Entertainment Law, Copyright + Hollywood Legal Must-Knows with Elsa Ramo
Entertainment law generally encompasses industries involving motion pictures, television, music, publishing, and theatre. These industries have special economic and business considerations that involve nearly every area of law including copyright, trademark, trade secret, rights of privacy and publicity, securities, tax, tort, corporate law, labor law, constitutional law, international law, and so forth. The law of copyrights, trademarks, trade secrets, and patents each play a role in protecting creative rights.
Copyright law is fundamental to the protection of literary, artistic, dramatic, musical, graphic arts, and other creations. Copyright does not protect ideas by themselves, but rather the expression of original ideas in some tangible medium such as a canvas, piece of marble, high definition digital video tape, 35mm film, etc. A copyright is the exclusive right given by federal statute to the creator of a literary or an artistic work to use, reproduce, and display the work. The creator of the work has a limited monopoly on the work and can, with some exceptions, prohibit others from copying or displaying the work. Copyright law protects such works as writing, music, artwork, and computer programs.
A copyright gives one the exclusive right to use or reproduce a literary, artistic, dramatic, audiovisual or musical work, or a computer program for the creator’s life plus 50 years. If a work is a “work made for hire,” this means that a person was hired specifically to create the copyrighted work. The employer of the creator of the work can register the copyright and is entitled to protection for 100 years from creation or 75 years from publication, whichever is less. Once a copyright expires, it is in the public domain and no longer has protection. Works created by the federal government are also in the public domain.
A copyright is obtained simply by creating the work. It comes into existence automatically on the dated it is created. However, in order to get federal protection of a copyright, you have to file two copies of the work with the Copyright Office in Washington, D.C.
Copyright law is designed to create an incentive for creativity by allowing the author to profit from his work. The Act tries to balance this need to protect the author with the public’s need for free and open discussion. A copyright owner has the exclusive right to:
reproduce the work;
prepare derivative works such as a script from the original work (ex., movie script for The Rainmaker);
distribute copies or recordings of the work; and
publicly display the work in the case of paintings, sculptures and photographs.
Trademarks are symbols or words that are used to designate the source of origin of a particular good or service. A mark is any word, name, symbol, or design that identifies a product or service. A trademark identifies a product (for example, Coca-Cola). A service mark identifies a service (for example, Holiday Inn).
A mark may be registered pursuant to Federal law if it distinguishes a person’s product or service from products or services of competitors. Registration of a mark on the federal Principal Register entitles a person the exclusive use of the mark. Registration can also be accomplished with the State. However, State registration does not provide as much protection as Federal registration.
Generic terms that merely describe a class of products cannot be registered. For example, the term motor oil or the word airline would not be registrable. Descriptive or geographical terms cannot be registered unless they have acquired a secondary meaning. A mark acquires a secondary meaning when, through long usage, the public identifies the mark with a particular product. For example, Best Western Motels involves a mark which has a secondary meaning.
As stated earlier, registration entitles a person to the exclusive use of a mark. An owner of a mark can enjoin others from using it. This is a Court Order preventing the improper use or duplication of a mark that may confuse the public.
One can be an owner of a trademark or service mark, whether or not it is registered. This is common law protection. Registration is proof of ownership and makes ownership rights easier to enforce. The basic question in lawsuits over marks is whether or not the general public is likely to be confused as to the origin of the service or product.
If the owner of a mark permits widespread use of the mark to describe a general class of products, the exclusive right to the mark may be lost. Two examples are cellophane and aspirin.
Trade Secret Law
A trade secret generally includes any information used in the course of trade or business which lends a competitive advantage and is not generally known within the trade or industry. In order to claim something as a trade secret, it must not be common public knowledge, it must have demonstrable value, and it must be protected and maintained as confidential by the owner.
A formula, process, or information that is secret, and gives its owner a business advantage may be protected under State laws concerning trade secrets. Trade secrets, basically, are any formula, device, or information that is used in a business, and is of such a nature that it gives the owner an advantage over competitors who do not have the information. Trade secrets are protected under State law rather than Federal law. This protection may be by virtue of common law or statutory law, such as the Uniform Trade Secrets Act.
When a trade secret is made public, it loses its protection as a trade secret unless it is disclosed in a restrictive manner to persons who know of its confidential nature.
In the context of the entertainment industry, patent law is generally used for protecting equipment innovations such camera, film, music, and television equipment and other innovations in merchandising. Entertainment companies often obtain patents on the machines they create to display or perform entertainment products. A “patent” is a grant of a property right by the Government to an inventor.
The United States Constitution gives Congress the right to provide for patent protection in legislation in order to encourage useful inventions. The patent itself provides a detailed description of the invention, and how it is used or how to make it. Thus, if you obtain a patent you cannot keep the matter secret, which is the province of Trade Secret Law. A patent enables the owner to exclude others from making, using or selling the invention for the life of the patent.
Federal statutes give an inventor the exclusive right to use, sell, and market his invention. The types of things that can be patented are things that are new, useful, and not obvious to those in the business to which the invention relates. An invention also may be a process, a new chemical or even a new type of plant.
A significant amount of income for entertainers can be acquired in the form of profits from a royalty agreement. The first step to a royalty agreement begins, for example, when a songwriter pens their original piece. From being produced in tangible form, the artist receives a copyright. The writer then may wish have their song exposed and published by a recording company.
The songwriter will assign a copyright to a publisher who will market and promote the material. Those that wish to use the copyrighted material will then begin the process of establishing royalty agreements and be issued a license. The proceeds from the sales and use of the copyrighted material by anyone will then be required to pay royalties to the publisher which represents the writer selected. Types or royalties a songwriter may be entitled to include:
Print rights such as sheet music and lyrics
Mechanical, or physical production, royalties
Royalties paid in compliance with the Audio Home Recording Act of 1992
The royalty rate an artist may negotiate proves very flexible and heavily based on the promise and clout of the songwriter. For example, the current statutory mechanical royalty rate set by U.S. Congress is $.08 for songs shorter than five minutes and for each additional minute over five the rate increases $.0155 per minute. For example, an eight minute song being played will be paid at the statutory rate $0.124 per use of the song, and one million uses of this record would result in a hypothetical royalty amount at the statutory rate of $124,000. This rate, however, is negotiable, and many other negotiations and factors play into the actual amounts of royalties which will be actually received include stature in the industry, prior and present success, and negotiating ability.
Following the development of a literary piece, an author will undoubtedly seek to publish their work through one of two common methods: self-publication or use of a publishing company. Even in the event an author wishes to self-publish their own works, it is best advised they seek the counsel of an entertainment lawyer to smooth the process for them. While this method avoids the difficult contract phase with publishing companies, self-publishing may present other unique problems which will best be handled with the aid of an entertainment lawyer. The more popular approach to publishing, the brokering of a deal with a publishing company, calls for serious legal considerations. Some of the options an author and their entertainment lawyer must address when negotiating a literary publishing deal include:
Purchase of intellectual property rights
Royalty and advance financial figures
Intended formats of publishing
Proposed locations or countries of distribution
Derivation of copyrights
Some important questions one must ask before entering a contract negotiation include:
What is the desirable outcomes or goals
What desires can be reasonably altered for the sake of other wants
What information do you have the other negotiating party
Identify what you can offer the other negotiating party
Identify what you can gain from the other negotiating party
An important aspect of all artists’ careers is ensuring that their music is appropriately distributed and heard by others. This will cause many artists to ask how to start a music publishing company. A music publisher offers to artists the service of promotions of musical compositions or work. The music publisher will actively promote an artist’s talent, align synchronization deals for television, advertising, and film, create performance revenues, and collect publishing royalties from any person or organization playing an artists music. While an artist focuses intently on the creation and perfection of their music, a music publisher will ensure the artist’s music is heard, performed, and properly compensated for these uses.
What are the benefits to be earned after learning how to start a music publishing company? The benefits and music business guidance a music publisher can offer an artist are numerous, but the decision to align oneself with a publishing company should be given some serious legal consideration. While the possibilities music publishing company could possibly offer to aspiring artists and publishers are large, an entertainment lawyer will help you ensure these promises become a reality instead of a legal nightmare.
An artist with proper legal aid in forging their own music publishing company can expect to receive income through:
Mechanical or retail royalties
Royalties paid in compliance with the Audio Home Recording Act of 1992
The advancement of an artist’s career can be immediately bolstered through the service of a music publishing company. The integral role a music publishing company plays in the music industry aids their artists in many ways. The company promotes the artists music to record companies, ensures royalties are received from performing rights organizations such as ASCAP, SESAC, BMI, and deals with the recording companies for the artist. An entertainment lawyer can provide you with what may literally become priceless advice and service in assuring your ambitions to start a music publishing company are in your best interest. Why wait in taking an important step to stepping up the level of your musical career today?
A talent agreement records certain documented promises issued by all those engaged in the entertainment industry. The far reaching implications of a talent agreement undoubtedly will overwhelm, if not simply confuse, any aspiring entertainer. The binding nature of these agreements will affect the choices and rights an entertainer will have well into their future. A frequent fear of those involved in the entertainment industry is the prohibitive nature a previously signed talent agreement may place upon one’s career. The meticulously detailed and industry-adept a talent agreement could possibly leave an entertainer unaware of the possible implications and nuances a talent agreement may inject into their career. Some common considerations when reviewing a talent agreement with a lawyer include:
Obligations and responsibilities to be met
Duration of the contract
Exclusivity or non-exclusivity of the relationship between the entertainer and agency
Percent and parties which are liable for financial loss
The rights of the works created while under the talent agency
Percent of commissions for talent and the talent agent
Future earnings agreements
Mechanical and reproduction rights
Entertainment Law Overview and Information
Entertainment law encompasses legal areas such as copyright, trademark, contract, multimedia law, intellectual property, and book publishing. Related areas of law include First Amendment law, telecommunications law, sports law, and all areas of intellectual property law.
The personal service agreement is a primary legal instrument in the entertainment industry. This agreement is negotiated between an artist and a company that manufactures, promotes, and distributes the artist’s goods or services. The agreement often commits the artist to produce exclusively for one company for a certain period of time.
Personal service agreements are often governed by statutes, and are often the subject of litigation because of the restrictions placed on the rights of artists to perform or create for other entities. Many times, a contract for rights is combined with a personal service agreement. The agreement will often state that any work created by the artist during the term of the agreement is considered a work for hire.
In a work for hire situation, the employer often receives automatic ownership of the copyright to the artist’s work. For a work for hire to exist, the artist must either be an employee of the company or create the work under a valid contract, and the work must fall under certain categories defined by copyright law.
A license is a contract through which the artist or copyright holder grants certain rights to another party. For instance, a novelist might grant a license to a film studio to create a screenplay based on a novel. A license specifies the fee or royalty to be paid to the artist, the exact scope of use of the copyrighted material, and the time period for which the company may use the material, as well as any other conditions the parties agree to attach to the license.
U.S. copyright law contains provisions specifically covering the entertainment industry. For example, a licensee who records a song under a compulsory license is required to follow strict statutory guidelines for notification of its use and reporting sales and royalties to the copyright holder. A compulsory license requires a copyright holder to grant a license to anyone else who wants to record that song, and arises when a song’s copyright owner has previously granted permission to someone to record a song or if the songwriter has recorded and commercially released a recording of the song. The fee for a compulsory license is set by Congress, and is adjusted for inflation every few years.
The advance of technology and digital publishing has expanded traditional entertainment legal issues. For example, the value of digital downloading rights, and how this will become an increasingly important point in recording contracts.
Entertainment lawyers handle issues such as contract negotiation, licensing, sponsorship/endorsement agreements, etc. In addition, most of the attorneys who practice in this area also provide a full range of tax and estate planning services.