of motion picture cannot be predicted. relegates to subscribing party only opportunity to adhere to K or reject it. usually comes out of his 50%. “turnaround agreement”. D negotiates net profit formula only w/ relatively small number of persons who possess necessary clout. 3) studio has no K right to ask net profit participations to share risks attendant to film.” studio must recoup not only its investment in successful film but also sufficient add’l revenues therefrom to cover its unrecouped investment on its unsuccessful pictures. Producer hired director and actors. Ct. 3) relationship b/w P and D was that of co-venturers. 4) D owed fiduciary duty to P. and if given them % splits. Entire K drafted by D and turnaround and net profit participation provisions standard. but some deals can negotiate with studio to share other profit participation amounts in some %. video and TV (although over time most finish in black). 1990) Definition of net builds in for studio not only to recoup all out of pocket expenses but to make profit on film before they start dividing up so-called profit b/c of risks taken.A. even standard for the entire industry K of adhesion. Paramount (Cal. 2) K. Doctrine permits court to strike down entire K or any provision and nothing about this case precludes court from 58 • . and 5) conduct on part of D breached implied covenant of good faith and fair dealing. Court looking at Deal Memo. its ongoing development program. distribution organization and to finance its future motion pictures. form ones. Court finds that P’s compensation package negotiated by his agent and D’s representative but that boilerplate language in deal memo not negotiated.com • Rationale: “fundamental economic underpinning. P’s not using doctrine as sword but rather raised it in response to D’s reliance on K as written. or any provision. Contracts of Adhesion/Unconsionability: The Buchwald Case and After o Buchwald v. Cty. L. These needs result from fact that 1) most films fail to recover their production costs and distribution expenses during initial cycle of exploitation in theaters.Downloaded From OutlineDepot. Doctrine has procedural (inequality of bargaining power which results in no real negotiation and absence of meaningful choice) and substantive (turns also on absence of justification for one-sided result) considerations by which enforceability of clause tied to procedural aspects of unconscionability such that greater unfair surprise or inequality of bargaining power. Sup. Contract of adhesion – signifies standard K which imposed and drafted by party of superior bargaining strength. Unconscionability – K of adhesion fully enforceable according to its terms unless other factors present (including if it’s unconscionable). and neither were rest of documents above. is unconscionable. instead prepared on take it or leave it basis. less unreasonable risk allocation tolerated. Balance between social advantage in light of modern conditions and danger of oppression.
so hasn’t advanced the money in any real sense but charges interest. Question then becomes what decision is necessary to produce an equitable result? Court refuses to strike all challenged provisions of net profit formula it found unconscionable and permit D only to recover costs plus reasonable rate of return because would give windfall to P. Court already concluded film made based upon his treatment. 2) 10% advertising overhead not in proportion to actual costs. D gave notice it was abandoning project inspired by P’s treatment. flat overhead charge has no relation to actual costs and adds significantly to amount D must recoup before net profits realized. D has more than recouped its costs for film. not paid until film derived receipts. 20-30% even when haven’t laid out any funds. Also no fiduciary relationship except with D’s duty to render accounting. 7) charging an interest rate not in proportion to actual cost of funds. so D was required to employ P as producer and that breached its K to so and this clause cannot extinguish its duty to compensate him. 4) charging interest on negative cost balance without credit for distribution fees. 59 . D retained virtually unlimited power to determine whether P ever rec’d profit. Court finds P sustained burden of proving following were overly harsh and one-sided: 1) 15% overhead on Eddie Murphy’s operational allowance. Also in light of purpose of clause. slows down recoupment of negative costs and inflates amount of interest charged is one sided whereby D accounts for income on cash basis while simultaneously accounting for cost on accrual basis. and D says that since P failed to set up project at another studio within 12 month window. not correspondent to actual costs incurred. no justification. add’l 15% charge made for overhead on top of this item. 3) 15% overhead not in proportion to actual costs. Turnaround provision – purpose is to permit producer to take his project to another studio if first is no longer interested in pursuing it while at same time permitting first to recoup its development costs if project undertaken by second. resulting in charging overhead on overhead. instead says doesn’t have sufficient facts to determine what P should be paid. flat charge. 5) charging interest on overhead. abandoned “fundamental economic underpinning” argument during hearing.Downloaded From OutlineDepot. P didn’t have right at all times to inspect and copy purported venturer's books and records and D had pervasive control and while agreement to share profits.com addressing whether certain component parts of net profit determination unconscionable. 6) charging interest on profit participation payments. Covenant of good faith and fair dealing – unnecessary to determine because court will fashion equitable result that will produce damages at least equal to damages that could be awarded for breach of convenant. no justification. charges payments made to gross participants to negative costs. interest becomes add’l source of unjustified profit because neither distribution fees nor overhead charges taken into account in determining whether costs have been recouped yet charges interest on them. Co-venturer and fiduciary duty – few if any features that usually characterize joint venture present here. turnaround provision extinguished its obligations. permitted its option to expire.
(Cal. 5) bank loans secured by advances payable on domestic and/or foreign distribution deals. 6) over-budge penalty. commits agent to sell film and lists sales agents’ project sales of film upon completion. 2) advances from foreign sales agents. Differs from typical domestic distribution agreement and a foreign distribution agreement in that distributor heavily involved in production of film. knew what expectations were. Nine categories universally included in charges allocated to net profit calculations: 1) distribution fees. 5) production costs. cast members). 5) business approval of distributor. (Complaint) [optional reading] Complaint alleging net profit practices of studios illegal. 7) distributor’s access to production. 2) rights granted. While video revenue often surpasses 50% of total income.com • Note: Ps argued clause where only 20% of video receipts counted towards gross unconscionable. Ct. 4) creative approval rights of distributor. 4) prints. breach of implied covenant of good faith and fair dealing. boycott/concerted refusal to deal.Downloaded From OutlineDepot. Judge said didn't prove K defeated their reasonable expectations. 3) advertising. breach of K. if any. 6) procedures that must be followed during production. despite its decision not to cash flow production. L. are “essential elements” to production (directors. Standard form Ks on take it or leave it basis. for declaratory relief. 6) co-production funds. unjust enrichment. • Sales agency agreement with foreign sales agent. Basic terms: 1) advance paid on delivery. Warner Bros. 3) private equity through private offering. o Batfilm v. o Estate of Jim Garrison v. and any contingent compensation paid to producer once advance recouped. Domestic Negative Pickup coupled with Foreign Pre-Sales • “Negative pickup” agreement with domestic distribution. imposition of constructive trust and for an accounting. argued entitled to net profits. Ended up getting $900k. 1994) [class only] P’s obtained rights from comic book company and sold rights to WB. 4) private equity from independent financier. but judge said that was something they bargained for. denied Ps any relief. Producing Films: The Independent Model o Financing Sources: 1) advances from presales in foreign territories. these Ks only let participants count 20% of that income to profit participations. 3) who. domestic distributor will purchase film for set price. Warner Bros. low given huge profitability of movie. Super. Causes of action include price fixing. “Costs” deducted grossly inflated and bear no relation to reality. and injunctive relief. 2) distribution costs. 9) delivery materials. Cty. violation of business and professions code. 8) political lobbying expenses. 60 . 7) taxes. 8) delivery date.A. if film delivered with set list of requirements. instead helps reduce cost studios must pay for films. 7) tax credits and other “soft” money. and 9) interest.
with portion of advance paid upon signature of agreement.Downloaded From OutlineDepot. 4) authorized languages. 3) gap. 6) sales commission. and ship and airline rights). 2) territory. 8) allocation of gross receipts. 7) bank takeover rights. home video). Sets forth terms and conditions upon which completion guarantor will provide completion guarantee to bank. 5) security interest in picture. Basic terms: 1) term. at varying stages of production. marketing materials). 4) interest reserve. and pay-per view…rights usually reserved include merch. 7) sales agent’s expenses and “cap” on them. 9) delivery schedule. pay TV. 8) bank’s security interest in picture. bank and completion guarantor and other among foreign sales agent. 3) rights granted. soundtrack album. this is fraction of that. Set forth: 1) limited circumstances in which negative pickup distributor can reject delivery of picture. free TV. Bank will loan producer production funds to make movie based on 1) fact that large portion of budget will be repaid upon film’s completion and 2) bank’s trust in sales agent to sell remaining territories in 61 . Completion agreement with completion company. completion company gives guaranty to bank that film will be delivered within budget to each distributor. secured by producer’s rights under agreements above and producer’s rights in and to film. print publication rights. Two interparty agreements. 4) takeover rights. bank and completion guarantor. Usually more basic than negative pickup agreement b/c latter covers 30% or more of budget. Pre-existing agreements with multiple foreign distributors guaranteeing payment of certain advances upon delivery of film. one among domestic distributor. 3) minimum guarantee. 8) distribution fees taken by distributor and/or royalties paid (theatrical and non-theatrical. 2) expenditure of sums in connection w/ picture and method of recoupment of such sums. 6) overspill. marketing and ad budgets. 2) uniform delivery system and method for disputing delivery. 9) delivery schedule. 5) rights granted and reserved (rights granted to foreign distributors often limited or split among companies…rights for sale include theatrical. 3) prioritization of parties’ security interests in film. Also if over budget. producer. 2) territory. 7) producer’s approvals (video and TV windows. Basic terms: completion guarantor’s 1) fee. bank loans producers’ budget of film. 5) specifics of film production. Basic terms: 1) term. 4) ask/take prices. 5) producer’s approval rights. Basic terms: 1) amount. 2) maturity date. TV. music publishing. 6) bank approval rights. non-theatrical. interactive rights. 3) approval rights and control of production. completion guarantor’s responsibility to front add’l costs.com • • • • • Agent responsible for delivering distribution agreements to trigger bank’s agreement to loan production funds but also to sell enough remaining territories to cover gap. home video. Loan agreement. producer.
using investments in company to fund production. i. One requirement is have sales agent agreement w/ foreign sales agent who commits to sell film for you. then can usually get domestic distributor to do negative pickup agreement. this is how people w/o track record go about doing it because can't get distributor or bank to commit first or second time. pari passu basis until distributions to financiers equal. 100% to financiers of picture on pro-rata. producer and bank along with completion guarantor and also agreement b/w foreign sales agent. on culm basis. remaining gross receipts deemed net profits and allocated on pro-rata. 100% to financiers of picture on pro-rata. 50% to financiers and 50% to production company. but not limited to. • Difference between advances secured by executed distribution agreements and total amount of loan = “gap” • Summary: get bank first to guarantee loan. until distributions to financiers equal. and then usually agreements b/w distributor. usually for budgets under $5M.Downloaded From OutlineDepot. have pre-existing agreements w/ multiple foreign distributors (agent gets you those distributors). • Summary: form LLC or LLP. pari passu. out of pocket. 2) allocation of net profits (first. offer to investors pieces of film. Private Equity – a private offering • Typically used for films with smaller budgets ( < $5M). have to comply w/ state and federal securities laws because 62 . business expenses related directly to picture and/or distribution expenses in excess of approved budget.com accordance with its projections by time film finished so loan can be repaid in timely manner. fifth. Five principal components: get domestic distributor who says if deliver film with these requirements. so find "angels". and completion agreement w/ completion company (completion bond where completion company says guarantee movie will come in for this particular budget). • Key terms: 1) # and cost of units. producer. blue sky laws).e. pay you $x for it. after all above payments. bank and completion guarantor. loan agreement w/ bank where bank now sees you have foreign distribution and distributor and willing to loan you money for budget of film which is secured not only by film but by deal w/ distributor and deal w/ foreign sales agent. to payment of actual. second. third. Must comply with federal and state securities laws. prepares offering memorandum (sets forth info about producers and synopsis of film. pari passu basis. to payment of any contingent amounts paid. include risk factors) and sells units of LLC to investors. Producer forms LLC. on culm basis (including amounts in second) 120% of aggregate cash investments in picture made by such financiers. (including. fourth. costs of production. earned or payable to any person or entity based upon gross receipts if ever payable. people who want to be in film business. 100% of aggregate cash investments in picture made by such financiers. Reg D. Get everyone on board ahead of time.
and violations of 43a of Lanham Act. aircraft/water insurance. o Insurance Studios generally have blanket insurance policies that cover all of their films and activities. artistic films to be made that major studios pass on. Most European countries given subsidies and quotas to encourage investment in locally produced films. EU and member states have established local-content quotas for primetime TV and range of subsidies available to EU-based producers who utilize requisite proportion of local talent and technical support. injury to cast members. copyright infringements. o But increasing number of films by European producers produced with assistance of system of quotas and subsidies.com selling security and complicated to put together offering memorandum to make those sales to people. Errors and omission insurance (E&O) protects film producers from claims such as violation of rights of publicity and privacy. so fees for doing that are expensive. Very costly aspect of production. workers compensation. such as foreign insurance.Downloaded From OutlineDepot. Indie filmmakers must obtain this on their own for each project and often can’t get funds w/o it. Split profits after breakeven point. • 63 . quasi-K claims from submitters of ideas. Foreign countries source of financing for US movies. Varies by country. The International Market o US film industry dominates int’l market. o Int’l co-financing is way to spread risk inherent in industry while allowing US producers access to European system of subsidies and allows more creative. even major studios use it to spread risk. Doesn’t provide reimbursement for lost profits or production costs and doesn’t cover crimes or intentional torts. Types: most deal with theft. To help them compete with US blockbusters. or weather insurance. Others apply only in certain situations. damage.
com IX. of one's name or likeness o right of privacy is a personal right • only persons who are injured may assert a claim • the right is not assignable and usually does not survive the injured party's death o elements of right to privacy claim . 255-260. New England Life Insurance Co. Rochester Folding Box (CB 187) • HOLDING: the unauthorized use of an individual's picture on flyers promoting the sale of flour boxes did not violate that individual's right of privacy • REASONING: the right to privacy does not exist in law and is not enforceable in equity • * this was a NY case in 1902 o Pavesich v. 243-247.Downloaded From OutlineDepot. • HOLDING: there is a legal right to privacy • REASONING: the right of privacy has its foundation in the instincts of nature • as to each individual member of society there are matters private and there are matters public so far as the individual is concerned • * this was a GA case in 1904 • NOTES: 64 . 270-279 • Personal Rights: Privacy o Prosser's 4 Categories • protection against intrusion into one's private affairs • avoidance of disclosure of one's embarrassing private facts • protection against publicity placing one in false light in the public eye • remedies for appropriation. usually for commercial advantage. ENTERTAINMENT RIGHTS: RIGHTS OF PUBLICITY.the use of one's name or image in an • identifiable manner • w/o consent • situations in which the invasion benefits the wrongdoer o an unauthorized depiction of an individual need not be complete facsimile to warrant a privacy invasion o Roberson v. (CB 188) • FACTS: An easily recognizable likeness of Π was published in an advertisement for ∆. PROPERTY AND IDEAS. PART I READING NOTES: CB (casebook) 185-231.
∆ published a fictionalized biography of Π which portrayed him as a war hero. firm. • ISSUE: whether claim could be dismissed b/c events or conversations that were intruded upon were not completely private • HOLDING: no dismissal just on that • court didn't rule on issue of liability • REASONING: • test = whether a reasonable expectation of privacy is violated • if so → whether the invasion is highly offensive to a reasonable person. sound recording. or other physical impression of the Π engaging in a personal or familial activity • direct at paparazzi Statutory Protection • NY Civil Rights Law §50 Right of Privacy: it's a misdemeanor when • a person. or corporation • uses for advertising or trade purposes • the name. considering among other factors. Reporter used a hidden video camera to tape her conversations w/ other employees inside of the firm's offices. Julian Messner (CB 292) FACTS: Π won the most baseball games for any left-handed pitcher in MLB history. portrait or picture of any living person • w/o written consent §51 Action for Injunction and for Damages • gives victim of §50 right to recover damages • jury has discretion to award exemplary damages • doesn't apply to author/composer/artist who uses his name/portrait/picture in connection with his own works • Spahn v.8 imposes liability for physical invasion of privacy in a manner that is offensive to a reasonable person for the purpose of capturing any type of visual image. American Broadcasting Company (CB 190) • FACTS: Investigative reporter obtained employment as a telephone answerer at a psychic hotline.com o it's permissible for a reporter to tape material for a report where the taping took place in a location where the Π had no reasonable expectation of privacy Sanders v. the motive of the alleged intruder CA §1708. HOLDING: ∆ violated §51 REASONING: • courts have engrafted exceptions and restrictions onto the statute to avoid any conflict w/ the free dissemination of 65 . Π sued.Downloaded From OutlineDepot.
newsworthy events. he is substantially w/o a right to privacy • the factual reporting of newsworthy persons and events is in the public interest and is protected • the fictitious is not Tony Stephano v.Downloaded From OutlineDepot. and matters of public interest • it is erroneous to confuse privacy w/ personality or to assume that privacy. though lost for a certain time or in a certain context goes forever unprotected • Π is a public personality and insofar as his professional career is involved. the name/picture/portrait of a person who consciously sought to establish a publicity value for his personality HOLDING: common law right of publicity did not exist b/c right of publicity is encompassed under NY §50-51 REASONING: • common law claim • the statute is not limited to situations where ∆'s conduct has caused distress to a person who wishes to lead a private life free of all commercial publicity • right of publicity is encompassed under the Civil Rights Law as an aspect of the right to privacy • statutory claim • statute doesn't define trade or advertising purposes • but courts have consistently held that these terms should not be construed to apply to publications concerning newsworthy events or matters of public interest • this exception should be liberally applied • newsworthiness exception applies to news stories and articles of consumer interest including developments in the fashion world • the event or matter of public interest which ∆ seeks to convey is not the model's performance. ideas. Π claims he only consented for use in a fashion article. ISSUE: do statutes preclude the recognition of a common law right of publicity in cases where ∆ has exploited.com • thoughts. News Group Publications (CB 193) FACTS: Π is a professional model who claims that ∆ used his photo in an advertisement w/o his consent. but the availability of the clothing item displayed • the fact that ∆ may have included the article in his column solely or primarily to increase the circulation of its magazine and therefore it's profits 66 . w/o consent.
com o does not mean that ∆ has used Π's picture for trade purposes within the meaning of the statute • a picture illustrating an article on a matter of public interest is not considered used for purposes of trade or advertising within the prohibition of the statutes UNLESS • it has no real relationship to the article • the article is an advertisement in disguise NOTES (CB 198): • statute applies to real names. ideas. Flynt Distributing Co. Gross) • the absence of sufficient connection between the editorial content and the offending portrait/picture may give rise to a cause of action under §51 (Ali v. Hughes formed a corporation and sold it the exclusive rights to his life story and bought a series of articles written about him. (CB 201) FACTS: Π was misidentified in an article in ∆'s magazine as an actress who appeared in an orgy scene in a movie.Downloaded From OutlineDepot. not pseudonyms • written consent is absolute requirement (Brinkley v. newsworthy events. Π 67 . HOLDING: NY statute does not give a public figure the right to suppress truthful accounts of his life REASONING: • the law affords little privacy protection to public figures • right of publicity recognizes pecuniary value which attached to public figures and the right of those figures to benefit from it • the publication of a biography is clearly outside the commercial use contemplated by the right of publicity • right of privacy must yield to public interest • right of publicity must yield in some conflicts of free dissemination of thoughts. Playgirl) • even in a situation in which editorial content is present and the use is not explicitly for advertising purposes Defensive Aspects • the same public official/public figure considerations that figure strongly in the area of defamation also apply in the area of privacy • Rosemont Enterprise v. and matters of public interest • Lerman v. Hughes then sued for copyright infringement. Π was actually the writer of the book and screenplay that film was based on. Random House (CB 200) FACTS: Howard Hughes wanted to forestall the publication of an unauthorized biography. Casablancas) • consent is final once it is granted in an appropriate manner (Shields v.
HOLDING: • ∆ can't be liable for state law claims b/c of 1st amendment unless Π can prove that ∆ acted w/ requisite fault • which they can't • no violation of right to publicity REASONING: • State law Claims • NY privacy statute only provides cause of action for commercial appropriation • when the advertisement is merely incidental to a privilege use there is no violation of §51 • solicitations that were designed to simply convey the nature and content of past issues cannot satisfy advertising prong • where Π is a public personage or actual participant in a newsworthy event.com brought 3 claims .Downloaded From OutlineDepot. and thus is an advertisement in disguise • court finds that Π doesn't prove this • Π may claim that ∆ forfeited the privilege for reporting matters on which the public has the right to be informed by proving that ∆'s use was infected w/ material and substantial fiction or falsity • court finds that Π satisfies this but 1st amendment means ∆ can't be held liable 68 . ∆ was found guilty and damages were awarded for 1st publication of article.(1) libel (2) violation of NY §§50-51 (3) invasion of common law right to publicity. Π may still obtain sanctions under §51 if he meets one of two tests • Π may attempt to demonstrate that Π's name or likeness has no real relationship to the discussion. Π sought recovery for later publications of magazine that included the infringing article. the use of his name or likeness is not for purposes or trade within the meaning of §51 • the privilege does not extend to commercialization of his personality through a form of treatment distinct from the dissemination of news or information • even if there was no use in conjunction w/ a report on a matter of public interest.
com • • unless Π can prove fault (which court says he can't) common law right to publicity claim • Π insistence that she is a private person does not square w/ her claim that her right to publicity was appropriated • there is no evidence that ∆ deliberately exploited Π fame and fortune • false light claim distinguished from right to publicity • falsity is key to §51 claim.Downloaded From OutlineDepot. but 1st amendment prevents imposition of liability unless there is actual malice shown • false light claim also has falsity as it's key • also subject to constitutional protections constitutional issues • Π is a limited purpose public figure • she purposefully surrendered part of what would otherwise have been her protectable privacy rights by voluntarily devoting herself to the public's interest in sexual mores • publication does not need to meet an independent standard of newsworthiness stand under umbrella of 1st amendment • even vulgar publications gets protection • ∆ loses 1st amendment protection only under a standard analogous to those which cause libelous speech to lose such protection • had Π actually been the starlet pictured then ∆ would have this protection • factual error does not alter the subject matter of the offending publication • ∆ loses 1st amendment protection if he acted w/ the requisite intent in distributing materials defaming or invading the privacy of a private figure • issue = whether ∆ had serous doubts about accuracy of the identification of Π • ∆ may only be held liable upon clear and convincing evidence that a high level employee knew or reckless disregarded the fact that a false matter had been published 69 .
as well as other aspects of identity such as photograph. Π performs at a state fair where a TV reporter tapes his performance and broadcasts it w/o his permission. • 70 . independent. likeness. Scripps-Howard (CB 212) FACTS: Π is an entertainer who performs a human cannonball act. portrait.com • there is no evidence that ∆ knew or recklessly disregarded factual error • there's an absence of any facts demonstrating that ∆ had a subjective awareness of probable falsity • Damages • $7 million award shock conscience of court • they are grossly excessive and obviously a product of Π's appeal to the passion and prejudice of the jury • verdict of this size places a deep chill on a media ∆'s 1st amendment rights • NOTES (CB 209): the newsworthiness defense is extremely broad a fictionalized account of a newsworthy event does not necessarily make it ineligible for 1st amendment protection when individuals voluntarily enter the public arena they must expect to endure the consequences of such participation Personal Rights: Publicity o some jurisdictions still subsume the right of publicity under the right of privacy • in others the right of publicity is wholly separate.Downloaded From OutlineDepot. and regarded as a property right o right of publicity: right of each individual to control and profit from the commercial value of his or her own identity • it protects the unauthorized commercial exploitation of a celebrity's name (actual or legal). and biographical facts and records of performance • rationale = protection of celebrity's proprietary interest in the development of a marketable interest serves societal interests by guarding against unjust enrichment • also promotes creative by offering financial incentive to those choosing to cultivate a unique persona o an important issue in the area is whether rights of publicity survive death of the celebrity concerned • and if so. whether those rights are inheritable and devisable o At Common Law • courts have struggled w/ distinctions between the two rights court first expressly recognize a right of publicity in Haelan Laboratories v. caricature. Topps Chewing Gum (CB 211) • Zacchini v.
Downloaded From OutlineDepot. but the 1st and 14th amendments don't require this privilege REASONING: • precedent relied upon by state supreme court shouldn't be applied b/c it dealt w/ right to privacy.com ISSUE: whether reporter has privilege to report matters that would otherwise be protected by an individual's right of publicity (unless the actual intent of reporter was to appropriate the benefit of publicity or to injure) HOLDING: State can make this privilege. not right to publicity • differences between these torts are important b/c • state interest in each is different • in false light privacy case the interest is protecting an individual's reputation • in publicity its protecting an individual's proprietary interest • they have different degrees of intrusion on dissemination of information to the public • false light privacy case requires minimizing publication • publicity case focuses on who does the publishing • the broadcast of a film of Π's entire act poses a substantial threat to the economic value of that performance • no social purpose is served by having the ∆ get for free some aspect of Π that would have market value • protection provides an economic incentive for Π to make the investment required to produce a performance of interest to the public • there is no doubt that entertainment as well as news enjoys 1st Amendment protection • but it is important to note that neither the public nor respondent will be deprived of the benefit of petitioner's performance as long as his commercial stake in his act is appropriately recognized DISSENT: • doesn't like how majority draws line around media broadcasting entire act w/o his consent • ∆ acts were not comparable to unauthorized commercial broadcast of sporting events. theatrical performances. and the like where the broadcaster kept the profits • instead of beginning w/ quantitative analysis of the performer's behavior (which would be "is this or isn't this his entire act") court should direct initial attention to acts of news media 71 .
Center v. Hipsley • recognized it as distinct tort from overarching invasion of right to privacy • survival after death • necessary for full commercial exploitation of right • commentators urge the right should be inheritable. ISSUE: • is right of publicity distinct from right of privacy in GA? • does right to publicity survive the death of its owners? • is the right inheritable or devisable? • must owner of right of publicity have commercially exploited the right before it can survive death? HOLDING: • right of publicity is separate from right of privacy • right of publicity survives death • owner does not have to commercially exploit right before death REASONING: • separation from right of privacy • history of recognition of right of publicity kept it separate from right of privacy • 1st GA case to recognize right of publicity = Cabaniss v. if not destroy the value of the right of continued commercial use • also. ∆ advertised that a portion of sales would go to Dr. American Heritage Productions (CB 216) FACTS: Π is the administrator of Dr. the economic value of the right of publicity during life would be diminished • why? b/c the celebrity's untimely death would seriously impair. King and wants to sell it. ∆ made a bust of Dr. King but never created a trust for it. King's estate.Downloaded From OutlineDepot. but courts have been split • if the right of publicity dies w/ the celebrity.com • when a film is used for routine portion of regular news → 1st amendment protects from right of publicity or appropriation law suit • unless plaintiff makes a strong showing that the news broadcast was a cover for private or commercial exploitation Martin Luther King Jr. those who would profit from fame of celebrity have failed to establish their claim that they should be the beneficiaries of a celebrity's death • trend as been to recognize survivability • 72 .
1.g.Downloaded From OutlineDepot.Groucho • having found that there are valid reasons for recognizing the right of publicity during life. King could have exploited his name and likeness during his lifetime. Day & Night • "that we should single out for protection after death those entertainers and athletes who exploit their personae during life. just b/c he didn't doesn't mean that others have the right to use his name and likeness in a way he chose not to do o Note (CB 228) MLK Concurrence (Justice Charles) • thought it was unnecessary for the majority to expand the right of privacy enumerated in Pavesich • complaint stated a claim under which existing doctrine of unjust enrichment could grant relief • no need to create a new right • financial gain should not control whether there's a right of publicity violation Statutory Recognition • CA §3344. and deny protection after death to those who enjoy public acclamation but did not exploit themselves during life. etc. Casablanca but was overturned in Groucho Marx Productions v. voice. likeness.3344: Use of Name or Photograph w/o Consent for Advertising person is liable for damages for knowingly using another's name. an inter vivos transfer of the right to the use of one's name or likeness • idea that right needed to be exploited during life to render the right inheritable arose out of dicta in Hicks v. for purposes of advertising or selling without such person's prior consent damages = $750 or actual damages • injured party only has to present proof of gross revenue attributable to such use • 73 .com • commercial exploitation prior to death • exploitation: commercial use by the celebrity other than the activity which made him/her famous • e. puts a premium on exploitation" . we find no reason to protect after death only those who took commercial advantage of their fame • a person who avoids exploitation during life is entitled to have his image protected against exploitation after death just as much if not more than a person who exploited his image during life • Dr.
shall not constitute a use of which consent is required no violation of this section merely because the material containing the use of a name/voice/etc/ was commercially sponsored or contains paid advertisement nothing in this section shall apply to owners or employees of any medium used for advertising • "likeness" need not be literal under §3344 (Newcomeb v. Adolf Coors ) it's a triable issue of material fact Additional Recognition of the Right at Common Law • Midler v. ∆ hired a sound alike. mere imitation of a recorded performance would not constitute a copyright infringement even where on performer deliberately sets out to simulate another's performance as exactly as possible • if Π were claiming secondary meaning or seeking to prevent ∆ from using that song. and not essential. ISSUE: whether Π can sustain claim HOLDING: Π has a claim REASONING: • the purpose of the media's use of a person's identity is central • if the purpose is informative or cultural → the use is immune • if the purpose merely exploits the individual portrayed → no immunity • Under copyright law.Downloaded From OutlineDepot. Ford Motor Company (CB 243) FACTS: ∆ asked Π to participate in a commercial. Π said no. to the purpose of the publication there shall arise a rebuttable presumption affecting the burden of producing evidence that the failure to obtain the consent of the employee was not a knowing use of the employee news/public affairs/etc.com o person who violated this section is required to prove his/her deductible expenses • prevailing party is also entitled attorney's fees and costs where a photograph/likeness is only incidental. she would fail • but claim is about voice and a voice isn't even copyrightable • Π can't get a remedy under unfair competition b/c the type of use wouldn't infringe her market • Π can't get relief under §3344 b/c ∆ didn't actually use her voice • CA also recognizes an injury from an appropriation of the attributes of one's identity • value of Π's voice = what market would have paid for Π to have sung the commercial in person • 74 .
article of merchandize. good or service as to constitute an advertising.Downloaded From OutlineDepot.com o Waits v. §51 does not survive death • a number of other state statutes contain provisions providing for postmortem rights including CA • where no statute exists results may vary • At Common Law several states recognize the descendability of the right of publicity at common law but have not established limits for its duration • GA is silent on the issue • NJ recognizes descendability • OH says it's not descendable • Under Statute in CA Guglielmi and Lugosi made it clear that if a common law right of publicity → legislature passed §990 amendments to §990 include • statement that a use that would otherwise be exempt shall not be exempt if the claimant can prove that the use is so closely connected to the sale of a product. marketing or merchandising • extension of post-mortem applicability of the provision to 70 years • provision that applies the § to acts occurring in CA regardless of the domicile of the deceased personality of the time of death California Civil Code Astaire Celebrity Image Protection Act (CB 256) • Conflict Problems there is no uniform rule concerning the descendability of property rights • creates an issue in many cases where the heirs of a decedent domiciled in one state have sought to enforce publicity rights under the laws of another state • 75 . Frito-Lay (CB 246) upheld viability of Midler elements of voice misappropriation • whether ∆ had deliberately imitated the artist voice • rather than simply his style • whether the artist's voice was sufficiently distinctive and widely known to give him a protectable right in use voice misappropriation is not preempted by federal law • Note (CB 247) Stephano held that there was no common law right of publicity in NY Post-Mortem Availability (CB 254) • NY has no common law right of publicity the limited right of publicity under §50.
appearance. Lawrence suggests this • Prima v. or mark by which the goods produced or dealt in by a particular individual or business are distinguished from those produced or dealt in by others includes any word. or device adopted and used to identify goods and distinguish them from others • purpose of trademark designate goods as the product of a particular source assures the public that they are procuring the genuine goods they seek • must point distinctly to the origin or ownership of the goods to which it is affixed • trademarks may be fanciful (coined words which have been invented for the sole purpose of functioning as a trademark) arbitrary (words or symbols in common usage in the language but arbitrarily applied to goods) suggestive (words which suggest but do not primarily describe the goods or their characteristics) descriptive (marks that describe the qualities. and meaning • the similarity of the channels of trade and good o Tradenames • tradenames: used to indicate a part or all of a business 76 . or characteristics of a product) • trademark infringement is determined by the likelihood of confusion among the purchasing public factors to consider • the similarity of the marks in sound.Downloaded From OutlineDepot. symbol.com • the outcome will generally depend upon whether the right of publicity is descendible under the law of the state in which the decedent was domiciled at the time of death • Southeast Bank v. name. device. ingredients. Darden Restaurants had domicile make a difference o Defensive Aspects • First Amendment limits the right of publicity • courts will not permit exploitation beyond what is reasonable necessary to convey the newsworthiness of an event Trademarks (CB 270) o §43(a) of Lanham Act (CB 269) • makes liable any person who affixes a false designation of origin or any false description or representation to any good or service in commerce • §43(a) provides protection against false representation likely to cause public confusion about origin and sponsorship o Trademarks • trademark: a sign.
and can be the object of separate registrations Use of §43(a) by Celebrities and Entities • Allen v.Downloaded From OutlineDepot. business. character names. or services and of establishing goodwill • tradename relates mainly to a business and its goodwill a trademark relates mainly to goods sold • tradenames aren't entitled to registration. ∆ claims this was to convey idea that the actor was the ultimate woody Allen fan. surnames. ∆ admits that the actor was selected & posed the way he was to capitalize on his resemblance to Π.com o o includes individual names. the protection afforded to tradenames is the same as protection afforded to trademarks Service Marks • service mark: a mark used in the sale or advertising of services to identify the services of one person and distinguish those services from the services of others includes titles. but that involve unfair competitive practices resulting in actual or potential deception • Π must establish 3 elements • involvement of goods or services • effect on interstate commerce • false designation of origin or false description of the goods or services • application of §43(a) is limited to those situations where the potential deception threatens economic interests that are analogous to those protected by trademark law 77 . National Video (CB 271) FACTS: Π is suing over an advertisement ∆ used featuring an actor that Π claims is masquerading as Π. and other distinctive features • intended to identify and afford protection to things of an intangible nature • it is possible for a given symbol to be used in a way that it functions as both a trademark for goods and service mark for services. ISSUE: whether there was a likelihood of confusion over whether Π endorsed or was otherwise involved in the advertisement HOLDING: there was a likelihood of confusion • injunction is issued REASONING: • §43(a) prohibits false descriptions of products or their orgins • it has been held to apply to situations that would not qualify formally as trademark infringement. and abbreviations of firm names use by one engaged in a business as a means of identifying products. ∆ admits that that the actor looks like Π but denies that the advertisement appropriates Π likeness or that it poses a likelihood for confusion.
Downloaded From OutlineDepot. information given in lecturer that was different or new from readings) • privacy and right to publicity are different 78 .e. and judgment injunctions • scope of injunctions against misleading commercial speech should be limited to that necessary to avoid consumer confusion • disclaimers are favored over outright bans • ∆ must be enjoined from appearing in advertising that creates the likelihood that a reasonable person might believe that he was really plaintiff or that plaintiff had approved his appearance • Lecture Notes – I’ve only included those notes that supplement the reading notes (i. comparison.com • • • examples of economic interests court should be concerned about • interest of having public free from harmful deceptions • interest of trademark value in the value of his distinctive mark court must consider 6 factors when determining whether there's a likelihood for confusion • the strength of Π marks and name • the similarity of Π and ∆'s marks • the proximity of Π and ∆'s products • evidence of actual confusion as to source or sponsorship • sophistication of ∆'s audience • ∆ good or bad faith distinctions between Lanham Act and privacy claims that makes Lanham more appropriate resolution for this case • the likelihood of confusion standard applied under Lanham is broader than the strict "portrait or picture" standard under privacy statute • likelihood of confusion standard is easier to satisfy on the facts of this case • likelihood of confusion standard may be applied by court • privacy statute poses question of identifiability to jury • while confusing similarity is technically a question of fact. it has sometimes been regarded as one for the court to decide through its own analysis.
275 -. there was no violation of right to publicity b/c Π claims to be a private person o Hertz thinks that if the court wanted her to get the money they would have • he thinks that this is what's motivating the court and that you can see it working in all of these cases right of publicity o basically a protection of celebrity's image for use in commercial purposes o there's a difference between states as to whether the rights are inheritable or devisable o §43 of Lanham act • talks about unfair competition • gives a nationwide remedy as opposed to the varying state remedies for right of publicity o Haelan • first official expression of right to publicity (also recognizes a separate right to privacy) Allen o Hertz emphasizes pg. only it really wasn't o court said that although the use of her name was false.com • • • privacy is • personal • not assignable • doesn't continue past death o right to publicity relates to someone who's has commercial value to their image o privacy claim involves the use of someone's name or image • identifiable • w/o consent • to the benefit of some wrong doer o fictional work can give rise to privacy claim • ex) Kid Rock was sued by an ex-girlfriend whom he wrote a song about Lerman o Π sued for use of photos by ∆ in a magazine that ∆ claims was Π.Downloaded From OutlineDepot.where court talks about how use of look-alike could case confusion to consumers • 6 factors to look at strength of Π likeness and name similarity of Π and ∆ mark proximity of Π and ∆'s products evidence of actual confusion sophistication of ∆ audience ∆ good or bad faith o If this were to be on the exam he would expect you to know and apply these factors o Contract Clauses 79 .
com None for the Section Exam Tips • • Common law right to privacy & publicity are potential exam topics Key cases (meaning they were listed by him as being potential for the exam) o Midler o Waits o Allen 80 .Downloaded From OutlineDepot.
Supp. of the ability to use its service mark and have rendered the Pl’s mark devoid of independent value. Aerosmith does not need to rely on Pump’s limited recognition to sell Aerosmith albums. 291 – 385) 3. PART II Chapter 3 – Entertainment Rights: Rights of Publicity. Aerosmith released their Pump album in 1989 to considerable publicity. Issues: 1) Pump trying to prevent Aerosmith from trading off its business goodwill – Ct thinks it is ridiculous to argue that Aerosmith adopted the name Pump in hope that purchasers would mistake its album for one of the band Pump. Pump. Mass. Inc. Facts: Pl. Def. 2) Reverse confusion.3 DEFENSIVE MATTERS (subsection to Personal Rights: The Lanham Act and Other Fed. v. The bandmates were former body builders and they had been recognized for their work in the band by anti-drug activists. got some local radio time and had its videos aired on local cable station in Massachusetts. Also one of Aerosmith’s members told a reporter that the album was named Pump because “Now that we’re off drugs we’re all pumped up…. 1990) (court outlined factors to determine if there was confusion from similar trademark) Holding: Court granted Def. Collins Management. 746 F. (Promoting Unlimited Mind Power) was a no name musical group which promoted physical self-improvement as an alternative to drugs. The band released 2 singles. Leg) Pump. and Ideas (pp. Their tour was called the “Pump tour” and the words Pump were featured prominently on the album cover (they were placed on the back of a pick-up truck) along with the Aerosmith logo. its actions in released and promoting the album Pump have effectively robbed Pump. 1159 (D. ENTERTAINMENT RIGHTS: RIGHTS OF PUBLICITY.4. Aerosmith’s motion to dismiss in a service mark infringement case. What the court says though is the only similarity 81 . Property.Downloaded From OutlineDepot. Legal standard in 1st Cir: *8 factors to determine if there was confusion* between the two service marks that negatively affected Pump (1) the similarity of the service marks • Because the standard in summary judgment requires the court to review the evidence in a light most favorable to the non-moving party (Pump) the court refrains from saying the two marks are dissimilar. Inc. PROPERTY AND IDEAS. Aerosmith’s notoriety. Inc. Pump’s registered mark consisted of the word “Pump” resting on a barbell.” There is no evidence that Aerosmith was aware of the ban Bump’s existence.com X.
• Favors Aerosmith (2) the similarity of the goods • Both parties use the term “Pump” to promote a wide array of goods (albums. t-shirts. Inc. has its headquarters • Favors Aerosmith (8) the strength of the plaintiff’s mark o 1. is that members of Aerosmith live within a 7-mile radius of where Pump. each of the four affiants admit he was aware that the Pump album was an Aerosmith album o 2. While Aerosmith already has wide spread audience appeal and success. the strength of the mark in the field . Pump seeks just that. Mere inquiries as to any affiliation between Aerosmith and Pump is insufficient evidence of actual confusion o 3. the two marks are otherwise used in different contexts and with different visual displays. Inc. 82 . the weakness of the mark of Pump.. Both groups play rock music that appeals to young people.Downloaded From OutlineDepot. the weak evidence of actual confusion. forget about intentionally using their service mark in bad faith. the plaintiff’s actions in promoting its mark – efforts to promote the band ended sometime in 1988 and were only rekindled in recent months • Favors Aerosmith Court’s Reasoning: Court was swayed in favor of Defendant because of the dissimilar manner in which the term Pump was used. o 3. No evidence that an unaffiliated person was confused by the appearance of Aerosmith Album – that Pump was working with Aerosmith to promote an antidrugs message. o 2.com is that the spelling is phonetically identical. • Favors Pump (6) evidence of actual confusion • Pump’s 4 affidavits as proof of actual confusion fail on several grounds o 1. or that anyone bought the Aerosmith album thinking it came from Pump. and Aerosmith’s lack of bad faith. videos) and services (concerts) associated with musical entertainment • Favors Pump (3) the relationship between the parties’ channels of trade (4) advertising (5) the classes of prospective purchasers • The differences between the parties are a matter of degree. live concerts. • Favors Aerosmith (7) the defendant’s intent in adopting its mark • Only evidence that Aerosmith even knew about Pump.and band’s failure to get a record contract indicates that neither it nor the ark is well-known in the music industry. Both bands advertise through posters. or that the Aerosmith album was Pump’s album. the length of time it has been used and the plaintiff’s renown in its field – only been in use since early 1987. radio and video royalties. jewelry and media exposure. Pump wants to increase its profits through the same channels Aerosmith already uses through music store sales. t-shirts. each of the four affiants is a friend or acquaintance of Pump o 4. not of kind.
Downloaded From OutlineDepot. The calendar featured two pictures of Babe Ruth and a picture of a baseball autographed by Babe Ruth. 297) (Scope of coverage of a trademark will not be unreasonably extended) Facts: Defendant MacMillan published a baseball calendar consisting of pictures of baseball starts accompanied by weekly calendars. Holding: Court held for Defendant. and the lower court’s dismissal of their claims for infringement of the common law right of privacy.3d 772 (7th Cir. Inc. how much the band has earned in profits. He presented evidence that when one types in Survivor it retrieved web sites related to the band and the television show. For Plaintiff to succeed he must offer some evidence on the likelihood of confusion or actual confusion. Babe Ruth League..com Sullivan v.. the factors regarding confusion are (1) the similarity of the marks. • Surveys demonstrating confusion o Sullivan did not conduct a survey. 1990) (Fn 2 p. Babe Ruth’s daughters had registered “Babe Ruth” as a trademark for paper articles. (3) the area and manner of concurrent use. (5) the strength of the plaintiff’s mark. 2004) (Fn 1. federal and common law trademark dilution. Holding: Second Circuit affirmed the trial court’s grant of summary judgment with respect to the Ruth daughters’ federal and common law trademark infringement and unfair competition claims. Macmillan. Procedural History: District Court found for Defendant because only 1 factor weighed in favor of Plaintiff. examples of such evidence include: • Specifics on how well known the name Survivor is today as the identifier of a rock band • How much money is spent on promoting or advertising of the band. namely playing cards. and envelopes.. p. was licensed to use the trademark for its amateur baseball league and Curtis Management Group Inc. Legal Standard: similar to 1st Circuit. But this did not present evidence of confusion – a consumer looking at the different web-sites would not come to the conclusion that CBS and the band were from the same source. Court’s Reasoning • Trademark use is defined as one indicating source or origin and thus the owner of the mark acquires only the right to prevent his goods from being confused with those of others and to prevent his own trade from being diverted to competitors through their use 83 . writing paper. unfair competition and deceptive trade practices against CBS and others to prevent them from using the mark “Survivor” from their TV show on CDs and merchandise. 894 F. (2) the similarity of the products. Inc. but he presented the results of searches conducted on two automated search engines. (4) the degree of care likely to be used by consumers. was authorized to license the mark to third parties on a royalty basis.2d 579 (2d Cir. 385 F. CBS Corporation. (6) whether any actual confusion exists. 296) (Another case of an “inflated sense of proprietariness”) Facts: Owner of the trademark in the band name “Survivor” brought suit alleging trademark infringement. Pirone v. and (7) the defendant’s intent to palm off its good as those of the plaintiff. which was the area and manner of concurrent use.
1 COPYRIGHT LAW: IDEAS VS. Macmillan was only using the name and image of Babe Ruth to identify a great baseball player. Unfair competition . EXPRESSION Nichols v. e. Holding: Assume that Pl’s play is altogether original.. the marriage of their children. 1930) (copyright protected expression had not been used) Facts: Plaintiff is author of a play. “Abie’s Irish Rose” which was properly copyrighted. It provides some protection to those who submit ideas to others (against the unauthorized use of those ideas) and some protection for those who receive idea submissions (against unwarranted claims by those who submitted them). not to indicate source or origin.5. Common law right to privacy – only apply to living persons 3. which was not a trademark use and thus there was no infringement. The source of the calendar is clearly indicated by the numerous references to Macmillan. Copyright Act § 102(b) (“In no case does copyright protection for an original work of authorship extend to any idea. The pictures do not indicate origin – no consumer would think that Ruth sponsored the calendar. the pictures used by Def. 3.com • • of misleading marks.1. But Congress made it clear it was only protecting expression.Downloaded From OutlineDepot. The defendant produced publicly a motion picture play. whether or not a registered trademark is involved. not ideas. 45 F. but their use does not violate the Act.5. When relying on copyright law. The amendment of copyright law in 1891 created a right to dramatize copyright-protected literary works.5 ACQUISITION OF RIGHTS: IDEAS AND OTHER PROPERTY 3. The court rejected the daughters’ claim that their registration of two specific pictures extended their rights to every photograph ever taken of him – a photograph of a human being is not inherently distinctive in the trademark sense of tending to indicate origin. See. are symbols under the Act. “The Cohens and the Kellys. Until that time the law provided no protection whatsoever against unauthorized dramatiziations of copyright-protected literary works.g. but at the same time the world should not be deprived of improvements or progress of the arts. Copyright law does NOT protect ideas. the birth of grandchildren and reconciliation 84 .1 IDEAS Legal history – law is ambivalent about ideas. but her copyright did not cover everything that might be drawn from her play. Society wants to reward men for their ingenuity and labor. it is necessary for a plaintiff to show that copyrightprotected expression was used by the defendant. Universal Pictures Corp.2d 119 (2d Cir. No possibility of confusion. no infringement. its content went to some extent into the public domain Reasoning: • one can be liable for stealing a plot (sequence of incident) – this case both stories involve a quarrel between a Jewish and Irish father.”).” which the plaintiff alleges was taken from it.§ 43(a) of the Lanham Act is violated by the use of any symbol as a false designation of origin or as an representation.
85 . n archaeologist-screenwriter asserts that Def. in the movie he plays the role of lowbrow comedy “A comedy based upon conflicts between Irish and Jews. 1982) Facts: Whether Def. Cal. is no more susceptible of copyright than the outline of Romeo and Juliet…. only a symbol for religious fanaticism and patriarchal pride.. have captured the total concept and feel. 543 F. Great White. not claiming recovery under law of plagiarism or infringement. 299 P.1. 3. Supp. But copyright protects only an author’s expression of an idea. 1985) Facts: Pl. which stems from the Jewish family’s wealthy inheritance. ostentatious and vulgar and obsessed with wealth o Irish fathers are even more different – in the play the Irish father is hardly a character. 1134 (C. one can also be liable for copying characters. submitted and offered to sell to Def. a synopsis containing public domain material and an abstract idea of making a photoplay dramatizing public facts.1. (pl. Paramount Pictures. 1956) Holding: Pl. Raiders of the Lost Ark infringes on copyright protected material contained in his screenplay Balck Rainbow.Downloaded From OutlineDepot. Court allowed the claim to go to a jury. The court finds “mood” and “feel” to be different. but is affectionate.2. Wilder. (2) characteristics an idea must have in order for it to be protected (assuming a contract or confidential relationship is found) 3. but imposed strict standards to infer an implied-contract-in-fact. It affords no protection to “scenes a faire” i. is substantially similar to Pl. v.’s movie. characters.D. Inc.5. in the movie he is tricky. into which the marriage of their children enters. if the copyrighted story has very developed unique characters o these are stock characters of decades old o Jewish fathers are different – in the play the father is obsessed with his religion.) The mere submission of an idea by a writer could not create the obligation to pay. Inc. Holding: Not substantially similar Court’s Reasoning: Test described as whether an average law observer would recognize the alleged copy as having been appropriated from the copyrighted work. Holding: Finds for Pl. they were based on public info.2d 2 (2nd Cir.’s movie.” Zambito v. the ideas were not unique.com • • o Differences – the play is about religious zealot (a Jewish father wants his son to only marry a Jewish woman) while the movie is about the hostility of a Jewish father towards his Irish neighbors.e. Def. Universal City Studios. as is the setting and characters. 788 F. warm and patriarchal. Film Ventures Int’l.5. settings or events which necessarily follow from a certain theme or plot situation.’s Jaws.2d 257 (Cal.1 IMPLIED CONTRACT Desny v.2 IDEA SUBMISSIONS Idea submission cases involve 2 types of legal issues: (1) circumstances that must exist in order for a contract or confidential relationship to exist between the idea-submitter and the person to whom it is submitted.
327) • Ms. must demonstrate that she clearly conditioned her offer upon an obligation to pay for it. Mann submitted her idea.com Program Material Release Form Post Desny motion picture and television production companies sought to protect themselves from idea submission claims by: • declining unsolicited scripts or treatments from unknown individuals • in limiting access to the receipt of submissions from established industry professionals like agent.. knowing the contract condition before knowing the ideas. 3d 628 (1982) (Fn 2 p. even if the Pl’s formulation is novel. together with a short narration of a number of scenes. of Appeal Affirmed. There was no record of a rejection letter of her work. which she registered with the Writers’ Guild of America to someone who she thought worked at Columbia Pictures. Court held that the “juxtaposition of the two families constitutes an idea. or its ideas if used by Columbia AND Columbia.Y) Takeaway: the abstract (and clichéd) nature of Pl. 86 . Columbia. but she expected to be paid if her work was used. The setting (middle class suburb). Lower court determined that there is “no substantial similarity” between Shampoo and Pl’s work in form and manner of expression. setting. Columbia Pictures. (2) To succeed on an implied-in-fact contract Pl. Mann v. There was evidence of independent prior creation by Columbia and no evidence that Pl’s work had even reached Columbia. especially in light of their derivative and clichéd nature.D. There was no character development. Pl may not be granted a monopoly in this idea. managers and entertainment attorneys • require the signing of a broad program material submission release or film script release in conjunction with any submission Example of a Program Material Release Form p. The majority rule is that novelty be a condition to an implied contract. Pl’s plot ideas were not sufficiently developed.’s ideas in the ‘shooting script’ the fact that the movie may strongly resemble Pl’s work does not afford her a cause of action. Pl’s claimed misappropriation of plot. format (comedy with prologue). Inc. which she thought was similar so she sued for breach of an implied-in-fact contract.Downloaded From OutlineDepot. NOT an expression. Robinson v. a brief description of six characters in a beauty salon setting. found for Def.” Only if they are protectible property (form or manner of expression) can she recover in quasi-contract. pace (up tempo) were too abstract. Since Def. Mann and granted JNOV to the Def. Ct.’s idea was decisive factor in finding against the Pl. total concept and feel (mood). Procedural History: Trial judge set aside jury verdict for Pl. Holding: Affirmed lower courts. 4 & 5 – absent distinctly novel or original content. 1995 (S. Court’s Reasoning: (1) Court characterized her work as “no more than a collection of ideas which was never developed in the form of a script or a story…abstract ideas are not literary property. Viacom Int’l. nor was her material found in Columbia’s records. characters. 325 • Paras.N. 1995 WL 417076. voluntarily accepted Pl’s disclosure and found them valuable and used them. only a clear case of copyright infringement would prevail if the submitted material was “substantially copied” by the production company. She never stated it. Four years after her submission Columbia released Shampoo. 128 Cal. did not use Pl. format and pace.
except the payment of money by the other party. Holding: Court found no implied contract – the mere submission of an idea by a writer could not create the obligation to pay if used.2 CONFIDENTIAL RELATIONSHIPS • Majority rule in idea-submission cases is the NY rule –idea must be novel to be protected • Minority rule is the Cal rule – non-novel ideas may be protected by contract too. Blaustein v. Holding: Producer idea may be protected by contract because he was someone from the industry and you would expect that he would only disclose the idea if he were promised payment for its use. a developer of an idea for a TV quiz show submitted his idea to an up and coming sportscaster.Downloaded From OutlineDepot. 200 F. Similarly the mere submission of one idea to another does not create a confidential relationship. principal and agent. so they must pay him. 1979) Facts: A novice. If a producer obligates himself to pay for the disclosure of an idea. to discuss it with anyone. He never expressly authorized Def. 2000) Takeaway: In an idea-submission case. Faris v. Here the producer disclosed his idea and the respondent used it – they did not compensate him with an engagement as producer. In a misappropriation/breach of contract case. if a confidential relationship exists between the parties. general novelty is required. in return for appellant’s act of disclosing his idea. 3d 161 (1970) Facts: Appellant producer had the idea of making a movie out of Shakespeare’s play Taming of the Shrew. idea-submitter described the show and gave the Def.1. the SoF is inapplicable. Evidence that there was a confidential relationship can be inferred from these factors: proof that the material submitted was protected by reason of sufficient novelty and elaboration. In unilateral contracts. or buyer and seller 87 . Burton. The subject matter of the idea need not be novel or concrete. novelty as to the defendant is sufficient. App. whether it is for protectible or unprotectible material. saying the show was his creation and literary property. conditioned upon subsequent use. 97 Cal. joint adventurers. he should be compelled to hold to his promise. Things fell through with his involvement and the movie was made by Columbia. He disclosed this idea to key players with the view towards a joint venture in which he would be made producer in the movie. Enberg. Play-by-Play Toys.5. 9 Cal. Statute of Frauds Issues: If trier of fact concludes there was an implied contract – an implied promise of payment.com Nadel v. Court’s Reasoning: The idea discloser has a right to recover damages from an idea recipient under an express or implied contract to pay for the idea in the event the recipient uses it after disclosure is discussed.2. 3d 309 (Cal. This is so even though the material to be purchased is abstract and unprotected. Sportscaster ended up making a show with a similar format. proof of a particular relationship such as partners. does not fall within the SoF dealing with contracts not to be performed within one year. This would be a unilateral contract. The Pl. Particular novelty – novelty as to the defendant General novelty – totally novel 3. where a contract has been fully performed by one party and nothing remains to be done.3d 368 (2nd Cir. a copy of the format.
invasion of her right of privacy...D. claiming series infringed her copyright in the literary property and the 1944 constituted a tying arrangement in violation of Sec. 1974) Facts: 1944 Margaret Landon entered into an agreement with Fox to sell motion pictures rights to her book Anna and the King of Siam. Goodis v. Procedural History: Trial court granted SJ for Def. they did so carefully and specifically. Clause (f) cedes “exclusive right to broadcast on TV “any of the motion picture versions. 8 F. 1 of Sherman Act.Downloaded From OutlineDepot. Pl. Rule: if the words are broad enough to cover the new use. it seems fair that the burden of framing and negotiating an exception should fall on the grantor. On the grounds that Fox acquired the original copyright on the condition that it acquired the copyright renewal right.5. United Artists Television..2d 397 (2nd Cir.2d 988 (2nd Cir.-appellant.2. 425 F. 450 (S. In 1972 Fox produced a mini-series which aired on CBS TV network. from maintaining a cause of action. Nat’l Broadcasting Comp.2 NEGOTIATED AGREEMENTS 3. they did not falsely attribute the authorship of the series to her. Inc.N. which she claims mutilated her book. 384 F. To Exhibit means to display or show by any method.. misappropriation of literary property and wrongful attribution to Landon of credit for the series.1 THE SCOPE OF ACQUIRED RIGHTS: BY CONTRACT Landon v. And several tort claims: defamation.5. Twentieth Century-Fox Film Corp.when the parties sought to reserve to Landon certain rights. Holding: court affirms. Supp. • Sherman Act – Pl’s claim is deficient – the exercise of actual coercion by the defendant (as opposed to mere presence of market power) is necessary element of claim • Damage to her privacy and reputation and literary property itself – Fox only said “based on” the work of the author.com Court fears the creation of monopolies of ideas and poses a barrier to the free communication of ideas Murray v. 3. Inc. Issue: Whether the 1944 agreement authorized Fox to produce and exhibit the series through CS. 1988) Facts: Pl.” Fox was granted the right to make an unlimited number of motion picture versions of the property without limitation as to length or place of first exhibition. The assignment of renewal right is unenforceable for lack of consideration.Y. 1970) 88 . no legally protectible interest if your idea is not novel Court’s Reasoning: merely a combination of two ideas which had been circulating in the industry for a number of years – (a) the family situation comedy and (b) casting of black actors in nonstereotypical roles. because lack of novelty precludes Pl. claims breach of implied contract because four years prior to the premier of the Cosby Show he proposed to NBC a new idea for a half-hour sitcom starring Bill Cosby as a loving black father in a show about a middle-class black family. Mere fact that idea had not been put into production until now does not mean the idea itself is novel. Holding: • Infringement of copyright .
Beginning in 1938 TV episodes were licensed to Sony. no general grant of rights in technologies yet to be developed. Lafferty. which transferred the images from the television film negatives to videotape.5. in this case Lafferty. the license is limited to a particular grant of rights based on the general tenor o 2. which is a professional investment firm. without specific mention that it ends.e.2. Production of 104 TV episodes was completed in 1982.2. television viewing and videocassette viewing are not coextensive terms – you don’t have to watch a videocassette on the TV o 3. In 1979 a Revised License was excecuted to grant Milktrain Productions and Lafferty investment firm the right to produce and distribute animated Curious George films for television viewing. Court’s Reasoning: Court accepts finding of fact that relevant video technology “was not in existence at the time the rights” were granted under the agreement in 1979. i. THE SCOPE OF ACQUIRED RIGHTS: LEGALLY IMPOSED LIMITATIONS There are certain provisions of copyright law which prevent copyright owners from conveying everything that others might be willing to acquire 89 . 990 F. ambiguities in the drafting instrument are construed against the party drafting. when he may desire to create sequels. • Preferred method of dealing with “new uses” – licensee may properly pursue uses which are reasonably within the medium described in the license – courts assume that the possibility of nonspecific ‘new uses’ was foreseeable – so if you write your contract broadly the burden of framing and negotiating an exception on the grantor of the licensed rights • Alternative method – only such uses that fall within the unambiguous core meaning of the term – rights not expressly granted are reserved – supposed to prevent licensees from reaping the windfall of new uses – especially relevant when the licensee has more bargaining power • This case: o 1. which was more sophisticated 3. sequels. Rey. It would be rash to hold on SJ that the sale of right sin one of an author’s works ends. Holding: Appellate Court reversed trial court’s decision to grant summary judgment for defendants. Whether the “right to make ‘additions in…said writings’ and in the characters and plot of the novel should go to a jury. the author’s exclusive ownership of the valuable characters he created in that one work. Uphold lower court’s decision of breach of contract in favor of Pl. Holding: Revised License grant of rights to the 104 film episodes for television viewing did not encompass the right to distribute the films in cassette form.com Facts: Warner Bros acquired exclusive motion picture rights to the novel Dark Passage under a contract which contained add’l specially negotiated clauses to cover radio and tv broadcast rights.. In cases where parties lacked specific intent. the surrounding circumstances and trade usage. Similar to Landon. 1993) Facts: Margaret Rey owns the copyright to the Curious George children’s books. court tries to discern general intent form the language of the license. Warner brother assigned its contract rights to UA which produced a tv film series based on the book. But there are policy reasons too. The contract does not explicitly mention the right to make subsequent stores employing the same character. the license was drafted by Lafferty. Rey v.2d 1379 (1st Cir.Downloaded From OutlineDepot.
Before the expiration of the original copyright Black died. Ben Black (deceased) coauthored a song with Charles Daniels.C. Daniels. 362 U. as executor of the estate.S. Congress intended to treat renewal rights as expectancies until the renewal period arrives.com • • • Compulsory Mechanical License provision of Copyright Act of 1976 o Prevents songwriters and music publishers from granting exclusive licenses to recording artists or record companies. not just physical records There cannot be a monopoly on the production of records – the creator of the musical work must grant a license upon request to any person who proposes to make and distribute phonorecords of the work at the royalty rate set by law Termination of Transfers provision of Copyright Act of 1976 o Permit authors (or lawful heirs) to terminate assignments and licenses after a period of time. set by Congress. Cir. 1981) Statutory scheme. 662 F. 373 (1960) Facts: Petitioner. The probate court decreed distribution of the renewal copyright to the residuary legatees. When the renewal period arrives the renewal rights pass to one of the four classes listed in the statute (author. v. another music publisher for infringement of petitioner’s rights in the renewal copyright of a song.2d 1 (D. of Appeals affirmed. Black assigned to petitioner his renewal rights in this song. Procedural History: Trial Ct granted SJ for Respondent. Charles N. Ct. his executor is entitled to the renewal rights. sued respondent. at any price o If agreement between a music publisher and record company purports to grant to the record company exclusive recording or mechanical rights to a song that clause would be unenforceable o Recording Industry Ass’n of America v. Copyright Royalty Tribunal. Issue: Whether by statute the renewal rights accrue to the executor in spite of a prior assignment by his testator. 90 . One of his brothers. places a ceiling on the price copyright owners can charge for use of their songs under negotiate contracts Includes digital phonorecord delivery too. Prior to the expiration of the 28-year term. even though the author previously assigned his renewal rights to another party. Inc. even if they had expressly agreed by contract not to do so o You have five years to terminate starting from 35 years after the execution of e grant o Must serve advance notice in writing o Terminated grants revert to the authors except derivative work may continue to be utilized under the terms of the grant after its termination o Further grant is valid only if it is made after the effective date of termination Renewal provisions of Copyright Act of 1909 o Invalidate agreements which purport to transfer rights to be exercised during the copyright renewal term o Miller Music Corp. a music publisher. Holding: When the author dies before the renewal period arrives. renewed the copyright for a further term of 28 years.Downloaded From OutlineDepot.
Respondent sued. Issue: Whether the owner of the derivative work (petitioner) infringed the rights of the successor owner of the pre-existing work (respondent) by continued distribution and publication of the derivative work during the renewal term of the pre-existing work. Court’s reasoning: Author holds a bundle of exclusive rights – among them the right to copy and the right to incorporate the work into derivative works. and next of kin). 495 U. “It Had to Be Murder” assigned the rights to Petitioner to make the movie “Rear Window. 207 (1990) Facts: Author of a story. Assignees of renewal rights take the risk that rights acquired may never vest in their assignors (if they die). Abend. 91 .S. o Stewart v.” He also agreed to renew the copyrights in the stories at the appropriate time and assign the same movie rights for the renewal term. The movie was then broadcast on TV and re-released in a variety of media. His executor of the estate renewed the copyright and assigned to respondent.com widow/ers. Author died before the renewal period commenced. children. executors. This author died before the renewal period. Holding: Yes – hold for respondent.Downloaded From OutlineDepot. so the Petitioner holds nothing. not even the derivative right. owner of pre-existing work. Petitioner was a purchaser of a contingent interest.
S. a court’s decision to exercise personal jurisdiction over a D depends on how interactive D’s website is ii. is infringing on P’s rights in its trademark “The Blue Note. Zippo Dot Com.com XI. unlike the facts in Bensusan. alleges that D. the Internet user specifically targeted the product to the forum state Zippo Manufacturing Co. is sufficient to vest the court w/personal jurisdiction over D pursuant to NY’s long-arm statute and the DP Clause of U. i.Downloaded From OutlineDepot. courts must determine whether businesses and individuals are subject to personal jurisdiction wherever their website may be accessed. PART I A. promoting. a CA corporation with principal place of business in CA. Inc. v. files trademark claims against D. or selling the product in NY. but one based on vastly different facts.” Issue: Whether the existence of a website. 904) i. Constitution? Analysis: Given that courts have held that an offering for sale of even one copy of an infringing product in NY—even if no sale results—is sufficient to vest a court w/personal jurisdiction over the alleged infringer. v. King did nothing to purposefully avail himself of the benefits of NY Court cited another case—CompuServe Inc. Personal Jurisdiction With the increased use of the Internet. Patterson—to illustrate a decision that reached a different result. we must determine whether the creation of a website in Missouri with a telephone number to order the allegedly infringing product constitutes an offer to sell the product in NY. a PA corporation with principal place of business in PA. Holding: There is simply no allegation or proof that any infringing goods were shipped into NY or that any other infringing activity was directed at NY or caused by King to occur here. THE INTERNET AND THE DIGITAL WORLD. the owner of a small Missouri nightclub. (p. w/out anything more. v. P manufactures “Zippo” tobacco 92 . King Facts: P. a NY corporation. courts are more likely to find personal jurisdiction if D has made a sufficient number of non-Internet contacts w/the forum state Bensusan Restaurant Corp. i. (Internet domain dispute) Facts: P. The mere fact that a person can gain information on the allegedly infringing product is NOT the equivalent of a person advertising.
and has been extended to non-speech communication as well. Although only 2% of D’s subscribers are PA residents. (p. and to assign them passwords. Immunity Under §230 Of The Communications Decency Act i. and does not begin to run again each time the website is updated—“single publication rule. B. Section 230(c)(1) of the Communications Decency Act of 1996: “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.net” and “zipponews. “zippo. Defamation Bynog v. v. Section 230(c)(1) immunity has been invoked to bar defamation claims against Internet Service Providers (ISPs) and private individuals. even a single contact with the forum state can be sufficient—the test has always focused on the “nature and quality” of the contacts w/the forum and not the quantity of those contacts. 93 .com lighters.” ii. Churchill v. State of NJ The period of limitation for a defamation claim based on items posted on a website begins to run when the items are first posted on the website. The jury found in favor of the pharmacy on the merits of its claim that it was defamed by the juxtaposition of a screen shot of the pharmacy’s website w/a side bar suggesting that certain Internet pharmacies should be avoided by consumers. and D operates a website/online news service with domain names “zippo.” D has 3. and has entered into agreements with 7 Internet access providers in PA to permit their subscribers to access the site.com”. absent any extraordinary circumstances. Internet pharmacy that prevailed on a defamation claim but was awarded no monetary damages is NOT entitled to a new trial on the grounds of error in the instructions to the jury. Issue: Whether D’s conducting of electronic commerce w/PA residents constitutes the purposeful availment of doing business PA sufficient to vest the court w/personal jurisdiction? Analysis: D repeatedly and consciously chose to process PA residents’ applications. (p. Barret v. 912) Holding: The Court may appropriately exercise personal jurisdiction over D. no injunction should be issued in a defamation case.com. The NY Times Co.” 1.000 subscribers in PA. Negrete The fact that Ds in a malicious prosecution action made efforts to widely publish allegedly false allegations about P on the Internet supports a finding that Ds acted w/malice in filing defamation claims against him. 1st Amendment precludes the issuance of a preliminary injunction against the posting of allegedly defamatory statements by a former employee on her website and blog. SL Green Realty Corp. The court noted 2nd Circuit precedent that.Downloaded From OutlineDepot. 914) Franklin Prescriptions Inc.
S. AOL.” ii. 2. “Indecent” Material i. Barnes v. v. Supreme Court held that the Child Pornography Prevention Act of 1996 (CPPA). Grace v. the court rejected P’s argument that Section 230 immunizes only publishers of defamatory content. i. Child Pornography Ashcroft v. C. Supreme Court affirmed a preliminary injunction against the enforcement of the Act. eBay. CrystalTech Web Hosting Citing the leading case of Zeran v. leaving the ISP open to liability as a distributor of the statements that it “knew or had reason to know” were defamatory.e. 94 . Rosenthal CA Supreme Court has agreed to review this controversial decision. w/knowledge or the reason to know that it is false. Earthlink. Yahoo!. the U. if the site’s publisher “knew or had reason to know” of the alleged defamation and refused to remove the posting. Inc. Associated Bank-Corp. which extended the federal prohibition against child pornography to sexually explicit images that “appear” to depict minors but are produced w/out using any real children. not to their civil remedies sections.. In June 2004. Questions About The Scope of Section 230 i. Net Censorship 1.com Doe v. Bates Express exception from immunity in Section 230 applies only to criminal prosecutions under federal criminal statutes. where the appeals court held that Section 230 does not restrict distributor liability under the common law. A service provider is entitled to immunity under Section 230(e) for breach of a promise to remove defamatory online profiles posted by a third party impersonating P. is an unconstitutional abridgement of free speech. the dissemination of a defamatory statement made by another party. An ISP cannot be held liable for erroneously identifying a legitimate bank website as a fraudulent site where the ISP relied upon a list of “phishing” sites provided in anti-phishing software licensed from a third party. Austin v. Free Speech Coalition U. and P’s defamation claim was not barred by the statute. Inc. Inc. An online site is not entitled to immunity under Section 230 for a user’s alleged defamation of another user in a “feedback” posting. 2.Downloaded From OutlineDepot. The Child Online Protection Act (COPA) prohibits commercial websites from making available to minors material that is “harmful to minors. some cases have ruled that immunity does not extend to distributor liability.S. Barrett v.
they would face potential liability each time they receive notice of a potentially defamatory statement—from any party. concerning any message. AOL. Copyright Infringement i.com iii.S. AOL was a distributor. Google. Inc. Facts: P brings claim against D for its allegedly unreasonable delay in removing defamatory messages posted by an unidentified third party on an AOL bulletin board. Bidder’s Edge. Inc. Control of Access: Framing and Linking i. ii. The Court afforded the highest level of 1st Amendment protection to Internet speech. To impose liability here would have serious potential to chill free speech. D. robot. to the 1996 World Intellectual Property Organization (WIPO) treaties and expanded the scope of the performance right in sound recordings) a. Digital Millennium Copyright Act (bound U. P moved for a preliminary injunction to enjoin D from accessing eBay’s computer systems by use of any automated querying program w/out eBay’s written authorization. establishes potential safe harbor for an ISP when copyright infringement is committed by a third party through the use of the ISP’s facilities 95 . Government was not entitled to obtain any user search requests from Google. ACLU In July 1997. Analysis: If computer service providers were subject to distributor liability.Downloaded From OutlineDepot.S. or web crawler w/out written authorization from P. the District Court in Gonzales v. Liability Of Internet Service Providers Zeran v. P argues that Section 230 immunity does not apply to liability for interactive computer service providers (like AOL) who possess defamatory material posted through their services. the U. In March 2006. v. Framing allows visitors of website A to link to website B while particular info (usually ads provided by A) remains as a frame around B. Court enjoined D pending trial of this matter from using any automated query program. Supreme Court rules that the challenged provisions of the Communications Decency Act (CDA) that regulate transmissions and display of “indecent” and “patently offensive” materials are unconstitutional. Framing can cause confusion as to the source of the information and can allow the framing website to generate ad revenues solely from the efforts of a third party. the U.S. eBay. we will not assume that Congress intended to recognize liability here. Holding: Because the probable effects of distributor liability on the vigor of Internet speech and on service provider self-regulation are directly contrary to 230’s statutory purposes. ruled that b/c of the potential for the loss of user trust in the privacy of their search requests. F. and that the 230 immunity eliminates only publisher liability—here. E. Inc. Inc. Reno v.
as it was only a conduit. Holding: Following the reasoning in the Verizon case. The RIAA served two subpoenas upon Verizon Internet Services in order to discover the names of two Verizon subscribers who appeared to be trading large numbers of . Inc. Issue: Whether the Digital Millennium Copyright Act applies to an ISP acting only as a conduit for data transferred between two internet users. Verizon refused to comply w/the subpoenas. as opposed to an ISP that stored infringing material. 96 . sets up a “notice and takedown” procedure under which copyright proprietors can notify an ISP of the presence of infringing material and demand its removal Recording Industry Association of America. Inc.mp3 files of copyrighted music via peer-to-peer (P2P) file sharing programs. Inc. Facts: The RIAA used the subpoena provision of the Digital Millennium Copyright Act to identify internet users the RIAA believed were infringing the copyrights of its members. In re Charter Communications. The ISP argued that the DMCA did not apply to it. Facts: Charter sought to squash a subpoena requiring it to provide subscriber information linked to certain IP addresses known to have transmitted infringing files. the 8th Circuit held that the subpoena was not properly issued b/c Charter acted solely as a conduit.com b. Verizon Internet Services. (RIAA) v.Downloaded From OutlineDepot. such as persons sharing P2P files? Holding: A subpoena may be issued only to an ISP engaged in storing on its servers material that is infringing or the subject of infringing activity.
Diamond Multimedia Systems. (SDNY 2000) o Facts: MP3. v. o Defendant argues Fair Use Issue: Is the MP3. Inc. THE INTERNET AND THE DIGITAL WORLD. and then have access to the MP3s from any location.MP3. MP3. Defendant is “replaying for the subscribers coverted versions of the recordings it copied.com XII.Com. 1999): • Reached a similar outcome to the Betamax cases which held that VCRs were not per se instruments of copyright infringement.” o 97 . (9th Cir.” Point to legislative history which protects the right to make private recordings of copyrighted works o • • • UMG Recordings. Inc. MP3s were the first legal battleground RIAA v.2 The Impact of Internet Specific Technologies: • Overview: o There has been explosive growth in the sale of letigimate digital media. from P’s copyrighted CDs.com service allowed under the Fair Use exception of the Copyright Act? Holding: Defendant has infringed on plaintiff’s copyrights.25 million individuals visit illegal file sharing sites each month.com which allowed subscribers to “store customize and listen” to the recording on their CDs from any place. more than 6.com launched a service called My.Downloaded From OutlineDepot. Inc.5. PART II 11. without authorization. Defendant purchased tens of thousands of CDs and then the user could load his CD. Said the Rio device was “consistent with the AHRA’s main purpose—the facilitation of personal use. However. Grant defendants motion for partial summary judgment.
in this case it is very clear that they had direct knowledge as to the infringement at issue. 3) The amount and substantiality of the portion used: Defendant is copying the WHOLE of the work. Napster. 4) The effect of the use upon the potential market for or value of the copyrighted work: Just because the plaintiffs have not yet pursued this market. • A&M Records.Downloaded From OutlineDepot. Although it is possible that Napster could have had a system where they did not know. System permits peer to peer sharing. Find them guilty of contributory copyright infringement. as opposed to adding any additional value. Inc. Reasoning: Court summarily rejects Napster’s Fair Use defense TWO PART TEST: Liability for Contributory Copyright Infringement: Court finds that Napster would be liable because it 1) knowingly encourages and 2) assists the infringement of P’s copyrights. 2001) o Facts: Napster operates a system which permits the transmission and retention of sound recordings using digital technology.com o Reasoning: Court addresses each of the four factors of Fair Use and REJECTS Defendant’s argument: 1) Purpose of character of the use if for a commercial or nonprofit educational use: Court says the work is not transformative. Material Contribution: Without Napster’s system users could not find and download the music they want with the ease of which defendant boasts. 2) The nature of the copyrighted work: The work being copied is at the core of the type of material we seek to protect. o o • 98 . (9th Cir. doesn’t mean that the defendant can usurp this market. v. It is merely repackaging the old work. Inc. • Knowledge: Court finds that “knew or had reason to know” of direct infringement. Holding: Enjoin Napster.
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Liability for Vicarious Copyright Infringement: Vicarious liability is an outgrowth of respondeat superior. Find that they are vicariously liable. • • Napster has a direct financial benefit in the infringement Napster has the right to control access to the system. “Turning a blind eye to detectable acts of infringement for the sake of profit gives rise to liability.”
Napster Defenses: • Actions are protected by Audio Home Recording Act of 1992: Court finds that act does not cover downloading of MP3s onto hard drives. S Digital Millenium Copyright Act limits liability: There are serious doubts as to whether defendant will be able to get shelter here. Say that the balance of factors however tips in plaintiffs favor. Court rejects Napsters affirmative defenses as well
In Re: Aimster Copyright Litigation (7th Cir. 2003) o o o o Facts: Aimster provides software than enables peer to peer file sharing. Issue: Is Aimster guilty as a contributory infringer? Holding: Yes. Reasoning: “Firms that facilitate their ifingrement, even if they are not themselves infringers because they are not making opies of the music that is shared, may be liable to the copyright owners as contributory infringers.” Sony Decision: Just because a product can have an infringing use doesn’t mean that a party is a contributory infringer. Court applies a cost-benefit analysis and finds that Aimster should be enjoined. Use a three part balancing test: • 1) Percentage of non-infringing to infringing use, 2) whether the defendant “invited” infringement (e.g. in its
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documentation and tutorials), and 3) whether defendant took steps to eliminate infringing uses. • Says that its failure to take efforts to root out infringement is further evidence that it was a contributory infringer
MGM v. Grokstrer (US 2005) o Facts: Defendants operate a peer to peer file sharing service. 90% of the material is copyrighted work. The system (unlike Napster) is decentralized. They do not control the “supernodes.” Parties crossmoved for SJ. COA: Finds for Grokster. • A party is liable as a contributory infringer when it had knowledge of direct infringement and materially contributed to the infringement. Said that under Sony had to have knowoeldge of of specific instances of infringement and had failed to act. COA therefore finds that based on the Grokster architecture they did not know, therefore they were not liable. Also note that there is no vicarious liability because they had no ability to supervise, and no duty to police.
o Holding: One who distributes a device with the object of promoting its use to infringe copyright, as shown by a clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. Reasoning: Defendant was not passive, but rather took active steps to encourage and facilitate downloading. Tension between encouraging technological innovation and protecting artists. Yet in this case the infringement is too strong. One infringes contributory by intentionally inducing or encouraging direct infringement. Real question is how do we reconcile Sony which permits commercial products so long as they have capability for noninfringing uses? Say that reliance on Sony at all is not required.
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Court says that they can look at the intent of Grokster in determining whether they are liable. Use theory of inducement. • “One who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. o o Need intent And actual infringement
“Therefore, the message from the majority seems to be that under the inducement theory you must show by the defendant’s own actions and statements that his unlawful purpose disqualifies him from claiming the protection under Sony. That is, clear evidence of intentional inducement trumps, even in situations where the technology may have substantial noninfringing uses.” • http://www.philiplarson.com/blog/?p=5
o Concurrence: Ginsberg Ginsburg effectively argued for the Seventh Circuit’s approach to determining the knowledge component that would require the court’s to employ a balancing test and would give them more discretion to protect copyright holders. • http://www.philiplarson.com/blog/?p=5
Ginsburg argued for a balancing test more in line with Posner’s recommended balancing test in the Seventh Circuit’s Aimster decision. Ginsburg stated that determining whether there were “substantial” non-infringing uses could only be done by comparing the number or percentage of infringing use to the non-infringing uses.
Concurrence: Breyer: Breyer basically attacked Ginsburg’s opinion as not doing enough to protect technological innovation. He argued for something closer to the Ninth Circuit’s narrower test.
eventually most were swallowed up by a few conglomerates Potentially negative consequences for authors: • Publishers are generally publicly held and must answer to risk-averse shareholders • Less one-on-one interaction between editors and authors Only TV commands more total revenue than print publishing Leading publishers in annual sales: • • 102 . http://www. Amazon Large portion of the raw material for other media is derived from print sources The Business of Literary Publishing • • Publishers began as family businesses.philiplarson.Downloaded From OutlineDepot.philiplarson. • • Breyer argued that Grokster passes the Sony test because it is “capable of” substantial non-infringing uses.com/blog/?p=5 XIII. Breyer thought the Ninth Circuit got it right when it granted summary judgment on the issue of whether Grokster’s product was capable of substantial noninfringing uses.may be going digital via Google. LITERARY PUBLISHING Introduction • • Evolving market.com • http://www.com/blog/?p=5 Therefore.
territorial areas.rare for author to secure approval over translations • EU requires only one license now Merchandise Licensing: • Merchandise licensing agreement must define precisely for what purposes the license is granted in terms of what products can be produced.3 billion • HarperCollins.1 billion • Simon & Schuster. books based on movies.$1. 86. movies based on books.Downloaded From OutlineDepot. Pearson PLC. but largely an unknown • Has been successful so far.1 billion worldwide • Penguin Group. what degree of quality control exists.$2.000 small/self publishers Book sellers have become conglomerates as well: • Barnes & Noble. Time Warner) operate in many areas of the ent industry. etc… There are six large publishers.$415 million Many of the major conglomerates (Bertlesmann. 300-400 medium sized.$690 million • AOL/Time Warner. types of marketing Motion Picture/Television Licensing: • While this is often covered in the original contract.Steven King novella released exclusively online was hugely successful • He then began sell pay-as-you-go subscription chapters of another book The Scope of Literary Publishing Contracts • • • • • First contract b/t publisher and author is crucial in determining who has control over the process of adapting an original work into any other permutations • But several other contracts are often necessary before the work reaches ultimate saturation in other markets Paperback Licensing: • Hardcover publisher usually obtains paperback exploitation rights in the original contract • Often means sublicensing paperback rights to another company • The most established writers sometimes arrange for a different company to do the paperback at the outset Foreign Licensing: • Often disposed of separately than US/Canada rights • Lower royalty rates • Translation and honorable adaptation issues.$1. how long license runs.com • • • • Random House. many films have been based upon novels acquired prior to their publication • Very much in authors best interest to secure these rights separately from publisher 103 .pollination • Books on tape. Borders-Waldenbooks (owned by Kmart) and Crown Books account for approx 50% of US retail book sales • Online hard-copy distribution is majorly eating into traditional bookstores • Online publishing is a hot issue.makes for easier cross.
plus a percentage of proceeds • Money greatly depends on the stature of the author/book and whether it is written originally for the screen • Option contract and license must specify degree of creative control retained by publisher and author.Literary Agent • Authors who write for the mass market almost always require a literary agent • Generally.com • • • Usually producers purchase an option on a manuscript.approximately $50k Gold denies that he should repay the advances and maintains that he is owed the $90k balance of the advance. with a few renewal periods and further payment if the option is exercised. book clubs. rejects 3rd manuscript and terminates contract RH seeks to recover from Gold the amount of all advances paid to Gold in excess of his royalties. 567 Random House v.want to align a specific strategy to maximize “buzz” Author. etc… Delivery of Satisfactory Manuscript • This section assigns ultimate creative control over the work. agent promises good faith duty to market the author plus fiduciary duty • Often a young author’s big opportunity may lie in getting a good agent • See text for model Literary Agency contract Publisher-Author Agreement in Detail • • • Obviously these vary greatly with different kinds of books (law school texts don’t require motion picture rights. worldwide perpetual rights • Author will want to individually negotiate each specific right. foreign language. which are published to little acclaim/profit RH. rights and duties of publisher to edit • Lots of litigation regarding what is “satisfactory in form and content” • Author’s guild prefers its own “satisfactory manuscript clause”. merchandising. textbooks. and not assume any of them naturally go to publisher • Higher quality paperbacks. or at least the remaining $15k for the two pre-existing books 104 .Downloaded From OutlineDepot. periodicals. aware that another installment is due soon (Gold has received 60k so far). sequel/spin-off rights. anthologies. time limits. Gold • • • • • • RH and Gold entered into an agreement for publication of four literary works with an option to cancel the fourth $150k advance due in ten installments Gold delivers two satisfactory manuscripts. abridgements and condensations. this covers mostly audiobooks and other “new media”. as well as delivery date. mass market reprints. royalty/fee arrangements Other Media Licensing • In our text.excerpted p. online distribution. theater/motion picture/TV. for example) Rights Granted and Assigned: • Publisher will want exclusive. reprint.
the portion of advances outstanding for the two published books • So in the end. Curtis • • • • • Doubleday rejects a Curtis manuscript as “unsatisfactory” • Each party sues for breach of contract • Doubleday seeks recovery of advance • Curtis counterclaims for anticipated earnings Curtis was to receive $100k advance charged against future royalties • One half paid upon signing of contract. common sense.Downloaded From OutlineDepot.Compete Clause • • Fairly standard clause that requires author not to publish a future book that is based on the book under contract • These provisions can be quite sweeping and detrimental to author Author’s Guild suggests that theses clauses may be unenforceable and may violate antitrust laws • AG suggests that in the event the clause cannot be cut. so Doubleday cancels both contracts Court holds that a publisher may terminate a standard publishing contract at its discretion so long as it is done in good faith. one for each book It would “do violence to the contract. as well as their offer of providing a “novel doctor” Non. with a short time period • Authors of textbooks should be particularly concerned 105 .com • • • • Gold argues that RH acted in bad faith by terminating the contract because of profitability. and so long as the unsatisfactory nature of the manuscript is not due to the publisher’s bad faith • Curtis refused good faith assistance from Doubleday in editing. because the manuscript was in fact publishable • Ct refuses to say that profitability cannot be a factor in assessing whether a manuscript is “in content and form satisfactory to the publisher” Ct holds that there were four separate contracts. so he owes $30k to RH • RH is still liable for $45k. RH pays Gold $15k (45-30 = 15) Doubleday & Company v. it should be tightened. and industry practice” to hold that Gold forfeited all advances because RH chose not to publish the 3rd book Thus: • Gold received $60k for four books. balance due on “acceptance of complete satisfactory manuscript” • Contract states that failure to comply with the satisfaction clause granted Doubleday the right to terminate and require Curtis to return any advances Doubleday signs lucrative advance agreement for paperback version with NAL contingent on Doubleday publishing Curtis’ book by a certain date Novel is too poor for publication.
com Publication Clauses • • • Exclusive right to publish for Publisher Timetable for publication for hardcover and paperback editions Author will seek/publisher will resist specific recitation of duties on the part of Publisher to advertise and market the book • Publisher has implied duty to market.Downloaded From OutlineDepot. often in return for their advance being repaid Copyright • • Most publishers agree to allow copyright to remain with author Contract should be precise both as to copyright ownership and the rights to license that flow from ownership Royalties and Other Payments • • See top of page 604 for detailed royalty tendencies Determined almost entirely by publisher. etc… Authors should attempt to narrow the coverage Future Revisions • • • Author will want as much input as possible. invasions of privacy. should be carefully negotiated Publisher should re-retain rights if author is unable or unwilling to assist Option for Next Book • • • Must be crafted carefully so as to not simply constitute an “agreement to agree” Author’s Guild despises next-book option clauses for publishers.also largely dependant on caliber of author Warranties and Indemnities • • Attempt to shift burden to the author if suit is brought by a third party claiming copyright violations. libel. author will reclaim the rights to it.high potential for unfair provisions At most. a publishers should be entitled to a right of first negotiation or a right of first refusal • Sets an objective market value on the author’s present worth while maintaining loyalty to publisher • 106 . but never anything more explicit than the “first push” If the book isn’t published in a specified period of time. while publisher will fear that this gives author veto power Once again.
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Model Literary Publishing Agreement • • Book provides a model contract that contains mostly provisions already summarized abovepages 607- 621 See also model contract w/ commentary provided by Professor Hertz
The Impact of Custom and Usage • Many cases arise from authors simply signing what’s placed before them and not thinking about the future Geisel v. Poynter Products • • • • • Dr. Seuss entered publishing agreement w/ Liberty Magazine Years later, he sues to prevent the creation of action figures based on the cartoons printed in Liberty Since contract was inconclusive, court looks to custom and usage Court is un-persuaded by Dr. Seuss’s star witness, a notable book publisher Hold that the custom in 1932 was for magazines to hold copyrights to all that was published within Stein and Day, Inc v. Morgan • • • • • • Morgan agrees to write two books for Stein & Day, successfully writes one Contract has a typical “complete and satisfactory” clause Morgan submits a purportedly complete copy of the second book, which is unsatisfactory to S&D • No other publishing company would accept the manuscript either S&D sues to recoup advance $ allotted for the 2nd book • No portion of the advance was allocated to either book in particular Author raises uncontradicted testimony that industry custom is to allow author to keep the advance However, ct holds that custom cannot overcome express language of contract • Contract specifically stated that if the manuscript was unsatisfactory, publisher was entitled to recoup advance Tasini v. New York Times • • Freelance writers sue NYT for putting their articles on electronic databases available to the public Ps were not employed by the Times, and did not write works-for-hire • They held the copyrights in their articles 107
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Crux of dispute is whether databases may be considered a “revision” of the individual periodical issues from which the articles were taken • Publishers would benefit from this definition • Ct holds that they are not revisions Ct holds that publishers of collective works are not permitted to include individually copyrighted articles w/out receiving a license or other express transfer of rights from the author The “Next Book” Option Pinnacle Books v. Harlequin Enterprises
Pinnacle accuses Harlequin of interfering with P’s contractual relationship with author Pendleton • They claim they induced him to break his contract with Pendleton in order to publish his profitable series with Harlequin Pendleton had been in mid-negotiation with Pinnacle when he decided to move to Harlequin The original contract assigned the option to Pinnacle, and stated that both parties would give their “best effort” to renew • Harlequin’s argument that this is nothing more than an “agreement to agree” is shot down- ct believes this to be a good faith negotiation clause However, ct also holds that the “best effort” clause is unenforceable because it is too vague • The term must be defined specifically- ct is unwilling to insert their definitions into a pre-existing contract
XIV. CONTRACT PERFORMANCE AND EXPLOITATION OBLIGATIONS
-General Rule-degree of subjectivity with which delivery standards are infused increases in more or less direct proportion to the relative level of investment. The greater the investment (relative to industry norms), the more subjective the company will be in its delivery standards.
Delivery Clauses in Different Areas of Entertainment
Book Publishing -Manuscript must be “satisfactory in form and content” in publisher’s eyes -Advance is repayable if it is unsatisfactory Music Publishing -standard is 15 100% newly-written compositions (or equivalent in partly-written compositions) each Contract year -notice of completion of delivery with song titles, co-writers, etc. -Delivery commitment can be based on a number of songs OR a number of songs embodied on a specified number of albums
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Recorded Music -label has right to reject an album presented for delivery if it is “offensive to reasonable standards of public taste or in violation of rights of others AND if it is technically unsatisfactory Film
1) Physical Delivery-these are the technical requirements-length, film quality, etc. 2) Legal Delivery-Chain of title, errors and omissions insurance, MPAA rating, cast/crew
agreements, etc. OBLIGATIONS OF COMPANY -not usually a fiduciary duty to talent, but can be legally deemed so with particularly disloyal and egregious behavior Rodgers v. Roulette Records -standard recording contract at issue -Plaintiff asserts that he has been paid insufficient royalties, label failed to report foreign sales, underrepresented domestic sales, ascribed too low a royalty rate, etc. 1) Claim of False Royalty Statements -Court-plaintiff claims that he DID NOT discover the alleged fraud until 1984 (27 years after contract signed) -Plaintiff contradicts himself-says that “he did not have any expectation that monies would be forthcoming as he was not aware of ANY EXPLOITATION by Roulette or its licensees of my songs -BUT THEN SAYS that his songs “sold millions of copies at the time of their release and have continued to sell through the present time -Court-It is inconceivable that plaintiff or his agents did not notice that his songs were being released on records between 1960 and 1984 -Reliance on statements suspected of being false CANNOT be the due diligence required of plaintiffHE MUST INQUIRE FURTHER! 2) Claims of Fraud -Defendant must produce something more than defendant’s FAILURE TO PERFORM -all he alleges is that defendant promised to pay royalties and provide accountings while secretly never intending to do so-INSUFFICIENT AS A MATTER OF LAW 3) Breach of Contract-not Fraud -alleged fraud here is simply an alleged breach of contract -Fraud is wrong avenue to go down here 4) Right to Accounting -Action in equity -Plaintiff must prove the existence of a fiduciary relationship with defendant -Here, only a contractual relationship existed -Receipt of monies to be passed onto plaintiff as royalties did not create fiduciary relationship because defendants did not receive any property specifically earmarked as plaintiff’s property 5) Negotiation of Unconscionably Low Royalty Rates
however. the defendant is perhaps at legal liberty to breach and pay damages. Riva Music Ltd. but if the conduct goes further and is intended to inflict injury is not immune from tort liability. -A publisher who breaches his implied contract obligation to exploit an author's work with no motive other than to injure the author. but a breach of fiduciary duty because Disney “had exclusive control over the books. and information concerning the exploitation and revenues. Absent this factor. and likewise precludes the idea of profit or advantage resulting from the dealings of the parties and the person in whom the confidence is reposed 110 . fiduciary duties. if a contract establishes that fair dealing was required between the parties. Mellencamp received a percentage of royalties earned from exploitation of his music Mellencamp’s claims -Riva companies became fiduciaries by virtue of publishing agreements 1) breached fiduciary duty by failing to actively promote his songs and use best efforts to obtain all $$$ due from 3rd parties 2) Breached fiduciary duty by underreporting royalties and not rendering timely accounting statements Riva Music’s response 1) There is no fiduciary duty owed by music publisher to author under publishing agreement 2) Royalty claim does not specify what part of agreement was breached and who the parties are Court-it is possible for a fiduciary relationship to exist between an author and a publisher -Typically. Wolf v. express or implied obligations assumed by a publisher in an exclusive licensing contract are not. a publisher’s obligation to promote an author’s work is one founded in contract rather than on trust principles -However. is liable for prima facie tort -“Trust elements” in a publisher-author relationship come into play when the publisher tolerates infringing conduct.Downloaded From OutlineDepot. Superior Court -Wolf sold Disney rights to Roger Rabbit characters -Disney developed/produced motion picture -He sues Disney for 1) Failing to prove relevant records for audit 2) Underreporting revenues 3) Failure to disclose nature of 3rd party agreements regarding characters and compensation received Wolf-this is not a contractual breach. -Mellencamp entered into four different music publishing contracts with music publishing companies that are all controlled by one guy (the Riva companies) -in 1985 he amends all of them -In exchange for assignment of copyrights.com 1) No fiduciary relationship 2) Plaintiff doesn’t identify any royalty or license fee that was in this category 3) Didn’t establish defendant’s duty to negotiate royalty/license fees with 3rd parties Mellencamp v.” -Fiduciary duty is founded upon the trust or confidence reposed by one person in the integrity and fidelity of another. as a matter of law. records.
Lady Duff Gordon (222 N. This case involved a contract that provided for nonmutual profit that is absent in fiduciary relationships. while the contract in its entirety can be non-fiduciary in nature? Court-THIS IS WRONG-either a relationship is fiduciary or it isn’t -This is a contract with an implied covenant of good faith and fair dealing in which Wolf is entitled to an accounting 4) There must be a fiduciary relationship b/c otherwise Wolf could never prove any breach since Disney has all of the information. “A mere contract or debt does not constitute a trust or create a fiduciary relationship. Agreement provided that 1) He was exclusive agent to place her name on designs of others 2) Exclusive right to place her own designs on sale 3) D was to receive ½ of all profits from any contracts he would make 4) He will provide D with monthly accounting for profits 5) Will obtain all necessary trademarks/copyrights/patents -Plaintiff alleges she breached contract 111 . Lucy. p.” Court says RKO was not a fiduciary with respect to the performance of the terms of this contract (except as to accounting for rentals received) and that arguments predicated on the assumption that it was are directed to a false issue. 118 N. 88. create a fiduciary relationship. in and of itself.E.Downloaded From OutlineDepot. in and of itself. conduct could have overridden express terms of contract 2) Disney does not necessarily escape a fiduciary duty to provide a full and accurate accounting. -Wolf-Waverly stands for principle that a fiduciary relationship can exist in regards to one part of a contract.com Court: Wolf’s claim fails under 4 grounds: 1) Contingent entitlement to future compensation does not. 214 (1917). that party has the burden of going forward with the evidence on the issue although it is not the party asserting the claim Court-THIS DOES NOT CHANGE THE CONTRACTUAL NATURE OF PARTIES’ RELATIONSHIP -DISSENT 1) Evidence could establish here that Disney & Wolf were in a joint venture (at very least a contingent one) DESPITE language in contract to the contrary-in other words. See Waverly v. OBLIGATION TO EXPLOIT Wood v. 3) Contractual right to accounting does not create a fiduciary relationship. This would be literally adopting the language/idea from Waverly v. RKO. This was simply a contractual right. Disney was essentially Wolf’s accountant.Y. 409 -Defendant is fashion designer -Plaintiff was hired to help exploit her designs. Court-Where evidence necessary to establish a fact essential to a claim lies peculiarly within the knowledge and competence of one of the parties. RKO that PART of a contractual obligation is fiduciary. create a fiduciary relationship. 2) Profit sharing aspect of agreement also does not.
Tortious interference by DuPont-DuPont had a constitutional right to bring it’s concerns to PH’s attention. however. a cause in fact of BOMC’s decision to drop the book 2. just because this was not specifically addressed is not the end of inquiry -Promise to publish must be given some content and that it implies a good faith effort to promote book -This includes FIRST PRINTING. authors would be guaranteed nothing except for their advance -Conversely. p. Prentice-Hall (717 F. Prentice Hall’s breach of contract-Lower court found that PH had no “valid business reason” for reducing budget and copies. while being victorious. 411 -Plaintiff proposed idea to write biographical portrait of DuPont family -submitted a comprehensive. but do not issue any overt threats of litigation or other retaliation -PH accepted manuscript (with reservation that litigation. -Second Circuit-there was no contractual promise to put forth “best efforts” and “promote fully” the manuscript. end result being that PH reduces first printing by 5k copies and reduced advertising budget Zilg has two legal claims: 1) Tortious interference with commercial relations by DuPont 2) Prentice Hall’s breach of contract directly with him 1.Downloaded From OutlineDepot. he begins to have serious doubts as to whether book should be published -Book of the Month Club has serious reservations as to whether they want to publish such a controversial work -Big back and forth disaster. the PUBLISHER also must get discretion as to how best to do this -Should not be second guessed by judges/juries AFTER fulfilling initial obligation to make reasonable efforts -Zilg could prove breach of contract in following two ways here: 112 . and did not do it with threats of litigation or economic coercion. It was. ADEQUATE ADVERTISING BUDGET which will give a book a chance to succeed in market given subject matter and likely audience -If there is no implied good faith effort. highly critical. make their objections known.com -Defendant-There was never a valid contract-plaintiff did not bind himself to actually do anything Court-This is erroneous -Promise to perform can be implied from nature of the contract -He was to be her exclusive agent-UNLESS he put forth effort. neither he or Duff-Gordon would receive anything out of contract -This CANNOT have been intention of the parties Zilg v. would be costly against DuPonts) -New President came in AFTER execution of contract but BEFORE submission of manuscript. elaborate history of family and their role in American culture/history/capitalism -DuPont family gets wind of book. -However.2d 671).
TSM had bargained for guaranteed payments whether or not Elektra made sufficient efforts to exploit the music -In other words. a 3rd party wanted a license to release previously unreleased songs. wants her to instead star in Big Country. Bloomer Girl. Elektra would not do it without Waits’ consent -TSM sues for damages. the contract is not illusory and the discretion given to Elektra was supported by adequate consideration-CONTRACT IS VALID Parker v. distribute. Waits -Tom Waits case -TSM is his music publisher -Licensed distribution rights in Waits’ recordings to Elektra/Asylum records -Contract language is as follows: Worldwide right to manufacture. no evidence that insufficient initial efforts occurred 2) He might show that even greater printing and promotional efforts were not undertaken for reasons other than a good faith business judgment. Big Man. -No evidence of this here either-making a scale back due to input from Book of the Month club is a valid business judgment Third Story Music. illusory agreement contrary to parties’ intention -In this contract.com 1) He could demonstrate that initial printing and promotional efforts were so inadequate as not to give book a reasonable chance to catch on with public. to refrain from doing so. courts will not imply a covenant directly at odds with express grant in contract UNLESS the provision would result in an unenforceable. v. -In this case. claiming Elektra had no right to insist on artist approval and that implied covenant of good faith and fair dealing had been breached Question-if a contract expressly gives one party absolute discretion on whether or not to perform. sell. and advertise OR at its discretion. a Western to be filmed in Australia -Contract contained clause guaranteeing minimum payment of $750k 113 . Inc. Twentieth Century Fox Film Corporation -Shirley McClaine had contract with 20th Century to star in film. -Subsequently. which was a musical to be filmed in LA -Fox cancels production on that.Downloaded From OutlineDepot. following conditions must apply: 1) Implication must arise from language used or it must be indispensable to effectuate intention of the parties 2) It must appear from the language used that it was so clearly within contemplation of parties that it was deemed unnecessary to express it 3) Implied covenants can only be justified on the grounds of legal necessity 4) Promise can be implied only where it can be rightfully assumed that it would have been made if attention had been called to it 5) No implied covenant can exist if contract is explicitly covered by the contract -In other words. should the implied covenant of good faith and fear dealing apply to limit this discretion? -In order to find implied covenant.
each consisting of 30 minute programs -ABC then proceed to edit 27 minutes (almost 1/3 of original content) out for broadcast -Monty Python. Big Man is employment both different and inferior from Bloomer Girl -HOLDING: McClaine was entitled to agreed upon contractually guaranteed compensation of $750k -Dissent-I think the majority is mistaken. upset at editing. they equate two different genres of film to being two different kinds of employment -This is an issue that should be determined by a factfinder and is thus inappropriate for summary judgment DIRECTOR’S RIGHT TO FINAL CUT OF FILM Cimino Arbitration -Cimino was to make The Sicilian -Director had right of final cut so long as film was between 105-125 mins long -first cut delivered is 155 mins-Director agrees to re-cut it -next version delivered is 125 mins.Big Country. ABC TEST QUESTION! -Monty Python had contract with BBC to broadcast their shows -BBC licensed right to distribute show in US to Time Life Films -Time Life then licenses ABC to broadcast two 90-minute specials. there is no reason to think that it was also extended for network TV viewing-ABC cannot acquire more from Paramount than Paramount acquired from Beatty -Beatty wins arbitration! Gilliam v. failed to make a good faith consultation. and therefore could not prevent producer from re-editing film Beatty Arbitration -Paramount wants to make cuts in Reds for ABC television broadcast -Beatty won Best Director for this -Contract between Beatty and Paramount gave him right to final cut -Contract between ABC and Paramount gave ABC right to cut for “standards and practices” of network -Arbitrator-since Paramount gave Beatty such wide power to determine final cut of original version.com -McClaine rejects offer for new film and sues for $750k promised in original contract -Court-general rule is that recovery by wrongfully discharged employee is amount of salary for agreed upon service period LESS amount employer proves employee has earned OR could reasonably have earned from other employment -this is the mitigation doctrine in contract law CAVEAT-employee does not have to seek DIFFERENT OR INFERIOR employment . tried to negotiate with ABC for editing for second special 114 .Downloaded From OutlineDepot. cut out ever violent scene -but is of horrible quality b/c it changed character of film from a dramatic struggle to a character study AND made film incomprehensible -Cimino essentially did no more work on film after these objections were made known to him -Arbitrator-Cimino did not treat short version submitted as a realistic attempt at a final cut.
Monty Python brings suit for preliminary injunction against broadcast -District Court denied motion.Downloaded From OutlineDepot.com -No agreement reached. America law relies on unfair competition/breach of contract ideas to remedy such situations -Thus. while technically true. not their personal rights -Thus. there is a claim under Section 43 of the Lanham Act-it is sufficient to violate the Act that a representation of a product. but also extends to post-recording -Court says contract expressly retains for group all rights not granted in contract. 3) ABC had no implied license to insert commercials and edit obscene/offensive material -ABC says MP should have expected US network would do this -Court says no MP episode ever edited before AND that MP and its representatives representatives repeatedly sought assurances that it wouldn’t happen -NO WAY TO IMPLY A LICENSE FROM THESE CIRCUMSTANCES -ABC’s only options were to ABC’s cuts to program likely constituted actionable mutilation of MP’s work -This cause of action has roots in droit moral-Continental European legal concept recognizing right of artist to have work attributed to him/her in form he/she created it -Droit Morale is not recognized in American Copyright law-purpose in US law are to protect economic rights of artist. creates a false impression of the product’s origin 4) RESULT: Injunction Granted on breach of contract and Lanham Act Grounds Concurrence (Judge Gerfein) -US Copyright Law does not recognize droit morale -Nor does it exist under the Lanham Act-purpose of this statute is to deal with misdescription of origin-this did not happen here. omission of any terms about alterations post-recording MUST BE READ as being reserved to MP. 2nd Circuit) -ABC argues 3 grounds why they were entitled to edit the special: 1) Unauthorized editing of underlying work constitutes infringement of copyright in that work similar to any other use of a work that exceeded the license granted by the proprietor of the copyright -Edited version ABC broadcast was a derivative work -BBC-MP Agreement-does not contain any grant permitting insertion of commercials or editing for decency standards -BBC-Time Life Agreement-expressly granted right to insert commercials and edit for decency standards -Black letter law that a grantor may not convey greater rights than it owns 2) Scriptwriter’s agreement DOES NOT restrict MP’s right to participate in revisions prior to recording. as everyone knew this was Monty Python 115 . appeal to 2d circuit Court (Judge Lumbard.
Downloaded From OutlineDepot. unhealthy ones…. Court notes that “it cannot reasonably be argued reasonably that violence. artistic. appeal to the prurient interest? -This album does appeal to the prurient interest-excessive references to all types of sex. genitalia. etc. artistic. -it does not appeal to “normal. 578 (p. or scientific value? -this standard can be assessed OBJECTIVELY without reference to community standards -In other words. sadomasochism. there is a “captive audience” that c cannot escape its reach as easy as in other mediums 3) Does the work. does this work have any social value? -The album also satisfies this test-no literary. music is a more intrusive medium. saying District Court Judge impermissibly proceeded on basis of his own subjective judgment in determining obscenity 116 . lack serious literary. political. political. Supp. and microscopic descriptions of human genitalia are comedic art -As Nasty as They Want to Be is simply rhythm + explicit lyrics=NO SOCIAL VALUE HOLDING: Album is legally obscene under Florida law NOTE: On appeal. taken as a whole. 437) -Plaintiff is record company-2 Live Crew is one of their artists -Sheriff of Broward County. healthy sexual desires” -but rather to abnormal. Navarro 739 F. as a whole. does the work depict or describe in a patently offensive way sexual conduct specifically defined by applicable state law? -The album also satisfies this test -Depicts sexual conduct in graphic detail -Lyrics contain “dirty words” and depictions of female abuse and violence -Additionally. NOT a Lanham Act violation -It’s best to not use a doctrine when it is not necessary to do so and which would distort its purpose in US Law CENSORSHIP AND REGULATION OF CONTENT & ATTENDANCE Skywalker Records v. graphic depictions of all forms of sexual conduct. perversion. California 1) Does the work. abuse of women.how do you make a legal judgment here? 2) Measured by contemporary community standards. FL shut down their concert over obscenity concerns Appellate Court 6) Is As Nasty As They Wanna Be legally obscene? 7) Did Sheriff’s action pose an unconstitutional restraint upon their first amendment rights and give rise to a 19 USC 1983 claim? Obscenity -Obscenity is determined under the three-pronged test devised under Miller v.com -What occurred here was a breach of contract and breach of common law copyright. scientific merit -Album has no political value-fact that artists are African Americans who draw on their experience does not transform it into a political work-they simply invoke themes common to human condition -No scientific value is contended -For literary and artistic value. 11th Circuit reversed.
how is the forum administered in general? 1) Is the relevant forum the only place for certain type of expression? If so. simply because “that’s not what we want -Also didn’t want “black audiences” -Felt that some artists said “off the wall things” such as speaking against using nuclear power -There was no CONTENT NEUTRAL test with standards used to make a determination. falls under ambit of First Amendment -Music is a form of expression that is protected by the First Amendment -Burbank tried to argue that Cinevision isn’t trying to “express” anything. then restricting it might be constitutional b/c it wouldn’t be shown otherwise 2) Is the authority approving/denying permits removed from political process? -These are factors a court will weigh in deciding whether a city’s actions in a case like this are violating First Amendment 3) City of Burbank considered arbitrary and unlawful factors in disapproving concerts -Burbank didn’t want gay audiences to come to concerts.2d 560 -Plaintiff is a concert promoter -Contract specified that City had right to disapprove concert if it had potential of creating a public nuisance or which would violate any State law or City ordinance” -City of Burbank denied permission for 6 of 8 proposed concerts.com Cinevision v. political and non-political. but rather completely unfettered discretion…remember Yick Wo v. and $50k against Appellate Court 1) ALL music.446) 745 F. Burbank cannot open the forum to some and close it to others solely in order to suppress the content of protected expression -There are relevant considerations a city can take into account: 1) High noise level 2) Excessive traffic 3) Crowd overflow Additionally. 117 . therefore can’t be protected by First Amendment -Court says it does not matter if a party seeks to make a profit through expression of protected speech -Also irrelevant if music has ideological content or not-still protected speech -Any willful or purposeful effort by a municipality to suppress protected expression is a per se violation of First Amendment 2) City of Burbank denied access to Starlight Bowl in an unjustifiable manner -Absent a compelling governmental interest that is narrowly tailored to prevent arbitrary decision making.Downloaded From OutlineDepot. etc) -Plaintiffs sue city under a 42 USC 1983 (acting under color of state law/authority to deprive individual of Constitutional rights) -Jury awarded $20k damages against City and Richman jointly. citing dislike of “hard rock” and potential for certain audience types that they didn’t want (gay. anti-nuclear power. City of Burbank (p. rather make a profit.
of which there is none here -But at pleading stage. protected from section 1983 claims when acting in good faith within the scope of their authority -Here. Edmondson (p.Downloaded From OutlineDepot. stating that it fails to state a claim upon which relief can be granted-they did not owe anyone a duty to prevent someone from recreating actions in a fictional film -Furthermore. imposing such a duty would violate First Amendment of US Constitution -Trial Court dismissed complaint for failing to state a valid cause of action Appellate Court 1) Sufficiency of the Complaint -Generally. a party is not liable for the independent criminal acts of third parties UNLESS there is a special relationship imposed by law. courts have not found liability for filmmakers/producers/studios for injuries allegedly resulting from imitation of on-screen activity -BUT this result came after filing of motion for summary judgment or trial on the merits. in its misfeasance produced a film with violent imagery that was intended to cause viewers to imitate it-plaintiffs could possibly prove this at trial (though unlikely) -Generally. killing a liquor store attendant -Plaintiff is suing under tort-Warner Bros. as released. solicitation. we must accept allegations as true: Warner Bros. slander. so damages are upheld against him Byers v. etc.452) 712 So. perjury. dismissal on pleadings is appropriate 2) First Amendment Argument -First Amendment free speech rights are highly protected and can only be abridged in the following circumstances: 1) Obscene speech 2) Libel. misrepresentation. it must be directed or intended toward the goal of producing imminent lawless conduct AND was likely to produce such imminent conduct -both conditions must be satisfied-cannot be merely a possibility 118 . falls within exception #4 -In order for speech to be characterized as inciting imminent lawless action. 3) Speech that is integral part of conduct in violation of valid criminal statute 4) Speech which is directed to inciting/producing IMMINENT lawless activity -Plaintiff argues that Natural Born Killers.2d 681 -Two guys allegedly watched Natural Born Killers and were inspired to go on a crime spree. knew or should have known that this film would have an inciting effect on teenage viewers -Defendant moves for dismissal on the pleadings.com Hopkins from Con Law!!! HOLDING: Officials have qualified immunity when acting in executive capacity. Councilman Richman acted in bad faith.. NOT at the pleading stage normally -EXCEPTION-if pleadings do not contain any allegation of intentional conduct by film producers. false advertising.
it must 1) Appeals to prurient interests of average person 2) According to contemporary community standards. Rice-Defendant published book about how to be a contract killer and stated at trial that he hoped people would actually use it for this -Mere foreseeability or knowledge that publication/film MIGHT be used for criminal purpose is insufficient for tort liability RESULT-case remanded for further proceedings to establish whether or not Warner committed an intentional tort and whether or not they can claim First Amendment defense ON APPEAL AFTER INITIAL REMAND: -Trial Court grants SJ for Warner Bros/Oliver Stone on grounds that Natural Born Killers is indeed protected speech under the First Amendment of the US Constitution Appellate Court: -Free speech is restricted only in the following circumstances 1) Obscene speech 2) Defamatory invasions 3) Fighting words/words part of commission of criminal offense 4) Incitement to imminent lawless action -Plaintiff alleges that NBK falls under 1 & 4 Incitement Claim -In order to constitute incitement. since we have determined as a matter of law that NBK is not inciteful speech Obscenity Claim -In order for speech to constitute obscenity.Downloaded From OutlineDepot. plaintiffs allege that Oliver Stone intended to incite violence. glorification of violence DOES NOT rise it to the level of incitement -Rather. their intent DOES NOT MATTER.com -The standard here is very high-plaintiff must offer evidence that defendant producer/publisher possessed actual intent to assist criminal activity See Paladin Enterprises v. speech must be 1) Directed or intended toward goal of producing imminent lawless conduct 2) Likely to actually produce such conduct -The mere possibility of that speech will incite such activity is insufficient -Directed at some indefinite time in future also will not satisfy test -Natural Born Killers does not purport to order or command anyone to perform any concrete action immediately or at any specific future time -While the film is very violent and CAN BE viewed as glorification of violence. this is a copycat case in which a permissible inference is lacking in speech that the “speaker” intended to assist and facilitate the criminal conduct depicted -Furthermore. however. depict sexual conduct specifically defined by a state law 119 .
and courts do not like to place themselves in the position of marketing and distribution specialists. but that’s more a statement to those people being pathetic. and the advice you should give a client who wants to take matters into their own hands is to follow the procedures in the contract.D.they could get sued and you might get sued for malpractice! B. v. political. not to the speech that they copy -Societal/judicial recognition that benefits of free flow of ideas outweigh costs society incurs by allowing expression of reprehensible ones -Since NBK is not incitement and thus protected speech as a matter of law. Lilienthal. D didn’t think P printed enough copies or distributed the books to enough bookstores. Never counsel a client to ignore the contract. 1981): 1.Y.1: Self Help A. Hertz says that you don’t usually expect self-help will work. Plaintiff was a publisher who entered into a contract with D. artistic. Dodd. 2. so D printed copies on his 120 .Downloaded From OutlineDepot. Introduction: 1. rather.N. 3. or scientific value -Plaintiffs do not allege that NBK is any of these things. The distributor of a creative work is generally only required to make a reasonable effort to exploit the creator’s work. 105 (S. lack serious literary.com 3) Work. Mead & Co. Supp. REMEDIES 5. taken as a whole. they argue that obscenity doctrine should be EXTENDED to cover type of violence therein depicted -Court declines to extend doctrine FINAL RULING -It’s unfortunate that individuals will seek to recreate fictional characters committing illegal acts. Facts: Defendant was an author. There are usually procedures in the contract. action is dismissed in entirety XV. 514 F.
and P did not in an additional 6 months. 2. Fox continued to pay Nolan. Nolan. alleged failure to meet public demand does not permit D to publish his own copies in contravention of the contract between the parties. Rescission carries with it a reversion of rights transferred. Evidence does not support fraud. Fox conveyed it to Williamson. not what Williamson collected. Williamson Music. 3.” which he sold to Sam Fox Publishing in exchange for royalties.thus he could print his own. Nolan v. Introduction 1. Supp. The contract stated that if the publication was out of print for six months and D asked P to print more. 1. 5. but only paid him 33 1/3% of what Williamson paid Fox (between 50% and 66 2/3% of Williamson’s receipts). 5.com own.D. D claimed that he had the contractual right to buy books from the publisher at a discount and resell them. D didn’t follow this provision. He claimed he rescinded the contract through a notice in 1963. claiming fraud. not fraud here. However. 4. Nolan sued to recover his copyright. 1969). 4. Court also found no fraud: 1) Allegation that Fox concealed from P its relationship with Williamson. and this remedy is rarely granted. 2..N. unless there was NO consideration. Plaintiff.Y.2d 1394 (1974). and publisher breached this agreement by not printing more books. 300 F.2: Rescission/Reversion A. Defendant. 2. B.so he is out of luck. Rescission: undoing of the agreement either because there are legitimate grounds to do so or because of a change in circumstances such that P could make a more advantageous deal elsewhere. and did not “conceal” it. the contract would end and the rights to the work would revert to D. Fox also did not pay 74% of royalties due over a six year period. 3. 1311 (S. 2) Failure to render clear/detailed accountings: P is actually upset about breaches of contract. aff’d.contract was assignable. Inc. the court did not find a breach of the contract. P sued for a permanent injunction to prevent him from doing this. 499 F.Downloaded From OutlineDepot. 121 . wrote “Tumbling Tumbleweeds.
3: Injunction 122 . due to the advertisement and Williamson’s registration as assignee in the copyright office. D admitted that breaches occurred. 2.Downloaded From OutlineDepot. An appeal of the case above.com 6. wanted a rescission of contract by which they assigned rights to “Louie Louie.2d 1394 (2d Cir. the publisher did make royalty payments. so long as it is based on events within the SOL. Highland Music. such as ceasing all royalty payments or breaching nearly every part of the contract. including in the four years preceding the case.each payment is separable from the other. P was entitled to royalties due to him under the contract via damages. 5. District court ruled in P’s favor and granted rescission. Peterson v. Agrees that Williamson and Fox did not conceal their dealings.” Sold the masters for 9% of profits or licensing. Here. 1998) 1. Sam Fox Publishing Co. restoring masters to Kingsmen and found that rescission was effective the date the complaint was filed.3d 1313 (9th Cir. 1993. Court rejects this argument. D appealed. but never got any money at all. but still thought that P should have to have brought the action within four years from when it first could have been granted rescission. Rescission can be permitted only when the complaining party has suffered breaches of so material and substantial a nature that they affect the very essence of the contract and serve to defeat the object of the parties. basing action on only events in the past four years (within the statute of limitations (SOL)). saying that the four year SOL barred rescission action. 4. Affirms finding that rescission is effective as of the date of filing of complaint. C. sued for royalties. courts find that EACH BREACH starts SOL clock anew.. 5. Nolan v. but here. Cases only will grant rescission when there is an equivalent of a total failure in the performance of the contract. 8.and this can be dealt with just with monetary damages. D. 499 F. so each starts a new SOL. Finds that rescission has been allowed without a showing of fraud in cases where publisher made NO royalty payments. Inc. 2. 3. D’s breaches are “a failure to comply fully with the contractual provisions for payment of royalties”. 1974) 1. 140 F. SOL does not bar the action. Kingsmen. and thus Kingsmen are entitled to all income brought in by D’s from the recordings after the complaint was filed.. so no rescission. In California. musical group. 7.
The likelihood that the injunction will produce positive results. Uniqueness of performer’s talents is a central issue in obtaining a negative injunction. iii. iv. b. b. A court will not issue a negative injunction if it feels that it will be unduly harsh or burdensome. The extent of geographical area in which the defendant is to be prohibited from seeking alternative work. Better bargaining position to get a cut of the performer’s contract with the new label (that is. a. Court agreed to an injunction for either 3 years or remainder of contract term. Nelson: Bette Davis case. The performer has a change of heart. c. This ends up with 2 results: i. whichever was shorter. 4. alone will not suffice. Courts have recently been increasingly reluctant to grant injunctions against entertainment figures. a.com A. Hertz’s negotiating tip with regard to representing an artist: 123 . a. Court also said cannot both have an injunction and suspend the performer without pay. You can make someone not work for someone else. You can’t make someone work for you. ii. The length of time the injunction is to run. v. and bears on issue of inadequacy of legal damages as well. Element of proving irreparable harm. 2.factors are: i.Downloaded From OutlineDepot. A showing of great difficulty and inconvenience in finding a substitute performer of similar talents is generally sufficient.that is like slavery. you let them work for the new label but you get more money out of it). Warner Bros. 5. but a clause in a contract stating the performer is unique. A “negative injunction”: will prevent a party from working elsewhere. The types of work prohibited by the requested injunction. 3. b. ii. Introduction 1.
The usual form of redress in cases of breach of contract is money damagesan injunction is unusual. Wolf. 124 . Johansson. and that granting the injunction would inflict serious injury on the defendant. fights prior to the rematch or to fight Patterson anywhere prior to the rematch.not an automatic injunction upon a breach. 3. 4. Machen v. 6. Supp. b.y. This was an unreasonable restraint. court first found that the negative covenant was no longer in effect. the negative covenant was not intended to run beyond February 14. Found that negative covenant could not run for an indefinite length of time. who was a sportscaster. Court further found that even if the negative covenant was still in effect. Granting the injunction would severely harm the defendant. Covenant was too broad geographically.Y. 522 (S.2d 398 (1981) 1. along with an agreement not to engage in any U. 2. and it would not benefit plaintiff very much.D.N. b. and was imposed for an indefinite period of time.S. Particularly true if seeking to restrain defendant from practicing trade. Issue: whether ABC was entitled to equitable relief against Wolf. v. by disallowing him to fight during the prime of his career. 1959) 1. 52 n. and thus.com a. 2. Courts want to make sure there is a likelihood of success on the merits before issuing a preliminary injunction. 174 F. a. B. As this time period had passed. Make sure that it says that the company has the right to SEEK injunctive relief. which the court found to be breached. Contract had a good faith negotiation clause. because Wolf engaged in essentially sham negotiations with ABC while under a new contract with CBS that forbade him from working with ABC in the future. The injunction would be an intolerable and unreasonable burden. 1959. Court determined that Machen was not entitled to injunction. the injunctive relief requested was not reasonable on its terms. Often courts will only enforce injunctions if the company says an artist is unique in the contract. C. Plaintiff boxer sues to stop defendant boxer from fighting Patterson before fighting P in a rematch agreed to by D.Downloaded From OutlineDepot. while not providing the plaintiff with the protection he sought. and that the company has a right to go to court and get injunctive relief. American Broadcasting Cos.
these negative covenants usually run for 5 years from date of release of artist’s recording or 2 years from date of expiration of agreementwhichever is later. cannot obtain injunction against the third party itself either. In one case. 7. particularly once the employment agreement has expired. Giannoulas: Vacated injunction which didn’t allow a man to wear a chicken suit. Once contract is over. KGB Inc. 6. injunction only available to prevent injury from unfair competition or similar tortuous behavior or to enforce an express and valid anticompetitive covenant. including unexercised option periods. Young Broadcasting of Albany. Courts tend to be hostile toward non-competition clauses for former employees. v. however. because the contract for employment had NOT expired. Inc. If an injunction cannot be obtained against the performer to prevent the performer from working for a third party. Newton-John: Court said that can grant injunction against employee performance during contract term. In recording agreements. Elliot: Court distinguished Wolf. 4.Downloaded From OutlineDepot. There is general judicial disfavor of anticompetitive covenants contained in employment contracts. Inc. In another. 5. D. due to a breach. 100-mile radius non-competition clause. v. but not after the term is over. 5. in California at least. a court held that the uniqueness of personality meant it would enforce a one year. Zink Communications v. Notes: 1. Oloffson. there is usually a clause against re-recording material. granting injunction against allowing Defendant to host competing game shows.Nigra v. Dissent thinks that there should be a 90 day injunction. 2. No existing employment agreement between ABC and Wolf.Midwest Television. 6. MCA Records v. 125 . a court held that it should not require a performer to move to another area in order to obtain employment. = 3.com 3. and there is no express anticompetitive covenant that Wolf is violating or claim of special injury from tortuous conduct such as trade secret disclosure. Contract was over and no irreparable harm was shown. Injunction will endure for duration of the term of the contract. 4. which was the time that was supposed to be the transitional period during which ABC and Wolf were supposed to negotiate in good faith.
tangible recordings in their possession. 2. The purpose here was to perform on the radio. There are three parties that claim rights in them. b.Downloaded From OutlineDepot. Punitive damages a. Money damages are the traditional remedy for breaches of entertainment industry contracts.but ownership of these does not come with the right to exploit. Must have a reasonable foundation upon which an award can be calculated. v. Legacy has the actual. Inc. c. and is not entitled to any profits. b. Polygram has rights in his recordings during that time period for the PURPOSE of creating phonorecords. 2. B. P cannot just claim all of D’s profits. all that were due him were nominal damages. b. a. 2006 Tenn. Barrera and Burgos (NY): found that an amount that reflected the fact that D’s use was of P’s work was unauthorized cannot be part of the fair market value of a license authorizing such use. Can be available in contractual disputes if particularly problematic. App. based on track record or custom in industry.4: Damages A. c. Nebulous promises such as “promises of creative input” or “good faith approvals” can lead to contentious suits. Legacy Entertainment Group. not create a record. a. Freund (NY): found that when a plaintiff could not prove what his royalty payments would have been. as P cannot put forward what part of profits are attributable to P’s work. Pay or play clause: the failure to utilize services of performer gives rise to an entitlement to a specified sum of money.com 5. PolyGram Records. This case is about the right to exploit performances of Hank Williams recorded and broadcast by WSM Radio in the 1950s. Pay or play clauses a. 1. b. Introduction 1. Can also protect company against consequential damages. In addition. 3. There are 126 . Liquidated damages clause such as a pay or play clause can be helpful for artists who do not want to have to prove damages in court.
Refused to dismiss the case.com copyrights in their enhancements to the recordings. 5. Ga. they were substantially behind on car payments. 394 (N. 2. Then the former management tried to get the copyrights into the bankruptcy estate. but that is all that is covered by these. Court held that even if that was one reason they were filing. then you have certain rights before others do in the property. routinely filed security interests in copyrights by filing UCC-1s in the home jurisdiction. Hertz story. If you go to bankruptcy. so he got the copyrights in exchange for the debt.3: Protective Registration A. Then Clinton’s former manager got a judgment against him. Clinton filed for bankruptcy. 210 B. a.5: Bankruptcy 5. B. c.not the underlying recordings themselves. George Clinton 1. They have the right to publicity of Williams. that it was not a bad faith filing. etc.they either pay the debt or you get the property. 3. 2. In re Peregrine (C. house payments. Security interest: if you are owed money by a debtor and you take a secured interest in the property that you are loaning the money for.) 1. and now industry standard language is all-encompassing and would have covered these recordings. 1997) 1.5.5.D.D. Judge denied motion. 3. Book notes that this was a really old contract. 2. 5. finding that Boladian had received the copyrights for valuable consideration.1: The Availability of Bankruptcy Protection A.Downloaded From OutlineDepot. Until Peregrine. Armen Boladian owned George Clinton’s copyrights because Clinton had owed him a lot of money. or whether they had legitimate reasons for doing so. In re Watkins. Williams’s heirs claim his right to publicity gives them rights to exploitation. A trustee in bankruptcy can get rid of personal service contracts. This was a determination of whether the members of TLC had filed for bankruptcy in bad faith. 127 . in order to get out of their contracts. 3.R. Cal. Court holds for his heirs. b.
Reason record company might want an arbitration clause is because sometimes it is a quicker process. 1. 3. and often want to use financial power against the artist and because it is so costly to litigate. because the arbitrator does not have to state reasoning behind his decision. specifying the specific amount but did not mention the additional payments. Robert Lewis Rosen Associates v. and said that additional payments were owed to Plaintiff as other contracts were paid to defendant. Often used for collective bargaining agreements. then they may lose it all. 6. As an artist. if a record company sues an artist it is tough for the artist to come up with a retainer to fight the record company. may cut the baby in half and get something out of the deal. 2005). 5. 128 . also a preemption argument. This puts the whole country on notice. It is less expensive. William Webb (S. and the artist ends up suing. and resort must then be made to the appropriate judicial forum for the confirmation. Arbitration is strongly favored as a matter of public policy. An arbitration proceeding concludes with the entry of an award. you may prefer to arbitrate because: a. and artist goes to arbitration. From company: don't want arbitration because if they are right want what they think they are entitled to. 2. so more likely to work out a settlement immediately. usually. If the company is right. 7.Downloaded From OutlineDepot.D. etc.6: Arbitration A. 5. Most agreements include arbitration clauses in their agreements.Y. If the company is going to be right.com 3. or modification of the award. 4. b. 2. The court approved the award. c. Introduction 1. Meaningful court review is prevented.N. and thus the error must be obvious. B. The arbitrators are more likely to understand the issues and compromise than a court is. vacatur. Now you have to file a security interest in a copyright in the Copyright Office. 3. Original arbitration award said a specific amount of damages for a particular breach. Defendant said the “additional payments” were not collectible because they were not mentioned in the judge’s original order.
When parties agree to arbitrate all questions arising under a contract. state laws lodging primary jurisdiction in another forum. in this case there can be no arguments about ambiguity or the effects of the final judgment. The question was who decided whether Ferrar was acting as an agent or as a manager. are superseded by the FAA. 2. C. Supreme Court says arbitrator if parties agreed to arbitrate.Downloaded From OutlineDepot.com 4. 129 . Ferrar (Supreme Court decision from class) 1. Preston v.the court or the arbitrator. Court said that because arbitration awards are confirmed in their entirety or specifically changed or vacated. whether judicial or administrative.