Jay Leopardi to produce new television series, Common Denominator

July 25, 2012 by Barry Neil Shrum, Esq.

Amazon.com Widgets

My client and long term friend, Jay Leopardi continues to build a remarkable brand. Not only is Jay working the THE Shark, Daymond John on several projects, but he just landed a tr emendous opportunity in the world of entertainment. Jay has agreed to produce a series of interviews with various bu siness leaders to take his viewers on a journey to discovery what makes the highest achievers and the greatest business people succeed. Readers of Napolean Hill’s Think and Grow Rich will recognize the familiar plot. Jay’s series will be called Common Denominator and is slated to air on PunchTV this fall.

“I met Jay Leopardi on the set of Sony Studios in Los Angeles. It was instantly clear that Jay has the “it” factor, or shall I say Hit factor. The guy has a personality mix of Steve Jobs, Donald Trump and is Robert Downey Jr’s doppelganger,” said Steven Samblis, Chairman of IC Places, Inc, who recently acquired PunchTV.. “As we talked outside the sound stage, studio tours where stopping and taking pictures of Jay obviously thinking he was Robert. As we talked about what Jay does in the arena of branding and his magnitude of experience, I knew something was there.”

The following interview with Daymond John inspired the series:

Will the real Sarah Palin please standup?: Interplay between Right of Publicity and Trademark

April 29, 2011 by Barry Neil Shrum, Esq.

OR, What’s in a Name? Personal Names as Trade Names REMIXED.

By Barry Neil Shrum, Esquire (with Ashley Trout)

“That which we call a rose by any other name would smell as sweet.”

You may know this quote from William Shakespeare’s classic play Romeo and Juliet or from the more “pop-culture” reference by Anne Hathaway in The Princess Diaries, but chances are you’ve heard it countless times before. A name is a sense of originality and persona. It is what gives us our sense of identity and belonging. Some psychologists and sociologists believe that people with certain names, such as Curt, David and Jeff, receive more positive affirmations in life than persons with less desirable names, such as Agatha, Edgar and Mabel, which are more likely to evoke negative messages from teachers, professionals and acquaintances. One study reported in the Journal of Educational Psychology used elementary teachers to grade identical papers on which random positive and negative names were attached and, as you may have guessed already, the papers with the negative names routinely received the lower grade. Now you don’t have to wonder why supermodels and handsome actors have the most unique and appealing names! But Shakespear was perhaps trying to imply that it is the essense of the rose that matters, not its name.

One of the more popular articles on my blog dealth with this issue: What’s in a Name? Personal Names as Trade Names, written by my then-colleague, James H. Harris III for what was then a physical newsletter version of Law on the Row. In it, Jim elucidates the user of personal names a marks or trade names in business. I felt it was time to reexamine the issue in the light of celebrities, and extend the discussion to the rights of publicity sometimes also associated with a name. So, the subtitle of this article is appropriately What’s in a Name? Personal Names as Trade Names REMIXED.

The bottom line is that some names are more unique than others, but your name is what makes you uniquely “you.” So, what happens when someone “steals” our name? With the billions of people in the world, the chances significant that there is at least one other person who is walking around with the same name as you. Is there anything that a person can do to protect their “unique” identifier?

What happens, for example, when someone tries to take a name like “Heidi Klum” or “Albert Pujols”? Key figures or celebrities that, when you say their name, a certain image comes to mind. Or, perhaps the name evokes an event: mention the name Charlie Sheen, and you will likely think not only about his image, but more about his recent escapades surrounding his departure from Two and Half Men.

A very good example of this power of a name to evoke strong messages is the name “Sarah Palin.” Whatever your political opinion, whether you love Sarah Palin the Alaskan Governor/Vice Presidential candidate or whether you hate her, the name “Sarah Palin” evokes very strong thoughts, associations and yes, feelings. Look at the photographs associated with this article. What kind of feelings does that evoke in you? If you thought either was the real Sarah Palin, you are wrong. They are both actually impersonators – and different ones to boot! Yet, the images evokes the association and the feelings that make you think of the real Sarah Palin and her personal idiosyncrasies.

Sarah Palin is, of course, an American politician, formerly governor of Alaska, but best known as John McCain’s “choice” as the Vice President candidate for the Republican Party in the 2008 election. She is best remembered for her “cowgirl” image, folksy humor and distinctive, if annoying “wink”: but she is often also associated with her completely ineffective interview with Katie Couric that some say cost the Republican party the election that year – an interview greatly publicized by an impersonator.

Since the 2008 election, Palin has become a fixture on the Fox News networks. Whether she is expressing her opinions about issues such as abortion or gun control, Palin is anything but shy in making her voice heard. The result of all this publicity, of course, is that her television and cable “Q Score” has increased significantly.

With a character as polarizing as Palin, the result is often a proliferation of impersonators. It did not take long in the case of Palin – immediately subsequent to the interview – for Tina Fey to begin imitating the Couric interview on the Saturday Night Live. Impersonators, of course, trade off the personalities and idiosyncrasies of the imitated celebrity or public figure. Since the days of Rich Little, and his current replacement Frank Caliendo, the art of imitation has been a popular part of American pop culture. There is no doubt that Ms. Fey’s notoriety increased as a result of her performances. Imitation may be the most sincere form of flattery, but can it go too far? According to Sarah Palin and her handlers, it already has!

Tina Fey was just the first in a long line of Sarah Palin impersonators. Many people have since taken it upon themselves to impersonate Sarah Palin and trade on her persona, including perhaps the best known of the tribe, Patti Lyons and Patsy Gilbert. See, infra. So, the question is “Can Palin stop this type of activity?”

Not to sit on the fence, but the answer is maybe! Perhaps more precisely, she will be able, in a somewhat limited way, to enforce certain aspects of her persona and, in an even more limited way, the use of name in connection with certain services and/or goods.

We must first look to trademark, not copyright, for the answer to our quest. According to the U.S. Patent & Trademark Office, a trademark is a “word, phrase, symbol, or design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of others.” Whenever you see the Golden Arches looming in the air, you immediately associate it with the burgers made by Mickey D’s – both trademarks of the McDonald’s corporation.

Likewise, whenever you hear the name “Sarah Plain,” chances are you picture a woman with long brown hair, most likely pulled back, thigh-length boots, and a pair of Kazuo Kawasaki 704 designer eyeglasses. Perhaps you see that aforementioned hackneyed wink she was so fond of using during the televised vice-presidential debates with VP Joe Biden. Whatever you see, the image of Sarah Palin is a very unique and distinctive image. And, more importantly, it is an association engrained in our minds.

So, since the image and name are so synonymous, does it follow logically that Sarah Palin can copyright her name? According to U.S. Copyright Law and historical interpretations thereof, it is well-established answer is “no, she cannot.” Since its creation by our Forefathers, the Copyright law has never protected mere “ideas.” In fact, Jefferson stated flat out that “[ideas] cannot, in nature, be a subject of property. Specifically, things like titles, names, short phrases and slogans fall into that category, and thus are not eligible for copyright. Anything that can be treated as a building block – musical notes, letters, words – fall outside the scope of copyright’s protection.

But this doesn’t mean Palin is without protection all together. In the United States, celebrities like Palin and others can protect their name, through trademark laws, and their persona, at least in 28 of the 50 states, through state laws governing rights of publicity.

Sarah Palin has opted, at least initially, to use trademark law to protect here interests in her moniker. In an article by the Christian Science Monitor , she acknowledged filing for a trademark application for her name in International Classification 41 for “educational and entertainment services, namely, providing motivational speaking services in the field of politics, culture, business and values” and in IC35 for “Information about political elections; Providing a website featuring information about political issues.” The application is Serial Number 85170226 and the mark was approved for publication and the review of that publication was completed on April 12th. Likely the marks will issue within the next few months.

The thing to understand here is that it is not an uncommon practice among celebrities who want to enforce their intellectual properties, namely their persona or publicity rights, and prevent others from using their identifying features in similar trades and endeavors. Filing a trademark application for use of their name in connection with certain services and goods is, in fact, extremely common for celebrities and I often advise my clients to take such action.

Currently, back in Sarah Palin’s world, there are two well-known figures impersonating her: Patti Lyons and Patsy Gilbert. Patti Lyons seems the most aggressive of the two, although both have been successful. In a Yahoo article, it was reported that Lyons showed up at a recent event in Washington, D.C. knowing that Palin would not be present. Lyons impersonated Palin by dressing like her and making an appearance. At the event, she deceived the crowd into thinking she was Palin. Lyons spoke with her “fans” at the event and even those people were unable to detect the ruse. Lyons travels the country doing the impersonation with “fair and balanced” political comedy, and allegedly appeared onstage with Bill Clinton and Barack Obama. Lyons also has a website dedicated to her Sarah Palin impressions and is in negotiations with A&E for a special. Other impersonators, like Patsy Gilbert for example, have similar websites.

But even if Sarah Palin is successful in registering her trademark on the Primary Register, does that enable to prevent these impersonators from practicing their trade? Maybe, maybe not. As our examination of protection moves further down the tracks, we have to reference a person’s right of publicity. Unlike copyrights, trademarks and patents, there is no uniform federal law that governs the intellectual property right of the right of publicity. This right is based partly in common law, but also, as noted earlier, has statutory representation in 28 states. The problem is that there is very little uniformity among these state statutes, which range from 50 years in Illinois Cf. Ill. Comp. Stat. § 1075/30 – the most protection – to as little as 10 years at a time in Tennessee, for example. Illinois’ neighbor, Indiana, gives protection for as long as the publicity rights are continuously transferred! Cf. Ind. Code § 32-36-1-16. To quote another celebrity, can you say “to infinity and beyond?” But don’t get me started on the rights of cartoon figures, lest I digress.

The right of publicity is essentially the inherent right of every human being to control the commercial use of his or her identity, in some state even after their death! Some courts view this as a “moral” right, in line with the natural rights philosophy of John Locke, arguing that a celebrity’s identity is the fruit of his or her labor and creates property entitled to legal protection. See McFarland v. E & K Corp., Civil No. 4-89-727, 1991 U.S. Dist. Lexis 1496, at 4 (D. Minn. 1991). Using this property right, celebrities may protect the commercial use of their persona, including their name, voice and personal characteristics, limiting their exposure and/or seeking compensation for their use.

Many of these laws, however, only prevent limited types of commercial use. Tennessee has a right of publicity statute which gives Tennessee residents “ a property right in the use of his name, photograph or likeness in any medium and in any manner.” Cf. Tenn. Code Ann. §47-25-1103, et. seq. In a case of first impression, Tennessee’s Supreme Court examined the statute in the context of a Beatles tribute band, i.e.¸a group of impersonators. The imitators dressed liked the Beatles, performed – remarkable close in sound – to the Beatles and, most importantly, advertised their concert using a pose similar to the one the actual Beatles use on the American version of the album, A Hard Day’s Night. The impersonators called themselves “1964 as the Beatles.”

The court ultimately ruled that the band could perform as impersonators, but could not use printed advertisements that evoked the persona and look of the original Fab 4. The court found that the impersonators’ use of the mark, The Beatles, in their name, and their use of the composition of the famous album cover in their marketing materials, was likely to create confusion for consumers. The court therefore issue an order containing prohibitions on using of the names “John,” “Paul,” “George,” and/or “Ringo” in advertisements, using their likenesses in advertisements, or using their famous mark, “The Beatles” in advertisements. The prohibition, the use of the mark, was extended to apply to the live performances, or stage name, of the impersonators. The band subsequently changed its named to “1964 the Tribute” and has gone on to moderate success.

The Tennessee court relied heavily on a New York case involving Jackie Onassis and Christian Dior. Jacqueline Kennedy Onassis v Christian Dior, 472 N.Y.S.2d 254 (1984). The latter had used an impersonator of Onassis for a print advertisement. In the ruling the court stated:

We are dealing here with actuality and appearance, where illusion often heightens reality and all is not quite what it seems. Is the illusionist to be free to step aside, having reaped the benefits of his creation, and permitted to disclaim the very impression he sought to create? If we were to permit it, we would be sanctioning an obvious loophole to evade the statute. The essential purpose of the statute must be carried out by giving it a common sense reading which bars easy evasion.

The court found that the designer had violated Ms. Onassis’ right of privacy under the New York right of publicity statute

So, what is the bottom line for Sarah Palin. Once she successful obtains the registration of her marks, will she be able to prevent Ms. Lyons and her ilk to stop using her persona and her name? Again I say, maybe yes, maybe no. She will most certainly be able to prevent others from benefiting commercially from the use of her trademark and service mark in connection with her specified goods and services. But there is one more factor that may come into play with regard to Ms. Palin. In America, we uphold certain Constitutional principles to be paramount to property monopolies, particularly those of the intellectual types, such as copyright, trademark and, last but not least, rights of publicity. The First Amendment’s guarantee of freedom of speech and the Copyright concept of “fair use” come to mind immediately.

Sarah Palin is more than just a celebrity, she is a politician. Ms. Lyon is more than just an impersonator, she is a political humorist. Therefore, in the event that Ms. Palin ends up suing Ms. Lyon in an effort to enforce her newly obtained trademarks, she may very well have to overcome the defenses fair use and freedom of speech. Ms. Lyons has a constitutional right to imitate Ms. Palin in an effort to “comment upon” the state of politics in this country. However, her website, wisely, does not address politics or political issues, it merely offers her services as a humorist – notably a different service from that marked by Ms. Palin. Her URL is “www.sarahpalinimpostor.com,” while Ms. Gilbert’s URL is “www.sarahpalinimpersonator.com,” arguably not likely to confuse anyone into thinking these are associated with the real Ms. Palin – in fact, they arguable connote the opposite! So it will be unlikely that the real Sarah Palin will be able to prevent their usage of her name in that context.

But this is where it gets interesting. Reread the New York court’s comment above, and you will struck with its concept that an impersonator should not be allowed to create “an obvious loophole to evade the statute.” Exactly what will Ms. Palin be able to prevent. Do the images of Lyons and Gilbert that appear on their respective websites fall into the same category as the Onassis image and the Beatles cover art? The final answer is that it probably depends on the court and, ultimately, upon which law applies. Some states have more expansive rights of privacy and trademark protections. This will certainly be an interesting case to follow as it winds its ways through the courts.

Guest co-author, Ashley Trout, is a sophomore at Belmont University’s Mike Curb School of Music with an emphasis in music business. Ashley graduated Freeburg Community High School (Illinois) in 2009. She prepared the original draft of this article as part of an assignment for Mr. Shrum’s Copyright Law class. She enjoys all things Disney and Harry Potter!

Solutions for the Orphaned Works of Copyright: Google Books Decision Highlights Need for Action

March 29, 2011 by Barry Neil Shrum, Esq.

The recent decision presented by the honorable Judge Chin on the matter of copyright infringement in the case The Authors Guild v. Google Inc. raised numerous issues in the arena of Intellectual Property. In addition to opposing the “opt-out” stipulation written into the settlement, Judge Chin also contested the way Google Inc. approached and viewed “orphan works” in relation to digitizing books where no copyright owner or recipient could be located or reached. In Judge Chin’s opinion, the matter of orphan works should not to be decided by private enterprise, but is rather a matter for Congress to decide. In so deciding, Judge Chin refers to certain opinions issued by the Copyright Office, as well as legislation that was originally proposed back in 2008.

"Orphaned works" are defined as copyrighted works for which the owner cannot be identified, but which someone wants to use. In other words, works for which the potential user cannot locate or identify the actual owner of the work in order to seek proper permission. Under the current legal structure, even if a potential user makes a diligent effort to find the owner in order to seek permission, the user’s risk of copyright liability for such use is not eliminated because there is always a possibility, however remote, that a copyright owner could bring an infringement action after that use has begun. Although it is difficult to know precisely how many orphaned works are around, one 2009 study conducted by the JISC (Strategic Content Alliance) in the United Kingdom calculated that as many as 25 million such works existed in the libraries, museums and archives of that country. In such situations, productive and beneficial use of the work – something the concept of copyright is designed to encourage – is impeded. It is such a real problem that many organizations, like the Society of American Archivists, have issued statements of best practices to assist their members in dealing with orphaned works. But many potential creators are not members of such an organization and don’t know how to approach clearing an orphaned work for use.

Based on a report on orphaned works prepared by the Copyright Office in 2006 at the requests of Senators Orrin Hatch and Patrick Leahy, the “Shawn Bentley Orphan Works Act of 2008” (S. 2913) was ultimately introduced by Senator Leahy on April 24, 2008. It quickly passed by a unanimous vote on September 26, 2008. The act was referred to the House Judiciary Committee, where it unfortunately lies dormant or, more likely, has stalled or died in committee chambers, suffering the fate of many good laws. Several earlier actions which served the same purpose, such as Copyright Modernization Act of 2006 (H.R. 6052) suffered similar fates. The proposed 2008 act outlined specific guidelines for individuals pursuing and currently using orphan works. The following is a brief overview of the proposed bill and its major provisions.

Under the proposed legislation, in order to use an orphan work, a person would be required to follow very specific steps in order to avoid financial and legal liability for infringement. These rules fall under the section entitled “Conditions for Eligibility,” which outlines the following as steps the person utilizing the orphaned works would need to takes in order to limit liability:

provide extensive evidence that the infringer performed a detailed search in “good faith” to locate and identify the copyright holder and was unable to locate the copyright holder;
acknowledge the copyright holder in an appropriate manner, assuming the copyright holder was known with a reasonable amount of confidence (a form of "moral rights");
provide a mark or symbol in some regard indicating the work is used under this section;
assert in an initial pleading the eligibility for such limitations; and
provides documentation for the search undertaken to locate and identify the copyright holder.

The exceptions to the above guidelines for limited remedy collection do not apply to an "infringer" if: 1) the infringer receives notice of infringement and fails to negotiate in good faith with the claimant or 2) fails to provide payment for the use of the infringed material in a reasonable time period after reaching an agreement with the copyright holder.

Additionally, the individual must search with what the legislation described as "diligent effort” to locate the copyright holder. The phrase "diligent effort" requires, at a minimum: 1) a search of the records at the Copyright Office through the medium of the Internet 2) a search of “reasonably available sources of copyright authorship and ownership information” 3) use of intangible and tangible tools and publications, and where necessary, assistance of others and 4) use of databases available to the public, including those accessible by the Internet.

If someone utilizing an orphaned work follows these guidelines, any award for monetary relief “may not be made other than an order requiring the infringer to pay reasonable compensation to the owner of the exclusive right under the infringed copyright for the use of the infringed work.” Injunctive relief remains an additional remedy offered to the owner in order to prevent or restrain any further infringement action.

The act apparently died its quiet death because of opposition from many copyright groups and, in particular, notable expert Lawrence Lessig, who opposed the bill because of its vague definition of the "diligent efforts" required to avoid liability. Some of these opposition groups even referred to the proposed legislation as a “license to steal.” The Register of Copyrights at the time, Marybeth Peters, believes to the contrary that the orphans works situation is a problem that is "overdue" and that the "pending legislation is both fair and responsible (See Marybeth Peter’s open letter).

This issue is particularly of concern for musicians and artists, since a large number of old recordings are no longer commercially available because of an uncertainty as to who owns them. In addition, creators of new recordings must often abandon projects if a work is "orphaned," for fear of liability. This is a loss not only for the artists, but for the public and our collective culture, i.e., the continuum.

Officially, legislator still deem the legislation to be "pending." In his speech in 2009 in from of the World Copyright Summit, Senator Orrin Hatch state he “continue’s to be very active on passing orphan works legislation.” He continued to say:

For years, I have been working with industry stakeholders and copyright experts, including Marybeth Peters, Register of Copyrights, to pass orphan works legislation. The bill seeks to unite users and copyright owners, and to ensure that copyright owners are compensated for the use of their works. I couldn’t agree more with Register Peters when she said, “A solution to the orphan works problem is overdue and the pending legislation is both fair and responsible.

Judge Chin felt that the Google settlement would have given Google an effective monopoly over orphan works, and that was one of his primary rationales in deciding the way he did. His rejection of the Google settlement highlights this important issue and brings it to the light of public awareness again. Anyone with an interest in intellectual property should contact their senators and representatives and ask why a more diligent effort, no pun intended, has not been made to address a problem that still exists, despite the fact that there has been no movement on the bill in three years. With President Obama’s pro-intellectual property agenda, the time may right to solve this incredible hole in U.S. Copyright law.

Congress proposes Copyright Protection for Fashion Design

February 14, 2011 by Barry Neil Shrum, Esq.

By Nathan Drake

The wildly popular and quickly emerging fashion giant, Forever 21, has endured numerous obstacles since its inception into the fashion industry 27 years ago. Recently however, Forever 21 has encountered a new type of hurdle; copyright infringement. In the January 24th edition of Bloomberg Businessweek, Susan Berfield explains, “Starting in about 2004…labels ranging from Diane von Furstenberg to Anna Sui to Anthropologie, about 50 in all, separately sued Forever 21 for copying their clothes.” According to Susan Scafidi, a copyright professor at Fordham University Law School and director of the Fashion Law Institute, “Of the various fast fashion chains, Forever 21 is the one who treats liability as a cost of doing business…Illegal copying has been incorporated into their business model.” In response to this increasing litigation and skewed mentality in the fashion industry, numerous senators, including Senator Schumer and Senator Clinton, introduced a bill in 2006 amending Title 17 of the Copyright Act of 1976 of the United States Code to include copyright protection for “fashion design.” If it passes, this would represent the first addition of a new protected class of copyrighted works since Congress passed the Architectural Works Copyright Protection Act in 1989.

Consequently, the question that looms in the minds of those opposing copyright protection for fashion design is simple: How does one successfully and fairly protect something as functional and practical as clothing? While certain designers and fashion lines will have their own character and price tag, allowing certain individuals to own sleeve designs or collar configurations would prove absurd and oppressive. Just as architecture laws do not provide copyright protection for “functional elements,” such as doors, windows, walls or ceilings, fashion design is limited in what it can deem copyrightable, i.e., original, due to the utilitarian use of clothing.

Support for copyright protection in the fashion industry has gained a backing from several prominent designers and New York’s Council of Fashion Designers of America, according to Louis S. Ederer and Maxwell Preston of Arnold and Porter LLP. The main opponent of the bill has been the American Apparel and Footwear Association. As Preston and Ederer explain, the AAFA has opposed the bill for several reasons, including, but not limited to ambiguous language in prosecuting copyright infringement and the perceived lack of resources to accommodate the influx of applications the Copyright Office would likely encounter. In response to these complaints, Senator Schumer and his colleagues have revised and submitted a new bill to the Senate as of August 5, 2010 (S. 3728).

In the eyes of the law, clothing serves a “utilitarian” purpose in covering a person’s body, so attempting to separate the fashion design from the clothing becomes a very difficult task. Essentially, the copyright law wants to prevent functional styles, such as the collared shirt or the “v-neck,” to remain unprotected due to the utilitarian and practical purpose it provides. To assure this, the current requirements of the Copyright Act would still apply, i.e.¸ that the fashion design would need possess a “modicum” of originality in order to be eligible for copyright protection. The current draft of the S. 3728 specifically states that the fashion design must “provide a unique, distinguishable non-trivial and non-utilitarian variation over prior designs for similar types of articles” (Section 2(a)(2)(B)(ii)).

Furthermore, while there is no perfect answer for an issue as complex as copyright protection for fashion design, working to promote a healthy industry by awarding creativity is an important principle. The revised bill, currently called the “Innovative Design Protection and Piracy Prevention Act” was introduced on August 5, 2010 and remains in the Senate to be discussed and voted on.

The author, Nathan Drake is a senior at Belmont University from Northville, Michigan who graduates in May with a degree in Music Business from the Mike Curb School of Music Business. Nathan currently clerks for Mr. Barry Neil Shrum at Shrum & Associates in Nashville, Tennessee. He plans on pursuing a law degree after graduation.

References

Berfield, Susan. “Forever 21′s Fast (and Loose) Fashion Empire.” Bloomberg BusinessWeek. 20 Jan. 2011. Web. 14 Feb. 2011. <http://www.businessweek.com/magazine/content/11_05/b4213090559511_page_2.htm>.

“Copyright Law of the United States.” U.S. Copyright Office. Oct. 2009. Web. 7 Feb. 2011. <Copyright.gov>.

Ederer, Louis S., and Maxwell Preston. “The Innovative Design Protection and Piracy Prevention Act – Fashion Industry Friend or Faux?” Business Solutions & Software for Legal, Education and Government | LexisNexis. 25 Aug. 2010. Web. 07 Feb. 2011. <http://www.lexisnexis.com/Community/copyright-trademarklaw/blogs/fashionindustrylaw/archive/2010/08/25/the-innovative-design-protection-and-piracy-prevention-act-fashion-industry-friend-or-faux.aspx>.

Schumer, Charles. “Bill Text – 111th Congress (2009-2010).” THOMAS (Library of Congress). 5 Aug. 2010. Web. 07 Feb. 2011. http://thomas.loc.gov/cgi-bin/query/D?c111:1:./temp/~c11198mPaA::.

TIVO v. ECHOSTAR

May 19, 2010 by Barry Neil Shrum, Esq.

Editors Note: The following is a research paper from one of the students in my Entertainment Law & Licensing class I teach at Belmont University’s Curb School of Music.

By G. GRANT GUINANE

On July 30, 1998 Tivo Inc. registered a patent for their multimedia time warping system that allows a user to store selected television programs while simultaneously watching or reviewing another program. They patented their process for making this then phenomenon so as to protect their discovery and to become the exclusive financial beneficiaries of this technology. In 1999 it was announced by Dish Network that along with their affiliate Echostar would soon have the time shifting abilities that Tivo was spearheading. This was the warning sign of what would end up being years of court battles between Tivo and the Echostar-Dish Network team.

Tivo filed suit for patent infringement in January of 2004, once they realized that the patent they obtained was being violated, to seek financial retribution and an injunction against Echostar to halt the production of infringing DVR systems that they were producing. Tivo alleged that Echostar was infringing two software claims, “The process for the simultaneous storage and play back of multimedia data, and the apparatus as well” (Tivo v. Echostar, 2). In addition to the software claims, Tivo asserted that Echostar was violating their hardware patent as well.

The suit was first filed with the United States District Court for the Eastern District of Texas. The court found Echostar to be in violation of both claims by Tivo. The judge issued a permanent injunction against EchoStar ordering them:

(1) to stop making, using, offering to sell, and selling the receivers that had been found infringing by the jury and (2) to disable the DVR functionality in existing receivers, with the exception of select receivers that had already been placed with its subscribers”

(Tivo v. Echostar, 3). In addition, the court awarded Tivo $74 million in lost profits.

At that time, Echostar did not appeal the permanent injunction imposed by the court, but it also did not discontinue providing the DVR service. In response, Tivo requested that the district court hold Echostar in contempt. Echostar claimed that it redesigned its product so that it was not infringing any longer.

The district court evaluated EchoStar’s modifications to the infringing DVR software and concluded that the modifications were also infringing. The court concluded

Even if EchoStar had achieved a non-infringing design-around, EchoStar would still be in contempt because it had failed to comply with the disablement provision in the district court’s order requiring it to disable DVR technology completely from the receivers

(Tivo v. Echostar, 4-5).

Dish and EchoStar had argued that it was entitled to a trial to determine if its altered products infringe the patent. The company said it “paid 15 engineers to spend 8,000 hours on the redesign, which took a year” (Decker and McQuillen). Tivo argued against this point saying that the changes made to their DVR players do not make a “colorable” difference.

The court agreed with Tivo stating,

We have made it clear that a lack of intent alone cannot save an infringer from a finding of contempt”

( Tivo v. Echostar, 12).

Echostar claimed that the injunction was unclear, but Tivo claimed the opposite and the record of the court reflected the clarity of the injunction. Also important to note is that the DVR’s time warping software was the only aspect of the boxes required to be disabled; not all of the actual units and hardware, the DVR functionality is just one of many functions that the Echostar Broadcom and 50X receivers performed. Since Echostar never directly appealed the injunction it was judged as a lost cause for them and the court fined them nearly $90 million and amended the previous injunction requiring EchoStar to seek the court’s approval before implementing future DVR software.

The final decision by the Federal Court of Appeals was to uphold the decision made by the district court in a divided 2-1 decision. TiVo said it will be entitled to a total of about $300 million in damages and contempt sanctions through July 1, 2009, and it will seek additional cash for continued infringement after that date. That’s in addition to $100 million Dish paid TiVo after the original appeals court ruling (Decker and McQuillen). While it is a victory for Tivo, they only got a portion of the $1 billion they were seeking.

This case made a huge impact on the DVR industry as well as Tivo’s stock, which skyrocketed following the May 4^th decision by the federal court. Tony Wible, an analyst with Janney Montgomery Scott LLC in Philadelphia, wrote in a note today. “The courts have ruled in TiVo’s favor numerous times over the past five years, which should help the company in the company’s litigation against AT&T, Verizon and Microsoft” (Decker and McQuillen).

It is a good that courts are protecting intellectual properties such as Tivo’s patent in this case, so as to discourage the stealing of ideas and encourage the promotion of innovative thinking. The court’s decision to find EchoStar in violation was a good decision, as Tivo should be the sole beneficiaries of their intellectual property, i.e., the patent.

To play devil’s advocate, however, such decision does stifle competition in the industry, namely, EchoStar was the only true competing DVR provider with any clout. Generally speaking, it is not good to promote a monopolist environment in any industry. This is essentially the state of the DVR industry until Tivo’s patent expires in 2018.

This decision confirms the principal that the twenty years of exclusive ownership granted by patent law is a positive thing—without that right someone could easily profit off of another’s innovation and inventive nature. It is reassuring to see that judges like those in this case are still interested in the protection of important intellectual discoveries such as Tivo’s time warping technology. It also also reinforces the fact that courts will enforce their injunctions against parties and do not take it lightly when a defendant tries to skirt the injunction or slyly work around it. EchoStar’s was penalized an extra $90 million because they tried to do things their own way and work around the court.

These proceedings took over five years, but Tivo still has many legal proceedings ahead of them, probably enough to last the entirety of their patent ownership and beyond! Nonetheless, the EchoStar decision is the most positive sign that Tivo could have received in the midst of the myriad of legal battles they are still facing. This case proves that if one want to protect valuable ideas and me
thods they had better be ready to fight tooth and nail in the court system for years on end—luckily the reward can be great.

Works Cited

Tivo v. Echostar. No. 2009-1374. U.S. Court of Appeals for the Federal Circuit. 4 March 2010.

Decker, Susan, and William McQuillen. “TiVo Wins Court Ruling Against Dish, EchoStar (Update4).” Businessweek.com. Ed. David E. Rovella. Bloomberg, 4 Mar. 2010. Web. 11 Apr. 2010.

Grant Guinane is a recent graduate of Belmont University. He obtained a B.A. in Entertainment Industry Studies with a focus in writing and music, as well as a minor in marketing. Originally from St. Joseph, Michigan, Grant came to Nashville to pursue music. He currently lives in Detroit, Michigan.

The Limewire Ruling: New King of the Hill for Illegal Downloading Decisions

May 13, 2010 by Barry Neil Shrum, Esq.

The U. S. District Court for the Southern District of New York ruled against LimeWire and its parent company, Lime Group, finding them liable for inducement of copyright infringement based on the use of their service by subscribers.

U.S. District Judge Kimba Wood issued the 59-page decision Wednesday, siding with the 13 record companies that sued Lime Wire LLC and founder and Chairman Mark Gorton through the RIAA claiming copyright infringement and unfair competition.

In finding the company liable, Wood opined that LimeWire had optimized its application to “ensure that users can download digital recordings, the majority of which are protected by copyright,” and that the company actively “assists users in committing infringement.” Wood also found that the defendants knew their technology was being used to download copyrighted tunes and took no “meaningful steps” to prevent the infringement. In addition, Lime Wire marketed its software to people “predisposed to committing infringement” and assisted those people, the judge ruled.

Major labels, as represented by the RIAA, were predictably thrilled with the outcome. “This definitive ruling is an extraordinary victory for the entire creative community. The court made clear that LimeWire was liable for inducing widespread copyright theft,” RIAA chairman and CEO Mitch Bainwol relayed.

Lime Wire Chief Executive George Searle issued a statement saying the company “strongly opposed the court’s recent decision.” The statement continued:

“Lime Wire remains committed to developing innovative products and services for the end-user and to working with the entire music industry, including the major labels, to achieve this mission,” Searle said.

Searle did not say whether Limewire would appeal the ruling.

The Recording Industry Association of America proclaimed the decision was “an important milestone” in the battle against online copyright infringement, because Gorton was found personally liable, in addition to the company of which he was the chairman. Personal liability against a corporate director is rare.

“The court has sent a clear signal to those who think they can devise and profit from a piracy scheme that will escape accountability,” Mitch Bainwol, chairman and chief executive of the RIAA, said in a statement.

LimeWire, launched in 2000, is one of the largest remaining commercial peer-to-peer services left on the Web. The company claims to have more than 50 million monthly users. The company has managed to defend itself against major label legal action for years.

In issuing her opinion, Wood relied heavily on the 2005 Grokster ruling, in which the Supreme Court said that a file-sharing service was liable when customers were induced to use it for swapping songs and movies illegally. The test established by the Supreme Court in MGM v. Grokster for provider liability is whether the company actively induced users to commit infringing activities. While LimeWire argued that it did not, Judge Wood noted that the company actively “markets LimeWire to users predisposed to committing infringement.”

The record companies that sued Lime Wire included Arista, Atlantic, BMG Music, Capital, Elektra, Interscope, LaFace, Motown, Priority, Sony BMG, UMG, Virgin and Warner Brothers.

“Not Accepting Unsolicited Material”

September 9, 2009 by Barry Neil Shrum, Esq.

What songwriters can do to protect their ideas when submitting demo tapes to publishers

Every songwriter has heard the words “sorry, we’re not accepting unsolicited material” from at least a dozen publishers. In fact, in a recent informal survey conducted by Law On the Row, two-thirds of the thirty publishing companies contacted indicated that they do not accept unsolicited material. Additionally, the survey revealed that none of the “major” publishers accept unsolicited material.

As unfortunate as this information is for the aspiring songwriter, it is a good business model for the publisher because it avoids idle submission claims — the theory that a publisher “stole” an idea from a songwriter’s demo tape and used it to write another song based on the same idea or concept. This genre of litigation is also prevalent in Hollywood, where movie ideas are stolen almost as often as hooks in Nashville. Is there anything a songwriter can do to protect his or her material when submitting it to a publisher? The answer, of course, is yes.

Register the copyright. While the $30 fee is sometimes a burden on the struggling songwriter’s budget, registration of the copyright is a beneficial and necessary first step in the process of protecting a copyright. Even though the copyright effectively exists from the moment a song is created, registering the copyright empowers the writer to collect statutory damages (i.e. proof of actual damages is not necessary) and attorney’s fees in a submission claim.

Keep good records of all submissions. The first element a songwriter must show in an idea submission claim is access by the defendant publisher (hence the reason many publishers do not accept unsolicited material). You can establish access by maintaining accurate business records of communications and submissions. (The second element, substantial similarity, is a more subjective determination which must be proven by expert testimony).

Establish a relationship with a reputable publisher. By establishing a good, working relationship with a reputable publisher, you minimize your risks and increase your chance of success as a songwriter. Of course, this is the “catch 22″: how to establish a relationship with a publisher without submitting material.Exposure, exposure, and more exposure. Play or have your material played at every opportunity you can — showcases, writer’s nights, gigs, etc. Don’t play your best material — play your “B” songs, i.e, those that are good but don’t necessarily “knock your socks off.” This is not to imply that every audience is full of infringers waiting to take your hook into the studio and “steal your song,” but the fact is that the typical Nashville audience is probably full of other songwriters whose subconscious minds might “soak up” your idea and regurgitate it in the form of a new song incorporating your idea.

Hire a reputable song-plugger. Nashville has a generous supply of good song-pluggers — people who pitch your songs to major labels for a fee, usually $150-300 per month. Find one with a good reputation and hire him or her. Remember to have all agreements reviewed by an entertainment attorney.Join NSAI. Nashville Songwriters Association International is a good organization with services that will assist you in developing as a songwriter and reaching reputable publishers.

Of course, none of these suggestions will guarantee that your submitted material will not be used illegally by a publisher or songwriter. If you feel you have been the subject of blatant theft of intellectual property, contact a reputable attorney.

This article originally appeared in the print edition of Law on the Row, Volume 1, Issue 1, on September 9, 1999.

Politico’s interview with Corgan following his testimony before Judiciary Committee on HR 848

March 11, 2009 by Barry Neil Shrum, Esq.

Link to Politico Interview

As a follow up to my previous post on the subject, the radio widget above should play Politico’s interview with Smashing Pumpkin’s founder and frontman Billy Corgan following his testimony in front of the House Judiciary Committee in support of HR 848, the Performance Rights Act.

Corgan testified on Capitol Hill on behalf of the musicFIRST Coalition yesterday. Corgan testified that the current sytems is “hurting the music business” because of radio stations’ failure to compensate musicians for performing their music.

My readers know my thoughts on this subject. While I agree with Corgan’s overall sentiment, I stand by my emphasis yesterday that the legislation as it is written may be drafted in favor of the record labels more so than the performing artists.

HR 848 should have a provision that provides for direct payment of royalties to the artists who performed on the sound recording and which specifically does NOT rely on the record labels to distribute these royalties “in accordance with the terms of the artist’s contract.” (See my previous post). This kind of language contained in the House version of the legislation at Section 6 only assures that the record labels would receive all the performance royalties and that performing artists would have to overcome numerous obstacles to ever see any of the additional income, inevitably leading to more disputes with the record label. The current artists agreements with record labels simply do not contain provisions addressing payment of these types of royalties and, even if they did, the artists who have unrecouped balances on their ledger sheets would never see a dime.

My proposal is that the current system for collection and distribution of performance royalties for musical compositions be utilized. Specifically, why not allow BMI, SESAC and ASCAP to collect and distribute the performance royalties for sound recording copyrights on behalf of member artists, allowing these organizations to pay 50% of the income directly to the artists (the original owners of the sound recordings) and 50% to the record labels (the assignee owners of the sound recordings). This structure is identical to the distribution of performance royalties for owners of the musical composition copyright. It’s a systems that has functioned well since the turn of the 20th century and it is a systems that, overall, works fairly well.

In general, members of the performance rights organizations have fewer royalty disputes with these entities over than artists do with record labels, since these entities, for the most part, do not function as profit generators. There is no doubt that this idea has some flaws as well, but in comparing the alternative, it seems to me that this would benefit the artists and musicians much more than giving the money to the record labels.

Technorati Tags: Billy Corgan,Smashing Pumpkins,HR 848,Legislation,Music Industry,Music Law,Entertainment Industry,Entertainment Lawyer

Judiciary Committee holds hearings on HR 848, the “Performance Rights Act”

March 9, 2009 by Barry Neil Shrum, Esq.

The House Judiciary Committee will hold hearings on H.R. 848 (this year’s version of HR 4789) tomorrow morning at 10:00 a.m. Although the Committee’s website does not identify any witnesses at this time, I am informed by musicFIRST that Smashing Pumpkins’ founder Billy Corgan and Mitch Bainwol, chairman and CEO of the RIAA will be speaking on their behalf at the hearing.

H.R. 848 was introduced to the 111th Congress by Rep. John Conyers on February 4, 2009 then referred to committee on the same day. It was co-sponsored by Tennessee representative, Marsha Blackburn. If passed, HR 848 would amend The Copyright Act (specifically Title 17) to provide “parity in radio performance rights” under the Copyright Act. In other words, the Bill would grant a performance rights in sound recordings performed over terrestrial broadcasts (i.e., traditional radio broadcasts, not satellite). S. 379 is the Senate’s complimentary bill, introduced by Senator Patrick Leahy.

The act has certain provisions to accommodate concerns by the broadcast industry, such as the provision which establishes a flat annual fee in lieu of payment of royalties for individual terrestrial broadcast stations with gross revenues of less than $1.25 million and for non-commercial, public broadcast stations; the provision which grants an exemption from royalty payments for broadcasts of religious services and for incidental uses of musical sound recordings; and the provision which grants terrestrial broadcast stations that make limited feature uses of sound recordings the option to obtain per program licenses.

The Act specifically states that it will not adversely affect the public performance rights or royalties payable to songwriters or copyright owners of musical works. In particular, the Act prohibits taking into account the rates established by the Copyright Royalty Judges in any proceeding to reduce or adversely affect the license fees payable for public performances by terrestrial broadcast stations. Requires that such license fees for the public performance of musical works be independent of license fees paid for the public performance of sound recordings.

The full text of the bill can be found at govtrack.us.

One provision I found interesting was Section 6, (1)(A), regarding payment of certain royalties, that states, in full:

A featured recording artist who performs on a sound recording that has been licensed for public performance by means of a digital audio transmission shall be entitled to receive payments from the copyright owner of the sound recording in accordance with the terms of the artist’s contract.

Emphasis added. This last clause intrigues me. What I find interesting about it is that under the current structure, the record labels own most, if not all, of the commercial sound recording masters, i.e., they are the “copyright owner of the sound recording.” This clause entitles the “featured recording artist,” e.g., Madonna, Michael Jackson, etc., to receive payments from the owner “in accordance with the terms of the artist’s contract.”

In most artists’ contracts, payments are based on a percentage of the gross revenues from sales of physical units – current artist contracts do not have provision for payment of performance royalties on the sound recording. It would seem that under the Act as written, there is silence as to what happens in this instance where these specific payments of performance royalties are not addressed in the artist’s contract. One possible remedy would be for the legislators to draft language that would apply, such as what they have done with regard to the “non-featured artists in subsection (B) of the same Section 6. This Section 6 is not found in the Senate’s version of the legislation.

All of this makes me curious about what will happen to performance royalties that are paid under this Act to the owners of the sound recording copyrights, i.e. the record labels if there is no language in the artists’ recording agreements to specify as to what percentage the artist is entitled? One thing is certain: an artist who is not recouped under his artist recording agreement will never see any of these performance royalties under such time as his balance is recouped.

One proposal you might suggest to your representatives is that they consider a payment structure similar to that of the current performance rights organizations that collect and pay performance royalties for musical compositions, wherein one half of the royalties go directly to the songwriter and the other half directly to the publisher. If this were the case under the new Act, half of the royalty payments would filter directly to the artist and the other half would go to the record labels. If there truly is a concern about the recording artists not getting paid for his or her performances, this is the only method that would assure this happens.

If you are a recording artist whose performances are being playing on local FM and AM radios, you should investigate the impact this legislation will have on you. Call you Senators and Representatives and ask them to keep you updated.

Technorati Tags: legislation,HR 848,performance rights act,2009,111th Congress,record labels,music industry,entertainment industry,recording contracts,entertainment law,music law,music lawyer

Music Row gears up for CRS

March 3, 2009 by Barry Neil Shrum, Esq.

When big events like the Country Radio Seminar occur, Music Row begins to buzz with various activities and talk about the celebrities. The Country Radio Seminar is an annual convention designed to educate and promote the exchange of ideas in the country music industry. This year marks the event’s 40th anniversary and it promises to be another great year for attendance.

Among the buzz this year is Gerry House’s induction into the Countr y Music DJ Hall of Fame. House is without a doubt one of the most well known country radio personalities of all time and has been honored many times during his long career as a spinner of vinyl (and now polycarbonate, or make that digits!). He began that career in the small Tennessee town of Maryville at WBCR. In 1975, he stared at WSIX-AM in Nashville then moved over to the FM side in the early ’80s. In 1985, he moved his show to the granddaddy of Country Music Radio, WSM and then to KLAC in Los Angeles. Ultimately, as life often does, he came almost full circle returning to WSIX-FM. In 2008, the Gerry House and the House Foundation morning show on WSIX won “Personality of the Year” awards from the Country Music Association, the Academy of Country Music and Radio & Records. House also received the National Association of Broadcasters’ Marconi Award and Leadership Music’s Dale Franklin Award. Also an accomplished songwriter, House wrote “The Big One” (George Strait), “Little Rock” (Reba McEntire) and “On The Side Of Angels” (LeAnn Rimes). House is joined by the induction Cleveland Ohio’s Chuck Collier, a 30-year veteran of country music radio. On the programming side of the equation, Bob McKay and Moon Mullins are the Country Music Radio Hall of Fame inductees. Merle Haggard will receive the Career Achievement Award and Shelia Shipley Biddy will be presented the President’s Award.

The Country Music DJ and Radio Hall of Fame events unofficially mark the beginning of CRS each year. The Hall of Fame Cocktail Party begins at 5:30 p.m. Tuesday evening. The Dinner and Induction Ceremony follows at 6 p.m. The remainder of scheduled events for CRS are as follows:

Wednesday, March 4

Wednesday’s events kick off at 9 a.m. with the Opening Ceremonies and Award Presentation. The keynote address, delivered by marketing expert Seth Godin, will follow at 10 a.m. in the Performance Hall, with the Motivational Speaker/Life Coach panel at 11:15 a.m. This year’s speaker will be former No. 1 country artist-turn motivational coach Sylvia Hutton.

New label Golden Music will sponsor Wednesday’s luncheon, featuring performances by Benton Blount and Williams Riley. The previously scheduled morning Artist Radio Taping Session (sponsored by SESAC) will now be combined with the afternoon A.R.T.S. panel. As a result, the afternoon session will be extended by one hour (2:30 p.m. – 4:50 p.m.).

Performers at ASCAP’s KCRS Live! will include artists and songwriters Jimmy Wayne, Kelley Lovelace, Ashley Gorley and Jonathan Singleton. The popular Music City Jam^TM (7:30 p.m. – 9:30 p.m. in the Performance Hall) will be hosted this year by Tim McGraw and sponsored by the Academy of Country Music.

Additionally, two educational panels will be featured Wednesday afternoon: “Country Radio As Seen Through The PPM Lens,” sponsored by Arbitron, and “Back to the Future: 1969-2049.”

Thursday, March 5:

Designated as Music Industry Town Meeting Day, single day registration for Thursday’s activities may be purchased on-site for $265. The day’s agenda includes the return of the Tech Track and Small Market Track panels. Tech Track panels include “Spinning a Web” and “40 New Media Ideas.” Small Market panels include “Come Hell or High Water: Disaster Preparedness,” “You’re a PD, Now What?” and “Champagne Production on a Beer Budget.” Sixteen panels will be offered in all during the day between 9 a.m. and 4 p.m.

Thursday’s events begin at 9 a.m. with The Country Music Association revealing the results of its 2008 Country Music Consumer Segmentation Study, conducted by Leo Burnett Co. and Starcom MediaVest Group. Sony Music Nashville’s luncheon (noon – 1:50 p.m.) will feature performances by Miranda Lambert and Jake Owen. At 4:10 p.m. Bobby Pinson, Pau l Overstreet, Josh Turner and Jamey Johnson will perform during WCRS Live! (sponsored by BMI and Country Aircheck).

Friday, March 6:
Friday is Radio Sales Day. Single day registration, including entrance to the New Faces of Country Music Show®, is available for $370 on-site. Friday’s events will kick-off with the Managers’ Breakfast at 8 a.m., followed by CRS-40′s second research study, which will present findings from the Edison Research / CRB National Country P1 Study 2009 at 10 a.m.

Panels during the day will focus on important topics that affect the Country Radio format, such as consumer habits, promotional and research ideas, voicetracking and tools to increase sales. Prominent sales panels include “20 Ideas Even a PD Would Love,” “PPM! Selling the Country Format,” “What’s NTR Got To Do With It?” “Creative Closing” and “A Car Dealer Tells All About Advertising.” More than a dozen panels will be offered during Friday’s activities.

Friday’s luncheon, sponsored by Capitol Nashville, will feature performances from Darius Rucker and Little Big Town. Also during lunch, Operation Troop Aid, a non-profit charity organization, will send 500 care packages from CRS-40 to deployed U.S. troops. Packages will contain phone cards, MP3s, beef jerky, trail mix, hand wipes, hand sanitizer, cookies, candy, granola bars, toiletry items and thank you letters. At 4:10 p.m., Barbara Mandrell will interview Kix Brooks during the Life of a Legend series.

One of Country Radio Seminar’s most popular events, The New Faces of Country Music Show and Dinner (sponsored by R&R and CMA) starts at 6:30 p.m. with performances from Lady Antebellum, James Otto, Kellie Pickler, Chuck Wicks and The Zac Brown Band. CRS-40 will then officially close with the unique 40th Anniversary Jam: A Musical Thanks to Radio, to be held at Cadillac Ranch and sponsored by DigitalRodeo.com. Artists will cover their favorite radio hits from the last 40 years, featuring performances by Emerson Drive, Andy Griggs, Julianne Hough, Jamie O’Neal, James Otto, Blake Shelton, Jimmy Wayne, Chuck Wicks, Mark Wills and Darryl Worley, among others.

A new CRS documentary can be seen during the three-day seminar at the Renaissance and Hilton hotels in downtown Nashville. The film, produced by Art Vuolo and titled WCRS-TV, chronicles various CRS highlights over the last 21 years.

CRS-40 will be held March 4-6, 2009 at the Nashville Convention Center in Nashville, Tenn.

About CRB:
Detailed seminar information and a full agenda can be found online at www.CRB.org. On-site registration is still available for $699 and may be purchased at the Convention Center. The Country Radio Broadcasters, Inc.®, the event sponsor, is a 501(c)3 non-profit organization founded in 1969 to bring radio broadcasters from around the world together with the Country Music Industry to ensure vitality and promote growth in the Country Radio format.