Month: July 2013

Who’s In Charge Here? (And when does federal excise tax apply?)

The most important factor to consider when you consider whether federal excise tax is due on aircraft rentals is whether the owner-lessor of the aircraft transfers “possession, command and control” of the aircraft to the lessee.

Where an S corporation leased an aircraft (its sole asset) to a related C corporation, and the S corporation employed a pilot and crew to operate and maintain the aircraft, and was also responsible for providing alternative aircraft if its aircraft were unavailable, the S corporation retained possession, command, and control of the aircraft. The C corporation’s lease payments were therefore subject to the air transportation tax.

Rent paid for a bare (or “dry”) aircraft lease, where the payee doesn’t exercise such possession (that is, for more than a temporary period typical of a lease, hours or perhaps a few days), “command” (usually, in the form of providing pilots), or “control” (as in “operational control”) isn’t a taxable payment for transportation.

Assuming you have a taxable flight the question then becomes which charges are taxable.  In one case the rent a lessee paid to an airline for the lease of a plane to transport company personnel was an amount paid for taxable transportation.  The “amounts paid” for such transportation, however, excluded nontransportation charges such as food and certain expenses of painting and modifying the plane, in part because such charges were separable and are shown separately in the lessor’s records.  All air transportation companies (or dry lessors) should make it a practice to break out these types of charges as specifically as possible, both internally and in invoices given to the customer.

In another case rent for helicopter service paid by an oil company using the helicopter for oil exploration is payment for transportation if the helicopter company provides the pilots, retains command, control and possession of the helicopter and performs the operational services.

Amounts paid to a helicopter rental company for the hourly, per diem, and 30-day charges for the furnishing of helicopters with pilots to a company for the transportation of employees to and from job sites was subject to tax.  The Court of Claims held that the air transportation tax is imposed on both the monthly charge paid to a helicopter rental company to insure the availability of helicopter service, and the hourly charge paid for the actual use of the helicopter.

Contact us for citations or further guidance:  877.771.1131

She & Them: Photographer Loses Copyright Battle Over Profits with Apple

She & Them: Photographer Loses Copyright Battle Over Profits with Apple

 

Apple’s Commercial Uses Copyrighted Image Without Permission

 

profits
She & Him Copyright Battle

A federal judge has ruled that Apple doesn’t have to share profits with a photographer over their infringing use of an image in an iPhone commercial. This lawsuit started when prominent fashion photographer Taea Thale snapped a promotional photo of the band She & Him. Hipster actress Zooey Deschenel (of TV and movie fame) is one half of the band duo and a former Apple endorser. Ms. Thale registered her copyright to the photo and then licensed it with Merge Media for band promotion. That license prohibited specifically the use of the photo to hawk other products.

Apple would later air a commercial for 2 weeks in 2010 that advertised its iPhone 3GS. The 30 second commercial was a montage of images showing the iPhone’s latest innovations, including including album cover art. 5 seconds of that commercial used Ms. Thale’s image of She & Him as part of the montage, despite Apple never getting permission to use it. When a royalty check never arrived from Apple, Ms. Thale sued the company for copyright infringement.

So What’s the Harm from Apple’s Infringement?

 

Ms. Thale’s lawsuit asked specifically for profits from Apple’s sale of iPhones that the infringing commercial promoted. The Court, however, shut this claim down. A copyright lawsuit typically complains of infringement that creates direct profits for the offender. A musician who rips off lyrics profits directly from album sales. An author who steals a plot from another writer profits directly from book sales. And a magazine that uses photos without permission profits directly from subscription sales. The facts of Ms. Thale’s case, on the other hand, could only support that Apple profited indirectly from its infringement. Apple didn’t profit by people viewing its infringing commercial (rather, it likely paid large sums to air the commercial), but could only have profited indirectly through the sale of the iPhone on the back end.

Ms. Thale’s copyright claim ultimately failed because she couldn’t prove Apple profited from its infringement. Apple’s copyright infringement was not an issue. In a claim for indirect profits, however, the plaintiff must offer concrete evidence of that profit. The Court decided in this case that the facts showed that Apple only hoped to generate iPhone sales from the commercial. Ms. Thale didn’t offer any actual proof of boosted profits and could only speculate that the commercial generated increased iPhone sales. The Court also noted a logical and reasonable argument (such as Ms. Thale’s) is still just speculation and does not add up to proof of profits. It’s not enough to show there is some relationship between the infringement and profits, there must be a cause and effect relationship between the two.

Does Apple Just Get Away with its Copyright Infringement?

 

Apple is not off the hook just yet. The Court only decided Apple doesn’t have to share profits. Ms. Thale can continue to seek damages for any actual harm that Apple’s infringement caused her (e.g. her lost profits!). This case teaches what’s necessary to make a claim when infringement creates indirect profits.

Join the discussion and leave a comment.

Ari Good, JD LLM, is an experienced Miami entertainment lawyer and aspiring musician himself who represents DJs, live musicians, fashion models, and other entertainers in copyright, licensing, and contract matters. For a free and confidential consultation to discuss your legal rights, contact Ari of Good Attorneys at Law, P.A., in Miami-Dade County at (239) 216-4106 or toll free at (877) 771-1131 or by email to info@goodattorneysatlaw.com. Visit goodattorneysatlaw.com for more information.

Image by Mindy Bond

Filmmaker Ungrateful About Claimed Copyright Infringement

Filmmaker Ungrateful About Claimed Copyrighted Infringement

 

The Back Story for the Copyright Infringement Lawsuit

 

Grateful Dead copyright infringement
Grateful for copyright law

A California filmmaker, Len Dell’Amico, is suing the Grateful Dead for copyright infringement over his allegation that the band leased documentaries and concert films that he created and owned. This long, strange trip begins in 1980 when Dell’Amico, a NYU film and television grad, first worked with the band on it’s live TV broadcast and home video ‘Dead Ahead.’ Dell’Amico would go on to be the Dead’s ‘film and video guy’ for the next 11 years, producing and directing their film projects from 1984 to 1991. Dell’Amico also claims in his lawsuit that they negotiated a deal for back-end compensation from the video release of these works. The years rolled along and, in late 2006, Grateful Dead Productions leased the films to Rhino Entertainment for 10 years. Rhino never credited Dell’Amico for producing and directing the films, nor paid him the promised back-end compensation (“royalties”). The lawsuit was on.

Failure to Register Copyrights Creates a Problem

 

But here’s the rub: Dell’Amico never applied to register any copyrights to the films until recently. The registrations are currently pending at the U.S. Copyright Office. Dell’Amico lacks definitive proof that he actually owns the right to the films. And this is exactly what the band is arguing. The Grateful Dead recall things differently from Dell’Amico and claim he was only a hired gun to produce and direct their films. The band owns all rights to the films because Dell’Amico was compensated for his work and their arrangement kept copyright ownership with the band. As it stands, without the clear proof of copyright registration, it’s a he said, they said matter.

Copyright Ownership Can Still be Proven in Other Ways

 

This doesn’t mean that Dell’Amico’s lawsuit is busted down on Bourbon Street. A 2002 agreement for a Grateful Dead documentary “So Far” gives Dell’Amico a 50 percent cut of the film’s revenue up to $25,000 and 15 percent of gross income over $750,000. This agreement does provide some proof that Dell’Amico created and owns the rights to the films that are the subject of his lawsuit. That agreement clearly came about because there was a belief Dell’Amico owned the copyright to the film. It may also show that he owns the copyright to the films that are the subject of his lawsuit.

Two Important Lessons from this Copyright Infringement Lawsuit

 

However the lawsuit plays out, the dispute highlights two important principles. The first is an overwhelming reason to register your copyrights. Dell’Amico likely would have a much easier time proving his allegations if he had taken the time to register any copyrights two decades ago. This lack of foresight could cost him big time. The second is over the issue of copyright ownership. If you are hired to create works that are covered by copyright law (music, film, television, dance, etc.), an important part of that arrangement is who keeps ownership of the copyright to the works.

Add a comment to share your own story or your thoughts on these issues.

Ari Good, JD LLM, is an experienced Miami entertainment lawyer and aspiring musician himself who represents DJs, live musicians, fashion models, and other entertainers in copyright, licensing, and contract matters.

For a free and confidential consultation to discuss your legal rights, contact Ari of Good Attorneys at Law, P.A., in Miami-Dade County at (239) 216-4106 or toll free at (877) 771-1131 or by email to info@goodattorneysatlaw.com.

Image by Gazerocker

The Six Rights of Copyright – Part V: The Right to Public Display

The Six Rights of Copyright – Part V: The Right to Public Display

 

Public Display and the Bundle of Rights That Make Up Copyright 

 

This is the fifth part in our series on what makes a Copyright, the right to public display.  The prior four rights reviewed are linked below for you to get up to speed.  To refresh, the six parts of copyright are:

To try to get behind the curtain of copyright, we’re individually exploring each of these six rights.  An understanding of each and how they operate will allow you, the creator, to be in a better position to take advantage of your copyright.

There are a couple words of caution.  First, the practical effect of these exclusive rights will depend on the type of copyrighted work (literary works, musical works, motion pictures, sound recordings, etc.).  Second, these are exclusive rights.  The law allows only the copyright holder to exercise these rights.

V: The Right to Publicly Display the Work

 

Copyright owners have the exclusive right to display or permit others to display the copyrighted work publicly. The public display right is similar to the public performance right, except that it is applicable to public “display” rather than a performance.  This right applies to musical works (the lyrics, composition, and arrangement), but not to sound recordings (a particular version of a musical work).

The Right to Public Display Protects what People can See

 

Right to Public Display
Sheet music on public display

A public display of copyrighted means to show a visual copy of the work to others.  This covers individual images (stills) from a film, reproductions of paintings and drawings, sheet music from a musical works, or photos from other performance pieces.  Public display can occur directly or indirectly through the use of film, slides, or television.  It’s important to bear in mind what is a pubic display vs. a private display.  In general, it’s a private display if you’re showing a work to a small circle of family and friends.  It’s a public display when the showing goes beyond that small circle of family and friends.  See the prior article on the right to public performance for more detail.  A museum exhibit, a television show, or transmission vis the internet are good examples of public displays.

Limitations on the Right to Public Display

 

An important limitation on the right to public display covers the situation when a person buys a lawfully made copy of the copyrighted work. Under this scenario, the owner of the copy can display it directly (e.g. the buyer of a copy of a DaVinci painting can display in their office).  The owner can also display it indirectly, but only one image at a time (e.g. the buyer of a music video cannot display the entire video, only a still).

The ubiquitous Fair Use exception to copyright protection can come into play for the public display right, too.  Other limitations to the right of public display are out there, but are beyond the scope of this article.

            – Ari Good, Esq.

Ari Good, JD LLM, is an experienced Miami entertainment lawyer and aspiring musician himself who represents DJs, live musicians, fashion models, and other entertainers in copyright, licensing, and contract matters.  For a free and confidential consultation to discuss your legal rights, contact Ari of Good Attorneys at Law, P.A., in Miami-Dade County at (239) 216-4106 or toll free at (877) 771-1131 or by email to info@goodattorneysatlaw.com.  Visit goodattorneysatlaw.com  for more information.

Image by Josh Gross