Monthly Archives: January 2011

Bob Marley Estate Wins Unfair Competition Suit

All is not bad news for the estate of Bob Marley (you may recall they lost their suit against Island Records over whether the sound recordings were works made for hire).  They just won a $300,000 jury verdict in a §43(a) case against a Nevada company that used images of Bob Marley on t-shirts that were carried by such retailers as Wet Seal and Target.

The facts are relatively straightforward.  Bob Marley’s children formed Fifty-Six Hope Road Music (named after the street on which Marley lived in Jamaica) to exploit his legacy after Marley’s death in 1981.  Fifty-Six owns a federal trademark for BOB MARLEY and claims rights in Marley’s persona.  Fifty-Six licenses use of the Marley name and likeness through Zion Rootswear.  A Nevada company, A.V.E.L.A., obtained some photographs of Marley from photographer Roberto Rabanne who may or may not have had permission from Marley to commercially exploit them.  Regardless, Avela used the images on t-shirts, but never used the words MARLEY or BOB MARLEY as part of their designs (several retailers did use Marley’s name in advertising the t-shirts, but those acts could not be attributed to Avela, according to the district court).  Fifty-Six sued Avela in Nevada federal court alleging violations of its federal and common law trademark rights, their rights in Marley’s persona under Nevada’s rights of publicity statute, federal unfair competition, and interference with prospective economic advantage (really another form of unfair competition).

Avela moved for summary judgment on all counts.  Fifty-Six moved for partial summary judgment on their unfair competition claim.  The district court granted in part and denied in part Avela’s MSJ.

Nevada has a broad right of publicity statute that protects against the unauthorized use of a person’s rights of publicity in his or her name, voice, signature, photograph, or likeness.
Nev. Rev. Stat. § 597.770 et seq. The right of publicity “endures for a term consisting of
the life of the person and 50 years after his death, regardless of whether the person
commercially exploits the right during his lifetime.”  In order for the survivors of the celebrity to make claims under the Nevada statute, however, they must register their claim with the state and, importantly, must make such claim within six months of becoming aware of unauthorized use in Nevada or find any future claims waived.

The critical gating item under the Nevada statute, therefore, was when Fifty-Six became aware of unauthorized use in Nevada (i.e., unauthorized use outside the state does not trigger the six month tolling).  Because there were material issues of fact surrounding that point, the district court denied Avela’s MSJ on that count.

In granting Avela’s MSJ regarding Fifty-Six’ §1114 (federal) and common law trademark claims, the Court noted that Fifty-Six did not use photographs of Marley as “trademarks.” (i.e., as a designation of source or origin).  Citing both the Tiger Woods, ETW Corp. v. Jireh Publishing, Inc., 332 F.3d 915 (6th Cir. 2003), and Babe Ruth, Pirone v. MacMillan, Inc., 894 F.2d 579 (2d Cir. 1990), the district court found that trademark owners cannot assert rights in every photo ever taken of a celebrity.

The district court, however, denied Avela’s MSJ on the §43(a) [15 USC §1125(a)] federal unfair competition claim, even though they appear to be very similar.  In other words, while Fifty-Six could not bring a §1114 claim for infringement of its BOB MARLEY registered trademark based on the unauthorized use of photos of Marley (for the reasons provided above), Fifty-Six could bring a §1125(a) unfair competition claim based thereon.  The court cited the case of Downing v. Abercrombie & Fitch, 265 F.3d 994, 1000 (9th Cir. 2001), in which the retailer was sued for using the picture of a famous surfer without his permission.  In Downing, the Ninth Circuit adapted its test for trademark infringement set forth in AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979) (the “Sleekcraft factors”), indicating that for celebrity cases “the term ‘mark’ applies to the celebrity’s persona, the ‘strength’ of the mark refers to the level of recognition that the celebrity has among the segment of the public to whom the advertisement is directed, and the term ‘goods’ concerns the reasons for or source of the celebrity’s fame.”  The Ninth Circuit identified an 8 factor test:

1. the level of recognition that the plaintiff has among the segment of the society for whom the defendant’s product is intended;
2. the relatedness of the fame or success of the plaintiff to the defendant’s product;
3. the similarity of the likeness used by the defendant to the actual plaintiff;
4. evidence of actual confusion;
5. marketing channels used;
6. likely degree of purchaser care;
7. defendant’s intent on selecting the plaintiff; and
8. likelihood of expansion of the product lines.

Finding material issues of fact remained, the district court denied Avela’s MSJ as to this claim.

Ultimately, it was this claim on which the jury found for Fifty-Six.

The relevant documents are below.

Defendant Avela’s Motion for Summary Judgment
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Plaintiff Fifty-Six’ Response to Def. MSJ
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Plaintiff Fifty-Six’ Motion for Partial Summary Judgment
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Defendant Avela’s Response to Plaint. pMSJ
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Order Granting in Part and Denying in Party Defendant’s MSJ
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Jury Instructions on §43(a) Claim
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Jury Verdict
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P2P Litigation Not as Scalable as P2P Architecture

An interesting article touching on the enforcement of copyrights across P2P networks–timely given the subject of the last 2 posts.

The author argues that these massive John Doe suits, like the ones filed by DGW, are not scalable, primarily because of the insistence of courts to require severing the defendants and filing individual cases and the resulting clogging of the courts.  As she puts it, “litigation is not a scalable mechanism for dealing with the high volume of copyright disputes that arise from P2P file sharing; trying to make litigation scale by aggregating thousands of defendants in a single suit is efficient for plaintiffs, but the attendant costs for defendants and the justice system as a whole are unacceptably high. Including thousands of allegedly infringing files in a single § 512(c) takedown notice is a workable way of killing lots of birds with one stone when it comes to hosted content; including thousands of defendants in a single copyright infringement lawsuit is not analogously effective in the P2P context.”

Bridy, Annemarie, Is Online Copyright Enforcement Scalable? (January 13, 2011). Vanderbilt Journal of Entertainment & Technology Law, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1739970

File Sharing Class Action Suit Turns Nasty

The law firm Dunlap, Grubb & Weaver has fired back at Dmitriy Shirokov, the alleged illegal file sharer who recently filed a class action suit against DGW for their litigation tactics.  In a nutshell, DGW sent Shirokov a demand letter in May, 2010 claiming that Shirokov had illegally downloaded DGW-client’s film Far Cry. [FYI – the demand letter at issue is attached at the end of the Rule 11 Motion below.]  In “response” Shirokov hauled off and filed a 96-page complaint in December, alleging 25 separate causes of action on behalf of himself and a purported class who had likewise received demand letters.  Now DGW has filed a 12(b)(6) motion to dismiss the complaint and a Rule 11 motion to sanction Shirkov’s lawyers.  The complaint and DGW’s Rule 11 motion are below.

Complaint:
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Rule 11 Motion:
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File Sharing Leads to More Concert Goers (for Indie Artists)

An interesting new academic paper looks at the impact of file sharing on attendance at live concerts.  The authors’ general conclusions aren’t terribly shocking or surprising: “File-sharing may increase awareness of smaller, more obscure bands by making their music available from more sources and at a much lower cost (or for free in the case of illegal file-sharing). Broader awareness of these bands could increase demand for their concert performances. Similarly, while file-sharing may off set some album sales, for small bands this may be mitigated by increased sales resulting from a larger potential fan base, again due to increased awareness. On the other hand, file-sharing may have a relatively small impact on concert performances for large, “superstar” bands.  These bands were already well-known and their music was already widely played prior to file-sharing, so file-sharing may have had little impact on demand for their concerts. Similarly, for large bands we expect file-sharing to substantially displace album sales with little mitigating expansion in overall listenership.”

Statutory Damages Go to the Dogs (and Cats)

The Second Circuit has reaffirmed its interpretation of the Copyright Act that albums are “Compilations” under §101 of the Act and are subject to a single award of statutory damages under §504(c)(1). Bryant v. Media Right Productions, Inc., 09-cv-2600 (2nd Cir., April 27, 2010).

In Bryant, the plaintiffs issued 2 albums, Music for Dogs and Music for Cats (seriously).  They entered into a distribution deal with Media Rights, who in turn entered into a distribution deal with The Orchard in 2000.  At the time, The Orchard only distributed physical product, but began distributing digitally through online stores like iTunes in 2004.  Plaintiffs sued, arguing they hadn’t authorized digital sales or sales of singles.  In deciding that the albums at issue were compilations subject to one award of statutory damages, the Second Circuit focused on the fact that the plaintiffs had issued their songs in album-form, rather than issuing them as singles.   In a sense, the Second Circuit’s rule creates a choice for the artist or label upon the initial release of new songs: issue as singles or issue as albums, but, if you issue as albums, be prepared to collect only one award of statutory damages for all songs on that album that a defendant infringes.  My guess is this rule won’t change the business model of artists or labels, but I find the rule interesting nonetheless.

Enjoy the decision below:
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Movie Studio Sues Illegal Downloader in Minnesota

Virginia law firm of Dunlap, Grubb, & Weaver has teamed with local counsel (Rajkowski Hansmeier) to bring suit apparently against one of the 4,577 Does from theAchte/Neunte Boll Kino Beteilingungs GmbH & Co. v. Does 1 – 4,577, D. DC., 10-civ-453 (RMC) case that US District Judge Rosemary Collyer dismissed from her DC District Court on December 14, 2010.  The new suit, styled Achte/Neunte Boll Kino Beteilingungs GmbH & Co. v. Larson, D. Minn., 11-civ-138 (JRT), claims defendant Larson illegally downloaded a copy of Plaintiff’s movie Far Cry.  You can check out details of the movie here (I note that IMBD lists the estimated budget for the movie at $30,000,000 and gross receipts at €566,594, which is around $763,315 at today’s exchange rates).  Complaint is below.

It appears the case has been assigned to Judge John R. Tunheim, a Clinton-appointee with extensive experience in the Minnesota government.  Thankfully, this case didn’t go to Chief Judge Michael J. Davis of the infamous Capital Records Inc. v. Thomas-Rasset, 06-civ-1497 (MJD) (D. Minn.) file sharing case.

It will be interesting to see if this business model can survive having to file a series of local actions.  The costs-per-case should still be pretty low; $350 filing fee plus whatever you have to pay the investigative service to provide the URLs plus whatever it costs to translate the URL into an actual person to sue.  My guess is they are less than $1,000 upon filing, which means a typical RIAA-type settlement of $3,000 is still a decent recovery (assuming people don’t fight back).  If you have to share 60% with the client, the firm is only collecting $800 (assuming they get their $1,000 in costs out before distributing 60% of the remaining $2,000).  Multiplying $800 x 4,577 = $3,661,600.

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Fair Share of Radio Revenue

An interesting article about how to calculate the “fair share” copyright holders should receive from radio stations who play their music.  For those who don’t read math (and I count myself among them, despite the fact that I took game theory in grad school), the equations can be a bit daunting.  Also, as an academic exercise, there are some obvious holes in the theory; for example, the author assumes “a music radio station will keep a “play list” of songs that may contain as many as 6,000 different (but quite specific) songs in order to survive without repeating songs too frequently, and to have certain specific titles on hand should a special need arise.”  In fact, a typical Top 40 station will only play about 400 unique songs per month and less than 2,000 over the course of an entire year.

What the author does accurately capture is how much collective licensing moves the share of revenue from the content user to the content owner.  In other words, where copyright owners have to compete for broadcast time, their share of revenue (under this author’s model) decreases from a 50-50 split to something far less than that.  Or, as the author puts it, “by eliminating the market power that the two music suppliers would have should they act together, the Shapley methodology cuts their overall share in the surplus by anywhere between 0 and 1/6.”

The article can be found here: Watt, Richard, Fair Copyright Remuneration: The Case of Music Radio (January 9, 2011). Review of Economic Research on Copyright Issues, Vol. 7, No. 2, pp. 21-37, 2010. Available at SSRN: http://ssrn.com/abstract=1737449

Jimi Hendrix’ Legal Troubles Continue

Poor Jimi Hendrix.  He keeps getting caught up in legal battles.  The short version is that when Jimi died intestate, his father Al was his next of kin and took over the estate.  Al (and later the rest of Al’s family after he died) and Jimi’s brother Leon have been fighting over Jimi’s name and likeness for years, including a Washington state court action in the 1990s and a Western District of Washington suit in 2003 (Experience Hendrix, LLC v. The James Marshall Hendrix Foundation, 03 Civ. 3462 (W.D. Wash.)).  Importantly for our purposes, Jimi Hendrix died as a domiciliary of New York, which, as discussed below, does not recognize a posthumous right of publicity.

Along comes this company (Hendrixlicensing.com) in Nevada that sells t-shirts and such with Jimi Hendrix’ likeness.  Experience Hendrix sues under Washington’s Personality Rights Act (PRA), which purports to provide a posthumous right of publicity regardless of the domicile of the celebrity at the time of his or her death.  The defendants raise a constitutional challenge to the PRA and Judge Zilly requests briefing, which is provided below (interesting sidebar: Judge Zilly was the judge in the 2003 case between Experience Hendrix and the Hendrix Foundation.  There Judge Zilly awarded defendant Hendrix Foundation attorneys’ fees for prevailing under the same PRA statute at issue in this case.).

The defendants raise an interesting point: “By its express language, the WPRA reaches out of Washington, literally through space and time, to events that occurred in other jurisdictions decades prior to its enactment. The Court need only take Experiences’ arguments at face value to see this. Experience contends that a person domiciled in New York in 1970, who had no publicity rights when he died, suddenly has publicity rights and that they can be passed to an heir to be enforced in Washington—a state with no connection to, let alone jurisdiction over, Jimi Hendrix at the time of his death.”  As noted, New York has no posthumous right of publicity.  Legislative proposals have been made in the past, but never enacted.  (Ironically, New York Civil Rights Law Sections 50 and 51, which govern rights of publicity, were enacted in 1903, making New York’s the oldest statutorily-entitled publicity rights).  If New York decides not to have descendable publicity rights and a celebrity decides to live in New York precisely so that his/her children can not profit from his/her likeness after his/her death, then Washington’s PRA really does stretch beyond Washington’s borders.  Celebrities wishing to avoid this outcome would have to bequeath their publicity rights to a trust with instructions not to exercise those rights (lest the rights flow through intestate succession to the children).  This might work for celebrities living today, but what about those who died prior to the enactment of Washington’s PRA?

Briefs follow
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Supreme Court Briefs in Digital Download Antitrust Case

Well, I was able to get my hands on the Supreme Court briefs in the Starr v. Sony Music Entertainment digital download antitrust case.  You may recall that the Supreme’s denied cert. on Monday.  The Petition for Cert., provided below, is a rather dry (though well written) discussion of the proper standards to apply to a complaint seeking relief under the Sherman Act.
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The Plaintiffs-Respondents’ Response is more aggressive in tone, though I think overstates at least one factual basis on which they make their claim.  They argue that a statement made by Edgar Bronfman is evidence of collusive price-fixing, but I think they overplay that card.  Check out Paragraph 86 of the Second Amended Complaint (SAC), provided at the bottom of this post, and decide for yourself.  On the other hand, the comment by then EMI CEO Rob Glaser about side-letters is pretty damning.  Check out Paragraph 95 of the SAC.
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Most interesting (to me) is the highlighted language in the Response (see pp. 24-25).  Basically, the Plaintiffs-Respondents are arguing that the labels must have been conspiring because rational people would not respond to rampant piracy as the major labels did.  The Defendants-Petitioners Reply addresses this point with a rather stark admission (if you read between the lines) (check out highlighted language at pp. 8-9): this wasn’t a conspiracy, these guys were just dumb.
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Second Amendment Complaint Here: You Decide…
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Viacom v YouTube: Interesting Article on Implications for Secondary Liability

While wading through all of the briefs filed so far in the Viacom v. YouTube case, I came across an interesting article by Miguel Peguera entitled Secondary Liability for Copyright Infringement in the Web 2.0 Environment: Some Reflections on Viacom v. Youtube from PRIVATE LAW: RIGHTS, DUTIES & CONFLICTS, Sylvia M. Kierkegaard, ed., Patrick Kierkegaard, assoc. ed., pp. 423-435, 2010; Journal of International Commercial Law and Technology, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1716773

Once I get through all of the appeals briefs, I’ll have my own take on this very important appeal.