Monthly Archives: August 2009

From the Small Screen to the PC Screen: File-Sharing of TV Programmes & Movies on the Increase

According to the BBC and research conducted by Big Champagne ahead of their address to the Edinburgh Television Festival, millions of internet users are increasingly using the web to illegally download TV programmes and Movies, in many cases mere days after they have been broadcast on TV or released in the Cinema.

Whilst online music piracy has been dominating headlines over the past week in the wake of Lord Mandelson’s plans to toughen up recommendations in the “Digital Britain” report by cutting off persistent music file-sharers, Big Champagne’s research suggests that illegal downloading is becoming a bigger problem for the Film and TV industry.

It’s worth noting that the figures quoted in Big Champagne’s findings are nowhere near as bad as the situation in the music industry, and that most of the traffic in filesharing of BBC properties such as Top Gear is actually coming from America rather than the UK, presumably due to the huge success of the iPlayer and the fact that many BBC shows tend to air in the US later than in the UK. Most of the major UK TV channels are ahead of the game here by offering much of their programming for free or via subscription as legal downloads over the web, and Sky now allows its subcribers to watch anything that they broadcast over the Sky Player, cutting down the need to download illegally.

If you take a closer look at the figures the major casualties of Movie and TV Piracy are American dramas such as “Heroes”, “Lost”, “24” and “Prison Break”. All of these shows are made by major American networks who also have a movie production arm and who release these series on DVD or Blu-Ray shortly after they are shown, usually generating huge profits. This is a major source of revenue, especially important considering the fact that most major American dramas now have very high production values and feature major Hollywood Stars such as Tim Roth, Glenn Close and Keifer Sutherland. This will mean that they get more and more expensive to produce, making DVD and Blu-Ray revenues a vital source of income and a way to break even on production costs much more quickly.

This is obviously going to be seriously affected by the shows being downloaded illegally, and the networks have already taken action against YouTube in the US to ensure that entire series are not made available for free. Viacom, the parent company of Paramount Pictures, MTV and Nickleodeon, famously sued YouTube for $1 Billion in 2007 for what it described as “massive international copyright infringement”, with 160,000 clips of its programmes allegedly being shown without permission and after a sharp drop in its share price. The BBC followed suit, as did the Premier League, each demanding that clips be taken down from the site. Disney, however, have now reached a landmark agreement to create new “channels” on the site.

The arguments over the industry being the cause of its own downfall are similar for the Music, TV and Film Industries. However, while we’ve always had to pay for music and films, TV has usually made its income through advertising revenue. This all changed with the introduction of pay-per-view and subscription services and the phenomenal success of TV properties in the Home Entertainment market with the introduction of DVD as a viable format. The sheer size of VHS tapes meant that buying whole series was very expensive and unpractical, but these days entire runs of programmes such as 24 continue to generate huge revenues for studios, usually due to discounts on retail prices after their initial launch. This is now a big business for the TV industry and a much easier way for them to be profitable in a time when advertising revenues are generally down. Whilst the problem isn’t as bad as it will probably get for the world of the small screen, it’s certainly now very much on their radar.

The situation is far worse, however, for the movie industry due to the fact that it’s driven solely by ticket sales and the home entertainment market. The average Hollywood blockbuster is now becoming far more expensive to produce, with Terminator 2’s record budget of $100 Million in 1991 now a distant memory. Many releases now depend upon DVD and Blu-Ray revenues to become profitable and many movies now reach their audiences much more easily on the small screen rather than in cinemas, such as this year’s “Watchmen”. Budgeted at somewhere around $130 Million, the film made around $185 million internationally and was considered a minor “flop”. However, it has already made an additional $50 million in the US alone, is currently the number 1-selling Blu-Ray of all time and was the number 1 downloaded movie on iTunes on release. The chances are that it will turn out to make nearly much as it did in cinemas, but the flipside of these figures is the fact that “Watchmen” is also currently the most-pirated movie on the Web, being downloaded over 16 million times. If each of these represented just one legal download on iTunes, lost sales could be in the region of around £160 million.

Whilst this figure is way lower than the 54 million downloads for “Heroes”, the movie industry is now taking piracy very seriously, particularly following the leak of 20th Century fox’s summer blockbuster “Wolverine” in a DVD-quality form in April this year, which many claim led to a good but worse-than-expected performance at the Box Office. Cases have already been fought and won in the US against large-scale AND individual filesharers and, given Lord Mandelson’s new harder stance on filesharing, it surely can’t be too long before the first cases make their way into a UK Court.

At the end of the day, whether or not it is deemed socially acceptable, the law says that downloading Music, Movies and TV is an infringement of Copyright which can lead to both a civil claim from the owners of the material or a criminal prosecution, whose maximum fine will now be increased from £5000 to £50,000. Movie and TV producers are already making much of their content available legally, and as such the argument that they are behind the times doesn’t stand up quite as well. Whatever the case, if it’s worth copying, it’s worth protecting. Downloaders and Filesharers need to be very much aware that Movie and TV properties will now probably be protected much more fiercely.

Breaking News: Illegal Downloaders to be “cut off” from the Internet as Mandelson gets tough on Piracy

Copying and sharing music over the web with other internet users without permission from either a Record Label or the Artist – has been a hot topic in the Press for some time, with research claiming that there could well be over 7 million illegal filesharers in the UK.

Against a backdrop of falling CD and DVD sales, the Government has now been forced to acknowledge the scale of the problem, which many claim is now beginning to seriously affect the UK’s ability to launch new artists as well as putting a serious dent in the fortunes of established artists, who are increasingly seeing their new releases previewed on the Web before release.

For some time, the Government has been looking for a solution to the problem after increasingly loud demands from the Music Industry to do something about it. The most obvious target has been Internet Service Providers, who the Industry claims should do more to curtail the sharing of music files between their users. Virgin and several other UK Internet Businesses such as Talk Talk have already come out on the side of the artists (perhaps understandably in Virgin’s case given Richard Branson’s history in the Music world), promising either to block “peer to peer” or “P2P” software or to send out letters to their users to force them to stop.

The Government’s recent “Digital Britain” Report places a huge amount of importance upon dealing with the problem, but still fell short of expectations from Rights Owners. Now, however, Peter Mandelson has suggested in a statement today that he plans to take a much tougher stance by disconnecting File-Sharers from the Internet altogether, a move which the Entertainment Industry has been screaming for over the past few years but which the Government has always stopped short of.

Lord Mandelson’s apparent new approach fits in very well with the Government’s aim to protect the UK’s “knowledge economy” and ensure the survival and prosperity of the music industry. However, not all Artists agree with him, notably Thom Yorke of Radiohead, who has suggested that listeners download illegally due to an absence of “good music” on mainstream radio and Chris Martin of Coldplay, who has said in the past that the traditional arrangement of being signed to a major label is “like living in your grandparents’ house……[the standard major label approach] is obviously an antiquated model because of the internet.” Lily Allen, however, believes firmly that the public should have to pay for their music and that “there’s no money going to bands any more.”

We’ve seen high-profile trials in the US over the course of the past few months with a mother-of-four and a student being forced to pay a combined total of over $2 million for downloading a relatively small number of songs (although they were portrayed as “habitual offenders” who had downloaded hundreds in the past). This looks like the long-awaited start of the crackdown in the UK and it’s probably only going to be a matter of time before the first major case against a member of the public rather than a commercial downloader gets underway.

What the Government is doing is accelerating the process which began with the Digital Britain report of addressing the issue of illegal downloading and tackling it head-on. The Report suggested a number of technical measures to crack down on piracy and handed over much of the responsibility for doing so to Ofcom, who had until 2012 to report back on whether or not those measures were necessary. Now, though, the Government has said that this is simply “too long to wait given the pressure put on the creative industries by piracy.”

Part of the proposed new regime will be the grant of wider powers to Lord Mandelson to introduce such technical measures himself, rather than leaving it up to Ofcom, a move which has already drawn criticism from ISPs, partly due to the fact that one of the proposals suggests that the cost of protecting copyright on the web should be split on a 50/50 basis between them and the entertainment industry. ISPs have argued very strongly that this really isn’t their problem and that they can’t be expected to police the activity of their users, but this measure would suggest that they will at least be expected to pay towards doing so in exchange for the revenues generated through providing access to the Web in the first place.

Not only that, but ISPs will now be expected to provide detailed information on the activities of their users – they probably won’t agree to do so without a fight. A major problem is the fact that ISPs will not necessarily be able to tell exactly who is downloading – there is every possibility that several members of a household use one connection to the Web and this may mean that prosecutions or civil actions may be much more complicated and therefore more costly. Virgin ran into this problem last year when they sent out letters to various users which they suspected of using peer-to-peer services only to be told that the recipients had no idea as to who was responsible.

The Statement from the Department for Business, Innovation and skills does say that disconnection is still a weapon of last resort and that a halfway house would be to slow down broadband access to repeat offenders, but what’s really significant is that this is the first time that cutting users off has been acknowledged as a real option, following the refusal to implement a “three strikes” regime earlier this year. Much of the criticism of this new approach revolves around the fact that it comes before the end of the consultation process on the findings of the Digital Britain Report and essentially overrules many of its findings.

Rumours suggest that this move has come about following a meeting between the Business Minister and David Geffen, founder of Geffen Records and Dreamworks Films, a long-standing advocate against illegal downloading and the man responsible for launching the careers of artists such as Guns N’ Roses and Nirvana and re-launching the careers of Aerosmith and John Lennon. It’s ironic that an angry approach from a consortium of major labels earlier this year didn’t have the same effect but then again, David Geffen is one of the most important and richest figures in the entertainment industry whose philanthropy is just as well known as his success. This may mean that he cuts a more sympathetic figure than other heads of major labels, who the public may feel can stand to lose money after overcharging them for CDs.

However, a tougher approach may well turn the Public against the idea that musicians are struggling (especially as the credit crunch continues to bite) and it would be far more useful to look at the way in which the older business models that depend upon the sales of CDs can be abandoned to allow the music world to really embrace the new digital arena and make more material available for legal download, which many believe is a big part of the problem. The Beatles, for example, are a major hold-out in this area.

The key approach will be to properly educate the British public on why this is such a problem and the real and significant effect which it has on the UK’s entertainment industry. The fact remains that the law is the law, regardless of whether the public likes it or not – if you download illegally, you infringe copyright and that infringement can lead to civil and criminal penalties. However, if the Government attacked the problem in the same was as they have with the Movie Industry, more and more people may well be willing to pay for their downloads if they learn to appreciate that this kind of file-sharing is having a profound effect upon the music which makes up the soundtrack to their lives.

Have the Beatles FINALLY joined the Digital “Revolution”?

After years of bitter litigation, it now looks as if both apples are now ready to be sold from the same cart. Rumours suggest that the Beatles are finally coming to iTunes.

The Band has long been one of the last major artists to hold out from making their music available through iTunes, and many pro-downloading campaigners have argued that this approach has led to widespread filesharing of the Fab Four’s songs.

However, with the announcement of the release of the digitally-remastered versions of the Beatles’ back catalogue on September 9th coinciding with what Apple have described as a “music-focused media event” and the release of the new “Beatles Rock Band” game, many are speculating that some of the most iconic music of the 20th century may now finally find its way online.

Many music fans and media lawyers thought, and still do think, that the Beatles’ songs will never end up being sold through iTunes, and with a very good reason.

Apple Inc. and Apple Corps., the Beatles Record Label, have had a fraught relationship over the years which led to a very long-running court case over Apple Inc.’s use of the “Apple” Branding. Legend has it that George Harrison came across an advertisement for Apple Computers and asked who was using their logo, which led to Apple Corps. suing for Trade Mark Infringement in 1978, with the case eventually settling in 1981 after the two sides reached an agreement whereby Apple Inc. would not enter the music business and Apple Corps would not enter the music business.

This lasted until Apple Inc. added rudimentary music software to their computers in the early 90s, which led Apple Corps. to sue again and a refinement of the deal between them giving Apple Corps the right to use “Apple” on “creative works whose principal content is music” and Apple Inc. the right to use “Apple” on “goods or services used to deliver such content”, but not for any physical musical materials.

Enter iTunes and the iPod, which reignited tensions between the two via a claim for breach of contract. Apple Corps lost this case on the basis that iTunes merely distributed music rather than created it. Apple Corps were then set to appeal the judgment before the ongoing trade mark claim was settled in 2007, with Apple Computers now owning the “Apple” trade marks and licensing them back to Apple Corps. This fuelled speculation in 2008 that Sir Paul McCartney had brokered a deal which would see the Beatles’ catalogue sold via iTunes to the tune of a rumoured $400 Million, although Apple Computers denied it, with discussions apparently reaching an impasse late last year.

Both sides clearly recognise that there is a vast amount of money to be made through selling the music of arguably the most popular and influential band of all time via iTunes, and after Led Zeppelin and Metallica (some of the other major hold-outs) finally reached agreements to make their back catalogues available, this surely is only a matter of time. No-one could have foreseen iTunes’ popularity when it launched and selling the Beatles’ music through iTunes will allow their music to reach a whole new audience.

As far as the trade mark case was concerned, it could have gone either way, but as a deal has now been reached, both sides stand to make a serious amount of money. In any event, a deal would allow the surviving Beatles to severely curtail the need for their fans to download their music illegally. That may be the next dispute that the Beatles find themselves involved in.

Pimm’s v Sainsbury’s – Not A Pretty Pitcher

One of the most iconic and most uniquely British brands in retail has found itself at the centre of what could be a very “bitter” dispute between its manufacturer and one of the UK’s largest supermarket chains.

Reports suggest that Diageo, the world’s largest premium drinks business responsible for brands such as Smirnoff, Johnnie Walker, Baileys and Guinness are about to take legal action against Sainsbury’s over their launch of “Pitchers”, their own version of Diageo’s “Pimm’s”.

Pimm’s has been something of a British institution for over a hundred years, with six different versionsbased upon the alcohol used to make them. The most popular version is Pimm’s No.1, long a staple of Wimbledon and the Henley Regatta as well as an increasingly popular pre-mixed drink in 250ml cans with Lemonade, finding favour with a whole new generation of consumers since Diageo purchased the brand in2006 and launched a number of extensive and successful advertising campaigns.

Diageo’s claim is based on Copyright Infringement, and follows Sainsbury’s launch of “Pitchers” as“synonymous with summer” and “cheaper than the branded equivalent”.

Sainsbury’s claim that their customers are “savvy enough to know exactly what they’re buying, the clue is in the name” and that there is “no basis” for Diageo’s allegations.

This kind of case is nothing new. Asda found themselves involved in a very protracted dispute with United Biscuits over 10 years ago after the Supermarket introduced “Puffin” biscuits as a competitor to the “Penguin” Brand.

The issue here was “passing-off”, which is a different cause of action to Diageo’s claim for copyright infringement. Passing-off deals with situations where a business can show goodwill in either the business as a whole or in one of their products which is traded upon by a competitor who attempts to mislead customers by confusing them into thinking that there is some kind of connection between the two.

In that case, United Biscuits won because the Court found that the packaging of the “Puffin” was deceptive by virtue of the fact that it also had an image of a “sea bird” with “dark colouring and a white front”; this and the use of the word “Puffin” suggested some kind of connection between the two.

This hasn’t deterred retailers in the meantime, with many now selling their own brand alternatives alongside market leaders. The Credit Crunch will probably make the situation worse as many Customers may find themselves hesitating to buy a “brand name” when they can have a cheaper alternative and when the makers of the branded version occasionally also manufactures the cheaper version under a different name. It’s perhaps this concern that has led Diageo to take action to avoid what they may well see as a threat to the value of their brand.

If the claim is based on copyright infringement, then it may be because of the similarity between the two labels-the artwork on both will be protected by copyright as an “artistic work”. Infringement takes place when a “substantial part” of an existing image is used in another, and these cases tend to be much easier to fight than passing-off cases, which would usually require evidence of confusion in the marketplace.

This is usually proved via survey evidence, as took place in the Neturogena v Neutralia case a few years ago.

It may be that Diageo have gone for what they see as the easier claim, but I’d be surprised if any Court case didn’t also contain allegations of passing-off and or trade mark infringement, as I’m sure that a number of trade marks will apply to the Pimm’s packaging, even if the name is further away from Pimm’s than Puffin was from Penguin.

What’s interesting is the fact that Sainsbury are one of Diageo’s biggest customers and that they don’t think that their relationship with the retailer will be affected.

There are a number of conflicting legal points at work in this dispute, but behind all of them is a commercial relationship which both sides will be very keen to maintain. Diageo are, after all, one of the biggest Drinks producers in the World and Sainsbury’s would have a lot of empty shelves in their Wines and Spirits aisle if Diageo chose not to deal with them any more.

That’s very unlikely, especially as Diageo themselves will not be keen to fall out with one of the UK’s longest-standing food retailers, serving 18 million customers a week through nearly 600 stores.

In any event, this may simply be the start of a new approach to this kind of case. We’ll have to wait and see-anyone for an Injunction??

The Pirate Party v Peter Mandelson v The British Public: The Crackdown on Illegal Downloading Begins

Online filesharing – downloading and sharing music with other internet users without permission from either a Record Label or the Artist – has been a hot topic in the Press for some time, with research claiming that there could well be over 7 million illegal filesharers in the UK. The Music Industry and the Government has now been forced to acknowledge the scale of the problem, which many claim is now beginning to seriously affect the UK’s ability to launch new artists and for them to have a successful career as well as putting a serious dent in the fortunes of established artists, who are increasingly seeing their new releases previewed on the Web before release.

For some time, the Government has been looking for a solution to the problem after louder and louder demands from the Music Industry to do something about the problem. The most obvious target has been Internet Service Providers, who the Industry claims should do more to curtail the sharing of music files between their users. Virgin and several other UK Internet Businesses such as Talk Talk have already come out on the side of the artists (perhaps understandably in Virgin’s case given Richard Branson’s history in the Music world), promising either to block “peer to peer” or “P2P” software or to send out letters to their users to force them to stop. 

The Government’s recent “Digital Britain” Report places a huge amount of importance upon dealing with the problem, but still fell short of expectations from Rights Owners. Now, however, the debate over filesharing is very much back in the political agenda with the announcement that the “Pirate Party”, a political body looking to legalise non-commercial downloading, will contest seats in the next General Election.

The Pirate Party entering UK politics has only been a matter of time since its Swedish counterpart won a seat in the European Parliament in June this year. It’s perhaps an indication of how strongly the public feels about the issue that the Telegraph has reported this weekend that around a hundred people an hour are joining the Party, who want to balance the public and music industry’s interests by legalising non-commercial downloading whilst ensuring that Artists receive a fair financial reward for their creativity.

However, they’re saying this against the background of their claim that the current period of copyright protection for musical works of 50 years should be reduced. This goes directly against the Artists’ position, and against the notable public claims by bands who had their first hits at the birth of modern Pop Music in the 1950s (including Cliff Richard) that copyright protection should in fact be extended to allow them to earn royalties from their material well into their old age via new technologies such as iTunes. This is an argument that has found some favour in Europe, where proposals to extend the period of protection from 50 to 70 years are already underway.

What the Pirate Party has done and will do is to highlight the debate over filesharing and drag it into the political arena. It’s interesting to note that the Business Secretary Lord Mandelson has apparently indicated this weekend that he is now coming round to the idea of tougher sanctions for illegal downloading, which could in theory include a maximum fine of up to £50,000 and the restriction of internet access. The Digital Britain report placed making broadband available to as much of the UK Population as possible at the heart of this recommendations, and this may be a sign that access may come at a price as the Government takes some of the more stringent action that the Music Industry demanded before the report was published in the wake of a consultation on the report’s findings.

Lord Mandelson’s apparent new approach fits in with the Government’s aim to protect the UK’s “knowledge economy” and ensure the survival of the music industry, but not all of the Artists agree with him, notably Thom Yorke of Radiohead, who has suggested that listeners download due to an absence of “good music” on mainstream radio and Chris Martin of Coldplay, who has said in the past that the traditional arrangement of being signed to a major label is “like living in your grandparents’ house……[the standard major label approach] is obviously an antiquated model because of the internet.” Lily Allen, however, believes firmly that the public should have to pay for their music and that “there’s no money going to bands any more.”

We’ve seen high-profile trials in the US over the course of the past few months with a mother-of-four and a student being forced to pay a combined total of over $2 million for downloading a relatively small number of songs (although they were portrayed as “habitual offenders” who had downloaded hundreds in the past). This could be the long-awaited start of the crackdown in the UK and it’s probably only going to be a matter of time before the first major case against a member of the public rather than a commercial downloader gets underway.  

However, a tougher approach may well turn the Public against the idea that musicians are struggling (especially as the credit crunch continues to bite) and it would be far more useful to look at the way in which the older business models that depend upon the sales of CDs can be abandoned to allow the music world to really embrace the new digital arena and make more material available for legal download, which many believe is a big part of the problem. The Beatles, for example, are a major hold-out in this area.

The other key approach will be to really educate the British public on why this is such a problem. The fact is that the law is the law, regardless of whether the public likes it or not – if you download illegally, you infringe copyright and that infringement can lead to civil and criminal penalties. However, if the Government attacked the problem in the same was as they have with the Movie Industry, more and more people may well be willing to pay for their downloads if they learn to appreciate that this problem is having a profound effect upon the music which makes up the soundtrack to their lives.

The Man Of “Steal”?

The movie industry has always made its fortune on the back of memorable characters and in a market where such icons are becoming fewer and further between, many movie studios have turned towards comic book properties to develop movie franchises, especially where the character is already recognisable by the general public. The phenomenal success of “The Dark Knight” and the “Spider-Man” franchise is perhaps a good indicator of the public’s affection for long-standing comic book heroes; even lesser-known titles such as “Iron Man”, “Watchmen” and “Wolverine” have now become hugely successful movies in their own right, and Hollywood shows no sign of backing away from Superheroes as a source of income.

Warner Bros. in particular have always led the way in this genre, releasing the first “Batman” movie in the late 1980s, and the first “Superman” movie at the end of the 1970s. Warners is the parent company of DC Comics, who are the publishers and owners of both characters and has a slate of similar properties scheduled for release over the next ten years based on lesser-known characters such as “The Flash” and “Green Lantern” as well as a re-launch of the “Superman” franchise and a project featuring all of their Superhero characters and including Superman AND Batman: the long-anticipated “Justice League”.

Although 2006’s “Superman Returns” was not the huge success Warners hoped for, earning around $400 Million worldwide against a budget of $200 Million, the studio are looking to get another instalment in cinemas for a number of reasons, one of which is the character’s ongoing status as a pop culture icon over 70 years after his first appearance (coming in at second on VH1’s “Top Pop Culture Icons” 2004 Survey) and the fact that, if they don’t move quickly, Warners will lose the right to use the character at all in any future movies.

To cut a very long story short, the family of Superman co-creator Jerry Siegel have been in a dispute with Warners for the past few years in an effort to gain ownership of the copyright in the character of Superman. Superman was originally created in 1938 by Jerry Siegel and Joe Shuster for DC Comics and became popular almost immediately – so much so that a bitter copyright dispute broke out in 1946 between the publisher, Siegel and Shuster, when the creators claimed that they had never been paid enough for their work on the character and attempted to win the rights to what was becoming one of the most successful fictional characters of the 20th century.

The Court ruled against them then, finding that DC Comics had validly purchased the rights to the character, which led to Siegel and Shuster largely retreating into obscurity until 1967, when a second unsuccessful attempt was launched to obtain the rights to the character which they created.

In 1975, both launched a publicity campaign to protest at how they had been treated by both DC and their new parent Warners over the years, which saw the writers being awarded a lifetime pension of $20,000 a year. After Siegel’s death in 1996, his family attempted to terminate DC and Warners’ copyright of the character, which eventually came before the Court again in 2004 when the family issued copyright infringement proceedings against Warner Bros. and to decide how much of a share of the copyright in Superman belonged to Siegel’s estate.

After the best part of 70 years, a Judge in California decided in June 2008 that Siegel was entitled to a share in the copyright and, as such, a share in Warners’ profits from the character, although only since the current copyright dispute began in 1999. This was only part of the case, however. At the trial in July of this year, the Judge ruled that Siegel and Shuster would become the owners of the copyright to Superman in 2013. This is a huge ruling for copyright law and, although an American decision, was decided along similar lines to the case of Fisher v Brooker – the Whiter Shade Of Pale case – what saw organist Fisher awarded a share in the copyright of one of the most popular songs ever released.

What’s also common in both decisions is that fact that the Court only allowed the Claimants to recover damages from a much later date than the original release; in Brooker’s case he will only be entitled to ongoing profits made by “Pale” and in the Superman case, Siegel and Shuster are only entitled to claim against DC Comics rather than their much more wealthy parent company and only for profits made after 1999, when the film rights to the character were renegotiated.

Amongst all of this legal argument, the most important issue is that in four years time, neither Warners or DC will be able to do anything with their most popular character without the permission of the families of his creators. Warners is now under tremendous pressure to get their next Superman movie off the ground before the Court’s deadline of 2011, and given that “Superman Returns” was in development for well over 10 years before reaching the screen, Warners may end up in a position where they have to rush out an inferior project which could ultimately have a knock-on effect upon audiences, who may not choose to come out in similar numbers for any subsequent sequels.

Not only that, but over the past week Siegel has won the copyright to various parts of Superman’s backstory, which means that any film projects which Warners can get underway will not be able to use certain key elements of the other movies and comics. This means that all future projects involving the “Man Of Steel” will need to pay a large chunk of their profits to the families of his creators, which many may feel is perfectly fair as the general position has always been that whoever created the written, musical or graphic work is the owner of any copyright which attaches to it.

The lesson here, then, has to be that wherever your business is based, you must deal with the ownership of copyright at the earliest possible opportunity, whether a comics company, a movie studio or ANY business that places value on any kind of written, artistic or musical work. If not, and the original creators decide that they weren’t given a fair share of a popular character, the Courts may now allow them a much longer period of time than you may expect to claw back any rights and one of the cornerstones of your business could be in serious jeopardy. You may end up falling victim to a villain that even the Man of Steel can’t defeat – the Lawyers.

The Times They Are A-Changing? – US Student ordered to pay £400,000 to Record Labels for Illegal Downloading

In a sign that the Music Industry is becoming more and more willing to take action against individuals and “soft” targets in the fight to curtail illegal downloading, a US Student has been ordered to pay over £400,000 in damages to four different record companies for downloading and sharing just 30 songs in the second case between the Recording Industry and an individual to actually reach a trial.

In a significant move, the Federal Jury awarded Joel Tenenbaum, a student at Boston University, to pay $22,500 for each of the 30 songs on which the case was based, which included tracks by artists such as Green Day, Nirvana and the Smashing Pumpkins, rather than the maximum $150,000 per song in cases where “wilful” infringement can be shown or the $30,000 per song damages figure to which the labels are usually entitled.

This is an American case and as such it’s easy to dismiss it as another example of an overly litigious approach by the US Music Industry to sue its own audience, which has at times resulted in a public relations disaster that has led them to being working with Internet Service Providers to deal with the problem and not filing any new claims in this area since 2007. However, in the wake of the Digital Britain report and moves by the Entertainment Industry to take similar tougher action in the UK, this judgment may well be indicative of the shape of things to come.

Copyright Law in the US is significantly different than in the UK, with a defence of “fair use” (similar to our “fair dealing” provisions), which allows a copyright-protected work to be used for certain purposes such as non-profit educational use, use not of a commercial nature and a number of other exceptions dependent upon the “character” of how the work is used. Even so, when a US court considers fair use, it does have to consider the prupose and character of the use in question as well as the effect of that use upon the market for that work.

Tenenbaum’s lawyer was not permitted to argue fair use in this case and it’s arguable that if he was, he could have convinced the Jury that these 30 songs being shared by one person would not have had a major effect upon the music industry as a whole. He also asked for the Jury to award damages of 99 cents for each song, which would have been the price he would have paid for them had he downloaded them legally.

However, Tenenbaum admitted actually downloading over 800 songs over a 10 year period and was referred to by Lawyers for the four record labels who brought the case as a “hard-core, habitual infringer.”

This case follows the recent and equally high-profile trial of Jammie Thomas-Rassett in June which saw the mother of four ordered to pay $1.92 million in damages to six record labels after downloading 24 songs. You could argue that this wouldn’t happen here, but it should be borne in mind that the maximum fine for criminal copyright infringement in the UK has now been raised from £5,000 to £50,000 and Record Labels are continuing to suggest that action will now be taken against “softer” targets such as students and teenagers to drive their deterrent home.

Under UK law, we’d have to look at similar issues to the US cases. Here, it is an infringement of copyright to copy a song via a P2P file-sharing service onto your computer but it’s also an infringement to make a copy available to the public via uploading it for other users to copy from you. This is the major issue behind illegal downloading; people sharing their entire record collections with the world in such a way as to prevent record companies charging for them. Either way, copyright infringement is punishable by the Civil courts through claims being brought by Copyright Owners but it’s also a criminal offence punishable by an unlimited fine.

Previous cases in the UK have seen very large-scale downloaders punished, but so far the Music Industry has refrained from going after users who have copied a smaller amount of material. Without Government intervention (which hasn’t been forthcoming so far) the only way for the BPI or record labels to really make their point would be to sue downloaders individually, which would lead to huge legal costs and most likely see the Courts flooded with similar claims. It’s also not straightforward to prove exactly who downloaded illegally when a number of people use the same computer.

Perhaps the main issue, however, is that Tenenbaum has said that he’ll petition for Bankruptcy if the verdict stands as he simply can’t pay the damages. This is the major problem for the Music Industry. Copyright cases are usually expensive for a Record Label to litigate and there’s no guarantee that a “man in the street” would be able to pay the Claimant’s costs if a claim came before the Civil Courts, or even a fine in the Criminal Courts, potentially leading to a number of phyrric victories which will almost certainly generate a huge amount of bad publicity in exchange for creating a deterrent which will take some time to filter through into the public consciousness.

Even so, it’s probably only a matter of time before the first major deterrent case against an individual filesharer in the UK. It’s very doubtful that a UK Court would ever award such a huge amount in damages as has been the case in the US, mainly because our system would value the damages payable for each song at the sale price charged for it and then consider the number of times it has been copied to come up with a figure. It’s a fairly safe bet that the Royal Courts of Justice won’t award £50 to 60,000 for a song which could be purchased via iTunes for around 80p. Any criminal penalties, though, could be very severe if prosecutions are brought after the proposed raising of the maximum fine.

Until the public gets the message that copyright infringement is harming the entertainment industry and that illegal downloading is wrong, then this kind of case will start to become common in the UK. The public are understandably sceptical of the industry’s motives and it’s very fair to say that record labels must shoulder a lot of the blame by failing to make as much material available for legal downloading as they could and working to archaic business models which sees them sometimes charge over the odds for a CD, but the fact is that for the time being at least, the law is the law and ignorance is no excuse.

The Libel Trade: Are actions for Defamation of Business Reputation becoming part of PR strategy?

Following the announcement that the Economist has reached a settlement in a libel action brought against them by both Russian Oil Tycoon Gennady Timchenko and his Oil Company Gunvor, research from leading legal publisher Sweet and Maxwell (as published in The Times) suggests that the number of libel actions brought by businesses is on the increase as they fight to protect their reputations. The research suggests that the number of claims buy businesses has trebled over the last 12 months.

The traditional view has always been that defamation claims – i.e. libel, slander or malicious falsehood, are mainly used by celebrities to manage a PR disaster or correct a tabloid when a story is published which paints them in a negative light. However, times have changed and, as celebrities increasingly turn to privacy actions to maintain their public image, the approach of Businesses to their reputations and to libel claims appears to be changing with them.

The main reason for this is probably the fact that we now live in a world where reputations can be made or unmade in a much shorter time through either the traditional press or via online media; where news can leak much more quickly and reach a much greater number of people.

The Court has dealt with a number of cases over the past ten years or so dealing with the growing problem of internet libel; the growth of the Web into Web 2.0 has meant that rather than a website presenting information to the world with users only being able to read what’s said without offering an opinion, anyone can now have their say on virtually anything, which can lead to negative opinion snowballing, especially if there are other users who agree with what is said and make their own opinion heard.

Not only that, but whilst the credit crunch continues, the public is becoming more and more curious about exactly what businesses are doing and how it may affect them, meaning that, as in the cases of Northern Rock and Apple (who were recently forced to deny rumours that Steve Jobs would have to leave his post as CEO due to illness), share values could be directly affected by negative publicity in a much shorter period of time.

PR is becoming more and more important to businesses and as such, reputations are being defended more fiercely. A case in point is the action brought by Morrisons against the OFT following accusations of anti-competitive trading in dairy products, which saw the OFT issue a public apology and agree to pay the retail giant’s court costs and a sum of £100,000 in damages. A further example is Tiscali’s very public dispute with BT over a letter sent out during takeover talks which suggested that broadband customers should switch to BT  – Tiscali claimed that the letter implied that their service would be affected.

In the Web 2.0 world, articles and news items such as this will repeatedly appear online, which from a libel point of view means that the likely award of damages could be far higher than a case involving a newspaper simply because more people can read them. Not only that, but libel cases allow Claimants to bring proceedings against whoever is responsible for “publishing” the offending statement (i.e. passing it on to other third parties or being involved in the process), which can in limited circumstances include Internet Service Providers and Websites who may operate bulleting boards which contain defamatory material. These third party links in the chain do have a defence to such claims, but one that only has any chance of working if the material forming the complaint is taken down pretty much immediately. The Court dealt with this over the course of last month in the Metropolitan Schools & Designtechnica case, which saw Google unsuccessfully sued over defamatory comments which appeared in search engine results. As such, comments are usually removed from websites very quickly to avoid such claims which in turn means that if you act quickly, then you can stop unfair rather than bad news travelling quite as fast. The fact remains, however, that once information is out on the web, it’s very difficult to put the genie back in the bottle.

Businesses find themselves at present in a very precarious position, especially in the financial sector, where bad publicity can deter potential investment. This doesn’t mean, however, that issuing a claim is mandatory or inevitable. There is a procedure in place as part of the Court Rules to ensure that complaints are put to the offending publication or third party before a case comes before a Judge, mainly designed to ensure that the parties try to settle claims where possible and thereby avoid what can be very costly litigation, especially given that many libel claims are fought under “no win, no fee” arrangements where the losing party pays a higher proportion of the winner’s costs. Alternatively, a number of other options are available and can at times be used in conjunction with a libel claim, such as a compliant to the ITC or Press Complaints Commission (both of which are free of charge). In many cases, libel claims settle without ever reaching Court, but given that you only have a year to make them it’s important to set out your complaint in writing as soon as possible.

What is clear is that the reputation of any business has become increasingly fragile. As the credit crunch continues and the press becomes increasingly forced to report “edgier” stories to guarantee circulation where traditional print media is in decline, more businesses will find themselves under attack or subject to scrutiny and it’s important to work with both your PR agency and your lawyers to make sure that, where there is a legitimate claim that your reputation has been damaged unfairly, action is taken as quickly as possible. It’s not always true that there’s no such thing as bad publicity, especially when it’s inaccurate.