Editing Entertainment Law

{{Infobox General Outline
| subject         = Entertainment Law
| book_one        = Entertainment, Media, and the Law 
| book_two        = Entertainment Law: Cases, Documents, and Materials
| book_three      = Entertainment Law in a Nutshell
| book_four       =
| related        = 
}}
Entertainment Law focuses on the following, all of which affect transactions, contracts, IP rights, etc.:

Speech; Technology; Economics; Collaboration; International Dimensions; Lawyering/Policy

FREEDOM OF SPEECH: First Amendment…”the Gov’t shall make no law…abridging the freedom of speech.”

LEGAL RESTRAINTS ON ENTERTAINMENT STORIES: SEX & VIOLENCE IN ENTERTAINMENT AND THE LAW – FREE SPEECH

First Amendment poses two fundamental types of questions:

(1) Substantive – asks WHAT kinds of speech regulations, are permissible; what is “speech” in the first place?

(2) Institutional – asks WHO should resolve controversies about where to draw the line between speech and action, between individual freedom and community values

Two Sources of legal issues:

(1) Government (censorship and speech)  First Amendment: “Congress shall make no law…abridging the freedom of speech, or of the press…”

(2) Private Actors (ROP, Defamation, Slander, etc.)

Mutual Film Corp. v. Industrial Commission of OH (US 1915): As a profit-oriented business, the entertainment world is not entitled to a constitutional guarantee of “freedom of speech”

Film distro company challenged OH legislation that required every film to be shown to the state board of censors – Board only licensed the film if it displayed “moral, educational, or amusing and harmless characters”

Joseph Burstyn, Inc. v. Wilson (US 1952): Movie was considered abomination, profane, lacked morality, blasphemous, etc.

COURT: Film was an artistic medium entitled to protection under the First Amendment and 14th Amendment

US v. Paramount Pictures, Inc. (US 1948): “We have no doubt that moving pictures, like newspapers and radio, are included in the press whose freedom is guaranteed by the First Amendment”  Entertainment can be protected speech

Kingsley Int’l Pictures v. Regents of the University of the State of New York (US 1959): Overturned NY Motion Picture Division’s refusal to license a film that showed adultery as allegedly being “desirable, acceptable, or a proper pattern of behavior” because Americans have as much of a 1st Amendment right to advocate adultery as they do atheism or socialism

Roth v. US (US 1957): Cannot display the obscenity of adultery’s sexual components

Dennis v. US (US 1951): Cannot advocate for Communism

Beauharnais v. IL (US 1952): Upheld state conviction against white supremacist for handing out racist leaflets encouraging discrimination against blacks, holding the state law against libel of religious or racial groups

Not every restraint on expression is an “abridgement of the freedom of speech” (trademark law, defamation, libel, perjury, criminal activity, etc.) 

POLICY: Tension between Legislative Policy vs. Public/Popular Opinion

[[The New York Times v. Sullivan]] (US 1964): It is the duty of citizens to criticize the gov’t and officials and requires constitutional immunity; “There’s a “profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open, and that is may well include vehement, caustic, and…unpleasantly sharp attacks”

Brandenburg v. OH (US 1969): KKK advocate said “revengeance must be taken” -- First Amendment is violated when punishing the pure advocacy of illegal force; Only “advocacy directed to inciting or producing imminent lawless action and that is likely to incite or produce such action” can be illegal (overturns prior case allowing for punishment of such speech)

Time, Inc. v. Hill (US 1967): Hill family were victims of highly publicized 1952 hostage-taking by escaped convicts

SCOTUS: Overturned jury verdict for Hills on grounds that “knowing or reckless disregard of falsity” rather than negligent failure to make a reasonable investigation was the constitutional predicate to privacy suit

Interstate Circuit, Inc. v. City of Dallas (US 1968): Movie classification ordinance is unconstitutional—Relying on Burstyn, Court concluded that “vice of vagueness” reflected in licensing standards was seriously detrimental to constitutional rights of the motion picture industry and its fans (MPAA created after this)

Miller v. CA (US 1973): MILLER TEST guidelines for what governments can constitutionally restrict as sexually “obscene:”

(1) Whether avg. person, applying contemp. standards, would find work, as a whole, appealing to prurient interest

Meaning: No national standard…Hamling v. US (1974): Jurors draw on knowledge of community standards

(2) Whether work depicts/describes, in patently offensive way, sexual conduct specifically defined by the statute

Ashcroft v. ACLU (US 2002): Child Online Protection Act  Miller Test for this considered overbroad…

THOMAS: Can’t control the Internet, you’re stuck with everyone’s standards

Brockett (US 1985): Its not Court’s job to write regulations for what “patently offensive” means…

(3) Whether the work, as a whole, lacks serious literary, artistic, political, or scientific value

Pope v. IL (US 1987): Must use Reasonable Person standard, not Community standards, protecting work from majority view that its deemed of value  STEVENS says only some reasonable people think, which isn’t necessarily good

MacKinnon—Take law further, in different direction by reformulating understanding of anti-porno law, narrowing/expanding constitutional concept of “obscenity” – Law should target content that risks specific harms to women

Law currently protects against the depictions of such content  Law punishes those who view then act according to the viewing of such content

Booksellers Ass’n v. Hudnut (7th Cir. 1985): Court held law was more constitutionally offensive in that the law excluded most graphic depictions of sex as long as women were equals  “Thought control”

“If the fact that speech plays a role in a process of conditioning were enough to permit governmental regulation, that would be the end of freedom of speech.”  Gov’t as GREAT CENSOR…Not good policy

Easterbrook, “A book about slavery is not itself slavery, or a book about death by poison a murder.”

R.A.V. v. St. Paul (US 1992): SCOTUS struck down ordinance that, on its face, prohibits otherwise permitted speech solely on the basis of the subject the speech itself addresses – Gov’t cannot censor ideas it does not approve of

CURRENT VIEW OF FIRST AMENDMENT: Absolutist; Broadcast is still limited to “civilized” standards, though

SELF REGULATION BY THE ENTERTAINMENT INDUSTRY—Industry claims to be self-regulated, doesn’t need gov’t intrusion

MPAA Creation: City of Dallas case struck down limitations on ratings as vague; so MPAA instituted its own system with more specific guidelines  MPAA ratings are not designed to protect society as a whole…

Jointly administered by National Association of Theater Owners (G, PG, PG-13, R, NC-17)

Ratings chosen by Rating Board in MPAA’s Classification and Rating Administration (CARA)

Producers can edit films with undesirable ratings to address concerns, or appeal ratings decisions to the MPAA

Non-members of MPAA can release films as “Unrated”  Members of MPAA are bound by contract to be rated

Miramax Films Corp. v. MPAA (NY 1990): Court does not have a place or basis in changing the rating that MPAA gave to the Miramax film, as it cannot tell MPAA how to market its films – MPAA is not a gov’t entity, membership is voluntary

Court does take issue with the integrity and unprofessional system  Alludes to issues of fairness in ratings, stigma of ‘X’ rating with porn, are children actually being protected?

POLICY: Should ratings systems like that of MPAA, or the videogame industry which uses age-related ratings, use a specialist?  Do specialists know better, or should be stick to community standards?

Delgado v. American Multi-Cinema (CA Appeals 1999): Young man watched movie Dead Presidents, became agitated by the movie and said he was going to shoot someone, and he did precisely that—Parents sued theater for allowing him in

COURT: Theater didn’t breach duty because the ratings system is not designed to protect nor was it intended to protect society as a whole  Its goal is to protect children from objectionable films, a duty that flows from parents

KEY ISSUE: What exactly is the freedom of speech that is protected? HISTORY:

Sedition Act of 1798—crime to engage in false, scandalous, malicious writings against gov’t with intent to defame, bring them into contempt or disrepute, stir up sedition, violate laws…

Early 20th Century: Courts took the view that any activity that leads to bad activity, including speech, isn’t freedom of speech  Severely limiting (up to WWI)  Modern history of SCOTUS rulings on free speech

Espionage Act of 1917—[[Schenck v. US]] (US 1919): Schenck printed pamphlets saying draft was unconstitutional and encouraged people to fight it—cannot cause insubordination or obstruct the draft (gov’t process)

HOLMES: The question is whether the words are used to create a clear and present danger…It is a question of proximity and degree – this basically foreshadows Brandenburg (imminent threat of danger or harm)

[[Abrams v. US]] (US 1919): Commies spreading commie material – Convicted for improper speech

DISSENT—HOLMES: There needs to be a present danger of immediate evil—only the emergency that makes it immediately dangerous  Congress cannot forbid all effort to change the mind of the country

Whitney v. CA (US 1927): Pure advocacy for illegal force

CONCURRING—BRANDEIS/HOLMES: If you suppress free speech, you need to fear serious injury and the danger apprehended must be imminent—the kind of danger where imminence precedes full opportunity for discussion

[[Chaplinsky v. NH]] (US 1942): There are some well-defined and narrowly limited classes of speech not protected…

Immediate breach of the peace – intention is to inflict injury or incite violence NOT protected

Dennis v. US (US 1951): Cannot advocate for or teach communism  Guilty if organizing and advocating the overthrow and destruction of gov’t…with the intent to calculate the action of this happening as speedily as circumstances permit

[[Brandenburg v. OH]] (US 1969): You can’t forbid advocacy unless it is trying to incite imminent lawless action and is likely to do so  Tendency to lead to violence isn’t enough (Overturns Whitney)

Joseph Burstyn, Inc. v. Wilson (US 1952): Movies are free speech, but they do not get absolute freedom. Prior restraints are subject to extreme scrutiny…cannot force people to show movies to censor org. for permission to show to public

Kingsley Int’l Pictures Corp. v. Regents of State of NY (US 1959): Americans have as much of a First Amendment right to advocate adultery as they do atheism or socialism

(a) Clear and present danger standard is not met…no incitement for illegal action

(b) This is an idea…promulgation of an idea…this is what the First Amendment protects – Freedom of expression

(c) Can’t ban immoral expression

Roth v. US (US 1957): OBSCENITY…Brennan said that protection of speech was to assure interchange of ideas for bringing about political and social changes desired by people…Implicit in First Amendment is the rejection of obscenity as utterly without redeeming social importance (BUT, what is obscene?)

BRENNAN’S STANDARD: Whether to avg. person, applying contemporary community standards, the dominant theme of the material taken as a whole, appeals to the prurient interest – Things couched in such a way that they bypass intellect and art, but appeal to physical impulse  Similar analysis as MacKinnon

PROBLEM NOW: Oops… prurient interest is sufficient proxy for absence of social importance

Skywalker Records v. Navarro (11th Cir. 1992): Miller Test and obscenities apply to lyrics and music as a whole, too

You have to show not merely that the art inspired the violent act, but that the artist intended to incite imminent violence and that this was the likely outcome  Similar to that of Bradenburg

Foreseeability is not enough; for it to be considered incitement it must: Target individuals who you know are likely to imminently react that way, and overtly directs or urges them to do so

Forsyth v. MPAA (9th Cir. 2017): Plaintiffs challenged tobacco use in G, PG, and PG-13 movies—wanted films depicting tobacco use rated R.  9th CIR: Affirmed. Ratings are protected form of First Amendment speech

LIMITING SPEECH THROUGH SLAPP: Plaintiffs must demonstrate a likelihood of success on the merits against an act arising under the First Amendment to avoid a motion to dismiss—SLAPP suit is intended to censor, intimidate, and silence critics by burdening them with the cost of a legal defense until they abandon their criticism/speech

CRIMINAL CELEBRITIES

Simon & Schuster, Inc. v. NY State Crime Victims Board (US 1991): S&S challenges the constitutionality of the “Son of Sam” law—NY singled out one particular subject for financial burden; Only justified if regulation is “necessary to serve a compelling state interest and is narrowly drawn to achieve such an end”

SON OF SAM – (1) Are we targeting expression? (2) Is the expression content-based? (3) If so, strict scrutiny and must look at gov’t interest

Two Compelling Interests for Son of Sam: Don’t let criminals profit; Don’t burden victims

How do we Analyze?  Looking to Brown v. Ent. Merchants (US 2011) and Miller Test

(1) What kind of speech are we looking at? Is it protected? Content neutral?

(2) Content-based regulation of speech that doesn’t fall in a non-protected category must pass strict scrutiny test – furthers public interest for legit state purpose

(3) Furthering the public interest must be narrowly tailored towards the harm (Brown)

Fails: No proof of direct causal language between games and harms to minors; law is under-inclusive b/c it only regulates violent videogames; etc.

Miller Test didn’t help in Brown – speech about violence is not obscene

Can’t create new category for content-based regulation for which speech is directed at kids  Minors have First Amendment rights too

Snepp v. United States (US 1980): Upheld a First Amendment challenge that a constructive trust imposed on all proceeds from the book for the benefit of the CIA was valid  Broke CIA rule of disclosure

Keenan v. Superior Court of Los Angeles County (CA 2002): CA Son of Sam law included provisions for royalties, and all other income, to be paid out to the victims if from a felony conviction

COURT: The provision itself isn’t necessarily unconstitutional if it is narrowly tailored to serve a compelling state interest, and does so; §2225(b)(1) is overly broad, overly inclusive as it includes all income and includes any money derived from any story regarding any felony conviction (too restrictive on creation/expression)

You can write a Son of Sam law that can neutrally seize all profit of crime by pursuing the anti-profit compelling interest and/or the compensation compelling interest

Statutes limiting speech must serve purposes unrelated to the content of the regulated speech, notwithstanding incidental effects on some speakers or messages but not others

ENTERTAINING THE PUBLIC WITH INDIVIDUALS LIVES—TORTS

DEFAMATION

ELEMENTS OF DEFAMATION: (1) Factual Assertion; (2) About (“of an concerning”) the Plaintiff; (3) False; (4) Defamatory in nature; (5) Made to a third party (published, w/o privilege); (6) With requisite degree of fault; (7) That causes actual or presumed damages

Damages

(a) ACTUAL COMPENSATORY—financial loss, loss of standing in the community, emotional distress – NEED proof

(b) PRESUMED DAMAGED  Content of assertion constitutes Defamation “per se”

Imputes commission of a crime involving moral turpitude

Imputes person is infected with contagious disease, excluding them from society

Imputes lack of integrity or ability to perform job; prejudices party in trade

(c) PUNITIVE DAMAGES  Usually requires heightened standard; ill-will or evil motive

What is a “Factual Assertion?”

Crucial question is whether challenged statements convey the requisite factual imputation  ordinarily a question of law for the court

After Court determines statement is reasonably susceptible to defamatory interpretation, question goes to trier of fact

“Whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact…”

[[The New York Times v. Sullivan]] (US 1964): (1) ACTUAL MALICE: Defamation actions brought by public officials require P prove the statement was made with actual malice—(a) knowing its falsity or (b) made with reckless disregard as to the truth; by clear and convincing evidence; (2) Appellate courts must examine the entire record to insure that a trial judgment does not impinge First Amendment freedoms—public’s duty is to criticize

Curtis Publishing Co. v. Butts (US 1967): ACTUAL MALICE standard applies to public figures, not just public officials

Bose Corp. v. Consumers Union of US, Inc. (US 1984): With respect to media…the legal focus is on whether the author entertained significant doubt about the truth of the statement but went ahead with it anyway without undertaking a real investigation of the truth – RECKLESS DISREGARD FOR THE TRUTH

Gertz v. Robert Welch, Inc. (US 1974): Strict liability for defamation is unconstitutional…SCOTUS struck a balance between need to protect private individuals for reputational injury while shielding the media from unavoidable defamation liability

Private individuals are much less able to rebut libelous assertions and do not voluntarily expose themselves to risk of damaged reputation

States should be free to establish negligence standard of liability for defamation of private figures

Masson v. The New Yorker Magazine (US 1991): Cannot put quotations around a supposed statement that materially altered what in fact was said and is defamatory if that alteration has a damaging effect on reputation

DEFAMATION IN ENTERTAINMENT: In contrast to Masson decision, the question much of entertainment faces is whether the FICTIONAL depiction of real figures creates a defamatory statement – Cause of action dies with the individual

Wheeler v. Dell Publishing (7th Cir. 1962): Book Anatomy of a Murder was a story about real-life, small-town murder trial of man charged with killing a man who raped his wife…In the story and in real-life, Defendant was acquitted  Author embellished a number of characters for the story, though  P was portrayed as a disgusting woman and sued…

COURT: P cannot sue for defamation…No reasonable person would identify P with character

Davis v. Costa-Gavras (SD of NY 1987): No evidence that filmmakers acted with actual malice or disbelieved the source of facts for their film—P presented no evidence alluding to actual malice

Absent a high degree of awareness of their probable falsity, one may rely on statements made by a single source even though they reflect only one side of the story

Milkovich v. Lorain Journal (US 1990): Any opinion statement could convey an implied and false factual assertion – not automatically protected speech

Statement must be provable as false—statements that cannot be reasonably interpreted as stating actual facts about an individual are not defamation

Partington v. Bugliosi (9th Cir. 1995): Courts must be wary to restrict opinions…No protection for opinions means there is no room for expression by commentators, experts in a field, or figures closely involved in public controversy  Statements not susceptible to being proved true/false are protected forms of speech

INFLICTION OF EMOTIONAL DISTRESS:

ELEMENTS: (1) Action by D; (2) Extreme and Outrageous; (3) Intentionally or recklessly; (4) Causes; (5) Severe Emotional Distress

Garrison v. Louisiana (US 1964): Even when a speaker or writer is motivated by hatred or ill-will, his expression is protected by the First Amendment—debate will not be uninhibited if speaker runs the risk of being convicted of hatred

Hustler Magazine v. Falwell (US 1988): Public figures cannot recover for tort of IIED without showing in addition to false statements of fact made with “actual malice”, that the statement was knowingly made false or with reckless disregard as to whether or not it was true  Parody isn’t reasonably believed as true; prerogative of citizenship is to criticize public figures

Dickinson v. Cosby (2d Dist. Ct. of Appeal CA 2017): SLAPP litigation is a way to limit the criticism and speech of people who speak out against another…Anti-SLAPP is a way to limit this abusive litigation and stifle excessive litigation against poor Ds

ANTI-SLAPP SUITS: Meant to protect people from suits of questionable merit that are often filed to intimidate speakers into refraining from criticizing a person, company, or project

PRIVACY: INTRUSION ON SOLITUDE

Privacy Torts: Intrusion, Public Disclosure of private info; False Light; Appropriation of likeness (ROP Claims)

INTRUSION: (1) Intentional invasion into private affairs; (2) offensive to reasonable person; (3) regarding a private matter; (4) causing mental anguish/suffering

Pavesich v. N.E. Life Insurance (GA 1905): Privacy rights finally received common law endorsement

4 Distinct Causes of Action from Warren & Brandeis:

(1) Unreasonable intrusion on personal solitude;

(2) Public disclosure of true but private facts;

(3) Presentation of people in a false light in the public eye;

(4) Appropriation of one’s name and likeness (eventually known as Right of Publicity)

Ayeni v. Mottola (2nd Cir. 1994): Filming with intent to broadcast family’s life–“grave issues of the right of privacy in the home” aimed at “broadcasting to the world at large, pictures of intimate secrets of the household”  Basis on 4th Amendment—unreasonable search/seizure of private property; 1st Amendment is a SHIELD…

Wilson v. Layne (US 1999); Hanlon v. Berger (US 1999): RHENQUIST said “surely the possibility of good public relations for the police is simply not enough, standing alone, to justify the ride-along intrusion [of reporters] into a private home”

Dietemann v. Time, Inc. (9th Cir. 1971): Tort of “unreasonable intrusion on personal solitude”; LIFE magazine reporters posed as patients seeking treatment from an unlicensed doctor and recorded him in his home; reasonable expectation of privacy  First Amendment is not a license to trespass even if someone is committing a crime

Briscoe v. Readers Digest Ass’n (CA 1971): Surreptitious electronic recording of a P’s convo causing him IIED is actionable

Galella v. Onassis (2nd Cir. 1973): Public and private figures are both protected from intrusion—There are reasonable bounds of privacy for public figures when gathering news…constant surveillance and such is not ok

Shulman v. Group W. Productions (CA 1998): While the broadcast of accident and rescue scenes were of legitimate public interest, the recording and broadcast of private conversation during transport can be seen by a jury as highly offensive

INVASION OF PRIVACY: (1) Intrusion into a private place, convo, or matter; (2) Highly offensive – balancing test between extent of intrusion under the circumstances (highly offensive to the reasonable person)`

POLICY: 1st AMENDMENT BALANCE: State may not intrude into sphere of news media to dictate what they should publish and broadcast, BUT neither may the media play tyrant to the people by unlawfully spying in the name of newsgathering

POLICY: (Judge Brown) Objected to standard for legalizing publication of private facts—wherever they bear a logical relationship to a matter of legitimate public concern

Gill v. Hearst Publishing Co. (CA 1952): Newspaper couldn’t be liable for publication of a picture of a couple sitting together on a bench  CA later backtracked on this decision b/c it doesn’t have any newsworthy value

Jackson v. Playboy Enterprises (SDOH 1983): No privacy right barring publication even in Playboy of photos “taken on a city sidewalk in plain view of the public eye”  What is the reasonable expectation of privacy in public?

PUBLIC DISCLOSURE OF EMBARRASSING PRIVATE FACTS – (1) Public disclosure; (2) of private facts; (3) offensive to a reasonable person of ordinary sensibilities; and (4) is not newsworthy (FIRST AMENDMENT BALANCE between gov’t and media/public)

Cox Broadcasting v. Cohn (US 1975): States cannot bar publication of truthful info contained in public records that are open to public inspection—Cannot leave info available to the public and then bar the media from printing it (rape name statute)

Gates v. Discovery Communications, Inc. (CA 2004): Interpreted Cox Broadcasting to protect the publication by a TV show of a man’s 13-year old guilty plea to an accessory to murder charge

POLICY Q: Struggle to figure out which facts are private and what is in public domain, how much of the info is public record, can public gain access to the record, how much time has passed, is the info or person’s life private now

Diaz v. Oakland Tribune, Inc. (CA 1983): Tribune reporter checked records and found that student body president was trans…Diaz sued for invasion of privacy  P has burden of proof to show D disclosed private facts publicly and caused injury

Ross v. Midwest Communications, Inc. (5th Cir. 1989): Industrial South Test: (1) Publicity given to matters concerning private life; (2) Publication was highly offensive to a reasonable person of ordinary sensibilities; (3) Matter publicized was not of legit public interest  Liability for public disclosure of private facts

CAVEAT: Not all rape victims’ info is a matter of public concern  Names may be irrelevant when details about the story are not so unique in nature; or when publisher’s concern goes toward general, sociological issue; States still have power to protect rape victims’ privacy by preserving confidentiality of state records

FALSE LIGHT PORTRAYALS: (1) D published info about P; (2) Info portrays P in false or misleading light; (3) Info is highly offensive or embarrassing to reasonable person of ordinary sensibilities; (4) D must have published info w/ reckless disregard as to offensiveness

DEFAMATION—damage to P’s reputation in the community  P’s generally tack on False Light b/c easier than defamation

FALSE LIGHT—psychological harm caused by objectionable misrepresentations – claims die with the individual

Time v. Hill (US 1967): Concerned with Hill family which had been held hostage in the suburban home—this story was used by an author for a fictionalized book and then in a Broadway play – Broadway producer did not check source of Life article

COURT: NYT v. Sullivan actual malice standard also applies to False Light  First Amendment protects publication containing misrepresentations…liability is predicated on showing that the misstatements were made knowingly or recklessly; innocent or negligent misstatement liability presents grave danger to constitutional guarantees

Cantrell v. Forest City Publishing (US 1974): Cantrell’s husband killed with 43 others in bridge collapse; Cleveland paper used Cantrell family’s condition to illustrate impact of the disaster and included a number of inaccuracies

Court: Actual Malice satisfied b/c # of inaccuracies/false statements; contained fabricated depiction of Mrs. Cantrell and false quotes attributed to her; significant misrepresentations about the family

Spahn v. Julian Messner (NY 1967): Involved imaginary biography of Spahn, HOF pitcher  COURT: Concluded that fictionalizing a “personality” of a public figure for purposes of commercial publishing constituted a violation of NY’s Privacy Act; Must still apply actual malice standard—inventions of dialogue, stories, etc. meets the standard

Renwick v. News & Observer Publishing Co. (NC 1984): Found that False Light was duplicative of defamation and refused to find false light torts actionable in the state

Loft v. Fuller (FL App. 1981): A cause of action for invasion of common law right of privacy is strictly personal and may be asserted only by the person who is the subject of the challenged publication.

PUBLIC FIGURES UNDER DEFAMATION AND PRIVACY LAW – Determining who is a Public Figure (look to Actual Malice standard!): (a) “Pervasive fame or notoriety; (b) Voluntary injection or participation in a public controversy for limited range of issues; (c) Maintaining “regular and continuing” access to the media after voluntarily injecting one’s self into a public controversy

Public Figure = Actual Malice ||| Private Figure = Negligence

Gertz v. Robert Welch, Inc. (US 1974): 2 ways in which someone can be judged a “public figure”

(1) Some people obtain such “pervasive…notoriety” and are public figures “for all purposes and in all contexts”

(2) Particular set of facts or circumstances  People who ”voluntarily inject” themselves or are “drawn into” a public controversy that renders them public figures “for a limited range of issues”

Waldbaum v. Fairchild Publications (DC Cir. 1980): 3-part test 

(1) Isolate and define public controversy

(2) Analyze plaintiff’s role in public controversy

(3) Find false statement to be “germane” to plaintiff’s participation in public controversy

Time, Inc. v. Firestone (US 1976): magazine had brief paragraph summarizing Firestone divorce action; divorce received considerable media attention and Firestone gave press conferences

COURT: Firestone didn’t thrust herself into forefront of controversy  divorce is not the kind of public issue that requires proof of actual malice; Not a public figure ≠ no actual malice standard needed, can recover damages

Dresbach v. Doubleday & Co. (DC Dist. 1981): Subject matter of a book on a matter of public interest with facts that are “intimately intertwined with the other subjects of book” with a “logical nexus to P” can be published without invasion of privacy—regardless of passage of time  P is NOT a public figure for this—not automatically a public figure

Did not voluntarily thrust himself into public controversy; Merely a trial witness, not part of crime story

Libel D must show more than mere newsworthiness to justify application of NYT v. Sullivan standard

Street v. National Broadcasting Co. (6th Cir. 1981): P was a public figure b/c she voluntarily thrust herself into the public controversy (access to media, encouraged public interest); Once deemed a public figure in a controversy, person remain as such for the limited purposes of commentary or treatment on that controversy later—Regardless of passage of time

SCOTUS’ purpose for public figure doctrine was to make it possible for publishers to provide info on issues to debating public, undeterred by threat of liability except in cases of actual malice

DISSENT: Passage of time is sufficient to quash; NBC/Author thought P was dead; Examine the present for distinction of public vs. private figure

POLICY Q: Where is the line for who is a public figure for the actual malice standard?

EVOLUTION & NATURE OF PUBLICITY RIGHTS

Right of Publicity (ROP) – the protection of one’s likeness/identity from unauthorized uses  The right to control the commercialization of your identity ||| ROP is based in state statutes – property right: Transferable; Descendible

ROP DISTINCTION FROM FALSE LIGHT/DEFAMATION: False light is clearly a tort that protects reputation with the same overtones of mental distress as in defamation. In contrast, ROP protects a proprietary interest of an individual in his act in part to encourage such entertainment—ROP focuses on economic harms

NY §§ 50-51 of NY Civil Rights Law: misdemeanor and a tort to use the “name, portrait or picture of any living person…for advertising purposes, or for the purposes of trade…without having first obtained the written consent of such person”

Pavesich v. NE Life Insu. Co. (GA 1905): Unauthorized use of person’s photo in ads violates common law right to privacy

O’Brien v. Pabst Sales Co. (5th Cir. 1941): O’Brien could not complain of an intrusion to privacy after he had already authorized countless mailings of his picture to media and fans—calendar did not contain explicit endorsement of PBR and he has no independent right to sell commercial value of his name and likeness

Haelan Labs, Inc. v. Topps Chewing Gum, Inc. (2nd Cir. 1953): Besides statutory right of privacy, there is an independent and assignable common law right in the publicity value of one’s name and picture

MLK, Jr. Center for Social Change v. American Heritage Products, Inc. (GA 1982): APPROPRIATION of another’s name/likeness, whether such likeness is a photo or sculpture, without consent and for the financial gain of the appropriator, is a tort, whether the person whose name/likeness is used is a private citizen or a public figure.

CONCURRENCE WELTNER: This threatens free speech, of which is not confined to exclusively verbal expression. Majority says distributing the likeness of MLK is not speech—financial gain is the watershed of violation of this new right  We should be looking to unconscionability of the violation, not financial gain

ETW Corp. v. Jireh Publishing (6th Cir. 2003): Claim rejected; Artist added significant creative components of his own to Woods’ identity – cannot trump the right of expression in a work like this otherwise it extinguishes artist’s right to profit from creative enterprise—COUNTER: Woods is prominently featured, making money off his image

PUBLICITY RIGHTS AND ENTERTAINMENT SHOWS

Zacchini v. Scripps-Howard Broadcasting (US 1977): Infringement of an entertainer’s ROP is not constitutionally privileged free speech where a broadcaster broadcasts the entertainer’s entire performance during its newscast without permission

Entertainers have the right to be compensated for their time and effort involved in the performance to protect the economic value/incentive to make that investment—protects proprietary interest of individual in his act

DISSENT—POWELL: First Amendment protects media from ROP or appropriation suits—could lead to disturbing censorship of reporting

Estate of Presley v. Russen (DNJ 1981): First Amendment protects the right to depict celebrities in factual/fictional works…ROP does not confer a shield to ward off caricature, parody, and satire. BUT, exploitation doesn’t contribute substantial value to society…Mere copy or imitation, even if skillful/accurate, does not have its own creative component

Rogers v. Grimaldi (2nd Cir. 1989): Rogers Test— §43(a) of Lanham Act does not bar a minimally relevant use of a celeb’s name in the title of an artistic work  Does not denote endorsement, authorship; this would be unduly restrictive

Matthews v. Wozencraft (5th Cir. 1994): Protecting one’s name or likeness from misappropriation is socially beneficial b/c it encourages people to develop special skills, which then can be used for commercial advantage. But, because P was a public figure and all of the facts were part of the public domain, D was entitled to their fair use, including the narration in a fictionalized form—Likeness does not include general facts, even when fictionalized

Hicks v. Casablanca Records (SDNY 1978): ROP does not attach here where a fictionalized account of an event in the life of a public figure is depicted in a novel or movie and is fictitious (constitutional protection)

POLICY Q: What is the proper balance between constitutionally protected creativity and deliberate falsifications?

Marcinkus v. NAL Pub., Inc. (Sup. Ct. of NY 1987): “This book is a work of fiction…”—Paul Marcinkus portrayed to give a sense of historical accuracy and actions/motivations should not be considered real or factual

COURT: Denies motion to dismiss…cannot be said that readers will have no basis for believing that the work is “anything but fiction” and that there is no connection with Marcinkus and the book

Polydoros v. 20th Century Fox (Ca. Dist. 1997): Fictional movie, The Sandlot, supposedly used the likeness of Michael Palledorous (Squint) who the Director grew up with  Name and appearance are not private facts

No violation of person’s privacy or ROP from an author working into a different story a character similar to P

Sandlot is a fanciful work of fiction and imagination…The film is not a portrait of P’s life, reveals no private facts

Maggio v. Charles Scribner’s Sons (NY 1954): Suit dismissed where Maggio’s name and certain personality traits were used for a character authored by Maggio’s WWII colleague for a movie  It is generally understood that novels are written out of the background and experiences of the novelist; Acorn to an Oak…The Oak no longer resembles the Acorn

Seale v. Grammercy Pictures (ED PA 1996): Restatement (Third) of Unfair Competition preventing appropriation did not encompass the making of news stories, books, or films or the advertising of them, unless “the person’s name and/or likeness is used solely to attract attention to a work that is not related to the life and situation of the identified person”

Comedy III Productions v. Gary Saderup (CA 2001): “When artistic expression takes the form of a literal depiction or imitation of a celebrity for commercial gain, directly trespassing on ROP without adding significant expression beyond that trespass, the state law interest in protecting the fruits of artistic labor outweighs the expressive interests of the imitative artist”  Importation of Transformative Use from Copyright Law into ROP Law

Doe v. TCI Cablevision (MO 2003): Predominant Use: If a product is being sold that predominantly exploits the commercial value of an individual’s identity, that product violates ROP and cannot be protected by the First Amendment, even if there is some “expressive” content in it that might qualify as “speech” (Use of “Tony Twist” name to sell comics/products)

Eastwood v. Superior Court of Los Angeles County (CA 1983): Eastwood’s ROP had been appropriated by Enquirer when they deliberately used it to sell their newspaper—They used his name and likeness on the cover of their publication and in related ads, gaining a commercial advantage  have to import Sullivan standard in here, though, as the publication does have rights to publish newsworthy things about Eastwood

CELEBRITY PUBLICITY AS A MARKETING VEHICLE

Johnny Carson v. Here’s Johnny Portable Toilets, Inc. (6th Cir. 1983): A celebrity’s ROP is invaded whenever his identity is intentionally appropriated for commercial purposes – identity is not limited to name or likeness, it includes any characteristic that is clearly associated with the celebrity

DISSENT—KENNEDY: ROP should not be held to include phrases or other things which are merely associated with the individual—ROP should extend past name/likeness, though  All of this justified by 3 policy considerations—none of which support protecting phrases

(1) ROP vindicates economic interests

(2) ROP fosters the production of intellectual and creative works through financial incentives

(3) ROP serves individual/societal interests by preventing unjust enrichment

Memphis Develop. Foundation v. Factors Etc., Inc. (6th Cir. 1980): Celebs have an exclusive legal right during life to control and profit from the commercial use of their name and personality

Motschenbacher v. RJ Reynolds Tobacco Co. (9th Cir. 1974): ROP violated when D used a picture of P’s racecar--Identifiability

Hirsch v. S.C. Johnson & Son, Inc. (WI 1979): Nicknames are also identifiable with Ps and violate ROP – Identifiability

Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959 (10th Cir. 1996): Protected use of players likenesses under the First Amendment because the cards provided social commentary on public figures—Parody; Transformative

Midler v. Ford Motor Co. (9th Cir. 1988): Intentional imitation of a celebrity’s distinctive and widely known voice for commercial purposes constitutes tortious misappropriation—Voice is distinctive; Identifiability

Davis v. TWA (CD Ca. 1969): 5th Dimension’s suit dismissed against TWA for TWA’s use in its commercials of the theme from the group’s hit song, “Up, Up and Away”  TWA purchased rights to use the song – Falls under copyright

Waits v. Frito-Lay (9th Cir. 1992): Court reaffirmed Midler decision and did not allow Frito-Lay to use an impersonator of Waits for a commercial – voice is distinctive—Identifiability

Vanna White v. Samsung Electronics America, Inc. (9th Cir. 1992): A celeb’s name, likeness, signature, and voice are protected by law and cannot be exploited for the purposes of a commercial without consent or compensation

ROP POLICIES: Works of parody or other distortions of celebrity figures are not, from celebrity fan’s viewpoint, good substitutes for conventional depictions of the celebrity and do not threaten a celebrity’s rights – look to “raw materials” and transformation vs. “sum and substance”

Must balance First Amendment concerns with ROP based on whether the work in question adds significant creative elements so as to be transformed into something more than a mere likeness or imitation

Rights of publicity can be maintained only if the proprietary interests at issue clearly outweigh the value of free expression in this context – Guglielmi

Right of publicity is not a censorship right, but an economic right – prevents others from misappropriating the economic value generated by the celeb image

Must also consider, subsidiary to transformative use vs. sum and substance, “does the marketability and economic value of the challenged work derive primarily from the fame of the celebrity depicted?”

Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180 (9th Cir. 2001)—A combination of fashion, photography, humor, and visual and verbal editorial comment on classic films and famous actors and any commercial elements ‘inextricably entwined’ with expressive elements cannot be separated out and are afforded First Amendment protection of the whole

== WHO OWNS PUBLICITY AND ITS VALUE ==

Allison v. Vintage Sports Plaques (11th Cir. 1998): D mounted pictures and such of Hershiser and Allison on plaques and then sold them to collectors—First Sale Doctrine prevents liability under Copyright/Trademark; no ROP claim due to licensing

MLK, Jr. Center for Social Change v. American Heritage Products, Inc. (GA 1982) II: ROP survives the death of its owner and is inheritable and devisable  This holds true even if the person does not exploit their ROP during their lifetime

O’Bannon v. NCAA (9th Cir. 2015): NCAA regulations are subject to antitrust scrutiny and must be tested under the Rule of Reason – When regulations serve legit procompetitive purposes, courts should not hesitate to uphold the regulations

Keller… First Amendment is not a defense to the use of former players’ ROP because the use of such is “far from the transmogrification of the Winter bros.” and the game’s setting was identical to where the public would find the players (on the field)

== COPYRIGHT PROTECTIONS ==

ELEMENTS OF COPYRIGHT PROTECTION—Constitution Article 1 §8 Cl. 8—"To promote the progress of Science and useful Arts…”

Copyright law serves as the bridge that connects artistic creation, technological distribution, and economic returns between producers and consumers of entertainment works  §106 “Bundle of Rights”

FIXED: A work is fixed when its embodiment in a copy or phonorecord…is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration”

Harper & Row Publishers v. Nation Enterprises (US 1985): Harper & Row copyrights violated—No fair use due to “heart of the work,” exploitative purpose/character, usurped the market for the original, good faith/fair dealing  No lesser rights under First amendment due to facts/ideas expressed, regardless of factual nature

POLICY: Dichotomy to be solved is: Whether current doctrine provides the correct blend of private property and public use to generate optimal incentives for consumer welfare  Authors’ economic rights vs. Public’s right and incentive to create

== ORIGINALITY; FIXATION ==

ORIGINALITY: (1) Independently created; (2) Modicum of creativity ||| FIXATION: (a) Embodiment; (b) Duration

Bleistein v. Donaldson Litho. Co. (US 1903): Judges are not to make decisions based upon artistic merit and aesthetic quality; Copyright protection extends to “original works of authorship fixed in any tangible medium of expression”  Doesn’t matter if a picture is an advertisement, a picture is still a picture and worth protection—ORIGINALITY

Feist Publications v. Rural Telephone Service (US 1991): Originality requires independent creation of new intellectual products—something intrinsically different from research and discovery of already existing facts—ORIGINALITY

Miller v. Universal Studios, Inc. (5th Cir. 1981): The expression of uncopyrightable facts is copyrightable--ORIGINALITY

Hoehling v. Universal City Studios, Inc. (2nd Cir. 1980): Facts are in public domain and authors can use research of such so long as they do not bodily appropriate the expression of the original – BALANCE of Creativity vs. Dissemination of Facts

Chase-Riboud v. Dreamworks (CD Cal 1997): Authors can make use of facts/research due to public domain, and if protected expression, these were scenes-a-faire anyway

Horgan v. Macmillan (2nd Cir. 1986): District Court took too limited of a view of the extent to which choreographic material may be conveyed. Snapshot of a dance movement may convey a great deal – quantity and sequency of photos of dances??

CBS v. DeCosta (1st Cir. 1967): “Have Gun Will Travel” guy…Did CBS copy the character/elements?

== INFRINGEMENT—ACCESS, SUBSTANTIAL SIMILARITY ==

Copyrights are violated only if the prior work has been copied, not necessarily duplicated—Copyright law does not prohibit independent creation and sale of an identical work by a subsequent author

IMPERMISSIBLE COPYING: Copyright owner must establish that later author had access to the protected work and that the later work displayed undue similarity to the original creation

Bright Tunes Music Corp. v. Harrisongs Music (SDNY 1976): “innocent copying can nevertheless constitute an infringement”  intent to infringe is not essential under the Copyright Act; No such thing as “innocent intent,” undermines Copyright Law

Three Boys Music, Bolton (9th Cir. 2000): Court endorsed “subconscious access” principle from 2nd Cir. –upheld the reasonability of “access” on the grounds that “teenagers are generally avid music listeners…it is entirely plausible that 2 could remember the song played on the radio and TV for a few weeks and subconsciously copy it 20 years later”

SUBCONSCIOUS COPYING: Everything registers somewhere in our memories…no excuse to say mind played trick in copying

Selle v. Gibb (7th Cir. 1984): While copying must be proved by access and substantial similarity, where evidence of access does not exist, striking similarities may raise an inference of copying by showing that the work could not have been the result of independent creation, coincidence, or common source.

Reinforces the independent value of the “access” requirement as a corollary to “independent creation” right

Similarity must preclude independent creation in order to infer access—P still needs to provide sufficient proof

P must show that similarity is of a type that precludes any explanation other than copying

If lack of access is an undisputed fact, then no amount of striking similarity will sustain an inference of copying

STRIKING SIMILARITY (Factual Copying): If the similarities are so extensive and striking, as without more, both justify an inference of copying can prove improper appropriation  Factfinder applies logic and experience to copying/similarities

INVERSE RULE: Less access = More probative similarity (vice versa)

Associated Artists Entertainment v. Walt Disney Pictures (9th Cir. 1999): Without independent proof of access, similarities fall short of copying that rises to the level of infringement

SUBSTANTIAL SIMILARITY (Improper Copying) Were the parts copied quantitatively and qualitatively more than de minimis:

(1) Protected Expression in the earlier work was copied  Extrinsic; Objective

(2) What was copied is more than de minimis  Intrinsic; Subjective

Nichols v. Universal Pictures Corp. (2nd Cir. 1930): Copyright in works “cannot be limited literally to the text, else a plagiarist would escape by immaterial variations”  ABSTRACTIONS TEST: (a) Access; (b) Probative Similarity; (c) Improper Copying

HAND: There is a point in a series of abstractions where aspects of the work are no longer protected, since otherwise a playwright could prevent the use of his “ideas,” to which, apart from their expression, his property never extended… (cannot copyright stock characters or plot ideas)

Denker v. Uhry (SDNY 1992): Scenes-a-faire are general plot devices that are not copyrightable—Must account for look and feel of two works to determine substantial similarity

Sandoval v. New Line Cinema (2nd Cir. 1998): Pictures shown fleetingly/obscured/out of focus and virtually unidentifiable

Brown v. Perdue (SDNY 2005): Test for substantial similarity is “whether an average lay person would recognize the alleged copy as having been appropriated from the copyrighted work”  Novels had similar plot ideas set against different themes

Copeland v. Bieber (4th Cir. 2015): Songs are sufficiently similar such that a reasonable juror could find songs to be intrinsically similar  Intrinsic similarity involves qualitative/subjective analysis—not purely quantitative analysis

== UNPROTECTABLE STORY PARTS (Scenes-a-Faire, Characters, Ideas) ==

Scenes-a-Faire Doctrine: Incidents, characters, or settings which are as a practical matter indispensable, or at least standard, in the treatment of a given topic (quoting Alexander v. Haley (SDNY 1978))

Walker v. Time Life Films, Inc. (2nd Cir. 1986): Claim that movie Fort Apache: The Bronx copied the book—No comprehensive literal similarity or fragmented literal similarity—literal incidents copied occurred in real life, or were “Stock themes”

Warner Bros. v. CBS (9th Cir. 1954): The Story Being Told Test—the character “The Maltese Falcon” is merely a vehicle for telling the story, rather than essential part of the story itself; therefore, the character does not receive copyright protection

Walt Disney Productions v. Air Pirates (9th Cir. 1978): Cartoon characters are copyrightable, unlike literary characters as they have a visual image rather than just a conceptual quality that easily makes them a form of expression

Warner Bros., Inc. v. ABC, Inc. (2nd Cir. 1981): Total concept/feel of the works/characters was very different, even if similar

FAIR USE – Creating significant value different from the original work  TRANSFORMATIVE

Delineation of outer-bounds of the property right—intended to be equitable rule of reason, balancing protection vs. dissemination

Should look at Fair Use as a second look into Substantial Similarity  Can it be confused for the original?

§107—“the fair use of a copyrighted work…for purposes such as criticism, comment, news reporting, teaching…scholarship, or research” is not an infringement of copyright

(1) Purpose and characters of use (commercial vs. nonprofit purposes)  Commerciality doesn’t preclude fair use

(2) Nature of the copyrighted work  Consider the medium being worked in (photo, music, video, etc.)

(3) Amount and substantiality of portion used in relation to copyrighted work as a whole  “Heart of the work”

(4) The effect of the use on the potential market for or value of the copyrighted work  Usurp the market?

Harper & Row Publishers, Inc. v. Nation Enterprises (US 1985): Publication of parts of an unpublished work does not qualify as fair use…Four Factors examined:

(1) Purpose and Character—Exploitive of notoriety of the copyright work

(2) Nature of the Copyrighted Work—Latitude to disseminate historical info/facts, but this is outweighed due to Ford’s interest in confidentiality and creative control over the timing and context of publication

(3) Amount and Substantiality—Nation took “heart of the work,” regardless of it amounting to approx. 300 words

(4) Market Effects—Single most important factor; Time magazine cancelled its piece and didn’t pay Ford

§107 was amended in 1992 for unpublished works  The fact that a work is unpublished should not by itself bar a finding of fair use based on consideration of all the other relevant factors

Campbell aka Luke Skywalker v. Acuff-Rose Music, Inc. (US 1994): For fair use purposes, the commercial purpose of the work is only one element of the inquiry into the purpose and character of the work

(1) Too much weight given to commerciality of the work, not enough to parody—this was “transformative”

(2) The works are in essence the same, but D parodied the song

(3) This is qualitatively different than the original—even if “heart of the work” was appropriated

(4) These aren’t market substitutes for each other  Distinction must be made between biting criticism that suppresses demand of the original (not protected) and copyright infringement which usurps demand (protected)

Folsom v. Marsh: STORY: “look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects of the original work”

== TRANSFORMATIVE: ==

(1) Taking the work and changing it, modifying it—different and original;

(2) Purpose, achievement is different than the original work (functions different, purpose is different)

Fortnightly Corp. v. United Artists Television (US 1968): CATV systems have little in common with function of broadcasters—they do not broadcast, they receive without editing, signals and do not perform, just like viewers

Copyright Act of 1976 expanded to include cable transmission in “public performance”

Created a compulsory license system whereby cable operators were to pay royalties to program owners

“To perform a work means to recite, render, play, dance, or act it, either directly or indirectly, by means of a process or showing it”  CATV receives signals, receiving is not performing

Sony Corp. of America v. Universal City Studios, Inc. (US 1984): The making of individual copies of complete TV shows for purposes of time-shifting does not constitute copyright infringement and is fair use  No direct copyright infringement

“Must have balance between a copyright holder’s legit demand for effective—not merely symbolic—protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce”

Challenge to noncommercial use requires Ps to prove (a) harm to copyright owner or (b) adverse effect on potential market  If it is commercial, then D has the burden of showing it does not affect the potential market

DISSENT—BLACKMUN: Fair Use must be a productive use, look to the statute—Market is harmed b/c VTR owners obviously would pay to watch TV at their convenience, and thus would likely pay royalties

Time-shifting is noncommercial in the same sense that stealing jewelry and wearing it instead of reselling it is noncommercial

Cartoon Network, LP v. CSC Holdings, Inc. (2nd Cir. 2008): Fixation imposes an (a) embodiment requirement and (b) duration requirement  No direct infringement (see Sony v. Universal) b/c CSC merely provides a system for copying

Look to potential audience of a given transmission—those capable of receiving the transmission

DVR playback transmission is made to a single subscriber and is not to the public

Who is capable of receiving the performance?

== FAIR USE ON THE INTERNET ==

DMCA (Digital Millennium Copyright Act): Made it clear that the transmission of recordings online must be licensed not just by songwriters, but also by record companies when the music is played by webcasters in that function, in effect, as digital jukeboxes and Internet radio

RIAA v. Diamond Multimedia Systems (9th Cir. 1999): Rio mp3 player did not violate copyright law b/c it did not meet the Audio Home Recording Act test (AHRA)

§1001(3) of AHRA: “digital audio recording device” is “any machine or device of a type commonly distributed…for use by individuals…the digital recording function of which is designed or marketed for the primary purpose of…making digital audio copied recording for private use…”

§1001(1) of AHRA: Digital Audio Copied Recording – “reproduction in a digital recording format of a digital musical recording”

§1001(5)(A) of AHRA: Digital Musical Recording – “material object…in which are fixed, in a digital recording format, only sounds, and material statements, or instructions incidental to those fixed sounds, if any…”

UMG Recordings v. MP3.com (SDNY 2000): Copyright is not designed to afford consumer protection or convenience…D cannot misappropriate Ps works b/c there is consumer demand for them  Innovative subscription service not a defense

A&M Records, et al v. Napster (9th Cir. 2001): Peer-to-peer file sharing service by Napster was held to be a contributory copyright infringement and Napster could be held liable for vicarious infringement

SPACE-SHIFTING—Nope…Sony and RIAA don’t apply b/c shifting was not for personal use, files were made available to all

SECONDARY LIABILITY – for a third party’s direct infringement

(1) Contributory – Gershwin (2nd Cir. 1971): “one who, with knowledge of the infringing activity, induces, causes…”

(a) Scienter (Knowledge)

Actual Knowledge

Constructive Knowledge

Inducement*** (this is enumerated in Patent, but not in Copyright)

(b) Material Contribution (Participation)

(2) Vicarious (no mention of this in legislative history in regard to rights in §106)

(a) Right & Ability to Control

(b) Direct Financial Interest

“Dancehall Cases” – hired orchestra plays, you don’t know what they’re going to play, but you have control and benefit from hiring them (like having a license to play whatever songs they play)

MGM v. Grokster (US 2005): Secondary Liability  The software was used so widely to infringe copyrights that it would have been immensely difficult to deal with each individual infringer. The “only practical alternative” was to go against the distributor for secondary liability.

CONCURRENCE—GINSBURG: Liability for inducing infringement, BUT contributory is be viable  Liability even if absent inducement…Little evidence to show that this software was used for noninfringing uses

CONCURRENCE—BREYER (pages 538-546): Agreed with majority on inducement, disagreed with Ginsburg on contributory liability  Ds protected by Sony ruling without inducement…quantities of lawful use almost mirror those of Sony, so Ds meet the standard – need to look at the balance between copyright and new technology

Capitol Records, LLC v. ReDigi, Inc. (SDNY 2013): ReDigi does not have a fair use defense that allow its users to upload/download purchased files to and from the Cloud Locker incident to sale  Space-Shifting

== NOT Fair Use: ==

(1) Nothing new is added, nothing is transformed; use is undoubtedly commercial

(2) Creative works like sound recordings are close to the core of what copyright is protecting

(3) D transmits entire copies of original works

(4) D’s sales will likely undercut the market for or the value of the copyrighted works

Reproduction is found b/c a new file is created and fixed on the appropriate hard disk of the downloading user—doesn’t matter that original file is gone

FIRST SALE DOCTRINE: 17 USC §109—provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display, or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner.

== PERFORMANCE RIGHTS IN SONGS ==

Twentieth Century Music v. Aiken (US 1975): “Passive transmission” of music b/c radio station playing songs already had license to perform—Can’t hold listeners accountable for performance on the radio; Restaurant doesn’t have control either

1976 Copyright Act revisions – Congress rejected Aiken, but preserved practical result in §101 definition or performance

PERFORMANCE: (1) At a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) transmission of a work to a place specified by clause (1) or to the public, by means of any device or process

§110(5) Exemption—Communication of a transmission embodying a performance or display of a work by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes, unless—

(a) a direct charge is made to see or hear the transmission

(b) the transmission thus received is further transmitted to the public

Congress created a bright-line rule based upon the size of establishments for performance

Store less than 2000 sq. ft. or a bar/restaurant less than 3750 sq. ft. can freely play broadcasts of TV/Music, irrespective of the equipment used to do so

Some larger stores and restaurants are safe to do so if their equipment meets certain standards

Digital Performance Right in Sound Recordings Act—Amended §106 §114 to create performance right for recordings

Limited to digital audio transmission; covered only for interactive/subscription rather than standard broadcast

§114—exclusive reproduction right in a sound recording is limited to the right to duplicate the sound recording in the form of copies that directly or indirectly recapture the actual sounds fixed in the recording

Exclusive right to prepare derivative works—limited to actual sounds fixed in the sound recording rearranged, remixed, or otherwise altered in sequence or quality

Exclusive rights do not extend to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted recording

§115 – COMPULSORY LICENSE  MECHANICAL RIGHT: Right of the owner of a copyrighted song

MECHANICAL LICENSE: License between the user and the owner of a copyrighted song that grants permission to use the song in an audio-only format  Can cover, reproduce, or sample

Does Not Include: Use in video/song, dramatic use, performance rights, display/reprint of the lyrics, use in jukeboxes or the likes, sheet music

REPRODUCTION: Lies in the mechanical properties of the song…Must use a machine in order to “perform” or “reproduce” the song

DIGITAL SAMPLING AND IMAGING

SAMPLING—Nope…still commercial even if users eventually purchase the music; markets are hurt by this

Grand Upright Music v. Warner Bros. Records (SDNY 1991): “Thou shalt not steal” …just because stealing runs rampant in the industry doesn’t mean its ok—Ds also sought a license, didn’t get one, and still used it

Jarvis v. A&M Records (Dist. of NJ 1993): Summary Judgment denied for Ds who verbatim sampled parts of P’s song

== WORKS MADE FOR HIRE ==

§201(1)(a) of the Copyright Act says initial ownership lies with the author

§201(1)(b) WORKS MADE FOR HIRE—§101: (1) Works created by employees within the scope of their employment; (2) Specially commissioned works (with substantive and formal limits)

(1) a work prepared by an employee within the scope of their employment  EMPLOYER IS INITIAL OWNER

(2) a work prepared by an independent contractor that falls into any of the nine categories and that is subject to signed written agreement expressly stating that it is a work made for hire  CREATOR IS INITIAL OWNER

Term of protection depends on identity of the author  renewal and termination rights are retained by the author

“Specially ordered or commissioned for use” Must fall into these categories:

As a contribution to a collective work

As part of a motion picture or other AV work

As a translation

As a supplementary work

As a compilation

As an instructional text

As a test

As answer material for a test

As an atlas

If a party expressly agrees in a written instrument signed

Community For Creative Non-Violence v. Reid (US 1989): Under common-law agency principles, one who creates an artwork at the directive of another retains copyright upon it unless the other had employed the artist  Look to the factors of the principles of the common law of agency, then turn to the statute

COURT: Rejected the “right to control the product”  it would de facto eliminate the distinction between works of employees for hire and works of contractors for hire

== JOINT AUTHORSHIP ==

§101 Joint Work: a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole

POLICY: Can the contribution be independently copyrightable? – what is enough?

Childress v. Taylor (2nd Cir. 1991): There must be “joint intent” for joint authorship

Aalmuhammed v. Lee (9th Cir. 2000): A Joint Work is one that was intended by both parties to be a joint work

== COPYRIGHT LICENSING ==

§201(d) of the Copyright Act covers “Transfer of Ownership” – (1) Can be transferred in whole or in part by any means of conveyance (including intestate succession); (2) Any of the exclusive rights, and subdivisions thereof, can be transferred the same, and owned separately. Owner of a particular right can enforce it independently!

§204—Execution of Transfers of Ownership: (a) Not valid unless using instrument of conveyance in a writing signed by owner of the rights conveyed or such owner’s duly authorized agent

Effects Associates, Inc. v. Cohen (9th Cir. 1990): Common sense says agreements should be in writing, BUT combining §§101, 204, allows for oral grant of a non-exclusive license to use copyrighted work—Effects did the work, and handed it over, implying Cohen had a non-exclusive license to use the footage

Cohen d/b/a Bizarre Music v. Paramount Pictures Corp. (9th Cir. 1988): License did not authorize distribution of copies of the movie to the public by sale or rental—VCRs were not invented at the time the license was executed—the license reserved to P all rights except those specifically granted, so P had the rights to distribute videocassettes

== LICENSING: PRESENTATION OF THE WORK THROUGH A NEW MEDIUM ==

Manners v. Morosco (US 1920): Author of a play had granted D the “sole and exclusive license and liberty to produce, perform, and represent the play” – D was not entitled to turn it into a silent motion picture (derivative work)

LC Page v. Fox Film Corp. (2nd Cir. 1936): Author of a book agreed in 1914, and again in 1923, to grant “exclusive moving picture rights” – This permitted D to make a talking motion picture to be made in the 30s

Bartsch v. MGM, Inc. (2nd Cir. 1968): A 1930 license given by playwright/author of musical comedy to MGM to produce then “copyright, vend, license and exhibit…” a movie was interpreted as giving studio the right to show movie on network TV

Subafilms v. MGM-Pathe Commmunications Co. (9th Cir. 1994): Court ruled that video cassette transmission not covered by a 1967 license agreement for Yellow Submarine – license gave MGM the right to “rent, lease, license, exhibit, distribute, reissue, or otherwise deal in and with respect to the Picture” and “theatrical rights in the Picture” included the right to “project, exhibit, reproduce, transmit, perform…by TV and by any other technological, mechanical, or electronic means, method, or device now known or hereafter conceived or created”

Brown v. 20th Century Fox Film (D.D.C. 1992): James Brown, in connection with appearance on TV, assigned to the producers the right to “exhibit, transmit, reproduce, distribute, broadcast, and exploit and license or permit others to do so…all or any portion of the film in all media means whatsoever”  TV producers entitled to license clips of appearance

== WHETHER ORIGINAL LICENSE TO CREATE MOVIE OR OTHER DERIVATIVE WORK CONVEYS RIGHT TO SEQUELS ==

Goodis v. United Artists Television (2nd Cir. 1970): Author of Dark Passage sold exclusive right and entire motion picture rights to broadcast and transmit any photoplay produced by process of TV to Warner Bros—Warner Bros. produced movie by same name and licensed the right to produce a TV series based upon book—license for TV series covered by agreement

Landon v. 20th Century Fox Film Corp. (SDNY 1974): Author of Anne and the King of Siam granted Fox in 1944 sole and exclusive right to motion pictures with provision to adapt and use in all new versions or sequels—and to broadcast by TV or any other analogous means – COURT concluded that fair reading of the original language might not encompass later use

New York Times v. Tasini (US 2001): §201(c)—“copyright in each separate contribution to a collective work is distinct from the copyright in the collective work as a whole, and vests initially in the author”  Unless explicit transfer conveyed otherwise, the publisher acquires the right to publish the article as part of original “collective work” or “any revision” of it

Stewart v. Abend (US 1990): Held that if the author died before expiration, the heirs were not bound by any contractual agreement when exercising renewal rights, so rights to the piece reverted to estate

'''Eldred v. Ashcroft''' (US 2003): CTEA (Copyright Term Extension Act) did not violate the [[US Constitution]] and Congress acted within its authority to grant extension to existing and future copyrights and it does not violate the First Amendment.

== DAMAGES ==

§§502, 503 of the Copyright Act entitles a Plaintiff to temporary and final injunctions as relief for infringement

The need for effective enforcement generally overrides First Amendment qualms

Infringing copies can be impounded while actions are outstanding

Court can order destruction of infringing copies as a final determination

§504 of the Copyright Act allows courts to hand out damages to a prevailing plaintiff

Actual Damages—based upon lost profits, defendant’s profits, combination of both

Statutory Damages—when actual damages are difficult or nearly impossible to prove—must be registered

$750 to $30k for each work infringed

$200 for innocent infringement (minimum)

$150k for willful infringement (maximum)

Statutory damages consider infringer’s state of mind, expenses saved/profits earned, revenue lost by copyright owner, deterrence effect on third parties/infringer, infringer’s cooperation in providing evidence, and conduct of the infringer (willfulness)

Gaste v. Morris Kaiserman a.k.a. Morris Albert (2nd Cir. 1988): Gaste sued Morris/Fermata over the song “Feelings” b/c Morris credited only himself with regard to commercial success of the song—Gaste claimed Morris plagiarized the melody to his song “Pour Toi”  Jury awarded damages to P – 233k against Morris and 268k against Fermata

Fermata argues its reward should be reduced for its contribution of only the lyrics and for the cost of production/distribution—Jury was instructed to make equal apportionment to the parties, if doing so for the lyrics

COURT: No grounds to reject the jury’s determination of apportionment for the lyrics because they were able to independently evaluate for themselves—reasonably interpreted for both sides; Will not overturn jury verdict for costs either b/c they did not act unreasonably given the evidence before them  D has burden to prove costs lie solely with the song, and not other songs

Jarvis v. A&M Records (DNJ 1993): Projected profits or future profits, estimates, are not cognizable—entitled to defendant’s actual profits; also cannot deduct overhead for willful infringement

Courts are empowered, though not required, to award attorney’s fees

Forgerty v. Fantasy, Inc. (US 1994): While attorney’s fees are awarded from time to time for prevailing parties, the practice is entirely subject to the deciding court’s discretion  The use of “may” in statute connotes discretion

ALT. SOURCES OF ENTERTAINMENT PROPERTY RIGHTS – ARTISTIC CREDIT

Smith v. Montoro (9th Cir. 1981): Artistic Credit is a method of advertising; It is the result of ingenuity, inventive genius, skill”

Paramount Productions v. Smith (9th Cir. 1937): Contract breach for no credit—Damages proven b/c credit increased pay

Artistic Credit has IP overtones (Lanham Act), but is mostly based in contract

Writers Guild and Directors Guild are concerned with ARTISTIC CREDIT

Helps secure future work

Helps secure future reputational and financial benefits

Provides specified royalties in the downstream financial returns

Artists can claim credit for work under the Lanham Act -- §43(a) – or 15 USC § 1125

(1) False Advertising | Reverse Passing Off  More common

(2) Likely to cause confusion

Smith v. Montoro (9th Cir. 1981): REVERSE PALMING OFF—Occurs when person removes/obliterates the original trademark, without authorization, before reselling goods produced by someone else

Lamothe v. Atlantic Recording Corp. (9th Cir. 1988): Lanham Act claim only needs (1) False Designation (Reverse Palming Off), or (2) False Advertising  Licensees are liable because they had knowledge of the falsity of accreditation

Cleary v. News Corp. (9th Cir. 1994): Stated the limits of the reverse palming off—Standard is not whether the works were substantially similar, but whether there had been a “bodily appropriation” of the original  There was significant modification of Cleary’s work, and therefore, will not cause consumer confusion as to the designation of authorship

“The Act is not designed to protect authors from denial of credit to which they feel morally entitled”

MORAL RIGHTS AND CREATOR CONTROL

MORAL RIGHTS: Authors’ rights in claiming/disclaiming credit for their efforts; right to determine the content of the work and prevent any subsequent alterations that might materially affect its quality

Inalienable, natural rights of artists in works that are seen as expressive and extensions of their creative personalities

Not adopted into US law – droit moral principle already adequately protected by federal, state, or common law

Visual Artists Rights Act of 1990 (VARA)—exception to the above

Carter v. Helmsley-Spear (2nd Cir. 1995): Involved a massive sculpture that made up lobby floors, walls, and ceiling  A work-made-for-hire is not protected by VARA

Vargas v. Esquire, Inc. (7th Cir. 1947): Court held that an artist who gave up rights in his art work by contract with a publisher could not enjoin the publisher’s use of the pictures after the contract was terminated, even though the publisher did not credit the artist

Granz v. Harris (2nd Cir. 1952): Crediting P to the 10”, not 12”, records is false representation—P is entitled to an injunction

CONCURRENCE—FRANK:

(1) By way of contract or tort, P is entitled to an injunction  actionable wrong to misrepresent, unfair competition, “passing off”

(2) Resting on interpretation of the contract, injunction should include blocked sale even without including the credit  Should not be resting on any “moral right” doctrine – it will be pervasive

Chesler v. Avon Book Division, Hearst Publications (NY Sup. Ct. 1973): “It is clear that even after a transfer or assignment of an author’s work, the author has a property right that it shall not be used for a purpose not intended or in a manner which does not fairly represent the creation of that author” – No moral rights, but Publisher must note changes to book

Preminger v. Columbia Pictures (NY Sup Ct. 1966): Court looked to the standard industry practices at the time when Preminger’s movie was abbreviated for commercial breaks to be broadcast on TV

Gilliam v. American Broadcasting Companies, Inc. (2nd Cir. 1976): D violated the Lanham Act by showing the edited programs and falsely representing their origin—Lanham Act is a way around non-protection of Moral Rights

TRADEMARK – NEWMAN: “Goodwill is the asset that you own”

Trademark is like having an easement—you don’t necessarily have a trademark in a word (Nike, for instance, was a Greek God prior to the brand); you have an easement and interest in using it These are NUISANCE cases, NOT trespass cases

§1127 – LANHAM ACT: Trademark is “any word, name, symbol, or device…used by a person…to identify an distinguish his or her goods…from those manufactured and sold by others and to indicate the source of the goods…”

Infringement is claimed under §32—Even if the mark is not registered, §43(a) allows for an action to be filed  Common Law doctrine against unfair competition

For infringement, there generally needs to be “a likelihood of confusion” – or deception of consumers

BASIC DOCTRINE: Trademark exists to protect consumers in their choices of goods/services; It provides an incentive to producers to preserve and enhance the attractive qualities of their products

Frederick Warne & Co. v. Book Sales, Inc. (SDNY 1979): Even though contents of Peter Rabbit have passed into the public domain, the cover illustrations might still be protected trademarks identified with the publisher and its goodwill/reputation

New Kids On The Block v. News America Publishing (9th Cir. 1992): “A nominative use of a mark---where the only word reasonably available to describe a particular thing is pressed into service—lies outside the strictures of trademark law…it does not constitute unfair competition; such use is fair because it does not imply…endorsement by the trademark holder”

Rogers v. Grimaldi (2nd Cir. 1989): Balance needs to be struck between trademark 1st Amendment rights

SECONDARY MEANING?  Holder of the rights to title may prevent the same or confusingly similar use by others

Artistic and commercial elements of titles are intertwined…but we need to protect artistic expression and requires more protection than the labeling of ordinary commercial products

ROGERS TEST  Trademark violation if (1) there isn’t artistic relevance to the underlying work, or (2) if there is some relevance, it explicitly misleads as to the source or content of the work

Dastar v. Twentieth Century Fox Films Corp. (US 2003): “Bodily appropriation” without proof of “consumer confusion” was not sufficient to create a trademark violation—Dastar took creative work from public domain, copied it, and made modifications to make its own series – Trademark claims would create “mutant copyright law” and violate “limited times”

Hormel Foods Corp. v. Jim Henson Productions, Inc. (2nd Cir. 1996): Relief denied b/c Muppets were parody, no bad faith

Polaroid Test: STRENGTH // DEGREE OF SIMILARITY // MARKET PROXIMITY // BRIDGING THE GAP // ACTUAL CONFUSION // BAD FAITH // QUALITY OF PRODUCTS // CONSUMER SOPHISTICATION

In re Tam Fed. Cir. 2015: USPTO can deny the registration of disparaging marks

Boston Professional Hockey Assoc. v. Dallas Cap & Emblem Mfg. (5th Cir. 1975): Ban on sales of non-licensed gear—(1) Commercial value of the emblems is derived from efforts of Ps; (2) D could have sought for exclusive license; (3) Sale of a reproduction of the trademark itself on an emblem is an accepted use of such team symbols in connection with the type of activity in which the business of professional sports is engaged

BAA v. Sullivan (1st Cir. 1989): When a manufacturer intentionally uses another’s mark as a means of establishing a link in consumers’ minds with the other’s enterprise, and directly profits from such link, there is an unmistakable aura of deception

BREYER—FIRST CIR.: Intangible benefits are something legislators debate, and enumerate in statutes and such; Trademark statute does not give BAA any “property right” in their mark except the “right to prevent confusion”

Browne v. McCain (CD CA 2009): Trademark applies to noncommercial and commercial speech—Analyze under Rogers Test

Federal Trademark Dilution Act of 1995—amended §43 for DILUTION: Lessening the capacity of a famous mark to identify and distinguish goods/services

§43(c)—factors for determining “famous” marks  degree of distinctiveness, duration and extent of use, trade channels, geographic areas, mark’s degree of recognition, and registration

BLURRING—where D uses or modifies P’s trademark to identify D’s goods/services

TARNISHMENT—Where P’s trademark is linked to lesser quality goods/services

Media Industry under §43(c):

Fair use of a mark in comparative commercial advertising is not actionable

Noncommercial use of a mark is not actionable

News reporting and commentary is not actionable

Hormel Foods Corp. v. Jim Henson Productions, Inc. (2nd Cir. 1996): No dilution by blurring, PARODY; No dilution by tarnishment, Spa’am is a likeable, positive character and will not generate negative associations with P (sin qua non)

Matal v. Tam (US 2017): Disparagement Clause prohibits trademarks that disparage members of a racial or ethnic group and violates the Free Speech Clause of the First Amendment

Disparagement Clause is not a permissible regulation of commercial speech b/c it was not narrowly drawn to serve a substantial interest—too broad to serve government’s stated interest of protecting commerce

CONTRACT RIGHTS IN STORY IDEAS

THEME—STOLEN IDEAS: P must show that submission moved beyond the realm of “idea” and into the domain of “expression”  Common in the movie industry for writers to submit “Treatments”

Treatments generally are not protected under copyright law – writers must seek other laws to protect their work

Desny v. Wilder (CA 1956): CONTRACT CLAIM—DESNY CLAIM

(1) P must show he prepared the work

(2) P must show the work was disclosed to the offeree for sale; and

(3) P must show the work was disclosed under circumstances from which it can be concluded that offeree voluntarily accepted disclosure knowing the conditions on which it was tendered and the reasonable value

Blaustein v. Burton (CA 1970): Implied contracts can be determined from disclosure/discussion of story ideas—CONTRACT PRINCIPLES—Offer/Acceptance and other issues are facts to be determined at trial

Whitfield v. Lear (2nd Cir. 1984): Contract can be implied from conduct of the parties

Art Buchwald v. Paramount Pictures Corp. (CA 1990): P demonstrated that his story treatment and Paramount’s unsuccessful scripts based on treatment were similar to that of Coming to America – ACCESS, court determined that the movie’s story was based upon the treatment  Payment to P is required due to the contract

Murray v. NBC (2nd Cir. 1988): Court concluded that NY law required that idea (Cosby Show) must be truly “novel” to be valid consideration for contract—Ideas get free use when merely clever or useful adaptations of existing knowledge

Nadel v. Play-By-Play Toys & Novelties (2nd Cir. 2000): Novelty is sufficient consideration to support a contract, but an idea can be non-novel in a general sense and may have substantial value to a particular buyer; buyer would be unjustly enriched if he could just take the idea and profit from it

Grosso v. Miramax (9th Cir. 2004): Densy Claim; express promise to pay is not necessary

Baer v. Chase (3rd Cir. 2004): Enforceability of (implied) contracts requires definiteness w/ respect to essential terms

Mann v. Columbia Pictures, Inc. (CA 1982): Must show access/similarity for a claim to hold…D can refute this w/ evidence

Even if D presents evidence of independent creation, P may still have legal recourse  P can try to prove “striking similarity” and create the inference of actual use

CONTRACT FORMAILITIES

2 Distinctive Features of the Entertainment Industry Shape Contractual Issues (Movies are a “Shell Game”):

(1) Sum of a host of creative efforts by several parties

(2) Unpredictability of success and risk of failure

Attorneys face a major challenge in contracting for entertainment due to tight time constraints

Agents typically negotiate the major deal points before hand

(a) Oral Agreement

(b) Deal Memo/Letter of Intent (usually goes unsigned)  Material terms of the agreement (Pay, Credit, Control)

Courts only enforce deal memos if they are executed and contain definite language explaining material provisions

Parties generally avoid going to court over disputes due to reputational harm in the industry by few big-arm players

The Basinger-Main Line Case: Basinger is liable (did not sign deal in 7/10 movies, oral agreement relied on)—CONDUCT

STATUTE OF FRAUDS: Requires that personal service contracts that are not performable within one year of the contract being made must be reduced to a writing in order to be binding

MGM, Inc. v. Schneider (NY 1976): MGM sued Schneider for breach of contract  1971 Agreement stated 5 1-year option terms; performance could be completed within a year of the initial agreement – the options were 1-year renewals

Elvin Associates v. Aretha Franklin (SDNY 1990): When a party justifiably acts in reliance on another’s oral promises, it would be unconscionable not to compensate the relying party for any losses sustained as a result of the broken promise

Gold Seal Productions v. RKO Radio Pictures (Ct. of Appeals CA 1955): It is not necessary that each term of an oral agreement be spelled out in minute detail – when agreeing on certain terms with MUTUALITY that they become binding, the mere fact there is no formal written agreement does not preclude the binding effect of the oral agreement

Four Factor Test from Second Circuit for Determination of Contract Existence:

(1) Whether there has been an express reservation of the right not to be bound absent a writing

(2) Whether there has been partial performance of the alleged contract (CONDUCT)

(3) Whether all of the terms of the contract have been agreed upon (MATERIAL TERMS)

(4) Whether the contract concerns complex and substantial business matters that would not ordinarily be the subject of an oral agreement

DEFINITENESS

Courts use “interpretive aids” where a contract is not quite definite enough with its terms—Language, Conduct, Mutuality

“BEST EFFORTS” – Common disputes due to lack of DEFINITENESS; terms need to have some definiteness for valid contracts

Pinnacle Books, Inc. v. Harlequin Enterprises Ltd. (SDNY 1981): “Best efforts” is enforceable, but it is too vague—Needs definiteness, objective criteria for parties to benchmark (parties only agreed to negotiate in best efforts)

CONSIDERATION AND MUTUALITY

CONSIDERATION serves 2 Functions:

(1) Provides a court with objective evidence of the parties’ intent to enter into a binding agreement

(2) Parties themselves will act more carefully if they know providing consideration will make promises enforceable

MUTUALITY: Legal detriment to both contracting parties

M. Witmark & Sons v. Peters (NY 1914): Contract lacks mutuality b/c Peters had to convey all rights to his music during the Term, but Witmark only had to publish 3 compositions at their leisure—Agreement did not obligate Witmark to publish/sell any minimum number—lopsided contract, no mutuality

Wood v. Lucy, Lady Duff-Gordon (NY 1917): Implied promise to sell goods using “reasonable efforts” can serve as valid consideration—in D’s best interest b/c he was making money selling the goods with his exclusive license

Bonner v. Westbound Records, Inc. (App. Ct. IL 1979): A contract does not necessarily need consideration and mutuality in order to be considered a valid, binding agreement—Can recover under the theory of promissory estoppel

CONSIDERATION—valid in this case because of advance royalties paid—OH Players not obligated to pay this back

MUTUALITY—Even if there is a lack of clear mutuality, there was mutuality and the parties intended to be bound to each other due to performance  Good faith/fair dealing w/ reasonable/best efforts to sell records is mutuality

Beastie Boys v. Monster Energy (SDNY 2013): No reasonable juror would be able to find offer, acceptance, consideration, or mutuality among the communications between the 2 parties; no reasonable juror would think that Z-Trip had the authority to grant permission for the songs to be used

CONTRACT PARTIES: MINORS

Common Law: Minors do have to pay for “necessary” goods that were received and used, but they could not be constrained by contractual promises made for the future

Can perform for a specific, current project – but cannot contract for future work

Law allowed parents to keep the money

Law also allowed for 100% of risk falling onto the other party contracting with the minor

Shirley Temple – CA create law that allowed minors to enter into agreement for creative and artistic services; these agreements required language approved by a judge and minors could not get out of them as they wished

Big worry for minors was that parents were keeping and spending all the money, they had no protection  CA added authorization for the courts “to require setting aside and preservation for the benefit of the minor of up to one half of the net earnings of the minor” in statute

Court had continuing jurisdiction over any trust

No more than 50% to be set aside by the court

Warner Bros. v. Brodel (CA 1948): Court held that the statute (above) authorized judicial approval of studio options as well as contract commitments to use the services of child performers

NY has similar statute – places 3-year Term on such agreements  Judicial approval is needed for renewal and revisions

GOAL OF STATUTES FOR MINORS: Manage the tension between legal guarantee against threat of non-performance by minors and protecting minors from entering into unfavorable contracts

Legislature protects children from exploitation and precludes using the minor’s age as a sword to kill a contract

Judicial Scrutiny of statutes for minors provides:

Incentives to minors/parents to perform

Protection from exploitation, reduction of uncertainty and eventual litigation costs

Scott Eden Management v. Kavovit (NY 1990): Minor must continue to pay all commissions to agency under the contract—Disaffirmance does not entitle a minor to be put in a position superior to the one he occupied before—Minor cannot retain the advantage from a transaction which he repudiates

PERFORMER/AUTHOR OBLIGATIONS  CREATIVE CONTROL

Entertainment can be unpredictable – obligations may need to be flexible within the agreement – must examine breach

Contracts in the entertainment industry: (1) IP Rights and (2) Personal Service Contracts--OBLIGATIONS

Ambiguity means courts will lean towards non-drafting party  Inequality of bargaining position is common

(1) Drafters are more likely to provide careful protection of their interests;

(2) Drafters are more likely to know of vague and uncertain terms; and

(3) Drafters may have deliberately obscured certain terms with intention of deciding later what meaning attaches

CONTRACT OF ADHESION: Standardized contract, which, imposed and drafted by a party of superior bargaining authority, relegates to the subscribing party only the opportunity to adhere to the contract or reject it

CBS, Inc. v. Merrick (9th Cir. 1983): Breach rested in part on traditional notions of reliance/waiver–CBS took actions based on Merrick’s behavior/conduct; even though written/signed agreement was needed, conduct proved otherwise

Traditional Breach Doctrine in Contract Law – Courts look to:

(1) Extent to which the non-breaching party is deprived of a benefit reasonably expected

(2) Whether the non-breaching party will be adequately compensated for the loss through damages

(3) The degree to which the performer has partially performed obligations under contract

(4) Willfulness of the breach

Goudal v. Cecil B. DeMille Pictures Corp. (Ct. of App. CA 1931): P did not breach her agreement or refuse to perform pursuant to the language of her agreement by way of adding to, making suggestions, and changing parts of performances

MORALS CLAUSES

Loew’s, Inc. v. Cole (9th Cir. 1950): Breach reversed and remanded…A film company might well continue to employ an actor whose private personal immorality is known to his employer, and yet be fully justified in discharging the actor when he so conducts himself as to make the same immoral conduct notorious

Loew’s (Sample) Morals Clause: “…not to do or commit any act or thing that would tend to degrade him in society or bring him into public hatred, contempt, scorn or ridicule, or that would tend to shock, insult or offend the community or ridicule the public morals or decency, or prejudice…the industry…”

CIVIL RIGHTS IN ENTERTAINMENT ROLES

Pryce (white) cast in Miss Saigon as an Asian and producers not offering or seeking out Asian actors

Tylo’s dismissal from Melrose Place for violating her contract due to a “material change in appearance” b/c her character was to be a vixen trying to seduce someone on the show

Other actress got pregnant and remained on the show; Tylo gained weight… they fired her

Peckinpaugh was oldest of three female anchors – Station was cutting talent, appraised performances, cut Peckinpaugh  claimed discrimination based on sex/age

NON-COMPETITION CLAUSES

Clauses are only valid if they are ancillary to an independent agreement – must be related to the (1) legit interests of the parties and (2) must not impose an unduly broad restriction on the party bound to the commitment

POLICY: Courts must determine (have to balance competition vs. limits to creativity):

(1) Whether the new and old projects are too similar; and

(2) Whether the projects would compete with each other for profits

Harlequin Enterprises v. Warner Books (SDNY 1986): Two book series by author will (1) not attract same readership and (2) book series will not compete with each other (author signed with competing publisher; series were of two different genres)

STUDIO & PUBLISHER OBLIGATIONS: SATISFACTORY PRODUCT & BEST PROMOTIONAL EFFORTS

Harcourt Brace Jovanovich, Inc. v. Barry Goldwater (SDNY 1982): HBJ could not call the work unsatisfactory and reject it because it did not provide its end of the bargain…HBJ did not perform any editorial work or provide the authors any opportunity to remedy any defects with the manuscript – SATISFACTORY PRODUCT

Doubleday & Company, Inc. v. Tony Curtis (2nd Cir. 1985)—846-849: A producer may, in its discretion, terminate a production contract, provided that the termination is made in good faith and the failure of the creator to submit a satisfactory product was not caused by bad faith of the producer – not satisfactory = termination, if not in bad faith

Court declines to extend a duty to perform skillfully; and to imply a duty to perform adequate editorial services in the absence of express contractual language would create an unwarranted intrusion into the editorial process

Little Brown and Co. v. Klein (NY Sup. Ct. 1993): A material breach to an agreement allows a publisher the right to terminate a contract prior to some deadline for an author’s performance, entitling publisher to return of any advances paid

BEST EFFORTS: Courts typically read into contracts an implied obligation on publishers/labels to act in good faith by expending “reasonable efforts” to promote/market works

POLICY: Why are they doing this? Mutuality? What if this isn’t specifically bargained for?

Without enforcing “best” or “reasonable” efforts public aren’t aware of products and creators don’t make money

Wood v. Lucy, Lady Duff-Gordon (NY 1917): Courts typically read into contracts an implied obligation of publishers/labels to act in good faith by expending “reasonable efforts” to promote

Zilg v. Prentice-Hall, Inc. (2nd Cir. 1983): When a publisher contracts to have the exclusive right to publish a book, it also has the implied right to make good faith efforts to promote the book and give it a reasonable chance of success

LIMITED by initial actions; thereafter, business can make good faith business judgments as to nature future success

“Best Efforts” are something to be bargained for – do something adequate to give the book a reasonable chance…

P can prove breach of contract for “best efforts” if he shows

(1) Initial actions could not possibly give a reasonable chance of success; OR

(2) That greater actions/ efforts weren’t undertaken for reasons other than a good faith business judgment

ROYALTIES AND PROFITS

Buchwald v. Paramount Pictures Corp. (Sup. Ct. of CA of LA 1990): This was a contract of adhesion – Imposed and drafted by the party of superior bargaining strength, relegated to a subscribing party with only the opportunity to “take it or leave it”

Substantively Unconscionable—must be evaluated at the time the contract was made; looking at the reallocation of risks of the bargain in an objectively manner  Objectively unreasonable? Unduly harsh?

BUT, enforceability of the clause is tied to the procedural aspects of unconscionability such that the greater the unfair surprise or inequality of bargaining power the less unreasonable the risk allocation which will be tolerated

Williams v. Walker-Thomas Furniture (DC Cir. 1965): Unconscionability—Standard was in the “absence of meaningful choice on the part of one of the parties together with contract terms which are inherently favorable to the other party”

Estate of Jim Garrison v. Warner Bros.: Class action denied— “since upfront comp varied from class member to class member, is individually negotiated, and all are treated differently (generally), class action would be inappropriate

Unconscionability w/in Music Industry—Letter of Intent (Deal Memo)  then Long-Form Agreement

These are usually legally binding, and bands do not realize this—obligates artists to conclude a deal with a label

Prohibits deals with other labels without contracting label’s consent

Consent usually obtained for a fee to release artists from current deals

Artists typically make 11%-13% off record sales (standard retail list price—SRLP), but with deductions and don’t receive royalties until advances are recouped

Deductions: Production costs, royalty rates of others (engineers, producers, etc.), packaging costs, promotional stuff, 90% of shipments to cover costs for breakages, reserves to cover returns for poorly sold records, other formats, commissions due to managers

Artists also make money by touring – labels will advance money for a tour to cover expenses; larger musical groups run into more trouble due to spreading the money thinner and earning less revenue than total expenses  tour support costs are recouped by contract (same with music videos)

Songwriters: Entitled to royalties for public performances of their music and for the recording

MECHANICAL ROYALTY: If Compulsory License is used, then songwriter is entitled to 9.1 cents per song for 5-min songs  This can be changed with licensing agreement between the parties

Statutory rate is a ceiling – typical rate is 75% of statutory rate

Institutional Outfits for licensing: SESAC, ASCAP, BMI  they grant blanket licenses to their music catalogues

ENTITLEMENTS TO PAYMENTS

Septembertide Pblg., B.V. v. Stein & Day (2d Cir. 1989): Complications with multi-party nature of business deals; Stein & Day’s failure to make timely payments for the hardcover was not sufficiently substantial or willful to justify rescission by Septembertide; triangular relationship made Septembertide a 3rd-party beneficiary to NAL paperback contract, and this took precedence over Bookcrafter’s loan to Stein & Day b/c Septembertide was still owed under original contract

In re Waterson, Berlin & Snyder Co. (2d Cir. 1931): Grant of title to the copyrights from the composers was absolute, but it would be inequitable to allow sale of them, free from royalties, even if they had not been worked given that publisher was to work and sell them under prior grant

Even when one is entitled to royalties, the relevant statute of limitations can block receipt of such royalties if they have not been paid/claimed  Doctrine of Continuous Accrual can provide a way around procedural limitations

Gilkyson v. Disney Enterprises, Inc. (App. Ct. CA 2016): The Doctrine of Continuous Accrual should be applied here because the royalty payment provisions are divisible, contractual rights and have their own, separate causes of action each with its own limitations period

DOCTRINE OF CONTINUOUS ACCRUAL: Each breach of a recurring obligation is independently actionable

CONTRACT REMEDIES

INJUNCTIVE ENFORCEMENT OF PERSONAL SERVICE CONTRACTS

Equitable remedies help prevent artists from evading contractual obligations  Difficult to measure lost profits

NEGATIVE INJUNCTION: Requires a party not to do something or to stop doing something (not for compelling service)

POLICY: What’s the purpose?  (a) Prevent profiting off efficient breach; (b) Preserve status quo; (c) Performers aren’t fungible; (d) Monetary damages are inadequate

PRELIMINARY INJUNCTION: Moving Party must (a) Demonstrate irreparable harm; (b) Likelihood of success on the merits

GENERAL EQUITY DOCTRINE

No specific performance for entertainment/personal service contracts:

Performer might not perform at the level they contracted to perform (upset, don’t want to be there, etc.)

Production Co. doesn’t want to work with performer and makes it painful

Monitoring and enforcing performance are too costly and burdensome

13th Amendment ban on involuntary servitude

Lumley v. Wagner (Eng. Rep. 1852): Court didn’t compel Wagner to sing for Lumley—enjoined breach of her negative promise not to work for another (no clause necessary to obtain injunction, as long as agreement makes exclusivity clear)

Harry Rogers Theatrical Enterprises v. Comstock (NY App. Div. 1928): Unusual and unique characteristics of services enables D to pick up attention of audiences and hold their interest; the nonperformance of such services from a person of this stature causes irreparable harm and P is entitled to a remedy in equity

Negative covenant is implied and enforced against D and 3rd parties from doing acts that induce/cause breach

NEGATIVE INJUNCTION FACTORS – Courts will avoid unduly harsh or burdensome injunctions:

UNIQUENESS OF SERVICES

IRREPARABLE INJURY

UNDUE RESTRAINT: Court looks to the length of time the injunction is to run, the type of work at issue, the geographic area in which the performer may not seek employment, and the likelihood that the injunction will achieve its intended purpose – must not simply “punish” the employee – similar to non-compete clauses

INVESTMENT IN TALENT

COMPETITIVE IMPACT: Injunctions should not be available unless the performer is moving to a competitor, and not only depriving the original employer of its return but also inflicting additional losses from more competition

Roulette Records v. Princess Prod. Corp. (NY 1962): Narrow interpretation of the circumstances that constitute actionable interference, requiring actual knowledge of the prior contract—Need actual knowledge of interference to uphold injunction

DAMAGES FOR CONTRACT BREACH – Performers v. Producers

Can a performer enjoin a producer from hiring a replacement and putting on a production? Can a performer get damages?

Are damages limited to specific salary that had been guaranteed, or can it encompass other financial terms, reputational benefits, psychological benefits, etc.?

Quinn v. Straus Broadcasting Group, Inc. (SDNY 1970): NY rule is that damages are limited to unpaid salary due to breach of contract and damages for reputation and such are not recoverable (50k recovery vs. 1.5M)

Vanessa Redgrave v. BSO, Inc. (First Cir. 1988): To receive consequential damages, P must establish a basis for an inference of fact for actual damage – Under MA law, P may receive consequential damages proved with sufficient evidence that a breach of contract proximately caused loss of identifiable professional opportunities—must be reasonably foreseeable

Amaducci v. Metropolitan Opera Asscoc. (NY 1969): Court held that consequential damages could not be recovered in a contract action for wrongful termination—contravenes the industry expectation that producers will “play or pay” and transforms contract action into the functional equivalent of defamation/tort

Parker v. Twentieth Century-Fox Film Corp. (CA 1970): Damages are subject to a DUTY OF MITIGATION from employee’s earnings from reasonable effort to be employed—other employment must be substantially similar or comparable to which the employee was deprived; reasonableness in rejection of employment is not a factor

DISSENT—SULLIVAN: Duty to mitigate damages involves fairness and socially responsible behavior which is fundamental to jurisprudence; There must be reasonable conduct in commercial affairs

Raquel Welch v. MGM Film Co. (CA 2nd App. Dist. 1988): Award of damages for compensation, punitive—Breached implied covenant of good faith/fair dealing plus reputational harm  Damages proven from past roles, lack of future work due to reputational harms; This was a way around the lack of punitive damages for breach of contract

Foley v. Interactive Data Corp. (CA 1988): Employee cannot secure redress in tort for breach of implied covenant of good faith and fair dealing in an employment contract

Most contractual disputes between artists and producers are governed by arbitration clauses

Lewis v. YouTube, LLC (CA App. 2016): Limitation of Liability clause of the Terms of Service applies to P’s claim for damages and none of the provisions of the Terms of Service can serve as the basis for specific performance

ENTERTAINER REPRESENTATION

Most entertainment contracts are short-term/project-related  “contingent employment”

Entertainer Representation: Talent Agents, Personal Managers, Business Managers, Ent. Lawyers

Talent Agent: Markets entertainer’s services; Procures business

Personal Manager: Develops, guides, and enhances career path of entertainer

Business Manager: Handles all financial aspects of the entertainer’s life

Ent. Lawyer: Contracts and all law stuff

Entertainers can often be packaged together in deals under agencies: Writers, directors, actors, etc. in which these parties are combined in one package while looking for work

Agencies could take entire projects and packages to advertising firms and such for financing and get them on air (especially prevalent when TV started)

1938 marked a change in which Talent Agencies no longer also operated as Production Employers  signed agreement with SAG

Eventually SAG-AFTRA set up to protect the interests of performers

Private Movie v. Pamela Anderson Lee – ISSUE: (1) Was there a material disagreement between the parties about the sex scenes in the movie? (2) Whether the absence of a signed long form agreement precluded there being a binding contract?

COURT: No binding contract was ever reached—What about conduct of Personal Manager?

CONFLICT OF INTEREST IN ENTERTAINER REPRESENTATION

Typically, state regulation of talent agencies has not addressed conflict of interest for talent agencies

CA, through the TALENT AGENCIES ACT, barred agents from referring their artists to firms in which the agency has a financial interest (or receives a referral fee) in return for other services to be rendered to the artists (making auditions or demonstration materials)

Illegal for agencies to have conflicts of interest among clients they represent and the financial interests they own

CONFLICTS = Violation of Fiduciary Duties; Violation of Principal-Agent Relationship—remedies sought from common law

CA Rule 3-310(C): More specific…Cannot accept representation of more than one client in a matter in which the interests conflict, cannot continue representation of such, and cannot represent a client in a matter at the same time in a separate matter except as a client a person or entity whose interest in the first is adverse to the client in the first matter

CA Rule 3-310(B): Deals with attorney’s personal, professional, and business interests in the matter in which they cannot accept to represent without written disclosure of those interests or if the member reasonably knows that there was a previous interest, knows someone else might be affected, etc.

Croce v. Kurnit (SDNY 1982): A fiduciary duty arises when a lawyer deals with persons who, although not strictly his clients, he has or should have reason to believe would rely on him—providing legal advice and services may give rise to a fiduciary duty – this includes not advising a party to seek independent counsel

ABKCO Music, Inc. v. Harrisongs Music, Ltd. (2nd Cir. 1983): Conflicts of interest include self-dealings, competition with the principal, or acting for another party – An agent has a duty not to use confidential knowledge acquired in employment to  duty exists after employment, but using info based on general business knowledge is not a violation of any duty

THE ENTERTAINER LABOR MARKET

The unions formed to bring together performers/entertainers to help secure certain labor rights and negotiate contracts

MPAA successfully fought off unionization of performers

Management formation of an in-house organization for workers  More cooperative arrangement/relationship with employers and workers

National Labor Relations Act (NLRA) of 1935: Allowed the formation of independent unions to represent private sector employees if a majority wanted to bargain collectively

Metro-Goldwyn-Mayer Studios 7 NLRB 662 (1938): Hollywood is part of interstate commerce and that even freelancers were employees rather than independent contractors for purposes of unionization

Many performers are not employees, but rather Independent Contractors

1947 Taft-Hartley Amendments to NLRA: Placed restraints on union organizations and activities, including a ban on any Communists holding union offices

Reagan Era of SAG: Shift from long-term employment with one shop to contingent and episodic employment

Unions negotiate a floor of salaries and benefits that must be paid to anyone on set – they leave it to individuals to negotiate through their agents to extract larger premiums that producers are willing to pay for services

JI Case v. NLRB (US 1944): Individual negotiations are compatible with the union’s exclusive bargaining authority, but only if the union’s agreement explicitly permits such individual improvements on the minimum scale

ENTERTAINMENT: Union focus is on residual rights, quality of life on location, and terms of agent representation

Talent moves back and forth between working on projects and running them

NLRA Policy: There is a distinction between those who manage/supervise and those actually perform it

POLICY: Managers/Supervisors aren’t entitled to unionize because firm needs their undivided loyalty for managing business

LABOR LAW IN THE ENTERTAINMENT WORLD

Main issue within the entertainment world is RESIDUALS—compensation for reuse of a film in a variety of settings other than the one for which it was originally produced

Argument of IP Owners is that all such derivative uses are purely profit b/c the original use recoups the sunk costs

Creatives say ability of the producer to satisfy new markets without needing more work is a problem (less work)

3-Tier Compensation System for entertainment:

FIRST TIER: Collectively-bargained minimum salary rate—whether for writers or performers

SECOND TIER: Individually-negotiated compensation that may be salary + revenues/profits

THIRD TIER: Union-negotiated right to residuals (money keeps coming when performers aren’t working)

ARTISTIC CREDIT—important for residuals, as those receiving artistic credit not only receive personal feelings and employment prospects, but also actual financial returns from immediate projects

Marino v. Writers Guild of America East, Inc. (9th Cir. 1993): A party may not sit idle through an arbitration procedure and then collaterally attack that procedure on grounds not raised before the arbitrators when the result turns out to be adverse

Wellman v. WGA, West, Inc. (9th Cir. 1998): Reaffirmed Marino; expanded deferential approach to awarding of screenwriter credits; Role of the WGA is to prevent studios from “using their superior bargaining power to assign credit arbitrarily,” and there should be very modest judicial scrutiny to see whether there was bad faith or arbitrary judgment

LABOR SOLIDARITY AND ENTERTAINMENT HYPHENATES

NLRB v. Insurance Agents Int’l Union (US 1960): Collective bargaining under a system where gov’t does not attempt to control the results of negotiations cannot be equated with an academic collective search for the truth—or what might be thought of as an ideal one  No perfect agreement is attainable and economic pressures of strikes/lock-outs happen

Strikes and Lockouts are popular for inducing economic pressures to an agreement, and some unions impose disciplinary measures for crossing picket lines  Suspension from the union, fines that reflect sums earned by working during the strike

HYPHENATE POSITIONS: Writer-Director, Director-Producer, etc.

Issue faced with this is that directors/producers, or those who supervise, are excluded from scope of statutory protections under NLRA—employers need to have undivided loyalty from these managers

There is no affirmative right to undertake collective actions, free of employer retaliation and punishment

American Broadcasting Co. v. Writers Guild of America, West, Inc. (US 1978): Discipline of hyphenate-members violates the NLRA under §8(b)(1)B which restrains employers in selection of their reps for purposes of collective bargaining or the adjustment of grievances—provides level playing field for creatives w/ unions  Can’t work on what workers are striking

DISSENT: Majority erodes the union’s ability to maintain a unified front in its confrontation with management and to impose disciplinary sanctions on those who adhere to the enemy in times of struggle

Unions disciplinary authority derives from members’ contractual obligation to honor the terms of the Union Constitution

Unions cannot force employees to join and remain in union as a condition of employment

In states with Right-to-Work laws, unions can negotiate agency shop clauses that require payment of that share of the union dues devoted to collective bargaining

Unions can operate “hiring halls” which serve as exclusive source of workers for the employer, but they cannot discriminate in their referrals against non-members

Pattern Makers’ League v. NLRB (US 1985): Restriction on union resignation during strikes was a violation of employees’ statutory rights—thus precluding union discipline of any cross-overs, whether supervisor-hyphenates or not

JUDICIAL CONTROL OF ENTERTAINMENT LABOR POWER

POLICY QUESTION: Whether parties that are purchasing performer services should enjoy any protection against the union’s market power  Principle avenue for this purpose is federal antitrust law

Graham v. Scissor-Tail, Inc. (CA 1981): Judicial limitations on adhesion contracts or provisions thereof:

(1) Such a contract or provision that does not fall within the reasonable expectations of the weaker or “adhering” party will not be enforced against him

(2) A principle of equity applicable to all contracts generally is that a contract or provision, even if consistent with the reasonable expectations of the parties, will be denied enforcement if its considered in context, unconscionable

Sherman Antitrust Act 1890—Regularly used to prohibit secondary boycotts and other union restraints in the labor and product markets

NLRA and Norris-LaGuardia Act sharply altered antitrust environment with boycotts and other self-help actions by unions and laborers being exempt from antitrust punishment

LABOR EXEMPTION: Exemption from antitrust punishment is only permitted for collective employee action directed at the labor market, not combinations of labor and non-labor groups

United States v. Hutcheson (US 1941): Court held that the labor exemption from antitrust law insulated any self-interested union action, irrespective of a court’s “judgment regarding the wisdom or unwisdom, the rightness or wrongness, the selfishness or unselfishness or the end of which the particular union activities are the means”

Local Union No. 189 v. Jewel Tea Co. (US 1965): Court made it clear that the eventual product of such union pressure, a collective agreement, was equally protected by the labor exemption

American Federation of Musicians v. Carroll (US 1968): There can be no differentiation between the leader who appears with his orchestra and the one who on occasion hires a subleader. In either case, the union-prescribed “leader fee” is attributable to service rendered in either conducting or playing and part to the service rendered in selecting musicians.

Price floors that governed how much orchestra leaders had to charge for a club date, required by musicians’ labor unions, functioned to protect the wages of employees and thus are exempt from antitrust laws

Price-list requirement is brought within the labor exemption under the finding that it is necessary to assure that scale wages will be paid to sidemen and the leader

Mackey v. NFL (8th Cir. 1976): If employees have agreed to a restraint on their market through their own independent union engaged in arm’s length bargaining, this is likely a better index about the reasonableness of such an employer restraint

NBA v. Williams (DC Cir 1995): Mere presence of an employee union insulated employers from antitrust scrutiny of restraints they collectively instituted  employees can enjoy their right to union representation under labor law only if they give up their right to a competitive employer market under antitrust law

UNION PRESENCE THEORY – Brown v. Pro Football (US 1996): Multiemployer bargaining associations are entitled to impose their plan to restrict competition in the industry

U.S. v. Petrillo (US 1947): SCOTUS upheld constitutionality of barring the use of economic pressures by employees to secure payment from radio stations playing the music they had recorded

TAFT-HARTLEY: Imposed restraints on union secondary boycotts—featherbedding, obstacles to new technology, and work procedures, and other tactics

NLRA §8(e) has been interpreted by NLRB and SCOTUS as intended to prohibit “secondary” rather than “primary” boycotts—i.e., union-employer agreements targeted at 3rd parties who won’t recognize/contract with the union, rather than agreements designed simply to protect and preserve the work and employment standards of the union’s members

Paragraph 17 of Phonograph Record Labor Agreement that governs recordings is interpreted by NLRB as ensuring that all records made or distributed by PRLA signatories meet the AFM’s employment rather than membership standards

CONTINGENT WORKERS – EMPLOYEES OR CONTRACTORS

In relations with producers, are performers considered employees or independent contractors?

Employment test is one used under common law – the 13 or so factors looking at Agency Law (CCNV v. Reid)

Performers are unique in that they receive a great deal of creative control, they control their performances, they work on several different projects with several different firms throughout the year, they use personal corporations,

If considered non-employment, then performer, through corporation, gets to avoid FICA taxes and Unemployment taxes  takes on other business expenses (paying a manager)

Producers get the benefit of an independent contractor classification that will subject collective performer actions to the governance of antitrust rather than labor law

HBO, Inc. v. Directors Guild of America, Inc. (SDNY 1982): Guild members are a “labor group” insofar as they work as freelancers because their duties are similar to that of employees (not enough control) – DGA may forbid them to work as directors for nonsignatories and require them to comply, to the extent they work as directors on their own productions, with all lawful terms of the Guild’s agreements.  Must protect members from competition

Union is allowed to protect its legitimate interests and there must be evidence of actual or potential job or wage competition, and regulations are an attack on a problem thought to threaten union’s established standards

NON-STATUTORY EXEMPTION: Unions are allowed to press for and secure contracts designed to insulate the labor market from competitive pressures that serve to reduce wages and worsen working conditions

Unions cannot do the same with competitive pressures for the product market

PERFORMING RIGHTS SOCIETIES

Performers (or athletes) who come together as a group of contractors—such as for purposes of licensing their right of publicity—may face antitrust scrutiny see Topps Chewing Gum v. Major League Baseball Players Ass’n (SDNY 1986)

Broadcast Music, Inc. v. Columbia Broadcasting System (US 1979): Blanket licenses issued by orgs. is not illegal price fixing…Its nearly impossible to license with all difference parties; Its not a naked restraint on trade that stifles competition

ASCAP, BMI, SESAC: Owners of performance rights in the music industry  Collective licensing and enforcement

Users of copyrighted music who wish to perform it publicly must license from these organizations

Copyright initially vests in composers and lyricists—they usually lack time/expertise to exploit, so they rely on publishers

Publishers license the mechanical and synchronization (sometimes dramatic) rights to compositions

MECHANICAL: Right to produce recorded versions of songs

Statutory fee set for these rights once a composition has been recorded and distributed the first time

SYNCHRONIZATION: Right to reproduce the musical composition on the soundtrack of a film or video in synchronization with the action being depicted – Harry Fox Agency; negotiated directly with copyright owners

DRAMATIC: When music is an integral part of a story in a particular production – these are limited and publicized and its always been feasible for direct negotiations

ASCAP and BMI (SESAC, too) members assign the organizations the right to license the nondramatic public performance rights to their works – typically this is the greatest source of income for artists  ROYALTIES