CONFERENCE
ON
CONTENT FOR THE INTERACTIVE AGE
JANUARY 24, 1995

Current Licensing Rights Considerations
in Multimedia Content
Presentation by
Fred Greguras
Materials prepared by
Fred Greguras
Erick Hachenburg
Fenwick & West
Two Palo Alto Square
Palo Alto, CA  94306
(415) 494-0600 Phone
(415) 424-0859 Fax
[email protected]
[email protected]






CURRENT
MULTIMEDIA CONTENT RIGHTS
LEGAL ISSUES
A TOP TEN LIST



1.     IS THERE A CLEARINGHOUSE WHERE I CAN OBTAIN
       THE RIGHT TO USE CONTENT FOR MY MULTIMEDIA PRODUCT?
2.     DO I OWN THE WORK I PAID FOR?
3.     AM I LIABLE FOR SOMEONE ELSE'S INFRINGING USE OF MY
       SERVICE?
4.     WHAT IS THE RIGHT OF PUBLICITY?
5.     WHAT RIGHTS DO I NEED IN ORDER TO USE MUSIC
       IN MY PRODUCT?
6.     AM I LIABLE IF I USE A DIGITAL COPY OF A FEW
       NOTES OF MUSIC IN MY PRODUCT?
7.     WILL I HAVE TO DEAL WITH THE ENTERTAINMENT UNIONS?
8.     CAN I PROTECT MY CHARACTERS FROM BEING COPIED?
9.     SHOULD I WORRY ABOUT MORAL RIGHTS?
10.     HAVE I INFRINGED THE COPYRIGHT IF
       THE UNDERLYING WORK IS NOT RECOGNIZABLE
       IN MY PRODUCT?




1.      IS THERE A CLEARINGHOUSE WHERE I CAN OBTAIN
       THE RIGHT TO USE CONTENT FOR MY MULTIMEDIA PRODUCT?
       �       No general clearinghouse to identify owner, licensing fees, terms, etc. in the U.S. or Japan.
       �       In Japan, there are early stage proposals for at least a rights information clearing house by the Institute for Intellectual
Property and Agency for Cultural Affairs.
       �       In the U.S., private clearance companies are generally used.
(See proposal in materials.)
       �       Many of the properties used in multimedia products are
traditional but the method of use is not standard.
       �       The complexity is causing some content developers to create new works rather than use pre-existing works.

NOTES
In U.S. (None really apply to multimedia usage):
       Copyright Clearance Center
                       �       photocopies
                       �       electronic redistribution and archiving within an
organization "Electronic uses rights"
                       �       voluntary participation
       ASCAP (American Society of Composers, Authors, Publishers)
       BMI (Broadcast Music Inc.)
       �       only grant public performance licenses for music
compositions, not for   consumer CD products
       Harry Fox Agency for music.

In Japan:
       Institute of Intellectual Property
       �       2/94
�       Multimedia Committee
�       Proposed Digital Information Center
�       Clearinghouse for copyrighted works
�       Voluntary not compulsory participation� Licensor
established licensing terms and royalty rates
�       Administration of royalty payments
       Ministry of Education's Agency for Cultural Affairs
       �       11/93
�       Subcommittee on Multimedia of the Copyright Council
�       Proposed Copyright Rights - Information Centralization
       Organization
�       Clearinghouse but more informational at outset than
       administrative regarding royalties
       Both proposals are still in the study stage

       Tips on Obtaining Rights
       �       There is no required copyright registration system in the U.S. or Japan.
       �       There is no requirement to put a copyright notice on a
published work as a condition of protection.
       �       Any right not expressly granted by a licensor is reserved.
       �       General rule is to find the owner and obtain a license or don't use the content.


NOTES:
       Many disputes over scope of rights provisions, today's cases
are disputes over old agreements.
       Consider other media and new media and delivery approach in
negotiations:  "publication and distribution by any variety
of methods on all media whether now known or invented
hereafter".
       Cost, negotiating time factors both increase as desired
scope of rights increases.
       Right of first refusal if no initial rights, as a backup.


2.      DO I OWN THE WORK I PAID FOR?
       Requirements to be a Work Made for Hire
�       Copyright interest.
�       A work prepared by an employee within the scope of employment.
�       A work specially ordered or commissioned, if designated in
writing as a work made for hire, for use as a contribution to a
collective work, as a part of a motion picture or other
audiovisual work or as a compilation [and six other
categories].

NOTES
       Should use a written assignment in all cases except employment.


       Why does it matter?
�       Company is designated as the sole author and thus the sole
owner if it is a WMFH
�       Duration of protection will be a fixed term of 75 years.
�       No concerns about termination rights after 35 years.
�       No concerns about possible moral rights.

NOTES
       35 year termination right does not apply to WMFH
       Duration of protection otherwise is life of author plus 50
years.

       Tips on Works Made for Hire
�       Paying for the work does not mean you own the work.
�       Software developed by an independent contractor as part of a
multimedia work should be designated in writing as a "work made
for hire".
�       A written assignment of rights should be obtained from an
independent contractor developing software to be used alone.
�       Keep patent protection in mind for enabling software.

NOTES
       Consider other IP in the work product.
       Enabling examples include:
       Comptons now rejected patent.
       The Unisys Welch patent on a compression algorithm used in
GIF graphical format.

3.      AM I LIABLE FOR SOMEONE ELSE'S INFRINGING USE OF MY
SERVICE?

�       Infringement:  Strict liability; lack of knowledge or innocence
is not a defense.  Playboy v. Frena; Sega v. MAPHIA; Frank
Music v. CompuServe.
�       Defamation:  No liability if did not know and should not have
known and if no agency relationship.  Cubby v. CompuServe;
Stratton Oakmont v. Prodigy.


NOTES
       Operation of bulletin board or other enabling service such
as a gateway service provider for WWW, FTP or Gopher.
       Stratton is defamation case not yet decided.
       Prodigy's practice of pre-screening for obscenity, other
offensive language and "family service" representation may
make it look more like a publisher who is exercising control
over content.
       Cubby case has agency analysis.
       Frank Music case not yet decided.
       In Frena - "Intent or knowledge is not an element of
infringement:  Knowledge defense rejected.


Tips
�       Place warning labels in agreements, screens, etc. regarding
non-infringement, defamation, profanity, pornography, right of
publicity, etc.
�       Take corrective action whenever you learn of a violation of
warnings (but be cautious about taking on the duty to police).
Once you know of a potential problem, you need to act.
Standard of care increases the more you know or do.


NOTES
       Warnings will help in a defamation defense but not against
infringement claims except possibly for a contributory
infringement defense.
       Publisher vs distributor characterization for defamation
liability.
       Control over content is the basis for characterization
       Publisher has control; distributor does not have control
       "Common Carrier" like telephone company
       Other warnings, disclaimers in service agreements
       Language in agreements re allocation of responsibility for
content and     independent contractor status was important in the
Cubby case.

4.      WHAT IS THE RIGHT OF PUBLICITY?
�       Right of publicity protects one's name, likeness, caricature,
biographical information, voice, signature, photo, endorsement.
�       State law issue
�       Scope, duration of protection, descendability all vary from
state to state.

NOTES
       Rights protect sounds (Beth Midler example) as well as
images - any representation that would reasonably identify
the person (even a Vanna White robot).
       Scope of right expanding particularly in California.  In
California, both common law and statutory.
       Rights vary from state to state.  Forum shopping possible.
       NY has a right of privacy but not publicity.
       Descendability:  was the right exploited during the person's
lifetime.
       Duration:  Under Tennessee law, as long as Elvis is
exploited.


Tips on Rights of Publicity
�       Assume non-celebrities as well as celebrities have a right of
publicity when considering the use of a image or other
likeness.
�       Assume some relevant state will recognize a right of publicity.
�       The medium where the image or other likeness appears is the key
factor.


NOTES
       Medium - First Amendment vs. commercial speech.
                       News reporting or commentary on public
issues.
       Medium  �       newspaper / magazine
       �       encyclopedia
       �       unauthorized biography
       �       game
       Cast your work as a newspaper, periodical, documentary,
biography or encyclopedia.
       Do not cast your work as a game or trading cards.
       Licensors/agents usually don't understand the mass market
economics of multimedia so securing a license may not be
economically feasible.

5.      WHAT RIGHTS DO I NEED IN ORDER TO USE MUSIC IN MY
PRODUCT?
Possible Licensors
�       Composition:
               Songwriter
               Lyricist
�       Sound Recording:


       NOTES
       Composers right of performance is an exclusive right.
       Owner of sound recording does not have an exclusive right of
performance.  Would need a mechanical license for copying
and distribution but not for playing, for example, on a
radio station.
       Use of composition in a multimedia work is not a standard
performance use.  Therefore, a non-standard license will be
needed.

Public Performance Licenses
�       ASCAP and BMI (non-dramatic performances).
�       Not applicable to home use.
�       Applicable to uses in public forums, such as lobbies, trade
shows, corporate presentations, music on-hold.


Reproduction Licenses
�       Synchronization License.
�       Mechanical License.
�       Videogram License.
�       New Media License.

       NOTES
Following are all reproduction licenses and mutually exclusive
of each other:
1)      Synchronization license.
A license to make mechanical reproductions of a
composition, that are accompanied by a motion picture or
other audiovisual work, for use in connection with a
motion picture, theatrical performance and television
broadcast.  Traditional license for "big screen" movies.
2)      Mechanical license (may be compulsory under U.S. Copyright
law).
A license to make a mechanical reproduction of a
composition, which is not accompanied by a motion picture
or other audiovisual work, and which is intended only for
distribution to the public for private use.  Example is a
music CD.
3)      Videogram license (conflicts with synchronization
license).
A license to make a mechanical reproduction of a
composition, which is accompanied by a motion picture or
other audiovisual work, and which is distributed on a
tangible form (e.g., videotape, videodisk, CD-ROM) for the
home market.
4)      New media license is emerging for multimedia products.
Not always available.
A license to make a reproduction of a musical composition
in connection with the distribution of computer software,
karaoke and other new media devices.  This is designed for
multimedia products to reduce confusion as to which other
forms of mechanical licenses may be needed.
1), 2)  are traditional with established rights.
3), 4)  are labels which are defined by owner of the work.  Still evolving and will be defined by the licensor.

Other Music-Related Licenses
�       Print License.
�       Master Use License.


NOTES
       Print license is a license to make and distribute printed
copies of music, such as sheet music and printed music
folios, and reprints of lyrics in books, magazines and print
advertising.
       Master use license is from the sound recording company to
make and distribute copies of the work.  Mechanical license
is from the composer.


Tips on Music Rights
�       The complexity of music licensing is causing some content
developers to create and perform new music works rather than
use preexisting works.
�       Performing rights societies:  BMI, ASCAP, SESAC.
�       AFTRA represents singers as well.
�       Work Made For Hire


NOTES
       Music is a traditional work with traditional licensed uses.
Multimedia uses will not fit into most standard agreements.
       Covers music licensing rights in the U.S.
       SESAC is the representative of European composers in the
U.S.
       American Federation of Television and Radio Artists (AFTRA).
       Consider right of publicity in the voice of the artist.
       WMFH - make sure ownership of sound recording is obtained
whether using existing composition or new composition.

6.      AM I LIABLE IF I USE A DIGITAL COPY OF A FEW NOTES OF
MUSIC IN MY PRODUCT?

�       In Grand Upright Music v. Warner Bros., the court, invoking the
Seventh Commandment, held that it was a copyright infringement
to use three words and the accompanying music.
�       Fundamentally altered the recording industry.  Where before the
industry turned a blind eye, now the industry polices and seeks
relief for digital sampling.


NOTES
       Song involved was "alone again naturally."
       Jarvis case supports this position
       Important because applies to digital sampling generally (of
images, for example).

Tips on Digital Sampling
�       The de minimis defense will rarely work, as the sample will
often be considered qualitatively, if not quantitatively,
significant.
�       The fair use defense will rarely work, as the sample will often
be used for blatantly commercial purposes.
�       Two licenses are needed:  a Mechanical License from the
composer and a Master Use License from the sound recording
company.

NOTES
       Traditional Mechanical and Master Use Licenses will need to be
amended to fit this nontraditional usage.

7.      WILL I HAVE TO DEAL WITH THE ENTERTAINMENT UNIONS?
�       Will likely have to deal with AFTRA or SAG if you produce a
work with actors/actresses in it.
�       American Federation of Television and Radio Artists (AFTRA)
       Represents actors and actresses generally with respect to works
made on videotape.
�       Screen Actor's Guild (SAG)
       Represents actors and actresses generally with respect to works
made on film.

NOTES
       Major concern in Silicon Valley since not used to dealing
with unions.
       Skill of actor/actresses is the issue in whether you must
deal with unions.
       Union employee is not supposed to work for you if you don't
have an agreement with his union.  Electronic Arts has
negotiated an agreement with AFTRA in which EA reportedly
agreed to use only union talent in its productions.
       Each union rules generally protect only itself rather than
other unions.
       Will create moral rights equivalent by contract.
       SAG has Interactive Media Agreement available.  Apparently
not widely accepted because of lack of flexibility.
       Reuse and residual rights.
       Film is apparently of higher quality than a videotape work
for inclusion in a multimedia product.
       Other important guilds:
               Directors Guild of America (DGA).
               Writers Guild of America (WGA).
               Producers Guild of America (PGA).

Tips on Guilds and Unions
�       A member of union may not work for a non-signatory company.
�       Some limitations on use of non-union members if you have a
union agreement.
�       Contractually creates the equivalent of moral rights.
�       Reuse and Residuals
       Approval of additional uses.
       Payments for additional uses.


NOTES
       Union member suffers consequences not non-signatory company.
       Moral rights equivalent - no use for any other purpose
without my consent.
       Standard agreements cover only traditional uses.  Agreements
are unlikely to cover all uses.  Rights grant may cover only
motion picture usage, for example.


8.      CAN I PROTECT MY CHARACTERS FROM BEING COPIED?
Copyrights
�       Copyright only extends to the specific expressions of the
character, not to the type or genre of the character.
�       Protection for literary characters is often not as strong as
for graphical characters.


NOTES
       Detective is type of character; Inspector Clouseau (Pink
Panther) is a specific expression of a character.
       Protection is the key to success for sequel products.
       Copyright has a specific duration of protection unlike
trademark which lasts as long as the trademark is used.

Trademark Rights
�       Protects the use of the character to the extent it identifies
its owner as the source of the products presenting the
character.
�       Trademark protection often extends only to the names and visual
aspects, but not to the abilities and personalities.
�       Indefinite duration, unlike copyright if the trademark
continues to be used.


NOTES
       Image must be source identifying.

Tips on Protection of Characters
�       Register the copyright in the character as an artistic work as
well as the works in which the character is developed.
�       Register the trademark in the character if it is also used as a
trademark.
�       Present, use and develop the character with consistency, and
police the quality of any licensee's use of the character.

9.      SHOULD I WORRY ABOUT MORAL RIGHTS?
What are Moral Rights?
�       Copyright interest
�       Claim of authorship of work (attribution).
�       Prevent modification of work.
�       Control publication or distribution of work.


NOTES
       More likely to be moral rights issues in the creative area
of multimedia content.
       One right is to be recognized as the author or anonymous.
       Prevent changes to a work or publication or distribution
that could harm the author's reputation or honor.

Who Recognizes Moral Rights?
�       Widely adopted in Europe, Canada, Japan - Berne Convention
requirement.
�       National treatment under convention may provide U.S. authors
with greater protection outside of the U.S.
�       U.S. Laws:  Visual Artists Rights Act of 1990.


NOTES
       Berne Convention states regarding moral rights.
       "Even after transfer of rights, author shall have the right
to claim authorship of the work and to object to any
distortion, mutilation or other derogatory action in
relation to the work which would be prejudicial to his
honor.
       Moral rights in Japan are a significant restriction on the
use of content material.  May not be waived in advance.
       Because of national treatment, U.S. authors enjoy broader
moral rights in other countries.  Example is 1988 case in
France in which colorized version of U.S. film ("Asphalt
Jungle") was not permitted to be shown on the basis of moral
rights.
       In the U.S., the Visual Artists Rights Act, 17 U.S.C. �
106A, provides protection for moral rights for works of fine
art, limited editions only - paintings, drawings, some
photographs.  Unlikely to have material effect on multimedia
products.  On-going discussions of expanding moral rights
protection.
       About 11 states have laws, including New York, California.

Tips on Moral Rights
�       Multimedia works incorporate artistic works, the scope of moral
rights is expanding, and the cost of obtaining a waiver is
small.
�       Obtain written agreements to assign, waive and agree not to
assert moral rights (signed by artist, identifying work by
name).
�       Internationally, moral rights are much stronger.  Waiver may
not be effective.


NOTES
       General assignment in invention rights agreements may not be
effective.


10.     HAVE I INFRINGED THE COPYRIGHT IF THE UNDERLYING WORK IS
NOT RECOGNIZABLE IN MY PRODUCT?
�       Unauthorized intermediate copying.
�       Unauthorized modification or preparation of derivative work.


NOTES
       Copying by digitalization process and then changing is often
done.
       Derivative work definition is important regarding royalty
payments.  Definition is often used too loosely which
creates greater royalty payment obligations.

Tips on Intermediate Copying
�       Strictly speaking, unauthorized copying and/or modifying is a
copyright infringement.
�       You must have a license to modify and create a derivative work.
�       Fair use may be a defense to intermediate copying in limited
circumstances as in Sega v. Accolade re disassembly but only if
there is no other way to learn the ideas.
�       No one may ever make a claim if the resulting work is not
substantially similar and does not directly compete with the
copyright owner's product.

NOTES
       A derivative work is one based on one or more preexisting
works, such as a translation, abridgment or any other form
in which a work may be recast, transformed or adapted.
       Derivative works are not a traditional licensed right for
traditional properties.
       Japan -- Implied right to copy in course of disassembly to
learn ideas.
       U.S. -- Atari, Sega Cases.
       State of U.S. law is that intermediate copying in order to
learn unprotected "ideas" needed to create another work is
"fair use" in many circumstances.
               �       object code
               �       authorized copy
               �       copying only to extent necessary
       Why is this important?  For enabling software, creating
compatible or competitive software often requires some type
of copying of another parties software in the process of
disassembly.  For digitalizations, may want to start with a
particular image, for example, a baseball player batting.
       Differentiate process of development from result.

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