The LACBA Student Lounge Blog

Coming soon to a Wal-Mart near you…

It isn’t a secret that new modes of distribution are viewed as shaky ground by the major studios.  It makes sense to tread lightly when it comes to innovation.  However, the real battle begins when the mode of distribution grows quickly.  Cue Redbox, the fifth largest DVD rental company in the U.S. run by CEO Mitch Lowe.

That little kiosk sitting at your local McDonald's and/or Wal-Mart with “$1” emblazoned on it represents one of the new battlegrounds.  A quick Google News search will show you coverage of the kiosk invasion.  However, it will also show you that tensions are high.  The discount DVD rental source has filed suits against Universal Studios Home Entertainment and 20th Century Fox within the past three months.  Though two of the three claims put forth by Redbox against Universal were dismissed by a U.S. District Court judge for Delaware, the antitrust claim survived a motion to dismiss.   

Both Universal and Fox are joined by Warner Home Video who restrict new DVD’s from being sold to Redbox until 28 days after their street date.  Why?  According to the numbers, Redbox transactions yield average revenues of barely over $2 whereas traditional retailers are yielding just over $4.  Factor in a couple million transactions and that’s a revenue stream looking as shallow as the L.A. River to the studios. 

However, not all studios are slow to embrace Redbox who has been around since 2002.  Lionsgate signed a deal worth over $150 million to permit distribution in the kiosks.    Sony and Paramount have also signed deals.  Disney permits third-party distributors to sell to Redbox, but has not dealt directly with the company. 

There is currently a slow parity developing among the three dominant sources of rentals:  DVD-by-mail providers, traditional rental stores, and video vending machines.  Even Blockbuster recently announced the closing of hundreds of stores across the country to spend more time focusing on online distribution in order to compete more successfully with rival Netflix.  The quick rise in video vending machines and its impact on the lucrative rental profits has some in Hollywood on the edge of their seats.   Some view it as an untapped resource and others view it as having the same impact the internet has had on the music industry.  What muddies the waters is the issue of leverage.  The kiosks survive on giving quick and easy access to new releases and popular titles from the studio’s libraries while the studios must adapt to consumer trends.

Will the singular antitrust claim prove decisive in this new battleground?  Doubtful.   Change in the rental model is not going to come easy for Lowe and company.

For more information:

Movie Studios See a Threat in Growth of Redbox

The Lowe-down on Redbox

Court OK’s Redbox Suit Against Universal

Paramount to Give Redbox a Spin

New Danger Mouse Release is a Blank CDR? Inducement?

Of course one of the greatest battlegrounds of copyright has been the music industry. Since music went digital, things just haven't been the same.

Reported by the Electronic Frontier Foundation, Danger Mouse, who later formed Gnarls Barkley, has now entered the fray by releasing a blank CDR and labeling each CDR with the following:

"For Legal Reasons, enclosed CD-R contains no music. Use it as you will."

Doesn't make sense? According to the EEF article, earlier this month the latest album recorded by Danger Mouse, Dark Night of the Soul, which includes a variety of well known guest artists, was leaked through a number of sources online. This after unsuccessful discussions with the major record label EMI. Danger Mouse has released the CDR with a book of photographs that were inspired by the music on the album Dark Night of the Soul.

What's the big deal? The inducement rule: a test a United States court can use to determine whether liability for copyright infringement committed by third parties could be assigned to the distributor of the device used to commit infringement.

Ex-Wilco Member Sues Frontman: Royalties

Spending seven years with the band Wilco as a sound engineer and playing instruments, Jay Bennett has sued Wilco's frontman, Jeff Tweedy over royalties in a county Circuit Court. Bennett claims that he was not compensated for his appearance in a film that documented the creative process behind the album "Yankee Hotel Foxtrot." According to a Chicago Breaking News article, Bennett also argues that he was only paid partially and infrequently during his years with the group and that those payments amounted to 15% of the bands income from sales and performances.

A commentator on the case opines that the amount in controversy, which is $50,001, is just enough to get this case through the doors of plaintiff Bennet's preferred court.

Gloria Allred Sues Octomom: Child Labor Law

Super Glo, Gloria Allred, announced yesterday her lawsuit against Nadya Suleman, AKA Octomom. How is that possible, you ask? What might this cause of action be and how is it that Super Glo has standing to sue Octomom?

According to a recent NBC article, Allred's suit is based on child labor laws. That's right. Gloria is alleging that Octomom is putting those bundles of joy to work even before their first birthdays. Here, Allred is pointing to the fact that Octomom has already appeared on reality TV shows and has a few other reality TV projects in the wings.

On the standing front, Allred may be relying on her former representation of an organization that offered nursing services to Octomom. Sadly, the service organization was fired by Suleman after an accusation of spying.

Suleman lives in La Habra, California. Allred's office is in Los Angeles.

Hollywood Studios to Judge: No Fair Use in Copying Personal DVDs

The Motion Picture Association of America is in a lawsuit against RealNetworks and is arguing that consumers simply don't have a right to copy their own DVDs (i.e. there's no fair use defense in copying DVDs).

At issue is a software package that RealNetworks released called "RealDVD," which allows users of the software to copy encrypted DVDs. Before it was taken off the market, about 3,000 copies of the RealDVD software package were sold.

On the other hand, RealNetworks is arguing that the studios are functioning like a cartel that doesn't allow products to compete with its own offering, DigitalCopy, which allows users to access a download of a movie when a consumer purchases a DVD. RealNetworks also argues that creating a backup copy of a DVD is protected under the "fair use" doctrine of copyright law.

More on this story at Wired.

An RIAA File Sharing Win: Obama Adminstration Supports Damages Up to $150K

The Obama administration has chimed in on the hot button issue of file sharing online. In its relentless efforts to curb illegal file sharing online, the Recording Industry Association of America has tackled several music download players, including some electronic forums that appear to have accommodated illegal file sharing and some individuals who benefit from the activity.

For the first time, the Obama administration  spoke out in support of fines between $750 and a whopping $150,000 for each illegally acquired music track (violation of The Copy Right Act). This position is the same as that of the Bush administration.

Some critics of the Obama administration's position here note that two top lawyers in the Obama administration are former RIAA lawyers and that the government's brief seemed coincidentally in line with the RIAA's position on the issue of damages in illegal file sharing cases.

More on this story at Wired.com.

Lil Wayne's Tour Rider: An Entertainment Contract

Thinking about a glitzy entertainment law career after graduation? You just might end up drafting, negotiating or suing someone based on a tour rider. A tour rider, of course, is an agreement, usually between an event promoter and the talent. These agreements are known for outlandish and very detailed requests. A copy of Lil Wayne's 2008-2009 tour rider is here.

Details on this at The Smoking Gun.

Godzilla's Lawyers Slay Evil Trademark Infringers

As reported in Wired, with hundreds of law suits and take down actions under their belts, the lawyers who protect the Godzilla trademark have battled it out with movie studios, automakers, toy manufacturers, rock bands, book publishers, national food chains, record labels, bloggers, wineries and any other individuals or entities that attempt to capitalize on the trademark value of the notorious reptile. In case you were wondering, the offending winery released a product labeled "Cabzilla."

That policing is a full time job, in part because of Godzilla's uniquely embedded place in U.S. culture. Unlike E.T., the Predator or the slimy extraterrestrial from Alien, Godzilla is often regarded by the public as community property. People don't understand or believe that the character that first appeared in a Japanese black-and-white in 1954 is a closely guarded piece of intellectual property, and rarely do suspected infringers know that Godzilla's movie music and pictures are copyrighted, and that his distinctive features and name are trademarked.

Thinking about protecting a notorious monster in your future law practice? Wondering if protecting a trademark like this could pay off? Of course, we don't know how lucrative it is for the lawyers who protect the mark, but if it's any indication, the consistent challenge of protecting the trademark, owned by Toho Company, Ltd., has paid off in the form of about $120 million annually from licensing.

Guns N' Roses Uploader to Plead Guilty: Copyright Infringement

A Los Angeles man was recently arrested because he allegedly uploaded a number of Guns N' Roses songs from the forthcoming album by the band titled Chinese Democracy. The man agreed to plead guilty to one count of copyright infringement in the deal.

According to a Wired article, authorities reduced the charge from a felony to a misdemeanor some time ago. Based on court documents, it was discovered that the RIAA brought the case to the FBI. It is expected that the album will be released around Thanksgiving.

Jury Orders NFL Players Association to Pay $28.1M to Retirees

The Associated Press reports that on Monday, a unanimous, federal jury verdict ordered the NFL Players Association to pay $ 8.1 million to retired players after finding that the union failed to properly market their image. Specifically, the jury found that the union owed retirees $7.1 million in actual damages because the organization failed to include them in marketing deals with EA Sports, the makers of “Madden NFL.”

The players, lead by  Hall of Fame quarterback Herb Adderley, argued that the union failed to actively pursue marketing deals on their behalf for video games, trading cards and other sports products. The union’s primary defense was that trading card companies such as Topps and Upper Deck paid exclusive licensing fees only for active players.

Richard Berthelsen, the union’s acting executive director said that the players union would ask the trial judge to throw out the verdict. If that fails, the union plans to appeal.

(Photo: Herb Adderly at Professional Football Hall of Fame Induction)