With technological innovation continuing to transform how companies do business, more and more entities are looking to forge strategic alliances that leverage the commercial uses of intellectual property and other intangible assets. In this Q and A, Jim Nelson and Bill Russell, co-chairs of Venable’s Technology, Media, and Commercial (TMC) group, discuss their extensive experience facilitating such alliances; how innovation is impacting different industries; and some of the most exciting new developments in the field.

Q: What are strategic alliances and how do they work?

Bill:  There can be infinite variations, but in its simplest form a strategic alliance is where one company has a particular service or product, another company has a particular service or product, and they both recognize that if they were to collaborate and put elements of those together, they can differentiate themselves in the marketplace, improve their existing product or service offerings, or create something entirely new. That’s where people like Jim and me come in. We understand how these relationships are built, we have the experience to know what generally works and what doesn’t work, and we have the skill to guide the parties in achieving their objectives, both collectively and individually, and to structure these objectives into a deal.

Continue Reading The Increasing Need for Strategic Alliances: A Conversation with Bill Russell and Jim Nelson

Two Illinois state courts recently dismissed defamation claims related to an online article and a disciplinary proceeding conducted by the Champaign Illinois Kennel Club.  Both courts found that the defendants were immunized because the statements in dispute were unactionable opinions and were protected under the innocent construction rule.  See Law Office of John S. Xydakis, P.C. v. Reiland, No. 2020 L 3990 (Ill. Cir. Ct. May 18, 2021); Boyd v. Crumpler, No. 2020-L-000201 (Ill. Cir. Ct. May 20, 2021).

The first suit, Law Office of John S. Xydakis, P.C. v. Reiland, arose from an article written by Jordyn Reiland and published by the. Reiland, slip op. at 1.  The report outlined Judge Margaret Ann Brennan’s remarkable imposition of a $1 million sanction against Marshall Spiegel and his lawyer, John Xydakis.  Id.  Judge Brennan issued the sanction pursuant to Illinois Supreme Court Rule 137, which is designed to prevent and discourage the filing of frivolous and false lawsuits.  Id. at 1-2.  The Circuit Court of Cook County found that the legal news website could not be sued for allegedly defamatory statements that are reasonably interpreted as opinions.  Id. at 1.

Continue Reading Opinion Defense Dashes Two Recent Illinois State Court Defamation Decisions

On June 10, 2021, the Texas Court of Appeals held that a trial court had erred in denying motions to dismiss brought by KHOU-TV and the Houston Chronicle under the Texas Citizens Participation Act (the TCPA), the Texas anti-SLAPP statute.  The three-justice panel held that the plaintiff, Status Lounge, failed to show that the news outlets’ reports on a shooting at its bar were not substantially true. See KHOU-TV, Inc. v. Status Lounge Inc., No. 14-19-00393-CV, 2021 Tex. App. LEXIS 4584 (Tex. App. June 10, 2021).

Police reports of the 2016 shooting described an altercation between the “owner” of the bar and a band member over the duration of the band’s performance. The police reports went on to say that the “manager” of the bar shot the band member and fled the scene. Both KHOU-TV and the Houston Chronicle published articles stating that the owner shot the band member. The KHOU-TV article also stated that the owner was taken into custody, while the police reports were silent on this matter. Status Lounge sued the media defendants for libel and business disparagement. Both outlets filed motions to dismiss under the TCPA.

Continue Reading You Can’t Handle the (Substantial) Truth: Texas Court Sides with Media Defendants in Libel Case

A recent decision in the Eleventh Circuit Court of Appeals may have tax implications for talent who conducts significant endorsement or brand ambassador activities. Generally, endorsement deals often have two components: (1) endorsement services (e.g., public appearances, social media) and (2) licensing the talent’s name and likeness (e.g., for use on print and digital advertisements). In other relevant tax contexts, income attributable to endorsement services has been treated as services income, while income attributable to licensing of one’s name and likeness has been treated as a royalty. See, e.g., Goosen v. Comm’r, 136 T.C. 547 (2011) (holding that income arising from licensing one’s name and likeness constitutes royalty income for purposes of determining U.S. source income). In the limited context of determining whether income is qualified business income for purposes of IRC 199A, however, income attributable to licensing one’s name and likeness is treated as disqualified service income. But is name and likeness income subject to self-employment tax?

Continue Reading Should Talent Pay Self-Employment Taxes on Income Associated with their “Brand”?

How do motion picture studios protect their valuable content from piracy during distribution and exhibition in theaters? A recently awarded Disney patent aims to tackle such issues using blockchain, the distributed ledger technology underpinning popular cryptocurrencies.

The patent, “Blockchain Configuration For Secure Content Delivery” outlines the workings of a blockchain-based content distribution system for delivering, monitoring, and controlling playback of audiovisual works delivered to movie theaters. Through such a system, Disney may achieve an advancement in tackling the ongoing problem of piracy leaks when movies are released in theaters.

Continue Reading Disney Patents Blockchain-Based Anti-piracy Movie Distribution System

Venable is pleased to announce that Hemanshu (Hemu) Nigam has joined the firm as a partner in the eCommerce, Privacy, and Cybersecurity Practice in its Los Angeles office. Mr. Nigam has nearly 25 years of experience in solving online security, privacy, and safety challenges facing celebrities, pro athletes, high-net-worth individuals, corporations, and start-ups, as well as government and law enforcement. He has extensive experience conducting end-to-end cyber assessments and protection and often provides counsel on cutting-edge online privacy and security issues. Mr. Nigam seeks justice for entertainment and sports professionals who are cyberstalked, hacked, or harassed, or who have fallen victim to other forms of online attacks.

Continue Reading Venable Expands Service Offerings for the Entertainment and Media Industry with the addition of Privacy and Cybersecurity Veteran Hemanshu Nigam

There is more demand for content than ever, and media and entertainment companies face a wide variety of challenges that come along with the increase in production and distribution of content. In-house and outside counsel for media and entertainment companies need a working knowledge of how to deal with insurance issues that arise in their business, including the types of insurance policies that may cover the legal risks they face, and how to navigate the issues that arise when dealing with insurers, such as selection of counsel, allocation between covered and uncovered claims, and who controls the settlement of a claim.

Continue Reading Join Us on July 14 for a Discussion on Entertainment and Media Liability Claims

This article was previously published on Venable’s All About Advertising Law blog.

Background

Advertisers, e-commerce websites, affiliate networks, and publishers each play a large role in the development of the Internet. One reason they have been able to do so is Section 230 of the Communications Decency Act of 1996 (CDA), which immunizes online interactive services from liability arising from third-party content on their platforms. The CDA does so in twenty-six words:

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Through this immunity, the CDA allows online services to host the speech of others, without assuming responsibility for what those users may say or do. No one disputes the premise that Section 230 fosters free expression and the creation of vibrant marketplaces for advertisers and merchants to efficiently and effectively reach consumers. Recently, however, confusion and controversy have arisen as to exactly who and what Section 230 does and does not protect, leading to divisions among court decisions and to calls for legislative “overhaul.” A quick review for merchants, advertisers, agencies, and affiliate networks seems desirable.

Continue Reading An Advertiser’s Guide to Section 230 of the Communications Decency Act

The latest challenge to the Affordable Care Act (ACA) has been unsuccessful. On June 17, 2021, the Supreme Court issued a 7-2 decision in California v. Texas, 593 U.S. ____ (2021), dismissing the case for the plaintiffs’ lack of standing to sue. California v. Texas challenged the constitutionality of the ACA, but the Court did not rule on this issue and, instead, dismissed the case on procedural grounds. Last year, some taxpayers filed protective claims with the IRS to preserve their right to a refund for 2016 (for statute of limitations purposes) in the event that California v. Texas led to the ACA being struck down; in the entertainment industry, many business managers and accountants filed such protective claims on behalf of their clients. The Court’s ruling means that there will be no refunds with respect to such protective claims.

For our previous article discussing the filing of protective claims with respect to California v. Texas, see here.

Venable continues to monitor the latest developments in the law and stands ready to advise. To learn more about Venable’s Tax practice, click here.

In a case involving Andy Warhol’s works known as the “Prince Series,” the U.S. Court of Appeals for the Second Circuit reined in the fair-use defense for visual art that is based on copyrighted photos. The works consist of fourteen silkscreen prints and two pencil illustrations based on an unpublished photo of musical artist Prince taken by professional photographer Lynn Goldsmith. In its ruling, the Court clarified that a secondary work must convey a “‘new meaning or message’ entirely separate from its source material” when it does not “comment on or relate back to” the copyrighted material. Using that clarification in its fair-use analysis, the panel found that Warhol’s Prince Series was not fair use. The panel also found that the Prince Series works are substantially similar to Goldsmith’s original photograph.

In 1981, Goldsmith took twenty-three photos of Prince, held a copyright in each of those photos, and licensed one to Vanity Fair as an “artist reference.” Vanity Fair then commissioned Andy Warhol to use that unpublished photo to create an illustration for an article about Prince. But Warhol didn’t stop there. Without Goldsmith’s permission, Warhol used the photo to make fifteen more works, creating the Prince Series.

Continue Reading Second Circuit Finds Andy Warhol’s Use of Prince Photograph Not Fair Use