This year’s Attorney Forum covered a wide range of topics including conflicts of interest for sales representatives who represent competing lines, aspects of international law that impact sales representative relationships, successor companies and liability, valuation of rep firms, differences in manufacturers’ representative laws among states, ownership of customer lists and the recent amendment to the Minnesota Commission Protection Act.
CK&E regularly represents manufacturers’ representatives with respect to disputes relating to commissions, including a 2011 victory on behalf of its sales representative client that resulted in the published decision Reilly v. Inquest Technology, in which the Court of Appeal affirmed a $6.2 million judgment in favor of the sales representative under special California laws protecting sales representatives. CK&E is proud to be a member of MANA and is honored to be recognized by the leading association of manufacturers and agents as specialists in the area of rep law.
If you’re a California employer, how well do you keep track of your employees’ meal and rest periods? California law requires that employees be provided at least a ten-minute rest period every four hours, and a 30-minute meal period after five hours. Non-exempt employees who work more than eight hours in a day, and more than 40 hours in a week, must be paid overtime. Employers are required to maintain accurate records of employees’ timesheets and pay. It sounds simple, but the devil is in the details. If you have employees, it is important to put policies in place to ensure that all employees are taking their breaks and being paid for any overtime work.
If an employee believes he or she was deprived of meal and rest periods or not paid for overtime hours worked, the employee can file a complaint with the California Labor Commissioner. The Labor Commissioner’s Office, also known as the Division of Labor Standards Enforcement (DLSE), is the forum for adjudication of such claims. Often, this kind of complaint is filed after an employee is terminated. Employers should realize that, regardless of the reasons for termination, in a wage and hour claim the deck is stacked against them from the start – it is the employer’s burden to show that the employee took breaks and was properly paid.
CK&E attorneys routinely advise clients about navigating California’s complex employer workplace requirements, and advocate for clients in disputes before the California Labor Commissioner and California state and federal courts.
Confronting product counterfeiters can be an expensive, labor intensive and sometimes frustrating task, particularly when undertaken as a solo effort. The panel sponsored and moderated by CK&E will highlight strategies for combining the strength of private enforcement and available public sector resources to combat counterfeiters using all available tools. The panel will assess when and how to use civil resources in partnership with criminal enforcement for the most effective and cost-effective assault on product counterfeiters. The panel will address practical steps to best leverage the strengths and resources of both arms against the scourge of counterfeiters, illustrating points with real world experiences.
Join us and learn how to get the most bang for your brand protection buck in the battle to defeat counterfeiters. CK&E is proud to again sponsor this important brand protection event.
The conference features speakers from leading companies in the technology industry, including Google, Facebook and Twitter, as well as representatives from federal and global regulatory organizations, such as the World Intellectual Property Organization (WIPO), U.S. Department of Commerce and the Internet Corporation for Assigned Names and Numbers (ICANN).
Every business is affected by developments regarding the Internet. CK&E participates in important industry conferences of INTA and others to stay in the forefront of developing issues affecting the firm’s clients. Check back for blog post updates from the conference to stay abreast of innovations and changes in governance and brand protection on the Internet.
Under Proposition 65, no legal action is authorized by the Attorney General, district attorneys or private enforcers until 12 months after the listing of that chemical. TCA (CAS No. 76-03-9) was added to the list of chemicals known to the state of California to cause cancer on September 13, 2013. As a result, Proposition 65 private enforcers were allowed to start sending out Notices of Violation over alleged exposure to TCA without a warning beginning on September 14, 2014. The law permits such private enforcers to file a lawsuit 60 days after the Notice of Violation is served.
In addition to TCA, the following chemicals became subject to Prop 65 enforcement action on September 14, 2014: chloral (CAS No. 75-87-6), chloral hydrate (CAS No. 302-17-0) and 1,1,1,2-tetrachloroethane (CAS No. 630-20-6).
Conkle, Kremer & Engel has significant experience in helping businesses understand and comply with the requirements of Proposition 65 and other regulations to avoid exposure to liability. In addition to working with businesses to develop an effective compliance strategy, CK&E handles all aspects of Proposition 65 defense, including responding efficiently if a Notice of Violation is received.
It is virtually impossible to get through a day without seeing the “right of publicity” in action. Everywhere, there are advertisements featuring photographs of professional models and celebrities of every variety published to sell all types of products and services. It is strange, then, that no statute or case precedent in California specifically established that models and celebrities have the ability to assign or license those publicity rights for proper use and for enforcement if their likenesses are misused. Until now.
On September 12, 2014, the California Court of Appeal agreed with the arguments of Eric Engel of the Conkle Firm (working with co-counsel at Hall & Lim), and established the first published precedent in California that explicitly holds that the right of publicity is assignable. In Timed Out, LLC v. Youabian, Inc., Case No. B242820, the Second District Court of Appeal finally settled a long-simmering dispute that had confused many lower courts: Whether the right of publicity is a “personal right” that can only be exercised during lifetime by the individual owner, or whether the right of publicity is a form of intellectual property that can be freely assigned and licensed to others for use and enforcement.
The dispute had its origin many years ago, when an influential tort law treatise by famed Professor Prosser observed that the right of publicity historically derived from the “right of privacy.” The classic form of the “right of privacy” is protection against hurt feelings and injury to personal reputation that can occur when personal information about a private individual is published without her consent. That type of injury is considered personal in nature and cannot generally be assigned. But, as the Timed Out decision observed, the right of publicity has evolved away from its origin into a distinctly commercial and non-personal interest.
The right of publicity is now virtually the opposite of the original right of privacy: The right of publicity is the ability of a person to control the commercial value of the use of her image and information. Timed Out recognizes that a person’s likeness, voice, signature or other identifying characteristics can have substantial commercial value, regardless of whether the person is a celebrity and regardless of whether the commercial value of the identified person’s “persona” is created by happenstance or by investment of great time and effort. Timed Out finally establishes that the value created is a form of property, freely assignable by the person who owns it.
The Court of Appeal also resolved a separate important issue that is frequently in dispute in right of publicity actions: Whether federal copyright law subsumes and preempts right of publicity claims. Timed Out v. Youabian established that the right of publicity is distinct from copyright interests in a photograph or image, and that right of publicity claims generally are not preempted by federal copyright laws.
The effect of Timed Out LLC v. Youabian, Inc. for models, celebrities, manufacturers, advertisers and resellers is to finally establish that the right of publicity can be licensed and assigned to third parties, and enforced by third parties such as Timed Out, and that such rights are independent of federal copyright interests. That means models and celebrities no longer have to make the difficult decision whether it is worth their time, expense and effort to pursue claims when their publicity rights are violated – they can assign the affected publicity rights to agencies such as Timed Out to pursue the claims. Manufacturers, advertisers and resellers will no longer waste effort and time attempting to determine whether the publicity rights were assignable. They can and should instead focus on establishing whether they had the necessary rights to use the image, photograph, likeness, voice or other identifying characteristic of the “persona” of the model or celebrity. This puts a premium on making sure that any “model releases” obtained prior to advertising are well-written and appropriate for each particular use of the model or celebrity’s photograph, image, likeness or other identifying features.
Conkle, Kremer & Engel counsels and helps clients avoid these kinds of issues with effective model releases, licenses and assignments. Timed Out v. Youabian demonstrates that CK&E is also at the forefront of enforcing the right of publicity when model and celebrity rights are violated.
These claims seem to be emblematic of a recent upswing in claims of violations of the “right of publicity”. One prominent example is Davis v. Electronic Arts, a case on behalf of some 6,000 retired pro football players who are suing Electronic Arts over use of their identities in the Madden NFL video game series. In arguments pending in the Ninth Circuit Court of Appeal, Electronic Arts claims First Amendment protection for claimed “transformative use” of the players’ images. Even if that argument were successful, it will not likely be of much help to others who simply use a photograph or other unadorned likeness of an individual.
California and most other states recognize that a person has a right to protect his or her name, likeness, signature, voice and other identifying aspects of personae from commercial exploitation without consent. The right of publicity protects not just photographs but all forms of likenesses, including animated versions of people in videogames. The right of publicity is a type of intellectual property – in some ways analogous to (but not the same as) a trademark. An important point to understand is that the right of publicity is not ordinarily precluded simply by ownership or license of the copyright in the image – even if you took a photo of Lindsay Lohan yourself and you own the copyright in that photograph, that in itself generally does not mean you can use it in an advertisement to sell a product without Lindsay Lohan’s consent.
The right of publicity is distinct from rights protecting against slander or defamation – there is no requirement that a person’s reputation has been harmed in any way, or that he or she ever had a positive reputation. Manuel Noriega is probably best known as a former leader of Panama who was deposed, tried and convicted of drug trafficking, racketeering and money laundering. Nonetheless, Manuel Noriega has the same right to prevent others from commercially exploiting his name and likeness as anyone.
An important and often overlooked aspect of the right of publicity is that it is a right held by everyone – not just celebrities. While celebrities presumably may command more money for the commercial use of their identities, everyone has the same right to protect his or her name from commercial exploitation without consent, regardless of previous anonymity.
This is a particularly important lesson for businesses that might be inclined to scour the Internet, copy a photograph of some unknown model and use it in advertising or packaging. In addition to the risk that unauthorized copying and use might violate a copyright in the photo, such unauthorized use for commercial promotion runs a strong risk of violating the model’s right of publicity and giving rise to a claim for damages. Even a business that has ordered a photo of a professional model specifically for use in advertising or packaging would do well to check whether the model signed a release that covers the particular use, because model releases can differ in scope, duration and effect.
Conkle, Kremer & Engel has been involved on both sides of the right of publicity – defending actions by models against companies who thought they had sufficient releases of the models’ rights of publicity, and asserting models’ rights to be compensated for the commercial value of their likenesses. CK&E attorneys stay current on the developing law of the right of publicity, which is a quickly expanding area of law affecting everyone from manufacturers and marketers to models, celebrities and ordinary people.
A great time was had by all participants in a wide variety of events, some of which were not dependent on golf skills – like the helicopter ball drop. Participants enjoyed cocktails, dinner and a presentation by Operation Homefront California, which provides emergency financial and other assistance to the families of our service members and wounded warriors. Operation Homefront operates nationwide with 23 chapters serving 50 states with over 33,000 volunteers and more than 105,000 families served thus far.
Electronics Representatives Association (ERA) is a trade association of professional manufacturers representative firms serving the high tech industry for the benefit of sales reps, distributors and manufacturers. ERA SoCal has chosen Operation Homefront to be the beneficiary of its Second Annual Charity Golf Tournament. CK&E is pleased to be an associate member of the Southern California chapter, ERA SoCal.
In Rennick v. O.P.T.I.O.N. Care, the Ninth Circuit Court of Appeal considered a party’s contention that a deal was struck when, after months of discussion and a 4-hour negotiating session, the parties “got up and circulated around the room and shook hands with each other on having made the deal.” The Rennick case observed that a jury could reasonably find that “the handshake was confirmation of a contract, or that it was an expression of friendship and the absence of ill will after a day of hard bargaining.” So, given the uncertainty of its meaning, should we stop shaking hands when discussing business? Of course not. Indeed, the Court noted that, “By custom, it is a rude insult to reject an outstretched hand in most circumstances, and to do so at the end of a long business meeting would likely prevent a future deal.”
The issue of the parties’ intent upon shaking hands is not a small one. In August 2014, Charles Wang, the owner of the New York Islanders was sued by a hedge fund manager who claimed that the parties had shaken hands on a deal to buy the NHA hockey team for $420 million, and that Wang had breached their agreement by demanding more money. The frustrated purchaser sued to either enforce an apparently unsigned 70-page agreement to conclude the sale of the team, or recover a $10 million break up fee that he claims was among the terms agreed upon with a handshake.
Courts struggle with this kind of issue, with or without handshakes. In contract disputes, courts try to enforce the parties’ expressed intentions. For example, where the parties clearly express that they do not intend to be bound until they sign a formal written contract, courts will try to honor that intention by finding that no contract exists unless a written agreement was fully signed. Indeed, negotiating parties usually can express almost any manner of requirement before an agreement becomes enforceable. Quentin Tarantino’s civil war era film Django Unchained featured a climactic scene in which the odious character Calvin Candie extorted Dr. King Schultz into signing an outrageous contract, and then insisted that the signed contract was meaningless unless Dr. Schultz also shook his hand. As a general point of law that was a doubtful proposition even in Mississippi in 1858, but if the parties had been careful to express that intention in their written agreement it probably would have been an enforceable prerequisite to the validity of the contract.
In reality, too often there is no such clear delineation. If the parties do not eliminate such possibilities by an express statement of their intentions, oral expressions or an exchange of emails or text messages might create an enforceable agreement. That is because, when the parties aren’t careful about expressing their intentions, courts are left to divine whether the parties intended an agreement with or without signatures on paper. Courts consider testimony about what was said and evidence of what was written and the activities that took place before, during and after the time of the purported agreement to draw conclusions about what the parties’ intentions really were. Often, the parties’ contemporaneous correspondence is the most important evidence of whether the parties intended to have a binding agreement immediately, or whether the parties intended only to express their good will or intention to negotiate further.
To avoid unnecessary disputes, a cautious businessperson should make a point to express clearly his or her intentions. The best approach is to plan ahead and be as clear as possible in a written expression as to when the deal is considered enforceable. The Conkle law firm counsels and represents businesses in negotiations to achieve those ends, or in disputes that can arise when the businesses handled negotiations themselves and come to Conkle, Kremer & Engel attorneys only after things did not turn out as intended.