Law/Entertainm… · Web viewIrvine- 5 yrs (Owner of Frontline Mgmt- the most important mgmt co in world; ... selling a program individual to the affiliates in local markets or

Entertainment Law Outline 1

1. Representing Talenta. A business of intermediaries

i. Agents focused on deals, personal mngrs on career developmentii. Business mngrs (usually CPAs) focus on financial aspect of clients’ careers

1. Strong fiduciary obligation to client (ABKCO)iii. A lot of malpractice claims filed against enter’mt lawyers

b. Attorneysi. Establishing an attorney-client relationship

1. Att’ys should not give advice unless prepared to accept responsibility for client’s reliance

2. Att’y is part of team of ppl representing a persona. Each type of att’y is differ: book att’y v. music att’y v. acting att’y

3. Retention agmt defines expectations4. Att’y has highest level of fiduciary duty under the law

ii. Duty of Competence1. Legal knowledge, skill, thoroughness + preparation reasonably

necessary for representation2. Consultations w/ more experienced counsel highly advisable

iii. Conflicts of Interest1. Enter’mt business conducive to COI2. Multiple client representation

a. MRPC 1.7i. (a) Except as provided in paragraph (b), a lawyer shall not

represent a client if the representation involves a concurrent COI. A concurrent COI exists if:

1. The representation of one client will be directly adverse to another client; or

2. There is a significant risk that the representation of one+ clients will be materially ltd by the lawyer’s responsibilities to another client, a former client or a 3d person or by a personal interest of the lawyer

ii. (b) Notwithstanding the existence of a concurrent COI under paragraph (a), a lawyer may represent a client if:

1. Lawyer reasonably believes he will be able to provide competent + diligent representation to each affected client

2. Representation is not prohibited by law3. Representation does not involve assertion of a claim

by one client against another client represented by that lawyer in the same litigation or other proceeding before a tribunal &

4. Each affected client gives informed consent, confirmed in writing


iii. Designed to advance & protect confidentiality & undivided loyalty

3. Factors for assessing COIs:a. Duration & intimacy of lawyer’s relationship w/ client’s involvedb. F(x)s being performed by lawyerc. Likelihood that disagreements will arised. Likelihood of prejudice to client from conflict

4. Key to dealing w/ COI:a. Be super carefulb. Go to bar and ask them Qs to see if there is a conflict

iv. Music lawyer as mngr or agent1. Musicians looks to att’y to get deals for them

a. How do they get pd when young musicians don’t have $?i. Bar Ass’ns ltd % payments to personal injury att’ys

2. Most all att’ys in music industry get pd on % of deal –usually 5-10%a. Fee still has to be reasonableb. If want to be a mngr & att’y, increase commission to cover legal

services, but exclude litigation services as part of the legal services covered in commission

v. Special considerations re: lawyer conduct1. Merging the roles of various enter’mt representation

a. Lawyers who act as agent/mngr are still subject to states’ codes of PRE to extent any activities involve delivery of legal servs

2. Advertising & solicitation- MRPC 7.2 + 7.33. Compensation for att’y servs & retention agmts

a. Customary contingent fee is 5-10% of defined compensation earned by the client

b. Sunset provision- get a declining % after expiration of term of retention/contingency fee agmt

c. Model rule 1.5 requires hourly & contingent fees to be reasonable

i. Criteria for reasonable fee:1. Time & labor required2. Novelty & difficulty of the Qs involved3. Skill requisite to perform the legal service

properly4. Fee customarily charged in the locality for similar

legal servs5. Amount involved & results obtained6. Experience, reputation & ability of lawyer(s)

performing the servs required7. Fixed or contingent fee


d. Contingent fee agmts must be:i. In writing

ii. Signed by clientiii. State method by which fees are to be determined, %

lawyer shall accrue in event of settlement, expenses to be deducted from recovery

c. Agents & Personal Mngrsi. Agent is someone who procures employ’mt on behalf of the artist

ii. CAVEAT: In CA, can be either a mngr or agent, but cannot be bothiii. Agents want as many clients as possible, mngrs can only handle a few clients

at a timeiv. Union regulation of agents

1. Collective bargaining agmts negotiated b/w unions & producersa. Union Franchising System- gives the good housekeeping seal of

approval for an agency deali. Agents regulated by unions through franchising licenses

ii. Keep licensing of agents from being a shamiii. Keep agent % down on deals

v. State regulation of agents1. NY & CA

a. Agents must be licensedb. CA will accept almost any case that touches CA in some way

2. Labor Commission is generally the “state court” that determines whether you violated the law

a. Violations:i. Mngr procured employ’mt for artist—even if just once

1. LC will declare K b/w mngr & artist null & void ab initio & make mngr give artist back all collected commission

b. LC is pro-artistc. Won’t recognize arbitration clause if find K to be null & void

3. Minors?a. Certain amount of $ must be put away in trustb. Ct will appt a guardian ad litem for minors going into K deals to

protect them from bad dealsd. Mgmt Deal Components:

i. Commission1. Pd % of artist’s income (15-25%)2. Net v. gross

a. Net- cut out expenses artist pd before mngr gets pd % (Artist wants this)

i. Records deals: most the $ coming from record pays for the actual recording


b. Gross- income before expenses (Mngr wants this)3. Mngr can get portion of getting client a record deal, i.e. finder’s fee

a. But if att’y, may not be allowed finder’s feeii. Term

1. Generally 3 years, 2 for newer/younger mngra. Irvine- 5 yrs (Owner of Frontline Mgmt- the most important

mgmt co in world; he only works on a handshake deal)2. Way to incentivize—longer term = need to get artist more work

iii. After Term Income (“sunset” provision)1. $ earned after agmt is over for deals that occurred during mngr’s term2. Makes sure mngr gets pd for everything he worked on

iv. Expenses1. Dictates what mngr can spend w/o authority & still get reimbursed by

artista. Mngr still has to inform artist of all expenses on a regular basis

v. Authority1. Mngrs usually want:

a. Power of att’yb. Ability to hire/fire ppl

2. Dictates what artist wants mngr to be able to do3. On certain issues, will always need artist’s permission

vi. Other:1. Arbitration clause2. Fiduciary duties

a. Mngrs want reasonable efforts, artists want best effortse. Cases—This is all CA Law

i. Buchwald v. Superior Ct of San Fran (CA 1967)1. Katz signed Jefferson Airplane2. Katz not licensed

a. Said he would procure shows for them & receive commissionb. All mngr agmts disclaim: I’m not your agent even if I get you a

job3. Agmt says supposed to resolve disputes through AAA, instead referred

to Labor Commiss’r under Talent Agency Act (TAA)4. TAA K b/w unlicensed agent & artist void5. Agmt b/w Katz + JA for personal rep advisor & mngr

a. Does not promise to obtain employ’mt for JAi. JA says verbal promise

ii. K misrepresented Katz as an agent6. Katz refused to allow them to get own bookings; no payment for

bookings they did perform7. TAA remedial statute8. Licensed or not, bound by Artists’ Mngrs Act


9. TAA LC empowered to hear disputes re: validity of agent-artist K10. Doctrine of “exhaustion of administrative remedies”

a. Must first seek relief from admin body before going to ct11. Holding : LC has original jurisdiction to hear disputes arising under

TAA, agmt invalid b/c it did not comply w/ Acta. Issue—form of the transaction (representing to JA that an

agent) rather than substance (K saying not an agent) controls!12. Case stands for principle behind power of LC

a. Jurisdiction of LC should be interpreted broadlyii. Pryor v. Franklin (CA 1982)

1. F mng-d P from 1975-19802. 1981 hearing said K void b/c F acted as unlicensed agent

a. F to repay P3. F promise to:

a. Procure employ’mtb. Negotiate agmtsc. Held out as agent to 3d party

4. P’s “sole & exclusive negotiator”5. Holding : “Broadest remedy of restitution”—F solely culpable for all

violations of law, P shared no blame or guilta. K ruled void ab initio b/c F not licensed so F turns over all $

made to Pb. Rosenthal: Ct didn’t like & develop draconian rule against Δ Δc. Rule: Can’t be in room during negotiations

iii. Barr v. Rothberg (CA 1992)1. Oral agmt for R to represented B2. R induced B to sign written agmt as an agent

a. R not licensed 3. B was w/ Triad Agency—terminates agmt w/ TA shortly after meeting

w/ Ra. Prior to 1988-1990, B hired William Morris Agencyb. WMA commission on all except ‘Roseanne’ show b/c TA

procured thati. R part of renegotiations, B received more as part of

success of show4. Holding : R acted as a personal mngr during renegotiations, which was a

joint effort, relief to B denieda. Agent must find engaged in procuring, offering, promising or

attempting to procure employ’mt or engagementsb. New Rule: Can be in negotiation room as long as not the one

procuring the worki. Statutory exception: if agent asks mngr to lead

negotiations, does not mean mngr procured work


iv. Center of Gravity test:1. Against the mngr2. Must look at entire business of representation

v. Bright Line test: right to void Ks that secured any type of workvi. Park v. Deftones (CA 1999)

1. terminates personal mngr K w/ Δ w/o paying ’s commissions2. got deal w/ Maverick, whose agent, Gary Oscary, interfered w/ &

’s K-ual relationshipΔ3. sued for commission, countersued saying mngr procured work for Δ

them4. said that showcase was an incidental booking in order for the band to

get paying work5. Holding : K void b/w & b/c Δ secured performance engagements for

w/o being licensed as a talent ag’yΔa. Personal mngrs primarily advise, counsel, direct & coordinate

development of artist’s careerb. Waisbren even incidental activity in procuring employ’mt is

subject to TAAc. Even though rec’d no comp, the 1993 + 1994 agmts provide for

compd. TAA does not expressly exempt procurement where no comp is

madei. Ct says abuses should apply equally where deferred

benefits from obtaining recording Ke. Act requires license even if commission not rec’d

vii. Chinn v. Tobin 1. C + Wampole sign agmt w/T to record & publish music2. C + W gave exclusive recording services to T3. T would be exclusive personal mngr & advisor4. Only songwriting services for T employing an artist does not =

procuring employ’mt for an artist5. Holding : nothing in TAA says employers of artists must be licensed

under TAAviii. Marathon Entertainment v. Blessing

1. Actor on Lifetime Show, Strong Medicine, trying to not pay commission to mngr who got her show

2. New Test:a. Apply doctrine of severability

i. Look at what mngr didii. Not going to declare K null & void ab initio even though

was not licensed


iii. Sever commissions--$ that came from show goes back to artist, but other mngr-related commissions mngr keeps

3. Recognition that voiding Ks ab initio was too inequitable on mngrs’ behalves

2. Entertainment Rightsa. Personal Rights: Publicity

i. Right of publicity- right of each individual to control & profit from the commercial value of his or her own ID (property)

1. Rationale: protection of a celebrity’s proprietary interest in the development of a marketable image

2. Serve societal interests:a. Guard against unjust enrichment (K)b. Financ’l incentive to those who cultivate a unique persona

(copyright)3. “Name & Likeness”

ii. No CL right of publicity in NYiii. Issues:

1. Is the right of publicity descendible?a. Conditional?

i. Commercially exploited during person’s lifetime?2. If yes, how long does right last?

iv. Exception for parodies and satiresv. Zacchini v. Scripps-Howard Broadcasting, Co. (SCOTUS 1977)

1. TV reporter tapes Z’s act—being shot from a cannon—and shows it on TV

a. Act is only 15 seconds long2. Rule: Right to publicity value of his performance

a. May not use for own benefit the name or likeness of anotherb. Liable for appropriation over artist’s objection & in absence of

license or privilege3. Ohio Supreme Ct said freedom of press requires some breathing room4. Holding : Z not looking for injunction, just wants to be paid—neither the

public nor respondent will be deprived of the benefit of petitioner’s performance as long as his commercial stake in his act is appropriately recognized

a. SCOTUS looking to protect entertainer’s incentive to encourage protection of this type of work

b. Emphasis on the fact that news station showed Z’s entire actc. Powell’s Dissent: report part of an ordinary news program, a

total of 15 seconds, which is a routine portionvi. Elvis

1. When died, most states did not recognize descendibility for right of publicity


vii. MLK Center for Social Change v. American Heritage Products (11th Cir. 1983)1. Center sued for selling plastic busts of MLK as an “exclusive Δ

memorial”a. Set aside 3% of purchase as contribution to Center, but trust

fund for Center was never executed2. District Ct found s had infringed MLK’s copyrights and ordered to Δ

discontinue use of Center’s name in promoting busts3. Issue: Did District Ct err in finding that not necessary to determine

devisability of right of publicity b/c MLK never commercially exploited this right during his lifetime?

4. Holding : appropriation of another’s name and likeness for financial gain is a tort in GA & measure of damages is the value of the appropriation to the user, the right is inheritable and devisable, & exploitation beyond the activity which made him famous is not now required

a. As long as could have exploited, does not matter that he chose not to

b. Invasion of privacy loose collection of 4 torts:i. Intrusion upon ’s seclusion or solitude

ii. Public disclosure of embarrassing private factsiii. Publicity placing in false light in public’s eyeiv. Appropriation for ’s advantage of Δ ’s name or likeness

c. Justice Weltner saw no reason to create a new right – right to publicity, he felt case could have been adjudicated based on unjust enrichment

5. This case is pretty one of a kind—most cts say commercial exploitation is necessary for devisability

viii. “Sound alike” Cases1. Midler v. Ford Motor Company (9th Cir. 1990)

a. Bette Midler declined to participate in Ford commercialb. Ford chooses to use a former backup single to imitate Midler’s

voice & style making it appear like Midler is actually in commercial

c. Media’s use of a person’s ID:i. Informative or cultural—immune from suit

ii. Exploitative—not immuned. Holding : a voice is distinctive & personal & only when a

distinctive professional voice is deliberately imitated to sell a product have the sellers misappropriated what is not theirs & committed a tort

i. A voice is not copyrightable, so not a copyright infringement

ii. Also defrauded the public


2. Waits v. Frito Lay a. Waits sued Frito Lay for using a sound alike recording to

advertise Doritosb. Used an impersonatorc. Holding : invaded a personal property right

i. Damages for peace, happiness & feelingsix. Can’t take an artist’s persona & use it to your benefit w/o permission

1. No clear line—ct has to decide whether person is famous enough or voice is distinctive enough

a. BUT you can always get an injunction to stop someone from using it, the issue is that the more famous you are, the greater damages you get

3. Trademarka. Can be:

i. Nameii. Logo

iii. Symbolb. Purpose:

i. Origin of the goods or services being soldii. Makes sure the public knows who the originator is

c. Can ID as:i. The Company that creates the work

1. Dreamworks, Columbia Recordsii. Service Mark

1. Band’s nameiii. Trade name

1. Business & good will associated w/ companyd. TM can’t be descriptive, but may be suggestive

i. Can’t TM “car,” but may be able to TM “gas mobile”e. Lanham Act

i. Prohibits false representation likely to cause public confusion about the origin or sponsorship of the goods/services/trade name

ii. 3 factors for COA:1. Must involve goods or service2. Must deal w/ interstate commerce3. False designation or description

iii. Remedies:1. Legal fees2. Punitive damages3. Injunctive relief

iv. Example of John Doe Warrant for merchants who sell stuff outside of a concert:


1. Lawyer goes to court the day before the show asking for John Doe Warrant saying they have probable cause to believe bootleg merchandise will be sold outside of show by ppl whose ID cannot be specifically named

f. People- can’t get TM in your name until ppl know who you are & name creates designation that mention of brings to mind a certain kind of service

g. Can TM:i. Title of movies, albums, books

ii. Title of song?—highly debatableh. First user of name wins on TM

i. Geographic strengthi. Limitations: Can’t TM geographic area

i. Supermarts- McDonald’s, Burger King, Etc.j. TM very important for bands to determine who owns rights to the band name w/in

the band4. Sound Recordings

a. Four multinat’l companies:i. Warner Music Group

ii. EMIiii. Sony/BMG Musiciv. Universal Music Group

b. Music-two types of copyrights:i. Sound recording

1. Capturing of the performance w/ some kind of technology that can capture the performance to be played back at another time

2. Author is the performera. Anyone can do a cover song if secure a § 115 license

ii. Underlying musical compositions1. Words and music

a. Sometimes the music itself2. Author is the songwriter, but usually transfer rights to the music

publishing company that hired thema. Music publishing deal is usually split 50-50b. About 70% of artists are also the songwriter

c. Terrestrial sound recording bills creates way for artists to get paid for performance on radio

i. Terrestrial radio does not have to pay recording artistsd. Compulsory license: gov’t sets price for use of song so that song being

performed/published/recorded can be used by anyonee. Statutory:

i. Telecommunications Act of 19331. Made pay only practice illegal


ii. Digital Performance in Sound Recordings Act (1995) – provided an exclusive right wrt interactive & subscription service which gave listener ability to select or to predict what would be broadcast

iii. Digital Millennium Composition Act (1995): Compulsory license for other digital broadcast services of a non-interactive, non-predictable nature

f. Contracts in the Recording Industryi. Only officers of record co. have authority to sign artists to what is usually an

exclusive recording agmtii. Artist revenues:

1. Recording2. Publishing3. Touring4. Merchandise sales

iii. Definitions:1. Masters- recordings from which replications can be made

iv. Material Terms in a Recording Agmt1. ASK:

a. What leverage does the artist have?b. What does the artist ask for during the negotiation?

2. Record Company Commitment a. Demo – only in “no-guaranteed option” agreementb. Single - used to promo – now required because of digital

downloadsc. Album – usually one album is guaranteed, up to six or seven

optioned - label must exercise options to get additional albums3. Term, Record Company Options and Recording Obligations

a. Number of Option Periodsi. Major Label: 6-8 album cycles

ii. Independent Label: 3-5 album cyclesb. Minimum Recording Obligation – One LP (vinyl record) for each

album cyclec. For a group—leaving member clausesd. Pay or play clauses

4. Territory a. North America, World, Universeb. Split Territory deals

5. Advances a. Advance plus Recording Cost Budget

i. Promotions are considered costs, i.e., deficit tour fundingb. All-in Recording Fund - must pay advance and recording budget

from this fundc. Recoupment – No royalties paid to artist until all costs and

advances are recouped by record label


i. Costs could be recording/video costs, tour support, promotion, indie radio promotion

ii. One of the biggest problems with record dealsiii. When artist signs deal, gets small advance & record label

pays for everything recoupable $ comes from artist’s royalties not the gross record sale

iv. Biggest charge against the artist was Payolav. $500K advance w/ 15% royalty, usually takes 250K

copies sold to break evend. First Album vs. Subsequent Albums

i. If artist does not sell/license a promising # of recordings, label has right not to exercise option to make further recordings & may therefore terminate K

e. 360 Deali. Now record label takes any $ earned by artist in other

areas (movies, merchandise, etc.) & puts against recoupment costs

6. Royalties a. Retail vs. Wholesaleb. All-In vs. Net (Minus Producer)

i. All in includes the artist’s royalty as well as the producer’s

c. Royalty Rate (All-In)i. Singles

ii. Albums: 10 – 14 points for new artistiii. CD’s – same as albumsiv. Cross-Collateralization - recoupment against other

streams of incomes – e.g., mechanical royalties if artist is a songwriter – and live performance in 360 deals

d. Normal Retail Channels in U.S. vs. Othere. Royalty Base - 100% vs. 90% or Other Basef. Packaging Deductions/Container Chargesg. “Free Goods” and Special Programs – 15%h. Reserves for Returns – 35% liquidated over 4-8 accounting

periodsi. Escalations

i. First Album vs. Subsequent Albumsii. Sales Thresholds – Bumps at Gold and Platinum

iii. Other Usesj. Digital issues – sales v. license – digital single download,

ringtonesk. New royalty model – 50/50 net split with artist – mainly indie

deals


l. THE 360 DEAL – additional streams of income are taken by the labels first – e.g., live performance, merchandise, endorsements

m. Third party digital exploitation (downloads, limited downloads, streaming)—second biggest problem

i. Eminem Case: Court ruled in favor of Eminem’s producers who said this is a license agmt, not a record sale

1. Catch all phrase saying that label and artist split all revenue from licenses 50-50

7. Controlled Compositions —third biggest problema. Mechanical Copyright Licenses and Royalties

i. If you are artist & songwriter, subject to control composition clause lowering your royalty b/c you are both the performer & writer

ii. Royalty is pd for the performance and for the writing of the song

b. Percent of Statutory Rate – 75% Deali. Will not give you the statutory 9.9 cents

c. Limit on Number of Compositions – 10-12 cap (even if you write all 20 songs for your album)

d. Some with no caps or reductione. DMCA – post-95 digital downloads – application of controlled

comp clause is prohibitedi. Only mandates full statutory rate for all digital sales, can

still reduce for non-digital sales8. Rights Granted to Record Company

a. Sound Recording - Work Made for Hireb. Merchandisingc. Management

i. Technically & commercially satisfactory: label wants final approval to determine whether recorded content is also commercially viable as a financial & artistic matter

d. Internet Sitee. New 360 deal – live performance, publishing, endorsements,

movies, etc.9. Relationship to Music Publishing

a. Co-Publishingb. Effect on Mechanical Royaltiesc. Controlled Composition Clause

10. Approvals – coupling, singles, videos, greatest hits11. Release Commitment – Release Guarantee


12. Exclusivity - Sideman Exclusion: allows an artist to do studio work on the side so artist can still perform with other bands or labels despite being exclusive to one label

13. Videos – 50% recoupable against audio, 100% against video14. Tour Support – Recoupable15. Accountings – Every six months16. Cross-Collateralization

a. Multiple Albumsb. Music Publishingc. 360 Deal – most income streams cross-collateralized

17. Representations, Warranties and Indemnities 18. Sampling 19. Re-Recording Restriction

a. Restricts artist from making another recording of a song that artist recorded for company, usually for at least 2 years following end of term or 5 years from release of original recording

20. Coupling – approval rights reserved by label.21. Name and Likeness Rights - Rights of Privacy and Publicity22. Group Clauses - Leaving Member23. Label and “P&D” Deals 24. Internet and Satellite Distribution Issues

a. Digital Performance Right in Sound Recordings Act of 1995b. Container Chargesc. Control of Website – Promotional Downloadsd. Control of Contente. Ownership rights over Domain Name Addressf. Sale v. license – digital download, ring tone – how is the

company treating all new income streams – e.g., Inno device royalty

i. Inno device turns a radio broadcast into a digital download

g. SoundExchange – other compulsory license systems25. 360 Deal :

a. Label gets a percentage of all income streams of artist, they seek new sources of income because of the decrease in sales of physical product – everything is cross collateralized – record royalties, mechanical royalties, live performance income (labels get perhaps 10% of live performance income), endorsements, merchandise, TV, etc.

v. Reversion Rights1. Under copyright law, 35 years after grant of right, artist can seek

reversion of work regardless of whether they’re recouped


a. 2013: First year records can be returned2. Record label says does not apply b/c work for hire, so artist does not

have right to termination—fourth biggest problem3. Will end up being a renegotiation tool4. If artist can take records back, it devalues the records meaning the

record labels may be overvaluedvi. Material Terms in a Music Publishing Agmt

1. Music Publishing - Music Publishing is the activity ofa. promoting and licensing the performance and publication of

musical compositions;b. administering the legal protection of the compositions and the

collection of income arising from such promotion and licensing; and

c. paying the songwriters their share of the collected income2. History

a. ASCAP/BMI/SESAC - Performing Rights Societiesb. The Harry Fox Agency - Mechanical Rights Societyc. New CRB Ruling – Sec. 115 – Late Fee, physical product, digital

downloads and limited downloads, streaming, ringtonesi. 24 cents for each ringtone subject to license

ii. 9.9 cents is statutory rate for all others3. Music Publishers

a. Major worldwide publishing companiesb. Independent music publishersc. The self-publishing songwriterd. Administration arrangements

4. Sources of Music Publishing Incomea. Sound recordingsb. Public Performancesc. Theatrical motion picturesd. Television programse. Videocassettes and video laser discsf. Advertisingg. Printed musich. Foreign sub-publishingi. Radio programsj. Music boxes and other consumer musical productsk. Non-theatrical motion picturesl. Non-theatrical videocassettes and laserdiscsm. Dramatic performancesn. Dramatic adaptationso. Computer software, multimedia, and new media productsp. Electronic distribution (cyberspace)


q. Ringtonesr. Webcastings. Advertising based servicet. XM and Sirius devices

5. Songwriter Agreements a. Type of Agreement

i. Single Song Agreementii. Exclusive Term Songwriter Agreement

iii. Writer's share vs. Publisher's Share - the ASCAPb. Basic Terms

i. Grant of Rightsii. Exclusive or non-exclusive

iii. Territory – worldiv. Term – 3 years – less than a record dealv. Reversion of Rights – Right of Termination

vi. Advances – recouped against royaltyvii. Cross-collateralization - When artist is the writer

c. Royaltiesi. Performance royalties – 50/50

ii. Mechanical, synchronization and other royalties - 50/50iii. Sheet Musiciv. Foreign royalties – 1/3 to ½ less than domesticv. Promotional copies

vi. Split royalties – more than one writer – must equal 100%vii. Publishing expenses - the "Net" deal

d. Accountingi. Statements – quarterly or semi-annually

ii. Reserves against returns – usually less than on record deal

iii. Objections – must object within a certain amount of timeiv. Audit rights

e. Other Provisionsi. Creative controls

ii. Restrictions on mechanical licensing1. Statutory rates2. The Controlled Composition Clause

iii. Restrictions on synchronization and print licensingf. Specific Issues with Exclusive/Long Term Arrangements

i. Exclusive Employmentii. Compositions covered

iii. Advancesiv. Term

6. Co-Publishing and Administration Agreements


a. Co-Publishingi. Writer retains a copyright interest

ii. Writer usually takes a portion of the publisher's shareiii. Sole administrationiv. Administration fee

b. Administration Agreementi. Writer retains copyright

ii. Administrator collects money and distributesiii. Administration fee

7. Music Licensing a. Formalities - Written, oral and implied licensesb. Types of Licenses

i. Printii. Mechanical

iii. Synchronizationiv. Videogramv. Multimedia

vi. Public performancevii. Compulsory license - Doing a "Cover" version of a song.

viii. NDMAsix. Compulsory License – Sec. 115 – CRB rulingsx. Rate courts – for ASCAP, BMI

xi. CRB – for mechanicalsc. Basic Considerations

i. Fee Structureii. Value of the Song

iii. Importance of the Song in Relation to Its Intended Use8. The Scope of the Intended Use

a. Common Termsb. Advancesc. Cross-collateralizationd. Bonus paymentse. Payment and accountingf. Auditg. Reserves against returnsh. Most Favored Nations

5. Filma. Conglomerates:

i. Universalii. Sony Pictures

iii. Warner Brothersiv. Paramount Picturesv. The Walt Disney Corp’n


b. Producing filmsi. Movie projects began w/ just a pitch

1. Factors that determine value of “pitch” or storyline:a. Past record of writerb. Marketability of ideac. Whether a major actor or director is interested in it

ii. Producer wants broadest possible rights, including right to distribute film in all forms presently known and to be invented

iii. Literary option/purchase agmt terms for underlying rights to a film:1. Length of initial option period & any extensions2. Price of option periods & any extensions, & whether those payments

are applicable against the purchase price3. “set up bonuses”4. Purchase price for rights, or if based on %, the budget, floors & ceilings5. Additional writing services to be rendered? What writing steps will be

commissioned & fees6. Rights granted, rights reserved, reversion of rights7. Rights of first negotiation & matching rights8. Credit

iv. CA’s 7 Year Rule created a limitation on the Studio system (actors signed w/ studio & had no authority to choose movies)

c. Production/Finance/Distribution Deal (PF&D deal)i. Pre-Production: producer wants assurances that it can take idea somewhere

else if studio chooses to abandon it1. Need to acquire rights to go on the property & film

ii. Principal photography: when the film is actually shotiii. Post-Production: reshoot scenes, create and enhance effects and beginning of

promotiond. Writers, Directors & Performers Agmts

i. Basic terms of a writer’s agmt:1. Writing services to be performed2. Writing and reading periods

a. Supposed to get certain amount of $ on 1st draft, producer then comments, writer makes next draft

3. Payments for each writing step & guarantees, if any, of certain steps4. Sole & shared screenplay credit bonuses, if any5. 1st opportunity to write on subsequent productions based on source

material6. Passive royalties7. Credit

a. Writers Guild requires that first writer gets credit if write part of script, then producer fires writer & gets another writer to finish

ii. Basic terms of a life story rights agmt: producer buys rights to your life story


1. Length of the initial option period & any extensions2. Price for the options periods & any extensions & whether these

payments are applicable against the purchase price3. Set up bonuses, if any4. Purchase price for the rights, & if based on % of budget, floors, ceilings5. Rights granted—more a Q of scope of the release granted6. Control over the screenplay & degree of fictionalization permissible

a. Want to also get client approval of actor playing them & maybe approval of final script

7. Use of copyrighted works created by subjectiii. Screenwriter of screenplay K issues:

1. Grant of rights2. Representations & warranties3. Indemnities4. Producer’s control5. Remedies6. Suspensions & terminations7. Insurance8. Immigration/naturalization9. Publicity

iv. Actors can be contractually required to say my movie is great—even if they think it is awful

v. Deals are generally 3-5 years b/w alliance, motion pictures & actors1. Residual payments

a. Putting on TV or DVDb. Production through ancillary markets not yet known

vi. Credit1. Above the line: what more prominent players in the creation process

get, i.e., actors, producers, directorsa. Usually also get a piece of net profits

2. Below the line: lessors that are generally pd a flat fee, i.e., technicians & extras

e. Insurancei. Completion bond: motion picture producer enters into this w/ insurance

company to ensure they will be paid off if something happens preventing completion of movie, i.e. force majeure

ii. Errors & omissions insurance: covers all of the clearances & authorizations that you are supposed to get, insurance company clears & pays off claims if you miss one

1. Does not cover permissions sought that were not granted2. Does not cover if you purposefully just did not clear3. Requirement that missed needed authorization in good faith

f. Franchising, i.e., sequels


i. Not always the same director, not always the same actorii. Actors want to guarantee they will always be used if the movie they are acting

in has the potential to be a franchise6. Television

a. Four major networks:i. ABC

ii. CBSiii. NBCiv. Fox

b. Broadcast TVi. Network affiliation agmts w/ local stations—network compensation, or

amount network has to pay affiliate depends on:1. # of commercial minute in the hour2. Ratio of commercial time sold nationally v. locally3. Relative strength of the station v. other stations in market4. Amount of time that the program occupies5. Size & demographic profile of audience6. Size of market

ii. Size of the market is most important elementc. Cable & Satellite TV

i. FCC restrictions on cable companies:1. Required to carry all the broadcast networks, which are shown in their

local markets2. Required to carry public TV stations3. Must carry a certain number of public access channels

a. Three groups w/in cable system:i. Providers w/ less than 12 channels must carry at least

3 local commercial & one public stationii. Providers w/ 12 to 36 channels all local + public

iii. Providers w/ more than 36 channels all local + public4. Regulates rates as well

ii. “Pay” cable contains higher-cost programming & is not advertiser supportedd. Creating & Acquiring programming

i. First step for a TV series is writing the overall “treatment” for the series, and “treatment” for the first episode –“pilot”

1. Treatment is a description of the characters, central theme of the series, & brief description of future episodes

ii. If pilot is successful, enter into deficit financing agmt in which producer gets almost all the $ needed to finance the show

e. Syndication: selling a program individual to the affiliates in local markets or to a cable network

i. Cash-plus-barter system: in exchange for the lower cash payment, syndicator also gets the right to sell some commercial spots in the program


ii. Negligible costsiii. After 5 years, generally turn main actor into an owner of the show

f. Ratingsi. Used to determine where to place commercial spots

ii. Advertisers buy spots during the shows based on the specific # it takes to reach one thousand viewers cost per thousand (CPT)

iii. Leading company in ratings is Nielsen Company monitors houses in 2 ways:1. PeopleMeter collects minute-by-minute viewing info2. Diary entries, where certain households agrees to make written entries3. Performs “sweeps” in Nov, Feb, March & July, which set the advertising

rates for the next few monthsg. FCC’s functions are rule-making, licensing & registration, adjudication & enforcement

i. Governs broadcast TV in 3 ways:1. Involved in network affiliate relations

a. Rules regarding network-affiliate relationship:i. Networks cannot force affiliates to take their

programmingii. Affiliate can take programs from any source with which it

can reach an agmtiii. Network may not control the affiliate’s advertising

2. Limits the # of stations that one entity can own3. Limits the broadcast hours of networks through the primetime access

rule (limits the network programming to 3 hours of the 4-hour primetime slot in the top 50 markets)

ii. Censorship7. Talent Ks

a. Trendsi. Innovation

ii. Consolidationiii. Internationalizationiv. Inflation

b. Basic types of ks:i. Personal service Ks that secure the talent

1. Deal Memo- preliminary K that is enforceable until a true K can be fleshed out addressing the material points:

a. Paymentb. Creditc. Line at end: “Until a more formal agmt is entered into by the

parties, if ever, this memo will be binding on the parties.”2. Issues of enforcing a personal services K (and things to include in a deal

memo or the K):a. Existence of a formal k b/w the partiesb. Whether such K is in writing


c. Whether the services are exclusive or nonexclusivei. Trend in film industry towards short-duration, non-

exclusive personal service Ks; most enter into Ks on a film-by-film basis

d. Term of agmte. Applicable statutory restrictions on termf. Provisions for options or extension of the termg. Consideration flowing to the artisth. Services to be performed by the artisti. Effect & nature of a breach of the K by the artist or companyj. Availability & type of injunctive reliefk. Controlling state laws & possible exclusivity of the forum

hearing any disputes concerning the K3. In TV deals, often include a “pay or play” clause for long-term Ks

ii. Ones that acquire the necessary underlying rights1. Clearing rights, i.e., trademarks, copyright

c. Ks w/ Minorsi. Both CA & NY have enacted minors’ entertainment K statutes

1. Ct is authorized under these statutes to either approve or disapprove a minor’s entertainment K, if approved, minor loses right to disaffirm

2. This system was created b/c producers fear putting $ & time into a show & having minor turn around & rescind K

3. Cts may appoint a guardian ad litem to assess whether K is fair & reasonable to minor

4. In CA, if K is approved (ratified) by ct, approval applies to all of the K’s option periods

ii. Minors right to disaffirm is inapplicable to a situation where a parent has executed a valid release

iii. Protection of $ earned by child performers under CA Family Code § 6752 = “Coogan Law”

1. 2003 amendments now require parents to establish trust accounts for their children (Coogan Trust Accounts) in which employers are required to set aside & deposit 15% of the child’s gross earnings into those trust accounts

iv. Oftentimes parents are asked to signed guarantees when a minor is just starting a project, if minor disaffirms, minor can get out of K but producer gets $ from parents

v. NY: Prinze v. Jonas: Court found that a K w/ minor, even before it could be approved by ct, could still be found to be “reasonable & provident” to minor & thus enforceable judicial approval not necessarily a condition precedent to an enforceable K w/ a minor


vi. Scott Eden Mgmt v. Andrew Kavovit (NY)1. Scott Eden became exclusive mngr for Andrew in 1984 when he was 12

receiving 15% commission of his gross compensation2. Andrew signs an agency K in 1986 for an additional 10% commission3. Secured a role on a long-running TV soap opera4. Week before K set to expire in 1990, Andrew’s att’y notifies Scott Eden

that Andrew disaffirms the K—no further commissions sent5. Issue: Can Andrew disaffirm the K and get back the commissions he

paid?6. Holding : Andrew must continue to pay all commissions to which Scott

& agency would be entitled to under K & have right to annually inspect Andrew’s books (to ensure they are being paid the proper commissions)

a. Disaffirmance does not entitle minor to be put in a position superior to the one he occupied before the agmt

b. If a minor cannot return the benefits obtained, he is effectively precluded from disaffirming the K to get back his consideration

d. CA’s 7-Year Rule (§ 2855 of the Labor Code)i. Statute limits a personal service agmt to 7 years, meaning a person can enter

an agmt for longer, but it can only be enforce against them for 7 yearsii. Does not apply to record deals

1. If recording artist terminates K after 7 years, label has right to recover for each record not yet delivered that was included in the deal

iii. Artist must make a clean break from K for 7 year period to start again1. Sometimes just a new K w/ a new signing bonus will work

iv. De Haviland v. Warner Brothers Pictures (CA)1. K for seven year, but K gave producer right to suspend actress for

periods of time, in which she would receive no compensation until she resumed work

2. Producer says he has right to extend K for a “full 7 years” for a time equal to the period of suspensions

3. Issue: did the legislature mean 7 calendar years or seven “actual” years?

4. Holding : If the legislature had meant seven “actual” years, they would have included actual in the statute, but there decision not to indicates that they meant seven years of a fixed time

a. Employee cannot waive the 7 year requirement b/c that would defeat purpose of statute

5. Note Cases:a. Foxx v. Williams : Employer tried to say that artist was an

independent contractor so 7 year rule did not apply, but Court said no


e. Crediti. First position: actor’s name to the left above the title

ii. Second actor’s name appears to the right but just above first nameiii. Third actor’s name appears on the far right & slightly below the name of the

first actoriv. Questions re: credit:

1. Whether K requiring that credit be given exists2. What remedies are available if the credit provisions of individually

negotiated Ks are breached3. Whether there is a right to judicial review of credit determinations

made by arbitrators pursuant to collective bargaining agmtsv. Two theories:

1. Economic righta. Akin to copyrightb. Lanham Act: used when someone who deserves credit is not

given credit b/c do not want to confuse public as to the origin of the service

2. Moral right (recognized in Europe)a. Right of integrity: to not be distortedb. Right of disclosure: when & in what form your work will be

presented to the publicc. Right of attribution recognized in US in the Visual Artists Rights

Acti. Ensured by K

ii. Credit in ads1. Placement of names

iii. Credit in actual workiv. Most favored nations clause: clause in K that says if

someone is offered a type of credit, you also must get that type of credit

vi. Third way of getting credit is through unions or guilds1. They have rules as to what kind of credit is given to each type of player

vii. Cleary v. News Corp. 1. Cleary signed a ltr saying he would be credited in new edition of book

plus the one he was working on as well as ¾ of 1% royalties on sales2. Credited in 1970 and 1980 editions, but not 19903. Still received royalties on 19904. Issue: Should he be credited in 1990 edition?5. Holding: parole evidence excluded oral evidence of credit & K did not

mention any title credit for any of the editions, if he wanted credit, he should have made sure it was included in the K


a. under a valid work for hire arrangement, a publisher is under no obligation to provide attribution, unless such a right has been specifically reserve in K

viii. Gold Leaf Group Ltd. V. Stigwood Group Ltd. (NY)1. Frampton & BeeGees signed to appear in film version of Sgt. Pepper’s2. At time of signing, Frampton was the biggest artist & promised 1st

billing3. In b/w signing & filming, BeeGees go up in popularity & Frampton goes

down4. Frampton seeking injunction to prevent Stigwood from violating K &

giving BeeGees top billing5. Issue: Does Frampton have the right to have his name appear above the

BeeGees on billing of the film, the advertising of the film, artwork on cover of record, advertising for record, & merchandising & subsidiary rights?

6. Holding : K explicit that F get sole star billing on movie, in the same way as other artists for other rights & the K is silent as to merchandising & subsidiary rights—injunction granted for movie, but not for sound recording

ix. Dastar Corp’n v. 20 th Century Fox Film Corp’n (SCOTUS 2003)1. Fox had exclusive rights to TV series called, Crusade in Europe, but did

not renew copyright2. Dastar released a video set entitled World War II Campaigns in Europe

and edited and used some of the footage from Crusade in Europe3. Fox sued b/c Dastar did not credit them w/ original work

a. Reverse passing off: remove the original name/likeness and misrepresent as your own

4. Issue: Did Dastar violate the Lanham Act?5. Holding : “origin of goods” refers to the producer of the tangible foods

that are offered for sale, and not to the author of any idea, concept, or communication embodied in those goods. To state otherwise would be asking to find that § 43(a) created a species of perpetual patent & copyright, which Congress may not do

a. Ultimate test for both Lanham Act and state law unfair competition, is “whether the public is likely to be deceived or confused”

i. This was why District Ct found for Foxx. Right to disclaim credit

1. King v. Innovation Books a. King sold motion picture & TV rights for his short story, “The

Lawnmower Man,” allowing them to do with it what they “think fit”

b. When they made the movie, they called it his movie


c. King informed them that he did not like the possessory creditd. Later, he again informed them & requested a copy of the moviee. Four days before the release of the movie, he viewed it, still

voiced his objection to the credit, but said he would not go for an injunction for the time being

f. He sued for an injunction + damages prohibiting the use of a possessory credit and a “based upon” credit

i. Possessory credit is usually given to someone who plays a major role in the production, such as producers, directors, or writers

ii. Based upon credit is given to the creator of a derivative work

g. Issue: Was the court correct in granting an injunction for both the possessory credit & the based upon credit?

h. Holding : Possessory credit violated Lanham Act, but the based upon credit did not

i. King repeatedly objected and the delay, about 8 months, from the time of finding out about the credit does not rebut the presumption of irreparable harm b/c his name & reputation are his assets regardless

8. K Performance & Exploitation Obligationsa. Delivery Standards

i. Record industry: technically & commercially satisfactory for the manufacture & sale of phonograph records

1. Recordings must comply w/ audio stds established [objective]2. Company must believe that public will buy records manufactured from

the masters [subjective]3. Timely delivery: Delivery pertains to delivery of all Ks to give label

authority/rights to album along with actual delivery of the recorda. Deliver each master in digital formb. Detailed list or any and all samplesc. Written clearances or licensesd. Any & all info pertaining to credite. Record industry can’t “legally” release the record until it gets all

of these!4. Artists try to negotiate in “release guaranty,” meaning that if label

accepts record, it must release it5. Payments at signing, maybe midway, final at delivery

ii. Book industry: satisfactory in form & content to publisher1. Payments: writing, after editing, final copy, and final back end % (net

profits)iii. Film & TV industry: approval over all key personnel, budget & script

1. Film delivery—


a. Physical delivery is delivery of the technical elementsb. Legal delivery refers to delivery of all documents (clearances,

insurance, ratings, licenses, etc.)i. Differ from record industry in that movies won’t get

funded until all insurances/assurances are providedc. Running time: usually b/w 95 and 115 minutesd. Must give alternate scenes & dialogues so as to make suitable for

TV2. Payment stages:

a. Writing—payment at first draft, after doing substantial edits, and largest payment at final script screenplay delivery

b. Green Light status: movie is written, screenplay accepted, can now start casting & determining the film’s location

c. Filming beginsi. Actors usually get paid on a weekly basis

3. Actors have postproduction obligations to promote the movies they star in

iv. General Rule : degree of subjectivity w/ which delivery standards are infused increases in more or less direct proportion to the relative level of investment

b. Fiduciary dutyi. Fiduciary is a person holding the character of a trustee or a character

analogous to that of a trustee, in respect to the trust and confidence involved in it and the scrupulous good faith and candor which it requires, a person has the duty, created by his undertaking, to act primarily for another’s benefit in matters connected with such undertaking

ii. Record company not normally a fiduciary, usually a debtor-creditor relationship

1. Some states bridge gap by implying good faith & fair dealingiii. Rodgers v. Roulette Records (NY)

1. Rodgers sued for failing to account and pay royalties2. Signed K in 1957, claims did not receive any acct’g stmts until 19813. 6 year SOL4. Now claiming that record company underreported sales5. Issue: when discovered or reasonably should have discovered the

fraud?6. Holding : inconceivable that & his agents did not notice his songs were

being released & that royalties were understated giving the sheer number of songs he recorded & his apparent popularity—no acct’g b/c no fiduciary relationship

a. To establish a right to an accounting:i. Existence of a fiduciary relationship; or

ii. Existence of a joint venture; oriii. Other special circumstances warranting equitable relief


b. Even best efforts clause will not create fiduciary relationshipi. EXCEPTION: if book author give works to publisher &

publisher knows another book company is infringing that work, courts will apply a fiduciary duty for failure to protect the copyright

iv. Obligation to exploit1. Zilg v. Prentice-Hall, Inc.

a. Author about the historical family, the DuPontsb. PH accepts the manuscript, decides on $12.95/copy with initial

print of 15,000 and $15K to advertisec. Member of DuPont family received an advanced copy, outraged

by its harshness of the familyd. Fortune Book Club decides that it is no longer a suitable

selection to offere. PH tries to correct and tone down the book, but cuts initial print

to 10,000 books and $5.5K to advertisef. Issue: Was PH required to use its “best efforts” to promote the

book?g. Holding : Nowhere in the K does it say “best efforts,” but there is

implied a good faith effort to promote the book—so long as the initial promotional efforts are adequate, a publisher’s printing & advertising decisions do not breach a K unless the proves that the motivation underlying those decisions was not a good faith business judgment (reasonable efforts std)

2. Parker v. 20 th Century Fox Films (CA)a. was cast as lead actress of a musical, but studio decided not to

produce picture & offered her a role in a westernb. She turns down the offer & now seeks to recover her salary that

was agreed upon for the original rolec. Issue: Is an actress in a musical comparable, or substantially

similar, to an actress in a western so as to make the studio justified in not compensating her after turning down the alternative employment?

d. Holding : Lead in western was both different and inferiori. Rule: Measure of recovery by a wrongfully discharged

employee is the amount of salary agreed upon for the period of service, less the amount which the employer affirmatively proves the employee has earned or with reasonable effort might have earned from other employment

e. Dissent: the vehicles for the display of the star’s talents are differ but it does not prove that her employment as a star in such


vehicles is of necessity different in kind & either inferior or superior

v. “final cut”- the right to determine what will ultimately be shown to the public1. Absent qualifying language in the personal services agmt, a director w/

final cut has ultimate decision-making authority over creative & artistic decisions about the final version of the picture

vi. Gilliam v. ABC 1. BBC license Monty Python series to ABC & allows them to cut to allow

for insertion of commercials, & applicable censorship2. BBC’s agmt w/ Monty Python however did not grant BBC cutting rights3. Holding : edited version broadcast by ABC impaired the integrity of the

group’s work & represented to the public as the product of appellants what was actually a mere caricature of their talents

4. Moral rights (not recognized in US):a. Paternity: right to be acknowledged as the creator of the workb. Integrity: right to have the work represented as the author

created it9. Remedies for Termination of K

a. Exit strategy—how do you get out of a lousy deal?i. Rescission of K (Nolan)

ii. Injunctionsiii. Claiming adhesion K or unconscionability (Buchwald)

b. Rescissioni. Nolan v. Williamson Music (NY)

1. sues over royalties owed for song “Tumbling Tumbleweeds”2. had sold song to Fox in return for 50% of royalties received, Fox then

assigned that right to Williamson where Fox would receive 2/3 of everything received by Williamson

3. Fox in turn was really only paying 1/3 instead of ½ the royalties he K-d for

a. Known as the at source problem4. Deal was for 50% overall, not 50% of 2/35. Claims:

a. Nonpayment of foreign royaltiesb. Nonpayment of domestic performing income (radio)c. Nonpayment of ancillary incomed. Assignment of copyright to Williamson e. At-source claim: Payment of royalties

6. Issue: was breach of paying essentially only 74% of the royalties due to substantial enough to warrant rescission of the K?

7. Holding : No, rescission can be permitted only when the complaining party has suffered breaches of so material & substantial a nature that


they affect the very essence of the K & serve to defeat the object of the parties.

a. The assignment was not a breach b/c the K allowed Fox to license rights to a secondary publishers

8. Appellate Case: Nolan v. Sam Fox— In the absence of outright fraud, rescission will be granted only in cases where a publisher has made no royalty payments

ii. Peterson v. Highland Music, Inc. (CA)1. Band, Kingsmen, rescinds K that called for them to receive 9% royalties

of any profits of licensing fees generated from their song, “Louie, Louie”2. No payment for 30 years, but only bring claim now3. District Ct granted the rescission, but disagrees b/c there is a 4 year Δ

SOL for rescission4. Issue: Can rescission be granted or has the SOL expired?5. Holding : every instance of nonpayment renews the SOL b/c there is no

fixed amount to be paid out but rather a continuing obligation to pay a portion of the profits & royalties. However, only granting royalties for last 4 years, but K is rescinded based on nonpayment & right to “Louie Louie” reverts back to the Kingsmen

c. Injunctioni. Negative injunction is to prevent a party from working elsewhere

1. Court will not issue a negative injunction if it feels it will be unduly burdensome or harsh, court will consider:

a. Length of time injunction is to runi. General rule: only allowed for time period left in original

Kii. Very rare for injunction to be granted if K period is over

b. Extent of geographical area in which the is to be prohibited Δfrom seeking alternative work

i. More inclined to grant injunctions for ltd areasc. The types of work prohibited by the requested injunction

i. Must be the same or very comparabled. Likelihood that injunction will produce positive results

2. Performer must be performing exclusive services of such a unique nature that it would make it difficult to obtain those services from another

a. Showing great difficulty & inconvenience is usually enoughii. Machen v. Johansson (NY)

1. M wants injunction to prevent J from engaging in a boxing match w/ Floyd Patterson before J engages in a rematch w/ M

2. J had beat M, supposed to do a rematch before Feb. 14th

3. It’s not the 14th yet, but J has now agreed to fight Patterson before M4. Issue: can M get injunctive relief?


5. Holding : just b/c a K is valid, does not mean you can get an injunction as the right to this relief must be clear, reasonable & well defined

a. K does not define time and geographic area specifically enough to warrant an injunction as M basically requested an indefinite injunction to prevent J from boxing anywhere in the world

i. Unreasonable restraint on J’s livelihood if injunction granted

iii. ABC v. Wolf (NY)1. Wolf had an employment w/ ABC as a sportscaster from 1979-80 to

terminate on March 52. K gave a renewal option & held Wolf to good faith negotiation w/ ABC

for renewal & granted ABC right of first refusal3. 90 days prior to expiration, agmt called for W to enter into good faith

negotiations, this was to be exclusive for first 45 days, after that can negotiate w/ others but must for 3 months following expiration (June 5) give ABC an opportunity to employ W for similar terms

4. Began to discuss in September, but could not come to agmt, when contacted again in Jan., ABC said they would meet all demands but Wolf wanted to wait to see what his options were (he had already started communicating w/ CBS in Oct in violate of good faith negotiation clause)

5. In Feb, W enters into a production agmt w/ CBS w/ agmt to hold option open until June 4 for sportscaster

6. W gives ABC 45 days notice of intent not to renew7. ABC commenced action in May seeking injunction against W’s

employment w/ CBS8. Issue: Did W breach agmt and can ABC get an injunction?9. Holding: W breached K—specifically good faith negotiation and first

refusal provisions, but K period is over, so specific performance is not appropriate

a. Where an employee refuses to render services to an employer in violation of an existing K & the services are unique, an injuction may be issued to prevent the employees from furnishing those services to another person for the duration of the K

b. An injunction is warranted b/c the employee either expressly or by clear implication agrees not to work elsewhere & irreparable harm will befall the employer should the employee be permitted to labor for a competitor

c. Court will normally not decree specific enforcement of an employee’s anticompetitive covenant unless necessary to protect the trade secrets, customer lists or good will of the employer’s business, or perhaps when the employer is exposed


to special harm b/c of the unique nature of the employee’s services

d. An otherwise valid covenant will not be enforced if it is unreasonable in time, space, or scope or would operate in a harsh or oppressive manner

d. Auditingi. Can’t see manufacturing records, only sale records

ii. Art Buchwald v. Paramount Pictures (CA)1. Definition of net profit literally meant ZERO profits for Buchwald2. They never used his script, except Eddie Murphy does a film using the

same storyline as Buchwald’s screenplay so Buchwald demands profits for the use of his work

3. K is split into 4 differ sections:a. Loan out and advances and rights (6 pages)

i. This was negotiatedb. Turnaround provision

i. What happens if Paramount never went into productionii. Meaning Buchwald could now and go shop the movie to

someone elsec. Terms and conditions – boilerplate

i. This was not negotiated, take it or leave itd. Standard net profit formula (23 pages!! w/ 2 appendices)

i. This was not negotiatedii. Saying the calculation was illusory and there is no way it

could have ever4. Issue: was this a K of adhesion or was the K unconscionable?5. Holding: there were unconscionable terms (see list on page 812)

a. Adhesion K: standardized K which imposed & drafted by the party of superior bargaining strength relegates to the subscribing party only the opportunity to adhere to the K or reject it

b. Unconscionabilityi. Absence of surprise does not render the doctrine of

unconscionability inapplicable1. Surprise involves the extent to which the

supposedly agreed-upon terms of the bargain are hidden in a prolix printed form drafted by the party seeking to enforce the disputed terms

ii. Oppression arises from an inequality of bargaining power which results in no real negotiation & an absence of meaningful choice

1. Procedural element2. Substantive element: overly harsh or one-sided


iii. Price may be unconscionable, but courts look to the basis & justification for the price

e.

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Law/Entertainm… · Web viewIrvine- 5 yrs (Owner of Frontline Mgmt- the most important mgmt co in world; ... selling a program individual to the affiliates in local markets or