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Entertainment Law
University of Alabama School of Law
Douglas, Michael J.

Entertainment Law Outline Douglas Spring 2012

INTRODUCTION

I. THE ENTERTAINMENT INDUSTRY: A GLOBAL ENTERPRISE

A. Intro

B. International Piracy

C. International Legal Challenges

1. London Films v. Intercontinental Communications

i. Facts: British corporation brought copyright infringement action against New York corporation, which moved to dismiss.

ii. Rule: Mere fact that foreign laws are involved is not a sufficient reason to dismiss the case.

iii. Holding: District Court held that: (1) District Court had jurisdiction, and (2) dismissal on ground of forum non conveniens was not appropriate. The law of Britian and Chile was applied. Motion denied.

iv. Rationale: DC had jx of suit by British corporation against New York corporation alleging that latter violated former’s British copyright in certain motion pictures in Chile and other South American countries.

a. Need to apply foreign law is not in itself reason to dismiss or transfer a case on ground of forum non conveniens.

b. Dismissal, on ground of forum non conveniens, of suit by British corporation against New York corporation alleging that latter violated former’s British copyright in certain films in Chile and other South American countries was not appropriate, notwithstanding that case would likely involve construction of at least one, if not several, foreign laws, where there was no foreign forum in which D was subject to personal jurisdiction and neither P nor D demonstrated relative advantage and convenience that another forum would provide.

v. Note: Court points out that if they don’t take jurisdiction, there will be no one else to take jurisdiction. NY is the only place they can get personal jurisdiction over him. Will just apply British law in the USA.

2. Subafilms, Ltd. V. MGM-Pathe Communications Co.

i. Facts: Ds distributed a movie in home video version w/in and outside the US. As Ds were not authorized to distribute in the video version, P claimed damages.

ii. Issue: Whether the district court was correct in holding that, authorizations w/in the territorial boundaries of the US of acts that occur entirely abroad could be tried in the US?

iii. Holding: No, the DC was not correct in holding that authorizations w/in the territorial boundaries of the US of acts occurring outside the US could be tried there. Extraterritorial application of American law would be contrary to the Berne Convention. Authorizations of acts of infringement occurring outside the US are not recognizable as copyright violations.

PART I. INTELLECTUAL PROPERTY RIGHTS IN ENTERTAINMENT

II. COPYRIGHTS

A. Copyrightable Subject Matter

1. 3 Requirements:

i. Copyrightable subject matter

a. Literary works

b. Musical works dramatic works

c. Motion picture

d. Graphics

e. Sound recordings

f. Architectural works

ii. Fixation in a tangible medium of expression {fixation: means it can be seen, viewed, or communicated after the fact → some sort of tangible record}

a. Physical rendering of the work

b. Material object

c. Paper

d. Magnetic tape

e. Marble block

iii. Work must originate w/ the author

a. Copyright claimant must not have copied the work from someone else

b. The originality Requirement → relatively low

2. W/ Copyrights, need evidence of ownership and creation.

i. Registration creates prima facie evidence of ownership

a. Best way to enforce your rights in copyrights

3. Originality can have a dual meaning when it comes to derivative works

i. Courts ask – Whether the newcomer contributed anything new or novel to the first work?

B. Copyright Formalities

1. Copyright Notice, Deposit and Registration

i. Incentive to continue to apply notice to your work: Eliminates innocent infringer defense

ii. Registration is a prerequisite to fling suit

iii. Registration also creates prima facie evidence of ownership – best way to enforce CR rights

2. Duration of Copyright

i. CRs endure for a limited number of years depending on who is the author and when the work was first copyrighted

3. When does a Copyright protection attach?

i. Upon creation

ii. No registration, publication or other formality is needed

iii. A work is created when it is fixed in a copy in a tangible form

4. What is not protected by copyright?

i. Works that have not been fixed in a tangible form

ii. Titles, names, short phrases and slogans (ex: you’re fired)

iii. Symbols or designs; mere variations of typographic ornamentation, lettering or coloring, etc.

iv. Works created by the U.S. government

v. Works for which copyright has expired

vi. Concepts, procedures, methods, systems àare not typically protected under copyright, however, they may be protected under patent law.

vii. Works consisting entirely of information that are neutral or self-evident facts, containing no original authorship → white pages of telephone books, standard calendars etc.

5. Purpose of copyright is to foster the common good not to reward individuals – the progress of Science and useful Arts for the benefit of all citizens, not just creators.

6. What rights come with ownership? (Bundle of rights)

i. Right to Recording – gives you the right to record and prevent other people from copying

ii. **Derivative Works – allows someone to exploit other people’s copyright. If someone makes a derivative work, they only have the right to the derivation that they made.

a. Filing a derivative work is more difficult than filing an original work

b. Have to be very specific about how you changed the original work

c. Easy to see derivation if you change the medium but more difficult if it stays the same

d. Protectable only if it embodies original expression

e. Very important – most of what we are subjected to (cover song, movie based on book, etc.)

iii. Right to Distribute – if you’re not afforded the right to distribute, you have limited ways of making money

a. Should always get your client to sign a non-disclosure

iv. Right to Perform – allowed to profit from other people performing your copyrights

v. Right to Display

vi. Right to Digital Audio Transmission – probably makes the most $ for copyright owners

a. Sync license

b. Mechanical license

vii. 3 really important elements

a. Right to Terminate

(1) Under 1976 Act – person who has a copyright has it for their lifetime and 70 years following – after that, it becomes part of the public domain

(a) If a corporation owns the © – its 95 years after date of copyright

(2) There are issues with assignment of derivative works

(3) After a certain point, the copyright just goes into the public domain

(4) Termination of Transfers provision of Copyright Act of 1976

(a) Permit authors (or lawful heirs) to terminate assignments and licenses after a period of time, even if they had expressly agreed by contract not to do so

(b) You have five years to terminate starting from 35 years after the execution of e grant

(c) Must serve advance notice in writing

(d) Terminated grants revert to the authors except derivative work may continue to be utilized under the terms of the grant after its termination

(e) Further grant is valid only if it is made after the effective date of termination

(5) Renewal provisions of Copyright Act of 1909

(a) Invalidate agreements which purport to transfer rights to be exercised during the copyright renewal term

b. Right to Assign

(1) Copyright holder has right to assign their work

(2) The person who created it has the right to assign

(3) Unless its against the law, you can contract for it

(a) I.e. – can give someone the copyright for two years

c. Right to Perform

(1) If you’re profiting where you’re paying the music, you have to pay to play it

(2) ASCAP (public), BMI (public), SESAC (private)

(3) Consent decrees – rates set by the government to avoid antitrust issues

(4) They have the right to profit off of other people performing their stuff

(5) Harry Fox Agency – more karaoke – mechanical licenses – the song itself

(6) ASCAP, BMI (Broadcast Music, Inc) and SESAC (Society of European Stage Authors & Composers) are the three principal Performance Rights Organizations (PROs), although smaller societies exist. The royalty that is paid to the composer and publisher is determined by the method of assessment used by the PRO to gage the utilization of the music, there being no external metrics as in mechanical royalties or the reporting system used in the UK. Very basically, a PRO aggregates the royalties that are due to all of the composers/songwriters “who are its members” and each composer and publisher is paid royalties based on the assessed frequency of the music’s performance, post deductions of charges (which are many). The PROs are audited agencies. They “directly” pay the songwriter and the publisher their respective shares. (If part of the publisher’s share is retained by the songwriter, the publisher pays the songwriter that part of the publisher’s share).

(7) Typically, the PRO negotiates blanket licenses with radio stations, television networks and other “music users”, each of whom receives the right to perform any of the music in the repertoire of the PRO for a set sum of money.

(8) PROs use different types of surveys to determine the frequency of usage of a composition/song. ASCAP uses random sampling, SESAC utilizes cue sheets for TV performances and ‘digital pattern recognition’ for radio performances while BMI employs more scientific methods.

(9) In the United States only the composer and the publisher are paid performance royalties and not performing artists (digital rights being a different matter). Likewise, the record label, whose music is used in a performance, is not entitled to royalties in the US on the premise that performances lead sales of records.

(10) Where a performance has co-writers along with the composer/songwriter – as in a musical play – they will share the royalty.

viii. Moral Rights (p. 116)

a. Act recognizes 2 of them:

(1) Authorship

(2) Integrity – right to prevent alterations and distortions that would destroy the essence of the work

(a) i.e. – Turner Entertainment v. Huston – dispute over colorizing a black and white film

b. Right to disclosure

c. Right of Protection from Excessive Criticism – not covered in UCA

7. Elements of a copyright claim: (1) Own a copyright (2) that there was “copying” of a protectable expression by the defendant (Baxter v. MCA); or took another exclusive right of the plaintiff (bar playing music example)

i. Not going to have many copyright infringement cases that are the same – they are very fact-specific

C. Copyright Ownership and Transfer

1. Work for Hire

i. The Employer is considered the Author and owns the Copyright

ii. The employer is entitled to all rights and remedies of the author under copyright

iii. As if the employer created the work in the first place

iv. Two types of Works for Hire

a. (1) a work prepared by an employee w/in the scope of his or her employment (w/ or w/o a signed agreement) or

b. (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work…if the parties expressly agree in a writing a signed by them that the work shall be a work made for hire.

c. Standard to be Applied: Community for Creative Non-Violence v. Reid (look at this case) → court in this case look at common law to figure out the bases of employment as well as the basis of scope of employment. → take away from this case, is the basis in which entertainment lawyers need signed writings for “works for hire.”

v. Quintanilla v. Texas Television, Inc.

a. Facts: Selena and her band (Selena y Los Dinos) performed a live concert in February of 1993. Selena’s father, Abraham Quintanila, was the manager of the band. By agreement between the Quintanilla and Jay Sanchez, a director for Texas Television (KIII), the concert was recorded on videotape. Before the concert, Sanchez sent Quintanilla a note that said “Thank you for allowing us to videotape the concert tomorrow night…As per out agreement, we will use the video on the Doming Show and other news shows. In turn, we will provide you w/ a master copy…to use for promotional purposes”. Sanchez later sent Quintanilla copies of the videotape w/ a note saying that the footage would be used on the Domingo Show. After the concert, songwriters whose songs had been performed at the show obtained copyright registrations for their songs. Quintanilla also obtained a copyright registration for the videotape from the concert. After Selena died, KIII aired portions of the videotape on programs on certain programs. Quintanilla and the Songwriters brought this suit alleging copyright infringement and state law claims. Quintanilla claims that he is the exclusive owner of the copyright to the videotape and the KIII received only a limited nonexclusive license to use the concert footage on the Domingo Show. Quintanilla asserted state law claims that included breach of contract, misappropriation of name or likeness, fraud, deceptive trade practices, and negligent misrepresentation.

om the trustee in bankruptcy, it needed the cooperation of Snyder in order to acquire an interest in the 28-year renewal term. Accordingly, in 1940 Mills and Snyder entered into a written agreement defining their respective rights in the renewal of the copyright. In essence, Snyder assigned his entire interest in all renewals of the copyright to Mills in exchange for an advance royalty and Mills’ commitment to pay a cash royalty on sheet music and 50 percent of all net royalties that Mills received for mechanical reproductions. Mills obtained and registered the renewal copyright in 1951.” Mills licensed rights to make 400 recordings (different artists, different companies) and Snyder received his percentage. After his death, Snyder’s widow and son received the royalties. The 1976 Copyright Act gave the Snyders a “third” term of a sort (a 19-year extension) and the right to terminate agreements at the end of the current term. However, “a previously prepared derivative work” could “continue to be utilized after the termination ‘under the terms of the grant.’”

b. Issue: Whether an author’s termination of a publisher’s interest in a copyright also terminates the publisher’s contractual right to share in the royalties on such derivative works?

c. The Supreme Court decision summarized the problem in this way: “This is a controversy between a publisher, Mills Music, Inc. (Mills), and the heirs of an author, Ted Snyder (Snyder), over the division of royalty income that the sound recordings of the copyrighted song ‘Who’s Sorry Now’ have generated. The controversy is a direct outgrowth of the general revision of copyright law that Congress enacted in 1976. The 1976 Act gave Snyder’s heirs a statutory right to reacquire the copyright that Snyder had previously granted to Mills; however, it also provided that a ‘derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination.’ The sound recordings of the song, which have generated the royalty income in dispute, are derivative works of that kind. Thus, the dispute raises the question “The key that will unlock this statutory puzzle is an understanding of the phrase ‘under the terms of the grant’ as it is used in 304(c)(6)(A) — the so-called ‘derivative works exception’ to the ‘termination of transfer and licenses’ provisions found in 304(c)”.

d. The District Court noted that the statute did not make “any distinction between grantees who themselves make or own derivative works and those who license others to do so.” Mills fell into a gray area. The answer would make the difference as to whether Mills would continue to receive a percentage on future sales of recordings that it had licensed during its proprietorship of the song or whether the Snyders would get all of the royalties. Mills was certainly not an “author,” yet if it could be shown it was a “utilizer,” its rights in prior grants would be upheld. Being found a publisher would work against them (tantamount to being “other noncreative middlemen”). The Supreme Court determined that it was Snyder’s 1940 “grant” to Mills that Mills used to issue “grants” to record companies, and thus the subsequent licenses for 400-odd recordings were “under authority of the grant.”

2. Assignment Rights

i. Stewart v. Abend (US 1999)

a. Facts: Woolrich wrote murder mysteries. He sold (aka assigned) the rights to make a movie based on his story (aka a derivative work). The movie studio made a movie. Under the Copyright Act of 1909, W had a copyright on his work for 28 years. At that time he could apply for a renewal for another 28 years. B/c W could only sell what he currently owned, technically he only assigned the rights to the movie for 28 years, w/ a promise that when he renewed his copyright he would assign the rights for an additional 28 years. W died before the 28 years were up, and Abend bought the rights from W’s estate. When the 28 year mark came up, A renewed the copyright, but refused to assign it to the movie studio. When the studio licensed the movie to be shown on TV, A sued. A eventually settled. A few years later, the movie studio again licensed the movie to be shown (and released on video). A sued again. The movie studio was relying on the case of Rohauer v. Killiam Shows, Inc., which found that the owner of a copyright in a derivative work may continue using the existing derivative work according to the original grant even if the grant of rights in the pre-existing work lapsed.

b. PP: TC found for the movie studio. A appealed. Appellate Court reversed. Movie studio appealed.

c. Holding: The US Supreme Court reversed and found for Abend. It found that a copyright owner’s right to permit the creation of a derivative work passes to the heirs of the author of the work, who are not bound by the original author’s agreement to permit such use.

(1) Court noted that one of the reasons for the renewal clause was to allow an author of a work, who sold the rights very cheaply when the work was first published, to have a chance to renegotiate the assignment of rights in the future, when they might be worth a lot more. Basically, W’s promise was an unfulfilled contingency, which is not binding under the principles of contract law.

d. Note: under modern copyright law, a CR is valid for 70 years plus the life the author as does not need to be renewed. Therefore the holding in this case is moot (except for works produced prior to 1976)