WEBVTT 00:00:02.257 --> 00:00:04.397 Kids entertainment law update 00:00:04.639 --> 00:00:11.959 Episode 167 for it's May 1 2024. Here we go. 00:00:17.402 --> 00:00:24.882 Hello, everybody and welcome back to another episode of Entertainment Law update from Los Angeles, California. I am Gordon Firemark, 00:00:25.497 --> 00:00:28.437 And from the Dallas Fort Worth Metroplex I'm camera bin it. 00:00:28.531 --> 00:00:43.231 And this is our podcast about entertainment law where each month we pull together a round up of legal and business news stories and share our opinions and commentary and analysis and chit chat and and try to have a good time with it all 00:00:43.393 --> 00:00:51.673 And here we are. How are you today, Tamma? Oh yeah, I am doing great. I'm just giving the heads up that my allergies are like, 00:00:52.198 --> 00:00:53.698 Wild and crazy. So, 00:00:55.330 --> 00:01:09.070 I'm drugged up maybe that's what I'm saying. Time to party. For some reason my screen goes blank. You know, I don't know. Maybe I had to leave the building for my allergies or I'm sneezing. 00:01:09.032 --> 00:01:11.432 That could be. I could. Okay. 00:01:13.601 --> 00:01:21.561 If I disappear. Alright. Well, things here in LA are good too. No, no complaints. The weather is starting a warm up. 00:01:22.786 --> 00:01:29.126 And the insects are starting to show up again and all that kind of fun but everybody's good. So, glad to be here. 00:01:30.529 --> 00:01:36.109 We do not get cicadas here in the in the desert. Okay. Check it. 00:01:36.453 --> 00:01:44.373 But you know, mosquitoes and and crane flies are a thing here, you know, crane flies. These giant, it look like a mosquito but they're about an inch and a half. 00:01:44.573 --> 00:01:56.633 Hey this is not a show about what is it called insect study insects. 00:01:58.273 --> 00:02:07.793 Outside my ears. Yeah. Well, we thank you our listeners for being here with us and tolerating our 00:02:08.087 --> 00:02:09.287 Attempts at chitchat, 00:02:10.603 --> 00:02:24.083 And we'll just tell you about our sponsor for this episode. We are brought to you this episode as many by JD Supra. Hey leading platform and professional services content marketing where they help lawyers turn their expertise into 00:02:24.273 --> 00:02:32.613 Networking opportunities, media visibility, and new business. JD super publishes and distributes blog posts, articles, podcasts, videos, and other thought leadership 00:02:32.942 --> 00:02:35.582 To hundreds of thousands of subscribers on a daily basis. 00:02:35.714 --> 00:02:48.714 Including business leaders in house council media members the C suite and others who haven't need to know interest in legal regulatory and compliance matters JD super clients not only enjoy wide readership of their thought leadership, 00:02:49.236 --> 00:03:01.236 Leadership of their thought leadership and they're also provided with the data and the tools to turn that visibility into marketing and business development success. More information at resources. JD Supra 00:03:01.416 --> 00:03:07.056 Dot com. And we have a busy episode for you today. We are, 00:03:08.267 --> 00:03:15.707 Gonna talk about a couple of big cases and we have a lot on the AI front. So, I'm calling this episode, is it? 00:03:15.883 --> 00:03:19.303 Real or is is alive or is it something else? So. 00:03:20.726 --> 00:03:31.826 Let's just start with some it's it's medium big news I guess you say we talked about it what a year ago when the case broke the top gun maverick situation, 00:03:32.546 --> 00:03:41.846 And there's been a motion for summary judgement granted in favor of Paramount pictures in this case brought by the widow of 00:03:41.917 --> 00:03:46.537 A hood your no the writer of the article top gun back in 1983 00:03:46.851 --> 00:03:55.791 That detailed the experiences of F 14 pilots and their radio intercept officers during their training that Paramount pictures had purchased, 00:03:56.303 --> 00:04:06.323 An option or they bought the rights to that article and then they made the original movie Top Gun that was suggested by 00:04:06.601 --> 00:04:17.981 Article. The original feat film featured fictional characters at the Naval Fighter Weapon School that was depicted in the article by UNA as well. So, 00:04:18.431 --> 00:04:24.671 2018 rolls around and the plaintiffs had sent a notice of termination of the grant of copyright. 00:04:25.740 --> 00:04:35.400 Transfer rights. That was effective January 24 2020. And then the Maverick movie that the sequel to Top Gun was released 00:04:35.832 --> 00:04:48.372 In 2022 or so without giving yonae any credit at all now the top gun maverick movie was set 30 years later after the original top gun where the 00:04:48.516 --> 00:05:00.996 The lead character Maverick was now a test pilot training class of graduates and the court had to grapple with sort of two issues the big one was whether there was copyright infringement and also there was a breach of contract claim 00:05:01.136 --> 00:05:06.876 so on cooperate infringement the really the only dispute was weather or not 00:05:06.886 --> 00:05:13.226 The top gun maverick was had striking similarity or or substantial similarity with 00:05:13.218 --> 00:05:22.758 The original article and the court decided not really they said the article itself was a non fiction work that detailed up how pilot and his, 00:05:23.238 --> 00:05:28.878 radio intercept officer were shot down by their instructor and the cast system and history of the school, 00:05:29.495 --> 00:05:35.915 And the intense nature of the training all of which was depicted in the film but the the original film was a worker fiction which 00:05:35.814 --> 00:05:45.054 With those fictional characters and now the sequel film was also a work of fiction starting with the character of Maverick disobeying orders, getting recommended, and then, 00:05:45.788 --> 00:05:47.528 Having to train a group of graduates. 00:05:48.741 --> 00:06:00.561 The important mission and there was drama about the relationship between Maverick and his former Rios the son who was now unable aviator and ultimately, 00:06:01.074 --> 00:06:09.234 The court looked at it and said look the the school the naval aviator school top gun is a real fighter pilot school and the factual elements 00:06:09.672 --> 00:06:18.132 Embodied in the story are not protected under copyright law and the general plot ideas were not protected as well, 00:06:19.214 --> 00:06:23.594 And then the court moved on to the breach of contract analysis saying, 00:06:24.639 --> 00:06:37.719 There was no bridge of contract because the production occurred after the termination of those motion picture right so there was no longer a contract in force essentially the film was not produced under that assignment of any rights the movie came out 00:06:37.750 --> 00:06:41.830 Following the termination and there is language in the contract that said, 00:06:42.827 --> 00:06:53.987 In the original agreement that made it clear that nothing in that agreement would prevent a party from doing anything that any member of the public could do. So, in theory, a studio like universal a different 00:06:54.116 --> 00:07:03.536 Production company could put out another movie about the top gun naval maybe it are training school and that wouldn't infringe any right so paramount could do the same thing, 00:07:04.117 --> 00:07:12.157 And so summer judgment granted in favor of paramount as yet we haven't seen whether there's an appeal of anything. 00:07:13.723 --> 00:07:16.003 But looks like paramounts off the hook on this one. 00:07:16.315 --> 00:07:25.255 So I thought it was interesting the court talked about that the article back to the 80s was written in a non linear fashion 00:07:25.498 --> 00:07:30.418 From a time perspective. Oh, interesting. Forwards and backwards, different, 00:07:31.727 --> 00:07:46.307 Again about different people and the so the timeline didn't go in a linear fashion but that Maverick top gun isn't a linear fashion and that was one of the things that they yeah obviously the 00:07:46.356 --> 00:07:55.236 Defense argued that distinguished that substantial similarity I I really thought it was 00:07:55.574 --> 00:08:10.034 I guess two thoughts on this these statements about the termination and they're being no contract so evidently the studio is not fighting the copyright grant termination because they determined it probably didn't give them. 00:08:10.833 --> 00:08:18.213 The rights they got out of that article probably weren't helpful anymore. Well, I think at the time, it was 00:08:18.557 --> 00:08:21.257 In in New York. The decision to 00:08:21.393 --> 00:08:35.253 Option the article may have been just sort of keep it out of the hands of everybody else and and sort of way claimed to that name top gun even though that's what the school is called him they may have not needed them even back in the 80s except that it was more expedient to 00:08:35.337 --> 00:08:43.137 Do that to get the rights and and frankly maybe the right thing to do. Hey, we've read your article. We loved it. It inspired us to make this movie, 00:08:43.790 --> 00:08:48.410 Let's make a deal but the sequel is based on the original movie 00:08:48.850 --> 00:08:54.130 Night on his article and I think that's the court came to, 00:08:54.809 --> 00:09:00.329 Yeah. Yeah, I mean, I just, it's, it's interesting because clearly, 00:09:01.012 --> 00:09:12.772 Talking Maverick is a driver of the first movie but what the decision on is that it's not a top gun maverick is not a drive it yes 00:09:12.868 --> 00:09:20.728 I think that's an accurate way. Yeah. Participating. So, so good news for the lovers of the Paramount films and. 00:09:22.398 --> 00:09:28.758 And not so wonderful for the family of your name but I think it's the right decision in this particular instance 00:09:29.189 --> 00:09:32.489 And I believe there's talk that there's a third. 00:09:32.997 --> 00:09:41.097 Oh. Third in the series. Alright. So, we lost Katie. Yeah, I know. I'm too. 00:09:41.765 --> 00:09:52.805 Okay. Well, we mentioned we've got a lot to talk about and we've got a lot on the AI topic today. So, we're going to just jump right into AI and talk about your home state, 00:09:53.554 --> 00:09:57.614 Tennessee and the Elvis act do you want to take this story 00:09:57.924 --> 00:10:06.744 Sure. So, and and I've actually been doing some back and forth between here and Tennessee. So, I was in Nashville when this. 00:10:07.754 --> 00:10:20.954 Past. So, it was some exciting news all over the news. In the in the Nashville with music business, but anyway, Tennessee just passed a new bill, titled the Elvis Act, short of ensuring lightness voice and image security 00:10:21.204 --> 00:10:31.464 Act of 2024 it amends their prior state write a publicity law as we've talked about a bunch of times write a publicity is not federal, 00:10:32.376 --> 00:10:34.176 Right. It is a state by state. 00:10:34.680 --> 00:10:48.960 So it didn't mean they're 1984 act and it takes effect on July 1 2024 the Elvis act establishes strong protections related to individual voice image and lightness against unauthorized artificial 00:10:48.985 --> 00:10:51.145 Tissue intelligence derived from deep 00:10:51.236 --> 00:11:04.076 Fakes and voice clones kind of the summary of the main changes is adding a person's voice to the scope of write a publicity protection in Tennessee I thought that was interesting with it 00:11:04.154 --> 00:11:16.394 Thing. Music City USA. That's how it was in there. But definition of voice as protection to simulation of an individual's voice which means simulated or AI generated replica of another individual. 00:11:17.351 --> 00:11:26.411 Protected so it can be a sound and a medium that is quote readily identifiable and a tributable to a particular individual 00:11:26.821 --> 00:11:32.761 Regardless of whether the sound contains the actual voice or simulation of the voice of that 00:11:32.781 --> 00:11:46.101 Individual. Gives broader protection against unauthorized use of a voice likeness as long as it is for purposes of advertising without the use being an item of commerce. So. 00:11:47.455 --> 00:11:59.635 Purpose of advertising products merchandise goods or services is the amendment to the act or for purposes of fundraising so listing donations anything you're trying to sell something or make money from, 00:12:00.940 --> 00:12:06.580 As well as giving us a civil action ability for violation of this act 00:12:06.981 --> 00:12:13.341 And a new claws of cause of action as well when someone creates an AI model or platform for users. 00:12:13.714 --> 00:12:24.574 To create a I generated photo, voice, or lightness with the knowledge that it will violate the act. So, not only an individual right but also AA, 00:12:25.345 --> 00:12:29.965 Cause of action to go against these platforms that I don't know maybe this will help, 00:12:30.738 --> 00:12:33.078 Hey broaden the act. 00:12:34.816 --> 00:12:46.396 I have some concerns about that part because you're essentially saying you look you made the software you're liable and that sort of gets us into the Sony beta maximalisis and you know does it have other legitimate uses, 00:12:47.212 --> 00:12:50.752 But I guess that knowledge component maybe the work around there, 00:12:51.515 --> 00:12:57.875 Maybe. It also adds AA section specifically for recording artist where they are allowed, 00:12:58.375 --> 00:13:03.895 To Sue over commercial use of their voice and and giving some rights if they've assigned 00:13:04.307 --> 00:13:10.847 That right to a record label where a person has entered into a contract for an individual's exclusive personal services, 00:13:11.347 --> 00:13:18.787 As a recording artist or an exclusive license to distribute sound recordings that capture an individual's audio performance and 00:13:18.684 --> 00:13:28.464 An action to enforce that right set for maybe brought by the person or the individual. And there's some exemptions for news, public affairs, sports broadcasting. 00:13:29.675 --> 00:13:30.455 That's listed in the plot. 00:13:30.495 --> 00:13:41.115 Present law the new bill adds a list of exemptions to the extent that such rights are protected by the first amendment for comment criticism scholarships satire purity 00:13:41.495 --> 00:13:51.155 Or fleeting or incidental. So, they're they're trying to carve out the first amendment has some 00:13:51.596 --> 00:13:54.236 Flexibility. And these kinds of things. 00:13:54.666 --> 00:14:04.446 So I this is the first to my knowledge this is the first state law that's passed and is going to be enacted specifically addressing the AI concerns we're we're going to talk about 00:14:04.649 --> 00:14:10.949 This whole section over things that are happening at the federal level or are trying to happen at the, 00:14:11.640 --> 00:14:25.060 On on AI and deep fakes. Well, you know, California's law does have the word voice in the right of publicity statute. So, but but it doesn't say specifically simulated voice but there is the case law about, 00:14:25.661 --> 00:14:33.221 You know, Bet Middler and Tom Waits and and that line of cases saying. And Johnny Carson, correct? I think so. Yeah. Yeah. So. 00:14:33.402 --> 00:14:43.062 Just to be really clear though you know because I've heard some talk about chatter among folks about this and I just be really clear this would not prevent someone from 00:14:43.368 --> 00:14:52.668 Doing like a parody video where they have a simulated bora audio assimilated voices and there's that that one of the of Johnny Cash thing and I'm a barbie girl. 00:14:54.449 --> 00:15:00.069 Oh yeah if you haven't heard that it's it's hilarious because it really sounds just like him and, 00:15:01.750 --> 00:15:15.670 You can, you can find that on YouTube. There's actually a whole YouTube channel dedicated to there's one of Simon and Garfunkel singing. I like big butts. You know that kind of thing. So, but you know, for humor and and parody sake, that 00:15:15.794 --> 00:15:25.334 Still first Amendment protection is going to come into play. So, this is really aimed at that commercial use, the kind of thing that essentially hurts the economic interests of the artist, 00:15:25.877 --> 00:15:33.857 And so as we move through our conversation I I made a note and I'll circle back to it as we get to own into our stories about 00:15:34.132 --> 00:15:38.452 How maybe some of these standards of parody which is really, 00:15:39.389 --> 00:15:46.229 The parody has to make fun of the original. So, even if John and Cart, they're using Johnny Carson's, 00:15:47.221 --> 00:15:56.401 AI white. Is it truly a parody? Well, the question that becomes it's a parody of what is it of Johnny Carson or is it of the song or the or the 00:15:56.719 --> 00:16:05.119 The sketch that he was doing I think both those would qualify but if they're just making fun of something else and making it sound like it was Johnny Carson doing it probably not, 00:16:05.568 --> 00:16:06.888 It's probably not. 00:16:09.788 --> 00:16:10.788 Yeah. 00:16:11.212 --> 00:16:14.932 When I talk to clients about what purity is and isn't. 00:16:16.560 --> 00:16:21.420 Yes that's changing the lyrics it's not just making funny lyrics to, 00:16:22.015 --> 00:16:28.195 Right? Country standard. So, that's a copyright analysis but we would apply it I think to this. 00:16:30.693 --> 00:16:37.113 Write a publicity first amendment maybe even some unfair competition times it's arguments and and there as well 00:16:37.436 --> 00:16:49.736 You know, parody is parody and we've got I think pretty solid definitions from the what the two live crew case and then those kinds of things that pretty do a pretty good job or articulating where the boundaries are for parody. So, 00:16:49.877 --> 00:16:50.237 Right? 00:16:50.587 --> 00:17:00.167 Well, there's a federal statue in the works. The generative AI copyright disclosure act was introduced in the house on April 9. 00:17:00.725 --> 00:17:14.825 By California representative Adam Shiff the bill requires AI developers to send notice to copyright holders of any work that they've used in training in AI program and that notices to be sent at least 30 days 00:17:15.209 --> 00:17:22.949 Before the A. I. Program is made available to the public. So, it's the it's the AI not the output that we have to think about. The proposed law would require, 00:17:23.401 --> 00:17:31.141 That anyone who creates or altars of data set used for AI training to send a notice to the register of copyrights with a 00:17:31.251 --> 00:17:42.351 Detailed summary sufficiently detailed summary of any copyrighted works used and that would essentially provide the owners of those copyrights. I guess a chance to object and maybe opt out. 00:17:44.422 --> 00:17:46.582 Currently there are folks that are looking for, 00:17:47.367 --> 00:17:56.647 Reparations for use of their works in training these tools are facing uphill climbs in the courts and so the supporters of this bill say they 00:17:56.512 --> 00:18:06.832 This could be a step toward protecting artists, writers, creators, of all sorts and to provide for some model for compensation and and less of this outright, 00:18:07.431 --> 00:18:18.831 Taking I guess you could say the house also has the no AI fraud act which would effectively create a federal writer publicity enabling individuals or rights holders to sue over 00:18:18.963 --> 00:18:26.583 Unauthorized use of a person's likeness or voice but this is the the generative AI copper at disclosure act is more about. 00:18:29.315 --> 00:18:34.695 Require me some transparency so there are two twin lawsuits also centering on this, 00:18:35.510 --> 00:18:47.810 I want to describe her as AI's shadowy copyright management and that's taken from an approach in the case of the intercept media inc versus open AI and raw story media versus alternate 00:18:48.131 --> 00:19:01.571 No I'm sorry also versus open AI we covered that in last month's episode in both of those cases the plaintiffs argued that the AI took steps to conceal the copyright infringement by intentionally removing, 00:19:02.219 --> 00:19:07.019 Copyright management information the authorship authorship but information those kinds of things, 00:19:08.097 --> 00:19:14.557 And all of this sort of reflects the the European Union's open A excuse me AI act 00:19:14.561 --> 00:19:19.361 Which requires disclosure also abusive copyrighted materials and so on so, 00:19:20.365 --> 00:19:29.785 Lots of backing from trade groups in the IP industries music industry the human artistry campaign saga so on and so forth and the other 00:19:29.883 --> 00:19:39.423 Entertainment industry union. So, we'll get some pushback for sure and we'll be watching to see what happens in congress. I think congress has trouble 00:19:39.696 --> 00:19:47.676 You know, deciding what to have for lunch, much less what to do about the law these days. So, yeah. Forget. 00:19:49.175 --> 00:19:50.075 Who knows? 00:19:52.195 --> 00:19:56.975 I I think it's interesting. It feels a little bit while I. 00:19:58.808 --> 00:20:00.788 I told you so, 00:20:01.769 --> 00:20:16.349 I'm I'm okay. I don't know. It's like a almost this kind of notice for a compulsory license for a mechanical license. If I give you the information, it's all going to be okay. I I can't quite figure out how it gets us where we want to 00:20:16.632 --> 00:20:24.372 How it would get the content owners where they want to go I agree I think all it does is open the door to maybe some 00:20:24.635 --> 00:20:30.455 Earlier litigation asking for injunctions or something like that but we still have to make a case for why it's not, 00:20:30.919 --> 00:20:39.319 Fair use why it's infringement. Why not accept what to do that? I also want to bring up we talked about this. I guess it would have been in the 00:20:39.471 --> 00:20:46.371 Probably fourth quarter of 2023 which was the deep X accountability act introduced in September 23. 00:20:46.672 --> 00:20:58.732 And and nothing has happened on that since the introduction. So, it looks like we've got kind of pending as the generative AI copyright disclosure and the houses know AI fraud act and we'll see if 00:20:59.042 --> 00:21:02.042 Anything else comes up at the federal level. 00:21:03.480 --> 00:21:11.640 And here we are. It's an election year and you know, they're they're bigger fish to fry and and frankly more posturing to do on other hotter topics. 00:21:11.640 --> 00:21:22.560 Then, all of this. So, I don't expect much to to happen and you know, if it does great and we'll see but I agree that the disclosure isn't really the issue. The the 00:21:22.664 --> 00:21:27.584 Prohibition on doing this without permission or consent is is where we need to have. 00:21:29.673 --> 00:21:38.493 Mortif in the law, I think. At least, that's the argument that the copper and industries want. So, interesting that they're supporting it but, 00:21:39.012 --> 00:21:43.152 Maybe it's better you know something's better than nothing kind of an approach there, 00:21:43.891 --> 00:21:53.311 And and I guess I know where that just added in some light breaking things on the no fakes act which had seen it earrings yesterday so that's another right, 00:21:53.784 --> 00:22:00.564 Third prong to the component of what's happening at the federal level. Yeah, yeah, we'll get to that story in a couple of minutes. Yup. 00:22:01.931 --> 00:22:10.031 Let's move on to the story about Saga and the record companies they've reached this deal over AI in recordings. 00:22:11.624 --> 00:22:18.344 Back in eight early April, a billie eilish had and, and another couple 100 musicians had signed an open letter. 00:22:18.864 --> 00:22:27.184 For a I developers to respect the rights of artists and ensure that they get a fair deal from the AI generated music, 00:22:27.669 --> 00:22:35.769 Platforms and and paradigms and some of the world's largest record labels have now reached a 10° agreement with Zag after. 00:22:36.983 --> 00:22:50.663 Covering the use of AI generated voice impersonation and that's still waiting for the union to be ratify you to ratify the members to ratify the rule Sony Warner Music Universal in Disney have made a commitment to, 00:22:51.219 --> 00:22:58.239 Some consent and compensation requirements. It's interesting that it's sag after and not AFM and a Beth 00:22:58.178 --> 00:23:06.878 But what is it that you know act via all those others federation of musicians and after a covers 00:23:07.252 --> 00:23:11.032 The actual focal talent. 00:23:14.814 --> 00:23:23.514 You know, it is sag after. I just remember, I don't know how all the administration plays out that I think they work together from an administrative stamppoint. 00:23:24.679 --> 00:23:28.799 And and their sister unions with the other unions yeah 00:23:28.983 --> 00:23:36.963 Yeah. Anyway, under the agreement, record labels would need this clear and conspicuous consent from copyright owners covering minimum 00:23:36.968 --> 00:23:40.028 Copyright owners interesting covering minimum compensation require 00:23:39.885 --> 00:23:52.005 Requirements and specific details about how they intend to use any recordings. So, that's on the ingestion side before the, you know, the training of AI's and things. Pretty similar to what the studios agreed to, 00:23:53.109 --> 00:24:01.869 The movie studio is agreed to with Sag after last year so the union is is holding the line on that and then doing a good job of it it sounds like, 00:24:02.723 --> 00:24:07.323 Some of what I had read that maybe the again this is Voice Talent for 00:24:07.459 --> 00:24:17.299 On the video film production side. That maybe they weren't so happy with what the union agreed to for them. So, if this is mirroring, mirroring it. 00:24:17.947 --> 00:24:30.847 That's easy for me to say. Yeah. I'm going to dig in deeper as I'm concerned about how this plays out for my clients and also making sure that the labels are honoring this. 00:24:31.639 --> 00:24:33.319 Yeah, that'll be the trick one. 00:24:35.859 --> 00:24:39.199 Well, meanwhile, we are hearing lots of stories about, 00:24:39.930 --> 00:24:44.850 AI generated, you know, deep fake audio recordings of of artists 00:24:45.251 --> 00:24:51.131 Who didn't actually collaborate, collaborating, or who are now deceased, you know, doing it. 00:24:51.354 --> 00:25:01.074 Performances with living people on time. So, yeah, it'll be interesting to see what those labels do and the artists on those labels who have been trying to do this kind of thing. Well. 00:25:02.535 --> 00:25:17.295 We have another AI story here the check courts have weighed in on the question of copper eye protection for AI generated or AI assisted works in this case the plaintiff had generated an image using the program dolly, 00:25:18.505 --> 00:25:32.545 The prompt was create a visual representation of two parties signing a business contract in a formal setting like a conference room or a law firm office in Prague and show only their hands so the plain of subsequently generated took this 00:25:32.558 --> 00:25:38.198 Generated image, put it on a website, and then the defendant took it from the website, put it on their own website 00:25:38.283 --> 00:25:48.843 And the planet objected on the basis that they were the author of that generated image and demanded it be withdrawn and and distribution be stopped without their consent and took them to court 00:25:49.050 --> 00:25:55.350 And the key issues were weather that image is even eligible for copper eye protection whether the person created the prompt, 00:25:56.137 --> 00:26:09.937 Based on the AI could be considered the author of that image for the purpose of coppery lawn. The municipal court in Prague said no. Only a natural person can be the author of a copyrighted work and since the AI is not a natural person. 00:26:10.376 --> 00:26:16.556 The AI can't be an author it has to be the unique result of a creative activity of a natural person, 00:26:17.344 --> 00:26:24.844 And unless the creator can demonstrate that the generated image is the result of there unique creative contribution it's not a work of authorship 00:26:25.032 --> 00:26:27.132 So, no copyright. Yeah. 00:26:29.020 --> 00:26:36.880 Hey Facebook I think so far it's just China and Vietnam would have said differently. 00:26:38.687 --> 00:26:47.127 I don't remember the Vietnam dude. I heard something about that not long ago that there there was and it didn't go as far as China but it was you know. 00:26:47.186 --> 00:26:53.966 Basically saying yeah there are scenarios where the crafting of the prompt can be the act of authorship or something along those lines 00:26:53.983 --> 00:27:03.523 So, I have this whole thing of, okay, so they've said that but then how if how do I enforce still enforcement rights? If you're outside of, 00:27:04.561 --> 00:27:09.841 If you created something in the US that would then be infringed in China. 00:27:11.254 --> 00:27:20.894 Probably doesn't help. Our folks too much. Maybe it helps someone in China but who's infringed here but not the other one. Not the other way around. It's not the other area. 00:27:21.773 --> 00:27:36.473 So I I anyway I jumped the gun on the on the third prompt. Well let's target. Legislation but the no fakes act senate judiciary committee hearings yesterday. I on April 30 I plugged in a link to the C Span 00:27:36.843 --> 00:27:44.343 Video I don't know how long cease span leaves those videos at but it's active for right now if you want to go watch that 2 hour hearing and 00:27:44.567 --> 00:27:59.387 Report back. Yeah. That'd be great but FKA twigs testified on April 30 before the senate committee about the dangers of unauthorized used of AI to mimic an artist style and personas. She herself developed a 00:27:59.213 --> 00:28:07.193 A deep fake over the past year to explore using AI for marking purposes and to get ahead of others who may want to misuse her likeness. 00:28:08.765 --> 00:28:14.405 Twiggy are a twig argued sorry Twiggy I'm dating myself just a little bit. 00:28:16.741 --> 00:28:20.341 Sorry. No one, no one under 50 is going to get that, but all of our listeners. 00:28:20.369 --> 00:28:29.369 Listeners and viewers over 50 will appreciate that Twig argued that AI technology threatens artist identities and livelihoods if their voices images 00:28:29.695 --> 00:28:38.995 Art can be replicated without their consent. She sees this as exploitation of creators during a major technology shift. Huh? 00:28:39.463 --> 00:28:44.923 I feels like every time that happens much like artists have been exploited in the past by innovations while she 00:28:44.909 --> 00:28:51.329 She continued with that. Well acknowledging AI is created potential if controlled by the artist Twigs, 00:28:51.913 --> 00:29:01.573 Plans on urging the committee or did urge the committee her written statement was released ahead of the hearing to enact regulations protecting individuals artist work 00:29:01.707 --> 00:29:07.227 Their voices and lightnesses from being co opted harmfully by AI without permission or 00:29:07.640 --> 00:29:08.480 Compensation. 00:29:15.500 --> 00:29:21.320 In the future of AI landscape. So the no fakes act which is this third prom. We're talking about is. 00:29:21.323 --> 00:29:30.563 Proposed federal legislation aimed at protecting individuals from the unauthorized use of their voice image and lightness in digital replicas including deep faith. 00:29:30.686 --> 00:29:44.186 Aches and voice clones it's also known as the nurture originals foster art and keep entertainment safe act and it was introduced back in October of 2023 and we're just having some hearings here in end of April 00:29:44.432 --> 00:29:54.032 So eh the goal is to create a federal writer publicity and as we just discussed earlier we don't have one of those. Everything is state by state. Some 00:29:54.389 --> 00:30:03.989 Saying voice image and lightness as we've just learned not mentioning voice some acrobal state laws during a person's lifetime in Texas, 00:30:04.552 --> 00:30:09.232 The statutory writer publicity is effective after death even though you can, 00:30:09.764 --> 00:30:15.584 In for some of those state rights through misappropriation in Texas we don't have an active 00:30:15.922 --> 00:30:20.782 Write a publicity law. During the artist life. So. 00:30:22.448 --> 00:30:25.448 I don't know. What do you gotta add to that? Gordon, what do you think? 00:31:01.617 --> 00:31:08.697 So I can hear you and I'm very animate see you animatedly discussing but I can't hear you. 00:31:10.386 --> 00:31:21.366 That's because I had to cough and I muted my microphone. So, what I was saying. So, wasn't my allergies, folks? It was. Very animated. 00:31:21.850 --> 00:31:29.810 Animatedly responded to my prop. No, that's it's nice that I had a rehearsal for what I'm about to say again now. I 00:31:30.227 --> 00:31:40.187 I was questioning how does the federal government get into an area that has historically been subject of state regulation and, 00:31:40.822 --> 00:31:50.302 I mean like you know I guess there are situations where congress just decides okay it's time for us to occupy this field and either declare that this is a federal question kind of a thing. 00:31:52.084 --> 00:32:01.144 You know, using what the commerce clause probably, something like that, but I challenge whether that's the whole, 00:32:01.672 --> 00:32:11.812 How they can regulate trademarks is if they're in interstate plumbers. So, yeah, I don't see them declaring that suddenly, this is part of copyright law or something like that. Therefore, 00:32:12.024 --> 00:32:15.864 You know, has its own statue or constitutional authority but, 00:32:17.110 --> 00:32:29.830 You know the the real question is does Congress even have the will to come in and do this and and does that send a message in other areas of law? That are hot button issues around. 00:32:31.658 --> 00:32:39.878 You know, where where the power of the states and the power of the federal government, the federalism question. So, I don't hold a lot of hope that a federal law like this. 00:32:40.255 --> 00:32:49.135 Comes in to play anytime soon but it's I'm glad we're talking about it and and it's reaching the public stage in this way. Right. 00:32:51.652 --> 00:33:03.532 You know, crafting AA complaint. You can use their certain provisions of the trademark trademark at Liana Mag that can be used sort of like a writer publicity. 00:33:05.219 --> 00:33:09.899 Cause of action as well as the state law causes of action, 00:33:10.737 --> 00:33:15.957 And maybe just because who the players are in this now it gets more interesting. 00:33:17.462 --> 00:33:21.842 And I would think the technology side, 00:33:22.413 --> 00:33:30.933 With much rather get this address in one law versus potentially 15 that's a good point that's good point so that lobby may actually step in and say, 00:33:31.694 --> 00:33:42.794 Okay we'll we'll go for it here's what we need and yeah I should say you know as pessimistic as I am about congressional action happening at all any subject really, 00:33:43.631 --> 00:33:51.491 This act is by partisan sponsored bill in the senate the no fakes act and also the house bill, 00:33:52.639 --> 00:34:03.439 The no AI fraud act which is similar and and covers things in much the same way. It's also bipartisan. Equal number of Democrat and Republican sponsors. So, 00:34:04.066 --> 00:34:06.586 Maybe my pessimism is misplaced in this instance, 00:34:08.071 --> 00:34:14.591 Or maybe not. It's great to, okay, so how many years have we been, 00:34:15.222 --> 00:34:20.902 Joyfully hosting the podcast together. This is our 15 year anniversary episode. 00:34:22.709 --> 00:34:31.869 We started in April of 2009 and this is now welt May 1 but this is technically our April episode four 2024, 00:34:32.748 --> 00:34:37.248 Hey Facebook in and happy anniversary to you because as 00:34:37.321 --> 00:34:40.741 Everyone knows I'm not the technical genius behind this program. 00:34:43.461 --> 00:34:45.481 Questions about myself now too. 00:34:48.021 --> 00:34:49.861 15 years. So, 00:34:50.158 --> 00:34:58.678 If we went back to the year number one we were discussing will the world congress overhaul the copyright act? 00:34:59.466 --> 00:35:02.886 You're right. And we've held out no hope. And it hasn't happened. 00:35:08.423 --> 00:35:20.123 But what we're seeing is again as these it's kind of this guacamole as the issues pop up and was it last episode or the prior one it's been since the first 00:35:20.433 --> 00:35:22.593 2024 that, 00:35:23.277 --> 00:35:34.317 You know the congressional reviews related to non-fungible tokens came out and said we don't need to update any laws related to NFT. So, you know, we're having these hearings on AI. 00:35:35.205 --> 00:35:43.305 Are the current federal law sufficient to deal with AI. I guess that's really the question that's gotta be answered and if it's not, 00:35:43.532 --> 00:35:49.952 Then we'll congress act to in by enacting a law that they believe is sufficient to deal with AI. 00:35:52.030 --> 00:35:55.690 Well, that is the big question is it? Yeah. It's not going to. 00:35:56.271 --> 00:36:06.471 Oh well I've expressed my point of view the pessimism that I was talking about well 15 years we've been talking 15 years about the copyright act having a major overall, 00:36:07.028 --> 00:36:09.908 Either one of us have the bandwidth to go back to look at 00:36:09.900 --> 00:36:18.660 All of our listen for all of our predictions on that point. You'll like it some point, I said, within 10 years, we'll have a major overhaul. 00:36:19.029 --> 00:36:21.069 Maybe. Yeah. Didn't happen. 00:36:21.558 --> 00:36:30.078 It didn't happen. I think we do need it at some point and you know, it's just a matter of of having a. 00:36:31.793 --> 00:36:40.253 A system in Washington that works and that isn't just about the political posturing and setting up the you know the table for the next big election. 00:36:41.543 --> 00:36:44.723 Positioning. I'm not going to get too political here but 00:36:44.981 --> 00:36:54.861 Anyway, let's talk about this 10th circuit decision involving well, it's interpreting and using applying the warholve 00:36:55.010 --> 00:37:08.870 Foundation for the visual arts versus Goldsmith case. The Supreme Court's decision has now reshaped the landscape and copyright law particularly fair use and transformative views doctrine. This case is white monkey productions, 00:37:09.351 --> 00:37:19.551 LLC Timothy Seppy versus Netflix and Royal Good Productions. Seppy is a former videography at the Gerald Wayne 00:37:19.892 --> 00:37:25.692 Directive zological park recorded he recorded a video of Joe exotic delivering a eulogy 00:37:26.077 --> 00:37:32.857 Joe exotic from the Netflix TV show Tiger King and that video was live streamed on the, 00:37:33.414 --> 00:37:44.094 Joe exotic TV YouTube page and then stayed there after the funeral for a while. Netflix, featured a clip from the video and a segment of the tiger king show that was about a minute and six 00:37:44.235 --> 00:37:50.895 Seconds long. That video was taken after Seppy had terminated his relationship with the park and there was. 00:37:51.479 --> 00:38:01.379 And thus it was determined not to be a work made for hire so seppy is the owner of the copyright and the footage the district court initially ruled in Netflix's favoring 00:38:01.438 --> 00:38:10.198 Looked at fair use and disn and then the circuit court took a look in disagree by applying the fair use the four factors outline in the copyright act 00:38:10.630 --> 00:38:16.690 First off, the purpose and character of the use, the circuit court rejected the notion that the use was transformative. 00:38:17.918 --> 00:38:29.738 Focusing on the commentary that did not critically engage with seppy's work work but rather focused on Joe exotic and the court said defendance use the funeral video to illustrate mister exotics proported megamaniah cole 00:38:30.039 --> 00:38:30.819 Excuse me. 00:38:31.938 --> 00:38:40.578 Easy for me to say. Reported Megalomania even in the face of tragedy and by doing so to fedence for providing a historical reference point 00:38:40.868 --> 00:38:47.768 In exotics life and commenting on his showmanship. However, defendants used to not comment on mr. Seppy's video, 00:38:48.475 --> 00:38:57.955 That is being it's creative decisions or intended meaning. War hall has deemed such a use to not be sufficiently transformative. So this departure from 00:38:58.216 --> 00:39:06.616 The Campbell versus Acoro's music case highlights a shift towards a stricter interpretation of transformative use, 00:39:07.272 --> 00:39:20.772 Secondly the court acknowledge that the nature of the copyrighted work favored the defendants as the video was factual and previously published on third on the amount of substantiality prong the portion taken was insubstantial, 00:39:21.315 --> 00:39:30.495 Relative to the work as a whole and that also went in the defendant's favor and on the fourth factor the effect of the use on the potential market circuit court found that the district court 00:39:30.524 --> 00:39:38.684 Excuse me, these, yeah, the appeals court found the district court's analysis, lacking, emphasizing the defendants burdened to demonstrate minimal market impact. 00:39:39.311 --> 00:39:48.791 Again signaling a stricter standard for fair use determinations ultimately reverse the district court's ruling and further look at the fair use factors that fourth one gets me, 00:39:49.591 --> 00:39:58.411 I'm not sure it's a wrong decision overall but is it really the defendant's burden to prove minimal market impact? 00:39:59.224 --> 00:40:11.164 Well, hey, I guess it is on a defense. The fair uses a defense so you have to prove, you know, no, no, significant market impact. Okay, fair enough. So, who here we probably will see this again unless they reach a 00:40:11.467 --> 00:40:16.507 Settlement. Yeah. They kicked it back down but this is where I was mentioned earlier. 00:40:17.156 --> 00:40:24.476 This begins to feel like that parody standard of it must comment on the underline work. 00:40:24.907 --> 00:40:32.107 To be able to fit within this this fair use factor in any transformation factor. 00:40:35.503 --> 00:40:43.663 The Warhol case said the world case looked at whether or not they were created for essentially the same purpose magazine illustration, 00:40:44.127 --> 00:40:49.047 Purpose and character but it does transformation fall under the factor 00:40:49.033 --> 00:41:02.533 That purpose and character factor even though again in the last 15 years we've discussed a whole lot that transformation is kind of become the fifth factor. Well that's the way the Supreme Court characterized it as tying into that first factor in particular 00:41:02.609 --> 00:41:05.429 Right? But it's funny. I was teaching 00:41:05.607 --> 00:41:21.327 Fair use in in my class the other day and I sort of dawned on me that you know the first and second factors the purpose and character of the alleged infringing use and the nature of the original I I find myself wondering did they characterize it as nature of the original just so they weren't also saying, 00:41:21.811 --> 00:41:24.391 Versus the purpose and character of the original. 00:41:26.834 --> 00:41:37.334 Because if you look at the way it seems to be going maybe that's really the point is let's just say it differently so we're not conflating the two but ultimately whether it's transformative is, 00:41:38.209 --> 00:41:47.789 Comparing the purpose of the original verses with the the purpose of the new. Well, I I think that is what what is happening in the drink information 00:41:48.061 --> 00:41:52.921 So, how close are you stepping? How close is the new work? 00:41:53.544 --> 00:42:03.144 Yeah, if they're the same purpose, in purpose of the previous. Yeah. So, maybe it's not really a fourth factor, a four factor. It's really three factors. 00:42:03.221 --> 00:42:16.001 But you know how close the church the first two and added this transformation layer into some of the the deeper thinking copyright scholars would maybe go back to look at it 00:42:16.324 --> 00:42:18.524 The opinions from the 00:42:18.732 --> 00:42:29.052 40s and 50s that dealt with fair use what was that learn at hand and and that group of jurists. Yeah. Couldn't love somebody named Learn at hand. 00:42:29.706 --> 00:42:39.546 That's a judge. Yeah. I miss the alcohol. You're listening. Thank you. Yeah. We're making up that name. But we're not. 00:42:41.495 --> 00:42:46.095 He was the grandfather of Mr. Hand from Fast Times at Richmond High, 00:42:47.160 --> 00:42:48.160 Okay. 00:42:54.180 --> 00:42:56.620 I've been working on genealogy and, 00:42:57.172 --> 00:42:57.712 You know, 00:42:58.936 --> 00:43:09.496 We have a lot of names beyond learning hand that are going to southern names in my genealogy but we won't we won't go down that path. So, topic for another day. Hey, that's right. 00:43:09.756 --> 00:43:17.476 Everybody dies. Yeah. Well, you may remember a 6 months or so ago. 00:43:18.336 --> 00:43:31.176 Artist Sam Smith and Normani had sued and won a case over their hit dancing with a stranger and now their case they've had some 00:43:31.317 --> 00:43:38.337 Not so great luck on the attorney's fees side of things. Federal judges denied their request for 00:43:38.483 --> 00:43:48.983 An award covering their legal expenses. The stars claim that that was more than $700 thousand and here in the Central District of California, Judge Sue. 00:43:50.213 --> 00:43:56.933 Has dismissed that part of the case he determined on March 18 that it was so with the case itself wasn't so devoid of merit 00:43:56.929 --> 00:44:03.529 As to necessitate penalizing the plaintiffs with payment of the substantial legal fees Smith and Normani, 00:44:04.617 --> 00:44:17.997 Contender that they shouldn't be held responsible for hefty expenses they had to incur in defending against what they seemed what they deemed a frivolous and unreasonable loss. So I'm sorry so I I had the facts wrong. They didn't they were sued for infringement and they won. 00:44:18.525 --> 00:44:24.045 And then ask for their attorney's fees and they said look it was merely a gamble by the planets. 00:44:24.887 --> 00:44:37.907 Hoping for a significant payout and the judge disagreed saying no there was no evidence of a malicious intent by the plaintiffs and so the point of send that case songwriters Jordan Vincent Christopher Miranda and Roscoe. 00:44:39.532 --> 00:44:52.592 Claim the dancing bore a striking resemblance to their 2015 track of the same name so they they they pointed the hook and chorus about songs being similar as well as the title and, 00:44:53.247 --> 00:45:01.047 Ultimately, the in September, the summer judgement motion was granted, and, 00:45:01.826 --> 00:45:08.786 But the judge said, no, you know, there was a plausible case there. So, no attorneys fees for you. So, yeah. 00:45:11.297 --> 00:45:19.757 Defend them to it back and said yeah but should you set all these things in your decision that would make us think in this wasn't it, 00:45:20.377 --> 00:45:30.217 Uplawsable claim and it was as far as the judge pointing out prior art that quote contains nearly 20 references to the term dancing with a stranger. 00:45:33.091 --> 00:45:45.151 I don't know even the judge saying the arguments had generic reasoning and ruling in favor of a much smaller recovery of legal cost. Yeah. So, they did get their cost but, 00:45:45.604 --> 00:45:51.184 Well, I don't know. $10 thousand, I think. Versus 700 1000. 00:45:51.816 --> 00:45:55.356 On the planet side and this is just me speculating. 00:45:57.730 --> 00:46:06.490 Is this a potential commentary on even as a defendant we need to get our legal fees reindeer, 00:46:07.246 --> 00:46:20.386 In the pending case. Well, I mean it sounds like it. I mean, you know, it'll be interesting to see if there's an appeal here. I think the standard of review for these kinds of things would be abusive discretion, right? So, let's help me, 00:46:21.118 --> 00:46:26.938 And it then it sounds like he the judge made his reasoning pretty clear 00:46:27.249 --> 00:46:41.169 In the ruling no evidence of malicious intent it wasn't frivolous and unreasonable so you know hard hard to say but what is that $700 thousand represents what a couple of 1000 hours of lawyers work 00:46:41.517 --> 00:46:47.637 To defend to a summary judgment ruling. So, no trial happening, 00:46:48.728 --> 00:46:53.408 No appeal yet or anything like that. So, that that does seem like a lot of money. 00:46:54.603 --> 00:47:00.543 I think that's something that defendants do need to be mindful about. Mindful of? Yeah. Yeah. You know, on the other hand. 00:47:01.988 --> 00:47:04.868 And I feel like I just read this yesterday and sorry 00:47:05.049 --> 00:47:14.649 Too much allergy medicine I guess. And another case where the recovery and I think it was the plan of actually prevailed and didn't get there. 00:47:15.213 --> 00:47:19.773 Attorney's fees. They just got the cost and the judge going through a similar. 00:47:20.841 --> 00:47:30.781 Analysis. You know, I I think. Yeah, I mean, I think from a public policy perspective, there's there's something here to the notion that you know, I know a ruling like this. 00:47:31.372 --> 00:47:41.032 Kind of stimulates settlement. I mean, they could've gotten out of lawsuit for 150 1000 bucks. If they lost the lawsuit, 00:47:41.832 --> 00:47:55.092 With intentional willful infringement there the damages would have been in that wealth unless there's actual damages but statue damage is 150 grand so does that mean that you get sued and it's cheaper to offer a settlement than to defend, 00:47:55.840 --> 00:48:00.640 Even though you know it's a frivolous case. This is bogus. Come on. It's ridiculous. So. 00:48:08.542 --> 00:48:10.082 Pursue that I I 00:48:10.513 --> 00:48:12.373 I still struggle with, 00:48:14.367 --> 00:48:20.187 Dismiss also some copyright claims on motion for some rejuvenate even though I know it can yeah. 00:48:22.226 --> 00:48:27.146 Well, I mean, I guess if you have the experts lining up and saying, no, they're really not that similar. 00:48:27.609 --> 00:48:40.149 Yeah and sorry I wish I had made that as I'm looking at my notes I didn't write that case down because that that case that I was reading that we had discussed in earlier episode actually did hinge on the, 00:48:40.770 --> 00:48:49.710 On the experts. Yeah. And making the ruling at the motion for some rejuvenate. So. Well, you know, the question is material issue of of tribal fact. 00:48:49.908 --> 00:49:02.088 And if if the experts are sort of lining up saying, well, it's not really that similar. Then, it's asking the judge to just interpret what does that mean in terms of infringement or or you know, any of the other elements of the case, I guess. But, 00:49:03.357 --> 00:49:11.097 Yeah, it's 700 g. I mean, if the the defense cost them more than they would have had, maybe would have had to pay and, 00:49:12.179 --> 00:49:20.819 Well, their profits would have been the issue in that case, wouldn't it? Right. I think so. I think so. And then we don't want to set that up for every time. Oh, just sue me and I'll pay you the, 00:49:21.488 --> 00:49:29.768 Yeah. So, it's actually dangerous. Maybe another area for the overhaul of copyright statue to address the defendants. 00:49:30.040 --> 00:49:40.960 Right to attorney's face. Okay, so I do want to just correct myself as far as changes to the copyright act in the last 15 years. We have had one major change. Yeah. 00:49:42.319 --> 00:49:44.479 The small claims court. Right. 00:49:44.812 --> 00:49:52.852 Now you know I I think we hopefully they'll issue another report as to how effectively it's working. Right. But, 00:49:54.049 --> 00:50:01.729 Shall we take credit for that since we were talking about it in the past 50 we should take we will take credit for all successes. 00:50:07.579 --> 00:50:16.219 But yeah so you know I I look in again one of these things on the maybe think about it as we're talking about attorneys feeding images because you know had this 00:50:16.473 --> 00:50:23.133 Be gone through the small claims court that was from the KSAC damages would have been 00:50:23.468 --> 00:50:32.528 Capture a much lower amount of money but clearly these report damages exceeded that. So. 00:50:32.830 --> 00:50:45.610 No. And you know, so so they gambled and lost but at least they didn't have to pay out the attorney's fees, the other side. So, I I guess that sort of the cost of doing business when you're a big star with big 00:50:45.821 --> 00:50:53.621 Famous records and things but it will be interesting to know how much did the artists actually collect in 00:50:53.941 --> 00:51:05.521 In their share of record royalties from these albums after recruitment of recording cost and marketing and all that stuff whether or not they're actually not losing money on the song. Or not. 00:51:07.390 --> 00:51:14.170 But that's conversation for another day. Exactly. Exactly. Well, we have one more, 00:51:15.185 --> 00:51:25.845 Message or story to share with folks and and it's been big news in in many business arenas these days that there's the, 00:51:26.466 --> 00:51:32.406 Federal trade commissions non compete bam that was announced on April 23, 00:51:33.830 --> 00:51:42.710 The FTC has made this rule and it's actually a 570 page PDF document to make a rule 00:51:43.138 --> 00:51:55.078 That really only needs 10 pages or so or less in the in the code of federal regulations. So, it I was amused because as I was scrolling through these 570 pages I landed on one of the pages that was the heading was cup, 00:51:55.831 --> 00:51:57.691 Federal paperwork reduction act notice. 00:52:02.571 --> 00:52:06.391 You know what? While I'm watching the 2 hour hearing. Yeah. 00:52:06.814 --> 00:52:14.914 What multitask? Well, I'll help you. 500 pages. I'll tell you the first 561 pages are 00:52:15.023 --> 00:52:26.583 Preferatory material explaining and look it's legislative history stuff so it has its relevance here and there but the text of the actual rule starts on page 561 of this 570 page document, 00:52:27.240 --> 00:52:31.980 And what the law does or the rule when it goes into effect they have to, 00:52:33.101 --> 00:52:39.641 After project that forward about 120 days after publication in the federal register for to be, 00:52:40.803 --> 00:52:46.203 I've become a part of the code of federal regulations but 00:52:46.073 --> 00:52:57.413 But it adds sub chapter J to title 16 of the CFR starting at section 910. Now, none can beats have been illegal and uninforceable in California for, 00:52:58.366 --> 00:52:59.606 And a half. 00:53:01.035 --> 00:53:12.615 Yeah so a long time yeah I I thought it was hot the whole 7 year thing in California well there's a 7 year statue on personal service bindings personal service contracts but 00:53:12.864 --> 00:53:19.164 In an employment contract, you can't tell the employee. Hey, after you're done here, you can't go work for our competitors. 00:53:20.361 --> 00:53:30.601 And the law has been revolving an evolving in Texas and obviously very very narrow and scope. Yeah. 00:53:31.715 --> 00:53:34.475 Until I actually kind of love it when I see. 00:53:36.000 --> 00:53:46.320 Prior to this but when you would see an employment agreement come across that had this just egregious ten-year non-compete and I'm like let me just tell you, 00:53:47.009 --> 00:53:53.729 Let's don't negotiate this because it's dark. Never going to be enforceable. So, let's get everything else we want and just 00:53:54.058 --> 00:54:06.658 Know that they can never enforce that. Yeah. It can make us too yet but it's not a forceable. So, we've talked about this states rights versus federal rights and here is an example of where, 00:54:07.273 --> 00:54:09.793 The federal trade commission is, 00:54:10.372 --> 00:54:13.952 Preempting all state laws related to not compete. 00:54:16.552 --> 00:54:20.132 Over interstate commerce and labor and employment. 00:54:20.255 --> 00:54:30.035 Areas although states also have labored employment law in effect so this is interesting and and it's not gone with without challenge but, 00:54:30.553 --> 00:54:34.453 What the law will do is essentially prohibit the use of, 00:54:35.718 --> 00:54:43.338 These non-compete clauses in employment agreements. It's a retroactive band which means any existing non-competes will be valid 00:54:43.552 --> 00:54:50.512 From the moment the law takes effect and there are just a few small exceptions senior executives with non competes 00:54:50.827 --> 00:55:01.387 Those will remain in effect but no new non-compete clauses for senior executives. It does not apply to if you're selling your business and promising not to compete against the company you used to own, 00:55:02.250 --> 00:55:14.730 So that's still a valid. That makes sense. Yeah. Yeah. And it doesn't apply to certain kinds of banks and health care businesses and stockyards. So, interesting health care businesses because that's one of the areas that I see a lot of. 00:55:19.052 --> 00:55:24.192 Doctor agreeing not to compete against their former practice when they move to a new practice and things like that, 00:55:24.783 --> 00:55:32.163 But the consequences, this is what's interesting. The FTC is actually going to impose fines, penalties, and junk to relief. 00:55:33.308 --> 00:55:47.528 On employers that continue or try to use these non-compete classes and you know look it it's already a non-enforceable provision and it might even render the entire contract void if it's not handled 00:55:47.955 --> 00:55:56.295 You know, correctly. So, the fines and penalties is pretty significant. The federal government's going to come after you and say, wagging your finger, okay? Pay up. 00:55:56.426 --> 00:56:05.786 You used one of these closets. You know, you pulled out an old contract form from a file somewhere and oops. Now, you pay a fine. Right. So, 00:56:06.077 --> 00:56:13.997 Companies have to pay attention to this. It also requires that note that employees who are currently bound under an existing non-compete. 00:56:14.493 --> 00:56:23.793 Must be given notice of this change before the rule takes effect and it actually includes the note there 00:56:23.991 --> 00:56:36.711 Yeah. Practice actually includes the specific language of the notice. So, there's just a model notice. Hey, they'll the government has changed the rules. They're still no longer replies. So, be your advice. And. 00:56:37.575 --> 00:56:46.275 One of the interesting things that I've noticed is it doesn't have an impact on trade secret law. So, if you haven't NBA, that's still in effect and 00:56:46.424 --> 00:56:58.904 A lot of NBA's really have the practical effect of preventing you from going and working from your competitors because you take the knowledge you gain on the job with you and so competitors will still be, 00:56:59.361 --> 00:57:05.481 Maybe reluctant to hire people who worked for the other company you know because they'll get sued for the transfer. 00:57:07.508 --> 00:57:14.768 This is a conversation I often have with with my clients who are you know maybe they're not quote in the entertainment field. Yeah. 00:57:17.104 --> 00:57:25.744 Content or whatever they're they're business area is is you know you were maybe they've got sales people. 00:57:26.287 --> 00:57:35.827 Yeah. It's like even if that sales person is not under a non-compete, under Texas state law, they have a duty not to disclose. 00:57:36.837 --> 00:57:42.657 You know, this competitive information. Oh, even in the absence of a non-disclosure clause. 00:57:43.049 --> 00:57:47.489 That's right. You can't under under our state. Just state common law. 00:57:48.531 --> 00:57:53.751 You're the duty of non-disclosure of confidential and proprietary information, 00:57:54.544 --> 00:58:03.364 I mean because that makes it sense it's proprietary as property. Yeah. That's right. So if I have a method for sales formula or marketing. 00:58:04.312 --> 00:58:15.712 You can't go take that to the next employer now and you can you know take your comment sense nobody's stopping that I I always love pre who out before I even thought about going to law school. 00:58:16.087 --> 00:58:27.247 My sister, this was when she was in college, went to work with a daycare, and they wanted her to sign a non-compete that she'd never go work for another daycare. 00:58:28.375 --> 00:58:30.715 You know, so even at 20, she was like, 00:58:31.238 --> 00:58:43.838 I might signing that. You know, so you can see at that level, that's a very egregious. You've gotta. Yeah. Hourly wage person. You know, non-enforceable. So, here's what's interesting on these estimates. 00:58:44.687 --> 00:58:54.827 The FTC says that putting this band in place is going to mean more innovation an average of 17 1000 to 29 1000 more patents each year 00:58:55.094 --> 00:59:03.314 I don't know how they're coming up with that but I guess they think individuals will be more likely to pursue a patent but yet, 00:59:04.348 --> 00:59:09.748 Well, that's interesting. I don't know because if you're employed to date, 00:59:10.281 --> 00:59:13.881 We don't we aren't patting on your shopping for both of us, 00:59:15.727 --> 00:59:27.127 But typically the inventor and the employer are listed on the patent application so not sure how that number anticipating would be people leaving their employment and then 00:59:27.484 --> 00:59:28.924 Patenting something they, 00:59:29.410 --> 00:59:39.190 You know, in their own name, as an independent, but if you, that's where the NBA is coming also. If you develop something partly while you are working for a company. 00:59:40.330 --> 00:59:48.850 And then you use it for your own benefit. Isn't that a violation of NBA languages? What happened? But interesting. It also says two. Seven increase in new. 00:59:49.053 --> 01:00:01.173 Formation of startups and this probably ties into exactly what you're saying. The person says, gosh, I'm going to leave and go start this new business because this is my idea. And I'm going to implement it. 01:00:02.061 --> 01:00:09.241 This amazing skill set that I now I can use as a consultant privately and and provide the same thing to 12 different 01:00:09.570 --> 01:00:17.310 Companies. Hi, you're earnings. This was interesting. Typical workers earned $524. 01:00:17.866 --> 01:00:23.306 More annually. I can see I can see that, 01:00:23.838 --> 01:00:31.338 With greater mobility of employees because now I can go work for competitor the company wants to keep me there maybe willing to pay me more, 01:00:32.264 --> 01:00:40.184 That's true. That's true. And it's it's interesting. You and I talked about before we added this to the rundown. So we want to give it hat tip to, 01:00:40.709 --> 01:00:46.889 Michael Plazer, right? Michael's the one that kind of sentences. I think he goes. Thank you, Michael. Sorry. Yeah. 01:00:47.991 --> 01:00:55.371 Hey how does this kind of apply and and I think it really is just good information for us to have is we advise. 01:00:56.713 --> 01:01:04.733 Individuals, small businesses, larger businesses who as you mentioned, this has a retroactive effect. Yeah. That 01:01:04.970 --> 01:01:10.790 People may be subject to one of these that it's going to go away or the business has maybe operating 01:01:11.163 --> 01:01:20.883 With the top that these are going to be enforceable forever or at least for the term that was drafted in the original signed document and they only need to be given them a heads up that's 01:01:21.012 --> 01:01:26.592 Not going to be the case any longer. Yeah. Disconnecting them with employment law attorneys that can advise them. 01:01:26.836 --> 01:01:32.296 Appropriately on what to do next. Yeah and and you know it's important to remember that even though California seems to be the the 01:01:32.381 --> 01:01:41.741 The hub or at least a hub of the entertainment industry. There are plenty of entertainment businesses outside the the state of California and Texas. Where, 01:01:42.185 --> 01:01:48.845 They have used non-disclosures with writers and designers and computer programmers and folks like that that that 01:01:49.144 --> 01:01:56.224 Had that non-compete language in their contract. So, now, they're those folks are a little more mobile in their employment. 01:01:56.697 --> 01:02:05.877 Prospects and can start competing companies and things. So, I don't know if it's going to really change. I mean, being in California, I've always sort of taken the view that not competes or dis favored and I'm not going to 01:02:06.005 --> 01:02:14.345 Go for it. Although I haven't a few instances just said, well, you live in California, you're working in California. They're never going to be able to enforce that. 01:02:14.620 --> 01:02:17.680 Now it's nice to be able to say that sort of about it more global level 01:02:17.987 --> 01:02:24.767 Right in along my lines of it's a 10 year non compete and you're at this level. Hey, it's not going to happen. You know. 01:02:24.973 --> 01:02:34.693 It's just going to be unenforceable. So, back to my political pessimism for a moment. I do have to ask does this FTC rule survive if 01:02:34.758 --> 01:02:40.638 Mister Trump becomes the president again or does that new administration come in and say no no no no put that away 01:02:40.961 --> 01:02:50.861 Take that away Can they undo the regulations I don't know the answer that maybe thinking along the lines of if Mister Trump 01:02:51.061 --> 01:02:53.701 It becomes President Trump once again that he's, 01:02:55.643 --> 01:02:58.223 Lean towards avoiding the business world. 01:03:01.123 --> 01:03:06.623 Right, is this not been official to businesses and as such we need to remove it. Yeah. I don't know. 01:03:06.806 --> 01:03:08.186 Yeah, be interesting to watch. 01:03:17.117 --> 01:03:19.977 Hey while I often wish I 01:03:20.094 --> 01:03:21.534 I've been a child of this 01:03:21.561 --> 01:03:35.901 Date. A teenager of the 60s. There's a part of me that's kind of glad I wasn't a teenager of the 60s. Well, if you take a look at what's going on around college campuses right now, it's looking a little bit like the 60s, isn't it? 01:03:36.289 --> 01:03:45.769 A little bit like us reading. Yeah, I've been comparing it to. I wasn't old enough to understand all of that happening around the Vietnam War and now, 01:03:46.317 --> 01:03:55.797 I'm trying to wrap my head around what's happening right now so yeah it'd be I need to have this conversation with someone who was a college student, 01:03:56.832 --> 01:04:07.152 Yeah. Well, I was talking to my students earlier this weekend. We're at a very small arts college. You know, the very small student body and they're not having these conversations. They're just 01:04:07.383 --> 01:04:14.283 But now I've got more to think about than this. I, you know, but then, at UCLA yesterday, we had violence and yeah, you know, so, 01:04:15.250 --> 01:04:20.110 It's it's a little bit like I have had this conversation with my mother during age. 01:04:21.012 --> 01:04:23.472 She adds more children at home during the Vietnam war. 01:04:25.892 --> 01:04:30.492 Yeah. She's like, I was so busy raising my kids. 01:04:31.653 --> 01:04:34.353 In living, you know, that life that, 01:04:35.119 --> 01:04:49.219 She just wasn't as aware and tuned in obviously at the university so much being more available on Facebook. But again I think it is the best comparison analogy we have is to what's happened on campus then to what's happening now. Yeah. 01:04:49.414 --> 01:04:53.614 And the civil rights movement. In the civil rights movement, obviously, yes. Yes. 01:04:53.789 --> 01:04:58.289 Anyway. Well, man. Wait, wait, wait, wait, wait, wait, cover, what's up, thanks? 01:04:59.844 --> 01:05:05.584 Yeah. Anyway, that is it for our episode this month. Entertainable update. 01:05:05.888 --> 01:05:12.548 Is again we want to say thank you to all of you our listeners for spending your time with us and to our sponsor JD Supra. 01:05:13.612 --> 01:05:20.092 The leading platform and professional services content marketing to help lawyers turn their expertise into networking opportunities 01:05:20.490 --> 01:05:27.180 Media visibility and new business go to find more information about JD Super by visiting a resources. 01:05:27.180 --> 01:05:36.030 JD Supra. Com and of course if you have feedback for us and we welcome it thanks again to Mike Mickey Glazer sorry 01:05:36.118 --> 01:05:43.498 No it's Michael but I think he goes by Mickey so we're both right and you know we love it if you would share your 01:05:43.779 --> 01:05:55.479 Your thoughts with us. We have a voice widget. If you would like to hear your voice on the show, you can go to entertainment law update. Com and just click on the little red tab over on the right side. I think it is. Or you can send us email 01:05:55.482 --> 01:06:00.162 Entertainment law update@Gmail. Com you can find us on, 01:06:01.222 --> 01:06:10.042 The ex service known as Twitter now known as X that's a end law update is our handle there and Tamara how can folks reach you directly 01:06:10.471 --> 01:06:22.471 Yeah. You can find me. My website T Ben@Law. Com or create Protect. Com both of those will take you to the same spot. So if we've been doing 15 years of podcasting 01:06:22.606 --> 01:06:26.266 Then I think I probably got 17 years of blogging. 01:06:26.304 --> 01:06:35.524 I so just think you create project takes you to that so social media most sites I'm at Tamara Benette. 01:06:38.943 --> 01:06:45.403 Thank you so much for always including me and for a great 15 years. As we've 01:06:45.589 --> 01:06:53.089 We have moved and adjusted with the technology and the times and. Yes, indeed. Hey, pulling me into the 2024 with video 01:06:53.430 --> 01:07:02.490 Yeah, and yeah, for those of you who are listening on audio, you now can also find us on YouTube. We are a YouTube video podcast. You can 01:07:02.801 --> 01:07:05.741 Head on over there and find us. It's under my 01:07:06.015 --> 01:07:16.695 Personal social YouTube account G firemark but the the playlist is there as entertainment update and we'd love it if you check that out. You can find me. Bro, I was just going to say hey. 01:07:17.393 --> 01:07:27.113 For the last 6 months or both audio and video depending on what we put out that center available at JD Super for your for your pleasure of viewing and listening 01:07:27.404 --> 01:07:36.524 Yeah and so I'm G firemark on most social media. My website is Firemark. Com. The email address is G firemark@Firemark. 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