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

On October 27, 2020, the Eleventh Circuit affirmed a district court’s summary judgment ruling that scenes from the Netflix series Narcos did not infringe a Colombian journalist’s copyrighted memoir, agreeing that “no reasonable jury could find that the two works are substantially similar.” See Vallejo v Narcos Productions LLC, No. 19-14894, 2020 WL 6281501, at *9 (11th Cir. Oct. 27, 2020) (per curiam).

Virginia Vallejo, a Colombian journalist, authored the memoir Amando a Pablo, Odiando a Escobar (Loving Pablo, Hating Escobar). In the memoir, Ms. Vallejo recounted her romantic affair with infamous drug trafficker Pablo Escobar and described the rise of Colombian drug cartels. Two chapters of the memoir were considered in the case: “The Caress of a Revolver” and “That Palace in Flames.”

Continue Reading Eleventh Circuit Says Netflix Series Does Not Infringe Copyrighted Memoir

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

A class action lawsuit filed against Kim Kardashian, Floyd Mayweather, and former professional basketball player Paul Pierce earlier this month underscores the need for celebrity endorsers to take care when they approach any endorsement activity in the cryptocurrency space.

The lawsuit alleges that the celebrities collaborated with Ethereum Max, a company offering ERC-20 cryptocurrency tokens (EMAX Tokens), and its executives to engage in a “pump-and-dump” scheme promoting investments in the company’s tokens. The complaint alleges that the three celebrity influencers misleadingly promoted EMAX Tokens to potential investors, touting the ability of investors to make significant returns due to the favorable “tokenomics” of the EMAX Tokens, when in fact the tokens were practically worthless. The class action alleges violations of California’s Unfair Competition Law, California’s Consumers Legal Remedies Act, aiding and abetting, and unjust enrichment/restitution.

Continue Reading “Are You Guys Into Crypto???”: Celebrities Promoting Cryptocurrencies Become Class Action Targets

On December 27, 2020, President Trump signed into law the $2.3 trillion Consolidated Appropriations Act, 2021 (the Act). At over five thousand pages, the Act is an amalgamation of numerous legislative measures, including further stimulus measures to combat the coronavirus pandemic, as well as an omnibus spending bill. Below is a discussion of some of the tax provisions in the Act that may impact the entertainment industry.

Continue Reading Impactful Tax Changes for the Entertainment Industry

One of the oddities of 2020 is that a great many people in the entertainment and media industries became familiar with a complex form of securities offering: the SPAC (Special Purpose Acquisition Company).

Despite having the word “Company” in their name, SPACs are not really companies. Rather, they are piles of money looking for businesses to acquire. In 2020, over $60 billion was raised in the public equity markets by SPACs (more than four times the amount raised by SPACs in 2019), with approximately $4 billion specifically targeted for entertainment and media acquisitions. Since most acquisitions involve leverage (adding debt on top of equity), the amount of cash available to acquire entertainment and media companies due to the SPAC boom will be billions more.

One of the oddities of SPAC-driven M&A activity is that SPACs generally have a two-year time limit in which to either put their cash to work in one or more acquisitions or return it to their public stockholders. This naturally creates a tremendous incentive for those running the SPACs (who typically own highly preferential “founders’ shares” in their SPACs) to close deals before the time limit is up.

When a SPAC raises money, it includes “Risk Factors” in its prospectus in order to alert investors to certain dangers of buying the SPAC shares. The following language, quoted from a recent SPAC prospectus, should be music to the ears of potential acquisition targets: “The requirement that we complete our initial business combination within the prescribed time frame [i.e., two years] may give potential target businesses leverage over us in negotiating a business combination.”

Imagine sitting across the negotiating table from someone who has $100 million of other people’s money in their wallet and – in a twist on Hitchcock’s distinction between suspense and surprise[1]– both you and they know that the wallet will blow up on a certain day two years hence. The SPAC cannot conceal the date by which it must either spend its money or return it to stockholders, because that date is disclosed for the world to see in the SPAC’s public filings with the Securities and Exchange Commission.

Quoting again from a recent SPAC filing: “The personal and financial interests of our founders, officers, and directors may influence their motivation in completing an initial business combination. This risk may become more acute as the 24-month deadline nears.” There will be many such deadlines in 2022.

Venable stands ready to advise entertainment and media companies and executives in connection with all aspects of SPACs.

[1] In a film scene, two people are sitting at a table and neither they nor the
audience is aware that there is a bomb under the table. When the bomb explodes,
it is a surprise. Now suppose that the audience is aware of the bomb, the two
people at the table are not aware of it, and they continue to sit and talk. That is
suspense.