Sports & Entertainment Beat

Lawsuits by unpaid interns have become as trendy as kale salad and Taylor Swift’s bangs, particularly in the broadcast and entertainment industries.  For instance, Clear Channel Media and Entertainment (now iHeartMedia, Inc.), Fox Entertainment Group, Inc., Hearst Corporation, NBCUniversal, Inc., and International Creative Management Partners, LLC have all been hit with lawsuits by former unpaid interns claiming they were not paid minimum wage in violation of the Fair Labor Standards Act (“FLSA”).  While unpaid internships in the coveted entertainment industry have long been popular among high school, college and graduate students as a means to gain valuable experience and “build” one’s resumé, the increasing volume of unpaid wage claims may make companies reluctant to use unpaid interns, perceiving them as a risk not worth taking.  However, that view might be short-sighted, because interns may be key to the future of a company.  If an internship is structured properly, both parties (the student and the company) can benefit, although the employer company may not receive an immediate advantage from the internship.  Companies often benefit from the energy and new and creative ideas of student interns and derive intangible satisfaction from helping to train the next generation of entertainment industry professionals.  Similarly, interns who complete the internship with a positive experience “spread the word” about the company’s virtues to other students, friends, family members and colleagues they encounter wherever they end up in their careers.

Pick Team Members who have Contacts, Industry Knowledge, High Ethical Standards, and Brand-building Acumen.

Just like regular sports teams, some business teams are good and some are bad. Some teams have great players, but the players don’t work well together, because there is no strategy in place, and each player approaches the game from his or her own perspective. As a result, plays can be disjointed, unproductive and do little to advance the cause of winning the game.

The same thing can happen with the business management of an athlete’s or entertainer’s career.  When an athlete or entertainer receives what seem to be contradictory opinions from different professionals on his or her business team or worse, does not receive timely feedback from a team member, he or she can be overwhelmed, and the decision-making process disrupted, or even stalled, resulting in loss of valuable opportunities, time, money - and no one winning the game.

Joey is an 11-year-old jazz piano prodigy from Indonesia. His debut album came out Tuesday, and was the number one jazz album on iTunes. This week, he was also featured on the front page of The New York Times and had an interview with the Today Show that aired yesterday morning. The Today Show feature said Joey is “Taking the jazz scene by storm!” and “On his way to becoming the best jazz pianist of our time!”

On September 30, 2014, the Federal Communications Commission (FCC) released a statement repealing its sports blackout rule, a rule that the National Football League (NFL) has defended and relied on since 1975. The blackout rule strengthened the NFL’s own blackout policy, which prohibited local broadcast stations from televising a game that did not sell between 85% and 100% of its tickets at least 72 hours before kickoff. Similarly, the FCC rule prohibited cable and satellite operations from airing any game that was blacked out on local broadcast stations. Although the FCC’s rule applied to all sports, the NFL has not only relied upon it the most, but also fought the hardest to preserve the rule.

Well-known musicians and other entertainers often identify opportunities for innovation in their industry and are able to obtain patent protection for such inventions.  Some obtain patent protection for improvements to musical instruments or to new approaches to their craft.  Here we highlight three well known performers who were each granted one or more patents.

On October 1, 2014, a new law came into effect that excepts parody, caricature and pastiche from the scope of copyright protection in the United Kingdom.  Under the previous law, parodists bore the risk of being sued for breach of copyright if they used clips from television shows, films or songs without the copyright holder’s permission.  The new law allows the use of such content as long as the use is “fair” (meaning it does not commercially compete with the original work) and is not discriminatory in nature.

California Governor Jerry Brown has taken a big step toward bringing film and television production back to California by signing a bill last week that increases the budget of its Film and Television Tax Credit Program from $100 million to $330 million.  In addition to the significant budget increase, the new bill replaces what many considered to be an arbitrary lottery selection process with one that considers eligible productions based on job creation and economic impact on the state, and it also opens up the program to films with budgets over $75 million for the first time.  California, the state most associated with the entertainment industry, has seen a sharp decrease in film and television productions occurring within the state due to an increase in the number of other states offering film and television tax incentive programs ("Incentive Programs"), a number of which offer more competitive incentives than that previously offered by California.  Since 2000, the number of states with such programs has increased from just a handful to a majority of the states, and according to Gov. Brown, the number of productions in California has been cut by half in the last 15 years.

We often hear about Tommy John surgery for baseball players, and it may be becoming more commonplace.  For example, several pitchers for the New York Yankees have undergone the procedure in recent years.  In general, Tommy John surgery is a medical procedure to repair a torn ulnar collateral ligament (UCL) in the medial elbow.  Before the procedure was developed, the injury was considered career-ending. These days, talented pitchers who undergo the surgery often become top flight pitchers once again.

As the surgery has become more commonplace, so too have patents and patent applications referencing the surgery or the injury it was designed to treat.  Various types of businesses have been able to identify opportunities related to UCL tears and surgical repair of the injury, many of which are ancillary to the surgery.

On August 6, 2014, the online gaming community and video platform Twitch announced that copyright protected music and audio would be muted in its Video on Demand content.  In a move that is likely related to its recent acquisition by Amazon, Twitch is collaborating with Audible Magic, the provider of automated audio content identification software, to identify and mute copyright-protected content.  In an explanation provided on Twitch’s blog, it notes that it “respect[s] the rights of copyright owners” and is seeking to “help protect both our broadcasters and copyright owners.”

On August 18, 2014, the Ninth Circuit Court of Appeals issued an opinion that may impact the way website users are bound by Terms of Use.  In Nguyen v. Barnes & Noble, Inc., Plaintiff had purchased two items during a "fire sale" on the Barnes & Noble website, received an order confirmation and then received another e-mail the following day notifying him that the order had been cancelled.  Plaintiff proceeded to file a putative class action lawsuit against Barnes & Noble, alleging deceptive business practices and false advertising.  In response, Barnes & Noble moved to compel arbitration pursuant to the Barnes & Noble website Terms of Use.  Plaintiff argued that he never clicked on the link to the Terms, and he had no notice of the Terms or the arbitration provision.  The district court ruled in favor of the Plaintiff, finding that, even though the site contained a hyperlink to its Terms of Use on every page, including through completion of the purchase process, the Plaintiff did not have actual notice of the Terms, nor did the existence of the hyperlinks provide him with constructive notice (i.e. implied notice) of the Terms, and Plaintiff was therefore not bound by the arbitration provision.