2012 Media Year in Review Media Law Bulletin - January 2013

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Now that 2013 has arrived, we look forward to a new year of media cases. However, in order to orient ourselves for 2013, it is important to stop and take a look back at some of the relevant entertainment and media cases of 2012.  What at first seemed like it was going to be a big year for change in broadcast television indecency standards ended up being more of a fizzle and less impactful than anyone anticipated.  2012 also brought us a new twist in the long-running Viacom v YouTube case, an affirmation of foreign copyright restoration (Golan v Holder) and an important update in the “pitch” saga involving “The Last Samurai.” 

 

FCC Cases

 

This was a big year for the FCC and the regulation of indecency standards for broadcast television. Two cases have substantially changed the way the FCC is now viewing indecency complaints. In light of these recent U.S. Supreme Court cases, the future direction of the FCC’s control over broadcast television is a bit unclear. Here’s a brief overview of these cases and the ongoing evolution, and inherent uncertainty, in our current FCC regulation of broadcast television.

 

These cases are summarized below.

 

Federal Communications Commission v. Fox Television Stations Inc. et al., No. 10-1293 (Sup. Ct.)

 

The case arose from the broadcast of fleeting expletives by celebrities on awards shows on Fox and partial nudity on the police drama “NYPD Blue” on ABC. Justice Anthony M. Kennedy, writing for seven justices, said the broadcasters must win, but only because the commission had changed the rules in the middle of the game.

 

“The commission failed to give Fox or ABC fair notice prior to the broadcasts in question that fleeting expletives and momentary nudity could be found actionably indecent,” Justice Kennedy wrote.

 

In an 8-0 decision (with Justice Sonia Sotomayor recusing herself), the Supreme Court held that because the FCC regulations at the time did not cover “fleeting expletives,” the fines issued against Fox were improper and therefore invalidated as “unconstitutionally vague.” The network had not received fair notice that such fleeting indecencies would be subject to sanctions. The Supreme Court, however, declined to address the constitutionality of the FCC’s ban on fleeting expletives, leaving the agency with the authority to regulate “indecent” material on broadcast television as previously affirmed in FCC v. Pacifica, 438 U.S. 726 (1978).

 

The U.S. Supreme Court declined to address the big issue: whether the government still has the authority to regulate indecency on broadcast television. But the court did rule on narrow grounds in favor of two broadcasters that had faced potential sanctions for programs containing cursing and nudity. The FCC is still free to enforce its ban on profanity and indecency.

 

The Supreme Court left open the question of whether changes in the media landscape have undermined the rationales for limiting their free speech rights in ways the First Amendment would not tolerate in other settings. Cable television and the Internet are not subject to government regulation of ostensibly indecent material.

 

Federal Communications Commission et al. v. CBS Corp. et al., No. 11-1240 (Sup. Ct.).

 

The Supreme Court refused to review a lower-court decision that threw out the FCC's $550,000 fine for CBS over Janet Jackson's "wardrobe malfunction" during the network's live coverage of the 2004 Super Bowl. The FCC declined to comment, but CBS hailed the court's decision not to review the lower court's ruling. The FCC walloped CBS with the fine after the pop star’s breast was briefly exposed during a live half-time show with actor-singer Justin Timberlake.

 

The end of that case was very good news for the TV industry, but — after two trips to the Supreme Court in that case, and two trips to the court in a separate Fox TV case — television and radio broadcasters still have no final word on whether the FCC’s current policy against “indecent” broadcasts is unconstitutional. And also unsettled at this point is whether the FCC will reconsider that policy — as Justice Ruth Bader Ginsburg indicated that it should.

 

The court had been holding on to the FCC appeal in the so-called “wardrobe malfunction” case (FCC v. CBS Corporation et al., 11-1240) until it had decided the latest round in the Fox TV case (FCC v. Fox Television Stations et al., No. 10-1293).

 

Internet

 

Viacom Int’l Inc. v. YouTube Inc., No. 10-3270

 

The year 2012 was also a big year for Internet service providers (ISPs) and the Digital Millennium Act (DMCA). On April 5, the Second Circuit Court of Appeals revived a sleeping 5-year-old giant: Viacom’s copyright case against YouTube. The court found that a jury might conclude that the online video-sharing site knew it was infringing rights when it allowed the distribution of videos of popular television shows and other programs.

 

The Second Circuit reversed a 2010 lower court grant of summary judgment in favor of YouTube, which was considered a landmark in setting guidelines for user-generated content websites.

 

In 2007, Viacom, a media conglomerate that owns MTV and Comedy Central, sued YouTube for $1 billion based on copyright infringement claims for unauthorized posting of Viacom copyrighted material.

 

On June 23, 2010, a federal district judge in the Southern District of New York granted YouTube’s motion for summary judgment, ruling that YouTube was not liable for direct or secondary copyright infringement due to its hosting of infringing content posted by users of the wildly popular website.

 

The court ruled that YouTube’s general knowledge that a substantial portion of the posted videos infringed copyright was insufficient to impose liability and that its prompt takedown of specific infringing material of which it was notified entitled it to the DMCA’s “safe harbor” for ISPs.

 

The federal appeals court took issue with two aspects of the ruling. In addition to saying that YouTube may have known about infringing activity, the two-judge panel said the lower court judge misinterpreted the "right and ability to control" provision to require "item-specific" knowledge.

 

The court agreed that three activities fall within the safe harbor for infringement that occurs because of user storage. On remand, however, the parties must brief the court with respect to a fourth software function, which is the syndication of YouTube videos to third parties.

 

However, what had started in 2007 as a headline-grabbing $1 billion lawsuit that could possibly effectuate a sea change in the way user-generated content websites do business is dying a very slow death. In the end, it may become irrelevant for YouTube. This is because in May 2008, YouTube began using its digital fingerprinting technology to protect copyright-protected content. Accordingly, the current case only deals with those alleged infringing copyrighted posts between 2006 and 2008.

 

Copyright

 

Two important copyright cases were decided in 2012. One case restored copyright protection to works that were in the public domain. The other allowed a trial to proceed in a case about idea theft for the film “The Last Samurai.”

 

Golan v. Holder, No. 10-545

 

On Jan. 18, 2012, the Supreme Court upheld the constitutionality of Section 514 of the Uruguay Round Agreements Act (URAA) — a provision that brought the United States into better compliance with international copyright conventions. Section 514 removes certain foreign works, like “Peter and the Wolf” (a popular orchestral piece for young children), from the public domain. In other words, Section 514 “restores” copyright entitlements to the owners of these works for a specified amount of time.

 

The controversy of this section arises for people like Lawrence Golan who previously enjoyed free access to these works without having to seek permission from copyright holders. Others, like the Electronic Frontier Foundation, see even larger issues between private and public interests at stake with the upholding of URAA. Accordingly, the petitioners challenged the constitutionality of the section both under the Constitution’s Copyright and Patent Clause (Art. I, § 8, cl. 8 ) and under the First Amendment of the Constitution.

 

Although the court ultimately upheld the constitutionality of Section 514, the majority and dissent opinions bring some interesting tensions to the foreground.

 

By a 6-2 vote, the justices rejected arguments based on the First Amendment and the Constitution’s copyright clause, saying that the public domain was not “a category of constitutional significance” and that copyright protections might be expanded even if they did not create incentives for new works to be created.

 

The law was challenged by orchestra conductors, teachers and film archivists who said they had relied for years on the free availability of such works.

 

Justice Ginsburg, writing for the majority, said the law had merely put “foreign works on an equal footing with their U.S. counterparts.”

 

In dissent, Justice Stephen G. Breyer, joined by Samuel A. Alito Jr., wrote that the clause meant to require a utilitarian approach, one under which authors were granted limited monopolies in order to encourage them to produce societal valuable works.

 

“Does the clause empower Congress to enact a statute that withdraws works from the public domain, brings about higher prices and costs, and in doing so seriously restricts dissemination, particularly to those who need it for scholarly, educational, or cultural purposes — all without providing any additional incentive for the production of new material?” Justice Breyer asked. The answer, he said, was no.

 

Benay v Warner Bros., No. 2:05-cv-08508-PSG-FMO

 

In February 2012, a federal judge ordered a jury trial to proceed involving the Tom Cruise blockbuster “The Last Samarai,” which reportedly earned more than $600 million in revenues. Director Ed Zwick and producer Marshall Herskovitz will defend against allegations of idea theft. The case was brought in 2005 by plaintiffs Aaron Benay and Matthew Benay, brother screenwriters who wrote a script also titled “The Last Samurai.”

 

In this long-running litigation, the plaintiffs pitched their screenplay to defendant Bedford Falls, a production company, in 2001. Bedford Falls rejected the plaintiffs’ submission, citing a similar film project already in development, which was released in 2003 and also called “The Last Samurai.” The plaintiffs sued Bedford Falls, as well as defendants involved in the writing, production, marketing and distribution of “The Last Samurai” film, for copyright and breach of an implied contract.

 

The Ninth Circuit affirmed the district court’s grant of summary judgment in favor of defendants on the copyright claims, holding that the works were not sufficiently similar to support a finding of copyright infringement, but reversed the district court’s dismissal of the contract claim, finding that the works could be similar enough to support a finding that defendants used the plaintiffs’ script in breach of what the plaintiffs alleged was an implied contract.

 

“The Last Samurai” was the first script by the Benays, who conceived of it after Aaron Benay majored in Japanese Studies at Duke University and Stanford University, and lived and studied in Japan. Since then, the Benays have written scripts for Leonardo DiCaprio, legendary director Ridley Scott, and Academy Award-winning producer Brian Grazer.

 

On remand, all of the defendants except Bedford Falls moved for summary judgment on plaintiffs’ breach of implied-in-fact contract claim, arguing they lacked privity with plaintiffs, and could not be liable for breach of contract. All defendants also moved for summary judgment on statute of limitations grounds, as well as for termination of the case as a sanction for what they alleged was plaintiffs’ falsification of evidence.

 

Topics:  Breach of Contract, Copyright, DMCA, FCC, First Amendment, Foreign Copyright Restoration, Golan, Indecency Standards, Internet, MTV, Public Domain, Television Broadcast Stations, Viacom, YouTube

Published In: Art, Entertainment & Sports Updates, General Business Updates, Communications & Media Updates, Constitutional Law Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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