Month: April 2012

Prince loses $3.95 million licensing stink

A New York judge has sent a strong message, ordering entertainer Prince to pay $3.95 million for failing to honor a licensing agreement that he signed in 2006. That agreement contained provisions for the pop star to promote an eponymous fragrance through media and in-store appearances, distributing samples at concerts, and then receiving 50 percent of any profits made from the product. But two years later, Revelation, the fragrance company that entered the deal, sued Prince, asserting breach and seeking damages. The fragrance was inspired by Prince’s 3121 album, and the licensing agreement was signed by both Prince and Universal Music Publishing Group. Although he and Universal’s lawyers argued the terms of the agreement did not require direct promotion by Prince, the judge ruled that the singer had made post-signing statements that sent “mixed messages” about his involvement with the product. These mixed messages came after signing the agreement, including empty promises made worse when minimum sales requirements were not met. Though the judgement may seem large, it was shy of what it could have been, given that the judge did not find any malicious intent on behalf of Prince and did not award punitive...

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Court curbs claims from net live-streaming

In an important victory for those concerned with maintaining Safe Harbor protections on the Internet, online streaming site Justin.tv won a partial dismissal of trademark claims and full dismissal of Communications Act claims that were brought against it by Zuffa LLC. The U.S. District Court in Nevada, citing the U.S. Supreme Court’s opinion in Dastar v. Twentieth Century Fox Film Corp., dismissed plaintiff Zuffa LLC’s claims for infringement of its “octagon” fighting-arena design mark. The court found the trademark to be an inherent part of a streaming mixed martial arts video in which it was displayed and expressed concern that enforcing Zuffa’s rights in a mark, displayed as an inherent part of a copyrighted broadcast, would run afoul of the rule of Dastar.  It bars trademark protection for copyrightable works and held that the Communications Act did not apply to defendant’s purported conduct. Defendant Justin.tv operates a website that allows users to stream or broadcast live video across the internet to other Justin.tv users, akin to YouTube or Vimeo but for live rather than prerecorded video. Zuffa, LLC, which operates and does business as the Ultimate Fighting Championship (UFC), owns trademarks, including Ultimate Fighting Championship, UFC and the “Octagon” (the eight-sided ring in which UFC mixed martial arts bouts take place). Plaintiff often broadcasts its copyrighted bouts on television, particularly pay-per-view. Plaintiff sued defendant based on the live-streaming of a UFC fight through Justin.tv’s service,...

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JOBS Act offers filmmakers financing options

President Obama has signed the Jumpstart Our Business Startups (JOBS) Act, laws making it easier for startup firms to raise capital. The act will allow small businesses, such as production companies, to take part in internet “crowd funding,” raising capital by soliciting investments from others online. Unlike kickstarter.com, which permits filmmakers to seek donations and gifts, the JOBS Act allows them to raise up to $1 million in equity investments from the general public without following current security regulations. Filmmakers have found it difficult to finance  projects in both public and private offerings: Public offerings require SEC approval and the registration can be tedious and expensive (costing hundreds of thousands of dollars); private offerings, which generally prohibit advertising, are less pricey, though crafting a Private Placement Memorandum can still exceed $25,000. Entertainment law blogger Mark Litwak’s offers his take on the JOBS Act...

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Could cable case increase bundling’s appeal?

It can be the bane of many cable subscribers: to get channels they want, they must pay for channels they don’t want. This business model of bundling channels has worked well for the cable industry, which save for select premium offerings, rarely allows for singe choices. But as more television shows become available on the internet and new technologies such as Apple TV emerge won’t  consumers prefer to create a la carte picks for their viewing pleasure? Without a reading on the attached antitrust aspects, could bundled services go the way of the tube radio or might this approach spread to other businesses? The Ninth Circuit Court of Appeals has offered some answers when it left standing a lower court’s dismissal of a lawsuit that contended that NBC Universal, Fox and other TV programmers employ their market power to force consumers to accept bundled packages of channels. Now that the appellate  judges  have sided with a dozen media giants in this class-action suit — which sought to bar the practice of bundling multiple channels —  are the doors open for other media to take up this revenue model? Rather than selling a TV show episode by episode, as occurs now, could internet vendors bundle their offerings for higher prices, to give more prominence  to lesser known shows and capitalize on popular streams? Possibly. The courts have tussled for a time now with...

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For music industry, a digital path forward

To stem future lawsuits over royalty rates relating to digital downloads, record labels, music publishers and digital music providers have reached a settlement for future mechanical royalty rates arising from digital music services.  The deal seeks to avoid  past battles waged over rates for music streaming services while introducing new ways for consumers to enjoy music, all while deterring online music piracy. The Copyright Royalty Board must reiew and approve these new  rates, which would be in effect  from 2013-2017. The proposed settlement creates five new mechanical royalty rates for: 1) Digital locker services,  services and products such as iTunes and Amazon.com that allow users to store music and provide on-demand streaming. In this category, music publishers will get a mechanical rate of 12 percent of revenue or 20.65 percent of total content cost or 17 cents per subscriber, whichever is greater.  This rate will provide music publishers and artists with a lot of revenue based on the 17 cent per subscriber model.  Clearly, the music industry understands the expanding importance of paid cloud services. 2) Free cloud storage with a download purchase. Music publishers will get 12 percent of revenue or 22 percent of the total content cost, whichever is greater. On the free cloud service rate, music publishers will not get the option to collect based on subscribers  This is a victory for the cloud storage industry because...

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