Federal law and the laws of almost every state, including the State of Michigan, prohibit, with few exceptions, the operation of a “lottery” as a form of gambling.  It is, therefore, essential that the operators of a sweepstakes avoid the “lottery” characterization for purposes of these laws.  As a general rule, a prohibited “lottery” consists of three elements: prize, chance, and consideration.  The first two of these elements will be present in every sweepstakes or promotion where a winner or winners are selected from a larger group (i.e., chance) and then granted something of value (i.e., a prize).  The key to avoiding the “lottery” tag then is to eliminate the third element, “consideration”.

In legal parlance, “consideration” means a benefit, or something of value, conferred from one party to another in exchange for the performance or promise of performance by the other party.  In the case of a typical lottery, my money for a lottery ticket is consideration for being able to participate in the drawing and, if I win, being granted the prize.

A sweepstakes, on the other hand, avoids the issue of consideration by allowing anyone to participate in the drawing without payment or other conditions – such as making a purchase or doing some act requiring the expenditure of money, time, energy, or effort sufficient to be deemed “consideration.”  In most cases, sweepstakes avoid the issues of consideration by allowing contestants can enter the drawing simply by completing an entry form.

If you or your company are interested in running a sweepstakes or promotion involving prizes, please give us a call.  In addition to avoiding the lottery tag, a properly run sweepstakes requires good rules and procedures, and in some cases bonding to comply with applicable laws.

–Matt

Randy Safford in my office pointed me to this article on MLive.com about Michigan Film Financing, LLC, the only Michigan-based company working with producers and out-of-state lenders to facilitate film financing while maximizing state film incentives.  MFF is affiliated with S3 Entertainment in Ferndale, MI.  You can check out their website here.

–Matt

Last week I wrote about the controversy surrounding Google Street View and right of privacy concerns.  The original post can be read here.  A friend now points me to this article about a group of Japanese lawyers and professors, calling themselves Campaign Against Surveillance Society, who have asked Google to stop providing street-level, photographic views of Japanese cities, saying they “deeply violate[] a basic right that humans have.”

The article makes no mention of Google’s efforts to address right of privacy concerns by blurring faces and removing offensive or sensitive images.  Assuming Google has implemented these measures in Japan, it’s hard to understand this group’s specific concerns.  Certainly, a “surveillance society” is offensive to many people, including myself, but here the images are static (i.e., not a live video stream) and protective measures have been implemented to help safeguard privacy.  These protective measures are, of course, not perfect; the blurring technology may miss some faces and offensive content is only removed when found and tagged.  However, whatever actual or theoretical harm exists, in my opinion, is outweighed by the public benefit from the Street View service.

–Matt

(Thanks, Sara)

The subject of copyright has become increasingly complex and confusing as technology has advanced over the past quarter century, and the law has attempted to keep up.  Today, copyrighted material is literally at one’s fingertips, making it imperative for anyone producing or working with copyrighted material, including literary or visual works, to educate themselves about this area of law.

I offer a free lecture to artists and authors introducing the basics of copyright law.  In this lecture, I cover various issues including copyright registration, the scope of exclusive rights, the public domain, the work-made-for-hire doctrine, fair use and infringement, as well as more complex issues concerning licensing copyrighted work and the intersection of copyright law and the Internet.  In an effort to make this material accessible to my audience, I use plain language, without legalese, as well as concrete examples and illustrations.  The lecture is generally a two-hour presentation, and includes time for questions and answers.

If your organization is interested in this program, or if you know of an organization that might be interested, please contact me.

–Matt

Under Michigan law, the sale of a business along with its accompanying good will gives rise to an implied covenant precluding the seller from soliciting his old customers.  The argument is that once the seller pocketed the purchase price, he cannot attempt to reacquire from the buyer that which was bargained for and sold.

This does not mean, however, that the implied covenant prohibits the seller from conducting a like business in the same place.  Absent an express covenant not to compete, the seller is free to reenter the market, so long as he does not lead the public to believe he is continuing the old business.  The seller can even service his old customers, so long as he did not solicit them; that is, the customers come to the seller by their own volition.

One more interesting feature of this doctrine is that even if buyer and seller negotiated and entered into an express covenant not to compete, this has no bearing on the existence of the implied covenant not to solicit the customers of the business.

When buying and selling a business, before reentering the marketplace, sellers need to understand not only their express obligations under the parties’ agreement but also their implied obligations under Michigan law.

–Matt