Cuckoo Kookabura — Culture as the Language of Art

I wrote in November of the claim by the owners of the copyright in the Australian chestnut Kookaburra Sits in the Old Gum Tree that Men at Work had infringed Kookabura‘s copyright in their 1981 #1 hit Men Down Under. The claim is ridiculous. As the Sydney Morning Herald reported at the time, “[t]he key, harmony, structure and rhythm of Down Under’s famous riff changed the sound of it so much that nobody – not the band, [the managing director of the company that owned the copyright to Kookaburra], or even five out of six [of the game show] panellists . . . noticed it until someone turned it into a quiz show question.”

But now, as Celebrity Justice (among others) reports, “[a]fter a 3 year fight, a federal court in Australia has ruled against favorite sons Men At Work saying they plagiarized one portion of the Kookaburra tune and will now owe some of their royalties to the publishing group who bought the rights to that song in 1990.”

As CNN reports, the judge in his decision wrote that “I would emphasise that the findings I have made do not amount to a finding that the flute riff is a substantial part of Down Under or that it is the ‘hook’ of that song.”

Whether the judge’s decision will withstand appeal under Australian copyright law is beyond my expertise, but the suggestion that the quotation of a copyrighted song in a new work constitutes copyright infringement would make a travesty of the notion of fair use under U.S. law. My zealousness on this question is not merely the result of the argument that I made in my November post — that the “transformative” nature of Men Down Under is proven by the way it alters the melody it takes from Kookabura and the failure of anyone to recognize the borrowing for 29 years. It is also because that being able to “quote” works that have resonance and meaning in our culture is fundamental to artistic creation. Kookabura is fundamental to Men Down Under as a song because Men Down Under, from its title to its performers to its lyric to its video is about Australia, and the use of a musical phrase from Kookabura is as resonant a way to convey Australia as there is.

Instead of recognizing what Lewis Hyde calls the “Cultural Commons,” many people have the knee-jerk impulse people have to identify cultural creations as “property” and thereby equate them to real estate or cars or something. Beside the rather large fact that property rights are limited in all sorts of ways in order to advance social goals (you can’t have a pig farm in the middle of a suburb, you can’t paint your house fuschia in most places, and the government can take your property if it pays you a fair (and rather low) price for it, etc.), that knee-jerk reaction entirely ignores how cultural creations draw (and must draw) on existing cultural creations, and how those creations then achieve meaning in the social sphere and are used to convey meaning in the social sphere. Copyright exists to feed, not hinder, creation, and the sooner we under what creativity really involves the more creative a culture we’ll have.

You be the judge: are Men at Work plagiarists or composers?

AP shoots itself (twice) in the Copyright Wars.

The Associated Press occupies a controversial place in the so-called “Copyright Wars,” and it certainly isn’t making many friends anywhere in recent news. First, on December 31 of last year, AP filed its Amended Answer to Complaints, Crossclaim, Counterclaim., and a cross claim against Mannie Garcia. In that document, AP contends that it, not Garcia, owns the copyright in the photograph Garcia took of then candidate Obama that Shepard Fairey subsequently used as the source material for the (in)famous Hope poster. AP’s contention rests on the assertion that Garcia was acting within his the scope of his duties as a staff photographer for AP when he shot the photo and that it therefore constituted a “work for hire.”

There are, I think, two sets of allegations in AP’s latest filing that are interesting in terms of whether Fairey’s use of the photograph as source material for the poster constituted a non-infringing fair use. First, AP states that Garcia was sent to the event at which he shot the photo by AP in order to take photos such as the disputed one. Second, AP states that Garcia sent “several” of those photos to AP and that AP chose the photo it decided ultimately to publish. One might think these allegations reduce the extent to which Garcia can claim the shot was one so much of his own choosing. He was assigned to take the shots he took, he took a lot of them, and AP, not Garcia, chose the one that fit its purposes best.

AP also goes right after Garcia, accusing him in its counter-claim of committing fraud in registering his own copyright in the photo on the grounds that AP’s ownership of that copyright under the work for hire doctrine was so plain that Garcia knew he at the time he filed the copyright registration that he wasn’t entitled to do so. It might not be the only accusation of dishonesty hurled at Garcia in this case.

Meanwhile, AP, of course, has been quite vocal about voicing its contention that “news aggregators” infringe AP’s copyrights on a regular basis. No matter your view on the legitimacy of the infringement claim, there’s lots of reason to believe that AP’s stance is bad business. Google seems to have been a principal target of AP’s complaints, and yet shutting Google off (something, incidentally, AP could do at any time) would seem likely to drive traffic away from AP’s stories.

Well, Google seems to have called AP’s bluff. The Guardian reports that “it has become apparent that new Associated Press stories are no longer appearing on the site, which has hosted them since 2007. Google hasn’t added new AP content since December 24.“

Nesson continues to blame others for his lousy job of lawyering.

The  Harvard Law Record reported yesterday on Charlie Nesson’s address to : a room full of HLS students to explain his motivations and methods as the lawyer representing Joel Tenenbaum in Sony BMG Music v. Tenenbaum, the case that resulted in a $675,000 judgment against his client.

I have on more than one occasion expressed my harsh views regarding Nesson’s lawyering in the case (here and here). But the Harvard Law Record’s story only adds fuel to my fury at Nesson’s lawyering skills. According to the story, “When the case first came to his attention, Nesson knew that there was little chance of victory on the merits, with the only truly viable strategy at trial being the minimization of damages.” (emphasis added)

The RIAA cannot have been happy about the way it looks after winning a judgment of $675,000 from a kid, especially since, as Nesson with some degree of accuracy explains, “[w]hat Joel did in downloading and sharing songs was what just about every kid in his generation did and which I bet a great many of you did.” The RIAA was anxious to settle a similar case in which it won $1.92 million from Jammie Thomas-Rasset for illegally downloading 24 songs. As Mike Masnick wrote, the RIAA “seems to recognize that the insanity of the $1.92 million doesn’t do it any favors. Even the musicians whose music was part of the case are embarrassed by the amount. . . . the RIAA would love to settle the lawsuit for some lower amount so it can run around touting the ‘risks’of file sharing without having people laugh outloud when hearing that someone had to pay $1.92 million for potentially sharing 24 songs that could be bought for $1 each.”

And Tennenbaum quite plainly had the ability to minimize damages through settlement rather than by means of Nesson’s tactic of going to trial. In February, Ars Technica reported that the “RIAA’s initial offer to settle, made way back in 2003, was for $3,500. Joel offered $500, which was declined. After the case went to court in 2007, the judge ordered the parties to settle and work it out between themselves. Joel offered $5,000. The RIAA demanded $10,500.”

And yet Nesson, realizing that “there was little chance of victory on the merits” and that the only viable way of representing his client’s best interests was to minimize the amount of his liability, failed to settle a case that at most would have cost his client $10,500 (assuming, contrary to any notion of common negotiating sense, that the RIAA would not have moved off of its last offer).

The Harvard Law Record’s story goes on to state that “the evidence presented by the RIAA . . . made it look like Tenenbaum blamed others and lied,” thereby interfering “with his effort to appear credible and sympathetic.” The problem is that the evidence didn’t merely make it “look like” Tenenbaum lied. He admitted in trial that had lied in sworn statements he had made before trial that he had not used peer-to-peer file sharing networks to download and upload recordings.

I’ve said it again and again. I’m no fan of the RIAA. The recording industry’s business and legal responses to the technological revolution that has deprived them of their former monopoly on the means of mass producing and distributing recorded music have been, to my legal and business mind, idiotic. But Nesson was Tenenbaum’s lawyer. His professional judgment as a lawyer was that any legal defense to the RIAA’s claims had little chance of success and that the best lawyering job he could do for his Tenenbaum was to minimize the damages he would be liable for. Nesson clearly had the opportunity to do so. That he passed up that opportunity in a quixotic fight for a principle might be something a lot of people admire, but it’s terrible lawyering.

Want to become a practicing lawyer? Don’t go to Harvard! Nesson and Tenenbaum again.

Some of my favorite and most respected former colleagues in practice went to Harvard Law School, but, based on what I’ve been seeing out Charlie Nesson in his role defending Joel Tenenbaum in Sony BMG Music v. Tenenbaum, I have to seriously wonder what Harvard is teaching about the actual practice of law.

I took Nesson to task recently for using his role as lawyer in the case to fight a crusade against the music industry, not to give his client the best defense possible. That attitude alone destroys my confidence in Nesson’s ability to train anyone to be a lawyer.

Now Nesson has proven he can’t write a brief. Yesterday on behalf of Tenenbaum he filed in the court that produced the $675,000 judgment against his client a document entitled Defendant’s Opposition to Entry of Judgment and Injunction (pdf)(the “Brief”). There are some non-frivolous arguments somewhere in that self-righteous screed, but they’re so buried in Nesson’s preference for rhetorical flourish over lawyerly detail that, as a responsibility to the students I am teaching to be lawyers, I have to call him out on his incompetence. A lawyer’s job is to win the judge to his client’s side through persuasive reason and argument; it is not to throw a mess at the judge that may or may not contain winning arguments and leave it to the judge to find those winning arguments.

It’s a dirty little secret that lawyers don’t like to make too much of: lawyers, not judges, win and lose cases. Lawyers don’t like to make too much of it because they want judges to believe they’re the ones from on high pronouncing judgment. But if you convince the judge you’re right and give him the tools to rule your way, you’ll win. It is remarkably pleasing to get an order from a judge ruling in your client’s favor and realize the order is merely a cut-and-pasted version of your brief. Why shouldn’t the judge steal my words if they explain his result as well as he can figure out how to explain them, and why should he trouble himself trying to find better ways to do so?

But Nesson doesn’t give the judge he’s seeking to persuade anything to work with. First, he’s asking the judge not to enter an order that would impose the jury’s verdict and the injunction against his client. But on what basis? Is he asking for judgment notwithstanding the verdict? What procedural rule is he filing his opposition to the entry of the judgment on? His Brief sure doesn’t explain the basis. Nor does it explain what he is asking the judge to do in lieu of entering the order? Dismiss the case? Lower the damages? Lift the injunction? Any or all?

Listen, students: when you write to the judge make sure she knows what you’re asking her to do and the legal basis she has for doing it.

I won’t get into all of the merits of Nesson’s arguments. I think he may well have a due process argument on the excessiveness of the statutory penalties, but even that one is a stretch.

But the argument he considers “first and foremost” is that “the statute in question does not permit a lawsuit against an individual consumer for statutory damages.” Brief at 1-2 (emphasis added). Having not graduated from Harvard myself, perhaps I am missing something. The operative statute, 17 U.S.C. Section 504(c), provides that “the copyright owner may elect . . . to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, . . . .” (emphasis added)

Nor is there anything in any authority to suggest that Nesson’s incomprehensible conclusion that the statute does not contemplate imposing statutory damages on individuals is founded in sources to obscure for me to know.

Nimmer on Copyright, Section 14.04[a] provides: “Under the current Act, the copyright owner may elect to recover statutory damages, instead of actual damages and defendant’s profits. He may, moreover, make such an election regardless of the adequacy of the evidence offered as to his actual damages and the amount of defendant’s profits, and even if he has intentionally declined to offer such evidence, although it was available. . . . The availability of statutory damages under the current Act, even under circumstances in which plaintiff’s damages or defendant’s profits are susceptible to precise evaluation, represents a departure from the pertinent provisions of the 1909 Act.Under that former law, the availability of statutory damages was to a degree discretionary with the court and turned largely upon the proof of actual damages and defendant’s profits.” (citations and internal quotation marks omitted)

Patry on Copyright, Section 22:153 states: “Statutory damages are damages whose assessment has been fixed by the legislature. They have existed in U.S. copyright laws since preconstitutional days and stand in contrast to common law actual damages and an accounting of defendant’s profits. Recovery of actual damages or profits varies according to the harm suffered or the benefit received, without an upper limit on the recovery. Statutory damages have been believed to be particularly valuable where such relief is difficult to prove. The purpose of statutory damages has been noted a number of times by the Supreme Court.”

Thus, the court in In re Mann, 410 B.R. 43, 49 (Bkr. C.D. Cal. 2009), quoting Columbia Pictures Television, Inc. v. Krypton Broadcasting of Birmingham, Inc., 259 F.3d 1186, 1194 (9th Cir.2001) (quoting Nimmer at § 1404[A] ), stated: “However, a plaintiff may elect statutory damages for copyright infringement ‘regardless of the adequacy of the evidence offered as to his actual damages and the amount of defendant’s profits.’” In Raydiola Music v. Revelation Rob, Inc., 729 F. Supp. 369, 374 (D. Del. 1990), the court explained that “the purpose of statutory damages is to remedy a wrong which would otherwise go unremedied if actual damages could not be proven.” See also Broadcast Music, Inc. v. Papa John’s Inc., 201 U.S.P.Q. at 305 (“Statutory damages were provided by Congress to create a remedy where actual damages [or profits] are not provable at law, but yet where it is proven that a violation of the copyright has occurred.”).”

In short, the plaintiff in a copyright infringement case has an alternative: he can prove and recover actual damages or seek the amounts allowed by statute. Such alternatives are common in situations in which it might be difficult for plaintiffs, even after having established statutory violations, to quantify their economic harm. It might even be argued that illegal downloading is precisely such a case — how can Sony BMG possibly quantify the sales, if any, it lost as a result of Tenenbaum’s unauthorized downloading of copyrighted songs.

Could I be wrong? Of course, but Nesson hasn’t begun to explain to me why. Instead, he’s made himself out to be someone who makes arguments that are patently false.

Don’t get me wrong here. I’m not on Sony BMG’s side. I think the music industry’s legal and business approaches to the technological revolution that has entirely undermined their old business models have been disasters, and I certainly don’t think Joel Tenenbaum should have to pay Sony BMG $675,000.

My problem is that Nesson is Tenenbaum’s lawyer and he hasn’t given me a good reason to believe he can get Tenenbaum free from that monumental verdict.

All the cash has been sucked from Simmons’ mattresses.

Is it any wonder we don’t trust Wall Street?

I saw it back in the 80′s up close and personal, when the debt was called “junk,” but the practice goes on and on and on. When credit markets are good, investors (called “private equity firms” or “merchant bankers” or “leveraged buy out firms” or the like among their peers and minions) will sell a company’s bonds to finance their purchase of the company, take fees for issuing those bonds, issue more bonds later on to take cash out of the company for themselves (and fees for the new issuance), and then, when the debt becomes to burdensome for the company, the purchasers of the bonds are left high and dry — that is, broke or, at best, with equity in a new, reorganized, and crippled company worth a fraction of what they paid for their bonds.

The latest victim? Simmons Bedding Company, the maker of the Simmons Beauty Rest Mattress. As the New York Times reports:

Simmons says it will soon file for bankruptcy protection, as part of an agreement by its current owners to sell the company — the seventh time it has been sold in a little more than two decades — all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money.

For many of the company’s investors, the sale will be a disaster. Its bondholders alone stand to lose more than $575 million. The company’s downfall has also devastated employees like Noble Rogers, who worked for 22 years at Simmons, most of that time at a factory outside Atlanta. He is one of 1,000 employees — more than one-quarter of the work force — laid off last year.

But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.

Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.

Copyright and Good Judgment: Damien Hirst, Idiot.

In England, a 17 year old artist named Cartrain created a collage that included an image of Damien Hirst’s diamond encrusted skull, a work entitled “For the Love of God.” As the Independent reports: “The collages were put up for sale on a website, 100artists.com. Hirst reported him to the Design and Artists Copyright Society and a string of legal letters were sent to Cartrain’s art dealer, Tom Cuthbert, at 100artworks.com, about the teenager’s pieces, also called For the Love of God. The online gallerysurrendered them to Hirst with a verbal apology.” So, in July, Cartrain walked into a museum showing some of Hirst’s works and walked off with a box of pencils from one of the installations. As Cartrain explained, “That same day I made up a fake police appeal poster advertising that the pencils had been removed from the Tate and that if anyone had any information they should contact the police on the phone number advertised.” “A few weeks later I went out and I returned home to find out the art and antiques squad from New Scotland Yard had called round with a warrant for my arrest.” According to the Independent, Cartrain “was told by custody officers that the pencils were valued at £500,000 and that he had damaged ‘the concept of a public artwork titled Pharmacy … valued at £10,000,000.’ Cartrain is on bail and, if convicted, his actions will feature among the highest value modern art thefts in Britain. Does Damien Hirst have the right to foreclose the use of images in which he owns the copyright from collages? Plainly, I don’ t think so. But it’s also one of those situations in which I’d tell a client to just back off. Reportedly, Hirst sold the skull for $100 million. The image is ubiquitous. I know I’ve sent it to friends as part of an app on Facebook. Do you, I’d ask, really need to be so heavy-handed in connection with a kid trying to get his start as an artist? (hat tip to Techdirt)

“Expert” is only a name; an “expert’s” ideas are only as good as the ideas themselves.

This is the honest truth: back when the Napster case was pending on appeal (the appeal Napster would eventually lose), I was teaching a legal writing class and the problem was about copyright and fair use in connection with a web site that used posted exerpts of copyrighted works and also an online “bulletin board” (it was that long ago) for discussion of the works. I told my class that I thought that if the music industry had any sense they’d put significant excerpts of every work in their catalogs in streaming audio next to a button that would allow electronic download of an mp3 file of each song for a price.

I bring this up not to boast that I am some brilliant businessperson who would’ve wisely been picked up by Apple to help produce iTunes. I have no doubt I’d read the idea a hundred different places and that it sounded good to me. So why do I bring it up?

The students reacted this way: it’s a stupid idea; if it weren’t, the music companies would’ve done it already. What would I know that they don’t? I was left almost speechless. I asked them if they really believe that people who do things necessarily know what’s best with respect to doing those things. They apparently did. I told them I thought that it was very important that they learn that just because an “expert” thinks certain things about his area of expertise doesn’t mean that a non-expert can’t have better ideas, and that it certainly isn’t the case that an entire industry necessarily does business in the best way it could.

I was reminded of all this when I read at Ars Technica that “Geoff Taylor, head of UK major label trade group BPI, wrote an op-ed piece for the BBC today in which he called Napster the ‘Rosetta Stone of digital music,’ said it was ‘simple to understand and use,’ and said that the music industry should have ‘embraced Napster rather than fighting it.’”

The MPAA explains how to show DVD clips in the classroom (the easy way?)

More lobbying to ridicule! From Ars Technica comes a video shown by the Motion Picture Assocation of America to the U.S. Copyright Office as “part of the triennial DMCA exemptions review.”  

In the video, the MPAA suggests that teachers who want to use movie clips as part of their curricula should use a camcorder to record the movie off of a TV set, and that this is an acceptable way to use video clips without breaking a DVD’s copyright protections. 

A better solution to the mortgage crisis, the federal governments bailout policies, and AIG’s failures to meet the obligations it took the risk of not meeting

I have several thoughts about the AIG bailout apart from what I consider the justifiable outrage over multi-million dollar bonuses being paid to the very people who set up the house of cards AIG had constructed.

First, I can’t understand why anyone would be surprised, much less outraged, that AIG paid much of the bailout money it received to other financial institutions.  Those institutions (Goldman Sachs, for example) owned mortgage backed securities and had purchased from AIG the “credit default swaps” that were, in essence, insurance that the owners of the mortgage backed securities would not earn from those securities what they were supposed to. Goldman Sachs had not received what they were owed on the mortgage backed securities because the crash in the housing market meant that homeowners were not making the mortgage payments that made up the pools of money out of which the owners of mortgage backed securities were to be paid.  Thus, when Goldman Sachs was not paid what it was supposed to be paid from the homeowners, Goldman Sachs turned to AIG and asked to be paid pursuant to the insurance policies it had purchased from AIG (that is, the credit default swaps).

AIG had never planned for such a shortfall in mortgage payments.  It had essentially sold the credit default swaps to earn easy money (the “premiums” for the sales) that it did not believe it would ever have to pay out on.  Thus, when in fact it did have to pay out on those credit default swaps, AIG was threatened with bankruptcy because its obligations to the owners of mortgage backed securities far exceeded its assets.

The U.S. could not afford to let that happen.  AIG is the world’s biggest insurer.  It’s failure would set off massive insecurity in every single aspect of life in which people and institutions depended on the availability of its insurance.  Neither could the U.S. afford to let the financial institutions fail.  That would mean a collapse of our banking system, an even greater and more profound impact on the functioning of our credit markets and other aspects of our economy — in short, a Depression on the order of The Depression.

Here’s what I don’t quite understand.  The underlying problem was that too many homeowners were unable to make their mortgage payments.  Why not readjust everyone’s mortgage payments (by, say, automatically cutting mortgage rates to the current low rates).  The owners of the mortgage backed securities would not make as much as they otherwise would have had the original rates been paid, but too many of the original rates weren’t paid to make enough of the mortgage backed securities assets with any material value.  The owners of the mortgage backed securities would make some of the money they had expected.  They would still be able to look to AIG under the credit default swaps for the difference between what they had expected to make under those securities and what they made under the readjusted, low rates, but AIG’s exposure would have been considerably lower — not the entire value of the mortage backed securities but, rather, the difference between what those securities earned under the new adjusted mortgage rates and what they originally were supposed to have been paid.  To the extent that obligation still threatened AIG’s existence, the government could make up the shortfall, but the amount of federal dollars required to do so would have been far less.

One objection, of course, is that we’d be rewarding those homeowners who took the risk of assuming mortgages they couldn’t afford.  The problem with that argument, of course, is that the owners of mortgage backed securities took the risk they wouldn’t get paid either through the securities from the pools of mortgage payments or from AIG, but we’re bailing them out.  And AIG, of course, took the risk in selling its credit default swaps that it would not be able to meet its obligations under them, but we’re bailing them out.  We’re doing so because we have to.

But we have to bail out the homeowners too.  The very existence and health of our cities depends on us doing so.  Why are the homeowners any more to be the victims of “moral hazards” than the financial institutions.

Everyone wins.  Homeowners stay in their homes at today’s mortgage rates.  The lenders don’t get what they contracted for, but they get what, given the circumstances we’re in, is a perfectly reasonable rate of return.  More importantly, the lenders don’t fail as a result of mortgage defaults and the insufficiency of foreclosure as a remedy to make up the loss resulting from the default.  The banks that own the mortgage backed securities are made whole (or almost so), and AIG is made whole (or almost s0).

Could anyone tell me what I’m missing here?  I do not claim to be an expert on these matters, but I am smart enough to follow the money and the trails of contract obligations, and I’m not quite sure where my logic fails.  I’m sure it must, but where?

The Associated Press seems bent on waging an unwinnable war.

The Associated Press has made a number of moves in recent times that demonstrate a indefensibly broad reading of the rights of copyright holders to protect their content.  Techdirt explains that the AP now threatens to require payment for access to its online content. Not only does it seem the AP has a remarkably narrow reading of the law; it also has a tin ear when it comes to navigating the new world of information.  Putting its content behind a pay wall open up the field of wire service reporting to competitors who would not do so if AP’s online content remained free (including CNN, which is apparently eager to do so).  Doing so would also be a stupid business move — not only would internet users likely not pay to get AP’s online content (just ask the New York Times).

As Techdirt points out, all of these moves seem to be the result of the AP’s fundamental misunderstanding of what the internet is used for –  communal sharing and commenting on the news:

The paywall itself is what takes away much of the value by making it harder for people to do what they want with the news: to spread it, to comment on it, to participate in the story. Until newspaper execs figure this out, they’re only going to keep making things worse.

Mr. Potato Head, Esq.

E-Commerce Times reports that “Hasbro has dropped its lawsuit against the makers of a popular online version of board game “Scrabble.” As reported last summer by the New York Times, “Looking to cut down its main competition and most high-profile copycat in the growing market for social gaming, Hasbro . . . sued the two Indian brothers behind the popular Web game Scrabulous, which has more than half a million regular users on the social network Facebook.”

Given the boost to Scrabble’s sales provided by Scrabulous’s popularity, many had wondered at the wisdom of Hasbro’s lawsuit. At the time, Josh Quitner wrote, “[A]s a tech writer and life-long student of what passes for Internet economics, I’m baffled. Is Hasbro just a stupid Potato Head? Or is this a brilliant game of Stratego?”

Mike Masnick explains:

It’s difficult to see how Hasbro could have handled the Scrabulous situation any worse. Scrabulous, of course, was a Scrabble-like game made for Facebook, which quickly became one of the most popular apps on that social-networking site. Hasbro, which owns the rights to Scrabble in the U.S., didn’t have its own version, and rather than recognize an opportunity, it chose to shoot itself in the foot, suing the brothers who created it. The Scrabulous guys eventually came back with a slightly modified game, which became quite popular as well, while many angry Facebook fans organized boycotts of Hasbro products. Prior to that, of course, the attention brought about by Scrabulous had resulted in a renaissance for the game, leading many people to go out and buy physical Scrabble sets. Yes, Hasbro took a situation that was driving more sales of the board game, and turned it into one where thousands of people were boycotting its products.

Back when Hasbro filed the lawsuit, Barry Nagler, Hasbro’s General Counsel, had explained that “Hasbro has an obligation to act appropriately against infringement of our intellectual properties.”

I’ve said it before and I’ll say it again: being a good lawyer isn’t just a matter of knowing and enforcing the law. It’s a matter of knowing and using the law to advance the best interests of your clients. The mere fact your client’s intellectual property is being “infringed” does not mean that your client’s best move is to go out and try to crush the infringer.

Donald Trump, Pop Star

Donald Trump has always been good for coming up with “creative” rationalizations for his failures and his apparent successes. His creativity has been the foundation of his career as a pop star. There has always been a serious question, however, whether he should be taken seriously as a business person. Trump’s real estate empire, begun on an already substantial fortune built by his father’s real estate exploits, has been for a considerable amount of time founded more on debt than on his own assets. But he continues to draw front page attention, as in today’s New York Times, which discusses a “lawsuit filed by Mr. Trump, the real estate developer, television personality and best-selling author, in an effort to avoid paying $40 million that he personally guaranteed on a construction loan that Deutsche Bank says is due and payable.” Mr. Trump argues that he is excused from his obligation to pay back the loan under a “force majeure” clause in the construction contract “that allows the borrower to delay completion of the building if construction is hampered by such things as riots, floods or strikes. That clause has a catch-all section covering ‘any other event or circumstance not within the reasonable control of the borrower.’”

“Would you consider the biggest depression we have had in this country since 1929 to be such an event? I would,” [Trump] said in an interview. “A depression is not within the control of the borrower.” ”

it is a ridiculous argument. Quite plainly an investor bears the risk of a downturn in the real estate market. And one could hardly deem the downturn in the real estate market unforeseeable. People have been claiming the real estate market was overheated for years. If Trump were to prevail, it should piss off every foreclosed homeowner in the country, few of whom were as well positioned as Trump to genuinely understand the risk of borrowing money that, in the event of a downturn in a market (an inevitable event), they would be unable to repay.

But Trump gets his lawsuit and his front page coverage in the New York Times. Just wait, though: sooner or later he’ll go into bankruptcy. Until now, he’s had so much borrowed money his lenders could not afford to let him go into bankruptcy — it was better to lend him more money and keep him in business than to risk losing what they would lose if Trump went into bankruptcy. But now the banks don’t have any more money to lend him. Stay tuned.

A couple of small laughs

A couple of amusing things this morning, a dismal day here in Detroit.  First, from CNet comes the news that

A British woman has reportedly been kicked off a jury for posting a “note” on Facebook asking her friends what they thought of the trial.

She was given the boot after the court received a tip about the posting. . . .

The woman’s name has not been released, but the court appears to have been Burnley Crown Court in Lancastershire, and the case involved child abduction and sexual assault. According to The Sun, the woman posted details of the case on Facebook and added, “I don’t know which way to go, so I’m holding a poll.” Yeah, that’s bad.

The trial is said to have continued with 11 jurors instead of 12.

 And from Overlawyered comes the tip that Sullivan & Cromwell, a major and very established New York City law firm, employs an attorney named Soo Yoo.  Which reminds me of William Gaddis’s A Frolic of His Own, in which 

Oscar Crease [is] a college instructor who is suing both a film company and himself.  Firstly, he is convinced that a Hollywood mogul has plagiarised an unpublished play of his about the American Civil War and turned it into a blood-and-guts blockbuster.  Secondly, he has managed to get himself run over by his own car while hotwiring it and, through the insurance company, he is claiming damages against himself. 

The brand of Crease’s Japanese car? Sosumi.

Surely you’re joking. I can tell by that ridiculous price.

On Friday I mentioned the case of a radio contest winner who successfully sued the radio station for the value of a Renaul Clio after she’d won a contest offering the car to the contest’s winner.  When she’d shown up to the station to claim her prize, the station had given her a tiny model of a Renault instead of an actual car.  This type of case turns on whether a reasonable person would believe the offer is a serious one.  Radio stations do offer cars as prizes.  In contrast, check out the following:

After seeing the ad, John Leonard, then a 21-year-old business student, discovered he could purchase individual Pepsi points from the company for 10¢ each.  After sending Pepsi $700,008.50 — representing money he had raised from five investors for 6,999,985 Pepsi Points, fifteen of his own Pepsi Points, and a little extra for “shipping and handling” — Leonard demanded his jet. Pepsi laughed off the claim, pointing out the Harrier had never been offered in the Pepsi Points catalogue and was just in the commercial to provide a humorous completion to the piece.

As indicated by Snopes.com, “If we have to put disclaimers on spots that are obviously farces, where does it end?” Pepsi spokesman Jon Harris said. Well, it didn’t end there. Leonard filed suit in Miami against Pepsi for breach of contract, fraud, deceptive and unfair trade practices, and misleading advertising.

Leonard lost.  In the opinion dismissing Leonard’s lawsuit, Judge Kimba Wood (speaking from personal experience, an excellent judge, though not immune from notoriety), did what lawyers often have to do — spell out in painstaking detail what most people accept as gut feelings.  In this case, she had to spell out that a reasonable person viewing the commercial would know that Pepsi was joking about the Harrier Jet:

Plaintiff’s understanding of the commercial as an offer must also be rejected because the Court finds that no objective person could reasonably have concluded that the commercial actually offered consumers a Harrier Jet. . . .

In evaluating the commercial, the Court must not consider defendant’s subjective intent in making the commercial, or plaintiff’s subjective view of what the commercial offered, but what an objective, reasonable person would have understood the commercial to convey. . . .

If it is clear that an offer was not serious, then no offer has been made . . .  An obvious joke, of course, would not give rise to a contract. . . . On the other hand, if there is no indication that the offer is “evidently in jest,” and that an objective, reasonable person would find that the offer was serious, then there may be a valid offer.

Plaintiff’s insistence that the commercial appears to be a serious offer requires the Court to explain why the commercial is funny. Explaining why a joke is funny is a daunting task; as the essayist E.B. White has remarked, “Humor can be dissected, as a frog can, but the thing dies in the process….” The commercial is the embodiment of what defendant appropriately characterizes as “zany humor.”

First, the commercial suggests, as commercials often do, that use of the advertised product will transform what, for most youth, can be a fairly routine and ordinary experience. The military tattoo and stirring martial music, as well as the use of subtitles in a Courier font that scroll terse messages across the screen, such as “MONDAY 7:58 AM,” evoke military and espionage thrillers. The implication of the commercial is that Pepsi Stuff merchandise will inject drama and moment into hitherto unexceptional lives. The commercial in this case thus makes the exaggerated claims similar to those of many television advertisements: that by consuming the featured clothing, car, beer, or potato chips, one will become attractive, stylish, desirable, and admired by all. A reasonable viewer would understand such advertisements as mere puffery, not as statements of fact, see, e.g., Hubbard v. General Motors Corp., 95 Civ. 4362(AGS), 1996 WL 274018, at *6 (S.D.N.Y. May 22, 1996) (advertisement describing automobile as “Like a Rock,” was mere puffery, not a warranty of quality), . . . and refrain from interpreting the promises of the commercial as being literally true.

Second, the callow youth featured in the commercial is a highly improbable pilot, one who could barely be trusted with the keys to his parents’ car, much less the prize aircraft of the United States Marine Corps. Rather than checking the fuel gauges on his aircraft, the teenager spends his precious preflight minutes preening. The youth’s concern for his coiffure appears to extend to his flying without a helmet. Finally, the teenager’s comment that flying a Harrier Jet to school “sure beats the bus” evinces an improbably insouciant attitude toward the relative difficulty and danger of piloting a fighter plane in a residential area, as opposed to taking public transportation.

Third, the notion of traveling to school in a Harrier Jet is an exaggerated adolescent fantasy. In this commercial, the fantasy is underscored by how the teenager’s schoolmates gape in admiration, ignoring their physics lesson. The force of the wind generated by the Harrier Jet blows off one teacher’s clothes, literally defrocking an authority figure. As if to emphasize the fantastic quality of having a Harrier Jet arrive at school, the Jet lands next to a plebeian bike rack. This fantasy is, of course, extremely unrealistic. No school would provide landing space for a student’s fighter jet, or condone the disruption the jet’s use would cause.

Fourth, the primary mission of a Harrier Jet, according to the United States Marine Corps, is to “attack and destroy surface targets under day and night visual conditions.” . . . Manufactured by McDonnell Douglas, the Harrier Jet played a significant role in the air offensive of Operation Desert Storm in 1991. . . . The jet is designed to carry a considerable armament load, including Sidewinder and Maverick missiles. See id. As one news report has noted, “Fully loaded, the Harrier can float like a butterfly and sting like a bee–albeit a roaring 14- ton butterfly and a bee with 9,200 pounds of bombs and missiles.” . . . In light of the Harrier Jet’s well-documented function in attacking and destroying surface and air targets, armed reconnaissance and air interdiction, and offensive and defensive anti-aircraft warfare, depiction of such a jet as a way to get to school in the morning is clearly not serious even if, as plaintiff contends, the jet is capable of being acquired “in a form that eliminates [its] potential for military use.”

Fifth, the number of Pepsi Points the commercial mentions as required to “purchase” the jet is 7,000,000. To amass that number of points, one would have to drink 7,000,000 Pepsis (or roughly 190 Pepsis a day for the next hundred years–an unlikely possibility), or one would have to purchase approximately $700,000 worth of Pepsi Points. The cost of a Harrier Jet is roughly $23 million dollars, a fact of which plaintiff was aware when he set out to gather the amount he believed necessary to accept the alleged offer. . . . Even if an objective, reasonable person were not aware of this fact, he would conclude that purchasing a fighter plane for $700,000 is a deal too good to be true.

Plaintiff argues that a reasonable, objective person would have understood the commercial to make a serious offer of a Harrier Jet because there was “absolutely no distinction in the manner” in which the items in the commercial were presented. Plaintiff also relies upon a press release highlighting the promotional campaign, issued by defendant, in which “[n]o mention is made by [defendant] of humor, or anything of the sort.” These arguments suggest merely that the humor of the promotional campaign was tongue in cheek. Humor is not limited to what Justice Cardozo called “[t]he rough and boisterous joke … [that] evokes its own guffaws.” Murphy v. Steeplechase Amusement Co., 250 N.Y. 479, 483, 166 N.E. 173, 174 (1929). In light of the obvious absurdity of the commercial, the Court rejects plaintiff’s argument that the commercial was not clearly in jest.

Leonard v. Pepsico has become a favorite of Contracts professors.  There are several good reasons why.  First, it plainly states the applicable rule: an offer is an offer if a reasonable person would take it as an offer, regardless of what the person making the offer subjectively intends.  Second, of course, it allows us to use in-class video, which makes us feel as if we’re somehow staying in touch with our students’ desires.  Third, Judge Wood does a good job at the skill that is so central to good lawyering — articulating feelings that most people are satisfied at merely feeling, not explaining.  In this case, the feeling is the feeling of humor (that Pepsi was just joking), but more often judges are required to explain why something is “just” when most non-lawyers would be satisfied with merely asserting “I just think it’s fair” or “I just think it’s not fair.”

Good lawyers, in short, begin their work where most people end their thinking.  Good lawyers take what people “feel” and make explicity and clear the reasons for those feelings.

Leonard v. Pepsico is an excellent case to illustrate one more very important principal.  What people intend is often embodied in and expressed by the price they are offering.  No one could take seriously an offer to buy a Harrier Jet for $700,000.  In fact, I might say (and often do to my Contracts students) that nothing is as expressive as price.

Top 10 of the World’s Weirdest Compensation Claims

I haven’t fact-checked this post, so I would take it with a grain or entire shaker of salt, but it’s amusing to read the Top 10 or the World’s Weirdest Compensation Claims.  As a Contracts professor, I am particularly amused by the following two (numbers 4 and 1 on the list):

In 2005 a Romanian prisoner, Pavel M., while serving 20 years for murder, sued God. He argued that his baptism was an agreement between him and God under which, in exchange for value such as prayer, God would keep him out of trouble.

Cathy McGowan, 26 of Derby, England, was overjoyed when a DJ told her that she had correctly answered a quiz question and had won the competition prize: a Renault Clio. However, when she arrived at the radio station to pick up her prize she was presented with a 4-inch model of the car. In 2001, she sued and a judge at Derby County Court ruled that the Radio Station and its owners to pay £8,000 for the real vehicle.

I would, incidentally, expect my current Contracts students to be able to answer on their exam why it would be that Ms. McGowan should have received the value of the real vehicle.  For that matter, they should be able to explain why Pavel M.’s breach of contract claim would be dismissed as well, though that argument might fall within the scope of Civil Procedure: my guess is that there is no governmental court in the United States that has subject matter jurisdiction over claims against God.  Personal jurisdiction, on the other hand, wouldn’t be a problem, assuming God is everywhere.  Putting aside the jurisdictional issues, it is difficult for me to opine on the merits of Pavel M.’s contract claim since I don’t have the terms of the agreement he reached with God.

On a not altogether incidental but less frivolous note, I should point out that frivolous claims (which Ms. McGowan’s plainly wasn’t) really aren’t the problem many people claim them to be.

Language abuse is posing an existential threat to those around me.

Perhaps it’s being reminded recently to re-read “Politics and the English Language.”  Perhaps it’s journalism’s daily abuse of our language.  Perhaps it’s the despair peculiar to mid-November of the first semester of law school, when students have realized they have learned a lot and, understandably, given the enormous effort they’ve made over the last three months to accomplish that learning, let up, forgetting what I’ve been telling them for those three months: it will be many, many years before they feel in their guts they’re really good at expressing themselves as lawyers and understanding other lawyers.  Perhaps it’s the letter a friend received from her mortgage lender making a sincere and pathetic effort to explain to a human being what it could do for her under the federal government’s recent “baiiout” plan.  Perhaps it’s reading of Malcolm Gladwell’s most recent best-selling insight — it takes 10,000 hours of practice for anyone to become really good at anything — and realizing that maybe it takes 10,000 hours of practice to become a really good legal writer.  Perhaps it’s realizing again, for the thousandth time, that lawyers really do often use their skill with language to obscure and deceive.

At any rate, I am suffering from the cynicism Orwell in that essay mentioned in the first sentence above argues against:

Most people who bother with the matter at all would admit that the English language is in a bad way, but it is generally assumed that we cannot by conscious action do anything about it. Our civilization is decadent and our language — so the argument runs — must inevitably share in the general collapse. It follows that any struggle against the abuse of language is a sentimental archaism, like preferring candles to electric light or hansom cabs to aeroplanes. Underneath this lies the half-conscious belief that language is a natural growth and not an instrument which we shape for our own purposes.

Can we at least agree on one thing?  Can we stop using the term “existential threat” to refer to a threat that poses a genuine risk of destroying someone or something’s very existence?  As in:

Iran poses an existential threat to Israel.

The Soviet Union during the Cold War posed an existential threat to the United States.

Islamofascism poses an existential threat to Western democratic capitalism.

The term “existential threat” hides the real question — how much of a threat? — behind the idea that if something poses a threat to one’s very existence it is as bad as a threat gets.

Maybe it’s just that I started writing this post at 4am, which I’ve heard is “the new midnight.”

One word can make all the difference.

In July, Nebraska passed a version of what has become known as a “safe-haven law,” which allows a parent to surrender an infant without fear of prosecution.  Such laws were adopted by every state over the last decade after numerous reports of babies left to die in trash bins or plastic bags. But only Nebraska’s version, which took effect in July, extended the protection to “children,” meaning up to age 18, rather than specifying a maximum age of a few days or months.

According to today’s New York Times, this choice of language has provoked Nebraska’s governor to call call a special session of the state legislature next month, immediately after the elections, to rewrite the statute.  As the Times reports:

On Tuesday, a 17-year-old boy was left by his mother and stepfather in Lincoln, and a 15-year-old girl was abandoned by her father in Omaha. That brought the number of children left in state hands since Sept. 1 — usually by parents or guardians who said the child was uncontrollable and violent — to 24, including one who was left at a police station rather than a hospital as the law dictates.

“We all hoped this wouldn’t happen,” Mr. Heineman said of the continued drop-offs. “Now circumstances dictate that we act.”

The cost of a special session has been estimated at more than $80,000, and the state’s “citizen-legislators” will have to take time off from their private jobs.