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Intellectual Property Newsletter Spring 2009

Spring 2009

Setting the Record Straight
by Robert Kouchoukos and Jennifer Craft

Can you name all six original members of The Platters? And remember who sang with Diana Ross and Mary Wilson in The Supremes? Don’t worry; this is not a pop quiz. Our point is: you may not recognize their names but their music is still very popular, so much so that there are groups popping up everywhere billing themselves as the “real thing,” when, in fact, they aren’t.

This article addresses the recent changes in Nevada law that prohibit such imposter groups from misleading unsuspecting concert-goers, and provides practical tips to help band members, concert promoters and production companies avoid stiff penalties.

Truth in Music Act
On May 31, 2007, the Nevada Legislature enacted the Truth in Music Act, NRS § 598.0922 et seq. As its name implies, the act prohibits a person from advertising or conducting a live musical performance or production in Nevada “through the use of a false, deceptive or misleading affiliation, connection or association between a performing group and a recording group.”1 In other words, a band cannot mislead the public by promoting or rendering a live performance in Nevada using the name of another band that has previously released a commercial sound recording under that name.2

This does not apply in circumstances where: (a) the performing group owns a valid service mark for the group’s name that has been federally registered with the United States Patent and Trademark Office; (b) one of the performing group’s members was a member of the original recording group (i.e., performed on the original group’s commercial sound recordings and has not left the original group or abandoned his or her affiliation with it); (c) the performing group advertises itself clearly as a “salute” or “tribute” and uses a name that’s not identical or confusingly similar to the recording group’s name or (d) the performance or production is expressly authorized in writing by the original recording group.3

The “persons” subject to the act include performing groups and their promoters, managers and agents, while the venue hosting the imposter acts is expressly excluded from any liability unless it owns and produces such acts.4 This exception (which is not included in the truth in music laws enacted in many other states) is a boon for the Las Vegas casinos that make up a huge share of the oldies tour market, as it effectively relieves them from any responsibility for ascertaining whether the acts performing at their venues have legal rights in their names.

Also, the act authorizes the Attorney General to seek injunctive relief to prevent violations of the act’s provisions, permits a court to enter judgment for restitution and subjects violators to a civil penalty ranging from $5,000 to $10,000 for each violation.5 Each performance or production in violation of the act’s provisions is considered a separate violation.

Musicians Jon “Bowzer” Bauman, formerly of Sha Na Na and chair of the Truth in Music Committee of the Vocal Hall of Fame, and Mary Wilson, an original member of The Supremes and a Las Vegas resident, played crucial roles in getting the Truth in Music Act passed quickly in both houses of the Nevada Legislature. Wilson and Bauman have been tireless advocates of the rights of the famous vocal acts from the 1950s and 60s that helped shape the American pop-culture landscape. Both have traveled across the country lobbying various state legislatures, including Nevada’s, to enact the “Truth in Music” bill they helped author. Fittingly, both artists actually broke out into song while testifying before the Nevada Senate with Wilson pleading with imposter groups to “stop in the name of love before you break my heart,” and Bauman imploring them all to “yip, yip, yip, yip, yip, boom, boom, boom, boom, get a job.”

Due in large part to the efforts of artists like Bauman, Wilson and Sonny Turner (an original member of The Platters and long-time Las Vegas resident), truth in music laws have now been enacted in Nevada and 26 other states.6 However, because the vast majority of these laws have been in effect for only the past few years, there is very little existing case law interpreting their provisions or providing meaningful guidance as to their enforcement.

Singer Management Consultants, Inc. and Live Gold Operations, Inc. v. Anne Milgram, Civil Action No. 07- 3929 DRD-ES (D.N.J. 2007) is believed to be the first legal challenge to a state’s truth in music law. In this case, the plaintiffs, claimed owners of unregistered trademarks for three performing groups (The Platters, The Cornell Gunter Coasters and the Elsbeary Hobbs Drifters), challenged New Jersey Attorney General Ann Milgram’s efforts to prevent the bands from advertising their performances at certain shows scheduled for August 2007 at the Atlantic City Hilton Casino. Milgram and the state of New Jersey contended that since the group’s trademarks were unregistered and the groups didn’t feature any of their original members, the state’s Truth in Music Act required them to obtain further authorizations from the original recording groups or refer to themselves as tribute groups.

The plaintiffs asserted in their complaint that Milgram’s enforcement of the New Jersey Truth in Music Act against the performing groups had the unconstitutional effect of nullifying their common law trademark rights in the groups’ names, which were federally guaranteed under Section 43(a)(1) of the Lanham Act, 15 U.S.C. § 1125(a)(1), regardless of whether the groups featured any of their original members.7 On August 17, 2007, one day prior to the shows commencing, the United States District Court for the District of New Jersey entered a temporary restraining order restricting Milgram from interfering with the Atlantic City performances.8 Although the shows took place as scheduled, the Atlantic City Hilton decided, on its own accord, to bill them as a “Tribute to The Drifters/Coasters/Platters.”

At the subsequent preliminary injunction hearing, U.S. District Court Judge Dickerson R. Debevoise decided to reserve ruling on the lawsuit until a decision was made in a separate case involving the use of The Drifters’ name. Interestingly, however, both the court and the state of New Jersey agreed that, under the Lanham Act, owners of valid unregistered trademarks are to be accorded the same treatment as holders of federally registered trademarks.9

Practical Tips
While the issues raised in the Singer Management case remain unresolved, there are a number of important measures that counsel for music groups can take to help ensure that their clients are protected by, or in compliance with, state truth in music laws.

First, counsel should determine whether their client’s band name is identical or confusingly similar to those previously used by other bands. This can be accomplished by conducting a comprehensive trademark search and providing a thorough assessment and analysis of the search results. Once the band name has been cleared, counsel should assist the band in federally registering (if applicable) the band’s name as a trademark, as well as registering any accompanying logos to protect their use of the name in association with its music performances and merchandising efforts.

Prior to commencing the registration process, however, the band will need to decide who will own the band’s trademarks and any resulting registrations, i.e., the band, certain of its founding members or a corporation, limited liability company or other entity formed by the band. Ownership of the band’s name and other trademarks and related issues, such as who gets to use the marks and what happens to them when the band changes personnel or breaks up, should all be addressed in a written band partnership agreement entered into by its members early on in the band’s existence. In addition to provisions governing the ownership and use of the band’s trademarks, such agreements should also include language regarding ownership of the copyrights to the band’s sound recordings and musical compositions, the split of royalties, performance fees and other revenues from merchandise sales, sponsorship deals, payment of the band’s debts, acquisition of
equipment and other assets and the process by which key business decisions are made and disputes resolved.

Lastly, a concert promoter or production company, before publishing any advertisements for shows featuring oldies acts and the like, should require the groups performing at these shows to provide sufficient evidence that they own the rights in their names or have obtained all required permissions or authorizations to use them. Likewise, any written performance agreements signed by these groups should include representations and warranties by the groups that they own or are otherwise authorized to use the names they are performing under.

So, the next time a client walks through your door with a great name for a band or for a unique concept to pay tribute to the classics, consider contacting an entertainment attorney or at least reviewing the recent changes in Nevada law.


An Overview of the Electronic Copyright Office
by Jennifer Craft and Nikkya Williams

eCO Up and Running

The U.S. Copyright Office has finally joined the Digital Age. On July 1, 2008, the Copyright Office began accepting online registration of copyright claims via its Electronic Copyright Office (eCO). Now, instead of filling out paper forms and mailing them in along with your deposit and fees, you can go to and submit everything – application, fees and deposit – over the Internet.

Advantages

  • Tracking Capabilities – Once you file an application, you can now track the progress of that application.
  • Lower fees – The filing fee is $35 if you file online, but $45 to paper file.
  • Faster processing time – If the application is complete and accepted, you should receive a certificate of registration in about 5 months if you register online. It can take over a year to get a certificate if you paper file.
  • Earlier effective date of registration – The effective date of registration is the day the Copyright Office receives your complete submission in acceptable form. If you register online and upload your deposit, your submission is complete that day.
  • More payment methods – You can pay now your filing fees by credit or debit card. If you paper file, you can only use checks or money orders or withdraw from your deposit account to pay the fees.

Disadvantages

  • Only certain claims can be registered online – For instance, you cannot register claims associated with mask works or groups of serial issues. Also, there is a limitation as to the type of deposits that can uploaded, so paper filing may be the only option.
  • Not all web browsers are supported – The eCO system was designed for Internet Explorer and Netscape. Firefox will work, if you adjust your settings, but Safari is not supported.
  • File size for uploads is limited – You can only upload 11.3 MB over a phone modem or 405 MB over a cable modem in a single session.
  • It can be more time consuming and therefore, more costly– Depending on the application, it may take longer to file an application online versus paper filing and therefore, may be most costly in terms of the legal fees.

As you can see, not all applications can be submitted online, nor is online filing the preferred method in all instances. Therefore, it is important to contact your attorney to assess your options and determine which method is best for you.


Recent Changes In California Sweepstakes Law And How They May Impact Your Company’s Promotions
by Emily Bayton

Are your company’s promotions multi-state or national in scope? Do your company’s promotions target California residents? If so, you should be aware of recent changes in California sweepstakes law. On September 30, 2008, California Governor Arnold Schwarzenegger signed into law the California Omnibus Sweepstakes Bill (Senate Bill 1400), which amended Section 17539.15 of the California Business and Professions Code. The Bill added a number of key requirements for sweepstakes and promotions, all of which were designed to prohibit false and misleading sweepstakes solicitations in the state of California.

The law, which went into effect January 1, 2009, imposes the following requirements on marketers of sweepstakes/promotions:

  • That the official rules for all promotions contain a clear and conspicuous statement that no purchase or payment of any kind is necessary to enter or win the sweepstakes, which is set out in a separate paragraph in the official rules and printed in capital letters in contrasting typeface not smaller than the largest typeface used for the text of the official rules.
  • Sweepstakes materials also cannot falsely represent that a person has been specially selected in connection with the sweepstakes. “Specially selected” means a representation that a person is a winner, a finalist, in first place, or otherwise among a limited group of persons with an “enhanced” likelihood of receiving a prize.
  • Sweepstakes materials cannot falsely represent that the person receiving the offer has received any special treatment or personal attention from the sponsor or agent of the sponsor.
  • Sweepstakes materials cannot falsely represent that a person is being notified a second or final time of the opportunity to receive or compete for a prize.
  • Sweepstakes materials must not represent that a prize notice is “urgent” or convey an impression of urgency by use of description, phrasing on a mailing envelope, or similar method, unless there is a limited time period in which the recipient must take some action to claim, or be eligible to receive a prize, and the date by which that action is required is clearly and conspicuously disclosed in the body of the promotional materials.
  • Sweepstakes materials also must not: (1) simulate or falsely represent that it is a document authorized, issued, or approved by any court, official, or agency of the United States or any state, or by any lawyer, law firm, or insurance or brokerage company; or (2) create a false impression as to its source, authorization or approval.
  • Finally, the official rules must disclose the date the final winner or winners will be determined.

Many of the above restrictions emulate restrictions set forth in the Federal Deceptive Mail Prevention Act, which applies to direct mail sweepstakes, or state laws which have been enforced against direct mail sweepstakes. Thus, marketers who have previously run multi-state or national direct mail sweepstakes campaigns may already be in compliance with some or all of the above requirements established in California. It is important to note, however, that the language of the California bill does not limit the above requirements to direct mail promotions and thus potentially could be applied to all sweepstakes/promotions targeting California residents. Moreover, many commentators discussing the new bill believe that the recent change in California law indicates that an increased scrutiny and enforcement of sweepstakes laws is likely to occur in the state. Thus, marketers should be aware and ensure they are in compliance with all applicable federal and state laws prior to promoting a sweepstakes in California. The recent changes in California sweepstakes law also emphasize the importance of keeping abreast of changes in sweepstakes law, which can be a daunting task considering that sweepstakes are regulated not only federally, but also on a state-level. If you are unsure whether your company’s sweepstakes or promotions are in compliance with federal or state laws, contact a lawyer who works in the sweepstakes/promotions field. They can help you assess whether your promotions run afoul of any laws.


Google Book Settlement
Time is Running for Authors and Publishers to Assert Their Claims
by Christy Hubbard

If you are like millions of Americans, you plan someday to sit down and write the great American novel. Perhaps you have already thought of the unforeseen (yet slyly foreshadowed) plot twist that will energize fans and make you an overnight sensation.

Imagine now that you do write your book and while “Googling” the title to see what fans are saying, you discover that multiple chapters of your book – including the pages in which the surprise plot twist is revealed - have been reprinted online without your permission.

That was the reality of many authors and publishers who were casualties of the Google Library Project, an effort to digitize and publish excerpts of university book collections despite the fact many of the books in those collections were protected by copyright law. Google neither sought, nor obtained, permission from most copyright owners, arguing that it had fair use rights to digitize and publish the works.

The Author’s Guild and the Association of American Publishers filed a class action lawsuit against Google that has now settled. If you believe your writings have been affected by the Google Library Project, you should go to the settlement website at www.GoogleBookSettlement.com for more information about how to file a claim. Time is limited and you should act right away.
The settlement affects books published on or before January 5, 2009. Copyright owners have several settlement options, which include:

  • Claiming a payment for any books that Google digitized on or before May 5, 2009;
  • Requesting that books be removed from the database or not be digitized;
  • Excluding or including the books in various display uses available under the Settlement; or
  • Opting out of the class action suit and retaining the right to sue separately at another time. 


One-on-One with Linda Norcross

What is your most important possession?
My father’s law school ring. (I am hoping it has super powers.)

Who are your real-life heroes?
Easy, my mother. She has had more than her fair share of challenges and still possesses a sense of calm and grace.

Words to live by:
That which does not kill you makes you stronger.

Who have been your mentors?
My mother and Tom Reich, General Counsel for MGM Mirage Entertainment & Sports.

When you were a child, what job did you most want to have when you grew up?
That’s a toss up between Dallas Cowboys Cheerleader and lawyer.

What is the most dangerous thing you have ever done?
Worked with lions, well, I worked NEAR lions, and flew the SkyScreamer free fall attraction at MGM Grand Adventures over 200 times.

What is your most marked characteristic?
My positive attitude and piercing hazel eyes.

What one word or phrase do you wish people would say more often?
You’re right, Linda! (just kidding). THANK YOU—it goes a long way when it’s sincere.

How would your friends describe you?
Terminally perky and fiercely loyal.

What would you like to do as a follow-up career once you retire from the practice of law?
Rock star or Starbucks Barrista extraordinnaire.

Favorite sport to play?
Does Wii bowling count?

Least favorite sport to play?
NFL football for sure. But I am a devout fan from the audience.

Who would you most like to meet?
My dad, he passed away when I was 4.
 

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This Newsletter has been prepared by Lewis and Roca LLP for informational purposes only and is not legal advice. Readers should seek professional legal advice on matters involving these issues.