Thursday, June 30, 2005

Supremes Rule on Grokster, SAG Indie Announces Changes

June 30, 2005

In this newsletter:


The United States Supreme Court released its long anticipated decision in the MGM v. Grokster case debating the question of whether companies in the business of creating file-sharing software can be held liable for the infringing acts of their users. The Supreme Court, in a unanimous decision, held that they could, overturning the general "no secondary liability" principle established in the well-known 1984 "Betamax" case.

Justice Souter wrote "We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringements by third parties." It is important to note Souter's use of the word "device" rather than of simply saying "software." This holding can technically and broadly be extended to apply to manufacturers of any type of device, including possibly the Ipod, TiVo, Google, etc., that consumers could possibly use to facilitate their own copyright infringing activities.

Where increased litigation is likely to stem from, is how will a company's "intent" be defined and determined by the courts? When does a company intend for its product to be used for the purposes of copyright infringement, and what steps will a company have to take to safely defend itself against such claims? Technology companies and their lawyers will potentially need to employ a wide range of safeguarding tactics, varying from simple disclaimers to more extreme measures like pledging to actively find and prosecute infringing consumers.

Some organizations, such as the Electronic Freedom Foundation (EFF), worry that the ruling will result in harm to American technology companies. American companies will have to spend increased money on safeguards and litigation and possibly hold back on technological innovation, while foreign competitors will not have to sensor their developing technologies for fear of liability. It remains to be seen if such fears will manifest. In the short term, music and entertainment companies will be celebrating the Court's decision as a victory and view the ruling as a step towards the needed increased protection of copyright and other intellectual property rights.

Metro-Gold-Mayer Studios, Inc. v. Grokster, Ltd., S.Ct., 2005 WL 1499402 U.S. 2005.
The complete Supreme Court Opinion can be found here.


Independent filmmakers are getting good news from SAG. Effective July 1, 2005, SAG's new and revised low budget agreements will make it easier to make films with SAG actors. In addition, the SAG Indie Web site has sample contracts and initial paperwork for the signatory process available for download.

A summary of the new and revised agreements can be found at


Mark Litwak & Associates grants newsletter recipients permission to copy and distribute this newsletter and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice.

DISCLAIMER: While we are careful in preparing this newsletter, readers should consult with a lawyer before relying on any information. Case law and statutes are subject to change, and may not apply in all jurisdictions.

Copyright 2005, Mark LitwakAny source

Wednesday, June 29, 2005

No change in subsidy level since mid 1990s

There has been little change in the level of producer support to farmers in developed countries since the mid 1990s, according to the OECD. It is below the level of 37 per cent of farm receipts recorded in the mid 1980s, but the current level of 30 per cent had already been reached in the mid 1990s. Farmers across the OECD countries received €226 billion in subsidies in 2004, a massive amount which could surely be better used.

The OECD notes the shift towards new policy measures that are not directly linked with production. Nevertheless, 'While this shift may well continue over the coming years, production-linked measures still dominate producer support in most countries, encouraging output, distorting trade, and contributing to lower world prices of agricultural commodities.' The OECD also notes, 'Despite the move away from production-linked support, there is only a very modest move to policies targeted to clearly defined objectives and beneficiaries.'

At 34 per cent the level of support in the EU was above the OECD average of 30 per cent. This is an improvement on the 41 per cent level recorded in 1986-8.

Rice (75 per cent), sugar (58 per cent) and milk (38 per cent) remain the most highly supported commodities across the OECD. The largest decreases in both absolute and relative terms have occurred in grains apart from rice, sheepmeat and eggs and milk (where support was measured at 61 per cent in 1986-88).

The OECD emphasises the need for further reform. 'Government intervention continues to be significant, creating important spill-over effects on production, trade and the environment. Although some progress has been made since 1986-88, the current level, composition and spread in support levels across commodities in OECD countries still create distortions that demand further attention from policy makers.' The OECD notes that over 60 per cent of support to producers continues to be provided through policies generating higher producer prices.

OECD governments are increasingly focusing on environmental performance, rural development, animal welfare and food safety and quality issues, what is known in the EU as 'multifunctionality'. However, 'very little support is being channelled to these areas compared to the level linked to production.' Much remains to be done.Any source

Wednesday, June 22, 2005

Nevada Supreme Court Overturns State "Son of Sam" Law

June 22, 2005

In this newsletter:


The original "Son of Sam" law was enacted in 1977 in New York to ensure that the infamous serial killer David Berkowitz, known as the "Son of Sam," would not profit from any future memoirs he might publish from prison regarding his murders. Several other states, including Nevada, followed New York's lead and implemented their own "Son of Sam" laws, regardless of the fact that the United States Supreme Court struck down New York's law as unconstitutional. Generally, such laws provide that all proceeds that a felon receives from published materials about his offense must be turned over to his victim's family.

Jimmy Lerner is a Nevada felon, convicted for the murder of Mark Slavin. Lerner wrote a book in prison, "You Got Nothing Coming, Notes From a Prison Fish," which describes both his life experiences in prison as well as Slavin's murder. Pursuant to the Nevada "Son of Sam" law, Donna Seres, the victim's sister, sued Lerner for all the profits from his book. The Nevada Supreme Court ruled against Seres and confirmed what the lower courts had held, that the "Son of Sam" law failed to satisfy the strict scrutiny test that the First Amendment required be applied to it, and thus that the law was unconstitutional.

The First Amendment requires that all content-based restrictive legislation must satisfy strict scrutiny. In other words the law must address a compelling state interest and must be narrowly tailored to achieve that interest. While the law did serve Nevada's compelling state interest in "the compensation of crime victims and the prevention of direct profiteering from criminal misconduct," the Nevada Supreme Court held that the law was not narrowly tailored enough to be upheld.

Under the construction of the law, victims would be able to recover profits from felons' works that merely mentioned their crimes but were virtually unrelated to them, such as memoirs about prison life. The Nevada Supreme Court also found that it would be impractical to try and measure what percentage of the profits were aptly related to the crime and thus potentially recoverable by the victim's family. As well, the Nevada Supreme Court found that the law was broad and over-inclusive as it applied to all those who had "committed" a felony rather than only those persons actually "convicted" of such a felony.

Seres v. Lerner, 102 P.3d 91, 2004 Nev.LEXIS 12733 (Nev. 2004).


Mark Litwak & Associates grants newsletter recipients permission to copy and distribute this newsletter and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice.

DISCLAIMER: While we are careful in preparing this newsletter, readers should consult with a lawyer before relying on any information. Case law and statutes are subject to change, and may not apply in all jurisdictions.

Copyright 2005, Mark LitwakAny source

Sugar reform proposals

The European Commission's proposals on sugar reform announced on 22nd June are no surprise to those who have been following this debate. What is most interesting, given the recent background of debates on the cost of the CAP, is any detailed discussion of the cost implications.

It is admitted that direct aid compensation for farmers will cosr €1,543bn a year and that the restructuring fund is stated to be be €4.225bn over three years. The Commission claims that these costs will be mainly offset by a substantial reduction in export fund expenditure and abolition of the refining aid. Even given that factory closure aids and a top up aid for farmers who no longer have a factory to sell their beet to will be paid for by a levy on quota holders, it seems likely that earlier cost estimates of €1.5bn in the second year of the programme will still broadly apply.

As expected, there will be no trading of quota across national boundaries as the existence of an internal market would imply, although limited 'reallocations' (not trading) will be permitted by national governments. An opportunity to use a market mechanism to achieve an efficient readjustment is thereby lost, but the political cost would probably be too high given that marginal production is going to be eliminated anyway - meaning that production will largely be concentrated in Northern Europe with Poland the only major East European producer.

The main elements of the proposal are:
* A 39 per cent cut in the EU support price over two years from 2006-7
* Compensation for farmers for 60% of the cut price through the Single Farm Payment
* Replacement of intervention buying by a safety net system using private storage
* Payments to encourage factory closures

Farm commissioner Mariann Fischer Boel has said that she is aware of the bitterness of the battle ahead. She is likely to be opposed by an unholy coalition of NGOs like Oxfam worried about the impact on LDCs and member states who stand to lose their sugar industries. They will be backed up by the large scale industrial farmers who grow sugar beet and the oligopolistic sugar companies who refine it.

It would seem that the reform proposals cannot succeed but something has to be done by the start of the 2006-7 marketing year to meet the demands of the WTO's Appellate Body. In a fully liberalised market, the EU would probably not be growing sugar beet at all.Any source

Tuesday, June 14, 2005

Congress Announces Family Entertainment and Copyright Act of 2005

June 14, 2005

In this newsletter:


Congress' recent amendments to the Federal Copyright Act will result in three significant changes: authorizing the "sanitization" of movies for private viewing; making the camcording of movies in theatres a federal crime; and allowing certain works vulnerable to copyright infringement special "pre-registration" rights and thus access to previously unavailable statutory remedies.

The Family Movie Act of 2005
This Act arose from the litigation sparked by the development of several family oriented companies that created technology to sanitize violence and sex from films for private home viewing. ClearPlay is one such company. Its sanitization technology consists of software that does not actually alter or reproduce the films, but rather instructs the user's DVD player to fast-forward or mute through sensitive scenes. ClearPlay's competitor, Clean Flicks actually makes an edited copy of the original film.

The new Act will allow for ClearPlay types of sanitation technologies, but not for Clean Flicks' methods. The Act reads that no copyright infringement occurs when "limited portions of audio or video content of a motion picture" are made "imperceptible" for home viewing, but only so long as "no fixed copy of the altered version" is created. Additionally the Act amends the Trademark Act to eliminate any potential liability under Trademark law, so long as viewers are notified that they are watching an altered version of the film.

The Artists' Rights and Theft Prevention Act of 2005 (ART Act)
It's been estimated that the movie industry loses 3.5 billion annually due to hard-goods piracy, one source of which is the camcording of first-run movies in theatres and conversion into DVD's or online downloads. The ART Act notes that in making camcording a federal crime, the Act complements rather than preempts existing state laws. Thus the Act will serve to empower theatre personnel with the authority to detain and question individuals whom they reasonably believe are camcording a movie, and to immunize theatres against potential suits that might arise from the suspect's detention.

Pre-Registration Rights
While registration is not required for copyright protection, it does give registrants valuable statutory remedies such as attorney's fees and statutory damages so long as registration has occurred prior to the infringement. Typically this works well as most works are not vulnerable to infringement prior to their public release. However, Congress has acknowledged that some works are more vulnerable to pre-release infringement and that the Copyright Office may give such works "pre-registration" status. Such status will allow a copyright owner access to statutory remedies even if infringement occurs prior to its public release and actual registration.

Family Entertainment and Copyright Act of 2005, S.167 (109th Cong., 1st Sess. 2005), available at as a PDF file.


Congratulations to our client, Sam Adelman. His film, "Screen Door Jesus" will be distributed domestically by Indican Pictures.

"Screen Door Jesus," a story about the mysterious appearance of an image of Jesus on a screen door, won accolades at the Hamptons and South by Southwest film festivals in 2003.

The Hollywood Reporter has the scoop.

The official movie site is at


Our client, Brandon Cole, received the Panasonic Digital Filmmaker's Grant to shoot his motion picture, "Bristol Boys." Panasonic conducted an interview with Brandon, which is available on Panasonic's website.


Confused about movie titles? "Slate" magazine has published an article about title confusion and quotes Mark.

SAG Indie has published an in-depth interview with Mark. It's available at


Mark Litwak & Associates grants newsletter recipients permission to copy and distribute this newsletter and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice.

DISCLAIMER: While we are careful in preparing this newsletter, readers should consult with a lawyer before relying on any information. Case law and statutes are subject to change, and may not apply in all jurisdictions.

Copyright 2005, Mark LitwakAny source

Monday, June 13, 2005

CAP at heart of budget and rebate battle

The CAP is at the heart of the battle over the European budget ('financial perspectives') for 2007-13 and the British rebate. Britain is insisting that its rebate is not negotiable if there are no further changes in the CAP, arguing that the overall structure of the budget is out of line with the needs of Europe in the 21st century.

However, President Chirac and Chancellor Schroeder are adamant that their 2002 deal on CAP pillar 1 subsidies, which would largely protect them until 2013, is not on the table. With France taking not far short of a quarter of CAP subsidies, President Chirac has insisted, 'We cannot accept a reduction of direct aid to French farmers.'

Current presidency country Luxembourg has suggested that spending levels should be set at 1.06 per cent of gross national income, well below the Commission's proposal of 1.24 per cent for commitments but almost halfway between their 1.14 per cent figure for payments and the 1 per cent figure favoured by the UK, Germany and France. What looks vulnerable to any spending cut is not Pillar 1, but the Pillar 2 sums designed to encourage a more vigorous and diverse rural economy. Under the Luxembourg proposals, the sum for rural development would be cut from €88.7bn to €73-75bn over seven years.

While the UK has said that the principle of its rebate is non-negotiable, it has not said the same about capping its level or changing the formula. However, that would almost certainly require some quid pro quo on the CAP. Although Britain is not as totally isolated on CAP reform as it is on the rebate, its support is largely limited to the 'usual suspects', the reform countries of Northern Europe (Denmark, the Netherlands, Sweden) plus Austria.

Expect some fireworks ahead and a largely unchanged CAP.Any source

Sunday, June 5, 2005

Fischer Boel's fears for CAP

Commissioner Mariann Fischer Boel fears that the CAP might start to unravel. The cause of her worries is the current debate over the EU's spending plans for 2007-13. This is going to be more difficult to resolve in the atmosphere of political crisis following the French and Dutch referendums.

Budget Commissioner Dalia Grybauskaité has blamed the CAP for impeding the EU's goal of becoming more competitive. Fischer Boel argues that the CAP share of the budget could be reduced from 45% to 33% by 2018. Cuts of a further 9% could be achieved if Romania and Bulgaria are brought within the limit on farm spending agreed in 2002. Fischer Boel regrets that a proposal by Franz Fischler to place a limit of €300,000 on the amount a single landowner may draw down was rejected by the UK and Germany, but it would be difficult to take on the EU's largest member states.

Fischer Boel has articulated a new vision for the European model of agriculture 'based on a new and younger agriculture focusing on speciality and quality products, linking up with agricultural and commercial schools, using the internet to penetrate the market for direct delivery and welcoming the urban dweller in their thriving rural environment for rest and adventure.' But all this depends on rural development funds and they are the most vulnerable part of the EU farm budget.

Meanwhile traditional conceptions of the CAP die hard. Writing in European Voice Irish MEP Seán Ó Neachtain argues that 'small farm holdings are still an integral part of our culture and our way of life ... I most certainly don't want to see our family farms, the very backbone of our societies, being replaced with industrial holdings that would be more like factories than farms.'

The question is, do such sentimental versions of rurality really help the rural economy in the 21st century? The European Union is a highly urbanised society and farm policy needs to recognise that fact, allowing the rural economy to develop new services that meet the needs of a modern urban population.Any source