HHR New Media, Entertainment and Technology Group

As we recently reported here, a  new Internet-connected software application, called “ivi tv”, was just released that allows pc, mac and linux end users to stream live feeds from over-the-air television stations to their computers anywhere in the world. Unlike other online content distributors, however, the start-up recently confirmed that it has elected not to negotiate with the copyright holders for the license of its programming, and has instead elected to wager its future on a seemingly liberal interpretation of certain provisions of the Copyright Act (the “Act”), which permit qualifying “cable systems” to rebroadcast over-the-air television signals upon the payment of certain statutorily mandated revenues (see Section 111).

As we suspected, the response from the entertainment community has been swift, and the company has since received a barrage of cease and desist letters from television networks, movie studios, sports leagues, broadcasters, syndicators and others in the entertainment industry alleging that the operation of the service as currently conducted amounts to copyright infringement. In response, the company has now filed a complaint for declaratory judgment in Seattle district court alleging that by complying with the Act’s compulsory licensing scheme in Section 111 “it has not infringed any of the copyrights owned by the any of the Defendants.”

We will obviously keep an eye on future developments as this complaint now moves its way through the court system and the entertainment industry’s forthcoming response.

We had recently written about how a dispute over the ownership of certain IP threatened to derail eBay’s proposed sale of Skype.  Reports last week have revealed that Skype and parent eBay Inc. have reached a definitive settlement agreement with Skype’s founders that resolves litigation over the critical GI technology necessary to run Skype and removes the major obstacle that threatened  the $1.9 billion cash deal for Skype.  Under the terms of the settlement, Zennstrom and Friis will join the investor group and in exchange for contributing Joltid’s GI technology, they will receive a 14 percent stake in Skype, effectively regaining part ownership of their creation.  The other investors will hold 56 percent of Skype with eBay to retain the remaining 30 percent.  The deal is expected to close in the fourth quarter of 2009.

News reports in recent weeks have revealed how disputes over the ownership of certain critical IP may derail eBay’s $1.9 billion deal to sell a stake in the well-known internet communications company Skype.  In the latest development companies owned by the founders of Skype filed additional lawsuits last week against eBay and its future investors. At the heart of the dispute is the peer-to-peer technology called “global index” (“GI”) that is critical to Skype’s success.  Somewhat surprisingly, the GI technology, which was developed by Skype’s founders, Janus Friis and Niklas Zennstrom, is not owned by eBay or Skype.  Rather it is owned by Joltid Ltd., a company controlled by Friis and Zennstrom.  Continue Reading »

This first-of-a-kind, publicly-available, law firm-hosted, CLE-accredited Webinar will focus on the critical issues that are confronted in game transactions. Our team will address issues such as:

• Structuring relationships between developers and publishers and the ownership issues that arise in development agreements, including work-for-hire, joint ownership and cross-licensing issues;
• Protecting against developer default or insolvency, including the pros and cons of source code escrow arrangements and the applicability of Section 365(n) of the Bankruptcy Code;
• How clearances and consents have become critically important with the increased incorporation in games of real world elements (cities, buildings, people, etc.) and third party IP (e.g. music, video clips, characters, logos, etc.), with an examination of recent case law (Kirby v. Sega and Grand Theft Auto/Pig Pen); and
• Strategies to maximize revenues from online and mobile games, including sponsored exclusive features and content, “in-game” ads, syndicated games, and tiered subscriptions.

The one-hour Webinar will also feature “live chat” functionality to enable viewers to ask questions and comment on the presentation in real-time.  Presentation materials will be available for download.

The Webinar will be held on September 16, 2009 from 1:00 pm to 2:00 pm EDT.  To register, click here.

Joint ownership of copyrights is a tricky issue in any transaction.  It is one confronted regularly in digital media deals where rights in the underlying content are often owned by more than one person and licenses are granted retroactively.  Recent decisions in the Second and Ninth Circuit Court of Appeals have caused tremendous concern about the eroding rights of copyright co-owners.  In Davis v. Blige, the Second Circuit held that copyright co-owners cannot unilaterally issue retroactive licenses.  And in Sybersound v. UAV Corp., , the Ninth Circuit held that a copyright co-owner cannot grant an exclusive license without the consent of all the other co-owners.  The combined effect of these decisions has been described as the “death of divisibility” in copyright law.  These decisions threaten to pose considerable difficulties for anyone looking to acquire rights in a copyright that is owned by more than one individual.     Continue Reading »