The U.S. Court of Appeals for the Ninth Circuit this month held that the California Resale Royalties Act (“CRRA”) – a state statute that provided visual artists with ongoing downstream royalties for sales of their works occurring after the initial sale – is invalid as preempted by federal copyright law. The court, in Close v. Sotheby’s, — F.3d –, No. 16-56234, 2018 WL 3322222 (9th Cir. July 6, 2018), decided that visual artists are barred from receiving any ongoing royalties arising from later sales of their work due to the federal “first sale doctrine.” The decision affirms the U.S.’s long-held perspective on the limited nature of certain copyright privileges.
The provision of the CRRA at issue in Close granted artists an un-waivable right to 5% of the proceeds on any resale of their artwork under certain circumstances. Specifically, the CRRA required the seller of a piece of artwork (or the seller’s agent) to withhold 5% of the resale price and pay it to the original artist, or if the artist cannot be found, to the California Arts Council. The purpose behind the statute was to help visual artists capitalize on the appreciation of their work by requiring payments following the work’s first sale. The statute was effective on January 1, 1977 as “the first and thus far only, American recognition of the droit de suit,” or “right of following on” as recognized by France and other civil-law jurisdictions. Continue reading
Don’t Negotiate Your Own Deals. In an ideal world, you would never negotiate your own deals. The first reason for this is obvious – if you’re a creative or an executive, you have to operate in multiple different capacities and wear a lot of different hats. An experienced professional negotiator – whether lawyer or agent – who spends all day, every day negotiating is likely to be more skilled and have more insight into the marketplace than you. The second reason is perhaps less obvious to laypeople, which is the benefit of detachment and plausible deniability. Even if you are a master negotiator, there is always a benefit to having someone else negotiate in your place. You can instruct them to take certain actions with less risk of jeopardizing your personal, creative or business relationships with the other side. You can use them to test the waters with the other side. And, if needs be, you can detach yourself from (or even politely disown) their responses if there is a negative reaction. Your representative is there to help facilitate the deal and relations with the other side – but on occasion you may wish to use them as the “bad guy,” and you should not be afraid to do so.
Don’t Make Gives To Try to Accelerate Deals. Inexperienced negotiators often try to accelerate the pace of a deal by readily agreeing to terms and surrendering positions. While there are exceptions, this strategy generally does not yield positive results. An experienced negotiator will often respond to attempts to push a deal through by slowing the deal down and thus seeking to increase the desperation of the other side to close. If an initial proposal or response has been met with an accommodating response from a party visibly keen to close, an experienced negotiator may respond by making more asks. In the entertainment business at least, absent a very compelling reason to close (e.g., principal photography needs to start, a financing needs to close, or a producer is about to lose an actor) most deals take a certain amount of time irrespective of their complexity or the efforts of one side to be efficient. Continue reading
Nearly two years ago we wrote about a California case involving the alleged removal or alteration of copyright management information (“CMI”) in the context of real estate Multiple Listing Service (“MLS”) software. Stevens v. CoreLogic, Inc. has since winded its way up to the U.S. Court of Appeals for the Ninth Circuit, which ruled last week in favor of MLS software developer CoreLogic and affirmed the lower court’s dismissal of the plaintiffs’ copyright infringement suit.
A quick refresher on the facts is warranted given the passage of time. The plaintiffs are professional real estate photographers who photograph homes that are being put up for sale. They retain the copyrights to their images but license them to real estate agents, who upload the images to MLS platforms through software programs like those created by CoreLogic. The plaintiffs sued CoreLogic, claiming that CoreLogic’s resizing and processing of their images for upload to MLS platforms constituted purposeful alteration or deletion of CMI-containing metadata under § 1202 of the Copyright Act. The district court disagreed and dismissed plaintiffs’ claims on a motion for summary judgment, holding that the photographers had failed to prove that CoreLogic provided or distributed false CMI; that any CMI was embedded in their photographs; that CoreLogic took any action that removed or altered any CMI (assuming it was embedded); or, if such actions were taken, that they were intentional, as required by the statute. Continue reading
WHOIS is a protocol used to search online databases and identify domain name registrants. Rather than being centrally managed in a single database, WHOIS data is collected and administered by various registries and registrars according to the terms of their contracts with the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN has agreements with thousands of domain registrars around the world such as GoDaddy and HostGator which require registrars to post WHOIS data – such as names and contact information like emails and phone numbers – for every person who registers a domain with their service. Through WHOIS, anyone can then look up the contact information of a website domain name registrant (unless that registrant has opted to hide their information through an online privacy service). This set of tools has proven to be invaluable to trademark owners pursuing domain name disputes against cybersquatters –those who register Internet domain names containing trademarks belonging to others with the intent to extort money by selling the domain name to the trademark owner or a third party Continue reading
The U.S. District Court for the District of Arizona in Lundin v. Discovery Communications ruled that a defamation suit brought by a reality television star against the network and producers of a reality show was not barred simply by virtue of an exculpatory “Assumption of Risk” provision containing a waiver of all claims. Significantly, the ruling stands for the proposition that there is no special exception for reality television or documentary programming which would bar intentional tort lawsuits. This decision could have potentially significant implications in the reality television sector, as many reality stars may now have recourse for the oft-cited “bad edit.”
The agreement at issue was entered into by Cody Lundin – an internationally recognized professional survival instructor, best-selling author, and survival and sustainability consultant for national and international news outlets – in connection with his appearance on Discovery Channel’s “Dual Survival.” Lundin served as the show’s on-camera host, wilderness survival expert, and consultant. The show features a pair of survival experts in predetermined scenarios set in challenging environments. For instance, Lundin and his co-hosts have been marooned on an island, lost in a jungle, and stranded in the desert, all with minimal survival gear. Continue reading
As of January 1, 2018, Assembly Bill 168, a new California law prohibiting employers (including movie and television studios) from asking potential employees for their salary history, went into effect. The new law prohibits the following: (1) Relying on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant; (2) Asking (orally or in writing) an applicant for employment about his/her salary history, including compensation and benefits; (3) Refusing to provide, upon reasonable request, an applicant with the pay scale for a position; and (4) Contacting an applicant’s prior employer(s) for the information covered by (1), (2), and (3). However, the law does not prohibit the applicant from “voluntarily and without prompting” disclosing this information but, does prohibit agents from disclosing the information without express permission from their client. “This represents a pretty fundamental change in how negotiation has traditionally transpired in the entertainment industry,” says corporate attorney Bob Darwell, who represents companies like Amazon Studios. “The first step to cutting a deal was to call the talent representative and ask for quotes and then to verify those quotes.”
As the world becomes more familiar with blockchain, people and companies continue to turn to the rapidly adopted technology to solve problems that were previously seen as just the costs of doing business. Over the past few years, in addition to serving as the backbone for headline-grabbing digital cryptocurrencies, the blockchain ledger has been used to create comprehensive, accurate and decentralized databases of music rights, image rights, and even the protection of voting rights. Over the past few months, players in the film industry have made efforts to implement the blockchain technology into the life cycle of a film, including with regard to the accounting and distribution processes.
As explained in detail in our previous posts, blockchain technology presents a decentralized way to record and account for verified transactions in a variety of commercial applications. Or, to put it another way, blockchain’s innovation has been to create a peer-to-peer platform, which allows for the automated management of certain rights and the verifiable recording of transactions concerning those rights. By removing the necessity of a third party to officiate a transaction (such as a bank), blockchain’s promise is a world where people can conduct business more immediately and directly without a loss in security. As such, any space that has a need to protect, manage, and transact in a set of rights, is fertile ground for blockchain applications. Continue reading
Copyright infringement claims from photographers and image licensing companies have become increasingly common with the widespread use of easily accessible digital content on the Internet and in social media. Photo copyright owners discover these claims en masse by way of image recognition software, and often pursue them using high-volume contingency fee-based law firms, claiming that any number of posts from time immemorial constitute infringements justifying large settlement demands. But just because you’ve received an unreasonably high demand that far exceeds any typical license fee doesn’t mean you’re liable for that amount. Some due diligence can help you gain leverage in these disputes, and possibly even avoid further litigation. To be sure, content creators should be fairly paid if their content has been misused, but the extremely aggressive way some of these claims are pursued calls for a nuanced and informed approach. You should contact a firm with experience in copyright and litigating image claims if you find yourself on the business end of one of these demands (especially a formal lawsuit), but for now, here are the basic steps you should take to preserve your best defenses and minimize potential exposure to costs and damages: Continue reading
As the #MeToo and #TimesUp movements and their effects continue to unfurl, Hollywood is utilizing legal mechanisms via entertainment contracts to implement and supplement the changing norms, from “morals provisions” to “inclusion riders.”
What are commonly referred to as “morals provisions” have a long history in the entertainment industry, but in recent years, have been more commonly found in endorsement and advertising deals than in television and film agreements. Studios and production companies that had stopped using such provisions have started putting in place plans to reimplement them, while those that had been using them all along are revising them to conform to the new landscape. Even distributors who never used morals provisions are starting to include them in their contracts, lest one of their projects ends up with some unexpected negative baggage. Regardless, all of these industry players are looking for ways to tailor their contractual language to better address the valid business concerns related to fallout from the #MeToo movement. Although talent attorneys are generally not pleased at the resurgence of these provisions, it appears unlikely at this time that the provisions will go away entirely; indeed, in some cases talent representatives think that there should be reciprocal provisions benefitting talent if there is another Weinstein-like situation with a studio or distributor. Continue reading
Last week the U.S. Court of Appeals for the Federal Circuit reversed the U.S. District Court for the Northern District of California’s ruling of fair use in Oracle America, Inc. v. Google LLC, and held that a verbatim and non-transformative taking in the presence of an actual or potential licensing market fatally undermined the defense. Oracle had sued Google for copyright infringement, alleging that Google had unlawfully used 37 packages of Oracle’s Java application programming interface – “pre-written Java source code programs” that serve as shortcuts for various computer functions to save programming time – in its Android-powered devices. Google copied verbatim 11,500 lines of Oracle’s copyrighted computer code as well as the structure, sequence, and organizing of the packages. After a second jury trial on fair use, Google prevailed on its fair use defense, and Oracle appealed after the district court rejected its post-trial motion for judgment as a matter of law. Continue reading