Journal of Critical Incidents

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Journal of Critical Incidents Timothy Brotherton, Editor Timothy Redmer, Associate Editor Fall 2015 Volume # 8 ISSN 2380-6664 (Online/E-mail) ISSN 2380-6648 (Print) ISSN 1943-1872 (CD-ROM)

The Society For Case Research

Journal of Critical Incidents Fall 2015 Volume #8 ISSN 2380-6664 (Online/E-mail) ISSN 2380-6648 (Print) ISSN 1943-1872 (CD-ROM)

Published by

THE SOCIETY FOR CASE RESEARCH Editor Timothy Brotherton Ferris State University Associate Editor Timothy Redmer Regent University

Journal of Critical Incidents, Volume 8 TABLE OF CONTENTS Journal of Critical Incidents Editorial Board..................................................................... 5 Letter from the Editor ......................................................................................................... 6 Publication Information ...................................................................................................... 7 SUMMARY PAGES Cultural Issues Urban Outfitters Bloody Mess ............................................................................................ 8 A Hijab Not Quite “The Look” ........................................................................................... 9 OMG! He Said What? (A&E’s Duck Dynasty Situation) ................................................. 10 The Missed Deadline: Whose Problem Is It?.................................................................... 11 A Community Unraveled: Police Shooting in Ferguson, MO........................................... 12 Ethics, Fraud, and Other Sensitive Issues Service Unbounded: A Contract Management Dilemma .................................................. 13 Say It Isn’t So Lady “O”: A Sex Scandal at the Oprah Leadership Academy for Girls ... 14 After Hours ....................................................................................................................... 15 Seeing the Light or Tilting at Windmills? The Case of Richards-Townshend ................. 16 The GoldieBlox Video: Copyright Infringement or Fair Use? ........................................ 17 An Inventory Letter from Carter’s to Kohl’s – What Could Go Wrong?.......................... 18 Financial Decisions Old Dog, New Tricks: Staying Relevant in the Digital Era .............................................. 19 Profit and Inventory Under IFRS and GAAP ................................................................... 20 Refuge: A Place of Safety or Danger ................................................................................ 21 Heritage Health Resources ............................................................................................... 22 Inventory Management at the Theme Park ....................................................................... 23 Marketing and Customers Whose Back Do I Scratch? ............................................................................................... 24 August First Bakery & Café Pulls the Plug on Laptop and iPad Use .............................. 25 The Language Barrier....................................................................................................... 26 Lululemon Athletica and a Series of Bad Marketing Decisions ....................................... 27 Finding the Perfect Strategic Partner for an FDA Approved Drug ................................. 28 Management and Human Resources Deployment or Demotion .................................................................................................. 29 Half-Baked ........................................................................................................................ 30 Leonidas Mining on the Edge ........................................................................................... 31 The Race to the South Pole: Lessons in Problem Solving, Planning, and Teamwork.................................................... 32 Cannonball! ...................................................................................................................... 33 Sam Cooper: To Stay with the Family Firm or Not!......................................................... 34 Social Media Save the Whales? A Public Relations Crisis at Lego ........................................................ 35 Just What Constitutes Protected Concerted Activity in Social Media Use by Personnel? .............................................................................................................. 36 The ALS Ice Bucket Challenge: The Good, the Bad, and the Money................................ 37

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Journal of Critical Incidents, Volume 8

CRITICAL INCIDENTS Cultural Issues Urban Outfitters Bloody Mess .......................................................................................... 38 Bradley W. Brooks, Steven M. Cox A Hijab Not Quite “The Look” ......................................................................................... 42 Claire L. McCarty, Ali Fatih Dalkilic, Olca Surgevil OMG! He Said What? (A&E’s Duck Dynasty Situation) ................................................. 45 Barbara Schuldt, Jeff Totten The Missed Deadline: Whose Problem Is It?.................................................................... 48 Gillian Stevens, Edwin Portugal A Community Unraveled: Police Shooting in Ferguson, MO........................................... 52 Charles P. Wilson, Shirley A. Wilson Ethics, Fraud, and Other Sensitive Issues Service Unbounded: A Contract Management Dilemma .................................................. 56 John Barczak, Elizabeth H. Jones, Scott Shindledecker Say It Isn’t So Lady “O”: A Sex Scandal at the Oprah Leadership Academy for Girls ... 59 Barbara Burgess-Wilkerson, Barbara K. Fuller, Nathaniel Frederick II After Hours ....................................................................................................................... 63 Marley Hartman, Sondra Simpson Seeing the Light or Tilting at Windmills? The Case of Richards-Townshend ................. 66 Keith Hunter, Monika Hudson, Karl Boedecker The GoldieBlox Video: Copyright Infringement or Fair Use? ......................................... 70 Jessica A. Magaldi An Inventory Letter from Carter’s to Kohl’s – What Could Go Wrong?.......................... 74 Jeffrey Miller, Jeffrey Strawser Financial Decisions Old Dog, New Tricks: Staying Relevant in the Digital Era .............................................. 77 JoAnn L. Atkin,Michael McCardle Profit and Inventory Under IFRS and GAAP ................................................................... 81 Gabriele Lingenfelter, Abby Brooks Refuge: A Place of Safety or Danger ................................................................................ 83 Timothy Redmer Heritage Health Resources ............................................................................................... 87 Scott Shindledecker, Dawn Grissom, Elizabeth H. Jones Inventory Management at the Theme Park ....................................................................... 90 Matthew VanSchenkhof, David Baker, Jessica Cox

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Journal of Critical Incidents, Volume 8 Marketing and Customers Whose Back Do I Scratch? ............................................................................................... 93 Eric Nelson, Denise Oas August First Bakery & Café Pulls the Plug on Laptop and iPad Use .............................. 95 Paul E. Olsen The Language Barrier....................................................................................................... 99 Sondra Simpson Lululemon Athletica and a Series of Bad Marketing Decisions ..................................... 102 Jane Thomas, Cara Peters Finding the Perfect Strategic Partner for an FDA Approved Drug ............................... 106 George Whaley, Jessica Brown Management and Human Resources Deployment or Demotion ................................................................................................ 110 Elizabeth H. Jones, Anthony J. Mento, Gregg T. Zavadasky, James N. Van Daniker Half-Baked ...................................................................................................................... 114 George Kelly Leonidas Mining on the Edge ......................................................................................... 117 Patricia Lontoc, Edwin Portugal,Ramon Ramos The Race to the South Pole: Lessons in Problem Solving, Planning, and Teamwork .... 120 Patrick L. Schultz, John J. Vitton, Nikolaus T. Butz Cannonball! .................................................................................................................... 123 Sondra Simpson Sam Cooper: To Stay with the Family Firm or Not!....................................................... 125 Neil Tocher, Alexander R. Bolinger, William E. Stratton, Scott C. Tysor Social Media Save the Whales? A Public Relations Crisis at Lego ...................................................... 129 Paul E. Olsen Just What Constitutes Protected Concerted Activity in Social Media Use by Personnel? ............................................................................................................. 133 Asbjorn Osland, Nanette Clinch The ALS Bucket Challenge: The Good, the Bad, and the Money ................................... 136 Cheryl B. Ward, Diane R. Edmondson

SCR Mission and Purpose The Society for Case Research (SCR) facilitates the exchange of ideas leading to the improvement of case research, writing, and teaching; assists in the publication of written cases or case research and other scholarly work; and provides recognition for excellence in case research, writing and teaching. The society publishes three scholarly journals: • Business Case Journal • Journal of Case Studies • Journal of Critical Incidents If you are interested in joining SCR, publishing in one of the journals, or contacting the Officers of the Society, go to www.sfcr.org. To purchase copies of the Critical Incidents or Teaching Notes, please contact the Executive Director, Joanne Tokle at [email protected]. 4

Journal of Critical Incidents, Volume 8 2015 Journal of Critical Incidents Editorial Review Board Miller, Jeffrey Nelson, Eric Oas, Denise Olsen, Paul Osland, Asbjorn Pagani, Marco Peters, Cara Portugal, Edwin Ramos, Ramos Luis Rivas, Julio Schmelzle, George Schuldt, Barbara Schultz, Patrick Simpson, Sondra Smith, Donna Stevens, Gillian Stratton, William Strawser, Jeffrey Tocher, Neil Totten, Jeff Townsend, Cara VanSchenkhof, Matthew Veal, John Walker, Lorin Ward, Cheryl Whaley, George Wilson, Charles Wilson, Shirley

Atkin, JoAnn Baker, David Barczak, John Bolinger, Alexander Borchers, Andy Brooks, Bradley Brown, Jessica Burgess-Wilkerson, Barbara Clinch, Nanette Cox, Jessica Cox, Steven Datillo, Frank Edmondson, Diane Fransted, Emily Green, Donna Hartman, Marley Ho, Henry Hudson, Monika Hunter, Keith Inabinett, Jean Jones, Elizabeth Kelly, George Leonhardt, Bonnie Eshbach, Lisa Lontoc, Patricia Magaldi, Jessica McCardle, Michael McCarty, Claire Mento, Anthony

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Journal of Critical Incidents, Volume 8

Society for Case Research WELCOME to Volume 8 of the Journal of Critical Incidents! This is my fifth year as editor. Thank you for all of your support. With 30 critical incidents in this edition, JCI is smaller than usual due to slightly fewer submissions and more rejections. We hope that you find that we have continued to advance the high standards that you have come to expect from every Society of Case Research publication. I would like to personally thank the authors for their contribution of many high quality critical incidents. The success or failure of any journal is ultimately due to the efforts of its authors and we have some good ones again this year. In addition, I can’t thank the reviewers enough for their willingness to volunteer their valuable time during their busy summers in order to give constructive feedback to the authors at every stage of the process. I especially want to thank our Associate Editor, Tim Redmer. He worked very hard again this year assisting authors and reviewers all summer. He excels at writing, reviewing, AND editing case studies. I continue to enjoy working with him and he is an important asset to JCI. I wish to thank my intern, Crystal Jacklovitz. A Public Relations student at Ferris State University, she has helped with the final editing of all of the CIs and did much of the formatting for this volume. She has worked very hard to make this volume as perfect as humanly possible. Some major changes for JCI are in the works. One of the changes for next year is that JCI is becoming an open submission journal. To be eligible for submission from now on, either first submit to the SCR winter conference (as before), and/or test the critical incident in the classroom prior to submission. In addition, we are developing a new website for JCI that should be completed before the MBAA Conference in April, 2016. Exciting things are happening at JCI. We hope that you will continue to support our ongoing efforts at continuous improvement. The SCR Board of Directors had made changes to the SCR publication guidelines during the SCR Summer Workshop, which are reflected in the current edition. Finally, we have tried to improve the narrative structure of the CIs, because better stories make more interesting critical incidents. Please read the critical incidents in this edition and consider adopting them for use in your courses. Members of the Society of Case Research should be our own best customers. Thanks again for everyone’s time and efforts this year. We look forward to working with each of you in the years ahead. I hope to see you in Chicago at the MBAA Conference next April. Sincerely,

Tim Brotherton 2015 JCI Editor 6

Journal of Critical Incidents, Volume 8 Publication Information: The goals of the Society of Case Research (www.sfcr.org) are to help authors develop and publish worthy business case studies. The Society of Case Research publishes three journals: Business Case Journal, Journal of Case Studies, and Journal of Critical Incidents. While the first two case journals have no page limits, the JCI does not publish long cases. JCI's focus is on brief incidents that tell about a real situation in a real organization (similar to end-ofchapter cases in textbooks). The critical incident tells a story about an event, an experience, a blunder, or a success. Unlike a long case, the incident provides only limited historical detail or how the situation developed. Rather, it focuses on a real time snapshot that stimulates student use of their knowledge to arrive at a course of action or analysis. Critical incidents can be based on either field work or library research. The maximum length of the critical incidents is three single-spaced pages. A teaching note must be submitted with the critical incident. The quality of the teaching note is a central factor in the review and acceptance process. Submissions are double-blind, peer reviewed. Formatted copies of acceptable critical incidents and teaching notes are available to assist author(s) in meeting the JCI submission requirements. The Journal of Critical Incidents is listed in Cabell’s Directories of Publishing Opportunities and is published annually in the Fall.

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JCI Publication Process: Option to submit draft of Critical Incident to the Case Research Track at the Annual MBAA International meeting in Chicago. Start of MBAA Conference in Chicago (April 13-15). A chance to receive constructive feedback on your Critical Incident from session discussants. Submit Critical Incident & Teaching Note to the JCI editor ([email protected]). Include a memo on how the author(s) addressed recommendations from the SCR Winter Conference or describe the lessons learned by classroom testing. Critical Incidents sent to reviewers (Round 1) Reviewers return with comments Reviewer comments sent to authors. FYI: SCR Summer Workshop in Kearney, Nebraska (July 14-16) Revised Critical Incidents due Critical Incidents returned to reviewers (Round 2) Reviewers return with comments Notify Authors whether Accepted, Conditionally Accepted, or Rejected Final submissions due (CI, Teaching Note, Cover, Release, and Summary). Publication of the Journal of Critical Incidents, Volume 8.

Authors of Critical Incidents are expected to review other submissions (failure to do so might mean deferral of your Critical Incident to a later volume). Additionally, JCI will gladly accept volunteers from all disciplines to serve as reviewers. To volunteer, e-mail the editor at [email protected]. 7

SUMMARIES - Journal of Critical Incidents, Volume 8 The GoldieBlox Video: Copyright Infringement or Fair Use? Jessica A. Magaldi, Pace University Abstract GoldieBlox posted a video to its website that depicted young girls creating an elaborate and entertaining Rube Goldberg device. The only audio in the video a performance of the Beastie Boys song “Girls” with the original misogynistic lyrics changed to be empowering to girls and women. The musicians believed that the use without their permission of the music was an infringement of their intellectual property rights. GoldieBlox argued that the use was permissible as a fair use, specifically that the song GoldieBlox created was a parody of the original song. Because fair use is a defense to a copyright infringement claim and is only asserted once a copyright owner has proven that claim, there was inherent uncertainty in whether GoldieBlox’s use would be protected. Accordingly, GoldieBlox had to evaluate its legal risk and decide whether to continue to assert its rights to the song in the video. Learning Outcomes In completing this assignment, students should be able to: 1. Examine the underlying principles and public policy of copyright law in the context of a real-life situation. 2. Evaluate a party’s use of a creative work of another in light of the law of copyright and copyright infringement, specifically with respect to the creation of derivative works. 3. Analyze a legal defense from two perspectives to advocate for a position and to determine the strength of an opponent’s arguments. Application The critical incident is appropriate for classes in business law, the legal environment of business, intellectual property law, copyright law, arts and entertainment management, public policy and ethics. It was tested in three business law courses at the undergraduate level. Key Words law, copyright, social media, music licensing, derivative works Contact Jessica A. Magaldi, Pace University, One Pace Plaza, New York, NY 10038. Email [email protected]. Phone (212) 618-6415.

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Journal of Critical Incidents, Volume 8

THE SOCIETY FOR CASE RESEARCH

The GoldieBlox Video: Copyright Infringement or Fair Use? Jessica A. Magaldi, Pace University This critical incident was prepared by the author and is intended to be used as a basis for class discussion. The views represented here are those of the author and do not necessarily reflect the views of the Society for Case Research. The views are based on professional judgment. Copyright © 2015 by the Society for Case Research and the author. No part of this work may be reproduced or used in any form or by any means without the written permission of the Society for Case Research.

Introduction GoldieBlox posted a video to its website that depicted young girls creating an elaborate and entertaining Rube Goldberg device. The only audio in the video was music, a performance of the Beastie Boys song “Girls” with the original misogynistic lyrics changed to be empowering to girls and women. The video was developed in connection with GoldieBlox’s launch of toys aimed at girls, in connection with its stated mission to inspire girls to become engineers. The Beastie Boys (along with the musicians’ record label) own the copyright to the lyrics and music of the song “Girls.” As such, the musicians believed that the use without their permission of the music and some of the words from the song was an infringement of their intellectual property rights. GoldieBlox argued that the use was permissible as a fair use, specifically that the song GoldieBlox created was a parody of the original song. Because fair use was a defense to a copyright infringement claim and was only asserted once a copyright owner has proven that its work was used without permission, there was inherent uncertainty in whether GoldieBlox’s use would be protected. Accordingly, GoldieBlox had to evaluate its legal risk and decide whether to continue to assert its rights to the song in the video. Background Deborah Sterling, a Stanford engineer and MBA, formed the toy company GoldieBlox out of a concern that, although the engineering profession is a desirable one, only 11 percent of engineers are women (Kickstarter, n.d.). Determined to help increase the ratio of women in the profession, Sterling envisioned Goldieblox as a company based on the idea that girls could build and invent fabulous things (GoldieBlox, n.d.). The company’s strategy was to provide construction toys, each with an accompanying book series, geared to girls between five and nine years old to expose them to the concept of building and creating.

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Journal of Critical Incidents, Volume 8 The Challenge In connection with GoldieBlox’s core strategy to create engineering toys for girls, one of the company’s marketing strategies was to promote its products on social media with the release of entertaining and thought-provoking videos on YouTube and the GoldieBlox website (Marketing Report, 2013). Each of these videos depicted girls playing with its toys, set to a musical track or “anthem” by a popular artist (“Complaint”, 2013). Some of the artists whose music was incorporated into videos were Queen, Daft Punk, Krewella, Kaskade, Avicii, Slam, k.flay and Trevor Guthries (“Answer”, 2013). On November 18, 2013, GoldieBlox released an online video, “GoldieBlox and the Princess Machine,” showing three girls rejecting the stereotypical depictions of girls on television in favor of the creation of a large, complicated and fun highly engineered contraption. In this video, GoldieBlox used the Beastie Boys’ song “Girls,” recording a new version of the song that replaced the misogynistic lyrics of the original with lyrics meant to be empowering to girls and women (“Complaint”, 2013). One verse, for example, included the lines: Girls to build the spaceship, Girls to code the new app, Girls to grow up knowing that they can engineer that. Girls. That’s all we really need is Girls. To bring us up to speed it’s Girls. Our opportunity is Girls. Don’t underestimate Girls. The video was meant to be provocative and viewers, indeed, found it stirring. Whereas the lyrics of the original song depicted girls as being limited to gender-typical behaviors and occupations, the lyrics of the song in the video celebrated the broad capabilities that girls possess and suggested that there were no limits to the things girls can do (Complaint, 2013). And it appeared as if the strategy was successful. At the time of its release GoldieBlox began promoting the video on its Twitter and Facebook accounts and, shortly thereafter, the video went viral. It was viewed by over eight million people within the first week of its release (Michaels, 2013). Viewers really responded to GoldiBlox’s message of empowerment. The Beastie Boys first learned that their song was included in a GoldieBlox video a week after it was released on the internet when their representative was contacted in connection with GoldieBlox’s submission of the video to a Superbowl advertising competition (Answer, 2013). The Beastie Boys contacted GoldieBlox to inquire about the use of their song in the video. Later that day, fearing that it might be sued for copyright infringement, GoldieBlox’s attorneys filed a declaratory judgement in Federal court in California, seeking a ruling from the court that GoldieBlox’s use of the song “Girls” as an empowering anthem was a protected fair use as a parody of the sexist song (“Answer”, 2013).

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Journal of Critical Incidents, Volume 8 In response to GoldieBlox’s lawsuit, the Beastie Boys published an open letter to GoldieBlox that set forth their policy that none of their music could be used for commercial purposes: Like many of the millions of people who have seen your toy commercial “GoldieBlox, Rube Goldberg & the Beastie Boys,” we were very impressed by the creativity and the message behind your ad. We strongly support empowering young girls, breaking down gender stereotypes and igniting a passion for technology and engineering. As creative as it is, make no mistake, your video is an advertisement that is designed to sell a product, and long ago, we made a conscious decision not to permit our music and/or name to be used in product ads. When we tried to simply ask how and why our song “Girls” had been used in your ad without our permission, YOU sued US. It also came to light that a member of the Beastie Boys had recently passed away and his will contained a clause prohibiting the use of his music in advertising (Cubarrubia, 2012). Adam “MCA” Yauch’s will stated: Notwithstanding anything to the contrary, in no event may my image or name or any music or any artistic property created by me be used for advertising purposes. GoldieBlox had a decision to make. Should the company go forward with the lawsuit? Copyright laws gave the exclusive right to owners of creative works to determine the way in which those works were used, but the principles of fair use provided protection to a parodist to make use of another’s copyrighted work. If GoldieBlox’s use of the song “Girls” was a legitimate parody, the use of the song would be a fair use and would not contradict the wishes of the Beastie Boys as expressed in their letter and in MCA’s will. To answer this question, GoldieBlox must evaluate the video based on the principles of copyright infringement and the defense of fair use defense.

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Journal of Critical Incidents, Volume 8 References Answer and Counterclaims, GoldieBlox, Inc. v. Island Def Jam Music Group (filed Dec. 9, 2013), Docket No. 2013 CV 0428 N.D. Ca. Complaint for Declaratory Judgment, GoldieBlox, Inc. v. Island Def Jam Music Group (filed Nov. 21, 2013), Docket No. 2013 CV 0428 N.D. Ca. Cubarrubia, RJ (2012, Aug. 9). Adam Yauch’s will prohibits use of his music in ads. Rolling Stone. Retrieved from http://www.rollingstone.com/music/news/adam-yauchs-will-prohibits-useof-his-music-in-ads-20120809 GoldieBlox (n.d). About page. Retrieved from http://www.goldieblox.com/pages/about Itzkoff, D. (2013, Nov. 3). Beastie Boys fight online video parody of ‘Girls.’ New York Times. Retrieved from http://artsbeat.blogs.nytimes.com/2013/11/25/the-beastie-boys-fight-onlinevideo-parody-of-girls/?smid=tw-share&_r=2 Kickstarter (n.d.). GoldieBlox: The engineering toy for girls. Retrieved from https://www.kickstarter.com/projects/16029337/goldieblox-the-engineering-toy-for-girls Michaels, S. (Nov. 25, 2013) Beastie Boys accuse US toymaker of violating their 1987 track Girls. The Guardian. Retrieved from http://www.theguardian.com Summerfuel (2013). GoldieBlox Marketing and Advertising Report. Retrieved from http://blogs.summerfuel.com/wp-content/uploads/2013/07/Goldie-Blox-Marketing-Report.pdf

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Teaching Note The GoldieBlox Video: Copyright Infringement or Fair Use?

Jessica A. Magaldi, Pace University This teaching note was prepared by the author and is intended to be used as a basis for class discussion. The views represented here are those of the author and do not necessarily reflect the views of the Society for Case Research. The views are based on professional judgment. Copyright © 2015 by the Society for Case Research and the author. No part of this work may be reproduced or used in any form or by any means without the written permission of the Society for Case Research.

Critical Incident Overview The critical incident stems from a video that GoldieBlox made that went viral on the internet. The audio that accompanied the video was a performance of the Beastie Boys song “Girls” with the original misogynistic lyrics changed to lyrics that were empowering to girls and women. GoldieBlox used the song “Girls” without permission of the Beastie Boys, who charged that the use of the musicians’ song without their permission was an infringement of their intellectual property rights. GoldieBlox argued that its use was permissible as a fair use, specifically arguing that the song was a parody with the empowering lyrics of the derivative work a comment on the misogynistic lyrics of the original work. The critical incident asks students to analyze the situation from the perspective of both parties and decide how GoldieBlox should proceed. The critical incident is appropriate for classes in business law, the legal environment of business, intellectual property law, copyright law, arts and entertainment management, public policy and ethics. It was tested in three business law courses at the undergraduate level. Research Methods The critical incident was written based on reliable publicly available sources, including documents related to the lawsuit between the parties. Accordingly, the names of the individuals, the firm and its location are the real ones. Learning Outcomes In completing this assignment, students should be able to: 1. Examine the underlying principles and public policy of copyright law in the context of a real-life situation. 2. Evaluate a party’s use of a creative work of another in light of the law of copyright and copyright infringement, specifically with respect to the creation of derivative works. 3. Analyze a legal defense from two perspectives to advocate for a position and to determine the strength of an opponent’s arguments.

Discussion Questions

1. How does the controversy over the GoldieBlox video demonstrate the tension between the copyright scheme’s countervailing rights of creators and the general public? (LO 1) 2. Does GoldieBlox’s use of the song “Girls” in its video come within the ambit of the Beastie Boys exclusive rights in copyright? (LO 2) 3. Consider the fair use defense to a claim of copyright infringement from GoldieBlox’s perspective. Analyze the facts and apply the facts to the law of fair use. What are GoldieBlox’s strongest arguments in favor of a defense of fair use? (LO 3) 4. Consider the fair use defense to a claim of copyright infringement from the Beastie Boys’ perspective. Analyze the facts and apply the facts to the law of fair use. What are the Beastie Boys’ strongest arguments in favor of a finding of copyright infringement and a rejection of the fair use defense? (LO 3) Answers to Discussion Questions 1. How does the controversy over the GoldieBlox video demonstrate the tension between the copyright scheme’s countervailing rights of creators and the general public? (LO 1) The history of American copyright law traces itself to the introduction of the printing press in the mid-15th century. The proliferation of printed and distributed material that resulted from the creation of the printing press led legislatures to create laws that began to explore the balance between the rights of authors to profit from their works and the rights of the general public to have access to an abundance of works. The Constitution of the United States recognizes the importance of intellectual property as an agent of innovation and created countervailing rights between intellectual property creators and the general public. Article I, Section 8 of the Constitution provides that: the Congress shall have power . . . to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. The Constitution envisaged a copyright scheme that rewarded creators in an effort to stimulate innovation and the creation of new works so that, ultimately, society as a whole would benefit. In essence, to encourage the creation of new works, authors were provided with a monopoly for a limited time on the commercial use of their work. In this regard, Section 102 of the Copyright Act offers copyright protection to “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device” (Copyright Act, Section 102).

On the other side of the equation, Section 102 makes explicit certain limitations on copyright protection. Specifically, Section 102 provides that “in no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work” (Copyright Act, Section 102). The Beastie Boys song “Girls” is an original work of authorship fixed in a tangible medium within the meaning of Section 102 of the Copyright Act. As such, the Beastie Boys (or the record label or other party who may own specific rights in the song) have the right to the protections of the Copyright Act. That right, however, is balanced against the rights of the general public to have, for example, the right to use the song when the copyright expires or the right to use the ideas incorporated into the song and to independently create a song based on those ideas. The general public also has the right to make certain fair uses of the copyrighted work of another, which includes the right of a thirds party to parody the original work, as is discussed more fully below. These rights can be exercised without the need for permission from the copyright owner. 2. Does GoldieBlox’s use of the song “Girls” in its video come within the ambit of the Beastie Boys exclusive rights in copyright? (LO 2) Section 106 of the Copyright Act enumerates the exclusive rights of copyright owners with respect to their artistic works, providing copyright holders with the exclusive rights to “do and to authorize” six categories of activities. With regard to musical works, these are the right to (1) reproduce copies or phonorecords, (2) prepare derivative works, (3) distribute copies or phonorecords of the works, (4) to perform the works publically, (5) to display the work publically, and (6) “in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission” (Copyright Act, Section 106). Any third party that violates one of the Section 106 exclusive rights of copyright owners would be liable for copyright infringement and subject to damages, including lost profits. These rights apply whether the third party knew of the copyright owner’s assertion of copyright or not. And, if a party did knowingly use the work of another, such party would be responsible for willful infringement and subject to treble damages. The use of the song by GoldieBlox without the authorization from the Beastie Boys was a violation of the second activity enumerated in Section 106. A derivative work is one that is based upon or includes elements from an underlying work. The GoldieBlox video’s incorporation of part of the song “Girls” creates a new artistic work – a derivative work – the video, which includes elements of the underlying work, the rights to which are owned by the Beastie Boys. This is most significant, of course, where the creator of the derivative work is different from the creator of the underlying work. In such case, the derivative work creator must obtain permission from the owner of the underlying work. The Beastie Boys’ exclusive right to prepare derivative

works includes the right to license others to do so and to prevent others from doing do. Indeed, MCA’s will is an indication that the Beastie Boys had a blanket policy not to allow anyone to use their works commercially. 3. Consider the fair use defense to a claim of copyright infringement from GoldieBlox’s perspective. Analyze the facts and apply the facts to the law of fair use. What are GoldieBlox’s strongest arguments in favor of a defense of fair use? (LO 3) The fair use doctrine is codified at 17 U.S.C. Section 107. It provides for the fair use of copyrighted work “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright” (Copyright Act, Section 107). Fair use must be evaluated on a case-by-case basis and Section 107 explicitly requires the consideration of the following four factors in making any determination: (1) The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) The nature of the copyrighted work; (3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) The effect of the use upon the potential market for or value of the copyrighted work. No one of these factors is dispositive. A determination of fair use can only be made when evaluating all of the facts together. The Supreme Court noted that the four factors articulated in Section 107 must be applied by courts “to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster. . . . [Rather], the doctrine it recognizes, calls for case by case analysis” (Campbell, p. 578). Furthermore, “[t]he four statutory factors [may not] be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright” (Campbell, p. 578). These considerations were part of the Court’s evaluation of the first Section 107 factor, “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” The Supreme Court has addressed two fundamental issues that arise under fair use that are relevant to GoldieBlox’s situation, whether parody can fall within the scope of fair use doctrine and whether all infringement for commercial uses are presumptively not fair use (Campbell). The Court noted the interrelated nature of these two considerations stating, the “more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use” (Campbell, p. 579). To satisfy this prong of the analysis, GoldieBlox must demonstrate, therefore, that the main purpose of the incorporation of “Girls” song into the video is not commercial but rather commentary on and parody of the underlying work. It is true that the parody and message is produced by GoldieBlox, a for-profit company, and that the video contains images of girls using products that are offered for sale by the company so, to be successful, GoldieBlox must argue

that the prominent feature of the video is that it parodies the limited view of girls espoused by the song. This demonstrates the highly transformative nature of the GoldieBlox work. The mission of GoldieBlox is to promote the equality of girls and woman in general and, more specifically, in their pursuit of engineering degrees and related occupations (GoldieBlox, n.d.). In pursuing the promotion of equality, GoldieBlox is dispelling the notion that construction toys are boy toys. The Beastie Boys song “Girls” casts girls as boy toys. The rewritten GoldieBlox lyrics can be seen as a parody of the Beastie Boys message formed by recasting the lyrics to state that girls are more than boy toys (Complaint, p. 6). The accompanying video also focuses on girls’ capabilities, as demonstrated by their use of GoldieBlox construction toys. This demonstrates that a purpose of the video is to comment on the ridiculous nature of the original song’s limited view of girls’ value. Moreover, the commercial benefit of the GoldieBlox work does not preclude it from the scope of fair use. A commercial firm is not precluded from engaging in parody and social commentary simply because it will have the mixed result of social commentary and promoting the business good will of the firm (i.e., it will have the commercial benefit of advertising). The second and third factors of the fair use analysis are often considered together. The nature of the copyrighted work informs the amount and substantiality of the portion used in relation to the work as a whole. It is uncontroversial that a popular song is musical creation and is “creative expression for public dissemination [that] falls within the core of the copyright’s protective purposes” (Campbell, p. 586). Turning to the third prong of the analysis, taking a small portion of a work or a portion that does not include the essential character of the work often argues in favor of fair use. In the case of parody, however, it is often necessary to the parodic purpose to use a larger portion of the underlying work. The Supreme Court has noted that “since parodies almost invariably copy publicly known, expressive works,” the use of a large amount of a work should not preclude a finding of fair use. Thus, “parody must be able to “conjure up” at least enough of that original to make the object of its critical wit recognizable” (Campbell, p. 586). In other words, a parodist needs to use enough of the underlying work to make the parody recognizable. Here, GoldieBlox must argue that the GoldieBlox parody uses sufficient components of the Beastie Boys song to make its parody recognizable. The fact that it is possible that the parody might have been recognizable if less had been used does not preclude the GoldieBlox work from fair use. Thus, GoldieBlox may argue that the second and third Section 107 factors favor fair use. Finally, in evaluating the effect of the use upon the potential market for or the value of the copyrighted work, GoldieBlox must argue that the GoldieBlox video is not a substitute for the song Girls either as popular music or for the purposes of advertising or endorsement. It is unlikely that someone looking to buy a copy of the song “Girls” would be satisfied that the video (or the music in the video) was an appropriate substitute for the original work.

In fact, to the contrary, GoldieBlox may argue that the success of the parody tends to increase the value of the Beastie Boys’ material for this purpose. The fact that the success and value of Beastie Boys songs for non-popular music purposes was untested in the market place left their value open to speculation. The success of the GoldieBlox parody has increased the market value of Beastie Boys songs for advertising or endorsement purposes by demonstrating that even not traditional Beastie Boys supporters (or perhaps even detractors of the group) may respond to their music in markets beyond popular music. The fact that the Beastie Boys presently state that the group will not use license its work for traditional advertising and endorsements does not change the fact that the GoldieBlox parody has caused no market harm. Thus, the fourth Section 107 factor supports a finding of fair use. 4. Consider the fair use defense to a claim of copyright infringement from the Beastie Boys’ perspective. Analyze the facts and apply the facts to the law of fair use. What are the Beastie Boys’ strongest arguments in favor of a finding of copyright infringement and a rejection of the fair use defense? (LO 3) Turning to an evaluation of the Beastie Boys’ perspective, we again look at the Section 107 factors for consideration in determining whether claim to fair use has been sustained: (1) The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) The nature of the copyrighted work; (3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) The effect of the use upon the potential market for or value of the copyrighted work. In considering the first of the Section 107 factors, the Supreme Court has rejected the suggestion that any parodic use is presumptively fair and made clear that the Copyright Act has no preference for parodists over their victims (Campbell, p. 581). In fact, the Supreme Court has indicated that different commercial uses will be accorded different prospects of fair use protection, noting that, the use, for example, of a copyrighted work to advertise a product, even in a parody, will be entitled to less indulgence under the first factor of the fair use enquiry, than the sale of a parody for its own sake (Campbell, p. 585). The Beastie Boys must cast the use of their song, therefore, as a misappropriation of their work that creates an involuntary endorsement of GoldieBlox’s products. While there may be parodic elements to the changed lyrics in the song, taken as a whole, the video is merely advertising meant to promote the GoldieBlox product. Turning to the second and third factors, the Beastie Boys must focus the discussion on the Supreme Court’s requirement that parody must be based on commentary on the original work, not simply an appropriation of the original work” (Campbell, p. 585). The analysis here is “to the persuasiveness of a parodist’s justification for the particular copying done” (Campbell, p. 586). Parody must be able to “conjure up” at least enough of that original to make the object of its critical wit recognizable, (Campbell, p. 588) but “where the parody is so insubstantial, as

compared to the copying, that the third factor must be resolved as a matter of law against the parodists” (Campbell, p. 588). This harkens back to the first factor of the analysis, the nature of the use. If the commentary has no critical bearing on the substance or style of the original composition, which the alleged infringer merely uses to get attention or to avoid the drudgery in working up something fresh, the claim to fairness in borrowing from another’s work diminishes accordingly (if it does not vanish), and other factors, like the extent of its commerciality, loom larger (Campbell, p. 580). Taken as a whole, the GoldieBlox advertisement was not parody of the Beastie Boys’ song “Girls.” The video had a simple message regarding the empowerment of girls in STEM learning, which was unrelated to the Beastie Boys and the specific content of their song. At best, the video was some generalized commentary applicable to other songs and other artists or the depiction of women and girls in popular culture. At worst, the video’s message is an encouragement to buy products, to which the Beastie Boys song has even less relevance. Furthermore, in making this generalized commentary, GoldieBlox used a substantial amount of the Beastie Boys work (virtually all of its melody, arrangement, and character). Were parody the true intent here, GoldieBlox could have made any parody by appropriating a more limited part of the song “Girls.” This overuse of Bestie Boys’ material also sets the GoldieBlox advertising also militates against a finding of fair use. The fourth factor involves an evaluation of the effect of the infringement on the market value of the copyright protected material. The consideration is not only the extent of market harm caused by the particular actions of the alleged infringer, but also “whether unrestricted and widespread conduct of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market” for the original. The enquiry “must take account not only of harm to the original but also of harm to the market for derivative works. This is relevant to the Beastie Boys “because the licensing of derivatives is an important economic incentive to the creation of originals” (Campbell, p. 592). Evaluating the proper market is essential. Here, the proper market for evaluation is the market for the use of Beastie Boys songs for advertising unrelated products and endorsement deals (Campbell, p. 590). GoldieBlox essentially proposes that GoldieBlox and any other entity can legally appropriate for free the music, image or likeness of another person or entity for the purposes of advertising, endorsement or both simply by casting it in the character of parody. If this were true, it would undermine the entire market for the licensing of music and images for advertising. Furthermore, the Beastie Boys have not allowed any of their works to serve as a component of advertising. This is a preeminent guiding principle for the Beastie Boys. It importance is emphasized by the fact that MCA memorialized this principle in his will. Since it is the right of all copyright owners to decide not to participate in any potential market for their products, GoldieBlox should not be able to take that away from MCA and the Beastie Boys.

General Discussion The critical incident deals with the copyright issues that come up every day in the workplace as an employee grabs images off the web to incorporate into a presentation, puts music behind a montage of pictures in a slideshow or includes data from another source in a report. In the current culture, many people tend not to give much consideration to the ownership rights of those who created the other work and this is a topic that resonates very strongly with students who are comfortable with using and adapting material that they find online. These issues are brought even more sharply into focus when the material is incorporated into a work that is disseminated widely on the internet and through social media, as was GoldieBlox’s viral video. The critical incident points out the difficulty of the determination of the fair use in commercial situations. At the same time, this incident emphasizes that businesses should be aware of the potential risks of using the creative works of third parties. Basic to a thorough analysis of this case is an understanding of social media marketing. In recent years, there has been an expanding growth in social networking and social media Web sites such as Facebook, Twitter, YouTube and LinkedIn. One of the most significant reasons for this growth is their viral nature. Social media, therefore, are considered an important aspect of promotion for businesses because the viral nature of social media can spread brand names and images of companies out across the globe. In addition to the benefit to the students in considering the substantive issues raised by the critical incident, students are sharpening their critical thinking and reasoning skills and abilities by using identifying the law and applying the facts to the law from two different perspectives. The instructor may pose the discussion questions to students considering the critical incident. In connection with the students’ task in analyzing the critical incident and deciding how GoldieBlox should proceed, students are asked to consider the situation from the perspective of both parties, an exercise that will assist in the development of critical thinking skills along with problem solving and decision making skills. As a way to increase the student interest in and engagement with the critical incident, the instructor may wish to ask them to take sides in the controversy. Students can vote on whether GoldieBlox should have asked permission of the Beastie Boys before using the song “Girls” in its video or whether GoldieBlox had a right to do so without getting permission and without regard to the wishes of the musicians. Epilogue Some months after GoldieBlox took the unusual step of filing legal action, seeking a declaratory judgment against the Beastie Boys to “vindicate the rights of toy company GoldieBlox in connection with a parody video set to the tune of the Beastie Boys’ highly sexist song “Girls” (Declaratory Judgment), the Beastie Boys countersued GoldieBlox for copyright infringement (Answer).

In March 2014, the contentious legal battle between two parties came to an end and they reached a settlement. GoldieBlox rereleased the video with another song, although they still claimed that they had fair use rights to “Girls” based on parody. And GoldieBlox agreed to pay $1 million to charities chosen by the Beastie Boys. (Dredge, 2014) References Answer and Counterclaims, GoldieBlox, Inc. v. Island Def Jam Music Group (filed Dec. 9, 2013), Docket No. 2013 CV 0428 N.D. Ca. Campbell v. Acoff-Rose Music. 510 U.S. 569 (1994). Complaint for Declaratory Judgment, GoldieBlox, Inc. v. Island Def Jam Music Group (filed Nov. 21, 2013), Docket No. 2013 CV 0428 N.D. Ca. Dredge, Stuart (2014, May 13). GoldieBlox agreed to pay $1m to charity in Beastie Boys settlement. The Guardian. Retrieved from http://www.theguardian.com/technology/2014/may/13/goldieblox-beastie-boys-girlssettlement GoldieBlox (n.d). About page. Retrieved from http://www.goldieblox.com/pages/about U.S. Copyright Act, 17 U.S.C. Section 101 et seq.