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Last night, the annual Grammy awards took place and brought together some of our favorite musical acts together in a night intended to point out the best of the best in the music industry. We now know that Taylor Swift’s 1989 was the best record of the year and that Ed Sheeran’s “Thinking Out Loud” was the best song. We saw Lady Gaga do a tribute to David Bowie and heard Adele struggle through a sound-challenged performance.

There is nothing like a night of seeing celebrities dress in fancy clothes and receive high-valued gift bags to reminder us that they are nothing like us. Or are they?

While there is a lot in life keeping us every day folk from mixing and mingling with the elite of the music world, there are some challenges that face even the biggest named celebs just as much as they face the average business owner.

So, in honor of the Grammys, here are three big issues business face all the time that not even the musical alum are immune to:

Kanye West and Nike: What Can You Say After a Failed Business Transaction that Isn’t Defamatory?

Kanye West is not known to be a discreet, modest person. When he isn’t happy, he lets you know. In fact, since this is a Grammy-inspired post, it makes sense that an example of this rash behavior can be seen at a Grammy of year’s past, when he took the mike from winner T-Swift in order to announce that Beyonce should have won.

And when his deal with Nike over his Yeazy shoes fell through last year, he was just as quick to tell people what he thought about the company. However, those were just his opinions. That changed on New Year’s Eve when he dropped a new song called “Facts.” Which, based on the title, might imply that he thinks the lines he’s spitting are more than just his thoughts on a deal gone bad, but actual truth.

You might not want to read the lyrics if you are at work, but here is a sampling of the “Facts” on the Nike issue:

  • “If Nike ain't have Drizzy, man they wouldn't have nothin', woo!/ If Nike ain't have Don C, man they wouldn't have nothin', ooh!”
  • “Nike out here bad, they can't give [expletive] away”
  • “Nike, Nike treat employees just like slaves/ Gave LeBron a billi' not to run away (Yo!)”

In the follow-up to the release, many experts and critiques came to a similar conclusion: Nike could just have a pretty good defamation suit here if they wanted to pursue it.

This got me thinking. Business deals fall through all the time. Even though one side or the other might not use their rapping skills to destroy the other party, sometimes things are said, on social media or in a press release or just to people on the street, that maybe shouldn’t have been said.

So here is the question: what exactly can you say after a potential business transaction falls through that won’t lead to a defamation suit?

Here are some tips:

  • For starters, don’t say anything unless you have to. If it is a high-profile deal, then you might need to give some explanation for why it didn’t work out. However, give that information on a need-to-know basis and only state what is necessary to reveal. It won’t help you in future business deals to be seen as a loud mouth, and it could hurt you in court.
  • Always stick to the facts – the actual facts, not the Kanye-endorsed facts. A defamation suit revolves around the fact that the statement in question was false. If you stick to the truth, then you should be in good shape. It is only when you start adding your own opinions and spin on events that you start to get in trouble.
  • Always be cognizant that what you say online or to the press is more far-reaching than you realized. Just because you don’t realize how many people are listening, doesn’t mean they aren’t there hearing every word you say (or post online). If you bad-mouth someone you used to work with or do business with, there is a good chance they will find out, and they may not be happy about it.

Happy Birthday to Everyone: Who Owns that Copyright Anyway?

Up until recently, if you went out to eat on your birthday, the restaurant could sing to you, but it had better have its own unique song. It isn’t that the birthday song is too boring for the wait staff at your local food joint so they had to come up with their own, catchier version. It’s that “Happy Birthday” was copyrighted and so the Applebee’s of the world couldn’t use it without coughing up some cash.

But wait. Was it copyrighted? Up until recently, Warner Brother would have told you that yes, yes it was copyrighted. Not only that, but that the WB owned that copyright. However, last week, the company settled a lawsuit for $14 million that said it did not actually own the copyright.

You might have heard about this late last year. The case gave us all a birthday gift by placing the song into the public domain so that all of us may sing it in public without having to pay an exorbitant fee to WB, who thought they were going to keep control of the tune until 2030.

Which brings us to another issue for business owners: just what do you need to do to truly protect your intellectual property and keep it under your domain instead of the public’s?

Intellectual property law is mighty and complex, so this post isn’t going to give you all the details you might need. However, here are some good starting pointers for you:

  • Make sure employment agreements state that inventions, lyrics, creations, etc., that were created while an employee of the company and as part of the employment duties are the property of the company.
  • Fill out and keep up to-date the paperwork relating to patents, trademarks, and copyrights.
  • Make sure you aren’t letting people use your trademarks and IP freely. I can call the medicine I take aspirin, even if it wasn’t produced by Bayer, because after the term got out in public and was used loosely to describe similar styles of pills, the term became generic and lost its trademark-ability (which is a word coined just now, so I call trademark). So make sure to protect your IP from similar fates.
  • Take action when your IP rights are being violated. If you see an employee or someone else who is not respecting your IP ownership, then make sure you take the proper steps to stop this as soon as possible. The longer you wait, the more complicated everything can get.

Kanye West (Again) and Martin Shkreli: What Exactly Is a Contract?

As Kanye himself would tell you, any post on the musical elite, even if it is only talking about legal issues faced by the musical elite, would not be complete without copious mentions of the greatest living artist and greatest artist of all time (his words, not mine). However, in this case, Kanye’s inclusion in this section is only incidental. It is really about music’s greatest hater, Martin Shkreli.

If you don’t remember, Shkreli is that guy who raised AIDs medication prices by an astronomical percentage, called Congress imbeciles, and bought the world’s only copy of a Wu-Tang Clan album so that he could keep it from people. In other words, he isn’t going to win any man of the year awards any time soon.

Now that he has set himself up to be the Grinch of the music world, last week Shkreli sent Kanye an official offer letter (submitted through Twitter) offering to buy the exclusive rights to Yeazy’s album, which at the time was rumored to be dropping soon. Surprisingly, Kanye did not jump on this offer.

At the rapper’s silence on the matter, Shkreli informed the mogul of his legal rights: he was obligated to make the offer known to the record label and, therefore, he could not release his album as planned.

Now, if you have been listening to The Life of Pablo on Tidal (the only place you can listen to it) since Saturday, you know that Kanye did not, in fact, hold off the release. So what happened?

Depending on what Kanye’s contract with the record label says, for all we know, a serious offer might indeed need to be made known to all deciding factors. However, sending a letter through Twitter last minute before a release date asking to buy it more than likely would not count as a serious offer.

Now, admittedly in the case of Shkreli, this was all completely ludicrous. However, it is a good time to remind everyone about some basics of contract law. After all, Shkreli himself is a business man, and he does not appear to know as much as one might assume.

A contract is created when there has been an offer, an acceptance, consideration, and mutuality. In this case, there has clearly not been an acceptance.

Here are some tips on entering a contract:

  • Make sure you are careful with what you say in response to any serious offers made to you (or just in general so people don’t think you are making them an offer they don’t want to refuse when you weren’t trying to create a contract at all). While there must be some mutuality of minds to form a contract, which makes it hard to accidently form one, if things you say imply that you meant to make or accept an offer, a contract could still be found.
  • Try to get any contract in writing. Yes, verbal contracts are viable. However, they can be a lot harder to prove.
  • When you are trying to create a legally compliant contract, use some legal aid. Using legal help now can save you a lot of legal trouble later.

The Takeaway

See? You really are no different than Kanye West. But with a little preparation and guidance from legal counsel, you can live the Kanye life with a lot less legal ramifications for your business.

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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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