Film and Television Law Blog

Contest Submission Concerns

Intellectual Property: With the success of shows like American Idol and other reality-TV-based talent competitions, contests encouraging writers, singers, songwriters and filmmakers to submit their ideas and material in order to be “discovered” have become more prevalent. While certainly, these contests have proven to be beneficial to more than a few individuals, they are not without their obstacles.

Those interested in entering any such contest, or otherwise submitting material pursuant to a request, should be cautious as to what rights they are ceding with that submission. Quite often, the terms of the contest could grant the contest-host all of the intellectual property rights relating to the submission. In addition to preventing the original artist from continuing to utilize or promote his work, it could also mean that the company hosting the contest could pursue the project without the submitter’s consent or participation.

For example, assume that there is a film festival that is hosting a contest for unknown, independent filmmakers to win an opportunity to have their films featured at the festival. More often than not, when entering such a contest, the artist submits his materials with a signed application. This application may very well have terms and conditions that are associated with it, and to which he may unknowingly agree by just signing the application. Even when there is not a written application, there are often terms and conditions that are deemed to be “accepted” when the applicant submits his materials. These contractual terms (even though they may not “look like” a contract) could include an assignment of intellectual property to the contest host. For example, such terms often say that the submitter has no right to have the materials returned to him, and that he may grant the host company all right to the work to exploit it as it wishes. In such event, the submitter may be deemed to have abandoned his rights, and the work will no longer remain his own. Importantly, the assignment may be deemed to have been made simply by submitting the work, and the rights may be granted even if the submitter does not win the contest.

This is why it is critical to have an attorney review any and all documents before signing them. It is also important to maintain copies of any document signed. Why? Because at a later time the submitter may want to pursue the original work, and he may not know whether or not he gave up his rights. If he had kept a copy of the agreement, he could at least have an attorney review it at a future time to determine the status of his rights.

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Music Licenses for Film Productions

Intellectual Property: Music Licensing: Similar to the copyright that a filmmaker may have in his work, composers and artists performing music also have copyrights in their works. Accordingly, a filmmaker cannot generally take a commercial CD that he has purchased and utilize songs as the film’s score. Rather, permission and/or licenses need to be provided for the music.

It is likely that a filmmaker will need to enter into both (1) a master use and (2) a synchronization license for each of the musical pieces that he utilizes in the production. A master use license is one which grants the licensee the right to use a specific recording in a production. A synchronization license (also referred to as a “synch license”) grants the right to use a song in timed relation to a visual work (e.g., film or television production). Accordingly, musical compositions used as background scores for film and television require a synchronization license (and generally, a corresponding synch fee). The essential difference is that the synchronization license attaches to the underlying composition, whereas the master use license relates to the actual recording. In other words, if the filmmaker simply wants a song in the background and does not care if it is a particular artist’s version of that song, he may be able to have another artist (perhaps an unknown) perform a cover of that song.

Use of the song itself requires a synchronization license. It is the use of the actual sound recording by a specific artist that requires a master use license. Assuming that the filmmaker hires an unknown artist to perform the song, the filmmaker may be able to obtain the master use rights from the unknown artist far more cheaply than obtaining the rights to a popular artist’s master recording.

“Music clearance” is often referenced as the process of determining what permission is needed to make use of a piece of music. This is normally done by ascertaining the owner(s) of the music; contacting the owner(s); negotiating an appropriate license; and entering into a written agreement regarding the same. As discussed, permission (in this case in the form of music clearance) is required if the filmmaker plans to use music for any of the exclusive rights granted to a copyright owner (i.e. copy, distribute, make derivative work, perform or display). Incorporating music into a production will arguably fall into all of these categories.

Music clearances are generally negotiated by an attorney. The license fee that is requested of the copyright owner can range quite a bit and depending on various factors (i.e., owner(s), popularity of the work or the specific use being requested). In certain cases, it can be quite costly. Nevertheless, it is extremely important to obtain these rights, preferably sooner rather than later. In the event that rights to certain music cannot be obtained, it is generally easier to switch out the music earlier in the production process rather than after the fact.

Comments/Questions: ljm@gdnlaw.com

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Use of Copyright Material in Background Scene: Gottlieb Development, LLC v. Paramount Pictures, Corp.: Fair Use Prevails, but Provides a Reminder of the Importance of Pre-Production Clearance

Intellectual Property: In Gottlieb Development LLC v. Paramount Pictures, Corp., 2008 WL 8396360 (S.D.N.Y. 2008), the Federal Court for the Southern District of New York recently decided a case involving the use as a background prop of a pinball machine, in the movie What Women Want. As described by the Court, the scene at issue involved stars of the film, Mel Gibson and Helen Hunt, “brainstorm[ing] with other employees to develop these ideas for marketing certain consumer products to women. At various points during the scene, . . . a pinball machine - the “Silver Slugger” - appears in the background.” The Silver Slugger machine is distributed by the plaintiff and was apparently used in the film without its approval.

The Court denied the plaintiff’s claims for copyright and trademark infringement for use of the pinball machine in the background. In large part, both of these claims were dismissed on the rationale that the use was de minimus (only utilized minimally). The Court noted that the machine was only shown in the background; was never the focus; did not serve as a central part to any of the plot line; and was only present in a three-and-a-half minute scene out of a film running over two hours.

Although the film production company prevailed in this case, the fact that it was litigated at all emphasizes the importance of having an attorney conduct a final clearance review of a production before the work is distributed, published or sold. Such a review can help identify copyright infringement, branding concerns, trademark infringement and music clearances all of which generally need to be addressed before promoting or distributing a production. At the very least, such a review can be helpful in troubleshooting any potential issues and help identify legal risks sooner rather than later. Furthermore, it is important to keep in mind that other production companies, distributors and/or networks could condition a sale on an assurance that the originating company obtained all rights free and clear from the claims of any third parties. By preparing ahead of time, production companies can help prevent possible infringement actions, as well as increase the production’s viability of being picked up by third parties.

Comments/Questions: ljm@gdnlaw.com

© 2009 Nissenbaum Law Group, LLC

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New York Enacts the Piracy Protection Act

Intellectual Property: Effective as of December 2008, New York has a new law directed at curtailing “multimedia” privacy, and is specifically aimed at preventing music and movie pirating.

The new law strengthens and enhances New York’s laws that relate to recording entertainment productions. Specifically, the law makes the recording of a motion picture or live theater production a first, second and third degree crime, depending upon the wrongdoer’s intent in recording the work. Specifically, the act becomes a second degree crime if the recording is done “for financial profit or commercial purposes;” where the person has been previously convicted of violating the Piracy Protection Act in the past five years; or where the recording constitutes a substantial portion of the performance.

Moreover, the use of a recording device in a theater becomes a first degree crime if the wrongdoer if he commits the second degree crime and has been previously convicted of a second degree violation of the law within the past ten years. A first degree violation is considered to be a felony.

Notably, however, to have committed a third degree violation of the Piracy Protection Act, the law is very broadly construed. For instance, it does not appear to matter the quantity of the performance that is recorded. Rather, the mere use of a recording device in a theater is enough to trigger a violation of the law. Moreover, a “theater” for the law’s purposes is very broadly defined so as to include concert halls, theaters and auditoriums for various types of performances. There is, however, an exception built into the law for student performances.

Comments/Questions: ljm@gdnlaw.com

© 2009 Nissenbaum Law Group, LLC

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Film Production Company Avoids Copyright Infringement Suit on Basis of Statute of Limitations

Intellectual Property: State and Federal law provides various remedies for parties who have been wronged by another. However, depending upon the nature of that claim, the injured party only has a limited time period in which to assert his claim. These deadlines, set by the law, are commonly referred to as “statute of limitations.” The statute of limitations for a copyright infringement claim is generally three years. A potential plaintiff’s claim often revolves around when the claim originally accrued that determines whether or not his lawsuit was timely filed.

This was addressed in a recent Southern District of New York case, Ortiz v. Guitian Brothers, Inc., et al., 2008 WL 4449314. The Ortiz case was derived from a film production company engaging an artist, Mr. Ortiz, to create the musical score for the motion picture. When Mr. Ortiz later claimed that the film production company infringed his copyright in incorporating that score into the movie and not paying him royalties, he sued for copyright infringement.

In copyright cases, the statute of limitations generally begins to run when the plaintiff knows or should have reason to know of a potential infringement. Courts make a distinction in evaluating this time period, though, when copyright ownership is at issue. In other words, if the party alleged to have infringed upon the work is claiming that it owns the work, such a claim changes the evaluation of the statute of limitations.

In Ortiz, the defendant-film production company defended the lawsuit by arguing that (a) they did not engage in copyright infringement and (b) the claim was also time-barred by the statute of limitations. The film production company included copyright notices on the DVD which arguably asserted a claim in the copyright to the sound recording. In addition, the defendant-film production company also filed for and received a US Copyright registration for the film. In this regard, the production company claimed that the copyright in and to the musical score for the film was incorporated within this filing. Without addressing this question, the Court determined that such a copyright notice and filing was clear evidence of the film production company’s assertion of a claim of ownership over the score. In fact, the Court noted that since Mr. Ortiz authored the work “with the knowledge that it was going to be used in the Motion picture, he should reasonably have anticipated that [the film production company] would seek to copyright the Motion Picture prior to or in conjunction with marketing and distributing it and, in the exercise of reasonable diligence, discovered [the film production company’s copyright] registration.”

In other words, the Court determined that (a) the plaintiff needed to exercise due diligence in learning of a copyright registration that would have asserted an ownership claim and (b) by making such a filing, the film production company did so assert its ownership so as to start the running of the statute of limitations. “As ‘[c]opyright ownership claims accure swhen (sic) a plaintiff knows or has reason to know of the injury upon which the claim is premised, . . . [a]n express assertion of sole authorship or ownership will start the copyright statute of limitations running.” (citations omitted).

Accordingly, Mr. Ortiz’s claim was dismissed because the Court determined that the claim accrued upon the film production company’s assertion of ownership, which was more than three years prior to Mr. Ortiz’s institution of the lawsuit. This case underscores the importance of evaluating potential infringement claims in a timely manner, and undertaking enforcement action as quickly as possible. Moreover, the case points out another benefit to making an appropriate copyright filing: based on the Ortiz decision, film production companies should be sure to promptly file copyright registrations as they can effectively be deemed to put potential plaintiffs on notice of the company’s assertion of ownership and therefore start the statute of limitations clock. In other words, the sooner the film production company files the registration, the sooner it can argue that the statute of limitations started, therefore helping to preclude a future claim.

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Contracting to Address Joint Copyright Issues

Intellectual Property Law: Joint Copyright Ownership: As I previously discussed on this Blog, in A Work for Hire Agreement: A Critical Tool for Production Companies, work for hire agreements are a necessary aspect of the relationship between film production companies and their freelancers. As I alluded, the risk is that the freelance contributor could be deemed a joint copyright holder.

The law generally provides that all contributors to a work may be able to claim rights as a joint copyright holder. Importantly, this is based on creation of the work alone, and is separate and apart from copyright registration. Essentially, all contributors, including not only freelance contractors, but also a production company’s producers, sound technicians, photographers, etc., could arguably claim that they are joint copyright holders to the final product. The problem? The law generally provides that a joint copyright holder can act independently. This means that one joint copyright holder can contract, license, distribute or otherwise conduct business relating to the work separate and apart, and without permission from the other copyright holders to the work. This greatly impacts the other owner’s ability to control the work. For instance, a production company may devise a project that it wants to market as an art-driven, independent film. However, its joint copyright holder decides to instead exploit the film through “pop culture” in a manner that is contrary to the production company’s ideologies. As a joint copyright holder, that individual or entity can exploit their work in any way they deem suitable, and without the other’s permission. The fact that it is contrary to the production company’s original plan for the project or otherwise goes against its beliefs is irrelevant. From a common law perspective, either owner may act independently. One of the only limitations is a mandated sharing of profits. Though, notably the law provides that this is generally to be an even split.

The good news is there is an easy way to avoid this: utilize proper contracts. First, the fallback position should generally be that all contributors to a work enter into an agreement whereby they are assigning all of their rights to the production company, and acknowledge that all of their contributions are as a “work-for-hire.” In those rare situations where the company nevertheless wants to provide someone with rights as a joint copyright holder, it should contract to explicitly define what each of their respective rights are. By contract the parties can limit the rights that the law otherwise provides. For instance, the production company may want to limit the contributor’s ability to sell or otherwise contract or conduct business relating to the work without the company’s permission. Moreover, the company may want to establish a different split of profits rather than the default 50/50. It is critical that companies consult an attorney to draft an enforceable agreement to protect its rights and suit its particular goals.

Comments/Questions: ljm@gdnlaw.com
© 2008 Nissenbaum Law Group, LLC

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A “Poor-Man’s Copyright” is a Poor Solution for Copyright Protection

Commentary: Beware the “poor man’s copyright.” It is nothing more than an urban legend that if an artist mails himself a copy of a song, story or some other artistic expression that he created, he will be preserving his copyright in it. That procedure is generally insufficient to protect the original creator’s rights.

Instead, the “poor man’s copyright” is useful solely in that it can help establish when the work was created for purposes of proving that it is protected as a common law copyright. While this could help to establish the ownership and creation date (if that is challenged in a later dispute), it is insufficient to maximize the right to recover damages; for that, one would need to have filed a statutory copyright..

In other words, if someone does not register their work as a statutory copyright with the United States Copyright Office, they may still be entitled to a common law copyright. However, without the Federal registration of a statutory copyright, the amount of damages they can collect will be severely restricted.

What is the difference between a common law and a statutory copyright? Essentially, as soon as an expression is recorded in a tangible form (i.e. written on paper, recorded on film, etc.), there is a common law right in and to the copyright of that expression. This does grant the artist the above-referenced exclusive rights as a copyright owner. Unfortunately, this generally provides him with rights without a remedy. The main concern underlying copyright ownership is preventing someone else’s unauthorized usage. Unfortunately, a common law copyright owner cannot generally go to court to sue for copyright infringement unless and until they have a registered copyright. This means that the work is actually registered with the Library of Congress’s U.S. Copyright Office.

However it is not generally recommended that an owner simply wait until an infringement occurs to register his work as it severely limits his rights. We strongly recommend that all works be registered with the Copyright Office at the earliest possible point. This is because there are added rights and protections that inure to a registered copyright holder. These specifically include an ability to obtain statutory damages and recoup attorneys’ fees. However, an owner can only avail themselves of these protections in a dispute if the work was registered when the alleged infringement occurred.

For instance, if a company obtains the script of a film from another company and then produces the film utilizing that script without permission, it has arguably infringed on the rights of the company owning the script. The creation of a film from a script is a derivative work. Since only the copyright holder may create a derivative work without permission, this is problematic. If the script was not registered for copyright infringement when the film was produced, the script owner will generally only be able to recoup damages from lost profits. This can be very difficult to prove and/or end up being minimal. For instance, the film that the infringing company made may not have been profitable. Accordingly, there might be little damages at stake, even though the violation may have been blatant.

On the other hand, if the company had a registered copyright for the script, it could then have the ability to instead obtain statutory damages rather than be limited to lost profits. In addition, with the prior registration, the company may be able to recoup the attorneys’ fees it expends in connection with the prosecution of its infringement case. This can be the difference between the case being a viable lawsuit or not, at least from a cost-benefit standpoint.

The best practice is therefore to obtain a statutory copyright registration prior to any release, promotion or other distribution of a work so that it can be protected before anyone has the opportunity to infringe on the work.

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© 2008 Nissenbaum Law Group, LLC

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Newly Enacted Law Removes Maximum Price Restriction on Sales of Admission Tickets to Entertainment Facilities

New Jersey Legislation: The New Jersey legislature recently enacted a statute which removes the maximum price limitation on sales of tickets for admission to various places of entertainment. Under the law, a “place of entertainment” is defined as any privately or publicly owned and operated entertainment facility, such as a theatre, stadium, museum, arena, racetrack or other place where performances, concerts, exhibits, games or contests are held.

Prior to the passage of the law, individuals were restricted from reselling tickets for admission to places of entertainment in excess of 20% of the ticket price or $3.00, whichever was greater, plus lawful taxes. Registered ticket brokers and season ticket holders were allowed to resell tickets at a premium, but only up to 50% of the price they paid to acquire the ticket, plus lawful taxes. The newly enacted law lifts all caps on the price for the resale or purchase of a ticket sold by a person other than a registered ticket broker, as long as the sale is made through an Internet website. The law also removes the prior statutory provision requiring that the face of each ticket include language indicating the maximum premium at which that ticket may be resold.

The legislative intent behind the law is to level the playing field for New Jersey citizens seeking to dispose of extra tickets that would otherwise remain unused, thus allowing for the public to lawfully sell tickets on eBay, Craigslist and other similar websites. The effect, however, will likely be to open, or re-open, a large area of commerce for professional “scalpers” or other professional bona fide online ticket resellers. Indeed, it may very well result in professional ticket resellers buying up so many blocks of tickets that the average member of the public will have trouble obtaining them directly from the box office where the performance is being held. On the positive side, however, the legislature noted that the previous price restrictions that were in place prior to the passage of this law put New Jersey residents at an unfair disadvantage when competing with sellers from other states who are not restricted by price caps on tickets resold via the Internet. This law would presumably help overcome that disadvantage.

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Stolen Ideas Often Result in Limited Remedies

Commentary: Imagine the following scenario: you develop a great idea for a television show and submit it to a network for consideration. They reject the proposal. But, a few months later you see an advertisement for a new show that looks a lot like the show that you had pitched. “Looks like a duck, quacks like a duck…,” right? Unfortunately, even if the show follows the precise outline of your pitch, such use may not be deemed to be intellectual property infringement.

The law does not generally allow individuals to protect ideas. However, it does have certain modes for protecting aspects of intellectual property: copyright allows the protection of the actual expression of an idea (the written script, the actual photograph, etc.); trademark law enables the general protection of a business and product or service names, branding and logo; and patent law will sometimes protect a general concept, however this is generally limited to technical aspects or utilitarian concepts. The best way to protect an “idea” is to generally engage in a combination attack. Essentially, the idea may be able to be protected through the different protectable aspects of the project through intellectual property filings.

In order to protect the over-arching “idea,” protection must be contracted for. Again, the law itself does not provide an over-arching protection for an idea itself. If an idea is openly shared, someone else can separately develop it. It is not a good practice to share ideas unless and until the person or entity with whom they are sharing it promises to keep the ideas confidential and to not use or exploit the idea themselves. This type of contract is generally called a non-disclosure agreement (NDA) or confidentiality agreement. Executing this agreement, might arguably provide recourse against the party to whom the idea was revealed, assuming they then utilized it in violation of their signed, written agreement. Whereas the idea-holder may not be able to sue for infringement, he may have the ability to sue for breach of contract and either stop the infringer from proceeding with the idea and/or obtain damages from their wrongful use.

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Independent Filmmakers Increasingly Utilizing Self-Distribution Model

Commentary: In recent years, the marketplace for independent films has become increasingly overcrowded. Several prominent distribution houses for independent films have been forced to sell or close and currently, the general thought is that there are simply too many films for too few theatres. As a result, independent filmmakers have seen it become more and more difficult to obtain conventional movie deals for their films.

For many independent filmmakers, the do-it-yourself model of distribution has become an increasingly attractive option. Although some are forced to go it alone because they have no other viable alternative, for others who do have options under the old model, self distribution can still be the more attractive approach. For example, distribution houses typically require that the filmmaker sign over most of the rights to their film in exchange for small cash advances, and often, they do not expend the funds necessary to sufficiently market the film to the general public. The do-it-yourself model not only allows filmmakers to retain the rights to their films, but it also enables them to retain control over where the film is distributed. It can also enable the filmmaker to exert more artistic control with regard to how the film is marketed, so that the distributor is no longer at the helm. Moreover, it allows the filmmaker to be proactive rather than simply waiting to find a deal.

Nonetheless, there is certainly a downside to self-distribution. In order to take on distribution without the help of a prominent distribution house, independent filmmakers must have a solid understanding of the marketplace. In addition, self-distribution requires the filmmaker to have access to the necessary capital. For example, there can be a huge expense involved in opening a film in major movie markets; filmmakers must cope with the hassle of collecting money from exhibitors; and they must handle the detailed logistics involved in booking a film. To be sure, self-distribution involves an enormous amount of work. But if the filmmaker is willing to put the time in, that work has the ability to reap substantial rewards.

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