The Intersection of IP and Bankruptcy
April 26, 2013
8:00am – 12:00pm
Barbieri Moot Courtroom
Topics Being Presented Are:
Intersections of IP and Bankruptcy
Larry Ream, Senior Partner, Schwabe, Williamson & Wyatt
Virginia Nicholson, Associate Attorney, Schwabe, Williamson & Wyatt
Trademark Law – “A Year in Review”
Sarah J. Rhoades, Attorney, Michael J. Sherwood, P.C.
Ethics – Conflicts of Interest
Milt G. Rowland, OF Counsel, Foster Pepper PLLC
$60 if paid by April 24th
$70 at registration
FREE for law students
Approved for 2 General CLE credits & 1 Ethics CLE credit
Eli Marchbanks, 2L
Imagine you’re a musician in Seattle, WA. Imagine that you write a song and it’s a massive hit with the local underground grungy/indie scene. A representative from a major record label approaches you with an offer. The offer is a recording contract that requires you to, over the next 12 months, write and record no less than 10 and no more than 12 songs, and give the record label control of their copyrights. In return the record label will give you access to their state-of-the-art studio, a producer, and a salary, all against the future royalties of the album you’ll make….will you do it? After all, you don’t know if you’re music will appeal to the mainstream; or you may be a one-hit-wonder and won’t write another popular song ever again. What you’re giving up, the copyrights to your contracted work, may end up being worthless. Or maybe they won’t. Maybe the album will be a national sensation and have over a million downloads on iTunes in its first six months. The point is that when unknown musicians sign a recording contract, there is no way to know the value of the copyrights they are giving up. The drafters of the Copyright Act of 1976 (which went into effect in 1978) considered this dilemma.
The Copyright Act of 1976 provides artists/authors with a “termination right.” This right re-vests a copyright to its original author 35 years after it was contracted away. So in our above example, if you signed the recording contract, you could rest easy knowing that if the album is a lasting hit you can regain its copyrights in 35 years. However, there is another provision to the Copyright Act which has been hiding in plain sight. A provision which, for the last 35 years, has been plotting its take-over like Emperor Palpatine planned his conquering of the galaxy. This is the Work Made for Hire provision.
Under the Work Made for Hire provision, the entity which employed the author is viewed as the “author” in who the copyright originally vested. Therefore, the “employee” who physically created the copyrighted work was never legally considered its “author.” If they were never the author, then nothing can “re-vest” in them; because it was never vested in the first place. This framework means that the classification of a work, whether it’s classified as a Work Made for Hire, is crucial. So the big question is: What is a Work Made for Hire?
The precedent case on differentiating between a Work Made for Hire and a work which was independently contracted is Community for Creative Non-Violence et al v. Reid. In this case the Supreme Court defined twelve factors that tip the classification one way or the other. The factors are (1) the skill required, (2) the source of the instrumentalities and tools, (3) the location of the work, (4) the duration of the relationship between the parties, (5) whether the hiring party has the right to assign additional projects to the hired party, (6) the extent of the hired party’s discretion over when and how long to work, (7) the method of payment, (8) the hired party’s role in hiring and paying assistants, (9) whether the work is part of the regular business of the hiring party, (10) whether the hiring party is in business, (11) the provision of employee benefits, and (12) the tax treatment of the hired party. As one can see, these factors are almost all vague and will have valid arguments either way. In our hypothetical: when you recorded your album did you use your own instrument? Did you record in the record company’s studio? Did you have a time-frame? Have you produced albums with them in the past? All of these factors and many more, will be important in litigation.
What is most interesting in this issue, is Community for Creative Non-Violence et al. v. Reid was decided in 1989; 11 years after the 1978 Copyright Act went in effect. Today it is still unclear what exactly a “Work Made for Hire” is, but before the Supreme Court issued factors it was even more-so. It’s interesting to think about all the intellectual property that was obtained through contract since 1978. This time-frame includes the personal computer revolution. Will code used in Microsoft and Apple products which was written in 1978 revert back to the original code-writer this year? If it’s a possibility you can bet the attorneys of those Empires are preparing for litigation with the “rebel-scum.”
Paul Dec, 3L
In just the last year, Jeremy Lin and Tim Tebow have gone from professional benchwarmers to household names among families around the world. Their popularity has been bolstered in part by their play in their respective sporting arenas, but also because of the media attention to aspects of their lifestyle away from sports. Tebow, on top of his unorthodox style of play, is recognized as a public representation of Christianity in the sports world. Thoughts of Tebow conjure images of the quarterback kneeling on the sideline praying for the finishing touches to the comeback victories that helped him become famous. Jeremy Lin entered games as an unknown in the basketball world, but became a sensation with his reckless, yet productive play and the news that he was living on a friend’s couch. No single image captured Lin’s fame, but the collective, well, “Linsanity” that captivated the New York Knicks and their fans made Lin the most talked about athlete for a month. How many other athletes can we expect to trademark the monikers and icons society places on them? What or who paved the way for athletes seeking trademarks to capitalize on their fame? Other than money, what benefit do athletes hope to gain by obtaining trademarks for their names and popular representations?
Using athletes to sell products is not a new concept in American advertising. As far back as the 1930’s athletes have been used to advertise the benefits of eating Wheaties. Athletes have an important place in the hearts of American youth as beloved icons and among their parents as positive role models for showing success through hard work and dedication. But the idea of athletes acquiring trademarks for their own likenesses and nicknames does not have the same history. Becoming more commonplace in the 21st century contrasted to the 20th, examples of athletes trading on their fame are few and far between. One such example would be Bo Jackson, the infamous two-sport athlete who played in both the National Football League and Major League Baseball. Bo used his name to sell sporting goods, including the “Bo Ball,” and was the subject of numerous Nike commercials in the “Bo Knows” advertising campaign. Fast forward to the present and the list of athletes obtaining trademarks related to their fame or even their actual names is growing rapidly. Up and comers such as Anthony Davis, Robert Griffin III, Austin Rivers, and Bryce Harper have already acquired trademarks relating to famous utterances or their nicknames. Established athletes like Kobe Bryant, Tiger Woods, Michael Jordan, and Wayne Gretzky have also jumped on the trademark bandwagon with similar types of marks. It’s unclear whether Bo Jackson paved the way for the trademark craze, but it’s obvious that an athlete using their fame to sell products is not a new concept. What remains to be seen is what athletes intend to do with all these trademarks.
Many athletes have the capital to invest in startup businesses, but relatively few have the vast wealth required to open the kinds of businesses that match up with their imaginations. Obtaining a trademark relating to their fame is a good start, but turning that trademark into a valuable marketing effort is significantly more difficult when athletes are also trying to maintain fame in their respective sports. Is it best to leave trademarks like Jordan brand basketball shoes to the large corporations and simply allow athletes to receive royalties from marks trading on their fame and likenesses? Or is the next logical step the Tim Tebow Sporting Goods Company, selling t-shirts with the signature “tebowing” pose at twenty dollars each? It’s hard to say, but it seems for now that licensing the use of trademarks to major corporations so they can sell trademarked products makes more sense for athletes trying to develop their brand. Without taking that step, it seems unlikely that athletes will benefit from obtaining trademarks without an established marketing arm to support them. Even if an athlete’s intentions in acquiring the mark is unrelated to profit, the athlete would still need a strong marketing arm to promote the brand for the athlete’s benefit in goodwill. In time, we will have a better understanding of what athletes really hope to gain from acquiring these trademarks as the explosion of these types of registrants will soon demonstrate what they intend to do with the marks they have acquired. For now, it’s time to sit back and watch the “Linsanity” continue.
Trae Reichert, 2L
It seems as though the holiday season begins earlier and earlier each year. By the time the Halloween candy is all gone, we are knee deep in Holiday commercials. And before Thanksgiving even begins, radio stations have already started their twenty-four hour a day, nothing but holiday music campaign. However, those cheerful holiday tunes that accompany those commercials and play on the radio certainly must come with a price.
When thinking about music and copyright law, it would be no surprise that the most copied form of music is holiday music. It seems that each artist has their own holiday album and each give their own variations on those classic holiday tunes. One of the biggest ways to cash in in the music industry is to write a catchy Christmas tune that will not only be played by the original artist year after year, but licensed to other artists for their interpretation of the song.
Which songs are protected and which songs are not? These holiday songs are a perfect example of what qualifies as copyrighted protectable material and what is considered public domain. Those in the public domain are songs that we are free to produce using the original lyrics and melody. These typically are old, traditional songs that many times do not have an identified author. This also includes songs that were created in the US before 1923. An example of these would be the song “Silent Night” or “Jingle Bells.” These are songs with a fixed melody and lyrics that modern artists recreate without having to worry about infringing on any protected rights. However, this is not absolute. It is most likely that an artist creates their own original written musical accompaniment to go along with these traditional songs. If another artist were to copy the same written sheet music, possible infringement may occur. Likewise, the use of the actual recording is subject to protection if it has been fixed in some tangible medium. So, Christina Aguilera may be able to create her own version of “Silent Night” as long as she is not copying the same written music as Nat King Cole. Target can also use the song “Silent Night” in their commercials, but they may not use the Christina version of the song without her permission.
There still leaves plenty of commonly recreated songs that are not in the public domain. Many holiday songs which we take for granted are in fact protected by copyright. Some are more recent and obvious such as Mariah Carey’s “All I want for Christmas.” This song was written in 1994 and already has been recreated by multiple artists including Michael Buble, CeeLo Green, Justin Bieber and My Chemical Romance, just to name a few. There are others we may think lie in public domain because of their traditional sound and common use, but are protected nonetheless. These include songs like “Rudolph the Red Nosed Reindeer” written by Johnny Marks, the most recognizable version of the song being performed by Gene Autry in 1949, hitting number 1 on the charts. Another song being “White Christmas” written by Irving Berlin in 1940 for the motion picture “Holiday Inn” in which Bing Crosby gives his famous performance and later recorded the song, making another number 1 hit.
The Copyright Act of 1976 grants certain exclusive rights to the copyright owners of these recordings including reproduction rights, distribution rights, the right to create adaptations including derivative works, and performance and display rights. http://copyright.cornell.edu gives the breakdown of the length of copyright protection for copyrighted works. In general, sound recordings published in the U.S. are protected for 70 years after the death of the artist.
After thinking of all the issues regarding intellectual property and copyrights in music, it is apparent that holiday music appears to be lucrative. This comes from every artist’s desire to cash in on the holiday spirit, producing works that are recognizable and nostalgic to us all, without having to spend too much time and effort being creative and original. No matter if the song is public domain or copyright protected, you can bet that during the holiday season, somebody is making and will continue to make big bucks on these seasonal tunes because although most songs have a short shelf-life, Christmas comes every year and Christmas songs never fade in popularity.
Josie Isaacson, 1L
In a case started in September 2010 in New York, dress designer Jovani Fashion Ltd. brought suit against several dress designers claiming copyright infringement of their prom and special occasion dress designs. They claim that these dress designers copied designs using the same embellished bodices and tulle treatment of the dress skirts and waistband. Jovani argues that these elements of the dress are copyrightable.
On October 15, 2012, the U.S. Court of Appeals for the Second Circuit affirmed the lower court case and dismissed the case against Fiesta Fashion Inc. (one of the rival dress designers Jovani brought suit against). The appeals court said that these elements are not copyrightable because the elements could not be removed and sold separately. The appeals court stated that removing these elements would “certainly adversely affect the garment’s ability to function as a prom dress, a garment specifically meant to cover the body in an attractive way for a special occasion.”
Jovani claims that these elements are separable from the function of the dress and should be protected under copyright, but the court disagrees in stating that they are inseparable.
Come join students, faculty, and local practitioners at the first-ever
GIPLA Wine Night!
What: wine, appetizers, networking
When: 5:30 – 7:30 PM, Thursday, November 8
Where: Nectar Tasting Room, 120 N. Stevens St., Spokane, 99201
Wear: preferably business attire
Elijah Marchbanks, 2L
Presentation by Jessica Kiser
At the Inland Empire CLE, Professor Jessica Kiser, a professor at Gonzaga University School of Law, presented the “year in review” of copyright law. Her presentation made me think about new problems with the traditional copyright infringement framework. Professor Kiser opened with a hypothetical: You represent a band, Hamster Assassin, and they are a local hit in Spokane, WA but haven’t gotten much national attention. Big Band, a nationally known act, releases a song which has a hook that is suspiciously similar to one of Hamster Assassin’s. Professor Kiser then asked the room (which was full of attorneys), what they would want to know in order to show that Big Band had stolen Hamster Assassin’s work? The room answered: “Has Big Band visited Spokane?” “Do the bands share the same producer or record label?” “Is there anything connecting Big Band to Hamster Assassin?”
These are all the appropriate questions under traditional copyright infringement analysis. After all, if Big Band can show that they independently created their song without any influence from Hamster Assassin then it doesn’t matter how similar the two songs are. However, are the answers to the questions presented by the attorneys at the CLE going to prove anything? Let’s add to the hypothetical that Big Band has never been to the West Coast, has a separate record label from Hamster Assassin, the two bands know none of the same people in the music industry, and Big Band has an internet connection and enjoy searching for new innovative music. Have we established that Big Band likely did not infringe Hamster Assassin’s copyright? Could Big Band have found Hamster Assassin’s music published on the internet, liked their hook, and incorporated it into their own song? Professor Kiser’s hypothetical, with the introduction of the internet, highlights a major obstacle to copyright owners in the music business. There are only seven major chords in music. With the millions of songs that are produced each year it is highly likely that two of those will use the same notes and sound very similar. However, absent the smoking gun of a copied track being in an infringer’s iTunes playlist, does the law actually have a way to prove infringement?
This blog post is of the worst kind because it presents a problem without a solution. It is easy to pick apart and show the flaws of a system, it’s much more difficult to come up with something better. The methods we have of showing the likelihood of infringement are not yet obsolete. Most music that is actually worth protecting is produced and distributed by a few major record labels. These record labels use a lot of the same producers for various bands, and it is highly likely that each band signed by these labels is aware of each other’s music. However, piracy and music subscription services are forcing the music industry to change its business models. More and more small bands are getting a broader fan base because of the new availability of music (whether it’s acquired legally or not). When the dust settles we will have a music industry that will probably not look like it does now. It is likely that there will be more small and medium sized record labels, which means more bands with broad recognition. Individual songs will probably not be worth as much as they are under the current music industry model, but they will be worth enough to require copyright protection. I don’t know what copyright law will need to look like to answer the needs of that system but it will undoubtedly need to be different.