Thursday, October 25, 2012

Cosmetic Tattoo Business Snafu

photos by Ohmargieg
Dear Rich: I have gone into business with someone whereby we created a verbal contract which she confirmed by email. I approached the business woman with an idea of cosmetic tattoos (which obviously wasn't a new idea) we had meetings, we agreed that we would be 50/50 equal partners and would both be directors of the company. Later that week she decided to register the business with companies house without telling me and then on the phone said she would now only offer me a 30% share if I invest my money into the business. This is not what we agreed and she is continuing to set up the business without me. Is there anything I can do about this as we had already agreed upon a deal which is proved by her email comfirming this? This is a little far afield for the Dear Rich Staff. We don't think cosmetic tattoos (unlike their creative brethren) qualify as protectable intellectual property because they are basically a form of permanent makeup. On the other hand, it's a pretty slow mail day and we're looking for reasons not to deal with the iffy guitar interface hooked to our iMac (How many software engineers does it take to change a light bulb? None, it's a hardware problem!)
Right you had a question. You probably don't have any recourse against your supposed partner. You might have a better postion if (1) you made a financial investment or took some other action in reliance upon the agreement (2) you provided trade secret information about your business idea and the other party agreed to keep that information confidential, (3) you had a proprietary idea (one that could be protected under copyright, patent or trademark law) for a business and it was stolen or (4) you formally created a business entity such as an LLC or corporation which required state registration. We weren't sure what you meant by "register the business with companies house" until we Googled it and realized you were in the UK. Although we have similar legal systems, our answers are based on U.S. law.

Wednesday, October 24, 2012

Wants to Create Mobile Movie Trivia App

Dear Rich: We want to create a trivia game for mobile devices. The topic is movies characters. We want to show some drawings too (made by our artistic staff). Is there a copyright problem with using their names and showing drawings representing them, even if some characters are from animation, or fantasy movies? If permissions were like traffic signals, our staff would give your mobile app a yellow light. You're probably fine but proceed with caution. As we've discussed before, movie characters are often separately copyrightable from the movie(s) in which they appear. If the character is separately protectable (or if the still used from the movie is protectable), your drawings would likely be derivatives and the combined use of character name and image could be considered infringing. We say "could be" because this legal analysis is likely to be overkill. If we examine the cases in which trivia merchandise is pursued (as we did at a recent post), it's usually because it focuses on one movie, TV show, or book. That is, the owner of the movie, book, or TV show feels as if their work is being ripped off. We think you can  conclude that as long as you don't focus your trivia game on one work or character, then the odds diminish as to whether anyone will be motivated to chase you down (and your chances of claiming fair use increase). 

Tuesday, October 23, 2012

Failure to Respond to a Permission Request: What Does it Mean?

Dear Rich:  In a recent post, you made the comment that it’s inefficient for large companies to deal with and track minor permissions requests.  I’m curious about situations where a request is made but no response is given.  While I know a lack of an answer does not equal permission, does the lack of an answer do anything to strengthen the fair use argument?  In other words, would my ‘good faith effort’ in trying to seek permission  weigh in my favor if I resorted to a fair use argument? A related question, regardless of how the previous question is answered, is it appropriate to associate no response with a lack of care about the particular request, thereby indicating a lower risk of being pursued?  A failure to respond to a fair use request should not strengthen or weaken a fair use defense. For example, in the Pretty Woman case (in which rappers borrowed the first line of the Roy Orbison song), the music publisher had refused the permission request. Despite the refusal, the rappers went ahead with their plans, and the Supreme Court ultimately determined that it was a fair use. The reason why the copyright owner's response won't matter is that a fair use analysis happens after a court has determined that infringement has occurred. In other words, by the time a court looks at fair use, permission doesn't matter. 
Why seek permission? If permission is unnecessary for a fair use defense, why ask for it? First, acquiring permission bypasses the need for a legal dispute  (and the uncertainties and expenses associated with it). Second, seeking permission also demonstrates your good faith and may mitigate the damages assessed if your fair use defense fails and there is a negative decision against you.
Does a failure to respond to a permission request mean that there is a lower risk of being pursued. We doubt it. Although, as anecdotal evidence, we can offer this story: Our mom called a lawyer at a well-known movie company for permission for her nonprofit to use a licensed character in a presentation. His response, "You never made this call." In other words, having to say "no," would have obligated the attorney to follow up. 
FYI Dept. -- Silence doesn't mean legal assent. We remember getting letters from lawyers that would say things like, "A failure to respond shall confirm blah, blah, blah." But 99.9% of the time that's just not the case. Inaction, or silence rarely triggers any legal conclusion (either affirmative or negative). For example, there's a famous 19th-century English contract case in which a man offered to buy a horse and stated that unless he heard otherwise from the seller, “I consider the horse mine.” The British court ruled that his assumption didn’t create a contract; the other party’s acceptance had to be clearly expressed. 

Monday, October 22, 2012

Wants to Use Lion King Screenshot

Dear Rich: I want to use a YouTube screenshot of Lion King, the scene where he talks to the ghost of his father, as an example of human trait of denying death, and clinging to dead parents. From what I've read, I think I'm clearly within "fair use," but would still like permission. When I mail my request, I do not know whether to include the screenshot, or just a description. Would just having the screenshot be considered an infringement? We wouldn't worry about possessing the screenshot or furnishing it as part of request for permission. That's fairly common when asking for permission and Disney is not going to call in the lawyers over that.
Fair use? You haven't explained in what media you intend to use the screenshot or what size. In general, your intended republication sounds like a fair use --  you're using the photo for a transformative purpose, to comment on an anthropomorphic personality trait. Of course, the less prominent your use (for example, not on the cover of a book or your use of a smaller image versus a large one), the more likely the fair use defense may work. But as we always say, you can only prove fair use in court ... which means that if Disney learns of your use (and cares) you'll have to give up on the imagery or go toe-to-toe (or is it head-to-head) with the Disney legal team.
Speaking of the Disney legal team ... We have a feeling that unless you're representing a major website, book publisher, or film production company, Disney is unlikely to respond to your permission request (or if they do, they will deny it). That's because it's generally inefficient for the company to deal with and track minor requests, and much easier to simply deny them. In that case, you'll be in the odd position of having been told by Disney that you can't use it. Because of that potential result, many people with self-published or independently distributed works bypass the permission request. These people don't expect Disney will learn of their use and (like you) they may have a decent fair use defense as backup.

Wednesday, October 17, 2012

Wants to Write a Story About Troll Dolls

Dear Rich: My daughter is a collector of Troll dolls, and I am a published fiction-story writer. Do I need permission to write a fiction story about Troll dolls? You're free to write about the Troll dolls but there may be limits on how far you can go when exploiting your story. 
Backstory. The Troll doll characters are protected under a copyright owned by the Danish company Troll Company ApS. [Disclaimer: We used to perform legal services for the Troll Company ApS and we're still deeply fond of the Thomas Dam creations.] The copyright history has been complex and for a period, U.S. courts considered Troll dolls to be public domain. That ended after the U.S. entered into an international copyright treaty in 1996 and the Troll Company reclaimed its rights in the U.S. (It had never lost them in the rest of the world.). The Troll Company has been active in its attempts to exploit its copyright and its most recent foray looks to be a major movie event  with a release date set for 2015.
Protectible characters. BTW, we have previously written about the protectability of literary, film, and licensed characters. We think that literary publication of your story may be possible under fair use/free speech rights but beware that some uses of characters in literary ventures have been successfully blocked. Beyond literary publication, Troll Company would have a right to halt commercial exploitation -- for example licensing the story for TV or film.

Tuesday, October 16, 2012

Wants to Entertain at Parties as Mickey Mouse

Dear Rich:Could you please advise on the use of trademarked character costumes, Such as Micky & Minnie Mouse, We are from the UK, We have been thinking of buying one to use at children's parties at a cost to the party organisers, But we are unsure if we need to ask permission and if we need to be CRB checked. A lot has happened since we last addressed this issue in 2008. For one thing, Minnie, Goofy, and Daisy (left) appear to have undergone drastic (and controversial) weight loss regimens. 
First Sale. Once you buy a Disney licensed character costume, you're free to do a lot of things with it. For example, under the first sale doctrine (which applies under copyright and trademark laws), you can wear your costume around the house or in public, burn it as part of an anti-Disney protest, or resell it. 
Disney's rights. However, Disney retains rights over how a proprietary character is commercially exploited. (And BTW, Disney also goes after those who buy and sell unauthorized character costumes.) Sometimes enforcement may seem heavy-handed. That's because companies like Disney view public exploitation -- whether in movies, on a nightclub stage, or entertaining for money at  a children's party -- as a violation of their character rights. On the other hand, party-entertainment is a growth industry  and the possibility of legal action hasn't deterred some character-based businesses that operate under the radar. In other cases, the owner of a licensed character may provide a way to license rights (so you might want to check with Disney UK). (Note, our answers apply in the U.S. only. Despite the similarity of U.S. and U.K. copyright and trademark laws, we can't say for sure whether all principles apply across the Atlantic.)

Monday, October 15, 2012

He Wants to Use B-Horror Movie Samples

Dear Rich: I have two questions but if you guys are too busy then I think the first one is the most important. I'm recording an EP with my band and we've been considering the idea of using audio samples from maybe a few horror B-movies. I've tried searching the blog for a similar question but no luck so far. I've heard that maybe a few seconds doesn't count as infringement? Our other concern is: A few months ago we found a picture which is basically a scene from a very popular movie. We edited a lot and placed the band name on top of it and then joked about making a limited run of T-shirts with that image on it. Turns out people did like them and asked if we were going to make them. Some say that since we edited the image that we now own that image, but It doesn't really reassure us that much. Would we get in trouble if we sold a few or even give them away? The blog already has helped us a lot and I'm thinking of buying your Music Law book on Amazon. Hmm... You're thinking of buying our Music Law book? Is that a passive-aggressive incentive? Will we close the sale by answering? (Or perhaps if we do answer, will you be less likely to buy?)
Right, you had two questions. It is infringement to copy audio samples from B-movies. Taking a few seconds may qualify as a fair use -- though keep in mind that at least one court has (perhaps illogically) held that taking any audio sample (regardless of its size) violates the sound recording copyright. You're okay to use the samples if the film is in the public domain. (Note, even in public domain films, composers have claimed separate musical copyright.) You may be able to defend your activities depending on the fair use factors. But as we always point out, you can only "win" a fair use argument if you're prepared to fight it in court. Considering the vast amount of unchecked sampling, we think the bigger issue is whether the owner of the B-movie rights will ever learn of your use, or will care if they find it.
Using the movie picture on a t-shirt. If you edited the image you can stop others from using your modifications. But you don't "own" the image. You only own what you added. The owner of the underlying copyright can still stop your derivative use. We don't know if you would get it trouble for using the image -- BTW, it wouldn't make any difference whether you sold them or gave them away for free. Again, that's a matter of anticipating the likelihood that the film's copyright owner would spot your use and care. Our guess is that you'll fly below the radar. (We answered a related question in a previous entry.)

Thursday, October 11, 2012

Can We Use MLB Players in Investment Book

Dear Rich: The book we are writing contains MLB players' names and positions to illustrate a metaphor comparing an investment portfolio to a baseball team. It could be written without the names, but they add value, which is where the question might come in. I read at the Stanford Library Fair Use site that nonfiction books fall under "informational use" rather than "commercial use." The cases on that site make me feel the law's interpreted based on the weather that day. And through this link on your blog  I read that mentioning company names in fictional accounts is not a problem. We won't use player names or MLB-trademark terms (which is about everything BUT the word baseball) to advertise.  We think that your use of MLB player names and positions as a metaphor for investment is an informational use, and is likely to be protected under the first amendment. The distinction between informational and commercial uses is not a bright line, but when making the determination, you should focus on how the celebrity or trademark is used within the content ... not whether the content itself is sold. For example, newspapers and books may be sold to consumers but they may contain informational uses of celebrities and trademarks. On the other hand, giving away a celebrity t-shirt in return for a donation to a nonprofit may be considered as a commercial use. It often comes down to whether the celebrity is being directly exploited to endorse something. (FYI Dept. Much of the stuff written at the Stanford Fair Use site was written by the Dear Rich staff and is from our book, Getting Permission ... just sayin')

Wednesday, October 10, 2012

Of Blogs and Trademarks ...

In a post-Eastwooding world, all empty chairs have meaning
Dear Rich: I am planning on starting a blog that I might ultimately turn into a consulting/market research business (though in the beginning, like most bloggers, I will be providing only free articles and research). Since I might ultimately end up doing commerce under my domain name, and since I think the name is nifty and special, I am thinking of trademarking it right away. This raises a few questions: (1) If I am not actually selling anything yet, but merely advertising services or providing free online research services, is that enough for a full trademark, or merely an intent-to-use trademark? (2) Can I establish a trademark even if I don’t have an official business registration? Might this create any problems later on if I want to transfer the trademark from my personal name to that of the business? (3) Should I trademark the name of the domain or that of the business? If they are the same, does registering for one protect the other? (4) I have the business name and the domain, but I do not yet have a logo. Can I trademark them separately, or should I wait to trademark them all together? Sorry to slow things down but we have an obligation to remind readers that "trademark" is not a verb, so there is no such thing as "trademarking" a name. (We think you are referring to the registration of a trademark with the USPTO.)

  1. To qualify for a registration, a trademark owner must be engaged in commerce regulated by the U.S. government. You can satisfy this requirement if you are writing the blog to attract clients, offer or advertise for services, or if you are leveraging the blog for income, for example, from Google Ads or affiliate programs. Note: this registration will only guarantee protection for use of the mark with your blog. Once you begin consulting services, you may want to file a separate application for those services. 
  2. Yes, you can establish a trademark even if you don’t have an official business registration (that is, you haven’t filed a DBA, or created an LLC or corporation). You can always transfer the ownership and registration from your sole proprietorship to another entity. 
  3. You should file an application for the name that consumers associate with your business. Usually that doesn't include the generic top level domain extension (.com, .net, .org, etc.). If you do seek to register the full domain name you will most likely have to disclaim the extension. (We discussed disclaimers in a previous post.) With a federal registration, you can stop others who use the domain name in bad faith 
  4. Each mark should be the subject of a separate application. No, you don’t need to register related trademarks at the same time. Note: you must pay the fee (approximately $300) for each class of goods or services for which you want protection.

Thursday, October 4, 2012

Cornhole Board Kits and Sports Teams

Dear Rich: I just stumbled upon your blog post regarding cornhole boards and sports decals. I am a maker of custom boards and I'd like to sell boards in team colors. I know that I can't attach logo decals to the boards. However, am I within the bounds of the first sale doctrine if I sell boards in team colors and include licensed logo decals that are not attached to the boards? I believe that I should be okay if the purchaser needs to attach to decals, correct? Uh, we're not so sure. As we indicated in the previous post, buying and selling team decals is fine under the first sale doctrine. But selling a "kit" with a decal and team-colored board may not provide a successful infringement end run.
When the first sale fails ... The first sale doctrine cannot be used as a defense when non purchasers of the item (people who see the assembled product but who didn't purchase the kit) would be confused as to the source. This case provides some background on the principle and illustrates a few cases where the first sale defense failed. (Here's an article explaining the case.) By analogy there is a Supreme Court patent case that prohibits the "knowing" sale of kits (by which the purchaser can assemble an infringing invention). In that situation, the seller can be charged with inducing infringement. Bottom Line Dept. We can't predict how a court would rule in your situation but we believe that if the leagues learned of your activity, they would seek to halt it based on a theory of inducement of infringement.

Wednesday, October 3, 2012

Parry Hotter or Harry Potter?

Dear Rich: Can a publisher publish a crossword puzzle book "Parry Hotter and the Chamber of Crossword Puzzles Book," using situations and characters from the famous series as clues, if those character names are slightly altered so as not to infringe on copyright? You may be operating under the misconception that slight alterations to character names can avoid charges of copyright and trademark infringement. For trademark purposes, consumers are likely to be confused into believing that the term Parry Hotter has some association with the Harry Potter series (which, of course, is the idea). For copyright purposes, the plot situations and characters are still substantially similar despite the dyslexic character spellings. 
Three-letter word for "litigate." There have been three recent unsuccessful attempts at dissecting elements of successful series and repackaging them:

  • Twin Peaks. In this case, a company published a book entitled Welcome to Twin Peaks: A Complete Guide to Who’s Who and What’s What, containing direct quotations and paraphrases from the television show Twin Peaks
  • Seinfeld. In this case, a company published a book of trivia questions about the events and characters of the Seinfeld television series. The book included questions based upon events and characters in 84 Seinfeld episodes and used actual dialogue from the show in 41 of the book’s questions. 
  • Harry Potter. And of course, there was the more recent attempt to create the Parry Hotter ... er, Harry Potter encyclopedia. In that case, a court rejected a fair use defense.
Even if we're wrong and you could manage to prevail under a fair use argument, it's unlikely that you could afford the court battle to prove that defense. Bottom Line Dept. We admire anyone who can create a good crossword puzzle but we don't believe a Parry Hotter crossword puzzle book is a wise investment.

Tuesday, October 2, 2012

Pre-Creation Assignments and Works Made For Hire

Dear Rich: Our non-profit company engages a large number of translators to create versions of US-sourced written and audio materials in other languages. While some of them work under work for hire provisions, others, who do the work voluntarily do not, because no hiring (payment) is involved. Is it possible to have a volunteer contract worker (as opposed to an employee) sign a copyright assignment prior to the work being created? Or, if there’s a pre-work contract, can you only obligate the contract worker to assign the copyright once the work is completed? Let's step back for a second and re-consider your situation.
  • Employees. Employees (not independent contractors), don't require any paperwork. The employer acquires copyright in all creations completed within the scope of employment.
  • Independent Contractors. Independent contractors would be bound by work made for hire provisions in their contracts. That's acceptable because a "translation" is one of the acceptable work made for hire categories.
  • Volunteers. Volunteers do not receive a payment. However, that doesn't mean that some consideration is not passing to these folks. "Consideration" is the answer to the question as to why someone is performing a task. And as long as you can point to some consideration for volunteers -- for example, interns acquiring work experience, translators acquiring job references or a portfolio -- you can use a work for hire agreement with the volunteers. You can state "for consideration, the sufficiency of which is acknowledged," in the agreement (although if both parties sign, that's not necessary (scroll down) in a majority of states).
Assignment or work made for hire. It's best to have consideration of some form whether seeking a work made for hire or assignment. Assignments that have no consideration are sometimes considered gifts (or "donative") and in some cases may be revocable. However, as noted above, consideration is not necessarily money, and often -- if the parties agree that consideration has been exchanged -- courts will not inquire into the value or quality of that consideration. In light of that, you may wish to consider having your attorney draft a work made for hire agreement for volunteers that states that if the work made for hire provisions are not valid for some reason, the volunteer agrees to assign copyright. We discussed these "either/or" agreements in a previous entry.
Can you make a pre-work assignment? Technically, the translator has no copyright to transfer until the work is finished or "fixed." That's when the copyright first manifests itself. Some agreements bypass this issue by having the person promise to assign the work and to grant a power of attorney for such purposes. For example, pre-invention assignment agreements typically include copyrights and these agreements have routinely been found to be valid.

Monday, October 1, 2012

Terminating BMI for ASCAP: What Happens?

Dear Rich: I was in a band that released a few albums. The band's music publisher affiliated with BMI and so did all of the band members who were songwriters. That was about 15 years ago and now I'd like to switch to ASCAP. If I affiliate with ASCAP and terminate with BMI, will ASCAP continue to pay me my share of the songs from my old band? (For readers who may not know, BMI and ASCAP are performing rights organizations that collect money for public performance of songs -- we discussed PROs in a previous entry.) The good news is that you will continue to get paid if you switch from BMI to ASCAP. BMI will write checks to you as a "terminated" writer for a song that is associated with a BMI-affiliated publisher. We weren't aware of the practice but it was confirmed by BMI and ASCAP reps. (BTW, the differences between BMI and ASCAP are highlighted here).