Entertainment Law Matters

The Second Circuit has revived a New York publishing house’s New York based copyright infringement lawsuit against an online publisher.  With guidance from New York State’s highest court, the Second Circuit reversed a decision that would have required the publisher to bring suit in the state where the infringer uploaded the works, rather than the publisher’s home state.  The decision provides comfort to New York copyright holders who seek to stop digital piracy caused by out-of-state infringers by bringing suits in New York.  

Penguin Group (USA) Inc. (“Penguin”), one of the largest trade book publishers in the world, sued American Buddha for copyright infringement.  American Buddha is a not-for-profit corporation based in Arizona that maintains a website called the Ralph Nader Library (which despite its name is not affiliated with consumer advocate Ralph Nader).  The website “provides access to classical literature and other works.”

Penguin alleged that American Buddha published complete copies of four Penguin books online, including Oil! by Upton Sinclair among others, thereby infringing Penguin’s copyrights in those works.  American Buddha made the books freely available to its 50,000 members and the general public on its website. Continue reading »

- Righthaven’s Death-Ray lawsuit moves forward.  Last year, Las Vegas Review-Journal’s copyright enforcement partner, Righthaven LLC, sued Pak.org and its owner Azkar Choudhry for publishing a smaller version of the journal’s copyrighted image without authorization.  The graphic in question is an illustration of how the Vdara Hotel heats its swimming pool with reflected sun rays – and how the sun rays may have burned a tourist’s hair.  Choudhry moved to dismiss, arguing that his website never copied the image because it was using an “in-line link” to redirect visitors to the newspaper’s copy of the graphic and thus had not stored it on his computers.  He further argued the redirection was accomplished via an automated RSS feed, and was therefore not volitional.  Righthaven also moved to dismiss or strike defendants’ counterclaim.  The court denied both parties’ motions for early determination of the case.  The court held that the in-line linking issue could not be determined as a matter of law at this stage in the litigation.  The court also held that disputed issues of material fact precluded summary judgment on defendants’ fair use defense.  Notably, the court took a rather unorthodox approach in determining that the defendants’ use of the article was transformative: although the journal used the article for news-reporting, Righthaven’s use as the current copyright owner was “merely litigation driven.”  By contrast, defendants’ use of the article was to educate the public.  Whether the defendants’ website was commercial or non-commercial was an issue of material fact, on which the court ordered further discovery.

- Dish Network sued for serving free content.  Disney and Starz Entertainment are suing the second largest satellite TV provider for copyright infringement and breach of contract over a free content promotion that runs through January 2012. The plaintiffs claim Dish ignored their request to distribute movies only to premium subscribers. Disney further contends Dish’s actions undermine its “windowing” strategy – that is, to maximize profits from its movies by controlling the time and media through which viewers may access them.  Dish refuses to discontinue the promotion, which goes to its 14 million subscribers.  Among the movies listed in Disney’s complaint are box office hits Alice in Wonderland, Toy Story 3 and Up.

- Ke$ha in court over TikTok wristband.  Wimo Labs, a design and development company, manufactures glittery rubber wristbands to hold MP3 players. The trademark for the wristbands is TikTok, which bears some resemblance to Ke$ha’s 2009 platinum-selling song TiK ToK– enough so that Ke$sha sent Wimo a cease-and-desist letter to stop using it. Wimo responded with a lawsuitin Illinois federal court seeking a declaratory judgment that its TikTok does not infringe Ke$ha’s TikTok. In their letter to Wimo, Ke$ha’s lawyers characterized the wristband name as a “flagrant and conscious disregard” of the pop-singer’s rights.

- Gergana Miteva

It was only last week that we posted on the Ninth Circuit’s May 4th decision in Montz v. Pilgrim Films & Television — an important idea submission case holding that an implied-in-fact contract was not preempted by the Copyright Act. We wrote then that the preemption debate was sure to continue. We just didn’t realize how soon — and with a different result.  

In Forest Park Pictures v. Universal Television Network, Inc., a production company and two affiliated individual plaintiffs alleged they developed the characters, concepts, themes, and story lines for a TV series titled “Housecall.”  The show was to be based on the experiences of a doctor who relocates to Malibu to make housecalls on the rich and famous. Plaintiffs said they pitched the show to USA Network which rejected the idea. And so they were upset to find, four years later, that USA Network was distributing “Royal Pains”— starring Mark Feuerstein and Henry Winkler — about a doctor who relocates to the Hamptons to become a doctor to the stars.

In their case brought in federal court in New York, the plaintiffs advanced the usual idea submission claim: they said they had an implied contract with the network defendants to receive payment for the use of their idea. (It was not clear to us why the plaintiffs eschewed a copyright claim.) The defendants, like other studios and distributors before them, argued the alleged contract claim was superseded or “preempted” by the federal Copyright Act. (Section 301 of the Copyright Act of 1976 preempts state claims when the creative work is within the subject matter of copyright and the state law grants legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright.)

Not surprisingly, the plaintiffs asked the court to apply California law, which — as we noted in the “Ghost Hunters” decision — has been favorable to writers and agents claiming misappropriation of ideas unveiled in pitch meetings. But the district court said that whether a federal law preempts a state law claim is a federal question — a finding that meant federal law applied.

Citing Second Circuit preemption cases, the court next found that the claim to protect characters and story lines was within the subject matter of copyright. Moreover, the breach of an implied contract to be paid for the use of “ideas or materials” for a television series was ”equivalent to the exclusive rights protected by the copyright law.”  The  court dismissed the claim and with it, the lawsuit.

- Marc Handelman

There’s good news for corporate counsel at New York media and entertainment companies who practice without a New York law license. Our friends at MLRC MediaLawDaily are reporting that in-house lawyers practicing in New York without being admitted to the New York Bar now have an opportunity — under recently enacted New York State rules — to put things right with New York authorities without having to take a bar examination and otherwise go through bar admissions hoops. Continue reading »

- Katie Holmes Settles with Star Magazine. Katie Holmes has settled a $50 million defamation lawsuit she filed in March against Star Magazine – arising from the tabloid’s “KATIE DRUG SHOCKER” and “ADDICTION NIGHTMARE” headlines.  The magazine publicly apologized to Holmes on the cover of its latest issue and promised to make “a substantial donation” on her behalf to the Dizzy Feet Foundation, a charity dedicated to helping underprivileged children to become professional dancers. The actress has reportedly accepted the apology and expressed her satisfaction that the dispute was “resolved amicably.”

- Tolkien Estate Reportedly Will Permit Publication of Book Featuring Tolkien as Character. This short-lived legal battle began in late January when J.R.R. Tolkien’s Estate, administered by the writer’s son, sent a cease-and-desist letter to Steve Hillard, the self-published author of Mirkwood: A Novel About J.R.R. Tolkien.  The Estate accused Hillard of commercially exploiting Tolkien’s name and likeness and of “trivializ[ing]… the personality and reputation of the late professor.” The letter demanded that all copies of the book be destroyed.  Hillard responded by asking a Texas federal court  for a ruling that the book does not infringe on the Estate’s intellectual property rights. As described in the complaint, the book is “both a work of fiction and a critical analysis of the works of J.R.R. Tolkien” where the author plays a central role in a young woman’s quest to find her grandfather.  Hollywood Reporter reports that the settlement permits publication of the book — with a prominent disclaimer of any association with Tolkien’s Estate and publisher.

- NBA star sues Basketball Wives reality show. Miami Heat star Chris Bosh has filed an eleven-count federal complaint against his ex-wife, Allison Mathis, and Basketball Wives producer, Shed Media.  Among other things, the athlete alleges trademark dilution, misappropriation of his name and likeness, false endorsement, and public disclosure of private facts about his life.  Bosh says the show and his ex-wife are getting a free ride on his celebrity status and are robbing him of his “life right” to tell his own story. The reality series Basketball Wives, created by Shaquille O’Neal’s ex-wife, Shaunie O’Neal, depicts the lives of women who have been romantically involved with professional NBA players. 

- Trademark battle: Universal CityWalk v I-Walk Orlando. Universal City Studios, owner of trademarks “CityWalk”, “Universal CityWalk”, and “Universal CityWalk Orlando” is suing Unicorp USA, owner of “I-Walk” and “I-Walk Orlando” for trademark infringement, trademark dilution, and unfair competition — seeking injunctive relief and money damages. Universal complains that Florida-based Unicorp is using the trademarks to promote soon-to-be-constructed retail stores, restaurants and bars – all of which would be located approximately three miles from the Universal Orlando Resort. The plaintiffs fear the use of “I-Walk” and “I-Walk Orlando” marks would be likely to confuse and deceive consumers, and that Unicorp has intentionally employed “deceptively similar” trademarks in order to associate itself with plaintiff’s “high quality services” and to benefit from local goodwill established over eighteen years. Who knew walk-related marks would be so popular in a place where almost everyone drives?

- Gergana Miteva

 Pitch meetings are the red blood cells of the entertainment world, transmitting the ideas and concepts that help to build films, TV shows, plays and other creative work. But pitch meetings can also become the petri dishes where legal disputes grow. And how writers, agents, producers and studios handle scripts and treatments – and the ideas behind them — has been at the core of a long line of so-called idea submission lawsuits.  A recent Ninth Circuit decision seems certain to join the pantheon of notable idea submission cases. Continue reading »

A federal judge has dismissed a lawsuit alleging that Christie’s, Inc. (“Christie’s) botched an auction of a world-class collection of vintage wines.  The court held that the auction house owed no fiduciary duty to the collector beyond the terms of the consignment agreement the parties signed, and that the consignment agreement precluded the collector’s damages.  The decision is a cautionary tale to collectors, as auction houses are limiting by contract their fiduciary obligations as agent for the seller.

Plaintiff Christen Sveaas is a Norwegian businessman and one of the top wine collectors in the world.  In 1997, Sveaas hired Christie’s to auction off some of Sveaas’s wines in London; that auction was wildly successful, reaping over $11 million in sales.  In 2006, Sveaas approached Christie’s to host another auction on his behalf – this time to sell some of his very rare and expensive vintage wines from Burgundy and Bordeaux.  The parties discussed potential dates and venues for the auction, as well as the selection of wines to be included in the sale.  Christie’s initially proposed to hold the auction in September 2007, but the auction was delayed to November 3, 2007.  Sveaas claimed that Christie’s insisted that the sale be held in its new auction house in Los Angeles, even though that was not the best site for the auction.

On July 24, 2007, Christie’s and Sveaas entered into a consignment agreement (the “Agreement”) to sell the wines that Christie’s selected from Sveaas’s collection.  Under the Agreement, Christie’s had “complete discretion” over the manner in which the auction would be conducted.  The Agreement authorized (but did not require) Christie’s to take such action as it “deem[ed] reasonable to build interest in the Property prior to the sale.”  The Agreement also provided that “[i]n no event shall Christie’s be liable for the failure of any Property to be sold at [Christie’s] estimated or expected price or to reach the reserve price [the confidential minimum price below which the Property will not be sold].”  Finally, the Agreement provided that neither party was liable for “special, consequential or incidental damages.”

At auction, many of the wines did not sell or sold significantly below market value.  Sveaas claimed that Christie’s failed to promote the sale properly – among other things, it did not send out the auction catalogue to potential buyers on time, resulting in a low auction attendance.  Sveaas also claimed that Christie’s delayed the auction unnecessarily, holding it at the tail-end of a crowded auction season, and (unbeknownst to Sveaas) just days before another wine auction hosted by Christie’s in Geneva. 

In 2010, Sveaas sued Christie’s, seeking to recover the $5 million he claimed he lost from the auction.  His suit alleged three causes of action against Christie’s: (i) breach of fiduciary duty, (ii) breach of contract and (iii) breach of the implied covenant of good faith and fair dealing.   Christie’s moved to dismiss the complaint in its entirety, and on April 20, 2011, United States District Judge Laura Taylor Swain granted that motion.  Continue reading »

- Happy Days cast sues CBS.  Several cast members of the iconic sitcom filed a complaint in a Los Angeles state court against CBS seeking a cut of the network’s merchandising revenue from licensing the actors’ videos, images and voices for products ranging from slot machines to lunch boxes.  The plaintiffs accuse CBS of employing a “don’t ask, don’t pay” policy to their contractual obligation to share merchandising profits with the actors and of intentionally withholding financial information from them.  Reportedly, CBS admits it owes the actors a percentage from the merchandising proceeds, but disagrees about the amount.  The network’s tally comes out between $8,500 and $9,000 per actor for the last four years, while the cast members claim they are owed millions of dollars.

 - Contestants sued for revealing reality show outcome in court filing.  Producers of reality TV show Ultimate Women’s Challenge, about 16 female mixed martial arts fighters, sued the show’s contestants and their lawyers for revealing its ending in court documents.  The producers seek $1 million in damages from each defendant for misappropriation of trade secrets and $500,000 as liquidated damages from each contestant for breach of a confidentiality agreement each contestant executed before appearing on the show.  The leak appeared in earlier court filings by the contestants, seeking payment for their participation.  Producers claim the contestants breached their confidentiality agreements by divulging the winners in individual competitions as well as the ultimate show winner and thus “destroyed the commercial value” of the series.

- OK to publish entire copyrighted essay in court filings.  The Second Circuit has issued a “summary order” decision affirming a lower court ruling that it is “fair use” to publish copyrighted essays in a judicial proceeding.  In this case, the author of several unpublished essays claimed that the defendant infringed his copyrights by reproducing his entire compositions in court documents.  Applying the “fair use” doctrine, the court concluded that the defendant’s purpose in publishing the works was to win the lawsuit, rather than to profit commercially, and that the market for the essays was not harmed because it would be unlikely for potential readers to seek a copy from the court’s files. 

- Gergana Miteva