THE RECORD INDUSTRY IS DEALT A BLOW IN ITS ONGOING EFFORTS TO SUE ITS CUSTOMERS FOR ILLEGAL FILE SHARING:

You may recall that back in 2007 a jury in Minnesota determined that a woman named Jammie Thomas had violated the copyright law by offering to share 24 songs on the Kazaa file sharing service and socked Ms. Thomas with $220,000 in damages. The damages were awarded to the record companies whose songs had been improperly offered up on Kazaa. That jury award caused quite a stir at the time because of the size of the damages assessed – especially because the retail value of the songs was about $54. Later - in a rare and interesting twist – the Judge who presided over the trial threw out the damages award and granted Ms. Thomas a new trial. Why? Because the Judge determined that the record labels had to prove that some third parties had actually downloaded the copyrighted songs and that it wasn’t enough that Ms. Thomas had simply made the songs available for downloading. The Judge overturned the verdict because he didn’t instruct the jury on that distinction at the trial.

In the latest skirmish in the case, the record labels asked the Judge to reconsider his decisions to overturn the damages award and order a new trial. But the Judge refused and reiterated his belief that in order for the record labels to prevail they will have to show that Ms. Thomas did more than just make the copyrighted songs available for downloading. And thus the case will be headed back to court for a new trial in front of a new jury – unless the record labels decide to drop the case. That’s a possibility because last year the record labels publicly announced that they were stopping the filing of lawsuits against individual illegal file sharers and instead were going to focus on working with Internet Service Providers (ISPS) to stop illegal file sharing.

Why is this important?

It’s important because for several years the record labels and their trade association the Recording Industry Association of America (RIAA) used the $220,000 damages award against Jammie Thomas as a tool to scare people who were sharing files illegally. That was, of course, their prerogative. But if the damages award was made without a proper legal foundation, it should not stand. And if the record labels choose not to pursue a new trial against Ms. Thomas, that too will signal that the era of mass suits against end-users – at least as far as music is concerned – may be over.

DID YOU HEAR THE ONE ABOUT THE DOG THAT ALMOST BIT THE ADVERTISING AGENCY?

Remember Taco Bell’s “Yo quiero Taco Bell” ads from the late 90’s? It turns out that the idea of using a Chihuahua to help sell Taco Bell tacos etc. was originated by a Michigan-based marketing firm (Wrench LLC) that had originally pitched Taco Bell on the idea. But Taco Bell and Wrench never struck a deal and later Taco Bell started working with the well-known advertising agency TBWA Chiat/Day, Inc. on an ad campaign that ended up becoming the “Yo quiero Taco Bell” ad campaign.

Wrench subsequently sued Taco Bell and was awarded $42-million for copyright infringement and breach of contract. That in and of itself was something of a remarkable result not only because of the amount of the damages but because Taco Bell claimed that the idea Wrench had presented – using a “Psycho Chihuahua” dog character – had nothing to do with the “Yo quiero Taco Bell” dog character. Wrench nevertheless prevailed.

Then Taco Bell turned around and sued TBWA Chiat/Day, Inc. to cover the damages award on an indemnification theory. In other words, Taco Bell claimed it was the ad agency’s fault. But in a decision last month, the 9th Circuit Court of Appeals let the ad agency off the hook because TBWA Chiat/Day, Inc. wasn’t a party to the implied contract between Wrench and Taco Bell and because the agency wasn’t aware of Wrench’s “Psycho Chihuahua” character at the time it got involved. So..unless Taco Bell can prevail on appeal, it looks like it’s going to have to sell quite a few more tacos and enchiladas to cover the $42 million in damages.

For a link to one of the original Taco Bell ads, try
http://www.youtube.com/watch?v=M8sZ1DWsAHE

COPYRIGHTS: "A FAIR(Y) USE TALE"

Copyright law protects content such as books, songs, motion pictures, tv shows, plays, photographs, illustrations, paintings, sculptures, computer programs, etc. etc. One major exception to the rights owned by the copyright owner is the "Fair Use" doctrine. The Fair Use doctrine states that in certain limited circumstances that which would otherwise be considered an illegal copyright infringement - (copying a copyrighted work without permission) - is permissible. These limited circumstances include purposes such as criticism, news reporting, teaching and parody. Here is a link to a very clever 10 minute animated film which uses excerpts from many Disney films to illustrate some basic copyright principles and the Fair Use doctrine.
Although we don't necessarily agree with some of the arguments made by the filmmaker, we still believe this is a very entertaining and valuable introduction to copyright law and the Fair Use doctrine. [More about what we don't agree with in this film in our next blog entry].

Great Googly Moogly: Two Books About Google Reviewed

Two books that attempt to examine the inner-workings of Google and what Google means for our society have been recently published (Planet Google and What Would Google Do?). Here is a link to an L.A. Times review of the books written by Matthew Shaer.
Why is this important? In a relatively short period of time, Google has become not only the ubiquitous search engine that has virtually superseded all of its predecessors and competitors, it has also become a major advertising medium as well as a communications device (email, social networking and YouTube). How did all of that spawn so quickly from a business founded in a college dorm room and more importantly, what does the future of Google mean for how we conduct our businesses and our personal lives? These two books help to explore the answers to these questions. The L.A. Times book review can help you decide which of the two books you want to invest your time in if you don't want to read both.

Inauguration Day Thoughts

We know this is supposed to be a blog about intellectual property and entertainment law. And it certainly will be going forward. But today is such a historic day that we did not think we could let is pass without a few comments.

Without showing our age too quickly, let us just say that we have been watching U.S. elections and inaugurations with great interest since JFK’s election in 1960 and inauguration in 1961. This is the first inauguration I can remember, however, which I truly regret not attending in person – windchill factor and all. The sights, sounds and enthusiasm of the millions of people on the streets of Washington, D.C. these last several days has been inspiring at a time when we truly need inspiration. As the historian Doris Kearns Goodwin said recently, great change in America happens when a substantial number of people feel connected to the government and the American system rather than disconnected and inward-looking. She speculated that the number of people who have enthusiastically shown up in Washington to watch and participate in this transfer of power signals that kind of change in the mood of the American people. We submit that this last election was proof enough of that.

The question now becomes whether President Obama can marshal the expertise, dedication and energy that is necessary to fix what ails us as a country. There is no need for us to list the problems we are now facing – they have been discussed in print, on TV and radio, and in living rooms and bars across this country for months.
We believe there is little doubt that the new President is smart and dedicated and that he is in the process of assembling the kind of team that is necessary to help correct the problems we are currently facing. But will it work? No one knows for sure. But we are cautiously optimistic. We recall the speech JFK gave in May 1961 when he said that we would land a man on the moon and land him safely back on earth within 10 years. Everyone thought he had rocks in his head. But we did it because we applied ourselves to the task at hand. We think that is a good example of the Herculean effort that is now required. And just like we did not land a man on the moon overnight, we probably will not fight our way out of our current economic turmoil overnight. But we take some measure of comfort in knowing that we have new leadership that is genuinely dedicated to trying and has the skill and talent to make it happen if we all do our parts and keep our wits about us. To paraphrase what one of our clients said at lunch last week: “I didn’t vote for Obama and I have some questions about his economic policies. But anyone who wishes him ill and doesn’t want him to succeed doesn’t have the best interests of America at heart”. We could not agree more.

WHAT ARE INTELLECTUAL PROPERTY AND ENTERTAINMENT LAW?

It occurred to us that a good way to start the new year would be to provide a brief overview of intellectual property and entertainment law.

Intellectual property law has been described as the law pertaining to products of the intellect such as inventions (patents), creative content (copyrights), brand names (trademarks), and secret formulas and processes (trade secrets). A patent is a grant made by a government that confers upon the creator or owner of an invention the sole right to make, use, and sell that invention for a set period of time. There are three main types of patents: utility, design and plant. A copyright is the legal right to control the duplication, distribution display, performance and adaptation of an "original work of authorship" such as a song, book, screenplay, poster, t-shirt design, work of art or computer program. A trademark is a word or words, logo, sound, smell, color or product configuration – or any combination of them – that identifies and distinguishes one product or service from another. Examples of trademarks include EXXON, KODAK, YAHOO, GOOGLE, the Nike “swoosh” design, the color and shape of the Perrier water bottle, and the sound of the Yahoo yodel. A trade secret is a formula, practice, process, design, or compilation of information which is not generally known and which is subject to reasonable efforts to keep it secret and which provides the trade secret owner with an economic advantage over competitors. Examples of trade secrets are secret customer lists, the formula for Coca-Cola and KFC’s 11 secret herbs and spices.

Entertainment law is the law as it applies to everything from music to television to film to theatre to fine arts . It requires a combined knowledge of the entertainment business, contracts and intellectual property. It can involve everything from representing singers, songwriters and musicians to representing record labels, motion picture studios, television production companies, creators and producers of content for the Internet and mobile phones, and actors, actresses and directors. The crossover between intellectual property law and entertainment law occurs in many different circumstances. Examples include registering a band name as a trademark; registering the copyright in a film, tv show, screenplay, or song; obtaining a patent for the combination of mounting a video camera on a motion picture camera so that the director can watch the scenes being shot in real time; and treating as a trade secret the source, location and formulation of unusual and unique guitar strings that produce an extraordinary sound because they are treated with a special coating.

Stay tuned for future posts which will discuss interesting trends and developments in both intellectual property and entertainment law.

More New Year Thoughts

Right now - right here between the holidays and New Year's Eve - I'm thinking more about the new year than technical IP and entertainment law. We can get on with the IP and entertainment law tips next week. But as we look back at 2008 and look ahead to 2009, I remind myself of what JFK did when he said in 1961 that we’d put a man on the moon and land him safely back on earth within 10 years. People thought he had rocks in his head. Now....if we can just figure out how to apply the same type of American brainpower, drive and ingenuity to fixing the holes in our system……. In the meantime, since everyone needs a theme song, here is my vote for theme song of the week. Turn up your speakers!!