Bit Parts

DVD Distribution/Product Labeling. The U.S. District Court for the District of Massachusetts dismissed without prejudice a suit by independent home-video stores fearful of a message that might be placed on the defendants' DVD releases. NEGB LLC v. The Weinstein Co. Holdings LLC (TWC), 07-30001-MAP. In November 2006, TWC signed an agreement to exclusively give Blockbuster video stores its movie releases. The plaintiffs filed suit after the CEO of TWC's distribution subsidiary, Genius Products, publicly stated that in addition to placing a 'Blockbuster' logo on TWC's DVDs, the packaging would include 'a message telling consumers that the disc is intended for purchase only, and if they have rented it, they will be encouraged to call a toll-free number.' The plaintiffs argued the message would run afoul of the Copyright Act's first-sale doctrine, and violate state statutes and common laws related to deceptive-trade practices. But dismissing the complaint for lack of ripeness, the district court noted: 'On the one hand, this ambiguity regarding Defendants' plans for a toll-free number notice is obviously a source of concern for Plaintiffs ' Plaintiffs will be forced to remain on the watch for product labeling that might cause customers to look askance at their business practices ' On the other hand, the uncertainty regarding the propriety of the proposed toll-free number notice also encourages Defendants to
think twice before crafting a message that might lead a reasonable consumer to misconstrue Plaintiffs' rights under the First Sale doctrine.' ' Film-Payroll Services/Completion-Bond Reinsurers. The U.S. Court of Appeals for the Ninth Circuit granted a new trial on damages in a suit by Entertainment Services Partner Group (EP) for reimbursement of payroll services made for the motion picture 'The Devil and Daniel Webster.' SCIE LLC v. XL Reinsurance America Inc., 05-55704. Completion-bond reinsurers XL and Star Insurance (XP/Star) had acquired the rights in the movie by paying the primary lender. EP later was awarded $3.2 million in arbitration against the film's producer David Glasser but couldn't collect the amount. So EP sued the movie's completion-bond issuer, WorldWide Film Corp., and the reinsurers. The jury awarded EP $1.75 million against XP/Star, then adjusted the amount to zero on the ground that EP hadn't mitigated its damages. But in an unpublished opinion, the Ninth Circuit noted: 'XL/Star's theory of damages at trial assumed that reliance needed to be proven. Under Calif. Civ. Code Sec. 1589, the measure of damages is XL/Star's benefit, not EP's reliance ' The mitigation finding is also unsupported ' XL/Star cannot claim the benefit of EP's meeting the payroll needed for the ongoing production and fail to pay for it, while arguing that EP should have stopped payroll before the film was finished.
Thanks to EP's advancing the money, XL/Star had a completed film.' ' Recording Agreements/Fiduciary Obligation. The U.S. District Court for the Central District of California denied Capitol Records' motion to dismiss a breach-of-fiduciary-obligation claim in a royalty suit by musician George Clinton. Clinton v. Capitol Records Inc. 06-7484 FMC. The case involves three agreements Clinton signed with Capitol between 1981 and 1996, including one for Clinton's personal services to remix his prior recordings. Courts typically find that royalties in recording agreements do not give rise to a fiduciary obligation by a label to the artist. In this case, however, the district court found that Clinton sufficiently alleged a joint venture between the parties. The court noted: 'First, Plaintiff has pleaded that the parties 'engaged in a single enterprise ' the creation, production, distribution and marketing of George Clinton sound recordings for mutual profit ' Second, the agreements clearly contemplate that Plaintiff would receive a portion of the profits derived from the exploitation of his recordings, in the form of royalties. Concomitantly, Plaintiff has pleaded that the 'parties ' agreed to share losses of the enterprise' ' [Finally, w]hile some of the provisions in the agreements appear to vest exclusivity of exploitation and other rights in Defendant, it is unclear to what extent Plaintiff, in practice, retained rights of approval.' ' Songwriting/No Partnership Found. The U.S. for the Central District of California granted summary judgment for singer/songwriter Brian Wilson, who was the last defendant following several other rulings in a suit by Mike Love, another Beach Boys founding member, over the distribution by a British newspaper of a CD containing Wilson re-recordings of Beach Boys songs. Love v. The Mail on Sunday, CV 05-7798ABC (PJWX). Love claimed that Wilson breached a fiduciary duty, owed under a purported songwriting partnership between the two artists dating back to the 1960s, by failing to obtain Love's approval for the UK CD. But the district court found: 'Although Plaintiff states repeatedly that he and Defendant were partners, there is an absence of evidence to demonstrate that they were partners when the 2004 Good Vibrations promotion took place. Further, even assuming that a partnership existed at some point, there is no evidence that the partnership required either partner to 'inform' the other when re-recording their co-authored songs.'

DVD Distribution/Product Labeling. The U.S. District Court for the District of Massachusetts dismissed without prejudice a suit by independent home-video stores fearful of a message that might be placed on the defendants' DVD releases. NEGB LLC v. The Weinstein Co. Holdings LLC (TWC), 07-30001-MAP. In November 2006, TWC signed an agreement to exclusively give Blockbuster video stores its movie releases. The plaintiffs filed suit after the CEO of TWC's distribution subsidiary, Genius Products, publicly stated that in addition to placing a 'Blockbuster' logo on TWC's DVDs, the packaging would include 'a message telling consumers that the disc is intended for purchase only, and if they have rented it, they will be encouraged to call a toll-free number.' The plaintiffs argued the message would run afoul of the Copyright Act's first-sale doctrine, and violate state statutes and common laws related to deceptive-trade practices. But dismissing the complaint for lack of ripeness, the district court noted: 'On the one hand, this ambiguity regarding Defendants' plans for a toll-free number notice is obviously a source of concern for Plaintiffs ' Plaintiffs will be forced to remain on the watch for product labeling that might cause customers to look askance at their business practices ' On the other hand, the uncertainty regarding the propriety of the proposed toll-free number notice also encourages Defendants to
think twice before crafting a message that might lead a reasonable consumer to misconstrue Plaintiffs' rights under the First Sale doctrine.' ' Film-Payroll Services/Completion-Bond Reinsurers. The U.S. Court of Appeals for the Ninth Circuit granted a new trial on damages in a suit by Entertainment Services Partner Group (EP) for reimbursement of payroll services made for the motion picture 'The Devil and Daniel Webster.' SCIE LLC v. XL Reinsurance America Inc., 05-55704. Completion-bond reinsurers XL and Star Insurance (XP/Star) had acquired the rights in the movie by paying the primary lender. EP later was awarded $3.2 million in arbitration against the film's producer David Glasser but couldn't collect the amount. So EP sued the movie's completion-bond issuer, WorldWide Film Corp., and the reinsurers. The jury awarded EP $1.75 million against XP/Star, then adjusted the amount to zero on the ground that EP hadn't mitigated its damages. But in an unpublished opinion, the Ninth Circuit noted: 'XL/Star's theory of damages at trial assumed that reliance needed to be proven. Under Calif. Civ. Code Sec. 1589, the measure of damages is XL/Star's benefit, not EP's reliance ' The mitigation finding is also unsupported ' XL/Star cannot claim the benefit of EP's meeting the payroll needed for the ongoing production and fail to pay for it, while arguing that EP should have stopped payroll before the film was finished.
Thanks to EP's advancing the money, XL/Star had a completed film.' ' Recording Agreements/Fiduciary Obligation. The U.S. District Court for the Central District of California denied Capitol Records' motion to dismiss a breach-of-fiduciary-obligation claim in a royalty suit by musician George Clinton. Clinton v. Capitol Records Inc. 06-7484 FMC. The case involves three agreements Clinton signed with Capitol between 1981 and 1996, including one for Clinton's personal services to remix his prior recordings. Courts typically find that royalties in recording agreements do not give rise to a fiduciary obligation by a label to the artist. In this case, however, the district court found that Clinton sufficiently alleged a joint venture between the parties. The court noted: 'First, Plaintiff has pleaded that the parties 'engaged in a single enterprise ' the creation, production, distribution and marketing of George Clinton sound recordings for mutual profit ' Second, the agreements clearly contemplate that Plaintiff would receive a portion of the profits derived from the exploitation of his recordings, in the form of royalties. Concomitantly, Plaintiff has pleaded that the 'parties ' agreed to share losses of the enterprise' ' [Finally, w]hile some of the provisions in the agreements appear to vest exclusivity of exploitation and other rights in Defendant, it is unclear to what extent Plaintiff, in practice, retained rights of approval.' ' Songwriting/No Partnership Found. The U.S. for the Central District of California granted summary judgment for singer/songwriter Brian Wilson, who was the last defendant following several other rulings in a suit by Mike Love, another Beach Boys founding member, over the distribution by a British newspaper of a CD containing Wilson re-recordings of Beach Boys songs. Love v. The Mail on Sunday, CV 05-7798ABC (PJWX). Love claimed that Wilson breached a fiduciary duty, owed under a purported songwriting partnership between the two artists dating back to the 1960s, by failing to obtain Love's approval for the UK CD. But the district court found: 'Although Plaintiff states repeatedly that he and Defendant were partners, there is an absence of evidence to demonstrate that they were partners when the 2004 Good Vibrations promotion took place. Further, even assuming that a partnership existed at some point, there is no evidence that the partnership required either partner to 'inform' the other when re-recording their co-authored songs.'