Monday, April 14, 2014

Sony Awarded $675,000 for Copywrited Music Downloads

Man with computer copyrighted music downloads
For many years now, the battle has raged on between music companies and internet users that seek to download and obtain copyrighted product for free. On one side, the legitimate argument that a product that is otherwise sold is being taken, or stolen, when downloaded for free. 

On the other side looms the argument that the internet is an arena of free reign in which the music companies are out of line for being concerned with. 

In the recent ruling of Sony BMG Music Entertainment V. Tenenbaum USCA, First Circuit June 25, 2013, the courts certainly affirmed the legitimacy of the music industry’s complaints.

Over the course of several years, Joel Tenenbaum downloaded as many as 5,000 individual songs online. This activity continued despite warnings from many parties including Tenenbaum’s own family members, friends, his college, and even a group of music companies. Eventually, Tenenbaum would face civil suit from Sony BMG Music Entertainment.

The subsequent suit went in Sony’s favor, with the jury deciding on an award of $675,000 for the plaintiff. This figure was actually a representation of the findings that Tenenbaum had also illegally distributed 30 songs, each having a jury-attached value of $22,500. Regardless, the total amount of $675,000 was far below the maximum allowable award that could have been awarded.

However, Tenenbaum sought an appeal, contesting that his constitutional rights were being violated by such a decision. Tenenbaum attempted to sway the appeals court in the direction of a previous case, BMW of North America v. Gore, alleging due process problems with the previous decision, based on the BMW case outcome. The court however, felt that the previous Gore case could not parallel copyright law context being measured in this current case.

Another previous Supreme Court case, St. Louis, I.M. & S. Ry. Co. v. Williams, was also a matter of precedence for the court to follow. In this previous case, the standard was set in assessing the constitutionality of statutory damages awarded. For the sake of Sony BMG Music Entertainment V. Tenenbaum, the overseeing appeals court correctly upheld the $675,000 ruling, finding that in light of the defendant’s actions, this award amount was proportionate to the offense, and thus constitutionally correct.

Fran Perdomo is a NYC Business Lawyer who focuses on Entertainment Law and protecting the rights of Musicians and Entertainers.
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Saturday, March 29, 2014

New York to Overhaul the Not-for-Profit Corporation Law

The New York State Attorney General has worked alongside leaders in nonprofit communities for years as a means to make changes to the Not-for-Profit Corporation Law. They are aiming to ensure that nonprofits provide fair compensation to their employees, as well as improve their management structures and make all of their transactions accessible to the public. These proposed changes are looking to go into effect on January 1, 2014.

Nonprofit reform has been an issue of heated discussion for many years now, especially when considering the high amount of revenue that nonprofits bring into New York State. These organizations have long needed better protections against fraud within their companies and have also needed to instate stronger whistle-blower protection policies, so individuals who attempt to expose misconduct or illegality within the company can avoid social or career persecution. 

Nonprofit leaders have been strongly in favor of this legislation, as it tries to simplify procedures that have long been considered cumbersome and pedantic. The legislation will also introduce improved technology into the nonprofit sphere, modernizing nonprofits without forcing them to sacrifice funds in other arenas.

Key provisions of the Nonprofit Revitalization Act include:

  • All companies in the country have recently had to deal with staff reduction and decreases in budgeting. As a result of this, incidents of fraud and theft have increased within companies. Nonprofits have been hit the hardest with these misfortunes and the bill aims to revitalize these organizations by establishing more succinct internal controls and derailing traditional power structures that have led to corruption.

  • This legislation will prevent any individual who serves as Chair of the organization's Board of Directors from also being a company employee. This provision aims to promote independent leadership within nonprofits, rather than isolating a select few individuals to have full reign over the company.

  • If any individual who owns 35 percent or more of the company has a vested interest in a certain transaction the company is making, the Board will be legally obligated to consider the advantages of other transactions.

  • Mandatory auditing will be instated, by which an auditing committee will need to be established for each company. This will also aid in working through potential conflicts of interest within the company.

  • Definitive conflict of interest policies must be instated, including what constitutes a conflict of interest and how such situations will be resolved.

  • Mandatory whistle-blower policies will need to be created. Any organization with more than 20 employees and an annual revenue greater than one million dollars will be required to adopt said policies. These procedures will aim to protect the companies against retaliation from whistle-blowers, as well as instill frameworks for reporting suspected misconduct.
  • The bill will also attempt to eliminate some of the hurdles that come along with making administrative changes within nonprofits.
  • One of the main concerns of nonprofits has been the two-step approval process in place for all nonprofit mergers. The new law would allow the Attorney General to serve as an alternative approval to the Supreme Court, so as to allow these mergers to happen in a time-efficient manner.

  • For all real estate transactions, the law will require a Board approval of two-thirds, rather than the previous requirement of majority rule.

  • Presently, many nonprofits have been required to obtain the approval of the State Education Department before incorporation. The types of companies that will be required to gain approval will be minimized and approval will only need to be granted within 10 days of incorporation.

  • The four types of nonprofits will be eliminated in lieu of two types: charitable and non-charitable. Organizations formed for both charitable and non-charitable purposes will be considered charitable corporations in the eyes of the law.

  • Nonprofits will have full access to electronic means of communication, including e-mail and videoconferencing.

  • This law will change the requirement to obtain an audit from a gross revenue of 250,000 dollars to 500,000 dollars.

The new law will stress the importance of granting fair, reasonable compensation to all nonprofit employees for the services they are performing. A compensation committee will need to be created as a means to consistently ensure that compensation is adequate. Any employees making greater than 150,000 dollars will be reviewed.

Fran Perdomo is a leading NYC Business Lawyer, who focuses on entertainment law and commercial litigation. Learn more by visiting her website at
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