I’m speaking today as part of this seminar on movie making in Michigan presented by the Institute of Continuing Legal Education and cosponsored by the Arts, Communications, Entertainment & Sports Section of the State Bar of Michigan.  Here’s a breakdown of the program:

Date and Time: 06/03/10, 1:30pm-4:30pm

Location: The Inn at St. John’s, Plymouth

Program:

Yours truly will be presenting a lecture on copyright law for creative artists this Friday, May 21, 2010, from 9:00 a.m.—1:00 p.m., at the Muskegon Area ISD.  The seminar is intended to cover the basics of copyright law for artists, musicians, and writers with some bonus material on First Amendment, trademark, and right of publicity issues.

The seminar is $30.00 but includes lunch.  Register online at muskegonisd.org/development.  If you have questions contact Rochelle Barr Sartorius at (231) 767-7267 or rsartori@muskegonisd.org.

–Matt

CBS Interactive Inc. v. National Football League Players Association is the most recent case permitting the commercial use of professional athlete’s names and statistics without permission.

CBS Interactive operates the website CBSSports.com.  The NFL Player’s Association acts as the exclusive collective bargaining representative for active players in the NFL.  Among other things, the NFLPA has the right to license the use of the individual players’ names, signatures, facsimile, voices, pictures, photographs, likenesses, and biographical information in connection with “group licensing programs” involving six or more players (e.g., fantasy sports, video games, etc.).  NFLPA assigned this right to Players, Inc. in exchange for royalties.  Players, Inc. in turn licenses this right to companies like CBS to use in programs such as fantasy sports.  In fact, for several years CBS did just that, running both free and “pay for play” versions of its fantasy league under a license agreement with Player, Inc.

However, in 2008, CBS refused to renew its license after the Eighth Circuit in C.B.C Distribution and Marketing Inc v. Major Leage Baseball Advanced Media determined that use of baseball players’ names and statistics did not violate any right of publicity, but that even if it did, persons enjoyed a First Amendment right to use the players’ names and statistics that prevailed over any right of publicity.  When Players, Inc. threatened to sue, CBS brought an action for declaratory judgment that its use of player information was permissible under the CBC case.  The Minnesota District Court in the CBS case agreed.

The NFLPA and Players, Inc. attempted to distinguish CBS’s use of player information from the use in CBC case by claiming that they were used in such a way that users of the CBS fantasy football site might believe that the players endorsed the CBS site.  The Court rejected that theory because “the manner in which the player information is presented is akin to newspapers and magazines, which routinely display pictures and information about celebrities, including professional athletes.”  The Court also rejected the idea that the CBC case result stemmed from the unique place baseball holds as a “national pastime” since football arguably has a larger audience than even baseball.  The Court, therefore, found the CBC case controlling and granted CBS summary judgment.

–Matt

With the emergence of Michigan’s burgeoning film industry comes a new wave of so-called talent agents and managers in the state.  In the entertainment industry, the role of a “talent agent” (or “agent”) is to get his artist-client work, like a personnel agency.  The role of a “manager” (or “personal manager” or “business manager”) is restricted to only giving business and career advice.  The reason for this distinction is that, in California and New York, agents must be licensed and are heavily regulated, whereas managers need not be licensed and are largely unregulated.  Persons acting as legitimate managers in these states, in order to avoid licensing and regulation, are very careful not to procure employment for their clients, even if such procurement were merely incidental to their overall management services.  Managers acting as unlicensed agents in California and New York risk having their contracts voided and, thus, losing all their commissions.

The California and New York regulatory scheme for agents and managers is so well-known in the industry that many Michigan “managers” may be under the belief that they too can avoid state licensing laws by limiting their activities to business and career advice.  They would be wrong.  Michigan’s Occupational Code, MCL 339.101 et seq., recognizes two types of “personnel agencies”.  Type “A” agencies, which are employment agencies that place clients in direct contact with employers (i.e., agents), and Type “B” agencies, which are more in the nature of consulting agencies and assist clients in making basic career decisions (i.e., managers).  Both types require a license in Michigan.  A person operating a Type “A” or Type “B” personnel agency in the state, without first obtaining the appropriate license, is bared from bringing an action in court to collect compensation for their services.

In Hudson v. Mathers, 2009 WL 735857 (Mich. App.), the plaintiff learned the hard way.  The unlicensed plaintiff, Hudson, and one of the defendants, Moore, entered into a management agreement, whereby the plaintiff was to provide Moore with “advice, counsel and guidance” in the development of his career as an artist in the entertainment industry, in exchange for a fee for those services.  Thus, the plaintiff qualified as a Type “B” personnel agency, as defined by the Occupation Code, and was required to be licensed.  No license.  No lawsuit.  No fees.

The Court of Appeals rejected the plaintiff’s reliance on a provision of the management agreement that required the application of Georgia law to the contract, as Georgia had no relationship to the parties and the provision was a transparent attempt to avoid Michigan law.  The Court further rejected the plaintiff’s equitable claims, such as unjust enrichment, because to do so would defeat the statutory ban against lawsuits to recover fees by unlicensed personnel agencies.

The bottom line to Michigan talent agents and managers: make sure you’re licensed.

–Matt

Our very own Don Baker is quoted in an article on the sometimes tricky implementation of royalty triggers in license agreements in this month’s edition of Technology Transfer Tactics, a publication on best practices in tech transfer (paid subscription required).  Here’s the quote:

Basing a royalty on annual sales, as Alder discovered, is one of those areas with a distinct grayish tint. “You have to deal with defining ‘annual,’” explains Donald H. Baker Jr., a principal at Safford & Baker PLLC, Bloomfield Hills, MI. “Does that mean calendar year sales? Sales during a rolling 12-month period? And do you measure it when it’s collected or when it’s accrued? You have to be very careful to be sure the terms are crystal clear. There’s no substitute for extremely tight definitions.” He adds: “If you have trigger, you’ve got to build a lot of structure around anti-avoidance. Say you have a license agreement that says the licensee owes 6% of net sales until those sales hit a certain point, and then after that, it’s going to be 8%. Now you’re talking about, ‘Net sales to whom? End users? Affiliates?’ Any time you’ve got a trigger, you have to work harder.” Still, he calls royalty triggers “a really useful mechanism, because having flexible approaches to solving economic problems is another arrow in your quiver.” Indeed, he enthuses, “I think they’re great, and I use them all the time, and in a variety of contexts. They really make a lot of sense because they recognize that a constant royalty rate rarely recognizes what’s going to happen across the life of the IP. Triggers represent simple recognition of the fact that in the early stages of an enterprise, the licensee will be spending more to develop the market. So why not incentivize that somehow?”

–Matt