Monthly Archives: May 2011

What are the Intellectual Property Aspects of Pitching a Proposed Television Show?

We routinely have potential clients contact us about handling the legal aspects of a proposed television show. Most of the time, this sort of inquiry involves one of two categories: (a) a reality series or (b) a minor celebrity-sponsored advice show.

These are called “strip shows” (not as interesting as it sounds). A strip show is a television series which involves minimal set design; name actors; and other high cost production aspects. This leads to the most important aspect of pitching such a television series: money. It is critical to make the production cost effective and, if at all possible. bring money to the table.

I cannot emphasize enough how it increases the chance of a series being picked up if the one pitching it has some level of financing. Otherwise, it is just another (hopefully) compelling idea that needs money to be put on the air. Great premises – especially in the reality television arena – are plentiful. People with financing behind them are not.

Another important aspect is to shoot a few episodes so that they can be displayed at syndicated television trade shows. The idea is to set up the pitch meetings before the trade shows, so that one is not attending the show as simply another producer pitching material. It is better to have made contact beforehand and set up an appointment to show one’s wares in private to a potential syndicator.

It is important to keep in mind that shooting the proposed episodes should always be done after all parties sign agreements waiving potential intellectual property ownership rights in the series. This is one of those steps that is frequently skipped because the series appears to have no intrinsic value at the outset. But that is exactly the point: one is trying to build and protect that value. Complete ownership of the rights is critical to doing so.

Comments/Questions: gdn@gdnlaw.com

© 2011 Nissenbaum Law Group, LLC

What are the Dangers of Cloud Computing?

On April 21, 2011, the naysayers who have been inveighing against cloud computing were given more evidence as to why it may not be the panacea it has been touted to be. Amazon’s cloud computing service crashed.

The entire point of cloud computing can be summed up as a way to save time and money by outsourcing the infrastructure necessary for a business to run its computing functions e.g., email; bookkeeping; invoicing; and word processing. The idea is to take advantage of the economies of scale to eliminate the cost of having consultants or employees on site to create a server/software complex just for that one business. By sharing the service with many businesses, the costs are reduced, as is the need to update and maintain the infrastructure.

However, the danger is that when the cloud falls apart, the business has less control. It must wait in line with all the other clients accessing the cloud for things to be right as rain (sorry) again.

The April 21st Amazon outage related to one of its cloud computing offerings called, the Amazon Elastic Block Store. It happened as a result of human error when the system was being serviced for general maintenance. It took about three days for everything to be back on line. But in the virtual world of the Internet where everything is meant to be instantaneous, that can be an eternity.

This highlights the necessity that a business using cloud computing should always have contracts with the provider that provide appropriate remedies in the event of an outage. It also relates to the need for the contract to provide for back up systems not only for service but for the storage of the data itself.

Comments/Questions: gdn@gdnlaw.com

© 2011 Nissenbaum Law Group, LLC

Where does the injury occur when books copyrighted by a New York publisher are uploaded onto the Internet by an out-of-state entity?

Penguin Group (USA) Inc. (“Penguin”), a New York corporation with its principal place of business in New York City, sued American Buddha, a not-for-profit corporation with its principal place of business in Arizona, for copyright infringement in the United States District Court for the Southern District of New York.  Penguin claimed that American Buddha infringed upon copyrights owned by Penguin for four books.  American Buddha allegedly published complete copies of those books on its two web sites, making them available free of charge to its 50,000 members and to anyone else with an Internet connection.  The electronic copying and uploading of the books by American Buddha took place in either Oregon or Arizona.  American Buddha claimed its right to copy and upload the books was protected by sections 107 and 108 of the Copyright Act, 17 U.S.C. §101 et seq., which govern fair use and reproduction by libraries and archives.  Penguin disputed that any exception to the Copyright Act applied to American Buddha’s activities.  Penguin Group (USA) Inc. v. American Buddha, CITATION

American Buddha moved to dismiss Penguin’s complaint on the ground that its ties to New York were too insubstantial for it to be subject to personal jurisdiction in that state.  Penguin countered that American Buddha was subject to personal jurisdiction in New York under CPLR 302 (a) (3) (ii) as it committed a tortious act outside of New York that resulted in injuries in New York.  American Buddha countered that CPLR 302 (a) (3) (ii) did not apply since Penguin did not suffer an injury within New York State.  The District Court granted American Buddha’s motion to dismiss holding that Penguin sustained injury in either Oregon or Arizona, which was where the copying and uploading of the books occurred.  The court reasoned that Penguin “suffered only a ‘purely derivative economic injury’ in New York based on its domicile here, which was insufficient to trigger CPLR 302 (a) (3) (ii).”  Id. at p.3.  Penguin appealed the decision of the District Court to New York’s Court of Appeals, which was asked to decide the following certified question:

“In copyright infringement cases involving the uploading of a copyrighted printed literary work onto the Internet, is the situs of injury for purposes of determining long-arm jurisdiction under N.Y. C.P.L.R. § 302 (a) (3) (ii) the location of the infringing action of the residence or location of the principal place of business of the copyright holder?”

The Court of Appeals determined that the location of the infringing action for purposes of New York’s long-arm jurisdiction was the location of the principal place of business of the copyright holder.  Under N.Y. C.P.L.R. § 302 (a) (3) (ii) long-arm jurisdiction may be exercised by a New York court when, 1) the defendant commits a tortious act outside New York; 2) the plaintiff’s cause of action arose from that tortious act; 3) the tortious act caused an injury to a person or property in New York; 4) the defendant expected or should reasonably have expected to act to have consequences in New York; and 5) the defendant derived substantial revenue from interstate or international commerce.  The only issue to be decided by the Court of Appeals was the third element – “whether an out-of-state act of copyright infringement has caused injury in New York.”  Id. at p.5-6.

While acknowledging that determining the location of the injury was more difficult when the alleged infringement involved the Internet, the court was persuaded by two factors to decide that “ a New York copyright owner alleging infringement sustains an in-state injury pursuant to CPLR 302 (a) (3) (ii) when its printed literary work is uploaded without permission onto the Internet for public access.”  Id. at p.9.  First, the intended consequences of American Buddha’s activities – the instantaneous availability of works copyrighted by Penguin on American Buddha’s web site for anyone, in New York or elsewhere, with an Internet connection to download and read the works free of charge.

Second, the unique bundle of rights given to copyright owners tipped the balance in favor of determining New York as the situs of injury.  These five “exclusive rights” include, the right of reproduction; the right to prepare derivative works; the right to distribute copies by sale, rental, lease or lending; the right to perform the work publicly; and the right to display the work publicly.  17 U.S.C. §106.  As a result, a copyright owner has an “overarching ‘right to exclude others from using his property.’”  Id. citing eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 392 (2006).

Combining the aforementioned factors led the court to reason that a New York copyright holder “whose copyright is infringed suffers something more than … indirect financial loss.”  Id. at p.11.  For example, one potential harm of copyright infringement is the loss or diminishment of the incentive to publish or write.  Id. at p. 11.  A tort committed outside of New York that was likely to cause harm through the loss of business inside of New York was “sufficient to establish personal jurisdiction regardless of whether damages were likely recoverable or even ascertainable.”  Id. at p.12.

Further, there was no dispute that American Buddha’s web sites were accessible by any New Yorker with an Internet connection.  Therefore, “an injury allegedly inflicted by digital piracy is felt throughout the United States, which necessarily includes New York.”  Id. at p.12.  The court also distinguished the uploading of copyrighted books to the Internet from traditional commercial tort cases where the injury was generally linked to the place where sales or customers were lost.  The location of the infringement in such cases was unimportant since the goal was to make the copyrighted works available to anyone with an Internet connection, including those in New York.  Thus, “the concurrence of these two elements – the function and nature of the Internet and the diverse ownership rights enjoyed by copyright holders situated in New York – leads us to … conclude that the alleged injury in this case occurred in New York.” Id. at p.13.

Comments/Questions: gdn@gdnlaw.com

© 2011 Nissenbaum Law Group, LLC