Spring 2010

Transcription

Spring 2010

M/E INSIGHTS
TECHNOLOGY ISSUE
THE ASSOCIATION OF MEDIA
& ENTERTANMENT COUNSEL
SPRING 2010
CONTENT
03 Letter from the guest editor
Gigi Johnson
The Association of Media
and Entertainment Counsel
5225 Wilshire Blvd., Suite 417
Los Angeles, CA 90036
p: 310.432.0507
f: 310.277.1980
www.theamec.com
[email protected]
04 breaking the mold:
beyer takes entertainment online
Jeff Beyer
Leadership Advisory Board
Andy Levin, Chair, Clear Channel
Communications, Inc.
Julie Xanders, West Coast Media
Navine Karim, BET Networks
Charles Stanford, Crown Media Holdings, Inc.
Keith Kauffman, Clear Channel Radio
Michael Rowles, Live Nation
Gigi Birchfield, Major, Lindsey & Africa
Alexsondra S. Fixmer, The Tennis Channel, Inc.
Kimberly Deck, Jams ADR
Sanjay Sood, UCLA Anderson School of Management
Karen Magid, Paramount Pictures
Guest Editor
Gigi Johnson
[email protected]
Editor in Chief
Jody Simon
[email protected]
Law Firm Advisory Board
Alan L. Friel, Chair, Wildman, Harrold, Allen
& Dixon LLP
Russell G. Weiss, Chair Emeritus, Morrison
& Foerster LLP
Judith C. Dornstein, Law Offices of Judith C.
Dornstein, Inc.
Louis A. Craco, Allegaert Berger & Vogel LLP
Richard A. Beyman, Franklin, Weinrib, Rudell & Vassallo
Maria C. Rodriguez, Winston & Strawn, LLP
Stephen H. Kay, Hogan & Hartson
Rami S. Yanni, Greenberg Glusker
Jordan K. Yospe, Manatt, Phelps & Phillips LLP
Richard Wirthlin, Latham & Watkins LLP
Richard S. Grant, McGuireWoods LLP
Managing Editor
Rick Smith
[email protected]
Design Editor
Elena Kapincheva
[email protected]
For Membership
AND SPONSORSHIP
Opportunities,
contact
Jessica Kantor
[email protected]
Emerging Leaders Board
Christian Vance, Chair, Fox Television Studios
Drew Wheeler, Vice Chair, Attorney at Law
Alicia Anderson, Peter, Rubin & Simon, LLP
Jesse Brody, Wildman, Harrold, Allen & Dixon LLP
Allan Edmiston, Loeb & Loeb LLP
Lindsay Terris Feldman, Fox Television Studios
Alex Kargher, Glaser, Weil, Fink, Jacobs,
Howard & Shapiro LLP
Theane Evangelis Kapur, Gibson, Dunn & Crutcher LLP
Joshua Lockman, Latham & Watkins LLP
Joanna Mamey, Screen Actors’ Guild
Erica Stambler, Attorney at Law
Caroline Jasmine Vranca, Yari Film Group
For Advertising
Opportunities
and reprint
information,
contact
Emily Coppel
[email protected]
Executive Director
Jessica Kantor
Copyright © The Association of Media
& Entertainment Counsel 2010
All rights reserved
06 technology, employees at work and
employment litigation
Maria C. Rodriguez
10 a conversation with
blair westlake
David Cuddy
There is no longer a time when you can be
in the entertainment and media business
and say that “technology” is someone else’s
concern. Digital media can’t just be a department in some far reaches of an organization
that fights for recognition and budget. It calls
out not just from marketing, but from how we
create content, how we distribute it, what the
eventual markets will be, and how the user
enjoys it, adds to it, and recommends it.
13 will the eu's treatment of google's
adwords be a harbinger for the u.s.?
Rami Yanni & Jerod Partin
16 The scope of License:
pitfalls and practice points for
technology licenses
David Blood & Joshua Lockman
21 Betting on the driver of
an accelerating bus:
in google we trust? or apple? or bing?
Gigi Johnson
28 multiplatform video future depends
on effective content tracking and
measurement solutions, such as
watermarking
Peter Winkler
Technology has defined our economics and
enjoyment of entertainment since Edison’s
first images flickered on a screen. Through
it all—records, radio, television, cable, satellite, and DVD—the ancient storytelling art
finds a way to retell itself through each new
media. The advent of digital media, however,
is reconfiguring the media ecosystem. We’ve
moved into the long-promised (or long-warned)
realm of convergence: reading news, writing
letters, talking to friends, and watching video
can now be connected seamlessly on a single
device. We have perhaps moved past that
already and are facing divergence: the ability to watch anything anywhere, at any time,
on any device, with a new consumer sense
of entitlement to that freedom. We have
moved from scarcity to abundance, and
with that face massive changes in control
of the proverbial dial to new technology ag-
Gigi Johnson
31 Navigating the shifting sands of the
media landscape
Mike Bloxham
38 E-discovery
amec convenes expert panels to discuss
electronic discovery in entertainment
and media litigation
Louis A. Craco, Jr.
44 cyber insurance and media
organizations
Jeff Hermes
50 you can't go home again
Karen Kaplowitz
gregators with different visions of the future.
Digital media have also spawned entirely
new means of expression, most notably social
media. And traditional storytelling, while still
important, has been opened up to new levels
of interactivity, cross-platform narration, and
decentralization of creation and distribution.
This issue of insights explores a number of
issues at the intersection of technology and
entertainment, and beyond that how new
technologies are transforming our daily lives
as citizens, consumers, businessmen and
lawyers.
This issue also introduces four new features
that will be regular items in future issues. Our
very own “mystery columnist,” Alan Smithee,
puts his anonymity to good use by commenting on cutting-edge case law. Maria Rodriguez
shares practical advice for in-house counsel
dealing with their company’s technology
employment policies. Karen Kaplowitz gives
perspective on the marketplace for law and
lawyers. And finally, John Huffman uses his
inimitable style to put into perspective the
brave new world of emerging media.
I’ve enjoyed this opportunity to be guest
editor of this issue of insights. I think we’ve
put together some provocative and instructive articles. I hope you enjoy reading them.
By Gigi Johnson
53 The demystification of technology
Associate Executive Director
Emily Coppel
57 ipad perspectives
60 DELETED, UNLESS INSTRUCTED OTHERWISE
Alan Smithee
2
3
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
TECHNOLOGY, EMPLOYEES
AT WORK AND EMPLOYMENT
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
WILL THE EU'S TREATMENT
OF GOOGLE'S ADWORDS BE A
HARBINGER FOR THE U.S.?
THE SCOPE OF LICENSE:
PITFALLS AND PRACTICE POINTS
FOR TECHNOLOGY LICENSES
BETTING ON THE DRIVER OF AN
ACCELERATING BUS:
IN GOOGLE WE TRUST? OR APPLE?
OR BING?
MULTIPLATFORM VIDEO FUTURE
DEPENDS ON EFFECTIVE CONTENT
TRACKING AND MEASUREMENT
SOLUTIONS, SUCH AS WATERMARKING
NAVIGATING THE SHIFTING SANDS
OF THE MEDIA LANDSCAPE
AMEC CONVENES EXPERT PANELS TO DISCUSS ELECTRONIC
DISCOVERY IN ENTERTAINMENT
AND MEDIA LITIGATION
CYBER INSURANCE AND MEDIA
ORGANIZATIONS
YOU CAN'T GO HOME AGAIN
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
INSTRUCTED OTHERWISE
jeff beyer
Breaking
the Mold:
Beyer Takes
Entertainment
Online
Making the transition from entertainment
to online media was a decision that Jeff
Beyer embraced over ten years ago—and
today online media is changing the landscape through which organizations communicate with their clients. His experiences at Warner Music Group and Alias
Records, Corp. were the ultimate catalysts
—leading to development of cutting-edge
websites where companies could connect
and communicate with customers all
over the globe.
After seven years in the entertainment
industry, Beyer accepted the position
of Returns Manager at Warner Music
Group. He found himself handling millions
of dollars in paper returns each month,
and soon began working with the IT
department in order to develop efficient
processing methods for the company. It
was here that Beyer consulted on and
tested Warner Music Group’s first Webbased returns accounting system. This
online platform allowed for more efficient
returns and ultimately resulted in satisfied
customers and increased productivity.
•Short, sweet and to the point. It is
important to consider messaging when
connecting with current or potential
customers. Use terminology that your
target audience can quickly comprehend. More often than not, less is more
—think bullet points.
Following his time at Warner, Beyer went
on to Alias Records, Corp. where he
developed the first e-commerce site for
an independent record label. Within
twenty-four hours of the site launch, he
successfully garnered his first online
order—from a customer over 3,000 miles
away. He knew then that a career in Web
was imminent.
• Stay consistent. A unified brand and
presence make all the difference. Ensure that all of your online and marketing materials position your organization
with a consistent image and level of
professionalism.
“My Web experiences in the entertainment industry truly demonstrated the
power of an online presence in the
marketplace,” said Jeff Beyer. “Specifically for service-based industries, these
platforms allow for direct communication
with your target audiences.”
For professionals in media and entertainment—Beyer offers tips and tricks
for staying connected with clients:
• Keep your website fresh and current.
When it comes to an online presence,
nothing turns off a customer like stale
content. Take the time to keep company news and milestones current.
• Continue to engage. Want customers
that keep coming back for more?
Constant communication is key. Albeit
a printed newsletter or electronic blast—
these pieces allow an opportunity to
connect and engage on a frequent basis.
Today, Beyer manages his own firm—Big
Rig Media. Recently celebrating ten years,
the organization is focused on helping
small businesses move forward with
new technologies, professional design
and creative marketing strategies. He
has used his more than fifteen years of
experience in Internet development to
transition seamlessly from one industry
to another.
Expertise.
Execution.
Excellence.
At Gumbiner Savett, expertise and value are two elements of service not to
be sacrificed. Equally important is our well thought-out advice, accurate and
timely deliverables, and strong commitment to our clients’ success.
As a full-service firm we offer:
“We are thrilled to play a role in helping
companies communicate more efficiently
and directly with their customers,” said
Beyer.
• Audit and Financial Reporting Services for Public and Private Companies
• Business Management and Bookkeeping
• Estate Planning and Compliance
• Fraud Examination Studies
• Internal Control Studies
• Litigation Support and Forensic Accounting
By Jeff Beyer
• Financial Consulting
Santa Monica, CA 90404
• Due Diligence and Transaction Support
• Succession Planning
• Domestic and International Tax Planning and Compliance for
Businesses and Individuals
310-828-9798 | 800-989-9798
FAX 310-829-7853 | 310-453-7610
www.gscpa.com
4
5
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Technology,
Employees
At Work and Practical Guideposts For In-House
Developing Or Updating
Employment Counsel
Company Technology Employment
Litigation: Policies and Practices
Technology affects every aspect of the relationship between an employer and its employees, from the time they are candidates,
throughout their future with the company
(both internally and externally), at the time
of separation, and potentially after separation and in litigation.
How are Facebook and social media Web sites
affecting recruitment and hiring? In an era
where a BlackBerry and laptop make many
of us mobile employees, what are the consequences to wage-hour issues? The Internet
has broadened employees’ abilities to broadcast opinions about their employers. How
can a company police this? When is the line
between the exercise of First Amendment
or NLRA rights and actionable harm to a
company crossed? Many employees use
company technology on a daily basis and
have access to company proprietary technology and hardware with which to copy or
harm digitally stored information. How can
a company effectively protect from this type
of employee misconduct? How can technology be used to manage and develop talent?
How can technology improve results in the
defense of employment litigation and how
should it be used?
Any one of these topics could be the sole
topic of a detailed and lengthy article, but
this article endeavors to provide in-house
counsel: (1) an overview of how technology
impacts a company in each of these areas
from an employment law perspective and
(2) practical considerations in developing
or updating technology policies and practices.
Many companies use online job Web sites for
posting job ads. This may be a very effective
way of broadcasting a job opening and
maximizing reach in the way of candidates,
but because it is on the Internet, any mistake
we make will be forever preserved in digital
history, only to be used against us later. Thus,
it is best, for example, that the job ad include
any pre-employment conditions that will be
required (e.g., background checks, preemployment drug tests, and the like)—in
order to help screen candidates before they
even apply. If the job is an exempt position
and includes a description of the job, the
job description in the advertisement should
reflect duties and responsibilities that are
exempt, otherwise the job description may
be used later by a disgruntled employee to
help prove otherwise.
Can employers visit social media Web sites
or blogs to conduct background research
on a candidate? They can, but if they use
information from social media Web sites or
blogs to reject a candidate, they are likely
required to disclose the reason to the candidate under the Fair Credit Reporting Act.
If the activity of the candidate is protected
activity, any use of that information may be
off-limits. But if the information has already
been revealed, steps may be taken to protect
against any inference of discrimination or
unlawful treatment. The bottom line here is
to be deliberate about the practice and policy
and be aware of challenges that could be
encountered.
What about using the Megan’s Law Web site
to screen candidates? Megan’s Law actually
states that the Megan’s Law Web site is not
to be used for employment screening purposes. How bizarre you say? Well, yes. It is
strange to think that one would not be able
to use this information to prevent the hiring
of registered sex offenders. The public policy
behind this law is to bring information to
the public at large but not to prevent these
individuals from finding work. Nonetheless,
©iStockphoto.com/coreay
if an employer finds that a candidate has lied
about a conviction on his application and
learns of the conviction through a background check or search, the lie is grounds
to reject the candidate. What if an employee
comes to you and reports that he has found
that his co-worker of many years is listed on
the Megan’s Law Web site? Can you terminate the co-worker? This is a good time to
call employment counsel. If the co-worker is
working with children or going into customers’
homes, it may be grounds for termination.
If the employee is not in a position to cause
harm, it may not be. This is another area where
employment counsel should be helpful.
Employees in our workforce are using our
technology. Many have, or are issued, BlackBerry devices and laptops. There are many
considerations in this regard. Every new
employee should be required to sign a technology policy (either stand-alone or in an
employee handbook). If the policy is in the
employee handbook, among other policies,
it should be a human resources practice to
review the key policies of a handbook with
new hires, including the technology policy.
A strong technology policy sets forth the
allowable and prohibited uses of the company’s technology, including the use of
computers and telephones for personal use,
the unauthorized use of certain Web sites
and a prohibition against blogging, twittering, Facebooking, etc. using the company’s
hardware.
Also, a state-of-the-art technology policy
tracks the language of the Computer Fraud
and Abuse Act (CFAA). If a company’s policy
provides the requisite notice under the CFAA
and an employee or terminated employee
does as much as copy his or her hard drive
or key digital information, the employer may
have a federal claim against the person. The
CFAA, assuming a company has the proper
language in its policies, makes it much easier
for a company to restore the damage done
to it by a current or former employee because
showing damage under the CFAA is much
easier than under other statutes.
Social media Web sites and blogging are
employees’ new method of expressing
discontent with their employer on a broad
scale. A company cannot adopt policies that
infringe on an employee’s right to free speech
or NLRA rights to organize, but an employer
can guard against defamation and interference with contract or prospective business
advantage. In order to do this, we must
educate employees about what this means.
While written policies that are clearly drafted in plain English are important, training
and explanation are also necessary in order
to make these prophylactics effective.
Social media and blogging has brought the
balancing test between employee and employer rights to a whole new level. Companies
may limit the kinds of references to the company and its leaders that an employee makes,
so long as the limits are consistent with the
balance of rights. Can employees be disciplined for unbecoming conduct on a blog or
social media Web site that merely offends
the company? Most rank-and-file employees
cannot, unless there is actual damage being
done. On the other hand, if their behavior or
blogging rises to the level of creating an actual conflict or damage and is not protected
activity (e.g., the employee posts that she is
Continues on next page
6
7
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
AUTHOR PROFILE
moonlighting for a competitor, discloses a
company trade secret, or causes the company to lose a contract), an employer may
have recourse, subject to what is allowable
by law. Nevertheless, this is still somewhat
uncharted territory. A strategic and welldocumented approach is key.
Mobile employees may pose wage-hour risks.
If employees are non-exempt and mobile,
they must track their time just as if they were
at the office. If a company has non-exempt
mobile employees, it should have a clear
policy for tracking time that is reviewed with
and signed by the employee. The policy should
remind employees that the company counts
on them to record their time properly and
that if there is ever any question about the
hours they have worked, they must report it
immediately to human resources. Although
de minimis time is not necessarily compensable in most states, a company’s practice
and policy for de minimis time should be
clear and comport with the letter of the law.
Off-the-clock class action claims have become
the claim de jure in states like California, so
it is critical to pay close attention to these
policies and practices.
Mobile employees who are treated as exempt,
but may not really be exempt because they
are not doing their jobs properly or because
the company has erred in determining their
classification, are even more troubling. These
employees are not likely keeping track of their
time and may create class-wide liability. In
this regard, a company can use the technology issued to the employee to understand
the employee’s activity. BlackBerries loaded
with Google maps (a free application), for
example, create a GPS tracking opportunity.
The e-mail and telephone functions of the
BlackBerry provide time-tracking. Laptops
can be reviewed for log-on and off information. Although it is more prudent to ensure
that the exemption classifications have been
properly determined, it is often a gray area
of legal application or employees are underperforming themselves out of the exemption.
We must turn to technology to minimize or
understand potential exposure from a proactive and defensive position.
If employee activity can be tracked through a
company’s technology, the employer is likely
on-notice of the employee’s work activity.
Making an argument that they were not aware
the employee was working and that the emloyee did not track his or her time, may not be
a defense to unpaid, off-the-clock claims.
If a company is defending against employment litigation, whether they are wage-hour
claims, wrongful termination, harassment, or
retaliation claims, technology has undoubtedly
added a whole new dimension. Finding, for
example, that a plaintiff-employee is posting
his or her mood as “happy” on Facebook
while seeking emotional distress damages
for depression from a termination, will certainly
help cast doubt on that ex-employee’s claim
when defense counsel cross-examines him
or her in deposition.
Simple things like finding a plaintiff-employee’s
blog about how they are going to “get” the
company can even be useful. Employees,
particularly the plaintiff-type, seem to have
little or no filtering ability or desire. It is
amazing what kind of information can be
found through technology to defend litigation.
image can be stored on a CD or DVD and
should be placed in their personnel file with
their termination documentation. If it is found
that an employee has copied, deleted, or
tampered with any of the company’s information, and the company has a strong
technology policy that mirrors the CFAA;
the company is well poised to protect itself
from any abuse in which the terminated
employee has engaged.
The connections between management,
information technology (IT) and human
resources should be strong and consistent.
IT can develop many controls so that a company can become aware of unauthorized
uses of company technology in a real-time
basis. A company’s technology and computer-use policies and practices should be
deliberate, thoughtful and reviewed on an
annual basis so as to ensure that they are
current with applicable laws and technology.
Furthermore, technology may be used proactively to assist management, prevent
employee abuse and posture for developing
leverage in litigation.
All of these considerations depend, of course,
on the individual makeup of a company.
While large companies may not be able to
implement certain practices due to a large
workforce and cost issues, the written policies
and training may be practical. For others,
this may serve as a useful checklist of considerations, always to be balanced against
the company’s needs and capabilities.
maria rodriguez
Maria Rodriguez is a partner in the Los Angeles office of Winston & Strawn and focuses
her practice on labor and employment law.
She represents and counsels employers in all
areas of employment law, including state and
federal wage-hour audits and class actions,
wrongful termination, discrimination and harassment matters, and policies and practices
development.
Contact: [email protected]
By Maria C. Rodriguez, Winston & Strawn LLP
Finally, when employees are terminated, their
hard drives should be scanned and imaged.
This process takes only a few minutes, is not
at all costly, and is very simple to do. The
8
9
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
PROFILE
blair westlake
Executive Vice President, Home Entertainment
Group (1993-96), and President, Worldwide
Pay Television and Television Business Development (1996-97). Following graduation from law
school, he was an attorney with Great Western
Financial Corporation, later acquired by Washington Mutual Bank.
Westlake is a seasoned media and entertainment
industry veteran, with more than 25 years of
diverse experience encompassing home video,
pay and free television distribution, video-onemand and pay-per-view, non-theatrical content
distribution (airlines, hotels, etc.), television production, physical studio operations, international
thematic channels development and management,
strategic planning for a global television business
unit, magazine publishing and theme parks.
Before joining Microsoft, Westlake consulted for
various media companies including Comcast
Corp. and NBC Universal and was corporate
executive vice president of Gemstar-TV Guide
International, Inc. Westlake was also an executive of Universal Studios, Inc. (formerly known
as MCA INC.) for nearly 20 years, where he was
Chairman of Universal Television & Networks
Group. He joined Universal as an attorney in the
Law Department (1982-85), and subsequently
held positions as Director of Business Affairs for
Studio Operations (1985-87), Vice President
and Senior Vice President, Business & Legal
Affairs, Home Entertainment Group (1987-93),
Under Westlake's leadership, Universal Studios
broke new ground in creating strategic alliances
to build the Universal brand in the global television arena, including long-term, multibillion dollar
channel carriage and content licensing agreements
with Germany's KirchGruppe, France's Canal+,
Stream in Italy and Sogecable in Spain. He was
instrumental in the formation of various multi-party
joint ventures, leading to the creation of a dozen
international channels including HBO Asia, Telecine premium movie channel in Brazil, Cinecanal
premium movie channel in Latin America, the
Premium Movie Partnership (Showtime and
Encore movie channels) in Australia, TV1 Channel in Australia, RTL7 channel partnership (with
CLT/UFA and Bertelsmann) in Poland, and Star
Channel in Japan.
Award from the Association of Media and Entertainment Counsel (AMEC), the leading trade association serving general counsel and business affairs
attorneys at media and entertainment companies.
He is a member of a number of industry organizations including The Paley Center for Media (The
Museum of Television & Radio) Media Council,
the Executive Branch of the Academy of Motion
Pictures Arts and Sciences (Academy Awards®),
Academy of Television Arts and Sciences (Emmy
Awards®), the Executive Committee of the
International Academy of Television Arts & Sciences (iEmmy® Awards) and The Pacific Council
on International Policy. Westlake is a member of
Board of Directors of the Digital Entertainment
Group (DEG); ContentGuard, Inc.; and Digital
Coast Roundtable; he is a former member of
the Consumer Electronics Association Board of
Directors and the Board Industry Leaders and
board of the National Association of Television
Program Executives (NATPE).
Westlake is admitted and an active member of
the California State Bar.
Westlake oversaw the global of the licensing of
Universal's motion pictures (output and library
comprising 5,000+ titles) and television libraries
(40,000+ episodes), through all forms and means
of television. In 1993, Westlake negotiated a
groundbreaking agreement with Tele-Communications Inc. and Encore Media for Universal Studio's
motion pictures, which led to the formation of
what later became known as Starz, a premium
movie channel which competes with HBO and
Showtime. In 2000, he was responsible for crafting and negotiating the first-ever "split-slate"
output deal with HBO and Starz.
a conversation with
blair westlake
A CONVERSATION WITH BLAIR WESTLAKE—
CORPORATE VICE PRESIDENT OF
THE MEDIA AND ENTERTAINMENT
GROUP AT MICROSOFT
Recently, David Cuddy of Weber Shandwick sat
down with Blair Westlake, a licensed attorney who
now works as the corporate vice president of the
Media & Entertainment Group at Microsoft Corporation, in order to talk to him about how legal
and business affairs interact in the corporate atmosphere. After working in the film and television
industry for a considerable stretch, Westlake
joined Microsoft in August 2004 and is now based
at the company's Redmond, WA headquarters.
Describe your role within Microsoft.
My role at Microsoft focuses on two distinct areas.
The first is primarily an internal function; providing
my colleagues, who are developing products, both
hardware and software, with insights on the media
and entertainment industry, along with the strategy/product plans associated with those products. I think my team’s work in helping to steer
product development internally has opened a
lot of doors for Microsoft to partner with content
companies and bring new entertainment experiences to consumers.
Second, my team is responsible for licensing
content—whether it's music, video, publishing,
etc., for Xbox, Zune, the millions of Windows Media
Center-enabled PCs and other devices. We’ve had
a number of successes, including bringing thousands of hours of video on-demand content to
Xbox Live and the introduction of Netflix Watch
Instantly to Xbox.
A recognized leader in the media and entertainment industries, Westlake was the first recipient
of the Whittier College School of Law Alumni
Award for Business Excellence in 2002, and in
December 2007 received the Special Founders
What is Microsoft’s global strategy for entertainment and media companies?
We’re in a strong position to augment the traditional entertainment experience. We see the availability of PCs, with nearly a billion used worldwide
today, the strength of the mobile phone, our work
with the Zune, whether it’s on a Windows Phone
or a stand-alone Zune device, and Xbox, as delivery
channels for people not otherwise served by
traditional entertainment options. Offering our
media company partners access to these channels is a win both for them and for Microsoft
customers.
From a global perspective, this shows up differently
in each market. Game consoles may be an untapped way to reach new audiences in some
regions, so we’ll focus on bringing content to
Xbox. In others, using Microsoft’s mobile assets
may make more sense as a delivery channel.
How does Microsoft view its position at the
intersection of technology and entertainment?
People have to find value in entertainment content if they’re going to spend money on it. That
means the experience of buying it and accessing
it has to be easy and work seamlessly. We like to
concentrate on areas where technology makes
this possible. I think we’ve just scratched the surface in this regard, and we’ll continue to address
the need for simplicity and value.
What is your strategic vision for emerging
markets?
We just began to expand digital content distribution outside the US last year, announcing deals
to bring content from BSkyB in the UK and Canal+
Group in France to Xbox LIVE users in those
countries. These deals were natural. For example,
we saw a significant segment of people in the UK
who like Sky’s online content library but would
prefer the 10-foot experience of watching it on
a TV. Collaborating with Sky to provide it through
Xbox, which millions of households there already
have, was an easy way to make that a reality. You’ll
see us take similar approaches as we continue
to extend our international reach.
How do you personally use technology on a day
to day basis?
If you talk with my colleagues, they’ll tell you I
have an endless appetite for news. I like to stay
on top of what entertainment and technology
companies are doing and keep an ongoing conversation with my team on the day’s announcements. I use my PC or phone for this, and I’m
always tweaking the mix of apps and software I
put to use.
I also have the benefit of seeing products under
development through my work with the Microsoft
Research team, at our annual Tech Fest where
products are demoed, and at a multitude of other
venues. It’s worth noting that Microsoft Research,
which is responsible for developing things like
the no-controller gaming system Project Natal, is
the world’s leading research institute in terms of
funding and personnel. Think of it as what Bell
Labs once was.
How does your background as an attorney and
former in house counsel relate to your work
today at Microsoft?
It’s invaluable to know what an entertainment
company’s legal team will need to see in order
to close a deal before we approach them. I like to
think that we’re able to close deals much more
quickly and that we’re easier to work with as a
partner because we think through the legal aspects
of agreements up front.
By David Cuddy
10
11
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
THINK
OUTSIDE
THE “DRM BOX”
Enriched Media. Enriched Living.
The Media & Entertainment Industry is discovering the true value of digital watermarking:
• Asserting copyright ownership in complex distribution for all media types
• Monitoring and identifying content flows across the Internet
• Enabling new, enriched experiences and innovative business models
• Deterring professional and casual piracy
If you still associate digital watermarking with DRM, visit www.digitalwatermarkingalliance.org/insights
to download “The Case for Content Identification” distributed by the Digital Watermarking Alliance and
learn more about the value of this technology for your business.
Will the EU’s Treatment
of Google’s AdWords
be a Harbinger
for the U.S.?
By many estimates, the sale of keyword-triggered ads by the
search and advertising giant Google and other similar companies constitutes a worldwide, multi-billion dollar industry.
Google’s AdWords advertising program allows companies to
bid on keywords that trigger advertisements on Google’s
search engine. But as Google has expanded its policy of
“selling” trademarked keywords to trigger third party advertisements, it has faced a wave of lawsuits from trademark
owners—both in the United States and abroad. Although
Google has faced some legal setbacks on the issue, recent
developments in two separate AdWords lawsuits—one in the
U.S. and one in Europe—appear to signal a shift of momentum
in Google’s favor.
Courts have had a difficult time applying traditional principles
of trademark law to the online world, resulting in purported
trademark infringement that can sometimes continue for
years. Recently, computer services company Rescuecom Corp.
dropped its trademark infringement suit against Google.
Rescuecom sued Google over Google’s sale of Rescuecom’s
trademark to competitors as a trigger for advertisements.
In its 2006 District Court case, Rescuecom unsuccessfully
argued that Google’s use of Rescuecom’s mark constituted
trademark infringement; the court found that such use of
trademarks did not constitute “use in commerce” and was
thus lawful. However, last spring the U.S. Court of Appeals
for the 2nd Circuit reversed the District Court’s ruling, finding
that such use does, in fact, constitute “use in commerce.”
Even after the 2nd Circuit’s ruling, plaintiffs are still having
a difficult time making a case for infringement. A finding of
trademark infringement requires a showing of, among other
things, a likelihood of consumer confusion resulting from
unauthorized use of a trademark. When consumers do end
up on a competitor’s website as a result of clicking on an
advertisement, they are not likely to be confused between the
competitor’s website and the website of the trademark owner.
Courts in the U.S., however, have gotten around the confusion
requirement by applying the “initial interest confusion” doctrine—under which infringement can be found if the mark in
question served to capture the initial attention of the consumer,
even though there is no actual confusion at the time of purchase. Nonetheless, this relatively recent legal doctrine has
been inconsistently applied in U.S. courts.
The Rescuecom case was set to go back to the lower court for
a full hearing, but Rescuecom dismissed the suit before the
court had a chance to hear further arguments. In dropping
the suit, Rescuecom declared victory, although Google never
conceded that its use of Rescuecom’s mark was improper. A
statement released by Google after the dismissal stated that
“now even Rescuecom concedes that it’s legally entitled to
use a competitor’s trademark as a keyword trigger.”
Interestingly, Rescuecom is currently involved in a similar lawsuit,
but this time it is the party defending the sale of trademarks
in AdWords. Best Buy sued Rescuecom last year for buying
the term “GEEK SQUAD” to trigger ads in AdWords. Now Rescuecom finds itself arguing a position that is at odds with its
position in its lawsuit against Google.
1-800-DIGIMARC
[email protected] • www.digimarc.com
Digimarc is a proud member of the
Digital Watermarking Alliance.
12
pg. 4
13
digimarc_AMEC_2010_ad.indd 1
pg. 6 to 9
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
4/23/10 9:42:33 AM
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Last fall in Europe, European Union Advocate General Poiares
Maduro, issued his formal opinion in three cases against
Google; all of which claimed that Google’s sale of trademarks as keywords constitutes infringement of those marks.
Maduro found that such use of trademarks is acceptable
because consumers are not confused by advertisements
triggered by keywords.
At the core of his analysis is a discussion of the nature of
“organic” or “natural” search results, which are web results
that Google displays in response to a search query, and
keyword-triggered advertisements. Maduro undermined the
basic assumption that keywords can infringe trademarks by
arguing that consumers are not really diverted from reaching
particular company web pages by triggered advertisements.
Plaintiffs such as Louis Vuitton, who brought one of the suits,
must show that advertisements divert consumers’ attention
away from the plaintiff’s website. However, Maduro noted that
it is not clear that search engine users expect search results
for a trademark to yield the official website of a certain brand
as the first result. Rather, users must often sift through numerous search results before they find the site that they are looking
for, and they might not even be searching for the “official” site
sponsored by the trademark owner at all. Thus, he concluded
it is difficult to argue that users are diverted when they click
on an advertisement appearing adjacent to natural search
results.
and the results themselves are very similar in appearance.
Thus, to find that such keyword use constitutes infringement
would unduly expand the scope of trademark protection on
the Internet.
Throughout the AdWords lawsuits, Google has maintained
that its use of trademarks to trigger advertisements does not
result in consumer confusion and that consumers can and
must sort through both natural search results and advertisements in order to effectively navigate the Internet. If consumers
realize that they must sort through search results, whether
natural or sponsored, in order to find their desired content,
then it is difficult to argue that they are getting diverted from
any one result.
AUTHOR PROFILE
AUTHOR PROFILE
Jerod Partin
Rami s. yanni
Jerod Partin is Of Counsel to Neff Law Firm
where his practice involves trademark,
branding, internet and new media issues.
Prior to this position, Jerod worked as an
associate in the Intellectual Property,
Technology and Media practice group at
Greenberg Glusker, where he focused on
trademark prosecution and clearance for
numerous companies in industries including technology, entertainment, cosmetics
and apparel as well as counseling clients
regarding internet and new media issues.
He also has extensive experience in the
branding and advertising fields, providing
brand consulting services to numerous
clients in the sports and entertainment
industry and working for a prominent web
marketing firm prior to attending law school.
Jerod is a frequent writer on internet, technology and branding issues, contributing
to the World Trademark Review, Los Angeles
Daily Journal, San Francisco Daily Journal,
IP LAW 360 and M/E Insights among other
publications.
As Senior Vice President of Business and
Legal Affairs, Rami Yanni is responsible for
all contractual, intellectual property and
compliance matters for Saban Brands. Yanni is an attorney with more than 17 years of
experience in intellectual property transactions and licensing. Over the course of his
career, Yanni has negotiated numerous
license, distribution and purchase and sale
agreements for clients from a wide range of
industries, including motion picture, television, music, e-commerce, apparel, cosmetics, consumer products, food and beverage
products, software, toys and sporting goods,
and has represented major motion picture
studios in copyright and trademark matters.
Yanni has also published numerous articles
on U.S. trademark law in legal, trade and
consumer publications.
Given the increasing sophistication of Internet users, especially as children are now growing up with the technology,
Google has a strong argument. As more and more consumers
utilize the Internet on a daily or constant basis, it becomes
harder to argue that Internet users are susceptible to being
fooled by online advertising.
Over the last two years, Google has taken an optimistic stance
towards the legality of selling trademarks as keywords, extending its policy of selling such trademarks from the U.S.
and Canada to the U.K. and Ireland in 2008. The recent
settlement of the Rescuecom case, as well as the likely
outcome of the Louis Vuitton cases in Europe, will no doubt
Further, he argued that if diversion is found to be the result of give Google added confidence in its sales of trademarks as
such keyword use, the same type of diversion could be found keywords.
in natural results as well—for “Internet users process ads in
the same way as they process natural results.” He went on to The European Court of Justice often follows the Advocate
say “there is no substantial difference between the use that
General’s decision, although it is not bound by it. The Court is
Google, itself, makes of the keywords in its search engine
scheduled to issue its formal decision by the end of March.
and the use that it makes of them in AdWords: it displays
By Rami S. Yanni and Jerod Partin
certain content in response to those keywords.”
Because of the functional similarity of natural and sponsored
search results, a finding that sponsored search results could
cause confusion and thus constitute infringement could open
the door for a similar finding of infringement as a result of
natural results, Maduro argued. For example, the website of a
counterfeiter could still appear under natural search results,
Yanni previously chaired the Trademark
Practice Group at Greenberg Glusker in Los
Angeles. Prior to that, he was a partner in
the intellectual property group at McDermott
Will and Emery.
Yanni regularly participates in speaking
engagements for various colleges, universities
and professional organizations, including
Pepperdine University School of Law, Long
Beach City College and Santa Monica College.
Yanni holds a Bachelor’s degree from University of California, Los Angeles, and a Juris
Doctor degree from Loyola Law School, Los
Angeles.
14
15
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
of the underlying patents. While such an extension may not be a
practical expectation for a patent in an industry where innovation
is moving at a rapid pace, such an approach may apply in a case
where the underlying patents to a licensed technology are nearing
the end of their term and the licensor has developed significant
post-filing experience.
Once the subject matter of the business deal is understood, the core
issue in any license is understanding, and drafting with precision,
the scope of the license grant. The first step for the licensor is to
understand the full scope of the rights that it has to grant, as no
licensor may grant greater or more expansive rights in any intellectual
property than it holds or owns. In a license of patent rights, for
example, the importance of this consideration is heightened by
the implications of any potential violation of the doctrine of patent
misuse. A patent is a government grant of monopoly to inventors
for certain new and non-obvious innovations, in the form of useful
processes or machines (utility patents) or ornamental designs
(design patents). Specifically, the owner of a U.S. patented technology has the exclusive right to make, use, sell, offer to sell, or import
into the U.S. the patented invention.1 The owner has the right to
exclude all others from any unauthorized use covered by a patent
and to commercialize the patent, including through licenses to others
for a term of years that is no greater than the term of the underlying
patent. Under the doctrine of patent misuse, however, license fees
may be unlawful if a patent is found to be unenforceable or is otherwise invalidated. To avoid such result, the patent-holder/licensor
may specify that the license and right to compensation thereunder
terminate if the patent expires, is invalid or is found to be unenforceable.
the scope of license:
Pitfalls and Practice
Points for Technology
Licenses
The media and entertainment industry is in the midst of a global
transformation commonly referred to as “media convergence”—specifically, the merging and creation of new technologies, platforms
and devices used by consumers to access, experience, share and
otherwise consume content. Cultural and technological forces are
accelerating the impact of media convergence. In the meantime,
content creators and distributors are all attempting to anticipate
the changes that will prevail over the next several years (or even
months or weeks), as consumption patterns shift, distribution platforms evolve and a virtual bridge is built between Silicon Valley and
Hollywood. In the new world of new media, distribution of content
is as much about the technology of the platform as it is about the
content itself.
Facing a technology-driven evolution of the industry, counsel for
modern media and entertainment companies find themselves just
as likely to be drafting and negotiating a technology license agreement as they are preparing a content distribution deal. In fact, many
content distribution agreements likely include a variety of technology-driven provisions. While many of the strategies, tactics and considerations in negotiating technology licenses are similar to those
applicable to other types of licenses (such as content licenses),
there are a number of considerations specific to the scope of
technology transactions that counsel must carefully consider and
navigate in the process.
The first step to drafting or negotiating any license is to make sure
that the subject matter of the license is fully understood. The subject matter of the agreement involves the core commercial issues of
the transaction (e.g., revenue, location, term, and overall business
need of the license). In addition, in any technology transaction, the
rights that the licensee needs to secure may come in the form of
a variety of different types of intellectual property, each with their
own unique set of considerations, including patent, copyright,
trademarks and trade secrets. Once counsel fully understands the
needs and expectations of the commercial transaction, he or she
can properly focus on the proper rights (and obligations) to be addressed in the license agreement.
For example, if a licensee only secures a patent license for a particular technology, they may only have a portion of what they really
need if the licensor possesses any particular knowledge, expertise,
or trade secrets regarding the implementation or exploitation of
such technology. In such a case, the licensee will want to ensure
that such “know-how” is included in the license, which could come
in a variety of forms, including a one-time licensor training session
or continuing obligations of the licensor to share trade secrets under
the licensee’s obligations of confidentiality. Depending on the circumstances, the licensor may also benefit from the inclusion of a knowhow license, which may extend the time period during which the
licensor may collect royalties for such technology beyond the end
©iStockphoto.com/peepo
FOOTNOTES
1
2
35 U.S.C. § 271.
S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1088 (9th Cir. 1989).
Once the licensor understands what it has to grant, the parties need
to determine the scope of rights that the licensee needs to receive.
In general, the scope of a license is inherently limited to specific
rights granted under the contract, and uses not expressly granted
are implied to be reserved by the licensor.2 From the perspective of
the licensor, it is critical that the grant of rights be restricted and
limited to the scope of the licensee’s project and needs, thus
permitting the licensor to further commercialize the rights outside
the scope of rights needed (and granted) to licensee. On the other
hand, the licensee may want the flexibility to expand the scope of
the project if it is successful.
The scope of license implicates a number of factors with seemingly
infinite variations or combinations that could apply, depending on
the commercial transaction, including: exclusivity, territory, term,
termination, transferability, and other factors relevant to a particular
field of use (e.g., specified products or channels of distribution).
Ultimately, there is no “magic language” required to grant a license,
which, in its simplest form, is just a permission to do something.
An example of a license grant that contemplates a certain specific
scope with respect to many of these terms may appear as follows:
16
17
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
“Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee and Licensee accepts a worldwide, fullypaid and royalty-free, perpetual, irrevocable, nontransferable, nonexclusive, license to develop, manufacture, import and export, sell
and offer to sell, Licensed Products using the Licensed Technology
in the Field of Use.”
It is important for both the licensor and licensee to appreciate that
if the language in the license grant is not specific as to the details
of the scope of the license, many of these issues will have an implied result potentially contrary to the expectations of the parties.
For example, if no territory or geographic scope is specified, then
worldwide rights may be implied, except in the case of intellectual
property rights that are specific to one country (e.g., patent rights
would only apply in the country granting such a patent). In addition,
if a term is not specified, the license will likely be assumed to be
perpetual. However, in the case of a patent license, the term will be
for the remaining term of the underlying patent (20 years from the
time of filing in the U.S.).3
In addition, it is essential that the rest of the terms of the license
agreement be drafted with the applicable scope of license constantly
in focus. For example, if the license is intended to be assignable or
sublicenseable based on other terms of the agreement, then the
grant language should not specify that the license is “nontransferable.” Similarly, if the licensor intends the license grant to expire
after a period of time, the grant should not specify a perpetual
license. In addition, if the licensor desires to have early termination
of the license as a possible remedy in the event of a material breach
of the license, then the license grant should not indicate an irrevocable license. As evidenced by these two examples, note that the
terms “perpetual” and “irrevocable” are not interchangeable. An
irrevocable license may be “perpetual” or for a “specific term,” but
it may not be cut short of the stated term.
A key element in determining the value of any license to the licensee
is the term (and risk of termination) of the licensed rights. As a
general rule (depending on royalty structures and the expected
useful life of the licensed rights), the licensee will want a longer licensed term. Evolution of technology and industry trends, however,
may cause the parties to want to reassess the scope of license and
economic terms of the arrangement from time to time. Providing
an expiration date and mechanism for renewal is one way to force
such a reassessment. The licensee, however, may be concerned that
such a structure could make them vulnerable to losing the license if
licensor fails to renew on reasonable terms. One manner to mitigate
this concern, while providing the licensee value that comes from a
long-term license, is to provide for default that the licensed terms
to continue unchanged upon renewal unless the parties otherwise
agree.
Also, unless otherwise stated, termination of the agreement will likely
result in termination of all rights granted thereunder. Consequently,
if the license is subject to expiration or the possibility of early
termination, then the parties must carefully consider, and specifically provide for, any need for any post-closing rights or obligations
of the parties. For example, if the licensee is utilizing technology
or trademarks in its manufacture process, it may be appropriate to
include a wind-down, transition, or “sell-off” period upon the early
termination of the license. Alternatively, the agreement may provide
that the licensee has the right to use the technology that it has in
hand on a perpetual basis, but does not have the rights to any
updates or support after termination of the agreement.
An additional key element of the scope of license that impacts
the value of any technology license is exclusive rights granted
to licensee, if any. The most common type of technology license
is a nonexclusive license, which permits the licensor to convey
the same or similar rights that are granted to the licensee to any
third party licensee. In an exclusive license, the licensor essentially
transfers all of its rights to the licensee within the applicable scope
or field of use. Unless otherwise stated, an exclusive license would
generally prevent even the licensor from using the licensed subject
matter within the same field of use as has been granted exclusively
to the licensee. If the parties intend to permit the licensor to use
(but exclude all third parties, including additional licensees from
using) the licensed subject matter, then they intend to implement
a “sole” or a “co-exclusive” license. That said, the best course of
action is not to rely on a court’s future interpretation of words such
as exclusive, sole or co-exclusive, but to instead specify, in clear
descriptive language, the parties’ intent as to restrictions on the
licensor to exploit the licensed matter.
In the event that an exclusive license is granted, the parties should
carefully consider what obligations the licensee has to exploit the
licensed subject matter. The opportunity cost to the licensor in
granting an exclusive license to one licensee is the inability to
thereafter grant the same or similar license to any other third party.
The licensor should then consider what incentives are built into the
agreement to properly motivate the licensee to exploit the license.
In recognition of this predicament of the licensor, some courts have
implied an obligation on the licensee to use “best efforts” or “reasonable efforts” to commercialize the licensed technology in the
case of an exclusive license, where the licensor has not retained
rights to practice the technology and no minimum fees are owed.4
That said, rather than rely on equitable judgments of the courts,
best practices suggest that the license agreement should specify
the applicable obligations of the licensee, with objectively determinable goals (e.g., minimum distribution requirements, minimum
guarantees, etc.).
While licensing parties may be enticed by the false promise of the
“simpler” approach of using a “covenant not to sue” or “non-assertion agreement” in lieu of a technology license, the parties should
beware of some potential pitfalls that may arise down such a path.
If drafted carefully, there may not be a substantive difference between
a license agreement and a non-assertion agreement. In fact, the
U.S. Court of Appeals for the Federal Circuit recently reasoned that
the difference between an unconditional covenant not to sue and
a license “is only one of form, not of substance—both are properly
viewed as ‘authorizations’.”5 However, the typical non-assertion
agreement often fails to include the detailed language that clearly
defines the scope of the license, which the licensor will generally
want specified in detail in the agreement for the reasons discussed
above.
In addition, the typical licensee has several potential concerns that
should be considered in connection with a typical non-assertion
agreement. First, without specific language on point, it is not clear
whether a non-assertion agreement would be personal to the
covenantor (i.e., licensor), or would “run with the patent” in the
event of an assignment by the covenantor of the underlying patent.
Second, it is not clear whether such an agreement would be assignable by the recipient (i.e., licensee) of this covenant. Third, it
is unclear whether the recipient of this covenant would enjoy the
benefits of Section 365(n) of the Bankruptcy Code in the event of
the covenator’s bankruptcy.
As a general rule, bankruptcy law will provide certain protections to
the licensee in the event of the licensor’s bankruptcy. As a general
rule, a bankruptcy trustee may, subject to court approval, reject any
executory contracts of the debtor (i.e., licensor, in our example).
Most licenses are executory contracts, which only require some
unperformed obligation of both parties. Under Section 365(n) of
the Bankruptcy Code, if the trustee elects to reject a license during
bankruptcy proceedings, the licensee may treat the contract as
terminated and seek monetary damages as an unsecured creditor.6
In the alternative, the licensee may treat the licensing contract as
though it were not terminated, and retain its rights (except only as
to specific performance of the licensor/debtor), including rights to
enforce exclusivity provisions of the license.7 There is a lack of case
law to determine whether a non-assertion agreement would be treated as a license for purposes of licensee’s protection under Section
365(n), suggesting that the licensee would prefer to use the tried
and true method of a license agreement to secure the rights.
the Supreme Court held that, in the context of patent rights, the
exhaustion doctrine (which is similar to the “first sale doctrine” in
the context of copyrights) requires that an initial authorized sale of
a patented item terminates (or “exhausts”) all patent rights with
respect to that item.8 In other words, the patent holder cannot
impose restrictions on the use of patented items down the distribution stream from the direct licensee of those patent rights.
Although the licensor may restrict the licensee directly with respect
to the scope of use and the type and scope of sales permitted, such
limitations no longer apply with respect to the item sold once
an authorized sale is completed. In the event that the control of
down-stream distribution is essential to the licensor, the licensor
may consider imposing a restriction that the licensee can only sell
the product to parties who have entered into a separate agreement
with the licensor. While the licensor would not have patent rights with
respect to this product, they may have contractual remedies if the
distributor failed to comply with the terms of such an agreement.
In addition to the many issues that impact the scope of license,
there are a number of additional issues, as in any other licensing
agreement, which should not be ignored in negotiating a technology
licensing deal, including issues related to compensation, joint ownership of rights issues, prosecution and enforcement of intellectual
property rights, representations, warranties and indemnities, etc.
In addition, counsel for both the licensor and licensee should not
overlook miscellaneous or “boilerplate” provisions in the agreement,
which tend to receive little attention in the negotiation of a license
agreement, but include essential provisions that define the parties’
relationship in connection with the operation and enforcement of
any agreement. As the convergence evolution continues forward,
understanding the pitfalls and opportunities in the scope of a technology license will be another important tool in the belt of every
entertainment and media counsel.
By David O. Blood and Josh Lockman
Another important factor for the parties to consider in connection
with the scope of a technology license is the application of the
“exhaustion doctrine” in connection with patent rights. Last year,
FOOTNOTES
3
35 U.S.C. § 154(a)(2).
4
Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214 (N.Y. 1917);
Emerson Radio Corp. v. Orion Sales, Inc., 253 F.3d 159, 166 (3d Cir. 2001).
6
7
11 U.S.C. § 365(n).
11 U.S.C. § 365(n)(1)(B).
8
Quanta Computer, Inc. v. LG Electronics, Inc., 128 S. Ct. 2109, 2115 (2008).
18
19
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
AUTHOR PROFILE
betting on the driver of
an
accelerating
bus:
in google we trust? or apple? or bing?
AUTHOR PROFILE
Joshua s. lockman david o. blood
Joshua S. Lockman is an associate in the Los
Angeles office of Latham & Watkins. Mr. Lockman's
areas of practice include entertainment, sports,
and media transactions, and he has represented
media and entertainment clients with respect to
matters such as joint ventures, licensing, corporate and other transactions.
Mr. Lockman is a member of the Pacific Council
on International Policy, and is a Fellow with the
Truman National Security Project. He is proficient
in Spanish and Russian.
David Blood is counsel in the Los Angeles office
of Latham & Watkins and has practiced with the
firm since 1998. Mr. Blood’s practice involves a
variety of international and US business transactions focused on media, entertainment, sports,
publication, telecommunications, high tech and
emerging technology matters and general corporate representation of clients in such industries.
Mr. Blood has represented a number of clients
in the entertainment, communications, internet,
new media and sports industries. For example,
he currently advises a variety of clients with respect
to US and international direct broadcast, satellite,
mobile, internet protocol and other forms of media
distribution opportunities, including licensing
and acquisition of media product (networks,
pay-per-view, video-on-demand, studio product,
sports, events, etc.), new media distribution,
publication and productions.
In addition, Mr. Blood represents US, international
and multinational clients with respect to matters
such as joint ventures, licensing, corporate and
other similar transactions. His international experience with respect to media and entertainment
clients includes representation of companies
operating throughout Latin America, Europe and
Asia (including Bandeirantes, DIRECTV Latin
America, ProSiebenSat.1, Rotana TV, Star Group
and others). He is conversant in Spanish.
Prior to his arrival at Latham & Watkins, Mr. Blood
served as a law clerk to the Honorable J. Clifford
Wallace, United States Court of Appeals for the
Ninth Circuit.
Mr. Blood is a member of the firm’s Media &
Entertainment Practice, Technology Transactions
Practice Group, Communications Practice Group
and International Practice Group. He is also a
former member of the firm’s Global Exchange
and Intern Committee. Mr. Blood is a member of
the California State Bar Association.
Mobile Internet: a wall of water is coming.
We’ve been watching this wave arrive for
many years, with lots of promises. Mobile
has been a surge of promises over its brief
history. In a prior life, I actually remember
funding original pitches for RSA bid funding
in the 1990s by partnerships wanting to get
involved in this new cellular business that was
working so well in Scandinavia. This cellular
phone thing might be very big. Very big indeed.
We are at the cusp of a change. The carriers
have been watching average revenue per
user for voice drop as phone calls online
turn into a price-dropping race to the bot-
tom, a commoditizing market. SMS, those
darned text messages, now surpass phone
calls in volume.
The panacea? Data plans, feature phones,
and smart phones. According to Mary Meeker
of Morgan Stanley in her Web 2.0 Conference presentation (October 2009), the world
will reach over 20% Smartphone penetration
this year; this is expected to be doubling by
2014.
will be exactly where we are when we are
making key decisions about life and spending. We are changing expectations, moving
an eager consumer base to have an abundance of content, not available through ondeck carrier platform conventions. How will
that shift dictate business models, risk, and
contracts? Instead of Verizon and AT&T, will
we be instead beholden to Apple, Google,
or Microsoft for the risk and revenue potential of the next new thing?
With smart mobile, we aren’t just shifting
eyeballs to a smaller screen. We are shifting
attention, habit, and data to a device that
We aren’t at the beginning of this dance,
but we are facing Round 3 of content
model changes:
20
21
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
My bet for a while has been Google, who so far has been dominant
in mobile search.
Round #1 Carrier Control and Past Promises.
Round #3 What now?
For content companies already enmeshed with mobile, the future
hasn’t blossomed as quickly as many foretold. The challenge
early on was dealing with the carriers and figuring out how much
resource to put into a nascent industry with unknown revenues.
Initially the carriers held all the cards, cloistering the users to stay
in a walled garden of content. Who was on and off deck was driving revenue and attention. Content companies and distributors
often licensed instead of taking any advertising or performance
risk. Some daring content distributors bridged that world between
“on deck” and “off deck,” proposing to aggregate content for a
percentage of ad revenue or some fee stream. The words “rev
share,” however, made most content companies blanch—share of
what? Carrier license fee revenue was more certain, but replete
with its own headaches from waiting for decisions by the big carriers—mostly Verizon and AT&T—about quality control and issues of
placement on the “deck” of content in a category.
We are breaching the 20% penetration rate this year, moving into
the mainstream. Who will hold the reins of control to this growing
base of “early majority” consumers and the explosion of content
potentially available as their phones reach everywhere they can be
to the Internet?
Round #2 App Stores, the big break over the wall:
App Stores, first launched by Apple in July 2008, cracked big doors
into those walled gardens of the cellular telephone carriers. These
stores have enabled the user to jump off-deck, into a less-controlled
world. New API-enabled creators quickly walked into these open
doors, creating mostly low-price or free applications to do anything
from light saber fighting to linking to your favorite information content
on the web. The initial boom was overwhelming, bringing a lot of
attention to the space. Some have grown whole new arenas of activity, like digital book sales and extensive gaming apps with more
momentum than their traditional counterparts. But for other apps,
the bloom fades fast after introduction or they are quickly copied.
Are the App Stores a permanent part of the mobile landscape as
more people get Smartphones and need the bridge to the applications and tools at their fingertips? Perhaps. On the other hand, the
App Store model may have many of the same transitional business
model features as the once glamorous, booming—and now faded—
world of ring tones. While young people wouldn’t pay 99 cents for
a song, for a while as the system matured they would pay $2.99
or more for a ringtone with a fraction of that same song. Now we
just download and sideload music ourselves without a look behind
us. (Some of us, of course, still have that same ringtone that came
with our phone, but that’s another story.)
I see three non-exclusive directions of power shifts: 1) “Splinternets” like the iPad model, with Apple gaining further influence; 2)
Search-driven control, with the battle between Google and “others”;
and 3) a more complex future comprising a mix of the prior elements along with behavior of the actual phone creating a whole
level of sensory inputs and outputs.
Risk Story #1
Many Closed Splinternets?
In January, Josh Bernoff from Advertising Age called out the growing
trend toward new walled gardens. He described this phenomenon
with the term Splinternet. The App Stores were a bursting break
from the carrier’s walled garden, an exciting quick fix that was an
easy link to needed and desired services to an instant audience.
The iPad may cause another lift, but also has the potential to replace
the old walled gardens of the carriers with a new walled garden
environment. The iPad is one of a growing number of newly closed
(or re-closed) spaces. The future is foggy as to whether that direction will blossom or whether it will be another transitional business
model. However, each Splinternet space will have its own rights, DRM,
and rules of engagement. This may be a further power shift to Apple
or a whole series of reactions from other players to break out of
this box.
Risk Story #2
Truth and Trust via Google.
If not walled gardens or app stores, as the mobile web surges with
smartphone sales and tools, viewers and consumers of media will
be coming there from search and referrals. Those mobile searches
influence immediate action. Searches are not subject neutral and
will send large amounts of traffic to whatever media are optimizing
for that search mode. And people do NOT go to page two of searches.
Primary mobile search queries have been for information (including
sports, weather, and news), local listings, and websites/navigation.
People want immediately useful information, and search tools are
blossoming to take the unique ability of smartphones to sense
where you are, what you see, what you hear, what is nearby, and
the entire context of your experiences with the phone.
In Google we trust. In the current flurry over the iPad and whether
it will move ecosystems in TV, newspapers, and magazines, simple
mobile search may become the Trojan Horse of the digital world.
Search on the Internet hasn’t peaked: overall it grew 16% in 2009,
from a combined volume of searchers and searches/user, according to comScore.
Google has been dominating and crafting reality by pushing reality
for us. Data on the level of dominance differ a bit. According to
Hitwise (Feb. 2010), 71% of Americans use Google as their search
engine. Nielsen says that it has a 65% share (Feb. 2010) and
comScore 66% (Feb. 2010).
In any case, we “Google it” when we need information, to find out
who is the star of a movie, what time a movie is playing, where we
can find the right music or TV show, hacks for videogames, schools,
and even… attorneys.
As Clay Shirkey recently repeated at SXSW, “Abundance breaks more
things than scarcity.” As consumers, we don’t want abundant choice.
We value someone else taking the chore of discovery—to some
degree—off of our laps. For example, despite having hundreds of
cable channels, the average cable consumer watches fewer than
20 channels, letting those brands and labels sort and curate his
programming. We have what is called “bounded rationality”—we
want limited choice sets before we make choices.
Google has made that easy on the Internet. Following the consumer,
businesses have learned to play the Google game, including many
media and entertainment organizations. Search Engine Optimization
has become an entire thriving business, figuring out who to hook
to what with what keywords to drive audiences to the company
homepage or to the right player instead of the thousands if not millions of other places to go. This pre-filtering by position in search
makes a significant difference; Google users click on that first result
43% of the time according to a 2004 study and click on the first
three results the vast majority of the time. Now into this mix we
have added real-time search, with data from Twitter licensed into
results from Google, Bing, and Yahoo.
And now, we are going mobile. Will that change or warp this Trust
economy?
Rapid Growth.
But mobile search—that’s not a big deal yet, is it? Yes it is. There
are more than four billion cell phone subscriptions around the
world (with some countries averaging more than one per person),
usually from a very large carrier who delivers these information
nuggets directly. Four billion users surpasses landline telephone,
television, and any other media. And smartphones have been
ramping up in penetration, letting us get off of the carrier decks
and onto the wild world of the web. Echoing Mary Meeker’s
predictions, comScore MobiLens reported that in 2009 US mobile
phone users with unlimited data plans reached 21%, smartphone
ownership reached 17% and 3G phone ownership reached 43%.
The average Internet searcher through the years hasn’t changed
their usage much, still usually not going to page two of the search,
and now looking for 2.5 words per search. Studies in recent years
looking at mobile and smartphone data find slightly different use,
focusing more on immediate, local information needs… but those
trends are changing as smartphones expand and begin to look and
smell a lot like a “traditional” Google search. However, in mobile,
we are searching two to three times more heavily for local content
in searches, according to recent Google statements.
How pervasive is Google on mobile search? Reports vary, as companies struggle to measure results from the outside. If you believe
StatCounter, eMarketer reports that it has more than a 90% mobile
search market share in recent months. But according to comScore,
it has only 50%.
What drives who uses what service in this realm? Part of the fate
of this future influence is whether we keep our computer-driven
relationship and trust with Google or follow the default of our
carrier. With traditional online, users tend toward the default. For
example, as cited by Danah Boyd, the change in Facebook privacy
policy moved 65% of users into the default public view mode. With
the Google Buzz launch recently, users following the default caused
an uprising of concern over opening up their friends and resources
to the world.
Cellular carriers, who split the search revenue with the search
engine, have arranged for default relationships. Carriers have affiliations with search engines as default systems, and have revenue
sharing agreements with their advertising.
22
23
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Present relationships include:
• iPhone/AT&T (4% of phones): Google (a big Google
growth driver)
• Sprint (12% of subscribers): Google
• T-Mobile (12% of subscribers): Google
• Verizon Wireless (31% subscriber share 12/09): Bing
• AT&T (as of 12/09, excluding iPhone, 21%): Other, including
Yahoo, which is the default search engine on the new Motorola
Backflip
Source: comScore, Mobile Marketer
So do people switch? If you count these affiliations, you would
have 26% Google, not north of 50%. And Bing’s phone share isn’t
31%. It seems that consumers aren’t following the defaults, but
instead following their own fandom of a branded search engine
from their web environment.
Microsoft and Yahoo are reacting on both mobile and Internet
search. Microsoft seems to have been courting Apple for iPhone
search. Microsoft and Yahoo recently received regulatory approval
to combine their search forces in to a new entity they are calling
Search Alliance, with Microsoft as the backend of Yahoo’s search.
Yahoo has disbanded its mobile search group into its business
units and lost T-Mobile US to Google. Microsoft’s Bing has been in
negotiations to take over the iPhone search business from Google
in this battle for handset default supremacy. In addition, Bing
already has relations with Facebook, which had 25 million users
access its platform through mobile in Jan. 2010 (comScore). Their
relationship, which started in 2008, will deepen with upcoming
improved Bing search integration.
Risk Story #3
Not Just 2.5 Words Anymore.
The story may not be as simple as a Google-dominated search
world or a new collection of walled gardens. The cell phone has
unique characteristics that may change the game and bring in new
players and considerations.
We’ve seen the embracing of GPS location data and the accelerometer on the iPhone letting place become key. These smartphones, however, also have cameras, microphones, and other
elements that can change the “immediacy” game. Options already
launched include:
QR Graphic Image Search.
QR (quick response) codes are two-dimensional bar codes that create a unique marker on a physical space or object. You may recall
them from CueCat in the US many years ago. That effort failed in
the US, but has blossomed in Japan. Google is shipping 100,000
QR codes to retailers throughout the U.S. to put on their products
so they can be scanned with mobile cameras and those impressions
can then be sent as searches to Google. Those searches will be
sponsorable and have location and identity data associated with
them. Games and iPhone apps already have been incorporating
these codes into real-world applications. This feature was introduced at South by Southwest, where conference attendees could
scan other badges and follow where those folks were going during
the show.
Inventory Search.
The business model also is to tie into available inventory at locations. This is similar to previous efforts with automotive inventories
and local search on the computer. It then connects where the
consumer is with the store that actually has the DVD, CD, book, or
other product on their shelves.
Photo Image Search Input.
You can take pictures and send them in for information from Google
already with Google Goggles.
Voice Search Input.
Using pieces from Grand Central, purchased in 2007, Google Voice
has been experimenting with voice recognition for some time. That
same year, it launched Goog-411, amassing voice message search
results and further enhancing their databases of both voice and local
queries. It has now launched through YouTube automatic transcription of videos. All of the above have challenges with proper nouns,
but Google is adding to their database and continues to fine-tune
this ability.
Will these input modes bias the competitive battle for Google?
Google isn’t alone in this. Many iPhone apps thrive on the changes
above. For Microsoft, Bing’s mobile applications also have launched
voice search back from their acquisition of Power Source, which
added semantic technology to apply to search. Bing is driven off
of faceted navigation, stepping the user through pre-filtered results
presented by vertical (e.g. maps, travel, restaurants, local, etc.).
Semantic search adds assumed intention and interpretation from
context and past behavior. Through faceted navigation, where your
results show up matters, as noted earlier, and even more so on a
smaller screen with the ability for “Right Now” action. Advertisers
will be eventually quite intrigued to enmesh in this action-affecting,
always-there system. So for media companies, this will significantly
impact who holds the reins and whom the public trusts for this prefiltered decision-making toolset.
Impacts from All Three Stories?
For content creators and distributors, I’d suggest watching the tea
leaves of change frequently, actively experimenting, and looking for
signs of change in risk, revenues, and relationships.
• There will be a drive toward more action/context-based media,
with ensuing interest from advertisers and subscribers. This isn’t
just clips and licensing—this is a full interaction and localized
input device.
• As this audience gets trained to buy, not just get for free, there
will probably be an increase in attention and attractiveness of
direct purchase.
• Mobile devices and their immediate data will have an increase
of influence on consumer use.
• Traditional advertisers will be figuring out how to play this game
and will probably have changing demands from branded content,
including pressures for more cross-platform plays.
• Deals will get squirrelly as we try to understand and shift risk
from these uncertain revenue streams.
• Data, data, data—We will be wrestling over data ownership issues,
cost of maintenance, possible liabilities, and many privacy concerns.
• New opportunities will bring in new middlemen and aggregators.
• We will wrestle with different generational expectations and not
just cord cutting (getting rid of cable subscriptions for Internet),
but possibly mobile-only young consumers.
• Marketing and branding will have to be re-thought to integrate
with mobile search environments.
• Fans will expect to contribute, instigate and mash up elements of
story in real-time on multiple platforms.
• Value will shift along the broad spectrum of localization and
globalization, with pressures for full global mobile rights and a
reduction in global barriers, plus abilities to deliver content in a
hyper-local or very targeted basis. How do we deal with jurisdictions and territories, including in existing long-term contracts?
Do media companies end up with the data from all of these streams?
Will rights for those additional features and factors—sensory inputs,
location-based data—change the way we produce, package, and
think of content? Will vertical search engines begin to sprout further
to push consumers one way or the other in a search mode? Will
new gatekeepers form that will shift large audiences on these small
devices? Will a whole other type of transmedia interactivity be built
into young viewers’ expectations and add cost without a direct
increase in revenue or predictability? Will Google dominate and
build that same unimpeded trust and revenue streams that it holds
online on our desktops and laptops?
Or will we need to understand a very technology-driven world of
fragmented rights, deals, APIs, and temporary re-aggregators? And
will this growing audience draw more cord-cutters and further question traditional production costs and relationships?
Some go so far as to say content is dead. At a minimum, all of
these questions are indicative of the extend to which the ground is
shifting under the feet of media, advertising and marketing executives as they seek to understand the shifts in power aggregators,
technology interfaces and rights issues. In the meantime, change
highlights the need to balance flexibility with protecting creative
interests in this rapidly changing mobile internet space.
By Gigi Johnson
• Interactivity—We will need to integrate many of the searchrelated elements, including ability to connect to past behaviors,
location, purchasing data, and personal and behavioral networks
into how we plan these business models and company networks
(and related deals).
24
25
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
AUTHOR PROFILE
gigi l. johnson
Ms. Johnson is executive director of the
Maremel Institute, a media/technology
research organization that works with companies to launch media, technology, and
education programs and partnerships. She
also teaches social technology classes and
workshops at UCLA Anderson, UCLA Music,
Columbia College, University of Navarra in
Spain, and Higher Colleges of Technology
in Abu Dhabi. She advises large and small
media organizations on partnerships and
strategic transformation, as well as speaks
as a socio-technology futurist at major
conferences and events. In addition to her
work with cross-platform media, she has
been expanding Maremel’s work in the nonprofit education sector, including two pilot
programs on connected media strategies
for non-profit organizations and production
of the 2009 UCLA Technology and Aging
Conference for the UCLA Center on Aging.
Since 2004, she also produces online
media for children’s technology and music
education and advises online education
organizations.
Until late 2005, she was Executive Director
of the Entertainment and Media Management
Institute at UCLA Anderson School of Management. Since 1999, she has run a variety of
institutes, programs, and classes at UCLA
Anderson for undergraduates, masters’ students, and senior executives. Past endeavors
have included Senior Vice President, General
Manager/Kids & Learning for Studio 4 Networks and SVP/Managing Director at Bank
of America’s Entertainment/Media practice,
with nearly a decade in media finance in
both Los Angeles and New York.
Ms. Johnson has been a long-time advisory
board member of the Interactive TV Alliance
and is a member of the Interactive Peer Group
of the Academy of Television Arts & Sciences.
She is on the advisory board of SparkWords
and advises senior management and boards
at several other digital media companies
and media non-profits. She has her MBA
from UCLA Anderson School, her BA in
Cinema-TV Production from USC, and is
finishing her doctoral dissertation in technology change in organizations at Fielding
Graduate University
26
27
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Multiplatform
Video Future
Depends On
Effective Content
Tracking and
Measurement
Solutions, Such as
Watermarking
As we slowly emerge from the worst advertising recession on record,
media and entertainment companies are regaining confidence in
the market and beginning to look ahead more aggressively at new
opportunities on the horizon. In particular, the promise of transitioning video content from a "walled garden" of cable, satellite and
telco TV into a multiplatform consumer video experience is commanding the attention of all the industry's major players.
The catalyst for this impending transition by the major video distribution players is as much a defensive effort to stave off leakage
of customers to non-subscription video choices (such as Slingbox,
Hulu, Boxee, etc.) as it is a move to reap new subscriber revenues.
But regardless of the impetus for it, this push is gaining momentum.
media. A digital watermark contains imperceptible digital information, also called its
payload, which can include anything the
owner chooses. Digital watermarks persist
as the image travels and is transformed,
and can be read at any point to determine
the image's unique identity.
While it is a nifty technology, the key here is
not the digital watermarking in and of itself,
but rather the business application of the
technology. The main media application of
digital watermarking is different than the
protection of content via digital rights
management (DRM), which provides more
of a lock-and-key approach focused on
preventing piracy. Where as DRM seeks to
restrict the illicit flow of content, the digital
watermarking system will allow the content
to be free, but will tag and track that content in order to demonstrate its origin and
form a basis for the business models that
will monetize content in the digital world.
Also gaining momentum is the understanding that media companies
can no longer delay necessary investments in the technology infrastructure that will allow them to build, measure, and monetize multiplatform video models. For instance, forensic technologies that
help monitor and monetize content in the digital arena will be at a
premium. This includes technologies such as digital watermarking
that can track and provide significant information regarding the
extent of video content's footprint across various media platforms.
According to the Digital Watermarking Alliance (DWA), the industry's
trade association, digital watermarking is the process of embedding
a persistent digital identity into images to provide the means for
effective management and tracking of digital assets across various
In May 2009, the DWA released findings from
a survey, conducted by interactive media
research firm Interpret, showing that the
inclusion of Digital Serial Numbers (DSNs)
in online content would deter illegal file
sharing. Based on a 994-person sample,
the survey found that DSNs would deter
illegal downloading among 33 percent of
respondents and would deter illegal uploading among 52 percent. The DSNs would
operate in a manner equivalent to a watermark, allowing consumers to freely access
and copy content, but making it possible for
the DSN owner to track and associate the
content back to its original source.
Digital watermarking service providers have
been on the scene since the early 2000s.
But while there has been significant promise and excitement about watermarking, the
media industry's uptake of watermarking
systems has been relatively measured, if
not slow. The pace may soon accelerate,
with major players such as cable operators
Comcast and Time Warner Cable moving to
the model—dubbed "TV Everywhere" by
Time Warner Cable—where their video content
can be accessed across multiple devices
and channels. A very sophisticated and
effective technology infrastructure will need
to be implemented by the video purveyors in
order to gain and maintain the confidence
of content owners, who are licensing their
content for these multiplatform uses and
do not want to see it pirated or otherwise
abused, and also want to ensure maximum
potential to monetize that content. There will
unquestionably need to be advanced digital
tracking and monitoring of the video content,
not only to try and minimize illicit content
consumption, but also (and even more
importantly) to know where, when, and how
this content is being viewed by consumers.
Among the key players to watch in the digital watermarking for video tracking space
are the Nielsen Company and Civolution. In
June 2009, Digimarc Corporation, a leading
owner of digital watermarking and mediaidentification patents, announced that it
entered into an agreement with Nielsen to
jointly launch two new companies that will
expand and extend their relationship to
enhance market intelligence on consumer
video consumption across television, the
Internet and mobile devices. More recently,
at a media industry event in early March
2010, Nielsen senior VP of media strategy
and development Scott Brown said that his
company would soon be introducing a new
content identification system that will help
track viewing on web video and mobile
platforms. He also indicated that Nielsen is
working with cable operators to help them
effectively measure viewing of its multiplatform video content.
Civolution is a company specializing in applying digital watermarking and fingerprinting technologies for media tracking and
measurement purposes. The company's
Teletrax division is a leader in applying
watermarking for tracking of video content
across the global broadcast landscape.
Over the past eighteen-plus months, Civolution has combined Teletrax with other media
watermarking and fingerprinting businesses
formerly owned by Dutch company Philips
and French company Thomson (now Technicolor) to create a focused media tracking
and measurement technology company.
The race to create effective infrastructure
and systems for tracking, measuring, and
managing video content across multiple
platforms will be a marathon rather than a
sprint. But content and distribution companies are realizing that they can't afford
to fall behind, and they are beginning to
invest aggressively to support their future
prospects in this area.
By Peter Winkler
28
29
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Navigating The Shifting Sands
Of The Media Landscape
AUTHOR PROFILE
peter winkler
No article, presentation, or conversation about the ever-evolving
media ecosystem can be considered complete without addressing the bewildering level of complexity we now face and
the apparently ever-increasing rate of change.
Though it seems a cliché, what it is is a reality. All that change
encompasses the wealth of challenges, threats, disruptions,
opportunity and choice upon which so many have fallen or
thrived over the last couple of decades. Whether upstart
start-up or incumbent leviathan, few—maybe none—have
escaped the consequences of changes wrought by the advent
of new technologies, the proliferation of choice and the shift
in consumer behavior. Not to mention some fairly radical shifts
in business practices.
Based in Los Angeles, Peter Winkler is Southern California/Phoenix Sales & Marketing
Leader for PricewaterhouseCoopers (PwC),
a leading provider of industry-focused
assurance, tax and advisory services to
companies around the world. He has also
served as Senior Vice President and Chief
Marketing Officer of Teletrax, the world's
first global video broadcast intelligence
and asset management service. He led all
global marketing, branding, communications and market development efforts for
Teletrax, whose clients include video providers such as entertainment studios, news
organizations, sports leagues, TV syndicators, and the advertising industry. Prior to
Teletrax, Peter served for six years in New
But while the facts of complexity and change in the world of
media and technology (and our lives generally for that matter)
may be acknowledged and often stated, we are still far from
fully understanding their ongoing impact and ramifications.
We are further still, from fully adapting the business process
to these new realities.
York, London and Los Angeles as Global
Marketing Director of PwC's Entertainment
& Media Practice, where he oversaw PwC’s
Global Entertainment and Media Outlook,
the industry’s top five-year international
market forecast. Peter also was a management consulting Director in PwC’s Entertainment & Media Advisory Practice, where
he specialized in advising multinational
companies regarding the impacts of digital
technology and industry convergence on
their businesses. He has been a frequent
press commentator on entertainment and
media industry trends, speaker at industry
conferences, and author of numerous white
papers and articles on industry topics.
These issues underpin the area of study and specific initiatives undertaken at Ball State University’s Center for Media
Design (CMD) within its Insight and Research unit. Formally
launched in 2003, the Center has established a national
and international reputation for the University as a center
of excellence in innovative media research and as a leading
collaborator with media companies brand and content owners and media, advertising and marketing agencies, with the
goal to deliver outputs that are both academically rigorous
and commercially actionable.
The mission of the Insight and Research unit is to deliver
meaningful learning into the evolving patterns of all media
consumption and use. Furthermore, the unit strives to develop a better understanding of the drivers and inhibitors of
the adoption of new devices and content (or service propositions) now and over the next 2-3 years. This fairly brief timeframe reflects the applied nature of our work. We try to help
businesses understand which of many changes are likely to
be both sustained and sufficiently rich in opportunity.
From this perspective, new technology and media platforms,
changing consumer behavior and innovative start-ups can
perhaps be said to be the hare to the tortoise of well-resourced
incumbents with turf to protect, established brands, and the
need to secure new revenue streams. The kind of research
outputs delivered by Ball State and others are essential to
ensuring that decisions made in this most unpredictable of
races are based on sound and objective insights and not on
versions of conventional wisdom, hyperbole, vested interest
or the all-too-common obsession with shiny new objects; the
latter of which has been seen time and again to be all too
prevalent in the worlds of media and technology.
We try to bring empirical principles of research and testing
to bear to determine what works and what does not for the
media industry—whether to inform the development of content or to measure the audience once distributed. This task
is aided somewhat by the very nature of digital technology,
which furnishes the researcher with vast amounts of data.
The result is that a far more scientifically based set of decision
tools are available, not to replace but as a supplement to
innovative and creative thinking.
After all, decision-making based solely on “what the data tells
us” is a sure symptom of weak and conventional management
thinking, whereas decision-making that uses data as a guidepost for management and creative teams to base their thinking upon is a sign of a company more likely to innovate and
gain competitive advantage.
30
31
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Breathing Media
For most of the post-war twentieth
century, the media world—from a
consumer perspective—remained
relatively unchanged. Television grew
and eventually introduced color, but
aside from new types of programming
and an increase in the average number
of in-home screens, the experience of
viewing stayed essentially the same.
Even the advent of cable and satellite
distribution only increased the number
of channels without altering the essential viewing experience. The same was
true for radion and print.
in so many different locations, it is exponentially more challenging to gain a
clear picture of the realities of modern
media consumption. Although research
and measurement within individual media silos (TV, radio, print, etc.) is more
and more rigorous, the data provided
for each silo remain disjointed from
the rest, making it all but impossible
to draw reliable conclusions about the
total picture of media consumption by
those disparate data sets together. Nor
can we rely on the reports of consumers themselves regarding their media
consumption. Studies that rely on this
date tell us more about consumers'
perception than their actual behavior.
Similarly, the world of advertising was
far simpler in what now seems like the
far-off halcyon days of the Mad Men era.
With far fewer media platforms to plan
and create for, life was infinitely less
complex. While the business demands
were still there, the sands underfoot did
not shift so treacherously as they do
today.
At present, the average American adult
spends in excess of eight and a half
hours a day exposed to some form of
screen-based media (fig.1). Add print
and audio and the time spent with
media occupies even more of our lives.
On average, we spend more time with
media than we spend on any other
aspect of our lives—including working
Today, we are enveloped by media wher- or sleeping. No surprise then that the
ever we go. Whether in the home or the rapid evolution of our media options
workplace; in the car or shopping and
and where and how we encounter them
socializing; on the streets or on vacation, demands a far deeper level of insight
we encounter or carry our media with
and understanding than has ever been
us. From active use of cell phones, TVs, necessary in the past.
computers and magazines, through passive exposure to radio, out-of-home TV
It was to address this demand that we
and billboards, we practically breathe
at Ball State developed a research
the media around us.
method that allowed us to systematically and quantifiably capture details of
While some decry this as a bad thing, all media use, wherever it takes place
the fact that the amount of media we throughout the day. We based this
consume continues to edge up suggests method on well-established practices
that consumers have a seemingly inof naturalistic observational research
satiable appetite for media-based
from the social sciences, using existing
content of one sort or another. And— hardware and custom-programmed
with some notable exceptions—most
data collection software. As a result, we
media consumption appears not to be are able to record observations on a
cannibalistic. It is primarily additive.
larger, more comprehensive scale than
previously feasible and on a far more
With such a vast choice in media, devices, granular level than before—with data
functions, and content available to them recorded every ten seconds throughout
the observed day (generally 14-15 hours
per participant).
This work has attracted significant attention and been defined as the new
“gold standard” of media consumption
research—especially with regard to
concurrent media exposure (CME).
Our observational method has been
scrutinized by the country’s leading
media researchers and has been tested
repeatedly in the field.
Since the first application of the method
—the Middletown Media Study in 2004
—and in subsequent studies and other
client-specific projects, the CMD has
extended the application of this method
for a range of media behaviors and contexts. The culmination of these efforts
was completion of the largest and most
complex CMD observational project: the
$3.5m Video Consumer Mapping Study,
conducted with Sequent Partners on
behalf of the Nielsen-funded Council for
Research Excellence.
We will typically ask study participants
to let our observers into their homes as
soon as the participant gets up in the
morning. The observer uses customized
software on a “smart keyboard” to log
the participant’s location, life activities
and use of specified media—generally
about 17 of them. The observer accompanies the participant through his or
her day, from location to location (e.g.,
home, work, car and other locations) as
needed. The result of a day’s observation
is a fine-grained, complex record of the
participant’s day in 10-second intervals,
describing the participant’s locations,
life activities and media uses (including
concurrent media exposures) for the day.
Observations allow for the creation of
summary measures (e.g., an average
media time budget) as well as for group
comparisons based on demographics
or other group definitions (such as those
generated by segmentation analyses).
This method is extremely time-consuming
and logistically demanding. However, to
date we have successfully completed
over 35,000 hours of observation, the
rough equivalent of 6 ½ years of one
person’s waking life, described in a variety of published and proprietary studies.
The True Face of Media Consumption
The observational method comes closer
than any other single measure of media
consumption to delivering a systematic
and quantitative assessment of how media are consumed relative to each other
in the lives of consumers.
Encompassing, as it does, so many media (generally 17) and the various ways
each can be used, the method provides
data on relative patterns of use from
a constant sampling gathered at the
same time. In particular, we are able
to obtain reliable data on exposure to
more than medium at a time, which we
call Concurrent Media Exposure (CME)
—something no other method delivers
as reliably. As our observers also accompany our participants wherever they
go we are also able to report where different media are used or encountered
to provide contextual information.
It was for this reason that Ball State’s
Center for Media Design was chosen—
with long-time industry collaborator Sequent Partners—by the Nielsen-funded
Council for Research Excellence to apply
its method to address the challenge of
defining just how the average American
consumes video media throughout their
day across all platforms capable of
delivering it. Published in March 2009,
the findings provide the most comprehensive insights to the subject yet delivered by any single study. The resulting
Video Consumer Mapping Study was
based on 952 observed days in five cities
around the US (Chicago, Philadelphia,
Seattle, Atlanta and Dallas—with a
supplemental sample in Indianapolis).
This group spends around 9.5hrs per
day with various screens whereas all
other groups total around 8.5hrs each.
A closer look at the mix of media for
this cohort and at the underlying data
The results speak volumes in defining
suggests that this is probably due to
the reality and the complexity of the
the fact that although this group has
average consumer’s media day. In cap- fully adopted the digital media that have
turing time spent with screen-based
emerged over the last twenty years
media, we not only tracked exposure
(perhaps for business reasons), they
to video, but also to every other use of
have also retained much of the media
those media and devices in order to de- use “training” they grew up with. These
liver a contextual understanding of the
Digital Boomers effectively sit on the
relative role of video on computers, mo- cusp between the two ends of the
bile devices, etc. For the same reason,
media use spectrum forming a behavwe also captured non-screen based
ioral bridge that equates to more overall
media such as newspapers, magazines screen time.
and radio. Nielsen and the Council for
Research Excellence have used this
It is also notable that even the youngest
data set to publish a groundbreaking cohort—18-24—spends a considerable
report on the use of different audio me- amount of time exposed to TV (around
dia from satellite and broadcast radio
three and a half hours per day).
through MP3 players and CDs, which
has received much attention.
We also found, contrary to the conventional wisdom, that no age group spent
Figure 1 shows how consumers distribute much time at all watching video online
their time across all screen based media or on mobile devices. Relative to the
and functions on the average day. In order time spent by the industry discussing
to give a complete snapshot of the pop- the importance and potential of this
ulation, these figures include both users area, this result came as a surprise to
and nonusers of the respective media.
many. One explanation for the apparent
anomaly is that our sample was designed
Broken down by age cohort, the date
to reflect the general population—not
both confirm and challenge some con- early adopters, users of online video
ventional wisdom. For example, while
or mobile video or even heavy users
we assume that older people tend to
of the internet. Much of the published
spend more time with TV than younger
research that relates to these areas
people, it is also commonly believed
has been based on samples or responthat younger people spend more time
dents who are known to be using such
with media—particularly screen-based
services (an entirely valid approach if
media—overall.
seeking to understand more about this
group) or on self-report—a less than
This study categorically refutes that
reliable source of insight.
suggestion. While the make up of the
media day in terms of screen-based
While the findings of the study were
media may be different by cohort, the
borne out at the time by a remarkably
time spent with these media is remark- close calibration with Nielsen’s own
ably similar across the board, with one
findings in the “3-Screen” reports which
exception; the 45-54 year-old cohort
track use of TV, online, and mobile video
that we refer to as the Digital Boomers. (and which use an entirely different
32
33
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
methodology), there can be no doubt that online video consumption has grown rapidly in the months since the study
was undertaken. Data published by both Nielsen and Comscore suggest that more people are viewing videos online
and spending more time doing it. The surprise was that this
increase was coming from such a low base in the first place
(the perceptions of many having been stoked by enthusiasm
and word of mouth rather than by data-based insight).
Hence it is clear that while the ways we use TV may be
evolving, TV itself—including the viewing of live, scheduled
TV—is far from being marginalized as some would have it.
Although other media continue to grow, it seems not to be at
the expense of TV. In fact, there are an increasing number of
studies that suggest the incremental use of media such as
the web are also increasing TV viewing figures.
Figure 2 shows the relative time distribution among all media.
In this case the data reflect the behavior only of users of the
given media, rather than the sample as a whole. From this
we see that Live TV is the dominant medium by both reach
(percent of the sample viewing Live TV the observed day)
and duration (average total time spent with the medium) as
against print, audio, email, etc.
Media in Context
While the changes in the media landscape have been significant, the broader social environment in which it sits has also
transformed—often as a result of the direct or indirect impact
of the emergence of different technologies.
Not only has the face of the workforce changed—impacting
who can be reached and when through different media—but
so has the balance between work and life. As computers and
mobile devices have entered our lives, they have fostered,
among other things, a tethering to our work responsibilities
beyond the old notion of the working day. In addition, many
more people now work more flexibly and remotely than ever
before; meaning that for significant numbers of the population there may be no “regular” pattern of behavior—something which old school media planning and buying and
program scheduling and promotion took for granted.
No longer are we purely passive consumers of media-borne
content made available at designated times and places. No
longer do we have to fit our lives around the schedules of
broadcasters or source content through only one medium or
platform. Today, media owners have to respond to the implicit
mantra of “what I want, when I want it, where I want it.”
Though this chant has almost descended to the level of cliché, this is simply because of its inherent truth. The fact we
continue to hear it so much in industry circles is an implicit
acknowledgement of the intractable challenges it presents
and the fact that they have yet to be surmounted.
The context of our media consumption has, in this way, changed
forever. As media channels and platforms have proliferated,
audiences have fragmented with the resulting impact on ratings and share of audience.
To reach and derive value from audiences today, media owners,
advertisers and their agencies need to be able to leverage
an understanding of which medium and which content is accessed in different locations and when different life activities
are undertaken.
Fig.1 How Consumers Accumulated Their Screen Time
Fig. 2 Relative Distribution Of Time Spent With Different Media –
By Reach & Duration
Source: Council for Research Excellence – Video Consumer Mapping Study.
©The Nielsen Company
34
Source: Council for Research Excellence – Video Consumer Mapping Study.
©The Nielsen Company
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
35
For example, which media dominate for
shoppers with children in the two hours
before the visit to the store; where do they
encounter those media and what else are
they doing? And when do those visits
typically happen for different sub-groups?
Equally importantly, which products are they
consumers of?
Likewise, when are parents most likely to
be spending time with their children; where
are they likely to be and what sort of things
are they doing? Which media, if any, are
prevalent at these times and which media
bracket these family moments?
With this kind of knowledge, programming
and advertising across different media can
be optimized to reach audiences at the best
times to be contextually relevant; thereby
delivering more intangible value to audiences and satisfying the needs of media
owners and advertisers to build and reach
audiences.
Gathering such a range of information from
a single source currently remains a significant challenge. At present, the media
research industry is heavily focused on
addressing the challenges of cross-media
measurement and while some effort is
being made to focus on the broader (nonmedia based) behavioral context of media
consumption, the difficulty of systematically
providing a scalable solution must not be
underestimated. This issue will almost certainly be tackled over the next two years or
so by a number of companies, singly or in
concert with other companies with complementary assets.
Research methods and cost structures have
been positively impacted by the application
of technology. Some wholly new methods
have emerged which enable research of a
nature previously impossible, to be delivered quickly and at low cost. Similarly, the
distribution of findings and the ease of
manipulation and interrogation of data have
improved beyond imagining.
At the same time there is quite simply more
to be researched. The advent of the web and
mobile media are just two factors that have
increased the scope of issues to be understood through research. And it seems that
never a year goes by without some development or innovation adding to the list of
categories to be addressed—the launch of
the iPad being a timely illustration of the
point. At Ball State we are already involved
in pre-launch consumer research around
the device and will continue with further
research as the device rolls out into the
marketplace.
One significant consequence of technological change for the research and measurement business is the rich data stream to be
derived from digital TV set top boxes (STBs).
Capable of providing second-by-second
monitoring of viewing behavior (or, more
accurately, tuner activity), the prospect of
gaining access to such data has marketers
and researchers salivating and privacy
advocates mobilizing their lobbyists.
The Changing Nature of Research
Cable and satellite companies are understandably wary of sharing this data, recognizing that even if the legal issues can be
successfully addressed, the court of public
opinion is likely to be far more brutal and
unpredictable in its assessment of the
implications of STB data being shared.
Just like the world of media and entertainment, the world of research is changing as
well. And again, part of the change is driven
by technology.
Although most interested parties are keen
to see only aggregated data rather than
personally identifiable data, there is still
considerable trepidation in this area. As the
research industry struggles to define exactly
what it wants, for what purpose and how it
can grant access to such data, others boldly
declare that they want to “own” the data.
Regardless of the small matter of whose
customer cable and satellite subscribers
actually are, one question that is often overlooked by those wanting to “own” the data
is the issue of liability. If one wishes to own
data, then one has to accept the liability
that goes with it—something not many will
be willing to do.
AUTHOR PROFILE
mike bloxham
In reality few actually want to own anything
—they merely want to agree on terms of
access to particular data sets for particular
purposes. The underlying principles of such
access are not particularly new or unusual
in contractual terms, but as STB data are
relatively new and sensitive, specific applications have been slow to develop.
This is just one important area in which
media research is evolving to meet the
challenges of the media landscape, the
new realities of media consumption and
the opportunities and threats presented
by new technologies. The way the media
industries operate in the future will remain
heavily rooted in the creative arts and
disciplines. But due to advances in the
research methods now being evolved at an
increasing speed, creativity will be framed
with parameters informed by the outputs
of empirical investigation. Research itself
will only flourish if it can rise creatively to
the demands of the changing media and
research ecosystem.
By Mike Bloxham
Mike Bloxham has worked in media research
and consulting for over 20 years, advising multinational corporations, media owners and government agencies on strategic marketing and communications issues on an international basis.
His clients have included Microsoft, Cablevision,
BSkyB, Le Monde (Paris), Procter & Gamble,
MTVEurope and the British Government (Department of Health; Central Office of Information—
handles all government advertising and external
communications; Department of Education and
Skills; Department of Trade and Industry). He has
extensive attitudinal and behavioral research
experience, and has worked on key projects in
interactive TV and emerging media, interactive
marketing and advertising, audience segmentation, usability and media lifestyle profiling with
an emphasis on interactive and emerging media
platforms.
As well as deep experience as a practitioner
and innovator in media and market researcher,
Mike has wide experience in sponsorship and
experiential marketing.
Mike became Director, Insight & Research at
Ball State University’s Center for Media Design
—a consumer and content-oriented Digital
Media R&D facility—in 2003. He—and the I&R
team—has become known for ground breaking
work in observational research into consumer
media consumption and measurement. The work
undertaken at the Center has been referred to
by many in the media and research industries
as the “gold standard” of cross-platform media
research and collaborations have been undertaken with EA Sports, NBC, Time Warner, Pepsico,
Procter & Gamble; ESPN and the Nielsenbacked Council for Research Excellence with
funded the $3.5m Video Consumer Mapping
Study—the largest media consumption study
ever undertaken.
He also works in emerging media research, eye
tracking and advanced usability testing. He has
long been a featured speaker at marketing, new
media and research conferences internationally.
He also writes regularly for Media magazine and
for MediaPost.
Mike is married with a nine-year old son and
considers eating a leisure pursuit.
36
37
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
MYSTERY
COLUMNIST
practices for e-discovery and obliged
lawyers to reassess their roles in assuring compliance. As opposed to the “seat
of the pants” approach that might have
characterized corporate response to
e-discovery demands six or seven years
ago, corporate litigants have since been
grappling with the need to be proactive
in their management of electronically
stored information.
E-DISCOVERY
amec convenes expert panels to
discuss electronic discovery in
entertainment and media litigation.
Judge Scheindlin opened the Pension
Committee decision with the heading
“Zubulake Revisited: Six Years Later”
and wrote:
Once again, I have been compelled to
closely review the discovery efforts of
parties in a litigation and once again
have found that those efforts were
flawed… By now it should be abundantly
clear that the duty to preserve means
what it says and that a failure to preserve
records—paper or electronic—and to
search in the right places for those
records, will inevitably result in the
spoliation of evidence.
©iStockphoto.com/MarsBars
In early March, I had the privilege of moderating two Continuing Legal Education
Programs presented by AMEC, one in New York and one in Los Angeles, which addressed emerging issues in the fast-developing field of electronic discovery from
the perspectives of in-house attorneys, outside litigation counsel and leading consultants in e-discovery and electronic data management1. The lively and thoughtprovoking discussions that occurred during these programs yielded a number of
useful insights for in-house counsel and other practitioners relating to the current,
and likely future, state of e-discovery in litigation in the entertainment and media
fields. I summarize some of those observations here.
The Recent Pension Committee
Decision and the Lawyer’s Role
in the Duty to Preserve Electronically Stored Data
routine document retention/destruction policies and put in
place a ‘litigation hold’ to ensure the preservation of relevant
documents.” A litigation hold is often triggered well before
the actual commencement of litigation, particularly on the
part of plaintiffs because of their greater control over the
commencement of suit. Both outside and in-house counsel,
as well as litigants themselves, risk sanctions if they fail to
diligently adhere to these requirements.
The Pension Committee arose from the
liquidation of two hedge funds. Ninetysix plaintiffs brought federal securities
and other claims against various parties
involved in the management of those
funds. As the litigation progressed, the
defendants noted substantial gaps in
certain of the plaintiffs’ e-discovery production and moved for sanctions. After
an exhaustive factual inquiry, the court
concluded that thirteen plaintiffs had
fallen far short of their e-discovery obligations under the Zubulake standards
and that spoliation of evidence had
resulted. Among other things, various
plaintiffs had repeatedly failed to issue,
in timely fashion, written and effective
litigation holds directing employees to
preserve and collect relevant records;
had relied entirely on their employees’
determination as to what records were
relevant, without supervision or review
by counsel; had delegated supervision
of the collection efforts to unqualified
employees; had failed to suspend document destruction policies, leading to the
loss of hundreds of relevant documents
and the destruction of backup tapes after
duties to preserve them had attached;
and had submitted to the court numerous declarations relating to the scope,
breadth and methodology of their preservation and collection efforts that were
either false, misleading, and/or executed
by declarants without personal knowledge.
respond to standards set by Zubulake,
Pension Committee, and other similar
cases. Outside litigators must “roll up
their sleeves” and be prepared to familiarize themselves with the details of their
clients’ IT and ESI systems and actively
direct and monitor their clients’ efforts
at compliance. Inside businesspeople
and creative personnel must become
better educated to the legal obligations
their employers and counsel face, in
addition to expressing a willingness
to assist in advancing those common
Judge Scheindlin awarded significant
interests. As part of this, non-legal
monetary sanctions against all thirteen employees, including creative personplaintiffs and also ordered two of them nel, should be trained to recognize and
to search backup tapes that admittedly immediately alert counsel to events that
still existed but had not been searched. might arguably trigger a litigation hold
In addition, seven plaintiffs were found because, in practice, they may be the
guilty of gross negligence—i.e., “a failure first to know about them. Also, content
to exercise even that level of care which developers should alert their creative
a careless person would use.” Judge
people to be mindful that relevant, disScheindlin agreed to give a jury charge coverable data can reside not only on
which stated, in part, that those plaintheir office PCs and corporate servers,
tiffs had, through their gross negligence, but also on their home computers, instant
failed to preserve evidence after the
messaging systems, cell phones and
duty to do so arose, and that, if it so social media. It was observed that many
chose, the jury could presume the lost
content generating employees, particuevidence would have been relevant and larly younger ones who have grown up
adverse to those plaintiffs.
entirely in the digital age and take its
advances for granted, might be shocked
The New York and L.A. panels both read to learn that text messages, Facebook
Judge Scheindlin’s Pension Committee postings, Tweets and the like can contain
decision as a signal that the legal and
information that must be preserved and
business communities have had all the produced in copyright infringement or
time they need to adapt to their new
other major litigations.
duties to preserve, review, and produce
relevant electronically stored data and
Once a “litigation hold” triggering event
that the courts will hold them firmly to
has occurred, in-house counsel and outthose duties from now on. The panels
side litigators should convene immedialso expected Pension Committee to ately, often with the aid of an e-discovery
quickly and broadly influence precedents consultant, in order to map the company’s
of other courts across the country, just
data inventory, identify key players and
as Zubulake did, and they agreed that
custodians of key files, ensure that
Pension Committee was urgently required document destruction procedures are
reading for any outside or in-house prac- effectively suspended, and make a thortitioner involved in e-discovery.
ough record of all the collected information for later certification to the court.
The Panelists had several suggestions
Also, a clearly understood allocation of
about how entertainment and media
responsibility between all parties to the
counsel and their clients can best
process should be arrived at early, and
38
The New York and Los Angeles CLE program panelists unanimously stressed the importance of the January 2010 decision in Pension Committee of the Univ. of Montreal Pension
Plan v. Bank of America Securities LLC. The author of the
Pension Committee opinion, the Honorable Shira A. Scheindlin of the United States District Court for the Southern District
of New York, is already well known to The Bar nationally for,
among other things, her landmark 2003 and 2004 opinions
on e-discovery in Zubulake v. UBS Warburg LLC.2 The Zubulake opinions enunciated, among other things, that “once a
party reasonably anticipates litigation, it must suspend its
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Several panelists observed that, prior to Zubulake, in-house
counsel tended to leave the supervision of e-discovery to
outside litigators. Outside litigators, by contrast, were reluctant to spend the time necessary to familiarize themselves
in detail with their clients’ IT and electronic data storage
systems—in part because clients were often reluctant to pay
them to do so. The Zubulake opinions forced institutional
litigants to revisit longstanding preservation and collection
39
the e-discovery “task force” should reconvene regularly to
ensure that all is being done that needs to be done and that
wasteful duplication of effort is avoided. This will help reduce
tensions between in-house and outside counsel and will assist
the client in arriving at an early assessment of the cost of the
process while keeping each participant focused on his or her
core competence.
When collecting and reviewing electronically stored information
(particularly information housed on backup tapes or other
hard-to-access formats), the team should think carefully
about whether the same material might be relevant to other
controversies, including those that may not have yet matured.
If so, they should preserve and organize it in a manner that
is easy to retrieve later. This may avoid the need to repeat
the entire exercise and reduce the risk that a charge will be
leveled, in later litigation, that relevant data which had once
been gathered was thereafter discarded (i.e., spoliated). This
approach has special merit in industries that struggle particularly with the “legacy problem”—the music business being
an excellent current example—where many major content
developers have, in recent years, gone through acquisitions,
mergers, and spinoffs, thus bringing together and pulling
apart IT and electronic data storage systems that may not
be compatible, and in which the creators and custodians of
relevant files are no longer available to assist in their collection or preservation.
Finally, several panelists noted that, unlike many other businesses, entertainment and media companies are largely unregulated when it comes to the creation and retention of their
electronic information and, in the absence of contractual
duties, generally have few obligations—before the onset of a
litigation hold—to preserve electronically stored information.
Therefore, if such information is not relevant to a reasonably
anticipated litigation—an important “if”, given the subjectivity of that question—entertainment and media companies
should give thought to adopting and consistently applying
written policies for aggressively “managing down” their data
inventories to avoid the cost, burden, and risk of sanction
that inheres, to some degree, in any e-discovery collection,
preservation, and production initiative.
Idea Submission
A Note of Caution for Plaintiffs Cooperation on E-Discovery
Both panels were asked whether the advent of e-discovery
had impacted the process of idea submission, and the general consensus was yes, and for the better. In earlier years,
a content developer facing a claim that it had, for example,
stolen the concept for a hit television show from an unsolicited submission was, to some extent, in the position of having
to defend itself by establishing the negative. One panelist
recalled that in the “age of paper,” networks maintained
archives of unopened mail presumed to contain unsolicited
ideas. When senders of those submissions sued, as they
often did, claiming their ideas had been the inspirations for
successful programs, the networks’ counsel could proffer the
submissions, still in their unopened envelopes, as evidence
that they had not been relied upon.
E-discovery decisions arising out of the entertainment and
media sectors in recent years have often involved efforts by
content providers to obtain extensive e-discovery from filesharing or similar services in an effort to bolster copyright
infringement claims, or to obtain sanctions against the
defendant for spoliating such electronic data. For example,
in Arista Records LLC v. Usenet.com, Inc., a 2009 opinion
in New York federal court, the plaintiff recording companies
sued a file sharing company and related parties for copyright
infringement. The defendants answered that their conduct
was protected under the safe harbor provision of the Digital
Millenium Copyright Act. Those safe harbor provisions, however, are not available to defendants who knowingly encourage
or foster infringement, and so the plaintiffs directed voluminous discovery requests to determine whether or not the
defendants had, in fact, knowingly encouraged infringement.
Upon finding that the defendants had engaged in a pattern
of discovery obstruction and had spoliated evidence that
might have shed light on those issues, the court precluded
the defendants from invoking the safe harbor provision.
That has changed. Most ideas, including most unsolicited
submissions, are now created and transmitted by electronic
means. The metadata attached to those electronic documents
permits very precise determinations about where, when and
by who they were created; to whom they were sent; who saw
them or revised them and when they did so. Several panelists reported that, in their experience, such evidence had
brought meritless idea submission claims to early ends. In
other instances, disclosing such evidence to prospective
plaintiffs’ lawyers had convinced them to drop matters even
before the filing of any lawsuit.
This development, one panelist noted, has had two positive
effects. First, obviously, it has discouraged the commencement
of bogus claims and spared the content providers and the
courts the burden and expense of dealing with them. Second,
it has broadened the pool of talent on whom the content
providers can safely and conveniently rely. Because the
creation, transmission, receipt and evolution of an unsolicited
submission can be much more precisely documented, developers feel less fear of engendering litigation and therefore
freer to work with such submissions. This gives those who submit
the unsolicited ideas a better chance to get their work considered and developed, which in turn promotes innovation of
content.
FOOTNOTES
On the other hand, it increasingly appears that plaintiffs in
such actions need to have their own e-discovery in order. In
August 2009, in another federal case in New York, Capitol
Records v. MP3Tunes, LLC, one of the plaintiffs, EMI, which
had itself promulgated significant e-discovery requests,
resisted producing certain of its own e-mails on the grounds
that to do so would be too burdensome. EMI explained that
it had no centralized server; in order to produce the requested files it would have to image the hard drives of each
of the relevant custodians and then conduct searches of
each of those hard drives for relevant documents. The court
accepted EMI’s argument—but just barely, writing “[t]he day
will undoubtedly come when arguments based on a large
organization’s lack of internal e-discovery software will be
received about as well as the contention that a party should
be spared from retrieving paper documents because it had
filed them sequentially, but in no apparent groupings, in an
effort to avoid the added expense of file folders or indices.”
Panel members on both coasts suggested that most judges
would have concluded that that day had already come, and
would have rejected EMI’s argument.
Several panelists noted that, in their experience, cooperation
with adversaries does not come naturally to litigants or litigators,
particularly with respect to discovery. Nonetheless, there was
widespread consensus among the panelists that in view of
the creation of vast amounts of electronically stored information in recent decades, along with the resulting complexity and
cost of e-discovery in litigation, the attitude must and is beginning to change. In 2008, the Sedona Conference issued a
Proclamation on Cooperation between counsel on discovery.
Judge Scheindlin, in Pension Committee, warned of the
potential for e-discovery to reduce “litigation to a ‘gotcha’
game rather than a full opportunity to air the merits of a
dispute.” And courts are increasingly construing the “meet
and confer” requirement of Rule 26(f) of the Federal Rules of
Civil Procedure to include a detailed, informed effort between
counsel to identify the nature and custodians of electronic
discovery in their possession and to arrive as cooperatively
as possible at a procedure for preserving and producing that
evidence in an agreed-upon form. Some courts and scholars
have encouraged the use of e-discovery consultants at these
conferences and at the subsequent Rule 16 conference with
the court. Clients, too, are increasingly pressuring their outside counsel to avoid the expense and delay of involvement
in disputes over e-discovery, many of which turn out to be
of little or no value, and instead act collaboratively on such
issues and proceed as directly as possible to the fight that
actually matters—the merits of the case. In sum, the panelists generally agreed that only by moving in this direction can
the potentially monumental cost of e-discovery be contained
and litigation remain a viable method for the resolution of
important business disputes. Some expressed concern that
cooperation will not be possible in circumstances where one
party wants expansive e-discovery—not for legitimate purposes,
but rather to simply harass and increase expense in the hope
of leveraging a quick and lucrative settlement. Most panelists
seemed optimistic, however, that as lawyers and judges become
more sophisticated with respect to the challenges and opportunities presented by e-discovery, these kinds of tactics will
be seen for what they are and will be: increasingly ineffective.
By Louis A. Craco, Jr.
40
In addition to myself, the participants in the New York Program were Warren
Solow, Vice President of Information and Knowledge Management at Viacom; Ellen
Hochberg, Esq., Counsel, Business and Legal Affairs at Sony Music Entertainment;
Fred Nemeth, Esq., Associate Director, Client Development and Strategy at Stratify;
and Brian Fox, Director of Advisory, Discovery Readiness and Information Management Consulting at PricewaterhouseCoopers. In Los Angeles I was joined by John
Berlinski, Esq., Vice President of Litigation at NBC Universal; Dyan Decker, Advisory
and Forensic Technology at PricewaterhouseCoopers; and Matthew Levy, Client
Development and Strategy at Stratify.
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
1
2
Judge Scheindlin was also a member of the Advisory Committee on Civil Rules
and a member of the Discovery Subcommittee that drafted the 2006 Amendments
to the Federal Rules of Civil Procedure, addressing the discovery of electronically
stored information. She is also a prolific author on e-discovery and a member of
the Advisory Board of the Sedona Conference, a leading voice of the legal profession in addressing all concerns surrounding e-discovery.
41
AUTHOR PROFILE
Louis a. Craco, Jr.
Louis A. Craco, Jr. is a partner at Allegaert
Berger & Vogel LLP, a New York litigation boutique.
He has over twenty years’ experience with the
pretrial, trial and appellate phases of complex
litigation and arbitration across a broad range
of industries. In the entertainment and media
fields, Lou has represented the film producer
Barbara DeFina in a New York action against
Martin Scorsese over rights in dozens of jointly
developed film and television projects, including
the Emmy® and Grammy® Award-winning
documentary No Direction Home: Bob Dylan.
Lou has also defended a prominent television
actress and pop singer against claims by her
website designer; represented the producers
of an award-winning documentary on the
pioneering underground artist and filmmaker
Jack Smith in an action to enforce a license to
original works in his archive; represented the
producer and screenwriter of a feature film in a
lawsuit that sought to enjoin its premiere at the
Sundance Film Festival; brought claims on be-
half of a well-known television personality for
breach of an endorsement contract and the unauthorized use of her name, voice, and likeness;
counseled a witness in an investigation of the
online defamation of one of the nation’s most
prominent business and political figures; represented the teenage members of a celebrated pop
group in a New York Surrogate Court proceeding
that secured approval of their record deal with
a major label; and counseled film and theatrical
producers, directors, actors, writers, publishers
and licensees in numerous other disputes. He is
a graduate of Wesleyan University and Fordham
University School of Law.
42
43
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
CYBER
INSURANCE
AND MEDIA
ORGANIZATIONS
As long as there is no clear victor in the arms race between hackers
and security professionals, breaches of data security will be a constant concern to any business dependent upon an online presence.
Hardware failure and electronic vandalism can cripple vital computer
systems. Digital distribution of content significantly enhance the
risk of liability for invasion of privacy and defamation. Improper
disclosure of personal data can lead to regulatory investigation or
civil litigation.
In the face of these threats, a media company may consider purchasing a “cyber insurance” policy. “Cyber insurance” is a general
term for a type of policy that provides coverage for any of a variety
of computer-related losses. The most common elements of cyber
insurance are security and privacy coverage, which provides protection
against losses related to breaches of security and data privacy, and
media coverage, which provides protection against claims based on
published content (including suits for defamation, invasion of privacy,
and, in many cases, infringement of intellectual property rights).
Some insurers may also offer modules providing coverage for losses
resulting from equipment failure or vandalism, “cyber extortion”
(i.e., losses resulting from threats to interfere with computer operation), business interruption, and destruction or restoration of data.
But while cyber insurance can provide some peace of mind regarding
uncontrollable computer-related events, it also raises issues that
companies may not have had to consider in connection with their
other types of insurance policies. Applications for cyber insurance
may require the disclosure of detailed technical information that
can be difficult and time-consuming to obtain and to verify for accuracy. The scope of coverage under a cyber policy can be subject
to exclusions and other limitations that reduce the value of such a
policy unless carefully negotiated. Provisions of standard form cyber
policies may also provide the insurer with broad rights that can
interfere with the insured’s business or have an unforeseen impact
on the insured’s First Amendment rights.
This article reviews specific issues that a media organization might
encounter with respect to cyber coverage, including (1) during
the application and underwriting process, (2) when examining the
scope of coverage under a contemplated policy, and (3) in conducting business while a cyber policy is in force.
Application and Underwriting Issues
When applying for cyber coverage, a media organization should be
prepared for a comprehensive, searching, and time-consuming
inquiry into all aspects of its Internet and computer operations.
At the same time, the organization must beware of making broad
representations as to the comprehensiveness or ongoing validity of
the information that is provided in response to such an inquiry.
A. Scope of Information Required by Insurers
As a starting point, an insurer will require an applicant for cyber
insurance to provide an overview of the applicant’s Internet and
electronic network operations, including but not limited to: identification of what, if any, information technology operations are outsourced (e.g., storage, hosting, data back-up, business operations,
analytics, or financial transactions); the amount of time that the
company and/or its employees spend on transactions over the Internet or other electronic networks; the types of information held in
company databases (such as the amount of personally identifiable
information regarding employees, customers or others); and the
number of customers or third parties that rely on the applicant’s
network or Internet services.
Applications for cyber insurance will also request a wide range of
technical information, including information regarding: anti-virus,
encryption, firewall and other network security measures, data
recovery and restoration procedures; electronic devices used by
company employees; and software used to manage and monitor
intellectual property applications and registrations (such as monitoring of trademark applications or logging of developments in patentable technology).
An insurer is also likely to require a media organization to provide
detailed information about its internal data security and privacy
policies. Such an inquiry can encompass internal data security
policies, data security agreements with vendors, and online privacy
policies directed at customers or site visitors. An insurer may also
require information about agreements used to protect intellectual
property, such as licenses and non-disclosure covenants. The insurer
will also want to know whether these policies and agreements are
actively enforced, and whether a record is kept of any history of
security breaches or other data failures.
It is likely that a media organization will need to obtain information
from a wide variety of individuals to complete the application, and
an insurer may either request or require that an applicant retain an
independent third party to provide an assessment or audit of the
applicant’s electronic operations. Such an audit can be very timeconsuming if the applicant does not routinely monitor its online
and computer activity via a third-party service. Moreover, a media
organization should be prepared for the insurer to request all work
papers, communications, and other documentation related to such
an audit. Such a request can itself pose confidentiality issues unless
the insurer enters into a confidentiality agreement with the applicant.
B. Representations Regarding Supplied Information
Because of the breadth and detail of the information requested,
the particular susceptibility of technical information to change
on short notice and the need to draw information from multiple
sources, a media organization should beware of providing broad
representations and warranties to an insurer that any information
furnished is accurate. Similarly, the organization should avoid
unworkable representations regarding the efficacy of privacy and
security policies, given that employees will never comply perfectly
with such policies. If an insurer insists upon such representations,
the organization should review the terms of the policy carefully for
the consequences of any inaccuracies in the information provided
to the insurer.
Organizations should also beware of state laws that might allow
an insurer to rescind a policy or otherwise void coverage in the
event of a material misrepresentation or breach of warranty by the
insured in the application. In the context of a cyber policy, these
statutes could allow an insurer to deny coverage if one aspect of
the organization’s technological information is omitted or inaccurately described, even if that aspect is unrelated causally to the
loss for which coverage is sought. Such statutes may also allow
an insurer to void coverage where the organization makes changes
to its security systems or privacy policies during the policy period
without the insurer’s consent.
Larger organizations in particular may not be in a position to guarantee that all information provided is accurate, and that no material fact has been misstated or omitted. Rather than risk a denial
of coverage, a media organization should consider negotiating for a
limitation on any warranties and representations of accuracy, such
that the organization is only warranting with respect to the knowledge of certain individuals within the company, or that best efforts
have been used to gather the information. The organization should
also make its representations regarding compliance with internal
policies subject to an exception for unintentional errors. If the application is for coverage of multiple companies within a corporate
family, the organization should also negotiate for the inclusion of a
“severability” or “carve out” clause, such that any denial of coverage based on a perceived misrepresentation by one company does
not affect coverage for any sister or parent entity.
Issues with Scope of Coverage
A second issue in cyber insurance is scope of coverage. Media organizations must be clear precisely what is and what is not covered
under their policies.
A. Exclusions for Losses Caused by Violation of Privacy Laws
Laws such as the California Online Privacy Protection Act and the
Federal Children’s Online Privacy Protection Act impose specific
requirements on Internet-based businesses with respect to their
policies governing users’ personal information and privacy. More
general data security regulations, such as those recently promulgated by the Massachusetts Office of Consumer Affairs and Business Regulation, require detailed procedures and practices with
regard to the security of personal data, regardless of whether the
data is stored in hard copy or electronic format.
While a typical cyber policy will provide coverage for losses resulting from a company’s failure to properly handle, manage, store
or delete private information, such a policy may simultaneously
exclude coverage for liability resulting from failure to comply with
statutes such as those noted above. Such exclusions may be
explicit. A policy may also exclude such coverage implicitly by excluding losses resulting from the same type of conduct that these
statutes are designed to address. For example, cyber policies will
frequently exclude coverage for privacy liability arising from a failure
by the insured to provide adequate notice to third parties that it is
collecting private information as part of its Internet business. This
is essentially the same conduct prohibited by the California Online
Privacy Protection Act. In effect, this exclusion avoids coverage for
liability arising from failure to comply with the California statute.
For that reason, media organizations should carefully review both
the defined coverage in a cyber policy and all exclusions. They
should also beware of relying on cyber coverage as an alternative
to complying with applicable privacy laws and regulations, and may
wish to consult with counsel as to their status with respect to such
laws before obtaining cyber coverage.
B. Failure to Include New Technologies in Scope of Coverage
The media portion of a cyber policy normally provides coverage for
damages arising out of the content published by the insured for
infringement of copyright or trademark, rights of privacy or publicity,
defamation, or other similar causes of action. However, the policy
must be examined to be sure that it extends coverage to all methods of content distribution used by the insured.
Notwithstanding the focus of cyber policies on digital information,
the media section of a cyber policy will ordinarily include coverage
for most traditional forms of publication, including broadcasts on
44
45
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
television and radio and/or publications in print. Cyber media policies
will also include coverage for publication of information on Internet
websites. Depending on when it was drafted, a cyber policy might
also omit other methods of distributing content, such as podcasting,
text messaging and other mobile technologies, use of social media
by employees, or non-browser-based Internet services.
Applicants for coverage should review their own practices in terms
of both the media currently being used by the applicant and media
likely to be used in the future, in order to be certain that the language
of the policy is flexible enough to encompass such technologies.
Alternatively, a media organization’s existing liability policy might
provide more comprehensive coverage, making separate media
coverage in a cyber policy unnecessary.
C.Intellectual Property Coverage
Intellectual property is the core asset of an Internet-based business.
Such property can include patents for website technology, copyrights in website content, trade secrets with respect to technology
and business strategies, and trademarks such as website domain
names. The extremely competitive nature of Internet commerce has
at various times given rise to litigation over these varieties of intellectual property.
For that reason, an organization should carefully consider the
scope of a cyber policy’s coverage for intellectual property claims.
While cyber policies will often at least mention patent, trademark,
and copyright claims, other forms of intellectual property claims
might be overlooked. In addition, intellectual property claims related to Internet conduct are often brought in forums outside of the
United States court system. Even if a policy might provide coverage for a specific type of intellectual property claim, it might not
provide for defense or indemnity of that claim in a non-traditional
forum, for a claim brought in the form of an arbitration demand or
other proceeding outside of the policy’s definition of a “suit,” or for
a claim as to which only declaratory or injunctive relief is sought.
Such omissions from coverage can have serious consequences,
because insurers’ coverage counsel will read policy provisions as
narrowly as possible once a claim is presented. For example, while
claims relating to cybersquatting and other forms of domain name
misuse are conceptually related to trademark law, such claims
might not be covered under a policy that only provides coverage for
trademark infringement. A website operator against whom domain
name misuse is alleged can also find itself subject to international
arbitration procedures before an entity such as the World Intellectual Property Organization, which might not apply United States
legal standards to the claim. An insurer would likely deny coverage
for the costs of defense or indemnity if the policy fails to include
coverage for claims in arbitration before an international body, or
claims seeking only injunctive relief.
Cyber policies may also omit or limit coverage for intellectual property
claims in circumstances where the insured is able to take steps to
avoid liability. For example, a policy might exclude coverage for
claims relating to ownership of copyrighted material asserted by
independent contractors or employees. Such claims might arise
out of contracts for the design of a website, or for the software
that runs the site. However, because these claims can ordinarily be
avoided through careful drafting of work-for-hire agreements, an
insurer might refuse coverage for such claims as being within the
insured’s control.
Similarly, policies often exclude coverage for claims arising out of
copyright infringement by third parties who post content to the
insured’s website, or claims asserted by industry organizations active in preventing copyright infringement over peer-to-peer networks.
While third party infringement is not necessarily within the insured’s
control, insureds in the United States might be able to obtain statutory protection against liability by taking affirmative steps to comply
with the “safe harbor” provisions of the Digital Millennium Copyright
Act, 17 U.S.C. § 512.
Thus, when reviewing a cyber policy, the applicant should check
whether the coverage for intellectual property claims is comprehensive, and whether it has taken all separate steps necessary to
obtain protection from liability for excluded causes of action.
Living Under a Cyber Insurance Policy
If a media organization successfully obtains a cyber insurance policy with appropriate coverage, it can still face difficulties in dealing
with an insurer that has retained broad rights under the policy to
control settlement of claims and monitor the insured’s operations.
A. Right to Settle
A policy that gives the insurer a unilateral right to settle claims can
have an impact upon the insured’s assertion of its First Amendment
rights in litigation.
clear.” These penalties can include an award of multiple damages
and attorneys’ fees against the insurer. In the event of an adverse
judgment against a media defendant, an insurer with the right to
settle might determine that liability is reasonably clear, and determine to settle the case without prosecuting an appeal in order to
avoid exposure for penalties under the state statute.
As a result, a defendant might lose its constitutional right to review
of an adverse verdict. Applicants for cyber coverage should consider
negotiating for inclusion of a provision with respect to the insured’s
right to participate in the management or settlement of a case.
For example, an insurer usually will agree to accept a provision
that limits its coverage in the event of a final adverse verdict to the
amount that it was willing to pay in settlement.
B. Right to Review and Monitor
Applicants should seek to limit policy provisions that give an insurer a right to inspect, to review or to monitor security procedures
used by the company. Such provisions potentially give the insurer
the ongoing right to review any computer-assisted control or function performed by the insured, from password access to company
desktop computers, to encryption routines on electronic mail and
wireless devices, to online registration and transaction procedures.
In addition to the disruption of the insured’s daily operation, such
monitoring potentially could reveal confidential or sensitive information to inspectors.
Conclusion
Cyber insurance can be an important part of a media organization’s
risk management strategy. It can provide additional protection against
uncontrollable losses relating to the operation of the organization’s
online business and information technology. However, a media
organization considering applying for cyber coverage should not expect that coverage will substitute for the use of sound risk management procedures. In fact, the security procedures that an insurer
might require as a condition of coverage during the underwriting
process might be so comprehensive and costly that the coverage
itself is superfluous.
A media organization considering cyber coverage should review the
applications carefully, and should ask its broker to obtain specimen
policies in order to review both the scope of coverage and the rights
and obligations of the insured. When possible, provisions should be
negotiated through insurance counsel to eliminate potential gaps in
coverage or impractical requirements imposed on the insured. Even
when a media organization has already obtained cyber insurance, a
review of existing coverage can identify potential issues that insurance counsel may be able to resolve through renegotiation and
redrafting of the policy.
By Jeffrey P. Hermes
While an insurer may have a legitimate interest in evaluating the
security systems of the insured, the right to monitor such systems
should be subject to reasonable limitations so that the insurer
does not interfere with the efficient operation of the business. For
example, an applicant might seek a limitation stating that security
inspections by the insurer will take place on a routine schedule, or
only following a reported breach of security. Moreover, the provision
should be limited such that the insurer is not entitled to access the
contents of any secure file or communication.
In defamation lawsuits and other matters where free speech rights
are at stake, a defendant who suffers an adverse verdict at trial is
entitled under the First Amendment to a searching, de novo review
of the constitutional sufficiency of the plaintiff’s claim. Plaintiffs’
verdicts in defamation cases have historically high reversal rates on
appeal, because of the strict constitutional standards applicable to
such claims.
On the other hand, in cases that do not involve constitutional
issues, the insurer is obligated to make a reasonable settlement.
There are statutes in every state prohibiting insurers from unfair
settlement practices. These statutes typically impose severe penalties on insurers that fail to settle cases when liability is “reasonably
46
47
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Does Your Insurance Company Reach for the Dictionary
When It Hears Terms Like These?
AUTHOR PROFILE
jeff hermes
Jeffrey P. Hermes practices at the forefront
of emerging issues in Internet and media law,
including content-based litigation and intellectual property licensing, social networking
and digital distribution, and user privacy and
data security. Jeff has represented a wide variety
of media outlets in connection with Internet
and traditional media issues, both advising his
clients on business matters and representing
them in intellectual property and content-related
litigation. His clients have included an international media network and its subsidiaries, major
metropolitan newspapers, local broadcasters on
television and radio, Internet-based publishers
and social media networks.
Security breaches and denial-of-service attacks. Critical equipment failure and
loss of data. Exposure to liability from user-generated content and employee use
of social media.
Your business has successfully made the transition to new media. But has your
insurance coverage done the same?
The attorneys of Hermes, Netburn, O’Connor & Spearing are at the forefront of
the law surrounding insurance and digital media. We have direct experience in
evaluating our clients’ existing digital media insurance policies, and helping our
clients to negotiate and to acquire cost-effective coverage to ensure that they are
protected against the risks of an evolving world.
H N O S
Hermes, Netburn, O’Connor & Spearing, P.C.
Insurance Law • Digital Media Law • Complex Litigation
www.hermesnetburn.com | 265 Franklin Street • Boston, Massachusetts 02110
© 2009 Hermes, Netburn, O’Connor & Spearing, P.C.
NOTE: Under the rules that govern the legal profession, these materials may be considered ADVERTISING.
48
49
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
you can't go
home again
MEASURING UP
OPPORTUNITIES
©iStockphoto.com/bjones27
You Can’t Go Home Again. Despite record box office revenues,
legal jobs in the entertainment industry are contracting from
all sides. With entertainment company law departments
shrinking through layoffs and consolidation and law firms hiring fewer lawyers and making fewer partners, job security is
an important concern for many entertainment lawyers.
Where is the best job security today for entertainment lawyers? Is it in law firms or inside entertainment companies?
Virtually all entertainment lawyers start their professional
lives in non-entertainment law firms for the simple reason
that entertainment companies, unlike those in many other
industries, have insisted for decades on hiring only seasoned
lawyers. Entertainment companies say, “we are in the film
business or record business, not in the business of training
lawyers” and generally require at least five years, and sometimes as much as ten years experience even to consider
hiring a lawyer.
Most opportunities for in-house entertainment jobs come to
lawyers who are “discovered” working for a multi-practice law
firm that represents entertainment companies in litigation,
intellectual property, or financing work. An executive or inhouse lawyer observes good quality lawyering and offers to
pluck the lawyer out of the law firm. The boutique entertainment
law firms follow a similar pattern, generally hiring lawyers with
experience, rather than recent law school graduates.
There are many reasons an offer to move in-house may be
compelling. The first is the sex appeal of the entertainment
industry. The industry is full of creative and exciting people
and projects. By contrast, the law firms that have become
“feeder” firms for entertainment company law departments
have become less pleasant places to work. The pressures
there to bill hours and generate business are relentless at
every level and there is less job security than there was, even
for partners. Another lure of going in-house, particularly at
the intersection of new and old media, is the possibility of a
big return from stock options (though in many cases this may
be a trade-off for a cut in salary).
But a move in-house is not necessarily a flight to job security.
There is one harsh reality. For most lawyers, it is a one-way
street from a law firm to an in-house entertainment industry
job. There is no equivalent to the revolving door between law
firms and government jobs that we see in Washington. So
lawyers who are considering leaving a law firm for a job at a
studio or other company must consider their options down
the road before making a leap.
50
There are great benefits for lawyers who
work in law departments and business
affairs. Even though layoffs in companies
have resulted in longer hours and smaller
staffs, in-house lawyers still report great
job satisfaction. Adina Savin, Executive
Vice President of Business and Legal Affairs for the Disney/ABC Cable Networks
Group, suggests that one reason is that
being fully immersed in the business
may give inside lawyers and business
affairs executives a better understanding of the business significance of the
legal advice they provide. Another longtime in-house entertainment lawyer attributed her job satisfaction to being in
a highly collaborative work environment,
which led her to feel she was making a
greater contribution than she had as an
outside lawyer.
There are exceptions to the rule of no
return, of course, especially for very
senior ranking in-house lawyers and executives. When John Schulman recently
retired as Warner Bros. General Counsel,
he became chairman of the entertainment law department at Mitchell, Silberberg & Knupp. Sandy Litvack retired as
Disney’s General Counsel and rejoined
Dewey Ballantine and then became a
partner at Hogan & Hartson. Lou Meisinger took a similar route, from Disney’s
General Counsel to Sheppard Mullin
(and then to the bench). When Frank
Rothman ended his role as Chairman
of MGM back in the 80’s, he helped
Skadden Arps build its Los Angeles
office. Each of these lawyers, however,
had also been very successful in private
practice before going in-house.
But if an in-house job does not work out,
the entertainment lawyer’s options may
be more limited than expected. The
admission ticket for lateral partners
to most law firms is a book of business—which lawyers coming out of law
departments rarely have. Law firms
are looking for portable business and
concrete sources of revenue from lateral
lawyers, not an optimistic pitch about
their future prospects based on the
wonderful contacts they made in-house.
The fact that a lawyer may have had a
significant client following before going
in-house is not enough for most law firms.
They have seen the difficulty faced by
returning lawyers in reestablishing those
relationships. Too often, the clients have
moved on to other lawyers, often at a
competitor’s shop, especially if they
were upset in the first place by their
lawyer’s move in-house.
There are others who have successfully
transitioned back to established law
firms. Kenneth Kaufman, a Manatt partner in Washington, DC, used his stints
as the first in-house general counsel
at Showtime and the Kennedy Center,
where he slashed the overall legal
budget, to develop an ability to work in
a cost effective way which has served
him well in private practice. Arnold Peter
capitalized on his experience at Universal Studios’ negotiating major labor
agreements to join the mainstream law
firm Locke, Lord, Bissell & Liddell, LLP
before founding his own firm, Peter,
Rubin & Simon, LLP.
served as executive vice president and
director of a major studio, United Artists
Corporation, and then as president and
chief operating officer of Weintraub
Entertainment Group, an independent
motion picture, television, and music
production/distribution company.
Though Kleinberg has forged a second
highly successful law practice, he cautions that most lawyers who go into
corporate life from law firms don’t—and
can’t—come back. He also notes that
law firm lawyers whose client relationships have not been disrupted by stints
working in entertainment companies
have a significant competitive advantage.
Many of the giants in the entertainment
bar, like Ken Ziffren and Bruce Ramer,
have worked continuously in their law
firms.
Going in-house with the expectation of
spending a career there because of the
positive lure of greater job satisfaction
makes sense. But going in-house to
escape the difficulty of law firm life is
a riskier proposition. If it doesn’t work
out, the entertainment lawyer trying to
return to the private sector may face the
double jeopardy of lost client relationships and closed doors.
If you can’t go home again, are you really
ready to make the leap?
By Karen Kaplowitz
Lawyers who return to the private sector
also have the option of hanging out
their own shingle. When Kenneth Kleinberg of Kleinberg, Lopez, Lange, Cuddy
& Klein LLP in Los Angeles concluded
two major jobs at entertainment compaFor most lawyers leaving an in-house
nies, he could have returned to a major
legal job, the main option is another
law firm but chose to establish his own
in-house job or another non-legal job in entertainment boutique with partner,
an entertainment company. With layoffs Bob Lange. In the first phase of his caand consolidations reducing the num- reer, he served as an associate, partner
ber of available jobs, there are a lot of and head of the entertainment practice
entertainment lawyers chasing a smaller at Mitchell, Silberberg & Knupp. Bepool of in-house opportunities.
tween late 1985 and 1991, Kleinberg
51
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
THE DEMYSTIFICATION
AUTHOR PROFILE
OF TECHNOLOGY
karen kaplowitz
(Expressed lovingly.)
Abracadabra
Technology… dance with me boo
Will somebody please cue-up that classic Steve Miller Band song for me
while I write this column on The Demystification of Technology? Come on,
sing along:
The purpose of my TechFly column is to demystify technology. Therefore, I
was glad to see an entire Insights magazine dedicated to the topic. Here’s
the way I see it: If I can get motivated to leverage technology, find my purpose and put my stamp on history, so can a whole bunch of other people.
Let's keep it real. Aren’t the current global circumstances reason enough
to embrace a tech future? The world has changed considerably of late.
The jobless rate in developed countries is at an all-time high, while third
world countries are leaping over the digital divide in search of personal
empowerment and financial freedom.
I heat up. I can’t cool down.
Got me spinning round and round.
Round and round and round it goes.
Where it stops nobody knows.
Abra abracadabra.
I wanna reach out and grab ya.
This is the first in a series of columns about
the careers of entertainment lawyers written
by Karen Kaplowitz, a business development
consultant to lawyers. Karen was a trial
lawyer in Los Angeles for over 25 years. As
a partner at Alschuler Grossman & Pines,
she represented entertainment companies
in a wide variety of litigation matters before
founding The New Ellis Group, a business
development consulting firm. Karen publishes a biweekly newsletter for lawyers on
business development, which is available
at http://newellis.com/. As a consultant,
Karen has continued her involvement in the
entertainment industry, helping to build the
Distributed Computing Industry Association,
www.dcia.info, a trade group with over 100
members including law firms who deal with
all aspects of digital media and entertainment.
Steve belts the perfect song about a girl who has a guy going nuts. The
guy literally feels magic when she touches him. He is set ablaze when
she calls his name. “Burning flame full of desire. Kiss me baby, let the fire
get higher.” Oh my, this is out of control. I don’t care what you say… we all
want to be in this exact, loving-something scenario.
Ok, I know I chopped up the first verse and chorus a bit. But go with me for
a moment. The way Steve used love to demystify how he feels about a girl,
I want to use love and this column to demystify technology. That’s right, I
want you to fall in love with technology like Stevie-boy just put it on that
girl. Technology, too, is going to have you spinning round and round. Like
good love… technology is going to make you laugh and cry but you feel the
magic. “Abracadabra.”
I will feel like I’ve accomplished something important if one single unemployed person reads my article and starts a tech business or supports
someone who has. I will have won with this article if even one kid reads
this and is inspired to view their cell phone as a way to become wealthy
and ultimately give back to her community. Applaud me only if I am able to
spark action toward leveraging technology to provide for one’s self, family
and society.
To me, technology is a big deal. So I am going step up and do more than
the imaginable. I am going to put technology into its proper place and
perspective forever. For all those that suffer… your head will hurt no more.
You will have a crystal understanding of exactly what is going on with
all this technology. When I am finished demystifying technology you will
eternally love her.
I’ll answer where we’ve been, where we are at and where we are going.
You’ll know exactly what you should do and why. My absolute, ultimate goal
is to get you confident and in bed with technology. I hear you saying, “Voila,
show me to the moolah!” First, let me break this baby all the way down to
the ground.
52
53
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
In the beginning…
A gorilla will use a branch as a walking stick to gauge the water’s depth.
A chimpanzee will use a stone hammer to crack nuts. A beaver’s dam, a
bee’s honeycomb, a crow’s nest and anthills are the result of the animal
species’ use of technology.
Like animals, humans use technology to address needs. It is that simple.
Our need for food, safety, love, respect and creativity is at the core of what
propels technology forward. In 1943, Abraham Maslow wrote a paper
called A Theory of Human Motivation. All of the most popular technology
advancements of the 20th century can be connected to Maslow’s pyramid of
most important human needs.
It is human nature to want to learn, connect with others, and solve problems. Therefore, it is in our human nature to use technology. Some more
advanced then others, but technology nonetheless.
People care about human interaction. We care about staying in touch with
each other. We want information. We also care about providing for ourselves
and for those that we most care about. We care about simplicity and creativity.
This combination of realities can be found at the heart of our desire for an
iPhone, Facebook, Linkedin, Twitter and many other modern day products
and services built on top of arguably one of the greatest technology
advancements of all time, the Internet.
Prior to being published I may include a diagram of media innovation.
There are mavericks among us.
The most original minds win. To set the record straight, most truly successful leaders (mavericks) think inside and outside the box. Inside the box is
where they feed the unquenchable thirst for knowledge. Outside the box is
where they out-execute everyone.
It is so tempting to try and replicate what has been done before. By the
way, this is easier said than done. It is most rewarding, personally and
economically, to invent what previously did not exist. And you can’t truly
get there by being someone who only thinks outside the box. Let me make
myself clear. [think] inside the box. [execute] outside the box. If you are
still thinking you are probably still inside the box. If you are ready to kill
something you are probably outside the box.
Study the past and learn all you can about what is going on. For example,
learn absolutely everything about what customers are saying about products they are currently using. Then set dynamite to the corners, blow the
box sky high, and execute like a maverick on a freaking mission.
Blowing out the Mystery of Technology
The Internet, social networking services, computers and mobile phones
would not exist if they weren’t addressing at least one or more basic
human needs. People too often get caught up in how something works
instead of seeking an understanding of why. Let's take a quick look:
What is a computer? A computer is a programmable machine that receives
input, stores and manipulates data, and provides output in a useful format.
Why do people love computers? We love computers because we want to
be productive.
What is the Internet? The Internet is a global system of interconnected
computer networks that serves billions of users worldwide.
What is social networking service? A social network service focuses on
building and reflecting of social networks or social relations among people,
e.g., who share interests and/or activities.
Why do people love social networks? People want to use social networks
for dating, business, and educational purposes.
What is a cell phone? A mobile phone is an electronic device used for
mobile telecommunications over a cellular network of specialized base
stations known as cell sites.
Why do people love cell phones? People want to keep in touch with family
members, conduct business, and have access to a telephone in the event
of an emergency.
Why do we love the Internet? We want information, more business at a
lower cost, and to connect with others.
It is important to know who you are when pursuing success in technology.
I’ve come to understand that I’m a nonconformist. Therefore, I protect my
ability to remain a maverick like a modern day gladiator. Be honest with
yourself too. Are you an independent thinker? Or are you most effective
being a team player? Both types are needed for anyone to be successful.
Know which one you are most of the time (right now) and play your role in
the band to the fullest. By the way, like a pyramid, there’s a third side in
this equation. I’ll introduce it later in this article.
Are all of the apostles at the table?
That is the call of a wise leader. It doesn’t matter who we are, you can’t
achieve technology greatness without a team. A true tech leader understands that it will take a team of specialty skilled individuals to create a
business that is loved by millions. That said, there must be a leader with a
vision who is in charge of defining the culture and management principles.
I wouldn’t try and do this by committee. Been there, done that. Besides,
per the advice of David Ogilvy, I looked around at the parks in my city and I
didn’t find any statues of committees.
No, this doesn’t mean that you strike out on your own with little regard for
your team. I am actually proposing the opposite. Make sure that all of the
right folks are at the table and embrace your responsibility as a leader.
Your team will appreciate the clarity of vision, your stern commitment to
culture and a firm foundation of management principles. Your tech business will attract those who fit and spit out those who don’t.
Oh, and to the team players out there, dedicate yourself to a leader who
delivers the goods here. You’ll be fulfilled, enjoy your work and maybe one
day get inspired to venture out with your own idea. Actually, this happens
all the time and will continue to do so.
Tech start-ups: by the people for the people.
It all begins with a marketplace need. The need for something totally new,
but most often the need to improve something, may become your motivation to start or join a tech-based start up. At all times, think “by the people
for the people”. Literally, think about what the people need and immediately what team members you’ll need to deliver a product or service others
will pay for.
Always be conscious of where you are in the adoption loop. Are you really
inventing, or reinventing, something new? Or, are you engulfed in a sea of
competition engaged in an obvious feeding frenzy. Regardless of where
you are, there is opportunity to pull away from the pack. Simply dedicate a
significant portion of your and your team’s time to key innovation research,
identification and action, and you too can remain an innovation engine.
For now, who’s your favorite tech God? William Henry Gates III or Steve
Paul Jobs? Instinctively, can you answer who you’d rather work for and why?
There’s something very spiritual about technology. I believe that all things
are revealed at the right time... by the right person… supported by the right
team. And that is especially the case with technology advancements. By
the way, I’m kicking it with Paul because he’s all about team (see his product keynotes), technology (Apple Computers, iTunes, iPod, iPhone, iPad),
content (Disney & Pixar) and marketing (Quattro).
54
55
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Michael Gordon-Smith, Australia
Partner, Shilling Swift, Australia
iPAD
What can we know about the iPad without the benefit of actual experience?
It will be Apple—meaning it will be beautiful, epitomize early 21st century
electronic chic, and provoke consumer lust. Several million of us will
probably buy one. It looks like a page-sized iPhone. Maybe that’s cool. Or
maybe it’s just harder to handle.
PERSPECTIVES
What most people have wanted to tell me about the iPad is that it’s made
my Kindle redundant. Although Apple’s new toy is more beautiful and has
helped stir up the business of e-book distribution, the only thing that I am
sure of about the iPad is that it will not replace my Kindle.
It is baffling and disappointing that Apple’s example of superlative design
has proved so inimitable. Even with in-plane switching, the iPad relies on a
LED backlit glass screen. While it may not be as glamorous, E-ink, or something similar, provides a better way to read by reflecting light and using a
fraction of the electrical power. For anyone who reads for work or consumes
books for pleasure—whether the texts are novels, academic articles, legal
cases or management reports, for anything longer than a half-dozen pages,
the experience of E-ink, much like the experience of paper, is dramatically
easier than a backlit screen.
The iPad may turn out to be, as its site tells us, the best way to experience
photos, videos and the Web. But one of the unexpected developments of
handheld screens has been the popularity of private close viewing of video,
even at home. If the iPad is indeed a magical and revolutionary product
as Apple's site declares, it is likely to be through a big impact on the way
video and web sites are consumed and shared. The real alchemy of that
may be that, as one of my colleagues puts it, we "change what we mean by
a book."
I doubt it will deliver a magical revolution for reading large amounts of text.
That screen has yet to come. When it does, it will almost certainly have
evolved from something more like Kindle than iPhone, and it will have a
more attractive price than $499.
What is much less certain is the effect Apple may have on the e-book business,
and whether it will be good for readers. As we know from iPod, the device
is only half the story; iTunes had the other half to itself. Amazon now advertises "Read Kindle Books, No Kindle Required". Kindle for iPhone is a free
download, and Kindle for iPad will probably be so too.
Courtesy of Apple
Are You Wired To The “T”echnition?
Can you believe that someone actually discovered Steve Miller? And at
some point he worked with an A&R executive. A music industry A&R (artists and repertoire) executive is responsible for spotting and development
of new artists.
I spoke earlier about a third side to the team pyramid. T&R is a phrase I
created and it resides in my everyday leadership vernacular. A T&R (technologist and repertoire) executive spots and develops new technologists.
The art of identifying, and knowing what to do with, people who can make
it happen on the tech front is a gift. Yes, it takes one to know one. But most
technologists, like artists, simply need someone with skills (i.e., marketing
skills) that they do not possess to become and remain successful.
So there’s the maverick, the team and the T&R executive. Together, they are
the innovation-engine. The best always make loving something look easy,
so is the case with Steve Miller, a true technologist and someone who
supports them.
Day one of ordering: Apple had over 120,000 people buy the iPad—something they had never seen and would not see until April 3, 2010.
What might be the iPad’s impact on content businesses? Other than the
announcement of Flash-free versions of websites (Flash, a multimedia
platform on eighty-five percent of websites, will not be supported on the
iPad) and an abundance of specialized peripherals and new apps, what
may happen? Prior to the April 3rd release, Insights asked a few diverse
thinkers for their predictions and perspectives:
I'm a happy user of Apple's other products and an admirer of their style. As
a reader outside the US, I am also excited at the potential to bypass the
sclerotic distribution channels of physical books. But so far, the iPad's effect on the book business has depended more on Apple’s facility with cool
and hype than on the experience of reading books on their screen.
By John Huffman IV
56
57
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
Brian Seth Hurst, US
CEO at The Opportunity Management Company;
Executive Producer, TOMC Productions
I see it as a consumption device rather than a productivity device. As such,
I would think it might be a boon for the college market as a multimedia
consumption device—allowing students to store all their textbooks in one
place and, hopefully, the ability to highlight and annotate. Yet, I can also
see its potential in the medical community for doctors on patient rounds
who need to access files, drug protocols and apps that organize their
practice. And I imagine there will be a whole business around professionspecific applications in different verticals with their own version of ITunes U.
The Sony E-reader has been an essential part of my lifestyle for almost
four years. And I can see myself moving over to a multifunction device like
the iPad, which would be able to provide access to all the books, professional journals and blogs that I need. But I would wait for rev 2 and see
what additional functionality shows up.
Joel West, US
Professor of Innovation & Entrepreneurship, San José State University,
College of Business, Principal at ITBizModels.com
In more than three decades of standards battles, one of the few that
Apple ever won came with the 2003 launch of the iTunes Store. Apple
took an esoteric (but open) audio format, added its own proprietary DRM,
and wrapped it with a proprietary client to create a market for paid music
downloads as well as customer lock-in.
Apple and many publishers hope that lighting will strike twice with the
iBookstore. However, I think the iPad content will quickly shift from Apple's
proprietary DRM to open formats with minimal switching costs. Apple's
had little success winning with open standards. Will this be an exception?
Will the iPad apps and other features be compelling enough to make the
iPad the leading tablet? Or will it face a losing fight in a
commodity e-reader market?
Morley Winograd and Michael D. Hais
Fellows with NDN and the New Policy Institute and co-authors of Millennial
Makeover: MySpace, YouTube, and the Future of American Politics
Some have said that an Apple store is a Millennial’s house of worship, but
the company’s latest product, the iPad, suggests God, better known as Steve
Jobs, isn’t listening very well to the youngest consumer generation’s needs.
Instead the device seems to be targeted at his fellow Boomers, who are
looking for an easy to use information retrieval device.
The newest Apple product misses its Millennial target in a number of ways.
First, Millennials, born between 1982 and 2003, love to share everything
they do with their friends—especially via pictures and videos. But the iPad,
for some strange reason, has no camera. Nor, for competitive reasons that
fly in the face of Millennial’s desire for win-win solutions, does it support
Flash, the most common video enabling software. Second, Millennials
need to stay constantly connected to the Net, making their cell phone
their most important possession, so it is equally odd that a device as
costly as the iPad doesn’t yet meet this very basic Millennial need. While a
later version of the iPad with 3G connectivity is promised, its sixty percent
premium price ($800+ vs. $500) over the basic model will put that version
well outside a college or high school student’s budget. Finally, the one
thing older generations notice most about Millennials is their multi-tasking
behavior. The iPad, as with other Apple proprietary products, cannot handle
more than one application at a time. With Millennials, as in baseball, three
strikes and you’re out, and so too is the iPad.
But that doesn’t mean the product won’t sell. Baby Boomers, born ten years
on either side of Job’s 1955 birth year, will find the product’s ease of use
and large screen visual displays particularly helpful as they approach
retirement age. Boomers like to read books much more so than younger
generations, so it is not surprising that most of the commentary and hype
around the iPad’s launch was focused on its potential to reshape the book
publishing industry. Rumors of similar attempts to change the ecosystem
for TV show downloads at lower prices will be equally appealing to Jobs’
generation. And many Boomers, whose idea of multi-tasking is to Google
something on their laptop as they watch TV, will certainly find the iPad a
lot lighter to tote around for that purpose as they move between the living
room and the bedroom.
But Jobs had better come up with a version oriented to the Millennial
Generation soon. As much as the youth-obsessed Boomers might want
to deny it, they are already beginning to pass from the scene. Millennials
have already surpassed them as the largest generation in American history.
If Jobs cannot come up with an iPad version that Millennials will want
to buy and use, it will go down in history along with Apple’s Newton—a
product that wasn’t so much ahead of its time as simply not in tune with
its customer’s desires.
Laura Anne Edwards
Founder Alura Entertainment, LLC, specializing in strategic cross platform
content deployment.
Of course the iPad is cool.
Is it the second coming to interface technology or even the best tablet
technology?? I doubt it. But it will be the best marketed and will have
more synergies than any gizmo I can think of. Unlike the resistance Apple
got from the moribund music industry just a few short years ago, publishing, photography, and even gaming stand to benefit greatly by drafting off
of the furor over this device. The iPad will succeed precisely because it will
ride on their shoulders, giving consumers what they want without having
to engage in the risky business of creating content. Just like they did with
the iPod—absolutely not the best mp3 player—but it was easy to use and
lived within an ecosystem people understood… once again, that business
worked not because of superior technology, but because someone else
made all that music for them.
Where I think it really will rock the world is in seducing the rest of the
hardware/software industries to follow suit. Some will compete with Apple
for consumers, but I believe we will also see radical advances in touch
technology filtering down to retail as well as lucrative b2b applications
such as sales force training and video conferencing. Who will create the
PCb2b App Store for example?
CONTENT OWNERS: The written, music, video, app, and game content on the
iPad will be on a new level. The best content producers should be multiplatform minded. The iPad does not limit our ability to take advantage
of other distribution platforms for our content. But starting on the iPad
absolutely will help us flush out how to make what we want to produce hot
out of the oven.
In the meantime however, Apple has truly thrown down the gauntlet in
terms of device sex appeal and perhaps more importantly—price.
APPLICATION DEVELOPERS: Application development for the iPad will be
another huge phenomenon for Apple. All apps built for the iPhone will work
automatically. Thanks for looking out for our investment, Steve. Brilliant!
I promise you that the iPad will bring forward a wave of innovation from
developers. As a development director, I have downloaded Apple's latest
SDK (software development kit). The SDK makes it easy for us all to get our
very own slice of the Apple pie.
With its breathtaking color screen, I think the iPad will go head-to-head
with Kindle and will find a line around the block of companies and brands
looking for that intangible “feeling” their consumer still seeks, such as
reading a paper, or a book, or the freedom of being able to play a console
level videogame without being stuck at home. Only one thing is for sure,
Apple is no longer the upstart, they are the iconic leader, and for battered
industries like publishing, this is a last chance to get it right.
John Huffman IV
CEO, The Real Content Group
iPad: Another Slice Of Apple Pie
I was in line at the Apple store in New York City when the iPhone made its
debut for sale. Purchasing my first iPhone (I've bought 3 since) was one
of the greatest retail experiences of my life. Let me take you there: Once
in the store, the roped-off line of people snaked round and round until
we reached a sea of Apple employees. Each smiled with handheld cash
registers and cute custom fitted bags for iPhones darting out the door. I
whipped out my credit card so fast that sparks flew from my wallet.
Oh yeah, I'll be in line for the iPad.
Besides owning one for my personal enjoyment, absolutely nothing excites
me more than the thought of producing original content, and developing
applications, for other iPadders and iPadderets. I know what the haters are
saying. "Why would you want to produce content and develop applications
for a product that has no customer base?" Duh, three reasons why:
1. The iPad user experience will be elegant and memorable. The UI (user
interface) and IA (information architecture) meetings will be the place to
be. It is easier to win everywhere if you win here. The iPad will force me and
others to produce better content experiences with many human senses in
mind (touch, sight, hearing). And the interactivity potential is limitless. I
can't wait to see my first augmented reality experience on an iPad. If you
don't know what that is yet... don't worry. You will. This is oh so yummy!
ADVERTISERS: Welcome to your brand presented in the best possible light.
Advertising on a personal, but enormous, mobile device that can direct a
user to a physical retail store (it knows your location) and can ring you up
at the click of a [big] button is a dream come true. Your brand can sponsor
the launch of an iPad application. Here's another example: A portion of
your ad budget can be allocated toward the production and marketing of
a brand entertainment web series that starts on an iPad. Most advertisers
know that the time spent watching television, listening to radio and reading
physical magazines is on the decline. News flash… all of those things will
be on the rise on an iPad.
3. The iPad battery repair policy says a lot about the way Apple does business. Man, these guys are so TechFly. Basically, if your battery needs to be
replaced, you get a new iPad. Not just a new battery! But you'll have to pay
$99, plus $6.95 shipping. Not everyone will be happy about this, but wow!
Doesn't this give you an idea of how much profit margin there is in an iPad
in the first place?
No wonder Apple's stock has doubled during one of the worst economic
periods in our country's history. I so need to holla at Jim Cramer (Mad
Money) about this one. Oh, I just looked. "Apple is a buy stock and the
next trend for investors to watch," says Cramer at the fifth-anniversary of
his "Mad Money" television show. They have their finger of the pulse of what
he calls a mobile Internet tsunami, as mobile devices take over the planet.
Yep, you’re going to eat it up. But remember... This isn't yo momma's Apple pie!
2. The iPad will represent a business opportunity with massive growth
potential for content owners, application developers and advertisers.
Courtesy of Apple
58
59
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
DELETED,
UNLESS
INSTRUCTED
OTHERWISE
The Less-than-Obvious
DELETE!
(unless instructed
otherwise)
Implications of
Viacom v. Google
Out of all the high-profile headlines resulting from the recently-unsealed litigation documents associated with the Viacom v. Google case currently before U.S.
District Judge Louis Stanton, the habitual e-mail deletion protocol of Google
co-founder Eric Schmidt—an important issue of e-discovery that Viacom has
described to the court as “litigation-conscious in the extreme”—seems to be
flying under the radar.
According to Viacom’s motion for summary judgment, Schmidt has made it a
regular practice to delete every e-mail immediately upon consumption unless
he is instructed to save that e-mail for record-keeping purposes. Although this
habit may seem perfectly reasonable through a 20th-century looking glass,
the modern courts’ growing scrutiny of corporate responsibility in the e-discovery department suggests that Judge Stanton could very well find Schmidt’s
routine—one which resulted in the production of less than 20 e-mails related
to YouTube, a $1.7 billion acquisition—lacking in the record-keeping diligence
that high-ranking corporate executives are expected to maintain.
If the court lets this particular practice “slide,” however, in-house counsel across
the country may be able to give another piece of truly unqualified advice to their
corporate clients. Irrespective of industry, when deciding on the best recordkeeping process for your company’s e-mails, take a serious look at the Google/
Schmidt approach.
Paranoid? Maybe, but this type-A stratagem
certainly has the potential to establish a
new high-water mark for discretion with
respect to potentially discoverable documents. Furthermore, the court’s response to
this aspect of the plaintiff’s case deserves
careful attention at the close of this longrunning drama.
Another sub-issue to watch unfold outside
the courtroom in the aftermath of Viacom v.
Google pertains to how the perception and
execution of relations (and negotiations)
between content providers and up-and-coming distribution networks will be affected by
the YouTube co-founders’ strategy sessions;
including such widely-disseminated gems
as “[I]’m not about to take down content
because our ISP is giving us shit,” “Steal it!”
and “avoid the copyright bastards.” Though
much more difficult to measure, this aspect
of the story may have the most long-reaching
(and nefarious) business implications for
all players in the increasingly unpredictable
content market.
See Viacom’s publicly released documents at:
http://www.viacom.com/news/Pages/youtubelitigation.aspx
ITEM #2
GAME-CHANGING SUPREME COURT
DECISION: American Needle v. NFL
Madden NFL Monopoly No More?
As far as the American video game market
is concerned, Electronic Arts is the only
software publisher that currently holds
the exclusive right to market any and all
National Football League-branded console
entertainment—more specifically, the wildly
popular and literally peerless, Madden NFL.
Each installment of this football simulation
series features accurate depictions of every
single NFL team; symbolically, statistically
and simultaneously (over 70 million served,
which is no small feat). The unquestionable
market dominance of Madden could evaporate as early as this year, however, depending on the result of a seemingly unrelated
Supreme Court case over the right to
manufacture and sell official NFL-branded
apparel. This past January, the Supreme
Court heard oral arguments against the
lower courts’ identification of the NFL and
its member teams as a “single entity”; a
policy that exempts them from antitrust
scrutiny. The Supreme Court’s final decision
should be revealed before its summer recess
at the end of June.
If the Court affirms the “single entity” status
of the NFL and its team—effectively overruling (or creatively distinguishing) its 1984
Copperweld decision—the long-standing
floodgates of individual-team licensing will
break loose. The “one-stop shop” for American football industry licensing rights will
cease to exist as we know it. Copperweld v.
Independence Tube clearly outlines a strict
test that limits antitrust-immune “single entity” status to parent corporations and their
wholly owned subsidiaries without exception. To get an idea of how much ingenuity
might be required to squeeze the NFL and
its teams into this characterization, on the
Court’s part, picture Robert Kraft ceding
business control of the Patriots’ franchise
to NFL Commissioner Roger Goodell. Of
course, except for the unusual beneficiaries
of the legendary “baseball exemption,” every
major U.S. sports league will face increased
exposure to antitrust liability in the wake of
a decision against the NFL come judgment
day. But few others are as likely to dramatically alter the existing interactive entertainment landscape.
The “complete NFL experience” of all 32
licensed teams, as currently provided by
EA’s Madden, will most likely continue to
be the crown jewel of American football
simulation gaming. But if the individual
rights landscape does shift, just think of
the possibilities. Multiple publishers could
develop competing Madden-style, 32-team
licensed games. Gifford NFL comes immediately to mind, for some reason. A possible
series of “Regional Teams” games could be
launched in response to the ebb and flow
of local momentum. Do you only care about
the Giants, the Patriots, the Steelers, and
that other team whose name you refuse to
mention? Have we got a game for you!
Even my college roommate’s passion project
of a “Grand Theft Auto: New Orleans Saints”
sandbox/football hybrid, featuring a thirdperson open-world struggle from the stormravaged streets of the Lower Ninth Ward all
the way to Super Dome stardom (“Rebuild!
Renew! Reload!”), could find its way to a
store near you. The sky could literally be the
limit, which makes this case a decision to
watch for any active attorney in the interactive entertainment industry; or pretty much
anyone who plays more Madden than she or
he may care to admit in polite company.
For a full transcript of oral arguments, see:
http://www.supremecourt.gov/oral_arguments/
argument_transcripts/08-661.pdf
By Alan Smithee
60
61
pg. 4
pg. 6 to 9
pg. 10 to 11
pg. 13 to 15
pg. 16 to 20
pg. 21 to 26
pg. 28 to 30
pg. 31 to 37
pg. 38 to 42
pg. 44 to 48
pg. 50 to 52
pg. 53 to 56
pg. 57 to 59
pg. 60 to 61
BREAKING THE MOLD:
BEYER TAKES
ENTERTAINMENT
ONLINE
LITIGATION
A CONVERSATION WITH
BLAIR WESTLAKE
ACCELERATING BUS:
OR BING?
ORGANIZATIONS
THE DEMYSTIFICATION
OF TECHNOLOGY
IPAD PERSPECTIVES
DELETED, UNLESS
M/E INSIGHTS
TECHNOLOGY ISSUE
SPRING 2010
M/E INSIGHTS
TECHNOLOGY ISSUE
SPRING 2010

Spring 2010

Transcription

Similar documents

the news/entertainment divide

The laghu kaumudi

View/Open - Kenyatta University

Google Business Photos ($) To make Google Maps even more

Brochure - Christ Our King

Google Maps in the Classroom

N Roll Roots

Interactive Virtual Entertainment Center

MOSTE, Inc. - VisitMO.com Industry

WELCOME TO CAESARS PALACE