Recent Events and Case Law

Lenz v. Universal Music Corp.

JX: US 9th Circuit Court of Appeals

Prince and Universal v. Infamous Nemesis - “Dancing Baby”

After over ten years of litigation, it looks like Prince and Universal are finally calling it quits at “going crazy” over 13-month-old dancing baby, Holden.

•      In 2007, Stephanie Lenz posted a video of her 13-month-old baby, Holden, dancing to Prince’s song “Let’s Go Crazy” on YouTube.

•      After she posted her video, Universal Music registered a takedown with YouTube, claiming a copyright violation.

•      In response, Lenz sent YouTube a counter-notification, stating that her video did not infringe Universal’s copyright and, as such, the video should be reposted.

•      Following the video being offline for weeks, Lenz was assisted by attorneys at the Electronic Frontier Foundation, who saw her situation as a perfect test-case in the booming world of social media, and filed suit.

o  She claimed that Universal had violated the Digital Millennium Copyright Act (DMCA) by misrepresenting its copyright in failing to recognize or consider that the video was a non-infringing fair-use.

•      In 2014, a panel of judges of the 9th Circuit Court of Appeals ruled that copyright owners must consider fair use before sending takedown notices.

o  Still, the federal appellate court agreed with Universal that if a copyright owner forms a subjective good-faith belief that allegedly infringing material does not constitute fair use, this is enough to shield it from liability for misrepresentation.

o  The waters, yet again, left muddy, the Supreme Court invited acting solicitor general, Jeffrey Wall to weigh in on the controversy. Five months after being invited to give input, he told the Supreme Court that a “significant legal error” had been made, in that copyright owners should not be liable “simply because an unknowing mistake is made.” Even so, he advised the Supreme Court to pass on the case and in June 2017, Holden now dancing in grade school, it denied a review.

•      With a minute order by the Appellate court indicating the parties have reached a settlement in principle, it seems no later trial will be had.

•      Though presumably good for the parties, with so much left unsettled, it seems a lot has been lost: 1) the opportunity to find truth in Universal’s subjective beliefs about the video, 2) to nail down the definition of “knowingly” in regard to copyright misrepresentations for similar cases, and 3) the opportunity to establishing clear, followable precedent for an occurrence that will inevitably repeat itself in one form or another.

Ferrick v. Spotify USA, Inc.

JX: New York Southern District Court

Spotify Class Action Settlement - Better Asking for Forgiveness Now Than Permission Then

On May 17, 2018, Federal District Court Judge for the Southern District of New York, Alison Nathan, granted her final approval to a $112.5 million settlement of a class action against Spotify.

•      The suit began as a pair of class actions about three years ago, one led by David Lowery and the other by Melissa Ferrick.

•      Both alleged that Spotify failed to adequately complete the steps required for compulsory licenses of their song composition, including payment, before allowing the songs to be available on their online platform, all the while reaping the benefits.

•      The two actions were then consolidated and a proposed settlement of $112.5 million was reached between Spotify and the songwriters involved. It includes an immediate cash payment of $43.55 million to class members and a commitment to pay ongoing royalties.

•      Though an “agreement” was reached regarding the proposed settlement (to be proposed to the Court for approval), it was not without controversy.  

o  Wixen Publishing Group, whose artists include Tom Petty, Rivers Cuomo of Weezer, and Rage Against the Machine’s Tom Morello and Zach De La Rocha, states in a filing, “the Settlement Agreement is procedurally and substantively unfair to Settlement Class Members because it prevents meaningful participation by rights holders and offers them an unfair dollar amount in light of Spotify’s ongoing, willful copyright infringement of their works.”

o  Wixen and other objectors told judge Nathan that the proposed deal gives Spotify a 98.7% discount for non-willful infringement and a discount of virtually 100% or a “free-pass” for willful infringement, in light of statutory damages. Such statutory damages allow up to 150k/work for willful infringement and 30k/work for non-willful infringement.

o  Wixen even went on to file its own lawsuit, asserting $1.6 billion in damages, around the same time Spotify made plans to go public official.

•      However, after a fairness hearing, Judge Nathan granted the proposed settlement and overruled all objections by Wixen, finding that they no longer had standing to challenge the settlement after opting out of it.

o  Judge Nathan expressed her reasoning as follows: “The combination of the immediate and future monetary relief, along with the non-monetary benefits provided, constitutes a significant recovery. Ultimately, the Court is persuaded that determining how many infringements occurred or defining the exact size of the class at this stage would undermine the benefit of the settlement in reducing litigation burden. As noted, if Plaintiffs proceeded with litigation, it is far from clear that they would have been able to establish liability or damages – or damages as significant as the recovery established in the settlement.”

•      About 35,000 copyright registrations are currently involved among the class members who have elected to opt-out.

•      The Music Modernization Act (MMA) is on the horizon, unanimously passing in the House of Representatives and expected to do the same in the Senate.  

o  As the Act will make it easier for Spotify and other music-streaming services to obtain mechanical reproduction licenses, as well as limit copyright owners suing over mechanical reproduction, Spotify may not need to worry so heavily about those who have opted out of the settlement.

o  However, as the truth of this statement and other procedural safeguards promised by the MMA can only be seen in practice, it will be interesting to see how this settlement measures up in the future.

The Music modernization act

Facts:

-      The Music Modernization Act (MMA), or bill HR 5477, unanimously passed in the US House of Representatives on April 25, 2018, with all 415 votes in favor of the Act. The MMA, introduced by co-sponsors Robert Goodlatte (R-VA) and Jerrold Nadler (D-NY), not only has bipartisan support in the house, but is also overwhelming supported by the music industry.

-      On May 10, 2018, Senator Orrin Hatch (R-UT) introduced the MMA to the US Senate in its nearly identical form, Senate bill S.2823. There was a hearing on the bill on May 15, 2018, where stars like Smokey Robinson and Mary Wilson of the Supremes, attended and offered their own words in support of the Act.

-      The currently proposed MMA legislation combines four (4) unique, previously introduced bills:

o  The Allocation for Music Producers (AMP) Act,

o  The CLASSICS Act, 

o  The Fair Play Fair Pay Act, and

o  A songwriter-specific version of the Music Modernization Act.

-      The AMP Act allows for the formalization of SoundExchange, by paying producers and engineers to receive their royalties from sound recordings, which were previously paid by the artist or their respective record label.

-      The CLASSICS Act provides payment for recordings issued before February 15, 1972, which is not required under the law as it is currently written. This is because sound recordings were not protected by Federal Copyright Law until February 15 1972, currently leaving only a hodge-podge of state copyright laws for artists and record labels to use in fighting bootleg recordings and piracy of those legacy recordings. 

-      The legislative purpose of the bill is to overhaul the U.S. Copyright Act in relation to music licensing and fair compensation, by developing a streamlined, uniformed method to ensure music content owners, creators, and users are treated fairly. The bill’s unusually rapid progress, thus far, has been the result of a joint effort among music publishers, songwriters, artists, record labels, radio, digital services, producers, and engineers, alike. 

-      Rep. Ted Deutch (D-FL) notes that the bill doesn’t address everything, notably omitting performer payment for radio airplay, but stresses that it does make significant improvements. Congressman Goodlatte summed up those improvements as being in four (4) specific areas, saying it will:

o  Improve a dysfunctional mechanical licensing system “that seems to generate more paperwork and attorneys’ fees than royalties”;

o  Ensure royalty protection for pre-1972 performances;

o  Provide a statutory right to recognition for adjunct creators, including producers, sound engineers, and mixers; and 

o  Address the lack of a unified rate standard for music royalties;

-      The MMA combines four (4) separate legislative initiatives into a single bill that will update how music rates are set and how songwriters and artists are paid. 

-      A key provision of the bill include is for Congress to establish the equivalent of a SoundExchange for songwriters to track edits and distribute royalties when digital services use their work. Other changes embraced by the industry are the switch to a market-based rate standard for artists and writers, closing the pre-1972 loophole that denied digital compensation to legacy artists and the addition of copyright royalties for producers and engineers.

Quotes:

-      Smokey Robinson at Senate Judiciary Committee hearing on Tuesday, May 15th:

o  “My message is simple. Musicians who recorded before February 15, 1972 deserve to be compensated the same way as those who recorded after that date.”

o  “I know a lot of musicians and producers and writers who have fallen on hard times and who could really use that money. It’s a livelihood thing.”

o  “The records of the ‘50s and ‘60s aren’t called classics because of their age, they’re called classics because of their greatness. They still resonate today. They define the America sound.”

o  “It would be like if you went to the grocery store or the supermarket and the owner was in there and you said, ‘OK, I’m going to get groceries from you for the next 10 years, but I’m not going to pay you.’ It’s the same thing.”

-      David Israelite – President of the National Music Publishers Association (NMPA):

o  “The bill improves both on how and how much songwriters are paid while increasing transparency and enabling digital music platforms to thrive. The MMA represents unprecedented consensus around necessary updates to how music creators are valued, and we look forward to seeing it become law.”

-      Michael Huppe – President and CEO of SoundExchange:

o  “On behalf of the 150,000+ music creators represented by SoundExchange, we are grateful to Senator Hatch for building this consensus legislative package that will benefit the entire music ecosystem.”

-      Congressman Robert Goodlatte of Virginia:

o  “The bill brings early 20th century music laws for the analog era into the 21st century digital era. Music is no longer written on piano rolls, and our laws shouldn’t be based on that technology either. The problems and failures in our nation’s music laws have imposed real financial costs upon artists and creators.”

Opposition:

-      At present, Siruis XM and background music service Music Choice represent the only notable opposition. Sirius XM protests its perspective as a broadcaster being “excluded from discussions,” while Music Choice expresses worry about business being stifled for smaller music service firms. Still, the majority of other broadcasters and small music service firms are calling the MMA bill a much-needed update to “convoluted” and “out-of-date” licensing laws.

Issues:

-      Implementation of the Copyright Office recording provision could be a very burdensome process on the Pre-72 Sound Recording Owners, not to mention the potential injury that could be incurred by those who are unaware they need to comply with the provision. 

-      The U.S. Copyright Office has a history of struggling with technological change and implementation of the MMA’s recording provision may present yet another “challenge” for it to sluggishly overcome.

-      Critics of the bill emphasize that the purported “consensus” doesn’t include smaller artists and publishers, most of whom will lose money if the MMA becomes law. They point to an “extremely unfair” compensation scheme for collecting royalties, one that automatically pays bigger publishers money on unclaimed royalties. As such, if a smaller artist doesn’t claim a work, that money vanishes after a relatively short period of time (3 years), enriching mega-publishers like Sony/ATV and Warner Chapell. 

-      The current version of the MMA calls for larger publishers to collect all unclaimed royalties based on previous market share figures, which will happen through a government-sanctioned body called the Mechanical Licensing Collective (MLC).

-      An estimated 25-35% of mechanical royalties paid the MLC under the MMA will be unclaimed, largely because smaller artists will be unaware of the MLC’s existence. This lack of awareness will likely be fueled by conflicting interests among MLC stakeholders. Specifically, industry critics note that an NMPA-controlled MLC will have little incentive to notify unsigned or indie artists, simply because any and all unclaimed royalties end up being paid to the NMPA after three years.

Outlook:

-      The basic precepts of the MMA are expected to meet little resistance in the Senate, moving to a full vote and then to President Trump’s desk for a final signature.

OLIVIA DE HAVILLAND V. RYAN MURPHY & FX

          Last year, actress Olivia de Havillard sued Ryan Murphy and FX over the series Feud: Bette and Joan, claiming the show violated her rights of privacy and publicity by inaccurately depicting her as a vulgar gossip, played by Catherine Zeta Jones. The network and Murphy asked a LA Superior Court to toss out the case under California’s anti-SLAPP statute. Judge Kending, sitting for the court, found that Havilland demonstrated a minimum probability of prevailing on her claims and allowed the case to proceed.

          However, in March, that ruling was overturned by a California Appeals Court appellate panel, following oral arguments focusing largely on whether Catherine Zeta Jones’ depiction of Havilland was negative and whether the term “bitch” remains a highly offensive term. As a result of the California Court of Appeal’s reversal of the trial court’s denial of FX’s anti-SLAPP motion, FX succeeded in striking Havilland’s claims on First Amendment grounds.

          Well the 101-year-old actress isn’t giving up. In a petition for review filed by her attorney, Suzelle Smith, Havilland asks California’s high court to determine whether the appellate ruling renders the state’s anti-SLAPP statute unconstitutional. She also requests that it be determined whether the use of a living celebrity’s name and likeness in a realistic portray can possibly be considered “transformative” under the law.

          Havilland and her attorney argue that the 2nd District Court’s findings that 1) Havilland was obligated to present credible evidence and 2) that the plaintiff actress must prove knowing and reckless falsehood by direct, rather than circumstantial, evidence were both incorrect. It is also noted in the petition that the court has yet to address publicity and false light claims in connection to anti-SLAPP procedures, and requested that the court do so. Attorney for FX and Murphy, Kelley Klaus, has not commented on the petition. 

          Havilland vows to appeal the appellate decision, should the petition for review be unsuccessful. However, the appellate decision should not go unheeded, as its implications, at the very least, present problematic uncertainty for those seeking to bring similar causes of action in the future. At a reasonable-inferred most, it may deny the actress and others similarly situated (or anyone seeking to bring a defamation case in California) their 7th Amendment right to a jury trial in defamation cases.

THE SHAPE OF WATER COPYRIGHT INFRINGEMENT LAWSUIT: WHAT OUTCOME TO EXPECT WHEN COMPARED TO HBO'S "BALLERS" suit

I.             “Ballers” and “Off-Season”:

          On February 22, 2018, the 9thCircuit affirmed a District Court’s finding that “only vague similarities exist” between HBO comedy series “Ballers” and a screenplay previously pitched to the network called “Off-Season.” “Off-Season” had not been produced and the screenplay was not even finished, for comparison purposes. The “substantial similarities” standard was applied to writers Everette Silas and Sherri Littleton’s treatments, screenplays, and trailers.

          The District Court, as affirmed by the 9thCircuit, found the plots, characters, themes, moods, setting, pace, dialogue, and sequences of events, “similar in only the broadest of strokes” and that the same falls under “scenes a faire.” Silas and Littleton shopped allegedly the same idea to the producers of Ballers but did not enter into a contract because of/over the condition that their names not be accredited. So, it can at least be said that there was access of someone at HBO to “Off Season”, as far as what was pitched at these meetings, though the eventual producers of “Ballers” were, reportedly, none of the same people Silas and Littleton pitched “Off-Season” to.

A)   Substantial Similarity:

To win a claim of copyright infringement in civil or criminal court, a plaintiff must show he or she owns a valid copyright, the defendant actually copied the work, and the level of copying amounts to misappropriation. Under the doctrine of substantial similarity, a work can be found to infringe copyright even if the wording of text has been changed or visual or audible elements are altered.

Confusion arises because some courts use "substantial similarity" in two different contexts during a copyright infringement case. In the first context, it refers to that level of similarity sufficient to prove that copying has occurred once access has been demonstrated. In the second context, it is used after it has been shown that a defendant had copied to determine if what had been copied is legally actionable or amounts to misappropriation. 

B)   Striking similarity

Direct evidence of actual copying by a defendant rarely exists, so plaintiffs must often resort to indirectly proving copying. Typically, this is done by first showing that the defendant had access to the plaintiff's work and that the degree of similarity between the two works is so striking or substantial that the similarity could only have been caused by copying, and not, for example, through "coincidence, independent creation, or a prior common source". This inquiry is a question of fact determined by a jury.

Courts have relied on several factors to aid in a striking similarity analysis, including:

-      Uniqueness, intricacy, or complexityof the similar sections.

-      If the plaintiff's work contains an unexpected or idiosyncratic elementthat is repeated in the alleged infringing work.

-      The appearance of the same errors or mistakes in both works.

-      Fictitious entries placed by the plaintiff that appear in the defendant's work. For example, fake names or places are often inserted in factual works like maps or directories to serve as proof of copying in a later infringement case since their appearance in a defendant's work cannot be explained away by innocent causes.

-      Obvious or crude attempts to give the appearance of dissimilarity.

          Siles and Littleton advocated for a lower standard based on this “access” (the Krofft Test) but were ultimately denied a lower standard of proof. The Court stated that, even if lower standard were applied, the similarities were still not enough to prove infringement. In doing so, Silas and Littleton contend that the district court ignored the Krofft test for determining substantial similarity and committed clear error.”However, the 9thCircuit stated that football players and the City of Miami were common to both works, but that the “themes and concerns were widely different.” The Court found that only common football story elements were present in both work, the tones were completely different, and that viewing both works side-by-side was ultimately the most telling of dissimilarity (gritty, criminal, underground-club tone of “Off-Season” vs. sun-splashed, light-hearted, tone of “Ballers”)

II.           The Shape of Water and Let Me Hear You Whisper

          As of Febraury 21, 2018, David Zindel is suing film director Guilermo Del Toro, producer Daniel Kraus, Fox Searchlight Pictures, Inc., Twentieth Century Fox Film Corporation, and other respective associates of the film The Shape of Water. Mr. Zindel alleges that the producers of The Shape of Water (particularly, Daniel Kraus) effectively copied a play originally written by his father, Paul Zindel, called Let Me Hear You Whisper. The Complaint cites over 60 similarities between his father’s play and the film that he alleges, taken together, undeniably amount to infringement. Among other things, the Complaint asks for relief in the form of a permanent injunction, profits, and all costs of litigation. 

          Paul Zindel’s play, Let Me Hear You Whisper, centers on a lonely janitorial cleaning woman, Helen, who works the night shift at a secret scientific laboratory facility that performs animal experiments for sinister, military purposes in the 1960s (during the height of the Cold War). Helen works with a talkative, humorous cleaning woman who complains about her marriage to her former husband, whereas Helen is quiet, introverted and keeps to herself. Inside one of the laboratories, she discovers an aquatic creature of advanced intelligence (a dolphin) confined to a glass tank, and begins a loving relationship with the creature, discovering that it can indeed communicate – but chooses to do so only with her. When she learns that authorities at the laboratory plan to kill the creature via “vivisection,” ostensibly in the name of scientific progress, Helen hatches a plan to sneak the creature out of the lab in a laundry cart and release him at a dock on an urban river that feeds into the ocean, where he will finally be free. 

          Del Toro’s picture, The Shape of Water, centers on a lonely janitorial cleaning woman, Elisa, who works at a laboratory facility that performs marine experiments for sinister, military purposes in the 1960s (during the height of the Cold War). Elisa works with a talkative, humorous cleaning woman who complains about her marriage to her husband, whereas Elisa is mute and introverted. Inside one of the laboratories, Elisa discovers an aquatic creature of advanced intelligence (an amphibian man) confined to a glass tank, and begins a loving relationship with the creature, discovering that it can indeed communicate – but chooses to do so only with her. When she discovers that authorities at the laboratory plan to kill the creature via “vivisection,” ostensibly in the name of scientific progress, Elisa hatches a plan to sneak the creature out of the lab in a laundry cart and release him at a dock on an urban canal that feeds into the ocean, where he will finally be free. 

          Below is a non-exhaustive list of particularly idiosyncratic similarities cited in the Complaint:

1)   Helen is depicted as a conscientious hard worker, “immediately moving her equipment into place and getting down on her hands and knees to scrub the floor,” including scraping gum off the floor in the NET Production of the Play. Elisa is depicted as a conscientious hard worker, moving her equipment into place and getting down on her hands and knees to scrub gum off the floor.

2)   In one of the laboratories that Helen cleans, she finds that there is a fascinating aquatic creature (a dolphin), held captive inside a closed and claustrophobic glass water tank. In one of the laboratories that Elisa cleans, she finds that there is a fascinating aquatic creature (an amphibian man) held captive inside a closed and claustrophobic glass water tank.

3)   Despite being set in the 1960s, the Play prominently features music popularized by Hollywood musicals from the 1930s and 1940s. Despite being set in the 1960s, the Picture prominently features music popularized by Hollywood musicals from the 1930s and 1940s. 

4)   Helen’s scrubbing to “Let Me Call You Sweetheart” evokes a famous Gene Kelly routine from the 1943 film Thousands Cheer, in which Kelly dances to “Let Me Call You Sweetheart” with a mop as his partner. Elisa’s dancing with the mop parallels the same Gene Kelly routine from the 1943 film Thousands Cheer, in which Kelly dances to “Let Me Call You Sweetheart” with a mop as his partner.

5)   Helen’s discovery that the lab will kill the creature provides a “ticking clock literary device that drives the plot, wherein Helen must now find a way to rescue the creature before time runs out. Elisa’s discovery that the lab will kill the creature provides a “ticking clock literary device that drives the plot, wherein Elisa must now find a way to rescue the creature before time runs out.

6)   Helen defends the creature’s right to live by comparing him to a “mute” human being, insisting, “Some human beings are mute, you know. Just because they can’t talk we don’t kill them.” Elisa defends the creature’s right to live by comparing him to herself, a mute human being, signing: “And what am I? I move my mouth – like him – and I make no sound – like him. What does that make me?” 

7)   Helen decides that she will sneak the creature out of the laboratory and set it free at the dock on the river that feeds “to the sea” (the Atlantic Ocean). Elisa decides that she will sneak the creature out of the laboratory and set it free at the dock on the canal that feeds “to the sea” (the Atlantic Ocean). 

8)   To spring the creature from the lab, Helen plans to hide him in a large rolling laundry cart. To spring the creature from the lab, Elisa plans to hide him in a large rolling laundry cart.

9)   In a suspenseful and dramatically resonant moment, Helen is seen tenderly embracing the creature as she lifts it out of the tank to free it from captivity. Helen’s embrace of the creature is behind a curtain pulled across the tank like a shower curtain. In a suspenseful and dramatically resonant moment, Elisa is seen tenderly embracing the creature as she lifts it out of the tank to free it from captivity. Later, Elisa embraces the creature behind a shower curtain.

          While every copyright infringement suit in Hollywood should be taken with many grains of salt and often go beyond what is reasonable to allege (such as Zindel claiming that audiences’ connection to, and the ultimate success of The Shape of Water, would not have been possible absent his father’s play) there may be more damning evidence. For instance, Daniel Kraus is on record as an admirer of Zindel’s work and the “idea” came to him the same year a TV adaptation of Zindel’s play aired. Zindel’s play was widely broadcast in 1969 and 1990 TV reproductions, there are more than 10 print editions, and it is widely taught in American schools and staged productions. This will likely prove Kraus had access to the prior work. Also, the Complaint cites some incriminating statements made by Kraus on social media. During an online question-and-answer session with fans in 2016, KRAUS was asked about his “research resources” for a book he wrote. KRAUS answered: “I stole (grave robbed?) from everything I could.” Finally, and perhaps most importantly, the Complaint cites numerous social media and other instances in which audiences have either interpreted The Shape of Water as a being based on Zindel’s play Let Me Hear You Whisperor actually confused it for another film adaptation of it. The audience comments include both questions about it inspiration from the play and criticisms for not accrediting Zindel in the film.

          Even if only half of the similarities alleged between The Shape of Water and Let Me Hear You Whisperand other facts about its producers stated in the Complaint prove to be true, it will be interesting to see how this suit pans out…