WEBVTT - Weekend Law: Google Antitrust, NBA Teams Sued & NFL Sunday TIcket 0:00:03.200 --> 0:00:08.000 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:10.560 --> 0:00:14.440 It's official. A federal judge has ruled that Google is 0:00:14.480 --> 0:00:18.279 a monopolist, a stunning defeat for the search giant and 0:00:18.360 --> 0:00:21.680 a huge win for the government in its biggest antitrust 0:00:21.720 --> 0:00:25.200 showdown against a tech giant in a quarter century. And 0:00:25.320 --> 0:00:29.240 make no mistake, the Biden administration and Attorney General Merrick 0:00:29.280 --> 0:00:33.080 Garland have made taking on the tech giants a priority. 0:00:33.520 --> 0:00:37.600 Monopolies threaten the free and fair markets upon which our 0:00:37.680 --> 0:00:43.279 economy is based. They stifle innovation, They hurt producers and workers, 0:00:43.960 --> 0:00:46.200 and they increase costs for consumers. 0:00:46.640 --> 0:00:49.720 DC judge on mit Meta found that Google broke the 0:00:49.800 --> 0:00:54.680 law by exploiting its dominance to squash competition and stifle innovation. 0:00:55.160 --> 0:00:57.800 The sanctions could be anything from a breakup of the 0:00:57.880 --> 0:01:01.680 company to unwinding its excluded deals, but that won't be 0:01:01.800 --> 0:01:06.240 decided until after yet another trial. Of course, Google says 0:01:06.319 --> 0:01:10.199 it will appeal. Joining me is anti trust Expert William Kavasik, 0:01:10.360 --> 0:01:13.640 a professor at GW Law School and the former chair 0:01:13.680 --> 0:01:17.880 of the Federal Trade Commission, will this decision stand as 0:01:17.920 --> 0:01:22.120 a landmark, along with say the at and t Standard 0:01:22.160 --> 0:01:24.679 Oil and Microsoft cases. 0:01:25.360 --> 0:01:28.919 It's the beginning of a process that could become a landmark, 0:01:28.959 --> 0:01:32.039 but there's still many rivers to cross before this specific 0:01:32.080 --> 0:01:34.960 contest is over. We have a proceeding coming up this 0:01:35.080 --> 0:01:38.240 fall on the remedy to be issued. Judge Meta will 0:01:38.280 --> 0:01:40.600 be writing an opinion on what that remedy should be, 0:01:40.680 --> 0:01:42.959 probably issues that by the end of the year. But 0:01:43.040 --> 0:01:45.959 then we go through the inevitable process of appeals where 0:01:46.160 --> 0:01:49.440 Google and maybe the government point is, decide to appeal. 0:01:49.480 --> 0:01:53.120 Different issues raise different points about Judge Meta's decisions on 0:01:53.200 --> 0:01:56.440 liability and remedy. So this promising first step for the 0:01:56.480 --> 0:01:59.600 government is only the first step in the process that 0:01:59.640 --> 0:02:03.040 will lead through a fairly difficult gauntlet of appeals. And 0:02:03.080 --> 0:02:05.160 I think ultimately this is a case that gets to 0:02:05.160 --> 0:02:08.240 the US Supreme Court. The Supreme Court hasn't informed me 0:02:08.320 --> 0:02:11.720 about whether that's the case, So this is speculation that 0:02:11.800 --> 0:02:15.240 I can't defend in any scientific way. But it's a 0:02:15.280 --> 0:02:18.520 case of such significance both were with respect to doctrine 0:02:18.520 --> 0:02:21.720 and commerce, that it's a natural candidate to be reviewed 0:02:21.720 --> 0:02:24.440 by the Supreme Court, and that process could take us 0:02:24.480 --> 0:02:28.080 well into twenty twenty six. So your crucial question about 0:02:28.120 --> 0:02:30.720 what kind of landmarks this is, I will answer with 0:02:30.880 --> 0:02:36.400 the typical academics evasion. It depends on the final resolution 0:02:36.560 --> 0:02:39.400 of the matter through the appeals, an answer that won't 0:02:39.440 --> 0:02:41.560 come to us probably for two more years. 0:02:41.840 --> 0:02:45.120 Judge Meta found the Google is a monopolist and has 0:02:45.240 --> 0:02:48.520 acted as one to maintain its monopoly. Can you explain 0:02:48.760 --> 0:02:51.920 broadly how he came to that conclusion? 0:02:52.360 --> 0:02:55.760 On the crucial question of monopoly, the government has to 0:02:56.120 --> 0:03:00.280 show that the company exercises tremendous power within an area 0:03:00.320 --> 0:03:02.960 of commerce and in any trust language, that's usually called 0:03:02.960 --> 0:03:05.800 a relevant market. It's a technical term that refers to 0:03:06.080 --> 0:03:09.720 products that people regard as good substitutes for each other, 0:03:10.000 --> 0:03:13.919 and the government, to Judge Meta's satisfaction, proved that in 0:03:13.960 --> 0:03:18.480 a market consisting of general search services, that Google indeed 0:03:18.560 --> 0:03:21.680 is a monopolist, It does not have effective competitors, that 0:03:21.720 --> 0:03:25.200 it accounts for an overwhelming share of activity of searches 0:03:25.200 --> 0:03:27.959 that are carried out, and as a consequence, its power 0:03:28.200 --> 0:03:30.959 is not only significant today, but the court concluded it's 0:03:31.000 --> 0:03:33.640 going to be durable. But any trust law, it's not 0:03:33.800 --> 0:03:36.320 enough to simply be big. There are lots of expressions 0:03:36.320 --> 0:03:38.920 by courts over time. That's saying achieving a position of 0:03:38.960 --> 0:03:41.680 preeminence is the market of distinction. It's not a badge 0:03:41.720 --> 0:03:43.920 of shame. So you have to do something more. You 0:03:43.920 --> 0:03:47.320 have to show that that power was achieved to means 0:03:47.320 --> 0:03:50.800 that are improper, that you achieved it through improper means, 0:03:50.840 --> 0:03:53.920 you protected it through improper means. A colleague once told 0:03:53.960 --> 0:03:56.280 me that it means in US law that you need 0:03:56.360 --> 0:03:59.000 not only be big, you have to be bad as well. 0:03:59.160 --> 0:04:02.120 And on that point, Judge Meta found that Google's behavior 0:04:02.160 --> 0:04:05.320 in a number of instances was improper. That it excluded 0:04:05.440 --> 0:04:09.360 rivals from having access to business opportunities that they needed 0:04:09.360 --> 0:04:12.200 to compete, and it did it through a variety of 0:04:12.200 --> 0:04:15.800 different forms of exclusivity agreements that gave it the sole 0:04:16.320 --> 0:04:19.520 access to a crucial asset in dealing with third parties 0:04:19.560 --> 0:04:22.080 such as Apple and the Menta. Competitors didn't have the 0:04:22.080 --> 0:04:26.200 opportunity to use that valuable asset to compete effectively with Google. 0:04:26.440 --> 0:04:30.440 So for those two core elements of the monopolization case, 0:04:30.600 --> 0:04:34.120 Judge Meta validated the heart of the government's seriod. The 0:04:34.120 --> 0:04:36.400 government did not get everything it wanted here, but it 0:04:36.520 --> 0:04:41.440 got validation of its core interpretation of this crucial principle 0:04:41.480 --> 0:04:45.400 of monopolization law that the firm in question must indeed 0:04:45.440 --> 0:04:49.360 have tremendous power within a specific part of the marketplace, 0:04:49.640 --> 0:04:53.720 and must have achieved or protected that position through improper means. 0:04:53.800 --> 0:04:57.159 On those larger themes, Judge Meta concluded that the government 0:04:57.200 --> 0:04:59.520 had proven its case. Google has some things in this 0:04:59.600 --> 0:05:04.720 opinion that I'm sure likes. Disappointed with the larger outcome, I imagine. 0:05:04.240 --> 0:05:08.240 Google plans to appeal no surprise, and in a statement 0:05:08.360 --> 0:05:11.200 said that this goes to your point that Meta's opinion 0:05:11.360 --> 0:05:15.800 recognize Google as the Internet's best search engine quote, but 0:05:16.160 --> 0:05:19.839 concludes that we shouldn't be allowed to make it easily available. 0:05:20.080 --> 0:05:24.240 Do you think Google has a lot of ammunition for appeal? 0:05:24.839 --> 0:05:28.240 It enjoys a couple of potential advantages on appeal, and 0:05:28.320 --> 0:05:31.279 a couple of that aren't merely potential, they're real. The law, 0:05:31.440 --> 0:05:35.680 the jurisprudence of US antitrust law since the late seventies 0:05:35.720 --> 0:05:38.279 has tended to error on the side of dominant terms 0:05:38.279 --> 0:05:40.640 in evaluating their behavior. It has not told them they 0:05:40.680 --> 0:05:43.640 can do anything they want, but it's imposed fairly severe 0:05:43.680 --> 0:05:46.840 burdens on government and private planets. Trying to attack the 0:05:46.839 --> 0:05:49.840 behavior of dominant firms, so that the arena in which 0:05:49.839 --> 0:05:52.440 the appeals will take place is one in which the 0:05:52.520 --> 0:05:56.560 doctrine is generally sympathetic to the kinds of arguments that 0:05:56.720 --> 0:05:59.960 Google has offered about its own work and developed or 0:06:00.080 --> 0:06:03.159 in the trial. Another advantage is that they'll point to 0:06:03.200 --> 0:06:06.160 the evidence in the record that suggests that people turn 0:06:06.279 --> 0:06:08.760 back to Google when they have a choice, When the 0:06:08.800 --> 0:06:12.359 starting point of their experience is another product, they switch 0:06:12.400 --> 0:06:14.800 to the default, they abandon that product and turn back 0:06:14.800 --> 0:06:17.080 to Google. So Google's going to stay. There's evidence in 0:06:17.120 --> 0:06:19.360 the case that says people come back to us because 0:06:19.400 --> 0:06:23.080 we're offering them the better experience. Those aren't so many arguments. 0:06:23.080 --> 0:06:27.039 Those are arguments that enjoy some philosophical and doctrinal support 0:06:27.160 --> 0:06:29.719 and what courts have done in the past. So Google 0:06:29.760 --> 0:06:32.479 would be standing before the Court of Appeals saying that 0:06:32.600 --> 0:06:36.880 the practices that the government complains about cannot appropriately be 0:06:36.960 --> 0:06:40.679 deemed to be improper, and the remedial hearings will focus 0:06:40.720 --> 0:06:42.800 a lot on what Google should be allowed to do 0:06:42.880 --> 0:06:44.800 in the future, how much should it be able to 0:06:44.880 --> 0:06:47.919 bid for, say, the placement on the iPhone. When it 0:06:47.920 --> 0:06:50.560 comes to the famous rect angle on the iPhone. Should 0:06:50.600 --> 0:06:52.599 it be more cautious and how it bids, should it 0:06:52.600 --> 0:06:56.400 bid less aggressively? What exactly should its position be? Those 0:06:56.400 --> 0:06:59.160 are hard issues to be resolved in the remedial proceeding. 0:06:59.440 --> 0:07:01.440 And then jed Ji Metta in a couple of places 0:07:01.600 --> 0:07:04.960 expressed a concern that has appeared in earlier Supreme Court 0:07:05.000 --> 0:07:09.520 decisions about the difficulty judges face in trying to tell 0:07:09.560 --> 0:07:12.400 companies whom they must deal with and on what terms 0:07:12.400 --> 0:07:15.800 they must deal with them. It express concern about mandating 0:07:15.840 --> 0:07:18.680 a general obligation on the part of dominant firms to 0:07:18.760 --> 0:07:21.800 deal with other companies, anxiety about the role that courts 0:07:21.840 --> 0:07:25.840 would undertake, and becoming a referee that examines and evaluates 0:07:25.840 --> 0:07:28.800 each of these interactions between the dominant firm and the 0:07:28.840 --> 0:07:31.720 third party. Court said, we're not wealth suited to do that. 0:07:32.200 --> 0:07:34.400 The intervention that we have to undertake has to be 0:07:34.480 --> 0:07:38.400 much cleaner and not involve such long term, ongoing entanglements. 0:07:38.480 --> 0:07:41.360 We can't do that. You know, during the remedy proceedings 0:07:41.440 --> 0:07:45.360 and probably in the appellate process, Google will be saying, well, 0:07:45.640 --> 0:07:48.840 in light of that express concern, how do you write 0:07:48.960 --> 0:07:51.520 an order or an injunction that tells us what we 0:07:51.560 --> 0:07:54.320 can and can't do without in some crucial ways just 0:07:54.360 --> 0:07:57.160 disabling us. How do you do that? So those would 0:07:57.160 --> 0:08:00.720 be very live and important issues for debate during the It. 0:08:00.720 --> 0:08:02.840 Sounds as if, and I could be wrong here, you 0:08:02.880 --> 0:08:05.640 think that Google has the better arguments on appeal. 0:08:06.840 --> 0:08:09.080 I don't know in substance that they have the better 0:08:09.160 --> 0:08:12.920 arguments on appeal. I just think a caution to keep 0:08:12.960 --> 0:08:16.960 in mind. In some ways, amid the euphoria that many 0:08:17.080 --> 0:08:20.080 felt about the outcome, those who wanted the judge to 0:08:20.120 --> 0:08:23.440 find liability, the caution is that there's a lot of 0:08:23.480 --> 0:08:25.680 hard work to be done in defining what it is 0:08:25.720 --> 0:08:29.120 Google can't do in the future, and Google's operating in 0:08:29.160 --> 0:08:33.400 the judicial environment, a doct final environment built up, especially 0:08:33.720 --> 0:08:36.760 since the late nineteen seventies that tends to be sympathetic 0:08:37.000 --> 0:08:39.400 to some of the kinds of arguments that Google has 0:08:39.400 --> 0:08:43.880 been making. So it's really a caution that, notwithstanding the 0:08:44.080 --> 0:08:47.600 exceptional result that the government achieved, that there are many 0:08:47.679 --> 0:08:51.000 rivers to cross before the final outcome validates the approach 0:08:51.040 --> 0:08:53.640 that they've been taken, and Google is not yet defeated 0:08:53.720 --> 0:08:56.680 in its efforts to persuade the appellate judges that it 0:08:56.720 --> 0:08:57.920 didn't behave improperly. 0:08:58.160 --> 0:09:01.839 So you mentioned the remedy and judgment US scheduled to 0:09:01.920 --> 0:09:04.880 hearing for next month to decide the timing for the 0:09:04.920 --> 0:09:08.120 separate trial. And the remedies and potential remedies mentioned have 0:09:08.160 --> 0:09:12.120 been everything from ordering a breakup of Google to unwinding 0:09:12.240 --> 0:09:15.760 exclusive search deals everything in between. What do you see 0:09:15.760 --> 0:09:19.280 as the most likely potential remedy or remedies. 0:09:19.640 --> 0:09:22.200 A starting point is like to be controls on conduct, 0:09:22.360 --> 0:09:25.120 that is, to define the types of agreements that Google 0:09:25.160 --> 0:09:28.480 cannot enter into in the future, to indicate that certain 0:09:28.559 --> 0:09:32.400 types of existing agreements or practices are no longer permissible 0:09:32.600 --> 0:09:36.280 with the caveat that writing, the injunction that prohibits those 0:09:36.320 --> 0:09:39.760 practices will require a lot of further attention and thought 0:09:40.040 --> 0:09:41.800 in light of some of the concerns that we've just 0:09:41.880 --> 0:09:44.640 been talking about. In some sense, the boulder, the more 0:09:44.880 --> 0:09:49.000 visually striking solution is to force the company to divest assets. 0:09:49.000 --> 0:09:52.240 That's the breakup solution. Theoretically, it's in the solution set. 0:09:52.400 --> 0:09:56.000 It's a well established anti trust remedy from anopilization going 0:09:56.040 --> 0:09:58.640 back to the earliest phase of enforcement of the Sherman 0:09:58.720 --> 0:10:01.880 Act in the late nineteen in early twentieth centuries. It's 0:10:01.920 --> 0:10:04.880 also been a remedy the courts have applied with some reluctant, 0:10:05.080 --> 0:10:08.400 some anxiety on the part of individual federal judges about 0:10:08.600 --> 0:10:12.000 whether they are performing surgery of a sort that's going 0:10:12.040 --> 0:10:15.080 to make the commercial system better or worse off. So 0:10:15.160 --> 0:10:18.800 I would say there's an implicit additional burden that government 0:10:18.840 --> 0:10:23.520 plaintiffs carry when they're trying to argue for divestiture remedies 0:10:23.679 --> 0:10:27.880 in monopolization cases. It's not impossible to bear that burden. 0:10:28.160 --> 0:10:32.200 And the famous DOJ prosecution of Microsoft, DOJ succeeded in 0:10:32.280 --> 0:10:35.720 persuading the trial judge to mandate to the separation of 0:10:35.960 --> 0:10:39.400 Microsoft into two parts, an operating systems company and an 0:10:39.440 --> 0:10:42.760 applications company. To the Court of Appeals rejected that remedy 0:10:42.840 --> 0:10:45.000 for a variety of reasons, but one of them was 0:10:45.040 --> 0:10:47.600 that Judge Jackson, the trial judge in the case, held 0:10:47.720 --> 0:10:50.440 an adequate set of hearings on the remedy. He basically 0:10:50.480 --> 0:10:52.800 had a two hour conversation with the parties in the 0:10:52.840 --> 0:10:57.240 courtroom and that was it. So conceptually, legally, theoretically, it's 0:10:57.360 --> 0:11:01.199 part of the solution set in practice. It challenging remedy 0:11:01.360 --> 0:11:04.160 in some instances. For the government to obtain I'd say 0:11:04.240 --> 0:11:07.000 to get the remedy, the government has to do two things. 0:11:07.040 --> 0:11:10.959 Want us to say that the misconduct created serious competitive 0:11:11.240 --> 0:11:15.760 clause in the relevant line of commerce, seriously retarded competition, 0:11:16.120 --> 0:11:19.960 and that the structural solution is vital to restoring competition 0:11:20.280 --> 0:11:23.160 and making it effective in the future. That impossible, but 0:11:23.440 --> 0:11:26.320 very challenging, which tends to mean that a more likely 0:11:26.400 --> 0:11:29.800 outcome perhaps is some set of controls on conduct rather 0:11:29.840 --> 0:11:31.400 than mandated divestitures. 0:11:31.800 --> 0:11:33.920 And at this point we don't even know what the 0:11:34.000 --> 0:11:37.920 government will be asking for as remedies. So, as you say, 0:11:38.200 --> 0:11:40.680 a long way to go. Thanks so much for sharing 0:11:40.720 --> 0:11:44.840 your insights with us. That's Professor William Kavasik of GW 0:11:44.960 --> 0:11:48.359 Law School. I'm June Grosso and you're listening to Bloomberg. 0:11:49.960 --> 0:11:54.680 Look for me, youngs in on the West Side Way. 0:11:55.440 --> 0:11:56.360 What we like to do? 0:11:56.520 --> 0:12:03.640 That way from Beyonce and jay Z fum Cedy crazy 0:12:04.800 --> 0:12:11.719 to do a lip up the Pitbull and Cardi b. 0:12:12.720 --> 0:12:18.600 Alex Dallas, Alec Dumms, Alex Sunn, Alex Shun, Alec Million, Dalis. 0:12:18.080 --> 0:12:22.040 Your favorite NBA team may have been using copyrighted music 0:12:22.120 --> 0:12:26.080 from your favorite artists in promotional videos on social media 0:12:26.440 --> 0:12:29.600 without getting permission. Nearly half of the teams in the 0:12:29.640 --> 0:12:33.520 league are being sued for using copyrighted songs without consent 0:12:33.760 --> 0:12:38.400 in videos on TikTok, Facebook, Instagram, YouTube, and x meaning 0:12:38.400 --> 0:12:42.440 they didn't pay a fee to get the required synchronization license. 0:12:43.000 --> 0:12:45.960 The New York Knicks, the Philadelphia seventy six ers, and 0:12:46.000 --> 0:12:49.240 the Atlanta Hawks are among the fourteen teams being sued 0:12:49.280 --> 0:12:53.319 by music companies for knowingly and wilfully infringing on their 0:12:53.360 --> 0:12:58.439 intellectual property rights. Joining me is intellectual property litigator Terrence Ross, 0:12:58.600 --> 0:13:02.400 a partner at Katinyuchen Terry, explain the issue here. 0:13:02.880 --> 0:13:06.080 Here's the problem that they face. Each of these social 0:13:06.120 --> 0:13:10.360 media sites has a license with the major music publishing 0:13:10.440 --> 0:13:13.600 houses and recording studios, and they have available to their 0:13:13.760 --> 0:13:18.480 users hundreds of thousands pieces of music. The problem is 0:13:18.920 --> 0:13:23.480 that that license is limited to non commercial use, and 0:13:23.640 --> 0:13:27.720 this is where companies make mistakes all the time on 0:13:27.760 --> 0:13:30.840 social media platforms. And this is truly these lawsuits are 0:13:30.840 --> 0:13:34.199 truly a cautionary tale for every business that should wake 0:13:34.280 --> 0:13:36.760 up and pay attention here. When a business goes on 0:13:36.800 --> 0:13:40.360 a social media platform, it's simply assumed that you're doing 0:13:40.360 --> 0:13:43.440 that for commercial purposes your business. What other purpose could 0:13:43.440 --> 0:13:46.120 there be other than for commercial purpose? And therefore that 0:13:46.280 --> 0:13:51.439 license that individual users teenagers for example, can take advantage 0:13:51.440 --> 0:13:54.760 of cannot be taken advantage of by a business because 0:13:54.760 --> 0:13:59.160 it expressly excludes commercial use on these websites, whether it 0:13:59.240 --> 0:14:03.000 be TikTok or Instagram. And that's the problem here is 0:14:03.040 --> 0:14:06.280 that these NBA teams did not seem to be cognizant 0:14:06.480 --> 0:14:10.360 of that limitation on the general available license and simply 0:14:10.400 --> 0:14:12.800 assumed that they could do this, and nobody really thought 0:14:12.800 --> 0:14:13.760 twice and. 0:14:14.120 --> 0:14:15.520 I assumed isn't a defense. 0:14:16.520 --> 0:14:20.000 I assume it's not a defense like that famous Steve 0:14:20.040 --> 0:14:23.720 Martin vitt. Sorry here, Hunter, I didn't know that armed 0:14:23.760 --> 0:14:26.280 robbery was against the law. That doesn't work in a 0:14:26.320 --> 0:14:29.280 court of law. Fair use is a legitimate defense, But 0:14:29.440 --> 0:14:32.080 in light of the fact that they were trying to 0:14:32.080 --> 0:14:36.080 take advantage of a license to the site for music 0:14:36.560 --> 0:14:39.280 and simply didn't comply the right way, it makes it 0:14:39.360 --> 0:14:42.800 really hard to then succeed with the fair use defense, 0:14:42.800 --> 0:14:43.560 in my opinion. 0:14:43.840 --> 0:14:47.200 And when drinkmaker Bang Energy was sued for using hundreds 0:14:47.240 --> 0:14:51.280 of copyrighted songs in TikTok videos. It said it believed 0:14:51.320 --> 0:14:55.160 that the TikTok licenses gave it permission, but the judge 0:14:55.200 --> 0:14:58.440 said it really didn't matter what Bang thought. Going back 0:14:58.480 --> 0:15:01.160 to the Steve Martin defense, it seems like a lot 0:15:01.160 --> 0:15:02.840 of similar suits are being. 0:15:02.720 --> 0:15:06.240 Filed, so there's a large number of these that have 0:15:06.280 --> 0:15:10.040 been percolating over the last year. The Beastie Boys sued 0:15:10.440 --> 0:15:14.360 Chile's the restaurant chain for using their song sabotage in 0:15:14.480 --> 0:15:19.640 social media clips. Sony sued Marriott just this last May 0:15:20.200 --> 0:15:22.880 for using some of its songs. Sony has a very 0:15:22.960 --> 0:15:26.320 large music catalog, and Mary apparently used some of those 0:15:26.440 --> 0:15:30.440 in its social media platform campaigns. So you're seeing this 0:15:30.560 --> 0:15:33.280 happen all the time. It's part of a broader trend 0:15:33.320 --> 0:15:36.920 within the music business. The music industry and performers in 0:15:37.000 --> 0:15:40.920 general believe that they're being undercompensated, and so they have 0:15:41.080 --> 0:15:45.120 become very aggressive on the litigation front. There have been 0:15:45.440 --> 0:15:50.240 a number of lawsuits against streaming platforms, mostly recently Verizon 0:15:50.320 --> 0:15:54.480 ut suit alleging that they are willfully allowing this to 0:15:54.640 --> 0:15:59.120 happen that people share songs notwithstanding getting copious numbers of 0:15:59.280 --> 0:16:02.600 copyright down notices from the music companies. And so this 0:16:02.720 --> 0:16:06.320 is just part of a larger trend of pushing back 0:16:06.560 --> 0:16:11.720 by music companies, recording studios, performers to try to capture 0:16:12.120 --> 0:16:14.680 more monetary compensation for their work. 0:16:15.200 --> 0:16:17.880 To me, this seems like an open and shutcase. 0:16:18.520 --> 0:16:20.960 Look, if I got hired to represent one of the teams, 0:16:21.000 --> 0:16:23.600 I'd be calling and trying to answer real quick what 0:16:23.680 --> 0:16:26.200 they want. You know, litigating a lawsuit like this can 0:16:26.360 --> 0:16:31.360 only be embarrassing at best, and at worst can really 0:16:31.400 --> 0:16:34.400 be a black eye for a team, particularly since the 0:16:34.880 --> 0:16:37.680 music ledged to be used here is by some of 0:16:37.720 --> 0:16:41.520 the most popular performers on the contemporary music scene. The 0:16:41.640 --> 0:16:47.720 allegations are that the songs used came from hit Bull, Doja, Cat, Dualipa, 0:16:48.200 --> 0:16:51.720 Miley Cyrus, jay Z, Cardi B, just to name a few. 0:16:51.920 --> 0:16:56.680 I mean, these are really popular performers and their fans 0:16:56.800 --> 0:17:00.280 tend to resent it when their music is being used 0:17:00.320 --> 0:17:04.040 improperly like this, and so this can only be a 0:17:04.080 --> 0:17:07.359 black eye for these NBA teams. There's that old saying, 0:17:07.359 --> 0:17:10.040 you know, the first rule of holes h O. L. 0:17:10.119 --> 0:17:13.840 Ees is when you're in a hole, stop thinking. And 0:17:14.000 --> 0:17:16.760 so my view is, you know, I didn't vote meacopa 0:17:16.840 --> 0:17:20.520 meticopa man maxima culpa, and do my five hail Mary's 0:17:20.520 --> 0:17:23.080 and pennants and and move on. You know, just what 0:17:23.280 --> 0:17:24.879 is it that you want to make this go away? 0:17:25.040 --> 0:17:27.320 And do it and we'll promise never to do it again, 0:17:27.440 --> 0:17:29.800 and then I put in place some sort of training 0:17:29.960 --> 0:17:33.119 for the people who are actually doing my social media 0:17:33.280 --> 0:17:36.040 platform so that this never happens again. Now, part of 0:17:36.040 --> 0:17:40.400 the problem here is that sometimes corporations farm that workout 0:17:40.600 --> 0:17:43.120 to third parties. I mean, there are lots of companies 0:17:43.160 --> 0:17:47.040 who for a price, will do your social media postings 0:17:47.119 --> 0:17:50.040 for you. That's what most celebrities have. You know, you 0:17:50.119 --> 0:17:53.080 don't see people like Kevin Durant sitting down and doing 0:17:53.119 --> 0:17:56.399 his own posting on TikTok. What you see is, you know, 0:17:56.520 --> 0:17:59.760 wealthy people in big corporation pushing that out, outsourcing it 0:17:59.840 --> 0:18:01.720 to third party you will do it for them. And 0:18:02.040 --> 0:18:04.760 that's a different problem to the except the NBA teams 0:18:04.800 --> 0:18:06.840 are doing that, not doing it in house. They've got 0:18:06.920 --> 0:18:09.200 to crack down on that and make sure that their 0:18:09.400 --> 0:18:12.720 third party vendors who are providing these services are doing 0:18:12.760 --> 0:18:13.600 it in a lawful way. 0:18:13.960 --> 0:18:16.760 Maybe the Knicks thought that since jay Z is such 0:18:16.800 --> 0:18:19.439 a fan and since courtside all the time, he wouldn't 0:18:19.480 --> 0:18:21.760 mind if they used his song, that could well be 0:18:21.920 --> 0:18:22.359 the case. 0:18:22.440 --> 0:18:25.479 I don't know, so I suspect me honestly to I mean, 0:18:25.640 --> 0:18:27.879 we can laugh about this, and it is comical in 0:18:28.000 --> 0:18:30.800 some ways, but I suspect that none of these teams 0:18:30.960 --> 0:18:34.000 realized what was going on. None of these teams would 0:18:34.119 --> 0:18:37.520 have willfully set out to break the copyright laws because 0:18:37.520 --> 0:18:40.280 they don't have their own copyrights and don't want them infringe. 0:18:40.480 --> 0:18:43.880 This is a mistake that the team's made, and it's 0:18:44.080 --> 0:18:47.280 what we would call in the business innocent infringement, and 0:18:47.640 --> 0:18:50.000 they should just do their penance, figure out what it 0:18:50.080 --> 0:18:51.840 needs to make this go away, and make sure it 0:18:51.880 --> 0:18:52.360 doesn't happen. 0:18:52.480 --> 0:18:58.080 Yet, So none of these fourteen teams, sophisticated corporate players 0:18:58.640 --> 0:19:01.600 realized that they had to get to use an artist 0:19:01.760 --> 0:19:05.960 copyrighted music and a promotional video. Don't they have teams 0:19:06.040 --> 0:19:09.240 of in house lawyers advising them on things like this. 0:19:10.200 --> 0:19:15.960 Fundamentally, the NBA is an entertainment business, and as with 0:19:16.160 --> 0:19:21.080 any entertainment business, they have to have copyrights on their broadcast, trademarks, 0:19:21.160 --> 0:19:24.159 on their logos, on the team names, et cetera. So 0:19:24.400 --> 0:19:27.840 they are aware of intellectual property laws. There's no question 0:19:28.000 --> 0:19:31.760 about that. The question that he poses, how did this happen? 0:19:32.080 --> 0:19:35.879 Each of these NBA teams have in house legal staff. 0:19:36.160 --> 0:19:39.399 The league has a fairly large in house legal staff 0:19:39.560 --> 0:19:42.920 that can be accessed by the teams as necessary. I mean, 0:19:43.040 --> 0:19:46.520 most of the trademark registration process goes through the League, 0:19:46.680 --> 0:19:49.000 not through the individual teams. And so the question is 0:19:49.040 --> 0:19:51.120 a very good one. He asked you how could this happen? 0:19:51.680 --> 0:19:55.760 And the simple answer is that, as with many corporations, 0:19:56.000 --> 0:19:58.320 the mere fact that you're big and that you have 0:19:58.480 --> 0:20:01.159 knowledge of the intellectual proper it doesn't mean that you 0:20:01.320 --> 0:20:04.040 have a large enough legal staff or legal staff that 0:20:04.280 --> 0:20:08.040 is experienced in intellectual property to be able to deal 0:20:08.119 --> 0:20:11.639 with every problem that comes up. The biggest problem that 0:20:12.160 --> 0:20:16.520 NBA teams face are labor and employment issue, so they 0:20:16.600 --> 0:20:19.600 obviously have people who are very familiar with employment issues 0:20:19.640 --> 0:20:22.959 and with the collective bargaining agreement. They also have basic 0:20:23.040 --> 0:20:26.320 contract problems, contracts with the venue that they play in, 0:20:26.720 --> 0:20:29.720 contracts with sponsors, and so they obviously have people on 0:20:29.760 --> 0:20:32.639 their legal staff who are very familiar contracts. That doesn't 0:20:32.760 --> 0:20:35.480 mean that they're going to have a copyright specialist because 0:20:35.520 --> 0:20:38.480 that doesn't come up as often, and they probably when 0:20:38.480 --> 0:20:41.440 they have a problem refer to outside council in that field. 0:20:41.560 --> 0:20:43.960 And so the simple answer is, yeah, their big corporation, 0:20:44.720 --> 0:20:47.760 but when it comes to social media platforms, they're often 0:20:47.880 --> 0:20:51.400 no more cognizant of what the rules are than any 0:20:51.560 --> 0:20:53.280 late person like your kid or my kid. 0:20:53.880 --> 0:20:56.439 So the plaintiffs are seeking damages of up to one 0:20:56.520 --> 0:21:00.280 hundred and fifty thousand per song infringed, So it's not 0:21:00.320 --> 0:21:02.359 about how many times the videos were viewed. 0:21:03.119 --> 0:21:05.959 It's an interesting aspect of the Copyright Act. You can 0:21:06.200 --> 0:21:09.359 seek actual damages whatever the harm to you was. And 0:21:09.680 --> 0:21:13.119 perhaps one of these videos was viewed a million times, 0:21:13.160 --> 0:21:15.639 and you can make some sort of argument that that 0:21:15.680 --> 0:21:18.040 would be worth two cents for each viewing to you. 0:21:18.359 --> 0:21:20.600 So that's one way you can go the actual loss. 0:21:21.119 --> 0:21:24.520 That's often really hard to prove in copyright cases like this, 0:21:25.000 --> 0:21:29.160 and so the Copyright Act includes as a core part 0:21:29.400 --> 0:21:33.760 of the damage's provision the remedy of statutory damages. Congress 0:21:33.880 --> 0:21:36.520 knowing that it was hard to prove up actual loss, 0:21:36.560 --> 0:21:40.920 and copyright cases allowed for a plaintiff, a copyright owner 0:21:40.960 --> 0:21:42.359 to come in to court and say, look, I had 0:21:42.440 --> 0:21:45.240 these three works, they were each infringed, and for each 0:21:45.480 --> 0:21:48.639 work you can get up to up to one hundred 0:21:48.640 --> 0:21:51.880 and fifty thousand dollars in what they're called statutory damages. Now, 0:21:52.280 --> 0:21:54.680 that's not an automatic one hundred and fifty thousand and 0:21:54.720 --> 0:21:58.480 one hundred and fifty thousand knowledge is for willful copyright infringement. 0:21:58.760 --> 0:22:02.680 For innocent infringement, it's much less. For ordinary infringements the 0:22:02.720 --> 0:22:04.760 cap of thirty thousand, and for wolf one infringements the 0:22:04.840 --> 0:22:07.360 cap of the one hundred and fifty thousand. So it's 0:22:07.400 --> 0:22:09.960 not simply well, you infringe three songs times one hundred 0:22:09.960 --> 0:22:11.840 and fifty thousand. Doesn't work that way. There has to 0:22:11.880 --> 0:22:14.440 be a determination made as to the mental state of 0:22:14.560 --> 0:22:17.080 the defendant when it went about this infringement. And as 0:22:17.119 --> 0:22:20.280 I said, I don't think any of these teams set 0:22:20.320 --> 0:22:23.240 out to willfully infringe, as that term is used in 0:22:23.320 --> 0:22:25.560 the copyright laws. They made a mistake, and so I 0:22:25.600 --> 0:22:27.960 think the damages, if this were to go to Troup, 0:22:28.040 --> 0:22:30.040 should be set at much lower than one hundred and 0:22:30.040 --> 0:22:32.520 fifty thousand dollars per work. But there's some teams who 0:22:32.680 --> 0:22:36.200 used a lot of different songs. The Knicks had twenty 0:22:36.320 --> 0:22:41.320 three different songs allegedly used. The Orlando Magic had thirty 0:22:41.440 --> 0:22:44.760