Posts Tagged ‘Right of Publicity’

Game Over in College Sports Rights Dispute

Friday, July 4th, 2014

Ad for NCAA Football 2014

Ad for Electronic Arts’ NCAA Football 2014


Are makers of video games required to take licenses from celebrities depicted in their games, or does the First Amendment shield them from the need to obtain permission and pay royalties?

The NCAA student-athlete legal free-for-all has generated two remarkably aligned federal appeals opinions that have brought a rare measure of uniformity to the generally disjointed case law on balancing rights of publicity protections for individuals against First amendment protections for creative expression.

The NCAA case has been very much in the headlines recently, but began five years ago as an antitrust case in which former college athletes sought to get a piece of the $20 billion a year in licensing revenue (from both television and official merchandise) received by the NCAA and its licensing agent, Collegiate Licensing Company. At that time, we noted it might be years before the case was resolved through final appeal. In fact, the first case has just finished trial.

Since 2009, the case has morphed into a class action involving potentially thousands of athletes. The issue made further headlines recently when sports superlawyer Jeffrey Kessler filed a new suit on behalf of a class of current college athletes, not to get a slice of the licensing revenues, but to blow up the entire NCAA “amateur student-athlete” system on antitrust grounds, and allow athletes to bargain for compensation while they are still students.

What escaped attention on most sports pages, however, were opinions late last year by the Third Circuit Court of Appeals in Philadelphia in the case of former Rutgers University quarterback Ryan Hart (Hart v. Electronic Arts, Inc.) and in the Ninth Circuit Court of Appeals in San Francisco in the case of former Nebraska University and Arizona State University quarterback Sam Keller (Keller v. Electronic Arts, Inc.), both against video game publisher Electronic Arts—not on antitrust grounds, but for using their personal and athletic performance information without a license, and thereby allegedly misappropriating their rights of publicity.

The former athletes both won their appeals, resulting in a proposed $60 million settlement with them and other former athletes —$40 million from EA and CLC, $20 million added by NCAA on the eve of the antitrust trial— and EA’s decision to shut down its franchise NCAA Football videogame series for at least 2015.

Both courts agreed with each other on multiple points regarding how to properly balance an individual’s rights of publicity versus an author’s First Amendment free-speech rights, a field in which up until now there has rarely been agreement or clarity.

The one Supreme Court case on this issue, Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562 (1977), held that a news broadcast of Hugo Zacchini’s entire “human cannonball” act without his consent when he appeared at a county fair was a misappropriation of his rights of publicity under Ohio law. The Court held that there must be a balance between the rights of individuals to control the economic exploitation of their names and images, protected by rights of publicity laws (currently recognized in about 40 states, depending on who is doing the counting), and the right of free expression, protected by the First Amendment to the federal Constitution. However, while ruling in favor of Zacchini that the television station had exceeded the bounds of First Amendment protection for the news media and was liable for misappropriation, the Court did not offer guidelines on how to strike that balance on a general basis. Lower courts have been formulating their own tests ever since.

Three of the leading tests are:

1) The Predominant Use Test holds that if the predominant purpose of a work is to exploit the commercial value of an individual’s identity, instead of to make an expressive comment about that individual, then the right of publicity claim will prevail over the First Amendment defense.

2) The Rogers Test was originally formulated in a case brought by movie actress Ginger Rogers, who sued the producers and distributors of Ginger and Fred, an Italian movie about nightclub dancers who were nicknamed after Ginger Rogers and Fred Astaire, on the grounds that the title of the movie infringed both her trademark and her rights of publicity. The Second Circuit Court of Appeals disagreed, holding that the First Amendment trumped Ms. Rogers’ rights of publicity because: (a) the use of her name in the title bore some relationship to the contents of the movie; and (b) the use of her name in the title was not a disguised advertisement for the sale of goods or services.

3) The Transformative Use Test was first formulated by the California Supreme Court in Comedy III Productions, Inc. v. Gary Saderup, Inc., 21 P.3d 797 (2001), in which the rights owner of the Three Stooges movie comedy team sued an artist for selling t-shirts and lithographs with photorealistic sketches of the Stooges. The court held that the artist had not added enough of his own original content to the portraits to be “transformative,” that is, to make it’s the artist’s own expression rather than a mere celebrity likeness, therefore the Stooges’ rights of publicity defeated the artist’s First Amendment defense.

The Third Circuit case was brought as a class action by Hart under the New Jersey statutory rights of publicity provision, while the Ninth Circuit case was brought by Keller and eight other former NCAA Division I football and basketball players under both California’s statutory and common law rights of publicity. The main defendant was video game publisher Electronic Arts, which was the producer of the NCAA Football video game series. Although EA had licensed the rights to use the NCAA and individual university trademarks for its video games, it had not licensed the rights of publicity from the college athletes. (According to a footnote in the Ninth Circuit case, Keller claimed that EA had specifically agreed in its NCAA license not to use athlete likenesses.)

Both courts substantially agreed on the facts of the case—that EA’s NCAA Football series seeks to replicate each university’s entire team roster as accurately as possible. Every player on a team has a corresponding avatar with the same jersey number, class year, height, weight, build, skin tone, hair color, home state, equipment modifications, and playing style. Player names are not written on the jerseys of the avatars, but can be added via third-party applications.

Promotional screen shot EA's NCAA Football 2014

Promotional screen shot from EA’s NCAA Football 2014

In both cases, EA defended against claims of misappropriation of the players’ rights of publicity on the grounds that the video games were forms of expression protected by the First Amendment, under any of several legal theories, trumped the athletes’ rights of publicity, and therefore negated any need for a license from the athletes.

As a threshold issue, both courts agreed with EA that the video games are fully protected as expressive speech under the First Amendment.

The Third Circuit quickly rejected the Predominant Use Test advocated by EA on the grounds that it forced judges to become art critics who “analyze select elements of a work to determine how much they contribute to the entire work’s expressiveness.”

Both courts rejected employing the Rogers Test also advocated by EA because: 1) in prior case law, it had mainly been used in trademark infringement cases, but rarely been used in rights of publicity cases, and even then had primarily been applied when a celebrity’s name was used in a title of an expressive work, not in the body of the work itself; 2) application of the Rogers Test would almost always result in shielding the video game developer, because a video game in which a celebrity appears will almost always satisfy the Rogers Test criteria of being related in some degree to the celebrity; and 3) the test was derived from trademark law, where the primary concern is protecting the public from confusion about the source and quality of goods, not an appropriate focus for rights of publicity cases, where the focus should be on protecting a valuable intellectual property right of an individual— the commercial exploitation of his identity.

Both courts ultimately concluded that the Transformative Use Test was the appropriate balancing test. The Third Circuit felt it was more appropriate to rights of publicity cases because it was derived from the fair use defense in copyright law, which focuses on protection of individual intellectual property rights. In the context of the EA video games, both courts relied heavily on the case No Doubt vs. Activision Publishing, Inc., 192 Cal.App.4th 1018 (2011), in which the California Court of Appeals held that use of significant elements of identities of members of the pop music group No Doubt in the Band Hero video game was not a transformative use. Even though the game incorporated many creative elements in the performance environment for the members, such as performing in outer space or performing songs of rival bands, there was not a sufficient transformation of the avatars of the members, ruled the court. Likewise, concluded both the Third and Ninth Circuit panels, in the NCAA video games, EA’s use of player avatars with detailed literal biographical and appearance information was not transformed by the game’s ability to create different game environments. The athletes’ avatars were placed in the same context— playing football— as what they had become famous for, even though the game made it possible to change certain variables of that context. Further, the fact that the game allowed some degree of customization of the avatar did not change the equation—to rule otherwise would provide an easy out for game makers to capitalize on use of celebrity images, as long as they also built in an option to tweak the images.

In both cases, judges wrote dissenting opinions which argued that use of the Transformative Use Test as interpreted in No Doubt was not protective enough of First Amendment rights, and might result in imposing liability on authors of books, movies, and other creative works that incorporate historical figures, even if situated in a totally fictional environment.

Additionally, the Ninth Circuit addressed two non-First Amendment, California-specific defenses to rights of publicity claims. California law creates a defense against common law rights of publicity claims for the “publication of manners in the public interest,” and a defense against statutory rights of publicity claims “in connection with any news, public affairs, or sports broadcast or account, or any political account.” The court held that it was not necessary to weigh whether the video games were “in the public interest,” or were connected to news or sports broadcasts, because they failed the threshold requirement for both doctrines that they be in the nature of publishing or reporting. Instead, they were using the athletes’ personal information in the context of simulated games that had never occurred in the real world, so they were not “publications” or “reports.”

The court then addressed one of the toughest issues in a footnote at end of its opinion. It attempted to distinguish several cases from outside California in which courts ruled that the First Amendment trumped rights of publicity claims for fantasy sports leagues that publish player names and publicly available performance statistics, so that the leagues were not required to obtain licenses from the athletes. The NCAA case is different argued the Ninth Circuit, because EA’s creation of non-publicly available virtual avatars using player identifying information did derive from the athletes’ “identities,” and were not merely public domain statistical information. While this distinction may “feel” right, the “mere statistics” versus “statistics plus specially created avatars” distinction is a very thin dividing line, and will likely be litigated in the future.

Takeaway: once limited to California cases, the Transformative Use Test is gathering endorsements from an increasing number of appellate courts, when it is necessary to balance the rights of individuals to protect their rights of publicity from exploitation by others versus the First Amendment right protections of creative expression, and especially in the context of use of celebrity avatars in video games. But rights of publicity are grounded in diverse state laws, so that even when the applicable balancing test is settled, it is notoriously difficult to predict in advance whether a court will find a particular rendering sufficiently transformative, so caution remains in order for use of celebrity likenesses without a license.

There Are 8 Million Lawsuits in the Naked Cowboy

Wednesday, February 23rd, 2011

This blog post is not authored by, endorsed by, or affiliated with the Naked Cowboy(R), and other stuff our lawyer made us say.

Photo Courtesy Ryan McGinnis

A New York New Year’s tradition is the dropping of the ball in Times Square.

Another is fast becoming the serving of the New Year’s lawsuit by Times Square’s scantily clad troubadour, the Naked Cowboy.

Robert John Burck, aka the Naked Cowboy, recently sued CBS and the producers of the soap opera “The Bold and The Beautiful” for an episode showcasing a character in “Naked Cowboy signature garb” of cowboy hat, cowboy boots, tighty whitey briefs, and strategically placed guitar. The suit seeks $15 million damages for a casebook worth of intellectual property-related legal injuries, including trademark infringement, trademark dilution, false advertising, misappropriation of right of publicity, and unfair business practices.

But guys, you missed the most obvious claim of all– infringement of trade dress.

The complaint claims that the suit was filed only after the defendants ignored multiple requests to take a $150,000 license, in order that the “integrity and propriety of the brand be kept in tact [sic].”

Would that have been a naked license?

In 2008, Burck sued candy maker Mars, Inc. on the grounds that Times Square billboards and a mural featuring a guitar-strumming, underwear-clad blue M&M infringed his Naked Cowboy trademark and rights of publicity. The judge dismissed the right of publicity claim on the grounds that Burck could not claim it for a fictional character; the parties later reached a confidential settlement regarding the trademark infringement claims.

In 2009, Los Angeles videogame maker Gameloft filed a preemptive lawsuit against Burck seeking a ruling that the appearance of a scantily clad, guitar strumming character in its videogame, New York Nights, was not an infringement of the Naked Cowboy trademark.

Also in 2009, Burck sued Clear Channel Communications, claiming that its Tampa radio station created and promoted a Naked Cowboy imposter.

In 2010, Burck sued Sandra Brodsky, a bikini-clad, guitar strumming ex-stripper who strolled Times Square as the Naked Cowgirl, after she refused to sign a Naked Cowboy franchise agreement (going price: $5,000 per year or $500 per month) and ignored a cease-and-desist letter to halt all Times Square performances. Burck’s complaint alleged that the Naked Cowgirl would cause confusion among potential consumers of Naked Cowboy services, and tarnish his wholesome image, by her frequent use of obscene language and gestures towards uncooperative tourists.

Oh Man: Dora the Explorer Discovers She’s Been Swiped

Tuesday, November 2nd, 2010

David vs. Goliath, Dora the Explorer vs. Swiper the Fox, Caitlin Sanchez vs. Nickelodeon.

Since our passion is the drafting and negotiation of intellectual property-related contracts, when 14-year-old Caitlin Sanchez, the voice of the popular Dora the Explorer cartoon character, filed a lawsuit against the Nickelodeon cable network claiming that Nickelodeon and its affiliates have duped her out of millions of dollars in royalties and residuals by pressuring her to sign a “bizarre, impenetrable, unconscionable contract,” it tweaked our curiosity.

But was it really a bad contract, or rather bad negotiation that resulted in Caitlin getting a lot less money than she and her family expected?

To answer that question, we tracked down a copy of the agreement (“Agreement”) between Caitlin and Uptown Productions, Inc. (“Uptown”), the production company for the Dora program, and compared it to the allegations in the lawsuit complaint, filed by the law firm of Balestriere Fariello. (Agreement is here, complaint is here.)

And the comparison showed that the contract IS bad, but not confusingly bad, just transparently bad— extremely but obviously one-sided in Uptown’s favor. Despite that, Caitlin and her family signed the Agreement and several subsequent documents literally within minutes of receiving them, without negotiating or asking an attorney to assist them. That was akin to Dora the Explorer not chanting, “Swiper, no swiping!” when the larcenous fox was in plain sight.

In doing so, they made the same mistake that many artists, actors, musicians, designers, and other creative people make when they are approached by television, music, or theatrical producers—they silence their questions and sign, for fear of being ditched and missing their big break.

The framework for the Agreement between Uptown and Caitlin is that Uptown would pay for Caitlin’s exclusive services for seven episodes of the Fifth Cycle of the Dora series and would retain options for 10 episodes for each of the Sixth through Tenth Cycles of the show. Caitlin was to receive: a salary of $5,115 per episode (increasing 5% per cycle); plus residuals based on the number of re-broadcasts of the original episodes; plus merchandise license fees. She was also required to do a “reasonable” amount of promotional appearances and interviews.

(1) The complaint alleges: Nickelodeon “fail[ed] to fully compensate Caitlin for products she voiced, for which she is due a percentage of the products [sic].” Uptown has only paid Caitlin $9,636.39 in merchandising royalties to date, according to the complaint. Caitlin’s attorney claims that that is an absurdly low and definitely incorrect figure in light of the fact that Nickelodeon claims gross retail sales of $11 billion in Dora merchandise since 2002.

The contract states: Uptown “shall pay you 5% of 100% of the ‘net receipts’ actually received by [Uptown] from merchandising, should your name, voice or likeness be used alone in connection therewith, reducible to 2-1/2% of 100% if other artists are used…; ‘Net receipts’ shall mean the amount remaining after deduction of a distribution fee of 50% of the gross receipts actually received from agents and distributors; and all costs related to such merchandising use.”

Our take: Caitlin would get royalties based on only the subset of Dora merchandise that featured Caitlin’s voice or her actual (not Dora’s) image, and that the revenue stream on which the royalties would be calculated could be easily manipulated by Uptown’s “creative accounting.”


How do you say, “Swiper, no swiping!” in Swedish?

(more…)

Witches, and Bozos, and IP, Oh My

Wednesday, October 13th, 2010

Trick or Tea!

Is she a witch?

And was her father a Bozo?

In observance of the upcoming Halloween and Election Day holidays, and in the spirit of fun, we take a look at the intellectual property issues raised by the candidacy of Christine O’Donnell, the Republican and Tea Party candidate for U.S. Senate from Delaware.

Almost as soon as Ms. O’Donnell upset the party favored candidate in the Republican primary on September 14, video surfaced of her on the “Politically Incorrect” television show confessing that as a young woman, she had “dabbled into witchcraft,” and had had a date on a satanic altar. Her confession made her the punch line of a thousand late night one-liners– and the subject of her very own witch action figure. Internet toy seller herobuilders.com has capitalized on the publicity by offering a 12 inch Christine O’Donnell witch action figure for $39.95, featuring a smiling likeness of Ms. O’Donnell dressed in sorceress basic black flowing cape and pointy hat (sorry, no broomstick).

Can they do that?

Rights of publicity laws in many states prohibit commercial usage of the name, image, signature, or other indicia of the identity of a person without her consent. However, rights of publicity can be superseded by the First Amendment rights of the speaker, for example if the identity is used in news reporting, political commentary, parody, or (at least in California) if significant original transformative content has been added.

At first glance, the O’Donnell action figure seems to qualify under the commentary and parody exceptions.

But even when it is a much closer call — for example, an action figure that is an outright copy of a political figure solely in order to free-ride on his/her popularity — politicians usually decide it is bad publicity to sue. Herobuilders.com also sells action figures and bobbleheads of President Obama, Sarah Palin, Nancy Pelosi, Dick Cheney, and others. A notable exception to the “no sue” rule was California Governor Arnold Schwarzenegger, who sued an online seller of Schwarzenegger bobblehead dolls in 2004, but later agreed to a settlement in which the company could sell the dolls after a few modifications, such as removing the Governator’s toy assault weapon.

IP issues seem to run in Ms. O’Donnell’s family. According to this hilarious clip from MSNBC’s “Countdown,” Ms. O’Donnell’s father was the “fill-in Bozo the Clown” for a Philadelphia television station. He could not be the “official” Bozo because he did not attend the official Bozo training school in Texas.

Indeed, “Bozo” is a registered trademark of Larry Harmon Pictures Corporation (“LHPC”) for “Entertainment Services In The Nature Of A Children’s Television Program; Entertainment Services In The Nature Of Live Performances By A Clown Character.” So as licensor of this trademark, LHPC had a duty to maintain Bozo quality standards, for example by requiring CBE (Continuing Bozo Education) of all those licensees who represented themselves as Bozos to the public. Licensing without such quality controls would have been a naked license– in effect, a naked Bozo license. And that is a thought even more scary than a witch in the Senate.

Dealing With a Licensor’s Bankruptcy

Monday, June 21st, 2010

In January, we explained how a licensee’s bankruptcy looks from a licensor’s point of view.

What about a licensor’s bankruptcy from a licensee’s point of view?

The landscape is quite similar, except that in the first scenario, the main concern of the licensor is usually whether it will be paid by the bankrupt licensee, while in the second scenario, the main concern of the licensee is usually whether it will continue to receive the benefit of the license from the bankrupt licensor.

Thanks to a revision of the Bankruptcy Code, the licensee can usually continue to receive most of the benefits of the license even against the wishes of the licensor, except if it is a trademark license.

A bankrupt licensor gets to make the same choices about an executory license agreement as does a bankrupt licensee– to assume it, to assume and assign (sell) it, or to reject it.

Assumption is usually good for the licensee because it retains the benefit of the license. The licensor will elect to assume if it thinks that the license is a revenue producer that is beneficial to its Chapter 11 reorganization efforts, or if it decides to sell the license to a third party as part of a Chapter 7 or Chapter 11 asset sale.

The licensor’s decision to reject is normally bad for the licensee, unless the licensor’s performance had become so erratic that the licensee wanted to end the relationship anyway.

However, the licensor’s decision to reject does not need to be the end of the story. The licensee can either: 1) accept the rejection and file a claim for damages caused by termination of the license (and probably receive no more than the proverbial ten cents on the dollar); or 2) elect to continue receiving the benefits of the license under Section 365(n) of the Bankruptcy Code, the so-called Intellectual Property Bankruptcy Act of 1988 that was enacted to prevent hardship to licensees when a license is a core part of their business.

If the licensee chooses to retain its rights under Section 365(n), then it can continue to use the licensed intellectual property as it existed on the filing date of the licensor’s bankruptcy for the remainder of the license term and any renewals, however it cannot force the licensor to provide new or affirmative performance. For example, a licensee of software can continue using the software as it existed on the bankruptcy filing date, but cannot compel the licensor to provide updates, maintenance, or indemnification against third party claims, even if required per the license terms.

The licensee’s election of Section 365(n) comes at a cost. It must continue to pay royalties per the original terms of the license with no offsets for the licensor’s non-performance of its affirmative obligations.

But as mentioned above, there is a big loophole in Section 365(n)’s protection of licensees. It only applies to licenses of “intellectual property” as defined in the Bankruptcy Code, which includes trade secrets, patents, copyrights, and mask works, but NOT trademarks. The reasons are somewhat murky, but it appears that since licensor quality control is an indispensable requirement for trademark licenses, Congress was concerned that trademark licenses were inherently incompatible with the “no affirmative obligations” concept of Section 365(n), so excepted them from that section’s shield. But the legislative history also hints that bankruptcy judges should have discretion to shield trademark licenses from rejection in the interests of justice. Also, where the trademark license is inseparable from associated copyright or patent licenses to a particular technology, the licensee might be able to retain its trademark license. But otherwise, the licensee of a rejected trademark license is probably out of luck.

A final note. A licensee that wants to terminate the license relationship cannot invoke the licensor’s bankruptcy, even if the license agreement stipulates that the licensor’s bankruptcy is a default that justifies termination. Bankruptcy law overrides such “ipso facto” provisions, and requires licensees to continue performing (including paying royalties) under the license agreement in the interim between the licensor’s filing for bankruptcy and its election to assume or reject, except if the licensee makes a motion and gets a court order terminating the license.

The Uncertain Law of Dead Celebrity Goods, Sexy Einstein Edition

Thursday, May 27th, 2010

E = mc squared, baby

Thank you, Albert Einstein, for making our point.

Great minds think alike.

Unknown to The Licensing Law Blog, one day before we posted “The Uncertain Law of Dead Celebrity Goods,” representatives of the estate of Albert Einstein sued General Motors Company for an advertisement featuring the head of the Father of Relativity Theory photoshopped onto the ripped, tattooed naked torso of an underwear model, with the caption, “IDEAS ARE SEXY TOO.”

The ad ran in the November 30, 2009 “Sexiest Man Alive” issue of People Magazine to promote the GMC Terrain SUV, explaining, “THAT’S WHY WE GAVE IT MORE IDEAS PER SQUARE INCH.”

GMC was sued in federal court in Los Angeles by The Hebrew University of Jerusalem (HUJ), which was the beneficiary of all of Einstein’s intellectual property rights in his will, for trademark infringement and misappropriation of Einstein’s rights of publicity. (HUJ also claimed a subsidiary cause of action for unfair competition.) Einstein is the fourth highest grossing deceased celebrity property, earning about $18 million annually, according to Forbes magazine.

What makes this case interesting from a legal point of view is the rights of publicity issue as applied to dead celebrities. HUJ sued GMC under both New Jersey common law rights of publicity and California common law and statutory law rights of publicity.

New Jersey case law is clear that rights of publicity are property, and survive the death of the owner, as mentioned in the previous blog post. What is not clear is how long after death the rights survive. Einstein died in 1955 in Princeton, New Jersey. Did his rights of publicity survive 55 years after his death? The judge in the 1981 case Estate of Presley v. Russen said he had no idea what the survival period was without further guidance from the New Jersey State Legislature (which has not addressed the issue to date), although he suggested in a footnote that a good reference point might be postmortem survival periods under copyright law, which would be at least 70 years after death.

Also, there is the question whether California or New Jersey law controls. Usually (but not always) choice of law principles dictate that the law in rights of publicity cases is controlled by the state of the celebrity’s domicile at the time of death. But after cases involving Marilyn Monroe’s postmortem rights of publicity, in which courts in both New York and Los Angeles ruled in 2007 that the law of New York (Marilyn’s domicile) not California (Marilyn’s place of death) applied, California revised its rights of publicity law in an attempt to preserve postmortem rights of publicity for “personalities” regardless of date or domicile at death. In the unlikely event that this case ever reaches the decision stage, it will be interesting to see whether the court applies New Jersey or California law on rights of publicity.

By the way, no one will accuse GM of being Einsteins in the licensing field. A GM spokesperson said she believed GM had paid a “reputable organization” for rights to run the Einstein ad, but our guess is that they only paid for a copyright license for the Einstein photo, and not for rights of publicity or trademark licenses. In 2005, New England Patriots quarterback Tom Brady also sued GM for using his image in an advertisement without a license.

P.S. In case you are wondering about the impact of GM’s bankruptcy on the Einstein lawsuit, there is none. GM filed for Chapter 11 bankruptcy on June 1, 2009, and sold its assets to a new entity on July 10, 2009, which then took the General Motors Company name, and left the “old GM” to settle its debts with the proceeds it received from selling its assets to the “new GM.” So the entity that published the ad at issue on November 30, 2009 was never involved in bankruptcy, therefore the HUJ lawsuit will in no way be restricted or impeded by bankruptcy law.

‘Scuse Me While I Sue This Guy: The Uncertain Law of Dead Celebrity Goods

Thursday, May 20th, 2010

Jimi sez: "Businessmen they drink my...vodka?!?"

What do Jimi Hendrix, Elvis Presley, Marilyn Monroe, and Princess Diana all have in common?

If you guessed that all of them are dead celebrities, you are only half right.

More importantly, all of them were subjects of messy postmortem lawsuits against sellers of celebrity-branded goods.

Because of great variations in the laws, as well as “favorite son/daughter” influence on local courts, using the name or image of a dead celebrity to sell products without a license is risky business.

Doing so may put a businessperson in violation of two categories of legal rights, rights of publicity laws and trademark laws.

The more direct threat is the law of rights of publicity. Generally speaking, rights of publicity laws prohibit the commercial use of the name (and usually image and signature) of another person without his permission. But that is about all one can say with certainty — the laws are state-based, not federal, and beyond the basics, there are great variations in the laws of the states that recognize rights of publicity. In fact, it is not even certain how many states do recognize rights of publicity, with estimates ranging from the mid-20’s to close to 50.

One of the biggest variables among state laws is whether the right of publicity survives the celebrity’s death, and if so, for how long. States that characterize the right of publicity as a personal right naturally conclude that it is extinguished on the person’s death. New York is one such state. States that characterize the right of publicity as a property right, like New Jersey, naturally conclude that it survives the person’s death, and is descendible to her survivors.

That seems simple enough. So where is the problem?

1) Which state law decides the survivability of a dead celebrity’s right of publicity, a personal right state or a property right state? The estate of Marilyn Monroe has claimed for years that property right based rights of publicity laws in both California and Indiana gave them the right to charge royalties to would be users of Marilyn’s name or image, but they were dealt a severe surprise in 2007 when judges in both Los Angeles and New York ruled that since Marilyn was a New York domiciliary at the time of her death in California in 1962, then New York’s personal right based law controlled, and her right of publicity did not survive her death. Similarly, a Washington court ruled that the heirs of Jimi Hendrix did not inherit his rights of publicity, because Jimi was a New York domiciliary at the time of his death in England in 1970. A broad rule of thumb is that survivability is decided by the state of the celebrity’s domicile (generally the state of legal residence) at the time of the celebrity’s death. But there are many exceptions to this rule, making it risky for a celebrity-oriented business to try to guess without legal assistance. Big band singer Louis Prima died in 1978 after two years in a nursing home in Louisiana, which is a personal rights state, but nevertheless, a New Jersey federal court held that the issue of the survivability of his right of publicity was controlled by the law of New Jersey, where Prima had never lived, and allowed his widow to sue the Olive Garden restaurant chain and its advertisers for use of a Prima sound-alike singer in a television commercial.

2) Even in a property right state, it is not always clear how long after death the right survives. In a case decided four years after Elvis Presley’s 1977 death, a New Jersey court ruled that the state’s case law supported a property right based right of publicity, and ruled that a local Elvis impersonator had misappropriated the King’s right of publicity. However, the court admitted that it had no idea how long the right survived Elvis, and that the state legislature would need to clarify the issue. (It has not to date.)

In addition to rights of publicity law, trademark law may also require a seller of celebrity paraphernalia to take a license from a dead celebrity’s representatives. Here, the issue is usually not survivability after death (because trademark rights normally do survive death), but whether the celebrity’s name has in fact become a trademark — an identifier of the source or origin of goods or services — and if so, for which specific categories of goods or services.

A company called Electric Hendrix LLC (“EH”) decided that it could sell Jimi-Hendrix-branded vodka without a license from Hendrix’s estate, because courts had already decided that Jimi’s rights of publicity did not survive his death (above), and his estate had not filed trademark registrations in any category remotely related to alcoholic beverages, and in fact had vowed it would never license alcohol-related products, so there was no likelihood of consumer confusion as to the source of the vodka, or so EH thought. Nevertheless, a Washington court found that EH was liable for trademark infringement, after performing an eight factor infringement analysis, emphasizing that: (a) consumers would be likely to assume that any Hendrix-branded products came from or were authorized by the Hendrix estate; and (b) evidence of the intent of EH to free-ride on Jimi’s fame was overwhelming. The court ordered the defendants to halt all sales of EH vodka, and to remove all product from store shelves. It is possible that Jimi’s celebrity status in his hometown of Seattle was a factor in the decision.

Who You Callin’ Milkaholic? Lindsay Lohan’s IP Lawsuit

Friday, March 12th, 2010

Fans of both celebrity train wrecks and intellectual property law got a twofer with the recent news that actress Lindsay Lohan has filed a $100 million lawsuit against online brokerage E*TRADE for running a TV commercial that features a “milkaholic” baby named Lindsay.

The basis of Lohan’s lawsuit is a claim of misappropriation of her rights of publicity. New York law prohibits using, “for advertising purposes…the name, portrait or picture of any living person without having first obtained the written consent of such person….”

In the commercial, the protagonist, a male infant with the swaggering attitude typical of a twentysomething Maxim reader, calls his girlfriend via webcam to apologize for not calling the evening before. E*TRADE Boy freezes in panic when she asks, “And that milkaholic Lindsay wasn’t over?” A female infant pokes her face in front of E*TRADE Boy and asks the camera indignantly, “Milk-a-WHAT?” Lindsay the Baby does not bear any noticeable physical resemblance to Lindsay the Actress (below).

The fact that the E*TRADE commercial does not directly reference Lindsay Lohan is not necessarily fatal to Lohan’s case. In the most famous “misappropriation by allusion” case, Wheel of Fortune hostess Vanna White won a lawsuit against Samsung for a commercial in which a robot turned letters on a Wheel of Fortune-type crossword board. Also: Johnny Carson won against a portable toilet company which sold a “Here’s Johnny” model; Bette Midler won against Ford for a commercial with a sound-alike singer; and rap group the Fat Boys won against Miller Beer for a commercial with sound-alike rappers.

But pause for a moment to think about the logic that Lohan’s lawyer needs to argue to win:

1) “Milkaholic” really means “alcoholic” (so far, so good)

2) Any reference to a boyfriend stealing alcoholic named Lindsay can lead only to the conclusion that the ad is about Lindsay Lohan (stop the music!)

Even if she is right, does Lindsay Lohan really want her lawyer to make that argument at this point in whatever is left of her career?

Now, of course, after my former client Paris Hilton and her friends famously referred to Lindsay Lohan as “Fire Crotch,” if the E*TRADE commercial had mentioned Baby Lindsay’s diaper rash, THAT would be a case worth fighting.

Sports Licensing Corner: Licensing Revolution on the Campuses?

Monday, March 8th, 2010

An antitrust lawsuit brought by a former UCLA basketball star has the potential to upend the cozy, lucrative world of collegiate sports licensing, and even to make fundamental changes to the amateur nature of college sports.

Collegiate licensing is a $4 billion a year industry, about 80% of which is handled by the Collegiate Licensing Company (“CLC”), official licensing agent to the NCAA and over 200 universities.

One of the foundations of that industry is that college athletes are required to sign documents that relinquish in perpetuity their rights of publicity for college sports-related purposes, as a condition of participating in NCAA-sponsored college athletics. That means the NCAA can, without compensation to the athletes, license their names and images for apparel, video games, broadcasts, and highlight DVDs, long after they have graduated from college.

Ed O’Bannon, a former basketball star at UCLA during the 1990s, said he got angry seeing his highlight clips from 15 years ago being used to promote NCAA broadcasts, so last July he filed a class action lawsuit against the NCAA and CLC in federal District Court in San Francisco on behalf of himself and other former student-athletes.

The nub of O’Bannon’s legal argument is that requiring student athletes to sign away their rights of publicity in perpetuity is a violation of Section 1 of the Sherman Antitrust Act. Section 1 prohibits, “Every contract, combination…, or conspiracy, in restraint of trade or commerce among the several States….”

Agreements among the NCAA, CLC, and NCAA member universities, as well as the students’ relinquishments of their rights of publicity, are obviously “contracts,” so the next question under Section 1 is whether these contracts unreasonably restrain trade in a particular market. The NCAA will probably argue that: 1) the former athletes should not be able to bring an antitrust lawsuit in the first place, because they validly traded their rights of publicity for room, board, and tuition provided under their athletic scholarships; and 2) prohibiting college athletes from receiving payments for their athletic skills preserves the amateur nature of the college game, and therefore promotes, not restrains, competition in the market for college sports and sports products.

O’Bannon is likely to reply that: 1) requiring a college freshman to sign away his intellectual property rights in perpetuity without the presence of an attorney is invalid; and 2) assuming that amateurism by college athletes increases competition in the market for college sports, it is totally irrelevant to former athletes, who are no longer playing in games. O’Bannon argues that the NCAA, by prohibiting the former student-athletes from cutting their own apparel or video game licensing deals, is lessening competition, decreasing innovation, eliminating compensation to former athletes, and increasing prices to college sports fans, in violation of the Sherman Antitrust Act.

Indeed, by limiting their lawsuit to former students, the O’Bannon plaintiffs have considerably strengthened the legal arguments of their case.

The O’Bannon plaintiffs recently survived the defendants’ motion to dismiss the case before trial, but there is plenty of game left to play, sports fans. With so much money at stake, it is likely that no matter which side wins, there will be years of appeals before the matter is finally settled.

But if O’Bannon wins, the NCAA, CLC, and many college athletic departments could take a large financial hit. They all derive substantial revenue from that $4 billion in licensing fees, but the O’Bannon plaintiffs would claim a major (as yet unspecified) chunk as compensation to former student-athletes whose rights of publicity were utilized in licensing deals. In fact, antitrust law allows victorious plaintiffs to triple their damages. And of course the former college athletes would have the right to cut their own licensing deals going forward, independent of the NCAA and their alma maters.

Furthermore, if O’Bannon wins, it is possible that current college athletes might utilize the rationale in any O’Bannon victory to attempt to weaken or throw out the current system of signing their rights of publicity over to the NCAA and CLC. For example, if the court were to rule the waivers were defective because the NCAA failed to advise students that they should seek legal counsel before signing away rights to future compensation for their intellectual property, then current athletes might argue they too should have the right to be represented by counsel in negotiating rights waivers during their college playing careers. Then star college athletes could get embroiled in contract negotiations, just like professional athletes.

Stay tuned, licensing and college sports fans…

Is Paris’ (Food) Burning?

Tuesday, January 5th, 2010

Hallmark, you've been like served

Having served as Paris Hilton’s licensing attorney in a previous life, I am obligated to preserve the confidences of my former client.

So please understand if I report the following case without editorial comment and/or sarcastic innuendo about “intellectual property.”  No, I will leave that to others.

To wit, Paris prevailed before a federal appeals court in her claim that Hallmark Cards may have misappropriated her right of publicity with a birthday card titled “Paris’s First Day as a Waitress” that featured a photograph of the hotel heiress’ head on a cartoon figure of a waitress, delivering a plate of food to a customer with her catchphrase “That’s Hot.”

Under the law of California and most other states, commercial use of a person’s image without permission is normally a violation of her right of publicity.  But Hallmark had argued successfully to the trial court that the claim should be dismissed, because its cartoon figure sketch of Paris had added sufficient original content such that it qualified under the “transformative use” doctrine in California, so that the First Amendment trumped the California right of publicity claim.

However, the appeals court sided with Paris. The court did not have to rule on the merits of the issue, but ruled that the birthday card was not transformative enough under California law to automatically qualify for First Amendment protection, at least not without a much closer look by the trial court.  For that reason, it reinstated the claim and sent it back to the trial court to decide whether it had sufficiently transformed Paris Hilton’s image, or was mainly free-riding on her fame.

Takeaway: tread very carefully when using a celebrity look-alike or sound-alike in any non-news, commercial context.  The use may qualify for First Amendment protection, because it is a parody or has been “transformed” by sufficient original content, but it is often difficult to predict how a court will rule on these issues.  The case law on “transformative use,” especially, is all over the map, as Hallmark’s lawyers discovered.

Awesome.