Archive for the ‘Parody’ Category
Crowdfunding – Preparation, Do’s and Don’ts
Monday, August 18th, 2014
Crowdfunding through sites like Kickstarter, IndieGoGo, Crowdfunder, and the like, is an increasingly popular method of funding a project, product or company. Those approaching a crowdfunding effort should prepare from a legal perspective long before they kick off their campaign.
These are a few critical things to do, and not to do.
Let me first note that this post is intended for the “professional” crowdfunder – someone who is taking this option as seriously as any other method of funding their genuine BUSINESS. Make no mistake. Crowdfunding to gain the finances you need to produce a product, entertainment project, or other prospect – is part of advancing your BUSINESS. And should therefore be treated with equal seriousness and professionalism.
Here are a few “must do’s” before and as you engage in your crowdfunding effort. And a few “don’ts.”
1. Form your entity and get your entity the bank account it needs to operate independently of personal funds.
This may seem like a no-brainer, but often crowdfunders don’t take the time or spend the relatively small amount of money to fund their LLC or company BEFORE they engage in there crowdfunding effort.
The problem is that the crowdfunded money should go directly to the company that is going to produce the product or project. It should not go to an individual, or an individual’s bank account, only to then be pushed on to an LLC, divided among partners, or other inappropriate handling of the funds.
Why? Quite simply because commingling personal funds and company funds may jeopardize the liability protection of an LLC or corporate entity.
Best practices would be to form the LLC, company, or whatever legal entity, and then get your entity bank account - before starting the Kickstarter, IndieGoGo or other crowdfunding effort. That way, any funds raised through the crowdfunding effort can be properly deposited directly into the entity’s/company’s account.
It should go without saying that other “corporate formalities” should be followed to preserve the liability protection of the company or legal entity, and to insulate the personal assets of the company founders from claims and liability of the company. That’s the main point of the separate legal entity.
?? “Do I really need a separate legal entity?” Hell yes!
I don’t mean to sound like a lawyer, but … I am one. So … Let’s talk about liability.
Regardless of your crowdfunding campaign, you are making a product or producing some sort of project. With that comes liability.
-Funding the world’s greatest potato salad? The litigator in me thinks of salmonella – consumed by thousands of supporters.
-Making a pen? That kind of thing usually has multiple parts. The litigator in me thinks of a choking hazard from a child devouring one of the parts.
-Making an ultra cool ice chest with battery power and built in devices? The litigator in me notes that many electronic devices end up with battery heat and fire problems, or parts that can be taken off of the device and, again, consumed by kids, stuffed up their little noses, etc.
It is an unpleasant fact of our litigious world that every product that can be imagined has a potential liability that can also be imagined. A separate legal entity through which you produce your product or project separates your personal assets from the liability of the company and the product or project being produced.
A separate legal entity also demonstrates to the world, your vendors, your suppliers, and future purchasers, etc. that you are acting in a professional and businesslike manner.
There’s no question about it. You absolutely should form a separate legal entity as would be appropriate for your product or project. Do it. And do it before your Kickstarter campaign.
2. Get insurance! Before you produce anything.
Many start ups and new entrepreneurs do not want to suffer the expense of liability insurance before they know that the product, project, or company will have an actual life. Or they perceive the risk of liability from their product or project to be minimal. So they skimp on what may well be as little as $1000 for liability insurance.
What many entrepreneurs fail to recognize is that the primary benefit of liability insurance is not necessarily the insurance company paying a liability judgment. Perhaps the greatest benefit is the insurance company paying for a legal defense against a liability claim.
The other fact of our litigious society is that defending – even successfully defending – against a liability claim or lawsuit can cost tens of thousands of dollars. Easily $30,000 or more. To win. Relatively quickly.
Appropriate liability insurance provides your legal defense at no cost above the insurance premium (terms and conditions will apply). It may therefore be some of the “cheapest money” you ever spend. Or perhaps the most “expensive” money you don’t spend.
Get it. ASAP.
3. Incentives only – no ownership!
For a number of reasons, it is strongly recommend that you not offer shares of ownership in exchange for crowd sourced funding. First and foremost, offering ownership, shares, interest, etc., in exchange for funding and pledges probably constitutes the sale of “unregistered securities” according to the U.S. Securities and Exchange Commission.
In other words, its probably against the law. (Read how the SEC shut down the effort to crowdsource the purchase of PBR here).
While the JOBS Act may allow for an exception to that lawbreaking fact, that remains to be seen. Nevertheless, there is an overarching practical reason not to offer ownership shares or interest, even if it is not illegal. VC’s, angel investors, or other professional investors will likely not be interested in your company if you have hundreds or thousands of “mom-and-pop,” non-accredited investors that are owners of your company.
Therefore, it is likely a best practice to only offer “thanks and things” in response to financial pledges.
4. Don’t promote or broadcast your unprotected idea!
Be careful not to broadcast your idea until it has been appropriately protected through copyright, trademark, patent law or other means. Ultimately, an “idea” cannot be protected through copyright or patent law.
It is therefore critical that you actually have something produced, recorded, or made, so that your intellectual property – your actual, specific execution of your idea (which is protectable) – can be registered through the appropriate means.
Songs, stories, scripts, graphic design, and the like can be registered with the U. S. Copyright office. Devices and physical products maybe protectable through a combination of copyright law, trademark registration, and or patent registration.
Once again, many early stage entrepreneurs do not want to pay the money to pursue these registrations. But revealing your unprotected idea through a crowd funding effort is essentially giving away your idea. Anyone else is free to execute their own iteration of your general idea. You may be creating your biggest competition.
Also, for you would be writers and filmmakers, the writers Guild of America is not the same as copyright registration. Copyright registration with the US copyright office provides far more protection and benefit than does WGA registration.
5. Pick your company and product name carefully.
Imagine a scenario where you picked your company and/or product name, held your Kickstarter campaign, produced your product, and a year or two into your company’s great success, you are contacted by a company that previously registered the same or similar names through the US Trademark Office. Guess what – they have the right to force you to stop using your same or similar name.
You are then forced to start rebranding all over again, losing all of the name recognition and goodwill that you have developed through the lifecycle of your company and product.
Choose names that are unique, but easily identifiable and found, and research those names appropriately before putting them into use.
Once again, best practices would be to register those names with the trademark office asap so that you are “first in line” in the use of such names or phrases, and therefore you have the legal authority to force others to stop using such things in competition against you.
6. Honor your commitments!
In running a crowd funding campaign, know that you have promised to provide “thanks and things” in exchange for a pledge by a supporter – and that is a contract!
Subject to the terms of whatever crowdfunding site you use, your failure to produce and deliver as promised, or to provide whatever incentives and “thanks and things” you have promised, constitutes a breach of contract.
While it may be unlikely that one $20 supporter will sue if you fail to send them their T-shirt or other swag, several hundred supporters, or several thousand, can easily be pulled together as a class action lawsuit.
Avoid such problems. Live up to your promises.
If I may be of assistance to you, friends or colleagues in advancing your business or creative endeavors, I would welcome the opportunity to speak with you.
The foregoing does not constitute legal advice, nor does it create an attorney-client relationship between you, the reader, and Gano Lemoine or the Lemoine Law Firm. The preceding has been for general information purposes only. It is strongly recommended that you seek appropriate legal counsel regarding your particular situation and needs.
Filmmaker & Creatives Business Practices – 4 Must Do’s
Tuesday, June 4th, 2013
Aspiring filmmakers and creatives often let the contract and business details be an afterthought, thinking “that’s not fun. Or creative. And I don’t have the budget for that un-fun, un-creative stuff. I’m working with my friends… it’ll all be fine.”
But they’re unlikely to do so again after the many problems that arise (which they always do) and perhaps render their hard work practically and commercially unusable. Neglecting contracts and business formalities may prevent getting investors for your project, or may cause a host of other problems that mean a film or creative project cannot get interest or distribution.
What follows is a brief list of critical “what and why” business details that filmmakers must do, from the outset, to minimize obstacles to a film or project’s success.
1. Form a Production Company through which the film must be made. Why?
First, that will be the legal entity into which development/investment money is deposited. Why not take money/investments personally? Because of the second primary reason – liability. Liability in film development and production can come from multiple angles – from the U.S. Securities and Exchange Commission for taking investments without the proper paperwork (a “prospectus” or “private placement memorandum” – VERY different from a “business plan”), or from an accident involving the cast or crew on set, or to a bystander not part of the cast or crew (think a lighting element falling onto a passerby), or to the production “losing” funds needed to pay cast and crew.
This “parade of horribles” isn’t fiction – it happens all the time. And if it happens without the legal protection of an LLC or similar legally separate production company, the legal liability will likely fall personally on the producers and those heading up the project, and potentially onto the investors – meaning that personal assets will be responsible for whatever harm or legal claims.
The third reason is that the legal entity will be the “person” (a legal “person” under the law) that contracts with all those involved in the film – from the producer(s), directors, cast and crew, transportation, catering, etc. If anything goes sideways with these contracts, it is the legal person that is held accountable instead of the actual persons heading up and investing in the project.
2. Get a contract with the writer(s) for the legal acquisition of the script or story –a literary acquisition agreement (a/k/a an “option/purchase” agreement). Failure to do this means that the production does not have formal rights to the intellectual property it is making – meaning the writer/creator may have the ability to withdraw his material and prevent the production from doing anything commercial with footage already shot. So it is critical that this be accomplished before any production – or even development – takes place.
Think that you are “friends with the writer” and you’re therefore “in this together?” Are you willing to bet the entire project and all your hard work on that assumption? What is it that they say when you “ass-u-me” something?
Creative partnerships crumble all the time. Without a written agreement in place from the VERY beginning, the entire project is at risk.
3. Investments – get lawyer drafted investment documents. Or risk having to refund all investments, fines, jail time, and lawsuits by the investors themselves.
Under the SEC and state securities rules, if you have taken someone’s money and have given them an expectation of a “return” on that money, you’ve probably sold a “security.”
Yes, even selling shares of your little film may well constitute a “security” in the eyes of the federal and state governments. That doesn’t mean you can’t take such investments. But it does mean that if you do so without following the proper legal requirements, you may have to give back ALL of the money taken for the project (yes, all investments – not just the one that the gov’ment found out about), and it may mean fines or even jail time.
And independent of those terrible consequences, failing to have the right legal language in investment documents leaves the production open to lawsuits by the investors if they become dissatisfied with… all sorts of things – how you’ve spent the money, how long it has taken to get a return on the money, the size of the return (or lack thereof).
Proper investment documents are as much for the protection of the film and filmmakers as they are for the protection of the investors.
4. Production contracts – use them – ALWAYS. Without exception! Like it or not, a film is a business. Even the “auteur,” if he hopes to continue making filmic masterpieces, cannot ignore the business realities that filmmaking is expensive (even in this digital age), it takes money, and money rarely comes to one who does not handle it in a businesslike manner.
So even first effort indie films are a business – a proving ground to show that you can handle the business, artistic and technical demands of being a filmmaker. And as such there are contracts that MUST be used in the work of this business; contracts that clearly state who owns what, who has rights to what, profit/interest divisions, etc. The who, what, when, where, why (perhaps) and how much regarding the business transactions involved: the script/story option purchase agreement, cast and crew agreements, talent/interviewee release agreements, name and likeness releases, licensing agreements for use of the intellectual property of others (music, photographs, products, film or video clips (no – YouTube does not mean it’s in the public domain)), location agreements, craft services contracts, transportation agreements, insurance (workers comp, liability, errors and omissions, defamation protection), sponsorship and product placement agreements, distribution (foreign and domestic) agreements, appropriate trademark registrations, and the list goes on and on and on.
Ed Sullivan clip and the Fair Use Analysis
Saturday, May 4th, 2013
A recent (March 2013) opinion by the U.S. Ninth Circuit Court of Appeals (covering the West Coast and many of Western states) provides an excellent analysis of U.S. copyright law and the fair use defense.
In SOFA Entertainment, Inc., v. Dodger Productions, Inc., the plaintiff, SOFA Entertainment, held the copyright to The Ed Sullivan Show, Ed Sullivan being the iconic maker of music and entertainment careers in the 50′s and 60′s. Dodger Productions produced the live stage musical Jersey Boys, which presented in a morphed live stage musical / documentary style, the formation, success and eventual break-up of the 60′s rock ‘n roll group, The Four Seasons.
At one moment in the Jersey Boys stage show, a brief video clip of The Ed Sullivan show was shown on stage, depicting Ed introducing The Four Seasons. Following that, live performers portraying The Four Seasons began a Four Seasons musical number on stage.
In the stage production, the Ed Sullivan clip is used to emphasize the historical and real life importance of Sullivan’s introduction of The Four Seasons, thereby showing the group’s importance in American music, and particularly in response to the then-occuring British invasion.
The lawsuit arose as Dodger Productions had not licensed the clip of Sullivan from SOFA Entertainment. SOFA sued Dodger alleging copyright infringement.
In a very clearly reasoned opinion, the Ninth Circuit laid out the fair use analysis. The four simple criteria of the test, however, belies an often tricky and nuanced question, which turns on the specific facts of each specific use of copyrighted material. The SOFA court even noted, “Many fair use cases still manage to approach ‘the metaphysics of the law…’”
The basic fair use test is as follows:
1. what is the purpose and character of the use (of another’s copyright protected material), including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and,
4. the effect of the use upon the potential market for or value of the copyrighted work.
Despite 4 seemingly simple factors, the inquiry within the inquiry goes deeper down the rabbit hole.
Regarding factor #1, the “purpose and character of the use,” the central inquiry is whether the new work is “transformative.” Does the new work “add something new” to the existing work – new expression, meaning or message?
In the Jersey Boys musical, the Court found that the production had used the clip as a “biographical anchor,” using the importance and relevance of an introduction on The Ed Sullivan show to demonstrate “evidence of the band’s enduring prominence in American music.”
Transformative? Yes. Element 1, satisfied in favor of fair use.
Factor #2 – The nature of the copyrighted work, recognizes that some works, “generally creative works, like fictional stories – ‘are closer to the core of intended copyright protection than others.’” The Court found that while the entire Ed Sullivan episode, or perhaps the performances contained therein, may have been more at the core of copyright, the brief clip at issue conveyed mainly factual information – who was about to perform.
By contrast, the Court may have reached a different conclusion on this factor had the clip been one of the creative performances in the episode, as opposed to this clip being more factual in nature.
Element 2, satisfied in favor of fair use.
Factor #3 is the amount and substantiality of the portion used – the qualitative amount and qualitative value of the original work used in relation to the defendant’s justification for the use.
SOFA admitted that the 7 second clip used was quantitatively insignificant, but argued that Dodger had attempted to capitalize on the central and most beloved part of The Ed Sullivan show, Sullivan’s introduction of popular new rock and roll acts.
The Court found that, because of the brevity of the clip and the simple factual information conveyed in the introduction, it was doubtful whether the clip alone qualified for copyright protection. Moreover, the Court found SOFA’s attempt to rely on Sullivan’s “trademark gesticulation and style” as an element of copyrightable “distinctive expression” to be misplaced.
“It is Sullivan’s charismatic personality that SOFA seeks to protect. Charisma, however, is not copyrightable.”
Element 3, satisfied.
Factor #4 – the market effect; whether the supposedly fair use had a negative impact on the market for the original work and the market for derivative works (other works based on the original work), including whether the supposedly fair use became “unrestricted and widespread.”
Review of this factor, in part, reflects back to the first element, and whether the new use was “transformative.” If the new use was “transformative,” it would perhaps not have a negative effect on the market for the original material. “Where the secondary use [the allegedly fair use - here, the clip used in the stage show] is not a substitute for the original and does not deprive the copyright holder of a derivative use, the fourth factor weighs in favor of fair use. … When the second use is transformative, market substitution is at least less certain.”
The Court found that Jersey Boys was not a substitute for The Ed Sullivan Show, the 7 second clip only appeared once in the stage production, the stage production was not being reproduced on DVD, which would have allowed for repeated viewing of the clip, and that Dodger’s use advanced only its own creation without reasonable threat to SOFA’s business model.
This particular finding does seem to ignore that part of SOFA’s business model was to license clips of its intellectual property, and Dodger’s “free” use deprived SOFA of revenue it would have earned had Dodger paid to license the clip.
But no matter. According to the Court, element 4, satisfied.
Dodger’s use of the 7 second clip was deemed fair use.
The cost of Dodger proving its case – $150,000 in attorney’s fees and costs (at least). This is known because SOFA had lost a similar case previously, so the Court awarded Dodger’s attorney’s fees and costs, noting that SOFA should have known its claims in this case were likely to fail based on the outcome of the previous case.
Had SOFA not lost in a previous and similar case, it is entirely possible that Dodger would NOT have been awarded its attorneys fees and costs, thereby having paid $150,000 to defend its “fair use” of a 7 second clip it likely could have licensed for a few thousand dollars.
So while this case may support a project’s claim that their use of someone else’s copyright protected material is “fair use,” it must be considered whether a project can afford to fight that legal fight – even if certain of victory. Which, in litigation, is never certain.
You can’t afford NOT to hire an entertainment lawyer.
Tuesday, February 26th, 2013
I often receive calls from creatives with business and legal questions about their project. Many thinly funded project leaders balk when they find out that an attorney (including yours truly) charges from $375 per hour and up – to negotiate deals or assist with disputes, draft entertainment or business contracts or settlements, do copyright or life rights clearance work, assist in obtaining life rights and rights of publicity, file Trademark applications, work on some other intellectual property issue or problem or handle the myriad other needs that are necessary to: develop and produce a film, TV project, pilot, or reality program; develop a smartphone app or game; protect music and publishing rights; protect, option or sell a script; sell photographs, etc., etc., etc.
While I sympathize with the thinly funded creative project, the fact is the creative can’t afford NOT to hire an attorney to do what is needed. A few examples:
- a group of friends decide to write a script and develop a film, and shoot a sizzle reel to help raise money to produce the project. Problems presented? Without a legal structure such as an LLC or corporation, they may all be subject to personal liability if anyone sues… for anything; without proper contracts, the rights to the script, dialog, characters, plot, art direction, costumes, special effects, footage, sound recordings, talent’s performances are not vested in – that is, “owned” by – any single person or entity — meaning the rights to the various content are so split and fractured the project likely can NEVER be used by anyone for a commercial purpose. Or perhaps ANY purpose, commercial or not.
- a writer bases a script on a real person for whom the writer does not have the “life rights.” Problem? After toiling away for months or years on the script, the writer can’t do ANYTHING with the script until that little “life rights” issue is taken care of.
- adaptation of a preexisting work – a book, comic, film, or riff on someone else’s intellectual property. Same problem – without getting the rights to adapt the prior work, he who is doing the adapting can’t do ANYTHING with the work product until working out that little “adaptation rights” issue.
There are thousands of variations to these and similar scenarios.
In the attempt to save perhaps as little as a few hundred dollars on legal advice or properly drafted contracts, the creative has wasted months or years of their own time, and potentially the time and effort of all those working on the project as well.
And pulling random contracts off the internet is equally effective. The non-entertainment attorney has little concept of what they are NOT getting via the “free” internet contract. Omissions from the “free” contract may be TERMINAL to a project – but that may not be realized until far down the line, after hours and weeks and months – or years, of blood, sweat and tears.
Don’t skimp on legal advice and properly drafted agreements.
Get the needed advice and legal work at the outset of the project.
I will happily accept credit card payment for the help you need. Many other entertainment attorneys will as well.
So what do entertainment attorneys cost? A small price, considering their involvement may mean the difference between being able to utilize and prosper from your project, versus having wasted a wealth of time, effort, and creativity.
If I may be of assistance in the development of your entertainment, media, video game or app project, or in the development and growth of your business, please call or email at your convenience.
- What do movie producers do? (gointothestory.blcklst.com)
Screenplay Adaptation, w/ Pilar Alessandra, and ME!
Tuesday, December 4th, 2012
Sign up for Pilar Alessandr’aScreenplay Adaptation Workshop on December 12th, and get a special bonus… ME!
December 12th, 7PM to 10:30PM, in Sherman Oaks, CA.
Screenwriting teacher Pilar Alessandra will instruct on the screen adaptation of a play, comic or book, helping you find the right story, structure and style for your project — ultimately guiding you toward developing it for the big screen.
I will be on hand to deliver a primer on life rights, rights of publicity, and copyright licenses needed to make the adaptation yours.
See the link below for more info.
Pilar’s “On The Page” Website – to sign up for the class.
Are you treating it like a business?
Friday, November 16th, 2012
My legal practice is a mix of business clients and entertainment clients, so I come across many people that are growing their endeavor from an early stage. That early stage is frequently a natural progression from a unique combination of passion, interest and skill toward (hopefully) a profession – a going concern – whether that is a business of some sort, or a successful film, writing or music career, or the like.
That transition into a “going concern” is incredibly difficult for many reasons, not the least of which is the difficulty many entrepreneurs find in demanding value for their skill, service or idea. Too often entrepreneurs treat their “it”, whatever it may be, not as a business, but as the uncompensated passion from which the “it” evolved.
In doing so, they hold themselves back – they stifle their own growth into a going concern.
Here are a few common pitfalls to avoid.
After reading these suggestions you can push back from these difficulties with a simple phrase – “I wish I could do that, but my lawyer says I can’t.” (Feel free to substitute “business manager”, “accountant” or “soothsayer” if it helps get the message across). Somehow blaming the bad news on a trusted advisor makes the refusal more palatable to them that’s hearing it.
1. Do not give “it” away – whatever “it” is. Whether you are producing a widget, selling a thing-a-ma-jig, or building a client base, it always seems that the intended customer wants it, initially, for free. Beware – and resist this as much as possible. Admittedly this may be the most difficult of these pitfalls to avoid. Every entrepreneur has to “give away” some of their time, advice, know how, product, samples, skills, etc., to prove to the world that they have something of value that should be paid for. Granted.
But as the old country wisdom goes, “why buy the cow if the milk’s for free?”
Resist the give-away. If what you are offering has value, require that its value be recognized. If a “free sample” has to be given, fine. Just keep it to a minimum, and be clear in your communication that very quickly the value must be recognized – and paid.
Anyone that expects otherwise is unreasonable – and should be passed by quickly and without regret.
2. Confirm that value in a clear writing – always. Early entrepreneurs often find it difficult insisting that an agreement be put in writing. They often feel that insisting on a writing shows distrust of the opposite party, and therefore may sour the new relationship.
That is looking at a written agreement from the wrong end. First and foremost, forming a written agreement is a process that makes the parties focus on the details of their intended arrangement – clarifies the deal and the details of the deal – so as to avoid misunderstandings later. Simply going through the process of discussing and committing to writing what each party intends will help avoid future misunderstandings and mistakes.
Focus on the who, what, when, where, why (sometimes), and how of the transaction. How will the performance unfold – multiple stages, milestones and approvals leading to the next stage? How will payment unfold – 1, 2, 3 or more installments as performance goes forward?
If you’re finding it difficult to put your understanding in writing, it may be that the transaction is unclear. But it must be. Otherwise the situation is an invitation to problems, disagreement and miscommunication – i.e. disappointment and mistrust by one or all.
3. Beware “friend” pricing . Much of an entrepreneur’s early success may come from friends, family or acquaintances - and that’s great and necessary. But with that comes the danger of giving a price or terms that are, frankly, unfair and unsustainable.
For example, quoting a price for a service that – without the friend even having requested a discount – is steeply discounted from the standard price. The person giving the quote just negotiated against himself because of the “guilt” of giving the friend a “standard” (and presumably fair) price – for example, quoting a $25,000 job for say, $18,000 – a $7,000 discount off the top – as a sort of favor. Albeit one that wasn’t even requested.
Try to think of that “friend discount” this way. What is the value of what you have to offer? And therefore, what is the discount off of the “standard” rate? (here $7,000).
Independent of this transaction, if you were to go to that friend and say, “Friend, would you do me the favor ofgiving me $7,000? Please? As a gift?” What would the answer most likely be?
But in underpricing the actual value of what you have to offer, you have volunteered to do exactly that.
I’m not suggesting you do not provide “friend” pricing – just be well aware of what you are doing when you do it. Make the decision consciously, and without the cloud of guilt merely because the potential new customer is a friend.
When they come to you as a customer or client, their role has shifted, and your judgment must shift to treating yourself and your business fairly.
4. Where is the business plan? Many new business owners dismiss the need for a business plan until someone demands one – a bank or potential investor.
That is certainly understandable. Business plans are tedious and time consuming to put together. No fun. And many people do not have a clear understanding of what a business plan is.
But more dauntingly, business plans require the fledgling business to focus on many scary and nebulous concepts: is there a demand for what I’m offering, is it enough of a demand on which to base a business (in other words, “what is my market”), what are my costs, my expenses, overhead, and therefore profits, and over a one, two, three or longer timeline (in other words, “projected profits/losses”), who are my competitors and can they respond to my presence, how much capital do I need, and how long before I am profitable, and therefore, can I last that long, etc.
But much like the process of forming a written agreement, one of the most beneficial functions of a business plan is in forcing the business to focus on all of the relevant factors. On what must be done, and known, to continue in business – and hopefully move to profitability.
These pitfalls are applicable to businesses and entertainment professionals alike.
The simple fact is that one must treat “it” like a business to become a professional.
“Percy Jackson” film not substantially similar…
Sunday, September 16th, 2012
Yet another example of how a similar idea – perhaps a VERY similar idea, is insufficient basis for a successful copyright infringement or idea theft lawsuit. It is the very specific execution of the idea that is protectable, NOT the idea itself (unless there is a solid contractual or quasi-contract theory of theft).
Parody, Fair Use, Or Copyright Infringement?
Tuesday, October 26th, 2010
A recent question asked whether a project was a permissible “parody” of a preexisting work, or whether the project was too close to the original and was therefore an impermissible rip off – a/k/a copyright infringement.
The answer can be maddeningly complex, and frustratingly (or entertainingly) fact specific.
First the basics: An “idea” is not copyright protectable – an “idea” is too general.
What is copyright protectable is the specific execution of an idea.
A “comedy about a family” is not copyright protectable – it’s just an idea, and far too general. But the specific characters and setting and plot and other myriad details of a specific family, such as The Simpsons, are copyright protectable; because of the specific execution of the details of the idea. And therefore another specific, unique execution of the same idea is also separately, independently, copyright protectable, such as The Family Guy.
Each specific execution is protected from being copied without the authorization of the owner.
But beyond those general rules, the U.S. Copyright Act excuses certain circumstances that would otherwise be impermissible copying.
One of those certain circumstances is what is commonly known as “fair use.” More accurately, the “fair use defense,” because technically it is a legal defense to having been sued for copyright infringement.
Parody is one of those “fair uses.” But not a specifically listed use – or even a clearly referenced use. So much for the basics – now onto the specifics.
Or at least the basics… of the specifics.
Four factors are considered in analyzing whether a use was a “fair use.”
1. The purpose and character of the use of the original copyrighted work – commercial or non-commercial; whether a Section 107 favored purpose – criticism, comment, scholarship, research, news reporting or teaching; the degree of transformation from the purpose of the original to the purpose of the new work;
2. The nature of the copyrighted work – certain types of work are more deserving of protection than others;
3. The amount and substantiality of the portion used of the copyrighted work – in relation to the whole of the copied work; and
4. The effect on the potential market or value of the copyrighted work.
An interlude – Mr. Webster’s definition of “parody” – “a literary or musical work in which the style of an author or work is closely imitated for comic effect or in ridicule; a feeble or ridiculous imitation.” Synonyms include: burlesque, caricature, put-on, rib, send-up, spoof, takeoff, travesty.
So by it’s very nature, a parody MUST closely resemble or reference the original enough for the audience to recall the original, but not so much as to actually BE infringement – thereby “fair use.”
But because parody takes so many forms, bright line, preemptive rules are next to impossible.
Nevertheless, to qualify as a parody the new work PROBABLY should, at the least, (referencing the fair use rules above)
1. aim for comment and/or criticism – not necessarily of the original work, but of something that is shown by the contrast between the original and the parody; and therefore is transformative from the purpose of the original to a new purpose (the original was serious, the new is silly). For example…
A federal court found that one of these photos was a permissible fair use parody of the other. Although very similar in a number of respects, details of lighting, shading, and facial expression made one a parody, as opposed to an impermissible copy.
(But which is the parody…?) (What made you choose the one you chose?)
2. regarding the nature of the copyrighted original work…? OK, a bit of a blind alley here. Admittedly this fair use factor is of little use in determining parody – as even the U.S. Supreme Court agrees (in the “2 Live Crew” case).
3. use an amount and substantiality of the original as is necessary to recall and reference the original, but then inserting sufficient originality (and presumably originality that is mocking or critiquing or deriding or insulting or jeering or taunting or in some way chiding) as to separate the intended parody from the purpose of the original.
The photos above differ in very subtle but very significant ways – sufficient to qualify as parody in that instance.
This one is particularly hard – because it’s a bit like trying to define “funny.” Sometimes a very tricky thing to explain:
Interlude Part Deaux: Tommy DeVito: … I’m funny how, I mean funny like I’m a clown, I amuse you? I make you laugh, I’m here to fuckin’ amuse you? What do you mean funny, funny how? How am I funny?
Henry Hill: Just… you know, how you tell the story, what?
Tommy DeVito: No, no, I don’t know, you said it. How do I know? You said I’m funny. How the fuck am I funny, what the fuck is so funny about me? Tell me, tell me what’s funny!
And, Interlude: The Final Insult: A mashup of the Charles Schultz Peanuts characters giving voice to the GoodFellas dialog above. The Peanuts characters, the video of the Peanuts characters and the dialog from Goodfellas are each separately copyright protected content. So is the mashup a copyright violation, or permissible parody?
And is it funny? (if you answered “no,” seek counseling).
And the last of the fair use rules; 4. the effect of the use on the potential market for or value of the original work.
But this too is of only limited use in determining parody because usually the owner of the original work would not grant a license (a purchased permission) to the parody artist; so an uncompensated fair use of the original material would not deprive the holder of the original work from a payment; the original material’s owner wouldn’t take the money even if it was offered.
Therefore fair use reference of the original in the parody typically would not affect the market or value of the original.
Parody – it’s just that simple!
Obviously not at all simple.
Which is why it may be important to involve an entertainment attorney early in your creative process, before you have spent months or years writing the script, or developing and producing the film – only to find out that it is NOT a fair use parody. But is instead an impermissible copyright violation, likely to be shut down the moment it sees the light of day.
Additional (and dense) reading:
Luther R. Campbell aka Luke Skyywalker, et. al., Petitioners v. Acuff-Rose Music, Inc., 510 U.S. 569, 114 S.Ct. 1164, 127 L.Ed.2d 500 (S.Ct. 1994);
Leibovitz v. Paramount Pictures Corp., 137 F.3d 109 (2nd Cir. 1998)
As an entertainment attorney, my focus is protecting and advancing your project. Please contact me at your convenience if I may be of assistance.
Disclaimer: The above is for general information purposes only, is not legal advice and does not create any attorney/client relationship. Please seek legal counsel regarding your specific projects and needs.