Sunday, October 23, 2011

Protecting Intellectual Property, Trademarks, and Your Business

I studied three entertainment law podcasts this week to enhance my knowledge of the topic. When you finish reading this, I encourage you to listen to the same podcasts to enhance your basic understanding of the subjects discussed here. The first podcast is session 5: "Tackling Intellectual Property Law in Cyberspace" from the 9th Annual CIPLIT Symposium. The presenters were Rose Hagan from Google, Ann M. Bartow from The University of South Carolina, Greg Vetter from The University of Houston and Sonia Katyal from Fordham University.

Rose Hagan spoke about her role at Google and defending it from lawsuits that arise from emerging Internet related legal issues. At the time, Google was facing 8 lawsuits and had already been involved in several others. Individuals, companies, and trademark holders were asserting their rights, and attempting to establish precedents for Internet law. Google is often involved in these cases simply because it is a major player in Internet advertising. Google sells advertising space based on terms advertisers select by picking keywords. While Google doesn't create the ads for advertisers, it needs to establish standards within the emerging law and common sense. She stated that Google has no desire to infringe on trademark owners rights because they also spend a great deal of time and money protecting Google's rights and image. Google has policies for keyword and advertisement text. It based these on the countries where the ads are created and the relevant national laws governing trademarks, intellectual property, commerce, and Internet advertising. and ran and the laws that effect them.  She cited cases such as Tiffany v. Ebay and a case involving 1-800-Contacts. Most of the issues she discussed involved advertisers attempting to gain unfair advantage by manipulating Internet marketing options. If a company used my companies keyword, property, and branding to bring customers to their site instead of mine and to sell similar or counterfeit items, then I would need to assert my legal rights to protect my business.

Ann M. Bartow sounded as though she was on the verge of a breakdown as she rapidly moved through her presentation. She stated that "Intellectual prestige is not a trademark problem". She provided examples of designers or companies suing others if a product looked similar to one of their own. They may sue over a style they are using. She believes that these styles, stitching patterns, etc. are not unique enough to be protected and I agree. Some of her examples were of a designer suing another over what they claimed was a similar design but really was re-imaged by both designers from a previous designer's work. It is not unique enough to be protected. Other designers and companies do not want others to be selling items with common themes to their own because they do not want their brand to be damaged because a store that is not as elite selling it makes it less "special". This is the "intellectual prestige" she mentioned. For "intellectual prestige" to be proven it better be a unique and truly original concept.

Greg Vetter spoke about patent law. He focused his talk on software arts and claims law. His insights into patents are interesting. It made me realize that I'd never he happy engaged in patent work but it is valuable information. You may be thinking, "I am not an inventor, so why does this matter to me?" I thought the same but as he spoke I understood. I'll never be spoken about in the same breath as Edison, Tesla, or Ford either but some of his talk applied to my Internet-based business. If your company creates patents for some of its concepts, branding or materials you must have a clear and unbroken history of ownership based on filing and maintaining proper legal documents.

The final speaker for the podcast was Sonia Katyal. The most interesting part of her talk was discussing intellectual property law vs. digital technology. She believes that freedom of speech, public domain, and digital technology moves fast enough that it changes the facts on the ground. I disliked her talk; she seems to relish the idea of destroying copyright owners rights. She believes testing these laws and destroying or minimizing the rights of property holders is a good thing. She seems to have a love for outlaws, activists, and criminals. While Napster and similar sites helped to popularize the online music distribution market eventually became a benefit to the consumer, the right holders, and the companies who invested in the creation of the work, what she endorses hurts all. She wants to dance around in the shadows that the corrupt and criminals use to justify their unethical actions. Sonia Katyal should understand that if people like her and the Internet outlaws she attempts to glorify continue to steal and devalue the creations of others and profit can no longer be made then the creators will simply stop creating new work until certain that their rights are protected. The protection that people like Sonia Katyal attempt to provide to the outlaws makes the world a less safe, less fair, less positive, and less ethical place. These outlaws makes the world a worse place. I wonder if she found herself isolated with outlaws in the real world instead of in the safety of academia if she would still attempt to lionize them? I doubt it but she would probably then attempt to justify their behavior by explaining how society turned them into outlaws rather then understanding that individuals are responsible for their own behavior and to follow the laws of society instead of attempting to break them.

The second podcast deals in Trademark Protections. The first presenter was Marc Trachtenberg. His presentation was entitled "Protecting Your Marks In and From the New Top Level Domains". The panel  discussed the Internet being the gateway to billions of people who go online to purchase products via mobile devices or computers. This is why protecting your marks is vital because selling online may be a companies main or only source of revenue. His talk mentioned activities such as cybersquatting and typosquatting. Cybersquatting is the illegal practice of registering potential domain names before the proper rights owner can and attempting to force the company who wishes to register the name to pay for the right to do so. The case of Panavision v. Dennis Toeppen is one of the most famous cybersquatting cases. Typosquatting is when someone registers and operates a name very similar to a registered domain name in an attempt to trick Internet users to visiting their sites by mistake. They will add an extra letter and make the sites look similar. An example of this is Bank of America's web site is www.bankofamerica.com. A typosquatter would register it as something like, www.banksofamerica.com. How many of you would easily pick up on the difference after having done a keyword search the typosquatters site came up first in the search and then led you to a site that looks exactly like the Bank of America site? They may steal your banking information, money, address book, place spyware, malware, and worse on your computer.

Can your business survive the credibility hit if someone did this to your business and your customers were tricked into visiting a mirror site that damaged them? The podcast made it clear that you need to register your domain on as many of the web domains as possible. There are two categories the generic TLDs (.com, .org, etc.) and country-specific TLDs (.us, .uk, .asia, .ca, etc.) and it can be expensive to register with all of them. It is best to register your mark with as many as you can even if you never attend to use them but the annual fee's can be prohibitive. It is less expensive to be proactive then reactive because brand abusing is growing at least 28% per year according to the presenters data. Marc Tractenberg states that, "With evolving law and technology you can never plan for every eventuality." He advises to select a distinct domain name to protect the company and save money in advertising. If you pick a domain name that is common you will spend too much in advertising fees directing users to your site.

They discussed the IP Clearing House and met with concerns of the audience. It is viewed as a tool to reduce the cost and administrative burden on mark owners.

The third podcast is "IT/Contractual Aspects of New Top Level Domains." It is related to the previous podcast that I discussed.  The commentators wisely point out that the policies, registrations, and procedures are geared more towards good people, who act in good faith. They are classified as "Good Actors". The governments, companies, and others who govern the Internet believed that everyone would obey the law on the Internet. What law? Which countries law? With what authority could they be penalized and is there a penalty? There was not much law and it is foolish to expect all people to act ethically without potential enforceable consequences. The panel called these people "Bad players". A consumer must be able to trust a companies web site and overall web presence. This podcast spent time speaking about how to set up a more significant governing body to eliminate the most severe Internet liability and criminal issues. These issues can destroy a business.

The three podcast reinforce common sense business practices that existed even before the Internet:

1) Do everything legally possible to protect your business from the start. This includes filing all proper copyright and trademark registrations, filing proper paperwork with all relevant governing bodies and verifying that you have eliminated potential liabilities. It is always less expensive to protect yourself proactively then it is to fight legal battles to regain your rights. The legal fee's or issue created by a attack on or loss of rights can destroy a company.

2) Develop a strong and adaptable business plan. Technology and the laws that govern it are changing rapidly. A significant source of revenue for your company can disappear quickly but a new one may likely replace it, be wise enough to see these happening and position your company to thrive during the transition.

3) Your clients must be able to trust you! If they don't trust you on the Internet they will not be spending their money on your site. Your information needs to be accurate and your web sites must be secure, especially if accepting payments.

4) If you are unwilling to stay current on the laws that impact your business then it is vital to hire qualified counsel who is and annually reviews your business. A change in a law can hurt your business but it may provide increased opportunities. You need to be aware of both to maximize your companies position in the marketplace. It is best if you are remaining current on the law because it is less expensive and even the best lawyer will not know as much about your business as you do.

5) Constantly look for new opportunity. Opportunity may exist in your greatest failures. Almost always in life and business you can create opportunity if you are adaptable, creative, understand people's needs and desires, and are willing to do the work necessary to ensure success.

Copyright for Photo1 belongs to @britannica.com
Copyright for Photo2 belongs to @lasvegasnevadadui.com
Copyright for Photo3 belongs to @forbes.com

Feel free to insert your favorite "clean" lawyer jokes in the comment section.

Monday, October 3, 2011

ECLECTIC HEIGHTS: Legal Manuevers

ECLECTIC HEIGHTS: Legal Manuevers: I have been fascinated to read about several entertainment industry related cases and decided to share them with you. Technology, business p...

Sunday, October 2, 2011

Legal Manuevers

I have been fascinated to read about several entertainment industry related cases and decided to share them with you. Technology, business practices, and other events are changing the industry and changing how the industry and those in it operate.

The first case involved actor Jared Leto and his band 30 Seconds to Mars being sued by their record company EMI/Virgin. The record company filed suit against the band for damages totaling $30 million dollars. Mike Masnick, who writes for Techdirt.com shared the following thoughts on the legal actions by the band and the record company.

"It's always fun to remember stories like the following one the next time you hear some RIAA exec claim that it represents musicians. The RIAA (Recording Industry Association of America) represents the record labels and record labels are continually at odds with musicians -- sometimes to extreme levels. Wired reported that EMI/Virgin Records had sued the band 30 Seconds To Mars for $30 million recently. Wired now points us to the response from 30 Seconds To Mars, where the band notes that the lawsuit appears to have a lot more to do with the band opting out of its contract. The band points out that, under California law, a contract of more than seven years is not valid -- and the contract EMI held with the band was for nine years.

So why opt out? Perhaps this has something to do with it:
If you think the fact that we have sold in excess of 2 million records and have never been paid a penny is pretty unbelievable, well, so do we. And the fact that EMI informed us that not only aren't they going to pay us AT ALL but that we are still 1.4 million dollars in debt to them is even crazier. That the next record we make will be used to pay off that old supposed debt just makes you start wondering what is going on. Shouldn't a record company be able to turn a profit from selling that many records? Or, at the very least, break even? We think so.

The RIAA itself will be the subject of future research for me but this article is interesting to all who are in the entertainment business and wish to be fully compensated for the work we have done. 30 Seconds to Mars cited the De Havilland Law that states "no service contract in California is valid after seven years" This is great to know for all parties before signing a deal. The record companies seem to be experts at not compensating artist. Does the law where the record company is based take prescendent over where the artist are based? I am not aware if a similar law is in place in New York but what if a NY label signed a California band, does the De Havilland Law protect the band in the same way? The De Havilland Law is named after actress Olivia De Havilland after a successful lawsuit on her behalf which set the prescendent. It has been challenged but no definitive understanding of exactly the application to record deals has emerged because both sides are attempting to muddy the waters.



"In 1987, the record companies lobbied legislators to pass an amendment to the Labor Code Section 2855, which applies only to recording artists and allows record companies to sue recording artists for damages if the artists do not fulfill their original contract.
After seven years, this amendment is no longer relevant, according to Cappello, and artists have the legal right to terminate a recording contract without repercussions, he said."

It is ridicoulous for a record company to sell 2 million records by an artist and claim that they have lost money. It would be almost impossible. Without reviewing the entire contract between the band and record label, we don't know if they provided tour support. Marketing, distribution, recording cost, and advance should have all been more then covered with 2 million units sold. It is true that record companies are masters at manipulating the books to control artist and minimize what they need to pay to the artist. Joe Strummer form the Clash said it was a form of child abuse. Many artist sign deals at a young age and without proper representation. They have no real idea what they are signing and what the contract language means. George Michael ended up spending millions to be freed from his record deal. Strummer decided to "bore them out" because he didn't want to waste millions to be released form an unfair deal. He limited his work to film scores, producing, and performing the 1-2 songs per other artist albums or soundtracks that his contract allowed for and a few tours fronting the Pogues. When he was released he got back to music after signing a deal with Hellcat & Epitath Records. He selected them because of his managements experience with the label and the fact that Hellcat Founder Rancid's Tim Armstrong was a huge fan of Strummer's and he knew he would be treated well and fairly.



I believe artist should write into the language of their record deal that they have full rights to oversee all cost and review all accounting documents related to their business with the label. If the label is claiming to have spent $18 million on marketing for the band then they should need to produce detailed documents of where and how the money was spent. It would be wise for the artist to need to approve any spending on their behalf before it occurs. It will help keep the artist cost under control. Artist must act as an active participant in business decisions made involving their business! I know many artist don't like to think of their art as a business but it is! The artist who don't treat it as such usually end up broke and at the mercy of their record label.

Masnick, concluded his article with a very strong statement against the RIAA, that I felt was worth sharing. "So, at what point will the press and politicians stop buying the RIAA's claims that it's looking out for the musicians and trying to get them paid? The RIAA has always been in the business of not paying musicians."

In 2009, 30 Seconds to Mars and their record label settled their dispute and continue to work together. The exact terms and conditions of the settlement agreement remain unkown.


The next case I was drawn to is Courtney Love being sued by the parent company of her record label Vivendi Universal and her countersuit against the same label. This case has numerous similarities to the 30 Seconds to Mars case. The record company filed lawsuit because it claims that Love did not deliver the 5 albums that the contract called for. Love claims that the terms of the contract are unfair to artist, is an industry practice by record labels that operate under unfair contracts, terms, and work conditions.

According to ABC News, {"Labels, nevertheless, continue to intimidate artists who try to end contracts after seven years by suing them for lost profits, the attorney added. Cappello said this suit "will shake the very core of the way business is conducted in the music industry, and it will give countless musicians the financial and artistic freedom they do not currently enjoy."
"I'm one in a long line of artists who have tried to break free since the [Universal/PolyGram] merger," Love said. "Beck, Garbage, Sheryl Crow, and others have tried to leave or sue that company and they've all been shut down or threatened."
Crow's attorney, Jay Cooper, said, "Sheryl expressed some unhappiness but never threatened to sue, and eventually, we renegotiated the contract."}

Courtney Love's band Hole Celebrity Skin

 The De Havilland Law appears to be best used not to be freed from a record deal but to renegotiate the deal. That is what 30 Seconds to Mars did and that is what Sheryl Crow did. It appears the labels can be pressured into striking a more fair agreement but if an artist wants to be free to sign with a competitor label they will fight it until the bitter end.

Perhaps labels should be more fair in the contracts they sign an artist to and their business practices. Yes, the record industry and those who work for it have become enormously wealthy operating the way they have but it has always been unfair. Now artist and their representation are becoming aware and informed enough to fight back. These battles going on are reshaping the industry even if it takes a long time. I do not expect the industry to start being fair because a few artist have managed to renegotiate or get out of their deals. However, continued pressure, loss or revenue and artist simply starting their own labels may force them to do so in the future. If you are an artist reading this you have been warned to be very cautious in your business relationships within the entertainment industry. Hole: Malibu

The final case I wanted to discuss involves Joel Osteen and Lakewood Church. I enjoy listening to Joel's televised sermon's every week. They help focus my brain on the positive and it is often needed in these challenging times. This case is interesting because the two parties had signed a licensing agreement for use of the song Signaling Through The Flames. What has sparked the lawsuit is disagreement of when the agreement ended or will end.

Brenda Sapino Jeffreys writes that, "The plaintiffs allege in the complaint that the defendants entered into a “limited licensing agreement” to use “Signaling Through the Flames” on their website and in certain venues, but that agreement expired on Feb. 1, 2011, after one year, and the defendants did not renew it. Lakewood spokesman Donald Iloff writes, “The music in question is 1 minute of background music which Lakewood Church had a license to use. The plaintiff is apparently confused about the scope of the license, and are now demanding $3 million for uses that are authorized. We think this is unreasonable.” This appears to be the main issue because both parties agree that Lakewood did at some point have the proper licensing agreement for the song. Is it still in force or has it expired. Did one or both sides not fully understand the terms of the agreement. It appears clear there has not been an intentional  unauthorized use of the song. It seems that a fair agreement on compensation can be reached easily when there is a ruling on what the terms licensing agreement are.

The lesson in the above case and all of the cases is to fully understand the law, rights, & responsibilities. Hire quality experts to guide and approve any deal you are involved in. One of the best lessons I have heard from many legal experts over the years is that what a contract does not say can be more important then when the contract does say. If you are being recruited by a company for a record deal, film deal or any thing else and they are treating you well, being very kind to you, giving you gifts, taking you to expensive dinners, and telling you how much they love you. Understand that all those good feelings will not help you if you enter a dispute with the company. The only thing that will help you is to have handled your business like a true professional.
Joel Osteen "Don't Lose Your Joy"

Writing on these three cases made hear The Clash's Complete Control in my head while typing, so I decided to post it as the relevant record of the week. It is the Clash's response to their record label releasing their song "Remote Control" as the next single instead of the track the band felt was best and overall their feelings of mistreatment and manipulation by their record label and management. The song came to fruition when their manager Bernie Rhodes and Sex Pistols manager Malcom McLaren called the two bands together for a meeting and stated that they "Demand Complete Control". The meeting ended at that moment with both bands laughing hysterically as they stumbled out into the streets of London repeating the phrase "Complete Control" as the two bands headed off in different directions. The Clash's "Know Your Rights" may have been a relevant recording as well but I'll save it for another time.

Photo 1: Copyright@Sanderbaks.com
Mike Masnick's full article can be found here: http://www.techdirt.com/articles/20080820/0204472040.shtml
Hellcat Logo: Copyright@Hellcat Records
Photo 2: Copyright@JaredLeto
The full ABC News presentation on Courtney Love can be found here: http://abcnews.go.com/Entertainment/story?id=108872&page=1
Photo 3: Copyright@Courntey Love
Photo 4: Copyright@Joel Osteen
Brenda Sapino Jeffreys' full article can be found here: http://texaslawyer.typepad.com/texas_lawyer_blog/2011/08/recording-artists-and-record-company-owners-sue-lakewood-church-pastor-joel-osteen-and-co-pastor-vic.html