Copyright

Moving the Needle Part II: Court Inks Decision in Favor of Defendants in Solid Oak Sketches, LLC v. 2K Games, Inc. (S.D.N.Y.)

By Scott J. Sholder

Four years ago, we reported on a headline-worthy copyright infringement lawsuit filed in the U.S. District Court for the Southern District of New York dealing with tattoos in video games. The case was brought by a licensing entity for tattoo artists against the makers of the popular NBA 2K games over depictions of real-life basketball players’ tattoos on their digital game avatars.  Last week, after full discovery and extensive motion practice, Judge Laura Taylor Swain granted the defendants’ summary judgment motion dismissing the plaintiff’s copyright infringement claim on grounds of de minimis use and implied license and granted their cross-motion for a declaration that the depiction of the tattoos in the game constituted fair use.  This was the result that we speculated as being the likely outcome in light of the dearth of on-point case law, and it seems to be the correct decision both as a legal and practical policy matter.

2K Games’ NBA 2K series is an annual blockbuster that simulates professional basketball with lifelike depictions of teams, players, arenas, and the sights and sounds of a real NBA game.  The goal is a realistic and faithful rendering of the NBA experience.  One of the lifelike aspects of the game is the re-creation of players’ distinctive tattoos.  Plaintiff claimed that five tattoos for which it owns rights were depicted on NBA players Eric Bledsoe, LeBron James, and Kenyon Martin in the 2014-2016 versions of the game and that such public display violated the Copyright Act of 1976.  Solid Oak owns an exclusive license to the five tattoos but does not have permission to recreate them and does not have publicity or trademark rights in the NBA players’ likenesses.  On the other hand, the players provided the NBA with the right to license their likenesses to third parties, and the NBA granted such a license to defendants.

The court described the tattoos and explained that, for each one, the tattoo artist “knew and intended that when” the NBA player receiving the tattoo “appeared in public, on television, in commercials, or in other forms of media, he would display” the tattoo; that the artist intended that the tattoos would “become a part of [the player’s] likeness”; and that the player “was and is free to use as he desire[d], including allowing others to depict it, such as in advertisements and video games.”  The artists also admittedly knew that the men at issue were NBA players and would likely appear in the media, as well as in video games.

These admissions by the artists were critical to the court’s decision concerning implied license, a critical defense in the context of tattoo copyrights.  An implied license can be found “where one party created a work at the other’s request and handed it over intending that the other copy and distribute it.”  The court held that such was the case here, explaining that that tattooists admittedly granted the NBA players nonexclusive licenses to use the art as part of their likenesses, prior to granting any rights to Solid Oak, and in turn, the players (through the NBA) implicitly granted defendants the right to depict the tattoos as part of their likenesses.

The court also spent significant time explaining its de minimis infringement ruling.  To prove copyright infringement, the plaintiff must prove that the amount copied was not “so trivial as to fall below the quantitative threshold of substantial similarity.”  To make this determination, the court analyzed the amount copied; the length of time the work can be seen; and other factors such as focus, lighting, and prominence, as seen through the eyes of an ordinary observer.  The court held that all three factors weighed definitively in favor of the defendants and that “no reasonable trier of fact could find the Tattoos as they appear in NBA 2K to be substantially similar to the designs licensed to Solid Oak.” 

Laying the foundation of its analysis by describing the many graphical, visual, auditory, and dramatic elements of the 2K games, the court put the overall prominence of the tattoos into stark relief.  The five tattoos comprised between 0.000286% and 0.000431% of the total game data; were never depicted separately from the players (who comprised only 3 out of over 400 avatars); appeared between 4.4% and 10.96% of their actual size; and were only visible when a user selected a particular player, and even then were not fully visible, and were indecipherable during actual gameplay given the speed and erratic nature of the avatars’ movement.  The court, agreeing with the defendants’ statement of undisputed facts, characterized the tattoos as appearing as nothing more than “visual noise,” and found that, even in the rare event the tattoos were displayed, such display was “small and indistinct” and “cannot be identified or observed.”   

Finally, the court engaged in a fair use analysis, holding that all four statutory factors weighed in defendants’ favor.  As to the first factor (purpose and character of the use), the court held that the defendants’ use was undisputedly “transformative,” a critical element of fair use.  While the games depicted exact copies of the tattoos, its purpose in doing so was not the same as the tattoos’ original purposes of self-expression through body art.  Rather, defendants depicted the tattoos to accurately depict the players, notably without even making the details of the tattoos observable.  Moreover, the size of the tattoos was significantly reduced and distorted, such that the game offered no “more than a glimpse” of the tattoos’ expressive value and made up an “inconsequential portion of NBA 2K” on the whole.  And while NBA 2K was undoubtedly a commercial product, the tattoos were incidental to the commercial value of the game and were not used in the game’s marketing.

The court’s analysis of the second factor (nature of the copyrighted work), was more detailed than a typical analysis of this element of fair use.  The second factor asks whether the work is more expressive/creative or factual, and whether the work is published or unpublished, and is typically glossed over by courts as immaterial to the analysis.  While the published nature of the tattoos tipped the second factor in defendants’ favor, the court went on to hold that the tattoo designs themselves were actually more factual than expressive “because they are each based on another factual work or comprise representational renderings of common objects and motifs that are frequently found in tattoos.”  Downplaying the creative and expressive nature of each of the tattoos based on the circumstances behind their creation, the court observed that the tattooists had admitted that each work “copied common tattoo motifs or were copied from designs and pictures [the artists] themselves did not create.”

The third factor (amount and substantiality of the work used) is also typically glossed over, and this case was no exception.  The court noted that even copying the entire work sometimes will fail to weigh against fair use where, as here, the use is deemed transformative.  Even so, the court reiterated that the tattoo renditions were reduced in size and barely recognizable on the game screen.

The fourth factor (effect of the allegedly infringing work on existing or potential markets for the work) tends, like the first factor, to receive more weigh in the analysis, and the court found this factor to definitively favor defendants.  The court held that the game’s depiction of the tattoos was not a competing substitute for the original.  In light of the “transformative” use of the works, the tattoos featured in the games would not serve as market substitutes for the use of the tattoos in any other medium, and plaintiff even conceded that NBA 2K was not a market substitute for the tattoos.  The court therefore decided that potential purchasers of the tattoo designs were unlikely to “opt to acquire the copy [in the game] in preference to the original.”  Even so, the court found that there was no evidence in the record that a market for licensing tattoos for use in video games or other media was likely to develop. 

While the Solid Oak case proceeds because defendants’ counterclaim for fraud on the Copyright Office remains in play, a solid precedent has been set in the new frontier of tattoo-based copyright law.  While it is not yet binding (and would only be regionally binding if affirmed on appeal), this decision will be extremely important to digital media companies nationwide given its solid legal analysis and common-sense reasoning.  The Solid Oak opinion should be at the top of this year’s cases-to-know list when it comes to content clearance, vetting, and risk assessment, and should ease the concerns of those scratching their heads when facing the potential licensing nightmare that could arise from attempting to clear all body art depicted in popular media.  It will also likely prove to be a boon to the stock image industry during an era when tattoos are increasingly common and may appear in more images of people than ever before.   On the other hand, artists, and tattoo artists especially, may decry the opinion, in particular the second-factor analysis, which may be interpreted as diminishing the copyrightability of tattoos that depict certain “typical” artistic elements like faces, flames, wizards, and sports equipment.  But it is important to note that the ruling on that factor was context-specific, and every work of art will be different and will be created under unique circumstances.  Overall, any feared risk to future creators is minimal and is significantly outweighed by the practical benefits afforded to established as well as new and developing forms of media.

Gray v. Perry: The Pendulum Swings on Copyright Infringement Verdict against Katy Perry

By Scott J. Sholder

Following hot on the heels of the Ninth Circuit’s en banc decision clearing Led Zeppelin of copyright infringement allegations relating to the classic “Stairway to Heaven” (which we reported here), a California federal judge last week overturned a jury’s finding of copyright infringement against Katy Perry regarding the pop hit “Dark Horse.”  Songwriters still nervous in a post-“Blurred Lines” world will likely take solace in two decisions that – while in many ways different from Pharrell Williams’ and Robin Thicke’s case – solidify certain aspects of copyright law that may help musicians rest and write a bit easier.

The genesis of the “Dark Horse” case is not unlike any other you-copied-my-song litigation.  Plaintiffs, successful songwriters and musicians in their own right, sued pop star Katy Perry, several other songwriters, and the record labels and publishers behind “Dark Horse,” claiming that an eight-note ostinato – a “short musical phrase or rhythmic pattern repeated in a musical composition” – in “Dark Horse” was substantially similar to one in plaintiffs’ song “Joyful Noise.”  The alleged similarity between musical phrases as opposed to full musical compositions makes the “Dark Horse” case more like “Stairway to Heaven” than “Blurred Lines,” which dealt with infringement of an entire song.  This distinction informed the court’s legal analysis as well, as discussed further below.

After a two-week trial in the summer of 2019, a jury found the defendants liable for copyright infringement and awarded plaintiffs $2.8 million in damages, and the defendants moved for judgment as a matter of law (or for a new trial).  Courts will grant motions for judgment as a matter of law when there are no genuine factual disputes and “a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.”  The court found these standards to be satisfied.

The court primarily addressed the evidence presented in support of the jury’s finding that the defendants’ ostinato was “substantially similar” to that of plaintiffs.  As we discussed in connection with the “Stairway to Heaven” case [here], courts in the Ninth Circuit apply a two-step test to determine whether two works are substantially similar.  Part one, the “extrinsic” test, sets forth a question of law for the court (often aided by experts) whether protected elements of the plaintiff’s work are objectively similar to corresponding elements of the defendants’ work.  Part two, the “intrinsic” test, asks the jury to decide whether an ordinary reasonable person would find that the “total concept and feel” of the works was substantially similar.  The court spent most of its analysis on part one.

As a threshold matter, the court explained that, where the work at issue consists of a combination of unprotected elements, an enforceable right in that combination only exists if the “elements are numerous enough and their selection and arrangement original enough that their combination constitutes an original work of authorship.”  This nuance is particularly relevant in music cases; citing “Stairway to Heaven,” the court explained that where “there is a narrow range of available creative choices” (such as notes in a scale or pleasing combinations of sounds) copyright protection is “thin” and to infringe, the allegedly infringing copy must be virtually identical.  The difference between this case and the “Blurred Lines” case, according to the court, is that the “thin copyright” doctrine typically will not apply to entire musical works (as opposed to constituent elements).  Citing its obligation to balance the First Amendment against the Copyright Act, the court also noted that the inherent nature of music as an art form was to borrow and build upon what had previously been created given that “many if not most of the elements that appear in popular music are not individually protectable.” 

With this backdrop, the court first analyzed the constituent elements of plaintiffs’ ostinato, including the key, phrase length, pitch sequence, rhythm “shape,” and musical texture.  Finding these elements to be individually common or even ubiquitous in pop music, the court held that “the uncontroverted evidence points to only one conclusion: that none of these individual elements are independently protectable.”  This conclusion was supported by testimony from the plaintiff’s own expert musicologist.

The same conclusion was apparent when analyzing the elements taken together as combined: their selection, arrangement, and coordination was not original enough to warrant protection as an original work of authorship.  The court held that the ostinato in “Joyful Noise” did not contain enough musical elements arranged in a “sufficiently original manner to warrant copyright protection.”  While it is possible that a musical phrase as short as eight notes could be protected, the court noted the dearth of on-point cases where “an otherwise unprotected musical phrase, isolated from the rest of the musical composition, in fact warranted copyright protection.”  The court explained that it was undisputed in light of the evidence at trial that “the signature elements of the 8-note ostinato in ‘Joyful Noise’” including its pitch sequence and rhythm, were “not a particularly unique or rare combination,” and that prior works composed by the parties and many others contained similar elements.  The ostinato’s musical timbre, its “pingy synthesizer sound,”’ and its use of minor key did not tip the scales.

The court accordingly held that the ostinato did not constitute protectable expression and therefore the extrinsic test (step one) failed, entitling the defendants to judgment as a matter of law notwithstanding the jury verdict to the contrary.  Although arguably not strictly necessary in light of this threshold ruling, the court went on to explain that, even if the plaintiffs’ ostinato was protectable, the defendants’ ostinato was not substantially similar.  Owing to the “thin” nature of the protection that would have been afforded to the plaintiff’s composition had it been deemed copyrightable, the degree of similarity would have had to have been “virtually identical” for a finding of infringement, and the evidence did not support such a conclusion given “a number of undisputed objective distinctions,” as corroborated by plaintiffs’ own musicologist.

Interestingly, despite the court’s conclusion that defendants were entitled to judgment as a matter of law on the extrinsic test (arguably obviating the need to address the intrinsic test), the court proceeded to opine on the jury’s finding of intrinsic similarity.  Because the intrinsic test is fact-sensitive and a question solely for the jury, the court held that, despite the court’s reversal on extrinsic liability, a reasonable jury could have found that the “total concept and feel” of the two ostinatos were “intrinsically” similar.  This of course did not change the outcome of the decision.

The court also found that there had been enough evidence to support the jury’s conclusion that the plaintiffs had accessed the defendants’ song.  Citing “Stairway to Heaven,” the court noted that reasonable minds could find that defendants “had a reasonable opportunity to [hear] plaintiff’s work” particularly in light of the current ubiquity of musical content and ready access to digital media online.  In such circumstances access could be established “by a trivial showing that the work is available on demand,” and “Joyful Noise” had garnered more than 6 million plays online, hundreds of concert performances, and a Grammy nomination.  But again, this did not change the result.

The “Dark Horse” case follows in the footsteps of “Stairway to Heaven” in establishing stricter boundaries around what musical elements are protectable but indirectly diminishing the importance of access in light of digital media and technological advancements.  As the decision is applicable to song elements like ostinatos, and arguably by analogy guitar riffs or solos, basslines, synthesizer accompaniments and the like – as opposed to entire compositions – it will likely cabin future claims concerning these discrete musical structures and reduce the likelihood that a songwriter or performer will be hit with a multi-million-dollar jury verdict for creating a single song element.  Decisions like “Dark Horse” and “Stairway to Heaven” will likely provide some comfort to musicians in being able to rely on those who came before them in writing their parts, but at the same time the decisions leave undisturbed the lessons from “Blurred Lines” when it comes to similarity of musical compositions in the aggregate whether one agrees with the outcome of that case or not.

Marc Hershberg was cited in the Fordham IPM&E Law Journal

“Anything You Can Use, I Can Use Better: Examining the Contours of Fair Use as an Affirmative Defense for Theatre Artists, Creators, and Producers,” by Benjamin Reiser, Fordham Intellectual Property Media & Entertainment Law Journal, Vol. XXX, No. 3 (2020).  Find the article here.

Ninth Circuit Rules in Favor of Led Zeppelin, Laying A New Foundation for Music Cases to Follow

By Phillip E. Jackman

When the full Ninth Circuit Court of Appeals on en banc rehearing issued its opinion in the appeal of the widely reported Led Zeppelin Stairway to Heaven case on March 9, 2020, the court took a substantial step in providing guidance for future copyright infringement claims based on allegations of “substantial similarity” between songs. 

The music industry feared a potential seismic shift in how music could be created without exposure to copyright liability after a panel of Ninth Circuit judges voted 2-1 to uphold a jury verdict in favor of the heirs of Marvin Gaye on their claim against Robin Thicke and Pharrell Williams in the Blurred Lines case. In her strong dissent, Circuit Judge Jacqueline Nguyen said the decision let the Gayes “accomplish what no one has before: copyright a musical style,” and warned that the decision expanded the potential for further copyright litigation.

Around the same that the Blurred Lines trial commenced, another seminal case was filed that addressed essentially the same issue – whether basic uncopyrightable elements of song writing, if selected and arranged in a certain manner, could then be deemed copyrightable.

In May 2014, Michael Skidmore, serving as the trustee for the estate of Randy California, late front man for the band Spirit, filed a lawsuit against Led Zeppelin, accusing the band of copying the famous intro to Stairway to Heaven from Spirit’s 1967 instrumental ballad called Taurus.  Skidmore claimed the portion of Taurus protected by copyright is the song’s 8-measure descending chromatic scale intro, which is similar to the descending chromatic chord progression in Stairway to Heaven.  In Los Angeles federal district court, a jury ultimately sided with Led Zeppelin because Skidmore did not satisfy the “substantial similarity” test, finding that although Zeppelin had access to “Taurus,” the elements of the song that were shared by Stairway to Heaven were not original enough to be protected under copyright law.

Skidmore appealed the verdict to the Ninth Circuit, arguing, among other things,that the district court erred in its decisions to apply the Copyright Act of 1909 to Taurus and not allow Skidmore to play for the jury the actual recorded version of Taurus to buttress his argument of substantial similarity between the songs.  The district court had only permitted Skidmore to put into evidence the “bare-bones” sheet music of Taurus deposited at the U.S. Copyright Office to demonstrate that the intro to Stairway was “substantially similar” to Taurus because at the time of its creation and under the 1909 law, sound recordings were not protected by copyright, only musical compositions.  In September 2018, a three-judge Ninth Circuit panel sided with Skidmore, in part, and overturned the jury verdict due to its finding that the jury instructions failed to inform the jurors that unprotectable elements of a song could be protected by copyright law when “selected” or “arranged” in creative ways.

However, before the case went back to district court, the Ninth Circuit agreed to vacate the panel ruling and rehear the case en banc, indicating that the case presented many open questions for the future of music law.  In its decision, the full Ninth Circuit analyzed the two factors required by Skidmore to prove copyright infringement: (1) he owned a valid copyright in Taurus; and (2) that Led Zeppelin copied protected aspects of the work.

In consideration of the first factor, the court first had to decide whether copyright protection of Taurus would fall under the Copyright Act of 1909, or the 1976 revision and limited protection afforded sound recordings created after February 15, 1972.  This issue proved to be pivotal in the case because it was only with the passage of the 1971 amendment, followed by the Copyright Act of 1976, that Congress opened the door for artists (or labels) to obtain copyright protection over master sound recordings of musical compositions.  Up until this time, artists like Spirit could only submit sheet music for copyright registration under the 1909 Act.  The Ninth Circuit upheld the district court’s holding by concluding “that the 1909 Act controls and the deposit copy [registered in 1967] defines the scope of the Taurus copyright.”  With this finding the Ninth Circuit closed the door on Skidmore’s argument that he should be able to play the recorded version of Taurus for the jury, since Skidmore did not own a valid copyright in the sound recording.

Armed only with copyright protection in a single page of sheet music, the Ninth Circuit then turned to the facts applicable to whether Skidmore had put forth sufficient evidence to satisfy the test that Stairway to Heaven was similar enough to Stairway to Heaven for unlawful copying to have occurred.  The Ninth Circuit uses a two-part test to determine whether works are substantially similar.  The first part compares the objective similarities of specific expressive elements in the works at issue, referred to as the “extrinsic test” and typically involves expert witnesses. The second part, known as the “intrinsic test,” looks at similarity of expression from the standpoint of the ordinary reasonable observer, with no expert assistance.

At trial, the jury had found in favor of Led Zeppelin on the question of whether “original elements of the musical composition Taurus are extrinsically similar to Stairway to Heaven,” and as a result did not move on the intrinsic test.  The Ninth Circuit upheld the district court’s approach stating that “because the extrinsic test was not satisfied, the jury did not [need to] reach the intrinsic test.”

The final key issue in this case is that the full Ninth Circuit abrogated the “inverse ratio rule,” which had permitted a lower standard of proof to satisfy the “substantial similarity” test if a plaintiff could demonstrate that the alleged infringer had a high degree of access to the protected work.  During trial, neither party disputed the fact that, during the late-1960s/early-1970s, Spirit and Led Zeppelin played at various venues together on at least three occasions, but there is no evidence the groups never toured together.  One of Skidmore’s key arguments was that the district court erred by not submitting the “inverse ratio rule” to the jury.  The Ninth Circuit stated that “the Second, Fifth, Seventh, and Eleventh Circuits have rejected the rule”.  And, in agreement with the district court, the Ninth Circuit further stated that “[b]ecause the inverse ratio rule, which is not part of the copyright statue, defies logic, and creates uncertainty for the courts and the parties, we take this opportunity to abrogate the rule in the Ninth Circuit and overrule our prior cases to the contrary.”

The court’s elimination of the reverse-ratio rule is a significant development and substantial clarification of the law in California that will likely be seen as a boon to creators of modern music.  Access to music is now more ubiquitous than ever, so it stands to reason that plaintiffs would inevitably be able to seize on the lesser standard of similarity in cases involving modern music. Of course, for those cases arising out of “classic” works like Stairway to Heaven, the abrogation of the reverse-ratio rule, may be seen as one less arrow in the copyright protection quiver.  How creators synthesize this ruling, whether in defense or pursuit of copyright claims, remains to be seen, but the impact will likely be a significant one.

The case is Michael Skidmore v. Led Zeppelin, et al, case number 16-56057, in the U.S. Court of Appeals for the Ninth Circuit.

Judge in Amateur Photojournalism Case Rejects Lack of Originality Argument

By Sara Gates

In a decision that will likely be seen as a victory for photojournalism, a judge in the Eastern District of New York recently rejected the legal argument that an iPhone photograph, taken by a passerby who was in the right place at the right time, lacked originality.  The decision represents a turn away from what the photography community would undoubtedly perceive as a slippery slope, i.e., if a court embraced a broad view that photographs captured by amateur photographers on their iPhones are not entitled to copyright protection.

The case pitted Alex Cruz, a passerby who captured a photograph of police apprehending a terrorist attack suspect in the Tribeca neighborhood of New York City in October 2017, against Cox Media Group, which holds a large portfolio of TV and radio stations, newspapers, and websites.  After the photograph was posted to Instagram, Cruz licensed the image to media companies including CNN and NBC (https://www.nbcnews.com/slideshow/terrorist-truck-attack-shocks-new-york-city-n816236).  Cox, without seeking permission, published the photograph in a gallery on one of its websites, accompanying an article about the suspect, as well as on its social media channel.  Facing a copyright infringement claim, Cox later argued that Cruz’s photograph lacked sufficient originality to entitle it to copyright protection and support a copyright infringement claim.

Specifically, Cox alleged that Cruz did not make any creative choices in capturing the photograph, arguing that the photograph therefore did not possess a “modicum of creativity,” citing the oft-used language from Feist Publications, Inc., v. Rural Telephone Service Co., 499 U.S. 340 (1991).  Judge Garaufis did not agree with this argument, finding that Cruz’s photograph reflected several creative choices, including timing (i.e., being in the right place at the right time) and his decision to take the photograph when he did (when law enforcement was apprehending the suspect, who was lying on the ground).

The judge applied the law of the Second Circuit, citing precedents such as Mannion v. Coors Brewing Co., 377 F. Supp. 2d 444 (S.D.N.Y. 2005), in which the Southern District of New York held that a photograph may be original in three respects: (1) rendition, (2) timing, and (3) creation of the subject, and Rogers v. Koons, 960 F.2d 301 (2d Cir. 1992), in which the Second Circuit recognized that “original” elements of a photograph may include “posing the subjects, lighting, angle, selection of film and camera, evoking the desired express, and almost any other variant involved.”

Though there may be instances in which a photograph is a slavish copy (such as in cases involving a photograph of a photograph), or a photograph serves a purely utilitarian purpose (such as showing what a standard Chinese menu item dish contains), where a photographer (whether amateur or professional) exercises any creative choices to capture the photograph, this decision supports the principle that photographers should be deprived of copyright protection.  Judge Garaufis recognized at least two creative choices relating to the timing of the photograph, but there were likely others, such as the angle and set-up of the shot.  With technological advances, the abilities of iPhone (or other mobile device) users to capture creative photographs with their devices, rather than a traditional camera, are greatly increased.  Aspects like depth of field, lighting, and frame can all be adjusted with a click of a button.  In this instance, notwithstanding whether Cruz used additional iPhone features to capture the photograph, the court found that he still exercised sufficient creative choices in deciding when, where, and from what angle to take the photograph to capture an inherently newsworthy event. Indeed, some of the most memorable moments of photojournalism are based on the photographer being at the right place at the time and knowing how to frame a compelling image (https://www.digitalphotomentor.com/20-most-famous-photographs/). 

Lack of originality is a difficult defense particularly in photo cases, as most photographs will be protected by copyright law, even if that protection is thin. Though judges should not place themselves in the situation of being arbiters of what is and is not art, oftentimes they are faced with the question of whether a work contains sufficient creative authorship to qualify for copyright protection, one of the prima facie elements of a copyright infringement claim.  This case represented a reasoned application of well-settled law despite an unconventional defense that may have prevailed under different circumstances and as applied to different forms of art.

This case is Alex Cruz v. Cox Media Group, LLC, Case No. 2:18-cv-01041-NGG-AKT (E.D.N.Y. March 13, 2020).

Nancy Wolff Fields Questions from the Digital Media Licensing Association (DMLA) on Copyright & Artificial Intelligence (AI)

Having recently attended a symposium co-sponsored by the United States Copyright Office and the World Intellectual Property Organization on Copyright & Artificial Intelligence, Nancy noted that as AI infiltrates modern life, the effects on the content licensing industry, creators and copyright will be enormous. Read all about it here.

CDAS Attorneys Author “Copyright 2020: Law & Practice” Chapter for Chambers & Partners

By Nancy Wolff, Scott Sholder, Sara Gates and Elizabeth Altman

Nancy Wolff, Scott Sholder, Sara Gates and Elizabeth Altman collaborated on this comprehensive discussion of current copyright law: what copyright is, how it works, what can/cannot be copyrighted, how it may be managed, what are the exceptions, and how to preserve copyright protection. Also addressed is copyright infringement, litigation and enforcement. Read the chapter here.

CDAS is a founding legal adviser to the Copyright Alliance and its attorneys hold leadership positions within the Media Law Resource Center (MLRC) and ABA IP Section. CDAS lawyers are officers and trustees of the Copyright Society of the USA, have been asked to speak on copyright-related issues throughout the world, and engage in advocacy work on behalf of associations in furtherance of copyright reform. CDAS lawyers have appeared in leading copyright cases, and also provide copyright clearance review for entertainment and media clients and trademark portfolio management.

The New Documentary Market: Four Tips to Prepare

By Simon Pulman

One thing is clear from Sundance 2020: the current market for documentary and quality unscripted projects is extremely strong. Among several eye-catching deals, the $10m paid by Apple to acquire the documentary “Boys State” matched the sum paid by Netflix to acquire “Knock Down the House” in 2019. Concurrently, premium cable outlets and SVOD platforms ranging from HBO, Netflix, Amazon and Hulu to new players HBO Max (scheduled to launch in May 2020), Peacock (July) and Quibi (April) are commissioning a diverse range of quality documentaries, either as one-off pictures or episodic documentary series such as “Cheer,” “McMillions,” “All or Nothing” and “Making a Murderer.”

In the context of this new exciting marketplace, some of the traditional rules have changed. What do producers need to know?

  1. Contemplate Flexible Formats: Given the rise of episodic content, and taking into consideration the massive amount of footage that documentary filmmakers often create, it is no surprise that there have been several examples of projects that were originally planned as one-off documentary films being reformatted into two-part documentaries or even multi-episode series. Moreover, several projects that were planned as feature documentaries have been reformatted into multiple episodes of ten minutes in order to premiere on Quibi, while other documentary projects have been developed in tandem with a tie-in series of podcasts (for instance, the “McMillions” podcast promises to allow listeners to ‘go deeper inside the story’).

    Accordingly, filmmakers should try to structure their deals and negotiate their paperwork in a manner that permits some flexibility with respect to the final form of the project. It is best not to be put in the position of having to determine whether a release that was signed with respect to a “documentary motion picture” would apply to an entire episodic series, especially if the subject at hand is very high level or somewhat tricky (such a subject who withdraws cooperation with the film during the course of production).

  2. Make Room for Buyers: Traditionally, documentary filmmakers have often adhered to the mantra that “credits are free” when according individual credits and company credits to financiers and collaborators (meaning, that filmmakers will often offer an enhanced credit in lieu of a financial entitlement). However, the new group of premium buyers strongly disfavor logos and company credits, in part because their business is predicated on keeping viewers engaged, and they don’t want people to be discouraged by long opening credits. Accordingly, it is not uncommon to see only one company logo at the top of the production – that of the platform. Filmmakers should bear this in mind, and may want to build in contractual language stipulating that all credits are “subject to network, distributor or other licensee approval” (which has been commonplace in television for some time). Likewise, most of the newer platforms do not approve of according any kind of paid advertising credit to third parties (unless it’s a very high level celebrity-like figure), so filmmakers need to be cautious when agreeing to any such obligations.

  3. Where’s My Backend?: Most documentary filmmakers (and many documentary financiers) would agree that nobody is in docs for the money. With that said, there have been multiple examples of extremely successful documentaries over the past twenty years that have generated profits for filmmakers and financiers. Under the new structure, whereby the conglomerates that own most of the platforms and outlets are seeking to acquire all rights and build their IP libraries, there is usually one “buyout” payment and no backend profit participation, while other forms of “upside” such as box office bonuses are also effectively rendered moot. Filmmakers need to bear this in mind, and may need to revise their financial structures to account for this (in consultation with experienced counsel, of course).

  4. Remakes, Remakes, Remakes: The dirty secret of documentary acquisitions is that, at least some of the time, buyers are acquiring the documentaries in order to secure the remake and other derivative rights. The right unscripted material can be fodder for a highly successful scripted series or series of scripted motion pictures – or can be used as the basis for an unscripted series spinoff format. Indeed, circumstances have sometimes arisen where potential buyers have withdrawn their interest in a documentary when it became apparent that remake rights were not available.

    Accordingly, filmmakers should pay attention to remake and derivative rights when putting together their projects. They may wish to seek to acquire life rights – or an option to acquire life rights – from subjects, although this is not always possible. They may want to consider how their collaborators and financiers participate in derivatives, if at all. And when it comes time to sell the project, filmmakers should be cognizant of the potential value of derivative rights to certain types of projects. Ultimately, for documentary filmmakers the documentary should come first – but selling remake rights can be a good way to help finance the next doc!

Lessons From Sundance 2020: Festival Trends and Predictions

By Novika Ishar

Amid concerns over a weak market and the impact of streamers on the independent film industry, the 2020 Sundance Film Festival closed with the exhibition of several highly anticipated films, some record-breaking sales and the upsurge of important new deal makers. See below for some key trends that emerged from this year’s festival.

Slower Initial Sales

As new buyers continue to flood the Sundance Film Festival each year, including big budget-backed streamers such as Disney Plus and Amazon Studios (which purchased the 2019 Sundance hit comedy “Late Night” starring Mindy Kaling and Emma Thompson for $13 million, to little box office success), the festival has witnessed an overall resurgence of record-setting sales. Nevertheless, opening weekend sales were largely sluggish. Unlike previous years, where multiple sales might be completed during opening weekend, the first sale this year took place four days into the festival and current sales can often take days or even weeks to resolve. Perhaps due to the lackluster commercial performance of films like “Late Night,” distributors are choosing to be more selective and are waiting to view a wider variety of projects before undertaking an expensive acquisition. Slower initial sales could also be attributed to the fact that more films are entering the festival with distributors already attached, like the documentary “Mucho Mucho Amor,” which was acquired by Netflix before the festival opened, or the popular entry “Promising Young Woman” (starring Carey Mulligan and produced by Margot Robbie), which was set up at Focus Features; consequently there are fewer projects in contention.

Genre-Based Films and Documentaries Still a Hit

Initial sales notwithstanding, this year was a big hit for documentaries. Beginning with Netflix’s pre-festival purchase of “Mucho Mucho Amor,” documentaries continued to drive sales at Sundance, perhaps even more so than in previous years. Some of the most buzzed-about films included the star-studded Taylor Swift and Hillary Clinton biopics. Most notably, Apple and A24 teamed up to acquire the Concordia Studio-produced “Boys State” for a staggering $12 million, a new sales record for documentaries at Sundance.

Another standout success was the Andy Samberg-led romantic comedy “Palm Springs,” which set a new festival sales record thanks to a $22 million deal with Neon and Hulu, dethroning the record previously held by “Birth of a Nation” by a substantial amount. The deal reportedly includes an acquisition fee of approximately $17.5 million along with a guaranteed bonus compensation, the details of which have not yet been disclosed.

There are a few possible explanations as to why these record-breaking sales were feasible in the current risk-averse climate:

  • First and foremost, it’s worth noting that each of “Boys State” and “Palm Springs” was jointly purchased by a traditional distributor and an OTT streaming service (with exclusive streaming rights) – a split that reduces individual financial exposure and aligns with the existing assets of each buyer. This dual arrangement presents a fruitful venture for both theatrical distributors and streamers that could in fact establish a new business model for future sales, as discussed below.
  • In an era of divisive discourse where Sundance submissions have increasingly veered into controversial topics, many of the best-selling films presented a hopeful or positive message. The non-partisan political coming-of-age story “Boys State” depicts the dramatic plot twists of contemporary politics and the importance of civic engagement. “Palm Springs” is a romantic comedy that has been widely compared to the cult classic “Groundhog Day,” a feel-good movie with wide-ranging appeal. Thus, the films offer content that is inherently less risky (indeed, some of the biggest and most successful sales in past years at Sundance were similarly genre-based, such as “The Big Sick”).

Where Does Sundance Go From Here?

What does all this mean for the future of Sundance? On the one hand, the festival’s trajectory seems somewhat uncertain. Unlike Cannes or the Toronto International Film Festival, which benefit from a larger international market, Sundance focuses primarily on small-budget independent films and documentaries, which historically have not performed well at the domestic box office. Moreover, as streamers such as Netflix continue to develop and produce original content, there is less demand for third-party content. In that respect, Sundance may begin to look more like a showcase of distribution-ready films rather than a traditional marketplace.

However, there could be a few potential developments that offer reason to be optimistic about the future of festival sales:

  • Streamers Dominate the Market: Digital streaming studios continue to aggressively search for binge-worthy content that will satisfy their numerous subscribers and hopefully attract new ones. As more buyers enter the independent film market every year (with Disney Plus and HBO Max considered major new players), the appetite for content could result in heightened competition in a market that is increasingly dominated by streamers. In turn, this influx could also spur more hybrid deals between streamers and traditional distributors.
  • More Hybrid Theater-to-Streaming Distribution: The rise of digital streamers may encourage a symbiotic theater-to-streaming sales model similar to that between Neon and Hulu or A24 and Apple, where traditional distributors control theatrical rights and streaming services piggyback with subsequent streaming rights. Netflix and Amazon seem inclined to focus on delivering hits quickly to their subscribers, rather than in engaging in lengthy and likely non-lucrative theater releases. For instance, Netflix’s “The Irishman” and Amazon’s “The Aeronauts,” two of the respective studios’ biggest recent releases, both had fairly limited theatrical runs prior to streaming. Since streaming services don’t necessarily measure success according to box office performance or other traditional metrics, they are less likely to be willing to invest in expensive theatrical runs and are instead focused on collecting a slate that will boost their subscriber numbers. In fact, according to Jennifer Salke and Matt Newman, heads at Amazon Studios, “Late Night” is one of the top five best performing films on Prime Video and is therefore viewed as a commercial success by the company, despite its box office revenues. Distributors that are exclusively theatrical, on the other hand, would benefit from a streamlined process where streaming rights are simultaneously negotiated and the financial risk is accordingly re-distributed, with streamers fronting a majority of the acquisition cost.  (As more details of this year’s biggest sales emerge, it will be interesting to see how distributors who have teamed up share profits, if any). As a result, the bifurcated sale of theater and streaming rights seems like a commercially viable approach for current buyers. Moreover, reduced costs could allow for distributors to partake in multiple sales or even larger individual sales. For all these reasons, the joint theater/streaming sales model may become a key source of growth in festival sales.
  • Potential Rise of Episodic Content: Sundance has remained a festival mainly for feature length content and has resisted embracing episodic programming compared to other markets. Nevertheless, with the continued popularity of episodic content and the potential growth of short-form content, this could rapidly change. Quibi, the short-form content mobile streaming platform, made a high-profile appearance at Sundance this year and may become yet another market disrupter following its launch in April.

Regardless of sales, Sundance continues to attract droves of industry veterans and movie enthusiasts alike. Furthermore, the festival’s reputation as a prestigious launching point for rising talent supports its ongoing relevance in the contemporary market. Nonetheless, given the unpredictable trends of the past few years and the ever-evolving digital media landscape, it will be worth keeping an eye on the direction of future Sundance sales, perhaps as an indicator of larger trends in the industry.

Legal and Ethical Considerations for Your True Crime Podcast

By Mikaela Gross

Imagine you’re sitting on the next big true crime hit. The nonfiction genre has ballooned in recent years across media, particularly in the podcasting space where production costs are relatively low and there are fewer gatekeepers to content distribution. Long gone are the days when the choice was among America’s Most Wanted, 20/20, Cold Case Files, and Unsolved Mysteries. The first seasons of the true crime podcast Criminal and the investigative journalism podcast Serial were released in 2014. Netflix’s first season of Making a Murderer came out in late 2015. The immediate popularity of these series was evident in their ratings, and they have been followed by rapid exponential growth in the true crime and investigative journalism entertainment space.

While true crime is often equal parts edge-of-your-seat entertainment and hard-hitting journalism, it’s important to remember that part of your job as a journalist is to stay within the bounds of the law and maintain a high level of ethical standards. Here are some tips for how to do so.

(1) Observe best journalistic practices in conducting research and investigations.

One of the easiest ways to stay on the right side of the law – most critically, to enjoy the full protection of your First Amendment right to speak freely – is to follow universal standards of ethics in journalism. If you don’t work for a large media organization that promulgates its own code of ethics, don’t worry. The Society of Professional Journalists publishes their Code of Ethics online, and several news organizations such as The New York Times also make their internal ethical guidelines available to the public.

In keeping with the high standards of journalistic ethics, here are some key suggestions (but by no means an exhaustive list) for investigating and reporting on your true crime story:

  • Be careful about making promises to, or developing personal relationships with, sources. Whether a source is asking to be off the record or for anonymity, or has an expectation or implies an expectation of a quid pro quo exchange such as a favorable portrayal, making promises to sources can quickly become tricky when later reporting your story. Personal relationships do develop over the course of cultivating a source, and whether by mere appearance or in fact, these dynamics can undermine your authority on a subject and imply a bias, depending on the circumstances. In every situation, maintaining professionalism will be key.
  • Don’t get involved in any formal investigation. Remember – you’re a journalist, not a member of the police force, the prosecution team, or any other public agency. Don’t offer rewards for information or make assurances to victims or families, or the public, that you will get to the bottom of it.
  • There is always more than one side to a story. If you expect to make accusations against any individual or company in the final story, ask them for comment. Protect your neutrality by always giving the “other side” the opportunity to counter any allegations or defend their actions.
  • Know your rights (and the legal limitations) when it comes to newsgathering. This includes access to private property, whether you can record conversations without every participant’s permission, when to disclose who you are and what you’re doing and engaging or citing anonymous sources (especially government employees), and more. These rules may vary by jurisdiction, and things can get even trickier when dealing with digital media or communications that cross state lines.

(2) Vet your material from development stage through production.

When talking about real people and actual events, especially when criminal activity is alleged, you should be wary of crossing the line in certain areas of law, such as defamation and the right to privacy, and in some instances copyright law and the right of publicity. Fact checking and legal vetting should be part of your process.

A defamation claim could arise if you make a false statement of fact about another person that injures their reputation, and you did so either negligently or with what’s known as “actual malice.” If the plaintiff is a private individual, you would only have to be negligent in making that statement, whereas if the plaintiff is a public figure you would be at fault if you made the false statement with “actual malice,” that is, knowingly or with reckless disregard for the truth.

A false light claim could also arise (depending on the jurisdiction) if you widely make a statement that portrays a person in a “false light” that would be highly offensive to a reasonable person. The statement need not necessarily be a false statement of fact, but rather, create an implication, or inference, that is not true. In some ways this type of claim is similar to defamation, and they sometimes overlap, but it technically falls within the realm of privacy law. Note that reputational damage does not generally have to be proved under a false light claim – the harm caused here is emotional distress.

You could also face a claim for the publication of private facts, which is another type of privacy violation, if you publicly disclose a private fact about an individual that is offensive to a reasonable person, and the fact is not one of legitimate public concern. Unlike defamation and false light, there’s no requirement that the disclosure of information be false either in fact or in implication; rather, this sort of claim tends to arise when private information is made public that embarrasses the individual who is the subject of the statement. 

In addition, a right of publicity or misappropriation claim may arise if you use a person’s name, or identifiable features such as their likeness or voice, for commercial or other exploitative purpose. In most states, the ability to use a person’s name or likeness in expressive works such as films, books, and podcasts are protected by the First Amendment, and liability will not arise if the person’s name or likeness is also used in advertising for that expressive work provided it is truthful and therefore “incidental” to the protected expression. That said, the scope of right of publicity and misappropriation laws vary from state to state; for example, some states grant postmortem rights of publicity while others do not.

Finally, a copyright infringement claim could arise in a true crime story if you’re using third-party copyrighted materials without permission. You may need to consult an attorney for a fair use review of your podcast, in particular if the subject of your true crime story is or was an artist such as an author or musician, and you want to use their work in your story.

It’s a good idea to consult a lawyer early in the process when dealing with the type of risky subject matter typical of true crime stories, so you can avoid potentially costly or time-consuming changes later on in production. For starters, remember:

  • Just because you’re covering a high-profile case receiving attention across the media, and another media company (or five or ten) said something, it doesn’t mean it’s true. You generally won’t be protected from liability for defamation merely because you’re re-releasing information or materials first published by another source.
  • So too can copyright infringement liability arise from republication. Another project’s use of third-party material does not necessarily mean you’re free to use it, too.
  • If you’re digging back into a cold case, tread carefully when raising new facts and allegations, even against people implicated but never charged or convicted when the trail was still hot.

Be especially careful with secondary and tertiary figures in the story – in many cases, these minor figures are the ones who complain if they are portrayed in a negative light.

(3) Be creative (but not irresponsible!) with your advertising and promotional strategies.

It’s common for ads promoting a podcast to include snippets of statements and materials from one or more episodes in the series. In the promotional context, however, editing for duration and the addition of music or other sounds and materials can change the meaning or implication of a statement. In this way, you should be careful when promoting high-risk material and you may want to consult a lawyer to separately vet all marketing and advertising.

Similarly, additional copyright issues could arise if you’re using third-party copyrighted materials in the podcast and you want to use some of those materials in advertising. Do not assume the use in an ad is likely to qualify as fair use just because the use in the episode itself may be. The same considerations in the context of the content of the podcast do not necessarily apply to advertising for the series.

Finally, be careful what you agree to when entering sponsorship or other advertising deals. If a sponsor is asking for the right to use material from your story – including the names of individuals or snippets from episodes – to cross-promote their status as an official sponsor, be careful not to grant rights to use a person’s name and likeness that you do not have. A right of publicity claim could arise if you do.  

So be creative with promoting your hard-hitting story, but not so much so that you’re violating the law.