Owners, Borrowers & Thieves 2.0 : Owners, Borrowers & Thieves 2.0 : Husch Blackwell Sanders LLP : First Amendment, Commercial Speech

Either this week or next, Facebook will make it official that it will follow its new terms of use -- the legal stuff buried in a link at the bottom of the homepage entitled "Terms".  Who cares?

If you are a writer, photographer, musician or other creative type, you are likely to have a Facebook page and you definitely should care.

But, you don't need to be a writer or other artist to care.  What you post today may be worth something tomorrow -- whether by design or dumb luck.  If you are reading this blog and are under the age of 106, you are likely to be on Facebook or some other social networking site.  Facebook alone claims to have 200 million users and there seem to be enough social networking sites to fill a Costco-sized grocery cart.

Still, many creative people are using the enormous popularity of social networking sites to tap an international audience in hopes of creating a buzz that will promote his or her creations.  It is not uncommon for photographers, for example, to post pictures such as this one -- albeit much cooler -- on their page to generate interest.  Of course, this is not unique to photographers.  Writers, musicians and others who develop creative material regularly post their creations on social networking sites.  

Perhaps because there are so many people who have posted their creative works on Facebook, a mini-revolt took place when Facebook announced that it was changing the terms of use.  As the Consumerist reported, bloggers discovered that Facebook had changed its terms to arguably grant itself significant new rights to the creative works that users posted.  The change led several artists such as photographer, Jim Goldstein of San Francisco, to announce that they were removing their work from Facebook.

Facebook did back off of its broad terms and agreed to allow the Facebook community to chose whether to adopt the old set of terms or a revised set of terms.  Last Friday, Facebook announced that the tenative results (presumably subject to an inspection for hanging chads) showed that its users voted to approve the revised set of terms that are somewhat less broad that the ones that set off the mini-revolt.  I expect that we will hear an official confirmation of the vote soon.

So is it now safe to post your creative work on social networks?  I count myself as one who takes Facebook CEO Mark Zuckerberg at his word when he says that there was no intent to make a mass grab at the intellectual property rights stemming from user generated content.  But, you still need to get the terms of use right else a court may listen sympathetically and then rule:  "So sorry, too bad."

I am still puzzled by the expansive language that has been adopted.  One who posts anything on Facebook still gives Facebook a license to use the work for almost any purpose.  This is in stark contrast to terms on MySpace, Xanga and Bebo for example that more narrowly restrict the purpose for which the social network receives a license to use posted content.  Even better, Twitter expressly states that it does not claim any intellectual property rights over the material provided to Twitter.

For now, I think that someone who posts work that he or she created on Facebook should be cautious.  I don't think that there is anything sinister going on at Facebook, but the legal language still does not match its public statements.  The terms are better at several other social networking sites, but they are still fairly broad so read the terms of any social networking site before posting your work and check periodically to see that the terms have not changed.  Take these precautions before you post and avoid hearing the judge rule:  "So sorry, too bad!"

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It is no secret that banks large and small pulled the Persian rug (perhaps a green one for St. Patrick's Day) out from art buyers who sought to finance their purchases with a loan.  The Wall Street Journal noted this trend back in April 2008.

So given the current economic mess we are in, it should not come as a surprise that the borrowing-to-buy-art trend has taken a step in the other direction -- the number of pawnshops dedicated to loaning money in return for high-end art as collateral is on the rise.  An article in the New York Times mentioned several prominent art pawnshops:

• Art Capital Group

• Art Finance Partners

• ArtLoan

It is also not unusual for auction houses such as Christie's and Sotheby's to provide a similar service as the art pawnshops by providing a bridge loan to tide the seller over until the auction is over and the proceeds have been collected.  But, the auction houses generally did not offer their clients the ability to pawn art.  In the bad old days of economic prosperity, someone pledging his or her Andy Warhol used to have to stand in line at a traditional pawnshop behind the guy pledging his toaster oven.  Not anymore apparently.

The part of the NYT article that caught my eye was that Annie Leibovitz, one of the most famous celebrity photographers of our time, pledged all of her photographs to Art Capital Group for $15.5 million.  The terms  include not only all of the photographs and contract rights of those that she has taken, but also all of the photographs that she will take.  The Guardian has an excellent audio discussion of the Leibovitz transaction and the possible reasons why Ms. Leibovitz may have been compelled to pledge all of her photographs.  

The photograph that Ms. Leibovitz takes next week?  Pledged to the Art Capital Group.  Next year?  Art Capital Group gets those as well.  That's on top of the 6 to 16% interest rate.  Those are tough terms.

Presumably she gets to receive the income stream from fees and royalties that her photographs generate unless her loan goes into default.  She has a number of projects in the works which should bring in a tidy wad of cash so nobody should count her out yet.

I am still curious about the remaining terms of these types of loans and how, if at all, they would affect her copyright ownership and the right to enforce them.  During the term of the loan, does she retain all rights to the copyrights?  Does she retain the right to enforce the copyright?  My suspicion is that Ms. Leibovitz retains her ownership and enforcement rights unless the loan goes in default.

But what other terms does the contract provide?  For example, it would seem that among the terms is the requirement that she enforce the copyrights so as to protect the value of the pledged collateral, but how much discretion does she have in deciding whether to sue a possible infringer?  Please let me know if you are familiar with the loan terms and the impact on her copyrights.

If there is a clear winner in this story, it is probably Art Capital Group because others looking to pawn their art may be more inclined to use Art Capital Group knowing that prominent artists themselves have pledged their work to it.  But, will it be a short-term winner?  Will there be a great demand to pawn expensive pieces of art when the economy bounces back and we can once again crawl out of the Stone Age?   

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Coming soon to a blogoshpere near you . . .

As regular readers of this blog know, we have often used this space as a means to follow and comment on the continuing tension that results from trying to fit new technologies, new types of content and new content delivery systems into old paradigms of intellectual property law.  Sometimes it's copyright -- for example, YouTube's assault on (or defense behind) the DMCA;  sometimes its trademark -- for example, whether Google Keyword ads constitute trademark use for purposes of an infringement claim; sometimes it's even Comics!

Recently we've realized that our mutual interest in emerging technologies and how the law practice can adapt to a changing IP environment has been prompting us to adapt our blogging to fit our own new paradigm.  We're very excited about some changes that will be coming shortly, including adding a fresh new voice or two.

We hope we've been "fairly useful" (to borrow Professor Sag's great blog title) so far, and hope you'll check in regularly as we go forward.

Stay tuned . . .  

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It used to be pretty simple.  You went to a record store (or mailed in your record-club form), bought an album or CD, and you owned it.  As the owner, you had certain rights--under the First Sale and Fair Use doctrines, you could make a copy for your own personal use, give it away,  share it, even sell it.  Easy, right?

Well, the times they are a'changin'.  Like many people, I haven't bought a new CD in a long time -- I have all my music on my iPod and download it from iTunes (legally, of course).  Now I'm excited about Amazon.com's new MP3 Store, which promises cheaper music downloads, better sound, and--most importantly--the music is DRM-free, meaning I can play it on any device.  Great! 

But not so fast . . .

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Sunday night, my multiverse collapsed upon itself. The Season Six premiere of Family Guy: Blue Harvest has been stalking me all summer.

At Comic-Con International in San Diego, Friday was Star Wars Day and Seth MacFarlane discussed the premiere episode during the Family Guy panel. You may have noticed sketches of Yoda and an Imperial Stormtrooper (along with tagline “May the Force be With You”) on the menu I used to discuss enforcement practices. Two weeks later, I was at the ABA Annual Meeting in San Francisco attending the Intellectual Property Law Section’s activities. While there, I had the opportunity to hear David Anderman Senior Director of Business Affairs (and lead attorney) for Lucasfilm Ltd. speak on a panel entitled “‘The Whole World is Watching!’ Privacy, Copyright and Parental Control in the Age of YouTube, MySpace and Beyond,” sponsored by the Forum on Entertainment and Sports Industries. During Anderman’s portion of the panel he discussed the Lucasfilm approach to enforcement and the Family Guy premier. Anderman explained how Lucasfilm’s relationship with Family Guy exemplifies a realistic approach to enforcement that understands branding and that has evolved with technological changes in content creation and distribution.

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SUX 2B CMG — CMG Worldwide that is. On May 7, CMG took a sizable summary judgment hit. CMG and Marilyn Monroe, LLC, the companies previously claiming all of the rights to control/profit from the most famous nativity songbird of all time, lost their right of publicity claim against the Shaw Family Archives, Ltd. (and others). CMG took issue with the licensing of Marilyn photographs taken by Sam Shaw without also paying CMG its licensing fee for Marilyn's identity. Photographs taken by Sam Shaw can be seen at these websites. CMG took issue with Marilyn's image on a T-shirt and label (as shown in the Court record), and on a licensing website.

This is a very big deal. The Art Law Blog has had three posts on this decision.

So far, the journalists are outperforming the law bloggers on the analysis. To its credit, the Law Blog at the Wall Street Journal linked to the pre-decision Wall Street Journal story about the case, which has great background on the post-mortem commercialization of Marilyn's identity. The Art Law Blog had a link to CMG’s own Indianapolis Business Journal, which had a more thorough discussion of the possible ways this decision could play out.

Normally one of the better legal voices on intellectual property issues, The Center for Internet and Society misses the point in this case. The folks at Stanford read the case to hold “that Marilyn Monroe’s heirs cannot claim post-mortem publicity rights because she died before the enactment of the statute that creates them in California (and, for reasons that are not important here, Indiana). So, according to this Court, her image, likeness and persona are all in the public domain.” That is not the holding.

The Trade Regulation Talk stated that “any publicity rights that Monroe enjoyed during her lifetime were extinguished at her death by operation of law.” This too, is not quite accurate.

This very important decision held that the post-mortem right of publicity could not be bequeathed by testamentary conveyance because the right did not exist at the time of Marilyn’s death. Accordingly, Marilyn Monroe, LLC — and by connection its agent CMG — did not acquire any post-mortem right of publicity because all of its rights arose from Marilyn’s will. The decision — extremely well-reasoned — does not hold Indiana’s attempt to create a retroactive post-mortem right invalid. It leaves that for another decision and leaves open the possibility that such a statutorily created right might vest in the dead celebrity’s statutory heirs.

The power of this decision and its future impact are not in suddenly delegating the post-mortem right of publicity to the public domain waste basket. Its power is in its sensible approach to a post-mortem right. Undoubtedly the decision will be appealed, either through a certified interlocutory appeal, or when the there is a final judgment; but, its careful position seems solid. According to the Indianapolis Business Journal, CMG manages a bundle of rights that “include branding rights, trademarks on Marilyn Monroe’s name and signature, and copyrights of certain photographs.” I suspect these trademarks and branding rights may be subject to attack if the putative owner has no corresponding right to Marilyn’s identity.

The real issue is how to fairly treat concurrent right of publicity and copyright rights in works, just as in the June Toney case last year (discussed in the Photoshop Blog and the Patry Copyright Blog). Surely it cannot be fair to require a photographer to negotiate a model contract for a post-mortem right of publicity that does not exist. Nor could it possibly be fair to make a photographer's heirs negotiate with a model's heirs over their respective inherited rights when the model and photographer could not have contemplated the issue.

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Since Professor Lessig and a large bi-partisan group of others issued their call to the Repubican and Democratic National Committees to require television networks to make the video recordings of all Presidential Debates available to the public for free -- either by placing the videos in the public domain or issuing them under a Creative Commons (Attribution) license (see earlier post here) -- several candidates and two networks have weighed in.

According to Lessig's blog, Democrats Barack Obama, John Edwards and Chris Dodd have all written strong letters to the DNC announcing their support for this proposal.  Apparently there is nothing yet from any of the Republican candidates, and Democrat Hillary Clinton has also remained silent. 

Among the networks, CNN has come out in support of this proposal and has announced that it will place no restrictions on presidential debate footage:

Due to the historical nature of presidential debates and the significance of these forums to the American public, CNN believes strongly that the debates should be accessible to the public. The candidates need to be held accountable for what they say throughout the election process. The presidential debates are an integral part of our system of government, in which the American people have the opportunity to make informed choices about who will serve them. Therefore, CNN debate coverage will be made available without restrictions at the conclusion of each live debate. We believe this is good for the country and good for the electoral process.

By contrast, Lessig and USA Today's OnPolitics blog are reporting that Fox News Channel will not follow CNN's lead and will not make its video footage available for all to use. 

No word  yet from either the RNC or the DNC.  Check with Lessig for regular updates -- he's keeping a good scorecard . . .

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Confused or conflicted about copyrights and music downloads and the RIAA's aggressive practice of suing its customers?  Me too.  In fact, I don't know how many times this has happened to me:  I'm talking with someone (old friend or brand new acquaintance, it doesn't matter) and it comes up that I am an attorney with a copyright and entertainment practice, and the other person says some version of  either "I can't believe the record companies are suing their customers over music downloads" or "I can't believe people think it's OK to just steal music", etc., etc.  I usually just make a serious face and say "well, of course it depends on several factors, and lawyerblah, lawyerblah, lawyerblah . . . "

I found this post today and I think it neatly sums up the two camps on this issue, and even offers a "modest proposal" for a future "annual license" model as a way to resolve the issue.  It's very interesting reading -- well written and thoughtful (along with the comments and internal links).  I'm not sure it would work, but it's an example of the kind of creative thinking that becomes necessary when new technology stretches the limits of old legal models.

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