(Image credit: CBS/White House)

On January 24, 2020, the United States Space Force logo hit the news — and the photon torpedoes began to fly. Almost instantly, those familiar with the Star Trek Starfleet Command insignia called out a striking similarity, and even George Takei (who played USS Enterprise helmsman Hikaru Sulu) tweeted “Ahem. We are expecting some royalties from this...”

Putting aside the actual origin of the Space Force insignia (derived from the Air Force Space Command emblem), could someone actually claim that the Space Force emblem constitutes trademark infringement on the Star Trek logo?

Let’s start by looking to the 7th Circuit case of Fortres Grand against Warner Brothers, which dealt with another variant of the overlap between fiction and reality. As you may recall, in the film The Dark Knight Rises, Catwoman wants to erase her criminal history from every database in the world, giving her the chance to return to a normal life. The perfect tool is “the clean slate,” a database hacking program by the Rykin Data Corporation. Rykin itself was fictional, as was the software, but real-world corporation Fortres Grand actually was marketing a Clean Slate software to erase user activity from public access computers.

Fortres Grand filed suit against Warner Brothers for trademark infringement, and on its appeal to the Seventh Circuit Court of Appeals alleged “reverse confusion.” Fortres claimed that consumers would find Warner Brothers’ use of the name “clean slate” confusing, leading them to believe that the real-world software was connected with the film company. The Seventh Circuit Court of Appeals thought otherwise, writing “[w]hoever these unusually gullible hypothetical consumers are, Fortres Grand has not and could not plausibly allege that consumers are confused into thinking Fortres Grand is selling such a diabolical hacking tool licensed by Warner Bros.” Fortres Grand Corp. v. Warner Bros. Ent. Inc., 763 F.3d 696, 705 (7th Cir. 2014). Considering the fictional nature of the software and the fact that the term was used only descriptively in film dialogue, the court found in favor of Warner Brothers. In balancing a fictional product with a real-world offering, the court stated “[t]rademark law protects the source-denoting function of words used in conjunction with goods and services in the marketplace, not the words themselves.” As Warner Brothers did not offer any actual service, and other factors considered in trademark infringement weren’t strong enough to move the needle, there was no trademark infringement.

So what about Space Force v. Starfleet? Let’s look at the seven factor test the court used in Fortres Grand: 

1. the degree of similarity between the marks in appearance and suggestion. Do the two marks appear similar? Certainly. Regardless of the emblems’ respective histories, there certainly is a confluence of components and arrangement.

2. the similarity of the products for which the name is used. The Space Force ”organizes, trains, and equips space forces in order to protect U.S. and allied interests in space and to provide space capabilities to the joint force. USSF responsibilities include developing military space professionals, acquiring military space systems, maturing the military doctrine for space power, and organizing space forces to present to our Combatant Commands.” The Star Trek emblem, in our real world, may be used to sell certain commercial products, but does not actually provide services related to military space systems, protection of the space domain, or boldly going anywhere off planet Earth.

3. the area and manner of concurrent use. The Space Force does not only offer the services above. As part of uniform development (and perhaps brand marketing), it will offer articles of clothing, patches, “branded” gear for its members and the public, and perhaps even toys and games. (Visit a local military base PX, and you’ll see all of these available related to local units and missions.) Given these offerings in the real-world marketplace, the overlap becomes a bit clearer.

4. the degree of care likely to be exercised by consumers. Are consumers careful in selecting who delivers space combat power? Perhaps. In buying cool space-related or Star Trek gear? Maybe not so much. One can easily imagine the accidental gifting of a Star Trek hat to the teenager prepping to head off to Space Force basic training.

5. the strength [or “distinctiveness”] of the complainant's mark. The Space Force logo is brand new, while the Star Trek symbol (or its variants) have been in the public eye since the television show launch in 1966. Is the Starfleet logo distinctive? Certainly so.

6. actual confusion. With the Space Force logo being brand new, there likely is no actual confusion yet. Only time will tell how many of those accidental gifts get given this year.

7. an intent on the part of the alleged infringer to palm off his products as those of another. While some have cried foul, and others have alleged laziness, arguments that the Space Force is trying to be perceived as a Starfleet offering are unlikely.

So, does the new logo infringe when viewed through a trademark analysis? Unlikely. Given the overall intent of the two marks, the fictional nature of the Starfleet logo, and the lack of intent, one has a hard time believing any court would find infringement. That said, the Space Force trademark defense may not be as strong as transparent aluminum — only time will tell (unless, of course, George Takei takes us on a slingshot maneuver around the sun).

For more information on this article and this topic, contact James Creedon.

Photo by My Life Through A Lens

Most art is backed by a dream and an aspiration to make the world a better place, whether that be through music, dramatic performance, visual art, dance, or written word. But how does the artist share his or her art with the community? Consider one of the foundational catalysts of artistic expression and dissemination: the nonprofit. Many community theaters, music halls, museums, and other arts organizations around the country are “nonprofits,” but what does this designation mean? These businesses usually charge fees for entry to a performance or exhibition, and they have to generate funds to keep the lights on—so if there’s no “profit” in nonprofit, where does all this money go and what does this mean for the artist?

First, it’s important to understand what a nonprofit is (and what it’s not). Many people often use the terms “nonprofit,” “not-for-profit,” “501(c)(3),” and “tax-exempt” interchangeably, but each of these actually has its own separate meaning. For instance, the term “nonprofit corporation” is specifically defined by the Texas Business Organizations Code as a corporation that cannot, in most circumstances, distribute income to a member, director, or officer. Although “not-for-profit” is not defined in the Texas Business Organizations Code, the term is often used to describe a nonprofit organization. In short, although “nonprofit” and “not-for-profit” are commonly used interchangeably, in Texas the proper nomenclature is “nonprofit.”

Once recognized as a legal entity by the Texas Secretary of State, a nonprofit corporation can take the next step to attain federal “tax-exempt” status under Section 501(c)(3) of the Internal Revenue Code (the “IRC”). Nonprofits that are organized and operated exclusively for particular purposes (such as religious, charitable, scientific, public safety testing, literary, and educational purposes) can attain 501(c)(3) tax-exempt status. If the application is granted, donations to the nonprofit will be tax-deductible and the nonprofit will be exempt from taxes on net income.

Community theaters, music halls, museums, and other arts organizations can often qualify as nonprofits, and they can also achieve federal 501(c)(3) tax-exempt status if they meet the qualifications under the IRC. This usually means, among other requirements, filing a Form 1023 with the IRS and noting that the organization has an “educational” charitable purpose. After all, centuries of history have been told through song, story, theatrical performance, dance, and public artistic display.

Now that you have a brief overview of nonprofit terminology, let’s get back to the matter at hand—the nonprofit’s role in making a profit. Like any business, the nonprofit has to make money in order to continue running. Importantly, unlike “for-profit” businesses that are designed to turn a profit for their owners and shareholders, all profits earned by a nonprofit must be reinvested back into the organization’s administration or spent to advance the organization’s core charitable purpose. Any other use of these funds, or even failing to claim funds generated outside the scope of the nonprofit’s core charitable purpose, could result in a visit from the IRS. For that reason, it is very important to carefully account for any and all sales, donations, and other benefits. In the arts realm, this includes accounting for income from season subscribers, playbill ad space, and the value of donated art. Careful accounting for how funds are reinvested or spent is crucial as well.

Arts organizations provide a means by which artists can express themselves, which in turn provides an invaluable service to the community. The federal government recognizes this, and the various tax-exemptions delineated in the IRC directly incentivize the advancement of the arts—tax-exempt income and tax-deductible charitable giving means more money in the hands of artists and the organizations they work with.

Although forming a nonprofit can be a fulfilling means of supporting your local arts community, it could also be an overwhelming process—especially with regard to the various ins and outs of the IRC. An attorney experienced in forming and assisting nonprofits can help guide you through this process, so do your research and consult a skilled legal team. If you’d prefer to simply enjoy your community’s arts scene instead, consider buying season tickets to a community theater or patronizing a local art show. What you’ll discover is that many nonprofits and the artists they support aren’t in it for profit, but rather for the love of the arts. Regardless, profits are necessary to sustain the day-to-day operations of a nonprofit entity, even for the “starving artist.”

For more information on this article and this topic, contact Charles Wallace.

Photo by Patrick Tomasso

The publishing world has been rocked by the rapidly-evolving digital environment—marketing and business models have adapted to accommodate such changes, and authors are being afforded more efficient and cost-effective means of publishing their works than ever before. Major publishing houses like Simon & Schuster, Penguin Random House, HarperCollins, Hachette, and Macmillan (known in the industry as the “Big Five”) will undoubtedly have trouble keeping up with these changes, and authors have increasingly found that “self-publishing” is oftentimes more desirable and can afford many benefits that are not available with “trade publishing.”

First, some context: “trade” or “traditional” publishing refers to one of the oldest entertainment businesses in operation—the business of publishers producing, marketing, and distributing “trade books” (books stocked in brick-and-mortar retail bookstores, online bookstores, and libraries). “Self-publishing,” on the other hand, refers to a author’s publication of his or her own media without involving an established publisher. The digital age has given rise to many enticing and economical self-publishing opportunities to which authors may not have had access in the past, but authors should keep in mind that you get what you pay for. Given this, an author should consider the applicable benefits and obstacles when determining whether to employ a traditional publisher or go the self-publishing route.

Do You Care About Owning Rights In Your Work?

If so, self-publishing may be for you. Self-publishers own and control their own work, meaning they have the final say as to how the work is formatted, sold, marketed, and distributed. Self-publishers usually also bear the risk of liability, however, so it is important to ensure a self-publisher owns the rights to the material and content that he or she is publishing. Traditional publishing’s business model, on the other hand, usually requires the author to grant the publisher a broad range of rights, including the copyright to the work (to enable the publisher to register the copyright in its own name, create and authorize derivative works based off of the original, etc.), in exchange for the publisher’s agreement to take on the cost and responsibility of editing, producing, marketing, and distributing the work. This broad grant of rights means that the original author will have a serious lack of control over how the work appears as a finished product, but it also means that the traditional publisher will also likely bear most of the legal risk in case there are any rights issues associated with the publication.

How Soon Do You Need Your Work Published?

If the answer is “yesterday,” then you may want to give self-publishing a try. Self-publishers can now publish their work in less than a week through print-on-demand (“POD”) or e-book options offered by “independent” or “self-publishing entities.” There is often a year or two delay associated with traditional publishing, so if time is of the essence, do it yourself.

Do You Have a Plan for How You Will Distribute Your Work?

If your answer, like a lot of new authors, is “not really,” then traditional publishing is the more attractive option. Traditional publishers like the Big Five typically have a large distribution network with bookstores, access to booksellers who don’t take self-published work and, above all, a highly professional staff that knows the publishing process—most likely much better than you do. It is also important to keep in mind that traditional publishers are usually valuable brands that bring a measure of credibility to the works they publish. This means traditional publishers typically have a higher chance of getting a work to make a “best seller list,” so if it’s prestige you want, traditional publishing is likely the way to go. A self-publisher will typically need to negotiate their own deals, figure out their own distribution networks, and hit the pavement hard with regard to distribution and marketing.

How Much Can You Spend to Get Your Work Published?

If the answer is “not much,” then traditional publishing is the better option. Traditional publishers finance and take control of the publishing process, and in that sense act as a one-stop shop for an author who just wants the work to be made available to the public. It follows that self-publishing requires the author to front all of the initial marketing and production costs, which the self-publisher may not ever recoup if the work doesn’t sell. Publishing costs like editing, printing, design, and distribution can be very expensive, so traditional publishing can be a very attractive option for the thrifty author. 

Probably the Most Important Factor—Profits

Given the retainage of ownership rights and initial personal investment usually required for self-publishing, it follows that self-publishers will also recoup higher profits and royalties than authors who choose to employ traditional publishers. Authors who do the work themselves and pay their way may thank themselves when their payday arrives, but it is always possible that the work may never end up generating income. It’s a gamble. In the inverse, the traditional publisher bears the upfront costs (and therefore the potential for loss), so the traditional publisher will usually also reap the higher reward.

In addition to the above, there are likely many other financial and practical author-specific questions you should ask yourself before publishing your work, and you should always take the time to both ask and answer these questions before deciding how you will publish. Research the various traditional publishers, independent publishers, and self-publishing entities available to you before diving in, and make sure you understand each company’s publishing terms (and know their reputation) before making the big decision. You pour your heart and soul into your work—ensure that you are putting your best foot forward, and consider employing a legal team who understands and appreciates your needs and goals prior to publishing.

For more information on this article and this topic, contact Charles Wallace.

Photo by Andrew Welch

Are you a music artist (songwriter, musician, producer, mixer, or sound engineer) wondering how to collect the royalties on your contribution to a musical work? If so, you’ll be happy to learn about one of the most significant pieces of copyright legislation in recent history: the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (the “Music Modernization Act” or simply the “MMA” for those of us who prefer to use acronyms). Signed into law on October 11, 2018, the MMA modernizes copyright-related issues that have arisen due to developments in the music marketplace—like digital streaming. The days of the physical sale of CDs, cassettes, and vinyl have given way to the overwhelmingly dominant world of online digital streaming—with millions of tracks being streamed every day—making it difficult for rights holders to gauge their appropriate royalty share. Luckily for music artists, the MMA provides a means for recovering payment.

The MMA is comprised of three key titles: 

• Title I: the Music Licensing Modernization Act

• Title II: the Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society Act (the “CLASSICS Act”)

• Title III: the Allocation for Music Producers Act (the “AMP Act”)

The MMA consolidates these three Titles into a truly remarkable piece of legislation—one that simplifies the licensing process and makes it easier for rights holders to negotiate for and collect fair royalty shares when their music is streamed online. The U.S. Copyright Office plans for this new licensing system to be fully operational by January 1, 2021, with the hopes of lowering overall licensing costs and ensuring fair and timely payment to rights holders.

For many years, a “compulsory license” was needed in order to record and distribute a rendition of a pre-existing song, and these pre-existing songs were licensed on an individual basis. The MMA replaces this cumbersome song-by-song licensing system by establishing a “blanket licensing” structure for digital music providers to make and distribute media for digital download or interactive stream. This gives digital music providers a means by which they can license the entirety of a musical composition, thereby consolidating and simplifying the licensing process.

The MMA also establishes a digital licensee coordinator (“DLC”) to manage music licensee activities, and the mechanical licensing collective (“MLC”) to administer blanket licenses and maintain a publicly-available database of music ownership data. Here’s how the licensing structure will work: the digital music providers report streaming and download data to the MLC, which collects royalties from these digital music providers and distributes such royalties to any identified rights holders. When rights holders cannot be matched to a musical work that has generated royalties, the MLC will distribute the unclaimed royalties to copyright owners identified in the MLC records, basing the amounts distributed on the relative “market shares” of each copyright owner. The existing system for filing notices of intention (“NOIs”) to obtain compulsory licenses on a song-by-song basis will remain in place for non-digital uses such as CDs, cassettes, and vinyl; and although licensees will still be able to serve NOIs directly on rights holders for digital uses, licensees could instead elect to obtain a blanket license by submitting a notice of license to the MLC. 

Prior to the MMA, rights holders did not have a legislative structure for receiving royalties on songs recorded before February 15, 1972—the date Congress began recognizing copyrights in sound recordings. This prevented rights holders from bringing a federal cause of action against unauthorized uses of their sound recordings. Title II of the MMA addresses this issue by extending a rights holder’s copyright remedies for songs recorded prior to February 15, 1972, and further allowing rights holders to file for copyright protection in their songs recorded prior to February 15, 1972. The remedies afforded by Title II of the MMA are not absolute, however, and rights holders must timely take advantage of the additional protections afforded by the MMA by adhering to the following schedule:

• For sound recordings first published prior to 1923, copyright protection lasts until December 31, 2021.

• For sound recordings first published between 1923-1946, copyright protection lasts for 100 years following the sound recording’s date of first publication.

• For sound recordings first published between 1947-1956, copyright protection lasts for 110 years following the sound recording’s date of first publication.

• For all other songs first recorded prior to February 15, 1972, copyright protection lasts until February 15, 2067.

Title II of the MMA also establishes a process by which a user of a pre-1972 sound recording may lawfully use that sound recording if such use is not made “commercially” or for financial gain. The MMA requires a user in this situation to conduct a good faith, reasonable search for commercial exploitation of the sound recording by or under the authority of the rights owner. If the user does not discover any such commercial exploitation, then the user must file a “notice of noncommercial use” with the U.S. Copyright Office, and the rights holder of the sound recording then has 90 days to object to such use.

For the first time ever in U.S. copyright law, Title III of the MMA, the AMP Act, mentions producers’ rights in music. Among other things, Title III allows music producers, mixers, and sound engineers to receive royalties for uses of sound recordings on satellite and online radio. Congress designated SoundExchange as the sole collective rights management organization to collect and distribute digital performance royalties for sound recordings, which SoundExchange distributes to rights holders under what is called a “letter of direction.” The unclaimed royalties for these rights holders were previously held by digital service providers, and Title III now requires these digital service providers to pay music producers, mixers, and sound engineers the royalties they are owed.

The MMA modernizes royalty payment procedure in an attempt to pay each artist and rights holder the amount they deserve, rather than only rewarding music artists and professionals who have “made it.” This will, in turn, incentivize the creation of new works, encourage collaboration among music artists, and support the Copyright Act’s objective of promoting the progress of the arts. Congress composed this brilliant piece of legislation to make better the lives of those who make our lives better. As one quote of unknown origin famously says, “Music gives a soul to the universe, wings to the mind, flight to the imagination, and life to everything.”

For more information on this article and this topic, contact Charles Wallace.

Photo by Gwen Ong on Unsplash

Many of us have seen a theatrical production, but more often than not these performances consist of a fully-scripted play or musical. Enter the less common form of musical production—the musical revue—created from pieced-together acts, songs, bits, and routines from other shows. To the surprise of some, the creator of a musical revue can claim copyright protection for the entire show, even as each component is owned by someone else. The overlap of ownership here can be both confusing and risky, so let’s unpack the issues.

The Copyright Act provides federal protection for original works such as literary, dramatic, musical, and artistic creations. This federal protection advances the Copyright Act’s purpose of promoting the progression of the arts by protecting the exclusive right of copyright owners to benefit from their works. That said, the Copyright Act also offers explicit protection for “compilations,” or works formed by the original and creative selection, coordination, and arrangement of preexisting materials. Notice what is protected: not each individual piece of preexisting material (which may be owned by someone else), but rather the unique work resulting from the creative decisions involved in compiling those materials. The musical revue falls squarely within this federal protection. 

One may wonder why such a doctrine exists—after all, what’s the point of protecting an individual work if someone else is allowed to group it with other materials and claim copyright protection in the resulting compilation? One answer is that it encourages the creation of new works, thereby advancing the Copyright Act’s purpose of promoting the progression of the arts. Although it can hardly be said that “there is nothing new under the sun,” time has shown that even wholly original works are sometimes strikingly similar to preexisting works (e.g., Avatar as compared with Pocahontas and The Lion King as compared with Shakespeare’s Hamlet). Indeed, some authors even base new works wholly on preexisting works (e.g., West Side Story, Kiss Me Kate, and My Fair Lady as compared with Shakespeare’s Romeo and Juliet, The Taming of the Shrew, and Pygmalion, respectively). The Copyright Act takes everything a step further—explicitly granting authors the right to protect their compilations of preexisting material. 

Another answer is that the Copyright Act’s protection for a compilation still requires the musical revue creator to seek permission for the use of the underlying materials. While the creativity required to arrange the compilation is protected, the compiled materials have their own authors, with their own rights, which may include the right of public performance, the right of reproduction, and more.

For example, performance of a musical revue in public requires certain steps to avoid legal issues (see my blog post on performance rights). Performance rights organizations (“PROs”) like ASCAP, BMI, and SESAC represent composers and lyricists, and many performance venues purchase “blanket licenses” from PROs to be able to publicly play or perform music. Such licenses primarily cover performances of songs themselves, and are not suitable for fully-produced performances or any other use—the policy is to prevent the circumvention of royalty payments through only performing a scene or two from a musical. Further licensing will likely be required in order to make other, non-performance-related uses of a song (e.g., displaying a song’s sheet music on a web site, copying an audio file and distributing it to others, etc.), and it is therefore best practice to check with the licensing agency or the music publisher that represent the songwriter or musical from which the song or songs come to make sure you are operating under the law. 

The licensing process can be complicated, but making sure your use of a song is cleared beforehand could substantially reduce the risk of headaches down the road. But hey—once the materials in your musical revue are cleared and your performers are rehearsed, you’ll have a show! And you wouldn’t want others performing your show without permission.

U.S. copyright law is fraught with various intricacies, but it is always important to remember that if you’ve got a work you would like to protect (even if your work is a compilation of materials containing preexisting works), consider applying for the protection afforded by registration with the U.S. Copyright Office. You never know who may “revue” your materials.

For more information on this article and this topic, contact Charles Wallace.