Category Archives: Legal File

FCC Releases Tutorial on FM Translator Auction Window for AM Stations

David Oxenford - ColorBy: David Oxenford, Wilkinson Barker Knauer, LLP
www.broadcastlawblog.com

On July 13, The FCC released an online tutorial for the upcoming windows for filing for FM translators for AM stations. The first window will run from July 26 until 6 pm E.T. on August 2, where Class C and D AM stations that did not receive a translator in last year’s 250-mile waiver windows can file for a new FM translator to rebroadcast their AM station. We wrote about that window here.

The online tutorial may be accessed here.

The tutorial references various FCC filing guides to assist applicants in filing their applications. The Public Notice announcing the Tutorial also makes clear that, if an applicant has a pending application to acquire an AM station during the window, the proposed assignee can file the application for the new translator, presumably to be granted upon the acquisition of the station (as these translators are tied to the AM on a permanent basis). The current owner of the station and the proposed buyer cannot both file – only one application per station will be permitted. AM stations planning to take advantage of this window should be well into the process of preparing their applications for the window that opens in less than 2 weeks.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline.  Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your membership.

Annual EEO Public File Report Deadline for Stations in Michigan

June 1, 2017 is the deadline for broadcast stations licensed to communities in Arizona, the District of Columbia, Idaho, Maryland, Michigan, Nevada, New Mexico, Ohio, Utah, Virginia, West Virginia, and Wyoming to place their Annual EEO Public File Report in their public inspection file and post the report on their station website.

In addition, a certain group of these stations, as detailed below, must electronically file their EEO Mid-term Report on FCC Form 397 by June 1, 2017.

For more information, please read the advisory from Pillsbury Winthrop Shaw Pittman LLP here. (PDF download via MAB)

5 Questions on the Meaning of the FCC’s Recent Ruling on Online Recruiting – How Does it Change a Broadcaster’s EEO Obligations?

David Oxenford - Color
David Oxenford

By: David Oxenford, Wilkinson Barker Knauer, LLP
www.broadcastlawblog.com

The FCC recently issued a declaratory ruling (which we summarized here) addressing the requirement that broadcasters widely disseminate information about all of their job openings in such a way as to reach all of the groups within their communities. The recent FCC decision stated that a broadcaster can now rely solely on online sources to meet the wide dissemination obligation. In the past, the sole reliance on online sources would have brought a fine from the FCC, so this is a big change for broadcasters – one which recognizes the realities in the world today as to where people actually go to find information about job openings.

This decision does not end all other EEO obligations imposed by the FCC rules. The Indiana Broadcasters Association recently asked me 5 questions about that new decision to highlight some of the other obligations that still arise under the FCC’s EEO rules. Here is that discussion of the continuing obligations under the EEO rules:

1. The FCC recently issued a Declaratory Ruling about how Job Openings should be posted. What’s changing?

The FCC is now permitting broadcasters (and cable companies) to meet their obligation to widely disseminate information about their job openings solely through the use of online recruitment sources. In the past, broadcasters were fined if they did not, in addition to online sources, use recruitment sources such as community groups, employment agencies, educational institutions and newspapers to solicit candidates for virtually all open positions at any station. Under the FCC’s new ruling, a broadcaster can use online recruitment sources as their sole means of meeting their obligation to widely disseminate information about job openings, as long as the broadcaster reasonably believes that the online source or sources that it uses are sufficient to reach members of the diverse groups represented in its community.

2. Are there still Equal Employment Opportunity requirements in place from the FCC?

This ruling does not abolish all EEO requirements. In addition to a general obligation to not discriminate in hiring and other employment practices, the FCC rules set out a three-prong EEO outreach program for broadcasters. The ruling addresses only the first prong – the obligation to widely disseminate information about virtually all job openings at a station. The other two prongs of the EEO program are undisturbed by the FCC’s recent ruling.

The second prong of the FCC’s EEO rules requires that broadcasters notify a community group about job openings at the station if the community group specifically asks to be notified of such openings. Stations need to continue to provide such notifications and to publicize the fact that community groups can ask to be included on the list of groups getting notifications.

The third prong of the EEO program for broadcasters is the obligation to do “non-vacancy specific outreach” – the menu options of efforts stations need to undertake to educate their community about the jobs available at broadcast stations and the training necessary to fill those jobs, as well as the training of employees and others to assume new responsibilities at broadcast stations. These menu options include activities such as internship and mentorship programs, speaking before community groups about job openings, providing scholarships to those interested in broadcasting, working with educational institutions to educate their students about broadcast jobs, training programs to prepare existing employees to assume new responsibilities and similar programs.

Broadcasters also need to continue to self-assess their program. If the sources that they are using for recruiting do not bring employment candidates from diverse sources, they need to consider changing the mix of recruitment tools that they are using. This obligation to review the success of their EEO outreach is not changed by the recent ruling.

3. Should a station still participate in State Association-sponsored Career Fairs, as a way to bolster EEO outreach?

Yes. As set forth in response to the last question, stations still need to do non-vacancy specific outreach efforts to inform members of their communities about broadcast jobs. One of the menu options available to meet that obligation is the attendance at job fairs by management-level employees who are involved in the hiring process. If station employees attend 4 job fairs in a two year period, they get one credit toward meeting their obligations (smaller stations need 2 credits in each two-year period measured from their license renewal filing date to meet their non-vacancy specific outreach requirements, larger stations in larger markets need 4 credits in a two-year period).

4. Any practices that can be curtailed because of the new ruling?

The new ruling allows a broadcaster to meet its wide dissemination obligation for all of its job openings if they use a single online recruiting source to publicize each opening, if the broadcaster reasonably believes that the online source that it is using will reach members of all groups within its community with information about its openings. That means that the broadcaster need no longer publish ads about job openings in the local newspaper and need no longer reach out to community groups to publicize job openings (except for those community groups that specifically asked to be notified about openings under “Prong 2” of the FCC’s EEO outreach obligations). However, the FCC suggested that it would be a good thing if broadcasters continued to reach out to community groups with information about job openings and to broadcast information about those openings on their own stations – but those outreach efforts are no longer mandatory.

5. Do you see any additional EEO-related changes on the horizon?

The FCC is about to commence a wide-ranging review of all of its rules applicable to broadcast stations looking to determine which ones are no longer necessary. Some have suggested that the remaining FCC EEO outreach obligations are no longer necessary. The FCC, under its statutory obligation to assess the character of all broadcast applicants and licensees, can always act against a station owner if the EEOC or state employment agencies find that the station has actually discriminated in its hiring or other employment practices.

Whether the FCC in fact goes further to deregulate EEO remains to be seen, but several commentators have suggested that the FCC divest itself of responsibilities where there is another government agency with more expertise. Thus, some think that, as there is an EEOC to deal with employment matters and other government agencies who deal with labor and other occupational issues, the FCC ought to reduce its duplicative efforts in this area.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline.  Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your membership.

FCC Finds Online Sources Satisfy EEO Requirements for Wide Dissemination of Job Openings by Broadcasters and MVPDs

David Oxenford - Color
David Oxenford

By: David Oxenford, Wilkinson Barker Knauer, LLP
www.broadcastlawblog.com

The FCC on Friday (4/21) released a declaratory ruling making it significantly easier for broadcasters and MVPDs to meet their EEO obligations imposed by FCC rules. These rules for broadcasters and MVPDs (cable and satellite TV providers) require that these businesses, when filling job openings, widely disseminate information about the openings in a manner that is expected to reach members of all community groups in the area from which employees are likely to be found. In the past, under the rules adopted in 2002, the Commission has not allowed recruitment to be conducted solely through online sources. Instead, the 2002 order suggested that the daily newspaper would, in many communities, be an outlet that would reach the diverse groups within a community – though most broadcasters supplemented newspaper publication with notifications to numerous schools, community organizations, educational institutions and others who might possibly refer employee candidates. Stations that relied solely on online sources faced substantial fines from the FCC (see the cases we summarized here and here).

The decision on Friday recognized that we are in a different world than when these rules were adopted almost 15 years ago. Now, most recruiting is done online. Thus, in response to a petition I filed on behalf of clients (summarized here), the FCC determined that a broadcaster or MVPD can rely solely on online sources in its recruiting. It no longer needs to use the newspaper, reach out to community groups or even use its own airwaves to give notice of job openings to satisfy the wide dissemination obligation. The FCC encouraged stations to continue to use some of these outreach methods, but it is no longer required. The broadcaster or MVPD needs to be reasonable in picking online sources that are likely to reach the members of various groups within its community – though the decision as to exactly which online employment sources to use will be left to the good-faith discretion of the broadcaster or MVPD. The Commission went so far as to say that, depending on the circumstances, a single online source could reasonably be found to be sufficient.

Note that this ruling does not change any other EEO requirement. Even though broadcasters no longer need to reach out to community groups to meet the requirement of wide dissemination of job openings, a separate “prong” of the FCC’s EEO policy still requires that broadcasters notify community groups of job openings when a group specifically asks to be notified of such openings. So all outreach to community groups is not over. Also, this ruling does not disturb the requirement that broadcasters engage in efforts to educate the public about broadcast employment opportunities and how to find those opportunities and to train for them. This requirement for non-vacancy specific outreach requires that a broadcaster conduct a certain number of menu options every two years – things like attending job fairs, participating in internship or scholarship programs and having employees speak at educational institutions or before community groups about broadcast employment.

Nor does the ruling lessen the paperwork requirements of completing an annual EEO public file report and otherwise retaining information about a station’s hiring practices. Random EEO audits will also continue (see our post here about the last EEO audit notice). For more about the FCC’s EEO rules, see our posts here and here. Even though some EEO obligations must continue to be observed by broadcasters, this is one step supported both by broadcasters and members of the minority community to bring FCC-required recruiting practices into the modern day.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline.  Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your membership.

Plan Your April Fools’ Day On-Air Pranks with the FCC in Mind

David Oxenford - ColorBy: David Oxenford, Wilkinson Barker Knauer, LLP
www.broadcastlawblog.com

With April Fools’ Day only a few days away, we need to play our role as attorneys and ruin the fun by repeating our annual reminder that broadcasters need to be careful with any on-air pranks, jokes or other bits prepared especially for the day. While a little fun is OK, remember that the FCC does have a rule against on-air hoaxes. While issues under this rule can arise at any time, broadcaster’s temptation to go over the line is probably highest on April 1. The FCC’s rule against broadcast hoaxes, Section 73.1217, prevents stations from running any information about a “crime or catastrophe” on the air, if the broadcaster (1) knows the information to be false, (2) it is reasonably foreseeable that the broadcast of the material will cause substantial public harm and (3) public harm is in fact caused. Public harm is defined as “direct and actual damage to property or to the health or safety of the general public, or diversion of law enforcement or other public health and safety authorities from their duties.” Air a program that fits within this definition and causes a public harm, and expect to be fined by the FCC.

This rule was adopted in the early 1990s after several incidents that were well-publicized in the broadcast industry, including one case where the on-air personalities at a station falsely claimed that they had been taken hostage, and another case where a station broadcast bulletins reporting that a local trash dump had exploded like a volcano and was spewing burning trash. In both cases, first responders were notified about the non-existent emergencies, actually responded to the notices that listeners called in, and were prevented from responding to real emergencies. In light of this sort of incident, the FCC adopted its prohibition against broadcast hoaxes. But, as we’ve reminded broadcasters before, the FCC hoax rule is not the only reason to be wary on April 1.

Beyond potential FCC liability, any station activity that could present the risk of bodily harm to a participant also raises the potential for civil liability. In cases where people are injured because first responders had been responding to the hoaxes instead of to real emergencies, stations could have faced potential liability. If some April Fools’ stunt by a station goes wrong, and someone is injured either because police, fire or paramedics are tied up responding to a false alarm, or if someone is hurt rushing to or from the scene of the non-existent calamity that was reported on a radio station, the victim will be looking for a deep pocket to sue – and broadcasters may become the target. Even a case that doesn’t result in liability can be expensive to defend and subject the station to unwanted negative publicity. So, have fun, but be careful how you do it.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline.  Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your membership.

Oxenford: Radio Ownership Subcaps on the Table for FCC Review

David Oxenford - ColorBy: David Oxenford, Wilkinson Barker Knauer, LLP
www.broadcastlawblog.com

We’ve written (see, e.g. our articles here, here and here) about the pending petitions asking the FCC to reconsider decisions reached last year to end the UHF discount, to leave the TV local ownership rules in place and to make attributable new TV Joint Sales Agreements, and to not adopt any change in the FCC radio ownership rules in “embedded markets.” Recently, that list of items on the table before the FCC has expanded, with a number of radio groups making a concerted push to change the FCC rules on ownership “subcaps” – limiting the number of AM or FM stations that can be owned in a single market. Thus, while a broadcaster can own up to 8 radio stations in the largest markets, no more than 5 can be either AM or FM. In the smallest markets, broadcasters can own up to 3 as long as they do not exceed half the stations in a market, but only 2 can be of the same service. The new petitions seek to eliminate those subcaps, allowing owners to own up to the maximum number of stations in a market without regard to whether those stations are AMs or FMs.

A group of radio broadcasters have filed a letter with the FCC asking that these subcaps be abolished, citing the change in the media landscape in the 20 years since the rules were adopted. A more detailed economic study was submitted by a Syracuse radio broadcaster, here, showing that the growth in digital and mobile advertising to local companies already exceeds the share of advertising enjoyed by radio generally, and is likely to grow in the coming years. Google alone, according to this analysis, has as much local advertising in Syracuse as the entire radio industry. To compete against these growing new media entities that are eating into local advertising dollars, the radio broadcasters have asked that they be allowed to own more radio stations in a single service – AM or FM – than currently allowed.

As the FCC has told the Court of Appeals (where some parties filed an appeal of last September’s ownership decision) that they plan to review the entire ownership decision, not just those areas singled out by petitions for reconsideration, the radio ownership issue is now before the FCC. There has been some limited grumbling against these new proposals, some observers suggesting that AM radio would be further imperiled if big broadcasters gave up their AM holdings to pursue the ownership of more FM stations. Of course, if that were to happen, there would be nothing stopping ethnic programmers and others who are making more and more uses of the AM spectrum to acquire more AM stations, perhaps at lower prices, to pursue their innovative programming. This is an issue that will be debated in the coming months, as broadcasters adjust to the reality that all of the old rules are now subject to reexamination by this new FCC.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline.  Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your membership.

It’s Madness! Be Wary of Using the NCAA’s Trademarks

Mitchell Stabbe
Mitchell Stabbe

By: Mitchell Stabbe, Wilkinson Barker Knauer, LLP via the Broadcast Law Blog

Less than a week ago, the National Collegiate Athletic Association filed a trademark infringement action in federal court against a company that runs an online sports-themed promotions and contests under the marks “April Madness” and “Final 3.” The NCAA is seeking injunctive relief, damages, the defendant’s profits, punitive damages and an award of attorneys’ fees.

Last year, I wrote about the risks of publishing ads or engaging in promotional activities that “play off” the NCAA Collegiate Basketball Playoffs. Clearly, such activities continue to carry great risks. Accordingly, I am republishing last year’s post on this subject:

It’s March Madness! Know the NCAA’s Rulebook or Risk A Foul Call Against the Unauthorized Use of Its Trademarks

With the NCAA Basketball Tournament about to begin, broadcasters, publishers and other businesses need to be wary about potential claims arising from their use of terms and logos associated with the tournament, including March Madness,® The Big Dance,® Final Four® or Elite Eight,® each of which is a federally registered trademark.

The NCAA Aggressively Polices the Use of its Trademarks

It has been estimated that, last year, the NCAA earned $900 million in revenue associated with the NCAA Basketball tournament. Moreover, its returns from the tournament have historically grown each year. Most of this income comes from broadcast licensing fees. It also has a substantial amount of revenue from licensing March Madness® and its other marks for use by advertisers. As part of those licenses, the NCAA agrees to stop non-authorized parties from using any of the marks. Indeed, if the NCAA did not actively police the use of its marks by unauthorized companies, advertisers might not feel the need to get a license or, at least, to pay as much as they do for the license. Thus, the NCAA has a strong incentive to put on a full court press to prevent non-licensees from associating their goods and services with the NCAA tournament through unauthorized use of its trademarks.

Activities that May Result in a Whistle

The NCAA acknowledges that media entities can sell advertising that accompanies the entity’s coverage of the NCAA championships. Even so, as discussed in greater deal in my earlier discussion of the “Do’s and Don’ts” of Super Bowl-related promotions, unless authorized by the NCAA, any of the following activities may result in a cease and desist demand:

    • Accepting advertising that refers to the NCAA, the NCAA Basketball Tournament, March Madness, The Big Dance, Final Four, Elite Eight or any other NCAA trademark or logo (The NCAA has posted a list of its trademarks here.)
      • Example: An ad from a retailer that starts, “Come Get Your Big Screen TV in Time to Watch March Madness.”
    • Local programming that uses any NCAA trademark as part of its name.
      • Example: A locally produced program previewing the tournament called “The Big Dance: Pick a Winning Bracket.”
    • Selling the right to sponsor the overall coverage by a broadcaster, website or print publication of the tournament.
      • Example: During the sports segment of the local news, introducing the section of the report on tournament developments something such as “March Madness, brought to you by [name of advertiser].”
    • Sweepstakes or giveaways that include any NCAA trademark in its name.
      • Example: “The Final Four Giveaway.”
    • Sweepstakes or giveaways that offer tickets to a tournament game as a prize.
      • Example: the sweepstakes name may not be a problem, but including game tickets as a prize will raise an objection by the NCAA.
    • Events or parties that use any NCAA trademark to attract attendees.
      • Example: a radio station sponsors a happy hour where fans can watch a tournament game and prominently places any of the NCAA marks on signage.

There is one more common pitfall that is unique to the NCAA Basketball: tournament brackets used in office pools where participants predict the winners of each game in advance of the tournament. The NCAA’s view is that the unauthorized placement of advertising within an NCAA bracket or corporate sponsorship of a tournament bracket is misleading and constitutes an infringement of its intellectual property rights. Accordingly, it says that any advertising should be outside of the bracket space and should clearly indicate that the advertiser or its goods or services are not sponsored by, approved by or otherwise associated with the NCAA or its championship tournament.

Note that none of these restrictions prevents media companies from using any of the marks in providing customary news coverage of or commentary on the tournament. Just be sure that they are just used to identify the tournament and its stages, and don’t in any way imply that there is an association between the station itself or any sponsor who does not have the rights to claim such association and the NCAA.

A Surprising History of “March Madness”

The NCAA was not the first to use “March Madness” as a trademark in connection with basketball tournaments. In fact, beginning in the 1940’s, the Illinois High School Association (IHSA) used it in connection with the Illinois state high school basketball championship playoffs.

The NCAA also may not have been the first to license the use of “March Madness.” Beginning in the early 1990’s, the IHSA licensed it for use by other state high school basketball tournaments and by corporations.

Moreover, the NCAA did not originate the use of “March Madness” to promote its collegiate basketball tournament. Rather, a CBS broadcaster is credited with first using “March Madness” in 1982 to describe the tournament. As CBS was licensed by the NCAA to air the tournament, the NCAA apparently claims that as its date of first use.

Finally, the NCAA was not the first to register “March Madness” as a trademark. That honor went to a company called Intersport, Inc., which used the mark for sports programs it produced and registered the mark in 1989.

So, how did the NCAA get to claim ownership of the March Madness® trademark? The short answer is through litigation and negotiations over a period of many years. Although it has also been able to obtain federal registrations for Final Four® and Elite Eight,® it was late to the gate and was unable to snag “Sweet Sixteen” or “Sweet 16,” which are registered to the Kentucky High School Athletic Association (KHSAA). (The NCAA, however, has the KHSAA’s approval to register “NCAA Sweet Sixteen” and “NCAA Sweet 16.”)

The Final Score

Having invested so much in its trademarks, the NCAA takes policing its trademark rights very seriously. Even so, although the NCAA may send a cease-and-desist letter over the types of activities discussed above, some of its claims would not be a slam-dunk as there may be arguments to be made on both sides of these issues. If you plan to accept advertising incorporating an NCAA trademark or logo or plan to use an NCAA trademark or logo other than in the context of reporting on the tournament, you should consult with an experienced trademark attorney so you can make an informed decision about the level of risk that you may be taking on.

FCC Releases First EEO Audit for 2017

Over 200 radio and almost 80 TV stations named in the audit notice, including Michigan stations.

David Oxenford - ColorBy: David Oxenford, Wilkinson Barker Knauer, LLP
www.broadcastlawblog.com

In the swirl of news about the deregulatory efforts of the new FCC, one could almost forget that there are still many regulations in place that require significant amounts of paperwork retention by broadcasters. That point was hammered home last week,  when the FCC released its first EEO audit letter of 2017 for radio and TV broadcasters. The FCC’s public notice announcing the commencement of the audit includes the audit letter that was sent to all of the targeted stations. The list of over 200 radio stations subject to the audit is here. The list of almost 80 TV stations is here. Responses are due March 28, 2017. As employment information for all stations within a named station’s “employment unit” must be provided in response to the audit, the reach of this notice goes far beyond the 300 stations targeted in the audit notices. While the FCC is considering a proposal to allow online recruiting sources to suffice to meet a broadcaster’s wide dissemination requirements (as we wrote here), that proposal is still at an early stage and, as this audit notice evidences, the underlying rules remain in place.

The FCC reminds stations that were targeted by the audit to put a copy of the audit letter in their public file. The response, too, must go into the file. For all the TV stations hit by the audit letter, and those radio stations that have already converted to the online public file, that will mean that the audit letter and response go into that FCC-hosted online public file.

The Commission has pledged to randomly audit 5% of all broadcast stations and cable systems each year to assure their compliance with the Commission’s EEO rules – including the requirements for wide dissemination of information about job openings and non-vacancy specific supplemental efforts to educate a station’s community about job opportunities in the media industry. We recently summarized FCC EEO issues here, reminding broadcasters of the possibility of being audited. The FCC also has the opportunity to audit larger broadcasters’ EEO performance when they file their FCC EEO Mid-Term Report. We also wrote about the start of the obligations for the filing of FCC Form 397 EEO Mid-Term Reports – which started the year before last for radio groups with more than 11 full-time employees and last year for TV licensees with 5 or more full-time employees in a few months, and are filed on the 4th anniversary of the filing deadline for the station’s license renewal – which will give the FCC another chance to review station EEO performance.

The audit letter requires all stations with five or more full-time (30 or more hours per week) employees to provide a significant amount of information about their EEO programs and recruiting efforts (including copies of their two latest Annual EEO public file reports and documentation backing up the efforts listed on those reports). Even stations with fewer than five full-time employees need to report the job titles of their employees and the number of hours they are assigned to work each week, and provide any information about law suits, EEOC complaints or similar employment actions brought as a result of equal employment or discrimination matters. Information about any time brokerage agreement must also be disclosed.

If any station in your cluster is on the list, all stations in that “station employment unit” (a group of commonly owned stations serving the same area with at least one common employee) must respond. But, if a cluster has been audited in 2014 or 2015, or if its renewal was granted in the last 18 months, the FCC may allow you to avoid responding to this audit – but you have to request that “pass” from the FCC. If a station that is being audited is involved in an LMA with another broadcaster, the audit may require that the broker provide employment information as well as the licensee.

All stations should review the audit letter as it provides a good outline of the documents that stations should be retaining to demonstrate their compliance with the FCC’s EEO rules. For more information about compliance with the EEO rules, see our post about an EEO webinar in which I participated, held by the FCC in early 2012 to explain its EEO rules. Also, you can find a link to a presentation that I did just over a year ago on the EEO rules for broadcasters, here. You may also want to review the last set of fines for broadcast EEO violations, about which we wrote here.

Many broadcasters complain that the EEO rules are among the more burdensome paperwork requirements, and no doubt much time and money will be spent responding to this audit notice. But whether a broader review of the EEO requirements, beyond simply looking at the acknowledgement that online recruiting is how recruiting is now done, will be in the cards at the FCC remains to be seen.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline.  Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your membership.

Annual Super Bowl Advisory for Stations/Advertisers

Mitchell Stabbe
Mitchell Stabbe

By: Mitchell Stabbe, Wilkinson Barker Knauer, LLP via the Broadcast Law Blog

Last year, we posted some guidelines about engaging in or accepting advertising or promotions that directly or indirectly alludes to the Super Bowl without a license from the NFL. We are at that time of year again, so here is an updated version of our prior post.

In addition to the monies it receives annually for the right to broadcast the Super Bowl, the NFL receives more than $1 billion in income from licensing the use of the Super Bowl trademark and logo. Not surprisingly, they are extremely aggressive in protecting its golden goose from anything it views as unauthorized efforts to trade off the goodwill associated with the game. Accordingly, with the coin toss almost upon us, advertisers need to take special care before publishing ads or engaging in promotional activities that refer to the Super Bowl. Broadcasters and other news publishers have latitude to use the phrase “Super Bowl” in their news and other editorial content, but they need to be wary of engaging in activities, particularly in advertising and promotion, that the NFL may view as trademark or copyright infringement. (These risks also apply to the use of “Final Four” or “March Madness” in connection with the upcoming NCAA Basketball Tournament.)

Simply put, the NFL views any commercial activity that uses or refers to the Super Bowl to draw attention as a violation of its trademark rights. Many of the activities challenged by the league undoubtedly deserve a yellow flag. However, the NFL’s rule book defines trademark violations very broadly. If anyone were willing to throw the red flag to challenge the league’s position, a review from the booth might reverse some of those calls.

Advertising that Refers to the Super Bowl: Under trademark law, use of a third party’s trademark is considered to be permissible “nominative fair use” if the use does not suggest a relationship between the advertiser and the trademark owner and the trademarked goods or services cannot be readily identified without using the trademark. This is why broadcasters can talk about the game in their news and other topical programming, using the words “Super Bowl.” Nevertheless, the NFL objects to any unauthorized advertising that refers to the Super Bowl. For example, the use in advertising of taglines such as “Stock Up for the Super Bowl” for beer or snacks or “Get the Best View of the Super Bowl” for big-screen TVs has routinely led to the prompt issuance of cease-and-desist letters. The claim may be made directly against the advertiser, as well as against a broadcaster or other news organization that publishes the ad. As a result, many broadcasters will not accept advertising that specifically refers to the Super Bowl unless the advertiser first shows that it has NFL approval.

Other Marks: To overcome these problems, many advertisers now replace any reference to the “Super Bowl” with “The Big Game.” When advertisers widely began using this tactic, NFL Properties tried to register THE BIG GAME as a trademark with the United States Patent and Trademark Office. (The NFL also has federal trademark protection for “Super Sunday,” “Gameday” and “Back to Football,” and over a hundred other marks.) Over20 different parties threatened to oppose the application and the NFL voluntarily abandoned the application. We are not aware of any reported claims by the NFL against advertisers based upon the use of “The Big Game.”

Following are some examples of other activities that create a significant risk of an objection by the NFL:

“Super Bowl” Events or Parties: A bar or restaurant that has a public performance license to show television programs on their premises has the right to show the Super Bowl broadcast to its patrons, but if it uses the words “Super Bowl” in its advertising to attract customers, the league will object. Similarly, a company should not be listed as the sponsor of a “Super Bowl” event or party. And, under copyright law, a fee should not be charged to watch the game.

Famously, in 2007, the NFL sent a cease and desist letter to an Indiana church group that had used “Super Bowl” to describe a viewing party for the game and would charge $3.00 per person to cover the cost of snacks. The NFL, however, will not object to a church viewing party for the Super Bowl if it is held in the church’s usual place of worship and no fee is charged for attending. In addition, the League will likely not object to religious organizations that refer to their events as a Super Bowl party, provided that no NFL logos are used.

Sweepstakes or Giveaways (Naming or Prizes): Any sweepstakes or giveaway that incorporates “Super Bowl” in its name or as a prominent feature of its advertising should be avoided. Further, the NFL takes the position that game tickets cannot be offered as a prize or award. In most situations, the “first sale” doctrine provides that the buyer of goods may do whatever it wants with its purchase, including reselling it or giving it away. Faced with this argument some years ago, the NFL (as well as the other sports leagues) now includes language on the back of tickets, prohibiting their use as part of a sweepstakes, giveaway or other promotion. It can be argued that the purchaser of a ticket will not even see this language until after the purchase is completed and therefore the terms have not been agreed to and are not binding. Tickets to an event are legally considered a license to attend the event, rather than a good that is sold, and therefore can condition entry on any basis that does not violate public policy.

Names of Programs: Even if a broadcaster is not with the network that carries the Super Bowl (this year, CBS), it may want to produce a television program about the game. In years past, the NFL has repeatedly challenged local broadcasters that include the name of a team in a weekly program dedicated to discussions about the team. Thus, it would not be surprising if the NFL similarly objected to naming a pre-Super Bowl television program about the game if it incorporated “Super Bowl” in the title. (As discussed above, there is a strong argument that such naming constitutes permissible “nominative fair use.”)

Special Advertising: Newspapers and online news providers frequently have a special “section” that is devoted to coverage of the Super Bowl. The organization should be able to solicit advertising to accompany its stories, just as it does for any of its news reporting. It would be risky, however, to have an advertiser “sponsor” the coverage, particularly if “Super Bowl” is part of the name of the section.

Disclaimers: A disclaimer such as, “Not an Official Sponsor of the Super Bowl” or “This Advertisement (or Event) Has Not Been Licensed or Authorized by the NFL” will not ward off a cease-and-desist letter. Moreover, in the event of litigation, it is unlikely to provide a defense to a claim of infringement. And, even if ultimately did so, the defendant would still incur significant attorneys’ fees and other costs of litigation.

Risk Analysis: The policy underlying protection of trademarks is to protect consumers against consumer confusion. That said, is there a meaningful difference between, for example, an ad that invites consumers to “Stock up for the Super Bowl” as opposed to one that says, “Stock up for the Big Game!” Do they convey different messages? Is one more likely than the other to confuse consumers into believing that the product being advertised is sponsored by, endorsed by, or otherwise affiliated with the NFL? Probably not.

So, why is the NFL so aggressive? The answer almost certainly lies in the fact that official “sponsors” of the Super Bowl or other licensees of the NFL would not be willing to pay for the right to do so if a competitor could freely use the Super Bowl to promote itself without also paying a license fee. This risk is particularly high for those who have been promised exclusivity in a given category and the right to promote themselves as “The Official ——– of the Super Bowl.” Thus, looking at the big picture, the NFL has a huge incentive to prevent any advertising that may cross the line.

Moreover, any news organization that wants press credentials for the game faces an additional risk. Although news organizations are not required to have permission to report on an event, as a practical matter, their ability to do so from inside the stadium will be hampered by a refusal by the NFL to issue press credentials. (And, yes, we have seen professional sports leagues make such a threat.)

For these reasons, for most broadcasters and other news organizations, the better course is to be aware of and avoid any possible pitfalls, rather than run the risk of litigation.

Background on the GMR/RMLC Issues

David Oxenford - Color
David Oxenford

By: David Oxenford
Wilkinson Barker Knauer LLP
doxenford@wbklaw.com
www.broadcastlawblog.com

Commercial radio broadcasters have been seeing numerous communications over the last week about Global Music Rights (GMR) and its seemingly contentious music royalty negotiations with the Radio Music License Committee (RMLC). Many stations are confused about this controversy and what it is all about. The five questions below will hopefully shed some light on these issues. Stations need to carefully consider their options, and seek advice where necessary, to determine what they will do by January 31 with respect to the interim license that GMR has offered to stations. The questions below hopefully provide some background on these issues.

1. What is GMR and why isn’t the music they represent covered by the other organizations like BMI, ASCAP, and SESAC?

GMR is a new performing rights organization. Like ASCAP, BMI and SESAC, they represent songwriters and collect royalties from music users for the public performance of these songwriter’s compositions. They will collect not just from radio – they have already reached out to business music services that provide the music played in retail stores, restaurants and other businesses and no doubt have or will license other companies that make music available to the public. Most songwriters represented by GMR used to be represented by ASCAP or BMI, but these songwriters have withdrawn from ASCAP and BMI and joined GMR. For radio, these withdrawals became effective on January 1 of this year, when the old license agreements between ASCAP and BMI and the commercial radio industry expired.

2. What does a station need to do, in order to protect itself while negotiations are going on?

Because the penalties for playing a song without a license can be as much at $150,000 per play, stations either need to purge all GMR music from their stations or sign a license agreement with GMR. If you decide to purge their music from your stations, don’t forget about music that may appear in commercials or syndicated programming. Also remember that we are talking about the musical composition, not the recording of the song by any particular band or singer. Even the broadcast of a high school band playing a GMR song at half time of some football game, or the broadcast of a local middle school choral concert, could trigger the royalty obligation to GMR.

3. What does the “Interim License” through September mean?

The Radio Music License Committee (RMLC) is the group that represents most commercial radio broadcasters in music royalty negotiations with the various organizations that represent songwriters. They have been trying to reach a license agreement with GMR, but have not been able to reach one at rates that they consider to be an appropriate reflection of the airplay received by songs written by GMR songwriters. RMLC has actually sued GMR, arguing that GMR has violated the antitrust laws in the negotiation process, and asking that an arbitration process be set up to determine rates (and GMR has, seemingly in response, sued RMLC).

Since it was clear that no final agreement between RMLC and GMR could be reached by January 1, to avoid having stations that play GMR music being subject to lawsuits for copyright violations, GMR has offered an interim license that lasts for 9 months. Presumably, if in that time GMR and RMLC settle their disputes and arrive at a reasonable royalty rate, and that royalty rate is less than the interim rate, some credit for part of the sums paid under this interim rate could potentially be built into the new rates.

GMR has this week reached out to many station groups with specific proposals as to an interim rate. Commercial stations that did not receive information from GMR can reach out to them and ask for the rate information. GMR has given stations until January 31 to agree to that rate, sign the interim license agreement and pay the first month’s royalties. If a station does not choose to sign the interim deal and has not negotiated its own royalty agreement, and if it continues to play music written by GMR artists, then it is potentially subject to a copyright infringement lawsuit.

4. Is this going to lead to more people making demands for payment for songs broadcast on the radio?

If GMR is successful in collecting enough money to pay its songwriters more than writers receive from ASCAP and BMI, this could encourage other organizations to create similar licensing organizations. Some large publishing companies have already suggested that possibility, and there are certain other companies that specialize in maximizing royalties for songwriters that have the potential to do the same thing. However, starting a performing rights organization like ASCAP, BMI and SESAC is not easily accomplished as it requires setting up infrastructure for collection, reporting, distribution and enforcement activities. It also requires waiting for existing contracts granting performance rights to expire. Thus, new organizations are not likely to pop up overnight.

5. Is this related at all to the radio streaming waiver with SONY that the NAB is urging stations to consider?

The GMR issues all involve the rights to perform the underlying words and music to a song, not the rights to perform a recording of that song as recorded by any particular band or singer. The recording by a particular performing artist is called a “sound recording” or “master recording.” Broadcasters do not pay for the over-the-air performance of sound recordings, but they do pay performance fees when those recordings are streamed. The Sony waiver involves the digital performance right to sound recordings, and some of the rules that apply under the license for those digital performances. It is unrelated to the GMR controversy.

For more detailed information about some of these issues, I have written a number of articles discussing music rights on my Blog – www.broadcastlawblog.com.

On the Interim license issued by GMR, see my article here: http://www.broadcastlawblog.com/2016/12/articles/gmr-and-rmlc-agree-to-interim-license-for-commercial-radio-stations-providing-9-months-to-reach-final-deal-for-public-performance-of-musical-compositions/

On the litigation between GMR and RMLC see my articles here http://www.broadcastlawblog.com/2016/11/articles/rmlc-files-antitrust-lawsuit-against-gmr-and-seeks-to-enjoin-new-music-license-fees-on-radio-stations/ and here: http://www.broadcastlawblog.com/2016/12/articles/gmr-sues-rmlc-claims-antitrust-violations-for-negotiating-royalties-on-behalf-of-the-radio-industry-what-are-the-implications/

On the Sony waiver, see my article here: http://www.broadcastlawblog.com/2016/10/articles/nab-announces-agreements-with-sony-and-warner-to-waive-performance-complement-and-other-statutory-requirements-for-broadcasters-who-stream-their-signals/

For more information about some of the other potential players in music licensing, see my article here: http://www.broadcastlawblog.com/2016/07/articles/socan-buys-audiam-the-consolidation-and-fragmentation-of-music-rights-what-does-it-mean-for-music-services/

For a general summary of many of the music issues that affect broadcasters, see my article here and the presentation slides that are referenced in that article: http://www.broadcastlawblog.com/2016/08/articles/whats-up-with-music-rights-for-broadcasters-and-webcasters-a-presentation-on-pending-issues/