Tag Archive for contracts

NBA2K16 should pay for the “Extra Value” Added to the Games by Players’ Tattoos

April 15, 2016 articles Comments Off on NBA2K16 should pay for the “Extra Value” Added to the Games by Players’ Tattoos

A tattoo is undoubtedly a work of art, and once inked onto a person’s skin, that art is permanently “fixed” as a part of that person. But is it “fixed in a medium” as required for protection under the Copyright Act?

That is the question posed by the makers of the wildly popular basketball video game series, NBA2K, in answering a lawsuit brought by the owners of the copyrights to the tattoo designs featured on some NBA players in this and prior years’ games. After making a deal with the tattoo artists to exploit their designs in return for a royalty, Solid Oak Sketches, LLC offered 2K Games, the makers of the NBA2K series, a license for the tattoo designs, but they declined. Ultimately Solid Oak filed suit for copyright infringement against the video game makers and developers, Visual Concepts LLC, 2K Games Inc., and Take-Two Interactive Software, Inc. on February 1, 2016 after this year’s video game, NBA2K16, was released.[1]

Tattoos meet copyright standards

The Copyright Act has two requirements for copyrightability: the work must be an original work of authorship,[2] and it must be “fixed in a tangible medium of expression.”[3] The “fixation” requirement is not limited, but may be “any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”[4]  The definition section bolsters this wide view of the requirement: “A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.” (Emphasis supplied.)[5] No one would argue that an individual’s body is not permanent or stable enough to be a medium of expression.

The issue of the copyrightability of tattoo designs is well settled, as they are original works of authorship registrable in the Copyright Office just like any other art.[6]  The copyrightability of a tattoo design on a person’s skin, which is only one “copy”, has been questioned by legal scholars and the defendants in this case. However, a tattoo on a person can be copied, reproduced, and communicated, just like other works, through copies of the tattoo on a person’s skin reproduced in other media. In the case of the tattoos on NBA players in the NBA2K games, the works are copied and reproduced not only hundreds, but MILLIONS of times in the games.

Owners have exclusive rights

Under the Copyright Act, the owner of the copyright, whether the original artist or his or her assignee, has the exclusive right to exploit the work. This includes the right to copy and reproduce the work, to publicly perform or display the work, and to prepare derivative works.[7] The very fact that 2K Games reproduced the tattoos on NBA players’ bodies for its games, and also reproduced them on their product packaging and in their advertising materials, shows that the tattoos on a body are capable of being reproduced in other media. Making these copies and exploiting them commercially is the sole right of the copyright owner. Even LeBron James could not make copies or license others to make copies of his own tattoos in this case, since without a waiver, it is assumed that tattoo designs are owned by their creator, not the person who pays to have that design inked on their skin. This was illustrated in the lawsuit filed by the tattoo artist who created Mike Tyson’s tribal face tattoo against Warner Brothers for reproducing the tattoo on a cast member of the movie “The Hangover 2” and using it prominently in its advertising. Tyson had signed an agreement that the tattoo design was solely owned by the tattoo artist, so he alone had the right to reproduce the design. Warner Brothers settled the case with the artist shortly after the movie was released.[8] There have been several other cases in which tattoo artists have sued to stop the reproduction of their tattoo art in other media for profit. Tattooist Matthew Reed sued NBA star Rasheed Wallace and Nike to stop the use of the tattoo in a sneaker ad which actually featured a simulation of the tattoo’s creation. Soccer icon David Beckham’s tattooist sued him over a proposed advertising campaign which revolved around a tattoo created for him. Both athletes and Nike settled out of court with the artists.

NBA2K series is a multimillion seller

According to sales figures, NBA2K16 shipped an impressive and record breaking $4 million copies the first week of its release.[9] Revenue for Take-Two rose substantially in the second quarter of 2015, when NBA2K was released, to $364.9 million, a 169% increase from the previous year. Also digital downloads of the game doubled from the prior year.[10]  Take-Two’s 2K Sports game developers have been called “The kings of customization”, and are described by reviewers as having “upgraded their tattoo game” by allowing gamers to choose from 1500 tattoo designs that can be used to create “almost and endless array of virtual body art.”[11] So 2KSports can offer 1500 tattoo designs to customize their new game, but they do not want to pay for those designs that help them make their millions.

License offer rejected

Solid Oak Sketches, through their attorneys, attempted to negotiate a license for future uses of their copyrighted tattoo designs in early summer 2015, before the latest version of the game was released. The attorneys for Solid Oak offered a confidential settlement in compensation for 2K’s “ongoing acts of copyright infringement” in their unlicensed use of the tattoo designs in earlier years’ versions of the game. The letter pointed out that several of their clients’ copyrighted tattoo designs, namely those on LeBron James and Kobe Bryant, were featured prominently not only in the games, but also on the cover photos and advertising for those games. LeBron James was pictured on the cover of NBA2K14, with the disputed tattoos visible; that version sold over 7 million units. Those tattoos on LBJ were said to be “the face” of the 2014 game, making the tattoos’ marketing and promotional value several times higher than the other tattoos. After several correspondences between the Solid Oak attorney and the principals of 2K Sports, the game company terminated the negotiations and continued with the production and release of NBA2K16.[12]

Damages for Copyright infringement

Under the Copyright Act, damages for infringement can be calculated from the copyright owner’s actual damages suffered as the result of the infringement, or the owner can elect at any time before judgment to recover an award of statutory damages, which can range from $750 to $150,000 per infringement, depending on the willfulness of the infringement.[13] In addition, the court has the discretion under the law to allow recovery of full costs by or against a party, including reasonable attorney’s fees to the prevailing party.[14]

In their attempt to negotiate a settlement and license for future use of its tattoo designs with the heads of 2K Sports and the other defendants, Solid Oak attorneys set out what they considered a reasonable license fee. Since the courts have not decided the issue of damages for tattoo design infringement due to out of court settlements in several recent cases, and Solid Oak did not have access to 2K’s sales and revenue numbers for sales of the infringing games, the attorneys calculated the potential damages according to the only public damage award known for tattoo infringement. That award of $22,500 by a bankruptcy court to the tattoo artist Christopher Escobedo, who created a tattoo visible on an athlete in the video game “UFC Undisputed” which sold 4.1 million copies, was appealed as inadequate, and the artist settled for an undisclosed amount. Although the attorneys for Solid Oak allowed that the ultimate payout probably exceeded the $22,500 amount, they used that amount along with the publicly available sales figures for the 2K game and came up with $819,500 as compensation for prior infringements, and offered a perpetual license for all future uses of the specified tattoos of $1,144,000. They noted that most of the athlete’s careers will surpass four additional years as represented by the license fee.[15]

Alternative theories and trademark defenses

Some writers have posed different solutions to the tattoo licensing situation, including defending on the fair use theory that some of the tattoos in the games are not always visible, or are a very small or “de minimis” part of the games. That of course does not hold water with some of the tattoos on the NBA players in the games which are not only prominently featured in the game but are used in its cover art and advertising.[16] This defense ties in with another which assumes an implied license from the artist to the bearer of the tattoo, which would allow a sublicense to third parties to show the players’ tattoos in any commercial depictions of him or her. However, under copyright law implied licenses are disfavored; the burden of proof is on the defendant to prove the existence of a license by a preponderance of the evidence.[17]

Others have seen the issue as one of personal freedom, with the person bearing the tattoo having the right to publicly display the tattoo, even in commercial settings for athletes and celebrities. This argument is similar to the “nominative use” defense in trademark law, which allows the natural portrayal of trademarks and logos seen and referred to in real life situations.[18] For example, under the nominative use theory, Lebron James can appear in a film as himself with his real tattoos visible, since they are part of the “landscape” of him and of the movie. However, it would not be nominative use if Lebron James’ tattoos were focused on in the film and prominently displayed in the trailer and advertising for the movie. That would imply an association with the tattoo artist as having a connection with the film, which would help market and advertise the film, even though the artist is not connected to the movie and may not want his or her designs used in that movie. However it is clear the defense does not quite fit here, as usually it is a prominent company’s logo which has been wrongfully co-opted by the moviemakers to bolster sales of the film by association with that company. Unless a tattoo artist is famous worldwide and his or her designs well known, there is little value (or harm) in associating a movie (or game) with that artist. On the other hand, the association with the game implies that the tattoo artists or their representatives have agreed to their tattoo designs being in the game, and are being paid for them, which they are not.

Public policy argument

Other writers want to amend the Copyright Act to deny tattoo artists copyright protection for their designs by changing the definition of “copies” to exclude the human body. They argue there is a “public policy” that would prevent the potential for intrusion on the human rights of the tattoo artist’s clients by giving the artist some control over what is done with the tattoo once it is on the client’s body. The vague notion that tattoos are becoming so ubiquitous in today’s society that it would be difficult to control the use of them, and therefore the artist creating them should not be paid for reproductions of that art (while on a body) in some other medium is weak at best. Singling out this type of art may violate the tattoo artists’ constitutional right to obtain copyright protection for their creations which are legitimately protectable.

Athlete unions involved

The NFL Players Association is the only athlete union so far to address this tattoo situation by encouraging players to get an assignment, release or waiver from the tattoo artist agreeing to indemnify the game maker against third party claims before they would be allowed to have their tattoos depicted on merchandise. Several NFL players have done just that and relieved the makers of games they are depicted in from paying for the use of their tattoos. Colin Kaepernick got permission from the two artists who inked his tattoos to use them in the video game “Madden 15” released by Electronic Arts.[19] The combination of the popularity of video games featuring professional athletes as they appear in actual games and the number of athletes with tattoos makes the issue of releases and waivers a real concern for both athletes and game makers.

Enhancement of the games

As mentioned before, the reason athletes’ tattoos are so valuable to video game developers is that they make the games as realistic as possible. They are seen as an important feature of the games, partially responsible for the increase in the games’ popularity and sales.[20] The artwork provided by the tattooists is obviously a subject of negotiation for the game makers, as they make more money from the realistically enhanced depictions of the players. It is not an acceptable excuse that it would be too difficult for these game developers to get waivers from all athletes involved or a license from all the tattoo artists. You have to spend money to make money, as all filmmakers who have to pay for the music and artworks depicted in their movies know. Similarly, as the game makers’ revenue is enhanced by realistic depictions of tattoo art, the copyright owner artists responsible for their increased revenue should also share in the wealth.

 

©2016 Mary Ellen Tomazic

 

[1] Complaint for Copyright Infringement, Solid Oak Sketches, LLC v. Visual Concepts LLC, 2K Games Inc., Take Two Interactive Software, United States District Court, Southern District of New York, No. 16-00724.

[2] Id., § 102(a) (5). “… the requisite level of creativity is extremely low; even a slight amount will suffice.”  Feist Publications, Inc. v. Rural Telephone Service Co., Inc., U.S.Kan.1991, 111 S.Ct. 1282, 499 U.S. 340, 113 L.Ed.2d 358, 18 U.S.P.Q.2d 1275.

[3] Id.

[4] Id.

[5] Id., § 101.

[6] Tattoo Art v. TAT International LLC, 498 Fed.Appx. 341 (C.A. Va., 2012).

[7] 17 U.S.C. § 106(5).

[8] “Who Owns Your Tattoo? By Marisa Kakoulas, Inked Magazine, March 9, 2012, available at http://www.inkedmag.com/articles/who-owns-your-tattoo/.

[9] “NBA 2K16 Breaks Records With 4 Million Copies Shipped in Under One Week,” GameSpot.com, Oct. 2, 2015,

available at http://www.gamespot.com/articles/nba-2k16-breaks-records-with-4-million-copies-ship/1100-6431093/.

[10] Id.

[11] “NBA 2K16: Breaking Down Best New Features for This Year’s Game,” BleacherReport.com, Aug. 31, 2015,

available at http://bleacherreport.com/articles/2558410-nba-2k16-breaking-down-best-new-features-for-this-yearsgame.

[12] Id., fn. 1

[13] 17 U.S.C. § 501. § 504.

[14] Id. at § 505.

[15] Complaint for Copyright Infringement, Solid Oak Sketches, LLC v. Visual Concepts LLC, 2K Games Inc., Take Two Interactive Software, United States District Court, Southern District of New York, No. 16-00724. Confidential Settlement Communication.

[16]http://espn.go.com/nba/story/_/id/14693836/makers-nba2k-sued-graphically-representing-tattoos-players-permission

[17] 3 Melville B. Nimmer and David Nimmer, Nimmer on Copyright §10.03[A] [7] and §12.11(D) (2006).

[18] 15 U.S.C. § 1125. See, New Kids on the Block v. News America Pub., Inc., 971 F.2d 302, 308 (9th Cir.1992).

[19] http://espn.go.com/nba/story/_/id/14693836/makers-nba2k-sued-graphically-representing-tattoos-players-permission.

[20] “NBA 2K16: Breaking Down Best New Features for This Year’s Game,” BleacherReport.com, Aug. 31, 2015,

available at http://bleacherreport.com/articles/2558410-nba-2k16-breaking-down-best-new-features-for-this-yearsgame.

Mary Ellen Tomazic to speak at Cleveland On the Rise CLE

November 13, 2014 articles Comments Off on Mary Ellen Tomazic to speak at Cleveland On the Rise CLE

Contract Drafting Clairvoyance

June 22, 2012 articles Comments Off on Contract Drafting Clairvoyance

Almost no area of law is as litigious as the interpretation of contracts. Strict recording of every point discussed by the parties is helpful in making sure all aspects of the agreement have been included. The less specific the contract language, the more court time is needed to hash out what was intended by the parties. The attorney involved in the original drafting of the document is charged with the responsibility of capturing, in a snapshot moment in time, the parties’ agreements to do, give and refrain from doing certain things in their contractual relationship. If any of those understandings are discussed but not memorialized in the drafting of the contract, they may not be considered in the interpretation of the written agreement. Basic contract law tells you that any part of the discussion that does not end up in writing will be construed as “dehors” or outside of the contract, and cannot alter the written words. Most contracts add the boilerplate clause that the contract includes the parties’ entire agreement, which strengthens the interpretation that the contract is complete within its “four corners”.

Contracts drafted in rapidly changing areas such as the media and entertainment industry may detail the seemingly full outlines of the agreement, but the parties may later find that the court construes the language and provisions to exclude new formats, delivery systems, methods and contraptions not known or invented yet. James Brown, the Godfather of Soul, found that out the hard way with the employment contract he signed for his performance in the televised T.A.M.I. Awards in 1965. The contract was found by a court to be broad enough to include uses that were not invented or even imagined at that time, including sales of the program to the public in the home theater market for Beta and VHS tapes. The case came about mainly from the exploitation of a T.A.M.I. footage clip by its use in the 1991 movie, “The Commitments”, which featured James Brown’s performance on a television set watched by the characters. The contract included perpetual rights of exploitation of all parts of the performance including “all or any part of your acts, poses, plays and appearances of every kind and nature made or done by you … all instrumental, musical or sound effects produced by you, made or done by you in connection with the Performances and your services hereunder”, and the right to “exhibit, transmit, reproduce, distribute, broad cast and exploit … or the advertising or exploitation thereof, in and by all media and means whatsoever.” The contract also gave the TAMI Show producers “the right to use and display, and to license others to use and display, your name and likeness for advertising or publicizing the Performance in conjunction with and so called ‘commercial tie-ups”. Mr. Brown asserted that the phrase “in connection with” did not allow the performance in the T.A.M.I. Show to be used in separate contexts such as a full-length motion picture, but only in the publication and exploitation of the full show itself. The court pointed to the language allowing “portions” of the performance to be used The only use that was found to be prohibited by the contract were product endorsements from the footage, which Mr. Brown had a longstanding policy against. The language allowing “perpetual use … in all media and means whatsoever” was construed to allow use extending to media developed thereafter, even if not foreseen.

Still, even with general language encompassing all future uses and inventions, some specific language is required in a world where new media and means of delivery are being rolled out daily, and questions may arise whether the drafter meant to include not only new ways to deliver or play the material to which rights have been granted. For example, does a reference to “the internet” include mobile applications, online streaming, downloading directly from “the cloud” or other ways devised to obtain the material? Does the language “all delivery systems” include not only wireless devices such as tablets, phones, and televisions, but also video game consoles?

Formats pose another dilemma, as the producers of the new 3D version of “Titanic” recently found out. The copyright holders to a Picasso painting used in the movie have brought suit against the producers for more licensing money, arguing that the 3D version is a totally separate and new work for which Producer James Cameron had no permission to use the painting. The Picasso heirs had a history of disputing how the painting was used in the original movie as well, objecting to historical differences and artistic license regarding how the painting was handled.

Contract provisions granting and reserving rights can specify certain delivery methods such as those listed above, and the language used should include references to “any and all media and methods in use now, in the past, or yet to be invented” with examples of uses given “including but not in limitation of” certain types of media, delivery systems, and formats. It does not hurt to list numerous examples when contracting for intellectual property rights, as that will help to show the intentions of the parties to encompass every possible use that could be made of the material in the future. Such inclusion also puts the parties in mind of the possibilities in the future of what may happen to the rights they are granting or purchasing.

Of course, attention must also be paid to the possibility of other parties being involved with those rights in the future. For example, the original party may die, leaving intellectual property rights to his or her estate, which will then receive the benefits of the bargain struck by the rights holder. Many disputes have involved the heirs and assigns of original copyright owners such as Andy Warhol, Mario Puzo, author of the Godfather novel, Pablo Picasso, and others who argued, sometimes successfully, that the rights granted by their ancestor did not include some future uses.

Another situation may arise when the rights granted or purchased are transferred to business entities such as corporations, or are acquired in mergers by successor entities which were not contemplated at the time of the original grant. In a slightly different but instructive context, the contract between Howard Stern and Sirius Satellite radio did not end up the way that Stern contemplated and thought he understood at the time it was made. The shock jock sued Sirius, arguing that stock awards based on subscriber targets should include subscribers obtained from XM after the merger between the Sirius and XM satellite radio companies. On his radio show, Stern argued that the discussions he had during the contract negotiations gave him to understand that any subscribers obtained during the contract period would be counted toward the bonus he would be awarded at certain levels, as they were all subscribers to the same service and the two companies had become one. However, Stern’s contract did contemplate a merger, but there was a specific bonus that would be paid in that event, and it seemingly superseded and replaced the original subscriber bonus. A New York state judge agreed, finding that the contract clearly intended that the merger subscribers should not be counted toward the bonus, and agreed to Sirius’s request to throw the suit out with prejudice. On his radio show, Stern argued that since the two companies were now one, he should be paid for the merged subscribers, which may have been a winning argument if not for the contract language about a possible merger. Contrary to his understanding of their discussions, the company was not the “Sirius” that paid the original bonus prior to the mergers. But was the “merged Sirius”, which did not have to pay those bonuses, but only the merger bonus.

In contracts, language is king, and aside from certain interpretations stemming from industry and trade usages, a contract made in a moment in time could be subject to a different interpretation in a future world where situations or definitions have changed. In drafting contracts, it is best to use language allowing for all possibilities, all situations, and all changes that could occur not only here and now, but perpetually, in the future and throughout the universe.

 

© 2012 Mary Ellen Tomazic

The “Godfather Works” and the Godfather of Soul – Contracts for Assignment and Licensing of Rights Often Require Predictions of the Future

March 9, 2012 articles Comments Off on The “Godfather Works” and the Godfather of Soul – Contracts for Assignment and Licensing of Rights Often Require Predictions of the Future

When authors and musicians grant movie and television rights to use their works, it is considered to be an emblem of their success, as they receive not only monetary gain but a big assist to their fame. As much as the artists agree to assignments of certain rights in the present, they must also anticipate how those rights could benefit them in the future. A contract that assigns all copyrights to a work without any reservation of rights by the artist could cut him or her out of a lucrative payday for products created from their original work in formats and on platforms that were not invented at the time of the assignment. Contracts granted in the 1960s by Mario Puzo for rights to use his book “The Godfather”, and by James Brown for rights to use his performance on a 1965 television program called “The TAMI Show” both generated litigation over the language used.

On February 12, 2012, Paramount Pictures sued the family of the author of the original novel, “The Godfather”, Mario Puzo, for copyright and trademark infringement. Mr. Puzo had assigned his entire copyright to the novel to Paramount in 1969, granting them, among other rights, “any and all copyrights therein and all rights now known and hereafter accruing therein and thereto, forever and throughout the world, together with the sole and exclusive right to use said work, in whole or part, in whatever manner the Purchaser (i.e., Paramount) may desire including, but not limited to, the sole and exclusive right: to make and cause to be made literary and dramatic and other versions and adaptations of every kind and character of said work or any part or parts thereof and/or any or all of the characters created therein … [and] to adapt, arrange, change, interpolate in, transpose, add to and subtract from said work to such extent as the Purchaser, in its sole discretion, may desire in connection with any use which the Purchaser may make of said work.”[1] Mr. Puzo did not reserve any rights to The Godfather, except the right to publish the original novel in book form. He did not reserve the right to publish a sequel based on the characters in the first novel.

The entire movie going public knows what happened next: the movie made of the book “The Godfather” went on to become one of the most popular, famous and well loved films of all time, in fact being rated by the Film Institute of America as the third best movie of all time.[2] Not only did the movie become famous, but the stylized script of the name “The Godfather” used on the novel and all the movies has come to identify the Godfather movies and book, and Paramount registered both the name and the distinctive design used for the logo as trademarks in the U.S. Patent and Trademark Office, comprising no fewer than twelve different registrations, referred to by Paramount as the “Godfather Marks”.[3] These trademarks have been used on not only the book and movies, but on a range of products marketed around the world. It could be argued that the trademark owned by Paramount that sprang from the name of the original novel is as valuable, if not more valuable, than the copyright originally sold to them by Mario Puzo.

The complaint points out that Paramount maintained a good working relationship with Mr. Puzo during the making of the three Godfather movies, and also after his death, when in an attempt to “accommodate” the Puzo Estate Paramount entered into an agreement with the Estate granting it the right to publish one (but only one) Godfather sequel novel written by new authors. That agreement also recited the Estate’s contention that it had the right to publish subsequent novels, and that Paramount contended to the contrary. The Estate went ahead with the first sequel novel, entitled “The Godfather Returns”, which had success, and good sales, but then without Paramount’s knowledge or consent published another sequel novel,[4] which did not do well in sales and received “mediocre reviews” according to Paramount’s complaint. The family has a third sequel novel ready for release in May 2012, to be called “The Family Corleone”.

Paramount then filed suit not only for copyright infringement, as they have the sole right under copyright law to prepare derivative works of the first novel[5], but for trademark infringement claiming tarnishment and consumer confusion of the Godfather Marks,[6] which the Estate has used on the second sequel and planned to use on the third. Because of the claimed inferiority of the unauthorized sequels, Paramount says it has and will suffer damages from the Estate’s use of the Godfather Marks which is likely to cause confusion, mistake, or deception of the public as to the source of the books. The essence of trademark law is to identify the source of goods and to help bolster the goodwill and value of the brand. Having spent countless millions on the establishment of the Godfather brand and its connection to the beloved Godfather movies, Paramount had no intention of allowing the Puzo Estate to tarnish the “integrity of the Godfather franchise”.[7] A trademark being used as an identification of a movie series and products based on that series is a legitimate, though not always recognized, derivative use of the original grant of rights. The independent development of the Godfather marks by Paramount to identify its copyrighted works is a collateral right necessarily granted by the language of the original contract between Paramount and Puzo, which grants not only copyrights but “all rights now known or hereafter accruing therein” and also the exclusive rights to “use said work … in whatever manner the Purchaser may desire” including the right to use “any and all of the characters created therein”. The copyright includes the title of the work, and it is able to be registered for trademark because it identifies a series of movies, not just one, which is not able to be the subject of a trademark.[8]

The popularity of the Godfather movies, and the use Paramount made of its grant of rights, gave the owners of the intellectual property rights a very lucrative franchise which Paramount has every right to preserve and benefit from. The theory of the Puzo family estate is in direct opposition to the rights assigned and sold by their patriarch in 1969, and the language of the contract does not seem to give them a loophole in which to claim the right to create their unauthorized sequels. Paramount is claiming willful copyright and trademark infringement, and it remains to be seen how the Estate will counter that strong claim in light of the seemingly clear contract language. Mario Puzo sold the rights to everything that could possibly be created from his novel, in perpetuity, leaving nothing that could be invented later to be exploited by him and his family.

The situation was somewhat similar for the Godfather of Soul[9], James Brown, with his case against a film company for copyright infringement. In James Brown v. Twentieth Century Fox Film Corporation[10], Mr. Brown challenged the use of a clip from his performance on the 1965 television show in the 1991 move “The Commitments”. His letter agreement with the producers of the TAMI Show in 1965 was an employment contract which granted the producers sole and exclusive rights in the reproduction of his performance on the show. The contract included perpetual rights of exploitation of all parts of the performance including “all or any part of your acts, poses, plays and appearances of every kind and nature made or done by you … all instrumental, musical or sound effects produced by you (that presumably included his distinctive exhortations of “Hey!” and other famous James Brown exclamations), made or done by you in connection with the Performances and your services hereunder”, and the right to “exhibit, transmit, reproduce, distribute, broad cast and exploit … or the advertising or exploitation thereof, in and by all media and means whatsoever.”[11] The contract also gave the TAMI Show producers “the right to use and display, and to license others to use and display, your name and likeness for advertising or publicizing the Performance in conjunction with and so called ‘commercial tie-ups’”. Mr. Brown was paid the sum of $15,000.00 for these grants of rights. Mr. Brown contended that the 1964 letter agreement was ambiguous whether the grant of rights included the rights to use his performance in films, film promotions and videocassettes. He urged the court to focus on the phrase “in connection with”, and argued that it limits the producer’s rights to using his performance only in connection with the original TAMI Show itself, and not entirely separate contexts such as a full-length motion picture.[12] Mr. Brown submitted extrinsic evidence to support his interpretation of the contract language, which is allowed under California law, of industry practices requiring that consent of performers be obtained before film footage clips are used, and that other companies secured consent to use the TAMI Show footage. However, even under the permissive California standard, extrinsic evidence cannot be used to advance an interpretation to which the contract is not reasonably susceptible. The court stated that the language of the agreement expressly permitted the reproduction of a “portion” of the performance, indicating that the contracting parties contemplated the later use of the performance as segments of other larger projects.[13] The contract prohibited “commercial tie-ups” but this phrase was interpreted to mean Mr. Brown’s name and likeness could not be used for product endorsements, to which he had always been strictly opposed.[14] Finally, James Brown argued that the grant of rights did not encompass the right to the videocassette market, since it was not specified, nor was it even in existence at the time of the 1964 agreement. The court, in citing a number of cases litigating that question, found that the contract language did not limit the use of the performance to a specific medium, and quoted Rooney v. Columbia Pictures Indus., Inc.[15] : “[w]here a party has acquired a contractual right which may be fairly read as extending to a media developed thereafter, the other party may not escape that part of the agreement by showing that the specific nature of the new development was not foreseen.”

The scope of use, including geographic extent and duration, and kinds of rights desired (TV, film, DVD, online, etc) should always be carefully considered in a grant of rights. With the advent of films, television shows and even books being offered in digital form online[16] and on wireless devices such as smartphones and I Pads, questions persist about how to compensate copyright holders for their music and other works in previously released and new films and shows. In film studio contracts, the language has been changed to “all media excluding theatrical” (AMXT) for new films so negotiations do not have to occur with each new technology platform. In addition, many television show contracts are being amended to provide for rights in perpetuity, instead of the formerly standard five year option.[17]

The two “Godfather” cases illustrate the need in contract drafting to be able to anticipate things that don’t exist now and may not even seem possible – other than Dick Tracy and his two way wrist radio, who would have predicted fifty years ago the many devices we now use for two way audio and video communication? In licenses and contracts granting rights to intellectual property, nothing should be left to chance. Collateral rights such as trademarks may be created once money begins flowing from the original grant of rights, and enforcement of copyrights usually also depend on how much money is being made on the original works.

 

© 2012 Mary Ellen Tomazic


[1] Paramount Pictures Corporation v. Anthony Puzo, As Executor of the Estate of Mario Puzo, Civil Action No. 12 CIV 1268, United States District Court, Southern District of New York, Count 2.

[2] AFI’s 100 Years, 100 Movies, AFI.com (last visited 3/8/2012).

[3] Paramount v. Puzo, Count 30.

[4] “The Godfather’s Revenge”.

[5] 17 U.S.C. § 106(2).

[6] 15 U.S.C. § 1114 and 15 U.S.C. § 1125(a).

[7] Paramount v. Puzo, Count 5.

[8] TRADEMARK MANUAL OF EXAMINING PROCEDURE § 1202.08 (8th Edition 2011) available at tess2.uspto.gov/tmdb/tmep (last visited February 8, 2012).

[9] A footnote in the case quotes a statement in the complaint that “the plaintiff is known throughout the world as ‘The Godfather of Soul’, [and] alleges that he is one of the most influential living musicians in the world and is one of the greatest live performers of all time … and one of the original inductees into the Rock and Roll Hall of Fame”.

[10] 799 F.Supp. 166, 26 U.S.P.Q.2d 1626 (1992).

[11] Brown v. Twentieth Century Fox Film Corporation, 799 F.Supp 166, 26 U.S.P.Q.2d 1626 (1992).

[12] Id. at 170.

[13] Id.

[14] Id. at 171. Mr. Brown also lost his right of publicity claim in this case, as the court stated that “there is no allegation that plaintiff’s name or any aspect of his persona other than his appearance in the TAMI Show clip as it appears in the film was used by defendants to promote the product”. Id. at 172.

[15] 538 F.Supp. 211, 229 (S.D.N.Y.), aff’d without op., 714 F.2d 117 (2d Cir.1982), cert. denied 460 U.S. 1084, 103 S.Ct. 1774, 76 L.Ed.2d 346 (1983).

[16] For example, current television shows and movies are now offered for a monthly subscription fee on live streaming platforms such as Hulu and Netflix; millions of books are available for downloading to several types of “e-readers”.

[17] Melinda Newman, I Want My Mobile TV, Billboard, July 8, 2006, at 32.