Every successful artist has a manager (perhaps several) and the agreement between the manager and the artist should be clear and in writing. The relationship between an artist and manager may start out informally or may be based on a verbal agreement but should always be thought out and detailed. While the common goal of ensuring the artist’s success can produce a sense of camaraderie and partnership, far too often achieving success (and receiving the money that follows) can result in disputes and even lawsuits.

Early on in the relationship, the terms are often simple: the manager will promote the artist and take a percentage of the artist’s income. But does the manager take his cut before or after the artist’s expenses? And which expenses are calculated into the deal? For example, if a headlining band gets paid $1000 to play a show and the headlining band pays the opening band $200, does the headlining band’s manager take a percentage of $1000 or $800?

The example above is a simple illustration but shows just how many ways things can very complicated very quickly. What are the manager’s responsibilities? And what happens if he fails to fully satisfy those goals? Does he not get his full percentage? Does he not get any commission at all?

Any business deal where money changes hands should be in writing. When a manager begins working with an artist, the manager is investing his time and efforts in the artist’s career. The manager may get the artist a record or movie deal or a sponsorship agreement that continues to pay the artist for many years. For this reason, management agreements often provide for the manager to continue to get paid after the management relationship is terminated. For the artist: do you want to continuing paying your manager after you fire him or he quits? For the manager: do you want to make sure you get paid for your work even if you’re not managing this artist for the rest of his career? All these terms must be in writing or they will be very hard to enforce!

A management contract answers countless questions and lays out the terms of the relationship so that disputes (and lawsuits) can be avoided in the future. While the artist and the manager are on the same “team” for most endeavors, they are potentially adverse parties in the negotiation and execution of a management agreement and therefore should be represented separately. Although a fledgling artist or new manager may not have discretionary funds to spend on a management contract, the money (and resources) it can save in the future makes it a crucial step in any career.

Facebook, the social networking website, is allowing its users to create custom usernames to identify themselves in the URLs for their profile pages. On June 9, 2009, Facebook announced its plan to replace randomly assigned numerical labels in its URLs with user-selected web addresses for personal Facebook profiles pages (e.g., http://www.facebook.com/replinrhoades). Users will be able to find particular Facebook profiles by using individual names as search terms in Facebook searches and internet users will be able to locate these pages by performing Google searches of usernames.

The new Facebook usernames must be at least 5 characters in length and contain only alphanumeric characters. Facebook will not consider requests to register generic usernames such as “restaurants” or “beer”. Username registration opens to Facebook members at 12:00am EDT on Saturday June 13, 2009. Usernames will be registered on a first-come, first-served basis.

Trademark owners who wish to prevent their marks from being registered as new Facebook usernames should act immediately to notify Facebook by completing and submitting an electronic request using Facebook’s online request form available at http://www.facebook.com/help/contact.php?show_form=username_rights.  Facebook will only accept requests to protect federally registered trademarks.

To prevent username cyber-squatting, Facebook has temporarily limited eligibility for usernames to members whose Facebook accounts pre-date the public announcement of the new vanity URLs. Username registration for new post-announcement Facebook members will open on Sunday, June 28, 2009.

Facebook has also implemented a process for requesting the removal of infringing usernames should trademark owners fail to notify Facebook of their rights prior to the June 13 deadline.  However, Facebook claims that once a username is set it may not be altered or transferred for any reason. Therefore, if Facebook agrees to remove a username based on a trademark owner’s request, it seems that the username will be permanently unavailable for future use by any other user, including the trademark owner.

Please contact Replin & Rhoades if we can assist in notifying Facebook of your registered trademark or answer any questions about this recent development.

We are part of a “do it yourself” society, where “DIY” is a well-known moniker. DIY is great for many things but drafting legal documents is not one of them. There are lots of form agreements available but they rarely do the job of actually securing a deal, protecting your interests, or otherwise functioning as a truly good contract.

Every deal is different and each deal is unique. If you’re involved in a transaction that requires a contract, it’s important enough that you want the contract to be good. Form agreements may do an adequate job of touching on the major issues (term of the agreement, territory, payment) but usually ignore the details that are so important to every deal. While some forms are better than others, it is virtually impossible to have one form cover all contingencies.

We often talk to people who want to use a form (or “canned”) agreement and then have us “touch it up” or “look it over.” While this may seem to be a money-saving solution, it can take a lot of time to go through a canned agreement and figure out what is missing, where the important terms are, and what may need to be added or edited. In fact, it often takes us less time to do the entire agreement ourselves than it does to fix and fiddle with a form or pre-packaged document. Think of it like building a house: would you try and build the house yourself and then hire a contractor to come in and figure out what is missing and what needs to be changed? It’s just not efficient.

You want your contracts to protect your interests, to accurately explain the deal, and to be properly drafted from the beginning. Canned agreements rarely accomplish these goals. But we can! Feel free to contact us with any questions about your contract.

There are lots of great ideas out there and every successful business starts off as just an idea. One of the most important steps in building a profitable venture is protecting your brand. Your brand may be something as simple as a name, it could be your logo, or even your design scheme or marketing campaign. It’s worth your time and money to safeguard your brand from the very beginning.

The most comprehensive brand protection is a federally registered trademark. You can register your name, logo, tagline or other branding even before using it in the marketplace by filing an “intent to use” application. If your branding is already in use, trademark it right away! Someone else may beat you to it and then you will have lost the right to use your brand – you’ll have to change your name and possibly cease operations entirely. Not worth it!

A little forethought goes a long way. Feel free to contact us about a free consultation on how to protect your valuable intellectual property.

Sunday, March 22, 2009
Event Review: Create Denver Expo

The 4th annual Create Denver Expo was a day-long event providing creative individuals and businesses an opportunity to learn and gain awareness of the various services and programs available in the Denver area. There were 37 workshops on various topics led by experts in the fields of marketing, personal and business finance, media relations, music and film production, and public art.

The Anatomy of a Major Studio Film Deal (Replin & Rhoades, LLC) was my favorite workshop. Steve Replin and Laurie Rhoades are both attorneys that specialize in entertainment law. Their practice includes the representation of film makers, writers, musicians, studios, museums, those in the fashion industry, and all others in the creative arts. During the workshop they basically broke down a typical film production contract, pointing out the areas one should be concerned with and the mistakes people have made.

Registering or merely using your trademark in commerce is not enough to obtain the full protection of the trademark laws throughout the US. Do you know that you have the affirmative obligation to enforce your trademark rights, and if you don’t, they could be lost?

You as the owner of a trademark (even if not federally registered) have the power to stop others from using this exact mark or anything else that is confusingly similar. But, how do we determine what a “confusingly similar mark” is in the marketplace? The courts typically look at three factors in their examination:

1. Will the consuming public be confused if two or more companies are using the same or similar trademarks at the same time?

2. Are the products with the same or similar trademarks being sold in the same manner, in the same parts of the country, through the same retailers or other distribution channels?

3. Is your trademark or one that is confusingly similar, being used on competing products or services such that the sale of one will likely stop the purchase of the other?

If your trademark is being infringed by a “confusingly similar” mark, and you can prove a financial loss, or that the person using the other mark has some financial gain as the result of his wrongful use, you may be entitled to damages based upon his profits or your losses.

If the court finds that the infringer has intentionally copied your trademark, you may be entitled to your attorney’s fees, and punitive damages. Punitive damages are compensation paid to you by the infringer over and above your actual damages, and represent the court’s punishment of the intentional copier for his malicious or willful misconduct.

In order to develop and keep your trademark strong, you must continually survey the marketplace for competing marks that may cause confusion and therefore result in a lowering of the value of your mark. This is something that you should schedule periodically, or we have the capability to monitor and police your trademark to keep it strong and valuable. Ask us how.

It’s great to get together with fellow musicians and shed. Then you start to get some tunes together and want to gig. All of a sudden, you’re a band! Aren’t there some things you should do before you take the next step?

Starting a band is like starting a business. And every business should start with an agreement. While every venture starts out with good intentions and everyone getting along, things inevitably break down. An agreement can lay out who contributed assets to the business (“that’s my microphone!”), how ownership is divided amongst the members (“I’m the singer so this is my band”), and how decisions are made (unanimous? majority rules?). If the band or business is an LLC, an operating agreement lays out all these details (and more). An operating agreement is absolutely necessary when founding an LLC.

Whether you’re a musician starting a band, a filmmaker embarking on a new project, a designer producing a new line of products, or just about anyone starting any business, make sure you put it all in writing from the very beginning. It saves a lot of headaches and heartache down the road.

Within the fashion industry, many celebrities have attempted to capitalize on their celebrity status by licensing their likenesses, names, voices, or other special characteristics of their celebrity status to fashion designers and fashion manufacturers. This raises a number of considerations that must be examined by licensees of such identification elements.

Some of the issues that deserve special consideration in the negotiation of a celebrity licensing deal include the following:

1. Retirement of the Celebrity:

What happens if the celebrity retires during the term of the license? Arguably, her presence as a celebrity in the public eye diminishes and hence, the value of her likeness on your product decreases. And, what if you have invested substantial funds into building a product line around the attributes and reputation of a celebrity who is no longer actively engaged in the activities that made them well known?

This is also a prime consideration even if the celebrity is not retiring but winding down the previous level of her activities. Any lowering of public visibility will ultimately result in decreased sales of all affiliated products.

It is important to recognize the possibility of these occurrences as you negotiate your license terms with the celebrity. Some of the potential solutions that may mitigate the impact of retirement include:

• an affirmative requirement of some minimum level of activity as a singer/actor/writer/dancer in the absence of which, the royalty rate drops substantially;
• a penalty imposed upon the celebrity for diminished activity levels during the term of the license to help the licensee recoup its investment in product, design, manufacturing, and so on;
• a requirement that the celebrity be required to purchase all of the remaining inventory of licensee upon the triggering event;
• require some levels of public presence in the license agreement (e.g. in the case of a screen actor, require the presence of the actor in at least one feature length motion picture per calendar year with a budget equal to or in excess of $25 million); failure to meet this threshold will terminate the license agreement at the discretion of the licensee;

2. Death or disability of the celebrity:

Because of the devastating impact of either of these two events on the licensee and its branded goods, the negotiated license should require the maintenance of life and disability insurance policies on the celebrity so that if she is no longer to participate in her craft due to her death, the insurance policy will remit funds to the licensee in order to compensate it for the loss of its spokeswoman. The same format should be followed with a disability policy naming the licensee as the beneficiary.

Because the death of certain celebrities may result in improved publicity value, the decision to terminate the license should be at the complete discretion of the licensee. For this reason, it is imperative that the license be binding upon the heirs of the celebrity.

3. Loss or Change of Reputation:

How often have the travails of the rich and famous celebrity of today resulted in bad will, loss of reputation, and a diminution of good will in the eyes of the public? How often has a tumultuous divorce resulted in public scorn? How often have the actions of a public figure resulted in scandals in the press?

These activities that bring public disrepute to celebrities can and most often do result in a significant decrease to their “value” as a celebrity endorser. The brand, and the licensee’s investment in it through advertising, product placement, manufacturing, and so on may actually be rendered valueless as the result of the ridicule.

The license needs to be negotiated and drafted to deal with these possible events in creative and effective ways. Some of the suggestions that we have for these clauses are as follows:

• Measure the impact of “bad press” on gross sales volume compared to comparable periods in the past,
• If there is a period to period drop in gross revenues of a threshold amount (for example 50%), then it can be assumed that the decrease may due to the change to the reputation of the celebrity.
• Decrease the royalty rate dramatically if a certain number of “damaging stories” are printed in Variety, Hollywood Reporter, the New York Times, People Magazine, or are reported on celebrity TV programs (e.g. E Entertainment).
• In the event that a “damaging story” appears, in the discretion of the licensee, it may submit the issue to a panel of industry arbitrators who have the ability to declare the impact substantial and to impose penalties and sanctions upon the celebrity as the result. The results of the panel should be binding and non-appealable so that the celebrity realizes that she should conduct herself in a professional manner continually.

These issues are important to consider as you negotiate your licensing agreement. You can easily see how significant the impact of celebrity behavior can be on the value of your license arrangement. The fashion business is difficult, expensive and risky in its own right without adding the uncertainties of dealing with celebrity personalities and their impact on your product and reputation.

Welcome to the blog for Replin & Rhoades, LLC. Our full-service law firm works with individuals and businesses of all kinds and we take particular pride in working with members of the creative arts community.  This practice is commonly known as Entertainment Law.

Our creative arts clients may be filmmakers, musicians, authors, publishers, producers, fashion designers, web developers and any other person or entity that adds to the creative world. We welcome everyone.

As with most blogs, our will take shape as it develops. We hope our readers will find it useful and informative and refer to it often. Some posts will provide information on topical issues, others may report on recent events, and still others may just be for fun. We appreciate your interest in our firm, our website, and our blog, and we welcome your feedback and comments.