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 The works consist of fourteen silkscreen prints and two pencil illustrations based on an unpublished photo of musical artist Prince taken by professional photographer Lynn Goldsmith.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 Vanity Fair then commissioned Andy Warhol to use that unpublished photo to create an illustration for an article about Prince.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

Taxpayers who owe quarterly estimated taxes must make such payments by April 15,2021, notwithstanding the extended filing deadline this year. On March 17, 2021, the IRS announced a one-month extension of the tax filing deadline for individuals from April 15 to May 17 of this year. The rationale, per IRS Commissioner Chuck Rettig, was that the IRS wanted to “continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities.” The IRS followed this announcement with Notice 2021-21, which confirmed the May 17 filing deadline and extended it to certain other filings.

In its March 17 announcement, the IRS admonished taxpayers that the deadline for estimated tax payments remained April 15. On April 8, 2021, the IRS reaffirmed its position and issued a bulletin reminding taxpayers that estimated tax payments are still due by April 15. Accordingly, accountants and business managers with clients that are expected to owe estimated taxes this quarter are urged to make such payments as soon as possible.

To learn more about Venable’s Business Transactions Tax practice, click here.

Many celebrities balance maintaining their brand by staying in the public eye with privacy in their personal life. A new California law, however, has some business managers and celebrities concerned about maintaining their privacy. With little fanfare, Governor Newsom signed into law Senate Bill 592 (the Bill) on September 28, 2020, which may raise eyebrows this year as business managers and taxpayers navigate the 2020 tax reporting season. Specifically, the Bill requires the California Franchise Tax Board (FTB) to revise the California resident income tax return form to include a line item for the taxpayer’s address of their principal residence and their county of principal residence. In the past, high-profile taxpayers often used their business manager’s address when filing tax returns, to maintain privacy and security. The Bill, however, takes effect this year, so that California residents must now disclose the address of their principal residence on their 2020 California income tax returns.

Continue Reading New Disclosure Law for California Taxpayers: A Huge Breach of Privacy? Probably Not.

On March 11, 2021, a piece of digital art sold for $69,000,000.00 (yes, sixty-nine million United States dollars) at Christie’s Auction House (online, of course). That happened roughly five months after its original sale, meaning that the piece created by the artist known as Beeple sold for over 100,000% of its original price ($66,666.66), pushing Beeple to become one of “the top three most valuable living artists” according to Christie’s. Other than the price, what makes the Beeple sale noteworthy is the fact that the work was in the form of an NFT.

What Is an NFT?

NFT stands for “non-fungible token,” or a bit of digital code written onto a blockchain (also called distributed ledger technology). Through an NFT, a digital asset like a piece of art, a video clip, or the very first Tweet can be permanently registered on a blockchain forever. Ownership and provenance can be verified instantly. For the first time, digital scarcity can be achieved for digital items and, with it, the promise of higher prices for digital assets, outside of cryptocurrencies like Bitcoin. You might pay a small fortune for an authentic Ted Williams rookie year baseball card, but not for a reproduction made today that is physically identical in every respect. The same idea is fueling a boom in NFTs sold by artists, athletes, and others, because the digital item is registered and its quantity limited. As a result, the owner has “the one” (or one of 100 limited edition items, for example) and can prove it. In this context, ”digital” may now mean scarce, and therefore valuable.

Continue Reading NFTs Promise Digital Scarcity Through the Blockchain for Artists, Athletes, and Celebrities – and an Abundance of New Legal Issues

Venable’s elite Trademark Prosecution and Counseling Group recently announced the launch of its Wellbrand service, an innovative naming solution that leverages the firm’s trademark-law intelligence to accelerate the process of finding effective brand names. Currently available only to established clients of the Trademark practice, the Wellbrand service bridges the gap between marketing needs and legal know-how, drawing on a deep well of experience to identify names that are more likely to avoid refusal by the USPTO and challenge by third parties. How can we help you “get to yes” faster? Visit Venable.com/Wellbrand to learn more.

Venable partner William Briggs was recently nominated by Los Angeles Mayor Eric Garcetti to serve on the city’s Board of Police Commissioners. In this Q & A, Briggs discusses his journey from public high school to a prestigious law school, the legal accomplishments he’s most proud of, including his previous advocacy on behalf of disadvantaged children, and what he hopes to accomplish in his new role.

You were raised in a single-parent household in Los Angeles, where you attended a public high school. How did you get from there to one of the country’s top law schools?

I was lucky to have had some very good role models and teachers. One of whom was a biology teacher who I guess recognized that I had some potential and then helped me at an early age to get a job in a laboratory at UCLA. While there I worked for a doctor of Armenian descent who not only exposed me to a completely different culture, but also to a different way of thinking. Basically, he taught me that you don’t have to let the circumstances of your life inhibit your ambition. Like-minded friends of my mother told me the same thing, and my aunt, Dr. Dorothy Height, a civil rights activist, also strongly encouraged me to pursue an education. She had a connection with Bethune-Cookman College, a historically black college in Florida, so that’s where I ended up going.

Continue Reading Entertainment Attorney William Briggs Discusses his Journey to a Successful Legal Career

The Supreme Court of New York recently denied a motion to seal the record in the case of Choi v. Solomon, stating that “harsh words are not a basis to seal a case, especially where it appears both sides have no qualms about tearing each other down.”  Decision and Order on Motion at *4, Choi v. Solomon, No. 001-654666 (Sup. Ct. N.Y. November 6, 2020).

The case was brought by Yukyung Choi against Scott Solomon for ten different causes of action, including intentional infliction of emotional distress, breach of contract, and defamation.  Choi claims that from 2010 to 2019, she lived with Solomon in a platonic relationship, paying for their apartment without contribution from Solomon and supporting his “lavish personal expenses.”  Id. at *1.  The relationship eventually deteriorated and Choi sought to distance herself, and additional plaintiff Eric Reiner, from Solomon.

Continue Reading New York Supreme Court Upholds Presumption of Public Access to Judicial Proceedings

New York has protected the rights of living persons to control the use of their name and likeness in commerce for over one hundred years. The existing right to privacy gives any person the right to sue for an injunction or damages if their name or likeness is used within New York for advertising or trade purposes without their written consent. See NY CRL § 51. These privacy rights dissipate at death. But starting in May of this year, New York’s new right of publicity statute will grant successors of certain individuals a right of publicity after death. This brings New York’s statute closer to that of California, which has recognized postmortem rights since 1985. The statute also grants new rights concerning the use of deepfakes in sexually manipulated content. More on that below.

The postmortem part of the statute protects only certain individuals who die as New York domiciles and only if they die after the statute goes into effect on May 29, 2021 (i.e., no retroactive effect). The rights that are granted last for 40 years after death and can be transferred by contract, license, trust, will, or another instrument. The bill differentiates between “performers” and “personalities.”

Continue Reading New Yorkers Receive Postmortem Rights and Protection Against Digitization of Sexually Manipulated Content in New Right of Publicity Statute

A panel of the Ninth Circuit Court of Appeals recently affirmed the Nevada District Court’s ruling that the play Jersey Boys did not infringe plaintiff’s copyright in the autobiography of Tommy DeVito – a member of the Four Seasons – as the play did not copy any protectable aspects of the autobiography. See Corbello v. Valli, 974 F.3d 965 (9th Cir. 2020).

The Tony Award-winning Jersey Boys musical tracks the history of the chart-topping quartet the Four Seasons. The play follows band members Frankie Valli, Bob Gaudio, Nick Massi, and Tommy DeVito from their meager beginnings singing under streetlights in New Jersey through their meteoric rise to stardom with songs such as “Walk Like a Man,” “Big Girls Don’t Cry,” and of course “Sherry.”

Continue Reading Ninth Circuit Panel Adopts “Asserted Truths” Doctrine in Holding Jersey Boys Musical Does Not Infringe Copyright