With an A-list star like Brad Pitt, and a well-known and respected Director, the film seemed a sure-thing to some, so this surprising decision, made by Columbia chief Amy Pascal, has had many Hollywood insiders asking “why?”

The answers may provide valuable insight  into how studios will make greenlighting decisions in the coming months and years, as the economic climate for the entertainment industry and the world as a whole, undergoes major shifts.

The stated reason for the shelving of Moneyball is the studio-chief’s receipt of a final draft screenplay that is reportedly very different from the script she’d originally supported.     Apparently, director Soderbergh’s vision of the film had departed wildly in recent weeks from the studio-head’s.

The baseball-themed script by Oscar winner Steve Zaillian was reportedly rewritten at Soderbergh’s direction to include real-people portraying themselves,  and to eliminate material that  hadn’t happened in real-life, leaving a story that studio executives felt lacked emotion and punch.

The limited turnaround gave Soderbergh a short window of time in which to set-up the project at another studio, but with a rumored budget of $56 Million, it’ll be a hard-sell, especially if Pitt’s deal is, as reported, a $20 Million pay-or-play.  The studio could also keep the picture in development, finding another director to help the project, but the delays may cost it the projects’ A-list star.

So, what lessons can producers, writers, and directors take away from this dramatic turn of events?

• If you’re making a studio picture, don’t expect their full support when you make major revisions at the eleventh-hour.
• An A-List star and a respected director do NOT guarantee  a green light.  The script still matters!
• The Golden Rule applies:  He who has the gold, makes the rules.  Experienced financiers, whether in the studios or the independent world, won’t invest in “trust me”.  They want to see all of the key elements in place, ready to go.  They don’t like surprises.
• Ego and Hubris, contrary to popular thinking, have no place in the business side of show-business.
• Knowing when to say “no” to a project is important… even if it looks like a freight train coming right at you.

More about pay-or-play clauses and turnaround deals  in a future post.

In Cadkin v. Loose, 2009 WL 1813263 (9th Cir, 2009), the Plaintiff, after extensive settlement negotiations,  an amended complaint, and other legal maneuvering,  voluntarily dismissed its complaint.  The Defendant then moved for an award of Attorney’s fees pursuant to Section 505 of the Copyright Act (17 U.S.C. 505) which authorizes a court to award such fees to a “prevailing party”.

The District Court ruled that the Defendant was, in fact, the prevailing party, even though the complaint was dismissed without prejudice, leaving the Plaintiff free to re-file the case.  The Court relied on the 1941 case of Corcoran v Columbia Broadcasting System, Inc.,  to support this ruling.

The Plaintiff appealed, and the 9th Circuit ruled in its favor, finding that the Corcoran case could no longer be relied upon as a valid precedent, referencing a U.S. Supreme Court ruling holding that “a dismissal without prejudice does not alter the legal relationship of the parties”, and thus does not enttitle the defendant to an award of attorney’s fees. (see Buckhannon Bd. & Care Home v. W. Va. Dep’t of Health & Human Res. 532 U.S. 598, 604, 121 S. Ct. 1835, 149 L. Ed. 2d 855 (2001).  Even though  the statute in the Buckahannon case deals with subject matter different from copyright, the fee-shifting provisions are comparable, the 9th Circuit held.

Since the plaintiffs, following their voluntary dismissal, were free to re-file their case,  the defendants were not prevailing parties, and thus not entitled to the award of attorney’s fees.

What this means, then, is that a for a party to be deemed to have ‘prevailed’ in  lawsuit, their relationship must have been materially changed by a court ruling.

Earlier this week,  BMI filed a suit against a restaurant called “Pianos”  where the song “Talk Dirty To Me” by the band Poison  (among other songs) proved a toxic brew.  The suit filed by BMI and a number of copyright holders seeks an injunction, attorneys fees, and statutory damages, which can amount to as much as $150,000 per infringement.

The bottom line is this:  If you’re operating a bar or restaurant,  larger than 3750 square feet, and/or playing music through a system of more than 6 loudspeakers, you need licenses from these Performing Rights Organizations, or you could find yourself on the receiving end of one of these lawsuits.

If you’re  a bar or restaurant owner and you don’t already have your license(s)., you may wish to consult your entertainment lawyer, to determine what’s required.  Of course if you’re contacted by one of these organizations, consult your attorney right away… BEFORE you respond.

With the current backlog of registrations in the Copyright office, it’s especially important to get your works into the que for registration as soon as possible. The agency processes applications on a first-in, first-out basis.

Here, however, is yet another good reason to file your copyright registration now. It’ll save you money. According to this report on the U.S. Copyright Office Website, On August 1st, many copyright office fees will increase.

Copyright registration is relatively simple, but you may need help from an experienced entertainment- or intellectual property attorney for more complex applications, such as those involving multiple works registered as a ‘folio’, or for musical compositions embodied in recordings (essentially two different works).

Even after the fee increases, copyright registration is still one of the most affordable ways an artist or author can protect herself against the losses that can be suffered from unauthorized copying of her work.

Now’s the time folks. Call me if you need advice about copyright registration or any other intellectual property protection issue.

The message paints a bleak picture for an industry following two major labor disturbances in the past two years, and suggests that work for actors is less plentiful than ever before, with film actors taking the few television starring jobs available, and top-tier TV actors taking co-star, guest star and less prestigious roles.

What that leaves for aspiring actors, and the thousands of established actors who’ve worked only occasionally Jones warns, is even fewer opportunities.

Sadly, this situation “trickles down” to all entertainment industry workers, including writers, directors, crew, and even professionals like accountants, lawyers and the like.

The glimmer of good news is that this presents terrific opportunities for independent filmmakers, provided they’ve got courageous investors on board. Today’s indie has a better-than-ever chance of getting name talent to work for affordable fees, given a good script and an attractive role.

In my view, if our industry is to rebound from the WGA strike, the SAG almost-strike, and the troubled economy, we’ll all need to tighten our belts a bit… but the time jump into new production. Let’s get folks back to work!

A vocal majority on the panel, and in the audience seemed to take the position that the only solution is to require Internet Service Providers to charge their users a monthly digital media consumption fee of some sort. This, it seems, part of the idea behind CHORUSS, a pilot program at a few universities, which requires students to opt-in by paying a monthly fee, that the University will then pass along to content owners.

For me, this solution is plagued with problems. First, in all likelihood, if implemented on a broad scale, it will be an automatic charge we all pay. Those who never file-share or download media content will be subsidizing the users who DO download, especially those who take more than their fair share. Second, this looks to the wrong party for payment. Isn’t asking ISPs to pay music royalties when songs pass through their networks similar to asking UPS to pay book authors’ royalties when they deliver books bought via Amazon.com?

Now, of course no solution to this problem is perfect, but it’s my sincere hope that the content community and the tech communities can find a better solution. Unfortunately, other solutions discussed involved asking ISPs to log every bit of data passing through every user’s IP address… which raises tremendous privacy concerns.

One interesting view was that espoused by a manager/consultant on the panel who seemed to suggest that we just need to accept that file-sharing is here, and that many (but not all) consumers are getting (music) for free… so we’d better find something else to sell them. (Sounds like a ‘loss-leader’ approach). ‘Give away the recordings of your songs… develop a fan base, then sell ‘em concert tickets and T-shirts’… seemed to be his notion.

Clearly, there’s no good solution, but the prevailing view of the panel is that something must be done. If artists such as songwriters can no longer receive fair compensation for their efforts.. they’ll find something else to do… and society will be the worse for it.

Entertainment Law Update Podcast

Episode 2 of the Entertainment Law Update Podcast, hosted by yours truly, along with Tamera Bennett is now online .

In this episode, Tamera and I round up the latest entertainment law news, including:

• Beverly Hills Bar Association’s Entertainment Lawyer of the Year
• Pres. Obama’s nominee for Supreme Court
• Copyright Office Backlogs
• Constitutional issues with the Register of Copyrights
• Sports Leagues losing ground against Fantasy Sports purveyors
• Brainard v. Vassar’s useful discussion of “Access” in copyright infringement analysis
• Warner Music’s DMCA Takedown of Lawrence Lessig video
• Woody Allen and American Apparel settle right of publicity case
• Steinbeck heirs lose bid for Supreme Court review
• SAG settles claims arising from 2007-08 WGA strike
• Tanenbaum’s fair use argument in RIAA case.

CLE Credit for attorneys who listen to the podcast is pending approval in California and Texas. Attorneys from other states should check the rules for out-of-state programs. We’ll add more States as demand arises.

The Details:

Los Angeles County Bar Association’s Second Annual Small Firm and Solo Practitioner Conference, June 24-25.

Social Networking For Lawyers: A Roadmap to Success
Thursday, June 25. 9:15 – 10:30 a.m.

In this interactive session we will explore the buzz surrounding social networking and social media tools and how solo and small firms practitioners can effectively employ them to communicate with current clients; control your messaging as you reach out to new clients and the media; and to meet, network and collaborate with colleagues.

Our panel of solo and small firm attorneys will discuss their experiences with blogging as a social media tool, and we will spotlight several social networking applications, including Twitter, Facebook, and LinkedIn. By calling upon their personal experiences, our panel will highlight best practices for how you can incorporate these and other Web 2.0 applications into your business development, PR and networking activities.

You don’t want to miss this event!

Ben Sheffner of the Copyrights and Campaigns blog points out that before her appointment to the Federal Bench by then President George H.W. Bush, Sotomayor worked as a litigator for boutique New York law firm Pavia & Harcourt, where she focused on intellectual property and international matters for the firm’s corporate clients, including rights owners.

Does this indicate that big-media can expect a friend in Justice Sotomayor, if she’s confirmed? Time will tell.

Meanwhile, we can all ruminate over this list of her opinions as a Judge, compiled by the New York Times

Questions about the validity of U.S. Copyright Registrations may require dismissal of every copyright suit!?

In most U.S. District Courts, copyright registration is a requirement before a plaintiff can file an infringement suit. Recently, however, some legal commentators have raised a terrifying spectre that could (arguably) result in the dismissal of every copyright infringement action filed.

Under the Constitution’s “appointments clause”, only the President, Courts or a cabinet level department head can appoint the “inferior officers” of the goverment.  Trouble is, the Register of Copyrights , such an officer, is appointed by the Librarian of Congress.  (Not a cabinet-level appointee) (Cabinet level appointees are carefully vetted and ultimately confirmed by the Senate, etc.).

So, it seems, at least to some, that the appointments made  by the Librarian of Congress are invalid because they violate the appointments clause of the constitution.  This argument is currently before the courts in a major battle challenging the appointment of the Copyright Royalty Board (also by the Librarian of Congress)

If the Register of Copyrights holds the office in violation of the constitution, then all of her ministerial acts (such as registration of millions of copyrights each year), are invalid, and since valid registration is a jurisdictional requirement for the Courts to hear copyright cases, such cases must therefore be dismissed.

Wow.

The Courts will soon rule on the Copyright Royalty Board case, which may provide more answers… or more questions.

Hat Tip to Shourin Sen of the Exclusive Rights blog, and Ben Sheffner at Copyrights & Campaigns