Cautionary Tale: When Contemplating Live Music at Your Venue, Get a License

Last summer, a small band performed at a bar called 69 Taps in Medina, Ohio, near Cleveland. That evening, the band covered a number of popular songs that the mostly middle-aged audience had grown up listening to. The bar had not asked for a set list, nor had the band provided one. The band took requests, playing hits like “Brown Eyed Girl” and “Freebird” for a small audience. The problem? “Freebird” and nine other songs that the band covered that evening are protected by Broadcast Music, Inc. (“BMI”), a performing rights organization tasked with collecting royalties, and 69 Taps did not have a license to present music from BMI’s catalog.

 The bar was slammed with a lawsuit brought by BMI and the copyright holders of each of the ten covered songs, demanding that 69 Taps pay significant damages and attorneys’ fees. While it may seem harsh to sue a small-time bar for copyright infringement over an amateur cover band’s decision to take requests on a summer evening, this lawsuit is a testament to the fact that BMI (one of the “big three” American performing rights organizations along with ASCAP and SESAC) takes aggressive steps to protect the intellectual property of its artists. Because 69 Taps did not ask for a set list or post one on its website, BMI could only have found out about the performance of the infringing works through its survey process—by actually having a representative in the audience to keep tabs on the performance. Any venue that presents live music, no matter how small or obscure, should expect to be “surveyed” by the three performing rights organizations. 

The solution to avoiding these lawsuits is for venues to purchase a “blanket license.” For example, if 69 Taps had purchased BMI’s blanket license, it would have had unfettered permission to present any of the roughly 8.5 million songs in BMI’s catalog for a flat annual fee. BMI allocates shares of the licensing fee to the artists whose work is represented in the venue’s programming, as determined by the same survey methodologies that discovered 69 Taps’s unlicensed performances. The cost of the blanket license is much less than the cost of defending just one copyright infringement lawsuit, so if your business plans on offering live music, the safe bet is to purchase blanket licenses from all three major performing rights organizations. Otherwise, businesses may have to “face the music.”

Frank Gulino is an associate attorney with Washington, DC business law firm Berenzweig Leonard. He can be reached at FGulino@BerenzweigLaw.com.

Stairway to the Courthouse: Part II

Led Zeppelin, one of the most popular bands of all time, has lost its first court battle in the lawsuit over iconic megahit “Stairway to Heaven,” brought by the estate of guitarist Randy California and profiled in one of our earlier blog posts.

The lawsuit was filed in the U.S. District Court for the Eastern District of Pennsylvania by the trust of the late Randy California, a founding member of the band Spirit, and Spirit bassist Mark Andes, and alleges copyright infringement as well as “Falsification of Rock N’ Roll History.”

In 1968 and ‘69, Spirit and Led Zeppelin performed several concerts together that featured one of Spirit’s instrumental tracks, called “Taurus.” The lawsuit states that Stairway’s iconic introduction was lifted directly from Taurus, which Led Zeppelin heard while opening for Spirit on those concerts, and seeks monetary damages as well as a writing credit for California.

The Led Zeppelin members named as defendants moved to dismiss the suit on the grounds that they are all British and have no ties to Pennsylvania. The District Court judge, however, denied the band’s motion and has allowed the lawsuit to proceed. Under the so-called “effects” test, a district court can exercise personal jurisdiction over a non-resident defendant if the plaintiff felt the brunt of the harm there or if the defendants allegedly aimed their conduct there. In this instance, the fact that Stairway to Heaven is one of the best-selling, most profitable musical works of all time suggests that Led Zeppelin’s conduct in marketing, selling, and performing the song was essentially aimed at Pennsylvania, among other places, so the judge ruled that the case will remain in the Eastern District of Pennsylvania.

The cause of action for “Falsification of Rock N’ Roll History” will almost certainly be invalidated because, frankly, it’s both non-existent and completely ridiculous, but the plaintiffs here have won the first procedural battle and successfully thwarted Led Zeppelin’s efforts to have the case tossed on jurisdictional grounds. If nothing else, this development serves to show that musicians and entertainers are uniquely vulnerable to the “effects” test, and can be hailed into court in far off places simply by having successfully marketed and sold records there. We will continue to monitor the case as the battle against the legendary rock band continues.

Frank Gulino is an award-winning composer and attorney with Berenzweig Leonard, LLP. He can be reached at FGulino@BerenzweigLaw.com.

Does Fictional Hacking Software Used by Catwoman in The Dark Knight Rises Infringe on a Real-Life Trademark?

The U.S. Court of Appeals for the 7th Circuit recently heard the appeal of a trademark infringement suit arising out of Christopher Nolan’s 2012 blockbuster film The Dark Knight Rises, the latest installment of films featuring Gotham City’s Caped Crusader known as Batman along with other characters from the DC Comics universe. One such character, Catwoman, is portrayed in The Dark Knight Rises as attempting to use sophisticated hacking software to erase evidence of her criminal past from every computer and database throughout the world. While the software depicted in the movie, referred to as “the clean slate,” is entirely fictional, one e-security company brought a trademark infringement suit against Warner Bros. Entertainment, Inc., alleging that sales of its real-life desktop restoration product called “Clean Slate” declined after audiences witnessed Catwoman using “the clean slate” for an improper purpose.

The case was dismissed by the District Court for the Northern District of Indiana, which was affirmed by the 7th Circuit on appeal. In trademark infringement suits, courts consider the likelihood of consumer confusion; that is, whether the improper use of a trademark would cause the reasonable consumer to believe that both the legitimate and infringing uses of the mark originated from the same producer. While the plaintiff did register “Clean Slate” as a trademark, the court in this case found that even “unusually gullible hypothetical consumers” could not reasonably believe that Warner Bros. was actually licensing a “diabolical hacking tool” in connection with The Dark Knight Rises. Additionally, the court noted that Warner Bros. doesn’t even manufacture or sell software, making it very unlikely that a consumer in this instance would identify real and fictional goods of the same name as having originated from the same source.

While the use of the fictional “clean slate” software may not have been sufficient to prevent the sly and wily Selina Kyle from assuming the Catwoman persona, it was more than enough to draw a trademark infringement suit directed at Warner Bros. Entertainment in what is just the most recent example of sophisticated parties bringing intellectual property issues to the forefront of entertainment law. Holy trademark, Batman!

Frank Gulino is an award-winning composer and attorney with Berenzweig Leonard, LLP. He can be reached at FGulino@BerenzweigLaw.com.

To Sue, or Not to Sue: Strategic Responses to Intellectual Property Infringement

You’ve finally done it.  Your book has gone to press, the reviews are good, and your friends tell everyone who will listen that they know a published author.  You’re hard at work on the sequel when you get a call from your publisher’s legal department.  Someone has published the first five chapters of your book on their blog without permission, and legal wants to talk with you about a response.  Your first instinct is to hit them hard, threaten a lawsuit and get the content taken down ASAP.  But not so fast.  Legal has a few points they want to talk over with you before rushing into anything.

IP enforcement strategy can require a far more delicate touch than many people appreciate.  It is true that infringement is against the law, and that content owners have the right to go after infringers in order to put a stop to the unauthorized use of the owners’ material.  The question is, should they?  Anti-infringement actions can turn into PR nightmares in a heartbeat, even when the acting parties are entirely justified in going after the infringing parties.  In 1989, for instance, The Walt Disney Company drew national scorn after they forced a number of Florida daycare facilities to remove murals depicting Disney characters from the daycares’ walls.  Despite pleas from Florida officials and the children of the daycare facilities, Disney held firm.  “Frankly,” one Disney spokesman said, “we can’t understand why something so routine to Disney is such a big deal to these day-care centers.”

Herein lies the problem.  Many companies, especially those with valuable IP assets, make it a habit to move against infringers as quickly as possible.  Studies show that a reputation for vigorous IP enforcement actually deters would-be infringers, and in the trademark sphere, courts have held that a consistent failure to police one’s marks can throw a wrench into later enforcement actions.  Yet in many cases, content owners may find that an enforcement action may be more harmful than helpful.  In fact, the Supreme Court itself has recognized that in some cases, acts of infringement may actually benefit an IP owner.  Such acts can bring additional hype to the infringed work, for instance, or expose it to a different fan base.  The global phenomenon of “scanlation,” for instance ‒ whereby readers scan in images of their favorite mangas, translate the text, and make the works available online ‒ has arguably resulted in creation of a global paying audience for content that otherwise might never have left Japan.

Several companies have also seen major upswings in their public image after changing their stances on IP enforcement.  After years of being maligned for using litigation tactics that many considered to be little more than bullying, the Recording Industry Association of America received praise in 2008 when it decided to stop mass suits against individuals, particularly college students, accused of music piracy in favor of practical strategies and targeted suits against large-scale infringers.  More recently, Tesla Motors saw a surge in both its share price and public approval rating after it announced that, moving forward, it would “not initiate patent lawsuits against anyone who, in good faith, wants to use [their] technology.”  Alexander C. Kaufman of the Huffington Post also points out that Tesla’s new IP strategy is likely to make its supercharger model the industry norm, saving Tesla the trouble of having to create a whole infrastructure for electric automobiles on its own.

Reevaluation of asset management strategy is valuable to consider, and this goes double in the context of IP. Emotions run high when parties try to restrict access to art and knowledge, and in a world that is more and more accepting of “remix culture,” content owners can and should be thinking about changing their standard procedure when it comes to outsiders’ unauthorized use of IP.  Even Disney ‒ long considered to be chief of the IP police ‒ appears to be changing its tune.  To sue, or not to sue?  After careful consideration of the costs and benefits with regard to a given case, the answer might surprise you.

Ryen Rasmus is an associate attorney practicing in the Entertainment and Music Industry and Business Law and Litigation Groups of Berenzweig Leonard, LLP.  He can be reached at RRasmus@BerenzweigLaw.com.

Stairway to the Courthouse?

Led Zeppelin’s 1971 hit “Stairway to Heaven” is one of the most popular and recognizable rock songs of all time. With a re-release of the original Led Zeppelin albums planned for this summer, however, a Philadelphia attorney has expressed his intention to bring a copyright infringement lawsuit against the band over the true origin of Stairway’s iconic introduction.

That attorney represents the trust of the late Randy California, formerly the guitarist of the band Spirit, as well as Spirit bassist Mark Andes. In 1968 and ‘69, Spirit and Led Zeppelin performed several concerts together that featured one of Spirit’s instrumental tracks, called “Taurus.” Allegations that Stairway’s introduction was lifted from “Taurus” are nothing new; in the mid-1990s, California, who wrote “Taurus,” publicly stated that “[Stairway] was a ripoff,” and that “[Led Zeppelin] made millions of bucks on it and never said ‘thank you.’” But the impending re-release of Led Zeppelin IV has certainly provided a financial incentive to bring the suit sooner than later.

In addition to being the best-selling piece of sheet music in rock history (having sold over 1 million copies since its release), Stairway is also one of the most profitable. As of 2008, Stairway to Heaven had earned at least $562 million, a number that has undoubtedly grown over the last few years and stands to grow even further if all goes as planned with the digitally remastered re-releases this summer.

The lawsuit will allege copyright infringement and will also try to enjoin the re-release unless Randy California is given a writing credit on the song. Although it may seem unusual to add a writer credit over 40 years after Stairway’s release, this is not unfamiliar territory for Led Zeppelin. Album listings for some of the band’s other big hits including “Whole Lotta Love,” “The Lemon Song,” and “Dazed and Confused” have all been amended to include the names of artists which courts ruled were the true originators of the music as a result of past lawsuits, showing Zeppelin’s history of settling cases like this.

Although there is a three-year statute of limitations for copyright infringement, Stairway to Heaven is such a profitable song that back royalties for just the last three years would be significant, not to mention potential for a spike in profits following the re-release. In the end of this tune, don’t be surprised if Led Zeppelin settles this case in an effort to avoid the Stairway to the Courthouse.

Frank Gulino is an award-winning composer and attorney with Berenzweig Leonard, LLP. He can be reached at FGulino@BerenzweigLaw.com.

Holy Dollar Signs! Legal Considerations for Comics Creators

Comics are big business.  AMC’s hit reality show Comic Book Men was recently renewed for a fourth season, and comics-related content continues to dominate both in theaters and on television.  Amazon just announced that it would be acquiring comiXology, the leading platform for digital comics, and both businesses and individuals are constantly finding new ways to use webcomics to market their models, provide information to customers, and monetize their art.  As the comic book renaissance continues to blossom, it is important for businesspeople to understand the many legal issues associated with the creation, use, and protection of comics-related content.

When it comes to developing new content, many creators start and end their legal consideration with thoughts of copyrighting and/or trademarking their work.  While it is important and productive to rope off one’s original creations, artists also have to be sure they do not tread on others’ IP rights by over-borrowing or trading on the goodwill engendered by other content producers.  In their excellent comic, Bound by Law, scholars at Duke University’s Center for the Study of the Public Domain explore some of the tough decisions creators face in the process of creating new content.  One step too far, and artists could end up like the Air Pirates, who came out owing Disney thousands of dollars after a successful lawsuit over the infamous Air Pirates Funnies, or the award-winning creators of Saga, who had a digital issue of their series pulled from certain web platforms due to their use of risqué imagery.  When individuals collaborate on comics-related projects ‒ as writers and artists often do ‒ or when companies hire outside parties to design their content, matters can get even more complicated, as borne out in the large-scale battles over characters from the Spawn and Superman universes.

Still more legal issues come into play when it comes time for creators to publish, post, or sell their content.  From the artist’s side, the terms of any printing or publishing contract should be carefully scrutinized to ensure that the creator is getting the best deal possible and not inadvertently signing away valuable rights.  Important items to watch out for include any assignments of character or merchandising rights, or improper characterization of content as “work for hire.”  From the buyer or licensee’s side, it is important to ensure that the creator is not trying to hold back valuable rights that would allow the creator to use or re-sell content in ways that would result in a loss of the benefit of the bargain.  In every case, a full and accurate description of both the content at issue and the applicable pricing schemes will cut down on confusion.

Once content is made available to the public, yet another set of issues comes into play.  Principal among these is the need to start policing the creator’s brand.  Comics ‒ especially webcomics ‒ lend themselves to easy appropriation, and creators can lose revenue when their content is inappropriately copied.  Creators also have to guard against their content’s being twisted in ways that might harm the creator’s brand; My Little Pony: Friendship is Magic is a far cry from My Little Pony: Fighting is Magic, and brand-conscious parties must be on constant guard against tarnishment.

The world of comics is primed to yield big financial rewards for savvy business people, but it is critical that both creators and content users stay on top of those legal issues that might crop up in comics-related transactions, and control for them as much as possible.

Ryen Rasmus is an associate attorney practicing in the Entertainment and Music Industry Law Group of Berenzweig Leonard, LLP.  He can be reached at RRasmus@BerenzweigLaw.com.

Are You Pirating Music Without Realizing It?

To most people, music piracy means illegally streaming or downloading a copyrighted work without payment to its creator. In other words, there is a realization that each and every illegal download of a song deprives the creator of payments he or she would have otherwise received through legitimate sales. This type of music piracy is obvious, because perpetrators are aware they’re getting something for nothing.

But what about lyrics? If you ever used the Internet to look up lyrics to a song, you might not have felt like you were depriving its writer of revenue. But the truth is that most websites featuring the lyrics of popular songs are not licensed by the works’ copyright holders, and therefore constitute duplication of protected works without permission or compensation. “But,” you ask, “so what? How am I taking money out of anyone’s pocket by looking up lyrics that are passively posted on the Internet?” While it’s true that the website rather than the consumer would be responsible for paying licensing fees to the artists, there’s a less obvious source of funds that might be going into the wrong pockets every time you take to the Web in search of lyrics: advertising revenue.

Some lyrics sites are heavily monetized by advertising, especially if they contain the lyrics of popular songs by frequently searched artists. With Web traffic metrics so easily accessible and certain demographics searching more frequently for some types of music than others, advertisers see popular lyrics websites a way to predictably reach a sizeable targeted audience. This can result in tremendous revenue for these otherwise passive websites that don’t actually sell any products or services. You can bet that, in an overwhelming majority of cases, the artists whose lyrics are featured won’t see a dime of the ad revenue made possible by such web traffic.

If that sounds like a surefire business venture to you, guess again. The National Music Publishers’ Association has already won judgments in excess of $7 million on behalf of its members against websites that feature unlicensed lyrics. There are a few websites out there that do post licensed lyrics, including LyricFind and MusiXmatch. Cut down on unwitting music piracy by seeking out a licensed source the next time you find yourself struggling to recall the lyrics to that song you just heard on the radio.

Frank Gulino is an award-winning composer and attorney with Berenzweig Leonard, LLP. He can be reached at FGulino@BerenzweigLaw.com.