To Apple, Love Taylor: Apple Responds with Royalties

“To Apple, Love Taylor” has been the tweet heard ‘round the music world.  With more than 61 million followers, Taylor Swift has become the “loudest” voice for emerging and independent artists in the music-streaming realm.  As copyright lawsuits from record companies continue to crop up across the industry, music-streaming service providers have become far more sensitive to the demands of artists and the trend for higher royalty payments.  Case in point: when Taylor “streams” for royalties, Apple responds.

Taylor’s tweet to Apple explained, “with all due respect,” why she was planning to withhold her mega best-selling album 1989 from Apple’s new music-streaming service, Apple Music.  Apparently, Apple’s plan to withhold royalty payments from musicians during the service’s initial, free three-month trial period did not sit well with Swift.  Speaking primarily on behalf of emerging and independent artists, Swift deemed three months “a long time to go unpaid.”  Taylor’s stance followed a long line of objections from songwriters, artists, and labels over allegedly unfair payment by music-streaming services.  Recently, the Turtles and other performers brought suit against Sirius XM to collect royalty payments that had not been paid for songs produced before 1972.  Previously, big streamers like Sirius XM and Pandora were not paying royalties for songs launched before 1972 because they were not protected by federal copyright law.  In the wake of the Turtles suit, Apple was swift to respond to Swift’s plea.  Eddy Cue, Apple’s senior vice-president of internet software and services, tweeted “we hear you @taylorswift13 and indie artists” and called Taylor to deliver the news personally.  Apple had reconsidered its plan and will now be paying artists royalties at the outset of its Apple Music launch.

Clearly, Taylor’s attempt at flattery, saying that the initial decision to withhold royalty payments was surprising in light of Apple’s reputation as a “historically progressive and generous company,” got her everywhere.  Taylor claimed that her complaints were not the rantings of a “spoiled, petulant child,” but rather “echoed sentiments of every artist, writer, and producer in [her] social circles who [we]re afraid to speak up publicly because [they] admire and respect Apple so much.”  As she pointed out, Apple’s plan to offer royalty-free streaming during its initial start-up period could have had disastrous effects on artists planning to release new albums during that time.  While the cost of these royalties may not be relatively significant to Apple, the goodwill and favor fostered among artists, labels, and consumers is invaluable.  Apple’s move indicates that artists are finally succeeding in shifting royalty payments more toward their favor via lawsuits, negotiations, and now very public Twitter exchanges.  The power of public opinion is not only strong but, these days, instantaneously widespread, and Apple was smart to respond.

It seems that Sirius heard Apple too.  Just days after Eddy Cue’s public response to Taylor Swift, Sirius settled its lawsuit with the Turtles to the tune, no pun intended, of $210 million for its broadcast of songs produced before 1972.  Under the settlement, Sirius will continue to play the older songs until 2017, at which time it will strike new licensing deals with affected artists.  With this settlement in place and with the established prospect for older performers to collect royalties in the future, the Turtles and Sirius are once again “Happy Together.”

This public discourse over streamed music, copyrights, and royalty payments illustrates the fast-paced evolution of the industry since the introduction of digital music files in the Napster heyday.  Streaming services have been forced to anticipate and address the demands of artists, particularly that of the growing request for greater royalties.  While a voice as “loud” as that of Taylor Swift may warrant an immediate, calculated response, it is likely we will see more music royalties and other digital copyright litigation in the years to come.

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Hold That Pose: Can the Bikram Yoga Sequence Be Protected by Copyright Law?

A type of hatha yoga characterized by a set series of postures and breathing exercises, Bikram yoga is performed in a room heated to a high temperature (roughly 105 degrees Fahrenheit). All Bikram classes run for 90 minutes and consist of the same series of 26 postures (the “Sequence”), including two Pranayama breathing exercises. Popularized by esteemed guru Bikram Choudhury in the 1970s, Bikram yoga is now taught by instructors all over the United States.

The popularity of Bikram yoga appears to have shaken the original founder’s zen. Indeed, Mr. Choudhury has sued several studios, like NYC’s Yoga to the People, for copyright infringement, reaching settlements that have prevented studios from using the Bikram name or copying the Bikram Sequence. Faced with lawsuits, such studios must either sweat it out in court or otherwise capitulate and lie down in savasana (or corpse pose).

One such case occurred in 2011, when Choudhury and Bikram’s Yoga College of India sued Evolation Yoga for copyright infringement and related claims (e.g., trademark infringement and violations of teacher-certification agreements). Codefendants (also husband and wife) Mark Drost and Zefea Samson are former trainees of Bikram’s course of study and became authorized to teach Bikram’s Basic Yoga System. The two eventually formed Evolation Yoga, which uses the same Sequence, prompting a cease-and-desist letter demanding the pair stop teaching Bikram yoga. The plaintiffs argued that the Bikram yoga Sequence should be protected as a compilation and as choreography (and are within the ambit of Choudhury’s various copyrights for his yoga-related books depicting the Sequence).

In December 2012, a California court dismissed Choudhury’s copyright claims, leaving related trademark and breach of contract claims for a future session. The court remained inflexible to the notion that the Sequence of Bikram yoga poses could be protected by copyright law, causing studios everywhere to relax their muscles. (Bikram’s Yoga College of India, L.P. v. Evolation Yoga, LLC, 2012 WL 6548505 (C.D. Cal. Dec. 14, 2012)).  The court held that although books or photographs that depict a compilation of exercises may be copyrightable, the compilation authorship would not extend to the selection of the exercises themselves depicted in the photographs: “There is a distinction between a creative work that compiles a series of exercises and the compilation of exercises itself. The former is copyrightable, the latter is not.”  Moreover, the court found that, as a functional system that promotes physical and mental benefits, yoga postures cannot be registered for copyright. In dismissing Choudhury’s claim, the opinion meditates on a U.S. Copyright Office statement of policy declaring that a compilation of exercise or yoga moves does not fall under one of the Copyright Act’s eight categories of authorship. Consequently, and according to the policy statement, yoga poses are ineligible for copyright protections. (See 77 Fed. Reg. 37605 (June 22, 2012).)

Appealing to a higher power (that is, the Ninth Circuit), Choudhury’s lawyers are trying to get the case sent back to the yoga mat. Last month at oral argument, Choudhury’s counsel argued that, while individual poses are not copyrightable, the guru is trying to protect his “creative vision” in his specific 26-pose Sequence. Balancing yoga positions with ballet poses, Choudhury argued that all such forms of physical movement should be eligible as a protectable compilation or expressive choreographic work, or, at the very least, protectable against verbatim copying.  The appellants also argued that the Copyright Office’s policy statement should not be entitled to any deference by the court.

Remaining firm in tadasana (or mountain pose), the defendants reasserted and stretched the lower court’s ruling that copyright protection extends only to books containing Choudhury’s instructions, not to the routine itself—much like a cookbook author’s inability to protect the actual cooking of a recipe.  Bikram’s arguments also have drawn bad vibes from Yoga Alliance, an international trade association, which filed an amicus brief in support of defendant, finding that Bikram’s position “would be devastating to the yoga community.”

Until the court of appeals releases its decision, Bikram yogis across the country will continue to warrior their way through 105-degree heat. (Don’t try this at Om.)

© 2015 Proskauer Rose LLP.

BMI Wins Summary Judgment of Copyright Infringement After Restaurant Owner Fails to Respond to Requests for Admission

Plaintiff Broadcast Music, Inc. (“BMI”), a music rights management organization that offers licenses to a massive catalogue of popular songs on behalf of copyright owners, brought suit for copyright infringement against the owners of the La Roue Elayne restaurant for unlicensed performance of live cover versions of eight songs in a single evening. This suit was part of a series of suits brought by BMI for copyright infringement against restaurants in Connecticut. The Court granted summary judgment in favor of BMI for copyright infringement, permanently enjoining further copyright infringement and awarding $6,000 in statutory damages and an additional unspecified amount for attorneys’ fees.

Drew Friedman, the only defendant who appeared in the case, had opposed summary judgment on the grounds that a fact issue remained as to whether he had sufficient control over the restaurant and the cover band to support vicarious liability for copyright infringement. Mr. Friedman claimed to have been cut out of the management and control of La Roue Elayne before the night in question. Interestingly, his failure to object or respond to BMI’s Requests For Admission (RFAs) doomed his opposition. Mr. Friedman never responded to RFAs asking him to admit or deny that he hired the offending cover band and that he had the right to supervise persons employed by the restaurant.

In fact, Mr. Friedman’s opposition failed to address the issue of the ignored RFAs and he never moved for leave to provide untimely responses. On that basis, the Court held that the RFAs must be deemed admitted pursuant to Federal Rule of Civil Procedure 36. The Court appeared reluctant to deem the RFAs admitted, but indicated that after a diligent search it failed to find any precedent for a sua sponte withdrawal of a represented party’s response to RFAs where the party failed to even acknowledge the existence of the request.

The case is Broadcast Music, Inc. v. The Hub at Cobb’s Mill, LLC. A copy of the Court’s Order is available here.

The Artist’s Legacy – Business and Legal Planning Issues

Sheppard Mullin Law Firm

Photographers face unique issues that must be carefully considered to ensure a continued market for the creative output and to preserve the artistic reputation. Prudently managed business affairs will minimize problems commonly encountered when closing down a studio and during the transition of business affairs from the photographer’s life to the photographer’s estate.

First, there is the issue of care for the physical works, the critical planning for the inventory, conservation and storage of the photographer’s works. Second is the issue of advantageously placing the photographer’s works; which works should be preserved, which donated, and when, where, how, including considering a sale or donation to a publicly-accessible archive as a permanent home for papers and other materials. This naturally leads to the third issue, prudent sales; how much and what part of the inventory should be released for sale each year and through what means? Is this the moment to re-examine the extant gallery relationship? These decisions require knowledge of the market, including a sense of timing, market conditions, and museum/collector interest.

Getting the house in order also includes appointing executors, attorneys, and accountants who can be trusted, who know the family or estate, who are familiar with and responsible toward the photographer’s work and the market, and who have both sensitivity and concern for the future of the photographer’s works and artistic reputation. Estate planning considerations for a photographer also include issues relevant for any individual: to provide for the surviving children, spouse and others according to the law and the photographer’s wishes so as to assure orderly transition and minimize the potential for probate litigation. For a photographer, though, preserving and enhancing a legacy also includes efficiently managing the estate to maintain continuity and safeguard the assets.

Photographers must likewise consider their intangible assets, which include copyrights, trademarks, licensing potential, and the like. It is important for photographers to register copyrights and keep track of any copyright renewal or termination rights, to be aware of current assignments and licenses of the intellectual property, and to maintain orderly files of subject releases, photographer agreements and other agreements affecting the works. Photographers should also consider licensing decisions to promote accessibility and generate revenue. It is crucial to weigh each transaction in terms of its potential for affecting the photographer’s stature in the art market. Indeed, one should consider the implications of each decision as it promotes and/or dilutes the overall value of the photographer’s oeuvre.

The photographer must identify and implement a comprehensive business and legal framework that can guide the present and govern the future in order to assure that legacy is preserved in accordance with the photographer’s wishes.

Above is the text of a handout on business and legal planning issues prepared by Christine Steiner. Christine Steiner and Lauren Liebes recently joined Weston Naef, Getty Photography Curator Emeritus, and ASA appraiser Jennifer Stoots for “What Will Become of Your Legacy”, a panel discussion at Los Angeles Center of Photography.  The panel addressed business and estate planning issues for photographers. In our next post, Lauren Liebes will address the myriad estate planning issues to consider.

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Laches, Statutes of Limitations and Raging Bull: The Supreme Court Re-Emphasizes The Pitfalls of Delay In Copyright Cases

Sheppard Mullin 2012

In Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. __ (2014), the United States Supreme Court addressed the role that the equitable defense of laches – i.e., a plaintiff’s unreasonable and prejudicial delay in commencing suit – plays in relation to a claim of copyright infringement filed within the Copyright Act’s three-year statute of limitations period.  There is no doubt that Petrella puts to rest a split amongst the Circuits by clarifying that laches cannot bar a claim for legal relief for infringement occurring within the three-year statutory window.  Yet, Petrella should not be seen as a knock-out punch to the use of laches in copyright actions.  To the contrary, Petrella re-emphasizes the important role that laches plays in connection with the equitable remedies available under the Copyright Act, and provides copyright defendants – and plaintiffs – with guidance as to whether, and to what extent, a plaintiff’s delay in filing suit may limit the availability of those equitable remedies.  Additionally, Petrella’sdiscussion of a copyright plaintiff’s evidentiary burden and comments about the Copyright Act’s registration requirements raise interesting questions about the impact that a delay in filing suit may have on a plaintiff’s ability to prove infringement.  Laches, it seems, “don’t go down for nobody.”[1]

Petrella involved a claim of copyright infringement brought against Metro-Goldwyn-Mayer, Inc. and certain related entities (collectively, “MGM”) by the daughter of Frank Petrella, who authored two screenplays (a “1963 Screenplay” and “1973 Screenplay,” respectively) and a book based on the life of boxing champion Jake LaMotta.  Id. at 7-8.  In 1976, Frank Petrella and Lamotta assigned their rights in the three works, including the renewal rights, to Chartoff-Winkler Productions, Inc.  Id. at 7.  The motion picture rights to the three copyrighted works were subsequently acquired by United Artists Corporation, a subsidiary of MGM.  Id.  In 1980, MGM released, and registered a copyright in, the motion picture Raging Bull, directed by Martin Scorcese and starring Robert DeNiro.  Id.  Frank Petrella died in 1981 – during the initial terms of the three copyrighted works.  Id.

In 1990, the United States Supreme Court issued its decision in Stewart v. Abend, 495 U.S. 207 (1990).  In Stewart, the Supreme Court confirmed that the assignment of renewal rights by an author before the time for renewal arrives cannot defeat the right of the author’s statutory successors to the renewal rights if the author dies before the right to renewal accrues.  Id. at 219-20.  In other words, if the author dies before the right to renewal accrues, then the author’s statutory successor is entitled to renew the copyright free and clear from any assignment previously made by the author.  Id.  In such a case, the owner of a derivative work does not retain the right to exploit that work when the death of the author causes the renewal rights in the preexisting work to revert to the statutory successors.  Id. at 220-21.

In 1991, following the Supreme Court’s decision in Stewart, Frank Petrella’s daughter and statutory successor renewed the copyright in the 1963 Screenplay, thereby recapturing the copyright for the renewal term unburdened by her father’s previous assignment.  Id. at 8.  Petrella, however, took no immediate action against MGM to enforce her copyright in the 1963 Screenplay.  In 1998, seven years after Petrella reacquired the copyright in the 1963 Screenplay, her attorney notified MGM that Petrella had obtained the copyright and that MGM’s continued exploitation of any derivative work – including the motion picture Raging Bull – allegedly infringed on Petrella’s copyright.  Id.  However, once again, Petrella chose to not take any immediate action against MGM because, as she put it, “the film was deeply in debt and in the red and would probably never recoup.”  Id. at 16.

Thereafter, in 2009 – eighteen years after Petrella recaptured the copyright in the 1963 Screenplay – Petrella filed a copyright infringement action against MGM, alleging that MGM infringed her copyright in the 1963 Screenplay by using, producing and distributing the motion picture Raging Bull, which Petrella alleged to be a derivative of the 1963 Screenplay.  Id. at 8. Petrella sought monetary damages and injunctive relief for MGM’s acts of alleged infringement occurring within the three-year statute of limitations period prior to the filing of her lawsuit.  Id. at 8-9.

MGM moved for summary judgment on various grounds, including the equitable doctrine of laches.  As to its laches-based defense, MGM argued that Petrella’s eighteen-year delay in filing suit after she reacquired the copyright in the 1963 Screenplay was unreasonable and prejudicial to MGM.  The United States District Court for the Central District of California granted summary judgment on MGM’s laches defense, concluding that the doctrine of laches barred Petrella’s complaint, in its entirety.  Id. at 9.  The Ninth Circuit Court of Appeals affirmed the District Court’s laches-based dismissal, agreeing with the District Court that MGM had established expectations-based prejudice, in that it made a large investment in marketing, advertising, distributing and otherwise promoting the film, including a 25th Anniversary Edition of Raging Bull that was released in 2005, believing that it had complete ownership and control of the film.  Id.

The United States Supreme Court granted certiorari to resolve a conflict among the Circuits on the applicability of the laches defense to claims of copyright infringement brought within the three-year statute of limitations set forth in 17 U.S.C. § 507(b).  Id. at 10.  Examining the Copyright Act, the Court found that the three year statute of limitations applicable to copyright claims “itself takes account of delay” because, under § 507(b) and the Copyright Act’s separate-accrual rule, a “successful plaintiff can gain retrospective relief only three years back from the time of suit.”  Id. at 11.  The Supreme Court concluded that courts are not at liberty to “jettison Congress’ judgment on the timeliness of suit” and, therefore, laches “cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window.”  Id. at 1.

Although Petrella clearly establishes that laches cannot be invoked to knock-out a claim for legal relief for infringement that occurs within the Copyright Act’s three-year statute of limitations period, it does not stop there.  Rather, the Supreme Court goes on to re-emphasize that a plaintiff’s unreasonable and prejudicial delay in commencing suit – the cornerstone of a laches-based defense – still packs a considerable punch in determining the types, and contours, of equitable relief appropriately awardable under the Copyright Act.  Of course, the availability of equitable relief is of particular significance to the parties in an infringement action, as two of the Copyright Act’s more potent remedies – injunctive relief and an accounting of the defendant’s profits – are inherently equitable remedies.

Petrella acknowledges the importance of laches in evaluating claims for equitable relief at both: (1) the outset of the litigation; and (2) the remedial stage when determining the proper relief and assessing an award of profits.  The Supreme Court confirmed that, in “extraordinary circumstances,” the consequences of the plaintiff’s delay in commencing suit may – as a threshold matter – limit the particular type of relief equitably awardable by the Court.  Id. at 20.  The Court cited Chirco v. Crosswinds Communities, Inc., 474 F. 3d 227 (6th Cir. 2007), as an example of a case where such “extraordinary circumstances” were found to be present.  In Chirco, the plaintiff-copyright owner knew that the defendants’ housing development infringed its copyrighted architectural designs prior to the defendant starting construction on the development, but took no steps to halt the development for two-and-one-half years, during which more than 168 of the units were built, 140 units sold, and 109 occupied by residents.  Id. at 234-36.  Although the Sixth Circuit Court of Appeals reversed the District Court’s dismissal of the plaintiff’s entire lawsuit based on laches, it affirmed the District Court’s judgment to the extent that it barred the plaintiff from obtaining an injunction mandating the destruction of the housing project.  Id. at 236.  The Sixth Circuit found that such relief would be inequitable given that: (1) the defendants knew about the development plans before construction began; and (2) the requested relief would work an unjust hardship on the defendants and innocent parties.  Id.  Thus, the plaintiff’s unreasonable and prejudicial delay deprived the plaintiff of an equitable remedy otherwise available under the Copyright Act.

Similarly, in New Era Publications International v. Henry Hold & Co., 873 F. 2d 576, 577 (2nd Cir. 1989), the licensee of the copyrights to certain works by Church of Scientology founder, L. Ron Hubbard, brought an infringement action against the publisher of a Hubbard biography, alleging that the biography contained extensive reproductions of Hubbard’s published and unpublished writings.  On appeal, the Second Circuit affirmed the District Court’s refusal to permanently enjoin publication of the biography based on the doctrine of laches.  Id. at 584.  The Second Circuit noted that the defendant had been aware that the biography would be published in the United States since 1986, but, despite filing lawsuits in 1987 to enjoin publication of the biography abroad, failed to compare the defendant’s biography with the books published abroad, failed to inquire of the defendant as to the planned date of publication in the United States, and failed to take any steps to enjoin publication of the book until it sought a restraining order in 1988.  Id.  Moreover, by the time that the plaintiff took action in 1988, twelve-thousand copies of the book had already been printed, packed and shipped, review copies had been sent out, and a second printing had already been scheduled.  Id.  The Second Circuit found that, had the plaintiff promptly sought an adjudication of its rights, the book might have been changed at minimal cost while there was still an opportunity to do so, but that a “permanent injunction would result in the total destruction of the work since it is not economically feasible to reprint the book after deletion of the infringing material.”  Id.  The court concluded that “[s]uch severe prejudice, coupled with the unconscionable delay already described, mandates denial of an injunction for laches and relegation of [the plaintiff] to its damages remedy.”  Id. at 585.

In addition to limiting at the outset the type of equitable relief available to a plaintiff,  Petrella acknowledged that “a plaintiff’s delay can always be brought to bear at the remedial stage, in determining appropriate injunctive relief, and in assessing the ‘profits of the infringer…attributable to the infringement.’”  Id. at 21.  The Petrella Court instructed that, “[s]hould Petrella ultimately prevail on the merits, the District Court, in determining appropriate injunctive relief and assessing profits, may take account of her delay in commencing suit”  Id.  In considering Petrella’s delay, the Court directed the District Court to “closely examine MGM’s reliance on Petrella’s delay” and consider factors such as: (1) the defendant’s knowledge of the plaintiff’s claims; (2) the protection that the defendant may have achieved through pursuit of a declaratory judgment action; (3) the extent to which the defendant’s investment was protected by the separate-accrual rule; (4) the court’s authority to order injunctive relief “on such terms as it may deem reasonable” under Section 502(a); and (5) any other considerations that would justify adjusting injunctive relief or profits.  Id. at 21-22.

Apart from confirming the significant role that laches plays in determining the equitable relief available to a plaintiff in a copyright action, Petrella hints at potential evidentiary roadblocks that a copyright plaintiff may encounter as a result of the delay associated with a laches-based defense.  Noting that a copyright plaintiff bears the burden of proof, the Petrella Court concluded that any loss of evidence that may result from a plaintiff’s delay in filing suit would likely impact the plaintiff’s ability to establish infringement.  Id. at 18.  The Court further opined that the Copyright Act’s “registration mechanism” reduces the need for extrinsic evidence because, in order for a plaintiff to be able to sue for infringement, both the registration certificate and deposit copy of the original work must be “on file” with the Copyright Office.  Id.  Thus, Petrella seems to implicitly endorse the view that a registration certificate – and not merely a pending application – is required to maintain a copyright action, an issue that is currently the subject of a split amongst the Circuits.  Additionally, the importance that Petrella places on a plaintiff’s deposit of a copy of the original work raises an interesting question; namely, what happens when the plaintiff’s delay in filing suit is such that the Copyright Office no longer has a copy of the original work in its archives?[2] In such a case, the best evidence rule may very well preclude a plaintiff from prevailing on a copyright claim if the plaintiff cannot supply a copy of the original work.  See, e.g., Seiler v. Lucasfilm, Ltd., 808 F.2d 1316 (9th Cir. 1987).  This could present an insurmountable hurdle in suits brought by statutory heirs alleging the infringement of unpublished works.

In short, while Petrella clearly limits the role that the equitable defense of laches has vis-à-vis claims for legal relief for copyright infringement occurring within the Copyright Act’s three-year statute of limitations period, it by no means absolves a plaintiff from the consequences of unreasonable delay.  To the contrary, an unreasonable and prejudicial delay in commencing suit can hit a plaintiff where it matters most – the ability to enjoin infringing conduct, deprive a defendant of profits attributable to its alleged infringement and, indeed, meet its burden of proving infringement.  Thus, laches is still a contender that should be considered when evaluating a claim of copyright infringement.

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[1] Quote attributed to Jake LaMotta character portrayed by Robert DeNiro in “Raging Bull”.

[2] Under the Copyright Office’s retention policies, deposits may be transferred to the Library of Congress, given away to other institutions or discarded, the latter generally after five years.  See, Notice of Policy Decision – Policy Statement on Deposit Retention Schedule, 48 Fed. Reg. 12862, March 28, 1983.  Full term retention requires a government filing fee of $540 in addition to the normal copyright application fee.  See, current fee schedule at www.copyright.gov/docs/fees.html.