Beitchman & Zekian Blog

Legal Information in Plain English

Archive for March, 2011

Contractual Arbitration Clauses…Or How Charlie Sheen Got Kicked Out of Court and Into Private Dispute Resoltuion

The events in Charlie Sheen’s life have become very public, for better or worse.  Regardless of your opinion of what is going on with him, the latest legal maneuverings by his attorneys and those of his opponent have provided a topic for this blog and information that is important for anyone who has ever or will ever sign a contract.

Very few people read the agreements they are signing from start to finish, and in neglecting to do so they do not know what the terms of the agreement are when it comes to dispute resolution.  Most people assume that if the contract is breached, there will be a lawsuit; this is generally the case, however more and more parties are including arbitration clauses in the deals.  What this means is that instead of taking a dispute to court and letting a judge and/or jury decide who is at fault and who is not, it goes to a private service and they assign it to an arbitrator – usually a retired judge or attorney – who acts as the decision maker.

The pros of working with an arbitration service is that the matter is private (court proceedings are public record) and it’s supposed to be on a faster schedule.  This may or may not be true as it can take the same amount of time to arbitrate as it would to litigate.

The cons are primarily the cost.  The parties must pay for the administrative services as well as the fees to the arbitrator who is the decision maker.  This can amount in to the tens of thousands of dollars and if one party can’t pay, the others have to pony up that share.  Additionally, unless it is decided prior to the arbitration in the agreement, the parties may not have any true procedural rules as you do in court.  Further, the arbitration fees and costs do not include your attorney’s fees which will also start to add up.

Now, if you, like in Charlie’s case, decide to file a lawsuit in court when you have an arbitration clause, the opposing party will likely file a Motion to Compel Arbitration – or basically a request to send the case to arbitration per the agreement.   So, if you don’t think you want to pay a lot of money to a private company for something that you can submit to the court and not have to pay all the extra fees, you would do well to contact a lawyer at the outset to review your contract before you sign it.  Forewarned is forearmed.

Are You Giving Away Your Intellectual Propery Rights on Twitter?

The Twitter phenomenon has permeated our world-wide society.  It is where many of us get our news, keep up with far-flung friends, and even make new friends, sight unseen.  We share our goals, accomplishments, day to day happenings and many times we do so with pictures.

But do any of us know what happens to our pictures once they’re posted via the various twitter picture/album services like twitpic, yfrog, or plixi?  Apparently plixi’s terms and conditions allow them to sell and make money off of pictures posted through it’s service.  Who knew, right?  Well, it took a celebrity tweet to bring it to our attention (See @katewalsh: SO BAD…ILLEGAL? RT @lalatas: @katewalsh @ipicarazzi Here is the link about Plixi images on selling twitter pics to agencies. UNCOOL! http://j.mp/gAYDfT”).  Short answer Ms. Walsh – not illegal because by using the service you’ve agreed to license those pictures to them FOR FREE.

A quick overview of the terms & conditions shows that indeed, users are granting a worldwide, royalty free license to use, duplicate, and sub-license (ie: sell) the pictures posted using their service to other people and/or companies.  What does this mean?  Well for you and me (ie: non-celebrities) it means that the picture of your dog or kid can be sold to a company for use in an ad, packaging, or anything else.  Not that big a deal, right?  If you are a celebrity, it means that the picture you posted of yourself and friends at a local restaurant can now be sold – without your knowledge – to that restaurant for use as an advertisement that you endorse that establishment.

Why should non-celebs care?  It’s the principle of the matter.  Knowing that most users do not read the terms & conditions, plixi has essentially taken your property from you – in essence they’ve stolen from your all the while rationalizing by saying, “It’s in the T&C’s if people don’t want their pictures sold, they should use a different service.”  The problem is that it now avoids the purpose and protection that each person that snaps a picture has under the Copyright Act.  That picture is YOURS… yours to sell, yours to post, to duplicate, sell, or give away.  But you should have a choice as to what happens to those pictures.

So what to do now?  It all depends on whether you feel strongly about this or not.  As for me, I transferred my pictures to a service that doesn’t sell them and deleted my account with plixi.  If you want to read the terms & conditions, there is a link below to the plixi site.

http://plixi.zendesk.com/entries/343628-terms-of-service