Net Neutrality Rules Upheld

The Net Neutrality Rules have been upheld by the U.S. Court of Appeals: https://www.yahoo.com/news/u-appeals-court-rejects-challenge-obama-net-neutrality-142305055–finance.html?ref=gs.  It appears that everyone on the Internet is going to get to be treated the same.

Idea Submission and Avatar: James Cameron and Lightstorm Prevail

There are several lessons to be learned from this idea submission and breach of contract case, where the plaintiff contends that his idea was misappropriated by James Cameron for the film Avatar, among which are the proof that one must have demonstrated in order to claim a similarity between the alleged infringing work and one’s own idea, and the questions of timing. An interesting analysis can be found here: http://www.loeb.com/publications-ipentertainmentcaselawupdates-20160325-rydervlightstormentertainmentincetal.

The unpublished opinion of the court can be found here: https://scholar.google.com/scholar_case?case=15675251615603331785&hl=en&as_sdt=6&as_vis=1&oi=scholarr

Are the Turtles Certifiable? Music Industry To Litigate Pre-1972 Public Performance Right

There’s an interesting case percolating in the Court of Appeals dealing with the Turtles and Sirius XM radio. Here is an excerpt from “Copyright Litigation Blog” by Ray Dowd (the entire blog post can be found here: http://archive.feedblitz.com/445362/~5153291/25405111/1462521c88182b58dcf7fc1a6dd57035):
 
Are The Turtles Certifiable? Music Industry To Litigate Pre-1972 Public Performance Right @ New York Court of Appeals In Albany.
 
On April 13, 2016, the United States Court of Appeals for the Second Circuit “certified” the question of whether New York common law provides a right of public performance to owners of pre-1972 sound recordings to the New York Court of Appeals, which is New York State’s highest appellate court.
The “Second Circuit” is a federal court, just below the U.S. Supreme Court, that has appellate jurisdiction over all of the U.S. District Courts in Connecticut, New York and Vermont. The “certification” came about because the band the Turtles complained that Sirius FM radio was copying, caching, and broadcasting their pre-1972 sound recordings.
 
* * *
 
“Certification” means that the Second Circuit asks the New York Court of Appeals to decide an important question of New York law.
Here is what the Second Circuit considers in determining whether to “certify” the question to the New York Court of Appeals:
(1) whether the New York Court of Appeals has addressed the issue and, if not, whether the decisions of other New York courts permit us to predict how the Court of Appeals would resolve it;
(2) whether the question is of importance to the state and may require value judgments and public policy choices; and
(3) whether the certified question is determinative of a claim before us.
 
Here is Judge Guido Calabresi’s explanation of the issue certified:
In 1971, Congress amended the Copyright Act to grant limited copyright protection to sound recordings fixed on or after February 15, 1972, while expressly preserving state-law property rights in sound recordings fixed before that date. See 17 U.S.C. § 301(c). Later, Congress created an exclusive performance right in post-1972 sound recordings performed by digital audio transmission. See 17 U.S.C. § 106(6). Performances of post-1972 sound recordings transmitted by other means, such as AM/FM radio, still do not enjoy federal copyright protection. Because Appellee’s recordings were fixed before February 15, 1972, they are protected, if at all, by state copyright law. While New York provides no statutory protection to owners of pre-1972 sound recordings, New York common law does provide certain rights to copyright holders in these recordings. See Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 563 (2005) (Naxos II). As a result, the issue before us is whether New York common law affords copyright holders the right to control the performance of sound recordings as part of their copyright ownership.
 
Judge Calabresi has left the “policy choice” as to whether to recognize the right to the New York Court of Appeals. Many law professors and folks in the broadcasting industry have filed amicus briefs, guaranteeing that the Amtrak to Albany will be booked on argument day.

Fashion and Copyright: Will the U.S. Supreme Court (SCOTUS) Address the Dress?

Here is a link to the Copyright Blog about the intersection of fashion designs, copyright, protection of useful articles, design patents for the ornamental design of a functional item, and the Supreme Court of the United States (SCOTUS): http://copyrightlitigation.blogspot.com/.  Enjoy.

The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors

For guidance on classifying employees and independent contractors, please check out the U.S. Department of Labor’s Administrative Interpretation Number 2015-1: SUBJECT: The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors, found at http://www.dol.gov/…/workers/Misclassification/AI-2015_1.pdf.

“Documenting The Deal: How Quality Control and Candor Can Improve Boardroom Decision-Making and Reduce The Litigation Target Zone”

Here is a link to an excellent paper that all corporate lawyers (and board members) should download, read, and absorb, by the Honorable Leo E. Strine, Jr., Chief Justice of the Delaware Supreme Court: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2514520.

Doing Business in California: The Franchise Tax Board Definition

Many people ask about incorporating or forming an LLC in a state other than California. California law changed a few years back, and made it more clear what it means to be “DOING BUSINESS IN CALIFORNIA.” The California Franchise Tax Board (FTB) has provided guidance on the subject, which can be found at . The following is a brief summary:

“For taxable years beginning on or after 1/1/2011, a taxpayer is doing business in California if it actively engages in any transaction for the purpose of financial or pecuniary gain or profit in California or if any of the following conditions are satisfied:”
 The taxpayer is organized or commercially domiciled in California.
 Sales of the taxpayer in California, whether by the taxpayer or its agents or independent contractors, exceed an indexed amount, which in 2013 was $518,162, or 25 percent of the taxpayer’s total sales.
 Real and tangible personal property of the taxpayer in California exceed an indexed amount, which in 2013 was the lesser of $51,816 or 25 percent of the taxpayer’s total real and tangible personal property.
 The amount paid in California by the taxpayer for compensation exceeds an indexed amount, which in 2013 was the lesser of $51,816 or 25 percent of the total compensation paid by the taxpayer.

All of the above items include the taxpayer’s pro rata or distributive share of pass-through entities (partnerships, an LLC treated as a partnership, or an “S” corporation). Indexed amounts for 2014 are not yet available from the FTB.

The law affects out-of-state corporations, LLCs, and pass-through entities (partnerships, S corporations, LLCs treated as partnership) and their partners/shareholders/members that have property, payroll, or sales in this state. An out-of-state taxpayer that is considered to be doing business in California will need to file the appropriate tax return and pay the appropriate tax and fees.

Keep in mind that there are two basic tests. An out-of-state taxpayer that has less than the threshold amounts of property, payroll, and sales in California may still be considered doing business in this state if the taxpayer “actively engages in any transaction for the purpose of financial or pecuniary gain or profit in California.”

The FTB guidance contains several examples, some of which include the application of exemptions to the rules. This is an important change in the law, of which all businesses formed or operating in other states should be aware.

Please let us know if we can be of assistance in this or any other business-related legal matters. Matthew I. Berger Law Group, A Professional Corporation: (805) 456-1200.