Friday, May 29, 2009

Bands, LLCs, and Income Taxes

Dear Rich: My band is thinking about forming an LLC and we've been told that one of the reasons to do it is to save on income taxes. This is the first year we're together and we're making a lot of money with corporate gigs so we're looking for any way at all to cut down on taxes. Will an LLC save us money at tax time? I'm so glad you asked. The short answer to your question is, "Probably not." Of course, nobody on the Dear Rich staff is an accountant so we can't be positive about your situation, blah, blah, blah. (Check with your accountant.). But with an odd exception, LLCs are taxed the same way as partnerships and they take the same deductions. So it's hard to see how you will save any dinero on April 15. Not only that, some states, like California, have hefty annual LLC fees. Here's an excerpt from my Music Law book that goes into more detail on the subject. 

Thursday, May 28, 2009

Start a Music Label (or Not)?

Dear Rich: Our band is putting out its first CD and we are considering creating a record label to release it. What do you think? What's involved in creating a record label? Do we need a lawyer? I'm so glad you asked. You don't need a lawyer to form a record label and there's not that much involved in creating one, as I'll explain below. The bigger question is why are you doing it. One reason artists create labels is that they feel it gives some legitimacy to their release -- as if to say to the world, "see, somebody has signed us." If that's your prime motivator, don't bother. Your fans won't care and anyone in the music industry will be able to discern that you've just created a fictitious label for your release. However, if you're serious about building a small business around a series of releases (including other artists), then it might make sense to create a label. 
Most importantly, and of greatest concern is money. Who will pay for the pressings and artwork? How will you finance promotion? Are you borrowing money to start up? Or are you seeking investments? Will you pay for recording costs? Can you afford to keep going when distributors are late paying you (or worse, go belly up)? All of these things are worth considering before you launch your music mini-empire. (Here's a quick lesson (PDF) on the flow of money in the music business!) If you're still eager to move forward, you'll need a name for your label and you'll want to make sure no other music or entertainment services are using a similar name. (In a future blog entry, we're going to explain how to perform basic trademark searches at the USPTO.) Next, if you're not familiar with basic business startup information, you might want to get a primer. That's because you may need to figure out your business form -- partnership, LLC, corporation -- and file a fictitious business name with your county clerk. You'll need to open a bank account and use an accounting system -- either an Excel Spreadsheet or Quickbooks should do. You may want to affiliate with an independent music distributor (here's a list by state) which may prove challenging, unless you have an artist that is already selling well. And you will need agreements for the distributor, for consignments, and for your artists (including your band). Digital copies of all these agreements are included in my book Music Law, and the Dear Rich staff reports that there other helpful resources for starting a label on the web. One of the more popular books on the subject is Start and Run Your Own Record Label.

Wednesday, May 27, 2009

Investigating Potential Music Royalty Ripoffs

Dear Rich: My Dad is a musician who played on some records in the 1970s that  still get played on the radio. I'd like to help him investigate any money he is owed for these old recordings. How do I go about it? I'm so glad you asked. The short answer is that you may have to hire someone to help you with your investigation. According to the Dear Rich staff, determining whether your Dad is owed money depends on several factors. These include: (1) whether your Dad contributed to songwriting, in which case he may be due money from a music publisher or a performing rights society, (2) whether your Dad performed as a union musician on sessions, and (3) whether your Dad signed recording agreements with record labels as a featured artist (or member of a band).
You can review some of this information on your own. For example, societies such as HFABMI or ASCAP should be able to verify whether your Dad is listed as a songwriter.  If your Dad was a union musician, he may be entitled to payments from the Sound Recording Special Payments Fund. If your Dad signed recording or management agreements, you need to review them to determine how payments are to be made (and to see whether they expired). You may also need to track the change in ownership of the record labels as the business has been in turmoil during the past 15 years. (And, finally, there are Sound Exchange payments from digital broadcasting as discussed in a previous entry.) Ultimately, you may need to hire an attorney who specializes in tracking down payments or hire one of the companies that specialize in these types of investigations (although we have not tried their services and cannot vouch for them).

Tuesday, May 26, 2009

Getting Paid from Webcasts and Satellite Radio

Dear Rich: Someone heard our band's music on Sirius (the satellite radio station). Do we get paid for this? What do we do? I'm so glad you asked. The short answer is that the band's songwriters (and music publisher if you have one) will get a payment from ASCAP or BMI (the performing rights socieities), and the band should get a payment from Sound Exchange for performance of the recording. In order to receive these payments, you will need to sign up with the relative services, as I'll explain below.
If your band hasn't decided how it will treat songwriter income, you'll need to work that out. Then the songwriters (and publisher) must sign up with ASCAP or BMI, register the songs, and wait by the mailbox (or bank, if you choose direct deposit). But unlike over-the-air radio frequency performances (AM and FM radio), a webcast or satellite radio station also pays a royalty fee to the artist. That payment is collected and paid by SoundExchange.  (You should download the paperwork from their website and register as a featured artist.) 
You can find out whether SoundExchange is holding money for you by checking the list of unregistered artists . If you don't see your band here, then Sound Exchange is not currently holding a check for you. 

Monday, May 25, 2009

How Do You Get Music on iTunes (and Avoid Illegal Downloads)?

Dear Rich: My daughter's band just made a CD and it's great. They sell the CD at schools and at their shows. But how do they get their CD into places like iTunes where it gets downloaded, and how do you make sure that it isn't illegally downloaded? Will copyrighting the CD help? What do they do about songs they didn't write?  I'm so glad you asked. The short answers to your questions are (1) to get it on iTunes, you need to affiliate with a distributor (which we'll describe below), (2) once the CD has been released, there's no way to prevent illegal downloads, (3) registering the songs or the recordings with the Copyright Office may help if you later file a lawsuit, and (4) you can pay for a license to cover other people's songs.
In order to make your music available on iTunes and at other download spots such as Rhapsody and Amazon MP3, you'll need to affiliate with an online distributor who will take a portion of the proceeds. This article explains the basics for joining with one of these distributors (our favorite is CD Baby). If your band is covering songs by other artists you should also pay for a mechanical download license from HFA. The basics are explained in my book Music Law. Considering that 95% of the music that's downloaded is illegal, you'll need a full-time legal staff (no, the Dear Rich staff is not available) to prevent illegal downloads. Your daughter and her band have copyrights in the recording, and whoever wrote the songs has a separate musical works copyright. Registration isn't required but will help once your daughter's band goes big time (and you need to chase the bad guys).

Friday, May 22, 2009

Stopping Patented Invention From Being Imported

Dear Rich: I am preparing to license a U.S. "patent pending" invention to a U.S.-based company. Even though the market for the product is clearly worldwide, it is sparse enough that it does not justify expensive foreign patent filing. The company's supplier and its competitors are located in China and Korea. If any of these other companies sell to U.S. customers via the internet (typical), I believe the sale legally occurs in a foreign country, therefore sidestepping my patent. If so, I question if the company I will deal with has any reason to enter a license agreement with me. Is there any way I can be protected in cost-permissible way? I'm so glad you asked. The short answer to your question is that once you acquire patent protection, you can stop Internet sales to U.S.-based customers. U.S. patent holders can stop anyone from importing infringing products or offering infringing products for sale (advertising or marketing) that product within the U.S. There are also  federal court decisions indicating a foreign supplier cannot "induce" infringement in the United States. So, whether copies of your product are sold on the Internet, or they slip out of the factory's back door, or result from competitor copying, you can stop these from coming into the U.S. The bigger concern is who will bankroll the policing and enforcement needed to stop this activity. One of the reasons inventors license (rather than manufacture themselves) is so that the licensee (the company to whom you're licensing) will watch your back. You may be able to enhance that protection by authorizing (via the licensing agreement) for the licensee to go after infringers and to split the resulting court awards after deducting legal expenses. (You can find additional information about licensing patents in this book.) Without going too far into the blah-blah-blah world of patents and lawyers, the Dear Rich staff feels you should discuss this matter with an IP attorney before agreeing on important licensing agreement terms such as territory, indemnity, and grant of rights.  (You can find qualified IP attorneys in your area in Nolo's Lawyer Directory.)

By the way, thanks to patent attorney Robert Plotkin for his help with this answer. Robert is the author of the new book, The Genie in the Machine: How Computer-Automated Inventing is Revolutionizing Law and Business, and we'll be featuring excerpts from an interview with him in the future.

Securing Rights to Old Technical Manuals

Dear Rich: There are a set of old specialty technical manuals from the '40s, '50s, to mid-late '60s published by Theo Audel for the construction trades. I tracked down who bought out Theo Audel publishers and contacted them and they'd sold the rights to some small, never heard of before, computer tech manual publisher. I called them, and they have no interest, on any level, for any purpose, of re-publishing/printing these old books. They told me that it was outside their purview. When I asked them to release, or sell the rights, they said no. As a small-time author, I can indeed appreciate the desire to protect one's ownership rights. However, these books are highly specialized, and the information once provided by them is now lost to history. I have in fact contacted other industry-specific publishers, a trade union publisher, and none are interested in seeking to reprint these books. Their response is typical -- just too costly to be of fiscal benefit to the bottom line. What would it take to get them reprinted for use in today's marketplace? And please don't tell me "too bad, just deal with it." I'm so glad you asked (although the Dear Rich staff is upset that you think we would answer your question in a such a flippant manner.) In answer to your question, there are a  few things to consider. First, it's very possible that the manuals are in the public domain. If the manuals were published before 1964 and the publisher failed to renew the copyrights, then you don't need to ask permission. (Only about 11 percent of copyrights issued before 1964 were renewed.) The renewal must have been made during the 28th year after first publication, so a book published in 1940 would have been renewed in 1968. If the renewal occurred after 1977, you can check online Copyright Office records. For books renewed before 1978, you should check the Stanford database of book renewal records, a handy resource. There are a few other choices for your copyright search. You can search the pre-1978 records yourself, or pay the copyright office to search (check out Circular 22), or pay a professional copyright searcher to obtain the records. 
Why so proprietary if it's in the Public Domain?
If the manuals are in the public domain, you may wonder why the owners are being so proprietary. That's often because they either don't know the status, or they do and they're attempting to leverage their "ownership." The Dear Rich staff ran into a similar problem a few years ago with the "owner" of some 1930s cartoons resulting in a nominal fee being paid (not the exorbitant fee being requested) in order to acquire a good digital version of the original work for reproduction. All this effort may not be necessary once the Google Settlement is finalized, since Google plans to digitize and display every word ever placed into print. (Some newer Audel manuals are already available.) Anyway, we're not sure why the companies think that publishing these manuals is cost-prohibitive. Guess they've never heard of POD.

Punctuation in a trademark: Does it make it stronger?

Dear Rich: I have a question. I would like to register a trademark. Does adding punctuation make the mark stronger? For example, is My:Business stronger than My Business? Hmm. Do you mean, does this exclamation point make my asterisk look fat? The short answer is "Probably not." Although some trademarks are known for their punctuation -- Yahoo!, E*Trade, Kool-Aid, and Guess? -- their strength is not a direct result of their punctuation. (Wait a second, has Guess abandoned the "?"?) 
Getting a Grip on Trademark Strength. Trademark strength is a measurement of consumer identification. A weak mark requires more effort to register. One factor in determining strength is the meaning of the words, something that the punctuation is unlikely to affect. The same is true for the way the mark sounds. That's why Shake 'n Bake isn't stronger than Shake and Bake. One TTAB ruling said that "the addition of punctuation marks to a descriptive term would not ordinarily change the term into a non-descriptive one." Punctuation also failed to save the day for a generic term. (The TTAB acknowledged that punctuation in an acronym "lends a visual distinction ... ") We haven't seen your mark, but the Dear Rich staff advises that unless the punctuation adds a distinctive meaning or sound, you shouldn't rely on it to bulk up your trademark.

Tuesday, May 19, 2009

Trademark Registration of a Blog Name

Dear Rich: Can you acquire trademark rights for a blog? If so, what category would it be in? We're doing a service mark amendment for Category 41. Originally we asked for seminars, but there was a "likelihood of confusion" there. I'm so glad you asked. You can acquire trademark rights for a blog title. In your application, you would describe your services as, "An online journal, namely a blog featuring commentary and information in the field of [state your blog's field]." Unfortunately, the class of services in which you would seek to register your blog is still most likely going to be Class 41 --  the class for which you were previously denied registration. If the examiner found a substantially similar mark in that class, you face an uphill battle even if switching from "seminars" to "blog." In order to acquire the registration you'll need to show, using several factors, that your mark is not likely to confuse consumers of the other service. If you cannot do that, you must forfeit your application fee and start over. The Dear Rich staff feels your pain... and your letter did prompt us to file an application for our moniker (see above). 

Monday, May 18, 2009

Fictitious Journal About Celebrity

Dear Rich: Here's a celebrity question for you. I have a blog that serves as an entirely fictitious journal about growing up with a particular celebrity. I am not selling anything and I don't plan to do so.  I'm also not portraying the celebrity in any sort of negative light. Can I run into trouble using the celebrity's name?  What about a picture of the celebrity?  Can I add a disclaimer of some kind to avoid problems? I'm so glad you asked. In fact, that gives me an idea, since I always wondered what it would be like to grow up next door to Totie Fields (a funny woman and an inspiration to us all). Uh, right... back to your question. The short answer is that you can use the celebrity in your blog because most courts consider fictional uses of celebrities to be protected under the first amendment -- a right that trumps the right of publicity. You will run into problems if you make a factual misrepresentation which could reasonably be misinterpreted as being true and damaging to the celebrity ("reckless falsehoods") -- for example, you write an entry stating the celeb's in rehab and readers might reasonably infer this is true (when it's not). In that case, you could be liable under defamation, false light privacy laws. Your lack of commercial benefit (we're assuming you're not running Google Adsense or Amazon Affiliate sales), would help your claim as would providing a prominent disclaimer (scroll to bottom of this page for an example). The Dear Rich staff suggests a disclaimer something to the effect that the blog is fictional and is not approved or endorsed by [name of celebrity]. Running a picture will only cause problems if you don't have permission from the copyright owner. In any case, the Dear RIch staff advises that if you're a fearless writer with few assets, you can dispense with all this advice and do what you want. The worst that's likely to happen (no guarantees, of course) is that you'll be asked to take your blog down.

Friday, May 15, 2009

Are Speeches by Foreign Leaders in the Public Domain?

Dear Rich: Are speeches given by leaders in other countries in the public domain or are they owned by the government of that particular country? I'm so glad you asked. The short answers to your questions are "It depends on the country," and "It depends on the country." You're probably already aware that speeches by U.S officials are in the public domain as are works created by federal employees in the course of their employment (with one exception). On that basis, feel free to create your own Bush/Clinton mash-up (watch your volume). However, you can't do the same with Tony Blair's speeches as prime minister. Those are protected under Crown Copyright, as are government works in most British commonwealth nations. Crown copyright is subject to a number of exceptions, and those exceptions vary country-to-country. Some other nations (and the U.N.) also reserve the rights to their leaders' pronouncements. We're not sure why you're asking the question, but if you're considering republishing these speeches for purposes of scholarly analysis, criticism or other commentary, the Dear Rich staff feels that it's likely that a fair use defense will protect your U.S. publication. (Note: We're only discussing the use of the speech itself, not television coverage, which triggers additional copyrights.) Anyway, all that legal stuff aside, you'll probably be able to get away with a Tony Blair mashup, too.

Thursday, May 14, 2009

When is a trademark "in commerce"?

Dear Rich #1: I have had a business installing and maintaining equipment for a number of years. I now want to register my trademark, but I do not know if I meet the "in commerce" requirement. I am in a first state and have a number of customers located in a second state, but the work I do for them is all on customer property located in the first state. Am I "in commerce"? I also do some work on  American Indian land. Is this work in commerce?
Dear Rich #2: I have a website that offers custom in-home computer services -- I'm like a geek squad business -- but so far, only in one state. If I register my trademark can I say it is used in interstate commerce? I'm so glad you asked. Short answer: "Yes, you are both in commerce." The fact that you are regularly entering into contracts (doing business) across state lines should qualify your trademark as being "in commerce" for purposes of federal registration. The same is likely true for a website offering services in one state since, according to one court, "the services are available to a national audience who must use interstate telephone lines to access the site." By the way, the "use in commerce" requirement refers to "all commerce which may lawfully be regulated by Congress," not just interstate commerce. So, for example, since the federal government regulates television transmissions, a TV station that broadcasts in only one state could qualify for registration.
The Dear Rich staff can't say positutely, whether performing services on an American Indian reservation constitutes commerce regulated by Congress (we think it does; readers, any comments?). BTW, you can find lots of other helpful free trademark information in Nolo's Online Guide to Trademark Applications (download it here).

Wednesday, May 13, 2009

Creating a Book of Public Domain Quotations

Dear Rich: I've noticed that there are a lot of quote books about Abraham Lincoln, Confucius, Albert Einstein, and other famous folks. If I wanted to write my own quote book for a famous person who lived before 1923, what is the best way to go about making sure I don't get sued? I'm so glad you asked. As Confucius says,"The cautious seldom err." You appear to be aware that 1923 is the magic year for the public domain. In the U.S., everything published before then is free to reproduce. Therefore, according to the Dear Rich staff (and the U.S. Supreme Court), the only way you will run into a problem using pre-1923 material is if you copy somebody else's original selection and organization of similar quotes. If you're not clear about all this -- like Confucious says, "The people may be made to follow, but they may not be made to understand," -- then check out Steve Fishman's great book on the PD.

Tuesday, May 12, 2009

Sending sculpture photos to foundry

Dear Rich: I am a long-time artist, but never serious until now. I took up clay with lost wax in mind, and am now at the point of contacting a foundry to begin the process. What do I need to do and/or know prior to actually sending them any photos? I'm so glad you asked. The short answer to your question is "That depends..." The Dear Rich staff presumes you're concerned about either (1) the foundry ripping off your work, or (2) that the foundry will make some claim of co-authorship. As for being ripped off, as our Dear Rich readers know, you have a copyright in the photos (and any resulting sculpture) without doing anything. You can file a copyright application if you like (we recommend the new Form CO) and that will provide additional rights in the event of an infringement. You could also have the foundry sign an agreement (PDF) not to disclose or reproduce your work. That agreement could also deal with your second issue by having the foundry acknowledge that it acquires no rights in the resulting sculpture (and any rights it does acquire are assigned to you). (This site has helpful information about dealing with foundries.) Our guess is that the foundry is used to artists raising such issues and may even have such an agreement available. If they don't (and the agreement cited above doesn't work), you can put together an informal agreement yourself, or get one from one of Nolo's independent contractor books. All of these suggestions are based on the assumption the foundry is in the U.S. If it's in a foreign nation, you'll have a harder time enforcing agreements and copyright.

Monday, May 11, 2009

Busted by eBay for Selling Pin-Up Star Photos

Dear Rich: I sell vintage movie memorabilia, old movie posters, and move photographs that were produced by studios as publicity and advertising. They are quite collectible and even in this rotten economy manage to hold some value. I do not sell copies, only originals. I recently offered at eBay two photos of an actress -- a 50's pin-up, Playboy centerfold, and "B" movie queen -- and the actress complained that they violated her right of publicity and she had them removed from eBay. A strike has been placed on my account and I am told if it happens again I will be suspended from selling, i.e., I will be out of business on eBay. I've been running a business for years selling these types of goods. I always thought the right of publicity was intended so I could not sell copies or produce products with the images of celebrities. I did not know they also owned the rights to these vintage materials that were either sold or given away by the studios to theatre owners and newspapers. Am I really violating the law? Did the actress really have the right to have these removed? I'm so glad you asked. The short answers to your question are "No," and "No." One of the precepts behind the right of publicity is that each person should have the right to control how others exploit (or "commercialize") their persona, image, and name. For example, Woody Allen has been vigorous in his use of the right because he does not want to be perceived as endorsing other people's products (or having others imitate him to sell products). But re-selling legitimate, previously licensed photos (that is, the pinup consented to the original movie stills) is not a violation of the right of publicity. This is an area where the right of publicity intersects with the first sale doctrine and -- as this case demonstrates -- the first sale doctrine trumps.
As for eBay, they're casting an unnecessarily wide net, probably because it's easier than addressing each situation on a case-by-case basis. Their celebrity policy seems confusing and does not address your situation (sales of original posters or stills) and eBay's intellectual property rules don't cover your situation as well. Since your actions are not prohibited by law or by eBay, you should consider making an objection. Under eBay's rules, you can't just re-list the item; instead, you're supposed to contact eBay using the link in their email (and please feel free to link to this blog). Until this matter is resolved, the Dear Rich staff has stopped listing its Strawberry Shortcake collectibles at eBay (and we'll encourage others to do the same).

Friday, May 8, 2009

How Do You Get Coffee Certification Marks?

Dear Rich: I'm thinking of directly importing coffee from farms in Mexico. What do I do I need to do to use trademarks like fair trade, shadegrown, and organic (and also trademarks that verify where the coffee comes from, like '100% Mexican Coffee')? Also, we're transporting the coffee in a green way. Can I set up my own trademark for this? I'm so glad you asked. The trademarks you describe are certification marks, a special type of mark that informs consumers that the goods meet certain standards or are from a certain region. Certification marks are different than standard trademarks in that competing companies can display them (assuming they meet the standards of the certifying group). You can find appropriate certification marks and some contact information by searching at the USPTO. Click "Trademark," then "Search," then "Structured Form Search" and indicate "certification mark" as the search term and "Type of Mark" as the field, then change the default "OR" dropdown to "AND" (that's important!). Then type in your search term (for example, "coffee") and choose "Goods and Services" for the next field. (See our tiny hard-to-read screenshot, below). Most certifying agencies charge a fee for the use of their marks and, of course, you must meet their certification standards. 
As for registering your own certification mark (as opposed to using an existing certification mark), you can't qualify to register one if you engage in the production or marketing of the goods that you are certifying. So if you are engaged in the transportation of the coffee, the Dear Rich staff imagines you will have a hard time at the trademark office registering a certification mark for it. For your FYI, the Dear Rich staff is currently considering registering its own certification marks for (1) motion pictures in which there is no littering, and (2) plastic shell packaging that does not require use of the jaws of life.

Thursday, May 7, 2009

Hey... what about free speech? KC Beer, Part II

We received a couple of responses to yesterday's blog about naming a beer after a city (even though the beer isn't made in that city). One of the comments, from our friends at property,intangible raises an interesting point and we'd like to answer it while the topic remains close to everyone's cerebral cortex. Dear Rich! You only talked about registration. What about use? Isn't it my first amendment right to use any darn name I please? Absolutely. The Dear Rich staff loves free speech. In fact, if it weren't for the two-page indemnity provision we signed in order to write this blog, we might actually exhibit some free speech here. Err... back to your comment... Yes, you are free to use a geographically misdescriptive mark. Along with that freedom comes a few limitations. As noted, you can't register the mark -- which means you can't claim any of the benefits of federal registration on the principal register, including constructive notice of nationwide priority and a presumption of validity. And federal registration extends the owners remedies to any goods or services with which the mark is likely to cause confusion. (Kansas City Beer Nuts, anyone?) You also will have trouble stopping an imitator since a court is unlikely to enforce a geographically misdescriptive mark. And if you want to sell your beer company, your intangible property may be difficult to valuate (and even more difficult to transfer... speaking of indemnity provisions). So if you're on an L-7 business trajectory, the inability to deliver that little 'R' in the circle-bug could put a damper on your dreams. Nevertheless, if you're looking for a temporal statement -- you're only going to be selling a limited stock and you're not concerned about chasing others -- yes, your geographically misdescriptive mark awaits you.

Wednesday, May 6, 2009

Geographic Trademarks: Misdescriptive v. Suggestive

Dear Rich: What is the rule about using the name of one city for products made in another city. Can we call our beer 'Kansas City,' even if it's not made in Kansas City? I'm so glad you asked. The short answer is, "Probably not." If the USPTO thinks your brand is geographically misdescriptive, you won't be able to register it. When a trademark identifies a place other than the place from which the goods or services originate, and if consumers are likely to believe that the goods originate from that place, it is geographically misdescriptive and unprotectible. For example, Maid in Paris was considered misdescriptive of a perfume that is not from Paris. Durango was considered misdescriptive of chewing tobacco since it was not from Durango, the city in Mexico that produces tobacco products.
But wait... there's also a trademark rule that says that it's okay to use a geographic name even if your products are not from that place. For example, a car company can register Yukon for an automobile and a magazine company can register Atlantic. What's the difference between Maid in Paris and YukonMaid in Paris is deceptive because people are likely to think this is a perfume from Paris (a city known for perfume). People are not likely to believe that their Yukon was manufactured in the Yukon (not an area known for making SUVs). As for your beer brand, the Dear Rich staff thinks it might be risky to call it 'Kansas City' since the Fat City does have a reputation for beer and breweries, and consumers might believe your beer is from there. What if you moved your beer company to Kansas City? Then your mark would be geographically descriptive (and we'll talk about that in another blog post).

Monday, May 4, 2009

Infringing Domain Name?

Dear Rich: M
y wife sells hand-made jewelry and recently started putting it up for sale in a local shop and asked me to help her get an e-mail address. Knowing a bit or two about the Internet I decided the best way to do this was to register a domain name and then setup a Google Apps account to host the mail. Everything was set up and fine and then last week I received an  e-mail from a law firm saying that the domain I had registered was an "infringing domain" and that the use of such a domain name that incorporates their trademark yadda yadda. Now they say that I have 7 days to respond and transfer the domain name to them and provide a sworn affidavit attesting that I ceased selling any goods that infringe on their trademark. If my wife's little side business is not related to anything that the other company sells, do they have any right to order me to turn over my domain name etc.? I didn't think that anyone could come after you for just requesting a domain name. I'm so glad you asked. The short answer to your question is "More information is needed." You're correct about the basic trademark principles -- if you're not likely to confuse consumers, then there's no trademark infringement. That's why, for example, different companies can use Arrow as a trademark for shirts and staplers and electronics (although only one company can have the domain name, Under another theory (dilution), a company with a  famous trademark can stop you from using a similar trademark even if the goods or services are not related -- for example, Microsoft could stop a company from selling Microsoft Vista dog food.

But wait, there's more... there's cybersquatting. If you acquired the domain name in bad faith -- most notably if you intended to hold the domain hostage in the hopes of selling it back to the trademark owner -- then the trademark owner can pursue you in federal court under anti-cybersquatting laws (or can force you to arbitrate under international domain name rules). The Dear Rich staff is not saying you're doing any of these things (and it appears from your letter that you're not). But if the big company is hassling you, we're not sure where that will lead. Keep in mind that there's a financial benefit for the law firm if you fight. (Law firms love people who drive up their billables.) We don't want you to cave to a bullying law firm but we're not sure of all the facts in your case and we're not sure that a $10 domain name is worth the hassle. (Unfortunately, it would cost you at least ten times that amount for a half-hour consultation with a trademark attorney.)

Friday, May 1, 2009

Whale Rider: Making a Musical Without Permission

Dear Rich: I am a music and drama director for a tiny K-8 private school in California. Every other year, we put on an all-school musical for parents, friends and families. I often have trouble finding musicals that work for our age group -- most musicals are written for high school-aged kids or older -- so I would like to write my own. Currently, I'm interested in adapting the movie/novel "Whale Rider" for our kids. If I don't publish it, and don't charge for tickets to the show, how much material, if any, can I use from the movie and/or book for our play?Thanks! I'm so glad you asked. You'll be violating copyright law if you don't obtain permission. It doesn't matter that you are not charging and won't publish the final work. Those may be mitigating factors if you're sued, and they may influence a fair use defense, but they won't prevent your actions from infringing the performance and derivative rights of the copyright owner. Since you'll have to take the major characters, plot, and dialogue elements if you wish to conjure up the original, whatever you take will likely amount to an infringement. Asking for permission seems challenging and you would need to determine who to ask -- the novelist, the publisher (who may have acquired those rights), the movie company, or a third party. If the movie differed materially from the book -- and you used those movie-specific elements -- then you'd likely need more than one permission. So, from a legal point of view, it looks like a lot of hassle (and little chance of success). That said, you could attempt to contact author Witi Ihimaera, explain your situation, and seek his blessings/permission (assuming he still possesses those rights).

All that legal stuff aside, the Dear Rich staff would really like to see you make this musical. It seems like a sweet idea and could be very rewarding. So what's a music director in a tiny K-8 school supposed to do? It reminds me of the time my mother called a big music publisher lawyer and asked for permission to perform a song at a nonprofit benefit. The lawyer's response: "As far as I'm concerned, I never got this call." In other words, when a copyrighted tree falls in the forest, sometimes nobody hears it. That appears to be the approach taken by some musical directors.

It would be unwise and unprofessional to advise you to go ahead without permission. However, should you choose to assume the risk -- and it does involve some risk -- you can lower the odds of seeing lawyers on opening night by doing the following:
  • consider using only material from the book (to reduce the chances of the movie company coming after you)
  • indicate on promotional material that the program has not been authorized by the author (it won't prevent a lawsuit but at least you're not misleading consumers)
  • follow the steps you mentioned as those are all mitigating factors -- that is, don't charge admission, don't publish the musical, and don't distribute video or audio copies, and
  • make sure that the administration at your school is aware of your course of action (CYA).
Unless the author or someone from the movie company reads the Dear Rich blog (Hello!) it's unlikely that your efforts will be the subject of a cease and desist letter. If you do receive one, don't blow it off; respond immediately and halt production until a resolution occurs. Finally, have a backup musical ready, just in case.