Monday, April 14, 2014

Sony Awarded $675,000 for Copyrighted Music Downloads


Man with computer copyrighted music downloads


For many years now, the battle has raged on between music companies and internet users that seek to download and obtain copyrighted product for free. On one side, the legitimate argument that a product that is otherwise sold is being taken, or stolen, when downloaded for free. 

On the other side looms the argument that the internet is an arena of free reign in which the music companies are out of line for being concerned with. 

In the recent ruling of Sony BMG Music Entertainment V. Tenenbaum USCA, First Circuit June 25, 2013, the courts certainly affirmed the legitimacy of the music industry’s complaints.


Over the course of several years, Joel Tenenbaum downloaded as many as 5,000 individual songs online. This activity continued despite warnings from many parties including Tenenbaum’s own family members, friends, his college, and even a group of music companies. Eventually, Tenenbaum would face civil suit from Sony BMG Music Entertainment.


The subsequent suit went in Sony’s favor, with the jury deciding on an award of $675,000 for the plaintiff. This figure was actually a representation of the findings that Tenenbaum had also illegally distributed 30 songs, each having a jury-attached value of $22,500. Regardless, the total amount of $675,000 was far below the maximum allowable award that could have been awarded.


However, Tenenbaum sought an appeal, contesting that his constitutional rights were being violated by such a decision. Tenenbaum attempted to sway the appeals court in the direction of a previous case, BMW of North America v. Gore, alleging due process problems with the previous decision, based on the BMW case outcome. The court however, felt that the previous Gore case could not parallel copyright law context being measured in this current case.


Another previous Supreme Court case, St. Louis, I.M. & S. Ry. Co. v. Williams, was also a matter of precedence for the court to follow. In this previous case, the standard was set in assessing the constitutionality of statutory damages awarded. For the sake of Sony BMG Music Entertainment V. Tenenbaum, the overseeing appeals court correctly upheld the $675,000 ruling, finding that in light of the defendant’s actions, this award amount was proportionate to the offense, and thus constitutionally correct.

Fran Perdomo is a NYC Business Lawyer who focuses on Entertainment Law and protecting the rights of Musicians and Entertainers.
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Saturday, March 29, 2014

New York to Overhaul the Not-for-Profit Corporation Law



The New York State Attorney General has worked alongside leaders in nonprofit communities for years as a means to make changes to the Not-for-Profit Corporation Law. They are aiming to ensure that nonprofits provide fair compensation to their employees, as well as improve their management structures and make all of their transactions accessible to the public. These proposed changes are looking to go into effect on January 1, 2014.


Nonprofit reform has been an issue of heated discussion for many years now, especially when considering the high amount of revenue that nonprofits bring into New York State. These organizations have long needed better protections against fraud within their companies and have also needed to instate stronger whistle-blower protection policies, so individuals who attempt to expose misconduct or illegality within the company can avoid social or career persecution. 

Nonprofit leaders have been strongly in favor of this legislation, as it tries to simplify procedures that have long been considered cumbersome and pedantic. The legislation will also introduce improved technology into the nonprofit sphere, modernizing nonprofits without forcing them to sacrifice funds in other arenas.


Key provisions of the Nonprofit Revitalization Act include:

  • All companies in the country have recently had to deal with staff reduction and decreases in budgeting. As a result of this, incidents of fraud and theft have increased within companies. Nonprofits have been hit the hardest with these misfortunes and the bill aims to revitalize these organizations by establishing more succinct internal controls and derailing traditional power structures that have led to corruption.

  • This legislation will prevent any individual who serves as Chair of the organization's Board of Directors from also being a company employee. This provision aims to promote independent leadership within nonprofits, rather than isolating a select few individuals to have full reign over the company.

  • If any individual who owns 35 percent or more of the company has a vested interest in a certain transaction the company is making, the Board will be legally obligated to consider the advantages of other transactions.

  • Mandatory auditing will be instated, by which an auditing committee will need to be established for each company. This will also aid in working through potential conflicts of interest within the company.

  • Definitive conflict of interest policies must be instated, including what constitutes a conflict of interest and how such situations will be resolved.

  • Mandatory whistle-blower policies will need to be created. Any organization with more than 20 employees and an annual revenue greater than one million dollars will be required to adopt said policies. These procedures will aim to protect the companies against retaliation from whistle-blowers, as well as instill frameworks for reporting suspected misconduct.
  • The bill will also attempt to eliminate some of the hurdles that come along with making administrative changes within nonprofits.
  • One of the main concerns of nonprofits has been the two-step approval process in place for all nonprofit mergers. The new law would allow the Attorney General to serve as an alternative approval to the Supreme Court, so as to allow these mergers to happen in a time-efficient manner.

  • For all real estate transactions, the law will require a Board approval of two-thirds, rather than the previous requirement of majority rule.

  • Presently, many nonprofits have been required to obtain the approval of the State Education Department before incorporation. The types of companies that will be required to gain approval will be minimized and approval will only need to be granted within 10 days of incorporation.

  • The four types of nonprofits will be eliminated in lieu of two types: charitable and non-charitable. Organizations formed for both charitable and non-charitable purposes will be considered charitable corporations in the eyes of the law.

  • Nonprofits will have full access to electronic means of communication, including e-mail and videoconferencing.

  • This law will change the requirement to obtain an audit from a gross revenue of 250,000 dollars to 500,000 dollars.

The new law will stress the importance of granting fair, reasonable compensation to all nonprofit employees for the services they are performing. A compensation committee will need to be created as a means to consistently ensure that compensation is adequate. Any employees making greater than 150,000 dollars will be reviewed.

Fran Perdomo is a leading NYC Business Lawyer, who focuses on entertainment law and commercial litigation. Learn more by visiting her website at Business-LawyerNYC.com
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Sunday, April 7, 2013

When a Musician or Artist Should File for Copyright Protection

A Professional Singer who needs to file for Copyright Protection
An artist can have their music registered within 3 months.
The world is constantly ringing with the emotion-filled sounds of music. Whether the music is naturally occurring through the voices of birds, amplified by the mechanical bellies of mankind's progressive machines, or created and executed through the genius of the human spirit, every sound, tone, pitch, and rhythm is unique.

While some of these kinds of sounds may make you want to grab your ears and beg for quiet, some melodious music can make even the most cynical person wish that the human ear could experience an even wider spectrum of sound.

However, irrespective of one's subjective feelings regarding a particular sound or song, the creator or creators of all types of music regularly seek to ensure that the law protects the fruits of their labor from commercial and artistic exploitation.

For the artist, what starts as an original idea of musical notes and lyrics eventually flows to a tangible medium of expression such as paper-the "musical composition"-and then bursts from the belly of instruments to a medium for recordation known as the "sound recording."

These two instrumental components of a musical idea combine and create the anatomy of a legally protectable song. This evolving idea has become "fixed" on these tangible mediums of expression and the United States Constitution entitles the artist to immediately register their fixed idea to prevent all others from using it without their consent. This area of the law is called copyright and grants a limited duration monopoly to encourage innovation in the world of creative expression by granting an exclusive right to perform, reproduce, sell, advertise, and promote your art.
  
Exclusivity of artistic and commercial control is a beautiful thing; but, like all good things, it must come to an end. This end will most likely not arise until 70 years after the creator's death or 95 years after the first publication-or the first public distribution-of the new song depending on whether the author is named, anonymous, pseudonymous, etc.  In other words, you are considered the owner of your musical composition and recording for a sufficient, yet definite period of time.

To ensure that your legal status as the rightful owner of your musical composition and recording continues without interruption, registration with the United States Copyright Office ("Copyright Office") is a necessity.

Copyright Protection

While copyright ownership vests immediately with the artist the moment the song is written down or recorded, registration of the copyright provides greater protection in court when faced with trying to establish ownership of your interests in a song. For just $35.00, an artist can effectively have their music registered within three months. A streamline application allows for the registration of both the musical composition and sound recording for one fee.

While a song's composition and sound recording make up the anatomy of a song, producing, publishing, and licensing agreements can be likened with exercising the body of the song by seeking to increase productivity. Once an artist's registration process is complete, there are plenty of agreements to consider. It is likely that the artist was not in charge of writing the music, recording the music and producing the music simultaneously.

This process often involves music producers who seek to maximize the creative aspects of an artist's work and handle various administrative tasks associated with recording the music in the first place. Artists should be aware of the different forms of compensation generally given to producers such as granting them royalties on the albums sold or granting a one time flat fee for all of their work.

Also, licensing agreements can be great revenue-generating agreements that allow others use of your song, either in a movie, TV show, or commercial, for a limited period of time with your consent. Licensing agreements can be lucrative and also work to promote the artist's music simultaneously.
  
However, acquiring licensing opportunities is not as easy as it sounds. Most artists remain focused on the creative aspect of their music rather than the business aspect. Due to this fact, music publishing agreements between an artist and a music publisher generally call for a transfer of ownership of the artist's copyright in their music in exchange for the publisher promoting and soliciting different types of revenue-generating deals for the artist. The proceeds of these deals are then split between the publisher and the artist.
  
These post copyright registration considerations are complex and require a greater deal of attention than the brief descriptions above. Please check back with us and read our next post for more information on the complexities of music producing, licensing, and publishing.


Fran Perdomo, Esq.
NYC Entertainment Lawyer
Perdomo Klukosky & Associates
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