Archive | November 2012

Smartphone Wars

In what could be a new blow to ailing smart-phone maker Research-in-Motion, Nokia Corp. has announced that it has filed a lawsuit against the renowned Blackberry manufacturer for allegedly breaching a patent licensing agreement.

Nokia bases its claims on a patent licensing agreement with RIM. The dispute arose out of the scope of the licensing agreement: Nokia claiming that it covers patents for GSM, WCDMA and CDMA2000 technologies, while RIM states that the license also covers WLAN technology.

The suit comes on the heels of an arbitration held in Stockholm, Sweden whereby, according to Nokia spokesman Mark Durrant, RIM was found to have breached the contract at issue. The legal action pending in the United States seeks to enforce the Stockholm arbitral award.

It is unclear whether RIM will move the court to set aside the arbitral award. Arbitral awards are most often enforced in American courts and are notoriously difficult to set aside. The current law governing the enforcement of arbitral awards, the Federal Arbitration Act, seriously limits judges’ abilities to look behind the ruling of an award and only allows courts to overrule arbitration panels on certain limited and enumerated grounds. For example, RIM would have to prove that an arbitrator was impartial and therefore jeopardized the fairness of the proceeding.

Since May, Nokia has also been battling RIM in both US and German courts, claiming that RIM and HTC and ViewSonic have infringed a number of its patents.

Grupo Clarín Battles Argentina Government Over Media Law

Grupo Clarin and the Argentinian Government brace for legal face-off.

 A legal showdown between major media conglomerates and the Argentinian government is quickly brewing after the Argentinian government stated that it planed to seize and auction-off certain broadcast licenses as well as cable TV and fiber-optic Internet networks owned by media companies. The sell-off is being carried out pursuant to a recent media law. The stakes are high as a Supreme Court battle is about to unfold wherein free speech, antitrust, and private-property rights issues will be raised.

The media law in question is a 2009 federal law which disallows cable TV companies from holding more than 24 broadcast licenses nationwide. Grupo Clarín SA, a major media company who owns Cablevisión, who is openly defying the law, has between to 237 and 158 licenses nationwide. Other conglomerates, like Uno Medios, also surpass the 24-license cap imposed by the 2009 law.

While all media companies have been granted an injunction staying the sell-off, this injunction is set to expire on December 7th 2012. After this deadline, the federal agency created to enforce the law is set to begin sell-offs of both media licenses and infrastructure – a move that is seen by some as an expansion of the law which had been thus-far interpreted to cover only licenses.

Opponents of the law, like Clarín and Uno Medios, have called the law unconstitutional on grounds that it violations private-property rights and free speech. As a response, last week, Argentina’s Congress passed a law that allows the government to present its case directly the Argentinian Supreme Court, bypassing the typical channels through federal trial and appeals courts. Some have criticized this move and question whether direct Supreme Court appeal will only worsen an already dysfunctional federal appeals system. Last week’s law came on the same day that Mr. Martin Sabbatella, a government agent, approved the sell-off plan.

Grupo Clarín, one of the only media companies that doesn’t depend on government advertising or public funds, believes it is unfairly targeted by the 2009 law. The government, spearheaded by President Kirchner, has countered by saying that Clarín’s defiance is an attempt to undermine the anti-monopoly law and the December 7 deadline, which apply to all media companies equally. The law is intended to give broadcast licenses to local communities and requires theatres to show more local films.

Grupo Clarín is a media conglomerate which own newspapers, magazines and television and radio stations and provides cable TV. It is slated to petition the Supreme Court to rule on the constitutionality of the 2009 law. There is a strong likelihood, however, that the Supreme Court, dominated by the President Kirchner’s nominee’s, will refuse the case and could simply send it down to a lower court judge.

NOTE: Photo from Wall Street Journal.

Quote My Work and Show Me The Money.

Artists and their estates have been known to sue whenever they believe their work has been unlawfully used without permission. Considering how ambiguous the law is on the matter this should come as no surprise. Woody Allen’s highest grossing film to date, ‘Midnight in Paris’ has become the latest feature to face misappropriation allegations. Faulkner Literary Rights, the company that controls the rights of William Faulkner’s work has filed suit against Sony Pictures Classics on the grounds of copyright infringement, commercial appropriation and violation of the Lanham Act. They claim Allen, by paraphrasing a passage from Faulkner’s book ‘Requiem for a Nun’, has ‘deceived the film’s viewers as to a perceived affiliation, connection or association’ between the author and the movie.

The original passage reads, “The past is never dead. It’s not even past” whereas Owen Wilson’s character in the movie can be heard saying, “The past is not dead! Actually is not even past.” He then goes on to say, “You know who said that? Faulkner, and he was right. And I met him too, I ran into him at a dinner party.”  It is to be noted, however, that acknowledging the source does not act as substitute for obtaining permission when one is indeed required.

Let’s begin by analyzing the copyright allegation. The Copyright Act of 1976 seeks to protect any ‘original work of authorship’ that is finalized in a fixed form of expression, the rationale behind it is to encourage artists and scientist to create by ensuring they are decently paid. Although one of the most valuable rights conferred by this protection is the right to reproduce or to authorize others to reproduce their work, an important limitation exists in section 107 called the doctrine of ‘fair use’. In accordance with this doctrine, you may use portions of a work (including quotes) without having to license or pay for it for purposes of commentary, criticism or parody, news reporting and scholarly reports.  Given the many contexts on which fair use can be claimed, what it entails is judged on a case-by-case basis. Section 107 further provides four factors that act as guidelines when determining whether a particular use is permissible or not, namely: the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion taken, and the effect upon the potential market or value of the original work. The latter is often seen as the most important factor.

Despite the short length of the infringing quote, there is no established number of words that can be safely copied. Lee Caplin, who represents the estate, argues that despite being only 10 words long, the snippet summarizes the plot of the film and it is one of the most famous quotes in American literature.

Allen’s use, however, is likely within the boundaries of fair use. Faulkner is only one of countless characters that are referred to in the movie, such as F. Scott Fitzgerald, Ernest Hemingway, Pablo Picasso and Salvador Dali.  Also, although a commercial enterprise, no reasonable person would buy the DVD of Midnight in Paris as a substitute for the book where the original quote can be found. Thus, despite claims to the contrary, it appears there is no actual harm to the value of the work from which to base a copyright infringement allegation.

The trademark count based on the Lanham Act, fails for similar reasons. A trademark is any work, name, slogan or symbol used in commerce that identifies a particular product. Signature phrases and saying have become increasingly important in brand-building and marketing. Movie lines such as ‘show me the money’ and ‘hasta la vista, baby’ are quickly associated in the public’s mind with Jerry Maguire and The Terminator, respectively. Much like copyrights, legal rights to trademarks arise automatically without the need of formalities, though registration carries with it many benefits and it is thus highly recommended. Hence, it is arguable that if the quote in question is so famous so as to be instantly associated with William Faulkner, it should be treated as a trademark even if it has not been registered yet. The main test used when evaluating trademark violations is a likelihood of confusion test. Yet, the values behind such protection are threefold: to protect the public from confusion, to protect the owners from others unfairly reaping into the goodwill of their brand, and to foster competition. It is thus evident that the problem is still the same for those representing the estate of Faulkner, no movie viewer can be said to have been confused by Allen’s use of the phrase; no competitor has been harmed, especially considering that the movie and the book are not competing against each other; and lastly, the goodwill of the quote has not been abused or affected by the movie.

Most artists readily admit to have been ‘inspired’ by the work of previous authors, singers and poets. Francis Coppola is reported to have based his film ‘Apocalypse Now’ on Joseph Conrad’s novella ‘Heart of Darkness’. William Faulkner himself named his book ‘The Sound and the Fury’ after a passage in Macbeth, and another of his books, ‘Absalom’, takes his name from the biblical book of Samuel. Furthermore, the passage used in Midnight in Paris has been used many times before. Ben Folds used it in his song ‘Smoke’ and the President of the United States in one his 2008 campaign speeches, to name a few. Let us hope that the courts dealing with this matter will take this occasion to remind the right holders that the reason behind intellectual property protection is to foster creativity, and not to create monopolies on the use of 10 famous words.

Singling Out Future Hits

Over the past decade, Swizz Beatz has evolved into one of the most innovative and influential music producers in the music industry. After having concocted a number of hits with the likes of Beyoncé, Jay-Z, Kanye West, and others, his clout has grown to the point where he now represents a benchmark for trends in the music industry. “Everyday Birthday,” Beatz’s newest track, may signal that the winds are blowing in a new direction in the music industry: away from full LPs and toward singles. The single, and its pricey Hangover-inspired music video shot in Cannes, France, have been released independently from any studio album.

“I don’t want to force an album down anyone’s throat,” Swizz Beatz declared in an interview.

What’s more, the stand-alone single features Ludacris and Chris Brown, two hugely successful and influential artists. They also partnered up to shoot a $1 million video in the French Riviera, which will become available for purchase on Apple’s iTunes on November 13th. The video was funded in part by product placement from Addidas AG’s Reebok, with whom Beatz works as vice president of sports style marketing, design, and brand music development.

From a creative point of view, this method offers more flexibility and reactivity to an ever voracious and demanding fan base. “Because I’m a producer and more of a maestro, picking a moment and releasing one track works better for me,” Swizz Beatz said. Financial backers may also prefer a method of financing small projects as this exposes less of their capital and allows for more hedging.

It may be too soon to tell whether this type of autonomous single signifies a turning point in the way the music industry produces hits in an era of playlists and .99¢ downloadable single songs. In any event, it is a rising trend that heavy-hitters seem to be buying into and that players in the music world need to be aware of.

Here is a link to the video:

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