BRUSSELS--The European Commission last Monday formally adopted the European Union's Enforcement Directive, which provides a legal framework against piracy and counterfeiting. <br clear="none"/><br cle

Breaking News

Olsen Twins Sue Acclaim Over Game Payments

By Samantha Chang

NEW YORK--Entertaining twins Mary-Kate and Ashley Olsen are suing video-game publisher Acclaim Entertainment, claiming nonpayment of game royalties.

In the suit, which was filed April 15 in Los Angeles Superior Court, the Olsens say Acclaim failed to pay $178,000 under a settlement the parties reached last September.

An audit of Acclaim's books indicated that the girls had not been paid "hundreds of thousands of dollars" in royalties that they were entitled to from games featuring the duo.

Acclaim could not immediately be reached for comment.

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Dallas Group Urges Streamlined FCC Guidelines

By Phyllis Stark

NASHVILLE--Dallas-based First Broadcasting Investment Partners is urging the Federal Communications Commission to streamline its procedures governing radio facilities modifications and allocations.

The company filed a rulemaking request with the Commission asking for six key changes:

- Simplifying the procedure for moving a community's sole local service to a new community;
- Simplifying the procedure to remove non-viable FM allotments;
- A one-time settlement window to resolve the backlog of pending FM rulemakings and
- Permitting AM station community of license changes through a minor modification.

Gary Lawrence, president and vice chairman of First Broadcasting, says the changes the company is seeking are "designed to help the FCC staff streamline the FM and AM station modification change process and expand and improve radio station service."

First Broadcasting Investment Partners is a broadcast merchant bank that provides capital to the radio industry.

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German Group In Film-Budget Inflation Suit

By Scott Roxborough

COLOGNE (Hollywood Reporter)--German rights group Intertainment will delay publishing its 2003 yearend financial figures until after a ruling is handed down on its $100 million lawsuit against Elie Samaha's Franchise Pictures.

The suit, currently entering its fourth week of hearings in Santa Ana, Calif., centers on a deal signed in 1999 between Intertainment and Franchise in which the German firm agreed to pay a license fee that would cover 47% of Franchise's production costs on a slate of pictures.

Intertainment claims Franchise fraudulently inflated the budgets on films made under the deal, which included "3000 Miles to Graceland," "The Whole Nine Yards," "Battlefield Earth," "Driven," "Get Carter" and "The Pledge." The Munich-based group is betting its future on the successful outcome of the suit and on the $100 million in damages it is claiming from Franchise.

Samaha testified last Thursday that he had a secret oral agreement with Intertainment head Ruediger "Barry" Baeres to inflate movie budgets. Samaha claimed that Intertainment agreed to pay what was needed on any given picture, even if that exceeded the 47% cutoff written into its first-look deal with Franchise.

Samaha will take the stand again when the case resumes May 4. A decision on the suit is expected by June 11.

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Napster Gets June 14 Court Date

By Paul Resnikoff

BOSTON (DigitalMusicNews)--The ghosts of Napster-past keep knocking, as a San Francisco federal judge set a June 14 court date to hear motions to dismiss a lawsuit against the beleaguered P2P service.

Napster investors Bertelsmann and Hummer Winblad are facing charges from various publishers and labels that their investments in Napster led to increased revenue losses.

Bertelsmann invested $90 million in Napster in 2000, keeping the service alive for right months before it was eventually shut down by court order. Meanwhile, Hummer Winblad supplied Napster with much-needed cash as the VC partner. Both are being accused of contributing to $17 billion in revenue losses for the music business.

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Washington Report

Rock Stars, Lawmakers Meet At FMC Summit

By Bill Holland

WASHINGTON, D.C.--Following a keynote speech Monday (May 3) by FCC commissioner Michael Copps, attendees at the second day of the Future of Music Policy Summit at George Washington University will hear from panelists ranging from rock stars to federal lawmakers.

Here's just a sampling of Monday's panelists: Jim Griffin, CEO of Cherry Lane Digital; Tina Weymouth and Chris Frantz of the Talking Heads and Tom Tom Club; Cary Sherman, president of the Recording Industry Assn. of America; Robert Kasunic, principal legal advisor, U.S. Copyright Office; Sandy Pearlman, VP of media development at Multicast Technologies; Chellie Pingree, president and CEO of Common Cause, and Jim Winston, executive director of the National Association of Black-Owned Broadcasters.

Also on panels are David Carson, general counsel, U.S. Copyright Office; Barton Herbison, executive director, Nashville Songwriters Association International; Suzanne Vega, songwriter and performer; Lee Carosi, majority counsel, Senate Commerce Committee; Adam Eisgrau, executive director, P2P United and Rep. Jim Cooper , D-Tenn.

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Nepal Joins WTO

By Emmanuel Legrand

GENEVA--The Kingdom of Nepal is now the 147th member of the World Trade Organization.

Nepal started the negotiation process to join WTO in 1989. The kingdom ratified WTO's Protocol of Accession March 24. According to established practice, the Protocol came into force 30 days later.

WTO says another 24 countries are currently in talks join the organization.

These are (listed by the date of their application): Algeria, Russian Federation, Saudi Arabia, Belarus, Ukraine, Sudan, Uzbekistan, Viet Nam, Seychelles, Tonga, Kazakhstan, Azerbaijan, Andorra, Lao People's Democratic Republic, Samoa, Lebanese Republic, Bosnia Herzegovina, Bhutan, Cape Verde, Yemen, Serbia and Montenegro, Bahamas, Tajikistan and Ethiopia.

WTO is the global international organization dealing with the rules of trade between nations.

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Sinclair: 'Nightline' War Toll Politically Motivated

By Nellie Andreeva

WASHINGTON, D.C. (Hollywood Reporter)--Eight ABC affiliates owned by Maryland-based Sinclair Broadcast Group pre-empted last Friday's edition of "Nightline."

Sinclair says "Nightline's" plan to devote an entire episode to airing photographs of U.S. soldiers killed in Iraq was "motivated by a political agenda."

Friday's expanded 40-minute edition of "Nightline," dubbed "The Fallen," featured photographs of the 500-plus U.S. solders killed in action in Iraq, whose names anchor Ted Koppel read aloud.

"Despite the denials by a spokeswoman for the show, the action appears to be motivated by a political agenda designed to undermine the efforts of the United States in Iraq," Sinclair said in a statement.

"While the Sinclair Broadcast Group honors the memory of the brave members of the military who have sacrificed their lives in the service of our country, we do not believe such political statements should be disguised as news content," the statement continued.

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International Section

WIPO Head Backs Developing IP

By Emmanuel Legrand

GENEVA--Developing intellectual property systems can stimulate economic growth, cultural development and social well-being.

That's the opinion of Dr. Kamil Idris, director general of the World Intellectual Property Organization (WIPO). "All nations, by harnessing the power of creativity and innovation through the use of the intellectual property system, can achieve economic growth and cultural development," Idris said.

Idris spoke April 26 on World Intellectual Property Day, an event sponsored by Geneva-based WIPO.

He added: "Recognizing and developing this limitless resource, and exploiting it as an economic asset, is key to achieving prosperity in today's world. By building awareness of the value of intellectual property and developing the necessary infrastructure to help their citizens take full advantage of the IP system, all nations can create an economic environment and a culture that truly encourages creativity."

WIPO members established the World Intellectual Property Day in 2000 as a way to focus on the importance of IP in the growth of societies. April 26 was picked as a celebration of the day the Convention establishing WIPO entered into force in 1970.

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Cannes Bows Classic Cinema Section

By Shiraz Sidhva

PARIS (Hollywood Reporter)--The 2004 Cannes Film Festival, which runs May 12-22, will introduce Cannes Classics, a new section showcasing classic cinema.

Italian director Michelangelo Antonioni will present the world premiere of his short film, "The Gaze of Michelangelo," and the restored version of his 1966 classic "Blowup."

Cannes Classics will also feature a digital restoration of Clyde Bruckman's 1927 film, "The General," starring Buster Keaton, to celebrate the release this year of a collection of Keaton's films.

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Columbia Pics Loses 'Flowery' Trademark Case

By Roger Pearson

LONDON--A British flower-grower has won a trademark case that will allow him to continue sell flowers using the name of the hit 1970s TV series "Charlie's Angels."

Peter Wood, the managing director of plant-suppliers R Delamore Ltd. of The Nurseries in Cambridgeshire, England, was marketing petunias called "Charlie's Angels" when Columbia Pictures sued him.

Trademark judge WJ Trott, the principal hearing officer for the British Trademarks Registrar, ruled that the flowers were too far removed from Columbia's property for the buying public to mistake that they were merchandise connected with the TV show or film "Charlie's Angels."

Wood claims he had no knowledge of the hit '70s TV series or blockbuster movie remake when he decided to market his "Charlie's Angels" petunias. He insists that the choice of name was "purely coincidental."

Wood says his young son Charlie, who helped grow the petunias, chose the name, inspired by his mother's tendency to call him "her little angel."

Challenging Wood's application to register the trademark in respect of a range of plants and flowers, Columbia argued that Wood had deliberately chosen the name to benefit from the publicity surrounding the film, and that the public would be confused into thinking his flowers were endorsed by the studio.

Rejecting Columbia's opposition to Wood's application, the judge said the studio's challenge was based on "a lot of supposition, without any basis in evidence." He added, "There is no evidence in this case that films always trigger merchandising and, even if I were to take judicial notice of this as a notorious fact, there is certainly nothing to show that the practice extends to flowers and plants.

The judge also ordered Columbia, which last year released the movie sequel "Charlie's Angels: Full Throttle," to pay Wood $3,544 to cover his legal costs.

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Disney Channel Goes To Argentina

By John Hecht

MEXICO CITY (Hollywood Reporter)--The Disney Channel this month will become part of the basic programming lineup for CableVision, Argentina's leading cable operator.

The Walt Disney Co. Latin America says the 24-hour channel will first be transmitted in the greater Buenos Aires area and other key capital cities. As of June, the channel will be made available throughout the nation to CableVision's 1.2 million subscribers.

Disney Latin America will continue to produce content for the local market, including "Playhouse Disney," "Zapping Zone" and "Art Attack." The company makes original productions for all three shows in Argentina, Mexico and Brazil.

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Japanese Firm Sinks $100M Into DreamWorks

By Chris Gardner

LOS ANGELES (Hollywood Reporter)--Japanese publisher Kadokawa Holdings will acquire a 2.83% stake in DreamWorks SKG for $100 million.

Under the deal, Kadokawa will obtain exclusive rights to sell DreamWorks films, videos and DVDs and other products in Japan.

According to a statement, Tokyo-based Kadokawa expects sales of about $32 million from selling DreamWorks content in the year starting April 1. DreamWorks previously didn't have a Japanese partner.

DreamWorks was launched in 1994 by partners Steven Spielberg, Jeffrey Katzenberg and David Geffen. Each has a reported 22% stake in the studio, with Paul Allen, the company's main investor, owning 26%. The Korean corporation Cheil Jedang also maintains an investment in the studio.

The studio previously relied on its film, television, record and animation division for profits. However, DreamWorks sold its music division to Universal Music last year, and earlier it moved its TV operations to NBC.

On the film side, the studio is suffering through a dry spell. Last year, DreamWorks distributed only seven new wide releases, the best performer being "Old School," with a $75 million take. Its only two 2004 releases--"Win a Date With Tad Hamilton!" and "Eurotrip" -- turned in disappointing runs.

And while the studio is poised for a rebound during the next eight months with such upcoming films as "Shrek 2" and Spielberg's "The Terminal" as well as co-productions "Collateral" and "Lemony Snicket's A Series of Unfortunate Events," its 2005 slate is so far only composed of two animated titles: "Madagascar" and "The Wallace & Gromit Movie."

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EU Piracy Directive Clears Hurdle

By Leo Cendrowicz

BRUSSELS--The European Commission last Monday formally adopted the European Union's Enforcement Directive, which provides a legal framework against piracy and counterfeiting.

The new legislation on intellectual property now gives EU governments more power to stamp out pirates. The law is set to come into force within two years. It now has to pass through national legislatures in all EU countries. All member states must have fully implemented the legislation by May 2006.

EU internal market Commissioner Frits Bolkestein says he was pleased the directive was adopted before the EU enlarges, on May 1, to include 10 more countries.

"The Directive will give the Europe of 25 much stronger defenses against counterfeiting and piracy, which are a modern economic plague increasingly linked to organized crime," he says. "When intellectual property rights are not respected, there is less investment in innovative industries, research and cultural promotion. That means everyone in Europe loses out."

The law covers movies, music, software, toys, and pharmaceuticals as well as patents, copyrights, trademarks and registered designs.

Measures include seizing suspicious bank accounts, forcing offenders to pay damages to victims of piracy and withdrawing fake goods from the market at the offender's expense. Right holders can claim the destruction, recall or permanent removal from the market of illegal goods, as well as financial compensation, injunctions and damages.

Governments will also have to step up their co-operation with other capitals and with the European Commission to make current prevention systems more effective.

At the European Parliament's request, the original reference to criminal sanctions for pirating goods has been scrapped. However, the Commission has indicated that it is still attached to these elements from its original proposal and "will examine the possibility" of reintroducing sanctions in the future.

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Dream Makers & Deal Breakers

Dream Makers Spotlight: Sony, HBO, CCE

- VH1 in New York ups Nigel Cox-Hagan to senior VP of creative group and consumer marketing. He was senior VP/creative director.

- Sony Music Licensing in New York appoints Keith D'Arcy senior director of music licensing and integrated marketing. He previously was director of music resources at EMI Music Publishing.

- XM Satellite Radio in Washington, D.C., promotes Rebecca Hanson to senior VP of of business affairs/deputy general counsel and Gary Hahn to senior VP of advertising and brand management. They previously were VPs of their respective departments.

- HBO International has named Stanley Fertig senior VP to managing all of HBO's international joint ventures and business in Asia and Europe. Fertig previously was senior vp of acquisitions and business development at Columbia Music Entertainment.

- Clear Channel Entertainment in Houston has named veteran arena management executive Mike McGee executive VP of corporate operations. McGee previously was senior VP/business development at Aramark Corp. in Houston.

- MTV Networks Latin America in Miami promotes Charlie Singer to executive VP of programming, creative and strategic marketing. He was senior VP of programming and production.

- Universal Music Publishing Group in Los Angeles names Heather Brown director of marketing and communications. She was account supervisor at Hellkat Entertainment Marketing.

- ASCAP in New York promotes Jason Silberman to director of pop/rock membership. He previously was associate director.

- The National Academy of Recording Arts & Sciences in Los Angeles names Lizzy Moore regional director of the West region. She was director of corporate relations and special projects at P.S. Arts.

- House of Blues Concerts in Los Angeles appoints David Hart senior VP of talent. He previously was a senior agent the Agency Group.

- RealNetworks president Lawrence Jacobson has resigned to pursue other opportunities. He will continue to work for the company as a strategic advisor, reporting to chairman and CEO Rob Glaser. The company has no plans to fill the position of president at this time. Dan Sheeran has been named senior VP of international operations. Sheeran previously was senior VP of marketing.

Contributors: Carla Hay (New York), Ray Waddell (Nashville) and Christopher Walsh (New York).

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Casino Owner Bets On Music Biz

By Tamara Conniff

George Maloof, owner of the Palms Casino Resort in Las Vegas, is diving into the music business.

Maloof is opening a state-of-the-art recording studio--the first of its kind to be put in a hotel and casino. He and his family have also inked a deal with Interscope Records to start their own label, Maloof Music.

The new 8,000-square-foot, multi-room recording studio is the brainchild of Maloof and TV producer/manager Larry Rudolph and is part of a general expansion of the resort.

"I just thought it would be interesting to have artists that want to come to Las Vegas, hang out and screw around in the recording studio and maybe record an album," Maloof says. "This will be the ultimate recording experience."

Maloof says the facility will be open 24 hours a day, with a concierge on hand to "help out with whatever service the band or artist needs." Special artists suites will have connections back into the recording studio that will enable artists to mix tracks from the privacy of their rooms.

For Maloof, the recording studio and record label are a natural expansion for the Palms Casino. Since the resort's inception 3 1/2 years ago, the Palms has become a music hot spot. Its clubs--Rain, Ghost Bar and Skin--have hosted performances by such acts as No Doubt, Pink, Korn and a surprise show by Britney Spears. Artists are drawn to the Palms because of its youth-oriented casino vibe, which Maloof hopes will make the recording studio even more enticing.

"We wanted the hotel to be on the cutting edge of everything, of what's happening with youth today when it comes to entertainment, dancing and restaurants," Maloof says.

Unlike many Vegas hotels that boast 3,000-plus rooms, the Palms, which is valued at $265 million, is only a 430-room property. With 20,000 square feet of meeting space, it has a more open feel than other casinos.

On the record label side, Maloof has been working closely with Interscope A&M Geffen chief Jimmy Iovine, head of sales and marketing Steve Berman as well as with Eminem's label, Shady Records. Maloof says they are putting together a marketing and business plan for two acts: one hip-hop and one rock.

With its dance clubs and overall casino sound system, the Palms offers a perfect marketing and promotion vehicle for a record label because airplay in the casino is guaranteed.

"I just have a huge passion for music," Maloof says. "I love concerts. I love the pop culture and how music relates to everything we do. It has such a huge influence on our culture; I just get a kick out of it."

Tamara Conniff is the music editor of Billboard sister publication The Hollywood Reporter.

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Case Analyses

Paulina Rubio Gets Smackdown For Canceling Appearance

By Chris Morris

A Los Angeles Superior Court jury has awarded two Michigan-based public relations firms $57,350 in their suit against Latin pop star Paulina Rubio and her former manager, Ricardo Cordero.

In a suit filed in April 2003, M3 Management and Pacific Communications Group claimed that Rubio had reneged on an agreement to make a promotional appearance for automaker Mercedes Benz at the January 2003 Los Angeles Auto Show.

According to the suit, Rubio cancelled the appearance 36 hours before the event, citing illness.

However, according to Raul Perez, an associate at litigator Fox & Spillane, Rubio testified at trial that she had in fact been vacationing with her family on a boat off Acapulco at the time of the cancellation.

M3 and Pacific Communications had sought punitive damages of at least $1 million, but Superior Court Judge Malcolm Mackey placed a cap on the award.

In light of the over $1 million that the plaintiffs were seeking, attorneys for Rubio saw the verdict as a victory.
"Paulina won 95% of the case," said attorney Howard Fredman of the Los Angeles-based Law Offices of Richard Jacinto. "The award was approximately 5% of the amount that had been claimed for compensation alone. So, we are of course disappointed that she was not vindicated on liability, but Paulina did prevail in terms of the claim."
Prior to the verdict, judge Mackey threw out the plaintiff's punitive damage claims.

The $57,350 award represents $20,350 in personnel costs related to Rubio's no-show, and a $35,000 discount that had to be given to Mercedes Benz for a future auto show.
According to Fredman, Rubio did not perform in Los Angeles because several of the promises made to entice her to participate in the auto show, including a Mercedes Benz sponsorship of her international tour, failed to materialize.

Additional reporting by Leila Cobo
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New Filings: Koch, Capitol Records

Case: KTV Inc. v. Tao Music Inc.
Issue: Defendant allegedly used plaintiff's "KTV" trademark without authorization
Cite: USDC, SDNY; CV-3135
Filing attorney: Seth Natter

Case: Limelight Records Inc. v. Koch Entertainment LLC; Audium Entertainment LLC
Issue: Breach of contract, fraud
Cite: N.Y. Supreme Court; 601174
Filing attorney: Kenneth Sussmane of McCue Sussmane

Case: Agilent Technologies Inc. v. Micromuse Inc.
Issue: Patent infringement
Cite: U.S. District Court for the Southern District of NY; CV-3090
Filing attorney: John Allock

Case: Tomato Music Works Ltd. v. Capitol Records Inc.; John Does, 1-10
Issue: Copyright infringement
Cite: USDC, SDNY; CV-3164
Filing attorney: Craig Huber

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