Covering Your Ads : Advertising & Marketing Lawyer & Attorney : Sheppard Mullin Law Firm : Entertainment, Sports, Publicity

On Feb. 20, 2009 the 9th Circuit Court of Appeals struck down a California law banning the sale or rental of “violent video games” to minors and requiring such games to be labeled “18” (the legal age for adults). While this decision may surprise some California lawmakers and parents, its holding is fully consistent with substantial U.S. Supreme Court precedent entitling minors to a signifi cant measure of First Amendment protection, and leaving parents with the duty to supervise “appropriate” content.
 

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When Citigroup (“Citi”) announced its unprecedented $400 million dollar deal for naming rights to the new Mets Stadium in late 2006, sports marketing experts assumed that Citi was breaking new ground in naming rights deals for sports venues. Shortly after Citi announced its deal for “Citi Field,” British banking giant Barclays agreed to pay a reported $400 million dollars over twenty years for naming rights to the future home of the New Jersey Nets, and experts predicted that companies would offer even more for the naming rights to the new Cowboys and Giants stadiums.

In recent weeks, however, Citi has accepted $45 billion dollars in funding from the Troubled Asset Relief Program (“TARP”). As a result, Citi’s deal with the Mets has undergone intense scrutiny, with certain members of Congress proclaiming that Citi should be forced to back out of its deal with the Mets. Although there is some visceral appeal to that position, requiring Citi to back out of its deal would have far-reaching financial implications for the entire sports industry and would raise complex legal issues under the Contracts Clause and the Takings Clause of the United States Constitution.

The following article by Ben Mulcahy and Gina Reif Ilardi was originally published in Sports Litigation Alert. To read the article please click here, or visit the Sports Litigation Alert website.

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In deciding whether the unauthorized use of a third party’s name, voice, likeness or persona (collectively, “Image”) violates such third party’s publicity rights, the first level of inquiry is whether the use is properly categorized as a “commercial” or a “non-commercial” use.  If an Image is used without permission in a non-commercial or “newsworthy” context, such use is generally protected so long as the Image used is reasonably related to the aspect of the use that makes it newsworthy, and so long as less than the Image owner’s “entire act” is used.

Distinguishing between commercial and non-commercial uses is a context-specific inquiry, and describing the precedent on that issue is beyond the scope of this article.  But where the underlying use is concededly non-commercial, such that permission does not need to be obtained from the person whose Image is depicted, this Adbriefs blog post briefly addresses whether the Image can also be used to advertise or promote the underlying use without giving rise to a valid right of publicity claim by the person whose Image is depicted.
 

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INTRODUCTION

User generated content (“UGC”) has quickly come to dominate the current landscape of online promotions and marketing initiatives.  As UGC is generally made available for public viewing without prior screening, its growing prevalence raises liability concerns when the UGC contains third party references or materials.  Web site operators/promotion sponsors have broad protections under the Communications Decency Act (“CDA”) and the Digital Millennium Copyright Act (“DMCA”) against liability for infringing UGC, but that protection is not without limits.

Promotion sponsors often want the right to exploit certain UGC beyond posting it online in connection with the promotion.  For example, a sponsor may want to incorporate artwork created by entrants in an online contest in a print or television advertisement for a new product or service.  Similarly, video submissions entered into a contest tied to a motion picture’s theatrical release may make a great “extras” feature to include in the DVD release of the motion picture.  To secure such rights, the official rules for UGC promotions generally accord the promotion sponsor a broad grant of rights to further exploit UGC submissions or require a transfer of ownership in the UGC to the promotion sponsor upon posting.  These mechanisms enable the promotion sponsor to utilize the UGC more fully, if it so chooses, but these options also raise the question of whether a transfer of ownership in UGC affects the scope of protection offered to the promotion sponsor under the CDA and DMCA.
 

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"Seventy years after Eric Knight first penned his tale of the devoted Lassie who struggled to come home, at least some of the fruits of his labors will benefit his daughter." So said the U.S. Court of Appeals for the Ninth Circuit in Classic Media Inc. v. Mewborn on July 11, 2008, when it held that Eric Knight’s daughter had duly terminated the motion picture, television and other rights that had been granted in the "beloved children’s story ‘Lassie Come Home’", which her father first published in 1938. In so holding, the Ninth Circuit significantly narrowed its precedent-setting 2005 copyright termination opinion relating to "Winnie the Pooh," which held that copyright grantees could renegotiate their terminable grants and, thereby, avoid termination under Section 304 of the Copyright Act. Offering some hope for grantees seeking to renegotiate their terminable copyright grants, the Classic Media decision left the door slightly ajar to the possibility that a renegotiation did not have to occur during the actual five-year termination window but could instead occur at any time during the longer statutory notice period. But just one month later the Second Circuit kicked that door wide open in an opinion relating to various novels and other works written by John Steinbeck. Until there is a case resolving the issue in the Ninth Circuit or in the United States Supreme Court, copyright grantees seeking to renegotiate terminable grants should consider taking advantage of the precedent in the Second Circuit that now appears to be more tolerant of renegotiations on this issue by designating New York choice of law and venue in their renegotiated contracts.
 

The following article by Ben Mulcahy was originally published in The New York Law Journal. To read the article please click here, or visit The New York Law Journal.
 

Author's Note: A footnote was inadvertently left of the version of this article that went to press. That footnote was in reference to the termination notice period for Superman opening in 1970. The omitted footnote read "These dates were chosen to mirror the dates in the Siegel case that follows, and the 1970 date is when the notice window would have opened if there had been a termination right that year, but the Copyright Act was amended in 1976, effective 1978, and there was no termination right prior to that."
 

Authored by:

Benjamin R. Mulcahy

(212) 332-3841

bmulcahy@sheppardmullin.com

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In a decision that could have far-reaching implications for technology licenses of all types, the U.S. District Court for the Central District of California recently held that the first sale doctrine permits a recipient of promotional CDs to sell them online without violating the license pursuant to which the CDs were distributed and without being liable for copyright infringement.  UMG Recordings, Inc. v. Augusto, No. CV 07-03106, slip op. (C.D. Cal. June 10, 2008).  The court granted the defendant's motion for summary judgment and rejected Universal Music Group’s (“UMG”) argument that the labeling on the promotional CDs created a license without transferring title.

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Most major players in the promotions industry know that the so-called Cairns patent (U.S. Patent No. 6,173,267) is an online business method patent relating to online sweepstakes that involve unique codes.  Although it should be clearly understood that I am not a patent attorney (a highly-technical legal specialty), and this blog entry does not constitute legal advice and most certainly does not constitute a legal opinion of this firm, there are several steps that can be taken to potentially avoid at least one of the elements, or its equivalent, for each claim of the patent.

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Although the WGA strike is reportedly near an end, the strike has naturally made it harder to find paid acting jobs in film and television, causing a greater number of Hollywood celebrities (and their agents and other reps) to pursue endorsement opportunities and the money that follows.  The money, however, doesn't just go to the celebrities and their reps.  It also goes to the trustees of the applicable guild's Pension and Health Plan.  The amounts being claimed by the trustees, and in some cases the threshold issue of whether the trustees are entitled to ANY amounts, are increasingly being challenged.  This blog entry briefly discusses the allocation issue and the jurisdiction issue.

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The adult entertainment industry is responsible for bringing many of the seminal cases that have shaped intellectual property law on the Internet, from Playboy Enterprises Inc. giving rise to the "initial interest confusion" test for trademark infringement, to Perfect 10 shaping the contours of search engine liability. And now a company named Eros LLC is seeking to join their ranks. Second Life is perhaps the most closely observed virtual world in the United States. Eros claims to be one of the most successful merchants doing business within Second Life, selling adult-themed virtual assets. In an Amended Complaint filed at the end of October in the United States District Court for the Middle District of Florida, Eros claims that the named defendant (and unnamed John Does) has been making and selling numerous unauthorized copies of the virtual assets to other Second Life residents in violation of Eros's exclusive rights under copyright. If this were the "real" world, the Eros lawsuit would be an uneventful case of software piracy and reverse passing off. But this isn't the "real" world; all of the activities giving rise to this lawsuit occurred in Second Life. As such, its implications are worth noting. The following article by Ben Mulcahy was originally published in The National Law Journal.

Click here to continue reading, or visit The National Law Journal.

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