Month: November 2012

In Betty Boop case, defendants prevail. Again.

U.S. District Judge Audrey B. Collins  in Los Angeles has ruled in Fleischer Studios Inc. v. A.V.E.L.A. Inc. that the “Betty Boop” word mark, when used with the character’s cartoon image, is both aesthetically functional and a fair use. She, thus, found no copyright infringement by defendants and granted them summary judgment. Again. This is the latest action in protracted litigation over ownership of the intellectual property of Betty Boop. The plaintiff is related to Max Fleischer, the cartoon character’s creator. While it is undisputed that Fleischer sold all rights to Betty Boop long ago, the family tried to repurchase intellectual property rights in the 1970s. Acting on their belief that they had successfully acquired these, they began licensing the character’s use for merchandise.  A.V.E.L.A. also licenses the Betty Boop character for merchandise, utilizing depictions and the name  from vintage posters that the firm claims are in public domain. The Fleischers sued for copyright and trademark infringement, launching this complicated court battle. Originally, the late U.S. District Judge Florence-Marie Cooper  granted summary judgment to A.V.E.L.A., holding that the Fleischers did not have a valid copyright or trademark in the character.  On appeal, the Ninth Circuit upheld Cooper’s rulings, but based its trademark findings on the aesthetic functionality doctrine, which the District Court did not. So the Fleischers sought a rehearing. The superseding opinion upheld the District Court on the image mark and copyright claims but vacated the...

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A $1.5 million-plus penalty for porn download

U.S. District Judge John Lee in Chicago has granted a default judgment to Flava Works, Inc. (a porn video production company) against Kywan Fisher for $1.5 million plus attorney’s fees and costs, for illegally downloading porn via BitTorrent. This judgment reflects the maximum penalty available under copyright law. Forbes reports this is the largest judgment yet in the “hundreds of thousands” of BitTorrent suits. DieTrollDie predicts that copyright trolls will exploit this case to frighten people into  settling. This all started as a run of the mill mass filing. But the judge severed the defendants, and, unfortunately for Fisher, he was the weakest prey at the edge of the herd. He was a paid member of Flava Works and had agreed not to copy or distribute movies, plus he was accessible and could be served. He ignored the summons and hearing, so the court entered the default judgment and exigent penalties, sending a clear warning to would-be copyright infringers. This case should be distinguished from a suit filed earlier this year, Flava Works Inc. v. Gunter, decided by Seventh Circuit Judges Richard A. Posner, Joel M. Flaum and Diane P. Wood. In that case, Posner reversed the copyright infringement finding by a U.S. District Court in Chicago, holding that the defendant, a proprietor of myVidster, was neither directly liable nor contributorily liable because copyrighted content was not stored on servers and it was not proven that myVidster encouraged...

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Game on: Beyonce can’t quash $100M claim

Beyonce Knowles and video game developer Gate Five Studios have been dueling it out over the superstar’s failure to go through with a project to create an eponymous video game. Gate Five contends it suffered major damage, a sum it sets at $100 million, and the dispute has turned to litigation, filed in August, 2011. Courts have heard and denied defendant Knowles’ motion for summary judgment of this case. She has contested the ruling but an appellate court has affirmed the order denying the pop superstar’s motion. Joystiq.com reports that Beyonce backed out of the deal to make the Superstar game, with Knowles defending herself with the claim that the project lacked proper financing. By pulling out of the $20-million video game deal, she might end up with that $100-million tab if the case proceeds to trial and she loses. And after her litigation losses to date, the cost to settle has increased. Video game studios like Gate Five hire a lot of employees to develop single projects. The website betabeat.com said Gate Five has demanded that Beyonce be held accountable for “a bad faith breach of contract so callous that, on what appeared to be a whim, she destroyed Gate Five’s business and drove 70 people into unemployment, the week before Christmas.” Knowles was still negotiating  until she had her lawyers pull out on Dec. 3, 2010, even...

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In Germany, eine kleine verwirrend gesang

Germany’s Federal Constitutional Court recently ruled that the parents of a teen who had illegally shared more than 1,100 songs on the internet cannot be held responsible and are not required to monitor or restrict their son’s future on-line activities. The court’s ruling diverges from German protocol, which is hard on internet piracy. Legislation in Germany almost always holds those with ISP accounts responsible for activities on their IP address, BitTorrent reports. In 2007, the rights holders to 1,100-plus songs, illegitimately shared on the computer of a 13-year-old, sued his parents, alleging inadequate supervision. A lower court agreed and awarded damages for copyright infringement; that ruling was upheld on appeal. But the federal court overturned the appellate decision, saying the parents had fulfilled their obligations by giving their teen a “basic do’s and don’ts” lecture about his computer, including warnings against sharing copyrighted material on the internet. The high court further ruled it would be necessary to require parents to monitor or restrict their child’s activity only if there were “reasonable grounds” that the child would engage in illegal on-line activity. And that wasn’t the case here. While this head-scratching case possibly offers a new path for defendants accused of copyright infringement, let’s see if it becomes a precedent affecting...

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Q-and-A: Michael Spindler, forensic CPA

  Rapper Notorious B.I.G. famously rapped “Mo’ Money, Mo’ Problems.” When success strikes and brings its own financial concerns, Michael Spindler is a specialist who can help. With a career in profit participation audits, royalty inspections, most-favored-nation inspections, reviews of business managers and more forays in forensic accounting, Spindler talked with the Biederman Blog about his field: Q: Who are your typical clients? Do you typically represent studios? Production companies? Distributors? Individual profit participants? A: My clients range from the major film studios to independent film, talent, producers, writers and studio heads. Our services include (profit) participation audits, royalty and most-favored-nations inspections, internal investigations, litigation support, expert witness testimony and reviews of business managers, so our clients can determine if their  funds are being handled appropriately. Q: Without naming names, what projects are on your to-do list? A: Our current projects include performing a review of a business manager on behalf of a television show producer, looking at FCPA issues related to film production, investigating an internal embezzlement, investigating alleged thefts of trade secrets and assisting a studio executive in determining amounts due from a prior employer under an earn-out provision. Q: What’s your philosophy on exercising audit rights? In a clubby business where relationships are everything, how does actually exercising audit rights change the dynamics of a relationship? A: Some people have a fear that an audit will have a negative...

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