Bit Parts

Complaint over Oral Agreement for TV-Network Work Is Dismissed

The U.S. District Court for the Southern District of New York dismissed a suit against George Steinbrenner that alleged the New York Yankees owner failed to live up to an oral agreement regarding the role of plaintiff Robert M. Gutkowski, former Madison Square Garden president, in the creation and operation of the televised Yankees Entertainment and Sports Network. Gutkowski v. Steinbrenner, 09 Civ. 7535(RJS). Gutkowski had met with Steinbrenner and other New York Yankees executives over several years. But District Judge Richard J. Sullivan found: “First, Plaintiff fails to plead adequately the compensation term of the putative agreement, which precludes Plaintiff from asserting his claim for breach of contract. Second, the purported oral agreement is unenforceable under New York's statute of frauds, which bars Plaintiff's breach of contract and quasi-contract claims. Third, Plaintiff's claim for fraudulent inducement fails to state a cause of action independent from Plaintiff's breach of contract claim. Fourth, all of Plaintiff's claims are untimely pursuant to New York's statute of limitations.” On the breach-of-contract claim, District Judge Sullivan specifically noted “that Plaintiff's allegations that Defendant promised that Plaintiff would be 'compensated fairly' or 'fairly compensated,' in conjunction with the allegation that 'one measure' to calculate this 'fair and reasonable value' is a two to three percent equity interest 'traditionally paid to persons providing the kind of services provided by Plaintiff to Defendant,' are insufficiently definite as a matter of law.” The district also further explained: “An unwritten agreement 'to pay compensation for services rendered ' in negotiating the purchase [of] ' a business opportunity ' or an interest therein' is void under New York's statute of frauds [N.Y. Gen. Oblig. L. '5-701(a)(10)].” 

The U.S. Court of Appeals for the First Circuit decided that New York law, rather than the federal Copyright Act, applied to the termination of an exclusive license for a musical composition. Latin American Music Co. (LAMCO) v. American Society of Authors, Composers and Publishers (ASCAP), 08-1498. The publisher for “Caballo Viejo” verbally terminated a 1982 song license that had been given to LAMCO's predecessor. LAMCO argued the termination had to be in writing. The First Circuit explained: “Section 204 [of the Copyright Act], which requires a writing signed by the transferor, however, applies to the transfer or grant of copyright ownership, not to the termination of such a transfer or grant.” The appeals court noted: “Here, the contract was formed in New York and is silent with respect to termination. Under New York law, such a contract remains in force for a reasonable time and is subject to termination upon reasonable notice.” On this, LAMCO asserted that only a written termination constituted “reasonable notice.” But the appeals court found that LAMCO did “not develop the argument in any meaningful way.” Meanwhile, the U.S. District Court for the District of Puerto Rico ruled that in 1995 LAMCO had properly recorded an assignment to it by songwriter Johnny Rodriquez of the composition “Fichas Negras.” Banco Popular De Puerto Rico Inc. v. Latin American Music Co. Inc., 01-1142 (GAG). District Judge Gustavo L. Gelpi explained, in LAMCO's ownership dispute with Universal, that under '205(d) of the Copyright Act: “LAMCO had to provide undisputed evidence that it recorded the transfer in good faith and without notice of any earlier transfers. ' To demonstrate its conformity with these requirements, LAMCO offered the testimony of Raul Bernard ('Bernard'), President of LAMCO. Bernard testified that in compliance with its regular practices, LAMCO conducted a copyright search to locate any prior conflicting transfers of the copyright over the works included in LAMCO's recordation. ' The court found this testimony to be credible.”

Suits Proceed over Use of College Athletes' Indicia

The U.S. District Court for the Northern District of California ruled that former college basketball player Ed O'Bannon stated a prima facie case of a federal antitrust violation in the licensing of player images by the National Collegiate Athletic Association (NCAA). O'Bannon v. National Collegiate Athletic Association, C 09-1967 CW. The NCAA mandates that its educational-institution members require college athletes to sign consent for use of the athletes' right of publicity to promote NCAA events, and for charitable and educational purposes. O'Bannon claims the consent, for which NCAA athletes receive no compensation, is in perpetuity. District Judge Claudia Wilken found that O'Bannon's suit adequately pleaded a conspiracy to restrain trade as well as significant anti-competitive effects in violation of '1 of the Sherman Act. In a related suit, District Judge Wilken refused to dismiss a right-of-publicity suit by former college football quarterback Samuel Keller against Electronic Arts (EA) and the NCAA over the inclusion of athlete likenesses through virtual players in videogames. Keller v. Electronic Arts Inc., C 09-1967 CW. EA claims the videogame elements taken as a whole constitute an allowable transformative use to Keller's California right-of-publicity claims. But Judge Wilken noted “that this [c]ourt's focus must be on the depiction of [p]laintiff in 'NCAA Football,' not the game's other elements.” But on Keller's claim under Indiana law (the NCAA is headquartered in Indiana), the district judge declined to extend liability for use under that state's right-of-publicity law statute, Ind. Code '32-36-1, “to include persons [i.e., in this case the NCAA] who enable right of publicity violations.”