A Look Ahead at the Evolution and Fragmentation of Creative Copyrights

Loeb & Loeb’s veteran Entertainment and Intellectual Property litigator, Barry Slotnick takes a look ahead at the rapidly changing creative copyrights universe. Earlier it was a simpler universe for creative works, with an artistic creator and a distributor who managed the business-related aspects. Then slowly, as newer platforms emerged—television, streaming, podcasts and social media—multiple people started getting involved in exploiting creative works, leading to a more complex division of rights and also more people sharing the profits. Lately, it’s gone a step further, with authors selling smaller shares of their work and fragmenting the ownership of copyrights, leveraging emerging platforms through blockchain technology and NFTs. The whole game has changed, shifting the conversation about copyright ownership and bringing a new set of investors into the entertainment business, where works of art can be seen as tradeable commodities. The world of creativity and entertainment has become much more complex, and there are several unintended consequences lawyers need to assess.

Barry is a nationally recognized intellectual property litigator who represents high-profile clients in the music and entertainment industries, as well as major brands across the advertising, licensing and merchandising sectors. Barry has litigated scores of copyright infringement cases in courts throughout the United States, as well as numerous disputes addressing the respective rights of copyright and trademark owners and users, including rights of privacy and publicity.

Tell us about your practice and what sorts of IP and Entertainment matters you generally deal with in your practice.

My practice is a mix of a number of things, but for the most part it is an entertainment, intellectual property and litigation practice, encompassing IP and licensing in all the areas of entertainment, including music, books, films, theater, television, fine arts and much more. Over the past few years, I’ve worked extensively with transactional entertainment and corporate lawyers in acquiring and selling entertainment properties, whether they’re copyrights in television series and motion pictures, or books and music publishing. I focus on due diligence to ensure our clients are buying and selling assets that are worthy of the proposed transaction. This is an interesting bent for a litigator because much of this time is spent on litigation avoidance. Nobody likes to be sued and a lawsuit is an expensive affair, even for plaintiffs. So it makes sense to resolve issues and avoid spending large sums on litigation, whenever possible. I spend a great deal of my time trying to anticipate problems and solve them before they become bigger problems. Clients immensely appreciate that.

My clientele is a mix of entertainment companies and artists. It is very rewarding to see unknown artists and startup companies succeed, and to watch careers progress, and to know that, in a small way, I helped bring entertainment to millions of people. That’s why I do what I do.

Can you elaborate on the shifting copyrights landscape in entertainment. What are some of the trends you’re witnessing in this space?

What we have seen over the course of the past few years is that the way copyrights are used has been reinvented and reimagined. The most obvious trend is that IP is now primarily consumed through streaming. Whether it is music, film or television, streaming has overtaken the more traditional ways we experience entertainment.  As a consequence, there are more streaming services offering a greater amount of content. This, in turn, has led to uses of IP that did not exist before or that existed only in very limited circumstances, such as music in gaming or in the context of fitness and exercise or the reinvention of sheet music. We have gone from a physical world to a digital world to a virtual world.  As creative works have been repurposed and reimagined, the laws that apply have to be reconsidered as well.  This creates gray areas and messy disputes.  That is when the litigators get to be on center stage.

The boundaries of our compact world of entertainment law have expanded. Our entertainment lawyers and litigators are interacting more and more with banking lawyers and corporate lawyers and dealing with international treaties. One of the byproducts of the rapid growth of IP on many platforms like networks, channels and carriers, as well as other non-traditional social media outlets, is that the dollar amounts are bigger and more people are involved in the work of creative rights and licensing. Whether clients are corporations or creators, this expansion raises questions about how to acquire rights, how to restrict rights, and how to slice and dice the creative product.

How are these emerging trends impacting businesses and the commercial side of the entertainment business?

The key shift is that conversations, and the participants in these conversations, are changing. What we have seen on the business side is an expansion of the number of people actually doing business in this space. Back in the day, music publishers essentially dealt with other music publishers if they wanted to sell their catalog, a copyright or a business, but they are now as likely to be talking to investment bankers or hedge fund managers. Those who are not typically in the music publishing business might acquire a right in music publishing and provide financial support for some of the larger deals. 

Not only is the universe of music publishing becoming more expansive, but it’s becoming more expensive too. In the past three to four years, publishing catalogs have been sold for enormous sums and there has been a previously unseen infusion of cash into the business. But this expansion of players beyond the usual realm of music publishers, record companies and talent is necessitating more prep work with the clients, especially when we advise financial institutions and other outside parties. The newer participants need to be made aware of what it is they are buying, the pros and cons and peculiarities of the industry, and the laws in the United States and around the world. 

There is more activity in the marketplace, and that always leads to a greater likelihood of litigation. There is also more incentive to litigate because of the huge amounts of money involved in the buying and selling of creative rights and the huge successes witnessed on different platforms available now. The development of new technologies and new platforms to distribute works to the public creates potential gray areas. One side tries to shoehorn new means of distribution and exploitation into old models, and the other side claims that a new model requires a new grant of rights and additional payment. This tension is messy and always contentious.

How are the artists and their legal counsel gearing up to navigate this new universe of fragmented copyrights?

More money in the business means more art can be created and more talent can be subsidized, but we have to take a fresh look at protecting the rights of our artist clients. Lawyers have to be extremely mindful of what rights they are granting and to whom and whether those seeking rights have the creative and financial wherewithal to see a project through to its completion. We have seen an increase in the number of people who want to start a project (say a film), but as lawyers representing creators, we have to assess whether they indeed possess the ability to create a first-class product in keeping with the level of the original creation.

As newer players—and institutions typically not considered to be players—are getting in on entertainment transactions, our clients are constantly solicited with innovative deals, and sometimes these players and platforms have a different endgame from that of the artists. We have to frequently ask our clients about their personal and financial motivations for selling their works, what that sale would mean with respect to who controls the future use of their creative works, and what responsibilities the original owner might have to the new owners.

My practice and Loeb at large represent both hugely successful artists and emerging artists just starting their career. It is a great feeling helping clients move their career along and putting them on these innovative and successful platforms.

What makes Loeb & Loeb a leader in this space? 

One of the joys of practicing at Loeb & Loeb is that there is experience across the board and we can tap into our multidisciplinary teams as needed to provide the best possible client counsel. Litigators can focus on litigation and do what they do best because there is a deep pool of lawyers throughout the firm to support them when a related banking, NFT or industry transaction question emerges. Our experience in this space runs deep and is unparalleled. This is a unique advantage we offer our clients.