Ask a Creative Lawyer . . . .with Dave Ratner

February 22, 2023

Dave Ratner moved from skiing to managing bands into law, and now works with creative companies out of Boulder, CO to understand how to maneuver so many different new opportunities in music.  He talks of innovation in his own life as to how to add capabilities, learn by doing, and then add that in with great creatives. He shares wisdom in how to evaluate risk, plan for success, and use both common sense and contracts to decide what innovations to pursue and how to understand the questions under the legal hood.

Guest: David Ratner, Managing Partner of Creative Law Network

Following a career in the music businesses as a tour manager, publicist, band manager, and founder of his own management agency, Dave Ratner is now the Managing Partner of Creative Law Network, a boutique entertainment law firm in Colorado. Dave counsels clients throughout the music industry on everything from contracts and licensing, to intellectual property registration and protection, to dispute resolution. He is a graduate of Cornell University and the University of Denver College of Law. Dave is an adjunct professor at the University of Denver College of Law, Chair of the Entertainment & Sports Section of the Colorado Bar Association, Advisory Committee Chair of Colorado Attorneys for the Arts, Vice President of the Swallow Hill Music Board, Secretary of the Board of the Colorado Independent Venue Association, and speaks frequently on entertainment law issues throughout the country.

What are you most passionate about with your current work? : Helping artists succeed!

 

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Transcript
Gigi Johnson:

Join us for Dave Ratner talking about skiing, management, law, and new digital opportunities for artists.

Gigi Johnson:

Dave, how did we meet?

Dave Ratner:

It was probably through Storm. I think everything good happens through Storm Gloor.

Dave Ratner:

Because of the conference, the "oh my gosh, we can't leave our houses we need to talk to people" conference.

Gigi Johnson:

Or the first two years of the Amplify Music Conference which Storm and I created when we got stuck not getting together for South by in 202o.

Dave Ratner:

Right.

Gigi Johnson:

So we wanted to bring people together, we thought it's just a few weeks notice we will drag people together and you quickly came to the fold. So that's how we first met? And can you explain to our wonderful listeners and viewers on the YouTube channel? What you do, and then we'll go down the rabbit hole of how you got here.

Gigi Johnson:

Sure, I'm an attorney. And so I run a law firm called the Creative Law Network. And so our law firm is focused on providing legal services to creative people and businesses.

Dave Ratner:

That is a short version.

Gigi Johnson:

We were talking and you said no one's been on the show to talk about the legal side of all this and how innovation ties in with loss. I'm so glad you suggested that. And so glad that we're able to kind of deepen our conversation after a couple years of bumping into each other digitally and actually not in person, which is some of the funds of the interwebs. Right. So you are in Colorado, in Denver proper?

Dave Ratner:

Office is in Denver, and yeah, we . . . the thing is as even before the pandemic, but certainly now, we represent people that are everywhere. And it's a wonderful ability to do that. I'm licensed to practice law in Colorado and in New York.

Gigi Johnson:

Not in beautiful California.

Gigi Johnson:

No, it's a little tougher in California. He goes he can keep a tight ship there. Can't let anybody in.

Gigi Johnson:

I'm really sorry about that. So were you -- I tend to drag people back into kid and teenagehood -- were you a kid that was interested in related fields? Were you a musician? Were you someone who loved to poke in this stuff? What was what was the young Dave like?

Dave Ratner:

I certainly loved music. I can't say that I was a great musician. And that will definitely that ties into the path I took to get here. But certainly always into music and video, my brother and I used to make little videos and do lip synching karaoke all that sort of stuff. I did play trombone but not particularly well. And so it seems like the music jeans my brother actually does play in a band some of the time now. And a dad band, you know, but but it was always never . . .

Gigi Johnson:

I've never heard the term dad band before

Dave Ratner:

Oh, very popular in the suburbs. Absolutely.

Gigi Johnson:

Man caves and dad bands, okay.

Dave Ratner:

And really always was very much into music and media and then, when I started going to see live music, that really lit a fire because the the live experiences is so visceral can be so much fun can be so enlightening. And is generally enjoyable. So

Gigi Johnson:

So when you say music, what bands what type of music? What was your jam?

Dave Ratner:

Funny you say jam. I started listening to the Grateful Dead when I was 10 years old. And yeah, so that the the path was usually I saw a lot of Grateful Dead shows. I saw a lot of Phish shows I saw a lot of String Cheese Incident and Widespread Panic. And that led to me getting working in the music industry, come my mid 20s. So I think as a younger kid, it was very much the top 40 The Casey Kasem Countdown. If that doesn't date me too much.

Dave Ratner:

I was gonna say my commenting on that would date me as well. Where did you grow up?

Dave Ratner:

I grew up in New York.

Gigi Johnson:

So that that then led you to Cornell? Yes, no.

Dave Ratner:

Yes. So I grew up in downstate New York. I went to undergrad at Cornell. I graduated Cornell and packed my car and drove straight to Colorado. I mean, if you asked me what I wanted to be when I grew up, I would have told you I want to be a ski bum. And so the first thing to do is to go make sure I skied as much as possible before . . . getting a real job.

Gigi Johnson:

There's skiing at Cornell. Just not really big slopes.

Dave Ratner:

Oh, I did it. I was on ski team for years at Cornell and then four years in high school as well, but I can't recommend it after you've skiied out West. It's great. Don't get me wrong. It's great things is a different sort of thing. It may train. I will say that skiers who grew up skiing on the East Coast are great skiers wherever they land elsewhere. But I wanted a little bit more, a little more in the Ski World. So yeah, so I moved to Colorado, I lived in Telluride, and I just skied every day, for a few years. And then after doing that for a few years, I realized I better get out of there, I would never get out of there and move to Boulder, Colorado. And, in Boulder . . .

Gigi Johnson:

Is it that much different?

Dave Ratner:

Well, the funny thing is, I thought I was moving to the real world by moving to Boulder, because Telluride is definitely not the real world. And boulders certainly provide a lot more opportunities. I got a number of jobs, this is occurring Dot.Com days and the 90s. And so had a number of jobs in Dot.com world. And by 2001, I was working for actually a great company, I was, at my age had a good job with benefits and the salary. And I said to myself, I don't care about this work at all. I'm sitting at a computer all day. And I don't want to do this for the rest of my life. And therefore I quit. And being the idealistic 20, something that I was, I said, Okay, I want to do something I'm passionate about, what am I passionate about? I'm passionate about skiing, I passionate about music. I've already done the skiing thing. So I'll try music. And as I said, I was very much in the jam band scene at that time. So I called up my favorite band in Boulder at the time and said, "I want to work for you." And they said, "Well, you could like, make sure our CDs are in stores in the towns that we're going to play in. I said "that . . . I want to do something full time. I really want to sink my teeth into this." And they said, "Okay, well come out on the road with us. You can sell merch, and basically be a roadie."And so I literally got on the bus and started selling T shirts and CDs and, and hauling gear and I learned to drive the bus. So I was driving the bus around the country. And it's a great way to learn about the music industry to be on the road and just be out there doing that day in and day out. And after doing it for a while the band didn't have a tour manager at the time. So I kind of basically adopted the tour manager role and started really planning out the tours and making sure we've got all our hospitality etc. Set up. And basically, after doing that for a while the band was self managed and didn't have a manager and I started taking on management duties. And so I became over time became their manager. And after managing and tour managing and trying to do this all on the road when we didn't have iPhones and we didn't have all the Wi Fi everywhere, it was quite challenging. I would spend my nights and Kinkos, printing out posters and shipping posters, and handbills all over the country and I got off the road, I set up an office in Boulder, I started managing other bands. And so start a little management agency. And again, learned a lot more just by doing it and shared an office space with other managers and agents and merchandise folks. And so again, had a great community around me to help me learn my way around the industry. And basically, from beautiful Boulder and also where there's so much live music coming through. We've got a lot of venues in Colorado, a lot of talent in Colorado. And so it's really a great place to be, especially at that time. And and really be able to interact with folks on a lot of different levels and still go out on the road when needed as occasionally that did happen. Yes, that did happen. There was there was some skiing, and really . . .

Gigi Johnson:

And did this then lureyou into law?

Dave Ratner:

So, the thing about being a manager is you get handed contracts. Yeah. And you suddenly need a lawyer to read those contracts. And there was one lawyer in Colorado that I knew that understood the music industry. And she was wonderful, but she was one person. And I realized what I love about being a manager is I am helping musicians, I am helping artists with their business. The artists can go make art, I can run the business, right, they can go play music, I can handle emails and the marketing and the business and the contracts. And basically realized I could do more for artists if I had this law degree and actually knew what I was doing around contracts. And also learn so much more about the rights and publishing and the labels and all these other things that can be a little hard to grasp at the initial stages. So I ended up closing up shop and go to law school. And realizing that there's all these things that you learn these things in law school, all these different things apply about your contracts class, and your intellectual property, law and rights of publicity, and all these other things. So that when I got out of law school, I was able to go and start representing artists. And that expands not only to just music, but a lot of the same legal concepts apply throughout the creative industries. So it's music, and it's film. And it's graphic design. And it's authors and publishers, and on and on and on. And so that is how I ended up practicing this area of law. And 10 years ago, after practicing with a small firm, who was great to kind of help me get things started and get me on my feet, I started my own firm, I started Creative Law Network, back in 2012.

Gigi Johnson:

So you're kind of living your best life, you're doing music, you're living in a great town, a great community, you're connecting with great artists that you can make things work on many media, including visual, and I'm assuming you're still skiing.

Dave Ratner:

I am still skiing.

Gigi Johnson:

So I'm going to bridges then after that, that great kind of pivoting innovation lens you've had of your own life as to how to add capabilities, learn by doing, and then add that in with great creatives. Let's then talk about that with what's happening with innovation. There's so much and we've got five years of this podcast talking about innovation, stepping into change music, and in some cases, it's people coming from the artist lens, which are kind of coming from the management lens on that side, or they're coming from the technology lens, and they see, oh, we need to have this change. And then somebody pilots it and experiments it. And then sometimes it gets to be a common sort of language of business and changing contracts and changing the way we work. What are you seeing as kind of elements of innovation that need attention from a legal point of view? Or that might be ones where you look at it, you go, ah, opportunity or ah, trouble?

Dave Ratner:

Well, if the ones that need attention from legal point of view, is probably all have them. Because unfortunately, in general, the law is the last one at the party. The law does not change quickly. It is not nimble, easy example, the copyright law. So copyright governs all sorts of creative works, right? It's where we own a piece of music, because we own the copyright. Copyright Law was last significantly refined or revised in 1976. Okay, now, we've made little changes along the way. And we will always keep doing that. But the process is slow. Usually Congress will ask the copyright office to make recommend to do research report, make recommendations, they'll take that into consideration. Sidebar, Congress has other things to do. Right. So it's not top of their list. And not to say the law has not changed in '76. But, for example, when we have issues where there's an infringement of music online, and we want that music taken down, we submitted takedown notice that came from something called the Digital Millennium Copyright Act. That's from 1998. I'd say the Internet has changed a little bit since then. Right? And so we there actually was a music Modernization Act a few years ago, right? It was 2018, I believe. And that gave us the MLC back. So we have those innovations. Right. But it's not like oh, NFT's let's go change the law for NFT's. Oh, we're, you know, we're, we're, we have AI, creating music, let's go change the law for AI. Just, it doesn't happen that quickly. And what we end up doing a lot of the time is we take the law that we have, and we try and mix it and mash it and figured out what does it say about this new thing that the lobbying know about when we drafted that law?

Gigi Johnson:

So I have a dorky, non-lawyer question. So I'm a regular person wanting to start a new technology company. How do I figure out what new things are already out there bending and bending the law? Or how do I figure out what trip wires I could be walking into? Is there a great I'm assuming not every music lawyer can wrestle well with the challenges of innovation and law.

Dave Ratner:

Yeah, I think that's true, I think. But to answer your question about if you are that person that really wants to be a disrupter, or come up with something new. What I mean, my role when I'm working with clients like that is to say, Okay, well, this is what the law says. And most innovators are going to part of the creative process is to look at what else is out there, right? We don't want to do . . if someone's already doing it . . . What's that ?

Gigi Johnson:

Most don't. I run into music innovators, and they go, I'm doing X, no one's done it before. I said, May I introduce you to six companies?" And those are just the ones I know, off the top of my head. So there's a lot of not doing,

Dave Ratner:

Google is a great tool. So I mean, but here's the thing, I will say, what we will do when dealing with innovation, we will try and say, "Okay, what's close? Who else is doing something similar? How are they doing it? What successes have they have? What failures have they had?" And there is also, when, for better or worse, what often ends up happening from the legal side is it's like, maybe we don't know. And we just have to take the risk. A lot of honestly, a lot of my job as a lawyer is talking to clients about risk, right? What is the risk of this path? What is your risk tolerance? Right? Because it's not my job to make decisions for my clients. It's my guide my job to counsel my clients, right? Whereas our counselors, and so let's evaluate the landscape. Let's see how it applies. Let's play it out in a few different scenarios. And, and then talk about, let's try and think a few steps down the road. If this this and this happens, where are we, and every client is there in every project, every innovator, every client is different when it comes to that.

Gigi Johnson:

So if I'm a an artist, and I'm taking a look at innovation, I tend to think, from my experiences, that artists have the option with a new tech to legally license with realizing they may or may not get paid out on this license, because there may not be revenue that's necessarily attached with a new tack. I could use a new tech as a service to be able to create music. And then I'm thinking will this be around when I even want to do something a year from now on it? Or potentially I'm taking somebody to court because they're grabbing my music to use in a new tack? Are those the sort of three normal scenarios or what other sort of scenarios from the artists point of view are the opportunities or challenges with new technology?

Dave Ratner:

I think it depends on which side of the technology the artist is on, came out weird which side of technology the artist is on or which side of the innovation the artist is on, because there are certainly folks who want to be on the cutting edge, you want to be testing and trying and experimenting and failing. And there's others who are kind of playing it safe and saying, Well, someone else has done this now I feel okay doing it. Certainly when it comes to using third party technology, we are, as you said there's a risk is that technology going to be around? That's a risk. But and but also, the person who is more on the cutting edge more willing to try new things is going to have a higher risk tolerance probably is going to be more comfortable taking that risk that the technology may not be around. And the person who wants to sit back and wait. They're in the BSA in a safer position with less risk.

Gigi Johnson:

So what what type of things do you see with your clients?

Dave Ratner:

Oh, man, I see a lot of contracts, which is good. We like contracts, contracts protect us. They're good tools to have. And I think when it comes to the I mean, when it comes to technology side of things, I see, really I see the spectrum of kind of what I was just saying where I see the spectrum of people who are comfortable or uncomfortable with those that experimentation. And I think what's the other side of it from the from my seat that is interesting is going back a moment to the copyright law, bending the rules, trying new things that the rules don't know how to handle, right. So AI is an easy example. Okay, because we have AI that is creating music that is creating visual art. The Copyright Office has told us that a creative work that is created by a computer or not created by a human is not subject to copyright protection. The computer cannot own a copyright.

Gigi Johnson:

When . . . when and how is that framed, because I thought that was still a loose end.

Dave Ratner:

It is . . it . . . The reason it's loose is because it's not only up to the Copyright Office. Copyright Office, you apply Under the Copyright Office for copyright protection, and they will grant it or not. Right. And so, but these, this is one of these things where it's like, the, we need to study this, we need to figure out a solution, because it's not going away. We're getting more and more AI creators . . .

Shain Shapiro:

New one every two days right now.

Dave Ratner:

Right? Right, exactly. And so the problem is, who owns those AI-created works? Now, what the, if you are someone who is, let's say, wanting to use an AI tool to create music, okay, you can go and surely we can go and do that. We can act like we own that music that we created, because we say, well, we had the input as our input into that into that tool. And we're gonna go treat that like it's our own. Now, you were saying a little before about licensing the rest of this stuff, while we look at who created that AI? And what are the terms that AI say, what who do who does own the output from that AI, a lot of people don't realize how ever present contracts are in our lives. And the example I can give you is, every time you download an app, every time you visit a website, every time you're using a digital tool, you are agreeing to a contract. To go to a website, you'll see at the very bottom, there's like terms and conditions that says Terms of Service, you click on that link, you'll get a whole bunch of contract language. It says you are using this web site . . .

Gigi Johnson:

Go into very one-sided can edit contract, that you're coming in saying yes, implicitly by my using this website, at this moment in time, is terms of service are valid for me. But the website has the unilateral ability to change its terms of service, and hopefully notify you but maybe not. And you're still kind of in the boat. When you click that you've sent your list. Implicitly, I see the terms of service. And I agree, though no one reads them.

Dave Ratner:

Nobody reads I write them. Nobody reads them. But that's exactly. And this actually is important because there's so many concepts in the law, that can be confused, because it's very easy to think of a contract as a piece of paper that two parties negotiate and everybody signs it at the bottom. Yes, that is one type of contract. But a license is also a contract terms of service, they contract privacy, or privacy policy is like a contract. So I'm using the term more broadly, but these are all documents, it's all language that binds us that are that control how we do things or what we can or cannot do. And so when you go and find this tool, like going back, there's an AI tool, it's going to hate and help me create music, there should be Terms of Service that come with that tool, ideally, that are going to dictate who owns what, from the output of that tool?

Gigi Johnson:

And it's an interesting question, because, okay, I use a digital audio workstation and that da, I use a plugin, and that plugin uses AI, or some kind of machine learning piece of it, I wouldn't conceptually think that the DAW should have a right to have any kind of royalty stream for my work. But if you keep going down that rabbit hole, that Unity and Unreal, if I'm remembering correctly, take rev share off your revenue, but they don't own the way. So you have there's other pieces of contracts here that you might have then residuals of some kind, that are now part of a lot of these more modern creative tools in this lovely creator economy. And for those who are listening, you're not seeing my air quotes that I'm putting on it. But the Creator Economy is a lot of people putting out you know, the shovels for the gold miners who are then off creating, where they may or may not have any rights, or that you've got you know, you're paying in in your I'm spending a lot of time right now creating in unity, which is a whole other crazy thing I'm working on right now. So that you're bringing in assets, including audio assets that are from all sorts of places, and then putting them all together. And depending on what that music site is, you may or may not then have, you've got all these puzzle pieces, because we're generally not creating a piece of content from I'm voice recording myself, we're doing an original instrumentation. So we've got this new kind of new ish layer cake of inputs. And AI is now part of many of them. Or it could be that I'm having it to the whole thing, which is some of the new pitches. It's you know, here's a completely or AI reconstructed piece. So then you get to the question of, you know, who owns the underlying this? This is a rabbit hole. I go down with people a lot right now, who owns the training data? Did I learn basins anything about the training data? And so there are people who are using hip hop music as training data and creating new hip hop artists, or they're going in and using YouTube videos as training data. So what's the case law or, or hot stones in the road with training data and AI?

Dave Ratner:

Well, I think one thing I want to make sure to cover quickly from what you were saying is the distinction between ownership and revenue, or royalties. But because there is a common, I'd say misconception that those have to be married to get that if you're going to get some revenue from it, that means you have ownership in it. And that is absolutely not the case. So I deal with this frequently, with producer agreements, right, so an artist hires a producer, the producer is helping to create this sound recording or this master. And generally, what the law says is that if multiple people create a copyrighted work, they're co owners of that work. But for a standard producer deal, you're going to have a producer and an artist creating the sound recording, the artist is going to own that sound recording, even though the producer will get a royalty from it. So root . . . producer will get a percentage of the revenue that is generated by that copyrighted work that sound recording, but they don't necessarily ownership of it. So even if you are working with Unreal, if you're working with any sort of engine, or technology or person that is helping you create, that doesn't mean that they necessarily get any ownership percentage, even if they are going to be do some of the money. And ownership is really important, because that's how we control what happens to those creative works, what they go do in the world.

Gigi Johnson:

Another reason to have things in writing with a contract.

Dave Ratner:

Hey, you're doing my job for me, there you go. I say it a lot. Yes, we want things in writing. Contracts are great tools. And I'll also very briefly say, a contract doesn't have to be a super complicated document full of a bunch of legal mumbo jumbo. But a contract just has to tell a story about a deal. And include the important deal points. The actually in law school, in your contracts class, if you went to law school, do not go to law school, I'm not encouraging you to go to law school. But if you did, and you went and you sat in your contracts class, you will hear there's a case we have case law about these guys in a bar, they were to contract on a bar napkin. And the court found at that contract, that bar napkin was an enforceable contract. Now, I do not encourage people to write contracts on bar napkins, I do not encourage people in bars . . .

Gigi Johnson:

Yeah.

Dave Ratner:

But the point is, yes, contracts don't need to be intimidating. And to your point, I guess you want to have it in writing whatever the deal is, with the people or things that you are creating with or with whom you are creating.

Gigi Johnson:

On both sides. And, you know, so I am both the artist or whoever is actually owning what becomes the underlying copyright. I would like to have it not just be verbally and implicit. But I would like to have it . . . a work for hire contract or whatever it is, with the parties I'm working with, as well as I want to if I'm one of the parties, not just take a standard contract and take it but realize you also have some options there. That could be another two hours talking about the, you know, back again, contracts and all the other fun stuff that goes with that.

Dave Ratner:

We can do that next time. But yes, you're absolutely right. And yes, those things are entirely these things are negotiable. But having the deal points in writing protects everybody. Because so it's interesting. Well, to me, as a lawyer, it's interesting that verbal contracts can be enforceable. But in copyrights. So for musicians, and creatives, the transfer of a copyright or the exclusive license of a copyright, so if there is a work for hire where I'm hiring you to do the work, and I'm going to own the work, or if it's an exclusive license, like a record deal where they have the exclusive license to to produce that music or I'm sorry to reproduce that music that has to be in writing. So is this a copyright law is one of these areas the law were to be enforceable, it must be in writing. So verbal contracts can be enforceable, but not in these copyrights situation.

Gigi Johnson:

So with new technologies, then I know that one of the issues that people have had is that, you know, we might be talking about tiny amounts of initial revenue, and yet they're going to be having to pay lawyers on both sides to document it. And then and then some . . . Some new tech folks are not quite sure why in the world. Labels are people who own libraries don't want to mess with every single technology that walks in the door, because they're not going to sign your standard contract you hand to them. And so you end up having, you know, it's not costless, to step in and say, Okay, we'll do something as a pilot. Are there things that you've run into in that realm with clients on either side?

Dave Ratner:

Sure, I mean, I've certainly run into the situation you're describing. And it is an n funding legal fees is always an issue, or not always is frequently an issue, certainly. And so we look, we try and come up with creative solutions. And that is really why I got into practicing law to begin with, right was because I needed a lawyer and I couldn't find one that you know, so I became one, basically. And so there, there can be I mean, I think, if you're in that situation, where you see there's a need for a lawyer, but maybe you're not sure of the budget for legal, it should be a conversation. I mean, I always tell people, if you're going considering hiring a lawyer, you should be able to interview them ask about their fees as well, what's this going to cost you? You're hiring a service provider, in my opinion, anyway, and you still have the right to interview as many as you want. And I do that, for our firm anyway, we do free consultations for anybody, because I would not expect you to pay me until you get to talk to me and tell me and I decide whether you like what I'm talking about. So at that, and in that conversation we could talk about, okay, here's my project, what do you think it's gonna cause actually be part of the conversation?

Gigi Johnson:

So Dave, what other type of tripwires around innovation and music do you run into?

Dave Ratner:

I think one of the common pitfalls in innovation and in music, separately and together is when you have multiple people working on something together, there should be a clear agreement about the deal among those people. And it can be hard because a lot of times we don't know where we're going to end up, we don't know where we're going. And ultimately, part of my job is to think about all the different possibilities. And then make sure we're covering all those possible scenarios. So that when that great new thing that you did, it's when it takes off, we're that then scrambling to figure out who owns what and who gets paid, because we dealt with it at the front end. So really having and those can be tough conversations. But it's an important conversation to have, it saves so much heartache. And unfortunately, legal bills, when you have to fight about it later.

Gigi Johnson:

There's another one I want to bring up because I just ran into my one of my good acquaintances has now sold and bought back to different companies, for selling his creative technology company, to people who prove to be I'll put it as jerks. And so essentially bought back their child. And I was I had lunch with a friend I haven't seen forever, who did the same thing. He had a creative technology company, where he then thought this is the right place for this new technology and creative system to go that had IP attached and and then once sold, ended up not his issue is different, which is also a legal issue because he assigned a, a noncompete and other things. And so he sold his child to people who are not people he was happy with. And then he personally was attached to it for time. I'm assuming you run into some of these puzzle pieces. Are there things that other than spending time with people and realizing that they're they are jerks? Or that they have something that you don't like that they're going to do with your content? Is there anything in terms of you'd love people, they they they create these things, so they kind of a buyout, that that's their their planned exit strategy, to sort of think about some of these puzzle pieces if you have an innovation, and you're hoping that someone will catch you out to think earlier. I know this is a very maternal thing. Anything for legally to think about with that are setting it up? Well,

Dave Ratner:

I think yeah, I think it really will depend on the transaction. Because what because I think when you're in that situation where you're contemplating the sale of a technology or a business, that what is your relationship with that person, or that company that people who hopefully will not be jerks, right and is there can we do any sort of dry run? Can we do any sort of test period can we eat is our way into it. Sometimes we can. But this is also true. I mean, this is true in deals in general. I, when someone sends me a contract and says, Hey, can you look at this contract? My first question is, tell me the story. Who is this person? How did they find you? Or how did you find them? What is your reaction been like so far? What does it feel like? What are you thinking? What's your gut on this? It's not rote. It's not just sticking things in the right boxes, it's like, it's more, it's a more creative process, where it can be anyway. So it is hard in this any kind of prototypical sale of a business to an outside party, it's hard to put in those clawbacks. Because once it's gone, it's gone. It's like you sell your car to someone, they got crashed the car, not much you got paid, there's nothing you can do about it. Now, if it's more like, something a little closer to your heart, let's say you have a dog, and you can't keep the dog in your house anymore. You moved into an apartment that doesn't allow dogs, but you can give it to your friend and you'll have visitation rights with your dog. Okay, so is there a way when you're granting this technology to this new person? Can we have visitation rights? Can we maintain? And it's so it can do you have a seat on the board, right? I don't know how big this company is. But the purchasing company has a board, you have a seat on the board, you have some sort of right of consultation, you have some sort of say in the next generation. It goes in a lot of different ways. And so that's where it's kind of case by case.

Gigi Johnson:

Well, we've had a great conversation with this and made me then think about every contract in my life. And it does remember your story. So I come off and our 12 years of teaching music industry students at UCLA and and I always comment that every band and every new business should should assume that they need to essentially structure in a prenup that all companies with very few exceptions end. And so for me and me being a banker for 10 years, I was very much doing a lot of workouts and things that go wrong. And so it's always like so what's the end game of any deal? Contract band music group venue, when you close? And when you end? Who decides and when do you leave? Right? And I would say the Novation it's even more open ended because you don't know where you hypothesize where it's going with a new tech. But you don't really know what the takeout looks like. Any insights or words of wisdom in the when? When thing when that when the doors close things to think about earlier or examples?

Dave Ratner:

Yes, well, I think the band is a great example. Because, yes, we want the band to have a band agreement. And the hardest conversation in drafting that band agreement is what happens when somebody leaves. Because it's gonna happen, right? And how many bands out there have those same members from the beginning, it's pretty rare. And what uh, however, that's a hard conversation because it contemplates something bad happening. Right? It contemplates the band breaking up. And I always tell band members and like, think about this as if you're the person leaving as well as if you're the person stay because everyone thinks, oh, it's not going to be media leaves. If you end up being the person leaving, how would you want them to be treated. The other thing I tell people, not just bands, but certainly technologists, but also then plan for your success plan that this is going to take off, you're going to make millions, it's going to be awesome. Because then you'll be prepared. If it dies and never makes any money. Nobody cares. There's nothing to fight about.

Gigi Johnson:

Oh, I disagree on that. I've met people at the end, at the ends of creative businesses where people kind of go, Okay, so here's all these bills at the end of the day who pays for them? And people want to walk away from a non successful creative venture. And then I mean, I still do have to say this. There's a company I used to work for, where I was not a principal, where people were still trying to track me down to pay bad bills. So you know, there there's detrius of a dead company, especially a non paid payroll and other great things in life. But yes, I agree with your planning for a success. Well, we're, we're near the end of our conversation. Anything that we've missed, you want to mention? We could talk about this forever, but . . .

Dave Ratner:

I agree, and I enjoyed it immensely. I think one thing I always want to mention, when discussing the legal side of things, is that lawyers and legal can be intimidating. And it shouldn't be. And I admit that lawyers get a bad reputation for a good reason. I'm not here to defend lawyers. I'm here to say, don't be afraid of lawyers. Don't be afraid of legal. It's better to deal with it because of We don't, it comes back to bite you. And as I said earlier, you should be able to interview a lawyer, find a lawyer who fits your vision, hopefully your budget, right? And that by ignoring the legal doesn't make it go away, the much better to take it head on and include it, the lawyer should be part of your team. If you're a band, you've got a manager, you've got an agent, you've got to publish this to better lawyer, right. And if you're a technology company, you've got all the different players within the company, your advisors outside of the company, you've got your lawyer, and that lawyer should be a part of the team. Invest in your success, because ultimately, that's all that I want for my clients, because I want to help them be successful. Right. So I think that is one thing, I just encourage people to not be afraid of it to try it out, if not so bad, and it will help you in the long run.

Gigi Johnson:

So Dave, how can people find you on the interwebs?

Dave Ratner:

Through Creative Law Network, so it's creativelawnetwork.com. And I always invite people we're also on all the socials. You can find us on Facebook, Instagram, YouTube, Twitter. Not TikTok yet. I haven't haven't quite gotten to TikTok yet. But you will actually find on our socials, we do little tip time videos, just like hey, here's some 30 seconds on copyright. Here's 30 seconds on music, copyright, et cetera. But ultimately, I invite anyone to reach out to me directly. I'm always happy to have a conversation that really enjoy those conversations. And so creativelawnetwork.com is a great place. . . is the best way to find me.

Gigi Johnson:

Dave, thank you for joining us.

Dave Ratner:

Thank you such a pleasure.