Developing technologies are beginning to raise new legal issues for performance venues, as the rights of patrons and artists potentially collide. That was the warning delivered by Denis Clive Braham d
- New Technologies Raise Legal Questions At Venues
- Apple, RealNetworks At Odds Over Harmony
- Judge Orders Kazaa Parent To Reveal Owner
- RIAA Wins Case Over John Doe Suits
- Netflix Hit With Suit Over Share Price
- Judge Puts Halt On DVD Descrambling Chips
- Singer Laws Sues Elektra/Asylum
- French Music Biz, ISPs Sign Online-Distribution Charter
- EU To Select New Competition Czar
- Collecting Society PPL Brings Case Against U.K. Gov't
- Standoff Continues In German Mechanicals Dispute
- Producers Claim Share Of Delta Goodrem's Profits
- Australian Pirate DJs Sentenced To Fine
- Primal Scream's Gillespie Wins Libel Case
- Anticipate New Technologies When Drafting Copyright Licenses
- This Week's Dream Makers & Deal Breakers
New Technologies Raise Legal Questions At Venues
By Melinda Newman
RENO, NEV. -- Developing technologies are beginning to raise new legal issues for performance venues, as the rights of patrons and artists potentially collide.
That was the warning delivered by Denis Clive Braham during his presentation "the Modern Day Challenges to Facility Operation" during the International Assn. of Assembly Managers conference, held here July 24-26.
Braham is chair of the sports-business and public-venues practice for Houston-based Winstead Sechrest & Minick.
A primary area of concern for venues and performers is cellular phones with cameras. "They are in their very early stages of technology," said Braham. "People may not be able to physically take a great picture, but what about a few years from now?"
He said it is not uncommon for concertgoers to bring camera phones into a show, snap photos and e-mail them to friends.
Such action can directly violate an artist's legal right to control his or her own image.
"An artist's likeness belongs to them; artists have those rights as a matter of law," said Braham.
He advised facility managers to closely examine the contracts between the venue, promoter and artist to see which rights are covered.
Given the artist's right to his likeness, the venue has the right to toss patrons who illegally snap photos. However, the facility manager's rights are somewhat defined by where the venue falls under the Public Forum Doctrine, which measures a customer's First Amendment rights against those of the facility. For example, a public forum, such as a public park or government building, has fewer rights in limiting a patron's activities than does a privatized arena.
"Usually, if someone buys a ticket, that means you're a non-public forum," Braham said. "But if it is a venue operated by a municipality, you're in a different environment, even if you're selling tickets, than a privatized facility."
Generally, "a ticket is a revocable license to a certain extent," Braham said. "You can't arbitrarily toss someone out, you can't discriminate, but you can set guidelines that every patron is party to. Even though the individual has civil liberties, it doesn't mean there aren't certain rules."
Braham stressed that while there is not yet a legal precedent to bar camera phones from venues, he believes that private venues can ban them based on current rules that allow them to prohibit other devices -- such as tape recorders or cameras -- that could infringe upon an artist's rights.
"I think you can remove that person (using a camera phone), and you don't have to refund their ticket," Braham said, but added that there are several ways that venues can protect themselves against potential suits filed by disgruntled patrons.
Braham suggested that venues update the information on the backs of tickets to include prohibition of camera phones. He also suggested that the information be posted on the Web sites of the facility and the ticket provider, as well as on signage at the venue.
"Let your patrons know what the rules are before they buy the ticket," Braham said.
He said that if a venue has followed the above suggestions, an artist or promoter "would be hard-pressed to hold the facility operator liable" for concert photos showing up on the Internet, because the building has not shown negligence or willfulness.
Braham said that in addition to camera phones, such rules "apply to any kind of technology that captures the image, likeness or voice that's considered the property of the artist."
However, he said that changes could be in the wind. "Ultimately, the Supreme Court takes notice of changes in society. There is the possibility that in 10 or 15 years, the courts think music is not privately owned."
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Apple, RealNetworks At Odds Over Harmony
By Brian Garrity and Scott Banerjee
Apple Computer has come out swinging against RealNetworks' new Harmony technology, which makes tracks from the RealPlayer Music Store compatible with Apple's iPod players for the first time.
In a statement July 29, Apple said, "We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod, and we are investigating the implications of their actions under the (Digital Millennium Copyright Act) and other laws. We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real's Harmony technology will cease to work with current and future iPods."
Before the development of Harmony, music from the Real download store was not compatible with iPod due to the companies' competing digital rights management standards.
Real sells tracks in an AAC-based version of its RealAudio format; it secures the files with its own proprietary Helix DRM solution. Apple has yet to license its FairPlay DRM technology to any competitors -- a fact that has kept secure tracks from music services other than iTunes off the iPod. In April, Apple rebuffed overtures from Real to make the iPod compatible with the RealPlayer Music Store.
With the introduction of Harmony, Real claims that its files now work with devices from Apple, Creative, iRiver, RCA, Rio, Samsung and PalmOne, among others.
RealNetworks defends Harmony against Apple's claims, saying in a statement that the technology "follows in a well-established tradition of fully legal, independently developed paths to achieve compatibility."
The company says it "is delighted by initial consumer and music-industry support for Harmony. Compatibility, choice and quality are critically important to consumers, and Harmony provides all of these to users of the iPod and over 70 other music devices, including those from Creative, Rio, iRiver and others. RealPlayer Music Store provides the highest sound quality of any download music service. That's why so many consumers have welcomed news of Harmony. Consumers, and not Apple, should be the ones choosing what music goes on their iPod."
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Judge Orders Kazaa Parent To Reveal Owner
By Christie Eliezer
SYDNEY -- An Australian Federal Court judge has ordered Sharman Networks to reveal the names of the anonymous figures controlling the company.
Sharman, the parent company of the peer-to-peer network Kazaa, is facing copyright-infringement charges brought by five Australian record companies.
The labels' attorney, John Nicholas, explained to the Sydney court on July 27 that previous respondents to the case have been Sharman License Holdings and Sharman Networks. However, correspondence early this month during the process of discovery revealed another company, Worldwide Nominees, which has been named as the sole director of Sharman Networks.
Worldwide Nominees is registered in Port Vila, capital of the Pacific island of Vanuatu. Its directors are Port Vila solicitor Geoffrey R. Gee and a company called Regent Ltd. The names of its shareholders are not available. By Vanuatu law, it is a criminal offense to make inquiries to the ownership of any company based there.
The labels asked that Sharman provide details of the "ownership and control structure of the corporate respondents, the financial and managerial aspects of the various relationships and the historical background to these arrangements."
Justice Wilcox commented that Sydney-based Nikki Hemming, who has been public in her role as CEO of Sharman, "seems to be a key player" in the activities.
The court also rejected Sharman's claim that any MP3 files seized during discovery are irrelevant to the case because they cannot be defined as sound recordings.
A hearing is scheduled for Nov. 29.
Sharman and the labels have been told not to discuss the case in public.
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RIAA Wins Case Over John Doe Suits
By Bill Holland
A judge for the U.S. District Court for the Southern District of New York has sided with the RIAA in a case brought by Cablevision that challenged the music-industry trade group's "John Doe" lawsuits.
Judge Denny Chin on July 26 denied a motion to quash a subpoena in Sony Music Entertainment Inc. et al v. Does 1-40 (case no. 04cv00473).
He ruled that Cablevision -- which provides broadband access in New York, Connecticut and New Jersey -- must continue to supply the RIAA with the identities of subscribers sued by the trade group for alleged peer-to-peer copyright infringement.
The RIAA subpoenaed Cablevision for the names in February; the ISP complied but brought the legal challenge.
Chin considered the First Amendment privacy defense -- the first time a judge has done so in examining these John Doe suits -- but found that the RIAA's claim of copyright infringement was enough to override First Amendment privacy protections.
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Netflix Hit With Suit Over Share Price
By Chris Morris
LOS ANGELES -- Investor Eugene Rausch has filed a federal class action against Internet DVD rental firm Netflix Inc. and its top executives, claiming the company pumped up its stock price by hiding from shareholders the fact that its subscriber base was shrinking.
Rausch's suit was filed July 27 in U.S. District Court for the Northern District of California, on behalf of all those who purchased Netflix securities between Oct. 1, 2003, and July 15, 2004. Netflix is publicly traded on the NASDAQ exchange.
Netflix chairman/president/CEO Reed Hastings and CFO/secretary W. Barry McCarthy Jr. are named as defendants.
The action claims that while Los Gatos, Calif.-based Netflix claimed robust growth and subscriber figures in quarterly shareholder reports from October 2003 to April 2004, Hastings and McCarthy "knew or recklessly disregarded the fact that adverse facts ... had not been disclosed to, and were being concealed from, the investing public."
The suit notes that after a substantial decline in subscriptions and an anticipated increase in subscription rates were revealed in a second-quarter report released July 15, Netflix shares plunged $8.98, or 28%.
The action claims that previous quarterly reports contained "false and misleading statements," which led to Netflix's stock "(trading) at artificially inflated prices."
A Netflix spokesperson says the company does not comment on pending litigation.
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Judge Puts Halt On DVD Descrambling Chips
By Jill Kipnis
LOS ANGELES -- A Superior Court judge here has ordered Fremont, Calif.-based ESS Technology Inc. to stop selling descrambling chips that allow for the illegal copying of DVDs.
The preliminary injunction -- handed down July 26 by Judge Maureen Duffy-Lewis -- stems from a lawsuit that the seven major motion-picture studios filed against ESS in April. The studios claimed that chips from ESS, when sold to unauthorized manufacturers whose products allow for DVD copying, violate the studios' license for the Content Scramble System (CSS) technology that protects DVDs.
The Motion Picture Assn. of America (MPAA) supports the ruling.
"By selling chips to unlicensed manufacturers, ESS was effectively enabling wholesale piracy, facilitating unauthorized copies of DVDs that make their way onto the Internet and into the hands of pirates around the world," says Dan Robbins, the MPAA's chief technology counsel, in a statement.
An ESS representative declined to comment on the ruling.
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Singer Laws Sues Elektra/Asylum
By Chris Morris
LOS ANGELES -- R&B vocalist Debra Laws and Spirit Productions have sued Elektra/Asylum Records, alleging that the label has repeatedly breached Laws' 1979 production agreement.
The suit was filed July 22 in California Superior Court in Los Angeles (case no. BC318848).
Laws -- sister of flautist Hubert Laws and saxophonist Ronnie Laws -- claims that Jennifer Lopez's song and video "All I Have," from her 2002 album "This is Me ... Then," utilized samples and loops from Laws' 1981 debut, "Very Special," without permission.
The action also claims that Elektra failed to provide royalty statements or payments to Laws, and failed to inform her that "Very Special" would be remastered.
Laws and Spirit Productions seek unspecified damages.
A spokesperson for Elektra parent Warner Music Group says the company does not comment on pending litigation.
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French Music Biz, ISPs Sign Online-Distribution Charter
By Emmanuel Legrand
LONDON -- Other creative sectors are expected to follow the music industry in signing a charter with Internet service providers to regulate online distribution.
French music-industry organizations and representatives from the online sector on July 28 signed a document that sets a framework for the legal distribution of music in France.
The charter's key purpose is to "fight against the illegal exchanges of recordings and protected works" and "promote the development of legitimate online services."
The charter was recommended by French minister of economy, finance and industry Nicolas Sarkozy and his colleagues from culture and communication, Renaud Donnedieu de Vabres and Patrick Devedjian.
The government took the initiative for the charter in order to combine the development of broadband Internet with respect for intellectual-property rights.
Donnedieu de Vabres says the move "is a starting point, that of a new partnership between authors, producers, online distributors and Internet access providers."
The French film industry says the music charter is an incentive for it to accelerate discussions with ISPs, with the aim of reaching a similar agreement by the end of the year.
Under the music charter, labels agree to increase the amount of legal repertoire available for online distribution from 300,000 to 600,000 titles by the end of the year. Also, both music and online companies agree to promote legal services to consumers, and ISPs vow to respect IP rights.
Label's bodies SNEP and UPFI; collecting societies Sacem, SCPP and SPPF; publishers' association CSDEM; and retail trade group SDSD are among the music industry organizations that signed the charter.
The ISPs were represented by their trade body, AFA; other mobile operators who signed on include Wanadoo, SFR-Cegetel, Noos and Free.
The music industry had asked for ISPs to implement filtering measures that would allow parents to prevent their children to access specific sites. However, Donnedieu de Vabres said the issue was technically complex and decided to appoint two experts to evaluate the viability of such a system.
He said the government will be constantly monitoring the state of the partnership between the creative industries and ISPs.
For ISPs, the key mandates of the charter include informing their users of the illegal nature of sharing unauthorized works; halting the promotion of services that encourage or present in an attractive way the exchange of unauthorized files; implementing legislation regarding use of illegal files on their networks; and offering legitimate online music services through their portals.
For rights owners, the charter mandates initiating civil and criminal action against online pirates by the end of 2004; rapidly increasing the number of legal files on offer and making them available to all legitimate platforms without discrimination; and offering online platforms non-discriminatory and transparent licensing through rights society Sacem.
For both parties, the charter calls for an assurance that the number of music files available to consumers constantly grows, with a target of 600,000 files by year's end; clear and competitive pricing of such files; and online and offline promotion of legitimate services.
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EU To Select New Competition Czar
By Emmanuel Legrand
LONDON -- Discussions are under way to nominate the next European Commissioner in charge of competition issues, replacing Mario Monti, who has been recalled from the post.
The 25 members of the EC will be fully renewed in November. Incoming president Jos Barroso has started consultations regarding the positions.
Names circulating for the job are France's current commissioner for regional policy, Jacques Barrot; Germany's Guenter Verheugen; and current enlargement commissioner and former British secretary of state for trade and industry Peter Mandelson.
The EC is the European Union's executive arm. Each of the 25 member states nominates a commissioner, and the EC president allocates the various responsibilities.
Monti, who will not be part of the new team, has already served two five-year terms at the EC, first as financial-services commissioner in 1995. This time around, Italian Prime Minister Silvio Berlusconi has chosen another contender for commissioner, current European affairs minister Rocco Buttiglione.
One of Monti's last high-profile actions was to recommend approval of the Sony BMG merger, which was cleared in July despite strong initial reservations from his department. Monti was also in charge when the Warner EMI merger failed to earn EC approval in 2001.
Monti says in a statement that he would have enjoyed a third term to finish what he believes was his main task -- making the European market more competitive, with less barriers.
"I would have been pleased to carry on with determination my commitment for a more open and competitive European economy, intervening against distortions, restrictions and abuses, including those put in place by the most powerful member states," says Monti said in the statement. "The Italian government has decided differently."
Two of his most controversial decisions regarded the General Electric Co./Honeywell International Inc. merger, which was approved by Monti, and the Microsoft Corp. case, which resulted in the biggest fine ever imposed on a single company by the EC. Both cases face legal challenges.
Overall, former economics professor Monti is credited for having shaped the EC's doctrine on competition, pushing for a true free-market Europe and limiting the level of government subsidies.
His position sometimes forced him to fight against member states such as France or Germany that had opposing views and found his vision for Europe too liberal.
Record-company executives who had to deal with Monti's department speak of a "highly professional" operation, even if they found the EC's complicated procedures to be difficult to understand.
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Collecting Society PPL Brings Case Against U.K. Gov't
By Lars Brandle and Roger Pearson
LONDON -- Collecting society PPL has taken legal action against the British government for failing to implement a European directive that would extend the circumstances under which royalties should be paid for public airings of sound recordings.
During a July 7-8 preliminary hearing in London's High Court, PPL claimed that the government did not implement into national legislation European provisions that override licensing exemptions contained in the British 1988 Copyright Designs and Patents Act.
If implemented, the European directive would have caused certain parties to lose their exemption from paying public-performance royalties to record labels.
The dispute is centered on Council Directive 92/100/EEC 19 November 1992, commonly called "the Rental Directive."
During the preliminary hearing, the government tried to have the case dismissed, arguing, among other claims, that the PPL had waited too long to sue. The European directive in question had a deadline of July 1, 1994, for implementation.
The government's argument was rejected by the High Court, and the judge has allowed PPL to continue with the case.
If successful, the suit could result in a damages award to PPL, which has 3,000 record-company members, of millions of pounds.
However, the defense told the judge that the claim could have broad repercussions. "This has implications potentially across government," said counsel for the Department of Trade and Industry and the attorney general.
"It's all very much at early stages," comments Peter Leathem, director of legal and business affairs at PPL. "We will continue our dialog with the government outside the proceedings themselves to see if we can resolve matters," he says.
A PPL source adds, "This was just a first round. We'll wait for the next hearing, and we certainly don't want to embarrass the government."
No date for the full hearing has been set, but observers say it is unlikely to take place this year.
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Standoff Continues In German Mechanicals Dispute
By Wolfgang Spahr and Emmanuel Legrand
MUNICH -- Despite a seven-hour hearing July 28, the arbitration committee of the German Patents and Brands office failed to reach a ruling on a dispute over the country's mechanical royalty rate between the German affiliate of music trade body the IFPI and local authors' rights society GEMA.
Observers say they were surprised at the extent to which the arbitration committee discussed details of the dispute.
The committee adjourned the session and plans to hear the case again at the end of the year, according to an insider.
The IFPI in January announced its decision to slash the mechanical royalty rate on sound recordings to 5.6% from 9.009% of the PPD (published price to dealers). Under German procedures, the new rate had to be confirmed by the arbitration committee at the German Patent and Brand Office.
GEMA decried what it saw as a one-sided attempt by the labels to cut mechanical royalties.
Until a final agreement is reached, the difference between the previous rate of 9.009% and the labels' proposed rate of 5.6% will be held in an account by the record companies.
IFPI Germany says it took the unprecedented step because of the dramatic declines in the German music market and the need for labels to cut costs.
The conflict is taking place amid an active European context for such issues.
London-based IFPI, which represents the major labels, and Paris-based BIEM, which represents European rights societies on mechanical rights issues, have failed for the past two years to agree on a new "Standard Contract" mechanical rate applicable in Europe.
The European Commission announced in April that the role of national royalty-collection societies was under scrutiny. The EC has warned 16 authors' rights societies that the way they cross-license repertoire is "potentially in breach of European Union competition rules."
Meanwhile, Universal Music International in 2002 lodged an antitrust complaint with the European Commission against BIEM, followed in March 2003 with another submission before the EC. UMI considers the Standard Contract unfair and accused collecting societies of acting as a cartel.
Recently, the notion of a single rate of 8% for mechanical rights for CD, DVD and online music was circulated between the IFPI and European collecting societies. Known as the "triple-eight agreement," the proposal was apparently rejected in May by a majority of collecting societies, including GEMA.
"Triple-eight could provide a way through the impasse," says a label source familiar with the situation.
Another scenario envisioned by observers is one in which certain collecting societies break rank and independently agree to specific deals with the labels. It is understood that one of the five major record companies has already put into place with one of the main European societies a mechanical deal for online distribution.
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Producers Claim Share Of Delta Goodrem's Profits
By Christie Eliezer
MELBOURNE -- Paul Higgins and Trevor Carter, owners of Melbourne-based recording studio Studio 52 and label Empire Records, have filed a statement of claim in the country's Supreme Court against the parents of hit singer/songwriter Delta Goodrem.
Higgins and Carter are demanding a 10% share of profits from Goodrem's hit album "Innocent Eyes" (Sony) and from her next album as well.
In the 30-page claim, filed July 23, the pair say Goodrem's parents, Denis and Lea Goodrem, breached an agreement they signed in 1999. The singer was 14 years old at the time.
Under the deal, Higgins and Carter were to "produce, develop and manufacture a world-class commercially aimed album." Higgins and Carter also claim that they had an option to produce a second album. If the Goodrems chose not to utilize them for the second album, they say, the deal gave them a 10% cut of that set's profits, as well as 10% of the following album.
Higgins and Carter say they produced an album for Goodrem that was never released.
Goodrem then signed with Sony Music Entertainment Australia in 2001 and recorded a new album, "Innocent Eyes," which went on to become one of Australia's all-time best sellers, shifting more than 1 million units and spawning five No. 1 singles.
Lea Goodrem, who co-manages her daughter, could not be reached for comment. Higgins declined to comment.
Goodrem is currently preparing for the U.S. release of "Innocent Eyes" on Sony's Epic label. Her plan to enter the U.S. market last year was delayed when she contracted Hodgkin's disease. She is also working on a new album, according to reports.
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Australian Pirate DJs Sentenced To Fine
By Christie Eliezer
SYDNEY -- A federal court judge in Sydney on July 29 ordered five club DJs to pay $140,000 Australian ($98,000) each after they pleaded guilty to copyright infringement.
The five were found to have produced and distributed illegal mixes of tracks by top acts such as Ja Rule, Jennifer Lopez and Missy Elliot. The remixed tracks appeared on a compilation series called "Black Label," of which 1,200 units were thought to have been distributed.
Also fined was Sydney retailer Anthem and its director Joe Sitoa, who promoted the CDs online.
Universal Music Australia, Sony Music Entertainment Australia and Warner Music Australia initiated the case in 2002.
Last year, three retailers working in a Sydney flea market appeared before the court and paid compensation after admitting to selling the pirate CDs. The compensation figures were not made public.
Michael Speck, GM of Music Industry Piracy Investigation, describes the case as "one of the most flagrant infringements of copyright by DJs Australia has seen."
Speck says piracy is endemic in the DJ market, with unauthorized mixes being openly advertised and sold in stores throughout major cities.
He adds, "Pirate copyrighters know they know that they are breaking the law. When they are caught they claim that infringing copyright is actually good for the industry. This ruling confirms that this proposition is nonsense."
Some of the DJs, who had not bothered to show up to previous hearings, face legal costs of up to $240,000.
The defendants in the case were Jun Miyamoto (DJ Moto), David Pacjeco (Chocolate Boy Wonder), Peter Papalii (DJ Peter Gunz), Tahi Croft (DJ Demo) and Nick Gracia (D-Day Tikelz).
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Primal Scream's Gillespie Wins Libel Case
By Roger Pearson
LONDON -- Primal Scream frontman Bobby Gillespie and his girlfriend, Katie England, have won a libel case against the News of the World.
The Scottish rocker and England on July 29 accepted a public apology in London's High Court and undisclosed libel damages.
On Jan. 25, the Sunday newspaper -- part of the News Corp. stable of publications -- ran a story linking Gillespie romantically with supermodel Kate Moss.
Gillespie and England are longtime friends of Moss and are god-parents to her daughter. Their counsel, Gerrard Tyrrel, told Justice Eady that the article titled "It Moss be Love" erroneously indicated that Gillespie had split with England and was being comforted by Moss, and that he was "smitten" by the model.
A photograph used with the article gave the impression that the photographer had caught Gillespie and Moss alone and holding hands.
"In fact the photograph was of Bobby Gillespie and Katie England holding hands, with Kate Moss in the foreground," Tyrrel said.
Daniel Taylor, counsel for the News of the World, said the paper acknowledged that the allegations against the couple were wrong and apologized for the distress and injury caused by the article.
The News of the World has also agreed to pay them damages and their legal costs.
Primal Scream started their recording career in 1987. They were initially signed to Creation Records and are now with Sony Music.
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Anticipate New Technologies When Drafting Copyright Licenses
By Karen Artz Ash and Bret J. Danow
If you long to see your favorite old television shows or movies again, chances are they are readily available on DVD at your local video store.
DVD sales are skyrocketing, based in large part upon the release of boxed sets of entire seasons of TV shows, or old movies supplemented with a range of extras. With so much money to be made from DVD sales, entertainment companies need to make sure they have secured all the necessary copyrights to release these works in the DVD format.
Difficulty often arises, however, because the ability to create and disseminate a TV show in the DVD format can hinge upon the copyrights secured in the original agreements when the series or work was first produced.
The language used in these agreements continues to govern use of the copyrighted material, even when changing technology makes new uses of the work possible. As technology evolves, the scope of the rights granted, transferred and retained may become unclear, especially when the new medium was not anticipated at the time the agreement was drafted.
With technology and media changing at a rapid pace, entertainment companies and their attorneys should state and understand with certainty which rights, if any, are to be retained by the granting party, and which are transferred by agreement. Drafting attorneys face the perpetual challenge of drafting agreements to protect the client's rights in light of unforeseen future developments in technology. Construing existing agreements can be an even more difficult task.
These issues have become even more complicated as recent copyright-infringement cases over so-called "new uses" have influenced the way in which existing agreements are construed. Recent "new use" cases such as New York Times v. Tasini and Random House Inc. v. Rosetta Books LLC signal a shift on the part of courts toward favoring the rights of the original copyright holder or licensor.
In Tasini, plaintiff freelance authors wrote articles for The New York Times and claimed that the copyrights were infringed when the newspaper later licensed rights to copy and sell the articles to LEXIS/NEXIS. The court held that neither the agreements with the authors nor prevailing copyright law granted The New York Times the right to reproduce the articles in electronic databases.
In Rosetta Books, defendant Random House had been granted the right to print, publish and sell certain authors' works in book form but subsequently sold those same works in digital format over the Internet as a collection of "e-books." The court relied on the language of the agreements and basic principles of contract interpretation in finding that the contracts did not include the right to publish the works as e-books.
These cases provide valuable lessons for attorneys when drafting copyright agreements. There are three key points to keep in mind:
1. Clarify the rights granted and retained.
To minimize ambiguity, the party acquiring the rights should make every effort to define the rights granted in an agreement as broadly as possible, by using catch-all descriptions to encompass all media, in all forms now and in the future, so that there are no ambiguities as to which party owns the rights to each type of exploitation.
Obviously, if the relative bargaining position of the parties allows the copyright holder to retain certain rights, they would also want to make sure that their retained rights are defined as broadly as possible.
2. Try to anticipate the unknown.
Agreements written for TV shows or movies produced years ago never contemplated the DVD format, and certainly there will be new technologies in the coming years that cannot be imagined now. With this in mind, the drafting attorney should make certain that the language anticipates any and all potential changes in media and technology. This is especially important when the parties do not agree on terms that would, in effect, be the equivalent of a transfer of all rights in all media.
As technology changes, producers often want the right to rerelease works in different media. Unless the agreement expressly grants the right to use or disseminate the work in that specific medium, such a new or different use may have been retained by the author or creator of the work. If the agreement leaves room for interpretation as to whether this new medium is included in the grant, courts will likely strictly construe the language, thus reserving the rights to any new medium for the party that created the work.
3. Obtain written consents.
Grantees of copyrighted work looking to take advantage of new uses for that material should review existing agreements carefully. If there is doubt as to whether the intended new use is included, it would be wise to obtain a consent or a waiver from the author or original grantor of the work granting permission to exploit the work in the new medium. The consent or waiver should be as broad as possible so that a new waiver is not needed for every medium later invented.
Obtaining the necessary consent or waiver can help avoid lengthy and expensive litigation over the use of the work, and even though there will be costs involved, the certainty and goodwill may well be worthwhile.
By clarifying the rights granted, anticipating the unknown and obtaining consents, entertainment companies can protect valuable rights to their programs and exploit evolving technology effectively, even when there is no way to know exactly what the future holds.
Karen Artz Ash is a partner and national co-chairperson of the intellectual-property department at Katten Muchin Zavis Rosenman in New York.
Bret J. Danow is an associate in the firm's IP department.
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This Week's Dream Makers & Deal Breakers:
Island Def Jam Music Group has named Steve Gawley as senior VP of business and legal affairs.
Gawley will serve as the company's chief legal officer, focusing on the closing of all deals involving new and existing artists, production agreements, clearance issues and other matters.
Based in New York, he reports to IDJMG chairman Antonio "L.A." Reid.
Gawley joins the company from Arista Records, where he had served as senior VP of legal and business affairs since 2000. Prior to that, he spent five years in key posts for BMG.
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