Author: Leslie Burns

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We Are All Afraid

First, an apology for not posting anything for a bit. In my defense, I have been extraordinarily busy: on top of my practice, Im prepping for a move next week (packing is such a time-sucking chore) and have been hosting my niece for a couple of weeks while she does an externship in emergency veterinary medicine.

Im very proud of my niece. I have no right to be as Ive had nothing to do with her upbringing beyond sending presents and good thoughts across the country (shes from Atlanta and goes to the University of Georgia School of Veterinary Medicine in Athens, GA), but Ill claim the privilege of relation. Contrary to the stereotype millennial, she has worked hard to get where she is. In case you werent aware, getting into vet school is harder than human medical school–there are many fewer schools and the competition is fierce. She will be awarded her doctorate next spring.

My niece reminds me of the value of work and a good attitude. She could have been daunted by the odds, by the amount of work, by the cost of school, by a whole host of things that could go wrong, but she did it anyway. I’m sure she was afraid, more than a bit, of failing at many points along the way. But she did it and shows every sign of becoming a very good and successful vet–maybe even specializing in surgery. Wow!

She, and my upcoming move, remind me of how facing our fears and doing (whatever) anyway is the best route to success. Speaking of which, I wrote the following in 2006 and it holds true today…

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Ive written about fear in one of my Manuals[1], but there is something about fear and business that I may not have been clear about: we all have it. Every single businessperson has fearsuccessful people do, just as less successful ones do. The difference is in how one deals with the fear.

If you are afraid and own up to it, face it, and challenge the fear, you are more likely to be successful. Some call that courage, and if that word works for you, then use it. What it is, whatever you call it, is taking risks and being open to living with the results.

We do that every day. Every day we take a risk driving (accidents), playing a sport (hurting yourself) or even just eating (food poisoning). Theres a risk in taking a shower (you could slip) or taking some medication (side effects) and there are big risks in falling in love (a broken heart). And yet we do these things regularly. Why? Because the payoffs are worth it and we know that we can live with the results, even if they are painful.

Can you imagine never being in love? Sure, youd never run the risk of getting hurt. You could protect your heart and rationalize it by saying that over 50% of relationships break up, etc. Thatsoundsreasonable. But, youd never know the joy of an intimate relationship, or passion, or the sublimely absolute trust that someone is totally there for you even in your lowest moment.

So it is in business. You can play it safe, not take risks, and be like most everyone else who is trying to do the same thing, or you can try something new and risky, but whichmightpay off in a big way.

Did you become a creative to do what others have already done, or did you do it because you see things differently and/or you want to express something more in your work?

Take the riskbe your whole self and show your true vision. Be passionate. Put yourself out there. Yes, you may fall on your face, but youll be truly alive in the process and, more importantly, you can only be great if you try.

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[1] For those of you who dont know, when I was a rep and consultant (as Burns Auto Parts), I use to post and send to clients articles I called Manuals.

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P.S. These days we have a lot of external fears–things over which we feel we have almost no control. For many of us our country (USA) is headed in not only the wrong direction, but a truly dangerous one. We can’t let those fears stop us either. Facing these fears may mean standing up to the racist/homophobe/misogynist screaming at you without turning to violence, or running for office, or protesting, or protecting DACA kids and immigrant families of all kinds. I encourage everyone to do the right things, to stand up for the truly American way and not this hateful MAGA hypocrisy, and to know that we can and shall overcome.

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Fear and Professionalism, v.2.0

As I said in my last post, I want to share some of my previous writings on the subject of fear and professionalism. Today, a post that is very near and dear to me, being that it was made on a very important day in my life: the day I officially became a lawyer.

What I didn’t write at the time was that, when this happened, I was in the middle of a humiliating break-up and mentally at a spectacularly low point. I was looking for a place to live back in San Diego (I had moved to LA right after taking the Bar), was middle-aged, post-law-school (and post-relationship) flat broke, and quite literally I had no one physically near to celebrate with me on this day. I had considered skipping this big ceremony, fearing I would stand out for being old(er), utterly solo, and potentially looking like a loser if I ran into people from school who knew about the relationship and move but not the break-up and return. I felt like I had a big neon “PATHETIC” sign above my head and was afraid I’d burst into tears if anyone spoke to me. Of course, this was all only in my head, but it felt pretty real (and raw) at the time.

Obviously, I screwed up my courage, drove down, and attended the ceremonies. I chose to put a smile on my face and stay mindful of the event itself and all its parts. I’m so glad I did. If I hadn’t faced the fear, I would have missed out so much I hope always to remember. Here is just a bit of what I learned that day.

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Fear and the Law and the Arts[1]

Today, I took my oaths and became a real, licensed attorney. The ceremonies and speeches were rather moving and, often during the speeches, I thought about you: the photographers and other creatives with whom I have worked for so long. Surprisingly, much of what was said applied to you as well as us, the new attorneys.

There was one speech in particular that really struck me. One of the officers of the State Bar of California talked to us about fear in the profession. He explained that he had suffered from severe anxiety after being in combat, which resulted in him being afraid of speaking in public. He was afraid even to be in a room with more than one or two others. He was terrified of trying to communicate with anyone. And, during all this, he was applying for law school, wanting to pursue a profession that required him to do everything that, frankly, scared the hell out of him.

He explained that, over time, he read everything he could about fear to try and figure out what was going on (this was before we understood about PTSD). After a while, he began to realize that whatever he feared was inevitably in his path to success: from simple things like asking a girl out to his desired profession. No matter what he wanted, he’d have some fear block his path. But other things didn’t scare him and, interestingly, those things were not on his path to success. He realized that if he let the fear win, he’d never get what he wanted, so he did what he needed to, scared out of his wits as he did it.

Then, he turned and gestured to the long row of judges (federal and state appellate, about 12 or so of them) seated behind him on the dais. He said (as close as I can remember) They are afraid. Every day, they are afraid. Every day I am afraid. Every day, every one of us is afraid. He then said, essentially, that we need to lean into our fear to get where we want to go. He said that, for him, he knows now that if something scares him, that is his sign that he needs to do whatever that scary thing is. If he avoids it, he will be avoiding something that will bring him more success.

I loved that speech. It was wonderful, honest, and I knew from my own experiences that he was right. I know he was right for me and for you. Lean into your fears if you want to be successful.

There was one other thing that struck me in the speeches that I thought I should share with you. As we were about to take the oath to be admitted to the Federal District Court for the Southern District of California, an 80+ year old Federal Judge said, with deep sincerity, that whatever we do in our lives and careers, we must not stop being idealists. When he said that, I was brought to the verge of tears because, throughout my life, I have been called an idealist. This was never said as a positive, it was always said like it was something bad. Well, I am an idealist and I’m not going to apologize for it ever again[2].

I think all artists are also idealists. You have to be to do what you do. If you weren’t, if you didn’t hold the belief that art, your art, is of enough value to make a living making it, youd be an accountant or firefighter or whatever. Hold onto that idealism and don’t you apologize for it either.

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[1] Originally written and posted on June 1, 2011.

[2] For the record, I’ve stuck to that pledge. Since writing this piece I’ve received vile threats and other online bullying, but I’m proud to stand for strong copyright and my clients’ rights.

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On Amateurism v Professionalism, and Fear

This morning, I read this Farnam Street Blog post about the difference between amateurs and professionals. What I was going to write today went out the window.

I know lots of people, especially (but not exclusively) creative people, who call themselves professionals but who act and think like amateurs. It’s something I wrote about often when I was a rep and consultant; now that I’m an attorney, I see it all the more. The gist: fear versus reality.

As Mr. Parrish points out in the piece, people working from a fear-based mindset rather than a reality-based one make poorer choices and behave in limiting ways. I know this from personal experience. I was reared to respond to fear (risk-averse is an understatement!) rather than accept reality and use that reality to reach and work for more. In fact, the first half of my life (so far) was lived that way.

Then, I made a conscious change. It started small but, as Dr. Seuss might say, it grew and it grew. Now, when I look back on my life, I see that I have accomplished a lot and been more successful in many ways than I ever thought I would be. Why? Because I took risks and I pushed myself to do new things. I didn’t let the fear win.

With that in mind, over the next couple of weeks Im going to re-publish some of my previous writings on fighting fear and being a successful creative. I hope you’ll find them helpful. I’ll warn you, sometimes the language will not be entirely safe for work and some of you may not hire me because of it.

But, I’m not going to be afraid of that.

Here is the first, from June 19th, 2013:

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What Are You Waiting For?

Yesterday, I saw that a promising reporter was killed in an auto accident in Los Angeles. He was 33. This morning, there was news a best-selling novelist had died of an aggressive cancer. He was 47. And now, as I sat down to begin writing this piece, the news confirmed that James Gandolfini (star of The Sopranos) had died. He was 51.

I share this data with you not to depress but to remind you that life is unpredictable and often way too short. So, what are you waiting for?

Are you afraid of failing? Why? What is the worst that will happen? You’ll lose your home and end up living under a bridge someplace, and you have kids?

Lame excuse.
You read me right, that is just lame.
Guess what, you can do everything right and that dark future can still happen.

Or you can do everything right and get hit by a bus. Or have a heart attack or get cancer or, well, just about anything.

You have one chance at this life (well, one conscious one, if the Hindus and Buddhists, et al., are right) and you have no control over when it will end. So, I ask again, What are you waiting for?

You chose to be an artist and with that came the requirement that you have faith. Not faith in a god (not that you cant have that) but faith in yourself, in your art, and that somehow you’ll make it all work. That’s fabulous. It’s amazing. It’s actually empowering, if you stop shaking in your boots and look at it.

Being an artist requires you actually acting on that faith. You can’t say I choose to be a photographer/designer/writer and then play it safe. You have to do. You have to leap. You have to try and fail (or succeed) and try again and fail (or succeed) and keep doing that over and over again.

For the rest of your life.
That is the bargain you agreed to when you chose to be a professional artist. You have to make, and do, and (sometimes) make do.

The one thing you cannot do is wait for things to be perfect before taking the next step. I’m sick of hearing artists say I can’t send the promo because the site isn’t perfect or I’m not sure my list/promo/portfolio/edit/studio/haircut is perfect so I can’t____. I can’t. I can’t. I can’t.

If you make some excuse for not doing, then get a real fucking job because you dont deserve to be an artist. You dont have the guts.

I say that with love (you know that, I hope, by now).
But it is true.

Frankly, it’s true for any profession. It’s as true for me as it is for you. We have to get out there and do. We can’t be bound up by the fears of getting stuff wrong (which, by the way, is much worse in my profession than yours) or failing. We have to do and leap and try. Every bloody day.

Not only will doing this give you your best shot at being successful (and it will), it will make you happier in the process. Following your dream, doing what you love, isn’t that worth the risk of trying? Why be an artist if you never get to make your own art?

Life is (sadly) short for too many people. We don’t know when our last breath will come. No matter how well we treat our bodies, it is ultimately out of out control when Death will come. And each of you deserves to have loved the life you have. The only way for that to happen is to try, to do, to make your art, to follow your dream, to risk, to fail, and to do it all again the next day.

So, what are you waiting for?

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Copyright Small Claims: A Bad Solution to a Non-Problem

Many of you may have heard about the small claims copyright system that is being encouraged by several organizations. Many of those groups are artists groups and, while they have very good intentions, the idea of a small claims system for copyright is, in my opinion, a very bad one. It is a fix to a problem that does not exist. And, in exchange, artists are going to lose rights and remedies they should not give up.

Here’s the underlying argument that proponents of a Copyright Small Claims system share, over and over again: litigating a copyright suit costs a plaintiff at least tens of thousands if not over a hundred thousand dollars.

That argument is not correct in so many ways. Its a scare tactic and too many artists groups are buying into it. Allow me to explain the errors.

First, assuming that a case is litigated all the way through trial and judgment is an unfair metric for the average cost. Why? Because according to the Federal Courts own statistics (the most recent ones I found were for a 12-month period ending March 31, 2016), only .07% of all copyright cases filed are terminated (settled or a judgment is entered) during or after trial. To put that into more concrete terms, in that 12 months there were 4836 copyright cases filed in the USA; of those, only 32 were terminated either at trial (settlement after trial started but before judgment entered) or at the end of trial (judgment entered). In the 12 months ending March 31, 2015, it was 26 out of 4253 filed (.06%).

In other words, the chances that a case is fully litigated are incredibly slim! In fact, in the 2016 statistics, 37% of the filed cases are terminated before there is any court action and another 54% are terminated before the pre-trial phase (that is, by the close of discovery). So, 91% of copyright cases get settled by the close of discovery and virtually all the remaining cases settle before trial.

What does this mean? It means the cases that get fully litigated are really hard cases. Parties don’t take a case to trial unless either someone refuses to accept that s/he/it is sitting on a loser (rare) or there is a real question of how the matter might turn out (almost always). When there is a real question especially, then there are lots of experts and more extensive discovery overall and, well, of course the costs are going to be large!

But, going back to my original point, that just doesnt happen hardly at all. Instead, most parties are smart enough (or at least their lawyers are) to settle and to settle pretty early in the process. Usually there have already been pre-litigation settlement negotiations of some sort so when a suit is actually filed, the parties generally know that this is serious now and get their shit together and work it out.

Often, this just happens on its own. In my own experience, I’ve seen it happen over and over–a case gets filed after months of trying to get the defendant to settle, the defendant (finally) gets a lawyer, the lawyer wisely advises Settle, now! and we work it out. And we should, frankly. Most copyright cases are pretty clear cut and most of them should settle before suit is even filed but, if not, then shortly after.

When the parties don’t settle on their own, though, the federal courts have put in mandatory Alternative Dispute Resolution (ADR) procedures into the litigation process. These processes save the court time and money and it saves them both for the parties, too. For example, here in the Southern District of California, we have a Early Neutral Evaluation (ENE) system that means no later than 45 days after the defendant(s) file its answer(s), the parties meet with the Judge Magistrate to look at the case and try to work it out. Often the case will settle at the ENE and, even when it doesn’t, cases usually settle shortly after. This all happens before you get into discovery (or it has barely started in some cases) and so costs are very limited.

The second major error in the scary math is that proponents of Small Claims don’t mention that, overwhelmingly, plaintiffs win copyright suits that go to trial. The latest statistics I saw on that (2009) put it at over 80%. When you win a copyright suit, you may be awarded your attorneys’ fees and costs (assuming you have registered your copyright before the infringement). While that award isn’t guaranteed, courts tend to make that award when it is a smaller plaintiff (like an individual artist) bringing suit, particularly when there is not a really unusual legal question at issue and/or the infringer is a big company that should know better. So, if you go through trial you have a very good shot at winning and, if you do win, you have a shot at having much of the out-of-pocket reimbursed. If your attorney is working on a contingency-fee-basis, you haven’t even been paying her yet anyway (just paying costs, like filing fees, etc.).

Okay, to recap, filing and litigating a copyright suit usually does not cost a terrifying pile of money. It is rare when it does and most of those suits are complex cases (and, by the way, often ones with large corporate plaintiffs like a movie studio). Small artists don’t need a system to reduce those costs because it is unlikely any small artist will get hit with them by filing an action[1].

What do small artists give up if they use the proposed Small Claims system? They give up their right to a jury trial (very bad thing), appeals are very limited, and most disturbingly, the system would limit the amount of money they can win–in fact, the maximum is cut in half (again, assuming the work is properly and timely registered). That depression in awards will affect those who opt out of the Small Claims system, too, even though the rulings of the tribunals would not be precedential. Artists would be giving up way too much for a protection they don’t even need!

The final argument made for a Small Claims system is that attorneys won’t take on small matters on contingency. That is just untrue. Some attorneys might not, but I know plenty who do, including me. In fact, that was a big part of my mission in becoming an attorney: to serve artists. Sure I can’t take every case, but I take a lot of very small ones. If the work is timely registered and the defendant looks solvent, there is a good chance I’ll take the case.

So, rather than give up your rights, use them to your advantage! Register your works, find an attorney who will work with you (it doesnt have to be me–I can recommend others, too), and go after infringers.

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[1] Before you even go to the Monkey Selfie case and the photographer being bankrupted by it: the photographer did NOT file that suit–he has been the defendant in a suit filed by PETA.

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Don’t Lash Out

I heard about a case recently that made me think about all the people, especially the small artists, who get angry when they find a (potential) infringement and go onto social media to rip the, um, lets just call em badguys. Short answer is, even though you think it will help or at least make you feel better, youd be wrong. In fact, you could be inviting a lawsuit filed by the badguys.

Heres the very generalized skinny on the case (because really, unless you are a geeky lawyer like me, it is a dull read). One business (a kind of review site) publicly published that another business was a copyright infringer and that it had adult movies on its site. That arguably hurt the second business, so that onesued the first for various things that roughly amount to the business version of defamation. The court threw out that suit, under the California Anti-SLAPP law, which which exists so that people cant use the judicial system as a way to silence legitimate speech.

Okay, you may be thinking, the allegedly name-calling business didnt lose so whats the big deal? The big deal was that it wasnt a slam-dunk. Proving that the publication of something (potentially) defamatory was protected speech and that the lawsuit had to be dismissed under Anti-SLAPP wasnt easy. Similar cases have not been dismissed and you don’t want to be one of those.

Lots of people think they have a First Amendment right to say[1] whatever they want about whomever they want. Trouble is, that isnt so. There are limits. You cant defame someone (or a business), for example. And if someone sues you in California[2] for what you said, then, to get the case kicked out, you are going to have to prove that your speech was (1) an exercise of your First Amendment free speech right and (2) that it was made in connection with a public issue or an issue of public interest. Thats a pretty high bar to get over. In fact, youre going to have to show that the subject person (business) was famous/a pubic figure, or that the subject matter of the speech is of great interest to enoughpeople not affected by the case, or that the topic was of general widespread interest. Just because you and your drinking buddies think something is important isnt going to cut it.

After you, as the defendant in the original law suit, prove all that, then the other side (plaintiff in the defamation suit) gets a chance at a save–if it proves that it would probably win, then, even after you proved the above, the case will not be dismissed. See, not so easy.

So, going back to anaggrieved artist who tweets about the evil bastard Joe Doe who stole my illustration and then, worse, follows up with No one should shop at his store because he is a lying thief! well, that artist may be facing a lawsuit for those tweets and one s/he may not win. Think about that second part of the Anti-SLAPP–the potential save for the plaintiff–maybe Joe Doe had an implied license or a legitimate fair use defense that you, as a non-lawyer, didnt know would gut your infringement claim.

Better to sit on your tweeting/social media hands than run the risk of getting sued. Even if you did win, youd have to go through the unpleasantness of litigation. Instead, register your copyrights regularly and, if something gets used without your permission, talk to an attorney about your infringement claim and what your options are.

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[1] And by say I mean speech made in any medium–wrote, recorded, painted, shouted in a public space, etc.

[2] Some other states have similar laws.

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Forming an Entity: The Other Stuff

I wrote recently on some of the copyright considerations related to running your business as an entity. Today, I want to address some of the other things you have to do whenyou decide to form an entity. First, a quick reminder that I am speaking generally here and with California law in mind: each state has its own laws so your mileage may vary, so to speak.

Most creative pros start their businesses as sole proprietorships. As Ive explained before, there are no formalities required to do that, outside of maybe having to register a fictitious business name (DBA) with your county or city. Forming an entity requires filing various papers with the state, but after that is done, are you done? Not by a long shot.

Assuming youve been running your business like a business, you may have things like business banking accounts, credit cards, or insurance policies. When you have a new entity, you are going to have to convert all of these to the new entity. In some (probably most) cases, youre going to have to close existing accounts and open new ones. Youll also have to get new checks printed.

Its particularly important to talk to your insurance provider to get your policies worked out. You dont want to get caught with those proverbial pants down. This may also mean your auto policy, dont forget.

Speaking of your car, did your CPA tell you it would be best to have your company own your car? Then, youll have to transfer it (and yes, we all love the DMV, but do it). What about your other assets? Computers? Cameras? Furniture, etc.? Even if you own these things outright, it would be best to document the transfer of the assets to your new entity. Talk to your CPA before doing any of this to make sure you dont do anything to mess up her/his careful tax planning for you.

You also need to think about your IP licenses. No, not your licenses out (those you sell to other people to permit them to use your work–although you will need to update those moving forward) but the one ones you purchased for things like the software that you use in your business. Some of those will be non-transferable and you will have to purchase new licenses. Dont get angry about it and dont skip this–especially if you issue non-transferable licenses, you should understand this.

You may also have issues with any office/studio space you lease (landlords often will be fine with updating a lease) and definitely youll need to set up new payroll accounts if you have employees, including getting a new EIN number for the entity not to mention new workers comp., etc. Also, if you have a business license with the city (or county) you’ll have to get a new one for the new entity, too.

Finally, you need to learn how to sign documents properly for your entity. You may no longer sign justBetty Smith, but rather must sign as Betty Smith, Managing Member, Smith Creative, LLC, a California LLC, if you formed an LLC; or, if you did the corporation thing, Betty Smith, President, Smith Creative, Inc., a California Corporation. Yes, it’s a pain in the butt but if you don’t sign properly you can personally be liable for things. No, I’m not kidding.

Relatedly, you will need to update all your business paperwork to reflect the new entity–like your licenses you offer clientsand your contracts/estimates/invoices/model releases/etc. Also be careful in the contracts you are offered: make sure they are naming the entity and not you as the party and that there are no “Personal Guarantees” or other clauses that effectively remove the protections of the entity.

Your CPA should provide you with a lot of guidance on the financially related changes you needs to make. An attorney can help you with the rest.

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One Year

Yesterday, July 1, was the first anniversary of Burns the Attorney.
Ive been incredibly lucky. Its been a really good first year.

I have wonderful clients, both new and old, who honor me with their trust. I take very seriously their reliance on me to do my best for them because, in very important ways, it means I help them focus on being creative professionals. Think about it: which would an artist rather do, make new art or chase down people who have used existing art without permission or payment?

That is most of what I do, helping artists with copyright infringement matters. But I do other legal work as well, of course. In the past year, Ive helped clients with contracts and releases, discussed business formations and the effects of community property on clients copyrights, and, well, lots of other things too.

Not everyone gets the opportunity to do what she really loves. I do, and I am so grateful for it.

I want to thank all of my clients and, in advance, all of those who will call on me to help in the future. I intend to be here for some time, serving artists of all sorts.

If you ever need me, you know where to find me.

And thanks.

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WMFH Affects More Than Copyrights

Creative pros have been understandably angry at the words work made for hire (WMFH) for some time. I mean, clients try to sneak that into contracts all the time and it means you, creative pro, have to carefully watch out for it, lest you sign that bad boy and end up making the client the author and owner of what should be your copyrights. So sure, those words tend to raise a creative pros hackles.

But this post isn’t about how your copyrights are affected with a WMFH contract; it’s about other effects of such an agreement.

Now, before I go any further, I’m only talking about California law here. If you are in another state, the rules (probably) aren’t the same. That being said, if you ever work in California or for a company in California, you might want to pay attention.

There is another side to WMFH agreements in the Golden State. If you are a sole proprietor business (that is, not an entity of some kind, like a corporation or an LLC), and someone hires you as an independent contractor, and the signed contract includes a WMFH clause, then you are statutorily an employee and the employer has to follow the laws regarding unemployment, disability, and workers compensation insurance as if you were a regular employee. According to the California Labor Code[1], if a person is hired to create a commissioned work and the parties agree in a signed writing that the work shall be considered a work made for hire, as defined in Section 101 of Title 17 of the United States Code, then, boom, the hired person is a statutory employee. Moreover, the California Unemployment Insurance Code[2] says almost exactly the same thing. Basically, every code that deals with unemployment, disability (including paid family leave) and workers comp has something about WMFH like this.

Anyway, failure by the employer to follow the rules means the employer can be hit with substantial fines and even jail time! Yikes!

“So what?” you may be thinking, “only the state cares but it doesn’t really affect me,” but you’d be wrong. Those are rights to which you are entitled under California law. If you get injured on the project, for example, Workers Comp should pay your medical bills (roughly speaking). Also, the law is unclear[3] about other benefits that employers in California must supply to such employees, so it may be that you, as the employee, are entitled to other things beyond being paid as an employee (including having the employer pay its half of FICA) rather than an independent contractor, like having limits on time/overtime, etc.

If you live and generally work in some other state but come to California for a WMFH project, then you too would likely be considered a statutory employee under California law as well[4], and maybe if the company is here but you aren’t. Also, if you work physically here, your pay would probably be subject to California personal income tax withholding[5].

Most importantly, if you are in California (resident/business) and you hire assistants or other independent contractor workers and you have a WMFH clause in the contract you have these people sign, you also need to know this info. You have to follow these same rules! There are ways to avoid some of these issues (for example, maybe an assignment clause instead of a WMFH), but there are downsides to the other options as well. Talk to an attorney to get the best advice for your particular situation.

Oh, and don’t forget, if you are in California, you really, really must pay your people on time.
[**UPDATE** There is more time to pay now, but it’s still faster than you might think]

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[1] California Labor Code Section 3351.5(c).

[2] California Unemployment Insurance Code Section 686.

[3] The statutes don’t seem to say explicitly one way or the other; a court could possibly make the analogy and apply the same rules to pay, time off, etc.

[4]See http://www.edd.ca.gov/pdf_pub_ctr/de231d.pdf.

[5] Id. (That means, same source as I just cited, for the non-nerdy readers).

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Forming an Entity: Watch for Issues

Most creative professionals start their businesses without doing anything more than accepting the first freelance project offered. That is, they don’t bother to do anything about forming a legal entity like a corporation. That’s fine; if you don’t do anything and you work solo, you are a sole proprietor. After that first project, if you continue doing business, getting projects, cashing checks, you probably won’t think about your business structure any further.

At least for a while.

One day, you, the now-successful creative pro hires an accountant to do your taxes and that CPA tells you you should incorporate or form an LLC. The accountant is concerned about the relative tax burdens and, often, it does make immediate financial sense to form an entity; that is, you can save a bundle on your taxes. But, the accountant doesn’t (probably) know about the copyright ramifications, and (usually) neither does the average creative pro.

Yes, there are copyright ramifications.

Overall, there are a whole host of legal issues to consider when it comes to potentially forming an entity. Most people focus on the tax issues, and that makes sense, but there are other legal issues and I highly encourage anyone considering forming an entity to talk to a lawyer before taking that step. Anyway, for this post, I’m only going to focus on the copyright one as it is most often totally ignored, and it shouldn’t be.

So, let’s imagine you have formed a single-member LLC and, as per your CPA, you’ve made yourself an employee of that LLC. Your tax bill thanks you. Now, however, when you make your art (whatever kind of art you make–doesnt matter), who owns its copyright?

If you said you do, you’d be wrong. Even though you are the only member of your entity (the LLC), it’s that entity that owns the copyright in the art you make as an employee of that entity. It’s an automatic work-made-for-hire. No writing required.

Well, I hear you saying, but I am the entity so it’s the same thing. Nice try; but, under the law, no, you aren’t and no, it isn’t at all.

First, since the entity is now the author of the work, the length of the copyright is no longer life of the author plus 70 years. A copyright authored by an entity lasts either 95 years after its first publication or 120 years after its creation, whichever is shorter[1]. By the way, there is an exception to this to get back to the authors death +70 years length, but it requires more paperwork and I know how much y’all love paperwork.

Second, when you register that copyright, you need to do it correctly. You have to name the entity as the author and the claimant because you, as an individual, by law did not create and do not own the copyright. While screwing this up doesnt necessarily totally void a registration, it certainly will be an issue if you ever get infringed. You (and your lawyer) don’t want to have to fight about the validity of your registration. I’ve seen it in cases and it could result in a great case becoming a loser. Remember, if you sue for infringement and lose, you might end up being required to pay the other side’s attorneys’ fees and costs; you don’t want something like this to scuttle your otherwise watertight ship.

Third, let’s say you get hit by a bus and shuffle off the mortal coil, who gets the copyrights your entity owns? And what about existing licenses and royalties based off those copyrights–who gets the money? It’s not so easy, if you havent planned ahead. Do you have a succession plan in place for your entity?

None of these issues are insurmountable at all. For example, you can have a writing that keeps the copyrights created after the entity is formed as your own (if you want to do that and there are reasons to do that, or not). Overall, the issues beyond the tax ones that come up when you form an entity, including copyright ones, do require some thought and there are decisions that need to be made and new processes need to be learned if you decide to go ahead and incorporate.

Don’t go it alone and hope it all works out–thats a lousy business strategy. Talk to your own attorney and get good, personalized advice.

[1] 17 USC 302(c).

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Safe Harbors, Piracy, and Your Value

I could write on this issue, but I’ll save the time and point you toDavid Newhoff over at Illusion of More. In this post, Mr. Newhoff discusses the differences and, importantly, the similarities facing artists in the USA as compared to the Canadians when it comes to the (false) promises made by tech to improve the lives of artists. Miranda Mullholland made a wonderful and passionate speech to the Economic Clubof Canada about her (and others’) life as a musician–one who works her ass off but who barely makes a living. Watch her video and read Newhoff’s comments. I won’t reiterate it all here.

I will say this, though:

  • You make the art, be it music, photographs, design, illustrations, and it is art–the platforms can’t be successful without you.
  • Stop calling the art you createcontent and stop letting people rip you off both directly and by devaluing what you do (like, by calling it content).
  • Don’t rip off anyone else and support all other artists, yes, even (especially) when it costs you more.
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