Entertainment Law Weekly brings you news on the entertainment law industry.


Breaking News

Janet Jackson May Face Class Action Over Breast Flap

By Chris Morris

Janet JacksonLOS ANGELES-- The flap over Janet Jackson's nationally televised breast-baring appearance during halftime at the Super Bowl Feb. 1 has swiftly moved into the courtroom.

On Feb. 4, a Knoxville, Tenn., woman filed a federal class action suit against Jackson, Justin Timberlake (who ripped open Jackson's costume during the halftime performance), CBS (which aired the telecast), MTV (which produced the halftime show) and the networks' corporate parent Viacom.

The action was filed in U.S. District Court in the Eastern District of Tennessee by Terri Carlin on behalf of "all American citizens who watched the outrageous conduct which occurred during the Super Bowl halftime show."

PUBLICITY STUNT

Carlin alleges that the defendants "included in the half-time show sexually explicit acts designed solely to garner publicity and, ultimately, to increase profits for themselves."

The suit further claims they "collaborated to commit and/or broadcast outrageous and lewd acts at a time when [they] knew that millions of American families would be watching."

Jackson's partial disrobing is characterized in the suit as "extreme and outrageous conduct which went beyond the bounds of decency."

The suit claims that the defendant performers and networks failed to act responsibly in airing the event.

"[...P]arents in today's cultural environment are repeatedly told that it is their responsibility to monitor and guide their children," the suit states. "Families are told that they themselves are the keys to safeguarding exposures to material that is sexually suggestive and that cheapens and degrades the human spirit.

"Families have an expectation that they can trust companies and individuals such as the defendants not to expose families to sexually explicit conduct during broadcasts of prime time events such as the Super Bowl. Nevertheless, the defendants consciously or recklessly and without warning permitted these acts to be aired."

It is not known if plaintiff Carlin is a parent. Her attorney, Wayne A. Ritchie II of Knoxville, did not return a call from Entertainment Law Weekly.

The action also alleges that the defendants' conduct violated FCC regulations. It implies that since the incident was telecast internationally, members of the plaintiff class were defamed and "suffered injuries and damages to their reputations as Americans," and also claims the defendants breached real and implied contracts.

SEEKING A MONEY FLOOD

The suit seeks compensatory damages "not to exceed the gross receipts generated by each defendant during the Super Bowl and Super Bowl halftime show" and punitive damages "not to exceed the total of the gross annual revenues of each defendant for the last three years prior to the filing of [the] action."

Spokespersons for Viacom and CBS had no comment.

An MTV spokeswoman did not return a call seeking comment, and representatives of Jackson and Timberlake could not be reached.

Washington Report

Lawmakers Set To Mull Indecency Issues

By Bill Holland

WASHINGTON, D.C.--The common wisdom in this city is that only bipartisan, broadly supported legislation has a chance of passage in a presidential election year.

A short session and even shorter attention spans of lawmakers have always caused lobbyists to sigh and make plans for the next Congress.

Surprisingly, though, there are industry issues that meet at the brightly lit crossroads of public policy and candidate glimmer, and the music industry may benefit from the short election-cycle session of the 104th Congress.

The hot topics will be indecency, pay-for-play/payola, media consolidation and the alleged role of peer-to-peer networks in copyright infringement.

Take obscenity and indecency, for example. The Federal Communications Commission (FCC) has already taken it in the neck from derisive lawmakers for its ruling last year that the "f-word" does not violate the law if used as an adjective in a non-sexual context.

DOING A TURNAROUND

The Republican-led FCC has made a U-turn and now says it will study whether the ruling should be overturned. But that has not stopped legislators from proposing a bill that would ban the so-called "seven dirty words" (Billboard, Dec. 27, 2003) made famous by comedian George Carlin.

Sources say more indecency legislation is on the way by this spring. They also say the industry should expect hearings, and possible legislation, on alleged pay-for-play/payola and tactics employed by the radio giant Clear Channel Communications and its competitors.

What makes this dicey for the GOP leadership is that San Antonio, Texas-based Clear Channel is among the most lavish campaign contributors to the Republican Party and George W. Bush, who also calls Texas home.

Nevertheless, the loss of localism that media consolidation has caused--whether it is the lack of local on-air DJs or the paucity of local music on radio playlists--has struck a chord with the citizenry.

Congress will probably probe the issue by pondering whether such business practices violate antitrust laws.

MULLING DMCA CHANGES

Also on the legal pads of senior staff, sources say, are plans to introduce legislation to modify the Digital Millennium Copyright Act (DMCA), which was written before P2P networks became popular.

The amendment would allow the industry to sue P2P companies for allegedly facilitating copyright infringement that enables users to upload and download unauthorized music files.

There are also pending bills, opposed by the industry, to amend the DMCA to give consumers greater leeway for non-infringing, fair-use activities when using copyrighted material on the Internet or for copying already-purchased material from one private medium to another.

Sources say that during this session, when the waters must be smooth, these bills will go nowhere.

International Section

GESAC Urges U.S. to Change Copyright Law

By Emmanuel Legrand

CANNES, France--GESAC, the European group of societies of authors and composers, has renewed its plea for the U.S. to modify its Copyright Act to compel bars, restaurants and shops to pay royalties for the public performance of musical works.

GESAC, which convened at the Midem trade fair in Cannes last month, considers the U.S. situation detrimental to European authors, composers and publishers who are not compensated when their works are played in public spaces like bars and restaurants. In contrast, substantial royalties are paid when works of U.S. origin are played in public in Europe.

Following an initial complaint filed by Irish society IMRO concerning Section 110(5) (b) of the U.S. Copyright Act, the issue was brought to the attention of the European Commission, the European Union's executive body.

In July 1997, the EC instigated a dispute settlement proceeding through the World Trade Organization (WTO). In July 2000, the WTO asked the U.S. to amend its copyright act to bring it in line with international intellectual property laws and comply with the WTO TRIPs Agreement, which requires that authors are remunerated when their musical works are played on radio or TV in publicly accessible premises.

A GESAC statement said, "Three years on, the U.S. shows no sign of altering its laws. Around 70% of bars, restaurants and shops [in the U.S.] are still exempted from paying fair remuneration for playing musical works."

The EU and the U.S. reached a temporary agreement in 2000 where the U.S. agreed to pay $1.1 million per year over three years to compensate for the losses European authors suffered from December 2001 to December 2004.

LEVELING THE PLAYING FIELD

Brussels-based Gesac secretary general Veronique Desbrosses says the current situation will have to be reviewed at the end of the year.

However, she does not believe the move will level the playing field between European and U.S. copyright legislation.

"It is quite unlikely the U.S. will change its legislation this year--which is an election year--so we will be back to square one," she says.

The heart of the issue, in GESAC's opinion, is that the U.S. has signed the TRIPs Agreement.

Desbrosses says that regarding this matter, GESAC is backed by right-holders organizations, including music publishers CIEM/ICMP, labels bodies the International Federation of the Phonographic Industry and Impala, film production and distribution group EFCA, the European Music Office, film producers society Eurocinema, performing-artists group GIART and video distributors body IVF.

NO FOLLOW-THROUGH

The other pending issue is compensation, which Desbrosses describes as "ridiculously low."

The settlement reached in 2000 could not be appealed, leaving European collecting societies with a sour taste.

Royalties from public performances in the U.S. could generate as much as 25 million euros ($31.5 million) per year to European rights owners if applied in the same manner as in Europe, according to some estimates.

By the end of 2004, EU and U.S. representatives will start a new round of talks. Meanwhile, GESAC and its sister organizations will lobby the EC and the U.S. government and push for changes in U.S. copyright legislation.

"If this is how the U.S. deals with the issue, how will the Americans justify any actions overseas to protect their rights?" Desbrosses asks. "This puts the U.S. in a rather awkward position. Why sign an international treaty if you don't implement it?"

In Desbrosses' opinion, letting countries pick and choose whether to apply decisions resulting from the WTO dispute settlement proceedings can only lead to an erosion of intellectual property protection worldwide.

Dream Makers & Deal Breakers

Music Vets Form New Law Firm

By Chris Morris

LOS ANGELES--Veteran music executives and attorneys Milton Olin and David Altschul have joined forces to form Altschul & Olin LLP, a Sherman Oaks, Calif.-based law firm.

Altschul spent 21 years at Warner Bros. Records, exiting as executive VP in 2001. He recently served as negotiator for the Recording Industry Assn. of America in its discussions with the Recording Artists' Coalition.

Olin was most recently senior counsel at Manatt Phelps & Phillips in L.A. He was previously COO of Napster (2000-2002).

Olin was with A&M Records from 1984 to 1999 and left the company as senior VP of business and legal affairs. From 1975 to 1984, he was a partner at Mitchell Silberberg & Knupp, which, ironically, later sued Olin on behalf of the major labels when he was directing operations at Napster.

Olin declines to identify the firm's first clients but says Altschul & Olin will represent music, entertainment and new-media companies.

Despite the partners' long association with the music business, the new firm will not stick exclusively to the music sphere. "Anybody who's focused only on music is going to lose their lunch," Olin says.

Commentary

Down to the Crossroads: Music Industry in 2004

By Christian L. Castle

In a mythical moment, bluesman Robert Johnson sang of going down to the crossroads, falling down on his knees and asking the Lord for mercy.

In 2004, the beleaguered music business is at a crossroads, and many industry executives are likely considering a similar choice in their private moments. But Dr. Johnson would probably agree that the Lord helps those who help themselves.

The recent mega-deals in the music industry offer the possibility of near-term financial survival and the promise of fresh strategic thinking.

However, to achieve salvation, management needs to address two systemic problems: anemic artist development and absence of coherent digital distribution and Internet marketing strategies. Without solutions to these challenges, the crossroads may become a dead end.

RISE OF THE INDIES

Artist managers confirm that major labels have largely ceded to the independents their traditional role in artist development.

Conventional wisdom says this is because the costs exceed the benefits. Yet the untidy, uncertain, inefficient and lengthy process of finding, signing, recording, touring and marketing new artists remains an absolute, "synergies" notwithstanding.

While pursuing quick profits from established artists and projects with high commercial potential (such as Columbia Records' recent deal with World Wrestling Entertainment), majors cannot afford to abandon artist development.

The process requires patience and investment, not because artists are flighty but because art is elusive, and developing an audience is tough in a crowded market. But patience and investment at major labels is in extremely short supply.

Revenue forecasting has now become a bi-weekly event at the majors. The truth is no one can really predict how records will sell--no matter what the revenue forecast.

With revenues dropping 30% in three years, executives feel pressure to prematurely terminate new artists who fail to meet these fantasy "projections."

Measured by the current standard, great A&R executives like John Hammond, Jerry Moss, Berry Gordy, David Geffen, Chris Blackwell or Clive Davis would probably have been forced to drop artists who languished early in their careers but went on to be icons after nurturing from their labels.

LONG-TERM FOCUS

Major record companies now frequently cherry pick artists with some proven success on independent labels. These acquisitions often cost more than $500,000, and it is therefore not clear that cherry picking results in cost-savings over time.

The underlying fallacy is that if the independent labels can break an artist on a shoestring, so could the majors.

While WWE records may bring in quick cash, artists with long-term careers bring long-term revenue growth. If cost cutting continues without growth in revenue, the top line will fall under its own weight and collapse onto an organization that struggles to support growth.

I simply do not believe that investors will continue to support an industry with declining revenue just because it's run cheaply. Majors have to take a page from independents and learn to incubate new artists at a sustainable cost.

The music business is at a crossroads. In the words of one of John Hammond's major signings: We'd better start swimming, or we'll sink like a stone.

Christian Castle is a senior counsel with Akin Gump Strauss Hauer & Feld in Los Angeles.

Case Analyses

Calif. Resident Gets Off The Hook In DVD Descrambling Suit

By Samantha Chang

New York--A consortium of film companies has dropped a DVD descrambling case against an individual who republished a computer program called DeCSS on the Internet.

DVD Copy Control Assn., which represents California entertainment and technology companies, moved to dismiss a lawsuit pending against Andrew Bunner, a California resident who published DeCSS online.

The motion was filed in California Court of Appeal for the Sixth Circuit on Jan. 21.

Bunner had argued that he had a constitutional right to publish the software online. A California appeals court in 2001 agreed, saying that barring Bunner from future disclosures of DeCSS was "a restraint on [his] First Amendment right."

The recent retreat follows on the heels of a Jan. 3 U.S. Supreme Court reversal of an emergency stay on a similar case involving Texas resident Matthew Pavlovich.

There, the high court affirmed a decision of the California Supreme Court, which had ruled that the entertainment industry could not force a Texas resident to stand trial in California.

In Bunner's case, the DVD-CCA bailed out of a longtime effort by the Hollywood film community to have online distribution of DeCSS declared a violation of California trade secret laws.

"We're pleased that the DVD CCA has finally stopped attempting to deny the obvious: DeCSS is not a secret," says Cindy Cohn, legal director of the Electronic Frontier Foundation.

"DeCSS has been available on hundreds--if not thousands--of Web sites for 4 years now" she stresses.

DeCSS, which is distributed for free, enables users to play DVDs without technological restrictions, such as forced watching of commercials imposed by movie studios.

The program became enormously popular shortly after its dubious debut in 1999, being distributed by thousands of individuals worldwide the first year it was posted.