Sunday, December 18, 2011

This Article Is Brought To You By The Letter Blank: Written By New York Entertainment Lawyer And Trademark Attorney John J. Tormey III, Esq.


Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney
John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
New York, NY  10128  USA
(212) 410-4142 (phone)
(212) 410-2380 (fax)

This Article Is Brought To You By The Letter Blank: Written By New York Entertainment Lawyer And Trademark Attorney John J. Tormey III, Esq.

© John J. Tormey III, PLLC. All Rights Reserved.

This article is not intended to, and does not constitute, legal advice with respect to your particular situation and fact pattern. Do secure counsel promptly, if you see any legal issue looming on the horizon which may affect your career or your rights. What applies in one context, may not apply to the next one. Make sure that you seek individualized legal advice as to any important matter pertaining to your career or your rights generally.

Most of the American public including most all entertainment lawyers, heard about one of Oprah Winfrey’s well-publicized litigations a number of years ago. My understanding was that she was sued in Texas by a commercial cattle-oriented conglomerate. The plaintiffs apparently claimed that Oprah had inaccurately and unfairly maligned the culinary safety of cow meat, during one of her television programs. The Texas case seemed vaguely surreal and comic, even from the perspective of an entertainment lawyer - sort of like an overly-imaginative law school exam question. But next we must go from the sublime to the ridiculous. This next case was an entertainment lawyer and trademark lawyer’s delight. Talk about the eradication of your sacred cows. The local press in New York reported that a German “fetish magazine” named “O” sued one of Oprah’s companies and her publisher, over the sale of Oprah’s magazine bearing the equally-expansive title of “O”. Query if it was really a service mark dispute as opposed to a trademark dispute.

Perhaps even more befuddling, from the entertainment lawyer or publishing lawyer perspective or otherwise, the German “fetish” magazine somehow derived its own title from the erotic novel “Story of O” - serving as even more of a reminder that there is truly nothing new under the sun. And if this were not bizarre enough, the local press reported that Oprah’s company and publisher were prepared to change the name of her magazine to “O, The Oprah Magazine”, in an apparent attempt to assuage the seething service mark or trademark plaintiff and make the distinction between the two magazines more apparent.

Coincidentally, this lawsuit received even more attention from trademark lawyers, entertainment lawyers, and others, than usual, since Lions Gate was slated to release a film called “O” around the same time the suit materialized. I understand the Lions Gate film was somehow loosely based upon Shakespeare’s “Othello”. The Bard himself referred to the Globe Theatre as “this wooden ‘O’“. Maybe if we find Shakespeare’s heirs - perhaps arguably incarnate in the Bacon Brothers - we can thereby locate the real plaintiff who has something to complain about?

But come on. All kidding aside, could this trademark (or service mark) lawsuit really be happening? Yes. Yes it could. But maybe it shouldn’t be allowed to happen. The minds of reasonable trademark lawyers, entertainment lawyers, and others, may differ.

Let’s back up a step. Generally speaking, as entertainment lawyers or trademark lawyers will advise, one acquires trademark rights or service mark rights under U.S. law, by consistently using a trademark or service mark in connection with goods or services, and/or by registering the trademark or service mark with one or more appropriate governmental authorities.

Most people and businesses pick lousy names from a trademark or service mark perspective, and most people pick those names without the assistance of an entertainment lawyer or a trademark lawyer. The majority of marks go unregistered, and the majority of trademarks or service marks are never properly searched and cleared by a trademark lawyer, entertainment lawyer, or anyone else before use. Again, there is very little new under the sun, and as most all trademark and entertainment lawyers will attest, most word-paths have been tread upon by someone else previously. Then again, searching and registering a trademark or service mark, with or even without a trademark lawyer or entertainment lawyer, is not without cost. So, many cost-constrained start-up businesses elect to just “wing it” and dispense with the search until they can afford to “get around to it”. And surprisingly, sometimes even major-league companies who can otherwise afford to so it, dispense with the trademark or service mark search, dispense with the services of the trademark lawyer or entertainment lawyer, and just go ahead and use the proposed name. Ironically, this type of decision keeps trademark and entertainment lawyer litigators who work the back-end of these fact patterns, in business.

Trademark lawyers and entertainment lawyers may sometimes advise their clients to select multiple-word names rather than one-word names - as rock-band-name trademarks or service marks, for example - since the statistical chances of infringing some other band’s name and trademark or service mark are likely thereby somewhat reduced. Most artists, on the other hand, are solely concerned about the aesthetics of the band name, and if a one-word band name sounds right to them, they will use it and darn the torpedoes. This type of decision can also keep trademark and entertainment lawyer litigators who work the back-end of these fact patterns, in business.

I have admittedly not yet trademark-searched any of the following band names. But as a trademark and entertainment lawyer, a proposed one-word band name like “Blur”, at first blush, would trouble me a bit more than the two-word “Def Leppard”, from a trademark or service mark perspective - since, without knowing anything else about the underlying facts, I would assume that the statistical chances were somewhat higher that another band might be named (or might have been recently named) “Blur”. When a trademark lawyer or entertainment lawyer performs a search on a trademark or service mark or proposed mark, these kinds of concerns and historical analyses come into play.

Trademark lawyers and entertainment lawyers may also sometimes advise their clients to try to use more incongruous word combinations as band-name trademarks or service marks, rather than predictable word combinations. By this rationale, “Squirrel Nut Zippers” (the first time, for the candy, that is!), or “Stone Temple Pilots” start to look pretty good as far as their trademark or service mark prospects, to say nothing I suppose about “Orchestral Manoeuvres In The Dark”. After all, what are the odds, the trademark lawyer queries, that the full name “Orchestral Manoeuvres In The Dark” name was used as a trademark or service mark by any other pop or rock band prior to or contemporaneously with 1986’s “If You Leave”? Then again, apart from entertainment lawyer legal concerns, the band and its handlers may have had trouble fitting the full name onto a record jacket sleeve, and may also have had trouble convincing record label A&R executives that the choice of name should be supported.

One must understand, therefore, that the prospect of trying to protect, let alone enforce and prevent others from using - a one-letter trademark or service mark, is the trademark lawyer’s or entertainment lawyer’s equivalent to fingernails scraping on a chalkboard. If a client walks into the office of a trademark lawyer or entertainment lawyer and says “Hi. I’d like to protect, for my own exclusive use, the letter ‘W’“ - well, then absent some extreme fact pattern perhaps relating to a powerful Texas family, that lawyer can expect at least a long and tough road ahead - and perhaps a few broadsides of ridicule from the bench and other trademark lawyers and entertainment lawyers at the bar as well. They might think that the so-subscribing lawyer took Sesame Street’s commercial endorsement announcement “This program was brought to you by the letter ‘W’”, a little too seriously when younger.

Most Americans conceive of “monopolies” as something anti-competitive, unfair to the consumer, and ultimately evil - especially given publicity in recent years accorded to the Microsoft case. But what is interesting about copyrights and trademarks and service marks, as a trademark lawyer or entertainment lawyer will tell you, is that they are in fact legal monopolies protected by federal statute. A property right is, essentially, the right to exclude others from using that same property. That is conceptually quite similar to a monopoly. If I own my house, I can keep you off my land with a fence, and the law will back me up on that. If a company owns a registered trademark in “Chock Full o’ Nuts”, for example, then, through the efforts of its trademark lawyer or entertainment lawyer counsel or otherwise, that company owns the right to exclude others from using the same name in connection with the sale of coffee, and perhaps related goods and services as well.

So here is the trademark lawyer entertainment lawyer philosopher question. Haven’t we as a society gone too far, when we even entertain the prospect of a company, or a celebrity, laying claim to a single LETTER of the ALPHABET as a service mark or trademark? Indeed, should any prior claimant be able to use the services if a trademark lawyer or entertainment lawyer to legally monopolize the use of a letter of the alphabet, in connection with ANY kind of goods or services, magazine or otherwise? Should they and their trademark lawyers and entertainment lawyers even be allowed into court with that kind of argument?

Are all individual Arabic numerals also now in play for trademark lawyers and entertainment lawyers? We might as well allow some corporate behemoth to pull the character of Santa Claus out of the public domain, into the realm of copyright-protection, and charge a royalty whenever the fat man’s name or image is evoked. As for trademark versus service mark, does Mr. Claus provide goods or a service, when you get right down to it? And what about prior sources? Do the publishers of the first edition of Webster’s dictionary, or their successors, now have a valid trademark claim to assert through their trademark lawyer or entertainment lawyer litigators, against Oprah and the German magazine, for the use of “their” letter of the alphabet as a service mark or trademark?

Harkening back to the Oprah cattle litigation, some cows are sacred. Some things should simply stay in the public domain. Section 105 of the U.S. Copyright Act, for example, excludes works “of the United States Government” from copyright protection. Shouldn’t letters of the alphabet be treated the same way, as non-service mark non-trademark public commodities exempt from any monopolistic endeavors, upon instruction to all trademark lawyers and entertainment lawyers who might try to argue otherwise? There may well already be case law holding unitary alphabet letters to be disqualified from trademark and service mark protection under certain circumstances. The U.S. Patent and Trademark Office likely has trademark application and registration procedures, possibly reading to similar effect. If so, why not simply codify that common-sense principle in all applicable trademark statutes and other laws, as a de facto and de jure standing instruction to all trademark lawyers and entertainment lawyers and their clients? Among other things, a decisive action like this one could eliminate, or at least mandate a shorter life-span for, court-clogging trademark and service mark lawsuits like the “O” story.

And what’s next? Will the adjudicated winner of the O litigation also be awarded a legally-sanctioned monopoly as trademark or service mark over the corresponding three dashes in “- - -”; that is, in the International Morse Code symbol for the letter “O”? Will that be some other trademark lawyer’s or entertainment lawyer’s next argument? Or should that control instead now be awarded to the heirs of Morse, wherever they may be? And what about our National Anthem? Am I at risk of being enjoined by another trademark lawyer or entertainment lawyer from singing “O(h) say can you see...” at the start of baseball games at Shea Stadium – I mean, CitiField? And what about Tic-Tac-Toe? Must there now be a Congressional mandate that “X” must always win, and must always occupy all 9 cells on the grid, so as not to “infringe” the trademark or service mark rights of the clients of any other trademark lawyers or entertainment lawyers? And if so, what about the fate of Whoopi Goldberg and Hollywood Squares in syndication?

A number of entertainers use single-word names, and we as a society tolerate that – as do, apparently, the trademark lawyers and entertainment lawyers that represent and enable the talent. We tolerate the Gilbert Gottfried “One-Named Boy” routine moreso if the entertainer has the talent to back it up: “Elvis”. “Sting”. Now, “Prince” is, of course, a variation on the theme, an entertainer who at one point dispensed with his chosen one-word name in favor of an arcane symbol not found in the American alphabet – with or without his trademark lawyer’s or entertainment lawyer’s imprimatur. The general point here is that, Prince aside, the trademark lawyer and entertainment lawyer will advise the entertainer that he or she may be able to build up some trademark or service mark protection in his or her continuous and uninterrupted use of the [a]rtist’s one-word name, particularly if that entertainer is extremely well-known.

But some of us trademark and entertainment lawyers and others may feel that claiming one of the 26 letters of the alphabet as your own, takes its own special brand of... uh... chutzpah. Basketball’s Oscar Robertson was known as “The Big O”, probably because fans and the press tagged him with that moniker – probably not because his trademark lawyer or entertainment lawyer told him to use it - and probably not because Oscar adopted it for himself. Oscar Robertson may not have been as well-liked a guy, if instead he himself had arrogated “The Big O” nickname for his own use! And speaking of Oscar, asks the trademark and entertainment lawyer, how ‘come he hasn’t appeared yet in this lawsuit?

In similar vein, some trademark lawyers, entertainment lawyers, and others may feel that Oprah should have been satisfied to call her magazine “Oprah” rather than, simply, “O”. It is unlikely that Oprah’s decision as to how to name the magazine was forced upon her by her colleagues – entertainment lawyers or otherwise. In other words, a different P.R. decision may have had incidental legal benefit, too.

Sure, there is precedent in the entertainment field, as trademark and entertainment lawyers are aware, for trademark or service mark use predicated upon a single letter of the alphabet. The musical group “M” had a number-one hit with “Pop Muzik” in 1979, and that was kind of cute - but the group seemed to disappear from the music scene before anyone even began to consider the trademark or service mark implications of their continued use of their band name. Perhaps the group’s trademark lawyer or entertainment lawyer will read this article and write to this website to weigh-in.

The television company “E!” of Chelsea Handler and Talk Soup renown has apparently been successful in establishing a brand name for itself, presumably with trademark lawyer and entertainment lawyer counsel and assistance, accepting the inherent challenge in generating trademark and service mark rights in a one-letter name. But the E! Network’s use of the exclamation point, and their occasional use of the linked phrase “entertainment network”, arguably properly distinguishes them from the alphabet-usurping pack. The Motion Picture Association of America (MPAA), along with the help of its trademark lawyer counsel, lays claim to its single-letter-ratings as trademarks or service marks in some fashion - that is, currently, “G”, and “R”. But then again, I suspect that the MPAA would carefully refrain from threatening another company’s use of the letter “G” or “R”, unless that use was made in the context of ratings or otherwise in connection with motion pictures or filmed entertainment.

The point is, there is something disturbing about this O lawsuit filed in the district court in Manhattan, from the perspective of an entertainment lawyer and trademark lawyer, and perhaps to others as well. What if a schoolteacher reads about this lawsuit, and now tries to find a trademark lawyer lay personal service mark claim to the letter grades “A” through “F” as used on student-graded papers? What if that same teacher starts invoicing all other teachers who grade papers in the U.S., demanding trademark royalty payments? And speaking of damage to the world of education, what will Grover, Elmo, and the gang at Sesame Street do, when they can no longer boast that a particular program is “brought to you by the letter ‘W’”, at least not without their entertainment lawyer or trademark lawyer counsel present on set? Worse yet, will that entertainment lawyer or trademark lawyer be required to wear an over-the-head costume or be a muppeteer to blend-in on the set when doing so? The consternation is enough to press the ghost of O. Henry and his trademark lawyer back into active service - the only question being, if O. Henry rejoins the non-ethereal world and joins the lawsuit, will he join as party-plaintiff or party-defendant on the advice of counsel? And, will O. Henry’s apparently-prescient use of the period after his “O” render him impervious to trademark or service mark liability?

But seriously folks, in defense of Oprah and the trademark and entertainment lawyers that love and enable her, it is apparently not her or her entertainment or trademark counsel or entities that initiated the aggressive attempts to exclude others from use of the letter “O”. Rather, according to the news reports, it was the German “kinky fashion” magazine promoting leather and garters that decided to attack Oprah’s company in the context of the New York court, and the magazine then sought out a trademark lawyer for that purpose. And in response, Oprah and her affiliates, presumably on trademark lawyer or entertainment lawyer advice, apparently decided to expand her magazine title, to make the bright-line distinction between the two magazines more apparent to all, including the consumers. Maybe as a matter of reciprocal international courtesy, and in an effort to keep this dispute from wasting further judicial resources or using up more trademark lawyer or entertainment lawyer time, the leather and garter crew should agree to change their magazine’s name from “O” to “Ouch!” But query if they thereby would risk receiving an adverse trademark or service mark claim from the ‘E!’ network based upon the use of ‘E!’s exclamation point.

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My trademark law practice as a publishing and entertainment attorney includes all fields of entertainment and media including music, film, publishing, television, Internet, and all other media and art forms – and trademark, service mark, and copyright work. If you have questions about legal issues which affect your career, and require representation, please contact me:

Law Office of John J. Tormey III, Esq.
John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
New York, NY  10128  USA
(212) 410-4142 (phone)
(212) 410-2380 (fax)

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Thursday, December 15, 2011

Independent Contractors vs. Employees - Part I: Written By New York Entertainment Lawyer And Employment Attorney John J. Tormey III, Esq.


Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney
John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
New York, NY  10128  USA
(212) 410-4142 (phone)
(212) 410-2380 (fax)

Independent Contractors vs. Employees - Part I: Written By New York Entertainment Lawyer And Employment Attorney John J. Tormey III, Esq.
© John J. Tormey III, PLLC. All Rights Reserved.

This article is not intended to, and does not constitute, legal advice with respect to your particular situation and fact pattern. Do secure counsel promptly, if you see any legal issue looming on the horizon which may affect your career or your rights. What applies in one context, may not apply to the next one. Make sure that you seek individualized legal advice as to any important matter pertaining to your career or your rights generally.

As an entertainment attorney practicing in New York, I see people and companies struggling to address the definition of independent contractor vs. employee, frequently. Anyone who hires workers or is thinking of doing so, in New York or elsewhere in the United States, should be aware of the following. Before hiring anyone, it is critical that one carefully determines with one’s accountant and entertainment attorney or other counsel whether the new hire is to be an “employee”; or, alternatively, an “independent contractor”. The terms have legal and financial import; they are mutually exclusive; and one should never use them interchangeably.

The distinction between the two types of workers is important because, among other things, it is usually more expensive and more administratively inconvenient to hire and pay “employees” as opposed to “independent contractors”. On the other hand, few persons or companies that hire workers are truly willing to relinquish control over their hires, to a sufficient degree to allow those workers to accurately be characterized as “independent contractors” as opposed to employees. As an entertainment attorney, I frequently encounter business projects of short duration such as a single film shoot, a single album recording, or a single pilot shoot. The question of “independent contractor vs. employee” therefore arises most often in the context of media and entertainment projects of multi-week or multi-month duration. Though the two constructs, “independent contractor” and “employee”, are not necessarily self-defining, the word “independent” is used for a reason, and truly translates to “loss of hiring-party control”. I’ll explain below.

The U.S. Internal Revenue Service in (former) “IRS Publication 937” identified 20 “checklist” factors that it considered when determining whether or not an individual worker is an “independent contractor” as opposed to an “employee”. The litmus test has apparently since evolved somewhat. See, e.g.:
The hiring party should review the most updated version of the IRS criteria prior to any hires, and it is probably more important to do so with one’s payroll company and tax accountant, than one’s entertainment attorney. The hiring party should also be aware that the IRS is not the only institution with whom to be concerned regarding the all-important “independent contractor vs. employee” determination. Other governmental agencies have a stake in preventing mischaracterization of workers as independent contractors, too.

For example, the state Department of Labor (state “DOL”) in one’s own home state may apply its own checklist of criteria to distinguish independent contractors vs. employees. One needs to be aware that there is a federal [US] Department of Labor as well as a state Department of Labor. A hiring party needs to comply with the requirements of both. In a perfect world, there should be consistency between the respective “checklists” of the IRS and the applicable DOL, as well as consistency between each agency’s interpretation of those checklists. However, your entertainment attorney and tax accountant will opine to you that the world isn’t perfect, and those interpretations could differ as to what constitutes an independent contractor versus an employee. Therefore, one should be aware as to how a local state DOL characterizes the two different types of workers, too - if different than the IRS characterization. Additionally, from an enforcement perspective, the DOL could challenge a hiring business’ characterization of its workers as “independent contractors” vs. employees, without the IRS joining in on the contest. The IRS and the DOL are separate agencies, although there is a suggestion that they will more thoroughly share electronic data with each other on field data and this issue in the near future.

The “independent contractor” determination can be the proverbial unstable apple cart, easily tipped. An employer, as most know, should withhold taxes from an employee’s pay, and make unemployment contributions with respect to those employees, among other things. Hiring companies in the entertainment field, for example, even if they already have an entertainment attorney and a tax accountant, still often wisely use a “payroll company” to administrate payment obligations to workers, so as not to transgress. The cost of a hiring party mischaracterizing an employee as an independent contractor instead, could be high. If ever in doubt, payroll companies and accountants should skew cautious and conservative when making the distinction for their clients in favor of employees – and the entertainment attorney will usually tell the client to listen to his or her payroll company and tax accountant.

However, let’s say that a hypothetical music recording studio, or film production company, for that matter, hires 20 workers, characterizes them all (in reasonably good faith) as “independent contractors”, but uses no payroll company, tax accountant, or entertainment attorney initially. Let’s further assume that the film production or music studio pays no unemployment insurance or workers compensation contributions with respect to any of the hires, and does not withhold taxes from their paychecks. Then, one independent contractor worker is terminated, and vindictively files with the local state DOL for unemployment compensation, claiming to be a fired “employee” instead. Even after phoning the entertainment attorney and tax accountant to enlist their retroactive help, it may now be too late. The recording studio or film production could now find itself faced with a state DOL that characterizes not just the one claimant-worker - but all 20 workers - as “employees” as opposed to “independent contractors”. The apple cart tips. The camel’s nose is now in the tent.

The recording studio or film company may be required to litigate administrative hearings on the independent contractor v. employee question, and may thereupon be assessed retroactive unemployment insurance contributions, interest, and penalties with respect to the workers that “should have been paid as employees”. Other actions may also follow, such as a workers compensation audit, and perhaps even findings by the IRS and local tax authorities with respect to claimed monies that “should have been withheld” from the “employees” pay. The argument of, “But I told them they were independent contractors” may be considered a mere ipse dixit proposition and might not wash with the government. The entertainment attorney or the business owner can state the case to the authorities that short-term hires are the bread-and-butter of the local entertainment economy in the jurisdiction and so should be rewarded and not punished, but the adjudicating authorities may not accept that distinction between entertainment and non-entertainment sectors. Their only care may be to decrease the overall number of independent contractors and increase the total number of employees across all industries and sectors.

Could this nightmare have been avoided by the recording studio or film production company, through documentation, prospective use of its entertainment attorney, or otherwise? The answer is “Maybe yes, maybe no”. Please see Part II of this article for a further discussion.

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My entertainment law practice includes state and federal employment law matters relating to independent contractors and employees and other human resource matters as they arise in the fields of film, music, television, publishing, Internet, and other media and industries. If you have questions about legal issues which affect your career, and require representation, please contact me:

Law Office of John J. Tormey III, Esq.
John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
New York, NY  10128  USA
(212) 410-4142 (phone)
(212) 410-2380 (fax)

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Independent Contractors vs. Employees - Part I

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