Recently, California Governor Gavin Newsom raised some eyebrows when he announced that state government officials anticipated publishing guidelines for the reopening of Hollywood production facilities by Memorial Day. The Governor’s announcement took many in the industry by surprise, given that producers and unions continue to wrestle with the legal obligations and operational complexities involved in safely reopening film and television productions with the ever-present threat of COVID-19. Faced with this monumental task and the fluid nature of the pandemic, most production houses do not anticipate any return to work before July 1. Regardless of the precise timing of Hollywood’s return to work, the various union collective bargaining agreements (Basic Agreements) are clear that producers and unions will share responsibility for ensuring a safe and healthy workplace for industry employees. Given the outsized roles that the Hollywood Guilds play in shaping industry employment policy, strategic labor relations will be key to the success or failure of producers’ reopening plans. Continue Reading Back to Business: Hollywood Producers Navigate the Choppy Waters of Reopening Plans and Labor Relations

Employers of U.S. residents who are remaining in Europe while projects are shut down because of the COVID-19 pandemic might benefit from a new taxpayer-friendly approach. The new protocol forgives days spent abroad because of COVID-19 travel restrictions, as part of a foreign-country corporate residency analysis.

On March 23, 2020, the Irish Revenue Commissioners (Irish Revenue) issued Revenue eBrief No. 46/20, which announced Irish Revenue will adopt a taxpayer-friendly approach to corporate residency determinations for companies whose employees, directors, service providers, and/or agents are unable to travel as a result of recent government-imposed travel restrictions. This guidance came at the same time as similar announcements by the Organization for Economic Cooperation and Development (OECD) and several other countries. In particular, on May 20, 2020, and May 25, 2020, France and Germany, respectively, announced bilateral agreements with neighboring countries to ignore the presence of employees who must work outside of their country of employment due to government-imposed travel restrictions. Taken together, these policies suggest a universal willingness among international taxing authorities to quickly respond to the COVID-19 crisis and accommodate taxpayers as they navigate the evolving commercial realities of their businesses. Continue Reading Working on a Production in Europe? Take Note of New Taxpayer-Friendly Residency Approaches in Light of the COVID-19 Crisis

The perfect addition to any project is music. Whether you are making a video advertisement for your product; including music in your posts on your company website, TikTok, or YouTube; posting an at-home workout video for your clients; using music at corporate events; or playing music at your bar or restaurant – music is a vital part of society. Music is also the most common reason your content may be muted or taken down from social media, in addition to being exposed to potential liability for copyright infringement and related monetary damages. When you use someone’s music without their permission, absent a few extremely limited exceptions, you are infringing on their copyright.1

For the vast majority of music uses, you will first need to obtain permission. In this article, we lay out some fundamentals to assist in determining the type of license an average company would need and some potential alternatives. Bottom line: when you are planning and budgeting for music in a project, make sure you get the proper rights and permissions in place before pressing “Play.”

Continue Reading Conducting Your Way Through Music Licensing: The Most Common Issues

In its second copyright opinion this term, the U.S. Supreme Court held 5–4 that the “government edicts doctrine” prevents states from owning copyrights in annotated codes.  See Georgia et al. v. Public.Resource.Org, Inc., No. 18-1150, 590 U.S. ___ (Apr. 27, 2020).  Chief Justice Roberts authored the majority opinion, and Justice Thomas and Justice Ginsburg penned dissents.

The Official Code of Georgia Annotated (OCGA) contains every current Georgia statute (i.e., all of Georgia’s laws), along with non-binding annotations explaining each statute (e.g., summaries of judicial opinions applying the statutes or references to relevant secondary sources).  The OCGA is created by Georgia’s Code Revision Commission, which is a part of the state’s legislative branch.  By virtue of the Commission’s work, the state of Georgia claimed a copyright in the annotations within the OCGA—i.e., the parts of the OCGA other than the statutes themselves.  Thus, when Public.Resource.Org (PRO) posted the OCGA online and distributed copies to others, Georgia sued PRO for copyright infringement. Continue Reading SCOTUS Says States Cannot Copyright Annotated Codes

California employers beware. In Tilkey v. Allstate Insurance Co., No. D074459 (Cal. Ct. App. Apr. 21, 2020) (Order), California’s Fourth District Court of Appeal recently affirmed a judgment on a theory of self-published defamation. In doing so, it held that the plaintiff, a former life insurance salesman for Allstate, was justly awarded damages based on his compulsion to recite the allegedly false allegations Allstate made for terminating his employment to prospective employers. Continue Reading California Court Affirms Self-published Defamation Judgment

Last week, it was announced that eminent entertainment law firm Grubman, Shire, Meiselas and Sacks (Grubman) was the victim of a significant cyberattack. Current reports suggest that in addition to encrypting the firm’s data, so that the firm cannot gain access to its own files, the perpetrators made away with a massive amount of privileged data, including contracts, nondisclosure agreements, phone numbers, email addresses, and private correspondence of the firm’s clients. The attack has garnered international attention for the high-profile individuals potentially affected and the large public ransom demand, which stands at $42,000,000 as of this writing.

The attack involved the use of well-known ransomware (called REvil/Sodinokibi), which has been used in a number of other high-profile cyberattacks, such as the one on foreign exchange firm Travelex. The identities of the attackers are not publicly known, but the track record of REvil’s operators suggests they are sophisticated and experienced. The perpetrators have released a handful of documents to prove the validity of their claims, and sources suggest that they will publish the data in installments if their demands are not met. Continue Reading The Grubman Ransomware Attack and What It Means for the Cyber Risks That You May Face

On May 13, 2020, reality TV star Maurice “Mo” Fayne was arrested and charged with federal bank fraud by the U.S. Department of Justice in connection with his alleged misuse of loan proceeds obtained through the Paycheck Protection Program (PPP). Fayne submitted his PPP application in April, on which he claimed his company, Flame Trucking, had 107 employees and a monthly payroll of about $1.5 million. Fayne obtained over $2 million in funding from the program under the pretense of using the funds to support his trucking company. Instead, Fayne allegedly spent the money on $85,000 in jewelry, including a Rolex Presidential watch, a Rolls-Royce Wraith, and $40,000 in child support. Continue Reading TV Star Arrested for Misuse of Stimulus Funds

With much of the entertainment industry currently at a standstill as a result of rampant production shutdowns, now may be a good time for those who are finding themselves idle to use this extra time to take stock of their financial situation and plan for the future.  Economic factors, such as the current depressed financial markets and historically low interest rates, have combined to impact and drive a variety of estate planning techniques.  While the current uncertain environment may – understandably – cause many to hesitate to engage in a substantial family gifting program, these economic conditions present a unique opportunity for families to pass a significant amount of wealth to younger generations with minimal transfer tax exposure.  We recommend contacting your Venable Wealth Planning counsel to discuss the techniques that may provide the most viable opportunity for your particular circumstances.

This post provides a high-level discussion of those estate planning techniques that present the greatest potential for an upside when implemented during a state of declining financial markets combined with historically low interest rates. Continue Reading Estate Planning Opportunities for the Entertainment Industry in a Low Interest Rate Environment

For many entertainment businesses, the recent congressional stimulus has proved to be a smash hit. The IRS, however, is a tough critic and is looking to claw back some of that money by disallowing deductions associated with such stimulus funds. On April 30, 2020, the IRS released Notice 2020-32 (the Notice), which provides some clarity regarding the tax treatment of loans received pursuant to the Paycheck Protection Program (PPP). Specifically, the Notice clarifies that any expenses paid with proceeds from forgiven PPP loans are not deductible for federal tax purposes. In an earlier post, we raised the question of whether such a deduction would be allowed; now the IRS has answered, but it may not get the last word on this issue. Continue Reading No Deductions (Yet) for Business Expenses Paid with Paycheck Protection Loans

The Coronavirus Aid, Relief and Economic Security Act (the CARES Act) created the Paycheck Protection Program (PPP), pursuant to which certain taxpayers are eligible to obtain low-interest loans to enable continued operations during the coronavirus pandemic. If a taxpayer spends the PPP loan on certain enumerated expenses, including, among other things, payroll costs and rent, all or a substantial portion of the PPP loan will be forgiven. Participation in the PPP, however, has some critical tax impacts that should be considered. Below is a summary of some of such tax impacts:

Continue Reading Tax Impact of the Paycheck Protection Program