Trademark Trends in Webcomics

By: Tifanie Jodeh Acosta

Aubrey Gibson

Trademarks have become the backbone of our modern economic world without consumers even realizing it. Trademarks such as Disney’s Mickey Mouse, Epic Games’ “Fortnite”, Rovio Entertainment’s “Angry Birds” have given companies the ability to build massive empires and rake in billions of profit each year from their die-hard fans. So, what is a trademark exactly? A "trademark" offers federal protection of logos and brand names from copying and unauthorized use. This includes all words or phrases that make up a name and of logo. Trademark protection aims to ensure that consumers are never confused, while in the marketplace, on which company relates to their products.

In the world of webcomics stories are told mainly through images and word bubbles.  In order to ensure that there is clarity and engagement in the comic, it is best to use simpler and easier to recognize images. It is in these easy to recognize images that creators often struggle to comply with trademark law. If a webcomic creator, of any kind, were to include a trademarked image into their comic, the trademark holder has the power to take legal action. This legal action can come in many forms and will almost always get very expensive in some facet.

How does a court decide if you have infringed on a trademark with an unauthorized use? A simple way is that a court will apply the “likelihood of confusion” test in a trademark infringement suit.

What does this mean for webcomic creators? This means that webcomic creators must be very careful to create completely original works of animation and story and avoid using another company’s logos and characters within the creator’s work. This includes even altered version of already establish brands. In a 2010 suit between Luis Vuitton and Hyundai Motors, Luis Vuitton sued Hyundai claiming the skin of a basketball in Hyundai’s commercial resembled their logo. The court ruled in Luis Vuitton's favor based on the fact that 62% of people surveyed believed it was a Luis Vuitton logo and that Luis Vuitton had sponsored or approved the ad.

For a webcomic creator, where story telling through pictures and minimal dialogue is the norm, using imagery that the audience is familiar with can be tempting. This is where the act of avoiding trademark violations can become a hurdle. So, it is recommended that, creating wholly original content is the best plan of action.

Creating wholly original work allows the webcomic creators to hold their own intellectual property rights.  This creates an opportunity to use it as many others have when building a brand in ways like Disney created a character as famous as Mickey Mouse. In the world of webcomics, there are options to view your work online, through various platforms. Content sharing between you and your fan-base via social media is now rapid-fire easy. With mass exchange of information, trademarks have become more vital than ever before. With a completely original trademark in a creator's pocket, their fans will be able to quickly identify and engage with their original content.

COPYRIGHT & DISCLAIMER

Tifanie Jodeh Acosta is Partner at Entertainment Law Partners dedicated to corporate, business and entertainment affairs.  You may contact her at asst@entlawpartners.com.

Tifanie Jodeh Acosta grants column recipients permission to copy and distribute this column and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice.

DISCLAIMER: Readers should consult with a lawyer before solely relying on any information contained herein.

 

The Downfall of Quibi

By: Tifanie Jodeh Acosta

Jerusha D’Souza

Viewing content has changed dramatically over the past few years with the introduction of Streaming video on demand (SVOD). Netflix for the longest time dominated this market. However, 2019 saw a boom in Streaming services, it was touted as the year of the ‘Streaming Wars’. We saw new additions such as Disney+, AppleTV, HBO Max, Peacock, Paramount+ and last but not the least Quibi. Every service was battling it out to be number one. Lucky for us, access to content has never been easier.

Unfortunately, in 2020, the entertainment industry took a big hit with Covid-19. It caused a halt in companies and productions. Quibi was one of those companies that did not survive.

Quibi, short for “Quick Bites” launched in the April of 2020. It was developed specifically for mobile devices, instead of watching half-hour TV episodes or two-hour films, you were able to watch short 10-minute bits of content on Quibi on the go. It was supposed to revolutionize and change the way people view content, especially the younger demographic. It was founded in 2018 by Jeffrey Katzenberg and Meg Whitman. Quibi business plan relied on a subscribership of $4.99 monthly or $7.99 without commercials.

The company was set to premiere 175 original shows divided into three categories; Movies in Chapters​, Unscripted and Documentaries and Daily Essentials​. Some of Quibi’s originals were ‘Most Dangerous’ starring Liam Hemsworth, ‘Survive’ starring Sophie Turner, ‘Chrissy’s Court’ staring Chrissy Teigen, etc. Quibi was also nominated for 10 Emmy Awards and its series, #FreeRayshawn, even won two Emmy Awards.

On its launch day, TechCrunch reported that Quibi saw 300,000 downloads and hit No. 3 in the App Store. The company announced it had seen 1.7 million downloads of its app, from the day of its launch. But soon after, Quibi's app fell out of the list of the 50 most-downloaded apps, a week after it was released. In October of 2020, just six months after its launch, the streaming service had to shut shop.

So, what happened? Why did this revolutionary platform fail?

Before its launch, many critics expressed their concern stating that a paid, mobile only focused service limits access and reach, since it would have to compete with consumers viewing content on well established, free platforms like TikTok, YouTube, and Twitch, combined with shows and movies they were paying for already on Netflix, Amazon, and Disney+ which also had large catalogues of content that was already popular with loyal viewers. Shelling out additional dollar bills to Quibi would mean the quality of content would have to be extremely high, which unfortunately was not the case. It is suggested that Quibi should have invested more in content from celebrities its younger audience might actually appreciate, like YouTube, Instagram, or TikTok stars. Instead, it threw lots of money at the kind of names that older executives might imagine young people would enjoy, thus not creating sufficient buzz around its content.

Quibi’s touted its ability to switch in real time between horizontal and vertical viewing also didn't prove attractive enough to incentivize people to subscribe. This technology was also challenged in court by Eko for Patent infringement, which Quibi denied. Whilst the lawsuit didn’t cause it to shut shop, defending a legal conundrum added to its list of challenges.

Other issues that plagued Quibi were: Inability to screenshot content, which meant it was difficult to share on social media and generate potential buzz around shows and inability to watch the content on any other device besides the mobile phone.

Katzenberg blamed the failure of Quibi on COVID-19 pandemic which disrupted everyone’s daily routines because consuming content was no longer restricted to mobile devices during the day given most people were at home consuming content on televisions and computers.

The announcement of Quibi’s shutdown left the fate of existing, upcoming, and planned original programming in "development hell" which is industry jargon for a project being in a state of limbo. The issue was Quibi did not own the rights to any of their programming, as the deals they entered into allowed them to retain the copyright to their content and distribute it in traditional forms only after a few years.

However, in January of 2021 Roku announced a $100 million acquisition with 75 0f Quibi’s shows to be streamed on their platform on free ad-supported channels.

Quibi’s content will live on to see another opportunity for growth and success which is a badge of honor to the fallen victim of the pandemic.

COPYRIGHT & DISCLAIMER

 Tifanie Jodeh Acosta is Partner at Entertainment Law Partners dedicated to corporate, business and entertainment affairs.  You may contact her at asst@entlawpartners.com.

Tifanie Jodeh Acosta grants column recipients permission to copy and distribute this column and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice.

DISCLAIMER: Readers should consult with a lawyer before solely relying on any information contained herein.

 

 

 

 

 

 

 

 

An End to the Battle between the Writers Guild and Talent Agencies

By Tifanie Jodeh Acosta

Jerusha D'Souza 

In April of 2020, a suit was filed by the Writer’s Guild of America (WGA), against the "big four" talent agencies i.e., William Morris Endeavor (WME), Creative Artists Agency (CAA), United Talent Agency (UTA) and ICM Partners, where WGA stated that certain packaging fees charged by these agencies are an “egregious conflict of interest” that “constitute unlawful kickbacks” from the studios to the talent agencies.

Earlier this year the stand-off between the WGA and the Talent Agencies came to an end when a US district court Judge granted a request by the WGA and WME to dismiss their antitrust suits. This came shortly after WME signed the WGA’s “Franchise agreement”, which is set to end ‘packaging’ (discussed below) by next year and reduce talent agency ownership of affiliated production entities to just 20% going back to a commission-based model. A “side letter agreement” was also agreed to, where WME would divest its interest in Endeavor Content similar to the agreement WGA entered into with CAA and other such agencies.

The business of “packaging” has been around for decades, where talent agencies bundled a project with talent to sell a movie or TV show. For this packaging fee, talent agencies would also provide staffing of writers, mid-level contributors, etc. Generally, a ‘package fee’ for scripted television is the 3/3/10, i.e., a 3 % upfront of the basic license fee per episode, 3% of a deferred fee paid out of the 50% of net profits and backend participation which is up to 10% of profit participation. To avoid ‘double dipping’ the talent agencies that collect a packaging fee from the studio’s do not take their typical 10% commission from the clients that they represent.

The conflict between the two sides arose when the WGA gave the Association of Talent Agents (ATA), a collective of more than 100 talent agencies, twelve months’ notice to terminate the ‘Artists’ Manager Basic Agreement’ of 1976, the contract that dictates the terms of the relationship between ATA and WGA.

The WGA in its original suit argued that since talent agencies are financially motivated to negotiate their own lucrative packaging fees, they do not fight for their clients to receive higher wages. In addition, talent agencies focused on exclusivity trying to prevent other talent agency clients from being attached to a project, that way the “packaging agency” would not need to be shared. The WGA believed that this business practice goes against the fiduciary obligation of a talent representative to serve her or his writer clients by connecting such clients with the best talent for the project, regardless of whether such talent is represented by the same talent agency. The WGA further argued that these packaging fees violate California’s unfair competition law, which prohibits any representative of an employee from receiving money or other things of value from the employee’s employer and as such talent agents are “employee representatives” and the money accrued via packaging fees are illegal.

The ATA on the other hand argued that such packaging fee structures rarely meet a profit level required to lead to additional payments. Furthermore, ATA claimed that a packaging fee model is better because it saves writers having to pay the 10% commission, they would otherwise owe to their talent agents.

The WGA “Franchise agreement” now signed by WME, which is in line with similar agreements signed with CAA, UTA and ICM, aims to end the conflicts of interest in writer representation. In summary, talent agencies are precluded from holding 20% or more of a production company and it establishes strict rules preventing talent agencies from getting into the production business, by capping their ownership of production or distribution entities and also a sunset period was added which ends the practice of packaging by June 30, 2022.

In conclusion, the Entertainment industry is starting to see a resolve to this, whereby talent agencies are now changing the way business is conducted.

COPYRIGHT & DISCLAIMER

 Tifanie Jodeh Acosta is Partner at Entertainment Law Partners dedicated to corporate, business and entertainment affairs.  You may contact her at asst@entlawpartners.com.

Tifanie Jodeh Acosta grants column recipients permission to copy and distribute this column and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice.

DISCLAIMER: Readers should consult with a lawyer before solely relying on any information contained herein.

 

 

Controversy of HBO Max’s Same Day Theatrical Release

By: Tifanie Jodeh Acosta, Esq.

Jerusha D'Souza 

The business of theatrical exhibition has suffered tremendously since the onset of the pandemic. Prohibition of large gatherings have caused a severe blow to movies released in theatres. A rise in the streaming market has been recorded, with stocks of companies like Netflix reaching an all-time high, forcing studios to re-strategize their business models to stay relevant.

Warner Bros. announced a ‘Hybrid Distribution Model’ for its 2020 theatrical slate, a consumer-focused model which could change the way films are distributed. Films will be exhibited theatrically worldwide with an additional, one-month access period on the HBO Max streaming platform concurrent with the film’s domestic release. The slate includes 17 films such as "The Little Things", "Tom & Jerry," "Godzilla vs. Kong," etc. The decision was made after the unprofitable release of "Tenet" in theatres. Using this new distribution model, “Wonder Woman 1984” went on to gross $118.5 million globally upon its release.

Back in the 2000’s a similar concept was used for independent films known as a “simultaneous release” or a "day-and-date" release which is when a film is released on multiple platforms on the exact same day, or in very close proximity to each other. The concern with this business model is the overlapping of separate revenue channels. The deal would essentially shut off the “waterfall” which is the industry’s term of the order in which various parties receive net revenue. A ‘day and date’ release would shorten the ‘theatrical window’ which is the time gap between when the movie first hits the theatres to when it becomes available on other platforms, this period is usually for 90 days. Followed by which the movie would become available on home video (DVDs), to television beginning with pay TV, Video on Demand (VOD) and eventually free.

The digital era has changed the sequence of release windows with Subscription Video on Demand (SVOD) i.e., streaming platforms such as Netflix, Hulu, HBO Max, etc., where viewers have the ability to pay a one-time access fee to watch the entire catalogue.

Even before HBO announced its plans for same day releases, Universal released “Trolls World Tour”, its animation sequel as an online rental in April. Disney+ made “Mulan” available in September, but a key similarity is that both movies carried an extra cost to watch them online. They were made available under “premium video on demand”, a special early online release accompanied by high prices that would unlock the title for home-viewing.

Theatre owners like AMC entertainment have the most to lose. Maybe some theatre chains will be on board as long as they get a share of the home video sales. "A" list talent also receive “box office bonuses” as part of their contracts, and are awarded a percent of the global box office sales. These interest groups argue that a move like this could dilute box office revenue, when cinemas have to compete with early availability of a film on streaming platforms, affecting the traditional movie-going experience.

In terms of theatrical release, exclusivity language in a distribution agreement will soon become important, where studios will want to ease up exclusivity windows, and talent will push for larger windows. Steven Spielberg said "everyone should have access to great stories", and that they should be able to "find their entertainment in any form or fashion that suits them." We live in unprecedented times and the way people are viewing and assimilating content has drastically changed.

 If you have questions concerning this topic, or other areas of entertainment law, please email us at Asst@entlawpartners.com.

COPYRIGHT & DISCLAIMER

Tifanie Jodeh Acosta is Partner at Entertainment Law Partners dedicated to corporate, business and entertainment affairs.  You may contact her at Asst@entlawpartners.com.

Tifanie Jodeh Acosta grants column recipients permission to copy and distribute this column and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice

DISCLAIMER: Readers should consult with a lawyer before solely relying on any information contained herein.

 

 

 

Pay or Play vs COVID-19

 By:

Tifanie Jodeh Acosta, Esq.

Victoria Couch

Pay-or-Play language is a heavily negotiated contract clause for above-the-line talent. The simplest meaning is this: The commitment by a studio to pay the talent, regardless of whether the studio subsequently determines that such talent’s services are no longer required.

In the past, a producer or studio could rely on force majeure as a way to terminate the contract, relinquishing them from having to pay the talent’s pay-or-play fee. Now, in a COVID world, the narrow question becomes how force majeure is affecting pay-or-play in contracts.

Pay-or-play is a commonly accepted standard for A-list directors, producers, and talent. A force majeure event (in layman’s terms an “act of God”), such as war, an industry strike, a pandemic, or unforeseeable weather conditions, is a big reason for a employer (such as a studio) to be relieved of having to pay the talent’s pay-or-play fee. Until now, most people rarely gave this the force majeure clause much thought or attention because the chances of force majeure being triggered was quite low. Now that COVID-19 is the new reality, a force majeure type event is now a reality, entertainment attorneys such us here at Entertainment Law Partners, are now taking a careful look at these force majeure clauses.

A new and crucial question is how to negotiate this “act of God” issue in relation to current pay-or-play rights. For now, we recommend going back and examining any pay or play agreements you are making or re-negotiating the agreement on a case-by-case basis; there is no definite answer except to make sure you have experienced counsel navigating you through these unprecedented issues.

For those of you working with Directors on these issues, we would be remiss if we didn’t note to you that when hiring a DGA director, the DGA has already built in force majeure protections.

According to the DGA’s 2014 Basic Agreement, Section 6-101:

“No suspension or termination of Director's services shall be permitted or effected by Employer under such force majeure clause or provisions unless the entire cast and the Director of Photography of the picture are likewise suspended or terminated, as the case may be. Subject to such rights of suspension and/or termination, the obligation of the Employer upon entering into a contract for the employment of a Freelance Director to furnish employment during any of the foregoing "guarantee" periods of employment shall be wholly satisfied by the payment of the agreed salary for the applicable minimum period.”

The DGA Basic Agreement is clear when saying that an incident affecting a member of the cast for one (1) week or less is not consideration for the force majeure clause to take effect.

Depending on whether the project is a television or theatrical picture, a director must be offered reinstatement within six (6) and twelve (12) months to continue the director’s previous employment in accordance with the previous agreement.

Main point of this article? Do not read or negotiate Pay-or-play issues in a bubble. It works together with other contract clauses that affect how pay-or-play unfolds. You can save yourself from potentially paying out the entirety of a contract by making sure you are protected in cases such as project cancellation due to the current pandemic because it is a pandemic, an act of God and categorized as force majeure event.

Now with the basic understanding of pay-or-play, what does all of this mean for A-list directors, producers, and talent? Simply, now more than ever, it is important to consider the ways pay-or-play can be terminated. Safeguard yourself by having representation that understands the intricacies of the industry and can negotiate protection into your contracts through pay-or-play and force majeure language. 

If you have questions concerning this topic, or other areas of entertainment law, please email us at Asst@entlawpartners.com.

COPYRIGHT & DISCLAIMER

Tifanie Jodeh is Partner at Entertainment Law Partners dedicated to corporate, business and entertainment affairs.  You may contact her at Asst@entlawpartners.com.

Tifanie Jodeh grants column recipients permission to copy and distribute this column and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice.

DISCLAIMER: Readers should consult with a lawyer before solely relying on any information contained herein.

 

Get back in to production! Australia's COVID-19 Insurance Backstop Program

 By: Tifanie Jodeh, Esq.

Victoria Couch

The media and entertainment industry in the United States alone is a multi-billion dollar market. As we know, the outbreak of COVID-19 in March of 2020 devastated the entertainment industry.

After months of quarantine, people are anxious and desperate to get back to work. However, the big question is whether productions will be able to find the necessary insurance to begin shooting again.  

Production insurance is both extensive and expensive. There is workers compensation, errors and omission, and special add-ons, to name a few. Insurance is a top requirement to have in place for financiers, lenders, and banks.

Risk is the entertainment industry’s middle name. When adding in COVID-19 to the mix, very few, if any, insurance brokers are willing to issue coverage policies. These risks include: cast and crew contracting the virus, the risk of COVID-19 continuing for an indefinite period of time, and the ultimate risk of a project having to rely more heavily on its insurance policy than its revenue; if the project is ever completed and delivered. New insurance policies will be difficult to obtain as issuers are not comfortable with attaching themselves to anything related to these risks.

To reignite production, many production companies around the world are looking now to the programs offered in Australia for an alternative solution.

Under ideal circumstances, the extensive 41-page COVID-Safe Guidelines Australia released in May should have been enough to allow and encourage productions to restart.

The Australian government recognized its entertainment industry was one of the first to be severely impacted by COVID-19 and will be one of the last to fully recover and return to pre-coronavirus standards of production. To assist the industry and people’s livelihood, the government created a A$250 million (US$180 million) package to support the arts, concerts, and events with A$34 (US$24 million) million going to the Australian screen industry.

“We’re delivering the capital these businesses need so they can start working again and support the hundreds of thousands of Australians who make their living in the creative economy,” [Prime Minister] Morrison said. These funds are crucial because they ultimately will serve as an insurance backstop to help minimize production risk.

The Australian government is offering grants and loans to its creative arts industry as a source of backing. One area of the support package is to launch local film and television productions by dedicating $50 million (US$36 million) to the Temporary Interruption Fund (TIF). According to Screen Australia, a Federal Government agency supporting Australian screen development, production and promotion, their “total liability under TIF for a production will be capped at 60% of the total budget, or $4 million, whichever is less” (ScreenAustralia.gov.au, Temporary Interruption Fund). Screen Australia lays out several conditions for being eligible, such as the time period for commencing principle photography and the requirement for obtaining special insurance. The insurance is FPI. “The applicant must have ‘Film Producers Indemnity’ insurance covering named individuals from an approved insurer… TIF only applies to productions with FPI insurance that excludes coverage for COVID-19 events” (ScreenAustralia.gov.au, Temporary Interruption Fund).

Essentially, TIF is an added layer of insurance provided by the Federal Government to the insurers.

This is not a perfect solution to the COVID-19 issue. Risks will still be prevalent and cast and crew will need to adjust to new protocols. However, despite all of the related challenges, the Australian government is “setting the stage.” They are becoming a guiding light for other countries to follow their lead and financially support their entertainment industries to help them get on their feet.

 

 

 

 

Limiting Debt and Maximizing Business: Why Form a Loan-Out Company?

By: Tifanie Jodeh, Esq. & Kelmer Messina

When we think of the word “company” we usually imagine huge buildings with thousands of employees running operations that amount to millions of dollars. While this can be one, a company can potentially be formed by one person and even be run from home.

Companies can come in many shapes and forms but, ultimately, a company is a legal entity created with the purpose of conducting business and limiting liability (such as debts and mortgages). A company is a different legal person from its members, meaning their assets and obligations are different from your personally. 

In the case of the Entertainment Industry, it has become customary for actors, producers, directors or any other Industry professional to loan out their creative services through what we call a “loan-out” company because of its many advantages. 

In this article we will examine 3 benefits of going through the work of incorporating a company, even if you do not run a huge operation with little or no employees. These 3 benefits are:

• #1: Forming a company can limit your personal liability. When contracting through a company, the obligations and debts you incur during the course of business become separate from your personal finances. 

• #2: Organization. Having your personal and business matters separate from one another will make it a lot easier for you to do business. This clear separation can benefit you during dealmaking and also makes it a lot easier for money to go to the right place. Payments and liabilities are directed from your Company to partners, employees or independent contractors

• #3: Legitimacy. When working with others in the Entertainment Industry or securing financing, it can give an air of legitimacy and professionalism, ultimately making it easier for them to do business with you. Longevity of your business will make it better for you to secure loans, create good will and build your brand

We can assist you with forming the appropriate corporate entity. It is worth the time to explore your options and find out if it’s the right fit for you and your goals. 

If you have questions concerning this topic, or other areas of entertainment, business or corporate law, please email us at Asst@entlawpartners.com or call us at 310-684-3666 to schedule a free initial consultation. . 

COPYRIGHT; DISCLAIMER: Tifanie Jodeh is Partner at Entertainment Law Partners dedicated to corporate, business and entertainment affairs. 

Entertainment Law Partners is a full-service Los Angeles and Miami area based entertainment, business and corporate transactional law firm providing expert counsel in a wide array of business transactions with a focus on corporate, business, entertainment, media and technology industries. 

You are receiving this newsletter because we most likely met you somewhere at an entertainment related function such as a film festival, event, party, networking or we've done business with you. 

For more information about the firm or to stay up -to-date on current issues in the business, visit our site at Entertainment Law Partners or follow us on Facebook, LinkedIn, Instagram or Twitter (@entlawpartners).