Biletsky Law Video Blog Introduction

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Hello everyone,

I am proud to re-introduce myself as I begin a new series of video blogs, or “vlogs”. My name is Joshua Biletsky and I am the founder of Biletsky Law. I am an attorney based in Hollywood, California and provide legal services to clients in the entertainment industry as well as to entrepreneurs and businesses. In each vlog edition I will be discussing legal issues and events in various areas of entertainment law, intellectual property law, and topics concerning start-up businesses. The blog content will be the same quality you’ve always enjoyed, but will now be accompanied by a short video to go along with the content of the blog. I hope you stay tuned to Biletsky Law’s next edition.

 

What does the new California law for LLCs mean for me?

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On January 1, 2014 a new law in California was enacted that impacts new and existing limited liability companies (LLCs) alike. So what does this new law mean and does it have any effect on you? This article will explore what the new law aims to achieve and what it means to your business.

Limited Liability Company

Background

The California Revised Uniform Limited Liability Company Act (RULLCA) replaces the Beverly-Killea Limited Liability Company Act. One of the goals of the RULLCA is to put California’s LLC laws on the same page as other states. The new law also aims to provide additional flexibility and enforceability of an LLC’s operating agreement. The RULLCA sets out several default provisions that come into play when an operating agreement is silent. All of the provisions of the RULLCA are automatic and LLCs do not need to file any paperwork or do anything in order for these changes to be made. There are certain provisions of the law that cannot be changed, such as certain fiduciary duties. There are also others that can be changed or removed by way of making changes to the LLC’s operating agreement. So let’s get into what the major changes are:

Operating Agreement

The RULLCA gives the operating agreement of an LLC more fortitude in that the any provisions written in an operating agreement will now supersede any conflicting records filed with the Secretary of State. The RULLCA also gives rise to a new form of operating agreement which is the “implied operating agreement.” This is in addition to the written and oral form of the agreement.

Member Managed

By default, LLCs are now member-managed. In order for an LLC to be manager-managed, the Articles of Organization and the operating agreement must state so. Managers also have equal rights in managing the LLCs. There are also some courses of business that require unanimous approval by members such as a certain sales of assets, mergers, an amendment to the operating agreement, or any acts that are outside the ordinary course of business for the company. These default provisions are amongst those that can be overridden in the operating agreement.

Voting Rights

Under the new law, any activity that is outside the ordinary course of the LLC will require the unanimous approval of all of its members. This provision may also be overridden by specific mention in the operating agreement. Also, what the LLC’s “ordinary course of business” is can be defined more broadly or narrowly in the operating agreement to help in the customization of the LLC’s business.

Biletsky Law -Limited Liability Company

Fiduciary Duties

Another change that the RULLCA makes is that it outlines what fiduciary duties a manager owes to a member. These include the duty of loyalty, the duty of care, and the duty of good faith and fair dealing. These duties are automatic and while some can be changed by doing so in the written operating agreement, others such as the duty of loyalty and the duty of good faith and fair dealing cannot be eliminated.

Contributions

The definition of “capital contributions” to the LLC has been expanded beyond money, property, or services rendered to also include “any benefit” provided by a person to the LLC.

Indemnification

The new law has made it mandatory for the LLC to indemnify managing members of the LLC who complies with their statutory duties. This can be overridden by stating so in the operating agreement. The RULLCA also expands indemnification to include the reimbursement of managers for payments made in the course of business, made on behalf of the LLC. Again, this reimbursement is dependent on whether they have met their statutory duties.

Taxes

The RULLCA has eliminated the default provisions for tax allocations. The former law had a default rule whereby the profits and losses were proportionally divided according to the contributions of each member. Now, the operating agreement must specify the how profits and losses are to be allocated amongst the members.

Disassociation

The RULLCA has created certain triggers for the automatic dissociation of a member. These include the death of a member who is an individual, the appointment of a guardian or conservator of an individual, a judicial order stating that the member is incapable of performing their duties, and if a member becomes a debtor-in-bankruptcy. These triggers may also be overridden by changes to the operating agreement

Conclusion

So, there you have it. California’s new LLC law imposes several changes which may, or may not, have an impact on your company. While there are several other changes that the RULLCA has to the former law, these are some of the major changes which may impact your business. As always, it is best to have an attorney review your operating agreement and discuss with you whether any changes should be made in light of the changes made by the new law.

What’s In A Copyright?

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Copyright Law

In modern society, copyrights come up more than you may notice. Basically every book, movie, television show, play, and drawing are subject to copyright laws. Understanding what exactly copyrights are and how copyright laws work will help give you a better understanding of the subject.

So let’s start with what a copyright is. Copyright law has a long history dating back several hundred years, but for now, we’ll focus on modern copyright law in the United States. A copyright is an exclusive right that allows someone to print, publish, perform, film, or record literary, artistic, or musical material. What that means is that the owner of the copyright controls how the copyright is used legally. An owner can license, transfer, or sell their copyright and that’s where most copyright owners are able to make money from their creation.

 

What does it take to have a copyright?

Owning a copyright is easy if you created an original work. In fact, you do not even need to go through the formal process of registration in order to own a copyright. Copyright is automatically granted once an original work is “fixed in a tangible medium of expression.” So let’s talk about what it takes to have a copyright:

Originality

It should come as no surprise that in order to have the copyright to something that it needs to be original. If this was not the case, everyone would just attempt to gain the copyrights to work that people had already created and the law would essentially be useless. Determining whether something is “original” can be a complex issue and courts around the country have wrestled with this issue time and time again. Whether you are able to use enough creativity to make someone else’s work original is a separate issue in and of itself, but if you are the original creator and have used creativity in the objects’ creation, you have likely met the requirement for originality.

Fixation

Fixation is a concept that may seem more complex to understand, but for most purposes, it is rather straight forward. Keep in mind however that this concept has continued to change along with the evolution of digital media. Putting many of the digital media issues aside, fixation comes from simply putting the work onto something “fixed.” When words are printed on pages, they are fixed. When a song is saved as an .mp3, it is fixed. When the frames of a movie are imprinted onto film, it is fixed. And well…you get the point, almost anything physical (or digital if it can be saved) will fulfill the fixation requirement.

So if you’ve used creativity to create an original piece of work that is fixed onto something tangible, you may have a copyright. Copyrights are automatic in that you do not need to register your work with the Copyright Office in order for you to have a valid copyright. Rather, as soon as it goes down on paper or is saved as a file, you receive copyright protection. The classic myth that you need to mail it to yourself or any of those shortcuts to copyright ownership is unnecessary. However, even if you do have the copyright to the work, you may still consider registering the copyright.

 

So why should I register?

Although you may automatically have a copyright, registration is still an important part of protecting your work. Here are some of the advantages of registration:

You can sue

In order to sue for copyright infringement you must have registered your copyright. Although you may still be able to bring a lawsuit against the infringing party, to bring a claim for copyright infringement, you need to register. In addition to this benefit, timely registration can provide you with even more benefits. Timely registration allows you the benefit of receiving statutory damages. Statutory damages range between $750 to $30,000 or can go up to $150,000 for willful infringement. Whether registration in timely depends on several other factors such as the date of publication of the work.

Biletsky Law Copyright Licensing

It makes things easier

Registering your copyright makes several things easier. First, it makes it easier for you to win a lawsuit. The reason for this is because it makes it harder for someone to argue that the infringement was innocent because registration provides notice to everyone that you are the owner of the work.

Registration also makes it easier to transfer, license, or sell your copyrighted work. In fact, certain agreements are not even possible without your work being registered. For example, agreements that lead to the production of films and television shows usually require purchase agreements for the underlying work. Many of these agreements require the copyright to be licensed or assigned to the other company. Without having your work copyrighted it may be harder to enter into these kinds of agreements.

 

Now what?

If you had not given serious consideration into registering your work with the U.S. Copyright Office, hopefully you’re thinking about it now. The Copyright Office has made it easy to register your copyright and the fee for doing so online is only $35 (as opposed to mailing in the registration which costs $65). Depending on the work, registration can be easily be done yourself or if there are complicating circumstances, a legal professional will be able to perform the necessary registration procedures.

 

Is an LLC the best option for me?

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Biletsky Law - LLC Benefits
Relatively speaking, LLCs are one of the newer entity choices that companies may be structured as. But just because it’s a popular entity choice doesn’t necessarily mean that it’s the right choice for you. So let’s explore some of the advantages and disadvantages of selecting an LLC.

 

But first, what is an LLC?

An LLC, or a limited liability company, is a unique entity type which combines different characteristics from other types of business entities. Just looking at its’ name gives you a better idea about what this means. The limited liability part is generally a characteristic of corporations which provide the corporation’s owners with protection from liability. Another characteristic that an LLC has is the way that it is taxed, but we’ll get into that a little later.

 

So what’s the deal with the “limited liability”?

Let’s start off by comparing other business entities. A sole proprietorship or a general partnership are business structures where the individual or partners are held liable for the general business, profits, and losses of the company. Now let’s look at LLCs and certain types of corporations. With these entities, the individuals are protected from liability and the company itself is liable for the business of the company. This is generally speaking and there are many situations where the individual owner may become liable.
Biletsky Law - LLC Taxes

And what about the taxes situation?

Here’s another aspect of an LLC that is particularly alluring to business owners. Again, let’s look at some of the other entity choices. Individuals in sole proprietorships and certain types of partnerships are only taxed once, also known as a “pass-through” tax. This is different from certain types of corporations which may be subject to double taxation. This occurs when the corporation is taxed and then the individual is also taxed. In certain states an LLC provides it’s owners with the choice of how to be taxed. These choices can include being taxed either like a sole proprietorship (or a partnership) or as a corporation.

 

Costs and Investors.

One of the downsides of setting up an LLC is the cost. Sole proprietorships and partnerships have minimal to no cost to set up. LLCs and corporations can cost up to several hundred dollars to set up depending on the state the company is being set up in. For some companies, this downside is offset by the fact that LLCs and corporations are attractive to investors whereas sole proprietorships and partnerships are generally not conducive to investors.

 

Decisions and Changes.

Business planning and selecting which structure is best for you and your company can be complex and there are numerous different issues that you need to consider before deciding which one is ideal for your situation. It is highly recommended that you discuss your business plans with a legal professional before making your decision. However, just because you have already chosen or even already set up your business as a particular entity does not mean that everything is set in stone. Depending on the state your business is in, changing the type of entity can easily be done.

Conclusion

So where does this leave us? LLCs can be very flexible and advantageous business structures depending on the state you are attempting to set your business up in and what your overall goals are. The topics discussed above are just a few of the issues to consider when choosing how to set up your business. Remember, planning, research, and knowledge are essential to the success of your company!

 

WHAT TO DO IF SOMEONE USES YOUR PICTURE WITHOUT PERMISSION

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A couple of years ago one of my clients, David Kimmerle, had just started going out with a young lady. Eventually it got to the point where David was to meet her parents. Before David came to her house for dinner that night, her mother decided to look him up online. What happened next shocked both her and David. After entering David’s name into a search engine, the first images that came up were from a pornographic website. The website had edited David’s picture to include explicit content onto his body. Needless to say, the dinner did not go as smoothly as planned…

When someone uses an image of you, an image you took, or an image that you created without your permission it can cause serious reputation and economic damages. So what do you do if someone is using your picture without your permission?

Stolen picture

Having your image used somewhere without your permission can be detrimental to your image and reputation.

  1. Is it yours?

You first need to make sure that it is in fact your picture. The fact that it caught your eye in the first place is a good start but you need to do some investigating to be sure that it is actually your picture. Pursuing any legal action against someone without first being able to verify that it is in fact your picture can have serious consequences.

  1. Save it!

The very nature of online postings allow things to be moved, deleted, and changed very quickly. If you are certain that the picture is yours, be sure to take a screenshot of where the picture is being used and to gather as much information about the person, website, or company that is using your image. It is also important to make sure that you still have the originals. It is even better if the originals have some indication of the date they were created or published.

  1. Take action, maybe…

Now that you’ve confirmed that someone is using your picture without your permission, you have documented its’ use, and you have found out who is behind the unauthorized use; it is time to choose your next step. Many people’s first response is to sue for copyright infringement. While that may certainly be an option, there are several other courses of action that you should be aware of before going with any particular route. Also keep in mind that some people choose not to take any action at all and rather see the use of the picture as a way of gaining exposure. One suggestion if you do decide to not take action is to at least make sure that you are mentioned or provided with credit for the picture.

 

So here are some of your options:

Reach Out

  • Is this something that can be solved amicably? Sometimes simply contacting the person who used your picture can be enough to have them take it down. This is especially true if they inadvertently used your picture. If you do decide to reach out to whoever is using your picture, be sure to save a copy of the email or letter as it may be able to be used later on if they refuse to cooperate.

DMCA Takedown Notice

  • If you don’t feel like being so amicable or if reaching out to the user was unsuccessful, one of your next steps could be to send out a DMCA takedown notice. DMCA stands for Digital Millenium Copyright Act and a takedown notice allows you to request that the internet service provider (ISP) who is hosting the image take down the infringing picture. Sending a DMCA takedown is something that you can do on your own but depending on the circumstances, it may be best to have a legal professional do it for you.

Cease and Desist Letter

  • A cease and desist letter is seen as a formal demand for a person to stop a particular activity. This is generally sent to the individual who is using your picture without your permission. Although anyone can send a cease and desist letter, how effective it is can depend on a number of things. Having an attorney prepare or at least review a cease and desist letter can help increase the chances that the letter will result in your picture being taken down. In some cases, cease and desist letters from non-attorneys may even be disregarded or ignored by the infringing party.
Stolen image

Copyright infringement can be considered theft and is illegal.

Small Claims Court

  • Small claims courts are courts which only hear matters of small disputes. The maximum amount of recovery that can be requested will vary from county to county and from state to state. An advantage with suing through small claims is that you may not have to hire an attorney and can usually bring the case on yourself. The rules that govern small claims courts are usually very user friendly and are not like the rules that govern other courts of law.

Litigation

Litigation can by far be the most time consuming and costly option to go with as far as having your picture taken down. But it is by no means a rare occurrence. Copyright infringement suits, particularly those involving the right to use someone’s image, are very common. A successful lawsuit will almost always require you to hire an attorney to bring the lawsuit. The process of litigation varies in different jurisdiction, but generally speaking, a lawsuit is filed with the court against the other party and the other party has a certain amount of time to respond to the lawsuit. This time period is where most of the settlement negotiations take place as the other party will realize that you mean business and will attempt to avoid large legal fees or a judgement against them. If there is no settlement during this time, the case continues down the normal process of litigation.

In conclusion, your image and the images that you create are important to you for one way another. Whether it be because of your reputation or because it is how you earn your livelihood. Regardless, it is important to keep watch for infringing activities. While there is no single way to completely monitor the internet for the unauthorized use of your image, keeping a vigil eye and knowing your options is certainly a step in the right direction.

 

5 Things You Need to Know About TRADEMARKS

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Trademark

 

 

Trademarks are everywhere around you, in fact by just looking around you right now, you are bound to see at least a couple of recognizable brands. To give you a better understanding of trademark law, here is a short list of five things you need to know about trademarks.

 

 

  1.      You may already have one

The “trademark” that comes to mind when most people think about trademarks are the brands with the “®” symbol and the brands that usually have federal trademark protection. But just because you haven’t registered your brand or mark doesn’t mean you don’t have trademark protection.

The ® that you see comes from trademarks that are federally protected and are registered with the United States Patent and Trademark Office. But without registering, you may still have trademark protection! If your trademark is not registered, the trademark that you may have is called a “common law trademark.” Instead of having your brand protected across the whole country, it is only protected in the particular area that it is being used in. For instance, selling your brand of chocolate bars in California may give you common law trademark protection in the state of California. If someone sells a chocolate bar with the same name in a different state, there is likely no trademark infringement. Whether you have a common law trademark will depend on the area you are using your brand in.

  1.      There’s more to Trademark than meets the eye

Federal trademark protection comes from a law called the Lanham Act. The Lanham Act does not just provide protection to your trademarks but also to service marks, trade dress, and to websites. Recently, trademark disputes involving websites have become a larger focus in the area of law.

The Lanham Act has entire sections dedicated to online protections against infringing activities such as cybersquatting. The law against cybersquatting is meant to prevent someone from using your trademarked domain name without your permission. Other harmful acts that the Lanham Act seeks to prevent are activities that tarnish or dilute a trademark. Whether an activity has resulted in the tarnishment or dilution of a trademark depends upon many factors dealing with the activity as well as the mark or brand itself.

Trademark

  1.   You can trademark smells…

And colors, sounds, shapes, slogans, and almost anything else that can be associated with a mark or brand. Trademark protection goes even further to protect things like trade dress and product packaging. Think about the setup of your local fast food restaurant or electronic store. If you go into different McDonalds or Radioshacks, you will probably notice that each store has a similar décor or atmosphere to the other stores. That goes to the “trade dress” of the particular brand. Thinking about the different smells of perfumes or the sound of the roar of the lion in the beginning of MGM films makes you realize why more than just a logo can be trademarked.

  1.      “Fair use” may not seem so fair

You may have heard of the words “fair use” in other contexts, in particular copyright law. Fair use can be a defense to trademark infringement. However, the fair use defense in trademark law is more restrictive than fair use is in other areas of law. There are 2 versions of fair use that are commonly used in defending against a trademark infringement lawsuit.

The first is set out in the actual law itself and is sometimes called “Statutory Fair Use.” This gives a defense to trademark infringement where the brand describes something, or is “descriptive.” If you were to use the words “beach boys” to describe boys on the beach, then statutory fair use would act as a defense to the trademark infringement.

The second is referred to as nominative fair use. Nominative fair use comes from using a trademark because there’s no other way to mention it. For example, if you were to mention Tide detergent in a newspaper article while you were referring to Tide detergent. That would be nominative fair use since there is no other way to mention Tide. Whether an activity counts as “fair use” under either of these defenses depends on the activity itself.

  1.     You need to stop it, before it stops you

Trademark infringement is a serious matter and can cause a great amount of damage to a company, its’ brand, and image. Just think about what would happen if everyone was able to sell “Coca Cola” flavored soda. People who bought Coca Cola would never know what to expect and that is precisely one of the goals that trademark law is trying to achieve, to prevent consumer confusion. So be smart about your brand or product. Think about whether you need to register it and also be sure to keep an eye out for unauthorized uses of your brand.

Welcome!

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Welcome to the Biletsky Law blog! Be sure to bookmark this page or check back regularly for articles about emerging trends and topics in the entertainment industry, intellectual property area of law, and business law.