WEBVTT - Could a Copyright Suit Alter the Marvel Universe? 0:00:03.160 --> 0:00:07.960 This is Bloombird Law with June Brusso from Bloomberg Radio. 0:00:09.240 --> 0:00:14.280 I stock today, HI had twins. I went to the 0:00:14.360 --> 0:00:19.400 poor farm. I'm a millionaires. That's life. Game of Life, 0:00:21.200 --> 0:00:28.680 Life Life when you play. The Game of Life came 0:00:28.680 --> 0:00:32.360 out in nineteen sixty and became a classic. It's now 0:00:32.440 --> 0:00:36.080 part of the permanent collection at the Smithsonian. So why now, 0:00:36.360 --> 0:00:39.559 after more than sixty years, are the heirs of the 0:00:39.600 --> 0:00:43.240 game's designer trying to reclaim the copyright to the game 0:00:43.280 --> 0:00:47.320 from Hasbro? And will they succeed? The answers to those 0:00:47.440 --> 0:00:52.159 questions could have massive repercussions, even affecting characters in the 0:00:52.240 --> 0:00:56.360 far away Marvel universe like Iron Man, Spider Man, and 0:00:56.520 --> 0:01:00.240 Doctor Strange. Here to help us sort through this really 0:01:00.280 --> 0:01:04.880 complex case is intellectual property litigator Terence Frost, a partner 0:01:05.000 --> 0:01:08.679 Captain Uten Rosenman. So Terry tell us about the story 0:01:08.880 --> 0:01:13.160 behind the Game of Life. So June in ninety nine, 0:01:13.440 --> 0:01:17.360 a toy designer by the name of Reuben claimer I 0:01:17.520 --> 0:01:19.679 was trying to pitch a new toy to the Milton 0:01:19.720 --> 0:01:23.440 Bradley Company in Massachusetts. Milton Bradley took a pass on 0:01:23.480 --> 0:01:25.959 the toy, but told them they were interested in coming 0:01:26.040 --> 0:01:29.880 up with something to commemorate the hundredth anniversary of the company, 0:01:30.080 --> 0:01:33.240 so Mr Claimer asked permission to look through their archives 0:01:33.400 --> 0:01:37.000 and he found in the archives of the Milton Bradley 0:01:37.000 --> 0:01:41.559 Company the original very first game invented by Mr Milton 0:01:41.600 --> 0:01:45.520 Bradley in eighteen sixty and it was called the checkerboard 0:01:45.640 --> 0:01:49.360 Game of Life. And Claimer decided to do a modern 0:01:49.480 --> 0:01:53.600 version of that game which would celebrate the hundredth anniversary 0:01:53.640 --> 0:01:56.840 of the founding of Milton Bradley, and Milton Bradley just 0:01:56.920 --> 0:01:59.840 loved the idea, and so Mr Claimer went back to 0:02:00.160 --> 0:02:02.440 Andrews where he was based, and being more of an 0:02:02.440 --> 0:02:04.760 ideals guy, he had to come up with somebody who 0:02:04.760 --> 0:02:08.320 could actually develop the prototype, and he talked to a 0:02:08.360 --> 0:02:10.960 guy he knew by the name of Bill Markham, who 0:02:10.960 --> 0:02:14.200 had a small company designing toys and games, and he 0:02:14.320 --> 0:02:17.120 managed to develop a prototype of the Game of Life 0:02:17.200 --> 0:02:20.960 modern version in only six weeks. Claimer took it pitched 0:02:20.960 --> 0:02:23.960 it to Milton Bradley again. They loved it as produced, 0:02:23.960 --> 0:02:25.760 They made some tweaks to it and it was out 0:02:25.800 --> 0:02:29.760 on the store shelves by March of nineteen sixty anniversary 0:02:29.840 --> 0:02:33.239 Milton Bradley. Milton Bradley goes on to make a lot 0:02:33.240 --> 0:02:36.240 of money off of this game and ultimately is bought 0:02:36.280 --> 0:02:39.920 by the Hasbroke Company. So that's the background to the 0:02:39.960 --> 0:02:42.200 Game of Life, which is the creative work at the 0:02:42.240 --> 0:02:44.799 centerpiece of this lawsuit. So this game has been out 0:02:44.840 --> 0:02:49.160 for some sixty years. Why a lawsuit at this point, Well, 0:02:49.480 --> 0:02:53.400 this lawsuit arises out of a change that Congress made 0:02:53.919 --> 0:02:57.120 to the copyright laws back when it revised them in 0:02:57.240 --> 0:03:01.200 nine And up to that time, copyright in the United 0:03:01.200 --> 0:03:03.320 States was governed by what was referred to as the 0:03:03.440 --> 0:03:05.720 nineteen o nine Act, which is one of the reasons 0:03:05.760 --> 0:03:08.359 that the Congress felt they needed to revise it, and 0:03:08.440 --> 0:03:10.760 so the new law became the nineteen seventy six Act. 0:03:11.080 --> 0:03:15.080 In this nineteen seventy six Act, Congress put in a 0:03:15.120 --> 0:03:19.760 provision that had not previously ever existed. And what that provision, 0:03:19.840 --> 0:03:22.119 Section three or four of the nineteen seventy six Acts 0:03:22.160 --> 0:03:26.799 said was that a creator that had assigned away their 0:03:26.960 --> 0:03:31.880 copyright in a creative work would have a right to 0:03:32.240 --> 0:03:36.520 terminate that assignment for a brief period time fifty six 0:03:36.600 --> 0:03:40.400 years after the copyright had originally been a paid and 0:03:40.720 --> 0:03:44.600 this was in response to numerous stories during hearings in 0:03:44.680 --> 0:03:48.440 Congress from inventors who didn't know what their rights were 0:03:48.560 --> 0:03:51.240 at the time they signed away, copyrights weren't yet popular, 0:03:51.720 --> 0:03:57.040 didn't understand their bargaining power. Flora of stories from creators 0:03:57.080 --> 0:04:01.040 about the problem with the copyright assignments led Congress to 0:04:01.120 --> 0:04:03.920 create this sort of option whereby they could get their 0:04:03.960 --> 0:04:07.080 copyrights back after a certain period of time. And that 0:04:07.200 --> 0:04:10.200 was a right that did not exist under the nine Act. 0:04:10.520 --> 0:04:13.560 And that is the source of the problem here, because 0:04:13.640 --> 0:04:17.039 the copyright in the Game of Life is under the 0:04:17.160 --> 0:04:21.320 nineteen o nine Act, not the NYT. Adding to the 0:04:21.360 --> 0:04:26.720 complexity here is the rule called the instance and expense rule. 0:04:27.560 --> 0:04:32.880 So the nineteen o nine Copyright Act did not contain 0:04:33.480 --> 0:04:40.520 any references whatsoever to how an independent contractor commissioned to 0:04:40.720 --> 0:04:42.880 create a work and this should be treated for copyright 0:04:42.920 --> 0:04:48.360 law purposes. The courts developed their own rules for addressing 0:04:48.400 --> 0:04:52.840 the problem of independent contractors commissioned to create a creative work, 0:04:53.200 --> 0:04:56.080 and the rule they developed came to be known as 0:04:56.160 --> 0:04:59.760 the Instances and Expense Rule, made a certain amount of 0:04:59.760 --> 0:05:02.720 sem for the period time in which it was developed. 0:05:03.160 --> 0:05:07.640 It essentially said that if the idea for creative work 0:05:07.880 --> 0:05:12.000 is developed by an employer and they ask a non 0:05:12.080 --> 0:05:15.760 employee of which an independent contractor, to develop that idea 0:05:15.880 --> 0:05:19.440 into the actual work, and they pay for those development costs, 0:05:19.560 --> 0:05:23.520 then they have the copyright in the ultimate work that 0:05:23.720 --> 0:05:28.600 is created, not the independent contractor. And so that became 0:05:29.040 --> 0:05:33.479 the rule throughout the United States for any copyright that 0:05:33.880 --> 0:05:37.640 was the result of work by an independent contractor and 0:05:37.839 --> 0:05:40.240 resulted in a copyright under the nineteen o nine Act. 0:05:40.680 --> 0:05:45.039 Is that why Markham lost his case at the district 0:05:45.120 --> 0:05:48.360 court and appeals court level. So keep in mind that 0:05:48.600 --> 0:05:50.960 there was no righting of the nineteen o nine Act 0:05:51.000 --> 0:05:53.960 to terminate an assignment of your copyright that comes in 0:05:54.120 --> 0:05:59.120 nineteen seventy ninety six Act. What the ninety Acts said, 0:05:59.160 --> 0:06:03.640 curiously is we are going to extend, expressly extend this 0:06:03.760 --> 0:06:08.000 right to terminate copyright assignments backwards in time to copyrights 0:06:08.040 --> 0:06:10.720 issues under the nineteen o nine Act. A very curious 0:06:10.800 --> 0:06:15.000 choice because obviously, when people were negotiating that assignment under 0:06:15.040 --> 0:06:17.760 the nineteen o nine Act, they were unaware that there 0:06:17.839 --> 0:06:20.560 might be a right determination in the future and could 0:06:20.600 --> 0:06:23.520 not deal with it now. The Congress did create an 0:06:23.560 --> 0:06:27.440 exception in the nineteen Copyright Act for this section three 0:06:27.520 --> 0:06:30.640 or four right of termination. The exception was that the 0:06:30.800 --> 0:06:34.880 right would not convey backwards in time to a work 0:06:35.240 --> 0:06:38.119 made for higher under the nineteen o nine Act. Now, 0:06:38.160 --> 0:06:40.400 the problem with the way they drafted it was the 0:06:40.480 --> 0:06:43.320 nineteen o nine Act does not contain the words work 0:06:43.440 --> 0:06:46.680 made for higher And so the courts now have been 0:06:46.800 --> 0:06:51.360 left to interpret how do we deal with an independent 0:06:51.400 --> 0:06:55.160 contractor who developed a copyright work under the nineteen o 0:06:55.279 --> 0:06:59.400 nine Act and is now seeking to terminate the assignment 0:06:59.440 --> 0:07:02.080 of that be right to the third party. Do we 0:07:02.200 --> 0:07:06.400 apply current law as it's understood now, or do we 0:07:06.600 --> 0:07:11.000 apply this instances an expense to test which was the 0:07:11.080 --> 0:07:14.040 law under the nineteen o nine Act. And that's the 0:07:14.040 --> 0:07:18.720 conundrum that the lower courts are facing here. And Mr 0:07:18.880 --> 0:07:23.080 Markham and the heirs to his estate lost in the 0:07:23.120 --> 0:07:28.640 lower courts because they believed that the law developed under 0:07:28.680 --> 0:07:30.960 the nineteen o nine Copyright Act. In other words, the 0:07:31.000 --> 0:07:35.040 instance is an expense rule should apply to explain what 0:07:35.160 --> 0:07:38.320 a work made for higher is under the nine Act. 0:07:38.600 --> 0:07:41.880 And they found in the particular instance of this lawsuit 0:07:42.200 --> 0:07:45.600 that what Mr Markham had done with respect to the 0:07:45.600 --> 0:07:48.560 Game of Life was a work made for higher because 0:07:48.600 --> 0:07:52.000 it had been commissioned at the instance of Milton Bradley, 0:07:52.040 --> 0:07:54.520 and they had paid for the development expenses. Therefore it 0:07:54.520 --> 0:07:57.120 was work made for higher and there was no right determination. 0:07:57.400 --> 0:07:59.760 So he lost in the District Court of Rhode Island 0:08:00.160 --> 0:08:04.240 and again in the First Circuit on appeal, and now 0:08:04.400 --> 0:08:07.120 he's going to the Supreme Court saying all those lower 0:08:07.160 --> 0:08:11.280 courts got it wrong. And there's a split in the circuits. 0:08:11.320 --> 0:08:15.880 Although the courts that are most involved in copyright, the 0:08:15.920 --> 0:08:19.360 Second and the Ninth Circuits, have said the rule still 0:08:19.440 --> 0:08:23.720 stands for old works. That's correct. So the state applied 0:08:23.800 --> 0:08:27.480 now is that the Second Circuit, the Ninth Circuit, which 0:08:27.520 --> 0:08:30.680 you correctly identified as the most important courts of appeal 0:08:30.680 --> 0:08:32.760 at the federal level for copy r law, and the 0:08:32.800 --> 0:08:36.839 First Circuit, which covers New England, they have all said 0:08:36.920 --> 0:08:41.240 that we apply this instance and expense rule from the 0:08:41.320 --> 0:08:44.320 nineteen o nine Act to determine what a work made 0:08:44.400 --> 0:08:48.360 for higher is under Section three or four of However, 0:08:48.600 --> 0:08:52.199 the Eleventh Circuit, down in Florida, Georgia's southeastern part of 0:08:52.200 --> 0:08:54.559 the United States, has said none of that can't be right. 0:08:55.040 --> 0:08:57.600 The right to terminate Section three or four is in 0:08:57.600 --> 0:09:00.960 the x Act, and therefore we have to use the 0:09:01.080 --> 0:09:05.120 law of the to determine that right now, June. As 0:09:05.160 --> 0:09:07.720 you know, the Spring Court is not required in the 0:09:07.720 --> 0:09:10.240 Constitution to take every single appeal that goes to It 0:09:10.520 --> 0:09:15.200 has discretionary powers in most cases except four cases between 0:09:15.200 --> 0:09:18.280 two sovereign states Georgia and North Carolina suit each other, 0:09:18.320 --> 0:09:20.199 they have to take that. But all the rest of 0:09:20.200 --> 0:09:23.520 the cases, it's a discretionary jurisdiction. And so you file 0:09:23.600 --> 0:09:26.679 a petition for certain c r which is what the 0:09:26.840 --> 0:09:30.240 Markham State has done here asking the Court to review 0:09:30.280 --> 0:09:33.400 this case because it's important and one of the things 0:09:33.600 --> 0:09:35.920 that the Spring Court looks at to determine whether the 0:09:36.400 --> 0:09:39.840 cases we're taking on appeal is is there a split 0:09:39.960 --> 0:09:42.400 in the circuit courts, Because the Spreme Court is of 0:09:42.440 --> 0:09:45.000 the view that if there's a split in the circuit courts, 0:09:45.080 --> 0:09:49.000 um different law is being applied based on the portion 0:09:49.040 --> 0:09:50.760 of the country that you're in, and we have to 0:09:50.800 --> 0:09:53.960 fix that. There has to be a uniform law across 0:09:54.080 --> 0:09:56.760 the United States, so it doesn't matter which circuit you're it. 0:09:56.960 --> 0:10:00.600 And therefore there's very strong reason here because of that 0:10:00.800 --> 0:10:04.480 circuit split to believe the Supreme Court scoring accept this case, 0:10:05.080 --> 0:10:08.080 and that has been confirmed recently by the fact that 0:10:08.120 --> 0:10:12.080 the Supreme Court asked, in a very unusual manner for 0:10:12.200 --> 0:10:16.200 the Hasbroke Company, which acquired all the rights and interests 0:10:16.240 --> 0:10:21.000 of Milton Bradley, asked Hasbroke Company, who won below. They 0:10:21.040 --> 0:10:24.400 asked them to respond to this petition for certain cry, 0:10:24.840 --> 0:10:27.800 which is usually a signal that the Supreme Court is 0:10:27.840 --> 0:10:32.480 inclined to accept the case. And so my betting is 0:10:32.840 --> 0:10:35.199 that they're going to take this case. And here it's 0:10:35.240 --> 0:10:40.400 sometime next fall. Explain the significance of this case. It's 0:10:40.440 --> 0:10:43.640 not about just the Game of Life has such wide 0:10:44.000 --> 0:10:49.520 repercussions if the rules changed. Oh, this case has millions, 0:10:49.520 --> 0:10:53.040 if not billions of dollars at stake over and beyond 0:10:53.480 --> 0:10:55.480 the Game of Life. There's a lot of money at 0:10:55.480 --> 0:10:57.800 stake ins because Game of Life is the second most 0:10:57.840 --> 0:11:01.440 popular board game of all time, selling something like thirty 0:11:01.480 --> 0:11:03.880 million copies worldwide. So there's a lot of money at 0:11:03.920 --> 0:11:06.760 stake in this case. But the real money at stake 0:11:07.120 --> 0:11:10.720 has to do with all the copyrights from the fifties 0:11:10.720 --> 0:11:14.000 and sixties that are still valid. They were procured and 0:11:14.040 --> 0:11:16.400 issued under the nineteen o nine Act, and so we 0:11:16.480 --> 0:11:22.000 have copyrights for the entire Marvel Comic book universe. All 0:11:22.200 --> 0:11:26.800 those character rights could be terminated by the creators if 0:11:26.840 --> 0:11:30.559 the Supreme Court rules in favor of the market state 0:11:30.640 --> 0:11:33.520 here and says that there is a right to terminate. 0:11:33.800 --> 0:11:37.000 Keep in mind that copyrights issued in the nineteen o 0:11:37.120 --> 0:11:41.920 nine Act exists for years, and so any copyright issued 0:11:41.960 --> 0:11:46.760 between the years nineteen seven nineteen seventy seven are still 0:11:46.800 --> 0:11:49.440 in effect. And we're issued in the nineteen o nine Act, 0:11:49.640 --> 0:11:53.960 and therefore, potentially, now out of the blue, the creators, 0:11:54.200 --> 0:11:57.120 to the extent that they've assigned away their copyright, will 0:11:57.160 --> 0:12:01.360 have a right to terminate. And that's a very big 0:12:01.400 --> 0:12:04.800 deal given the number, the large number of copyrights issued 0:12:04.880 --> 0:12:09.720 during that fifty year period. I find the ability to 0:12:09.800 --> 0:12:13.520 recapture the copyright a little bit troubling because so much 0:12:13.679 --> 0:12:17.960 goes into the success of a board game, let's say, 0:12:18.000 --> 0:12:22.600 beyond just its creation. There's the marketing, there's the promotion, 0:12:22.960 --> 0:12:27.320 the packaging, the production, the distribution, a host of things. 0:12:27.800 --> 0:12:30.880 And for someone to be able to come back after 0:12:30.920 --> 0:12:34.679 all that's been done and recapture the copyright because I 0:12:34.720 --> 0:12:37.080 didn't know about the success of the products, so they 0:12:37.120 --> 0:12:41.800 didn't know about their bargaining position. It seems unfair, and Junior, 0:12:41.800 --> 0:12:44.480 you're exactly right, and it extends beyond just the game 0:12:44.480 --> 0:12:47.720 of life and what's gone into making it so popular. 0:12:48.120 --> 0:12:50.640 I mean, think about your typical movie. Yes, you have 0:12:50.679 --> 0:12:53.920 to acquire the character, right, but somebody still has to 0:12:54.040 --> 0:12:56.080 write the story. The actors have to perform at the 0:12:56.080 --> 0:12:58.760 director has to direct it, the editor has to edit it, 0:12:58.800 --> 0:13:01.040 the found editor has to bring in the sounds. The 0:13:01.120 --> 0:13:03.640 distribution company has to get out there marketing and get 0:13:03.679 --> 0:13:06.560 into theaters make it popular. All those things are things 0:13:06.600 --> 0:13:09.080 that the owner of the copyright and the character did 0:13:09.080 --> 0:13:12.320 not do to make a fame. And that owner of 0:13:12.360 --> 0:13:15.400 that character copy right now will have an opportunity to 0:13:16.000 --> 0:13:19.280 terminate their assignment, which will stop any future movies being made, 0:13:19.520 --> 0:13:23.200 and to renegotiate the right. And I don't think Congress 0:13:23.360 --> 0:13:26.320 fully thought through what they were doing here when they 0:13:26.360 --> 0:13:30.400 put section three or four in the They clearly bought 0:13:30.440 --> 0:13:33.520 hook line and sinker all these tales of low from 0:13:33.720 --> 0:13:36.480 artists and writers that they were being taken advantage of. 0:13:36.880 --> 0:13:39.760 And there is some of that that went on but 0:13:40.440 --> 0:13:44.080 there was also a lot of just good old honest 0:13:44.400 --> 0:13:48.800 bargaining that went on. And if the purchasers of those 0:13:48.840 --> 0:13:52.640 assigned copyrights had known that there was this right to 0:13:52.760 --> 0:13:55.720 terminate in the future, they would have factored that into 0:13:55.720 --> 0:13:58.880 their economic analysis and not paid as much in the 0:13:58.920 --> 0:14:02.040 first place. Are they would have bargained in the first 0:14:02.080 --> 0:14:05.640 place for the right to give up that termination in 0:14:05.679 --> 0:14:09.040 the future. And because they didn't know that this termination 0:14:09.160 --> 0:14:12.840 right existed in nineteen sixty, for example, when the copyright 0:14:12.920 --> 0:14:15.120 Game of Life was a sign, they could not possibly 0:14:15.200 --> 0:14:18.640 negotiate that way. And so it is in some respects 0:14:18.760 --> 0:14:22.720 very unfair to the owners of these copyright assignments to 0:14:22.840 --> 0:14:26.640 now go back in time and force a renegotiation. I mean, 0:14:26.720 --> 0:14:31.560 with this conservative court disturbed the Marvel universe in this way. 0:14:32.240 --> 0:14:36.080 It's a great question, June, because we are at a 0:14:36.280 --> 0:14:41.080 nodal point in Supreme Court jurisprudence with respect the copyright law. 0:14:41.720 --> 0:14:46.560 The two great champions of copyright law at different ends 0:14:46.560 --> 0:14:51.480 of the spectrum, for Justice Ginsburg and Justice Bryer. Justice 0:14:51.520 --> 0:14:56.280 Ginsburg passed away she believed in a very strong protection 0:14:56.360 --> 0:14:59.200 for copyright. We can see how her voice was missed 0:14:59.200 --> 0:15:02.480 on the Court during the Oracle case, which was decided 0:15:02.920 --> 0:15:06.840 the last term, in which the side that believed in 0:15:06.880 --> 0:15:10.760 a weak copyright prevailed. Because she was not there to 0:15:11.040 --> 0:15:14.200 articulate the need for a strong copyright system. Justice Bryer, 0:15:14.240 --> 0:15:17.200 on the other hand, has always been her antagonist with 0:15:17.240 --> 0:15:19.960 respect the copyright laws. He has always argued in favor 0:15:19.960 --> 0:15:23.000 of a weaker copyright protection system. We saw him prevail 0:15:23.120 --> 0:15:26.960 in the Oracle case last term. If this case involving 0:15:27.400 --> 0:15:29.920 the Game of Life would come up while he was 0:15:29.960 --> 0:15:32.920 still on the court, I would say that there's a 0:15:33.040 --> 0:15:37.000 very significant risk that he would overturn or certainly try 0:15:37.080 --> 0:15:39.280 to overturn and get the votes in the court the 0:15:39.360 --> 0:15:42.080 lower court decision and say that there was a termination 0:15:42.200 --> 0:15:45.680 right in the copy right. It is likely that this 0:15:45.720 --> 0:15:48.760 case will not come before the Spring Court until next 0:15:48.760 --> 0:15:53.160 October at the earliest, and my understanding is that just 0:15:53.320 --> 0:15:55.320 as Brides likely to be off the court at that point, 0:15:55.560 --> 0:15:58.360 in which case we will have a Supreme Court that 0:15:58.560 --> 0:16:03.040 is truly bereft of any deep knowledge or experience with 0:16:03.280 --> 0:16:06.640 the copyright laws to the United States, and we will 0:16:06.680 --> 0:16:10.240 have to see who steps up to fill the spots 0:16:10.640 --> 0:16:14.200 less vacant by Justice Ginsburg, Justice Brier in the copyright 0:16:14.200 --> 0:16:16.760 field of the Supreme Court, and it's anybody's guests how 0:16:16.800 --> 0:16:19.720 this court might rule on this case. I will tell 0:16:19.760 --> 0:16:23.840 you this, If the Supreme Court agrees to take this case, um, 0:16:23.920 --> 0:16:28.160 we are going to see a flood of amacus briefs 0:16:28.240 --> 0:16:32.600 taking one side or the other. Certainly, the owners of 0:16:33.200 --> 0:16:37.400 assignments of nineteen o nine Act copyrights will be arguing 0:16:37.440 --> 0:16:44.040 to affirm the decision below, and the assignees of nineteen 0:16:44.040 --> 0:16:46.920 o nine Act copyrights are going to be flooding the 0:16:46.920 --> 0:16:51.160 courts with a meekus briefs arguing that there should be 0:16:51.200 --> 0:16:55.040 a right of termination. It will arguably be one of 0:16:55.240 --> 0:17:00.960 the busiest dockets that the Supreme Court has seen years 0:17:01.000 --> 0:17:04.480 because of the vested interests and the sheer amount of 0:17:04.520 --> 0:17:08.160 money at stake. It will be fascinating to see what happens. Terry, 0:17:08.240 --> 0:17:12.679 thanks so much. That's intellectual property litigator Terence Ross of Katon. 0:17:12.920 --> 0:17:19.160 I'm June Gross. When you're listening to Bloomberg. After years 0:17:19.200 --> 0:17:23.439 of public humiliation over sexual abuse allegations that rocked the 0:17:23.480 --> 0:17:28.280 British royal family, Prince Andrew is sparing himself a courtroom 0:17:28.359 --> 0:17:33.680 showdown by settling with his accuser. Andrew has consistently denied 0:17:33.760 --> 0:17:36.560 Virginia Drew Freese claim that he was one of several 0:17:36.560 --> 0:17:40.480 men to whom Jeffrey Epstein lent her for sexual abuse 0:17:40.520 --> 0:17:43.040 when she was a teenager. His failure to get the 0:17:43.080 --> 0:17:47.480 lawsuit dismissed last month set off a cascade of repercussions, 0:17:47.840 --> 0:17:51.399 leading to Buckingham Palace stripping him of honorific titles and 0:17:51.480 --> 0:17:55.040 royal patronage. Is Andrew has agreed to settle the case 0:17:55.080 --> 0:17:58.040 for an undisclosed sum. Here to tell us more is 0:17:58.080 --> 0:18:02.960 Bloomberg Legal editor Anthony Lynn. Did this settlement come as 0:18:02.960 --> 0:18:06.960 a surprise to people who are watching the case? I think, 0:18:07.440 --> 0:18:10.800 ultimately not. I do think it was a surprise how 0:18:10.840 --> 0:18:13.000 early it came. I think a lot of people thought 0:18:13.000 --> 0:18:14.960 maybe this would get a little closer, a little further. 0:18:15.200 --> 0:18:18.040 But a lot of people who have been following, you know, 0:18:18.080 --> 0:18:22.240 litigation relating to Jeffrey Epstein did not expect this ultimately 0:18:22.240 --> 0:18:24.080 go to trial. So ultimately the fact that it was 0:18:24.119 --> 0:18:27.440 settled wasn't that surprising. But he'd been taking a sort 0:18:27.440 --> 0:18:32.879 of scorched earth approach to her claims, indicating he wanted 0:18:32.920 --> 0:18:37.120 to vindicate his name at trial. Yeah, I think certainly 0:18:37.119 --> 0:18:41.800 the litigation strategy right up until the settlement was pretty 0:18:41.840 --> 0:18:46.000 aggressive in terms of saying she consented to some aspects 0:18:46.080 --> 0:18:48.639 of this, you know that she was out for money. 0:18:48.680 --> 0:18:50.800 But clearly there was a turning point in the sense 0:18:50.840 --> 0:18:54.640 of when the judge basically denied his motion dismissed the case. 0:18:55.000 --> 0:18:58.200 So he was facing a number of issues. For instance, 0:18:58.200 --> 0:19:00.440 he would have had to sit for a deposition soon. 0:19:01.080 --> 0:19:03.800 You know, they were getting this evidence from, for instances, 0:19:03.920 --> 0:19:07.840 his former personal assistant. So there were these sort of immediate, 0:19:07.960 --> 0:19:09.879 you know, obstacles in his path that I guess he 0:19:09.920 --> 0:19:13.919 wanted to avoid. Did the judge ever rule on his 0:19:14.760 --> 0:19:19.880 argument that this litigation was covered by a release that 0:19:20.040 --> 0:19:24.159 Dreffrey signed as part of a settlement with Epstein, No, 0:19:24.320 --> 0:19:27.119 the judge never explicitly ruled on that. So that was 0:19:27.160 --> 0:19:29.960 the core argument that he put forth in his motion 0:19:30.000 --> 0:19:32.760 to dismissed that this two thousand and nine settlement between 0:19:32.800 --> 0:19:37.960 two for and Epstein Um included him, and Duffer's lawyers 0:19:38.440 --> 0:19:41.199 said that there was there was no possible way that 0:19:41.240 --> 0:19:43.960 he could have been included in that as a potential defendant. 0:19:43.960 --> 0:19:49.320 The agreement said all potential defendants. UM, and the judge 0:19:49.359 --> 0:19:52.120 basically said it was it was too early to rule 0:19:52.200 --> 0:19:55.720 on that because there was a there was more evidence 0:19:55.800 --> 0:19:59.760 to be discovered on that basically, and so that that 0:20:00.280 --> 0:20:03.800 he basically reserved judgment on that. It seemed as if 0:20:03.920 --> 0:20:05.840 this was going to be and he said, she said, 0:20:06.880 --> 0:20:10.800 I mean, essentially, I think it's it's um, there's no UM, 0:20:10.840 --> 0:20:14.320 there's no dispute that he was friendly with Epstein and 0:20:14.359 --> 0:20:19.560 that he was apparently very close friends with Glenn Maxwell, 0:20:19.640 --> 0:20:23.399 who was you know, Epstein's former girlfriend who was just 0:20:23.520 --> 0:20:29.359 convicted in Manhattan of sex trafficking. So UM, you know, 0:20:29.400 --> 0:20:32.560 there there is a lot of you know, he can't 0:20:32.560 --> 0:20:35.600 deny that he knew them and that you know, and 0:20:35.640 --> 0:20:38.959 that they were involved in this, uh, in this scheme. 0:20:39.359 --> 0:20:45.440 But um, but whether he actually abused Virginia Duffrey. I mean, 0:20:45.720 --> 0:20:47.840 they are the only two people I think who could 0:20:47.880 --> 0:20:50.720 say one we or the other. And why wasn't this 0:20:51.320 --> 0:20:56.040 claim barred by the statute of limitations. Well, there is 0:20:56.119 --> 0:21:01.080 a law that was passed in New York at UM 0:21:01.119 --> 0:21:04.800 that extended the time for people who were um sort 0:21:04.800 --> 0:21:09.720 of childhood victims of sexual abuse to bring claims and 0:21:09.800 --> 0:21:13.520 that's actually why Duffrey, I think sued when she did 0:21:13.760 --> 0:21:18.720 UM these claims that she's she's made them publicly before. UM. 0:21:18.760 --> 0:21:23.080 But but yes, she specifically references the fact that New 0:21:23.119 --> 0:21:25.879 York passed this law. I think in the wake of UH, 0:21:26.040 --> 0:21:28.720 you know, I think, like Harvey Weinstein and some of 0:21:28.760 --> 0:21:31.600 the other me two cases, do you know why she 0:21:31.760 --> 0:21:35.959 wasn't called to testify against Maxwell? Well, I don't know 0:21:36.040 --> 0:21:41.800 why specifically. UM. I think there are potentially you could 0:21:41.800 --> 0:21:43.919 you could see that there might have been issues with 0:21:45.400 --> 0:21:48.640 some of the testimony that other witnesses had brought up. 0:21:49.080 --> 0:21:53.040 There was one witness who mentioned that Gruffrey was the 0:21:53.080 --> 0:21:57.440 one who brought her into Maxwell and Epstein's world for instance. 0:21:57.720 --> 0:22:01.880 UM so and and this is something that Andrew has 0:22:01.920 --> 0:22:04.960 alluded to and even more publicly. I guess Alan Dershwitz, 0:22:05.000 --> 0:22:08.280 who Virginia drew for his o sol suing and accusing 0:22:08.400 --> 0:22:13.120 of similar conduct, though he has denied it, UM has 0:22:13.119 --> 0:22:17.840 aggressively raised that fact in his defense, saying that that 0:22:18.160 --> 0:22:21.280 this shows that she's culpable in her own way. In 0:22:21.280 --> 0:22:25.840 the settlement, he admitted to no wrongdoing, but his tone 0:22:26.040 --> 0:22:30.080 was quite different from what we've heard from him before 0:22:30.680 --> 0:22:35.119 describe a tone that was conciliatory, I I thought, in 0:22:35.200 --> 0:22:39.159 the sense of um, you know, compared especially to the 0:22:39.240 --> 0:22:42.919 language in his motion dismissed last October and in the 0:22:42.960 --> 0:22:47.720 more recent UM answer formal answer to the to the complaint, 0:22:47.760 --> 0:22:50.879 which he only had to file after losing on the 0:22:50.880 --> 0:22:54.560 motion to dismiss, where he specifically said he was going 0:22:54.600 --> 0:22:59.320 to raise these defenses like consent. Uh. He specifically raised 0:22:59.640 --> 0:23:04.679 legal tense of unclean hands, um, you know, basically suggesting 0:23:04.960 --> 0:23:08.600 she she was as fault in this as well. She's 0:23:08.640 --> 0:23:13.080 not you know, a blameless person in in in in 0:23:13.160 --> 0:23:16.359 her own sexual abuse, which um, you know, it's pretty 0:23:16.359 --> 0:23:20.800 harsh defense to bring up and and um. In this 0:23:20.800 --> 0:23:24.840 this latest statement, he is commending her for her bravery 0:23:24.880 --> 0:23:27.040 and you know, and and saying, you know how much 0:23:27.080 --> 0:23:29.639 sympathy has for for all the victims, and you know, 0:23:29.720 --> 0:23:31.959 part of the agreement is that he's going to make 0:23:32.000 --> 0:23:37.159 a substantial donation to her charity, which is UH is 0:23:37.440 --> 0:23:41.960 supposed to support victims rights. The Telegraph in the UK 0:23:42.200 --> 0:23:45.000 is reporting that the sum will be more than twelve 0:23:45.040 --> 0:23:50.320 billion British pounds, which is more than he supposedly has. 0:23:51.280 --> 0:23:54.000 I mean, we've certainly reported that his his net worth, 0:23:54.040 --> 0:23:56.119 at least I believe it was some years ago, was 0:23:56.280 --> 0:24:01.280 estimated at five or six million pounds um. You know, 0:24:01.320 --> 0:24:04.160 I certainly seen the British papers have suggested that Buckingham 0:24:04.200 --> 0:24:07.800 Palaces is paying for this. So I don't know where 0:24:07.800 --> 0:24:10.960 that money is coming from um or in fact, whether 0:24:11.040 --> 0:24:14.879 that's that amount is accurate. Okay, thanks Tony. That's Bloomberg 0:24:14.920 --> 0:24:20.680 Legal editor Anthony Lynn counterfeits Gerald's former global co head 0:24:20.720 --> 0:24:25.760 of equities helped violate SEC rules on recording commissions on trades. 0:24:26.359 --> 0:24:29.359 That was a jury's verdict after a week long trial 0:24:29.760 --> 0:24:32.399 at which Adam Matta Such and other traders trying to 0:24:32.480 --> 0:24:36.000 cast blame on a permissive culture at the firm. Joining 0:24:36.000 --> 0:24:39.560 me is Bloomberg Legal reporter Crystal Mesh. What was he 0:24:39.640 --> 0:24:42.719 on trial for? So he was on trial for, It's 0:24:42.800 --> 0:24:45.239 kind of interesting. He was not. He's not accused of 0:24:45.320 --> 0:24:49.720 violating rules himself. He's accused of helping the firm avoid 0:24:49.880 --> 0:24:53.520 SEC rules that you know require broker dealers to provide 0:24:53.720 --> 0:24:58.440 detailed compensation information so that you know, customers and regulators 0:24:58.480 --> 0:25:02.960 whoever can identify who's bociated with what trades. So was 0:25:03.040 --> 0:25:07.719