Sports & Entertainment Beat

Case Background

In a case titled Garcia v. Google, Inc., 12-57302, the recent ruling of the 9th Circuit Court of Appeals (which covers nine states, including California) suggests that an actor has a protectable copyright in the recording of his or her performance. In this case, Cindy Lee Garcia was hired and paid to act in a film entitled “Desert Warrior.” Ms. Garcia’s role was minimal. She was given only 4 pages of script and filmed for 3 ½ days. While “Desert Warrior” was never released, the film’s writer and producer dubbed over Ms. Garcia’s performance and included it in a different film called “Innocence of Muslims.” “Innocence of Muslims” was posted on YouTube. The context in which Ms. Garcia’s performance appeared in the film was interpreted as anti-Muslim by the Muslim community. Following the film’s release and posting on YouTube, Ms. Garcia received death threats. Despite Ms. Garcia’s numerous requests to Google that it remove “Innocence of Muslims” from YouTube, Google refused.

As a general rule, in accordance with IRC § 61, the value of any prize or award a taxpayer receives is subject to taxation. Internal Revenue Code (IRC) §§ 74 and 117 provide limited exceptions to this general rule.

IRC § 74 specifically excludes from the income of the recipient certain employee achievement awards and certain prizes or awards transferred to charitable organizations prior to receipt. IRC § 117 specifically excludes from the income of the recipient “qualified scholarship” proceeds. These exceptions are subject to rigid qualifications.

Spotify has launched a new commission-free service that permits music artists to make their merchandise and live concert tickets available to fans through the Spotify platform.  Through Spotify’s partnership with direct-to-consumer marketing platform, Topspin Media, artists will now be able to link from their Spotify artist page to a webstore, enabling them to provide fans direct access to CDs, vinyl records, t-shirts, posters, stickers, writstbands, and other merchandise through Spotify.  Participating artists will manage “preview” merchandise images, item titles, and descriptions that will be linked to the applicable webstore.  Spotify will moderate submissions to ensure the authenticity of offered merchandise.  It is anticipated that the merchandise offerings will appear on an artist’s page 24 to 48 hours after submission by the artist.  Currently, the service limits artists to offering a maximum of three merchandise items at a time.

California recently adopted a new law that affects almost all website operators and online service providers. The update to the California Online Privacy Protection Act (“CalOPPA”) became effective January 1, 2014, and applies to any person or company that operates a commercial website or online service (California’s position is that “online service” includes mobile apps) and collects personal information about California residents, whether such information is actively provided by the visitor or user or automatically collected by the site or service.