CDAS represented producer Blumhouse in its deal to acquire rights to the James McBride book, the deal with Ethan Hawke (who stars as abolitionist John Brown), and the deal with Showtime where the miniseries will premiere on August 9. Watch the trailer here.
At a time when we are stuck at home, working or “working” (or, sadly for many, not working) the tenet that content is king has never been more relevant. From Disney+ releasing “Frozen II” and “Onward” early to help placate restless youngsters, to DreamWorks releasing “Trolls World Tour” for “theatrical” in-house rental, to Instagram sensation DJ D Nice offering his “Club Quarantine” and “Homeschool” IG parties and Spotify playlists, there is something for everyone on one platform or another. Musicians are even offering special live-streamed performances from their homes (thank you Dave Grohl, Billy Joe Armstrong, et al.).
While the Disney and DreamWorks releases were clearly authorized corporate decisions, the world of quarantine content becomes murkier when one turns their overly scrubbed fingers to the keyboard. Of course, the lead singers of Foo Fighters and Green Day, respectively, likely have the rights to publicly perform music they wrote, and reports indicate that DJ D Nice made licensing deals to avoid copyright claims stemming from his streaming discotheques. But in the further corners of social media, the always-gray field of copyright has spawned more than its usual fifty shades in the time of COVID-19. So, what about musicians performing other artists’ songs? Fitness instructors on Instagram Live with their playlists thumping in the background? The Internet Archive[i] offering its own “Emergency Library” of digital copies of books (a decision decried by the Authors Guild and Association of American Publishers, but claimed to be fair use by archive.org)? Or DJs who, unlike DJ D Nice, did not have permission to publicly perform or remix the music featured during that IG virtual dance party?
At least in the latter case, some DJs and performers streaming on Instagram Live have reported that they’ve had their streams cut short by copyright infringement claims over use of musical content without authorization. Lesser-known and aspiring artists (who, like many, are out of work at this time) are having their online raves canceled mid-performance. But at the same time, artists whose content is being used may also be out of work and may be incentivized, perhaps more than usual, to enforce their copyright rights and preserve their dwindling income streams. This presents a sensitive nuance to an already delicate balance between online content usage and rights enforcement.
There is no timelier example of COVID-era copyright enforcement than Richard Liebowitz, the infamous plaintiff’s lawyer behind more than 2,000 copyright infringement lawsuits filed by photographers over the last four years. His business model – which he characterizes as fighting for photographers’ rights, and much of the digital media industry characterizes as “trolling” – has, like COVID-19, mutated to adapt to its new circumstances. It was recently reported[ii] that, despite quarantine and widespread isolation (or perhaps because of it), Liebowitz’s filings have actually increased, with his firm filing 51 lawsuits between mid-March and early April (39% of all copyright infringement lawsuits filed since the World Health Organization declared a global pandemic).[iii] Likewise, porn studio Strike 3 Holdings is also keeping busy during the pandemic, having filed a more modest 11 new lawsuits since mid-March.[iv] The uptick in these types of cases is potentially correlated to the increased use of content during quarantine and the reduced number of opportunities for photographers and other content creators to earn a living. So, what’s a pandemic hermit to do?
The short answer: the same thing you’d do in pre-COVID life. Even in these strange times of social distancing and mandatory isolation, the same rules apply even when unauthorized content use is undertaken for seemingly laudable reasons such as alleviating boredom, distracting your kids, or entertaining your Instagram followers. For better or for worse, there is no exception in the Copyright Act for what’s going on out there, so vigilance in defense as well as enforcement is paramount. For instance, the test for fair use set out in section 107 of the Copyright Act of 1976 requires a lot more than benevolence in alleviating boredom or even supplementing one’s income during hard times to successfully fend off a claim of infringement. One of the keys to establishing a viable fair use defense is “transformative use” – use of existing content that adds new expression, meaning, or message to the original underlying work. Simply using the content as intended, even in an unprecedented environment, almost certainly will not be considered transformative. As tempting as it may be to utilize others’ content for a seemingly good cause, good intentions do not a fair use make.
Best practices for content usage remain largely unchanged. The first-tier best solution is to use vetted licensed content (ideally pursuant to representations, warranties, and indemnification from the licensor) or seek permission, preferably in writing, directly from the copyright owner. There are plenty of options out there for many types of content. Licensing agencies like Getty Images, Shutterstock, Adobe, and Pond5 are stalwarts for visual content. Many book and journal publishers are now offering resources[v] for newly minted home teachers. Creative Commons licenses and use of public domain material are also viable options, particularly for photographic content, although may be less useful for things like popular music and are not always fool proof. Music licensing is a unique beast that could fill an entire treatise, but suffice it to say that several licenses may be required depending on the nature of the use, including public performance licenses from performing rights organizations like ASCAP, BMI, SESAC, and Global Music Rights, “mechanical” licenses from music publishers and “master use” licenses from labels when content is downloadable, and synchronization licenses from publishers and record labels for music that is cued up with accompanying video content. It’s certainly worth noting that some sites offer royalty-free and low-cost licensable music, such as Freeplay Music, Audioblocks, and Free Music Archive, without the added worry of the music licensing labyrinth.
Reliance on defenses like fair use should be a last resort, and in such cases, it is always wise to seek advice from an experienced copyright lawyer. And, on the other side of the equation, if you believe your content is being used in a way that violates your copyright rights, platforms like YouTube and Instagram have DMCA takedown forms for removal of infringing content, but recent developments in the law require at least some consideration of whether the user has potential defenses (such as fair use) before submitting a takedown notice.
As we stay vigilant against the virus that is causing so much havoc worldwide, we must also make sure that we stay within the bounds of the law and mitigate our legal risks as we mitigate our health risks. While troubled times such as these call for cooperation, collaboration, forgiveness, and flexibility, absent content owners and users working together to reach mutually beneficial arms-length deals, or the creation of a collective effort to allow free use of IP like that of Open COVID Pledge[vi] for health-based patents and technology, the rules remain as they were even if the world outside doesn’t.
This article appeared in the May 1st issues of LAW360 Intellectual Property, LAW360 Media & Entertainment, and LAW360 Coronavirus.
[i] “Announcing a National Emergency Library to Provide Digitized Books to Students and the Public,” Internet Archive Blogs (Mar. 24, 2020), https://blog.archive.org/2020/03/24/announcing-a-national-emergency-library-to-provide-digitized-books-to-students-and-the-public/
[ii] Bill Donahue, “During Pandemic, Prolific Copyright Lawyer Keeps Suing,” Law360 (Mar. 27, 2020), https://www.law360.com/ip/articles/1257593/during-pandemic-prolific-copyright-lawyer-keeps-suing?nl_pk=db11a53e-b04f-44a7-96e1-76824544133d&utm_source=newsletter&utm_medium=email&utm_campaign=ip
[iii] See id.
[iv] See id.
[v] “What Publishers Are Doing to Help During the Coronavirus Pandemic,” Association of American Publishers, https://publishers.org/aap-news/covid-19-response/
Broadway producers interested in recording musicals for streaming platforms should pay attention to a new lawsuit.
The complaint was filed by Chapman Roberts, a Broadway music arranger, and alleges that a team of Broadway producers entered into an agreement with the plaintiff in 1994 to make original vocal arrangements of some famous songs from Jerry Leiber and Mike Stoller for their musical revue, Smokey Joe’s Café. According to the complaint, the contract stated that Roberts’ arrangements in the show could not be performed, transcribed, recreated, copied, published, or recorded without his permission.
But, according to the complaint, in 1999, Broadway Television Network recorded a couple of performances of the Tony Award-nominated show without Roberts’ permission.
“When Roberts learned of this, he contacted BTN, and BTN then asked retroactively for permission to commercially distribute the recording of the [m]usical to the public,” his lawyers claim. But, it is alleged that no agreement was ever reached, and Broadway Television Network broadcast the recording as several pay-per-view events and then licensed it for distribution through BroadwayHD, a video on-demand service for musicals and plays.
More recent digital streaming licenses of the recording purportedly have occurred, and in October, Roberts sued Broadway Television Network, BroadwayHD, and several other related parties in federal court, alleging direct and contributory copyright infringement and the intentional and knowing distribution of false Copyright Management Information.
The merits of this lawsuit aside, which the court will decide in due course, Broadway producers should bear in mind the following three lessons from the allegations in the lawsuit.
1. When creating an audiovisual recording of a theatrical production, Broadway producers should be certain to obtain all of the necessary rights. Experienced entertainment attorneys can help producers determine which rights are necessary and who owns them – and then negotiate the deals for those rights.
2. The rights to various protectible elements required to perform a work on stage do not necessarily include the right to create and exploit an audiovisual recording of the same work on stage. While some contracts might include provisions that address audiovisual productions, for many elements of a theatrical production, it is likely that the audiovisual rights will need to be granted in a separate license agreement.
3. If Broadway producers cannot successfully obtain all of the necessary rights for an audiovisual recording of a theatrical production, then they should not proceed with distributing the recording. Missing some of the necessary rights will frustrate deals with distributors who do their homework, and the recording might result in a lawsuit, like this lawsuit involving Smokey Joe’s Café.
The case is Chapman Roberts v. BroadwayHD LLC et al., Index No.: 1:19-cv-9200 (S.D.N.Y. Oct. 4, 2010).
“Stay Home With: Yungblud,” a weekly series featuring the U.K. recording artist and his band as they create music while in quarantine, premiered this week as part of YouTube’s “Stay Home #With Me” campaign. Amy Stein represented producer Stick Figure Entertainment in the license agreement with YouTube and agreements with Yungblud and his label, Interscope. Viewers are encouraged to donate to No Kid Hungry.
CDAS Entertainment attorney Marc Hershberg fielded questions at the National Alliance for Musical Theatre (NAMT) Technology & Theatre Virtual Conference: Digitizing the Fourth Wall, a curriculum designed to help regional theatres, in particular, use new digital technologies to reimagine staged theatrical storytelling.
With the recent spread of the novel coronavirus COVID-19 and its unprecedented precipitation of social-distancing, work-from-home policies, shelter-in-place orders, and limitations on foreign travel, many individuals may be questioning whether certain contractual obligations are excused. This article provides a primer on the contract concepts of force majeure, impossibility and impracticability, and related provisions that affect, and may in certain instances excuse, performance of contractual duties owing to changed circumstances outside any signatory’s control.
A force majeure clause is a contract provision that excuses a party’s performance of its obligations under a contract when events beyond the party’s control make performance impossible. To invoke a contract’s force majeure clause, a party must typically demonstrate that (1) a disruptive event enumerated by the force majeure clause has occurred; (2) the risk of nonperformance was not foreseeable; and (3) that the event has rendered the party’s performance impossible.
A party looking to invoke a force majeure clause must follow several steps:
First, a party must examine the contract’s definition of what constitutes a “force majeure” event and demonstrate that the change in circumstances was included within the definition. Force majeure events will have been enumerated within a force majeure clause and generally include: Acts of God; severe acts of nature or weather events including floods, fires, earthquakes, hurricanes, or explosions; war; acts of terrorism; epidemics; acts of governmental authorities such as expropriation or condemnation; changes in laws and regulations; and strikes and labor disputes.
Determining whether a force majeure clause applies is a highly fact-intensive exercise, because whether a party is excused for non-performance stems from the specific contractual language used within an agreement. For example, some contracts’ force majeure provisions may specify disease, epidemics, or pandemics as cause for non-performance, while others may only refer to disease-related disruptions by reference to “Acts of God” or catch-all phrases such as “any event or circumstance beyond the reasonable control of the affected party.”
Where disease-related occurrences have been specifically enumerated, a party may find it easier to invoke its force majeure clause in the context of COVID-19. It may be more challenging where, instead, there is only catch-all language in place; however, a catch-all phrase, or similarly broad language (such as a force majeure clause that begins its list with “including, but not limited to”), may provide some protection, particularly if courts relax their traditional preference for excusing performance solely based on clearly enumerated circumstances, in response to an onslaught of COVID-19 related contract disputes. Additionally, where a party can point to a governmental restriction in place because of COVID-19, it may have additional grounds to defend nonperformance.
Second, an affected party must demonstrate a causal link between the force majeure event and its failure to perform. In other words, a party’s performance must be impossible because of the changed circumstances surrounding the contract. For example, in light of COVID-19, the owner of a performing arts venue may successfully argue that recent government orders in his or her state have made it impossible to continue under contract with scheduled performances and obligations to performers, considering the widespread uptick in closures of non-essential businesses. On the other hand, should both parties to a contract be capable of conducting transactions online and/or having a history of remote online transactions, it may be more difficult to argue that COVID-19 has rendered performance impossible (at least without demonstrating other exigent circumstances).
Upon successfully invoking a force majeure provision, a party may either suspend performance or terminate the contract outright, depending on the scope of its force majeure clause. It is thus important to verify the terms of the clause, which may also dictate that force majeure coverage will only kick in after a certain period has elapsed, such as 90 days.
If the contract does not contain a force majeure clause, a party may turn to the common law defenses of impossibility or impracticability to excuse performance (though note that New York only recognizes impracticability in rare circumstances, such as in connection with sales of goods under the Uniform Commercial Code). A party may also invoke additional contract provisions where present, such as the “Material Adverse Effect” provision common to many commercial contracts.
Impossibility & Impracticability
Impossibility and impracticability exist where circumstances extraneous to a contract render a party’s performance either impossible or impractical. Although the contract itself was adequately formed and would otherwise maintain its binding effect, these defenses recognize that a post-formation change in circumstances has fundamentally altered the ability of the parties to perform under it. A party’s performance will be excused if the following elements are met:
- An unforeseen event has occurred. Akin to the events enumerated in force majeure clauses, these may include natural disasters, strikes, and other major events.
- The nonoccurrence of this event was a basic assumption of the contract. At the time of contracting, the parties did not foresee the event that has since occurred, regardless of whether it was theoretically “foreseeable”. This assumption of nonoccurrence need not be explicitly outlined within the contract, but must be generally apparent from the nature, terms, and purpose of the contract. Under the Uniform Commercial Code, which governs sales of goods, a “[d]elay in delivery or non-delivery in whole or in part by a seller . . . is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made.” U.C.C. § 2-615. For example, this provision may apply in the event of a labor dispute where striking workers fail to deliver a shipment of the seller’s goods. In such cases, a seller must seasonably notify the buyer of the delay or non-delivery, and, where a seller may still partially perform, must allocate production and deliveries among customers in a “fair and reasonable” manner.
- The effect of the event has rendered the party’s performance impossible or impracticable. The changed circumstance must be extreme, such that it is unduly burdensome or impossible for the party to comply as originally planned; where impossibility is concerned, under New York law, the subject matter of the contract must have been destroyed or the means of performance must have been rendered objectively impossible. The party seeking relief from its obligations under the existing contract must also show that it was not at fault in causing the event. The reasoning behind this requirement is clear: a party should not be able to take advantage of his or her own misconduct. Here, it is also important to determine how risk has been allocated between the parties under the contract. Even where the other requirements are met, if the adversely affected party assumed the risk of the occurrence of the changed circumstances during contract formation (impliedly or explicitly), it will not be able to invoke impossibility or impracticability. To gauge risk allocation, a party should examine the express language of the contract (i.e., what disruptive events the parties contemplated, and which party was to bear the associated loss and expense), or even the parties’ course of business and dealings. Industry customs may also provide clues to proper risk allocation. For example, industry custom in property rentals is for a premises owner to obtain casualty insurance rather than the party hosting its event on site. As such, risk for the loss of the property would flow more naturally to the owner.
Other Contract Clauses
Various additional contractual provisions may relate to an unexpected event like COVID-19.
- Material Adverse Change (MAC) Clause
Many commercial contracts include a material adverse change clause (otherwise known as “material adverse effect”). Where present, this clause could excuse performance or allow a party to suspend performance should a materially adverse change occur. Events constituting a materially adverse change are, as with force majeure provisions, commonly enumerated specifically within the contract and typically also involve wide-scale disruptions.
Historically, MAC clauses have been difficult to enforce, as courts are wary of excusing contractual performance for short-term changes in circumstances, but as is possible with force majeure and related defenses, courts may shift their stance in the coming months. For example, following the September 11, 2001 attacks, New York courts were more amenable to viewing declining rental prices in Manhattan as grounds to declare a material adverse change (See In re Lyondell Chem. Co., 567 B.R. 55, 123 (Bankr. S.D.N.Y. 2017), aff’d, 585 B.R. 41 (S.D.N.Y. 2018) (citing River Terrace Assocs., LLC v. Bank of N.Y., 10 Misc. 3d 1052(A), 2005 WL 3234228 (N.Y. Sup. Ct.), aff’d, 23 A.D.3d 308 (N.Y. App. Div. 2005))). Further, New York courts have allowed commercial parties to cease contractual performance based on demonstrated extensive financial losses during the pendency of a merger (see Katz v. NVF Co., 100 A.D.2d 470, 471 (N.Y. App. Div. 1984)).
Commercial contracts commonly contain covenants obligating parties to undertake or refrain from certain behavior. While it is unlikely that parties would have allocated obligations or risk regarding COVID-19 in a covenant, it is worth revisiting covenants within a contract to gauge whether they will affect or be affected by current circumstances. For example, many agreements include covenants obligating parties to provide notice that they are invoking force majeure or that material events have occurred that could give rise to litigation or loss beyond the ordinary course of business.
- Termination Provisions
Even if parties may not utilize force majeure or other contractual provisions to justify non-performance under a contract, there may be termination provisions that kick in based on the occurrence of certain contingencies, whether at-will or otherwise, such as for late delivery or a breach of a “time is of the essence” clause. It is worth viewing any such provisions within the context of the larger defenses of impossibility, impracticability, and force majeure excusal of nonperformance, in case the other party nonetheless attempts to invoke these doctrines to negate invocation of a termination provision.
This is not the law’s first brush with the unexpected, and although this is a time of wide-reaching uncertainty, woven into contract law, particularly, is a system to guide parties through the serious impacts that unexpected events may have. Our team at Cowan, DeBaets, Abrahams & Sheppard LLP will continue to provide updates on legal developments related to the present circumstances and we are available should you request further or specific guidance.
Tune in to the rewatch podcast Fake Doctors, Real Friends on iHeartRadio to hear Ben Jaffe’s clients Zach Braff and Donald Faison take us behind the Scrubs and hijinks at Sacred Heart Hospital. See what all the excitement is about.
Our sincere condolences go out to Tomie dePaola’s close colleagues, including literary agent Doug Whiteman and personal assistant Bob Hechtel, his friends, and generations of fans throughout the world. We know his legacy will live on in the imaginations of young readers everywhere who are charmed by his words and images.