New York Entertainment Attorney

New York Entertainment Lawyer John J. Tormey III, Esq. John J. Tormey III, PLLC: My name is John J. Tormey III. This is my blog. I am a New York lawyer, also admitted to practice in California and the District of Columbia. My focus is on entertainment, art, media, copyright, trademark, limited liability company law, and music A and R (Artist and Repertoire) matters. I formerly served as Counsel to The Walt Disney Company, and Senior Counsel and Senior Litigation Counsel to Miramax Films.

Tuesday, January 1, 2013

Employment And Severance Scenarios: Written By New York Entertainment Attorney And Employment Lawyer John J. Tormey III, Esq.

http://www.tormey.org/employment.htm

Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney

John J. Tormey III, PLLC

1324 Lexington Avenue, PMB 188

New York, NY 10128 USA

(212) 410-4142 (phone)

(212) 410-2380 (fax)

brightline@att.net

http://www.tormey.org/

Employment And Severance Scenarios: Written By New York Entertainment Attorney And Employment Lawyer John J. Tormey III, Esq.

This article is not intended to, and does not constitute, legal advice with respect to your particular situation and fact pattern. Do secure counsel promptly, if you see any legal issue looming on the horizon which may affect your career or your rights. What applies in one context, may not apply to the next one. Make sure that you seek individualized legal advice as to any important matter pertaining to your career or your rights generally.

In prior articles I have alluded to the fact that many people think being an entertainment lawyer is a romantic existence. Yet the brass-tacks principles of employment law and the harshness of employee severance and termination scenarios often overtake that romanticism. Being an entertainment lawyer entails a lot more than hanging-out with talent backstage or on the tour bus. In prior articles I have also alluded to the fact that artists often have “day jobs” providing their paying employment to subsidize their artistic ventures. As a New York entertainment attorney who grew up in a show business family in the midst of performers, I’m used to this. Most of these artists intend to abandon these day jobs, with or without an employment severance package, once they get signed to a development deal, record contract, or otherwise “make it”. But what happens in the meantime? What if an artist works for a company that intends to jettison him or her as an employee, rather than the other way around? What if the company counts on using an employment severance package as a hedge against risk of an after-occurring wrongful-termination lawsuit?

These past few years have comprised a particularly bad time in terms of employee and contractor lay-offs and firings. As a working entertainment lawyer in New York I have seen many artists and others downscale and change jobs in recent years. Many situations which used to prompt a severance package to materialize in the prior decade, do not do so any longer. The fact of the matter is, a large proportion of employees and other workers misplay the handling of their job exit, if and when it occurs in the employment law context. In the interests of employee and worker empowerment before the blue-ink dries on the release and settlement agreement or other severance documents, this article follows. Though written by me as a media and entertainment attorney working with entertainers, the same principles apply to employment work in other industries and sectors.

I suppose that the first rule of employee empowerment is fairly pedestrian-sounding, but vitally important. An employee must read and review every employment document pertaining to his or her job and career, carefully - including the following disclaimer. The employee should secure counsel promptly, if he or she sees any legal issue looming on the horizon which may affect the employee’s career or rights - including legal issues relating to employment and severance packages. As an entertainment lawyer friend and entertainment law professor of mine used to say, “every deal is different”. What applies in one employment context may not apply to the next one. The employee must make sure that he or she seeks individualized legal advice as to any important matter pertaining to the employee’s career or rights generally. It is not uncommon that a soon-to-be-terminated worker starts calling attorneys as soon as offered an employment severance package.

There are attorneys, entertainment attorneys and otherwise, who routinely handle “employee-side” legal matters. A number of attorneys may be able to do so affordably for even a modestly-compensated employee, in the context of a severance proposal or otherwise. An employee-side lawyer should be accustomed to representing people who have limited financial resources, and this is a particularly-familiar fact-pattern for an entertainment lawyer handling artist-side work. There are parallels. And, assuming that one is not a lawyer, one should no sooner handle one’s own legal work than handle one’s own dental or medical needs oneself. The severance and employee-exit scenario most often entails some analysis of employment legal issues governing the exit. Given the economic realities faced by those in the artistic world, all entertainment lawyers need to be familiar with these employment legal issues.

The employee should remember that most employers themselves have in-house or outside attorneys. Indeed, the employment, severance, settlement, release, and exit documents are most often drafted by these attorneys. They may be entertainment attorneys, employment attorneys, litigators, or generalists. However monikered, often an employee’s securing of his or her own counsel is the only way to equilibrate the proverbial scales of justice in a severance or other job-related scenario. Exploitative and even abusive treatment of employees is unfortunately rampant in the employment law context, including at the time of worker exit - particularly in highly-competitive cities like New York and Los Angeles, and in highly-competitive industries like entertainment and media as any entertainment attorney will tell you. The good works and lessons taught by historical pro-labor figures like Samuel Gompers should not go for naught. The employee should not look to the employer, or the vicissitudes of chance, to protect the employee and the employee’s own legal rights in the workplace or in the context of a severance or other exit from employment. Rather, the employee should empower himself or herself, and should not be inhibited in seeking out the advice and opinions of those professionals who handle employee-side legal work for a living.

On to the substance and detail.

The lead singer of a rock band about to step onto a live television set is furnished a “release” for signature five minutes before scheduled air time. The entertainment lawyer representing the singer might cry, “No!”. While this could sound like an entertainment attorney observation meant only for the golden days of the Ed Sullivan Show, the rule of not signing on-the-spot is true in the employment context and across all other subject-matter areas and sectors as well. Like the artist, the employee, too, should never sign any document, employment document, severance document, or otherwise, on-the-spot. The employee should not be bullied into signing on the spot, as a product of fear, or the purposeful manipulation of same by oppressive employers or ex-employers. There are very few situations in life where one truly must sign a document on-the-spot, and an employment-related signature is usually not one of them. One of the only valid such situations that I can recall from my own experience is when an attorney must sign a stipulation on-the-spot before a judge, as the only way to preserve the attorney’s client’s rights. This will not likely be a situation that one will ever have to encounter as an employee or terminated employee in an employment severance context or otherwise. Employers typically offer severance to terminated workers out of fear of being sued by them, meaning that the worker often has more leverage in the employment context than he or she initially thinks.

It is astounding, though, as to how many people make this mistake of “on-the-spot” signing, time and time again, in the entertainment law context, and in the employment severance context and in the workplace and business-world generally - even if these signatories know better. The employee should trust his or her own instincts. If it smells bad, it is bad. If anyone, be it a car salesman, a manager or talent agent you’ve never heard of before, or, yes, an employer offering an employment severance package while terminating your employee services, waves a document at you as panaceatic – you should be suspect. The entertainment attorney’s first instinct is that a document waved at you for on-the-spot signing is not worth to you the paper it is printed on. In the employment context, if the employer presents the employee with a severance document or other document and tries to pressure the employee to sign that document on-the-spot, the instinctual reaction should be similar. The odds are better than 99% that the employer is trying to take advantage of the employee in that latter case - and trying to force the employee to thoughtlessly relinquish in haste valid and enforceable legal rights that the employee already and otherwise possesses.

By comparison, what does an entertainment attorney do, when given or forwarded a document intended for signature in the context of a rights deal, for example? The entertainment lawyer will typically indicate to the party who proffers the document for signature: “Thank you - my client and I will review and respond to this document”. Period. If the “proffering” party then says: “Hey entertainment lawyer, aren’t you or your client going to sign it now?”, the entertainment attorney answers with a flat “No”. Although it is possible that the proffering party will thereafter withdraw whatever offer the document contains and take it permanently off-the-table, they typically won’t. And if they do, it probably was not an offer worth taking anyway. This analysis also applies to written employment severance packages, releases, and settlement agreements, just as it does to talent agreements, agent and manager agreements, car purchase agreements, and just about any other form of proposed contract that one might ever be offered. Again, this rule is by no means entertainment attorney-specific, but instead is generalizable to the employment context and across all sectors and industries.

The protocols of professionalism create an expectation that all parties should be given a reasonable opportunity to review a document, including a proposed employment severance document, prior to either: (1) signing it as written (an extremely unlikely occurrence, by the way, if a good attorney reviews it for the employee); or else (2) responding to the proposed document with a fax, letter, red-line comparison draft, or mark-up indicating the receiving party’s proposed changes. This would normally be the way entertainment attorneys would interact with and between each other on a proposed license agreement, for example. The two entertainment lawyers would expect careful reading and deliberation on either end. If a proffering employer-party in the severance context, however, instead threatens to withdraw the document “since it wasn’t signed on-the-spot”, then they are just being ridiculous and overbearing. The odds are, again, better than 99% that their “non-negotiable” document would have been a legal disaster for the employee to sign as initially proposed. Again, this observation applies to employment severance packages, and most all other forms of proposed draft agreements in most all contexts other than employment, too.

Some employers in the media and entertainment industry context and otherwise even have the unmitigated gall these days to ask employees to prospectively waive their right to a jury trial in the context of so-called “non-negotiable” employment agreements including severance or other exit agreements, as but one type of egregious example of the foregoing. It is jungle out there. If one is asked to sign an employment severance agreement with jury trial waiver or other exit document on-the-spot, it is entirely fair and within one’s rights to say that “I will need to review this document with my attorney”, or “I don’t sign documents of a legal nature without attorney review”. And, if the proffering party disputes the employee’s right to legal representation, perhaps this is someone that the employee doesn’t want to accommodate anyway, on principle. This country’s entire legal history was predicated, in substantial part, on the rights of the individual, and the individual’s right to counsel. The framers of the Constitution worked hard. It would be a mistake to let them down now.

The next rule is a corollary to the prohibition on “on-the-spot” signing: The employee should never believe the employer, when the employer offers a “standard” form of employment severance agreement or otherwise. An entertainment attorney will tell you that “standard” is the biggest lie in the entertainment industry. It should be considered comparably fallacious in the employment context. If the employee wants to empower himself or herself in the workplace and in the commercial world, what the employee needs to do is repeat the following phrase repeatedly, like a mantra: “There is no such thing as a ‘standard form’. There is no such thing as a ‘standard form’”. Because, there isn’t, as any entertainment lawyer should tell you.

Rather, “standard form”, after an entertainment attorney on the receiving end translates it, just means “get over on you”. Similarly, a “standard form” employment severance document is synonymous for “oppressive and one-sided form that takes advantage of the employee”. The employee should remember that the draftsperson of a so-called “standard form” is probably a fairly predatory-minded employer-side lawyer handling the company’s employment severance protocols en masse who is under absolutely no obligation to protect - or indeed even acknowledge or accommodate - the employee’s interests. Indeed, the opposite is true. The employer-counsel’s professional obligation as a member of the Bar handling the employer-side severance work is to be a zealous advocate of only his or her own client’s interests - that is, the employer’s interests only. If the employee signs an employment severance document because the other side tells the employee it is a “standard” or “non-negotiable” form, then the employee might as well be walking off the roof of the proverbial building just because the employee was told to do it. The employee should not trust “standard forms” in the employment severance context or otherwise, or those employers who purport to furnish them. Again, this may be an entertainment attorney observation, but it applies to all workplaces and other contracting situations as well.

The employee should make sure to have retained copies of every single scrap of paper pertaining to his or her employment relationship with any company, up to and including the time of the severance communications. The employee should not trust or rely upon the employer to give the employee copies of - or even access to - those employment documents and the employee’s human resources file, if and when the employee’s work honeymoon period with the employer ends, or if and when the employee’s services are, or are about to be, terminated in a severance or other context. Remember that the Japanese model of “employment for life”, and the antiquarian U.S. model of the gold watch after 40 years of service, just simply do not apply anymore. Severance and parachutes - and these days the absence of them too - often replace the old model of dutiful loyalty.

Our United States work-force is more mobile and transient than it ever has been. The workforce I see as an entertainment attorney practicing in New York, is most decidedly such a miasma. People change jobs all the time, with or without accompanying employment severance packages and exit agreements. The motility of the workforce, by the way, greatly empowers employees to seek out their market-value salary and non-abusive working conditions – so it is not necessarily a bad thing. As a practical matter, in New York or elsewhere, entertainment industry or otherwise, the employee should work with the assumption that the employee will one day have to depart every job ever taken with or without severance, no matter how rosy the employment picture of any job looks initially. If the employee stays at that job until retirement, more power to the employee. But the employee should realize that the statistics indicate this would be an extremely unlikely occurrence in this day and age given current job-market employment conditions.

The employee should make sure that, prior to any severance scenario, his or her exhaustive, fully-complete “job file” is kept at the employee’s home - not in an office desk drawer, not in the company’s file cabinet - not anywhere near the employment workplace. It is astonishing as to how many employees fail to do this simple thing. The employee should remember that the old-fashioned paradigm of “two weeks advance notice and severance” is rapidly becoming a vestige of the past, particularly in the media employment context as I see it from my vantage-point as an entertainment attorney. Many media, software, and other types of employers will now think nothing of having an employee escorted out of the workplace by a human resources rep, or even by security personnel, the day and even moment the employee is terminated. Usually when this happens, the employee is not smiling and holding a severance check when led out of the building towards the parking lot or subway.

Why is this happening? Because employers are becoming increasingly afraid of disgruntled employee (or ex-employee) theft of company material, misappropriation of software, and even sabotage and violence in rarer cases. The employment misappropriation threat is felt particularly by media and entertainment companies, and unfortunately workplace violence incidents are on the rise everywhere. Some employers see the promise of severance - carrot-on-a-stick illusory, or not, as finally offered - to be a hedge against these risks as well. The moral of the story - the employee should keep perfect and thorough contemporaneous documentation of his or her employment file, at home, well prior to any severance scenario.

The employee should save copies of everything - offer letters, acceptance letters, employment contracts, “non-compete” documents, non-disclosure or confidentiality agreements, employee handbooks, time cards or time sheets, performance reviews, expense and reimbursement forms and receipts, insurance and COBRA documents, inter-office memos relating to work and performance, and anything else relating to the employment relationship with the company. The only exception would be, the employee should not remove any material from the workplace which is the employer’s or someone else’s property, or which the employee is contractually or otherwise obligated not to remove from the place of work. As an entertainment attorney handling production matters, I expect this issue to arise often, since an employee will usually depart while at least some non-fungible projects are still in development or production at the employer’s premises. This question of property ownership, intellectual property and otherwise, is sometimes a more difficult judgment to make than it sounds. If ever in doubt - you guessed it - the employee should seek an attorney’s advice prior to any such removal and prior to the closure of the employment severance or other exit documents.

Prior to the severance scenario materializing, the employee should be making thoughtful dated written notes to the employee’s own files and keep them at home, anytime any legally-relevant event happens during employ - such as a supervisor expressing either approval or disapproval with one’s work, or a fellow employee making suggestive or harassing comments in one’s presence. These written notes should be reduced to writing privately, immediately after the event occurs, as opposed to a day or more later. These written notes should quote what was said verbatim (yes, using actual quotation marks, and accurately). The employee should not let these notes merely rely on paraphrases, if possible.

These written notes should be taken home to the extent allowed and feasible, by the employee, on the date of the event so recorded, and should be stored securely in the employee’s employment file at home until ever needed. One would be surprised to learn just how many otherwise-valid employee-side severance-related and other legal causes must be wholly abandoned, simply for the employee’s idle failure to make a written verbatim record of important workplace conversations. This overall issue arises in the context of employment attorney and entertainment attorney work, though familiar to most all other legal practitioners as well. For legal purposes, the employee must assume that a re-constructive written record made in retrospect the following week instead, or a non-verbatim note, is near-worthless relative to one taken at the moment. What the employee wants is what is known as a “contemporaneous written record” - that means, “at the same time as the occurrence of the event itself”. And yes, for most forensic purposes in the employment context, that also could include a careful verbatim written record made by the employee five minutes after the event ends. The employment severance dialogues themselves, if and when verbal alone, should be reduced to writing by the employee in this fashion, too.

Finally, the last rule is a corollary to some of the others mentioned immediately above: The employee should bring or forward a complete photocopy (not originals) of the employment file which the employee kept at home, to the attorney or attorneys – entertainment attorney or otherwise - that the employee is considering to represent the employee in the negotiation of any employment exit and severance agreement, or any litigation or proceeding for wrongful termination of the employment or otherwise.

The employee should remember that what he or she discloses to an entertainment lawyer or any other attorney is strictly confidential, even if the employee never ends up retaining that lawyer to handle the employment severance or exit agreement or any other work. This rule of confidentiality is a serious and inviolate rule. That lawyer could lose his or her license to practice law, if he or she ever betrays the employee’s confidences. Accordingly, after first making sure that the lawyer doesn’t also represent the employer on the employment severance matter (or even otherwise), the employee should be totally candid and thorough in terms of the facts brought to that lawyer’s attention. The employee should not “screen out” facts that the employee thinks are irrelevant or that the entertainment or employment attorney “would never be interested in”. After all, if the employee is not an attorney himself or herself, he or she could be well wrong about this type of conclusion. It is the attorney’s job, not the employee’s, to filter out the irrelevant from the relevant. The employee should give the lawyer all the raw data. The matter may be the first employment severance deal which the employee has ever lived through, but probably not the lawyer’s.

The employee should cover any packet furnished to his or her actual or intended lawyer with a transmittal letter bearing the legend “Strictly Confidential”, or words to similar effect. That cover letter should include a typewritten or word-processed narrative in the employee’s own words, of all the facts and chronology of the severance or other employment matter about which the attorney is being contacted. The employee should not rely upon an oral soliloquy to make his or her point. Rather, the employee should write it all down, in legible font or typeface, before contacting the lawyer. Again, the employee should ensure, prior to divulging these facts to any such attorney, that the attorney does not already represent the employer or any other party closely affiliated with the employer on the employment severance matter (or even otherwise). It is a small world, and the entertainment and employment law bar in the employee’s locale may be even smaller.

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My law practice as an entertainment attorney includes state and federal employment law matters, including terminations, severance packages, executive compensation, settlements, releases, and other human resource matters including those that may arise in the fields of film, music, television, publishing, Internet, and other media and industries. If you have questions about legal issues which affect your career, and require representation, please contact me:

Law Office of John J. Tormey III, Esq.

John J. Tormey III, PLLC

1324 Lexington Avenue, PMB 188

New York, NY 10128 USA

(212) 410-4142 (phone)

(212) 410-2380 (fax)

brightline@att.net

http://www.tormey.org/

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Employment And Severance Scenarios

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Trickle-Down: Written By New York Music And Entertainment Lawyer And Film Attorney John J. Tormey III, Esq.

http://www.tormey.org/trickle.htm

Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney

John J. Tormey III, PLLC

1324 Lexington Avenue, PMB 188

New York, NY 10128 USA

(212) 410-4142 (phone)

(212) 410-2380 (fax)

brightline@att.net

http://www.tormey.org/

Trickle-Down: Written By New York Music And Entertainment Lawyer And Film Attorney John J. Tormey III, Esq.

Reports in the press of contract disputes of years past - one favorite of this music, film and entertainment lawyer which is entitled “Dixie Chicks Sue Sony” - discussed another installment in the seemingly-perennial process of music recording artists suing the record labels with which they previously signed contracts. According to “Dixie Chicks Sue Sony”, the Dixie Chicks claimed that they were due at least US$4.1 million in royalties under their contract, from their music label. See, e.g.:

http://news.bbc.co.uk/2/hi/entertainment/1514747.stm

There is a commonality between this type of music dispute, and a “net profits” or “points” dispute in the context of film or television.

This music, film, and entertainment lawyer article, on the other hand, can offer no opinion on the merits of the Dixie Chicks litigation or contract, or opine with regard to the oft-wondered question in litigations of “which side is in the right?”. The statistical odds in any music, film, or other contract litigation about royalties, net profits, or “points”, are that the case will settle pursuant to a stipulation of confidentiality. Even if we learn of the details of the Dixie Chicks contract or the case’s resolution, we’ll therefore never really know for sure about how other similar music royalty or other contract disputes may have been reconciled. But notwithstanding the sizable amounts of money at stake, the Dixie Chicks-Sony case will likely be governed by certain principles common to all music and film industry contract disputes of its kind, as any entertainment lawyer like myself will tell you.

It really boils down to the timing of when a music artist, film talent, or other artist for that matter, is or should be paid under the contract. Though this may sound pedestrian, the equation is simple. The music and entertainment lawyer opines that, “Agreeing in a contract to be paid the bulk of one’s compensation later rather than sooner, increases the odds that one will be unhappy with the dollar amount of the royalty, “back end”, “net profits”, or “points” payment(s) at that later date”. Would the Dixie Chicks-Sony music contract litigation have never occurred, if the band’s paid-up-front recording advances had been larger? No one – not music and entertainment lawyer, and perhaps not even the parties to the lawsuit themselves - will ever really know that answer for sure, either.

But one cannot argue with the equation. As argued and hammered-out between music or other entertainment lawyer counsel in the contract negotiation, a larger up-front advance to the artist or group at least reduces the magnitude of later artist dissatisfaction with the “net profits”, “points”, or royalty stream of payments that follow. Arguably the Dixie Chicks would be in a better economic position, if suing under the contract for “only” US$1.1 million rather than US$4.1 million. The general form of equation holds up across film, television, publishing, and all other entertainment, media, and related realms. You are better off the earlier you are paid.

Holding aside the Dixie Chicks contract dispute example for a moment, the practical reality for other artists in the music industry is that they often sign record contracts - or now, 360 deals - without the help of a music and entertainment lawyer, before they become commercially successful. Every successful recording artist in the music industry has historically had a “breakthrough” album. What looks like a huge advance in a contract to a starving music artist in the context of an earlier record deal, may later look like a per diem to that same artist several years later after she or he has “made it”. And indeed, the record label’s frugality is understandable. Few if any economically-rational record labels are willing to plunk down a huge contractual advance for an artist who has yet to “make it” commercially, even if they have already retained the services of the best of music and entertainment lawyers. The music and entertainment lawyer can protect the artist. But under most all circumstances (apart from one great band and keyboard player that I know in Pittsburgh), the music and entertainment lawyer is not the one also making the music.

Again, these artist-payment contract disputes, in the music industry, film industry, and otherwise, are a function of time and timing. In this light, the Dixie Chicks are essentially fighting the economic identities that elements within the music industry unilaterally assigned to them several years ago, before they were hugely famous and successful. I do not know at what point in the timeline the Dixie Chicks may have retained high-powered music and entertainment lawyer counsel. But if the band was comparably famous and successful several years ago when they signed their deal, they would have likely commanded much more by way of sizable contractual advances, and would presumably thereby have been better secured against the risk of (alleged) back-end royalty payment deprivation by the record label.

It is ironic that within the past several months prior to the suit, the Dixie Chicks were the subject of a TV news magazine show, in which at least two relevant things were said: (1) one band member suggested that the ladies in the band might soon want to leave the music and entertainment business; and (2) one band member boasted on-camera about having procured the “best [recording contract] deal in Nashville”, or words to that effect. As far as the viewer of the TV program could see, no music or entertainment lawyer was physically present on-camera along with the ladies when these statements were made.

The thrust of the news magazine program was that even with “the best deal in Nashville”, (and presumably able music and entertainment lawyer counsel), an internationally-famous musical recording act had to endure a contractual situation wherein their label was accused of holding most of the money. According to press reports, the Dixie Chicks albums “Ready to Run” and “Wide Open Spaces” sold more than 19 million units, resulting in more than US$175 million in revenue. That approaches a quarter of a billion dollars, and would normally seem to justify the retention of music and entertainment lawyer counsel, at least for future deals. And yet the band’s lead singer dolefully attested on camera that she didn’t “even” have US$1 million in the bank herself at the time of the interview. She jokingly added that her label must have remodeled its Nashville offices based upon the success of her band’s music.

“Where is all of this money going?”, asks the artist-side music and entertainment lawyer, particularly. Well, we know or suspect where it is going. It is true that launching and promoting albums, and developing artists, requires major expenditures by the record label, likely in the millions of dollars. The label has to spend money to make money. The label has to spend money on its own music and entertainment lawyers to draft and negotiate the contracts, for that matter. The film studio or television production company will deploy similar rationales when defending “net profit”, “points”, or other back-end payment arrangements. But in the case of a successful recording and touring act, at least some of the incremental money above expenditures is going towards someone’s profit. It is reasonable to assume that the Dixie Chicks sued because they didn’t think they were receiving their fair share of same under the signed contract, and then convinced one or more music and entertainment lawyer litigators to same effect.

What logical deductions can we make from this case study, that apply to other individual musicians and bands – and perhaps to other media and art forms like film, television, and publishing in the context of royalties, “net profits”, and “points”? First, we need to back up, and keep in mind the first thing that music and other entertainment lawyers learn in practice. There are two principal ways for an artist to get paid for services under a contract: (1) “fixed compensation”, and (2) “contingent compensation”. Royalties are “contingent compensation”, and in the traditional but now fast-evaporating record contract model usually contingent upon either the manufacture or the sale of (non-returned) units. Strictly defined, “contingent” also means that it is possible they will never get paid. In film, television, and other realms, “points”, “back-end”, and “net profits” are all terms suggestive of forms of contingent compensation in a contract. One of my law professors back in the 1980’s was a well-known practicing entertainment lawyer with a music, film, and television practice, and much of our classroom workshops were comprised of haggling over proposed net profit definitions in draft contracts. The song remains the same today, in large part.

Music royalty calculations and film and TV “net profit” or back-end “points” definitions often take many pages of contract text to define - as a music, film, or entertainment lawyer will tell you. In defense of the companies, this verbosity is not always simply a product of the labels and studios and their entertainment lawyers so conspiring. Rather, the income streams in the music and film and TV businesses are truly hydra-headed and fairly sophisticated, and take some care and patience to define. As an entertainment lawyer I realize that this is all scant consolation to a screenwriter working through a studio’s or network’s 50-page written contract definition of “net profits” - or, in the music context, a recording artist immersed in arcane label record contract text purporting to delineate methods of royalty computation. Yet the complexity of calculating contingent compensation is a reality of the industry to which the film net profit or music royalty definition relates.

However, make no mistake about it. Accepting any form of contingent compensation, be it net profits, “points”, music royalties or otherwise, is tantamount to accepting someone else’s “trickle-down”, as any artist-side music and entertainment lawyer will argue. That is, the artist deputizes the company to collect the artist’s money, hold it (presumably) in trust, and then remit it in installments to the artist over time on a deferred basis. Do most people even do that with their own family members? As the music and entertainment lawyer will attest from observing others, and human nature and greed being powerful motivators that they are - the company will often thereupon pay the musical or other artist when it feels like it, and how much it feels like it, sometimes no matter what the contract says. And company “deductions” from the gross payment stream to arrive at “net” or “royalties”, can become extremely creative to say the least. Music and other entertainment industry audit contract disputes often revolve around the acceptability and fairness of such “deductions” from “net profits” or “points”, as fought and argued between entertainment lawyers on either side.

There are contractual ways for musical and other artists to even the proverbial scales of justice regarding their royalties, “net profits”, “points”, or other form of contingent compensation - typically best deployed through the artist’s entertainment lawyer. The most familiar method is the deployment of contractual “accounting” and “audit” clauses or provisions. The music or other artist can endeavor to contractually require the company to remit detailed written accountings of all revenues collected, and (carefully-circumscribed) deductions taken therefrom, on a regular basis. The clauses can be drafted by the artist’s entertainment lawyer. Accordingly, the music artist can also endeavor to reserve the contractual right to audit the books and records of the record company to ensure correct remittance of royalties. In the professional entertainment industry context, audits like this take place all the time, thus ensuring a livelihood for many entertainment industry accountants, entertainment lawyers, and others. It has been reported that wholly two-thirds of all entertainment industry audits result in findings of underpayments. Usually thereafter, the parties reach an economic settlement and move on with their lives. Sometimes, they don’t, and they litigate using music or entertainment lawyers instead. And as indicated above, the majority of litigations themselves settle before going to trial.

And there is hope. Industry custom, and film, music, and entertainment lawyer practice, does often contemplate that recording and other artists may also be paid on a “fixed” as well as on a “contingent” basis. In theory, the contractually-specified recording “advance” represents a fixed up-front payment to the music artist. But many - uh - “creative” record label forms transform the advance into a contingent payment as well, at least in part - this is sometimes referred to as the “recording fund” concept. Film producer compensation may be manipulated by the studio in similar fashion, by payment into a budget as opposed to payment directly to a producer’s bank account. For example, if the musical artist receives a US$300,000 “advance” under the contract, but must himself or herself direct-pay for the first album’s recording expenses out of his or her “own” pocket, then it would behoove the artist not to blow all US$300,000 on one weekend at Monte Carlo. In other words, the bulk of that US$300,000 may not in fact be a fixed payment to the artist, but instead may need to be applied to things like studio time and fees for session musicians. There are many artists out there who briefly thought they were rich for this reason, until the record contract was actually read and reviewed with their music and entertainment lawyer. Similarly, maybe the film producer should not write a check for that Lamborghini just yet, either.

What independent and unsigned artists will discover with or without a music or entertainment lawyer, particularly those music artists with talent, is that there may be plenty of folks along the road who will be willing to bargain for their exclusive recording services, promising no money in advance, but some fuzzy and inchoate “points” later on – with or without waving a proposed contract in front of the artist. This phenomenon is usually exactly what it sounds like - Wimpy’s “I will gladly pay you Tuesday for a hamburger today”. Would-be entertainment company impresarios try to play actors and writers like this, all the time, too.

Sure, the music company and its entertainment lawyer may have a valid point that the artist should be required to share in some of the down-side risk that the recorded finished product will not sell. But by that analysis, the artist-side entertainment lawyer must also conclude that the musical artist should be paid some fixed compensation or “earnest money” up-front, and then some additional contingent compensation later should the project succeed. Otherwise, what assurance does the artist have that this company is truly serious, committed to the music project, and acting in good faith? And arguably, the up-front fixed payment to the artist should be at least sufficient to enable the artist to retain music and entertainment lawyer counsel to draft and negotiate an agreement clearly specifying how the back-end contingent compensation should be paid, and what the artist’s accounting and audit rights should be. The same rationale applies for back-end “net profits” or “points” deals in the film and television realms. The up-front payment at minimum should be the glue that cements the contract.

It is astounding, however, how many artists, typically without music or entertainment lawyer counsel, will agree to be paid for their hard work and their music or other work-product by “points” or “net profits” or other “back-end” alone, perhaps commemorated with writing on the back of a cocktail napkin, or even (gasp) on a handshake alone. Why are these artists selling themselves so short? Perhaps because they are dying for their first big break, and perhaps because they do not have sufficient confidence in their abilities such that they believe that another valuable opportunity will come along. So they don’t enlist the help of a music or entertainment lawyer, and often sign bad contracts or otherwise agree to bad deals.

But the point is, there should be some minimum standard of decency, perhaps along the lines of a well-known California case on point, Foxx v. Williams, and a California statute on point, Civil Code Section 3423:

http://codes.lp.findlaw.com/cacode/CIV/5/d4/1/3/3/s3423

http://scholar.google.com/scholar_case?case=7532225346992492111&hl=en&as_sdt=2&as_vis=1&oi=scholarr

Some deals are simply not worth an artist’s making. Some contracts are not worth signing, and perhaps shouldn’t even be allowed to be signed. Even a Santa Monica tenant desperate for a beachfront apartment should not move into a condemned premises where the floor is in danger of collapsing. And in that real estate situation, the local government - through the building code or equivalent - serves as “watchdog”, and prevents those tenants from striking those bad lease deals even if the tenant otherwise wants to do so. However, there is typically no governmental or other “watchdog” that prevents a music artist from entering into a bad recording contract, only perhaps case law and statutes that can be invoked only if the question is ever later litigated – and additionally perhaps, only an artist-side music and entertainment lawyer, if ever enlisted for the situation. Rather, as a practical matter, in the recording agreement context, the “watchdog” needs to be prospective and internalized. So too must the watchdog be internalized in every artist, in the film, television, and other industries and art forms. The music or other artist can only look to his or her common sense, and hopefully in some cases the artist’s music or entertainment lawyer’s experience and judgment - and this assessment must be made before signature of any contract.

In any case, the following is for certain. If a proposed music recording agreement with royalty covenants as exchanged between the music and entertainment lawyers does not contain these 3 components:

(A) an up-front advance “fixed compensation” payment to the music artist, (if only to show the company’s good faith, but sufficient enough that the artist will have been happy to have done the deal even if no back-end compensation is ever later collected by the artist); and

(B) an accounting clause; and

then, serious doubts should be raised as to whether the music artist should indeed look elsewhere for other career opportunities. At minimum, the proposed deal, as the Dixie Chicks might say, needs fixin’.

And the music artist should take heart, I suppose. Getting the “back-end payment”, “net profits”, or “points” bum’s contract rush from a company happens to music artists and other types of artists in all media and sectors, at all calibers and levels of experience and success, whether or not they are represented at the time by a music or entertainment lawyer. No matter how commercially-successful a musician becomes, there may always be doubts as to whether he or she is being royaltied or otherwise paid correctly – and sometimes it takes the music and entertainment lawyer litigators and the court system to scrutinize the contract to find out.

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My music and film law practice as an entertainment lawyer includes the drafting, editing, negotiation, and closure of all contractual matters relating to film, music, television, publishing, Internet, and all other media and art forms. If you have questions about legal issues which affect your career, and require representation, please contact me:

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Personal Service Contracts: Written By New York Entertainment Attorney And Film And Music Lawyer John J. Tormey III, Esq.

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Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney

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Personal Service Contracts: Written By New York Entertainment Attorney And Film And Music Lawyer John J. Tormey III, Esq.

1. What Items Should Appear In A Personal Services Contract?

An entertainment attorney will opine that personal services agreements in New York, California or elsewhere can be fairly complex in regard to the issues that they present - yes, even if the total compensation payable under the personal service contract is not too large. It would be beyond the scope of this article to set forth an exhaustive list of issues for the entertainment attorney to spot in any New York or other personal services contract. But some of the key issues for talent, in a personal services agreement in the entertainment world, are considered to be:

A. Compensation: The first talent-side entertainment attorney contract concern.

How much will one be paid, and how will one be paid, under the personal services contract?

B. Credit. The second talent-side entertainment attorney contract concern.

What credit, if any, will one get for one’s work, and in what manner, pursuant to the personal services agreement?

C. Term. The third talent-side entertainment attorney contract concern.

This is a critical point: For how long will one be required to render services under the personal services contract?

D. Territory. The fourth talent-side entertainment attorney contract concern.

In what country/city/state/territory is one required to render services pursuant to the personal services agreement?

E. Media. The fifth talent-side entertainment attorney contract concern.

In what specific media can, and can’t, one’s work product be used according to the personal services contract?

F. (Non)Exclusivity. The sixth talent-side entertainment attorney contract concern.

Is the artist exclusive to the hiring party; or alternatively, can the artist work elsewhere and/or in other ways during the Term of the personal services agreement?

G. Worker Status. The seventh talent-side entertainment attorney contract concern.

Is the worker an employee, or an independent contractor, under the personal services contract (choose only one answer!)

There are actually quite a number of other issues for an entertainment attorney, or the intended signatory client, to consider, in the context of personal services contracts, in addition. The above list will certainly start the contractual dialogue or respond to the contractual dialogue of any prospective hiring party, however.

2. What Should Be Avoided In A Personal Services Contract?

Again, it would be beyond the scope of this article to set forth an exhaustive list of all contractual traps for the entertainment attorney to avoid in personal service agreements, as a matter of New York law or otherwise. Indeed, there are probably at least as many contractual traps, as there are New York and Los Angeles in-house entertainment lawyers working at these hiring corporations! (and I say this with all due respect to my friends who work in-house, of course). But some of the more colossal mistakes that an artist could make in a personal service contract, typically without first consulting an entertainment attorney, might be as follows:

A. Back-End: Taking the entirety of one’s compensation under the personal services agreement, as contingent or “back-end”. This Hollywood hustle is just as familiar a phenomenon in New York City’s TriBeCa and elsewhere, as well. The fact of the matter is, if the artist is a professional, or if the artist otherwise values his or her own skills and time, then the artist’s work product is valuable and should be recognized as such under the contract. The “buyer” of services and work product under the personal services contract should be required to put at least some earnest money on the barrel, first – whether that barrel be located in New York or anywhere else. One of the entertainment attorney’s functions should be to make this happen. And, the artist should not be expected to commence services under the personal services agreement until those numbers first show up in the artist’s bank account, whatever the numbers are negotiated to be, by and between the entertainment attorneys on either side of the contract.

B. Vagueness: Leaving the Term, Territory, Media and Exclusivity provisions vague in the personal services contract. Artists have found their careers paralyzed for huge amounts of time, due to contractual mistakes like this. No non-lawyer should try to write or edit these personal services agreement clauses on his or her own, and the drafter and/or editor of the contract really should be an entertainment attorney solely representing the artist. No one should blindly sign on to these contractual clauses as offered, particularly if they are vague. (In other words, don’t try this at home. Get professional help from an entertainment attorney, period). For example, if the artist only intended to bind himself or herself to a manager exclusively for New York work alone, imagine her surprise when the manager seeks a commission for a Los Angeles gig that the artist booked on the artist’s own.

C. Forever: Failing to limit the Term of the personal services contract to a reasonable and precise period of time. “Perpetuity”, if ever agreed to, is guaranteed to become one’s own private Hell – sort of like a New York City subway tunnel at 3:00 AM, but worse. The contractual Hell would be forever, and after all, the entertainment attorney may not live to see the artist through a period of time that long. Leaving the Term quantitatively vague in a personal services agreement is just about as bad a mistake as calling it “Perpetuity”, and an entertainment lawyer should prevent an artist from making this contractual mistake. Life is too short and valuable to make open-ended and blank-check commitments to people – in personal services contracts, or otherwise.

3. How Can A New York Entertainment Attorney Tell If A Personal Services Contract Is One-Sided In The Hiring Party’s Favor?

The answer is, if the hiring party furnished the personal services agreement to an artist, then the contract is one-sided in the hiring party’s favor! That was a rhetorical question. And the ability to answer it is not really limited to New York entertainment lawyers alone.

The hiring party is under no obligation to protect the artist’s interests in a legal document, personal services contract or otherwise. If upon receipt of the intended contractual document, you snooze, then you lose. One’s entertainment attorney is one’s hope for re-calibrating the scales of justice evenly, in this type of proposed contract and in this type of fact-pattern. The New York courts might even look to whether both sides of the contract were represented by counsel at the time of signing, before upholding the contract or any of its specific clauses. Retaining entertainment lawyer counsel could have multiple and long-term benefits throughout the life of the contract.

And many entertainment lawyers can speak to this phenomenon from their own “personal” experience. Many of us entertainment attorneys, in New York and elsewhere, have drafted, edited, negotiated, and reviewed hundreds or even thousands of contracts. Many of these were personal service agreements. If polled, few New York or other entertainment lawyers can remember even one personal service contract first offered by a hiring party to any talent clients, that was ever fair.

There is a reason why many New York and other entertainment attorneys and others in the entertainment industry refer to the first-offered personal service agreement form, as the (euphemism) “F.U. Form”. Once an artist retains entertainment lawyer counsel to represent the artist on the personal services contract, one of that entertainment attorney’s first functions is:

A. To get the hiring party to cough up a real personal services contract form in lieu of the “F.U. Form”; if not

B. Take over the drafting of the personal services agreement, entirely.

And yes, signing any entertainment industry proposed personal services agreement, either: (i) on-the-spot, or (ii) in the version exactly as first offered for signature with no contractual edits made, without an entertainment attorney advising you, often turns out to be a mistake.

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My New York entertainment law practice includes the drafting, editing, negotiation, and closure of personal service agreements as well as all other contracts and entertainment transactional and advisory matters in the fields of film, music, television, publishing, Internet, and all other media and art forms. If you have questions about legal issues which affect your career, and require representation, please contact me:

Law Office of John J. Tormey III, Esq.

John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
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(212) 410-2380 (fax)
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Monday, December 31, 2012

This Article Is Brought To You By The Letter Blank: Written By New York Entertainment Lawyer And Trademark Attorney John J. Tormey III, Esq.

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Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney

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This Article Is Brought To You By The Letter Blank: Written By New York Entertainment Lawyer And Trademark Attorney John J. Tormey III, Esq.

Most of the American public including most all entertainment lawyers, heard about one of Oprah Winfrey’s well-publicized litigations a number of years ago. My understanding was that she was sued in Texas by a commercial cattle-oriented conglomerate. The plaintiffs apparently claimed that Oprah had inaccurately and unfairly maligned the culinary safety of cow meat, during one of her television programs. The Texas case seemed vaguely surreal and comic, even from the perspective of an entertainment lawyer - sort of like an overly-imaginative law school exam question. But next we must go from the sublime to the ridiculous. This next case was an entertainment lawyer and trademark lawyer’s delight. Talk about the eradication of your sacred cows. The local press in New York reported that a German “fetish magazine” named “O” sued one of Oprah’s companies and her publisher, over the sale of Oprah’s magazine bearing the equally-expansive title of “O”. Query if it was really a service mark dispute as opposed to a trademark dispute.

Perhaps even more befuddling, from the entertainment lawyer or publishing lawyer perspective or otherwise, the German “fetish” magazine somehow derived its own title from the erotic novel “Story of O” - serving as even more of a reminder that there is truly nothing new under the sun. And if this were not bizarre enough, the local press reported that Oprah’s company and publisher were prepared to change the name of her magazine to “O, The Oprah Magazine”, in an apparent attempt to assuage the seething service mark or trademark plaintiff and make the distinction between the two magazines more apparent.

Coincidentally, this lawsuit received even more attention from trademark lawyers, entertainment lawyers, and others, than usual, since Lions Gate was slated to release a film called “O” around the same time the suit materialized. I understand the Lions Gate film was somehow loosely based upon Shakespeare’s “Othello”. The Bard himself referred to the Globe Theatre as “this wooden ‘O’“. Maybe if we find Shakespeare’s heirs - perhaps arguably incarnate in the Bacon Brothers - we can thereby locate the real plaintiff who has something to complain about?

But come on. All kidding aside, could this trademark (or service mark) lawsuit really be happening? Yes. Yes it could. But maybe it shouldn’t be allowed to happen. The minds of reasonable trademark lawyers, entertainment lawyers, and others, may differ.

Let’s back up a step. Generally speaking, as entertainment lawyers or trademark lawyers will advise, one acquires trademark rights or service mark rights under U.S. law, by consistently using a trademark or service mark in connection with goods or services, and/or by registering the trademark or service mark with one or more appropriate governmental authorities.

Most people and businesses pick lousy names from a trademark or service mark perspective, and most people pick those names without the assistance of an entertainment lawyer or a trademark lawyer. The majority of marks go unregistered, and the majority of trademarks or service marks are never properly searched and cleared by a trademark lawyer, entertainment lawyer, or anyone else before use. Again, there is very little new under the sun, and as most all trademark and entertainment lawyers will attest, most word-paths have been tread upon by someone else previously. Then again, searching and registering a trademark or service mark, with or even without a trademark lawyer or entertainment lawyer, is not without cost. So, many cost-constrained start-up businesses elect to just “wing it” and dispense with the search until they can afford to “get around to it”. And surprisingly, sometimes even major-league companies who can otherwise afford to so it, dispense with the trademark or service mark search, dispense with the services of the trademark lawyer or entertainment lawyer, and just go ahead and use the proposed name. Ironically, this type of decision keeps trademark and entertainment lawyer litigators who work the back-end of these fact patterns, in business.

Trademark lawyers and entertainment lawyers may sometimes advise their clients to select multiple-word names rather than one-word names - as rock-band-name trademarks or service marks, for example - since the statistical chances of infringing some other band’s name and trademark or service mark are likely thereby somewhat reduced. Most artists, on the other hand, are solely concerned about the aesthetics of the band name, and if a one-word band name sounds right to them, they will use it and darn the torpedoes. This type of decision can also keep trademark and entertainment lawyer litigators who work the back-end of these fact patterns, in business.

I have admittedly not yet trademark-searched any of the following band names. But as a trademark and entertainment lawyer, a proposed one-word band name like “Blur”, at first blush, would trouble me a bit more than the two-word “Def Leppard”, from a trademark or service mark perspective - since, without knowing anything else about the underlying facts, I would assume that the statistical chances were somewhat higher that another band might be named (or might have been recently named) “Blur”. When a trademark lawyer or entertainment lawyer performs a search on a trademark or service mark or proposed mark, these kinds of concerns and historical analyses come into play.

Trademark lawyers and entertainment lawyers may also sometimes advise their clients to try to use more incongruous word combinations as band-name trademarks or service marks, rather than predictable word combinations. By this rationale, “Squirrel Nut Zippers” (the first time, for the candy, that is!), or “Stone Temple Pilots” start to look pretty good as far as their trademark or service mark prospects, to say nothing I suppose about “Orchestral Manoeuvres In The Dark”. After all, what are the odds, the trademark lawyer queries, that the full name “Orchestral Manoeuvres In The Dark” name was used as a trademark or service mark by any other pop or rock band prior to or contemporaneously with 1986’s “If You Leave”? Then again, apart from entertainment lawyer legal concerns, the band and its handlers may have had trouble fitting the full name onto a record jacket sleeve, and may also have had trouble convincing record label A&R executives that the choice of name should be supported.

One must understand, therefore, that the prospect of trying to protect, let alone enforce and prevent others from using - a one-letter trademark or service mark, is the trademark lawyer’s or entertainment lawyer’s equivalent to fingernails scraping on a chalkboard. If a client walks into the office of a trademark lawyer or entertainment lawyer and says “Hi. I’d like to protect, for my own exclusive use, the letter ‘W’“ - well, then absent some extreme fact pattern perhaps relating to a powerful Texas family, that lawyer can expect at least a long and tough road ahead - and perhaps a few broadsides of ridicule from the bench and other trademark lawyers and entertainment lawyers at the bar as well. They might think that the so-subscribing lawyer took Sesame Street’s commercial endorsement announcement “This program was brought to you by the letter ‘W’”, a little too seriously when younger.

Most Americans conceive of “monopolies” as something anti-competitive, unfair to the consumer, and ultimately evil - especially given publicity in recent years accorded to the Microsoft case. But what is interesting about copyrights and trademarks and service marks, as a trademark lawyer or entertainment lawyer will tell you, is that they are in fact legal monopolies protected by federal statute. A property right is, essentially, the right to exclude others from using that same property. That is conceptually quite similar to a monopoly. If I own my house, I can keep you off my land with a fence, and the law will back me up on that. If a company owns a registered trademark in “Chock Full o’ Nuts”, for example, then, through the efforts of its trademark lawyer or entertainment lawyer counsel or otherwise, that company owns the right to exclude others from using the same name in connection with the sale of coffee, and perhaps related goods and services as well.

So here is the trademark lawyer entertainment lawyer philosopher question. Haven’t we as a society gone too far, when we even entertain the prospect of a company, or a celebrity, laying claim to a single LETTER of the ALPHABET as a service mark or trademark? Indeed, should any prior claimant be able to use the services if a trademark lawyer or entertainment lawyer to legally monopolize the use of a letter of the alphabet, in connection with ANY kind of goods or services, magazine or otherwise? Should they and their trademark lawyers and entertainment lawyers even be allowed into court with that kind of argument?

Are all individual Arabic numerals also now in play for trademark lawyers and entertainment lawyers? We might as well allow some corporate behemoth to pull the character of Santa Claus out of the public domain, into the realm of copyright-protection, and charge a royalty whenever the fat man’s name or image is evoked. As for trademark versus service mark, does Mr. Claus provide goods or a service, when you get right down to it? And what about prior sources? Do the publishers of the first edition of Webster’s dictionary, or their successors, now have a valid trademark claim to assert through their trademark lawyer or entertainment lawyer litigators, against Oprah and the German magazine, for the use of “their” letter of the alphabet as a service mark or trademark?

Harkening back to the Oprah cattle litigation, some cows are sacred. Some things should simply stay in the public domain. Section 105 of the U.S. Copyright Act, for example, excludes works “of the United States Government” from copyright protection. Shouldn’t letters of the alphabet be treated the same way, as non-service mark non-trademark public commodities exempt from any monopolistic endeavors, upon instruction to all trademark lawyers and entertainment lawyers who might try to argue otherwise? There may well already be case law holding unitary alphabet letters to be disqualified from trademark and service mark protection under certain circumstances. The U.S. Patent and Trademark Office likely has trademark application and registration procedures, possibly reading to similar effect. If so, why not simply codify that common-sense principle in all applicable trademark statutes and other laws, as a de facto and de jure standing instruction to all trademark lawyers and entertainment lawyers and their clients? Among other things, a decisive action like this one could eliminate, or at least mandate a shorter life-span for, court-clogging trademark and service mark lawsuits like the “O” story.

And what’s next? Will the adjudicated winner of the O litigation also be awarded a legally-sanctioned monopoly as trademark or service mark over the corresponding three dashes in “- - -”; that is, in the International Morse Code symbol for the letter “O”? Will that be some other trademark lawyer’s or entertainment lawyer’s next argument? Or should that control instead now be awarded to the heirs of Morse, wherever they may be? And what about our National Anthem? Am I at risk of being enjoined by another trademark lawyer or entertainment lawyer from singing “O(h) say can you see...” at the start of baseball games at Shea Stadium – I mean, CitiField? And what about Tic-Tac-Toe? Must there now be a Congressional mandate that “X” must always win, and must always occupy all 9 cells on the grid, so as not to “infringe” the trademark or service mark rights of the clients of any other trademark lawyers or entertainment lawyers? And if so, what about the fate of Whoopi Goldberg and Hollywood Squares in syndication?

A number of entertainers use single-word names, and we as a society tolerate that – as do, apparently, the trademark lawyers and entertainment lawyers that represent and enable the talent. We tolerate the Gilbert Gottfried “One-Named Boy” routine moreso if the entertainer has the talent to back it up: “Elvis”. “Sting”. Now, “Prince” is, of course, a variation on the theme, an entertainer who at one point dispensed with his chosen one-word name in favor of an arcane symbol not found in the American alphabet – with or without his trademark lawyer’s or entertainment lawyer’s imprimatur. The general point here is that, Prince aside, the trademark lawyer and entertainment lawyer will advise the entertainer that he or she may be able to build up some trademark or service mark protection in his or her continuous and uninterrupted use of the [a]rtist’s one-word name, particularly if that entertainer is extremely well-known.

But some of us trademark and entertainment lawyers and others may feel that claiming one of the 26 letters of the alphabet as your own, takes its own special brand of... uh... chutzpah. Basketball’s Oscar Robertson was known as “The Big O”, probably because fans and the press tagged him with that moniker – probably not because his trademark lawyer or entertainment lawyer told him to use it - and probably not because Oscar adopted it for himself. Oscar Robertson may not have been as well-liked a guy, if instead he himself had arrogated “The Big O” nickname for his own use! And speaking of Oscar, asks the trademark and entertainment lawyer, how ‘come he hasn’t appeared yet in this lawsuit?

In similar vein, some trademark lawyers, entertainment lawyers, and others may feel that Oprah should have been satisfied to call her magazine “Oprah” rather than, simply, “O”. It is unlikely that Oprah’s decision as to how to name the magazine was forced upon her by her colleagues – entertainment lawyers or otherwise. In other words, a different P.R. decision may have had incidental legal benefit, too.

Sure, there is precedent in the entertainment field, as trademark and entertainment lawyers are aware, for trademark or service mark use predicated upon a single letter of the alphabet. The musical group “M” had a number-one hit with “Pop Muzik” in 1979, and that was kind of cute - but the group seemed to disappear from the music scene before anyone even began to consider the trademark or service mark implications of their continued use of their band name. Perhaps the group’s trademark lawyer or entertainment lawyer will read this article and write to this website to weigh-in.

The television company “E!” of Chelsea Handler and Talk Soup renown has apparently been successful in establishing a brand name for itself, presumably with trademark lawyer and entertainment lawyer counsel and assistance, accepting the inherent challenge in generating trademark and service mark rights in a one-letter name. But the E! Network’s use of the exclamation point, and their occasional use of the linked phrase “entertainment network”, arguably properly distinguishes them from the alphabet-usurping pack. The Motion Picture Association of America (MPAA), along with the help of its trademark lawyer counsel, lays claim to its single-letter-ratings as trademarks or service marks in some fashion - that is, currently, “G”, and “R”. But then again, I suspect that the MPAA would carefully refrain from threatening another company’s use of the letter “G” or “R”, unless that use was made in the context of ratings or otherwise in connection with motion pictures or filmed entertainment.

The point is, there is something disturbing about this O lawsuit filed in the district court in Manhattan, from the perspective of an entertainment lawyer and trademark lawyer, and perhaps to others as well. What if a schoolteacher reads about this lawsuit, and now tries to find a trademark lawyer lay personal service mark claim to the letter grades “A” through “F” as used on student-graded papers? What if that same teacher starts invoicing all other teachers who grade papers in the U.S., demanding trademark royalty payments? And speaking of damage to the world of education, what will Grover, Elmo, and the gang at Sesame Street do, when they can no longer boast that a particular program is “brought to you by the letter ‘W’”, at least not without their entertainment lawyer or trademark lawyer counsel present on set? Worse yet, will that entertainment lawyer or trademark lawyer be required to wear an over-the-head costume or be a muppeteer to blend-in on the set when doing so? The consternation is enough to press the ghost of O. Henry and his trademark lawyer back into active service - the only question being, if O. Henry rejoins the non-ethereal world and joins the lawsuit, will he join as party-plaintiff or party-defendant on the advice of counsel? And, will O. Henry’s apparently-prescient use of the period after his “O” render him impervious to trademark or service mark liability?

But seriously folks, in defense of Oprah and the trademark and entertainment lawyers that love and enable her, it is apparently not her or her entertainment or trademark counsel or entities that initiated the aggressive attempts to exclude others from use of the letter “O”. Rather, according to the news reports, it was the German “kinky fashion” magazine promoting leather and garters that decided to attack Oprah’s company in the context of the New York court, and the magazine then sought out a trademark lawyer for that purpose. And in response, Oprah and her affiliates, presumably on trademark lawyer or entertainment lawyer advice, apparently decided to expand her magazine title, to make the bright-line distinction between the two magazines more apparent to all, including the consumers. Maybe as a matter of reciprocal international courtesy, and in an effort to keep this dispute from wasting further judicial resources or using up more trademark lawyer or entertainment lawyer time, the leather and garter crew should agree to change their magazine’s name from “O” to “Ouch!” But query if they thereby would risk receiving an adverse trademark or service mark claim from the ‘E!’ network based upon the use of ‘E!’s exclamation point.

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My trademark law practice as a publishing and entertainment attorney includes all fields of entertainment and media including music, film, publishing, television, Internet, and all other media and art forms – and trademark, service mark, and copyright work. If you have questions about legal issues which affect your career, and require representation, please contact me:

Law Office of John J. Tormey III, Esq.

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