Legal Muse

Moving Legal Muse Blog

2010-09-22T01:38:00.002-05:00

Please note that Legal Muse has moved to www.legal-muse.com.

Ringtone Copyright Royalty Rates

2010-07-19T10:00:00.001-05:00

"Answer the phone, answer the phone" - that's what my cell phone screams in the voice of my daughter whenever someone tries to reach me. I recorded it a while back and it amuses me and everyone around me every time it plays. What happens, however, when you record someone else's creative work as your ring tone?

Under US copyright law, users of compositions must pay copyright owners when recording a composition. When the recording party and the copyright owner do not negotiate a license, Section 115 of the Copyright Act provides that the Copyright Royalty Board can establish a predefined rate which allows the recording party to record the composition without the explicit permission of the owner of the composition's copyright. In traditional recording settings, this is often refereed to as a mechanical.

In the recent decision DC Circuit decision Recording Indus. Assn. of Am. v. Library of Cong., No. 09-1075 ruled that the Copyright Royalty Board's decision that royalties paid for use of compositions as ring-tones should be be paid as 24 cents per recording (penny-rate) rather than as percentage of the wholesale rate (the RIAA argued the rate should be 15% of the whole rate charged). The court affirmed the reasoning of the Copyright board who found that “that a single penny-rate structure is best applied to ringtones as well as physical phonorecords and digital permanent downloads” because of “the efficiency of administration gained from a single structure when spread over the much larger number of musical works reproduced.”

The basic reasoning - which I agree with - was that a flat penny rate is the fairest and simplest method of compensating individual songwriters. This is usually true for most creatives. Keeping licensing of copyright and trademarks as simple as possible reduces disputes over the method of calculations.

Twitter Bribe to Benefit Springboard

2010-06-13T15:19:00.007-05:00

The gist: To benefit Minnesota Creatives, I will bribe the entire world to follow me on Twitter for $1 each.

I’ll also be drawing for 2 tickets to Springboard for the Arts' Bounce Bash to benefit the Artists' Access Healthcare program.

Here’s how this is going to work:

If I have 500 total followers by noon on June 25th, I will donate $250 to Springboard for the Arts. Follow me here: http://twitter.com/kunkle_law

For every follower (new or old) that sends out a tweet promoting Springboard and the Bounce Bash using the hashtag #bouncebash, I will enter them in a drawing for the tickets.

Not sure of what to say? Here’s the simple version for Twitter:

Kunkle_Law – Donating $1 to @Springboard #bouncebash per Twitter follower: http://muse.kunklelaw.com/

For more information on Springboard and the Bounce Bash go to: http://www.springboardforthearts.org/AboutUs/BounceBash.asp

If you are interested in doing more, please consider donating a few dollars directly to Springboard or coming down on the 25th to the Bounce Bash.

I hope you choose to participate and make a difference.

Ken

AIGA Solopreneurs breakfast event

2010-06-10T08:30:00.002-05:00

From AIGA Minnesota Website. Sign-up available at the AIGA website. Event is Thursday, June 24, 2010.

Discover your entrepreneurial spirit and business desire. If freelancing or self-employment is in your future, this event will provide ideas, possibilities and insight. Join us for this special event, where a trio of speakers awaits your questions. Hear from Doug Powell, Principal, Schwartz Powell; Dan Woychick, Principal, Woychick Design; and Kenneth Kunkle, Kunkle Law PLC.

Kenneth Kunkle is a local attorney whose practice is focused on working with creative professionals. Blogging at muse.kunklelaw.com, Ken provides a wide field of knowledge in the areas of business, copyright and trademarks. His long history working in, and with, a variety of creative fields provides a unique understanding of creativity and the law. Ken will be discussing issues related to business structures, work for hire and independent contractor status. www.kunklelaw.com

Doug Powell − a designer, business strategist, entrepreneur, and curator of the blog Merge − will offer next steps to help you build your great new business ideas. Or maybe allow Doug’s inspiration to bust you out of a narrow way of working. He suggests the next generation of designers will have to find other ways of working, providing value and generating revenue. Learn tips to start and launch your design-driven business. www.schwartzpowell.com and mergedesignblog.com

Dan Woychick is a designer and creative strategist with over 20 years dedicated to helping non-profit organizations communicate more successfully. He has helped clients with brand identity and positioning, market research, and the design and production of print and electronic communications. Dan is experienced in building a network of collaborators, hiring employees, working from home and renting office space. He will share his thoughts on marketing yourself to find clients and focus your work. For more info, go to www.woychickdesign.com or read his blog, think + do: an exploration of non-profit marketing and design

Time: Doors open at 8:30 A.M.; Presentation from 9:00–10:30 A.M.

Magic Words for Copyright Transfer

2010-06-07T15:52:00.008-05:00

Last week the 8th Circuit Court of Appeals (which covers Minnesota) ruled in Thomsen v. Famous Dave's of Am., a case involving a copyright infringement claim by an independent signage designer that designed and built various signs and interior elements for Famous Dave’s Restaurant around the Twin Cities. Following a prior dispute between the parties, where Thomsen alleged infringement of his copyright (no work for hire agreement or other assignments were entered into), the parties entered into a settlement agreement. As a part of that settlement, the parties agreed that:

Thomson ". . . is releasing all copyright, proprietary design and sign work to [Famous Dave's] in all other restaurants that he has worked on with the exception of . . ."
Adopting language from the 9th Circuit, the Bench ruled that

183 F.3d 922

While not earth-shattering, this opinion is interesting in that it appears to be the first opinion in Minnesota that explicitly adopts the position that simple wording in a copyright transfer can meet the necessary language needed to assign a copyright under Section 204(a) of the Copyright Act as long as the basic terms are of the transfers are spelled out.

For Creatives, this opinion makes clear the importance of having clear and understandable agreements in place. Reliance on technicalities is not in the best interest of the parties. While some aspects of copyright transfers and assignments require “magic words,” other aspects can be transferred or otherwise affected by ill-fitting language and contradictory clauses. Having a contract reviewed by an attorney can help by providing trained eyes to help make sure that what you think you are signing is what you are actually signing.

Trademarks and Pepper Potts - Is Iron Man a good or a service?

2010-05-17T14:58:00.013-05:00

Warning: this may be one of my more nonsensical posts.

After seeing Iron Man 2 this week, I felt compelled to speak out about the misinformation propagated by Pepper Potts. During a scene in which Tony comes into Pepper's office, we overhear Pepper talking to an unidentified party about the suit. In the conversation (which I am editing to avoid spoiling it for anyone who went to see Robin Hood this weekend instead), Ms. Potts repeatedly references the intellectual property right in the suit being based on trademark law. My beef? It is clear from the story line, that the issue is one of patent law, not trademark.

Trademarks generally serve two purposes: 1) to provide consumers with an assurance as to the source of goods or services; and 2) to protect the value that a business receives from creating and marketing a product. Patents, on the other hand, are intended to protect inventors by giving them the sole ability to utilize or license their creations. While the suit could serve as a trademark for Tony Stark's services as a super hero, it should be clear to anyone that has seen the movie that the discussion in question was more properly framed as an issue of patent law.

Am I being nit-picky? Well . . . Yes. But as a copyright and trademark attorney, Pepper's lack of understanding ruined the entire film for me - or at least it distracted me for 5-10 seconds.

Does theTwitter ToS dedicate everything you post to public domain?? - NO!

2010-05-05T00:28:00.013-05:00

I use to say that it was a myth that if it was on the Internet it was free to use. While still a myth, photojournalist Daniel Morela may have reason to question whether this in fact still true.

Morla was recently sued by Agence France Presse (AFP) for “antagonistic assertion of rights” for accusing AFP of violating his copyright in several photos taken following the January earthquake - Morela has counter sued for copyright infringement. AFP has asked for summary judgment that it did not infringe on Morela's copyrights (complaint). AFP's claims are interesting because, in part, they note that since Morela used Twitter to distribute the photos (which he did not - he used Twitpic), the Twitter Terms of Service (ToS) granting Twitter the right to distribute the photos should be extended to AFP as well. Besides the fact that AFP appears to have little understanding of the facts of their own case, this reading of the Twitter ToS is a little odd.

The Twitter ToS provide that:

You retain your rights to any Content you submit, post or display on or through the Services. By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).

You agree that this license includes the right for Twitter to make such Content available to other companies, organizations or individuals who partner with Twitter for the syndication, broadcast, distribution or publication of such Content on other media and services, subject to our terms and conditions for such Content use.
While it is possible that AFP is making the argument that the second clause which allows Twitter to make the content available to partners and that they in fact are partners, it is clear from anyone's reasonable reading that this scenario is not what is intended by this agreement.

The much sparser Twitpic ToS has a similar clause, but its sparser writing style makes the intent of these types of clauses much more clear. The Twitpics Terms of Services specifically notes:

While I believe that AFP's arguments are weak (though other claims raised by AFP may have more merit), they do help to illustrate that Creatives that use various forms of social media or SaaS solutions related to the creation or distribution of their work should be aware of, and understand, the ToS for those sites. Otherwise, you risk obscure boilerplate agreements giving away your work for free - or at least claims to that effect by multinational corporations.

CoCo Day Camp: “Common Myths and Misconceptions About Copyrights and Trademarks”

2010-04-29T16:08:00.005-05:00

On Thursday, May 6th, I'll be providing a seminar for creative professionals on how creative professionals are affected by copyright (e.g., public domain, fair use, joint works and work for hire) and trademark law at CoCo in downtown St. Paul. the program is set to run from 10am to 12pm.

Cost:
Session + 1/2 day of coworking: $30
Session only: $15

About CoCo:
CoCo is a coworking and collaborative space in Lowertown St. Paul (and coming soon to Minneapolis), where independent workers and small businesses can gather to share ideas, team up on projects and get some work done. We’re an alternative to working from home or the local coffee shop.

Who can Sue when a Freelancer is Discriminated Against?

2010-04-29T14:51:00.005-05:00

Freelancers take note: Under Minnesota Law if you have formed an LLC or other business entity and you experience discrimination at the hands of one of your clients, as an individual you cannot make a claim under Minnesota's Human Rights Act (Minn. Stat. § 363A.17 (2008)), which authorizes parties to a business contract to sue for business discrimination in the performance of that contract.

The Minnesota Supreme Court reasoned in Krueger v. Zeman Construction Co. that the focus of the statue was the relationship of the parties, not on the individual subject to the discrimination. As a result, the court argued that an individual employee, even one that is a single member owner of an LLC, is not the intended beneficiary of the statute and therefore they cannot file a lawsuit in their individual capacity.

While I generally believe freelancers should consider business entities like LLC over that of sole proprietorship, this case provides a stark example of how there are some disadvantages to forming a separate legal entity and an evaluation of the advantages and disadvantages should always be considered.

The 2010 Midwest Art, Entertainment & Sports Law Institute

2010-04-26T16:03:00.002-05:00

I will be presenting along with many other area attorneys at next weeks Midwest Art, Entertainment & Sports Law Institute. Come out and hear about some the latest opportunities and challenges facing the attorneys for the art, entertainment and sports communities. http://www.minncle.org/Materials/Seminars/67410.pdf

Highlights Include:

Former ASCAP executive and current president of a music publishing company, attorney Ron Sobel will “teach, discuss, rant and rave” about intellectual property pitfalls, new media trends, current revenue models and licensing protocols
Music publishing contracts and other issues in the digital age
The FTC’s take on endorsements and Internet advertising
The hottest legal and ethical concerns in college sports
A review of core intellectual property concepts, as well as contract, licensing entity basics with a nod to the creative client
The Ramifications of Supreme Court Review of American Needle
Your Client Said WHAT?? Lauren Bloom, J.D., L.L.M., author of The Art of the Apology, will give us valuable insights into helping our clients out of potential PR and legal nightmares

When is a farm boy just like any other farm boy?

2010-03-29T10:36:00.014-05:00

When is a farm boy just like any other farm boy? That's the question at the heart of a recent Federal Circuit decision (Odom's Tennessee Pride Sausage, Inc. v. FF Acquisition, LLC, No. 09-1473) involving a decision by the USPTO to grant a trademark registration to FF Acquisitions (a SuperValu company) over the objection of Odom (a retail food conglomerate).

Despite the fact that the registration in question was merely adding the body onto an already registered mark making up the torso of a farm boy (mark on the right), Odom was concerned that the mark was now likely to confuse consumers and opposed the registration, citing its own registrations. Even though Odom argued that there were other factors to be considered under the DuPont test for likelihood of confusion, the USPTO and the Circuit court summarily dispatched the complaint by noting that the registered marks differed in the size and shape of the hands, styles of hats, shoes on the feet, and apiece of straw hanging from his mouth.

In its appeal to the Federal Circuit, Odom argued that the USPTO was wrong in basing its decision that there was no likelihood of confusion based a single DuPont factor and not considering other factors. The legal question was whether consideration of the single DuPont factor involving similarity of the marks was enough for the court to conclude that there was no likelihood of confusion and to allow registration - it was. The Circuit court went further and noted that even if the USPTO had considered all the other factors, the dissimilarity of the marks was , by itself, a strong enough reason to deny Odom's claims and to allow registration of FF Acquisitions' mark.

This opinion is a reminder that trademarks are limited and do not create ownership in an entire concept. The focus when adopting a mark is its overall distinctiveness. A mark cannot be deconstructed into individual pieces for the purpose of eliminating distinctive qualities, because that is not what a consumer does. It is the overall impression that makes the difference.

AIGA MN - Cocktails with Creatives

2009-12-30T20:01:00.003-06:00

Come on out and mingle with a variety of creatives (and one lawyer) from the Twin Cities.

I will be sponsoring the AIGA MN's Cocktails with Creatives in January. It will take place at the Peacock Lounge, the bar part of Erte Restaurant, in Northeast Minneapolis on January 7th from 6 to 8 p.m. Happy Hour goes until 7 p.m. and parking is free anywhere on the streets. Relax, munch, chat and enjoy!

FTC Endorsement Guidelines - Typicality Claims

2009-12-02T00:07:00.007-06:00

Effective December 1, 2009, the Federal Trade Commission (FTC) has adopted new advisory guidelines concerning use of testimonials in advertising. These modifications and clarifications concerning FTC enforcement have raised concerns in many industries that rely heavily on testimonials as a large component of their marketing efforts.

What are these guidelines about?
The FTC is charged with enforcement of federal laws prohibiting deceptive trade practices – i.e. false advertising. To accomplish this mission, the FTC adopts rules and issues policy guidelines regarding the laws.

Complete Bulletin available on KunkleLaw.com

Audio from a recent interview with CoachingToys.com

Public Performance and Ringtones

2009-10-28T16:01:00.004-05:00

As if to demonstrate why the general public continues to question the validity of all copyright claims in music, ASCAP recently provided us with one of the stupidest and greediest copyright cases in the recent past. (opinion at www.eff.org). After being sued in relationship to the reasonableness of its blanket licenses (related to its antitrust exemption), ASCAP argued that when someone's cell phone rings with a musical ringtone, the ring is a public performance of the composition and therefore the phone companies owe licensing fees for each call. The Electronic Freedom Foundation, who filed an amicus brief in the case, noted that: “Under this reasoning from ASCAP, it would be a copyright violation for you to play your car radio with the window down!" While I am not sure it is quite this bad, the arguments advanced by ASCAP do require a great deal of legal gymanstics in order to work.

While the law of copyright is intended to be largely technology neutral, with any newer technologies, the courts are often called upon to interpret how copyright applies in new circumstances. - ringtones are no exception. For example, a few years back the recording industry obtained clarification from the Copyright Office over whether a mechanical royalty was necessary for creating the digital files that make up ringtones - the outcome was a decision that ringtones were in fact subject to a statutory/mechanical license payable by the makers of the ringtones. The arguments made by ASCAP for performance licenses, however, are much less persuasive than those made for mechanicals. ASCAP made several legal arguments to support its position, some more technical than others, but all them largely coming down to a discussion of whether the activation of the ringtone by an incoming call constitutes a public performance that is not exempt for claims of copyright infringement. ASCAP basis its arguments on two separate theories: 1) that the downloading of the ringtone is the same as a public performance, and 2) that sending the signal activating the ringtone is part of a performance authorized by cell phone companies.

Downloading Ringtones is Not a Performance
ASCAP argues that under the “Transmission” clause of Section 101, which provides that the transmission of a protected work that is made available to the public is an act of infringement. ASCAP first argues that the Verizon allows its customers to download songs, and that these downloads are public transmissions. Wisely, the court points out that the download is being made to one party and is not to the public at large. ASCAP, however, goes an additional step and argues that the download is also the first step in a two step process whereby the performance is shifted to such times as when a phone company customer receives a telephone call which others may overhear. In an odd bit of irony, this argument strikes me as ASCAP attempting to use a time-shift argument FOR infringement.

Playing of compositions: Direct and Secondary Liability
ASCAP also argues that even if the transmission by the cell companies is not infringement, the playing of the music by the owner of the phone is, and that the phone company is either directly or indirectly liable for the infringement due to its participation in the process of the music being played. Perhaps the strangest argument made by ASCAP is the one that the court notes is their primary argument - ASCAP argued that the playing of any ringtone was in effect a direct performance by Verizon on the basis that Verizon sends a signal that triggers the playing of the music and therefore they are the instigators and the source of the performance in some Rube Goldberg like manner. ASCAP’s second argument is based on secondary liability, which requires a finding that there has been a direct or primary infringement by one party (the cell phone owner), and is aided in some way by the second (Verizon).

While the court addressed many sub-issues related to their claims and every theoretical possibility, the majority of its analysis were based on a finding that playing of ringtones are generally just intended for use by person who's phone it is on, and is therefore not a public performance as defined by Section 101. The court backed this argument up by noting that even if the playing of the ringtone was loud enough to be heard by a general audience and constitute a public performance; Section 110(4) exempts the public performance from liability if there is no commercial intent in making it public.

Conclusion
ASCAP cited many cases to support its position in this case – the majority of which were cases involving mechanical rights to reproduce a copyrighted work rather than ones dealing in issues of performance, which the court points out are not in dispute and in fact have already been paid. While in many cases the payment of performance royalties in addition to mechanical is entirely proper and appropriate, the attempt of ASCAP to apply a secondary license in this context is clearly overreaching, and it is this type of overreach that causes the general public to begin to question all copyright protections, which in turn only serves to hurt the very people that ASCAP is suppose to be working for – the artists.

Public Performance

2009-10-27T13:47:00.003-05:00

What is a performance license?

One of the exclusive rights of composers of songs is to control the right to publicly perform the song publicly. Of course with the way that the music industry has developed, it is not practical in most cases to go to the composer each time a radio station or concert hall wants to play a song for their customers. Coming to the rescue (Debatable, but that's another post) are the folks at ASCAP, BMI, and SEASAC (and a few others). These organizations, commonly referred to as Performing Rights Organizations (“PROs”), have entered into agreements with thousands of composers and music publishers for the right to represent them and to license their music to radio stations and venues. While technically everyone involved (DJ, sponsor, and venue) can be held to jointly infringe a copyright, in practice the venue and promoter is most often the one that is expected to have obtained a license for music performed.

What is public?

The trick comes in when deciding what a “public” performance is. Section 101 of the U.S. Copyright Act notes that:

To perform or display a work “publicly” means to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered. . .
As a result, most weddings, bat mitzvahs and the like would typically fall into this category of non-public performance and would not require approval by the composer and no PRO license would be necessary. With this said, a party involving 500 people who include many friends of friends or one in which some form of admission is charged will likely not fall into the category of “normal” and the use of admission will demonstrate “open to the public.”

Bottom line

Performers or venues that play to audiences other than “normal” families and their acquaintances should consider obtaining a blanket license form the PROs – an ounce of prevention is worth a pound of cure.

Bratz Revisted

2009-09-21T11:56:00.004-05:00

In the continuing case of the Bratz doll, the Ninth Circuit recently ruled in the case of Art Attacks Ink, LLC v. MGA Ent'mt. Inc. While the case dealt with several issues, of interest to me is the portion of the ruling dealing with whether Art Attacks had proved adequate access to their character that they sold at fairs and on their website.

In the opinion, the court went out of its way to note technical weaknesses of the website as evidence of the small likelihood that there has been any access to the designs. In particular, the court noted that it "took a full two minutes" for the website to fully load; and that the website did not use meta tags that contained the words "Spoiled Brats." The court then drew the conclusion that:

A website with such limitations could not have widely disseminated the copyrighted Spoiled Brats material.
It is not clear from the opinion how this analysis of load times and meta-tag relevancy was conducted. While I would agree that it is relevant if the load times mentioned were from 2009; it appears that the time referenced is from the late 1990's, when the site first went live. Consumer's patience with load times has un-questionable changed over that time period and a two minute wait may have been perfectly reasonable in 1996. Additionally, it is not clear why the court thinks that information must be contained in meta-tags in order to be relevant to search engines (a fact many SEO folks I'm sure would like to question.)

While I have doubts that Art Attacks could prevail in its underlying case, the court using this questionable understanding of the how meta-tags and search engines works, and their current day expectations of speed, really create a flawed ruling. It would be unfortunate if trial courts recognized this opinion as a demonstration that a website must contain specific terms in its meta-tags to be relevant in showing possible access in copyright litigation.

UPDATE: Court issues injunction related to enforcement of decision.

Bringing Conciliation Court Cases

2009-03-31T10:00:00.000-05:00

Conciliation court was created to allow citizens to bring legal actions for smaller claims that would normally be difficult to bring due to the expense and knowledge needed to bring a suit in district court. Generally, these courts allow individuals to bring claims of up to $7,500 ($4,000 in cases involving commercial consumer credit transaction), or order the return of property. However, these claims may not include claims for title to real estate, libel or slander, class actions or medical malpractice.

Additionally, since these are state courts, they can not hear matters of federal law such as disputes over copyright ownership. They can, however, hear cases involving breach of contract that involves copyrighted material. This means that the conciliation court can not hear a case involving ownership of a copyright, but it can hear a case involving whether a party has paid what they owe for the creation of copyrighted material.

An important thing to remember before you file a conciliation court matter is whether you will be able to collect anything in the event that you win your case. If a person has no money, collecting the judgment may be next to impossible. However, keep in mind that judgments are good for a period of ten years.

In the event you do decide to sue and you win the court will not automatically collect the money from the defendant. In order to collect your money you will be required to get a writ of execution from the court. A writ will not be issued until after the time for the defendant to appeal has passed and until certain documents are provided to the court.

Once the writ has been issued, plaintiffs need to locate property to be seized and inform the sheriff’s office where the property can be found so that they can carry out the writ. Defendants can be forced to disclose assets when a plaintiff files an order for disclosure. This process will take approximately thirty days. In the event that a defendant has been sued by other people, the sheriff will first execute writs on behalf of the prior plaintiffs.

Additional information on the conciliation court process can be obtained from your local county court office and at http://www.mncourts.gov/.

Audit & Record Keeping Provisions

2009-03-24T10:00:00.000-05:00

Whether you have partners, or are contracting for royalties from another party, one of the most common provisions in any licensing & partnership contracts is one that provides a means and method of keeping financial records of the project or business. The exact language will differ slightly depending on the specifics of your circumstances, but common terms will include what types of books are kept, how and when audits may occur, and a description of what is to happen in the event of a problem with the records.

Records
While there are a variety of record-keeping methods, typical contract provisions regarding record-keeping will simply provide that the books are complete and accurate. In most cases it is understood that the books will be kept in accordance with “generally accepted accounting principles.” Furthermore, in some circumstances, state statutes may regulate how the books are kept.

Audits
Once it is decided what and how records are kept, one of the most important elements of a record-keeping provision is one that allows audits of the records. This is useful in keeping everyone on their toes, and it provides a means by which everyone can feel comfortable that everyone is being treated fairly. However, it is important to remember the difference between an audit and the right to inspect the records. While the right of a party to inspect records is often unequivocal and required by statute, the right to audit can be more easily limited. Audit provisions typically address when an audit may occur, who can ask for one, and who will pay for the audit. Often the number of times a party can request an audit during a specific time period is limited and how much notice is needed before an audit can occur also varies. Audit provisions usually provide that the party requesting the audit bear the cost of the audit.

Resolution
The last element of a record-keeping provision is one that spells out what happens in the event that an audit uncovers a problem. This element should lay-out how corrections will be handled in the event that the audit uncovers either overpayment or underpayment of funds. In addition, the provision can also provide that in the event that there is an underpayment in excess of a certain amount (5-10%), the cost of the audit shifts to the responsible party.

Providing an orderly way to handle potential disputes over money is a great way to resolve disputes before they start.

Tax Deductions for Creatives

2009-03-18T15:28:00.006-05:00

As Tax day approaches its important to take into account targeted deductions that benefit Creatives. One such deduction is the Domestic Production Activities Deduction (AKA Section 199 deduction) which was meant to encourage U.S. job creation. The deduction was created in 2004 as a part of the American Jobs Creation Act of 2004 and is one of those nice benefits that is targeted at small businesses operating as sole proprietors, partnerships, LLC, or S Corps.

So What?
For many creative based businesses, this deduction may provide a significant deduction on gross income, based on the amount of W-2 wages spent in the production of their work. The deduction specifically singles out wages paid out in the sound recording, software (including websites), and film (excluding porn) industries, as well as producers of personal tangible items (clothing, books, etc.) for an additional tax credit against profits.

What to do?
Simple - if you are engaged in one of these categories, had a profit, and paid W-2 wages, make sure that your tax preparer is aware that you may have this additional 6% deduction available to you, or if you prepare your own taxes, be sure to look though the instructions for Form 8903 .

IRS Circular 230 Notice:
United States Treasury Regulations require me to disclose the following: Any tax advice included in this document is not intended or written to be used, and it cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

Response Regarding MN Arts Cuts

2009-03-17T10:00:00.000-05:00

Recently I sent letters to my state representatives regarding the proposed disproportionate cuts to funding for the MN Arts Board. I was pleased to receive a response from my state senators which reads in part:

Thank you Senator - your thoughtful response will be remembered during the next election.

Music Publishing Administrator

2009-03-12T00:24:00.003-05:00

I recently had the opportunity to consider whether a US artist with airplay in Europe would be better served to find a publisher or to simply hire an agency to administer his rights overseas. While it is hard for any self-reliant musician to pay an extra percentage for doing something that they do themselves in the US, not considering such an arrangement might be leaving money on the table.

These agencies can provide independent musicians and small publishers with instant international reach, which includes their bookkeeping expertise, use of sub-publishers in other countries, administrative services to register the copyrights and to affiliate with performing rights groups, and options related to their services in shopping the music for other uses.

What to look for

When considering these groups, I recommend that you ask them about the following:

Do they have experience with your type of music? (Yes)
Will they register the copyright in the songs on your behalf? (Yes)
Will they handle the administration of registering you with U.S. rights societies? (Yes)
Will they collect mechanicals from foreign labels? (Yes)
Do they have affiliates in other countries where your music is popular? (Yes)
How often will they send statements (Quarterly)
Shopping (don’t expect it, but it can be added)

Foreign Administrative groups can be of great help in dealing with quirks of local/ non-US laws related to how royalties are calculated and paid. Having them work through the process on your behalf has its advantages and likely outweighs the extra percentage.

Who Owns What? - Tuesday March 10, 2009

2009-03-04T13:42:00.003-06:00

On Tuesday, March 10 at 1 PM, the Twin Cities chapters of the National Writers Union and the Professional Editors Network will hold a free workshop about permissions and copyright and other intellectual property issues concerning writers and editors.

Location: St. Louis Park Library, 3240 Library Lane, St. Louis Park. Two attorneys—Debra Kass Orenstein and Kenneth Kunkle-- will explain copyright and permissions.

Please join us for this FREE event! For more details about the Twin Cities National Writers Union, visit http://www.nwu-tc.org For more details about the Professional Editors Network, visit http://www.pensite.org

Arts Funding in Minnesota

2009-02-23T20:20:00.003-06:00

Dear Legislator,

I am writing to you concerning Governor Pawlenty's budget plan cutting arts related spending and elimination of the Arts Board by 2011. These proposed cuts are simply a bad idea, and are contrary to the express wishes of Minnesota voters.

Last fall, Minnesotans sent a clear message that they value the arts and felt that dedicated funding was an important statement of who we are. Governor Pawlenty’s cuts, however, seem to try and take back the very increase that voters demanded. Passage of the amendment was a clear message sent by voters that they want MORE investment in the arts and culture, not less.

A 2006 study showed that Minnesota non-profit art organizations had $840 million in economic impact on the state. The same study showed that for every one dollar of investment by the state art boards in artist, there is an $11 return on that investment. Furthermore, these non-profits are often the incubators for for-profits arts enterprises which represent millions more dollars in economic impact for our state. “The arts” in Minnesota are small business. Artists and arts organizations buy equipment and supplies; hire employees; rent studios; and contract for services. Budget cuts that affect this industry have a direct and immediate impact on more than just the artist, but also to the countless business and employees that they support. Funding through these agencies has an economic multiplier effect that should not be overlooked or dismissed.

According to a 2001 report by the National Governor’s Association Center for Best Practices, “If states intend to build their economies on the jobs of the future and improve rural communities…they must cultivate a creative workforce and attract arts-based businesses.” Yet, the proposed budget cuts will cut funding to organizations that cultivate this part of the economy by over 33%.

Yes, it can be argued that, the arts now have dedicated funding through the state sales tax, however this funding is still in the pipeline and is years off in being fully realized. Cutting funding now fails to take seriously the importance voters have placed on the arts, and will harm many small businesses in these productive industries at a time when they are in a great position to help invigorate the economy.

Cutting funding for the arts in Minnesota is not in the best interest of Minnesotans. The arts community uses the money it receives, it does not simply use the grants and funding to pay down credit cards or by television sets and DVD’s – they use the money to run their business and support other businesses and individuals. The money they receive is recirculated throughout Minnesota’s economy many times over and in the process it enriches our lives in the ways that Minnesotans have said they want. Please see to it that this important part of our local small business economy is not harmed by short sighted thinking about what artists bring to our economy – oppose these reductions.

Work for Hire

2009-01-31T00:19:00.003-06:00

One issue that people often overlook when drafting agreements involving creative works is the copyright concept of “work for hire.” Failing to come to a clear understanding of the parties intention can cause unnecessary conflict that neither party really benefits from.

What is Work for Hire
Simply put, work for hire addresses issues of copyright ownership when the work has been created for the benefit of someone other than the creator. Typically, the owner of a copyrighted work is the person who creates it, however, if a work is deemed to be a Work for Hire then ownership belongs to the hiring party. Work for hire situations occur in two basic ways; 1. works created by employees and 2. works created by independent contractors.

Federal law states that Works Made for Hire is:

(1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. (17 U.S.C. sec 101)Employee Presumption
Works created by employees in the scope of their employment are presumed to be works for hire and are owned by the employer. The main question in these situations is whether the work was created in “the scope” of the employee’s employment. For example, the janitor of a publishing company is not not responsible for writing manuscripts, however, he might be responsible for maintaining training materials related to his job - the manuscript would be outside the scope of his employment, while the training materials would belong to the company as a Work Made for Hire.

Contractors
However, many works are created in situations other than employee/employer relationships. In the case of professionals like graphic artists, photographers, or web page designers a work may be created under the terms of a contract. In these cases, if the work falls within certain categories of works (it may also be a work for hire. These guidelines require that the work be of a certain type, specifically created for the hiring party, and that the parties must explicitly state in writing that they intend for the work to be a work for hire.

For the creative professional, the distinction of what is and is not a work for hire is important. Clarification of the issues from the start is a great method of avoiding misunderstandings down the road.

Forum Selection in Creative Commons Licenses

2009-01-30T11:00:00.000-06:00

Users of Creative Common's licenses beware!

Chang v. Virgin Mobile USA, LLC
2009 WL 111570 (N.D.Tex. January 16, 2009)

Texas plaintiffs posted a photo to a popular picture sharing website using a Creative Commons licenses. The photo was then down loaded by an Australian company who used the photo inconsistent with the Creative Commons 2.o license and Plaintiff's wishes. Plaintiff sued Defendant in a Texas court and Defendant moved to dismiss for lack of jurisdiction. While many factors were considered, of particular note is how to court pointed out that the license did not require the license to take place in Texas.

In fact, the Creative Commons license used specifically does not contain either a forum selection clause or a choice of law clause that would outline where cases should be heard and under what state law a dispute will be analyzed. T he Creative Commons FAQ specifically notes that the selection of jurisdiction in the license

http://wiki.creativecommons.org/CC0_FAQ

These clauses are commonly used in most transactions to provide some guidance to the parties to know where and under whose laws a dispute will be heard - to avoid problems such as the one in the Chang case.

While I understand the passion for Creative Commons licensing, it is this type of outcome that highlights for me why licensing parties should take a step back and make sure they really understand what they are doing when using these licenses. It also raise the question in my mind of whether licensors should consider making some additions to these terms such as adding in something stating the residency of the licensor, that the license is entered into under the laws of licensor and that all disputes will be heard in the licensor's state/forum.

Baseball Uniforms as Trade Dress: MLB v. Donruss

2009-01-26T08:00:00.001-06:00

An interesting case was recently filed involving baseball card manufacturer Don Ross and Major League baseball. Among several counts involving, minor league players, retired players and current players is a claim that that Donruss inappropriately used the trade dress of the former Major League players. Interestingly, the complaint seems to indicate that there isn't a claim of trademark infringement related to the cards with the former players. While it is not spelled out in the complaint, it appears that the claim is that even though the logos have been removed from the pictures of these players (thereby avoiding the trademark claim) that because the colors and other parts of the uniform are visible, the trade dress has been infringed.

It is standard practice to remove the logos on licensed memorabilia of sports figure, but if this case plays out in favor of MLB, it would appear players will have to be completely stripped of any identifying indicia to avoid the claims by MLB. Trade dress must be distinctive and non-functional ~ while I will admit to not being a major sports fan, but it seems to me that proving these elements is going to be a difficult task for MLB. If in fact MLB is claiming a trade dress in the uniforms and is successful, it raises all sorts of issues for merchandisers, former players, and sporting good manufacturers.

The complaint has been loaded online at http://www.scribd.com/doc/11055023/Complaint-MLB-Don-Russ-Baseball

Business and the Law Seminar

2009-01-12T21:58:00.005-06:00

This evening I had the pleasure of giving a presentation at Women Venture to several women working to develop and start new businesses. I gave a presentation entitled Business and the Law which covered a variety of issues related to protecting the business owner's rights and managing their liability risks.

While it is easy to focus on the doom and gloom of the big picture economy, hearing the plans of these business women highlights the importance of not allowing the stories in the news to prevent businesses from moving forward. Opportunities do exist -people simply need to keep an eye out for the right situations. People wiling to take the risk at this point will be well situated when better economic times come along.

For more information on Women Venture and their programs, go to www.womenventure.org.

An Oldy But Goody: Copyright & Fireworks

2009-01-09T09:00:00.002-06:00

The following is from a response I made to a listserv (remember those?) over ten years ago. I got to thinking about the subject again yesterday after The Colbert Report made a reference to a fireworks display I worked on a long time ago.

As time has passed since then, and I am no longer involved with these displays, I note that I have changed my position on this a bit. While I maintain that the display is clearly subject to copyright, it is highly likely that most photographs of a display would incorporate a fair use appropriation of the display and would not infringe.

Kinda fun looking through old posts though.

Deceptive Hot Dogs: Food Trademarks

2008-12-30T23:45:00.005-06:00

Found in a complaint in a recently filed trademark case:

"The hot dog, synonymously identified over the years by a host of names including frankfurter, sausage, frank, wiener, dog and others, has a rich and long history in the United States."
http://www.scribd.com/doc/9620013/Complaint-Dogma-Hot-Dogs

Ok, I confess, I have no reason for posting this other than the fact that it amuses me that the attorney who wrote this sat down to write out synonyms for hot dogs. Some other synonyms include:

Georgia hot, boaster, crowd-pleaser, dog, flaunter, foot long, footlong, frank, frankfurter, grandstander, hotshot, pigs in a blanket, red-hot, redhot, sausage, showboat, weenie, weenie, wiener

http://thesaurus.reference.com/browse/hot%20dog

Barbie v. Bratz: Scope of employment and tainted copyrights

2008-12-17T16:39:00.009-06:00

Think that idea that you put together in your free time is free for you to use? Think again. While not binding in any court here in Minnesota, the legal battles between Barbara Millicent Roberts (Yes, that's her full name) and Cloe, Sasha, Yasmin, and Jade recently took a turn for the worse for Bratz manufacturer MGA Entertainment Inc. and are a good example of why creative professionals need to understand what their employers view as their work responsibilities, and why companies hiring creatives need to make sure they know the origins of those great ideas coming from new employees.

After a large number of Mattel employees, including Bratz designer Carter Bryant, defected and came to work at MGA and MGA launched its Bratz line, Mattel filed suit claiming the Bratz dolls were designed on their dime and therefore they held the copyright for their design. After a jury trial that resulted in a jury finding that the original four Bratz dolls where the property of Mattel, District court Judge Stephen Larson ordered MGA to stop producing MOST of its dolls and accessories and to stop selling them in February 2009 (with remaining stock to be recalled and destroyed). Additionally, Judge Larson (who earlier this year wrote a decision involving the heirs of Superman co-creator Jerry Siegel) ordered that early drawing produced by Carter Bryant that were created while he was employed at Mattel be turned over to Mattel.

This case illustrates two interesting issues in copyright law. (1) if you are an employee, work performed in the course of your employment is the property of your employer; and (2) ownership of a copyright includes the right to make derivative works.

Scope of Employment
Under U.S. Law, works created in the scope of your employment are considered to be the property of your employer. Seems fairly cut and dried, but for Carter Bryant the issue was a little more convoluted. Mr. Bryant's design responsibilities at Mattel were limited to hair and fashion design. After leaving Mattel in 1998 for a stint in retail sales, Bryant claims to have conceived the dolls, he then returned to Mattel in 1999, only to defect with other Mattel employees in 2000. While eventually coming to the conclusion that the original Bratz were developed during Bryant's employment with Mattel, it is interesting to note that the jury felt that these designs fell into the scope of his employment of hair and makeup design.

Derivative Works
In his ruling, Judge Larson said "Mattel has established its exclusive rights to the Bratz drawings, and the court has found that hundreds of the MGA parties' products, including all the currently available core female fashion dolls Mattel was able to locate in the marketplace, infringe those rights," Even though only four dolls were found by the jury to be the original property of Mattel, the fact that hundreds of subsequent derivative products were created based on those products means that ownership in the copyrights belong to Mattel.

This result of this case illustrates that while internal segmentation of job responsibilities exist in large corporations, companies may not rely on such designations when it comes to claiming ownership of multi-billion dollar product lines, and that once the door is open and a product line has been tainted with an infringing copyright, the entire product lines might end-up being destroyed and the manufacturing floor will go silent.

Now on Twitter

2008-12-09T23:58:00.001-06:00

Just added myself to Twitter. Want to know how that goes? Log on to find out.
www.twitter.com/kkunkle

SPNN Presentation

2008-11-18T23:39:00.002-06:00

I had the opportunity the other night to cover for another attorney in a presentation at the Saint Paul Neighborhood Network (SPNN) regarding copyright law, release forms, and fair use in video production. I typically enjoy these programs, as I always learn new things based on the questions I receive. As I experienced when I conducted a similar presentation last year to a national association of public media, the questions were well thought-out and addressed the many of central legal issues that new comers and old hands alike run into when creating video productions. Unfortunately, many of the questions necessitated the maddeningly frustrating answer of "it depends." This a problem that aggravates many clients, because obviously if they are paying for your expertise, they expect concrete, text book response. Unfortunately, to fully resolve most people’s questions related to fair use and privacy rights requires a fuzzy answer, as various criteria must be weighed against one another and more than likely the answer is unclear absent taking the most conservative of courses. While the fuzzy answers may frustrate, they often provide a “teaching moment” for the client which can be used in the future to avoid problems. This type of educating of clients is important and clients looking to hire attorneys should look for this when working with their attorneys, so that the next time the issue comes up, they can sharpen the boundaries around some of these fuzzy legal issues.

Election Judge

2008-11-06T16:37:00.003-06:00

I had the fortune to serve as an election judge last Tuesday. Even though the day is long (16 plus hours), performing that service is one that I enjoy every time I do it. Not only is having the opportunity to serve the community a positive experience, but having the opportunity to see my neighbors come through the door to exercise their civic voice is a joy that I can recommend to everyone. This year was no exception and in many ways it was even more enjoyable as the number of first time voters was high.

In many ways the outcome here in Minnesota is illustrative of the importance of exercising that civic voice. The presidential race was one in which, through the power of many first time voters, an "improbable" candidate was elected and a milestone in our nations history has been reached - regardless of your opinion of the outcome, there can be no denying that this election was different.

In contrast, even though the presidential election was decisive in Minnesota, the race for the Senate remains hinged on a scant few hundred votes. I mention this, because this result also illustrates that while your vote is often just one of many and it is easy to feel that it does not matter, the closeness of this election highlights that if just a small number of people can have an impact.

Liability for Withholding Passwords

2008-10-30T20:43:00.006-05:00

Update (6/8/10): Terry Childs was found guilty of one felony count of denying computer services.

Does your company have a clear policy concerning who may receive admin passwords? The city of San Francisco apparently has some problems in this area.

Terry Childs

IT manager Terry Childs was arrested earlier this year for refusing to provide administrative passwords for the city's computer network. The city alleges that he was setting up a network that he could take over remotely and take down at his whim - Mr. Childs claims that the policies of the city did not allow him to provide the passwords to his managers and that once he turned them over to the Mayor, the management simply didn't understand the technology enough to understand how to use them.

Apparently out of fear that his release will result in a melt down of the city's computer network, the judge in the case has set bail at 5 million dollars, as opposed to a lower bail such as one million as is common for murder suspects.

Password Policies

While the facts are clearly in dispute, the case demonstrates: 1) the need to thoughtfully consider your password policies and those of companies you are dealing with, 2) the need to have clear documentation on systems available for others to understand how your systems operates, and the need to consider whether to make sure that your contracts address liability issues related password and access issues.

For a good article discussing the case go to www.infoworld.com

Jacobsen v. Katzer - Open Source infringment

2008-09-26T14:30:00.001-05:00

In August, the Court of Appeals for the Federal Circuit issued a ruling (Jacobsen v. Katzer) that has been widely discussed as acknowledging the rights of developers of open source software. This opinion, while not necessarily binding in Minnesota, is helpful in illustrating important issues that relate not only to open-source software licensing and development but to general contracts that apply to everyone.

The dispute involved an open-source developer and a company that used the open-source code as a part of their own software. Despite a license that required that the open-source developer be credited and copyright information retained in subsequent use of the code, the defendant stripped out this information. The issue was whether failing to provide this information caused the subsequent software to be an infringement of the plaintiff’s copyright, or whether it was simply a breach of contract - the difference meaning considerably different remedies.

The opinion contained an extensive discussion on the importance of “conditions” verses “covenants” in copyright agreements. The court found that the language found in the agreement requiring that copyright information for the open-source developers be provided in subsequent iterations of the code was not simply a promise (covenant) to do something, but rather it was a conditional requirement for the license. The court also noted that while copyright law only protects economic interests (rather than moral rights), the requirement of attribution and copyright notification in open-source licenses is in fact related to the economic interest of promoting the open-source community and in promoting the services of many of its participants.

While this opinion is useful to illustrate many important principles, it must be kept in mind that it does not provide a blanket cause of action for infringement merely because software contains open-source code. What it does do is to show the importance of controlling the origination of code and providing appropriate attribution. Additionally, while not as clear in the opinion, businesses licensing software or other intellectual property should pay attention to the specific language and terms of the agreement, as it can be paramount in controlling whether the agreement is controlled under copyright law verses contracts.

Copyright Basics

2008-06-05T21:28:00.001-05:00

Every once and a while it is good to go back to basics.

What is a copyright?
A copyright is a set of rights (often referred to as a "bundle of rights") afforded to the owner of original works. Under federal law these rights include the right to reproduce the work, prepare derivatives of the original, and the right to perform the work publicly. By controlling these rights the owner may receive income from licenses in the form of royalties or directly from the sale of these rights.

How do I get a copyright?
Under current U.S. law all that is required to get a copyright is that the original work be "fixed" in a "tangible form." For example, if you are a writer, once the words appear on the page (or on computer disk) you have a copyright. There are no registration requirements to obtain the copyright, however, in order to enforce the copyright the work must be registered with the Copyright Office at the Library of Congress. Additionally, the work must have been registered in order to seek statutory damages or attorney's fees in the event that you are forced to litigate to protect your rights. If you choose to register your work you must first determine what Copyright Office classification fits into, fill out the appropriate form and submit copies to the Library of Congress along with a registration fee of twenty dollars.

What do they mean by "original?"
In the United States a work must be "original" in order to be protected by federal copyright. This originality does not simply mean that the work be new, but rather that the work has a "modicum" of creativity and not be merely the result of the "sweat of the brow." While the degree of creativity needed is debated, the central premise remains: compilation of data is not sufficient to create a copyright without some additional efforts. For example, the leading case on the subject held that merely compiling information for a phonebook does not give someone the right to a copyright in the compilation of the phone numbers.

How long does a copyright last?
Under the Sonny Bono Copyright Extension Act which was enacted last year, the term of a copyright authored by an individual is the life of the author plus seventy years. In cases involving joint works, work for hire, anonymous or pseudonymous works, the copyright exists for whichever expires first; 95 years from the works first publication, or 120 years from the year of the work's creation. This only applies to works created after January 1, 1978.

What about the © symbol?
While it is not required under current U.S. copyright law, having ©, "copr," or "copyright" located on the work is a fairly good idea since it gives the viewer notice that you are claiming your copyright. The notice should also contain the year of the creation of the work and the name of the copyright holder. For example the copyright notice for this document is "© 2008 Kenneth L. Kunkle" In rare situations involving creation of works by citizens of some South American countries, the phrase "All Rights Reserved" must also be placed on the work. For the copyright on a sound recording (i.e. record, C.D., or tape) the proper symbol is (P) with the name and the year listed in the same way as with the © symbol. However, the (P) symbol only applies to the sound recording and not the underlying work or any cover art or liner materials.

Poor Man's Copyright

2008-05-30T23:16:00.004-05:00

A frequent comment I hear when talking with musicians is that they think mailing a copy of their music to themselves will work just like a copyright registration, but cheaper. This is sometimes known as a "Poor Man's copyright." While this might (and I use the term loosely" be helpful from an evidence standpoint, it doesn't really help with who created it and it will likely run into all kinds of evidentiary problems. Writers are much better off going ahead and filling out the copyright application. By filing a registration you set yourself up to collect attorney's fees and potentially higher damages if you have to file a lawsuit. By the way, in order to even get into a court on a claim of copyright infringement you have to file a registration, but if you wait to long to register you may lose out on some forms of damages.

The better advice is to always put together a song writer split agreement - i.e. write what contribution (or percentage) of each song each person contributed. In a band setting it is good to have all members sign off, even if they did not contribute.

It is much easier to do things right the first time then to get into a fight over it later.

Morals Clause

2008-05-27T09:00:00.003-05:00

What does a "morals clause do?

Morality

The basic idea is simple - if you are in the public eye and you do something stupid and doing that stupid thing makes the purpose of the contract frustrated, then the other party can say I'm canceling the deal. For example, lets say the Queen of England enters into a contract with a department store to endorse its new clothing line "Queen." She might have a clause in her deal that says something like

Queen agrees to conduct herself with due regard to public conventions and morals, and agrees that she will not do or commit any act or thing that will tend to degrade her in society or bring her into public hatred, contempt, scorn or ridicule, or that will tend to shock, insult or offend the community or ridicule public morals or decency.
She then gets arrested for soliciting men in a downtown Minneapolis hotel. The Department store has an interest in protecting its image and can cancel the deal by invoking the morals clause. A few real life examples include: Kate Moss - Chanel - photographed allegedly snorting cocaine - Michael Nade (“All My Children”) - ABC - cocaine arrest Sidney Ponson - Baltimore Orioles - third arrest for alcohol-related violations But wait, if you think this is a concern just for those big name types, think again, these clauses can pop up all kinds of places, from local TV weathermen, to mechanical contractors.

Reverse Morals

So is turn about fair play? Some folks think so and are putting "reverse morals clauses" into their deals so that if the company is tainted by scandal, they endorser can get out of the deal. Same concept applied to other types of arrangements such as naming rights, think Enron, but the same applies to smaller deals as well.

Non-compete is based on customers, not location.

2008-05-22T20:22:00.001-05:00

While worker non-competes have are generally construed against the employer, the standard of enforceability in the sale of a business in more liberally interpreted in favor of the party seeking to enforce, as it is focused on whether the restriction is reasonable to protect the goodwill of the business that was sold.

When selling his optometry business, Jay Peterson agreed not to “participate, compete or be engaged in the business of optical goods . . . within a five-mile radius of . . ." the location of his former business. After a dispute arose concerning the terms of the sale, Peterson opened a new practice ten miles away, which would have been fine except for the fact that he then took out advertising in the newspaper located in his old town encouraging clients to come and see him at the new location. In February, the Minnesota Appellate court ruled that the Peterson could be prevented from placing those advertisements even though the business itself was outside of the designated geographic area. Interestingly, the court noted that while they felt a limited restriction was appropriate, it should not be seen as placing a general ban on advertising that may have incidental exposure to the geographic area. In relevant part the court noted -

. . .the Court will not restrain publications with large circulation areas that happen to enter the five mile area (e.g. Minneapolis Star and Tribune). We agree with the district court's reasoning. Advertising in the Yellow Pages and the Internet, which have large circulation areas that only incidentally enter the restricted geographic areas, therefore, would not be prohibited by the non-compete agreement. Rather, the prohibition is limited to advertisements "specifically targeted" at persons in the restricted geographic areas.

Sealock v. Petersen, No. A06-2479 (Minn. App. 2/5/2008) (Minn. App., 2008).

This case provides a nice illustration of how you should look at the intent of the agreement to not solicit customers, rather than trying to circumvent the intent based on the literal geography of the agreement. However, in this age of mass circulation, this decision highlights a distinction that the court is willing to make between specifically targeted marketing efforts and marketing nets cast by much broader means.

Minimum Contacts in A Virtual World

2007-10-02T20:24:00.000-05:00

This article was orignally printed in Minnesota Bench & Bar (February 1998)

Each month thousands of American businesses create new Internet sites in order to market and distribute products and services nationally or internationally. The ease of using the Internet for global marketing has struck down many of the previous financial and legal hurdles that companies were required to clear. Consequently, many businesses are rushing forward without considering the possibilities that they may be subjected to the jurisdiction of distant states or nations, and courts increasingly are finding that web pages create the minimum contacts necessary to exercise personal jurisdiction over distant defendants. Thus, the challenge for attorneys is to help businesses use this vibrant medium without being subjected to the jurisdiction of foreign states and countries.

The rest of this article can be found at kunklelaw.net

New Dance Group sued over Choreography.

2007-09-04T23:37:00.000-05:00

I ran across this interesting article today regarding a dispute over ownership of choreographed dances. (see Control of Dances Is at Issue in Lawsuit). The article lays out some of the challenges both in evaluating the works as protectable expression and in determining ownership.

Gimmie my Godly Powers Back

2007-04-13T22:01:00.002-05:00

Recent entertainment related case filed in Minnesota. It just goes to show that even the strangest cases has to be defended.
____________________________________________

Civil Action No. 05-446 JRT/FLN

Christopher Roller(Plantiff)
vs.
David Copperfield's
Disappearing Inc.(Defendant)

David Copperfield has been using my godly powers to perform his
magic. This is a labor dispute in accordance with Minn
Statute 179.06 for past/future commission compensation.

http://www.mytrumanshow.com/ explains my life and
my journey to godliness. I believe David Copperfield has been using my
godly powers to perform his magic.
We've all seen clips of UFO videos.
They dance around in the sky at the speed of thought. So we know that
godly powers can coexist on planet Earth. Godly powers means using thought
to control actions/results, usually defying explanation and laws of
physics. I believe magicians have also been granted godly powers by me
somehow, but they have been keeping it a secret and keeping the credits from
me.

If David has godly powers, then he must be using my powers. That,
or I need detailed explanation (in person) of how he does his tricks,
performed/explained in the courtroom (complete confidentiality), and I will
leave him alone if I'm wrong - i.e. tricks/illusions are done
conventionally. I've politely asked David, via email, to show me how his
tricks are done, with no response.

If godly, I want back-pay compensation - 10% past/future career
earnings. Estimating 10% of past career earnings of over
$50,000,000.

The Human Side of the Deal

2007-04-12T10:35:00.001-05:00

It was recently speculated that the settlement of a $60 million dollar royalty lawsuit against EMI by the Apple Corp. was partially driven by a desire of Paul McCartney to begin having Beatles music available for downloads, which in turn was also a factor in the exit of Beatle's executive Neil Aspinall who, according to reports, had largely opposed allowing the Beatles catalog to go online. [See]

This just goes to show that business may be business, but it also has a very human aspect. Business decisions are made by people, who make decisions for business purposes -- but in the end, decisions are often driven by factors outside the business. In this case the divorce and lack of antenuptual agreements by Paul McCartney may, as is speculated, been a factor the ouster of a top executive, driving the settlement of a multimillion dollar lawsuit, and a future milestone in digital distribution.

Fart Dolls and Opinions

2007-04-10T10:38:00.000-05:00

While you would think the first posting of a new blog would take the high road and post on something impressive in order to flex a little muscle, I can't resist making this the first post.

In what is one of the more amusing topics for a case that I've seen lately, the U.S. 7th Circuit Court of Appeals recently issued an opinion in a copyright case involving "fart Dolls." The dolls name you ask? - "Pull my Finger Fred." An interesting opinion, however I suspect the judge enjoyed the opportunity to be a little juvenile - I mean how often is he going to have the opportunity to use some version of the word "fart" over 40 times in a single opinion, or my favorite "silent but deadly." Let's face it, this is a rare opportunity for you as a judge and I'm frankly a little disappointed he didn't take it further. As an attorneythe thing I find fascinating is that not only are hundreds of thousands of these dolls being sold, the attorneys were at one point awarded over 500k in fees!!!

http://caselaw.lp.findlaw.com/data2/circs/7th/052498p.pdf