President Bush not “Still the One” Anymore

President Bush’s campaign abruptly halted its use at events of the famous 70’s hit “Still the One” co-written by John Hall for his band Orleans, after Hall announced that no one sought his permission. Copyright is the latest legal flub to enter the truly circus like atmosphere of the 2004 presidential campaign. Use of a copyrighted song in such a fashion (it is a violation of the copyright holder’s public “performance right” under the Copyright Act, among other things) is a slam dunk case of copyright infringement and could, if sued upon, result in an award for damages and back royalties. Hall, a former Democratic legislator, made it clear that he would not allow the song to be used by a campaign that he strongly disagrees with, as he is a declared supporter of John Kerry. If anyone doubts the power of copyright, it is ironic that it would be a presidential campaign. However, copyright applies to everyone equally and the war of political ideology can’t allow its soldiers to fire past the borders of the law.


Kaiser Wahab

Your Business, Your Baby, Your LLC, Properly Managing your LLC to Avoid Losing Liability Protection

So you want to start your own business and can’t decide whether you want to open a corporation, limited liability company (LLC), sole proprietorship, or partnership? Somewhere in the back of your mind - most likely an imprint of your recent and avid lectures of glossy magazines articles catering to entrepreneurs such as yourself - you read or heard about the incredibly advantageous and flexible LLC format.
But do you understand the concept of limited liability and to what extent does the term “limited” extend to cover your business activities?


Olivera Medenica

Radio Industry Closes on the Largest Licensing Deal in US Radio History

The Radio Industry made history this past Monday by closing on a $1.7 billion licensing deal with a group that distributes royalties to songwriters. Traditionally, the radio industry paid a percentage of its revenues to ASCAP (a society representing more than 190,000 songwriters and publishers) for the permission to play songs over the airwaves. Under this new deal, radio stations can now pay a set fee for such music as well as simulcast over the Internet (but stations would still have to pay a fee to the RIAA). This deal is expected to alleviate the prevalent dissatisfaction in the radio industry of having a "silent" partner taking a percentage of revenue without sharing in the risk. As for ASCAP, it is expected to cut down on the significant amount of paperwork required to verify radio station's revenues.

Olivera Medenica

Dean Silvers Producer/Lawyer of Spanking the Monkey Speaks at WRM Offices

On October 19th, 2004, WRM partner Olivera Medenica, as co-chair of NYCLA's Entertainment and Media Committee, held a committee meeting at WRM's offices featuring Dean Silvers as a speaker. Mr. Silver spoke on the essentials of forming a entertainment practice focused on film and the opportunities for production counsel to develop a parallel career in film production. Mr. Silver is an award-winning producer and director and has had his own law firm for over 20 years. His credit include films such as "Spanking the Monkey," "Flirting With Disaster," "Committed," and "Manny & Lo" among others.


Olivera Medenica

CLE--Nuts and Botls of Negotiating a Record Deal--Organized by WRM Partner Olivera Medenica

On October 18th, 2004, WRM partner Olivera Medenica organized a panel on the Nuts and Bolts of Negotiating a Record Deal held before full house at New York County Lawyers' Association's main auditorium. Olivera moderated an informative and lively discussion covering essential facets of the music industry from business negotiations, to relevant contract clauses and the overall direction of the record industry. Ariel Taitz, Senior Counsel at Atlantic Records spoke on the record companies's perspective on negotiating record deals whereas Steve Masur and Mark Anderson of Masur & Associates LLC spoke on the Indie musician's unique perspective on record and artist management contracts. Tom Levy, of The Levy Firm, spoke on the ins and outs of a music publishing deal and his experiences as an attorney with over 45 years of experience in the music industry. The panel followed their discussion with a lengthy question and answer session from an audience composed of entertainment and non-entertainment law practitioners alike.

Olivera Medenica

My Small Corp., My People: What are Buy Sell Agreements and Shareholders' Agreements?

Unlike partnerships, corporations are known for their freely transferable shares, perpetual existence, and decentralized management. Usually found in closely held corporations, the shareholders' agreement (aka buy sell agreement) sets restrictions and boundaries that make corporations resemble partnerships. Covering a broad range of corporate activity, shareholders' agreements also typically place limitations and requirements upon the shareholders which would not exist absent a written understanding (for example, when they get to buy or sell their shares to third parties and/or the corp.) While these agreements contain provisions that overlap with the bylaws, the most significant for a closely held corporation is the provisions relating to alienation of shares.

An important provision in a shareholders' agreement is the statement of the restrictions placed upon a shareholder's right to transfer shares. Generally, it would not be in the best interests of the shareholders of a close corporation if a withdrawing shareholder were able to sell his or her shares to a third party who was not acceptable to the remaining parties.

There are three flavors to such agreements/restrictions:

Entity purchase -- provides that the corporation or partnership will buy back the interest of the departing owner.

Cross-purchase agreement -- an agreement between the shareholders themselves. The shareholders directly purchase the seller's interest a predetermined basis.

Wait-and-see -- As the name implies, such agreements allow shareholders to defer the decision making as to an entity purchase or cross purchase until the most tax-wise strategy is determined.

General Buy-Sell / Shareholders' Agreement Terms:

• The agreement generally requires the shareholder intending to withdraw to give formal notice of his or her intentions to the corporation and the other shareholders.
• The corporation and/or the remaining shareholders are frequently given either a right of first refusal or an option to purchase the shares, or are required to redeem the retiring shareholder's interest.
• Rights of First Offer/Refusal are also typically included in the case of:
o a shareholder's death
o permanent disability
o departure from the corporation as an employee.
• A specific purchase price or a method for determining the price, e.g., book value or an agreed value, must be provided. The agreement may also require the corporation to secure ''key man'' insurance in an amount
sufficient to purchase a deceased shareholder's shares from his or her estate.

Kaiser Wahab

You Gotta Fight for the Right to Copyright

My article on the simple, cost effective, and powerful copyright registration is available at the New York Enterprise Report


EXCERPT:
Nearly every business in the world buys insurance: liability insurance,
health insurance, property insurance, etc. Few would argue that these are necessary costs in protecting your business’s employees and property.

Surprisingly, however, many businesses, especially small ones, neglect to protect their intellectual property such as company logos, brochures and websites — from infringement. Legally protecting a business’s intellectual property is as important as any other form of insurance a company purchases. And while most businesspeople have heard of patents, copyrights and trademarks, few have a sense of which are needed to protect the intellectual property of their company. We’ll demonstrate how copyright registration can offer your business tremendous protection for less than $150.


Kaiser Wahab

Protecting and Recovering your Domain Names on the Cheap

Whether you’re a small business owner or a mega billion multinational, the world wide web is your mutual doorstep. Use a domain name and web site wisely and your footprint is global—sales, information, advertising, content delivery, etc.—all flow from the basic and familiar “www.yournamehere.com”. The domain name is the 21st century property right, yet the legal means to defend it are mysterious to many. Have you built name recognition for your business? Have you registered a domain name that people recognize as an extension of your business’ goodwill? Has someone stolen your domain name or registered a domain name that is confusingly similar? Chances are that you have trademark rights in your business and domain names that need protection. For you, there is an alternative to litigation that is accessible and affordable. Read our article on the Uniform Dispute Resolution Policy...

Kaiser Wahab

Producers Beware of Writers Bearing Ideas--Grosso v. Miramax Affirms Implied Contract Protection of Ideas

The Ninth Circuit's recent Grosso v. Miramax Films 2004 U.S.App. LEXIS 18909 decision provides recourse to writers and others who believe that the basic premise for an idea they have submitted to a production company, studio or producer has been used as the basis for a work without compensation to the source of such idea.

In Grosso the court held that a state law breach of contract claim could be pursued by a screenwriter who alleged that Miramax stole the basic idea for his screenplay, The Shell Game. Set in the world of high-stakes poker, the plaintiff claimed that he had provided the basic idea for the Miramax movie Rounders. Plaintiff originally sued under both breach of contract and copyright, but the court had dismissed his copyright claim finding that his screenplay was not sufficiently similar to Rounders to maintain the cause of action. The breach of contract claim was not predicated on theft of the script itself but instead on the idea embodied in the script, and therefore survived. According to the court, Grosso’s cause of action would be successful if he could demonstrate that an implied contract had been breached between the parties. As such, Grosso would have to demonstrate that he had prepared the work, disclosed it to Miramax under circumstances indicating that Miramax had voluntarily accepted the disclosure knowing that such was given with the understanding that the plaintiff would be compensated in the event that his idea was used.

In addition to the implied contract claim, the decision clarifies a federal preemption issue in regard to the Copyright Act action. State laws claims are preempted by the Act where the work at issue comes within the subject matter of copyright and the claimed rights are equivalent to the exclusive rights provided by the Act. The court broke new ground in Grosso by concluding that his claim presented an extra element not within the scope of the Act and therefore his implied contract claim was not subject to preemption. The extra element at issue being the implied promise to pay the value of the materials disclosed, in the event that such were used.

The decision is good news for writers by providing a cause of action for implied contract. For producers and studios the decision should serve as a reminder of the importance of obtaining releases before reviewing a work or idea, even if the idea is only that, an idea, not formulated into a script. The release should include the following concepts: (1) the writer recognizes that the submission may be identical or similar to materials received by the studio from other sources; (2) use of the idea does not necessarily entitle the writer to compensation given the potential that the idea was received from a third party source; and (3) no fiduciary relationship exists between the parties. While a foul-proof protection against suit, a release serves to put the writer on notice that no implied contract exists between the parties and provides strong evidence of such in the event that the legal is intend taken.

Simon Riveles

SEC Adopts Additional 8-K Disclosure Requirements

The Securities and Exchange Commission (the “SEC”) recently amended Form 8-K to add to the number of reportable events that must be disclosed by domestic public companies and expand the type of content needed to be disclosed. The deadline for Form 8-K filing is now four business days following a covered event. Effective August 24, 2004, these amendments were promulgated in response to Section 409 of the Sarbanes-Oxley Act of 2002 that mandate “real time issuer disclosure” and were intended to “provide investors with better and faster disclosure of important corporate events.”

Along with revising previously required disclosures, the newly promulgated rules add eight new reportable events and specify the disclosure required for each:

• Entry into or amendment of a Material Definitive Agreement not made in the ordinary course of business. Disclosure must be made of the agreements effective date, identity of the parties and a brief description given of the agreement’s material terms and conditions.

• Termination of a Material Definitive Agreement not made in the ordinary course of business where such termination is material to the Company. The disclosure must include the date of termination, the identity of the parties, a brief description of the terms and conditions that are material to the company and any material early termination penalties incurred by the company. Disclosure is not required if such agreement is terminated on its stated termination date or as a result of the parties agreeing that they have fulfilled their respective obligations.

• Creation of a direct financial obligation or an obligation under an off balance sheet arrangement. A direct financial obligation is one involving a long term debt obligation, a capital lease obligation, an operating lease obligation (as these terms are defined under Item 303(a)(5)(ii) of Regulation S-K), or a short term obligation scheduled to mature within one year that is not in the ordinary course of business. Disclosure must be made of the date on which the company becomes obligated and a brief description of the transaction, the amount of the obligation and its material terms.

• Triggering events that accelerate or increase a direct financial obligation or an obligation under an off-balance sheet arrangement. A brief description must be made of the triggering event, including its date, and a description of the transaction under which the financial obligation was established and is increased or accelerated. The amount of the direct financial obligation must be disclosed and the terms of payment or acceleration, if applicable.

• Costs associated with exit or disposal activities. Disclosure is required when a company’s board of directors, board committee or authorized officer commits the company to an exit or disposal plan or otherwise disposes of a long-lived asset or terminates employees under a plan of termination in accordance with specified accounting standards and material charged will be incurred under GAAP. The company must disclose the plan or termination and the reasons for the charge, the expected completion date, and the estimated total amount of the charge expected to be incurred, and the amount of the charge that will result in future cash expenditures.

• Material Impairments. Disclosure is required if a company’s board, board committee or authorized officer concludes that a material charge for impairment is required under GAAP with respect to one or more assets. The filing must describe the impaired asset, the circumstances leading to the conclusion and similar estimates.

• Notice of de-listing or failure to satisfy a continued listing rule or standard: This requirements mandates that a company disclose receipt of notice from a national securities exchange or market that a class of equity securities is no longer satisfying listing requirements and has applied to the SEC to delist a class of its securities. A company must provide the disclosure even if it has the benefit of a cure or grace period.

• Non-reliance on financial statements. Disclosure must be made in the event that a company concludes that any of its previously issued financial statements no longer can be relied upon due to an error.


Simon Riveles