IP+Media Digest

So, this tumblr has not been updated in a while, but I’m not giving up on it (damnit!). With that said, I want to explore an article I recently saw in USA Today as reported by the AP.  

According to the piece, the makers of Happy Days (CBS and Paramount) were denied their motion to dismiss claims of a number of the cast members that they are owed royalties for DVD sales of the series.  

Finding that the defendants had not met their initial burden for dismissal, LA Superior Court Judge Elizabeth Allen White stated that the defendant’s argument may still be brought at trial.

The controversy arises over the contract signed by the actors that would have allowed for between 2.5 and 5% of net proceeds depending on how their likeness was used. CBS has argued that under the SAG agreement their duties have been met.  The plaintiffs argue that they have not been given a proper accounting of the revenues resulting from myriad Happy Days Merchandise.

Not surprisingly, this case was filed in California, so many of the same legal issues brought up in the earlier Tupac piece are the same in this instance.  This is especially true with regard to the deceased Tom Bosley, who played Howard Cunningham on the show. In the current litigation, his widow has sued on behalf of his estate.

The trial is slated to start July 17.

Other articles that aided this post can be found here and here.

—Clark—

With all this regulation being proposed, one has to wonder if it is really worth all the effort. Do the media companies see increased sales when piracy declines? There is evidence that says it does not. France recently passed a “Three Strikes” law which gives infringers two warnings before they prosecute infringers. They claim it has drastically reduced piracy within their country. However, close inspection of profits from French media companies shows that they haven’t seen an increase in sales. The purpose of protection of intellectual property is to incentivize creation, but that goal has to be balanced with the goal of ensuring the public has access to content. When the government creates policies that don’t increase incentives for authorship, but decrease access, they have fundamentally failed to achieve their goals. Dedicating money and manpower to a strategy that doesn’t achieve its goals is waste of limited resources.

Part of ACTA’s focus is aimed at stopping counterfeiting, but are “counterfeit” goods really a problem? It has been said that counterfeiting costs businesses millions of dollars in the United States alone. However, many of the statistics put forth to justify cracking down on counterfeiters is hyperbole, and highly suspect, as explained by Kenneth Port in his article for the Cardozo Law Review. Kenneth explains that the fuzzy numbers used in reference to counterfeiting lead to inaccurate assumptions.For instance, some “imitative commodities” actually have a positive economic impact on status goods. If imitative commodities are actually benefitting the companies who make the goods they imitate, then it doesn’t make sense to waste resources prosecuting their activities. If the private companies would like to pursue those actions in civil court, they should certainly get that opportunity, but these new laws are slowly shifting the burden of enforcement from the private sector to the public sector. It makes no sense to spend taxpayer money locking non-violent people up, who may actually be doing more public good than harm, while at the same time failing to achieve the goals copyright laws are supposed to achieve.

If you haven’t noticed, patent transactions by major players in the e-commerce industry have been happening more than usual lately.  The biggest player in these  ’patent wars’ seems to be facebook, who first reportedly bought 750 patents from IBM and then the app Instagram for $1,000,000,000—thats a billion, mind you.

Interestingly, just a week before having acquired patent rights from IBM, Yahoo! filed suit against Facebook for ten different alleged infringements.  Facebook, then counter sued, saying that Yahoo! was itself infringing.  Technically, the IBM situation is unrelated to Facebook having been sued by Yahoo!, but the fact remains, Facebook, with its endless modifications and interface updates is likely to face more claims, making its recent purchases look more like an attempt at damage control than a desire to implement the technology the patents hold.  Indeed, according to a Bloomberg piece that came out yesterday, Facebook was also trying to buy up the AOL patents that ultimately went to Microsoft earlier this month.

Some commentators have said that Google should have been the one to strike the deal, given their need to ward off Microsoft’s efforts to capture some of their marketshare a la ‘Bing’.  

Whether Microsoft’s buy was with an eye towards enforcing the new patents or anticipating potential claims against it for whatever innovations Windows 8 will have is anyone’s guess.

Whatever all of this means, one thing is for sure, things are heating up out there.

—Clark—

The recent holographic performance at Coachella Festival by a virtual Tupac got us wondering what the intellectual property implications of such technology are.

If you haven’t seen the video, you should. The rendition is really, really amazing. I should mention that the Japanese have already done this (of course) with Hatsune Miku, a completely virtual pop star. She is, you guessed it, “huge in japan”. I’m not exactly sure how they did the holographic work for her, but it would not seem to present the same legal issue as the Tupac performance, given that she isn’t, nor ever was, real.

For Tupac however, there are a couple of thoughts. One being the right to publicity or personality rights. Unlike most other intellectual property rights, which are all covered by at least some federal legislation, personality rights are determined on a state by state basis. Thus, since the performance was at Coachella, which takes place in California, we would want to look at their law regarding the subject, which, surprise, surprise, is probably the most comprehensive. Appropriately, it is known as the Astaire Celebrity Image Act and was recently amended in 2008. Those statutes can be found here and here, respectively.

The amendment is actually the more important of the two for this subject, because it was exclusively drafted to acknowledge the rights’ descendability to decedents and heirs—an issue that had infamously been denied in Lugosi v. Universal Pictures back in 1979.

In pertinent part, the law says:

(a)(1)Any person who uses a deceased personality’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent from the person or persons specified in subdivision (c), shall be liable for any damages sustained by the person or persons injured as a result thereof.

However, in the next section we are told:

(2)For purposes of this subdivision, a play, book, magazine, newspaper, musical composition, audiovisual work, radio or television program, single and original work of art, work of political or newsworthy value, or an advertisement or commercial announcement for any of these works, shall not be considered a product, article of merchandise, good, or service if it is fictional or nonfictional entertainment, or a dramatic, literary, or musical work.

Presumably, Tupac’s performance falls under this latter section, thereby removing any chance of liability for using his likeness to perform the songs “Hail Mary” and “Gangsta’s Paradise”.

But looking at the next section changes the stakes:

(3)If a work that is protected under paragraph (2) includes within it a use in connection with a product, article of merchandise, good, or service, this use shall not be exempt under this subdivision, notwithstanding the unprotected use’s inclusion in a work otherwise exempt under this subdivision, if the claimant proves that this use is so directly connected with a product, article of merchandise, good, or service as to constitute an act of advertising, selling, or soliciting purchases of that product, article of merchandise, good, or service by the deceased personality without prior consent from the person or persons specified in subdivision (c).

Seen through the lens of this aspect of the statute, a strong argument could be made that the performance, by its very nature could potentially be somehow covered by all the protections. Isn’t using the late Tupac’s likeness in some way an effort to perpetuate his albums and even, one might say ‘brand’ (remember ‘Thug Life’? The tattoo can clearly be seen on the hologram).

Despite the fact that litigation is highly unlikely in this instance, given that Tupac’s mother Afeni Shakur Davis, who owns the right’s to the music, reportedly gave producer Dr. Dre, the go ahead to make it happen, the phenomenon still portends future potential problems.

As the technology, actually a high tech version of an Elizabethan trick known as Pepper’s ghost, becomes more viable and ubiquitous the possibility that unlicensed producers will use “celebrities” to endorse their products etc becomes more acute…

Conversely, this technology could also be a boon for dead celebrity’s estates—Whitney Houston and Dick Clark come to mind. Dead celebrities are big business, as this excellent 60 minutes segment from 2010 shows.

For more on the practicality of California’s right to publicity, courtesy of Amy Dale Hogue of Pillsbury Winthrop Shaw Pittman LLP, go here.

—Clark—

The EU Parliament’s rapporteur recently gave a thumbs down to ACTA, jeopardizing the success of the controversial treaty. The United States and its trading partners don’t seem to be interested in giving up. G8 nations are once again in negotiations for more treaties which would require signors to create and enforce new laws which regulate the internet in their country.

 According to a leaked G8 document titled “Non-Paper on Intellectual Property Rights protection,” there are already more plans in the works for treaties that address the internet and prescription drugs.

Why prescription drugs? Good question. Tech Dirt writer, Glyn Moody, points out that it’s an attempt to make the internet look more sinister, requiring government intervention (for the children!). I would agree, but would point out that it’s also possible that pharmaceutical industry lobbyists likely jumped aboard these G8 talks for the same reason they’re interested the the TPP negotiations. They want language in this treaty that will help them make more money. In September of 2011, Doctors Without Borders released this report detailing the ways TPP would jeopardize access to prescription medication for many of the signing parties. These treaties are bad enough without the prescription drug provisions which jeopardize public health.

It should also be noted that the United States is repeatedly mentioned in the “non-paper,” eliminating any doubt who this treaty is being written for. The USTR is getting pushed by lobbyists, and they keep upping the ante. The policies proposed bare a striking resemblance to those of SOPA. The language used in crafting the G8 treaty is also lifted from United States policy documents. Thanks to powerful interest groups in Washington, the internet is taking on a volley of proposed legislation and there is no end in sight.

-Travis

One of ACTA’s main goals is to reduce the amount of counterfeit goods on the market. However, there is some confusion about what a counterfeit good actually is. The terms “counterfeit” and “knockoff” have been used interchangeably. They are two distinct things and the differences between them should be noted.

Let’s start with knockoff goods. Knock off goods are created in with the intent to look kind of like a trademark holder’s goods, but do not create a likelihood of confusion. For instance, if a company made an MP3 player that resembled an iPod, but called it an oPod, no informed consumer would be confused into thinking that they were buying an actual iPod. An oPod would be a knockoff, not a counterfeit.

A counterfeit is a good that is actually passed off to be a legitimate good when it is not. A counterfeit is meant to displace sales of the legitimate good. Counterfeiters go to great lengths to make their counterfeit goods look like the actual product they are trying to copy. This is an infringement on trademarks. If the person making “oPods” decided to make a fake iPods that actually say “iPod” on the product and packaging, it would be a counterfeit, and not a knockoff.

This is important because the people actually enforcing the new rules set forth in ACTA may not realize these distinctions. ACTA’s language might be so overly broad that it creates confusion among people tasked with enforcing it. It is my hope that more people become aware of this distinction and understand that ACTA could open the door to prosecution of those who are not actually doing anything wrong.

-Travis

The life of an entertainer can be fun and exciting. However, the legal implications of their performances (depending who you ask) can be bland and unexciting. At times, the legal consequences of certain performance styles can lurk unseen by the entertainers and those who help them put on their shows. With the advent of 3D projection mapping, a copyright licensing concern that seemed well settled has been brought back to the forefront. I’m talking about the right to synchronization.

Synchronization occurs when someone synchronizes sound and images in a public display or performance of a copyrighted work. The copyright holder has the exclusive right to synchronization. In ABKCO Music, Inc. v. Stellar Records, the Second Circuit court held “A synchronization license is required if a copyright musical composition is to be used in ‘timed-relation’ or synchronization with an audiovisual work.” The court also mentioned that a synchronization license would be very common in movies and commercials, but did not rule out other situations (live performances) where a license would be necessary.

Given the cases that came after ABKCO v. Stellar, live performances are not ruled out. In 2007, a US District Court in Utah considered synchronization with respect to a karaoke performance in EMI Entertainment World, Inc. v. Priddis Music, Inc. EMI claimed that Priddis was violating their synchronization rights by displaying the lyrics to songs on a screen while the karaoke singer sang the copyrighted work. The karaoke bar’s ASCAP fees cover public performance, but not synchronization. The court disagreed with EMI’s assertions, holding that the karaoke lyrics were textual in nature, not audiovisual. This is the only decision which held a that karaoke performances don’t require a right of synchronization.

The more common trend is for courts to hold that karaoke performances do require synchronization rights. the Ninth Circuit held that karaoke performances require a synchronization right in the case of Leadsinger, Inc. v. BMG Music Pub. The court negatively treated Entertainment World, Inc. v. Priddis Music, Inc in a footnote, stating that it does not side with the ruling in the EMI case. The court held that a karaoke screen which displays lyrics satisfies the definition of an audiovisual work. An audiovisual work is defined thusly:

“Audiovisual works” are works that consist of a series of related images which are intrinsically intended to be shown by the use of machines, or devices such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any, regardless of the nature of the material objects, such as films or tapes, in which the works are embodied.”

If a karaoke machine fits this definition, then there’s hardly any doubt that a court could determine a DJ set with live visuals falls within this definition. 3D projection mapping would fit this definition even better than karaoke lyrics. Considering many projection mapping performances are set to the tempo and major changes in a piece of music, people who do projection mapping should be on notice. With the large media companies and their litigious nature, it’s not a matter of if they will sue, but when.

-Travis

Throwing his hat in with an already eclectic list of musicians suing their record companies, ‘Weird Al’ Yankovic, one of the ultimate benefactors of the ‘fair use’ copyright exception to parody, has sued Sony Music Entertainment through his company, Ear Booker Enterprises, for money owed to the tune of five million.

            Apparently, Sony mischaracterized downloads of Yankovic’s music as “sales” rather than “licenses”. 

           Consequently, Ear Booker, is claiming that Sony breached an implied duty of good faith and fair dealing in its manipulation of accounting and characterization.

            Moreover, the lawsuit says, Sony’s stake in the sale of Youtube to Google as well as the settlements it obtained from p2p apps such as Kazaa and Grokster entitle him to many more millions.

          This of course goes back to the case determination made last year that digital music transactions were to be considered licenses rather than sales, thereby affording the artist a greater royalty.  There, Eminem’s management had brought an action against UMG, claiming that its attempt to characterize downloads of his music as a sale—more akin to “hard copy” recording economics (surprise!) than the digital model—was an inappropriate contractual interpretation.  

        Despite this issue probably being moot for newly signed artists whose contracts resolve such a potential issue, Yankovic’s case stands as an example, if the allegations are true, of labels—-in truly “traditional” fashion, I might add—-to bilk their talent for all that they can.

      While the sales/licenses dichotomy is certainly interesting, what appears to be potentially even more egregious is the assertion that Yankovic (and other artists) are entitled to settlement monies that their recording companies received.  If in fact Yankovic is able to prevail on this aspect of the complaint, the implications for other artists signed to Sony and the rest of the labels that were party to the settlement will be onerous.

Quite so!

—Clark—

The Anti-Counterfeiting Trade Agreement, or ACTA is an international intellectual property treaty that has been in the works for a few years. The goal of ACTA is to strengthen intellectual property protections in nations which have signed on to the treaty. Many nations have already signed. The United States, Canada, Australia, and Japan have all signed on to the ACTA treaty. The only thing remaining road block is the European Union. The European Parliament is expected to put ACTA to a vote within the next 10 weeks.

It should be noted that if/when ACTA goes into effect, it is just a treaty and is very different from a federal law. In order for a treaty to automatically become the law of the land, it must be self-executing. ACTA is not a self-executing treaty. In order for ACTA to become the law of the land, congress must pass legislation which implements its provisions. However, there is little doubt that Congress will take measures to rewrite federal laws to comply with the standards set forth in ACTA.

Many critics are troubled by ACTA. The treaty itself is being negotiated as an executive agreement. This minimizes the amount of congressional oversight and government accountability. Negotiating the treaty as an executive agreement allows the president to circumvent the requirement of the Treaty Clause of the Constitution. Normally, the president is required to get the advice and consent of the senate in order to enter into foreign agreements. However, the president is allowed to enter into agreements which concern matters on which the president has absolute authority, or those matters on which congress has granted authority to the president. There are serious doubts as to whether the president has the absolute authority over matters of international IP legislation and enforcement. For the sake of argument, let’s assume ACTA with withstand any challenges to the president’s authority to sign the treaty.

The choice to sign onto the treaty under the guise of sole-executive agreement also makes the entire process less transparent. The White House noted increasing transparency as one of its goals in a recent IP report. This goal is not being served when the president negotiates the treaty without the advice and consent of the senate. Furthermore, an article from the Yale Journal of International Law has described the secrecy of the negotiations as “unprecedented.” The article’s authors describe an attempt by the EFF to obtain documents related to the negotiations through FOIA requests. The EFF was only able to obtain 159 pages. Over 1300 pages were withheld for national security reasons. Are these intellectual property negotiations so sensitive that public knowledge would jeopardize the security of our nation? I sure hope not. What are they talking about in there?

It’s easy to be wary of a treaty which was developed in such secrecy, without adhering to the constitutional requirement of congressional oversight. However, it’s way more rational to read the text of the bill and analyze the agreement without regard to the shady nature of its creation. Many of ACTA’s provisions seem perfectly reasonable. For instance, Section 2 deals with civil remedies. Article 7 requires signing nations to allow enforcement of IP rights through judicial channels. There’s nothing wrong with that. In fact, the United States is already doing that, so no change will need to be made there. Things begin to get troubling in Section 4 of ACTA, which requires signors to enact criminal penalties for willful infringers. While we already criminalize commercial infringers in the US, ACTA would likely ramp up criminal penalties. ACTA requires member nations to imprison those who are caught infringing willfully. We already imprison our citizens at a higher rate than any other nation. Do we really need to commit ourselves to imprisoning more people for hosting a torrent of Soul Plane? This observer says no.

Finally, I’ll get to the most controversial part of ACTA, regulation of the internet. The first requirement in Article 27 of ACTA is that member states must enact laws that prevent and deter copyright infringement in both the criminal and civil realm. In my experience “deterrence” amounts to heavy-handed, often unfair penalties which do little to actually deter anyone. Section 27 also has provisions dealing with internet service providers which would urge member states into forcing ISP to police their subscribers that may be infringing on copyrights and trademarks. This kind of policy was rejected under DMCA. When SOPA and PIPA tried to advance similar goals, they too were rejected. This type of regulation has been repeatedly shot down by the American people, and through a secret negotiation, we have now signed on to this backwards regulatory scheme.

The current trend in IP enforcement is not promising. The ideas put forth by the various governments involved show that they are interested in further expanding copyright protections and criminalizing non-violent people who haven’t even stolen anyone’s tangible property. The EU Parliament President, Martin Schultz says that ACTA is not good in its current form. I agree with him, and I hope that he can successfully lead the parliament away from this sad excuse for an international agreement.

-Travis

In a recent HADOPI report, the French regulatory agency has claimed successful results from its “Three Strikes” law. HADOPI cites various surveys and website traffic data which it believes is proof that illegal file sharing is on the decline in France. HADOPI claims the “Three Strikes” law is the cause of the decline. At first glance, one might agree that the law was successful in achieving its goals, but was it really all that successful?

While illegal piracy and file sharing is down, so are media sales in France. The entire rationale for expanding copyright enforcement was to make sure artists and creators are getting paid for their work. It was alleged that illegal file sharing made a direct impact on the pocketbooks of artists and creators. One would expect to see sales increase as file sharing decreases. So why are media sales decreasing along with piracy?

SNEP reported a 5.6% decrease in sales within the French music industry during the first 3 quarters of 2011. This happened at the exact same time piracy levels were dropping according to HADOPI. This result defies the logic put forth by proponents of more expansive enforcement of copyright law. Even more puzzling, digital sales in France went up over 15%. Legitimate digital outlets for media supposedly compete directly with illegal file sharing sites. If it is true that piracy is really causing a loss of profits for artists and creators, then it one would expect to see an increase in profits after a substantial decrease in piracy. It’s almost as if piracy is beneficial to the music industry.

Perhaps the industry isn’t doing itself any favors. It is significantly cheaper to distribute digital copies of media as opposed to physical copies. Physical copies need to be mass produced and delivered to thousands of retail outlets across the country. As a result, that Justin Bieber album you’ve been wanting might cost you $9.99 at Best Buy. But don’t fret. You can go onto iTunes and purchase a digital copy. Digital sales should be much cheaper because there is considerably less overhead. All that packaging and distributing is unnecessary because the album can be transmitted over a telephone wire for a tiny fraction of the cost, which will surely result in a lower cost to the consumer. Don’t hold your breath. The same album that costs $9.99 for a physical copy will also cost $9.99 for a digital copy. Even with less overhead, the industry still charges the same amount.

Piracy isn’t killing the various media industries, the industries themselves are. Their greed knows no bounds. They refuse to make concessions to the people who consume their products, and further alienate them by lobbying for expansive copyright laws and enforcement that turn their customers into criminals. The media industry has become bloated and greedy and when they experience a backlash, they blame the pirates. HADOPI thinks they’ve proven their point by illustrating a drop in illegal file sharing, but they have actually disproven the media industry’s point by illustrating industry profits do not increase when piracy declines.

-Travis