Legal Issues and Intellectual property and Law

Monroe photo ruling could sting CMG

May 14, 2007

Marilyn Monroe had been dead more than 30 years when she went to work in 1996 for celebrity licensing firm CMG Worldwide Inc. The Fishers-based company, the largest of its kind in the world, represents about 250 famous people, most of them dead, including James Dean, Buddy Holly and Babe Ruth.

Monroe, one of its highest-grossing clients, has raked in more than $30 million in licensing fees in the last dozen years for everything from TV commercials to T-shirts--with roughly 25 percent of that windfall landing in CMG coffers.

But that spigot of cash could slow to a drip if a higher court upholds a ruling early this month by a federal judge in New York, and if a series of similar lawsuits nationwide result in additional setbacks for CMG.

The most recent decision stems from a long-running legal dispute between CMG and a group including the family of late celebrity photographer Sam Shaw, who photographed Monroe. At issue is who, if anyone, owns a celebrity's so-called publicity rights after that person dies.

The Shaw family sued, claiming CMG interfered with its ability to license Sam Shaw's photos, including the famous image in which Monroe holds her skirt down while standing over a subway grate. CMG sued separately over the September 2006 sale of a T-shirt with an image of Monroe at a Target in Indianapolis.

New York federal Judge Colleen McMahon sided with the Shaws in a summary judgment dated May 2, writing that "at the time of her death in 1962 Ms. Monroe did not have any postmortem right of publicity."

CMG's owner and CEO, Mark Roesler, said the company plans to appeal. Roesler is nationally recognized as an expert in valuing the brand of famous people. His testimony during the civil trial of O.J. Simpson led to the decision to award damages of $33.5 million in the slayings of Simpson's ex-wife and her friend.

Roesler said defending the "value" celebrities have built can be particularly difficult when they're dead.

"Cases like this reinforce the challenge," he said.

The decision addresses only a "small slice" of the overall Marilyn Monroe brand, said Jonathan Polak, who represents CMG and heads the intellectual property practice group at Indianapolis-based Sommer Barnard PC.

Other parts of the puzzle include branding rights, trademarks on Marilyn Monroe's name and signature, and copyrights of certain photographs.

Polak said the decision was nothing more than a "blip on the radar screen" that won't affect the way CMG does business.

The courtroom victors don't see it that way.

"We believe all the individuals who have been licensing from them no longer need to," said Christopher Serbagi, a New York attorney who represents the Shaw family. "The millions they've collected should be returned. Those were ill-gotten gains."

Intellectual property attorneys without ties to the case say the decision could hurt CMG's bottom line but perhaps not as seriously as attorneys for the Shaws believe.

The case is one of a handful of Monroe-related legal disputes that could have wide implications on how publicity rights are handled, including which state's law should apply.

"This is one of the first cases I've read that goes through the full analysis of when these rights might come into being," said Christopher Brown, a partner with locally based Woodard Emhardt Moriarty McNett & Henry LLP.

Brown expects the decision could give encouragement to other entrepreneurs interested in trading on the image, likeness or name of celebrities who died before 1994, the year Indiana's Right to Publicity Act was passed by the Legislature.

In the case, CMG argued that its client, Marilyn Monroe LLC, owns Monroe's publicity rights under Indiana's law, which created a 100-year-long postmortem right of publicity.

The judge didn't buy it, in part because Monroe had "absolutely no contact" with Indiana during her life and because publicity rights didn't exist when Monroe died in 1962.

Anna Strasberg, the wife of Monroe's former acting coach, created Marilyn Monroe LLC. Strasberg argued Monroe intended to pass publicity rights to Strasberg's late husband. Her position was based on an interpretation of Monroe's will the judge did not agree with.

Jim Coles, co-chairman of the intellectual property group at locally based Bose McKinney & Evans LLP, expects a lot of people will be looking at wills as a result of the judge's ruling. He said it was interesting that the court left open the possibility that, if worded properly, a right that didn't yet exist at the time of death could be conveyed through a will.

Coles said it's hard to say exactly what the impact on CMG would be without knowing more about the specifics of the company's clients.

"The entire basis of charging royalties could be in jeopardy if they're relying on language in wills for the transfer of property rights and those rights didn't exist at the time of death," he said.

Serbagi, the attorney for the Shaws, said he's expecting a fight from CMG.

"They're incredibly aggressive and known for asserting their rights against anyone and everyone," he said. "They'll do anything they can to maintain this empire they've built, but it's going to come tumbling down soon."

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