How E-Discovery Can Make or Break Your Case in Court

From May It Please the Court:

Let’s say you own a radio station in Florida, and let’s call it WTKE, for example. Back in 2003, you sign an agreement to sell your radio station to a company we’ll call Quantum Communications. As part of that agreement, you promise not to continue to shop your radio station for sale. You agree to sell your radio station to Quantum for $3,000,000.

It takes awhile for the sale to go through, but while it is in process, Quantum gets wind that you may be trying to sell your radio station to someone else, let’s say a company called Cumulus Media, so they sue you. Quantum also alleges that you’re doing everything possible to stymie the sale of your radio station. You deny everything.

Once the lawsuit starts, Quantum’s lawyers request copies of your computer’s hard drive, and all the emails that are on it. They apparently get nowhere. Undeterred, Quantum’s lawyers subpoena the hard drive of the president of Cumulus, which contain a series of emails between you and Cumulus’s president.

On that hard drive, Quantum finds a series of email that appear to show you were trying to sell your radio station to Cumulus for $3,750,000.

Oops.

Quantum gets this E-discovery evidence in front of the judge, who orders you to sell your radio station to Quantum for the originally agreed-upon purchase price of $3M, and issues a scathing ruling about your denial of violating the agreement and misleading the court.

Guess who’s going to get to pay Quantum’s attorneys fees?

Breakdown of the Apple iTunes Software License Agreement

The license below applies to the iTunes 7.0 release in September 2006. But with iTunes, the real issue may not lie with the EULA as much as with DRM and the suspiciously high number of fixes and “upgrades.” (iTunes 1.0 = 2001. iTunes 7.0 – 2006).

Bigtime thanks to Jesse for taking the time to breakdown the scrapple from the Apple.

Jesse’s interpretations/comments [are after the official agreement words, which are in bold].

And now, to the license: “APPLE COMPUTER, INC. / SOFTWARE LICENSE AGREEMENT FOR iTUNES” revision: “EA0367 / Rev 9/7/06″

———

THE IMPLIED WARRANTIES AND/OR CONDITIONS OF MERCHANTABILITY, OF SATISFACTORY QUALITY, OF FITNESS FOR A PARTICULAR PURPOSE, OF ACCURACY, OF QUIET ENJOYMENT, AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS.

*** Quiet enjoyment? Is that a typical tort (thing you can sue someone for)? Or has Apple been sued for not providing “quiet enjoyment” in the past? Might be interesting to research.

In no event shall Apple’s total liability to you for all damages (other than as may be required by applicable law in cases involving personalinjury) exceed the amount of fifty dollars ($50.00).

*** Remember, this is for a computer that costs around $2,000.00 bucks, and an OS whose big upgrades are in around $100 bucks a pop. If it does something horrible, Apple will pay how much? Fifty bucks.

You may not use or otherwise export or reexport the Apple Software except as authorized by United States law and the laws of the jurisdiction in which the Apple Software was obtained.

*** Even if you bought the software outside the US, from someone who legally exported it from the US, you are still bound by US law. Isn’t this called imperialism, or is that too 20th-century?

You also agree that you will not use these products for any purposes prohibited by United States law, including, without limitation, the development, design, manufacture or production of nuclear, missiles, or chemical or biological weapons.

*** You know, I don’t want to even think about how Apple’s lawyers imagine iTunes can be used to produce biological weapons, but I suppose they have to be careful…

The software from Gracenote (the “Gracenote CDDB Client”) enables this application to do online disc identification and obtain music-related information, including name, artist, track, and title information (”Gracenote Data”)

*** Watch the use of the term “Gracenote Data” very carefully below.

Remember, most of this “Data” is 1) Originally created by the artists themselves – i.e. track names, album names, band names, etc. 2) Was contributed to Gracenote’s database by ordinary users, under the mistaken impression that they were collaborating on something which would remain theirs, collectively, in perpetuity. from online servers (”Gracenote CDDB Servers”) and to perform other functions. You may use Gracenote Data only by means of the intended End User functions of this application software.

*** Hm – what non-”End User functions” is iTunes capable of?

You agree that you will use Gracenote Data, the Gracenote CDDB Client, and Gracenote CDDB Servers for your own personal non-commercial use only. You agree not to assign, copy, transfer or transmit the Gracenote CDDB Client or any Gracenote Data to any third party.

*** Here’s that “Gracenote Data” again – remember – this is data *they did not create* – they are merely trying to claim control of that which was freely given to them with the expectation that they would maintain it as a collection.

YOU AGREE NOT TO USE OR EXPLOIT GRACENOTE DATA, THE GRACENOTE CDDB CLIENT, OR GRACENOTE CDDB SERVERS, EXCEPT AS EXPRESSLY PERMITTED HEREIN.

You agree that your non-exclusive license to use the Gracenote Data, the Gracenote CDDB Client, and Gracenote CDDB Servers will terminate if you violate these restrictions. If your license terminates, you agree to cease any and all use of the Gracenote Data, the Gracenote CDDB Client, and Gracenote CDDB Servers.

*** “Gracenote Data” – i.e. track names; so, if you email someone the name of a CD you own, which you imported into iTunes, you are “transmit”ing that CD name, which Gracenote claims is their “Gracenote Data”, and so your license to use that “Gracenote Data” would “terminate”, meaning that you would have to remove all the album, artist and track names from all your CDs in iTunes. Does this seem fair to you? Did you think you were agreeing to this?

Use of the Kerbango Tuning Service to sell a product or service, or to increase traffic to your Web site for commercial reasons, such as advertising sales is expressly forbidden.

*** Er, I’m not entirely sure what this service *is* exactly, but how you use iTunes to “increase traffic to your Web site” I don’t know.

You may not take the results from a Kerbango search and reformat and display them,

*** Hm; so does this mean that it violates this license for you to see two web pages in Kerbango, then go to them in tabs in Firefox? You are displaying both of the sites, and their format (in the Firefox tab bar) is different than in the Kerbango results; would this violate the license? Did you think you were agreeing to this?

or mirror the 3Com’s Kerbango home page or results pages on your Web site, or send automated queries to Kerbango’s system without express permission from 3Com.

Without limiting the foregoing, under no circumstances shall 3Com be held liable for any delay or failure in performance resulting directly or indirectly from acts of nature, forces, or causes beyond its reasonable control, including, without limitation, Internet failures, computer equipment failures, telecommunication equipment failures, other equipment failures, electrical power failures, strikes, labor disputes, riots, insurrections, civil disturbances, shortages of labor or materials, fires, floods, storms, explosions, acts of God, war, governmental actions, orders of domestic or foreign courts or tribunals, non-performance of third parties, or loss of or fluctuations in heat, light, or air conditioning.

*** I love the last item. 3Com is not liable for “fluctuations in air conditioning”. Good to know. And why this is in a license for Apple’s iTunes – who knows….

[thanks to jelene and smallprintproject via cc]

Charlie’s Angels and the Contract Dispute

From May It Please The Court:

Out here in La-La land, we occasionally get not your average contract cases.  Take, for example, a recent one involving Robert Wagner, Natalie Wood, Spelling-Goldberg Productions and Columbia Pictures, Inc., along with the Writer’s Guild of America and two writers, Ivan Goff and Ben Roberts, as well as everyone’s lawyers.  It certainly makes for interesting reading compared with some of the more mundane contract cases.  It’s just hard to apply them in real life since most of us aren’t involved with the entertainment industry.

But for those that are, this case is a wonderful primer.  The ruling sets the record straight whether writers, actors, producers or studios own movie rights unless the parties otherwise deal with those rights by contract.  Here’s the short version:  The writers do, thanks to the “Separated Rights” under the the 1970 Writers Guild of America Minimum Basic Agreement. 

How the court gets there involves a lot of twists and turns.  It starts out with an agreement between Wagner and Spelling-Goldberg Productions, which provided that Wagner was to receive 50% of the profits “for the right to exhibit photoplays of the [Charlie's Angels] series and from the exploitation of all ancillary, music and subsidiary rights in connection therewith.”  The other 50% belonged to the producers, Spelling-Goldberg Productions.

Fine, you say, then it looks like Wagner should share in the profits from the movies.  Not so fast.  You overlooked what was being divided up 50/50. 

That’s where the Writers Guild Minimum Basic Agreement comes in.  Under that agreement, when a producer asks a writer to draft a script for a pilot television show, the writer retains the motion picture rights to the series.  There’s one caveat.  The agreement between the writer and the producer can change the terms of the MBA, but in this case, the agreement between Goff/Roberts and Spelling-Goldberg didn’t.  Otherwise, under the MBA, the producer has the right of first refusal if the writer tries to sell those rights for five years, but after that, the motion picture rights can be sold on the open market to any studio or producer who’s willing to pay the writers for them.

In other words, the contract between the actors (Wagner and Woods) and the producers (Spelling-Goldberg) couldn’t divide up the motion picture rights because they still belonged to the writers (Goff/Roberts). 

Just to fill in one of the blanks necessary to understand what comes next, you may remember that back in 1982, Spelling-Goldberg sold its production company and everything it owned to Columbia Pictures.  There’s several more blanks in the court’s opinion worth your time, but for this short post, that fact will get you by. 

Later then, when Columbia Pictures decided to make the Charlie’s Angels television series into movies, they went and bought the movie rights from the writers.  When Wagner and Woods sued Columbia for a split of the profits from the movies based on their agreement with Spelling-Goldberg Productions, the court reasoned that the movies rights weren’t part of the 50/50 split and denied Wagner and Woods any recovery from Columbia. 

It all sounds easy now, but the court noted that it took subsequent briefing and two oral arguments by the attorneys to get it right.  Even then, Footnote number 1 cryptically states, “If we have erred in our resolution of the issues it was not for counsels’ lack of effort to set us straight.”   That caveat points to what most certainly will be an appeal of this case.  We may not have heard the last of who owns the rights to the Charlie’s Angels movies.

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