New Jersey Becomes First State In The Nation To Mandate That Physicians And Other Prescribers Must Discuss Addiction Risks With Minor Patients

Governor Chris Christie signed legislation requiring physicians and other health care prescribers to discuss with an emancipated minor, or the patient’s parent or guardian if the patient is under the age of eighteen (18), the risks of developing a “physical or psychological dependence” before prescribing a Schedule II opioid drug.  Controlled Dangerous Substances (CDS) are prescribed based upon one of five (5) classifications contained in the State’s regulations with Schedule I drugs having the highest potential for abuse. A Schedule II drug would include medications such OxyContin or Vicodin.

If the prescriber determines in his judgement that alternative treatment is appropriate, he or she may discuss the alternatives with the minor or parent. The prescriber is also required to include a note in the patient’s medical record documenting that a discussion about the risks has occurred.

This law is just one part of Governor Christie’s high priority initiatives to “stem the tide of drug addiction that has largely been caused by the misuse of prescription drugs.”  Governor Christie’s Administration is working on many fronts to “curb this epidemic.”

Obtaining the adoption of the new law was a multi-year initiative due to the opposition of medical professionals who argued that they already appropriately assessed and treated minor patients in acute pain. When legislation similar to the above law was first introduced in the 2014-2015 legislative session, it contained many more stringent requirements for how a physician or other prescriber would have to prescribe opioids.  For example, that legislation applied to all patients, not just minors.  It also required that the prescribers use a form created by the Division of Consumer Affairs (Division) to document that the discussion took place.   The Division was also empowered to create “guidelines” for the discussions with patients.

Due to the opposition of Assemblyman Herbert Conaway, (D Burlington), a physician and attorney, who is the Chairman of the Assembly Health and Senior Services Committee, the 2014-2105 Legislature did not pass the bill in the Assembly.  Dr. Conaway stated that the legislation would “unnecessarily interfere with the doctor-patient relationship.”

At the same time, the New Jersey Board of Medical Examiners (BME) supported the “concept” contained in the 2014-2015 legislation, but it stated that physicians were already required to meet the discussion and documentation requirements under the standard of care.  The BME also noted that the patient’s physician is in the best position to assess what information should be discussed and pain medications ordered.  The BME is generally not in favor of legislation mandating how a physician may care for patients.

After extensive debates between families, those concerned about drug abuse and legislators, a compromise was forged on the issue of mandating what a physician would be required to tell a minor patient.  Thus, new legislation was introduced in the 2016-2017 legislative session. Significantly, this legislation did not contain language mandating that a prescription should only be prescribed in “good faith” and codifying the BME’s CDS regulations among other prior provisions. The Legislature passed legislation simply requiring discussions between minors and prescribers and documentation of that communication in the medical record.

In view of the adoption of this “bare bones” legislation it is not surprising that in January Governor Christie directed Attorney General Christopher Porrino to implement emergency regulations limiting medical providers to issuing only an initial five (5) day prescription of CDS for acute pain. Governor Christie has signaled his unwillingness to wait for the Legislature to pass bills adopting the types of limitations on prescribing CDS to patients that he thinks are necessary.  Attorney General Porrino sent a January 18, 2017 letter to the BME informing them that they had thirty (30) days to determine whether they will “stand” with him in pursuing “administrative reforms.”   The clear implication is that if the BME does not go along with the five (5) day prescription limitation on opioids that emergency regulations will be adopted without the BME’s input.

We should anticipate that there will continue to be stringent efforts by Governor Christie’s Administration to take action against physicians and other prescribers who violate the evolving standards for prescribing CDS.   Meanwhile, physicians are arguing that the current regulations governing how they treat patients with acute pain are appropriate and that they should not be limited to only prescribing a five (5) supply of pain medications.  Prescribers are expressing concern about the impact on patients in pain if this emergency regulation is adopted.  Prescribers are also concerned about sufficiently documenting that their communication with a minor patient occurred if that a complaint is made or an investigation launched.

 

Alma L. Saravia is a shareholder of Flaster Greenberg PC in Cherry Hill. She practices in the area of health-care law and was a member of the N.J. State Board of Medical Examiners. She can be reached at 856.661.2290 or alma.saravia@flastergreenberg.com.

Governor Chris Christie Vows To Limit Initial Prescriptions For Pain Medications – Medical Community Reacts

At Governor Christie’s State of the State address last week he emphasized again that fighting drug abuse and addiction is a top priority.  One of his proposals has already drawn a strong reaction from the medical community.  Governor Christie proposed that physicians should be limited to prescribing a five-day supply of pain medications for acute conditions. Under the current law a physician may write a prescription for up to a 30-day supply of pain relief medication.  Last year Connecticut, Massachusetts, Maine, New York and Rhode Island restricted initial prescriptions for acute pain medications to a seven-day supply. New Jersey’s proposed five-day prescription limitation could be the strictest in the country.

In his address, Governor Christie said that a 30-day supply “is dangerous, ill-advised and absolutely unnecessary.” His goal is to limit prescriptions to five days so that patients in acute pain must consult with their physicians before they can receive another prescription.  Governor Christie’s assertion that a 30-day supply is “excessive” is unfounded and it may result in more harm to patients in pain than good, according to physicians.

Nonetheless, on January 17, 2017 Governor Christie signed an Executive Order directing the State’s Attorney General, Christopher Porrino, “to take all necessary steps to limit the initial prescription of opioids for acute pain.”   Last week Attorney General Porrino sent the Board of Medical Examiners (BME) a letter stating that he will seek to implement the five-day prescription limitation as an emergency adoption which would become effective upon its filing with the Office of Administrative Law.  He asked the BME to “support and assent” to the initiative no later than February 16, 2017.

The BME is charged with regulating physicians and other providers – the BME also adopts regulations on standards of practice including the requirements for prescribing pain medications to patients.  The BME’s recognizes the prescribing concerns raised by Governor Christie, such as the risk of a patient becoming addicted. Therefore, it recently voted in favor of a recommendation that all physicians must “familiarize” themselves with the Centers for Disease Control and Prevention guidelines for prescribing pain medications. The BME also continues to make disciplinary actions against physicians who engage in indiscriminate prescribing its highest priority.

Pursuant to the BME’s regulation on limitations for prescribing controlled substances, physicians must assess patients and develop treatment plans before prescribing for pain. The BME’s regulation limits the quantity of Schedule II pain medication (drugs most likely to be addictive) to a 30-day supply or 120 dosage units, whichever is less based upon its findings that this standard meets current medical evidence.  The federal Drug Enforcement Agency (DEA) does not limit Schedule II drugs to a 30-day supply.  The DEA merely provides that the amount prescribed must be for a “legitimate medical purpose.”

Limiting a physician’s ability to determine what is best (and legitimate) for patients has the medical community up in arms.  The State Medical Society’s opposition to this proposal is not surprising as the proposal is widely viewed as an intrusion into the physician-patient relationship.  New Jersey’s 30-day supply regulation is currently stricter than many states requirements, although certainly not as stringent as the five states mentioned above which have seven-day pain medication limitations.  Imposing even narrower limitations on physicians who treat pain “is not the way to go” according to the Chair of the American Medical Association’s Opioid Use Committee.  However, New Jersey may soon see changes in the amount that may be prescribed for acute conditions regardless of whether or not the BME decides to “stand” with the Attorney General emergency regulatory amendment.

Physicians will continue to be concerned about the impact on patients from the five-day proposal and the increasing efforts to discipline physicians who allegedly have engaged in indiscriminate prescribing.  Our experienced healthcare attorneys regularly represent physicians in disciplinary actions before the BME and we handle cases where physicians’ licenses may be suspended or revoked due to allegations of over-prescribing without medical justification.  Our role as counsel in these cases is to ensure that physicians are afforded due process and the opportunity to present evidence supporting the medical care they rendered.  During these challenging times for physicians, knowledgeable counsel is vital.

 

Alma L. Saravia is a shareholder of Flaster Greenberg PC in Cherry Hill. She practices in the area of health-care law and was a member of the N.J. State Board of Medical Examiners. She can be reached at 856.661.2290 or alma.saravia@flastergreenberg.com.

Design Patent Damages: Samsung v. Apple

In a high-stakes case between two tech-world giants, the Supreme Court in Samsung Electronics Co. v. Apple Inc. (US 2016) dismissed a $399 million dollar jury verdict in favor of Apple for Samsung’s infringement of Apple’s smartphone design patents.  At issue in the case were several Apple design patents granted as early as 2009 which cover various aspects of the design of the first-generation iPhone including its black, rectangular front face with rounded corners and the distinctive interface displaying a grid of sixteen colorful icons on a black screen.  At trial, the jury found that several Samsung smartphones infringed Apple’s design patents under 35 U.S.C. § 289, which holds the infringer liable for its total profits.

On appeal to the Federal Circuit, Samsung argued that the damages should not be Samsung’s entire profits from selling its smartphones and damages should be limited to the components that are subject to Apple’s patents, in this case, the front face or screen of the smartphone rather than the entire smartphone.  The Federal Circuit upheld the jury verdict and rejected Samsung’s argument explaining that the infringed features are not sold separately to consumers and therefore should not be considered separately from the smartphone for the purpose of determining damages.

To Samsung’s relief, the Supreme Court reversed and held that design patent infringement damages can be calculated based on the overall device or alternatively on a component of the device.  The Court, however, declined to establish a test to determine whether for each design patent involved in the case, damages should be calculated based on the profits from the entire smartphone or merely a component of the smartphone.  The Supreme Court also failed to provide guidance on how to determine what portion of the infringer’s profits are attributable to a specific component or feature of the smartphone.  Instead, the Court remanded to the Federal Circuit for further proceeding.

Despite this decision, Samsung has won the battle but not the war, as the damages are likely to be reduced on remand but will still be substantial.  While design patents are often overlooked or ignored in favor of utility patents, the Samsung v. Apple litigation underscores the importance of including design patents as part of a patent portfolio.  For many products, the design of the product may have a significant impact on consumer opinion that is itself worthy of protection aside from the functional attributes of the product.  Here, Apple’s foresight in protecting the preferred designs of their smartphone allowed the company to win a large damages award over a key competitor, reserving to Apple a particular aesthetic that competitors will now be more careful to avoid imitating.

tassoneFor more information on patents and intellectual property law, contact Tyler Tassone, a member of Flaster Greenberg’s Intellectual Property Department.

Tyler Tassone concentrates his practice on patent and trademark matters. He graduated from Villanova University School of Law, cum laude, and received a Bachelor of Science Degree in Chemical Engineering, magna cum laude, from the University of Virginia. Tyler is licensed to pactice in Pennsylvania and before the USPTO.

New NHL Las Vegas Team Issued Initial Refusal for “Golden Knights” Trademarks, But Registration Is Still Possible

The United States Patent and Trademark Office issued an initial refusal to the new NHL franchise in their efforts to trademark “LAS VEGAS GOLDEN KNIGHTS” and “VEGAS GOLDEN KNIGHTS” – citing a likelihood of confusion with the registered mark “GOLDEN KNIGHTS COLLEGE OF SAINT ROSE.”  Each mark was registered for entertainment services (ice hockey exhibitions) and clothing.

Importantly, this is a common initial outcome when applying for a mark that has competitors in the same market using a similar mark.  While some media sites opted for more incendiary headlines in stating that the trademark has been “denied,” registration is still quite possible as the Vegas franchise is now given six months to respond to the Trademark office’s initial refusal.

Sports teams using the same nickname as one another is nothing new.  There are many examples of professional and college teams sharing the same name – e.g. Boston Bruins (NHL) and UCLA Bruins (college).  The Simpsons weighed in on the subject years ago, poking fun at the overuse of “Wildcats” as a team nickname:

To overcome the initial refusal, the Vegas franchise will need to show, among other things, that likelihood of confusion will not be an issue.  One problem is that “GOLDEN KNIGHTS” is displayed in both marks more prominently than any of the other words or descriptors.  In addition, the College of Saint Rose and the Vegas franchise will be using the marks in connection with the same goods and services – sporting events and clothing sales.

Another problem is that the College of Saint Rose registered the mark in connection with a particular design and stylized type face.  The Vegas franchise attempted to register their mark in standard characters, which would allow them to display the words in any design and type face – meaning that the two marks could be presented and displayed in the same manner, a “likelihood of confusion” issue which is explicitly cited by the trademark examiner in the initial refusal.

In response to the Trademark office, the Vegas franchise will most likely cite the numerous examples of professional and college teams sharing nicknames, as well as professional teams in different sports sharing nicknames – e.g. Arizona Cardinals (NFL) and St. Louis Cardinals (MLB).  In this case, it may also be crucial that the College of Saint Rose does not have an ice hockey team.  The Vegas franchise is also likely to disclaim “Las Vegas” and “Vegas” as unregistrable portions of their marks, because exclusive rights cannot be obtained in wording that is primarily geographically descriptive of the origin of the goods or services identified in the trademark application.

It remains to be seen whether the Vegas franchise will ultimately be successful in registering the “GOLDEN KNIGHTS” marks, but the matter is far from over, as the initial refusal is just the beginning.

For more information on registering trademarks and intellectual property law, contact Eric Clendening, a member of Flaster Greenberg’s Intellectual Property Department.

Eric R. Clendening is a member of Flaster Greenberg’s Intellectual Property and Litigation Departments. He focuses his practice on intellectual property litigation and commercial litigation, including contract disputes, employment litigation, and other commercial disputes. He also advises clients on protecting and enforcing intellectual property rights online, including the resolution of domain name disputes and matters concerning e-commerce, online speech and conduct, and related intellectual property issues involving trademarks and copyrights.

 

 

 

 

Hiring A Competitor’s Employee? Proceed With Caution!

For the first time since its enactment over four years ago, a federal court has interpreted a provision of the New Jersey Trade Secrets Act (the “Act”).  The decision, unfortunately, leaves New Jersey employers who are considering hiring a competitor’s employee on uncertain ground.

In Baxter Healthcare Corp. v. HQ Specialty Pharma Corp., Baxter, a pharmaceutical company, sued its competitor HQ for patent infringement, tortious interference with the non-competition provision of its former employee’s employment contract, and breach of the Act for misappropriation of its trade secrets.   The court refused to dismiss the claim under the Act, despite finding Baxter could not prove HQ knew the employee was subject to a non-compete agreement or had knowledge of the former employer’s trade secrets.

George Owoo worked as a scientist for Baxter before leaving to work for its competitor, HQ.  He was a specialist in esmolol premixed injectable bag drug delivery systems.  At the time it hired him, HQ was not a participant in that market.  However, HQ soon filed several patent applications, listing Owoo as the inventor, for new esmolol products that would compete with Baxter’s similar products.

Before hiring Owoo, HQ had interviewed him extensively to inquire about his experience at Baxter.  He repeatedly denied he had an employment contract with Baxter or any knowledge of Baxter’s trade secrets, insisting that his knowledge in the esmolol premixed injectable bag market was in the public domain.  Based upon his representations, HQ hired Owoo and put him to work on developing esmolol products.

To prove its interference with contract claim, Baxter needed to show that HQ had acted with “malice”, i.e., an intention to interfere with its former employee’s contractual obligations to Baxter.  Because there was no evidence HQ had any knowledge of the employment contract, and, to the contrary, had been repeatedly assured by Owoo he had no contract, the court ruled Baxter could not show HQ acted maliciously and, therefore, could not prove tortious interference.

By contrast, a claim under the Act requires neither an employment agreement nor knowledge of it by the new employer.  Baxter claimed HQ misappropriated Baxter’s trade secrets by using them without authorization to develop its own competing products.  The court stated HQ could be liable for breach of the Act if Baxter could show HQ had used Baxter’s trade secrets at a time when HQ either knew or should have known Owoo had acquired them through improper means.

The question before the court,therefore, was whether HQ knew or had reason to know that its new employee’s esmolol formulation for HQ was derived from his knowledge of Baxter’s trade secrets.  Significantly, the court found there was some evidence that suggested HQ knew of Owoo’s prior involvement in developing Baxter’s esmolol program.  Most troubling, the court found HQ’s interrogation about his work history at Baxter revealed a concern on HQ’s part that he might have been privy to Baxter’s trade secrets and might have been preparing to use them at HQ without Baxter’s authorization.  Thus, the very investigation by HQ that formed the basis for the court’s decision to dismiss the interference with contract claim became the key fact in the court’s conclusion not to dismiss Baxter’s Trade Secrets Act claim.

What can companies do in light of the Baxter decision to protect themselves from Act claims when they are considering hiring a competitor’s employee, who might have knowledge of its trade secrets?  The Baxter decision suggests that perhaps HQ was damned if it did and damned if it didn’t investigate.  Despite that HQ did investigate, and, in fact, at least in part, because it did investigate, the court refused to dismiss the Trade Secrets Act claim against it.  On the other hand, although not addressed by the court in Baxter, had HQ not investigated, the court almost certainly would have refused to dismiss the Trade Secrets Act claim, and perhaps the interference with contract claim, as well.  In other words, choosing not to investigate new employees’ backgrounds is not a wise strategy for avoiding future liability.

There are ways a new employer can enhance the benefit of its investigation in the hope of avoiding claims under the. Act.  First, HQ could have had its new employee sign a written statement following the investigation certifying that he (1) was not under any contractual obligations to Baxter, and (2) either had no knowledge of Baxter’s trade secrets, or, in any event, agrees not to use that knowledge in his new position.

Second, HQ accepted without attempting to verify Owoo’s claim that his information was in the public domain. Had it done so, it would have had a stronger argument to avoid liability under the Act.

Finally, employers can reduce exposure to liability by insulating their new employees from working in competition with their former employers.  That tactic might make the new employee less valuable to the new employer, so each employer will have to perform its own risk/reward analysis comparing the potential benefits of no restrictions on its new employee to the legal costs of an expensive lawsuit alleging violations of the Act.

There is no one-size-fits-all solution to the Hobson’s choice presented by the Baxter decision.  Companies considering hiring a competitor’s employee should proceed with caution, especially when the employee may know the competitor’s trade secrets.

Questions? Let Phil know.

 

Philip Kirchner is a shareholder in and former chair of Flaster/Greenberg P.C.’s Commercial Litigation Practice Group, a member of the Labor & Employment and Construction Litigation Practice Groups, and member of the Restaurant & Hospitality, Construction, Nonprofit & Charitable Organizations, Gaming and Alternative & Renewable Energy Industry Groups.

A How-To Guide for Singers and Songwriters to Obtain & Protect Their Copyrights

Hey Candidate, You Can’t Always Use What You Want!

Another national election is upon us and with each advertisement, arena event, train stop and rally, candidates pair music with the themes and messages of their campaigns.  However, the candidates’, particularly Trump’s, use of these hits has come under fire by the artists who write and perform the songs.  Artists, including Neil Young, Aerosmith, Survivor and, most recently, the Rolling Stones, have demanded that Trump cease and desist using their music in the past few months.

The artists objections are commonly based on politics that conflict with their own ideologies, or that of their fan base.  For example, in 1994, Bruce Springsteen famously denied Ronald Reagan’s request to use “Born in the U.S.A.” as a theme song about for Reagan’s bid for the White House.  Springsteen’s “Born in the U.S.A.” was a song about the plight of a Vietnam veteran and he apparently did not want it turned into a patriotic rallying cry for a candidate he spoke out against during that campaign season.  In 2016, Trump has used, or tried to use, Neil Young’s “Rockin in the Free World”, Aerosmith’s “Dream On”, Adele’s “Rolling in the Deep” and the Rolling Stones’ “Start Me Up” as part of his campaign.   All of these artists immediately, and very publicly, demanded Trump cease all use of their songs…some using their objection as a chance to rail against the candidate in a more general sense.

While the candidate almost always immediately, and wisely, ceases using the song that the artist objects to, the question lingers as to what would happen if the candidate continued to use the song over the objection of the artist.  Practically, the candidate would make himself/herself the target of someone who has a large publicity platform, and could ultimately shine a negative light on the candidate.  Legally, however, the artist has effective tools to stop the candidate from using their songs.

Get the Copyright

When the artist/writer puts pen to paper and creates an original work of authorship, the artist/writer has a common law copyright in that creation.  However, in order to establish a date for when the work/song was created, the artist should then register that work/song with the United States Copyright Office.  Registration of the work/song is inexpensive and can be done through the U.S. Copyright Office’s official website.  The important benefit of registering the song/work is that it establishes the date an artist created the work, so as to defeat claims by a person claiming a similar work at a later date.

Artists often have two registered copyrights on their songs.  The first is based on the written composition and is held by the person(s) that wrote the song.  The second copyright is the master recording of the song, which belongs to the artist(s) who performed the song.  The artist may own the master recording outright or may have assigned the rights to the master recording to the record company and/or music publisher.

It is important to note the artist only has protection for certain elements of a song.  The melody and the written lyrics of the song are enforceable protections under Copyright law.  However, the title of the song, basic chord progressions, and the general concept of the song are not protected.  Lines within lyrics are often not protected as well.  The gist of the protection is to protect the entirely of the lyrics, not just a line like “I love you more each day.”

How to Protect the Song/Copyrighted Work

While the creation of the song creates a protectable property and registration of that song with the U.S. Copyright Office establishes a date of creation, work still needs to be done to protect the song/work from use and copying.  When the artist becomes aware of a potential infringement (or copying) of the song/work, the artist should demand that the infringer cease and desist using the work.  If that does not stop the offending activity, the artist should file a complaint with a court of competent jurisdiction seeking to enjoin (stop) the offending party from using or copying the work during the pendency of the litigation and ultimately to permanently enjoin the offending party from ever using the work, along with money damages.  Once in litigation, the creator, in the case of use by a candidate, will have to show that the offending party used the work without a license or authorization or, in the case of another artist infringer, that the work is sufficiently similar to the original work, often through the testimony of an audiology/music expert.  In addition, the creator may also seek to show that, in the case of a candidate, use is creating public confusion, meaning that by the very use of a song at the campaign event, the public believes that the artist is endorsing the candidate.

Alternatively, if the creator artist is willing to allow the offending artist to use the song/work, or a protectable portion thereof (e.g. a “sample” of the work), the creator can license the work to others in return for payment (often calculated on a per use basis).  Licensing is common in both the world of politics and in the world of music.  A campaign can contact the person/entity who owns the song and request, or pay for, use of it.  An artist can do the same, usually in return for royalties.  How often have you heard a song reimagined, “covered” or “sampled”?  In most of those cases, a royalty or license has been agreed upon.  Where the “covering artist” or “sampler” fails to get the writer/artist’s agreement, litigation often ensues, not only leading to the original writer/artist obtaining damages for things such as the profits from the new artist but also a stain on the reputation of the new artist.

Regardless of the artist’s ideology, he/she should protect their song/work from anyone and everyone who seeks to use it.  Whether the artist supports the candidate seeking to use their work or is ideologically opposed to the candidate and his/her use, the artist should take action, either to halt the unauthorized use or to license the work.  Then, in the end, “you get what you need.”

Questions? Let Jeff know.

 

Jeffrey A. Cohen is a member of Flaster Greenberg’s Litigation, Intellectual Property, Corporate and Real Estate Practice Groups. He has been a trial attorney for more than 23 years, counseling and representing a diverse range of clients in matters related to commercial contracts, shareholder and partnership agreements, trademarks, copyrights, patents, including Hatch-Waxman, insurance coverage, franchise disputes and commercial construction.

Influential from the Stage to the Courtroom: Prince’s Lasting Impact on Copyright Ownership

In the weeks following the tragic sudden death of Prince Rogers Nelson (Prince), much of the media and general public have shared their memories of one of the most prolific and talented musicians in the country’s history.  Countless individuals have shared personal stories of the enigmatic artist or shared highlights of his legendary live performances.

Prince was also, however, a pioneer in intellectual property law, specifically with respect to copyrights.  In 2007, through his publishing administrator, Prince instituted litigation to stop a mother from posting a video of her own 13-month-old son merely dancing to Prince’s hit song, “Let’s Go Crazy.”  While that case is still active, the Ninth Circuit already issued a precedential opinion cautioning that copyright holders have a duty to consider in good faith whether allegedly infringing material constitutes fair use prior to sending a takedown notification.  More recently, Prince sued 22 of his own fans in 2014 for $1 million each for posting videos taken at his concerts, but the backlash of an artist suing his own fans quickly led him to voluntarily dismiss the action.

Prince’s most prolonged copyright battle, however, concerned his transfer of copyrights to his record label, Warner Brothers.  Prince signed with Warner Brothers in 1977, when he was just 18 years old, but he promptly soured on the idea that Warner Brothers owned the rights to any music he released.  In the early 1990s, Prince went as far as to change his name to an unpronounceable, self-described “love symbol” in an effort to release music on his own terms and own the copyrights to his work.  Warner Brothers, in an effort to protect its asserted contractual rights, resisted Prince’s efforts to break his record contract, regardless of what he wanted to call himself.

Prince, however, eventually gained bargaining power due to a key section of the 1976 Copyright Act.  Section 203 of the Act provides for the termination of copyright transfers during a five-year period, beginning 35 years after the execution of the initial grant of the copyright transfer.  The 7th Circuit stated that the purpose of that section is to give authors and their heirs a second chance to market works even after a transfer of rights has been made.  Accordingly, even if an artist signs a contract with a record company transferring all rights in a work in perpetuity, after 35 years, the artist or his/her heirs can terminate that grant and demand that the rights revert back to the artist.

For over 20 years, Prince’s protests such as changing his name and appearing in public with the word “slave” written across his face accomplished very little.  At the end of 2013, however, Section 203’s 35-year window was set to expire.  Deadlines typically spur action, and this was no exception. In early 2014, Prince and Warner Brothers reached a landmark agreement that gave Prince control over his back catalog.

Prince’s plight and hard stance against his record label paved the way for artists who produce copyrighted works today, especially in light of technological advances since Prince signed his initial Warner Brothers contract.  In 1977, it was likely unfathomable that artists could avoid signing contracts with companies to finance, manufacture, promote, and distribute their works.  In the digital/social media era, however, artists can directly connect much more easily with their customers.  Some musicians have declined to sign with large record labels to retain control over every aspect of the creation and release of their music.  Whether or not these artists acknowledge it, Prince undoubtedly influenced those artists who now make it a priority to maintain complete control over their works.

It is possible that in 2016, the 35-year window of Section 203 is too long a window to motivate emerging artists, who are looking for companies to pay the costs of production and marketing and provide them with up-front dollars, to hold tight to the ownership rights in their copyrighted works.  Regardless of whether Section 203 is amended to adjust to the digital era, however, there is little doubt that Prince’s public legal battles concerning copyrights have at least paved the way for artists to be more educated about their rights, and they will have a long-lasting impact on the music industry.

 

Questions? Let Scott know.

Scott C. Oberlander is a member of Flaster Greenberg’s Litigation Department, representing businesses and individuals in a wide range of disputes. He has particular experience counseling clients in various industries with respect to breach of contract claims, unfair and deceptive business practices, employment disputes and administrative actions.

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