Legal Blog

Fair Use in Gaming Content – FAQS For Creators

By Simon Pulman and Mikaela Gross

Fair use is one of the most important – and most misunderstood – concepts in the area of copyright law. It is an important concept for anyone who is using content owned by third parties – which includes anyone who livestreams gaming, creates “let’s play” videos or otherwise uses gaming assets and branding. Unfortunately, there is a lot of misinformation on the internet and thus creators are often unclear about their rights and responsibilities.

With that said, here are answers to some frequently asked questions for creators:

What is Fair Use?

Fair use is an exception to the general principle that unauthorized use of a copyrighted work is copyright infringement. Simply put, if a claim of copyright infringement is brought against a defendant, the “defendant” can try to demonstrate they made a fair use of the allegedly infringed work in order to prevail in the case.

Because fair use is a defense, only a court can say whether a particular use of copyrighted material is a “fair use.” However, experienced attorneys can provide an opinion, based on their evaluation of the use using the four-factor test (see below) and their knowledge of case law.

What are the Four Factors?

Courts look at four factors when making a fair use determination

  • the purpose and character of your use
  • the nature of the copyrighted work
  • the amount and substantiality of the portion taken, and
  • the effect of the use upon the potential market.

The application of these four factors is nuanced and often complicated, but in short, the use of a copyrighted work is not likely to be fair use if it is used for the same or a similar purpose for which it was originally intended or in advertising/marketing materials, uses a lot of the original work including its most important parts (what the courts have called “the heart of the work”), and/or is used in a manner that competes with the market for the original work. It is more likely to be fair use if the new use is “transformative” in that it comments on, critiques, or otherwise adds new meaning to the original work in some way, if only a small portion of the original work is used (i.e., only enough for the user to make their point), and if the original work is not being used to advertise or otherwise promote the new work or use. So, if a video talks about, for example, loot box mechanics or the historical treatment of race in gaming by using game clips as examples, commenting on and analyzing those clips, it is probably more likely from a legal perspective to be fair use than straight game footage.

Note, however, that there is no bright line amount of use that constitutes fair use. For example, you can never assume that “if you use less than 5%, that’s fair use” – courts have found using only a line or two of text or music to be infringing. If you are in doubt, you should speak to a lawyer.

Is Crediting Important?

It’s nice, and may be considered best practices or industry custom, but it’s generally not relevant for a legal determination of fair use.

Can’t I Use a Disclaimer?

In short, no. Those disclaimers that you see on YouTube stating “This is a fair use. No copyright infringement intended” are generally not legally relevant. There is a small chance that they could be helpful to you in determining the damages that you owe in the event that you are found to be infringing, however, because they may bear on whether your intent was “innocent” or “willful.”

What if I get a DMCA takedown notice? And if a website removes my video, do I have any recourse?

The DMCA notice and takedown process provides copyright owners with a way to request removal of their copyrighted work from a website or other internet service if they believe the use infringes their copyright. To benefit from the “safe harbor” from copyright infringement the DMCA provides ISPs, the website or platform must designate a registered agent to receive and process DMCA takedown notices.  DMCA notices must include certain specific information to comply with the law, and the registered agent of the ISP has the job of reviewing and determining whether to comply with the takedown request.

An ISP, such as a platform that hosts gaming content, does not have to comply with a DMCA notice if the notice does not fully comply with the legal requirements for a takedown notice. However, if an ISP does remove content following receipt of a DMCA notice, it must also promptly notify the party that posted the video. That party then can file a counternotice if it believes the content was wrongfully taken down, for instance if the use of the copyrighted work is likely to be a fair use.

Whether you’re a platform looking to benefit from the protections of the DMCA safe harbor, or a content creator looking to correct an improper takedown of your video content, you should consult with an attorney to make sure you’re in compliance with the DMCA’s requirements, and are not taking any actions that could potentially subject you to liability down the line.

Will I Be Sued For My Videogame Videos?

This is where we have good news. Because video game publishers largely view streaming and game-related media to be helpful to their business (under the theory that exposing more people to the game will increase sales), publishers rarely bring copyright infringement lawsuits against gamers. The exceptions where publishers do bring legal action tend to arise in instances where users create new installments of games (what lawyers and courts would call “derivative works”) without authorization, insert other infringing material into games via mods, create and sell software “cheats,” or do something that is offensive in addition to being infringing (e.g., adding explicit or hateful material). In recent years, major players such as Take-Two Interactive and Epic Games have actively policed these types of infringements of their copyrighted games.

This means that it isn’t always necessary to apply the fair use analysis outlined above. However, those creators who are seeking to make heavy commercial use of game assets (other than solely streaming/YouTube video revenue) should consult with an attorney before embarking on their plans to ensure compliance with copyright law.

One of the greatest challenges in defending claims of copyright infringement in the gaming space seems to be the wildcard of the judge’s expertise and understanding of the emerging fields of gaming and streaming. A key defense strategy will inevitably involve a careful framing of the discussion, including describing how the game works, what the purpose of the video is, explaining the meaning of common terms, and the context and communities in which these activities exist online.

Moreover, everyone should keep an eye on the risk factors listed below.

What Red Flags should I be aware of?

While the use of gaming footage in the form of livestreaming and “let’s play” type videos rarely results in a claim, there are a number of uses that creators should be particularly cautious about:

  • Licensed music: Any game video that features licensed popular music is more likely to cause an issue with the game creators and/or the owners of the rights in the music being used. Creators are generally fine with exhibiting those videos on YouTube (which has a blanket license with multiple labels), but uses of music in other contexts or on other sites could trigger a DMCA takedown or a copyright infringement claim.
  • Choreography: Any videos that use choreography or dance moves tend to pose a higher risk. There has been a spate of recent choreography-related claims alleging that games have made unauthorized use of protected dance moves, in particular against Epic Games for the use of short animations in its game Fortnite. Choreography is probably an overlooked area (versus other areas of copyright risk) and thus it is not a fait accompli that the game publisher will have secured the rights, so a video creator could be pulled into a potential lawsuit. Obviously dance-focused games are highest risk, but other games that include “celebration dances” are also a risk. While many recent choreography-related claims have failed because copyright law does not protect simple routines or common social dances, they are nonetheless costly to defend and could become increasingly risky as the law develops in this area.
  • Street Art and Tags:  Videos that include any kind of pre-existing graffiti or tags, or even original designs that closely resemble a pre-existing artwork, are similarly susceptible to a copyright infringement claim. Street artists have become notorious copyright infringement plaintiffs in recent years, and like choreography, game creators may not have cleared the rights to these works. The unauthorized use of graffiti may also raise trademark and right of publicity claims, depending on the context in which the tag is used.  
  • Athletes and other Identifiable Real People: Any gaming footage that includes the recognizable likenesses of real people (e.g., sports games) is susceptible to a claim. This is not actually a copyright issue, but rather falls under what lawyers call “right of publicity” (i.e., a person’s exclusive right to make commercial use of their name [or alias], likeness and other identifiable features). User-generated content that inserts a real person into a game via a mod could also trigger a claim of this type, particularly from celebrities who regularly monetize their names and likenesses.

Top Five List: Protecting Your Podcast (and You)

By Scott J. Sholder

Although podcasts have been around in one form or another since the early aughts, their ubiquity and popularity has skyrocketed in recent years.  Apple, Spotify, Pandora, Google, and Stitcher, among other platforms, have changed the game when it comes to distribution, variety, and access.  Wildly popular programs like Serial, Pod Save America, My Favorite Murder, and The Daily have set the standard for content excellence across the news and mystery genres, while The Joe Rogan Experience, Comedy Bang! Bang!, WTF with Marc Maron, and Conan O’Brien Needs a Friend are leading the way in the comedy space.

If you want your dulcet tones to break into the digital airwaves and bring your audience information or entertainment and laughs (or maybe all three), you will of course need solid distribution and top-notch content.  But you also need legal protection both for you and for your content.  While podcasting may seem straightforward enough to not warrant the involvement of a lawyer, there’s more to it than you might think.  Here are five things to do to protect yourself and your content when entering the world of podcasting.

  1. Form a Company:  You may have already done this, but setting up a company, whether a corporation, partnership, or LLC, is a smart first step in becoming a content provider.  Apart from tax implications (which your accountant can explain to you), the corporate form creates a shield around you to protect your personal assets from certain forms of liability (for instance, breach of contract), limiting legal exposure to the assets of the company where it can be said that the company is the liable party.  The corporate form may not protect you from torts such as defamation and copyright infringement if you (intentionally or not) slip up in your individual capacity, but the company can still potentially absorb the exposure for torts it is deemed to have committed.  You may also want to use a corporation or LLC to hold your intellectual property (more on IP below) or “loan out” your services as talent, which can be helpful from a financial standpoint (again, talk to your accountant).  Setting up a company can be simple enough to be a DIY project but might become more complicated, requiring professional advice, depending on the arrangement you want and if you have multiple shareholders or members.  But it’s generally not that expensive and could save you headaches in the long run.  Once you’ve formed your company, make sure that you assign any existing contracts to the company (an attorney can help you with this as well), and that future contracts are in the name of the company – not your own name.

  2. Obtain Copyright and Trademark Protection:  To protect your original content, you should apply to register copyrights in that content.  While ideas and concepts are not copyrightable, the tangible expression of those ideas is, including scripts, sound recordings, skits or sketches, songs, and even, in some instances, individual jokes.  If the content is original to you (i.e., not simply copied from someone else) and is in a “fixed” medium of expression, you can apply to register your work with the U.S. Copyright Office.  The application process is more straightforward than the trademark process (discussed below) and the basic fees are reasonable; the bar to obtaining a registration is also pretty low in that “originality” for copyright purposes requires only minimal creativity, and it is far less likely that another copyright owner will challenge your application.  While it may seem onerous to register each episode of a podcast – especially if you release episodes more than once a week – there are ways to potentially streamline the process and keep costs down, and copyright counsel can be helpful in this regard.  Registering copyrights will also help you if your podcast one day moves into other media, such as television or a published book.

    Have a clever name for your podcast?  You should consider applying for a trademark registration.  If you offer goods or services (including entertainment services like podcasts) using a name, logo, or short phrase as a source indicator, you may be eligible for federal trademark protection through the U.S. Patent and Trademark Office.  Simply using the word, phrase, or logo “in commerce” is enough to give you some rights to enforce against infringers, but registration gives you more rights and enhanced damages if someone tries to rip off your mark.  It’s important to note, though, that there are filing fees and other expenses involved in applying to register a trademark (and in maintaining a trademark once it is registered), and during the application process other trademark owners have a chance to challenge your mark if they think it is too similar to theirs.  The application process is also more complex than applying to register a copyright and it is usually advisable to seek legal counsel to help ensure your mark is not “blocked” or otherwise rejected. 

  3. Obtain Necessary Licenses, Releases, and Permissions:  If you are using third-party content (playing audio clips or music, reading from a script or a book, etc.), you should make sure you have permission to do so from the owner of the copyright.  Despite popular misconceptions, there is no magic percentage that you can use without consequence (e.g., 8 measures of a song, 30 seconds of a comedy bit, 5% of a book) and the question of whether something is “fair use” is complex, gray, and extremely fact sensitive.  The best practice is to make sure you have a license (whether written or oral) to use content that is not exclusively yours or seek out content from royalty-free libraries or that can be used under Creative Commons licenses.  And when that content includes the voice or other identifying aspect of a third party, you’ll need to get that person’s permission as well, separate from the necessary copyright permissions.  A person’s voice is part of their “right of publicity” which is distinct from copyright and generally (with some exceptions) requires permission to use.

    If you have guests appear on your podcast, make sure they sign an appearance release that allows you to use their names and likenesses (e.g., voices) including for commercial, advertising, and promotional purposes and that releases you from liability for the ways in which guests’ names and likenesses are used.  While the best practice is to get written permission, you can also secure this consent verbally by having the guest read a brief script on air.  There are special considerations when dealing with minors that are beyond the scope of this article, and in such situations, it is best to consult a lawyer familiar with minor talent. 

  4. Vet Your Content and Read Your Contracts:  Related to number 3, if you are using third-party content (assuming you have permission), you should make sure that content doesn’t infringe anyone else’s rights.  Issues in the podcasting space, especially in comedy, usually arise in the context of defamation.  For example, if you source a clip of another comedian’s latest standup special and that comedian makes a defamatory statement about another identifiable person, you may be liable for re-publishing that defamatory statement.  The best practice is to review content before using it and consult a lawyer if you have concerns about any piece of content. 

    Also, if you sign any contracts, whether to acquire or license content, or for a third party to distribute or host your own content, read them before you sign them.  If you sign a contract you normally are bound even if you haven’t read it, so always understand what you are signing before you put pen to paper or fingers to keyboard.  When licensing third-party content, make sure you’re indemnified in case the person who provided you with the content didn’t have sufficient permission to do so, and when reviewing terms set out by hosting platforms, know who controls your RSS feed; typically, the host will control it for the period they host it, but unless your content is exclusive to one platform (for instance, Spotify), the platform should not own the stream or the content.  And note that in many jurisdictions, an email agreement is considered a binding contract – so be careful what you agree to via email.  Usually the best time to engage an attorney is when an offer is initially made to you – even if it takes the form of an email as opposed to a formal contract.  There are obviously more issues that may arise than just these, so don’t sign away your rights unknowingly!

  5. Get Errors and Omissions Insurance:  Many insurance companies offer E&O insurance for media and entertainment companies (such as AXIS Capital, AXA XL, QBE, and OneBeacon) and getting coverage is a smart idea particularly given how much litigation arises out of media and entertainment properties.  Media insurance policies often cover copyright and trademark claims, contract claims, defamation claims, and other risks that commonly arise in the media and entertainment space.  While this may seem like an unnecessary cost, especially for an individual or small business, those who make their living in media and entertainment should seriously consider it – and as the podcast business becomes more mature and sophisticated, insurance is increasingly being required in connection with certain forms of distribution.

The Entertainment Industry in 2020: Four Legal and Business Issues For Consideration

By Simon Pulman and Briana Hill

1. AB5 Brings Uncertainty: The new California Assembly Bill 5 (AB5) became effective on January 1, 2020. Originally created to codify the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), and to address the increase of misclassification of workers as independent contractors, the drafting of AB5 is so broad that it greatly expands the definition of “employee” in a way that potentially reclassifies most independent contractors as employees. This has huge potential repercussions for many companies doing business in California, including those in the entertainment industry (which has traditionally been extremely reliant on independent contractors), as companies may now need to provide full employment benefits to individuals previously characterized as independent contractors.

While there are certain statutory exemptions, the exemptions do not cover traditional entertainment job categories.  There is currently very little guidance as to how the law will be interpreted and enforced, and how it will interact with guild rules. It is incumbent on all studios, producers, networks, and other entertainment companies to watch developments closely, and to consult with knowledgeable counsel when in doubt.

2. Continued Evolution in Streaming: The rise of streaming platforms has dominated the film and episodic programming business over the past few years. 2020 is poised to bring the most significant year of change yet, as new platforms such as HBO Max, Quibi and Peacock will join the recently launched Apple TV+ and Disney+, and incumbents such as Netflix, Hulu, and Amazon. Each of these platforms is targeting a slightly different position in the marketplace, and the economics for content producers vary on a platform-by-platform basis based on the rights and territories that each discrete platform is presently seeking to acquire.

From a deal-making perspective, it is possible that the increased competition will put pressure on platforms to offer greater transparency into the performance of their content and potentially more meaningful participation for creators in the upside of successful series and movies. Additionally, it will be interesting to see if Netflix blinks with respect to its (to date) steadfast insistence on dropping all series on an all-at-once “binge” model, given the plaudits and positive buzz that Disney+ has received for releasing episodes of The Mandolorian on a weekly basis. Finally, Quibi is a truly interesting new entrant that is planning some fascinating creative experiments with short form and interactive content, in addition to providing producers with a business model that is arguably more favorable than some of its competitors.

3. Exclusivity Reigns in Podcasting: 2019 was a year of huge growth and continued maturation for the podcast industry. Mainstream coverage of the industry expanded significantly, many major celebrity names launched podcasts for the first time, and a number of big media conglomerates entered the space or materially increased investments in their podcast divisions. The maturing of the podcast industry has had notable effects on the business side of this burgeoning medium. Participants at all levels in the value chain have started to stake a claim to ownership of, or participation in, podcast rights and revenues. Moreover, the deal-making has become much more sophisticated. Prior to 2019, the dominant podcast distribution model was very simple – make your podcast available on as many ad-supported platforms as possible, and split revenues between stakeholders (usually the creator and the production company or network) (often in a straight 50/50 configuration). This began to change during 2019 as certain companies grew and engaged more experienced representation, and entrants such as Spotify and Luminary started to lock down exclusive rights to content.

Expect the podcast content arms race to heat up in 2020, as high-profile shows and creators commit exclusively to platforms in exchange for sizeable minimum guarantees. However, platforms that offer podcasts in combination with music (such as Spotify, Apple, iHeart, and Pandora) would appear to be best positioned in the market versus pureplay podcast subscription outlets because of their existing subscriber bases and the value proposition of bundling music with podcast (and, indeed, expect 2020 to be the year of the “music podcast”).

4. Gaming Grows: As Netflix Chairman and CEO Reed Hastings famously opined, Netflix is primarily competing with Fortnite rather than with other SVOD platforms. Expect 2020 to be a huge year for gaming, with the release of several big titles (such as Cyberpunk 2077 and The Last of Us 2) being followed by the impending launch of much-anticipated new consoles Playstation 5 and Xbox Series X in the fall.

The continued growth of gaming will fuel a corresponding growth in esports and “game-adjacent content culture” – the creation, consumption and interactive fan participation in content around the culture of videogames, via platforms such as Twitch, Mixer, YouTube and Instagram. All of the next-generation gaming platforms will include built in recording and streaming capabilities allowing gamers to easily create media and engage with other users. While this arguably implicates copyright issues for rightsholders, many of the game companies have taken a permissive stance regarding streaming (and other activities, such as creating derivative works), believing it to be helpful to their business – although distributors must also be cognizant of other issues such as right of publicity.

Additionally, as discussed in a previous blog, expect a flurry of announcements during 2020 and beyond with respect to entertainment extensions of videogame properties – most notably film and TV adaptations, but also podcasts and graphic novels. A significant portion of these will probably involve the original game developers and/or publishers in a meaningful way, as rightsholders understand the importance of maintaining a strong and consistent brand across platforms.

Other sectors of the entertainment business should ignore gaming at their peril. For more, we recommend reading “7 Reasons Why Video Gaming Will Take Over” by Matthew Ball.

Acquiring Videogame Properties for Film and TV: Considerations for Buyers

By Simon Pulman

The videogame industry is now the most profitable individual sector of entertainment, having experienced exponential growth over the past forty years. Great games can quickly generate a large and unusually engaged fanbase, and as a result it could be argued that games will be the single biggest source of major entertainment brands for the foreseeable future. A cursory glance at Twitch reveals tens or hundreds of thousands of viewers concurrently watching streamers playing games like Fortnite, The Witcher, Sekiro, Overwatch and Grand Theft Auto. Even indie titles like Hollow Knight, Stardew Valley and Untitled Goose Game can attract thousands of attentive viewers. The potential to grow videogame properties into multi-platform entertainment franchises is greater than ever.

Historically, television and film adaptations of videogames have been critical and commercial misfires. However, the general growth of gaming, the increased sophistication of storytelling in videogames, and the general demand for IP-based content (driven in part by the emergence of multiple new streaming platforms) has created a perfect storm. Accordingly, we are currently seeing more videogame adaptation deals than ever before, some of which are very complicated and extremely high level.

While the fundamental structure of acquisition or licensing deals for videogame properties is similar to that used when acquiring older forms of media such as books and articles, there are some specific considerations when dealing with videogame properties, some of which are listed below. It is strongly recommended that parties on both sides of the negotiation engage an attorney and/or agent who is familiar with both the film or TV (as applicable) and videogame businesses to negotiate the deal. It will be very difficult to close a deal without an understanding of the gaming world and what motivates its rightsholders.

  1. What is the “Property”? : Up until recently, it was relatively easy to define what a “game” was. Games came on disc, cassette, cartridge or CD sold as physical products through brick and mortar retailers for a one-time payment. Successful games yielded sequels and spinoffs (and sometimes “add ons”), but games were generally released in a fixed form. With the emergence of digital distribution and the concept of “games as a service,” that has gone out of the window. Games are now routinely and regularly patched, updated, supplemented and expanded via a combination of free and paid downloadable content (or “DLC”). For example, the game No Man’s Sky has been updated and expanded so comprehensively since its launch in 2016 that it is almost unrecognizable as an experience from the version released at launch. As a result, it is imperative that buyers understand what they are acquiring – and unless negotiated otherwise for a very specific reason, the “Property” that is granted to the buyer should include all elements, versions, expansions and content relating to a title, for as long as such title is supported. Ideally, all sequels and spinoff games would be included in the rights grant as well (but that is a more nuanced subject that may require some discussion).
  2. Investigate Third Party Interests: While other forms of properties (including novels and podcasts) can have complicated chain-of-title issues, videogames are particularly likely to have unforeseen ownership and/or approval issues complicating the acquisition process. Often the rights in the game may be owned and controlled by a publisher, but sometimes the actual creator or developer may have approval rights or other interests that need to be addressed. Things get even more complicated when dealing with Japanese properties, where there may be one or more intermediaries to deal with before one is able to negotiate directly with the rightsholder. It is important to ask the right questions at the very start of negotiations to be able to identify and address any specific issues.
  3. Discuss Controls and Approvals: While television and (particularly) film producers often view their medium as the pinnacle of artforms, it is important for producers to understand that – in many circumstances – a videogame publisher or developer does not need them. Many videogame rightsholders make millions or billions of dollars solely from videogame sales, which can then be supplemented through the sale of DLC and merchandise. Even independent developers may be able to make a good living through a combination of the right business model and smart engagement with their fanbase. As a result, rightsholders will often be extremely cautious about entering into any kind of arrangement that could tarnish or dilute their brands. No sophisticated rightsholder today would agree to the kind of agreement that yielded the likes of Super Mario Bros. (1993), Street Fighter (1994), BloodRayne (2006) or Tekken (2009), all of which were critically lambasted and bore little relation to their source material.

Indeed, many videogame rightsholders are unlikely to be prepared to enter into a traditional option purchase type arrangement where they are viewed as passive rightsholders without any kind of active involvement or approval. Producers therefore need to think carefully and walk a tightrope to ensure that they make the rightsholder feel invested and comfortable, without ceding control in a manner that could jeopardize their ability to set up and produce the project. Of course, if they can strike the right balance then the dividends – both creative and financial – could be spectacular.

New Year, New Privacy Laws—Are You Compliant?

As we head into the new year, the CDAS Digital Media and Technology group would like to remind you about new developments in privacy law that might affect your business.

Greater Transparency and Access Under New California Consumer Privacy Act (CCPA)

Taking effect on January 1, 2020, the new California Consumer Privacy Protection Act requires businesses, both inside and outside California, to provide increased transparency and access regarding their collection and monetization of personal data from California residents. Companies that, on an annual basis, have gross revenues of at least $25 million, obtain personal information of at least 50,000 California residents, households, and/or devices, or generate at least half of its revenue from selling California residents’ personal information must disclose data collection practices to Californians upon both request and collection, delete personal information about a consumer upon request, provide consumers the opportunity to opt out of the sale of personal information, and comply with certain data security procedures or else face lawsuits from those consumers subject to a data breach. Non-compliant companies are subject to fines of $2,500 per violation and up to $7,500 for each “intentional violation,” as well as damages in a possible consumer data breach lawsuit. If you believe CCPA might apply to your business now or at any point in the future, contact our team for a briefing on compliance.

EU Court of Justice: Active Consent Required for Cookie Collection from EU Citizens

If your business is subject to the European Union’s General Data Protection Regulation (GDPR), a new ruling from the EU Court of Justice could affect how you disclose your use of cookies and similar technology to your customers or website visitors in the European Union Member States and European Economic Area. A website that tracks and stores its users’ website activities must obtain those users’ active consent, meaning a pre-checked box is insufficient for a user to intentionally opt-in to the website’s use and storage of cookies, regardless of whether the tracking data being collected is personally identifiable. The court also reiterated GDPR’s disclosure requirements around the use and storage of, and third-parties’ access to, cookie data. Specifically, a website should not have a popup banner stating cookies are already being stored when a user lands on the site; these types of banners are common on US websites and usually have a box to click “ok” or “dismiss,” but that is not considered active consent in the EU even if a user clicks the “ok” or “dismiss” box. Regardless of whether GDPR applies to your business, the changing landscape of privacy law suggests that inclusion of clear options for users to accept or reject the use of cookies is a best practice across the board.

New York is Next

This summer, New York passed the Stop Hacks and Improve Electronic Data Security Act (SHIELD Act), which requires companies that buy or license New York residents’ private information to develop, implement, and maintain reasonable physical, technical, and administrative safeguards to better protect the security, confidentiality, and integrity of personal information. Based on the passage of the SHIELD Act, privacy lawyers and policy experts alike anticipate a robust data privacy law will be enacted in New York similar to CCPA. The New York State Senate is currently considering the New York Privacy Act (SB S5642), which would regulate the storage, use, disclosure, and sale of consumer personal data by businesses operating or marketing products and services in New York by requiring companies to “act in the best interests of the consumer without regard to the interest of the entity, controller or data broker” and provide their consumers with a “clear, meaningful privacy notice” and an opportunity to opt in or out opt of providing personal data. Companies that fail to comply would be subject to enforcement actions by the New York Attorney General under deceptive trade practices and unfair competition laws. Most recently, the bill was discussed in committee; stay tuned for further updates from CDAS as this legislation progresses.

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CDAS counsels businesses on data privacy regulations and best practices and can provide guidance and strategy on how to comply with CCPA or GDPR. Contact our Digital Media and Technology group for a compliance evaluation and advice on best practices.

Managing Risk for Podcasts Through Media Liability Insurance

Producers, distributors, and marketers of creative content are vulnerable to legal risks, such as claims of copyright or trademark infringement, plagiarism, defamation (i.e., libel for written works, slander for audio or audiovisual works), misappropriation of a public figure or private person’s name, likeness, or other personal attributes, invasion of privacy, and other claims both legitimate or spurious – that can diminish the value of a creative work. This is especially true as a creative work achieves greater distribution or greater popularity or attention. Media liability insurance, a specialized type of errors and omissions insurance (commonly abbreviated as E&O), provides production companies, broadcasters, publishers, marketers, advertisers, and others in the digital media and entertainment industry with coverage against these types of claims. With more than half of Americans reporting having listened to a podcast and around 90 million people being monthly listeners, the excitement around podcasts has already given rise to a flourishing, diverse, and investment-rich industry that’s only expected to grow. As podcasts become more widely distributed, the risk of content related claims increases and producers, distributors, and marketers are increasingly looking to media liability insurance coverage to mitigate those risks.

Coverage Limits and Basis

The most typical E&O policy for podcasts and other media provides coverage on an occurrence basis with limits of $1,000,000 per occurrence, and $3,000,000 in the aggregate. In other words, the insurer will cover costs and damages up to $1,000,000 per claim made against the primary insured party (i.e., the production or distribution company or advertiser) or an additional insured party during the coverage period (also referred to as the policy term), and up to $3,000,000 in total for all claims made and paid out during the coverage period, with respect to content first disseminated or distributed during the coverage period. An “occurrence” policy covers claims for incidents or damages that occurred during the coverage period, regardless of when the claim was actually made, whereas a “claims made” policy only covers claims made during the coverage period for incidents or damages occurring during the coverage period.

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SCOTUS Rules Federal Ban on Registration of “Immoral” or “Scandalous” Trademarks Violates the First Amendment

In a major win for free speech advocates, on Monday, June 24, 2019, the United States Supreme Court ruled that a federal statutory ban on the trademarking of words and symbols that are “immoral” or “scandalous” violates the First Amendment.

Erik Brunetti of Los Angeles, a fashion designer for the streetwear brand “FUCT,” brought suit after being denied registration of the mark “F-U-C-T.” Brunetti applied for registration of the mark in 2011, but an examining attorney of the United Stated Patent and Trademark Office refused registration on the grounds that the phonetically profane term was too “highly offensive” and too “vulgar.” Brunetti appealed to the Trademark Trial and Appeal Board (the “TTAB”), but to no avail, as the TTAB affirmed the registration refusal. Brunetti took his case to the Court of Appeals for the Federal Circuit and sought a facial Constitutional challenge to the Lanham Act’s ban on “immoral or scandalous” marks; the appeals court held that the ban violated the First Amendment, and the Supreme Court granted cert.

In a rare bipartisan ruling, Justice Elena Kagan wrote for the majority, and in a 6-3 decision, was joined by Ruth Bader Ginsburg, Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Clarence Thomas. Justice Alito added a brief concurrence, and justices Sotomayor, Roberts, and Breyer each concurred in part and dissented in part.

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Making Money and Protecting Yourself in Podcasting: Three Considerations for Unscripted Podcasts

The market for unscripted podcasts –from true crime, to sex and relationships, to sports and pop culture – is exploding. With top podcasts bringing in five figures in revenue per episode and opening the door to multiple ancillary opportunities including merchandise and live touring, what do podcast producers need to know to protect themselves and their commercial opportunities? Here are three quick recommendations:

  1. Secure Releases: It is best practice to obtain signed release agreements from everyone who appears on your podcast prior to them appearing or making a creative contribution. Whereas in the past it might have been possible for part-time podcasters to take a looser approach to securing signed paperwork, the podcast business is now becoming more sophisticated, and buyers are becoming more rigorous and demanding. Distributors, advertisers and financiers will begin requiring standard releases in the same way that Netflix or HBO requires releases when acquiring a documentary film. Releases will also be required in order for you to obtain errors and omissions insurance, which will help insulate you from legal liability in the event that a claim is filed against your podcast. And even if a third party does not require releases, obtaining releases upfront will help mitigate your legal risk. Make sure that you obtain a release from your attorney that is appropriate for the kind of podcast that you are making.
  2. Consider Vetting: Unscripted podcasters should consider working with an experienced first amendment attorney to help vet their podcasts and anticipate legal issues. This is particularly true if you are making statements and allegations concerning individuals who are not public figures (e.g., they are not celebrities or politicians). The potential risk is especially acute for podcasters operating in the true crime space, where stories often unravel in real time and there is a strong possibility of receiving incomplete or inaccurate information and thus making false or defamatory statements concerning a member of the public. An attorney will help review your scripts and ensure that you present information in a manner that is less likely to get you sued. Podcasters in the true crime space should also discuss with their attorney what to do in the possibility that their research and materials become subpoenaed as part of an active police case – in which event, the podcaster could be required to turn over materials and even act as a witness in court.
  3. Think Derivatives: Much of the money in podcasting at the moment arises from derivative rights – the ability to take the podcast into other avenues such as publishing, live touring, live stage, interactive, and especially film and television. Like their scripted brethren, unscripted podcasts are frequently being acquired by tv and film studios and producers – both to be transposed directly as documentaries and other unscripted formats, and for adaptation as scripted productions. Accordingly, it is important that podcasters are prepared in order to maximize their upside in the possibility of a sale. That means – at minimum – securing signed agreements with all contributors and collaborators. You may also want to consider securing life rights and/or exclusivity from your primary subjects. While this can slow down negotiations at the start of the podcast process, it does also ensure that you have maximum leverage when entering into negotiations with film and TV producers (whilst mitigating the risk of being circumvented by a competing project concerning the same subject matter – which is very possible when the subject matter relates to matters of public record, such as a historical event or crime). Your representatives will be able to discuss what is appropriate in order to protect you and your career in the event that your podcast takes off.

Learn more about CDAS LLP Podcasting here.

Protecting Diverse Content: 4 Deal Suggestions

The homogenous nature of Hollywood’s output has been a source of frustration for some time, especially taking into consideration that the stories it has been telling (largely told from a white, cis male, heterosexual, US-centric point of view) do not reflect the composition of the world or its audience. The entertainment business has made some progress recently, with the likes of Black Panther, FX’s Pose and Atlanta, Netflix’s To All The Boys I’ve Loved Before, Always Be My Maybe, Dear White People and Orange Is the New Black, Killing Eve, Hulu’s Shrill and HBO’s upcoming Euphoria, all of which feature diverse casts and generally include women and people of color among the core creative team.

However, we are not there yet. Per UCLA’s 2019 Hollywood Diversity Report, only two of ten lead actors in film are people of color (2.2 of 10 in broadcast TV), while only 1.3 of 10 film directors are female. Transgender actors are virtually invisible in lead roles on television.

This is not only important in the name of fairness, equality and an accurate depiction of the world we live in. Diverse stories also perform well commercially. Per the same UCLA report, “Films with casts that were from 31 to 40 percent minority enjoyed the highest median global box office receipts….films with the most racially and ethnically homogeneous casts were the poorest performers.”

With that said, the following reflects some posts from the perspective of rightsholders (such as book authors, or podcast creators) with some suggestions as to how they can help protect their diverse content in the journey from book (or stage, or podcast, or even video game) to screen. We do a huge amount of rights deals on both buyer and seller side, so we’re quite well positioned to offer observations on trends that we’re seeing.

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Fourth Circuit Rules in Favor of Stock Photographer, Overturning Widely Discussed Fair Use Decision

The rights of a stock photographer were recently vindicated when the U.S. Court of Appeals for the Fourth Circuit overturned a controversial Virginia district court decision, which had held that a production company’s use of a stock photo on a website promoting a film festival was fair use.  In the decision, Brammer v. Violent Hues Productions LLC, No. 18-1763, published on April 26, 2019, the Fourth Circuit determined that Violent Hues Productions, LLC’s online use of a cropped version of Russell Brammer’s photo of the Adams Morgan neighborhood in a list of D.C. tourist attractions promoting the Northern Virginia International Film and Music Festival failed all four factors of the fair use analysis.

The case arises from the unauthorized use of a photograph titled “Adams Morgan at Night” (seen in the decision in Appendix A), which Brammer shot from the rooftop of a building in the Washington D.C. neighborhood in 2011.  Experimenting with various shutter speeds and aperture combinations, Brammer photographed a busy street full of passing cars that appear as trails of red and white lights.  He published a digital copy of the photo on his website and on Flickr with a “© All rights reserved” notice, and later licensed the photo for online use.

Years later, in 2016, Violent Hues downloaded the photo—presumably from Flickr, while overlooking the rights notice—and proceeded to crop out the negative space before posting it on http://novafilmfest.com.  Brammer discovered the use and sued Violent Hues.  After the district court absolved Violent Hues of liability under the fair use doctrine, Brammer appealed the decision, asking the Fourth Circuit to set the record straight.

The Fourth Circuit did just that when it engaged in a thoughtful analysis of the fair use factors.  Its decision is instructive as it adds to the wealth of case law on how to interpret the complex and nuanced doctrine of fair use in a case that many thought would have an obvious outcome.

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