Couldn’t Get Tickets to the Taylor Swift Concert? A Retroactive Look at the Live Events and Ticketing Monopoly in the US

By: Justine Kim

With soaring anticipation for the first live tour in five years, 3.5 million “registered” Taylor Swift fans around the country attempted to purchase presale tickets for the Eras Tour on Tuesday, November 15, 2022, ultimately resulting in website crashes and the cancellation of the scheduled public sale for non-registered fans. Although 2.4 million tickets were sold on that Tuesday, the incident became the catalyst for reignited scrutiny against Ticketmaster by concertgoers and artists alike, with renewed accusations of the company “abusing its market power at the expense of consumers.” As is the case for 80% of the ticketing market in the U.S., the Eras Tour tickets were sold by Live Nation Entertainment Inc. (LNE) through Ticketmaster

In 2010, Ticketmaster completed a $2.5 billion, tax-free merger with Live Nation to form LNE. This merger has been criticized (since its announcement) for “locking” competitors out of the industry and leaving consumers out of options. Consumers, lawmakers, and artists have continuously sought antitrust investigations into LNE for allowing the merged company to be the predominant servicer of tickets and live events in the U.S. with no meaningful competition.

Questions regarding the creation of a potential monopoly have persisted since the announcement of the merger, with notable criticism from Bruce Springsteen about Ticketmaster’s alleged “scalping” practices to a 2015 antitrust lawsuit by Songkick, LNE’s competitor. According to the Songkick suit, LNE had “threatened” artists to not work with Songkick and “abus[ed] [LNE’s] power as a concert promoter to influence how musicians sell their tickets.” In 2018, the two parties reached a $110 million settlement, including “an additional undisclosed sum [for LNE] to acquire some of Songkick’s remaining technology assets and patents.”

Analysis

Modern antitrust law in the U.S. is governed by three key federal statutes. First, the Sherman Antitrust Act of 1890 represents the federal government’s “commitment to a free market economy” by “outlaw[ing] all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade” or “monopoliz[ing] any part of interstate commerce.” According to the U.S. Department of Justice (DOJ), there is an unlawful monopoly under the Sherman Act if “only one firm controls that market for a product or service” and this market control was obtained “by suppressing competition with anticompetitive conduct” and not by the superiority of its product or service. Under this Act, unlawful monopolies are usually “punished as criminal felonies,” and the DOJ is the only entity with the power to bring such criminal prosecutions.

Second, the Federal Trade Commission Act, signed into law in 1914, established the Federal Trade Commission (FTC) and empowered the Commission to “prevent unfair methods of competition,” among other duties. The FTC Act, however, does not impose civil or criminal penalties, and provisions of this Act may only be enforced by and through the FTC.

Third, the Clayton Antitrust Act of 1914 empowered the FTC, in addition to other pro-competition duties, to prevent and eliminate unlawful corporate mergers and acquisitions (M&A). This Act mandates all entities considering M&A activity to consult the DOJ’s Antitrust Division and the FTC with violations of this Act resulting only in civil penalties. 1976 amendments to the Clayton Act allow “private parties to sue for triple damages when they have been harmed by conduct that violates either the Sherman or Clayton Act.”

Under this statutory framework, a merger of two or more entities may trigger FTC or DOJ investigations if either agency believes that there has been or may be a violation of antitrust law. In such cases, either agency “may attempt to obtain voluntary compliance” for the investigation “by entering into a consent order” with the merging entities. While a consent order is not an admission of violating antitrust laws, the order represents the signing entities’ agreement “to stop the disputed practices outlined in an accompanying complaint or [to] take certain steps to resolve the anticompetitive aspects of [their] proposed merger.” The entities’ refusal to sign a consent agreement with the DOJ or the FTC or their noncompliance with a consent agreement may cause the agencies to seek injunctive relief in a federal court.

In the LNE merger, the DOJ required the merging companies to divest some of their assets in order to obtain approval for the proposed merger. Specifically, Ticketmaster was required to “license its primary ticketing software to a competitor” (Anschutz Entertainment Group, “the second-largest concert promoter and operator of major venues”) and sell off its Paciolan Inc. ticketing unit. Live Nation, the concert-and-venue-hosting counterpart, “agree[d] to be barred from retaliating against venue owners who use a competitive ticket service” for a period of ten years.

However, as the ten-year deadline of the non-retaliation provision of the DOJ—Live Nation agreement drew near, the two organizations agreed to amend and extend this provision in 2019, based on Live Nation’s repeated violations of the provision. The DOJ had found that Live Nation, in violation of the original merger agreement, “had used its control over the concert touring business to pressure music venues into signing contracts with its Ticketmaster subsidiary.” This agreement, which will expire in 2025, would clarify the restriction that Live Nation “is not allowed to threaten venues in any way and may not retaliate against venues that decide to use a system other than Ticketmaster.”

LNE’s anti-competitive behavior has directly impacted consumers and the industry. According to a 2018 article, Ticketmaster, through LNE, ticketed eighty of the top one-hundred arenas in the U.S. Between 2009 to 2019, the average ticket price for the top 100 tours worldwide increased by 55% with the average ticket for the highest-grossing tour in North America (The Rolling Stones) costing $226.61. Using its unmatched power in the live music industry, Ticketmaster introduced a “dynamic pricing” system in 2011, which allows ticket prices to be dependent on the level of demand for the event and seat location. Bruce Springsteen has been a vocal critic of Ticketmaster’s dynamic pricing, particularly after prices for his concert ticket rose to $5,500—before the tickets were resold by a third party.

Conclusion

The Taylor Swift ticket sales reignited attention on the power of LNE in the ticketing and live event industry. Following the Eras Tour presale, the New York Times reported that the DOJ had opened an antitrust investigation into LNE, regarding their alleged abuse of “power over the multibillion-dollar live music industry.” Congress is also stepping in. The Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights announced that it would hold a hearing for “the lack of competition in the ticketing industry.” Industry competitors, consumers, and lawmakers are once again calling for greater scrutiny on the alleged anticompetitive power LNE has amassed since the 2009 Live Nation and Ticketmaster merger.

3D Printing in Intellectual Property

By: Yixin Bao

Starting in the 1980s, 3D printing or additive manufacturing arose and began to develop. Although the standard limitations that exist in current Intellectual Property (“IP”) law can be applied to 3D printing, there are still gaps in the legal profession that the courts need to address.

What is 3D printing? 

3D printing produces 3-dimensional physical objects from digital templates through a variety of processes. This is normally done under computer control, with materials added together, such as plastic, metal, and others, typically layer by layer. As of 2020, after around 40 years of its initial development, 3D printing has become a more mature technique. 3D printers are now more affordable allowing the public to use 3D printing techniques in normal life. Consumers can easily find a low-cost 3D printer as cheap as a few hundred dollars. 

3D Printing and IP Law

Today, there are more prosecutions and litigation over the use of intellectual property protection measures in the context of 3D printing. For example, Patent and Litigation Trends for 3D Printing Technologies published on IPLytics Platform found that the patent applications related to 3D printing continue to rise in the passing years, from around 2,000 in 2007 to over 20,000 in 2019. The good news is that the standard limitations that exist in current IP law can also be applied to 3D printing. 

Patent protection, for example, plays a significant role. In the U.S., patents are a government-granted monopoly towards the inventor for a limited period of 20 years. As WIPO’s 2015 World Intellectual Property Report on Breakthrough Innovation and Economic Growth has shown, 3D printing companies are enforcing patents heavily. These include not only specialist 3D printing companies but also major manufacturing companies, such as GE and Siemens. One of the reasons why patent protection is an important strategy over 3D printing is that such protection covers a wide variety of objects, including printers, the components of such printers, the manufacturing processes, and the products. In addition, the industrial 3D printing sector does not solely rely on patent law in its protection strategy. Trade secrets, copyright, and trademark protections also play a role.

However, there are also questions that courts need to address when it comes to the 3D printing technique. Compared to the industrial sector where the protection is similar to the other manufacturing industries, 3D printing for non-commercial purposes seems to face several new challenges. One question raised by Elsa Malaty and Guilda Rostama published in World Intellectual Property Organization (“WIPO”) Magazine is who would own an object when it is conceived by one individual, digitally modeled by another, and printed by a third individual. 

Why does it matter?  

With the quality of 3D printing continuing to rise and the price continuing to drop, 3D printing is now more advanced and accessible, so it can be foreseen that 3D printing-related legal protections and disputes will only increase in the future. The challenges and opportunities will come after the earliest patents start to expire. The original owners would need to develop new patentable technologies to maintain those protections. The expiration will also present an opportunity for the Open Source Community.

IP law contributes enormously to national economies. Dozens of industries, including 3D printing, rely on the adequate enforcement of IP. On the other hand, consumers benefit from IP to ensure the quality of the products, such as 3D printers. This is especially important because the availability of low-cost, high-performance 3D printers has put the technology within reach of consumers. 

At the same time, IP-related issues are only one legal aspect that 3D printing raises. During the use and application of this technique, other aspects of law will undoubtedly be implicated and will need to be resolved eventually.

Identity Theft in the New Information Age

By: HR Fitzmorris

The Supreme Court recently granted the petition for a writ of certiorari in Dubin v. United States, agreeing to review the Fifth Circuit’s decision to uphold the conviction of Dubin for aggravated identity theft under 18 U.S.C. 1028A(a)(1).

Though seemingly mundane when compared with the Court’s recent blockbuster docket, this case raises interesting questions about what it means to commit identity theft in today’s technological landscape, and how prosecutors are adapting antiquated statutes to a new technological reality.

David Durbin was charged with health care fraud after he improperly billed Medicaid for patient care provided at the youth health facility where he worked. He had inflated the price of service and falsified the date to fit within the one-year limit for reimbursement.  Even though the fraud only netted the shelter $92, federal prosecutors tacked on an aggravated identity theft charge which carries a mandatory 24-month prison sentence. The aggravated identity theft statute makes it a federal crime, “during and in relation to a” predicate felony, to knowingly transfer, possess, or “use[], without lawful authority, a means of identification of another person.” 18 U.S.C. § 1028A(a)(1). Prosecutors reasoned that because Durbin used the patient’s name on the fraudulent form—even though Durbin was not impersonating the patient nor making misrepresentations about his identity—he had violated § 1028A(a)(1).

The district court convicted Durbin, despite the seemingly draconian punishment.  On announcing the verdict, the district court judge stated that he “hope[d]” that the conviction would “get reversed.” However, the en banc U.S. Court of Appeals for the Fifth Circuit affirmed

Prior to 1998, identity theft crimes were charged under “false personation” statutes, which go back to the late 19th century. False personation is “the crime of falsely assuming the identity of another to gain a benefit or avoid an expense.” Concern over the increasing ease of obtaining others’ identifying information for nefarious purposes skyrocketed as thieves went digital. Congress passed the Identity Theft and Assumption Deterrence Act in 1998, during the fledgling years of the world wide web. In his statement on signing the bill, President Clinton noted that “[a]s we enter the Information Age, it is critical that our newest technologies support our oldest values.” In 2004, Congress added the Identity Theft Penalty Enhancement, which established penalties for “aggravated” identity theft. Aggravated identity theft was defined as using the identity of another person to commit felony crimes, including immigration violations, theft of another’s Social Security benefits, and acts of domestic terrorism. 

Cases such as Durbin’s are raising questions about the potential reach of these statutes. Broad statutory language offers flexibility in a sector that is known for its quick innovations and ever-changing nature, which can be advantageous to prosecutors looking to curb cybercrime.  But, as the dissenting Fifth Circuit judges noted, the majority’s reading necessarily implicates “not only [] most every commission of healthcare fraud, but would also sweep in tax preparers, immigration attorneys, and anyone else convicted of submitting any form on someone’s behalf that contains a misrepresentation unrelated to the person’s identity.” This creates the risk of criminal liability for those submitting prepared forms on behalf of clients that contain misrepresentations that may have come from the client directly or from a mistake.

Chief Judge Priscilla Owen supported the majority reading of the statute, stating that the statute does not say anything about identity theft, but rather imposes an enhancement for certain felonies on anyone who “knowingly … uses, without lawful authority, a means of identification of another person.”

How the Supreme Court answers the question of “whether simply reciting another person’s name in the course of committing Medicaid fraud constitutes aggravated identity theft, or whether that person’s name has to play a ‘key role in the fraudulent activity’” may affect how identity theft is prosecuted in the future.

“Mob” Mentality: The Push for Unionization of Anime Voice Actors

By: Nicholas Neathamer

Whether you’re just hearing about it or are already a raving fan, the popularity of anime continues to skyrocket. Anime is a style of Japanese film and television animation that has garnered worldwide fans for decades, but the emergence of streaming platforms and their willingness to embrace the medium has given rise to booming demand for anime content in recent years. The market size of the anime industry has steadily risen over time and is expected to generate revenue of over $47 billion by 2028. Despite the overwhelming success of the industry, one often overlooked factor of an anime’s popularity is its cast of voice actors, who bring animated characters to life through dialogue. Existing in further obscurity are the voice actors who “dub” shows and movies, providing voiceover work in various languages to attract viewers around the world. These ‘dubbing’ voice actors often provide services for streaming platforms such as Netflix, Hulu, and anime-exclusive platform Crunchyroll. One of Crunchyroll’s most popular shows is currently Mob Psycho 100, and the platform recently began airing the anime’s third and final season. 

Despite Mob Psycho 100’s popularity, one of the most incendiary issues in the anime world recently has been Crunchyroll’s recasting of the show’s English voice for the protagonist. Kyle McCarley, the original English dubbing voice actor for the titular Shigeo “Mob” Kageyama, was informed by Crunchyroll that he would not be returning as the English voice of Mob. According to McCarley, the fallout was due to the actor’s request that after this final season of Mob Psycho 100, Crunchyroll would meet with union representatives to negotiate a potential contract for future productions. McCarley is part of the Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA), an American labor union representing actors, voiceover artists, journalists, singers, radio personalities, and other media professionals. Crunchyroll currently chooses to not work with any SAG-AFTRA contracts, and McCarley’s proposal for a future union contract was allegedly enough for the streaming platform to look for a new lead voice for Mob Psycho 100. 

It’s no mystery as to why a company like Crunchyroll wouldn’t want to work with unionized voice actors. Unions like SAG-AFTRA are often able to secure more favorable terms for union members through the use of collective bargaining and standard contracts, such as SAG-AFTRA’s Dubbing Agreement. Entering into union contracts would bind Crunchyroll to pay voice actors at scheduled minimum payment rates, contribute to pension and health plans, and follow additional rules set forth by the union. Unionized labor forces are also able to more effectively go on strike against employers to push for higher compensation or new terms to their contracts. In particular, SAG-AFTRA voice actors went on strike against large video game publishers in 2016, arguing for residuals, transparency in roles, higher safety precautions, and better safety assurances for actors while on set. Rather than submit itself to such terms and the increased possibility of a strike, Crunchyroll has eschewed even the possibility of utilizing SAG-AFTRA talent. Instead, Crunchyroll hired non-union Ernesto Jason Liebrecht to voice the character of Mob.  

Some fans of Mob Psycho 100 have wondered whether McCarley can seek legal recourse after the recasting, including whether McCarley may have copyright protections over his portrayal of Mob. However, this is almost certainly not the case. In Garcia v. Google, Inc., a case from 2015, the United States Court of Appeals for the Ninth Circuit examined whether an individual actor or actress may claim copyright in his or her performance in a motion picture. The court looked to the Copyright Act, which states that “[c]opyright protection subsists…in original works of authorship fixed in any tangible medium of expression…[including] motion pictures.” 17 U.S.C. § 102(a). The Act also states that such a fixation must be done “by or under the authority of the author.” 17 U.S.C. § 101. The court ultimately agreed with the Copyright Office, who explained that its “longstanding practices do not allow a copyright claim by an individual actor or actress in his or her performance contained within a motion picture” and that for copyright registration purposes, “a motion picture is a single integrated work” and an acting performance cannot be registered apart from the motion picture. Therefore, McCarley, also solely an actor, would not be able to claim copyright over his role.

Another question posed is whether Liebrecht’s portrayal of Mob violates McCarley’s rights under California’s statutory scheme or common law (as the company operates primarily out of that state), including whether Liebrecht is able to imitate McCarley’s voice for Mob. California Civil Code section 3344 provides that anyone who knowingly and without prior consent uses another’s voice or likeness in any manner, on or in products or goods, shall be liable for any damages sustained by those injured. However, this statute only explicitly covers the actual voice and not vocal sound-alikes. Meanwhile, under California’s common law, imitating another person’s voice can violate that person’s right of publicity, as seen in the decision of the United States Court of Appeals for the Ninth Circuit in Midler v. Ford Motor Co. In that case, the court alluded to protections against imitations of a performer’s voice. The court held that “when a distinctive voice of a professional singer is widely known and deliberately imitated in order to sell a product, the sellers have appropriated what is not theirs” and have therefore committed a tort under California law. That said, such a narrow holding is unlikely to be applied to a performer such as McCarley, whose voice is not nearly as “widely known.” There also remains the issue that many may claim Liebrecht’s performance, while similar, is not an imitation of McCarley’s portrayal of Mob. 

While McCarley likely has no options to pursue legal recourse against Crunchyroll in this situation, there remains a silver lining for those who wish to see their favorite English dub actors be able to unionize more effectively. In 2019, Netflix reached out to SAG-AFTRA to negotiate a direct union agreement, leading to a 2019 agreement that included a Netflix-specific Dubbing Agreement. And on August 31, 2022, SAG-AFTRA members voted to ratify the successor contract, the 2022 SAG-AFTRA Netflix Agreement. This has further solidified the relationship between the streaming platform and union for dubbing contracts going forward, and has bolstered voice actors who work on dubs to continue a push for unionization. Looking down the road, the goodwill acquired by Netflix and push towards increased unionization may lead to a lack of dubbing talent—and a need to change policies—at Crunchyroll. 


Why we should pay attention to standard essential patents

By: Han Xue

Standard essential patents, or “SEPs,” are patents that protect technology essential to an industry’s standard use. The name is self-descriptive, in that such patents set the standard that an industry must use in order to innovate effectively. One example of this is WiFi. So long as a router is available, it doesn’t matter what phone or computer one has, because, generally speaking, any phone or computer, regardless of brand, will be able to connect to it. So, the ability to connect to WiFi is an industry-standard, and WiFi itself falls under the umbrella of standard essential patents. Other examples include USBs and JPEG, as well as LTE and 5G technology for phones. These industry-specific standard-setting organizations (SSOs), or standard development organizations (SDOs), composed of industry leaders determine which patents are essential for the entire industry’s success, and thus, qualify to be SEPs. Once recognized, an SEP can then be licensed to entities in the relevant industry.

The ubiquity of SEPs and the roles they play in many of the technologies in common use today make them immensely valuable. The ability to monetize them through licensing can serve as a strong incentive for research and development in many industries, especially those involved in complex technologies that require significant investment to develop, and the mirroring loss of financial compensation that occurs when an SEP is infringed upon gives companies good reason to maintain a tight grip over the ownership of their SEPs. Furthermore, the development and spread of the standards that such patents protect can enable smaller businesses to more easily access the market, creating competitive conditions that drive down prices for consumers and incentivize innovation.

Given the above, it’s unsurprising that a 2021 announcement by the Antitrust Division of the Department of Justice (DOJ), the U.S. Patent and Trademark Office (USPTO), and the National Institute of Standards and Technology (NIST) regarding a draft policy statement on the 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments drew some attention. The original 2019 policy statement, among other things, examined remedies for infringement of SEPs subject to certain licensing agreements, and the draft, which contained language limiting the use of injunctions in the enforcement of SEPs drew strong scrutiny from those in the intellectual property (IP) field.

One negative reaction to the anti-injunction portion of the draft policy was provided by the Center for Strategic & International Studies (CSIS), which published an article decrying the policy as one that would effectively reduce the value of SEPs, discourage innovation, and undermine the reliability of the intellectual property system in the United States. Specifically, the CSIS focused on the concern that, without the threat of injunctions, infringers would face fewer risks by refusing certain fair licensing agreements and gain terms skewed in their favor. This would, among other things, harm SEP owners acting in good faith, ultimately leading to a decrease in SEP value and a subsequent decrease in competition at the standard-setting level. Another article was published by IPWatchdog, which criticized its language and unsupported statements. In the end, after receiving substantial criticism, the draft policy statement revealed in 2021 was not implemented.

More recently, policy related to SEPs has continued to evolve. This last summer, the DOJ, USPTO, and NIST announced a complete withdrawal from the 2019 policy statement, with the stated goal of creating “incentives to generate more innovation.” The three agencies also noted concerns about anti-competitive actions surrounding the implementation of SEPs, and explicitly claimed that this move would “strengthen the ability of U.S. companies to engage and influence international standards that are essential to our nation’s technological leadership.” More specifically, this withdrawal signals the DOJ’s attempt to use a case-by-case approach when analyzing opportunistic behavior that may lead to anticompetitive behavior in the context of certain licenses for SEPs. This move has been met with less disdain than the 2021 draft policy statement. Save Our Standards, a group centered around certain patent licensing commitments, applauded it as a step towards a fair and transparent licensing system for SEPs. Others have adopted more of a wait-and-see approach, watching for further guidance from the DOJ and pending litigation.

Right now, the stakes for the implementation of such policies are higher than ever. In 2021, the United States ranked 3rd on the Global Innovation Index (GII). However, over the last decade or so, and in the last few years, in particular, there has been a growing media focus on the perception of a blanket decrease in American innovation, and a corresponding decrease in American competitiveness in the global context. This has contributed to a flood of publications centered around current policy and America’s decline in innovation, especially in areas related to technological innovation. Given the state of intra- and international competition in technological fields, as well as increasing international tensions over technological supremacy, it is more important than ever to keep a close eye on legal developments that influence innovation, such as policy decisions affecting the protection of SEPs.