The Sports & Entertainment Law Playbook

For a while, it's seemed like the tides had turned on copyright trolls, as federal court judges appear to be more and more skeptical of the (lack of) merits to the concept and strategy behind mass copyright litigation. But a recent decision by a New Jersey federal court magistrate judge seems to send the opposite message—for copyright trolls not to give up, that the courthouse doors are still very much open. At least that's the message I inferred from the headline in the New Jersey Law Journal "Multiple John Doe Defendants Permitted in BitTorrent Case" (subscription required).

If the issues in this case and this latest decision weren't an ongoing focus of my practice, I probably wouldn't have taken the time to look up the case and download the opinion, which is what I did, and much to my surprise, the decision was anything but a windfall for plaintiff Malibu Media LLC, a California distributor of pornographic films. Indeed, the court went through a seemingly reasoned analysis of the legal questions involved when deciding a motion to quash a subpoena, in accordance with FRCP 45(c)(3). The primary issues the court addressed were whether joinder was proper, whether the information sought by the subpoena was relevant, and whether the plaintiff is entitled to pursue its claims for relief as stated in the lawsuit.

The court dealt with the first two issues methodically, and resolved them in favor of denying the motion to quash. When arriving at the third factor, however, the court did not engage in much, if any analysis. The court quoted a case cited in the motion to quash, and then proceeds to its conclusion:

To be clear, the Court certainly does not condone the use of this litigation, and any attendant threat of embarrassment, to coerce any defendant to settle. As noted above, the [court's prior order] requires plaintiff to ensure it has an adequate factual basis before seeking to file an Amended Complaint naming any proper defendant, and that the Court, by granting plaintiff’s request for expedited discovery, has not authorized plaintiff to rely solely on the subscriber’s association with the IP address to supply that basis.

It seemed like the court didn't give much thought to the final argument raised in the motion to quash, and so I went back to re-read from the beginning of the opinion, which is when it occurred to me that the motion had been filed pro se (i.e. by the John Doe defendant himself, rather than by an attorney). A bad idea.

Most attorneys (myself included) take cases like these on a fixed fee basis, usually for less than what the copyright trolls are offering to settle for. The attorneys on the plaintiffs' side know what they're doing. They're familiar with the process, having done it numerous times before, and they have their arguments, briefs, and motions already prepared and ready to file. On top of that, the statutory penalties for copyright infringement are obscene (no pun intended), up to $150,000 for willful infringement, plus attorney's fees. All of that adds up to a less than desirable situation for someone to attempt to represent themselves in court.

But I digress. Regardless of the fact that it's a bad idea to try to defend yourself in a copyright infringement lawsuit, I wonder whether the outcome would have been the same if the motion had been properly drafted and filed by an Internet law or copyright attorney. The bigger problem is this, however: This most recent decision appears to be one of the few that sides with the plaintiff–copyright trolls; it therefore could have a negative precedential effect on future motions to quash filed against copyright trolls. Fortunately, the court's decision is marked "not for publication," but seeing as how the New Jersey Law Journal wrote about it, and I found the decision at the U.S. Court's website in less than 60 seconds, I'm not confident that the decision won't have any lingering effect.

11917746183 Hammer Opinion Denying Mtq_malibu Media

Whether on the phone, by email, or at cocktail parties, people routinely ask me questions relating to the fair use doctrine. Indeed, fair use is one of the most misunderstood legal doctrines on the books. The reason it causes so many misunderstandings is that applying the doctrine's four-factor analysis will rarely, if ever, produce a clear answer as to whether the use in question is in fact fair use. Among the most common fair use misconceptions are that "it's okay to 'borrow' the protected material if it's for educational purposes," or "it's okay if the use is de minimis." (A fancy Latin word for 'small,' 'nominal,' or 'insignificant.')

One of the reasons for the latter misconception is only reinforced by last week's ruling by the Ninth Circuit Court of Appeals, in the case alleging that the critically acclaimed Broadway show Jersey Boys misappropriated a 7-second clip of the Ed Sullivan Show. Many folks will hear about the court's decision, or read about in the news, and will conclude (wrongfully so) that the reason the court found that the use of the TV show clip was okay was because it was only seven seconds long. Although the fact that the clip was indeed short, relative to the overall length of the show, the length of the borrowed material was just one of many factors that the court considered; moreover, although the court mentions that the clip was 7-seconds long six times in its 13-page opinion (PDF), the holding portion of the opinion says nothing about the length of the clip. That is telling (but probably only to those who are legally trained). A court's holding is the part of its decision that means something, or requires or prohibits some specific action. This was the Ninth Circuit's holding in the Jersey Boys' fair use case:

In the end, we are left with the following conclusion: [Jersey Boys'] use of the clip did not harm SOFA’s copyright in The Ed Sullivan Show, and society’s enjoyment of [the Broadway show] is enhanced with its inclusion. This case is a good example of why the “fair use” doctrine exists.

The bottom line is this: The penalties for copyright & trademark infringement can be substantial, even crippling. Don't ever assume that you can borrow someone else's material based on the fair use doctrine. Before you "borrow" something for your movie, song, advertisement, website, blog, photograph, etc., speak to an attorney who is familiar with the fair use doctrine.

Earlier: Camera Phones, Copyright Infringement & The Fair Use Doctrine

Photo credit: Flickr.com

Who knew that the word tweet wasn't even owned by Twitter? Apparently, since 2008, a little-known advertising agency named Twittad has owned the exclusive rights to what has become a household phrase.

Twitter has finally laid its hands on trademark rights to the word “tweet,” but the case provides yet another lesson in why companies have to nail down intellectual property rights early on.

This is a valuable lesson to be learned from what may at first seem funny or trivial. Although some might liken Twittad's registration of tweet to a variation of cybersquatting, the relevant standard here is bona fide use in commerce, which Twittad was able to demonstrate.

The Ninth Circuit Court of Appeals recently departed from the 30-year-old standard by which federal courts evaluate trademark infringement claims. The issue in that case, Network Automation, Inc. v. Advanced Sys. Concepts, Inc., No. 10-55840 (9th Cir. Mar. 8, 2011), was whether a company infringes on another's trademark by purchasing the competitor's registered name or mark to use to promote their own business or products via Internet search engines, namely Google's AdWords. As fellow New Jersey IP attorneys Lionel J. Frank and Richard A. Catalina Jr. noted in this law.com article yesterday, the largest federal appeals court reversed a trial court's decision granting an injunction to the company claiming infringement.

Here's a little background on the subject matter involved in the infringement claim. In the beginning of the world wide web, developers and code writers figured out early on that they could trick search engines into driving traffic to their sites by embedding their competitors' names and keywords in the metadata of their own websites. This practice may have been effective in the short run, but the search engines quickly figured out what was happening, and modified their search algorithms to ignore the metadata, which was easily manipulated, and to instead focus on the real (i.e., visible) content on webpages.

But when Google sells its AdWords advertisements, it effectively allows whatever company is the highest bidder to jump to the top of Google's search list whenever a websurfer searches for certain (purchased) key words. (For more on how Google AdWords works, see the Frank & Catalina article.)

What the latest appeals court decision does is place different emphases on the factors that courts use to determine whether any infringement has occurred:

Given the nature of the alleged infringement here, the most relevant factors to the analysis of the likelihood of confusion are: (1) the strength of the mark; (2) the evidence of actual confusion; (3) the type of goods and degree of care likely to be exercised by the purchaser; and (4) the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page.

Although the court's decision appears to draw a line in the sand that is more liberal than what's been the rule, it's probably too soon to call the proverbial floodgates open. First, this ruling is just from one circuit court of appeals; until the U.S. Supreme Court rules on the issue, one way or another, other circuits are free to distinguish (or even disregard) the Ninth Circuit's holding. Something else to keep in mind—this was not a trial on the issue of trademark infringement; the only issue before the Ninth Circuit was whether it was appropriate to grant a preliminary injunction, which places a higher burden on the aggrieved party than that in a full trial.

The Oscars are happening this weekend, so it's a good thing that I finally got around to seeing The Social Network (the one about how Facebook started), which is one of the best-picture nominees. What a great film. Great acting (Justin Timberlake notwithstanding). Great directing. Great cinematography. But bad depiction of what is called the discovery process, in pre-trial civil litigation. With all due respect, the writers did a great job of telling the storyline through the characters as they were purportedly being deposed; those depositions were a result of two lawsuits filed against Facebook's founder and CEO, Mark Zuckerberg. Despite the lack of realism in the depositions themselves, the overall storyline is quite realistic insofar as both lawsuits are settled, and there are no court trials.

Given the rising costs of litigation, and litigants' need for closure and certainty, among other things, about 98% of all civil cases don't go to trial. Many of these cases are settled, many are dismissed, for one reason or another, but no matter what happens to each of the cases that don't go trial, they are invariably disposed of because of evidence that comes to light during the discovery process. The discovery process is basically the time period starting after a lawsuit is filed, lasting until a certain date that the court sets prior to a trial. During this time, both sides exchange information and documents, and usually each side takes at least one deposition, which is akin to an out-of-court examination of a witness. Depositions are taken under oath, and usually recorded by a stenographer, or sometimes by video.

Although depositions are similar to trials to the extent that attorneys ask questions of witnesses, and the witnesses have to answer truthfully, that's about as far as the similarity goes. This is because depositions aren't really about winning your case per se; their purpose is to gather as much information as you can about the other side's case: What do they know? Who knows what? Why do they think they are going to win? Because the purpose of the deposition is to gather information, the deposing attorney's style and demeanor usually needs to be quite different than what you'd see on Boston Legal, Law & Order, or any other courtroom drama.

But there is one problem with learning how to take and defend depositions effectively. They don't teach it in law school, and the only way to learn how to do it, is to jump right in and try. Unfortunately, although having deposition experience helps an attorney to become comfortable with basic questioning techniques, it does nothing as far as teaching proper questioning techniques. Some attorneys are lucky enough to have a seasoned litigator take them under their wing, to teach them the ins and outs of depositions, but it's been my experience that they are the exception rather than the rule. If you don't have that opportunity, the only way to really learn how to be effective in depositions is by studying books, and taking special classes. Recently, I attended an intense, advanced deposition skills workshop, presented by the National Institute of Trial Advocacy, and despite having attended, taken, and defended countless depositions over the past few years, I was amazed at how much I learned.

The bottom line is this: Because 98% of civil cases are determined before trial, an attorney's knowledge and experience in preparing for, and taking and defending depositions is more critical now than ever. An attorney who is savvy in the deposition and discovery process can oftentimes mean the difference between leveraging a settlement and going to trial, or perhaps worse (or better, depending on which side you're on) having the case disposed of on summary judgment.

It's hard to say whether Zuckerberg's attorneys were deposition savvy or not, in The Social Network. It's probably best not to even think about it, though, because good or bad, the attorneys' roles in the film don't have any effect on the overall quality of the film. I hope it wins every category for which it was nominated.

First Amendment proponents are applauding yesterday's NJ Supreme Court decision, which dealt an apparent blow to privacy advocates by holding that the fact that a conviction was expunged does not negate its truth for the purposes of using it as a defense to defamation. As I explained here, defamation claims are not common because they are difficult to win. There are four elements of the claim, and even if you can prove all four elements, the defendant can still escape liability by showing that the allegedly defamatory statements were true. In attorney-speak, we say: truth is a complete, or absolute defense to defamation. That sounds pretty straight-forward, right? After all, doesn't everyone know the difference between the truth and a lie? As more than one of our recent U.S. Presidents can attest, sometimes truth isn't so black and white.

Expungement is the process of sealing the record of a criminal conviction, usually for first-time offenders. Expungement is not a constitutional right; it's created by statute, under state law. In fact, I am aware of only about a dozen states that allow it. And in each state that does allow it, different rules and requirements apply. Also, each state treats the effect of an expungement differently. For example, some states, like Washington, treat an expungement as though the crime never occurred. If you get an expungement in Washington State, state law gives you the right to tell anyone that you were not convicted of the crime in question. Similarly, for most purposes, the state of Ohio treats an expunged conviction as though it never happened, however, in some limited circumstances, the record of conviction may be later accessed by courts or law enforcement. Needless to say, not every crime is eligible to expungement, and not every convict is entitled to one. Generally speaking, serious crimes, violent crimes, and sex crimes cannot be expunged.

In the case decided yesterday by the NJ Supreme Court, the plaintiff (known only as G.D.) sued former state senator Bernard Kenny and the Hudson County Democratic Organization for defamation, based on their printing of campaign flyers stating that the plaintiff was a convicted drug dealer. G.D. was in fact convicted of drug possession back in 1993, and he served about 8 months in prison out of a five-year sentence. But G.D.'s conviction was expunged in 2006.

Justice Barry T. Albin delivered the court's opinion:

The relief provided by the expungement statute, however, does not include the wholesale rewriting of history. A person convicted of a first-time crime may petition for expungement of all records and information” relating to the conviction after the passage of ten years from the date of the conviction, payment of fine, satisfactory completion of probation or parole, or release from incarceration, whichever is later. (quoting N.J.S.A. 2C:52-2(a)). A court order of expungement does not result in the destruction of criminal records.

For anyone keeping score, Justice Albin is a democrat (McGreevey appointee); he also happens to be a former criminal law attorney, past president of the New Jersey Association of Criminal Defense Lawyers, and served on the court's Criminal Practice Committee from 1987 to 1992. He continued to say that:

Common sense tells us that an arrest or conviction may become general knowledge within a community and that people will not banish from their memories stored knowledge even if they become aware of an expungement order. And long before the entry of an expungement order, information about an arrest and conviction may be compiled by data aggregators and disseminated to companies interested in conducting background checks.

Although the court's ruling isn't likely to impact criminal law much, if even at all, it will serve as one more potential hurdle that a plaintiff must clear to successfully make a case for defamation.

Download pdf of the NJ Supreme Court's decision in G.D. v. Kenny, et al., No. A-85-09 (Jan. 31, 2011).

Apple says the iPhone changed everything. Be that as it may, garden variety cell phone–camera devices have been around about a decade longer than Apple's iconic iPhones, and conceptually speaking, these devices have had a greater impact on our at-large social habits, news, criminal justice system—and even our society—than Steve Jobs could ever dream of. Oftentimes camera phone technology is useful: to thwart criminals, document news or natural disasters in real time, or to preserve evidence for later use in court. But when a majority of people go through their everyday lives armed with cameras at their sides, modern technology sometimes leads to breaking the law, as Nick Bilton wrote in yesterday's New York Times: Phone Cameras May Raise New Copyright Questions.

I won't bother restating what Bilton already has (his article is good, and you should read it), but there are a few legal points that didn't make it into the article that relate to common questions people ask of me, so I thought it would be worthwhile to mention them here. Bilton's predicament started when he was snapping pictures of interior design books at a local bookstore, which he planned to later share with his own interior designer. As any conscientious American might do, Bilton wondered whether his act of photographing someone else's work could possibly be infringing on the authors' copyright(s).

Before we can discuss whether the activity constituted infringement, we have to know exactly what copyright infringement is. The copyright laws are federal, and are codified in Title 17 of the U.S. Code. Therein, copyright infringement is defined as the unauthorized reproduction, dissemination, or derivative use of another's copywrighted work. Pretty broad definition, right?

The penalties for copyright infringement include injunction (a court orders you to discontinue the infringing activity) (§ 502), and monetary penalties, which can be measured by the amount of profit you made from the other person's copyrighted material, or statutory damages, which range from $750 all the way to $30,000 (§ 504). The court also has the authority to award the copyright holder attorneys' fees, on top of damages (§ 505), and in some cases infringement can be criminal (§ 506).

Fortunately, there's a common exception to copyright infringement, known as the Fair Use Doctrine, which provides that it is not infringement to reproduce another's copyrighted material "for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research." (§ 107) The statute also sets forth a four-part analysis to help identify whether allegedly infringing activity is actually fair use:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The problem with this test (and with the Fair Use Doctrine in general) is that the analysis is almost entirely subjective; it doesn't give the ordinary person any clear answers as to whether the activity in question is infringement. In Bilton's article, he asked three notable copyright experts, all law professors, about whether his act of photographing pictures from a book qualified as fair use. He couldn't get a clear answer from any of them. Julie A. Ahrens, associate director of the Fair Use Project at Stanford Law School told Bilton: “The core issue here is that you are creating a copy of something rather than buying it. Is it morally incorrect? Maybe. But it entirely depends how much of the book you copy, and what you do with that copy, that would determine if it was illegal.”

The unfortunate reality is that even if you were concerned about your own liability for copyright infringement, and you went to a copyright attorney for advice, even that attorney might not be able to give you a definitive answer. Of course this is not always the case. And it doesn't mean that you should  avoid seeking the advice of a knowledgeable professional. Attorneys know how courts have interpreted specific language from the text of the laws, and oftentimes there are similar fact patterns that the attorney may know of, which have already played out in court. Regardless of the situation, if you're concerned about your own potential copyright infringement, with statutory penalties as high as $30,000, you're better off having a legal opinion than assuming you're in the clear.

For everyone who says that juries aren't giving out mega-verdicts anymore, here's your exception: Last week, a federal jury in Philadelphia gave a $5,000,000 early X'mas present to a couple law professors in a defamation suit.† (Jury's Verdict pdf file).

Outside of legal contexts, the term defamation gets thrown around a lot, and although many people know what it is, most non-lawyers do not know what it takes to win a defamation lawsuit. In reality, defamation suits aren't very common, because they are in fact difficult to win. Why? Because the plaintiff must prove all of these elements:

(1) the defendant made a false & defamatory statement (if the statement was printed it is libel, an oral statement would be slander);

(2) to a third party;

(3) knowledge that the statement was false (or in some cases, merely negligence about the statement's truthfulness); and

(4) damages, or special harm that was caused by the statement.‡

Since 1987, the two professors, David Rudovsky (Penn. Law) and Leonard Sosnov (Widener) were the authors of the treatise Pennsylvania Criminal Procedure: Law, Commentary & Forms, published by West, but after they got into a dispute with West over royalties and compensation, they withdrew from the project. See Complaint (pdf file). But after the authors withdrew, West went ahead and published an update (aka "pocket part") which is supposed to contain important changes and updates to the laws that are the book's subject matter. Also, West continued to list Rudovsky and Sosnov as the authors. The problem was (in addition to using the authors' names without their consent) that the update West published omitted material changes in the law, and basically made the purported authors look like imbeciles.

The authors sued the legal publishing giant for (1) false advertising, under the Lanham Act; (2) unauthorized use of name, under Pa. state law; and common law claims for (3) defamation; (4) invasion of privacy/appropriation of name; and (5) false light. The trial court ultimately dismissed the first 2 claims, but the jury rendered a verdict in the authors' favor on the defamation and invasion of privacy claims. It seems likely, however, given the enormous resources of West Publishing and its parent company is Thomson Reuters this case is probably headed to the Third Circuit Court of Appeals, where West will argue that the punitive damages award is grossly disproportionate to the compensatory damages.

†Credit: Erika Wayne, of The Legal Intelligencer first reported this story in her blog, which has additional case history and details.

‡ See Sheldon W. Halpern, The Law of Defamation, Privacy, Publicity, & Moral Right: Cases and Materials on Protection of Personality Interests 4th ed., 6 (JPM Books 2000).

Given the way in which sports—even collegiate sports—have become so heavily branded, merchandised, and televised, another area of law that routinely intersects sports is intellectual property—namely copyright, trademark, licensing, and the all-but-forgotten right-of-publicity. For example, the University of Alabama sued the artist who painted this picture commemorating the Tide's 2010 BCS National Championship. The artist, Daniel Moore, won summary judgment in the district court (pdf decision here), but the case is currently on appeal to the Eleventh Circuit.

And in 2005, fantasy sports league operator CBC Distribution filed suit against Major League Baseball Advanced Media (MLBAM, MLB's Internet division) after CBC was denied a new licensing agreement with the players' association giving it the rights to player profiles and statistics.

MLB argued that the league owned intellectual property rights in the players' right-of-publicity, which made it unlawful for fantasy leagues to profit from the identities or statistics of MLB players. In 49-page order granting summary judgment to the fantasy league, U.S. District Court Judge Mary Ann Medler said that even if the league did have intellectual property rights in the players' stats and likenesses, the First Amendment trumped the league's property interest, because the information that the fantasy leagues disseminate are facts. Facts, Medler, wrote, appear in newspapers everyday. Nobody can own them. (CBC v. MLBAM pdf file)

Paul Weiler's textbook Sports and the Law (see previous post) is nearly 1200 pages long, yet it devotes fewer than 100 pages to sports and IP law. In fact, in that single chapter of the book that addresses IP, Weiler tackles broadcast rights, copyright ownership, player publicity rights, trademarks, and group marketing of IP rights. By contrast, the book has three chapters on antitrust, two on labor relations, and even has a full chapter devoted to Title IX and intercollegiate sports. But because of how every sports franchise, conference, and league is continuously exploring how to increase the revenue earned from their branding and intellectual property, IP law, will nonetheless continue to impact the sports world for many years to come.

So what about entertainment law? I realize that I just devoted three entire posts to explain sports law, and even though this is the Sports & Entertainment Law Playbook, I haven't so much as mentioned entertainment law. Again, there is no such body of law per se, though there are so-called entertainment lawyers. I happen to be one of them. Like sports and the law, there are many different areas of law that intersect with the entertainment industry, although IP is probably the most prevalent. Artwork, sheet music, and sound recordings all need copyright and in some circumstances, trademark protection. Also, composers routinely license their scores and compositions to filmmakers and advertisers. This process inevitably involves attorneys. And just like professional athletes, artists, actors, and musicians work under contracts as well, and they also need competent legal counsel to represent their interests during negotiation. The record companies, opera houses, and concert promoters are certainly going to come to the table with the best attorneys that money can buy, so it behooves the artist to also come prepared.