Tag: new

Leaks, geeks, & reporters
By Ryan Long

Leaks, geeks, & reporters

The recent spat of Washington D.C. leaks is “unusually active,” according to FBI Director Mr. James Comey. Even if the leaks are as normal as they are in an allergic nose dealing with New Orleans spring pollen, what are the legal and ethical issues in leaking such confidential information, unknowingly reverse engineering it, or in publishing the leaks?

Generally speaking, liability for the leaker inside the government is clear. Numerous federal laws apply to confidential information circulated within the labyrinth of the federal government, and they generally hold such leakers criminally liable for the willful, and sometimes even negligent, disclosure (or even handling) of such information, including the identity of a Central Intelligence Agency (“CIA”) “covert agent” or President Trump’s tax returns.

However, what about geeks who reverse engineer publicly available information and then end up discovering government secrets and/or strategies through such analysis?

Imagine a modern day Matthew Broderick from WarGames (1983) who correctly intuits a covert government strategy to liquidate foreign ambassadors or heads of state via proxies and then warns how such molehill practices have on prior occasions caused mountains of problems. In the 13 century, Iraqis killed Genghis Khan’s chief envoy and had the beards of the others burned so they could travel back to him humiliated. Thereafter, Mr. Khan massacred almost all of the 200,000 to 1,000,000 inhabitants of Baghdad in one week, at the time the “House of Wisdom” in Islam’s Golden Age. Or take the assassination of Archduke Franz Ferdinand of Austria and his wife in 1914. Many believe that this killing led to the start of World War I, in which nine million combatants and seven million civilians died.

In such instances of geeky reverse engineering of covert government strategies, criminal liability will generally be lacking because such a geek would have no contractual or statutory responsibility to keep quiet, and his speech about an issue of grave public concern – potentially preventing a global conflict — would be protected by the First Amendment. Even so, would be geeks are well advised to consider reprisals from said officials, whether via Nixon type IRS audits or otherwise, and how to protect themselves against them. (Genghis Khan 2.0 protection is one way.)

That’s the leaker and the geek. What about the reporter?

The law in this area is murkier. While there are federal statutes which some have argued would impose criminal liability on a reporter for publishing confidential information, such as a Department of Defense (“DOD”) plan to defeat ISIS, prosecutions have been rare. The First Amendment generally protects the publication of such intelligence. However, in a case where the reporter and leaker work in concert (think offer-acceptance) to violate federal law, a conspiracy case can be brought against the reporter. What is more, prosecutions have been brought against reporters to reveal their confidential sources, as happened with Ms. Judith Miller of The New York Times when she refused to identify the source of information leading to the unmasking of a CIA covert agent, as many say happened in the case of Mrs. Valeire Plame under President George H. Bush’s tenure.

But even if there is no legal liability for the media professional, there is also the question of unintended consequences. Take, for example, a DOD strategy to replace ISIS with “new sheriff in town” Eddie Murphy. Assume a person within President Trump’s DOD, or CIA, who dislikes the President, and/or his political agenda, leaks such the details about the “Murphy Plan” to an unwitting New York Times reporter. The reporter is likely protected in publishing the plan, but should it be published? Asymmetrical information is the key to effective conflict, whether you are in the courtroom, on the battlefield, or in a chess match. Disclosing such a plan, especially if it is already being carried out but even if it hasn’t, would risk the lives of military personnel and/or threaten the security of major cities like New York, Boston, Chicago, and Los Angeles.

Any professional working in media would be well served not only to consider the legalities of reporting leaked information, but also such unintended but foreseeable potential blow back.

Gossip can be fun, but also unlawful?
By Ryan Long

Gossip can be fun, but also unlawful?

Recently, New York Times reporter Mr. Jacob Bernstein was overheard at a party calling Mrs. Melania Trump a “hooker.” Although he subsequently apologized, the legal question is what legal liability, if any, does either he or The New York Timeshave for his statement? In these times of fast and loose media stories, the question is timely for media professionals and consumers of news.

The First Amendment does not protect all speech. One category of unprotected speech is defamation, an actionable tort. In order to prove defamation, a plaintiff must generally show that an untrue statement was communicated about him or her, that the statement was false, and that such statement injured their reputation in the community. Proof of damage can include, but is not limited to, lost sales for a business. In the case of defamation per se, however, a plaintiff need not show damage because the statement in question is considered harmful on it’s face. Examples of defamation per se generally include calling someone a “bank robber,” a “prostitute,” or both.

Of course, context matters. Where the statements are made under the guise of parody or the words, when read in context, do no mean what they would otherwise mean in isolation, then there may be a potential defense against liability. Barring such context, however, legal liability generally exists. This is true even if you republish the defamatory statement or if the statement was made by one of your employees during the course and scope of their duties to you.

That being said, it is harder to prove defamation if you are a pubic figure. In such a case, you must show that the allegedly false statement was made with actual malice, which means that the person knew the statement to be untrue, or that the person made the statement with reckless disregard of whether the statement was true or false.

Under these guidelines, Mr. Bernstein’s recent statement would be considered defamatory per se. Needless to say, truth is an absolute defense to a defamation claim, so if he could proffer admissible evidence showing his statement to be true, then there would be no liability. Whether his apology absolves him of liability is another question. Defamation law varies by state. In all likelihood, the apology wouldn’t absolve him of liability, but it would be an issue for the jury to consider in determining the amount of compensatory or punitive damages.

Whether The New York Times could be held liable for Mr. Bernstein’s statement is unclear. To be liable, Mrs. Trump would need to show that Mr. Bernstein made the statement within the course and scope of his employment. Courts use various factors to determine this question. One factual issue would be whether Mr. Bernstein was attending the party on behalf of The New York Times, or in his personal capacity. If the former, liability will be more likely. If the latter, less likely, for The New York Times.

Media professionals are under immense pressure to get views of their content, and the quick way to do that is to run salacious eye-grabbing headlines. At the same time, the First Amendment’s protections are not infinite for media professionals. Finding the right balance between offering tantalizing news and also respecting the lines of defamation is a prudent course, but one that may be at risk of attack in today’s fast food news environment.

Grandma’s going to jail for digital trespassing?
By Ryan Long

Grandma’s going to jail for digital trespassing?

“No digital trespassing! Violators will be sued. Survivors will be sued again!” Ever seen that sign? Not likely. That’s because, technically, there is no law against digital trespassing per se. This occurs when your grandma’s new universal remote control climbs over, figuratively speaking, the encryption security fence on copyrighted content, such as the software to her old garage opener, so as to enable communication between the new control and old garage door opener. And yet some copyright owners want to hold your grandma civilly or even criminally liable under federal law for such trespassing. Allowing them to bust grandma would be an unwise expansion of their copyright monopoly.

Say you buy your grandma a garage door opener made by Acme Inc. The garage door opener comes with a control. Now, granny has a lot of controls, and she is too old to futz around with a control for her television, one for her radio, and one for her garage. Given you love your grandma and want to make her happy, you buy her Bling Inc.’s universal remote control. Bling’s one size fits all control circumvents the encryption technology fence on Acme’s garage door opener. In so doing, Bling’s remote is now able to gain access to Acme’s copyrighted software, thereby enabling interoperability. Otherwise, they wouldn’t be able to communicate because Bling’s remote would be speaking kilometers per hour to the miles per hour garage door opener without a translation protocol.

Does Acme have a claim for digital trespass against Bling or your grandmother? In the view of some copyright holders, the answer is yes. That’s because, in their view, Bling’s universal remote control has enabled your grandma to violate the anti-circumvention provisions of what is called the Digital Millennium Copyright Act (“DMCA”). This is so even if neither Bling nor your grandma infringe, or otherwise induce infringement of, Acme’s copyright in the source code by copying, reproducing, or otherwise publishing it. Under this view, there is a per se — automatic — violation of the DMCA whenever Bling or your grandma trespass, regardless of the circumstances.

But in the view of federal courts, there is no per se rule against digital trespassing under the DMCA. Bling’s universal remote control allows for what is called interoperability between grandma’s different devices, which is an efficiency that Congress didn’t want to do away with when passing the DMCA. In fact, the DMCA explicitly states as much in Section 1201(f)(1), in case you want to bore yourself by looking it up. What is more, courts have dismissed claims brought under the DMCA where the plaintiff is only able to allege or prove digital trespass, no corresponding copyright infringement or conscious inducement of the same.

Then why do companies like Acme file lawsuits seeking redress for digital trespassing? There are various reasons. One is security. Closed software universes, like Apple’s, protect better against viruses that can more easily attack porous systems that are liberal in their approaches to interoperability. This is one of the reasons why Apple’s computers are hacked less often than personal computers. The second is the fear that digital trespassers will pirate copyrighted content. The third is lost revenues. Conversion technology which allows newer kilometers per hour devices to communicate with older miles per hour ones via a translation protocol cost companies money. Rather than forcing granny to buy a new television in order for her to gain access to content protected by new encryption technology, conversion technology enables her old television to communicate with the new encrypted content. In the process, new technology sales suffer.

In the end, your 92 year old grandma isn’t going to jail! One reason is that her and her friends pack heat with silencers. The other is that the DMCA didn’t expand the scope of a copyright holder’s monopoly, and it expressly says that. However, it may take some more court decisions to make that clear to aggressive copyright holders who seek to pursue granny for digital trespass merely because she uses conversion technology to watch Netflix’s “Just Call Saul” on an old outdated screen. Otherwise, grandma’s crew might just shoot them all.

Google is moving to Moscow!
By Ryan Long

Google is moving to Moscow!

Google is moving to Moscow! Not really. But Mr. Sergey Brin, the founder of Google, was born in Moscow. How does Russia ensure that Sergey 2.0 will stay in Moscow – and not flee to Mountain View? You should care. Russia’s economy is over leveraged in the energy market. When oil prices drop, the Kremlin will be all the more desperate to do unwise deals for arms, among other things, to fill its coffers at the risk of longer term Russian — and American — stability. To keep Sergey 2.0, the Kremlin should take the following steps.

1. Encourage entrepreneurial risk taking

Who likes failing? Nobody does. But failing is a necessary part of being an entrepreneur in the tech space, and can be like compost for future successes. Numerous players, including Steve Jobs, failed miserably before they succeeded. He started Apple, was kicked out, started NeXT, that failed horribly, and created America’s largest capitalized company. There is a lesson to be learned from success stories like Apple for the Kremlin, whose oil and natural gas sales accounted for almost 70% of exports in 2013.

By failing to diversity its economic portfolio into the technology sector, Russia’s economy remains overly beholden to the volatile energy market. When oil prices drop, as they have recently, the Russian ruble suffers. This also makes the Russian economy subservient to good short term but bad long-term deals. To make Russia more economically robust in the long term, which ensures that America has a stable trading partner (Ford currently has a factory in Saint Petersburg), Kremlin policy makers should encourage more entrepreneurial risk taking among its inventive youth. This will make it more likely that a Russian version of Google will arise, employing numerous Russians and giving the country an alternative revenue source alternative to energy. This means going backwards and dismantling some of the centralized state control apparatus — whether under the Czar or under the Bolsheviks — that dominates Russia’s history.

Going backwards isn’t always bad. As any tech entrepreneur will tell you, including Mr. Jobs if he were alive, oftentimes you need to go backwards before you can leap forward. That’s why those who risk more get more. But most cultures – including Russian – look upon failing as being weak. While I am a California boy hailing from the City of Angels (Los Angeles), I have been living in New York City for twelve years now. And I can tell you first hand that the mentality here is less failure forgiving than in my Los Angeles birthplace, where, according to artists like Moby, there is “freedom to fail.” This explains why most of the top 50 venture backed companies in 2011 were located in California.

Like Californians, Russians are inventive, too. That’s why they were first to the moon, are the top rated chess players in the world, and are number 14 on Bloomberg’s list of most innovative countries in the world. But, as MIT points out, there is a difference between inventing and innovating. It’s one thing to invent something, like new ways of training for hockey, as recounted in Red Army, a documentary about the Soviet Union’s invincible Red Army hockey team. It’s another to take that invention and make it an innovation by packaging and marketing as a product that will disrupt the market. Part of the reason why there isn’t more innovation – as opposed to just invention – in Russia is the fear of commercial failure, as I have seen with Russian clients.

To temper this fear, Kremlin policy makers should encourage schools to teach Russian children about the benefits of trial and error so that they know that the risky path less taken isn’t necessarily the wrong one.

Otherwise, the world wouldn’t have Apple, Microsoft, or Google.

2. Create tech incubators

Some say “isolation is required” for creativity to flourish, as the famed Russian physicist Isaac Asimov says in his essay On Creativity. Others say that creativity is collaborative, as recounted in The Innovators by Walter Isaacson in telling about the starting of companies like Texas Instruments by a team of mavericks. Like with most things, the truth lies somewhere between these two poles.

Even Mr. Asimov says that cross-fertilization of ideas happens best when creative types are able to collaborate in an environment that encourages “ease, relaxation, and a general sense of permissiveness.” That’s because “the world in general disapproves of creativity, and to be creative in public is particularly bad. Even to speculate in public is rather worrisome. The individuals must, therefore, have the feeling that the others won’t object.” This means Russia needs to develop incubators and co-working spaces where collaborative creativity can thrive.

The benefits of such collaborative creativity can be seen throughout the United States. It can be seen in California or even New York skate parks, where kids make up new moves on their own, but try them in front of others to receive applause, pointers, or thumbs down. It can also be seen in tech incubators and co-working spaces located in both states – and in places like Cambridge, Massachusetts – where start-up companies work on their own inventions, but then can have practice pitch sessions in preparation for venture capital showdowns with other start-ups.

By mixing the collaborative and individualistic aspects of creativity, these innovators are able to get better feed back on their minimum viable products — a sample of the larger product to test — in preparation for either venture capital pitches or launching into the marketplace. This type of feedback is impossible in pure isolation. It would be like me testing out one of my new novels on a maple tree in Maine. The tree makes for an obedient audience, but I don’t want that when trying out new work. I want the good, bad, and ugly comments – stomach punches! – so that I can perfect my work for the real world.

The same type of culture can be encouraged in Russia by funding incubators or shared work spaces where entrepreneurs can find the environment they need to prosper.

3. Keep public hands off private intellectual property

Some products are produced and developed with government – taxpayer — money, and others with private money. To the extent I am developing a product using public money, then it is to be expected that the government – taxpayers – will own the the fruits of my labor. In that case, public copying isn’t theft. If, however, I receive private money for my development project, then the government should have less of a stake in the pot of intellectual property gold at the end of my entrepreneurial rainbow. In such a case, public copying is theft.

This risk reward relationship is one of the main drivers of innovation. Of course, some creators will make things regardless of the economic benefit. But these folks are usually hobbyists, not professionals. Those who seek to take a new product to market with their own — or borrowed private — money will expect to receive the financial spoils, and to have the state enforce their intellectual property rights, whether they be copyright, patent, or trademark. To the extent that the Kremlin is able to take away this pot of gold at the end of the rainbow from law-abiding citizens — not tax cheats — as a form of redistribution or retribution for challenging centralized power, then Russians like Mr. Brin will continue to flee to the West. This will further leverage the Russian economy into energy, and make job creating private tech innovation a pipe dream.

However, if the Kremlin makes the next Sergey Brin firmly confident that the gold at the end of his tech rainbow will not be seized, or otherwise taxed at 99%, then tech innovation will boom in Russia.

4. Ensure legal stability

Finally, there needs to be regulatory stability in Russia. This means that before I launch a new tech gadget product, the law might be settled concerning the patentability of a piece of hardware I developed, or copyrightability of source code. However, if the government is able to be lobbied by a larger competitor so that the law can swiftly change via regulatory diktat, smaller tech entreprenerus can no longer rely on the law being principled, which is what many smaller entrepreneurs in the U.S. feel about the legal system. Further regulatory uncertainty is created — which isn’t not good.

Such uncertainty is one of the biggest obstacles to creating and fostering an environment that encourages innovation. Sudden regulatory changes create a new factor that may go wrong after launching a product, or in the process of research and development. These types of regulatory changes also add another barrier to entry. In the United States, it makes it more costly for products to be developed by cash strapped start-ups without having expensive regulatory lobbying might in Washington D.C. so as to protect against well-connected competitors. This explains why so many companies from Silicon Valley now have lobbyists in the Capitol, whereas they didn’t before. The Kremlin can learn from Washington D.C. what to do — and not do — to enhance tech innovation in Russia.

Don’t be surprised to see a Silicon Moscow in the coming years. This will be beneficial to Americans since it will make it less likely that the Kremlin will do short term desperate arms deals that will be injurious to longer term Russian — and world wide — security and stability. It will also give American companies another fertile market in which to do business. And yet to get to this tech motherland, Russia will need to create the right type of environment. If it does, watch out for Sergey Brin 2.0 in Moscow.

Devil’s in the details? Good news!
By Ryan Long

Devil’s in the details? Good news!

The Devil is in the details. Good news! This means picking a trade name for your new business venture will involve a great deal of planning and detail oriented thinking about your launch plan, and the market you serve. This will only serve you in good stead down the line.

Take, for example, a company called “Designbook.” According to a recent article, Established Firms Fight Startups on Names, they are a fledging upstart who is seeking entry into the now crowded social networking market. In attempt to gain a nationwide monopoly on their name, Designbook filed an application to register it’s name with the federal government’s Patent and Trademark office.

Guess who opposed the application? Facebook. According to the networking giant, Designbook’s use of “book” in it’s name is confusingly similar to the “book” used in “Facebook.” Of course, if Designbook was a pen manufacturer, Facebook’s claim wouldn’t likely have merit.

However, as applied to the social networking market, “book” has gained a worldwide reputation as being associated with “Facebook.” So the mammoth’s argument about confusingly similar use has merit — in this instance. Imagine if the market became saturated with “Desginbook,” “Loobook,” “Cokebook,” “Gangabook,” “Pornbook,” and so on? Such uses give the impression that the companies are affiliated with Facebook (as in the case of “Designbook” or “Lookbook”). Otherwise, the tradenames dilute the “Facebook” name (as in the case of “Cokebook,” “Gangabook,” and “Pornbook.”). Unlike confusion, dilution doesn’t require that folks think one brand is affiliated with the other, but merely that that the new brand — i.e. “Cokebook” — makes the famous brand — “Facebook” — less unique.

That being said, assume “Pornbook” launched a website, not in the social networking realm, but as a new humorous online publication by evolutionary biologists like E.O. Wilson for the study of sexual practices among Rhesus monkeys, in addition to other non-human mammals, throughout history. In that case, Facebook would be hard pressed to bring a claim. “Book” is a generic word. Facebook doesn’t own it. So the question becomes, how do you, as a new venture backed company, pick a good name to enter into an otherwise crowded market?

Be original. While “Designbook” describes, in some ways, what the company does, the trade name “Nike” does not. If you didn’t know that “Nike” referred to the shoe company, you’d otherwise think it may apply to a Greek God for victory — it does. All this means is that a company like “Designbook” needs to pick a more original — “fanciful” — name that doesn’t describe, in anyway, what they do. They then can make a splash in the market — like Nike did after Mr. Jordan helped revamp the brand. (Remember those Spike Lee/Michael Jordan commercials?) In the end, an original name can actually help “Designbook” gain more market share instead of merely being a “me too” Facebook.

Only by respecting the Devil and his details will you arrive at a sustainable, attention grabbing, name.

An Axl Rose sample used in a mash up often doesn’t sound as sweet.
By Ryan Long

An Axl Rose sample used in a mash up often doesn’t sound as sweet.

The bright lines of the real property based view of copyright are being blurred by technology. In 1991, Mr. Biz Markee was found liable for infringing Mr. Gilbert O’Sullivan’s copyright in his song, Alone Again (Naturally), when Mr. Markee used an unauthorized sample in his rap song entitled Alone Again. Had Mr. Markee used Mr. O’Sullivan’s song in a mash up, the result may have been different.

A mash up is a digitally created song that splices in elements of other songs, sometimes in very small increments — not in quarks, but in milliseconds — to create what some would argue are original pieces. Think of a mash up as a fusion dish that blends elements of Chinese, southern soul food, Italian, and Mexican cuisine into one dish. The question arises whether the unauthorized use of other people’s songs in a mash up is an infringement or a fair use of their copyrighted works?

The question isn’t an academic one. According to Turning Profit from Music Mashups, New York based tech company Dubset Media, Inc., collects royalties from mash up artists who use other copyrighted songs in their works. The company’s technology, known as “MixScan,” tracks uses of copyrighted songs down to the second on mash ups. It then distributes royalties to labels depending on the extent of use.

These royalty streams come in different forms and can be lucrative, Turning Profit saying that such mini sampling can generate an additional $1.2 billion a year in revenues. That’s because there is a copyright in the musical composition underlying the song, and in the recording of the song. In Mr. O’Sullivan’s case, he would own the copyright to the composition of Alone Again (Naturally), which includes the musical notes and lyrics to the song, in addition to his recording of the song in the studio, known as the “master.” Mr. O’Sullivan collects royalties from those who wish to publicly perform or re-record his composition, and from others who wish to use the recording of the song in their music or in a film. Mr. Markee avoided paying these royalties to Mr. O’Sullivan by using the uncleared sample in the rap song Alone Again.

However, had Mr. Markee used Mr. O’Sullivan’s song in a mash up, the resulting decision finding infringement wouldn’t have been so easy. Mr. Markee would likely have had a colorable fair use defense if he: physically transformed the sample (changing the frequency, tone, bass) so that it became physically unrecognizable in the final product, sampled only a small part, and if the resulting rap song either had no effect on the market for Mr. O’Sullivan’s work, or exposed it further.

Courts are more prone to find fair use — and no infringement — when there is either physical transformation of the copyrighted work in a new work, or application to a new purpose. Patrick Cariou, a photographer, lost his copyright infringement lawsuit against appropriation artist Richard Prince because he had physically modified the photographer’s photos of Rastafarians — in one case, putting a gas mask and guitar in the Rastafarian’s hands. In the recent Google books case, Google was found to have fairly used authors’ copyrighted indexes to their books by making them searchable via Google books. This is so even though there was no physical transformation of the copyrighted work, but, rather, only application to a new purpose.

Before the recent technology boom, copyright infringement was viewed with a real property monocle — one toe over the line constitutes a trespass. But technology is making that toe harder to see and the resulting line between properties less clear. A rose by any other name may smell as sweet, but an Axl Rose sample in a mash up doesn’t smell as sweet.

Does the killer instinct make or break innovation?
By Ryan Long

Does the killer instinct make or break innovation?

Male dominated chimp groups are more violent than their female dominated counterparts, reports Dr. Robert M. Sapolsky, in Our Ancestors Murdered–And Played Pacifist. Does that also mean that the male group was more innovative or entrepreneurial?

After all, among humans, women are almost 60 percent less likely be entrepreneurs than men, according to Why Are There So Few Female Entrepreneurs? Perhaps males are encouraged to channel destructive energy into innovative behavior. Patrick Batemen, the murderous investment banker from American Psycho played by Christian Bale, wasn’t innovative — he sat around in his office all day listening to music — because he was busy killing the competition. Richard Branson was a horrible and rebellious high school student — but then channeled that destructive behavior to create Virgin Records.

This begs the question of whether such destructive male behavior is nurtured in patriarchal societies, and whether the behavior causes — or is merely correlated with — entrepreneurship. Our Ancestors Murdered says we share 99% of our DNA with chimps and that of 152 killings among non-bonobos, males made up 92% of the killers. Whereas, among the socially inclined, female dominated, bonobos chimps, there was only one killing in 92 years. Not surprisingly, the U.S. Department of Justice reports that males — not females — accounted for almost 89% of murders between 1980-2008 in the United States.

Regardless of the relationship between destructive male propensities and innovation or entrepreneurship, competition need not be ruinous, although that seems to be the popular view of it. In American Psycho, Bateman killed one of his fellow bankers because he had a better business card. In patent litigation suits, especially in the patent troll ones, the winner takes all while the loser, often times a nascent start-up, is enjoined from using – or improving upon — the technology. Such zero sum game battles can stop new innovations from coming to market and shifting the supply curve.

Thankfully, collaborative competition is gaining popularity. In the open source community, software developers from around the world contribute code to platforms that build better software, all the while competing against for one another for the glory of making the better contribution. The same was seen among the skaters in Dogtown and Z-Boys, where new tricks were contributed by ambitious young skaters, only for them to be built upon by the new generation of younger tricksters. Building, copying, and improving upon old creations is part of the process, but a zero-sum view, such as that taken by many in the RIAA of copyright vs. fair use, doesn’t encourage such laddering.

While the same competitive tools that play a part in violent or rebellious male behavior also have a part in creating great innovations, competition, in the end, need not be destructive.

Thank goodness for plain English.
By Ryan Long

Thank goodness for plain English.

Many love streaming their favorite artist’s songs over Pandora, Inc. (“Pandora”). Imagine a world where your favorite song, say “All Along the Watch Tower” by Bob Dylan, wasn’t listed on Pandora because the American Society of Composers, Authors, and Publishers (“ASCAP”) made his compositions unavailable to “New Media” outlets, even though his songs are available for license to traditional methods of distribution, like the radio. Keep calm. Thanks to a recent ruling by  the Southern District of New York, a federal court in New York, that won’t happen. And that’s primarily because of plain English.

In In Re Petition of Pandora, Media, Inc., ASCAP argued that it could not make all compositions available in its repertory to licensees like Pandora where the publisher of the song withdrew ASCAP’s right to license the compositions to “New Media.” In short, ASCAP argued to the Southern District of New York, that it cannot license what it does not have the right to license.

Since 1941, ASCAP has needed to comply with an antitrust consent decree. Luckily, it states in plain English that music users have the right to “perform any, some or all of the works in the ASCAP repertory.” If Mr. Dylan uses ASCAP to collect royalties for the public performances of “All Along the Watchtower,” that song is part of the ASCAP repertory. Under the decree, ASCAP must make the song available to all requesting music users, regardless of the type of medium they use to distribute the music.

The court correctly ruled that while Mr. Dylan may freely pull his song out of the ASCAP repertory and go to another performing rights society, ASCAP is restricted by the decree from offering Mr. Dylan the option of licensing his songs to some distributors but not to others in “New Media” — such as Pandora. But Pandora has only won half the battle with ASCAP. The decree still requires the court to determine the rate that Pandora will pay for using ASCAP’s stable of songs. If the court makes these rates cost prohibitively high, Pandora’s first half victory will be a moot one.

Stick and stones may break my bones, but calling me gay when I’m not doesn’t — or can it?
By Ryan Long

Stick and stones may break my bones, but calling me gay when I’m not doesn’t — or can it?

We were all told when we were younger that sticks and stones can break our bones, but that words could not. While it is still true that words cannot break our bones, words can be actionable as defamation under the law. Until recently, it was defamation per se in New York to falsely accuse someone of being a homosexual. This means that all one needed to prove was that the statement was made and that is was false. Special damages were assumed. The recent decision by the Appellate Division, Third Department, in Yonaty v. Mincolla, changed all of that.

In Yonaty, the plaintiff, a male, alleged that a defendant, a female, falsely accused him of being a homosexual. As a result, the plaintiff alleged, he lost his girlfriend. The defendant moved to dismiss the plaintiff’s defamation claim on the ground that he did not allege special damages, such as lost profits or revenues, even assuming he was not a homosexual. The lower court denied the motion because of long standing law in New York, such as in cases like Klepetko v. Reisman, 41 A.D.3d 551, 552 (2d Dep’t 2007), which have held that falsely accusing someone of homosexuality was defamation per se, which means that damage was assumed. Examples of other defamation per se categories include accusing someone of being a felon or having a loathsome disease, such as herpes.

The Third Department in Yonaty ordered the dismissal of the plaintiff’s complaint because he did not allege damages. In so holding, the Court contravened cases like Klepetko. That’s because, these prior decisions were, in the words of the Court, “based upon the flawed premise that it is shameful and disgraceful to be described as lesbian, gay or bisexual. In fact, such a rule necessarily equates individuals who are lesbian, gay or bisexual with those who have committed a ‘serious crime’  – one of the four established per se categories.”

Nevertheless, the Court’s ruling still leaves the door open for defamation claims arising from false allegations of homosexuality that may, in fact, involve special damages. Assume, for example, that someone falsely claims a boy scout leader is a homosexual. Under the Court’s ruling in Yonaty, the leader may be able to claim defamation if he can show that (1) he is not a homosexual and (2) that he lost his job because of the false statement. The Boy Scouts of America currently prohibit homosexuals from occupying positions of leadership. Thus, the Court’s reasoning accepts that while society has changed in some areas concerning stereotypes surrounding sexual preference, it has not changed in others.

What is good for the goose is good for the gander.
By Ryan Long

What is good for the goose is good for the gander.

Banksy and other graffiti artists are gaining increased commercial acceptance in the traditional art world. The Los Angeles Museum of Contemporary Art recently had an exhibition called Art in the Streets featuring artists such as Banksy and others. But whether such artists’ works are protected by the Copyright Act, among other legal doctrines, is unclear. There is paltry case law on point.  We recently found this out when researching the issue for a somewhat famous — or some might say infamous — New York graffiti legend.

The Copyright Act generally protects creative works fixed in a tangible medium. Song lyrics are a good example. When Bob Dylan writes his song, All Along The Watch Tower, on a piece a paper, he can register the song with the Copyright Office. Only then can Mr. Dylan can than pursue others for using the song unlawfully. Many federal courts require a work to be so registered before suit can be brought by the artist for damages, attorney’s fees, and statutory damages.

But what about creative works that are fixed by graffiti artists all around New York City’s walls and subways? Assume Banksy paints the picture above on a Fifth Avenue wall. Could he then go and register the work with the Copyright Office, just as Mr. Dylan did with his song? Even if he can’t, does that mean Bansky has no legal protection? The questions are simple. But the answers are not so clear.

There are no cases directly on point. There is one case from the Northern District of Illinois, entitled Villa v. Pearson Education, Inc., in which the court denied the defendant’s motion to dismiss the graffiti artist’s copyright infringement claim because there was an issue of fact whether his art was illegal. There is also another case pending overseas between graffiti artist CanTwo and the Spanish Olympic Committee, reports the Wall Street Journal in CanTwo Says “Can Not!” to Spanish Swimmers. But that case is not yet decided and it involved apparently legal graffiti.

While this uncertainty is troubling, a graffiti artist should nonetheless be able to argue that a gallery is unjustly enriched when they sell a photo of his work but don’t pay him even if he does not have a copyright claim. That’s because what is good for the goose is good for the gander. If a gallery is going to commodify the artist’s graffiti efforts in a secondary market, it will be hard pressed to argue that the artist has no rights in the primary market because the work was illegal.