Second Circuit Finds No Copyright Infringement of Sit-Com Modern Family

In July of 2010, Martin Alexander filed suit for copyright infringement against several defendants in U.S. District Court (S.D.N.Y.) based upon allegations that defendants’ creation, distribution, production, and broadcasting of the nationally-acclaimed tv show, Modern Family, violated his rights under the Copyright Act, 17 U.S.C. § 101 et seq., and other state law claims.

Alexander alleged that the characters and plots from Modern Family were largely copied from the pilot episode (“Treatment”) of Alexander’s proposed television series entitled Loony Bin.  Specifically, Alexander focused upon alleged similarities from scenes depicting children’s birthday parties where things go wrong, coping with odd family issues and therapy sessions, as well as distinct character and physical traits between the two shows’ main characters.

Although the defendants conceded that Alexander held a valid copyright for Looney Bin and they had access to “Treatment,” the District Court dismissed Alexander’s Complaint upon the grounds that no “substantial similarity” existed between Modern Family and the protectable elements of Loony Bin.

On appeal to the Second Circuit, the Court of Appeals noted that “the appropriate inquiry is whether the copying of protectable elements ‘is quantitatively and qualitatively sufficient to support a finding of infringement.’”  Alexander v. Murdoch, No. 11-4291, slip op. at 3 (2d Cir. Nov. 14, 2012).  The Court of Appeals further acknowledged that application of the test, as applied to television shows, requires an examination of “the similarities in such aspects as the total concept and feel, theme, characters, plot, sequence, pace and setting.”  Id.

The Court of Appeals ultimately affirmed the District Court’s dismissal of Alexander’s claims by determining that Loony Bin and Modern Family only shared concepts “at the most general level,” as the “specific overlapping character traits and plot aspects identified by Alexander reflect superficial and de minimus details . . .; involve general abstractions insufficiently developed to merit protection . . .; or are ‘standard[ ] in the treatment of [the] given topic’ of modern family life, and are therefore unprotectable scènes à faire.”  Id. at 3-4.

Authored by: Scott A. Meyer and John Sokatch.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services to individuals, inventors, entrepreneurs, start-ups, spin-offs, universities, research institutes, and small to large public and private companies and businesses.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us at 214-445-4040.  Please follow us on Twitter at @chalkerflores.

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Personal Liability of Officers for Corporate Guarantees

Last January, the 1st District Court of Appeals issued a noteworthy opinion reinforcing the personal liability for loan guarantees made by corporate officers while acting within their capacities as officers of the company.  The court’s ruling in 84 Lumber Co. v. Powers, No.-01009-00986-CV, 2012 Tex. App. LEXIS 590 (Tex. App.—Houston [1st Dist.] Jan. 26, 2012, no pet.), will likely force many corporate officers, including those in larger corporations, to now rethink placing their own necks on the line for those companies to which they owe fiduciary responsibilities.

David Powers, acting within his capacity as president of his company David Powers Homes, Inc., signed a statement that he “UNCONDITIONALLY AND IRREVOCABLY PERSONALLY GUARANTEE[D] [THE] CREDIT ACCOUNT….”  Mr. Powers took the position that he no longer possessed any personal liability for the loan because he signed the guarantee as a corporate officer and he no longer held that position.

In rejecting Mr. Powers’ stance that his personal liability was precluded by the statute of frauds (which requires the guaranty to be in writing and signed by the person to be charged), the court held that liability remained on Mr. Powers, individually, and not merely with the office of president of his company.  As the court noted, generally speaking a guarantor of a debt is an individual who willingly stands for the debt of another.  The court reasoned that had it ruled in favor of Mr. Powers, it would essentially render a guarantor agreement meaningless because personal liability would thereby reside in the same person—i.e., the company would then become both the account debtor and the guarantor of the corporate debt.

Ultimately, the court determined that Mr. Powers remained liable for his “unambiguous” guarantee of personal liability for the company’s debt, largely due to the fact that Mr. Powers was the owner of the company.  The court did, however, leave open the question regarding liability under situations involving more ambiguous contractual terms or where the corporate officer-guarantor owned minimal or no shares in his or her company.

Authored by Scott A. Meyer and John Sokatch.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services to individuals, inventors, entrepreneurs, start-ups, spin-offs, universities, research institutes, and small to large public and private companies and businesses.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us at 214-445-4040.  Please follow us on Twitter at @chalkerflores.

Unlocking Your Mobile Device Without Permission From Your Carrier Is Now Illegal

The Digital Millennium Copyright Act was enacted in 1998 to address unauthorized digital dissemination of copyrighted works.  In October of 2012, the Library of Congress and the U.S. Copyright Office determined that, under the DMCA, it is illegal for mobile device owners to unlock their device without the permission of their carrier.  (https://s3.amazonaws.com/public-inspection.federalregister.gov/2012-26308.pdf). The ruling was based on the determination, among other things, that device owners do not own the software (i.e., copyrighted works) in the device.  The October determination allowed for a 90-day grace period before the enforcement went into effect.  It also held that it only applies to locked devices purchased after the grace period ends.  The grace period ends today.  Therefore, starting January 26, 2013, make sure you obtain permission from your carrier before unlocking your mobile device.

Authored by: Tom Jacks

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services of the highest quality.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.  Clients include individual inventors, start-ups, spin-offs, major national universities, research institutes and medium to large corporations.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us 214-445-4021.  Please follow us on Twitter at @chalkerflores.

Copyright Violation Alert Process for Internet Subscribers

In December of 1999, several record companies filed a complaint for contributory and vicarious copyright infringement against, Napster, Inc., for illegal activities perpetuated by Napster’s online Peer-to-Peer (“P2P”) filing-sharing network program.  Since the filing of that lawsuit, the Recording Industry Association of America (“RIAA”) reports that music sales in the United States have dropped nearly 53%, due in large part to illegal downloads of copyrighted works on these P2P programs.

In response to this ongoing problem, the Center for Copyright Information (“CCI”), a collaborative partnership between U.S. content creators in the music and movie industries and various Internet Service Providers (“ISPs”), has promulgated a new system, the Copyright Alert System (“CAS”), that it hopes will be implemented by U.S. ISPs to curtail future instances of online infringement.  CCI reports that this system will be similar to credit card fraud alerts whereby the ISPs will send letters and educational information to those individuals suspected of illegally downloading copyrighted material through the use of the ISP networks.

By way of example, CCI’s website provides the following proposed system in response to a notification from a copyright owner of alleged infringing activities by an ISP subscriber:

  • First Alert: ISP will send an online alert to the subscriber, such as an email, which notifies the subscriber of possible misuse or involvement with infringing activities.  The email will also provide educational information to avoid future infringement and legal means to obtain copyrighted materials.
  • Second Alert: ISP will send a similar notification to that of the First Alert, reinforcing protective measures and alternative means to legally obtain material.
  • Third Alert: ISP will send similar notification to the two previous instances, but will also require subscriber to confirm, through pop-up notice or landing page, receipt of this notification.
  • Fourth Alert: ISP will send similar notification to the Third Alert, again requiring confirmation of receipt.
  • Fifth Alert: ISP will take steps outlined in its published policies and alerts to stop further infringement by the subscriber, including reduction of Internet speeds, redirection to a landing page until the subscriber contacts the ISP to discuss alleged infringement, or any other measure necessary to stop further infringement.
  • Sixth Alert: ISP will implement similar procedures to those taken with Fifth Alert, but CCI believes it would be unlikely for anyone to get to this point after receiving multiple notifications.

In addition to the above system, an ISP subscriber could request an independent review by the American Arbitration Association (“AAA”) if he or she believes the infringing activities were not of his or her own doing.  Likewise, CAS would not require any ISP to terminate the subscriber’s account, including other services such as telephone, email, security or health services.

While the extent to which the CAS procedures and similar measures will actually curb online infringing activities remains unknown, such efforts by those partnered with CCI will likely prove to be an important step in mitigating the instances of future illegal downloads and ultimately protect the innovative spirit of those availing themselves of U.S. copyright laws.

Center for Copyright Information, Copyright Alert System (CAS), http://www.copyrightinformation.org/alerts (last visited November 16, 2012).

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services of the highest quality.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.  Clients include individual inventors, start-ups, spin-offs, major national universities, research institutes and medium to large corporations.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact Scott Meyer at smeyer@chalkerflores.com or 214-866-0001.  Please follow us on Twitter at @chalkerflores.

Music Industry Filing Lawsuits Against Bars and Restaurants for Copyright Infringement

Due to the ever-increasing advances and efficiency over the past few decades in the way we share various forms of information, several royalty collection agencies, such as Broadcast Music Incorporated (“BMI”) and American Society of Composers, Authors, and Publishers (“ASCAP”), have begun ratcheting up their efforts to protect the music industry from copyright infringement.  These efforts now, specifically, have focused upon several bars and restaurants that play music, albeit copyrighted material, as a way to provide a certain ambiance to their establishment and attract more business.

Generally speaking, bars and restaurants are expected to obtain performance licenses from these agencies which, in turn, permit them to play copyrighted works at their establishments for negotiated fees.  But with the recent uptick in karaoke nights, cover bands, hired DJs, and general free-play provided by bars and restaurants, the cost-benefit of cutting through the music industry’s red-tape when compared with the perceived low probability of getting caught has now led to several well-known and respected establishments receiving attorney letters and federal lawsuits due to their business oversight.

For example, just this past year, the Ninth Circuit denied the appeal of a judgment for nearly $200,000 in damages, attorneys’ fees, and costs against a Long-Beach, California restaurant, Roscoe’s House of Chicken and Waffles, for alleged copyright infringement of various John Coltrane numbers, among others, where Roscoe’s allowed these songs to be played for its patrons.

While many bars and restaurant owners may think the time and costs associated with obtaining these licenses is not a business savvy investment in the short-run, not changing their practices may eventually force owners to invest larger sums in the long-run for legal fees and costs in defending lawsuits against agencies like BMI and ASCAP.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services of the highest quality.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.  Clients include individual inventors, start-ups, spin-offs, major national universities, research institutes and medium to large corporations.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment with one of the attorneys in Dallas or Fort Worth, please contact Tom Jacks at 214-866-0001 or email at tjacks@chalkerflores.com.  Please also follow us on Twitter @chalkerflores.