Behind a fun festival season, legal lines in sand

For Coachella and other lucrative live music events, there’s no fiddling around in enforcing protections for brands, merchandise

Summer’s quickly approaching, and that means the music festival season soon will be rocking and rolling in its full glory. But there’s more than meets the eye in staging successful—read that highly lucrative—events, besides getting throngs out in Mother Nature’s splendor for a splendid series of hot performances by top artists of the moment.

For Entertainment Law counsel, protecting a festival’s name, brand, intellectual property, and associated merchandise can require a lot of non-musical movements, year-round overtures in copyright and trademark enforcement. They’re playing a big score, with events and goods representing a sizable part of pop music’s revenues these days.

That’s the prelude for this post, now on to seeing some of how it’s done, with a sampling of the legal fugues performed by a major player, the Coachella Music Festival LLC:

What’s at stake?

Even a quick online scan offers evidence of Coachella’s battles not only to attract top bands but to protect its brand.

The stakes are high: For the music industry, live music has been a key revenue generator,  especially as music sales have dropped nearly 50 percent since the turn of the century. And Coachella has been a big money hit, raking in $84.26 million with a total of 198,000  attendees over the two day weekend, the most of any festival in 2015, according to Forbes.  There’s no telling how much those numbers may have increased in 2016.

For an artist, the two-weekend event can mean paydays as spare as $15,000, though they skyrocket to seven figures for the more notable acts.

Live music is keeping performers working, and the music business thriving, as music lovers are more enthusiastic than ever to attend a concert-social event that also provides an experimental, destination weekend with friends or even family. Coachella has contributed to significantly to the local economy, totaling in the Indigo area, more than $700 million in economic activity, making area businesses eager to get a share of festival benefits.

But the festival’s lawyers sometimes have to draw a line in the desert sands as to how others try to tap into Coachella’s luster.

What’s in a name?

Part of the legal protective regimen covers a crucial fundamental: the festival’s very name.

A year ago, Coachella Music Festival LLC sued the organizers of “Hoodchella,” asserting in federal court that they had willfully infringed on the event’s trademark. In seeking a preliminary and permanent court order, treble damages, and attorneys’ fees against Hoodchella, Coachella claimed the newcomer event deliberately diluted and infringed on a now famous brand, and that the two companies potentially were direct competitors in an industry in which they both would market to similar consumers, food vendors, bands, and artists in Southern California in the spring time.

The claim was aggressive, considering that Coachella, which has run since 1999, is regarded as one of the biggest and most popular music and arts festivals, and it is one of the top such events being advertised for 2017. Before Coachella filed its federal mark suit, it noted that it had sent cease and desist letters to Hoodchella organziers for two months before. Its legal claims were answered by Kamil al-Ahdali, a Hoodchella organizer and advertiser, just with a Tweet: “@coachella @AEGLiveSW you want hoodchella.com contact me. Big money only…You know where I live.”

The defendants had to back down from their social media bravura. They avoided what might have amounted to significant legal costs, settling instead and agreeing to change their event’s name to “Noise In The Hood.”

How valuable’s that ‘merch?’

Festival lawyers also have slapped back at makers who may cut into a major revenue source for live music: merchandise. It’s one of multiple revenue streams—at least 42 of them (?!)—that performers and the industry have identified and focus on these days when paying attention to the bottom line. Merch has become an increasingly lucrative, with artists taking in a percentage of sales at live events (roughly 30 percent), and events charging them “hall” fees to sell all manner of goods.

Stop thinking it’s just about T-shirts any more. The merch can include branded earphones, candy, barbecue sauces, ice packs, toothpastes and toothbrushes, wigs, pillowcases, lamps, and skull or lip sculptures.

In 2012, Coachella sued vendors for selling knock-off T-shirts and hats during the festival. Its lawyers also won from U.S. District Judge Audrey B. Collins a court order for “state police, local police, local deputy sheriffs, off-duty officers of the same, and any person acting under their supervision” to “seize and impound any and all unauthorized merchandise bearing any or all of the festival’s and/or artists’ trademarks.” That was a powerful ruling for not only Coachella but also for other music and arts festivals. It sent a message that not only would the events themselves crack down on their grounds on unauthorized merch sales, the courts and law enforcement also would play a prominent role in enforcing marks registered and received from the U.S. Patent and Trademark Office.

Earlier this year, Coachella sued Urban Outfitters and Free People, asserting in a federal trademark action that these retailers are selling unauthorized clothing, wrongly appropriating the Coachella name on catalog items. The retailers purchased a “keyword,” allowing their products and website to appear in search results when consumers type in the festival name, Coachella argues in its suit. The festival also accuses the clothiers of exploiting “festival-chic” in their ads and products to attract Coachella concert goers and other shoppers. Coachella notes that Urban Outfitters’ website has an exclusive section dubbed, “The Festival Shop,” and it has carried ads for “Coachella Street Style” on its company blog. This all can create confusion as to whether there is any association between the retailers and the festival; Coachella say there is none. The festival says it does not endorse the clothes line, and the retailers lack legally required licenses or sponsorships. The litigation is pending and the defendants have not issued a statement about the case.

Meantime, Coachella also recently updated its website’s Terms of Use, highlighting topics that include Restricted Activities (covering infringement issues) and Dispute Resolution (calling for arbitration in disputes over their Digital Services). Although many consumers may blithely skip over these online legal declarations, they do so at their later litigation peril, as this blog has noted recently and often.