Guide Through the Legal Jungle

An Internet Radio Development that Recording Artists Should Watch

Sirius XM, the U.S. satellite radio provider and one of the largest licensees for the compulsory sound recording public performance licenses administered by SoundExchange, hopes to cut SoundExchange out of the equation and obtain negotiated licenses directly from the record labels.

A directly negotiated license between Sirius-XM and record labels would be very significant for recording artists since Sirius-XM is proposing funneling the performers’ share of the royalty through the record label rather than through SoundExchange. SoundExchange is statutorily obligated to pay performers 50% of the collected sound recording public performance royalties; record labels do not have that same obligation. That means royalties going through the record labels might be subject to recoupment and cross-collateralization provisions in the artists' recording contracts. It’s uncertain how a Sirius-XM-record label negotiated agreement would impact smaller internet and digital radio services.

You can view the letter Sirius XM sent to record labels as well as the license agreement Sirius SM is proposing to record labels at this link:

When Does Cybergriping about a Business Cross the Legal Line?

If people are posting negative comments online about your business, can you do anything about it? It depends.

Not every negative statement posted online is actionable. Criticizing a person, product or service online is often referred to as cybergriping – and it is perfectly legal as long as the cybergriper sticks to the facts.

The First Amendment protects a customer’s rights to share with others the truth about any bad experiences he has had with a business. In many cases, the disgruntled customer may even use a domain name that mimics and parodies the business’ domain name – JonesCarpetCleaningIsAwful.com.

However, the cybergriper steps outside legal boundaries when his criticism includes false statements about the business and the business suffers harm as a result of the false statements. In that case, the business may have a valid legal claim that’s worthy of a lawsuit – or at least a cease-and-desist letter.

Why You Don’t Really Own Your Ebooks

As a consumer, do you own that ebook for which you just paid and which you can now access via your Kindle, Nook, iPad, or personal computer? Amazon, Barnes & Noble, Apple and other ebook vendors say you do not. To understand why you do not own your ebook, we turn to a copyright law concept called the First Sale Doctrine.

What’s the First Sale Doctrine?

The First Sale Doctrine is why we can have a market for used books, CDs, and dvds. If you are the owner of a lawfully-made, lawfully-obtained copy of a copyrighted work, the First Sale Doctrine allows you to sell, lend, or otherwise transfer that copy in any way you wish.

However, the benefits of the First Sale Doctrine apply only if you own the copy. Manufacturers often try to defeat the First Sale Doctrine by distributing their products under a license agreement. All the major ebook vendors have used this licensing approach. As a licensee rather than a purchaser, you may not freely re-sell or loan out your new ebook.

Courts sometimes strike down manufacturers’ licensing characterization. This happened in the music industry when a court decided that promotional CDs distributed by record company UMG qualified as a sale or gift and not as a license, and could therefore be legally re-sold on eBay.

Do You Merely License that Ebook?

If ebooks-as-licenses were ever challenged, there is a good chance that a court would side with the ebook vendors. When looking at this same issue in other industries, the courts have ruled in favor of a license rather than a sale when the vendor tells the consumer it’s only a license, restricts the consumer’s ability to transfer the product, and imposes restrictions on how the consumer may use the product. Ebook vendors do all three.

Even if the First Sale Doctrine did apply to ebooks, there are currently technical barriers to exercising it since many ebooks are locked into or tethered to the reader’s personal reading device. Vendors would need to establish a technical means by which consumers could transfer their ebooks.

How Copyright Blunders Push Political Campaigns Off-Course

Missteps in copyright and intellectual property law can send a political campaign off-track and off-message. Even when a copyright blunder doesn’t lead to formal legal action, it distracts from the candidate’s core political message. Here are a few intellectual property landmines on which an unwary political campaign might stumble.

Selecting the Wrong Music.

The right music can energize rally attendees and add oomph to a candidate’s televised message. In contrast, the wrong music selection can generate cease nd desist letters, lawsuits, and negative public comments from peeved musicians who don’t agree with the campaign’s views and don’t want their music associated with it. Recent political campaign music skirmishes have involved John McCain against Jackson Browne, Sarah Palin against Heart, and U.S. Senate candidate Chuck DeVore against Don Henley. Campaigns should also note that selecting music for a political ad demands more care than the selection of music for a political rally.

Failing to Acquire Domain Names and Social Media User Names.

Today’s political campaigns increasingly rely on internet communications and need to acquire appropriate domain names and social media account names. In general, domain name registrars and social media networks issue names on a first-come, first-served basis without doing any conflict check. That’s bad news for campaigns slow to secure domain names and social media account names featuring the candidate’s personal name – especially if an opponent gets them instead. While a candidate can sometimes re-claim a domain name that incorporates his personal name, under certain circumstances, it is completely legal for a campaign to use a domain name that features the personal name of an opposing candidate.

Stepping Outside Copyright Fair Use Boundaries.

Using someone else’s copyrighted work is infringement unless fair use or another exception to copyright protection applies. Unfortunately, identifying the line where fair use ends and copyright infringement begins is not always easy. Past political seasons have generated copyright infringement allegations against U.S. Senate candidate Sharron Angle, Senator Harry Reid, and U.S. Senate candidate Robin Carnahan.

Not Vetting Stock Footage.

Stock footage is pre-existing footage program producers incorporate into their productions. While there is nothing inherently wrong with using properly licensed stock footage, there can be a downside. Hillary Clinton plunged into that downside during her 2008 Presidential bid when her campaign used eight-year old stock footage in the red phone ad. The footage featured Casey Knowles as a child. The problem was the grown-up Knowles had become a staunch Barack Obama supporter and was not shy about publicly identifying herself as such. That story angle dominated coverage of Clinton’s campaign for several days.

What Happens When Your Smartphone Starts Monitoring Your Moods?

A smartphone that recognizes your mood just might be on the horizon. A recent San Diego Union Tribune article “Can smartphones get attuned to your moods?” discusses current research that would structure your music playlists based on your mood. The method determines your mood by analyzing data from sensors in the smartphone - the accelerometer, the GPS device and the microphone. Researchers are also considering getting data from monitoring keywords in the emails you send and the content of the websites you visit.

The article briefly quotes me on the privacy issues such monitoring would raise – of which there are several.

Is It Legal for Your Smartphone Provider to Collect This Information?

At the moment, internet and digital privacy is mostly self-regulated. Hence, there’s no federal law stopping the people behind your smartphone from monitoring the websites you visit and your location. However, there are lots of government officials and advocacy groups who would be happier if providers got consumer permission for such monitoring. Monitoring a person’s emails or phone calls without their permission is another matter and would  likely violate wiretapping laws, the Computer Fraud and Abuse Act, the Stored Communications Act, and other state and federal laws.

Should Consumers Grant Permission for Smartphones to Monitor Their Moods?

Maybe. There are pluses and minuses to allowing your digital equipment to have sufficient information about you to make accurate recommendations for the music, books, products, travel plans, job opportunities, etc. that may interest you. From a privacy perspective, the minus of having too much personal information about you available in the digital world is that the information may be used in ways you don’t anticipate. When information is collected about consumers, there is always someone who wants access to that information. Whether or not the people/institutions can legally access that information depends on who they are and why they want the information.

Keeping It Legal While Getting Your Next Harry-Potter-Fix

I admit it. I’m a Harry Potter fan (albeit perhaps not a die-hard fan). I’ve “read” all the books a la Jim Dale’s superb audiobook narration and I’ve seen four of the films and have every intention of eventually catching films nos. 5 – 7 by dvd or netflix one day soon.

Now that the final film is out, how will extreme fans get their next Harry-Potter-fix? Here are some suggestions for the fans who want to keep things legal:

Websites & Books. Fans can create websites, social media networks, and reference books that explore and expand the Harry Potter world. J.K. Rowling and Warner Brothers typically welcome most such fan creations. And even if they didn’t, the First Amendment gives all fans the right to comment on and even criticize or parody the object of their fandom.

Fan Fiction/Films. Fan fiction and fan films are potential avenues for Harry Potter fans. While much fan fiction and fan films qualify as copyright infringement, Rowling has embraced fan fiction as long as it remains non-commercial and does not push the Harry Potter world into highly objectionable directions.

The Caveat. Nevertheless, Harry Potter fans should be aware that their idolatry can go beyond legal boundaries. Fan don’ts include selling products or commercial advertising in conjunction with fan creations and inaccurately referring to their offerings as the “official, authorized versions”. Rowling did file a lawsuit against a Michigan-based publisher that planned to publish a 400-page Harry Potter compendium duplicating much of Rowling’s original writing.

A New Wrinkle in Your Use of Public Domain Materials

Using public domain materials is an option for those who want to avoid the complications of clearing rights and the expense of paying licensing fees. There are already pitfalls in determining what is and is not in the public domain although I do try to explain public domain status here in 60 seconds. A federal court in the 8th Circuit has just added a new level of complexity to the use of public domain works.

Background

In the case of Warner Brothers v. X One X Productions, X One X and Avela acquired and licensed images from The Wizard of Oz, Gone with the Wind, and several Tom & Jerry short films. The images were from the films’ publicity materials such as movie posters, lobby cards, still photographs, and press books. The publicity materials had been distributed without a proper copyright notice which at the time (1939 – 1957) was a requirement for copyright protection. Hence, while the films are still protected by copyright, the publicity materials used by X One X and Avela are now definitely in the public domain.

The Court's Do's & Dont's for Using Public Domain Materials

The problem was not that X One X and Avela used the public domain materials. The problem was how they used the materials. According to the 8th Circuit:

• It is acceptable for X One X/AVELA to reproduce in two dimensions an image from any one item of publicity materials even if X One X/AVELA used or licensed the image for use on merchandise such as shirts, lunch boxes, and playing cards.


• It is not acceptable for X One X/AVELA to combine two or more public domain images on a single item or to use a public domain image with a phrase from the book on which the film was based. According to the court, such use appropriated original elements of the film. For example, a t-shirt with a publicity shot of Judy Garland as Dorothy might include the phrase “There’s no place like home”.


• It was not acceptable for X One X/Avela to use a two-dimensional publicity shot as the model for creation of a three-dimensional image/product such as an action figure or figurine. The court reasoned that the additional details required to transform the two-dimensional image to a three-dimensional object were drawn from the films and, thus, was an infringement of original elements of the still-copyrighted films.

Observations from One Attorney Who Actually Has to Advise Clients on This Stuff

Principles underlying the court’s rejection of the second and third uses seem difficult to apply. The case also leaves some unanswered questions. For example, would it have been acceptable if the X One X/AVELA designers used details from their imaginations when creating a three-dimensional image from the two-dimensional publicity shots?

I specifically disagree with the court’s conclusion that combining a publicity shot with a phrase from the book, The Wonderful Wizard of Oz (which is in the public domain) would still be an infringement of the copyrighted film, The Wizard of Oz.

Since this is an 8th circuit decision so it is only binding within the 8th Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South D akota), so we’ll have to see if any courts outside the 8th circuit follow it. You can read the full Warner Brothers v. X One X Productions decision here.

Here’s the take-away message from this case for those who want to use public domain materials. If the public domain materials are associated with a work still under copyright protection, copyright infringement is a potential risk if you stray from an exact reproduction of the public domain work.

NBC Harry-Potter Lawsuit Raises Copyright-Font Issue

A while ago I blogged about copyright protection for fonts, the risks of using font exchanges, and a client’s pursuit of a font license for use on a company logo. The client story had a happy ending.

I don’t see tons of font copyright issues in my entertainment and intellectual property law practice. They are apparently on the rise. The P22 Type Foundry just sued NBC Universal for using P22’s Cezanne font software to create various Harry Potter merchandise. The Hollywood Reporter offers an interesting article about the lawsuit.

Writing Effective Disclaimers for Your Twitter Account

It has become increasingly common for companies to have policies concerning employee online activities. I’ve previously blogged about what a company social media policy may legally require.

Most company social media policies require that if the employee identifies himself as an employee of the company, the employee must include a disclaimer such as the following:

The views expressed on this post are mine and do not necessarily reflect the views of the ABC Company.

But how does one include that 102-character disclaimer on a medium like Twitter that allows only 140 characters per message? Many people include the disclaimer as part of their Twitter profile. Here are some of the effective short disclaimers I’ve recently seen:

• Tweets independent of ABC Company
• Opinions my own
• Tweets my own, composed for free.
• Tweets in personal capacity
• Links/RTs are not endorsements.

Copyright Office Takes Steps to Close Termination Gap for Pre-1978 Works

A copyright owner who transfers or sells the copyright in his work can terminate the transfer and reclaim his copyright after a number of years.

What’s the Termination Gap?

Two provisions of the Copyright Act address termination rights. Section 203 of the Copyright Act allows you to reclaim the copyright in a work you assigned on or after January 1, 1978. Section 304 of the Copyright Act allows you to reclaim the copyright in a work that existed prior to January 1, 1978. There is a narrow gap in that neither of these sections explicitly address termination rights for a work assigned prior to January 1, 1978 but not actually created until after January 1, 1978. I discuss and give examples of this termination gap in a previous blog posting.

Clarified Copyright Regulations

The Copyright Office recently took a baby step towards closing the termination gap by amending its regulations governing the required Section 203 termination notice. The Copyright Office will accept and record section 203 termination notices even if (i) the work was assigned prior to January 1, 1978 and (ii) the work was created on or after January 1, 1978. The Copyright Office rationalizes that these so-called gap grants can be terminated pursuant to Section 203 because it is not legally possible to transfer a copyrighted work until the copyrighted work actually exists.

More Work to Do

That’s where the Copyright Office stopped its official efforts to resolve the termination gap. According to the Copyright Office, any additional disputes over whether copyrighted works falling in the gap can be terminated under Section 203 must be settled by the courts or by Congress.