Navigating Corporate Challenges: The Essential Role of Entertainment and IP Expertise on Corporate Boards

In today's rapidly evolving business landscape, corporate boards are facing unprecedented challenges. Whether it's adapting to digital transformations, managing intellectual property (IP) in the age of technology, or navigating an increasingly complex legal and regulatory environment, companies are in need of board members with specialized expertise. One area that is often overlooked—but becoming increasingly critical—is the entertainment and IP sectors. Directors who can bring a deep understanding of these areas offer invaluable insights that can strengthen risk management, improve strategic planning, and bolster governance practices.

The Increasing Importance of Intellectual Property

As companies shift from a product-based economy to one driven by content, creativity, and innovation, the importance of intellectual property as a corporate asset has soared. IP management now touches industries far beyond entertainment and media, affecting sectors from technology to consumer goods. Content creation, brand identity, and patented technologies all fall under the umbrella of IP assets, which means that boards need directors who can not only appreciate the value of these assets but also ensure their protection and proper monetization.

Understanding the intricacies of IP is crucial for effective governance. Boards that fail to incorporate IP expertise risk exposing the company to unnecessary litigation, loss of competitive advantage, and missed opportunities for licensing or partnerships. For example, directors who have firsthand experience in IP-heavy industries are better equipped to identify emerging risks, such as the implications of artificial intelligence (AI) on copyright, or the legal ramifications of digital streaming and content sharing platforms.

Risk Management and Legal Oversight

With the fast pace of innovation in digital and creative sectors, corporate boards are also tasked with understanding the legal frameworks that govern intellectual property. This is not limited to traditional industries like film and music but now encompasses technology, biotech, and even manufacturing, where patents and trademarks play a crucial role.

Boards need to be proactive in managing IP-related risks, whether it’s defending patents or copyrights in court, or ensuring compliance with new regulations like data privacy laws and global trade agreements. Legal missteps can be costly, not only in terms of financial penalties but in reputational damage. Having directors who understand these legal intricacies can provide essential guidance, preventing issues before they arise and ensuring that the company remains in compliance with shifting regulatory landscapes.

Moreover, effective risk management in the realm of IP extends beyond merely understanding legal obligations. It involves actively participating in strategic discussions about how to leverage intellectual property for growth, how to guard against infringement, and how to capitalize on new revenue streams from licensing or joint ventures.

Strategic Thinking for the Digital Age

In addition to legal and risk management concerns, strategic thinking is another area where corporate boards can benefit from entertainment and IP sector expertise. In the digital age, traditional business models are being disrupted at an unprecedented rate. Boards need to be forward-thinking, anticipating not only potential risks but also opportunities for growth and innovation. This is particularly true for companies looking to expand into digital content, media platforms, or technologies that rely heavily on creative assets.

Strategic board members with experience in industries driven by intellectual property and creativity are often well-versed in adapting to change, as these sectors are regularly impacted by technological advancements and shifts in consumer behavior. A director with a deep understanding of how IP and digital content evolve can offer critical insights during key decision-making processes, whether it's exploring new partnerships, expanding into new markets, or defending against potential disruptors.

Governance and Compliance: More Than Just Box-Ticking

In the wake of high-profile corporate scandals, governance has become a central focus for boards across all industries. But while regulatory compliance is a key aspect of good governance, it must go beyond mere box-ticking. Effective governance involves fostering a culture of accountability, transparency, and proactive decision-making.

Boards can gain a competitive edge by including members who understand their fiduciary duty to investors and how to integrate compliance with broader business goals. For companies managing complex portfolios of IP assets, this can mean ensuring proper royalty auditing, monitoring licensing agreements, and enforcing rigorous standards in contract negotiations. Strong governance in these areas is essential not only for maintaining shareholder trust but also for securing the company’s long-term financial health.

Adapting to Regulatory Change

The intersection of government policy, public relations, and intellectual property is another area where experienced directors add value. Rapid changes in technology, coupled with evolving public policy, mean that boards must be constantly aware of how regulatory shifts could impact their business. Whether it’s negotiating the evolving frameworks surrounding digital copyright, managing data privacy regulations, or complying with new international trade agreements, businesses need directors who understand the broader implications of these changes.

Directors with experience navigating these regulatory waters can help boards anticipate challenges, develop strategies to adapt, and maintain compliance without sacrificing innovation. For example, upcoming changes in copyright law may have significant implications for companies producing digital content, and directors with specialized knowledge can ensure that the company is well-positioned to adapt to these changes.

Conclusion

The need for specialized expertise on corporate boards is clear, particularly in industries driven by intellectual property and rapid technological change. As companies face growing challenges related to governance, risk management, and legal oversight, having directors who understand the nuances of IP management, regulatory compliance, and strategic innovation can be the difference between thriving and merely surviving in today's competitive environment. As the role of intellectual property continues to expand, companies that invest in board members with this unique expertise will be better equipped to manage risks, seize opportunities, and drive long-term value.

Can a Lay Witness Offer an Expert Opinion?

Can a Lay Witness Offer an Expert Opinion? If you're a trial attorney, this question may come up more often than you'd expect, because introducing lay witnesses is one method of surprising the counterparty, since there are fewer disclosure requirements and procedures for lay witnesses than for expert witnesses in US federal and state legal proceedings.

As an expert witness (not an attorney) I find that the distinction between lay and expert witnesses is critical. Lay witnesses typically provide testimony based on their personal knowledge or observation, whereas expert witnesses are called upon to offer specialized knowledge that aids the court in understanding complex matters. However, the question often arises: can a lay witness ever give an opinion that might resemble expert testimony? The answer lies in a careful analysis of the rules of evidence and case law, which you should discuss with your legal counsel. The below represents my understanding as a non-lawyer, thus it should not be taken as legal advice.

The Role of Lay Witnesses

A lay witness is someone who testifies about facts they personally observed or experienced. According to Rule 701 of the Federal Rules of Evidence, a lay witness may offer an opinion, but only if it is:

Rationally based on their perception: The opinion must stem directly from the witness's personal observations and experiences, not from specialized or technical knowledge.

Helpful to understanding their testimony or determining a fact in issue: The opinion must assist the court or jury in grasping what the witness saw or experienced, providing clarity to otherwise factual testimony.

Not based on scientific, technical, or other specialized knowledge: If an opinion requires specialized knowledge, it falls under the domain of an expert witness, per Rule 702.

In other words, lay witnesses can offer opinions that are grounded in everyday reasoning and personal experience. For example, a lay witness may testify that someone appeared “nervous” or “angry” based on their demeanor, or that a vehicle seemed to be speeding. These observations are not considered expert opinions because they are accessible to any reasonable person without specialized training.

The Role of Expert Witnesses

An expert witness, on the other hand, is specifically qualified by knowledge, skill, experience, training, or education. Experts are called to offer testimony on subjects that require a deeper understanding beyond common experience, such as medical diagnoses, technical data, or financial calculations. Their testimony must adhere to the standards of Rule 702, which governs the admissibility of expert opinions.

The Gray Area: When Lay Testimony Resembles Expertise

There are situations where the line between lay and expert opinion blurs. In such instances, courts scrutinize the nature of the testimony to determine whether a lay witness’s opinion crosses into expert territory.

For example, in United States v. Figueroa-Lopez, a lay witness was prohibited from giving an opinion that the defendant was acting in the manner of an experienced drug trafficker. The court ruled that this opinion required specialized knowledge and, therefore, fell under the purview of expert testimony.

However, there are cases where lay testimony can approach expert-like opinions without crossing the line (i.e., when opinions are grounded in firsthand knowledge gained from practical experience, not formal expertise).

Practical Scenarios: When Lay Witnesses May Offer Opinion

• Eyewitness Accounts: A lay witness can offer opinions about the speed of a vehicle, the identity of a person they know, or the emotional state of someone they observed. These opinions are rooted in common sense and direct observation.
  
  
• Business Practices: Business owners or employees with firsthand knowledge of standard operating procedures can provide lay opinions about routine matters within their industry. For instance, a restaurant owner may testify about typical food preparation procedures without being considered an expert.
  
  
• Medical Conditions: A lay witness can testify about obvious, observable medical conditions (e.g., someone appeared to have difficulty breathing or seemed unconscious), but diagnosing a specific medical condition requires expert testimony from a medical professional.

Other Jurisdictions Differ, Including U.S. State Courts

Many US states have adopted rules that are similar or identical to the Federal Rules of Evidence, particularly Rule 701 (lay witness opinion testimony) and Rule 702 (expert witness testimony). However, states may interpret or apply these rules differently, leading to variations in what types of testimony are admissible in state courts.  For example,  New York has not formally adopted the FRE, but its courts follow a similar approach regarding lay and expert testimony. New York courts may allow a lay witness to offer opinions in certain situations where the witness has specialized knowledge from experience, but this remains limited. For instance, a New York lay witness might testify about common business practices in their industry without being formally qualified as an expert, as long as the opinion is based on personal experience and not technical or specialized knowledge.

Technically different states follow different standards for the admissibility of expert opinions, namely:

• The Daubert Standard: Under Daubert (adopted by federal courts and many states), the judge acts as a gatekeeper to ensure that expert testimony is scientifically reliable and relevant. This standard tends to be stricter in ensuring that the expert's methodology is sound and applicable.
  
  
• The Frye Standard: Some states, including California (at least historically), follow the Frye standard, which requires that the expert’s testimony be based on scientific methods that are “generally accepted” in the relevant field. Frye is often seen as a more lenient standard than Daubert in some respects.

Under California law, a lay witness may provide opinions that are rationally based on their perception and helpful to understanding the testimony or determining a fact. However, California courts may allow more flexibility in certain types of lay opinions, especially when it comes to areas like business practices or common knowledge.

The difference between Daubert and Frye standards primarily impacts expert testimony, but it also affects how strictly courts will distinguish between lay and expert opinions. A state following the Frye standard might allow lay opinions on subjects that Daubert jurisdictions would restrict to experts, depending on the situation.

Conclusion

While lay witnesses cannot offer expert opinions, they are permitted to provide certain types of opinion testimony based on their personal observations and experiences. The key is that their opinions must be rational, helpful to the trier of fact, and not based on specialized knowledge. This rule ensures that courts maintain the balance between reliable expert testimony and useful lay observations, all while upholding the integrity of the legal process.

Understanding the distinction between lay and expert testimony is vital in preparing for trial. Lawyers must ensure that lay witnesses stay within the bounds of what they are allowed to testify about, while also leveraging their observations effectively to support their case. As always, careful consideration of the rules of evidence will guide which opinions are admissible and which must be left to the experts.

When it comes to intellectual property infringement cases, having the right damages expert can make all the difference in a successful outcome. At my firm, Boschan Corp., we specialize in IP infringement damages and are here when you need a seasoned expert to support your case. As a trusted partner in forensic accounting, we’re ready to help. Visit our website: boschan.com for more information or call us today at (424) 248-8866 to clear conflicts and get started.