Can You Be Sued Over Your Demo Material?
How Tom Cruise, CES Chicago in 1994, and a long-defunct gaming product shaped current liability that could affect integrators’ demo material.
Many integrators reacted vociferously when we reported that Hollywood movie stars Bradley Cooper and Liam Neeson are suing Vutec and First Impressions Theme Theaters for using their likenesses in advertisements.
The debate brought up several questions regarding integrator liability, including to what degree does permission from a Hollywood studio extend (versus permission from individual actors), and does the potential liability extend to demo material as well as advertisements? Exactly what images are OK to use in your marketing materials? Should integrators change every screen image to a generic landscape photo just to be safe?
After all, the last thing an integrator needs is a lawsuit from some deep-pocketed movie star and his legal team.
As it turns out, in certain situations integrators can potentially be liable to pay royalties on the music and video demo material used, not to the record company or movie studio, but to the artists. In other words, you might not want to use “The A-Team” for demos just in case Neeson and Cooper happen to stroll by your booth at a local pay-to-enter local home show.
Tom Cruise vs. Philips Lawsuit in 1994
Philips Electronics found this out the hard way in 1994 when it was sued by Tom Cruise over the use of his likeness without permission for an infomercial for its ill-fated Compact Disc Interactive (CD-I) gaming system. The story, as related by former Philips exec David Birch-Jones, is that Philips - through its Polygram division - had garnered all the necessary studio permissions for the images used in the infomercial, but not from Cruise himself.
The 30-minute CD-I infomercial - watch all three parts below - is a takeoff of the popular 1991 movie “Defending Your Life” starring Albert Brooks. A Brooks lookalike is trying to find the “meaning of life” from a space-age female model and “the wall” (presumably akin to the voice of God). Instead, he gets the lowdown on CD-I. If you are nostalgic and want to reminisce at the bulkiness of the old interface and the primitive onscreen graphics, you will get a kick out of watching it, especially the portions depicting “Voyeur,” an interactive game that is apparently a takeoff of Alfred Hitchcock’s classic “Rear Window” with Jimmy Stewart in which the gamer clicks on various apartment windows to covertly watch racy goings on and attempts to solve a murder.
The “troublesome” scene occurs at the 6-minute, 56-second mark of the Part 1 video. When describing how viewers can watch exciting Hollywood movies in the comfort of their own home using CD-I, there is a 9-second clip of “Top Gun” where Cruise’s likeness is actually only seen in the cockpit of the fighter jet wearing an oxygen mask. Still, those 9 seconds were enough for a $10 million lawsuit.
Not only was the infomercial making the rounds on late night TV, but it was also played on the exhibit floor at the Consumer Electronics Show (CES) that year in Chicago. The infomercial was not only being played in the Philips booth, but had been distributed to the booths of several other partners, recalls Jones, who was the audio product marketing manager at Philips from 1988-1991.
The trouble, according to Birch-Jones, is that Summer CES held in Chicago in June of that year allowed consumers to pay a fee to attend the show on the final two days. That commercial enterprise is what triggered the lawsuit against Philips Interactive Media arguing that the infomercial created “the impression that (Cruise’s) career is on the wane, so that he has been forced to license his likeness.”
The “on the wane” reference might have been influenced by the fact that the Philips CD-I was widely panned and soon off the market. CE Pro was unable to find the original lawsuit documents, only this reference from Entertainment Weekly. The case was reportedly settled out of court for undisclosed terms.
CE Pro reached out to Cruise’s representatives but did not receive a response. But according to Birch-Jones, the incident gave rise to ASCAP/BMI Clause #34 in the CES exhibitor contract. ASCAP (American Society of Composers, Authors and Publishers) and BMI (Broadcast Music Inc.) are organizations that represent and collect royalties for artists. The CES clause states: “Exhibitor is responsible for all applicable ASCAP/BMI music licensing fees. No fees are required if music is used to demonstrate product capability.” CEA’s legal team could not confirm with CE Pro when that particular clause was added to its exhibitor contracts or that the clause is directly related to the lawsuit. CEDIA has a similar clause in its exhibitor contract.
Questions for Integrators
The litigious history of the Neeson, Cooper and Cruise situations begs a key question: Are integrators liable to pay royalties to artists based on the music and/or likenesses they use in their demos at local home shows in which consumers pay to attend? Perhaps, it would appear. Unless the event has negotiated a clause in its contract similar to the one used by CEA and CEDIA.
Pure trade events that are not open to the public, like CEDIA Expo, are a gray area. These events are not likely to fall under the same scrutiny; however, many trade shows in recent years have begun offering “exhibits only” passes for a fee.
On the ASCAP website there is a licensing agreement for “Conventions, Expositions, Industrial Shows, Meetings and Trade Shows” that grants to right to play or perform live copyrighted music at an event that occurs less than 10 times per year. The rates for the license are on a sliding scale, starting at $120 for an event that draws an attendance of less than 1,500 people, up to $9,500 for an event that attracts more than 100,000. The rate for a local home show that draws 3,000 to 5,000 people is $700.
So the question an integrator might ask the organizers when he signs up to get a booth at a local home show is whether or not they have paid to have an ASCAP/BMI clause in the exhibitor contract. It will be an important question if you are running a Blu-ray or playing an audio system in the booth.
In terms of what integrators demo in their own private showrooms, there is no liability.
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Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at firstname.lastname@example.org
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