Guide Through the Legal Jungle

Resource on Rights Clearance & Copyright. What’s New in the Updated & Expanded 2nd Edition

  THE PERMISSION SEEKER’S
GUIDE THROUGH THE LEGAL JUNGLE®
Clearing Copyrights, Trademarks and Other Rights for Entertainment and Media Productions

Second Edition, Updated & Expanded

(Read Complimentary Book Excerpt Here.)

The Permission Seeker’s Guide Through the Legal Jungle explains the rights clearance process and provides detailed guidance for the legal use of music, artwork, names, film clips, and other protected materials.

This Second Edition is completely updated for 2017 and includes new or expanded discussions on the following topics:

Quotes. When and how much can you quote from other people’s material? Considerations for when one may and may not quote books, movies, songs, etc. without permission

Wiretapping. When is it acceptable to record others’ activities, and when is such activity illegal wiretapping? Is it legal to photograph police activity? This topic relates to newsgathering techniques, recording of police by citizen reporters, and documentary productions.

Political and Cause Marketing. A new chapter highlights the rights clearance issues that frequently arise during political campaign season.

Fan Fiction. Fan fiction borrows heavily from existing books, movies, television programs, and other creative works. When is it okay to write, produce, and publish fan fiction?

Videogames. How can you use real people and trademarks in videogames and other software applications? There have recently been several lawsuits against videogame producers for the unauthorized use of real people’s images and trademarks in their games.

Tattoos as Protectable Art. After tattoo artists filed lawsuits against productions depicting real people who are tattooed with the tattoos designed by those artist, using subjects with tattoos has become a concern for filmmakers, photographers, videogame companies, and producers of other creative media.

Graffiti As Protectable Art. To what extent can a producer incorporate graffiti into his work? While there are special circumstances surrounding the copyrightability of graffiti, if the graffiti is copyright-protected, its use is subject to the same restrictions as any other copyrighted work.

Fonts. While fonts themselves are not copyrightable, the software that generates fonts and typefaces can be copyrightable. There might be restrictions on or additional payment requirements for certain uses such as ebooks, websites, and television or film credits.

. . . AND OF COURSE MORE

Review the full table of contents and read an excerpt of the Expanded & Updated Second Edition of the Permission Seeker’s Guide Through the Legal Jungle at www.guidethroughthelegaljungle.com/permission-excerpt.pdf

MORE DETAILS. Authored by Joy R. Butler, Published by Sashay Communications, 978-0-9672940-7-0, 450 pages, paperback, trim size 6 x 9, retail price $29.95. Available at www.GuideThroughtheLegalJungle.com, and from retail and online stores including amazon.com and barnesandnoble.com

How Selecting Music for a Dance Recital Exposes the Complexity of Music Law

A dance company plans to use several musical recordings in conjunction with a dance recital and queries whether its use of the music requires a license.

That seems like a simple question. Yet, it quickly becomes complicated as the dance company’s efforts to research the issue yield conflicting information about how to go about licensing and whether licenses are even required at all.

(My analysis of the dance company’s situation assumes that all the music to be used in the recital is currently copyright-protected and not in the public domain.)

WHY ALL THE CONFUSION AND CONFLICTING INFORMATION?

Song Versus Sound Recording

The dance company plans to use musical recordings. One source of conflicting information might be confusion between permissions needed for the recording versus permissions needed for the underlying song. A recorded musical selection includes a copyright in the recording itself and a separate copyright in the underlying song. Each might have a different owner and each carries different licensing requirements.

There is no general public performance right in a sound recording. Hence, the dance company’s use of the sound recording for a live recital requires no license for the sound recording. (But, as discussed below, the situation changes if the recital is recorded). In contrast, with some limited exceptions, the public performance of a song generally requires a public performance license.

Grand Rights Versus Small Rights

Another source of the conflicting information might be uncertainty over whether the dance company’s use requires non-dramatic performance rights (aka small performance rights) or dramatic performance rights (aka grand or large performance rights) in the song. The first category of small performance rights grants permission to present non-dramatic public performances of a song (such as playing the song on the radio, in a nightclub, or as background music in a film).

The second category of dramatic performance rights provides permission to make a theatrical presentation of a song or act out a song. A dance performance would typically require dramatic performance rights. Non-dramatic performance rights in a song can usually be obtained through one of the performing rights organizations – ASCAP, BMI, or SESAC. Typically, you must contact the song’s copyright owner or music publishing company directly to obtain dramatic performance rights.

WILL THE DANCE COMPANY RECORD THE RECITAL?

If the dance company plans to record and share copies of the recital (either as hard copies or via the internet), in addition to publicly performing the music, the dance company is now reproducing and distributing the music. Those reproduction and distribution activities require a synchronization license for the songs and a master use license for the sound recordingS.

DOES THE DANCE COMPANY PLAN TO LIVE STREAM THE RECITAL?

Song License Requirements for Live Streaming

For the song, live streaming of the dance recital via the internet still requires a public performance license – and, as discussed above, likely a grand or dramatic public performance license directly from the song copyright owner.

Sound Recording License Requirements for Live Streaming

With respect to license requirements in the sound recording for the live stream, I admit to being stymied. What is the necessary clearance for a sound recording heard during a live stream (audio-visual) event offered in real-time only?

As mentioned above, there is no general public performance license for a sound recording, but there is a right to perform the sound recording publicly by means of a digital audio transmission. However, the Copyright Act Section 114 definition of “digital audio transmission” explicitly says “{digital audio transmission} does not include the transmission of any audiovisual work”. Does this mean that a sound recording included in a live audio-visual stream (like a dance performance) is not a digital audio transmission – in which case no sound recording public performance license is needed for the live stream? If anyone knows of case law, additional statutory language in the Copyright Act, or industry practices that shine light on this question, please share.

Of course, if the live stream is to be archived and subsequently shared with others, that results in the same licensing requirements for the sound recording as offering a recording of the recital. A master use license for the sound recording would be required.

25 Key Points about Using Music in Your Business

Companies use music for the instant vitality, emotion, and specific mood that music can inject into a promotion, presentation, or a room. Companies are often uncertain about how they may legally use music, which uses require a license, and the best sources of music for business use.

I addressed these issues at a recent webinar, “Using Music at Work”, sponsored by the Copyright Clearance Center. Here are 25 key points I shared about using music in your business:

SOME BASICS

1. Common business uses of music that might require a license include

• using music in an advertisement or promotion,
• offering music at a live, public event (e.g., convention, trade show), and
• incorporating music into training materials or into a business presentation.

2. Music licensing can be complicated. Here is an easy-to-grasp general take-away. If your company is sharing music externally (on the internet – in an advertisement – at a conference), the company’s use of that music likely requires a license. Even if the company is sharing the music only within the organization, the use of that music might still require a license.

3. While music licensing is not rocket science, it is also not intuitive. As an initial step in determining which music licenses you need, you must understand that a song differs from a sound recording; and that each has its own separate copyright.

4. Typically – but not always – the song and the sound recording have different owners. The song copyright is owned by the songwriter or by the songwriter's music publishing company. The sound recording copyright is owned by the record label that released the recording. The same song can have multiple sound recordings with different ownership of each sound recording.

MUSIC LICENSES MOST COMMONLY SOUGHT FOR BUSINESS USE
(Public Performance, Synch, and Master Use Licenses)

5. Public performances of songs almost always require a public performance license. License requirements for the public performance of sound recordings are limited to public performances rendered over the internet or by other digital means.

6. If you play a song in a retail store, in a restaurant, at a conference, or other public venue, those are public performances (as opposed to private performances) of the song and a license is required. It does not matter whether the public performance is rendered by a live band, a CD, a DJ, or someone’s smartphone.

7. Most song public performance licenses are issued by performing rights organizations (PROs). The PROs for songs in the United States are ASCAP, BMI, and SESAC – which have been around since before the 1940s - and Global Music Rights, a relatively new PRO established in 2013.

8. Each PRO controls a different catalog of songs. Typically, the PRO issues blanket licenses that allow licensees to perform any song in the catalog of that PRO. Public performance licenses in songs are fairly easy to obtain. ASCAP, BMI, and SESAC offer websites where you can obtain and pay for the public performance license you need.

9. Using music in a video, advertisement, or any audio-visual presentation requires a synchronization (or synch) license from the copyright owner of the song and a master use license from the copyright owner of the sound recording.

10. There is not a specific name for every different manner in which a company might use music. For example, there is no specific name for incorporating music into your training materials. Licensing for training and business presentations is more similar to licensing for a video presentation since you need direct permission from the song and sound recording copyright owners

COMPARISON OF MUSIC SOURCES FOR AUDIO-VISUAL, TRAINING, AND BUSINESS PRESENTATION PURPOSES
(Popular Music, Production Music, Indie Music, Creative Commons Music)

11. As noted above, public performance licensing is relatively easy. In contrast, acquiring music to incorporate into company promotions, videos and presentations can be more difficult. When evaluating where and how to obtain music for this purpose, a company should consider ease-of-licensing, cost, suitability for the company needs; and potential risks.

Benefits and Advantages to Using Popular Music

12. Popular music (i.e., music by well-known artists, music listed on Billboard charts) is the most difficult to acquire. Its benefits include immediate recognizability and conveyance of the mood or period you wish to evoke.

13. Using popular music requires contacting and directly negotiating with the music publisher for a synch license in the song and with the record label for a master use license in the sound recording. These owners are likely major music industry companies and it is not uncommon for permission requests to a major music company to elicit no response.

14. License fees for popular music are frequently in the tens of thousands of dollars, depending on the popularity of the music and how it will be featured or used in the audio-visual production (e.g., background, foreground, over the credits).

Benefits and Advantages to Using Production Music

15. Production music companies are in business solely to license you content so they often make the acquisition process very easy by allowing you to preview, purchase a license, and download music online. The production company provides both the synch license and the master use license. The cost for some production music can be as low as $30. Most uses are usually less than $1,000.

16. Using production music carries minimal risk. Nevertheless, you should read the license agreement to be certain that your specific use is permissible. For example, some production music companies do not allow their music to be used in political advertisements.

17. As a downside, while production music can be very well-done music, it is not going to be music that was on the Billboard Top 100 and that people immediately recognize.

Benefits and Advantages to Using Indie Music

18. Music by independent musicians (i.e., musicians whose music is not distributed by a major record group and, as a result, might have narrower distribution and not be as well-known) is likely to be significantly less expensive than popular music and somewhat more expensive than production music. While it probably lacks the broad immediate recognition of music that was a Billboard Top 100 hit, it might be recognizable within a particular niche - depending on the indie musician’s fan base.

19. While a company will want all its music licensing agreements to include appropriate representations, warranties, and indemnifications, this is especially important when obtaining music from indie musicians. If indie musicians lack the funds and resources to document the ownership rights in original music on which they collaborate, ownership and rights questions can eventually result in a dispute among the indie musicians. And your company does not want to find itself in the middle of any such intra-band dispute.

Benefits and Advantages to Using Creative Commons Music

20. Creative Commons music is free to use, and easy to find and download on the internet. It is unlikely to be immediately recognizable music. Using any creative commons material is higher risk because it comes with no representations, warranties, or indemnifications.

Benefits and Advantages to Using Commissioned Music

21. You can commission original music. The expense depends on the commercial stature of the musician providing the music. It’s a longer acquisition process because you must negotiate the transaction and then wait for the composition of the songs and the creation of the sound recordings.

22. While the music is not immediately recognizable (because it is brand new music), it can be tailored to the company’s needs. If you have a well-drafted agreement for creation and acquisition of the original music, there should be minimal risk.

WHAT HAPPENS IF A COMPANY FAILS TO LICENSE MUSIC? AND WHAT ABOUT FAIR USE?

23. Using music in your business without obtaining the required license might result in a DMCA take-down notice for materials posted online. There is also the possibility of a cease and desist letter with or without a demand for a license fee payment for both online and offline use. In a worst case scenario, the legal consequences of infringing music will generate a copyright infringement lawsuit against the company.

24. Fair use is subjective – and just because you believe a use is a fair use doesn’t mean the rights owner will agree with you. The situations where fair use applies to music for company use are probably not as broad as some people believe. In my view, it is rare for a company’s use of music in an advertisement or promotion to qualify as a fair use. There might be situations or circumstances of using music in training materials that result in credible fair use arguments.

25. Like many legal issues, the answers to music licensing requirements and rights clearance questions are sometimes unclear. Sometimes, the right approach depends on your tolerance for risk. Here are questions to ask yourself when conducting a risk assessment over music use – or any other creative material.

For more details and examples of these key points, you can listen to a recording of the entire “Using Music at Work” webinar at http://go.copyright.com/l/37852/2017-02-24/cg7t1z

Does the Fearless Girl Violate the Copyright of Wall Street’s Charging Bull?

In the late 1980’s, artist Arturo Di Modica created a 7,000 pound bronze bull statue, “Charging Bull”, and surreptitiously placed it in front of the New York Stock Exchange. Di Modica calls the statute a symbol of prosperity and strength. in March 2017, Kristen Visbal’s “Fearless Girl”, a 4-foot statue of a pony-tailed, arms-on-hips young girl, was placed a few feet away where she bravely stares down “Charging Bull”. Di Modica claims that “Fearless Girl” corrupts his artistic message and wants the statue of the girl moved elsewhere.

Does “Fearless Girl” Result in a Derivative Work of “Charging Bull”?

One of the copyright owner’s exclusive rights is the right to prepare derivative works of the copyrighted work. A derivative work is a new work based on or originating from another preexisting work. You can think of a derivative work as a spin-off product or as an adaptation.

For example, the Harry Potter films are derivative works of J.K. Rowling’s novels. If you write new lyrics for the melody of a song or translate the song into another language, you have created a derivative work of the song. Examples of derivative works listed in the Copyright Act’s definition of the term include a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted (emphasis mine).

Does the placement of “Fearless Girl” recast, transform, or adapt the “Charging Bull” artwork. Or, alternatively, is the proximity of “Fearless Girl” to “Charging Bull” more akin to hanging two contrasting paintings next to each other in an art gallery or museum – which is an act that would not result in a derivative work.

Di Modica Might Have Moral Rights in His Artwork

Di Modica claims that the placement of “Fearless Girl” distorts his work. That complaint focuses on moral rights. Moral rights protect the artist’s reputation, honor, and integrity. In the United States, such a complaint often falls flat.  Unlike many European countries where artists have strong moral rights protections, the United States does not generally offer moral rights in creative works.  The Visual Artists Rights Act (VARA) offers a limited exception to this general rule. VARA, which became effective in 1991 and is incorporated into the Copyright Act,  offers some moral rights protections to a very small category of visual artwork.

Sculptures are one of the categories of VARA-protected works so, if “Charging Bull” qualifies for inclusion in that category, Di Modica might have some actionable VARA claims. Under VARA, an artist has the following moral rights:

• the right to claim authorship of the work

• the right to prevent use of his or her name on a work the artist did not create

• the right to prevent use of his or her name on mutilated or distorted versions of the work

• the right to prevent mutilation or distortion of the work

Those last two seem most relevant for Di Modica. Hence, the VARA-related question is whether the placement of “Fearless Girl” in any way mutilates or distorts “Charging Bull”. A very subjective question indeed.

Public comments to the newspaper coverage on the issue are divided. There are those who sympathize with Di Modica and believe “Fearless Girl” radically alters the artistic statement he intends with “Charging Bull”. Then there are those commenters who think Di Modica is being ridiculous and just “needs to get over himself”. So lots of variety for a potential jury pool if Di Modica decides to pursue litigation.

What Are New York’s Rights in “Charging Bull”?

An artist can assign or transfer his exclusive right to create a derivative work. An artist can also waive his moral rights via contract. That begs the question of what rights and permissions New York holds in “Charging Bull”.

The answer is unclear. Evidently, Di Modica initially donated “Charging Bull” by installing it on Wall Street without a permit and without any authorization. City officials first removed the artwork but then relented to public pressure and put it back. Those circumstances suggest that there is no written agreement between Di Modica and the City of New York regarding “Charging Bull”. New York might argue that it holds a valid license to take certain actions regarding the work – even if some of those licenses might be implied rather than written.

(Image Credit: Christopher Penler / Shutterstock.com)

Streaming Music Services in the Workplace. Which Business Use Is Permissible?

Thousands of recorded songs are easily available thanks to Pandora, Spotify, Amazon’s Prime Music, and other streaming music services. Under which circumstances may a business use these services? In preparation for my "Using Music at Work" webinar presentation, I perused the license terms of a few streaming music services.

Streaming Music Is Usually Limited to Personal Use. Streaming music services generally restrict usage to personal, non-commercial use. Hence, if you are the owner of a business such as a barber shop, restaurant, retail store, or gym, you cannot use your typical consumer streaming account to offer music to your patrons. There are business license versions of streaming music accounts that allow some commercial use but . . .

Commercial Versions of Streaming Music Licenses Have Limitations. A business that offers performances of copyrighted music to the public (e.g., its patrons) must have a public performance license from the copyright owner of that music. In the United States, there are performing rights organizations (PROs) - ASCAP, BMI, and SESAC – that issue most of those performing rights licenses for songs. The benefit to obtaining your business music via a service is that the service handles all the necessary performance rights license acquisition work so your company need not directly interact with the PROs.

Typically, the business license offered by streaming music services is meant only for mood music. Mood music is that background music you hear at a doctor’s office, hair salon, or grocery store. One service states that the service does not include the applicable PRO fees if the business uses the service for music used to accompany dancing (including ballrooms, discotheques and dance studios), bowling, skating or instructed health club classes; or for music used in a location where a cover charge is charged.

Can a Business Use Streaming Music Service Just for Staff? My analysis uncovered some gaps and gray areas on this question. Licensing is required for the public performance of songs (and, in limited circumstances, of sound recordings). Licensing is not required for the private performance of songs or sound recordings. Disagreements on what constitutes a public performance versus what constitutes a private performance have sparked many lawsuits. Nevertheless, one can certainly credibly argue that a group of three co-workers listening to streaming music within the confines of their office is a private performance. As the number of employees in your business setting increases, the closer you get to that public performance threshold – music for 20 workers staffing the kitchen of a restaurant, music for 50 employees at a holiday dinner, music for 250 sales representative at the firm’s retreat??? It is not always clear where to draw the line.

However, arguments about a private performance might not always be relevant – depending on the specific licensing language used by the streaming service. Not all the streaming services use the phrases “private performance” and “public performance” in their terms of use. For example, some restrict use of their standard accounts to “personal, non-commercial” use. One prohibits use of music from the standard account in “any business establishment”. That terminology leaves gray areas too. If five colleagues and I operate a start-up from my home, am I in a business establishment?

You May Not Use Streaming Music as a Soundtrack for Your Original Audio and Audio-Visual Productions. Even though streaming music is played in real time and is not downloaded to your computer, it is possible to capture a copy of the recordings. But just because you can capture it doesn’t mean you should. Hopefully, all readers realize that the streaming services’ terms of service do not allow using the music as the soundtrack for your own production. In fact, there are several issues to consider when adding music to your company video.

I will address these and other issues related to the use of music within the work and office environment at a complimentary webinar, "Using Music at Work", sponsored by the Copyright Clearance Center on Thursday, February 23, 2017 from 1:00 pm - 2:00 pm EST. You can find details about the webinar at http://go.copyright.com/l/37852/2017-01-25/bjvkfz

Using Music at Work – Free Webinar on February 23, 2017 at 1 p.m. ET

I am the speaker for a webinar about uses of music within the work and office environment. The Copyright Clearance Center is sponsoring the complimentary webinar to take place on Thursday, February 23, 2017 from 1:00 pm - 2:00 pm EST.

Topics I will cover during the webinar include the following:

• Examples of company music use that requires licensing

• Music licenses and how they differ (with an emphasis on music licensing concerns related to company advertisements, promotional videos, training materials, and social media activity)

• Potential costs and consequences of ignoring music licensing requirements

• Sources of music for company use – from the reasonably priced to expensive, the easily obtainable to not-so-easily obtainable, and the (almost) risk-free to high-risk

For more information and to register for the Using Music at Work webinar, please visit http://go.copyright.com/l/37852/2017-01-25/bjvkfz

Don’t Use Contest Rules Like These. A Real-Life Example of Deficient Contest Rules.

Recently, I encountered the following short paragraph that professed itself to be rules for a contest. The gist of the paragraph remains intact but I have altered details to protect the contest-rule-drafting challenged.

{Contest Sponsor} invites you to enter its 2017 writing contest. Entry Deadline: June 15, 2017. Word Limit: 500 words. Rules: You can submit a work of fiction, non-fiction, or poetry. Your entry must include all the following: the name of a flower, a reference to a 1930’s motion picture, a form of physical activity, and perseverance. The winner will receive {the contest prize}.

What’s Wrong with These Contest Rules? Quite a bit as these rules reflect many deficiencies. I discuss four significant deficiencies in this blog post:

Entry Requirements Are Incomplete.
A writing contest should specify requirements for language, length, and formatting (e.g., typed, double-spaced, file format for online submissions, etc.). While these rules place the word limit at 500, there is no clear indication that the sponsor would reject my essay composed in Egyptian hieroglyphics and chiseled onto a stone tablet.

No Information about Judges.
A sponsor does not necessarily need to identify the judges by name – and, in some cases, the better procedure is not to identify the specific judges in the rules. Nevertheless, a contest sponsor should at a minimum describe the pool from which judges come and provide details illustrating that the selected judges are qualified. For example, The New Yorker's weekly cartoon caption contest identifies its judges as members of the editorial staff of The New Yorker. Few would argue that members of that group are not qualified to select the cartoon caption contest winner  – even though the contest rules do not specifically identify any judge by name.

Lack of Specific Judging Criteria.
This example does not even take the partial – yet inadequate step – of saying the prize will be awarded to the best essay. I refer to a “best essay” award as inadequate – because what exactly does it mean to be the best. To some extent, most judging criteria for a writing contest will be subjective. Nevertheless, the sponsor places itself in a much better position to defend itself from participant-dissatisfaction and regulatory inquiries by explicitly itemizing judging criteria in its rules. Judging criteria for a writing contest might include originality, adherence to submission guidelines, writing skill, and overall appeal.

In a worst-case scenario, failing to establish objective criteria for awarding a contest prize can inadvertently alter a legal skill-based contest into an illegal lottery. Mistakenly offering an illegal lottery or gambling game is one of the 10 Common Legal Mistakes for Contests and Sweepstakes Promotions.

Full Rules Are Non-Existent or Gated.
If this paragraph is meant to be an abbreviated version of the full rules, the paragraph should indicate where the full rules can be found. If there are more complete rules, the sponsor has hidden them behind a social networking gate. People interested in participating in this particular writing contest need to register at the sponsor’s online contest platform in order to obtain additional information about the promotion.

This is similar to like-gating. Through like-gating, companies offer exclusive information, products, and promotion-participating opportunities only to those people who like or otherwise connect to the company’s social media account. While I am not aware of any court decision ruling that like-gating is illegal, it is not a best practice when offering promotions and has been discouraged by self-regulatory organizations within the advertising industry such as the Better Business Bureau’s National Advertising Division.

Adding Music to Your Company Video

Your company produces a short video. To make the video more interesting, your company adds a popular song as a soundtrack. Your company now wants to post the video online. Any problems with that?

Yes, a few. There are a few music licensing issues you should address before posting that video.

NOT ROCKET SCIENCE; BUT NOT INTUITIVE EITHER

While music law is not rocket science, it is not always intuitive. The music license is called by a different name depending on (i) whether you are using the song, the sound recording or both and (ii) how you are using them.

THE COMPANY’S ASCAP/BMI LICENSE DOES NOT ADDRESS ALL THE ISSUES

Companies mentioning this video issue often wonder if they can rely on their existing license with ASCAP or BMI for posting of the video. No, they cannot, because ASCAP and BMI issue only public performance licenses. For imbedding a recording of a popular song into a company video, the company needs both a synchronization or “synch” license (for the song) and a master use license (for the sound recording). When you obtain synch licenses and master use licenses, any necessary permission to render a public performance should be incorporated into the synch license or master use license.

MAY THE COMPANY POST THE VIDEO ONLINE?

There might be some opportunities for the company to post the video on YouTube through YouTube’s Content ID System which permits postings of some videos with unlicensed music (by monetizing those videos for the benefit of the copyright owners). Otherwise, posting a video with unlicensed music on the company website or social media account can yield a DMCA take-down notice (along with a copyright strike against your social media account) and, in a worst case scenario, can generate a copyright infringement lawsuit against the company.

CONSIDER STOCK MUSIC INSTEAD

I characterize obtaining synch and master use licenses for commercially popular music as quite difficult – and expensive. That’s why I often recommend that clients consider the production music library route as part of creating ads with no copyright or trademark problems. Using music under a Creative Commons license is also a possibility to explore. However, Creative Commons materials typically come with no representations, warranties, or indemnifications and, for that and other reasons, using Creative Commons materials is not always risk-free.

Obtaining Personal Consent and Release via Placard Notice. Does It Really Work?

Your organization is hosting a festival, a seminar, a book-signing, a musical concert – or other event that will attract attendees. You want to capture images of people enjoying your event – and then share those images in news reports about the event’s success, on social media, and in promotional pieces advertising next year’s event.

Do You Need a Personal Consent from Each Person Depicted?

The need to obtain consent varies with the circumstances and with each state’s law. For this blog posting, suffice it to say that while there are First Amendment and other circumstances in which consent is not required to use a person’s image, there is rarely any downside to having the person’s consent.

How Do You Obtain Consent from All Attendees?

Since having consent is preferable, how do you logistically obtain a release from the dozens, hundreds – maybe even thousands of people at your event? A posted notice might function as a practical and effective method of obtaining those consents. Pictured at the opening of this blog post is one such notice recently used at a community festival.

Is Consent Via Posted Notice Enforceable?

Personal consents and releases come in various forms - written, verbal, explicit, and implied. Each form can potentially be valid and enforceable. The “consent via placard notice” method takes advantage of the implied approach to personal consent. When a person realizes he is being photographed or filmed for a particular purpose and makes no objection, the person has provided implied consent to his depiction for that purpose.

While implied consent can be enforceable, it is not appropriate for every use and every situation. Here are some general tactics organizations can use for maximizing the effectiveness of consent via placard notice:

Determine whether Attendees Have the Capacity to Consent. For example, minors do not have the capacity to give consent. Any consent from a minor requires the consent of the minor’s parent or guardian. If your event is likely to attract many unaccompanied minors (e.g., an event attracting teenagers), consent via placard might not produce optimal results.

Give People Reasonable Opportunity to Decline. This means people need to see the notice. Hence, place the notice in a conspicuous location to maximize chances people will see it as they enter the venue.

Also, for the consent to be enforceable, people should have a reasonable opportunity to decline participation. If the person has paid $200 for a ticket to a show and declining to enter beyond the posted notice means not seeing the show and forfeiting the $200, the person has an argument that the consent is not valid.

Use Images in an Incidental Manner; Not a Featured Manner. Ideally, you will use the images in a manner that focuses on the event and in which the people depicted function as background – incidentally or casually captured on camera as part of covering the event. Your use cannot be a disguised advertisement for the sale of a product or service. You might seek additional legal review to evaluate the risk of a defamation claim if the image depicts the subject in a manner that might be embarrassing.

A case involving Ohio news anchor Catherine Bosley illustrates when use is featured and commercial rather than incidental and when implicit consent is insufficient. While on vacation in Florida, Bosley participated in a wet-t-shirt contest. Subsequently, images of Bosley at the event and in various stages of dress along with her name were used on the cover of a WildWetT video, in the members-only portion of an adult entertainment website, and in direct promotion for other sexually-related goods. The defendants claimed to have the anchor’s consent for use of the images since written notices informing the wet-t-shirt contestants of the future commercial use of their images had been placed around the dressing room, stage, entrances, and exits of the event. The court ruled that the defendants’ use was a commercial use and, thus, under Florida law, required at a minimum Bosley’s explicit verbal consent in order to be valid. (The case is Bosley v. WildWetT.com, 310 F. Supp.2d 914 (N.D. Oh. 2004)).

Legality of Fantasy Sports - Gambling or Not

The fantasy sports industry nearly imploded in 2015. While several factors fueled that near detonation, chief among them was a belief that fantasy sports games are actually illegal lotteries or illegal gambling games.

Since the 2015 implosion, eight states, including New York, have adopted laws legalizing (and, in most cases, heavily regulating) fantasy sports. Although daily fantasy sports remains banned or legally uncertain in about ¼ of the states, the industry seems to be recovering from its near-death experience. In fact, the fantasy sports industry’s experiences offer helpful lessons for companies and counsel in other industries.  I discuss those lessons in the article, “What In-house Counsel Can Learn From the Fantasy Sports Industry”, co-written with my colleague, Ellen Zavian, and appearing in the September 2016 issue of the Association of Corporate Counsel’s Docket Magazine.

This blog posting explains why state regulators and others viewed (or continue to view) fantasy sports as illegal.

What Are Fantasy Sports?

Fantasy sports competitions are games in which participants simulate the role of an owner or manager of a professional sports team. Other names for this type of promotion include rotisserie, roto, and owner simulation. There are fantasy sports leagues for many sports including football, baseball, basketball, hockey, NASCAR races, soccer, and golf. Currently, fantasy games based on the National Football League are by far the most popular in the United States, with games based on soccer being the most popular globally. The simulation game genre has even gone beyond sports and exists for politics, movies, and reality television programs.

In a fantasy sports competition, each participant selects a roster of athletes to play on that participant’s simulated team. The selected athletes are real people who actually belong to professional sports teams. A roster assembled by a fantasy sports team player typically consists of players from several teams. The participant gets points based on the real-life statistical performance in actual games by the athletes on his roster. The winner of the fantasy sports competition is the participant with the most points.

Fantasy sports can be divided into two broad categories: the more traditional season fantasy sports (SFS) and the newer daily fantasy sports (DFS). As the name implies, SFS games track athletes’ performance over the majority of a season. In contrast, DFS games track athletes’ performance over a single game or single week. The surge in DFS competitions sparked many of the industry’s recent woes.

Impact of Federal Unlawful Internet Gambling and Enforcement Act

In arguing their legality, fantasy sports companies relied heavily on the Unlawful Internet Gambling and Enforcement Act of 2006, 31 U.S.C. §§ 5361-5367 (UIGEA). The UIGEA is a federal law that prohibits funds transfers to businesses engaged in unlawful internet gambling. The act defines “unlawful internet gambling” as transmitting a bet or wager via the internet where the bet or wager violates the gambling laws of any state in which the bet is initiated, received, or otherwise made. The UIGEA specifically excludes from the definition of “bet” or “wager” money paid for participation in a fantasy or simulation sports game as long as the fantasy sports game satisfies the following conditions:

• The sponsor establishes the prizes to be awarded and makes all participants aware of that information prior to the start of the promotion.

• Neither the number of participants nor the amount of fees paid by participants determines the value of the prizes.

• Winning outcomes are determined predominately by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.

• No winning outcome is based on the score, point-spread, or any performance or performances of any one or more real-world teams.

• No winning outcome is based solely on any single performance of an individual athlete in any single real-world sporting or other event.

Daily fantasy sports providers inaccurately cited the UIGEA's fantasy sports exemption as authority for the legality of their business model. As state regulators highlighted, the exemption in the UIGEA for fantasy sports does not mean that fantasy sports are lawful in all states. The federal exemption means only that fantasy sports are not criminalized under the UIGEA.

Instead, whether or not a fantasy sports league comprises gambling within a particular state is state specific. It depends on the individual state’s gambling laws and how the state evaluates the structure of the particular fantasy sports game.

Impact of State Gambling Laws

For the most part, gambling is illegal in the United States. States that do allow gambling tend to regulate it heavily. In response to government scrutiny, fantasy sports companies describe their fantasy game offerings as skill-based contests, and, thus, not a gambling game or lottery.

Is a Fantasy Sports Competition a Skill-Based or Chance-Based Game?

Like many games, fantasy sports games combine elements of skill and chance. Skill comes from the fantasy sports participants’ use of their knowledge of athletes, statistics and strategy to pick a winning team. Chance exists because external factors that are beyond the fantasy sports participants’ control influence the outcome. These external factors injecting chance include the future performance, injury status, and time at play of athletes on the participants’ roster as well as the overall game plan.

The more direct impact participants have on the selection of their rosters, the more one can argue that skill rather than chance determines the game winner. The greater extent to which participants can trade, cut, and add players, and decide which players start or are benched for each game, the more opportunities participants have to use their knowledge and strategic thinking to influence the outcome of the competition.

Many state investigations into daily fantasy sports have focused on the fact that once a player places a wager and picks a lineup for a DFS promotion, those choices are locked in as soon as the real-world competition begins. This structure contrasts with that of a SFS game in which a participant can make changes to his roster over the course of a season.

How States Make the Chance-Skill Determination

The approach to a skill-chance determination is state specific. Most states apply the dominant factor doctrine or the material element test to determine whether chance or skill prevails in a game that combines elements of both. Variations in the states’ evaluations of fantasy sports illustrate the challenge to operators when offering fantasy sports competitions nationwide.

As an example, in his conclusions that DFS games such as FanDuel and DraftKings’ are illegal gambling in his state, Hawaii Attorney General Kevin Takata, applying the material element test, stated that chance is a material element for the vast majority of players and that skill made a difference in the outcome for only a tiny minority of top-performing players. The Hawaii opinion also cited sources from litigation between the State of New York and DraftKings indicating that the typical participant playing DraftKings' Major League Baseball-Fifty-Fifty game had a win ratio slightly worse than random chance (i.e., about 45%).

In a contrasting example, Rhode Island Attorney General Peter F. Kilmartin, applying the dominant factor doctrine, concluded chance does not dominate the outcome of DFS games and that therefore, DFS does not constitute a game of chance and is not an illegal gambling game or lottery in Rhode Island.

Existence of Chance Is Not the Whole Story

Some states have one set of laws for lotteries and a different set of laws for the broader category of gambling. While every lottery is a form of gambling, the converse is not true. Every gambling game is not a lottery. Offering a fantasy sports game viewed as either a gambling game or as a lottery creates problems with state regulators.

One major distinction between the two is the elements required to constitute a lottery versus the elements required to constitute gambling. With very few exceptions, each state requires a finding of prize, consideration, and chance before categorizing a game as a lottery. In contrast, as the fantasy sports industry has learned, some states designate a game as gambling even if it does not contain the element of chance.

In opining that fantasy sports is illegal in Nevada, Nevada regulators explained that “ . . . while a determination that an activity is a game of skill is relevant to determining whether that activity is a lottery, it is not relevant to determining whether that activity constitutes a gambling game”. In the Hawaii opinion letter discussed above, even had the attorney general concluded that daily fantasy sports games did not contain a material element of chance, the games would still be illegal gambling in Hawaii since they meet another prong of the Hawaii anti-gambling laws in that winning depends on future contingent events (i.e., performance by athletes in sporting events) that are outside the control of participants.